Document:

enhanceskinexh10_5.htm

Exhibit 10.5

 

 

SEALE AND BEERS, CPAs 

PCAOB & CPAB REGISTERED AUDITORS

www.sealebeers.com

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

Enhance Skin Products Inc.

We have audited the accompanying balance sheets of Enhance Skin Products Inc. as of April 30, 2008 and 2007, and the related statements of operations, stockholders’ equity (deficit) and cash flows for the years ended April 30, 2008 and 2007. These financial statements are the responsibility of the Company’s management.  Our
responsibility is to express an opinion on these financial statements based on our audits.

We conduct our audits in accordance with 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.  An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Enhance Skin Products Inc. as of April 30, 2008 and 2007, and the related statements of operations, stockholders’ equity (deficit) and cash flows for the years ended April 30, 2008 and 2007, in conformity
with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 4 to the financial statements, the Company has net losses for the year ended April 30, 2008 of $207,809, which raises substantial doubt about its ability to continue as a going concern.  Management’s
plans concerning these matters are also described in Note 4. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Seale and Beers, CPAs

Seale and Beers, CPAs

Las Vegas, Nevada

October 23, 2009

50 S. Jones Blvd. Suite 202 Las Vegas, NV 89107 Phone: (888)727-8251 Fax: (888)782-2351

  

1

  

	
ENHANCE SKIN PRODUCTS INC.
	 
	  	  	 	 	 	 	 	 
	
BALANCE SHEETS
	 
	  	  	 	 	 	 	 	 
	  	  	 	
April 30
	 	 	
April 30
	 
	  	  	 	
2008
	 	 	
2007
	 
	  	  	 	 	 	 	 	 
	
ASSETS
	 	 	 	 	 	 
	
Current
	 	 	 	 	 	 
	
Sales tax receivable
	 	$	776	 	 	$	4,026	 
	
Deposits
	 	 	1,339	 	 	 	784	 
	  	  	 	 	 	 	 	 	 	 
	  	
Total current assets
	 	 	2,115	 	 	 	4,810	 
	  	  	 	 	 	 	 	 	 	 
	
Other assets
	 	 	 	 	 	 	 	 
	
Patent applications
	 	 	6,966	 	 	 	269	 
	
Trademarks
	 	 	46,395	 	 	 	42,118	 
	  	  	 	 	 	 	 	 	 	 
	  	
Total other assets
	 	 	53,361	 	 	 	42,387	 
	  	  	 	 	 	 	 	 	 	 
	
Total assets
	 	$	55,476	 	 	$	47,197	 
	  	  	 	 	 	 	 	 	 	 
	  	  	 	 	 	 	 	 	 	 
	
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
	 	 	 	 	 	 	 	 
	
Current liabilities
	 	 	 	 	 	 	 	 
	
Bank indebtedness
	 	$	3,088	 	 	$	2,273	 
	
Accounts payable and accrued liabilities
	 	 	-	 	 	 	1,345	 
	
Current portion of long term debt
	 	 	17,042	 	 	 	17,729	 
	  	  	 	 	 	 	 	 	 	 
	  	
Total current liabilities
	 	 	20,130	 	 	 	21,347	 
	  	  	 	 	 	 	 	 	 	 
	
Long-term bank indebtedness, net of current portion
	 	 	24,119	 	 	 	42,668	 
	  	  	 	 	 	 	 	 	 	 
	  	  	 	 	 	 	 	 	 	 
	
Stockholders equity (deficit)
	 	 	 	 	 	 	 	 
	
Authorized:
	 	 	 	 	 	 	 	 
	  	
unlimited number of shares without nominal or par value
	 	 	 	 	 	 	 	 
	
Issued and outstanding 10 as of
	 	 	 	 	 	 	 	 
	  	
April 30, 2008 and April 30, 2007
	 	 	90	 	 	 	90	 
	
Additional paid-in capital
	 	 	222,687	 	 	 	156,368	 
	
Translation adjustment
	 	 	(3,741	)	 	 	(1,755	)
	
Retained Deficit
	 	 	(207,809	)	 	 	(171,521	)
	  	  	 	 	 	 	 	 	 	 
	
Total stockholders' equity (deficit)
	 	 	11,227	 	 	 	(16,818	)
	  	  	 	 	 	 	 	 	 	 
	
Total liabilities and stockholders' equity (deficit)
	 	$	55,476	 	 	$	47,197	 

 

 

The accompanying notes are an integral part of these financial statements.

  

2

  

 

	
ENHANCE SKIN PRODUCTS INC.
	 
