10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X]	QUARTERLY REPORT UNDER TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2012
	OR
[   ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 000-53949

HDS INTERNATIONAL CORP.

(Exact name of registrant as specified in its charter)

Nevada

(State of incorporation)

10 Dorrance Street, Suite 700

Providence, RI   02903

(Address of principal executive offices)

(401) 400-0028

(Registrant’s telephone number)

Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 last 90 days.  

 YES [X]     NO [   ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (SS 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,” “non-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]
(Do not check if smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   YES [   ]     NO [X]

APPLICABLE ONLY TO CORPORATE ISSUERS:

As of November 5, 2012, there were 347,380,000 shares of the registrant’s $0.001 par value common stock issued and outstanding.

HDS INTERNATIONAL CORP.

TABLE OF CONTENTS

		Page
PART I.   FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS.	3
	Balance Sheets	3
	Statements of Operations	4
	Statements of Cash Flows	5
	Notes to the Financial Statements	6
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.	11
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.	13
ITEM 4.	CONTROLS AND PROCEDURES.	13
PART II.   OTHER INFORMATION
ITEM 1A.	RISK FACTORS.	13
ITEM 5.	OTHER INFORMATION.	13
ITEM 6.	EXHIBITS.	14
Signatures		15
Exhibit Index		16

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PART I - FINANCIAL INFORMATION

ITEM 1.                      FINANCIAL STATEMENTS.

HDS International Corp.

(formerly GMV Wireless, Inc.)

(A Development Stage Company)

Balance Sheets

(expressed in U.S. dollars)

	September 30, 2012 $ (unaudited)	December 31, 2011 $
ASSETS
Current Assets
Cash	15,199	320,178
Prepaid expenses and deposits	–	7,575
Total Assets	15,199	327,753
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current Liabilities
Accounts payable and accrued liabilities	49,008	6,509
Accounts payable and accrued liabilities – related party	38,407	12,137
Due to related parties – in default	300,000	300,000
Total Current Liabilities	387,415	318,646
Convertible debentures, net of unamortized discount of $4,363 and $12,669, respectively	555,637	487,331
Total Liabilities	943,052	805,977
Stockholders’ Equity (Deficit)
Preferred Stock
Authorized: 25,000,000 preferred shares, with a par value of $0.001 per share
Issued and outstanding: nil preferred shares	–	–
Class A Preferred Stock
Authorized: 25,000,000 preferred shares, with a par value of $0.001 per share
Issued and outstanding: 7,500,000 preferred shares	7,500	7,500
Common Stock Authorized: 2,000,000,000 common shares, with a par value of $0.001 per share Issued and outstanding: 347,380,000 common shares	347,380	347,380
Additional paid-in capital	(345,427)	(345,427)
Equity (Deficit) accumulated during the development stage	(937,306)	(487,677)
Total Stockholders’ Equity (Deficit)	(927,853)	(478,224)
Total Liabilities and Stockholders’ Equity (Deficit)	15,199	327,753

(The accompanying notes are an integral part of these financial statements)

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HDS International Corp.

(formerly GMV Wireless, Inc.)

(A Development Stage Company)

Statements of Operations

(expressed in U.S. dollars)

(unaudited)

	For the Three Months Ended September 30, 2012 $	For the Three Months Ended September 30, 2011 $	For the Nine Months Ended September 30, 2012 $	For the Nine Months Ended September 30, 2011 $	Accumulated from November 3, 2008 (date of inception) to September 30, 2012 $
Revenue	–	–	–	–	–
Operating Expenses
Consulting fees	105,000	–	309,000	20,000	489,500
General and administrative	18,773	19,049	56,376	21,286	93,463
Management fees	–	5,000	–	20,000	43,727
Professional fees	19,834	9,556	40,623	35,556	145,229
Transfer agent fees	569	890	670	2,508	18,608
Total Operating Expenses	144,176	34,495	406,669	99,350	790,527
Loss Before Other Income (Expenses)	(144,176)	(34,495)	(406,669)	(99,350)	(790,527)
Other Expenses (Income)
Accretion expense	2,805	1,342	8,306	1,342	12,437
Loss (gain) on settlement of debt	–	(240,268)	–	(240,268)	(24,552)
Impairment of intangible assets	–	–	–	–	92,538
Interest expense	12,246	7,604	34,654	14,642	66,356
Total Other Expenses (Income)	15,051	(231,322)	42,960	224,284	146,779
Net Income (Loss) for the Period	(159,227)	196,827	(449,629)	124,934	(937,306)
Net Income (Loss) Per Share, Basic and Diluted	–	–	–	–
Weighted Average Shares Outstanding	347,380,000	442,790,000	347,380,000	505,348,205

(The accompanying notes are an integral part of these financial statements)

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HDS International Corp.

(formerly GMV Wireless, Inc.)

(A Development Stage Company)

Statements of Cash Flows

(expressed in U.S. dollars)

(unaudited)

	For the Nine Months Ended September 30, 2012 $	For the Nine Months Ended September 30, 2011 $	Accumulated from November 3, 2008 (date of inception) to September 30, 2012 $
Operating Activities
Net income (loss)	(449,629)	124,934	(937,306)
Adjustment to reconcile net income (loss) to cash used in operating activities:
Accretion expense	8,306	1,342	12,437
Gain on settlement of debt	–	(240,268)	(24,552)
Impairment of intangible asset	–	–	92,538
Stock-based compensation	–	–	2,227
Shares issued for management fees	–	–	7,000
Changes in operating assets and liabilities:
Prepaid expense and deposits	7,575	(9,542)	–
Accounts payable and accrued liabilities	42,499	6,347	76,560
Accounts payable and accrued liabilities - related	26,270	4,007	38,407
Due to related parties	–	–	11,965
Net Cash Used in Operating Activities	(364,979)	(113,180)	(720,724)
Investing Activities
Acquisition of intangible assets	–	–	(10,000)
Net Cash Used by Investing Activities	–	–	(10,000)
Financing activities
Proceeds from loan payable	60,000	710,600	709,600
Repayment of loan payable	–	(149,449)	(149,449)
Proceeds from related parties	–	–	2,649
Repayment to related parties	–	–	(25,000)
Capital contribution	–	–	200,600
Proceeds from the issuance of common stock	–	–	7,523
Net Cash Provided by Financing Activities	60,000	561,151	745,923
Increase (decrease) in Cash	(304,979)	447,971	15,199
Cash, Beginning of Period	320,178	33,034	–
Cash, End of Period	15,199	481,005	15,199
Supplemental Disclosures
Interest paid	–	–	–
Income tax paid	–	–	–
Non-cash investing and financing activities
Forgiveness of related party debt	–	–	2,649
Issuance of common shares for acquisition of assets	–	250,000	250,000
Issuance of preferred shares for acquisition of assets	–	7,500	7,500
Issuance of note payable for acquisition of assets	–	325,000	325,000

(The accompanying notes are an integral part of these financial statements)

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HDS International Corp.

(formerly GMV Wireless, Inc.)

(A Development Stage Company)

Notes to the Financial Statements

(expressed in U.S. dollars)

1.       Nature of Operations and Continuance of Business

HDS International Corp. (formerly GMV Wireless, Inc.) (the “Company”) was incorporated on November 3, 2008 under the laws of the State of Nevada.  A substantial portion of the Company’s activities has involved developing a business plan and establishing contacts and visibility in the marketplace and the Company has not generated any revenue to date.  The Company plans to engage in the business of providing renewable energy and eco-sustainability solutions based on its licensed technologies.

