10-Q

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 September 30, 2012

[   ]	TRANSITION REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from _______ to _______.

Commission File Number:  000-52864

Entia Biosciences, Inc.

 (Exact name of Registrant as specified in its charter)

Nevada	26-0561199
(State or other jurisdiction	(IRS Employer
of incorporation or organization)	Identification No.)

13565 SW Tualatin-Sherwood Rd #800, Sherwood, OR 97140

 (Address of principal executive offices)

(503) 334-3575

 (Registrant’s telephone number)

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.

Yes [X]   No [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive DataFile 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 [X]   No [  ]

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. (Check one):

Large accelerated filer [  ]	Accelerated filer [  ]
Non-accelerated filer [  ]	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 [  ]   No [X]

On November 14, 2012, 7,444,341 shares of the registrant's common stock, par value $0.001 per share, were outstanding.

TABLE OF CONTENTS
		Page
Part I. Financial Information		3
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion And Analysis Of Financial Condition And Results Of Operations	16
Item 3.	Quantitative And Qualitative Disclosures About Market Risk	19
Item 4.	Controls And Procedures	19
Part II. Other Information		20
Item 1.	Legal Proceedings	20
Item 1a.	Risk Factors	20
Item 2.	Unregistered Sales Of Equity Securities And Use Of Proceeds	20
Item 3.	Defaults Upon Senior Securities	20
Item 4.	Mine Safety Disclosures	20
Item 5.	Other Information	20
Item 6.	Exhibits	20
Signatures		21

2

Part 1: FINANCIAL INFORMATION

Item 1. Financial Statements

ENTIA BIOSCIENCES, INC.
CONSOLIDATED BALANCE SHEETS
				September 30, 2012		December 31, 2011
				(unaudited)
Assets
Current Assets:
	Cash		$	14,698	$	16,639
	Accounts receivable, net			26,580		36,273
	Inventory, net			158,663		173,578
	Prepaid expenses			9,967		31,891
		Total Current Assets		209,908		258,381
Property and Equipment, net				38,227		31,846
Patents and license, net				169,604		114,673
Total Assets			$	417,739	$	404,900
Liabilities and Stockholders' Equity (Deficit)
Current Liabilities:				.
	Accounts payable and accrued expenses		$	549,234	$	331,839
	Short-term convertible notes payable, net of discount			363,277		194,656
	Capital lease payable			2,808		-
	Notes payable			3,227		23,157
		Total Current Liabilities		918,546		549,652
Long Term Liabilities:
	Capital lease payable			2,573		-
	Convertible notes payable, net of discount-related party			60,470		50,000
	Convertible notes payable, net of discount			-		65,000
		Total Long Term Liabilities		63,043		115,000
Total Liabilities				981,589		664,652
Stockholders' Equity (Deficit):
	Preferred stock, $0.001 par value, 5,000,000 shares authorized,
		Series A preferred stock, 350,000 and 350,000 shares designated,
		respectively, 88,900 and 43,500 shares issued and outstanding,
		respectively, aggregate liquidation value of $444,500
		and $217,500, respectively		89		44
	Common stock, $0.001 par value, 150,000,000 shares authorized, 7,444,341
		and 7,171,175 shares issued and outstanding, respectively		7,444		7,171
	Stock subscription receivable			(59,000)		-
	Additional paid-in capital			4,903,491		4,272,792
	Deferred compensation			(377,496)		(497,383)
	Accumulated deficit			(5,038,378)		(4,042,376)
		Total Stockholders' Equity (Deficit)		(563,850)		(259,752)
Total Liabilities and Stockholders' Equity (Deficit)			$	417,739	$	404,900
See accompanying notes to the consolidated financial statements.

3

ENTIA BIOSCIENCES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
			Three Months	Three Months	Nine Months	Nine Months
			Ended	Ended	Ended	Ended
			September 30, 2012	September 30, 2011	September 30, 2012	September 30, 2011
REVENUES			$ 72,604	$ 108,566	$ 263,255	$ 309,309
COST OF GOODS SOLD			23,611	15,128	61,738	100,744
GROSS PROFIT			48,993	93,438	201,517	208,564
OPERATING EXPENSES
	Advertising and promotion		11,420	11,419	20,862	82,110
	Sales commissions		1,839	-	5,164	-
	Consulting fees - officer		-	30,000	-	90,000
	Professional fees		33,717	30,986	115,021	133,460
	Consulting fees		38,367	45,057	192,242	358,703
	Impairment of intangible asset		-	-	-	106,642
	General and administrative		193,676	101,318	667,240	377,820
		Total Operating Expenses	279,019	218,780	1,000,529	1,148,735
LOSS FROM OPERATIONS			(230,026)	(125,343)	(799,012)	(940,171)
OTHER INCOME (EXPENSES)
	Interest income		-	-	-	192
	Interest expense		(50,743)	(75,451)	(250,905)	(233,766)
	Gain on extinguishment of debt		-	-	75,315	-
	Gain on disposal of product line		-	-	-	78,842
		Total Other Expense	(50,743)	(75,451)	(175,590)	(154,732)
LOSS BEFORE TAXES			(280,769)	(200,793)	(974,602)	(1,094,903)
INCOME TAXES			-	-	-	-
NET LOSS			$ (280,769)	$ (200,793)	$ (974,602)	$ (1,094,903)
DEEMED DIVIDEND RELATED TO BENEFICIAL
	CONVERSION FEATURE OF CONVERTIBLE
	PREFERRED STOCK		-	-	(21,400)	-
NET LOSS PER SHARE ALLOCABLE TO COMMON
	STOCKHOLDERS		(280,769)	(200,793)	(996,002)	(1,094,903)
NET LOSS PER COMMON SHARE
	- BASIC AND DILUTED:		$ (0.04)	$ (0.03)	$ (0.14)	$ (0.18)
	Weighted common shares outstanding
		- basic and diluted	7,209,206	6,197,676	7,190,229	6,149,050
See accompanying notes to the consolidated financial statements.

4

ENTIA BIOSCIENCES, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE PERIOD ENDED DECEMBER 31, 2011 AND
	FOR THE INTERIM PERIOD ENDED SEPTEMBER 30, 2012
(Unaudited)
						Additional				Total
		Preferred Stock		Common Stock		Paid	Deferred	Stock	Accumulated	Stockholders'
		Shares	Amount	Shares	Amount	In Capital	Compensation	Subscriptions	Deficit	Equity (Deficit)
Balance - December 31, 2010		-	$ -	5,836,247	$ 5,836	$ 2,011,989	$ (9,704)	$ -	$ (2,313,274)	$ (305,153)
Conversion of note payable into preferred stock		21,500	22	-	-	107,478	-		-	107,500
Issuance of preferred stock for cash		22,000	22	-	-	109,978	-		-	110,000
Issuance of warrants in connection with					-
	convertible notes payable	-	-	-	-	45,937	-		-	45,937
Beneficial conversion feature in connection with
	convertible note payable	-	-	-	-	173,030	-		-	173,030
Issuance of common stock for license agreement		-	-	100,000	100	99,900	-		-	100,000
Issuance of common stock for conversion of accounts		-	-	-	-	-	-		-	-
	payable/accrued comp			897,104	935	368,875	-		-	369,810
Issuance of common stock for services		-	-	276,395	238	243,758	-		-	243,996
Issuance of common stock and warrants for cash		-	-	61,429	62	42,938	-		-	43,000
Stock compensation		-	-	-	-	347,696	-		-	347,696
Issuance of warrants for services		-	-	-	-	721,213	(712,758)		-	8,455
Amortization of deferred compensation		-	-	-	-	-	225,079		-	225,079
Net loss		-	-	-	-	-	-		(1,729,103)	(1,729,103)
Balance -December 31, 2011		43,500	44	7,171,175	7,171	4,272,792	(497,383)	-	(4,042,376)	(259,752)
Issuance of preferred stock for cash		36,400	36	-	-	181,963	-	-	-	181,999
Issuance of preferred stock for
	cancellation of debt	2,000	2	-	-	9,998	-	-	-	10,000
Issuance of preferred stock for services		7,000	7	-	-	34,993	-	-	-	35,000
Deemed dividend related to beneficial conversion
	feature of convertible preferred stock	-	-	-	-	21,400	-	-	(21,400)	-
Issuance of warrants in connection with
	convertible notes payable	-	-	-	-	27,704	-	-	-	27,704
Issuance of common stock for license agreement		-	-	50,000	50	25,451	-	-	-	25,501
Issuance of common stock and warrants for cash		-	-	75,000	75	29,925	-	-	-	30,000
Issuance of common stock for note receivable		-	-	147,500	147	58,853	-	(59,000)	-	-
Stock compensation		-	-	666	1	170,740	-	-	-	170,741
Issuance of warrants for services		-	-	-	-	21,139	(21,139)	-	-	-
Issuance of warrants for extension on debt		-	-	-	-	48,533	-	-	-	48,533
Amortization of deferred compensation		-	-	-	-	-	141,026	-	-	141,026
Net loss		-	-	-	-	-	-	-	(974,602)	(974,602)
Balance - September 30, 2012		88,900	$ 89	7,444,341	$ 7,444	$ 4,903,491	$ (377,496)	$ (59,000)	$ (5,038,378)	$ (563,850)
See accompanying notes to the consolidated financial statements.

5

ENTIA BIOSCIENCES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
				Nine Months		Nine Months
				Ended		Ended
				September 30, 2012		September 30, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss			$	(974,602)	$	(1,094,903)
Adjustments to reconcile net loss to net cash
	used in operating activities:
	Gain on disposal of product line			-		(78,842)
	Bad debt expense			-		2,059
	Depreciation/amortization			16,290		11,009
	Gain on extinguishment of debt			(75,315)		-
	Impairment of intangible asset			-		106,642
	Amortization of discount on convertible notes			179,110		222,933
	Stock-based compensation			420,801		467,131
	Changes in operating assets and liabilities:
		Accounts receivable		9,693		(11,433)
		Inventory		14,915		(23,501)
		Prepaid expenses		21,924		24,930
		Other current assets		-		3,792
		Accounts payable and accrued expenses		217,395		95,045
		Accrued compensation - officer		-		89,398
NET CASH USED IN OPERATING ACTIVITIES				(169,789)		(185,740)
CASH FLOWS FROM INVESTING ACTIVITIES:
	Purchase of property and equipment			(14,906)		(3,708)
	Acquisition of patents and patents pending  (net)			(57,315)		(34,789)
	Collections on lease receivable			-		8,304
NET CASH USED IN INVESTING ACTIVITIES				(72,221)		(30,193)
CASH FLOWS FROM FINANCING ACTIVITIES:
	Proceeds from issuance of common stock, preferred stock and warrants			211,999		143,200
	Proceeds from convertible notes payable			13,000		-
	Proceeds from notes payable			-		26,438
	Proceeds from convertible note payable-related party			25,000		-
	Repayment of note payable			(9,930)		(10,795)
NET CASH PROVIDED BY FINANCING ACTIVITIES				240,069		158,843
NET CHANGE IN CASH				(1,941)		(57,090)
Cash at beginning of period				16,639		65,061
Cash at end of period			$	14,698	$	7,971
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
	Interest paid		$	893	$	1,674
	Taxes paid		$	-	$	-
SUPPLEMENTAL DISCLOSURE OF NONCASH FLOWS FINANCING
	AND INVESTING ACTIVITIES:
	Deemed distribution		$	21,400	$	-
	Conversion of notes payable to preferred stock		$	10,000	$	107,500
	Warrants issued for extinguishment of debt		$	48,533	$	-
	Stock issued for license		$	25,501	$	100,000
	Stock issued for note receivable		$	59,000		-
	Warrants issued in connection with notes payable		$	27,704	$	-
See accompanying notes to the consolidated financial statements.

6

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND OPERATIONS

Generic Marketing Services, Inc. was incorporated on July 19, 2007 under the laws of the State of Nevada as a subsidiary of Basic Services, Inc., also a Nevada corporation.  On December 31, 2007, Basic Services, Inc. spun off Generic Marketing Services and on October 8, 2008, Generic Marketing Services changed its name to Total Nutraceutical Solutions, Inc.  On January 9, 2012, the Nevada Secretary of State accepted an amendment to our Articles of Incorporation to change the name again to Entia Biosciences, Inc. (Entia, the Company, us, we or our) and to form a wholly owned subsidiary named Total Nutraceutical Solutions, Inc. (TNS)  Entia is an emerging biotechnology company engaged in the discovery, formulation and marketing of natural compounds and whole foods that can be used in branded medical foods, nutraceuticals, cosmetics and other products sold by us, our TNS subsidiary and by third parties.

On February 15, 2012 a 10:1 reverse stock split became effective after we received authorization from Financial Industry Regulatory Authority (FINRA) for the corporate action that was approved by the shareholders on December 19, 2011.

On May 15, 2012, Entia moved from its current location to a larger building in order to increase its in-house research and manufacturing capability, increase its warehouse storage capacity, and accommodate anticipated increases in order fulfillment and staffing.  By moving to the larger facility, Entia was able to vertically integrate its Vitamin D enhancement technology and the milling, blending, encapsulating, bottling, labeling, packaging and fulfillment of its products. This move resulted in a significant improvement in production efficiencies and the cost of its final products.  Production of cosmetic products and certain nutraceuticals are still being outsourced.

We have a history of incurring net losses and net operating cash flow deficits.  We are continually researching and developing new technologies related to our organic nutraceutical products, including the production of medical foods for clinical studies in diabetes, anemia and Parkinson’s disease.  At September 30, 2012, we had cash and cash equivalents of $14,698.  These conditions raise substantial doubt about our ability to continue as a going concern.  As a result, we anticipate that our cash and cash equivalent balances, anticipated cash flows from operations and anticipated operating cash flows will be sufficient to meet our cash requirements through December 2012.  

