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Item 7. Management’s Discussion and Analysis

2015-03-30 compared with 2014-06-25 · 186 added, 219 removed, 50 unchanged (89% of the section changed)

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.

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 .

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.

Prior period correction in the three months ended December 31, 2013

Beginning in the three months ended June 30, 2012 and through the three months ended September 30, 2013, the Company improperly valued the potential beneficial conversion option of the Company’s convertible notes payable.

Based on ASC 470-20-30-16 through 30-18, the beneficial conversion option should have been valued based on the fair market value on the date of issuance and recorded as a debt discount.

The debt discount should have been amortized over the term of the convertible note (longest term was 6 months).

The accumulated impact of the correction was a charge to interest expense of $141,267 and a charge to debt discount on notes payable of $18,508 offset by a credit to additional paid in capital of $159,775.

In-addition, during the quarter ended June 30, 2013, the Company improperly recorded stock-based compensation issued to the Company’s former chief executive officer upon achievement of operational milestones for the Type2Defense product (see Note 10) as intellectual property.

Based on ASC 718-10 and ASC 505-50 this amount should have been classified as stock based compensation on the date earned.

The accumulated impact of the correction on the financial statements was a charge to stock based compensation of $231,600 and a credit to intellectual property of $231,600.

In accordance with the Securities and Exchange Commission's Staff Accounting Bulletin, or SAB, No.

99, Materiality, and SAB No.

108, the Company assessed the materiality of these charges to its financial statements for the quarters ended June 30, 2012 through September 30, 2013 and the year ended December 31, 2013, using both the roll-over method and iron-curtain method as defined in SAB No.

The Company concluded the effect of understating interest expense and share-based compensation was not material to its financial statements for the quarters ended June 30, 2012 through September 30, 2013 and the year ended December 31, 2013 and, as such, those financial statements are not materially misstated.

The Company also concluded that providing for the correction of the understatement in 2013 would not have a material effect on its financial statements for the year ending December 31, 2013.

The out-of-period adjustment at December 31, 2013 for the improperly valued beneficial conversion option of the Company’s convertible notes payable was a charge to interest expense of $141,267 and charge to debt discount on notes payable of $18,508 offset by a credit to additional paid in capital of $159,775 in the accompanying balance sheet and statement of operations.

The out-of-period adjustment at December 31, 2013 for improperly recording stock-based compensation issued to the Company’s former Chief executive officer upon achievement of operational milestones as intellectual property was a charge to stock based compensation of $231,600 and a credit to intellectual property of $231,600 in the accompanying balance sheet and statement of operations.

The impact of the misstatements on the previously issued financial statements and the effect of correcting the misstatements during the three months ended December 31, 2013 are summarized in Note 2 of the accompanying financial statements and notes.

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments and other short-term investments with maturity of three months or less, when purchased, to be cash equivalents.

There were no cash equivalents as of December 31, 2013 and 2012.

The Company maintains cash balances at one financial institution that is insured by the Federal Deposit Insurance Corporation.

Recoverability of Long-Lived Assets

The Company reviews their long-lived assets on a periodic basis, namely intellectual property, 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.

If such assets are determined to be impaired, the impairment recognized is the amount by which the carrying value of the assets exceeds the fair value of the assets.

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.

The Company evaluates the carrying value of goodwill during the fourth quarter of each year and between annual evaluations if events occur or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount.

Such circumstances could include, but are not limited to (1) a significant adverse change in legal factors or in business climate, (2) unanticipated competition, or (3) an adverse action or assessment by a regulator.

When evaluating whether goodwill is impaired, the Company compares the fair value of the reporting unit to which the goodwill is assigned to the reporting unit’s carrying amount, including goodwill.

The fair value of the reporting unit is estimated using a combination of the income, or discounted cash flows, approach and the market approach, which utilizes comparable companies’ data.

If the carrying amount of a reporting unit exceeds its fair value, then the amount of the impairment loss must be measured.

