UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
  Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
 
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 
Date of Report (Date of earliest event reported): August 23, 2012

PRISTINE SOLUTIONS, INC.
(Exact name of Company as specified in its charter)
 
Nevada
333-166487
N/A
(State or other jurisdiction
(Commission File Number)
(IRS Employer
of Incorporation)
 
Identification Number)
 
9595 Wilshire Blvd., Suite 900
Beverly Hills, California 90212
(Address of principal executive offices)
 
Telephone Number 786-514-6512
(Registrant’s Facsimile Number)
 
     

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Company under any of the following provisions:
 
o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) 

o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) 

o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 
 
 
 

FORWARD LOOKING STATEMENTS

The following discussion, in addition to the other information contained in this Current Report, should be considered carefully in evaluating  the Company’s prospects. This Report (including without limitation the following factors that may affect operating results) contains forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933, as amended ("Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act") regarding the Company and its business, financial condition, results of operations and prospects. Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates" and similar expressions or variations of such words are intended to identify forward-looking statements, but are not the exclusive means of identifying forward-looking statements in this Report. Additionally, statements concerning future matters such as revenue projections, projected profitability, growth strategies, possible changes in legislation and other statements regarding matters that are not historical are forward-looking statements.

Forward-looking statements in this Report reflect the good faith judgment of its management and the statements are based on facts and factors as the Company currently knows them. Forward-looking statements are subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, but are not limited to, those discussed in this Report. Readers are urged not to place undue reliance on these forward-looking statements which speak only as of the date of this Report. The Company undertakes no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this Report.

As used in this Current Report and unless otherwise indicated, the terms “we”, “us”, “our” and the “Company” refer to Pristine Solutions, Inc. and  its wholly-owned subsidiaries.

 
 
 

ITEM 1.01                      ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

On August 23, 2012, the Company and its controlling stockholders (the “Controlling Stockholders”) entered into a Share Exchange Agreement (the “Share Exchange”) with Eaton Scientific Systems, Ltd., a Nevada corporation (“ESSL”) and the shareholders of ESSL (the “ESSL Shareholders”), whereby the Company acquired 25,000,000 shares of common stock (100%) of ESSL (the “ESSL Stock”) from the ESSL Shareholders.  In exchange for the ESSL Stock, the Company issued 25,000,000 shares of its common stock to the ESSL Shareholders.  

The foregoing summary description of the terms of the Share Exchange may not contain all information that is of interest to the reader. For further information regarding specific terms and conditions of the Share Exchange, reference is made to such agreement filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on August 24, 2012, and is incorporated herein by this reference.

The Company’s Chief Executive Officer, Mr. Michael J. Borkowski, and the Company’s controlling shareholder and former President, Ms. Christine Buchanan-McKenzie, entered into a Common Stock Purchase Agreement, whereby Mr. Borkowski would purchase one hundred (100%) percent of the Company’s common shares owned by Mrs. Buchanan-McKenzie, or 240,000,000 shares, at par value $.0001, representing approximately 54.1% of the Company’s total issued and outstanding shares.  The Common Stock Purchase Agreement, and subsequent transaction closing, was completed on October 22, 2012.  On October 23, 2012, the Common Stock Purchase Agreement was finalized, and a Change in Control of the Registrant took place.
 
         In conjunction with the 25,000,000 Share Exchange and sale of 240,000,000 the total shares held by ESSL Shareholders is 265,000,000 or approximately 59.8% of the issued and outstanding common stock of the Company as of October 30, 2012.  In addition certain ESSL shareholders owning a total of 135,779,375 shares of the Company’s common stock representing approximately 30.64% of the issued and outstanding common stock of the Company entered into three (3) separate twenty-four (24) month Lock-Up Agreements, which are attached herewith as Exhibits 10.9 through 10.11.
 
On September 12, 2012, the Company issued a Convertible Promissory Note (“Convertible Note”) in the amount of $500,000 to a related party.  The Convertible Note is interest free, is payable within 2 years, and contains a conversion feature which allows for the principal balance to be converted into common stock of the Company. The Convertible Note is attached herewith as Exhibit 99.4.


ITEM 2.01                      COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS

The information provided in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.01.

ITEM 3.02                      UNREGISTERED SHARES OF EQUITY SECURITIES

The information provided in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.02.

Exemption From Registration . The shares of Common Stock referenced herein were issued in reliance upon an exemption from registration afforded either under Section 4(2) of the Securities Act for transactions by an issuer not involving a public offering, or Regulation D promulgated thereunder, or Regulation S for offers and sales of securities outside the U.S.

ITEM 5.01                      CHANGES IN CONTROL OF REGISTRANT

The information provided in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 5.01.

ITEM 5.02
DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS

On August 22, 2012, Christine Buchanan-McKenzie resigned from all positions with the Company, including, but not limited to that of President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer, and a member of the Board of Directors.  The resignation did not involve any disagreement with the Company on any matter relating to the Company’s operations, policies or practices. On the same day, Mr. Michael Borkowski   was appointed as President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer, and a member of the Board of Directors of the Company.

The biography for the newly appointed directors and officers are set forth below under the section entitled, “DIRECTORS AND EXECUTIVE OFFICERS”.

ITEM 8.01                      OTHER EVENTS

The information provided in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 8.01. As a result of the Share Exchange, (i) Eaton Scientific Systems, Ltd. became a wholly owned operating subsidiary of the Company ; and (ii) the business of Eaton Scientific Systems, Ltd., which is more fully described below, became the Company’s principal operations.

Prior to the closing of the Share Exchange, there were no outstanding options or warrants to purchase shares of capital stock of the Company, and the Company had not adopted an equity incentive plan or otherwise reserved shares for issuance as incentive awards to officers, directors, employees and other qualified persons in the future.

As of the date of the Share Exchange, there were no material relationships between the Company and ESSL, or between the Company and any of ESSL’s respective affiliates, directors, or officers, or any associates of its respective officers or directors, other than with respect to the Share Exchange.

 
 
 
Corporate History

The Company was incorporated on December 8, 2009 under the laws of the State of Nevada. The Company’s wholly owned subsidiary, Pristine Solutions Limited, was incorporated under the laws of Jamaica. The Company’s original business plan focused on developing a network of sales points for the sale and service of tankless water heaters in Jamaica, through Pristine Solutions Limited. The Company’s aim was to become the first tankless water heater company specializing in tankless-only products to enter the Jamaican market, and the only company in the Jamaican market offering solar-powered tankless water heater products.  As part of its plan,   on December 30, 2009, the Company entered into a distribution agreement with Zhongshan Guangsheng Industry Co., Ltd., of China (“Zhongshan”), the manufacturer of the tankless water heaters.   Zhongshan currently manufactures the tankless water heaters under the brand Gleamous Electric Appliances. 

On August 23, 2012, the Company and its Controlling Stockholders entered into a Share Exchange with ESSL and the ESSL Shareholders, whereby the Company acquired 25,000,000 shares of common stock (100%) of ESSL from the ESSL Shareholders.  In exchange for the ESSL Stock, the Company issued 25,000,000 shares of its common stock to the ESSL Shareholders.  

As a result of the Share Exchange, (i) ESSL became the Company’s wholly owned subsidiary; and (ii) the Company intends to continue the ESSL operations as its primary business.

   Please note that the information provided below, unless otherwise noted,   relates to the combined enterprises of ESSL and the Company after the Share Exchange.

Business Description

Eaton Scientific Systems, Ltd., a Nevada corporation, was formed in January 31, 2006. The Company is headquartered in Beverly Hills, California, and is engaged in biomedical product development in the area of women’s health.  The Company’s mission is to provide solutions to women’s health issues surrounding pre-menopausal, peri-menopausal and post-menopausal conditions. The Company intends to develop non-hormonal treatments, and address the specific need for a non-hormonal solution to “Hot-Flushes”, a common symptom experienced by many pre-menopausal and post-menopausal women.

The Company is in the process of developing a novel treatment for climacteric (menopausal) symptoms, has filed a Provisional Patent Application, USPTO No. 60/719,756, and a Patent Pending Application USPTO No. 11/523,975, which covers a novel indication for an existing FDA cleared prescription drug, Tropine 3 (“Homatropine”). Tropine 3 is an orally ingested prescription product containing Homatropine, which is intended to reduce climacteric symptoms and improve quality of life in menopausal women who are experiencing “hot flashes” and “night sweats”, but who are not receiving hormone replacement therapy (“HRT”).  Homatropine (Equipin, Isopto Homatropine) is an anticholinergic medication that inhibits muscarinic acetylcholine receptors and thus the parasympathetic nervous system.

The Company has also developed a Clinical Trial Protocol for a Phase I/II, Prospective, Randomized, Double Blind, Placebo-Controlled, Dose Escalation, Open Label Study to Test the Efficacy and Safety of Homatropine Methylbromide Oral Suspension on Selected Climacteric Symptoms and Quality of Life in Menopausal Women Not Receiving HRT   for its new drug indication and will execute the Trial with the goal of generating data that supports its claims. The Company has retained a team of medical professionals and is preparing the Protocol in order to begin a Clinical Trial (the “Study”) for FDA approval of Tropine 3 containing Homatropine in oral suspension.  The purpose of the Study is to look at the effectiveness and safety of the drug Homatropine, to see if it will provide relief of hot flashes, night sweats and other menopause symptoms, and improve the quality of life in women. The Company’s goal is to complete the study, barring any unforeseen delays, by the end of the 2 nd calendar quarter of 2013.  Provided that the data supports the Company’s Claims it has outlined its Patent Application, it will present the information to the FDA for review.  The Company anticipates that the FDA will request a Phase III Trial to be conducted by the Company prior to a review for consideration of Tropine 3 receiving an FDA Approval.

The Company has recently finished its first Clinical Trial Protocol and is prepared to conduct the Study. The purpose of the Study will be to demonstrate that Tropine 3, its novel new indication of Homatropine, and existing FDA Approved drug currently used to treat heavy coughing, has the ability to provide relief to pre-menopausal, menopausal and post-menopausal women suffering from hot flashes. The Company’s technical mission is to prove its central thesis that Homatropine in an oral suspension formula can reduce hot flashes in pre-menopausal, menopausal and post-menopausal women through multiple clinical trial validations.

The Market

Pre-Menopausal, Menopausal & Post-Menopausal

The climacteric (also known as menopause) is defined as the syndrome of endocrine (hormonal), somatic (bodily) and psychological changes occurring at the termination of the reproductive period in the female. According to the Greene Climacteric scale,  there are 21 common symptoms associated with a woman’s climacteric stage, namely heart beating quickly or strongly, feeling tense or nervous, difficulty in sleeping, excitability, attacks of panic, difficulty in concentrating, feeling tired or lacking in energy, loss of interest in most things, feeling unhappy or depressed, crying spells, irritability, feeling dizzy or faint, pressure or tightness in head or body, parts of the body feel numb or tingling, headaches, muscle and joint pains, loss of feeling in hands and feet, breathing difficulties, hot flushes, sweating at night, and loss of interest in sex. Other symptoms commonly experienced in climacteric women include urinary frequency and urgency, palpitations, and anxiety.
 
 
 

About 50 million women in the United States alone, experience hot flashes. Eighty-five percent of the women in the United States experience hot flashes of some kind as they approach menopause and for the first year or two after their periods stop. Between 20% and 50% of women continue to have them for many more years. As time goes on, the intensity decreases.  The women’s health market as it pertains to menopause is approximately 26.8 million women and is expected to grow to over 50 million as the baby boomers start to enter this phase of their life.  Though there are many issues affecting women in the menopausal age the biggest factors focus on hormonal replacement therapies and the treatments association to breast cancer.

Menopause is a normal part of life, just like puberty. It is the time of a woman’s last period, but symptoms can begin several years earlier. Some symptoms of menopause can last for months or years after. Changing levels of estrogen and progesterone, which are two female hormones made in a women’s ovaries, might lead to these symptoms. This time of change is known as the menopausal transition, but many women and their doctors also call it peri-menopause. It can begin several years before a women’s last menstrual period. Peri-menopause lasts for 1 year after a women’s last period. After a full year without a period, women can say they have been "through menopause." Post-menopause follows menopause and lasts the rest of their life.

The average age of a woman having her last period, menopause, is 51. But, some women have their last period in their forties, and some have it later in their fifties. Smoking can lead to early menopause. So can some types of operations. For example, surgery to remove a uterus (called a hysterectomy) will make a woman’s periods stop, and that is menopause. A woman might not have menopause symptoms like hot flashes immediately, however, because, if her ovaries are untouched, they still make hormones. In time, when the ovaries start to make less estrogen, menopause symptoms could start. But, sometimes both ovaries are removed (called an oophorectomy), usually along with her uterus. That is menopause too. In this case, menopause symptoms can start right away; no matter what age a woman is, because her body has lost its main supply of estrogen.
 
According to the recent study “Women’s Health Therapeutics Market to 2017” (“GBI Study”) by GBI Research issued in January 1, 2012, there continues to be a “high unmet need will drive uptake of novel drugs”. GBI Research finds that the women’s health therapeutics market will grow rapidly, largely due to the introduction of new therapies and the increased awareness among patients and physicians in two of the largest segments within women’s health disorders, the menopause and osteoporosis areas. According to the GBI Research Study, Novel non-hormonal therapeutics will become more popular during the forecast period. The GBI Study further overall women’s health therapeutics market is driven by postmenopausal osteoporosis and menopause.

According to the GBI Study the women’s health therapeutics market research and development pipeline is only moderately strong, with the majority of first-in-class drugs in late stages of development. These drugs are expected to drive market revenues and it is expected that, if they are approved and are shown to have better safety profiles, patients will comply with novel therapies. In particular, non-hormones are set to take over the conventional hormone therapeutics market.

In 2010, the global women’s health therapeutics market was estimated to be worth $14,530,000, after a Compound Annual Growth Rate (“CAGR”) of 3.5% between 2002 and 2010. By 2017, the market is estimated to reach $24.6 billion, indicating a CAGR of 7.9% between 2010 and 2017. Owing to several factors such as the publication of the Women’s Health Initiative (“WHI”) study results, and a lack of effective therapeutics, the women’s health therapeutics market grew only moderately between 2002 and 2010. However, the launch of novel therapeutics in the near future is expected to satisfy the unmet need in the market. This will have a pronounced effect on positive growth in the menopause therapeutics market.

The Company believes that the menopausal market has considerable unmet need, as the fear of diseases that have, in certain studies (“2002 Women’s Health Initiative”) been linked to hormonal therapeutics. Hormones have been shown to be associated with significant safety issues such as risks of breast cancer and cardiovascular disease. Hence, the use of hormones has declined and women are worried about resuming hormonal therapy for the treatment of the menopause/osteoporosis. There is an opportunity for pharmaceutical companies to develop drugs with greater safety profiles and more competitive prices.

Menopause Advertising

Menopausal advertising is currently a real challenge, and it appears that, unless real change occurs in the public perception of menopause, it will continue to be a challenge.  Unfortunately, advertisers consistently project negative images of menopause in order to promote their products since fear of the lack of sex also sells and in doing so they perpetuate the myth.  The overwhelming message is that unless women actually do something about this dreadful impending thing called menopause, they will not be “slim, sane and sexy”.  The media plays into that message as well.

 
 
 
The underlying message communicated by advertisers is that women must project an image that equates to reproductive viability in order to be of any true value to society. If women cannot attract a mate in order to reproduce they are of no true use except possibly as grandmothers. Menopause by definition means they cannot reproduce.

Hormonal Replacement Therapy

The U.S. Preventive Services Task Force (“USPSTF”), an independent group of health experts convened at the request of Congress, first hinted that HRT may be too risky for long-term use in 2005. At that time, after reviewing the available data, the task force warned women against relying on HRT to prevent chronic conditions like heart disease and dementia. Some earlier studies had suggested that the supplemental hormones that women take to relieve night sweats and hot flashes associated with menopause could also protect the heart and brain from aging-related decline. Use of hormone therapy declined, however, after a 2002 WHI study found little difference in rates of heart disease among women who used HRT and those who did not. Instead, the study reported HRT might increase the risks of heart disease and breast cancer.

In the past, HRT was widely recommended for the treatment of menopause and menopausal symptoms, as well as for the prevention of osteoporosis and heart disease. The large study, conducted in 2002 by WHI, shed new light on how HRT is viewed.  HRT is used to supplement the body with either estrogen alone or estrogen and progesterone in combination during and after menopause. Estrogen and progesterone are hormones that are produced by a woman's ovaries. As menopause nears, the ovaries reduce most of their production of these hormones. Lowered or fluctuating estrogen levels may cause menopause symptoms such as hot flashes, and medical conditions such as osteoporosis. When the ovaries no longer produce adequate amounts of estrogen and progesterone (as in menopause), HRT can be given to supplement the body with adequate levels.

Estrogen and progesterone together thicken the lining of the uterus, preparing it for the possible implantation of a fertilized egg. Estrogen also influences how the body uses calcium, an important mineral in the building of bones, and helps maintain healthy levels of cholesterol in the blood. Estrogen also keeps the vagina healthy. Hormone therapy helps to replenish the estrogen, relieving some of the symptoms of menopause when they are moderate to severe. They are no longer recommended, however, to prevent chronic diseases.

Progesterone is used along with estrogen in women who still have their uterus. In these women, if taken without progesterone, estrogen increases the risk for cancer of the endometrium (the lining of the uterus). During a woman's reproductive years, endometrial cells are shed during menstruation. When the endometrium is no longer shed, estrogen can cause an overgrowth of cells in the uterus, a condition that can lead to cancer.

Progesterone reduces the risk of endometrial cancer by making the endometrium shed each month. As a result, women who take progesterone may have monthly bleeding. Monthly bleeding can be lessened and, in some cases, eliminated by taking progesterone and estrogen together continuously. Women who have had a hysterectomy (removal of the uterus through surgery) usually do not need to take progesterone.

There are two main types of hormone replacement therapy :

Estrogen Therapy:   Estrogen is taken alone. Doctors most often prescribe a low dose of estrogen to be taken as a pill or patch every day. Estrogen may also be prescribed as a cream. The lowest dose of estrogen needed to relieve menopause symptoms is recommended.  Estrogen is prescribed to relieve:
 
   §  
Hot flashes
§  
Vaginal dryness that can result in painful intercourse
§  
Other problematic symptoms of menopause, such as night sweats and dry, itchy skin

Progesterone/Progestin-Estrogen Hormone Therapy:   Also called combination therapy, this form of HRT combines doses of estrogen and progesterone (progestin is a synthetic form of progesterone). Estrogen and a lower dose of progesterone also may be given continuously to prevent the regular, monthly bleeding that can occur when combination HRT is used. The current recommendation is to take the lowest dose of hormone therapy for the shortest time possible. Progestins do cause side effects, including irregular bleeding and fluid retention. Progestins, such as Provera, are a synthetic version of progesterone, which is the chemical equivalent to the progesterone produced by the body. Like all prescription medications, HRT should be re-evaluated each year.

Hormone replacement therapy is not usually recommended for women who have:

§  
Active or past breast cancer
§  
Recurrent or active endometrial cancer
§  
Abnormal vaginal bleeding
§  
Recurrent or active blood clots
§  
History of stroke
§  
Liver disease
§  
Known or suspected pregnancy

 
 
 
Side Effects of Hormone Replacement Therapy

There are no prescription medications that are as effective as estrogen for the treatment of hot flushes, but many have a positive impact for some women. Unfortunately, all have side effects that balance their clinical use.

Like almost all medications, hormone replacement therapy has side effects. The most common side effects are:

§  
Monthly bleeding
§  
Irregular spotting
§  
Breast tenderness

Less common side effects of HRT include:

§  
Blood clots and stroke (rare, but the most serious risk)
§  
Fluid retention
§  
Headaches (including migraine)
§  
Dizziness
§  
Skin discoloration (brown or black patches)
§  
Increased breast density (making mammogram evaluation more difficult)
§  
Skin irritation under estrogen patch

The 2002 WHI study was the largest placebo controlled study of hormone replacement therapy to date, and showed an increase in thromboembolism (blood clots), stroke, and breast cancer in the estrogen-progestin group, leaving many women with the uncomfortable feeling that they were compromising their long-term health by using hormone therapy.

         The most recent analysis conducted by the US Preventive Services Task Force (USPSTF), confirmed that the risks of HRT outweigh its potential benefits, based on a review of 51 studies published since 2002 through the Annals of Internal Medicine online. Overall, the data showed that HRT, which combines estrogen and progestin, is linked to increased risk of stroke, blood clots, gallbladder disease, urinary incontinence, and dementia and breast cancer. The risks remained significant, even among women who have had a hysterectomy, and who only need to take estrogen, not progestin, to protect endometrial tissue.  The USPSTF found that the only benefit of HRT, outside of relieving menopause symptoms, was a lower risk of bone fractures, and concluded that the risks far outweighed this improvement.  For women at average-risk of heart disease or breast cancer, which make up the majority of those who might take HRT during menopause, peri-menopause and post menopause, the Task Force recommended against long-term use of the hormones. Accordingly, there is a need for effective treatment regimens for relieving symptoms of menopause. The Company’s present invention meets this long-felt need.
 
Hormone Replacement Therapy Competition
 
The following table represents the current market Brand leaders in the prescription market for Hormone Replacement Therapy separated by Estrogen, Progestin & combinations of the two and delivery methods.

Estrogen Types:
Brand Names:
Pills
Cenestin, Estrinyl, Estrace, Menest, Ogen, Premarin
Cream
Estrace, Ogen, Ortho, Dienestrol, Premarin
Vaginal ring
Estring, Femring
Vaginal tablet
Vagifem
Patch
Alora, Climara, Esclim, Esraderm, Vivelle-Dot

Progestin Types:
Brand Names:
Pills/Capsules
Amen, Aygestin, Curretab, Cycrin, Megace, Prometrium, Provera
Vaginal Gel
Prochieve progesterone gel 4%, 8%
 
Combination Types:
Brand Names:
Pills
Activella, FemHRT, Ortho-Prefast, Premphase, Prempro, low-dose Prempro
Patch
CombiPatch, Climara-Pro

Alternatives, Natural Treatment, and Competition

 HRT was long the standard treatment for menopause, however, since it is now known that traditional HRT using synthetic estrogen and progestins increases the risk of breast cancer and heart disease, many women and healthcare providers are no longer routinely asking for or prescribing traditional estrogen replacement therapy, but rather are seeking alternative treatments,

 
 
 
The alternatives to hormone replacement therapy range between prescription drugs that consist of slightly different hormone formulations, nutritional supplements made of herbs and vitamins, soy products said to be natural sources of estrogen, lifestyle changes, and even what might be termed menopause accessories, such as one company's ''cooling comfort towelettes'' to wipe the sweat from hot flashes.

Alternative Prescriptions

Selective Serotonin Reuptake Inhibitors (“SSRIs”) are a class of anti-depressants most commonly used in the treatment of depression, and some personality disorders. They have been found as efficient in alleviating hot flashes.  Venlafaxine (Effexor), paroxetine (Paxil), and fluoxetine (Prozac), have all shown an approximate 60% reduction in hot flushes but with side effects common to the SSRIs.

Clonidine, more commonly used for high blood pressure, has a 50% reduction in menopausal symptoms, but causes dry mouth, sedation and hypotension. Gabapentin, an anti-seizure medication, has a 45% reduction in frequency, and 54% decrease in menopausal symptom severity but can cause somnolence, fatigue, tremors, nausea, edema and ataxia.

Natural Alternatives

More and more women every day are turning to natural alternative treatments to treat the symptoms they experience during menopause including hot flashes, night sweats, and mood swings. There are several natural ways to ease the symptoms of menopause.

Natural estrogen compounds are available by prescription from compounding pharmacists. These types of estrogen are bio-identical -- they are chemically equal to the estrogen produced naturally in a woman’s body. There are 3 types of estrogens commonly used in bio-identical hormone replacement therapy. These are: Estrone (E1); Estradiol (E2), and Estriol (E3). Estrone and estradiol cause most of the risks associated with estrogen use. Natural or bio-identical estrogen compounds are prepared in any combination or number of these 3 types of estrogen; the most common formulation is 10 percent Estrone, 10 percent Estradiol, and 80 percent Estriol--called Tri-estrogen or Tri-est. A two estrogen bio-identical compound is called bi-estrogen.

Natural progesterone is an important component in menopausal symptom management for many women. It's available over-the-counter in products such as Pro-Gest, in compounded prescriptions, and a pharmaceutical called Prometrium. The benefit of using a cream product over an oral form is that you need a much lower dose because it does not have to be metabolized by the liver. Natural progesterone causes virtually no side effects.

There is also evidence which suggests that red clover isoflavones decrease the incidence of hot flashes. In one study, after 8 weeks using Promensil, a dietary supplement formulated with red clover isoflavones, at a dose of 40mg daily, participants experienced a 58% decrease in the number of hot flashes experienced.  Study participants also experienced a significant reduction in the severity of night sweats. Promensil is available over-the-counter, without a prescription, at retail grocery, drug, and health food stores.

Black Cohash is an herbal supplement, which has been shown to have benefit for hot flashes without altering FSH levels or endometrial thickness.  Side effects such as nausea, headaches, dizziness and liver toxicity have been reported. A black cohash/St John’s Wort combination has been shown to reduce the Menopause rating scale by 50% and the Hamilton Depression Scale by 41%.

There have also been several clinical trials using flaxseed. Flaxseed is the richest source of lignans, an anti-oxidant, which is one of three major classes of phytoestrogen.  Lignans are thought to have estrogen agonist and antagonist effects as well as antioxidant properties. Flaxseed and its lignans may have potent anti-estrogenic effects on estrogen receptor positive breast cancer and may have benefits in breast cancer prevention efforts.

Lifestyle Changes

Lifestyle changes may help alleviate hot flashes.  A diet is an important tool that a woman can use to help control their menopausal symptoms. Foods to avoid include high amounts of caffeine in any foods, carbonated beverages (which contain phosphorous and can increase bone loss), hot drinks, chocolate, spicy or hot foods and alcohol.  Also, limit its consumption of commercially raised meats including beef, pork, and chicken because these meats contain a high amount of saturated fats and decrease the body's ability to metabolize estrogen. Excessive sugar intake also limits the liver's ability to metabolize estrogen and impairs the immune system.

Increasing the intake of foods that contain phytoestrogens, including soy, is also recommended. Other foods that should be included in a woman’s diet include grains, oats, wheat, brown rice, tofu, almonds, cashews, and fresh fruits and vegetables.   According to research published by the Journal of the British Menopause Society, red clover isoflavones supplements, used in controlled studies, have been shown to have a significant positive effect on the rate of bone loss, improve cardiovascular health, and may offer some protective effect against breast and endometrial cancer.

 
 
 
In addition, women need to get plenty of regular exercise. Exercise is probably the single most important thing a woman can do to improve her overall health and well being throughout her life. Regular exercise (at least 3 or 4 days a week) helps prevent and reduce bone loss, and plays a key role in reducing the risk of many types of cancer, as well as heart disease.

Although these treatments work for many women,  every woman is different and it may take some time for a woman to find which treatments, or combination of treatments, work best Dressing in layers, wearing breathable clothing such as cotton and natural linen, and using fans, may aid in comfort. . It is always recommended for a woman to inform her healthcare provider of any natural alternative treatments being considered and/or used--this includes all vitamins, herbs, creams, etc.

Strategic Plan

Phase I & II Clinical Trial, Phase III Clinical Trial

The Company has retained a team of medical professionals and has recently completed the Study Protocol that will be used to conduct the Clinical Trial.  The purpose of the Study is to look at the effectiveness and safety of the drug Homatropine, to see if it will provide relief of hot flashes, night sweats and other menopause symptoms, and improve the quality of life in women.  The Company anticipates that the Study will be completed, barring any unforeseen delays, by the end of the 2 nd calendar quarter of 2013, at which time the Company will commence marketing the product.

The Company will conduct multiple Clinical Trials in Phase I-Phase II & Phase III of Tropine 3.  The first Trial will be a Phase 1-2, prospective, randomized, double blind, placebo-controlled, dose escalation, parallel group study to test the efficacy and safety of homatropine methylbromide oral suspension on selected climacteric symptoms and quality of life in menopausal Women not receiving hormonal replacement therapy.

The Company intends on conducting these Trials at multiple sites.  Thereafter, the Company intends to publish its results in medical journals and women’s health publications.

Intellectual Property

The Company is in the process of obtaining an exclusive patent for its novel method for alleviating hot flushes in climacteric women. The US Patent Application, referenced below, covers the method involved in administering to a climacteric woman a therapeutically effective amount of an anticholinergic agent, thereby alleviating at least one climacteric symptom in the woman. In some embodiments, the anticholinergic agent is homatropine, or a salt thereof.

The Company’s founders, Dr. Hootan Melamed and Mr. Edward W. Withrow III (“Founders”), retained Cislo & Thomas, LLC (“Cislo”), a Santa Monica, California based legal firm specializing in intellectual property, to work with the Company in all areas of its intellectual property.  The chronological history of the Company’s Patents is as follows:

a.     
On September 22, 2005, the Founders retained Cislo to file a US Provisional Patent Application Ser. No. 60/719,756.

b.     
On March 29, 2006, The Founders retained Cislo to conduct a search of Prior Art as it pertained to the Company’s U.S. Provisional Application Ser. No. 60/719,756. A copy of the Prior Art Search Letter is attached hereto as Exhibit 99.2.

c.     
On September 19, 2006, The Founders and the Company entered into a Patent Assignment, whereby the US Provisional Patent Application Ser. No. 60/719,756 was assigned exclusively to the Company. The Patent Assignment was subsequently filed with the USPTO, and is attached hereto as Exhibit 10 . 8.

d.      
On September 22, 2006, the Company filed US Patent Application Ser. No. 11/523,975. The USPTO Published US 2007/0066603 A1 Patent Application on the date of March 22, 2007.. A copy of the Abstract of US Patent Application 11/523,975 and the Published US 2007/0066603 A1 is attached herewith as Exhibit 99.1 .
 
e.     
F rom the date of March 23, 2007 to September the Company has maintained its responses to Actions by the USPTO as they pertain to US Patent Application Ser. No. 11/523,975
 
f.     
On September 14, 2012, the Company entered into a Retainer Agreement with Cislo to represent the Company on its current intellectual property matters, including the Patent Application referenced in item d.  A copy of the Retainer Agreement is attached herewith, and included in this filing as Exhibit 10.6.

g.     
On September 24, 2012, the Company received an Action by the USPTO.  The Company’s Response, a copy of which is attached herewith as Exhibit 99.3, was prepared by Cislo and filed on September 25, 2012.

 
 
 
The following table summarizes the Company’s Patents:

Patent Number
Patent Description
Patent Type
60/719,756 Method for Alleviating Climacteric Symptoms Provisional Patent filed September 22, 2005
11/523,975
Method for Alleviating Climacteric Symptoms
Patent Application filed March 22, 2007


Food & Drug Administration Approved Homatropine Drug Combinations in the U.S.

The following table represents the current approved FDA Cleared use of Homatropine by medical professionals and their patients.

Primary
Secondary
Disp.
Brand
Manufacturer
ID #
Homatropine Methylbromide; 1.5 mg/5m1
Hydrocodone Bitartrate 5mg/5ml
Syrup
Hycodan
Endo
088008
Homatropine Methylbromide; 1.5 mg/5m1
Hydrocodone Bitartrate 5mg/5ml
Syrup
Mycodone
Morton Grove
040295
Homatropine Methylbromide; 1.5 mg/5m1
Hydrocodone Bitartrate 5mg/5ml
Syrup
Generic
Alpharma
040285
Homatropine Methylbromide; 1.5 mg/5m1
Hydrocodone Bitartrate 5mg/5ml
Syrup
Generic
Axiom
005213
Homatropine Methylbromide; 1.5 mg
Hydrocodone Bitartrate 5mg
Tablet
Generic
Amide
005213
Homatropine Methylbromide; 1.5 mg
Hydrocodone Bitartrate 5mg
Tablet
Generic
Endo
088508

Government Regulations

The health care industry, and thus the Company’s business, is subject to extensive federal, state, local and foreign regulation. Some of the pertinent laws have not been definitively interpreted by the regulatory authorities or the courts, and their provisions are open to a variety of subjective interpretations. In addition, these laws and their interpretations are subject to change.

Both federal and state governmental agencies continue to subject the health care industry to intense regulatory scrutiny, including heightened civil and criminal enforcement efforts. As indicated by work plans and reports issued by these agencies, the federal government will continue to scrutinize all companies in the health care field. The federal government also has increased funding in recent years to fight health care fraud, and various agencies, such as the U.S. Department of Justice, the Office of Inspector General of the Department of Health and Human Services, or OIG, and state Medicaid fraud control units, are coordinating their enforcement efforts.

The Company must also comply with numerous other federal, state, and local laws relating to such matters as safe working conditions, environmental protection, industrial safety, and hazardous substance disposal. The Company may incur significant costs to comply with such laws and regulations in the future, and lack of compliance could have material adverse effects on the Company’s operations.

RISK FACTORS

Investing in the Company’s common stock involves a high degree of risk. In addition to the other information set forth in this report, you should carefully consider the factors discussed below when considering an investment in the Company’s common stock. If any of the events contemplated by the following discussion of risks should occur, its business, results of operations and financial condition could suffer significantly. As a result, you could lose some or all of your investment in the Company’s common stock. Additional risks and uncertainties not presently known to the Company or that the Company currently deems immaterial may also impair its business.

Risks Associated With The Company

The Company currently has generated no product revenues, has no products approved for marketing, and will need to raise additional capital to operate its business.
 
To date, the Company has generated no product revenues. Until, and unless, the Company receives approval from the U.S. Food and Drug Administration, or FDA for one or more of its drug candidates, the Company cannot market or sell its products and will not be able to generate product revenues. The Company’s drug candidate is in the early stages of development and will require significant time and capital to bring to market. Therefore, for the foreseeable future the Company does not expect to generate any product revenues and will be required to fund all of its operations and capital expenditures from cash on hand and future offerings. Currently, the Company believes that its cash on hand is sufficient to fund its operations for the next 12 months. However, changes may occur that would exhaust its available capital before that time, including changes in and progression of its development activities, acquisitions of additional drug candidates and changes in regulation. The Company will be required to seek additional sources of financing, which may not be available on favorable terms, if at all. If the Company does not succeed in raising additional funds in a timely manner and on acceptable terms, the Company may be unable to complete planned pre-clinical and clinical trials or obtain approval of its drug candidates from the FDA and other regulatory authorities. Any additional sources of financing will likely involve the issuance of additional equity securities, which will have a dilutive effect on the Company’s stockholders.
 
 
 
 
The Company has a limited operating history and is not profitable and may never become profitable.
 
The Company has an accumulated deficit of $96,599 and a working capital deficit of $51,147 as of July 31, 2012, and no meaningful operations upon which to evaluate its business. The Company expects to incur substantial losses and negative operating cash flow for the foreseeable future as the Company commences development of its drug candidates. Even if the Company succeeds in developing and commercializing one or more drug candidates, the Company expects to incur substantial losses for the foreseeable future and may never become profitable. The successful development and commercialization of any drug candidates will require the Company to perform a variety of functions, including:
 
§   
undertaking pre-clinical development and clinical trials;
 
§   
hiring additional personnel
 
§   
participating in the regulatory approval processes
 
§   
formulating and manufacturing products;
 
§   
initiating and conducting sales and marketing activities; and
 
§   
implementing additional internal systems and infrastructure.


The Company will likely need to raise additional capital in order to fund its business and generate significant revenue in order to achieve and maintain profitability. The Company may not be able to generate this revenue, raise additional capital or achieve profitability in the future. The Company’s failure to achieve or maintain profitability could negatively impact the value of its common stock.
 
The Company is heavily dependent on the success of Tropine 3, the Company’s lead drug candidate, which is still under clinical development, and the Company cannot be certain that Tropine 3 will receive regulatory approval or be successfully commercialized even if the Company receive regulatory approval.
 