In order for us to continue as a going concern beyond this point and ultimately to achieve profitability, we may be required to obtain capital from external sources, increase revenues and reduce operating costs.  The issuance of equity securities will also cause dilution to our shareholders.  If external financing sources of financing are not available or are inadequate to fund our operations, we will be required to reduce operating costs including personnel costs, which could jeopardize our future strategic initiatives and business plans.  The accompanying consolidated financial statements have been prepared assuming that the company continues as a going concern.

The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the matters discussed herein.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation and principles of consolidation

The accompanying consolidated unaudited interim financial statements and related notes have been prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP) for interim financial information, and with the rules and regulations of the United states Securities and Exchange Commission (“SEC”) to Form 10-Q and Article 8 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.  The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented.  Unaudited interim results are not necessarily indicative of the results for the full year.  These unaudited interim financial statements should be read in conjunction with the financial statements of the Company for the year ended December 31, 2011 and notes thereto contained in the Company’s Annual Report on Form 10-K filed with the SEC.  

Investments for which we possess the power to direct or cause the direction of the management and policies, either through majority ownership or other means, are accounted for under the consolidation method. The consolidated financial statements include the accounts of Entia and TNS.  All intercompany accounts have been eliminated for the purpose of the consolidated financial statement presentation.

7

Use of estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

Cash

We consider all highly liquid, short-term investments with original maturities of three months or less when purchased to be cash equivalents.

Accounts receivable

Accounts receivable are recorded at the invoiced amount, net of allowance for doubtful accounts.  The allowance for doubtful accounts is our best estimate of the amount of probable credit losses based on specific identification of accounts in our existing accounts receivable.  Outstanding account balances are reviewed individually for collectibility.  We determine the allowance based on historical write-off experience, customer specific facts and economic conditions.  Bad debt expense is included in general and administrative expenses, if any.  We consider all accounts greater than 30 days old to be past due.  Account balances are charged off against allowance after all means of collection have been exhausted and the potential for recovery is considered remote.  The allowance for doubtful accounts was $2,526 and $2,526 at September 30, 2012 and December 31, 2011, respectively.

Inventory

Inventory, which consists primarily of raw materials to be used in the production of our dietary supplement products, is stated at the lower of cost or market using the first-in, first-out method. We regularly review our inventory on hand and, when necessary, record a provision for excess or obsolete inventory.   

Property and equipment

Property and equipment are recorded at cost. Additions and improvements that increase the value or extend the life of an asset are capitalized. Maintenance and repairs are expensed as incurred.  Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the consolidated statement of operations.  Depreciation is computed on a straight-line basis over the following estimated useful lives of the assets:

Office equipment	3 years
Production equipment	5 to 7 years
Equipment under capital lease	5 to 7 years
Leasehold improvements	Lesser of lease term or useful life of improvement

Patents

Patents, once issued or purchased, are amortized using the straight-line method over their economic remaining useful lives. All internally developed process costs incurred to the point when a patent application is to be filed are expensed as incurred and classified as research and development costs.  Patent application costs, generally legal costs, are capitalized pending disposition of the individual patent application, and are subsequently either amortized based on the initial patent life granted, generally 15 to 20 years for domestic patents and 5 to 20 years for foreign patents, or expensed if the patent application is rejected.  The costs of defending and maintaining patents are expensed as incurred.  Upon becoming fully amortized, the related cost and accumulated amortization are removed from the accounts.

Impairment of long-lived assets

Our long-lived assets, which include property and equipment, patents and licenses of patents, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

We assess the recoverability of our long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets.  Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable.  If long-lived assets are

8

determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.  

Discount on convertible notes payable

We allocate the proceeds received from convertible notes between convertible notes payable and warrants, if applicable. The resulting discount for warrants is amortized using the effective interest method over the life of the debt instrument. After allocating a portion of the proceeds to the warrants, the effective conversion price of the convertible note payable can be determined. If the effective conversion price is lower than the market price at the date of issuance, a beneficial conversion feature is recorded as an additional discount to the convertible note payable. The beneficial conversion feature discount is amortized using the effective interest method over the life of the debt instrument.  The amortization is recorded as interest expense on the consolidated statement of operations.

Fair value of financial instruments

The carrying amounts of our financial assets and liabilities, such as cash, accounts receivable and accounts payable, approximate their fair values because of the short maturity of these instruments.  Due to conversion features and other terms, it is not practical to estimate the fair value of notes payable and convertible notes.

Fair value measurements

We measure fair value as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. We utilize a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1	Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
Level 2	Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
Level 3	Unobservable inputs where there is little or no market data, which require the reporting entity to develop its own assumptions.

We do not have any assets or liabilities measured at fair value on a recurring or a non-recurring basis. Consequently, we did not have any fair value adjustments for assets and liabilities measured at fair value at September 30, 2012 or December 31, 2011, nor any gains or losses reported in the consolidated statement of operations that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date for the periods ended September 30, 2012 and December 31, 2011.

Revenue recognition

We recognize revenue when (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been performed, (iii) amounts are fixed or determinable and (iv) collectibility of amounts is reasonably assured.

Revenues from the sale of products, including shipping and handling fees but excluding statutory taxes collected from customers, as applicable, are recognized when shipment has occurred. We sell our products directly to customers. Persuasive evidence of an arrangement is demonstrated via order and invoice, product delivery is evidenced by a bill of lading from the third party carrier and title transfers upon shipment, the sales price to the customer is fixed upon acceptance of the order and there is no separate sales rebate, discount, or volume incentive.

Shipping and handling costs

Amounts charged to customers for shipping products are included in revenues and the related costs are classified in cost of goods sold as incurred.  

Advertising and promotion costs

Costs associated with the advertising and promotion of our products are expensed as incurred.

Equity instruments issued to parties other than employees for acquiring goods or services

9

We account for all transactions in which goods or services are the consideration received for the issuance of equity instruments based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.  The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will occur.  Currently such transactions are primarily awards of warrants to purchase common stock.

The fair value of each warrant award is estimated on the date of grant using a Black-Scholes option-pricing valuation model.  

The assumptions used to determine the fair value of our warrants are as follows:

The expected life of warrants issued represents the period of time the warrants are expected to be outstanding.

The expected volatility is generally based on the historical volatility of comparable companies’ stock over the contractual life of the warrant.

The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods within the contractual life of the warrant.

The expected dividend yield is based on our current dividend yield as the best estimate of projected dividend yield for periods within the contractual life of the warrant.

Income taxes

We recognize 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 based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.  Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in our consolidated statements of income in the period that includes the enactment date.

We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.  The tax benefits recognized in our consolidated financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement.  Should they occur, our policy is to classify interest and penalties related to tax positions as income tax expense.

Net loss per common share

Basic and diluted net loss per share has been computed by dividing our net loss by the weighted average number of common shares issued and outstanding. Convertible preferred stock, options and warrants to purchase our common stock as well as debt which are convertible into common stock are anti-dilutive and therefore are not included in the determination of the diluted net loss per share for three months ending September 30, 2012 and 2011 and the nine months ending September 30, 2012 and 2011.   The following table presents a reconciliation of basic loss per share and excluded dilutive securities:

	For the Three Months Ended September 30,		For the Nine Months Ended September 30,
	2012	2011	2012	2011
Numerator:
Net loss applicable to common shareholders	$ (280,769)	$ (200,793)	$ (996,002)	$ (1,094,903)
Denominator:
Weighted-average common shares outstanding	7,209,206	6,197,676	7,190,229	6,149,050
Basic and diluted net loss per share	$ (0.04)	$ (0.03)	$ (0.14)	$ (0.18)
Common stock warrants	2,758,266	1,689,747	2,464,471	1,689,747
Series A convertible preferred stock	889,000	415,000	843,000	415,000
Stock options	658,240	-	591,179	-
Convertible debt including interest	400,025	537,865	395,624	537,865
Excluded dilutive securities	4,705,531	2,642,612	4,294,274	2,642,612

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Reclassifications 

Certain reclassifications have been made to prior period financial statements and footnotes in order to conform to the current period's presentation.

Segments

We have determined that we operate in one segment for financial reporting purposes.

Recently issued accounting pronouncements

Management does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.

NOTE 3 – INVENTORY

Inventory consists of the following:

	September 30, 2012	December 31, 2011
Raw materials	$ 278,797	$ 294,036
Finished goods	7,439	7,115
	286,236	301,151
Less:  reserve for excess and obsolete inventory	(127,573)	(127,573)
	$ 158,663	$ 173,578

NOTE 4 – PROPERTY AND EQUIPMENT

Property and equipment, stated at cost, consists of the following:

	September 30, 2012	December 31, 2011
Office equipment	$ 24,584	$ 23,072
Production equipment	37,984	30,964
Leasehold improvements	13,946	2,192
	76,514	56,228
Less:  accumulated depreciation	(38,287)	(24,382)
	$ 38,227	$ 31,846

NOTE 5 - PATENTS AND LICENSES, NET

Our identifiable long-lived intangible assets are patents and prepaid licenses.  Patent and license amortization is $803 and $178 for the three months ended September 30, 2012 and 2011, respectively and $2,383 and $251 for the nine months ended September 30, 2012 and 2011, respectively.  

The licenses are being amortized over an economic useful life of 17 years. The gross carrying amounts and accumulated amortization related to these intangible assets consist of the following at:

	September 30, 2012	December 31, 2011
Gross carrying amounts-patents and licenses	$ 174,238	$ 116,924
Accumulated amortization	(4,634)	(2,251)
Patents and Licenses, net	$ 169,604	$ 114,673

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NOTE 6 – CAPITAL LEASE

In April 2012, we entered into a capital lease agreement totaling $7,021 for the lease of an encapsulating machine used to encapsulate our powdered product.  The lease is payable over 30 months interest free.

The following is a schedule by years of future minimum lease payments under capital leases.  

Years ending December 31:
2012	$ 702
2013	$ 2,808
2014	$ 1,871
Total minimum lease payments	$ 5,381

NOTE 7 – NOTES PAYABLE

Notes payable consists of the following:

	September 30, 2012	December 31, 2011
Notes payable - current
4.85%, unsecured, due monthly	415	20,664
7.85% unsecured, due monthly	2,812	2,493
	$ 3,227	$ 23,157
Convertible notes payable, net
5% unsecured due June 2013 (net of discount related to beneficial conversion feature of $0 in 2012 and $5,143 in 2011), convertible into preferred stock at $5.00 per share	$ 15,000	$ 9,857
5%, unsecured due June 2013  (net of discount related to beneficial conversion feature of $35,807 in 2012 and $127,701 in 2011), convertible into common stock at $0.45 per share	276,693	184,799
6% unsecured due June 2013 (net of discount related to beneficial conversion feature of $6,416 in 2012 and $0 in 2011), convertible into preferred stock at $5.00 per share	6,584
5% unsecured due June 2013, convertible into preferred stock at $5.00  per share	15,000	15,000
6% unsecured, convertible into common stock at $2.00 per share, due on demand	50,000	50,000
Less:  Current Portion	(363,277)	(194,656)
	$ -	$ 65,000
Convertible notes payable related party, net
6% unsecured due December 2013 (net of discount related to beneficial conversion feature of $14,530 in 2012 and $0 in 2011), convertible into common stock at $2.00 per share	$ 60,470	$ 50,000

Entia had debt in the principal amount of $392,500 in the form of convertible notes payable of which $377,500 was to mature on June 30, 2012.  Entia was successful in renegotiating all but one of these notes to extend their maturity dates to June 30, 2013.  $50,000 of the debt was extended month-to-month, and as such, all is classified as short-term on the balance sheet.  In consideration for extending the maturity date, Entia issued 50,000 warrants valued at $48,533 and modified an existing conversion feature for one of the notes.

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For one of the convertible notes payable modified in the second quarter, we deemed the terms of the note modification to be substantially different due to the change in the conversion rate and treated the convertible note payable as extinguished and exchanged for a new note.  We recorded a gain of $75,315 on the extinguishment.  

NOTE 8 – RELATED PARTY TRANSACTIONS

Consulting services from Chairman and CEO

Expense for consulting services provided by the Chairman/CEO were $30,000 and $90,000 for the three and nine months ended September 30, 2011, respectively.  No consulting services were provided for 2012, as the Chairman/CEO was converted to an employee in October 2011.

Debt agreements from board member

Entia entered into a promissory note with a board member for a 6% note for $25,000 maturing on December 31, 2013.  The note is reflected on the balance sheet, net of discount in the long term liabilities.

Preferred stock purchase from board member

During the second quarter 2012, a board member purchased 5,000 shares of Series A preferred stock, a $0.001 par value for $5.00 per share.  

NOTE 9 – STOCKHOLDERS’ EQUITY (DEFICIT)

Preferred Stock

On May 26, 2011, our board of directors designated 350,000 shares of preferred stock as Series A preferred stock, $0.001 par value.  The Series A preferred stock is entitled to a liquidation preference in the amount of $5 per share, votes on an as converted basis with the common stock on all matters as to which holders of common stock shall be entitled to vote, and is convertible into common stock on a one-for-ten basis.  

During the third quarter 2012, Entia issued 4,600 shares of Series A preferred stock for cash proceeds of $23,000.

During the second quarter 2012, Entia issued shares of Series A preferred stock for the following:

12,800 shares were issued for cash proceeds of $64,000.  The fair value of the common stock into which the Series A preferred stock is convertible exceeded the allocated purchase price of the Series A preferred stock by $21,139 on the date of issuance, resulting in a beneficial conversion feature.  Entia recognized the beneficial conversion feature as a one-time, non-cash deemed dividend to the holders of the Series A preferred stock on the date of issuance;

1,000 shares were issued in exchange for cancellation of a note payable totaling $10,000; and

7,000 shares valued at $35,000 were issued in exchange for consulting services provided.

