UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 10

 

 

GENERAL FORM FOR REGISTRATION OF SECURITIES

Pursuant to Section 12(b) or 12(g) of the Securities Exchange Act of 1934

 

UNDER SECTION 12(B) OR (G) OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

MYSKIN, INC.

(Exact name of registrant in its charter)

 

California       26-1391338
(State or jurisdiction of incorporation or organization)       (I.R.S. Employer Identification Number)
         

410 32 nd St., Suite 203

Newport Beach, CA

     

 

92663

 (Address of principal executive offices)       (Zip Code)

 

 

Issuer's telephone number: (949) 209-8953 

Issuer’s facsimile: (949) 258-5379

 

Securities to be registered under Section 12(b) of the Act: None

Securities to be registered under Section 12(g) of the Exchange Act:

Title of each class to be registered

Common Stock, $.001

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definition for “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large Accelerated Filer £ Accelerated Filer £ ¨
       
Non-Accelerated Filer £ ¨ Smaller Reporting Company S

 

 

EXPLANATORY NOTE

We are filing this General Form for Registration of Securities on Form 10 to voluntarily register our common stock, par value $0.001 per share (the “Common Stock”), pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Once this registration statement is deemed effective, we will be subject to the requirements of Regulation 13A under the Exchange Act, which will require us to file annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, and we will be required to comply with all other obligations of the Exchange Act applicable to issuers filing registration statements pursuant to Section 12(g) of the Exchange Act.

Unless otherwise noted, references in this registration statement to “MySkin, Inc.,” the “Company,” “we,” “our” or “us” means MySkin, Inc.

FORWARD LOOKING STATEMENTS

There are statements in this registration statement that are not historical facts. These “forward-looking statements” can be identified by use of terminology such as “believe,” “hope,” “may,” “anticipate,” “should,” “intend,” “plan,” “will,” “expect,” “estimate,” “project,” “positioned,” “strategy” and similar expressions. You should be aware that these forward-looking statements are subject to risks and uncertainties that are beyond our control. For a discussion of these risks, you should read this entire Registration Statement carefully, especially the risks discussed under “Risk Factors.” Although management believes that the assumptions underlying the forward looking statements included in this Registration Statement are reasonable, they do not guarantee our future performance, and actual results could differ from those contemplated by these forward looking statements. The assumptions used for purposes of the forward-looking statements specified in the following information represent estimates of future events and are subject to uncertainty as to possible changes in economic, legislative, industry, and other circumstances. As a result, the identification and interpretation of data and other information and their use in developing and selecting assumptions from and among reasonable alternatives require the exercise of judgment. To the extent that the assumed events do not occur, the outcome may vary substantially from anticipated or projected results, and, accordingly, no opinion is expressed on the achievability of those forward-looking statements. In the light of these risks and uncertainties, there can be no assurance that the results and events contemplated by the forward-looking statements contained in this Registration Statement will in fact transpire. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. We do not undertake any obligation to update or revise any forward-looking statements.

 

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ITEM 1.  BUSINESS

(a) Description of Business and

MySkin, Inc. (“MySkin”, the “Company”, “we”, or “our”), a California Corporation, was incorporated on November 15, 2007.  We ceased to be a development stage enterprise effective January 1, 2008 as our planned principal operations had commenced.

 

MySkin offers management services to MedSpas which provide skin resurfacing, skin rejuvenation, vein treatment, microdermabrasion, hair reduction, chemical peels and other age-management services. These MedSpas take a comprehensive approach to skin care, by offering a wide range of services. Our management services include, but are not limited to, marketing, providing working capital for inventory and accounts receivable, facilities, equipment, administration, personnel and management expertise for MedSpas. Utilizing electronic medical records, vendor relationships and customer service protocols, we intend to brand and replicate our management services with other doctors and practitioners in demographically selected metropolitan areas. 

 

Whereas many practitioners understand how to provide various services, many do not desire to or understand how to set up and properly run a business. We partner with these practitioners to help them focus on providing the best services possible. If successful in this area we plan to offer similar services in age-management medicine centers.

 

We currently lease the facility for our center and complete improvements in the facility that houses the MedSpa business.  We will own all of the equipment utilized in the MedSpa, and we provide all of the administrative and sales support on all non-medically related areas.

 

On March 1, 2009, we entered into a Facilities and Management Services Agreement with Maria Teresa Agner, MD, Inc. (“MTA”) a California profession corporation pursuant to which we granted MTA the rights to perform advanced skin services in our current center.  MTA is a related party as Marichelle Stoppenhagen, our president and principle shareholder, owns 49% of MTA. As a result, MTA is responsible for hiring all physicians and nurse practitioners who operate in the MedSpa. Under this agreement, we pay all costs and expenses reasonably related to the provision of our services, including but not limited to office rent, utilities and other occupancy costs, compensation benefits and employment costs associated with all non-licensed personnel, general liability insurance, equipment lease and maintenance costs, advertising and promotion, support personnel and contracted consultants, office supplies, and all such other direct and indirect expenses reasonably incurred by Company, with respect to the provision of the Management Services for the Practice (collectively, "Management Expenses"). Under this agreement, MTA is obligated to reimburse Management Expenses and pay a monthly service fee equal to forty percent (40%) of gross collected revenue with a minimum amount of $2,500 per month (“Service Fee”). Gross collected revenue is equal to all revenues for services performed and products sold by in the current center minus the cost of products sold. MTA has retained the services of Ms. Stoppenhagen, our president, Maria Teresa Agner, MD to provide services at our facility. We have not advanced any funds or loans to provide working capital for the operation of MTA.

 

Given sufficient capital, we plan to acquire and grow our locations nationwide through partnering with physicians to develop new MedSpas, acquiring failed MedSpas, and by opening new store locations near young retirement communities.

 

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(b) Business of Issuer

We manage and operate a medical spa business and retail skincare products business.  In addition, we lease for our center and have completed improvements in the facility that houses the spa business, the retail business and the medical practice of MTA.  We own the equipment utilized in the MedSpa and the medical practice, and we contract with non-physicians who work with managing the MedSpa, the medical practice and the management company.

 

Our business model depends primarily upon a retail market approach for generating customers.  We generate business through marketing and advertising, public relations efforts with local charities, city and county organizations, hospitals and medical providers, networking and promotional events and open houses.  Internal marketing includes brochures, posters, magazines, health promotion articles, and educational materials that point to our services.   Once we have a new client, client follow-up, client referral programs and return visits are utilized to maintain and grow our business.

 

Management and Medical Services Agreement

 

On March 1, 2009, we entered into a Facilities and Management Services Agreement with MTA a California profession corporation pursuant to which we granted MTA the rights to provide advanced skin services in our current center.  MTA is a related party as Marichelle Stoppenhagen, our president and principle shareholder, owns 49% of MTA. As a result, MTA is responsible for hiring all physicians and nurse practitioners who operate in the MedSpa. Under this agreement, we pay all costs and expenses reasonably related to the provision of our services, including but not limited to office rent, utilities and other occupancy costs, compensation benefits and employment costs associated with all non-licensed personnel, general liability insurance, equipment lease and maintenance costs, advertising and promotion, support personnel and contracted consultants, office supplies, and all such other direct and indirect expenses reasonably incurred by Company respecting the provision of the Management Services for the Practice. MTA, in addition to reimbursement of Management Expenses, a monthly service fee equal to forty percent (40%) of revenue, is payable, with a minimum amount of $2,500 per month.

 

We are responsible for hiring and providing non-medical personnel, In addition, MTA gives us the right to manage all aspects of the medical practice’s financial and operational activities, including accounting, billing and collecting, staffing, inventory management, equipment procurement and management, facility management, marketing and other management services.  We provide all operational and financial management services outside the scope of clinical practice.

 

Under the Agreement, we are responsible for all management services related to the ordinary and usual business affairs of the practice.  We advise the practice in matters of compliance, policies, procedures marketing, billing and collection and other matters related to the operation of the practice; we provide financial, accounting, human resource and management services for the practice; we supervise and maintains records and files of the practice in compliance with HIPPA requirements; we manage all computer, software, bookkeeping and clerical services; we negotiate and secure contracts with vendors, suppliers and third party insurance companies related to the practice; and, we assist the practice in quality assurance and compliance programs.  We provide the specific space and improvements utilized for the MedSpa.  We provide equipment and furniture utilized in the MedSpa.

 

Under the Agreement, we pay all operating expenses of the MedSpa including physician compensation.  In addition, we loan MTA any amounts of monthly shortfall in the funds necessary to pay all expenses of the practice and the practice repays loans with interest to us when collections exceed monthly expenses.

 

Our Services

 

We provide management services to companies that deliver of medical esthetics in an upscale facility located in a high-traffic retail corridor.   Our business concept combines a customer-service oriented MedSpa for advanced skincare services and products.  We believe in creating a new experience for the health-conscious healthcare consumers who have increased service expectations and are seeking not just to get well, but to stay well and look well.  Our facility, the interior design, aroma therapy, programmed visual and sound media fulfills are designed to not look, act or smell like a doctor’s office.  We believe this environment, experience and service can be replicated and branded giving individual a consistent experience.  

 

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Plan of Operations

 

We plan to expand by partnering with physicians to acquire failed MedSpas and by opening new store locations near young retirement communities.  We plan to implement a sustainable business model focused on:

 

·   Cost containment;
·   Lead generation;

 

·   Front desk manner;
·   Superior customer relations;

 

·   Customer retention;
·   Minimizing employee turnover; and

 

·   Maintaining high employee job satisfaction;

 

Our goal is to generate revenue levels relative to cost structure that allow for break even by the end of fiscal year 2012.  In addition, we plan to offer higher frequency, lower price point services that keep utilization levels high to drive client growth and satisfaction; the ability to differentiate quality, service and safety vis-а-vis the competition; and strong marketing / advertising to effectively deliver the message to the target customer.  In the next 12 months, we believe we will need to raise an additional $250,000 to execute our plans of acquisition and expansion.  We will need to scale back our growth to the extent we are unable to raise this money. For our current operations, we do not foresee additional material costs in operations. To the extent that we expand our operations, our costs will vary dramatically depending on the size of the acquired organization or the location of the new venue.

 

We will implement the following keys to maximize our potential for future success:

 

  1.   Lead Generation.  Focus on lead generation by utilizing low cost marketing tactics.
   
  2.   Front Desk Manner.  The front desk staff will be the first impression on the customer and sets the experience which leads to increased satisfaction and sales.
   
  3.   Customer Relations.  Staff members will understand the importance of bonding with customers and striking the perfect balance between professional expertise, ethics, credibility, and personal chemistry, for higher client retention. We believe in hiring the highest caliber of practitioners.
   
  4.   Customer Retention.  The client develops a sense of loyalty and devotion to the MedSpa which supersedes superficial attractions such as price, discounts, location, and other factors. Unlike the patient acquisition in medical practices, customer loyalty has to be earned. While doctors use insurance providers to drive patients in the door, MedSpa customers pay out of pocket for their services. As a result, the competition to win and retain this new breed of "retail" aesthetic client is fierce. MySkin will make a point to teach each manager how to deal with this challenge by providing them with loyalty building programs containing special offers and events to take the relationship with each client to a higher level.

 

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In any area we target for entrance, we will first plan and develop a strategy specific to the marketplace.  A comprehensive market analysis will be done.  This will include studying the demographics.  We will also see whether the market is saturated by other MedSpas. A feasibility study will then be done.  A site selection will then be performed.

 

Next, the director will be trained in our standard operating procedures, sales and service training and financial management. Upon completion, we will work with the director to hire staff which is composed of trained and licensed individuals who understand how to provide comfort and compassion to our client/patients. A characteristic of our team members will be self-motivated, high-energy individuals who have a thirst for knowledge and have mastered their skills. A bonus and option program will be tied to attaining specific revenue goals with the attempt to maintain a positive atmosphere and keep the staff focused and functioning as a team as well as retaining staff.

 

Vendors

 

Our vendor for our laser-based machine, the Harmony XL is Alma Lasers LTD. This was a one time purchase. We do not have a contract with Alma Lasers LTD.

 

We purchase our injectibles from Allergan, Inc. and chemicals used in conjunction with the chemical peels from Lucrèce Physicians' Aesthetic Research, Inc.  

 

Our main skin care vendors for our products are Obagi Medical Products, Inc., and ColorScience which provide us with routine terms. These products are purchased on an as needed basis at a rate set by our vendors and are generally paid for at the time of sale. We do not have a contractual commitment with our vendors to buy a certain amount of their products.

 

Plan of Operation

 

We plan to expand through partnering with physicians to open new MedSpa locations in young retirement communities and the acquisition of failed MedSpas.  

 

Milestones

 

In the next twelve months, we have set the following milestones:

 

1. 0-180 days after the effectiveness of this Form 10 we intend to raise additional funds of approximately $250,000 through the private placement of debt or equity under Regulation D of the Securities Act of 1933.

 

2. 90-180 days after effectiveness of this Form 10 we intend to open another location. In order to open another location, we are dependent on securing addition funding. To the extent that we are unable to do so, we will push this out.

 

3. 180-270 days after effectiveness of this Form 10 we intend to begin look for candidates for acquisition. We will pursue candidates for acquisition through various trade associations. We plan to utilize a combination of funding raising and our stock to consummate such a transaction.

 

4. 270-365 days following effectiveness of this Form 10 we intend to either begin open five new locations or make acquisitions.

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Business Model

 

We plan to implement a sustainable business model that focuses on the following:

·                      Cost conscience;

·                      Lead generation;

·                      Front desk manner

·                      Customer relations;

·                      Low employee turnover by high employee job satisfaction

 

We need to raise additional cash in order to implement and expand our operations. We will need approximately $250,000 in order to allow us to expand our operations in the next 12 months. To the extent we do not raise additional capital, our growth strategy will be curtailed.

 

If we cannot or do not raise such funds and our revenue is below our expectation, we may be forced to cease operations. We do not intend to hire additional employees at this time until we complete additional fundraising or our profitability allows it.

 

Marketing Plan

 

We plan to market the Company through the following strategies:

 

·   Market new services and products to current clients
·   Customer referral program and VIP program which will offer the customer rewards for referring new clients

 

·   Local advertising that targets customers in the immediate area
·   Customer acquisition of poorly performing MedSpas

 

·   Email marketing to through a monthly E-Newsletter which provides monthly specials.

 

We have developed a marketing strategy to promote our alternative age prevention health practices and treatments in a spa-like setting. This program will include ads, mailings, promotions, seminars and website. We have developed a project plan that maximizes the power of our brand, and product line, which identifies our facilities’ key market segments, including both skin care and anti-aging programs for many ages. The plan incorporates the pre-opening phase, the public launch, plus ongoing marketing activities to reinforce that the MedSpa and products are easily recognized.

 

Using local and community papers, direct mail advertising, radio and some cable advertising we plan to use a modest budget. The print materials for newspaper will include bulleted services for both MedSpa services and a ‘free consultation’ invitation. We will create urgency with space is limited or limited time offer. After the opening of a new store, we will focus on direct mail aimed at our targeted demographic.

 

Our website will be a powerful business tool. Our web strategy and marketing plan will inform new clients, increase product sales, and improve profitability. Visually showcasing our MedSpa with photos, demonstrating before and after results of our procedures and treatments strongly benefits our business. We plan to have a FAQ’s page on common procedures as well as a page dedicated to alternative practices and up to date information on the latest in cosmetic products and services.

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Our MedSpa’s primary selling tool, our services menu, describes not only the treatments that are offered but details how each one is unique. Our menu is visually pleasing and reflects the unique atmosphere of our location and facility.

 

Another important marketing tool that we have is our signage. We are located and plan to locate future locations in high traffic areas.  Our signage will draw attention to our services in a clear and concise manner.

 

We will hold weekly and monthly open house where clients can invite their to friends lectures on wellness issues acting as a vehicle to sell services and products. Discounts will be given for those who book an appointment that night.

 

With a large number of existing patients, many patients come in for the initial consults for microdermabrasion or laser hair removal (the lower priced items), and graduate to having more expensive procedures such as skin rejuvenation, Juvaderm, BOTOX. Skin rejuvenation, laser hair removal, microdermabrasion, and cosmetic injectables, provides a solid foundation to secure a full service MedSpa. From this platform, one can augment a variety of other treatments including Aesthetic skin care such as facial treatments, and massage and body therapies. Additionally, many patients will turn into clients within the spa services arena of our facility and visa versa.

 

Our media objectives are to establish our image as full service MedSpa with extras inclusive and a warm, friendly, tranquil atmosphere. We will maximize efficiency in the selection and scheduling of advertisements by;

 

Industry

 

The management of services business of the aesthetic treatment market consists of a broad range of company owned and physician owed companies. Some companies in this industry manage business services through our sourced management services companies and some physicians manage these services themselves.

 

The provision of management services is effected by the aesthetics industry in which it operates. In addition, both in the United States and throughout the rest of the world, an aesthetic spa market is emerging, which includes day spas, destination spas, MedSpas, and resort and hotel spas. Along with conventional massage, body, and skincare treatments, these facilities are beginning to introduce non-invasive energy-based aesthetic treatments performed by spa technicians and professionals.

 

  Competition

 

The MedSpa industry is highly competitive. Most of our competitors have greater financial, personnel and other resources than MySkin and therefore have greater leverage in acquiring prospects, hiring personnel and marketing their products and services. At the present time, we believe that there are no dominant competitors in the integrated medical healthcare, preventive/wellness and medical skin-care services but we would classify regional competitors as Mana Medical Associates, Mercy Medical Clinics and Wellness and Skin Therapy Center and national competitors as Radiance MedSpa Franchise and Sona Med Spas.

 

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Government Regulation

 

Certain of the Federal and state laws and regulations impacting our business and the services provided at our current and future clinics are set forth below. As we expand into new jurisdictions, we will analyze and constantly reevaluate our compliance with applicable Federal, state and local law.

 

  Corporate Practice of Medicine. Certain states, including California, impose restrictions related to the practice of medicine by business entities. To comply with relevant California state law, we entered into a management services agreement with MTA. See the above for a description of the management services agreement.
  Licensing. Certain state and Federal laws and regulations govern the administration and licensing of the medical and technical staff providing services at our clinics. Each physician, registered nurse and physician assistant providing professional services at our clinics must, to the extent required by applicable law, hold valid licenses and have the required qualifications and/or experience for such services. Each person operating lasers at our clinics must, to the extent required by applicable law, hold valid licenses and/or have the required qualifications and/or experience for such services. Furthermore, these medical professionals are prohibited from providing services beyond the scope of their licensure and must operate lasers under appropriate supervision. In addition, certain states require that facilities providing laser hair removal services obtain a license. See “California Regulation of Physician Supervision” below for a description of applicable California.
  Anti-Kickback and Fee Splitting Laws. The business conducted at our clinics is subject to various state and Federal regulations restricting (i) kickback, rebate or division of fees between physicians and non-physicians, (ii) the manner in which a prospective patient may be solicited, (iii) the receipt or offering of remuneration as an inducement to refer patients and (iv) physician self-referral. See “California Anti-Kickback and Fee Splitting Laws” below for a description of applicable California state law.
  FDA Approval. The lasers used in our clinics are medical devices subject to the jurisdiction of the Food and Drug Administration, or the FDA. The FDA has established stringent approval requirements applicable to the initial use and new uses of the lasers used in our clinics.

 

  Patient Confidentiality. The maintenance and safeguarding of patient records, charts and other information generated in connection with the provision of professional medical services at our clinics are regulated by state and Federal confidentiality laws and regulations, including the Health Insurance Portability and Accountability Act of 1996, the California Confidentiality of Medical Information Act (relevant to our California clinics).

 

California Restriction on the Corporate Practice of Medicine

 

Section 2052 of the California Business & Professions Code provides that “(a)ny person who practices or attempts to practice, or who holds himself or herself out as practicing...[medicine] without having at the time of so doing a valid, unrevoked, or unsuspended certificate...is guilty of a public offense.” Further, Section 2400 of the Business & Professions Code provides that “(c)orporations and other artificial entities shall have no professional rights, privileges, or powers.” The California Medical Board has interpreted the forgoing to generally restrict the ownership of a corporation practicing medicine in California. Accordingly, under California law, a business entity such as the Company is not permitted to engage in the practice of medicine, although we may provide management services to a medical practice so long as we do not exercise excessive control over the medical practice, among certain other legal requirements. With respect to our California clinics, we provide marketing and practice management services to MTA pursuant to a management services agreement. The management services agreement is intended to comply with applicable California state law.

 

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California Regulation of Physician Supervision

 

In performing its services under the management services agreement, MTA engages, compensates and supervises advanced registered nurse practitioners, physician assistants and registered nurses (either as employees or independent contractors) to assist with laser and esthetic services performed at our current clinics. Accordingly, MTA must comply with relevant California state laws and regulations applicable to the provision of healthcare services by advanced registered nurse practitioners, physician assistants and registered nurses.

 

The California Medical Board has taken the position that a physician assistant may generally provide laser services under the supervision of a physician. Under California regulations (Title 16, Section 1399.545), such supervising physician must be available in-person or by electronic communication at all times during the physician assistant’s provision of such services.

 

However, the applicable nurse and nurse practitioner regulations are not as clear as the regulations governing supervision of a physician assistant. California Business & Professions Code 2725 provides that the practice of nursing includes operating under standardized procedures. In addition, the California Board of Registered Nursing has indicated that it is within a registered nurse’s scope of practice to use laser therapy for patients if there is an approved “standardized procedure,” or a policy or protocol developed through collaboration by the physician and the registered nurse. Although the standardized procedure must describe the scope of supervision required, the relevant California regulations (Title 16, Section 1474) describing the requirements for standardized procedures do not contain a legal definition of “supervision.” The California Medical Board has indicated that absent a legal definition, the plain English definition applies, where “supervision” is defined as “the act of supervising, which is to oversee, to direct, to have charge, to inspect, to provide guidance and evaluation.” The Medical Board has further elaborated that when functioning under “standardized procedures,” physicians need not be present in the facility when the procedures are performed; however, the facility must be a medical setting under the control of the physician. Further, the Medical Board has expressed its view that an appropriate prior examination is also required where prescriptive devices (such as lasers) will be used, which such examination may not be delegated to registered nurses. The Medical Board has not provided a definition of an “appropriate medical examination.” Pursuant to guidance issued by the Medical Board, after performing the examination, a physician, advanced registered nurse practitioner or physician assistant may delegate a procedure that utilizes a prescriptive device to a nurse working under standardized procedures. Furthermore, the Medical Board has indicated that physicians must be within a geographical distance that enables them to effectively provide supervision and support when needed or upon request. The California Medical Board has not formally adopted regulations that set forth all of the views expressed in this paragraph.

 

We believe that the services provided in our clinics by MTA are in compliance with the California laws and regulations governing licensing and physician oversight. A physician is responsible for the overall clinical operations of our clinic and is present or is available telephonically and/or via teleconference while laser procedures are performed at our clinic. Dr. Agner provides supervision for our clinic; provided, however, when Dr. Agner is unavailable, Dr. Agner or MTA makes arrangements with another board certified physician to provide supervision. A significant majority of the procedures conducted in our clinic are supervised by a physician available telephonically or via teleconference. In our clinic, a physician, advanced registered nurse practitioner or physician assistant performs patient examinations and is on site when laser procedures are performed. A physician, advanced registered nurse practitioner, physician assistant or registered nurse performs the laser procedures. We believe that this satisfies the California laws, rules and regulations governing supervision of allied health care providers including the supervision of physician assistants and the implementation of standardized procedures and protocols for registered nurses and advanced registered nurse practitioners.

 

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California Anti-Kickback and Fee Splitting Laws

 

Section 445 of the California Health and Safety Code, provides that “no person, firm, partnership, association or corporation, or agent or employee thereof, shall for profit refer or recommend a person to a physician, hospital, health-related facility, or dispensary for any form of medical care or treatment of any ailment or physical condition. The imposition of a fee or charge of any such referral or recommendation creates a presumption that the referral or recommendation is for profit.” A violation of Section 445 is a misdemeanor and may subject the offender to imprisonment in the county jail for not longer than one year and/or a fine of not more than $5,000.00. Further, a violation of Section 445 may be enjoined by the California Attorney General.

 

Section 650 of the California Business and Professions Code also makes it unlawful for a “licensee,” including a physician, to pay or receive any compensation or inducement for referring patients, clients or customers to any person or entity, irrespective of any membership or proprietary interest in or with the person or entity receiving the referral. Violation of the statute is a public offense punishable by imprisonment and/or a fine of not more than $10,000. Section 650 provides, however, that it is not unlawful for a physician to refer a patient to a health care facility solely because the physician has a proprietary interest or co-ownership in a health care facility, provided that (1) the physician’s return on investment for that proprietary interest or co-ownership is based upon the amount of capital investment or proportional ownership of the physician; and (2) the ownership interest is not based on the number or value of any patients referred. Further, Section 650 provides that the payment or receipt of consideration for services other than the referral of patients that is based on a percentage of gross revenue or a similar type of contractual arrangement is not unlawful if the consideration is commensurate with the value of the services furnished or with the fair rental value of any premises or equipment lease or provided by the recipient to the payor.

 

We believe that our relationships with MTA are in compliance with California’s anti-kickback and fee-splitting statutes.

 

Insurance

 

 We currently possess insurance to cover the services we provide.  We believe this will cover potential liabilities we may be exposed to.  However, this may not be enough be enough to cover potential claims.

 

Company’s office

 

We currently have only one location.  Our office is located at 410 32nd St. Ste. 203 Newport Beach, CA 92663and our telephone number is (949) 209-8953.

 

Employees

 

We currently have no employees.  Upon future expansion we plan to hire additional employees. We conduct our operations through the services of several independent contractors.

 

Intellectual Property, Trade Names, Trademarks and Service Marks

 

Our overall policy will be to pursue registration of our marks whenever possible and to oppose vigorously any infringement of its marks. There can be no assurance that if and when we develop and implement our trademarks and/or service marks, that such trademarks and/or service marks will afford protection against competitors with similar products and services. There can also be no assurance that our trademarks and/or service marks will not be infringed upon or designed around by others, or that we can adequately prosecute or defend any infringements. Currently, we have not filed an application to register the mySkin trademark.

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Corporate Information

 

Our principal executive offices are located at 410 32nd St., Ste. 203, Newport Beach, CA 92663.  Our telephone number is (949) 209-8953.  Our website is www.myskinmed.com.

 

  (c) Reports to security holders.

 

(1) The Company is not required to deliver an annual report to security holders and at this time does not anticipate the distribution of such a report.

(2) The Company will file reports with the SEC. The Company will be a reporting company and will comply with the requirements of the Exchange Act.

(3) The public may read and copy any materials the Company files with the SEC at the SEC'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 SEC at 1-800-SEC-0330. Additionally, the SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, which can be found at http://www.sec.gov.

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ITEM 1.A RISK FACTORS 

 

  An investment in the Company is highly speculative in nature and involves an extremely high degree of risk.

 

Our limited operating history may not serve as an adequate basis to judge our future prospects and results of operations.

