Item 1. Description of Business.
Overview
Glucose Health, Inc. was incorporated under the laws of the State of Nevada on March 27, 2007. Our principal executive office is located at 609 SW 8th Street, Suite 600, Bentonville, AR 72712 and our telephone number is 479-802-3827. Our corporate website is www.glucosehealthinc.com and our product website is www.glucosehealth.com. Our CUSIP number is 379894108 and trading symbol is GLUC. We are a manufacturer of dietary supplements and our business focus is serving the consumer market segment of persons with pre-diabetes and Type-2 diabetes. As discussed in greater detail below, our principal product is Glucose HealthÒ ("product"). We acquired this product in October of 2014 and we are in the early stages of manufacturing, marketing and distributing this product. We have a history of losses and have generated only nominal revenues since our inception.
Corporate Information
We were incorporated under the laws of State of Nevada on March 27, 2007, as Bio-Solutions Corp.
On October 17, 2012, our Board of Directors and shareholders holding a majority of the total issued and outstanding shares of common stock, pursuant to written consents in lieu of a meeting, approved an amendment to our Articles of Incorporation to increase our authorized capital (the "amendment"). The amendment was filed with the Nevada Secretary of State on October 17, 2012, increasing our authorized capital from 90,000,000 shares of common stock, to 200,000,000 shares of common stock, with a par value of $0.001.
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 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. There were a total of 199,611,900 shares of common stock issued and outstanding as of January 14, 2014 (the date of record). The number of shares of common stock voting in favor of the reverse split was sufficient for approval. 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.
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 1,000 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 an existing 12 month consulting contract with the Company's CEO, Murray Fleming, for an additional 12 months, through October 1, 2016, without further compensation, in exchange for the issuance to Mr. Fleming, of the 1,000 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.
Our Business
From inception through September 25, 2011, we were a manufacturer of Nutra-Animal, a pre-mix anti-oxidant for chicken integrators containing wheat middlings, vitamin E, calcium carbonate, silicone dioxyde, shrimp flour, sodium selenite and fish oil. We were also a distributor of GreenExTM, 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. We were not successful in these business endeavors.
On September 26, 2011, we acquired the "Type2 Defense" product together with all intellectual property associated therewith. Upon the acquisition of Type2 Defense we discontinued our former operations as a manufacturer of Nutri-Animal and distributor of GreenExTM. Since we discontinued our former operations, we wrote off any inventories attributable to our former operations. 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. On July 9, 2013, the Company announced the product was available for on-line sales via the www.Type2Defense.com website. 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.
On April 8, 2014, the Company appointed James Hodge chairman of the Company's board of directors.
On April 8, 2014, in a special meeting of the board of directors, the board voted in favor of amending the Company's bylaws to decrease the number of members of the board of directors from three to one. The previous board members agreed to resign from the board and accept other duties for the Company.
On April 21, 2014, the Company appointed Thomas Metzger Ph.D., Chief Executive Officer and Chief Financial Officer. In addition, Peggy Knight was appointed Chief Marketing Officer.
On July 22, 2014, Thomas Metzger Ph.D., Chief Executive Officer and Chief Financial Officer, resigned from the Company. James Hodge, chairman of the board of directors was appointed interim Chief Executive Officer and Chief Financial Officer.
Current Business
On October 1, 2014, Murray Fleming was appointed the Company's Chief Executive Officer for the 12-month period ending October 1, 2015. Additionally, on October 1, 2014, the Company entered into an Intellectual Property Purchase Agreement to purchase the "Glucose Health Natural Blood Sugar Maintenance" product from a company of which Mr. Fleming is the beneficial owner. Following this purchase, the Company undertook a series of steps to achieve a final product offering that would be considered efficacious as well as pleasant tasting by our target consumer market and would offer a value proposition relative to our competition in order to be considered for stocking by national and regional pharmacy retailers. To assist in achieving our final product objectives, we retained a former head of beverage product development at Nestle. We retained an attorney specializing in compliance with Food and Drug Administration (FDA) regulations, necessary, in part, to allow our product to be stocked by national pharmacy retailers. We also undertook a number of actions to establish and build our Glucose HealthÒ brand. The Company conducted a design competition related to its packaging artwork and product logo and retained an experienced product packaging graphic artist to assist with all digital and print representations of the product. The Company filed for and received trademark protection for Glucose HealthÒ with the United States Trademark and Patent Office (USPTO). While our primary sales and marketing focus is achieving sales to consumers through national and regional pharmacies, secondarily, we intend to also market the product directly to customers via our dedicated product website and through other online marketplaces.
Glucose HealthÒ is a dietary supplement formulated from nine natural ingredients shown in certain clinical research such as that published by the National Institutes of Health (see www.glucosehealth.com/clinical-trials), to have a beneficial impact upon blood glucose, insulin, triglyceride and cholesterol levels. The Centers for Disease Control and Prevention (CDC) publishes a National Diabetes Statistics Report annually. The 2014 Report estimates 2 of 5 Americans will develop Type-2 diabetes in their lifetime. We believe the CDC Report and other similar research points to a large and growing market of consumers with pre-diabetes or Type-2 diabetes many of whom are likely seeking natural products like Glucose HealthÒ to proactively maintain good health.
Glucose HealthÒ is currently packaged in a "Value-Size" container format consisting of 384 grams of product formula lasting 60 days. In addition, the Company plans to introduce an "On-the-Go" packaging format of 30 stick packs to a box in fiscal 2016.
On November 20, 2014, the existing 12 month consulting contract with the Company's CEO, Murray Fleming, was extended an additional 12 months ending October 2016, without further compensation, in exchange for the issuance to Mr. Fleming, of 1,000 Series A Special Preferred Shares.
On December 31, 2014, the Company elected to write-off its inventory of Type2 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 for testing, compounding, supply and order fulfillment for the Glucose HealthÒ product and additionally a purchasing agreement to distribute the product in a limited number of Northwest Arkansas pharmacies.
On January 7, 2015, the Company completed its implementation of 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.
On January 26, 2015, the Company filed an initial application for trademark protection related to its line of dietary products, with the United States Trademark and Patent Office (USPTO).
On January 29, 2015, the Company appointed of Chandrasekhar Mallangi, Ph.D., as an advisor. Dr. Mallangi earned a Ph.D. in Food Science from Oregon State University and is an advisor to multinational companies in the development of nutritional products. Dr. Mallangi is the credited inventor and co-inventor for patents in the area of food nutrition, awarded by the USPTO to subsidiaries of Nestle, SA of Vevey, Switzerland.
On February 10, 2015, Murray Fleming, the Company's Chief Executive Officer was appointed the Company's Chief Financial Officer. Mr. Fleming replaces James Hodge the Company's interim Chief Financial Officer. Mr. Hodge will remain the Company's chairman of the board of directors.
On February 24, 2015, the Company completed FDA facility registration, a compliance procedure for manufacturers of dietary and nutritional supplements.
The Company completed the first production run of the product on May 26, 2015 and pursuant to the January 5, 2015 purchasing agreement, the product began to be offered for retail sale through a limited number of Northwest Arkansas pharmacies as well as on the Company's product website www.glucosehealth.com.
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. 4,770,720) with first use recognized by the USPTO as of February 1, 2015.
Government Regulation
The manufacturing, processing, formulating, packaging, labeling, distributing, selling and advertising of our products are subject to government regulation, principally by the Food and Drug Administration (hereinafter the "FDA"). In particular, the FDA regulates the safety, manufacturing, labeling and distribution of dietary supplements. The FDA permits "statements of nutritional support" for dietary supplements without FDA pre-approval. Such statements may describe how particular dietary ingredients affect the structure, function or general well-being of the body, or the mechanism of action by which a dietary ingredient may affect body structure, function or well-being (but may not state that a dietary supplement will diagnose, mitigate, treat, cure or prevent a disease). A company making a statement of nutritional support must possess substantiating evidence for the statement, and, for such statements that are not about the effects on the body as a result of a dietary supplement used as a tool for its nutritive value and are not otherwise "health claims," disclose on the label that the FDA has not reviewed that statement and that the product is not intended for use for a disease. Failure to comply with applicable FDA requirements can result in various levels of regulatory actions being imposed on the Company including but not limited to action letters, product recalls and injunctions.
In addition to the FDA, the Federal Trade Commission (hereinafter the "FTC") has additional jurisdiction to regulate the labeling, promotion and advertising of dietary supplements. The FTC is authorized to use a variety of processes and remedies for enforcement, both administratively and judicially, including compulsory process, cease and desist orders, and injunctions. FTC enforcement can result in orders requiring, among other things, limits on advertising, corrective advertising, consumer redress, divestiture of assets, rescission of contracts and such other relief as may be deemed necessary. State and local authorities can also regulate advertising and labeling for dietary supplements and conventional foods. Additionally, there can be no assurance that state and local authorities will not commence other regulatory actions that could restrict the permissible scope of our product claims.