During the first quarter 2012, 19,000 shares of Series A preferred stock were issued with a value of $95,000.

Common stock

During the third quarter of 2012, Entia’s board of directors agreed to a special price to current holders of warrants and/or options.  If they committed to exercising their warrants/options, Entia would allow them to convert at $0.40 per share.  This special price was effective only through July 31, 2012.  There were a total of 222,500 warrants exercised for proceeds of $89,000.  $30,000 was received in cash during third quarter 2012 with the remaining $59,000 was exercised by receiving short-term notes with interest ranging from 6% to 20% due before April 2013.  These notes are recorded on the balance sheet as a contra-equity account.  

During the second quarter of 2012, 50,000 shares of common stock valued at $50,000 were issued in exchange for a license agreement.

During the first quarter 2012, 666 shares of common stock were issued to two employees as compensation.  This stock had a fair market value of $400.

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Stock incentive plan

On September 17, 2010, our Board of Directors adopted the 2010 Stock Incentive Plan (“Plan”). The Plan provides for the grant of options to purchase shares of our common stock, and stock awards consisting of shares of our common stock, to eligible participants, including directors, executive officers, employees and consultants of the Company.  We have reserved 1,500,000 shares of common stock for issuance under the Plan with an annual increase in shares of 50,000 as of January 1 of each year; commencing January 1, 2012.  The fair value of the option grants were estimated at the date of the grants using the Black-Scholes option pricing model with the following assumptions: expected volatility of 233.73% - 248.63%, a risk free rate of 0.84% - 1.15%, and an expected life of 4 - 10 years for the period ended September 30, 2012.  

There were 103,513 authorized shares available under the Plan, and there were options to purchase 807,281 shares of stock exercisable, with a remaining contractual term of 10 years at September 30, 2012.  The weighted average grant date fair value of stock options granted during the quarter ended September 30, 2012 was $0.53.  The weighted average exercise price of stock options granted and exercisable is $0.56 on September 30, 2012.  The aggregate fair value of options vested on September 30, 2012 is $170,342.  Unvested options amounted to $263,227 at September 30, 2012 and there were 20,000 options forfeited with a value of $7,655, none exercised, or expired during the quarter ended September 30, 2012.

At September 30, 2012 there was $762,430 of aggregate intrinsic value of outstanding stock options, including $512,137 of aggregate intrinsic value of exercisable stock options.  Intrinsic value is the total pretax intrinsic value for all “in-the-money” options (i.e., the difference between the Company’s closing stock price on the last trading day of third quarter 2012 and the exercise price, multiplied by the number of shares) that would have been received by the option holders had all option holders exercised their options as of September 30, 2012.  This amount changes based on the fair market value of the Company’s stock.

The Company had $263,227 of total unrecognized compensation cost related to unvested stock options at September 30, 2012, which is expected to be recognized over a weighted average period of 7 years.

Warrants – Consulting Agreements

During the third quarter of 2012, Entia’s board of directors agreed to a special price to current holders of warrants and/or options.  If they committed to exercising their warrants/options, Entia would allow them to convert at $0.40 per share.  This special price was effective only through July 31, 2012.  There were a total of 222,500 warrants exercised for proceeds of $89,000.  $30,000 was received in cash during third quarter 2012 with the remaining $59,000 was exercised by receiving short-term notes with interest ranging from 6% to 20% due before April 2013.

During the second quarter 2012, we issued warrants to purchase 30,496 shares of common stock under agreements for consulting services and warrants to purchase 308,750 shares of common stock under debt agreements to raise capital.  These warrants have an exercise price ranging from $0.45 to $5.00 per share and have an average term of 5.75 years.

During first quarter 2012, we issued warrants to purchase 152 shares of common stock under agreements for consulting services.  These warrants have an exercise price of $5.00 per share and have a term of 7 years.

We use the Black-Scholes option-pricing model to determine the fair value of warrants on the date of grant.  In determining the fair value of warrants, we employed the following key assumptions during the periods ended September 30:

	2012	2011
Risk-Free interest rate	0.84% - 1.08%	1.27 - 2.80%
Expected dividend yield	0%	0%
Volatility	202.65% - 264.48%	183.17 - 187.30%
Expected life	5 - 7 years	4 - 10 years
Weighted-average Black-Scholes value of warrants granted	$0.56	$2.60

NOTE 10 - COMMITMENTS AND CONTINGENCIES

Leases

On April 4, 2012, Entia Biosciences, Inc. entered into a Commercial Lease agreement with Lanz Properties, LLC for 13,081 square feet of office and warehouse space located at 13565 S.W. Tualatin-Sherwood Road, Suite 800, Sherwood, Oregon 97140.  The

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new lease commences June 1, 2012 and will terminate on July 31, 2015.  No rent will be payable until October 2012.  The base monthly rental rate will start at $3,160, increasing to $3,260 in October 2013, and then $3,343 in June 2014.  

Entia’s prior two leases for 3,400 square feet at 14889 S.W. Tualatin-Sherwood Road #205, Sherwood, Oregon 97140, had a base monthly rent of $2,400 and ended on May 31, 2012.  Management believes that the new facility offers a better location and configuration for its biotechnology activities and provides significantly more space for manufacturing, fulfillment, and administration over the next three years.

Entia calculated the deferred rent amount related to the long-term lease agreement and determined that the amount to accrue would be immaterial to the financial statements, and thus, decided not to record or disclose this amount.

NOTE 11 – CONCENTRATIONS AND CREDIT RISK

Customers and Credit Concentrations

For the three months ending September 30, 2012, approximately 46.0% of our net sales were to four customers compared to approximately 50.9% for the three months ending September 30, 2011  For the nine months ending September 30, 2012, 52.6% of our net sales were to four customers compared to 48.7% at September 30, 2011.  As of September 30, 2012, accounts receivable for these customers accounted for approximately 68% of total accounts receivable as compared to 36% at December 31, 2011.

Vendor Concentrations

For the three months ending September 30, 2012, approximately 76.3% of our purchases were made from two vendors as compared to approximately 74.7% for the three months ending September 30, 2011. For the nine months ending September 30, 2012, 61.5% of our purchases were made from two vendors as compared to 71.3% for the nine months ending September 30, 2011.

NOTE 12 – SUBSEQUENT EVENTS

There have been no subsequent events as of the date of this filing.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Entia Biosciences, Inc. (also referred to as “Entia” or "the Company") is an emerging biotechnology company that has acquired the exclusive world-wide rights to the genetic transporter for Ergothioneine (Ergo), a powerful amino acid that Entia believes is essential to life.  Ergo cannot be synthesized by mammals but is acquired exclusively from the diet and carried by this unique and specific transporter (human gene symbol SLC22A4) to cells throughout the body.  Research studies started during 2011 by Entia have confirmed significant transporter activity in diabetes, arthritis and other serious non-communicable chronic conditions, suggesting an important physiologic roll for Ergo in diseases afflicting millions of people world-wide.

Initially discovered in the early 1900’s, Ergo is a little known antioxidant that is found in naturally high concentrations almost exclusively in mushrooms and other fungi.   Ergo is transferred directly from these sources into the soil where it is taken up by plants and grazing mammals.  For thousands of years, our hunter/gatherer genetics have relied on this process to help maintain adequate levels of Ergo in our blood to fight oxidative stress, DNA damaging free radical reactions, and the onset and progression of disease.   Entia theorizes that during the past century the introduction of modern agricultural practices (chemical fertilizers/insecticides and over tilling of the soil) have been gradually eradicating mushrooms from our farmland and depleting Ergo from the food supply.   During this same period, our dietary habits have been changing (chemical additives and heavily process foods) which Entia believes is further accelerating Ergo deficiency in the general population around the world and may explain the dramatic increase we are now seeing in diabetes, arthritis, neurodegenerative, and other debilitating diseases.  

Ergocalciferol (Vitamin D2) is another genetically-required nutrient found in naturally high concentrations in mushrooms.  Considered essential to life, Vitamin D is a powerful antioxidant that can be ingested from vegetation (D2) and/or synthesized by skin exposure to sunshine (D3) to maintain a healthy immune system and regulate cell differentiation and growth.   Recognized as a common factor in obesity, which affects more than 25% of the US population and 10% of total US medical spending, Vitamin D deficiency is now being linked with a growing number of serious conditions including diabetes, cancer, heart and bowel disease, mental illness, osteoporosis, and Multiple Sclerosis.  Health Canada estimated in 2010 that Vitamin D deficiency affects >85% of all Canadians and normalization could lower the death rate by 16.1% and economic burden by $14 billion/year.  Entia acquired the exclusive rights to technology in 2009 that dramatically increases Vitamin D2 levels in mushrooms using pulsed ultraviolet light, naturally boosting IUs/gram by more than 1000% within seconds.

Entia’s commercialization strategy for this technology is to develop and scientifically validate the benefits of proprietary medical food products, functional ingredients, nutritional supplements and other products containing Ergo and/or Vitamin D2.   Unlike Vitamin D, there are currently no commercially available diagnostic tests that can measure Ergo levels.  Entia believes that its commercialization strategy will be significantly enhanced if it can help to accelerate introduction of a cost effective method of baseline testing to determine deficiency levels in the general population and confirm the need for supplementation with the company’s medical food products.

The non-therapeutic market for consumer “wellness” (vitamins and nutritional supplements) is booming and expected to continue its healthy growth.  Nearly three-quarters of American adults report using dietary supplements, and the market is currently worth nearly $30 billion in the U.S.   Entia believes that the emerging therapeutic market for supplementation (medical foods and functional ingredients) could be much larger in the next decade as the benefits of the technology become more broadly understood and accepted.  The U.S. nutraceutical market is expected to be worth more than $4 billion by 2015, with compound annual growth of 8% from 2011 to 2015.  Additionally, the functional food and drink market is outpacing conventional food and drinks globally by about 4% per year.

Results of Operations for the Three and Nine Months ended September 30, 2012.

Revenues and Cost of Goods Sold:

	For the Three Months Ended September 30,			Change
	2012		2011	$	%
Revenues	$ 72,604		$ 108,566	$ (35,962)	-33.1%
Cost of Goods Sold	23,611		15,128	8,483	56.1%
	For the Nine Months Ended September 30,			Change
	2012	2011		$		%
Revenues	$ 263,255	$ 309,309		$ (46,054)		-14.9%
Cost of Goods Sold	$ 61,738	$ 100,744		$ (39,006)		-38.7%

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Revenues.  Revenues are generated primarily from the sale of our mushroom-based nutraceutical dietary supplement products.  The 33.1% decrease in revenues for the three months ending September 30, 2012 from 2011 was due to the mix of product sales and overall sales decrease during the periods presented.  The 14.9% decrease for nine months ended was due to the large decrease in revenues during the first and third quarter of 2012 as compared with the first and third quarter of 2011.

Cost of Goods Sold.   Cost of goods sold includes raw materials such as nutraceutical mushrooms, as well as production costs for manufacturing our supplement products.  Cost of goods sold for the three months ended September 30, 2012 increased from 2011 due to a more accurate costing system being implemented for our product during 2012.  The decrease in cost of goods sold for the nine months ending September 30, 2011 is due to increased efficiencies at producing product, inventory management and the ability to produce most of the product in-house instead of subcontracting it to third parties.

The following is a summary of certain consolidated statement of operations data for the periods:

Operating Expenses:

	For the Three Months Ended September 30,		Change
	2012	2011	$	%
Advertising & promotion expenses	$ 11,420	$ 11,419	$ 1	0.0%
Sales Commissions/consulting fees	40,206	45,057	(4,851)	-10.8%
Professional fees	33,717	60,986	(27,269)	-44.7%
General and Administrative expenses	193,676	101,318	92,358	91.2%
	For the Nine Months Ended September 30,		Change
	2012	2011	$	%
Advertising & promotion expenses	$ 20,862	$ 82,110	$ (61,248)	-74.6%
Sales Commissions/consulting fees	197,406	358,703	(161,297)	-45.0%
Professional fees	115,021	223,460	(108,439)	-48.5%
General and Administrative expenses	667,240	484,462	182,778	37.7%

Advertising and promotional expenses.  These costs include costs for promotional products, production fees for marketing materials, costs associated with fulfillment, fees for advertising programs such as ad placement fees, and postage fees for mailing marketing materials.  The decrease from 2011 is due to the decrease in advertising expense by using web-based options that occurred during third quarter 2011.  

Sales Commissions/Consulting fees.  These expenses are comprised of fees incurred by third-party consultants for the provision of administrative, information technology and marketing management services.  The decrease in these expenses from 2011 was due to the smaller amount of costs incurred to compensate third party consultants for services in third quarter 2012 and the reduction in sales persons within the company.  

Professional fees.  These expenses primarily include accounting/auditing fees, legal fees and stock transfer fees.  The decrease in professional fees from 2011 is due primarily to decrease legal and auditing fees in 2012.

General and administrative expenses.  These expenses primarily include compensation, costs related to travel, rent and utilities, insurance, depreciation, product development, payroll and bad debt.  The increase from 2011 is attributable to an increase in stock based compensation and the addition of employees during 2012.  In 2011, Entia had no employees, only consultants.

Inflation

Inflation has not had a significant impact in the current or prior periods.

Significant changes in the number of employees

As of September 30, 2012, we have seven employees, Marvin S. Hausman, M.D., our Chief Executive Officer, Devin Andres our Vice President, three other full and part-time employees and two paid interns.  As our operations expand we anticipate the need to hire additional employees, and contract with additional consultants; however, the exact number is not quantifiable at this time.

