Todays Alternative Energy Corp - FORM 10-Q

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EX-32.1 - Todays Alternative Energy Corp	v177011_ex32-1.htm
EX-31.2 - Todays Alternative Energy Corp	v177011_ex31-2.htm
EX-31.1 - Todays Alternative Energy Corp	v177011_ex31-1.htm
EX-32.2 - Todays Alternative Energy Corp	v177011_ex32-2.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended January 31, 2010

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________________ to _________________

Commission File No.: 000-33229

BIO SOLUTIONS MANUFACTURING, INC.

(Exact name of registrant as specified in its charter)

Nevada	16-1576984
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

9720 Heatherstone River Court

Townhouse 1

Estero, FL 33928

(Address of principal executive offices)

Issuer’s telephone number: (888) 880-0994

Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filter o		Accelerated filter o

Non-accelerated filter o	(Do not check if a smaller reporting company)	Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. Yes o No x

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Indicate by check mark whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes o No o

APPLICABLE ONLY TO CORPORATE ISSUERS

As of March 12, 2010, 26,682,819 shares of our common stock were issued and outstanding.

Transitional Small Business Disclosure Format: Yes o No x

PART 1:

FINANCIAL INFORMATION

ITEM 1 – FINANCIAL STATEMENTS

Bio Solutions Manufacturing Inc.

Condensed Consolidated Balance Sheets

	January 31,			October 31,
	2010			2009
	(unaudited)
Assets

Current assets:
Cash	$	-		$	3,423
Total current assets		-			3,423

Total assets	$	-		$	3,423

Liabilities and Stockholders' (Deficit)

Current liabilities:
Bank overdraft	$	4,123		$	-
Accounts payable and accrued expenses		1,170,725			1,112,481
Convertible notes payable		1,183,437			1,112,222
Total current liabilities		2,358,285			2,224,703

Stockholders' (deficit):
Preferred stock, $0.00001 par value, 10,000,000 authorized,
10,000 shares of Series A issued and outstanding as of January 31, 2010 and October 31, 2009
and 92,000 shares of Series B issued and outstanding as of January 31, 2010 and October 31, 2009		1			1
Common stock, $0.00001 par value, 1,000,000,000 shares
authorized, 26,617,197 shares issued and outstanding as of
January 31, 2010 and October 31, 2009		266			266
Additional paid-in capital		6,879,020			6,806,420
Accumulated deficit		(9,237,572	)		(9,027,967	)
Total stockholders' (deficit)		(2,358,285	)		(2,221,280	)

Total liabilities and stockholders' (deficit)	$	-		$	3,423

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

F-1

Bio Solutions Manufacturing Inc.

Unaudited Condensed Consolidated Statements of Operations

	Three Months Ended January 31,
	2010			2009

Revenues	$	-		$	-

Cost of goods sold		-			-

Gross profit		-			-

Expenses:
General and administrative expenses		113,914			133,930
Total expenses		113,914			133,930

Net loss from operations before other expenses and
provision for income taxes		(113,914	)		(133,930	)

Other expenses:
Beneficial conversion feature expense		(72,600	)		-
Interest expense		(23,091	)		(15,530	)
		(95,691	)		(15,530	)

Net loss before provision for income taxes		(209,605	)		(149,460	)

Provision for income taxes		-			-
Net loss	$	(209,605	)	$	(149,460	)

Net loss per weighted average share
- basic and diluted	$	(0.01	)	$	(1.65	)
Weighted average number of shares
- basic and diluted		26,617,197			90,454

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

F-2

Bio Solutions Manufacturing Inc.

Unaudited Condensed Consolidated Statements of Cash Flows

	Three Months Ended
	January 31,
	2010			2009

Net cash (used) by operating activities	$	(70,548	)	$	(47,059	)

Net cash (used) by investing activities		-			-

Cash flows from financing activities:
Proceeds from notes payable		72,600			49,000
Payments on notes payable		(5,475	)		(1,518	)
Net cash provided by financing activities		67,125			47,482

Net (decrease) increase in cash		(3,423	)		423
Cash and cash equivalents – beginning		3,423			873
Cash and cash equivalents- ending	$	-		$	1,296

Supplemental disclosures:
Interest paid	$	-		$	-
Income taxes paid	$	-		$	-

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

F-3

BIO SOLUTIONS MANUFACTURING, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended January 31, 2010 and 2009

NOTE 1 - DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited interim financial statements of Bio Solutions Manufacturing, Inc. (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s Annual Report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the consolidated financial statements which would substantially duplicate the disclosure contained in the audited consolidated financial statements for the fiscal year ended October 31, 2009 as reported in the 10-K have been omitted.

