10-Q 1 purio-10q.htm FORM 10-Q purio-10q.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2010

or

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 number: 000-53716

PURIO INC.
(Exact name of registrant as specified in its charter)

Nevada
  
98-05255034
(State or other jurisdiction of incorporation or organization)
  
(I.R.S. Employer Identification No.)

1048 – 1685 H Street
Blaine, Washington 98230
(Address of principal executive offices)

888.590.1156
(Registrant’s telephone number, including area code)

__________________________________________________
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 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.  Yesþ   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).  Yesþ   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 filer o   Accelerated filer o   Non-accelerated filer o   Smaller reporting company þ

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

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

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes o   No o

APPLICABLE ONLY TO CORPORATE ISSUERS

As of May 14, 2010 the registrant’s outstanding common stock consisted of 55,234,063 shares.
 
 
 
 
 
Table of Contents

 
1
 
 


The unaudited interim financial statements of Purio Inc. (“we”, “our”, “us”, the “Company”) follow. All currency references in this report are to U.S. dollars unless otherwise noted.
 
Purio Inc.
(A Development Stage Company)
March 31, 2010
 
Consolidated Balance Sheet
F-1
Consolidated Statements of Operations
F-2
Consolidated Statements of Cash Flows
F-3
Consolidated Statement of Stockholders’ Equity
F-4
Notes to the Consolidated Financial Statements
F-5
 
 
2
 
 
PURIO, INC.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEET
 
   
March 31,
    
December 31,
  
   
2010
    
2009
  
   
(Unaudited)
        
ASSETS
            
Current Assets
            
Cash and Cash Equivalents
   $ 208     $ 279  
Prepaid Expenses
     -       9,836  
Inventory
     9,836       10,115  
Total Current Assets
     10,044       58,503  
Property and Equipment
                
Fixed Assets, Net of Accumulated Depreciation
     38,960       41,045  
Other Assets
                
Patents
     121,610       121,610  
                 
TOTAL ASSETS
   $ 170,614     $ 172,770  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
                
Current Liabilities
                
Accounts Payable
     292       292  
Notes Payable
     28,000       28,000  
Subscriptions Received
     308,449       291,291  
Stockholders’ Loans
     74,459       91,714  
Total Current Liabilities
     411,200       411,297  
                 
Stockholders' Equity (Deficit)
                
Common Stock, no par value; stated value $0.001, authorized
                
375,000,000 shares, issued and outstanding
                
55,234,063 as at March 31, 2010,
                
55,234,063 as at December 31, 2009
     55,234       55,234  
Additional Paid-In Capital
     948,974       948,974  
Accumulated Other Comprehensive Income
     30,166       30,166  
Accumulated Deficit During the Development Stage
     (1,274,960 )     (1,272,901 )
                 
TOTAL SHAREHOLDERS' EQUITY (DEFICIT)
     (240,586 )     (238,527 )
                 
TOTAL LIABILITIES AND STOCKOLDERS' EQUITY
   $ 170,614     $ 172,770  
 
 
F-1
 
 
PURIO  INC.
(A Development Stage Company)
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
 
               
For the Period
  
               
of Inception
  
               
from Nov. 16,
  
   
For the three months ended
    
1999, through
  
   
March 31
    
March 31,
  
   
2010
    
2009
    
2010
  
Revenue
                  
Sales
   $ -     $ -     $ 5,113  
Selling Expenses
                        
Marketing
     -       -       40,345  
General and Administrative Expenses:
                        
Professional fees
     -       6,176       411,010  
Exploration costs and expenses
     -       -       22,219  
Occupancy costs
     -       8,518       44,839  
Consulting
     -       -       430,698  
Depreciation
     1,988       2,060       42,630  
Impairment of mineral rights
     -       -       3,600  
Stock transfer fees
     -       -       11,018  
Administration
     -       -       53,564  
Other general and administrative expenses
     71       11,343       220,090  
Total General and Administrative  Expenses
     2,059       28,097       1,239,668  
                         