Competition
The business of developing and distributing dietary supplements is highly competitive. Our product has direct and indirect competition. We compete directly with GlucernaÒ Advance, manufactured by Abbott Laboratories; Boost Glucose ControlÒ, manufactured by Nestle; and EnterexÒ Diabetic, manufactured by Victus, Inc. All of the companies whom are our direct competitors are substantially larger with much greater financial resources and broader name recognition. Although we are a small company, we have a competitive advantage over our direct competitors because they rely upon achieving their product goals principally through the benefits of high fiber content and a broad spectrum of vitamins and minerals; while our product not only has similar dietary fiber content, it is 100% soluble and therefore of greater interest to persons with pre-diabetes and Type-2 diabetes. Instead of a broad spectrum of vitamins and minerals, Glucose HealthÒ also contains targeted plant based extracts and powders, in a proprietary formula, which have been demonstrated in certain clinical studies to have beneficial impacts on healthy levels of serum glucose, insulin, triglycerides and cholesterol. We also compete indirectly with Metamucil, manufactured by Procter and Gamble, because both Metamucil and Glucose HealthÒ have similar fiber content and are both targeted to the pre-diabetes and Type-2 diabetes consumer market. We also compete indirectly with the many individual dietary supplements marketed in pill or tablet form and also targeted to the pre-diabetic and Type-2 diabetic consumer market segment.
There can be no assurance that we will be able to effectively compete in such an intensely competitive environment.
Intellectual Property
Our intellectual property consists of the Glucose HealthÒ product acquired October 1, 2014 and our proprietary product formula. Glucose HealthÒ is protected by trademark protection following our successful application to the United States Patent and Trademark Office. We may consider filing patent applications with respect to our product formula and other novel aspects of our business to protect our intellectual property. Future patents, if issued, may be challenged, invalidated or circumvented. Thus, any patent awarded to us may not provide adequate protection against competitors. The patent applications we file may not result in patents being issued. Also, patents may not provide us with adequate proprietary protection or advantages against competitors with similar or competing products. As a result of potential conflicts with the proprietary rights of others, we may in the future have to prove that we are not infringing the patent rights of others or be required to obtain a license to the patent. We do not know whether such a license would be available on commercially reasonable terms, or at all.
We also rely on trade secrets and unpatentable know-how that we seek to protect, in part, by confidentiality agreements. However, it is possible that parties may breach those agreements, and we may not have adequate remedies for any breach. It is also possible that our trade secrets or unpatentable know-how will otherwise become known or be independently developed by competitors. There can be no assurance that third parties will not assert infringement or other claims against us with respect to any existing or future products, or that licenses would be available if our formulas were successfully challenged by a third party, or if it became desirable to use any third-party formulas and/or technology to enhance our products. Litigation to protect our proprietary information or to determine the validity of any third-party claims could result in significant expense to us and divert the efforts of our technical and management personnel, whether or not we are successful in such litigation.
While we have no knowledge that we are infringing the proprietary rights of any third party, there can be no assurance that such claims will not be asserted in the future with respect to our Product formula or future products. Any such assertion by a third party could require us to pay royalties, to participate in costly litigation and defend licensees in any such suit pursuant to indemnification agreements, or to refrain from selling an alleged infringing product or service.
Employees
We have no employees. We hire consultants and contract with third-party providers to support our business development. We may need to hire employees to support our business development.
Item 1B.
Item 1B. Unresolved Staff Comments.
None.
Item 2.
Item 2. Description of Property.
Facilities
Our principal office is located at 609 SW 8th Street, Suite 600, Bentonville, AR 72712, which we rent monthly. In addition, we contract for product production, warehousing and fulfillment at facilities located at 11753 N Hwy 59, Gravette, AR 72736. We do not believe we will have difficulty in obtaining additional office or commercial space at competitive prices, if necessary. We hold no real property.
Item 3.
Item 3. Legal Proceedings.
None.
Item 4.
Item 4. Mine Safety Disclosures.
Not applicable
PART II
Item 5.
Item 5. Market for Common Equity and Related Stockholder Matters
A. Market Information
The Company's Common Stock is currently quoted by OTC Markets under the symbol GLUC. The high and low closing prices of the Company's common stock since January 1, 2014 are set forth below. These closing prices do not reflect retail mark-up, markdown or commissions.
Reports to Security Holders.
The public may read and copy any materials filed with the Securities and Exchange Commission at the Security and Exchange Commission's Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. The public may also obtain information on the operation of the Public Reference Room by calling the Securities and Exchange Commission at 1-800-SEC-0330. The Securities and Exchange Commission maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the Securities and Exchange Commission, which includes us. The address of that site is www.sec.gov.
Holders.
As of April 14, 2016 we had 115 shareholders of record. However, the majority of our shareholders hold their stock in "street name" at brokerage and custodial firms. We estimate our total number of shareholders to be over 700. Our transfer agent is Nevada Agency & Transfer Company located at 50 West Liberty Street, Reno, Nevada, 89501 and their phone number is (775) 322-0626.
Dividend Policy.
We have never declared or paid a cash dividend. We do not expect to pay cash dividends in the foreseeable future. We currently intend to retain our earnings, if any, for use in our business. Any dividends declared in the future will be at the discretion of our board of directors and subject to any restrictions that may be imposed by our lenders.
Equity Compensation Plan
On March 4, 2013, we filed an S-8 registration statement with the Securities and Exchange Commission registering up to 30,000,000 shares of common stock under our 2013 Stock Incentive Plan. During fiscal 2014, we issued 15,000 (split adjusted) shares pursuant to this plan. Our 2013 Stock Incentive Plan was formally rescinded by resolution of the board of directors in 2014.
Recent sales of unregistered securities
During the fiscal years ended December 31, 2014 and December 31, 2015, we issued a total of 925,106 and 973,063 shares of common stock respectively.
a)
During January 2014, William Gallagher, our former chief executive officer canceled 12,000 of his personal unregistered shares of the Company's common stock to satisfy a promissory note conversion request. These shares were valued at $1.75 per share or $21,000.
b)
During January 2014, a promissory note was converted into unregistered shares of the Company's common stock. The amount totaled $12,849 including interest was converted into 17,132 unregistered shares of the Company's common stock at $0.75 per share.
c)
During March 2014, a promissory note was partially converted into unregistered shares of the Company's common stock. The amount totaled $4,000 was converted into 16,000 unregistered shares of the Company's common stock at $0.25 per share.
d)
During March 2014, a promissory note was converted into unregistered shares of the Company's common stock. The amount totaled $13,151 including interest was converted into 13,171 unregistered shares of the Company's common stock at $0.999 per share.
e)
During March 2014, the Company signed an agreement with a firm to provide strategic business development activities for the Company. The firm will be compensated with 7,200 unregistered shares of the Company's common stock payable in increments of 600 shares per month for twelve (12) months starting on April 1, 2014. During 2014, the Company issued 7,200 unregistered shares of the Company's common stock, which were valued at $0.52 per share or $3,732 to fully satisfy the March 2014 agreement.
f)
During April 2014, William Gallagher, our former chief executive officer was re-issued 12,000 unregistered shares of the Company's common stock which were canceled in January 2014 to satisfy a promissory note conversion request. These shares were valued at $1.75 per share or $21,000.
g)
During April 2014, Thomas Metzger, our former chief executive officer/chief financial officer was issued 5,000 unregistered shares of the Company's common stock for compensation. These shares were valued at $0.755 per share or $3,375.
h)
During April 2014, James Hodge, our chairman of the board of directors, was issued 5,000 unregistered shares of the Company's common stock for joining the Company's board. These shares were valued at $0.755 per share or $3,375.
i)
During April 2014, Peggy Knight our chief marketing officer was issued 15,000 unregistered shares of the Company's common stock for marketing compensation. These shares were valued at $0.755 per share or $11,325.
j)
During June 2014, the Company signed a one year consulting agreement with an individual to provide product marketing and performs duties as the Company's spokesperson. The consultant earned 5,000 restricted shares of the Company's common stock. The shares were valued at $0.65 per share or $3,250. These shares were issued in July 2014.
k)
During July 2014, a promissory note was partially converted into unregistered shares of the Company's common stock. The amount totaled $4,103 including accrued interest was converted into 16,412 unregistered shares of the Company's common stock at $0.25 per share.
l)
During July 2014, James Hodge, the Company's chairman of the board of directors, was issued 6,923 shares of the Company's restricted common stock for service to the Company. These shares were valued at $0.65 per share or $4,500.
m)
During July 2014, the Company signed a consulting agreement with an individual to provide website services for the Company. The consultant was compensated with 60,000 shares of the Company's common stock. The shares were valued at $69,000 or $1.15 per share.
n)
During July 2014, Thomas Metzger Ph.D., our former Chief Executive Officer and Chief Financial Officer resigned from the Company to pursue other interests. Per board consent signed July 22, 2014, the 5,000 unregistered shares of the Company's common stock due to Mr. Metzger on September 4, 2014 in accordance with his consulting agreement signed in April 2014 were issued to Mr. Metzger. The shares were valued at $4,925 or $0.985 per share.