The Company has presented this Form 10-Q in condensed manner, hence certain reclassifications have been made to the prior comparable period to conform to this period’s presentation.

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, BSP and BESI. Significant inter-company accounts and transactions have been eliminated.

Nature of Business and History of Company

Bio Solutions Manufacturing, Inc. (the “Company”) is a provider of waste bioremediation services. The Company operates through its wholly-owned subsidiary, and Bio-Extraction Services, Inc. (“BESI”), a development stage company acquired to focus on the production and sale of biodiesel fuel. The Company’s products are not currently being sold. The Company anticipates resuming is sales and marketing activities related to its biological waste remediation products again once it has obtained additional working capital.

Corporate Changes

On October 24, 2008, Company stockholders approved the change of the Company’s domicile from New York to Nevada by means of a merger of Bio Solutions, Manufacturing, Inc, a New York corporation with and into its wholly owned subsidiary Bio Solutions Manufacturing, Inc., a Nevada corporation, which change included, among other things, a change in the Company’s authorized capital, a change in its articles of incorporation, and a change in its bylaws. The reincorporation closed on October 31, 2008.

All current and prior share data has been changed to reflect the 1-for-1,000 reverse stock split effectuated by the Company on November 20, 2008.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. Going concern contemplates the realization of assets and the satisfaction of liabilities in the normal course of business over a reasonable length of time. The Company has incurred losses since inception and has negative cash flows from operations. For the years ended October 31, 2009 and 2008, the Company has incurred net losses of $927,207 and $592,439, respectively, and has a stockholders’ deficit of $2,221,280 as of October 31, 2009. The future of the Company is dependent upon its ability to obtain additional equity or debt financing and upon future successful development and marketing of the Company’s products and services. Management is pursuing various sources of equity and debt financing. Although the Company plans to pursue additional financing, there can be no assurance that the Company will be able to secure such financing or obtain financing on terms beneficial to the Company. Failure to secure such financing may result in the Company’s inability to continue as a going concern and the impairment of the recorded long lived assets.

The Company laid off its employees at its former facility in Mississippi in February 2007 and in connection with a legal settlement effectuated in October 2007, the Company sold certain equipment, furniture, fixtures and inventory located at that facility. The Company anticipates resuming is sales and marketing activities related to its biological waste remediation products again once it has obtained additional working capital. The Company anticipates future losses from operations as a result ongoing overhead expenses incurred while management attempts to resume selling activities.

These financial statements do not include any adjustments relating to the recoverability and classifications of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

F-4

BIO SOLUTIONS MANUFACTURING, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended January 31, 2010 and 2009

NOTE 2 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accrued expenses are comprised of the following as of January 31, 2010 and October 31, 2009:

	January 31, 2010		October 31, 2009
Accounts payable	$	362,063	$	355,350
Salaries		398,735		382,764
Interest		308,605		285,514
Payroll taxes		76,043		73,576
Other		25,279		15,277
Total accrued expenses	$	1,170,725	$	1,112,481

NOTE 3 – NOTES PAYABLE

On November 29, 2006, the Company entered into a loan agreement with certain existing related party lenders and a new lender, pursuant to which the Company borrowed approximately $164,000 and certain outstanding debt obligations were amended and restated. Under the loan agreement, the existing lenders received amended and restated convertible promissory notes in the aggregate principal amounts of $537,955 and $264,625, respectively, and the new lender received a convertible promissory note in the aggregate principal amount of $164,000. Under the loan agreement and the notes, each lender may, in its sole and absolute discretion, make additional loans to the Company, up to an aggregate total of $1,000,000 per lender. Each note was convertible into shares of the Company’s common stock at a conversion rate equal to the lower of (a) $0.05 per share, and (b) seventy percent (70%) of the three day average of the closing bid price of the Company’s common stock immediately prior to conversion, although such conversions could not be less than $0.01 per share, in any circumstances. In May 2008, the conversion price was amended to provide a fixed conversion price of $0.001 per share. In addition, the note holders cannot convert any principal or interest under the notes to the extent that such conversion would require the Company to issue shares of its common stock in excess of its authorized and unissued shares of common stock. The notes were transferred to a single entity.

Expense of $72,600 and $0 was recorded in the three months ended January 31, 2010 and 2009, respectively, that is attributed the beneficial conversion feature with this loan agreement. The notes are secured by a first priority security interest in all of the assets of the Company.

As of January 31, 2010 and October 31, 2009, two note holders held the Company’s notes payable and the aggregate principal outstanding was $1,183,437 and $1,112,222.