Net Operating Loss
     (2,059 )     (28,097 )     (1,274,900 )
Other Income (Expense)
     -       252       (60 )
                         
 Net Loss
     (2,059 )     (27,845 )     (1,274,960 )
                         
Currency Translation Adjustment
     -       2,979       30,246  
                         
Comprehensive Loss
   $ (2,059 )   $ (24,866 )   $ (1,244,714 )
                         
 Loss Per Common Share, basic and diluted
   $ (0.000 )   $ (0.000 )        
                         
Weighted Average Shares Outstanding,
                        
Basic and Diluted:
     55,234,063       55,234,063          
 
 
F-2
 
 
PURIO INC.
(A Development Stage Company)
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
 
               
For the Period
  
               
of Inception
  
               
Nov. 16,
  
   
For the three months ended
    
1999, through
  
   
March 31,
    
March 31,
  
   
2010
    
2009
    
2010
  
 Cash flows from operating activities:
                  
 Net operating income (loss)
   $ (2,059 )   $ (28,097 )   $ (1,272,900 )
 Adjustments to reconcile net loss to
                        
 net cash used by operating activities:
                        
 Non-cash depreciation
     1,988       2,060       40,570  
 Subscriptions received
     17,158       3,500       308,449  
 Non-cash common stock for services
                     373,979  
 Consolidation of subsidiary paid-in capital
                     (28,994 )
 Change in operating assets and liabilities:
                        
 Accounts payable
             (312 )     292  
 Inventory
             (2,087 )     (9,836 )
 Net cash provided by (used in) operating  activities
     17,087       (24,936 )     (588,440 )
                         
 Cash flows from investing activities:
                        
 Acquisition of patents
                     (121,610 )
 Disposal (acquisition) of equipment
     97               (63,808 )
 Acquisition of water vessels
                     (15,722 )
 Net cash provided by (used in) investing activities
     97       -       (201,140 )
                         
 Cash flows from financing activities:
                        
 Common stock issued for cash
                     564,768  
 Proceeds (repayment) of stockholders’ loans
     (17,255 )             74,459  
 Proceeds (repayment) of note payable
                     28,000  
 Other contributed capital
                     92,395  
 Net cash provided by (used in) financing activities
     (17,255 )     -       759,622  
                         
 Effect of exchange rates on cash
             3,231       30,166  
                         
 Net increase (decrease) in cash
     (71 )     (21,705 )     208  
 Cash, beginning of the period
     279       36,409       -  
                         
 Cash, end of the period
   $ 208     $ 14,704     $ 208  
                         
                         
 Supplemental cash flow disclosure:
                        
 Interest paid
   $ -     $ -     $ 2,471  
 Taxes paid
   $ -     $ -     $ -  
 
 
F-3
 
 
PURIO, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
For the Period from November 16, 1999 (Inception) to March 31, 2010
 
                     
Accumulated
    
Accumulated
        
                     
Other
    
Deficit
    
Total
  
   
Common Stock
    
Additional
    
Comprehen-
    
during the
    
Shareholders'
  
   
Number of
          
Paid-In
    
sive
    
Development
    
Equity
  
   
Shares
    
Capital
    
Capital
    
Income
    
Stage
    
(Deficit)
  
Inception, November 16, 1999
     -     $ -     $ -           $ -     $ -  
Subscriptions received during period
             20,379                             20,379  
Balances, December 31, 1999
     -       20,379                     -       20,379  
                                               
Cash contributed from Global Tech
                     232                     232  
Subscriptions received during year
             115,116                             115,116  
Net loss for year ended Dec. 31, 2000
                                   (2,672 )     (2,672 )
Balances, December 31, 2000
     -     $ 135,495     $ 232           $ (2,672 )   $ 133,055  
                                               
