PINX:ETAH Eternity Healthcare Inc Annual Report 10-K Filing - 4/30/2012

Effective Date 4/30/2012

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K
(Mark One)

x
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
   
For the fiscal year ended   
April 30, 2012
   
o
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
   
For the transition period from   
o to o
   
Commission file number   
000-53376
 
ETERNITY HEALTHCARE INC.
(Exact name of registrant as specified in its charter)
 
Nevada
 
75-3268426
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)
 
8755 Ash Street, Suite 1, Vancouver BC  Canada
 
V6P 6T3
(Address of principal executive offices)
 
(Zip Code)
Registrant's telephone number, including area code:
 
(855) 324-1110

Securities registered pursuant to Section 12(b) of the Act:
 
Title of Each Class
 
Name of Each Exchange On Which Registered
N/A
 
N/A

Securities registered pursuant to Section 12(g) of the Act:
 
Common Stock, Par Value of $0.001 Per Share
(Title of class)
 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 the Securities Act. 
 
Yes  o No x
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the 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 last 90 days. 
 
Yes o  No x
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-K (§229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
 
Yes x  No o
 
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter)  is not contained herein, and will not 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 or any amendment to this Form 10-K.
 
  o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer  
  o
Accelerated filer
  o
Non-accelerated filer
  o
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
 
The aggregate market value of Common Stock held by non-affiliates of the Registrant on October 31, 2011 was $Nil based on a $Nil average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock as of the latest practicable date.
 
63,575,000 common shares as of July 16, 2012.
 
 
DOCUMENTS INCORPORATED BY REFERENCE

None.
 
 
 

 
 
TABLE OF CONTENTS
 
Item 1.
1
Item 1A.
9
Item 1B.
13
Item 2.
13
Item 3.
13
Item 4.
13
Item 5.
13
Item 6.
14
Item 7.
15
Item 7A.
18
Item 8.
19
Item 9.
21
Item 9A.
21
Item 9B.
22
Item 10.
23
Item 11.
26
Item 12.
28
Item 13.
29
Item 14.
30
Item 15.
30
 
 
 

 
 
PART I
 
Business
 
This annual report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors”, that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
 
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
 
Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.
 
In this annual report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the common shares in our capital stock.
 
As used in this annual report, the terms we", "us", "our" and "our company" mean Eternity Healthcare Inc. and our wholly owned subsidiary Eternity Healthcare Inc, a British Columbia corporation, unless otherwise indicated.
 
General Overview
 
We were incorporated in the State of Nevada on October 24, 2007 as an online services company under the name Kid’s Book Writer, Inc. On September 23, 2010, we changed our name to Eternity Healthcare Inc., and we effected a reverse split of our issued and outstanding common stock on a 10 old shares for 1 new share basis.  Our business offices are located at 8755 Ash Street, Suite 1, Vancouver, BC V6P 6T3. Our telephone number is (855) 324-1110.
 
From inception to December 13, 2010, we planned to develop a website for children to create their own books.  We intended to offer a pure online service designed to offer children and parents an ability to create their own book. Customers were to be able to log on to the service, pick a theme (i.e. birthday, family outing, vacation, special occasion such as Christmas / Easter, sporting event, summer camp, etc.), and the software would offer several options, including various book templates, backgrounds, page sizes, the ability to write your own story or have some guidance, etc.  We were unable to find sufficient financing for this business model.
 
On December 10, 2010 we entered into and completed a share exchange agreement with Eternity Healthcare Inc, a British Columbia corporation, wherein we acquired Eternity BC as our wholly owned subsidiary and abandoned our former business to focus on the operations of Eternity BC.
 
Our Current Business
 
We are a medical device company that, subject to government approval, plans to distribute in-home medical diagnostic kits and Needle-free Injection system throughout North America.  Since we have not yet been granted such approvals, we cannot currently offer any products.  The products which we hope to distribute differ from other current offerings by allowing ordinary people to perform diagnostic testing on themselves with a high degree of accuracy and without the need for the use of professionals such as nurses and technicians. Also, our Needle-free injection device will allow people to inject medicine without the need for a needle.
 
 
1

 
 
On March 11, 2010, we entered into a License Agreement with Valimedix Limited, a United Kingdom corporation, pursuant to which we were granted the right to market and distribute 15 unique self diagnostic products developed by Valimedix on an exclusive basis in Canada, and a on a non-exclusive basis in the United States.  We also have the right to market the products with Valimedix SELFCheck trademark.  As consideration, we paid Valimedix a onetime fee of $10,000.  On May 3, 2012, we entered into an agreement with Veda Labs of France and Healthy Europe of Italy to market a set of home-based diagnostic kits under the brand name “Prima Home Test” throughout North America. Further on June 25, 2012we entered into a marketing agreement to sell a device which does not require a needle for injection of medicine to the body from Mike Medical Company and its affiliate MK Global both of South Korea. We have the exclusive marketing rights for this device throughout North America.
 
Over the next 12 months, we plan to obtain regulatory approvals for the products licensed from the above companies and enter into distribution agreements with various retailers. We plan to expand our website to include the option to purchase our products online.  We anticipate producing promotional materials and advertising in medical journals as well as consumer magazines. In order to carry out these plans, we anticipate hiring a marketing manager, a quality control manager and 3 people for packaging and shipping.  We will require approximately $2,000,000 in order to achieve these objectives and there can be no assurance that we will be able to raise the required funds.
 
Principal Products
 
Our ability to offer test kits to potential retail customers is dependent on obtaining the required regulatory approvals.  Since we have not yet been granted such approvals, we cannot currently offer any products.  Subject to government approval, we will be able to offer the following in-home diagnostic test kits in North America, with an estimated additional 20 kits being launched in 2012 and 2013.  We believe we will need approximately $250,000 to undergo the regulatory review process for at least some of our products.  Our ability to offer the estimated additional 20 kits being launched in 2012 and 2013 is entirely dependent on our ability to raise the required $2,000,000 in order to secure government approval and develop a distribution network for our products.  However, even if we are able to raise the required funds, there can be no assurance that we will be able to government approval and develop a distribution network for our products.  Once we secure the required funds and are able to obtain governmental approval for our currently available products, and develop a distribution network, we believe we will be able to enter into additional distribution agreements with identified European developers of test kits.  We are currently in discussion with other companies, for launching various diagnostic kits, and devices.
 
Cholesterol Level Test
 
Cholesterol is produced naturally in the body. While the majority is produced in the liver, a smaller proportion is absorbed from food. The body uses cholesterol primarily for forming cell membranes, producing bile and to protect the skin. The normal total level of cholesterol in the bloodstream is <200 mg/dL. An increased level of cholesterol (>200 mg/dL) represents a risk factor for arteriosclerosis.
 
Arteriosclerosis can remain undetected for decades, and may only be discovered when it has reached a very advanced stage. It is one of the most significant and frequently-occurring diseases of industrialized society, leading to circulatory problems, heart attacks and arteriosclerosis combined represent almost 40% of all deaths in the industrialized world. Arteriosclerosis of the blood vessels surrounding the heart leads to a decrease in blood flow to the heart muscle, resulting in vessel blockage and, potentially, heart failure / attack. For this reason, detection of early symptoms is imperative in order for the appropriate prophylaxis (preventive measures) or treatment to be provided.
 
Early detection principally involves the determination of risk factors. Nowadays, it is generally accepted that hypercholesterolemia in particular (an abnormally high level of cholesterol) is one of the most significant risk factors in coronary heart disease.
 
This cholesterol test will enable the user to assess quickly and easily, backed up by a medical check from their doctor, whether or not their cholesterol levels are within the normal range. They will then be able to take action to reduce their personal risk of heart disease if, as a result of detecting raised levels, they seek the advice of their doctor as to further steps and treatment.
 
 
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Cholesterol levels may be influenced by the following factors: medication, diet, stress, diabetes mellitus, serious illness and pregnancy. In order to get meaningful results you should delay testing your cholesterol level after pregnancy or serious illness for about 3 months, and after minor illness for about 3 weeks.
 
The test kit includes a foil pack with test card and desiccant, lancet, band-aid and instructions.
 
Blood Glucose Level Test
 
Glucose is the most important monosaccharide (simple sugar) in the human body. In a healthy person, blood glucose concentration on an empty stomach lies at between approximately 4 and 6 mmol/L. Hormones in the body control blood glucose levels, ensuring that they remain constant within this range. They are lowered principally through the effects of insulin, and increased by the hormones glucagon and adrenaline in conjunction with insulin.
 
Glucagon is produced in the alpha cells, and insulin is produced in the so-called Islets of Langerhans (beta cells), both cell types being found in the pancreas. Insulin performs the most important role in keeping blood glucose levels normal.  Diseases affecting the pancreas and thus impairing the production of insulin lead to excessive glucose concentration and consequently to a disturbance in metabolic function. The most common and significant metabolic disturbance is diabetes mellitus. People with diabetes have too little insulin and are therefore unable to maintain stable glucose levels within the normal range. Medication, insulin injections or dietary changes may be needed.
 
According to the WHO (World Health Organization) estimates in 2010, there are 240 million diabetics worldwide, with numbers on an upward trend. Untreated diabetes leads primarily to diseases of the blood vessels, kidney malfunction (glomerulosclerosis), retinal damage (retinopathy, loss of sight) or blockage of major blood vessels (stroke, heart attack). For this reason, it is extremely important that diabetes be diagnosed early in order that it can be appropriately treated.
 
This test enables the user to take additional preventive action, considerably reducing their risk of suffering from diabetes without being aware of the condition. Blood sugar levels are influenced generally by various factors including: medication, alcohol, diet, stress, raised blood pressure, smoking, etc.
 
The test is comprised of 2 foil packs each with test strip and desiccant, 2 color charts, 2 lancets, 2 band-aids and instructions.
 
Bowel Health Test
 
Colon cancer is one of the most common forms of cancer and early detection is vital. The sooner it is detected, the greater are the chances of successful treatment. If it is treated at an early stage, the survival rate exceeds 90%.
 
95% of cases of colon cancer develop from polyps, which are benign tumors growing inside the colon. Typically, they do not cause any pain, and often remain undetected for many years before becoming malignant. At this stage, the hidden early stages of colon cancer can be detected by a simple test for blood in the stool.
 
Above the age of 40, if not sooner, everyone should perform an annual test for blood in the stool. It may be better to start testing before reaching 40, if for example, there is a history of colon cancer or polyps in your family. The test serves to identify blood in the stool which is not yet visible. Colon polyps bleed occasionally, and colon cancer will reveal blood at a very early stage. If, when performing this test, the user detects blood in your stool, the user should see their doctor in order for the medical reasons to be identified. What makes this test unique is that the user does not need to restrict their eating habits in any way in order to perform it, and it can be conducted simply and easily at any time of day, giving results within just a few minutes.
 
 
3

 
 
The test kit includes a sample container with buffer solution and collection stick, sealed foil pack with test cassette and desiccant and instructions.
 
Prostate Health Test
 
Prostate cancer occurs when the cells of the prostate begin to grow uncontrollably. When caught and treated early, prostate cancer has a cure rate of over 90%*.  PSA is a protein produced by the prostate and released in very small amounts into the bloodstream. When there is a problem with the prostate, such as enlarged prostate, prostatitis or development of prostate cancer, more and more PSA is released, until it reaches a level where it can be easily detected in the blood.
 
This test is sensitive and allows early detection of heightened levels of PSA in the blood, giving the user the opportunity to take early action and request further tests from their doctor should the levels be elevated.
 