o)
During August 2014, a promissory note was partially converted into unregistered shares of the Company's common stock. The amount totaled $3,059 including accrued interest was converted into 12,235 unregistered shares of the Company's common stock at $0.25 per share.
p)
During September 2014, a promissory note was partially converted into unregistered shares of the Company's common stock. The amount totaled $2,529 including accrued interest was converted into 10,115 unregistered shares of the Company's common stock at $0.25 per share.
q)
On October 1, 2014, the Company entered into an Intellectual Property Purchase Agreement to purchase the "Glucose Health Natural Blood Sugar Maintenance" product for 300,000 unregistered shares of the Company's common stock valued at $0.38 per share or $114,000, from a company beneficially owned by our CEO, Murray Fleming.
r)
On October 1, 2014, Murray Fleming was appointed as the Company's Chief Executive Officer for the 12 month period ending October 1, 2015. Mr. Fleming was compensated with 300,000 unregistered shares of the Company's common stock valued at $0.38 per share or $114,000.
s)
During November 2014, a promissory note was partially converted into unregistered shares of the Company's common stock. The amount totaled $250 was converted into 50,000 unregistered shares of the Company's common stock at $0.005 per share.
t)
During December 2014, a promissory note was partially converted into unregistered shares of the Company's common stock. The amount totaled $285 including accrued interest was converted into 56,918 unregistered shares of the Company's common stock at $0.005 per share.
u)
During 2014, the Company issued 263 shares to satisfy rounding issues as a result of the reverse stock splits implemented during the year.
v)
During January 2015, the Company issued 58,092 shares of common stock to a corporation for conversion of $250 principal and $40 accrued interest related to a Note. These shares were valued at $0.005 per share.
w)
During February 2015, the Company issued 177,072 shares of common stock to a corporation for conversion of $750 principal and $136 accrued interest related to Note. These shares were valued at $0.005 per share.
x)
During February 2015, the Company issued 70,867 shares of common stock in final settlement of a consulting agreement. These shares were valued at $0.08467.
y)
During March 2015, the Company issued 162,264 shares of common stock to a corporation for conversion of $500 principal and $41 accrued interest related to a Note. These shares were valued at $0.005 per share.
z)
During April 2015, the Company issued 86,882 shares of common stock to a corporation for conversion of $400 principal and $40 accrued interest related to Note. These shares were valued at $0.005 per share.
aa)
During April 2015, the Company issued 50,000 shares of common stock in final settlement of a consulting agreement. These shares were valued at $0.0357 per share.
bb)
During May 2015, the Company issued 100,000 shares of common stock to pursuant to final settlement of an outstanding debt. These shares were valued at $0.2278 per share.
cc)
During June 2015, the Company issued 87,564 shares of common stock to a corporation for conversion of $400 principal and $38 accrued interest related to a Note. These shares were valued at $0.005 per share.
dd)
During June 2015, the Company issued 10,000 shares of common stock pursuant to a final settlement of an outstanding payable to an individual. These shares were valued at $0.05 per share.
ee)
During September 2015, the Company issued 88,438 shares of common stock to a corporation for conversion of $400 principal and $42 accrued interest pursuant to a Note. These shares were valued at $0.005 per share.
ff)
During November 2015, the Company issued 89,020 shares of common stock to a corporation for conversion of $400 principal and $45 accrued interest pursuant to a Note. These shares were valued at $0.04 per share.
gg)
During November 2015, the Company issued 50,000 shares of common stock to an individual for services rendered valued at $3,500. These shares were valued at $0.07 per share.
hh)
During December 2015, the Company issued 111,864 shares of common stock to a corporation for conversion of $500 principal and $59 accrued interest pursuant to a Note. These shares were valued at $0.07 per share.
All issuances referenced above were exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933. The shares of common stock have not been registered under the Securities Act or under any state securities laws and may not be offered or sold without registration with the United States Securities and Exchange Commission or an applicable exemption from the registration requirements. The investors acknowledged that the securities to be issued have not been registered under the Securities Act; they understood the economic risk of an investment in the securities; and they had the opportunity to ask questions of and receive answers from our management concerning any and all matters related to acquisition of the securities. The sales were made to sophisticated or accredited investors, as defined in Rule 501(a). Further, we gave the purchasers the opportunity to ask questions and receive answers concerning the terms and conditions and to obtain any additional information which we possessed or could acquire without unreasonable effort or expense necessary to verify the accuracy of information furnished. At a reasonable time prior to the sale of securities, we advised the purchasers of the limitations on resale in the manner contained in Rule 502(d) 2. Neither we, nor any person acting on our behalf, sold the securities by any form of general solicitation or general advertising.
Use of Proceeds of Registered Securities.
None
Penny Stock Regulation.
Shares of our common stock are subject to rules adopted the Securities and Exchange Commission that regulate broker-dealer practices in connection with transactions in "penny stocks". Penny stocks are generally equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in those securities is provided by the exchange or system). These penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from these rules to deliver a standardized risk disclosure document prepared by the Securities and Exchange Commission, which contains the following:
·
a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading;
·
a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to violation to such duties or other requirements of securities' laws
·
a brief, clear, narrative description of a dealer market, including "bid" and "ask" prices for penny stocks and the significance of the spread between the "bid" and "ask" price;
·
a toll-free telephone number for inquiries on disciplinary actions;
·
definitions of significant terms in the disclosure document or in the conduct of trading in penny stocks; and
·
such other information and is in such form (including language, type, size and format), as the Securities and Exchange Commission shall require by rule or regulation.
Prior to effecting any transaction in penny stock, the broker-dealer also must provide the customer the following:
·
the bid and offer quotations for the penny stock;
·
the compensation of the broker-dealer and its salesperson in the transaction:
·
the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and
·
monthly account statements showing the market value of each penny stock held in the customer's account.
In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for a stock that becomes subject to the penny stock rules. Holders of shares of our common stock may have difficulty selling those shares because our common stock is subject to penny stock rules.
Issuer Purchases of Equity Securities
We did not repurchase any shares of its common stock during the fiscal year ending December 31, 2015.
Item 6.
Item 6. Selected Financial Data.
Not applicable.
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.
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 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. There were a total of 199,611,900 shares of common stock issued and outstanding as of January 14, 2014 (the date of record). The number of shares of common stock voting in favor of the reverse split was sufficient for approval. 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.
On October 1, 2014, Murray Fleming was appointed the Company's Chief Executive Officer for the 12-month period ending October 1, 2015. Mr. 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.
Following the purchase of the "Glucose Health Natural Blood Sugar Maintenance" product, the Company undertook a series of steps to achieve a final product offering that would be considered efficacious as well as pleasant tasting by our target consumer market and would offer a value proposition relative to our competition in order to be considered for stocking by national and regional pharmacy retailers. To assist in achieving our final product objectives, we retained a former head of beverage product development at Nestle. We retained an attorney specializing in compliance with Food and Drug Administration (FDA) regulations, necessary, in part, to allow our product to be stocked by national pharmacy retailers. We also undertook a number of actions to establish and build our Glucose HealthÒ brand. The Company conducted a design competition related to its packaging artwork and product logo and retained an experienced product packaging graphic artist to assist with all digital and print representations of the product. The Company filed for and received trademark protection for Glucose HealthÒ with the United States Trademark and Patent Office (USPTO). While our primary sales and marketing focus is achieving sales to consumers through national and regional pharmacies, secondarily, we intend to also market the product directly to customers via our dedicated product website and through other online marketplaces.
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, 2014, the board of directors voted to designate Series A Special Preferred Shares consisting of 1,000 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 an existing consulting contract with the Company's CEO, Murray Fleming, for an additional 12 months, through October 1, 2016, without further compensation, in exchange for the issuance to Mr. Fleming, of the 1,000 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 5, 2015, the Company signed a contract manufacturing agreement for testing, compounding, supply and order fulfillment for the Glucose HealthÒ product and additionally a purchasing agreement to distribute the product in a limited number of Northwest Arkansas pharmacies.
On January 7, 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.
On January 27, 2015 the Company announced the filing of its initial application for trademark protection related to its Glucose HealthÒ 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 HealthÒ 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. Mr. Fleming replaces James Hodge the Company's interim Chief Financial Officer. Mr. 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.
On May 1, 2015, the Company filed Form 8-A12G registering a class of securities under the Securities Exchange Act of 1934 and became subject to the 1934 Act.
The Company completed the first production run of the product on May 26, 2015 and pursuant to the January 5, 2015 purchasing agreement, the product began to be offered for retail sale through a limited number of Northwest Arkansas pharmacies and additionally, on the Company's product website www.glucosehealth.com.
Our Plan of Operation for the Next Twelve Months
Our principal business strategy for the next twelve months will be to implement marketing and sales initiatives and earn significant revenues from our Glucose HealthÒ product. Our sales initiatives will be focused upon securing repeat purchase orders from national and regional pharmacy retailers for our Glucose HealthÒ Daily Blood Sugar Maintenance product. Our marketing initiatives will be primarily to support Glucose HealthÒ channel sales through national and regional partners. We intend to begin advertising in and sponsoring, various print, digital and social media platforms, which align with the interest of our customers in natural products including dietary supplements for pre-diabetes and Type-2 diabetes. Secondarily to our primary sales and marketing initiatives above, we also intend to grow our online sales of Glucose HealthÒ product through sales from our product website and sales through other online marketplaces. We also intend to further develop our Glucose HealthÒ product in order to introduce variations of our proprietary formula and to introduce a variety of packaging options to our target consumer market segment.