Subscriptions received during year
             1,888                             1,888  
Net loss for year ended Dec. 31, 2001
                                   (5,126 )     (5,126 )
Balances, December 31, 2001
     -     $ 137,383     $ 232           $ (7,798 )   $ 129,817  
                                               
Subscriptions received during year
             7,630                             7,630  
Net loss for year ended Dec. 31, 2002
                                   (11,544 )     (11,544 )
Balances, December 31, 2002
     -     $ 145,013     $ 232           $ (19,342 )   $ 125,903  
                                               
Subscriptions received during year
             1,428                             1,428  
Net loss for year ended Dec. 31, 2003
                                   (6,149 )     (6,149 )
Balances, December 31, 2003
     -     $ 146,441     $ 232           $ (25,491 )   $ 121,182  
                                               
Subscriptions received during year
             1,613                             1,613  
Net loss for year ended Dec. 31, 2004
                                   (8,461 )     (8,461 )
Balances, December 31, 2004
     -     $ 148,054     $ 232           $ (33,952 )   $ 114,334  
                                               
Net loss for year ended Dec. 31, 2005
                                   (4,395 )     (4,395 )
Balances, December 31, 2005
     -     $ 148,054     $ 232           $ (38,347 )   $ 109,939  
                                               
Net loss for year ended Dec. 31, 2006
                                   (4,330 )     (4,330 )
Balances, December 31, 2006
     -     $ 148,054     $ 232           $ (42,677 )   $ 105,609  
                                               
Capital revalued Sep. 28, 2007
             (148,054 )                           (148,054 )
Balances September 28, 2007
                                              
    before stock issue
     -     $ -     $ 232           $ (42,677 )   $ (42,445 )
                                               
Balances September 28, 2007
                                              
    before stock issue
     -     $ -     $ 232           $ (42,677 )   $ (42,445 )
Common stock issued for cash @
                                              
   $0.0026 per share Sep. 28, 2007
     10,808,694       10,809       17,569                     28,378  
Common stock issued for cash @
                                              
   $0.036 per share Sep. 28, 2007
     9,017,010       9,017       313,268                     322,285  
Common stock issued for cash @
                                              
   $0.25 per share Sep. 28, 2007
     776,600       776       193,329                     194,105  
Common stock issued for cash @
                                              
   $0.50 per share Sep. 28, 2007
     40,000       40       19,960                     20,000  
Common stock isued for services @
                                              
  $0.0545 per share Sep. 28, 2007
     6,857,696       6,858       366,886                     373,744  
Net loss for year ended Dec. 31, 2007
                                   (626,948 )     (626,948 )
                                               
Balances, December 31, 2007
     27,500,000     $ 27,500     $ 911,244           $ (669,625 )   $ 269,119  
Merger: Purio Environmental
                                              
Water Source, Inc. (PEWS) and
                                              
Purio, Inc. February 13, 2008:
                                              
   Consolidate Purio Inc.
                     78,849       4,984       (93,809 )     (9,976 )
   Merger adjustments
                     (28,994 )                     (28,994 )
   Retire PEWS stock
     (27,500,000 )     (27,500 )     27,500                          
   Issue Purio Stock
     27,500,000       27,500       (27,500 )                        
   Issue Purio Stock
     27,737,603       27,734       (27,734 )                        
Net loss for year ended Dec. 31, 2008
                             22,422       (354,876 )     (332,454 )
                                                 
Balances, December 31, 2008
     55,237,603     $ 55,234     $ 933,365     $ 27,406     $ (1,118,310 )   $ (102,305 )
Other contributed capital
                     15,609                       15,609  
Net loss for year ended Dec. 31, 2009
                             2,760       (154,591 )     (151,831 )
                                                 
Balances, September 30, 2009
     55,237,603     $ 55,234     $ 948,974     $ 30,166     $ (1,272,901 )   $ (238,527 )
Net loss for 3 months ended Mar. 31, 2010
                                     (2,059 )     (2,059 )
                                                 