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Liquidity and Capital Resources

At September 30, 2012, cash totaled $14,698, compared to $16,639 at December 31, 2011.  The primary reasons for the net decrease in 2012 are described below.  Working capital was $(708,638) at September 30, 2012, compared to $(291,271) at December 31, 2011.  The change in working capital was due primarily to the maturity date of most of our debt and decrease in cash.  The net change in cash and cash equivalents for the periods presented was comprised of the following:

		For the Nine Months Ended September 30,
		2012	2011	Change
Net cash provided by (used in)
	Operating activities	$ (169,789)	$ (185,740)	$ 15,951
	Investing activities	(72,221)	(30,193)	(42,028)
	Financing activities	240,069	158,843	81,226

Operating Activities.  The increase in net cash flows used from operating activities was due primarily to a smaller net loss from operating activities and an increase in accounts payable and accrued expenses during the nine months ended September 30, 2012.

Investing Activities.  The increase in net cash flows used from investing activities was due primarily to acquisitions of patents and patents pending and purchase of fixed assets.

Financing Activities.  The increase in net cash flows from financing activities was due primarily to proceeds from the issuance of Series A Preferred Stock and proceeds from sales of common stock.  

Future Liquidity.  We have a history of incurring net losses and negative operating cash flows.  We are also deploying new technologies and continue to develop commercial products and services.  Based on our cash on hand, income from operations and the degree to which our burn rate can be reduced while continuing operations, management believes it has sufficient funds to remain operational through December 2012.

We expect our revenues to increase in the fourth quarter of 2012.  Notwithstanding, we anticipate generating losses in 2012 and therefore we may be unable to continue operations in the future.   In order for us to continue as a going concern and ultimately to achieve profitability, we may be required to obtain capital from external sources, increase revenues and reduce operating costs.  We have successfully negotiated an extension on all of our debt that was maturing on June 30, 2012 for one year.  We will require additional capital of at least approximately $392,500 to repay debt maturing on June 30, 2013 and we intend to raise the monies by undertaking one or more equity private placements.  We may also pursue re-negotiation and re-structuring of the debt.  However, there can be no assurances that our operations will become profitable or that external sources of financing, including the issuance of debt and/or equity securities, will be available at times and at terms acceptable to us, or at all.  The issuance of additional equity or convertible debt securities will also cause dilution to our shareholders.  If external financing sources are not available or are inadequate to fund our operations, we will be required to reduce operating costs, which could jeopardize our future strategic initiatives and business plans.  For example, a reduction in operating costs could jeopardize our ability to launch, market, and sell new nutraceutical supplement products necessary to grow and sustain our operations.  

Subsequent Events

There have been no subsequent events as of the date of this filing.

Going Concern

We have a history of incurring net losses and net operating cash flow deficits.  We are also developing new technologies related to our organic nutraceutical products.  At September 30, 2012, we had cash and cash equivalents of $14,698.  These conditions raise substantial doubt about our ability to continue as a going concern.  As a result, we anticipate that our cash and cash equivalent balances, anticipated cash flows from operations and anticipated operating cash flows will be sufficient to meet our cash requirements through December 2012.

In order for us to continue as a going concern beyond this point and ultimately to achieve profitability, we may be required to obtain capital from external sources, increase revenues and reduce operating costs.  The issuance of equity securities will also cause dilution to our shareholders.  If external financing sources of financing are not available or are inadequate to fund our operations, we will

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be required to reduce operating costs including personnel costs, which could jeopardize our future strategic initiatives and business plans.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Critical Accounting Policies and Estimates

Revenue Recognition:  We recognize revenue from product sales once all of the following criteria for revenue recognition have been met: pervasive evidence that an agreement exists; the services have been rendered; the fee is fixed and determinable and not subject to refund or adjustment; and collection of the amount due is reasonable assured.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Not applicable.

Item 4.  Controls and Procedures

Evaluation of Disclosure Controls and Procedures

In connection with the preparation of this Quarterly Report on Form 10-Q, an evaluation was carried out by our management, with the participation of our Chief Executive Officer who is also our principal financial and accounting officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of June 30, 2012.  Based on that evaluation, our principal executive officer and principal financial officer concluded that the material weaknesses identified in our management report on internal controls and procedures contained in our Form 10-K for the fiscal year ended December 31, 2011, Item 9A filed on March 30, 2012 still exist, and therefore our disclosure controls and procedures were not effective as of September 30, 2012.

Changes in Internal Control Over Financial Reporting

As of September 30, 2012, there have been no changes in internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) during the quarter ended September 30, 2012, that materially affected, or are reasonably likely to materially affect, our company’s internal control over financial reporting.

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Part II.OTHER INFORMATION

Item 1.  Legal Proceedings

From time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business.  However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.

We are not presently a party to any material litigation, nor to the knowledge of management is any litigation threatened against us, which may materially affect us.

Item 1A.  Risk Factors

See Risk Factors set forth in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2011, and the discussion above in Part I, Item 2, under " Liquidity and Capital Resources.”

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds 

We have undertaken a private placement of convertible preferred stock for $1.5 million.  During the third quarter 2012, 4,600 shares of preferred stock were issued with a value of $23,000 for cash.  During the second quarter 2012, 6,800 shares of preferred stock were issued with a value of $34,000 for cash.  10,000 shares of preferred stock were issued with a value of $50,000 for extinguishment of a $10,000 note, for services valued at $35,000 and $5,000 cash.  In addition, 5,000 shares were issued for cash from a related party.  Each preferred share is convertible into 10 shares of common stock.  The issuance of the preferred shares was exempt from registration based on Regulation D, Rule 506 and Section 4(2) and under the Securities Act.

Item 3.  Defaults Upon Senior Securities

None.

Item 4.  Mine Safety Disclosures

Not Applicable.

Item 5.  Other Information

None.

Item 6.  Exhibits 

Exhibit Number	Description of Exhibit	Filed Herewith	Form	Exhibit	Filing Date
3.1	Amended and Restated Articles of Incorporation of Registrant		8-K	3.1	10/29/2010
3.2	Amended and Restated Bylaws of Registrant		8-K	3.2	09/22/2010
3.3	Amended Articles of Merger Incorporation as currently in effect		8-K	3.3	10/13/2008
10.1	Exclusive Option Agreement dated May 1, 2006, between The Penn State Research Foundation and Northwest Medical Research Inc.		8-K	10.1	09/04/2008
10.2	Assignment Agreement to the Option Agreement, dated July 31, 2008, among The Penn State Research Foundation, Northwest Medical Research Inc. and Generic Marketing Services, Inc.		8-K	10.2	09/04/2008
10.3	Assignment and Assumption Agreement, dated July 31, 2008, between Northwest Medical Research Inc. and Generic Marketing Services, Inc.		8-K	10.3	09/04/2008
10.4	Form of Common Stock and Warrant Purchase Agreement		8-K	10.1	06/12/2009
10.5	Form of Securities Purchase Agreement		8-K	10.1	09/21/2009

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10.6	$50,000 Promissory Note between TNS and Marvin S. Hausman, M.D. and Philip Sobol dated December 30, 2009		8-K	10.1	12/31/2010
10.7	$100,000 Promissory Note between TNS and Larry A. Johnson dated January 12, 2010		8-K	10.1	2/24/2010
10.8	$100,000 Promissory Note between TNS and Mark C. Wolf dated February 18, 2010		8-K	10.2	2/24/2010
10.9	$50,000 Promissory Note between TNS and Mark C. Wolf dated February 18, 2010		10-K	10.9	4/15/2010
10.10	Profit Sharing Agreement between TNS, American Charter & Marketing LLC, and Delta Group Investments, Limited dated March 26, 2010		10-K	10.10	4/15/2010
10.11	Form of Common Stock and Warrant Agreement 2010		8-K	10.1	12/20/2010
10.12	$312,500 Promissory Note between TNS and Delta Group Investments Limited dated January 26, 2011		8-K	10.2	2/22/2010
10.13	Termination of Profit Sharing Agreement dated February 21, 2011		8-K	10.1	2/22/2011
10.14	Lease Agreement between TNS and Sherwood Venture LLC dated March 15, 2011		8-K	10.1	4/6/2011
10.15	Form of Warrant A Agreement 2010		8-K	10.2	12/22/2010
10.16	Form of Warrant B Agreement 2010		8-K	10.3	12/22/2010
10.15	Form of Warrant A Agreement 2010		8-K	10.2	12/22/2010
10.16	Form of Warrant B Agreement 2010		8-K	10.3	12/22/2010
10.17	Asset Purchase Agreement between TNS, FunGuys, LLC and Mark C. Wolf dated May 27, 2011		8-K	10.1	3/3/2011
10.18	Certificate of Designation of Preferences, Rights and Limitations of the Series A Preferred Stock of Total Nutraceutical Solutions, Inc. dated May 26, 2011.		8-K	10.3	3/3/2011
10.19	Employment Agreement between Marvin S. Hausman, M.D. and Total Nutraceutical Solutions, Inc. dated October 28, 2011.		8-K	10.1	11/2/2011
10.20	Employment Agreement between Devin Andres and Total Nutraceutical Solutions, Inc. dated October 28, 2011.		8-K	10.2	11/2/2011
32.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer).	X
32.2	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer).	X

21

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.

	Entia Biosciences, Inc.
November 14, 2012	By:	/s/ Marvin Hausman, M.D.
		Marvin Hausman, M.D. Chief Executive Officer (Principal Executive Officer and Acting Principal Financial and Accounting Officer)

22

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Marvin S. Hausman, M.D., Chief Executive Officer of Entia Biosciences, Inc., certify that:

1.

I have reviewed this Quarterly Report on Form 10-Q of Entia Biosciences, Inc;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.

I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:  November 14, 2012	By:  /s/ Marvin S. Hausman, M.D.
	Marvin S. Hausman, M.D.
	President and Chief Executive Officer      Acting Chief Financial Officer

EX-31.2

Exhibit 31.2 Certification   

EX-32.1

Exhibit 32.1 Certification   

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Entia Biosciences, Inc. (the “Company”) for the quarter ended September 30, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Marvin S. Hausman, M.D., Acting Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:  November 14, 2012	By:  /s/ Marvin S. Hausman, M.D.
	Marvin S. Hausman, M.D.
	President and Chief Executive Officer      Acting Chief Financial Officer

This certification accompanies each Report pursuant to § 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of §18 of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

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NOTE 8 - RELATED PARTY TRANSACTIONS (Details Narrative) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	May 17, 2012
Notes to Financial Statements
Expense for consulting by affiliate	$ 0	$ 30,000	$ 0	$ 90,000
Interest on related party note					6.00%
Related party note					$ 25,000

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NOTE 5 - PATENTS AND LICENSES, NET - PATENTS AND LICENSES (Details) (USD $)	Sep. 30, 2012	Dec. 31, 2011
Long-Lived Intangible Assets
Gross carrying amounts-patents and licenses	$ 174,238	$ 116,924
Accumulated amortization	(4,634)	(2,251)
Patents and Licenses, net	$ 169,604	$ 114,673

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NOTE 7 - NOTES PAYABLE (Tables)

9 Months Ended

Sep. 30, 2012

Debt Disclosure [Abstract]

Notes Payable

	September 30, 2012	December 31, 2011
Notes payable - current
4.85%, unsecured, due monthly	415	20,664
7.85% unsecured, due monthly	2,812	2,493
	$                  3,227	$              23,157
Convertible notes payable, net
5% unsecured due June 2013 (net of discount related to beneficial conversion feature of $0 in 2012 and $5,143 in 2011), convertible into preferred stock at $5.00 per share	$               15,000	$                9,857
5%, unsecured due June 2013  (net of discount related to beneficial conversion feature of $35,807 in 2012 and $127,701 in 2011), convertible into common stock at $0.45 per share	276,693	184,799
6% unsecured due June 2013 (net of discount related to beneficial conversion feature of $6,416 in 2012 and $0 in 2011), convertible into preferred stock at $5.00 per share	6,584
5% unsecured due June 2013, convertible into preferred stock at $5.00  per share	15,000	15,000
6% unsecured, convertible into common stock at $2.00 per share, due on demand	50,000	50,000
Less:  Current Portion	(363,277)	(194,656)
	$                           -	$              65,000
Convertible notes payable related party, net
6% unsecured due December 2013 (net of discount related to beneficial conversion feature of $14,530 in 2012 and $0 in 2011), convertible into common stock at $2.00 per share	$               60,470	$              50,000

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NOTE 10 - COMMITMENTS AND CONTINGENCIES (Details Narrative) (USD $)	1 Months Ended		8 Months Ended	12 Months Ended	14 Months Ended
	Jun. 30, 2012 sqft	May 31, 2012 sqft	May 31, 2014	Sep. 30, 2013	Jul. 31, 2015
Notes to Financial Statements
Square feet of leased office and warehouse space	13,081	3,400
Monthly rental rate of office space		$ 2,400	$ 3,260	$ 3,160	$ 3,343
Period of office lease	3 years

