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EX-32 - SOX SECTION 906 CERTIFICATION OF THE CEO & CFO - ECO SCIENCE SOLUTIONS, INC.exhibit321.htm
EX-31 - SOX SECTION 302(A) CERTIFICATION OF THE CEO & CFO - ECO SCIENCE SOLUTIONS, INC.exhibit311.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

                                                                                                                                                           (Mark One)

[X]

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

For the quarterly period ended

October 31, 2011

 

or

[  ]

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

For the transition period from

 

to

 

Commission File Number

333-166487

PRISTINE SOLUTIONS INC.

(Exact name of registrant as specified in its charter)

Nevada

 

N/A

(State or other jurisdiction of incorporation or organization)

 

(IRS Employer Identification No.)

Stettin Albert Town, Trelawny, Jamaica

N/A

(Address of principal executive offices)

(Zip Code)

876-572-4681

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

[X]

YES

[  ]

NO

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  

 

[X]

YES

[  ]

NO

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

[  ]

Accelerated filer

[  ]

Non-accelerated filer

[  ]

(Do not check if a smaller reporting company)

Smaller reporting company

[X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act

 

[  ]

YES

[X]

NO

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

69,666,781 common shares issued and outstanding as of December 15, 2011.

 
 
 

 

PART I - FINANCIAL INFORMATION  

 

Item 1.  Financial Statements  

 

Our unaudited consolidated financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2


 

 

Pristine Solutions Inc.

(A Development Stage Company)

Consolidated Financial Statements

October 31, 2011

                                                                                                                                                                                                     Index

 

 

Consolidated Balance Sheets................................................................................................................................................... F–1

 

Consolidated Statements of Operations.................................................................................................................................   F–2

 

Consolidated Statements of Cash Flows................................................................................................................................   F–3

 

Notes to the Consolidated Financial Statements..................................................................................................................     F–4

 

 

 

 

 

 

 

 

 

 

 

 

 

3


 

Pristine Solutions Inc.

(A Development Stage Company)

Consolidated Balance Sheets

(Unaudited)

 

October 31,

2011

January 31,

2011

 

 

 

ASSETS

 

 

 

Current Assets

 

 

 

Cash

$ 201

$ 1,543

Accounts receivable

2,985

Inventory

6,480

1,050

 

 

 

Total Current Assets

6,681

5,578

 

 

 

Property and equipment, net

6,025

7,002

Total Assets

$ 12,706

$ 12,580

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

Current Liabilities

 

 

 

Accounts payable and accrued liabilities

$ 6,562

$ 1,172

Loans payable

28,084

9,985

Related party payables

2,315

2,055

Total Current Liabilities

36,961

13,212

 

Contingencies and Commitments

 

Stockholders’ Deficit

 

 

Preferred stock, 100,000,000 shares authorized, $0.001 par value;

no shares issued and outstanding

Common stock, 100,000,000 shares authorized, $0.0001 par value;

69,666,781 shares issued and outstanding

6,967

6,967

Additional paid-in capital

43,533

43,533

Deficit accumulated during the development stage

(74,755)

(51,132)

 

Total Stockholders’ Deficit

(24,255)

(632)

 

Total Liabilities and Stockholders’ Deficit

$ 12,706

$ 12,580

 

 

F-1


 

Pristine Solutions Inc.

(A Development Stage Company)

Consolidated Statements of Operations

(Unaudited)



For the

Three Months

Ended

October 31,

2011


For the

Three Months

Ended

October 31,

2010


For the

Nine Months

Ended

October 31,

2011


For the

Nine Months

Ended

October 31,

2010

From

December 8,

2009

(Inception)

to October 31,

2011

 

Sales

$ –

$ –

$ 1,995

         --        

$ 5,669

Sales returns

(672)

(1,425)

(1,425)

Cost of Goods Sold

224

(221)

(1,428)

Gross Margin

(448)

349

2,816

 

Operating Expenses

 

 

 

 

 

 

Depreciation and amortization

326     

326    

977    

489

1,791

General and administrative

5,878

16,079

25,311

41,543

77,355

 

Total Operating Expenses

6,204

16,405

26,288

42,032

79,146

 

Loss from Operations

(6,652)

(16,405)

(25,939)