 

Our business plan involves operations in a highly competitive industry with few barriers to entry and our working capital, including the funds available to market our services, is limited.  There are no assurances whatsoever that we will ever successfully implement our business plan, generate any significant revenues, attain profitability or positive cash flow from operating activities.  In addition, following the date of this prospectus we will become subject to the reporting requirements of the Securities Exchange Act of 1934 with respect to quarterly, annual and other reports to be filed with the SEC.  These reporting obligations will require us to spend significant amounts on audit and other professional fees.  Because of our limited capital resources we may be unable to meet our working capital requirements which would have a material adverse effect on our business, financial condition and results of operations.  We are subject to all the risks inherent in a start-up enterprise.  Our prospects must be considered in light of the numerous risks, expenses, delays, problems and difficulties frequently encountered in the establishment of a new business.

 

A significant majority of our revenues are currently derived from a management services agreement with MTA.

 

The revenues from our California clinics, which represent a significant majority of the Company’s revenues, are derived from services provided under a management services agreement with MTA. See Business Description. Under the terms of the management services agreement, our management service fee is equal to 40% of the gross revenues of MTA. We can give no assurance that a qualified replacement will be expeditiously identified and approved in the event our management service agreement is terminated. The termination of our management services arrangement could have a material adverse effect on our financial condition, cash flows and results of operations.

 

The physicians providing services in our clinics will likely not devote 100% of their time to the Company’s business.

 

Dr. Agner, our current contracting physician, devotes approximately 10% of his time to (i) treating patients outside of his relationship with us, (ii) research and continuing education, (iii) managing the business affairs of MTA and (iv) interviews and other media activities which may or may not benefit our business. We anticipate that all of the primary physicians with whom we may contract, and who assume responsibility for ensuring the overall supervision and operation of our future clinics will similarly devote less than 100% of their time to our business or the provision of services at our clinics. There is a risk that our contracting physicians will not devote the requisite time to our business or the provision of services at our clinics, thereby adversely effecting our results of operations and financial condition.

 

We have incurred losses in prior periods and may incur losses in the future.

 

We incurred net losses of $121,994 for the period from November 15, 2007 (inception) to December 31, 2011. We cannot be assured that we can achieve or sustain profitability on a quarterly or annual basis in the future. Our operations are subject to the risks and competition inherent in the establishment of a business enterprise. There can be no assurance that future operations will be profitable. We may not achieve our business objectives and the failure to achieve such goals would have an adverse impact on us.

 

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Our independent auditors’ report states that there is a substantial doubt that we will be able to continue as a going concern.

 

We have received a report from our independent auditors that includes an explanatory paragraph describing their substantial doubt about our ability to continue as a going concern. This may negatively impact our ability to obtain additional funding or funding on terms attractive to us and may negatively impact the market price of our stock.

 

Our failure to partner with physicians and nurse practitioners in a competitive labor market could limit our ability to execute our growth strategy, resulting in a slower rate of growth.

 

Our business depends on our ability to continue to work with a sufficient number of qualified licensed doctors and nurses. We have contracted with MTA to staff our medical clinic.   Although we believe we have an effective recruitment process, there is no assurance that we will be able to secure arrangements with sufficient numbers of licensed doctors and nurses or retain the services of such practitioners. We may also recruit our personnel from a variety of employment agencies and services. If we experience delays or shortages in obtaining access to qualified physicians and nurses, we would be unable to expand our services and operations, resulting in reduced revenues.

 

We rely upon a third party to provide our medical personnel and as a result, we could be adversely affected by the inability of the third party to provide sufficient personnel, the financial condition of the third party or by the deterioration or termination of our relationship with the third party.

 

As a result of state regulations, we are unable to directly employ medical personnel, as it would constitute the unlawful practice of medicine.  As a result, we have entered into a Facilities and Management Services Agreement with MTA.  Pursuant to this agreement, MTA has the exclusive right to operate a medical practice in our facility, including the responsibility of hiring the medical personnel (physicians and nurses).  A significant decline in MTA’s financial condition or an inability of them to hire enough qualified medical personnel could adversely affect our results of operations.

 

Our business may be adversely affected by any downturn in the U.S. economy and other market factors outside of our control.

 

Our business is dependent on discretionary consumer spending. A significant downturn in the national economy, heightened inflation and prolonged economic weakness in the spending of discretionary funds, could adversely affect our business, financial condition and results of operations. Our products and services are not eligible for insurance reimbursement and as such any reduction in consumer spending may adversely affect our business. Although we believe we have adopted an effective strategy of steady growth so that we would be less negatively influenced by adverse economic conditions, there can be no assurance that we will be successful in expanding the nature and scope of our product and service offerings.  In such an environment, our business, financial condition and results of operations could be materially and adversely affected.

 

We may not succeed in establishing intellectual property or our brand name, which could prevent us from acquiring customers and increasing our revenues.

 

A significant element of our business strategy is to build market share by continuing to promote and establish our brand name or trademark.  Currently, we do not have a registered trademark or other intellectual property.  If we cannot establish our brand identity through our trademark, we may fail to build the critical mass of customers required to substantially increase our revenues.  Promoting and positioning our brand in the marketplace will depend largely on the success of our sales and marketing efforts and our ability to provide a consistent, high quality customer experience.  To promote our brand, we expect that we will incur substantial expenses related to advertising and other marketing efforts.  If our brand promotion activities fail, our ability to attract new customers and maintain customer relationships will be adversely affected, and, as a result, our financial condition and results of operations will suffer.  If we fail to register MySkin as a trademark it may hurt our efforts to build brand identity.

 

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If any of our third party suppliers or manufactures is required to obtain regulatory approval and fail to obtain or maintain the regulatory approvals, and cannot adequately meet our supply needs, our business could be harmed.

 

We use third party products, equipment and other supplies that are available from limited commercial sources.  Some of these products and equipment are regulated by the FDA, and our supply may be interrupted or impaired by regulatory issues that such vendors may experience.  There is no guarantee that any such vendors will be able to meet existing regulatory requirements without significant expense, or be able to satisfy any new regulatory requirements. We may not have the ability to substitute material from an alternate source.  If we experience product or equipment shortages as a result of any regulatory issues experienced by our vendors or for any other reason, such shortages could have an adverse impact on our ability to sell our services and products and negatively impact our revenue.

 

If we are unable to avoid significant exposure to product liability claims, our business could be harmed.

 

We are exposed to professional and product liability and other claims in the event that our services or the use of our products is alleged to have resulted in adverse effects.  While we will continue to take precautions, we may not avoid significant product liability exposure.  We do not currently maintain product liability insurance, and there is no guarantee that we will have coverage in the future sufficient to alleviate this risk.  If we are sued for any injury caused by our services or products we use, we could suffer a significant financial loss.

 

We lack long-term contracts with vendors and clients and there can be no assurance that we will successfully establish or maintain any long-term contracts to buy or sell ours products and services in the future.

 

The MedSpa industry is predominantly a localized industry with few dominant companies and many single owner locations.  As such, there is significant competition for vendors and clients and less incentive for long term contract opportunities.  Additionally, we do not have long-term contracts with our vendors to buy and sell our products.  We may not be able to sell our current product line and have to sell an alternative product line which may not have customer acceptance.  This could adversely affect our product revenue.  Additionally, due to our relative small size and order volume, larger competitors may obtain price advantages due to larger volume of sales in the same products.  We plan to establish long term contracts with our product vendors which would give us volume discounts when certain goals were accomplished.

 

We have generated little revenue from our business and we may need to raise additional funds in the near future. If we are unable to do so, we might be forced to discontinue our operations.

 

Our cash requirements may vary materially from those now planned depending on numerous factors, including the results of our sales activities, the acquisition of competitors, purchase of equipment or additional property leases and various market conditions. We believe that the net proceeds from our prior capital raising activities, together with our current and projected revenue and cash flow from future operations, if any, will be sufficient to fund our working capital and other capital requirements in the future. We will require additional capital to conduct our business activities if we decide to grow our business. Based on current and expected operations, we anticipate that we will require approximately $250,000 to expand our operations over the next twelve months. There can be no assurance that additional funds will be available on terms attractive to us or at all. If adequate funds are not available, we may be required to curtail our planned expansion and/or otherwise materially reduce our operations. Even if such funds are available, there can be no assurance that our business will be successfully developed or received. . If we are to sell additional shares, such sale may result in dilution to existing shareholders. Furthermore, there is no assurance that we will not incur debt in the future, that we will have sufficient funds to repay our future indebtedness or that we will not default on our future debts, jeopardizing our business viability. Finally, we may not be able to borrow or raise additional capital in the future to meet our needs or to otherwise provide the capital necessary to conduct business and meet our business objectives, which might result in the loss of some or all of your investment in our common stock.

 

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We are dependent on key personnel to operate and grow our business.

 

Our success will be largely dependent upon the efforts of Marichelle Stoppenhagen. We do not currently have an employment agreement with Ms. Stoppenhagen. The loss of the services of this individual could have a material adverse effect on our business and prospects. There can be no assurance that we will be able to retain the services of such individual in the future. In addition, our future success is dependent on our ability to attract, train, retain and motivate high quality personnel.

 

No public trading market currently exists for our common stock, which makes it difficult for our stockholders to sell their common stock.

 

Our shares of common stock are not currently publicly traded. We intend in the near term to apply for listing of our common stock on the Over-the-Counter Bulletin Board (“OTC Bulletin Board”). Although we will be applying to list our common stock on the OTC Bulletin Board, there can be no assurance that our application will be granted or that an active public market will develop or be sustainable for our common stock. Additionally, there can be no assurance any broker will be interested in trading our stock. Therefore, it may be difficult to sell your shares of common stock if you desire or need to sell them. You may have no more liquidity in your shares of common stock even if we are successful in the future in registering with the SEC and listing on the OTC Bulletin Board.

 

Our President and Chairman holds a controlling interest in our company, and she may be able to control or influence certain corporate actions without approval by other stockholders.

 

As of January 13, 2012, our President and Chairman, Ms. Stoppenhagen beneficially owns approximately 70% of our outstanding common stock. As a result, she may be able to control or substantially influence the outcome of matters requiring approval by the stockholders of the Company, including the election of directors and approval of significant corporate transactions.

 

We have never paid dividends and have no plans to do so in the future.

 

Holders of shares of our common stock are entitled to receive such dividends as may be declared by our board of directors. To date, we have paid no cash dividends on our shares of common stock and we do not expect to pay cash dividends on our common stock in the foreseeable future. We intend to retain future earnings, if any, to provide funds for operations of our business. Therefore, any return investors in our common stock may have will be in the form of appreciation, if any, in the market value of their shares of common stock. See “Dividend Policy.”

 

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ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

 

The following discussion should be read in conjunction with our Financial Statements and notes thereto appearing elsewhere in this prospectus. The following discussion contains forward-looking statements, including, but not limited to, statements concerning our plans, anticipated expenditures, the need for additional capital and other events and circumstances described in terms of our expectations and intentions. Forward-looking statements are statements not based on historical information and which relate to future operations, strategies, financial results or other developments.  Forward-looking statements are based upon estimates, forecasts, and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control and many of which, with respect to future business decisions, are subject to change.  These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward-looking statements made by us, or on our behalf.  We disclaim any obligation to update forward-looking statements.  You are urged to review the information set forth under the captions for factors that may cause actual events or results to differ materially from those discussed below.

 

Overview

 

We were incorporated in California on November 15, 2007.   Given sufficient capital, we plan to acquire and grow our locations nationwide, as described in the “Description of Business.”

 

MySkin offers management services to MedSpas which provide skin resurfacing, skin rejuvenation, vein treatment, microdermabrasion, hair reduction, chemical peels and other age-management services. These MedSpas take a comprehensive approach to skin care, by offering a wide ranch of services. Our management services include, but are not limited to, marketing, capital, facilities, equipment, administration, personnel and management expertise for MedSpas. Utilizing electronic medical records, vendor relationships and customer service protocols, we intend to brand and replicate our management services with other doctors and practitioners in demographically selected metropolitan areas. 

 

Our auditors have issued a going concern opinion which means they concluded there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills. The opinion was issued because we have generated minimal revenues and minimal revenues are anticipated for the foreseeable future.

 

Cash and Cash Equivalents

 

 As of December 31, 2011, we had cash and cash equivalents of $56,294. We anticipate that a substantial portion shall be used as working capital and to execute our growth strategy and business plan. As such, we further anticipate that we will have to raise additional capital through debt or equity financings to fund our operations during the next 12 months.

 

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Critical Accounting Policies and Estimates

 

Accounts Receivable - We extend credit to our customers. Collateral is generally not required. Credit losses are provided for in the financial statements based on management’s evaluation of historical and current industry trends. Although we expect to fully collect amounts due, actual collections may differ from estimated amounts.  We estimate an allowance for doubtful accounts based upon a percentage of revenue earned.  When we expect that there is less than a 10% chance of collection, we write the receivable off to its allowance for doubtful accounts.  We do not typically accrue interest or fees on past due amounts.

 

Revenue Recognition   — We recognize revenue associated with our business on product sales after shipment of the product to the customer or the service is performed.

 

Advertising Costs --- Advertising costs have primarily consisted of advertising materials and costs of trade shows we attended. All advertising costs have been expensed as incurred.

 

Shipping and Handling Costs   — We record the revenue related to shipping and handling costs charged to customers in revenues.  The related expense is recorded in cost of sales in the accompanying statements of operations.

 

Fiscal Year 2011 Compared to Fiscal Year 2010

 

Results from Operations

 

Revenues

Revenues were $75,856 and $62,337 for the years ended December 31, 2011 and 2010, respectively. The revenue for the year ended December 31, 2011 consisted $61,776 for of aesthetic services performed by MTA and $14,080 for products sold. The revenue for the year ended December 31, 2010 consisted $44,637 for aesthetic services performed by MTA and $17,700 for products sold.

 

Cost of Sales

Cost of sales was $61,584 and $41,782 for the years ended December 31, 2011 and 2010. The cost of sales for the year ended December 31, 2011 consisted $21,408 for of aesthetic services performed by MTA, $23,922 for materials used in those services and $16,254 for products sold. The cost of sales for the year ended December 31, 2010 consisted $22,334 for of aesthetic services performed by MTA, $10,515 for materials used in those services and $8,933 for products sold.

 

Selling, General and Administrative Expenses

Selling, general and administrative (“S,G&A”)expenses were $54,836 and $44,003 for the years ended December 31, 2011 and 2010, respectively. The increase in selling, general and administrative expenses of $10,833 was due to an increase in consulting expenses. . The S,G&A for the year ended December 31, 2011 consisted primarily of $22,036 of depreciation expense, $8,250 of rent expense, and $6,917 of staffing expense depreciation expense, $9,000 of rent expense, . The S,G&A for the year ended December 31, 2010 consisted primarily of $20,360 depreciation expense and $9,000 of rent expense.

 

Other Income

Other income was zero and $12,915 for the years ended December 31, 2011 and 2010, respectively. This was related to proceeds from an insurance recovery.

 

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Liquidity and Capital Resources

 

We may experience illiquidity and may be dependent on our management and shareholders to provide funds to maintain our activities.  In the event that we are not able to raise additional capital, Marichelle Stoppenhagen has indicated they are willing to accrue their expenses until such time that we are financially stable. Net cash used in operating activities in 2011 and 2010 was $49,842 and 2,339, respectively.  Cash provided by operating activities in 2011 consisted mainly of a decrease of $43,224 in accounts payable to a related party due to a forgiveness of debt.

 

Net cash used in investing activities in 2011 and 2010 was $7,972 and zero, respectively which was due to the purchase of equipment.  

 

Net cash provided by financing activities in 2011 and 2010 was $110,500 and zero respectively.  In December 2011, we entered into a Revolving Promissory Note (the “Note”) with Marichelle Stoppenhagen, our president.  Under the terms of the Note, Ms. Stoppenhagen agreed to advance us, from time to time and at the request of the Company, amounts up to an aggregate of $100,000 until December 31, 2012.  All advances shall be paid on or before December 31, 2012 and interest shall accrue from the date of any advances on any principal amount withdrawn, and on accrued and unpaid interest thereon, at the rate of six percent (6%) per annum, compounded annually.  In the Event of Default, the Holder shall be held in a first credit position on the entire amount due on this Note. We immediately withdrew $50,000 to fund our plans. Currently, there is $50,000 remaining to us to draw upon under this Note as of December 31, 2011.

 

In December 2011, Marichelle Stoppenhagen, our president, forgave amounts owed to her by the Company of $60,500 which we recorded as a capital contribution.

 

We plan to seek additional funding of $250,000 to grow faster.  In the event that we do not receive these funds, we do not have any capital commitments and believe that our current working capital is sufficient to fund our operations for the next 12 months if we take a more conservative growth strategy.  The amount our future capital requirements, however, depends primarily on the rate at which we begin generating revenues and the gross profit margins we are able to achieve. Cash used for operations will be affected by numerous known and unknown risks and uncertainties including, but not limited to, our ability to successfully market our services and the degree to which competitive services adversely impact our anticipated gross profit margins.  As long as our cash flow from operations remains insufficient to completely fund operations, we will deplete our financial resources.  If our business does not grow at the rate we internally project, we may be required to seek additional capital through equity and/or debt financing.  If we raise additional capital through the issuance of debt, this will result in interest expense.  If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership held by existing stockholders may be reduced and those stockholders may experience significant dilution.  In addition, new securities may contain certain rights, preferences or privileges that are senior to those of our common stock.  Should it be necessary to raise additional working capital, there can be no assurance that acceptable financing can be obtained on suitable terms, if at all.  If we were unable to obtain the financing necessary to support our operations, we could be unable to continue as a going concern.  In that event, we could be forced to cease operations and our stockholders could lose their entire investment in our Company.

 

Off-Balance Sheet Transactions

 

There are no off-balance sheet items, and all transactions are in U.S. dollars, and we are not subject to currency fluctuations or similar market risks.

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ITEM 3.   DESCRIPTION OF PROPERTY

 

We currently occupy approximately 600 square feet of office space located at 410 32nd St., Ste. 203, Newport Beach, CA 92663. We have a month to month lease which we pay $650 per month from an unrelated third party. The lease does not have a renewable clause.

 

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ITEM 4.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND   MANAGEMENT

 

The following table sets forth, as of January 13, 2012, the number and percentage of outstanding shares of common stock beneficially owned by (a) each person known by us to beneficially own more than five percent of such outstanding common stock, (b) each director of the Company, (c) each named executive officer of the Company, and (d) all our directors and executive officers as a group. We have no other class of capital stock outstanding. Share ownership is deemed to include all shares that may be acquired through the exercise or conversion of any other security immediately or within the next sixty days. Such shares that may be so acquired are also deemed outstanding for purposes of calculating the percentage of ownership for that individual or any group of which that individual is a member. Unless otherwise indicated, the stockholders listed possess sole voting and investment power with respect to the shares shown.

 

Name and Address of Beneficial Owner(1)   Title of Class   Amount and Nature Of Beneficial Ownership(2)   Percent of Class
Brookstone Capital LLC     Common       150,000       10.6 %
                         
Paul Matthews     Common       150,000       10.6 %
                         
Marichelle Stoppenhagen     Common       1,000,000       70.4 %
                         
All Executive Officers and Directors as a Group (1)             1,000,000       70.4 %
                         
Total             1,300,000       91.6 %

___________

 

(1)   The address of Ms. Stoppenhagen, 410 32nd St., Ste. 203, Newport Beach, CA 92663.

(2) The foregoing beneficial owners hold investment and voting power in their shares.

 

 

ITEM 5.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

 

The following table sets forth the names, positions and ages of our current directors and executive officers and the date such person became one of our directors or executive officers. Our directors were elected by a meeting. Our directors are typically elected at each annual meeting and serve for one year and until their successors are elected and qualify. Officers are elected by our board of directors and their terms of office are at the discretion of our board. There are no family relationships among our directors, executive officers, director nominees or significant employees. All of our directors, except for Ms. Stoppenhagen, are independent as determined by the NASDAQ listing standards.

 

Name   Age   Position
Marichelle Stoppenhagen     37   Director, President, Chief Financial Officer and Secretary
           

 

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Marichelle Stoppenhagen has been a Director, President and Chief Financial Officer of Myskin since December 2007.  Ms. Stoppenhagen is a Registered Nurse who has four years of experience in the MedSpa Industry.  Ms. Stoppenhagen worked for Sona MedSpa from 2004 until 2007. Prior to this, Mrs. worked as a Registered Nurse at New York University Hospital from 2001 until 2003.  Ms. Stoppenhagen holds a Bachelor of Science in Nursing from Dominican College in New York.

 

All directors hold office until the next annual meeting of the stockholders of the Company and until their successors have been duly elected and qualified. The Company’s Bylaws provide that the Board of Directors will consist of no less than three members. Officers are elected by and serve at the discretion of the Board of Directors.  

 

Board Experience

  Our board of directors has diverse and extensive knowledge and expertise in healthcare that is of particular importance to us. Our current director was nominated to the board of directors on the basis of the unique skills she brings to the board. We will select additional directors based upon the experience and unique skills they bring as well how these collectively enhance our board of directors as we expand. On an individual basis:

Our Chairman, Ms. Stoppenhagen, has over 10 years of experience in the medical esthetics industry. Her comprehensive experience and extensive knowledge and understanding of the healthcare and specifically medical esthetics has been instrumental in the creation, development and launching of our company, as well as our current strategy.

(b) Significant Employees.

None.

(c) Family Relationships.  

None.

(d) Involvement in Certain Legal Proceedings .

There have been no events under any bankruptcy act, no criminal proceedings and no judgments, injunctions, orders or decrees material to the evaluation of the ability and integrity of any director, executive officer, promoter or control person of Registrant during the past five years.

(e) The Board of Directors acts as the Audit Committee and the Board has no separate committees. The Company has no qualified financial expert at this time because it has not been able to hire a qualified candidate. Further, the Company believes that it has inadequate financial resources at this time to hire such an expert. The Company intends to continue to search for a qualified individual for hire.

(f) Code of Ethics

The Company has adopted a code of ethics that applies to its principal executive officers, principal financial officer, principal accounting officer or controller, or persons performing similar functions. A copy of the Company’s code of ethics may be obtained free of charge by contacting the Company at the address or telephone number listed on the cover page hereof.

In summary, MySkin expects employees at all levels to observe and respect the laws and regulations and standards of business conduct that govern the conduct of our business. The Company is committed to designing, applying, and enforcing a corporate compliance program that will assist its employees in achieving this goal.

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All employees are expected to read and understand this Code, uphold these standards in day-to-day activities, comply with all applicable policies and procedures, and ensure that all contractors, representatives and agents are aware of, understand and adhere to these standards.

ITEM 6.   EXECUTIVE COMPENSATION

 

The summary compensation table below shows certain compensation information paid for services rendered in all capacities to us by our principal executive officer and by each other executive officer whose total annual salary and bonus exceeded $100,000 during the years ending December 31, 2011 and 2010. Other than as set forth below, no executive officer’s total annual compensation exceeded $100,000 during our last fiscal period.

 

Summary Compensation Table

 

Name and Principal Position   Year   Salary     Bonus     Stock Awards     Option Awards     Non-Equity Incentive Plan Compensation     Non-qualified Deferred Compensation Earnings     All Other Compensation (2)     Total
Marichelle Stoppenhagen(1)                                                  
    2010   $  4,500     -     -     -     -     -     $ -     $  4,500
President, Chief Financial Officer and Director   2011   $ 5,600       -       -       -       -       -     $ -     $ 5,600
                                                                   

 

(1)   Marichelle Stoppenhagen, our President was paid at a rate of $65.00 per hour for services rendered for the years ended December 31, 2011 and 2010.
   

We entered into a consulting agreement with Marichelle Stoppenhagen, our President, whereby she was paid at a rate of $65.00 per hour for services in conjunction with running the operations.  

 

None of the executive officers have received a bonus or deferred compensation.

 

Outstanding Equity Awards at December 31, 2011 and 2010: None

 

Option Exercises and Stock Vested Table: None

 

Pension Benefits Table: None

 

Nonqualified Deferred Compensation Table: None.

 

All Other Compensation Table: None.

 

Perquisites Table: None.

 

There are no existing or planned option/SAR grants.

 

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Director Compensation

 

Our directors did not receive any compensation in the fiscal years ending December 31, 2010 and 2011.

 

All directors receive no cash compensation for their services as directors.

 

Employment Contracts and Termination of Employment and Change in Control Arrangements with any of the Board of Directors.

 

There are no employment contracts, compensatory plans or arrangements (except as referenced above regarding Ms. Stoppenhagen’s consulting contract), including payments to be received from the Company with respect to any executive officer of the Company which would in any way result in payments to any such person because of his or her resignation, retirement or other termination of employment with the Company or its subsidiaries, any change in control of the Company or a change in the person's responsibilities following a change in control of the Company. Nor are there any agreements or understandings for any director or executive officer to resign at the request of another person. None of the Company's directors or executive officers is acting on behalf of or will act at the direction of any other person.

 

Compensation Pursuant to Plans; Pension Table: We have no retirement, pension, profit sharing, or other plan covering any of our officers and directors.

 

We have adopted no formal stock option plans for our officers, directors and/or employees. We reserve the right to adopt one or more stock options plans in the future. Presently we have no plans to issue additional shares of our common or preferred stock or options to acquire the same to our officers, directors or their affiliates or associates except for the board of director’s compensation plan.

 

 


ITEM 7. 
 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 

Related Person Transactions

 Other than the transactions described below, since our inception, there has not been, nor is there currently proposed, any transaction or series of similar transactions to which we were or will be a party:

  - in which the amount involved exceeds $120,000; and
  - in which any director, executive officer, shareholder who beneficially owns 5% or more of our common stock or any member of their immediate family had or will have a direct or indirect material interest.

 

On March 1, 2009, we entered into a Facilities and Management Services Agreement with Maria Teresa Agner, MD, Inc. (“MTA”) a California profession corporation pursuant to which we granted MTA the rights to operate advanced skin services in our current center.  MTA is owned 51% by Maria Teresa Agner, MD and 49% by Marichelle Stoppenhagen, our president and principle shareholder. As a result, MTA is responsible for hiring all physicians and nurse practitioners who operate in the MedSpa. Under this agreement, we pay all costs and expenses reasonably related to the provision of our services, including but not limited to office rent, utilities and other occupancy costs, compensation benefits and employment costs associated with all non-licensed personnel, general liability insurance, equipment lease and maintenance costs, advertising and promotion, support personnel and contracted consultants, office supplies, and all such other direct and indirect expenses reasonably incurred by Company respecting the provision of the Management Services for the Practice. MTA, in addition to reimbursement of Management Expenses, a monthly service fee equal to forty percent (40%) of revenue, is payable, with a minimum amount of $2,500 per month. Ms. Stoppenhagen, our president, owns a minority interest of MTA.

 

 

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Promoters.

None

Corporate Governance and Director Independence.