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NOTE 7 - NOTES PAYABLE (Details) (USD $)	Sep. 30, 2012	Dec. 31, 2011
Notes payable - current, 7.85% unsecured, due monthly
Notes payable	$ 2,812	$ 2,493
Notes payable - current, 4.85% unsecured, due monthly
Notes payable	415	20,664
Notes Payable Current Total
Notes payable	3,227	23,157
Convertible Notes payable, net - 5% unsecured due June 2013 (net of discount related to beneficial conversion feature of $0 in 2012 and $5,143 in 2011), convertible into preferred stock at $5.00 per share
Notes payable	15,000	9,857
Convertible Notes payable, net - 5%, unsecured note due June 2013 (net of discount related to beneficial conversion feature of $74,870 in 2012 and $127,701 in 2011), convertible into common stock at $0.45 per share
Notes payable	237,630	184,799
Convertible Notes - 6% Unsecured Convertible To Preferred Shares Member
Notes payable	6,584	0
Convertible Notes payable, net - 5% unsecured due June 2013, convertible into preferred stock at $5.00 per share
Notes payable	15,000	15,000
Convertible Notes Payable Current 6% Unsecured Convertible Member
Notes payable	50,000	50,000
Less: Current Portion
Notes payable	(363,277)	(194,656)
Convertible Notes Payable Net Total
Notes payable	0	65,000
Convertible Notes payable related party, net - 6% unsecured due December 2013 convertible into common stock at $2.00 per share
Notes payable	$ 60,470	$ 50,000

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NOTE 3 - INVENTORY

9 Months Ended

Sep. 30, 2012

Inventory Disclosure [Abstract]

NOTE 3 - INVENTORY

NOTE 3 – INVENTORY

Inventory consists of the following:

	September 30, 2012	December 31, 2011
Raw materials	$            278,797	$            294,036
Finished goods	7,439	7,115
	286,236	301,151
Less:  reserve for excess and obsolete inventory	(127,573)	(127,573)
	$            158,663	$            173,578

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NOTE 11 - CONCENTRATIONS AND CREDIT RISK (Details Narrative)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Notes to Financial Statements
Net sales to four customers	46.00%	50.90%	52.60%	48.70%
Number of customers that made up customer concentration	4	4	4	4
Accounts receivable percentage of four specific customers	68.00%		68.00%		36.00%
Percent of purchases from one vendor	7630.00%	7470.00%	6150.00%	7130.00%
Number of vendors that made up vendor concentration	2	2	2	2

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - NET LOSS PER COMMON SHARE (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Reconciliation Of Basic Loss Per Share And Excluded Dilutive Securities
Numerator: Net loss applicable to common shareholders	$ (280,769)	$ (200,793)	$ (996,002)	$ (1,094,903)
Denominator: Weighted-average common shares outstanding	7,209,206	6,197,676	7,190,229	6,149,050
Basic and diluted net loss per share	$ (0.04)	$ (0.03)	$ (0.14)	$ (0.18)
Common stock warrants	2,758,266	1,689,747	2,464,471	1,689,747
Series A convertible preferred stock	889,000	415,000	843,000	415,000
Stock options	658,240	0	591,179	0
Convertible debt including interest	400,025	537,865	395,624	537,865
Excluded dilutive securities	4,705,531	2,642,612	4,294,274	2,642,612

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NOTE 2 - ESTIMATED USEFUL LIVES OF THE ASSETS (Details)	Sep. 30, 2012
Notes to Financial Statements
Estimated useful life of office equipment	3 years
Minimum estimated useful life of production equipment	5 years
Maximum estimated useful life of production equipment	7 years
Minimum estimated useful life of equipment under capital lease	5 years
Maximum estimated useful life of equipment under capital lease	7 years
Domestic patent life minimum (in years)	15 years
Domestic patent life maximum (in years)	20 years
Foreign patent life minimum (in years)	5 years
Foreign patent life maximum (in years)	20 years

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) (USD $)	Sep. 30, 2012	Dec. 31, 2011
Notes to Financial Statements
Allowance for doubtful accounts	$ 2,526	$ 2,526

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NOTE 3 - INVENTORY - INVENTORY (Details) (USD $)	Sep. 30, 2012	Dec. 31, 2011
Inventory
Raw materials	$ 278,797	$ 294,036
Finished goods	7,439	7,115
Inventory gross	286,236	301,151
Less: reserve for excess and obsolete inventory	(127,573)	(127,573)
Inventory net	$ 158,663	$ 173,578

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2012

Accounting Policies [Abstract]

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation and principles of consolidation

The accompanying consolidated unaudited interim financial statements and related notes have been prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP) for interim financial information, and with the rules and regulations of the United states Securities and Exchange Commission (“SEC”) to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Unaudited interim results are not necessarily indicative of the results for the full year. These unaudited interim financial statements should be read in conjunction with the financial statements of the Company for the year ended December 31, 2011 and notes thereto contained in the Company’s Annual Report on Form 10-K filed with the SEC.

Investments for which we possess the power to direct or cause the direction of the management and policies, either through majority ownership or other means, are accounted for under the consolidation method. The consolidated financial statements include the accounts of Entia and TNS. All intercompany accounts have been eliminated for the purpose of the consolidated financial statement presentation.

Use of estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash

We consider all highly liquid, short-term investments with original maturities of three months or less when purchased to be cash equivalents.

Accounts receivable

Accounts receivable are recorded at the invoiced amount, net of allowance for doubtful accounts. The allowance for doubtful accounts is our best estimate of the amount of probable credit losses based on specific identification of accounts in our existing accounts receivable. Outstanding account balances are reviewed individually for collectibility. We determine the allowance based on historical write-off experience, customer specific facts and economic conditions. Bad debt expense is included in general and administrative expenses, if any. We consider all accounts greater than 30 days old to be past due. Account balances are charged off against allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The allowance for doubtful accounts was $2,526 and $2,526 at September 30, 2012 and December 31, 2011, respectively.

Inventory

Inventory, which consists primarily of raw materials to be used in the production of our dietary supplement products, is stated at the lower of cost or market using the first-in, first-out method. We regularly review our inventory on hand and, when necessary, record a provision for excess or obsolete inventory.

Property and equipment

Property and equipment are recorded at cost. Additions and improvements that increase the value or extend the life of an asset are capitalized. Maintenance and repairs are expensed as incurred. Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the consolidated statement of operations. Depreciation is computed on a straight-line basis over the following estimated useful lives of the assets:

Office equipment	3 years
Production equipment	5 to 7 years
Equipment under capital lease	5 to 7 years
Leasehold improvements	Lesser of lease term or useful life of improvement

Patents

Patents, once issued or purchased, are amortized using the straight-line method over their economic remaining useful lives. All internally developed process costs incurred to the point when a patent application is to be filed are expensed as incurred and classified as research and development costs. Patent application costs, generally legal costs, are capitalized pending disposition of the individual patent application, and are subsequently either amortized based on the initial patent life granted, generally 15 to 20 years for domestic patents and 5 to 20 years for foreign patents, or expensed if the patent application is rejected. The costs of defending and maintaining patents are expensed as incurred. Upon becoming fully amortized, the related cost and accumulated amortization are removed from the accounts.

Impairment of long-lived assets

Our long-lived assets, which include property and equipment, patents and licenses of patents, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

We assess the recoverability of our long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.

Discount on convertible notes payable

We allocate the proceeds received from convertible notes between convertible notes payable and warrants, if applicable. The resulting discount for warrants is amortized using the effective interest method over the life of the debt instrument. After allocating a portion of the proceeds to the warrants, the effective conversion price of the convertible note payable can be determined. If the effective conversion price is lower than the market price at the date of issuance, a beneficial conversion feature is recorded as an additional discount to the convertible note payable. The beneficial conversion feature discount is amortized using the effective interest method over the life of the debt instrument. The amortization is recorded as interest expense on the consolidated statement of operations.

Fair value of financial instruments

The carrying amounts of our financial assets and liabilities, such as cash, accounts receivable and accounts payable, approximate their fair values because of the short maturity of these instruments. Due to conversion features and other terms, it is not practical to estimate the fair value of notes payable and convertible notes.

Fair value measurements

We measure fair value as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. We utilize a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1	Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
Level 2	Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
Level 3	Unobservable inputs where there is little or no market data, which require the reporting entity to develop its own assumptions.

We do not have any assets or liabilities measured at fair value on a recurring or a non-recurring basis. Consequently, we did not have any fair value adjustments for assets and liabilities measured at fair value at September 30, 2012 or December 31, 2011, nor any gains or losses reported in the consolidated statement of operations that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date for the periods ended September 30, 2012 and December 31, 2011.

Revenue recognition

We recognize revenue when (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been performed, (iii) amounts are fixed or determinable and (iv) collectibility of amounts is reasonably assured.

Revenues from the sale of products, including shipping and handling fees but excluding statutory taxes collected from customers, as applicable, are recognized when shipment has occurred. We sell our products directly to customers. Persuasive evidence of an arrangement is demonstrated via order and invoice, product delivery is evidenced by a bill of lading from the third party carrier and title transfers upon shipment, the sales price to the customer is fixed upon acceptance of the order and there is no separate sales rebate, discount, or volume incentive.

Shipping and handling costs

Amounts charged to customers for shipping products are included in revenues and the related costs are classified in cost of goods sold as incurred.

Advertising and promotion costs

Costs associated with the advertising and promotion of our products are expensed as incurred.

Equity instruments issued to parties other than employees for acquiring goods or services

We account for all transactions in which goods or services are the consideration received for the issuance of equity instruments based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will occur. Currently such transactions are primarily awards of warrants to purchase common stock.

The fair value of each warrant award is estimated on the date of grant using a Black-Scholes option-pricing valuation model.

The assumptions used to determine the fair value of our warrants are as follows:

The expected life of warrants issued represents the period of time the warrants are expected to be outstanding.

The expected volatility is generally based on the historical volatility of comparable companies’ stock over the contractual life of the warrant.

The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods within the contractual life of the warrant.

The expected dividend yield is based on our current dividend yield as the best estimate of projected dividend yield for periods within the contractual life of the warrant.

Income taxes

We recognize 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 based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in our consolidated statements of income in the period that includes the enactment date.

We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in our consolidated financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Should they occur, our policy is to classify interest and penalties related to tax positions as income tax expense.

Net loss per common share

Basic and diluted net loss per share has been computed by dividing our net loss by the weighted average number of common shares issued and outstanding. Convertible preferred stock, options and warrants to purchase our common stock as well as debt which are convertible into common stock are anti-dilutive and therefore are not included in the determination of the diluted net loss per share for three months ending September 30, 2012 and 2011 and the nine months ending September 30, 2012 and 2011. The following table presents a reconciliation of basic loss per share and excluded dilutive securities:

	For the Three Months Ended September 30,		For the Nine Months Ended September 30,
	2012	2011	2012	2011
Numerator:
Net loss applicable to common shareholders	$    (280,769)	$   (200,793)	$    (996,002)	$   (1,094,903)
Denominator:
Weighted-average common shares outstanding	7,209,206	6,197,676	7,190,229	6,149,050
Basic and diluted net loss per share	$          (0.04)	$         (0.03)	$          (0.14)	$            (0.18)
Common stock warrants	2,758,266	1,689,747	2,464,471	1,689,747
Series A convertible preferred stock	889,000	415,000	843,000	415,000
Stock options	658,240	-	591,179	-
Convertible debt including interest	400,025	537,865	395,624	537,865
Excluded dilutive securities	4,705,531	2,642,612	4,294,274	2,642,612

Reclassifications 

Certain reclassifications have been made to prior period financial statements and footnotes in order to conform to the current period's presentation.

Segments

We have determined that we operate in one segment for financial reporting purposes.

Recently issued accounting pronouncements

Management does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.

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NOTE 4 - PROPERTY AND EQUIPMENT - PROPERTY AND EQUIPMENT (Details) (USD $)	Sep. 30, 2012	Dec. 31, 2011
Property and Equipment
Office equipment	$ 24,584	$ 23,072
Production equipment	37,984	30,964
Leasehold improvements	13,946	2,192
Property and Equipment Gross	76,514	56,228
Less: accumulated depreciation	(38,287)	(24,382)
Property and Equipment Net	$ 38,227	$ 31,846

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NOTE 9 - STOCKHOLDERS' EQUITY (DEFICIT) - BLACK-SCHOLES OPTION-PRICING MODEL ASSUMPTIONS (Details) (USD $)	3 Months Ended	9 Months Ended
	Mar. 31, 2012	Sep. 30, 2012 OptionMember	Sep. 30, 2012 WarrantMember	Sep. 30, 2011 WarrantMember
Risk-Free interest rate, minimum	1.27%	0.84%	0.84%	1.27%
Risk-Free interest rate, maximum	2.80%	1.15%	1.08%	2.80%
Expected dividend yield			0.00%	0.00%
Volatility, minimum	183.17%	233.73%	202.65%	183.17%
Volatility, maximum	187.30%	248.63%	264.48%	187.30%
Expected life, minimum	4 years	4 years	5 years	4 years
Expected life, maximum	10 years	10 years	7 years	10 years
Weighted-average Black-Scholes value of warrants granted			$ 0.56	$ 2.60

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CONSOLIDATED BALANCE SHEETS (USD $)	Sep. 30, 2012	Dec. 31, 2011
Current Assets:
Cash	$ 14,698	$ 16,639
Accounts receivable, net	26,580	36,273
Inventory, net	158,663	173,578
Prepaid expenses	9,967	31,891
Total Current Assets	209,908	258,381
Property and Equipment, net	38,227	31,846
Patents and license, net	169,604	114,673
Total Assets	417,739	404,900
Current Liabilities:
Accounts payable and accrued expenses	549,234	331,839
Short-term convertible notes payable, net of discount	363,277	194,656
Capital lease payable	2,808	0
Notes payable	3,227	23,157
Total Current Liabilities	918,546	549,652
Long Term Liabilities:
Capital lease payable	2,573	0
Convertible notes payable, net of discount-related party	60,470	50,000
Convertible notes payable, net of discount	0	65,000
Total Long Term Liabilities	63,043	115,000
Total Liabilities	981,589	664,652
Stockholders' Equity (Deficit):
Preferred stock, $.001 par value, 5,000,000 shares authorized, Series A preferred stock, 350,000 and 350,000 shares designated, respectively, 88,900 and 43,500 shares issued and outstanding, resepecively, aggregate liquidation value of $444,500 and $217,500, respectively	89	44
Common stock, $.001 par value, 150,000,000 shares authorized, 7,444,341 and 7,171,175 shares issued and outstanding, respectively	7,444	7,171
Stock subscription receivable	(59,000)	0
Additional paid-in capital	4,903,491	4,272,792
Deferred compensation	(377,496)	(497,383)
Accumulated deficit	(5,038,378)	(4,042,376)
Total Stockholders' Equity (Deficit)	(563,850)	(259,752)
Total Liabilities and Stockholders' Equity (Deficit)	$ 417,739	$ 404,900

