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, 2013
	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 1, 2013, there were 377,203,075 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
	Consolidated Balance Sheets	3
	Consolidated Statements of Operations	4
	Consolidated Statements of Cash Flows	5
	Notes to the Consolidated Financial Statements	6
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.	12
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.	14
ITEM 4.	CONTROLS AND PROCEDURES.	14
PART II.   OTHER INFORMATION
ITEM 1A.	RISK FACTORS.	14
ITEM 6.	EXHIBITS.	15
Signatures		16
Exhibit Index		17

-2-

PART I - FINANCIAL INFORMATION

ITEM 1.                      FINANCIAL STATEMENTS.

HDS International Corp.

(A Development Stage Company)

Consolidated Balance Sheets

(expressed in U.S. dollars)

	September 30, 2013 (unaudited) $	December 31, 2012 $
ASSETS
Current Assets
Cash	10,338	12,650
Prepaid expenses	104	–
Total Current Assets	10,442	12,650
Other Assets
Deferred financing costs	5,703	–
Total Assets	16,145	12,650
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current Liabilities
Accounts payable and accrued liabilities	381,196	119,732
Accounts payable and accrued liabilities – related parties	124,433	57,219
Due to related parties	300,000	300,000
Total Current Liabilities	805,629	476,951
Non-Current Liabilities
Convertible debentures, net of unamortized discount of $56,015	3,985	–
Total Liabilities	809,614	476,951
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 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: 377,203,075 and 376,603,075 shares, respectively	377,203	376,603
Additional paid-in capital	349,275	283,875
Deficit accumulated during the development stage	(1,527,447)	(1,132,279)
Total Stockholders’ Equity (Deficit)	(793,469)	(464,301)
Total Liabilities and Stockholders’ Equity (Deficit)	16,145	12,650

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

-3-

HDS International Corp.

(A Development Stage Company)

Consolidated Statements of Operations

(expressed in U.S. dollars)

(unaudited)

	For the Three Months Ended September 30, 2013 $	For the Three Months Ended September 30, 2012 $	For the Nine Months Ended September 30, 2013 $	For the Nine Months Ended September 30, 2012 $	Accumulated from November 3, 2008 (date of inception) to September 30, 2013 $
Revenue	–	–	–	–	–
Operating Expenses
Consulting fees	206,000	105,000	317,750	309,000	910,000
General and administrative	963	18,773	3,624	56,376	101,359
Management fees	–	–	–	–	43,727
Professional fees	33,466	19,834	42,966	40,623	218,426
Transfer agent fees	91	569	260	670	18,868
Total Operating Expenses	240,520	144,176	364,600	406,669	1,292,380
Loss Before Other Expenses (Income)	(240,520)	(144,176)	(364,600)	(406,669)	(1,292,380)
Other Expenses (Income)
Accretion expense	–	2,805	–	8,306	16,800
Impairment of intangible assets	–	–	–	–	92,538
Interest expense	23,171	12,246	30,568	34,654	106,811
Loss (gain) on settlement of debt	–	–	–	–	18,918
Total Other Expenses (Income)	23,171	15,051	30,568	42,960	235,067
Net Loss for the Period	(263,691)	(159,227)	(395,168)	(449,629)	(1,527,447)
Net Loss Per Share, Basic and Diluted	–	–	–	–
Weighted Average Shares Outstanding	377,203,075	347,380,000	377,035,865	347,380,000

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

-4-

HDS International Corp.

(A Development Stage Company)

Consolidated Statements of Cash Flows

(expressed in U.S. dollars)

(unaudited)

	For the Nine Months Ended September 30, 2013 $	For the Nine Months Ended September 30, 2012 $	Accumulated from November 3, 2008 (date of inception) to September 30, 2013 $
Operating Activities
Net loss	(395,168)	(449,629)	(1,527,447)
Adjustment to reconcile net loss to cash used in operating activities:
Accretion of debt discount	3,985	8,306	20,785
Amortization of deferred financing costs	1,297	–	1,297
Loss (gain) on settlement of debt	–	–	18,918
Impairment of intangible assets	–	–	92,538
Shares issued for management fees	6,000	–	13,000
Stock-based compensation	–	–	2,227
Changes in operating assets and liabilities:
Prepaid expense and deposits	(104)	7,575	(104)
Accounts payable and accrued liabilities	261,464	42,499	428,803
Accounts payable and accrued liabilities – related	67,214	26,270	124,433
Due to related parties	–	–	11,965
Net Cash Used in Operating Activities	(55,312)	(364,979)	(813,585)
Investing activities
Acquisition of intangible assets	–	–	(10,000)
Net Cash Used by Investing Activities	–	–	(10,000)
Financing activities
Proceeds from convertible debenture	53,000	–	53,000
Proceeds from loan payable	–	60,000	709,600
Repayments of loan payable	–	–	(149,449)
Proceeds from related parties	–	–	2,649
Repayments to related parties	–	–	(25,000)
Capital contribution	–	–	200,600
Proceeds from the issuance of common stock	–	–	42,523
Net Cash Provided by Financing Activities	53,000	60,000	833,923
Change in Cash	(2,312)	(304,979)	10,338
Cash, Beginning of Period	12,650	320,178	–
Cash, End of Period	10,338	15,199	10,338
Supplemental Disclosures
Interest paid	–	–	–
Income tax paid	–	–	–
Non-cash investing and financing activities
Debt discount due to beneficial conversion feature	60,000	–	60,000
Forgiveness of related party debt	–	–	2,649
Issuance of common shares to settle debt	–	–	580,055
Issuance of common shares for acquisition of assets	–	–	250,000
Issuance of preferred shares for acquisition of assets	–	–	7,500
Issuance of note payable for acquisition of assets	–	–	325,000

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

-5-

HDS International Corp.

