Attached files

file filename
EX-32.1 - ENHANCE SKIN PRODUCTS 10K, CERTIFICATION 906 - Enhance Skin Products Incenhanceskinexh32_1.htm
EXCEL - IDEA: XBRL DOCUMENT - Enhance Skin Products IncFinancial_Report.xls
EX-31.1 - ENHANCE SKIN PRODUCTS 10K, CERTIFICATION 302 - Enhance Skin Products Incenhanceskinexh31_1.htm


SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

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

For the fiscal year ended April 30, 2014

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

Commission File Number 000-52755

ENHANCE SKIN PRODUCTS INC.
(Exact name of registrant as specified in its charter)
 
Nevada
84-1724410
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.) 

50 West Liberty Street, Suite 880, Reno NV  89501
(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (416) 306-2493

Securities to be Registered Pursuant to Section 12(b) of the Act: None

Securities to be Registered Pursuant to Section 12(g) of the Act:

Common Shares, par value $0.001 per share

Indicate by check mark if registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.   Yes o   No x
 
Indicate by check mark if registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.   Yes o   No x
 
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.   Yes x   No o
 
Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B is contained in this form and no disclosure will be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K.   x

Indicate by check mark whether the registrant is a large accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “small reporting company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer
o
Accelerated filer
o
Non-accelerated filer
o  (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 o   No x

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:
 
Number of shares outstanding of the registrant's class of common stock as of July 7, 2014: 101,017,882.
 
 
 
Table of Contents
 
1
     
     
     
     
     
     
     
7
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
 
 
 
 
 
 
 
PART I
 
ITEM 1.  BUSINESS.
 
Our financial statements are stated in United States dollars and are prepared in accordance with generally accepted accounting principles in the United States of America.
 
In this annual report, unless otherwise specified, all dollar amounts are expressed in United States dollars.

Enhance Skin Products Inc., formerly Zeezoo Software Corp. (“Zeezoo”) was originally incorporated under the laws of the State of Nevada on November 14, 2006. 

Pursuant to an Asset Purchase Agreement by and between Zeezoo and Enhance Skin Products Inc., a privately owned Ontario corporation (“Enhance Private”), which closed on August 14, 2008, Zeezoo acquired all of the intellectual property and certain liabilities of Enhance Private (the “Assets”). In addition to shares issued for the asset purchase and the cancellation of certain securities of Zeezoo, Enhance Private acquired approximately 57.6% of the issued and outstanding shares of common stock, par value $0.001 per share (the “Common Stock”), of Zeezoo. On August 28, 2008 Zeezoo changed its name to Enhance Skin Products Inc. (the “Company”).

The Company is now a developer of premium cosmeceutical products marketed under its “Visible Youth” trademark. Cosmeceuticals are topically applied products containing ingredients that influence the biological function of skin and can be described as a marriage between cosmetics and pharmaceuticals. These products may improve the appearance and condition of the skin by delivering nutrients or protectants necessary for healthy skin.  

The Freedonia Group, Cosmeceutical Study predicts that US demand for cosmeceutical products is expected to increase 5.8  % per annum to $8.5 billion in 2015, driven by an aging populace seeking to maintain the appearance of youth. The target market for cosmeceuticals continues to expand beyond the traditional 45-years-and-older demographic to include much younger individuals, as the national obsession with youth continues and focus shifts to products intended to stave off the first signs of aging. Further supporting growth will be an increasingly competitive employment environment, a steady stream of new and technologically advanced product introductions and the continuation of astute consumer-targeted marketing.

The Visible Youth skin care line utilizes high purity, medical-grade hyaluronic acid (also called hyaluronan or HA) of specific molecular size to deliver hydration to the skin. The brand also contains products that are proprietary (patent pending) synergistic formulations of two or more active ingredients that include the specific, medical-grade hyaluronic acid. Visible Youth is formulated to help improve the healthy appearance and feel of skin and addresses the loss of HA-water complex, a natural component of the skin without which the underlying structure of skin collapses. Visible Youth™ is formulated to help restore the skin’s natural supply of HA-water complex and works to rehydrate the skin at the cellular level. Visible Youth utilizes the same unique fraction of hyaluronan used in the development of the topical drug product Solaraze to deliver its active ingredient through to the dermis. In the case of Visible Youth, the ingredient that we are delivering is water for deep hydration.

The Visible Youth professional products also utilise Vitryxx/HA Bio-active Glass Serum; a new, effective and easy-to-formulate anti-aging ingredient with potential use in a wide variety of personal care products. It is based on a proprietary formulation of Hyaluronic Acid and bioactive glass in a serum, developed by Enhance Skin in collaboration with Schott Glass. This unique formulation has been designed to deliver both the product benefits of Hyaluronic Acid and Bioactive Glass Powder as well as provide additional advantages from the combination of both materials.  Bioactive glass has been reported to have strong anti-inflammatory activity. Hyaluronan, also has strong anti-inflammatory activity, and we thus believe should provide synergistic benefits to the bioactive glass.

Products
 
Hyaluronan, which is the basis of all Visible Youth products, is a naturally occurring sugar polymer of central biological importance. Hyaluronic acid is present in every tissue of the body. It has many functions, including stimulating the tissue’s water retention capabilities. Three percent of the human body, by dry weight, is composed of HA. For example, hyaluronic acid is found in the eyes and keeps them round and it is found in joints as part of the synovial fluid and acts as a lubricant and shock absorber. However, 56% of the HA in our bodies is found in the skin, where it helps retain moisture and structure. Together with collagen and elastin, HA forms the cement that holds cells together.

Studies have shown (Stern, RJ, 2006, Hyaluronan: Key to Skin Moisture, 246-277, In: Dry Skin and Moisturizers, Loden, M and HI Maibach Eds.) that fragmentation of the HA polymer generates size-specific pieces, or oligomers, with widely differing biological activities.
 
 
 
 
However, it is difficult to synthesize HA free of contaminating glycoprotein, lipids and other tissue material in the laboratory setting. In spite of these drawbacks, many cosmetic and cosmeceutical manufacturers continue to incorporate “cosmetic grade” HA into their products and claim their beneficial effects for their products. This grade of HA can be impure and ill-defined as to molecular size and biological activities and can therefore be less effective.
 
Dr. Samuel Asculai, our Chief Scientific Officer, has, in the course of his career, worked to define the size and purity of the HA molecule that would result in maximum hydration, dermal delivery, systematic targeting and safety. His work has resulted in over 30 patents defining the discovery of what the company believes is a HA oligomer of extremely high purity that provides the hydrating, delivery and targeting characteristics not found in “cosmetic grade” HA. The Visible Youth line is the product of Dr. Asculai’s work.
 
The Visible Youth skin care line currently has six products, all of which use medical grade HA and are hypoallergenic, non-irritating, fragrance free, non-comodegenic, non-occlusive and oil free:

Visible Youth Revitalizing Skin Formula:
A Serum for topical treatment of all areas of the face and neck. Replenishing hyaluronate helps to restore, correct and maintain the skin’s optimal moisture balance. Fine and deep lines are diminished over time, while the skin’s tone, texture, color and radiance are improved. This leaves the individual with healthier, more youthful looking skin.

Visible Youth Revitalizing Eye Zone Gel:
Addresses the delicate needs of the skin around the eye area. An ultra light gel combining the hydrating benefits of hyaluronate, collagen and glycerin with the healing and antioxidant properties of Vitamin E. It is a safe non-irritating gel that reduces puffiness, smoothes fine lines and improves the elasticity and texture of skin.

Visible Youth Revitalizing Moisturizer:
Containing  our specific HA fraction and other healthy emollients, this unique cream delivers hydrating nutrition to the skin and neck and is particularly effective when used after Visible Youth Skin Revitalizing Formula.

Visible Youth Revitalizing Cleanser:
A mild, non-soap and non-alkaline gel, Revitalizing Cleanser is formulated for all skin types to gently remove impurities without breaking the acid mantle of the skin.

Visible Youth Healing Complex:
A proprietary (patent pending) synergistic formulation of Hyaluronic Acid and  bioactive glass that delivers a restorative formula to treated skin following a professional skin resurfacing procedure. Developed for use at home, the Healing Complex acts as a humectant in combination with bioactive ceramic micro-particles to aid in healing  The Healing Complex also provides anti-microbial and anti-inflammatory properties while actively helping to attenuate redness.

Visible Youth Healing Complex Plus 3% Lidocaine:
For Physician use only, this is the Healing Complex with 3% Lidocaine added to be applied immediately after a professional skin-resurfacing procedure. Lidocane helps relieve pain and discomfort while decreasing irritation.

The Company is in the process of refining its formulations and plans to refresh its packaging to re-launch the Visible Youth brand in the Consumer and Professional markets. The Visible Youth Revitalizing Skin Formula, Visible Youth Revitalizing Moisturizer, Visible Youth Eye Zone Gel, and Visible Youth Revitalizing Cleanser are planned to be specifically formulated for the Consumer market. The Visible Youth Healing Complex and Visible Youth Healing Complex plus 3% Lidocaine, plus reformulated versions of the Skin Formula, Eye Zone Gel and Moisturizer to include Vitryxx™, are expected to be marketed under the Visible Youth “Professional” brand.

Product Development
 
We also plan to develop additional products under the Visible Youth trademark, which may include Visible Youth Deep Hydration Night Cream, Visible Youth Brightening/Lightening Moisturizer and Serum, Visible Youth BioGlass Mask, Visible Youth Neck Zone Gel, Visible Youth + SPF 30. We would anticipate launching two to three additional formulations per year after the re-launch of the Visible Youth Brand. We will also seek to license our products to marketing partners in Europe and the fast growing markets of Australasia.

The Company is also evaluating a number of other technologies and products under collaborations with other companies and universities which we would seek to develop and market either as cosmecueticals or as medical devices depending on regulatory requirements. The Company plans to seek development partners and/or additional funding at the appropriate time to develop some or all its development candidates using its HA delivery technology.
 
 
 
 
Intellectual Property and Patent Protection
 
At present, we have the following registered patents and trademarks:

Patent Applications

While attempting to create topical formulations of HA with Vitryxx™, a commercially available bioglass made by Schott Ag, we observed that the resulting formulations were able to maintain acidic pH for up to 24 months.  Furthermore, clinical evaluation of a HA/Vitryxx formulation, conducted at Essex Testing Clinic, Verona, New Jersey, revealed that after four weeks of daily use, up to 100% of the subjects responded with improvements in at least one or more skin aging parameters. These observations are also the foundation of the Visible Youth Healing Complex line.  These observations are also the subject of a PCT patent application entitled Cosmetic Composition for the Treatment of Skin and Methods Thereof  that was filed in September 2007.  The PCT  application has matured into the national patent applications set out below.
 
Title of Invention
Country
Status
Serial No.
National Phase Entry Date
Cosmetic Composition for the Treatment of Skin and Methods Thereof
Canada
Application
2,662,581
March 5, 2009
Cosmetic Composition for the Treatment of Skin and Methods Thereof
United States
Notice of Allowability May 2014
12/439,811
March 3, 2009
Cosmetic Composition for the Treatment of Skin and Methods Thereof
Europe
Application
078005865
March 16, 2009
Cosmetic Composition for the Treatment of Skin and Methods Thereof
Australia
Granted January 2014
2007295894
April 2, 2009
Cosmetic Composition for the Treatment of Skin and Methods Thereof
New Zealand
Granted January 2013
575334
March 5, 2009
Cosmetic Composition for the Treatment of Skin and Methods Thereof
China
Granted December 2013
100037
April 9, 2009
Cosmetic Composition for the Treatment of Skin and Methods Thereof
Japan
Application
2009/527658
March 10, 2009
Cosmetic Composition for the Treatment of Skin and Methods Thereof
Hong Kong
Application
09110376.4
November 6, 2009

Trademarks
Trademark
 
 
Country
 
Registration No.
   