The Company currently has no products that are approved for commercial sale and may never be able to develop marketable drug products. The Company expects that a substantial portion of its efforts and expenditures over the coming months will be devoted to its lead drug candidate, Tropine 3. Accordingly, its business currently depends heavily on the successful development, regulatory approval and commercialization of Tropine 3. The Company cannot be certain that Tropine 3 will receive regulatory approval or be successfully commercialized even if the Company receives regulatory approval. The research, testing, manufacturing, labeling, approval, sale, marketing and distribution of drug products are, and will remain, subject to extensive regulation by the FDA and other regulatory authorities in the United States and other countries, which regulations differ from country to country. The Company is not permitted to market Tropine 3 in the United States until it receives approval of a New Drug Application, or NDA, from the FDA, or in any foreign countries until it receives the requisite approval from such countries. The Company has not submitted an NDA to the FDA or comparable applications to other regulatory authorities. Obtaining approval of an NDA is an extensive, lengthy, expensive and inherently uncertain process, and the FDA may delay, limit or deny approval of Tropine 3 for many reasons, including:
 
§   
we may not be able to demonstrate that Tropine 3 is safe and effective as a treatment for its targeted indications to the satisfaction of the FDA;
 
§   
the results of its clinical studies may not meet the level of statistical or clinical significance required by the FDA for marketing approval;
 
§   
the FDA may disagree with the number, design, size, conduct or implementation of its clinical studies;
 
§   
the FDA may not find the data from pre-clinical studies and clinical studies sufficient to demonstrate that the clinical and other benefits of Tropine 3 outweigh its safety risks;
 
§   
the FDA may disagree with its interpretation of data from its pre-clinical studies and clinical studies or may require that the Company conduct additional studies;
 
§   
the FDA may not accept data generated at its clinical study sites;
 
§   
the FDA may identify deficiencies in the manufacturing processes or facilities of its third-party manufacturers; or
 
§   
the FDA may change its approval policies or adopt new regulations.

 
 
 
If the Company is unable to hire additional qualified personnel, its ability to grow its business may be harmed.
 
The Company currently relies heavily on its President and Chief Executive Officer, and its future success depends on its ability to identify, attract, hire, train, retain and motivate other highly skilled scientific, technical, marketing, managerial and financial personnel. Although the Company will seek to hire and retain qualified personnel with experience and abilities commensurate with its needs, there is no assurance that the Company will succeed despite its collective efforts.
 
The Company may not successfully manage its growth.
 
The Company’s success will depend upon the expansion of its operations and its ability to successfully manage its growth. The Company’s future growth, if any, may place a significant strain on its management and on its administrative, operational and financial resources. The Company’s ability to manage its growth effectively will require the Company to implement and improve its operational, financial and management systems and to expand, train, manage and motivate its employees. These demands may require the hiring of additional management personnel and the development of additional expertise by management. Any increase in resources devoted to research and product development without a corresponding increase in its operational, financial and management systems could have a material adverse effect on its business, financial condition and results of operations.
 
Clinical trials are very expensive, time-consuming and difficult to design and implement.
 
The Company’s drug candidate is still in development and will require extensive clinical testing before the Company is prepared to submit a NDA for regulatory approval. Human clinical trials are very expensive and difficult to design and implement, in part because they are subject to rigorous regulatory requirements. The clinical trial process is also time-consuming. Furthermore, failure can occur at any stage of the trials, and the Company could encounter problems that cause the Company to abandon or repeat clinical trials. The commencement and completion of clinical trials may be delayed by several factors, including:
 
§   
failure to obtain regulatory and approval by an independent institutional review board;
 
§   
unforeseen safety issues;
 
§   
lack of effectiveness during clinical trials;
 
§   
slower than expected rates of patient recruitment;
 
§   
failure to manufacture sufficient quantities of a drug candidate for use in clinical trials;
 
§   
inability to monitor patients adequately during or after treatment; and
 
§   
inability or unwillingness of medical investigators to follow its clinical protocols.

Any of these occurrences may harm its business, financial condition and results of operations.
 
Enrollment and retention of patients in clinical trials is an expensive and time-consuming process, and could be made more difficult or rendered impossible by multiple factors outside the Company’s control.
 
The Company may encounter delays in enrolling, or be unable to enroll, a sufficient number of patients to complete any of its clinical trials, and even once enrolled the Company may be unable to retain a sufficient number of patients to complete any of its trials. Patient enrollment and retention in clinical trials depend on many factors, including the size of the patient population, the nature of the trial protocol, the existing body of safety and efficacy data with respect to the study drug, the number and nature of competing treatments and ongoing clinical trials of competing drugs for the same indication, the proximity of patients to clinical sites and the eligibility criteria for the study. Furthermore, any negative results the Company may report in clinical trials of any of its drug candidates may make it difficult or impossible to recruit and retain patients in other clinical studies of that same drug candidate. Delays or failures in planned patient enrollment and/or retention may result in increased costs, program delays or both, which could have a harmful effect on its ability to develop its drug candidates, or could render further development impossible.
 
The results of the Company’s clinical trials may not support the Company’s drug candidate claims.
 
Even if the Company’s clinical trials are completed as planned, the Company cannot be certain that their results will support the safety and effectiveness of its drug candidates for its targeted indications. Success in pre-clinical testing and early clinical trials does not ensure that later clinical trials will be successful, and the Company cannot be sure that the results of later clinical trials will replicate the results of prior clinical trials and pre-clinical testing. A failure of a clinical trial to meet its predetermined endpoints would likely cause the Company to abandon a drug candidate and may delay development of other drug candidates. Any delay in, or termination of, its clinical trials will delay the filing of its NDAs with the FDA and, ultimately, its ability to commercialize its drug candidates and generate product revenues.
 
 
 
 
Physicians and patients may not accept and use the Company’s drugs.
 
Even if the FDA approves one or more of the Company’s drug candidates, physicians and patients may not accept and use them. Acceptance and use of the Company’s product will depend upon a number of factors including:
 
§   
perceptions by members of the health care community, including physicians, about the safety and effectiveness of the Company’s drug;
 
§   
cost-effectiveness of the Company’s product relative to competing products;
 
§   
availability of reimbursement for the Company’s product from government or other healthcare payors; and
 
§   
effectiveness of marketing and distribution efforts by the Company and its licensees and distributors, if any.
 
Because the Company expects sales of its current drug candidate, if approved, to generate substantially all of its product revenues for the foreseeable future, the failure of these drugs to find market acceptance would harm the Company’s business and could require the Company to seek additional financing.
 
The Company will rely exclusively on third parties to formulate and manufacture its drug candidates. The commercialization of any of the Company’s drug candidates could be stopped, delayed or made less profitable if those third parties fail to provide the Company with sufficient quantities of product or fail to do so at acceptable quality levels or prices .
 
The Company has no experience in drug formulation or manufacturing and do not intend to establish its own manufacturing facilities. The Company lacks the resources and expertise to formulate or manufacture its own drug candidates. The Company currently has no agreements for the clinical or commercial scale manufacture of its drug candidates. The Company intends to enter into agreements with one or more manufacturers, to manufacture, supply, store and distribute drug supplies for its clinical trials. Additionally, if the Company’s current drug candidate, or any drug candidates the Company may develop or acquire in the future, receives FDA approval, the Company will rely on one or more third-party contractors to manufacture the commercial supply of its drugs. The Company’s anticipated future reliance on a limited number of third-party manufacturers exposes the Company to the following risks:
 
§  
The Company may be unable to identify manufacturers on acceptable terms or at all because the number of potential manufacturers is limited and the FDA must approve any replacement contractor. This approval would require new testing and compliance inspections. In addition, a new manufacturer would have to be educated in, or develop substantially equivalent processes for, production of the Company’s products after receipt of FDA approval, if any.
 
§  
The Company’s third-party manufacturers might be unable to formulate and manufacture its drugs in the volume and of the quality required to meet its clinical needs and commercial needs, if any.
 
§  
The Company’s future contract manufacturers may not perform as agreed or may not remain in the contract manufacturing business for the time required to supply its clinical trials or to successfully produce, store and distribute its products.
 
§  
Drug manufacturers are subject to ongoing periodic unannounced inspection by the FDA, the Drug Enforcement Administration, and corresponding state agencies to ensure strict compliance with regulations on current good manufacturing practices and other government regulations and corresponding foreign standards. The Company do not have control over third-party manufacturers’ compliance with these regulations and standards.
 
§  
If any third-party manufacturer makes improvements in the manufacturing process for its products, the Company may not own, or may have to share, the intellectual property rights to the innovation.
 
Each of these risks could delay the Company’s clinical trials, the approval, if any, of its drug candidates by the FDA, or the commercialization of its drug candidates, or result in higher costs or deprive the Company of potential product revenues.
 
Health care reform measures may hinder or prevent the Company’s drug candidates’ commercial success.
 
The United States and some foreign jurisdictions are considering or have enacted a number of legislative and regulatory proposals to change the healthcare system in ways that could affect the Company’s ability to sell its products profitably. Among policy makers and payors in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access. In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives.
 
In March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act, (“PPACA”), became law in the United States. The PPACA substantially changes the way healthcare is financed by both governmental and private insurers and significantly affects the pharmaceutical industry. While a number of states have challenged the constitutionality of certain provisions of the PPACA, many of these challenges are still pending final adjudication in several jurisdictions. Congress has also proposed a number of legislative initiatives, including possible repeal of the PPACA. At this time, it remains unclear whether there will be any changes made to the PPACA, whether to certain provisions or its entirety.
 
 
 
 
The PPACA, as currently enacted or as amended in the future, may adversely affect the Company’s business and financial results, and the Company cannot predict all of the ways in which future federal or state legislative or administrative changes relating to healthcare reform will affect its business. Nevertheless, the Company anticipates that the PPACA, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and in additional downward pressure on the price that the Company receives for any approved product, and could seriously harm its business. Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors, could affect the sale of its product, market acceptance of its products and expected revenue and profitability which would have a material adverse effect on its business, results of operations, financial condition and prospects.
 
If the Company cannot compete successfully for market share against other drug companies, the Company may not achieve sufficient product revenue and its business will suffer.
 
The market for the Company’s drug candidates is characterized by intense competition and rapid technological advances. If any of the Company’s drug candidates receives FDA approval, it will compete with a number of existing and future drugs and therapies that are developed, manufactured and marketed by others. Existing or future competing products may provide greater therapeutic convenience or clinical or other benefits for a specific indication than the Company’s products, or may offer comparable performance at a lower cost. In addition, a large number of companies are pursuing the development of pharmaceuticals that target the same diseases and conditions that the Company is targeting. If the Company’s products fail to capture and maintain market share, the Company may not achieve sufficient product revenue and its business will suffer.
 
The Company will compete against fully integrated pharmaceutical companies and smaller companies that are collaborating with larger pharmaceutical companies, academic institutions, government agencies and other public and private research organizations. Many of these competitors, either alone or together with their collaborative partners, operate larger research and development programs or have substantially greater financial resources than the Company does, as well as significantly greater experience in:
 
§   
developing drugs;
 
§   
undertaking pre-clinical testing and clinical trials;
 
§   
obtaining FDA and other regulatory approvals of drugs;
 
§   
formulating and manufacturing drugs; and
 
§   
launching, marketing and selling drugs.

The Company’s ability to generate product revenues will be diminished if its drugs sell for inadequate prices or patients are unable to obtain adequate levels of reimbursement.
 
The Company’s ability to commercialize its drugs, alone or with collaborators, will depend in part on the extent to which reimbursement will be available from:
 
§   
government and health administration authorities;
 
§   
private health maintenance organizations and health insurers; and
 
§   
other healthcare payors.
 
Significant uncertainty exists as to the reimbursement status of newly approved healthcare products. As a result, the Company may not achieve sufficient product revenue and its business will suffer.

Competition

Many of the Company’s competitors have substantially greater financial, technical, and other resources and larger, more established marketing, sales and distribution systems than the Company does. Many of the Company’s competitors also offer broader product lines and have greater brand recognition than the Company does. Moreover, the Company’s competitors may make rapid technological developments that may result in its technologies and products becoming obsolete before the Company recovers the expenses incurred to develop them or before they generate significant revenue. The Company’s success will depend, in part, on its ability to develop its products in a timely manner, keep its products current with advancing technologies, achieve market acceptance of its products, gain name recognition and a positive reputation in the healthcare industry, and establish successful marketing, sales and distribution efforts.
 
 
 
 
Risks Related to The Company’s Intellectual Property
 
The Company’s proprietary rights may not adequately protect its intellectual property and potential products, and if the Company cannot obtain adequate protection of its intellectual property and potential products, the Company may not be able to successfully market its potential products.
 
The Company’s commercial success will depend in part on obtaining and maintaining intellectual property protection for its products, formulations, processes, methods and other technologies. The Company will only be able to protect these technologies and products from unauthorized use by third parties to the extent that valid and enforceable intellectual property rights, including patents, cover them or other market exclusionary rights apply. In addition, others may independently develop similar or alternative products and technologies that may be outside the scope of its intellectual property. Furthermore, others may have invented technology claimed by its patents before the Company or its licensors did so, and they may have filed patents claiming such technology before the Company did so, weakening its ability to obtain and maintain patent protection for such technology. Should third parties obtain patent rights to similar products or technology, this may have an adverse effect on its business.
 
The Company’s ability to commercialize its potential products will depend on its ability to sell such products without infringing the patent or proprietary rights of third parties.
 
The Company’s ability to commercialize its potential products will depend on its ability to sell such products without infringing the patents or other proprietary rights of third parties. Other companies may have or may acquire intellectual property rights that could be enforced against us. If they do so, the Company may be required to alter its products, formulations, processes, methods or other technologies, obtain a license, assuming one can be obtained, or cease its product-related activities. If its products or technologies infringe the intellectual property rights of others, they could bring legal action against the Company or its licensors or collaborators claiming damages and seeking to enjoin any activities that they believe infringe their intellectual property rights. If the Company is sued for patent infringement, the Company would need to demonstrate that its products or methods of use either does not infringe the patent claims of the relevant patent or that the patent claims are invalid or unenforceable, and the Company may not be able to do this. Proving invalidity, in the United States, in particular, is difficult since it requires a showing of clear and convincing evidence to overcome the presumption of validity enjoyed by issued patents. If the Company is found to infringe a third-party patent, the Company may need to cease the commercial sale of its product.

The Company’s failure to obtain necessary regulatory clearances or approvals would significantly impair its ability to distribute and market its products.

The Company is subject to regulation and supervision by the FDA in the United States and similar regulatory bodies in other countries. Before the Company is able to place its products in its intended markets in the U.S. and Europe, the Company is required to obtain approval of its products from the FDA and receive a CE Mark in Europe.  Delays in obtaining approvals and clearances could have material adverse effects on the Company and its operations.

Risks Associated With The Company’s Common Stock

The Company’s stock price may be volatile.

The market price of the Company’s common stock is likely to be highly volatile and could fluctuate widely in price in response to various potential factors, many of which will be beyond the Company’s control, including the following:

§  
competition;
§  
additions or departures of key personnel;
§  
the Company’s ability to execute its business plan;
§  
operating results that fall below expectations;
§  
loss of any strategic relationship;
§  
industry developments;
§  
economic and other external factors; and
§  
period-to-period fluctuations in the Company’s financial results.

In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of the Company’s common stock.

 
 
 
The Company does not expect to pay dividends in the foreseeable future.

The Company does not intend to declare dividends for the foreseeable future, as the Company anticipates that the Company will reinvest any future earnings in the development and growth of its business. Therefore, investors will not receive any funds unless they sell their common stock, and stockholders may be unable to sell their shares on favorable terms or at all. The Company cannot assure you of a positive return on investment or that you will not lose the entire amount of your investment in the Company’s common stock.

The Company may in the future issue additional shares of its common stock which would reduce investors’ ownership interests in the Company and which may dilute its share value.

The Company’s Articles of Incorporation and amendments thereto authorize the issuance of 650,000,000 shares of common stock, par value $0.001 per share. The future issuance of all or part of its remaining authorized common stock may result in substantial dilution in the percentage of its common stock held by its then existing stockholders. The Company may value any common stock issued in the future on an arbitrary basis. The issuance of common stock for future services or acquisitions or other corporate actions may have the effect of diluting the value of the shares held by the Company’s investors, and might have an adverse effect on any trading market for the Company’s common stock.

The Company’s common stock is currently deemed to be “penny stock”, which makes it more difficult for investors to sell their shares .

The Company’s common stock is currently subject to the “penny stock” rules adopted under section 15(g) of the Exchange Act. The penny stock rules apply to companies whose Common Stock is not listed on the NASDAQ Stock Market or other national securities exchange and trades at less than $5.00 per share or that have tangible net worth of less than $5,000,000 ($2,000,000 if the company has been operating for three or more years). These rules require, among other things, that brokers who trade penny stock to persons other than “established customers” complete certain documentation, make suitability inquiries of investors and provide investors with certain information concerning trading in the security, including a risk disclosure document and quote information under certain circumstances. Many brokers have decided not to trade penny stocks because of the requirements of the penny stock rules and, as a result, the number of broker-dealers willing to act as market makers in such securities is limited. If the Company remains subject to the penny stock rules for any significant period, it could have an adverse effect on the market, if any, for the Company’s securities. If the Company’s securities are subject to the penny stock rules, investors will find it more difficult to dispose of the Company’s securities.

FINRA sales practice requirements may limit a stockholder’s ability to buy and sell the Company’s stock.

The Financial Industry Regulatory Authority (“FINRA”) has adopted rules that relate to the application of the SEC’s penny stock rules in trading the Company’s securities and require that a broker/dealer have reasonable grounds for believing that the investment is suitable for that customer, prior to recommending the investment. Prior to recommending speculative, low priced securities to their non-institutional customers, broker/dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information.

Under interpretations of these rules, FINRA believes that there is a high probability that speculative, low priced securities will not be suitable for at least some customers. FINRA’s requirements make it more difficult for broker/dealers to recommend that their customers buy the Company’s common stock, which may have the effect of reducing the level of trading activity and liquidity of the Company’s common stock. Further, many brokers charge higher transactional fees for penny stock transactions. As a result, fewer broker/dealers may be willing to make a market in the Company’s common stock, reducing a shareholder’s ability to resell shares of the Company’s common stock.

Contractual Obligations

The Company is a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and is not required to provide the information under this item.

PROPERTIES

The Company’s principal executive office is located at 9595 Wilshire Blvd., Suite 900, Beverly Hills, California 90212.  The Company currently rent this space for approximately $300 a month.  Currently, this space is sufficient to meet the Company’s needs.  However, once the Company expands its business to a significant degree, it will have to find a larger space. The Company does not currently own any real estate.

 
 
 
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Security Ownership of Management

The following table sets forth certain information concerning the number of shares of the Company’s common stock owned beneficially as of October 30, 2012, by: (i) each of its directors; (ii) each of its named executive officers; and (iii) each person or group known by the Company to beneficially own more than 5% of its outstanding shares of common stock.  Unless otherwise indicated, the shareholders listed below possess sole voting and investment power with respect to the shares they own.
 

Name and Address of Beneficial Owner
Title of Class
Amount and Nature  of
Beneficial Ownership (1)
Percent
of Class (2)
Edward W. Withrow III
1327 Ocean ave Suite M
Santa Monica, CA 90401
Common
88,079,375
19.88%
       
Sky Holdings Ltd.
9663 Santa Monica Blvd
Beverly Hills, CA 90210
Common
80,990,625
 
18.28%
       
M. Katsuka Sandoval
702 Dune Drive #B
Mailbu, CA 90275
Common
39,750,000
8.97%
       
Michael Borkowski
6365 Collins Ave, Suite 3403
Miami, FL 33141
Common
  5,300,000
1.20%
       
(1)
The number and percentage of shares beneficially owned is determined under rules of the SEC and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares as to which the individual has sole or shared voting power or investment power and also any shares which the individual has the right to acquire within 60 days through the exercise of any stock option or other right. The persons named in the table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to community property laws where applicable and the information contained in the footnotes to this table.
(2)
Based on 443,000,686 issued and outstanding shares of common stock as of October 30, 2012

Directors and Officers as a Group (1 shareholder)
   5,300,000
1.20%
More than 5% ownership (3 shareholders)
214,120,000
48.33%
Total (5 shareholders)
277,460,720
49.53%

DIRECTORS AND EXECUTIVE OFFICERS

Identification of Directors and Executive Officers

The following table sets forth the names and ages of the Company’s current directors and executive officers:

Name
Age
Position with the Company
Director Since
Michael Borkowski
6365 Collins Ave, Suite 3403
Miami, FL 33141
39
President, Chief Executive Officer, Chief Financial Officer and Director
August 22, 2012


Term of Office

Each director of the Company serves for a term of one year and until his successor is elected at the Company’s Annual Shareholders’ Meeting and is qualified, subject to removal by the Company’s shareholders.   Each officer serves for a term of one year and until his successor is elected at a meeting of the Board of Directors and is qualified.

On December 8, 2009 Ms. Christine Buchanan-McKenzie was appointed the Company’s President, Chief Executive Officer, Chief Financial Officer, Treasurer, Secretary and Director .

On August 22, 2012, Ms. Buchanan-McKenzie resigned from all positions within the Company.

On August 22, 2012, Mr. Michael Borkowski was appointed the Company’s President, Chief Executive Officer, Chief Financial Officer, Treasurer Secretary and Director .

 
 
 
Background and Business Experience

Michael J. Borkowski - Since June 2008, Mr. Borkowski has been working with Huntington Chase, Ltd assisting its Merchant Banking activities with multiple companies including Ecologic Transportation, Inc., a 100% Environmentally Friendly Transportation company, Montecito BioScience, Ltd., a Biotech company, and AudioEye, Inc., an internet and mobile technology company.  Mr. Borkowski played a key role in identifying potential transactions, introducing key relationships, assisting the companies in their transition from private to public sector, restructuring their corporate structure, and successfully completing their private placements.  

In addition, from time to time Mr. Borkowski provides consulting services for the Dubai- based company, Rasia Group (“Rasia”). Rasia is an exclusive investment firm that engages in both direct principal investment strategies, as well as highly confidential investment representation for prominent sovereign and sovereign affiliated funds and families. Rasia originates and executes proprietary and “off market” deals for its own account and for its portfolio companies with an emphasis on high value resources, strategic infrastructure, and defense.

Prior to working with Huntington Chase Ltd, Mr. Borkowski spent two years working for Kingsdale Capital International (“Kingsdale”). Mr. Borkowski’s primary focus was on Kingsdale’s business development. He was responsible for identifying and analyzing new opportunities and investments, as well as mergers and acquisitions activities. In addition, Mr. Borkowski raised capital for existing projects and assisted Kingsdale in successfully completing each investment.

Mr. Borkowski began his career as a highly accomplished professional racecar driver.  His achievements include winning several professional national championships and competing at multiple levels of the highest divisions, including winning the world famous 12-Hours of Sebring.

Mr. Borkowski graduated Cum Laude from the Taft School and then graduated with honors from Cornell University.

Identification of Significant Employees/Consultants

The Company and its subsidiary, Eaton Scientific Systems, Ltd. has various employment/consulting agreements with the following individuals:

Michael J. Borkowski , President, Chief Executive Officer and Director

For information on Mr. Borkowski, please see section entitled, Background and Business Experience , above.  Mr. Borkowski’s Employment Agreement is summarized below under the section entitled, Employment Agreements.

Dr. Jennifer Berman, Senior Medical Liaison & Advocate

Jennifer R. Berman, MD, is a urologist and an internationally renowned expert and pioneer in the field of female urology and female sexual medicine. In 2001, Dr. Berman, who is among the few female urologists in the United States, co-founded the Female Sexual Medicine Center at University of California, Los Angeles (UCLA). She currently serves as the head of the Berman Women’s Wellness Center in Los Angeles California.

In addition to her medical practice, Dr. Berman previously co-hosted, with her sister Laura Berman, PhD, the television series on Discovery Health Network, Berman and Berman. Considered a leading expert on women's sexual health, she has appeared on national television, in print, and on radio shows. She appears regularly on Good Morning America and has been featured on The Oprah Winfrey Show, CNN's Larry King Live, 48 Hours, NBC Nightly News, 20/20, MSNBC, Lifetime Television, America's Health Network, New York Times Magazine, Newsweek, Fortune and others. For two consecutive years, she was awarded the Pfizer Scholar in Urology Award and has repeatedly been recognized with awards and honors at local, national, and international scientific meetings.  Her research focus is on the physiologic evaluation of the female sexual response, developing medical therapies for female sexual function complaints, and bio-identical hormone treatments. Berman is a principal investigator and consultant to pharmaceutical companies, assisting the development of therapies for female sexual dysfunction.

In her personal life, Dr. Berman is dedicated to increasing community awareness about women's health issues. She has been the recipient of numerous prestigious awards and honors including Israel Cancer Research Fund's Women of Action Award, The National Association of Women Business Owners Rising Star of the Year Award and the Los Angeles Business Journal's Women Who Make a Difference Award.  Dr. Berman received her medical degree from Boston University School of Medicine. She completed her post-graduate urology residency training at the University of Maryland and received specialized fellowship training in female urology and female pelvic floor reconstructive surgery at UCLA Medical Center.

Dr. David Stark,   V.P. Regulatory Approval and Clinical Trial Manager

Dr. Stark has 18 years experience from the toxicology labs to the investigator site and has been essential to all aspects clinical and device research. Dr. Stark is the President and CEO of Stark-SMO, a Site Management Organization whose services go far beyond that of an ordinary SMO.  Due to his extensive and broad experiences in the inner workings of the research and regulatory aspects of clinical trials, Dr. Stark brings a unique vision to the industry and the Company as a motivated designer of superior approaches to research challenges. Most importantly, Dr. Stark is highly qualified to manage the development opportunities of the Company.

 
 
 
Formerly the Director of the National Institute of Clinical Research (NICR), he has been responsible for the design, organization and implementation of clinical trials for pharmaceutical and device companies.  He has a broad background in designing, conducting, and monitoring clinical trials of new pharmaceuticals and devices.  He is one of the few that has worked in the manufacturing validation of pharmaceuticals, the clinical field, and the regulatory (IRB) arenas, and therefore possesses a big-picture understanding of pharmaceutical development.

Through Dr. Stark’s diverse and devoted networking within the industry, Stark-SMO has assembled a wide network of more than 5000 physicians throughout the United States, which extends to the international community. Currently, he is negotiating a unique DMF partnership with drug manufacturers in China.

In addition to his significant accomplishments on the industry side of clinical drug and device development, Dr. Stark has experience with the FDA (major focus on IND’s NDA’s and 510K applications). Prior to his employment at NICR, Dr. Stark was the President and Chief Executive Officer of Powder Ice, Inc a medical products company. Additionally, Dr. Stark is a California state licensed Qualified Medical Examiner and Certified Clinical Research Associate.

 
Family Relationship

The Company and its subsidiaries currently have no officers or directors who are related to each other.

 
Involvement in Certain Legal Proceedings

During the past ten years no director, executive officer, promoter or control person of the Company has been involved in the following:

(1)    
A petition under the Federal bankruptcy laws or any state insolvency law which was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;
(2)    
Such person was convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);
(3)    
Such person was the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities:
i.      
Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;
ii.      
Engaging in any type of business practice; or
iii.      
Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;
(4)    
Such person was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (f)(3)(i) of this section, or to be associated with persons engaged in any such activity;
(5)    
Such person was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;
(6)    
Such person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;
(7)    
Such person was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:
i.      
Any Federal or State securities or commodities law or regulation; or
ii.      
Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or
iii.      
Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
(8)    
Such person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

 
 
 
Audit Committee and Audit Committee Financial Expert

The Company does not currently have an audit committee serving on its Board of Directors. However, the Company intends, in the coming months, to establish an audit committee of the Board of Directors that shall consist of independent directors. The audit committee’s duties will be to recommend to the Company’s board of directors the engagement of an independent registered public accounting firm to audit the Company’s financial statements and to review the Company’s accounting and auditing principles. The audit committee will review the scope, timing and fees for the annual audit and the results of audit examinations performed by the internal auditors and independent registered public accounting firm, including their recommendations to improve the system of accounting and internal controls. The audit committee shall at all times be composed exclusively of directors who are, in the opinion of the Company’s board of directors, free from any relationship which would interfere with the exercise of independent judgment as a committee member and who possess an understanding of financial statements and generally accepted accounting principles.

EXECUTIVE COMPENSATION

The table below summarizes the compensation paid to the Company’s principal executive officers, except that no disclosure is provided for any named executive officer, other than our principal executive officers, whose total compensation did not exceed $100,000 for the respective fiscal year:

  Summary Compensation Table
Name and Principal Position
Year
Salary
($)
Bonus
($)
Stock Awards
($)
Option
Awards
($)
Non-Equity
Incentive Plan
Compensation
($)
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)
All Other
Compensation
($)
Total
($)
Michael J.  Borkowski
President, CEO, CFO, Treasurer Secretary and Director
2012
$6,000      
Nil      
Nil      
Nil      
Nil      
Nil      
Nil      
$6,000      
2011
Nil      
Nil      
Nil      
Nil      
Nil      
Nil      
Nil      
Nil      
2010
Nil      
Nil      
Nil      
Nil      
Nil      
Nil      
Nil      
Nil      
Christine Buchanan-McKenzie
Former President, CEO, and Director
2012
Nil      
Nil      
Nil      
Nil      
Nil      
Nil      
Nil      
Nil      
2011
$5,500      
Nil      
Nil      
Nil      
Nil      
Nil      
Nil      
$5,500      
2010
Nil      
Nil      
Nil      
Nil      
Nil      
Nil      
Nil      
Nil      

Narrative Disclosure to Summary Compensation Table

There are no compensatory plans or arrangements, including payments to be received from the Company with respect to any executive officer, that would result in payments to such person because of his or her resignation, retirement or other termination of employment with the Company, or its subsidiaries, any change in control, or a change in the person’s responsibilities following a change in control of the Company.
 
Stock Options/SAR Grants
 
The Company adopted its 2012 Employee Stock Option Plan (“2012 ESOP”) on September 1, 2012, a copy of which is attached herewith and included in this filing as Exhibit 10.4.
 
The Company granted the following stock options to directors and officers:
 
On September 1, 2012, Michael Borkowski was granted an option under the Company’s 2012 ESOP to purchase 5,000,000 shares of the Company’s common stock at a price of $0.10 per share.
 
 
 
 
On September 12, 2012, Dr. Jennifer Berman was granted an option under the Company’s 2012 ESOP to purchase 6,150,000 shares of the Company’s common stock at a price of $0.25 per share.
 
Outstanding Equity Awards
 
On September 1, 2012, the Company, under its 2012 ESOP, granted qualified stock options to its Chief Executive Officer to purchase 5,000,000 shares of its common stock for five year at $0.10 per share, which vest quarterly over a period of three years. As of the date of this filing, no options have vested.
 
On September 1, 2012, David Stark was granted an option under the Company’s 2012 ESOP to purchase 1,500,000 shares of the Company’s common stock at a price of $0.25 per share.
 
On September 12, 2012, the Company, under its 2012 ESOP, granted qualified stock options to its Directors to purchase 6,150,000 shares of its common stock for five year at $0.25 per share, which vest quarterly over a period of one year. As of the date of this filing, no options have vested.
 
Compensation of Directors

The Company reimburses its directors for expenses incurred in connection with attending board meetings. The Company has not paid any director's fees or other cash compensation for services rendered as a director since our inception to the date of this filing.

The Company has no formal plan for compensating its directors for their service in their capacity as directors. However, certain directors and officers of the Company have received stock options to purchase common shares under the Company’s 2012 ESOP, and may receive additional stock options at the discretion of the Company’s board of directors.
 
Employment Agreements
 
On September 1, 2012, the Company executed and entered into an employment agreement with its CEO, Mr. Michael J. Borkowski (the “Employment Agreement”). The Employment Agreement has a term of three years from the effective date, September1, 2012. Under the Employment Agreement, Mr. Borkowski agreed to serve as the President, CEO, and Director of the Company.  Mr. Borkowski shall have such authority, and the Company’s board of directors may reasonably assign responsibility to him. Pursuant to the Employment Agreement, Mr. Borkowski will have a base salary of $72,000 per annum per year.  Additionally, as part of the Company’s Employee Stock Option Plan, Mr. Borkowski was granted five million (5,000,000) options of the Company’s common stock which will vest on a quarterly basis over a three year period at an exercise price of ten cents ($0.10) per share,.  Mr. Borkowski shall be entitled to participate in any and all deferred compensation, 401(k) or other retirement plans, medical insurance, dental insurance, group health, disability insurance, pension and other benefit plans that are made generally available by the Company to its executives who have similar responsibilities and perform similar functions as Mr. Borkowski.  The foregoing summary of the Employment Agreement is not complete and is qualified in its entirety by reference to the complete text, which is attached hereto as Exhibit 10.7. 

Consulting Agreements
 
On August 28, 2012, ESSL entered into a Consulting Agreement with Dr. David Stark (the “Stark Agreement”).  Pursuant to the terms of the Stark Consulting Agreement, Dr. Stark will receive cash compensation in the amount of $4,000 per month beginning September 1, 2012 and continuing for a period of 6 months, until March 1, 2013, for total cash compensation of $24,000, The Stark Agreement may be extended upon mutual agreement in increments of three month periods.  In addition, Stark shall be reimbursed for any reasonable expenses incurred in the course of providing services to Eaton. The foregoing summary of the Stark Agreement is not complete, and is qualified in its entirety by reference to the complete text, which is attached hereto as Exhibit 10.3.

On September 12, 2012, ESSL also entered into a Consulting Agreement with Dr. Jennifer Berman (the “Berman Agreement”).  Pursuant to the terms of the Berman Agreement, Dr. Berman will provide certain services to Eaton at the direction of the Company’s CEO and will receive six million and fifty thousand (6,150,000) options of common stock, vesting quarterly over a twelve (12) month period, with a strike price of twenty-five cents ($0.25),  The foregoing summary of the Berman Consulting Agreement is not complete, and is qualified in its entirety by reference to the complete text, which is attached hereto as Exhibit 10.5.
 
Long-Term Incentive Plans

There are no arrangements or plans in which the Company provides pension, retirement or similar benefits for directors or executive officers.   
 
Compensation Committee
 
The Company currently does not have a compensation committee of the Board of Directors. The Board of Directors as a whole determines executive compensation.

 
 
 
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Related Party Transactions

None of the directors or executive officers of the Company, nor any person who owned of record or was known to own beneficially more than 5% of the Company’s outstanding shares of its Common Stock, nor any associate or affiliate of such persons or companies, has any material interest, direct or indirect, in any transaction that has occurred during the past fiscal year, or in any proposed transaction, which has materially affected or will affect the Company.

With regard to any future related party transaction, the Company plans to fully disclose any and all related party transactions in the following manner:
§  
Disclosing such transactions in reports where required;
§  
Disclosing in any and all filings with the SEC, where required;
§  
Obtaining disinterested directors consent; and
§  
Obtaining shareholder consent where required.

Director Independence

For purposes of determining director independence, The Company has applied the definitions set out in NASDAQ Rule 5605(a)(2). The OTCBB on which shares of Common Stock are quoted does not have any director independence requirements. The NASDAQ definition of “Independent Officer” means a person other than an Executive Officer or employee of the Company or any other individual having a relationship which, in the opinion of the Company's Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

According to the NASDAQ definition, Mr. Borkowski is not an independent director because he is also an executive officer of the Company.

Review, Approval or Ratification of Transactions with Related Persons

The Company is a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and is not required to provide the information under this item.

LEGAL PROCEEDINGS

The Company knows of no material, existing or pending legal proceedings against the Company, nor is the Company involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of the Company’s directors, officers or any affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to its interest.

MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Common Stock

The Company’s common stock is currently quoted on the OTCQB. The Company’s common stock has been quoted on the OTCQB since February 3, 2011, under the symbol “PRTN.QB.”  Because the Company is quoted on the OTCQB, its securities may be less liquid, receive less coverage by security analysts and news media, and generate lower prices than might otherwise be obtained if they were listed on a national securities exchange.
 
Record Holders

        As of the date of this Report, an aggregate of 443,000,686 shares of the Company’s common stock were issued and outstanding and were owned by approximately 60 holders of record.

Re-Purchase of Equity Securities

None.
 
 
 
 
Dividends

The Company has not paid any cash dividends on its common stock since inception and presently anticipate that all earnings, if any, will be retained for development of its business and that no dividends on its common stock will be declared in the foreseeable future. Any future dividends will be subject to the discretion of its Board of Directors and will depend upon, among other things, future earnings, operating and financial condition, capital requirements, general business conditions and other pertinent facts. Therefore, there can be no assurance that any dividends on its common stock will be paid in the future.

DESCRIPTION OF THE REGISTRANT’S SECURITIES

Pursuant to the Company’s Articles of Incorporation and amendment(s) thereto, the aggregate number of common shares which this Company has authority to issue is six hundred fifty million (650,000,000) shares of Common Stock, par value $0.001 per share.