	  	 	 	 	 	 	 
	
STATEMENTS OF OPERATIONS
	 
	
For the Years ending April 30, 2008, and April 30, 2007
	 
	  	 	 	 	 	 	 
	  	 	
April 30,
	 	 	
April 30,
	 
	  	 	
2008
	 	 	
2007
	 
	  	 	 	 	 	 	 
	
Revenue
	 	$	8,229	 	 	$	-	 
	  	 	 	 	 	 	 	 	 
	
Cost of goods sold
	 	 	1,844	 	 	 	-	 
	  	 	 	 	 	 	 	 	 
	
Gross profit
	 	 	6,385	 	 	 	-	 
	  	 	 	 	 	 	 	 	 
	
EXPENSES
	 	 	 	 	 	 	 	 
	
Operating expenses
	 	 	 	 	 	 	 	 
	
General & administrative
	 	 	17,118	 	 	 	19,869	 
	
Professional fees
	 	 	14,042	 	 	 	7,804	 
	
Development
	 	 	5,407	 	 	 	54,111	 
	
Amortization of trademark
	 	 	-	 	 	 	5,311	 
	
Marketing
	 	 	985	 	 	 	-	 
	  	 	 	 	 	 	 	 	 
	  	 	 	37,552	 	 	 	87,095	 
	  	 	 	 	 	 	 	 	 
	
Net loss before other items
	 	 	(31,167	)	 	 	(87,095	)
	  	 	 	 	 	 	 	 	 
	
Other items
	 	 	 	 	 	 	 	 
	
Interest on long term debt
	 	 	5,121	 	 	 	6,711	 
	  	 	 	 	 	 	 	 	 
	
Net loss before income taxes
	 	 	(36,288	)	 	 	(93,806	)
	  	 	 	 	 	 	 	 	 
	
Provision for income taxes
	 	 	-	 	 	 	-	 
	  	 	 	 	 	 	 	 	 
	
Net loss
	 	$	(36,288	)	 	$	(93,806	)
	  	 	 	 	 	 	 	 	 
	
Basic and diluted loss per common share
	 	$	(3,628.80	)	 	$	(9,380.60	)
	  	 	 	 	 	 	 	 	 
	Weighted average number of common shares outstanding	 	 	10	 	 	 	10 	 

	 

 	 

 	 

 	 

 	 

 	 

 	 
	 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

3

 

 

	
ENHANCE SKIN PRODUCTS INC.
	 
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
STATEMENT OF STOCKHOLDERS' EQUITY
	 
	
For the Years ending April 30, 2008, and April 30, 2007
	 
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	
Deficit
	 	 	 	 
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	
Accumulated
	 	 	 
	  	 	 	 	 	 	 	 	
Additional
	 	 	 	 	 	
During the
	 	 	
Total
	 
	  	 	
Common Stock
	 	 	
paid in
	 	 	
Translation
	 	
Development
	 	
Stockholders
	 
	  	 	
Shares
	 	 	
Amount
	 	 	
Capital
	 	 	
Adjustment
	 	
Stage
	 	 	
Equity
	 
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
Balance April 30, 2006
	 	 	10	 	 	$	90	 	 	$	95,151	 	 	$	-	 	 	$	(77,715	)	 	$	17,526	 
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
Contribution to APIC
	 	 	 	 	 	 	 	 	 	 	61,217	 	 	 	 	 	 	 	 	 	 	 	61,217	 
	
Increase (decrease) in translation 

adjustment
	 	 	 	 	 	 	 	 	 	 	(1,755	)	 	 	 	 	 	 	(1,755	)
	
Net loss for the year
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(93,806	)	 	 	(93,806	)
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
Balance April 30, 2008
	 	 	10	 	 	 	90	 	 	 	156,368	 	 	 	(1,755	)	 	 	(171,521	)	 	 	(16,818	)
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
Contribution to APIC
	 	 	 	 	 	 	 	 	 	 	66,319	 	 	 	 	 	 	 	 	 	 	 	66,319	 
	
Increase (decrease) in translation 

adjustment
	 	 	 	 	 	 	 	 	 	 	(1,986	)	 	 	 	 	 	 	(1,986	)
	
Net loss for the  period
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(36,288	)	 	 	(36,288	)
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
Balance April 30, 2009
	 	 	10	 	 	$	90	 	 	$	222,687	 	 	$	(3,741	)	 	$	(207,809	)	 	$	11,227	 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

4

 

 

	
ENHANCE SKIN PRODUCTS INC.
	 