*(Information provided by Prostate Cancer Foundation)
 
The test kit package includes: foil package (contains: test device and dropper), vial of test solution, lancet, alcohol swabs and instructions for use.
 
Multi Drug Test
 
This is a testing kit for testing of any combination of the following drugs:
 
Cocaine (COC), Amphetamine (AMP), Methamphetamine including Ecstasy (mAMP), Cannabis (THC), Opiates including  Heroin (OPI), and Benzodiazepines (BZO).
 
It is a one-step screen test for the simultaneous, qualitative detection of multiple drugs and metabolites in human urine.  This test provides a preliminary analytical test result, providing the concentration of the drug present in urine sample is above a set level. A more specific alternate chemical method must be used in order to obtain a confirmed analytical result.
 
The test package kit contains a test panel for 6 different drug groups and an instruction leaflet.
 
Gluten Intolerance Test
 
Gluten intolerance (or coeliac disease) is a lifelong genetically inherited intestinal disorder.
 
Damage to the inner surface of the small intestine is caused by a reaction to the ingestion of gluten. Gluten is the most common name for specific proteins found in all forms of wheat, rye and barley that are harmful to persons with coeliac disease. The Gluten Intolerance Test can aid in diagnosing coeliac disease, but the final diagnosis must be confirmed by a doctor.
 
Gluten intolerance is manifested by a broad range of symptoms and coeliac disease can be difficult to diagnose. The symptoms can range from mild weakness, bone pain, aphtous stomatitis to chronic diarrhea, abdominal bloating, and progressive weight loss. Skin disorders and disorders of the central nervous system can also exist.
 
Studies show that continuous consumption of gluten by diagnosed coeliacs increases the chance of stomach or colon cancer 40 to 100 times of that of the unaffected population (Goggins et al.: The American Journal of Gastroenterology. 1994, Vol.89,(8), 2-13.). Gluten intolerance can be diagnosed by relatively simple diagnostic tests. The testing can be done by screening the patient’s blood for antitissue transglutaminase (tTGA), antigliadin (AGA) and endomysium antibodies (EmA) and doing a biopsy on the injured areas of the intestines.
 
 
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Our Gluten Intolerance Test Kit is a simple blood test for detecting antibodies associated with gluten intolerance. The test performance has been studied at the University of Tampere by comparing the result to the biopsy proven clinical diagnosis. The kit includes an alcohol-soaked swab, a lancet, a tube with glass capillary, a foil pouch containing the test strip, sample buffer solution and an instruction leaflet.
 
Menopause Test
 
Menopause occurs when a woman’s ovaries stop releasing eggs. At this time estrogen and progesterone levels also drop (estrogen and progesterone are female hormones that prepare the body for a possible pregnancy). Experts believe it is these changes to the body’s chemistry which cause menopausal symptoms.
 
This test measures the follicle stimulating hormone (FSH) in urine. If FSH levels are elevated, it is very likely that post-menopause was entered. FSH in the female stimulates the growth of ovarian follicles and promotes follicular steroidogenesis. This stimulates luteinizing hormone (LH) production and leads to an LH surge, which in turn is the trigger for ovulation. LH and FSH (among others) play important roles in regulating ovarian functions and menstrual cycle. The hormone levels are used to assess menstrual cycle, ovulation or the determination of menopause. A change in the hormone production is responsible for menopause. FSH levels usually (before Menopause) are between 2 and 20 IU/L (International Units per Liter), but rise and remain elevated (>25 IU/L) in Post-menopause.
 
Stomach Ulcer Test
 
An ulcer is damage to the inner lining of the stomach or the upper part of the intestine (duodenum). The most common cause is infection with Helicobacter pylori and this is responsible for up to 90 per cent of all cases of peptic ulceration. Helicobacter pylori is a minute bacteria living inside and under the lining of the stomach. The groups most often affected are elderly people and people in developing countries. Those who carry these bacteria have most probably been infected during childhood. The risk of acquiring infection for an adult is modest - less than 1 per cent every year.
 
The Stomach Ulcer Test is an immunochromatographic assay for qualitative determination of antibodies to Helicobacter pylori in whole blood. The test incorporates multilayer filtration and sandwich immunoassay systems in a single module, allowing both the pretreatment of whole blood sample and the immunochromatographic detection assay to be performed in one step.
 
Urine Infection Test
 
Urinary tract infections cause a frequent desire to urinate. Often only a small amount of urine is passed but there is a burning or scalding pain whilst urinating. It sometimes includes the involuntary passing of a small squirt of urine on coughing or laughing (stress incontinence). Sometimes a little blood is passed in the urine, and affected people often have to get up during the night. Occasionally, there are other symptoms including fever, shivering, pain in the groin and a general feeling of being unwell. This may mean that the infection has spread to the kidneys (Pyelonephritis).
 
Urinary infections are caused by a number of germs. The most common germ is known as Escherichia coli, which normally lives in the bowel without causing harm. The infection may also be caused by other germs, including those acquired during sexual intercourse such as Chlamydia trachomatis, Trichomonas vaginalis, Haemophilus vaginalis or Candida albicans.
 
The Urinary Health Care Test provides a preliminary qualitative indication of a urinary tract infection. It was designed as a simple, cost effective solution to screen for reliable signs (3 parameters) of a urinary tract infection without the use of instrumentation.
 
The Protein parameter is used for indication of protein, especially albumin, and serves for diagnosis of cardinal symptom for kidney disorders or illness of the urinary tract (mainly due to bacterial infections). The Nitrite parameter is used for indication of nitrate reducing bacteria und serves for diagnosis of bacterial infection of kidneys and urinary passages. The Leucocytes parameter is used for indication of granulocyte-esterases and serves as diagnosis of inflammation of kidneys and/or urinary passages.
 
 
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Female Chlamydia Test
 
Chlamydia is the most common and easily treatable STI.  It can be transmitted by sexual intercourse and oral sex by both men and women.  It often presents no symptoms in men or women unless it leads to complications – when treatment can sometimes be too late to stop permanent damage.
 
Apart from sexual health experts, certain doctors don't have sufficient knowledge to suspect Chlamydia when assessing a person's symptoms, and may not do an appropriate test.  Healthcare professionals are often unaware of how common the problem is and that it can be present without causing symptoms.
 
Our test is able to detect the bacteria which cause Chlamydia even if there are no symptoms; allowing the user to take pro-active steps in treating it.  A visible result from the test is achieved within 10 minutes.
 
Markets, Customers and Distribution
 
We are attempting to provide a partial solution to the increasing cost of healthcare in Canada.  We are initially going to limit our products to distribution in Canada, but will look at expanding into the US in the future and other North American countries.  Our management believes that the most likely marketplace for our products will be community based healthcare providers whose role will be to deliver more cost effective services and management to reduce the work load on centralized district general hospital facilities. We believe that acceptance and implementation of in-home screening tests offers direct savings in terms of early detection of disease and consequently faster clinical and medical interventions where abnormal outcomes occur.
 
We believe that individual doctors’ offices, drop-in clinics and pharmacy based medical services will serve as a market for our products. In addition, we market specific product packages to Hotel/Spa clinics, health clubs as well as the occupational health sector, universities and schools.
 
We anticipate that the following consumer groups will make up the majority of our market:
 
1.  
Individuals in their 50s and 60s who are seeking to maximize their retirement assets.  These are generally well educated, technology and health conscious and looking to limit their healthcare costs and achieve early detection of late onset diseases to ensure prompt intervention and treatment.
 
2.  
Females over the age of 25 - These are generally aware individuals, who have not yet had children.  With frequent coverage in the media of issues such as STDs and infertility, they may be more apt to invest in home screening products to stay up to date on their health status.
 
3.  
Individuals who consider wellness a lifestyle.  They are generally early middle aged, well educated, and prepared to use in home screening tests as part of their health and lifestyle program.  This may include cholesterol assessment as well as screening for food allergies and season disorders like asthma.
 
4.  
Individuals in need of chronic disease management and monitoring such as diabetes, heart disease, and osteoporosis.  Such diseases are often complex as serious secondary health issues can develop; diabetics need to monitor renal function and cholesterol regularly as part of the ongoing management.
 
Competition
 
We do not believe that there are direct competitors for our in home screening products in the market at the present time.  However, once we obtain the requisite regulatory approvals for our products and are able to begin sales, we hope to compete with standard diagnostic facilities such as medical or clinical laboratories as well as doctors’ offices.  These competitors have longer operating histories, better industry recognition and, in many cases, greater financial resources than we do.  Additionally, they are the established choice for diagnostics and consumers likely will have more confidence in them. In order for us to successfully compete in our industry we will need to:
 
 
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Establish the accuracy of our products;
  
Build our brand recognition;
  
Establish and develop relationships with distributors and retailers; and
  
Increase our financial resources.
 
However, there can be no assurance that, even if we do these things, we will be able to compete effectively with the other companies in our industry. Nor can there be any assurance that we will receive the required government approvals.
 
Once we obtain the requisite regulatory approvals, we believe that we will be able to compete effectively in our industry because:
 
  
standard diagnostics test at established providers are costly;
  
our products can eliminate the requirement to travel in order to have tests performed;
  
our products can eliminate the need to see general physicians before tests can be performed; and
  
our products allow the consumer more privacy in matters which they do not wish to share with their physicians.
 
As we are a newly-established company, we face the same problems as other new companies starting up in an industry, such as lack of available funds. Our competitors may be substantially larger and better funded than us, and have significantly longer operating histories than us. In addition, they may develop similar technologies to ours and use the same methods as we do and generally be able to respond more quickly to new or emerging technologies and changes in legislation and regulations relating to the industry. Additionally, our competitors may devote greater resources to the development, promotion and sale of their products or services than we do. Increased competition could also result in loss of key personnel, reduced margins or loss of market share, any of which could harm our business.
 
Intellectual Property
 
We have not filed for any protection of our name or trademark.  As a distribution company we do not directly own any of the intellectual property rights attached to any of the products we distribute. 
 
Research and Development
 
During the years ended April 30, 2012 and 2011 we incurred research and development expenses of $80,360 and $29,000, respectively.
 
Government Regulations
 
Government authorities in the United States and Canada, at the federal, state and local levels, and other countries extensively regulate, among other things, the research, development, testing, manufacturing, labeling, promotion, advertising, distribution, marketing and export and import of medical devices such as diagnostic kits and tools; products which we are distributing. The process of obtaining regulatory approvals and the subsequent substantial compliance with appropriate federal, state, local and foreign statutes and regulations require the expenditure of substantial time and financial resources.
 
We are required to obtain two sets of license for the sale and marketing of our diagnostic kits.  In Canada, as in the United States and Europe, diagnostic test kits are classified as medical devices and require the following licenses: 1) Product License; and 2) Establishment License.
 
 
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Product License: Diagnostic tests kits are classified under 4 different classes. Class I, II, III, and IV.
 
Class I includes products of which several examples are already approved and marketed in Canada. As long as the basic science remains the same, the application for approval of a new product is straight forward. One product in this category would be a pregnancy test. We are not marketing pregnancy test and therefore, we do not need to apply for approval under this class of products.
 