NOTE 4 - EQUITY TRANSACTIONS

In connection with the October 31, 2008 closing of the transaction for the change in domicile from New York to Nevada, the articles of incorporation and bylaws of the surviving Nevada corporation are now the articles and bylaws of the Company. The new articles of incorporation have increased the Company’s authorized capitalization to 1,010,000,000 shares of which 1,000,000,000 shares are authorized as common stock, par value $0.00001 per share and 10,000,000 shares of preferred stock, par value $0.00001 per share.

Preferred Stock

As of October 31, 2008, the Company had authorized 10,000,000 shares of preferred stock. The Company’s board of directors is expressly authorized to provide for the issue of all or any of the shares of the preferred stock in one or more series, and to fix the number of shares and to determine or alter for each such series, such voting powers, full or limited, or no voting powers, and such designations, preferences, and relative, participating, optional, or other rights and such qualifications, limitations, or restrictions thereof, as shall be adopted by the board of directors and as may be permitted by law.

F-5

BIO SOLUTIONS MANUFACTURING, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended January 31, 2010 and 2009

NOTE 4 - EQUITY TRANSACTIONS (continued)

On July 25, 2008, the Company created a series of preferred stock of the company known as Series A Preferred Stock, par value $0.001 per share. In connection with the change in domicile, the par value was reduced to $0.00001 per share on October 31, 2008. The Series A preferred stock is not convertible. Holders of the Series A preferred stock do not have any preferential dividend or liquidation rights. The shares of Series A preferred stock are not redeemable. All matters submitted to a vote of the holders of the common stock, including, without limitation, the election of directors, a holder of shares of the Series A preferred stock shall be entitled to the number of votes on such matters equal to the product of (a) the number of shares of the Series A Preferred Stock held by such holder, (b) the number of issued and outstanding shares of our common stock, as of the record date for the vote, or, if no such record date is established, as of the date such vote is taken or any written consent of stockholders is solicited, and (c) 0.0002.

On August 1, 2008, the Company issued 10,000 shares of Series A preferred stock to the Company’s chief financial officer in consideration of accrued and unpaid salary due her. The Company deemed the stated value of the Series A preferred stock to be $1.00 per share.

On April 29, 2009, the Company created a series of preferred stock of the company known as Series B Preferred Stock, par value $0.00001 per share. The Series B Preferred Stock has a stated value of $1.00 per shares and is convertible into shares of common stock at a conversion rate equal to the average of the Per Shares Market Values (as defined) during the 10 trading days immediately prior to conversion. No holder of series B preferred stock may convert more than 1,000 shares of its series B preferred stock in any given month and collectively the holders of series B preferred stock may not convert more than 4,000 shares in any calendar month. In addition, holders of the series B preferred stock may not convert such shares into common stock if as a result of such conversion the holder would hold in excess of 4.99% shares of our issued and outstanding common stock. The series B preferred stock do not contain any voting, liquidation, dividend or preemptive rights.

On April 30, 2009, the Company issued 92,000 shares of Series B preferred stock in accordance with a Settlement Agreement and General Release dated April 30, 2009 in connection with the Becker litigation. For the three months ended January 31, 2010, the Company received notices to convert 3,000 Series B preferred shares into Company common stock (See Note 9 – Subsequent Events).

Common Stock

Effective with the October 31, 2008 change in the Company’s articles of incorporation, the Company has 1,000,000,000 shares of authorized common stock, of which 89,078 were issued and outstanding. Par value was changed to $0.00001 per share from $0.001 per share. The holders of the Company’s common stock are entitled to one vote per share of common stock held.

As of January 31, 2010 and October 31, 2009, 26,617,197 shares of Company common stock were issued and outstanding.

Warrants

Warrants have been issued for equity raises only for the last years. Warrants issued before October 31, 2005 were issued for services and are fully vested. All warrants issued have expired in the fiscal year ended October 31, 2009.

Stock incentive plans

On April 19, 2002, the Company adopted the Bio Solutions Manufacturing Inc. (formerly Single Source Financial Services Corporation) 2002 Omnibus Securities Plan (the “2002 Plan”). Under the plan, the Company may grant options or issue stock to selected employees, directors, and consultants for up to 30,000 shares. The exercise price of each option is at the discretion of the Board of Directors but can not be less than 85% of the fair market value of a share at the date of grant (100% of fair market value for 10% stockholders). The vesting period of each option granted is also at the discretion of the Board of Directors, but each option granted shall vest at a rate of no less than 20% per year from date of grant.