	  	 	 	 	 	 	 
	
STATEMENTS OF CASH FLOWS
	 
	
For the Years ending April 30, 2008, and April 30, 2007
	 
	  	 	 	 	 	 	 
	  	 	
April 30,
	 	 	
April 30,
	 
	  	 	
2008
	 	 	
2007
	 
	  	 	 	 	 	 	 
	
CASH FLOWS FROM OPERATING ACTIVITIES
	 	 	 	 	 	 
	
Net loss for the period
	 	$	(36,288	)	 	$	(93,806	)
	
add non cash item amortization
	 	 	-	 	 	 	5,311	 
	
Changes in operating assets and liabilities:
	 	 	 	 	 	 	 	 
	
Sales tax receivable
	 	 	3,250	 	 	 	(1,846	)
	
Prepaids & deposits
	 	 	(555	)	 	 	9,309	 
	
Inventory
	 	 	-	 	 	 	32,753	 
	
Accounts payable and accrued liabilities
	 	 	(1,344	)	 	 	673	 
	  	 	 	 	 	 	 	 	 
	
Cash flows from operating activities
	 	 	(34,937	)	 	 	(47,606	)
	  	 	 	 	 	 	 	 	 
	  	 	 	 	 	 	 	 	 
	
CASH FLOWS FROM INVESTING ACTIVITIES
	 	 	 	 	 	 	 	 
	
Patent applications
	 	 	(6,697	)	 	 	(269	)
	
Disposal of computers
	 	 	-	 	 	 	6,357	 
	  	 	 	 	 	 	 	 	 
	
Cash flows from investing activities
	 	 	(6,697	)	 	 	6,088	 
	  	 	 	 	 	 	 	 	 
	  	 	 	 	 	 	 	 	 
	
CASH FLOWS FROM FINANCING ACTIVITIES
	 	 	 	 	 	 	 	 
	
Additional paid in capital
	 	 	66,319	 	 	 	61,218	 
	
Payment of loans
	 	 	(19,236	)	 	 	(23,602	)
	  	 	 	 	 	 	 	 	 
	
Cash flows from financing activities
	 	 	47,083	 	 	 	37,616	 
	  	 	 	 	 	 	 	 	 
	  	 	 	 	 	 	 	 	 
	
NET INCREASE (DECREASE) IN CASH
	 	 	5,449	 	 	 	(3,902	)
	
Effect of foreign currency translation adjustments
	 	 	(6,264	)	 	 	(1,676	)
	  	 	 	 	 	 	 	 	 
	
Cash, beginning of the period
	 	 	(2,273	)	 	 	3,305	 
	  	 	 	 	 	 	 	 	 
	
Cash, end of the period
	 	$	(3,088	)	 	$	(2,273	)
	  	 	 	 	 	 	 	 	 
	
Supplemental disclosure with respect to cash flows:
	 	 	 	 	 	 	 	 
	
Cash paid for income taxes
	 	$	-	 	 	$	-	 
	
Cash paid for interest
	 	$	5,121	 	 	$	6,711	 

 

 

The accompanying notes are an integral part of these financial statements.

 

  

5

  

ENHANCE SKIN PRODUCTS INC.

(an Ontario Private Corporation)

NOTES TO FINANCIAL STATEMENTS

April 30, 2008

 

 

NOTE 1.  GENERAL ORGANIZATION AND BUSINESS

 

Enhance Skin Products Inc (“the Private Company”) is a privately owned Ontario corporation established on July 28, 1992.  Since 2004, the Private Company has been a developer of premium cosmeceutical products marketed under its “Visible YouthTM” trademark. Cosmeceuticals are topically applied products
containing ingredients that influence the biological function of skin and can be described as a marriage between cosmetics and pharmaceuticals. These products may improve the appearance and condition of the skin by delivering nutrients or protectants necessary for healthy skin.

   

NOTE 2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

The Private Company maintains its accounts on the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America. The accompanying financial statements of the Private Company, have been prepared in accordance with accounting principles generally accepted in the United States of America
and the rules of the Securities and Exchange Commission (SEC). In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations have been reflected herein

 

The financial statements have been prepared within the framework of the significant accounting policies summarized below:  

  

USE OF ESTIMATES

 

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

 

CASH AND CASH EQUIVALENTS

 

Cash and cash equivalents include cash and all highly liquid financial instruments with original purchased maturities of three months or less.