At December 31, 2015 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. Further, 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." While we expect to obtain significant revenues from future product sales, in the absence of significant sales and profits, we will seek to raise 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, even 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, 2015, our total assets were $15,407 consisting of $2,055 cash, $8,370 inventory consisting of 801 units of Glucose HealthÒ Daily Blood Sugar Maintenance product, $3,150 accounts receivable and $1,282 prepaid consultant compensation. This compares to our total assets of $44,030 at December 31, 2014, consisting of $4,871 in cash and $38,859 in prepaid consultant compensation.
At December 31, 2015 our current liabilities totaled $403,226 consisting of $94,920 in accounts payable and accrued expenses, $6,075 for short term loans, $100,829 in related party convertible short-term loans and $201,402 in convertible short-term loans. This compares to our current liabilities at December 31, 2014 of $324,582 consisting of $154,659 in accounts payable and accrued expenses $7,747 for a short-term loan, $23,927 for a short-term loan from a related party and $138,249 in convertible short-term loans.
We had a working capital deficit for 2015 and 2014 of $388,119 and $280,852, 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, 2015 and 2014, we had no other liabilities and no long-term commitments or contingencies.
Material Commitments
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 $0.0065 per share.
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 $0.0065 per share.
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 $0.0065 per share.
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 $0.0065 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 $0.0065 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 $0.0065 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 $0.0065 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 $0.005 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 $0.005 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 $0.005 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 $0.005 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 $0.004 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 $0.0025 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 $0.0025 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 $0.00475 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 $0.09 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 $0.09 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 $0.04 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 $0.04 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 $0.04 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 $0.031 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 $0.031 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 $0.025 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 $0.025 per share.
On April 1, 2015, the Company issued a $5,000 convertible note to a corporation. The loan bears interest at 5% and has a maturity date of October 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 $0.020 per share.
On April 1, 2015, 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 October 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 $0.020 per share.
On May 1, 2015, the Company issued a $5,000 convertible note to a corporation. The loan bears interest at 5% and has a maturity date of November 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 $0.025 per share.
On May 1, 2015, 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 November 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 $0.025 per share.
On June 1, 2015, the Company issued a $4,000 convertible note to a corporation. The loan bears interest at 5% and has a maturity date of December 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 $0.025 per share.
On June 1, 2015, the Company issued a $4,000 convertible note to a corporation owned by the Company's CEO. The loan bears interest at 5% and has a maturity date of December 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 $0.025 per share.
On July 1, 2015, the Company issued a $9,090 convertible note to a corporation. The loan bears interest at 5% and has a maturity date of December 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 $0.025 per share.
On July 1, 2015, the Company issued a $8,305 convertible note to a company owned by the Company's CEO. The loan bears interest at 5% and has a maturity date of December 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 $0.025 per share.
On December 10, 2015, the Company issued a $2,500 convertible note to a company owned by the Company's CEO. The loan bears interest at 5% and has a maturity date of June 10, 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 $0.03 per share.
Results of Operations.
Results of operations for the year ended December 31, 2015 compared to year ended December 31, 2014
Revenues
We generated nominal revenues of $4,272 and $2,739 for the years ended December 31, 2015 and 2014, respectively. The Company's focus for 2016 will be the manufacturing, marketing and distribution of our Glucose HealthÒ Daily Blood Sugar Maintenance dietary supplement product. We hope to generate substantial revenues, continue our operations and fully implement our business plan by December 31, 2016.
Gross Profit (Loss)
We reported a gross profit (loss) of $397 and ($20,726) for the years ended December 31, 2015 and 2014, 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 continue to be nominal.
Operating Expenses
For the year ended December 31, 2015, we had total operating expenses of $156,570, as compared to total operating expenses of $524,490 for the year ended December 31, 2014. The substantial decrease of $367,920 or 70.1%, in our operating expenses between the two periods is primarily due to an approximate $501,000 decrease in professional fees incurred in 2015 and a decrease of approximately $23,490 for other general and administrative expenses compared to 2014. We expect we will continue to incur significant legal and accounting expenses related to being a public company.
Net Loss
For the year ended December 31, 2015, we had a net loss of $266,064 or $0.14 per share. In comparison, for the year ended December 31, 2014, we had a net loss of $669,409 or $0.99 per share. We expect to continue to incur net losses for the foreseeable future and until we generate significant revenues.
Off-Balance Sheet Arrangements.
We have no off-balance sheet arrangements.
Item 7A.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk.
Not applicable.
Item 8.
Item 8. Financial Statements
The financial statements required by Item 8 are presented in the following order:
GLUCOSE HEALTH INC.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Directors of
Glucose Health Inc.
We have audited the accompanying balance sheets of Glucose Health, Inc. (the "Company") as of December 31, 2015 and 2014, and the related statements of operations, changes in stockholders' deficit and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Glucose Health Inc. as of December 31, 2015 and 2014, and the results of its statements of operations, changes in stockholders' deficit, and cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company is in process of executing its business plan and expansion. The Company has not generated significant revenue to this point, however, has been successful in raising funds in their private placement. The lack of profitable operations and the need to continue to raise funds raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in this regard are described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Anton & Chia, LLP
Newport Beach, California
April 14, 2016
GLUCOSE HEALTH, INC.
BALANCE SHEETS
_______________
(1) The common stock shares authorized, issued and outstanding have been adjusted to reflect a 10 to 1 reverse split, which was effective in February 2014 and 50 to 1 reverse split, which was effective in November 2014.
The accompanying notes are an integral part of these financial statements.
GLUCOSE HEALTH, INC.
STATEMENTS OF OPERATIONS
(2) The common stock shares authorized, issued and outstanding have been adjusted to reflect a 10 to 1 reverse split, which was effective in February 2014 and 50 to 1 reverse split, which was effective in November 2014.
The accompanying notes are an integral part of these financial statements.
GLUCOSE HEALTH, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
_______________
(3) The common stock shares authorized, issued and outstanding have been adjusted to reflect a 10 to 1 reverse split, which was effective in February 2014 and 50 to 1 reverse split, which was effective in November 2014
The accompanying notes are an integral part of these financial statements.
GLUCOSE HEALTH, INC.
STATEMENTS OF CASH FLOWS
The accompanying notes are an integral part of these financial statements.
GLUCOSE HEALTH INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2015 AND 20143
NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION
On March 27, 2007, Glucose Health, Inc. (f/k/a Bio-Solutions Corp.) ("Company") was incorporated in the State of Nevada.
At inception, the Company was a manufacturer of Nutra-Animal, a pre-mix anti-oxidant for chicken integrators. The Company was also the distributor of GreenEx™, a biological larvicide produced from a naturally occurring bacterium that produces a crystalline protein toxin, toxic for mosquitoes, vectors of malaria.
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 for 1 stock split. All shares have been reflected retroactively in accordance with SAB Topic 14C.
On September 26, 2011, the Company entered into an acquisition agreement for Type2 Defense, a natural dietary supplement for the Type-2 diabetes and pre-diabetes market category and the Company's previous operations were discontinued.
During October 2012, the board of directors increased the number of common shares authorized from 90,000,000 to 200,000,000 shares.
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.
On April 8, 2014, in a special meeting of the board of directors, the board voted in favor of amending the Company's bylaws to decrease the number of members of the board of directors from three to one.
On October 1, 2014, Murray Fleming was appointed as the Company's Chief Executive Officer for the 12-month period ending October 1, 2015 and 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.
As of 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.
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, a 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 an existing consulting contract with the Company's CEO, Murray Fleming, for an additional 12 months, through October 1, 2016, 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 February 10, 2015, Murray Fleming, the Company's Chief Executive Officer was appointed the Company's Chief Financial Officer.
Going Concern
The Company had a working capital deficiency of $388,119 and an accumulated deficit of $5,837,194 as of December 31, 2015. The Company's continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations and/or obtain additional financing from its members or other sources, as may be required.
These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has not generated significant revenues, has generated losses totaling $5,837,194 since inception and needs to raise additional funds to carry out its business plan. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, and the ability of the Company to obtain necessary equity financing to continue operations. The Company has had very little operating history to date. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. These factors raise substantial doubt regarding the ability of the Company to continue as a going concern.
The Company estimates it will need a total of $120,000 in capital to continue operations through the end of 2016. Besides generating revenues from current operations, the Company may need to raise additional capital to expand operations to the point at which the Company can achieve profitability. The terms of equity that may be raised may not be on terms acceptable by the Company. If adequate funds cannot be raised outside of the Company, the Company's officer and directors may need to contribute funds to sustain operations.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The Company provides estimates for its common stock valuations, inventory reserves, and valuation allowances for deferred taxes.
