What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2013-03-22 compared with 2012-05-31 · 199 added, 125 removed, 336 unchanged (49% of the section changed)

7 unchanged sentences

Balance Sheets as of December 31, 2012 and 2011

Statements of Operations and Accumulated Other Comprehensive Loss for the Years Ended December 31, 2011

and 2010 and Development Stage from October 1, 2011 to December 31, 2011

Statements of Operations and Accumulated Other Comprehensive Loss for the Years Ended December 31, 2012 and 2011 and Development Stage from October 1, 2011 to December 31, 2012

Statements of Changes in Stockholders’ Equity (Deficit) for the Years Ended December 31, 2012 and 2011 and Development Stage from October 1, 2011 to December 31, 2012

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The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

March 22, 2013

BIO-SOLUTIONS CORP.

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Intellectual Property

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIENECY)

CURRENT LIABILITIES

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Short - term loans

Short - term loans - related party

Short - term loans - related parties

Short - term loans - convertible

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TOTAL LIABILITIES

STOCKHOLDERS' EQUITY (DEFICIT)

STOCKHOLDERS' EQUITY (DEFICIENCY)

Common stock, $0.001 par value, 200,000,000 shares authorized,

101,085,862 and 65,440,397 shares issued and outstanding as of

December 31, 2011 and December 31, 2010, respectively

December 31, 2012 and 2011, respectively

Additional paid in capital

Deferred compensation

Accumulated deficit

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Accumulated other comprehensive loss

Total stockholders' equity (deficit)

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Total stockholders' equity (deficiency)

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

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

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DECEMBER 31, 2012

DECEMBER 31, 2010

DECEMBER 31, 2011

COST OF REVENUES

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OPERATING EXPENSES

Professional fees and wages

Professional fees

Amortization expense and impairment

General and administrative

Total Operating Expenses

NET LOSS BEFORE OTHER EXPENSE

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STATEMENT OF ACCUMULATED OTHER COMPREHENSIVE LOSS

Currency translation losses

Currency translation gains (losses)

TOTAL ACCUMULATED OTHER COMPREHENSIVE LOSS

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Common shares issued for services

Common shares issued for settlement

of accounts payable

Net loss for the year

Balance - December 31, 2010

Common shares issued for services

Common shares issued for settlement

of accounts payable

Common shares issued for settlement

of notes payable

Common shares issued for settlement of accounts payable

Common shares issued for settlement of notes payable

Proceeds from issuance of common stock

1 unchanged sentence

Balance - September 30, 2011

Development Stage Period from

October 1, 2011 to December 31, 2011

Development Stage Period from October 1, 2011 to December 31, 2011

Common shares issued for services

Common shares issued for settlement

of notes payable

Common shares issued for Type 2 Defense Acquisition

Conversion of accounts payable

to equity (Note 9)

Common shares issued for settlement of notes payable

Common shares issued for Type 2 Acquisition

Conversion of accounts payable to equity (Note 7)

Net loss for the year

Balance - December 31, 2011

Development Stage Period from October 1, 2011 to December 31, 2012

Common shares issued for liability for stock to be issued

Common shares issued for services

Common shares issued for compensation under employment agreement

Common shares issued for settlement of notes payable

Common shares issued for settlement of accounts payable

Conversion of accounts payable and notes payable to equity (Note 7)

Beneficial Conversion Feature of Notes Payable

Amortization of deferred compensation

Net loss for the year

Balance - December 31, 2012

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

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CASH FLOWS FROM OPERATING ACTIVITIES:

Adjustments to reconcile net loss

to net cash used in operating activities:

Amortization expense - license

Adjustments to reconcile net loss to net cash used in operating activities:

Impairment expense

Common stock issued for services

Beneficial Conversion Feature of Notes Payable

Change in assets and liabilities

(Increase) decrease in accounts receivable

(Increase) decrease in inventory

Increase (decrease) in accounts payable and accrued expenses

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CASH AND CASH EQUIVALENTS - END OF PERIOD

SUPPLEMENTAL CASH FLOW INFORMATION:

Cash paid during the period for:

NONCASH OPERATING AND INVESTING ACTIVITIES:

Conversion of Notes Payable to common stock

Conversion of accounts payable to common stock

Conversion of notes payable and accrued interest to common stock

Conversion of liability to common stock

Acquisition of intellectual property of Type2 Defense for common shares

Conversion of accounts payable to equity (Note 9)

Conversion of accounts payable and notes payable to equity (Note 7)

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

16 unchanged sentences

All inventories from the former products were written off as of October 1, 2011.