(A Development Stage Company)

Notes to the Consolidated Financial Statements

(expressed in U.S. dollars)

(unaudited)

1.      Nature of Operations and Continuance of Business

HDS International Corp. (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.

On June 11, 2012, HDS Energy and Ecosystems NB, Ltd., the Company’s wholly owned subsidiary, was incorporated in the Province of New Brunswick, Canada to manage the operations and other business development efforts.

Going Concern

These consolidated 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, 2013, the Company had a working capital deficiency of $795,187 and an accumulated deficit of $1,527,447. 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 consolidated 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)      Principles of Consolidation

The consolidated financial statements for the periods ending September 30, 2013 and December 31, 2012 include the accounts of HDS International Corp. and HDS Energy and Ecosystems NB, Ltd., the Company’s wholly owned subsidiary effective June 11, 2012. All intercompany transactions and balances have been eliminated in consolidation.

b)      Basis of Presentation

These consolidated 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.

c)      Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States 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 long-lived assets, convertible debentures, 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.

d)      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, 2013 and December 31, 2012, the Company had no cash equivalents.

-6-

HDS International Corp.

(A Development Stage Company)

Notes to the Consolidated Financial Statements

(expressed in U.S. dollars)

(unaudited)

2.      Summary of Significant Accounting Policies (continued)

e)      Intangible Assets

Intangible assets are carried at the purchased cost less accumulated amortization. Amortization is computed over the estimated useful lives of the respective assets, generally from fifteen to twenty years.

f)      Impairment of Long-Lived Assets

Long-lived assets and certain identifiable intangible assets to be held and used are reviewed for impairment whenever events or changes in circumstance indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. Measurement of an impairment loss for long-lived assets and certain identifiable intangible assets that management expects to hold and use is based on the fair value of the asset. Long-lived assets and certain identifiable intangible assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell.

g)      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.

h)      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.

i)      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.

j)      Interim Consolidated Financial Statements

These interim unaudited consolidated financial statements have been prepared on the same basis as the annual consolidated 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.

k)      Income Taxes

Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted ASC 740, Income Taxes, as of its inception. Pursuant to ASC 740, the Company is required to compute tax asset benefits for net operating losses carried forward. The potential benefits of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.

-7-

HDS International Corp.

(A Development Stage Company)

Notes to the Consolidated Financial Statements

(expressed in U.S. dollars)

(unaudited)

2.      Summary of Significant Accounting Policies (continued)

l)       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, 2013 and December 31, 2012, the Company has no items that represent comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.

m)      Financial Instruments

ASC 820, “Fair Value Measurements” and ASC 825, Financial Instruments, 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.

Assets and liabilities measured at fair value on a recurring basis were presented on the Company’s balance sheet as at September 30, 2013 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, 2013 $	Balance, December 31, 2012 $
Convertible debenture	–	–	–	3,985	–

The carrying values of all of our other financial instruments, which include 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.

n)      Recent Accounting Pronouncements

In February 2013, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, to improve the transparency of reporting these reclassifications. Other comprehensive income includes gains and losses that are initially excluded from net income for an accounting period. Those gains and losses are later reclassified out of accumulated other comprehensive income into net income. The amendments in the ASU do not change the current requirements for reporting net income or other comprehensive income in financial statements. All of the information that this ASU requires already is required to be disclosed elsewhere in the financial statements under U.S. GAAP. The new amendments will require an organization to:

-8-

HDS International Corp.

(A Development Stage Company)

Notes to the Consolidated Financial Statements

(expressed in U.S. dollars)

(unaudited)

2.      Summary of Significant Accounting Policies (continued)

n)      Recent Accounting Pronouncements (continued)

·     Present (either on the face of the statement where net income is presented or in the notes) the effects on the line items of net income of significant amounts reclassified out of accumulated other comprehensive income - but only if the item reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period; and

·     Cross-reference to other disclosures currently required under U.S. GAAP for other reclassification items (that are not required under U.S. GAAP) to be reclassified directly to net income in their entirety in the same reporting period. This would be the case when a portion of the amount reclassified out of accumulated other comprehensive income is initially transferred to a balance sheet account (e.g., inventory for pension-related amounts) instead of directly to income or expense.

The amendments apply to all public and private companies that report items of other comprehensive income. Public companies are required to comply with these amendments for all reporting periods (interim and annual). The amendments are effective for reporting periods beginning after December 15, 2012, for public companies. Early adoption is permitted. The adoption of ASU No. 2013-02 is not expected to have a material impact on our financial position or results of operations.

