UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





FORM 10-Q





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





For the quarterly period ended September 30, 2009





or





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





For the transition period from ______________________ to ______________________





Commission file number: 000-53716





PURIO INC.


(Exact name of registrant as specified in its charter)





Nevada

98-05255034(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)





1048 – 1685 H Street


Blaine, Washington 98230


(Address of principal executive offices)





888.590.1156


(Registrant’s telephone number, including area code)





__________________________________________________


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





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yesþ   Noo





Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required
to submit and post such files).  Yesþ   Noo





Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.





Large accelerated filer o   Accelerated filer o   Non-accelerated filer o   Smaller
reporting companyþ





Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YesoNo þ





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





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





APPLICABLE ONLY TO CORPORATE ISSUERS





As of November 16, 2009 the registrant’s outstanding common stock consisted of 55,234,063shares.














Table of Contents





PART I – FINANCIAL INFORMATION
2Item 1. Financial Statements
2Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
3Item 3. Quantitative and Qualitative Disclosures About Market Risk
8Item 4. Controls and Procedures
8PART II – OTHER INFORMATION
9Item 1. Legal Proceedings
9Item 2. Unregistered Sales of Equity Securities
9Item 3. Defaults Upon Senior Securities
9Item 4. Submission of Matters to a Vote of Security Holders
9Item 5. Other Information
9Item 6. Exhibits
9




1





PART I – FINANCIAL INFORMATION


Item 1.  Financial Statements





The unaudited interim financial statements of Purio Inc. (“we”, “our”, “us”, the “Company”) follow. All currency references in this report are to U.S. dollars unless otherwise noted.











Purio Inc.


(A Development Stage Company)




September 30, 2009




IndexConsolidated Balance Sheet
F–1Consolidated Statement of Operations
F–2Consolidated Statement of Cash Flows
F–3Consolidated Statement of Stockholders’ Equity
F–4Notes to the Consolidated Financial Statements
F–5








2








PURIO, INC.( A Development Stage Company)CONSOLIDATED BALANCE SHEETSeptember 30,


December 31,2009


2008(Unaudited)ASSETSCurrent AssetsCash and Cash Equivalents

$
1,084


$
36,409Prepaid Expenses


-



11,088Inventory


15,035



11,006Total Current Assets


16,119



58,503Property and EquipmentFixed Assets, Net of Accumulated Depreciation


39,214



45,999Other AssetsPatents


121,610



121,610TOTAL ASSETS

$
176,943


$
226,112LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)Current LiabilitiesAccounts Payable


9,851



9,988Deposit


-



265,385Subscriptions Received


291,290



35,955Stockholders’ Loans


78,908



17,089Total Current Liabilities


380,049



328,417Shareholders' Equity (Deficit)Common Stock, no par value; stated value $0.001, authorized375,000,000 shares, issued and outstanding55,234,063 as at September 30, 2009,55,234,063 as at December 31, 2008


55,234



55,234Additional Paid-In Capital


948,974



933,365Accumulated Other Comprehensive Income


30,484



27,406Deficit Accumulated During the Development Stage


(1,237,798
)


(1,118,310
)TOTAL SHAREHOLDERS' EQUITY (DEFICIT)


(203,106
)


(102,305
)TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$
176,943


$
226,112





F-1





PURIO INC.(A Development Stage Company)CONSOLIDATED STATEMENT OF OPERATIONS(Unaudited)`





For the Periodof Inceptionfrom Nov. 16,For the three months ended


For the nine months ended


1999, throughSeptember 30


September 30


Sept. 30,2009


2008


2009


2008


2009RevenueSales

$
-


$
138


$
-


$
-


$
5,113Selling ExpensesMarketing


-



-



-



-



40,345General and Administrative Expenses:Professional Fees


22,305



17,864



44,004



71,254



390,525Exploration Costs and Expenses


-



-



-



-



22,219Occupancy Costs


11,595



7,700



24,313



13,244



46,192Consulting


-



1,185



-



41,293



430,698Depreciation


2,060



2,266



6,180



3,273



35,170Impairment of Mineral Rights


-



-



-



-



3,600Stock Transfer Fees


-



-



-



2,033



4,987Administration


10,866



32,269



24,391



32,369



62,182Other General and AdministrativeExpenses


11,611



114,081



19,828



133,772



206,139Total General and Administrative  Expenses


58,437



175,465



118,716



297,238



1,201,712Net Operating Loss


(58,437
)