(42,032)

(76,330)

 

Other Income (Expense)

 

 

 

 

 

 

Foreign exchange gain (loss)

2,805

22

2,316

(12)

1,575

 

Net Loss

$ (3,847)

$ (16,383)

$ (23,623)

$ (42,044)

$ (74,755)

 

Net Loss Per Share – Basic and Diluted

$ (0.00)

$ (0.00)

$ (0.00)

$ (0.00)

 

 

Weighted Average Common Shares Outstanding  Basic and Diluted

69,666,781

69,666,781

69,666,781

69,666,781

 

 
 
F-2

 

Pristine Solutions Inc

(A Development Stage Company)

Consolidated Statements of Cash Flows
(Unaudited)



For the

Nine Months

Ended

October 31,

2011


For the

Nine Months

Ended

October 31,

2010

From

December 8,

2009

(Inception) to

October 31,

2011

 

Cash Flows from Operating Activities

 

Net loss

$ (23,623)

$ (42,044)

$ (74,755)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

Depreciation and amortization

977

489

1,791

Changes in operating assets and liabilities:

 

 

 

 Accounts receivable

2,985

 Inventory

(5,430)

(2,184)

(6,480)

 Accounts payable and accrued liabilities

5,390

3,129

6,562

 Related party payable

260

(368)

2,315

 

 

 

 

Net Cash Used in Operating Activities

(19,441)

(40,978)

(70,567)

 

Cash Flows from Investing Activities

 

 

 

 

Purchase of property and equipment

(7,816)

(7,816)

 

Net Cash Used in Investing Activities

(7,816)

(7,816)

 

Cash Flows from Financing Activities

 

 

 

 

Proceeds from notes payable

18,099

28,084

Proceeds from the issuance of common stock

50,500

 

Net Cash Provided by Financing Activities

18,099

78,584

 

Increase (Decrease) in Cash

(1,342)

(48,794)

201

 

Cash - Beginning of Period

1,543

49,860

 

Cash - End of Period

$ 201

$ 1,066

$ 201

 

Supplementary Information:

 

 

 

Interest paid

$ –

$ –

$ –

Income taxes paid

$ –

$ –

$ –

 
 
 
F-3

 

 

 


 

Pristine Solutions Inc.

(A Development Stage Company)

Notes to the Consolidated Financial Statements

(Unaudited)

 

1.        Nature of Business and Continuance of Operations

Pristine Solutions Inc., (the “Company”) was incorporated in the State of Nevada on December 8, 2009.  The Company’s principal business is the sale and distribution of electric instant water heaters in Jamaica. 

These consolidated financial statements have been prepared on a going concern basis, which assumes the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary financing and the attainment of profitable operations.  As of October 31, 2011, the Company has incurred losses totaling $74,755 since inception, and has not yet generated any revenue from operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

2.        Summary of Significant Accounting Policies

The interim unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and the rules of the Securities and Exchange Commission for interim financial information. They do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. Therefore, these financial statements should be read in conjunction with the Company's audited consolidated financial statements and notes thereto contained in the Company's latest Annual Report filed with the SEC on Form 10-K for the year ended January 31, 2011. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the unaudited interim consolidated financial statements that would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal year as reported in the Form 10-K have been omitted.

a)       Basis of Presentation

These consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States and are expressed in US dollars. The Company’s fiscal year end is January 31.

b)      Principal of Consolidation

The consolidated financial statements include the accounts of Pristine Solutions Inc. and its 100% owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation.

c)       Use of Estimates

The preparation of consolidated financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to long-lived assets and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

d)      Revenue Recognition

Sales are recorded when products are shipped to customers. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. No provision for discounts or rebates to customers, estimated returns and allowances or other adjustments were recognized during the periods ended October 31, 2011 and 2010. In instances where products are configured to customer requirements, revenue is recorded upon the successful completion of the Company’s final test procedures and the customer’s acceptance. No revenues were deferred due to products being configured to customer requirements during the periods ended October 31, 2011 and 2010.

 

 

 

 

 

F-4


 

Pristine Solutions Inc.