The Company refers you to its Articles of Incorporation, any amendments thereto, Bylaws, and the applicable provisions of the Nevada General Corporations Law for a more complete description of the rights and liabilities of holders of its securities.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

Nevada Revised Statutes provide, in general, that a corporation incorporated under the laws of the State of Nevada, such as the Company, may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (other than a derivative action by or in the right of the corporation) by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful. In the case of a derivative action, a Nevada corporation may indemnify any such person against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification will be made in respect of any claim, issue or matter as to which such person will have been adjudged to be liable to the corporation unless and only to the extent that the State of Nevada or any other court in which such action was brought determines such person is fairly and reasonably entitled to indemnity for such expenses.
 
Regarding indemnification for liabilities arising under the Securities Act of 1933 which may be permitted for directors or officers pursuant to the foregoing provisions, the Company is  informed that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy, as expressed in the Act and is therefore unenforceable.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Company’s financial statements and notes thereto are hereby incorporated by this reference to the Company’s most recent Annual Report for the fiscal year ended January 31, 2012, and most recent Quarterly Report for the quarterly period ended July 31, 2012, as filed with the Securities and Exchange Commission on April 30, 2012 and September 19, 2012, respectively.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
 
On October 31, 2012, the Board of Directors of Pristine Solutions, Inc. (the “Company”) dismissed GBH CPAs, PC (“GBH”, “Former Accountant”), the Company’s former independent registered public accounting firm. On November 1, 2012, the Board of Directors of the Company selected Stan Jeong Ha Lee, CPA (the “New Accountant”) to serve as the Company’s auditor for the fiscal year ended January 31, 2013.
 
During the period of GBH’s engagement with the Company and through October 31, 2012, there have been no disagreements with the Former Accountant (as defined in Item 304(a)(1)(iv) of Regulation S-K) on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of the Former Accountant, would have caused them to make reference thereto in their report on financial statements for any period.

During the period of the Former Accountant’s engagement and through October 31, 2012, there were no reportable events as defined in Item 304(a)(1)(iv) of Regulation S-K.

During the period of the Former Accountant’s engagement and through October 31, 2012, neither the Registrant nor anyone on its behalf has consulted with the New Accountant regarding either:

·       
the application of accounting principles to specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on the Registrant’s financial statements, and neither was a written report provided to the Registrant nor was oral advice provided that the New Accountant concluded was an important factor considered by the Registrant in reaching a decision as to an accounting, auditing, or financial reporting issue; or

 
 
 
·       
any matter that was either the subject of a disagreement or a reportable event, as each term is defined in Items 304(a)(1)(iv) or (v) of Regulation S-K, respectively.

The Company has provided GBH a copy of the foregoing disclosures. Attached hereto as Exhibit 16.1 is a copy of the letter from GBH dated November 2, 2012, stating its agreement with such statements.

On November 1, 2012, with the prior approval of its Board of Directors, the Registrant engaged the New Accountant as its independent registered public accounting firm.  

The Company has not consulted with the New Accountant regarding the application of accounting principles to a specified transaction or the type of audit opinion that might be rendered on the Company's financial statements during the two most recent fiscal years through present.
 
ITEM 9.01                         FINANCIAL STATEMENTS AND EXHIBITS.
 
FINANCIAL INFORMATION
 
INDEX TO FINANCIAL STATEMENTS

 
Page
PRO FORMA FINANCIAL INFORMATION :
 
Unaudited Condensed Consolidated Pro Forma Financial Information of Pristine Solutions, Inc.
 
Summary of Transaction
F-2
Condensed Consolidated Pro Forma Balance Sheets as of July 31, 2012
F-3
Condensed Consolidated Pro Forma Statement of Income for the six months ended July 31, 2012
F-4
Condensed Consolidated Pro Forma Balance Sheets as of January 31, 2012
F-5
Condensed Consolidated Pro Forma Statement of Income for the year ended January, 31, 2012
F-6
   
FINANCIAL INFORMATION OF EATON SCIENTIFIC SYSTEMS LTD
 
Interim Financial Statements of Eaton Scientific Systems, Inc:
 
Unaudited Balance Sheets as of June 30, 2012 and December 31, 2011
F-7
Unaudited Statements of Income for three and six months ended June 30,  2012 and 2011
F-8
Unaudited Statements of Cash Flows for six months ended June 30, 2012 and 2011
F-9
   
Audited Financial Statements of Eaton Scientific Systems, Inc.
 
Report of Independent Registered Public Accounting Firm
F-10
Balance Sheets as of December 31, 2011 and 2010
F-11
Statement of Income for the years ended December 31, 2011 and 2010
F-12
Statement of Cash Flows for the years ended December 31, 2011 and 2010
F-13
Statement of Stockholders’ Equity for the years ended December 31, 2011 and 2010
F-14
   
Notes to the Financial Statements of Eaton Scientific Systems, Inc.
 
Notes to the unaudited Financial Statements for the six months ended June 30, 2012, and the audited Financial Statements for the years ended December 31, 2011 and 2010
F-15
   

F-1
 

 
 
 


PRO FORMA FINANCIAL INFORMATION

Summary of Transaction

On August 23, 2012, the Company and its controlling stockholders (the “Controlling Stockholders”) entered into a Share Exchange Agreement (the “Share Exchange”) with Eaton Scientific Systems, Ltd., a Nevada corporation (“ESSL”) and the shareholders of ESSL (the “ESSL Shareholders”), whereby the Company acquired 25,000,000 shares of common stock (100%) of ESSL (the “ESSL Stock”) from the ESSL Shareholders.  In exchange for the ESSL Stock, the Company issued 25,000,000 shares of its common stock to the ESSL Shareholders.  

The foregoing summary description of the terms of the Share Exchange may not contain all information that is of interest to the reader. For further information regarding specific terms and conditions of the Share Exchange, reference is made to such agreement filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on August 24, 2012, and is incorporated herein by this reference.

The Company’s Chief Executive Officer, Mr. Michael J. Borkowski, and the Company’s controlling shareholder and former President, Ms. Christine Buchanan-McKenzie, entered into a Common Stock Purchase Agreement, whereby Mr. Borkowski would purchase one hundred (100%) percent of the Company’s common shares owned by Mrs. Buchanan-McKenzie, or 240,000,000 shares, at par value $.0001, representing approximately 54.1% of the Company’s total issued and outstanding shares.  The Common Stock Purchase Agreement, and subsequent transaction closing, was completed on October 22, 2012.  On October 23, 2012, the Common Stock Purchase Agreement was finalized, and a Change in Control of the Registrant took place.


Pro Forma Financial Information

July 31, 2012

The unaudited condensed consolidated pro forma financial information of Pristine Solutions, Inc. (“PSI”) as of July 31, 2012, gives effect to the Share Exchange as if the transaction had occurred on July 31, 2012.

The unaudited condensed consolidated pro forma balance sheet gives effect to the transaction as of July 31, 2012. The unaudited condensed consolidated pro forma statement of operations for the six month ended July 31, 2012, gives effect to the transaction as if it had occurred February 1, 2011.

The unaudited condensed consolidated pro forma financial information has been included as required by the rules of the Securities and Exchange Commission and is presented for illustrative purposes only. Such information is not necessarily indicative of the operating results or financial position that would have occurred had the transaction taken place or had occurred on the earliest date of February 1, 2011.

January 31, 2012

The unaudited condensed consolidated pro forma financial information of PSI as of January 31, 2012 gives effect to the Share Exchange as if the transaction had occurred on January 31, 2012.

The unaudited condensed consolidated pro forma balance sheet gives effect to the transaction as of January 31, 2012. The unaudited condensed consolidated pro forma statement of operations for the fiscal year ended January 31, 2012, gives effect to the transaction as if it had occurred February 1, 2011.

he unaudited condensed consolidated pro forma financial information has been included as required by the rules of the Securities and Exchange Commission and is presented for illustrative purposes only. Such information is not necessarily indicative of the operating results or financial position that would have occurred had the transaction taken place or had occurred on the earliest date of February 1, 2011.

 
 
 

CONDENSED CONSOLIDATED PRO FORMA FINANCIAL INFORMATION
FOR PRISTINE SOLUTIONS, INC.
AS OF AND FOR THE SIX MONTHS ENDED JULY 31, 2012
 
PRISTINE SOLUTIONS, INC.
CONDENSED CONSOLIDATED PRO FORMA BALANCE SHEETS
As of July 31, 2012
 
   
PSI
   
 
 
 
   
Pro Forma
   
   
Historical
   
ESSL
 
Pro Forma
   
Consolidated
   
   
July 31, 2012
   
Consolidation
 
Adjustments
   
July 31, 2012
   
   
(unaudited)
                   
ASSETS
                       
Current Assets
  $ 6,480     $ 392    $       $ 6,872    
Property and equipment, net
    5,048       -           5,048    
Intangible assets, net
    -       24,006           24,006    
Goodwill
                  159,710 [5]     159,710    
TOTAL ASSETS
  $ 11,528     $ 24,398   $ -     $ 195,636    
                                 
LIABILIT IES AND STOCKHOLDERS' DEFICIT                                
                                 
Current Liabilities
  $ 57,627     $ 1,108   $ -     $ 58,735    
Long-term liabilities
    -       183,000             183,000    
Total Liabilities
    57,627       184,108     -       241,735    
                                 
Stockholders' Deficit
                               
Preferred Stock
    - [1]     -     -       -    
Common stock
    41,800   [2]     100,000 [3]   (75,000 ) [4]     44,300 [9]  
                    2,500 [6]          
                    (25,000 ) [7]          
                                 
Additional paid in capital
    8,700       (6,250 )   75,000 [4]     6,200    
                    (68,750 ) [5]          
                    (2,500 ) [6]          
Accumulated Deficit
    (96,599 )     (253,460 )   253,460 [6]     (96,599 )  
Total Stockholders' Deficit
    (46,099 )     (159,710 )   159,710       (46,099 )  
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
  $ 11,528     $ 24,398   $ 159,710     $ 195,636    
 
[1]
50,000,000 shares authorized, $.001 par, none issued
[2]
650,000,000 shares authorized , $.0001 par, 418,000,686 shares issued and outstanding
[3]
100,000,000 shares authorized, $.001 par, 100,000,000 shares issued and outstanding
[4]
ESSL Reverse stock split - 4 to 1 = 100,000,000 shares split to 25,000,000 shares
[5]
Elimination of subsidiary equity and recording of goodwill due to business combination
[6]
Issuance of PSI shares to ESSL Shareholders - 25,000,000 shares x $.0001 par value = $2,500
[7]
Issuance of ESSL shares to PSI Shareholders - 25,000,000 shares x $.001 par value = $25,000
[8]
Total PSI shares issued and outstanding, 443,000,618 x par $.0001 = $44,300

F-3


 
 
 


PRISTINE SOLUTIONS, INC.
CONDENSED CONSOLIDATED PRO FORMA STATEMENT OF OPERATIONS
As of and for the Six Months Ended July 31, 2012
(unaudited)
 
 
   
   
PSI
   
ESSL
         
Pro Forma
 
   
Historical
   
Consolidation
   
Pro Forma
   
Consolidated
 
   
July 31, 2012
   
June 30, 2012
   
Adjustments
   
July 31, 2012
 
   
 
   
 
   
 
   
 
 
Gross Profit
  $ -     $ -      $       $ -  
                               
General and administrative expenses
    19,429       27,939       -       19,429  
                                 
Operating income (loss)
    (19,429 )     (27,939 )     -       (19,429 )
                                 
Other income (expense)
    407       -       -       407  
                                 
Net (loss)
  $ (19,022 )   $ (27,939 )   $ -     $ (19,022 )
                                 
                                 
Net (loss) per common share - basic and diluted
  $ (0.00 )                   $ (0.00 )
                                 
Weighted average common shares outstanding -
 basic and diluted
    418,000,686                       443,000,686  
                                 

F-4


 
27
 


CONDENSED CONSOLIDATED PRO FORMA FINANCIAL INFORMATION
FOR PRISTINE SOLUTIONS, INC.
AS OF AND FOR THE YEAR ENDED JANUARY 31, 2012
 
PRISTINE SOLUTIONS, INC.
CONDENSED CONSOLIDATED PRO FORMA BALANCE SHEETS
As of January 31, 2012
 
   
PSI
   
ESSL
   
 
   
Pro Forma
   
   
Historical
   
Consolidation
   
Pro Forma
   
Consolidated
   
   
FYE 01/31/12
   
YE 12/31/2011
   
Adjustments
   
FYE 01/31/12
   
   
(unaudited)
                     
ASSETS
                         
         Current Assets
  $ 6,681     $ 388      $       $ 7,069    
         Property and equipment, net
    5,699       -             5,699    
         Intangible assets, net
    -       25,030             25,030    
         TOTAL ASSETS
  $ 12,380     $ 25,418     $ -     $ 37,798    
                                   
                                   
         Current Liabilities
  $ 39,457     $ 2,427     $       $ 41,884    
         Long-term liabilities
    -       160,400               160,400    
         Total Liabilities
    39,457       162,827       -       202,284    
                                   
         Stockholders' Deficit
                                 
         Preferred Stock
    - [1]     -       -       -    
         Common stock
    41,800 [2]     94,363 [3]     5,637 [4]     44,300   [9]  
                      (75,000 ) [5]          
                      2,500 [7]          
                      (25,000 ) [8]          
                                   
         Additional paid in capital
    8,700       (6,250 )     75,000 [5]     6,200    
                      (68,750 ) [6]          
                      (2,500 ) [7]          
                                   
         Subscriptions receivable
                    (5,637 ) [4]     -    
                      5,637 [8]          
         Goodwill
                    (137,409 ) [6]     (137,409 )  
         Accumulated Deficit
    (77,577 )     (225,522 )     225,522 [6]     (77,577 )  
         Total Stockholders' Deficit
    (27,077 )     (137,409 )     -       (164,486 )  
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
  $ 12,380     $ 25,418     $ -     $ 37,798    
                                   
 
    [1]
50,000,000 shares authorized, $.001 par, none issued
 
    [2]
650,000,000 shares authorized , $.0001 par, 418,000,686 shares issued and outstanding
 
    [3]
100,000,000 shares authorized, $.001 par, 94,362,500 shares issued and outstanding
 
    [4]
ESSL Additional shares issued prior to Share Exchange - 5,637,500 shares @ $.001 par = $5,637
 
    [5]
ESSL Reverse stock split - 4 to 1 = 100,000,000 shares split to 25,000,000 shares
 
    [6]
Elimination of subsidiary equity due to consolidation
 
    [7]
Issuance of PSI shares to ESSL Shareholders - 25,000,000 shares x $.0001 par value = $2,500
 
    [8]
Issuance of ESSL shares to PSI Shareholders - 25,000,000 shares x $.001 par value = $25,000
 
 
 
Total shares issued and outstanding, 443,000,618 x par $.0001 = $44,300
 

F-5


 
28
 

 
PRISTINE SOLUTIONS, INC.
CONDENSED CONSOLIDATED PRO FORMA STATEMENT OF OPERATIONS
As of and for the Year Ended January 31, 2012
(unaudited)
 
 
   
PSI
   
ESSL
   
 
   
Pro Forma
 
   
Audited Historical
   
Audited Consolidation
   
Pro Forma
   
Consolidated
 
   
January 31, 2012
   
December 31, 2011
   
Adjustments
   
January 31, 2012
 
   
 
   
 
   
 
   
 
 
Gross Profit
  $ -     $ -     $       $ -  
                               
General and administrative expenses
    10,090       51,505       -       61,595  
                                 
Operating income (loss)
    (10,090 )     (51,505 )     -       (61,595 )
                                 
Other income (expense)
    (385 )     -       -       (385 )
                                 
Net (loss)
  $ (10,475 )   $ (51,505 )   $ -     $ (61,980 )
                                 
                                 
Net (loss) per common share - basic and diluted
  $ (0.00 )                   $ (0.00 )
                                 
Weighted average common shares outstanding -
 basic and diluted
    418,000,686                       443,000,686  
                                 
 
F-6

 
29
 


UNAUDITED INTERIM FINANCIAL STATEMENTS
FOR EATON SCIENTIFIC SYSTEMS, INC.
AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 2012
 
EATON SCIENTIFIC SYSTEMS, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
 
   
June 30,
   
December 31,
 
   
2012
   
2011
 
ASSETS
 
(unaudited)
   
(audited)
 
Current Assets
           
Cash & cash equivalents
  $ 392     $ 388  
Total Current Assets
    392       388  
                 
Intangible Assets, net of amortization
    24,006       25,030  
                 
TOTAL ASSETS
  $ 24,398     $ 25,418  
                 
                 
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
               
                 
Current Liabilities
               
Accounts payable and accrued expenses
  $ 83     $ 1,402  
Related party payables
    1,025       1,025  
Total Current Liabilities
    1,108       2,427  
                 
Related party loans
    183,000       160,400  
                 
Total Liabilities
    184,108       162,827  
                 
STOCKHOLDERS' (DEFICIT)
               
Common stock, $0.001 par value,100,000,000 shares authorized,
100,000,000 and 94,362,500  issued and outstanding as of June 30,
2012 and December 31, 2011, respectively
    100,000       94,363  
Additional paid in capital
    (6,250 )     (6,250 )
Accumulated Deficit
    (253,460 )     (225,522 )
Total Stockholders' (Deficit)
  $ (159,710 )   $ (137,409 )
                 
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT)
  $ 24,398     $ 25,418  
 
                 
See Notes to Financial Statements
 

F-7


 
30
 


EATON SCIENTIFIC SYSTEMS, LTD.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
 
               
Cumulative From
 
               
01/31/2006
 
   
For the six months ended
   
(Inception) to
 
   
06/30/2012
   
06/30/2011
   
06/30/2012
 
                   
Gross Profit
  $ -       -     $ -  
                         
General and administrative expenses
    26,734       21,096       241,230  
                         
Operating (loss)
    (26,734 )     (21,096 )     (241,230 )
                         
Other Expenses
                       
Depreciatioon & amortizaiton
    1,205       1,157       12,230  
Total Other Expenses
    1,205       1,157       12,230  
                         
Net (loss)
  $ (27,939 )     (22,253 )   $ (253,460 )
                         
                         
Net (loss) per common share - basic and diluted
  $ (0.00 )     (0.00 )        
                         
Weighted average common shares outstanding - basic and diluted
    100,000,000       74,412,500          
                         
                         
See Notes to Financial Statements
 

F-8


 
31
 


EATON SCIENTIFIC SYSTEMS, LTD.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
 
   
 
   
Cumulative
 
               
From 01/31/2006
 
   
For the six months ended
   
(Inception) to
 
   
06/30/2012
   
06/30/2011
   
06/30/2012
 
                   
Cash Flow from operations:
                 
Net loss
  $ (27,939 )   $ (22,253 )   $ (253,460 )
Depreciation
                    -  
Expenses converted to related party loans
    21,000       21,000       168,000  
Amortization of intangible assets
    1,205       1,157       12,230  
Stock compensation
    5,638       -       87,500  
Adjustments to reconcile net (loss) to net cash (used in)
                       
operating activities:
                       
Changes in operating assets and liabilities:
                       
Increase (decrease) in accounts payable and accrued expenses
    (1,319 )     (1,272 )     83  
Increase (decrease) in related party payables
    -       (25 )     1,025  
Net cash (used in) operating activities
    (1,415 )     (1,393 )     15,378  
                         
Cash Flow from investing  activities:
                       
(Increase) in Intangible Assets
    (180 )     (228 )     (36,236 )
Net cash (used in) investing activities
    (180 )     (228 )     (36,236 )
                         
Cash Flow from financing activities:
                       
Proceeds from related party loans
    1,600       1,500       15,000  
Issuance of common stock
                    12,500  
Increase (decrease) in paid in capital related to founders shares
                    (6,250 )
Net cash provided by financing activities
    1,600       1,500       21,250  
                         
Increase in cash
    5       (121 )     392  
                         
Cash - beginning of period
    388       381       -  
                         
Cash - end of period
  $ 393       260     $ 392  
                         
NONCASH ACTIVITIES
                       
Stock issued for services
  $ 5,637       -     $ 71,750  
Stock issued for reimbursed expenses
  $ -       -     $ 19,500  
Conversion of related party payable to Note Payable
  $ 21,000       21,000     $ 168,000  
                         
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
                       
                         
Interest paid
  $ -       -     $ -  
Income taxes paid
  $ -       -     $ -  
                         
           
See Notes to Financial Statements
 

F-9


 
32
 


AUDITED FINANCIAL STATEMENTS
FOR EATON SCIENTIFIC SYSTEMS, INC.
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010
 

Stan J.H. Lee, CPA
2160 North Central Rd.  Suite 209* Fort Lee *NJ 07024
P.O. Box 436402 *San Diego * CA 92143-9402
619-623-7799 *Fax 619-564-3408 * E-mail) stan2u@gmail.com

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders
Eaton Scientific Systems, Inc.

We have audited the accompanying balance sheet of Eaton Scientific Systems, Inc. (”the Company”) as of December 31, 2011 and 2010 and the related statements  of operations, shareholders’ equity (deficit) 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 audit.

We conducted our audit 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 its internal control over financial reporting.  An  audit includes consideration of internal control over financial  reporting  as a  basis  for  designing  audit  procedures  that  are appropriate  in  the  circumstances, but  not  for the purpose of expressing an opinion  on  the  effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit 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 audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above presently fairly, in all material respects, the financial position of Eaton Scientific Systems, Inc. as of December 31, 2011 and 2010, and the results of its operation and its cash flows for the years aforementioned in conformity with the U.S. generally accepted accounting principles.

The financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in the notes to the financial statements, the Company lacks liquidity and has accumulated losses from operations, which raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.



/s/ Stan J.H.Lee, CPA
----------------------------------

Stan J.H. Lee, CPA
September 28, 2012
Fort Lee, NJ, 07024

F-10




 
33
 



EATON SCIENTIFIC SYSTEMS, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
 
   
December 31,
   
December 31,
 
   
2011
   
2010
 
ASSETS
           
Current Assets
           
Cash & cash equivalents
  $ 388     $ 381  
Total Current Assets
    388       381  
                 
Intangible Assets, net of amortization
    25,030       24,646  
                 
TOTAL ASSETS
  $ 25,418     $ 25,027  
                 
                 
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
               
                 
Current Liabilities
               
Accounts payable and accrued expenses
  $ 1,402     $ 203  
Related party payables
    1,025       990  
Total Current Liabilities
    2,427       1,193  
                 
Related party loans
    160,400       116,600  
                 
Total Liabilities
    162,827       117,793  
                 
STOCKHOLDERS' (DEFICIT)
               
Common stock, $0.001 par value,100,000,000 shares authorized,  94,362,500 and 87,500,000 issued and outstanding as of December 31, 2011 and 2010, respectively
    94,363       87,500  
Additional paid in capital
    (6,250 )     (6,250 )
Accumulated Deficit
    (225,522 )     (174,016 )
Total Stockholders' (Deficit)
  $ (137,409 )   $ (92,766 )
                 
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT)
  $ 25,418     $ 25,027  
                 
                 
                 
See Notes to Financial Statements
 

F-11



 
34
 


EATON SCIENTIFIC SYSTEMS, LTD.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
 
               
Cumulative From
 
               
01/31/2006
 
   
For the year ended
   
(Inception) to
 
   
12/31/2011
   
12/31/2010
   
12/31/2011
 
                   
Gross Profit
  $ -     $ -     $ -  
                         
General and administrative expenses
    49,191       48,845       214,496  
                         
Operating (loss)
    (49,191 )     (48,845 )     (214,496 )
                         
Other Expenses
                       
Depreciation & amortization
    2,314       2,154       11,025  
Total Other Expenses
    2,314       2,154       11,025  
                         
Net (loss)
  $ (51,505 )   $ (50,999 )   $ (225,521 )
                         
                         
Net (loss) per common share - basic and diluted
  $ (0.00 )   $ (0.00 )        
                         
Weighted average common shares outstanding – basic and diluted
    94,362,500       87,500,000          
                         
                         
See Notes to Financial Statements
 

F-12


 
35
 



EATON SCIENTIFIC SYSTEMS, LTD.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
 
               
Cumulative
 
               
From 01/31/2006
 
   
For the year ended
   
(Inception) to
 
   
12/31/2011
   
12/31/2010
   
12/31/2011
 
                   
Cash Flow from operations:
                 
Net loss
  $ (51,505 )   $ (50,999 )   $ (225,521 )
Depreciation
                    -  
Expenses converted to related party loans
    42,000       42,000       147,000  
Amortization of intangible assets
    2,314       2,154       11,025  
Stock compensation
    6,863       26,175       81,862  
Adjustments to reconcile net (loss) to net cash (used in)
                       
operating activities:
                       
Changes in operating assets and liabilities:
                       
Increase (decrease) in accounts payable and accrued expenses
    1,199       92       1,402  
Increase (decrease) in related party payables
    35       (17,500 )     1,025  
Net cash (used in) operating activities
    906       1,922       16,793  
                         
Cash Flow from investing  activities:
                       
(Increase) in Intangible Assets
    (2,699 )     (2,092 )     (36,056 )
Net cash (used in) investing activities
    (2,699 )     (2,092 )     (36,056 )
                         
Cash Flow from financing activities:
                    -  
Proceeds from related party loans
    1,800       -       13,400  
Issuance of common stock
                    12,500  
Increase (decrease) in paid in capital related to founders shares
                    (6,250 )
Net cash provided by financing activities
    1,800       -       19,650  
                         
Increase in cash
    7       (170 )     388  
                         
Cash - beginning of period
    381       551       -  
                      -  
Cash - end of period
  $ 388     $ 381     $ 388  
                         
NONCASH ACTIVITIES
                       
Stock issued for services
  $ 6,863     $ 6,675     $ 66,113  
Stock issued for reimbursed expenses
  $       $ 19,500     $ 19,500  
Conversion of related party payable to Note Payable
  $ 42,000     $ 42,000     $ 147,000  
                      -  
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
                       
Interest paid
  $ -     $ -     $ -  
Income taxes paid
  $ -     $ -     $ -  
                         
                         
See Notes to Financial Statements
 

F-13


 
36
 


EATON SCIENTIFIC SYSTEMS, LTD.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' (DEFICIT)
PERIOD FROM JANUARY 31, 2006 (INCEPTION) TO DECEMBER 31. 2011
 
                           
(DEFICIT)
       
                           
ACCUMULATED
       
                           
DURING THE
       
   
COMMON STOCK
   
PAID IN
   
SUBSCRIPTIONS
   
EXPLORATION
       
   
SHARES
   
AMOUNT
   
CAPITAL
   
RECEIVABLE
   
STAGE
   
TOTAL
 
                                     
Balance, January 31, 2006 (date of inception)
    -     $ -     $ -     $ -     $ -     $ -  
Issuance of Founders shares of common stock @ $.0005,
March 9, 2006
    12,500,000       12,500       (6,250 )     (6,250 )     -       -  
Subscriptions received
    -       -       -       2,500       -       2,500  
Issuance of common stock for services, December, 2006
    33,000,000       33,000       -       -       -       33,000  
Net loss
            -       -       -       (33,907 )     (33,907 )
Balance, December 31, 2006
    45,500,000       45,500       (6,250 )     (3,750 )     (33,907 )     1,593  
Issuance of common stock for services, December, 2007
    5,500,000       5,500       -               -       5,500  
Subscriptions received for services
    -       -       -       3,750       -       3,750  
Net loss
    -       -       -       -       (10,969 )     (10,969 )
Balance, December 31, 2007
    51,000,000       51,000       (6,250 )     -       (44,876 )     (126 )
Issuance of common stock for services, December, 2008
    5,000,000       5,000       -       -       -       5,000  
Net loss
    -       -       -       -       (28,572 )     (28,572 )
Balance, December 31, 2008
    56,000,000       56,000       (6,250 )     -       (73,448 )     (23,698 )
Issuance of common stock for services, December, 2009
    5,325,000       5,325       -       -       -       5,325  
Net loss
    -       -       -       -       (49,569 )     (49,569 )
Balance, December 31, 2009
    61,325,000       61,325       (6,250 )     -       (123,017 )     (67,942 )
Issuance of common stock for services, December, 2010
    6,675,000       6,675       -       -       -       6,675  
Issuance of common stock for expenses, December, 2010
    19,500,000       19,500       -       -       -       19,500  
Net loss
    -       -       -       -       (50,999 )     (50,999 )
Balance, December 31, 2010
    87,500,000       87,500       (6,250 )     -       (174,016 )     (92,766 )
Issuance of common stock for services, December, 2011
    6,862,500       6,863       -       -               6,863  
Net loss
    -       -       -       -       (51,505 )     (51,505 )
Balance, December 31, 2011
    94,362,500     $ 94,363     $ (6,250 )   $ -     $ (225,521 )   $ (137,409 )
                                                 
See Notes to Financial Statements
 

 
F-14


 
37
 


EATON SCIENTIFIC SYSTEMS, LTD.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2010 and 2011 (audited)
And June 30, 2012 (unaudited)

NOTE 1. OVERVIEW

Eaton Scientific Systems, Ltd. (the “Company”, “ESSL”) was incorporated on January 31, 2006 in the state of Nevada.  The Company was formed to serve as a vehicle for the development, research, capitalization and marketing of certain patent-pending pharmaceuticals.  The Company intends to execute the necessary regulatory process dictated by the Federal Drug Administration (FDA) in order to obtain a 510K clearance (pre-market notification) and FDA approval.

The Company is a development stage company as defined by ASC 915-10, “Accounting and Reporting by Development Stage Enterprises”. A development stage enterprise is one in which planned principal operations have not commenced or if its operations have commenced, there has been no significant revenues there from. At June 30, 2012, the Company has not yet commenced normal operations.  All activity from January 31, 2006 (date of inception) through June 30, 2012 relates to the Company’s formation and the pending registration statement described below.

UNAUDITED INFORMATION

The balance sheet of Eaton Scientific Systems, Ltd. (the “Company”) as of June 30, 2012, the statement of operations, and the statement of cash flows for the 6-months ended June 30, 2012 have not been audited.  However, in the opinion of management, such information includes all adjustments (consisting only of normal recurring adjustments) which are necessary to properly reflect the financial position of the Company as of June 30, 2012, and the results of operations for the 6 -months ended June 30, 2012.

Certain information and notes normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted, although management believes that the disclosures are adequate to make the information presented not misleading.  Interim period results are not necessarily indicative of the results to be achieved for an entire year.  These financial statements should be read in conjunction with the financial statements and notes to financial statements included in the Company’s audited financial statements as of December 31, 2011 and calendar year then ended.

GOING CONCERN CONSIDERATION

These financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and the satisfaction of liabilities in the normal course of business.  The Company has incurred cumulative net losses of $ 253,460 since its inception and requires capital for its contemplated operation and marketing activities to take place.  The Company's ability to raise additional capital through the future issuances of common stock is unknown. The obtainment of additional financing, the successful development of the Company's contemplated plan of operations, and its transition, ultimately, to the attainment of profitable operations are necessary for the Company to continue operations.  The ability to successfully resolve these factors raise substantial doubt about the Company's ability to continue as a going concern.

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

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies is presented to assist in understanding the Company’s financial statements.  These accounting policies conform to accounting principles, generally accepted in the United States of America, and have been consistently applied in the preparation of the financial statements.

Development Stage Company
The Company is a development stage company as defined by ASC 915-10-05, “Development Stage Entity”.  The Company is still devoting substantially all of its efforts on development and research. and its planned principal operations have not commenced.  All losses accumulated, since inception, have been considered as part of the Company’s development stage activities.

 
38
 
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, liabilities, disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from these estimates.

Fiscal Year End
The Company has a fiscal year ending on December 31.

Cash and Cash Equivalents
The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents.

Fair Value of Financial Instruments
The carrying amounts reported in the balance sheet for cash, accounts payable and accrued expenses approximate fair value based on the short-term maturity of these instruments.

Patent Costs
Certain costs incurred in connection with the development of pending patents are capitalized and amortized over the shorter of the economic or legal life of the patent.  During the six months ended June 30, 2012 and the years ended December 31, 2011 and 2010, respectively, patent costs in the amount of $180, $2,699 and $2,092 were capitalized. As of June 30, 2012, December 31, 2011 and 2010, respectively, a total of $36,236, $36,055 and $33,357 in patent costs were capitalized.

Earnings (Loss) per Share
Basic earnings (loss) per share is computed by dividing net income, or loss, by the weighted average number of shares of common stock outstanding for the period.  Diluted earnings (loss) per share is computed by dividing net income, or loss, by the weighted average number of shares of both common and preferred stock outstanding for the period.

New Accounting Standards
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the accompanying financial statements.

NOTE 3. INTANGIBLE ASSETS

Intangible Assets consists of the following:

   
June 30, 2012
   
December 31, 2011
   
December 31, 2010
 
Patent Costs
  $ 36,236     $ 36,055     $ 33,357  
Accumulated Amortization
    (12,230 )     (11,025 )     (8,711 )
Intangible Assets, net
  $ 24,006     $ 25,030     $ 24,646  

Amortization expense totaled $1,205, $2,314 and $2,154 for the six months ended June 30, 2012 and the years ended December 31, 2011 and 2010, respectively.

NOTE 4. DUE TO RELATED PARTY

As at June 30, 2012, December 31, 2011, and December 31, 2010, related parties are due a total of $184,024, 161,424 and $117,590, respectively, which is comprised of cash loans to the Company of $15,000, $13,400 and $11,600, respectively, unpaid compensation of $168,000, $147,000 and $105,000, respectively, and unpaid reimbursable expenses of $1,024, $1,024 and $990, respectively.  During the six months ended June 30, 2012 and the years ended December 31, 2011 and 2010, cash loans to the Company increased by $1,600, $1,800, and $0, respectively, and unpaid compensation increased by $21,000, $42,000 and $42,000, respectively.

The Company’s cash loans are represented by Convertible Notes Payable to Huntington Chase, Ltd. and Huntington Chase Financial Group, LLC.  The Notes are unsecured, interest-free, and are due upon demand.

The Company has converted all accrued compensation into a Convertible Note Payable to Huntington Chase Financial Group, LLC, and its total principal balance has been modified accordingly to $168,000, $147,000 and $105,000 at June 30, 2012, December 31, 2011 and December 31, 2010, respectively.  The Note is unsecured, interest free and is payable upon demand.  .
.
 
39
 
NOTE 5. COMMITMENTS AND CONTINGENCIES
 
On July 1, 2008, the Company entered into a Consulting Agreement with Huntington Chase Financial Group, Ltd., a Nevada corporation, (“HCFG”) for the consulting services of Edward W. Withrow III, a member of the Company’s Board of Directors.  The Consulting Agreement is for an initial term of 4 years, and provides for monthly compensation in the amount of $3,500.
 
NOTE 6. STOCKHOLDERS EQUITY

The total number of authorized shares of common stock that may be issued by the Company is 100,000,000 with a par value of $0.001 per share.

On March 9, 2006, the Company issued 12,500,000 common shares to its founders at a price of $.0005 per share for cash in the amount of $6,250.  As a result, paid in capital was reduced by $6,250 due to the difference in the par value of the stock of $.001 and the purchase price of the shares.

On December 31, 2006, the Company issued 33,000,000 shares of its common stock to two of its directors in exchange for formational services provided to the Company valued at $33,000.

On December 31, 2007, the Company issued 5,500,000 shares of its common stock in exchange for services valued at $5,500.

On December 31, 2008, the Company issued 5,000,000 shares of its common stock in exchange for services valued at $5,000.

On December 31, 2009, the Company issued 5,325,000 shares of its common stock in exchange for services valued at $5,325.

On December 31, 2010, the Company issued 6,675,000 shares of its common stock in exchange for services valued at $6,675.

On December 31, 2010, the Company issued 19,500,000 shares of its common stock in exchange for expenses paid on behalf of the Company in the amount of $19,500.

On December 31, 2011, the Company issued 6,862,500 shares of its common stock in exchange for services valued at $6,863.

On June 30, 2012, the Company issued 5,637,500 shares of its common stock in exchange for services valued at $5,638.

As at June 30, 2012 and December 31, 2011 the Company has 100,000,000 and 94,362,400 common shares issued and outstanding, respectively.