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (974,602)	$ (1,094,903)
Adjustments to reconcile net loss to net cash used in operating activities:
Gain on disposal of product line	0	(78,842)
Bad debt expense	0	2,059
Depreciation/amortization	16,290	11,009
Gain on extinguishment of note payable	(75,315)	0
Impairment of intangible asset	0	106,642
Amortization of discount on convertible notes	179,110	222,933
Stock-based compensation	420,801	467,131
Changes in operating assets and liabilities:
Accounts receivable	9,693	(11,433)
Inventory	14,915	(23,501)
Prepaid expenses	21,924	24,930
Other current assets	0	3,792
Accounts payable and accrued expenses	217,395	95,045
Accrued compensation - officer	0	89,398
NET CASH USED IN OPERATING ACTIVITIES	(169,789)	(185,740)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(14,906)	(3,708)
Acquisition of patents and patents pending	(57,315)	(34,789)
Collections on lease receivable	0	8,304
NET CASH USED IN INVESTING ACTIVITIES	(72,221)	(30,193)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock, preferred stock and warrants	211,999	143,200
Proceeds from convertible notes payable	13,000	0
Proceeds from notes payable	0	26,438
Proceeds from convertible note payable-related party	25,000	0
Repayment of note payable	(9,930)	(10,795)
NET CASH PROVIDED BY FINANCING ACTIVITIES	240,069	158,843
NET CHANGE IN CASH	(1,941)	(57,090)
Cash at beginning of period	16,639	65,061
Cash at end of period	14,698	7,971
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
Interest paid	893	1,674
Taxes paid	0	0
SUPPLEMENTAL DISCLOSURE OF NONCASH FLOWS FINANCING AND INVESTING ACTIVITIES:
Deemed distribution	21,400	0
Conversion of notes payable to preferred stock	10,000	107,500
Warrants issued for extinguishment of debt	48,533	100,000
Stock issued for license	25,501	0
Stock issued for note receivable	59,000	0
Warrants issued in connection with notes payable	$ 27,704	$ 0

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NOTE 6 - CAPITAL LEASE - FUTURE MINIMUM LEASE PAYMENTS UNDER CAPITAL LEASES (Details) (USD $)	12 Months Ended			33 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2014
Notes to Financial Statements
Future minimum lease payments	$ 1,871	$ 2,808	$ 702	$ 5,381

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NOTE 4 - PROPERTY AND EQUIPMENT (Tables)

9 Months Ended

Sep. 30, 2012

Property, Plant and Equipment [Abstract]

Property and Equipment

	September 30, 2012	December 31, 2011
Office equipment	$              24,584	$              23,072
Production equipment	37,984	30,964
Leasehold improvements	13,946	2,192
	76,514	56,228
Less:  accumulated depreciation	(38,287)	(24,382)
	$              38,227	$              31,846

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NOTE 6 - CAPITAL LEASE (Details Narrative) (USD $)	Apr. 01, 2012
Notes to Financial Statements
Capital lease agreement	$ 7,021
Capital lease period	30 years
Interest on capital lease	0.00%

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NOTE 6 - CAPITAL LEASE (Tables)

9 Months Ended

Sep. 30, 2012

Accounting Policies [Abstract]

Future Minimum Lease Payments Under Capital Leases

Years ending December 31:
2012	$            702
2013	$         2,808
2014	$         1,871
Total minimum lease payments	$         5,381

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NOTE 1 - ORGANIZATION AND OPERATIONS

9 Months Ended

Sep. 30, 2012

Accounting Policies [Abstract]

NOTE 1 - ORGANIZATION AND OPERATIONS

NOTE 1 – ORGANIZATION AND OPERATIONS

Generic Marketing Services, Inc. was incorporated on July 19, 2007 under the laws of the State of Nevada as a subsidiary of Basic Services, Inc., also a Nevada corporation. On December 31, 2007, Basic Services, Inc. spun off Generic Marketing Services and on October 8, 2008, Generic Marketing Services changed its name to Total Nutraceutical Solutions, Inc. On January 9, 2012, the Nevada Secretary of State accepted an amendment to our Articles of Incorporation to change the name again to Entia Biosciences, Inc. (Entia, the Company, us, we or our) and to form a wholly owned subsidiary named Total Nutraceutical Solutions, Inc. (TNS) Entia is an emerging biotechnology company engaged in the discovery, formulation and marketing of natural compounds and whole foods that can be used in branded medical foods, nutraceuticals, cosmetics and other products sold by us, our TNS subsidiary and by third parties.

On February 15, 2012 a 10:1 reverse stock split became effective after we received authorization from Financial Industry Regulatory Authority (FINRA) for the corporate action that was approved by the shareholders on December 19, 2011.

On May 15, 2012, Entia moved from its current location to a larger building in order to increase its in-house research and manufacturing capability, increase its warehouse storage capacity, and accommodate anticipated increases in order fulfillment and staffing. By moving to the larger facility, Entia was able to vertically integrate its Vitamin D enhancement technology and the milling, blending, encapsulating, bottling, labeling, packaging and fulfillment of its products. This move resulted in a significant improvement in production efficiencies and the cost of its final products. Production of cosmetic products and certain nutraceuticals are still being outsourced.

We have a history of incurring net losses and net operating cash flow deficits. We are continually researching and developing new technologies related to our organic nutraceutical products, including the production of medical foods for clinical studies in diabetes, anemia and Parkinson’s disease. At September 30, 2012, we had cash and cash equivalents of $14,698. These conditions raise substantial doubt about our ability to continue as a going concern. As a result, we anticipate that our cash and cash equivalent balances, anticipated cash flows from operations and anticipated operating cash flows will be sufficient to meet our cash requirements through December 2012.

In order for us to continue as a going concern beyond this point and ultimately to achieve profitability, we may be required to obtain capital from external sources, increase revenues and reduce operating costs. The issuance of equity securities will also cause dilution to our shareholders. If external financing sources of financing are not available or are inadequate to fund our operations, we will be required to reduce operating costs including personnel costs, which could jeopardize our future strategic initiatives and business plans. The accompanying consolidated financial statements have been prepared assuming that the company continues as a going concern.

The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the matters discussed herein.

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Sep. 30, 2012	Dec. 31, 2011
Preferred Stock
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, authorized	5,000,000	5,000,000
Preferred stock Series A, designated	350,000	350,000
Preferred stock, issued	88,900	43,500
Preferred stock, aggregate liquidation value	$ 444,500	$ 217,500
Common Stock
Common Stock, par value	$ 0.001	$ 0.001
Common stock, authorized	150,000,000	150,000,000
Common stock, Issued	7,444,341	7,171,175

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NOTE 11 - CONCENTRATIONS AND CREDIT RISK

9 Months Ended

Sep. 30, 2012

Notes to Financial Statements

NOTE 11 - CONCENTRATIONS AND CREDIT RISK

NOTE 11 – CONCENTRATIONS AND CREDIT RISK

Customers and Credit Concentrations

For the three months ending September 30, 2012, approximately 46.0% of our net sales were to four customers compared to approximately 50.9% for the three months ending September 30, 2011 For the nine months ending September 30, 2012, 52.6% of our net sales were to four customers compared to 48.7% at September 30, 2011. As of September 30, 2012, accounts receivable for these customers accounted for approximately 68% of total accounts receivable as compared to 36% at December 31, 2011.

Vendor Concentrations

For the three months ending September 30, 2012, approximately 76.3% of our purchases were made from two vendors as compared to approximately 74.7% for the three months ending September 30, 2011. For the nine months ending September 30, 2012, 61.5% of our purchases were made from two vendors as compared to 71.3% for the nine months ending September 30, 2011.

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Document and Entity Information	9 Months Ended
	Sep. 30, 2012	Nov. 15, 2012
Document And Entity Information
Entity Registrant Name	Entia Biosciences, Inc.
Entity Central Index Key	0001408299
Document Type	10-Q
Document Period End Date	Sep. 30, 2012
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		7,221,841
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2012

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NOTE 12 - SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2012

Subsequent Events [Abstract]

NOTE 12 - SUBSEQUENT EVENTS

NOTE 12 – SUBSEQUENT EVENTS

On June 29, 2012 the board of directors of Entia approved a “Warrant & Option Holders Special Exercise Incentive” program in order to raise capital. The program allowed existing warrant and option holders on record as of June 1, 2012 to exercise their warrants (vested and unvested) through the month of July 2012 for $0.40 per share. For all holders who exercise a portion of their warrants/options, an equivalent number of remaining warrants/options would be extended for one year beyond their original expiration date at their original exercise price. During the month of July, warrant holders exercised warrants to purchase 50,000 shares for $20,000 cash and warrants to purchase 147,500 shares for $59,000 in promissory notes. The promissory notes are for six months, maturing January 26, 2013 and carry interest rates of up to 10% semi-annually and no less than 6% annually.

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CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
REVENUES
REVENUES	$ 72,604	$ 108,566	$ 263,255	$ 309,309
COST OF GOODS SOLD	23,611	15,128	61,738	100,744
GROSS PROFIT	48,993	93,438	201,517	208,564
OPERATING EXPENSES
Advertising and promotion	11,420	11,419	20,862	82,110
Sales commissions	1,839	0	5,164	0
Consulting fees - officer	0	30,000	0	90,000
Professional fees	33,717	30,986	115,021	133,460
Consulting fees	38,367	45,057	192,242	358,703
Impairment of intangible asset	0	0	0	106,642
General and administrative	193,676	101,318	667,240	377,820
Total Operating Expenses	279,019	218,780	1,000,529	1,148,735
LOSS FROM OPERATIONS	(230,026)	(125,343)	(799,012)	(940,171)
OTHER (INCOME) EXPENSE
Interest income	0	0	0	192
Interest expense	(50,743)	(75,451)	(250,905)	(233,766)
Gain on extinguishment of debt	0	0	75,315	0
Gain on disposal of product line	0	0	0	78,842
Total Other Expense	(50,743)	(75,451)	(175,590)	(154,732)
LOSS BEFORE TAXES	(280,769)	(200,793)	(974,602)	(1,094,903)
INCOME TAXES	0	0	0	0
NET LOSS	(280,769)	(200,793)	(974,602)	(1,094,903)
DEEMED DIVIDEND RELATED TO BENEFICIAL CONVERSION FEATURE OF CONV PREF STOCK	0	0	(21,400)	0
NET LOSS ALLOCABLE TO COMMON STOCKHOLDERS	$ (280,769)	$ (200,793)	$ (996,002)	$ (1,094,903)
NET LOSS PER COMMON SHARE
- BASIC AND DILUTED:	$ (0.04)	$ (0.03)	$ (0.14)	$ (0.18)
Weighted common shares outstanding
- basic and diluted	7,209,206	6,197,676	7,190,229	6,149,050

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NOTE 6 - CAPITAL LEASE

9 Months Ended

Sep. 30, 2012

Accounting Policies [Abstract]

NOTE 6 - CAPITAL LEASE

NOTE 6 – CAPITAL LEASE

In April 2012, we entered into a capital lease agreement totaling $7,021 for the lease of an encapsulating machine used to encapsulate our powdered product. The lease is payable over 30 months interest free.

The following is a schedule by years of future minimum lease payments under capital leases.

Years ending December 31:
2012	$            702
2013	$         2,808
2014	$         1,871
Total minimum lease payments	$         5,381

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NOTE 5 - PATENTS AND LICENSES, NET

9 Months Ended

Sep. 30, 2012

Notes to Financial Statements

NOTE 5 - PATENTS AND LICENSES, NET

NOTE 5 - PATENTS AND LICENSES, NET

Our identifiable long-lived intangible assets are patents and prepaid licenses. Patent and license amortization is $803 and $178 for the three months ended September 30, 2012 and 2011, respectively and $2,383 and $251 for the nine months ended September 30, 2012 and 2011, respectively.

The licenses are being amortized over an economic useful life of 17 years. The gross carrying amounts and accumulated amortization related to these intangible assets consist of the following at:

	September 30, 2012	December 31, 2011
Gross carrying amounts-patents and licenses	$            174,238	$            116,924
Accumulated amortization	(4,634)	(2,251)
Patents and Licenses, net	$            169,604	$            114,673

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NOTE 5 - PATENTS AND LICENSES, NET (Tables)

9 Months Ended

Sep. 30, 2012

Notes to Financial Statements

Patents and Licenses

	September 30, 2012	December 31, 2011
Gross carrying amounts-patents and licenses	$            174,238	$            116,924
Accumulated amortization	(4,634)	(2,251)
Patents and Licenses, net	$            169,604	$            114,673

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2012

Accounting Policies [Abstract]

Basis of presentation and principles of consolidation

Basis of presentation and principles of consolidation

The accompanying consolidated unaudited interim financial statements and related notes have been prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP) for interim financial information, and with the rules and regulations of the United states Securities and Exchange Commission (“SEC”) to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Unaudited interim results are not necessarily indicative of the results for the full year. These unaudited interim financial statements should be read in conjunction with the financial statements of the Company for the year ended December 31, 2011 and notes thereto contained in the Company’s Annual Report on Form 10-K filed with the SEC.