(A Development Stage Company)

Notes to the Consolidated Financial Statements

(Unaudited)

2.       Summary of Significant Accounting Policies (continued)

e)       Product Warranty

The Company provides a one year warranty on all products sold. The Company’s policy is to accrue a warranty liability equal to 2% of sales based on the manufacturer’s past experience. Spare parts equal to 1% of each order are provided to the Company free of charge from the manufacturer. During the nine months ended October 31, 2011, the Company recognized $11 (2010 - $nil) of warranty expenses in accrued liabilities and cost of goods sold. The Company did not have any warranty claims during the periods ended October 31, 2011 and 2010. The Company will continue to evaluate its warranty policy based on actual products returned and costs incurred.

The Company’s warranty accrual is based on the Company’s best estimates of product failure rates and unit costs to repair. However, the Company plans to release new products. As a result, it is at least reasonably possible that products could be released with certain unknown quality and/or design problems. Such an occurrence could result in materially higher than expected warranty and related costs, which could have a materially adverse effect on the Company’s results of operations and financial condition.

f)       Earnings (Loss) Per Share (“EPS”)

Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. At October 31, 2011, the Company had no potentially dilutive securities outstanding.

g)       Recent Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect and that may impact its consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on their financial position or results of operations.

 

3.        Related Party Transactions

Office services and office space are provided without charge by the sole officer and director of the Company. Such costs are immaterial to the consolidated financial statements and accordingly, have not been reflected therein.

As of October 31, 2011, the Company owes the sole director of the Company $2,315 (January 31, 2011 - $2,055) for expenditures paid on behalf of the Company.  The amount owed is unsecured, non-interest bearing, and has no specified repayment terms.

4.        Loans payable

As of October 31, 2011, the Company owes an unrelated third party $10,033 (January 31, 2011 - $9,985) for a note payable dated December 21, 2010. The note payable is unsecured, non-interest bearing, and has no specified repayment terms.

As of October 31, 2011, the Company is indebted to an unrelated third party for $18,051.  This loan is unsecured, non-interest bearing, and is due on demand.

5.        Commitments 

On December 30, 2009, the Company entered into a license agreement to sell and distribute electric instant water heaters in Jamaica. According to the terms of the agreement, the Company was required to purchase no less than 50 products within six months of the agreement date. The agreement was effective for an initial period of one year and could be extended for a further period by either party if written notice was given 30 days prior to the expiration date. On March 18, 2011, the Company extended the term of the license agreement for an additional six months.  According to the terms of the agreement, the Company is required to purchase no less than 150 products within six months. As of October 31, 2011, 172 units of water heaters had been ordered, of which 52 have been received by the Company and full payment had been made on all the units.

 

 

F-5


 

 

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations  


FORWARD-LOOKING STATEMENTS
  

This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these terms, or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our unaudited consolidated financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our unaudited consolidated financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.

Unless otherwise specified in this quarterly report, all dollar amounts are expressed in United States dollars and all references to “common stock” refer to shares of our common stock.

As used in this quarterly report, the terms “we”, “us”, “our” and “our company” mean Pristine Solutions Inc., and our subsidiary Pristine Solutions Limited, a Jamaica corporation, unless otherwise indicated.

Corporate Overview  

We were incorporated on December 8, 2009 under the laws of the State of Nevada. We have a wholly-owned subsidiary, Pristine Solutions Limited, incorporated under the laws of Jamaica. Our principal executive offices are located at Stettin Albert Town, Trelawny, Jamaica. Our telephone number is (876) 572-4681. Our fiscal year end is January 31.

We are a startup, development stage company. We have only recently begun operations and we have relied upon the sale of our securities and proceeds from debt to fund those operations as we have only generated limited revenues from the sale of our products. We intend on developing a network of sales points for the sale and service of tankless water heaters in Jamaica. We aim to be 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.

On December 30, 2009, we entered into a distribution agreement with the manufacturer of the tankless hot water heaters which we hope to sell in Jamaica: Zhongshan Guangsheng Industry Co., Ltd., of China (“Zhongshan”). Zhongshan currently manufactures the tankless hot water heaters under the brand Gleamous Electric Appliances. Zhongshan is part of an international enterprise that also owns a research and development group, factory, and sales group and is looking to expand into other markets. Our management hopes that we can expand the Gleamous brand into the Jamaican market and the rest of the Caribbean. Pursuant to the terms of this agreement, we acquired 52 units of Zhongshan’s various Gleamous tankless water heaters of which we were required to purchase 50 within the first 6 months of the agreement. As consideration, we were granted the exclusive license to distribute the products within Jamaica. The term of the agreement was 1 year and may be terminated by either party with 30 days written notice.