In August 2005, the number of shares under the 2002 Plan was increased by 3,000,000 and 400 shares were issued under the 2002 Plan. In January 2006, the 3,000,000 increase was reaffirmed and ratified by the Board of Directors when technical deficiencies in the registration statement registering the shares of stock issuable under the 2002 Plan were corrected. As of January 31, 2010, the total authorization is 3,030,000 shares, 2,540 shares have been issued under the 2002 Plan and no options have been granted.

On October 27, 2006, the Company adopted its 2006 Stock Incentive Plan (the “2006 Plan”). The Company is permitted to issue up to 6,000,000 shares of common stock under the Plan in the form of stock options, restricted stock awards, and stock awards to employees, non-employee directors, and outside consultants. As of January 31, 2010, 6,000 shares have been issued under the 2006 Plan and no options have been granted.

F-6

BIO SOLUTIONS MANUFACTURING, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended January 31, 2010 and 2009

NOTE 4 - EQUITY TRANSACTIONS (continued)

On October 15, 2007, the Company adopted its 2007 Stock Incentive Plan (the “2007 Plan”). The Company is permitted to issue up to 10,000,000 shares of common stock under the Plan in the form of stock options, restricted stock awards, and stock awards to employees, non-employee directors, and outside consultants. As of January 31, 2010, 9,960 shares have been issued under the 2007 Plan and no options have been granted.

On April 22, 2008, the Company adopted its 2008 Stock Incentive Plan (the “2008 Plan”). The Company is permitted to issue up to 16,000,000 shares of common stock under the 2008 Plan in the form of stock options, restricted stock awards, and stock awards to employees, non-employee directors, and outside consultants. As of January 31, 2010, 2,740 shares have been issued under the 2008 Plan.

On April 22, 2008, the Company adopted its 2008 California Stock Incentive Plan (the “California Plan”). The Company is permitted to issue up to 16,000,000 shares of common stock under the California Plan in the form of stock options, restricted stock awards, and stock awards to employees, non-employee directors, and outside consultants. As of January 31, 2010, 144,535 shares have been issued under the California Plan and no options have been granted.

In December 2006, options to purchase an aggregate of 4,000 shares of common stock at an exercise price of $300 per share were issued to consultants. The options vested based on the number of gallons of bio-diesel alternative fuel that is converted by the Company’s bio-converter from sites introduced directly or indirectly by the consultant. As the vesting of these options did not occur during the terms of the options, the Company did not value such options, which are expired as of January 31, 2010. A summary of the non-plan option activity of for the three months ended January 31, 2010 is as follows:

	Stock Options					Weighted Average Exercise Price
	Outstanding			Exercisable		Outstanding			Exercisable
Balance - October 31, 2009		4,000			-	$	300			-
Granted Fiscal Year 2010		-			-		-			-
Exercised Fiscal Year 2010		-			-		-			-
Expired Fiscal Year 2010		(4,000	)		-		(300	)		-
Balance – January 31, 2010		-			-	$	-		$	-

NOTE 5 - INCOME TAXES

Due to net operating losses and the uncertainty of realization, no tax benefit has been recognized for operating losses. The Company’s ability to utilize its net operating loss carry forwards is uncertain and thus a valuation reserve has been provided against the Company’s net deferred tax assets. The Company has not filed their federal or state income tax returns for several years.

At January 31, 2010, the Company has unused net operating losses of approximately $5,000,000 (which will begin expiring in 2019 through 2029) that may be applied, against future taxable income.

Due to the changes in ownership over the years for the various acquisitions, debt conversions and equity financings, the Company may have triggered a Section 382 limitation on the utilization of such net operating loss carryforwards. The Company has not performed such an evaluation to determine whether the net operating loss carryforwards have been limited.

NOTE 6 - RELATED PARTY TRANSACTIONS

During 2009, there were 1,100 shares of common stock issued, respectively, to related parties, management and employees of the Company for services rendered. The expense for such shares issued was recorded using the then fair market value of the shares issued.

During 2008, the Company issued 10,000 shares of Series A preferred stock to its chief financial officer in satisfaction of $10,000 in salary owed.

F-7

BIO SOLUTIONS MANUFACTURING, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended January 31, 2010 and 2009

NOTE 7 - COMMITMENTS AND CONTINGENCIES

Payroll Taxes

At January 31, 2010 and October 31, 2009, the Company is delinquent with remitting payroll taxes of approximately $76,043 and $73,576, respectively, including estimated penalties and interest. The Company has recorded the delinquent payroll taxes, which are included in accrued expenses on the balance sheet. Although the Company has not entered into any formal repayment agreements with the respective tax authorities, management plans to make payment as funds become available. Penalties and interest amounts are subject to increase based on a number of factors that can cause the estimated liability to increase further.