The Company has not:

  established its own definition for determining whether its directors and nominees for directors are “independent” nor has it adopted any other standard of independence employed by any national securities exchange or inter-dealer quotation system, though our current director would not be deemed to be “independent” under any applicable definition given that he is an officer of the Company; nor
  established any committees of the board of directors.

 

Given the nature of the Company’s business, its limited stockholder base and the current composition of management, the board of directors does not believe that the Company requires any corporate governance committees at this time. The board of directors takes the position that management of a target business will establish committees that will be suitable for its operations after the Company consummates a business combination.

As of the date hereof, the entire board serves as the Company’s audit committee.

ITEM 8.   LEGAL PROCEEDINGS.

 

Presently, there are no pending legal proceedings to which the Registrant is a party or as to which any of its property is subject, and the Registrant does not know nor is it aware of any legal proceedings threatened or contemplated against it.

ITEM 9.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

 

(a) Market Information.

The Company’s common stock is currently not quoted on the OTC Markets or the OTC Bulletin Board. Therefore, there is no market information.

 

Quarter Ended   High     Low  
March 31, 2010   $ N/A     $ N/A  
June 30, 2010     N/A       N/A  
September 30, 2010     N/A       N/A  
December 31, 2010     N/A       N/A  
March 31, 2011     N/A       N/A  
June 30, 2011     N/A       N/A  
September 30, 2011     N/A       N/A  
December 31, 2011   $ N/A     $ N/A  

 

There is no closing price of our common stock as we are not reported.

- 25 -
 

(b) Holders

As of January 13, 2012, there were 36 holders of record of our common stock.

(c) Dividends.

The Registrant has not paid any cash dividends to date and does not anticipate or contemplate paying dividends in the foreseeable future. It is the present intention of management to utilize all available funds for the development of the Registrant's business.

(d) Securities Authorized for Issuance under Equity Compensation Plans .

None.

 


  ITEM 10. 
 RECENT SALES OF UNREGISTERED SECURITIES.

None

 

ITEM 11.   DESCRIPTION OF REGISTRANT’S SECURITIES

We have 1,420,000 shares of our common stock issued and outstanding as of January 13, 2012.

 

Common Stock

 

We are authorized to issue up to 50,000,000 shares of common stock, $0.001 par value. Holders of our common stock are entitled to one vote for each share in the election of directors and on all matters submitted to a vote of stockholders. There is no cumulative voting in the election of directors.

 

The holders of the common stock are entitled to receive dividends, when and as declared, from time to time, by our board of directors, in its discretion, out of any of our assets legally available therefor.

 

Upon the liquidation, dissolution or winding up of the Company, the remaining assets of the Company available for distribution to stockholders will be distributed among the holders of common stock, pro rata based on the number of shares of common stock held by each.

 

Holders of common stock generally have no preemptive, subscription, redemption or conversion rights.

 

This stock is considered a penny stock as such Penny Stocks must, among other things:

 

·   Provide customers with a risk disclosure statement, setting forth certain specified information prior to a purchase transaction;
·   Disclose to the customer inside bid quotation and outside offer quotation for this Penny Stock, or, in a principal transaction, the broker-dealer's offer price for the Penny Stock;

 

·   Disclose the aggregate amount of any compensation the broker-dealer receives in the transaction;
·   Disclose the aggregate amount of the cash compensation that any associated person of the broker-dealer, who is a natural person, will receive in connection with the transaction;

 

·   Deliver to the customer after the transaction certain information concerning determination of the price and market trading activity of the Penny Stock. Non-stock exchange and non-NASDAQ stocks would not be covered by the definition of Penny Stock for:

 

(i)   issuers who have $2,000,000 tangible assets ($5,000,000 if the issuer has not been in continuous operation for 3 years);

 

(ii)  transactions in which the customer is an institutional accredited investor; and

 

    (iii) transactions that are not recommended by the broker-dealer.

 

- 26 -
 

Penny Stock Rules

 

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 SEC 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.

 

Preferred Stock

 

We have authorized 5,000,000 shares of preferred stock of which none are issued and outstanding. Our board of directors has the authority to determine the designation of each series of preferred stock and the authorized number of shares of each series. The board of directors also has the authority to determine and alter the rights, preferences, privileges and restrictions granted to or imposed upon any wholly unissued series of shares of preferred stock and to increase or decrease (but not below the number of shares of such series then outstanding) the number of shares of any such series subsequent to the issuance of shares of that series. Any or all rights of the preferred stock may be greater than the rights of the common stock. The issuance of preferred stock with voting and/or conversion rights may also adversely affect the voting power of the holders of common stock.

 

Certain Anti-Takeover Provisions

 

Stockholders’ rights and related matters are governed by California General Corporation Law, our articles of incorporation and our bylaws. Certain provisions of the California Private Corporations Law may discourage or have the effect of delaying or deferring potential changes in our control. The cumulative effect of these terms may be to make it more difficult to acquire and exercise control of the Company and to make changes in management. Furthermore, these provisions may make it more difficult for stockholders to participate in a tender or exchange offer for common stock and in so doing may diminish the market value of the common stock.

 

One of the effects of the existence of authorized but unissued shares of our common stock may be to enable our board of directors to render it more difficult or to discourage an attempt to obtain control of the Company and thereby protect the continuity of or entrench our management, which may adversely affect the market price of our common stock. If in the due exercise of its fiduciary obligations, for example, our board of directors were to determine that a takeover proposal were not in the best interests of the Company, such shares could be issued by the board of directors without stockholder approval in one or more private placements or other transactions that might prevent or render more difficult or make more costly the completion of any attempted takeover transaction by diluting voting or other rights of the proposed acquirer or insurgent stockholder group, by creating a substantial voting block in institutional or other hands that might support the position of the incumbent board of directors, by effecting an acquisition that might complicate or preclude the takeover, or otherwise. See “Risk Factors—We have additional securities available for issuance, which, if issued, could adversely affect the rights of the holders of our common stock.”

 

Our bylaws provide that special meetings of stockholders may be called only by our board of directors, the chairman of the board, or our president, or as otherwise provided under California law.

 

- 27 -
 

Dividends

Dividends, if any, will be contingent upon the Company’s revenues and earnings, if any, capital requirements and financial conditions. The payment of dividends, if any, will be within the discretion of the Company’s Board of Directors. The Company presently intends to retain all earnings, if any, for use in its business operations and accordingly, the Board of Directors does not anticipate declaring any dividends prior to a business combination.

Trading of Securities in Secondary Market

There is currently no trading of our securities in any markets.

Rules 504, 505 and 506 of Regulation D

We do not intend to conduct a registered offering of our securities at this time.

Transfer Agent

Currently the Company acts as its own transfer agent. However, the Company plans to appoint a different transfer agent within the next six months.

(b) Debt Securities. 

None.

(c) Other Securities To Be Registered.

None.

ITEM 12.   INDEMNIFICATION OF DIRECTORS AND OFFICERS.

 

The California Corporations Law, under which we are organized, permits the inclusion in the articles of incorporation of a corporation of a provision limiting or eliminating the potential monetary liability of directors to a corporation or its stockholders by reason of their conduct as directors. The provision would not permit any limitation on, or the elimination of, liability of a director for disloyalty to his or her corporation or its stockholders, failing to act in good faith, engaging in intentional misconduct or a knowing violation of the law, obtaining an improper personal benefit or paying a dividend or approving a stock repurchase that was illegal under California law. Accordingly, the provisions limiting or eliminating the potential monetary liability of directors permitted by California law apply only to the “duty of care” of directors, i.e., to unintentional errors in their deliberations or judgments and not to any form of “bad faith” conduct.

 

Our articles of incorporation contain a provision which eliminates the personal monetary liability of directors to the extent allowed under California law. Accordingly, a stockholder is able to prosecute an action against a director for monetary damages only if he or she can show a breach of the duty of loyalty, a failure to act in good faith, intentional misconduct, a knowing violation of law, an improper personal benefit or an illegal dividend or stock repurchase, and not “negligence” or “gross negligence” in satisfying his or her duty of care. California law applies only to claims against a director arising out of his or her role as a director and not, if he or she is also an officer, his or her role as an officer or in any other capacity or to his or her responsibilities under any other law, such as the federal securities laws.

- 28 -
 

In addition, our articles of incorporation and bylaws provide that we will indemnify our directors, officers, employees and other agents to the fullest extent permitted by California law. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling the Company pursuant to the foregoing provisions, we have been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by us of expenses incurred or paid by a director, officer or controlling person of us in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

 

No pending litigation or proceeding involving a director, officer, employee or other agent of us as to which indemnification is being sought exists, and we are not aware of any pending or threatened material litigation that may result in claims for indemnification by any director, officer, employee or other agent.

 

- 29 -
 

 

ITEM 13.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

MYSKIN, INC.

 

Financial Statement

December 31, 2011 and 2010

 

TABLE OF CONTENTS

 

    PAGE
Report of Independent Registered Public Accounting Firm   31
Financial Statements as of and for the years ended December 31, 2011 and 2010    32
Balance Sheet    32
Statement of Operations   33
Statement of Stockholders’ Equity   34
Statement of Cash Flows   35
Notes to Financial Statements    36

 

- 30 -
 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

MySkin, Inc.

Newport Beach, California

 

We have audited the accompanying balance sheets of MySkin, Inc., (the “Company”) as of December 31, 2011 and 2010 and the related statements of operations, stockholders’ equity, and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these 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 audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of internal control over financial reporting. Our audit considered 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 financial statements. An audit also includes 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 financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2011 and 2010 and the results of its operations, changes in equity and its cash flows for years then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has incurred significant losses from operations has an accumulated deficit of $121, 994 as of December 31, 2011. These conditions raise substantial doubt as to the ability of the Company to continue as a going concern. These financial statements do not include any adjustments that might result from such uncertainty.

 

 

/s/ Anton & Chia LLP

Newport Beach, California

January 13, 2012

- 31 -
 

 MYSKIN, INC.

BALANCE SHEETS

 

    December 31,
    2011   2010
ASSETS                
CURRENT ASSETS                
Cash and cash equivalents   $ 56,294     $ 3,608  
Accounts receivable     —         931  
Accounts receivable, related party     716       —    
Inventory     7,088       11,627  
TOTAL CURRENT ASSETS     64,098       16,166  
Equipment, net of accumulated depreciation of $70,661 and $48,626 at 2011 and 2010, respectively     39,043       53,106  
TOTAL ASSETS   $ 103,141     $ 69,272  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY                
CURRENT LIABILITIES                
Accounts payable   $ 26,640     $ 19,482  
Due related party     —         43,224  
Note payable     50,000       —    
TOTAL CURRENT LIABILITIES     76,640       62,706  
                 
COMMITMENTS AND CONTINGENCIES     —         —    
                 
STOCKHOLDERS' EQUITY                
Preferred stock, $.001 par value, 5,000,000 shares authorized, zero issued and outstanding at December 31, 2011 and 2010     —         —    
Common stock, $.001 par value, 50,000,000 shares authorized, 1,420,000 issued and outstanding at December 31, 2011 and 2010     1,420       1,420  
Additional paid in capital     147,075       86,575  
Accumulated deficit     (121,994 )     (81,429 )
Total stockholders' equity     26,501       6,566  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $ 103,141     $ 69,272  

 

See accompanying notes to financial statements.

 

- 32 -
 

 

MYSKIN, INC.

STATEMENTS OF OPERATIONS

 

 

    Years Ended December 31,
    2011   2010
Total Revenue   $ 75,856     $ 62,337  
Cost of Sales     61,584       41,782  
GROSS PROFIT     14,272       20,555  
                 
Selling, general and administrative expenses     54,837       44,003  
Net operating loss     40,565       23,448  
Other income     —         12,915  
NET (LOSS)   $ (40,565 )   $ (10,533 )
NET LOSS PER SHARE OF COMMON STOCK   $ (0.03 )   $ (0.01 )
WEIGHTED AVERAGE SHARES OUTSTANDING     1,420,000       1,420,000  

 

 

 

 

 

See accompanying notes to financial statements.

 

- 33 -
 

MYSKIN, INC.

STATEMENT OF STOCKHOLDERS' EQUITY

YEARS ENDED DECEMBER 31, 2011 AND 2010

 

 

 

      Common Stock                          
      Shares       Amount       Additional Paid in Capital       Accumulated Deficit       Total Stockholders’ Equity  
BALANCE, DECEMBER 31, 2009     1,420,000     $ 1,420     $ 86,575     $ (70,896 )   $ 17,099  
Net loss                             (10,533 )     (10,533 )
BALANCE, DECEMBER 31, 2010     1,420,000       1,420       86,575       (81,429 )     6,566  
Capital contribution                     60,500               60,500  
Net income                             (40,565 )     (40,565 )
BALANCE, DECEMBER 31, 2011     1,420,000     $ 1,420     $ 147,075     $ (121,994 )   $ 26,501  

 

See accompanying notes to financial statements.

 

- 34 -
 

MYSKIN, INC.

 STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2011 AND 2010  

    2011   2010
CASH FLOWS FROM OPERATING ACTIVITIES:                
Net (loss)   $ (40,565 )   $ (10,533 )
Adjustments to reconcile net loss to net cash provided by / (used) in operating activities:                
   Depreciation and amortization     22,036       20,360  
Changes in operating assets and liabilities:                
   Accounts receivable     931       (827 )
  Accounts receivable, related party     (716 )     268  
   Inventory     4,539       (5,436 )
   Accounts payable and accrued expenses     7,157       (21,694 )
   Accounts payable and accrued expenses – related parties     (43,224 )     15,523  
Net cash used in operating activities     (49,842 )     (2,339 )
CASH FLOWS FROM INVESTING ACTIVITIES:                
   Purchase of equipment     (7,972 )     —    
Net cash used in investing activities     (7,972 )     —    
CASH FLOWS FROM FINANCING ACTIVITIES:                
  Capital contribution, related party     60,500       —    
   Issuance of note payable     50,000       —    
Net cash provided by financing activities     110,500       —    
NET INCREASE / (DECREASE) IN CASH & CASH EQUIVLANTS     52,686       (2,339 )
CASH, Beginning of year     3,608       5,947  
CASH, End of year   $ 56,294     $ 3,608  

 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:                
Cash received / (paid) during the year:                
Interest   $ —       $ —    
Income Taxes   $ —       $ —    

 

See accompanying notes to financial statements. 

- 35 -
 

MYSKIN, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2011 AND 2010

 

 

NOTE 1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Current Operations and Background — MySkin, Inc. (“MySkin” or the “Company”), a California corporation, was incorporated on November 15, 2007.   We ceased to be a development stage enterprise effective January 1, 2008 as our planned principal operations had commenced.

 

MySkin offers management services to MedSpas which provide skin resurfacing, skin rejuvenation, vein treatment, microdermabrasion, hair reduction, chemical peels and other age-management services. These MedSpas take a comprehensive approach to skin care, by offering a wide ranch of services. Our management services include, but are not limited to, marketing, capital, facilities, equipment, administration, personnel and management expertise for MedSpas. Utilizing electronic medical records, vendor relationships and customer service protocols, we intend to brand and replicate our management services with other doctors and practitioners in demographically selected metropolitan areas. 

 

Whereas many practitioners understand how to provide various services, many do not desire to or understand how to set up and properly run a business. We partner with these practitioners to help them focus on providing the best services possible. If successful in this area we plan to offer similar services in age-management medicine centers. .

 

We lease the facility for our center and have completed improvements in the facility that houses the MedSpa business.  We own all of the equipment utilized in the MedSpa, and we provide all of the administrative and sales support on all non-medically related areas.

 

On March 1, 2009, we entered into a Facilities and Management Services Agreement with Maria Teresa Agner, MD, Inc. (“MTA”) a California profession corporation pursuant to which we granted MTA the rights to operate advanced skin services in our current center.  MTA is a related party as Marichelle Stoppenhagen, our president and principle shareholder, owns 49% of MTA. As a result, MTA is responsible for hiring all physicians and nurse practitioners who operate in the MedSpa. Under this agreement, we pay all costs and expenses reasonably related to the provision of our services, including but not limited to office rent, utilities and other occupancy costs, compensation benefits and employment costs associated with all non-licensed personnel, general liability insurance, equipment lease and maintenance costs, advertising and promotion, support personnel and contracted consultants, office supplies, and all such other direct and indirect expenses reasonably incurred by Company respecting the provision of the Management Services for the Practice (collectively, "Management Expenses"). MTA, in addition to reimbursement of Management Expenses, a monthly service fee equal to forty percent (40%) of revenue, is payable, with a minimum amount of $2,500 per month (“Service Fee”).

 

Given sufficient capital, we plan to acquire and grow our locations nationwide through partnering with physicians to develop new MedSpas, acquiring failed MedSpas, and by opening new store locations near young retirement communities.

 

Going Concern — The accompanying financial statements have been prepared assuming the Company will continue as a going concern.  The Company has suffered losses from operations since its inception and has an accumulated deficit of $121,994 and a stockholder’s equity of $26,501 at December 31, 2011.  The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classifications of liabilities that might be necessary should the Company be unable to continue its existence.  The recovery of the Company’s assets is dependent upon continued operations of the Company.

- 36 -
 

 

In addition, the recovery of the Company’s assets is dependent upon future events, the outcome of which is undetermined.  The Company intends to continue to attempts to raise additional capital, but there can be no certainty that such efforts will be successful.

 

Basis of Presentation — The financial statements reflect the financial position, results of operations and cash flows of the Company in conformity with United States Generally Accepted Accounting Principles.

 

Use of Estimates —The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Cash and Cash Equivalents — The Company considers investments with original maturities of 90 days or less to be cash equivalents.

 

Accounts Receivable - The Company extends credit to its customers. Collateral is generally not required. Credit losses are provided for in the financial statements based on management’s evaluation of historical and current industry trends. Although the Company expects to fully collect amounts due, actual collections may differ from estimated amounts.  The Company estimates an allowance for doubtful accounts based upon a percentage of revenue earned.  When the Company expects that there is less than a 10% chance of collection, the Company writes the receivable off to its allowance for doubtful accounts.  The Company does not typically accrue interest or fees on past due amounts.

 

Inventory - Inventory is valued at the lower of cost or market.  Cost is determined using standard costs, which approximates the first-in, first-out method.

 

Fixed Assets — Fixed assets are stated at cost and are depreciated using the straight-line method over their estimated useful lives, ranging from three to five years.

 

Revenue Recognition — The Company recognizes revenue associated with its business on product sales after shipment of the product to the customer or the service is performed.

 

Advertising Costs --- Advertising costs have primarily consisted of advertising materials and costs of trade shows the Company has attended. All advertising costs have been expensed as incurred.

 

Shipping and Handling Costs — The Company records revenue related to shipping and handling costs charged to customers in revenues.  The related expense is recorded in cost of sales in the accompanying statements of operations.

 

Income Taxes — Income taxes are recorded using the asset and liability method. Under the asset and liability method, tax assets and liabilities are recognized for the tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Future tax assets and liabilities are measured using the enacted tax rates expected to apply when the asset is realized or the liability settled. The effect on future tax assets and liabilities of a change in tax rates is recognized in income in the period that enactment occurs. To the extent that the Company does not consider it more likely than not that a future tax asset will be recovered, it provides a valuation allowance against the excess.

- 37 -
 

The Company follows the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes.  As a result of the implementation of FIN 48, the Company makes a comprehensive review of its portfolio of tax positions in accordance with recognition standards established by FIN 48.  As a result of the implementation of Interpretation 48, the Company recognized no material adjustments to liabilities or stockholders equity.  When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained.  The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any.  Tax positions taken are not offset or aggregated with other positions.  Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination.

 

Interest associated with unrecognized tax benefits are classified as interest expense and penalties are classified in selling, general and administrative expenses in the statements of income. The adoption of FIN 48 did not have a material impact on the Company’s financial statements.

 

Net Loss Per Share — The Company computes net loss per share in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 128, “Earnings per Share.” Under the provisions of SFAS No. 128, basic net loss per share includes no dilution and is computed by dividing the net loss available to common stockholders for the period by the weighted average number of shares of common stock outstanding during the period.  The dilution loss per share takes into consideration shares of common stock outstanding (computed under basic net loss per share) and potentially dilutive shares of common stock that are not anti-dilutive.

 

Concentration of Credit Risk — Financial instruments that potentially subject the Company to credit risk consist of cash and accounts receivable.  The Company maintains its cash with high credit quality financial institutions; at times, such balances with any one financial institution are not insured by the FDIC.  Concentration of credit risk associated with accounts receivable is significant due to the limited number of customers.  The Company performs ongoing credit evaluations of its customers and generally requires partial deposits.

 

Financial Instruments —The Company’s financial instruments consist of cash, accounts receivable, accounts payable and accrued expenses.  The carrying values of cash, accounts receivable and accounts payable are representative of their fair values due to their short-term maturities.

 

Recently Issued Accounting Pronouncements   — With the exception of those listed below, there have been no recent accounting pronouncements or changes in accounting pronouncements that are of material significance, or have potential material significance, on our financial position, results of operations or cash flows.

 

In February 2010, the FASB issued Accounting Standards Update 2010-09 (ASU 2010-09), Subsequent Events (Topic 855), amending guidance on subsequent events to alleviate potential conflicts between FASB guidance and SEC requirements. Under this amended guidance, SEC filers are no longer required to disclose the date through which subsequent events have been evaluated in originally issued and revised financial statements. This guidance was effective immediately and we adopted these new requirements for the period ended March 31, 2010. The adoption of this guidance did not have a material impact on our financial statements.

- 38 -
 

In January 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-06 (ASU 2010-06), Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements. This amendment to Topic 820 has improved disclosures about fair value measurements on the basis of input received from the users of financial statements. This is effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. Early adoption is permitted. The Company does not expect the provisions of ASU 2010-06 to have a material effect on the financial position, results of operations or cash flows of the Company.

 

In December 2010, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2010-29, “Business Combinations (Topic 805): Disclosures of Supplementary Pro Forma Information for Business Combinations” (ASU 2010-29), which specifies that pro forma disclosures for business combinations are to be reported as if the business combinations that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period. The pro forma disclosures must also include a description of material, nonrecurring pro forma adjustments. ASU 2010-29 is effective for business combinations with an acquisition date of January 1, 2011 or later. Adoption of the new requirement did not have an effect on the Company’s financial position, results of operations or cash flows.

 

In May 2011, the FASB issued Accounting Standards Update No. 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs”. The amendments result in common fair value measurement and disclosure requirements in U.S. generally accepted accounting principles (GAAP) and International Financial Reporting Standards (IFRSs), and do not require additional fair value measurements and are not intended to establish valuation standards or affect valuation practices. The amendments in this update are effective during interim and annual periods beginning after December 15, 2011. Adoption of the new requirement is not expected to have an effect on the Company’s financial position, results of operations or cash flow.

 

In June 2011, the FASB issued Accounting Standards Update No. 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income”. In this update, FASB eliminated the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity. The amendments require that all non-owner changes in equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The amendments in this update are effective for fiscal years, and interim periods within these years, beginning after December 15, 2011. Adoption of the new requirement is not expected to have an effect on the Company’s financial position, results of operations or cash flow.

 

In September 2011, the FASB issued ASU No. 2011-08, Intangibles –Goodwill and Other (Topic 350). ASU No. 2011-08 redefines the approach to goodwill impairment testing by providing companies with the option to qualitatively evaluate the likelihood of impairment before proceeding to Step 1 of the impairment test (i.e. comparison of the fair value of a reporting unit to its carrying value). The amendment also provides more guidance on the types of events and circumstances that an entity should consider between annual impairment tests in determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The amendments are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted, including for annual and interim goodwill impairment tests performed as of a date before September 15, 2011, if an entity’s financial statements for the most recent annual or interim period have not yet been issued, or for nonpublic entities, that have not been made available for issuance. Adoption of the new requirement is not expected to have an effect on the Company’s financial position, results of operations, cash flow and the annual goodwill impairment test.

 

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NOTE 2 - CONCENTRATION OF CREDIT RISK

 

Although we are directly affected by the economic well being of significant customers, we do not believe that significant credit risk exists at December 31, 2011 and 2010. We perform ongoing evaluations of our customers.

 

The Company maintains its cash balances in one financial institution that does not exceed amounts insured by the Federal Deposit Insurance Corporation up to $250,000, per financial institution.  As of December 31, 2011 and 2010, the Company had no deposits that exceeded federally-insured amounts.  The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash.

 

NOTE 3 – INVENTORY

 

During the year ended December 31, 2010, the Company experienced a loss of inventory when a vehicle crashed into its building. The inventory consisted of consumables and perishables used in Botox and laser skin treatments. Amounts lost amounted to $5,621 and are classified in Other Income (Loss) on the Company’s Statement of Operations for the year ended December 31, 2010.

 

NOTE 4 - RELATED PARTIES

 

We have adopted a written policy within our code of ethics that prohibits our executive officers and directors from entering into a related party transaction with us without the prior consent of our board of directors. All of our directors, executive officers and employees are required to report any such related party transaction to our board of directors.

 

On March 1, 2009, we entered into a Facilities and Management Services Agreement with Maria Teresa Agner, MD, Inc. (“MTA”) a California profession corporation pursuant to which we granted MTA the rights to operate advanced skin services in our current center.  As a result, MTA is responsible for hiring all physicians and nurse practitioners who operate in the MedSpa. Under this agreement, we pay all costs and expenses reasonably related to the provision of our services, including but not limited to office rent, utilities and other occupancy costs, compensation benefits and employment costs associated with all non-licensed personnel, general liability insurance, equipment lease and maintenance costs, advertising and promotion, support personnel and contracted consultants, office supplies, and all such other direct and indirect expenses reasonably incurred by Company respecting the provision of the Management Services for the Practice (collectively, "Management Expenses"). MTA, in addition to reimbursement of Management Expenses, a monthly service fee equal to forty percent (40%) of revenue, is payable, with a minimum amount of $2,500 per month (“Service Fee”). Ms. Stoppenhagen, our president, owns a minority interest of MTA.

 

NOTE 5 – NOTE PAYABLE

 

In December 2011, we entered into a Revolving Promissory Note (the “Note”) with Marichelle Stoppenhagen, our president.  Under the terms of the Note, Marichelle Stoppenhagen agreed to advance us, from time to time and at the request of the Company, amounts up to an aggregate of $100,000 until December 31, 2012.  All advances shall be paid on or before December 31, 2012 and interest shall accrue from the date of any advances on any principal amount withdrawn, and on accrued and unpaid interest thereon, at the rate of six percent (6%) per annum, compounded annually.   As of December 31, 2011, there was $50,000 owed under the note.