(175,465
)


(118,716
)


(297,238
)


(1,236,944
)Other Expense


(345
)


21



(772
)


289



(854
)Net Loss


(58,782
)


(175,444
)


(119,488
)


(269,949
)


(1,237,798
)Currency Translation Adjustment


99



164



3,078



20,702



30,484Comprehensive Loss

$
(58,683
)

$
(175,280
)

$
(116,410
)

$
(276,247
)

$
(1,207,314
)Loss Per Common Share, basic and diluted

$
(0.001
)

$
(0.003
)

$
(0.002
)

$
(0.005
)Weighted Average Shares Outstanding,Basic and Diluted:


55,234,063



55,234,063



55,234,063



55,179,105






F-2







PURIO INC.(A Development Stage Company)CONSOLIDATED STATEMENT OF CASH FLOWS(Unaudited)For the Periodof InceptionNov. 16,For the three months ended


For the nine months ended


1999, throughSeptember 30,


September 30,


Sept. 30,2009


2008


2009


2008


2008Cash flows from operating activities:Net operating income (loss)

$
(58,782
)

$
(175,465
)

$
(119,488
)

$
(297,238
)

$
(1,237,798
)Adjustments to reconcile net loss tonet cash used by operating activities:Non-cash depreciation


2,060



2,266



6,180



3,273



35,170Subscriptions received










255,235



(12,150
)


291,290Non-cash common stock for services














235



373,979Consolidation of subsidiary paid-in capital










15,609Change in operating assets and liabilities:Accounts payable


(1,065
)


2,458



(137
)


(15,912
)


9,851Inventory






(11,006
)


(4,029
)


(11,006
)


(15,035
)Deposits






100,000



(265,385
)


199,955



167,395Prepaid expenses


11,088







11,088



(10,317
)Net cash (used by) operating  activities


(46,699
)


(81,747
)


(100,827
)


(143,180
)


(542,543
)Cash flows from investing activities:Acquisition of patents


















(121,610
)Acquisition of equipment


(1,512
)


(11,467
)


605



(17,931
)


(58,662
)Acquisition of water vessels






(4,200
)






(14,425
)


(15,722
)Net cash (used by) investing activities


(1,512
)


(15,667
)


605



(32,456
)


(195,994
)Cash flows from financing activities:Common stock issued for cash


















564,768Proceeds from stockholders’ loans


47,617







61,819







78,908Bank advance






(25,000
)Proceeds (repayment) of note payable






(64,955
)Other contributed capital






(48,827
)






(29,228
)


65,641Net cash (used by) provided by financing activities


47,617



(138,782
)


61,819



(29,228
)


709,137Effect of exchange rates on cash


99



185



3,078



20,991



30,484Net increase (decrease) in cash


(495
)


(236,011
)


(35,325
)


(183,753
)


1,084Cash, beginning of the period


1,579



271,750



36,409



219,492



-Cash, end of the period

$
1,084


$
35,379


$
1,084


$
35,739


$
1,084Supplemental cash flow disclosure:Interest paid

$
476


$
-


$
678


$
-


$
1,217Taxes paid

$
-


$
-


$
-


$
-


$
-




F-3




PURIO INC.(A Development Stage Company)CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITYFor the Period from December 31, 2007 to September 30, 2009(Unaudited)AccumulatedAccumulated


Deficit


TotalCommon Stock


Additional


Other


during the


Shareholders'Number of


Par


Paid-In


Comprehensive


Development


EquityShares


Value


Capital


Income


Stage


(Deficit)Balances, December 31, 2007


55,000,000


$
55,000


$
962,593


$
4,984


$
(763,484
)

$
259,143Feb 13, 2008:  shares issued in share exchange agreement


27,734,063



27,734



(27,734
)Feb 13, 2008:  retirement of shares


(27,500,000
)


(27,500
)


27,500Merger adjustments










(28,994
)










(28,994
)Net loss for the year ended December 31, 2008














22,422



(354,876
)


(332,454
)Balances, December 31, 2008


55,234,063


$
55,234


$
933,365


$
27,406


$
(1,118,310
)

$
(102,305
)Other contributed capital










15,609











15,609Net loss for the nine months ended September 30, 2009














3,078



(119,488
)


(116,410
)55,234,063


$
55,234


$
948,974


$
30,484


$
(1,237,798
)

$
(203,106
)








F-4





PURIO INC.