Balances, March 31, 2010
     55,237,603     $ 55,234     $ 948,974     $ 30,166     $ (1,274,960 )   $ (240,586 )
 
 
F-4
 
 
PURIO INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2010
(Expressed in US Dollars)
(Unaudited)

NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION

The unaudited interim financial statements as of and for the three months ended March 31, 2010 reflect all adjustments which, in the opinion of management, are necessary to fairly state the Company’s financial position and the results of its operations for the periods presented in accordance with the accounting principles generally accepted in the United States of America.  All adjustments are of a normal recurring nature.

These unaudited interim financial statements should be read in conjunction with the Company’s financial statements and notes thereto included in the Company’s fiscal year end December 31, 2009 report.  The Company assumes that the users of the interim financial information herein have read, or have access to, the audited financial statements for the preceding period, and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context.  The results of operations for the three months ended March 31, 2010 are not necessarily indicative of results for the entire year ending December 31, 2010.

(A)  Organization

Purio Inc. (f/k/a AOM Minerals Ltd.) (a development stage company) (the “Company”) was incorporated under the laws of the State of Nevada on June 3, 2005.  The Company initially was an exploration stage company with an objective of acquiring, exploring and if warranted and feasible, developing natural resource properties.  Activities during this stage included developing the business plan and raising capital.

Effective December 5, 2007, the Company changed its name to “Purio Inc.” and entered into a share exchange agreement with Purio Environmental Water Source, Inc. (“PEWS”), a private Nevada corporation, and the shareholders of PEWS.  Pursuant to the share exchange agreement, the Company issued 27,734,603 shares of its common stock in return for all outstanding shares of PEWS.  By this means, PEWS became a 100% owned subsidiary of the Company.

PEWS was incorporated under the laws of the State of Nevada and its principal offices are located at 1048 1685 H Street, Blaine, Washington, USA.  PEWS owns proprietary water clarification technology suitable to a broad number of applications including the clarification of surface water, industrial process water and sewage.  The Company is marketing this technology initially for industrial and commercial applications to reclaim water and reduce the need for fresh water in such applications.

The consolidated financial statements have been prepared in accordance with the accounting principles generally accepted in the United States of America and include the following significant accounting policies:

(B)  Principles of Consolidaton

The consolidated financial statements include the accounts of the Company and PEWS, the Company’s wholly owned subsidiary.  Significant inter-company transactions have been eliminated.

(C)  Use of Estimates

In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates.
 
 
F-5
 

(D)  Cash and Cash Equivalents

For purposes of the cash flow statements, the Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents.

(E)  Long-Lived Assets

The Company accounts for long-lived assets under the Statement of Financial Accounting Standards (“SFAS”) Nos. 142 and 144, “Accounting for Goodwill and Other Intangible Assets” and “Accounting for Impairment or Disposal of Long-Lived Assets”.  In accordance with SFAS No. 142 and 144, long-lived assets, goodwill and certain identifiable intangible assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset will not be recoverable.  For purposes of evaluating the recoverability of long-lived assets, goodwill and intangible assets, the recoverability test is performed using undiscounted net cash flows related to the long-lived assets.  Impairment of experimental water clarification equipment is calculated based on its estimated useful life.

(F)  Income Taxes

The Company utilizes SFAS No. 109, “Accounting for Income Taxes”, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns.  Under this method, deferred tax assets and liabilities are determined based on the difference between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income.  Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.  The Company generated deferred tax credits through net operating loss carryforwards.  However, a valuation allowance of 100% has been established, as the realization of the deferred tax credits is not reasonably certain, based on going concern considerations outlined below.

(G)  Recent Accounting Pronouncements

In May, 2009, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 165, “Subsequent Events”, which established general accounting standards and disclosure for subsequent events.  In accordance with SFAS No. 165, the Company has evaluated subsequent events through the date the financial statements were filed.

