Glucose Health, Inc. 10-K

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. This following information specifies certain forward-looking statements of management of the company. Forward-looking statements are statements that estimate the happening of future events and are not based on historical fact. Forward-looking statements may be identified by the use of forward-looking terminology, such as “may”, “shall”, “could”, “expect”, “estimate”, “anticipate”, “predict”, “probable”, “possible”, “should”, “continue”, or similar terms, variations of those terms or the negative of those terms. The forward-looking statements specified in the following information have been compiled by our management on the basis of assumptions made by management and considered by management to be reasonable. Our future operating results, however, are impossible to predict and no representation, guarantee, or warranty is to be inferred from those forward-looking statements. 23 The assumptions used for purposes of the forward-looking statements specified in the following information represent estimates of future events and are subject to uncertainty as to possible changes in economic, legislative, industry, and other circumstances. As a result, the identification and interpretation of data and other information and their use in developing and selecting assumptions from and among reasonable alternatives require the exercise of judgment. To the extent that the assumed events do not occur, the outcome may vary substantially from anticipated or projected results, and, accordingly, no opinion is expressed on the achievability of those forward-looking statements. We cannot guarantee that any of the assumptions relating to the forward-looking statements specified in the following information are accurate, and we assume no obligation to update any such forward-looking statements. Critical Accounting Policies and Estimates . Our Management’s Discussion and Analysis of Financial Condition and Results of Operations section discusses our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments, including those related to revenue recognition, accrued expenses, financing operations, and contingencies and litigation. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The most significant accounting estimates inherent in the preparation of our financial statements include estimates as to the appropriate carrying value of certain assets and liabilities which are not readily apparent from other sources. These accounting policies are described at relevant sections in this discussion and analysis and in the notes to the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2012. Background Our Business On March 27, 2007, Bio-Solutions Corp. (the “Company”) was incorporated in the State of Nevada. The Company was a manufacturer of a pre-mix for chicken integrators called Nutra-Animal, a pre-mix anti-oxidant containing wheat middlings, vitamin E, calcium carbonate, silicone dioxyde, shrimp flour, sodium selenite and fish oil. The Company is also the distributor of GreenEx ™ in Africa. GreenEx ™ is a biological larvicide produced from a strain of Bacillus thuringiensis subspecies israelensis (Bti), a naturally occurring bacterium that produces a crystalline protein toxin (cystal) toxic for mosquitoes, vectors of Malaria. GreenEx ™ formulations are produced in the United States to strict manufacturing specifications, ensuring that the products are of high quality and without any harmful contaminants. On September 26, 2011, the Company acquired all the assets and intellectual property rights of Type2 Defense, a natural dietary supplement formulated to support healthy glucose levels for type 2 diabetics and pre-diabetics. During October 2011, the Company decided to abandon the former operations to focus solely on the Type2 Defense product. 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 during the quarter ending June 30, 2013. The Company elected to enter the development stage on October 1, 2011 and expects to emerge from the development stage during the quarter ending June 30, 2013. 24 Results of Operations. Results of operations for the year ended December 31, 2012 compared to year ended December 31, 2011 Revenues. We had no revenues or cost of revenues for the years ended December 31, 2012 and 2011. The Company’s focus for 2013 will be the launch of the Type 2 Defense dietary supplement. Operating Expenses. For the year ended December 31, 2012, we had total operating expenses of $361,423. This included professional fees of $355,656, and general and administrative expenses of $5,767. For the year ended December 31, 2011, we had total operating expenses of $888,812. This included professional fees of $788,855, general and administrative expenses of $14,669 and amortization expense and impairment totaling $85,288. The 59% decrease from the year ended December 31, 2011 is primarily attributable to lower stock based compensation for professional fees as the Company moves towards generating cash from operations. Other Expenses. We had $37,655 interest expense for the year ended December 31, 2012 compare to $10,374 interest expense for the year ended December 31, 2011. The 263% increase is attribution to new convertible loans used for working capital. Net Loss . For the year ended December 31, 2012, we had a net loss of $399,078 and a net loss per share of $0.005. In comparison, for the year ended December 31, 2011 we had a net loss of $899,186, and a net loss per share of $0.02 per share. We expect to continue to incur net losses for the foreseeable future and until we generate significant revenues. Liquidity and Capital Resources. At December 31, 2012, our current assets consisted of $1,076 in cash. At December 31, 2012, we had no accounts receivables and our other assets totaling $206,600 applicable to the Type 2 Defense intellectual property. Our total assets were $207,676. At December 31, 2011, our current assets totaled $27,082 consisting of $82 in cash and $27,000 in prepaid expenses. At December 31, 2011, we had no accounts receivables and our other assets totaling $206,600 applicable to the Type 2 Defense intellectual property. Our total assets were $233,682. Our current liabilities at December 31, 2012 totaled $185,476 consisting of $123,199 in accounts payable and accrued expenses, $1,597 for short term loans from related parties and $60,680 in convertible short-term loans. Our current liabilities at December 31, 2011 totaled $419,704 consisting of $296,429 in accounts payable and accrued expenses, $41,500 for stock to be issued, $19,666 in short term loans, $49,158 for short term loans from related parties and $8,200 in convertible short-term loans. An officer was due $4,751. The decrease of $224,228 is primarily related to the resignation Gilles Chaumillon as President, Chief Executive Officer and Director of the Company. Mr. Chaumillon agreed to settle his outstanding debt, interest and account payable balances of $227,811 for $10,000. 