Class II products are those which do not need to be injected or inserted into the patient (non-invasive).  Often these tests kits are approved and sold in other parts of the world, but yet to be sold in Canada. The products which we are current focusing on distributing, and which are mentioned in this Prospectus, all belong to Class II. In order to secure the necessary license for these products, we are required to submit all the documentation which lead to the approval of the products in other countries. In our case, all of our products are already approved in Europe. Consequently, we are required to submit to the Canadian regulatory agency all the scientific data, results, approval process and certificates of good quality management, ISO 13485. Usually, products which have the ISO accreditation and approved by FDA or the European Union will qualify for approval in Canada. We anticipate that it will take 3-4 months following submission of the material to the Canadian Health Agency to obtain the license for marketing of the diagnostic tests in Canada.
 
Class III and IV include medical device which use invasive techniques. If the medical device has been approved in another region, it is considered Class III.  If it is brand new, it is considered Class IV.  Invasive tests such as colonoscopy, endoscopy, body lesion removal etc, are all considered Class III or IV. None of our products fall within Class III or IV.
 
Establishment License:  We are also required to obtain an establishment license for the marketing of our products. The intent of the medical device establishment licensing requirements is:
 
1.  
To ensure that the inspectorate is made aware of:
 
a.  
Who is importing and/or selling medical devices in Canada,
 
b.  
The identity of the manufacturers of the devices sold by the holder of the license holder, as well as the classification of those devices,
 
c.  
The identity of manufacturers of Class I and II devices.
 
2.  
To require license holders to provide some assurance to the Inspectorate that they have met the regulatory requirements and have documented procedures in place, where applicable, related to distribution record, complaint handling, recalls, mandatory problem reporting and for handling, storage, delivery, installation, and servicing, with respect to the medical devices they sell.
 
Depending on the outcome of the regulatory review process for our products, we believe that the cost of obtaining required regulatory approvals will be anywhere from $300to $10,000 per product.  The large variation is due to the uncertainty whether the products’ current European approvals will be accepted in North America.
 
We are required to have a facility, where we stare the products, and distribute from that site. We are required to provide the name of contact and the physical address of the warehouse that if the authorities decided to inspect that can be done. The facility requires a safe lock –up a person with complete documentation of the import export.
 
Environmental Regulations
 
We are not aware of any material violations of environmental permits, licenses or approvals that have been issued with respect to our operations.  We expect to comply with all applicable laws, rules and regulations relating to our business, and at this time, we do not anticipate incurring any material capital expenditures to comply with any environmental regulations or other requirements.
 
 
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While our intended projects and business activities do not currently violate any laws, any regulatory changes that impose additional restrictions or requirements on us or on our potential customers could adversely affect us by increasing our operating costs or decreasing demand for our products or services, which could have a material adverse effect on our results of operations.
 
Employees
 
As of July 16, 2012 we had 3 consultants, working on our business. We plan to hire 5 full-time employees and 3 additional consultants to work for us on marketing, distribution, commercialization of our products.
 
REPORTS TO SECURITY HOLDERS
 
We are required to file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission and our filings are available to the public over the internet at the Securities and Exchange Commission’s website at http://www.sec.gov. The public may read and copy any materials filed by us with the Securities and Exchange Commission at the Securities and Exchange Commission’s Public Reference Room at 100 F Street N.E. Washington D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the Securities and Exchange Commission at 1-800-732-0330. The SEC also maintains an Internet site that contains reports, proxy and formation statements, and other information regarding issuers that file electronically with the SEC, at http://www.sec.gov.
 
Risk Factors
 
Much of the information included in this annual report includes or is based upon estimates, projections or other “forward looking statements”. Such forward looking statements include any projections and estimates made by us and our management in connection with our business operations. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein.
 
Such estimates, projections or other “forward looking statements” involve various risks and uncertainties as outlined below. We caution the reader that important factors in some cases have affected and, in the future, could materially affect actual results and cause actual results to differ materially from the results expressed in any such estimates, projections or other “forward looking statements”.
 
Risks Related to Our Business
 
We have a history of losses and no revenues, which raise substantial doubt about our ability to continue as a going concern.
 
From inception to April 30, 2012, we have incurred aggregate net losses of $315,636. We can offer no assurance that we will ever operate profitably or that we will generate positive cash flow in the future. In addition, our operating results in the future may be subject to significant fluctuations due to many factors not within our control, such as the unpredictability of when customers will order products, the size of customers’ orders, the demand for our products, and the level of competition and general economic conditions.
 
Our company’s operations will be subject to all the risks inherent in the establishment of a developing enterprise and the uncertainties arising from the absence of a significant operating history. No assurance can be given that we may be able to operate on a profitable basis.
 
 
9

 
 
Due to the nature of our business and the early stage of our development, our securities must be considered highly speculative. We have not realized a profit from our operations to date and there is little likelihood that we will realize any profits in the short or medium term. Any profitability in the future from our business will be dependent upon the successful commercialization or licensing of our core products, which themselves are subject to numerous risk factors as set forth below.
 
We expect to continue to incur development costs and operating costs. Consequently, we expect to incur operating losses and negative cash flows until our products gain market acceptance sufficient to generate a commercially viable and sustainable level of sales, and/or additional products are developed and commercially released and sales of such products made so that we are operating in a profitable manner. Our history of losses and no revenues raise substantial doubt about our ability to continue as a going concern.
 
We have had negative cash flows from operations since inception. We will require significant additional financing, the availability of which cannot be assured, and if our company is unable to obtain such financing, our business may fail.
 
To date, we have had negative cash flows from operations and have depended on sales of our equity securities and debt financing to meet our cash requirements. We may continue to have negative cash flows. We have estimated that we will require approximately $2,000,000 to carry out our business plan for the next twelve months. There is no assurance that actual cash requirements will not exceed our estimates. We will require additional financing to finance working capital and pay for operating expenses and capital requirements until we achieve a positive cash flow.
 
Our ability to market and sell our medical devices will be dependent upon our ability to raise significant additional financing. If we are unable to obtain such financing, we will not be able to fully develop our business. Specifically, we will need to raise additional funds to:
 
  
support our planned growth and carry out our business plan;
  
hire top quality personnel for all areas of our business; and
  
address competing technological and market developments.
 
We may not be able to obtain additional equity or debt financing on acceptable terms as required. Even if financing is available, it may not be available on terms that are favorable to us or in sufficient amounts to satisfy our requirements. Any additional equity financing may involve substantial dilution to our then existing shareholders. If we require, but are unable to obtain, additional financing in the future, we may be unable to implement our business plan and our growth strategies, respond to changing business or economic conditions, withstand adverse operating results and compete effectively. More importantly, if we are unable to raise further financing when required, we may be forced to scale down our operations and our ability to generate revenues may be negatively affected.
 
We have a limited operating history and if we are not successful in continuing to grow our business, then we may have to scale back or even cease our ongoing business operations.
 
We have no history of revenues from operations and have no significant tangible assets. We have yet to generate positive earnings and there can be no assurance that we will ever operate profitably. Accordingly, we must be considered in the development stage. Our success is significantly dependent on a successful commercialization of our advertising services. Our operations will be subject to all the risks inherent in the establishment of a developing enterprise and the uncertainties arising from the absence of a significant operating history. We may be unable to develop a successful advertising service or achieve commercial acceptance of our advertising services or operate on a profitable basis. We are in the development stage and potential investors should be aware of the difficulties normally encountered by enterprises in the development stage. If our business plan is not successful, and we are not able to operate profitably, investors may lose some or all of their investment in our company.
 
 
10

 
 
If we fail to effectively manage the growth of our company and the commercialization of our medical devices, our future business results could be harmed and our managerial and operational resources may be strained.
 
As we proceed with the commercialization of our medical devices and the expansion of our marketing and commercialization efforts, we expect to experience significant growth in the scope and complexity of our business. We will need to add staff to market our services, manage operations, handle sales and marketing efforts and perform finance and accounting functions. We anticipate that we will be required to hire a broad range of additional personnel in order to successfully advance our operations. This growth is likely to place a strain on our management and operational resources. The failure to develop and implement effective systems, or to hire and retain sufficient personnel for the performance of all of the functions necessary to effectively service and manage our potential business, or the failure to manage growth effectively, could have a material adverse effect on our business and financial condition.
 
Because we face intense competition from larger and better-established companies that have more resources than we do, we may be unable to implement our business plan or increase our revenues.
 
The market for our medical devices is intensely competitive and highly fragmented. Many of these competitors may have longer operating histories, greater financial, technical and marketing resources, and enjoy existing name recognition and customer bases. New competitors may emerge and rapidly acquire significant market share. In addition, new services and technologies likely will increase the competitive pressures we face. Competitors may be able to respond more quickly to technological change, competitive pressures, or changes in consumer demand. As a result of their advantages, our competitors may be able to limit or curtail our ability to compete successfully.
 
In addition, many of our large competitors may offer customers a broader or superior range of services and technologies. Some of our competitors may conduct more extensive promotional activities and offer lower commercialization and licensing costs to customers than we do, which could allow them to gain greater market share or prevent us from establishing and increasing our market share. Increased competition may result in significant price competition, reduced profit margins or loss of market share, any of which may have a material adverse effect on our ability to generate revenues and successfully operate our business. Our competitors may develop technologies superior to those that our company currently possess. In the future, we may need to decrease our prices if our competitors lower their prices. Our competitors may be able to respond more quickly to new or changing opportunities, services, technologies and customer requirements. Such competition will potentially affect our chances of achieving profitability, and ultimately affect our ability to continue as a going concern.
 
Our by-laws contain provisions indemnifying our officers and directors against all costs, charges and expenses incurred by them.
 
Our by-laws contain provisions with respect to the indemnification of our officers and directors against all expenses, liability and loss (including attorneys’ fees, judgments, fines and amounts paid or to be paid in settlement) reasonably incurred or suffered by him or her in connection with any action, suit or proceeding to which they were made parties by reason of his or her being or having been one of our directors or officers.
 
 
11

 
 
Risks Related to Our Common Stock
 
A decline in the price of our common stock could affect our ability to raise further working capital, it may adversely impact our ability to continue operations and we may go out of business.
 
A prolonged decline in the price of our common stock could result in a reduction in the liquidity of our common stock and a reduction in our ability to raise capital. Because we may attempt to acquire a significant portion of the funds we need in order to conduct our planned operations through the sale of equity securities, a decline in the price of our common stock could be detrimental to our liquidity and our operations because the decline may cause investors to not choose to invest in our stock. If we are unable to raise the funds we require for all of our planned operations, we may be forced to reallocate funds from other planned uses and may suffer a significant negative effect on our business plan and operations, including our ability to develop new products and continue our current operations. As a result, our business may suffer and not be successful and we may go out of business. We also might not be able to meet our financial obligations if we cannot raise enough funds through the sale of our common stock and we may be forced to go out of business.
 
If we issue additional shares in the future, it will result in the dilution of our existing shareholders.
 
We are authorized to issue up to 300,000,000 shares of common stock with a par value of $0.001. Our board of directors may choose to issue some or all of such shares to acquire one or more businesses or to provide additional financing in the future. The issuance of any such shares will result in a reduction of the book value and market price of the outstanding shares of our common stock. If we issue any such additional shares, such issuance will cause a reduction in the proportionate ownership and voting power of all current shareholders. Further, such issuance may result in a change of control of our company.
 
Trading of our stock may be restricted by the Securities Exchange Commission's penny stock regulations, which may limit a stockholder's ability to buy and sell our stock.
 
The Securities and Exchange Commission has adopted regulations which generally define "penny stock" to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and "accredited investors". The term "accredited investor" refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the Securities and Exchange Commission, which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer's account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer's confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.
 
 
12

 
 
FINRA sales practice requirements may also limit a stockholder's ability to buy and sell our stock.
 