In June, 2009, the FASB issued SFAS No. 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles – a replacement of FASB Statement No. 162”.  SFAS No. 168 establishes the FASB Accounting Standards Codification as the single source of authoritative U.S. generally accepted accounting principles recognized by the FASB to be applied to nongovernmental entities.  SFAS No. 168 is effective for financial statements issued for interim and annual periods ending after September 15, 2009.   The adoption of SFAS No. 168 will not have an impact on the Company’s financial position, results of operations or cash flows.

(H)  Fair Value of Financial Instruments

The FASB issued SFAS No. 107, “Disclosures About Fair Value of Financial Instruments.”  SFAS No. 107 requires disclosure of fair value information about financial instruments when it is practicable to estimate that value.  The carrying amounts of the Company’s financial instruments as of March 31, 2010 approximate their respective fair values because of the short-term nature of these instruments.  Such instruments consist of cash, accounts payable and accrued expenses, and loans payable. 
 
 
F-6
 

(I)  Loss Per Share

SFAS No. 128, “Earnings Per Share”, requires presentation of basic earnings per share and diluted earnings per share.  Basic income (loss) per share (“Basic EPS”) is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the period.  Diluted earnings per share (“Diluted EPS”) is similarly calculated using the treasury stock.  At March 31, 2010, there were no potentially dilutive securities.

The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations for the three months ended March 31, 2010 and 2009:

   
2009
    
2008
  
Numerator:
            
Basic and diluted net loss per share:
            
Net Loss
   $ (2,059 )   $ (24,866 )
Denominator:
                
Basic and diluted weighted average number of shares outstanding
     55,234,063       55,234,603  
Basic and Diluted Net Loss Per Share:
   $ (0.000 )   $ (0.000 )
 
(J)  Patent

The patent is United States Patent 5904855 granted May 18, 1999 for a “Closed Chemically Advanced Treatment System”.  The invention described in the patent is used by the Company in the water purification equipment which is under development.  The patent is not in use to protect marketed products and is therefore not amortized.  There has been no change in circumstances that would warrant impairment per an evaluation under SFAS No. 121.

 (K)  Foreign Currency Translation

In accordance with SFAS No. 52, “Foreign Currency Translation”, the Company has determined that its functional currency is the United States Dollar.  The Company did not record a consolidated comprehensive gain or loss in the three months ended March 31, 2010, because the transactions through a Canadian bank were conducted in U.S. dollars.  Exchange differences since inception are accumulated as a component of accumulated other comprehensive gain.

(L)  Comprehensive Income (Loss)

Comprehensive income or loss encompasses net income or loss and “other comprehensive income or loss”, which includes all other non-owner transactions and events that change shareholders’ equity/deficiency.  The Company’s other comprehensive gain reflects the effect of foreign currency translation adjustments on the translation of the financial statements from the functional currency of Canadian dollars into the reporting currency of U.S. dollars.

NOTE 2.  ACQUISITION OF MINERAL PROPERTY

On March 31, 2006, the Company entered into an agreement for an option to acquire a 100% interest in the August Property in the Kettle River Region of British Columbia, Canada for a purchase price of $3,600.  The property consists of 2 mineral claims known as the Kenrick #1 and Hard To Beat Claims.

In August 2006, a geological survey on the property was completed, geological report filed, and exploration program recommended.

Because the company had not yet established the viability of the property, the mineral rights were impaired 100% as of March 31, 2008.
 
 
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NOTE 3.  STOCKHOLDERS EQUITY

On February 28, 2006, the Company issued 27,500,000 shares of common stock to its founders for cash of $5,500 ($0.0002 per share).

On June 30, 2006, the Company issued 27,500,000 shares of common stock for cash of $55,000 ($0.002 per share).

On October 29, 2007, the Company effected a 5:1 forward split of its common stock.