Classes
 
Status
                   
Visible Youth
 
United States
    3139439       03  
Granted/Registered
Visible Youth
 
Australia
    768865       03, 05  
Granted/Registered
Visible Youth
 
Canada
    A393144       03, 05  
Granted/Registered
Visible Youth
 
France
    1590434       03, 05  
Granted/Registered
Visible Youth
 
Japan
    2457750       03  
Granted/Registered
Visible Youth
 
Switzerland
    508958       03, 05  
Granted/Registered
Visible Youth
 
EU Community
    002984367       03, 05  
Granted/Registered
Visible Youth
 
PR China
    12407092/12407091       03, 05  
Application
 
Our trademarks registrations are granted for a specific period in each jurisdiction, and those registrations may be maintained indefinitely by renewing them periodically.  Generally, our trademark registrations are renewable every 5 to 10 years, depending on the particular jurisdiction.
 
 
 
 
The Company received a Section 45 Notice from the Canadian Intellectual Property Office dated December 18, 2012 requesting that the Company, in accordance with Section 45 of the Trade-marks Act, furnish evidence within three months from the date of the notice demonstrating use of the trademark Visible Youth in Canada at any time during the three year period immediately preceding the date of the notice. The Company provided such evidence in the form of an affidavit on March 14, 2013. On August 26, 2013 the Company received a copy of Glycobiocsiences response, dated August 12, 2013, to its evidence.  The Company filed its response to that submission on December 23, 2013.  On January 9, 2014 Glycobioscienses requested an oral hearing, which was held on June 25, 2014.The Company expects to hear the results of the hearing in six to eight weeks.  In the course of preparing this affidavit, the Company discovered that Glycobiosciences Inc has been offering for sale and selling VISIBLE YOUTH VY” anti-aging revitalizing formula containing hyaluronate sodium to the public. The Company also discovered that on December 20, 2012, Glycobiosciences Inc. filed a Canadian trademark application to register VISIBLE YOUTH for cosmetics. On March 13, 2013, the Company filed a Notice of Infringement of Trademark on Glycobiosciences. The Company intends to vigorously defend its Visible Youth trademark.

Government Approval of Principal Products

We are not required to obtain government approval of our products.

Effect of Existing Governmental Regulations on our Business

Our operations and products are subject to the United States Federal Food Drug and Cosmetic Act (the “FDNC”).  The FDNC is a set of laws passed by Congress giving authority to the United States Food and Drug Administration to oversee the safety of food, drugs, and cosmetics.  Generally, the FDNC prohibits the manufacture, labeling or introduction into interstate commerce of any cosmetic that is adulterated or misbranded.

Also, we are subject to the provisions of the International Nomenclature of Cosmetic Ingredients (“INCI”).  INCI is the official dictionary for cosmetic ingredients.  Pursuant to INCI, manufacturers of cosmetic ingredients are required to submit all new ingredients for registration in the INCI system.  Accordingly, to comply with legal labeling requirements, we are required to use the official INCI name of the ingredients on our labels.

Markets

Cosmeceutical products with therapeutic elements in their composition are enjoying increased popularity in worldwide markets. As a greater number of women and men are visiting dermatologists and expressing concern about the health of their skin, cosmeceuticals provide answers to their cosmetic and health needs. Products such as anti-aging creams, tanning lotions and shampoos are beginning to incorporate medicinal grade ingredients and nutritional supplements in order to improve their efficiency and respond to market demand.

The Company believes that its products should have wide appeal to all skin types and all age groups.

It was Enhance Skin Products’ original plan to reach the targeted consumers by a direct dispense method; that is selling the Visible Youth products, through the services of independent aesthetic sales representatives, exclusively through physician offices, Medical Spas and licensed aestheticians, and supplemented by online sales with appropriate credit paid to back to referring physicians and aestheticians. Accordingly the initial production run and web site shopping cart were completed in June 2009.

During the second half of 2009, it became apparent that due to the recession, the direct dispense business model in the US was changing. Because of the attrition of funding sources, aesthetic sales reps had to commit increased time and effort helping customers finance equipment purchases, making them reluctant to spend time promoting the sale of lower commission products such as cosmecueticals. This, coupled with the reticence of patients to pay premium prices for unfamiliar brands, made it difficult for the Company to recruit independent sales reps. Sales representatives who did join the Company reported that physician offices were cutting back on product offerings due to the economic climate and were reluctant to take on new as yet unproven products.

In late 2010 we concluded that the Company should re-position and relaunch the Visible Youth product line in North America, so as to be able to pursue a direct to consumer (“DTC”) marketing program, in addition to a re-focused professional, direct dispense (“Professional”) strategy. In early 2011 the Visible Youth website was updated for new DTC pricing and attempts were made to access affiliate networks utilizing new communication methods such as blogs, web-based social networks (Facebook, Twitter), email, etc., to introduce, and acquire customers for the selected Visible Youth DTC products. The professional line was not re-focused and our DTC activities were not successful due to the lack of organizational and financial resources.
 
 
 
 
Since Mid 2011 the product line has not been actively promoted in the United States with a sales force or advertisement, save for sampling and through our website, to professionals or consumers partly due to the lack of financial resources but also as the Company spent considerable time in attempting to complete unsuccessful private financing transactions to fund the DTC and Professional strategy and, then, the last year on a proposed merger with nutraceutical company Age Reversal Inc., who ultimately withdrew from the merger in January 2013. We have however continued to actively market the line in Canada, where we have our Corporate Office and our Chief Scientific Officer resides, and to market and sell product and to provide free samples to existing and potential customers and professionals in the USA and Canada who are highly supportive of the product range. Sales of the products have however continued to be very low primarily, we believe, due to the lack of marketing support, non attendance at trade shows and exhibitions and the absence of clinical studies on the key formulations, necessary to support marketing efforts. We have also been negatively impacted by the bankruptcy of our US fulfillment centre and have not had the financial resources to replace the fulfillment centre.

In February, 2013 we decided to seek external professional help on our future marketing strategy as part of the Restructuring Plan. We have engaged a US based consultancy firm with a unique set of skills and extensive beauty industry experience and relationships to undertake an audit of the Visible Youth products and brand and to help reposition the brand and develop a strategy for its re-launch in the US and other markets, both as a consumer and professional brand. The principals of this firm have over 80 years of combined experience within the beauty and professional services businesses. They have independently created, launched and sold their brands to two Fortune 500 companies. They also have longstanding significant relationships with manufacturers, packaging companies, and retailers worldwide and we feel they are uniquely placed to support our brand development, distribution and fulfillment needs for access to the end consumer. We have prepared a business and marketing plan to enable us to commence the next step of the exercise, namely a “refreshed design” and creative concepts, the creation of a retail plan and ultimately commercialization and re-launch. We also plan to undertake additional clinical studies to support the marketing campaign. Clinical studies typically involve 20-50 subjects using the product between 8 – 14 weeks takes 3 – 4 months to the issue the final report. As part of this exercise we will also be seeking a new US fulfillment centre.
 
Additional funding will be required to implement the marketing plan and to conduct the clinical studies to support the marketing plan.  There can be no assurance that the Company will be able to secure the required additional funding on terms acceptable to the Company or at all.
 
International

We plan to seek a development and marketing partner or partners for the Visible Youth Consumer and Professional products in Europe and the Rest of the World. We have engaged a business development professional to help us identify and contact potential partners in the US for our Professional range and in Europe for Consumer and Professional. The process is ongoing.
 
Strategy

In summation, the Company’s overall marketing strategy is to continue to develop and market a full line of cosmeceutical products, the main active ingredients of which are HA and bioactive glass. All Visible Youth products are intended to be competitively priced in the mid- to upper-quadrant of high quality products and brands.

Our marketing efforts will continue to be focused on clearly defining our message of highly effective skin hydration to create user awareness and demand for our products and establish the Visible Youth brand as a pioneer and leader in the market. The Visible Youth “Professional” products are intended to be marketed as the premier product for use after skin resurfacing and other skincare procedures. We also plan to develop additional Professional products.

We continue to review and refine the exact channels and marketing strategy for the product re-launch in both the consumer and professional markets.
 
Raw Materials and Suppliers
 
Hyaluronan is the primary “active” ingredient in our current products. The other ingredients in our current products are standard ingredients for cosmetic products that are readily available in the cosmetic industry.

Many forms of hyaluronan are available.  We use hyaluronan of a specific molecular size and purity. Not all hyaluronan manufacturers produce hyaluronan to our specifications. Accordingly, we seek to acquire our hyaluronan from manufacturers who produce hyaluronan to our specifications.
 
 
 
 
Hyaluronan comes from a number of sources. Two of the most popular are extraction from rooster combs and bacterial fermentation. We prefer bacterial fermentation. Accordingly, we seek to acquire our hyaluronan from manufacturers that produce hyaluronan using a bacterial fermentation process.

Kyowa Hakko, our historic supplier of Hyaluronan has informed the Company that it no longer intends to supply HA of our specification. We have identified and tested six alternative sources of HA which meet our specifications, and have selected our two preferred candidates for further testing and evaluation.. We intend to qualify two alternative sources of HA for our future products. We do not anticipate a shortage of any ingredient or raw material used in our products.
 
Competition
 
The market for skincare/cosmeceuticals is highly competitive with many established manufacturers, suppliers and distributors engaged in all phases of the business.  Competitive factors in our market include:

 
product efficacy and uniqueness;
 
brand awareness and recognition, product quality, reliability of performance and convenience of use;
 
cost effectiveness;
 
breadth of product offerings;
 
sales and marketing capabilities and methods of distribution;
 
resources devoted to product education and technical support; and
 
speed of introducing new competitive products and existing product upgrades.

We face and will continue to face intense competition.  A number of our competitors have far greater research and development and marketing capabilities and far greater financial resources than we do. These competitors may have developed, or could in the future develop, new technologies that compete with our products or render our products obsolete. We are also likely to encounter increased competition as we enter new markets and as we attempt to further penetrate existing markets. Some of our competitors have, in the past, and may, in the future, compete by lowering prices on their products. We may respond by lowering our prices, exiting the market or competing by investing in the development of new, improved products.

Approximately 400 companies compete in the U.S. cosmeceutical industry, divided fairly evenly among chemical and end-use product segments.  The seven largest producers of cosmeceutical products are Johnson & Johnson, Procter & Gamble, L’Oreal, Allergan, Avon, Estee Lauder and Medicis.  These companies control more than 60% of the U.S. cosmeceutical market. Our products also compete with similar products sold in prestige locations, such as department stores, high-end specialty retailers, door-to-door, by television and infomercials or mail-order or telemarketing by representatives of direct sales companies.

We expect to compete on the basis of brand awareness, product functionality, design, quality, pricing, marketing, order fulfilment and delivery.

ITEM 1A.  RISK FACTORS.
 
As a smaller reporting company, the Company is not required to provide information under this Item 1A.
 
ITEM 1B.  UNRESOLVED STAFF COMMENTS.
 
Not applicable.
 
ITEM 2.  PROPERTIES.
 
We do not own any real property.  Our principal executive offices are located at50 West Liberty Street, Suite 880, Reno NV 89501.
 
ITEM 3.  LEGAL PROCEEDINGS.

The Company received a Section 45 Notice from the Canadian Intellectual Property Office dated December 18, 2012 requesting that the Company, in accordance with Section 45 of the Trade-marks Act, furnish evidence within three months from the date of the notice demonstrating use of the trademark Visible Youth in Canada at any time during the three year period immediately preceding the date of the notice. The Company provided such evidence in the form of an affidavit on March 14, 2013. On August 26, 2013 the Company received a copy of Glycobiocsiences response, dated August 12, 2013, to its evidence.  The Company filed its response to that submission on December 23, 2013.  On January 9, 2014 Glycobioscienses requested an oral hearing, which was held on June 25, 2014. The Company expects to hear the results of the hearing in six to eight weeks.  In the course of preparing this affidavit, the Company discovered that Glycobiosciences Inc has been offering for sale and selling "VISIBLE YOUTH VY anti-aging revitalizing formula containing hyaluronate sodium to the public.
 
 
 
 
The Company also discovered that on December 20, 2012, Glycobiosciences Inc. filed a Canadian trademark application to register VISIBLE YOUTH for cosmetics. On March 13, 2013, the Company filed a Notice of Infringement of Trademark on Glycobiosciences. The Company intends to vigorously defend its Visible Youth trademark.