The Type 2 Defense product is currently under development with the initial shipment expected at the end of June 2012 or during the quarter ending September 30, 2012.

The Company has elected to enter the development stage on October 1, 2012 and expects to emerge from the development stage at the end of June 2012 or during the quarter ending September 30, 2012.

NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION (CONTINUED)

The Type 2 Defense product is currently under development with the initial shipment expected at the end of March 2013.

The Company has elected to enter the development stage on October 1, 2011 and expects to emerge from the development stage at the end of June 2013.

During October 2012, the board of directors increased the number of common shares authorized from 90,000,000 to 200,000,000 shares.

During February 2013, the Company began the first production run of the Type 2 Defense product.

The product will be completed in May 2013 with sales expected in June 2013.

Going Concern

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The terms of equity that may be raised may not be on terms acceptable by the Company.

If adequate funds cannot be raised outside of the Company, the Company’s officers and directors may need to contribute funds to sustain operations.

If adequate funds cannot be raised outside of the Company, the Company’s officer and directors may need to contribute funds to sustain operations.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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Gains and losses from foreign currency transactions are included in other income (expense) in the results of operations.

For the years ended December 31, 2011 and 2010, the Company recorded approximately $1,199 and $26,758 in translation losses, respectively.

For the years ended December 31, 2012 and 2011, the Company recorded $6,060 and $1,199 in translation losses, respectively.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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Costs of maintenance and repairs will be charged to expense as incurred.

Recoverability of Long-Lived Assets

The Company reviews their long-lived assets on a periodic basis whenever events and changes in circumstances have occurred which may indicate a possible impairment.

Recoverability of Current and Long-Lived Assets

The Company reviews their current and long-lived assets on a periodic basis whenever events and changes in circumstances have occurred which may indicate a possible impairment.

The assessment for potential impairment will be based primarily on the Company’s ability to recover the carrying value of its long-lived assets from expected future cash flows from its operations on an undiscounted basis.

1 unchanged sentence

Fixed assets to be disposed of by sale will be carried at the lower of the then current carrying value or fair value less estimated costs to sell.

During the years ended December 31, 2011 and 2010, respectively, the Company wrote off their inventory for $85,288 and a license agreement for $83,508 that were deemed fully impaired.

During the years ended December 31, 2012 and 2011, respectively, the Company wrote off their inventory for $83,508 and a pre-paid production cost for $15,700.

Fair Value of Financial Instruments

2 unchanged sentences

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Beneficial Conversion Features

ASC 470-20 applies to convertible securities with beneficial conversion features that must be settled in stock and to those that give the issuer a choice in settling the obligation in either stock or cash.

ASC 470-20 requires that the beneficial conversion feature should be valued at the commitment date as the difference between the conversion price and the fair market value of the common stock into which the security is convertible, multiplied by the number of shares into which the security is convertible.

ASC 470-20 further limits this amount to the proceeds allocated to the convertible instrument.

The Company accounts for income taxes utilizing the liability method of accounting.

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Valuation allowances are established, when necessary, to reduce deferred tax assets to amounts that are expected to be realized.

The Company follows ASC 740-10, “Accounting for Uncertainty in Income Taxes” (“ASC 740-10”).

This interpretation requires recognition and measurement of uncertain income tax positions using a “more-likely-than-not” approach.

ASC 740-10 is effective for fiscal years beginning after December 15, 2006.

Management has adopted ASC 740-10 for 2007, and they evaluate their tax positions on an annual basis, and have determined that as of December 31, 2012, no additional accrual for income taxes is necessary.

The Company’s policy is to recognize both interest and penalties related to unrecognized tax benefits expected to result in payment of cash within one year are classified as accrued liabilities, while those expected beyond one year are classified as other liabilities.

The Company has not recorded any interest or penalties since its inception.

The Company files income tax returns in the U.S.

federal tax jurisdiction and various state tax jurisdictions.