The impairment loss would be calculated by comparing the implied fair value of reporting unit goodwill to its carrying amount.

In calculating the implied fair value of reporting unit goodwill, the fair value of the reporting unit is allocated to all of the other assets and liabilities of that unit based on their fair values.

The excess of the fair value of a reporting unit over the amount assigned to its other assets and liabilities is the implied fair value of goodwill.

We make critical assumptions and estimates in completing impairment assessments of goodwill and other intangible assets.

Our cash flow projections look several years into the future and include assumptions on variables such as future sales and operating margin growth rates, economic conditions, market competition, inflation and discount rates.

A 10% decrease in the estimated discounted cash flows for the reporting units tested would result in an impairment that is not material to our results of operations.

A 1.0 percentage point increase in the discount rate used would also result in an impairment that is not material to our results of operations.

We amortize the cost of other intangible assets over their estimated useful lives, which range up to ten years, unless such lives are deemed indefinite.

Intangible assets with indefinite lives are tested in the third quarter of each fiscal year for impairment, or more often if indicators warrant.

During the fiscal year ended December 31, 2013, the Company recorded impairment charge related to other intangible assets in the amount of $200,000.

During fiscal year 2012, we recorded no impairment charges related to other intangible assets.

Fair Value of Financial Instruments

The carrying amount reported in the balance sheets for cash, accounts payable, accrued expenses, and short-term notes payable approximate fair value because of the immediate or short-term maturity of these financial instruments.

The Company does not utilize derivative instruments.

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.

This amount is recorded as a debt discount and amortized over the life of the debt.

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

Revenue Recognition

The Company currently has no revenue.

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

Persuasive evidence of an arrangement exists;

delivery has occurred or services have been rendered;

the seller’s price to the buyer is fixed or determinable, and

collectable is reasonably assured.

Share Based Compensation

The Company accounts for share-based compensation in accordance with the fair value recognition provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No.

For employees, directors and non-employees, the fair value of the stock compensation is based upon the measurement date as determined at either (a) the date at which a performance commitment is reached, or (b) at the date at which the necessary performance to earn the equity instruments is complete.

The Company has not issued any stock option or warrants.

Inventory is stated at the lower of cost (FIFO:

first-in, first-out) or market, and includes raw materials and finished goods.

The cost of finished goods includes the cost of packaging supplies, direct and indirect labor and other indirect manufacturing costs.

As of December 31, 2013, the Company had inventory of $24,879 comprise solely of the Type2Defense product.

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.

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

The Company elected to enter the development stage on October 1, 2011.

The first production run of the Company’s Type 2 Defense product was completed during June 2013.

On July 8, 2013 the Company announced our product was available for on-line sales on Amazon.com.

On July 9, 2013, the Company announced our product was available for on-line sales from our www.Type2Defense.com website.

The first sale was completed in July 2013.

As the Company only had nominal sales in the three months ended September 30, 2013, they have remained in the development stage.

The Company will closely monitor their sales and determine at which point in time they will emerge from the development stage.

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 nominal 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 2014.

We have no commitment for additional funding.

Cautionary Note Regarding Forward Looking Statements

Some of the statements in this report are “forward-looking statements.” These forward-looking statements involve certain known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements.

The words “believe,” “expect,” “anticipate,” “intend,” “plan,” and similar expressions identify forward-looking statements.

We caution you not to place undue reliance on these forward-looking statements.

We undertake no obligation to update and revise any forward-looking statements or to publicly announce the result of any revisions to any of the forward-looking statements in this report to reflect any future or developments.

However, the Private Securities Litigation Reform Act of 1995 is not available to us as a penny stock issuer and thus we may not rely on the statutory safe harbor from liability for forward-looking statements.

Further, Section 27A(b)(2)(D) of the Securities Act and Section 21E(b)(2)(D) of the Securities Exchange Act expressly state that the safe harbor for forward looking statements does not apply to statements made in connection with any offering.