 

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NOTE 6 – INCOME TAX

For the years ended December 31, 2011 and 2010, the Company incurred net operating losses and, accordingly, no provision for income taxes has been recorded.  In addition, no benefit for income taxes has been recorded due to the uncertainty of the realization of any tax assets. At December 31, 2011 and 2010, the Company had approximately $121,994 and $81,429 of federal and state net operating losses, respectively.  The net operating loss carryforwards, if not utilized, will begin to expire in 2027. The provision for income taxes consisted of the following components for the years ended December 31:

 

Components of net deferred tax assets, including a valuation allowance, are as follows at:

 

    December 31,
    2011   2010
Deferred tax assets:                
  Deferred tax assets     42,698       28,500  
  Valuation allowance     (42,698 )     (28,500 )
    Total deferred tax assets   $ -0-     $ -0-  

 

The valuation allowance for deferred tax assets as of December 31, 2011 and 2010 was $42,698 and $28,500, respectively.  In assessing the recovery of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in the periods in which those temporary differences become deductible.  Management considers the scheduled reversals of future deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment.  As a result, management determined it was more likely than not the deferred tax assets would not be realized as of December 31, 2011 and 2010, and recorded a full valuation allowance.

 

Reconciliation between the statutory rate and the effective tax rate is as follows at December 31, 2011 and 2010:

 

  2011 & 2010                           

 

Federal statutory tax rate  (35.0) %

Permanent difference and other 35.0  %

Effective tax rate 0.0 %

NOTE 7 – SUBSEQUENT EVENTS

The Company has evaluated subsequent events for the period from December 31, 2011 and 2010, the date of these financial statements, through January 13, 2012, which represents the date the Company intends to file these financial statements with the Securities and Exchange Commission. Pursuant to the requirements of ASC 855, Subsequent Events there were no events or transactions occurring during this subsequent event reporting period that require recognition or disclosure in these financial statements.

 

 

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ITEM 14.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

 

There are not and have not been any disagreements between the Company and its accountants on any matter of accounting principles, practices or financial statement disclosure.

 

ITEM 15. 

 FINANCIAL STATEMENTS AND EXHIBITS.

 

(a) Financial Statements

The financial statements included in this Registration Statement on Form 10 are listed in Item 13.

    PAGE
Report of Independent Registered Public Accounting Firm   31
Financial Statements as of and for the years ended December 31, 2011 and 2010    32
Balance Sheet    32
Statement of Operations   33
Statement of Stockholders’ Equity   34
Statement of Cash Flows   35
Notes to Financial Statements    36

 

(b) Exhibits

Exhibit Number Description Reference
  3.1 Articles of Incorporation of Registrant, dated November 15, 2007. Filed herewith.
  3.2 Bylaws of Registrant Filed herewith.
  3.3 Audit Committee Charter, dated May 27, 2008 Filed herewith.
10.1 Facilities and Management Services Agreement Filed herewith
10.2 Revolving Promissory Note and Security Agreement Filed herewith
14.1 Code of Ethics, dated May 27, 2008 Filed herewith
23.1 Consent of Anton & Chia, LLP Filed herewith.

 

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SIGNATURES

 

In accordance with Section 12 of the Securities Exchange Act of 1934, the registrant caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.

 

January 13, 2012 MYSKIN, INC.
   
   
  By: /s/ MARICHELLE STOPPENHAGEN
  Name: Marichelle Stoppenhagen
  Title:   President

 

POWER OF ATTORNEY

 

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated. Each person whose signature appears below constitutes and appoints Marichelle Stoppenhagen his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

 

 

Signature   Title   Date

/s/ Marichelle Stoppenhagen

Marichelle Stoppenhagen

  President, Chief Financial Officer, Secretary, Treasurer and Director   January 13, 2012
         

 

 

Exhibit 3.1

 

 

 

ENDORSED-FILED

In the office of the Secretary of State of the State of California

 

NOVEMBER 15, 2007

 

 

ARTICLES OF INCORPORATION

 

OF

 

mySkin, Inc.

 

FIRST. The name of the corporation is mySkin, Inc.

 

SECOND. The purpose of the corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of California other than the banking business, the trust company business or the practice of a profession permitted to be incorporated by the California Corporations Code.

 

THIRD. The name of the corporation’s initial agent for service of process in the State of California is Marichelle Stoppenhagen, 1328 W. Balboa Blvd. Suite C., Newport Beach, California 92661.

 

FOURTH. (a) The corporation is authorized to issue two classes of shares, each with $0.001 as par value, designated “Common Stock” and “Preferred Stock,” respectively. The number of shares of Common Stock to be issued is 50,000,000 and the number of shares of Preferred Stock authorized to be issued is 5,000,000.

 

(b) The Preferred Stock may be divided into such number of series as the board of directors may determine. The board of directors is authorized to determine and alter the rights, preferences, privileges and restrictions granted to or imposed upon any wholly unissued series of Preferred Stock, and to fix the number of shares of any series of Preferred Stock and the designation of any such series of Preferred Stock. The board of directors, within the limits and restrictions stated in any resolution or resolutions of the board of directors originally fixing the number of shares constituting any series, may increase or decrease (but not below the number of shares of such series then outstanding) the number of shares of any series subsequent to the issue of the shares of that series.

 

The personal liability of the directors of the corporation for monetary damages for breach of fiduciary duty shall be eliminated to the fullest extent permissible under California law. The corporation is authorized to indemnify it’s directors and officers to the fullest extent permissible under California law.

 

IN WITNESS WHEREOF , the undersigned incorporator has executed these Articles of Incorporation on the date below.

 

Date: November 13, 2007

 

LegalZoom.com, Inc., Incorporator

 

 

By: /s/ Aimee Carramanzana

Aimee Carramanzana, Assistant Secretary

 

 

 

 

 

 

 

 

 

[Seal of the Office of the Secretary of State]

 

State of California

Secretary of State

 

 

 

I, DEBRA BOWEN, Secretary of State of the State of California, hereby certify:

 

The attached transcript of 2 page(s) has been compared with the record on file in this office, of which it purports to be a copy, and that is full, true and correct.

 

[The Great Seal of the State of California]

 

IN WITNESS WHEREOF, I execute this certificate and affix the Great Seal of the State of California this day of

 

Nov. 15, 2007

 

/s/ Debra Bowen                     

Debra Bowen

Secretary of State

 

 

 

 

 

 

 

 

Exhibit 3.2

 

BYLAWS

 

OF

 

mySkin, Inc.

 

 

ARTICLE I

 

Shareholders

 

Section 1.1. Annual Meetings . An annual   meeting of shareholders shall be held for the election   of directors on a date and at a time and place either within or without the State of   California fixed by resolution of the Board of Directors. Any   other proper business may be transacted at the annual meeting, except as limited by the notice requirements of subdivisions (a) and (d) of Section 601of the California General Corporation Law.

 

Section 1.2. Special Meetings .   Special meetings of the shareholders may be called at any time by the Board of Directors , the Chairman of   the Board   or the   holders of shares entitled to cast   not less than ten percent of the votes at the meeting, such meeting to be   held an a date and at a time and place either within or without the State of California as may be stated in the notice of the meeting.

 

Section 1.3. Notice of   Meetings . Whenever shareholders are   required or permitted to   take any action at a meeting a written notice of the meeting shall be given not less   than ten nor more than sixty days before the date of the meeting  to each shareholder entitled to   vote thereat. Such notice shall state the place, date and   hour of   the meeting, and (i) in the case of   a special meeting, the general nature of the business   to be transacted, and no other business may be transacted , or (ii) in the case   of the annual meeting, those matters which the Board, at the time of the mailing of   the notice, intends to present for action by the shareholders. The notice of any meeting at which directors are to be elected shall include a list of the names of   the nominees intended at the time of the mailing of the   notice to   be presented by   the Board for election.

 

Notice of a shareholders' meeting or any report shall be given   either personally or by first-class mail or other means of written communication, addressed to the   shareholder at   the address of   such shareholder appearing on the books of   the corporation or given by the shareholder to the corporation for the purpose of notice; or if no such   address appears or   is given, at the place where the principal executive office of the corporation is located or   by publication at least once in a newspaper of general circulation in the county in which the principal executive office  is located. The notice or report shall be deemed to have been given at the time when delivered personally or deposited in the   mail or   sent by other means of   written communication. An affidavit of mailing of any   notice or report   in accordance with   the provisions of this by-law, executed by the Secretary, Assistant Secretary or any transfer agent, shall be prima facie evidence

of the   giving of the notice or report.

 

If any notice or report addressed   to the shareholder   at the   address of   such shareholder appearing   on the books of the corporation is returned to the corporation by the United States   Postal Service marked to indicate that the United States Postal Service is unable to   deliver the notice or report to the shareholder at such address , all future notices or reports shall be deemed to have been duly   given without further mailing if  the same shall be available for the shareholder upon written demand of the shareholder at the principal executive office   of the   corporation   for   a period of one year from the date of the giving   of the notice or report to   all other shareholders.

 

Except as   otherwise prescribed by the Board of Directors in particular instances and except as otherwise provided by   subdivision (c) of Section   601   of the California General   Corporation Law , the Secretary shall prepare   and give, or cause to   be prepared and given , the notice of meetings of shareholders.

 

Section 1.4. Adjournments . When a shareholders' meeting is adjourned to another time or place, except as   otherwise   provided in this Section 1.4, notice need not be given of any such adjourned if the time and place thereof are   announced at the meeting at which the adjournment is taken . At the adjourned meeting the corporation may transact any   business   which might have been transacted at the original meeting. If the adjournment is for more than 45 days or if after the adjournment a new   record date is fixed for the adjourned   meeting, a notice of   the adjourned meeting shall be given to   each shareholder of record entitled to   vote at the meeting.

 

Section 1.5.   Validating   Meeting of Shareholders; Waiver of Notice . The transactions of any meeting of shareholders, however called and noticed, and wherever held, are as valid as though had at a meeting duly held after regular call and notice, if a quorum   is present either in person or by proxy, and   if, either before or after   the meeting, each of the   persons entitled to   vote, not present in person or by proxy , signs a written waiver   of notice or   a consent to the holding of the meeting or an approval of the minutes thereof. All such waivers, consents and approvals shall   be filed with the corporate records or made a part   of the   minutes of the meeting . Attendance   of a person   at a meeting shall constitute a waiver of notice of and presence   at such meeting, except when the person objects, at the beginning of   the meeting, to   the transaction of any business because the meeting is   not lawfully called   or convened and except   that attendance at   a meeting is not a waiver of any   right to object to the   consideration of matters required by law   to be   included in the   notice but not so included, if   such objection is expressly made at the meeting. Neither the business to be   transacted at nor the purpose   of any regular or special meeting of shareholders need be specified in any   written waiver of notice, consent to the holding of the meeting or approval of   the minutes thereof, except as   required by subdivision (f)   of Subsection 601 of the California General Corporation Law.

 

 Section 1.6. Quorum . A majority of the shares entitled   to   vote, represented in person or by proxy, shall   constitute a quorum at a meeting   of the shareholders. The shareholders p resent at a   duly called   or   held meeting   at which a quorum is present may continue to   transact business until   adjournment notwithstanding the withdrawal of enough shareholders to   leave less than a quorum, if any   action taken (other than adjournment) is approved by at least a majority of the shares   required to constitute a quorum. In the absence of a quorum, any meeting of shareholders may   be adjourned from   time to time by the vote of a   majority of the shares   represented either in person or by proxy , but no other business may be transacted, except as   provided in this Section 1.6.

 

Section 1.7. Organization . Meetings of shareholders shall be presided over by the Chairman   of the Board of Directors, if   any, or   in the absence of the Chairman of the   Board by   the Vice Chairman of the Board, if any, or   in the absence of the Vice Chairman of   the   Board   by   the President, or in   the absence of   the foregoing persons   by a chairman designated by the Board of Directors , or in the absence of such designation by a chairman chosen at   the meeting. The Secretary, or   in the absence of   the Secretary, an   Assistant Secretary, shall act as secretary   of  the meeting, or in their absence   the chairman   of the meeting may appoint any   person to act as secretary of the meeting.

 

Section 1.8. Voting . Unless otherwise provided in the   articles of incorporation, each outstanding s hare, regardless of   class, shall be entitled to one vote on each matter submitted to   a vote of shareholders. Except   as otherwise provided by California law   or by the articles of incorporation or   these bylaws, the affirmative vote of the holders of a majority of the shares entitled to vote on the subject matter at a meeting in which a quorum is present shall be the act of the   shareholders.

 

Any holder of shares entitled to vote on any matter may vote part of   the shares in favor of the proposal   and refrain from voting the   remaining shares or vote them against   the proposal, other than elections to office, but, if the shareholder fails to specify the number of shares such shareholder is voting affirmatively, it will be conclusively presumed   that the shareholder’s approving vote is with respect to   all shares such shareholder is entitled to vote.

 

Except as   otherwise provided in the   articles of incorporation and   subject to the requirements of   this Section 1.8, every shareholder entitled to   vote at any election of directors may cumulate such shareholder's votes and give one   candidate a   number of votes equal to the number of directors to   be elected multiplied by the number of votes to which the shareholder's shares are normally entitled, or   distribute the shareholder's votes on the same   principle among as many   candidates as the shareholder thinks fit . No shareholder shall be entitled to cumulate votes unless such   candidate or candidates’ names have been placed in nomination prior to the voting and the shareholder has   given notice at the meeting prior to the voting of the   shareholder’s intention to cumulate the shareholder's votes. If any   one shareholder has given such notice, all   shareholders may cumulate their votes for candidates in   nomination. In any   election of   directors, the candidates   receiving the   highest number of   votes of the   shares entitled to be voted for them up to the number of directors be elected by such   shares are elected. Elections for directors need not be by ballot unless a shareholder demands election by ballot at the meeting and before the voting begins.

 

Section 1.9. Shareholder’s Proxies . Every person entitled to vote shares   may authorize another person or   persons to act by proxy with respect to such shares. Any   proxy purporting to   be executed in accordance with the provisions of Section 705 of the   California General Corporation Law   shall be presumptively   valid. No proxy shall be   valid after the expiration of eleven months from the   date thereof unless otherwise   provided in the proxy. Every proxy continues in full force   and effect until revoked by the   person executing it prior to   the vote   pursuant thereto, except as otherwise provided in this   Section 1.9. Such revocation may be effected by a writing delivered to the corporation   stating that the proxy is   revoked or by a subsequent proxy executed by the person executing the prior proxy and   presented to the meeting, or as to any   meeting by attendance at such meeting and voting in   person by the person executing the proxy. A proxy is not revoked by the death   or incapacity of the maker unless, before the vote is counted, written notice of   such death or incapacity is received by the corporation. A proxy may be made irrevocable under the circumstances set   forth in subdivision (e) of Section 705 of the   California General Corporation Law. Any   form of proxy distributed to ten   or more shareholders   shall conform to the requirements of Section 604 of the California General Corporation Law.

 

Section 1.10. Inspectors . In advance of any   meeting of   shareholders the Board of Directors may appoint inspectors of election to act at the meeting and any adjournment thereof. If inspectors of election are   not so   appointed, or if any persons so appointed fail to appear or   refuse to   act, the chairman of   any meeting of shareholders may, and on   the request of any shareholder or a shareholder’s proxy shall, appoint inspectors of election (or persons to   replace those who so   fail or refuse) at the meeting. The number o inspectors shall be either one or three. If appointed at a   meeting on the request of one or more shareholders or proxies, the majority of shares represented in person or by proxy shall determine whether one or three inspectors are to be appointed.

 

The   inspectors of election shall   determine the number   of shares outstanding and the voting power of   each, the shares   represented at the meeting, the existence of a quorum and the authenticity, validity and effect of   proxies, receive votes, ballots or consents, hear and determine all challenges and questions in any   way arising in connection with the right   to vote, count and tabulate all   votes or   contents, determine when the polls shall close, determine the result   and do such acts as may be proper to conduct the election or vote   with fairness to all shareholders.

 

The   inspectors of election shall perform their duties impartially, in good faith, to the best of their ability and as   expeditiously as is practical. If there are three inspectors   of election, the decision, act or certificate of a majority is effective in all respects   as the decision, act or certificate of all. Any report or certificate made by the inspectors of election is prima   facie evidence of the facts stated therein.

 

Section 1.11. Fixing Date For Determination of Shareholders of   Record . In order that the corporation may determine  the shareholders entitled to notice of any meeting or to vote   or to express consent to corporate   action in writing without a meeting or entitled to receive payment of any dividend or other   distribution or allotment of any rights or entitled to   exercise any rights in respect of any other lawful action, the   Board of Directors may fix , in   advance, a record date, which shall not be more than sixty nor less than ten days prior to the date of such meeting nor more than sixty days prior to any other action.

 

If no record date is fixed: (1) the record date for determining shareholders entitled to   notice of or to   vote at a meeting of shareholders shall   be at the close   of business on the business day next preceding the day on which notice is given or, if notice is waived, at the close of business on the business day next   preceding the day   on which the meeting is held; (2) the record date for   determining shareholders entitled to give consent to corporate action in writing without a meeting, when no prior action by the Board   has been taken, shall be the day on which the first   written consent is   given; and (3) the record   date for determining shareholders for   any other purpose shall be at the close of business on the day on which the Board   adopts the resolution relating thereto or the sixtieth day prior to the date of such other action, whichever is later. A   determination of shareholders of record entitled to notice of or to vote at a meeting of shareholders shall apply to any adjournment of the meeting unless the Board fixes   a new record date for the adjourned meeting, but the Board shall fix a new record date if   the meeting is adjourned for more than 45 days from the date set   for the original meeting.

 

Section 1.12. Consent of Shareholders in Lieu of Meeting . Except as otherwise provided in the articles of incorporation or in this Section 1.12, any   action which may be taken at any annual or special meeting of the shareholders may be taken without a meeting and without prior notice, if a consent in writing, setting forth the action so taken,   shall be signed by the holders of outstanding shares having not less than the minimum number of votes   that would be necessary to   authorize or   take such action at a meeting at which all shares   entitled to vote   thereon were present and voted .

 

Directors may not be elected by written   consent except by unanimous consent of all shares   entitled to vote for the election of directors. Notwithstanding the foregoing sentence, except   for vacancies created by removal, shareholders may fill any vacancy in the   Board of   Directors not filled by the Board of Directors by electing a director through written consent of a majority of outstanding shares entitled to vote.

 

Any shareholder giving a written consent, or such   shareholder’s proxyholder, or a transferee of the shares or   a   personal representative of such shareholder   or   its respective proxyholder, may revoke   the consent by   a writing received by the   corporation prior   to the time that written consents of the number   of shares required   to   authorize   the proposed action have been filed   with the Secretary of the corporation, but   may   not do so thereafter.  Such   revocation is effective   upon its receipt by the Secretary of   the corporation,

 

Unless all shareholders entitled to vote consent in writing,   notice of any shareholder approval without a meeting shall be   given as provided in subdivision (b) of Section 603   of the California General Corporation Law, or any successor thereof.

 

Any   form of   written consent distributed to   ten or more shareholders shall conform to   the requirements   of Section 604   of   the California General Corporation Law, or any successor thereof.

 

ARTICLE II

 

Board of Directors

 

Section 2.1.   Powers; Number; Qualifications . The business and affairs   of the Corporation shall be managed by, and   all corporate powers   shall be exercised by or under, the direction of the Board of Directors, except as otherwise provided in these by-laws or in the articles of incorporation. The number of directors comprising the Board of   Directors shall be one (1).

 

Section 2.2. Election; Term of Office; Resignation; Removal; Vacancies . At each annual meeting of shareholders, directors shall be elected to hold office   until the next annual meeting. Each director, including a director   elected to fill a vacancy, shall hold office until the   expiration of the term for which elected   and until a   successor has been elected and qualified. Any   director may   resign effective upon giving written notice to   the Chairman of the Board, the Secretary or the   Board of Directors of the   corporation, unless the notice specifies a later time   for the effectiveness of such resignation. If   the resignation is effective at a   future time, a successor may be elected   to take office when the resignation becomes effective.

 

Any or   all of the directors may be removed without cause if such removal is approved by a majority of the   outstanding voting shares   then   entitled to vote on   the election of   directors, except that no director may be removed (unless the entire Board of Directors is removed) when the votes cast against   removal, or not consenting in writing to such removal, should be sufficient to elect such director if voted cumulatively at an

election at which the same total number of   votes were cast (or, if such action is taken by written consent, all shares   entitled to vote were voted) and the entire number   of directors authorized at the time of the director's most recent election were then being   elected .

 

Any reductions in the authorized number   of directors does not remove any director prior to   the expiration of   such director’s term in office.

 

A vacancy in the Board of Directors shall he deemed to exist (a) if a director dies, resigns, or is removed by the shareholders or an appropriate court, as provided in Sections 303 or 304 of the California General Corporation Law; (b) if the Board of Directors declares vacant the office of a director who has been convicted of a felony or declared of unsound mind by an order of court; (c) if the authorized number of directors is increased; or (d) if at any shareholders' meeting at which one or more directors are elected the shareholders fail to elect the full authorized number of directors to be voted for at that meeting. Unless otherwise provided in the articles of incorporation or these by-laws and except for a vacancy caused by the removal of a director, vacancies on the Board may be filled by appointment by the Board. A vacancy on the Board caused by the removal of a director may be filled only by the shareholders, except that a vacancy created by the Board declaring an office of a director vacant because a director has been convicted of a felony or declared of unsound mind by an order of court may be filled by the board.

 

The shareholders may   elect a director at any   time to   fill a vacancy not filled by the Board of Directors.

 

If the number of directors then in office is less than a quorum, vacancies on the Board of Directors may be filled by the unanimous written consent of the directors then in office, the affirmative vote of a majority of the directors then   in office at a meeting held pursuant to   notice or waivers of notice complying with Section 2.4 hereof or   a sole remaining director.

 

Section 2.3.   Regular meetings . Regular meetings of the Board of   Directors may be held without notice at such places   within or without the State of   California and at such   times as the Board may from time to time determine.

 

Section   2.4. Special Meetings ; Notice of Meetings; Waiver of Notice . Special meetings of the Board of   Directors may be held   at any time or place within or without the State of California whenever called by the Chairman of the Board, by the Vice Chairman of the Board, if any, or   by any two directors. Special meetings   shall be held on four days' notice by mail or 48 hours' notice delivered personally or by telephone, telegraph or   any other means   of communication authorized by Section 307   of   the California General Corporation Law. Notice delivered personally or by telephone may be transmitted to   a person   at the director’s office who can reasonably be expected to deliver such notice promptly to the director.

 

Notice of a meeting need not be given to any director who signs   a waiver of notice or   a consent to   holding the meeting or   an approval of the minutes thereof, whether before or after the meeting, or   who attends the meeting without protesting, prior thereto or at its commencement the lack of notice to such director. All such waivers , consents and   approvals shall be filed with the corporate records or made a part of the minutes of the meeting. A notice, or   waiver of notice, need not specify the purpose   of any   regular or special meeting of the Board.

 

Section 2.5. Participation In Meetings by   Conference Telephone Permitted . Members of   the Board, or any   committee designated by the Board, may participate   in a meeting of the Board or   of such committee, as the case   may be, through the use of conference telephone or similar communications equipment permitted by Section 307 of the California General Corporation Law, so   long as   all members participating in such meeting can hear   one another, and participation in a meeting pursuant to this Section 2.5 shall constitute presence in person at such meeting.

 

Section 2.6. Quorum; Adjournment; Vote Required for Action . At   all meetings of the Board of Directors one-half of the authorized number of   directors shall constitute a quorum for the transaction of business. Subject to the provisions of Sections 310 and 317(e) of the California General Corporation Law, every act

or decision done or made by a majority of the directors present at a meeting at which a quorum is present shall be the act of the   Board unless the articles   of incorporation or these by-laws shall require a vote of a greater number.

 

A majority of the directors present, whether or not a quorum is   present, may adjourn any meeting to another time and place. If the meeting is adjourned for more than 24 hours, notice of any adjournment to another time or place shall be given prior to the time of the adjourned meeting to the directors who were not present at the time of adjournment.

 

Section 2.7. Organization . Meetings of the Board of Directors shall be presided over by the Chairman of the Board, or in the absence of the Chairman of the Board by the Vice Chairman of the Board, if any, or in   their absence by a chairman chosen at the meeting . The Secretary , or in the absence of the Secretary an Assistant Secretary, shall act as   secretary of the   meeting, but in the absence of   the Secretary   and any Assistant Secretary   the chairman of the meeting may appoint any person to act   as secretary of the meeting.

 

Section 2.8. Action by   Directors Without a Meeting . Any action required or permitted to be taken by the Board   of Directors, or any committee thereof, may be taken without a meeting if all members of the   Board or of   such committee, as the   case may be, shall individually or collectively consent in writing to   such action. Such written consent or consents shall be filed with   the minutes of the proceedings of the Board. Such action by written consent shall have the same force and effect as a unanimous vote of such directors.

 

Section 2.9. Compensation of Directors . The Board of Directors shall have the authority to fix the compensation of directors for services in any capacity.

 

ARTICLE III

 

Executive and Other Committees

 

Section 3.1. Executive and Other Committees of Directors .   The Board of Directors, by resolution adopted by a   majority of the authorized   number of   directors, may designate an   executive committee and other committees, each consisting of two or   more directors, to serve at the pleasure of the Board, and each of which, to the extent provided in the resolution shall have all the authority of the   Board, except   that no   such committee shall have power or authority with respect   to the   following matters:

 

(1) The approval   of any action for which the California General Corporation Law   also requires the approval of   the shareholders or of   the outstanding shares;

 

(2) The filling of vacancies in the Board or in   any committee thereof;

 

(3) The fixing of compensation of the   directors for   serving on the Board or on any   committee thereof;

 

(4) The amendment or repeal of the by-laws, or   the adoption of   new by-laws;

 

(5)   The amendment or repeal of any resolution of the Board which, by its terms, shall not be so amendable or   repealable;

 

(6)   The making of distributions to shareholders, except at a rate or in   a periodic amount or within a price range set   forth in the articles or determined   by the Board of   Directors;

 

(7) The appointment of other committees of the Board or the members thereof;

 

(8)   The removal or indemnification of any director; or

 

(9) The changing of the number of authorized directors on the   Board.

 

The Board of Directors may designate one or   more directors as alternate members of any such   committee, who may replace any absent member or members at any meeting of such committee.

 

Unless the Board   of Directors otherwise provides, each   committee designated by   the Board may adopt, amend and repeal rules for the conduct of   its business. In the absence of a provision by the Board of   Directors or   a provision in the rules of such committee to the contrary, each committee   shall conduct   its business   in the same manner   as the Board of   Directors conducts its business pursuant   to Article II of these by-laws.

 

ARTICLE IV

 

Section 4.1. Officers; Election . As soon as practicable after the annual meeting of shareholders in each year, the Board of Directors shall elect a President, a Treasurer and a Secretary. The Board may also elect one or more Vice Presidents, one or more Assistant Secretaries, and such other officers as the Board may deem desirable or appropriate and may give any of them such further designations or alternate titles as it considers desirable. Any number of offices may be held by the same person.

 

Section 4.2. Term of Office ; Resignation: Removal; Vacancies . Except as otherwise provided in the resolution of the Board of Directors electing any officer, each officer shall hold office until the first meeting of the Board after the annual meeting of the shareholders next succeeding his or her election, and until his or her successor is elected and qualified or until his or her earlier resignation or removal. Any officer may resign at any time upon written notice to the Board or to the Chairman of the Board or the Secretary of the corporation. Such resignation shall take effect at the time specified therein, and unless otherwise specified therein no acceptance of such resignation shall be necessary   to make it effective. The Board may remove any officer with or without cause at any time. Any such removal shall be without prejudice to the contractual. rights of such officer, if any, with the corporation, but the election of an officer shall not of itself create contractual rights. Any vacancy   occurring in any office of the corporation by death, resignation, removal or otherwise may be filled for the unexpired portion of the term by the Board at any regular or special meeting.

