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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, 2014, together with notes thereto, as previously filed with our Annual Report on Form 10-K on March 30, 2015.
−Removed: 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, 2015.
+Added: 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 September 30, 2015.
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.
−Removed: There were no cash equivalents as of June 30, 2015 and December 31, 2014.
+Added: There were no cash equivalents as of September 30, 2015 and December 31, 2014.
The Company maintains cash balances at one financial institution that is insured by the Federal Deposit Insurance Corporation.
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Revenue Recognition
−Removed: The Company currently has nominal revenues.
−Removed: Once the Company emerges from the development stage and generates significant revenue from the sales of our products, the following criteria for recognition will be utilized:
+Added: The Company recognizes revenue when:
1) Persuasive evidence of an arrangement exists;
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The cost of finished goods includes the cost of packaging supplies, direct and indirect labor and other indirect manufacturing costs.
−Removed: As of June 30, 2015, the Company had inventory of $11,650 comprised solely of the Glucose Health Ò Natural Blood Sugar Maintenance Blueberry Tea Mix product.
+Added: As of September 30, 2015, the Company had inventory of $9,700 comprised solely of the Glucose Health Ò product.
All Glucose Health Ò products are affixed with a production lot number and "Best Before" date of 24 months following production.
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Our CUSIP number is 379894108 and trading symbol is GLUC.
−Removed: We are a manufacturer of dietary supplements and our business focus is serving consumers with Type-2 diabetes and those persons concerned about Type-2 diabetes.
+Added: We are a manufacturer of dietary supplements and our business focus is serving consumers with Type-2 and pre-diabetes and those persons concerned about Type-2 and pre-diabetes.
As discussed in greater detail below, our principal product is Glucose Health Ò ("product").
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Since we discontinued our former operations, we wrote off any inventories attributable to our former operations.
−Removed: Type2 Defense is a dietary supplement made from natural ingredients and formulated to support healthy glucose levels and targeted to consumers concerned about Type-2 diabetes.
+Added: Type2 Defense is a dietary supplement made from natural ingredients and formulated to support healthy glucose levels and targeted to consumers concerned about Type-2 and pre-diabetes.
The first production run of the Company's Type2 Defense product was completed in June 2013 with the manufacture of 1764 cases.
On July 8, 2013, the Company announced the product was available for on-line sales on Amazon.com.
−Removed: On July 9, 2013, the Company announced the product was available for on-line sales via our www.Type2Defense.com website.
−Removed: Our first product sale was completed in July 2013.
−Removed: Following the period from June 2013, the Company encountered significant management, operational and financial challenges resulting in poor product sales and inadequate inventory control.
+Added: On July 9, 2013, the Company announced the product was available for on-line sales via the www.Type2Defense.com website.
+Added: Subsequently, the Company encountered significant management, operational and financial challenges resulting in poor product sales and inadequate inventory control.
As a consequence, the Company generated only nominal revenues in the fiscal year ended December 31, 2013 and the Company elected to declare the $200,000 intellectual property for Type2 Defense, recorded as other intangible assets, as impaired at December 31, 2013.
−Removed: As of the current period ending December 31, 2014, our remaining inventory of Type2 Defense product on-hand is -0- and remaining inventory placed with our online sales fulfillment partner is unknown.
−Removed: We do not intend to manufacture additional Type2 Defense product.
On April 8, 2014, the Company appointed James Hodge chairman of the Company's board of directors.
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In this regard, we retained an attorney specializing in compliance with Food and Drug Administration (FDA) regulations, necessary, in part, to achieve such channel sales.
−Removed: In addition, we intend to also market the product to retail customers via our dedicated product website and through other online marketplaces.
−Removed: Glucose Health Ò is a dietary supplement formulated from natural ingredients, including soluble corn fiber, extracts of water soluble cinnamon tree bark, chromium picolinate, extracts of green and white teas, vitamin C from sodium ascorbate and stevia leaf;
+Added: Secondarily, we also intend to market the product to retail customers via our dedicated product website and through other online marketplaces.
+Added: Glucose Health Ò is a dietary supplement formulated from natural ingredients, including soluble corn fiber (Fibersol Ò -2), extracts of water soluble cinnamon tree bark, chromium picolinate, extracts of green and white teas, vitamin C from ascorbic acid and stevia leaf extract;
ingredients shown in certain clinical research published by the National Institutes of Health (www.glucosehealth.com/clinical-trials) to have a beneficial impact upon healthy glucose, triglycerides and cholesterol levels.
The Centers for Disease Control and Prevention (CDC) publishes the National Diabetes Statistics Report annually.