 

  

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At various times during the year, the Company maintained cash balances in excess of FDIC insurable limits. Management feels this risk is mitigated due to the longstanding reputation of these banks.  At April 30, 2008 the Company had a cash overdraft balance of $3,088 compared to a bank overdraft of $2,273 at April 30, 2007.

 

FAIR VALUE OF FINANCIAL INSTRUMENTS

 

The Private Company's financial instruments consist of cash and cash equivalents, inventory, sales tax receivable and prepaids & deposits. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these
consolidated financial statements.

 

LONG-LIVED ASSETS

 

We review our long-lived assets, which include intangible assets subject to amortization, for recoverability whenever events or changes in circumstances indicate that the carrying amount of such long-lived asset or group of long-lived assets (collectively referred to as "the asset") may not be recoverable. Such circumstances include, but are
not limited to:

 

	
●
	
a significant decrease in the market price of the asset;

 

	
●
	
a significant change in the extent or manner in which the asset is being used;

 

	
●
	
a significant change in the business climate that could affect the value of the asset;

 

	
●
	
a current period loss combined with projection of continuing loss associated with use of the asset;

 

	
●
	
a current expectation that, more likely than not, the asset will be sold or otherwise disposed of before the end of its previously estimated useful life.

SALES

All of the Private Company’s sales were to one customer in one geographic region.

REVENUE RECOGNITION

The Private Company recognizes product sales generally at the time the product is shipped. In certain instances the Company recognizes revenue on a C.O.D. basis.  Concurrent with the recognition of revenue, the Company provides for the estimated cost of product returns and

  

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reduces revenue for estimated product returns.   Sales incentives are classified as a reduction of revenue and are recognized when revenue is recognized.  Shipping and handling costs are included in cost of goods sold.

ADVERTISING EXPENSE

The Private Company’s policy regarding advertising is to expense advertising when incurred.  Advertising expense was $985 and nil for the year ended April 30, 2008 and April 30, 2007, respectively.

 

BASIC AND DILUTED LOSS PER SHARE

 

The Private Company reports basic loss per share in accordance with the SFAS No. 128, “Earnings Per Share”. Basic loss per share is computed using the weighted average number of shares outstanding during the period.  Diluted loss per share has not been provided as it would anti-dilutive.  Dilution is computed by
applying the treasury stock method.

 

PRODUCT DEVELOPMENT COSTS

 

Product development costs are expensed as incurred. Product development expense was $5,407 and $54,111 for the year ended April 30, 2008 and April 30, 2007, respectively.

 

INCOME TAXES

 

Income taxes are provided in accordance with Statement of Financial Accounting Standards No. 109 (“SFAS 109”) Accounting for Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards.  Deferred tax expense (benefit)
results from the net change during the year of deferred tax assets and liabilities.

 

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of all of the deferred tax assets will be realized.  Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

FOREIGN CURRENCY TRANSACTIONS

 

The Private Company’s functional currency is the Canadian dollar (“CDN”).  The Private Company translates from the functional currency to U.S. dollars using the current rate method in accordance with SFAS No 38.  The Private Company uses the U.S. dollar as its reporting currency for consistency with registrants
of the Securities and Exchange Commission and in accordance with SFAS No. 52.

 

  

8

  

Transactions undertaken in currencies other than the functional currency of the entity are translated using the exchange rate in effect as of the transaction date.  Any exchange gains and losses would be included in other income (expenses) on the Statement of Operations.

  

WEBSITE COSTS

 

Website costs consist of software development costs, which represent costs of design, configuration, coding, installation and testing of the Private Company’s website.  These costs are expensed as they are incurred.

NOTE 3.  RECENT ACCOUNTING PRONOUNCEMENTS

 

June 2009, the FASB issued SFAS No. 166, “Accounting for Transfers of Financial Assets—an amendment of FASB Statement No. 140” (“SFAS 166”).  The provisions of SFAS 166, in part, amend the derecognition guidance in FASB Statement
No. 140, eliminate the exemption from consolidation for qualifying special-purpose entities and require additional disclosures. SFAS 166 is effective for financial asset transfers occurring after the beginning of an entity’s first fiscal year that begins after November 15, 2009. The Private Company does not expect the provisions of SFAS

166 to have a material effect on the financial position, results of operations or cash flows of the Company

In April 2009, the FASB issued FSP No. FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments.  This FSP amends the other-than-temporary impairment guidance in U.S. GAAP
for debt securities to make the guidance more operational and to improve the presentation and disclosure of other-than-temporary impairments on debt and equity securities in the financial statements. The FSP does not amend existing recognition and measurement guidance related to other-than-temporary impairments of equity securities. The FSP shall be effective for interim and annual reporting periods ending after June 15, 2009. The Private Company, currently, does not have any financial assets that are other-than-temporarily
impaired.