 

 

 

 

 

 

4


 

 

On March 18, 2011, we entered into a new license agreement with Zhongshan for an additional six months. According to the terms of the agreement, our company is required to purchase no less than 150 products within six months from the date of the agreement. As of October 31, 2011, 172 units of water heaters had been ordered, of which 52 units have been received by our company and full payment has been made on all the units.

Employees  

As of October 31, 2011, we have 3 employees as we have hired two full-time commissioned sales staff to market, sell and install our tankless hot water tanks and the third employee is our sole director and officer, who contributes approximately 50% of her time to our company.

We currently engage independent contractors in the areas of accounting and legal services. We plan to engage independent contractors in the areas of marketing, bookkeeping, investment banking and other services including at least 3 part time consultants who will each focus on sales and marketing, business development and investor relations.

Purchase of Significant Equipment  

We anticipate spending approximately $60,000 on the purchase of tankless water heaters under our distribution agreement with Zhongshan during the next 12 months. Pursuant to the terms of the agreement, after confirmation of the order, our company shall pay a 30% deposit prior to production in favor of Zhongshan within the time stipulated in the relevant sales confirmation with 70% balance paid against delivery notice before the delivery of the order. As of October 31, 2011, an additional 120 units have been ordered but have yet to be delivered. 

Personnel Plan  

Other than as stated above, we do not anticipate any significant changes in the number of employees during the next 12 months. However, if we are successful with obtaining any purchase orders from our targeted wholesalers and distributors, then we will hire part time employees to act as after sales and service representatives of our company, and we will also hire additional full-time commission oriented sales representatives to obtain additional purchase orders for our company. The numbers of employees to be hired are uncertain and will depend on the success and size of the initial purchase order.

Plan of Operation  

You should read the following discussion of our financial condition and results of operations together with our unaudited consolidated financial statements and the notes thereto included elsewhere in this filing. Our unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States. This discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those anticipated in these forward-looking statements.

Anticipated Cash Requirements  

We estimate that our expenses over the next 12 months will be approximately $470,000 as described in the table below. These estimates may change significantly depending on the nature of our future business activities and our ability to raise capital from shareholders or other sources.

 
 
 
 
 
 
 
5
 

                                                               Description    

 

 

 

 

 

Estimated

Completion

Date

 

 

 

 

 

 

 

Estimated

Expenses

 

 

 

Legal and accounting fees

 

12 months

 

 

$  80,000

 

Product acquisition, testing and servicing costs

 

12 months

 

 

80,000

 

Marketing and advertising

 

12 months

 

 

75,000

 

Investor relations and capital raising

 

12 months

 

 

20,000

 

Management and operating costs

 

12 months

 

 

40,000

 

Salaries and consulting fees

 

12 months

 

 

50,000

 

Fixed asset purchases for distribution centers

 

12 months

 

 

60,000

 

General and administrative expenses

 

12 months

 

 

65,000

 

Total  

 

 

 

 

$470,000  

 


 

We intend to meet our cash requirements for the next 12 months through a combination of debt financing and equity financing by way of private placements. We currently do not have any arrangements in place to complete any private placement financings and there is no assurance that we will be successful in completing any such financings on terms that will be acceptable to us.

If we are not able to raise the full $470,000 to implement our business plan as anticipated, we will scale our business development in line with available capital. Our primary priority will be to retain our reporting status with the Securities and Exchange Commission, which means that we will first ensure that we have sufficient capital to cover our legal and accounting expenses. Once these costs are accounted for, in accordance with how much financing we are able to secure, we will focus on product acquisition, testing and servicing costs, as well as marketing and advertising of our products. We will likely not expend funds on the remainder of our planned activities unless we have the required capital.