The tax years for 2009 to 2011 remain open for examination by federal and/or state tax jurisdictions.

The Company is currently not under examination by any other tax jurisdictions for any tax year.

Revenue Recognition

The Company generates revenue from the sales of their products.

The criteria for recognition are as follows:

The Company currently has no revenue.

Once the Company emerges from the development state and generates revenue from the sales of our products, the following criteria for recognition will be utilized:

1) Persuasive evidence of an arrangement exists;

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4) collectable is reasonably assured.

The Company’s revenues are generated through the manufacturing of their products.

The Company ships their product to their suppliers.

It is policy that the Company recognizes revenues upon placement of the purchase order.

This is the time when the criteria established above has been determined to have been met.

The Company primarily ships product the same day as the purchase order is received.

The customer typically pays for product within a 30 day period;

therefore management has determined no allowance is required as of December 31, 2011.

The right of return does exist for a small period subsequent to sale.

However, there have been no refunds since inception.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(Loss) Per Share of Common Stock

Basic net loss per common share is computed using the weighted average number of common shares outstanding.

Diluted earnings per share (EPS) include additional dilution from common stock equivalents, such as stock issuable pursuant to the exercise of stock options and warrants.

Diluted earnings per share (EPS) include additional dilution from common stock equivalents, such as stock issuable pursuant to the exercise of stock options warrants and convertible notes.

Common stock equivalents are not included in the computation of diluted earnings per share when the Company reports a loss because to do so would be anti-dilutive for periods presented.

The Company has not issued any options or warrants to date.

At December 31, 2012, the total shares issuable upon conversion of convertible notes payable would be 9,349,524 shares of the Company’s common stock.

Inventory is stated at the lower of cost (FIFO:

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As of December 31, 2012, the Company had no inventory.

Uncertainty in Income Taxes

The Company follows ASC 740-10, “Accounting for Uncertainty in Income Taxes” (“ASC 740-10”).

This interpretation requires recognition and measurement of uncertain income tax positions using a “more-likely-than-not” approach.

ASC 740-10 is effective for fiscal years beginning after December 15, 2006.

Management has adopted ASC 740-10 for 2007, and they evaluate their tax positions on an annual basis, and have determined that as of December 31, 2011, no additional accrual for income taxes is necessary.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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The Company plans to adopt this amended guidance on October 1, 2012 and at this time does not anticipate that it will have a material impact on the Company’s results of operations, cash flows or financial position.

In June 2011, FASB issued ASU No.

In September 2011, FASB issued ASU No.

2011-05, Presentation of Comprehensive Income , which amends the disclosure and presentation requirements of Comprehensive Income.

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In September 2011, FASB issued ASU 2011-08, Testing Goodwill for Impairment , which amended goodwill impairment guidance to provide an option for entities to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

After assessing the totality of events and circumstances, if an entity determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, performance of the two-step impairment test is no longer required.

After assessing the totality of events and circumstances, if an entity determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount;

performance of the two-step impairment test is no longer required.

This guidance is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011, with early adoption permitted.

Adoption of this guidance is not expected to have any impact on the Company’s results of operations, cash flows or financial position.

In July 2012, the FASB issued ASU 2012-02, Intangibles – Goodwill and Other (Topic 350):

Testing Indefinite-Lived Intangible Assets for Impairment, on testing for indefinite-lived intangible assets for impairment.

The new guidance provides an entity to simplify the testing for a drop in value of intangible assets such as trademarks, patents, and distribution rights.

The amended standard reduces the cost of accounting for indefinite-lived intangible assets, especially in cases where the likelihood of impairment is low.

The changes permit businesses and other organizations to first use subjective criteria to determine if an intangible asset has lost value.

The amendments to U.S.

GAAP will be effective for fiscal years starting after September 15, 2012.

The Company’s adoption of this accounting guidance does not have a material impact on the consolidated financial statements and related disclosures.

There were other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

2 unchanged sentences

On June 30, 2010, the authorized shares were increased to 90,000,000.

In October 2012, the Company increased the authorized common shares to 200,000,000.

The Company issued 870,000 unregistered shares of the Company’s stock for the three months ended March 31, 2010 to various consultants (including 450,000 shares to the CEO under the employment agreement) at a value ranging between $0.17 and $0.23 per share or $186,250.