In addition to the "penny stock" rules described above, the Financial Industry Regulatory Authority (FINRA), formerly the National Association of Securities Dealers or NASD, has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, the FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.
 
Unresolved Staff Comments
 
As a “smaller reporting company”, we are not required to provide the information required by this Item.
 
Properties
 
We currently rent an assembly space of about 2,000 square feet of office and warehouse location in Vancouver. Our office is also in the same location. For our facility we pay approximately $3,000 per month.  Our leases are for one year but can be extended on a similar basis.
 
Legal Proceedings
 
We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial stockholder, is an adverse party or has a material interest adverse to our interest.
 
Mine Safety Disclosures
 
Not applicable.
 
PART II
 
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
 
Our common stock is not traded on any exchange.  Our common stock is quoted on OTC Bulletin Board, under the trading symbol “ETAH”.   We cannot assure you that there will be a market in the future for our common stock.
 
OTC Bulletin Board securities are not listed and traded on the floor of an organized national or regional stock exchange.  Instead, OTC Bulletin Board securities transactions are conducted through a telephone and computer network connecting dealers.  OTC Bulletin Board issuers are traditionally smaller companies that do not meet the financial and other listing requirements of a national or regional stock exchange.
 
The following table reflects the high and low bid information for our common stock obtained from Stockwatch and reflects inter-dealer prices, without retail mark-up, markdown or commission, and may not necessarily represent actual transactions.
 
 
13

 
 
The high and low bid prices of our common stock for the periods indicated below are as follows:
 
OTC Bulletin Board(1)
Quarter Ended
High
Low
April 30, 2012
$1.05
$0.90
January 31, 2012
$0.80
$0.00
October 31, 2011
$N/A
$N/A
July 31, 2011
$N/A
$N/A
April 30, 2011
$N/A
$N/A
January 31, 2011
$N/A
$N/A
October 31, 2010
$N/A
$N/A
July 31, 2010
$N/A
$N/A

(1)  
The first trade of our common stock on the OTC Bulletin Board occurred on March 5, 2010.  There were no trades until January 23, 2012.
 
As of July 16, 2012, there were approximately 18 holders of record of our common stock. As of such date, 63,575,000 common shares were issued and outstanding.
 
Our common shares are issued in registered form.  Island Stock Transfer, 100 Second Avenue South, Suite 705S, St. Petersburg, Florida 33701, (Telephone: (727) 289-0010) is the registrar and transfer agent for our common shares.
 
Dividend Policy
 
We have not paid any cash dividends on our common stock and have no present intention of paying any dividends on the shares of our common stock. Our current policy is to retain earnings, if any, for use in our operations and in the development of our business. Our future dividend policy will be determined from time to time by our board of directors.
 
Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities
 
We did not sell any equity securities which were not registered under the Securities Act during the year ended April 30, 2012 that were not otherwise disclosed on our quarterly reports on Form 10-Q or our current reports on Form 8-K filed during the year ended April 30, 2012.
 
Equity Compensation Plan Information
 
Except as disclosed herein, we do not have a stock option plan in favor of any director, officer, consultant or employee of our company.
 
Convertible Securities
 
Except as disclosed herein, we do not have any outstanding convertible securities.
 
Purchase of Equity Securities by the Issuer and Affiliated Purchasers
 
We did not purchase any of our shares of common stock or other securities during our fourth quarter of our fiscal year ended April 30, 2012.
 
Selected Financial Data
 
As a “smaller reporting company”, we are not required to provide the information required by this Item.
 
 
14

 
 
Management’s Discussion and Analysis of Financial Condition and Results of Operations
 
The following discussion should be read in conjunction with our audited financial statements and the related notes for the years ended April 30, 2012 and April 30, 2011 that appear elsewhere in this annual report.  The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs.  Our actual results could differ materially from those discussed in the forward looking statements.  Factors that could cause or contribute to such differences include, but are not limited to those discussed below and elsewhere in this annual report, particularly in the section entitled "Risk Factors" beginning on page 9 of this annual report.
 
Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.
 
Purchase of Significant Equipment
 
We do not intend to any significant equipment over the next twelve months.
 
Personnel Plan
 
We plan to hire 5 new full-time employees and 3 additional consultants to work on marketing, distribution, commercialization and regulatory approvals our products in 2012/2013 if we have sufficient capital.
 
Results of Operations
 
For the Year Ending April 30, 2012 and 2011
 
   
Year Ended
April 30
 
   
2012
   
2011
 
Revenue
  $Nil     $Nil  
Operating Expenses
  $ 184,650     $ 101,221  
Net Loss
  $ (184,650 )   $ (101,221 )
 
Expenses
 
Our operating expenses for our years ended April 30, 2012 and 2011 are outlined in the table below:
 
   
Year Ended
April 30
 
   
2012
   
2011
 
Depreciation
  $ 243     $ 80  
General and Administrative
  $ 19,956     $ 10,313  
Professional Fees
  $ 84,091     $ 61,828  
Research and Development
  $ 80,360     $ 29,000  
 
Operating expenses for year ended April 30, 2012 increased by $83,429 as compared to the comparative period in 2012 primarily as a result of increased professional fees and research and development expenses.
 
Revenue
 
We have not earned revenue since our inception.
 
 
15

 
 
Equity Compensation
 
We currently do not have any stock option or equity compensation plans or arrangements.
 
Liquidity and Financial Condition
 
Working Capital
           
   
At
April 30,
2012
   
At
April 30,
2011
 
Current Assets
  $ 237,754     $ 58,600  
Current Liabilities
  $ 585,808     $ 210,102  
Working Capital (Deficit)
  $ (348,052 )   $ (151,502 )

Cash Flows
           
   
Year Ended
April 30,
2012
   
Year Ended
April 30,
2011
 
Net Cash used in Operating Activities
  $ (202,316 )   $ (87,018 )
Net Cash used in Investing Activities
  $Nil     $ (727 )
Net Cash Provided by Financing Activities
  $ 372,451     $ 153,347  
Effect of Rates on Cash
  $ (2,363 )   $ (12,373 )
Increase (Decrease) in Cash During the Period
  $ 167,772     $ 53,229  
 
We estimate that our expenses over the next 12 months (beginning May 2012) will be approximately $2,000,000 as described in the table below.  These estimates may change significantly depending on the performance of our products in the marketplace and our ability to raise capital from shareholders or other sources.
 
Description
   
Estimated Completion Date
 
Estimated Expenses
($)
 
Legal and accounting fees
   
12 months
    100,000  
Marketing and advertising
   
12 months
    1,000,000  
Management and operating costs
   
12 months
    200,000  
Salaries and consulting fees
   
12 months
    200,000  
Regulatory approval
   
12 months
    250,000  
General and administrative expenses
   
12 months
    250,000  
Total
          2,000,000  
 
We intend to meet our cash requirements for the next 12 months through a combination of debt financing and equity financing by way of private placements.  We currently do not have any arrangements in place to complete any private placement financings and there is no assurance that we will be successful in completing any private placement financings on terms that will be acceptable to us.  We may not raise sufficient funds to fully carry out our business plan.
 
 
16

 
 
Future Financings
 
We will require additional financing in order to enable us to proceed with our plan of operations, as discussed above, including approximately $2,000,000 over the next 12 months to pay for our ongoing expenses. These expenses include legal, accounting and audit fees as well as general and administrative expenses. These cash requirements are in excess of our current cash and working capital resources. Accordingly, we will require additional financing in order to continue operations and to repay our liabilities. There is no assurance that any party will advance additional funds to us in order to enable us to sustain our plan of operations or to repay our liabilities.
 
We anticipate continuing to rely on equity sales of our common stock in order to continue to fund our business operations. Issuances of additional shares will result in dilution to our existing stockholders. There is no assurance that we will achieve any additional sales of our equity securities or arrange for debt or other financing to fund our planned business activities.
 
We presently do not have any arrangements for additional financing for the expansion of our exploration operations, and no potential lines of credit or sources of financing are currently available for the purpose of proceeding with our plan of operations.
 
Contractual Obligations
 
As a “smaller reporting company”, we are not required to provide tabular disclosure obligations.
 
Going Concern
 
We have not generated any revenue since inception and are dependent upon obtaining outside financing to carry out our operations and pursue our pharmaceutical research and development activities. If we are unable to generate future cash flows, raise equity or secure alternative financing, we may not be able to continue our operations and our business plan may fail. You may lose your entire investment.
 
If our operations and cash flow improve, management believes that we can continue to operate. However, no assurance can be given that management's actions will result in profitable operations or an improvement in our liquidity situation. The threat of our ability to continue as a going concern will cease to exist only when our revenues have reached a level able to sustain our business operations.
 
Off-Balance Sheet Arrangements
 
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.
 
Critical Accounting Policies
 
The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with the accounting principles generally accepted in the United States of America. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financial statements.
 
 
17

 
 
Principles of consolidation
 
The consolidated financial statements include the accounts of our company and its wholly-owned subsidiary, Eternity BC.  All significant intercompany balances and transactions have been eliminated in consolidation.
 
Foreign currency translation
 
Our company’s functional currency is the Canadian dollar and reporting currency is the U.S. dollar.  All transactions initiated in other currencies are translated into the reporting currency in accordance with ASC 830, “Foreign Currency Matters” as follows:
 
i) Assets and liabilities at the rate of exchange in effect at the balance sheet date, and
 
ii) Revenue and expense items at rate of exchange at the dates on which those elements are recognized.
 
Gains and losses on translation are included in other comprehensive income (loss) in stockholders’ deficiency for the period.
 
Basic and diluted net income (loss) per share
 
Our company computes net income (loss) per share in accordance with ASC 260, “Earnings per Share”.  ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement.  Basic EPS is computed by dividing net income (loss) available to common stockholders (numerator) by the weighted average number of shares outstanding (denominator) during the period.  Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method.  In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants.  Diluted EPS excluded all dilutive potential shares if their effect is anti-dilutive.
 
Use of estimates
 
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures during the reporting period.  Actual results could differ from these estimates.
 
Recent accounting pronouncements
 
In May 2011, the FASBE and International Accounting Standards Board (“IASB”) (collectively the “Boards”) issued ASU 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (ASU 2011-04”).  ASU 2011-04 created a uniform framework for applying fair value measurement principles for companies around the world and clarified existing guidance in US GAAP. ASU 2011-04 is effective for the first reporting annual period beginning after December 15, 2011 and shall be applied prospectively.  Our company does not expect this standard to have any material effect on our consolidated financial statements.
 
In June 2011, the FASB issued ASU No. 2011-05, Comprehensive Income (Topic 220), Presentation of Comprehensive Income. This update is intended to increase the prominence of other comprehensive income in the financial statements by requiring public companies to present comprehensive income either as a single statement detailing the components of net income and total net income, the components of other comprehensive income and total other comprehensive income, and a total for comprehensive income or using a two statement approach including both a statement of income and a statement of comprehensive income. The option to present other comprehensive income in the statement of changes in equity has been eliminated.  The amendments in this update, which should be applied retrospectively, are affective for public companies for fiscal years, and interim periods beginning after December 15, 2011.  Our company does not expect this standard to have any material effect on our consolidated financial statements.
 
Quantitative and Qualitative Disclosures About Market Risk
 
As a “smaller reporting company”, we are not required to provide the information required by this Item.
 
