SOURCE: Easton Pharmaceuticals, Inc.

Easton Pharmaceuticals, Inc.

October 07, 2014 12:05 ET

Easton Pharmaceuticals Letter to Shareholders

TORONTO, ON--(Marketwired - Oct 7, 2014) - Easton Pharmaceuticals Inc. (OTC: EAPH)

Dear Fellow Shareholders,

As you are currently aware Easton pharmaceutical has entered the Medical Marijuana and supporting products market. We would like to thank current investors for their continued support and patience. Management has been developing an update to shed light on the current Health Canada delays which have affected everyone involved in the Canadian Medical marijuana industry and felt that a Letter to Shareholders would be the best method for this update. Health Canada has not issued any new licenses in the last 7 months under the new MMPR system which replaced the outgoing MMAR system, which may be in response to a legal motion set to be heard in February of 2015 in regards to the prior MMAR program. Easton is diligently working to treat the Health Canada industry wide delays as an opportunity rather than a setback.

Our Current Projects Are Outlined As Follows

AMFIL Revenue / Profit Recognition
Easton's ownership in AMFIL's mPact-GROzone Antimicrobial System is our entry into the infrastructure side of the Medical Marijuana industry on a business to business level. It is believed these products provide a clear cost saving benefit to various sized facilities of different industries including the medical marijuana, food and medical facilities. As a business product it also commands a high customized price tag in the range of 100k-150k per unit installed (based on size of area that's being serviced) and maintains quite high margins (over 50%) on initial product sales as well as maintenance contracts that follow initial installation. Residual income from the maintenance contracts will affect both the top and bottom lines. AMFIL is in the midst of completing a financial audit; Easton should be able to recognize meaningful revenues within the 4th quarter as it relates to the installation of GROzone units that AMFIL has currently shipped and installed.

Medical Marijuana Facility (Port Perry Ontario)
Easton owns a binding exclusive option to purchase up to 49% on this facility awaiting a Health Canada national MMPR growers license. This facility has received a letter to build, which is considered to be 1 of only 25 issued. Management believe Health Canada's final approval and a national MMPR growers license is imminent based on the high level to detail in meeting the strict health Canada MMPR guidelines including upgraded security features. This exclusive purchase option agreement requires no additional funds to be forwarded until a final MMPR growers license has been granted by Health Canada. This places all associated carrying costs on the current owners and partners, and results in Easton conserving its cash for use in other projects. The current facility can be expanded with appropriate applications once it has been granted a growers license. Pictures of the facility are available on our website. Address details and the name of the company are unable to be disclosed at this point so not to adversely affect the licensing process with health Canada.

The above listed items addresses all our completed Marijuana related deals and the majority of questions that relate to it. Management has worked hard to avoid any risks associated with the industry while trying to maximize the returns. The following is the direction in which we intend to focus the company to better enhance shareholder value looking forward. This should show the shareholder our commitment to the industry; which we consider to have broader appeal to the consumer. Currently in Canada, Marijuana is allowed to be imported (licensed providers or LP's are allowed to ship marijuana into the country for resale). Marijuana is considered a drug and its production is considered manufacturing. Setting up production in a State that allows for current production through partnerships can speed availability of medication available to patients in Canada.

Ms. Carla Pepe, CEO of Easton Pharmaceuticals, commented: "After watching Junior mining companies come and go in this sector, I am pleased to be directing Easton Pharmaceuticals, whose core transdermal delivery technology, patents can add value to its Medical Marijuana initiatives. This is a historic time for the North American marijuana industry, and I hope to make Easton a positive influence in the exciting cross border sales and marketing of marijuana and related products. It is good to be working with our partner companies who understand the complexities of this industry and how important it is to identify, develop and expand credible business opportunities in this space."

Currently in the United States, 23 states have legalized cannabis for medical use with three more states pending legislation. Washington and Colorado State have legalized marijuana for recreational purposes as well. The legalized marijuana industry in the United States is thriving and local governments are benefiting from the tax revenues generated. Easton believes that there will be broad acceptance in the US market that will in turn have a direct effect on Canadian views towards full legalization. We also note that a major liberal point in their election campaign platform is Marijuana Legalization.