On June 19, 2012, the Company entered into a written Agreement and Plan of Merger (the “Merger Agreement”) with Age Reversal, Inc., a Maryland corporation (“ARI”) as disclosed in Note 12 to the financial statements for the year ended April 30, 2012. On January 14, 2013, the Company received notice from ARI that ARI was withdrawing from the proposed merger with the Company to pursue other options. ARI thereby terminated the Agreement and Plan of Merger entered into on June 19, 2012 and the Amendment to Agreement and Plan of Merger entered into on August 31, 2012 between the Company and ARI. The Company and ARI have had discussions over ARI’s obligations on termination of the Merger Agreement to reimburse the company for certain expenses of the Merger. Pursuant to Section 7.1(b) of the Merger Agreement, the Company has demanded payment of the ESP Expense Reimbursement (as defined in the Merger Agreement) of $40,000 it claims is due under the Merger Agreement. ARI claims that it has reimbursed, advanced or otherwise paid to date amounts that satisfy this obligation. The Company continues to maintain that ARI owes the ESP Expense Reimbursement of $40,000 under the Merger Agreement. The Company has not as yet started legal proceeding against ARI due to its financial position, but reserves the right to commence proceedings once it has obtained adequate funding.
 
We are not aware of any other material legal proceedings, other than ordinary routine litigation incidental to the business, to which our Company or any of our subsidiaries are a party or of which any of their property is the subject. We are not aware of any material proceedings to which any director, officer or affiliate of the our Company, any owner of record or beneficially of more than five percent of any class of voting securities of our Company, or any associate of any such director, officer, affiliate of our Company, or security holder is a party adverse to our Company or any of its subsidiaries or has a material interest adverse to our Company any of its subsidiaries.

ITEM 4.  MINE SAFETY DISCLOSURES

Not applicable.
 
PART II
 
ITEM 5.  MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES.
 
The Company’s common stock prices are, currently, quoted on the OTCQB with the symbol "EHSK".  The Company’s common stock commenced quotation of those prices on the OTCBB on August 14, 2008. On July 23, 2012, the price of ESP’s common stock ceased to be quoted on the OTCBB, as a result of a lack of quoting activity regarding that stock.  As result, the prices of the Company’s common stock are now quoted on the OTCQB.  The OTCQB is the market place for companies that are current in their reporting to the SEC or a United States regulatory agency.  There are no financial or qualitative standards to participate in the OTCQB.  The OTCQB allows investors to identify easily reporting companies traded in the OTC market regardless of where they are quoted.  The Company’s common stock is thinly traded, and transactions in that stock are infrequent and sporadic.  No established trading market exists for the Company’s common stock.

The following table specifies the high and low bid quotations for the Company’s common stock for the periods indicated.  These quotations, as reported by the OTCBB, indicate prices among securities dealers, do not include retail mark-ups, markdowns, or commissions, and may not necessarily represent actual transactions.
                                                                                               
Period
 
High
   
Low
 
             
Quarter ended April 30, 2014
 
$
.050
   
$
.010
 
Quarter ended January 31, 2014
 
$
.020
   
$
.010
 
Quarter ended October 31, 2013
 
$
.010
   
$
.010
 
Quarter ended July 31, 2013 
 
$
.010
   
$
.010
 
Quarter ended April 30, 2013
 
$
.009
   
$
.002
 
Quarter ended January 31, 2013
 
$
.050
   
$
.010
 
Quarter ended October 31, 2012
 
$
.011
   
$
.011
 
Quarter ended July 31, 2012
 
$
.050
   
$
.010
 
 
Shares of our common stock are issued in registered form.  Globex Transfer, LLC. 789 Deltona Blvd., Deltona, FL, 32725 (Telephone: (386) 206-1133; Facsimile: (386) 278-3124) is the registrar and transfer agent for our common shares. On April 30, 2014 we had 100,267,882 shares outstanding.
 
 
 
 
As of April 30, 2014, the approximate number of holders of our common stock is 31.
 
DIVIDENDS
 
We have not declared any dividends since incorporation and do not anticipate that we will do so in the foreseeable future. Although there are no restrictions that limit the ability to pay dividends on our common shares, our intention is to retain future earnings for use in our operations and the expansion of our business.
 
EQUITY COMPENSATION PLAN INFORMATION
 
We have not adopted any equity compensation plans.
 
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
 
None.

RECENT SALES OF UNREGISTERED SECURITIES

On April 12, 2013, the Company entered into a Settlement Agreement and Release with Crisnic Fund S.A. (“Crisnic”).  Pursuant to this agreement, the Company issued 375,000 common shares to Crisnic in consideration for Crisnic releasing the Company from all claims, debts and obligations including without limitation expenses of $5,600 owing to Crisnic under an Indirect Primary Offering Agreement with the Company. The sale of these securities was made in reliance on the exemption from registration provided by Section 4(2) of the Securities Act of 1933.

On March 20, 2013, the Company entered into a services agreement with Curtis Development, LLC (“Curtis”).  Pursuant to that agreement, Curtis provided certain services such as a brand audit and development of a brand strategy.  As consideration for services, the Company paid Curtis $12,000 and issued 2,000,000 common shares.  The sale of these securities was made in reliance on the exemption from registration provided by Section 4(2) of the Securities Act of 1933.
 
Pursuant to a settlement agreement with Heenan Blakie effective April 30, 2013, which was attached as as Exhibit 99.1 to the Company’s annual report on Form 10-K for the period ending April 30, 2013, the Company issued 1,441,242 common shares of the Company pursuant to Regulation S of the Securities Act.

Pursuant to a settlement agreement with Stepp Law Corporation effective April 30, 2013, which was attached as Exhibit 99.2 to the Company’s annual report on Form 10-K for the period ending April 30, 2013, the Company issued 2,312,533 common shares of the Company pursuant to Regulation D of the Securities Act.
 
On March 4, 2013 the Company, Dr. Asculai and Mercuriali Ltd. entered into a Loan Agreement.  The Loan Agreement provides that upon the Company restructuring at least seventy five percent (75%) of its outstanding debt substantially in accordance with the Restructuring Plan, Dr. Asculai shall convert fifty percent (50%) of the amounts owed to him into common shares of the Company at a conversion price of $0.00376 per share.  During the year ended April 30, 2013 the Company substantially completed the Restructuring Plan.  Resultantly, $86,803 representing 50% of Dr. Asculai’s balance outstanding as at October 31, 2012 were converted into 23,085,772 common shares of the Company during the quarter ended July 31, 2013. The sale of these securities was made in reliance on the exemption from registration provided by Section 4(2) of the Securities Act of 1933.

On May 24, 2013, the Company entered into a services agreement with Beauty Scouts, LLC (“Beauty Scouts”) pursuant to which Beauty Scouts provided services including data sheet preparation and drafting of business/financial plans.  As consideration for these services, the Company has paid Beauty Scouts $13,000 and issued 1,500,000 common shares. The sale of these securities was made in reliance on the exemption from registration provided by Section 4(2) of the Securities Act of 1933.

On June 21, 2013, the Company entered into a Stock Purchase Agreement with Grim AS.  Grim AS is controlled by the spouse of Frode Botnevik a director of the Company.  Pursuant to this agreement, the Company sold 3,324,468 shares of the Company’s Common Stock to Grim AS for an aggregate purchase price of U.S.$12,500.  The sale of these securities was made in reliance on the exemption from registration provided by Section 4 (2) of the Securities Act of 1933.
 
 
 
 
Effective January 6, 2014, the Company entered into a consulting agreement with Nolex LLC for the provision of business development services. As consideration for these services the Company is obligated to pay Nolex LLC a fixed fee of $40,000 payable within 30 days of the Company raising aggregate funding of $250,000 and an additional fee of up to $8,000 for additional work done with the prior agreement of the Company payable upon the Company raising aggregate funding of $500,000. Nolex LLC shall have the option of requiring the Company to satisfy $20,000 of these amounts by issuing 2,500,000 shares within 30 days of providing the Phase I Report provided for in the agreement.  The Company has the option to satisfy $20,000 of these amounts by issuing 2,500,000 shares of its common stock provided Nolex has not previously exercised the option to have shares issued to it.

On January 21, 2014, the Company entered into an agreement with Beauty Scouts, LLC for the provision of certain marketing advice and services.  As consideration for these services, the Company agreed to pay a fixed element of $12,000 and an additional variable element of up to $6,000 by agreement.  The fixed element is payable in cash within 30 days of the Company raising aggregate funding of $250,000. In addition, the Company has the option, on certain conditions, to satisfy $6,000 of the fixed element by issuing 750,000 of its common shares. During the quarter ended April 30, 2014, the Company exercised its option and instructed its transfer agent to issue 750,000 shares to Beauty Scouts.  These shares were issued subsequent to April 30, 2014.
 
Effective January 30, 2014, the Company and Mr. Hovey entered into the Hovey Termination Amendment Agreement pursuant to which Mr. Hovey converted $20,000 of unpaid fees due to him into 5,319,149 shares of the Company’s common stock, the $11,724 of unreimbursed expenses due under the Hovey Termination Agreement into 3,118,271 shares of the Company’s common stock, and an additional $1,530 in unreimbursed expenses into 191,250 shares.  .  The sale of these securities was made in reliance on the exemption from registration provided by Section 4 (2) of the Securities Act of 1933.

Effective January 30, 2014, the Company and Mr. Lukian entered into the Lukian Termination Amendment Agreement pursuant to which Mr. Lukian converted $15,532 of unpaid fees due to him into 4,083,072 shares of the Company’s common stock and $2,137 in unreimbursed expenses into 267,125 shares of the Company’s common stock.   The sale of these securities was made in reliance on the exemption from registration provided by Section 4 (2) of the Securities Act of 1933.

ITEM 6.  SELECTED FINANCIAL DATA.
 
Not applicable

ITEM 7.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
 
Balance sheet – April 30, 2014
 
Cash
 
At April 30, 2014 the Company had $1,136 of cash on hand, a decrease of $29,730 from the April 30, 2013 balance of $30,866, mainly because of payments made to the creditors of the Company.
 
Accounts receivable
 
There was no accounts receivable balance as at April 30, 2014.  At April 30, 2013, the Company had an account receivable balance of $2,577 representing a sale made to a customer at the end of the year 2013.  The balance was received during the year ended April 30, 2014.  

Prepayments
 
There were no prepayments as at April 30, 2014.  Prepayments of $1,100 as at April 30, 2013, represented prepaid office rent for the month of May 2013 which was expensed during the year ended April 30, 2014.
 
Accounts payable and accrued liabilities
 
At April 30, 2014 accounts payable and accrued liabilities was $230,103, an increase of $115,173 from the April 30, 2013 balance of $114,930. The increase represented accruals pursuant to various consulting agreements for the provision of services principally in respect of patents and trademarks, marketing advice, laboratory testing and business development.
 
 
 
 
Accounts payable to related parties (including accounts payable to related parties convertible into shares)
 
At April 30, 2014 accounts payable to related parties including convertible into shares was $73,707, a decrease of $52,468 from the April 30, 2013 balance of $126,175, mainly due to conversion of accounts payable to Mr. Brian Lukian and Mr. Chris Hovey into shares pursuant to the Lukian Termination Amendment Agreement and the Hovey Termination Amendment Agreement each entered into effective January 30, 2014.
 
Advances from related parties (including advances from related parties convertible into shares)

At April 30, 2014 advances from related parties including convertible into shares was $216,198, an increase of $72,717 from the April 30, 2013 balance of $143,481.  The increase represents additional advances from related parties during the year ended April 30, 2014.

Common Stock

At April 30, 2014, there were 100,267,882 shares of common stock issued and outstanding as compared to common stock 55,250,000 as at April 30, 2013.  The increase represents issuance of 45,017,882 common stock during the year ended April 30, 2014 as described in Part II - ITEM 5.   Unregistered Sales of Equity Securities and Use of Proceeds.

Additional paid-in Capital
 
At April 30, 2014 the balance of additional paid in capital was $1,713,350 representing an increase of $76,232 during the year ended April 30, 2014 as compared to the balance of $1,637,118 as at April 30, 2013.  The increase is the result of the issuance (including shares to be issued) of common stock above the par value of 0.001 per share as explained in Note 6 to the financial statements.

Accumulated other comprehensive income
 
The Company has a 100% owned subsidiary in Canada.  In the consolidation of the Canadian subsidiary a translation adjustment was resulted which is not reflected in the statement of operations.  This translation adjustment is maintained in the consolidated statement of stockholders’ equity.  The balance at April 30, 2014 was $(1,257), a decrease of $2,312 from the April 30, 2013 balance of $(3,569).