In January 2013, the FASB issued ASU No. 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities, which clarifies which instruments and transactions are subject to the offsetting disclosure requirements originally established by ASU 2011-11. The new ASU addresses preparer concerns that the scope of the disclosure requirements under ASU 2011-11 was overly broad and imposed unintended costs that were not commensurate with estimated benefits to financial statement users. In choosing to narrow the scope of the offsetting disclosures, the Board determined that it could make them more operable and cost effective for preparers while still giving financial statement users sufficient information to analyze the most significant presentation differences between financial statements prepared in accordance with U.S. GAAP and those prepared under IFRSs. Like ASU 2011-11, the amendments in this update will be effective for fiscal periods beginning on, or after January 1, 2013. The adoption of ASU 2013-01 is not expected to have a material impact on our financial position or results of operations.

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.      Convertible Debentures

a) On June 7, 2013, the Company entered into a $32,500 convertible debenture with a non-related party. Under the terms of the debenture, the amount is unsecured, bears interest at 8% per annum, and matures on December 7, 2014. The note is convertible into shares of common stock 180 days after the date of issuance (December 4, 2013) at a conversion rate of 50% of the average of the five lowest closing bid prices of the Company’s common stock for the thirty trading days ending one trading day prior to the date the conversion notice is sent by the holder to the Company. As at September 30, 2013, the Company recorded accrued interest of $819 (December 31, 2012 - $nil), which has been included in accounts payable and accrued liabilities.

In accordance with ASC 470-20, “Debt with Conversion and Other Options”, the Company recognized the intrinsic value of the embedded beneficial conversion feature of $32,500 as additional paid-in capital and an equivalent discount which will be charged to operations over the term of the convertible note. During the nine months ended September 30, 2013, the Company had amortized $2,376 (December 31, 2012 - $nil) of the debt discount to interest expense. As at September 30, 2013, the carrying value of the debenture was $2,376 (December 31, 2012 - $nil).

-9-

HDS International Corp.

(A Development Stage Company)

Notes to the Consolidated Financial Statements

(expressed in U.S. dollars)

(unaudited)

3.      Convertible Debentures (continued)

b) On July 15, 2013, the Company entered into a $27,500 convertible debenture with a non-related party. Under the terms of the debenture, the amount is unsecured, bears interest at 8% per annum, and matures on January 11, 2015. The note is convertible into shares of common stock 180 days after the date of issuance (January 11, 2014) at a conversion rate of 50% of the average of the five lowest closing bid prices of the Company’s common stock for the thirty trading days ending one trading day prior to the date the conversion notice is sent by the holder to the Company. As at September 30, 2013, the Company recorded accrued interest of $464 (December 31, 2012 - $nil), which has been included in accounts payable and accrued liabilities.

In accordance with ASC 470-20, “Debt with Conversion and Other Options”, the Company recognized the intrinsic value of the embedded beneficial conversion feature of $27,500 as additional paid-in capital and an equivalent discount which will be charged to operations over the term of the convertible note. During the nine months ended September 30, 2013, the Company had amortized $1,609 (December 31, 2012 - $nil) of the debt discount to interest expense. As at September 30, 2013, the carrying value of the debenture was $1,609 (December 31, 2012 - $nil).

4.      Related Party Transactions

a) As at September 30, 2013, the Company owes $300,000 (December 31, 2012 - $300,000) to a company controlled by officers and directors of the Company.  The amount owing is unsecured, bears interest at 10% per annum, and due on demand.  As at September 30, 2013, the Company has recorded accrued interest of $64,658 (December 31, 2012 - $42,219) which has been included in accounts payable and accrued liabilities – related parties.

b) As at September 30, 2013, the Company owes $10,225 (December 31, 2012 - $nil) to companies under common control by officers and directors of the Company which has been included in accounts payable and accrued liabilities – related parties. The amounts owing are unsecured, non-interest bearing, and due on demand.

c) For the period ended September 30, 2013, the Company incurred $33,750 (December 31, 2012 - $43,500) to the President and CEO of the Company for consulting services. As at September 30, 2013, the Company owes $48,750 (December 31, 2012 - $15,000), which has been included in accounts payable and accrued liabilities – related parties. The amounts owing are unsecured, non-interest bearing, and due on demand.

d) For the period ended September 30, 2013, the Company incurred $800 (December 31, 2012 - $nil) to the President and CEO of the Company for reimbursement of expenses which has been included in accounts payable and accrued liabilities – related parties.

5.      Common Stock

On January 2, 2013, the Company issued 600,000 common shares with a fair value of $6,000 for consulting services. The fair value of the common shares was determined by using the closing trading price on the measurement date.

6.      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. On October 1, 2012, the Board of Directors reviewed the consulting agreement and adjusted the consulting fee from $3,750 to $3,000 per month beginning October 2012.

During the period ended September 30, 2013, the Company incurred $27,000 (December 31, 2012 - $38,250) in consulting fees relating to this agreement, of which $33,000 (December 31, 2012 - $6,000) is recorded in the account payable balance as at September 30, 2013.

-10-

HDS International Corp.

(A Development Stage Company)

Notes to the Consolidated Financial Statements

(expressed in U.S. dollars)

(unaudited)

6.      Commitments (continued)

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 period ended September 30, 2013, the Company incurred $247,500 (December 31, 2012 - $330,000) in consulting fees relating to this agreement, of which $316,000 (December 31, 2012 - $91,000) is recorded in the account payable balance as at September 30, 2013.