Plan of Operation

On January 10, 2014, the Company’s Board of Directors unanimously voted to reverse split the Company’s common stock on the basis of one share of the Company’s common stock for each 10 shares outstanding while maintaining the authorized capital structure of the Company at 200,000,000 shares.

The Board resolution set the date of record for shareholder approval on January 14, 2014.

As of January 29, 2014, the Company obtained the written consent in lieu of a meeting of the shareholders to authorize a reverse split of the Company’s common stock.

The Board resolution set the date of record for shareholder approval for January 14, 2014.

As of January 29, 2014, the Company obtained written consent in lieu of a meeting of the shareholders to authorize a reverse split of the Company’s common stock.

Shareholders owning a total of 100,992,469 shares of the Company’s common stock voted in favor of the reverse split.

2 unchanged sentences

On February 4, 2014, the Company filed a Certificate of Change with the State of Nevada effecting a 1-for-10 reverse split pursuant to which every ten shares of the Company’s common stock were combined and converted into one share of the Company’s common stock (with all fractional shares resulting there from being rounded up to the next whole share) with the total number of shares of the Company’s authorized common stock remaining at 200,000,000 shares.

The effective date of the above corporate action was February 26, 2014, as approval by the Financial Industry Regulatory Authority.

Results of Operations.

Results of operations for the year ended December 31, 2013 compared to year ended December 31, 2012

We generated revenues of $224 for the year ended December 31, 2013 compare to no revenues for the year ended December 31, 2012.

We hope to generate substantial revenues, continue operations and implement our business plan by July 31, 2014.

The Company’s focus for 2014 will be the launch of the Type 2 Defense dietary supplement.

For the year ended December 31, 2013 we reported a $2,091 gross loss as a result our cost of product and warehousing expenses compared to no gross loss for the year ended December 31, 2012.

Operating Expenses.

For the year ended December 31, 2013, we had total operating expenses of $1,267,193 as compared to total operating expenses of $361,423 for the year ended December 31, 2012.

The increase of $905,770 in operating expenses between the two periods is primarily due to an approximate $614,000 increase in professional fees paid for by the issuance of common stock for achieving certain operational milestones in the Type2Defense acquisition, investor relations, marketing and other services, a $200,000 write-off for our impaired Type2Defense intellectual property, an approximate $57,000 increase for other professional fees, an approximate $15,000 increase for sample shipments for marketing activities and an approximate $19,000 increase in other general and administrative expense.

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.

Other Expenses.

We had $168,862 interest expense for the year ended December 31, 2013 compared to $37,655 interest expense for the year ended December 31, 2012.

The $131,207 or 348% increase is attribution to new convertible loans used for working capital and the $58,273 out-of-period adjustment at December 31, 2013 for the improperly valued beneficial conversion option of the Company’s convertible notes payable (see Note 2 in the Notes to the Financial Statements).

In addition, we had a $21,000 loss from conversion of debt for the year ended December 31, 2013.

For the year ended December 31, 2013, we had a net loss of $1,459,146 and a net loss per share of $0.10.

In comparison, for the year ended December 31, 2012 we had a net loss of $399,078, and a net loss per share of $0.05 per share.

We expect to continue to incur net losses for the foreseeable future and until we generate significant revenues.

The effective date of the above corporate action was February 26, 2014.

On October 1, 2014, Murray Fleming was appointed the Company’s Chief Executive Officer for the 12 month period ending October 1, 2015.

Fleming was compensated with 300,000 unregistered shares of the Company’s common stock.

Additionally, on the same date, the Company entered into an Intellectual Property Purchase Agreement to purchase the “Glucose Health Natural Blood Sugar Maintenance” product from a company beneficially owned by Mr.

Fleming for 300,000 unregistered shares of the Company’s common stock.

On October 1, 2014, Mr.