In May 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles”.  SFAS No. 162 sets forth the level of authority to a given accounting pronouncement or document by category. Where there might be conflicting guidance between
two categories, the more authoritative category will prevail. SFAS No. 162 will become effective 60 days after the SEC approves the PCAOB’s amendments to AU Section 411 of the AICPA Professional Standards. SFAS No. 162 has no effect on the Private Company’s financial position, statements of operations, or cash flows at this time.

In May 2008, the FASB issued SFAS No. 162, “the Hierarchy of Generally Accepted Principles”.  This statement identifies the sources of accounting principles and the framework of selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally
accepted accounting principles (“GAAP”) in the Unites States.  The statement is directed to entities rather than auditors because entities are responsible for the selection of accounting principles for financial statements that are presented in conformity with GAAP.  This statement is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, “The
Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles”.  The Private Company does not expect that the adoption of this statement will have a material impact on its financial position, results of operations or cash flows.

  

9

  

 

NOTE 4.  GOING CONCERN

 

The accompanying financial statements have been prepared assuming that we will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Private Company has net losses for the period from inception to April 30, 2008 of $207,809. We
intend to fund operations through working capital and sales, which may be insufficient to fund our expenditures, working capital and other cash requirements for the next 12 months.

 

Our ability to become a profitable entity is dependent upon our successful efforts to generate sales and then attain profitable operations.  In response to these problems, management has planned the following actions:

 

	  	
●
	
Management is currently manufacturing products to generate sales. There can be no assurances, however, that management’s expectations of future sales will be realized.

 

These factors, among others, raise substantial doubt about our ability to continue as a going concern. These financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

NOTE 5.  LONG-LIVED ASSETS

In the year ended April 30, 2007, the Private Company reviewed the carrying value of the Private Company’s trademarks.  At that time the Private Company did not have any prospects to obtain financing to execute its business plan.  Accordingly the Private Company decreased the values of its trademarks by $5,311.  In
the year ended April 30, 2008, the Company did not decrease the book value of the trademarks, as equity financing was made available.  As the Company was now able to execute its business plan and make use of these trademarks the Company considered no impairment of the trademark was necessary at April 30, 2008.  The equity financing was received in August 2008, at that time this private Company completed a reverse merger with Zeezoo Software Corp as fully explained in note 12.

NOTE 6.  LONG-TERM DEBT

The Long-term debts are secured by a general security agreement on all of the assets of the Company. Long-term debts consist of the following as of April 30, 2008 and April 30, 2007:

  

10

  

 

	  	
Monthly
	 	
Maturity
	 	
Interest
	 	 	
Gross
	 	 	
Current
	 	 	
Long term
	 
	  	
Terms
	 	
Date
	 	
Rate
	 	 	
Balance
	 	 	
Portion
	 	 	
Liability
	 
	  	  	 	  	 	 	 	 	 	 	 	 	 	 	 	 
	
Business Development
	 	  	 	 	 	 	 	 	 	 	 	 	 	 
	
      Bank of Canada
	
$1,071 plus interest
	 	
Dec 2009
	 	 	11.25	%	 	$	21,420	 	 	$	9,639	 	 	$	11,781	 
	  	  	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
TD Canada Trust
	
$823 plus interest
	 	
Apr 2010
	 	 	7.25	%	 	 	19,741	 	 	 	7,403	 	 	 	12,338	 
	  	  	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    Total at April 30, 2008
	 	  	 	 	 	 	 	$	41,161	 	 	$	17,042	 	 	$	24,119	 
	  	  	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	  	  	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	  	  	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	  	  	 	
Maturity
	 	
Interest
	 	 	
Gross
	 	 	
Current
	 	 	
Long term
	 
	  	
Terms
	 	
Date
	 	
Rate
	 	 	
Balance
	 	 	
Portion
	 	 	
Liability
	 
	  	  	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
Business Development
	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
      Bank of Canada
	
$972 plus interest
	 	
Dec 2009
	 	 	11.25	%	 	$	31,112	 	 	$	8,750	 	 	$	22,362	 
	  	  	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
TD Canada Trust
	
$251 plus interest
	 	
Jan 2008
	 	 	7.25	%	 	 	2,402	 	 	 	2,258	 	 	 	144	 
	  	
  $747 plus interest
	 	
Apr 2010
	 	 	7.25	%	 	 	26,883	 	 	 	6,721	 	 	 	20,162	 
	
    Total at April 30, 2007
	 	  	 	 	 	 	 	$	60,397	 	 	$	17,729	 	 	$	42,668	 

 

 

 

 

  

11

  

 

NOTE 7.  STOCKHOLDERS' EQUITY

 

AUTHORIZED

 

The Private Company is authorized to issue an unlimited number of shares without nominal or par value of a class designated as Common Shares, and the Private Company is authorized to issue an unlimited number of shares without nominal or par value of a class designated as Class A Preference Shares.