 

Section 4.3. Powers and Duties . The officers of the corporation shall have such powers and duties in the management of the corporation as shall be stated in these by-laws or in a resolution of the Board of Directors which, is not inconsistent with these by-laws and, to the extent not so   stated, as generally pertain to   their respective offices, subject to the control of the Board. The Secretary shall have the duty to record the proceedings of the meetings of the shareholders, the Board Directors and any committees in a book to be kept for that purpose. The Board may require any officer, agent or employee to give security for the faithful performance of his or her duties.

 

ARTICLE V

 

Forms of Certificates; Loss

and Transfer of Shares

 

Section 5.1. Forms of Certificates. Every holder of shares in the corporation shall be entitled to have a certificate signed in the name of the corporation by (1) the President, any Vice President, Chairman of the Board or Vice Chairman, and (2) by the Chief Financial Officer, Treasurer, Assistant Treasurer, Secretary or Assistant Secretary, of the corporation, certifying the number of shares and the class or series of shares owned by such shareholder. If such certificate is manually signed by one officer   or manually countersigned by a transfer agent or by a registrar, any other signature on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such   officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue.

 

If the Corporation is authorized to issue more than one class of stock or more than one series of any class, the powers, designations, preferences, relative or other special rights, qualifications, restrictions and limitations of each class or series shall be set forth in full or summarized on the face or back of the certificate representing such class or series of stock, provided that in lieu of the foregoing, there may be   set forth on the back or face of the certificate a statement that the Corporation will furnish without charge   to each stockholder who requests the powers, designations, preferences, relative or other special rights, qualifications, restrictions and limitations of such class or series.

 

Section 5.2. Lost, Stolen or Destroyed Stock Certificates; Issuance of New Certificates . The corporation may issue a new share certificate or a new certificate for any other security in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the corporation may require the owner   of the lost, stolen  or destroyed certificate, or such owner's legal representative, to give the corporation a bond sufficient to indemnify it against any claim that may be made against it (including any expense or liability) on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate.

 

ARTICLE VI

 

Records and Reports

 

Section 6.1 Shareholder Records . The corporation shall keep at its principal executive office or at the office of its transfer agent or registrar a record of the names and addresses of all shareholders and the number and class of shares held by each shareholder.

 

Section 6.2 By-laws . The corporation shall keep at its principal executive office, or if its principal executive office is not in the State of California, at its principal business office in this state, the original or a copy of the by-laws as amended to date, which shall be open to inspection by the shareholders at all reasonable times during office hours. If the principal executive office of the corporation is outside the State of California and the corporation has no principal business office in this state, the Secretary shall, upon the written request of any shareholder, furnish that shareholder a copy of the by-laws as amended to date.

 

Section 6.3. Minutes and Accounting Records . The minutes of proceedings of the shareholders, the Board of Directors, and committees of the Board, and the accounting books and records shall be kept at the principal executive office of the corporation, or at such other place or   places as designated by the Board of Directors. The minutes shall be kept in written form, and the accounting books and records shall be kept

either in written form or in a form capable of being converted into written form. The minutes and accounting books and records shall be open to inspection upon the written demand of any shareholder or holder of a voting trust certificate at any reasonable time during usual business hours, for a purpose reasonably related to the holder's interests as a shareholder or holder of a voting trust certificate. The inspection may be made in person or by an agent or attorney, and shall include the right to copy and make extracts. These rights of inspection shall extend to the records of each subsidiary of the corporation.

 

Section 6.4. Inspection by Directors . Every director shall have the absolute right at any reasonable time to inspect all books, records, and documents of every kind and the physical properties of the corporation and each of its subsidiary corporations. This inspection by a director may be made in person or by an agent or attorney the right of inspection includes the right to copy and make extracts of documents.

 

Section 6.5. Annual Report to Shareholders . Inasmuch as, and for as long as, there are fewer than 100 shareholders, the requirement of an annual report to shareholders referred to in Section 1501 of the California General Corporation Law is expressly waived. However, nothing in this provision shall be interpreted as prohibiting the Board of Directors from issuing annual or other periodic reports to the shareholders, as the Board considers appropriate.

 

If at any time and for as long as, the number of shareholders shall exceed 100, the Board of Directors shall cause an annual report to be sent to the shareholders not later than 120 days after the close of the fiscal year adopted by the corporation. This report shall be sent at least 15 days (if third-class mail is used, 35 days) before the annual meeting of shareholders to be held during the next fiscal year and in the manner specified for giving notice to shareholders in these by-laws. The annual report shall contain a balance sheet as of the end of the fiscal year and an income statement and a statement of changes in financial position for the fiscal year prepared in accordance with generally accepted accounting principles applied on a consistent basis and accompanied by any report of independent accountants, or, if there is no such report, the certificate of an authorized officer of the corporation that the statements were prepared without audit from the corporation's books and records.

 

Section 6.6.   Financial Statements . The corporation shall keep a copy of each annual financial statement, quarterly or other periodic income statement, and accompanying balance sheets prepared by the corporation on file in the corporation’s principal office for 12 months: these documents shall be exhibited at all reasonable times, or copies provided, to any shareholder on demand.

 

Section 6.7. Form of Records . Any records maintained by the corporation in the regular course of its business, with the exception of minutes of the proceedings of the shareholders, and of the Board of Directors and its committees, but including the corporation's stock ledger and books of account, may be kept on, or be in the form of magnetic tape, photographs, microphotographs or any other information storage device, provided that the records so kept can be converted into clearly legible form within a reasonable time. The corporation shall so convert any records so kept upon the request of any person entitled to inspect the same.

 

ARTICLE VII

 

Miscellaneous

 

Section 7. 1 Principal Executive or Business Offices . The Board of Directors shall fix   the location of the principal executive office of the corporation at any place either within or without the State of California. If the principal executive office is located outside California and the corporation has one or more business offices in California, the Board shall designate one of these offices as the corporation's principal business office in California.

 

Section 7.2. Fiscal Year . The fiscal year of the corporation shall be determined by the Board of Directors.

 

Section 7.3. Seal . The corporation may have a corporate seal which shall have the name of the corporation inscribed thereon and shall be in such form as may be approved from time to time by the Board of Directors. The corporate seal may be used by causing it or a   facsimile thereof to be impressed or affixed or in any other manner reproduced.

 

Section 7.4. Interested Directors; Quorum . No contract or transaction between the Corporation and one or more of its directors or between the corporation and any other corporation, firm or   association in which one or more of its directors are directors, or have a financial interest, shall be void or voidable solely for this reason, or solely because such director or directors are present at the meeting of the Board of Directors or committee thereof which authorizes, approves or ratifies the contract or transaction, or solely because his or her or their votes are counted for such purpose, if: (1) the material facts as to his or her relationship or interest and as to the contract or transaction are fully disclosed or are known to the shareholders and such contract or transaction is approved by the shareholders in good faith with the shares owned by the interested director or directors not being entitled to vote thereon; (2) the material facts as to his or her relationship or interest and as to the contract or transaction are fully disclosed or are known to the Board or the committee, and the Board or committee authorizes, approves or ratifies the contract or transaction in good faith by a vote sufficient without counting the vote of the interested director w directors and the contract or transaction is just and reasonable as to the corporation at the time it was authorized, approved or ratified; or (3) the contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified, by the Board, a committee thereof or the shareholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board or of a committee which authorizes the contract or transaction.

 

Section 7.5.   Indemnification . The corporation shall have the power to indemnify, to the maximum extent and in the manner permitted by the California General Corporation Law (the "Code"), each of its directors, officers, employees and agents against expenses (as defined in subdivision (a) of Section 317 of the Code), judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with any proceeding (as defined in subdivision (a) of Section 317 of the Code), arising by reason of the fact that such person is or was an agent of the corporation. For purposes of this Section 7.5, a "director" or "officer" of the corporation includes any person (i) who is or was a director or officer of the corporation, (ii) who is or was serving at the request of the corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, or (iii) who was a director or officer of a corporation which was a predecessor corporation of the corporation or of another enterprise at the request of such predecessor corporation.

 

The corporation shall have the power, to the extent and in the manner permitted by the Code, to indemnify each of its employees and agents (other than directors and officers) against expenses (as defined in subdivision (a) of Section 317 of the Code), judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with any proceeding (as defined in subdivision (a) of Section 317 of the Code), arising by reason of the fact that such person is or was an agent of the corporation. For purposes of this Section 7.5, an "employee" or "agent" of the corporation includes any person (i) who is or was an employee or agent of the corporation, (ii) who is or was serving at the request of the corporation as an employee or agent of another corporation, partnership, joint venture, trust or other enterprise, or (iii) who was an employee or agent of a corporation which was a predecessor corporation of the corporation or of another enterprise at the request of such predecessor corporation.

 

Section 7.6. Amendment of By-Laws . To the extent permitted by law these by-laws may be amended or repealed, and new by-laws adopted, by the Board of Directors. The shareholders entitled to vote, however, retain the right to adopt additional by-laws and may amend or repeal any by-law whether or not adopted by them.

 

Exhibit 3.3

 

MySkin, Inc.

Charter

of the

Audit Committee of the Board of Directors

 

 

 

The Board of Directors (the “Board”) of MySkin, Inc. (the “Company”), hereby confirms the role of the Audit Committee (the “Committee”) to advise the Board with respect to fulfilling its oversight responsibilities relating to corporate accounting, financial reporting practices, and the quality and integrity of the financial reports of the Company.

 

I.        PURPOSE

 

The primary function of the Audit Committee is to assist the Board of Directors in fulfilling its oversight responsibilities relating to corporate accounting, financial reporting practices, and the quality and integrity of the financial reports of the Company by:

 

1.        reviewing the financial reports and other financial and related information provided by the Company to the Securities and Exchange Commission or the public;

 

2.        reviewing the Company’s system of internal controls regarding finance, accounting, legal compliance and code of business conduct that management and the Board have established;

 

3.        reviewing the Company’s auditing, accounting and financial reporting processes;

 

4.        reviewing and appraising with management the audit efforts of the Company’s independent accountants; and

 

5.        providing an open avenue of communication among the independent accountants, financial and senior management, the internal auditing department and the Board of Directors.

 

The Audit Committee will primarily fulfill these responsibilities by carrying out the activities enumerated in Section IV of the Charter.

 

II.        COMPOSITION

 

The Audit Committee shall be comprised of two or more directors as determined by the Board, one of whom shall be selected by the Board as Chairman.  Members of the Committee shall be non-employee Directors, each of whom shall be a disinterested person within the meaning of Section 10A(m) of the Securities Exchange Act of 1934, as from time to time amended (the “Exchange Act”), Rule 10A-3 thereunder and Rule 16b-3(c)(2) under the Exchange Act, an “independent director” as defined in Rule 4350 of the National Association of Securities Dealers, Inc., and an “outside director” within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended, and the regulations thereunder.  The members of the Audit Committee shall meet the experience requirements of the Exchange Act and each stock exchange on which the Company’s common stock may from time to time be traded.  The members of the Audit Committee shall be elected by the Board at the annual organizational meeting of the Board or until their successors shall be duly elected and qualified.  Unless a Chairperson is elected by the full Board, the members of the Audit Committee may designate a Chairperson by majority vote of the full Audit Committee membership.

 

III.                   MEETINGS

 

The Audit Committee shall meet at least four times annually, or more frequently  as circumstances dictate.  As part of its job to foster open communication, the Audit Committee should meet at least annually with management, the internal auditing department and the independent accountants separately to discuss any matters that the Audit Committee or each of these groups believe should be discussed privately.

 

IV.                   RESPONSIBILITIES AND DUTIES

  

To fulfill its responsibilities and duties the Audit Committee shall:

 

Document/Reports Review

 

1.        Review and reassess, at least annually, the adequacy of this Charter.  Make recommendations to the Board, as conditions dictate, to update this Charter.

 

2.        Review with management and independent accountants the Company’s annual financial statements included in the Form 10-KSB prior to its filing and prior to the release of earnings, including major issues regarding accounting and auditing principles and practices as well as the adequacy of the Company’s internal controls that could significantly affect the Company’s financial statements.  Discuss with the independent accountants the matters required to be discussed by Statement of Auditing Standards No. 61, as amended.

 

3.        Review with management and the independent accountants the Company’s quarterly financial statements included in the Form 10-QSB prior to its filing and prior to the release of earnings.  The Chairperson of the Audit Committee may represent the entire Audit Committee for purposes of this review.

 

4.        Review with the independent accountants the recommendations included in their management letter, if any, and their observations regarding the Company’s financial and accounting procedures.  On the basis of this review make recommendations to the Board for any changes that seem appropriate.  Review any changes required in the planned scope of the audit and the internal auditing department’s responsibilities, budget and staffing.

 

Independent Accountants

 

5.        Review the performance of the independent accountants and make all determinations regarding the appointment or termination of the independent accountants.  The Committee has the ultimate authority and responsibility to select, evaluate and, where appropriate, replace the independent accountants.  The independent accountants are ultimately accountable and shall report directly to the Committee for such accountant’s review of the financial statements and internal controls for the Company.  The fees to be paid to the independent accountants for auditing and non-auditing activities shall be reviewed and approved by the Committee.  On an annual basis, the Committee shall review and discuss with the accountants all significant relationships that the accountants have with the Company to determine the accountants’ independence.

 

6.        Oversee independence of the accountants by:

 

§   receiving from the accountants, on a periodic basis, a formal written statement delineating all relationships between the accountants and the Company consistent with Independence Standards Board Standard 1;

 

§   reviewing, and discussing, with the Board, if necessary, and the accountants, on a periodic basis, any disclosed relationships or services between the accountants and the Company or any other disclosed relationships or services that may impact the objectivity and independence of the accountants; and

 

§   take necessary action to satisfy itself of the accountants’ independence.

 

7.        Pre-approve all auditing and non-auditing services to be provided by the accountants to the Company.  Non-auditing services need not be pre-approved if:

 

§   amounts for all non-audit services aggregate less than five percent of the amounts paid for audit services during the fiscal year; and

 

§   the non-audit services were not believed to be non-audit services at the time of engaging the services; and

 

§   such non-audit services are brought to the attention of the Committee and approved by the Committee prior to completion of the audit for the fiscal year; and

  

Financial Reporting Process

 

8.        In consultation with management and the independent accountants review the integrity of the Company’s financial reporting processes, both internal and external.

 

9.        Establish regular systems of reporting to the Audit Committee by management and the independent accountants regarding any significant financial reporting issues and judgments made in connection with management’s preparation of the financial statements and any significant difficulties encountered by the independent accountants during the course of its review or audit, including any restrictions on the scope of work or access to required information.

 

10.                   Review and resolve any disagreement among management and the independent accountants in connection with the preparation of the financial statements.

 

11.                   Consider and approve, if appropriate, major changes to the Company’s auditing and accounting principles and practices as suggested by the independent accountants or management.  Review with the independent accountants and management the extent to which changes or improvements in financial or accounting practices, as approved by the Audit Committee, have been implemented.

 

12.                   Meet with the independent accountants prior to the annual audit to review the planning and staffing of the audit.

 

13.                   Meet periodically with management to review the Company’s major financial risk exposures and steps management has taken to monitor and control such exposures.

 

Legal Compliance/General

 

14.                   Review, at least on an annual basis, with the Company’s counsel any legal matter that could have a significant impact on the Company’s financial statements, the Company’s compliance policies, and any material reports or inquiries received from regulators or governmental agencies.

 

15.                   Establish procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters, including means for confidential and anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters.

 

16.                   Advise the Board with respect to the Company’s policies and procedures regarding compliance with applicable laws and regulations.

 

17.                   Review the appointment and replacement of internal auditing personnel, review reports to management prepared by the internal auditing department and management’ s responses, and review cooperation of the internal auditing department with the independent auditors.

 

18.                   Retain independent counsel and other advisers the Committee deems necessary to carry out its duties.

 

19.                   Report through its Chairperson to the Board following meetings of the Audit Committee.

 

20.                   Maintain minutes or other records of meeting and activities of the Audit Committee.

 

Following receipt of any reports of the Committee based upon reviews undertaken pursuant to the provisions hereof and recommendations in connection therewith, the Board may accept, reject or modify such reports or recommendations.  Nothing herein contained shall prevent the Board from taking action with respect to the matters described herein without such matters having first been considered by the Committee.

 

While the Audit Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Audit Committee to plan or conduct audits or to determine that the Company’s financial statements are complete and accurate and are in accordance with generally accepted accounting principles.  This is the responsibility of management and the independent accountants.

 

 

Exhibit 10.1

FACILITIES AND MANAGEMENT SERVICES AGREEMENT

 

THIS FACILITIES AND MANAGEMENT SERVICES AGREEMENT is entered into and made effective as of March 1, 2009, by and between Maria Teresa Agner, M.D. and Maria Teresa Agner, MD, Inc., a California Professional Corporation, hereinafter collectively referred to as (“Doctor”) and MySkin, Inc., a California Corporation (“Company”).

W I T N E S S E T H:

WHEREAS , Doctor is a validly existing California professional corporation owned by a duly licensed physician engaged in the practice of medicine; and

WHEREAS , Company is a duly filed and validly existing California corporation which desires to provide facilities and management services including, without limitation, capital, facilities, equipment, personnel and management expertise (“Management Services”) for Doctor’s practice of medicine utilizing Company’s existing facilities located at 811 Victoria Street, Costa Mesa, California 92627 ("Premises"), and such other locations as may be agreed upon by the parties; and

WHEREAS , Doctor desires to obtain such Management Services as are reasonably necessary and appropriate for the management of the non-medical aspects of Doctor’s practice of medicine in the Premises, and desires Company to provide such services.

NOW THEREFORE, for and in consideration of the agreements contained herein and other good and valuable consideration, the receipt and adequacy of which are acknowledged, the parties hereto agree as follows:

1. Definitions .

For the purposes of this Agreement, the following terms shall have the following meanings ascribed thereto, unless otherwise clearly required by the context in which such term is used.

1.1 Agreement . The term "Agreement" shall mean this Facilities and Management Services Agreement between Doctor and Company and any written amendments hereto, as may from time to time be adopted by the Parties hereto, as hereinafter provided.

1.2 Company . The term "Company" shall mean MySkin, Inc., a California Corporation, and any affiliates owned principally by the Company.

1.3 Doctor . The term "Doctor" shall mean Maria Teresa Agner, M.D., individually or the California professional corporation, of which he/she is the majority shareholder.

1.4                 Licensed Personnel The term “Licensed Personnel” shall mean licensed medical employees as described in Section 4.2 hereof.

 

1.5 Practice. The term “Practice” shall mean the medical practice of Doctor in which of the Professional Services are provided on the Premises as described herein.

1.6 Practice Account . The term "Practice Account" shall mean the bank account established as described in Sections 3.11 herein below.

1.7 Practice Expenses . The term “Practice Expenses” shall mean the expenses incurred by the Doctor in the provision of Professional Services as described in Section 3.12 herein below.

1.8 Premises. The term "Premises" shall mean the medical office(s) leased by Company for the Practice of Doctor.

1.9 Professional Services . The term "Professional Services" shall mean certain medical services, specifically including laser hair removal, laser skin enhancement procedures and other cosmetic medical procedures provided by and/or supervised by Doctor in the Premises using Company’s facilities, medical equipment and the employment, training, and supervision of Licensed Personnel.

1.10 Management Account . The term “Management Account” shall mean the bank account established as described in Section 3.13 herein below.

1.11 Management Expenses . The term “Management Expenses” shall mean the expenses incurred by the Company in the provision of Management Services as described in Section 3.14 herein below.

1.12 Management Fee . The term "Management Fee" shall mean Company's compensation as described in Section 5 hereof.

1.13 Management Services The term “Management Services” shall mean management and support services, specifically including the Premises and utilities for the Practice, furniture and equipment, employment of non-licensed personnel, advertising and promotional services, office supplies, etc.

1.14 Term . The term "Term" shall mean the initial and any renewal periods of duration of this Agreement as described in Section 6.1 hereof.

 

2 Appointment and Authority.

2.1 Appointment . Doctor hereby appoints Company as its exclusive agent for the provision of Management Services related to the Practice, and Company hereby accepts such appointment, subject at all times to the provisions of this Agreement.

2.2 Authority of Company . Consistent with the provisions of this Agreement, Company shall have the responsibility and commensurate authority to provide Management Services for Doctor’s Practice, including, without limitation, the provision of office space, equipment, utilities, supplies, support services, non-licensed personnel, marketing, billing and collection services, financial record keeping, and other business management services as provided herein. Company, is hereby expressly authorized to provide all such services in a manner deemed reasonably appropriate to meet the day-to-day requirements of the Practice. Company, at its discretion, shall perform some or all of the Management Services specified hereunder, however, may delegate functions and duties to such other individuals or entities Company deems to be qualified to perform such.

2.3 Authority of Doctor . Doctor shall be solely responsible for the supervision and control over the provision of all Professional Services of the Practice, including all treatment, procedures and other medical services which shall be provided and performed by Doctor or by licensed health care personnel supervised by Doctor, as Doctor, in its sole discretion, deems appropriate and in accordance with all applicable federal, state and local laws, rules and regulations.

3 Obligations of Company .

3.1 Office Facilities. Company shall provide the Premises, which shall be improved and furnished office space adequate for the Practice.

3.2 Equipment . Company shall provide the equipment deemed by the parties hereto to be reasonably necessary and appropriate for the provision of Professional Services on the Premises. Company shall repair and maintain the Premises and equipment provided pursuant to this Agreement. Doctor shall not acquire any title or ownership interest in the Premises or any equipment of the Company made available pursuant to this Agreement.

3.3 Utilities and Related Premises Services . Company shall provide necessary electricity, gas, water, telephone, sewage, waste collection, cleaning (interior and exterior), pest extermination, heating and air-conditioning maintenance, and similar services reasonably necessary and appropriate for the Practice. Company shall provide disposal of all medical and non-medical wastes generated at the Premises including disposal of any bio-hazardous waste and any other medical waste that require special disposal.

3.4 Supplies . Company shall provide office and other business supplies as are reasonably necessary and appropriate for the provision of Professional Services in the Premises. Company shall order on behalf of Doctor all patient care supplies and medications shall in accordance with the specifications of Doctor with respect to brand names, dosages, quantities and other specifications.

3.5 Support Services . Company shall provide all laundry, linen, printing, stationery, forms, postage, duplication or photocopying services, medical record maintenance services, and other similar support services as are reasonably necessary and appropriate for the provision of Professional Services on the Premises.

3.6                 Licenses and Permits . Company shall on behalf of and in the name of Doctor, apply for, obtain and maintain all federal, State and local licenses and regulatory permits required for or in connection with the operation of the Practice and the equipment provided by the Company for use in the Premises. For any licenses and permits relating to the practice of medicine which require the approval or direct action of the Doctor, Doctor agrees to cooperate with Company as reasonably required to obtain such licenses or permits.

 

3.7                 Personnel . Company shall employ or otherwise retain all administrative, clerical, and other non-licensed personnel as Doctor and Company deem reasonably necessary and appropriate for the operation of the Practice. Company shall have the responsibility for the payment of salaries and fringe benefits, and for withholding of income tax, unemployment insurance, social security, or any other withholding pursuant to any applicable law or governmental requirement. In recognition of the fact that the personnel retained by Company to provide services pursuant to this Agreement may from time to time perform services for others, this Agreement shall not prevent Company from performing such services for others or restrict Company from using its personnel to provide services to others, provided such activity does not cause any material detriment to the Practice.

 

3.8                 Marketing . In accordance with applicable laws and applicable ethical standards and restrictions, and subject to Doctor’s approval, Company shall establish and implement, at its expense, a marketing and public relations program promoting Professional Services. Company shall establish signs on or about the Premises identifying the operations of the Practice.

 

3.9 License to Use Tradenames and Trademarks of Company . Doctor’s use of any trademark, trade name, service mark, insignia, slogan, emblem, symbol, design or other identifying characteristic owned by or associated with Company, or any of its subsidiaries or affiliates (collectively, “Company Marks”) shall be subject to the written approval of Company. Doctor acknowledges both before and after the expiration of this Agreement the exclusive right of Company to use or to grant to others the right or license to use any Company Marks. Doctor acknowledges that the use of such Company Marks by Doctor are granted at the absolute discretion of Company, and such use shall terminate immediately upon written notice from Company. Except as specifically authorized by this Agreement, Doctor agrees to not use Company Marks nor imitate or infringe upon any of the foregoing in whole or in part.

Upon the termination of this Agreement for any cause whatsoever, Doctor shall forthwith cease any use of such Company Marks in any signs, advertising and promotional material in order to comply with the provisions of this Section. Upon termination of this Agreement, Doctor shall immediately file a Cancellation of Fictitious Name Permit with the Medical Board which uses the Company name, or name similar thereto.

 

3.10 Collection Policies . Company shall on behalf of Doctor establish and maintain collection policies and procedures, and shall use Company's best efforts to timely collect for all billable Professional Services provided in the Practice. Company and Doctor shall establish a fee schedule for all billable Professional Services. The parties shall consult regarding any changes in such fee schedule prior to implementation of such changes.

In connection with this Section and throughout the Term, Doctor hereby grants a Special Power of Attorney to Company and appoints Company as Doctor's true and lawful agent and attorney-in-fact, and Company hereby accepts such special power of attorney and appointment, for the following purposes:

3.10.1 To bill Doctor's patients, in Doctor's name and on Doctor's behalf, for all billable Professional Services provided in the Practice.

3.10.2 To collect and receive, in Doctor's name and behalf, all accounts receivable generated in the Practice and to deposit all amounts collected in the Practice Account, as defined hereinafter. In connection herewith, Doctor covenants to immediately transfer and deliver to Company all funds received for Professional Services from patients or any third party payors.

3.10.3 To take custody of, endorse in the name of Doctor, and deposit into the Practice Account any notes, checks, money orders, and any other instruments received in payment of the accounts receivable for Professional Services of the Practice.

Upon request of Company, Doctor shall execute and deliver to Company or the financial institution wherein the Practice Account is maintained, any additional documents or instruments as may be reasonably necessary to evidence or effect the Special Power of Attorney granted to Company by Doctor pursuant to this Section 3.11 or pursuant to Section 3.15 hereof.

3.11 Practice Account . Doctor hereby appoints Company as Doctor's true and lawful agent and attorney-in-fact, and grants Company a Special Power of Attorney to have full authority to deposit all funds and revenues generated from the provision of Professional Services of the Practice, and to make withdrawals and sign checks for disbursements for the purpose of making payment of any and all Practice Expenses, including disbursement to the Management Account and all other disbursements as defined herein. Company shall open and maintain a bank account designated as “Practice Account” for the deposits and disbursement of funds of the Practice. The Practice Account shall be opened in the Doctor’s name and under the Doctor’s employment identification number (“EIN”) as issued by the Internal Revenue Service.

