This annual report contains forward-looking statements. These statements relate to future events or the Company’s future financial performance, and include statements made by the Company regarding product development and obtaining FDA clearances. In some cases, forward-looking statements can be identified by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors” that may cause the Company’s or its industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.
The Company’s financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.
In this annual report, unless otherwise specified, all dollar amounts are expressed in United States Dollars and all references to “common shares” refer to the common shares in the Company’s capital stock.
As used in this annual report, the terms "we", "us", "our" and "Eaton" mean Eaton Scientific Systems, Inc. (formerly Pristine Solutions, Inc.), and its wholly-owned subsidiary, Eaton Scientific Systems, Ltd., unless otherwise indicated.
Corporate Overview
The Company’s principal executive office is located at 9595 Wilshire Blvd., Suite 900, Beverly Hills, CA 90212, with administrative operations at 1327 Ocean Avenue, Suite B, Santa Monica, California, 90401. The Company’s telephone number is 310-281-6923.
The Company’s website is
www.eatonscientific.com
.
The Company’s common stock is traded on the OTC Bulletin Board and the OTCQB under the symbol “ESSI”.
Corporate History
Formation and Development
The Company was incorporated in the state of Nevada on December 8, 2009
,
under the name Pristine Solutions, Inc. 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 manufactures the tankless water heaters under the brand Gleamous Electric Appliances.
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 the sole member of the Board of Directors of the Company.
On August 23, 2012, the Company and its 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. In addition, 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 Share Exchange, 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 Share Exchange and Common Stock Purchase Agreement, the total shares held by the ESSL Shareholders are 265,000,000, or approximately 59.8% of the issued and outstanding common stock of the Company as of October 30, 2012. 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.
As a result of the Share Exchange and Common Stock Purchase Agreement, (i) there was a change in control of the Registrant; (ii)
ESSL became the Company’s wholly owned subsidiary; and (iii)
the ESSL operations will continue as the Company’s primary business.
On November 27, 2012, the Company changed its name to
Eaton Scientific Systems, Inc
.
NOTE
: The following sections of this annual report and any further reference made to “the Company”, "we", "us", "our" and "Eaton" shall mean Eaton Scientific Systems, Inc. (formerly Pristine Solutions, Inc.), and its wholly-owned subsidiary, Eaton Scientific Systems, Ltd., unless otherwise indicated.
Description of Business
Headquartered in Beverly Hills, California, the Company is engaged in biomedical product development in the area of women’s health. The Company is a development stage company whose principal line of business is f
ocused on quality 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-Flashes”, a common symptom experienced by many pre-menopausal and post-menopausal women.
Product Strategy and Overview
The Company has recently completed its Clinical Trial Protocol entitled “An Open Label Escalating Study to Determine Maximum Necessary Dose (MND) of Homatropine Methylbromide needed for Palliation of Hot Flashes in Menopausal Women,” dated March 14, 2013, a copy of which is attached herewith as Exhibit 99.6,
for its new drug indication, with the goal of generating data that supports its claims. The Company has retained a team of medical professionals and is ready to begin Phase I of the Clinical Trial/Study (the “Study”).
On May 14, 2013, the Company entered into a Clinical Trial/Study Agreement with the American Institute of Research (the “CTS Agreement”) to, among other things, conduct the Study. A copy of the CTS Agreement is included in this filing as Exhibit 10.13. The Company’s goal is to complete the Study, barring any unforeseen delays, by the end of the 3
nd
calendar quarter of 2013.
The Study
will
consist of two parts: Study A and Study B. Study A
be run in 2 stages: (1) a baseline run-in stage where subjects take no drug and record selected baseline climacteric symptoms for a duration of 7 days, and (2) a dose escalation stage where subjects take the study drug starting at the lowest dose and can escalate the drug to the next highest does if the drug is not working based on improvement of symptoms, minimization of side effect and tolerability duration 14 days. After maximum dose needed is decided then Study B can begin, which will involve
a randomized double-blind placebo controlled study to test and measure the efficacy of Homatropine under its new indication.
Part of the Company’s mission is to prove its central thesis that Homatropine in an oral suspension formula can reduce hot flashes, and improve the quality of life in pre-menopausal, menopausal and post-menopausal women through multiple clinical trial validations. 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 FDA may potentially request additional Trials to be conducted by the Company prior to a review for consideration of Tropine 3 receiving an FDA Approval.
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 flashes, 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 $14.5 billion, 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.
Hormone Replacement Therapy Market
The U.S. Preventive Services Task Force (“USPSTF”), an independent group of health experts convened at the request of Congress, first hinted that hormone replacement therapy (“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:
|
§
|
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
|
§
|
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 flashes, 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:
Less common side effects of HRT include:
§
|
Blood clots and stroke (rare, but the most serious risk)
|
§
|
Headaches (including migraine)
|
§
|
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.
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 flashes 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 recently completed its Clinical Trial Protocol entitled “An Open Label Escalating Study to Determine Maximum Necessary Dose (MND) of Homatropine Methylbromide needed for Palliation of Hot Flashes in Menopausal Women,” dated March 14, 2013, a copy of which is attached herewith as Exhibit 99.6,
for its new drug indication, with the goal of generating data that supports its claims. The Company has retained a team of medical professionals and is ready to begin Phase I of the Clinical Trial/Study (the “Study”).