NOTE 7.  SUBSEQUENT EVENTS

The Company has evaluated events and transactions that occurred between June 30, 2012 and the date the financial statements were available for issue, for possible disclosure or recognition in the financial statements.  The Company has determined that there were no such events or transactions that warrant disclosure or recognition in the financial statements, with the exception of the following:
 
 
On August 15, 2012, the Company effectuated a 4-to-1 reverse split (the “Split”), whereby one (1) share of the Company’s common stock would be issued for every four (4) shares held by each shareholder.  As a result of the Split, the common shares outstanding were reduced by 75,000,000; its related par value of $75,000 was reclassed to paid in capital; and a total of 25,000,000 shares of the its common stock remained issued and outstanding.

On August 23, 2012, the Company and its shareholders (the “ESSL Shareholders”) entered into a Share Exchange Agreement (the “Share Exchange”) with Pristine Solutions, Inc., a Nevada corporation (“PSI”) and its controlling stockholders (the “Controlling Stockholders”), whereby PSI acquired 25,000,000 (100%) shares of the Company’s common stock (the “ESSL Stock”) from the ESSL Shareholders.  In exchange for the ESSL Stock, PSI issued 25,000,000 shares of its common stock to the ESSL Shareholders.  

On September 12, 2012, the Company issued a Convertible Promissory Note in the amount of $500,000 to Huntington Chase Financial Group, Ltd., a related party.  The Convertible Note is interest-free, is payable within 2 years, and contains a conversion feature which allows for the principal balance to be converted into common stock of the Company.


* * * * *

F-15
 
 
40
 


EXHIBITS.


Exhibit
Number
Exhibit Description
(2)
Plan of Purchase, Sale, Reorganization, Arrangement, Liquidation or Succession
2.1
Share Exchange Agreement between Pristine Solutions, Inc. and Eaton Scientific Systems, Ltd. dated August 23, 2012 (incorporated by reference to our Current Report on Form 8-K filed August 24, 2012)
(3)
(i) Articles of Incorporation; and (ii) Bylaws
3.1
Articles of Incorporation of Pristine Solutions Inc. (incorporated by reference to our registration statement on Form S-1 filed on May 4, 2010)
3.2
Certificate of Amendment filed with the Nevada Secretary of State on January 29, 2010. (incorporated by reference to our registration statement on Form S-1 filed on May 4, 2010)
3.3
Bylaws of Pristine Solutions Inc. (incorporated by reference to our registration statement on Form S-1 filed on May 4, 2010)
3.4
Amended Articles of Incorporation/Certificate of Amendment filed with the Nevada Secretary of State on March 7, 2012 (incorporated by reference to our Annual Report on Form 10-K for the year ended January 31, 2012 filed April 30, 2012)
3.5*
(10)
Material Contracts
10.1
Consulting Agreement with Christine Buchanan-McKenzie (incorporated by reference to our registration statement on Form S-1 filed on May 4, 2010)
10.2
License Agreement with Zhongshan Guangsheng Industry Co., Ltd. (incorporated by reference to our registration statement on Form S-1filed on May 4, 2010)
10.3*
10.4*
10.5*
10.6*
10.7*
10.8*
  10.9*
 10.10*
 10.11* Lock-up Leak-out Agreement with Edward W. Withrow IV dated October 27, 2012
   
(16)
Letters on Change in Certifying Auditor
16.1*
Letter from GBH CPA’s, PC dated November 2, 2012
(21)
List of Subsidiaries (2)
21.1
Pristine Solutions Limited, incorporated under the laws of Jamaica
 
Eaton Scientific Systems, Inc., incorporated under the laws of Nevada, USA
(23)
Consents of Experts and Counsel
23.1
Letter from GBH CPA’s, PC dated July 21, 2010 (incorporated by reference to our registration statement on Form S-1 filed on May 4, 2010)
23.2*
(31)
Rule 13a-14(a) Certifications
31.1*
CEO Section 302 Certification under Sarbanes-Oxley Act of 2002.
31.2*
CFO Section 302 Certification under Sarbanes-Oxley Act of 2002.
(32)
Section 1350 Certifications
32.1*
CEO Section 906 Certification under Sarbanes-Oxley Act of 2002.
32.2*
CFO Section 906 Certification under Sarbanes-Oxley Act of 2002.
(99)
Other Documents
99.1*
99.2*
Prior Art Search Letter pertaining to U.S. Provisional Application Ser. No. 60/719,756
99.3*
 99.4* $500,000 Convertible Promissory Note
   
(101)**
Interactive Data File
101.INS **
XBRL Instance Document
101.SCH **
XBRL Taxonomy Extension Schema Document.
101.CAL **
XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF **
XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB **
XBRL Taxonomy Extension Label Linkbase Document.
101.PRE **
XBRL Taxonomy Extension Presentation Linkbase Document.

*
Filed herewith.
 
**  
Furnished herewith. Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of any registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, and otherwise are not subject to liability under those sections .    
 

 
41
 
 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


 
PRISTINE SOLUTIONS, INC.
 
     
Date: November 8, 2012 
/s/   Michael Borkowski
 
 
By:  Michael Borkowski
 
Its:  President and Chief Executive Officer
   
 
 
42
PRISTINE SOLUTIONS, INC. 8-K
 
Exhibit 3.5
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PRISTINE SOLUTIONS, INC. 8-K
 
Exhibit 10.3
CONSULTING AGREEMENT
 
This Consulting Agreement (the "Agreement") is entered into as of this 28 th day of August, 2012 (the "Effective Date"), by and between Eaton Scientific Systems, Ltd. a Nevada corporation with offices at 9595 Wilshire Blvd. Suite 900 Beverly Hills, CA 90212 (or the "Company") and Dr. David Stark, an individual at 6980 Eagle Ridge Road Penngrove, CA 94951 ("Consultant") (together the "Parties").
 
WHEREAS, Consultant possesses certain skills and expertise;
 
WHEREAS, Company wishes to retain the services of Consultant on the terms and conditions set forth below, and
 
WHEREAS, Consultant is willing to provide services to the Company, on the terms and conditions set forth below,
 
NOW, THEREFORE, the parties agree as follows:
 
1.  
Services.   Consultant will perform the services set forth on Exhibit A, or as amended by mutual written agreement.  It is agreed and understood that the nature and manner of services provided hereunder shall be within Consultant’s area of professional expertise and/or historical experience.
 
(a)           
Direction .  Consultant shall be directed by and shall report to Michael Borkowski or his successor.
 
(b)           
Start Date .  Consultant's consulting obligations to Company shall begin on September 1, 2012
 
(c)           
Term .  This Agreement shall commence on the Start Date and, unless earlier terminated in accordance with Section 15, shall continue up to and including March 1, 2013 (the "Term").  The Parties can automatically extend the Term in three-month increments upon mutual agreement. Any extension shall be in writing.
 
2.  
Method of Performance.   The Consultant shall determine the method, details, and means of performing and fulfilling his or her duties hereunder.
 
3.  
Other Employment .  The Company acknowledges and agrees that Consultant may assume other commitments, and has ongoing or intends to obtain engagements outside of Consultant's work for Company during the Term ("Other Engagements"); provided that Consultant fully complies with the confidentiality obligations contained in Section 9.  Consultant shall reasonably notify Company of any Other Engagements, which may pose a conflict of interest, it being understood that such notice shall allow Company sufficient basis to proceed in accordance with Section 15(b)(2), below.
 
4.  
Status as Independent Contractor; Nature of Relationship.   It is agreed and understood that the Consultant is an independent contractor and will not act as an agent nor shall he or she be deemed an employee of Consultant for the purposes of any employee benefit programs, income tax withholding, FICA taxes, unemployment benefits, and worker’s compensation insurance, or otherwise.  Consultant shall not enter into any agreement or incur any obligations on Company’s behalf, or commit Company in any manner without Company’s prior written consent.
 
 
 
 
5.  
Resources.   Consultant shall provide such tools and facilities, as Consultant may deem necessary in the performance of Consultant's duties hereunder.  Upon Consultant's reasonable request, the Company shall provide such incidental resources to Consultant as the Company in its discretion believes may be warranted.
 
6.  
Compensation.   It is agreed and understood, that subject to the Term and performance and under Section 1, the Consultant shall be paid as set forth in Exhibit A. Consultant shall be solely responsible for and agrees that he or she will in a timely fashion pay all federal, state and other taxes on the amounts set forth in this Section. Company will pay Consultant a fee of four thousand (“$4,000”) dollars to be paid to Consultant on a monthly basis.  The Consultant will receive, as part of his compensation.
 
7.  
Expenses .   Consultant will be reimbursed for the reasonable expenses Consultant incurs directly in connection with services provided under this Agreement, following the submission of documentation evidencing and confirming such expenses.
 
8.  
Compliance with all Laws.   Consultant agrees that in the course of providing his services to the Company, he or she will not engage in any practice or commit any acts in violation of any federal, state or local law or ordinance.
 
9.  
Non-Disclosure Obligations.
 
(a)           
Definition of "Information."   “Information” shall mean materials, data, or information in any form, whether written, oral, digital, or otherwise, provided by or obtained from Company, Company's agents, or Company's contractors in connection with the Consultant's engagement by Company.  Technical or business information of a third person furnished or disclosed to the Consultant under this Agreement shall constitute Information of Company unless otherwise specifically indicated in writing.
 
(b)          
Confidential Information.   For purposes of this Agreement, the term "Confidential Information" shall mean Information regarding Company's business including, but not limited to, Information regarding diagnostic and medical device products, processing and manufacturing capabilities, copyrighted or patentable subject matter, research, development, innovations, inventions, designs, technology, improvements, trade secrets, business affairs and finances, customers, employees, operations, facilities, consumer markets, products, capacities, systems, procedures, security practices, data formats, and business methodologies.
 
(c)          
Consultant's Obligations.   All Confidential Information relating to or obtained from Company by the Consultant shall be maintained in confidence by the Consultant, and the Consultant shall use best efforts to protect and safeguard the Confidential Information.
 
 
2
 
(d)          
Use of Confidential Information.   Without Company's prior written approval, the Consultant: (a) shall not use Confidential Information directly or indirectly for any purpose except in connection with the services the Consultant performs on behalf of Company; and (b) shall not disclose, sell, assign, transfer, share or lease Confidential Information of Company, or make such Confidential Information available to, or make it available for the use or benefit of, any third party.
 
(e)          
Exceptions to Confidentiality Obligations.   The obligations of this Agreement shall not apply to Confidential Information which the Consultant shall demonstrate, by clear and convincing evidence:
 
1.             
is or becomes publicly available (other than through unauthorized disclosure under this Agreement);
 
2.             
is already known by the Consultant without an obligation of confidentiality prior to the disclosure thereof by Company, as evidenced by the Consultant's written records, maintained in the ordinary course, existing before the first date of Consultant's engagement with Company; or
 
3.             
is rightfully received by the Consultant from a third party free of any obligation of confidentiality.
 
10.  
Former Engagement Information .  The Consultant shall not, during the Consultant's engagement with the Company, improperly use or disclose any proprietary information or trade secrets of any former employer, hiring party, or other person or entity with which the Consultant has an agreement or duty to keep in confidence, if any, and shall not bring onto the premises of the Company any unpublished document or proprietary information belonging to any such employer, person or entity unless consented to in writing by such employer, person, hiring party, or entity.
 
11.  
Court or Agency Order.   In the event the Consultant receives a subpoena or order of a court or administrative body requesting disclosure of Company’s Confidential Information, the Consultant agrees (a) that, as promptly as possible after learning of such disclosure obligation and before making such disclosure, the Consultant shall notify Company of such obligation to make such disclosure, to allow Company an opportunity to object to such disclosure or to obtain a protective order or other appropriate relief; (b) that the Consultant shall provide such cooperation and assistance, at Company's expense, as Company may reasonably request in any effort by Company to obtain such relief; and (c) that the Consultant shall take all appropriate steps to limit the amount and scope of Confidential Information so disclosed and to protect its confidentiality.
 
12.  
Non-Solicitation.   The Consultant agrees not to solicit or encourage employees of Consultant to work for a Competitor during the Term, and for a period of one year after expiration of the Term. "Competitor" means any person or organization, including the Consultant him or herself, engaged in, or about to become engaged in, research on or the acquisition, development, production, distribution, marketing or providing of a Competing Product.  "Competing Product" means any product, process, or service of any person or organization other than the Company, in existence or under development, which both (A) is identical to, substantially the same as, or an adequate substitute for any product, process, or service of the Company, in existence or under development, on which the Consultant works during the Term or about which the Consultant acquires Confidential Information, and (B) is (or could reasonably be anticipated to be) marketed or distributed in such a manner and in such a geographic area as to actually compete with such product, process or service of the Company.
 
 
3
 
13.  
Inventions .  For purposes of this Agreement, the term "Inventions" shall mean any and all inventions, original works of authorship, developments, concepts, improvements, or trade secrets (whether or not patentable or registrable under copyright or similar laws) which relate to the business of the Company and which the Consultant either (i) solely or jointly conceives, develops, or reduces to practice during Company time, at the Company's direction, or using Company equipment or resources; or (ii) solely or jointly conceives, develops, or reduces to practice based on Company Confidential Information.  The Consultant will promptly make full written disclosure of Inventions to the Company and will hold such Inventions in trust for the sole right and benefit of the Company.  The Consultant hereby assigns to the Company all the Consultant's right, title and interest in and to Inventions.  Without limiting the foregoing, the Consultant further acknowledges that all Inventions (x) which are original works of authorship; (y) which are made by the Consultant (solely or jointly with others) within the scope of the Consultant's engagement hereunder; and (z) which are protectable by copyright, shall be deemed, to the extent applicable, “works made for hire,” as that term is defined in the United States Copyright Act.  It is agreed and understood that Consultant inventions, original works of authorship, developments, concepts, improvements, or trade secrets (whether or not patentable or registrable under copyright or similar laws) which do not qualify as "Inventions" hereunder shall not be subject to this Section 13.
 
14.  
Patent and Copyright Registration.   The Consultant agrees to assist the Company, or its designee, at the Company’s expense, in every reasonable way to secure the Company’s rights in the Inventions and any copyrights, patents, mask work rights or other intellectual property rights relating thereto in any and all countries, including the disclosure to the Company of all pertinent information and data with respect thereto and the execution of all applications, specifications, oaths, assignments and all other instruments which the Company shall deem necessary in order to apply for and obtain such rights and in order to assign and convey to the Company, its successors, assigns and nominees the sole and exclusive rights, title and interest in and to such Inventions, and any copyrights, patents, mask work rights or other intellectual property rights relating thereto.
 
15.  
Termination.   This Agreement may be terminated without liability as follows:
 
(a)            
For Cause .  If either Party is in material breach, the non-breaching party may terminate this Agreement upon providing the breaching party (a) with written notice, specifying the breach, and (b) with a ten (10) day opportunity to cure, commencing upon the effective date of such notice.
 
 
4
 
16.  
Survival.   The following provisions shall survive the expiration or termination of this Agreement:  Sections the applicable part of 6 (success fee) 9, 11, 12, 14, and 17.
 
17.  
Return of Property .  Consultant expressly agrees that upon completion of his or her consulting services under this Agreement, or at any time prior to that time upon request of the Company, Consultant will return to the Company all property of the Company obtained or received by Consultant during the Term of this Agreement including, but not limited to, any and all files, computers, computer equipment, software, diskettes or other storage media, documents, papers, records, notes, agenda, memoranda, plans, calendars and other books and records of any kind and nature whatsoever containing information concerning the Company or its customers or operations.
 
18.  
No Oral Modification .  This Agreement may not be changed orally, and no modification, amendment, or waiver of any provision contained in this Agreement, or any future representation, promise, or condition in connection with the subject matter of this Agreement shall be binding upon any party hereto, unless made in writing and signed by such party.
 
19.  
Entire Agreement .  This Agreement contains the entire agreement between the Parties and supersedes any and all previous agreements of any kind whatsoever between them, whether written or oral, and all prior and contemporaneous discussions and negotiations have been and are merged and integrated into, and are superseded by, this Agreement.  This is an integrated document.
 
20.  
Severability .  In the event that any provision of this Agreement or the application thereof should be held to be void, voidable, unlawful or, for any reason, unenforceable, the remaining portion and application shall remain in full force and effect, and to that end the provisions of this Agreement are declared to be severable.
 
21.  
Governing Law .  This Agreement is made and entered into, and shall be subject to, governed by, and interpreted in accordance with the laws of the Commonwealth of California and shall be fully enforceable in the courts of that state, without regard to principles of conflict of laws.  The Parties (i) agree that any suit, action or other legal proceeding arising out of this Agreement may be brought in the United States District Court for the District of California, or if such court does not have jurisdiction or will not accept jurisdiction, in any court of general jurisdiction in Los Angeles County, California; (ii) consent to the jurisdiction of any such court; and (iii) waive any objection which they may have to the laying of venue in any such court.  The Parties also consent to the service of process, pleadings, notices or other papers by regular mail, addressed to the party to be served, postage prepaid, and registered or certified with return receipt requested.
 
22.  
Notices .  All notices, requests, consents, approvals and other communications required or permitted under this Agreement ("Notices") shall be in writing and shall be delivered to the addresses listed above, by mail, by hand, or by facsimile transmission, unless otherwise provided in this Agreement.  Such Notices shall be effective (i) if sent by mail, three business days after mailing; (ii) if sent by hand, on the date of delivery; and (iii) if sent by facsimile, on the date indicated on the facsimile confirmation.  Any party may change its address or facsimile number for notification purposes by giving all of the individuals and entities noted above notice, in accordance with the notice provisions set forth in this Section, of the new address or facsimile number and the date upon which it will become effective.
 
 
5
 
23.  
No Assignment .  Neither this Agreement nor any portion hereof is assignable.
 
24.  
Counterparts.   This Agreement may be executed in counterparts, and each counterpart, when executed, shall have the effect of a signed original.
 
IN WITNESS WHEREOF , the Parties hereto have caused this Agreement to be executed by the undersigned duly authorized persons as of the day and year above stated.
 
EATON SCIENTIFIC SYSTEMS, INC.


By:  /s/ Michael Borkowski                        
Name: Michael Borkowski
Title:   Chairman



CONSULTANT

/s/ Dr. David Stark                                                                                 
Dr. David Stark

 
6
 

 
 
EXHIBIT “A”
 
CONSULTANT SERVICES
 
AND
 
PAYMENT SCHEDULE

 
PAYMENT SHEDULE
 
1.           Monthly Cash Compensation. The Consultant shall receive $4,000 per month.  Payment shall be made on the fifth (5 th ) of each month for a period of eighteen (18) months.
 
 
 7
PRISTINE SOLUTIONS, INC. 8-K

 
Exhibit 10.4





ESOP
 
EMPLOYEE STOCK OPTION PLAN
 
 
 
STOCK OPTION PLAN OF
 
PRISTINE SOLUTIONS, INC.
 
SEPTEMBER 1, 2012
 


 
 
 

Table of Contents
 
 
GENERAL
    1  
         
ADMINISTRATION OF THE PLAN
    5  
         
ELIGIBILITY OF PARTICIPANTS
    6  
         
SHARES SUBJECT TO PLAN
    6  
         
GRANT OF OPTIONS
    7  
         
TERMS AND CONDITIONS OF OPTIONS
    8  
         
TERMINATION OF OPTIONS
    11  
         
     Termination Before Option Becomes Exercisable.
    12  
         
     Discharge or Resignation.
    12  
         
CERTAIN TAX MATTERS
    14  
         
MISCELLANEOUS
    15  
         
Pristine Solutions, Inc. Employee Stock Option Plan       Confidential 09-01-12 

 
 
 

PRISTINE SOLUTIONS, INC.
2012 STOCK OPTION PLAN
 
ARTICLE 1  
GENERAL
 
Purpose of Plan.  The Pristine Solutions, Inc. (“PRISTINE”) 2012 Stock Option Plan is intended to encourage ownership of Shares of PRISTINE by certain employees of the Company or of its Parent or its Subsidiaries and certain other Persons, to provide additional incentive for them to remain in the employ of the Company or its Parents or Subsidiaries, and to promote the growth and success of the Company and such Parents and Subsidiaries.  It is intended that the Options issued pursuant to the Plan shall constitute either incentive stock options within the meaning of Section 422 of the Code and the regulations thereunder or non-incentive stock options.
 
Definitions.  Whenever used herein, the following terms shall have the following meanings unless the context clearly indicates another meaning:
 
“ Board ” - the Board of Directors of the Company.
 
“ Business Day ” - any day other than a Saturday, a Sunday, or a day on which banking institutions in the State of Nevada are authorized or obligated by law or executive order to remain closed.
 
“ Code ” - the Internal Revenue Code of 1986, as amended.
 
“ Committee ” - the Board or, at the option of the Board, a committee designated by the Board, which committee shall consist of not less than one member of the Board who shall be appointed by and serve at the pleasure of the Board.  Members of the Committee who are Eligible Individuals shall be eligible for grants of Options; provided that any such grant is approved by a majority of the other members of the Committee.  During any period of time in which the Company is subject to the reporting requirements of the Exchange Act, the Committee shall be comprised solely of not less than two members, each of whom shall be (i) a “non-employee director” within the meaning of Rule 16b-3 promulgated under the Exchange Act, as amended, and (ii) unless otherwise determined by the Board, an “outside director” within the meaning of Treasury Regulation Section 1.162-27(e)(3) and Section 162(m) of the Code.
 
“ Company ” – Pristine Solutions, Inc. a Nevada corporation
 
“ Corporate Parent ” - with respect to any Option, any corporation (other than the Company) in an unbroken chain of corporations ending with the Company if, at the time such Option is granted, each of the corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one or more of the other corporations in such chain.
 
“ Corporate Subsidiary ” - with respect to any Option, any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if, at the time such Option is granted, each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one or more of the other corporations in such chain.
 
 
1
 
“ Date of Grant ” - with respect to any Option, the date on which such Option is deemed, granted pursuant to Section 5.2.
 
“ Disability ” - permanent and total disability as defined in the employment agreement (or any successor agreement).
 
“ Eligible Individual ” - (i) a Key Employee or (ii) any other Person that the Committee designates as eligible to receive a Non-incentive Stock Option (or, to the extent Incentive Stock Options may be granted to such Persons, an Incentive Stock Option) because such other Person performs services for the Company or any of Its Parents or Subsidiaries (other than services in connection with the offer or sale of securities in a capital-raising transaction) and the Committee determines that the Person has a direct and significant effect on the financial development of the Company or any of its Parents or Subsidiaries, but excluding, under (i) and/or (ii), any Person that the Board may from time to time specify as ineligible.
 
“ Eligible Employer ” - the Company.
 
“ Employee-Participant ” - a Participant who is, at the Date of Grant of the relevant Option, an employee of an Eligible Employer.
 
“ Exchange Act ” — the Securities Exchange Act of 1934, as amended.
 
“ Fair Market Value ” – (a) if Shares are listed on a national securities exchange, the last reported sales price, regular way, on the composite tape of the principal national securities exchange on which the Shares are so listed on the most recent Business Day prior to the date in question for which such price is available; (b) if clause (a) does not apply but the Shares are admitted to trading in the NASDAQ-National Market System (or a similar system then in use), the last reported sales price, regular way, on the NASDAQ-National Market System (or such similar system) on the most recent Business Day prior to the date in question for which such price is available; (c) if neither clause (a) or (b) applies but the Shares are traded in the over-the-counter market and bid and asked prices are reported by NASDAQ or any comparable system, the average of the closing bid and asked prices of Shares in the over-the-counter market as reported by NASDAQ or any comparable system on the most recent Business Day prior to the date in question for which such prices are available; (d) if none of clauses (a), (b), or (c) applies but bid and asked prices for the Shares are furnished by members of the FINRA, the average of the closing bid and asked prices as furnished by two members of the FINRA (selected from time to time by the Committee for that purpose) on the most recent Business Day prior to the date in question for which such prices are available; and (e) if none of clauses (a), (b), (c), or (d) applies, the fair market value of the Share as determined by the Committee from time to time.
 
“ Incentive Stock Option ” - an option to purchase Shares granted pursuant to the Plan that is an “incentive stock option” within the meaning of Section 422 of the Code.
 
 
2
 
“ Initial Public Offering ” - the consummation of a sale of Shares (by the Company or shareholders or a combination thereof) that is registered on a registration statement (other than a registration statement on Form S-8 or its equivalent) filed with the Securities and Exchange Commission pursuant to the Securities Act of 1933, pursuant to which the Company receives at least $10 million.
 
“ Issuable Number ” - at any time, the Maximum Number less the number of Shares theretofore issued or delivered under the Plan (appropriately adjusted to give effect to any changes in capitalization or Reorganization).
 
“ Key Employee ” - any employee of an Eligible Employer who the Committee determines is key to the operations of an Eligible Employer.
 
“ Maximum Number ” - the maximum number of Shares that may be issued or delivered under the Plan, which is 25,000,000 (subject to adjustment as set forth in Sections 9.6 and 9.7 hereof).
 
“FINRA” – Financial Industry Regulatory Authority.
 
“ NASDAQ ” - NASD Automated Quotation System.
 
“ Non-Incentive Stock Option ” - an option to purchase Shares granted pursuant to the Plan that is not an Incentive Stock Option.
 
“ Option ” - an option to purchase Shares granted pursuant to the Plan that is an Incentive Stock Option or a Non-Incentive Stock Option.
 
“ Option Agreement ” - the agreement, substantially in the form attached hereto as Exhibit B (or such other form as may be approved by the Committee for use under the Plan pursuant to Section 2.1 hereof), between the Company and a Participant evidencing the grant of an Option under the Plan and containing the terms and conditions, not inconsistent with the Plan, that are applicable to such Option.
 
“ Parent ” - any Person (other than the Company) in an unbroken chain of Persons ending with the Company if, at the time such Option is granted, each of the Persons other than the Company owns stock (or other equity interests) possessing 50% or more of the total combined voting power of all classes of stock (or other equity interests) in one or more of the other Persons in such chain.
 
“ Participant ” - an Eligible Individual to whom an Option is granted under the Plan.
 
“ Person ” - any natural person, corporation, partnership, limited partnership, Limited Liability Company, joint venture, or other entity.
 
“ Plan ” – the Pristine Solutions, Inc. 2012 Stock Option Plan, as set forth herein and as it may be amended from time to time.
 
“ Reorganization ” - any merger or consolidation in which the Company is not the surviving Person (other than a merger of the Company into a wholly-owned subsidiary of the Company) or in which the holders of Shares receive cash, shares of another Person, a different class of shares of the Company, or other property; the sale of all or substantially all of the assets of the Company; or the sale, pursuant to an agreement with the Company, of Shares of the Company pursuant to which another Person acquires Shares that, after consummation of such sale, are 50% or more of the outstanding Shares of the Company.
 
 
3
 
“ Securities Act ” – the Securities Act of 1933, as amended.
 
“ Share ” - a share of the Company’s present Common Stock, par value $.001 per share, and any share or shares of capital stock or other securities of the Company hereafter issued or delivered or issuable or deliverable upon, in respect of, in substitution of, or in exchange for each present share.
 
“ Shareholders’ Agreement ” - that certain Shareholders’ Agreement executed as of September 1, 2012 for Messrs.’ Borkowski and Stark and October 1, 2012 for Berman, by the Company, Michael J. Borkowski, Dr. Jennifer Berman, Dr. David Starke, and, possibly others, as the same may be amended at the relevant time, a copy of the current version of which is attached as   Exhibit A hereto.
 
“ Subsidiary ” - any Person (other than the Company) in any unbroken chain of Persons beginning with the Company if, at the time of granting of the Option, each of the Persons (other than the last Person in the unbroken chain) owns stock (or other equity interests) possessing 50% or more of the total combined voting power of all classes of stock (or other equity interests) in one of the other Persons in such chain.
 
“ Treasury Regulations ” - the regulations promulgated by the United States Department of the Treasury pursuant to and in respect of provisions of the Code.  All references herein to sections of the Treasury Regulations shall include any corresponding provisions of succeeding, similar, substitute, proposed, temporary, or final Treasury Regulations.
 
“ Vesting Schedule ” - a schedule on which an Option becomes exercisable as to a specific number of Shares subject to such Option.
 
ARTICLE 2
  ADMINISTRATION OF THE PLAN
 
Administration.  The Plan shall be administered by the Committee.  Subject to the provisions of the Plan, the Committee is authorized to take the following action, in addition to each other action that the Committee is expressly authorized to take pursuant to the Plan:
 
(a)   determine who is an Eligible Individual and determine the Eligible Individuals to whom Options are to be granted;
 
(b)   determine the number of Shares to be covered by each of the Options, the time or times at which Options shall be granted and exercisable and terminate, the exercise price for Shares subject to the Options, whether such Options shall be Incentive Stock Options or Non-Incentive Stock Options, and the other terms and provisions of each Option Agreement (which need not be the identical);
 
 
4
 
(c)   interpret the Plan provisions;
 
(d)   terminate the Plan;
 
(e)   adopt, amend, and rescind rules and regulations relating to the Plan and the functioning of the Committee;
 
(f)   determine the Fair Market Value of Shares;
 
(g)   accelerate the vesting of Options;
 
(h)   rely on the employees of the Company for such clerical and record-keeping duties as may be necessary or desirable in connection with the administration of the Plan; and
 
(i)   make all other determinations and take all other actions necessary or advisable for the administration of the Plan.
 
Absolute Discretion.  All questions of interpretation and application of the Plan or any Option Agreement or pertaining to any Option granted hereunder shall be subject to the determination by a majority of the members of the Committee acting with absolute discretion.
 
No Liability for Good Faith Determinations.  No member of the Committee shall be liable for any act, omission, or determination taken or made in good faith with respect to the Plan or any Option, and members of the Committee shall be entitled to indemnification and reimbursement by the Company in respect of any claim, loss, damage, or expense (including attorneys’ fees, and the costs of settling any suit if such settlement is approved by independent legal counsel selected by the Company), and amounts paid in satisfaction of a judgment (except a judgment based on a finding of bad faith) arising therefrom to the full extent permitted by law and under any directors and officers liability or similar insurance coverage that may from time to time be in effect.  This right to indemnification shall be in addition to, and not a limitation on, any other indemnification rights any member of the Committee may have.
 
No Liability of Company.  The Company assumes no obligation or responsibility to any Participant for any act of, or failure to act on the part of, the Committee.
 
ARTICLE 3  
ELIGIBILITY OF PARTICIPANTS
 
Participants.  An Option may be granted pursuant to the Plan only to a Person who is an Eligible Individual at the Date of Grant of such Option.
 
Factors in Determination.  In making any determination as to whether a Person is an Eligible Individual, as to whether an Eligible Individual will be granted an Option, and as to the number of Shares to be covered by such Option, the Committee shall take into account the duties of such Person, the present and potential contributions of such Person to the growth and success of the Company and its Parents or Subsidiaries, and such other factors as the Committee shall deem relevant in connection with accomplishing the purposes of the Plan.  The Committee shall not be precluded from approving the grant of an Option to any Eligible Individual solely because such Person may previously have been granted an Option under the Plan.
 
 
5
 
ARTICLE 4  
SHARES SUBJECT TO PLAN
 
Shares.  At no time shall the number of Shares subject to outstanding Options be greater than the Issuable Number.  The Company shall cause the Issuable Number of Shares to be reserved for issuance or delivery under the Plan at all times the Plan is in effect.
 
Expiration or Cancellation of Options; Tendered Shares.  Should any Option expire or be canceled without being fully exercised, the number of Shares with respect to which such Option shall not have been exercised prior to its expiration or cancellation will again be available for the granting of Options pursuant to the provisions hereof.  Furthermore, if the exercise price of any Option granted under the Plan is satisfied by tendering Shares (by either actual delivery or by attestation), only the number of Shares issued net of the Shares tendered shall be deemed delivered for purposes of determining the Issuable Number; provided, however , that any increase in the Issuable Number resulting from the application of this sentence shall be reserved for issuance of Shares in satisfaction of Non-Incentive Stock Options only.
 
Description of Shares.  The Shares to be delivered under the Plan shall be made available from (a) authorized but unissued Shares, (b) Shares held in the treasury of the Company, or (c) previously issued Shares reacquired by the Company, including Shares purchased on the open market, as the Board or the Committee may, in each situation, determine from time to time in its sole discretion.
 
ARTICLE 5  
GRANT OF OPTIONS
 
Decision of Committee.  From time to time the Committee shall, in its sole discretion but subject to all of the provisions of the Plan, determine which Eligible Individuals will be granted Options, the number of Shares subject to Options, and the terms and conditions of the Options, including whether the Options will be Incentive Stock Options or Non-Incentive Stock Options.  The terms and conditions of an Option need not be the same for any other Option.
 
Date of Grant.  The date of the Agreement shall be the date on which the Option is deemed granted.  In no event shall a Participant gain any rights in addition to those specified by the Committee in its grant, regardless of the time that may pass between the grant of the Option and the actual acceptance of the offer of the Option and execution of the Option Agreement by the Company and the Participant.
 
Acceptance of Grant.  Each Eligible Individual granted an Option pursuant to Section 5.1 shall have an opportunity to accept or reject the grant of the Option.  Execution and delivery of an Option Agreement relating to an Option shall qualify as such written acceptance.  Each Eligible Individual who indicates a desire to accept the grant of the Option offered to him or her must enter into an Option Agreement pursuant to Section 6.1 hereof as a condition to such acceptance.
 
 
6
 
Limitation of Time of Grant.  In no event shall any Incentive Stock Option be granted hereunder after the date that is ten years after the earlier of (a) the date the Plan is adopted by the Board and (b) the date the Plan is approved by the shareholders of the Company pursuant to Section 9.1.
 
Limitation on Incentive Stock Options.  Notwithstanding any other provision contained herein to the contrary, no Incentive Stock Option shall be granted to an Eligible Individual under the Plan to the extent it, together with all other incentive stock options granted by the Company or any of its Parents or Subsidiaries to such Eligible Individual, would relate to Shares that, in the calendar year they first become purchasable, have a Fair Market Value, at the Date of the Grant, in excess of $100,000.  Notwithstanding the above, to the extent that the $100,000 limit is exceeded, the Option shall automatically be deemed to be a Non-Incentive Stock Option.
 
Limitation on Recipients of Grant.  Notwithstanding any other provision contained herein to the contrary, in no event shall any Eligible Individual owning directly or indirectly (pursuant to Code Section 424) more than 10% of the total combined voting power of the Company or any Corporate Subsidiary (a “10% Holder”) be granted an Incentive Stock Option hereunder unless (a) the exercise price is at least 110% of the Fair Market Value of the Shares at the Date of Grant of the Option and (b) the term of the Option does not exceed five years from the Date of Grant.  Notwithstanding any other provision contained herein to the contrary, in no event shall any Incentive Stock Option (or an incentive stock option under any other plan of the Company or a Subsidiary) be granted to any Eligible Individual unless such Eligible Individual is a Key Employee of the Company or a Corporate Parent or Corporate Subsidiary of the Company.
 
ARTICLE 6  
TERMS AND CONDITIONS OF OPTIONS
 
Option Agreement.  Each Option granted under the Plan shall be evidenced by an Option Agreement, in such form as the Committee may prescribe, setting forth the tens and conditions of the Options, consistent with the provisions of the Plan.  The Option Agreement shall identify the Option granted as either an Incentive Stock Option or a Non-Incentive Stock Option.
 
Number of Shares.  Each Option Agreement shall specify the number of Shares subject to each Option.
 
Exercise Price.  The exercise price for each Share purchased under any Option shall be specified in the Option Agreement relating to such Option, which shall not be less than the par value of a Share and, in the case of an Incentive Stock Option, shall also not be less than 100% of the Fair Market Value of a Share on the Date of Grant.
 
Payment of Exercise Price.  Payment of the exercise price for Shares purchased under the Plan shall be made upon the exercise of an Option and may be paid to the Company:
 
(a)   in cash (including check, bank draft, or money order); or
 
(b)   at the discretion of the Committee, or if the Option Agreement so provides, by the delivery of Shares of the Company owned by the Participant (including Shares received upon exercise of such Option) that have a Fair Market Value on the date of exercise equal to the aggregate exercise price;
 
 
7
 
(c)   at the discretion of the Committee, or if the Option Agreement so provides, by the delivery of a promissory note in the principal amount of the aggregate exercise price and having such other terms as are determined by the Committee or provided in the Option Agreement; or
 
(d)   at the discretion of the Committee, or if the Option Agreement so provides, by a combination of the foregoing.
 
Vesting.  If the relevant Option Agreement does not specify a Vesting Schedule but (assuming no event of the type described in Article VII that would shorten or extend such term occurs during such term) has a term of at least five years from the Date of Grant, the Option shall become exercisable with respect to cumulative quantities of 20% of the Shares subject thereto on the first, second, third, fourth, and fifth anniversary dates of the Date of Grant (subject to adjustment as contemplated by Article VII).
 
Modification, Extension, and Renewal of Options.  Subject to the terms and conditions of and within the limitations of the Plan and any consent required by the last two sentences of this Section, the Committee may (a) modify, extend, or renew outstanding Options, (b) accept the surrender of outstanding Options (to the extent not previously exercised) and authorize the granting of new Options (including those with a higher or lower exercise price) in substitution for outstanding Options (to the extent not previously exercised), and (c) amend the terms of an Incentive Stock Option at any time to include provisions that have the effect of changing the Incentive Stock Option to a Non-incentive Stock Option.  Nevertheless, without the consent of the Participant, the Committee may not modify any outstanding Option so as to specify a higher or lower exercise price or accept the surrender of outstanding Incentive Stock Options and authorize the granting of new Options in substitution therefor specifying a higher or lower exercise price.  In addition, no modification of an Option shall, without the consent of the Participant, alter or impair any rights or obligations under any Option theretofore granted hereunder to such Participant except, with respect to Incentive Stock Options, as may be necessary to satisfy the requirements of Section 422 of the Code.
 
Exercise of Options Generally.  An Option may be exercised only by written notice of exercise delivered to the Company during the term of the Option, which notice shall (a) state the number of Shares with respect to which the Option is being exercised, (b) be signed by the Participant (or, if the Participant is dead or Disabled, by the Person, if any, authorized to exercise the Option pursuant to the Plan and, if signed by a Person other than the Participant, be accompanied by or contain satisfactory evidence of such Person’s right to exercise the Option), (c) be accompanied by payment of the appropriate exercise price and by payment in full of all the applicable taxes required to be withheld with respect to such exercise, (d) state the Social Security number of the Participant or other Person exercising the Option as contemplated by clause (b) above, and (e) include or be accompanied by such other information, instruments, agreements, and documents required to satisfy any other condition to exercise specified in the Plan (including but not limited to those contained in Section 6.9, 6.10, and 6.15) or the Option Agreement.  Unless otherwise consented to by the Committee, an Option shall not be deemed exercised until the requirements of this Section are completely fulfilled.
 
 
8
 
Certain Conditions to Exercise and Delivery of Stock.  Nothing herein or in any Option or any Option Agreement shall require the Company to issue or deliver any Shares if that issuance or delivery would, in the opinion of counsel for the Company, constitute a violation of the Securities Act or any similar or superseding statute or statutes, any other applicable statute or regulation, or the rules of any applicable securities exchange or securities association, in each case, as then in effect.  The Company may, as a condition precedent to the exercise of an Option, require from the Participant (or in the event of the death or Disability of the Participant, the Participant’s legal representatives, heirs, legatees, or distributees) such written representations, if any, concerning the Participant’s (or such other Person’s) intentions with regard to the retention or disposition of the Shares being acquired and such written covenants and agreements, if any, as to the manner of disposal of such Shares as, in the opinion of counsel to the Company, may be necessary to ensure that any disposition by that Participant (or in the event of the death or Disability of the Participant, the Participant’s legal representatives, heirs, legatees, or distributees), will not involve a violation of the Securities Act or any similar or superseding statute or statutes, any other applicable state or federal statute or regulation, or any rule of any applicable securities exchange or securities association, in each case, as then in effect.
 
Additional Restrictions on Exercise.  The exercise of each Option granted under the Plan shall be subject to the condition that if at any time the Company or the Committee shall determine, in its sole discretion, that (a) the satisfaction of withholding taxes or other withholding liabilities, (b) the listing, registration, or qualification of any Shares otherwise deliverable upon such exercise on any securities exchange or under any state or federal law, or (c) the consent or approval of any regulatory body is necessary or desirable as a condition of, or in connection with, such exercise or the delivery or purchase of Shares thereunder, then in any such event such exercise shall not be effective unless such withholding, listing, registration, qualification, consent, or approval shall have been effected or obtained without any conditions not acceptable to the Company.
 
Nontransferability of Options.  Unless the relevant Option Agreement with respect to a Non-Incentive Stock Option expressly provides greater or lesser rights to the Participant or the relevant Option Agreement with respect to an Incentive Stock Option expressly provides lesser rights to the Participant, no Option shall be transferable by a Participant other than by will or the laws of descent and distribution or, in the case of a Non-Incentive Stock Option, a qualified domestic relations order; provided, however , that the Board of Directors or the Committee, as applicable, in its discretion, may allow for transferability of non-qualified stock options by the Participant.  Following any such transfer, any such options shall continue to be subject to the same terms and conditions as were applicable immediately prior to transfer.
 
No Fractional Shares.  The Company shall not in any case be required to sell, issue, or deliver a fractional Share with respect to any Option.  In lieu of the sale, issuance, or delivery of any fractional Share, the Company shall pay to the Participant an amount in cash equal to the same fraction (as the fractional Share) of the Fair Market Value of a Share determined as of the date such Option was exercised.
 
Delivery of Certificates of Stock.  The Company shall promptly issue and deliver a certificate representing the number of Shares as to which an Option has been duly exercised.  The value of the Shares issuable or deliverable upon exercise of an Option shall not bear any interest owing to the passage of time, except as may be otherwise provided in an Option Agreement or approved in writing by the Committee.
 
 
9
 
Legends.  Certificates for Shares issued or delivered upon exercise of an Option, when delivered, may bear such legends or statements as the Committee or the Company determines to be appropriate or advisable.
 
Restrictions on Transfer of Shares; Rights to Acquire from Participant.  Each Option Agreement may provide for (a) restrictions on the transferability of Shares acquired pursuant to an Option or otherwise and (b) options and rights of first refusal with respect to any or all of such Shares in favor of the Company and/or any or all of its shareholders that, in each instance, the Committee in its sole and absolute discretion may deem proper or advisable.  Unless otherwise provided in an Option Agreement, the provisions of the Shareholders’ Agreement in effect at the date of exercise of an Option are fully applicable to all Shares issued pursuant to that Option.  To the extent that Participant (or other Person exercising the Option) has not already done so, the Participant (or other Person exercising the Option) will be deemed to have executed a counterpart thereof as of the date of exercise.  The Committee may require, as a condition to the exercise of an Option, the Participant and his or her spouse (or other Person exercising the Option) to execute and deliver an agreement confirming the existence and enforceability of any such restrictions on the transferability of the Shares to be acquired upon exercise of such Option and otherwise evidencing their express agreement to be bound thereby.  The failure to obtain any such confirmation and agreement shall not have any effect on the existence or enforceability of the restrictions on transferability applicable to such Shares.
 
No Rights as Shareholder.  The holder of an Option shall not have any of the rights of a shareholder of the Company with respect to the Shares covered by the Option unless and until, and except to the extent that, one or more certificates for such Shares shall have been delivered to such holder or such holder has been determined to be a shareholder of record by the Company or its transfer agent upon due exercise of the Option.
 
ARTICLE 7  
TERMINATION OF OPTIONS
 
Term of Options.  Unless the relevant Option Agreement expressly provides a different term, the term of each Option shall be from the Date of Grant until the date that is five years after such Date of Grant; provided, however , that no Option Agreement relating to an Incentive Stock Option shall permit such Incentive Stock Option to be exercisable later than ten years (five years in the case of a 10% Holder) from the Date of Grant.
 
ARTICLE 7.1   Termination Before Option Becomes Exercisable.
 
(a)   Unless the relevant Option Agreement with respect to a Non-Incentive Stock Option expressly provides greater or lesser rights to the Employee-Participant or the relevant Option Agreement with respect to an Incentive Stock Option expressly provides lesser rights to the Employee-Participant, if an Employee-Participant ceases to be an employee of an Eligible Employer for any reason whatsoever before the date that an Option shall first have become exercisable by the Employee-Participant and such Employee-Participant is not then an employee of any other Eligible Employer, the Option and all rights of the Employee-Participant to exercise the Option shall terminate, lapse, and be forfeited at the time of such termination of employment.
 
 
10
 
(b)   Unless the relevant Option Agreement with respect to a Non-Incentive Stock Option expressly provides greater or lesser rights to the Participant (other than an Employee-Participant) or the relevant Option Agreement with respect to an Incentive Stock Option expressly provides lesser rights to the Participant (other than an Employee-Participant), if the Participant ceases to serve an Eligible Employer in the capacity in which the Participant was serving at the time the Option was granted for any reason whatsoever before the date an Option shall first have become exercisable by the Participant and such Participant is not then serving any other Eligible Employer, the Option and all rights of the Participant to exercise the Option shall terminate, lapse, and be forfeited at the time the Participant ceases to so serve the Eligible Employer.
 
ARTICLE 7.2   Discharge or Resignation.
 
(a)   Unless the relevant Option Agreement with respect to a Non-Incentive Stock Option expressly provides greater or lesser rights to the Employee-Participant or the relevant Option Agreement with respect to an Incentive Stock Option expressly provides lesser rights to the Employee-Participant, if an Employee-Participant ceases to be an employee of an Eligible Employer for any reason other than death or Disability and such Employee-Participant is not then an employee of any other Eligible Employer, the Employee-Participant shall have the right to exercise an Option, but only to the extent exercisable on the date of such cessation of employment, at any time within three months after such cessation of employment; provided, however, that if the Employee-Participant shall die within three months after such date of cessation of employment without having exercised the Option, the personal representatives, heirs, legatees, or distributees of the Employee-Participant, as appropriate, shall have the right, up to one year from such date of cessation of employment (or such lesser period as is contemplated by Section 7.6 or 7.7, if applicable), to exercise any such Option to the extent that the Option was exercisable prior to the Employee-Participant’s death and had not been so exercised.  The Option and all rights of the Employee-Participant to exercise the Option shall terminate, lapse, and be forfeited on the date of such cessation of employment to the extent the Option is not exercisable on such date.
 
(b)   Unless the relevant Option Agreement with respect to a Non-Incentive Stock Option expressly provides greater or lesser rights to the Participant (other than an Employee-Participant) or the relevant Option Agreement with respect to an Incentive Stock Option expressly provides lesser rights to the Participant (other than an Employee-Participant), if the Participant ceases to serve an Eligible Employer in the capacity in which the Participant was serving at the time the Option was granted for any reason other than death and such Participant is not then serving any other Eligible Employer, the Participant shall have the right to exercise an Option, but only to the extent exercisable on the date of such cessation, at any time within three months after such cessation; provided, however , that if the Participant shall die within three months after such date of cessation without having exercised the Option, the personal representatives, heirs, legatees, or distributees of the Participant, as appropriate, shall have the right, up to one year from such date of cessation (or such lesser period as is contemplated by Section 7.6 or 7.7, if applicable), to exercise any such Option to the extent that the Option was exercisable prior to the Participant’s death and had not been so exercised.  The Option and all rights of the Participant to exercise the Option shall terminate, lapse, and be forfeited on the date of such cessation to the extent the Option is not exercisable on such date.
 
 
11
 
Death.  Unless the relevant Option Agreement with respect to a Non-Incentive Stock Option expressly provides greater or lesser rights to the Participant or the relevant Option Agreement with respect to an Incentive Stock Option expressly provides lesser rights to the Participant, upon the death of a Participant, the personal representatives, heirs, legatees, or distributees of the Participant, as appropriate, shall have the right up to one year from the date of the Participant’s death (or such lesser period as is contemplated by Section 7.6 or 7.7, if applicable) to exercise any Option, but only to the extent that the Option was exercisable at the date of the Participant’s death and had not been so exercised.  The Option and all rights of the Participant to exercise the Option shall terminate, lapse, and be forfeited on the date of such death to the extent the Option is not exercisable on such date.
 
Disability.  Unless the relevant Option Agreement with respect to a Non-Incentive Stock Option expressly provides greater or lesser rights to the Employee-Participant or the relevant Option Agreement with respect to an Incentive Stock Option expressly provides lesser rights to the Employee-Participant, if an Employee-Participant ceases to be an employee of the Eligible Employers due to such Employee-Participant’s Disability, as determined solely and exclusively by the Committee, the Employee-Participant shall have the right to exercise an Option, but only to the extent exercisable on the date of termination of employment, at any time within one year after such termination of employment (or such lesser period as is contemplated by Section 7.6 or 7.7, if applicable).  The Option and all rights of the Participant to exercise the Option shall terminate, lapse, and be forfeited on the date of such termination of employment to the extent the Option is not exercisable on such date.
 
Limitations on Exercise.  Despite the provisions of Sections 7.4 and 7.5, no Incentive Stock Option shall be exercisable under any condition after the expiration of ten years (five years in the case of a 10% Holder) from the Date of Grant.  In addition, the provisions of Sections 7.4 and 7.5, shall be subject to the provisions of Sections 9.6 and 9.7.
 
Forfeiture.  Each Option Agreement may contain or otherwise provide for conditions giving rise to the forfeiture of the Shares acquired pursuant to an Option or otherwise.  The conditions giving rise to forfeiture may include, but need not be limited to, the requirement that the Participant render substantial services to the Company or its Parents or Subsidiaries for a specified period of time.
 
 
12
 
ARTICLE 8  
CERTAIN TAX MATTERS
 
Withholding.  The amount, as determined by the Committee, of any federal, state, or local tax required to be withheld by the Company (or Subsidiary that is the employer of the Participant) due to the exercise of a Non-Incentive Stock Option shall be satisfied (a) by payment by the Participant to the Company (or Subsidiary that is the employer of the Participant) of the amount of such withholding obligation in cash, (b) through the retention by the Company of a number of Shares out of the Shares being purchased through the exercise of the Option having, at the date of withholding, a Fair Market Value equal to the amount of the withholding obligation, (c) through delivery by the Participant of Shares that have Fair Market Value at the date of withholding equal to the amount of the withholding, or (d) any combination of the foregoing.  The Committee shall determine the time and must consent to the manner in which a Participant shall satisfy a withholding obligation.  The cash payment or cash equal to the Fair Market Value of the Shares so withheld, as the case may be, shall be remitted by the Company (or Subsidiary that is the employer of the Participant) to the appropriate taxing authorities.
 
Disqualifying Disposition.  A Participant who makes a disqualifying disposition (within the meaning of Section 422 of the Code) of Shares acquired through the exercise of an Incentive Stock Option shall notify the Company of such disposition and the amount realized upon such disposition.  The Company shall have the right to require payment from the Participant to cover any federal, state, or local tax required to be withheld by the Company in the event of the disqualifying disposition of such Shares.  If a Participant fails to give the Company notice of the disqualifying disposition and/or fails to make a payment of the applicable withholding taxes and the Company incurs any penalties or becomes liable for any interest under the Code for failure to withhold on wages, the Participant shall immediately reimburse the Company for the amount of such penalties and interest and shall pay the Company reasonable attorneys’ fees if the Company resorts to legal action to enforce its rights under this sentence.
 
ARTICLE 9  
MISCELLANEOUS
 
Effective Date.  The Plan shall be effective as of September 1, 2012 provided, however , that if the Plan is not approved by the holders of a majority of the outstanding shares of voting stock of the Company prior to November 30, 2012, all Incentive Stock Options granted under the Plan shall automatically become Non-Incentive Stock Options.
 
Termination of Plan.  The Board or the Committee may terminate the Plan at any time.  However, termination of the Plan shall not affect any Options previously granted hereunder; such Options shall remain in effect until they have been terminated or exercised, all in accordance with their terms.
 
Furnish Information.  Each Participant shall furnish to the Company all information requested by the Company to enable it to comply with any reporting or other requirement imposed upon the Company by or under any applicable statute or regulation.
 
 
13
 
Remedies.  The Company shall be entitled to recover from a Participant reasonable attorneys’ fees incurred in connection with the enforcement of the terms and provisions of the Plan and any Option Agreement whether by an action to enforce specific performance or for damages for its breach or otherwise.
 
Information Confidential.  As partial consideration for the granting of each Option hereunder, the Participant agrees with the Company to keep confidential all information and knowledge that the Participant has relating to the manner and amount of the Participant’s participation in the Plan; provided, however , that such information may be disclosed as required by law and may be given in confidence to the Participant’s spouse, tax and financial advisors, or to a financial institution to the extent that such information is necessary to secure a loan.  In the event any breach of this promise comes to the attention of the Committee, it shall take into consideration that breach in determining whether to recommend the grant of any future Option to that Person as a factor militating against the advisability of granting any such future Option to that Person.
 
Changes in Capital Structure.  If there is any change in the capital structure of the Company through a Reorganization or otherwise, or if there shall be any dividend on the Shares, payable in Shares, or if there shall be a stock split or combination of Shares, the maximum aggregate number of Shares with respect to which Options may be exercised hereunder and the number and the exercise price of the Shares with respect to which an Option has been granted hereunder shall be proportionately adjusted by the Committee as it deems equitable, in its absolute discretion, to prevent dilution or enlargement of the rights of Participants.  The issuance or delivery of stock for consideration shall not be considered a change in the Company’s capital structure.  No adjustment provided for in this Section shall require the issuance or delivery of any fractional Share.  The provisions of this Section shall not override the provisions of Section 9.7.
 
Dissolution, Liquidation, or Reorganization.  In the event of the dissolution or liquidation of the Company, the Committee in its sole discretion, may (a) declare any or all outstanding Options to be immediately exercisable, (b) pay cash to any or all Participants in exchange for the cancellation of their Options at a price determined by the Committee to be the fair value thereof, or (c) permit the Participant to elect the manner in which the Option shall be treated upon the liquidation or dissolution of the Company.  In the event of a Reorganization of the Company, the Committee in its sole discretion, may (a) declare any or all outstanding Options to be immediately exercisable, (b) pay cash to any or all Participants in exchange for the cancellation of their Options at a price determined by the Committee to be the fair value thereof, (c) grant new Options, (d) substitute new Options for any or all Options awarded hereunder, (e) permit any or all of the Options to continue in accordance with their terms but with respect to the securities that would be issued in respect of the Shares subject to such Options in connection with such Reorganization, (f) make other adjustments to the Plan or any or all Options, or (g) permit the Participant to elect the manner in which the Option shall be treated upon the Reorganization of the Company.
 
Adjustments for Pooling of Interests Accounting.  Notwithstanding any other provision of the Plan or any Option Agreement, if the Company enters into a transaction that is intended to be accounted for using the pooling of interests method of accounting, but it is determined by the Board that any Option or any aspect thereof could reasonably be expected to preclude such treatment, then the Board may modify (to the minimum extent required) or revoke (if necessary) the Option or any of the provisions thereof to the extent that the Board determines that such modification or revocation is necessary to enable the transaction to be subject to the pooling of interests method of accounting.
 
 
14
 
Amendment.  The Board may, by resolution, amend the Plan at any time; provided, however , that, subject to the provisions of Section 9.6, 9.7, and 9.8 the Board may not, without approval by the holders of a majority of the outstanding Shares, (a) increase the Maximum Number, (b) reduce the exercise price with respect to an Option granted hereunder, contrary to the provisions of the Plan as hereinabove set forth, (c) change the class of employees eligible to participate in the Plan, or (d) otherwise materially increase the benefits accruing to Participants under the Plan or materially modify the requirements with respect to eligibility for participation in the Plan.  The Board may not, without the consent of the holder of an Option, alter or impair any Option previously granted under the Plan except as authorized herein.
 
Automatic Amendment for Requirements of and Changes in Code.  The Plan, to the extent it relates to Incentive Stock Options, and each Option Agreement that relates to Incentive Stock Options shall automatically be amended to contain any and all of the restrictions and limitations required, by Section 422 of the Code and the regulations promulgated thereunder, to be contained in the Plan and/or such Option Agreement, as appropriate.  The Plan and each Option Agreement that relates to Incentive Stock Options shall automatically be amended to eliminate any and all of the restrictions and limitations set forth in the Plan or any Option Agreement with respect to Incentive Stock Options if and to the extent that Section 422 of the Code and the regulations promulgated thereunder do not require such restrictions and limitations and either permit or do not prohibit such automatic amendments.
 
Nonguarantee of Employment.  Nothing in the Plan shall confer upon a Participant any right to continue in the employ of, or to continue to perform services for, any or all Eligible Employers or interfere in any way with the right of any or all Eligible Employers to terminate the Participant’s employment or other relationship with any or all Eligible Employers at any time.
 
Severability.  If any provision of the Plan is held to be illegal, invalid, or unenforceable under present or future laws effective during the term hereof, such provision shall be fully severable and the Plan shall be construed and enforced as if such illegal, invalid, or unenforceable provision had never comprised a part of the Plan; the remaining provisions of the Plan shall remain in full force and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance from the Plan.  Furthermore, in lieu of each such illegal, invalid, or unenforceable provision, there shall be added automatically as a part of the Plan a provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible and be legal, valid, and enforceable.  With respect to Incentive Stock Options, if the Plan does not contain any provision required to be included herein under Section 422 of the Code, that provision shall be deemed to be incorporated herein with the same force and effect as if that provision had been set out at length herein; provided, however , that, to the extent any Option that is intended to qualify as an Incentive Stock Option cannot so qualify, that Option (to that extent) shall be deemed a Non-Incentive Stock Option for all purposes of the Plan.
 
 
15
 
Rule 16b-3.  With respect to Participants subject to Section 16 of the Exchange Act, transactions under the Plan are intended to comply with all applicable conditions of Rule 16b-3 promulgated thereunder, and with respect to such Participants all transactions shall be subject to such conditions regardless of whether they are expressly set forth in the Plan or any Option Agreement.  To the extent any provision of the Plan fails to so comply, the Plan shall automatically be amended to contain any and all of the restrictions and limitations required by Rule 16b-3.  To the extent any action by the Committee fails to so comply, such action shall be deemed null and void to the extent permitted by law and deemed advisable by the Committee.
 
Expenses.  Any expenses of administering the Plan shall be borne by the Eligible Employers.
 
Construction.  Words used in the masculine shall apply to the feminine where applicable, and wherever the context of the Plan dictates, the plural shall be read as the singular and the singular as the plural.  The section headings contained in the Plan are for reference purposes only and shall not in any way affect the meaning or interpretation of the Plan.
 
Notice.  All notices, requests, demands, and other communications hereunder shall be in writing and shall be personally delivered, delivered by facsimile or courier service, or mailed, certified with first class postage prepaid to the address specified by the person who is to receive the same in the relevant Option Agreement.
 
Unless otherwise provided in an Option Agreement, each such notice, request, demand, or other communication hereunder shall be deemed to have been given (whether actually received or not) on the date of actual delivery thereof, if personally delivered or delivered by facsimile transmission (if receipt is confirmed at the time of such transmission by telephone or facsimile-machine-generated confirmation), or on the third day following the date of mailing, if mailed in accordance with this Section, or on the day specified for delivery to the courier service (if such day is one on which the courier service will give normal assurances that such specified delivery will be made).  Unless otherwise provided in an Option Agreement, any notice, request, demand, or other communication given, otherwise than in accordance with this Section shall be deemed to have been given on the date actually received.  Unless otherwise provided in an Option Agreement, any party may change its address for purposes of this Section by giving written notice of such change to all other persons who may be required or permitted to give any notice, request, demand, or other communication hereunder in the manner hereinabove provided.  Any Person entitled to any notice, request, demand, or other communication hereunder may waive the notice, request, demand, or other communication.
 
Calculation of Time.  In determining the time within which an event or action is to take place for purposes of the Plan, no fraction of a day shall be considered, and any act, the performance of which would fall on a day that is not a Business Day, may be performed on the following Business Day.
 
Successors.  The Plan shall be binding upon and shall inure to the benefit of the Company and its successors and assigns and on the Participants and their respective heirs, executors, administrators, and legal representatives to the extent set forth in the Plan.
 
 
16
 
 
 
[THIS SPACE LEFT BLANK INTENTIONALLY]
 

 
17
 
 
IN WITNESS WHEREOF, the Company has executed the Plan on September 1, 2012, to be effective as set forth in Section 9.1 above.
 
 
By: / s / Michael J. Borkowski  
   
 
Name: Michael J. Borkowski
   
 
Title: Chief Executive Officer/Director
 
 
ATTEST:
 

 
________________________________
                           Secretary
 

 
18
 

EXHIBIT “A”
 
CURRENT FORM OF SHAREHOLDERS’ AGREEMENT
 
STOCK OPTION AGREEMENT
 
This Stock Option Agreement (the “Agreement”) is made and entered into by and between Pristine Solutions, Inc., (the “Company”), and _________ (the “Participant”), as of the effective date of this Agreement specified on Schedule I hereof (the “Date of Grant”), pursuant to the Pristine Solutions, Inc. 2012 Stock Option Plan adopted effective September 1, 2012 (as the same may have been or hereafter be amended from time to time, the “Plan”).  Terms used herein with their initial letters capitalized that are defined in the Plan shall have the meaning given them in the Plan unless otherwise defined herein or the context hereof otherwise requires.
 
RECITALS:
 
A.   The Company has adopted the Plan to strengthen the ability of the Company to encourage ownership of the Company by certain employees of the Company and its Subsidiaries, to provide additional incentive for them to remain in the employ of the Company and its Subsidiaries, and to promote the growth and success of the Company and its Subsidiaries.
 
B.   The Committee that administers the Plan believes that the granting of the stock option herein described to Participant is consistent with the stated purposes for which the Plan was adopted.
 
NOW, THEREFORE, in consideration of the mutual covenants and conditions hereinafter set forth and for other good and valuable consideration, the Company and Participant agree as follows:
 
AGREEMENTS:
 
1.   Plan Controls .  The terms of this Agreement are governed by the terms of the Plan.  Participant hereby acknowledges receipt of a copy of the Plan, as amended through the date hereof.  The Company hereby agrees to furnish to Participant a copy of the Plan, as amended through the date of request therefor, without charge, on request to the Company at the address to which notices are to be sent to the Company.  In the case of any inconsistency between the terms of this Agreement and the terms of the Plan, the terms of the Plan shall govern.
 
2.   Grant of Option .  The Company hereby grants to Participant the right and option (the “Option”) to purchase an aggregate number of shares set forth on Schedule I hereof beside the caption “Number of Optioned Shares” (such number being subject to adjustment as provided in Section 9.6 of the Plan) of the Common Stock of the Company (the “Optioned Shares”) on the terms and conditions herein set forth.  If designated on Schedule I hereof as an Incentive Stock Option, this Option is intended to qualify as an Incentive Stock Option as defined in Section 422 of the Code, and this Agreement shall be interpreted accordingly.  By execution of this Agreement, the Participant accepts the grant of the Option.
 
 
B-1
 
3.   Exercise Price .  The price at which Participant shall be entitled to purchase the Optioned Shares shall be the dollar amount per share set forth on Schedule I hereof beside the caption “Exercise Price” (such exercise price being subject to adjustment as provided in Section 9.6 of the Plan).  The exercise price shall be paid with (a) cash (including check, bank draft, or money order); (b) if the use of shares of Common Stock is permitted according to Schedule I hereof or otherwise permitted by the Committee in writing, shares of Common Stock owned by Participant; or (c) any combination of the foregoing.
 
4.   Option Period .  The Option hereby granted shall be and remain in force and effect during the “Option Period.” The Option Period begins on the Date of Grant and terminates on the date that is ten years after the Date of Grant (or, if a different date is shown on Schedule I hereof beside the caption “Termination Date”, such date); subject, however to earlier termination as provided by the provisions of Article VII of the Plan and this Agreement (it being understood that this Agreement contains no express provision that would provide any of the greater or lesser rights that Article VII of the Plan permits to be provided in an Option Agreement except to the extent any variation therefrom is specifically set forth in the language beside the caption “Greater or Lesser Article VII Rights” on Schedule I hereof) (the date of any such termination being called herein the “Expiration Date”).
 
5.   Vesting Schedule .  The Option may be exercised, in whole or in part, from and after the following dates and prior to the Expiration Date.  Except only as specifically provided elsewhere herein or in the Plan, this Option shall be exercisable in the following cumulative installments:
 
Up to ____________ of the Optioned Shares at any time after the first ninety days of the Date of Grant;
 
Up to an additional ___________ of the Optioned Shares on or after the second ninety days of the Date of Grant;
 
Up to an additional ____________ of the Optioned Shares on or after the third ninety days of the Date of Grant; and
 
Up to an additional ____________ of the Optioned Shares on or after the fourth ninety days of the Date of Grant; and
 
Up to an additional ____________ of the Optioned Shares on or after the fifth ninety days of the Date of Grant; and
 
Up to an additional ____________ of the Optioned Shares on or after the sixth ninety days of the Date of Grant.
 
 
B-2
 
Up to ____________ of the Optioned Shares at any time after the seventh ninety days of the Date of Grant;
 
Up to an additional ___________ of the Optioned Shares on or after the eighth ninety days of the Date of Grant;
 
Up to an additional ____________ of the Optioned Shares on or after the ninth ninety days of the Date of Grant; and
 
Up to an additional ____________ of the Optioned Shares on or after the tenth ninety days of the Date of Grant; and
 
Up to an additional ____________ of the Optioned Shares on or after the eleventh ninety days of the Date of Grant; and
 
Up to an additional ____________ of the Optioned Shares on or after the twelfth ninety days of the Date of Grant.
 
6.   Nontransferability of Options .  Transfers of the Option are restricted as set forth in the Plan except to the extent, if any, transfers are expressly permitted in the language appearing beside the caption “Expanded Rights to Transfer Option” on Schedule I hereof.  The Participant agrees to comply with such restrictions.
 
7.   Nontransferability of, and Right to Acquire, Shares .  Except to the extent, if any, the language appearing beside the caption “Modifications to Transfer/Repurchase Provisions” on Schedule I hereof modifies the provisions thereof, the Stock Transfer/Repurchase Provisions, which are attached to the Plan as Exhibit A, govern transfers of the Shares acquired upon exercise of the Option and grant certain Persons the right to buy such Shares under certain circumstances.  The Participant agrees to comply with the Stock Transfer/Repurchase Provisions (if and as modified).
 
8.   Information Confidential .  As partial consideration for the granting of the Option, the Participant agrees with the Company to keep confidential all information and knowledge that the Participant has relating to the manner and amount of the Participant’s participation in the Plan; provided, however, that such information may be disclosed as required by law and may be given in confidence to the Participant’s spouse, the Participant’s tax and financial advisors, or financial institutions to the extent that such information is necessary to secure a loan.
 
9.   Administration .  This Agreement is subject to the terms and conditions of the Plan.  The Plan will be administered by the Committee in accordance with its terms.  The Committee has sole and complete discretion with respect to all matters reserved to it by the Plan and decisions of the Committee with respect to the Plan and to this Agreement shall be final and binding upon Participant and the Company.  In the event of any conflict between the terms and conditions of this Agreement and the Plan, the provisions of the Plan shall control.
 
 
B-3
 
10.   Continuation of Employment .  This Agreement shall not be construed to confer upon Participant any right to continue in the employ of the Company or any of its Subsidiaries and shall not limit the right of the Company or any of its Subsidiaries, in its sole discretion, to terminate the employment of Participant at any time.
 
11.   Notice .  All notices, requests, demands, and other communications hereunder shall be in writing and shall be personally delivered, delivered by facsimile or courier service, or mailed, certified with first class postage prepaid to the address specified by the person who is to receive the same.
 
Each such notice, request, demand, or other communication hereunder shall be deemed to have been given (whether actually received or not) on the date of actual delivery thereof, if personally delivered or delivered by facsimile transmission (if receipt is confirmed at the time of such transmission by telephone or facsimile-machine-generated confirmation), or on the third day following the date of mailing, if mailed in accordance with this Paragraph, or on the day specified for delivery to the courier service (if such day is one on which the courier service will give normal assurances that such specified delivery will be made).  Any notice, request, demand, or other communication given otherwise than in accordance with this Paragraph shall be deemed to have been given on the date actually received.  Either party to this Agreement may change its address for purposes of this Paragraph by giving written notice of such change to the other party in the manner herein above provided.  Any person entitled to any notice, request, demand, or other communication hereunder may waive the notice, request, demand, or other communication.  Until changed in accordance herewith, the Company and Participant specify their respective addresses as those set forth below their signatures at the end of this Agreement.
 
12.   Paragraph Headings .  The Paragraph headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.
 
13.   Governing Law and Venue .  THIS AGREEMENT SHALL AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEVADA WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF NEVADA OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE  OF NEVADA. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE PERSONAL JURISDICTION OF THE COURTS LOCATED IN THE STATE OF NEVADA AND AGREES THAT ANY LITIGATION BETWEEN THE PARTIES WILL BE FILED IN COURTS LOCATED IN RENO, NEVADA.
 
 
B-4
 
14.   Arbitration .  By execution hereof, the parties hereto expressly agree that upon the request of any party, whether made before or after the institution of any legal proceeding, any action, dispute, claim or controversy of any kind, whether in contract or in tort, statutory or common law, legal or equitable, arising between the parties in any way arising out of any of the provisions contained in this Agreement shall be resolved by binding arbitration administered by the American Arbitration Association (the “AAA”) and in Reno, Nevada.  Such arbitration shall be conducted in accordance with the Commercial Arbitration Rules of the AAA and, to the maximum extent applicable, the Federal Arbitration Act (Title 9 of the United States Code) except as otherwise specified herein.  Judgment upon the award rendered by the arbitrator may be entered in any court having competent jurisdiction.  The arbitrator shall resolve all disputes in accordance with the applicable substantive law.  A single arbitrator shall be chosen and shall decide the dispute, unless the amount sought in the dispute exceeds $100,000, in which case a panel of three arbitrators shall decide the dispute.  In all arbitration proceedings in which the amount of any award exceeds $100,000, in the aggregate, the arbitrator(s) shall make specific, written findings of fact and conclusions of law.  In all arbitration proceedings in which the amount of any award exceeds $100,000, in the aggregate, the parties shall have, in addition to the limited statutory right to seek a vacation or modification of an award pursuant to applicable law, the right to vacation or modification of any award that is based, in whole or in part, on an incorrect or erroneous ruling of law by appeal to an appropriate court having jurisdiction; provided, however, that any such application for a vacation or modification of such an award based on an incorrect ruling of law must be filed in a court having jurisdiction over the dispute within 15 days from the date the award is rendered.  The findings of fact of the arbitrator(s) shall be binding on all parties and shall not be subject to further review except as otherwise allowed by applicable law.  No provision of this Agreement nor the exercise of any rights hereunder shall limit the right of any party, and any party shall have the right during any dispute, to seek, use, and employ ancillary or preliminary remedies, such as injunctive relief (including, without limitation, specific performance), from a court having jurisdiction before, during, or after the pendency of any arbitration.  The institution and maintenance of any action for judicial relief or pursuit of provisional or ancillary remedies shall not constitute a waiver of the right of any party to submit any dispute to arbitration nor render inapplicable the compulsory arbitration provisions hereof.
 
15.   Attorney’s Fees .  If any action is brought to enforce or interpret the terms of this Agreement (including through arbitration), the prevailing party shall be entitled to reasonable attorneys’ fees, costs, and necessary disbursements in addition to any other relief to which such party may be entitled.
 
16.   Counterparts .  This Agreement may be executed in any number of counterparts and shall be effective when each party hereto has executed at least one counterpart, with the same effect as if all signing parties had signed the same document.  All counterparts will be construed together and evidence only one agreement, which, notwithstanding the actual date of execution of any counterpart, shall be deemed to be dated the day and year first written above.  In making proof of this Agreement, it shall not be necessary to account for a counterpart executed by any party other than the party against whom enforcement is sought or to account for more than one counterpart executed by the party against whom enforcement is sought.
 
17.   Execution by Facsimile .  The manual signature of any party hereto that is transmitted to any other party by facsimile shall be deemed for all purposes to be an original signature.
 
[THIS SPACE LEFT BLANK INTENTIONALLY]
 

 
 
B-5
 
 
Executed on the date or dates indicated below, to be effective as of September 1, 2012.