Fleming beneficially owned 600,000 shares or 50.1% of the outstanding shares of the Company’s common stock, which resulted in a change in control of the Company.

Although we intend to market our new Glucose Health Natural Blood Sugar Maintenance ™ product to retail customers on our product website www.glucosehealth.com and through other online marketplaces including Amazon.com, our principal marketing focus will be channel sales through national and regional pharmacy retailers.

In this regard, we retained an attorney specializing in compliance with Food and Drug Administration (FDA) regulations and implemented a series of recommended compliance procedures including facility registration, in part, to help us achieve such channel sales.

On October 30, 2014, the board of directors of the Company voted to reverse split the Company’s common stock on the basis of one share of the Company’s common stock for each 50 shares outstanding while maintaining the authorized capital structure of the Company at 200,000,000 shares;

to authorize 1,000 shares of preferred stock with “blank check” rights;

and to change the Company’s name from Bio-Solutions Corp.

to Glucose Health, Inc.

(the “corporate action”).

The board resolution set the date of record for shareholder approval of the corporate action for October 31, 2014 and the effective date of the corporate action for November 19, 2014.

As of October 31, 2014, the Company obtained written consent in lieu of a meeting of shareholders to authorize the corporate action.

Shareholders owning a total of 30,596,154 shares of the Company’s common stock voted in favor of the corporate action.

There were a total of 60,132,271 shares of common stock issued and outstanding as of October 31, 2014 (the date of record).

The number of shares of common stock voting in favor of the corporate action was sufficient for approval.

On November 5, 2014, the Company filed a Certificate of Amendment to its Articles of Incorporation, with the Nevada Secretary of State effecting, as of November 19, 2014, the 1-for-50 reverse split pursuant to which every fifty shares of the Company’s common stock were combined and converted into one share of the Company’s common stock (with all fractional shares being rounded up to the next whole share) with the total number of shares of the Company’s authorized common stock remaining at 200,000,000 shares;

effecting the authorization of 1,000 shares of preferred stock with “blank check” rights;

and effecting the change of the Company’s name from Bio-Solutions Corp.

to Glucose Health, Inc.

On November 20, 2015, the board of directors voted to designate Series A Special Preferred Shares consisting of 1000 shares of preferred stock with special voting rights whereby the holder(s) may exercise their right to vote on all shareholder matters representing the number of votes equal to all shares of common stock then issued and outstanding, plus an additional ten thousand (10,000) shares.

Additionally, the board of directors voted to extend the existing consulting contract with the Company’s CEO, Murray Fleming, for an additional 12 months, without further compensation, in exchange for the issuance to Mr.

Fleming, of the 1000 Series A Special Preferred Shares.

A Certificate of Designation for the Series A Special Preferred Shares was filed with the Nevada Secretary of State and effective on December 1, 2014.

On December 15, 2014, the Company submitted its application to OTC Markets Group Inc.

for inclusion in the OTCQB tier of quoted securities.

In addition, the Company’s new ticker symbol, GLUC, was included on the Financial Industry Regulatory Authority’s (FINRA) Daily List, with an effective date of December 15, 2014.

On January 07, 2015 the Company announced it has completed implementation of Food and Drug Administration (FDA) Current Good Manufacturing Practices (CGMP).

The Dietary Supplement (DS) CGMP rule in 21 CFR part 111 of the FDA's regulations requires companies which manufacture, package, label, or hold a dietary supplement to establish and follow current good manufacturing practice to ensure the quality of the dietary supplement and to ensure that the dietary supplement is packaged and labeled as specified in the master manufacturing record.

The first production run of the Company’s Glucose Health Natural Blood Sugar Maintenance ™ product commenced during January 2015 with an estimated completion date in March 2015.

The Company’s first purchase order of product amounting to approximately 20% of the first production run was executed during January 2015, pending final completion of the first production run.