On December 7, 2007, the Company entered into a share exchange agreement with PEWS, a private Nevada corporation, and the shareholders of PEWS. Pursuant to the terms of the share exchange agreement, the Company agreed to acquire all of the issued and outstanding shares of PEWS’s common stock in exchange for 27,500,000 shares of the Company.

On February 11, 2008, the share exchange agreement was amended. On February 13, 2008, pursuant to the terms of the amendment, the Company acquired all of the issued and outstanding shares of PEWS’s common stock in exchange for the Company’s issuance of 27,734,603 shares of common stock to the shareholders of PEWS.  The transaction was accounted for as a purchase, with the Company being the acquirer for accounting purposes. By this means, PEWS became a 100% owned subsidiary of the Company.

On February 13, 2008, 27,500,000 shares of founders’ stock was surrendered to the treasury of the Company and the shares retired.

At March 31, 2010, the Company was authorized to issue 375,000,000 shares, of which there were 55,234,603 shares issued and outstanding.

NOTE 4.  GOING CONCERN

As reflected in the accompanying financial statements, the Company is in the development stage with no operations, and from inception has a consolidated net operating loss of $1,274,960.  The Company has negative consolidated working capital of $401,156 and a stockholders’ deficit of $240,586 as at March 31, 2010.  There is substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan.  The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern.

NOTE 5.  LITIGATION

There are no significant legal proceedings against the Company with respect to matters arising in the ordinary course of business.
 
 
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Explanatory Note

As reported in our current report on Form 8-K filed with the United States Securities and Exchange Commission (the “SEC”) on February 14, 2008, we completed a share exchange transaction with Purio Environmental Water Source, Inc., a private Nevada corporation (“PEWS”), and the shareholders of PEWS that resulted in PEWS becoming our wholly-owned subsidiary and our new operating business as of February 13, 2008. The closing of the share exchange transaction resulted in a change of control of our company. The share exchange transaction was accounted for as a reverse acquisition and, as a result, our consolidated financial statements are, in substance, those of PEWS, with our assets, liabilities, revenues and expenses included effective from the date of the closing of the share exchange transaction.

Forward Looking Statements

This quarterly report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions.

While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested in this report. Except as required by applicable law, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our unaudited financial statements are stated in U.S. dollars and are prepared in accordance with generally accepted accounting principles in the United States. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report.

Business Overview

As of the closing date of the share exchange agreement on February 13, 2008, we adopted the business of PEWS, which involves selling clarified and reclaimed product water for human consumption, as well as agricultural, industrial, domestic and recreational uses. Our business strategy is to generate revenues through the production, processing and distribution of clarified and reclaimed product water. In addition, we intend to distribute water purification equipment in Canada, the Unites States and internationally through license agreements and other appropriate arrangements.

PEWS owns proprietary water clarification technology suitable for a broad number of applications including the clarification of surface water, industrial process water and sewage. We intend to use PEWS’s technology initially for industrial and commercial applications to reclaim water and reduce the need for fresh water in such applications. We further intend to use Purio’s technology to produce potable water for commercial and residential use. In all cases, we intend for PEWS to retain ownership and operation of its proprietary technology and to sell the water to end users.

We also intend to distribute a comprehensive line of in-home and office drinking water purification equipment in Canada and the Unites States.
 
 
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Results of Operations

Our results of operations are presented below:

 
 
 
 
Three Months Ended March 31, 2010
($)
 
 
 
Three Months Ended March 31, 2009
($)
Period from
November 16, 1999
(Date of Inception) to
March 31, 2010
($)
Revenue
-
-
5,113
Selling Expenses
-
-
40,345
General and Administrative Expenses
2,059
28,097
1,237,608
Net Loss
2,059
27,845
1,272,900

During the three months ended March 31, 2010 we incurred a net loss of $2,059, compared to a net loss of $27,845 during the same period in fiscal 2009. Our net loss from our inception on November 16, 1999 to March 31, 2010 was $1,272,900. We did not experience any net loss per share during the three months ended March 31, 2010 or 2009.