Investments for which we possess the power to direct or cause the direction of the management and policies, either through majority ownership or other means, are accounted for under the consolidation method. The consolidated financial statements include the accounts of Entia and TNS. All intercompany accounts have been eliminated for the purpose of the consolidated financial statement presentation.

Use of estimates

Use of estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash

Cash

We consider all highly liquid, short-term investments with original maturities of three months or less when purchased to be cash equivalents.

Accounts receivable

Accounts receivable

Accounts receivable are recorded at the invoiced amount, net of allowance for doubtful accounts. The allowance for doubtful accounts is our best estimate of the amount of probable credit losses based on specific identification of accounts in our existing accounts receivable. Outstanding account balances are reviewed individually for collectibility. We determine the allowance based on historical write-off experience, customer specific facts and economic conditions. Bad debt expense is included in general and administrative expenses, if any. We consider all accounts greater than 30 days old to be past due. Account balances are charged off against allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The allowance for doubtful accounts was $2,526 and $2,526 at September 30, 2012 and December 31, 2011, respectively.

Inventory

Inventory

Inventory, which consists primarily of raw materials to be used in the production of our dietary supplement products, is stated at the lower of cost or market using the first-in, first-out method. We regularly review our inventory on hand and, when necessary, record a provision for excess or obsolete inventory.

Property and equipment

Property and equipment

Property and equipment are recorded at cost. Additions and improvements that increase the value or extend the life of an asset are capitalized. Maintenance and repairs are expensed as incurred. Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the consolidated statement of operations. Depreciation is computed on a straight-line basis over the following estimated useful lives of the assets:

Office equipment	3 years
Production equipment	5 to 7 years
Equipment under capital lease	5 to 7 years
Leasehold improvements	Lesser of lease term or useful life of improvement

Patents

Patents

Patents, once issued or purchased, are amortized using the straight-line method over their economic remaining useful lives. All internally developed process costs incurred to the point when a patent application is to be filed are expensed as incurred and classified as research and development costs. Patent application costs, generally legal costs, are capitalized pending disposition of the individual patent application, and are subsequently either amortized based on the initial patent life granted, generally 15 to 20 years for domestic patents and 5 to 20 years for foreign patents, or expensed if the patent application is rejected. The costs of defending and maintaining patents are expensed as incurred. Upon becoming fully amortized, the related cost and accumulated amortization are removed from the accounts.

Impairment of long-lived assets

Impairment of long-lived assets

Our long-lived assets, which include property and equipment, patents and licenses of patents, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

We assess the recoverability of our long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.

Discount on convertible notes payable

Discount on convertible notes payable

We allocate the proceeds received from convertible notes between convertible notes payable and warrants, if applicable. The resulting discount for warrants is amortized using the effective interest method over the life of the debt instrument. After allocating a portion of the proceeds to the warrants, the effective conversion price of the convertible note payable can be determined. If the effective conversion price is lower than the market price at the date of issuance, a beneficial conversion feature is recorded as an additional discount to the convertible note payable. The beneficial conversion feature discount is amortized using the effective interest method over the life of the debt instrument. The amortization is recorded as interest expense on the consolidated statement of operations.

Fair value of financial instruments

Fair value of financial instruments

The carrying amounts of our financial assets and liabilities, such as cash, accounts receivable and accounts payable, approximate their fair values because of the short maturity of these instruments. Due to conversion features and other terms, it is not practical to estimate the fair value of notes payable and convertible notes.

Fair value measurements

Fair value measurements

We measure fair value as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. We utilize a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1	Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
Level 2	Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
Level 3	Unobservable inputs where there is little or no market data, which require the reporting entity to develop its own assumptions.

We do not have any assets or liabilities measured at fair value on a recurring or a non-recurring basis. Consequently, we did not have any fair value adjustments for assets and liabilities measured at fair value at September 30, 2012 or December 31, 2011, nor any gains or losses reported in the consolidated statement of operations that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date for the periods ended September 30, 2012 and December 31, 2011.

Revenue recognition

Revenue recognition

We recognize revenue when (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been performed, (iii) amounts are fixed or determinable and (iv) collectibility of amounts is reasonably assured.

Revenues from the sale of products, including shipping and handling fees but excluding statutory taxes collected from customers, as applicable, are recognized when shipment has occurred. We sell our products directly to customers. Persuasive evidence of an arrangement is demonstrated via order and invoice, product delivery is evidenced by a bill of lading from the third party carrier and title transfers upon shipment, the sales price to the customer is fixed upon acceptance of the order and there is no separate sales rebate, discount, or volume incentive.

Shipping and handling costs

Shipping and handling costs

Amounts charged to customers for shipping products are included in revenues and the related costs are classified in cost of goods sold as incurred.

Advertising and promotion costs

Advertising and promotion costs

Costs associated with the advertising of our products are expensed as incurred.

Equity instruments issued to parties other than employees for acquiring goods or services

Equity instruments issued to parties other than employees for acquiring goods or services

We account for all transactions in which goods or services are the consideration received for the issuance of equity instruments based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will occur. Currently such transactions are primarily awards of warrants to purchase common stock.

The fair value of each warrant award is estimated on the date of grant using a Black-Scholes option-pricing valuation model.

The assumptions used to determine the fair value of our warrants are as follows:

- The expected life of warrants issued represents the period of time the warrants are expected to be outstanding.

- The expected volatility is generally based on the historical volatility of comparable companies’ stock over the contractual life of the warrant.

- The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods within the contractual life of the warrant.

- The expected dividend yield is based on our current dividend yield as the best estimate of projected dividend yield for periods within the contractual life of the warrant.

Income taxes

Income taxes

We recognize 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 based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in our consolidated statements of income in the period that includes the enactment date.

We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in our consolidated financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Should they occur, our policy is to classify interest and penalties related to tax positions as income tax expense.

Net loss per common share

Net loss per common share

Basic and diluted net loss per share has been computed by dividing our net loss by the weighted average number of common shares issued and outstanding. Convertible preferred stock, options and warrants to purchase our common stock as well as debt which are convertible into common stock are anti-dilutive and therefore are not included in the determination of the diluted net loss per share for three months ending September 30, 2012 and 2011 and the nine months ending September 30, 2012 and 2011. The following table presents a reconciliation of basic loss per share and excluded dilutive securities:

	For the Three Months Ended September 30,		For the Nine Months Ended September 30,
	2012	2011	2012	2011
Numerator:
Net loss applicable to common shareholders	$    (280,769)	$   (200,793)	$    (996,002)	$   (1,094,903)
Denominator:
Weighted-average common shares outstanding	7,209,206	6,197,676	7,190,229	6,149,050
Basic and diluted net loss per share	$          (0.04)	$         (0.03)	$          (0.14)	$            (0.18)
Common stock warrants	2,758,266	1,689,747	2,464,471	1,689,747
Series A convertible preferred stock	889,000	415,000	843,000	415,000
Stock options	658,240	-	591,179	-
Convertible debt including interest	400,025	537,865	395,624	537,865
Excluded dilutive securities	4,705,531	2,642,612	4,294,274	2,642,612

Reclassifications

Reclassifications

Certain reclassifications have been made to prior period financial statements and footnotes in order to conform to the current period's presentation.

Segments

Segments

We have determined that we operate in one segment for financial reporting purposes.

Recently issued accounting pronouncements

Recently issued accounting pronouncements

Management does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.

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NOTE 9 - STOCKHOLDERS' EQUITY (DEFICIT)

9 Months Ended

Sep. 30, 2012

Equity [Abstract]

NOTE 9 - STOCKHOLDERS' EQUITY (DEFICIT)

NOTE 9 – STOCKHOLDERS’ EQUITY (DEFICIT)

Preferred Stock

On May 26, 2011, our board of directors designated 350,000 shares of preferred stock as Series A preferred stock, $0.001 par value. The Series A preferred stock is entitled to a liquidation preference in the amount of $5 per share, votes on an as converted basis with the common stock on all matters as to which holders of common stock shall be entitled to vote, and is convertible into common stock on a one-for-ten basis.

During the third quarter 2012, Entia issued 4,600 shares of Series A preferred stock for cash proceeds of $23,000.

During the second quarter 2012, Entia issued shares of Series A preferred stock for the following:

12,800 shares were issued for cash proceeds of $64,000. The fair value of the common stock into which the Series A preferred stock is convertible exceeded the allocated purchase price of the Series A preferred stock by $21,139 on the date of issuance, resulting in a beneficial conversion feature. Entia recognized the beneficial conversion feature as a one-time, non-cash deemed dividend to the holders of the Series A preferred stock on the date of issuance;

1,000 shares were issued in exchange for cancellation of a note payable totaling $10,000; and

7,000 shares valued at $35,000 were issued in exchange for consulting services provided.

During the first quarter 2012, 19,000 shares of Series A preferred stock were issued with a value of $95,000.

Common stock

During the third quarter of 2012, Entia’s board of directors agreed to a special price to current holders of warrants and/or options. If they committed to exercising their warrants/options, Entia would allow them to convert at $0.40 per share. This special price was effective only through July 31, 2012. There were a total of 222,500 warrants exercised for proceeds of $89,000. $30,000 was received in cash during third quarter 2012 with the remaining $59,000 was exercised by receiving short-term notes with interest ranging from 6% to 20% due before April 2013. These notes are recorded on the balance sheet as a contra-equity account.

During the second quarter of 2012, 50,000 shares of common stock valued at $50,000 were issued in exchange for a license agreement.

During the first quarter 2012, 666 shares of common stock were issued to two employees as compensation. This stock had a fair market value of $400.

Stock incentive plan

On September 17, 2010, our Board of Directors adopted the 2010 Stock Incentive Plan (“Plan”). The Plan provides for the grant of options to purchase shares of our common stock, and stock awards consisting of shares of our common stock, to eligible participants, including directors, executive officers, employees and consultants of the Company. We have reserved 1,500,000 shares of common stock for issuance under the Plan with an annual increase in shares of 50,000 as of January 1 of each year; commencing January 1, 2012. The fair value of the option grants were estimated at the date of the grants using the Black-Scholes option pricing model with the following assumptions: expected volatility of 233.73% - 248.63%, a risk free rate of 0.84% - 1.15%, and an expected life of 4 - 10 years for the period ended September 30, 2012.

There were 103,513 authorized shares available under the Plan, and there were options to purchase 807,281 shares of stock exercisable, with a remaining contractual term of 10 years at September 30, 2012. The weighted average grant date fair value of stock options granted during the quarter ended September 30, 2012 was $0.53. The weighted average exercise price of stock options granted and exercisable is $0.56 on September 30, 2012. The aggregate fair value of options vested on September 30, 2012 is $170,342. Unvested options amounted to $263,227 at September 30, 2012 and there were 20,000 options forfeited with a value of $7,655, none exercised, or expired during the quarter ended September 30, 2012.

At September 30, 2012 there was $762,430 of aggregate intrinsic value of outstanding stock options, including $512,137 of aggregate intrinsic value of exercisable stock options. Intrinsic value is the total pretax intrinsic value for all “in-the-money” options (i.e., the difference between the Company’s closing stock price on the last trading day of third quarter 2012 and the exercise price, multiplied by the number of shares) that would have been received by the option holders had all option holders exercised their options as of September 30, 2012. This amount changes based on the fair market value of the Company’s stock.

The Company had $263,227 of total unrecognized compensation cost related to unvested stock options at September 30, 2012, which is expected to be recognized over a weighted average period of 7 years.

Warrants – Consulting Agreements

During the third quarter of 2012, Entia’s board of directors agreed to a special price to current holders of warrants and/or options. If they committed to exercising their warrants/options, Entia would allow them to convert at $0.40 per share. This special price was effective only through July 31, 2012. There were a total of 222,500 warrants exercised for proceeds of $89,000. $30,000 was received in cash during third quarter 2012 with the remaining $59,000 was exercised by receiving short-term notes with interest ranging from 6% to 20% due before April 2013.

During the second quarter 2012, we issued warrants to purchase 30,496 shares of common stock under agreements for consulting services and warrants to purchase 308,750 shares of common stock under debt agreements to raise capital. These warrants have an exercise price ranging from $0.45 to $5.00 per share and have an average term of 5.75 years.

During first quarter 2012, we issued warrants to purchase 152 shares of common stock under agreements for consulting services. These warrants have an exercise price of $5.00 per share and have a term of 7 years.