On January 27, 2015 the Company announced the filing of its initial application for trademark protection related to its Glucose Health line of dietary products, with the United States Trademark and Patent Office.

If the Company’s application is successful and a trademark is awarded by the USPTO, a legal presumption of the Company’s ownership nationwide of “Glucose Health”, and the exclusive right to use a trademark on or in connection with all Glucose Health branded products, as set forth in the registration, will exist.

On February 10, 2015, Murray Fleming, the Company’s Chief Executive Officer was appointed the Company’s Chief Financial Officer.

Fleming replaces James Hodge the Company’s interim Chief Financial Officer.

Hodge will remain the Company’s Chairman of the board of directors.

On February 18, OTC Markets Group Inc.

issued a press release announcing the inclusion of Glucose Health, Inc.

in the OTCQB venture marketplace tier, trading under the symbol GLUC.

On February 24, 2015, the Company announced the completion of the FDA’s facility registration procedure.

Our Plan of Operation for the Next Twelve Months.

On October 1, 2014, we elected to suspend all development of our Type2 Defense product and acquire the Glucose Health Natural Blood Sugar Maintenance™ product.

As of the current period, our remaining inventory of Type2 Defense on-hand is -0- and our remaining inventory placed with our online sales and fulfillment partner is 858 cases.

We do not intend to manufacture additional Type2 Defense product.

Our principal business strategy for the next twelve months will be to implement a marketing and sales strategy focused on securing repeat orders from national and regional pharmacy retailers for our Glucose Health Natural Blood Sugar Maintenance™ products.

In this regard, we retained an attorney specializing in compliance with Food and Drug Administration (FDA) regulations and procedures, necessary, in part, to achieve such channel sales, to assist us.

In addition, we intend to implement online sales of our Glucose Health product targeted to retail customers via our product website and through online marketplaces including Amazon.com.

At December 31, 2014 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 our 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 continue to source capital from the two private equity companies currently providing financing to us on a monthly basis.

We cannot guarantee that such 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.

During 2015, we expect to expand our business with the Glucose Health Natural Blood Sugar Maintenance™ 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.

Liquidity and Capital Resources.

At December 31, 2013, our current assets consisted of $711 in cash and $24,879 of inventory for our initial production run of our Type 2 Defense product.

At December 31, 2013, we had no accounts receivable.

At December 31, 2014, our current assets consisted of $4,871 in cash, 857.5 case of remaining inventory from our initial production run of 1784 cases of our Type2 Defense product, which was written down to $0 and $38,859 for prepaid consultant compensation.

At December 31, 2014, we had no accounts receivable and our other assets totaled $300 applicable to our Glucose Health Natural Blood Sugar Maintenance™ product intellectual property.

Our total assets were $44,030.

At December 31, 2012, our current assets totaled $1,076 consisting of cash.

At December 31, 2012, we had no accounts receivable and our other assets totaling $206,600 applicable to the Type 2 Defense intellectual property.

At December 31, 2013, our current assets consisted of $711 in cash and $24,879 of inventory from our initial production run of 1784 cases of our Type2 Defense product.

At December 31, 2013, we had no accounts receivable and other assets.

Our total assets were $25,590.

Our current liabilities at December 31, 2013 totaled $223,348 consisting of $144,633 in accounts payable and accrued expenses, $6,000 for a short term loan, $1,672 for short term loans from related parties and $71,043 in convertible short-term loans.

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.

We had a working capital deficit in both 2013 and 2012 for $197,758 and 184,400, respectively.

Unless we secure additional funding, of which there can be no assurance, we will not be able to satisfy our ongoing expenses.

Our current liabilities at December 31, 2014 totaled $324,582 consisting of $154,659 in accounts payable and accrued expenses, $7,747 for short term loans, $23,927 in related party convertible short-term loans and $138,249 in convertible short-term loans.

Our current liabilities at December 31, 2013 totaled $223,348 consisting of $144,633 in accounts payable and accrued expenses $6,000 for a short-term loan, $1,672 for a short-term loan from a related party and $71,043 in convertible short-term loans.

