Glucose Health, Inc. 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation 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. 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 Policy 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. The following discussion of our financial condition and results of operations should be read in conjunction with our audited financial statements for the year ended December 31, 2012 together with notes thereto as previously filed with our Annual Report on Form 10-K on March 22, 2013. In addition, these accounting policies are described at relevant sections in this discussion and analysis and in the notes to the financial statements included in our Quarterly Report on Form 10-Q for the period ended June 30, 2013. 3 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 dioxide, 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 June 30, 2010, the board of directors approved the increase of the authorized shares of common stock from 75,000,000 to 90,000,000. In addition the board approved a 1.20 to 1 stock split. All shares have been reflected retroactively in accordance with SAB Topic 14C. 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 Company has elected to enter the development stage on October 1, 2011 and will emerge from the development stage during July 2013. During October 2012, the board of directors increased the number of common shares authorized from 90,000,000 to 200,000,000 shares. The first production run of the Type 2 Defense product was completed during June 2013 and the initial shipment occurred in early July 2013. For the three months ended June 30, 2013 as compared to the three months ended June 30, 2012 During June 2013, we completed our initial production run of approximately 1,800 cases of our Type2 Defense Product and launched our website. With the launch of our website, we began generating sales during July 2013. Fulfillment will be handled by a third party fulfillment house. We will likely require additional working capital to fully implement our business plan for 2013. We have no commitment for additional funding. Results of Operations For the three months ended June 30, 2013 as compared to the three months ended June 30, 2012. Results of Operations Revenues. We generated no revenues for the three months ended June 30, 2013 and 2012. We hope to generate substantial revenues, continue operations and implement our business plan by the end of December 31, 2013. For the three months ended June 30, 2013 and 2012, we had no gross profit. 4 Operating Expenses. For the three months ended June 30, 2013, we had total operating expenses of $285,566, as compared to total operating expenses of $21,274 for the three and six months ended March 31, 2012. The increase of $264,292 in operating expenses between the two periods is primarily due to an approximate $268,000 increase in professional fees paid for by the issuance of common stock, offset by an approximate $3,000 decrease for other professional fees. We expect our operating expense to increase as we market our product and revenues grow. We will continue to incur significant legal and accounting expenses related to being a public company. Net Loss. For the three months ended June 30, 2013, after interest expense of $59,068, we had a net loss of $344,634 or $0.003 per share. In comparison, for the three months ended March 31, 2012, after interest expense of $163,323, we had a net loss of $184,597 or $0.003 per share. We expect to continue to incur net losses for the foreseeable future and until we generate significant revenues. For the six months ended June 30, 2013 as compared to the six months ended June 30, 2012. Revenues. We generated no revenues for the six months ended June 30, 2013 and 2012. For the six months ended June 30, 2013 and 2012, we had no gross profit. Operating Expenses For the six months ended June 30, 2013, we had total operating expenses of $478,073, as compared to total operating expenses of $28,254 for the six months ended March 31, 2012. The increase of $449,819 in operating expenses between the two periods is primarily due to an approximate $428,000 increase in professional fees paid for by the issuance of common stock, an approximate $14,000 increase for other professional fees and an approximate $8,000 increase in other general and administrative expenses. We expect our operating expense to increase as we market our product and revenues grow. We will continue to incur significant legal and accounting expenses related to being a public company. Net Loss. For the six months ended June 30, 2013, after interest expense of $102,257, we had a net loss of $580,330 or $0.005 per share. In comparison, for the six months ended March 31, 2012, after interest expense of $164,057, we had a net loss of $192,311 or $0.003 per share. We expect to continue to incur net losses for the foreseeable future and until we generate significant revenues. Liquidity and Capital Resources As of June 30, 2013 our current assets totaled $60,416 consisting of $16,513 in cash and $43,903 of inventory for our initial production run of our Type 2 Defense product. Our other assets totaled $431,600 applicable to the Type 2 Defense intellectual property. Our current liabilities were $234,699 as of June 30, 2013, which was represented by accounts payable and accrued expenses of $112,320, a short term loan of $12,250, short terms loan to a related party of $1,635, and convertible notes payable of $108,494. We had no other liabilities and no long term commitments or contingencies as of June 30, 2013. We had a working capital deficit of $174,283 at June 30, 2013. Unless we secure additional funding, of which there can be no assurance, we will not be able to satisfy our ongoing expenses. On January 25, 2013, we issued a $12,000 promissory note to an individual. The loan bears interest at 5% and is payable on demand. On January 28, 2013, we 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 our 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, we 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 our common stock at an exercise price of $.005 per share. 5 On February 20, 2013, we 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 our common stock at an exercise price of $.005 per share. On February 26, 2013, we 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 our 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 April 30, 2013, the Company issued a $10,000 convertible note to an individual. The loan bears interest at 5% and has a maturity date of October 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 30, 2013, the Company issued a $10,000 convertible note to an individual. The loan bears interest at 10% and has a maturity date of October 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 $.01 per share. On May 27, 2013, the Company issued a $12,500 convertible note to an individual. The loan bears interest at 5% and has a maturity date of November 27, 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 June 10, 2013, the Company issued a $6,500 convertible note to an individual. The loan bears interest at 5% and has a maturity date of August 11, 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 $.0065 per share. On June 10, 2013, the Company issued a $6,222 convertible note to an individual. The loan bears interest at 5% and has a maturity date of August 11, 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 $.0065 per share. On June 10, 2013, the Company issued a $6,500 convertible note to an individual. The loan bears interest at 5% and has a maturity date of August 11, 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 $.0065 per share. On June 18, 2013, the Company issued a $12,500 convertible note to an individual. The loan bears interest at 5% and has a maturity date of December 18, 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. 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. 6 Our Plan of Operation for the Next Six Months. During June we produced approximately 1,800 boxes of our Type2 Defense product. Product sales commenced in early July from our website and third party websites including Amazon.com. The product will sell from $44.95 to $49.95 per box. 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 six months will be to implement on-line sales of our Type2 Defense product. At June 30, 2013 we had nominal cash which will not be sufficient to satisfy our working capital requirements for the next six 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. 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 3. Quantitative and Qualitative Disclosure About Market Risk Not applicable 7