Easton's E-Cigarette,Vaporizer and CBD Directive
This is a new developing field that is directly related to the effective delivery of medicine to patients. A key positive factor we see with vaporizers is the discreetness they offer and elimination of second hand smoke release into the environment. Easton believes they are able to improve on the current vaporizer model employed by current vaporizer and E-cigarette companies. The company has plans to generate revenue immediate through diversification in the medical marijuana field in light of current Health Canada delays though a venture into vaporizers, glassware and CBD e-liquids, including but not limited to, branded products. To expedite this process; Easton is currently in advanced late stage discussions with a current revenue generating and profitable Vaporizer company that will immediately launch products in multiple websites which will also include a comprehensive SEO campaign. The Company has a focus of selling these products online through the Easton website, possible retail outlet, and distribution through contracts. The details on the entry into this and other products will soon follow.

US Marijuana Initiatives
Easton is in current discussions with multiple US grower organizations and have completed the long due diligence process in Colorado, Washington and California. These grow operations ranging from 25k-150k square feet and Easton wish's substantial investments. We plan to provide you the stakeholders with further details on these agreements as soon as they become available.

Ms. Carla Pepe, CEO of Easton Pharmaceuticals, further commented: "I look forward to finalizing these US agreements in a timely fashion with the consideration that there is a lot of due diligence that is usually involved in the time consuming acquisition process. We hope to soon see visionary investors and stakeholders in Easton pharmaceuticals experience positive benefits from the solid foundation we have laid out together."

Canadian Marijuana initiatives
Easton has in the past considered building out its own facility in the Greater Toronto Area but decided against this choice in favor of a pre existing facility that already maintained a letter to build. As the delays from Health Canada towards current "ready for inspection" facilities drag on this gives Easton the unique opportunity to develop its own facility; to grow and market Medical Marijuana as well as obtain ownerships in Canadian facilities at discounted rates. Easton will be able to import excess marijuana from its US initiatives if prices dictate it do so. This process is currently used by Canadian LP Bedrocan who currently ships in Medical Marijuana for sale in Canada from its subsidiaries in Holland.

Ms. Pepe's final thoughts: "More fundamentally, I think long-term proactive thinking will move us forward delighting customers with exceptional high quality products at reasonable prices, which will ultimately earn us more business from customers, including within our new business segments. If we take a long-term view, we anticipate the interests of customers and shareholders will align."

We would like to again thank our shareholders for their continued support. We plan to follow this Shareholder letter with other shareholder letters in a more frequent basis, that will answer most commonly asked business related questions directed to our corporate website or Twitter handle.

Please follow us on Twitter at @EastonPharma

About Easton Pharmaceuticals

Easton Pharmaceuticals is a specialty pharmaceutical company involved in various pharmaceutical sectors and others industries such as medical marijuana. The Company owns, designs, develops, and markets topically-delivered drugs and therapeutic / cosmetic healthcare products, focused on cancer and other health issues geared towards male and female sexual dysfunction, wound healing, pain, motion sickness, scar and stretch marks, cellulite, varicose veins and other conditions. The company has ventured into the potentially lucrative medical marijuana industry through an investment into AMFIL Technologies and their groZONE anti-bacterial system and the exclusive option to purchase up to 50% in a medical marijuana grow-op business / facility which has received a letter to build from Health Canada. The company's gel formulation is thought to be an innovative and unique transdermal delivery system that can in the future be adaptable in the delivery of Cannabidiol extracts.

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Safe Harbor

This news release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (The "Act"). In particular, when used in the preceding of discussion, the words "hope", "anticipate," "pleased," "plan," "confident that," "believe," "expect," "possible" or "intent to" and similar conditional expressions are intended to identify forward-looking statements within the meaning of the Act and are subject to the safe harbor created by the Act. Such statements are subject to certain risks and uncertainties and actual results could differ materially from those expressed in any of the forward-looking statements. Any investment made into Easton Pharmaceuticals would be classified as speculative. Such risks and uncertainties include, but are not limited to, market conditions, general acceptance of the company's products and technologies, competitive factors, the ability to successfully complete additional or adequate financing, government approvals or changes to proposed laws and other risks and uncertainties further stated in the company's financial reports and filings.

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