Our total operating expenses during the three months ended March 31, 2010 were $2,059, compared to total operating expenses of $28,097 during the same period in fiscal 2009. Our total operating expenses from our inception on November 16, 1999 to March 31, 2010 were $1,272,840.

Our total operating expenses during the three months ended March 31, 2010 consisted entirely of general and administrative expenses, including $1,988 in depreciation and $71 in other general and administrative expenses. We did not incur any other operating expenses during this period.

Our total operating expenses during the three months ended March 31, 2009 consisted entirely of general and administrative expenses, including $6,176 in professional fees, $8, 518 in occupancy costs, $2,060 in depreciation and $11,343 in other general and administrative expenses. We did not incur any other operating expenses during this period.

Our total operating expenses from our inception on November 16, 1999 to March 31, 2010 consisted of $40,345 in selling expenses, $411,010 in professional fees, $22,219 in exploration costs and expenses, $44,839 in occupancy costs, $430,698 in consulting fees, $40,570 in depreciation, $3,600 in impairment of mineral rights, $11,018 in stock transfer fees, $53,564 in administration costs and $220,090 in other general and administrative expenses.

Our general and administrative expenses consisted of travel, meals and entertainment, office maintenance, communication expenses (cellular, internet, fax and telephone), office supplies, web development and courier and postage costs. Our professional fees consisted of legal, accounting and auditing fees.

The decrease in our operating expenses for the three months ended March 31, 2010 was primarily due to decreases in our professional fees, occupancy costs and other general and administrative expenses.
 
 
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Liquidity and Capital Resources

As of March 31, 2010 we had cash of $208 in our bank accounts. As of March 31, 2010 we also had inventory of $9,836, property and equipment of $38,960 and patents of $121,610, for total assets of $170,614.

As of March 31, 2010 we had current assets of $10,044, current liabilities of $411,200 and a working capital deficit of $401,156. Our accumulated deficit from our inception on November 16, 1999 to March 31, 2010 was $1,274,960 and was funded primarily through equity financing and loans from stockholders.

During the three months ended March 31, 2010 we received net cash of $17,087 from operating activities, compared to net cash spending of $24,936 on operating activities during the same period in fiscal 2009. The decrease in our expenditures on operating activities during the three months ended March 31, 2010 was primarily due to an increase in subscriptions received and a decrease in our net operating loss.

During the three months ended March 31, 2010 we received net cash of $97 from investing activities, whereas we did not engage in any investing activities during the same period in fiscal 2009. The increase in our receipts from investing activities during the three months ended March 31, 2010 was primarily due to an increase in our disposition of equipment.

During the three months ended March 31, 2010 we spent net cash of $17,255 on financing activities, whereas we did not engage in any financing activities during the same period in fiscal 2009. The increase in our expenditures on financing activities during the three months ended March 31, 2010 was primarily due to an increase in our repayment of stockholders’ loans.

During the three months ended March 31, 2010 our monthly cash requirements to fund our operating activities was approximately $24 compared to $7,235 during the same period in fiscal 2009. In the absence of additional subscriptions or stockholder loans, our cash of $208 as of March 31, 2010 is sufficient to cover our current monthly burn rate for less than one month.

We estimate our planned expenses for the next 12 months (beginning May 2010) to be approximately $1,000,000, as summarized in the table below:

Description
Potential Completion Date
Estimated Expenses
($)
Construction or purchase of purification equipment
12 months
500,000
Marketing expenses
12 months
300,000
Research and development
12 months
50,000
Professional fees (legal, accounting and auditing fees)
12 months
100,000
Other general and administrative expenses
12 months
50,000
Total
  
1,000,000

Our general and administrative expenses for the year will consist of travel, meals and entertainment, office maintenance, communication expenses (cellular, internet, fax and telephone), office supplies, web development and courier and postage costs. Our professional fees include legal, accounting and auditing fees, and are related to our regulatory filings throughout the year.