Comprehensive Income (Loss)
The Company adopted ASC 220-10, "Reporting Comprehensive Income." ASC 220-10 requires the reporting of comprehensive income in addition to net income from operations.
Comprehensive income is a more inclusive financial reporting methodology that includes disclosure of information that historically has not been recognized in the calculation of net income.
The Company previously operated in Canada and certain accounts of the Company were reflected in currencies other than the U.S. dollar. Effective January 1, 2013, the Company changed its functional currency from the Canadian dollar to the US dollar and combined the accounting records into a single set of books based on the currency translation rate at January 1, 2013. Prior to January 1, 2013, the Company recorded translation adjustments as accumulated other comprehensive income (loss). Gains and losses from foreign currency transactions were included in other income (expense) in the results of operations.
Cash Flow Reporting
The Company follows ASC 230, Statement of Cash Flows, for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method ("Indirect method") as defined by ASC 230, Statement of Cash Flows, to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments.
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, 2015 and 2014.
The Company maintains its cash balances at one financial institution that is insured by the Federal Deposit Insurance Corporation.
Prepaid Expenses
The Company considers all items incurred for future services to be prepaid expenses. As of December 31, 2015 and 2014, the Company had prepaid expenses of $1,282 and $38,859, respectively, comprised of a prepaid subscription and the issuance of unregistered shares of the Company's common stock to consultants, respectively.
Recoverability of Long-Lived Assets
The Company reviews its 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 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 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 years ended December 31, 2015 and 2014, 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 approximate fair value because of the immediate or short-term maturity of these financial instruments. The Company does not utilize derivative instruments.
ASC 820, Fair Value Measurements and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity's own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:
Level 1
Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities
Level 2
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.
Level 3
Inputs that are both significant to the fair value measurement and unobservable.
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2015. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these 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.
Income Taxes
The Company accounts for income taxes utilizing the liability method of accounting. Under the liability method, deferred taxes are determined based on differences between financial statement and tax bases of assets and liabilities at enacted tax rates in effect in years in which differences are expected to reverse. Valuation allowances are established, when necessary, to reduce deferred tax assets to amounts that are expected to be realized.
The Company follows ASC 740-10, "Accounting for Uncertainty in Income Taxes" ("ASC 740-10"). This interpretation requires recognition and measurement of uncertain income tax positions using a "more-likely-than-not" approach. ASC 740-10 is effective for fiscal years beginning after December 15, 2006. Management has adopted ASC 740-10 for 2007, and they evaluate their tax positions on an annual basis, and have determined that as of December 31, 2015, no additional accrual for income taxes is necessary. The Company's policy is to recognize both interest and penalties related to unrecognized tax benefits expected to result in payment of cash within one year are classified as accrued liabilities, while those expected beyond one year are classified as other liabilities. The Company has not recorded any interest or penalties since its inception. The Company is required to file income tax returns in the U.S. federal tax jurisdiction and in various state tax jurisdictions. The tax years for 2009 to 2014 remain open for examination by federal and/or state tax jurisdictions. The Company is currently not under examination by any other tax jurisdictions for any tax year.
Revenue Recognition
The Company currently has nominal revenues. Once the Company generates significant revenues from the sales of our products, the following criteria for revenue recognition will be utilized:
1)
Persuasive evidence of an arrangement exists;
2)
delivery has occurred or services have been rendered;
3)
the seller's price to the buyer is fixed or determinable, and
4)
collectability 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. 718 and No. 505. The Company issues restricted stock to employees for their services. Cost for these transactions are measured at the fair value of the equity instruments issued at the date of grant. These shares are considered fully vested and the fair market value is recognized as expense in the period granted. The Company also issues restricted stock to consultants for various services. Cost for these transactions are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The value of the common stock is measured at the earlier of (i) the date at which a firm commitment only if there is sufficient disincentive to ensure performance or (ii) the date at which the counterparty's performance is complete. The Company recognized consulting expenses and a corresponding increase to additional paid-in-capital related to stock issued for services. For agreements requiring future services, the consulting expense is to be recognized ratably over the requisite service period.
(Loss) Per Share of Common Stock
Basic net loss per common share is computed using the weighted average number of common shares outstanding. Diluted earnings per share (EPS) include additional dilution from common stock equivalents, such as stock issuable pursuant to the exercise of stock options warrants and convertible notes. Common stock equivalents are not included in the computation of diluted earnings per share when the Company reports a loss because to do so would be anti-dilutive for periods presented. Except as noted below, the Company has not issued any options or warrants to date. At December 31, 2015, the total shares issuable upon conversion of convertible notes payable would be approximately 2,327,352 shares of the Company's common stock.
Inventory
Inventory is stated at the lower of cost (FIFO: first-in, first-out) or market, and includes 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, 2015 and 2014, the Company had inventory of $8,370 and $0, respectively, with no allowance for obsolescence.
Recent Issued Accounting Standards
There were updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to have a material impact on the Company's financial position, results of operations or cash flows.
NOTE 3 - STOCKHOLDERS' DEFICIT
The Company was established with one class of stock, common stock - 75,000,000 shares authorized at a par value of $0.001. On June 30, 2010, the authorized shares were increased to 90,000,000. In October 2012, the Company increased the authorized common shares to 200,000,000. In November 2014, the Company established a second class of stock - 1,000 shares of preferred stock with no par value.
As of December 31, 2015 and 2014, 2,451,888 and 1,309,825 shares of the Company's common stock and 1,000 and 1,000 shares of the Company's preferred stock were issued and outstanding, respectively.
Issuances pursuant to Conversions
During January 2014, a promissory note was converted into unregistered shares of the Company's common stock. The amount totaled $12,849 including interest was converted into 17,132 unregistered shares of the Company's common stock at $0.75 per share, the conversion price as stated in the convertible promissory note. On January 6, 2014, the Company agreed to modify the terms of this $12,500 convertible promissory notes dated May 27, 2013. The conversion rate was reduced from $5.00 per share to $0.75 per share. The Company recognized a loss on extinguishment of $14,562 resulting from the debt modification.
During March 2014, a promissory note was partially converted into unregistered shares of the Company's common stock. The amount totaled $4,000 was converted into 16,000 unregistered shares of the Company's common stock at $0.25 per share, the conversion price as stated in the convertible promissory note.
During March 2014, a promissory note was converted into unregistered shares of the Company's common stock. The amount totaled $13,151 including interest was converted into 13,171 unregistered shares of the Company's common stock at $0.999 per share, the conversion price as stated in the convertible promissory note.
During January 2015, the Company issued 58,092 shares of common stock to a corporation for conversion of $250 principal and $40 accrued interest related to a Note. These shares were valued at $0.005 per share, the conversion price as stated in the Note.
During February 2015, the Company issued 177,072 shares of common stock to a corporation for conversion of $886 in principal and accrued interest related to a Note. These shares were valued at $0.005 per share, the conversion price as stated in the Note.
During March 2015, the Company issued 162,264 shares of common stock to a corporation for conversion of $541 in principal and accrued interest related to a Note. These shares were valued at $0.005 per share, the conversion price as stated in the Note.
During April 2015, the Company issued 86,882 shares of common stock to a corporation for conversion of $400 principal and $40 accrued interest related to Note. These shares were valued at $0.005 per share, the conversion price as stated in the Note.
During June 2015, the Company issued 87,564 shares of common stock to a corporation for conversion of $400 principal and $38 accrued interest related to a Note. These shares were valued at $0.005 per share, the conversion price as stated in the Note.
During September 2015, the Company issued 88,438 shares of common stock to a corporation for conversion of $400 principal and $42 accrued interest related to a Note. These shares were valued at $0.005 per share, the conversion price as stated in the Note.
During November 2015, the Company issued 89,020 shares of common stock to a corporation for conversion of $400 principal and $45 accrued interest related to a Note. These shares were valued at $0.004 per share, the conversion price stated in the Note.
During December 2015, the Company issued 111,864 shares of common stock to a corporation for conversion of $500 principal and $59 accrued interest related to a Note. These shares were valued at $0.07 per share, the conversion price stated in the Note.
Issuances pursuant to Agreements
During March 2014, the Company signed an agreement with a firm to provide strategic business development activities for the Company. The firm will be compensated with 7,200 unregistered shares of the Company's common stock payable in increments of 600 shares per month for twelve (12) months starting on April 1, 2014. During 2014, the Company issued 7,200 unregistered shares of the Company's common stock, which were valued at $0.52 per share or $3,732 to fully satisfy the March 2014 agreement. Compensation was calculated at the fair market value of the shares at the date earned.