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 year ended September 30, 2013, the Company incurred $33,750 (December 31, 2012 - $43,500) in consulting fees relating to this agreement, of which $48,750 (December 31, 2012 - $15,000) is recorded in the account payable – related parties balance as at September 30, 2013.

d) On January 2, 2013, the Company entered into a consulting agreement with The Holden Group, LLC (“Holden”) whereby the Company paid Holden $2,000 and issued 600,000 restricted common shares of the Company upon the execution of the agreement as well as pay $500 on each of the first, second and third month anniversaries of the agreement. These final three payments have been accrued and recorded in accounts payable and accrued liabilities.

7.      Subsequent Events

On October 4, 2013, the Company entered into a $32,500 convertible debenture with a non-related party. Under the terms of the debenture, the amount is unsecured, bears interest at 8% per annum, and matures on July 8, 2015. The note is convertible into shares of common stock of the Company 180 days after the date of issuance (April 2, 2014) at a conversion rate of 50% of the average of the five lowest closing bid prices of the Company’s common stock for the thirty trading days ending one trading date prior to the date the conversion notice is sent by the holder to the Company.

-11-

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, 2012.

RESULTS OF OPERATIONS

Working Capital

	September 30, 2013 $	December 31, 2012 $
Current Assets	10,442	12,650
Current Liabilities	805,629	476,951
Working Capital Deficit	(795,187)	(464,301)

Cash Flows

	September 30, 2013 $	September 30, 2012 $
Cash Flows used in Operating Activities	(55,312)	(364,979)
Cash Flows from Financing Activities	53,000	60,000
Net Decrease in Cash During Period	(2,312)	(304,979)

Operating Revenues

We have not generated any revenues since inception.

Operating Expenses and Net Loss

Operating expenses for the three months ended September 30, 2013 were $240,520 compared with $144,176 for the three months ended September 30, 2012. The increase in operating expenses was attributed to an increase in consulting fees of $101,000 and professional fees of $13,632 offset by a decrease in transfer agent fees of $478 and general and administrative fees of $17,810 for day-to-day operating costs. For the nine months ended September 30, 2013 the Company incurred operating expenses of $364,600 compared with $406,669 for the nine months ended September 30, 2012. The decrease in operating expenses was attributed to a decrease in transfer agent fees of $410 and general and administrative fees of $52,752 for day-to-day operating costs offset by an increase in consulting fees of $8,750 and professional fees of $2,343.

During the nine months ended September 30, 2013, the Company recorded a net loss of $395,168 compared with net loss of $449,629 for the nine months ended September 30, 2012.  In addition to the above, the Company incurred a decrease of $4,086 of interest expense relating to debt balances and $8,306 of accretion expense for the fair value of the beneficial conversion feature on the convertible note issued in August 2011 which was fully accreted during fiscal 2012.

-12-

Liquidity and Capital Resources

As at September 30, 2013, the Company’s cash balance was $10,338 and total assets was $16,145, compared to cash balance and total assets of $12,650 as at December 31, 2012. The decrease in the cash balance was attributed to the use of cash during the period for day-to-day activities.  The increase in total assets was attributed to an increase in prepaid expenses and deferred finance costs.

As at September 30, 2013, the Company had total liabilities of $809,614 compared with total liabilities of $476,951 as at December 31, 2012. The increase in total liabilities is attributed to an increase of account payable and accrued liabilities of $328,678, $261,464 of which pertained to trade accounts payable and $67,214 pertained to related party accounts payable and accrued liabilities, as well as an increase in convertible debenture of $3,985, net of unamortized discount.

As at September 30, 2013, the Company has a working capital deficit of $795,187 compared with working capital deficit of $464,301 at December 31, 2012 with the increase in the working capital deficit attributed to the decrease of $2,312 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 as noted above.

Cashflow from Operating Activities

During the nine months ended September 30, 2013, the Company used $55,312 of cash for operating activities compared to the use of $364,979 of cash for operating activities during the nine months ended September 30, 2012.  The decrease in the use of cash for operating activities was attributed to the fact that the Company incurred less for general and administrative costs for the period for day-to-day activities and a small decrease for transfer agent fees which was offset by an increase in consulting fees related to the renewable energy and eco-sustainable technologies owned, as well as a increase for professional fees and the issuance of shares for management fees.

Cashflow from Financing Activities

During the nine months ended September 30, 2013, the Company received $53,000 of proceeds from financing activities compared to $60,000 during the nine months ended September 30, 2012. The decrease in proceeds from financing activities was due to the Company incurring deferred financing costs.

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.

-13-

Critical Accounting Policies

Our consolidated 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 consolidated 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 consolidated financial statements. A complete summary of these policies is included in the notes to our consolidated 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 March 28, 2013, for a complete discussion relating to the foregoing evaluation of Disclosures and Procedures.

There was no change in our internal control over financial reporting during the quarter ended September 30, 2013 that has materially affected, or is 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.

-14-

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
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

-15-

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 6th day of November, 2013.