Statement of Operations – April 30, 2014

Sales
 
Sales for the year ended April 30, 2014 were $1,081 compared to the previous year of $3,089. The Company is presently attempting to raise equity financing in order to reposition its brand and to implement its consumer marketing campaign.
 
Operating Expenses
 
Our operating expenses are classified primarily into the following categories.
 
General & administrative. 

There is no significant change in the level of general and administrative expenses for the current year compared to the previous year.  General & administrative expenses incurred for year ended April 30, 2014 were $41,034 compared to the $37,552 incurred in the year ended April 30, 2013.

Professional fees.

Professional fees for the year ended April 30, 2014 were $225,972 compared to $209,943 incurred for the year ended April 30, 2013, respectively.  Increase in professional charges of $16,029 in the current year as compared to the previous year is mainly due to increased charges relating to  marketing advice, laboratory testing and business development costs offset by a reduction in legal and patent costs.
 
 
 
 
Liquidity and Capital Resources
 
At April 30, 2014, the Company had a working capital deficit of $518,872 compared to a working capital deficit of $350,043 at the year ended April 30, 2013. The increase in working capital deficit is due entirely to the continued losses of the Company.
 
At April 30, 2014 the total assets were $1,136 as compared to the total assets $34,543 at April 30, 2013. The decrease is mainly due to the decrease in cash balance.

Financing
 
During the year ended April 30, 2013, the Company entered into debt settlement agreements with certain creditors of the Company and termination agreements with certain officers/employees of the Company pursuant to the Restructuring Plan.  Further, Mercuriali Ltd., a related party, advanced to the Company a further $69,709 pursuant to a loan agreement dated March 4, 2013.

During the year ended April 30, 2014, the Company entered into a Stock Purchase Agreement with Grim AS.  Grim AS is controlled by the spouse of Frode Botnevik a director of the Company.  Pursuant to this agreement, the Company sold 3,324,468 shares of the Company’s Common Stock to Grim AS for an aggregate purchase price of U.S.$12,500.  The sale of these securities was made in reliance on the exemption from registration provided by Section 4 (2) of the Securities Act of 1933.  In addition during the current year, the Company relied on advances from the CEO and related parties.
 
ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
Market risk is the risk of loss arising from adverse changes in market rates and prices, such as interest rates, foreign currency exchange rates and commodity prices. Our primary exposure to market risk is interest rate risk associated with our short term money market investments. The Company does not have any financial instruments held for trading or other speculative purposes and does not invest in derivative financial instruments, interest rate swaps or other investments that alter interest rate exposure. The Company does not have any credit facilities with variable interest rates.









 
 
 
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
 
 
SEALE AND BEERS, CPAs
PCAOB REGISTERED AUDITORS
www.sealebeers.com


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors and Stockholders of
Enhance Skin Products, Inc.


We have audited the accompanying balance sheets of Enhance Skin Products, Inc. as of April 30, 2014 and 2013, and the related statements of income, stockholders’ equity (deficit), and cash flows for each of the years then ended. Enhance Skin Products, Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.
 
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
 
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Enhance Skin Products, Inc. as of April 30, 2014 and 2013, and the related statements of income, stockholders’ equity (deficit), and cash flows for each of the years then ended in conformity with accounting principles generally accepted in the United States of America.
 
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 4 to the financial statements, the Company has minimal revenues, has negative working capital at April 30, 2014, has incurred recurring losses and recurring negative cash flow from operating activities, and has an accumulated deficit which raises substantial doubt about its ability to continue as a going concern.  Management’s plans concerning these matters are also described in Note 4.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Seale and Beers, CPAs

Seale and Beers, CPAs
Las Vegas, Nevada
July 7, 2014
 
 
 
 

50 S. Jones Blvd,  Suite 201 - Las Vegas, NV 89107 Phone: (888)727-8251 Fax: (888)782-2351
 
 
 
ENHANCE SKIN PRODUCTS INC.
CONSOLIDATED BALANCE SHEETS
AS AT APRIL 30, 2014 AND 2013
(Expressed in United States Dollars)
 
             
   
2014
   
2013
 
    $     $  
ASSETS
               
Cash
    1,136       30,866  
Accounts receivable
          2,577  
Prepayments
          1,100  
Total current assets
    1,136       34,543  
Total assets
    1,136       34,543  
                 
LIABILITIES AND STOCKHOLDERS' DEFICIT
               
Liabilities
               
Accounts payable and accrued liabilities
    230,103       114,930  
Accounts payable to a related party (Note 5)
    457       5,849  
Accounts payable to related parties convertible into shares (Note 5)
    73,250       120,326  
Advances from a related party (Note 5)
    96,489       93,481  
Advances from a related party convertible into shares (Note 5)
    119,709       50,000  
Total current liabilities
    520,008       384,586  
Total liabilities
    520,008       384,586  
                 
Stockholders' deficit
               
Authorized:
               
300,000,000 common shares par value $0.001 as of April 30, 2014 (April 30, 2013: 300,000,000 common shares) - (Note 6)
 
Issued and outstanding 100,267,881 common shares as of April 30, 2014 (April 30, 2013: 55,250,000 common shares) - (Note 6)
    100,267       55,250  
Shares to be issued  (Note 6)
    750       27,215  
Additional paid-in capital
    1,713,350       1,637,118  
Accumulated other comprehensive loss
    (1,257 )     (3,569 )
Accumulated deficit
    (2,331,982 )     (2,066,057 )
Total stockholders' deficit
    (518,872 )     (350,043 )
Total liabilities and stockholders' deficit
    1,136       34,543  
 
 
 
 
See accompanying notes
 

 
ENHANCE SKIN PRODUCTS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
FOR THE YEARS ENDED APRIL 30, 2014 AND 2013
(Expressed in United States Dollars)
 
             
   
2014
   
2013
 
    $     $  
                 
SALES
    1,081       3,089  
                 
EXPENSES
               
General and administrative
    41,034       37,552  
Legal and professional fees
    225,972       209,943  
Marketing
          342  
Total operating expenses
    267,006       247,837  
                 
Net loss for the year  before other items
    (265,925 )     (244,748 )
                 
OTHER ITEMS - INCOME (EXPENSE)
               
Forgiveness of debts (Note 7)
          1,634,222  
Net (loss) income for the year  before income taxes
    (265,925 )     1,389,474  
                 
Income taxes
           
Net (loss) income for the year
    (265,925 )     1,389,474  
                 
Foreign currency translation adjustment
    2,312       (266 )
Comprehensive (loss) income
    (263,613 )     1,389,208  
                 
Loss (earnings) per share, basic and diluted
    (0.0031 )     0.0256  
                 
Weighted average number of
               
  common shares outstanding
    85,211,460       54,250,000  


 
 
See accompanying notes
 
 
 
ENHANCE SKIN PRODUCTS INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
FOR THE YEARS ENDED APRIL 30, 2014 and 2013
(Expressed in United States Dollars)
 
                                           
                                           
   
 
         
 
   
 
   
Accumulated
             
   
 
   
 
   
Shares
   
Additional
   
other
   
 
   
 
 
    Common stock    
to be issued
   
paid-in
   
compreshensive
   
Accumulated
       
    Shares     Amount     Amount     capital    
loss
    deficit     Total  
          $       $       $       $       $       $    
As at April 30, 2012
    53,250,000       53,250             1,498,055       (3,303 )     (3,455,531 )     (1,907,529 )
                                                         
Contributed capital
                      51,992                   51,992  
                                                         
Issuance of shares
    2,000,000       2,000             14,000                   16,000  
                                                         
Shares to be issued
                27,215       73,071                   100,286  
                                                         
Foreign currency translation
                            (266 )           (266 )
                                                         
Net income for the year
                                  1,389,474       1,389,474  
                                                         
As at April 30, 2013
    55,250,000       55,250       27,215       1,637,118       (3,569 )     (2,066,057 )     (350,043 )
                                                         
Issuance of shares
    45,017,881       45,017       (27,215 )     70,982                   88,784  
                                                         
Shares to be issued
                750       5,250                   6,000  
                                                         
Foreign currency translation
                            2,312             2,312  
                                                         
Net loss for the year
                                  (265,925 )     (265,925 )
                                                         
As at April 30, 2014
    100,267,881       100,267       750       1,713,350       (1,257 )     (2,331,982 )     (518,872 )

 

 
See accompanying notes

 
 
ENHANCE SKIN PRODUCTS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED APRIL 30, 2014 and 2013
(Expressed in United States Dollars)
             
   
2014
   
2013
 
    $     $  
                 
OPERATING ACTIVITIES
               
Net (loss) income for the year
    (265,925 )     1,389,474  
                 
Forgiveness of debts
          (1,634,222 )
Contributed services
          51,992  
Stock issued for services
    32,096       16,000  
               
Net change in non-cash working capital balances:
               
Accounts receivable
    2,577       (2,577 )
Prepayments
    1,100       (1,100 )
Accounts payable and accrued liabilities
    115,173       149,947  
Accounts payable to a related party
    3,070       3,364  
Cash used in operating activities
    (111,909 )     (27,122 )
                 
FINANCING ACTIVITIES
               
Proceeds from issuance of shares
    12,500        
Advances from a related party
    67,367       57,179  
Cash provided by financing activities
    79,867       57,179  
                 
Net (decrease) increase in cash during the period
    (32,042 )     30,057  
Effect of foreign currency translation
    2,312       (266 )
Cash, beginning of the period
    30,866       1,075  
Cash, end of year
    1,136       30,866  
                 
Supplemental disclosure with respect to cash flows:
               
Cash paid for income taxes
           
Cash paid for interest
           
                 
During the year ended April 30, 2014 debts amounting to $150,475 are converted into 40,193,413
 
shares (Note 6)
               

 
 
 
See accompanying notes
 
 
 
ENHANCE SKIN PRODUCTS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2014
  
NOTE 1.   GENERAL ORGANIZATION AND BUSINESS
 
The Company was originally incorporated under the laws of the state of Nevada on November 14, 2006 as Zeezoo Software Corp. (“Zeezoo”)
 
Pursuant to an Asset Purchase Agreement by and between Zeezoo and Enhance Skin Products Inc., a privately owned Ontario corporation (“Enhance Private”), which closed on August 14, 2008, Zeezoo acquired all of the intellectual property and certain liabilities of Enhance Private (the “Assets”). In addition to shares issued for the asset purchase and the cancellation of certain securities of Zeezoo, Enhance Private acquired approximately 57.6% of the issued and outstanding shares of common stock, par value $0.001 per share (the “Common Stock”), of Zeezoo.  On August 28, 2008 Zeezoo changed its name to Enhance Skin Products Inc.

For accounting purposes, this transaction was treated as an acquisition of Zeezoo and a recapitalization of Enhance Skin Products Inc. Enhance Private was the accounting acquirer and the results of its operations carried over.  Accordingly, all prior year financial statements presented for comparative purposes are those of Enhance Private and not Zeezoo. Accordingly, the operations of Zeezoo are not carried over and adjusted to $0. Immediately prior to the Merger, Zeezoo had minimal assets and liabilities.
 
The financial statements are presented based on this recapitalization, whereby the Company had 49,250,000 common shares outstanding as of August 14, 2008.
 
The Company is now a developer of premium cosmeceutical products marketed under its “Visible Youth trademark. Cosmeceuticals are topically applied products containing ingredients that influence the biological function of skin and can be described as a marriage between cosmetics and pharmaceuticals. These products may improve the appearance and condition of the skin by delivering nutrients or protectants necessary for healthy skin.
 
These consolidated financial statements contain the consolidated accounts of the Company and its wholly owned subsidiary Enhance Skin Products (Canada) Limited. All material inter-company accounts and transactions have been eliminated on consolidation.
 
NOTE 2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
The Company maintains its accounts on the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America. The accompanying financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (SEC). 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 have been reflected herein below:
 
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash and all highly liquid financial instruments with original purchased maturities of three months or less. At April 30, 2014 the Company had a cash balance of $1,136 compared to a cash balance of $30,866 at April 30, 2013. 

FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company's financial instruments consist of cash, account receivable and prepayments. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these consolidated financial statements. 

USE OF ESTIMATES 
The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
 
 
 

 
ENHANCE SKIN PRODUCTS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2014

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 
REVENUE RECOGNITION 
The Company’s revenue is generated primarily from the sale of its line of skin care products. The Company recognizes product sales generally at the time the product is shipped. In certain instances the Company recognizes revenue on a C.O.D. basis. Concurrent with the recognition of revenue, the Company is determining a suitable provision for the estimated cost of product returns. Once this provision is determined revenue will be reduced for estimated product returns. However, as of April 30, 2014 there have been no product returns. Sales incentives are classified as a reduction of revenue and are recognized when revenue is recognized. Shipping and handling charges to the customer are included in revenue and the associated costs are included in cost of goods sold. Although the Company has written down the inventory to nil as the value of the inventory is considered to be impaired due to lack of significant sales the products are still available for sale on the Company’s web site.
 
SALES RETURN POLICY
The Company will accept returns for damaged goods only, the goods must be returned unused and in the original packaging. To date there have been no returns. The Company is presently determining an appropriate provision for returns and allowances which will be applied on future sales. Although the Company has written down the inventory to nil as the value of the inventory is considered to be impaired due to lack of significant sales the products are still available for sale on the Company’s web site.

ADVERTISING EXPENSE 
The Company’s policy regarding advertising is to expense advertising when incurred.
 
BASIC AND DILUTED LOSS PER SHARE 
The Company reports basic loss per share in accordance with the FASB ASC 260, “Earnings Per Share”. Basic loss per share is computed using the weighted average number of shares outstanding during the period.  Diluted loss per share has not been provided as it would be anti-dilutive.  Dilution is computed by applying the treasury stock method.
 
PRODUCT DEVELOPMENT COSTS 
Product development costs are expensed as incurred. Product development expenses were nil for the years ended April 30, 2014 and 2013.
 
INCOME TAXES 
Income taxes are provided in accordance with FASB ASC 740 Accounting for Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities.
 
Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
 
FOREIGN CURRENCY TRANSACTIONS 
The Company’s functional currency is the Canadian dollar (“CDN”).  The Company translates from the functional currency to U.S. dollars using the current rate method in accordance with FASB ASC 830. The Company uses the U.S. dollar as its reporting currency for consistency with registrants of the Securities and Exchange Commission and in accordance with FASB ASC 830.
 
Transactions undertaken in currencies other than the functional currency of the entity are translated using the exchange rate in effect as of the transaction date. Any exchange gains and losses would be included in other income (expenses) on the Statement of Operations.

NOTE 3.   RECENT ACCOUNTING PRONOUNCEMENTS

The Company has evaluated all the recent accounting pronouncements through the date of issuance of these financial statements and believes that none of them will have a material effect on the company’s financial statements.
 
 
 
 
ENHANCE SKIN PRODUCTS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2014

NOTE 4.   GOING CONCERN
 
The accompanying condensed consolidated 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 satisfaction of liabilities in the normal course of business. As at April 30, 2014 the Company has a working capital deficit of $518,872 and accumulated deficit of $2,331,982. The Company has relied on advances from its former CEO, director, current CEO and a related party to meet the working capital requirements.
 
The ability of the Company to continue as a going concern and become a profitable entity is dependent upon the Company’s successful efforts to obtain additional funding to reposition its product line and generate sales and then attain profitable operations. 

The management is seeking additional financing to reposition its Visible Youth product line for the consumer market, to fund product reformulation,  to undertake clinical evaluations of its reformulations and fund its direct to consumer sales campaign. Management is pursuing a number of funding structures including debt and equity finance, asset sales and licensing activities. There can be no assurances, however, that management’s expectations of obtaining additional funding on terms satisfactory to the Company, or at all will, be achieved or that future sales will be realized.

In addition, prior to the Company having completed cumulative financings of at least five hundred thousand United States dollars ($500,000) the Company’s President & CEO, CSO and General Counsel will make no charge for services.

These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments that might result from the outcome of this uncertainty.
 
NOTE 5.   RELATED PARTY TRANSACTIONS AND BALANCES
 
The details of balances due to related parties are as follows:
   
April 30,
   
April 30,
 
   
2014
   
2013
 
    $     $  
                 
       - Unreimbursed expenses
    457       5,849  
Accounts payable to a related party
    457       5,849  
                 
       - Unpaid remuneration
    40,062       75,414  
       - Balances owing to Mercuriali Ltd.
    33,188       33,188  
       - Unreimbursed expenses
          11,724  
Accounts payable to related parties convertible into shares
    73,250       120,326  
                 
Advances from a related party
    96,489       93,481  
                 
Advances from a related party convertible into shares
    119,709       50,000  
 
ACCOUNTS PAYABLE TO RELATED PARTIES:

The balance as at April 30, 2013 represents amounts due to a related party in connection with the expenses incurred by it on behalf of the Company.  The amounts due do not bear any interest and is repayable on demand.

ACCOUNTS PAYABLE TO RELATED PARTIES CONVERTIBLE INTO SHARES:

The balance as at April 30, 2013 comprise of unpaid remuneration to a related party and a balance owing to Mercuriali Ltd as detailed below:
 
 
 
 
ENHANCE SKIN PRODUCTS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2014
 
NOTE 5.   RELATED PARTY TRANSACTIONS AND BALANCES (Continued)
 
Unpaid remuneration

On May 12, 2010 Biostrategies Consulting Group Inc. the holder of 27,500,000 shares of common stock of the Company transferred 9,166,666 of these shares to Drasko Puseljic. Biostrategies Consulting Group Inc. is 100% privately owned by Dr. Samuel Asculai the CEO and a director of the Company. Mr. Puseljic had a 10-year service agreement with the company to assist in business development, contract administration and co-ordination of SEC filings with management and the Company’s SEC counsel. With his holdings, Mr. Puseljic has more than 5% of the outstanding equity of the Company and became a “related party”. Mr Puseljic billed the Company $150,000 during each of the previous fiscal years ended up to April 30, 2012. At April 30, 2013 Mr. Puseljic was owed $400,625 in unpaid fees. No such expenses have been accrued by the company since May 31, 2102 as they have been waived by Mr. Puseljic.  On March 5, 2013 Mr. Puseljic entered a termination agreement with the company (the “Puseljic Termination Agreement”) pursuant to which upon the Company substantially completing the Restructuring Plan, Mr. Puseljic forgives all of the unpaid fees except for $20,031 which amount will be converted into five million three hundred twenty seven thousand four hundred and sixty (5,327,460) common shares of the Company’s stock upon the Company entering into cumulative fundraisings of at least one hundred and fifty thousand United States dollars ($150,000). During the year ended April 30, 2013 the Company substantially completed the Restructuring Plan.  Resultantly, Mr. Puseljic forgave all of the unpaid fees except for $20,031.  Further, the unpaid fee balance of Dr. Asculai of $20,031 together with the associated share conversion, was also transferred to Mr. Puseljic’s balance.  Therefore, Mr. Puseljic’s balance of $40,062 is included in total unpaid remuneration balance as at April 30, 2014, which amount will be converted into ten million six hundred fifty four thousand nine hundred and twenty (10,654,920) common shares of the Company’s stock upon the Company entering into cumulative fundraisings of at least one hundred and fifty thousand United States dollars ($150,000).
 
Balance owing to Mercuriali Ltd.

On July 12, 2010 the Company entered into a Termination and Settlement Agreement (the "Settlement Agreement") with Mercuriali Ltd. (“Mercuriali”), a company controlled by Donald Nicholson, a then director of the Company and now a director and the Company’s President, Chief Executive Officer and Chief Financial Officer. The Settlement Agreement terminated a Letter of Intent between the Company and Mercuriali regarding a proposed merger between the Company and Mercuriali as part of a larger transaction involving the reverse merger of the Company into a company listed on AIM, a sub-market of the London Stock Exchange. Neither the merger between Mercuriali and the Company, nor the reverse merger of the Company and the AIM listed company took place.  Under the Settlement Agreement, the Company agreed to pay Mercuriali expenses incurred pursuant to the Letter of Intent of GBP 22,082 payable at a rate of 5% of gross funds raised by the Company. After receiving proceeds from financing the Company will pay 5% of the gross proceeds to Mercuriali until the obligation has been paid.  Other than the items provided for in the Termination Agreement, the Company and Mercuriali released each other from all claims relating to the Letter of Intent.  Through the previous year ended April 30, 2012 the Company has raised $60,000 of funds from the issuance of Common Stock, 5% of this or $3,000 should have been paid to satisfy this obligation; however, only $1,500 was paid during the previous fiscal years ended April 30, 2013. As of April 30, 2014 the balance owed to Mercuriali is $33,188. The balance is secured by the assets of the Company.  Upon the Company restructuring at least seventy five percent (75%) of its outstanding debt substantially in accordance with the Restructuring Plan and upon the Company raising additional financing of at least $250,000, Mercuriali shall  convert the total amounts owed to it under the Loan Agreement into common shares of the Company at a conversion price of $0.00376 per share.
 
ADVANCES FROM A RELATED PARTY

As of April 30, 2014, the Company owes $96,489 (2013 - $93,481) in respect of advances from Dr. Asculai, its former CEO and current Chief Scientific Officer and Chairman of the Board, pursuant to a loan agreement entered between the Company, Dr. Asculai and Mercuriali Ltd. dated March 4, 2013.  This balance is to be paid in quarterly installments after the Company has cumulatively raised one million United States dollars. The Advances are secured by all of the assets of the Company and do not bear interest.
 
 
 
 
 
ENHANCE SKIN PRODUCTS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2014
 
NOTE 5. RELATED PARTY TRANSACTIONS AND BALANCES (Continued)

ADVANCES FROM A RELATED PARTY CONVERTIBLE INTO SHARES

These advances are from Mercuriali Ltd. pursuant to a loan agreement entered between the Company, Dr. Asculai and Mercuriali Ltd. on March 4, 2013.   As at April 30, 2014, Mercuriali has advanced a total of $119,709 to the Company pursuant to the Loan Agreement (2013 - $50,000).  Mercuriali shall  convert the amounts owed to it under the Loan Agreement into common shares of the Company at a conversion price of $0.00376 per share upon the Company restructuring at least seventy five percent (75%) of its outstanding debt substantially in accordance with the Restructuring Plan and upon the Company raising additional financing of at least $250,000.  The Company completed the Restructuring Plan during the year ended April 30, 2013.  The Advances are secured on all of the assets of the Company and do not bear interest.
 
NOTE 6.   STOCKHOLDERS' DEFICIT
 
COMMON SHARES - AUTHORIZED
 
As at April 30, 2014, the Company has 300,000,000 common shares authorized.  The common shares have a $0.001 par value.  All common stock shares have equal voting rights, are non-assessable and have one vote per share.  Voting rights are non cumulative and, therefore, the holders of more than 50% of the common stock could, if they chose to do so, elect all of the directors of the Company.

COMMON SHARES - ISSUED AND OUTSTANDING

On June 12, 2013 the Company issued 375,000 common shares to Crisnic in consideration for Crisnic releasing the Company from all claims, debts and obligations including without limitation expenses of $5,600 owing to Crisnic under an Indirect Primary Offering Agreement with the Company pursuant to a Settlement Agreement and Release with Crisnic Fund S.A. (“Crisnic”), which was finalized during the previous year ended April 30, 2013.

On June 12, 2013 the Company issued 1,441,242 common shares pursuant to a settlement agreement with Heenan Blakie, which was finalized during the previous year ended April 30, 2013.
 
On June 12, 2013 the Company issued 2,312,533 common shares pursuant to a settlement agreement with Stepp Law Corporation, which was finalized during the previous year ended April 30, 2013.
 
On June 12, 2013 the Company issued 23,085,772 common shares to Dr Asculai pursuant to a loan agreement entered into between the Company, Dr. Asculai and Mercuriali Ltd. on March 4, 2013.

On June 12, 2013 the Company issued  1,500,000 common shares valued at $0.008 per share pursuant to a service agreement with Beauty Scouts, LLC (“Beauty Scouts”) entered on May 24, 2013.