 
18

 
 
Financial Statements and Supplementary Data
 
 
Eternity Healthcare Inc.
(formerly Kid’s Book Writer Inc.)
(A Development Stage Company)
CONSOLIDATED FINANCIAL STATEMENTS
April 30, 2012 and 2011
(Expressed in U.S. Dollars)

 
19

 
 
ETERNITY HEALTHCARE, INC.
(formerly Kid’s Book Writer, Inc.)
Table of Contents
 
 
Page
   
Audit Report of Independent Accountants
F-1
   
Consolidated Balance Sheets – April 30, 2012 and 2011
F-2
   
Consolidated Statements of Loss and Comprehensive Loss  for the years ended April 30, 2012 and 2011 and for the period from  inception on December 10, 2009 through April 30, 2012
F-3
   
Consolidated Statements of Stockholder’s Deficit for the period from inception on December 10, 2009 through April 30, 2012
F-4
   
Consolidated Statements of Cash Flows for the years ended  April 30, 2012 and 2011 and for the period from inception on   December 10, 2009 through April 30, 2012
F-5
   
Notes to Consolidated Financial Statements
F-6
 
_______________________________________
 
 
20

 


 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors
Eternity Healthcare, Inc. (formerly Kid’s Book Writer, Inc.)
(A Development Stage Company)

We have audited the accompanying consolidated balance sheet of Eternity Healthcare, Inc. (formerly Kid’s Book Writer, Inc.) as of April 30, 2012 and 2011, and the related consolidated statements of operations, stockholders’ deficit and cash flows for the years then ended.  These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated 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 audits 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 audits 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 consolidated financial statements referred to above present fairly, in all material respects, the financial position of Eternity Healthcare, Inc. (formerly Kid’s Book Writer, Inc.) as of April 30, 2012 and 2011, and the results of their operations and their cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company an accumulated deficit of $315,636 as of April 30, 2012 which raises substantial doubt about its ability to continue as a going concern. Management’s plans concerning these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Sadler, Gibb & Associates, LLC

Sadler, Gibb & Associates, LLC
Salt Lake City, UT
July 16, 2012

 
 
F-1

 
 
Eternity Healthcare Inc.
(formerly Kid’s Book Writer Inc.)
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
(Expressed in U.S. Dollars)


   
April 30,
 
   
2012
   
2011
 
             
ASSETS
           
             
CURRENT ASSETS
           
Cash and cash equivalents
  $ 226,372     $ 58,600  
GST/HST receivable
    11,384        
      237,756       58,600  
                 
PROPERTY AND EQUIPMENT, net (Note 3)
    404       647  
                 
TOTAL ASSETS
  $ 238,160     $ 59,247  
                 
LIABILITIES
               
                 
CURRENT LIABILITIES
               
Accounts payable and accrued liabilities (Note 4)
  $ 3,727     $ 12,686  
Due to related parties (Note 5)
    582,081       197,416  
Total Liabilities
    585,808       210,102  
                 
SHAREHOLDERS’ DEFICIENCY
               
                 
CAPITAL STOCK (Note 6)
               
                 
Authorized
               
300,000,000 common shares, par value $0.001
               
Issued and outstanding
               
April 30, 2012 – 63,575,000 common shares
               
April 30, 2011 – 60,000,000 common shares
    63,575       63,575  
Additional paid-in capital
    (86,073 )     (86,073 )
Accumulated other comprehensive gain (loss)
    (9,514 )     2,629  
Deficit, accumulated during the development stage
    (315,636 )     (130,986 )
    Total Stockholders’ Deficit
    (347,648 )     (150,855 )
                 
     TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT
  $ 238,160     $ 59,247  

The accompanying notes are an integral part of these consolidated financial statements.
 
 
F-2

 

Eternity Healthcare Inc.
(formerly Kid’s Book Writer Inc.)
(A Development Stage Company)
CONSOLIDATED STATEMENT OF LOSS AND COMPREHENSIVE LOSS
(Expressed in U.S. Dollars)


   
Year ended
April 30, 2012
   
Year ended
April 30, 2011
   
From the
period from inception on December 31, 2009 to
April 30, 2012
 
                   
EXPENSES
                 
Depreciation
  $ 243     $ 80     $ 323  
General and administrative
    19,956       10,313       40,260  
Professional fees
    84,091       61,828       165,693  
Research and development
    80,360       29,000       109,360  
                         
NET LOSS FOR THE PERIOD
  $ (184,650 )   $ (101,221 )   $ (315,636 )
                         
                         
COMPREHENSIVE LOSS
                       
Net (loss) for the period
    (184,650 )     (101,221 )     (315,636 )
Foreign currency translation adjustments
    (12,143 )     3,543       (9,514 )
                         
COMPREHENSIVE LOSS FOR THE PERIOD
  $ (196,793 )   $ (97,678 )   $ (325,150 )
                         
COMPREHENSIVE LOSS PER SHARE – BASIC AND DILUTED
    (0.003 )     (0.001 )        
                         
NET LOSS PER SHARE – BASIC AND DILUTED
    (0.003 )     (0.001 )        
                         
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING BASIC AND DILUTED
    63,575,000       61,361,438          
 
The accompanying notes are an integral part of these consolidated financial statements.
 
 
F-3

 
 
Eternity Healthcare Inc.
(formerly Kid’s Book Writer Inc.)
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in U.S. Dollars)


   
Year ended
April 30, 2012
   
Year ended
April 30, 2011
   
For the period from the date of inception on December 10, 2009 to
April 30, 2012
 
                   
OPERATING ACTIVITIES
                 
Net (loss) income for the period
  $ (184,650 )   $ (101,221 )   $ (315,636 )
Adjustments to reconcile net cash provided
                       
by operating activities
                       
Depreciation
    243       80       323  
Expenses paid on behalf of the Company by related parties
           7,308       7,308  
Changes in operating assets and liabilities
                       
Accounts payable and accrued liabilities
    (6,525 )     6,815       5,233  
GST/HST  receivable
    (11,384 )           (11,384 )
                         
    Net cash used in operating activities
    (202,316 )     (87,018 )     (314,156 )
                         
INVESTING ACTIVITIES
                       
                         
Purchase of equipment
          (727 )     (727 )
                         
Net cash used in investing activities
          (727 )     (727 )
                         
FINANCING ACTIVITIES
                       
Common shares issued for cash
                380  
Proceeds from related party payables
    372,451       185,020       588,168  
Repayments on related party payables
          (31,673 )     (31,673 )
                         
    Net cash provided by financing activities
    372,451       153,347       556,875  
                         
EFFECT OF EXCHANGE RATE CHANGES ON CASH
    (2,363 )     (12,373 )     (15,620 )
                         
INCREASE IN CASH
    167,772       53,229       226,372  
                         
CASH, beginning of period
    58,600       5,371        
                         
CASH, end of period
  $ 226,372     $ 58,600     $ 226,372  
                         
NON CASH INVESTING AND FINANCING ACTIVITIES                        
     Net assets acquired in share agreement
          22,879       22,879  
 
The accompanying notes are an integral part of these consolidated financial statements.
 
 
F-4

 
 
Eternity Healthcare Inc.
(formerly Kid’s Book Writer Inc.)
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
(Expressed in U.S. Dollars)


   
 
Shares
   
Amount
($0.001 par)
   
Additional
paid-in capital
   
Accumulated
OCI
   
Accumulated deficit
   
 
Total
 
                                     
Balance as at December 10, 2009 (inception)
    -     $ -     $ -     $ -     $ -     $ -  
                                                 
Common shares issued for cash on December 10, 2009 (Notes 1 and 6)
    60,000,000       60,000       (59,620 )     -       -       380  
                                                 
Currency translation adjustment
    -       -       -       (914 )     -       (914 )
                                                 
Net loss for the period ended April 30, 2010
    -       -       -       -       (29,765 )     (29,765 )
                                                 
Balance as at April 30, 2010
    60,000,000       60,000       (59,620 )     (914 )     (29,765 )     (30,299 )
                                                 
Recapitalization (Notes 1 and 6)
    3,575,000       3,575       (26,453 )     -       -       (22,878 )
                                                 
Currency translation adjustment
    -       -       -       3,543       -       3,543  
                                                 
Net loss for the year ended April 30, 2011
    -       -       -       -       (101,221 )     (101,221 )
                                                 
Balance as at April 30, 2011
    63,575,000     $ 63,575     $ (86,073 )   $ 2,629     $ (130,986 )   $ (150,855 )
                                                 
Currency translation adjustment
    -       -       -       (12,143 )     -       (12,143 )
                                                 
Net loss for the year ended April 30, 2012
    -       -       -       -       (184,650 )     (184,650 )
                                                 
Balance as at April 30, 2012
    63,575,000     $ 63,575     $ (86,073 )   $ (9,514 )   $ (315,636 )   $ (347,648 )
 
The accompanying notes are an integral part of these consolidated financial statements.
 
 
F-5

 
 
Eternity Healthcare Inc.
(formerly Kid’s Book Writer Inc.)
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
April 30, 2011 and 2010
(Expressed in U.S. Dollars)

 
1.
NATURE AND CONTINUANCE OF OPERATIONS

Eternity Healthcare Inc. (the “Company”) was incorporated under the laws of the State of Nevada on October 24, 2007 under the name Kid’s Book Writer, Inc.  On September 23, 2010, the Company changed its name to Eternity Healthcare Inc., and effected a reverse stock split of the issued and outstanding common stock at a factor of 10 old shares for 1 new share.  The Company is focused on offering an extensive range of diagnostic kits, general lifestyle supplements and many other management products and resources.

On December 13, 2010, pursuant to the terms of a share exchange agreement, the Company acquired 100% of the issued and outstanding common stock of Eternity Healthcare Inc., a company incorporated under the laws of the Province of British Columbia on December 10, 2009 (“Eternity BC”), for 60,000,000 shares of its own common stock, which were distributed to the shareholders of Eternity BC (the “Share Exchange Agreement”) (Note 6).

The Share Exchange Agreement, which represents a majority of the then issued and outstanding shares of the Company, constituted a change in control of the Company.  The acquisition of Eternity BC was accounted for as a reverse acquisition in accordance with Accounting Standards Codification (“ASC”) 805-40, “Business Combinations”.  The Company determined for accounting and reporting purposes that Eternity BC is the acquirer because of the significant holdings and influence of the control group of the Company before and after the acquisition.  As a result of the transaction, Eternity BC shareholders own approximately 94.4% of issued and outstanding common stock of the Company on a diluted basis (Note 2).

According, the assets and liabilities of Eternity BC are reported as historical costs and the historical results of operations of Eternity BC are reflected in this and future filings as a change in reporting entity.  The assets and liabilities of the Company are reported at their carrying values, which approximate fair value, on the date of the acquisition and results of operations are reported from the date of acquisition of December 13, 2010.  The transaction was accounted for as a recapitalization of Eternity BC and the issuance of stock by Eternity BC for the assets and liabilities of the Company.  The transaction was accounted for as a recapitalization of Eternity BC and the issuance of stock by Eternity BC for the assets and liabilities of the Company.

The Company is a development stage enterprise, as defined in ASC 915-10 “Development Stage Entities”.  The Company is devoting all of its present efforts in securing and establishing a new business, and its planned principle operations have not commenced, and, accordingly, no revenue has been derived during the organization period.

On May 11, 2010, the Company entered into a distribution and sale agreement (the “Distribution Agreement”) with ValiMedix Limited (“ValiMedix”).
 
On May 3, 2012 the Company entered into marketing agreement with Veda Lab of France and Healthy Europe of Italy to market a series of home based diagnostic kits in North America on Exclusive basis.
 