If we are able to raise the required funds to fully implement our business plan, we plan to implement the business plan in the order provided below. If we are not able to raise all required funds, we will prioritize our corporate activities as chronologically laid out below because the activity which needs to be undertaken in the initial months is prerequisite for future operations. We anticipate that the implementation of our business will occur as follows:

October 2011 to April 2012  

  • Completion of a shopping cart to be added to our website for online sales.
  • Market products to large retailers and distributors.
  • Testing of the units have been successful, and purchase additional units from Zhongshan, the manufacturer.
  • Review opportunities for establishment of retail locations.
  • Attend trade shows.
  • Market products to hotels and resorts.
  • Purchase additional assets such as additional delivery vehicles that can be used to service and market different regions.
  • Raise additional capital for anticipated cash requirements (see table above).
 

 

 

6


 

Results of Operations

Three and nine months ended October 31, 2011 and 2010.

 

 

 

 

 

 

Three months  

ended  

October 31,
2011

 

 

 

 

 

 

Three months  

ended  

October 31,
2010

 

 

 

 

 

 

Nine months

ended  

October 31, 2011

 

 

 

 

 

 

Nine months  

ended  

October 31, 2010

 

Revenue

$

Nil

 

$

Nil

 

$

1,995

 

$

Nil

Sales returns

$

(672)

 

$

Nil

 

$

(1,425)

 

$

Nil

Cost of Goods Sold

$

224

 

$

Nil

 

$

(221)

 

$

Nil

Operating Expenses

$

6,204

 

$

16,405

 

$

26,288

 

$

42,032

Foreign exchange gain (loss)

$

2,805

 

$

22

 

$

2,316

 

$

(12)

Net Loss

$

(3,847)

 

$

(16,383)

 

$

(23,623)

 

$

(42,044)

 

Revenue

We had revenues of $Nil in the three months ended October 31, 2011 compared with $Nil revenue for the three months ended October 31, 2010. There were some sample units that we repossessed due to non-payment by the vendors. We had revenues of $1,995 in the nine months ended October 31, 2011 compared with $Nil for the nine months ended October 31, 2010.  Revenues increased for the nine month period ended October 31, 2011 as a result of selling sample units from our first order.

Operating Expenses

We had operating expenses of $6,204 in the three months ended October 31, 2011 compared with $16,405 for the three months ended October 31, 2010. Operating expenses decreased for the three-month period due to a decrease in general and administrative expenses.  We had operating expenses of $26,288 in the nine months ended October 31, 2011 compared with $42,032 for the nine months ended October 31, 2010.  Operating expenses decreased for the nine month period due to a decrease in general and administrative expenses.

Liquidity and Capital Resources

Working Capital  

 

 

 

 

As at  

October 31, 2011  

 

 

 

 

As at  

January 31, 2011  

 

Current Assets

$

6,681

 

$

5,578

Current Liabilities

$

36,961

 

$

13,212

Working Capital Deficit

$

(30,280)

$

(7,634)

 
 

Our net cash used by operating activities for the nine months ended October 31, 2011 was $19,441 compared to $40,978 for the nine months ended October 31, 2010.

Our net cash used by investing activities for the nine months ended October 31, 2011 was $Nil compared to $7,816 for the nine months ended October 31, 2010.   The cash used in investing activities for 2010 was for the purchase of property and equipment.

Our net cash provided by financing activities for the nine months ended October 31, 2011 was $18,099 compared to $Nil for the nine months ended October 31, 2010.   The cash provided from financing activities in 2011 is the result of proceeds from notes payable.

Our management believes that we will need additional funding in order to meet our operating expenses.

7


 

 

Future Financings  

We intend to meet our cash requirements for the next 12 months through a combination of debt financing and equity financing by way of private placements. We currently do not have any arrangements in place to complete any private placement financings and there is no assurance that we will be successful in completing any such financings on terms that will be acceptable to us.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with United States generally accepted accounting principles requires our management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Our management routinely makes judgments and estimates about the effects of matters that are inherently uncertain.

Use of Estimates

The preparation of consolidated financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Our company regularly evaluates estimates and assumptions related to long-lived assets and deferred income tax asset valuation allowances. Our company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by our company may differ materially and adversely from our company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Revenue Recognition

Sales are recorded when products are shipped to customers. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. No provision for discounts or rebates to customers, estimated returns and allowances or other adjustments were recognized during the periods ended October 31, 2011 and 2010. In instances where products are configured to customer requirements, revenue is recorded upon the successful completion of our company’s final test procedures and the customer’s acceptance. No revenues were deferred due to products being configured to customer requirements during the periods ended October 31, 2011 and 2010.