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These shares were valued at $0.015 per share or $112,500.

During September 2011, the Company issued 200,000 registered shares of the Company’s common stock to a consultant for the services compensation.

During September 2011, the Company issued 200,000 registered shares of the Company’s common stock to a consultant for services compensation.

These shares were valued at $0.014 per share or $2,700.

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These shares were valued from $0.01 to $0.06 per share or $41,500 and were issued on February 22, 2012.

This value is reflected as a liability for stock to be issued on the balance sheet at December 31, 2011.

During April 2012, the Company issued 100,000 unregistered shares of the Company’s common stock to settle a notes payable and related accrued interest.

These shares were valued at $0.109 per share or $53,500.

During July 2012, a director was issued 2,000,000 unregistered shares of the Company’s common stock for director compensation.

These shares were valued at $0.024 per share or $48,000.

During July 2012, three consultants were issued 3,250,000 unregistered shares of the Company’s common stock for sales, financing and investor/public relations compensation.

These shares were valued at $0.024 per share or $78,000.

During July and September 2012, the Company issued 1,640,000 unregistered shares of the Company’s common stock, respectively, to settle a convertible note payable.

These shares were valued at $0.0025 per share or $4,100.

During September 2012, a former director was issued 250,000 unregistered shares of the Company’s common stock for director compensation.

These shares were valued at $0.024 per share or $5,500.

During October 2012, our chief executive officer was issued 15,000,000 unregistered shares of the Company’s common stock as part of his employment contract dated July 1, 2012.

These shares were valued at $0.015 per share or $225,000.

During October and November 2012, the Company issued 1,550,000 registered shares of the Company’s common stock to a consultant for legal compensation.

These shares were valued at $0.0179 per share or $27,675.

During October 2012, the Company issued 1,708,334 unregistered shares of the Company’s common stock to settle a convertible note payable plus accrued interest.

These shares were valued at $0.009 per share or $15,375.

During November 2012, the Company issued 2,000,000 registered shares of the Company’s common stock to an employee for service to the Company.

These shares were valued at $0.0125 per share or $25,000.

During November 2012, the Company issued 520,000 registered shares of the Company’s common stock to settle an accounts payable.

These shares were valued at $0.012 per share or $6,300.

During November and December 2012, the Company issued 5,000,000 unregistered shares of the Company’s common stock to settle two convertible notes payable.

These shares were valued at $0.0025 per share or $12,608.

During December 2012, the Company issued 399,011 unregistered shares of the Company’s common stock to settle a convertible note payable plus accrued interest.

These shares were valued at $0.009 per share or $3,566.

During December 2012, the Company issued 578,120 unregistered shares of the Company’s common stock to settle a convertible note payable plus accrued interest.

These shares were valued at $0.009 per share or $5,228.

As of December 31, 2012, the Company has 101,085,862 shares of common stock issued and outstanding.

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For the years ended December 31, 2012 and 2011 the Company incurred $0 and $4,104, respectively, for rent expense to this company.

The Company was advanced funds from officers during the year ended December 31, 2008 and these amounts remains outstanding as of December 31, 2011.

These amounts are short-term in nature as they are due on demand, and the Company has not been charged interest.

The Company anticipates repayment of these advances within the next twelve months.

NOTE 5 - SHORT-TERM LOANS

In December 2008, the Company entered into three notes payable on demand in the amounts of $20,000 (CD$), $10,000 (CD$) and $24,990 (CD$).

All of these notes payable accrue interest at 5% per annum.

The Company has repaid $7,530 (CD$) on the $24,900 (CD$) note payable at the end of December 2008, and has $17,460 (CD$) remaining due.

In addition, the Company in the year ended December 31, 2009, was advanced another $123,277 (CD$).

In the year ended December 31, 2010, the Company was advanced $120,686 (CD$) (net) for additional working capital.

In the year ended December 31, 2011, the Company repaid $2,386 (CD$) in short-term notes to its President and converted $222,553 (CD$) principal and $25,974 interest into 2,324,600 shares of the Company’s common stock.

The total outstanding amount of principal and interest due on these notes as of December 31, 2011 was $72,774 (CD$) or $71,559 (US$).