On May 14, 2013, the Company entered into a Clinical Trial/Study Agreement with the American Institute of Research (the “CTS Agreement”) to, among other things, conduct the Study. A copy of the CTS Agreement is included in this filing as Exhibit 10.13. The Company’s goal is to complete the Study, barring any unforeseen delays, by the end of the 3
nd
calendar quarter of 2013.
The Study
will consist of two parts: Study A and Study B. Study A
be run in 2 stages: (1) a baseline run-in stage where subjects take no drug and record selected baseline climacteric symptoms for a duration of 7 days, and (2) a dose escalation stage where subjects take the study drug starting at the lowest dose and can escalate the drug to the next highest does if the drug is not working based on improvement of symptoms, minimization of side effect and tolerability duration 14 days. After maximum dose needed is decided then Study B can begin, which will involve
a randomized double-blind placebo controlled study to test and measure the efficacy of Homatropine under its new indication.
Part of the Company’s mission is to prove its central thesis that Homatropine in an oral suspension formula can reduce hot flashes, and improve the quality of life in pre-menopausal, menopausal and post-menopausal women through multiple clinical trial validations. 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 FDA may potentially request additional Trials to be conducted by the Company prior to a review for consideration of Tropine 3 receiving an FDA Approval.
The Company intends on conducting Trials at multiple sites. In addition, the Company intends to publish its results in medical journals and women’s health publications.
Intellectual Property
The Company has filed a US Patent Application for a patent for its novel method for alleviating hot flashes 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 US Patent Application is based on a new indication for the use of Homatropine, an FDA Approved drug.
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 pending patent applications 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 included as Exhibit 99.2 to the Company’s Current Report on Form 8-K filed November 13, 2013.
|
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 Assignment was subsequently filed with the USPTO, and is included as Exhibit 10
.
8 to the Company’s Current Report on Form 8-K filed November 13, 2013.
|
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 included as Exhibit 99.1 to the Company’s Current Report on Form 8-K filed November 13, 2013.
|
e.
|
From the date of March 23, 2007 to September 24, 2012 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 included as Exhibit 10.6 to the Company’s Current Report on Form 8-K filed November 13, 2013.
|
g.
|
On March 24, 2012, the Company received an Action by the USPTO. The Company’s Response was prepared by Cislo and filed on September 25, 2012, a copy of which is included as Exhibit 99.3 to the Company’s Current Report on Form 8-K filed November 13, 2013.
|
The following table summarizes the Company’s filings with the USPTO:
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 September 14,2006
|
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.
Distribution
As the Company is still in the development stages and has not yet commenced commercial operations, it has yet to develop methods of distribution for its products beyond the business plan stage.
Facilities
In addition to its corporate headquarters, the Company maintains administrative operations at 1327 Ocean Avenue Suite B, Santa Monica, California 90401.
Employees
As of January 31, 2013, the Company had no employees, in addition to its directors and executive officers.
The Company currently has no employees, in addition to its directors and executive officers.
Research and Development
The Company has incurred $28,751 and $2,471 during the fiscal years ended January 31, 2013 and 2012, respectively, in expenditures relating to the research and development of its novel method for alleviating hot flashes in climacteric women, including costs for consultants, patent costs, and costs to conduct clinical trials. As of January 31, 2013, the Company has incurred $64,806 in research and development costs.
On May 14, 2013, the Company entered into a Clinical Trial/Study Agreement with the American Institute of Research (the “CTS Agreement”) to, among other things, 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. Pursuant to the CTS Agreement, the cost for the Study is approximately $257,875, based upon 50 (fifty) patients, not to exceed a cost of $5,037.50 per patient, plus preparation and pharmaceutical fees of $6,000.
Reports to Security Holders
The Company is not required to deliver an annual report to its stockholders, but will voluntarily send an annual report, together with the Company’s annual audited financial statements upon request. The Company is required to file annual, quarterly and current reports, proxy statements, and other information with the Securities and Exchange Commission. The Company’s Securities and Exchange Commission filings are available to the public over the Internet at the SEC's website at www.sec.gov.
The public may read and copy any materials filed by the Company with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The Company is an electronic filer. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The Internet address of the site is www.sec.gov.
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.
ITEM 1B.
UNRESOLVED STAFF COMMENTS
None.
The
Company’s principal executive offices are located at
9595 Wilshire Blvd, Suite 900, Beverly Hills, CA 90212, with operations at 1327 Ocean Avenue, Suite B, Santa Monica, CA 90401.
The Company currently rents the Beverly Hills space for approximately $100 a month, and sub-leases the Ocean Avenue space for $1,000 per month as of January 1, 2013.
Currently, this space is sufficient to meet the Company’s needs. However, once the Company expands its business to a significant degree, it will require additional space. The Company does not currently own any real estate.
The Company knows of no material, existing or pending legal proceedings against it, nor is the Company involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which its director, officer or any affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to its interest.