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

-16-

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
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

-17-

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, 2013 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 6, 2013	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, 2013 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 6th day of November, 2013.

TASSOS RECACHINAS

Tassos Recachinas

Chief Executive Officer and Chief Financial Officer

XML

4. Related Party Transactions (Details) (USD $)	Sep. 30, 2013	Sep. 29, 2013	Jun. 30, 2013	Dec. 31, 2012
Related Party Transactions [Abstract]
Related Party Transaction, Due from (to) Related Party	$ 300,000			$ 300,000
Debt Instrument, Interest Rate, Effective Percentage	10.00%
Interest Payable	64,658			42,219
Due to Related Parties	10,225
Due to Officers or Stockholders, Current	33,750			43,500
Accounts Payable and Accrued Liabilities - Other Related Party			48,750	15,000
	$ 124,433	$ 800		$ 57,219

XML

Consolidated Statements of Operations (Unaudited) (USD $)	3 Months Ended		9 Months Ended		59 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013
Operating Expenses
Consulting fees	$ 206,000	$ 105,000	$ 317,750	$ 309,000	$ 910,000
General and administrative	963	18,773	3,624	56,376	101,359
Management fees					43,727
Professional fees	33,466	19,834	42,966	40,623	218,426
Transfer agent fees	91	569	260	670	18,868
Total Operating Expenses	240,520	144,176	364,600	406,669	1,292,380
Loss Before Other Expenses (Income)	(240,520)	(144,176)	(364,600)	(406,669)	(1,292,380)
Other Expenses (Income)
Accretion expense		2,805		8,306	16,800
Impairment of intangible assets					92,538
Interest expense	23,171	12,246	30,568	34,654	106,811
Loss (gain) on settlement of debt					18,918
Total Other Expenses (Income)	23,171	15,051	30,568	42,960	235,067
Net Loss for the Period	$ (263,691)	$ (159,227)	$ (395,168)	$ (449,629)	$ (1,527,447)
Weighted Average Shares Outstanding (in Shares)	377,203,075	347,380,000	377,035,865	347,380,000

XML

5. Common Stock

3 Months Ended

Sep. 30, 2013

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

5.      Common Stock

On January 2, 2013, the Company issued 600,000 common shares with a fair value of $6,000 for consulting services. The fair value of the common shares was determined by using the closing trading price on the measurement date.

XML

5. Common Stock (Details) (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2013
Stockholders' Equity Note [Abstract]
Stock Issued During Period, Shares, Issued for Services (in Shares)	600,000	600,000
Stock Issued During Period, Value, Issued for Services (in Dollars)		$ 6,000

XML

1. Nature of Operations and Continuance of Business

3 Months Ended

Sep. 30, 2013

Natureof Operationand Continuanceof Business [Abstract]

Natureof Operationand Continuanceof Business

1.      Nature of Operations and Continuance of Business

HDS International Corp. (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.

On June 11, 2012, HDS Energy and Ecosystems NB, Ltd., the Company’s wholly owned subsidiary, was incorporated in the Province of New Brunswick, Canada to manage the operations and other business development efforts.

Going Concern

These consolidated 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, 2013, the Company had a working capital deficiency of $795,187 and an accumulated deficit of $1,527,447. 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 consolidated 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. 

XML

3. Convertible Debenture

3 Months Ended

Sep. 30, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities Disclosure [Text Block]

3.      Convertible Debentures

a) On June 7, 2013, the Company entered into a $32,500 convertible debenture with a non-related party. Under the terms of the debenture, the amount is unsecured, bears interest at 8% per annum, and matures on December 7, 2014. The note is convertible into shares of common stock 180 days after the date of issuance (December 4, 2013) at a conversion rate of 50% of the average of the five lowest closing bid prices of the Company’s common stock for the thirty trading days ending one trading day prior to the date the conversion notice is sent by the holder to the Company. As at September 30, 2013, the Company recorded accrued interest of $819 (December 31, 2012 - $nil), which has been included in accounts payable and accrued liabilities.

In accordance with ASC 470-20, “Debt with Conversion and Other Options”, the Company recognized the intrinsic value of the embedded beneficial conversion feature of $32,500 as additional paid-in capital and an equivalent discount which will be charged to operations over the term of the convertible note. During the nine months ended September 30, 2013, the Company had amortized $2,376 (December 31, 2012 - $nil) of the debt discount to interest expense. As at September 30, 2013, the carrying value of the debenture was $2,376 (December 31, 2012 - $nil).

b) On July 15, 2013, the Company entered into a $27,500 convertible debenture with a non-related party. Under the terms of the debenture, the amount is unsecured, bears interest at 8% per annum, and matures on January 11, 2015. The note is convertible into shares of common stock 180 days after the date of issuance (January 11, 2014) at a conversion rate of 50% of the average of the five lowest closing bid prices of the Company’s common stock for the thirty trading days ending one trading day prior to the date the conversion notice is sent by the holder to the Company. As at September 30, 2013, the Company recorded accrued interest of $464 (December 31, 2012 - $nil), which has been included in accounts payable and accrued liabilities.

In accordance with ASC 470-20, “Debt with Conversion and Other Options”, the Company recognized the intrinsic value of the embedded beneficial conversion feature of $27,500 as additional paid-in capital and an equivalent discount which will be charged to operations over the term of the convertible note. During the nine months ended September 30, 2013, the Company had amortized $1,609 (December 31, 2012 - $nil) of the debt discount to interest expense. As at September 30, 2013, the carrying value of the debenture was $1,609 (December 31, 2012 - $nil).

XML

6. Commitments

3 Months Ended

Sep. 30, 2013

Disclosure Text Block Supplement [Abstract]

Commitments Disclosure [Text Block]

6.      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. On October 1, 2012, the Board of Directors reviewed the consulting agreement and adjusted the consulting fee from $3,750 to $3,000 per month beginning October 2012.

During the period ended September 30, 2013, the Company incurred $27,000 (December 31, 2012 - $38,250) in consulting fees relating to this agreement, of which $33,000 (December 31, 2012 - $6,000) is recorded in the account payable balance as at September 30, 2013.

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 period ended September 30, 2013, the Company incurred $247,500 (December 31, 2012 - $330,000) in consulting fees relating to this agreement, of which $316,000 (December 31, 2012 - $91,000) is recorded in the account payable balance as at September 30, 2013.

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 year ended September 30, 2013, the Company incurred $33,750 (December 31, 2012 - $43,500) in consulting fees relating to this agreement, of which $48,750 (December 31, 2012 - $15,000) is recorded in the account payable – related parties balance as at September 30, 2013.

d) On January 2, 2013, the Company entered into a consulting agreement with The Holden Group, LLC (“Holden”) whereby the Company paid Holden $2,000 and issued 600,000 restricted common shares of the Company upon the execution of the agreement as well as pay $500 on each of the first, second and third month anniversaries of the agreement. These final three payments have been accrued and recorded in accounts payable and accrued liabilities.

XML

4. Related Party Transactions

3 Months Ended

Sep. 30, 2013

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

4.      Related Party Transactions

a) As at September 30, 2013, the Company owes $300,000 (December 31, 2012 - $300,000) to a company controlled by officers and directors of the Company.  The amount owing is unsecured, bears interest at 10% per annum, and due on demand.  As at September 30, 2013, the Company has recorded accrued interest of $64,658 (December 31, 2012 - $42,219) which has been included in accounts payable and accrued liabilities – related parties.

b) As at September 30, 2013, the Company owes $10,225 (December 31, 2012 - $nil) to companies under common control by officers and directors of the Company which has been included in accounts payable and accrued liabilities – related parties. The amounts owing are unsecured, non-interest bearing, and due on demand.

c) For the period ended September 30, 2013, the Company incurred $33,750 (December 31, 2012 - $43,500) to the President and CEO of the Company for consulting services. As at September 30, 2013, the Company owes $48,750 (December 31, 2012 - $15,000), which has been included in accounts payable and accrued liabilities – related parties. The amounts owing are unsecured, non-interest bearing, and due on demand.

d) For the period ended September 30, 2013, the Company incurred $800 (December 31, 2012 - $nil) to the President and CEO of the Company for reimbursement of expenses which has been included in accounts payable and accrued liabilities – related parties.

XML

Balance Sheets (Parentheticals) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Preferred stock, authorized	25,000,000	25,000,000
Preferred stock, par value (in Dollars per share)	$ 0.001	$ 0.001
Class A Preferred Stock, authorized (in Dollars)	$ 25,000,000	$ 25,000,000
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	377,203,075	376,603,075
Common Stock, outstanding	377,203,075	376,603,075

XML

1. Nature of Operations and Continuance of Business (Details) (USD $)	Sep. 30, 2013
Natureof Operationand Continuanceof Business [Abstract]
Working Capital Deficit	$ 795,187
Cumulative Earnings (Deficit)	$ 1,527,447

XML

Consolidated Statements of Cash Flows (Unaudited) (USD $)	9 Months Ended		59 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013
Net loss	$ (395,168)	$ (449,629)	$ (1,527,447)
Adjustment to reconcile net loss to cash used in operating activities:
Accretion of debt discount	3,985	8,306	20,785
Amortization of deferred financing costs	1,297		1,297
Loss (gain) on settlement of debt			18,918
Impairment of intangible assets			92,538
Shares issued for management fees	6,000		13,000
Stock-based compensation			2,227
Changes in operating assets and liabilities:
Prepaid expense and deposits	(104)	7,575	(104)
Accounts payable and accrued liabilities	261,464	42,499	428,803
Accounts payable and accrued liabilities – related	67,214	26,270	124,433
Due to related parties			11,965
Net Cash Used in Operating Activities	(55,312)	(364,979)	(813,585)
Investing activities
Acquisition of intangible assets			(10,000)
Net Cash Used by Investing Activities			(10,000)
Financing activities
Proceeds from convertible debenture	53,000		53,000
Proceeds from loan payable		60,000	709,600
Repayments of loan payable			(149,449)
Proceeds from related parties			2,649
Repayments to related parties			(25,000)
Capital contribution			200,600
Proceeds from the issuance of common stock			42,523
Net Cash Provided by Financing Activities	53,000	60,000	833,923
Change in Cash	(2,312)	(304,979)	10,338
Cash, Beginning of Period	12,650	320,178
Cash, End of Period	10,338	15,199	10,338
Non-cash investing and financing activities
Debt discount due to beneficial conversion feature	60,000		60,000
Forgiveness of related party debt			2,649
Issuance of common shares to settle debt			580,055
Issuance of common shares for acquisition of assets			250,000
Issuance of preferred shares for acquisition of assets			7,500
Issuance of note payable for acquisition of assets			$ 325,000

XML

Balance Sheets (USD $)	Sep. 30, 2013	Dec. 31, 2012
Current Assets
Cash	$ 10,338	$ 12,650
Prepaid expenses	104
Total Current Assets	10,442	12,650
Other Assets
Deferred financing costs	5,703
Total Assets	16,145	12,650
Current Liabilities
Accounts payable and accrued liabilities	381,196	119,732
Accounts payable and accrued liabilities – related parties	124,433	57,219
Due to related parties	300,000	300,000
Total Current Liabilities	805,629	476,951
Non-Current Liabilities
Convertible debentures, net of unamortized discount of $56,015	3,985
Total Liabilities	809,614	476,951
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 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: 377,203,075 and 376,603,075 shares, respectively	377,203	376,603
Additional paid-in capital	349,275	283,875
Deficit accumulated during the development stage	(1,527,447)	(1,132,279)
Total Stockholders’ Equity (Deficit)	(793,469)	(464,301)
Total Liabilities and Stockholders’ Equity (Deficit)	$ 16,145	$ 12,650

XML

2. Summary of Significant Accounting Policies (Tables)

21 Months Ended

Sep. 30, 2013

Accounting Policies [Abstract]

Fair Value, Assets Measured on Recurring Basis [Table Text Block]

	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, 2013 $	Balance, December 31, 2012 $
Convertible debenture	–	–	–	3,985	–

XML

3. Convertible Debenture (Details) (USD $)	3 Months Ended			6 Months Ended	9 Months Ended				12 Months Ended	18 Months Ended		21 Months Ended	59 Months Ended
	Sep. 30, 2013	Sep. 30, 2013	Sep. 30, 2012	Jan. 11, 2014	Sep. 30, 2013	Sep. 30, 2013	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012	Jan. 11, 2015	Jan. 16, 2015	Jul. 08, 2015	Sep. 30, 2013	Oct. 04, 2013	Jul. 15, 2013	Jun. 07, 2013
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Debt Instrument, Face Amount (in Dollars)														$ 32,500	$ 27,500	$ 32,500
Debt Instrument, Convertible, Effective Interest Rate										8.00%	8.00%	8.00%
Debt Instrument, Convertible, Conversion Ratio				0.50						0.50		0.50
Debt Instrument, Convertible, Accrued Interest	819	819			819	819	819						819
Debt Instrument, Convertible, Beneficial Conversion Feature						32,500	27,500
Amortization of Debt Discount (Premium)					2,376	2,376	1,609		1,609
Interest Expense	$ 464	$ 23,171	$ 12,246				$ 30,568	$ 34,654					$ 106,811

XML

7. Subsequent Events

3 Months Ended

Sep. 30, 2013

Subsequent Events [Abstract]

Subsequent Events [Text Block]

7.      Subsequent Events

On October 4, 2013, the Company entered into a $32,500 convertible debenture with a non-related party. Under the terms of the debenture, the amount is unsecured, bears interest at 8% per annum, and matures on July 8, 2015. The note is convertible into shares of common stock of the Company 180 days after the date of issuance (April 2, 2014) at a conversion rate of 50% of the average of the five lowest closing bid prices of the Company’s common stock for the thirty trading days ending one trading date prior to the date the conversion notice is sent by the holder to the Company.

XML

2. Summary of Significant Accounting Policies

3 Months Ended

Sep. 30, 2013

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

2.      Summary of Significant Accounting Policies

a)      Principles of Consolidation

The consolidated financial statements for the periods ending September 30, 2013 and December 31, 2012 include the accounts of HDS International Corp. and HDS Energy and Ecosystems NB, Ltd., the Company’s wholly owned subsidiary effective June 11, 2012. All intercompany transactions and balances have been eliminated in consolidation.

b)      Basis of Presentation

These consolidated 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.

c)      Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States 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 long-lived assets, convertible debentures, 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.

d)      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, 2013 and December 31, 2012, the Company had no cash equivalents.

e)      Intangible Assets

Intangible assets are carried at the purchased cost less accumulated amortization. Amortization is computed over the estimated useful lives of the respective assets, generally from fifteen to twenty years.

f)      Impairment of Long-Lived Assets

Long-lived assets and certain identifiable intangible assets to be held and used are reviewed for impairment whenever events or changes in circumstance indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. Measurement of an impairment loss for long-lived assets and certain identifiable intangible assets that management expects to hold and use is based on the fair value of the asset. Long-lived assets and certain identifiable intangible assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell.

g)      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.

h)      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.

i)      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.

j)      Interim Consolidated Financial Statements

These interim unaudited consolidated financial statements have been prepared on the same basis as the annual consolidated 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.

k)      Income Taxes

Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted ASC 740, Income Taxes, as of its inception. Pursuant to ASC 740, the Company is required to compute tax asset benefits for net operating losses carried forward. The potential benefits of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.

l)       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, 2013 and December 31, 2012, the Company has no items that represent comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.

m)      Financial Instruments

ASC 820, “Fair Value Measurements” and ASC 825, Financial Instruments, 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.

Assets and liabilities measured at fair value on a recurring basis were presented on the Company’s balance sheet as at September 30, 2013 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, 2013 $	Balance, December 31, 2012 $
Convertible debenture	–	–	–	3,985	–

The carrying values of all of our other financial instruments, which include 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.

n)      Recent Accounting Pronouncements

In February 2013, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, to improve the transparency of reporting these reclassifications. Other comprehensive income includes gains and losses that are initially excluded from net income for an accounting period. Those gains and losses are later reclassified out of accumulated other comprehensive income into net income. The amendments in the ASU do not change the current requirements for reporting net income or other comprehensive income in financial statements. All of the information that this ASU requires already is required to be disclosed elsewhere in the financial statements under U.S. GAAP. The new amendments will require an organization to:

·     Present (either on the face of the statement where net income is presented or in the notes) the effects on the line items of net income of significant amounts reclassified out of accumulated other comprehensive income - but only if the item reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period; and

·     Cross-reference to other disclosures currently required under U.S. GAAP for other reclassification items (that are not required under U.S. GAAP) to be reclassified directly to net income in their entirety in the same reporting period. This would be the case when a portion of the amount reclassified out of accumulated other comprehensive income is initially transferred to a balance sheet account (e.g., inventory for pension-related amounts) instead of directly to income or expense.

The amendments apply to all public and private companies that report items of other comprehensive income. Public companies are required to comply with these amendments for all reporting periods (interim and annual). The amendments are effective for reporting periods beginning after December 15, 2012, for public companies. Early adoption is permitted. The adoption of ASU No. 2013-02 is not expected to have a material impact on our financial position or results of operations.

In January 2013, the FASB issued ASU No. 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities, which clarifies which instruments and transactions are subject to the offsetting disclosure requirements originally established by ASU 2011-11. The new ASU addresses preparer concerns that the scope of the disclosure requirements under ASU 2011-11 was overly broad and imposed unintended costs that were not commensurate with estimated benefits to financial statement users. In choosing to narrow the scope of the offsetting disclosures, the Board determined that it could make them more operable and cost effective for preparers while still giving financial statement users sufficient information to analyze the most significant presentation differences between financial statements prepared in accordance with U.S. GAAP and those prepared under IFRSs. Like ASU 2011-11, the amendments in this update will be effective for fiscal periods beginning on, or after January 1, 2013. The adoption of ASU 2013-01 is not expected to have a material impact on our financial position or results of operations.

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.

XML

6. Commitments (Details) (USD $)	3 Months Ended					9 Months Ended		12 Months Ended	59 Months Ended
	Sep. 30, 2013	Sep. 30, 2013	Mar. 31, 2013	Mar. 31, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012	Sep. 30, 2013	Oct. 01, 2012	Jul. 18, 2012	Jun. 10, 2012	Oct. 12, 2011
Disclosure Text Block Supplement [Abstract]
Contractual Obligation One													$ 3,000
Contractual Obligation One First Revision											3,750
Contractual Obligation One Second Revision										3,000
Professional and Contract Services Expense	27,000	206,000			105,000	317,750	309,000	38,250	910,000
Contractual Obligation One Account Payable	33,000	33,000				33,000		6,000	33,000
Contractual Obligation Two													27,500
Contractual Obligation Two, Professional and Contract Fee Expense		247,500						330,000
Contractual Obligation Two Account Payable	316,000	316,000				316,000		91,000	316,000
Contractual Obligation Three													3,000
Contractual Obligation Three First Revision												6,000
Contractual Obligation Three Second Revision											3,750
Contractual Obligation, Three Professional and Contract Fee Expense		33,750						43,500
Contractual Obligation Three Account Payable	48,750	48,750				48,750		15,000	48,750
Contractual Obligation			2,000	2,000
Stock Issued During Period, Shares, Issued for Services (in Shares)			600,000	600,000
Contractual Obligation, Due in Next Twelve Months			$ 500	$ 500

XML

2. Summary of Significant Accounting Policies (Details) - Assets and Liabilities Measured at Fair Value (USD $)	Sep. 30, 2013
Assets and Liabilities Measured at Fair Value [Abstract]
Convertible debenture	$ 3,985

XML

7. Subsequent Events (Details) (USD $)	6 Months Ended	18 Months Ended		21 Months Ended
	Jan. 11, 2014	Jan. 11, 2015	Jan. 16, 2015	Jul. 08, 2015	Oct. 04, 2013	Jul. 15, 2013	Jun. 07, 2013
Subsequent Events [Abstract]
Debt Instrument, Face Amount (in Dollars)					$ 32,500	$ 27,500	$ 32,500
Debt Instrument, Convertible, Effective Interest Rate		8.00%	8.00%	8.00%
Debt Instrument, Convertible, Conversion Ratio	0.50	0.50		0.50

XML

Document And Entity Information	9 Months Ended
	Sep. 30, 2013	Nov. 05, 2013
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		377,203,075
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, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3