Of this amount, $45,708 (US$) principle was advanced by the Company’s President and is noted as short-term loans – related party on the balance sheet.

NOTE 5 - SHORT-TERM LOANS – RELATED PARTY

On August 18, 2011, a related party advanced $1,500 to the Company.

The advance is evidenced by a demand promissory note bearing interest at 5% per annum.

The unpaid balance including accrued interest was $1,522 at December 31, 2011.

This noted is included as short-term loans – related party on the balance sheet.

On August 27, 2011, the Company’s President advanced $1,950 to the Company.

The advance is evidenced by a demand promissory note bearing interest at 5% per annum.

The unpaid balance including accrued interest was $1,974 at December 31, 2011.

The unpaid balance including accrued interest was $1,597 and $1,522 at December 31, 2012 and 2011, respectively.

This noted is included as short-term loans – related party on the balance sheet.

NOTE 6 - CONVERTIBLE NOTES PAYABLE

On March 27, 2009, the Company entered into a promissory note payable on demand for $10,000 (CD$).

The note accrued interest at 5% per annum.

On November 30, 2012, the Company amended the note to add a conversion feature that permits the holder, at any time, to convert the note into shares of the Company’s common stock at an exercise price of $.0025 per share.

As part of the new agreement, the holder of the note waived all interest including interest previously accrued.

During December 2011, $7,500 CAD was converted into 3,000,000 shares of the Company’s common stock at $0.0025 per share.

During December 2012 the remaining $2,500 CAD was converted into 1,000,000 registered shares of the Company’s common stock at $0.0025 per share to fully satisfy the promissory note.

On April 9, 2009, the Company entered into a promissory note payable on demand for $10,000 (CD$).

The note accrued interest at 5% per annum.

On April 30, 2012, the Company amended the note to add a conversion feature that permits the holder, at any time, to convert the note into shares of the Company’s common stock at an exercise price of $.0025 per share.

As part of the new agreement, the holder of the note waived all interest including interest previously accrued.

During November and December 2012, $10,000 CAD was converted into 4,000,000 registered shares of the Company’s common stock at $0.0025 per share to fully satisfy the promissory note.

On December 16, 2011, the Company was advanced $4,100 each from two unrelated parties.

1 unchanged sentence

In addition, at any time, the holders may convert the notes into shares of the Company’s common stock at an exercise price of $.0025 per share.

During July and September 2012, one of the convertible notes was converted into 1,000,000 unregistered shares and 640,000 registered shares of the Company’s common stock, respectively, at $0.0025 per share.

The unpaid balance including accrued interest was $4,314 and $8,218 at December 31, 2012 and December 31, 2011, respectively.

On March 31, 2012, the Company issued a $15,000 convertible note to an individual.

The loan bears interest at 5% and has a maturity date of December 31, 2012.

In addition, at any time, the holder may convert the note into shares of the Company’s common stock at an exercise price of $.009 per share.

During October 2012, $15,000 plus $375 for accrued interest was converted into 1,708,334 registered shares of the Company’s common stock at $0.009 per share to fully satisfy the promissory note.

On April 20, 2012, the Company issued a $2,500 convertible note to an individual.

The loan bears interest at 5% and has a maturity date of October 20, 2012.

In addition, at any time, the holder may convert the note into shares of the Company’s common stock at an exercise price of $.009 per share.

The unpaid balance including accrued interest was $2,641 at December 31, 2012.

On April 20, 2012, the Company issued a $5,000 convertible note to an individual.

The loan bears interest at 5% and has a maturity date of October 20, 2012.

In addition, at any time, the holder may convert the note into shares of the Company’s common stock at an exercise price of $.009 per share.

During December 2012, $5,000 plus $228 for accrued interest was converted into 578,120 registered shares of the Company’s common stock at $0.009 per share to fully satisfy the promissory note.

On May 10, 2012, the Company issued a $2,600 convertible note to the Company’s CFO.

The loan bears interest at 5% and has a maturity date of November 15, 2012.

In addition, at any time, the Company’s CFO may convert the note into shares of the Company’s common stock at an exercise price of $.009 per share.

The unpaid balance including accrued interest was $2,714 at December 31, 2012.