     
     
   By:
                                                                
     
   Name:
                                                                
     
   Title: 
                                                               
     
    Date:
 
     
    Address:
 
     
     
     
     
    Participant:
 
     
     
    Name:
 
     
    Date:
 
     
    Address:
 
 

 
 
B-6
 

SCHEDULE I

 
DATE OF GRANT:
 
September 1, 2012
TYPE OF OPTION:
Incentive Stock Option ______
   
 
Nonqualified Stock Option_________
NUMBER OF OPTIONED SHARES:
 
   
EXERCISE PRICE:
$ 00.00
 
TERMINATION DATE:
Fifth Anniversary of Date of Grant (Maximum term of 10 years; 5 years in the case of 10% shareholders)
 
PERMISSION TO PAY WITH SHARES:
________Granted                      Denied
 
EXPANDED RIGHTS TO TRANSFER OPTION:
 
________Granted                      Denied                      
GREATER OR LESSER ARTICLE VII RIGHTS:
None
 
I-1
 
 
PRISTINE SOLUTIONS, INC. 8-K
 
Exhibit 10.5
 
CONSULTING AGREEMENT
 
This Consulting Agreement (the "Agreement") is entered into as of this 12 th day of September, 2012 (the "Effective Date"), by and between Eaton Scientific Systems, Ltd. a Nevada corporation with offices at 9595 Wilshire Blvd. Suite 900 Beverly Hills, CA 90212 (or the "Company") and Dr. Jennifer Berman, MD, California corporation at 1125 S. Beverly Drive, Suite 720 Los Angeles, CA 90035 ("Consultant" or “Berman”) (together the "Parties").
 
WHEREAS , Consultant possesses certain skills and expertise;
 
WHEREAS,   Company wishes to retain the services of Consultant on the terms and conditions set forth below, and
 
WHEREAS , Consultant is willing to provide services to the Company, on the terms and conditions set forth below,
 
NOW, THEREFORE , the parties agree as follows:
 
Services.   Berman will perform the services set forth on Exhibit A, or as amended by mutual written agreement.  It is agreed and understood that the nature and manner of services provided hereunder shall be within Berman’s area of professional expertise and/or historical experience.
 
(a)          
Direction .  Berman shall be directed by and shall report to Michael J. Borkowski or his successor.
 
(b)          
Start Date .  Berman's consulting obligations to Company shall begin on October 1, 2012
 
(c)          
Term .  This Agreement shall commence on the Start Date and, unless earlier terminated in accordance with Section 15, shall continue up to and including October 1, 2013 (the "Term").  The Parties can automatically extend the Term in three-month increments upon mutual agreement. Any extension shall be in writing.
 
Method of Performance.   The Berman and Company shall determine the method, details, and means of performing and fulfilling her duties hereunder.
 
Other Employment .   The Company acknowledges and agrees that Berman may assume other commitments, and has ongoing or intends to obtain engagements outside of Berman's work for Company during the Term ("Other Engagements"); provided that Berman fully complies with the confidentiality obligations contained in Section 9.  Berman shall reasonably notify Company of any Other Engagements, which may pose a conflict of interest, it being understood that such notice shall allow Company sufficient basis to proceed in accordance with Section 15(b)(2), below.
 
Status as Independent Contractor; Nature of Relationship.   It is agreed and understood that the Consultant is an independent contractor and will not act as an agent nor shall she be deemed an employee of the Company for the purposes of any employee benefit programs, income tax withholding, FICA taxes, unemployment benefits, and worker’s compensation insurance, or otherwise.  Berman shall not enter into any agreement or incur any obligations on Company’s behalf, or commit Company in any manner without Company’s prior written consent.
 
 
 
 
Resources.   Berman shall provide such tools and facilities, as Berman may deem necessary in the performance of Berman's duties hereunder.  Upon Berman's reasonable request, the Company shall provide such incidental resources to Berman as the Company in its discretion believes may be warranted.
 
Compensation.   It is agreed and understood, that subject to the Term and performance and under Section 1, Berman shall be paid as set forth in Exhibit “A”. Berman shall be solely responsible for and agrees that he or she will in a timely fashion pay all federal, state and other taxes on the amounts set forth in this Section.
 
i)      
Cash.   Company will pay Berman a fee of five thousand (“$5,000”) dollars to be paid to Berman on a monthly basis for a period of six (6) months and then rise to $6,000 for six (6) months.
 
ii)      
Equity. Berman will receive, as part of his compensation stock options through the company’s Employee Stock Option Plan (“ESOP”).  Berman will be granted 6,210,000 Options with a strike price of ten ($.10) cents.  The Berman Options will vest on a quarterly basis for a period of two years.  The first Stock options are to be granted on January 1, 2013 in the amount of 887,142.  Each Quarter after that the Berman will have 887,142 of their Options Vest.
 
Expenses .    Berman will be reimbursed for the reasonable expenses she incurs directly in connection with services provided under this Agreement, following the submission of documentation evidencing and confirming such expenses.
 
  a.      Travel:   Company to provide in advance and make all arrangements for any required travel (including air transportation, ground transportation, hotel and $150 per diem) from Berman's residence to all media appearances/activities surrounding its program. 
 
i.     
Travel within a 75-mile radius of Berman's address for Company business or appearances on behalf of Company Berman shall have portal-to-portal ground transportation to and from appearances made available to her.
 
ii.      
Berman shall receive one (1) room accommodations in a three-star hotel for two (2) nights, unless travel requires a third night stay.
 
iii.      
Travel outside a 75 mile radius of Berman's address for Company business or appearances on behalf of Company;
 
iv.      
one (1) round-trip airfare (business class) and portal to portal ground transportation
 
v.      
one (1) room accommodations in a three-star hotel for two (2) nights, unless travel requires a third night stay,
 
vi.      
Any other costs beyond $150 per diem incurred by Berman will be her own responsibility
 
 
2
 
b.          Hair & Make-up:   A hair and make-up and wardrobe stylist(s) will be provided by Company for all on-camera media appearances. For local appearances in Los Angeles, Agency to Berman's hair/make-up person, Ms. Judy Haft, at her negotiated rate with Company per appearance.
 
Compliance with all Laws.   Berman agrees that in the course of providing his services to the Company, she will not engage in any practice or commit any acts in violation of any federal, state or local law or ordinance.
 
Non-Disclosure Obligations.
 
(d)          
Definition of "Information ."   “Information” shall mean materials, data, or information in any form, whether written, oral, digital, or otherwise, provided by or obtained from Company, Company's agents, or Company's contractors in connection with Berman's engagement by Company.  Technical or business information of a third person furnished or disclosed to Berman under this Agreement shall constitute Information of Company unless otherwise specifically indicated in writing.
 
(e)          
Confidential Information .   For purposes of this Agreement, the term "Confidential Information" shall mean Information regarding Company's business including, but not limited to, Information regarding diagnostic and medical device products, processing and manufacturing capabilities, copyrighted or patentable subject matter, research, development, innovations, inventions, designs, technology, improvements, trade secrets, business affairs and finances, customers, employees, operations, facilities, consumer markets, products, capacities, systems, procedures, security practices, data formats, and business methodologies.
 
(f)          
Berman's Obligations .   Berman shall maintain all Confidential Information relating to or obtained from Company by Berman in confidence, and Berman shall use best efforts to protect and safeguard the Confidential Information.
 
(g)          
Use of Confidential Information .   Without Company's prior written approval, Berman: (a) shall not use Confidential Information directly or indirectly for any purpose except in connection with the services Berman performs on behalf of Company; and (b) shall not disclose, sell, assign, transfer, share or lease Confidential Information of Company, or make such Confidential Information available to, or make it available for the use or benefit of, any third party.
 
(h)          
Exceptions to Confidentiality Obligations.   The obligations of this Agreement shall not apply to Confidential Information which Berman shall demonstrate, by clear and convincing evidence:
 
 
3
 
1.               
is or becomes publicly available (other than through unauthorized disclosure under this Agreement);
 
2.             
is already known by Berman without an obligation of confidentiality prior to the disclosure thereof by Company, as evidenced by Berman's written records, maintained in the ordinary course, existing before the first date of Berman's engagement with Company; or
 
3.              
is rightfully received by Berman from a third party free of any obligation of confidentiality.
 
Former Engagement Information .  Berman shall not, during Berman's engagement with the Company, improperly use or disclose any proprietary information or trade secrets of any former employer, hiring party, or other person or entity with which Berman has an agreement or duty to keep in confidence, if any, and shall not bring onto the premises of the Company any unpublished document or proprietary information belonging to any such employer, person or entity unless consented to in writing by such employer, person, hiring party, or entity.
 
Court or Agency Order .   In the event Berman receives a subpoena or order of a court or administrative body requesting disclosure of Company’s Confidential Information, Berman agrees (a) that, as promptly as possible after learning of such disclosure obligation and before making such disclosure, Berman shall notify Company of such obligation to make such disclosure, to allow Company an opportunity to object to such disclosure or to obtain a protective order or other appropriate relief; (b) that Berman shall provide such cooperation and assistance, at Company's expense, as Company may reasonably request in any effort by Company to obtain such relief; and (c) that Berman shall take all appropriate steps to limit the amount and scope of Confidential Information so disclosed and to protect its confidentiality.
 
Non-Solicitation.   Berman agrees not to solicit or encourage employees of the Company to work for a Competitor during the Term, and for a period of one year after expiration of the Term. "Competitor" means any person or organization, including Berman herself, engaged in, or about to become engaged in, research on or the acquisition, development, production, distribution, marketing or providing of a Competing Product.  "Competing Product" means any product, process, or service of any person or organization other than the Company, in existence or under development, which both (A) is identical to, substantially the same as, or an adequate substitute for any product, process, or service of the Company, in existence or under development, on which Berman works during the Term or about which Berman acquires Confidential Information, and (B) is (or could reasonably be anticipated to be) marketed or distributed in such a manner and in such a geographic area as to actually compete with such product, process or service of the Company.
 
Patent and Copyright Registration.   Berman agrees to assist the Company, or its designee, at the Company’s expense, in every reasonable way to secure the Company’s rights in the Inventions and any copyrights, patents, mask work rights or other intellectual property rights relating thereto in any and all countries, including the disclosure to the Company of all pertinent information and data with respect thereto and the execution of all applications, specifications, oaths, assignments and all other instruments which the Company shall deem necessary in order to apply for and obtain such rights and in order to assign and convey to the Company, its successors, assigns and nominees the sole and exclusive rights, title and interest in and to such Inventions, and any copyrights, patents, mask work rights or other intellectual property rights relating thereto.
 
 
4
 
Termination.   This Agreement may be terminated without liability as follows:
 
(i)          
For Cause .  If either Party is in material breach, the non-breaching party may terminate this Agreement upon providing the breaching party (a) with written notice, specifying the breach, and (b) with a ten (10) day opportunity to cure, commencing upon the effective date of such notice.
 
Survival.   The following provisions shall survive the expiration or termination of this Agreement:  Sections the applicable part of 6 (success fee) 9, 11, 12, 14, and 17.
 
Return of Property .   Berman expressly agrees that upon completion of his or her consulting services under this Agreement, or at any time prior to that time upon request of the Company, Berman will return to the Company all property of the Company obtained or received by Berman during the Term of this Agreement including, but not limited to, any and all files, computers, computer equipment, software, diskettes or other storage media, documents, papers, records, notes, agenda, memoranda, plans, calendars and other books and records of any kind and nature whatsoever containing information concerning the Company or its customers or operations.
 
No Oral Modification .   This Agreement may not be changed orally, and no modification, amendment, or waiver of any provision contained in this Agreement, or any future representation, promise, or condition in connection with the subject matter of this Agreement shall be binding upon any party hereto, unless made in writing and signed by such party.
 
Entire Agreement .   This Agreement contains the entire agreement between the Parties and supersedes any and all previous agreements of any kind whatsoever between them, whether written or oral, and all prior and contemporaneous discussions and negotiations have been and are merged and integrated into, and are superseded by, this Agreement.  This is an integrated document.
 
Severability .  In the event that any provision of this Agreement or the application thereof should be held to be void, voidable, unlawful or, for any reason, unenforceable, the remaining portion and application shall remain in full force and effect, and to that end the provisions of this Agreement are declared to be severable.
 
Governing Law .   This Agreement is made and entered into, and shall be subject to, governed by, and interpreted in accordance with the laws of the Commonwealth of California and shall be fully enforceable in the courts of that state, without regard to principles of conflict of laws.  The Parties (i) agree that any suit, action or other legal proceeding arising out of this Agreement may be brought in the United States District Court for the District of California, or if such court does not have jurisdiction or will not accept jurisdiction, in any court of general jurisdiction in Los Angeles County, California; (ii) consent to the jurisdiction of any such court; and (iii) waive any objection which they may have to the laying of venue in any such court.  The Parties also consent to the service of process, pleadings, notices or other papers by regular mail, addressed to the party to be served, postage prepaid, and registered or certified with return receipt requested.
 
 
5
 
Notices .   All notices, requests, consents, approvals and other communications required or permitted under this Agreement ("Notices") shall be in writing and shall be delivered to the addresses listed above, by mail, by hand, or by facsimile transmission, unless otherwise provided in this Agreement.  Such Notices shall be effective (i) if sent by mail, three business days after mailing; (ii) if sent by hand, on the date of delivery; and (iii) if sent by facsimile, on the date indicated on the facsimile confirmation.  Any party may change its address or facsimile number for notification purposes by giving all of the individuals and entities noted above notice, in accordance with the notice provisions set forth in this Section, of the new address or facsimile number and the date upon which it will become effective.
 
No Assignment .   Neither this Agreement nor any portion hereof is assignable.
 
Counterparts.   This Agreement may be executed in counterparts, and each counterpart, when executed, shall have the effect of a signed original.
 
(The remainder of the page is left blank intentionally)
 

 
6
 
 
IN WITNESS WHEREOF , the Parties hereto have caused this Agreement to be executed by the undersigned duly authorized persons as of the day and year above stated.

EATON SCIENTIFIC SYSTEMS, LTD.


By: /s/ Michael J. Borkowski
Name: Michael J. Borkowski
Title:   CEO


CONSULTANT


/s/ Dr. Jennifer R Berman MD
Dr. Jennifer R. Berman MD
 
 
 
 



EXHIBIT “A”
 
CONSULTANT SERVICES
 
AND
 
PAYMENT SCHEDULE
 

 
CONSULTANT SERVICES
 
Berman shall provide services that shall include but not limited to the following:
 
1.     
Advocate for the Company and Tropine 3 in media and press and in medical arenas where applicable.  This would include media interviews, written interviews in press, both online and traditional media.
 
2.     
Answer questions received from queries sent to her at the Company’s website.
 
 
7
 
3.     
Contribute to the Company’s Blog on its website on issues pertaining to women’s healthcare, women’s sexual health and issues pertaining to menopause.
 
4.     
Allow her picture to be used (one that is approved and submitted by Berman) on the Company’s website.
 
5.     
Participate in a web video presentation on women’s issues as they pertain to menopause and Tropine 3.
 
6.     
Provide insight to the Company’s management on the current state of Women’s Health market in general and the menopause, peri-menopause and post-menopause market.
 
7   .  
Inform her patients to the availability of the Tropine 3 products.
 
PAYMENT SCHEDULE
 
1.           Monthly Cash Compensation.      Berman shall receive $5,000 (five thousand) per month for six (6) months commencing October 1, 2012 with the final payment of $5,000 to make on March 1, 2013. From April 1, 2013 to September 1, 2013 Berman shall receive $6,000 (six thousand) per month. From October 1, 2013 to March 1, 2014 Berman shall receive $7,500 (seven thousand and five hundred) per month. If both parties agree to extend the contract for an additional six months commencing on April 1, 2014 and ending on September 1, 2014, then Berman’s compensation will continue at the rate of $7500 (seven thousand and five hundred) per month.  The cash compensation shall be negotiated in Good Faith between the Company and Berman for the period between October 1, 2014, and October 31, 2015 From   Payment shall be made on the fifth (5 th ) of each month for a period of eighteen (18) months.
 
2.           Berman shall receive her ESOP stock Options no later than November 1, 2012.
 
8  

 

PRISTINE SOLUTIONS, INC. 8-K
 
 
Exhibit 10.6
 
 
 
 
PRISTINE SOLUTIONS, INC. 8-K
 
Exhibit 10.7
 

EMPLOYMENT AGREEMENT

This Employment Agreement (“Agreement”), dated as of September 1, 2012 (the “Effective Date”), is made by and among Michael J. Borkowski (“Executive”) an individual at 6365 Collins Avenue, Suite 3403 Miami Beach, Florida 33141 and Pristine Solutions, Inc., a Nevada corporation (the “Company”) at 9595 Wilshire Blvd Suite 900 Beverly Hills, CA 90212.

WHEREAS , Executive will be employed by the Company as its President and Chief Executive Officer (CEO) and will continue to maintain the position as sole director of the Company until such time as new directors are elected to the Board.


WHEREAS , the Board of Directors of the Company desire to enter into an employment agreement with Executive, which employment agreement from   September 1, 2012 through September 1 2015; and


WHEREAS , the agreed upon terms and conditions of Executive’s continued employment are embodied in this Agreement.

NOW THEREFORE , for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Executive do hereby agree as follows:

Section 1. Employment and Duties .  On the terms and subject to the conditions set forth in this Agreement, subject to the approval and ratification of Board of Directors, such approvals to be obtained prior September 1, 2012 to the Effective Date, the Company agrees to employ Executive as its Chief Executive Officer to render such services as would be customary and to render such other services and discharge such other responsibilities as the Board of Directors of the Company may, from time to time, stipulate and which shall not be inconsistent with the position listed above.

Section 2.   Performance .  (a) Executive accepts the employment as set forth in Section 1 herein and agrees to concentrate all of his/her professional time and efforts to the performance of the services described therein, including the performance of such other services and responsibilities as the Board of Directors of the Company may from time to time stipulate and which shall not be inconsistent with the position listed above.

(b) Without limiting the generality of the foregoing, Executive ordinarily shall devote not less than five (5) days per week (except for vacations and regular business holidays observed by the Company) on a full-time basis, during normal business hours Monday through Friday. Executive further agrees that when the performance of his/her duties reasonably requires, he/she shall be present on the Company’s premises or engaged in service to or on behalf of the Company at such times except during vacations, regular business holidays or weekends.

 
Page 1 of 11
 
Section 3.   Term/Termination .
3.1 Term . The term of employment under this Agreement (the “Employment Period”) shall commence on September 1 st 2012 and terminate on September 1 st 2015, unless earlier terminated pursuant to the termination provisions set forth herein. Notwithstanding anything to the contrary herein, the parties acknowledge and agree that Executive’s employment may be terminated by the Company only for Due Cause (as hereinafter defined). At the end of the Employment Period, the continuation of Executive’s employment with the Company shall be at the will of the Company and Executive on terms and conditions agreed to by the Company and Executive and there shall be no obligation on the part of the Company or Executive to continue such employment, provided, however, that not later than September 1 st , 2013, the Company and Executive shall provide to each other reasonably specific notice of their respective intentions with regard to continuation of Executive’s employment subsequent to the Employment Period.

3.2 Termination for Due Cause . The Employment Period may be terminated for Due Cause only for the following reasons and upon the terms and conditions set forth in this Section 3.2. The Company, by a vote of a majority of the Board of Directors (a “Termination Vote”) may terminate the Employment Period, effective upon written notice of such termination to Executive, such notice made pursuant to Section 7 herein, in the event of (i) a material breach by Executive of his fiduciary duty or duty of loyalty to Company or of his covenants under this Agreement if such material breach is not remedied within fifteen (15) calendar days following written notice by the Company; (ii) the failure of Executive to comply with any material term of this Agreement which materially adversely affects the Company; (iii) commission by Executive of theft or embezzlement of property of the Company or other acts of dishonesty of a material nature and/or commission by Executive of a crime resulting in a material injury to the businesses, properties or reputations of the Company or any of its affiliates; (iv) commission of an act by Executive in the performance of his duties hereunder reasonably determined by a majority of the board of directors of the Company to constitute gross, willful or wanton negligence; (v) willful refusal to perform or substantial neglect of the duties assigned to Executive pursuant to Section 1 of this Agreement if such refusal or neglect is not remedied within fifteen (15) calendar days following written notice by the Company; or (vi) any significant violation of any statutory or common law duty of loyalty to the Company or its affiliates. All compensation paid to Executive shall immediately cease upon termination for Due Cause hereunder except accrued and unpaid compensation and all unvested Stock Options shall immediately expire.

3.3 Termination Due to Death . The Employment Period shall be terminated upon the death of Executive. All compensation paid to Executive shall immediately cease upon such termination except for accrued and unpaid compensation pursuant to Section 4.1 herein and earned but unpaid bonus payments pursuant to Section 4.2 herein. All unvested Stock Options shall immediately become vested.

3.4 Termination Due to Permanent Total Disability . The Employment Period shall be terminated upon the Permanent Total Disability (as defined in this Section 3.4) of Executive following written notice from the Company. Permanent Total Disability is defined as an inability by Executive to perform substantially all of the services required pursuant to this Agreement for a continuous period of ninety (90) days or for a period aggregating at ninety (90) days in any consecutive twelve (12) month period when such inability is caused by illness or a physical or mental disability. Such Permanent Total Disability shall be determined by a physician selected jointly by the parties hereto. All unvested Stock Options shall immediately become vested.

 
Page 2 of 11
 
3.5 Termination Other Than Due Cause, Death, Disability or Resignation .  In the event that Executive’s employment is terminated for reasons other than Due Cause, or resignation, then all Stock Options scheduled to vest within one year of the date of such termination shall vest immediately and the Company shall pay as severance compensation to Executive six (6) months salary compensation at his then annual salary compensation rate, including bonus earned as of the termination date. Any severance compensation paid to Executive shall be paid ratably over the remaining payment period following termination. Any bonus compensation earned as of the termination date shall be paid to Executive pursuant to the bonus payment schedule set forth in Section 4.2 herein.

3.6 Termination by Executive . Executive may terminate the Employment Period (i) in the event the Company has breached a material term or condition of this Agreement which is not cured or remedied within thirty (30) days following written notice by Executive to Board of Directors of Company of such breach or (ii) at Executive’s convenience. In the event that Executive’s resignation is due to an uncured breach by the Company, such resignation shall be deemed a termination by the Company as without Due Cause for purposes of vesting of Stock Options pursuant to Section 4.3 herein and for payments of salary and bonus compensation as set forth in Sections 4.1 and 4.2, respectively, herein. In the event that the Employment Period is terminated by Executive at his convenience, then Executive will be due any earned but unpaid salary, vacation and bonus compensation as set forth in Sections 4.1, 4,2, and 4.3, respectively, herein.

3.7 Surrender of Position and Properties .  Upon termination of Executive’s employment with the Company, regardless of the cause therefore, Executive shall promptly be deemed to have resigned from the Company’s Board of Directors and as an officer and director of any of the Company’s affiliates, if serving as such at that time, and shall surrender to the Company or its affiliates all property provided to him by the Company or its affiliates, as applicable, for use in relation to his employment and further, Executive shall surrender to the Company or its affiliates, as applicable, any and all sales materials, lists of customers and prospective customers, investment performance reports, files, patent applications, records, models or other materials and information of or pertaining to the Company or its affiliates or their customers or prospective customers or the products, businesses and operations of the Company or its affiliates.

3.8 Survival of Covenants . The covenants of Executive set forth in Section 5 herein shall survive the termination of the Employment Period or termination of this Agreement.

 
Page 3 of 11
 
Section 4.   Compensation/Expenses .
4.1 Salary . In exchange for the services to be rendered by Executive hereunder, the Company agrees to pay, during the Employment Period, a salary at an annual rate of $72,000 at such intervals as may be consistent with the Company’s normal compensation schedule, but not less than once per month.

4.2 Bonus.

(a) The Company shall establish an annual bonus plan of which certain management employees of the Company shall be eligible to participate, which annual bonus plan shall comprise a calendar year (the “Plan Year”). Executive will be eligible to participate in such annual bonus plan during the term of this Agreement with goals (the “Annual Goals”) established and approved by the Board of Directors. Pursuant to this annual bonus plan, Executive shall be eligible for discretionary performance and incentive bonuses if and as may be determined in the sole discretion of the Board of Directors of the Company.  The goals that shall be tied to the Company’s Long Term Financial Pro forma and shall serve as the basis of evaluation for any payments awarded pursuant to the Company’s annual bonus plan shall be established and approved by the Board of Directors. At the conclusion of the Plan Year, the Board of Directors shall determine the level of success achieved by the Executive against the Annual Goals and recommend the amount of the annual bonus plan payment.  If Executive’s employment is terminated for reasons other than Due Cause or his voluntary resignation, he will be entitled to receive any bonus earned up to the date of termination as reasonably determined by the Board of Directors.  All payments related to the annual bonus plan are subject to the prior approval by the Board of Directors and the Company’s ability to make such payments when considering the cash position of the Company.

(b) Borkowski will receive a One Hundred Thousand Dollar ($100,000) bonus if the Company’s Tropine 3 receives FDA Approval for commercial sale and marketing.

4.3 Stock .  The Company hereby grants, as part of the Company’s Employee Stock Option Plan (ESOP), to Executive the right to purchase the Company’s common stock at ten ($0.10) Cents per share. As of the Effective Date of this Agreement, the Company grants Executive five million (5,000,000) options of Company’s common stock on a one-for-one conversation as of September 1, 2012.  The Executive Options will vest on a quarterly basis over a three-year period.

a) Accelerated Vesting of Options.  Upon the sale, merger or any transaction resulting in the majority of the Company stock being obtained, then all of the Executives’ options not vested will vest immediately and become exercisable.

4.4 Business Expenses . Executive shall be reimbursed for business-related expenses that he incurs pursuant to his employment with the Company, such expenses to be timely submitted and reasonable, and subject to the Company’s then standing Expense Reimbursement Policy and the review and approval of the Board of Directors or its authorized designate. Executive shall provide the Company with expense reports detailing business-related expenses and supporting documentation and other substantiation of such expenses that conform to the reporting requirements of the Company and requirements of the Internal Revenue Service.  Borkowski is located in the state of Florida and Borkowski will not have to relocate.  Borkowski as part of this engagement is required to commute to Company and shall have expenses paid accordingly.

 
Page 4 of 11
 
4.5 Vacation .   Executive shall be entitled to vacations in accordance with Company policy in effect from time to time.  Until written policies are adopted, Borkowski will accrue two (2) weeks vacation during the Initial Term and three (3) weeks vacation during each Additional Term.

Section 5. Covenants of Executive .

5.1 Confidentiality . During the Employment Period and following the termination thereof for any reason, Executive shall not disclose or make any use of, for his own benefit or for the benefit of a business or entity other than the Company or its affiliates, any secret or confidential information, lists of customers and prospective customers or any other information of or pertaining to the Company or its affiliates that is not generally known within the trade of the Company or its affiliates or which is not publicly available.

5.2 Inventions and Secrecy . Except as otherwise provided in this Section 5.2, Executive (i) shall hold in a fiduciary capacity for the benefit of the Company and its affiliates, all secret and confidential information, knowledge, or data of the Company and its affiliates obtained by Executive during his employment by the Company, which is not generally know to the public or recognized as standard practice (whether or not developed by Executive) and shall not, during his employment by the Company and following the termination of such employment for any reason, communicate or divulge any such information, knowledge or data to any person or entity other than the Company or its affiliates or persons or entities designated by the Company; (ii) shall promptly disclose to the Company all inventions, ideas, devices and processes made or conceived by him along or jointly with others, from the time of entering the Company’s employ and until such employment is terminated and for a one (1) year period following such termination, relevant or pertinent in any way, whether directly or indirectly, to the Company or its affiliates or resulting from or suggested by any work which he may have done for or at the request of the Company or its affiliates; (iii) shall at all times during his employment with the Company, assist the Company and its affiliates in every proper way (at the expense of the Company) to obtain and develop for the benefit of the Company inventions, ideas, devices and processes, whether or not patented; and (iv) shall perform all such acts and execute, acknowledge and deliver all such instruments as may be necessary or desirable in the opinion of the Company to vest in the Company, the entire interest in such inventions, ideas, devices and processes referred to in this Section 5.2.  Executive and Company each agree that all documents, reports, files, analyses, drawings, designs, tools, equipment, plans (including, without limitation, marketing and sales plans), proposals, customer lists, computer software or hardware, and similar materials that are made by Executive or come into his or its possession by reason of and during the term of Executive’s engagement with Company are the property of Company and will not be used by his in any way adverse to Company’s interests.  Executive also agrees not to allow any such documents or things, or any copies, reproductions or summaries to be delivered to or used by any third party without the specific consent of Company.  Executive agrees to deliver to the Company, upon demand, and in any event upon the termination of Executive’s engagement, all of such documents and things which are in Executive’s possession or under his or its control.  Executive expressly agrees that all of his work product shall be and remain the sole and exclusive property of the Company.  Accordingly, all work products eligible for any form of copyright protection shall be deemed a “work made for hire” under the copyright laws and shall be owned by the Company.

 
Page 5 of 11
 
5.3 Competition Following Termination . For the six month period (severance period) following termination, for any reason, of Executive’s employment with the Company, Executive shall not, without the prior written consent of the Company, which consent may be withheld at the sole discretion of the Company, (i) engage directly or indirectly, whether as an officer, director, stockholder (of 10% or more of such entity), partner, majority owner, managerial employee, creditor, or otherwise with the operation, management or conduct of any business that competes with the businesses of the Company   or its affiliates being conducted at the time of such termination; (ii) solicit, contact, interfere with, or divert any customer served by the Company or its affiliates, or any prospective customer identified by or on behalf of the Company or its affiliates (such customers and prospective customers existing or identified by the Company as of the date of Executive’s termination) if such intention is to divert business from or compete with the Company; or (iii) solicit any person then or previously employed by the Company or its affiliates to join Executive, whether as a partner, agent, employee or otherwise, in any enterprise engaged in a business similar to the businesses of the Company or its affiliates being conducted at the time of such termination.

5.4 Acknowledgement .  Executive acknowledges that the restrictions set forth in this Section 5 are reasonable in scope and essential to the preservation of the businesses and proprietary properties of the Company and its affiliates and that the enforcement thereof will not in any manner preclude Executive, in the event of his termination of employment with the Company, from becoming gainfully employed in such manner and to such extent as to provide a reasonable standard of living for himself, the members of his family and those dependent upon him of at least the sort and fashion to which he and they have become accustomed and may expect.

5.5 Severability - Covenants . The covenants of Executive contained in this Section 5 shall each be construed as any agreement independent of any other provision in this Agreement and the existence of any claim or cause of action of Executive against the Company or its affiliates, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company or its affiliates of such covenants. The parties hereto expressly agree and contract that it is not the intention of any party to violate any public policy, statutory or common law, and that if any sentence, paragraph, clause or combination of the same of this Agreement is in violation of the law of any state where applicable, such sentence, paragraph, clause or combination of the same shall be void in the jurisdictions where it is unlawful and the remainder of such provision and this Agreement shall remain binding on the parties to make the covenants of this Agreement binding only to the extent that it may be lawfully done under existing applicable laws. In the event that any part of any covenant of this Agreement is determined by a court of law to be overly broad thereby making the covenant unenforceable, the parties hereto agree, and it is their desire, that such court shall substitute a judicially enforceable limitation in its place, and that as so modified the covenant shall be binding upon the parties as if originally set forth herein.

 
Page 6 of 11
 
Section 6.   Indemnification .  In addition to any rights Executive may have under the Company's charter or by-laws, the Company agrees to indemnify Executive and hold Executive harmless, both during the Term and thereafter, against all costs, expenses (including, without limitation, fines, excise taxes and attorneys' and accountants’ fees) and liabilities (other than settlements to which the Company does not consent, which consent shall not be unreasonably withheld) (collectively, "Losses") reasonably incurred by Executive in connection with any claim, action, proceeding or investigation brought against or involving Executive with respect to, arising out of or in any way relating to Executive's employment with the Company or Executive's service as a director of the Company; provided, however, that the Company shall not be required to indemnify Executive for Losses incurred as a result of Executive's intentional misconduct or gross negligence (other than matters where Executive acted in good faith and in a manner he reasonably believed to be in and not opposed to the Company's best interests). Executive shall promptly notify the Company of any claim, action, proceeding or investigation under this paragraph and the Company shall be entitled to participate in the defense of any such claim, action, proceeding or investigation and, if it so chooses, to assume the defense with counsel selected by the Company; provided that Executive shall have the right to employ counsel to represent him (at the Company's expense) if Company counsel would have a "conflict of interest" in representing both the Company and Executive. The Company shall not settle or compromise any claim, action, proceeding or investigation without Executive's consent, which consent shall not be unreasonably withheld; provided, however, that such consent shall not be required if the settlement entails only the payment of money and the Company fully indemnifies Executive in connection therewith. The Company further agrees to advance any and all expenses (including, without limitation, the fees and expenses of counsel) reasonably incurred by the Executive in connection with any such claim, action, proceeding or investigation. The Company currently maintains a policy of directors' and officers' liability insurance covering Executive and, notwithstanding the expiration or earlier termination of this Agreement, the Company shall maintain a directors' and officers' liability insurance policy covering Executive for a period of time following such expiration or earlier termination equal to the statute of limitations for any claim that may be asserted against Executive for which coverage is available under such directors' and officers' liability insurance policy. The provisions of this paragraph shall survive the termination of this Agreement for any reason.

 
Page 7 of 11
 
Section 7.   Notice . Any notice required or permitted hereunder shall be made in writing (i) either by actual delivery of the notice into the hands of the party hereunder entitled, or (ii) by the mailing of the notice in the United States mail, certified mail, return receipt requested, all postage prepaid and addressed to the party to whom the notice is to be given at the party’s respective address set forth below, or such other address as the parties may from time to time designate by written notice as provided herein and (iii) via facsimile to the fax number provided by the Parties below with a confirmation receipt.  Notice will hereby be deemed to be satisfied via the delivery of any of the methods listed above.

If to the Company :

Pristine Solutions, Inc.

Address:   9595 Wilshire Blvd, Suite 900
   Beverly Hills, CA 90212
   Facsimile:

If to the Company General Counsel:

Attn: Lawrence Washor
Address:

Facsimile

If to Executive :

Oracle Capital Partners, LLC in care of Michael J. Borkowski

Address:   6365 Collins Avenue Suite 3403
   Miami Beach, CA 33141
   Facsimile:

The notice shall be deemed to be received in case (i) on the date of actual receipt by the party and in case (ii) three days following the date of the mailing.

Section 8. Amendment and Waiver .  No amendment or modification of this Agreement shall be valid or binding upon: (i) the Company unless made in writing and signed by an officer of the Company, duly authorized by the Board of Directors of the Company or; (ii) Executive unless made in writing and signed by him. The waiver by the Company or Executive of the breach of any Provision of this Agreement by the other party shall not operate or be construed as a waiver of any subsequent breach of such party.

 
Page 8 of 11
 
Section 9. Governing Law/Waiver of Claims/Arbitration . (a) The validity and effect of this Agreement and the rights and obligations of the parties hereto shall be governed by, and construed in accordance with, the laws of the State of Nevada without giving effect to the principles of conflicts of laws thereof.

(b) Each Party to this Agreement hereby waives any claim it may have on such other Party due to any past business dealings between the Parties prior to the Effective Date of this Agreement .  Additionally, the parties hereto agree that in the event of any and all disagreements and controversies arising from this Agreement or any other agreements between the Company and Executive the breach, termination or validity thereof or the  present and future dealings between the parties, such disagreements and controversies shall be subject to a two step mediation and binding arbitration process.  The first step will be to a one time mediations session to be held in accordance with the Nevada Bar Associations Mediation guidelines and to be heard in front of a Mediation expert that has been practicing for a period of at least 5 years.  If the Parties fail to resolve their dispute via Mediation, the Parties agree to a second step of binding arbitration as arbitrated in accordance with the then current Commercial Arbitration Rules of the American Arbitration Association (the “AAA”) to be held in Las Vegas, Nevada before one neutral arbitrator. Such arbitrator shall be selected by mutual agreement of the parties within thirty days of written notice of a continuing dispute following mediation of said disagreement or controversy. If the parties cannot mutually agree to an arbitrator within thirty days, then the AAA shall designate the arbitrator. Either party may apply to the arbitrator seeking injunctive relief until the arbitration award is rendered or the controversy is otherwise resolved. Without waiving any remedy under this Agreement, either party may also seek from any court having jurisdiction any interim or provisional relief that is necessary to protect the rights or property of that party, pending the establishment of the arbitral tribunal (or pending the arbitral tribunal’s determination of the merits of the controversy). In the event of any such disagreement or controversy, neither party shall directly or indirectly reveal, report, publish or disclose any information relating to such disagreement or controversy to any person, firm or corporation not expressly authorized by the other party to receive such information or use such information or assist any other person in doing so, except to comply with actual legal obligations of such party or unless such disclosure is directly related to an arbitration proceeding as provided herein, including, but not limited to, the prosecution or defense of any claim in such arbitration. The costs and expenses of the arbitration (excluding attorneys’ fees) shall be paid by the non-prevailing Party or as determined by the arbitrator. This paragraph shall survive the termination of this Agreement.