Employment agreements

The Company has employment agreements with the Company’s President and Chief Financial Officer. Each agreement is for an initial term of three years and provides for annual base salary during the term of the agreement of $75,000 and $54,000, respectively, provided, however, that base salary shall be increased to $150,000 and $100,000 per annum, respectively, upon closing of a private placement of the Company’s debt or equity securities resulting in gross proceeds of at least $4 million. Each officer will receive performance based bonuses upon attainment of certain gross revenue targets specified in each employment agreement. Each officer will also receive stock grants of 200, 250, 300, and 350 shares of the Company’s common stock in each of fiscal 2007, 2008, 2009 and 2010. The Company has agreed to grant each officer options to purchase 4,000 shares of our common stock with exercise prices ranging from $170 to $2,000, which options would vest upon the attainment of certain gross revenue targets, as more specifically set forth in the employment agreements. The granting of the options is subject to the Company’s adoption of a stock option plan for such purpose. In fiscal 2007, both officers were awarded a one-time bonus of $75,000 and $54,000, respectively, which bonuses are currently accrued but have not been paid.

Each employment agreement also contains the following material provisions: (i) reimbursement for all reasonable travel and other out-of-pocket expenses incurred in connection with employment; (ii) three (3) weeks paid vacation leave; (iii) medical, dental and life insurance benefits; (iv) a severance payment of twelve (12) month’s salary at the then-applicable base salary rate in the event that the Company terminates the officer’s employment without cause or if the officer’s employment is terminated due to death or disability; and (v) 24 month non-compete/non solicitation terms.

Legal matters

On November 27, 2007, Martin Becker (“Becker”) commenced an action against the Company in the Superior Court of California, County of Los Angeles, for breach of contract, common counts, and indemnity, seeking approximately $92,000 in damages, as well as interest, fees, and costs. The complaint alleges that the Company breached a certain Reorganization and Stock Purchase Agreement dated on or about February 1, 2004 by failing to indemnify Becker as required under said agreement. Pursuant to a Settlement Agreement and General Release dated April 30, 2009, the Company issued 92,000 shares of Series B preferred stock having a stated value of $1.00 and a market based conversion price and the Company received a general release of all claims asserted by the parties in the Becker litigation. During the three months ended January 31, 2010, the Series B preferred stock holder submitted requests to convert 3,000 shares of Series B preferred stock into common stock, which the Company issued on March 11, 2010. The Series B holder and the Company are discussing the issuance of approximately 12,500 additional shares of Company common stock as consideration for the delay in issuance.

NOTE 8 – FAIR VALUE MEASUREMENTS

Fair Value Measurements under GAAP clarifies the principle that fair value should be based on the assumptions market participants would use when pricing an asset or liability and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. Under the standard, fair value measurements are separately disclosed by level within the fair value hierarchy. It only applies to accounting pronouncements that already require or permit fair value measures, except for standards that relate to share-based payments.

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.

F-8

BIO SOLUTIONS MANUFACTURING, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended January 31, 2010 and 2009

NOTE 8 – FAIR VALUE MEASUREMENTS (continued)

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed and is determined based on the lowest level input that is significant to the fair value measurement.

The carrying value of the Company’s cash and cash equivalents, accounts receivable, prepayments, accounts payable, short-term borrowings (including convertible notes payable), and other current assets and liabilities approximate fair value because of their short-term maturity. All other significant financial assets, financial liabilities and equity instruments of the Company are either recognized or disclosed in the consolidated financial statements together with other information relevant for making a reasonable assessment of future cash flows, interest rate risk and credit risk. Where practicable the fair values of financial assets and financial liabilities have been determined and disclosed; otherwise only available information pertinent to fair value has been disclosed.

The following table sets forth the Company’s short investments as of January 31, 2010, which are measured at fair value on a recurring basis by level within the fair value hierarchy. The table is classified based on the lowest level of input that is significant to the fair value measurement:

At January 31, 2010, the carrying amounts of the notes payable approximate fair value because all of the notes have been classified to current maturity.

	Quoted Prices in Active Markets for Identical Instruments Level 1		Significant Other Observable Inputs Level 2		Significant Unobservable Inputs Level 3			Assets at Fair Value

Liabilities:
Convertible notes payable	$	-	$	-	$	(1,183,437	)	$	(1,183,437	)

NOTE 9 – SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the date of this filing (March 12, 2010).

On March 11, 2010, the Company issued 65,622 shares of Company common stock in satisfaction of notices to convert 5,000 shares of Series B preferred stock, which includes notices to convert 3,000 Series B preferred shares during the three months ended January 31, 2010.

Since January 31, 2010, the Company has borrowed an additional $41,300 from a note holder and has repaid $7 to a note holder.