On July 27, 2013 the Company issued 3,324,468 shares of the Company’s Common Stock to Grim AS for an aggregate purchase price of U.S.$12,500 pursuant to a Stock Purchase Agreement with Grim AS  finalized on June 21, 2013.  Grim AS is controlled by the spouse of Frode Botnevik, a director of the Company.   These shares were valued at $0.008 per share and resultantly a charge of $14,096 representing directors services were recognized during the current year and is included in general and administrative expenses for the year ended April 30, 2014.

On March 19, 2014, the Company issued 8,628,670 common shares with an aggregate par value of $8,628 to Mr. Chris Hovey pursuant to the Hovey Termination Amendment Agreement and a total of 4,350,197 common shares with an aggregate par value of $4,350 to Mr. Brian Lukian pursuant to the Lukian Termination Amendment Agreement.

As at April 30, 2014 there were 100,267,882 shares of common stock issued out of the authorized 300,000,000 common shares.  

SHARES TO BE ISSUED

As at April 30, 2014, the Company is required to issue 750,000 common shares to Beauty Scouts against a liability of $6,000 pursuant to a consulting agreement dated January 21, 2014.
 
 

 
ENHANCE SKIN PRODUCTS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2014

NOTE 7.   FORGIVENESS OF DEBTS

Forgiveness of debts of $1,634,222 comprised of $1,432,883 and $201,399 forgiven by related parties and creditors of the Company, respectively pursuant to the substantial completion of the restructuring plan during the previous year ended April 30, 2013 which was originally approved by the Board of Directors of the Company on February 13, 2013.

NOTE 8.   INCOME TAXES
 
The Company follows FASB ASC 740, “Accounting for Income Taxes.”  Deferred income taxes reflect the net effect of (a) temporary difference between carrying amounts of assets and liabilities for financial purposes and amounts used for income tax reporting purposes, and (b) net operating loss carry forwards.  No net provision for refundable Federal income tax has been made in the accompanying statement of loss because no refundable taxes were paid previously.  Similarly, no deferred tax asset attributable to the net operating loss carry forward has been recognized, , as based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
 
At April 30, 2014, the Company had unused net operating loss carryovers of approximately $2,331,982 (2013: $2,066,057).  These losses are available to offset taxable income and will expire between 2027 and 2033. The Company has not filed tax returns in the US since 2011 and has filed no Federal or Provincial returns in Canada to date. The Company is in the process of filing overdue tax returns which may have an impact on the amount of net operating loss carry overs which might be available to the Company.

ASC 740 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
 
The provision for income taxes differs from the amounts which would be provided by applying the statutory United States federal corporate income tax rate of 39% (2013 – 39%) to the net loss before provision for income taxes for the following reasons:

   
April 30
   
April 30
 
   
2014
   
2013
 
             
Income tax benefit at statutory rate
  $ 103,710     $ (541,894 )
Valuation analysis
    (103,710 )     541,894  
Income tax benefit per books
  $ -     $ -  
 
Net deferred tax assets consist of the following components as of:

 
April 30
 
April 30
 
 
2014
 
2013
 
                 
NOL carryover
  $ 909,473     $ 805,763  
Valuation allowance
    (909,473 )     (805,763 )
Net deferred tax asset
  $ -     $ -  

NOTE 9.   SUBSEQUENT EVENTS

The Company’s management has evaluated subsequent events through the filing date of these consolidated financial statements and has determined that there are no other material subsequent events to report.   


 


 

 
ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A.  CONTROLS AND PROCEDURES
 
Evaluation of Controls and Procedures

We recently evaluated the effectiveness of our disclosure controls and procedures, as required by paragraph (b) of Rule 13a-15 or Rule 15d-15 under the Securities Exchange Act of 1934, as of the end of the year covered by this report, being April 30, 2014.  This evaluation was conducted with the participation of our principal executive officer and our principal accounting officer.

We maintain disclosure controls and procedures designed to provide reasonable assurance that material information required to be disclosed by us in the reports we file or submit under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that the information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. We performed an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on their evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures are effective in giving us reasonable assurance that the information we are required to disclose in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and to ensure that such information is accumulated and communicated to our management, including our Principal Executive and Principal Financial Officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
 
We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

To address the need for more effective internal controls, management has plans to improve the existing controls and implement new controls appropriate to a business of its size and scale as our financial position and capital availability improves.  In addition the Company intends to seek to strengthen the composition of its Board of Directors.
 
Changes in Internal Control Over Financial Reporting
 
Based upon the evaluation of our controls over financial reporting, as required by paragraph (d) of Rule 13a-15 or Rule 15d-15 under the Securities Exchange Act of 1934, our principal executive officer and principal accounting officer have concluded that our disclosure controls are, and will be, effective in providing reasonable assurance that material information relating to us is accumulated and communicated to management, including our principal executive and principal financial officers(s), or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.  
 
A material weakness is a deficiency, or combination of deficiencies, in internal control over the financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. 
 
 
 
 
ITEM 9A.  CONTROLS AND PROCEDURES (continued)

A significant deficiency is a deficiency, or a combination of deficiencies, that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of our financial reporting.  Currently, we do not have sufficient in-house expertise in US GAAP reporting.  Instead, we rely very much on the expertise and knowledge of external financial advisors in US GAAP conversion.  External financial advisors have helped prepare and review our consolidated financial statements.   To remediate this situation, we are seeking to recruit experienced professionals to augment and upgrade our financial staff to address issues of timeliness and completeness in US GAAP financial reporting as soon as resources are available.  In addition, we do not believe we have sufficient documentation with our existing financial processes, risk assessment and internal controls.  We plan to work closely with external financial advisors to document the existing financial processes, risk assessment and internal controls systematically as soon as resources are available.
 
Although we have not identified any other material errors with our financial reporting or any other material weaknesses with our internal controls, no assurances can be given that there are no such material errors or weaknesses existing. 
 
ITEM 9B.  OTHER INFORMATION
 
None.
 
ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
 
All directors of our company hold office until the next annual meeting of the stockholders or until their successors have been elected and qualified.  The officers of our company are appointed by our board of directors and hold office until their death, resignation or removal from office.  Our directors and executive officers, their ages, positions held, and duration as such, are as follows:
 
The following table sets forth information regarding our current and proposed executive officers and directors:
 
Name
 
Age
 
Position with the Company
 
Served as an Officer and Director since
             
Donald Nicholson
 
55
 
President and Chief Executive Officer and Director(1)
 
Director since February 6, 2009
Officer since February 13, 2013
             
Frode Botnevik
 
66
 
Director
 
August 30, 2008
             
Samuel Asculai, Ph.D.
 
71
 
Chief Scientific Offer and Director(1)
 
August 30, 2008
             
Christopher Hovey
 
69
 
Chief Operating Officer and Vice President of Sales(2)
Director
 
August 14, 2008
             
Zenas B. Noon
 
77
 
Director(3)
 
August 30, 2008
             
Drasko Puseljic  
 
46
 
General Counsel 
 
March 5, 2013
 
(1)
On February 13, 2013, in accordance with the by-laws of the Company, Mr. Donald Nicholson was appointed as President, CEO and CFO of the Company and replaced Sam Asculai.
   
(2)
On March 5, 2013 Mr Christopher Hovey resigned from his position as Chief Operating Officer and Vice President of Sales and on January 21, 2014 resigned from his position as Director.
   
(3)
On January 22, 2014 Mr. Zenas Noon resigned from his position as Director.
 
 
 
 
ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE (continued)

The following is a brief summary of the background of each director and executive officer of the Company:

Donald Nicholson.  Mr. Nicholson has more than 27 years of experience in the healthcare industry. From February 2009 to the present, Mr. Nicholson has been a member of the Company’s Board of Directors.  From February 13, 2013 to present, Mr. Nicholson has been President and Chief Executive Officer of the Company.  Mr. Nicholson is, currently, the founding shareholder, and Chief Executive Officer of Mercuriali Ltd., a development stage United Kingdom private healthcare company.  From February 2007 until January 2010, Mr. Nicholson was the founding shareholder and Chief Financial Officer of Stravencon Ltd., an European developer and marketer of generic pharmaceutical products manufactured in China. From February 1996 to November 2006, Mr. Nicholson was Chief Financial Officer of SkyePharma Plc, a United Kingdom specialty pharmaceutical company. Mr. Nicholson was the Chief Financial Officer and Finance Director of SkyePharma Plc from February 1996 until November 2006. From January 1989 until September 1995, Mr. Nicholson was with Corange London Limited (Boehringer Mannheim) in various capacities, including Corporate Strategy and Finance Director, Financial Reporting and Strategy Director and Assistant Group Financial Controller.  From September 1986 until December 1998, Mr. Nicholson was with the Wellcome Foundation Ltd., London, where he was the assistant to the Group Financial Accountant.
 
In 1980, Mr. Nicholson received a BCom Law degree (with Honors) in Business and Law from the University of Edinburgh.  Mr. Nicholson is a member of the Institute of Chartered Accountants of Scotland and Dingwall Academy (higher mathematics, physics, chemistry, geography, and English).

Mr. Nicholson has extensive experience in product and company acquisitions and disposals, arrangements, sale/royalty agreements and financial strategy and funding structures. His industry experience includes Pharmaceuticals; Biochemicals; Orthopaedics; Diagnostics; and Drug Delivery, including Dermatology.

We believe that Mr. Nicholson’s knowledge of the history of the Company, knowledge of topical hyaluronic acid technology, experience as Chief Financial Officer of several pharmaceutical companies, as well as his education, financial and international management experience in such matters as acquisitions and financing transactions have resulted in strong skills in corporate finance, product development, and marketing that provide him with a wide ranging understanding of business organizations generally, and pharmaceutical and related products in particular, that qualify him to be the President, CEO and a member of the Company’s Board of Directors.

Samuel S. Asculai. From 2008 to present, Dr. Asculai has been a director of the Company.  From 2008 to February 13, 2013, Dr. Asculai was President and Chief Executive Officer of the Company.  In 1965, Dr. Asculai received a B.S. in biology/chemistry from Pace University.  In 1970, Dr. Asculai received a MSc Degree and a Ph.D. in microbiology from Rutger’s University.  Dr. Asculai has more than 40 years of experience in the life science industry.  Dr. Asculai is the inventor of more than 50 United States patents, including more than 30 patents related to hyaluronic acid, the primary component of the Company’s products.  Dr. Asculai has contributed to the development of products that have achieved cumulative sales of close to $2,000,000,000, including Monistat; Delfen Cream, for herpes virus infection; Ganciclovir; Solaraze; and MACI.

Prior to joining the Company, Dr. Asculai was the sole owner of Enhance Skin Products Inc., a private company, whose assets are the basis for the Company’s operations.  For 10 years, Dr. Asculai served as the Chief Executive Officer of Hyal Pharmaceutical Corporation, where he developed the technology which is the basis for the Visible Youth brand.  Also, while at Hyal Pharmaceutical Corporation, Dr. Asculai invented and developed Solaraze, a topical treatment for actinic keratosis, a pre-cancerous skin condition that is commonly referred to as “sunspots”.

Dr. Asculai has held senior positions with Verigen AG, a tissue engineering company; ens Bio-Logicals; Monsanto Corporation, a multinational agricultural bio-technology company; and the Ortho Pharmaceutical Corporation division of Johnson&Johnson, a multinational pharmaceutical company.

We believe that Dr. Asculai’s long history of leadership and comprehensive experience in the management of the Company, his role in developing and extensive knowledge of our products and product candidates and the market for those products, his scientific experience and expertise, including his Ph.D. in Microbiology, and strong knowledge of research and product development qualify him to be the a director of the Company.
 
 
 
 
ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE (continued)

Frode Botnevik. Since 2003, Mr. Botnevik has been a partner of Management & Finance AS, a Norwegian financial consulting firm that provides services in the areas of project and export financing, structured finance, risk management, financial restructuring, strategic partners and mergers and acquisitions. Mr. Botnevik has over 30 years of experience of industrial and financial experience and has been involving in the process of listing companies on the Oslo and Singapore stock exchanges and on Nasdaq. Mr. Botnevik has served on the boards of directors of companies in more than twelve countries.
 
We believe that Mr. Botnevik’s extensive public company, investment, management (as a member of numerous Board of Directors), financial and transactional experience significantly qualifies him to be a member of the Company’s Board of Directors.
 