Going Concern

These financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has generated no revenues to date and has never paid any dividends and is unlikely to pay dividends or generate significant earnings in the immediate or foreseeable future.  As of September 30, 2012, the Company had a working capital deficit of $372,216 and an accumulated deficit of $937,306. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability to raise equity or debt financing, and the attainment of profitable operations from the Company's future business. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. 

2.       Summary of Significant Accounting Policies

a)  Basis of Presentation

These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in US dollars. The Company’s fiscal year-end is December 31.

b)  Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States and 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 financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to stock-based compensation and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

c)  Cash and Cash Equivalents

The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. As of September 30, 2012 and December 31, 2011, the Company had no cash equivalents.

d)  Beneficial Conversion Features

From time to time, the Company may issue convertible notes that may contain an imbedded beneficial conversion feature. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of the warrants, if related warrants have been granted. The intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method.

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HDS International Corp.

(formerly GMV Wireless, Inc.)

(A Development Stage Company)

Notes to the Financial Statements

(expressed in U.S. dollars)

2.       Summary of Significant Accounting Policies (continued)

e)  Development Stage Company

The Company is currently considered a development stage company as defined by ASC 915-10-05. As a development stage enterprise, the Company discloses the deficit accumulated during the development stage and the cumulative statements of operations and cash flows from inception to the current balance sheet date. An entity remains in the development stage until such time as, among other factors, revenues have been realized. To date, the development stage of the Company’s operations consists of developing the business model and marketing concepts.

f)  Basic and Diluted Net Loss Per Share

The Company computes net loss per share in accordance with ASC 260, Earnings Per Share, which requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.

g)  Interim Financial Statements

These interim unaudited financial statements have been prepared on the same basis as the annual financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period.

h)  Comprehensive Loss

ASC 220, Comprehensive Income, establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at September 30, 2012, the Company has no items that represent comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.

i)  Financial Instruments

ASC 820, “Fair Value Measurements”, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. It establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. It prioritizes the inputs into three levels that may be used to measure fair value:

Level 1

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

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HDS International Corp.

(formerly GMV Wireless, Inc.)

(A Development Stage Company)

Notes to the Financial Statements

(expressed in U.S. dollars)

2.       Summary of Significant Accounting Policies (continued)

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

Assets and liabilities measured at fair value on a recurring basis were presented on the Company’s balance sheet as at September 30, 2012 as follows:

	Fair Value Measurements Using
	Quoted prices in active markets for identical instruments (Level 1) $	Significant other observable inputs (Level 2) $	Significant unobservable inputs (Level 3) $	Balance, September 30, 2012 $
Convertible debenture	–	–	555,637	555,637

The carrying values of all of our other financial instruments, which include accounts receivable, accounts payable and accrued liabilities, and due to related parties approximate their current fair values because of their nature and respective maturity dates or durations.

j)   Recent Accounting Pronouncements

In September 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2011-08, Intangibles – Goodwill and Other (Topic 350): Testing Goodwill for Impairment. The guidance in ASU 2011-08 is intended to reduce complexity and costs by allowing an entity the option to make a qualitative evaluation about the likelihood of goodwill impairment to determine whether it should calculate the fair value of a reporting unit. The amendments also improve previous guidance by expanding upon the examples of events and circumstances that an entity should consider between annual impairment tests in determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Also, the amendments improve the examples of events and circumstances that an entity having a reporting unit with a zero or negative carrying amount should consider in determining whether to measure an impairment loss, if any, under the second step of the goodwill impairment test. The amendments in this ASU are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted, including for annual and interim goodwill impairment tests performed as of a date before September 15, 2011, if an entity’s financial statements for the most recent annual or interim period have not yet been issued. The adoption of this guidance did not have a material impact on the Company’s financial statements.

In June 2011, the FASB issued ASU 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income”, which is effective for annual reporting periods beginning after December 15, 2011. ASU 2011-05 will become effective for the Company on January 1, 2012. This guidance eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. In addition, items of other comprehensive income that are reclassified to profit or loss are required to be presented separately on the face of the financial statements. This guidance is intended to increase the prominence of other comprehensive income in financial statements by requiring that such amounts be presented either in a single continuous statement of income and comprehensive income or separately in consecutive statements of income and comprehensive income. The adoption of ASU 2011-05 did not have a material impact on the Company’s financial statements.

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HDS International Corp.

(formerly GMV Wireless, Inc.)

(A Development Stage Company)

Notes to the Financial Statements

(expressed in U.S. dollars)

2.       Summary of Significant Accounting Policies (continued)

k)  Recent Accounting Pronouncements (continued)

In May 2011, the FASB issued ASU 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs”, which is effective for annual reporting periods beginning after December 15, 2011. This guidance amends certain accounting and disclosure requirements related to fair value measurements. Additional disclosure requirements in the update include: (1) for Level 3 fair value measurements, quantitative information about unobservable inputs used, a description of the valuation processes used by the entity, and a qualitative discussion about the sensitivity of the measurements to changes in the unobservable inputs; (2) for an entity’s use of a nonfinancial asset that is different from the asset’s highest and best use, the reason for the difference; (3) for financial instruments not measured at fair value but for which disclosure of fair value is required, the fair value hierarchy level in which the fair value measurements were determined; and (4) the disclosure of all transfers between Level 1 and Level 2 of the fair value hierarchy. ASU 2011-04 will become effective for the Company on January 1, 2012.  The adoption of this guidance did not have a material impact on the Company’s financial statements.

In April 2011, the FASB issued ASU 2011-02, “Receivables (Topic 310): A Creditor’s Determination of Whether a Restructuring is a Troubled Debt Restructuring”. This amendment explains which modifications constitute troubled debt restructurings (“TDR”). Under the new guidance, the definition of a troubled debt restructuring remains essentially unchanged, and for a loan modification to be considered a TDR, certain basic criteria must still be met. For public companies, the new guidance is effective for interim and annual periods beginning on or after June 15, 2011, and applies retrospectively to restructuring occurring on or after the beginning of the fiscal year of adoption. The adoption of this guidance did not have a material impact on the Company’s financial statements.

The Company has implemented all new accounting pronouncements that are in effect.  These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

3.       Related Party Transactions

a)  As at September 30, 2012, the Company owes $334,657 (December 31, 2011 - $312,137) to a company controlled by officers and directors of the Company.  The amounts owing are unsecured, bears interest at 10% per annum, and due by August 15, 2012.  As at September 30, 2012, the Company has recorded accrued interest of $34,657 included in accounts payable and accrued liabilities – related party. As at September 30, 2012, the amount owed and the accrued interest are in default pursuant to the agreement.

b)   As of September 30, 2012, the Company has incurred $32,250 (December 31, 2011 - $9,000) to the President and CEO of the Company for consulting services. As at September 30, 2012 the Company recorded a related party accounts payable of $3,750 included in accounts payable and accrued liabilities – related party.

4.       Convertible Debenture

a)  In August 2011, the Company issued a convertible debenture to a non-related party for $500,000, comprised of payments of $100,000 on August 19, 2011, $150,000 on August 26, 2011, and $250,000 on September 6, 2011.  Under the terms of the note, the amount owing is unsecured, due interest of 3% per annum, and due on or before February 19, 2013.  As at September 30, 2012, accrued interest of $16,808 has been recorded in accrued liabilities.