Product Warranty

Our company provides a one year warranty on all products sold. Our company’s policy is to accrue a warranty liability equal to 2% of sales based on the manufacturers past experience. Spare parts equal to 1% of each order are provided to our company free of charge from the manufacturer. During the nine months ended October 31, 2011, our company recognized $11 (2010 - $nil) of warranty expenses in accrued liabilities and cost of goods sold. Our company did not have any warranty claims during the periods ended October 31, 2011 and 2010. Our company will continue to evaluate its warranty policy based on actual products returned and costs incurred.

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Our company’s warranty accrual is based on our company’s best estimates of product failure rates and unit costs to repair. However, our company plans to release new products. As a result, it is at least reasonably possible that products could be released with certain unknown quality and/or design problems. Such an occurrence could result in materially higher than expected warranty and related costs, which could have a materially adverse effect on our company’s results of operations and financial condition.

Recent Accounting Pronouncements

Our company has implemented all new accounting pronouncements that are in effect and that may impact its consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on their financial position or results of operations.

Item 3.  Quantitative Disclosures About Market Risks

As a “smaller reporting company”, we are not required to provide the information required by this Item.

Item 4.  Controls and Procedures  

Management’s Report on Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president (our principal executive officer, principal financial officer and principal accounting officer) to allow for timely decisions regarding required disclosure.

As of the end of the quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our president (our principal executive officer, principal financial officer and principal accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president (our principal executive officer, principal financial officer and principal accounting officer) concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.

Changes in Internal Control over Financial Reporting  

There have been no changes in our internal controls over financial reporting that occurred during the quarter ended October 31, 2011 that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.

 

 

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PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

Item 1A.  Risk Factors

As a “smaller reporting company”, we are not required to provide the information required by this Item.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3.  Defaults Upon Senior Securities

None.

Item 4.  [Removed and Reserved]

Item 5.  Other Information

None.

Item 6. Exhibits

Exhibit Number  

Description  

(3)  

Articles of Incorporation and Bylaws  

3.1

Articles of Incorporation of Pristine Solutions Inc. (incorporated by reference from our Registration Statement on Form S-1 filed May 3, 2010)

3.2

Certificate of Amendment filed with the Nevada Secretary of State on January 29, 2010 (incorporated by reference from our Registration Statement on Form S-1 filed May 3, 2010)

3.3

Bylaws of Pristine Solutions Inc. (incorporated by reference from our Registration Statement on Form S- 1 filed May 3, 2010)

(10)  

Material Contracts  

10.1

Consulting Agreement with Christine Buchanan-McKenzie (incorporated by reference from our Registration Statement on Form S-1 filed May 3, 2010)

10.2

License Agreement with Zhongshan Guangsheng Industry Co., Ltd. (incorporated by reference from our Registration Statement on Form S-1 filed May 3, 2010)

(21)  

List of Subsidiaries  

21.1

Pristine Solutions Limited, a Jamaica corporation

(31)  

Section 302 Certifications  

31.1*

Section 302 Certification of Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer.

(32)  

Section 906 Certification  

32.1*

Section 906 Certification of Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer.

101**

Interactive Data File

101.INS
101.SCH
101.CAL
101.DEF
101.LAB
101.PRE

XBRL Instance Document

XBRL Taxonomy Extension Schema Document

XBRL Taxonomy Extension Calculation Linkbase Document

XBRL Taxonomy Extension Definition Linkbase Document

XBRL Taxonomy Extension Label Linkbase Document

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.  

10

 


 

 

SIGNATURES  

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

PRISTINE SOLUTIONS INC.   

 

 

Date: December 16, 2011

/s/ CHRISTINE BUCHANAN-MCKENZIE

 

Christine Buchanan-McKenzie

 

President, Chief Executive Officer, Chief Financial

Officer, Secretary, Treasurer and Director

 

(Principal Executive Officer, Principal Financial Officer

 and Principal Accounting Officer)

 
         
 
 
 
 
 
 
        
 
 
 
 
 
 
 
 
 
 
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