Drasko Puseljic.   Mr. Puseljic has been the Company’s General Counsel since March 5, 2013. . He is the holder of a B.Sc., Honours in Biology from McMaster University, an LL.B. from Osgoode Hall Law School and an M.B.A from the University of Toronto. He has held legal and/or business development roles at Hyal Pharmaceutical Corporation, Visible Genetics Inc., Verigen AG and Enhance Skin Products Inc., a private company whose assets are the basis for the Company’s operations. He also has investment banking experience with Eureka Capital Markets, a boutique investment bank. Currently, in addition to his role with Enhance Skin Products, Mr. Puseljic is a senior consultant with Kidd Consultants LLC, a firm providing financial and strategic consulting services internationally to life sciences companies.

We believe that Mr. Puseljic’s extensive experience in legal, business development and investment banking in the life sciences industries, and his experience with the originator of the Company’s products and technologies, qualify him to be the Company’s General Counsel.

Audit Committee and Financial Expert

We do not have an audit committee.  Our directors perform the same functions of an audit committee, such as recommending a firm of independent certified public accountants to audit our annual financial statements; reviewing the independent auditors independence, the financial statements and their audit reports; and reviewing management’s administration of the system of internal accounting controls.  We do not, currently, have a written audit committee charter or similar document.

We have no financial expert.  We believe the cost related to retaining a financial expert at this time is prohibitive.  Further, because of the status of our operations, we believe the services of a financial expert are not warranted.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended (“Section 16(a)”), requires our directors and executive officers, and persons who beneficially own more than 10% of a registered class of our equity securities, to file reports of beneficial ownership and changes in beneficial ownership of our securities with the SEC on Forms 3 (Initial Statement of Beneficial Ownership), 4 (Statement of Changes of Beneficial Ownership of Securities) and 5 (Annual Statement of Beneficial Ownership of Securities).  Directors, executive officers and beneficial owners of more than 10% of our common stock are required by SEC regulations to furnish us with copies of all Section 16(a) forms that they file.  During the fiscal year ended April 30, 2014, to the best of our knowledge, none of our directors, executive officers, or beneficial owners of 10% or more of our issued and outstanding common stock filed any such form late.

Code of Ethics
 
As we have not had the funds to engage the resources necessary and appropriate for us to determine and adopt an appropriate Code of Ethics, we have not adopted a Code of Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions; provided, however, we intend to a Code of Ethics as soon as we have those funds.

Corporate Governance

Director Independence

Frode Botnevik, is an independent directors.

Nominating Committee

We do not have a nominating committee or nominating committee charter.  Our directors perform the functions associated with a nominating committee.  We have decided to not have a nominating committee, considering the nature of our operations.
 
 
 
 
ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE (continued)

Director Nomination Procedures

Nominees for directors are identified and suggested by the members of our Board of Directors (the “Board”) or management.  The Board has not retained any executive search firms or other third parties to identify or evaluate director candidates and does no intend to in the near future.  In selecting a nominee for director, the Board or management considers the following criteria:

 
1.  
Whether the nominee has the personal attributes for successful service on the Board, such as demonstrated character and integrity; experience at a strategy/policy setting level; managerial experience dealing with complex problems; an ability to work effectively with others; and sufficient time to devote to our affairs;
     
 
2.
Whether the nominee has been the chief executive officer or senior executive of a public company or a leader of a similar organization, including industry groups, universities or governmental organizations;
     
 
3. 
Whether the nominee, because of particular experience, technical expertise or specialized skills or contacts relevant to our current or future business, will add specific value as a Board member; and
     
 
4. 
Whether there are any other factors related to the ability and willingness of a nominee to serve, or an existing Board member to continue his or her service.
 
The Board or management has not established any specific minimum qualifications that a candidate for director must satisfy to be recommended for Board membership.  Rather, the Board or management evaluates the combination of skills and experience that a particular candidate offers, considers how that candidate satisfies the Board’s current expectations with respect to each such criterion and makes a determination regarding whether that candidate should be recommended to the stockholders for election as a director.  During our fiscal year ended April 30, 2014, we received no recommendation for directors from our stockholders. The Board intends to expand and strengthen its membership as soon as resources allow.

We will consider for inclusion in our nominations of new Board of Directors nominees proposed by stockholders who hold at least 5% of our issued and outstanding voting securities.  Board candidates referred by such stockholders will be considered on the same basis as Board candidates referred from other sources.  Any stockholder who wishes to recommend for our consideration a prospective nominee to serve on the Board may do so by providing the candidate’s name and qualifications in writing to our Secretary at the following address: 50 West Liberty Street, Suite 880, Reno NV 89501.

FAMILY RELATIONSHIPS
 
There are no family relationships between our officers and directors.
 
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
 
Our directors, executive officers and control persons have not been involved in any of the following events during the past ten years:
 
(1)       No petition under the federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of any of our officers or directors, or any partnership in which any such officer or director was a general partner at or within two years before the time of such filing, or any corporation or business association of which any such officer or director was an executive officer at or within two years before the time of such filing;
 
(2)       None of our officers or directors has been convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);
 
(3)       None of our officers or directors has been the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining any such officer or director from, or otherwise limiting, the following activities:
 
 
 
 
ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE (continued)
 
(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)       None of our officers or directors has been 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 any such officer or director to engage in any activity described in paragraph (f) (3) (i) of Item 401(f) of Regulation S-K, or to be associated with persons engaged in any such activity;
 
(5)       None of our officers or directors has been found by a court of competent jurisdiction in a civil action or by the Securities and Exchange Commission to have violated any federal or state securities law, and the judgment in such civil action or finding by the Securities and Exchange Commission has not been subsequently reversed, suspended, or vacated;
 
(6)       None of our officers or directors has been 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)       None of our officers or directors has been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, 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)       None of our officers or directors has been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3 (a) (26) of the Exchange Act (15 U.S.C. 78c (a) (26)), any registered entity (as defined in Section 1 (a) (29) of the Commodity Exchange Act (7 U.S.C. 1 (a) (29)), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.
 
CONFLICT OF INTEREST
 
None of our officers or directors is subject to a conflict of interest.
 
 
 
 
 
 
ITEM 11.  EXECUTIVE COMPENSATION.
 
The following table sets forth the compensation paid by the Registrant for services rendered for the past two completed fiscal years to the principal executive officer and to the company’s most highly compensated executive officers other than the principal executive officer (the “named executive officers”) whose cash compensation exceeded $100,000 during the last fiscal year  
 
Summary Compensation Table
 
Name and Principal Position
 
Year
   
Salary($)
   
Bonus ($)
   
All Other Compensation
   
Total
 
                               
Donald Nicholson CEO
    2013-2014       -       -       -       -  
      2012-2013       -       -       -       -  
                                         
Samuel Asculai  CSO
    2013-2014       -       -       -       -  
      2012-2013       -       -       -       -  
                                         
Christopher Hovey  COO
    2013-2014       -       -       -       -  
      2012-2013       -       -       -       -  
                                         
Drasko Puseljic GC
    2013-2014       -       -       -       -  
      2012-2013       -       -       -       -  
 
Employment Agreements

On February 13, 2013 Mr Donald Nicholson was appointed to the roles of President, CEO and CFO of the Company. On March 5, 2013 the Company entered into a consulting agreement with Mercuriali for the services of Mr. Nicholson as the Company’s President, CEO and CFO (the “Mercuriali Consulting Agreement”), as amended by an agreement entered effective March 3, 2014 (the “Mercuriali Amendment Agreement”). Prior to the Corporation having received transaction monies of at least five hundred thousand United States dollars ($500,000) Mercuriali will make no charge for services. Once the Corporation has received transaction monies of at least five hundred thousand United States dollars ($500,000) Mercuriali’s base compensation shall be increased to five thousand United States dollars (US $5,000) per month.  Once the Corporation has received transaction monies in aggregate total of one and a half million United States dollars (US $1,500,000), Mercuriali’s base compensation shall be increased to ten thousand United States dollars (US $10,000) per month The foregoing information regarding the Mercuriali Consulting Agreement and the Mercurial Amendment Agreement are not intended to be complete and are qualified in their entirety by reference to the complete text of the Mercuriali Consulting Agreement, which is attached as Exhibit 99.5 to the Company’s Quarterly Report on Form 10-Q for the quarter ended January 31, 2013 and filed on March 19, 2013 and the complete text of the Mercurial Amendment Agreement which was attached as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended January 31, 2014 and filed on March 5, 2014.
 
On August 14, 2008, we entered into an employment agreement with Samuel Asculai, our former President and Chief Executive Officer. That employment agreement had an initial term of ten (10) years and a base salary of $150,000 per annum. Pursuant to that employment agreement, Dr. Asculai received a base salary and an annual bonus equal to at least two percent (2%) of the Company’s pretax earnings, as defined, for each fiscal year. If Dr. Asculai’s employment were to be terminated without “cause”, as defined in that employment agreement, then Dr. Asculai would be entitled to receive all accrued by unpaid salary and bonus plus a payment equal to two (2) times Dr. Asculai’s highest base salary (but not less than $300,000) plus two (2) times his highest bonus. This payment would be received, at Dr. Asculai’s option, in one lump sum or in equal monthly installments over a 24 month period.
 
 
 
 
 
ITEM 11.  EXECUTIVE COMPENSATION. (continued)

On March 5, 2013 Dr. Asculai, and Biostrategies (a company wholly owned by Dr. Asculai) entered a termination agreement with the Company terminating the employment agreement with Dr. Asculai as President and CEO.  Pursuant to this termination agreement upon the Company substantially completing the Restructuring Plan, Biostrategies and Dr. Asculai forgive all of the unpaid fees under Dr. Asculai except for $20,031 which amount will be converted into five million three hundred twenty seven thousand four hundred and sixty (5,327,460) common shares of the Company’s stock upon the Company entering into cumulative fundraisings of at least one hundred and fifty thousand United States dollars ($150,000).  During the year ended April 30, 2013 the Company substantially completed the Restructuring Plan.  Resultantly, Dr. Asculai forgave all of the unpaid fees except for $20,031 which was transferred, together with the associated share conversion, to the balance of Mr. Puseljic.
 
On March 5, 2013 Biostrategies entered into a new consulting agreement with the Company for the services of Dr. Asculai as the Company’s CSO (the “Asculai Consulting Agreement”) ”), as amended by an agreement entered effective March 3, 2014 (the “Asculai Amendment Agreement”). . Prior to the Corporation receiving transaction monies of at least five hundred thousand United States dollars ($500,000) Biostrategies will make no charge for services. Once the Company has received transaction monies of at least five hundred thousand United States dollars ($500,000) Biostrategies’s base compensation shall be increased to five thousand United States dollars (US $5,000) per month.  Once the Company has received transaction monies in aggregate total of one and a half million United States dollars (US $1,500,000), Biostrategies’s base compensation shall be increased to ten thousand United States dollars (US $10,000) per month.  The foregoing information regarding the Asculai Consulting Agreement and the Asculai Amendment Agreement are not intended to be complete and are qualified in their entirety by reference to the complete text of the Asculai Consulting Agreement, which was attached as Exhibit 99.8 to the Company’s Quarterly Report on Form 10-Q for the quarter ended January 31, 2013 and filed on March 19, 2013 and the complete text of the Asculai Amendment Agreement which was attached as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended January 31, 2014 and filed on March 5, 2014..
 
On August 14, 2008, we entered into an employment agreement with Christopher Hovey, our Chief Operating Officer and Vice President of Sales. That employment agreement had an initial term of five years. Pursuant to that employment agreement, Mr. Hovey received a base salary and was eligible to participate in any bonus plan established by the Company for employees and consultants. Mr. Hovey’s base salary for the fiscal year ended April 30, 2013 was $150,000. That employment agreement further provided that Mr. Hovey would be entitled to participate in any plan with respect to medical, dental and other benefits established by the Company.  If Mr. Hovey’s employment were to terminated without “cause”, as defined in that employment agreement, then Mr. Hovey would be entitled to receive all accrued by unpaid salary and bonus plus a payment equal to base salary for a twelve month period. The agreement further provided a non-competition agreement for a period of one year following termination of the agreement. On March 5, 2013 Mr. Hovey entered a termination agreement with the Company (the “Hovey Termination Agreement”) pursuant to which upon the Company substantially completing the Restructuring Plan, Mr. Hovey forgives all of the unpaid fees except for $20,000 which amount will be converted into five million three hundred nineteen thousand one hundred and forty nine (5,319,149) common shares of the Company’s stock upon the Company entering into cumulative fundraisings of at least one hundred and fifty thousand United States dollars ($150,000).  During the year ended April 30, 2013 the Company substantially completed the Restructuring Plan.  Resultantly, Mr. Hovey forgave all of the unpaid fees owed to him except for $20,000 which is included in total unpaid remuneration balance as at April 30, 2013.