On May 15, 2012, the Company issued a $3,500 convertible note to an individual.

The loan bears interest at 5% and has a maturity date of November 15, 2012.

In addition, at any time, the individual may convert the note into shares of the Company’s common stock at an exercise price of $.009 per share.

During December 2012, $3,500 plus $166 for accrued interest was converted into 399,011 registered shares of the Company’s common stock at $0.009 per share to fully satisfy the promissory note.

On July 18, 2012, the Company issued a $30,000 convertible note to an individual.

The loan bears interest at 5% and has a maturity date of December 18, 2012.

In addition, at any time, the individual may convert the note into shares of the Company’s common stock at an exercise price of $.007 per share.

The unpaid balance including accrued interest was $30,813 at December 31, 2012.

On August 22, 2012, the Company issued a $20,000 convertible note to an individual.

The loan bears interest at 5% and has a maturity date of January 22, 2013.

In addition, at any time, the individual may convert the note into shares of the Company’s common stock at an exercise price of $.007 per share.

The unpaid balance including accrued interest was $20,198 at December 31, 2012.

As of December 31, 2012, the total short-term loans - convertible amounted to $60,680 including $1,480 of accrued interest.

The conversion price of the notes were fixed and determinable on the date of issuance and as such in accordance with ASC Topic 815 “ Derivatives and Hedging ” (“ASC 815”), the embedded conversion options of the note were not considered derivative liabilities.

The beneficial conversion features of the convertible notes are at a price below fair market value.

The Company recorded interest expense of $34,296 year ended December 31, 2012, in the accompanying statement of operations for the beneficial conversion feature based on the fair market value of $0.01 per share of the Company’s common stock at December 31, 2012.

NOTE 7 - MAJOR CUSTOMERS

The Company generated no sales during the year ended December 31, 2011.

100% of the Company’s revenue was generated by one customer for the year ended December 31, 2010.

This customer was considered to be a major customer.

The Company generated no sales during the year ended December 31, 2012 and 2011.

NOTE 8 - PROVISION FOR INCOME TAXES

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Valuation allowance

NOTE 9 - LICENSE AGREEMENT

NOTE 9 - CONVERSION OF ACCOUNTS PAYABLE AND NOTES PAYABLE TO EQUITY

On September 11, 2008, the Company entered into a License Agreement with Oceanutrasciences Inc., a Canadian company (“ONS”) (the “Agreement”)/ The Agreement is for a term of three years from September 11, 2008 to September 11, 2011.

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Amortization expense for the year ended December 31, 2010 was $48,541.

The remaining $34,967 of unamortized license fees has been impaired by Management as of December 31, 2010.

The remaining $34,967 of unamortized license fees has been deemed impaired by Management as of December 31, 2010.

On May 15, 2012, the Company obtained a legal opinion that the $75,000 (CD$) balance due to ONS should not be recognized as an amount owed by Bio-Solutions and may be written off at December 31, 2011.

The legal opinion contains a four part justification, first, the contract was never fulfilled by ONS, second, the September 20 th 2009 ONS bankruptcy documents did not recognize the $75,000 (CD$) as an asset of ONS, third, subsection 10.1 of the Agreement provides for the right of one party to request the Agreement be resiliated in the event one party files for bankruptcy and finally, the contractual prescription in the province of Quebec, Canada, for similar contracts is three (3) years.

At December 31, the Company wrote-off the $75,000 as a conversion of accounts payable to equity in the accompanying Statement of Changes in Stockholders’ Equity.

The legal opinion contains a four part justification, first, the contract was never fulfilled by ONS, second, the September 20, 2009 ONS bankruptcy documents did not recognize the $75,000 (CD$) as an asset of ONS, third, subsection 10.1 of the Agreement provides for the right of one party to request the Agreement be resiliated in the event one party files for bankruptcy and finally, the contractual prescription in the province of Quebec, Canada, for similar contracts is three (3) years.

At December 31, 2011, the Company wrote-off the $73,748 (US$) as a conversion of accounts payable to equity.

On June 15, 2012, Gilles Chaumillon resigned as President, Chief Executive Officer and Director of the Company.

In addition, Mr.

Chaumillon agreed to settle his outstanding debt, interest and account payable balances of $227,811 for $10,000 payable in ten equal monthly installments of $1,000 beginning July 2012.