(A DEVELOPMENT STAGE COMPANY)


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


AS OF SEPTEMBER 30, 2009


(Expressed in US Dollars)


(Unaudited)





NOTE 1SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION





The unaudited interim financial statements as of and for the nine months ended September 30, 2009 reflect all adjustments which, in the opinion of management, are necessary to fairly state the Company’s financial position and the results of its operations for the periods presented in accordance with the accounting principles generally accepted
in the United States of America.  All adjustments are of a normal recurring nature.





These unaudited interim financial statements should be read in conjunction with the Company’s financial statements and notes thereto included in the Company’s fiscal year end December 31, 2008 report. The Company assumes that the users of the interim financial information herein have read, or have access to, the audited financial statements
for the preceding period, and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. The results of operations for the nine months ended September 30, 2009 are not necessarily indicative of results for the entire year ending December 31, 2009.





(A)Organization





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





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





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





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





(B)Principles of Consolidation





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




F-5





(C)Use of Estimates





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





(D)Cash and Cash Equivalents





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





(E)Long-Lived Assets





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





(F)Income Taxes





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





(G)Loss Per Share





SFAS No. 128, “Earnings Per Share”, requires presentation of basic earnings per share and diluted earnings per share. Basic income (loss) per share (“Basic EPS”) is computed by dividing net loss available to common stockholders by the weighted average number of common shares
outstanding during the period. Diluted earnings per share (“Diluted EPS”) is similarly calculated using the treasury stock. At September 30, 2009, there were no potentially dilutive securities.




F-6





The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations for the nine months ended September 30, 2009 and 2008:




2009


2008Numerator:Basic and diluted net loss per share:Net Loss

$
(116,411
)

$
(276,247
)Denominator:Basic and diluted weighted average number of shares outstanding


55,234,063



55,179,105Basic and Diluted Net Loss Per Share:

$
(0.002
)

$
(0.005
)





(H)Patent





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





(I)Foreign Currency Translation





In accordance with SFAS No. 52, “Foreign Currency Translation”, the Company has determined that its functional currency is the United States Dollar. The Company recorded a consolidated comprehensive gain of $3,078 in the nine months ended September 30, 2008 primarily from the translation
of transactions through a Canadian bank. Exchange differences are accumulated as a component of accumulated other comprehensive gain.





(J)Comprehensive Income (Loss)





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





(K)Fair Value of Financial Instruments





The carrying amounts on the Company’s financial instruments including accounts payable approximate fair value due to the relatively short period to maturity for this instrument.




F-7





NOTE 2ACQUISITION OF MINERAL PROPERTY





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





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





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





NOTE 3STOCKHOLDERS’ EQUITY





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





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





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





On December 7, 2007, the Company entered into a share exchange agreement with Purio Environmental Water Source, Inc. (“Purio Environmental”), a private Nevada corporation, and the shareholders of Purio Environmental. Pursuant to the terms of the share exchange agreement, the Company agreed to acquire all of the issued and outstanding shares
of Purio Environmental’s common stock in exchange for 27,500,000 shares of the Company.





On February 11, 2008, the share exchange agreement was amended. On February 13, 008, pursuant to the terms of the amendment, the Company acquired all of the issued and outstanding shares of Purio Environmental’s common stock in exchange for the Company’s issuance of 27,734,603 shares of common stock to the shareholders of Purio Environmental.
The transaction was accounted for as a purchase, with the Company being the acquirer for accounting purposes. By this means, Purio Environmental became a 100% owned subsidiary of the Company





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





At September 30, 2009, the Company was authorized to issue 375,000,000 shares, of which there are 55,234,063 shares issued and outstanding.





NOTE 4GOING CONCERN





As reflected in the accompanying financial statements, the Company is in the development stage with no operations, and from inception has a consolidated net loss of $1,236,944. The Company has negative consolidated working capital of $363,930 and a stockholders’ deficit of $203,106 as at September 30, 2009. There is substantial doubt about its
ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.





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





NOTE 5LITIGATION





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








F-8





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





Explanatory Note





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





Forward Looking Statements





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





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





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





Business Overview





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





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





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




3





Results of Operations





Our results of operations are presented below:





Three Months Ended September 30, 2009
($)


Three Months Ended September 30, 2008
($)


Nine Months Ended
September 30, 2009
($)


Nine Months Ended
September 30, 2008
($)


Period from
November 16, 1999
(Date of Inception) to
September 30, 2009
($)Revenue


-



-



-



-



5,113Selling Expenses


-



-



-



-



40,345General and Administrative  Expenses


58,437



175,465



118,716



297,238



1,201,712Net Loss


58,782



175,444



119,488



296,949



1,237,798





Results of Operations for the Three Months Ended September 30, 2009 and for the period from November 16, 1999 (Date of Inception) to September 30, 2009





For the three months ended September 30, 2009 we incurred a net loss of $58,782, compared to a net loss of $174,444 during the same period in fiscal 2008. Our net loss from our inception on November 16, 1999 to September 30, 2009 was $1,237,798. Our net loss per share for the three months ended September 30, 2009 was $0.001, compared to a net loss per
share of $0.003 during the same period in fiscal 2008.





Our total operating expenses for the three months ended September 30, 2009 were $58,437, compared to total operating expenses of $175,465 during the same period in fiscal 2008. Our total operating expenses from our inception on November 16, 1999 to September 30, 2009 were $1,201,712.





Our total operating expenses for the three months ended September 30, 2009 consisted entirely of general and administrative expenses, including $22,305 in professional fees, $11,595 in occupancy costs, $2,060 in depreciation, $10,866 in administration costs and $11,611 in other general and administrative expenses. We did not incur any other operating
expenses during this period.





Our total operating expenses for the three months ended September 30, 2008 consisted entirely of general and administrative expenses, including $17,864 in professional fees, $7,700 in occupancy costs, $1,185 in consulting fees, $2,266 in depreciation, $32,369 in administration costs and $114,081 in other general and administrative expenses. We did not
incur any other operating expenses during this period.





Our total operating expenses from our inception on November 16, 1999 to September 30, 2009 consisted of $40,345 in selling expenses, $390,525 in professional fees, $22,219 in exploration costs and advances, $46,192 in occupancy costs, $430,698 in consulting fees, $35,170 in depreciation, $3,600 in impairment of mineral rights, $4,987 in stock transfer
fees, $62,182 in administration costs and $206,139 in other general and administrative expenses.





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




4





The decrease in operating expenses for the three months ended September 30, 2009 was primarily due to a decrease in administration costs and other general and administrative expenses.





Results of Operations for the Nine Months Ended September 30, 2009





For the nine months ended September 30, 2009 we incurred a net loss of $119,488, compared to a net loss of $296,949 during the same period in fiscal 2008. Our net loss per share for the nine months ended September 30, 2009 was $0.002, compared to a net loss per share of $0.005 for the same period in fiscal 2008.





Our total operating expenses for the nine months ended September 30, 2009 were $118,716, compared to total operating expenses of $297,238 during the same period in fiscal 2008.





Our total operating expenses for the nine months ended September 30, 2009 consisted entirely of general and administrative expenses, including $44,004 in professional fees, $24,313 in occupancy costs, $6,180 in depreciation, $24,391 in administration costs and $19,828 in other general and administrative expenses. We did not incur any other operating
expenses during this period.





Our total operating expenses for the nine months ended September 30, 2008 consisted entirely of general and administrative expenses, including $71,254 in professional fees, $13,244 in occupancy costs, $41,293 in consulting fees, $3,273 in depreciation, $2,033 in stock transfer fees, $32,269 in administration costs and $133,772 in other general and administrative
expenses. We did not incur any other operating expenses during this period.