Section 10. Entire Agreement . This Agreement contains all of the terms agreed upon by the parties with respect to the subject matter hereof and supersedes all prior agreements, arrangements and communications between the parties dealing with such subject matter, whether oral or written, but limited to the Employment Period.

Section 11. Reservation of Right . Notwithstanding any other provision of this Agreement, Company reserves the right to modify, suspend or discontinue any and all benefit plans, practices, policies and programs at any time whether before or after termination of this Agreement without advance notice to or recourse by Executive.

 
Page 9 of 11
 
Section 12. Binding Effect .  This Agreement shall be binding upon and shall inure to the benefit of the transferees, successors and assigns of the Company, including any company or entity with which the Company may merge or consolidate.

Section 13. Remedies for Breach . Executive acknowledges that his services pursuant to this Agreement are unique and extraordinary and that irreparable injury will result to the Company and its businesses and properties in the event of a material breach of the terms and conditions of this Agreement to be performed by him, the Company shall be entitled, if it so elects, to institute and prosecute proceedings in any court of competent jurisdiction, either at law or in equity, to enjoin him from performing services for any other person or entity in violation of any of the terms of this Agreement, and to obtain damages for any breach of this Agreement. In the event of a material breach by the Company of any of the terms and conditions of this Agreement to be performed by it, Executive shall have all remedies, legal or equitable, available to him under the laws of the State of Nevada. The remedies provided herein shall be cumulative and in addition to any and all other remedies which either party may have at law or in equity.

Section 14. Costs of Enforcement . In the event of any suit or proceeding seeking to enforce the terms, covenants or conditions of this Agreement, the prevailing party shall, in addition to all other remedies and relief that may be available pursuant to this Agreement or applicable law, recover his or its reasonable attorneys’ fees and costs as shall be determined and awarded by an arbitrator or court, as the case may be.

Section 15. Headings . Numbers and titles to paragraphs hereof are for information purposes only and, where inconsistent with the text, are to be disregarded.

Section 16. Severability – General . If any provision of this Agreement or the application of any such provision to any person or circumstance shall be held invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision hereof

Section 17. Counterparts . This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which together shall be deemed to be one and the same agreement.


Signatures on the following page
 
Page 10 of 11
 
 
IN WITNESS WHEREOF , the parties hereto have caused this Agreement to be executed on the date first set forth above.


Pristine Solutions, Inc.

By:            / s/ Michael J. Borkowski

Printed:  Michael J. Borkowski

Title:       Chief Executive Officer

Date:        September   1, 2012



Michael J. Borkowski


By:       / s/ Michael J. Borkowski

Printed:   Michael J. Borkowski

Title:        Individual

Date:        September 1, 2012
 
Page 11 of 11
 




PRISTINE SOLUTIONS, INC. 8-K
 
 
Exhibit 10.8
 
PATENT ASSIGNMENT  

This assignment made on September 19, 2006 by Hootan Melamed of Beverly Hills, California, and Edward W. Withrow, III of Westlake Village, California (Assignors) to Eaton Scientific Systems, Ltd., a California corporation, having a place of business at 521 Toro Canyon Rd, Montecito, California 93108 (Assignee);

WHEREAS, Assignors have invented a new, original and useful invention entitled HOMATROPINE ORAL SUSPENSION (Invention(s)), for which a Unites States patent application will be filed, further identified by Cislo & Thomas llp ’s Docket No. 06-17254 (U.S. Patent Application);

WHEREAS, Assignors believe themselves to be the original, first, and joint inventors of the Invention(s) disclosed and claimed in the Patent Application(s); and

WHEREAS, Assignee desires to acquire by formal, recordable assignment the entire right, title, and interest in and to said Invention(s), and said Patent Application(s) in the United States and throughout the world.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignors hereby sell, assign, and transfer to Assignee,   the entire right, title, and interest in and to said Invention(s), and said Patent Application(s) for said Invention(s) in the United States and throughout the world, including the right to file foreign applications directly in the name of Assignee and to claim for any such foreign applications any priority rights to which such applications are entitled under international conventions, treaties, or otherwise.

Page 1 of 2
 
 
Further Assignors agree that, upon request and without further compensation, but at no expense to Assignors, they and their legal representatives and assigns will do all lawful acts, including the execution of papers and the giving of testimony, that may be necessary or desirable for obtaining, sustaining, reissuing, or enforcing said Patent Application(s) in the United States and throughout the world for said Invention(s), and for perfecting, recording, or maintaining the title of Assignee, their successors and assigns, to said Invention(s), and said Patent Application(s) filed, and any patents granted for said Invention(s) in the United States and throughout the world.

Assignors represent and warrant that they have not granted and will not grant to others any rights inconsistent with the rights granted herein.

Assignors authorize and request the Commissioner of Patents and Trademarks of the United States and of all foreign countries to issue any Patent granted for said Invention(s), whether on another patent or other application for said Invention(s), on said Patent Application(s), or on any subsequently-filed provisional, non-provisional, regular utility, divisional, continuation, continuation-in-part, reissue, or other patent application or other application, to Assignee, its successors and assigns, as the assignee of the entire interest in said Invention(s).

IN WITNESS WHEREOF, Assignors have executed this Assignment on the date first above written and as set forth below.
 
 
ASSIGNOR
 
     
     
     
Date:  September 19, 2006
/s/ Hootan Melamed
 
 
Hootan Melamed
 
 
Inventor
 
     
     
  ASSIGNOR  
     
     
     
Date: September 19, 2006
/s/ Edward W. Wtihrow, III
 
 
Edward W. Withrow, III
 
 
Inventor
 
     
 
Page 2 of 2
 
 
 
PRISTINE SOLUTIONS, INC. 8-K
 
 
Exhibit 10.9
 
PRISTINE SOLUTIONS, INC.

LOCK-UP-LEAK-OUT AGREEMENT

October 27, 2012


The Shareholder referenced below:

 
Re:
Lock-up of shares held in Pristine Solutions, Inc., a Nevada corporation (the “ Company ”) by the shareholder signatory hereto (the “Shareholder”)
 
To Pristine Solutions, Inc. Board & Empire Stock Transfer:
 
The undersigned Shareholder irrevocably agrees with the Company that, from the date hereof until October 27, 2014 (such period, the “ Restriction Period ”), the Shareholder will not except in accordance with the terms here, offer, sell, contract to sell, hypothecate, pledge or otherwise dispose of (or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the Shareholder or any Affiliate of the Shareholder or any person in privity with the Shareholder or any Affiliate of the Shareholder, directly or indirectly, in respect of, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the United States Securities Exchange Act of 1934 (each, a “ Transfer ”) with respect to, any shares of Common Stock or securities convertible or exchange into shares of Common Stock beneficially owned, held or hereafter acquired by the Shareholder (the “ Securities ”) in the capital of the Company.  Beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act.  In order to enforce this covenant, the Company shall have the right impose irrevocable stop-transfer instructions preventing the Company’s transfer agent from effecting any actions in violation of this Letter Agreement.

Notwithstanding the foregoing, the Shareholder shall be permitted to make Transfers of the shares of the Company’s Common Stock held by the Shareholder during the Restriction Period expressly in accordance with the following (the “ Sale Allowances ”):
 
Commencing on October 27, 2014, the Shareholder shall be permitted to make Transfers and or Sales of the shares of the Company’s Common Stock held by the Shareholder in an amount equal to up to 2% of the total issued and outstanding shares of the Company’s Common stock, subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Letter Agreement, during any 90 calendar day period (the Shareholder acknowledges and agrees that the foregoing limits on Transfers are non-cumulative and may not be carried over from one 90 day period to the next).
 
The Shareholder acknowledges that the execution, delivery and performance of this Letter Agreement is a material condition to the Company’s ability to obtain any potential future financing and the Company shall be entitled to specific performance of the Shareholder’s obligations hereunder.  The Shareholder hereby represents that the Shareholder has the power and authority to execute, deliver and perform this Letter Agreement, that the Shareholder has received adequate consideration therefor and that the Shareholder will indirectly benefit from the Company’s ability to obtain any such additional financing.
 
The Shareholder acknowledges that they have read this document and fully understand the terms of this Letter Agreement, and acknowledge that this Letter Agreement has been executed voluntarily after either receiving independent legal advice, or having been advised to obtain independent legal advice and having elected not to do so.

 
 
 
 
This Letter Agreement may not be amended or otherwise modified in any respect without the written consent of each of the Company, and the Shareholder.  This Letter Agreement shall be construed and enforced in accordance with the laws of the State of Nevada without regard to the principles of conflict of laws. The Shareholder hereby irrevocably submits to the exclusive jurisdiction of the State of Nevada, for the purposes of any suit, action or proceeding arising out of or relating to this Letter Agreement, and hereby waives, and agrees not to assert in any such suit, action or proceeding, any claim that (i) it is not personally subject to the jurisdiction of such court, (ii) the suit, action or proceeding is brought in an inconvenient forum, or (iii) the venue of the suit, action or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.

This Letter Agreement shall be binding on successors and assigns of the Shareholder with respect to the Securities and any such successor or assign shall enter into a similar agreement for the benefit of the Company.


*** SIGNATURE PAGE FOLLOWS***



Pristine Solutions, Inc.
Shareholder Lock-Up-Leak-Out Agreement

 
 
 


This Letter Agreement may be executed in two or more counterparts, all of which when taken together may be considered one and the same agreement.


Pristine Solutions, Inc. Shareholder
 
   
   
/s/ M. Katsuka Sandoval                                                       
 10/27/12
Signature                                           
 
   
M. Katuska Sandoval                                                                 
 
Print Name
 
   
   
Address for Notice:
 
   
7026 Dume Drive #B                                                                 
 
Malibu, CA 90265                                                       
 
   
   
39,750,000                                                       
 
Number of shares of Common Stock
 
 

      By signing below, the Company agrees to enforce the restrictions on transfer set forth in this Letter Agreement.

Pristine Solutions, Inc.
 
   
     
By:
/s/ Michael J. Borkowski
 
Name:
Michael J. Borkowski  
Title:
Chief Executive Officer  




Pristine Solutions, Inc.
Shareholder Lock-Up-Leak-Out Agreement

 
 

PRISTINE SOLUTIONS, INC. 8-K
Exhibit 10.10
 
PRISTINE SOLUTIONS, INC.

LOCK-UP-LEAK-OUT AGREEMENT


October 27, 2012


The Shareholder referenced below:

 
Re:
Lock-up of shares held in Pristine Solutions, Inc., a Nevada corporation (the “ Company ”) by the shareholder signatory hereto (the “Shareholder”)
 
To Pristine Solutions, Inc. Board & Empire Stock Transfer:
 
The undersigned Shareholder irrevocably agrees with the Company that, from the date hereof until October 27, 2014 (such period, the “ Restriction Period ”), the Shareholder will not except in accordance with the terms here, offer, sell, contract to sell, hypothecate, pledge or otherwise dispose of (or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the Shareholder or any Affiliate of the Shareholder or any person in privity with the Shareholder or any Affiliate of the Shareholder, directly or indirectly, in respect of, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the United States Securities Exchange Act of 1934 (each, a “ Transfer ”) with respect to, any shares of Common Stock or securities convertible or exchange into shares of Common Stock beneficially owned, held or hereafter acquired by the Shareholder (the “ Securities ”) in the capital of the Company.  Beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act.  In order to enforce this covenant, the Company shall have the right impose irrevocable stop-transfer instructions preventing the Company’s transfer agent from effecting any actions in violation of this Letter Agreement.

Notwithstanding the foregoing, the Shareholder shall be permitted to make Transfers of the shares of the Company’s Common Stock held by the Shareholder during the Restriction Period expressly in accordance with the following (the “ Sale Allowances ”):
 
Commencing on October 27, 2014, the Shareholder shall be permitted to make Transfers and or Sales of the shares of the Company’s Common Stock held by the Shareholder in an amount equal to up to 2% of the total issued and outstanding shares of the Company’s Common stock, subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Letter Agreement, during any 90 calendar day period (the Shareholder acknowledges and agrees that the foregoing limits on Transfers are non-cumulative and may not be carried over from one 90 day period to the next).
 
The Shareholder acknowledges that the execution, delivery and performance of this Letter Agreement is a material condition to the Company’s ability to obtain any potential future financing and the Company shall be entitled to specific performance of the Shareholder’s obligations hereunder.  The Shareholder hereby represents that the Shareholder has the power and authority to execute, deliver and perform this Letter Agreement, that the Shareholder has received adequate consideration therefor and that the Shareholder will indirectly benefit from the Company’s ability to obtain any such additional financing.
 
 
 
 
 
The Shareholder acknowledges that they have read this document and fully understand the terms of this Letter Agreement, and acknowledge that this Letter Agreement has been executed voluntarily after either receiving independent legal advice, or having been advised to obtain independent legal advice and having elected not to do so.

This Letter Agreement may not be amended or otherwise modified in any respect without the written consent of each of the Company, and the Shareholder.  This Letter Agreement shall be construed and enforced in accordance with the laws of the State of Nevada without regard to the principles of conflict of laws. The Shareholder hereby irrevocably submits to the exclusive jurisdiction of the State of Nevada, for the purposes of any suit, action or proceeding arising out of or relating to this Letter Agreement, and hereby waives, and agrees not to assert in any such suit, action or proceeding, any claim that (i) it is not personally subject to the jurisdiction of such court, (ii) the suit, action or proceeding is brought in an inconvenient forum, or (iii) the venue of the suit, action or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.

This Letter Agreement shall be binding on successors and assigns of the Shareholder with respect to the Securities and any such successor or assign shall enter into a similar agreement for the benefit of the Company.










*** SIGNATURE PAGE FOLLOWS***


Pristine Solutions, Inc.
Shareholder Lock-Up-Leak-Out Agreement

 
 
 


This Letter Agreement may be executed in two or more counterparts, all of which when taken together may be considered one and the same agreement.


Pristine Solutions, Inc. Shareholder
 
   
   
/s/ Edward W. Withrow III
10/27/12
Signature
 
   
Edward W. Withrow III
 
Print Name
 
   
   
Address for Notice:
 
   
1327 Ocean Avenue Suite M
 
Santa Monica, CA 90401
 
   
   
88,079,375
 
Number of shares of Common Stock
 
 

     By signing below, the Company agrees to enforce the restrictions on transfer set forth in this Letter Agreement.
 

Pristine Solutions, Inc.
 
   
     
By:
/s/ Michael J. Borkowski
 
Name:
Michael J. Borkowski  
Title:
Chief Executive Officer  



Pristine Solutions, Inc.
Shareholder Lock-Up-Leak-Out Agreement

 
 

 
PRISTINE SOLUTIONS, INC. 8-K
Exhibit 10.11
 

PRISTINE SOLUTIONS, INC.

LOCK-UP-LEAK-OUT AGREEMENT


October 27, 2012


The Shareholder referenced below:

 
Re:
Lock-up of shares held in Pristine Solutions, Inc., a Nevada corporation (the “ Company ”) by the shareholder signatory hereto (the “Shareholder”)
 
To Pristine Solutions, Inc. Board & Empire Stock Transfer:
 
The undersigned Shareholder irrevocably agrees with the Company that, from the date hereof until October 27, 2014 (such period, the “ Restriction Period ”), the Shareholder will not except in accordance with the terms here, offer, sell, contract to sell, hypothecate, pledge or otherwise dispose of (or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the Shareholder or any Affiliate of the Shareholder or any person in privity with the Shareholder or any Affiliate of the Shareholder, directly or indirectly, in respect of, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the United States Securities Exchange Act of 1934 (each, a “ Transfer ”) with respect to, any shares of Common Stock or securities convertible or exchange into shares of Common Stock beneficially owned, held or hereafter acquired by the Shareholder (the “ Securities ”) in the capital of the Company.  Beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act.  In order to enforce this covenant, the Company shall have the right impose irrevocable stop-transfer instructions preventing the Company’s transfer agent from effecting any actions in violation of this Letter Agreement.

Notwithstanding the foregoing, the Shareholder shall be permitted to make Transfers of the shares of the Company’s Common Stock held by the Shareholder during the Restriction Period expressly in accordance with the following (the “ Sale Allowances ”):
 
Commencing on October 27, 2014, the Shareholder shall be permitted to make Transfers and or Sales of the shares of the Company’s Common Stock held by the Shareholder in an amount equal to up to 2% of the total issued and outstanding shares of the Company’s Common stock, subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Letter Agreement, during any 90 calendar day period (the Shareholder acknowledges and agrees that the foregoing limits on Transfers are non-cumulative and may not be carried over from one 90 day period to the next).
 
The Shareholder acknowledges that the execution, delivery and performance of this Letter Agreement is a material condition to the Company’s ability to obtain any potential future financing and the Company shall be entitled to specific performance of the Shareholder’s obligations hereunder.  The Shareholder hereby represents that the Shareholder has the power and authority to execute, deliver and perform this Letter Agreement, that the Shareholder has received adequate consideration therefor and that the Shareholder will indirectly benefit from the Company’s ability to obtain any such additional financing.
 
 
 
 
 
The Shareholder acknowledges that they have read this document and fully understand the terms of this Letter Agreement, and acknowledge that this Letter Agreement has been executed voluntarily after either receiving independent legal advice, or having been advised to obtain independent legal advice and having elected not to do so.

This Letter Agreement may not be amended or otherwise modified in any respect without the written consent of each of the Company, and the Shareholder.  This Letter Agreement shall be construed and enforced in accordance with the laws of the State of Nevada without regard to the principles of conflict of laws. The Shareholder hereby irrevocably submits to the exclusive jurisdiction of the State of Nevada, for the purposes of any suit, action or proceeding arising out of or relating to this Letter Agreement, and hereby waives, and agrees not to assert in any such suit, action or proceeding, any claim that (i) it is not personally subject to the jurisdiction of such court, (ii) the suit, action or proceeding is brought in an inconvenient forum, or (iii) the venue of the suit, action or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.

This Letter Agreement shall be binding on successors and assigns of the Shareholder with respect to the Securities and any such successor or assign shall enter into a similar agreement for the benefit of the Company.










*** SIGNATURE PAGE FOLLOWS***



Pristine Solutions, Inc.
Shareholder Lock-Up-Leak-Out Agreement

 
 
 


This Letter Agreement may be executed in two or more counterparts, all of which when taken together may be considered one and the same agreement.


Pristine Solutions, Inc. Shareholder
 
   
   
/s/ Edward W. Withrow IV
10/27/12
Signature
 
   
Edward W. Withrow IV
 
Print Name
 
   
   
Address for Notice:
 
   
7026 Dume Drive #B
 
Malibu, CA 90265
 
   
   
7,950,000
 
Number of shares of Common Stock
 

       
     By signing below, the Company agrees to enforce the restrictions on transfer set forth in this Letter Agreement.
 

Pristine Solutions, Inc.
 
   
     
By:
/s/ Michael J. Borkowski
 
Name:
Michael J. Borkowski  
Title:
Chief Executive Officer  





Pristine Solutions, Inc.
Shareholder Lock-Up-Leak-Out Agreement

 
 
 

PRISTINE SOLUTIONS, INC. 8-K
 
 
Exhbit 23.2
 
Stan J.H. Lee, CPA
2160 North Central Rd Suite 209 t   Fort Lee t   NJ 07024
P.O. Box 436402 t San Diego t CA 92143-6402
619-623-7799 t   Fax 619-564-3408 t   stan2u@gmail.com
 
To Whom It May Concern:

The firm of Stan J.H. Lee, Certified Public Accountants, consents to the inclusion of our report of September 28, 2012, on the audited financial statements of Eaton Scientific Systems, Inc as of December 31, 2011 and 2010 and for the years then ended in any filings that are necessary now or in the near future with the U.S. Securities and Exchange Commission.

Very truly yours,

/s/ Stan J.H. Lee, CPA                                                                                          

Stan J.H. Lee, CPA
October 3, 2012
Fort Lee, NJ
 
 

 

 
 

 
 

 
 
 
 
 
 

 
 

 
 
 
 

PRISTINE SOLUTIONS, INC. 8-K
 
Exhibit 99.1
 
   
(  1  of  1  )
 
   
   
United States Patent Application
20070066603
Kind Code
A1
Melamed; Hootan ;   et al.
March 22, 2007
   
Method for alleviating climacteric symtoms


Abstract
 
The present invention is a method for alleviating at least one climacteric symptom in a climacteric subject using an anticholinergic agent. To illustrate the instant invention, homatropine was shown to relieve hot flushes in peri-menopausal and post-menopausal women.  
 
   
   
Inventors:
Melamed; Hootan ;  (Beverly Hills, CA) ; Withrow; Edward W. III ;  (Westlake Village, CA)
Correspondence Address:
    CISLO & THOMAS, LLP
    233 WILSHIRE BLVD
    SUITE 900
    SANTA MONICA
    CA
    90401-1211
    US
Assignee:
Eaton Scientific Systems, Ltd.
   
Serial No.:
523975
Series Code:
11
Filed:
September 19, 2006

Current U.S. Class:
514/221 ; 514/304
Class at Publication:
514/221 ; 514/304
International Class:
A61K 31/551 20060101 A61K031/551; A61K 31/46 20060101 A61K031/46
   
   
Claims  
   
 
1. A method for alleviating at least one climacteric symptom in a climacteric subject, comprising the step of: administering to the climacteric subject a therapeutically effective amount of an anticholinergic agent, thereby alleviating at least one climacteric symptom in the climacteric subject.

2. The method of claim 1, wherein the anticholinergic agent is an antagonist of a muscarinic receptor.

3. The method of claim 2, wherein the muscarinic receptor is selected from a group consisting of M.sub.1 receptors and M.sub.2 receptors.

4. The method of claim 3, wherein the anticholinergic agent is a belladonna alkaloid.

5. The method of claim 4, wherein the climacteric symptom is selected from the group consisting of rapid heart beat, strong heart beat, feeling tense, feeling nervous, difficulty in sleeping, excitability, attacks of panic, difficulty in concentrating, feeling tired, lacking in energy, loss of interest in most things, feeling unhappy, feeling depressed, crying spells, irritability, feeling dizzy, feeling faint, pressure in head, pressure in body, tightness in head, tightness in body, numbness in a body part, tingling in a body part, headaches, muscle pains, joint pains, loss of feeling in hands, loss of feeling in feet, breathing difficulties, hot flushes, sweating at night, and loss of interest in sex.

6. The method of claim 4, wherein the climacteric symptom is hot flushes.

7. The method of claim 6, wherein the belladonna alkaloid is selected from a group consisting of atropine, scopolamine, methscopolamine, homatropine, and hyoscyamine.
 
 
 

8. The method of claim 7, wherein the atropine is selected from a group consisting of atropine sulfate, atropine oxide, atropine-HCl salt, and methylatropine nitrate.

9. The method of claim 7, wherein the scopolamine is selected from a group consisting of hydrobromide salt and methylbromide salt of scopolamine.

10. The method of claim 7, wherein the homatropine is selected from a group consisting of hydrobromide salt and methylbromide salt of homatropine.

11. The method of claim 7, wherein the hyoscyamine is selected from a group consisting of hydrobromide salt and sulfate salt of hyoscyamine.

12. The method of claim 6, wherein the belladonna alkaloid is administered in admixture with a pharmaceutically acceptable carrier.

13. The method of claim 6, wherein the belladonna alkaloid is administered in admixture with an excipient.
 
14. The method of claim 6, wherein the belladonna alkaloid is administered via a mode selected from a group consisting of oral, parenteral, intranasal, inhalation, rectal and topical administration.

15. The method of claim 4, wherein the belladonna alkaloid is administered in admixture with a pharmaceutically acceptable carrier.

16. The method of claim 4, wherein the belladonna alkaloid is administered in admixture with an excipient.

17. The method of claim 4, wherein the belladonna alkaloid is administered via a mode selected from a group consisting of oral, parenteral, intranasal, inhalation, rectal and topical administration.

18. The method of claim 4, wherein the belladonna alkaloid is selected from a group consisting of atropine, scopolamine, methscopolamine, homatropine, and hyoscyamine.

19. The method of claim 18, wherein the atropine is selected from a group consisting of atropine sulfate, atropine oxide, atropine-HCl salt, and methylatropine nitrate.

20. The method of claim 18, wherein the scopolamine is selected from a group consisting of hydrobromide salt and methylbromide salt of scopolamine.

21. The method of claim 18, wherein the homatropine is selected from a group consisting of hydrobromide salt and methylbromide salt of homatropine.

22. The method of claim 18, wherein the hyoscyamine is selected from a group consisting of hydrobromide salt and sulfate salt of hyoscyamine.

23. The method of claim 1, wherein the climacteric symptom is selected from the group consisting of rapid heart beat, strong heart beat, feeling tense, feeling nervous, difficulty in sleeping, excitability, attacks of panic, difficulty in concentrating, feeling tired, lacking in energy, loss of interest in most things, feeling unhappy, feeling depressed, crying spells, irritability, feeling dizzy, feeling faint, pressure in head, pressure in body, tightness in head, tightness in body, numbness in a body part, tingling in a body part, headaches, muscle pains, joint pains, loss of feeling in hands, loss of feeling in feet, breathing difficulties, hot flushes, sweating at night, and loss of interest in sex.

24. The method of claim 1, wherein the climacteric symptom is hot flushes.

25. The method of claim 1, wherein the anticholinergic agent is administered in admixture with a pharmaceutically acceptable carrier.

26. The method of claim 1, wherein the anticholinergic agent is administered in admixture with an excipient.

27. The method of claim 1, wherein the anticholinergic agent is administered via a mode selected from a group consisting of oral, parenteral, intranasal, inhalation, rectal and topical administration.

28. A method for alleviating at least one climacteric symptom in a climacteric subject, comprising the step of: administering to a climacteric subject a therapeutically effective amount of a homatropine thereby alleviating at least one climacteric symptom in the climacteric subject.

 
 
 
29. The method of claim 28, wherein the homatropine is selected from a group consisting of hydrobromide salt and methylbromide salt of homatropine.

30. The method of claim 28, wherein the climacteric symptom is selected from the group consisting of rapid heart beat, strong heart beat, feeling tense, feeling nervous, difficulty in sleeping, excitability, attacks of panic, difficulty in concentrating, feeling tired, lacking in energy, loss of interest in most things, feeling unhappy, feeling depressed, crying spells, irritability, feeling dizzy, feeling faint, pressure in head, pressure in body, tightness in head, tightness in body, numbness in a body part, tingling in a body part, headaches, muscle pains, joint pains, loss of feeling in hands, loss of feeling in feet, breathing difficulties, hot flushes, sweating at night, and loss of interest in sex.

31. The method of claim 28, wherein the climacteric symptom is hot flushes.

32. The method of claim 31, wherein the homatropine is selected from a group consisting of a hydrobromide salt and a methylbromide salt of homatropine.

33. The method of claim 28, wherein the homatropine is administered in admixture with a pharmaceutically acceptable carrier.

34. The method of claim 28, wherein the homatropine is administered in admixture with an excipient.

35. The method of claim 28, wherein the homatropine is administered via a mode selected from a group consisting of oral, parenteral, intranasal, inhalation, rectal and topical administration.

36. A method for alleviating hot flushes in a subject, comprising the step of: administering to a subject experiencing hot flushes a therapeutically effective amount of a homatropine thereby alleviating the hot flushes in the subject.
       
       
Description
     
       
 
[0001] This application claims the benefit of U.S. Provisional Patent Application Ser. No. 60/719,756, filed Sep. 22, 2005, the content of which is incorporated herein by reference in its entirety.

BACKGROUND OF THE INVENTION

[0002] Hot flushes, also known as hot flashes, and night sweats are common and salient symptoms experienced by menopausal woman that typically occur during the transition time from peri-menopause to menopause. They can continue to occur to up to 5 years post-menopause (75% of women experience hot flushes, and of those, 25% experience them for more than 5 years; Belchetz (1994) New Engl. J. Med. 330:1062-71). The "hot flush" is a result of sudden or acute drop in estrogen levels. This sudden drop can be due to natural events (menopause), or as a result of surgical (oophorectomy) or medical (hormone therapy, chemotherapy) removal of ovarian function. It is estimated that 80% of women undergoing natural or iatrogenic menopause experience hot flushes. Over time, the frequency and intensity of hot flushes do diminish, but they are still present in up to 50% of women for up to 5 years.

[0003] A hot flush is subjectively described as a sensation of intense warmth lasting as little as 30 seconds or as long as 5 minutes. It can be accompanied by tachycardia or palpitations, headache, faintness, or vertigo, and typically ends in profuse sweating and a cold sensation. At night, the frequency and severity of hot flushes increase, affecting a woman's sleep and ultimately her overall quality of life.

[0004] Estrogen therapy has been the mainstay of treatment for menopausal symptoms over the years, but concerns about the risks of hormone replacement therapy have made the search for alternative therapies critical for many women.

[0005] Mild symptoms may be improved by avoidance of triggering substances or situations. Caffeine, alcohol, spicy foods, and hot beverages may trigger hot flushes. Exercise, lowering stress levels, and smoking cessation are thought to help relieve the symptoms. Dressing in layers, wearing breathable clothing such as cotton and natural linen, and using fans, may also aid in comfort.

[0006] Studies investigating the benefits of dietary soy and vitamin E have mixed results as to the benefits on hot flashes (Krebs, et al. (2004) Ob. Gyn. 104:824-836). There is up to a 40% placebo effect in most studies on hot flashes, and randomized, blinded studies involving phytoestrogens derived from soy or red leaf clover do not show additional benefit (Fitzpatrick (2003) Med. Clin. N. Am. 87:1091-1113; Tice, et al. (2003) JAMA 290:207). There is a concern that phytoestrogens are not risk-free as they stimulate cellular activity in breast cysts and can contribute to postmenopausal bleeding.

 
 
 
[0007] Black cohash is an herbal supplement which has been shown to have benefit for hot flashes without altering FSH levels or endometrial thickness (Fitzpatrick (2003) supra; Tice, et al. (2003) supra). Side effects such as nausea, headaches, dizziness and liver toxicity have been reported (Fitzpatrick (2003) supra; Tice, et al. (2003) supra). A black cohash/St John's Wort combination has been shown to reduce the Menopause rating scale by 50% and the Hamilton Depression Scale by 41% (Uebelhack, et al. (2006) Ob. Gyn. 107:247-55).

[0008] There are no prescription medications that are as effective as estrogen for the treatment of hot flushes, but many have a positive impact in some women. Unfortunately, all have side effects that balance their clinical use. Venlafaxine, paroxetine, and fluoxetine have all shown an approximate 60% reduction in hot flushes but with side effects common to the SSRI's. Veralipride reduces hot flushes but caused weight gain and galactorrhea.

[0009] Clonidine has a 50% reduction in symptoms, but causes dry mouth, sedation and hypotension. Gabapentin has a 45% reduction in frequency, and 54% decrease in severity but can cause somnolence, fatigue, tremors, nausea, edema and ataxia. High dose progestins or megace may help, but can cause PMS symptoms, depression and fluid retention. Bellergal was used in the past, but has addictive potential (Fitzpatrick (2004) Ob. Gyn. 104:106s-117s).

[0010] The Women's Health Initiative (WHI) was the largest placebo controlled study of hormone replacement therapy to date, and showed an increase in thromboembolism, stroke, and breast cancer in the estrogen-progestin group, leaving many women with the uncomfortable feeling that they were compromising their long-term health by using hormone therapy.

[0011] In certain severe cases, medication is prescribed by a physician. Progestins such as megestrol acetate (Megace) have been prescribed. The hormone estrogen is the most effective treatment for hot flushes. It can help not only in this aspect, but also in lubricating the vagina and urinary tract, improving sexual function, and decreasing and preventing the incidence of urinary tract infections.

[0012] However, drawbacks of standard estrogen replacement therapy include the potential for increased risk of breast cancer, cardiovascular disease, general discomfort, and ineffectiveness. Recent studies have linked hormone replacement therapy to an increase risk of breast cancer. Furthermore, not all women can or want to take HRT, depending on their medical history and family history. Documenting the effectiveness of alternative treatments, and the development of new, non-hormonal treatments with low incidence of side effects and lower costs are desirable (Belchetz (1994) supra; Krebs, et al. (2004) supra; Fitzpatrick (2003) supra; Tice, et al. (2003) supra; Uebelhack, et al. (2006) supra; Fitzpatrick (2004) supra) At present, other than SSRI's which are marginally effective, there are no pharmaceutical or over the counter products that offer effective palliation of hot flushes.

[0013] U.S. Pat. Nos. 6,395,757 and 5,962,505 disclose the use of glycopyrrolate and glycopyrrolate analogs for alleviating menopausal hot flashes.

[0014] Accordingly, there is a need in the art for effective treatment regimes for relieving symptoms of the climacteric. The present invention meets this long-felt need.

SUMMARY OF THE INVENTION

[0015] The present invention is a method for alleviating at least one climacteric symptom in a climacteric subject. The method involves administering to a climacteric subject a therapeutically effective amount of an anticholinergic agent thereby alleviating at least one climacteric symptom in the subject. In some embodiments, the anticholinergic agent is homatropine, or a salt thereof.

DETAILED DESCRIPTION OF THE INVENTION

[0016] The climacteric is defined as the syndrome of endocrine, somatic and psychological changes occurring at the termination of the reproductive period in the female. According to the Greene Climacteric scale (Greene (1998) Maturitas 29:25-31), there are 21 common symptoms associated with a woman's climacteric stage, namely heart beating quickly or strongly, feeling tense or nervous, difficulty in sleeping, excitability, attacks of panic, difficulty in concentrating, feeling tired or lacking in energy, loss of interest in most things, feeling unhappy or depressed, crying spells, irritability, feeling dizzy or faint, pressure or tightness in head or body, parts of the body feel numb or tingling, headaches, muscle and joint pains, loss of feeling in hands and feet, breathing difficulties, hot flushes, sweating at night, and loss of interest in sex. Other symptoms commonly experienced in climacteric women include urinary frequency and urgency, palpitations, and anxiety.

[0017] It has now been found that anticholinergic agents, such as homatropine, alleviate hot flushes in peri-menopausal and post-menopausal women. In general, anticholinergic agents work by modulating the activity of muscarinic receptors which mediate a variety of cellular responses. For example, muscarinic receptors in smooth muscle regulate cardiac contractions, gut motility and bronchial constriction, whereas muscarinic receptors in exocrine glands stimulate gastric acid secretion, salivation and lacrimation. Muscarinic receptors also are found in the superior cervical ganglion, cerebral cortex, the striatum, the hippocampus, thalamus and brainstem.

 
 
 
[0018] Generally speaking, overstimulation of these receptors leads to diarrhea, frequent urination, miosis, bradycardia, bronchorrhea, emesis, lacrimation, and salivation. Other symptoms resulting from overstimulation of these receptors include nausea, vomiting, as well as eye pain, blurred or dim vision. Similarly, nicotinic stimulation causes muscle pain, tremors, weakness, hypertension, and fasciculations. Advantageously, anticholinergic agents result in antimuscarinic and antinicotinic actions. For example, anticholinergic agents are routinely given to people with urinary incontinence to prevent frequent urination (see, e.g., U.S. Pat. No. 6,919,092.

[0019] It is believed that anticholinergics act peripherally and not in the central nervous system, i.e., hypothalamus, to block the muscarinic receptors located on tissues which receive parasympathetic postganglionic nerves. One exception is the sweat glands; which receive sympathetic-cholinergic nerves. The hypothalamus is one of several brain areas that regulate the discharge rate of parasympathetic and sympathetic nerves by descending nerve fibers that synapse with either the parasympathetic preganglionic or sympathetic preganglionic nerves. It appears that the hypothalamus is the major brain area that regulates the discharge rate of the autonomic nerves (which may increase or decrease). The pathophysiology of how the decrease in estrogen affects the hypothalamic regulation of body temperature is largely unknown. However, not wishing to be bound by theory, it is believed that the anticholinergic agent disclosed herein modulates hypothalamic regulation of body temperature via muscarinic receptor activity thereby reducing climacteric symptoms such as hot flushes in climacteric subjects.