On June 27, 2014, the Company signed a one-year consulting agreement with an individual to provide product marketing, endorsement and spokesperson services for the Company. The agreement began on May 10, 2014 and expires on May 10, 2015. The consultant will be compensated with 5,000 shares of the Company's common stock. These shares were issued in July 2014. The shares were valued at $0.65 per share or $3,250. Compensation was calculated at the fair market value of the shares at the date earned. In addition, the consultant may purchase 50,000 shares of the Company's common stock at an exercise price of $0.025 per share each quarter ending May 10, 2015 (an aggregate of 200,000 shares). Options were valued using the Black Scholes Method, resulting in a value of $103,700 of which $51,850 and $51,850 have vested and expense recognized in year 2015 and 2014, respectively. The weighted average assumptions made in calculating the fair values of options granted during the years ended December 31, 2015 and 2014 are as follows:
During February 2015, the Company issued 70,867 unregistered shares of the Company's common stock as compensation to the Company's chairman of the board. The shares were valued at $0.08467 per share or $6,000.
During April 2015, the Company issued 50,000 unregistered shares of the Company's common stock in final settlement of a consulting agreement. The shares were valued at $1,787.
During May 2015, the Company issued 100,000 unregistered shares of the Company's common stock in final settlement of an outstanding debt. The shares were valued at $22,775.
During June 2015, the Company issued 10,000 unregistered shares of the Company's common stock as compensation to a consultant. The shares were valued at $500.
During November 2015, the Company's issued 50,000 unregistered shares of the Company's common stock as compensation to a consultant. These shares were valued at $0.07 per share or $3,500.
NOTE 4 - NOTES PAYABLE
On April 20, 2012, the Company issued a $2,500 convertible note to a corporation. 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 $0.009 per share. After the due date, the interest rate on the convertible note increased to 15%. The Company calculated the fair value of the beneficial conversion feature as the difference between the conversion price and the fair market value of the Company's common stock into on the date of issuance. The fair value of the conversion option in connection with the note on the date of issuance aggregated $2,083, and was recorded as debt discount. The debt discount was amortized through the term of the note. The unpaid balance including accrued interest was $3,391 and $3,016 at December 31, 2014 and December 31, 2013, respectively. The Company is not compliant with the repayment terms of the note.
On May 10, 2012, the Company issued a $2,600 convertible note to William Gallagher, the Company's former CEO. The loan bears interest at 5% and has a maturity date of November 10, 2012. In addition, at any time, William Gallagher may convert the note into shares of the Company's common stock at an exercise price of $0.009 per share. After the due date, the interest rate on the convertible note increases to 15%. The Company calculated the fair value of the beneficial conversion feature as the difference between the conversion price and the fair market value of the Company's common stock into on the date of issuance. The fair value of the conversion option in connection with the note on the date of issuance aggregated $1,733, and was recorded as debt discount. The debt discount was amortized through the term of the note. During June and July 2013, the Company paid the principal and interest balance of $2,909 to William Gallagher.
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 $2.50 per share. The Company calculated the fair value of the beneficial conversion feature as the difference between the conversion price and the fair market value of the Company's common stock into on the date of issuance. The fair value of the conversion option in connection with the note on the date of issuance aggregated $12,500, and was recorded as debt discount. The debt discount was amortized through the term of the note. On January 6, 2014, the Company agreed to modify the terms of this $12,500 convertible promissory notes dated May 27, 2013. The conversion rate was reduced from $2.50 per share to $0.75 per share. During January 2014, $12,849 including interest was converted into 17,132 unregistered shares of the Company's common stock at $0.75 per share to fully satisfy the promissory note. The unpaid balance including accrued interest was $12,865 at December 31, 2013.
On June 11, 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. The Company calculated the fair value of the beneficial conversion feature as the difference between the conversion price and the fair market value of the Company's common stock into on the date of issuance. The fair value of the conversion option in connection with the note on the date of issuance aggregated $2,500, and was recorded as debt discount. The debt discount was amortized through the term of the note. The unpaid balance including accrued interest was $7,001 and $6,676 at December 31, 2014 and December 31, 2013, respectively. The Company is not compliant with the repayment terms of the note.
On June 11, 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. The Company calculated the fair value of the beneficial conversion feature as the difference between the conversion price and the fair market value of the Company's common stock into on the date of issuance. The fair value of the conversion option in connection with the note on the date of issuance aggregated $2,393, and was recorded as debt discount. The debt discount was amortized through the term of the note. The unpaid balance including accrued interest was $6,702 and $6,391 at December 31, 2014 and December 31, 2013, respectively. The Company is not compliant with the repayment terms of the note.
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. On March 12, 2015, the repayment term were extended to December 31, 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. The Company calculated the fair value of the beneficial conversion feature as the difference between the conversion price and the fair market value of the Company's common stock into on the date of issuance. The fair value of the conversion option in connection with the note on the date of issuance aggregated $21,000, and was recorded as debt discount. The debt discount is amortized through the term of the note. The unpaid balance including accrued interest was $22,496 at December 31, 2014.
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. On March 12, 2015, the repayment term were extended to December 31, 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. The Company calculated the fair value of the beneficial conversion feature as the difference between the conversion price and the fair market value of the Company's common stock into on the date of issuance. The fair value of the conversion option in connection with the note on the date of issuance aggregated $14,538, and was recorded as debt discount. The debt discount is amortized through the term of the note. The unpaid balance including accrued interest was $22,365 at December 31, 2014.
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. On March 12, 2015, the repayment term were extended to December 31, 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. The Company calculated the fair value of the beneficial conversion feature as the difference between the conversion price and the fair market value of the Company's common stock into on the date of issuance. The fair value of the conversion option in connection with the note on the date of issuance aggregated $7,538, and was recorded as debt discount. The debt discount is amortized through the term of the note. The unpaid balance including accrued interest was $10,375 at December 31, 2014.
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. On March 12, 2015, the repayment term were extended to December 31, 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. The Company calculated the fair value of the beneficial conversion feature as the difference between the conversion price and the fair market value of the Company's common stock into on the date of issuance. The fair value of the conversion option in connection with the note on the date of issuance aggregated $10,000, and was recorded as debt discount. The debt discount is amortized through the term of the note. The individual contributed $5,000 in June 2014 and $5,000 in July 2014. The unpaid balance was $10,250 at December 31, 2014.
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. On March 12, 2015, the repayment term were extended to December 31, 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. The Company calculated the fair value of the beneficial conversion feature as the difference between the conversion price and the fair market value of the Company's common stock into on the date of issuance. The fair value of the conversion option in connection with the note on the date of issuance aggregated $10,000, and was recorded as debt discount. The debt discount is amortized through the term of the note. The unpaid balance was $10,229 at December 31, 2014.
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. On March 12, 2015, the repayment term were extended to December 31, 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. The Company calculated the fair value of the beneficial conversion feature as the difference between the conversion price and the fair market value of the Company's common stock into on the date of issuance. The fair value of the conversion option in connection with the note on the date of issuance aggregated $8,000, and was recorded as debt discount. The debt discount is amortized through the term of the note. The unpaid balance was $8,167 at December 31, 2014.
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. On March 12, 2015, the repayment term were extended to December 31, 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. The Company calculated the fair value of the beneficial conversion feature as the difference between the conversion price and the fair market value of the Company's common stock into on the date of issuance. The fair value of the conversion option in connection with the note on the date of issuance aggregated $8,000, and was recorded as debt discount. The debt discount is amortized through the term of the note. The unpaid balance was $8,167 at December 31, 2014.
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. On March 12, 2015, the repayment term were extended to December 31, 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. The Company calculated the fair value of the beneficial conversion feature as the difference between the conversion price and the fair market value of the Company's common stock into on the date of issuance. The fair value of the conversion option in connection with the note on the date of issuance aggregated $6,000, and was recorded as debt discount. The debt discount is amortized through the term of the note. The unpaid balance was $6,100 at December 31, 2014.
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. On March 12, 2015, the repayment term were extended to December 31, 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. The Company calculated the fair value of the beneficial conversion feature as the difference between the conversion price and the fair market value of the Company's common stock into on the date of issuance. The fair value of the conversion option in connection with the note on the date of issuance aggregated $6,000, and was recorded as debt discount. The debt discount is amortized through the term of the note. The unpaid balance was $6,100 at December 31, 2014.
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. The Company calculated the fair value of the beneficial conversion feature as the difference between the conversion price and the fair market value of the Company's common stock into on the date of issuance. The fair value of the conversion option in connection with the note on the date of issuance aggregated $2,405, and was recorded as debt discount. The debt discount is amortized through the term of the note. The unpaid balance was $4,683 at December 31, 2014.
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. The Company calculated the fair value of the beneficial conversion feature as the difference between the conversion price and the fair market value of the Company's common stock into on the date of issuance. The fair value of the conversion option in connection with the note on the date of issuance aggregated $2,405, and was recorded as debt discount. The debt discount is amortized through the term of the note. The unpaid balance was $4,683 at December 31, 2014.
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. The Company calculated the fair value of the beneficial conversion feature as the difference between the conversion price and the fair market value of the Company's common stock into on the date of issuance. The fair value of the conversion option in connection with the note on the date of issuance aggregated $0, and no debt discount was recorded. The debt discount is amortized through the term of the note. The unpaid balance was $3,638 at December 31, 2014.
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. The Company calculated the fair value of the beneficial conversion feature as the difference between the conversion price and the fair market value of the Company's common stock into on the date of issuance. The fair value of the conversion option in connection with the note on the date of issuance aggregated $4,110, and was recorded as debt discount. The debt discount is amortized through the term of the note. The unpaid balance was $6,907 at December 31, 2014.