At June 30, 2012, the Company wrote-of the net amount of $217,811 as a conversion of accounts payable and notes payable to equity.

At December 31, 2012, Mr.

Chaumillon is owed $9,000.

NOTE 10 - INTELLECTUAL PROPERTY

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The acquisition from Type2 Defense, a Texas based sole proprietorship was for the issuance of 20,000,000 shares of the Company’s common stock.

Type2 Defense is a natural dietary supplement formulated to support healthy glucose levels for type 2 diabetics and pre-diabetics.

The shares are valued at $200,000 or $0.01 per share based on the closing price of the Company’s common stock on September 26, 2011.

The agreement also includes the issuance of 10,000,000 shares of the Company’s common stock upon achieving certain operational milestones and an additional 10,000,000 shares of Company’s common stock upon reaching 1,500 customers.

On November 4, 2011, an advance of 600,000 shares of the Company’s common stock related to the reaching the 1,500 customers’ milestone in the original agreement was approved by the board of directors.

The shares were valued at $0.013 per share or $6,600 and included as intellectual property on the balance sheet.

On November 4, 2011, an advance of 600,000 shares of the Company’s common stock related to the reaching of 1,500 customers’ milestone in the original agreement was approved by the board of directors.

The shares were valued at $0.013 per share or $6,600 and included as intellectual property on the accompanying condensed balance sheet.

The issuance of 10,000,000 shares of the Company’s common stock upon reaching 1,500 customers was reduced by the advance to 9,400,000 shares.

As of May 30, 2012, the agreement provisions for achieving operational milestones for 10,000,000 shares of the Company’s common stock and reaching 1,500 customers for 9,400,000 shares of the Company’s common stock have not been achieved.

As of March 22, 2013, the agreement provisions for achieving operational milestones for 10,000,000 shares of the Company’s common stock and reaching 1,500 customers for 9,400,000 shares of the Company’s common stock have not been achieved.

All assets other than the intellectual property had a fair value of $0, with the intellectual property being valued at $206,600.

The Company has not amortized this value as they deem the value to have an infinite useful life and will test the value at each year end for impairment.

The Company has not amortized this value as they deem the value to have an infinite useful life.

The Company performed an impairment test as of December 31, 2012 and concluded that based on discounted cash flows for the Type 2 product, the related intellectual property asset for $206,600 was not impaired.

NOTE 11 - FAIR VALUE MEASUREMENTS

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Instruments with primarily unobservable value drivers.

NOTE 12 - COMMITMENTS

On August 17, 2009, the Company entered into an employment agreement with their CEO.

The agreement has a one-year term, however can be extended for additional one-year terms unless terminated by either party.

The agreement was extended through August 17, 2011.

The CEO’s compensation under the agreement is for a $100,000 (CD$) salary as well as the issuance of 900,000 shares of stock.

450,000 of those shares were issued in August 2009 and the remaining 450,000 shares were issued in January 2010.

The employment agreement terminated on August 17, 2011 and was not renewed.

NOTE 12 - SUBSEQUENT EVENTS

On January 27, 2012, the Company issued a $1,000 (CAD) convertible note to the Company’s president.

The loan bears interest at 5% and has a maturity date of December 31, 2012.

In addition, at any time, the Company’s President may convert the note into shares of the Company’s common stock at an exercise price of $.0025 per share.

On March 31, 2012, the Company issued a $15,000 convertible note to an individual.

The loan bears interest at 5% and has a maturity date of September 30, 2012.

In addition, at any time, the holder may convert the note into shares of the Company’s common stock at an exercise price of $.009 per share.

On April 18, 2012, the holder of a November 10, 2009 promissory note for $10,000 (CAD) converted the note plus accrued interest of $833 (CAD) into 100,000 shares of the Company’s common stock to fully settle the debt.

On April 20, 2012, the Company issued a $2,500 convertible note to an individual.

The loan bears interest at 5% and has a maturity date of October 20, 2012.

During January 2013, the Company signed an agreement with a consultant for website services.

The terms of the agreement include a fee of $15,000 or 1,500,000 registered shares of the Company’s common stock in their S-8 registration filed March 2013.