[0020] Accordingly, the present invention is a method for alleviating at least one climacteric symptom in a climacteric subject by administering to the climacteric subject a therapeutically effective amount of an anticholinergic agent, thereby alleviating at least one climacteric symptom in the climacteric subject. As used in the context of the present invention, "an anticholinergic agent" can be a compound that acts as an antagonist at the muscarinic receptor. In particular, the muscarinic receptor can be M.sub.1 and/or M.sub.2 muscarinic receptors. In particular embodiments, the anticholinergic agent can be a belladonna alkaloid including, but not limited to, atropine, scopolamine, methscopolamine, homatropine, hyoscyamine, wherein these compounds are normally administered as a salt, i.e., tertiary amines. For example, the atropine can be selected from a group consisting of atropine sulfate, atropine oxide, atropine-HCl salt, and methylatropine nitrate. The scopolamine can be selected from a group consisting of hydrobromide salt and methylbromide salt of scopolamine. The homatropine can be selected from a group consisting of hydrobromide salt and methylbromide salt of homatropine. The hyoscyamine can be selected from a group consisting of hydrobromide salt and sulfate salt of hyoscyamine. These agents, particularly the salt forms thereof, are readily available from a number of commercial sources or can be made or prepared according to standard methods well-known in the art. Salt forms of the identified anticholinergic agents are identified as follows:

[0021] Atropine, CAS-51-55-8 or CAS-51-48-1 (anhydrous form); atropine sulfate, CAS-5908-99-6; atropine oxide, CAS-4438-22-6 or its HCl salt, CAS-4574-60-1; and methylatropine nitrate, CAS-52-88-0.

[0022] Homatropine, CAS-87-00-3; hydrobromide salt, CAS-51-56-9; methylbromide salt, CAS-80-49-9.

[0023] Hyoscyamine (d, 1), CAS-101-31-5; hydrobromide salt, CAS-306-03-6; and sulfate salt, CAS-6835-16-1.

[0024] Scopolamine, CAS-51-34-3; hydrobromide salt, CAS-6533-68-2; methylbromide salt, CAS-155-41-9.

[0025] Other anticholinergic agents include ipratropium (e.g., as the bromide), sold under the name ATROVENT; oxitropium (e.g., as the bromide); and tiotropium (e.g., as the bromide) (CAS-139404-48-1). Also of interest are methantheline (CAS-53-46-3), propantheline bromide (CAS-50-34-9), anisotropine methyl bromide or Valpin 50 (CAS-80-50-2), clidinium bromide (QUARZAN, CAS-3485-62-9), isopropamide iodide (CAS-71-81-8), mepenzolate bromide (U.S. Pat. No. 2,918,408), tridihexethyl chloride (CAS-4310-35-4), and hexocyclium methylsulfate (CAS-115-63-9). See also cyclopentolate hydrochloride (CAS-5870-29-1), tropicamide (CAS-1508-75-4), trihexyphenidyl hydrochloride (CAS-144-11-6), pirenzepine (CAS-29868-97-1), telenzepine (CAS-80880-90-9), AF-DX 116, or methoctramine, and the compounds disclosed in WO 01/04118 for other exemplary anticholinergic agents.

[0026] In particular embodiments, the anticholinergic agent is homatropine, or a salt thereof. While the hydrobromide salt of homatropine is well-known for use in ophthalmology as a cycloplegic and mydriatic and the 8-methyl derivative of homatropine hydrobromide is a well-known oral therapeutic for use as an antispasmodic and inhibitor of secretions, especially in gastrointestinal disorders, homatropine (including the hydrobromide and methylbromide salts) has not been described in the art for use in alleviating climacteric symptoms.

[0027] The amount of anticholinergic agent or salt thereof which is required to achieve a therapeutic effect will, of course, vary with the particular agent, the route of administration, the subject under treatment. The compounds of the invention can be administered in a dose ranging from 0.005 mg to 100 mg per day, or more suitably 0.05 mg to 50 mg per day, with the particular dose adjusted by a skilled clinician based on the severity of the symptoms and the subject being treated. Effectiveness of the dose employed can be ascertained by monitoring the subject based upon, e.g., the Menopause Rating Scale (MRS) and the Greene Climacteric Scale (GCS).

 
 
 
[0028] In accordance with the instant method, a therapeutically effective amount of an anticholinergic agent, such as a belladonna alkaloid, and in particular, homatropine, can be administered to a climacteric subject, which includes peri-menopausal and post-menopausal woman, wherein said effective amount alleviates, reduces, or ameliorates at least one climacteric symptom in the subject. Climacteric symptoms which can be alleviated by the anticholinergic agent include rapid heart beat, strong heart beat, feeling tense, feeling nervous, difficulty in sleeping, excitability, attacks of panic, difficulty in concentrating, feeling tired, lacking in energy, loss of interest in most things, feeling unhappy, feeling depressed, crying spells, irritability, feeling dizzy, feeling faint, pressure in head, pressure in body, tightness in head, tightness in body, numbness in a body part, tingling in a body part, headaches, muscle pains, joint pains, loss of feeling in hands, loss of feeling in feet, breathing difficulties, hot flushes, sweating at night, and loss of interest in sex. In some embodiments, the anticholinergic agent alleviates climacteric symptoms resulting from overstimulation of the muscarinic receptors. In particular embodiments, the muscarinic receptor is the M.sub.1 or M.sub.2 receptor. In other embodiments, the anticholinergic agent alleviates hot flushes. In a preferred embodiment, homatropine can be administered to alleviate hot flushes. In still other embodiments, the anticholinergic agent generally improves the quality of life (e.g., a decrease in night sweat episodes which affect a woman's sleep).

[0029] While it is possible for the anticholinergic agent or salt thereof to be administered alone, it is generally desirable to present it as a pharmaceutical formulation. Accordingly, the present invention further provides a method for alleviating at least one climacteric symptom, in particular, hot flushes, by administering to the climacteric subject a therapeutically effective amount of an anticholinergic agent, wherein the anticholinergic agent, such as belladonna alkaloid, in particular, homatropine, is administered in admixture with a pharmaceutically acceptable carrier, and optionally one or more other therapeutic ingredients. Another embodiment provides a method for alleviating at least one climacteric symptom, in particular, hot flushes, by administering to the climacteric subject a therapeutically effective amount of an anticholinergic agent, wherein the anticholinergic agent, such as belladonna alkaloid, in particular, homatropine, is administered in admixture with an excipient. Another embodiment provides for a method for alleviating at least on climacteric symptom, in particular, hot flushes, by administering to the climacteric subject a therapeutically effective amount of anticholinergic agent, such as belladonna alkaloid, in particular, homatropine, via oral, parenteral (including subcutaneous, intradermal, intramuscular, intravenous and intraarticular), intranasal, inhalation (including fine particle dusts or mists which may be generated by means of various types of metered dose pressurized aerosols, nebulisers or insufflators), rectal and topical (including dermal, buccal, sublingual and intraocular) administration although the most suitable route may depend upon for example the condition and symptom of the recipient subject. The formulations can conveniently be presented in unit dosage form and can be prepared by any of the methods well-known in the art of pharmacy. See, for example, Remington: The Science and Practice of Pharmacy, Alfonso R. Gennaro, editor, 20th ed. Lippincott Williams & Wilkins: Philadelphia, Pa., 2000. Accordingly, an embodiment of this invention is a method for alleviating at least one climacteric symptom in a climacteric subject by administering to the climacteric subject a therapeutically effective amount of an anticholinergic agent, thereby alleviating at least one climacteric symptom in the climacteric subject, wherein the anticholinergic agent, such as belladonna alkaloid, and in particular, homatropine, is administered via a mode selected from a group consisting of oral, parenteral, intranasal, inhalation, rectal and topical administration.

[0030] Suitable methods for preparing formulations include the step of bringing the active ingredient (i.e., the anticholinergic agent) into association with the carrier which constitutes one or more accessory ingredients. In general, the formulations are prepared by uniformly and intimately bringing into association the active ingredient with liquid carriers or finely divided solid carriers or both and then, if necessary, shaping the product into the desired formulation.

[0031] Formulations of the present invention suitable for oral administration can be presented as discrete units such as capsules, cachets or tablets each containing a predetermined amount of the active ingredient; as a powder or granules; as a solution or a suspension in an aqueous liquid or a non-aqueous liquid; or as an oil-in-water liquid emulsion or a water-in-oil liquid emulsion. The active ingredient can also be presented as a bolus, electuary or paste.

[0032] A tablet can be made by compression or molding, optionally with one or more accessory ingredients. Compressed tablets can be prepared by compressing in a suitable machine the active ingredient in a free-flowing form such as a powder or granules, optionally mixed with a binder, lubricant, inert diluent, lubricating, surface active or dispersing agent. Molded tablets can be made by molding in a suitable machine a mixture of the powdered compound moistened with an inert liquid diluent. The tablets can optionally be coated or scored and can be formulated so as to provide slow or controlled release of the active ingredient therein.

[0033] Formulations for parenteral administration include aqueous and non-aqueous sterile injection solutions which can contain anti-oxidants, buffers, bacteriostats and solutes which render the formulation isotonic with the blood of the intended recipient; and aqueous and non-aqueous sterile suspensions which can include suspending agents and thickening agents. The formulations can be presented in unit-dose or multi-dose containers, for example sealed ampoules and vials, and can be stored in a freeze-dried (lyophilized) condition requiring only the addition of the sterile liquid carrier, for example saline or water-for-injection, immediately prior to use. Extemporaneous injection solutions and suspensions can be prepared from sterile powders, granules and tablets of the kind previously described.

[0034] Dry powder compositions for topical delivery to the lung by inhalation can, for example, be presented in capsules and cartridges of for example gelatin, or blisters of for example laminated aluminium foil, for use in an inhaler or insufflator. Formulations generally contain a powder mix for inhalation of the compound of the invention and a suitable powder base (carrier substance) such as lactose or starch. Use of lactose is preferred. Each capsule or cartridge can contain the active ingredient in combination with another therapeutically active ingredient. Alternatively, the compound of the invention can be presented without excipients. Packaging of the formulation can be suitable for unit dose or multi-dose delivery. In the case of multi-dose delivery, the formulation can be pre-metered (e.g., as in DISKUS, see GB 2242134 or DISKHALER, see GB 2178965, GB 2129691 and GB 2169265) or metered in use (e.g., as in TURBUHALER, see EP 69715). An example of a unit-dose device is ROTAHALER (see GB 2064336). The DISKUS inhalation device comprises an elongate strip formed from a base sheet having a plurality of recesses spaced along its length and a lid sheet hermetically but peelably sealed thereto to define a plurality of containers, each container having therein an inhalable formulation containing an anticholinergic agent of the invention preferably combined with lactose. Desirably, the strip is sufficiently flexible to be wound into a roll. The lid sheet and base sheet will preferably have leading end portions which are not sealed to one another and at least one of the said leading end portions is constructed to be attached to a winding means. Also, the hermetic seal between the base and lid sheets extends over their whole width. The lid sheet can desirably be peeled from the base sheet in a longitudinal direction from a first end of the said base sheet.

 
 
 
[0035] Spray compositions for topical delivery to the lung by inhalation can, for example, be formulated as aqueous solutions or suspensions or as aerosols delivered from pressurized packs, such as a metered dose inhaler, with the use of a suitable liquefied propellant. Aerosol compositions suitable for inhalation can be either a suspension or a solution and generally contain the anticholinergic agent optionally in combination with another therapeutically active ingredient and a suitable propellant such as a fluorocarbon or hydrogen-containing chlorofluorocarbon or mixtures thereof, particularly hydrofluoroalkanes, e.g. dichlorodifluloromethane, trichlorofluoromethane, dichlorotetra-fluoroethane, especially 1,1,1,2-tetrafluoroethane, 1,1,1,2,3,3,3-heptafluoro-n-propane or a mixture thereof. Carbon dioxide or other suitable gas can also be used as propellant. The aerosol composition can be excipient free or can optionally contain additional formulation excipients well-known in the art such as surfactants, e.g., oleic acid or lecithin and cosolvents, e.g., ethanol. Pressurized formulations will generally be retained in a canister (e.g., an aluminium canister) closed with a valve (e.g., a metering valve) and fitted into an actuator provided with a mouthpiece.

[0036] Medicaments for administration by inhalation desirably have a controlled particle size. The optimum particle size for inhalation into the bronchial system is usually 1-10 .mu.m, preferably 2-5 .mu.m. Particles having a size above 20 .mu.m are generally too large when inhaled to reach the small airways. To achieve these particle sizes the particles of the active ingredient as produced can be size reduced by conventional means e.g., by micronisation. The desired fraction can be separated out by air classification or sieving. Preferably, the particles will be crystalline. When an excipient such as lactose is employed, generally, the particle size of the excipient will be much greater than the inhaled medicament within the present invention. When the excipient is lactose it will typically be present as milled lactose, wherein not more than 85% of lactose particles will have a MMD of 60-90 .mu.m and not less than 15% will have a MMD of less than 15 .mu.m.

[0037] Solutions for inhalation by nebulation can be formulated with an aqueous vehicle with the addition of agents such as acid or alkali, buffer salts, isotonicity adjusting agents or antimicrobials. They can be sterilized by filtration or heating in an autoclave, or presented as a non-sterile product.

[0038] Formulations for rectal administration can be presented as a suppository with the usual carriers such as cocoa butter or polyethylene glycol.

[0039] Formulations for topical administration in the mouth, for example buccally or sublingually, include lozenges comprising the active ingredient in a flavored basis such as sucrose and acacia or tragacanth, and pastilles comprising the active ingredient in a basis such as gelatin and glycerin or sucrose an acacia.

[0040] Preferred unit dosage formulations are those containing an effective dose, as hereinbefore recited, or an appropriate fraction thereof, of the active ingredient.

[0041] The invention is described in greater detail by the following non-limiting examples.

EXAMPLE 1

Identification of Homatropine for Alleviating Hot Flashes

[0042] Eight peri-menopausal and post-menopausal women receiving the anti-tussive HYCODAN (one teaspoon every four to six hours as needed), reported relief of hot flushes while taking this medication. HYCODAN is composed of hydrocodone bitartrate (5 mg) and homatropine methylbromide (1.5 mg) in each tablet or 5 cc of suspension. The active ingredient responsible for the relief of hot flash symptoms was subsequently isolated by a pharmacist and found to be homatropine methylbromide.

EXAMPLE 2
 
Efficacy of Anticholinergic Agent for Alleviating Climacteric Symptoms

[0043] Study Objective. A single-center, prospective, randomized, double-blind, dose escalation, placebo-controlled, parallel-group-design clinical trial of homatropine versus placebo is carried out in subjects who are experiencing hot flushes and night sweats. Subjects are recruited from the general population based upon inclusion and exclusion criteria.

 
 
 
[0044] Inclusion Criteria.

[0045] i. The subject is aged 45-65.

[0046] ii. The subject has given written informed consent to participate in the study.

[0047] iii. The subject is menopausal or post-menopausal. (Defined as FSH greater than 40, and absence of menses for at least:

[0048] The prior 2 months before screening, and

[0049] 6 of 12 months before screening.

[0050] iv. The subject reports episodes of hot flushes and/or night sweats affecting their quality of life, as determined by items 1 and 3 of the Menopause Rating Scale (Hauser, et al. (1994) Zentralbl. Gynakol. 116:16-23; Potthoff, et al. (2000) Zentralbl. Gynakol. 122:280-286).

[0051] v. The subject is willing to report the number of episodes of hot flushes and/or night sweats on a daily bases.

[0052] vi. The subject must be able to successfully complete all study-related instruments, including all questionnaires.

[0053] vii. The subject, as agreed by the primary medical investigator, meets all specific inclusion and exclusion study criteria.

[0054] viii. The subject has a personal history of breast or uterine cancer, or any medical condition which precludes hormone replacement therapy as a treatment option for climacteric symptoms.

[0055] ix. The subject is willing and able to provide documentation of a normal pelvic exam and Pap smear within the past 12 months.

[0056] x. The subject has not been receiving any over the counter or prescription for the past 3 months that may influence hot flashes.

[0057] xi. Not receiving hormone replacement therapy (HRT) for the past 3 months.

[0058] xii. Not receiving any medication to treat hot flushes for the past 3 months. [0059] No herbal treatments or remedies [0060] SSRI therapy for more than 3 months due to anxiety or depression is allowed [0061] No other anticholinergic medications [0062] Other medications are acceptable for inclusion, with approval.

[0063] xiii. Self-reported frequency of hot flushes of at least 35 per week.

[0064] Exclusion Criteria.

[0065] i. Unwillingness or inability to comply with any aspect of the clinical trial protocol.

[0066] ii. The subject is allergic to, or expresses problems with, ingredients in homatropine methylbromide or placebo.
 
[0067] iii. Primary glaucoma (or any family history of glaucoma), or subjects with narrow angle or close angle glaucoma.
 
[0068] iv. Hypersensitivity to belladonna alkaloids.

[0069] v. Abnormal muscle weakness or myasthenia gravis.

[0070] vi. Subjects who have experienced or have thyrotoxicosis.

[0071] vii. Cardiovascular disease defined as: [0072] history of myocardial infarction, stroke, transient ischemic attack (TIA), carotid or other peripheral vascular disease, [0073] uncontrolled hypertension, [0074] a strong family history of heart attack before age 55, or [0075] instance of life-threatening arrhythmia within the past six months.

[0076] viii. Insulin-dependent diabetes.


 
 
 
[0077] ix. Clinically significant hematological, renal or hepatic abnormalities.

[0078] x. Active cancer, other than breast or endometrial.

[0079] xi. Pulmonary disease of any type.

[0080] xii. Self-reported history of alcohol or controlled substance abuse within the past year.

[0081] xiii. Current use of methadone, anti-coagulants, or other similar medications.

[0082] xiv. Currently taking or using psychotropic drugs or trazodone.

[0083] xv. Subjects on SSRI's are allowed into the study as long as their dosage has been stable for at least three consecutive months prior to study entry.

[0084] xvi. Abnormal pap smear within the past 12 months.

[0085] xvii. Severe vaginal or pelvic symptomatology.

[0086] xviii. Any clinically significant abnormality from the screening physical examination or safety laboratory test results.

[0087] xix. Any medical condition, psychological condition, or social circumstance that would impair her ability to participate in the study, or who may increase the risk to herself or others by participating.

[0088] xx. Psychological or psychiatric therapy of depressive symptoms during the study (except for pre-existing SSRI therapy as noted).

[0089] xxi. Use of any experimental (i.e., non-approved) drug within the past three months.

[0090] xxii. The subject has a disease or condition that compromises the integrity of the clinical trial or the safety of the subject.

[0091] Study Design. After screening, a 2-week placebo run-in is carried out and eligible subjects are randomized at baseline and receive either homatropine or a placebo for a 12-week period. The homatropine group receives an oral suspension composed of 1.5 mg/5 cc homatropine, syrup (water and sugar) and pineapple and tropical punch artificial flavoring. Randomization is at an equal ratio of 1:1. As the study is a dose escalating study, the percentages and the concentration of homatropine remains the same, while the amount taken changes. Subjects are asked to take the oral suspension at 3 to 4 times per day (i.e., a total of 4.5 to 6 mg homatropine per day). Subjects are asked to maintain their normal diet and exercise regimen during the 12-week study period. Subjects follow a protocol dose escalation schedule without the opportunity to increase the dose during the study based on symptoms/efficacy. Blood samples are obtained during the screening visit (and again at the last visit) for CBC, Lipid panel, hepatic profile, and serum hormone levels including FSH, Estradiol, Total and Free testosterone.

[0092] Evaluation of Symptoms. Subjects undergo a focused physical examination (vital signs and review of systems). Blood tests for hormone levels, CBC, lipid panel, and hepatic profile are conducted at the first visit (baseline), and at the end of the study. Subjects are asked to complete self-reporting questionnaires (MRS, GCS, and AUASS) at baseline, 6 weeks, and 12 weeks. Subjects are asked to undergo a Beck Depression Index assessment and complete a Quality of Life Assessment (SF-36) at baseline and at the end of the study. Subjects are asked to log the number of episodes of hot flushes and/or night sweats and other subjective symptoms on a daily basis.

[0093] Menopause Rating Scale (MRS) is a validated questionnaire listing symptoms associated with menopause. Subjects report on number, frequency and intensity of symptoms on this validated questionnaire.

[0094] Greene Climacteric Scale (GCS) is a validated questionnaire that looks at the total score and subscores of the psychological, physical, and vasomotor symptoms during menopause.

[0095] Urinary AUA-SYMPTOM SCORE (AUASS) is a validated questionnaire administered at all clinical visits from to help the patient determine how bothersome their urinary symptoms are and to check the effectiveness of treatment.

[0096] Beck Depression Index is a validated assessment administered at baseline and at the end of the study to assess the degree of signs and symptoms associated with clinical depression.

 
 
 
[0097] SF-36 is a validated questionnaire administered at baseline and at the end of the study to assess subjective general quality of life indicators.

[0098] Study Results. The primary safety variables are adverse events encountered by the study-population. However, because widespread usage of homatropine is already present with no notable adverse effects noted, efficacy of homatropine is of primary relevance.

[0099] The assessments of adverse events and research staff measurements are compared within subjects from reports and measurements at baseline, 4 weeks, 8 weeks, and 12 weeks. A comparison between the homatropine group and placebo group is made for the assessable subject population. Additional analyses are conducted on the intent-to-treat population to compare the mean change from baseline in the two groups. The overall incidence rates are compared between treatments using Pearson's chi-square tests or Fisher's-Exact tests.

[0100] The efficacy and safety variables assessing the homatropine versus placebo are the difference-of-means defined as the change from baseline as collected subsequent visits. Categorical variables are analyzed by the Mantel-Haenszel chi-square test except for small cell sizes where Fisher's exact two-tail chi-square test is used. Continuous variables are analyzed by the two-sample t-test. Examples of categorical variables include diabetes, hypertension, and income. Examples of continuous variables include age, weight, and average co-morbid risk.

[0101] Continuous data is analyzed both as continuous and as categorical data. For example, energy can be assessed as the difference-of-means between an active product versus placebo group, but can also be classified as those subjects with energy of less than 2 (0 to 9 scale), a categorization of subjects considered in low energy. Assessments of a given variable both for means and for categories can be useful, since the means can hide important differences between groups by disguising the tails of distribution.

[0102] The results of this analysis demonstrate efficacy of using homatropine to decrease hot flushes and increase quality of life.


* * * * *

 
PRISTINE SOLUTIONS, INC. 8-K
 
Exhibit 99.3
 
 
 
 
 
 
 
 
PRISTINE SOLUTIONS, INC. 8-K
Exhibit 99.4
 


CONVERTIBLE CORPORATE PROMISSORY NOTE

 
THIS COVERTIBLE PROMISSORY NOTE (the “Note”) is made as of the 10 th day of September 2012, by and between Pristine Solutions, Inc., a Nevada corporation, (hereinafter known as “BORROWER”) and Edward W. Withrow III., an individual (hereinafter known as “LENDER”).  BORROWER and LENDER shall collectively be known herein as “the Parties”.  In determining the rights and duties of the Parties under this Loan Agreement, the entire document must be read as a whole.
 
CONVERTIBLE PROMISSORY NOTE
 
FOR VALUE RECEIVED, BORROWER promises to pay to the order of LENDER the sum of $500,000.00 (Five Hundred Thousand Dollars) (hereinafter the “Loan Amount.”) The entire outstanding Loan Amount shall bear no interest, and become fully due and payable to LENDER by BORROWER within 2 year (730 days).

 
ADDITIONAL LOAN TERMS
 
The Parties hereby further set forth their rights and obligations to one another under this Loan Agreement and agree to be legally bound as follows:

A.  
Method of Payment.   The BORROWER shall make all payments called for under this Loan Agreement by sending a check or other negotiable instrument made payable to the following individual or entity at the address indicated:
 
Via U.S. Postal Service Certified Mail :
 
Edward W. Withrow III
1327 Ocean Avenue, Suite M
Santa Monica, CA 90401

B.  
Alternative Payment Option: The LENDER has agreed to accept as an alternative payment option that would allow the BORROWER to convert the Loan Amount into common stock of BORROWER.
 
C.  
Conversion Right:   The Holder shall have the right from time to time, and at any time: (A) during the period beginning on the six (6) month anniversary of the date of this Note and ending on the later of the Maturity Date in respect of the remaining outstanding principal amount of this Note to convert all or any part of the outstanding and unpaid principal amount of this Note into fully paid and non- assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock shall hereafter be changed or reclassified at the conversion price  (the “Conversion Price”) determined as provided herein.  
 
 
1
 
 
D.   
Conversion Price. Calculation of Conversion Price .  The Conversion Price shall be the Variable Conversion Price (as defined herein) (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower relating to the Borrower’s securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar events).  The “Variable Conversion Price” shall mean the Applicable Percentage (as defined herein) multiplied by the Market Price (as defined herein).  “Market Price” means the average of the lowest three (3) Trading Prices (as defined below) for the Common Stock during the ten (10) Trading Day period ending one Trading Day prior to the date the Conversion Notice is sent by the Holder to the Borrower via facsimile (the “Conversion Date”).  “Trading Price” means, for any security as of any date, the closing bid price on the Over-the-Counter QB, or applicable trading market (the “OTCQB”) as reported by a reliable reporting service (“Reporting Service”) mutually acceptable to Borrower and Holder and hereafter designated by Holders of a majority in interest of the Notes and the Borrower or, if the OTCQB is not the principal trading market for such security, the closing bid price of such security on the principal securities exchange or trading market where such security is listed or traded or, if no closing bid price of such security is available in any of the foregoing manners, the average of the closing bid prices of any market makers for such security that are listed in the “pink sheets” by the National Quotation Bureau, Inc.  If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by the Borrower and the holders of a majority in interest of the Notes being converted for which the calculation of the Trading Price is required in order to determine the Conversion Price of such Notes.  “Trading Day” shall mean any day on which the Common Stock is traded for any period on the OTCQB, or on the principal securities exchange or other securities market on which the Common Stock is then being traded.  “Applicable Percentage” shall mean 15%.
 
E.  
Parties that are not individuals . If any party to this agreement is other than an individual (i.e., a Corporation, a Limited Liability Company, a Partnership, or a Trust), said Party, and the individual signing on behalf of said Party, hereby represents and warrants that all steps and actions have been taken under the entity’s governing instruments to authorize the entry into this Loan Agreement.  Breach of any representation contained in this paragraph is considered a material breach of the Loan Agreement.
 
 
2
 
 
F.  
CERTAIN COVENANTS

  Distributions on Capital Stock .  So long as the Borrower shall have any obligation under this Note, the Borrower shall not without the Holder’s written consent (a) pay, declare or set apart for such payment, any dividend or other distribution (whether in cash, property or other securities) on shares of capital stock other than dividends on shares of Common Stock solely in the form of additional shares of Common Stock or (b) directly or indirectly or through any subsidiary make any other payment or distribution in respect of its capital stock except for distributions pursuant to any shareholders’ rights plan which is approved by a majority of the Borrower’s disinterested directors.
 
Restriction on Stock Repurchases .  So long as the Borrower shall have any obligation under this Note, the Borrower shall not without the Holder’s written consent redeem, repurchase or otherwise acquire (whether for cash or in exchange for property or other securities or otherwise) in any one transaction or series of related transactions any shares of capital stock of the Borrower or any warrants, rights or options to purchase or acquire any such shares.

Borrowings .  So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s written consent, create, incur, assume or suffer to exist any liability for borrowed money, except (a) borrowings in existence or committed on the date hereof and of which the Borrower has informed Holder in writing prior to the date hereof, (b) indebtedness to trade creditors or financial institutions incurred in the ordinary course of business or (c) borrowings, the proceeds of which shall be used to repay this Note.

Sale of Assets .  So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s written consent, sell, lease or otherwise dispose of any significant portion of its assets outside the ordinary course of business.  Any consent to the disposition of any assets may be conditioned on a specified use of the proceeds of disposition.

 
3
 
 
Advances and Loans .  So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s written consent, lend money, give credit or make advances to any person, firm, joint venture or corporation, including, without limitation, officers, directors, employees, subsidiaries and affiliates of the Borrower, except loans, credits or advances (a) in existence or committed on the date hereof and which the Borrower has informed Holder in writing prior to the date hereof, (b) made in the ordinary course of business or (c) not in excess of $100,000.

Contingent Liabilities .  So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s written consent, which shall not be unreasonably withheld, assume, guarantee, endorse, contingently agree to purchase or otherwise become liable upon the obligation of any person, firm, partnership, joint venture or corporation, except by the endorsement of negotiable instruments for deposit or collection and except assumptions, guarantees, endorsements and contingencies (a) in existence or committed on the date hereof and which the Borrower has informed Holder in writing prior to the date hereof, and (b) similar transactions in the ordinary course of business.

G.  
EVENTS OF DEFAULT

If any of the following events of default (each, an “Event of Default”) shall occur:

a.  
Failure to Pay Principal or Interest .  The Borrower fails to pay the principal hereof or interest thereon when due on this Note, whether at maturity, upon a Trading Market Prepayment Event pursuant to Section 1.7, upon acceleration or otherwise;

b.  
Breach of Covenants .  The Borrower breaches any material covenant or other material term or condition contained in this Note and any collateral documents including but not limited to the Purchase Agreement and such breach continues for a period of ten (10) days after written notice thereof to the Borrower from the Holder;

c.  
Breach of Representations and Warranties .  Any representation or warranty of the Borrower made herein or in any agreement, statement or certificate given in writing pursuant hereto or in connection herewith (including, without limitation, the Purchase Agreement), shall be false or misleading in any material respect when made and the breach of which has (or with the passage of time will have) a material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement;
 
 
4
 
 
d.  
Receiver or Trustee .  The Borrower or any subsidiary of the Borrower shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business, or such a receiver or trustee shall otherwise be appointed;

e.  
Judgments .  Any money judgment, writ or similar process shall be entered or filed against the Borrower or any subsidiary of the Borrower or any of its property or other assets for more than $100,000, and shall remain unvacated, unbonded or unstayed for a period of twenty (20) days unless otherwise consented to by the Holder, which consent will not be unreasonably withheld;

f.  
Bankruptcy .  Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or involuntary, for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any subsidiary of the Borrower;

g.  
Delisting of Common Stock .  The Borrower shall fail to maintain the listing of the Common Stock on at least one of the OTCQB or an equivalent replacement exchange, the NASDAQ National Market, the NASDAQ Small Cap Market, the New York Stock Exchange, or the American Stock Exchange;

h.  
Failure to Comply with the Exchange Act .  The Borrower shall fail to comply with the reporting requirements of the Exchange Act; and/or the Borrower shall cease to be subject to the reporting requirements of the Exchange Act; or

i.  
Liquidation . Any dissolution, liquidation, or winding up of Borrower or any substantial portion of its business.

j.  
Cessation of Operations . Any cessation of operations by Borrower or Borrower admits it is otherwise generally unable to pay its debts as such debts become due, provided, however, that any disclosure of the Borrower’s ability to continue as a “going concern” shall not be an admission that the Borrower cannot pay its debts as they become due.
 
 
5
 
k.  
Maintenance of Assets .  The failure by Borrower to maintain any material intellectual property rights, personal, real property or other assets which are necessary to conduct its business (whether now or in the future).

l.  
Financial Statement Restatement . The restatement of any financial statements filed by the Borrower with the SEC for any date or period from two years prior to the Issue Date of this Note and until this Note is no longer outstanding, if the result of such restatement would, by comparison to the unrestated financial statement, have constituted a material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement.

H.  
MISCELLANEOUS

i.  
Failure or Indulgence Not Waiver .  No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privileges.  All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

ii.  
Notices .  All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice.  Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur.  The addresses for such communications shall be:
 
 
6
 
 
iii.  
If to the Borrower, to:
 
PRISTINE SOLUTIONS, INC.
9595 Wilshire Blvd.
Suite 900
Beverly Hills, CA 90212
Attn: Michael J. Borkowski, Chief Executive Officer, President
facsimile: 888.329.5351
 
If to the Holder:
 
EDWARD W.WITHROW III
1327 Ocean Avenue, Suite M
Santa Monica, CA 90401
Attn: Edward W. Withrow III
 
 
iv.  
Amendments .  This Note and any provision hereof may only be amended by an instrument in writing signed by the Borrower and the Holder.  The term “Note” and all reference thereto, as used throughout this instrument, shall mean this instrument (and the other Notes issued pursuant to the Purchase Agreement) as originally executed, or if later amended or supplemented, then as so amended or supplemented.

v.  
Assignability .  This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to be the benefit of the Holder and its successors and assigns.  Each transferee of this Note must be an “accredited investor” (as defined in Rule 501(a) of the 1933 Act).  Notwithstanding anything in this Note to the contrary, this Note may be pledged as collateral in connection with a bona fide margin account or other lending arrangement.
 
 
7
 
 
vi.  
Cost of Collection .  If default is made in the payment of this Note, the Borrower shall pay the Holder hereof costs of collection, including reasonable attorneys’ fees.

vii.  
Governing Law .  This Note shall be governed by and construed in accordance with the laws of the State of California without regard to principles of conflicts of laws.  Any action brought by either party against the other concerning the transactions contemplated by this Note shall be brought only in the state courts of California or in the federal courts located in the state and county of Los Angeles.  The parties to this Note hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens .  The Company and Holder waive trial by jury.  The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs.  In the event that any provision of this Note or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law.  Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement.   Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.
 
 
8
 
 
viii.  
Certain Amounts .  Whenever pursuant to this Note the Borrower is required to pay an amount in excess of the outstanding principal amount (or the portion thereof required to be paid at that time) plus accrued and unpaid interest plus Default Interest on such interest, the Borrower and the Holder agree that the actual damages to the Holder from the receipt of cash payment on this Note may be difficult to determine and the amount to be so paid by the Borrower represents stipulated damages and not a penalty and is intended to compensate the Holder in part for loss of the opportunity to convert this Note and to earn a return from the sale of shares of Common Stock acquired upon conversion of this Note at a price in excess of the price paid for such shares pursuant to this Note.  The Borrower and the Holder hereby agree that such amount of stipulated damages is not plainly disproportionate to the possible loss to the Holder from the receipt of a cash payment without the opportunity to convert this Note into shares of Common Stock.
 
 
ix.  
Denominations .  At the request of the Holder, upon surrender of this Note, the Borrower shall promptly issue new Notes in the aggregate outstanding principal amount hereof, in the form hereof, in such denominations of at least $50,000 as the Holder shall request.

x.  
Purchase Agreement .  By its acceptance of this Note, each party agrees to be bound by the applicable terms of the Purchase Agreement.

xi.  
Notice of Corporate Events .  Except as otherwise provided below, the Holder of this Note shall have no rights as a Holder of Common Stock unless and only to the extent that it converts this Note into Common Stock. The Borrower shall provide the Holder with prior notification of any meeting of the Borrower’s shareholders (and copies of proxy materials and other information sent to shareholders).  In the event of any taking by the Borrower of a record of its shareholders for the purpose of determining shareholders who are entitled to receive payment of any dividend or other distribution, any right to subscribe for, purchase or otherwise acquire (including by way of merger, consolidation, reclassification or recapitalization) any share of any class or any other securities or property, or to receive any other right, or for the purpose of determining shareholders who are entitled to vote in connection with any proposed sale, lease or conveyance of all or substantially all of the assets of the Borrower or any proposed liquidation, dissolution or winding up of the Borrower, the Borrower shall mail a notice to the Holder, at least twenty (20) days prior to the record date specified therein (or thirty (30) days prior to the consummation of the transaction or event, whichever is earlier), of the date on which any such record is to be taken for the purpose of such dividend, distribution, right or other event, and a brief statement regarding the amount and character of such dividend, distribution, right or other event to the extent known at such time.  The Borrower shall make a public announcement of any event requiring notification to the Holder hereunder substantially simultaneously with the notification to the Holder in accordance with the terms of this Section 4.10.
 
 
9
 
 
xii.  
Remedies .  The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder, by vitiating the intent and purpose of the transaction contemplated hereby.  Accordingly, the Borrower acknowledges that the remedy at law for a breach of its obligations under this Note will be inadequate and agrees, in the event of a breach or threatened breach by the Borrower of the provisions of this Note, that the Holder shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Note and to enforce specifically the terms and provisions thereof, without the necessity of showing economic loss and without any bond or other security being required.



[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
 
 
10
 


IN WITNESS WHEREOF, and acknowledging acceptance and agreement of the foregoing, BORROWER, and LENDER affix their signatures hereto.
 
 
PRISTINE SOLUTIONS, INC.
 
EDWARD W. WITHROW III
         
By:
/s/ Michael J. Borkowski
 
By:
/s/ Edward W. Withrow III
Name:
Michael J. Borkowski  
Name:
Edward W. Withrow III 
Title:
President  
Title:
Individual
         
         
Dated: September 10, 2012     September 10, 2012
         
State of: CALIFORNIA     CALIFORNIA
         
County of: LOS ANGELES     LOS ANGELES
         

 
11