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. The Company calculated the fair value of the beneficial conversion feature as the difference between the conversion price and the fair market value of the Company's common stock into on the date of issuance. The fair value of the conversion option in connection with the note on the date of issuance aggregated $4,110, and was recorded as debt discount. The debt discount is amortized through the term of the note. The unpaid balance was $6,907 at December 31, 2014.
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. The Company calculated the fair value of the beneficial conversion feature as the difference between the conversion price and the fair market value of the Company's common stock into on the date of issuance. The fair value of the conversion option in connection with the note on the date of issuance aggregated $2,837, and was recorded as debt discount. The debt discount is amortized through the term of the note. The unpaid balance was $2,981 at December 31, 2014.
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. The Company calculated the fair value of the beneficial conversion feature as the difference between the conversion price and the fair market value of the Company's common stock into on the date of issuance. The fair value of the conversion option in connection with the note on the date of issuance aggregated $5,000, and was recorded as debt discount. The debt discount is amortized through the term of the note. The unpaid balance was $5,021 at December 31, 2014.
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. The Company calculated the fair value of the beneficial conversion feature as the difference between the conversion price and the fair market value of the Company's common stock into on the date of issuance. The fair value of the conversion option in connection with the note on the date of issuance aggregated $5,000, and was recorded as debt discount. The debt discount is amortized through the term of the note. The unpaid balance was $5,021 at December 31, 2014.
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 $0.04 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 $0.04 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 $0.04 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 $0.031 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 $0.031 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 $0.025 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 $0.025 per share.
On April 1, 2015, the Company issued a $5,000 convertible note to a corporation. The loan bears interest at 5% and has a maturity date of October 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 $0.020 per share.
On April 1, 2015, 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 October 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 $0.020 per share.
On May 1, 2015, the Company issued a $5,000 convertible note to a corporation. The loan bears interest at 5% and has a maturity date of November 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 $0.025 per share.
On May 1, 2015, 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 November 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 $0.025 per share.
On June 1, 2015, the Company issued a $4,000 convertible note to a corporation. The loan bears interest at 5% and has a maturity date of December 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 $0.025 per share.
On June 1, 2015, the Company issued a $4,000 convertible note to a corporation owned by the Company's CEO. The loan bears interest at 5% and has a maturity date of December 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 $0.025 per share.
On July 1, 2015, the Company issued a $9,090 convertible note to a corporation. The loan bears interest at 5% and has a maturity date of December 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 $0.025 per share.
On July 1, 2015, the Company issued a $8,305 convertible note to a company owned by the Company's CEO. The loan bears interest at 5% and has a maturity date of December 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 $0.025 per share.
On December 10, 2015, the Company issued a $2,500 convertible note to a company owned by the Company's CEO. The loan bears interest at 5% and has a maturity date of June 10, 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 $0.03 per share.
NOTE 5 - PROVISION FOR INCOME TAXES
Deferred income taxes are determined using the liability method for the temporary differences between the financial reporting basis and income tax basis of the Company's assets and liabilities. Deferred income taxes are measured based on the tax rates expected to be in effect when the temporary differences are included in the Company's tax return. Deferred tax assets and liabilities are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax bases.
The income tax provision (benefit) consists of the following:
At December 31, 2015 and 2014, the Company had a net operating loss ("NOL's") carry forward in the amount of $5,837,194 and $5,571,130, respectively, available to offset future taxable income. The Company established valuation allowances equal to the full amount of the deferred tax assets due to the uncertainty of the utilization of the operating losses in future periods. The Company has not filed its federal tax returns since inception and therefore, the NOL's will not be available to offset future taxable income until the tax returns are filed with the respective federal tax authorities.
A reconciliation of the Company's effective tax rate as a percentage of income before taxes and federal statutory rate for the periods ended December 31, 2015 and 2014 is summarized below.
NOTE 6 - INTELLECTUAL PROPERTY
On September 26, 2011, the Company acquired all the assets and intellectual property rights of Type2 Defense, a natural dietary supplement. The acquisition of Type2 Defense was paid for by the issuance of 40,000 shares of the Company's common stock. The shares were valued at $200,000 or $5.00 per share based on the closing price of the Company's common stock on September 26, 2011. The agreement also included the issuance of 20,000 shares of the Company's common stock upon achieving certain operational milestones and an additional 20,000 shares of Company's common stock upon reaching 1,500 customers. On November 4, 2011, an advance of 1,200 shares of the Company's common stock related to the reaching of the 1,500 customers milestone in the original agreement was approved by the board of directors. The shares were valued at $5.50 per share or $6,600. The issuance of 20,000 shares of the Company's common stock upon reaching 1,500 customers, was reduced by the advance to 1,200 shares. During June 2013, the Company achieved the operational milestones as specified in the September 26, 2011 Type2 Defense acquisition agreement. On June 18, 2013, the Company issued 20,000 shares to the Company's former CEO for the Type2 Defense product meeting the operational milestones. The shares were valued at $7.50 per share or $150,000 and included as stock based compensation in the statement of operation in 2011. In addition, on June 18, 2013, an advance of 10,000 shares of the Company's common stock related to reaching of 1,500 customers' milestone in the original agreement was approved by the board of directors and issued to William Gallagher, the Company's former CEO. The shares were valued at $7.50 per share or $75,000 and included as stock based compensation in the accompanying statement of operation in 2013.
Since the Company has not been able to generate substantial revenues from the Type2 Defense product since June 2013 and has produced only nominal sales of the product in 2014, the Company elected to write-off the $200,000 intellectual property for Type2 Defense as impaired. In addition, as the Company elected to terminate development of the Type2 Defense product in October 2014, the Company wrote down its inventory to -0- as of December 31, 2014 and no further shares will be issued or compensation paid under the aforementioned agreement with the Company's former CEO.
On October 1, 2014, the Company entered into an Intellectual Property Purchase Agreement to purchase the "Glucose Health Natural Blood Sugar Maintenance" product for the purchase price of 300,000 unregistered shares of the Company's common stock from a company beneficially owned by the Company's CEO, Murray Fleming. The shares were recorded at their par value of $0.001 per share or $300, valued at the nominal historical cost of the related party seller.
All assets other than the intellectual property had a fair value of $0, with the intellectual property valued at $300.
NOTE 7 - SUBSEQUENT EVENTS
On January 27, 2016 the Company notified OTC Markets, Inc. of its intention to not renew its OTCQB service. The Company filed Form 8-A12G in fiscal 2015 registering a class of securities under the 1934 Securities Exchange Act. Accordingly, the Company does not make use of the OTC Markets Disclosure and News Service and instead files its periodic and annual reports and audited financial statements with the Securities and Exchange Commission.
On February 4, 2016, the Company's Chief Executive Officer and Chief Financial Officer, Murray Fleming, was appointed to the Board of Directors of Glucose Health, Inc. ("Company"). On February 5, 2016, James Hodge resigned from the Board of Directors.
On January 6, 2016, Glucose Health, Inc. ("Company") executed a General Merchandise Supplier Agreement ("Agreement") with Wal-mart Stores, Inc. ("Customer") of Bentonville, Arkansas. On March 8, 2016, the Company received a series of material purchase orders from the Customer pursuant to this Agreement for delivery of its Glucose HealthÒ product - a natural dietary supplement formulated for persons concerned about pre-diabetes and Type-2 diabetes. The Company expects Glucose HealthÒ to be stocked and available for purchase by consumers in the "Diabetes Supplies" section of many of the Customer's pharmacy locations across the United States by early May, 2016.
Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item 9A.
Item 9A. Controls and Procedures.
Evaluation of disclosure controls and procedures.
We maintain controls and procedures designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and (ii) accumulated and communicated to our principal executive and principal financial officers to allow timely decisions regarding required disclosure. Based upon their evaluation of those controls and procedures performed as of December 31, 2015, the date of this report, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective.
Management's annual report on internal control over financial reporting.
The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a set of processes designed by, or under the supervision of, a company's principal executive and interim principal financial officers, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
·
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the Company's transactions and dispositions of the Company's assets;
·
provide reasonable assurance that The Company's transactions are recorded as necessary to permit preparation of the Company's financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of the Company's management and directors; and
·
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. It should be noted that any system of internal control, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system will be met. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and Interim Chief Financial Officer, the Company conducted an assessment of the effectiveness of the Company's internal control over financial reporting based on criteria established in "Internal Control-Integrated Framework" issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), as of December 31, 2015.
A material weakness is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of annual or interim financial statements will not be prevented or detected. In connection with the assessment described above, management identified the following control deficiency that represents material weaknesses at December 31, 2015:
·
Due to the limited number of Company personnel, a lack of segregation of duties and responsibilities with respect to our cash and control over the disbursements related thereto. An essential part of internal control is for certain procedures to be properly segregated and the results of their performance are adequately reviewed. This is normally accomplished by assigning duties so that no one person handles a transaction from beginning to end and incompatible duties between functions are not handled by the same person.