−Removed: Their 2014 Report estimates 2 of 5 Americans will develop Type 2 diabetes in their lifetime.
−Removed: The Company believes the CDC Report and other similar research indicates the existence of a large and growing market of consumers aware of the dangers of Type-2 diabetes and seeking natural products like Glucose Health Ò to proactively maintain healthy blood glucose levels.
+Added: Their 2014 Report estimates 2 of 5 Americans are pre-diabetic and will develop Type-2 diabetes in their lifetime.
+Added: The Company believes the CDC Report and the prevalence of medical research targeted to educating pre-diabetics, will lead to a large and growing market of consumers aware of the dangers of Type-2 diabetes and consequently receptive to natural dietary supplements such as Glucose Health Ò to proactively maintain healthy blood glucose, triglycerides and cholesterol levels.
+Added: As of December 31, 2014, the Company elected to write-off its inventory of Type-2 Defense product to -0- and cease all manufacturing and sales activities related to the product.
On January 5, 2015, the Company signed a contract manufacturing agreement with Natural Solution Labs, Inc.
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On May 26, 2015, the Company completed the first production run of its first Glucose Health Ò product offering – Glucose Health Ò Natural Blood Sugar Maintenance in Blueberry Tea Mix flavor packaged in a 310 gram size container for a 45 day supply at the recommended daily serving of 6.9 grams.
+Added: On July 7, 2015, the Company received notification from the United States Patent and Trademark Office (USPTO) that its application for trademark of "Glucose Health" was accepted to the Supplemental Register (Reg.
+Added: 4,770,720) with first use recognized by the USPTO as of February 1, 2015.
Results of Operations
−Removed: For the three months ended June 30, 2015 as compared to the three months ended June 30, 2014
−Removed: We generated nominal revenues for the three months ended June 30, 2015 compared to nominal revenues for the three months ended June 30, 2014.
−Removed: We hope to generate substantial revenues, continue operations and implement our business plan by September 30, 2015.
−Removed: The Company’s focus for 2015 will be the launch of its Glucose Health Ò dietary supplement products.
+Added: For the three months ended September 30, 2015 as compared to the three months ended September 30, 2014
+Added: We generated nominal revenues for the three months ended September 30, 2015 compared to nominal revenues for the three months ended September 30, 2014.
+Added: We hope to fully implement our plan of operations and generate significant revenues by March 31, 2016.
+Added: The Company's principal focus for fiscal 2015 will be to launch and establish a market of recurring sales from pharmacy retailers for its Glucose Health Ò dietary supplement product.
Operating Expenses
−Removed: For the three months ended June 30, 2015, we had total operating expenses of $42,588, as compared to total operating expenses of $71,346 for the three months ended June 30, 2014.
−Removed: The decrease of $28,758 or 40%, in operating expenses between the periods is primarily due to the Company spending more time negotiating contracts and establishing sales.
−Removed: The Company renegotiated consulting contracts in 2015 for lessor amounts than prior years, which resulted in lower operating expenses.
−Removed: For the three months ended June 30, 2015, after interest expense of $28,215, we had a net loss of $50,018 or $0.03 per share.
−Removed: In comparison, for the three months ended June 30, 2014, after interest expense of $22,348, we had a net loss of $102,536 or $0.22 per share.
−Removed: We expect to continue to incur net losses for the foreseeable future and until we generate significant revenues.
−Removed: For the six months ended June 30, 2015 as compared to the six months ended June 30, 2014
−Removed: We generated nominal revenues for the six months ended June 30, 2015 compared to nominal revenues for the six months ended June 30, 2014.
−Removed: We hope to generate substantial revenues, continue operations and implement our business plan by September 30, 2015.
−Removed: The Company’s focus for 2015 will be the launch of its Glucose Health Ò dietary supplement products.
+Added: For the three months ended September 30, 2015, we had total operating expenses of $34,272, as compared to total operating expenses of $64,203 for the three months ended September 30, 2014.
+Added: The decrease of $29,931 or 47%, in operating expenses between the periods is primarily due to the Company's renegotiation of various management, consulting and service provider contracts, which has resulted in lessor amounts being paid for such services than in prior periods, which has resulted in lower operating expenses.
+Added: We expect we will continue to incur significant legal and accounting expenses related to being a public company.
+Added: For the three months ended September 30, 2015, after interest expense of $15,086, we had a net loss of $49,253 or $0.02 per share.
+Added: In comparison, for the three months ended September 30, 2014, after interest expense of $40,307, we had a net loss of $104,377 or $0.18 per share.