The convertible debenture also grants the right of the Company to convert its debt into common shares of the Company at any time at a conversion price of $0.25 per share.  For the first payment of $100,000 on August 19, 2011, the Company recorded beneficial conversion of $16,800 relating to the number of convertible shares (400,000 shares) and the excess of the fair value of the share price and the conversion price.  No beneficial conversion was recorded for the $150,000 and $250,000 payments, as the fair value of the Company’s share prices was less than the conversion price on the date of issuance.  For the period ended September 30, 2012, the Company recorded accretion expense of $8,306.

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HDS International Corp.

(formerly GMV Wireless, Inc.)

(A Development Stage Company)

Notes to the Financial Statements

(expressed in U.S. dollars)

4.       Convertible Debenture (continued)

b)  On June 29, 2012, the Company issued three separate convertible drawdown note payables of $50,000 each, with $20,000 of each note being received on June 29, 2012 and the remaining $30,000 for each note to be received on or before August 3, 2012. Under the terms of the note, the amount owing is unsecured, due interest of 6% per annum, and due on or before December 31, 2013.  As at September 30, 2012, the second instalments for each of the notes had not been received and are in default in accordance with the agreements. As at September 30, 2012, accrued interest of $921 has been recorded in accrued liabilities.

The convertible debentures also grant the right of the Holder and the Company to convert its debt into common shares of the Company at any time at a conversion price of $0.01 per share. No beneficial conversion feature was recorded for the, as the fair value of the Company’s share prices was less than the conversion price on the date of issuance.

5.       Commitments

a)  On October 12, 2011, the Company entered into a verbal consulting agreement with a non-related party whereby the Company will pay a monthly consulting fee for services provided in the amounts of $3,000. The agreement is for a one month term automatically renewing in each successive month unless earlier terminated. On July 18, 2012, the Board of Directors reviewed the consulting agreement and authorized an increase to the monthly consulting fee from $3,000 to $3,750 per month beginning July 2012. During the nine months ended September 30, 2012, the Company incurred $29,250 in consulting fees relating to this agreement.

b)  On October 12, 2011, the Company entered into a consulting agreement with a non-related party whereby the Company will pay a monthly consulting fee for services provided in the amounts of $27,500. The agreement is for a one month term automatically renewing in each successive month unless earlier terminated. During the nine month period ended September 30, 2012, the Company incurred $247,500 in consulting fees relating to this agreement.

c)  On October 12, 2011, the Company entered into a consulting agreement with the President and CEO of the Company whereby the Company will pay a monthly consulting fee for services provided in the amounts of $3,000. The agreement is for a one month term automatically renewing in each successive month unless earlier terminated. On June 10, 2012, the Board of Directors authorized an increase to the monthly consulting fee from $3,000 to $6,000 per month beginning June 2012. On July 18, 2012, the Board of Directors reviewed the consulting agreement and adjusted the monthly consulting fee to $3,750 beginning July 2012. During the nine months ended September 30, 2012, the Company incurred $32,250 in consulting fees relating to this agreement.

6.       Subsequent Events

We have evaluated subsequent events through the date of issuance of the financial statements, and did not have any material recognizable subsequent events after September 30, 2012.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION.

Forward Looking Statements

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) contains forward-looking statements that involve known and unknown risks, significant uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed, or implied, by those forward-looking statements.  You can identify forward-looking statements by the use of the words may, will, should, could, expects, plans, anticipates, believes, estimates, predicts, intends, potential, proposed, or continue or the negative of those terms.  These statements are only predictions. In evaluating these statements, you should consider various factors which may cause our actual results to differ materially from any forward-looking statements.  Although we believe that the exceptions reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.  Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements.  We undertake no obligation to revise or update publicly any forward-looking statements for any reason.

We are considered a start-up corporation.  Our auditors have issued a going concern opinion on the financial statements for the year ended December 31, 2011.

RESULTS OF OPERATIONS

Working Capital

	September 30, 2012 $	December 31, 2011 $
Current Assets	15,199	327,753
Current Liabilities	387,415	318,646
Working Capital (Deficit)	(372,216)	9,107

Cash Flows

	September 30, 2012 $	September 30, 2011 $
Cash Flows from (used in) Operating Activities	(364,979)	(113,180)
Cash Flows from (used in) Financing Activities	60,000	561,151
Net Increase (decrease) in Cash During Period	(304,979)	447,971

Operating Revenues

We have not generated any revenues since inception.

Operating Expenses and Net Loss

Operating expenses for the three months ended September 30, 2012 were $144,176 compared with $34,495 for the three months ended September 30, 2011. The increase in operating expenses was attributed to an increase in, professional fees of $10,278 and consulting expenses of $105,000 offset by decrease in general and administrative expenses of $276 for day-to-day operating costs, transfer agent fees of $321 and management fees of $5,000.  For the nine months ended September 30, 2012, the Company incurred operating expenses of $406,669 compared with $99,350 for the nine months ended September 30, 2011.  The increase of $307,319 is attributed to an increase of $289,000 of consulting fees, $5,067 in professional fees and $35,090 of general and administrative expenses offset by a decrease of $20,000 of management fees, and $1,838 of transfer agent fees as there was a change in management during the period.

During the nine months ended September 30, 2012, the Company recorded a net loss of $449,629 compared with  net income of $124,934 for the nine months ended September 30, 2011.  In addition to the above, the Company incurred an increase of $20,012 of interest expense relating to debt balances and accretion expense of $6,964 for the fair value of the beneficial conversion feature on the convertible note issued in August 2011 offset by a decrease of $240,268 in gain on settlement of debt.

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Liquidity and Capital Resources

As at September 30, 2012, the Company’s cash balance and total assets were $15,199 compared to cash balance of $320,178 and total assets of $327,753 as at December 31, 2011. The decrease in the cash balance was attributed to the use of cash during the period for day-to-day activities.  The decrease in total assets was attributed to the decrease in cash noted above and the decrease in prepaid expenses and deposits of $7,575 relating to the amortization of prepaid insurance and membership costs.

As at September 30, 2012, the Company had total liabilities of $943,052 compared with total liabilities of $805,977 as at December 31, 2011. The increase in total liabilities is attributed to an increase of account payable and accrued liabilities of $68,769, $42,499 of which pertained to trade accounts payable and $26,270 pertained to related party accounts payable and accrued liabilities as well as an increase in the convertible debenture due to the accretion of the discount of the convertibility feature of $8,306 along with $60,000 of additional loan proceeds received.

As at September 30, 2012, the Company has a working capital deficit of $372,216 compared with working capital of $9,107 at December 31, 2011 with the decrease in the working capital attributed to the decrease of $304,979 in cash held to pay for day-to-day activities of the Company and an increase in accounts payable and accrued liabilities during the period and a decrease of $5,575 relating to the amortization of prepaid insurance and membership costs.

Cashflow from Operating Activities

During the nine months ended September 30, 2012, the Company used $364,979 of cash for operating activities compared to the use of $113,180 of cash for operating activities during the nine months ended September 30, 2011.  The increase in the use of cash for operating activities was attributed to the fact that the Company incurred larger amounts for general and administrative costs for the period for day-to-day activities as well as an increase in consulting fees related to the renewable energy and eco-sustainable technologies owned.

Cashflow from Financing Activities

During the nine months ended September 30, 2012, the Company received $60,000 of proceeds from financing activities compared to $561,151 during the nine months ended September 30, 2011. The decrease in proceeds from financing activities was due to the fact that the Company was only able to raise $60,000 from the issuance of a note payable in the period ended September 30 2012, compared with $710,6000 of notes payable raised in the period ended September 30, 2011 which was offset by repayments on the loan payable of $149,449.

Subsequent Developments

None

Going Concern

We have not attained profitable operations and are dependent upon the continued financial support from our shareholders, the ability to raise equity or debt financing, and the attainment of profitable operations from our future business. These factors raise substantial doubt regarding our ability to continue as a going concern.

Off-Balance Sheet Arrangements

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

Future Financings

We will continue to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund our operations and other activities.

-12-

Critical Accounting Policies

Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in the notes to our financial statements. In general, management’s estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.

Recently Issued Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

ITEM 3.                      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 4.                      CONTROLS AND PROCEDURES.

Under the supervision and with the participation of our management, including the Principal Executive Officer and Principal Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, the Principal Executive Officer and Principal Financial Officer have concluded that these disclosure controls and procedures are not effective due to the material weaknesses resulting from the Board of Directors not currently having any independent members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K, and controls were not designed and in place to ensure that all disclosures required were originally addressed in our financial statements. Please refer to our Annual Report on Form 10-K as filed with the SEC on April 16, 2012, for a complete discussion relating to the foregoing evaluation of Disclosures and Procedures.

There were no changes in our internal control over financial reporting during the quarter ended September 30, 2012 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1A.                   RISK FACTORS.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 5.                      OTHER INFORMATION.

On September 24, 2012, we announced we have entered into a research and development cooperation agreement with National Research Centre—“Kurchatov Institute” located in Moscow, Russia.

On September 25, 2012, we announced that the deposit transaction restriction (“deposit chill”), placed on our common stock by The Depository Trust Company (DTC) in January, has been lifted.

On September 28, 2012, we announced that the United States Patent & Trademark Office granted patent no. 8,197,857 “Method for Eliminating Carbon Dioxide from Waste Gases”, which we license.

-13-

On October 22, 2012, we announced the formation of a wholly-owned Canadian-based subsidiary, HDS Energy and Ecosystems NB, Ltd, headquartered in Saint John, New Brunswick, Canada.

ITEM 6.                      EXHIBITS.

Exhibit		Incorporated by reference			Filed
Number	Description of Exhibit	Form	Date	Number	herewith
3.1	Articles of Incorporation.	S-1	3/24/09	3.1
3.2	Bylaws.	S-1	3/24/09	3.2
3.3	Amended and Restated Articles of Incorporation.	8-K	6/14/11	3.1a
3.4	Amended and Restated Articles of Incorporation.	8-K	8/17/11	3.1
10.1	Management Agreement between the Company and Mr. Mark Simon dated March 23, 2010.	10-K	4/07/10	10.1
10.2	Promissory Note issued to Newton Management Ltd. dated September 28, 2010.	8-K	10/08/10	10.1
10.3	Amended Management Agreement between the Company and Mr. Mark Simon dated October 1, 2010.	8-K	11/10/10	10.1
10.4	Investors Relations Services Agreement with Blue Chip IR dated October 1, 2010.	10-Q	11/15/10	10.3
10.5	Share Exchange Agreement with AmeriSure Pharmaceuticals LLC dated May 13, 2011.	8-K	5/16/11	10.1
10.6	Promissory Note to Amerisure Pharmaceuticals, LLC dated June 20, 2011.	8-K	6/29/11	10.1
10.7	Promissory Note to Serik Enterprises, Inc.	8-K	8/12/11	10.1
10.8	Settlement Agreement with Vail International Ltd.	8-K	8/12/11	10.2
10.9	Settlement Agreement with Newton Management Ltd.	8-K	8/12/11	10.3
10.10	Settlement Agreement with Mark Simon.	8-K	8/12/11	10.4
10.11	Settlement Agreement with Carrillo Huettel, LLC.	8-K	8/12/11	10.5
10.12	Asset Acquisition Agreement.	8-K	8/17/11	10.1
10.13	Promissory Note with Hillwinds Ocean Energy, LLC.	8-K	8/17/11	10.2
10.14	Settlement Agreement and General Mutual Release with Serik Enterprises, Inc.	10-Q	11/21/11	10.14
10.15	Draw Down Convertible Promissory Note.	10-Q	11/21/11	10.15
10.16	Intellectual Property License Agreement with Hillwinds Energy Development Corporation.	10-K	4/16/12	10.1
14.1	Code of Ethics.	10-K	3/29/11
31.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.				X
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.				X
99.1	Press Release dated September 24, 2012.				X
99.2	Press Release dated September 25, 2012.				X
99.3	Press Release dated September 28, 2012.				X
99.4	Press Release dated October 22, 2012.				X
101.INS	XBRL Instance Document.				X
101.SCH	XBRL Taxonomy Extension – Schema.				X
101.CAL	XBRL Taxonomy Extension – Calculations.				X
101.LAB	XBRL Taxonomy Extension – Labels.				X
101.PRE	XBRL Taxonomy Extension – Presentation.				X
101.DEF	XBRL Taxonomy Extension – Definition.				X

-14-

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the Registrant and in the capacities on this 19th day of November, 2012.

HDS INTERNATIONAL CORP.
(the “Registrant”)
BY:	TASSOS RECACHINAS
	Tassos Recachinas
	President

-15-

EXHIBIT INDEX

Exhibit		Incorporated by reference			Filed
Number	Description of Exhibit	Form	Date	Number	herewith
3.1	Articles of Incorporation.	S-1	3/24/09	3.1
3.2	Bylaws.	S-1	3/24/09	3.2
3.3	Amended and Restated Articles of Incorporation.	8-K	6/14/11	3.1a
3.4	Amended and Restated Articles of Incorporation.	8-K	8/17/11	3.1
10.1	Management Agreement between the Company and Mr. Mark Simon dated March 23, 2010.	10-K	4/07/10	10.1
10.2	Promissory Note issued to Newton Management Ltd. dated September 28, 2010.	8-K	10/08/10	10.1
10.3	Amended Management Agreement between the Company and Mr. Mark Simon dated October 1, 2010.	8-K	11/10/10	10.1
10.4	Investors Relations Services Agreement with Blue Chip IR dated October 1, 2010.	10-Q	11/15/10	10.3
10.5	Share Exchange Agreement with AmeriSure Pharmaceuticals LLC dated May 13, 2011.	8-K	5/16/11	10.1
10.6	Promissory Note to Amerisure Pharmaceuticals, LLC dated June 20, 2011.	8-K	6/29/11	10.1
10.7	Promissory Note to Serik Enterprises, Inc.	8-K	8/12/11	10.1
10.8	Settlement Agreement with Vail International Ltd.	8-K	8/12/11	10.2
10.9	Settlement Agreement with Newton Management Ltd.	8-K	8/12/11	10.3
10.10	Settlement Agreement with Mark Simon.	8-K	8/12/11	10.4
10.11	Settlement Agreement with Carrillo Huettel, LLC.	8-K	8/12/11	10.5
10.12	Asset Acquisition Agreement.	8-K	8/17/11	10.1
10.13	Promissory Note with Hillwinds Ocean Energy, LLC.	8-K	8/17/11	10.2
10.14	Settlement Agreement and General Mutual Release with Serik Enterprises, Inc.	10-Q	11/21/11	10.14
10.15	Draw Down Convertible Promissory Note.	10-Q	11/21/11	10.15
10.16	Intellectual Property License Agreement with Hillwinds Energy Development Corporation.	10-K	4/16/12	10.1
14.1	Code of Ethics.	10-K	3/29/11
31.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.				X
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.				X
99.1	Press Release dated September 24, 2012.				X
99.2	Press Release dated September 25, 2012.				X
99.3	Press Release dated September 28, 2012.				X
99.4	Press Release dated October 22, 2012.				X
101.INS	XBRL Instance Document.				X
101.SCH	XBRL Taxonomy Extension – Schema.				X
101.CAL	XBRL Taxonomy Extension – Calculations.				X
101.LAB	XBRL Taxonomy Extension – Labels.				X
101.PRE	XBRL Taxonomy Extension – Presentation.				X
101.DEF	XBRL Taxonomy Extension – Definition.				X

-16-

EX-31.1

Exhibit 31.1

SARBANES-OXLEY SECTION 302(a) CERTIFICATION

I, Tassos Recachinas, certify that:

1. I have reviewed this Form 10-Q for the period ended September 30, 2012 of HDS International Corp.;

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 our 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 our 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 our 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 (the registrant’s fourth fiscal quarter in the case of an annual report) 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.

Date:	November 19, 2012	TASSOS RECACHINAS
		Tassos Recachinas
		Principal Executive Officer and Principal Financial Officer

EX-32.1

Exhibit 32.1

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 of HDS International Corp. (the “Company”) on Form 10-Q for the period ended September 30, 2012 as filed with the Securities and Exchange Commission on the date here of (the “report”), I, Tassos Recachinas, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 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 this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated this 19th day of November, 2012.

TASSOS RECACHINAS

Tassos Recachinas

Chief Executive Officer and Chief Financial Officer

EX-99.1

Exhibit 99.1

September 24, 2012

FOR IMMEDIATE RELEASE

HDS International Announces Cooperation Agreement with National Research Centre “Kurchatov Institute”

PROVIDENCE, RI, September 24, 2012 /PRNewswire via COMTEX/ -- HDS International Corp. (OTCQB:  HDSI), a green technology company providing renewable energy and eco-sustainability solutions, today announced that it has entered into a cooperation agreement with National Research Centre “Kurchatov Institute” located in Moscow, Russia.

Under the agreement, HDSI and Kurchatov Institute will seek cooperation under the U.S.-Russia Bilateral Presidential Commission’s Energy Working Group.  They will seek cooperative R&D programs to develop and deploy cutting-edge technologies to advance energy efficiency and improve energy security.  Priority areas of mutual interest include biosequestration and reutilization of carbon dioxide, and production and processing of biomass and biogas.  The parties will also seek to define projects to commercialize innovative technologies.

A team comprised of experts from both HDSI and Kurchatov Institute have attended meetings and workshops to define and advance projects of mutual interest suitable for joint research and development; pilot and demonstration; and commercialization, and discussions remain ongoing.

About Kurchatov Institute

Kurchatov Institute is one of the leading research institutes in the world.  Founded in Moscow in 1943, Kurchatov Institute has played a key role in the maintenance of Russia’s security and the development of its most important strategic directions.  Today, Kurchatov Institute is a multi-disciplinary research center with an advanced experimental base, with priority areas that include energy and energy conversion.  Kurchatov Institute is the scientific coordinator of activities in the area of nanobiotechnology, nanosystems and nanomaterials in the Russian Federation.  Functioning as a model for future research centers, Kurchatov Institute’s interdisciplinary approach hopes to solve the scientific and technological global challenges of the 21st century.

About HDS International Corp.

HDS International Corp. (OTCQB:  HDSI), based in Providence, RI, is a green technology company providing carbon capture and biosequestration, algae biomass production, and waste management solutions for the production of renewable energy, carbon capture and reutilization, and bioproducts.  Our licensed technologies provide us with an attractive strategic position and competitive advantages within our markets, which include renewable energy and environmental and eco-sustainability.

Forward-Looking Statements

Statements included in this update that are not historical in nature, are intended to be, and are hereby identified as, "forward-looking statements". Forward-looking statements may be identified by words including "anticipate," "believe," "intends," "estimates," "expect," and similar expressions. The Company cautions readers that forward-looking statements including, without limitation, those relating to the Company's future business prospects are subject to certain risks and uncertainties that could cause actual results to differ materially from those indicated in the forward-looking statements, due to factors such as those relating to economic, governmental, technological, and other risks and factors identified from time to time in the Company's reports filed with the SEC.

HDS International Corp.

CONTACT INFORMATION

401-400-0028

info@hdsicorp.com

http://www.hdsicorp.com

EX-99.2

Exhibit 99.2

September 25, 2012

FOR IMMEDIATE RELEASE

HDS International Announces DTC “Deposit Chill” Has Been Lifted

PROVIDENCE, RI, September 25, 2012 /PRNewswire via COMTEX/ -- HDS International Corp. (OTCQB:  HDSI), a green technology company providing renewable energy and eco-sustainability solutions, in response to shareholder inquiries today announced that the deposit transaction restriction (“Deposit Chill”), placed on its common stock by The Depository Trust Company (DTC) in January, has been lifted.  As of August 14, DTC has resumed accepting deposits of the Issue, CUSIP 40416A101, for depository and book-entry transfer services.

About HDS International Corp.

HDS International Corp. (OTCQB:  HDSI), based in Providence, RI, is a green technology company providing carbon capture and biosequestration, algae biomass production, and waste management solutions for the production of renewable energy, carbon capture and reutilization, and bioproducts.  Our licensed technologies provide us with an attractive strategic position and competitive advantages within our markets, which include renewable energy and environmental and eco-sustainability.  Please visit www.hdsicorp.com for more information.

Forward-Looking Statements

Statements included in this update that are not historical in nature, are intended to be, and are hereby identified as, "forward-looking statements". Forward-looking statements may be identified by words including "anticipate," "believe," "intends," "estimates," "expect," and similar expressions. The Company cautions readers that forward-looking statements including, without limitation, those relating to the Company's future business prospects are subject to certain risks and uncertainties that could cause actual results to differ materially from those indicated in the forward-looking statements, due to factors such as those relating to economic, governmental, technological, and other risks and factors identified from time to time in the Company's reports filed with the SEC.

HDS International Corp.

CONTACT INFORMATION

401-400-0028

info@hdsicorp.com

http://www.hdsicorp.com

EX-99.3

Exhibit 99.3

September 28, 2012

FOR IMMEDIATE RELEASE

HDS International Announces Grant of U.S. Patent for Carbon Capture & Reutilization

PROVIDENCE, RI, September 28, 2012 /PRNewswire via COMTEX/ -- HDS International Corp. (OTCQB:  HDSI), a green technology company providing renewable energy and eco-sustainability solutions, today announced that the United States Patent & Trademark Office has granted patent no. 8,197,857 “Method for Eliminating Carbon Dioxide from Waste Gases”.

Purification of process gas streams by the removal of acid gases such as carbon dioxide is required in many major industrial processes such as hydrogen manufacture for refinery hydrotreating, synthesis gas manufacture from coal, purification of natural gas, and ammonia manufacture, among other applications.  Bulk removal of acid gases from such streams is usually accomplished by use of a scrubbing solution composed of a solvent.

The invention preserves the advantages of prior methods for eliminating carbon dioxide from waste gases while providing new advantages not found in currently available methods and overcomes many disadvantages of such currently available methods.

The patent covers the elimination of carbon dioxide from waste gases.  Additionally, the invention can transfer carbon dioxide in increased concentrations for growth of algae; consists of a photobioreactor system used in the method for increased production of algae; and provides a method for operating an open-pond system using carbon dioxide from waste gases.

Alexander Chirkov, Ph.D., Chief Scientific Officer of HDS International and inventor of the patent, licensed by the Company, today commented, “Today’s announcement helps solidify our intellectual capital portfolio and serves as recognition of our novel physical and economical approach to solving the significant and growing problem of carbon dioxide pollution.”

About HDS International Corp.

HDS International Corp. (OTCQB:  HDSI), based in Providence, RI, is a green technology company providing carbon capture and biosequestration, algae biomass production, and waste management solutions for the production of renewable energy, carbon capture and reutilization, and bioproducts.  Our licensed technologies provide us with an attractive strategic position and competitive advantages within our markets, which include renewable energy and environmental and eco-sustainability.  Please visit www.hdsicorp.com for more information.

Forward-Looking Statements

Statements included in this update that are not historical in nature, are intended to be, and are hereby identified as, "forward-looking statements". Forward-looking statements may be identified by words including "anticipate," "believe," "intends," "estimates," "expect," and similar expressions. The Company cautions readers that forward-looking statements including, without limitation, those relating to the Company's future business prospects are subject to certain risks and uncertainties that could cause actual results to differ materially from those indicated in the forward-looking statements, due to factors such as those relating to economic, governmental, technological, and other risks and factors identified from time to time in the Company's reports filed with the SEC.

HDS International Corp.

CONTACT INFORMATION

401-400-0028

info@hdsicorp.com

http://www.hdsicorp.com

EX-99.4

Exhibit 99.4

October 22, 2012

FOR IMMEDIATE RELEASE

HDS International Announces Canadian Subsidiary HDS Energy and Ecosystems NB, Ltd.

PROVIDENCE, RI, October 22, 2012 /PRNewswire via COMTEX/ -- HDS International Corp. (OTCQB:  HDSI), a green technology company providing renewable energy and eco-sustainability solutions, is proud to announce the formation of a wholly-owned Canadian-based subsidiary, HDS Energy and Ecosystems NB, Ltd, headquartered in Saint John, New Brunswick, Canada.

HDS Energy and Ecosystems NB will be responsible for HDS International’s business and research and development interests in the Province of New Brunswick, Canada.  The subsidiary was established to facilitate HDS International’s sales, marketing, grant application, and other business development efforts within the Province, as well as in response to certain potential customer requirements in the Province.

About HDS International Corp.

HDS International Corp. (OTCQB:  HDSI), based in Providence, RI, is a green technology company providing carbon capture and biosequestration, algae biomass production, and waste management solutions for the production of renewable energy, carbon capture and reutilization, and bioproducts.  Our licensed technologies provide us with an attractive strategic position and competitive advantages within our markets, which include renewable energy and environmental and eco-sustainability.  Please visit www.hdsicorp.com for more information.

Forward-Looking Statements

Statements included in this update that are not historical in nature, are intended to be, and are hereby identified as, "forward-looking statements". Forward-looking statements may be identified by words including "anticipate," "believe," "intends," "estimates," "expect," and similar expressions. The Company cautions readers that forward-looking statements including, without limitation, those relating to the Company's future business prospects are subject to certain risks and uncertainties that could cause actual results to differ materially from those indicated in the forward-looking statements, due to factors such as those relating to economic, governmental, technological, and other risks and factors identified from time to time in the Company's reports filed with the SEC.

HDS International Corp.

CONTACT INFORMATION

401-400-0028

info@hdsicorp.com

http://www.hdsicorp.com

XML

4. Convertible Debenture

9 Months Ended

Sep. 30, 2012

Convertible Debenture

4.       Convertible Debenture

a)  In August 2011, the Company issued a convertible debenture to a non-related party for $500,000, comprised of payments of $100,000 on August 19, 2011, $150,000 on August 26, 2011, and $250,000 on September 6, 2011.  Under the terms of the note, the amount owing is unsecured, due interest of 3% per annum, and due on or before February 19, 2013.  As at September 30, 2012, accrued interest of $16,808 has been recorded in accrued liabilities.

The convertible debenture also grants the right of the Company to convert its debt into common shares of the Company at any time at a conversion price of $0.25 per share.  For the first payment of $100,000 on August 19, 2011, the Company recorded beneficial conversion of $16,800 relating to the number of convertible shares (400,000 shares) and the excess of the fair value of the share price and the conversion price.  No beneficial conversion was recorded for the $150,000 and $250,000 payments, as the fair value of the Company’s share prices was less than the conversion price on the date of issuance.  For the period ended September 30, 2012, the Company recorded accretion expense of $8,306.

b)  On June 29, 2012, the Company issued three separate convertible drawdown note payables of $50,000 each, with $20,000 of each note being received on June 29, 2012 and the remaining $30,000 for each note to be received on or before August 3, 2012. Under the terms of the note, the amount owing is unsecured, due interest of 6% per annum, and due on or before December 31, 2013.  As at September 30, 2012, the second instalments for each of the notes had not been received and are in default in accordance with the agreements. As at September 30, 2012, accrued interest of $921 has been recorded in accrued liabilities.

The convertible debentures also grant the right of the Holder and the Company to convert its debt into common shares of the Company at any time at a conversion price of $0.01 per share. No beneficial conversion feature was recorded for the, as the fair value of the Company’s share prices was less than the conversion price on the date of issuance.

XML

3. Related Party Transactions

9 Months Ended

Sep. 30, 2012

Related Party Transactions Disclosure [Text Block]

3.       Related Party Transactions

a)  As at September 30, 2012, the Company owes $334,657 (December 31, 2011 - $312,137) to a company controlled by officers and directors of the Company.  The amounts owing are unsecured, bears interest at 10% per annum, and due by August 15, 2012.  As at September 30, 2012, the Company has recorded accrued interest of $34,657 included in accounts payable and accrued liabilities – related party. As at September 30, 2012, the amount owed and the accrued interest are in default pursuant to the agreement.

b) As of September 30, 2012, the Company has incurred $32,250 (December 31, 2011 - $9,000) to the President and CEO of the Company for consulting services. As at September 30, 2012 the Company recorded a related party accounts payable of $3,750 included in accounts payable and accrued liabilities – related party.

XML

Balance Sheets (USD $)	Sep. 30, 2012	Dec. 31, 2011
Current Assets
Cash	$ 15,199	$ 320,178
Prepaid expenses and deposits		7,575
Total Assets	15,199	327,753
Current Liabilities
Accounts payable and accrued liabilities	49,008	6,509
Accounts payable and accrued liabilities – related party	38,407	12,137
Due to related parties – in default	300,000	300,000
Total Current Liabilities	387,415	318,646
Convertible debentures, net of unamortized discount of $4,363 and $12,669, respectively	555,637	487,331
Total Liabilities	943,052	805,977
Class A Preferred Stock
Issued and outstanding: 7,500,000 preferred shares	7,500	7,500
Common Stock Authorized: 2,000,000,000 common shares, with a par value of $0.001 per share Issued and outstanding: 347,380,000 common shares	347,380	347,380
Additional paid-in capital	(345,427)	(345,427)
Equity (Deficit) accumulated during the development stage	(937,306)	(487,677)
Total Stockholders’ Equity (Deficit)	(927,853)	(478,224)
Total Liabilities and Stockholders’ Equity (Deficit)	$ 15,199	$ 327,753

XML

1. Nature of Operations and Continuance of Business

9 Months Ended

Sep. 30, 2012

Natureof Operationand Continuanceof Business

1.       Nature of Operations and Continuance of Business

HDS International Corp. (formerly GMV Wireless, Inc.) (the “Company”) was incorporated on November 3, 2008 under the laws of the State of Nevada.  A substantial portion of the Company’s activities has involved developing a business plan and establishing contacts and visibility in the marketplace and the Company has not generated any revenue to date.  The Company plans to engage in the business of providing renewable energy and eco-sustainability solutions based on its licensed technologies.

Going Concern

These financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has generated no revenues to date and has never paid any dividends and is unlikely to pay dividends or generate significant earnings in the immediate or foreseeable future.  As of September 30, 2012, the Company had a working capital deficit of $372,216 and an accumulated deficit of $937,306. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability to raise equity or debt financing, and the attainment of profitable operations from the Company's future business. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. 

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2. Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2012

Significant Accounting Policies [Text Block]

2.       Summary of Significant Accounting Policies

a)  Basis of Presentation

These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in US dollars. The Company’s fiscal year-end is December 31.

b)  Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States and 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 financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to stock-based compensation and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

c)  Cash and Cash Equivalents

The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. As of September 30, 2012 and December 31, 2011, the Company had no cash equivalents.

d)  Beneficial Conversion Features

From time to time, the Company may issue convertible notes that may contain an imbedded beneficial conversion feature. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of the warrants, if related warrants have been granted. The intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method.

e)  Development Stage Company

The Company is currently considered a development stage company as defined by ASC 915-10-05. As a development stage enterprise, the Company discloses the deficit accumulated during the development stage and the cumulative statements of operations and cash flows from inception to the current balance sheet date. An entity remains in the development stage until such time as, among other factors, revenues have been realized. To date, the development stage of the Company’s operations consists of developing the business model and marketing concepts.

f)  Basic and Diluted Net Loss Per Share

The Company computes net loss per share in accordance with ASC 260, Earnings Per Share, which requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.

g)  Interim Financial Statements

These interim unaudited financial statements have been prepared on the same basis as the annual financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period.

h)  Comprehensive Loss

ASC 220, Comprehensive Income, establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at September 30, 2012, the Company has no items that represent comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.

i)  Financial Instruments

ASC 820, “Fair Value Measurements”, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. It establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. It prioritizes the inputs into three levels that may be used to measure fair value:

Level 1

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

Assets and liabilities measured at fair value on a recurring basis were presented on the Company’s balance sheet as at September 30, 2012 as follows:

	Fair Value Measurements Using
	Quoted prices in active markets for identical instruments (Level 1) $	Significant other observable inputs (Level 2) $	Significant unobservable inputs (Level 3) $	Balance, September 30, 2012 $
Convertible debenture	–	–	555,637	555,637

The carrying values of all of our other financial instruments, which include accounts receivable, accounts payable and accrued liabilities, and due to related parties approximate their current fair values because of their nature and respective maturity dates or durations.

j)   Recent Accounting Pronouncements

In September 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2011-08, Intangibles – Goodwill and Other (Topic 350): Testing Goodwill for Impairment. The guidance in ASU 2011-08 is intended to reduce complexity and costs by allowing an entity the option to make a qualitative evaluation about the likelihood of goodwill impairment to determine whether it should calculate the fair value of a reporting unit. The amendments also improve previous guidance by expanding upon the examples of events and circumstances that an entity should consider between annual impairment tests in determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Also, the amendments improve the examples of events and circumstances that an entity having a reporting unit with a zero or negative carrying amount should consider in determining whether to measure an impairment loss, if any, under the second step of the goodwill impairment test. The amendments in this ASU are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted, including for annual and interim goodwill impairment tests performed as of a date before September 15, 2011, if an entity’s financial statements for the most recent annual or interim period have not yet been issued. The adoption of this guidance did not have a material impact on the Company’s financial statements.

In June 2011, the FASB issued ASU 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income”, which is effective for annual reporting periods beginning after December 15, 2011. ASU 2011-05 will become effective for the Company on January 1, 2012. This guidance eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. In addition, items of other comprehensive income that are reclassified to profit or loss are required to be presented separately on the face of the financial statements. This guidance is intended to increase the prominence of other comprehensive income in financial statements by requiring that such amounts be presented either in a single continuous statement of income and comprehensive income or separately in consecutive statements of income and comprehensive income. The adoption of ASU 2011-05 did not have a material impact on the Company’s financial statements.

In May 2011, the FASB issued ASU 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs”, which is effective for annual reporting periods beginning after December 15, 2011. This guidance amends certain accounting and disclosure requirements related to fair value measurements. Additional disclosure requirements in the update include: (1) for Level 3 fair value measurements, quantitative information about unobservable inputs used, a description of the valuation processes used by the entity, and a qualitative discussion about the sensitivity of the measurements to changes in the unobservable inputs; (2) for an entity’s use of a nonfinancial asset that is different from the asset’s highest and best use, the reason for the difference; (3) for financial instruments not measured at fair value but for which disclosure of fair value is required, the fair value hierarchy level in which the fair value measurements were determined; and (4) the disclosure of all transfers between Level 1 and Level 2 of the fair value hierarchy. ASU 2011-04 will become effective for the Company on January 1, 2012.  The adoption of this guidance did not have a material impact on the Company’s financial statements.

In April 2011, the FASB issued ASU 2011-02, “Receivables (Topic 310): A Creditor’s Determination of Whether a Restructuring is a Troubled Debt Restructuring”. This amendment explains which modifications constitute troubled debt restructurings (“TDR”). Under the new guidance, the definition of a troubled debt restructuring remains essentially unchanged, and for a loan modification to be considered a TDR, certain basic criteria must still be met. For public companies, the new guidance is effective for interim and annual periods beginning on or after June 15, 2011, and applies retrospectively to restructuring occurring on or after the beginning of the fiscal year of adoption. The adoption of this guidance did not have a material impact on the Company’s financial statements.

The Company has implemented all new accounting pronouncements that are in effect.  These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

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Balance Sheets (Parentheticals) (USD $)	Sep. 30, 2012	Dec. 31, 2011
Preferred stock, authorized	25,000,000	25,000,000
Preferred stock, par value (in Dollars per share)	$ 0.001	$ 0.001
Preferred stock, issued	0	0
Preferred stock, outstanding	0	0
Class A Preferred Stock, par value (in Dollars)	$ 0.001	$ 0.001
Class A Preferred Stock, issued (in Dollars)	7,500,000	7,500,000
Class A Preferred Stock, outstanding (in Dollars)	$ 7,500,000	$ 7,500,000
Common Stock, authorized	2,000,000,000	2,000,000,000
Common Stock, par value (in Dollars per share)	$ 0.001	$ 0.001
Common Stock, issued	347,380,000	347,380,000
Common Stock, outstanding	347,380,000	347,380,000

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Document And Entity Information (USD $)	9 Months Ended
	Sep. 30, 2012	Oct. 31, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	HDS International Corp.
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding	347,380,000
Entity Public Float		$ 97,380,000
Amendment Flag	false
Entity Central Index Key	0001454742
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Document Period End Date	Sep. 30, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q3

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Statements of Operations (USD $)	6 Months Ended		9 Months Ended		47 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012
Operating Expenses
Consulting fees	$ 105,000		$ 309,000	$ 20,000	$ 489,500
General and administrative	18,773	19,049	56,376	21,286	93,463
Management fees		5,000		20,000	43,727
Professional fees	19,834	9,556	40,623	35,556	145,229
Transfer agent fees	569	890	670	2,508	18,608
Total Operating Expenses	144,176	34,495	406,669	99,350	790,527
Loss Before Other Income (Expenses)	(144,176)	(34,495)	(406,669)	(99,350)	(790,527)
Other Income (Expenses)
Accretion expense	(2,805)	(1,342)	(8,306)	(1,342)	(12,437)
Gain on settlement of debt		240,268		240,268	24,552
Impairment of intangible assets					(92,538)
Interest expense	(12,246)	(7,604)	(34,654)	(14,642)	(66,356)
Total Other Income (Expenses)	(15,051)	231,322	(42,960)	224,284	(146,779)
Net Income (Loss) for the Period	$ (159,227)	$ 196,827	$ (449,629)	$ 124,934	$ (937,306)
Weighted Average Shares Outstanding (in Shares)	347,380,000	442,790,000	347,380,000	505,348,205

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1. Nature of Operations and Continuance of Business (Detail) (USD $)	Sep. 30, 2012
Working Capital Deficit	$ 372,216
Cumulative Earnings (Deficit)	$ 937,306

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2. Summary of Significant Accounting Policies (Tables)

3 Months Ended

Sep. 30, 2012

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

September 30, 2012

	Fair Value Measurements Using
	Quoted prices in active markets for identical instruments (Level 1) $	Significant other observable inputs (Level 2) $	Significant unobservable inputs (Level 3) $	Balance, September 30, 2012 $
Convertible debenture	–	–	555,637	555,637

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4. Convertible Debenture (Detail) (USD $)	1 Months Ended			6 Months Ended		9 Months Ended		14 Months Ended	19 Months Ended	47 Months Ended
	Aug. 19, 2011	Aug. 26, 2011	Sep. 06, 2011	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Feb. 19, 2013	Sep. 30, 2012	Aug. 03, 2012	Jun. 29, 2012	Dec. 31, 2011	Aug. 01, 2011
Convertible Notes Payable				$ 555,637		$ 555,637		$ 555,637		$ 555,637			$ 487,331	$ 500,000
Debt Instrument, Periodic Payment	100,000	150,000	250,000
Debt Instrument, Periodic Payment, Interest									0.03
Accrued Liabilities				16,808		16,808		16,808		16,808
Debt Instrument, Convertible, Conversion Price (in Dollars per share)												$ 0.01		$ 0.25
Debt Instrument, Convertible, If-converted Value in Excess of Principal	16,800
Common Stock, Conversion Basis	400,000
Accretion Expense				(2,805)	(1,342)	(8,306)	(1,342)	8,306		(12,437)
Convertible Notes Payable, Current											$ 30,000	$ 50,000

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2. Summary of Significant Accounting Policies (Detail) - Fair Value Measurement (USD $)	Sep. 30, 2012
Convertible debenture	$ 555,637

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3. Related Party Transactions (Detail) (USD $)	9 Months Ended	12 Months Ended	21 Months Ended
	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2012
Due to Related Parties, Current	$ 300,000	$ 300,000	$ 300,000
Due to Related Parties		312,137
Interest Expense, Related Party			34,657
Salaries, Wages and Officers' Compensation	32,250	9,000
	$ 38,407	$ 12,137	$ 38,407

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5. Commitments (Detail) (USD $)	6 Months Ended	9 Months Ended		47 Months Ended
	Sep. 30, 2012	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Jul. 18, 2012	Jun. 10, 2012	Oct. 12, 2011
Contractual Obligation					$ 3,750	$ 6,000	$ 3,000
Professional and Contract Services Expense	$ 105,000	$ 309,000	$ 20,000	$ 489,500

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Statements of Cash Flows (USD $)	6 Months Ended		47 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012
Net income (loss)	$ (159,227)	$ 196,827	$ (937,306)
Adjustment to reconcile net income (loss) to cash used in operating activities:
Accretion expense	(2,805)	(1,342)	(12,437)
Gain on settlement of debt		(240,268)	(24,552)
Impairment of intangible asset			(92,538)
Stock-based compensation			2,227
Shares issued for management fees			7,000
Changes in operating assets and liabilities:
Prepaid expense and deposits	7,575	(9,542)
Accounts payable and accrued liabilities	42,499	6,347	76,560
Accounts payable and accrued liabilities - related	26,270	4,007	38,407
Due to related parties			11,965
Net Cash Used in Operating Activities	(364,979)	(113,180)	(720,724)
Investing Activities
Acquisition of intangible assets			(10,000)
Net Cash Used by Investing Activities			(10,000)
Financing activities
Proceeds from loan payable	60,000	710,600	709,600
Repayment of loan payable		(149,449)	(149,449)
Proceeds from related parties			2,649
Repayment to related parties			(25,000)
Capital contribution			200,600
Proceeds from the issuance of common stock			7,523
Net Cash Provided by Financing Activities	60,000	561,151	745,923
Increase (decrease) in Cash	(304,979)	447,971	15,199
Cash, Beginning of Period	320,178	33,034
Cash, End of Period	15,199	481,005	15,199
Non-cash investing and financing activities
Forgiveness of related party debt			2,649
Issuance of common shares for acquisition of assets		250,000	250,000
Issuance of preferred shares for acquisition of assets		7,500	7,500
Issuance of note payable for acquisition of assets		$ 325,000	$ 325,000

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5. Commitments

9 Months Ended

Sep. 30, 2012

Commitments Disclosure [Text Block]

5.       Commitments

a)  On October 12, 2011, the Company entered into a verbal consulting agreement with a non-related party whereby the Company will pay a monthly consulting fee for services provided in the amounts of $3,000. The agreement is for a one month term automatically renewing in each successive month unless earlier terminated. On July 18, 2012, the Board of Directors reviewed the consulting agreement and authorized an increase to the monthly consulting fee from $3,000 to $3,750 per month beginning July 2012. During the nine months ended September 30, 2012, the Company incurred $29,250 in consulting fees relating to this agreement.

b)  On October 12, 2011, the Company entered into a consulting agreement with a non-related party whereby the Company will pay a monthly consulting fee for services provided in the amounts of $27,500. The agreement is for a one month term automatically renewing in each successive month unless earlier terminated. During the nine month period ended September 30, 2012, the Company incurred $247,500 in consulting fees relating to this agreement.

c)  On October 12, 2011, the Company entered into a consulting agreement with the President and CEO of the Company whereby the Company will pay a monthly consulting fee for services provided in the amounts of $3,000. The agreement is for a one month term automatically renewing in each successive month unless earlier terminated. On June 10, 2012, the Board of Directors authorized an increase to the monthly consulting fee from $3,000 to $6,000 per month beginning June 2012. On July 18, 2012, the Board of Directors reviewed the consulting agreement and adjusted the monthly consulting fee to $3,750 beginning July 2012. During the nine months ended September 30, 2012, the Company incurred $32,250 in consulting fees relating to this agreement.