As a result of this material weakness described above, management has concluded that, as of December 31, 2015, the Company's internal control over financial reporting was not effective based on the criteria in "Internal Control-Integrated Framework" issued by COSO. The Company intends to augment the Company's internal controls procedures and expand the Company's accounting staff. The Company intends to initiate measures to remediate and refine the Company's internal controls to address this identified material weakness as the Company grows and obtains a stronger cash position that would justify additional expenditures.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) of the Exchange Act) during our most recently completed quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B.
Item 9B. Other Information.
None.
PART III
Item 10.
Item 10. Directors, Executive Officers and Corporate Governance.
As of the date of this Annual Report, the following table sets forth information regarding our executive officers and directors:
Murray Fleming. On October 1, 2014, Murray Fleming was appointed the Company's Chief Executive Officer for the 24-month period ending October 1, 2016. On February 10, 2015 Mr. Fleming was appointed the Company's Chief Financial Officer. From 2006 to the present date, Mr. Fleming has been the managing director of a privately held investment company. Mr. Fleming earned a Bachelor of Arts degree with formal concentrations in Economics & Environmental Studies from the University of Victoria in May of 1986. In addition to serving as Chief Executive Officer of Glucose Health Inc., Mr. Fleming is a director of Nacel Energy Corporation and serves as interim CEO, CFO and director of Vaporbrands International, Inc.
All directors hold office until the completion of their term of office, which is not longer than one year, or until their successors have been elected. All officers are appointed annually by the board of directors and serve at the discretion of the board. Currently, no compensation is paid to Directors.
There are no family relationships between any of our officers or directors. There are no orders, judgments, or decrees of any governmental agency or administrator, or of any court of competent jurisdiction, revoking or suspending for cause any license, permit or other authority to engage in the securities business or in the sale of a particular security or temporarily or permanently restraining any of our officers or directors from engaging in or continuing any conduct, practice or employment in connection with the purchase or sale of securities, or convicting such person of any felony or misdemeanor involving a security, or any aspect of the securities business or of theft or of any felony. Nor are any of the officers or directors of any corporation or entity affiliated with us so enjoined.
Code of Ethics. We do not currently have a Code of Ethics that applies to all employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. We plan to adopt a Code of Ethics.
Nominating Committee. Our entire board of directors participates in consideration of director nominees. The board will consider candidates who have experience as a board member or senior officer of a company or who are generally recognized in a relevant field as a well-regarded practitioner, faculty member or senior government officer. The board will also evaluate whether the candidates' skills and experience are complementary to the existing board's skills and experience as well as the board's need for operational, management, financial, international, technological or other expertise. The board will interview candidates that meet the criteria and then select nominees that Board believes best suit our needs.
The board will consider qualified candidates suggested by stockholders for director nominations. Stockholders can suggest qualified candidates for director nominations by writing to our board of directors at 609 SW 8th Street, 6th Floor, Bentonville, AR 72712. Submissions that are received that meet the criteria described above will be forwarded to the Board for further review and consideration. The Board will not evaluate candidates proposed by stockholders any differently than other candidates.
Audit Committee Financial Expert. Our board of directors does not have an "audit committee financial expert," within the meaning of such phrase under applicable regulations of the Securities and Exchange Commission, serving on its audit committee. The board of directors believes that all members of its audit committee are financially literate and experienced in business matters, and that one or more members of the audit committee are capable of (I) understanding generally accepted accounting principles ("GAAP") and financial statements, (ii) assessing the general application of GAAP principles in connection with our accounting for estimates, accruals and reserves, (iii) analyzing and evaluating our financial statements, (iv) understanding our internal controls and procedures for financial reporting; and (v) understanding audit committee functions, all of which are attributes of an audit committee financial expert. However, the board of directors believes that there is not any audit committee members who have obtained these attributes through the experience specified in the SEC's definition of "audit committee financial expert." Further, like many small companies, it is difficult for the Company to attract and retain board members who qualify as "audit committee financial experts," as competition for these individuals is significant. The board believes that its current audit committee is able to fulfill its role under SEC regulations despite not having a designated "audit committee financial expert." We believe the cost related to retaining a financial expert at this time is prohibitive. Further, because of our start-up operations, we believe the services of a financial expert are not warranted.
Audit Committee. Presently, the board of directors acts as the audit committee. The board of directors does not have an audit committee financial expert. The board of directors has not yet recruited an audit committee financial expert to join the board of directors because we have only recently commenced a significant level of financial operations.
Item 11.
Item 11. Executive Compensation
Summary Compensation Table.
The table set forth below summarizes the annual and long-term compensation for services in all capacities to us payable to our chief executive officer, our other executive officers and our directors for years ended December 31, 2015 and 2014.
______________
Outstanding Equity Awards.
As of December 31, 2015, the following named executive officers had the following unexercised options, stock that has not vested, and equity incentive plan awards:
Stock Options/SAR Grants.
There are no arrangements for stock options or stock appreciation rights or similar benefits for directors or executive officers.
Long-Term Incentive Plans.
There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. We do not have any material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers.
Director Compensation.
Currently, no compensation is paid to Directors.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The following table sets forth certain information regarding the beneficial ownership of our common stock as of December 31, 2015, by each person or entity known by us to be the beneficial owner of more than 5% of the outstanding shares of common stock, each of our directors and named executive officer, and all of our directors and executive officer as a group.
______________ * Resigned February 5, 2016
** Figures may vary due to rounding.
Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. In accordance with Securities and Exchange Commission rules, shares of our common stock which may be acquired upon exercise of stock options or warrants which are currently exercisable or which become exercisable within 60 days of the date of the table are deemed beneficially owned by the optionees. Subject to community property laws, where applicable, the persons or entities named in the table above have sole voting and investment power with respect to all shares of our common stock indicated as beneficially owned by them.
Changes in Control.
The following transaction resulted in "changes in control" as that term is defined by the provisions of Item 403(c) of Regulation S-K.
On October 1, 2014, the Company entered into an agreement and issued 300,000 unregistered shares of the Company's common stock to corporation beneficially owned by the Company's CEO, Murray Fleming, to purchase the Glucose HealthÒ Daily Blood Sugar Maintenance product. Additionally, on October 1, 2014, the Company entered into a management consulting agreement and issued 300,000 unregistered shares of the Company's common stock to Murray Fleming. The 300,000 shares issued to Mr. Fleming directly and the 300,000 shares issued to the corporation over which Mr. Fleming exercises voting control of the 300,000 shares, constitute a change of the control of the Company. On October 1, 2014, Mr. Fleming beneficially owned 600,000 shares or 50.1% of the outstanding shares of the Company's common stock.
Item 13.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Related Party Transactions.
On May 13, 2015, a consulting agreement was signed with Mr. William J. Gallagher, a previous CEO of the Company. The Agreement rendered all previous agreements and monies owing pursuant to those agreements null and void and provided for compensation of $750 on a monthly basis at the election of the Company.
On March 18, 2015, an agreement for consulting services was signed with Mr. James Hodge, a previous CEO and CFO of the Company. The agreement provided for compensation of $500 per month. Subsequent to the period ending December 31, 2015, on February 4, 2016, Mr. Hodge resigned as director.
With regard to any future related party transaction, we plan to fully disclose any and all related party transactions, including, but not limited to, the following:
·
disclose such transactions in prospectuses where required;
·
disclose in any and all filings with the Securities and Exchange Commission, where required;
·
obtain disinterested directors consent; and
·
obtain shareholder consent where required.
Director Independence.
Members of our board of directors are not independent as that term is defined by defined in Rule 4200(a) (15) of the Nasdaq Marketplace Rules.
Item 14.
Item 14. Principal Accountant Fees and Services.
Audit Fees.
Fees of $10,900 and $16,480 in the fiscal year ended December 31, 2015 and 2014, respectively, were paid for professional services rendered by the principal accountant for the audit of our annual financial statements and quarterly review of the financial statements included in our Form 10-K.
Audit-Related Fees.
For the fiscal year ended December 31, 2015 and 2014, there were no fees billed for services reasonably related to the performance of the audit or review of the financial statements outside of those fees disclosed above under "Audit Fees."
Tax Fees.
For the fiscal year ended December 31, 2015 and 2014 respectively, our accountants did not render any service for tax compliance, tax advice, and tax planning work.
All Other Fees.
None.
Pre-Approval Policies and Procedures.
Prior to engaging our accountants to perform a particular service, our board of directors obtains an estimate for the service to be performed. The board of directors in accordance with its procedures approved all of the services described above.
PART IV
Item 15.
Item 15. Exhibits, Financial Statement Schedules.
(a) Financial Statements.
Included in Item 7
(b) Exhibits.
____________
** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
April 14, 2016
By:
/s/ Murray Fleming
Murray Fleming
Its:
Chief Executive Officer, Chief Financial Officer
(Principal Executive Officer/Financial Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
April 14, 2016
By:
/s/ Murray Fleming
Murray Fleming
Its:
Chief Executive Officer, Chief Financial Officer
(Principal Executive Officer/Financial Officer)