F-9

ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion and analysis should be read in conjunction with our audited consolidated financial statements and related notes included in this report. This report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The statements contained in this report that are not historic in nature, particularly those that utilize terminology such as “may,” “will,” “should,” “expects,” “anticipates,” “estimates,” “believes,” or “plans” or comparable terminology are forward-looking statements based on current expectations and assumptions.

Various risks and uncertainties could cause actual results to differ materially from those expressed in forward-looking statements. Factors that could cause actual results to differ from expectations include, but are not limited to, those set forth under the section “Risk Factors” set forth in this report.

The forward-looking events discussed in this annual report, the documents to which we refer you and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. For these statements, we claim the protection of the “bespeaks caution” doctrine. All forward-looking statements in this document are based on information currently available to us as of the date of this report, and we assume no obligation to update any forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements.

General

We are a provider of biodiesel fuel and waste bioremediation services. We have historically focused on waste bioremediation solutions to municipal collection systems and food service facilities through a distributor with a network of franchisees, (the “Cleaning Division”). With our June 2006 acquisition of Bio Extraction Services, Inc. (“BESI”) and its patent pending technology, we plan to focus on the production and sale of biodiesel fuel (the “Biodiesel Division”).

Our business consists of a Biodiesel Division, through which we intend to produce, develop, and sell biodiesel fuel. In the second quarter of our 2007 fiscal year, we ceased production of biological waste remediation products until further notice and in the fourth quarter of our 2007 fiscal year, we terminated our selling arrangement with BSFC. We plan to resume production of remediation products in the future.

Critical Accounting Policies

Our discussion and analysis of our financial conditions and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of financial statements requires managers to make estimates and disclosures on the date of the financial statements. On an on-going basis, we evaluate our estimates, including, but not limited to, those related to revenue recognition. We use authoritative pronouncements, historical experience, and other assumptions as the basis for making judgments. Actual results could differ from those estimates. We believe the following critical accounting policies affect our more significant judgments and estimates in the preparation of our consolidated financial statements.

Going Concern

The financial statements contained in this report have been prepared assuming that we will continue as a going concern. Going concern contemplates the realization of assets and the satisfaction of liabilities in the normal course of business over a reasonable length of time. We have incurred losses since inception and have negative cash flows from operations. For the years ended October 31, 2009 and 2008, we incurred net losses of $927,207 and $592,439, and we have a stockholders’ deficit of $2,221,280 as of October 31, 2009. Our future is dependent upon our ability to obtain additional equity or debt financing and upon future successful development and marketing of our products and services. Management is pursuing various sources of equity and debt financing. Although we plan to pursue additional financing, there can be no assurance that we will be able to secure such financing or obtain financing on terms beneficial to us. Failure to secure such financing may result in our inability to continue as a going concern and the impairment of the recorded long lived assets.

We have laid off our employees at our former facility in Mississippi in February 2007 and, in connection with a legal settlement effectuated in October 2007, we sold certain equipment, furniture, fixtures an inventory located at that facility. We anticipate resuming our sales and marketing activities related to our biological waste remediation products again, once we have obtained additional working capital. We anticipate future losses from operations as a result ongoing overhead expenses incurred while management attempts to resume selling activities.

The financial statements contained in this report do not include any adjustments relating to the recoverability and classifications of recorded assets, or the amounts and classification of liabilities that might be necessary in the event we cannot continue in existence.

Revenue Recognition

Sales are recorded at the time title passes to the customer, which, based on shipping terms, generally occurs when the product is shipped to the customer. Based on prior experience, we reasonably estimate our sales returns and warranty reserves and are recorded when such reserve estimates are required. Due to lack of sales, there currently are no such reserves recorded for sales returns or warranty reserves. Sales are presented net of discounts and allowances.

Results of Continuing Operations

Basis of Presentation

The results of operations set forth below for the three months ended January 31, 2010 and 2009 are those of the continuing operations of Bio Solutions Manufacturing, which includes BESI on a consolidated basis

The following table sets forth, for the periods indicated, certain selected financial data from continuing operations:

	Three Months Ended
	January 31,
	2010			2009
Net sales	$	-		$	-
Cost of sales		-			-

Gross income		-			-

Selling, general and administrative		113,914			133,930

Operating (loss)	$	(113,914	)	$	(133,930	)

Comparison of the Three Months Ended January 31, 2010 and 2009

Net sales. Net sales for operations were $0, for the three months ended January 31, 2010 and $0 for the three months ended January 31, 2009. The difference of $0 or 0% was due to there having been no sales in either three-month period.