We use the Black-Scholes option-pricing model to determine the fair value of warrants on the date of grant. In determining the fair value of warrants, we employed the following key assumptions during the periods ended September 30:

	2012	2011
Risk-Free interest rate	0.84% - 1.08%	1.27 - 2.80%
Expected dividend yield	0%	0%
Volatility	202.65% - 264.48%	183.17 - 187.30%
Expected life	5 - 7 years	4 - 10 years
Weighted-average Black-Scholes value of warrants granted	$0.56	$2.60

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NOTE 7 - NOTES PAYABLE

9 Months Ended

Sep. 30, 2012

Debt Disclosure [Abstract]

NOTE 7 - NOTES PAYABLE

NOTE 7 – NOTES PAYABLE

Notes payable consists of the following:

	September 30, 2012	December 31, 2011
Notes payable - current
4.85%, unsecured, due monthly	415	20,664
7.85% unsecured, due monthly	2,812	2,493
	$                  3,227	$              23,157
Convertible notes payable, net
5% unsecured due June 2013 (net of discount related to beneficial conversion feature of $0 in 2012 and $5,143 in 2011), convertible into preferred stock at $5.00 per share	$               15,000	$                9,857
5%, unsecured due June 2013  (net of discount related to beneficial conversion feature of $35,807 in 2012 and $127,701 in 2011), convertible into common stock at $0.45 per share	276,693	184,799
6% unsecured due June 2013 (net of discount related to beneficial conversion feature of $6,416 in 2012 and $0 in 2011), convertible into preferred stock at $5.00 per share	6,584
5% unsecured due June 2013, convertible into preferred stock at $5.00  per share	15,000	15,000
6% unsecured, convertible into common stock at $2.00 per share, due on demand	50,000	50,000
Less:  Current Portion	(363,277)	(194,656)
	$                           -	$              65,000
Convertible notes payable related party, net
6% unsecured due December 2013 (net of discount related to beneficial conversion feature of $14,530 in 2012 and $0 in 2011), convertible into common stock at $2.00 per share	$               60,470	$              50,000

Entia had debt in the principal amount of $392,500 in the form of convertible notes payable of which $377,500 was to mature on June 30, 2012. Entia was successful in renegotiating all but one of these notes to extend their maturity dates to June 30, 2013. $50,000 of the debt was extended month-to-month, and as such, all is classified as short-term on the balance sheet. In consideration for extending the maturity date, Entia issued 50,000 warrants valued at $48,533 and modified an existing conversion feature for one of the notes.

For one of the convertible notes payable modified in the second quarter, we deemed the terms of the note modification to be substantially different due to the change in the conversion rate and treated the convertible note payable as extinguished and exchanged for a new note. We recorded a gain of $75,315 on the extinguishment.

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NOTE 8 - RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2012

Related Party Transactions [Abstract]

NOTE 8 - RELATED PARTY TRANSACTIONS

NOTE 8 – RELATED PARTY TRANSACTIONS

Consulting services from Chairman and CEO

Expense for consulting services provided by the Chairman/CEO were $30,000 and $90,000 for the three and nine months ended September 30, 2011, respectively. No consulting services were provided for 2012, as the Chairman/CEO was converted to an employee in October 2011.

Debt agreements from board member

Entia entered into a promissory note with a board member for a 6% note for $25,000 maturing on December 31, 2013. The note is reflected on the balance sheet, net of discount in the long term liabilities.

Preferred stock purchase from board member

During the second quarter 2012, a board member purchased 5,000 shares of Series A preferred stock, a $0.001 par value for $5.00 per share.

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NOTE 10 - COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2012

Commitments and Contingencies Disclosure [Abstract]

NOTE 10 - COMMITMENTS AND CONTINGENCIES

NOTE 10 - COMMITMENTS AND CONTINGENCIES

Leases

On April 4, 2012, Entia Biosciences, Inc. entered into a Commercial Lease agreement with Lanz Properties, LLC for 13,081 square feet of office and warehouse space located at 13565 S.W. Tualatin-Sherwood Road, Suite 800, Sherwood, Oregon 97140. The new lease commences June 1, 2012 and will terminate on July 31, 2015. No rent will be payable until October 2012. The base monthly rental rate will start at $3,160, increasing to $3,260 in October 2013, and then $3,343 in June 2014.

Entia’s prior two leases for 3,400 square feet at 14889 S.W. Tualatin-Sherwood Road #205, Sherwood, Oregon 97140, had a base monthly rent of $2,400 and ended on May 31, 2012. Management believes that the new facility offers a better location and configuration for its biotechnology activities and provides significantly more space for manufacturing, fulfillment, and administration over the next three years.

Entia calculated the deferred rent amount related to the long-term lease agreement and determined that the amount to accrue would be immaterial to the financial statements, and thus, decided not to record or disclose this amount.

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NOTE 5 - PATENTS AND LICENSES, NET (Details Narrative) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Notes to Financial Statements
Patent and license amortization	$ 803	$ 178	$ 2,383	$ 251
Useful life of assets			17 years

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NOTE 3 - INVENTORY (Tables)

9 Months Ended

Sep. 30, 2012

Inventory Disclosure [Abstract]

Inventory

	September 30, 2012	December 31, 2011
Raw materials	$            278,797	$            294,036
Finished goods	7,439	7,115
	286,236	301,151
Less:  reserve for excess and obsolete inventory	(127,573)	(127,573)
	$            158,663	$            173,578

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NOTE 9 - STOCKHOLDERS' EQUITY (DEFICIT) (Tables)

9 Months Ended

Sep. 30, 2012

Equity [Abstract]

Black-Scholes Option-Pricing Model Assumptions

	2012	2011
Risk-Free interest rate	0.84% - 1.08%	1.27 - 2.80%
Expected dividend yield	0%	0%
Volatility	202.65% - 264.48%	183.17 - 187.30%
Expected life	5 - 7 years	4 - 10 years
Weighted-average Black-Scholes value of warrants granted	$0.56	$2.60

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NOTE 9 - STOCKHOLDERS' EQUITY (DEFICIT) (Details Narrative) (USD $)	3 Months Ended
	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Jan. 01, 2012	May 26, 2011	Sep. 17, 2010
Notes to Financial Statements
Shares of preferred stock designated as Series A preferred stock					350,000
Series A preferred stock par value					$ 0.001
Liquidation preference per Series A preferred share					$ 5
Series A preferred stock issued for cash	4,600	12,800
Cash proceeds from issuance of Series A preferred shares	$ 23,000	$ 64,000
Non-cash deemed dividend on the Series A preferred stock		21,139
Series A preferred stock issued in exchange for cancellation of note payable		1,000
Note payable amount cancelled in exchange for Series A preferred shares		10,000
Series A preferred stock issued for consulting services		7,000
Value of Series A preferred shares issued in exchange for consutling services		35,000
Series A preferred stock issued			19,000
Value of Series A preferred stock issued			95,000
Common stock issued in exchange for license agreement		50,000
Value of common stock issued in exchange for license agreement		50,000
Common stock issued to employees as compensation			666
Number of employees who received common stock as compensation			2
Fair market value of common stock issued to employees as compensation			400
Common shares reserved for the 2012 Stock Incentive Plan						1,500,000
Annual increase in reserved shares of the 2010 Stock Incentive Plan				50,000
Minimum expected volatility assumption for Black-Scholes option pricing			183.17%
Maximum expected volatility assumption for Black-Scholes option pricing			187.30%
Minimum risk free rate assumption for Black-Scholes option pricing			1.27%
Maximum risk free rate assumption for Black-Scholes option pricing			2.80%
Minimum expected life assumption for Black-Scholes option pricing model			4 years
Maximum expected life assumption for Black-Scholes option pricing model			10 years
Authorized shares underlying options available for granting under the 2010 Stock Incentive Plan	123,513
Shares available for purchase from exercisable options	807,281
Remaining contractual term of the options to purchase shares	10 years
The weighted average fair value of stock options granted	$ 0.53
Weighted average exercise price of stock options granted and exercisable	$ 0.56
Aggregate fair value of options vested	170,342
Unvested options	263,227
Options forfeited	20,000
Value of options forfeited	7,655
Number of options exercised	0
Number of options expired	0
Aggregate intrinsic value of outstanding stock options	762,430
Aggregate intrinsic value of exercisable stock options	512,137
Total unrecognized compensation cost related to unvested stock options	263,227
Weighted average period to recognize compensation cost related to unvested stock options (in years)	7 years
Number of common shares underlying the warrants issued for consulting service agreement		30,496	152
Number of common shares underlying the warrants issued under debt agreements to raise capital		308,750
Minimum warrant exercise price		$ 0.45
Maximum warrant exercise price		$ 5.00
Average term of warrants (in years)		5 years 9 months
Exercise price of warrants			$ 5.00
Term of warrants (in years)			7 years
Special conversion price for options and warrants if holder commits to exercising by July 31, 2012	$ 0.40
Warrants exercised at special price	222,500
Proceeds from warrants exercised at special price	89,000
Cash received from exercise of warrants at special price	30,000
Warrants exercised at special price in exchange for short term notes with interest	$ 59,000
Term of promissory notes	6 months
Minimum interest rate of short term notes issued for warrant exercise at special price	6.00%
Maximum interest rate of short term notes issued for warrant exercise at special price	20.00%

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CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) (USD $)	Preferred Stock	Common Stock	Additional Paid In Capital	Deferred Compensation	Stock Subscriptions	Accumulated Deficit	Total
Beginning Balance, Amount at Dec. 31, 2010		$ 5,836	$ 2,011,989	$ (9,704)		$ (2,313,274)	$ (305,153)
Beginning Balance, Shares at Dec. 31, 2010	0	5,836,247
Conversion of note payable into preferred stock, Shares	21,500
Conversion of note payable into preferred stock, Amount	22		107,480				107,500
Issuance of preferred stock for cash, Shares	22,000
Issuance of preferred stock for cash, Amount	22		109,978				110,000
Issuance of warrants in connection with convertible notes payable			45,937				45,937
Beneficial conversion feature in connection with convertible notes payable			173,030				173,030
Issuance of common stock for license agreement, Shares		100,000
Issuance of common stock for license agreement, Amount		100	99,900				100,000
Issuance of common stock for conversion of accounts payable/accrued comp, Shares		897,104
Issuance of common stock for conversion of accounts payable/accrued comp, Amount		935	368,875				369,810
Issuance of common stock for services, Shares		276,395
Issuance of common stock for services, Amount		238	243,758				243,996
Issuance of common stock and warrants for cash, Shares		61,429
Issuance of common stock and warrants for cash, Amount		62	42,938				43,000
Stock compensation, Amount			347,969				347,969
Issuance of warrants for services			721,213	(721,213)
Amortization of deferred compensation				225,079			225,079
Net loss						(1,729,103)	(1,729,103)
Ending Balance, amount at Dec. 31, 2011	44	7,171	4,272,792	(497,383)		(4,042,376)	(259,752)
Ending Balance, shares at Dec. 31, 2011	43,500	7,171,175
Issuance of preferred stock for cash, Shares	36,400
Issuance of preferred stock for cash, Amount	36		181,963				181,999
Issuance of preferred stock for cancellation of debt, Shares	2,000
Issuance of preferred stock for cancellation of debt, Amount	2		9,998				10,000
Issuance of preferred stock for services, Shares	7,000
Issuance of preferred stock for services, Amount	7		34,993				35,000
Deemed dividend related to beneficial conversion feature of convertible preferred stock, Shares			21,400			(21,400)
Issuance of warrants in connection with convertible notes payable			27,704				27,704
Issuance of common stock for license agreement, Shares		50,000
Issuance of common stock for license agreement, Amount		50	25,451				25,501
Issuance of common stock and warrants for cash, Shares		75,000
Issuance of common stock and warrants for cash, Amount		75	29,925				30,000
Stock compensation, Shares		666
Stock compensation, Amount		1	170,740				170,740
Issuance of warrants for services			21,139	(21,139)
Issuance of warrants for extension on debt			48,533				48,533
Amortization of deferred compensation				141,026			141,026
Net loss						(974,602)	(974,602)
Ending Balance, amount at Sep. 30, 2012	$ 89	$ 7,444	$ 4,903,491	$ (377,496)	$ (59,000)	$ (5,038,378)	$ (563,850)
Ending Balance, shares at Sep. 30, 2012	88,900	7,444,341

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NOTE 4 - PROPERTY AND EQUIPMENT

9 Months Ended

Sep. 30, 2012

Property, Plant and Equipment [Abstract]

NOTE 4 - PROPERTY AND EQUIPMENT

NOTE 4 – PROPERTY AND EQUIPMENT

Property and equipment, stated at cost, consists of the following:

	September 30, 2012	December 31, 2011
Office equipment	$              24,584	$              23,072
Production equipment	37,984	30,964
Leasehold improvements	13,946	2,192
	76,514	56,228
Less:  accumulated depreciation	(38,287)	(24,382)
	$              38,227	$              31,846

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NOTE 1 - ORGANIZATION AND OPERATIONS (Details Narrative) (USD $)	Sep. 30, 2012	Feb. 15, 2012	Dec. 31, 2011	Sep. 30, 2011	Dec. 31, 2010
Notes to Financial Statements
Reverse stock split ratio		10
Cash and cash equivalents	$ 14,698		$ 16,639	$ 7,971	$ 65,061

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NOTE 7 - NOTES PAYABLE (Details Narrative) (USD $)	9 Months Ended
	Sep. 30, 2012
Notes to Financial Statements
Convertible notes payable	$ 392,500
Mature convertible notes payable	377,500
Mature notes payable with extended long term maturity date to June 30, 2013	327,500
Mature note payable with extended maturity date as short term month to month	50,000
Warrants issued in consideration of extending maturity date	50,000
Value of warrants	48,533
Gain on extinguishment of note	$ 75,315

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2012

Accounting Policies [Abstract]

Estimated Useful Lives of the Assets

Office equipment	3 years
Production equipment	5 to 7 years
Equipment under capital lease	5 to 7 years
Leasehold improvements	Lesser of lease term or useful life of improvement

Net Loss Per Common Share

	For the Three Months Ended September 30,		For the Nine Months Ended September 30,
	2012	2011	2012	2011
Numerator:
Net loss applicable to common shareholders	$    (280,769)	$   (200,793)	$    (996,002)	$   (1,094,903)
Denominator:
Weighted-average common shares outstanding	7,209,206	6,197,676	7,190,229	6,149,050
Basic and diluted net loss per share	$          (0.04)	$         (0.03)	$          (0.14)	$            (0.18)
Common stock warrants	2,758,266	1,689,747	2,464,471	1,689,747
Series A convertible preferred stock	889,000	415,000	843,000	415,000
Stock options	658,240	-	591,179	-
Convertible debt including interest	400,025	537,865	395,624	537,865
Excluded dilutive securities	4,705,531	2,642,612	4,294,274	2,642,612