+Added: The decrease in net loss per share from $0.18 per share to $0.02 per share is primarily due to the Company's renegotiation of various management, consulting and service provider contracts, which has resulted in lessor amounts being paid for such services than in prior periods, and a lower net loss per share.
+Added: The Company expects to continue to incur net losses for the foreseeable future and until we generate significant revenues.
+Added: For the nine months ended September 30, 2015 as compared to the nine months ended September 30, 2014
+Added: We generated nominal revenues for the nine months ended September 30, 2015 compared to nominal revenues for the nine months ended September 30, 2014.
+Added: We hope to fully implement our plan of operations and generate significant revenues by March 31, 2016.
+Added: The Company's principal focus for fiscal 2015 will be to launch and establish a market of recurring sales from pharmacy retailers for its Glucose Health Ò dietary supplement product.
+Added: Secondarily, the Company's goal is to achieve modest recurring sales of its Glucose Health Ò dietary supplement product from consumers via its product website www.glucosehealth.com and other online marketplaces.
Operating Expenses
−Removed: For the six months ended June 30, 2015, we had total operating expenses of $107,331, as compared to total operating expenses of $110,325 for the six months ended June 30, 2014.
−Removed: The decrease of $2,994 or 3%, in operating expenses between the periods is primarily due to the Company spending more time negotiating contracts and establishing sales.
+Added: For the nine months ended September 30, 2015, we had total operating expenses of $141,602, as compared to total operating expenses of $174,529 for the nine months ended September 30, 2014.
+Added: The decrease of $32,927 or 19%, in operating expenses between the periods is primarily due to the Company's renegotiation of various management, consulting and service provider contracts, which has resulted in lessor amounts being paid for such services than in prior periods, which has resulted in lower operating expenses.
We expect we will continue to incur significant legal and accounting expenses related to being a public company.
−Removed: For the six months ended June 30, 2015, after interest expense of $83,493, we had a net loss of $170,014 or $0.10 per share.
−Removed: In comparison, for the six months ended June 30, 2014, after interest expense of $28,821, we had a net loss of $148,941 or $0.34 per share.
−Removed: We expect to continue to incur net losses for the foreseeable future and until we generate significant revenues.
+Added: For the nine months ended September 30, 2015, after interest expense of $98,579, we had a net loss of $219,266 or $0.12 per share.
+Added: In comparison, for the nine months ended September 30, 2014, after interest expense of $69,128, we had a net loss of $253,319 or $0.53 per share.
+Added: The decrease in net loss per share from $0.53 per share to $0.12 per share is primarily due to the Company's renegotiation of various management, consulting and service provider contracts, which has resulted in lessor amounts being paid for such services than in prior periods and a lower net loss per share.
+Added: The Company expects to continue to incur net losses for the foreseeable future and until we generate significant revenues.
Liquidity and Capital Resources
−Removed: As of June 30, 2015 our current assets totaled $20,278 consisting primarily of $11,650 of inventory, $4,237 of cash, and $4,141 of prepaid expenses.
−Removed: Our current liabilities were $350,920 as of June 30, 2015, which was represented by accounts payable and accrued expenses of $95,098, short-term loans of $6,075, and convertible notes payable of $249,747.
−Removed: We had no other liabilities and no long-term commitments or contingencies as of June 30, 2015.
+Added: As of September 30, 2015 our current assets totaled $20,723 consisting primarily of $9,700 of inventory, $8,794 of cash, $1,980 of accounts receivable and $250 of amount due from affiliate.
+Added: Our current liabilities were $382,780 as of September 30, 2015, which was represented by accounts payable and accrued expenses of $94,920, short-term loans of $6,075, and convertible notes payable of $281,785.
+Added: We had no other liabilities and no long-term commitments or contingencies as of September 30, 2015.
On January 7, 2015, the Company issued a $4,315 convertible note to a corporation owned by the Company's CEO.
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In addition, at any time, the holder may convert the note into shares of the Company's common stock at an exercise price of $0.04 per share.
−Removed: On January 8, 2015, the Company issued an $8,750 convertible note to a corporation.
+Added: On January 8, 2015, the Company issued a $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 $0.04 per share.
−Removed: On January 8, 2015, the Company issued an $8,750 convertible note to a corporation owned by the Company’s CEO.
+Added: On January 8, 2015, the Company issued a $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.
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In addition, at any time, the holder may convert the note into shares of the Company's common stock at an exercise price of $0.025 per share.
+Added: On July 1, 2015, the Company issued a $9,090 convertible note to a corporation.