3.12 Practice Expenses. Company shall pay from the Practice Account all costs and expenses reasonably related to the Practice, including but not limited to compensation benefits and employment costs associated with all Licensed Personnel, professional liability insurance, medical supplies and all such other direct and indirect expenses reasonably incurred by Doctor in the provision of Professional Services for the Practice (collectively, “Practice Expenses”).

3.13 Management Account . Company shall open and maintain a separate bank account designated as “Management Account” for the deposits and disbursement of funds of the Company. The Management Account shall be opened in the Company’s name and under the Company’s EIN as issued by the Internal Revenue Service.

3.14 Management Expenses. Company shall pay from the Management Account all costs and expenses reasonably related to the provision of any Management Services, including but not limited to office rent, utilities and other occupancy costs, compensation benefits and employment costs associated with all non-licensed personnel, general liability insurance, equipment lease and maintenance costs, advertising and promotion, support personnel and contracted consultants, office supplies, and all such other direct and indirect expenses reasonably incurred by Company respecting the provision of the Management Services for the Practice (collectively, "Management Expenses").

3.15 Accounting and Financial Records . Company shall establish and administer accounting procedures and systems for the preparation, and safekeeping of records and books of account relating to the provision of Professional Services of the Practice, all of which shall be prepared and maintained in accordance with generally accepted accounting principles consistently applied for a cash basis accounting system. Company shall prepare and deliver to Doctor reports reflecting the financial status of the Practice.

3.16 Patient Records . Company shall maintain procedures and policies for the timely filing and maintenance of all patient records generated in the Practice in accordance with all applicable State and federal laws relating to the maintenance and confidentiality of patient records. All patient records shall be the property of Doctor, but shall be maintained by, and in the custody of Company to the extent necessary for Company to fulfill its obligations under this Agreement. Company, to the extent lawfully permitted, shall have access to such patient records, for the purpose of making necessary copies, in the event this Agreement is terminated.

3.17 Indemnification by Company . Company does hereby indemnify, hold harmless, and agrees to defend Doctor and its officers, employees, and agents from and against any claims, obligations, demands, causes of action, losses, liabilities, damages, costs and expenses, including reasonable attorney's fees (collectively "Claims") arising out of or connected with the negligence or fault of Company, its employees, agents, contractors or Company's performance of its obligations within its scope of responsibility hereunder.

4. Obligations of Doctor .

4.1 Organization/Operation . Doctor, individually, and Doctor’s professional corporation, shall at all times during the Term (i) be and remain legally organized to provide Professional Services in a manner consistent with all State and federal laws; (ii) be duly authorized to conduct business in the State of California; and (iii) maintain adequate medical supervision by licensed physicians of all Professional Services provided by the Practice.

4.2                 Licensed Personnel of Doctor . Doctor shall be solely responsible for the selection, employment, training, and supervision of all licensed health care personnel, including, but not limited to physician assistants, nurses and medical assistants, as Doctor deems reasonably necessary and appropriate for Doctor's operation of the Practice, collectively, "Licensed Personnel", while performing Professional Services on the Premises. All Licensed Personnel shall at all times hold and maintain a valid and unlimited license to practice in the State. Payment of the compensation and related costs of such personnel shall be paid from the Practice Account.

 

4.3                 Special Consideration/Non-Competition . Doctor hereby acknowledges that Company will incur substantial costs in providing the Premises, equipment, supplies, support services, non-licensed personnel, marketing, management and other items and services that are the subject matter of this Agreement. Accordingly, Doctor covenants and agrees that during the term of this Agreement and any extension thereof, plus one (1) year thereafter, Doctor or any physician employee or contractor of Doctor, shall neither directly or indirectly (a) solicit or employ any employee or independent contractor of the Practice or Company without prior written approval of the Company, and (b) disclose, communicate or disclose to, or use for the direct or indirect benefit of any other person or entity any confidential information regarding Company's business methods, business policies, procedures, techniques, or trade secrets or other knowledge or processes developed by Company, made known to Doctor or learned or acquired by Doctor hereunder.

 

If any restriction contained in this Section is held by any court or regulatory body to be unenforceable or unreasonable, a lesser restriction shall be enforced in its place and the remaining restrictions set forth herein shall be enforced independently of each other.

4.4 Doctor's Insurance . Company, on behalf of and at Doctor’s expense, shall obtain and maintain throughout the Term hereof appropriate professional liability insurance covering Doctor and all of Doctor's Licensed Personnel in the minimum amount of One Million Dollars ($1,000,000) for each occurrence and Three Million Dollars ($3,000,000) annual aggregate, and such amounts as may be reasonable (collectively, "Professional Insurance"). The insurance policy or policies shall provide for at least thirty (30) days advance written notice from the insurer as to any alteration of coverage, cancellation, or proposed cancellation of coverage for any cause. Doctor shall notify Company of all legal actions or proceedings instituted by or against Doctor arising out of or related to Doctor's operation of the Practice.

4.5 Indemnification by Doctor . Doctor does hereby indemnify, hold harmless, and agrees to defend Company and its officers, employees, and agents from and against any claims, obligations, demands, causes of action, losses, liabilities, damages, costs and expenses, including reasonable attorney's fees (collectively "Claims") arising out of or connected with the negligence or fault of Doctor, its employees, agents, contractors or Doctor's performance of its obligations hereunder.

5 Management Fee.

5.1 Calculation of Management Fee . Doctor and Company mutually acknowledge that Company is making a substantial investment in entering into this Agreement. Payment of the Management Fee is acknowledged as the parties negotiated agreement as to the reasonable, fair market value of the facilities and services, management and other items and services furnished by Company pursuant to this Agreement, considering the nature of the services required, the risks assumed by Company, and the capital being made available to Doctor by Company on a non-recourse basis. In order to properly reflect the adequacy of compensation for the range of services provided by Company, it is mutually agreed that the Management Fee shall be reviewed at least annually for possible renegotiation based upon the extent of management services to be provided.

Doctor shall reimburse Company for the actual, documented costs of all Management Services, as set forth in Exhibit A, provided by the Company to the Doctor in accordance with this Agreement. Additionally, for the billing and collection services, and support and management services described herein that will be provided by Company, as well as for its efforts in providing the office space and equipment for the Doctor, Doctor shall pay Company a fixed monthly fee (the “Service Fee”) as set forth in Exhibit A. Reimbursement of Company’s costs plus the Service Fee are referred to herein collectively as the “Management Fee” and shall be payable by Doctor to Company in accordance with this Section 5.1, as well as pursuant to Exhibit “A,” hereto, payable on the fifth day of each month during the Term.

In the event that the accumulated Gross Collected Revenues are insufficient to allow payment of all Practice Expenses and the Management Fee incurred, then the amount payable for the Management Fees accrued may be accumulated at the discretion of the Company and payable in any future month(s) that funds become available from the Practice Account, however, the Management Fee shall by payable solely from the Practice Account. Doctor shall incur no liability for repayment other than from such funds.

5.2 INTENTIONALLY LEFT BLANK

5.3 Loans to Practice Account. In the event that funds are required to be advanced by Company to provide for working capital for the operation of the Practice, such funds shall be reimbursed to Company from the Practice Account as soon as available. Any loan amounts which are not repaid to Company within thirty (30) days from disbursement by Company shall bear interest at the rate of eight percent (8%) on the unpaid balance until repaid. Any amounts advanced shall be reimbursed to Company solely from the Practice Account from funds generated from the Practice, and Doctor shall incur no liability for repayment other than from such funds.

5.4 Right to Inspect Records. Doctor shall upon reasonable notice to Company have the right to inspect the records related to this Agreement to ascertain the Collected Revenues, Practice Expenses, and calculation of Company's Management Expenses and Management Fee. Payment of the Management Fee is acknowledged as the parties' negotiated agreement as to the reasonable, fair market value of the facilities and services, management and other items and services furnished by Company pursuant to this Agreement, considering the nature of the services required and the risks assumed by Company.

6 Term and Termination .

6.1 Initial and Renewal Terms . This Agreement shall be effective as of March 1, 2009, for a period of One (1) year therefrom, and shall be automatically extended for additional one (1) year periods unless terminated pursuant to Section 6.2. Either party hereto may, without cause, terminate this Agreement by providing at least sixty (60) days written notice to the other party prior to such termination.

6.2 Termination . This Agreement may be terminated upon the first to occur of any of the following events:

6.2.1 Termination by Agreement . In the event Doctor and Company shall mutually agree in writing, this Agreement may be terminated on the date specified in such written agreement.

6.2.2 Bankruptcy . In the event that either party becomes insolvent, or if any petition under federal or State law pertaining to bankruptcy or insolvency or for a reorganization or arrangement or other relief from creditors shall be filed by or against either party, or if any assignment, trust, mortgage, or other transfer shall be made of all or a substantial part of the property of either party, or if either party shall make or offer a compromise in its debts with its creditors, or if a receiver, trustee, or similar officer or creditor's committee shall be appointed to take charge of any property of or to operate or wind up the affairs of either party, then the other party may by written notice immediately terminate this Agreement.

6.2.3 Specific Doctor Breaches . At Company's option, in the event that any of the following occurs with respect to Doctor’s physician shareholder, that he shall (i) die or be involuntarily inducted into the active military services of the United States, (ii) fail by omission or commission in any substantial manner to provide Professional Services in a competent manner, (iii) fail to meet any of the qualifications set forth in Section 4.1 hereof, (iv) has his license to practice medicine revoked, suspended, canceled or limited in any manner, (v) is convicted of a felony or any crime of moral turpitude, or (vi) refuses to deliver to the Company all revenues received respecting the provision of Professional Services of the Practice.

6.2.4 Company Breaches . At Doctor's option, in the event Company (i) fails to make timely payments of the obligations it has undertaken or (ii) is in default of any material obligations having an impact upon Doctor, then Doctor may by written notice to Company terminate this Agreement if Company has failed to cure such default within thirty (30) days of Doctor's written notice of such violation, provided if such breach cannot by its nature be reasonably cured within thirty (30) days then Company shall have such time as may be reasonable to cure the breach.

6.2.5 Action by Medical Board or Other Authority with Legal Jurisdiction . While both parties believe that this Agreement is in full compliance with the California Business and Professional Code and Code of Regulations, the interpretation of the Codes and other relevant acts are subject to change. In the event the Medical Board for the State or other authority with legal jurisdiction shall, solely by virtue of this Agreement, initiate an action to revoke the license of any physician retained by Doctor to practice medicine in the State, or initiate any action against the Company, either party hereto may, by written notice to the other party, immediately request that the Agreement be amended in a mutually acceptable manner. Any amendment shall be made in the lawful manner which results in the least changes to the parties' expectations hereunder. In the event the offending provisions of the Agreement cannot be cured as to the legality of such provisions to the satisfaction of both parties, then either party may terminate this Agreement upon ten (10) days written notice, and such termination shall be conducted as set forth in Section 6 of this Agreement.

6.2.6 Default . In the event either party shall give written notice to the other that such other party has substantially defaulted in the performance of any material duty or material obligation imposed upon it by this Agreement, and such default shall not have been cured within thirty (30) days following the giving of such written notice, the party giving such written notice shall have the right to immediately terminate this Agreement unless the defaulting party shall, within said thirty (30) day period, have made a good faith effort to initiate corrective action and it is contemplated that such corrective action will be completed within the following thirty (30) day period.

6.3 Effects of Termination . Upon termination of this Agreement, as hereinabove provided, neither party shall have any further obligations hereunder except for (i) obligations accruing prior to the date of termination, and (ii) obligations, promises, or covenants set forth herein or in those collateral agreements of even date herewith that are expressly made to extend beyond the Term, including, without limitation, indemnities, non-compete and fees which provisions shall survive the expiration or termination of this Agreement.

6.4 Continued Professional Services . Following any notice of termination hereunder, whether given by Company or Doctor, Doctor and Company will fully cooperate with each other in all matters relating to the performance or discontinuance of Professional Services, as appropriate.

7 Miscellaneous Provisions .

7.1 Exhibits, Schedules and Other Instruments . As used herein, the expression "this Agreement" means the body of this Agreement and all exhibits, certificates, and schedules; and the expressions "herein," "hereof," and "hereunder" and other words of similar import refer to this Agreement and such exhibits, certificates, and schedules as a whole and not to a particular part or subdivision thereof unless otherwise clearly indicated.

7.2 Independent Relationship . It is mutually understood and agreed that Doctor and Company, in performing their respective duties and obligations under this Agreement, are at all times acting and performing as independent contractors with respect to each other, and nothing in this Agreement is intended nor shall be construed to create an employer/employee relationship or a joint venture relationship, or to allow Company to exercise control or direction of any nature, kind, or description over the manner or method by which Doctor performs Professional Services.

7.3 Notices . Any notice, demand, or communication required, permitted, or desired to be given shall be deemed effectively given (i) when personally delivered, (ii)  three (3) business days next following the day the notice is, mailed by prepaid certified mail, return receipt requested, or (iii) the next business day following deposit with a reputable overnight courier, addressed as follows:

 

Doctor: 811 Victoria Street

Costa Mesa, CA 92627

 

Company: 811 Victoria Street

Costa Mesa, CA 92627

or to such other address, and to the attention of such other person or officer as any party may designate, with copies thereof to the respective counsel thereof as notified by such party. Rejection or other refusal to accept or the inability to deliver because of a changed address of which no notice was given in accordance with the provisions hereof, shall be deemed to be receipt of the notice sent.

 

7.4 Legal Fees and Costs . In the event either party brings any action for relief against the other, declaratory or otherwise, arising out of this Agreement (including actions to enforce and interpret this Agreement), the losing party shall pay to the prevailing party, in addition to any other relief to which such party shall be entitled, a reasonable sum for attorneys fees incurred in bringing such suit and/or enforcing any judgment granted therein, all of which shall be deemed to have accrued upon the commencement of such action and shall be paid whether or not such action is prosecuted to judgment. Any judgment or order entered in such action shall contain a specific provision providing for the recovery of attorney fees and costs incurred in enforcing such judgment, in addition to any other relief to which such party shall be entitled.

7.5 Choice of Law and Venue . THIS AGREEMENT HAS BEEN EXECUTED AND DELIVERED IN AND SHALL BE INTERPRETED, CONSTRUED, ENFORCED AND GOVERNED BY AND IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, AND THAT THE COURTS OF THAT STATE SHALL BE THE EXCLUSIVE COURTS OF JURISDICTION AND VENUE FOR ANY LITIGATION, SPECIAL PROCEEDING OR OTHER PROCEEDING AS BETWEEN THE PARTIES THAT MAY BE BROUGHT, OR ARISE OUT OF, IN CONNECTION WITH, OR BY REASON OF THIS AGREEMENT. EACH PARTY HEREBY CONSENTS TO THE JURISDICTION OF SUCH COURTS.

7.6 Assignment . Except as may be herein specifically provided to the contrary, this Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective legal representatives, successors, and assigns; provided, however, that Doctor shall not assign, transfer or pledge his rights and obligations under this Agreement or collaterally assign or hypothecate this agreement without the prior written consent of Company. Company shall have the right to (i) assign its rights and obligations hereunder to any affiliated third party and (ii) collaterally assign its interest in this Agreement and its right to collect Management Fees hereunder to any financial institution or other third party without the consent of Doctor. Company must provide ten days prior written notice to Doctor prior to assigning this Agreement.

7.7 Waiver of Breach . The waiver by either party of a breach or violation of any provision of this Agreement shall not operate as, or be construed to constitute, a waiver of any subsequent breach of the same or another provision hereof.

7.8 Enforcement . All claims and disputes relating to this Agreement shall be subject to confidential arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association then obtaining and with one arbitrator. Written notice of demand for arbitration shall be filed with the other party to the Agreement and with the American Arbitration Association, within a reasonable time after the dispute has arisen. In the event either party resorts to legal action to enforce the arbitration results or any other provision of this Agreement, the prevailing party shall be entitled to recover the costs of such action so incurred, including, without limitation, reasonable attorneys' fees.

7.9 Gender and Number . Whenever the context of this Agreement requires, the gender of all words herein shall include the masculine, feminine, and neuter, and the number of all words herein shall include the singular and plural. The term "person" when used herein shall mean an individual, partnership, joint venture, corporation, trust, government entity, and association.

7.10 Additional Assurances . Except as may be herein specifically provided to the contrary, the provisions of this Agreement shall be self-operative and shall not require further agreement by the parties; provided, however, at the request of either party, the other party shall execute such additional instruments and take such additional acts as are reasonable and as the requesting party may deem necessary to effectuate this Agreement.

7.11 Consents, Approvals, and Exercise of Discretion . Except as may be herein specifically provided to the contrary, whenever this Agreement requires any consent or approval to be given by either party, or either party must or may exercise discretion, the parties agree that such consent or approval shall not be unreasonably withheld or delayed, and such discretion shall be reasonably exercised in good faith.

7.12 Force Majeure . Neither party shall be liable or deemed to be in default for any delay or failure in performance under this Agreement or other interruption of service deemed to result, directly or indirectly, from acts of God, civil or military authority, acts of public enemy, war, accidents, fires, explosions, earthquakes, floods, failure of transportation, strikes or other work interruptions by either party's employees, or any other similar cause beyond the reasonable control of either party.

7.13 Severability . In the event any provision of this Agreement is held to be invalid, illegal, or unenforceable for any reason and, in any respect, if the extent of such invalidity, illegality or unenforceability does not destroy the basis of the bargain herein such invalidity, illegality, or unenforceability shall in no event affect, prejudice, or disturb the validity of the remainder of this Agreement, which shall be in full force and effect, and enforceable in accordance with its terms as if such provisions had not been included, or had been modified as provided below, as the case may be. To carry out the intent of the parties hereto as fully as possible, the invalid, illegal or unenforceable provision(s), if possible, shall be deemed modified to the minimum extent necessary and possible to render such provision(s) valid and enforceable.

7.14 Future Laws and Regulations. To carry out the intent of the parties to comply with all laws and regulations affecting and governing this Agreement, the parties hereto agree that, if any laws or regulations are enacted after the effective date of this Agreement that cause any portion of this Agreement to be illegal, invalid, or unenforceable, the parties shall modify the affected terms to comply with the enacted laws and regulations. However, if the parties fail to modify this Agreement to conform with those laws and regulations, or if any opinions issued by a court interpreting governing laws or regulations find any portion of this Agreement illegal, invalid, or unenforceable, section 7.13 of this Agreement shall govern.

7.15 Divisions and Headings . The division of this Agreement into articles, sections, and subsections and the use of captions and headings in connection therewith are solely for convenience and shall not affect in any way the meaning or interpretation of this Agreement.

7.16 Amendments and Agreement Execution . This Agreement and amendments thereto shall be in writing and executed in multiple copies on behalf of Doctor by its duly authorized representative and on behalf of Company by its duly authorized representative. Each multiple copy shall be deemed an original, but all multiple copies together shall constitute one and the same instrument.

7.17 Time of Essence . Time shall be of the essence with respect to this Agreement.

7.18  Entire Agreement/Amendment . This Agreement supersedes all previous written or oral agreements, negotiations, and understandings, and constitutes the entire agreement of whatsoever kind or nature existing between or among the parties respecting the within subject matter and no party shall be entitled to benefits or subject to obligations other than those specified herein. As between or among the parties, no oral statements or prior written material not specifically incorporated herein shall be of any force and effect; the parties specifically acknowledge that in entering into and executing this Agreement, the parties rely solely upon the representations and agreements contained in this Agreement and no others. All prior representations or agreements, whether written or verbal, not expressly incorporated herein are superseded. This Agreement may not be amended, supplemented, canceled or discharged except by written instrument executed by all parties hereto. This Agreement may be executed in two or more counterparts, each and all of which shall be deemed an original and all of which together shall constitute one instrument. It shall not be necessary that the signatures of all of the parties appear on each counterpart; it shall be sufficient that the signature of each party appear on one or more counterparts.

7.19 Rules of Construction . The parties acknowledge that each party and its counsel have reviewed and revised this Agreement, and the parties hereby agree that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any amendments or exhibits, certificates and schedules hereto. The term "include" or "including" shall mean without limitation by reason of enumeration.

7.20 Third Parties . None of the provisions of this Agreement shall be for the benefit of third parties or enforceable by any third party. Any agreement to pay an amount and any assumption of a liability herein contained, expressed or implied, shall only be for the benefit of the parties hereto and such agreement or assumption shall not inure to the benefit of the any third party, including an obligee.

 

IN WITNESS WHEREOF, Doctor and Company have executed this Agreement in multiple originals as of the date written above.

 

Doctor:

By Maria Teresa Agner

Its: President

 

Company:

By Marichelle Stoppenhagen

Its: President

EXHIBIT “A”

 

 

MANAGEMENT FEE CALCULATION

 

Company and Doctor acknowledge and mutually agree that during the initial twelve (12) months of this Agreement, in consideration for the value of Management Services provided, Company shall be paid a Management Fee as set forth in this Exhibit A and as described in Section 5 of this Agreement, in an amount to reimburse for all Management Expenses incurred directly or indirectly, including but not limited to: office rent and occupancy costs, lease and maintenance of equipment, utilities, employment of non-licensed personnel, general liability insurance, office and other supplies, advertising and promotion, and other related expenses.

 

In addition to such reimbursement of Management Expenses, a monthly service fee equal to Forty Percent (40%) of Gross Collected Revenue, shall be calculated and payable monthly, with a minimum amount of Two Thousand Five Hundred Dollars ($2,500) per month (“Service Fee”). Gross Collected Revenue shall be defined as the gross amount of all sums collected from the Professional Services performed and medical supplies provided by or on behalf of Doctor in the Practice, and shall not include revenue collected by Company from customers of Company for non-medical services or products provided. Payment of the Management Fee shall be payable on or before the 15 th day of each month of this Agreement following the month services were performed.

 

In order to properly reflect the adequacy of compensation payable for the range of services provided by Company, it is mutually agreed that the Management Fee shall be reviewed for possible renegotiation at least annually.

Exhibit 10.2

 

Exhibit 10.2

 

THIS REVOLVING PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND HAS BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL FOR THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT.

______________________________________________________________________________

 

 

$100,000 As of December 28, 2011

Orange County, California

 

 

REVOLVING PROMISSORY NOTE

 

In consideration of such advances (hereinafter “ Advance ” or “ Advances ”) as Marichelle Stoppenhagen, or its assigns (collectively, “ Holder ”), from time to time may make hereon to or for the benefit of Myskin, INC. , a California corporation (the “ Company ”), at such other place as the parties may mutually agree, pursuant to the Revolving Credit Commitment, as defined below, up to the maximum aggregate principal amount of One Hundred Thousand U.S. Dollars ($100,000) (the “ Maximum Aggregate Amount ”), the Company hereby promises to pay to Holder the principal amount of all Advances, together with accrued interest thereon from the date of such Advances, all subject to the terms and conditions set forth below.

 

Revolving Credit Commitment .

Advances . The Holder agrees to make Advances to the Company from time to time during the Revolving Credit Commitment Period, as defined below, in an aggregate principal amount at any one time outstanding which does not exceed the Maximum Aggregate Amount (the “ Revolving Credit Commitment ”). During the Revolving Credit Commitment Period, the Company may use the Revolving Credit Commitment by borrowing, prepaying any Advances in whole or in part, and re-borrowing, all in accordance with the terms and conditions hereof.

1.2 Interest . Interest shall accrue from the date of any Advances on any principal amount withdrawn, and on accrued and unpaid interest thereon, at the rate of six percent (6%) per annum, compounded annually.

Revolving Credit Commitment Period . The revolving credit commitment period (the “ Revolving Credit Commitment Period ”) shall commence as of the date hereof and shall expire on December 31, 2012 (the “ Expiration Date ”).

Procedure for Revolving Credit Advances .

The Company may request Advances under the Revolving Credit Commitment during the Revolving Credit Commitment Period on any day of the week, Monday through Friday, 9 a.m. through 5 p.m., Pacific Time, (hereinafter referred to as any “ Business Day ” or “ Business Days ”), provided that the Company shall give the Holder irrevocable notice (which notice must be received by the Holder prior to 12:00 Noon, Pacific Time) one (1) Business Day prior to the requested Advance date, specifying (i) the amount of the Advance, and (ii) the requested Advance date. Each Advance under the Revolving Credit Commitment shall be in an amount equal to $5,000 or a whole multiple of $5,000 in excess thereof. Upon receipt of any such notice from the Company, the Holder will make the amount of the Advance available prior to 12:00 Noon, Pacific Time, on the Advance date requested by the Company in funds immediately available to the Company.

The Holder shall maintain in accordance with its usual practice an account or accounts evidencing indebtedness of the Company to the Holder resulting from each Advance from time to time, including the amounts of principal and interest payable and paid to the Holder from time to time under this Note. The parties acknowledge and agree that as of the date hereof, an aggregate principal amount of $65,000 in Advances is outstanding.

Repayment Procedure .

General . Repayment on any Advances shall be made in lawful tender of the United States. Any payments on this Note made during the Revolving Credit Commitment Period, as defined below, shall be credited first to any interest due and the remainder to principal.

Repayment of Principal and Interest . All outstanding and unpaid principal, and all outstanding and accrued unpaid interest, shall become due and payable on and as of the Expiration Date.

4.3 Optional Prepayment . The Company may, at any time and from time to time and without penalty, prepay all or any portion of the accrued and unpaid interest on this Note and any outstanding principle amount of this Note.

Transfers .

Holder acknowledges that this Note has not been registered under the Securities Act of 1933, and agrees not to sell, pledge, distribute, offer for sale, transfer or otherwise dispose of this Note in the absence of (i) an effective registration statement under the Securities Act as to this Note and registration or qualification of this Note under any applicable Blue Sky or state securities laws then in effect, or (ii) an opinion of counsel, satisfactory to the Company, that such registration and qualification are not required.

Subject to the provisions of Section 5.1 hereof, this Note and all rights hereunder are transferable, in whole or in part, upon surrender of the Note with a properly executed assignment, in the form prescribed by the Company, at the principal office of the Company; provided, however, that this Note may not be transferred in whole or in part without the prior written consent of the Company.

Until any transfer of this Note is made in the Note register, the Company may treat the registered Holder of this Note as the absolute owner hereof for all purposes; provided, however, that if and when this Note is properly assigned in blank, the Company may (but shall not be required to) treat the bearer hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary.

The Company will maintain a register containing the name and address of the registered Holder of this Note. Any registered Holder may change such registered Holder’s address as shown on the Note register by written notice to the Company requesting such change.

In the discretion of the Company, the Company may condition any transfer of all or any portion of this Note (other than a disposition satisfying the conditions set forth in clause (i) of Section 5.1 above) upon the transferee’s delivery to the Company of a written agreement, in form and substance satisfactory to the Company, whereby the transferee agrees to be bound by the transfer restrictions set forth in this Section 5.

 

Events of Default .