We had a working capital deficit for 2014 and 2013 for $280,852 and $197,758, respectively.

We rely upon funding from two private equity firms.

Unless we continue secure additional funding from these firms, or others, of which there can be no assurance, we will not be able to satisfy our ongoing expenses.

At December 31, 2014 and 2013, we had no other liabilities and no long term commitments or contingencies.

Material Commitments

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, 2013.

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 former 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.

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 30, 2013, we issued a $7,500 convertible note to an individual.

On January 30, 2013, we issued a $7,500 convertible note to a corporation.

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.

On February 20, 2013, we issued a $7,500 convertible note to an individual.

On February 20, 2013, we issued a $7,500 convertible note to a corporation.

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.

On February 26, 2013, we issued a $12,500 convertible note to a corporation.

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.

1 unchanged sentence

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.

On April 30, 2013, the Company issued a $10,000 convertible note to a corporation.

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

1 unchanged sentence

On November 7, 2013, the Company agreed to modify the terms of the convertible promissory note to reduce the conversion price to $0.0015 per share.

On April 30, 2013, the Company issued a $10,000 convertible note to an individual.

On April 30, 2013, the Company issued a $10,000 convertible note to a corporation.

The loan bears interest at 10% and has a maturity date of October 30, 2013.

1 unchanged sentence

On November 7, 2013, the Company agreed to modify the terms of the convertible promissory note to reduce the conversion price to $0.0015 per share.

On May 27, 2013, the Company issued a $12,500 convertible note to an individual.

On May 27, 2013, the Company issued a $12,500 convertible note to a corporation.

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.

On June 10, 2013, the Company issued a $6,500 convertible note to a corporation.

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.

On June 10, 2013, the Company issued a $6,222 convertible note to a corporation.

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.

On June 10, 2013, the Company issued a $6,500 convertible note to a corporation.

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.

On June 18, 2013, the Company issued a $12,500 convertible note to a corporation.

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.

On August 2, 2013, the Company issued a $10,000 convertible note to an individual.

On August 2, 2013, the Company issued a $10,000 convertible note to a corporation.

The loan bears interest at 5% and has a maturity date of February 2, 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 December 10, 2013, the Company issued a $3,000 convertible note to an individual.

On December 10, 2013, the Company issued a $3,000 convertible note to a corporation.

The loan bears interest at 5% and has a maturity date of June 10, 2014.

In addition, at any time, the holder may convert the note into shares of the Company’s common stock at an exercise price of $.015 per share.

On December 10, 2013, the Company issued a $5,000 convertible note to an individual.

On December 10, 2013, the Company issued a $5,000 convertible note to a corporation.

The loan bears interest at 5% and has a maturity date of June 10, 2014.

In addition, at any time, the holder may convert the note into shares of the Company’s common stock at an exercise price of $.015 per share.

On April 8, 2014, the Company issued a $21,000 convertible note to an individual.

On April 8, 2014, the Company issued a $21,000 convertible note to a corporation.

The loan bears interest at 8% and has a maturity date of October 8, 2014.

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 May 8, 2014, the Company issued a $21,000 convertible note to an individual.

On May 8, 2014, the Company issued a $21,000 convertible note to a corporation.

The loan bears interest at 8% and has a maturity date of November 8, 2014.

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 May 28, 2014, the Company issued a $10,000 convertible note to an individual.

On May 28, 2014, the Company issued a $10,000 convertible note to a corporation.

The loan bears interest at 5% and has a maturity date of November 28, 2014.

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.

Our Plan of Operation for the Next Twelve Months.

We elected to enter the development stage on October 1, 2011.

The first production run of our Type 2 Defense product was completed during June 2013.

On July 8, 2013 we announced our product was available for on-line sales on Amazon.com.