On June 25, 2012, the Company has entered into exclusive marketing arrangement with Mika Medicals and MK Global of South Korea for marketing of a device known as “Needle free Injection Device” throughout North America.
 
 
F-6

 
 
Eternity Healthcare Inc.
(formerly Kid’s Book Writer Inc.)
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
April 30, 2011 and 2010
(Expressed in U.S. Dollars)

 
1.
NATURE AND CONTINUANCE OF OPERATIONS – continued

Since signing the Distribution Agreement with ValiMedix, the Company has emerged in organizational and start up activities, including developing a new business plan, making arrangements for office space and raising additional capital.  The Company has generated no revenue from product sales and does not have any pharmaceutical products currently available for sale.

The Company’s consolidated financial statements as at April 30, 2012 have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business.  The Company has net loss of $184,650 for the year ended April 30, 2012 (April 30, 2011 - $101,221) and has a working capital deficit of $348,052 as at April 30, 2012 (April 30, 2011 - $151,502).

Management cannot provide assurance that the Company will ultimately achieve profitable operations or become cash flow positive, or raise additional debt and/or equity capital.  Management believes that the Company’s capital resources should be adequate to continue operating and maintaining its business strategy during the fiscal year ending April 30, 2012.  However, if the Company is unable to raise additional capital in the near future, due to the Company’s liquidity problems, management expects that the Company will need to curtail operations, liquidate assets, seek additional capital on less favorable terms and/or pursue other remedial measures.  These consolidated financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

As at April 30, 2011, the Company has suffered losses from development stage activities to date.  Although management is currently attempting to implement its business plan, and is seeking additional sources of equity or debt financing, there is no assurance these activities will be successful.  These factors raise substantial doubt about the ability of the Company to continue as a going concern.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

2.
SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies used in the preparation of these consolidated financial statements.

Basis of presentation
These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and are expressed in U.S. dollars.

Principles of consolidation
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Eternity BC.  All significant intercompany balances and transactions have been eliminated in consolidation.

Cash and cash equivalents
Cash and cash equivalents include highly liquid investments with original maturities of three months or less.

 
F-7

 
 
Eternity Healthcare Inc.
(formerly Kid’s Book Writer Inc.)
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
April 30, 2011 and 2010
(Expressed in U.S. Dollars)

 
2.
SIGNIFICANT ACCOUNTING POLICIES – continued

Foreign currency translation
The Company’s functional currency is the Canadian dollar and reporting currency is the U.S. dollar.  All transactions initiated in other currencies are translated into the reporting currency in accordance with ASC 830, “Foreign Currency Matters” as follows:

iii)  
Assets and liabilities at the rate of exchange in effect at the balance sheet date, and
iv)  
Revenue and expense items at rate of exchange at the dates on which those elements are recognized.

Gains and losses on translation are included in other comprehensive income (loss) in stockholders’ deficiency for the period.

Financial instruments

Fair value
The carrying value of cash and cash equivalents, accounts payable and due to related parties approximate their fair values because of the short-term maturity of these financial instruments.

Interest rate risk
The company is not exposed to significant interest rate risk due to the short-term maturity of its monetary assets and liabilities.

Credit risk
The Company’s operating expenses are primarily incurred in Canadian dollars, and fluctuation of the Canadian dollar in relation to the United States dollar will have an impact upon the profitability of the Company and may also have an effect of the value of the Company’s assets of the value of the Company’s assets.  The Company has not entered into any agreements or purchased any instruments to hedge possible currency risk.  At April 30, 2012 1 United States dollar was equal to 0.98 Canadian dollars.

Currency risk
The Company’s functional and reporting currency is the U.S. dollar.  Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date.  Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income.  Foreign currency transactions are primarily undertaken in Canadian dollars.  The Company has not, to the date of these consolidated financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.

Basic and diluted net income (loss) per share
The Company computes net income (loss) per share in accordance with ASC 260, “Earnings per Share”.  ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement.  Basic EPS is computed by dividing net income (loss) available to common stockholders (numerator) by the weighted average number of shares outstanding (denominator) during the period.  Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method.  In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants.  Diluted EPS excluded all dilutive potential shares if their effect is anti-dilutive.
 
 
F-8

 
 
Eternity Healthcare Inc.
(formerly Kid’s Book Writer Inc.)
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
April 30, 2011 and 2010
(Expressed in U.S. Dollars)

 
2.
SIGNIFICANT ACCOUNTING POLICIES – continued

Income taxes
Deferred income taxes are reported for timing differences between items of income or expense reported in the financial statements and those reported for income tax purposes in accordance with ASC 740, “Income Taxes”, which requires the use of the asset/liability method of accounting for income taxes.  Deferred income taxes and tax benefits are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and for tax losses and credit carry-forwards.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  The Company provides for deferred taxes for the estimated future tax effects attributable to temporary differences and carry-forwards when realization is more likely than not.

Comprehensive loss
ASC 22, “Comprehensive Income”, establishes standards for the reporting and display of comprehensive loss and its components in the financial statements.  As at April 30, 2012, the Company has items that represent a comprehensive income (loss) and, therefore, has included a schedule of comprehensive income (loss) in the financial statements.

Equipment and depreciation
Equipment has been recorded at cost, net of accumulated depreciation (Note 3).  Improvements are capitalized and maintenance, repairs and minor replacements are expensed as incurred.  Depreciation is determined using a straight-line method over its estimated useful life of 36 months for its computer equipment.

Use of estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures during the reporting period.  Actual results could differ from these estimates.

Segments of an enterprise and related information
ASC 280, “Segment Reporting” establishes guidance for the way that public companies report information about operating segments in annual financial statements and requires reporting of selected information about operating segments in interim financial statements issued to the public.  It also establishes standards for disclosures regarding products and services, geographic areas and major customers.  ASC 280 defines operating segments as components of a company about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocated resources and in assessing performance.  The Company has evaluated this Codification and does not believe it is applicable at this time.

Comparative information
Certain comparative figures have been reclassified in accordance with the current period’s presentation.
 
 
F-9

 
 
Eternity Healthcare Inc.
(formerly Kid’s Book Writer Inc.)
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
April 30, 2011 and 2010
(Expressed in U.S. Dollars)

 
2.
SIGNIFICANT ACCOUNTING POLICIES – continued

Recent accounting pronouncements
In May 2011, the FASBE and International Accounting Standards Board (“IASB”) (collectively the “Boards”) issued ASU 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (ASU 2011-04”).  ASU 2011-04 created a uniform framework for applying fair value measurement principles for companies around the world and clarified existing guidance in US GAAP. ASU 2011-04 is effective for the first reporting annual period beginning after December 15, 2011 and shall be applied prospectively.  The Company does not expect this standard to have any material effect on our consolidated financial statements.

In June 2011, the FASB issued ASU No. 2011-05, Comprehensive Income (Topic 220), Presentation of Comprehensive Income. This update is intended to increase the prominence of other comprehensive income in the financial statements by requiring public companies to present comprehensive income either as a single statement detailing the components of net income and total net income, the components of other comprehensive income and total other comprehensive income, and a total for comprehensive income or using a two statement approach including both a statement of income and a statement of comprehensive income. The option to present other comprehensive income in the statement of changes in equity has been eliminated.  The amendments in this update, which should be applied retrospectively, are affective for public companies for fiscal years, and interim periods beginning after December 15, 2011.  The Company does not expect this standard to have any material effect on our consolidated financial statements.

3.
EQUIPMENT

               
Net book value
 
   
Cost
   
Accumulated
depreciation
   
April 30,
2012
   
April 30,
2011
 
                         
Computer equipment
  $ 727     $ 324     $ 404     $ 647  


4.
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities are non-interest bearing, unsecured and have settlement dates within one year.

5.
DUE TO RELATED PARTIES AND RELATED PARTY TRANSACTIONS

i.  
During the fiscal year ended April 30, 2012, the Company received $372,451 in additional cash loans from a related party of the Company. Total related party notes payable as of April 30, 2012 were $582,081. This balance is non-interest bearing, unsecured and has no fixed terms of repayment.

 
F-10

 

Eternity Healthcare Inc.
(formerly Kid’s Book Writer Inc.)
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
April 30, 2011 and 2010
(Expressed in U.S. Dollars)

 
6.
CAPITAL STOCK

Authorized
The total authorized capital is 300,000,000 common shares with a par value of $0.001 per common share.

Issued and outstanding
Effective on November 1, 2010, the Board of Directors approved a 1:10 reverse stock split and decreased the issued and outstanding share capital from 35,750,000 to 3,575,000 with the same par value of $0.001 per share.  Unless otherwise noted, all references herein to the number of common shares, price per common share or weighted average number of common shares outstanding have been adjusted to reflect this reverse stock split on a retroactive basis.

On December 13, 2010, the Company issued 60,000,000 common shares of the Company with a value of $60,000 related to the Share Exchange Transaction (Note 1).

7.
COMMITMENTS AND CONTINGENCIES

On March 11, 2010, the Company entered into a Distribution Agreement with ValiMedix (Note 1).

The basic terms of the Distribution Agreement are as follows:

 
i.
ValiMedix has granted exclusive distribution rights to the Company to distribute, market, promote, advertise and sell the Licensed Products, as defined in the Distribution Agreement, which consists of In Vitro diagnostic products, exclusively in Canada and non-exclusively in the United States;

 
ii.
The Company paid ValiMedix $10,000 upon the signing of the Distribution Agreement;

 
iii.
The Company is required to pay ValiMedix a 3% royalty on net sales of the Licensed Products as set out in the Distribution Agreement;

 
iv.
ValiMedix will supply all Licensed Products to the Company under the Distribution Agreement;
 
 
F-11

 
 
Eternity Healthcare Inc.
(formerly Kid’s Book Writer Inc.)
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
April 30, 2011 and 2010
(Expressed in U.S. Dollars)

 
7.
COMMITMENTS AND CONTINGENCIES - continued

 
v.
ValiMedix is responsible for all liabilities in respect to the Licensed Products for any and all matters arising out of the manufacturing of the Licensed Products; and

 
vi.
The Distribution Agreement shall remain in effect for a period of 20 years from the Commencement Date and may be renewed for an additional 10 year term provided that the Company meets its minimum purchase quota.  The Company may further renew the Distribution Agreement for successive one year terms, unless at least 30 days prior to the renewal date, as defined in the Distribution Agreement, the Company notifies ValiMedix that it elects not to permit the extension of the term.

8.
INCOME TAXES

The Company has losses carried forward for income tax purposes to April 30, 2011.  There are no current or deferred tax expenses for the year month period ended April 30, 2011 due to the Company’s loss position.  The Company has fully reserved for any benefits of these losses.  The deferred tax consequences of temporary differences in reporting items for financial statement and income tax purposes are recognized, as appropriate.  Realization of the future tax benefits related to the deferred tax assets is dependent on many factors, including the Company’s ability to generate taxable income within the net operating loss carryforward period.  Management has considered these factors in reaching its conclusion as to the valuation allowance for financial reporting purposes.