 

ISSUED AND OUTSTANDING

 

On July 28, 1992 (inception), the Private Company issued 10 share of its common stock to its sole director for cash of $90.

NOTE 8.  ADDITIONAL PAID IN CAPITAL

 

The Private Company has relied on funding for operations from its sole shareholder.  This funding has been accounted for as additional paid in capital.  The sole shareholder made contributions to additional paid in capital of $66,319 and $61,217 during the years ended April 30, 2008 and April 30, 2007, respectively.

NOTE 9.  INCOME TAXES

 

Net deferred tax assets are $Nil.   Realization of deferred tax assets is dependent upon sufficient future taxable income during the period that deductible temporary differences and carry forwards are expected to be available to reduce taxable income.  As the achievement of required future taxable income is uncertain,
the Private Company has not recorded a valuation allowance.

NOTE 10.  NET OPERATING LOSSES

 

As of April 30, 2008, the Private Company has a net operating loss carry forward of approximately $207,809, which will expire for tax loss carry forward purposes 10 years from the date the loss was incurred.

 

  

12

  

NOTE 11.  OPERATING LEASES AND OTHER COMMITMENTS

 

The Private Company currently has a monthly lease commitment of $1,105 expiring November 30, 2009.  Rent expense was $13,510 and $8,079 for the years ended April 30, 2008 and April 30, 2007, respectively.

 

Financial commitments for the next five years are:

 

	
Fiscal
	 	
Lease
	 	 	 	 
	
Year
	 	
Agreement
	 	 	
Total
	 
	
2009
	 	$	13,260	 	 	$	13,260	 
	
2010
	 	 	7,735	 	 	 	7,735	 
	
2011
	 	 	0	 	 	 	0	 
	
2012
	 	 	0	 	 	 	0	 
	
2013
	 	 	0	 	 	 	0	 
	
Total
	 	$	20,995	 	 	$	20,995	 

 

 

NOTE 12.  SUBSEQUENT EVENTS

 

Reverse merger

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

On August 14, 2008, under the terms of the Asset Purchase Agreement, we cancelled 47,910,000 shares of the Common Stock.  As a result, the outstanding shares of the Common Stock were reduced to 20,250,000.

 

On August 14, 2008, under the terms of the Asset Purchase Agreement, we issued 27,500,000 shares of the Common Stock for the acquisition of all of the intellectual property and certain liabilities of the Private Company.  As a result, the outstanding shares of the Common Stock were increased to 47,750,000.

 

 

 

13

 

 

Financing

On August 14, 2008, we entered into a subscription agreement with the investors (collectively, the “Investors”) pursuant to which we sold to the Investors an aggregate of $1,500,000 of units, each unit consisting of 2 shares of the Common Stock and one warrant to purchase one share of the Common Stock. The unit purchase price was
$2.00. Each warrant entitles its holder to subscribe for one additional share of the Common Stock at an exercise price of $1.40 during the period of 24 months from the closing date of August 14, 2008 at 5:00 p.m., Nevada local time.  As a result, the outstanding shares of the Common Stock were increased to 49,250,000.

Net proceeds to us at closing were $1,061,502. $438,300 of funds was disbursed as follows: $300,000 as finder’s fees, $44,600 for professional fees and legal fees associated with the issuance of our securities. A further $34,416 was paid to satisfy existing bank loans and $59,284 was paid to our officers, who had advanced funds for marketing
efforts.

Warrants

Warrants for 750,000 shares were issued by us in August 2008. Specifically, we sold 1,500,000 shares of the Common Stock for $1,500,000 to accredited investors and issued warrants to those investors to purchase 750,000 shares of the Common Stock at an exercise price of 1.40 per share expiring August 14, 2010.  We have attributed
$341,141 to warrant expense using the Black Scholes option price model.

