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PART I
Item 1. 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 Pristine Solutions Inc., and our wholly-owned subsidiary, Pristine Solutions Limited, a Jamaica company, unless otherwise indicated.
Corporate Overview
We were incorporated on December 8, 2009 under the laws of the State of Nevada. We have a wholly-owned subsidiary, Pristine Solutions Limited, incorporated under the laws of Jamaica. Our principal executive offices are located at Stettin Albert Town, Trelawny, Jamaica. Our telephone number is (876) 572-4681. Our fiscal year end is January 31.
On February 27, 2012, our company authorized an increase to the authorized number of shares of common stock from 100,000,000 shares to 650,000,000 shares and a decrease to the authorized preferred stock from 100,000,000 shares to 50,000,000 shares. Our company also effected a 6-for-1 forward stock split of the issued and outstanding shares of common stock on February 27, 2012.
Our Current Business
We are a start up, development stage company. We have only recently begun operations and we have relied upon the sale of our securities and proceeds from debt to fund those operations as we have only generated limited revenues from the sale of our products. We intend on developing a network of sales points for the sale and service of tankless water heaters in Jamaica. We aim to be the first tankless water heater company specializing in tankless-only products to enter the Jamaican market and the only company in the Jamaican market offering solar powered tankless water heater products.
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On December 30, 2009, we entered into a distribution agreement with the manufacturer of the tankless hot water heaters which we hope to sell in Jamaica: Zhongshan Guangsheng Industry Co., Ltd., of China. Zhongshan currently manufactures the tankless hot water heaters under the brand Gleamous Electric Appliances. Zhongshan is part of an international enterprise that also owns an R&D group, factory, and sales group and is looking to expand into other markets. Our management hopes that we can expand the Gleamous brand into the Jamaican market and the rest of the Caribbean. Pursuant to the terms of this agreement, we acquired 52 units of Zhongshan’s various Gleamous tankless water heaters of which we were required to purchase 50 within the first 6 months of the agreement. As consideration, we were granted the exclusive license to distribute the products within Jamaica. The term of the agreement was 1 year and may be terminated by either party with 30 days written notice.
On March 18, 2011 we entered into a new license agreement with Zhongshan for an additional six months. According to the terms of the agreement, our company will purchase no less than 150 products within six months from the date of the agreement. As of January 31, 2012, 172 units of water heaters were ordered, of which 52 units were received by our company. Full payment has been made on all of the units.
Products and Services
Tankless water-heaters, also called Instantaneous or Demand Water Heaters, provide hot water only as it is needed. Traditional storage water heaters produce standby energy losses that cost consumers money even when they are not being used. A tankless water heater is used only when there is a demand for hot water. With a sufficient amount of heaters attached to the hot water appliances in a customer’s home, our products could provide hot water for the entire household. However, the tankless water heaters we will initially be distributing, and which we list below, are not, on their own, capable of supplying sufficient hot water to meet an entire household’s hot water requirements. These heaters are intended for specific usage for one appliance which requires hot water.
The tankless water heater process is as follows:
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When a hot water tap is turned on, cold water travels through a pipe into the unit. In an electric tankless water heater, an electric element heats the water. In a traditional gas-fired tankless water heater a gas burner heats the water. As a result, tankless water heaters deliver a constant supply of hot water. Typically, tankless water heaters provide hot water at a rate of 2 – 5 gallons (7.6 – 15.2 liters) per minute. Typically, traditional gas-fired tankless water heaters will produce higher flow rates than electric tankless water heaters. However, some smaller tankless water heaters, such as the ones we will be offering initially, cannot supply enough hot water for simultaneous, multiple uses in large households.
For example, taking a shower and running the dishwasher at the same time can stretch a tankless water heater to its limit. To overcome this problem, one can install a “whole house” type tankless water heater or install two or more tankless water heaters, connected in parallel for simultaneous demands of hot water. One can also install separate tankless water heaters for appliances—such as a clothes washer or dishwasher—that use a lot of hot water in homes. Offering a “whole house” solution is not our current focus, but once we are better established, we hope to provide a “whole house” option to the residents of Jamaica. Initially, we anticipate offering the following 3 types of tankless water heaters:
DSK Series Instant Water-Heater
This series of tankless water heaters has proven to the most popular in other markets for Zhongshan, so we anticipate marketing this series most aggressively in Jamaica as well.
The features of the DSK series include:
DSL Series Fast Water-Heater
This is a premium series of water heaters which allows for quicker heating of water with higher water temperatures. We anticipate marketing this series to Jamaican customers, but do not anticipate this to be our highest selling product due to its premium price point.
The features of the DSL series include:
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Kitchen Water-Heaters
This series of heaters is intended for kitchen use. The features of this series are as follows: