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, 2013

[   ]	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 8, 2013, 7,944,999 shares of the registrant's common stock, par value $0.001 per share, were outstanding.

TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION		3
Item 1.	Financial Statements	3
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23
Item 4.	Controls and Procedures	23
PART II - OTHER INFORMATION		24
Item 1.	Legal Proceedings	24
Item 1A.	Risk Factors	24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 3.	Defaults upon Senior Securities	24
Item 4.	Mine Safety Disclosures	24
Item 5.	Other Information	24
Item 6.	Exhibits	25
SIGNATURES		27

2

Part 1: FINANCIAL INFORMATION

Item 1. Financial Statements

ENTIA BIOSCIENCES, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
				September 30, 2013		December 31, 2012
Assets
Current Assets:
	Cash		$	45,355	$	13,081
	Accounts receivable, net			93,264		62,397
	Inventory, net			128,419		132,133
	Interest income receivable			4,595		4,083
	Prepaid expenses			13,515		32,542
		Total Current Assets		285,148		244,236
Property and Equipment, net				72,094		35,627
Patents and license, net				346,325		183,106
Total Assets			$	703,567	$	462,969
Liabilities and Stockholders' Equity (Deficit)
Current Liabilities:
	Accounts payable and accrued expenses		$	911,477	$	654,919
	Short-term convertible notes payable, net of discount related-party			-		63,493
	Short-term convertible notes payable, net of discount			324,645		365,416
	Capital lease payable			702		2,808
	Notes payable			144,237		22,521
		Total Current Liabilities		1,381,061		1,109,157
Long Term Liabilities:
	Capital lease payable			2,105		2,105
		Total Long Term Liabilities		2,105		2,105
Total Liabilities				1,383,166		1,111,262
Stockholders' Equity (Deficit):
	Preferred stock, $0.001 par value, 5,000,000 shares authorized,
		Series A preferred stock, 350,000 shares designated,
		269,969 and 109,900 shares issued and outstanding,
		respectively, aggregate liquidation value of $1,349,845
		and $549,500, respectively		270		110
	Common stock, $0.001 par value, 150,000,000 shares authorized,
		7,832,999 and 7,444,591 shares issued and outstanding, respectively		7,833		7,444
	Stock subscription receivable			(49,000)		(49,000)
	Additional paid-in capital			6,962,900		5,115,587
	Deferred compensation			(232,543)		(394,510)
	Accumulated deficit			(7,369,059)		(5,327,924)
		Total Stockholders' Equity (Deficit)		(679,599)		(648,293)
Total Liabilities and Stockholders' Equity (Deficit)			$	703,567	$	462,969
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, 2013	September 30, 2012	September 30, 2013	September 30, 2012
REVENUES			$ 92,102	$ 72,604	$ 262,245	$ 263,255
COST OF GOODS SOLD			33,560	23,611	91,547	61,738
GROSS PROFIT			58,542	48,993	170,698	201,517
OPERATING EXPENSES
	Advertising and promotion		23,399	13,259	151,672	26,026
	Professional fees		38,493	33,717	115,731	115,021
	Consulting fees		79,365	38,367	608,104	192,242
	General and administrative		396,337	193,676	1,202,148	667,240
		Total Operating Expenses	537,594	279,019	2,077,655	1,000,529
LOSS FROM OPERATIONS			(479,052)	(230,026)	(1,906,957)	(799,012)
OTHER INCOME (EXPENSES)
	Interest income		2,512	-	7,412	-
	Interest expense		(34,188)	(50,743)	(101,790)	(250,905)
	Gain on extinguishment of debt		-	-	-	75,315
		Total Other Income (Expenses)	(31,676)	(50,743)	(94,378)	(175,590)
NET LOSS			$ (510,728)	$ (280,769)	$ (2,001,335)	$ (974,602)
DEEMED DIVIDEND RELATED TO BENEFICIAL
	CONVERSION FEATURE OF CONVERTIBLE
	PREFERRED STOCK		(39,800)	-	(39,800)	(21,400)
NET LOSS PER SHARE ALLOCABLE TO COMMON
	STOCKHOLDERS		$ (550,528)	$ (280,769)	$ (2,041,135)	$ (996,002)
NET LOSS PER COMMON SHARE
	- BASIC AND DILUTED:		$ (0.07)	$ (0.04)	$ (0.28)	$ (0.14)
	Weighted common shares outstanding
		- basic and diluted	7,712,950	7,209,206	7,395,137	7,190,229
See accompanying notes to the consolidated financial statements.

4

ENTIA BIOSCIENCES, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE PERIOD ENDED DECEMBER 31, 2012 and
FOR THE INTERIM PERIOD ENDED SEPTEMBER 30, 2013
(Unaudited)
						Additional		Stock		Total Stockholders'
		Preferred Stock		Common Stock		Paid	Deferred	Subscriptions	Accumulated	Equity
		Shares	Amount	Shares	Amount	In Capital	Compensation	Receivable	Deficit	(Deficit)
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		57,400	57	-	-	286,942	-	-	-	286,999
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		-	-	100,000	100	39,900	-	-	-	40,000
Issuance of common stock for note receivable		-	-	122,500	122	48,878	-	(49,000)	-	-
Stock compensation		-	-	916	1	170,456	-	-	-	170,457
Issuance of warrants for services		-	-	-	-	128,540	(128,540)	-	-	-
Issuance of warrants for extension on debt		-	-	-	-	48,533	-	-	-	48,533
Amortization of deferred compensation		-	-	-	-	-	231,413	-	-	231,413
Net loss		-	-	-	-	-	-	-	(1,264,148)	(1,264,148)
Balance - December 31, 2012		109,900	110	7,444,591	7,444	5,115,587	(394,510)	(49,000)	(5,327,924)	(648,293)
Issuance of preferred stock for cash		113,175	113	-	-	565,762	-	-	-	565,875
Issuance of preferred stock for  cancellation of debt		3,162	3	-	-	15,747	-	-	-	15,750
Issuance of warrants in connection with convertible notes payable		-	-	-	-	16,400	-	-	-	16,400
Issuance of preferred stock for conversion
	of convertible notes payable	23,332	23	-	-	116,629	-	-	-	116,652
Issuance of preferred stock for conversion of accounts payable		30,400	31	-	-	151,970	-	-	-	152,001
Deemed dividend related to beneficial conversion
	feature of convertible preferred stock	-	-	-	-	39,800	-	-	(39,800)	-
Issuance of common stock for conversion of preferred stock		(10,000)	(10)	100,000	100	(90)	-	-	-	-
Issuance of common stock for conversion of accrued compensation		-	-	273,158	274	129,727	-	-	-	130,001
Stock compensation		-	-	-	-	345,391	-	-	-	345,391
Issuance of common stock for services		-	-	15,250	15	7,529	-	-	-	7,544
Issuance of warrants for services		-	-	-	-	360,442	(360,442)	-	-	-
Issuance of warrants for extension on debt		-	-	-	-	98,006		-	-	98,006
Amortization of deferred compensation		-	-	-	-	-	522,409	-	-	522,409
Net loss		-	-	-	-	-	-	-	(2,001,335)	(2,001,335)
Balance - September 30, 2013		269,969	$ 270	7,832,999	$ 7,833	$ 6,962,900	$ (232,543)	$ (49,000)	$ (7,369,059)	$ (679,599)
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, 2013		September 30, 2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss			$	(2,001,335)	$	(974,602)
Adjustments to reconcile net loss to net cash
	used in operating activities:
	Depreciation/amortization			25,104		16,290
	Gain on extinguishment of note payable			-		(75,315)
	Amortization of discount on convertible notes			78,142		179,110
	Stock-based compensation			875,343		420,801
	Changes in operating assets and liabilities:
		Accounts receivable		(30,867)		9,693
		Inventory		3,714		14,915
		Prepaid expenses		19,027		21,924
		Other current assets		(512)		-
		Accounts payable and accrued expenses		541,569		217,395
NET CASH USED IN OPERATING ACTIVITIES				(489,815)		(169,789)
CASH FLOWS FROM INVESTING ACTIVITIES:
	Purchase of property and equipment			(55,448)		(14,906)
	Acquisition of patents and patents pending  (net)			(20,044)		(57,315)
NET CASH USED IN INVESTING ACTIVITIES				(75,492)		(72,221)
CASH FLOWS FROM FINANCING ACTIVITIES:
	Proceeds from issuance of common stock, preferred stock and warrants			565,865		211,999
	Proceeds from convertible notes payable short-term			50,000		13,000
	Net change in notes payable			(18,284)		(9,930)
	Proceeds from convertible note payable-related party			-		25,000
NET CASH PROVIDED BY FINANCING ACTIVITIES				597,581		240,069
NET CHANGE IN CASH				32,274		(1,941)
Cash at beginning of period				13,081		16,639
Cash at end of period			$	45,355	$	14,698
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
	Interest paid		$	906	$	893
	Taxes paid		$	-	$	-
SUPPLEMENTAL DISCLOSURE OF NONCASH FLOWS FINANCING
	AND INVESTING ACTIVITIES:
	Deemed distribution		$	39,800	$	21,400
	Conversion of accounts payable, accrued compensation, notes
		payable and accrued interest to preferred stock and common stock	$	414,404	$	10,000
	Warrants issued for extinguishment of debt		$	-	$	48,533
	Stock issued for license		$	-	$	25,501
	Stock issued for note receivable		$	-	$	59,000
	Debt issued for license		$	140,000	$	-
See accompanying notes to the consolidated financial statements.

6

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND OPERATIONS

On January 9, 2012, the Nevada Secretary of State accepted an amendment to our Articles of Incorporation to change the name 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 May 15, 2012, Entia moved to its current location 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.  During second quarter of 2013, we added five new clean rooms and integrated the production and manufacturing of our cosmetic products which will significantly increase efficiencies while reducing costs.

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, which includes the completion of an ErgoD2 study on a diabetic population in Curacao.  At September 30, 2013, we had cash and cash equivalents of $45,355.  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 31, 2013.

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 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 adjustments) 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, 2012 and notes thereto contained in the Company’s Annual Report on Form 10-K filed with the SEC.  

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 at both September 30, 2013 and December 31, 2012.

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.

8

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 statements 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, 2013 or December 31, 2012, 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, 2013 and September 30, 2012.

9

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

10

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.

We did not record an income tax provision for the three and nine months ended September 30, 2013 and 2012 because we had a net taxable loss in the period.

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 ended September 30, 2013 and 2012 and the nine months ended September 30, 2013 and 2012.   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,
	2013	2012	2013	2012
Numerator:
Net loss	$ (550,528)	$ (280,769)	$ (2,041,135)	$ (996,002)
Denominator:
Weighted-average common  shares outstanding	7,712,950	7,209,206	7,395,137	7,190,229
Basic and diluted net loss per share	$ (0.07)	$ (0.04)	$ (0.28)	$ (0.14)
Common stock warrants	3,987,744	2,758,266	3,987,744	2,464,471
Series A convertible preferred stock	2,699,690	889,000	2,699,690	843,000
Stock options	1,651,118	658,240	1,651,118	591,179
Convertible debt including interest	856,030	400,025	856,030	395,624
Excluded dilutive securities	9,194,582	4,705,531	9,194,582	4,294,274

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.

11

NOTE 3 – INVENTORY

Inventory consists of the following:

	September 30, 2013	December 31, 2012
Raw materials	$ 271,871	$ 271,312
Finished goods	7,612	11,885
	279,483	283,197
Less:  reserve for excess and obsolete inventory	(151,064)	(151,064)
	$ 128,419	$ 132,133

NOTE 4 – PROPERTY AND EQUIPMENT

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

	September 30, 2013	December 31, 2012
Office equipment	$ 24,584	$ 24,584
Production equipment	88,215	39,791
Leasehold improvements	20,267	13,946
	133,066	78,321
Less:  accumulated depreciation	(60,972)	(42,694)
	$ 72,094	$ 35,627

NOTE 5 - PATENTS AND LICENSES, NET

Our identifiable long-lived intangible assets are patents and prepaid licenses.  Patent and license amortization is $3,578 and $803 for the three months ended September 30, 2013 and 2012, respectively and $6,824 and $2,383 for the nine months ended September 30, 2013 and 2012, 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, 2013	December 31, 2012
Gross carrying amounts-patents and licenses	$ 358,614	$ 188,570
Accumulated amortization	(12,288)	(5,464)
Patents and Licenses, net	$ 346,325	$ 183,106

On July 23, 2013, we were issued a patent in the United States.  We have begun amortizing this patent on this date for a period of 15 years.  The amount capitalized and amortized is $31,325.

On May 1, 2013, we entered into an exclusive license agreement with Penn State Research Foundation (PSRF) for 15 years to market and sell product under a patent issued to PSRF in the United States.  We incurred a license fee of $150,000 for this agreement and we are amortizing it over the life of the agreement.

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NOTE 6 – ACCRUED EXPENSES

Accrued expenses (included with accounts payable) consists of the following at:

	September 30, 2013	December 31, 2012
Executive compensation	$ 384,177	$ 192,552
Royalties	-	4,760
Other accruals	46,093	18,309
	$ 430,270	$ 215,621

NOTE 7 – NOTES PAYABLE

Notes payable consists of the following:

	September 30, 2013	December 31, 2012
Notes payable - current
7.85% unsecured, $781 due monthly	$ 4,237	$ 1,426
4.15% unsecured, $2,678 due monthly	-	21,095
0.00% unsecured, $70,000 due in November 2013 and $70,000 due in May 2014	140,000	-
	$ 144,237	$ 22,521
Convertible notes payable, net
5% unsecured due June 2013, convertible into preferred stock at $5.00 per share	$ -	$ 15,000
8%, unsecured due June 2014  (net of discount related to beneficial conversion feature of $73,505 in 2013 and $35,807 in 2012), convertible into common stock at $0.45 per share	238,995	276,693
6% unsecured due June 2013 (net of discount related to beneficial conversion feature of $0 in 2013 and $4,277 in 2012), convertible into preferred stock at $5.00 per share	-	8,723
5% unsecured due June 2013, convertible into preferred stock at $5.00  per share	-	15,000
8% secured due August 2014 (net of discount related to beneficial conversion feature of $14,350 in 2013 and $0 in 2012), convertible into preferred stock at $5.00 per share	35,650	-
6% unsecured, convertible into common stock at $2.00 per share, due December 2013	50,000	50,000
	$ 324,645	$ 365,416
Convertible notes payable related party, net
6% unsecured due December 2013 (net of discount related to beneficial conversion feature of $0 in 2013 and $11,507 in 2012), convertible into common stock at $2.00 per share	$ -	$ 63,493

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Entia has debt in the principal amount of $412,500 in the form of three convertible notes payable; $50,000 is due on December 31, 2013, $312,500 that matures on June 30, 2014 and $50,000 that matures on August 13, 2014.  

On June 20, 2013, Entia entered into an Amendment and Transfer of Promissory Note agreement with Mark Wolf to extend the maturity date on a promissory note dated February 18, 2010 in the principal amount of $50,000 with interest accruing at 6% per annum from December 31, 2011 to December 31, 2013.  Mr. Wolf also received consent from Entia to transfer ownership of the Promissory Note to Larry Johnson.

On July 1, 2013, Entia was successful in negotiating an extension on the note for $312,500 at a rate of 8% due on June 30, 2014.  This note had accrued interest in the amount of $41,010 as of June 30, 2013.  In exchange for the extension, we issued 200,000 warrants with an exercise price of $0.45 per share with a 3-year term.  All of the warrants vested on July 1, 2013 and were valued using the Black-Scholes valuation model.  The fair value of the warrants was valued at $98,006 and is being amortized over the life of the loan as interest expense.

During the second quarter of 2013, Entia negotiated a conversion of $28,000 of debt and $1,840 of accrued interest that was due on June 30, 2013 and $75,000 of its debt and $11,812 of accrued interest that was due to mature on December 31, 2013 into Series A Preferred stock at $5.00 per share.  

On August 13, 2013, Entia entered into a promissory note for one year at 8% in the principal amount of $50,000.  The note is convertible into the Series A Preferred stock at $5.00 per share and the company granted the creditor warrants to purchase 50,000 shares of Entia’s common stock at $2.00 per share.  We deemed there was no beneficial conversion feature related to the conversion option into the Series A Preferred stock but did post a discount for the value of the warrants and will amortize this expense to interest expense over the life of the note.  The discount of $16,400 is classified as a reduction in the debt and is netted with the debt on the balance sheet.  In addition, the note is secured by corporate property valued at $103,000.

Entia entered into an exclusive license agreement with PSRF for 15 years to market and sell product under a patent issued to PSRF in the United States.  We incurred a license fee of $150,000 for this agreement where we paid $10,000 upfront and we owe $70,000 during fourth quarter of 2013 and another $70,000 due during second quarter of 2014.  This debt does not accrue interest and is classified as a short-term liability on the balance sheet.

NOTE 8 – RELATED PARTY TRANSACTIONS

Debt agreements from board member

Entia issued 131,579 shares of common stock as payment for $50,000 of accrued compensation to its chief executive officer and board member.  The shares were valued at $0.38 per share which resulted in a discount of $15,790 which was posted as a period expense.  

Entia entered into a promissory note with a board member during 2012, for a 6% note for $75,000 maturing on December 31, 2013.  These notes plus accrued interest of $11,812 were converted on June 4, 2013, into Series A preferred stock at $5.00 per share.   

On June 11, 2013, a board member executed a convertible promissory note in the amount of $40,000.  The note stated no interest and was due on July 1, 2013.  We granted the board member a five year warrant to purchase 10,000 shares of common stock at $0.45.   The warrants are to vest 100% on July 1, 2013.  This note was paid off prior to June 30, 2013.

Preferred stock purchase from board member

During the first quarter 2013, a board member purchased 1,000 shares of Series A preferred stock for $5,000 cash.

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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 currently convertible into common stock on a one-for-ten basis.  

During the third quarter 2013, we issued 38,775 shares of Series A preferred stock for $193,875 cash.  One investor immediately converted 10,000 shares of the Series A preferred stock into 100,000 shares of common stock.

During the second quarter 2013, we issued 90,732 shares of Series A preferred stock for the following:

·

37,000 shares for $185,000 cash

·

30,400 shares for converting of $152,001 of accounts payable

·

23,332 shares for converting $116,652 of debt and accrued interest

During the first quarter of 2013, we issued 37,400 shares of Series A preferred stock for $187,000 cash and a note holder converted their $15,000 note along with $750 of accrued interest for 3,162 shares of Series A Preferred stock.  The note was unsecured, accruing interest at 5% per annum and was due to mature on June 30, 2013.

Common stock

During the third quarter 2013, we issued shares of common stock per the following:

·

131,579 shares with a value of $65,790 in exchange for accrued payroll by one of our officers

·

100,000 shares as converted from 10,000 shares of Series A preferred stock

·

11,250 shares to a vendor in association with a consulting agreement signed May 1, 2013

·

We rescinded 10,000 shares with a value of $5,000 from an employee as part of her amended employment agreement that instead granted her stock options.

·

4,000 shares with a value of $1,920 in association with a consulting agreement signed August 1, 2013.

During the second quarter 2013, we issued 131,579 shares of common stock with a value of $59,211 in exchange for accrued payroll by one of our officers.  We also issued 10,000 shares with a value of $5,000 to an employee as part of her employment agreement and another 10,000 shares to a vendor in association with a consulting agreement signed May 1, 2013.

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 1,600,000 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.  On April 29, 2013, the stockholders of Entia approved an increase in the number of shares of common stock for issuance under the Plan by 1,500,000.  This brought the number of options available under the Plan to 3,100,000 authorized.  Stock options are granted at or below the closing price of our stock on the date of grant for terms ranging from four to fifteen years and generally vest over a five year period.  The fair value of option grants were calculated at the date of the grants using the Black-Scholes option pricing model with the following assumptions:

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	September 30, 2013	December 31, 2012
Expected dividend yield	-	-
Expected stock price volatility	229.66% - 236.55%	183.17% - 187.30%
Risk-free interest rate	0.95% - 2.47%	1.27% - 2.80%
Expected term (in years)	5 - 10 years	4 - 10 years
Weighted-average granted date fair value	$0.47	$0.51

A summary of option activity under the stock option plan as of September 30, 2013 and changes during the quarter then ended is presented below:

	Number of Shares	Exercise Price Range	Weighted Average Exercise Price	Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Outstanding, December 31, 2011	659,242	$ 0.47-$1.00	$ 0.62	10	-
Granted	542,857	$ 0.40-$0.50	$ 0.45	9	-
Exercised	-	-	-	-	-
Expired	-	-	-	-	-
Outstanding, December 31, 2012	1,202,099	$ 0.40-$1.00	$ 0.56	7.74	-
Exercisable, December 31, 2012	830,504	$ 0.40-$1.00	$ 0.57	8.19	-
Granted	1,135,000	$ 0.38-$0.50	$ 0.47	8.03	-
Exercised	-	-	$ -	-	-
Expired	-	-	$ -	-	-
Outstanding, September 30, 2013	2,337,099	$ 0.38-$1.00	$ 0.51	7.88	-
Exercisable, September 30, 2013	1,651,118	$ 0.38-$1.00	$ 0.53	7.85	-

The range of exercise prices for options outstanding under the 2010 Stock Incentive Plan at September 30, 2013 are as follows:

Number of	Exercise
shares	Price
55,000	$ 0.38
135,000	$ 0.40
20,000	$ 0.44
540,000	$ 0.45
247,242	$ 0.47
247,857	$ 0.49
854,000	$ 0.50
200,000	$ 0.85
38,000	$ 1.00
2,337,099

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At September 30, 2013, the Company had 762,901 unissued shares available under the Plan.  Also, at September 30, 2013, the Company had $294,690 of total unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a weighted average period of 7 years.

Warrants – Consulting Agreements

Outstanding warrants to purchase common stock are as follows:

Date of Issue	September 30, 2013	Exercise Price	Expiration
September-13	21,118	$0.50	9/2020
August-13	50,000	$2.00	8/2018
July-13	212,400	$0.50	7/2020
June-13	850,852	$0.45 - $5.00	06/2016 - 06/2020
March-13	88	$0.70	03/2017
February-13	35	$5.00	02/2019
January-13	20,201	$0.49 - $5.00	06/2017 - 01/2020
As of December 2012	2,833,050	$0.36 - $10.00	10/2013 - 10/2021
Total	3,987,744

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:

	September 30, 2013	September 30, 2012
Risk-Free interest rate	0.84% - 1.66%	0.84% - 1.08%
Expected dividend yield	0%	0%
Volatility	230.04% - 248.63%	202.65% - 264.48%
Expected life	4 - 7 years	5 - 7 years

At September 30, 2013 and 2012, the weighted-average Black-Scholes value of warrants granted was $1.52 and $0.56, respectively.

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 commenced May 15, 2012 and will terminate on July 31, 2015.  No rent was payable until October 2012.  The base monthly rental rate started at $3,160, increasing to $3,260 in October 2013, and then $3,343 in June 2014.  

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 recorded additional rent expense of $3,197 and $0 for the three months ended September 30, 2013 and 2012, respectively and $10,283

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and $0 for the nine months ended September 30, 2013, respectively and deferred rent accrual of $18,782 and $8,499 at September 30, 2013 and December 31, 2012, respectively.

NOTE 11 – CONCENTRATIONS AND CREDIT RISK

Customers and Credit Concentrations

For the three months ended September 30, 2013, approximately 68% of our net sales were to four customers compared to 46% for the three months ended September 30, 2012.  For the nine months ended September 30, 2013, approximately 41% of our net sales were to four customers compared to approximately 53% for the nine months ended September 30, 2012.  Accounts receivable at September 30, 2013 for these customers accounted for approximately 92% of total accounts receivable compared to 68% at September 30, 2012.

Vendor Concentrations

During the third quarter 2013, approximately 71% of our purchases were from three vendors as compared to 46% from four vendors during third quarter 2012.

NOTE 12 – SUBSEQUENT EVENTS

During the fourth quarter of 2013, Entia issued 19,500 shares of Series A preferred stock to four investors for $97,500 cash.  10,000 shares were immediately converted into 100,000 shares of common stock.

For consideration of waiving the anti-dilution feature of the Series A Preferred Stock, Entia’s board authorized and issued one warrant for one share of common stock for each 2 shares of Series A Preferred Stock issued and outstanding.  This resulted in the issuance of 137,985 warrants to purchase common stock with a 3 year term vesting immediately.

We issued 12,000 shares of common stock in association with two consulting agreements.  The agreements were signed on August 1, 2013 for 2,000 shares and 10,000 shares on October 2, 2013.  

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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” ) is an emerging biotechnology company that has acquired the exclusive world-wide rights to the genetic transporter for Ergothioneine (Ergo), a powerful amino acid.  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.  In the second quarter of 2013, we received Notices of Issuance for the Ergothionene Transporter patent from the United States, Canada and Israel.  Ergo cannot be synthesized by mammals but is acquired exclusively from the diet and carried by this unique and specific transporter 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.  As of the third quarter of 2013, we completed a pre-clinical and clinical study using our formulated medical food, ErgoD2®, containing increased concentrations of the antioxidants Vitamin D2 and Ergo.  Significant results from these studies are expected to be submitted for publication in peer-reviewed medical journals during fourth quarter 2013.

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.   Entia acquired from the Penn State Research Foundation (PSRF) 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.  The patent was issued by the U.S. Patent-Trademark Office to PSRF in December 2012 and, in May 2013, we expanded the commercialization rights for the technology to all ingestible and non-ingestible applications worldwide.  Specifically excluded in this agreement are U.S. supermarket sales of fresh, frozen or canned Agaricus bisporus and any pre-existing rights created by the use of U.S. government funding.

Entia’s commercialization strategy for this technology is to develop and scientifically validate the benefits of proprietary medical food products, high-end cosmetics, 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 with the development 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 and health and beauty” (cosmetics, 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.

Entia’s extraction technologies facilitate the production of two unique organic compounds.  These compounds are utilized in the production of a new line of cosmetic products, to be launched under the GROH® Ergo Boost brand in fourth quarter of 2013.  Initially these products will be launched exclusively through high-end retail salons and spas as Professional Products.  In order to avoid brand and channel conflict during the launch, management ceased marketing GROH® Healthy Hair & Nail supplements directly to the consumer in second quarter 2013 which resulted in an anticipated decrease in revenue that we feel will rebound starting in fourth quarter 2013.   

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Results of Operations for the Three and Nine Months ended September 30, 2013 and 2012.

Revenues and Cost of Goods Sold:

	For the Three Months Ended September 30,		Change
	2013	2012	$	%
Revenues	$ 92,102	$ 72,604	$ 19,498	26.9%
Cost of Goods Sold	33,560	23,611	9,949	42.1%
	For the Nine Months Ended September 30,		Change
	2013	2012	$	%
Revenues	$ 262,245	$ 263,255	$ (1,010)	-0.4%
Cost of Goods Sold	91,547	61,738	29,809	48.3%

Revenues.  Revenues are generated primarily from the sale of our mushroom-based nutraceutical dietary supplement products.  The increase in revenues for the three ended September 30, 2013 from 2012 was due to a focus on our new commercialization strategy.  In order to avoid brand and channel conflict during the launch, management ceased marketing GROH® Healthy Hair & Nail supplements directly to the consumer in second quarter of 2013, which resulted in an anticipated decrease in revenue.  Revenue for the nine months ended September 30, 2013 remained consistent with 2012 even after a decrease in the second quarter of 2013 due to an increase in license fee income.

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, 2013 increased from 2012 due to the product mix sold and cost of freight for inbound materials.  The increase in cost of goods sold during the nine months ended September 30, 2013 from 2012 is due to a credit taken against inventory in 2012 due to an inventory adjustment.  

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
	2013	2012	$	%
Advertising & promotion expenses	$ 23,399	$ 13,259	$ 10,140	76.5%
Professional fees	38,493	33,717	4,776	14.2%
Consulting fees	79,365	38,367	40,998	106.9%
General and Administrative expenses	396,337	193,676	202,661	104.6%

	For the Nine Months Ended September 30,		Change
	2013	2012	$	%
Advertising & promotion expenses	$ 151,672	$ 26,026	$ 125,646	482.8%
Professional fees	115,731	115,021	710	0.6%
Consulting fees	608,104	192,242	415,862	216.3%
General and Administrative expenses	1,202,148	667,240	534,908	80.2%

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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 increase from 2012 is caused by the implementation of the new commercialization strategy, branding, product development and marketing campaign which began during first quarter 2013.

Professional fees.  These expenses primarily include accounting/auditing fees, legal fees and stock transfer fees.  The increase in professional fees from 2012 is due primarily to increased legal, accounting and auditing fees in first three quarters of 2013.

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 increase in these expenses from 2012 is due to the amortization of warrants that were granted to consultants for their services during the first nine months of 2013 totaling approximately $522,000 and for the commissions paid to our consultant for the issuance of the Series A Preferred Stock.

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 2012 is attributable to an increase in stock based compensation and the increase in payroll expenses.

Inflation

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

Significant changes in the number of employees

During third quarter 2013, we had twelve employees; Marvin S. Hausman, M.D., Chief Executive Officer, Devin Andres, Chief Operating Officer and ten other full and part-time employees.  We anticipate continued expansion of our operations and the need to hire additional employees, and contract with additional consultants; however, the exact number is not quantifiable at this time.

Liquidity and Capital Resources

At September 30, 2013, cash totaled $45,355, compared to $13,081 at December 31, 2012.  The primary reasons for the net increase in 2013 are described below.  Working capital was $(1,095,913) at September 30, 2013, compared to $(864,921) at December 31, 2012.  The change in working capital was due primarily to the accrual of the increase in compensation not yet paid to our executive officers and the additional of short-term debt.  The net change in cash for the periods presented was comprised of the following:

		For the Nine Months Ended September 30,		Change
		2013	2012	$	%
Net cash provided by (used in)
	Operating activities	$ (490)	$ (170)	$ (320)	188.2%
	Investing activities	(75)	(72)	(3)	4.2%
	Financing activities	598	240	358	149.2%

Operating Activities.  The increase in net cash flows used from operating activities was due primarily to a larger net loss from operating activities during the nine months ended September 30, 2013.

Investing Activities.  The increase in net cash flows used from investing activities was due primarily to a increase in the acquisitions of patents and patents pending in 2013.

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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 the proceeds from a short-term convertible note payable.

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 2013.

We expect our revenues to increase in the fourth quarter of 2013.  Notwithstanding that expected increase in revenues, we anticipate that we will continue to generate losses in 2013 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 or reduce operating costs or take all of these actions.  

On June 20, 2013, Entia entered into an Amendment and Transfer of Promissory Note agreement with Mark Wolf to extend the maturity date on a promissory note dated February 18, 2010 in the principal amount of $50,000 with interest accruing at 6% per annum from December 31, 2011 to December 31, 2013.  Mr. Wolf also received consent from Entia to transfer ownership of the Promissory Note to Larry Johnson.

We will require additional capital of at least approximately $131,625 during the fourth quarter of 2013 to pay a license fee of $70,000 and to repay $61,625 in debt maturing on December 31, 2013. We intend to raise the monies to repay our debts by undertaking one or more equity private placements.  If necessary, we may also pursue re-negotiation and re-structuring of the debt.  

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 our 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

In October, 2013, Entia issued 19,500 shares of Series A preferred stock to four investors for $97,500 cash.  10,000 shares were immediately converted into 100,000 shares of common stock.

For consideration of waiving the anti-dilution feature of the Series A Preferred Stock, Entia’s board authorized and issued one warrant for one share of common stock for each 2 shares of Series A Preferred Stock issued and outstanding.  This resulted in the issuance of 137,985 warrants to purchase common stock with a 3 year term vesting immediately.

We issued 12,000 shares of common stock in association with two consulting agreements.  The agreements were signed on August 1, 2013 for 2,000 shares and 10,000 shares on October 2, 2013.

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, 2013, we had cash and cash equivalents of $45,355.  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 31, 2013.

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

22

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.

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 September 30, 2013.  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, 2012, Item 9A filed on March 30, 2013 still exist, and therefore our disclosure controls and procedures were not effective as of September 30, 2013.

Changes in Internal Control Over Financial Reporting

As of September 30, 2013, 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, 2013, 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, 2012, 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 up to $1.5 million.  During the third quarter of 2013, we issued an aggregate of 38,775 shares of Series A preferred stock to eight investors for $193,875 cash.  During the second quarter of 2013, we issued an aggregate of 37,000 shares of Series A preferred stock to six investors for $185,000 cash, 30,400 shares of Series A preferred stock for the conversion of $152,001 of accounts payable and 23,332 shares of Series A preferred stock for the conversion of $116,652 of notes payable and accrued interest. During the first quarter 2013, 36,400 shares of Series A preferred stock were issued for $182,000 in cash while 3,162 shares were issued for conversion of notes payable and interest accrued.  On January 17, 2013, an additional 1,000 shares were purchased by Marvin S Hausman, M.D., our CEO, President, Acting CFO and Chairman of the board for $5,000 cash.  Each preferred share is currently 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.

On August 13, 2013 we issued a convertible promissory note to Arthur C. Piculell in the principal amount of $50,000 with interest to accrue at 8% per annum and a maturity date of August 13, 2014.  The note principal and accrued interest are convertible into shares of Series A Preferred Stock at the discretion of Mr. Piculell.  The note is secured by corporate property valued at $103,000.  The issuance of the convertible promissory note was exempt from registration based on 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.

24

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
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

25

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

26

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, 2013	By:	/s/ Marvin Hausman, M.D.
		Marvin Hausman, M.D. Chief Executive Officer (Principal Executive Officer and Acting Principal Financial and Accounting Officer)

27

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, 2013	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, 2013, 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, 2013	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 11 - CONCENTRATIONS AND CREDIT RISK

9 Months Ended

Sep. 30, 2013

Notes to Financial Statements

NOTE 11 - CONCENTRATIONS AND CREDIT RISK

NOTE 11 – CONCENTRATIONS AND CREDIT RISK

Customers and Credit Concentrations

For the three months ended September 30, 2013, approximately 68% of our net sales were to four customers compared to 46% for the three months ended September 30, 2012. For the nine months ended September 30, 2013, approximately 41% of our net sales were to four customers compared to approximately 53% for the nine months ended September 30, 2012. Accounts receivable at September 30, 2013 for these customers accounted for approximately 92% of total accounts receivable compared to 68% at September 30, 2012.

Vendor Concentrations

During the third quarter 2013, approximately 71% of our purchases were from three vendors as compared to 46% from four vendors during third quarter 2012.

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NOTE 4 - PROPERTY AND EQUIPMENT

9 Months Ended

Sep. 30, 2013

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, 2013	December 31, 2012
Office equipment	$ 24,584	$ 24,584
Production equipment	88,215	39,791
Leasehold improvements	20,267	13,946
	133,066	78,321
Less:  accumulated depreciation	(60,972)	(42,694)
	$ 72,094	$ 35,627

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NOTE 6 - ACCRUED EXPENSES (Tables)

9 Months Ended

Sep. 30, 2013

Accounting Policies [Abstract]

Accrued Expenses

	September 30, 2013	December 31, 2012
Executive compensation	$ 384,177	$ 192,552
Royalties	-	4,760
Other accruals	46,093	18,309
	$ 430,270	$ 215,621

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NOTE 12 - SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2013

Subsequent Events [Abstract]

NOTE 12 - SUBSEQUENT EVENTS

NOTE 12 – SUBSEQUENT EVENTS

During the fourth quarter of 2013, Entia issued 19,500 shares of Series A preferred stock to four investors for $97,500 cash. 10,000 shares were immediately converted into 100,000 shares of common stock.

For consideration of waiving the anti-dilution feature of the Series A Preferred Stock, Entia’s board authorized and issued one warrant for one share of common stock for each 2 shares of Series A Preferred Stock issued and outstanding. This resulted in the issuance of 137,985 warrants to purchase common stock with a 3 year term vesting immediately.

We issued 12,000 shares of common stock in association with two consulting agreements. The agreements were signed on August 1, 2013 for 2,000 shares and 10,000 shares on October 2, 2013.

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NOTE 12 - SUBSEQUENT EVENTS (Details Narrative) (USD $)	3 Months Ended
	Dec. 31, 2013 Units	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Oct. 02, 2013	Aug. 01, 2013
Subsequent Events [Abstract]
Series A preferred stock issued for cash	19,500	38,775	37,000	37,400
Cash proceeds from issuance of Series A preferred shares	$ 97,500	$ 193,875	$ 185,000	$ 187,000
Number of investors that bought Series A preferred stock for cash	4
Series A preferred shares converted to common stock	10,000	10,000
Common stock issued for conversion of Series A preferred shares	100,000	100,000
Common stock issued for consulting agreement	12,000
Common stock issued for consulting agreement, instant					10,000	2,000
Warrants issued for a common share per share of Series A preferred stock owned related to anti-dilution feature of the Series A Preferred Stock	1:2
Warrants issued for anti-dilution feature of Series A Preferred Stock	137,985
Warrant term	3 years
Common stock issued to affiliate in exchange for accured payroll		131,579	131,579
Common stock issued to affiliate in exchange for accrued payroll, value		$ 65,790	$ 59,211

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NOTE 7 - NOTES PAYABLE (Details) (Parenthetical) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Due November 2013 on note payable	$ 70,000
Due May 2014 on note payable	70,000
Notes payable - current, 7.85% unsecured, $772 due monthly
Monthly due on note payable	781	772
Interest percent of note payable	7.85%	7.85%
Notes payable - current, 4.15% unsecured, $2,678 due monthly
Monthly due on note payable	2,678	2,678
Interest percent of note payable	4.15%	4.15%
Notes payable - current, 0.00% unsecured, $70,000 due in November 2013 and $70,000 due in May 2014
Interest percent of note payable	0.00%	0.00%
Due November 2013 on note payable	70,000	70,000
Due May 2014 on note payable	70,000	70,000
Convertible Notes payable, net - 5% unsecured due June 2013, convertible into preferred stock at $5.00 per share
Convertible to preferred stock, price per share	$ 5.00	$ 5.00
Interest percent of note payable	5.00%	5.00%
Convertible Notes payable, net - 8%, unsecured note due June 2014 (net of discount related to beneficial conversion feature of $73,505 in 2013 and $35,807 in 2012), convertible into common stock at $0.45 per share
Discount related to beneficial conversion feature	73,505	35,807
Convertible to common stock, price per share	$ 0.45	$ 0.45
Interest percent of note payable	8.00%	6.00%
Convertible Notes - 6% unsecured due June 2013 (net of discount related to beneficial conversion feature of $0 in 2013 and $4,277 in 2012), convertible into preferred stock at $5.00 per share
Discount related to beneficial conversion feature	0	4,277
Convertible to preferred stock, price per share	$ 5.00	$ 5.00
Interest percent of note payable	6.00%	6.00%
Convertible Notes payable, net - 5% unsecured due June 2013, convertible into preferred stock at $5.00 per share
Convertible to preferred stock, price per share	$ 5.00	$ 5.00
Interest percent of note payable	5.00%	5.00%
8% secured due August 2014 (net of discount related to beneficial conversion feature of $14,350 in 2013 and $0 in 2012), convertible into preferred stock at $5.00 per share
Discount related to beneficial conversion feature	14,350	0
Convertible to preferred stock, price per share	$ 5.00	$ 5.00
Interest percent of note payable	8.00%	8.00%
6% unsecured, convertible into common stock at $2.00 per share, due December 2013
Convertible to common stock, price per share	$ 2.00	$ 2.00
Interest percent of note payable	6.00%	6.00%
Convertible Notes payable related party, net - 6% unsecured due December 2013 (net of discount related to beneficial conversion feature of $0 in 2013 and $11,507 in 2012), convertible into common stock at $2.00 per share
Discount related to beneficial conversion feature	$ 0	$ 11,507
Convertible to common stock, price per share	$ 2.00	$ 2.00
Interest percent of note payable	6.00%	6.00%

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NOTE 1 - ORGANIZATION AND OPERATIONS (Details Narrative) (USD $)	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2012	Dec. 31, 2011
Notes to Financial Statements
Cash and cash equivalents	$ 45,355	$ 13,081	$ 14,698	$ 16,639

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

9 Months Ended

Sep. 30, 2013

Option Activity

	Number of Shares	Exercise Price Range	Weighted Average Exercise Price	Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Outstanding, December 31, 2011	659,242	$ 0.47-$1.00	$ 0.62	10	-
Granted	542,857	$ 0.40-$0.50	$ 0.45	9	-
Exercised	-	-	-	-	-
Expired	-	-	-	-	-
Outstanding, December 31, 2012	1,202,099	$ 0.40-$1.00	$ 0.56	7.74	-
Exercisable, December 31, 2012	830,504	$ 0.40-$1.00	$ 0.57	8.19	-
Granted	1,135,000	$ 0.38-$0.50	$ 0.47	8.03	-
Exercised	-	-	$ -	-	-
Expired	-	-	$ -	-	-
Outstanding, September 30, 2013	2,337,099	$ 0.38-$1.00	$ 0.51	7.88	-
Exercisable, September 30, 2013	1,651,118	$ 0.38-$1.00	$ 0.53	7.85	-

Range of Options Exercise Price

Number of	Exercise
shares	Price
55,000	$ 0.38
135,000	$ 0.40
20,000	$ 0.44
540,000	$ 0.45
247,242	$ 0.47
247,857	$ 0.49
854,000	$ 0.50
200,000	$ 0.85
38,000	$ 1.00
2,337,099

Outstanding Warrants

Date of Issue	September 30, 2013	Exercise Price	Expiration
September-13	21,118	$0.50	9/2020
August-13	50,000	$2.00	8/2018
July-13	212,400	$0.50	7/2020
June-13	850,852	$0.45 - $5.00	06/2016 - 06/2020
March-13	88	$0.70	03/2017
February-13	35	$5.00	02/2019
January-13	20,201	$0.49 - $5.00	06/2017 - 01/2020
As of December 2012	2,833,050	$0.36 - $10.00	10/2013 - 10/2021
Total	3,987,744

Option Member

Black-Scholes Option-Pricing Model Assumptions

	September 30, 2013	December 31, 2012
Expected dividend yield	-	-
Expected stock price volatility	229.66% - 236.55%	183.17% - 187.30%
Risk-free interest rate	0.95% - 2.47%	1.27% - 2.80%
Expected term (in years)	5 - 10 years	4 - 10 years
Weighted-average granted date fair value	$0.47	$0.51

Warrant Member

Black-Scholes Option-Pricing Model Assumptions

	September 30, 2013	September 30, 2012
Risk-Free interest rate	0.84% - 1.66%	0.84% - 1.08%
Expected dividend yield	0%	0%
Volatility	230.04% - 248.63%	202.65% - 264.48%
Expected life	4 - 7 years	5 - 7 years

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NOTE 10 - COMMITMENTS AND CONTINGENCIES (Details Narrative) (USD $)	3 Months Ended		8 Months Ended	9 Months Ended		12 Months Ended	14 Months Ended
	Sep. 30, 2013	Jun. 30, 2012	May 31, 2014	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Jul. 31, 2015	Dec. 31, 2012	May 15, 2012 sqft
Notes to Financial Statements
Square feet of leased office and warehouse space									13,081
Monthly rental rate of office space			$ 3,260			$ 3,160	$ 3,343
Period of office lease									3 years
Deferred rent accrual	18,782			18,782		18,782		8,499
Rent expense	$ 3,197	$ 0		$ 10,283	$ 0

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NOTE 5 - PATENTS AND LICENSES, NET - PATENTS AND LICENSES (Details) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Long-Lived Intangible Assets
Gross carrying amounts-patents and licenses	$ 358,614	$ 188,570
Accumulated amortization	(12,288)	(5,464)
Patents and Licenses, net	$ 346,325	$ 183,106

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NOTE 8 - RELATED PARTY TRANSACTIONS (Details Narrative) (USD $)	9 Months Ended	12 Months Ended
	Sep. 30, 2013	Dec. 31, 2012	Jul. 01, 2013	Jun. 11, 2013
Notes to Financial Statements
Amount of accrued compensation owed to CEO converted to common stock	$ 50,000
Common stock issued to CEO for conversion of accured compensation	131,576
Share price of common stock issued to CEO for conversion of accrued compensation	$ 0.38
Discount on shares issued to CEO for conversion of accrued compensation, posted as period expense	15,790
Promissory note due to affiliate, amount, duration		75,000
Promissory note due to affiliate, interest percent, duration		6.00%
Promissory note due to affiliate, amount, instant				40,000
Promissory note due to affiliate, interest percent, instant				0.00%
Promissory note of $40,000 from a board member, maturation date	Jul. 01, 2013
Promissory note of $40,000 from a board member, vesting date	2013-07-01
Warrant granted to $40,000 note holder to purchase shares, amount			200,000	10,000
Period of warrant			3 years	5 years
Warrant exercise price per share			$ 0.45	$ 0.45
Affiliate purchase of Series A Preferred Stock, shares	1,000
Affiliate purchase of Series A Preferred Stock, total price	$ 5,000

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NOTE 3 - INVENTORY (Details) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Inventory
Raw materials	$ 271,871	$ 271,312
Finished goods	7,612	11,885
Inventory gross	279,483	283,197
Less: reserve for excess and obsolete inventory	(151,064)	(151,064)
Inventory net	$ 128,419	$ 132,133

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NOTE 9 - RANGE OF OPTIONS EXERCISE PRICE (Details)	Sep. 30, 2013
Total number of option shares outstanding	2,337,099
Options $0.38
Number of Shares underlying options	55,000
Options $0.40
Number of Shares underlying options	135,000
Options $0.44
Number of Shares underlying options	20,000
Options $0.45
Number of Shares underlying options	540,000
Options $0.47
Number of Shares underlying options	247,242
Options $0.49
Number of Shares underlying options	247,857
Options $0.50
Number of Shares underlying options	634,000
Options $0.85
Number of Shares underlying options	200,000
Options $1.00
Number of Shares underlying options	38,000

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NOTE 7 - NOTES PAYABLE (Tables)

9 Months Ended

Sep. 30, 2013

Debt Disclosure [Abstract]

Notes Payable

	September 30, 2013	December 31, 2012
Notes payable - current
7.85% unsecured, $781 due monthly	$ 4,237	$ 1,426
4.15% unsecured, $2,678 due monthly	-	21,095
0.00% unsecured, $70,000 due in November 2013 and $70,000 due in May 2014	140,000	-
	$ 144,237	$ 22,521
Convertible notes payable, net
5% unsecured due June 2013, convertible into preferred stock at $5.00 per share	$ -	$ 15,000
8%, unsecured due June 2014  (net of discount related to beneficial conversion feature of $73,505 in 2013 and $35,807 in 2012), convertible into common stock at $0.45 per share	238,995	276,693
6% unsecured due June 2013 (net of discount related to beneficial conversion feature of $0 in 2013 and $4,277 in 2012), convertible into preferred stock at $5.00 per share	-	8,723
5% unsecured due June 2013, convertible into preferred stock at $5.00  per share	-	15,000
8% secured due August 2014 (net of discount related to beneficial conversion feature of $14,350 in 2013 and $0 in 2012), convertible into preferred stock at $5.00 per share	35,650	-
6% unsecured, convertible into common stock at $2.00 per share, due December 2013	50,000	50,000
	$ 324,645	$ 365,416
Convertible notes payable related party, net
6% unsecured due December 2013 (net of discount related to beneficial conversion feature of $0 in 2013 and $11,507 in 2012), convertible into common stock at $2.00 per share	$ -	$ 63,493

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (2,001,335)	$ (974,602)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation/amortization	25,104	16,290
Gain on extinguishment of note payable	0	(75,315)
Amortization of discount on convertible notes	78,142	179,110
Stock-based compensation	875,343	420,801
Changes in operating assets and liabilities:
Accounts receivable	(30,867)	9,693
Inventory	3,714	14,915
Prepaid expenses	19,027	21,924
Other current assets	(512)	0
Accounts payable and accrued expenses	541,569	217,395
NET CASH USED IN OPERATING ACTIVITIES	(489,815)	(169,789)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(55,448)	(14,906)
Acquisition of patents and patents pending (net)	(20,044)	(57,315)
NET CASH USED IN INVESTING ACTIVITIES	(75,492)	(72,221)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock, preferred stock and warrants	565,865	211,999
Proceeds from convertible notes payable short-term	50,000	13,000
Net change in notes payable	(18,284)	(9,930)
Proceeds from convertible note payable-related party	0	25,000
NET CASH PROVIDED BY FINANCING ACTIVITIES	597,581	240,069
NET CHANGE IN CASH	32,274	(1,941)
Cash at beginning of period	13,081	16,639
Cash at end of period	45,355	14,698
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
Interest paid	906	893
Taxes paid	0	0
SUPPLEMENTAL DISCLOSURE OF NONCASH FLOWS FINANCING AND INVESTING ACTIVITIES:
Deemed distribution	(39,800)	(21,400)
Conversion of accounts payable, accrued compensation, notes payable and accrued interest to preferred stock and common stock	414,404	10,000
Warrants issued for extinguishment of debt	0	48,533
Stock issued for license	0	25,501
Stock issued for note receivable	0	59,000
Debt issued for license	$ 140,000	$ 0

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2013

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 adjustments) 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, 2012 and notes thereto contained in the Company’s Annual Report on Form 10-K filed with the SEC.

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 at both September 30, 2013 and December 31, 2012.

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 statements 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, 2013 or December 31, 2012, 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, 2013 and September 30, 2012.

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.

We did not record an income tax provision for the three and nine months ended September 30, 2013 and 2012 because we had a net taxable loss in the period.

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 ended September 30, 2013 and 2012 and the nine months ended September 30, 2013 and 2012. 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,
	2013	2012	2013	2012
Numerator:
Net loss	$ (550,528)	$ (280,769)	$ (2,041,135)	$ (996,002)
Denominator:
Weighted-average common shares outstanding	7,712,950	7,209,206	7,395,137	7,190,229
Basic and diluted net loss per share	$ (0.07)	$ (0.04)	$ (0.28)	$ (0.14)
Common stock warrants	3,987,744	2,758,266	3,987,744	2,464,471
Series A convertible preferred stock	2,699,690	889,000	2,699,690	843,000
Stock options	1,651,118	658,240	1,651,118	591,179
Convertible debt including interest	856,030	400,025	856,030	395,624
Excluded dilutive securities	9,194,582	4,705,531	9,194,582	4,294,274

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 5 - PATENTS AND LICENSES, NET

9 Months Ended

Sep. 30, 2013

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 $3,578 and $803 for the three months ended September 30, 2013 and 2012, respectively and $6,824 and $2,383 for the nine months ended September 30, 2013 and 2012, 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, 2013	December 31, 2012
Gross carrying amounts-patents and licenses	$ 358,614	$ 188,570
Accumulated amortization	(12,288)	(5,464)
Patents and Licenses, net	$ 346,325	$ 183,106

On July 23, 2013, we were issued a patent in the United States. We have begun amortizing this patent on this date for a period of 15 years. The amount capitalized and amortized is $31,325.

On May 1, 2013, we entered into an exclusive license agreement with Penn State Research Foundation (PSRF) for 15 years to market and sell product under a patent issued to PSRF in the United States. We incurred a license fee of $150,000 for this agreement and we are amortizing it over the life of the agreement.

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NOTE 3 - INVENTORY

9 Months Ended

Sep. 30, 2013

Inventory Disclosure [Abstract]

NOTE 3 - INVENTORY

NOTE 3 – INVENTORY

Inventory consists of the following:

	September 30, 2013	December 31, 2012
Raw materials	$ 271,871	$ 271,312
Finished goods	7,612	11,885
	279,483	283,197
Less:  reserve for excess and obsolete inventory	(151,064)	(151,064)
	$ 128,419	$ 132,133

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NOTE 9 - STOCKHOLDERS' EQUITY (DEFICIT) - BLACK-SCHOLES OPTION-PRICING MODEL ASSUMPTIONS (Details) (USD $)	9 Months Ended	12 Months Ended	9 Months Ended
	Sep. 30, 2013 Option Member	Dec. 31, 2012 Option Member	Sep. 30, 2013 Warrant Member	Sep. 30, 2012 Warrant Member
Risk-Free interest rate, minimum	0.95%	1.27%	0.84%	0.84%
Risk-Free interest rate, maximum	2.47%	2.80%	1.66%	1.08%
Expected dividend yield	0.00%	0.00%	0.00%	0.00%
Expected stock price volatility, minimum	229.66%	183.17%	230.04%	202.65%
Expected stock price volatility, maximum	236.55%	187.30%	248.63%	264.48%
Expected term (in years), minimum	5 years	4 years	4 years	5 years
Expected term (in years), maximum	10 years	10 years	7 years	7 years
Weighted-average granted date fair value	$ 0.47	$ 0.51	$ 0.45	$ 0.56

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NOTE 2 - ESTIMATED USEFUL LIVES OF THE ASSETS (Details)	Sep. 30, 2013
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
Leasehold improvements	Lesser of lease term or useful life of improvement

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NOTE 4 - PROPERTY AND EQUIPMENT - PROPERTY AND EQUIPMENT (Details) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Property and Equipment
Office equipment	$ 24,585	$ 24,584
Production equipment	88,215	39,791
Leasehold improvements	20,267	13,946
Property and Equipment Gross	133,066	78,321
Less: accumulated depreciation	(60,972)	(42,694)
Property and Equipment Net	$ 72,094	$ 35,627

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NOTE 7 - NOTES PAYABLE (Details) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Notes payable - current, 7.85% unsecured, $772 due monthly
Notes payable	$ 4,237	$ 1,426
Notes payable - current, 4.15% unsecured, $2,678 due monthly
Notes payable	0	21,095
Notes payable - current, 0.00% unsecured, $70,000 due in November 2013 and $70,000 due in May 2014
Notes payable	140,000	0
Notes Payable Current Total
Notes payable	144,237	22,521
Convertible Notes payable, net - 5% unsecured due June 2013, convertible into preferred stock at $5.00 per share
Notes payable	0	15,000
Convertible Notes payable, net - 8%, unsecured note due June 2014 (net of discount related to beneficial conversion feature of $73,505 in 2013 and $35,807 in 2012), convertible into common stock at $0.45 per share
Notes payable	238,995	276,693
Convertible Notes - 6% unsecured due June 2013 (net of discount related to beneficial conversion feature of $0 in 2013 and $4,277 in 2012), convertible into preferred stock at $5.00 per share
Notes payable	0	8,273
Convertible Notes payable, net - 5% unsecured due June 2013, convertible into preferred stock at $5.00 per share
Notes payable	0	15,000
8% secured due August 2014 (net of discount related to beneficial conversion feature of $14,350 in 2013 and $0 in 2012), convertible into preferred stock at $5.00 per share
Notes payable	35,650	0
6% unsecured, convertible into common stock at $2.00 per share, due December 2013
Notes payable	50,000	50,000
Convertible Notes Payable Net Total
Notes payable	324,645	365,416
Convertible Notes payable related party, net - 6% unsecured due December 2013 (net of discount related to beneficial conversion feature of $0 in 2013 and $11,507 in 2012), convertible into common stock at $2.00 per share
Notes payable	$ 0	$ 63,493

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NOTE 9 - STOCKHOLDERS' EQUITY (DEFICIT) (Details Narrative) (USD $)	3 Months Ended				12 Months Ended
	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Apr. 29, 2013	Sep. 30, 2012	Mar. 31, 2012	May 26, 2011	Sep. 17, 2010
Preferred Stock
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
Basis that Series A Preferred stock is convertible into common stock									1:10
Series A preferred stock issued for cash	19,500	38,775	37,000	37,400
Cash proceeds from issuance of Series A preferred stock	$ 97,500	$ 193,875	$ 185,000	$ 187,000
Series A preferred shares converted to common stock	10,000	10,000
Common stock issued for conversion of Series A preferred shares	100,000	100,000
Series A preferred stock issued in exchange for conversion of note payable			23,332	3,162
Note payable amount cancelled in exchange for Series A preferred shares			116,652	15,000
Accrued interest amount of note payable cancelled in exchange for Series A preferred shares				750
Interest rate of note payable coverted into Series A preferrred shares				5.00%
Maturity date of note payable coverted into Series A preferrred shares				Jun. 30, 2013
Series A preferred stock issued in exchange for conversion of accounts payable			30,400
Accounts payable amount cancelled in exchange for Series A preferred shares			152,001
Series A preferred stock issued		90,732
Common Stock
Common stock issued to affiliate in exchange for accured payroll		131,579	131,579
Common stock issued to affiliate in exchange for accrued payroll, value		65,790	59,211
Common stock issued for employee agreement			10,000
Value of stock issued for employee agreement			5,000
Common stock issued for vendor consulting agreement signed May 1, 2013		11,250	10,000
Common stock issued for conversion of Series A Preferred Shares	100,000	100,000
Number of common shares rescinded from employee and stock options granted instead		10,000
Value of common shares rescinded from employee related to stock options granted instead		5,000
Common stock issued for consulting agreement	12,000
Stock incentive plan
Common shares reserved for the 2010 Stock Incentive Plan						3,100,000				1,600,000
2010 Stock Incentive Plan increase in shares reserved						1,500,000
Annual increase in reserved shares of the 2010 Stock Incentive Plan					50,000
Unissued option shares available under the Plan		762,901
Total unrecognized compensation cost related to unvested stock options		$ 294,690
Weighted average period to recognize compensation cost related to unvested stock options (in years)		7 years
Warrants - Consulting Agreements
Weighted-average Black-Scholes value of warrants granted		$ 1.52					$ 0.56	$ 0.89

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Sep. 30, 2013	Dec. 31, 2012
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	269,969	109,900
Preferred stock, aggregate liquidation value	$ 1,349,845	$ 549,500
Common Stock
Common Stock, par value	$ 0.001	$ 0.001
Common stock, authorized	150,000,000	150,000,000
Common stock, Issued	7,832,999	7,444,591

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NOTE 8 - RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2013

Related Party Transactions [Abstract]

NOTE 8 - RELATED PARTY TRANSACTIONS

NOTE 8 – RELATED PARTY TRANSACTIONS

Debt agreements from board member

Entia issued 131,579 shares of common stock as payment for $50,000 of accrued compensation to its chief executive officer and board member. The shares were valued at $0.38 per share which resulted in a discount of $15,790 which was posted as a period expense.

Entia entered into a promissory note with a board member during 2012, for a 6% note for $75,000 maturing on December 31, 2013. These notes plus accrued interest of $11,812 were converted on June 4, 2013, into Series A preferred stock at $5.00 per share.

On June 11, 2013, a board member executed a convertible promissory note in the amount of $40,000. The note stated no interest and was due on July 1, 2013. We granted the board member a five year warrant to purchase 10,000 shares of common stock at $0.45. The warrants are to vest 100% on July 1, 2013. This note was paid off prior to June 30, 2013.

Preferred stock purchase from board member

During the first quarter 2013, a board member purchased 1,000 shares of Series A preferred stock for $5,000 cash.

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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, 2011	$ 44	$ 7,171	$ 4,272,792	$ (497,383)		$ (4,042,476)	$ (259,752)
Beginning Balance, Shares at Dec. 31, 2011	43,500	7,171,175
Issuance of preferred stock for cash, Shares	57,400
Issuance of preferred stock for cash, Amount	57		286,942				286,999
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		100,000
Issuance of common stock and warrants for cash, Amount		100	39,900				40,000
Issuance of common stock for note receivable, Shares		122,500
Issuance of common stock for note receivable, Amount		122	48,878		(49,000)
Stock compensation, Amount		1	170,456				170,456
Issuance of warrants for services			128,540	(128,540)
Issuance of warrants for extension on debt			48,533				48,533
Amortization of deferred compensation				231,413			231,413
Net loss						(1,264,148)	(1,264,148)
Ending Balance, amount at Dec. 31, 2012	110	7,444	5,115,587	(394,510)	(49,000)	(5,327,924)	(648,293)
Ending Balance, shares at Dec. 31, 2012	109,900	7,444,591
Issuance of preferred stock for cash, Shares	113,175
Issuance of preferred stock for cash, Amount	113		565,762				565,762
Issuance of preferred stock for cancellation of debt, Shares	3,162
Issuance of preferred stock for cancellation of debt, Amount	3		15,747				15,750
Deemed dividend related to beneficial conversion feature of convertible preferred stock, Shares			39,800				(39,800)
Issuance of preferred stock for conversion of convertible notes payable, Shares	23,332
Issuance of preferred stock for conversion of convertible notes payable, Amount	23		116,629				116,652
Issuance of preferred stock for conversion of accounts payable, Shares	30,400
Issuance of preferred stock for conversion of accounts payable, Amount	31		151,970				152,001
Issuance of common stock for conversion of preferred stock, Shares	(10,000)	100,000
Issuance of common stock for conversion of preferred stock, Amount	(10)	100	(90)
Issuance of common stock for conversion of accrued compensation, Shares		273,158
Issuance of common stock for conversion of accrued compensation, Amount		274	129,727				130,001
Issuance of common stock for services, Shares		15,250
Issuance of common stock for services, Amount		15	7,529				7,544
Stock compensation, Amount			345,391				345,391
Issuance of warrants for services			360,442	(360,442)
Issuance of warrants for extension on debt			98,006				98,006
Amortization of deferred compensation				522,409			522,409
Net loss						(2,001,335)	(2,001,335)
Ending Balance, amount at Sep. 30, 2013	$ 270	$ 7,833	$ 6,962,900	$ (232,543)	$ (49,000)	$ (7,369,059)	$ (679,599)
Ending Balance, shares at Sep. 30, 2013	269,969	7,832,999

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CONSOLIDATED BALANCE SHEETS (USD $)	Sep. 30, 2013	Dec. 31, 2012
Current Assets:
Cash	$ 45,355	$ 13,081
Accounts receivable, net	93,264	62,397
Inventory, net	128,419	132,133
Interest income receivable	4,595	4,083
Prepaid expenses	13,515	32,542
Total Current Assets	285,148	244,236
Property and Equipment, net	72,094	35,627
Patents and license, net	346,325	183,106
Total Assets	703,567	462,969
Current Liabilities:
Accounts payable and accrued expenses	911,477	654,919
Short-term convertible notes payable, net of discount related-party	0	63,493
Short-term convertible notes payable, net of discount	324,645	365,416
Capital lease payable	702	2,808
Notes payable	144,237	22,521
Total Current Liabilities	1,381,061	1,109,157
Long Term Liabilities:
Capital lease payable	2,105	2,105
Total Long Term Liabilities	2,105	2,105
Total Liabilities	1,383,166	1,111,262
Stockholders' Equity (Deficit):
Preferred stock, $.001 par value, 5,000,000 shares authorized, Series A preferred stock, 350,000 shares designated, 241,194 and 109,900 shares issued and outstanding, resepecively, aggregate liquidation value of $1,205,970 and $549,500, respectively	270	110
Common stock, $.001 par value, 150,000,000 shares authorized, 7,596,170 and 7,444,591 shares issued and outstanding	7,833	7,444
Stock subscription receivable	(49,000)	(49,000)
Additional paid-in capital	6,962,900	5,115,587
Deferred compensation	(232,543)	(394,510)
Accumulated deficit	(7,369,059)	(5,327,924)
Total Stockholders' Equity (Deficit)	(679,599)	(648,293)
Total Liabilities and Stockholders' Equity (Deficit)	$ 703,567	$ 462,969

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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, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Reconciliation Of Basic Loss Per Share And Excluded Dilutive Securities
Numerator: Net loss applicable to common shareholders	$ (550,528)	$ (280,769)	$ (2,041,135)	$ (996,002)
Denominator: Weighted-average common shares outstanding	7,712,950	7,209,206	7,395,137	7,190,229
Basic and diluted net loss per share	$ (0.07)	$ (0.04)	$ (0.28)	$ (0.14)
Common stock warrants	3,987,744	2,758,266	3,987,744	2,464,471
Series A convertible preferred stock	2,699,690	889,000	2,699,690	843,000
Stock options	1,651,118	658,240	1,651,118	591,179
Convertible debt including interest	856,030	400,025	856,030	395,624
Excluded dilutive securities	9,194,582	4,705,531	9,194,582	4,294,274

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NOTE 5 - PATENTS AND LICENSES, NET (Tables)