 

 

 

 

 

 

 

 

 

 

 

 

14enhanceskinexh10_6.htm

Exhibit 10.6

UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

 

The following pro forma balance sheet has been derived from the balance sheet of Zeezoo Software Corp, (“ Zeezoo”) at July 31, 2008 and adjusts such information to give effect to the acquisition of Enhance Skin Products, Inc., as if the acquisition had occurred
at July 31, 2008. The pro forma balance sheet is presented for informational purposes only and does not purport to be indicative of the financial condition that would have resulted if the acquisition had been consummated at July 31, 2008. The pro forma balance sheet should be read in conjunction with the notes thereto and Enhance Skin Products Inc’s financial statements and related notes thereto contained elsewhere in this filing.

 

On August 14, 2008, Zeezoo acquired Enhance Skin Products Inc., a privately owned Ontario corporation (“ Enhance”), through an Asset Purchase Agreement with the issuance of Common Stock (the “ Merger ”) between
Zeezoo, and Enhance.  

 

Immediately following the Merger, Zeezoo formally ceased the software development business that it had previously conducted, Zeezoo closed the office in California, and moved the office to Denver, Colorado.  We currently do not plan to conduct any business other than the business of Enhance, which will continue to conduct its operations
that it has, to date, been engaged in.

 

For accounting purposes, this transaction was treated as an acquisition of Zeezoo and a recapitalization of Enhance. Enhance is the accounting acquirer and the results of its operations carryover. Accordingly, the operations of Zeezoo are not carried over and will be adjusted to $0.  Immediately prior to
the Merger, Zeezoo had minimal assets and liabilities.

 

The financial statements are presented based on this recapitalization, whereby Zeezoo has 49,250,000 shares of its common stock outstanding as of July 31, 2008.

 

 

 

 

 

 

1

 

 

	
Enhance Skin Products Inc. Pro-Forma
	 	 	 	 	 	 	 	 	 	 	 	 
	  	 	 	 	 	 	 	 	 	 	 	 	 
	
Unaudited Pro Forma Consolidated Balance Sheet
	 
	  	 	 	 	 	 	 	 	 	 	 	 	 
	  	 	
Enhance Skin
	 	
Zeezoo
	 	 	 	 	 	 	 
	  	 	
Products Inc
	 	
Software Corp
	 	 	
 
	 	 	
 
	 
	  	 	
July 31
	 	 	
July 31
	 	 	Pro Forma	 	 	 	 
	  	 	
2008
	 	 	
2008
	 	 	
Adjustments
	 	 	

Pro Forma

	 
	  	 	 	 	 	 	 	 	 	 	 	 	 
	
ASSETS
	 	 	 	 	 	 	 	 	 	 	 	 
	
Current
	 	 	 	 	 	 	 	 	 	 	 	 
	
Cash
	 	$	0	 	 	$	1,854	 	 	$	1,061,487	 	 	$	1,063,341	 
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
Total current assets
	 	 	0	 	 	 	1,854	 	 	 	1,061,487	 	 	 	1,063,341	 
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
Other
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
Patent
	 	 	6,903	 	 	 	0	 	 	 	0	 	 	 	6,903	 
	
Trademark
	 	 	44,115	 	 	 	0	 	 	 	0	 	 	 	44,115	 
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
Total other assets
	 	 	51,018	 	 	 	0	 	 	 	0	 	 	 	51,018	 
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
Total Assets
	 	$	51,018	 	 	$	1,854	 	 	$	1,061,487	 	 	$	1,114,359	 
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
	 	 	 	 	 	 	 	 	 	 	 	 
	
Current
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
Accounts payable and accrued liabilities
	 	$	0	 	 	$	2,860	 	 	$	0	 	 	$	2,860	 
	
Current portion of long term debt
	 	 	11,482	 	 	 	0	 	 	 	(11,482	)	 	 	0	 
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
Total current liabilities
	 	 	11,482	 	 	 	2,860	 	 	 	(11,482	)	 	 	2,860	 
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
Long Term
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
Bank loans
	 	 	22,934	 	 	 	0	 	 	 	(22,934	)	 	 	0	 
	
Due to shareholder
	 	 	0	 	 	 	1,615	 	 	 	0	 	 	 	1,615	 
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
Total long term liabilities
	 	 	22,934	 	 	 	1,615	 	 	 	(22,934	)	 	 	1,615	 
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
Total liabilities
	 	 	34,416	 	 	 	4,475	 	 	 	(34,416	)	 	 	4,475	 

 

 

 

2

 

 

	
Stockholder's equity (deficit)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
Authorized 100,000,000 common shares par value $0.001
	 	 	 	 	 	 	 	 	 