Cost of Sales. Cost of sales for continued operations were $0, for the three months ended January 31, 2010 and $0 for the three months ended January 31, 2009. The difference of $0 or 0% was due to there having been no sales in either three-month period.

Selling, general, and administrative. Selling, general, and administrative expenses were $113,914 for the three months ended January 31, 2010 and $133,930 for the three months ended January 31, 2009. The difference of $20,016 or 15% was primarily due to cost eliminations.

Operating loss. Operating losses incurred were $113,914, for the three months ended January 31, 2010 and $133,930 for the three months ended January 31, 2009. The difference of $20,016 or 15% was primarily due to cost eliminations.

Loss from Beneficial Conversion Feature. Loss from beneficial conversion features were $72,600, for the three months ended January 31, 2010 and $0 for the three months ended January 31, 2009. The difference of $72,600 was due to $72,600 in new borrowings under terms containing a beneficial conversion feature.

Interest expense. Interest expense were $23,091, for the three months ended January 31, 2010 and $15,530 for the three months ended January 31, 2009. The difference of $7,561 or 49% was primarily due to our having a greater amount of outstanding borrowings during the current three-month period.

Liquidity and Capital Resources

We have financed our operations, acquisitions, debt service, and capital requirements through cash flows generated from operations, debt financing, capital leases, and issuance of equity securities. Our working capital deficit at January 31, 2010 was $2,358,285, at October 31, 2009 was $2,221,280. We had cash of $0 at January 31, 2010, and $3,423 as of October 31, 2009.

We used $70,548 of net cash from operating activities for the three months ended January 31, 2010, compared to using $47,059 in the three months ended January 31, 2009.

Net cash flows used in investing activities was $0 for the three months ended January 31, 2010 and $0 for the three months ended January 31, 2009.

Net cash flows provided by financing activities were $67,125 for the three months ended January 31, 2010, compared to net cash provided by financing activities of $47,482 in the year three months ended January 31, 2009. The net cash provided by financing activities is from the proceeds from our lines of credit and notes payable, which are net of repayments.

Loan Agreement

Since 2003, we have borrowed money from a group of third-party lenders in order to fund our operations. As of October 31, 2007, the outstanding principal balance on these loans was approximately $800,000. On November 29, 2006, we entered into a loan agreement with certain these lenders and a new lender, pursuant to which we borrowed approximately $164,000 of new funds, and pursuant to which the outstanding debt obligations were amended and restated. Under the loan agreement, the existing lenders received amended and restated convertible promissory notes in the aggregate principal amounts of $537,955 and $264,625, respectively, and the new lender received a convertible promissory note in the aggregate principal amount of $164,000. Under the loan agreement and the notes, each lender may, in its sole and absolute discretion, make additional loans to us, up to an aggregate total of $1,000,000 per lender. Each note bears interest at the rate of eight percent (8%) per annum and is payable on demand. Each note was also convertible into shares of our common stock at a conversion rate equal to the lower of (a) $0.05 per share, and (b) seventy percent (70%) of the three day average of the closing bid price of our common stock immediately prior to conversion; provided, however, that the conversion price could not be less that $0. 01 per share under any circumstances. In May 2008, the conversion price was amended to provide for a fixed conversion price of $0.001 per share. In addition, the note holders cannot convert any principal or interest under the notes to the extent that such conversion would require us to issue shares of our common stock in excess of our authorized and unissued shares of common stock. The notes are secured by a first priority security interest in all of our assets. By their terms, the holder of the notes may not convert the notes to the extent such conversion would cause the holder, together with its affiliates, to have acquired a number of shares of common stock that would exceed 4.99% of our then outstanding common stock.

Capital Requirements

The report of our independent accountants for the fiscal year ended October 31, 2009 states that we have incurred operating losses since inception and requires additional capital to continue operations, and that these conditions raise substantial doubt about our ability to continue as a going concern.

As of January 31, 2010, we had a working capital deficit of $2,358,285. Currently, we do not generate any revenues. In the Biodiesel Division, we need to construct or lease biodiesel plants and we will not generate any revenues in this division until we have established plants which are operational. The expected cost to build each biodiesel plant is $2.5 million and we do not have the capital to build such plants. In addition, we closed the manufacturing facility for our Cleaning Division products in the second fiscal quarter of 2007 and also ceased marketing and selling such products at that time. We need capital to open a new facility for the manufacture and subsequent sale of cleaning products. If we cannot raise additional debt and/or equity capital, we will be unable to generate any revenues.

We believe that, as of the date of this report, our existing working capital and cash flows generated from operations will be insufficient to fund our plan of operations over the next 12 months, and accordingly, we will need to obtain additional financing.