On July 9, 2013, we announced our product was available for on-line sales from our www.Type2Defense.com website.

The first sale was completed in July 2013.

The product will sell for $24.95 per box.

Fulfillment will be handled by a third party fulfillment house.

On December 19, 2013, we hired Peggy Freeman Knight as our executive vice-president of marketing and chief marketing officer.

Knight has over 20 years of retail experience with Walmart Stores Inc.

and Sam’s Club.

Knight will head-up our Marketing efforts in 2014.

As we only had nominal sales in the twelve months ended December 31, 2013, we have remained in the development stage.

We will closely monitor our sales and determine at which point in time they will emerge from the development stage.

Our business strategy for the next twelve months will be to implement retail on-line sales of our Type2 Defense product and increase our marketing efforts.

At December 31, 2013 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.

Even assuming that we secure adequate financing, there can be no assurance that we will be profitable at any time in the future.

During 2014, 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.

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.

On June 23, 2014, the Company issued a $10,000 convertible note to a corporation.

The loan bears interest at 5% and has a maturity date of December 23, 2014.

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 July 11, 2014, the Company issued a $10,000 convertible note to a corporation.

The loan bears interest at 5% and has a maturity date of January 11, 2015.

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 August 4, 2014, the Company issued an $8,000 convertible note to a corporation.

The loan bears interest at 5% and has a maturity date of February 4, 2015.

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 August 4, 2014, the Company issued an $8,000 convertible note to a corporation owned by the Company’s CEO.

The loan bears interest at 5% and has a maturity date of February 4, 2015.

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 September 3, 2014, the Company issued a $6,000 convertible note to a corporation.

The loan bears interest at 5% and has a maturity date of March 3, 2015.

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 September 3, 2014, the Company issued a $6,000 convertible note to a corporation owned by the Company’s CEO.

The loan bears interest at 5% and has a maturity date of March 3, 2015.

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 October 1, 2014, the Company issued a $4,625 convertible note to a corporation.

The loan bears interest at 5% and has a maturity date of April 1, 2015.

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 October 1, 2014, the Company issued a $4,625 convertible note to a corporation owned by the Company’s CEO.

The loan bears interest at 5% and has a maturity date of April 1, 2015.

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 October 15, 2014, the Company issued a $3,600 convertible note to a corporation owned by the Company’s CEO.

The loan bears interest at 5% and has a maturity date of April 15, 2015.

In addition, at any time, the holder may convert the note into shares of the Company’s common stock at an exercise price of $.004 per share.

On November 4, 2014, the Company issued a $6,850 convertible note to a corporation.

The loan bears interest at 5% and has a maturity date of May 4, 2015.

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

On November 4, 2014, the Company issued a $6,850 convertible note to a corporation owned by the Company’s CEO.

The loan bears interest at 5% and has a maturity date of May 4, 2015.

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

On November 8, 2014, the Company issued a $2,962 convertible note to a corporation owned by the Company’s CEO.

The loan bears interest at 5% and has a maturity date of May 8, 2015.

In addition, at any time, the holder may convert the note into shares of the Company’s common stock at an exercise price of $.00475 per share.

On December 1, 2014, the Company issued a $5,000 convertible note to a corporation.

The loan bears interest at 5% and has a maturity date of June 1, 2015.

In addition, at any time, the holder may convert the note into shares of the Company’s common stock at an exercise price of $.09 per share.

On December 1, 2014, the Company issued a $5,000 convertible note to a corporation owned by the Company’s CEO.

The loan bears interest at 5% and has a maturity date of June 1, 2015.

In addition, at any time, the holder may convert the note into shares of the Company’s common stock at an exercise price of $.09 per share.

On January 7, 2015, the Company issued a $4,315 convertible note to a corporation owned by the Company’s CEO.

The loan bears interest at 5% and has a maturity date of July 7, 2015.

In addition, at any time, the holder may convert the note into shares of the Company’s common stock at an exercise price of $.04 per share.