25 We had a working capital deficit in both 2012 and 2011 for $184,400 and $392,622, respectively. Unless we secure additional funding, of which there can be no assurance, we will not be able to satisfy our ongoing expenses. At December 31, 2012 and 2011, we had no other liabilities and no long term commitments or contingencies. 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. On August 27, 2011, the Company’s former President advanced $1,950 to the Company. The advance is evidenced by a demand promissory note bearing interest at 5% per annum. This note was canceled as part of the former President’s resignation agreement in June 2012. On December 16, 2011, the Company was advanced $4,100 each from two unrelated parties. The advances are evidenced by two equal convertible promissory notes bearing interest at 5% per annum with a due date on December 31, 2012. 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. On January 27, 2012, the Company issued a $1,000 (CAD) convertible note to the Company’s former 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. This note was canceled as part of the former President’s resignation agreement in June 2012. On September 30, 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 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. 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. On April 30, 2012, the Company issued a $1,000 (CAD) convertible note to the Company’s former 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. This note was canceled as part of the former President’s resignation agreement in June 2012. On May 10, 2012, the Company issued a $2,600 convertible note to the Company’s chief executive officer. 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. 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. 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. 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. 26 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, 2012. The Individual advanced $3,000 in August 2012, $10,000 in October 2012 and $7,000 in November 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. On January 25, 2013, the Company issued a $12,000 promissory note to an individual. The loan bears interest at 5% and is payable on demand. On January 28, 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. On January 30, 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 February 20, 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 February 26, 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. Plan of Operation During 2013, we expect to expand our business with Type2 Defense product. The legal and accounting costs of being a public company will continue to impact our liquidity and we will need to obtain funds to pay those expenses. Other than the anticipated increases in legal and accounting costs due to the reporting requirements of being a reporting company, we are not aware of any other known trends, events or uncertainties, which may affect our future liquidity. Our auditors have questioned our ability to continue operations as a “going concern”. We hope to obtain significant revenues from future product sales. In the absence of significant sales and profits, we will seek to raise additional funds to meet our working capital needs principally through the additional sales of our securities. However, we cannot guarantee that we will be able to obtain sufficient additional funds when needed, or that such funds, if available, will be obtainable on terms satisfactory to us. As a result, our auditors believe that substantial doubt exists about our ability to continue operations. Our Plan of Operation for the Next Twelve Months. We have finalized our formulations; production of our Type 2 production has commenced and we are in the final stages of launching our website. With the completion of our first production run in April 2013 and launch of our website, we expect to generate sales by the fiscal quarter ended June 30, 2013. Fulfillment will be handled by a third party fulfillment house. We will most likely require additional working capital to fully implement our business plan for 2013. We have no commitment for additional funding. Our business strategy for the next twelve months will be to implement on-line sales of our Type2 Defense product. 27 At December 31, 2012 we had nominal cash which will not be sufficient to satisfy our working capital requirements for the next twelve months. We cannot forecast with any degree of certainty anticipated revenues or cash flow. Our forecasts and operations will involve risks and uncertainties which we are unable to predict and actual results could fail. We will require additional capital to continue operations. If we cannot secure additional capital or generate significant revenues we may cease operations in which case you will lose your investment. We intend to pursue capital through public or private financing as well as borrowings and other sources, such as our officer, directors and principal shareholders. We cannot guarantee that additional funding will be available on favorable terms, if at all. If adequate funds are not available, then our ability to continue or expand our operations may be significantly hindered. If adequate funds are not available, our officer, directors and principal shareholders may contribute capital to the Company in the form of debt financing or equity contributions. However, our officer, directors and principal shareholders are not committed to contribute funds to pay for our expenses. There can be no assurance that we will be able to secure additional debt or equity financing and if available, will be offered on terms acceptable to the Company. Even assuming that we secure adequate financing, there can be no assurance that we will be profitable at any time in the future. Off-Balance Sheet Arrangements. We have no off-balance sheet arrangements. Item 7A. Quantitative and Qualitative Disclosures about Market Risk. Not applicable. 28