The provisions for refundable federal income tax consists of the following:

   
For the
year ended April 30,
2012
   
For the
year ended April 30,
2011
 
             
Deferred tax asset attributable to:
           
Current operations
  $ 30,045     $ 30,842  
Non-deductible items
          (23 )
Change in tax rates
    (2,295 )     (2,564 )
Change in valuation allowance
    (27,750 )     (28,255 )
                 
Net refundable amount
  $     $ -  
 
 
F-12

 
 
Eternity Healthcare Inc.
(formerly Kid’s Book Writer Inc.)
(A Development Stage Company)
CONSOLIDATED BALANCE SHEET
April 30, 2011 and 2010
(Expressed in U.S. Dollars)

 
8.
INCOME TAXES- continued

The composition of the company’s deferred tax assets as at April 30, 2012 and April 30, 2011 is as follows:

   
April 30, 2012
   
April 30, 2011
 
             
Net operating loss carryforward
  $ 83,900     $ 36,001  
Equipment
    20       20  
                 
Less:  Valuation allowance
    (83,920 )     (36,021 )
                 
    $ -     $ -  

9.
SUBSEQUENT EVENTS

There are no subsequent events to be reported that occurred during the period from the year ended April 30, 2012 to the date the financial statements were available
 
 
F-13

 
 
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
 
On June 30, 2011, our company formally informed James Stafford, Inc. of their dismissal as our company’s independent registered public accounting firm.  The reports of James Stafford, Inc. on our consolidated financial statements as of and for the period from December 10, 2009 (inception) to April 30, 2011, contained no adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principle except to indicate that there was substantial doubt about our company ability to continue as a going concern.
 
Our board of directors participated in and approved the decision to change independent registered public accounting firms.
 
During the period from December 10, 2009 (inception) to April 30, 2011, and through June 30, 2011, there have been no disagreements with James Stafford, Inc. on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements if not resolved to the satisfaction of James Stafford, Inc. would have caused them to make reference thereto in connection with their report on the financial statements for such years.
 
On June 30, 2011, our company engaged Sadler, Gibb & Associates, LLC as our new independent registered public accounting firm.  During the two most recent fiscal years and through June 30, 2011, our company had not consulted with Sadler, Gibb & Associates, LLC regarding any of the following:
 
1.  
The application of accounting principles to a specific transaction, either completed or proposed;
 
2.  
The type of audit opinion that might be rendered on our company’s consolidated financial statements, and none of the following was provided to our company:  (a) a written report, or (b) oral advice that Sadler, Gibb & Associates, LLC concluded was an important factor considered by our company in reaching a decision as to accounting, auditing or financial reporting issue; or
 
3.  
Any matter that was subject of a disagreement, as that term is defined in Item 304(a)(1)(iv) of Regulation S-K.
 
Controls and Procedures
 
Our management, with the participation of our president and chief financial officer (our principal executive officer, principal financial officer and principal accounting officer), evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on this evaluation, our president and chief financial officer (our principal executive officer, principal financial officer and principal accounting officer) concluded that, as of the end of such period, our disclosure controls and procedures were not effective to ensure that information that is required to be disclosed by us in the reports we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our president and chief financial officer (our principal executive officer, principal financial officer and principal accounting officer), as appropriate, to allow timely decisions regarding required disclosure. The reasons for this finding were the weaknesses in our internal control over financial reporting enumerated below.
 
 
21

 
 
Management’s Annual Report on Internal Control over Financial Reporting
 
Our management is responsible for establishing and maintaining adequate internal control over financial reporting.  Our chief executive officer and chief financial officer (our principal executive officer, principal financial officer and principal accounting officer) conducted an evaluation of the effectiveness of our internal control over financial reporting as of April 30, 2012 using the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
 
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our company’s annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control over financial reporting as of April 30, 2012, our company determined that there were control deficiencies that constituted material weaknesses, as described below:
 
  
There is a lack of accounting personnel with the requisite knowledge of Generally Accepted Accounting Principles in the US (“GAAP”) and the financial reporting requirements of the Securities and Exchange Commission
  
There are insufficient written policies and procedures to insure the correct application of accounting and financial reporting with respect to the current requirements of GAAP and SEC disclosure requirements; and
  
There is a lack of segregation of duties, in that we only had one person performing all accounting-related duties.
 
Notwithstanding the existence of these material weaknesses in our internal control over financial reporting, our management believes that the consolidated financial statements included in its reports fairly present in all material respects our company’s financial condition, results of operations and cash flows for the periods presented.
 
Our company will continue its assessment on a quarterly basis and as soon as we start operations we plan to hire personnel and resources to address these material weaknesses. We believe these issues can be solved with hiring in-house accounting support and plan to do so as soon as we have funds available for this.   There has been no change in its internal control over financial reporting that occurred during our company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our company’s internal control over financial reporting.
 
Sadler, Gibb & Associates, LLC, our independent registered public auditors, was not required to and has not issued an attestation report concerning the effectiveness of our internal control over financial reporting as of April 30, 2012 pursuant to temporary rules of the Securities and Exchange Commission that permit our company to provide only management’s report in this annual report.
 
Changes in Internal Controls
 
During the period ended April 30, 2012, there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
 
Other Information
 
None.
 
 
22

 
 
PART III
 
Directors, Executive Officers and Corporate Governance
 
All directors of our company hold office until the next annual meeting of the security holders 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:
 
Name
Position Held with our company
Age
Date First Elected or Appointed
Francine Salari
President, Chief Executive Officer, Chief Financial Officer, Treasurer, Secretary and Director
54
December 13, 2010
Hassan Salari
Director
58
March 16, 2010
 
Business Experience
 
The following is a brief account of the education and business experience during at least the past five years of each director, executive officer and key employee of our company, indicating the person’s principal occupation during that period, and the name and principal business of the organization in which such occupation and employment were carried out.
 
Francine Salari, President, Chief Executive Officer, Chief Financial Officer, Treasurer, Secretary and Director
 
Mrs. Salari obtained her accounting diploma from Quebec, Canada. She worked for 10 years as an accounting and financial advisor with the National Bank of Canada in Montreal. She further worked at the Continental bank in the capacity of Personal banking and client response team member for 3 years. From 1990 to1993 she was the Financial Controller at Inflazyme Pharmaceuticals in Vancouver, Canada. From 1996 to 2000 she worked as controller and accountant at Neovie Biotechnology and PTM Molecular, as PTM changed its name to Chemokine Therapeutics Corp., and was listed publicly.  From 2000 to 2009 she was the Financial Controller at Posh Cosmeceuticals Inc.  She retired in 2009 and consulted for Eternity BC.  Her experience in the finance and pharmaceutical industries are the reasons we have appointed her to our board of directors.
 
Hassan Salari, Director
 
Hassan Salari is an entrepreneur and scientist. Dr. Salari has over 25 years’ experience in the biotechnology field, specializing in highly sophisticated research and drug development programs and business development.
 
Currently, Dr. Salari is the Chairman, of Kedem Pharmaceuticals Inc, formerly, Global Health Ventures Inc., a company traded on the OTC Bulletin Board (OTCBB: KDMP).   Prior to that, Dr. Salari was a director of Pacgen Biopharmaceuticals Inc., a public company with its shares listed on the TSX Venture Exchange. From 1998 to 2007, Dr. Salari was the chief executive officer and president of Chemokine Therapeutics Corp., a company established as a focused biotechnology company to develop chemokine-based therapeutic products for human diseases. Chemokine was a public company listed on OTC Bulletin Board and the TSX. From 1992 to 1998, Dr. Salari was the chief executive officer and president of Inflazyme Pharmaceuticals Ltd., a company founded by Dr. Salari. Dr. Salari maintained the responsibility of managing the company’s business affairs as well as its drug discovery and development programs (focused on allergies and asthma). While there, he negotiated and closed several licensing deals with biotechnology and pharmaceutical companies.
 
 
23

 
 
From 1991 to 1998, Dr. Salari was a Professor, Department of Medicine at the University of British Columbia. From 1987 to 1990, he was an Assistant Professor at the University of British Columbia. From 1986 to 1987, he was a research associate in the Department of Medicine at the University of British Columbia. He was the lead project investigator in cytokine research and drug development. From 1984 to 1986, he worked as a research associate at the Department of Physiology, Laval University. Dr. Salari carried out research work on the biology of human blood cells and their control by cytokines. From 1981 to 1982, Dr. Salari worked at the Department of Immunology at McGill University in Montreal as a research associate. He is the author of over 200 scientific articles, abstracts and books in various subjects of medicine.
 
Family Relationships
 
Hassan Salari and Francine Salari are husband and wife.  Mr. Salari is our director and Mrs. Salari is our sole officer and also a member of our board of directors.
 
Conflicts of Interest
 
Our directors are not obligated to commit their full time and attention to our business and, accordingly, they may encounter a conflict of interest in allocating their time between our operations and those of other businesses.  In the course of their other business activities, they may become aware of investment and business opportunities which may be appropriate for presentation to us as well as other entities to which they owe a fiduciary duty.  As a result, they may have conflicts of interest in determining to which entity a particular business opportunity should be presented.  They may also in the future become affiliated with entities that are engaged in business activities similar to those we intend to conduct.
 
In general, officers and directors of a corporation are required to present business opportunities to the corporation if:
 
  
the corporation could financially undertake the opportunity;
  
the opportunity is within the corporation’s line of business; and
  
it would be unfair to the corporation and its stockholders not to bring the opportunity to the attention of the corporation.
 
We have adopted a code of ethics that obligates our directors, officers and employees to disclose potential conflicts of interest and prohibits those persons from engaging in such transactions without our consent.
 
Involvement in Certain Legal Proceedings
 
To the best of our knowledge, none of our directors or executive officers has, during the past ten years:
 
1.  
been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offences);

2.  
had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time;

3.  
been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity;
 
 
24

 
 
4.  
been found by a court of competent jurisdiction in a civil action or by the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;

5.  
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 (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, 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 any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

6.  
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.
 
Compliance with Section 16(a) of the Securities Exchange Act of 1934
 
Section 16(a) of the Securities Exchange Act of 1934 requires our executive officers and directors and persons who own more than 10% of our common stock to file with the Securities and Exchange Commission initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of our common stock and other equity securities, on Forms 3, 4 and 5 respectively. Executive officers, directors and greater than 10% shareholders are required by the SEC regulations to furnish us with copies of all Section 16(a) reports that they file.
 
Based solely on the reports received by our company and on written representations from certain reporting persons, we believe that the directors, executive officers and persons who beneficially own more than 10% of our company’s common stock during the fiscal year ended April 30, 2012 have been in compliance with Section 16(a).
 
Code of Ethics
 
We have adopted a Code of Ethics that applies to, among other persons, members of our board of directors, our company's officers including our president, chief executive officer and chief financial officer, employees, consultants and advisors.
 
We believe our code of ethics is reasonably designed to deter wrongdoing and promote honest and ethical conduct; provide full, fair, accurate, timely and understandable disclosure in public reports; comply with applicable laws; ensure prompt internal reporting of code violations; and provide accountability for adherence to the code.
 
Our Code of Ethics is attached as Exhibit 14.1 to our Annual Report on Form 10-K for our year ended April 30, 2012. We will provide a copy of the Code of Business Conduct and Ethics to any person without charge, upon request. Requests can be sent to: Eternity Healthcare Inc., 8755 Ash Street, Suite 1, Vancouver, BC V6P 6T3.
 
Committees of the Board
 
All proceedings of our board of directors were conducted by resolutions consented to in writing by all the directors and filed with the minutes of the proceedings of the directors. Such resolutions consented to in writing by the directors entitled to vote on that resolution at a meeting of the directors are, according to the corporate laws of the state of Nevada and the bylaws of our company, as valid and effective as if they had been passed at a meeting of the directors duly called and held.
 
 
25

 
 
Our audit committee consists of our entire board of directors.
 
Our company currently does not have nominating, compensation committees or committees performing similar functions nor does our company have a written nominating, compensation or audit committee charter. Our board of directors does not believe that it is necessary to have such committees because it believes that the functions of such committees can be adequately performed by our directors.
 