As set forth above, we have entered into a loan agreement with various third party lenders, under which these lenders, in their sole and absolute discretion, can lend to us up to $2,000,000. However, such loans are completely discretionary with the lenders, and as of the date hereof, we have received no commitment from these lenders to advance us additional funds.

In the event that our lenders do not advance us additional funds under the loan agreement, we would need to seek additional debt or equity financing, in the form of a private placement or a public offering, a strategic alliance, or a joint venture. Such additional financing, alliances, or joint venture opportunities might not be available to us, when and if needed, on acceptable terms or at all. If we are unable to obtain additional financing in sufficient amounts or on acceptable terms under such circumstances, our operating results and prospects could be adversely affected. In addition, any debt financings or significant capital expenditures require the written consent of our existing lenders.

We intend to retain any future earnings to retire debt, finance the expansion of our business and any necessary capital expenditures, and for general corporate purposes. The loan agreement with our lenders contains restrictions as to the payment of dividends.

Off-Balance Sheet Arrangements

None.

ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide the information required by this item.

ITEM 4T – CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e)) under the Exchange Act) that is designed to ensure that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time specified in the Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer's management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Pursuant to Rule 13a-15(b) under the Exchange Act, the Company's management, consisting of David Bennett, the Company’s Chief Executive Officer and President (“CEO”) and Pat Spreitzer, the Company’s Chief Financial Officer, Secretary and Treasurer (“CFO”), carried out an evaluation of the effectiveness of the Company's disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the three months ended January 31, 2010. Based upon that evaluation, the Company's CEO and CFO concluded that the Company's disclosure controls and procedures are not effective to ensure that information requiring disclosure by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

CHANGES IN INTERNAL CONTROLS

Our management, consisting of our CEO and CFO, performed an evaluation to determine whether any change in our internal controls over financial reporting occurred during the three month period ended January 31, 2010. Based on that evaluation, our CEO and CFO concluded that no change occurred in the Company's internal controls over financial reporting during the three months ended January 31, 2010, that has materially affected, or is reasonably likely to materially affect, the Company's internal controls over financial reporting.

PART II: OTHER INFORMATION

ITEM 1 – LEGAL PROCEEDINGS

Bio Solutions Manufacturing, Inc. v. Michael Motola, Andy Vasara, Steva De Vasara and Metropolitan Life Insurance Company. On November 3, 2009, the Company commenced an action against the defendants in the United States District Court of the Central District of California, Southern Division alleging certain causes of action, including fraud, securities fraud, and negligent misrepresentation. On December 9, 2009 and December 23, 2009, Metropolitan Life Insurance and Andy and Steva De Vasara, respectively, filed motions to dismiss which are currently pending.

Becker Litigation. On November 27, 2007, Martin Becker (“Becker”) commenced an action against the Company in the Superior Court of California, County of Los Angeles, for breach of contract, common counts, and indemnity, seeking approximately $92,000 in damages, as well as interest, fees, and costs. The complaint alleges that the Company breached a certain Reorganization and Stock Purchase Agreement dated on or about February 1, 2004 by failing to indemnify Becker as required under said agreement. Pursuant to a Settlement Agreement and General Release dated April 30, 2009, the Company issued 92,000 shares of Series B preferred stock having a stated value of $1.00 and a market based conversion price and the Company received a general release of all claims asserted by the parties in the Becker litigation. Since October 31, 2009, the Series B preferred stock holder submitted requests to convert 5,000 shares of Series B preferred stock into 65,622 shares common stock, which the Company issued on March 11, 2010.

ITEM 1A – RISK FACTORS

As a “small reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this item.

ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3 – DEFAULT UPON SENIOR SECURITIES

None.

ITEM 4 – RESERVED

ITEM 5 – OTHER INFORMATION

None.

ITEM 6 - EXHIBITS

a. (a)

The following exhibits are filed with this report.

31.1

Certification by Chief Executive Officer pursuant to Sarbanes Oxley Section 302.

31.2

Certification by Chief Financial Officer pursuant to Sarbanes Oxley Section 302.

32.1

Certification by Chief Executive Officer pursuant to 18 U.S. C. Section 1350.

32.2

Certification by Chief Financial Officer pursuant to 18 U.S. C. Section 1350.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated:	March 12, 2010	/s/ David S. Bennett
		By: David S. Bennett
		Its: Chief Executive Officer, President and Director (Principal Executive Officer)

Dated:	March 12, 2010	/s/ Patricia M. Spreitzer
		By: Patricia M. Spreitzer
		Its: Chief Financial Officer, Secretary, Treasurer and Director (Principal Financial and Accounting Officer)

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