9 Months Ended

Sep. 30, 2013

Notes to Financial Statements

Patents and Licenses

	September 30, 2013	December 31, 2012
Gross carrying amounts-patents and licenses	$ 358,614	$ 188,570
Accumulated amortization	(12,288)	(5,464)
Patents and Licenses, net	$ 346,325	$ 183,106

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NOTE 9 - OUTSTANDING WARRANTS (Details) (USD $)			1 Months Ended
	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2013 Issued Warrants	Aug. 31, 2013 Issued Warrants	Jul. 31, 2013 Issued Warrants	Jun. 30, 2013 Issued Warrants	May 30, 2013 Issued Warrants	Apr. 30, 2013 Issued Warrants	Mar. 31, 2013 Issued Warrants	Feb. 28, 2013 Issued Warrants	Jan. 31, 2013 Issued Warrants
Warrants issued, shares			21,118	50,000	212,400	850,852	0	0	88	35	20,201
Exercise price, per share, minimum			$ 0.50	$ 2.00	$ 0.50	$ 0.45	$ 0	$ 0	$ 0.70	$ 5.00	$ 0.49
Exercise price, per share, maximum			$ 0.50	$ 2.00	$ 0.50	$ 5.00	$ 0	$ 0	$ 0.70	$ 5.00	$ 5.00
Exercise price, per share, minimum, instant		$ 0.36
Exercise price, per share, maximum, instant		$ 10.00
Expiration date, earliest			2020-09	2018-08	2020-07	2016-06			2017-03	2019-02	2017-06
Expiration date, latest						2020-06			2017-03	2019-02	2020-01
Expiration date, earliest, instant		2013-10
Expiration date, latest, instant		2021-10
Warrants outstanding	3,987,744	2,833,050

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NOTE 7 - NOTES PAYABLE (Details Narrative) (USD $)	3 Months Ended
	Sep. 30, 2013 Units	Jun. 30, 2013	Aug. 13, 2013	Jul. 01, 2013	Jun. 11, 2013	May 01, 2013
Notes to Financial Statements
Mature convertible notes payable in aggregate	$ 412,500
Number of convertible notes payable outstanding	3
Amount of June 30, 2013 note payable	312,500			312,500
Amount of August 13, 2014 note payable	50,000
Extension on note February 18, 2010, note due June 30, 2013	1 year			1 year
Interest rate on June 30, 2013 extended note	8.00%			8.00%
Amount of February 18, 2012, notes payable due December 31, 2013	50,000
Interest rate on February 18, 2010 note payable	6.00%
Debt converted to Series A preferred stock, June 30, 2013 maturity		28,000
Debt converted to Series A preferred stock, December 31, 2013 maturity		75,000
Price per share of debt converted to Series A preferred stock		$ 5.00
Accrued interest converted to Series A preferred stock, June 30, 2013 maturity		1,840
Accrued interest converted to Series A preferred stock, December 31, 2013 maturity		11,812
Price per share of accrued interest converted to Series A preferred stock		$ 5.00
Amount of August 13, 2013, notes payable due August 13, 2014			50,000
Interest rate on August 13, 2013 note			8.00%
Convertible to Series A Preferred stock for August 13, 2013 lender, per share price			$ 5.00
Warrants issued to August 13, 2013 lender			50,000
Exercise price of August 13, 2013 lender warrants per share			$ 2.00
Discount on August 13, 2013 lender August 13, 2013 lender agreement classified as reduction in debt			16,400
August 13, 2013 lender note secured by property, value			103,000
PSRF license agreement period	15 years					15 years
License fee owed to PSRF on exclusive license agreement	150,000					150,000
Upfront payment on $150,000 license fee to PSRF	10,000
Due fourth quarter of 2013 on $150,000 license fee payable to PSRF	70,000
Due second quarter of 2014 on $150,000 license fee payable to PSRF	70,000
Interest rate of license fee payable to PSRF	0.00%
Amount of note payable due on June 30, 2013	312,500			312,500
Amount of accrued interest on note payable that was due June 30, 2014				41,010
Extension on note due June 30, 2013	1 year			1 year
Interest rate of June 30, 2013 extended note	8.00%			8.00%
Warrant granted to note holder to extend note, amount				200,000	10,000
Period of warrant				3 years	5 years
Warrant exercise price per share				$ 0.45	$ 0.45
Fair value of warrants granted to note holder				$ 98,006

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NOTE 5 - PATENTS AND LICENSES, NET (Details Narrative) (USD $)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012	Jul. 23, 2013	May 01, 2013
Notes to Financial Statements
Patent and license amortization	$ 3,578	$ 803	$ 6,824	$ 2,383
Amortization of licenses over economic useful life			17 years
PSRF license agreement period	15 years		15 years				15 years
PSRF license fee	150,000		150,000				150,000
License acquired for stock, fair value					25,501
Patent amortization period						15 years
Patent amount capitalized and amortized						$ 31,325

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NOTE 6 - ACCRUED EXPENSES (Details) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Notes to Financial Statements
Executive compensation	$ 384,177	$ 192,552
Royalties	0	4,760
Other accruals	46,093	18,309
Total accrued expenses	$ 430,270	$ 215,621

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NOTE 7 - NOTES PAYABLE

9 Months Ended

Sep. 30, 2013

Debt Disclosure [Abstract]

NOTE 7 - NOTES PAYABLE

NOTE 7 – NOTES PAYABLE

Notes payable consists of the following:

	September 30, 2013	December 31, 2012
Notes payable - current
7.85% unsecured, $781 due monthly	$ 4,237	$ 1,426
4.15% unsecured, $2,678 due monthly	-	21,095
0.00% unsecured, $70,000 due in November 2013 and $70,000 due in May 2014	140,000	-
	$ 144,237	$ 22,521
Convertible notes payable, net
5% unsecured due June 2013, convertible into preferred stock at $5.00 per share	$ -	$ 15,000
8%, unsecured due June 2014  (net of discount related to beneficial conversion feature of $73,505 in 2013 and $35,807 in 2012), convertible into common stock at $0.45 per share	238,995	276,693
6% unsecured due June 2013 (net of discount related to beneficial conversion feature of $0 in 2013 and $4,277 in 2012), convertible into preferred stock at $5.00 per share	-	8,723
5% unsecured due June 2013, convertible into preferred stock at $5.00  per share	-	15,000
8% secured due August 2014 (net of discount related to beneficial conversion feature of $14,350 in 2013 and $0 in 2012), convertible into preferred stock at $5.00 per share	35,650	-
6% unsecured, convertible into common stock at $2.00 per share, due December 2013	50,000	50,000
	$ 324,645	$ 365,416
Convertible notes payable related party, net
6% unsecured due December 2013 (net of discount related to beneficial conversion feature of $0 in 2013 and $11,507 in 2012), convertible into common stock at $2.00 per share	$ -	$ 63,493

Entia has debt in the principal amount of $412,500 in the form of three convertible notes payable; $50,000 is due on December 31, 2013, $312,500 that matures on June 30, 2014 and $50,000 that matures on August 13, 2014.

On June 20, 2013, Entia entered into an Amendment and Transfer of Promissory Note agreement with Mark Wolf to extend the maturity date on a promissory note dated February 18, 2010 in the principal amount of $50,000 with interest accruing at 6% per annum from December 31, 2011 to December 31, 2013. Mr. Wolf also received consent from Entia to transfer ownership of the Promissory Note to Larry Johnson.

On July 1, 2013, Entia was successful in negotiating an extension on the note for $312,500 at a rate of 8% due on June 30, 2014. This note had accrued interest in the amount of $41,010 as of June 30, 2013. In exchange for the extension, we issued 200,000 warrants with an exercise price of $0.45 per share with a 3-year term. All of the warrants vested on July 1, 2013 and were valued using the Black-Scholes valuation model. The fair value of the warrants was valued at $98,006 and is being amortized over the life of the loan as interest expense.

During the second quarter of 2013, Entia negotiated a conversion of $28,000 of debt and $1,840 of accrued interest that was due on June 30, 2013 and $75,000 of its debt and $11,812 of accrued interest that was due to mature on December 31, 2013 into Series A Preferred stock at $5.00 per share.

On August 13, 2013, Entia entered into a promissory note for one year at 8% in the principal amount of $50,000. The note is convertible into the Series A Preferred stock at $5.00 per share and the company granted the creditor warrants to purchase 50,000 shares of Entia’s common stock at $2.00 per share. We deemed there was no beneficial conversion feature related to the conversion option into the Series A Preferred stock but did post a discount for the value of the warrants and will amortize this expense to interest expense over the life of the note. The discount of $16,400 is classified as a reduction in the debt and is netted with the debt on the balance sheet. In addition, the note is secured by corporate property valued at $103,000.

Entia entered into an exclusive license agreement with PSRF for 15 years to market and sell product under a patent issued to PSRF in the United States. We incurred a license fee of $150,000 for this agreement where we paid $10,000 upfront and we owe $70,000 during fourth quarter of 2013 and another $70,000 due during second quarter of 2014. This debt does not accrue interest and is classified as a short-term liability on the balance sheet.

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) (USD $)	9 Months Ended
	Sep. 30, 2013	Dec. 31, 2012
Notes to Financial Statements
Allowance for doubtful accounts	$ 2,526	$ 2,526
Accounts receivable past due period	30 days
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 9 - OPTION ACTIVITY (Details) (USD $)				9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2013 Outstanding	Dec. 31, 2012 Outstanding	Dec. 31, 2011 Outstanding	Sep. 30, 2013 Granted	Dec. 31, 2012 Granted	Sep. 30, 2013 Exercised	Dec. 31, 2012 Exercised	Sep. 30, 2013 Expired	Dec. 31, 2012 Expired	Sep. 30, 2013 Exercisable	Dec. 31, 2012 Exercisable
Number of Shares, instant	2,337,099	1,202,099	659,242							1,651,118	830,504
Number of Shares, duration				1,135,000	542,857	0	0	0	0
Exercise Price Range, instant, minimum	$ 0.38	$ 0.40	$ 0.47							$ 0.38	$ 0.40
Exercise Price Range, instant, maximum	$ 1.00	$ 1.00	$ 1.00							$ 1.00	$ 1.00
Exercise Price Range, duration, minimum				$ 0.38	$ 0.40	$ 0	$ 0	$ 0	$ 0
Exercise Price Range, duration, maximum				$ 0.50	$ 0.50	$ 0	$ 0	$ 0	$ 0
Weighted Average Exercise Price, instant	$ 0.51	$ 0.56	$ 0.62							$ 0.53	$ 0.57
Weighted Average Exercise Price, duration				$ 0.47	$ 0.45	$ 0	$ 0	$ 0	$ 0
Weighted Average Remaining Contractual Life (in years), instant	7 years 10 months	7 years 9 months	10 years							7 years 10 months	8 years 2 months
Weighted Average Remaining Contractual Life (in years), duration				8 years	9 years	0 years	0 years	0 years	0 years
Aggregate Intrinsic Value, instant	$ 0	$ 0	$ 0							$ 0	$ 0
Aggregate Intrinsic Value, duration				$ 0	$ 0	$ 0	$ 0	$ 0	$ 0

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NOTE 10 - COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2013

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 commenced May 15, 2012 and will terminate on July 31, 2015. No rent was payable until October 2012. The base monthly rental rate started at $3,160, increasing to $3,260 in October 2013, and then $3,343 in June 2014.