Our company does not have any defined policy or procedure requirements for shareholders to submit recommendations or nominations for directors. The directors believe that, given the early stage of our development, a specific nominating policy would be premature and of little assistance until our business operations develop to a more advanced level. Our company does not currently have any specific or minimum criteria for the election of nominees to the board of directors and we do not have any specific process or procedure for evaluating such nominees. Our directors assess all candidates, whether submitted by management or shareholders, and make recommendations for election or appointment.
 
A shareholder who wishes to communicate with our board of directors may do so by directing a written request addressed to our President, at the address appearing on the first page of this annual report.
 
Audit Committee and Audit Committee Financial Expert
 
Our board of directors has determined that none of the members of our audit committee qualifies as an "audit committee financial expert" as defined in Item 407(d)(5)(ii) of Regulation S-K, and is "independent" as the term is used in Item 7(d)(3)(iv) of Schedule 14A under the Securities Exchange Act of 1934, as amended.
 
We believe that the members of our board of directors are collectively capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting. We believe that retaining an independent director who would qualify as an "audit committee financial expert" would be overly costly and burdensome and is not warranted in our circumstances given the early stages of our development and the fact that we have not generated any material revenues to date. In addition, we currently do not have nominating, compensation or audit committees or committees performing similar functions nor do we have a written nominating, compensation or audit committee charter. Our board of directors does not believe that it is necessary to have such committees because it believes the functions of such committees can be adequately performed by our board of directors.
 
Executive Compensation
 
The particulars of the compensation paid to the following persons:
 
  
our principal executive officer;
  
each of our two most highly compensated executive officers who were serving as executive officers at the end of the years ended April 30, 2012 and 2011; and
  
up to two additional individuals for whom disclosure would have been provided under (b) but for the fact that the individual was not serving as our executive officer at the end of the years ended April 30, 2012 and 2011,
 
who we will collectively refer to as the named executive officers of our company, are set out in the following summary compensation table, except that no disclosure is provided for any named executive officer, other than our principal executive officers, whose total compensation did not exceed $100,000 for the respective fiscal year:
 
 
26

 
 
SUMMARY COMPENSATION TABLE
Name
and Principal Position
Year
Salary
($)
Bonus
($)
Stock Awards
($)
Option Awards
($)
Non-Equity Incentive Plan Compensation
($)
Change in Pension
Value and Nonqualified Deferred Compensation Earnings
($)
All
Other Compensation
($)
Total
($)
Francine Salari(1)
President, Chief Executive Officer, Chief Financial Officer, Treasurer, Secretary and Director
2012
2011
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Hassan Salari(2)
Director and Former President
2012
2011
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil

(1)
Mrs. Salari was appointed chief executive officer, chief financial officer, treasurer, secretary and director of our company on December 13, 2010.
 
(2)
Mr. Salari was appointed president and director on March 16, 2010 and resigned as president of our company on December 13, 2010.
 
Other than as set out below, there are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. Our directors and executive officers may receive share options at the discretion of our board of directors in the future. We do not have any material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that share options may be granted at the discretion of our board of directors.
 
Stock Option Plan
 
Currently, we do not have a stock option plan in favor of any director, officer, consultant or employee of our company.
 
Stock Options/SAR Grants
 
No equity or non-equity awards were granted to our named executives during the year ended April 30, 2012.
 
Outstanding Equity Awards at Fiscal Year End
 
There were no equity awards outstanding as at April 30, 2012.
 
Option Exercises
 
During our fiscal year ended April 30, 2012 there were no options exercised by our named officers.
 
 
27

 
 
Compensation of Directors
 
We do not have any agreements for compensating our directors for their services in their capacity as directors, although such directors are expected in the future to receive stock options to purchase shares of our common stock as awarded by our board of directors.
 
We have determined that we do not have an independent director, as that term is used in Item 7(d)(3)(iv)(B) of Schedule 14A under the Securities Exchange Act of 1934, as amended, and as defined by Rule 4200(a)(15) of the NASDAQ Marketplace Rules.
 
Pension, Retirement or Similar Benefit Plans
 
There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. We have no material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of the board of directors or a committee thereof.
 
Indebtedness of Directors, Senior Officers, Executive Officers and Other Management
 
None of our directors or executive officers or any associate or affiliate of our company during the last two fiscal years, is or has been indebted to our company by way of guarantee, support agreement, letter of credit or other similar agreement or understanding currently outstanding.
 
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
 
The following table sets forth, as of July 16, 2012, certain information with respect to the beneficial ownership of our common shares by each shareholder known by us to be the beneficial owner of more than 5% of our common shares, as well as by each of our current directors and executive officers as a group. Each person has sole voting and investment power with respect to the shares of common stock, except as otherwise indicated. Beneficial ownership consists of a direct interest in the shares of common stock, except as otherwise indicated.
 
Name and Address of Beneficial Owner
Amount and Nature of
Beneficial Ownership
Percentage of Class(1)
Francine Salari
1517 West 58 Avenue
Vancouver  BC  V6P 6T3
19,000,005 Common
29.886%
     
Hassan Salari
1517 West 58 Avenue
Vancouver  BC  V6P 6T3
33,290,000 Common
51.395%
     
Directors and Executive Officers as a Group
52,290,005 Common
82.249%
     
Frederik Salari
8326 – 110 Street
Delta  BC  V4C 4J5
3,999,995 Common
6.292%
     
Julian Salari
11 – 7400 Minoru Blvd
Richmond, BC  V6Y 3J5
4,174,995 Common
6.567%
 
(1)  
Based on 63,575,000 shares of common stock issued and outstanding as of July 16, 2012.  Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting and investment power with respect to securities.  Except as otherwise indicated, we believe that the beneficial owners of the common stock listed above, based on information furnished by such owners, have sole investment and voting power with respect to such shares, subject to community property laws where applicable.
 
 
28

 
 
Changes in Control
 
We are unaware of any contract or other arrangement or provisions of our Articles or Bylaws the operation of which may at a subsequent date result in a change of control of our company.  There are not any provisions in our Articles or Bylaws, the operation of which would delay, defer, or prevent a change in control of our company.
 
Certain Relationships and Related Transactions, and Director Independence
 
Except as disclosed herein, no director, executive officer, shareholder holding at least 5% of shares of our common stock, or any family member thereof, had any material interest, direct or indirect, in any transaction, or proposed transaction since the year ended April 30, 2012, in which the amount involved in the transaction exceeded or exceeds the lesser of $120,000 or one percent of the average of our total assets at the year-end for the last three completed fiscal years.
 
On December 13, 2010, pursuant to the closing of the Share Exchange, we issued 30,000,000 shares of our common stock to Hassan Salari, our director and 30,000,000 shares to Francine Salari, our president, chief executive officer and director.
 
As at April 30, 2012, $582,081 is payable to a related party of our company related to operating expenses paid on behalf of the company (April 30, 2011 –$197,416).  This balance is non-interest bearing, unsecured and has no fixed terms of repayment.
 
As at April 30, 2012, $Nil is receivable from a company controlled by the chief executive officer of our company related to operating expenses paid by our company on its behalf (April 30, 2011 - $Nil).  This balance is non-interest bearing, unsecured and has no fixed terms of repayment.
 
Director Independence
 
We currently act with two directors, consisting of Hassan Salari and Francine Salari.  We have determined that we do not have a director that would qualify as an “independent director” as defined by Nasdaq Marketplace Rule 4200(a)(15).
 
We do not have a standing audit, compensation or nominating committee, but our entire board of directors acts in such capacities. We believe that our board of directors is capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting. The board of directors of our company does not believe that it is necessary to have a standing audit, compensation or nominating committee because we believe that the functions of such committees can be adequately performed by the board of directors.  Additionally, we believe that retaining an independent director who would qualify as an “audit committee financial expert” would be overly costly and burdensome and is not warranted in our circumstances given the early stages of our development. 
 
 
29

 
 
Principal Accounting Fees and Services
 
The aggregate fees billed for the most recently completed fiscal year ended April 30, 2012 and for the fiscal year ended April 30, 2011 for professional services rendered by the principal accountant for the audit of our annual financial statements and review of the 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:
 
 
Year Ended
 
April 30, 2012
$
April 30, 2011
$
Audit Fees
9,500
5,000
Audit Related Fees
Nil
Nil
Tax Fees
Nil
Nil
All Other Fees
Nil
Nil
Total
9,500
5,000
 
Our board of directors pre-approves all services provided by our independent auditors. All of the above services and fees were reviewed and approved by the 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 our independent auditors and believes that the provision of services for activities unrelated to the audit is compatible with maintaining our independent auditors’ independence.
 
PART IV
 
Exhibits, Financial Statement Schedules
 
(a) 
Financial Statements
(1)  Financial statements for our company are listed in the index under Item 8 of this document
(2)  All financial statement schedules are omitted because they are not applicable, not material or the required information is shown in the financial statements or notes thereto.
 
(b) 
Exhibits
 
Exhibit No.
Document Description
(2)
Plan of acquisition, reorganization, arrangement, liquidation or succession
2.1
Share Exchange Agreement with Eternity Healthcare Inc., dated December 13, 2010 (incorporated by reference to our Current Report on Form 8-K filed on December 17, 2010).
(3)
(i) Articles of Incorporation; (ii) By-laws
3.1
Articles of Incorporation (incorporated by reference to our C Registration Statement on Form S-1 filed on June 25, 2008).
3.2
By-laws (incorporated by reference to our Registration Statement on Form S-1 filed on June 25, 2008).
3.3
Certificate of Amendment filed with the Nevada Secretary of State on November 1, 2010 (incorporated by reference to our Current Report on Form 8-K filed on November 16, 2010).
(10)
Material Contracts
10.1
Licensing Agreement with Valimedix Limited, dated March 11, 2010 (incorporated by reference to our Current Report on Form 8-K filed on December 17, 2010).
 
 
30

 
 
10.2*
Marketing and Distribution Agreement date May 3, 2012 between our company, Healthy Europe and Veda Lab.
10.3*
Revised Distribution Agreement dated June 25, 2012 between our company, our subsidiary, MK Global Co. and MIKA Medical Co.
(14)
Code of Ethics
14.1*
Code of Business Conduct and Ethics
(31)
Rule 13a-14(a)/15d-14(a) Certifications
31.1*
Section 302 Certifications under Sarbanes-Oxley Act of 2002
(32)
Section 1350 Certifications
32.1*
Section 906 Certifications under Sarbanes-Oxley Act of 2002
101**
Interactive Data File (Form 10-K for the year ended April 30, 2012 furnished in XBRL)
101.INS XBRL Instance Document
101.SCH XBRL Taxonomy Extension Schema Document
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF XBRL Taxonomy Extension Definition Linkbase Document
101.LAB XBRL Taxonomy Extension Label Linkbase Document
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document
 
*
Filed herewith.
 
**
Furnished herewith. Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of any registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, and otherwise are not subject to liability under those sections.
 
 
31

 
 
SIGNATURES
 
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
   
ETERNITY HEALTHCARE INC.
   
(Registrant)
     
Dated:  July 19, 2012
 
/s/ Francine Salari
   
Francine Salari
   
President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and Director
   
(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)
 
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
 
Dated:  July 19, 2012
 
/s/ Francine Salari
   
Francine Salari
   
President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and Director
   
(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)
     
Dated:  July 19, 2012
 
/s/ Hassan Salari
   
Hassan Salari
   
Director
     
 
32


 

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