On January 8, 2015, the Company issued an $8,750 convertible note to a corporation.

The loan bears interest at 5% and has a maturity date of July 8, 2015.

In addition, at any time, the holder may convert the note into shares of the Company’s common stock at an exercise price of $.04 per share.

On January 8, 2015, the Company issued an $8,750 convertible note to a corporation owned by the Company’s CEO.

The loan bears interest at 5% and has a maturity date of July 8, 2015.

In addition, at any time, the holder may convert the note into shares of the Company’s common stock at an exercise price of $.04 per share.

On February 2, 2015, the Company issued a $12,500 convertible note to a corporation.

The loan bears interest at 5% and has a maturity date of August 2, 2015.

In addition, at any time, the holder may convert the note into shares of the Company’s common stock at an exercise price of $.031 per share.

On February 2, 2015, the Company issued a $12,500 convertible note to a corporation owned by the Company’s CEO.

The loan bears interest at 5% and has a maturity date of August 2, 2015.

In addition, at any time, the holder may convert the note into shares of the Company’s common stock at an exercise price of $.031 per share.

On March 2, 2015, the Company issued a $10,000 convertible note to a corporation.

The loan bears interest at 5% and has a maturity date of September 2, 2015.

In addition, at any time, the holder may convert the note into shares of the Company’s common stock at an exercise price of $.025 per share.

On March 2, 2015, the Company issued a $10,000 convertible note to a corporation owned by the Company’s CEO.

The loan bears interest at 5% and has a maturity date of September 2, 2015.

In addition, at any time, the holder may convert the note into shares of the Company’s common stock at an exercise price of $.025 per share.

Results of Operations.

Results of operations for the year ended December 31, 2014 compared to year ended December 31, 2013

We generated nominal revenues of $2,739 and $224 for the years ended December 31, 2014 and 2013, respectively.

The Company’s focus for 2015 will be the manufacturing, marketing and distribution of our Glucose Health Natural Blood Sugar Maintenance™ dietary supplement product.

We hope to generate substantial revenues, continue our operations and fully implement our business plan by December 31, 2015.

We reported a gross loss of $20,725 and $2,091 for the years ended December 31, 2014 and 2013, respectively.

Included in the gross loss was an impairment to inventory of $20,829 for the year ended December 31, 2014.

Until the Company generates significant revenues, our revenue will not exceed our costs.

Operating Expenses.

For the year ended December 31, 2014, we had total operating expenses of $524,491, as compared to total operating expenses of $1,267,193 for the year ended December 31, 2013.

The substantial decrease of $742,703 or 58.6%, in our operating expenses between the two periods is primarily due to an approximate $524,000 decrease in professional fees incurred due to the 2013 issuance of common stock for achieving operational milestones related to the Type2 Defense product, decreases in investor relations expenses, decreases in marketing and other services expenses, a $200,000 write-off for our impaired Type2 Defense intellectual property in 2013 and a decrease of approximately $19,000 for other general and administrative expenses compared to 2013.

We expect we will continue to incur significant legal and accounting expenses related to being a public company.

Other Expenses.

We had $109,631 interest expense for the year ended December 31, 2014 compared to $168,862 interest expense for the year ended December 31, 2013.

The $59,231 or 35.1% increase is attribution to the $58,273 out-of-period adjustment at December 31, 2013 for the improperly valued beneficial conversion option of the Company’s convertible notes payable.

In addition, we had a $14,562 and $21,000 loss from conversion of debt for the years ended December 31, 2014 and 2013, respectively.

For the year ended December 31, 2014, we had a net loss of $669,409 or $0.99 per share.

In comparison, for the year ended December 31, 2013, we had a net loss of $1,459,146 or $4.91 per share.

We expect to continue to incur net losses for the foreseeable future and until we generate significant revenues.

Off-Balance Sheet Arrangements.

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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 7. Management’s Discussion and Analysis