Events of Default . The occurrence of any or all of the following events shall constitute an event of default (each, an “ Event of Default ”) by the Company under this Note:

(i) Default by the Company in any payment on this Note after any such payment becomes due and payable; or

 

(ii) Breach by the Company of any material provisions of any agreement between the Company and the Holder; or

 

(iii) The Company shall file a voluntary petition in bankruptcy or any petition or answer seeking for itself any reorganization, readjustment, arrangement, composition or similar relief; or shall commence a voluntary case under the federal bankruptcy laws; or shall admit in writing its insolvency or its inability to pay its debts as they become due; or shall make an assignment for the benefit of creditors; or shall apply for, consent to, or acquiesce in the appointment of, or the taking of possession by, a trustee, receiver, custodian or similar official or agent of the Company or of substantially all of its property and shall not be discharged within ninety (90) days; or a petition seeking reorganization, readjustment, arrangement, composition or other similar relief as to the Company under the federal bankruptcy laws or any similar law for the relief of debtors shall be brought against the Company and shall be consented to by it or shall remain undismissed for ninety (90) days.

 

Consequence of Default . Upon the occurrence of any Event of Default, the Holder shall be held in a first credit position on the entire amount due on this Note, and, this Note shall immediately become due and payable upon written notice from the Holder, and, from the time of the Company’s receipt of such written notice until this Note shall be paid in full, the unpaid outstanding principal balance of this Note shall bear interest at the rate of ten percent (10%) per annum or the legal rate of interest, whichever is lower, (calculated on the basis of a three hundred sixty-five (365) day year for the actual number of days elapsed) (the “ Default Rate ”). Moreover, after the occurrence of any such Event of Default, the Holder may proceed to protect and enforce its rights, at law, in equity or otherwise, against the Company.

Payment of Costs and Expenses . In the event that this Note is placed in the hands of any attorney for collection, or any suit or proceeding is brought for the recovery or protection of the indebtedness hereunder, then and in any such events, the Company shall pay on demand all reasonable costs and expenses of such suit or proceedings incurred by the Holder, including a reasonable attorneys' fee.

Miscellaneous .

Delay . No extension of time for payment of any amount owing hereunder shall affect the liability of the Company for payment of the indebtedness evidenced hereby. No delay by the Holder or any holder hereof in exercising any power or right hereunder shall operate as a waiver of any power or right hereunder.

Waiver and Amendment . No waiver or modification of the terms of this Note shall be valid without the written consent of the Holder.

Governing Law . This Note shall be governed by and construed in accordance with the laws of the State of California as applied to contracts entered into between California residents wholly to be performed in California, without regard to conflict of law principles of such State.

Severability . In case any provision contained herein (or part thereof) shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or other unenforceability shall not affect any other provision (or the remaining part of the affected provision) hereof, but this Note shall be construed as if such invalid, illegal, or unenforceable provision (or part thereof) had never been contained herein, but only to the extent that such provision is invalid, illegal, or unenforceable.

Notice . All notices and other communications among the parties shall be in writing and shall be deemed to have been duly given when (i) delivered by email or in person, or (ii) five (5) days after posting in the U.S. mail as registered mail or certified mail, return receipt requested, or (iii) delivered by telecopier and promptly confirmed by delivery in person or post as aforesaid in each case, with postage prepaid, addressed as follows:

If to the Company, to:

 

MySkin, Inc.

Marichelle@myskinmed.com

 

 

 

If to the Holder, to:

 

Marichelle Stoppenhagen

Marichelle13@hotmail.com

 

 

IN WITNESS WHEREOF, the Company has caused this Note to be duly executed and delivered by its authorized officer as of the date first above written.

 

 

MYSKIN, INC. , a California corporation

 

 

By: /s/ MARICHELLE STOPPENHAGEN

Name: Marichelle Stoppenhagen

Title: President

 

 

 

ACKNOWLEDGED:

 

Marichelle Stoppenhagen

 

 

By: /s/ MARICHELLE STOPPENHAGEN

Name: Marichelle Stoppenhagen

 

 

SECURITY AGREEMENT

THIS SECURITY AGREEMENT (the “ Security Agreement ”) is entered into as of December 28, 2011, by and between MARICHELLE STOPPENHAGEN (“Lender”) and MYSKIN , INC., a California corporation (“ Debtor ”).

RECITALS

A. Debtor has issued to Lender a Revolving Promissory Note (such Note, as the same may be modified, amended, supplemented or restated from time to time, the “ Note ”) in the aggregate principal amount of $100,000. All terms not otherwise defined herein shall have the meaning set forth in the Note.

B. As security for the payment and performance of its obligations to the Lender under the Note, it is the intent of Debtor to grant to Lender a security interest in all of the Collateral, on the terms and conditions provided herein.

AGREEMENT

NOW, THEREFORE, in consideration of the above Recitals and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Debtor hereby agrees as follows:

Grant of Security Interest . Debtor hereby pledges and grants to Lender, a security interest in the Collateral (as defined in Section 2) to secure payment and performance of the Obligations (as defined in Section 3).

Collateral . The collateral shall consist of all right, title and interest of Debtor as of the date hereof in and to the following properties, assets and rights of the Debtor, wherever located (all of the same being hereinafter called, the “ Collateral ”): all personal and fixture property of every kind and nature including, without limitation, all goods (including, without limitation, inventory, equipment (including, without limitation, computer hardware and software, furniture, furnishings and fixtures), instruments (including, without limitation, promissory notes), documents, accounts, chattel paper (whether tangible or electronic), deposit accounts, letter-of-credit rights, securities and all other investment property, supporting obligations, any other contract rights or rights to the payment of money, insurance claims and proceeds, patents and patent applications, copyrights and copyrighted works, trademarks, service marks and logos, computer software programs, and all general intangibles (including all payment intangibles). For the avoidance of doubt, the Collateral specifically excludes any and all personal property of Debtor acquired after the date hereof.

Obligations . The obligations of Debtor secured by this Security Agreement shall consist of any and all debts, obligations and liabilities of Debtor to Lender, whether now existing or hereafter arising, voluntary or involuntary, whether or not jointly owed with others, direct or indirect, absolute or contingent, liquidated or unliquidated, and whether or not from time to time decreased or extinguished and later increased, which are created or incurred, arising out of, connected with or related to the Note, including, without limitation, this Security Agreement and all amendments of the Note (collectively, the “ Obligations ”).

Representations and Warranties . Debtor hereby represents and warrants to Lender as of the date hereof, that: (a) except for the liens listed on Schedule A attached to the Note, and the liens granted to Lender hereunder, Debtor is the owner of the Collateral with the right, power and authority to grant a security interest in its right, title and interest therein to Lender and no other person has any right, title, claim, license or interest (by way of security interest or other lien, charge or otherwise) in, against or to the Collateral; (b) Debtor has full power and authority to execute this Security Agreement and perform its obligations hereunder, and to subject the Collateral to the security interest created hereby; (c) this Security Agreement is effective to create a valid security interest and, upon the filing of the appropriate financing statements, a perfected security interest in favor of Lender in the Collateral, and (d) all action by Debtor necessary to protect and perfect such security interest has been duly taken.

Covenants of Debtor . Debtor hereby agrees (a) to do all acts that may be necessary to maintain, preserve and protect the Collateral and not to fail to renew and not to abandon any Collateral; (b) to pay promptly prior to delinquency all taxes, assessments, charges, encumbrances and liens now or hereafter imposed upon or affecting any Collateral; (c) to notify Lender promptly of any change in Debtor’s name or place of business, or, if Debtor has more than one place of business, its chief executive office; (d) to procure, execute and deliver from time to time any endorsements, assignments, financing statements and other writings reasonably necessary to perfect, maintain and protect Lender’s security interest hereunder and the priority thereof; (e) to permit Lender to inspect the Collateral at any reasonable time, wherever located; (f) not to sell, encumber or otherwise dispose of or transfer any Collateral or right or interest therein except as hereinafter provided, and to keep the Collateral free of all security interests, other liens or charges, except those approved in writing by Lender; (g) to keep the Collateral in good order and repair; (h) to keep the Collateral and the records concerning the Collateral at the location(s) set forth in Section 16 and not to remove the Collateral from such location(s) without fifteen (15) days notice to Lender; and (i) to comply with all laws, regulations and ordinances relating to the possession and control of the Collateral.

Authorized Action by Lender . In the event any principal of the Note is not paid when due, Debtor hereby designates and appoints Lender as attorney-in-fact of Debtor irrevocably and with power of substitution, with authority to execute and deliver for and on behalf of Debtor any and all instruments, documents, agreements and other writings necessary or advisable for the exercise on behalf of Debtor of any rights, benefits or options created or existing under or pursuant to this Security Agreement; provided , that Lender shall deliver to the Debtor a copy of any such instruments, documents, agreements and other writings. This power of attorney being coupled with an interest is irrevocable while any of the Obligations shall remain unpaid. It is further agreed and understood between the parties hereto that such care as Lender gives to the safekeeping of its own property of like kind shall constitute reasonable care of the Collateral when in Lender’s control.

Default and Remedies . In the event any principal of the Notes is not paid when due, Lender may, at its option, do any one or more of the following: (a) foreclose or otherwise enforce Lender’s security interest in any manner permitted by law, or provided for in this Security Agreement; (b) sell, lease or otherwise dispose of any Collateral at one or more public or private sales, whether or not such Collateral is present at the place of sale, for cash or credit or future delivery, on such terms and in such manner as Lender may determine; (c) recover from Debtor all costs and expenses, including, without limitation, reasonable attorneys’ fees, incurred or paid by Lender in exercising any right, power or remedy provided by this Security Agreement or by law; and (d) enter onto property where any Collateral is located and take possession thereof with or without judicial process. In the event any principal of the Note is not paid when due, Debtor agrees to execute any and all documents reasonably requested by Lender to enable it to exercise its rights hereunder.

Cumulative Rights . The rights, powers and remedies of Lender under this Security Agreement shall be in addition to all rights, powers and remedies given to Lender by virtue of any statute or rule of law, the Note or any other agreement, all of which rights, powers and remedies shall be cumulative and may be exercised successively or concurrently without impairing Lender’s security interest in the Collateral.

Waiver . Any forbearance or failure to delay by Lender in exercising any right, power or remedy shall not preclude the further exercise thereof, and every right, power or remedy of Lender shall continue in full force and effect until such right, power or remedy is specifically waived in a writing executed by Lender.

Successors and Assigns; Amendment . This Security Agreement and all rights and obligations hereunder shall be binding upon Debtor and its successors and assigns, and shall inure to the benefit of Lender and its respective successors and assigns. Neither this Security Agreement nor any term hereof may be changed, waived, discharged or terminated except by a written instrument expressly referring to this Security Agreement and to the provisions so modified or limited, and executed by the parties hereto.

Entire Agreement; Severability . This Security Agreement and the Note contain the entire agreement between Lender and Debtor with regard to the subject matter hereof. If any of the provisions of this Security Agreement shall be held invalid or unenforceable, this Security Agreement shall be construed as if not containing those provisions and the rights and obligations of the parties hereto shall be construed and enforced accordingly.

Choice of Law . THIS SECURITY AGREEMENT AND ALL AMENDMENTS, SUPPLEMENTS, WAIVERS AND CONSENTS RELATING HERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. Where applicable and except as otherwise defined herein, terms used herein shall have the meanings given them under California Law.

Residence; Trade Name; Collateral Location Records . Debtor represents and warrants that its chief executive office is located at the address set forth on the signature page to this Security Agreement.

Notice . All notices and other communications required to be delivered to any party (a) must be in writing, (b) must be personally delivered, transmitted by a recognized courier service or transmitted by facsimile, and (c) must be directed to such party at its address or facsimile number set forth on the signature pages to this Security Agreement. All notices will be deemed to have been duly given and received on the date of delivery if delivered personally, three (3) days after delivery to the courier if transmitted by courier, or the date of transmission with confirmation if transmitted by facsimile, whichever occurs first. Any party may change its address or facsimile number for purposes hereof by notice to all other parties.

Miscellaneous . This Security Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. This Security Agreement may only be amended by a writing duly executed by the parties hereto. The headings contained herein are for reference purposes only and shall not affect in any way the meaning or interpretation of this Security Agreement.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 
 

IN WITNESS WHEREOF, the parties hereto have caused their duly authorized representatives to execute this Security Agreement as of the date first set forth above.

“Debtor” “Lender”

MYSKIN, INC.,

a California corporation

 

 

By: /s/ MARICHELLE STOPPENHAGEN

Name: Marichelle Stoppenhagen

Title: President

MARICHELLE STOPPENHAGEN

 

 

 

By: /s/ MARICHELLE STOPPENHANGEN

Name: Marichelle Stoppenhagen

Title: Self

 

 

Address: Address:

MySkin , Inc.

410 32nd St., Ste. 203
Newport Beach, CA 92663
Attn: President

 

Marichelle Stoppenhagen.

 

Attention: President

Attn:

Exhibit 14.1

 

MySkin, Inc.

 

CODE OF BUSINESS ETHICS AND CONDUCT

 

Overview

 

Policy Statement

 

MySkin is committed to complying with all applicable laws and regulations and to adhering to the highest ethical standards in the conduct of its business.  This is not just a matter of being a good corporate citizen.   It is essential to the long-term interests of our employees and stockholders. MySkin's business is subject to oversight by numerous federal and state government entities.  The number of laws, regulations and other legal requirements that affect the Company's business will undoubtedly increase.  These changes will also create new challenges as we adapt ourselves and our business to new situations.  In light of these challenges, it is absolutely necessary that we have a central set of guiding principles to act as a legal and ethical compass for our employees.  This Code of Business Ethics and Conduct is intended to provide that compass.

 

The principles set forth in this Code of Business Ethics and Conduct represent a broad outline of the standards of business conduct which MySkin expects its employees to follow.  This Code cannot cover every situation which employees may confront in the day-to-day conduct of business.  Additionally, under certain circumstances local country law may establish requirements that differ from this Code. MySkin employees worldwide are expected to comply with all local country laws and MySkin business conduct policies in the area in which they are conducting business. In the final analysis, the Company must rely on the individual judgment and personal ethical standards of each of its employees and representatives to maintain our standard of honesty and integrity.  MySkin demands strict adherence to the letter and spirit of all laws and regulations applicable to the conduct of its business.  It also demands the highest standards of integrity and ethical behavior from its employees and representatives

 

It is essential that we all keep an eye out for possible infringements of MySkin’s business ethics—whether these infringements occur in dealings with the government or private sector, and whether they occur because of oversight or intention. If you have a question about how to apply this Code in a specific situation or about a possible violation, you should consult with the Human Resources Department or the Company’s Code of Conduct Officer.  Contact information for individuals in these departments is available in Appendix A.

 

Training and Education Programs

 

Training and education on this Code will be provided for all MySkin employees and members of our Board of Directors.  All employees and Board members will be required to sign an Acknowledgement Form indicating their receipt, understanding and acceptance of the terms of this Code.  Periodically, employees may be requested and required to acknowledge their understanding of this Code and any subsequent amendments. Participation in any mandatory training and acknowledgement of this Code is a condition of continued employment by MySkin.

 

Applicability

 

This Code applies to all directors, officers and employees of MySkin.  This Code also applies, as appropriate, to our consultants, agents and other representatives.

 

Waivers

 

Any waiver of any provision of this Code for a member of the Board of Directors or an executive officer must be approved by the Audit Committee of the Board of Directors and promptly disclosed as required by law or stock exchange regulation. Any waiver of any provision of this Code with respect to any other employee, agent or contractor must be approved by the Code of Conduct Officer.

 

Disciplinary Action

 

It is the responsibility of every employee to conduct the Company’s business in conformity with the law and the basic principles set forth in this Corporate Code.  Adherence to the principles set forth in this Code is essential to our objective of maintaining the confidence and support of our customers, business partners, governmental agencies, stockholders, and the communities in which we work and live.  Disciplinary action, as appropriate but up to and including termination, shall be taken for conduct that violates applicable laws or regulations or this Code.  Discipline may extend, as appropriate, to individuals responsible for the failure to prevent, detect or report a violation.

 

Reporting and Managing Suspected Violations

  

Reporting of Violations

 

Directors, officers and employees shall report any conduct which they believe in good faith to be a violation or apparent violation of this Code. These persons are encouraged to talk to supervisors, the Code of Conduct Officer, or Human Resources about observed illegal or unethical behavior and, when in doubt, about the best course of action in a particular situation. The Company prohibits retaliation for reports of misconduct by others made in good faith by employees. Directors, officers and employees are expected to cooperate in internal investigations of misconduct.

 

Directors, officers and employees are expected to act proactively, raising concerns about ethical issues, violations of this Code, or governmental rules, laws and regulations. All reports are taken seriously. Each allegation is investigated and, if substantiated, resolved through appropriate corrective action and / or discipline. If an individual making such allegations chooses to identify him or herself, he or she will be provided with feedback when the Code of Conduct Officer has completed his/her review.

 

If you feel uncomfortable reporting directly or you wish to remain anonymous, you may report the incident to the Code of Conduct Officer in writing anonymously.

 

No individual who in good faith reports suspected wrongdoing shall be subject to retaliation or discipline for having done so.  If a reporting individual is directly involved in a violation of this Code, the fact that he or she reported the violation will be given appropriate consideration in any resulting disciplinary action.  Failure to report wrongdoing of which an individual has knowledge may, by itself, be a basis for disciplinary action, up to and including termination for cause.

 

Responding to Violations

 

If a violation of any applicable law or regulation relating to the conduct of our business or of this Code is reported or detected, we will take all reasonable steps to respond appropriately to the violation and to prevent further similar violations.  When the Code of Conduct Officer or appropriate department manager receives information regarding a possible violation of any applicable law or regulation, he/she shall take appropriate steps to examine information and conduct the investigation necessary to determine whether an actual violation has occurred.  If a violation has occurred, the Code of Conduct Officer or the Board of Directors, as appropriate, will ensure that appropriate disciplinary action is taken and will consider necessary modifications to our compliance procedures to diminish the chances of recurring violations.  Disciplinary action may extend, as appropriate, up to and including discipline or termination of any employee that has participated in the violation.

 

Retaliation is Prohibited

 

The Company will not tolerate retaliation against any person who, in good faith, reports any suspected violation of this Code or participates in any investigation of the matter.  In the event that any employee believes that he/she has been subject to any such retaliation, that employee should immediately report that matter to Human Resources or the Code of Conduct Officer. Any such report of retaliation will also be immediately investigated, and appropriate remedial action will be taken.

 

Ensuring a Professional Working Environment

 

The following is a brief description of key issues relating to employees and our relationships while at work. The Company has detailed policies on these matters. Please refer to the MySkin Employee Handbook.

 

Equal Opportunity

 

MySkin encourages a creative, diverse and supportive work environment and bases all employment decisions on the principles of equal employment opportunity. MySkin managers are expected to make all employment decisions based on merit, experience and sound business reasons. MySkin policy prohibits discrimination on the basis of sex, race, religion, color, national origin or ancestry, disability, medical condition, marital or veteran status, age, sexual orientation or any other basis protected by law in every jurisdiction that we operate. It is the responsibility of all MySkin employees to conform to this policy.

 

This policy applies to all employees, applicants for employment, or others who may be present in the workplace. Any person who feels he or she has been discriminated against, or feels he or she has witnessed such action, is strongly encouraged to report the incident.

  

Harassment

 

MySkin strives to maintain a workplace free from harassment and where all employees are treated with respect.  MySkin’s policy prohibits harassment on the basis of sex, race, religion, color, national origin or ancestry, disability, medical condition, marital or veteran status, age, sexual orientation or any other basis protected by law in every jurisdiction that we operate.

 

Harassing behavior will not be tolerated. Harassment includes unwelcome conduct of a verbal or physical nature, when such conduct has the purpose or effect of creating an intimidating, hostile or offensive working environment as defined by law, has the purpose or effect of unreasonably interfering with an individual’s work performance, or adversely affects an individual’s employment opportunities.  Examples of improper harassment include:

 

Verbal harassment: epithets, derogatory comments, slurs or innuendos

 

Visual harassment: derogatory, offensive or graphic written, printed or electronic materials

 

Physical harassment: unwelcome touching or physical interference

 

Sexual harassment: unwanted sexual advances such as repeated requests for dates, leering, making sexual gestures or displaying sexually suggestive objects or pictures, requests for sexual favors, or other verbal or physical conduct of a sexual nature

 

Retaliation: negative employment action taken against an employee making a claim of harassment or assisting in an investigation

 

If you believe you have experienced or observed illegal harassment you should immediately contact your manager or Human Resources. Any manager who receives information about alleged harassment or discrimination is required to immediately report it to Human Resources.

 

The facts and circumstances of any claim will be fully investigated by Human Resources so that appropriate corrective action can be taken. Any employee who is determined by MySkin to have engaged in the harassment of another individual will be subject to severe discipline, up to and including termination.

 

Information Resources and Electronic Communications

 

MySkin’s information resources, including email, computers, phones and fax/copy machines, are MySkin property and intended for MySkin-related business use. While MySkin understands that employees may sometimes use such resources for personal interests, such use should be limited and consistent with the other policies outlined in this Code.  Personal messages via email and voice mail may be sent, but should be minimized and brief. You may not, however, send messages that may be perceived as obscene, harassing or threatening. Misuse of MySkin’s communications systems is considered misconduct and may result in disciplinary action up to and including termination.

 

MySkin reserves the right to examine, use, copy and/or delete user files or other information consistent with MySkin’s business interests and applicable law.  Because all email and voice mail stored in MySkin’s equipment is considered company property, MySkin may periodically check usage to correct network problems, confirm proper use and establish security. Therefore, you should not have any expectation of personal privacy for messages that you send, receive or store on these systems. Accessing the email or voice mail of any employee by another employee is strictly prohibited without their consent. If there is a legitimate business reason to access the email or voice mail of another employee, please present your request to your manager who will seek approval through senior management. Only the IT Department, or designees, may access the email or voicemail of another employee.

 

Environmental Compliance and Safety

 

MySkin is committed to environmental responsibility. The Company will comply with all federal, state and local regulations relating to the protection of the environment in the conduct of its business. It is the responsibility of all of our employees to ensure that their activities strictly adhere to applicable laws, regulations, and permit requirements, as well as to all Company policies and procedures on environmental protection. In addition, employees must report all circumstances in which regulated materials or wastes are improperly discharged, treated, or transported. Environmental misconduct, even if totally unintentional, carries severe penalties and could result in criminal prosecution of employees involved and the Company.

 

MySkin strives to provide a safe and healthy workplace for our employees and to conduct operations with minimal environmental impact. It is the responsibility of associates at each MySkin site to comply with all applicable local regulations. Each site must also comply with the corporate Environmental Health & Safety manual and its requirements.

 

Avoiding Conflicts of Interest

 

Employees are expected to make or participate in business decisions in the course of their employment with MySkin based on the best interests of the company as a whole, and not based on personal relationships or benefits.  We have no desire to infringe on the personal lives of our employees and respect the right of our employees to manage their own affairs.  However, conflicts of interest can compromise employees’ business ethics.

 

At MySkin, a conflict of interest is any activity that is inconsistent with or opposed to MySkin’s interests, or gives the appearance of impropriety.  A conflict of interest arises whenever an employee has an interest in any business or property or an obligation to any person that might affect the employee's fulfillment of responsibilities to MySkin.  An example of a conflict of interest is any opportunity for personal gain by an employee arising as a result of employment with MySkin but apart from the normal compensation provided by the Company, such as the receipt of a commission from a supplier for getting them business from MySkin.

 

Our employees must avoid situations or relationships where their personal interests could conflict, or reasonably appear to conflict, with the interests of the Company.  While an activity constituting an actual conflict of interest is never acceptable, you must avoid activity involving even the appearance of such a conflict. In addition, you may not circumvent this policy by using other people to indirectly do what you are prohibited from doing yourself.

 

While it is difficult to list all of the various ways in which a conflict can arise, they often involve one or more of the following issues:

 

Outside board memberships

 

Outside business interests

 

Outside investments

 

Outside employment

 

Business relationships with friends or relatives

 

Set forth below is specific guidance for some areas of potential conflict of interest that require special attention. These are merely examples. Ultimately, it is the responsibility of each individual to assess each situation. Employees are urged to discuss any potential conflicts of interest with their manager, Human Resources, or the Code of Conduct Officer.

 

Employees are expected to disclose to their supervisors any situations that may involve inappropriate or improper conflicts of interests affecting them personally or affecting other employees or those with whom we do business.

 

Certain activities may be authorized if approved in advance by an appropriate level of MySkin management. Prior to engaging in an activity that constitutes a potential conflict of interest, you must disclose the situation in writing and obtain written approval.  You should disclose the matter to your manager, who will review the matter with Human Resources, and if necessary the Code of Conduct Officer, and respond with MySkin’s approval or denial in writing.  Waivers of conflicts of interest involving MySkin’s directors and executive officers require the approval of the Audit Committee of the Board of Directors.

 

Outside Board Memberships

 

As a rule, it is a conflict of interest to serve as a director or as a member of an Advisory Board (AB) of any current or likely competitor of MySkin. Although you may serve as a director or AB member of a company supplier, customer or other business partner, our policy requires that you first obtain approval from Human Resources before accepting such a position.  Approval may be subject to conditions. Approval is likely to be denied where the MySkin employee either directly or indirectly has responsibility to affect or implement MySkin’s business relationship with the other company. Any compensation that you receive as a director or AB member should be commensurate to your responsibilities.  Generally, however, employees may not receive any form of compensation for service on a board of directors of a company if the service is at the request of the company or in connection with MySkin’s investment in that company, or the directorship is in connection with a MySkin relationship.

  

MySkin employees should recognize outside board memberships as an opportunity to provide expertise and to broaden their experience. However, they should never place you in a position where another company expects to use an employee’s board membership as a way to influence MySkin decisions or to obtain access to MySkin confidential information.

 

MySkin may periodically conduct an inquiry to determine the status of employee membership on outside boards and may rescind prior approvals in order to avoid a conflict of interest or for any reason deemed to be in the best interests of the Company.

 

Outside Business Interests and Corporate Opportunities

 

Employees should avoid any outside financial interests that might influence their decisions or actions on behalf of the Company.

 

MySkin employees will occasionally find themselves in a position to invest in MySkin partners or customers. MySkin policy prohibits personal investments in any MySkin customer, supplier or competitor without disclosure to the Code of Conduct Officer and approval by senior management (who may require approval from the Board of Directors). In cases where the investment may cause divided loyalty or the perception of conflict of interest, approval is likely to be denied.  (Note: this restriction does not apply to holdings of one percent or less of the stock or other securities of a corporation whose shares are publicly traded, provided that the investment is not so large financially either in absolute dollars or percentage of the individual’s total investment portfolio that it creates the appearance of a conflict of interest.) In addition, as a MySkin employee, you may not make investments based on your access to customer/supplier confidential information.

 

If an investment is made and/or approval is granted, and an employee subsequently finds himself in a potentially conflicted position, the employee should disclose his conflict of interest to all involved and recuse himself from any involvement with the relationship until divested of the investment.

