Easton Pharmaceuticals, Inc. (EAPH)

[EarnestDD]

NO MENTION of EAPH by MDRM in their Audited financials.

4. NON-REDUNDABLE DEPOSIT ON BUSINESS ACQUISITION

The Company, through a wholly-owned subsidiary, MDRM Group (Canada) Ltd., formed in Ontario, Canada, entered into an acquisition agreement on May 8, 2014 with a private Ontario company (“Potential Licensee”) to acquire 100% of the issued and outstanding shares of Potential Licensee. The Potential Licensee is in the final stage of obtaining their Medical Marijuana growers license. The Potential Licensee is located in the Province of Ontario, owns a fully functional production facility, and is awaiting final inspection by Health Canada. The transaction includes real property and related facilities. Pursuant to the terms of the acquisition agreement, the Company paid a non-refundable advance against acquisition of $46,000 to the law firm of the sellers, in Trust, in the transaction. On the instruction of the Company, on June 18, 2014, an amount of $41,400 was released to the vendor from the Trust account leaving a balance of $4,400 in the trust account.

Under the terms of the acquisition agreement, the Company will pay CDN$2.5 million at Closing with an additional CDN$2.5 million due one year from the original Closing date. The Company will also, at closing, issue a warrant to the sellers to purchase up to 1 million shares of the Company shares at a 25% discount to market. The Closing of the acquisition agreement is subject to receipt of a license from Health Canada under Marijuana for Medical Purposes Regulation ("MMPR").

As at the date of this report, the Company does not have the CDN $5 million required to complete the acquisition there is no assurance that the required financing will be available, or if available, on terms that will be acceptable to Company. If we are not able to obtain needed financing, we may have to cancel the agreement. Upon cancellation, the initial deposit amount of $46,000 paid by the Company will be forfeited. Even if we raise the funds necessary to acquire the business, there can be no assurance that the business will be successful.

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