+Added: The loan bears interest at 5% and has a maturity date of December 1, 2015.
+Added: In addition, at any time, the holder may convert the note into shares of the Company's common stock at an exercise price of $0.025 per share.
+Added: On July 1, 2015, the Company issued a $8,305 convertible note to a company owned by the Company's CEO.
+Added: The loan bears interest at 5% and has a maturity date of December 1, 2015.
+Added: In addition, at any time, the holder may convert the note into shares of the Company's common stock at an exercise price of $0.025 per share.
Our Plan of Operation for the Next Twelve Months.
−Removed: 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.
−Removed: 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 unknown.
−Removed: We do not intend to manufacture additional Type2 Defense product.
+Added: In the fourth quarter of 2014, we elected to cease sales and manufacturing of our Type2 Defense product and acquire the "Glucose Health Natural Blood Sugar Maintenance" 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 Ò 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.
−Removed: In addition, we intend to implement online sales of our Glucose Health Ò product targeted to retail customers via our product website and through other diabetes focused online marketplaces.
−Removed: At June 30, 2015 we had nominal cash, which will not be sufficient to satisfy our working capital requirements for the next twelve months.
−Removed: We cannot forecast with any degree of certainty our anticipated revenues or cash flow.
−Removed: Our forecasts and operations will involve risks and uncertainties, which we are unable to predict and actual results could fail.
+Added: Secondarily, we intend to implement online sales of our Glucose Health Ò product targeted to retail customers via our product website www.glucosehealth.com and through other online marketplaces.
+Added: At September 30, 2015 we had nominal cash, which will not be sufficient to satisfy our working capital requirements for the next twelve months.
+Added: We cannot presently forecast with any degree of certainty our anticipated revenues or cash flow.
+Added: Our operations involve many risks and our business could fail.
We will require additional capital to continue operations.
−Removed: If we cannot secure additional capital or generate significant revenues we may cease operations in which case you will lose your investment.
−Removed: We intend to continue to source capital from the two private equity companies currently providing financing to us on a monthly basis.
−Removed: We cannot guarantee that such additional funding will be available on favorable terms, if at all.
−Removed: If adequate funds are not available, then our ability to continue or expand our operations may be significantly hindered.
−Removed: 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.
−Removed: However, our officer, directors and principal shareholders are not committed to contribute funds to pay for our expenses.
−Removed: Even assuming that we secure adequate financing, there can be no assurance that we will be profitable at any time in the future.
−Removed: During 2015, we expect to expand our business by implementing sales of our Glucose Health Ò product.
−Removed: 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.
−Removed: 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.
−Removed: Our auditors have questioned our ability to continue operations as a “going concern.” We hope to obtain significant revenues from future product sales.
−Removed: In the absence of significant sales and profits, we will seek to raise additional funds to meet our working capital needs principally through the issuance of debt securities.
−Removed: 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.
−Removed: As a result, our auditors believe that substantial doubt exists about our ability to continue operations.
+Added: If we cannot secure this additional capital or if we cannot generate significant revenues, we may cease operations.
+Added: We intend to continue to source capital from the two private companies currently providing financing to us on a monthly basis.
+Added: We cannot guarantee that this funding will be available on favorable terms, if at all.
+Added: If adequate capital is not available, then our ability to continue our operations may be significantly hindered.
+Added: If adequate capital is not available, our officer, directors and principal shareholders may contribute capital to the Company in the form of debt financing or equity contributions.
+Added: However, our officer, directors and principal shareholders are not committed to contribute such capital to sustain our operations.
+Added: Even assuming that we secure the capital we require for our business, there can be no assurance that our business will be profitable.
+Added: During fiscal 2015, we expect to develop our business by launching and then growing sales of our Glucose Health Ò product to pharmacy retailers and consumers.
+Added: However, the significant legal and accounting costs of being a public company will continue to impact our liquidity and we will need to obtain capital to pay these expenses.
+Added: Other than the anticipated increases in legal and accounting costs due to the reporting requirements of being a public company, we are not aware of any other known trends, events or uncertainties, which may affect our future liquidity.
+Added: Our auditors have questioned our ability to continue operations as a "going concern." Our goal is to realize significant revenues from future product sales.
+Added: However, in the absence of significant revenues and profits, we will seek to raise additional capital to meet our working capital needs principally through the issuance of debt securities.
+Added: We cannot guarantee that we will be able to obtain sufficient additional capital when needed, or that such capital, if it is available to, will be obtainable on terms satisfactory to us.
+Added: As a result, our auditors believe that substantial doubt exists about our ability to continue our operations.
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.