 

Employees are also responsible for advancing the company’s legitimate interests when the opportunity arises.  Employees are prohibited from taking personal opportunities that are discovered through the use of corporate property, information or position, using corporate property, information or position for personal gain, or competing with MySkin.

 

Outside Employment and Activities

 

Although MySkin does not prohibit all outside employment, MySkin’s employees may not accept outside employment or consulting positions or engage in outside activities that would have a negative impact on the performance of their job, conflict with their obligations to MySkin, or in any way negatively affect the Company’s reputation.  Examples of prohibited employment include, but are not limited to:

 

Performing work for a customer or supplier unless prior written approval of the Code of Conduct Officer is obtained.

 

Performing work for any company that is a MySkin competitor.

 

Engaging in services or selling products that directly compete with MySkin services or products.

 

Engaging in activities that support or promote a competitor’s products or services.

 

Engaging in outside employment that uses your time at MySkin or the resources of the Company.

 

 MySkin employees may also be requested to speak at outside events. Speaking at events, when it is in MySkin’s best interests, is considered part of an employee’s normal job responsibilities. Because employees may spend work time preparing for, attending and delivering presentations approved by management and are therefore already compensated for their efforts, employees should not request or negotiate a fee from the organization sponsoring the speech.  An unsolicited fee may be accepted with written authorization from the Code of Conduct Officer, or alternatively, a fee can be requested and accepted provided it is accepted on MySkin’s behalf or donated to a non-profit charitable organization on MySkin’s behalf.

 

Receiving Gifts or Gratuities

 

Our employees and members of their families must not accept gifts of money under any circumstances, nor may they solicit non-monetary gifts, gratuities or any other personal benefits or favors from our vendors, customers or competitors.  Employees and members of their immediate families may accept unsolicited, non-monetary gratuities of the following nature from a business, firm or individual doing or seeking to do business with MySkin:

 

Gifts of nominal value, or gifts of an advertising or promotional nature (such as inexpensive novelties).

 

Reasonable business meals and entertainment.

 

The foregoing exceptions should be infrequent, consistent with accepted business practice and for the express purpose of furthering a business relationship.

 

In rare circumstances, gifts of more than nominal value may be accepted on behalf of MySkin (not an individual) with the approval your supervisor if protocol, courtesy, or other special circumstances require.  However, all such gifts must be turned over to Human Resources for appropriate disposition.

 

MySkin's personnel should courteously decline or return any kind of gift, favor, or offer of an excessive value which violates this Code and inform the offeror of our policy.

 

Giving Gifts or Gratuities

 

MySkin prohibits giving monetary or other compensation to people employed by MySkin customers or vendors. Advertising novelties, nominal gifts or entertainment may only be given to customers and vendors at MySkin’s expense if:

 

They are consistent with accepted business practice,

 

They are of nominal value and cannot be construed as a bribe or payoff, and

 

They do not violate any law, government regulation or generally accepted ethical standards, including state and federal procurement laws and regulations and the U.S. Foreign Corrupt Practices Act, discussed later in this Code.

 

In all cases, the exchange of gifts must be conducted so there is no appearance of impropriety and public disclosure would not embarrass MySkin.

 

Personal Financial Transactions and Loans

 

MySkin executive officers and other employees in management or supervisory positions should not engage in financial transactions with employees in the form of substantive loans, whether or not that employee is under the direct leadership of that supervisor. MySkin executive officers and other employees in management or supervisory positions are also prohibited from accepting loans from employees.

 

From time to time, certain departments may ask for voluntary contributions from employees for such events as weddings and birthdays.  While the Company does not discourage this type of activity, no employee should feel that he/she is compelled to contribute.  Should an employee feel that he/she is being coerced into participating in any such fund raising, he/she should immediately bring it to the attention of Human Resources or the Code of Conduct Officer or report it anonymously via the Ethics Hotline.

 

Loans to or guarantees of obligations of loans by MySkin are not permitted to any member of our Board of Directors or any MySkin executive officer.  If a transaction could in any way be construed as a loan or guarantee to one of these individuals, contact the Code of Conduct Officer for advice before proceeding.

  

Related Party Transactions

 

You should avoid conducting company business with a relative or significant other, or with a business in which a relative or significant other is associated in any significant role. If such a related party transaction is unavoidable, you must fully disclose the nature of the related party transaction to your manager. If the relationship is determined to be material by your manager, the question should be reviewed by the Code of Conduct Officer and approved in writing in advance of such related party transaction. All related party transactions dealing with parties related to an executive officer or member of our Board of Directors must be pre-approved by the Audit Committee of the Board of Directors. Any dealings with a related party must be conducted in such a way that no preferential treatment is given.

 

Working with Relatives

 

Supervisory relationships with family members or significant others present special workplace problems, including a conflict of interest, or at least the appearance of conflict. MySkin discourages the employment of relatives and significant others within the same department and prohibits the employment of such individuals in positions with a direct reporting relationship or where significant influence over personnel decisions resides in one employee.  If such a relationship exists or occurs, or if a question arises about whether a relationship is covered by this policy, the employee must report it in writing to his supervisor and Human Resources. Human Resources has the ultimate responsibility for determining the applicability of this policy.

 

Willful withholding of information regarding a prohibited relationship/reporting arrangement may be subject to corrective action, up to and including termination. If a prohibited relationship exists or develops between two employees, the employee in the senior position must bring it to the attention of his/her supervisor and Human Resources. Reassignment may be an option.

 

Other Possible Conflicts of Interest

 

Because other conflicts of interest may arise, it would be impractical to attempt to list all possible situations. If a proposed transaction or situation raises any questions or doubts in your mind, you should consult your manager.

 

Handling and Protecting Confidential Information

 

Proprietary/Confidential Information of MySkin

 

During your employment with MySkin, you will have access to various forms of proprietary and confidential information regarding MySkin. Any information concerning MySkin, its products or its business that is not generally available to others is confidential. Most of MySkin’s technology and much of our other know-how and experience are protected as trade secrets. Such trade secrets are valuable assets. The improper disclosure of proprietary or confidential information could significantly impact MySkin’s competitive position and waste valuable company assets. In addition to constituting a violation of MySkin policy, failure to observe this duty of confidentiality may additionally result in a conflict of interest or a violation of securities, antitrust, or employment laws and would be a violation of the agreement you signed when you joined MySkin to protect and hold confidential MySkin’s proprietary information.

 

Every employee must safeguard confidential information and prevent unauthorized disclosure and make sure that all authorized disclosures are made in accordance with MySkin’s policies on control of confidential information.  If you determine with your manager that disclosure of confidential information is necessary, you must then contact senior management to ensure that an appropriate written Nondisclosure Agreement (NDA) or other appropriate contract is signed prior to disclosure.  If not previously signed, you must have a MySkin standard NDA executed by the third party and an appropriate MySkin signatory (refer to MySkin’s signature policy). You may not sign a third party’s NDA or accept changes to MySkin’s standard NDAs without review and approval by the President or CEO. No financial information may be disclosed about MySkin without the prior approval of the Chief Financial Officer. In addition, all employees should ensure that all disclosures of MySkin proprietary and confidential information meet the requirements set forth in MySkin’s policies on control of confidential information regarding identification, classification, labeling, handling and destruction of confidential information.

 

The obligation to maintain the confidentiality of proprietary information continues even after your employment terminates. Likewise, MySkin requires new employees to honor any continuing confidentiality obligations that they may have with previous employers.

 

Disclosure of Inventions

 

Any work developed by employees or contractors within the scope of their employment with or services to MySkin belongs to MySkin.

 

Confidential Information of Employees

 

Selected human resource and personnel information must be kept strictly confidential and used only for the purpose for which it is intended. Managers and other employees with access to an employee’s personal information are responsible for limiting access to that information to only those individuals with a legitimate business need to know. Please contact Human Resources for more specific guidance or for questions.

 

Confidential Information of Third Parties

 

In addition to protecting our own trade secrets, it is our policy to respect the trade secrets of others. Confidential information may be received from other companies or individuals in the course of MySkin’s business. Confidential information should only be received under the auspices of a written agreement. Confidential information of a third party must be disclosed only to those MySkin employees who need access to such information to perform their jobs for MySkin and must not be disclosed to anyone outside of MySkin without specific authorization. Unauthorized disclosures, including theft and misappropriation, may result in a loss of the value of the trade secrets and may constitute a crime or amount to a breach of contract. Finally, confidential information of a third party must not be used or copied by any MySkin employee, except as permitted by the third-party owner.

 

Unsolicited third party confidential information should be refused. If inadvertently received by a MySkin employee, confidential information should be returned unopened to the third party or transferred to the Code of Conduct Officer for appropriate disposition. If a MySkin employee is furnished with information or becomes aware of information which may have been misappropriated from another party, the employee must immediately contact the Code of Conduct Officer.

 

Legal Requests for Disclosure

 

MySkin’s employees, agents and contractors must consult with the Code of Conduct Officer in connection with any legal inquiries, lawsuits and legally related investigations and requests for information, documents or interviews. All government requests for information, documents or investigative interviews must also be referred to the Code of Conduct Officer.

 

Insider Information

 

Until released to the public, material information concerning our business, including its plans (present and future), financial performance, financial schedules, successes or failures, is considered "inside" information and, therefore, confidential.  Inside information is "material" if it would likely affect a reasonable person's decision to buy, sell, or hold a company's securities.  It includes any information that could reasonably affect the price of a security.  Material non-public information may be positive or negative in nature.

 

All material non-public information concerning our business belongs to the Company, and all employees have a duty to exercise due care to maintain the integrity of such information.  Our policy precludes the unauthorized disclosure of such information or use of such information for personal benefit.  Any employee who uses such information for personal benefit or discloses it to others outside the Company violates his/her duty to our Company.

 

Once a public announcement has been made of material information, employees should wait until the second business day after the announcement before engaging in any transactions in our stock.

 

The prohibition on the use of inside information applies not only to knowledgeable Board members and officers, but also non-management employees and persons outside the Company (spouses, parents, friends, children, brokers, etc.) who have acquired the information directly or indirectly from us. The Board of Directors and officers are subject to more restrictions on the trading of stock. Any questions regarding insider trading should be directed to the Insider Trading Compliance Officer.

 

Third-Party Copyrighted Material

 

An appropriate license must be obtained prior to using any third-party copyrighted material. It is against company policy for any employee to copy, reproduce, scan, digitize, broadcast or modify third-party copyrighted material when preparing MySkin products or promotional materials, unless written permission has been obtained. It is also against company policy for MySkin employees to use the company’s facilities for the purpose of making or distributing unauthorized copies of third-party copyrighted materials for personal use or for use by others.

 

Communications with Media and Financial Analyst Community

 

MySkin has established specific policies regarding communicating information to the media and information analyst community. In particular, company policy prohibits any unauthorized communications with outside parties, including analysts and the media, concerning MySkin’s financial performance. If you are contacted by the media or financial analysts requesting this type of information, you should decline to comment and refer the inquiry to Corporate Communications/Investor Relations.

 

Document Retention and Destruction

 

MySkin maintains records management policies for the retention, protection and disposition of company records to fulfill legal requirements as well as to increase operational efficiency and reduce our internal and external storage costs. Proper control of records helps to minimize litigation cost, fines imposed on the company and potential criminal prosecution of employees. Retention and disposition of MySkin business records should be carried out in the normal course of business in accordance with our Document Retention Policy.  If you have any questions, you should first review the Document Retention Policy before contacting your manager.

 

Accurate Business Communications and Records

 

MySkin is committed to full, fair, accurate, timely and understandable disclosure in reports and documents filed with the Securities and Exchange Commission (SEC) and in other public communications.  To provide an accurate and auditable record of all financial transactions, MySkin’s books, records, and accounts must be maintained in conformity with generally accepted accounting principles and the standards established by applicable laws and regulations.

 

Maintaining accurate and reliable business records is not only required by law, it is also of critical importance to the Company’s decision-making process and to the proper discharge of its financial, legal, and reporting obligations.  All business records, expense accounts, vouchers, bills, payroll documents, service records, reports to government agencies and other reports, books, and records of MySkin must be prepared with care and honesty.  False or intentionally misleading entries in such reports are illegal and are not permitted.  Further, the Company specifically requires that:

 

All payments made on MySkin’s behalf must be fully and accurately described in the supporting documentation.

 

No payment may be approved or made with the intention or understanding that it is to be used for any purpose other than that described by the document supporting the payment.

 

No access to MySkin’s funds or assets will be allowed without proper authority.

 

No fund or account may be established for a purpose that is not accurately described on the Company's books and records.

 

The accounting requirements of each country in which MySkin conducts business must be complied with.

 

All expense reporting must be documented in an accurate manner and include all required signature approvals.

 

MySkin has established accounting procedures and internal control procedures to ensure that financial transactions are accurately recorded.  Strict compliance with these procedures is required at all times.

 

Our Relationship with Customers, Business Partners and Suppliers

 

Free and Fair Competition

 

The U.S. and most of the countries where we do business have laws designed to encourage and enforce free and fair competition.  For example, the U.S. has antitrust laws and the European Union has fair competition laws. MySkin is committed to obeying both the letter and spirit of these laws. We expect our employees to fully comply with all applicable antitrust and fair competition laws while engaged in activities on behalf of the Company.

 

            Competitors

 

Antitrust or fair competition laws generally prohibit any activities that may restrain free trade. Agreements, written or oral, with competitors to do the following activities are strictly prohibited:

 

Set prices and price-related terms and conditions (such as credit terms and discounts).

 

Divide or allocate markets, territories or customers.

 

Limit or restrict the development or production of products.

 

Refuse to deal with, or boycott, particular customers or suppliers.

 

Collusion among competitors is illegal, and the consequences of a violation are severe. As a rule, contracts with competitors should be limited and should always avoid subjects such as prices or other terms and conditions of sale, customers and suppliers. In some cases, legitimate joint ventures with competitors may permit exceptions to these rules, as may purchases from or sales to competitors on non-competitive products. However, senior management must review all such proposed ventures in advance. Participating with competitors in a trade association or in a standards creation body is acceptable when the association has been properly established, has a legitimate purpose and limits its activities to that purpose. You must avoid any discussion and must not enter into any agreements that may violate antitrust laws or give the perception of conflict of interest, even when brought up in a casual conversation.

 

Finally, employees, agents or contractors of MySkin may not knowingly make false or misleading statements regarding its competitors or the products of its competitors. You should sell on the basis of MySkin’s capabilities and benefits to the customer and follow these guidelines when discussing a competitor or its products:

 

           Avoid disparaging remarks about a MySkin competitor.

           Avoid commenting on negative publicity about a MySkin competitor.

           Avoid remarks based on rumor or other non-factual, unconfirmed data.

 

Distributors, Resellers and Customers

 

Antitrust and fair competition laws also often regulate a company’s relationships with its distributors, resellers and customers. The U.S. antitrust laws generally require that competing customers be treated fairly.  For example, selling products of like grade and quality to competing customers at different prices during the same time period is generally prohibited except that a price difference may be permissible if the lower price was given in good faith to meet a competitor's price or the difference between the prices can be cost-justified or justified by the receipt of a valuable right, such as a release of liability.  Likewise, promotional payments, services, and facilities (such as advertising displays) extended to one reseller must generally be made available on proportionately equal terms to all other resellers for the same product if those other customers are in competition with the recipient of the promotional assistance.

 

Antitrust and fair competitions laws generally address the following activities with distributors, resellers and/or customers:

 

·   Requiring resellers to maintain particular resale prices.
·   Discrimination based on prices, price-related terms and conditions, or promotional services provided to resellers where the effect of such discrimination would impact competition between the resellers (certain exceptions may apply where it is necessary to meet prices offered by the competition).

 

·   Agreeing with customers regarding the selection of other customers or the termination of customers.
·   Restricting distributors or resellers from carrying competing products.

 

·   Under certain circumstances, requiring a customer to purchase one product in order to be eligible to purchase another product.

 

Antitrust and fair competition laws around the world are complex and therefore MySkin sales and marketing employees must involve the senior management, and if necessary local counsel, before establishing pricing and contractual policies or deviating from existing policies.  All employees should have a basic knowledge of these laws and should involve the Code of Conduct Officer early on when questionable situations arise.

 

Supplier Selection and Relationships

 

When choosing a supplier, you should follow MySkin’s Supplier Selection and Evaluation Procedure .  MySkin is under no obligation to deal with all potential suppliers or award business to a supplier based solely on lowest price. However, employees should make decisions based on merits. You must avoid decisions that are based on, or give the impression of, unwarranted favoritism.  You should consider quality, experience, reputation, technology, service and cost. You should give each bid equal and fair consideration before you make your decision.

 

MySkin is an equal opportunity employer and encourages small and minority-owned businesses to become qualified and submit quotations to do business with MySkin. You should promote this practice in your job.

 

In general, use of MySkin’s name and logo by a supplier is not permitted. Any use of MySkin’s name as an endorsement is not permitted unless a written approval is obtained from Corporate Communications.

 

Exchanging Confidential Information

 

In the course of doing business with a supplier or customer, you may have to exchange company confidential information. Do not give or accept confidential information until both parties have signed a Nondisclosure Agreement. See “Handling and Protecting Confidential Information” above.

 

Interacting with Communities and Governments

 

Compliance with Export Control Laws

 

Although MySkin’s business does not generally involve the export of products, MySkin, like all US parties, may send materials or ship items abroad for various reasons. Compliance with U.S. export laws and the trade regulations of other countries is the unequivocal policy of MySkin and the responsibility of all MySkin employees.  No MySkin employee shall effect a transaction in violation of such laws. The United States has strict export controls against countries that the U.S. government considers unfriendly or as supporting terrorism. These regulations are complex and apply both to exports from the United States and to exports of items from other countries when those items contain U.S. origin components or technology. Since these regulations are complicated and may periodically change, advice on specific transactions should be obtained from senior management who may consult legal counsel.

 

Customs Compliance for International Shipping

 

MySkin’s policy is to comply fully with customs laws, regulations and policies in all countries where MySkin does business. Accurate customs information on shipping documents is required for all international shipments. Employees should not initiate international shipping documents outside approved shipping systems or the shipping department.

 

Anti-Corruption Laws and Bribery

 

The Foreign Corrupt Practices Act (FCPA) and other laws prohibit a corporation and its employees and agents from directly or indirectly paying, or promising or offering to pay any money, gift or anything of value to any foreign governmental employee/official, foreign political party (or official thereof) or any candidate for foreign political office with the purpose of unlawfully influencing such person to make a decision that would favor MySkin business.  The FCPA applies to MySkin, and it is company policy that MySkin employees worldwide comply with the FCPA provisions. In addition to compliance with the FCPA, it is MySkin policy that no improper or unethical payments to government officials worldwide shall be made.

 

The above prohibition also applies where MySkin has knowledge of any such payment made by an agent, partner, reseller or third party on MySkin’s behalf.  To ensure compliance with the FCPA by all agents who act on behalf of MySkin with government officials, you must review and follow any procedures established by MySkin for hiring agents and representatives before hiring any third party that will act or appear to act on MySkin’s behalf in the promotion of business to government agencies or government companies outside the United States.

 

Note that the FCPA and other anti-corruption laws provide exceptions for certain minor payments permissible under local law for the purpose of facilitating routine, non-discretionary acts or services, such as payments for processing governmental papers, telephone service or obtaining adequate police protection. While Company policy does not prohibit such payments if allowed by local law, in cases where facilitating payments may be involved, employees must seek advice and approval in advance from their immediate supervisor and the Code of Conduct Officer.  Any such facilitating payments must be properly accounted for in the Company's records.

 

In addition to the anti-bribery provisions, the FCPA has separate accounting standards that require that proper controls be in place to ensure the lawful use of MySkin assets. Pursuant to the FCPA accounting standards, no payment shall be made, or other transaction entered into, on behalf of MySkin without proper management approval. Likewise, MySkin funds, assets or services cannot be used for any purpose that is unlawful under the laws of the United States, any state thereof, or any jurisdiction (foreign or domestic). Complete and accurate records should be maintained of all transactions, including transactions that relate in any way, directly or indirectly, to a foreign government official. Additionally, no undisclosed or unrecorded funds or assets of MySkin shall be established for any purpose, and no false or artificial entries shall be made in any MySkin books or records for any reason. All employees must comply strictly with the accounting standards of the FCPA.

 

Finally, because it is illegal in almost all jurisdictions for a government official to receive personal payments as a result of their official duties, no contract or other agreement may be concluded between MySkin, or any affiliate of MySkin, and any business in which a government official is known to have an interest without the prior approval of the Code of Conduct Officer.

 

Any employee having information or knowledge of any unrecorded fund or asset transfer, or any violation of the FCPA, should immediately report that matter to the Code of Conduct Officer.

 

Relationships with Government Personnel

 

We require our employees, officers, and directors, as well as consultants, agents and other representatives adhere to the highest ethical standards of conduct when dealing with government personnel.  The Company's dealings with federal, state, and local government officials must not only comply with the letter and spirit of all applicable laws and regulations, they must be free from even the appearance of impropriety.  To ensure compliance with such laws, the Code of Conduct Officer must be contacted prior to any interactions with government officials that are not routine – a routine procedure or law applies to all companies or persons the same way under the law.

 

Gratuities and Gifts

 

Almost all governmental jurisdictions impose some kind of limit on the value of gifts that officials may receive and require disclosure of gifts above a certain threshold. Gifts typically include meals, beverages, travel and related expenses, honoraria, and tickets to entertainment or sporting events. The laws on gifts vary considerably depending upon the jurisdiction of the official who is the recipient of the gift. In any case, a gift or promise of anything of value to a government official or employee in the hope of obtaining favorable action is prohibited by company policy and by the laws of most jurisdictions. In addition, federal agencies and organizations have strict regulations which generally forbid federal officials and employees from asking for or accepting gifts from any person or company that is regulated by or does business with their agency or that are given for or because of their status as a federal official or employee.

 

MySkin's employees, officers, and directors, as well as its consultants, lobbyists, agents, and other representatives must obey the law and respect the policies of federal government agencies and organizations with which MySkin does business.  As a general rule, giving anything of value to a federal official or employee is strictly prohibited.  In those limited situations where federal law and the particular federal agency's or organization's rules permit its employees or officials to receive certain types of gifts, no gift may be offered or given without prior approval of an executive officer of the Company.  The Company will not tolerate the giving of bribes, illegal gratuities, or improper gifts in any form to government personnel.  Any employee who becomes aware of any such conduct should immediately report it to the Code of Conduct Officer.

 

If any MySkin employee is asked by a government official or employee for a gift of any kind (including gifts of services), he/she she must courteously decline and immediately report the request to his/her supervisor or the Code of Conduct Officer.

 

Political Activities and Campaign Contributions

 

MySkin may not use its funds or assets for political contributions worldwide without the prior authorization by the Board of Directors, who will consult with outside counsel and local counsel to clear any proposed political contributions using MySkin assets. No MySkin funds or assets may be contributed to any candidate for federal office or their committees, or to political action committees (PAC) supporting or opposing federal candidates.

 

The following are examples of political activities that are prohibited in connection with federal election:

 

             Political contributions by an employee that are reimbursed by the Company through expense accounts or in other ways.

             Contributions in kind, such as lending employees to political parties, using Company facilities or Company-provided transportation to support political campaigns, or performing services for political committees, campaigns, or candidates on Company time.

             Indirect contributions by the Company through suppliers, customers, or agents.

 

MySkin offices must obtain approval prior to the visits of government officials or political candidates to their locations to ensure that such visits do not constitute political contributions. Employees who have used MySkin funds to make campaign contributions without obtaining the required approval in advance may be required to reimburse MySkin for such expenses and will be subject to appropriate disciplinary action.

 

This policy is not intended to discourage or prevent MySkin employees from engaging in political activities on their own time and at their own expense, or from making personal contributions to political candidates, political parties or PACs, or from expressing their personal views on legislative or political matters.  However, it is improper for an employee to use his/her position within the Company to coerce political contributions from other employees for the purpose of supporting a political candidate, political party or PAC.  Employees may make direct contributions of their own money, but such contributions are not reimbursable by MySkin.

 

Special Obligations For Employees With Financial Reporting Responsibilities

 

Ø             Act with honesty and integrity, avoiding actual or apparent conflicts of interest in personal and professional relationships.

Ø             Provide information that is accurate, complete, objective, relevant, timely and understandable to ensure full, fair, accurate, timely and understandable disclosure in reports and documents that MySkin files with, or submits to, governmental agencies and in other public communications.

Ø             Comply with rules and regulations of federal, state, provincial and local governments, and other appropriate private and public regulatory agencies.

Ø             Act in good faith, responsibly, with due care, competence and diligence, without misrepresenting material facts or allowing one’s independent judgment to be subordinated.

Ø             Respect the confidentiality of information acquired in the course of one’s work except when authorized or otherwise legally obligated to disclose. Confidential information acquired in the course of one’s work will not be used for personal advantage.

Ø             Maintain skills and knowledge of one’s profession and important and relevant to MySkin’s needs and share these with others as appropriate.

Ø             Proactively promote and be an example of ethical behavior in one’s staff, one’s peers and throughout the company.

Ø             Achieve responsible use of and control over all assets and resources employed or entrusted to him/her.

Ø             Promptly report to the Chairman of the Audit Committee any conduct that the individual believes to be a violation of law or business ethics or of any provision of this Financial Officer Code of Ethics, including any transaction or relationship that reasonably could be expected to give rise to such a violation.

 

 

 

 

 

 

Summary

 

MySkin expects employees at all levels to observe and respect the laws and regulations and standards of business conduct that govern the conduct of our business. The Company is committed to designing, applying, and enforcing a corporate compliance program that will assist its employees in achieving this goal.

 

All employees are expected to read and understand this Code, uphold these standards in day-to-day activities, comply with all applicable policies and procedures, and ensure that all contractors, representatives and agents are aware of, understand and adhere to these standards.

 

Remember that the provisions of this Code are fully binding on you, without exception, as long as you are a MySkin employee. This Code is general in nature. There may be additional policies, procedures and rules that relate to employees in general or relate to your site or function and which you are expected to abide by.

 

Nothing in this Code or other related communications creates or implies an employment contract or term of employment.

 

Because we continuously review and update our policies and procedures, this Code is subject to modification. This Code supersedes all other such codes, policies, instructions, practices, rules and written or verbal representations to the extent they are inconsistent.

 

Please sign the acknowledgement form at the end of this Code and return the form to Human Resources indicating that you have received, read, understand and agree to comply with this Code. The signed acknowledgement will be located in your personnel file. Each year you may be asked to sign a new form and attend continued training.

 

 

Exhibit- 23.1

 

 

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

We hereby consent to the use in this Registration Statement on Form 10 of our report dated January 13, 2012 relating to the financial statements of MySkin, Inc., which appears in such Registration Statement.  We also consent to the references to us under the headings “Experts” in such Registration Statement.

 

 

 

/s/ANTON & CHIA LLP

Anton & Chia LLP

 

Newport Beach, California

 

 

January 13, 2012