The following discussion and analysis should be read in conjunction with our financial statements and the related notes that appear in this Annual Report on Form 10-K. The following discussion contains forward-looking statements that reflect our plans, estimates and expectations. The Company's 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 on Form 10-K. The financial statements are prepared in accordance with United States Generally Accepted Accounting Principles.

Overview

Easton Pharmaceuticals is a diversified specialty pharmaceutical company involved in various pharmaceutical sectors and other growing industries. The Company previously developed and owned an FDA-approved wound-healing medical drug and currently owns topically delivered drugs to treat cancer and other therapeutic products to treat various conditions that are all in various stages of development and approval. Easton, together with BMV Medica S.A., own the exclusive distribution rights in Mexico and Latin America for two patented women's diagnostic products and a novel natural treatment for Bacterial Vaginosis, which they have sub-licensed to Bayer and Gedeon Richter. In addition, a generic cancer drugs line is being developed for sale in Mexico. 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 other drugs and Cannabidiol extracts.

As part of our strategic growth plan, we will continue to explore opportunities and enter new lucrative market segments globally.

We intend to acquire complementary products, technologies or companies by identifying and evaluating potential products and technologies developed by third parties that we believe fit within our overall objective and have tremendous growth opportunity.

Revenue

During the Year Ended December 31, 2019, we generated revenues of $1,555,566 as compared to $378,589 for the Year Ended December 31, 2018. The increase in revenue was attributed primarily to the contract for framing that we secured in the last quarter of 2018.

Operating Expenses

During the Year Ended December 31, 2019, we had operating expenses of $523,171 as compared to operating expenses of $231,133 for the Year Ended December 31, 2018. The increase in operating expenses in 2019 compared to 2018 is primarily due to an increase in legal fees incurred on our various transactions, along with an increase in management fees.

Net Loss

The Company had a net loss for the Year Ended December 31, 2019 of $323,171 as compared to a net loss of $169,227 for the Year Ended December 31, 2018.

Cost of Revenues

Our cost of revenues for the Year Ended December 31, 2019 was $1,354,171 as compared to $271,683 for the Year Ended December 31, 2018.

We prepare our financial statements in accordance with US GAAP. At the time of the preparation of the financial statements, our management is required to use estimates, evaluations, and assumptions which affect the application of the accounting policy and the amounts reported for assets, obligations and expenses. Any estimates and assumptions are continually reviewed. The changes to the accounting estimates are credited during the period in which the change to the estimate is made.

Going Concern Uncertainty

Until 2019, we devoted substantially all of our efforts to acquiring technology, product rights, development and raising capital. There is no certainty as to the continuance of our revenues as a result of the false allegations and charges against our directors. The development and commercialization of our projects are expected to require substantial further expenditures. We remain dependent upon external sources for financing our operations. Since inception, we have incurred substantial accumulated losses, negative working capital, and negative operating cash flow, and have a significant shareholders' deficit. These factors raise substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. We plan to finance our operations through the sale of equity and, to the extent available, short term and long-term loans. There can be no assurance that we will succeed in obtaining the necessary financing to continue our operations.

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