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 recorded additional rent expense of $3,197 and $0 for the three months ended September 30, 2013 and 2012, respectively and $10,283 and $0 for the nine months ended September 30, 2013, respectively and deferred rent accrual of $18,782 and $8,499 at September 30, 2013 and December 31, 2012, respectively.

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NOTE 6 - ACCRUED EXPENSES

9 Months Ended

Sep. 30, 2013

Accounting Policies [Abstract]

NOTE 6 - ACCRUED EXPENSES

NOTE 6 – ACCRUED EXPENSES

Accrued expenses (included with accounts payable) consists of the following at:

	September 30, 2013	December 31, 2012
Executive compensation	$ 384,177	$ 192,552
Royalties	-	4,760
Other accruals	46,093	18,309
	$ 430,270	$ 215,621

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NOTE 1 - ORGANIZATION AND OPERATIONS

9 Months Ended

Sep. 30, 2013

Accounting Policies [Abstract]

NOTE 1 - ORGANIZATION AND OPERATIONS

NOTE 1 – ORGANIZATION AND OPERATIONS

On January 9, 2012, the Nevada Secretary of State accepted an amendment to our Articles of Incorporation to change the name 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 May 15, 2012, Entia moved to its current location 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. During second quarter of 2013, we added five new clean rooms and integrated the production and manufacturing of our cosmetic products which will significantly increase efficiencies while reducing costs.

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, which includes the completion of an ErgoD2 study on a diabetic population in Curacao. At September 30, 2013, we had cash and cash equivalents of $45,355. 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 31, 2013.

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 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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NOTE 11 - CONCENTRATIONS AND CREDIT RISK (Details Narrative)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Notes to Financial Statements
Net sales to four customers	68.00%	46.00%	41.00%	53.00%
Number of customers that made up customer concentration	4	4	4	4
Accounts receivable percentage of two specific customers	92.00%	68.00%	92.00%	68.00%
Percent of purchases from one vendor	71.00%	46.00%
Number of vendors that made up vendor concentration	3	4

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NOTE 4 - PROPERTY AND EQUIPMENT (Details Narrative) (USD $) (USD $)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Property and Equipment
Depreciation expense	$ 25,104	$ 16,290

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2013

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 adjustments) 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, 2012 and notes thereto contained in the Company’s Annual Report on Form 10-K filed with the SEC.

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 at both September 30, 2013 and December 31, 2012.

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 statements 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, 2013 or December 31, 2012, 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, 2013 and September 30, 2012.

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.

Amounts charged to customers for shipping products are included in revenues and the related costs are classified in cost of goods sold as incurred. In 2012 and 2011, we incurred $26,059 and $32,784, respectively, in shipping costs included in cost of goods sold.

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 costs

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

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.

We did not record an income tax provision for the three and nine months ended September 30, 2013 and 2012 because we had a net taxable loss in the period.

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 ended September 30, 2013 and 2012 and the nine months ended September 30, 2013 and 2012. 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,
	2013	2012	2013	2012
Numerator:
Net loss	$ (550,528)	$ (280,769)	$ (2,041,135)	$ (996,002)
Denominator:
Weighted-average common shares outstanding	7,712,950	7,209,206	7,395,137	7,190,229
Basic and diluted net loss per share	$ (0.07)	$ (0.04)	$ (0.28)	$ (0.14)
Common stock warrants	3,987,744	2,758,266	3,987,744	2,464,471
Series A convertible preferred stock	2,699,690	889,000	2,699,690	843,000
Stock options	1,651,118	658,240	1,651,118	591,179
Convertible debt including interest	856,030	400,025	856,030	395,624
Excluded dilutive securities	9,194,582	4,705,531	9,194,582	4,294,274

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, 2013

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 currently convertible into common stock on a one-for-ten basis.

During the third quarter 2013, we issued 38,775 shares of Series A preferred stock for $193,875 cash. One investor immediately converted 10,000 shares of the Series A preferred stock into 100,000 shares of common stock.

During the second quarter 2013, we issued 90,732 shares of Series A preferred stock for the following:

· 37,000 shares for $185,000 cash

· 30,400 shares for converting of $152,001 of accounts payable

· 23,332 shares for converting $116,652 of debt and accrued interest

During the first quarter of 2013, we issued 37,400 shares of Series A preferred stock for $187,000 cash and a note holder converted their $15,000 note along with $750 of accrued interest for 3,162 shares of Series A Preferred stock. The note was unsecured, accruing interest at 5% per annum and was due to mature on June 30, 2013.

Common stock

During the third quarter 2013, we issued shares of common stock per the following:

· 131,579 shares with a value of $65,790 in exchange for accrued payroll by one of our officers

· 100,000 shares as converted from 10,000 shares of Series A preferred stock

· 11,250 shares to a vendor in association with a consulting agreement signed May 1, 2013

· We rescinded 10,000 shares with a value of $5,000 from an employee as part of her amended employment agreement that instead granted her stock options.

· 4,000 shares with a value of $1,920 in association with a consulting agreement signed August 1, 2013.

During the second quarter 2013, we issued 131,579 shares of common stock with a value of $59,211 in exchange for accrued payroll by one of our officers. We also issued 10,000 shares with a value of $5,000 to an employee as part of her employment agreement and another 10,000 shares to a vendor in association with a consulting agreement signed May 1, 2013.

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 1,600,000 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. On April 29, 2013, the stockholders of Entia approved an increase in the number of shares of common stock for issuance under the Plan by 1,500,000. This brought the number of options available under the Plan to 3,100,000 authorized. Stock options are granted at or below the closing price of our stock on the date of grant for terms ranging from four to fifteen years and generally vest over a five year period. The fair value of option grants were calculated at the date of the grants using the Black-Scholes option pricing model with the following assumptions:

	September 30, 2013	December 31, 2012
Expected dividend yield	-	-
Expected stock price volatility	229.66% - 236.55%	183.17% - 187.30%
Risk-free interest rate	0.95% - 2.47%	1.27% - 2.80%
Expected term (in years)	5 - 10 years	4 - 10 years
Weighted-average granted date fair value	$0.47	$0.51

A summary of option activity under the stock option plan as of September 30, 2013 and changes during the quarter then ended is presented below:

	Number of Shares	Exercise Price Range	Weighted Average Exercise Price	Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Outstanding, December 31, 2011	659,242	$ 0.47-$1.00	$ 0.62	10	-
Granted	542,857	$ 0.40-$0.50	$ 0.45	9	-
Exercised	-	-	-	-	-
Expired	-	-	-	-	-
Outstanding, December 31, 2012	1,202,099	$ 0.40-$1.00	$ 0.56	7.74	-
Exercisable, December 31, 2012	830,504	$ 0.40-$1.00	$ 0.57	8.19	-
Granted	1,135,000	$ 0.38-$0.50	$ 0.47	8.03	-
Exercised	-	-	$ -	-	-
Expired	-	-	$ -	-	-
Outstanding, September 30, 2013	2,337,099	$ 0.38-$1.00	$ 0.51	7.88	-
Exercisable, September 30, 2013	1,651,118	$ 0.38-$1.00	$ 0.53	7.85	-

The range of exercise prices for options outstanding under the 2010 Stock Incentive Plan at September 30, 2013 are as follows:

Number of	Exercise
shares	Price
55,000	$ 0.38
135,000	$ 0.40
20,000	$ 0.44
540,000	$ 0.45
247,242	$ 0.47
247,857	$ 0.49
854,000	$ 0.50
200,000	$ 0.85
38,000	$ 1.00
2,337,099

At September 30, 2013, the Company had 762,901 unissued shares available under the Plan. Also, at September 30, 2013, the Company had $294,690 of total unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a weighted average period of 7 years.

Warrants – Consulting Agreements

Outstanding warrants to purchase common stock are as follows:

Date of Issue	September 30, 2013	Exercise Price	Expiration
September-13	21,118	$0.50	9/2020
August-13	50,000	$2.00	8/2018
July-13	212,400	$0.50	7/2020
June-13	850,852	$0.45 - $5.00	06/2016 - 06/2020
March-13	88	$0.70	03/2017
February-13	35	$5.00	02/2019
January-13	20,201	$0.49 - $5.00	06/2017 - 01/2020
As of December 2012	2,833,050	$0.36 - $10.00	10/2013 - 10/2021
Total	3,987,744

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:

	September 30, 2013	September 30, 2012
Risk-Free interest rate	0.84% - 1.66%	0.84% - 1.08%
Expected dividend yield	0%	0%
Volatility	230.04% - 248.63%	202.65% - 264.48%
Expected life	4 - 7 years	5 - 7 years

At September 30, 2013 and 2012, the weighted-average Black-Scholes value of warrants granted was $1.52 and $0.56, respectively.

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NOTE 4 - PROPERTY AND EQUIPMENT (Tables)

9 Months Ended

Sep. 30, 2013

Property, Plant and Equipment [Abstract]

Property and Equipment

	September 30, 2013	December 31, 2012
Office equipment	$ 24,584	$ 24,584
Production equipment	88,215	39,791
Leasehold improvements	20,267	13,946
	133,066	78,321
Less:  accumulated depreciation	(60,972)	(42,694)
	$ 72,094	$ 35,627

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2013

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,
	2013	2012	2013	2012
Numerator:
Net loss	$ (550,528)	$ (280,769)	$ (2,041,135)	$ (996,002)
Denominator:
Weighted-average common shares outstanding	7,712,950	7,209,206	7,395,137	7,190,229
Basic and diluted net loss per share	$ (0.07)	$ (0.04)	$ (0.28)	$ (0.14)
Common stock warrants	3,987,744	2,758,266	3,987,744	2,464,471
Series A convertible preferred stock	2,699,690	889,000	2,699,690	843,000
Stock options	1,651,118	658,240	1,651,118	591,179
Convertible debt including interest	856,030	400,025	856,030	395,624
Excluded dilutive securities	9,194,582	4,705,531	9,194,582	4,294,274

XML

Document and Entity Information	9 Months Ended
	Sep. 30, 2013	Nov. 08, 2013
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, 2013
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		7,727,749
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2013

XML

NOTE 3 - INVENTORY (Tables)

9 Months Ended

Sep. 30, 2013

Inventory Disclosure [Abstract]

Inventory

	September 30, 2013	December 31, 2012
Raw materials	$ 271,871	$ 271,312
Finished goods	7,612	11,885
	279,483	283,197
Less:  reserve for excess and obsolete inventory	(151,064)	(151,064)
	$ 128,419	$ 132,133