	
Issued and outstanding 49,250,000
	 	 	90	 	 	 	5,680	 	 	 	43,486	 	 	 	49,250	 
	
Additional paid-in-capital
	 	 	233,436	 	 	 	44,320	 	 	 	1,059,299	 	 	 	1,337,055	 
	
Translation adjustments
	 	 	(3,941	)	 	 	0	 	 	 	0	 	 	 	(3,941	)
	
Deficit
	 	 	(212,983	)	 	 	(52,621	)	 	 	(6,876	)	 	 	(272,480	)
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
Total stockholders' equity (deficit)
	 	 	16,602	 	 	 	(2,621	)	 	 	1,095,903	 	 	 	1,109,884	 
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
Total liabilities and stockholders' equity (deficit)
	 	$	51,018	 	 	$	1,854	 	 	$	1,061,487	 	 	$	1,114,359	 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

3

 

 

NOTES TO UNAUDITED PRO FORMA

CONSOLIDATED BALANCE SHEET

 

 

The pro forma presentation and adjustments reflect the following items:

 

1.     In August 2008, pursuant to an Asset Purchase Agreement (the “Asset Purchase Agreement”) by and between Zeezoo a Nevada corporation (the “Registrant”), and Enhance, a privately owned Ontario corporation (“Enhance”), on
August 14, 2008 (the “Closing Date”), the Registrant acquired all of the intellectual property and certain liabilities of Enhance (the “Assets”). In exchange for the Assets, and taking into account the cancellation of certain securities of the Registrant held by the Insiders (as defined below), Enhance has acquired approximately 57.6% of the issued and outstanding shares of common stock, par value $.001 per share (the “Common Stock”), of the Registrant immediately after the
consummation of the asset purchase. This transaction may be deemed to have resulted in a change in control of the Registrant from the Insiders to Enhance, the sole stockholder of which is Samuel Asculai, Ph.D. The Insiders were the majority stockholders of the Registrant immediately prior to the Closing Date. On the Closing Date, the Insiders surrendered the large majority of their Common Stock of the Registrant for cancellation as a condition to the consummation of the asset purchase and the Registrant issued
27,500,000 shares of  its Common Stock to Enhance in exchange for the Assets.

 

In connection with the change in control, Dr. Asculai was appointed President and Chief Executive Officer and a director, Dr. Zenas B. Noon was appointed a director, Mr. Frode Botnevik was appointed a director, Christopher Hovey was appointed Chief Operating Officer and Vice President of Sales and Brian Lukian was appointed Chief Financial
Officer, Treasurer and Secretary of the Registrant. Joel M. Gugol and Erickson D. Mercado (together, the “Insiders”), the only officers and directors of the Registrant prior to the consummation of the Asset Purchase Agreement, resigned from these positions at the time the transaction was consummated. Such appointments and resignations of the officers of the Registrant were effective on the Closing Date. The appointments and resignations of the directors will be effective upon the expiration of the
10-day period beginning on the date of the filing and mailing of an Information Statement with the Securities Exchange Commission (the “SEC”) pursuant to Section 14(f) of the Exchange Act of 1934, as amended.

 

2.     Zeezoo ceased the software development business that it had previously conducted, closed the office in California, and moved the office to Denver Colorado.  

 

3.     On August 14, 2008, the Registrant entered into subscription agreements with the investors named therein (collectively the “Investors”) pursuant to which the Registrant agreed to sell to the Investors an aggregate of $1,500,000 of Units of the Registrant, each unit consisting of 2 shares of Common
Stock and one warrant to purchase one share of Common Stock (the “Warrants”).  The Registrant is required at all times to reserve sufficient shares of its Common Stock for full exercise of the Warrants.

 

4

 

 

All securities were issued in reliance upon an exemption from registration under Section 4(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder as a transaction not involving a public offering of securities. In addition, the Investors are accredited investors, the Investors had access to information about the
Registrant and their investments, the Investors took the securities for investment and not for resale, and the Registrant took appropriate measures to restrict the transfer of those securities.

 

4.     On the Closing Date, the Registrant consummated the transactions contemplated by the Asset Purchase Agreement, pursuant to which the Registrant acquired the Assets in exchange for the issuance of shares of the common stock of the Registrant to Enhance representing 57.6% of the issued and outstanding shares
of the Registrant. The issuance of those shares was exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Regulation S promulgated under the Securities Act. Following the asset purchase, designees of Enhance became the sole officers and directors of the Registrant. Reference is made to Item 2.01 of this Form 8-K for a more extensive description of these transactions.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

5

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