Based on our planned expenditures, we require additional funds of approximately $999,800 (a total of $1,000,000 less our approximately $210 in cash as of March 31, 2010) to proceed with our business plan over the next 12 months. If we are not able to obtain additional financing on a timely basis, we will be unable to conduct our operations as planned, and we will not be able to meet our obligations as they become due. In such event, we will be forced to scale down or perhaps even cease our operations.
 
 
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Future Financings

We have generated limited revenues, have achieved losses since our inception, and rely upon the sale of our securities to fund our operations. We anticipate that we will incur substantial losses for the foreseeable future, and we are dependent upon obtaining outside financing to carry out our operations. Our financial statements for the three months ended March 31, 2010 have been prepared on a going concern basis and do not include any adjustments that might result from the outcome of this uncertainty.

We will require approximately $1,000,000 over the next 12 months in order to enable us to proceed with our plan of operations, including paying our ongoing expenses. These cash requirements are in excess of our current cash and working capital resources. Accordingly, we intend to raise the balance of our cash requirements for the next 12 months (approximately $999,800) from private placements, stockholder loans or possibly a registered public offering (either self-underwritten or through a broker-dealer). If we are unsuccessful in raising enough money through such efforts, we may review other financing possibilities such as bank loans. At this time we do not have a commitment from any broker-dealer to provide us with financing, and there is no guarantee that any financing will be available to us or if available, on terms that will be acceptable to us.

If we are unable to obtain the necessary additional financing, then we plan to reduce the amounts that we spend on our operations, our professional fees and our other general and administrative expenses so as not to exceed the amount of capital resources that are available to us. If we do not secure additional financing our current cash reserves and working capital will be not be sufficient to enable us to sustain our operations and for the next 12 months, even if we do decide to scale back our operations.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.

Critical Accounting Policies

Our financial statements are affected by the accounting policies used and the estimates and assumptions made by management during their preparation. A complete summary of these policies is included in Note 1 of the notes to our financial statements. We have identified below the accounting policies that are of particular importance in the presentation of our financial position, results of operations and cash flows, and which require the application of significant judgment by management.

Principles of Consolidation

Our consolidated financial statements include the accounts of Purio Inc. and Purio Environmental Water Source, Inc., a wholly owned subsidiary. Significant inter-company transactions have been eliminated.

Patent

The patent is United States Patent 5904855 granted May 18, 1999 for a “Closed Chemically Advanced Treatment System”. The invention described in the patent is used by us in the water purification equipment which is under development. The patent is not in use to protect marketed products and is therefore not amortized. There has been no change in circumstances that would warrant impairment per an evaluation under SFAS No. 121.

Inflation

The amounts presented in the financial statements do not provide for the effect of inflation on our operations or financial position. The net operating losses shown would be greater than reported if the effects of inflation were reflected either by charging operations with amounts that represent replacement costs or by using other inflation adjustments.
 
 
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Not applicable.


Disclosure Controls

We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act"), that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission (the “SEC”), and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the evaluation of these disclosure controls and procedures, our management concluded that our disclosure controls and procedures were not effective due to control deficiencies.

Changes in Internal Control

During the three months ended March 31, 2010 there were no changes in our internal control over financial reporting (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
 
 
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We are not aware of any legal proceedings to which we are a party or of which our property is the subject. None of our directors, officers, affiliates, any owner of record or beneficially of more than 5% of our voting securities, or any associate of any such director, officer, affiliate or security holder are (i) a party adverse to us in any legal proceedings, or (ii) have a material interest adverse to us in any legal proceedings. We are not aware of any other legal proceedings that have been threatened against us.


None.


None.



None.




Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 Date: May 14, 2010
Purio Inc.
     
 
By:
/s/ Daryl English
   
Daryl English 
   
President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Secretary, Treasurer and Director
 
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