The shares were valued at $0.01 per share.

The shares were issued on March 8, 2013.

During January 2013, a consultant was granted 2,000,000 registered shares of the Company’s common stock in their S-8 registration filed March 2013 for legal services to the Company.

The shares were valued at $0.013 per share or $26,000.

The shares were issued on March 8, 2013.

During January 2013 a consultant was issued 2,000,000 unregistered shares of the Company’s common stock for marketing services to the Company.

These shares were valued at $0.014 per share or $28,000.

During January 2013, a consultant was granted 625,000 registered shares of the Company’s common stock in their S-8 registration filed March 2013 for marketing services to the Company.

The shares were valued at $0.011 per share or $6,875.

The shares were issued on March 8, 2013.

During January, 2013, the Company issued a $12,000 promissory note to an individual.

The loan bears interest at 5% and is payable on demand.

During January 2013, a consultant was granted 4,500,000 registered shares of the Company’s common stock in their S-8 registration filed March 2013 for marketing services to the Company.

The shares were valued at $0.011 per share or $50,000.

The shares were issued on March 15, 2013.

During January 2013, the Company issued a $12,500 convertible note to an individual.

The loan bears interest at 5% and is payable on demand and may be converted at any time prior to December 31, 2013 into shares of the Company’s common stock.

The conversion price shall be 80% of the average closing price of the stock for the ten (10) business days preceding the conversion notice.

The conversion price shall not be lower than $0.01 per share.

This transaction will result in the recording a derivative liability in the Company’s financial statements during the Quarter ended March 31, 2013.

During January 2013, the Company issued a $7,500 convertible note to an individual.

The loan bears interest at 5% and has a maturity date of July 30, 2013.

In addition, at any time, the holder may convert the note into shares of the Company’s common stock at an exercise price of $.005 per share.

On April 20, 2012, the Company issued a $5,000 convertible note to an individual.

The loan bears interest at 5% and has a maturity date of October 20, 2012.

During February, 2013, the Company issued a $7,500 convertible note to an individual.

The loan bears interest at 5% and has a maturity date of August 20, 2013.

In addition, at any time, the holder may convert the note into shares of the Company’s common stock at an exercise price of $.005 per share.

On April 30, 2012, the Company amended a promissory note dated April 4 2009 for $10,000 (CAD) to add a conversion feature that permits the holder, at any time, to convert the note into shares of the Company’s common stock at an exercise price of $.0025 per share.

On April 30, 2012, the Company issued a $1,000 (CAD) convertible note to the Company’s president.

The loan bears interest at 5% and has a maturity date of October 26, 2012.

In addition, at any time, the Company’s President may convert the note into shares of the Company’s common stock at an exercise price of $.009 per share.

May 10, 2012, the Company issued a $2,600 (CAD) convertible note to the Company’s CFO.

The loan bears interest at 5% and has a maturity date of November 15, 2012.

In addition, at any time, the Company’s CFO may convert the note into shares of the Company’s common stock at an exercise price of $.009 per share.

May 15, 2012, the Company issued a $3,500 (CAD) convertible note to an individual.

The loan bears interest at 5% and has a maturity date of November 15, 2012.

In addition, at any time, the individual may convert the note into shares of the Company’s common stock at an exercise price of $.009 per share.

During January and February 2013, convertible promissory notes totaling $30,983 including interest was fully converted into 4,426,174 unregistered shares of the Company’s common stock at $0.007 per share.

During February 2013, the Company issued a $12,500 convertible note to an individual.

The loan bears interest at 5% and is payable on demand and may be converted at any time prior to January 31, 2014 into shares of the Company’s common stock.

The conversion price shall be 80% of the average closing price of the stock for the ten (10) business days preceding the conversion notice.

The conversion price shall not be lower than $0.01 per share.

This transaction will result in the recording a derivative liability in the Company’s financial statements during the Quarter ended March 31, 2013.

During February 2013, the Company began the first production run of the Type 2 Defense product.

The product will completed in in May 2013 with sales expected in May and June 2013.

During March 2013, the Company filed a Form S-8 with the Security and Exchange Commission.

The 2013 Stock Incentive Plan may issue up to 30,000,000 registered shares of the Company’s common stock for services to the Company.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data