Effective January 30, 2014, the Company and Mr. Hovey entered into an amendment to the Hovey Termination Agreement (the “Hovey Termination Amendment Agreement”) pursuant to which Mr. Hovey converted the $20,000 of unpaid fees due to him into 5,319,149 shares of the Company’s common stock, the $11,724 of unreimbursed expenses due under the Hovey Termination Agreement into 3,118,271 shares of the Company’s common stock, and an additional $1,530 in unreimbursed expenses into 191,250 shares. The foregoing information regarding the Hovey Termination Amendment Agreement is not intended to be complete and is qualified in its entirety by reference to the complete text of the Hovey Termination Amendment Agreement, which was attached as Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q for the quarter ended January 31, 2014 and filed on March 5, 2014.

On December 20, 2010 we entered into an employment agreement with Brian Lukian, our then Chief Financial Officer. The agreement had an initial term of five years, which was renewable for additional two year periods after such initial term and provided for payment for services provided by Mr. Lukian from May 1, 2010.  Pursuant to the agreement, Mr. Lukian received a base salary of $150,000 and was eligible to participate in any bonus plan established by the company for employees and consultants.  The employment agreement with Mr. Brian Lukian was terminated on May 31, 2012 as a result of his resignation from the Company at which time the Company owed Mr. Lukian $307,047 in unpaid fees.  On March 5, 2013 Mr. Lukian entered a termination agreement with the company (the “Lukian Termination Agreement”) pursuant to which upon the Company substantially completing the Restructuring Plan, Mr. Lukian forgives all of the unpaid fees except for $15,352.35 which amount will be converted into four million eighty three thousand and seventy two (4,083,072) common shares of the Company’s stock upon the Company entering into cumulative fundraisings of at least one hundred and fifty thousand United States dollars ($150,000).
 
 
 
 
ITEM 11.  EXECUTIVE COMPENSATION. (continued)

Effective January 30, 2014, the Company and Mr. Lukian entered into an amendment to the Lukian Termination Agreement (the “Lukian Termination Amendment Agreement”) pursuant to which Mr. Lukian converted $15,532 of unpaid fees due to him into 4,083,072 shares of the Company’s common stock and $2,137 in unreimbursed expenses into 267,125 shares of the Company’s common stock. The foregoing information regarding the Lukian Termination Amendment Agreement is not intended to be complete and is qualified in its entirety by reference to the complete text of the Lukian Termination Amendment Agreement, which was attached as Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarter ended January 31, 2014 and filed on March 5, 2014.
 
Mr. Puseljic had a 10-year service agreement with the Company to assist in business development, contract administration and co-ordination of SEC filings with management and the Company’s SEC counsel with base fees of $150,000 per annum.  At March 5, 2013 Mr. Puseljic was owed $400,625 in unpaid fees.  On March 5, 2013 Mr. Puseljic entered a termination agreement with the company (the “Puseljic Termination Agreement”) terminating the service agreement and pursuant to which upon the Company substantially completing the Restructuring Plan, Mr. Puseljic forgives all of the unpaid fees except for $20,031.25 which amount will be converted into five million three hundred twenty seven thousand four hundred and sixty (5,327,460) common shares of the Company’s stock upon the Company entering into cumulative fundraisings of at least one hundred and fifty thousand United States dollars ($150,000).
 
On March 5, 2013 Mr. Puseljic entered into a new employment agreement with the Company (the “Puseljic Employment Agreement”), as amended by an agreement entered effective March 3, 2014 (the “Puseljic Amendment Agreement”). Pursuant to these agreements, Mr. Puseljic will provide certain legal services to the Company.  Prior to the Company having received transaction monies of at least five hundred thousand United States dollars ($500,000) Mr. Puseljic will make no charge for services. Once the Company has received transaction monies of at least five hundred thousand United States dollars ($500,000) Mr. Puseljic’s base compensation shall be increased to five thousand United States dollars (US $5,000) per month.  Once the Company has received transaction monies in aggregate total of one and a half million United States dollars (US $1,500,000), Mr. Puseljic’s base compensation shall be increased to ten thousand United States dollars (US $10,000) per month.  The foregoing information regarding the Puseljic Employment Agreement and the Puseljic Amendment Agreement are not intended to be complete and are qualified in their entirety by reference to the complete text of the Puseljic Employment Agreement, which was attached as Exhibit 99.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended January 31, 2013 and filed on March 19, 2013 and the complete text of the Puseljic Amendment Agreement which was attached as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended January 31, 2014 and filed on March 5, 2014.
 
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
 
As at April 30, 2014, we had not adopted any equity award/compensation plan and no stock, options, or other equity securities were awarded to our executive officers.
 
DIRECTOR COMPENSATION
 
We have not reimbursed our directors for expenses incurred in connection with attending board meetings nor have we paid any directors fees or other cash compensation for services rendered as a director in the period ended April 30, 2014.
 
We have no formal plan for compensating our directors for their services in their capacity as directors. In the future we may grant options to our directors to purchase Common Shares as determined by our board of directors or a compensation committee that may be established. Directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of our board of directors. The board of directors may award special remuneration to any director undertaking any special services on behalf of our company other than services ordinarily required of a director. Other than as indicated herein, no director received and/or accrued any compensation for his or her services as a director, including committee participation and/or special assignments.
 
 
 
 
ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANGEMENT AND RELATED STOCKHOLDER MATTERS.
 
The following table sets forth, as of July 7, 2014, certain information regarding the Company’s outstanding shares of Common Stock beneficially owned by (1) each person (including any group) of more than five percent of our Common Stock, based solely on Schedule 13D and 13G filings with the Securities and Exchange Commission, and (2) the Company’s directors and officers.
 
Name of Beneficial Owner
 
Common Stock
Beneficially Owned(1)
   
Percent of Class
 
                 
Biostrategies Consulting Group Inc(2)
    8,015,834       7.9 %
Samuel Asculai, Ph.D.(3)
    32,419,105       32.1 %
Frode Botnevik(4)
    3,324,468       3.3  
Mercuriali Ltd.(5)
    9,000,000       8.9  
Donald Nicholson(6)
    9,000,000       8.9 %
Chris Hovey
    8,628,670       8.5  
Dr. Zenas B. Noon
    0       *  
Brian Lukian
    4,350,197       4.3  
Drasko Puseljic
    9,166,666       9.1  
Directors and executive officers as a group (7 persons)
    66,889,106       66.2 %

(1)
Unless otherwise indicated, ownership represents sole voting and investment power.  Unless otherwise indicated the address for all listed stockholders is 50 West Liberty Street, Suite 880. Reno, NV 89501.
(2)
Dr. Asculai, who is a director of the Company, is the sole owner of the Biostrategies Consulting Group Inc.
(3)
Common Stock Beneficially Owned by Samuel Asculai includes the 8,015,834 shares of Common Stock owned by Biostrategies Consulting Group Inc.and 24,403,271 owned by Sam Asculai.
(4)
Common Stock Beneficially Owned by Frode Botnevik includes 3,324,468 shares of Common Stock owned by Grim AS a company controlled by his spouse.
(5)
Donald Nicholson, who is a director of the Company, is the sole owner of Mercuriali Ltd.
(6)
Common Stock Beneficially Owned by Donald Nicholson includes the  9,000,000 shares of Common Stock of the Company owned by Mercuriali Ltd.
 
Changes in Control
 
We are unaware of any contract or other arrangement the operation of which may at a subsequent date result in a change of control of our company.
 
ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
 
As of April 30, 2014, the Company owes $96,489 (2013 - $93,481) in respect of advances from Dr. Asculai, its former CEO and current CSO and Chairman of the Board, pursuant to a loan agreement entered between the Company, Dr. Asculai and Mercuriali Ltd. dated March 4, 2013.  This balance is to be paid in quarterly installments after the Company has cumulatively raised one million United States dollars.

As at April 30, 2014, Mercuriali has advanced a total of $119,709 to the Company pursuant to a loan agreement entered between the Company, Dr. Asculai and Mercuriali Ltd on March 4, 2013. (2013 - $50,000).  Mercuriali Ltd. is a company solely owned by Donald Nicholson the Company’s CEO and CFO.  In addition, as of April 30, 2014 and April 30, 2013 the Company owes Mercuriali $33,188 included in Accounts Payable. Mercuriali Ltd. shall  convert the amounts owed to it under the Loan Agreement and Accounts Payable into common shares of the Company at a conversion price of $0.00376 per share upon the Company restructuring at least seventy five percent (75%) of its outstanding debt substantially in accordance with the Restructuring Plan and upon the Company raising additional financing of at least $250,000,.  The Company completed the Restructuring Plan during the year ended April 30, 2013.

The advances and payables due to Dr. Asculai and Mercuriali Ltd are secured by the assets of the Company, and do not bear interest.
 
 
 
 
ITEM 14.  PRINCIPAL ACCOUNTING FEES AND SERVICES.
 
AUDIT FEES
 
The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal account for the audit of our financial statements on Form 10K and review of financial statements included in our quarterly Reports on Form 10-Q and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows:
 
   
Financial Year Ended
 
   
2014
   
2013
 
                 
Audit fees
  $ 14,500     $ 16,000  
Audit Related
    -       -  
Tax Fees
    -       -  
All Other Fees
    -       -  
Total
  $ 14,500     $ 16,000  
 
In each of the last two fiscal years ended April 30, 2014 and 2013, there were no fees billed for assurance and related services by the principal accountant that are reasonably related to the performance of the audit or review of our financial statements and are not reported under Item 9(e)(1) of Schedule 14A, for professional services rendered by the principal account for tax compliance, tax advice, and tax planning, for products and services provided by the principal accountant, other than the services reported in Item 9(e)(1) through 9(d)(3) of Schedule 14A.

POLICY ON PRE-APPROVAL BY AUDIT COMMITTEE OF SERVICES PERFORMED BY INDEPENDENT AUDITORS
 
We do not use Seale and Beers, CPAs for financial information system design and implementation.  These services, which include designing or implementing a system that aggregates source data underlying the financial statements or generates information that is significant to our financial statements, are provided internally or by other service providers.  We do not engage Seale and Beers, CPAs to provide compliance outsourcing services.
 
Effective May 6, 2003, the SEC adopted rules that require that before Seale and Beers, CPAs is engaged by us to render any auditing or permitted non-audit related service, and the engagement be:
 
*
approved by our audit committee (which, in effect, is our entire board of directors); or
*
entered into pursuant to pre-approval policies and procedures established by our board of directors, provided the policies and procedures are detailed as to the particular service, our board of directors is  informed of each  service, and such and policies and procedures do not include delegation of our board of directors' responsibilities to management.

Our board of directors pre-approves all services provided by our independent auditors.  All of the Step services and fees were reviewed and approved by our board of directors either before or after the respective services were rendered.
 
Our board of directors has considered the nature and amount of fees billed by Seale and Beers, CPAs and believes that the provision of services for activities unrelated to the audit is compatible with maintaining Seale and Beers, CPA’s independence.

ITEM 15.  EXHIBITS
 
(a)  Pursuant to Rule 601 of Regulation S-K, the following exhibits are included herein or incorporated by reference.
 
 
 
 
 
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, on this 9th day of July, 2014.
 
 
ENHANCE SKIN PRODUCTS INC.
     
     
Date: July 11, 2014
By:
/s/ Donald Nicholson
   
Name:  Donald Nicholson
   
Title:    CEO, Chief Financial Officer, Principal Executive Officer and Director
     
     
   
/s/ Samuel Asculai
   
Name:  Samuel Asculai
   
Title:    CSO and Director
     
     
   
/s/ Frode Botnevik
   
Name:  Frode Botnevik
   
Title:    Director








 





34