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





The decrease in operating expenses for the nine months ended September 30, 2009 was primarily due to a decrease in our professional fees, our consulting fees, our administration costs and our general and administrative expenses.





Liquidity and Capital Resources





As of September 30, 2009 we had cash of $1,084 in our bank accounts. As of September 30, 2009 we also had inventory of $15,035, property and equipment of $39,214 and patents of $121,610, for total assets of $176,943.





As of September 30, 2009 we had current assets of $16,119, current liabilities of $380,049 and a working capital deficit of $363,930. Our accumulated deficit from our inception on November 16, 1999 to September 30, 2009 was $1,237,798 and was funded primarily through equity financing and loans from stockholders.


For the three months ended September 30, 2009 we spent net cash of $46,699 on operating activities, compared to net cash spending of $81,747 on operating activities during the same period in fiscal 2008. The decrease in expenditures on operating activities for the three months ended September 30, 2009 was primarily due to a decrease in our net operating
loss.




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For the nine months ended September 30, 2009 we spent net cash of $100,827 on operating activities, compared to net cash spending of $143,160 on operating activities during the same period in fiscal 2008. The decrease in expenditures on operating activities for the nine months ended September 30, 2009 was primarily due to a decrease in our net operating
loss.





For the three months ended September 30, 2009 we spent net cash of $1,512 on investing activities, compared to net cash spending of $15,667 on investing activities during the same period in fiscal 2008. The decrease in expenditures on investing activities for the three months ended September 30, 2009 was primarily due to a decrease in our acquisition
of equipment.





For the nine months ended September 30, 2009 we received net cash of $605 from investing activities, compared to net cash spending of $32,356 on investing activities during the same period in fiscal 2008. The decrease in expenditures on investing activities for the nine months ended September 30, 2009 was primarily due to a decrease in our acquisition
of equipment and water vessels.





For the three months ended September 30, 2009 we received net cash of $47,617 from financing activities, compared to net cash spending of $138,782 on financing activities during the same period in fiscal 2008. The increase in receipts from financing activities for the three months ended September 30, 2009 was primarily due to an increase in proceeds
from stockholders’ loans, the extinguishing of a note payable and a decrease in the use of other contributed capital.

For the nine months ended September 30, 2009 we received net cash of $61,819 from financing activities, compared to net cash spending of $29,228 on financing activities during the same period in fiscal 2008. The increase in receipts from financing activities for the nine months ended September 30, 2009 was primarily due to an increase in proceeds from
stockholders’ loans and a decrease in the use of other contributed capital.

During the three months ended September 30, 2009 our monthly cash requirements to fund our operating activities was approximately $165 compared to approximately $78,670 during the same period in fiscal 2008. In the absence of continued stockholder loans, our cash of $1,084 as of September 30, 2009 is sufficient to cover our current monthly burn rate
for less than one month.





We estimate our planned expenses for the next 12 months (beginning November 2009) to be approximately $1,000,000, as summarized in the table below:





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

1,000,000





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





Based on our planned expenditures, we require additional funds of approximately $999,000 (a total of $1,000,000 less our approximately $1,084 in cash as of September 30, 2009) to proceed with our business plan over the next 12 months. If we are not able to obtain additional financing on a timely basis, we will be unable to conduct our operations as
planned, and we will not be able to meet our obligations as they become due. In such event, we will be forced to scale down or perhaps even cease our operations.




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Future Financings





We have generated limited revenues, have achieved losses since our inception, and rely upon the sale of our securities to fund our operations. We anticipate that we will incur substantial losses for the foreseeable future, and we are dependent upon obtaining outside financing to carry out our operations. Our financial statements for the three months
ended September 30, 2009 have been prepared on a going concern basis and do not include any adjustments that might result from the outcome of this uncertainty.





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





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





Off-Balance Sheet Arrangements





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





Critical Accounting Policies





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





Principles of Consolidation





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





Patent





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




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Inflation





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





Item 3.  Quantitative and Qualitative Disclosures About Market Risk





Not applicable.





Item 4.  Controls and Procedures





Disclosure Controls





We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) designed to provide reasonable assurance the information required to be reported in our Exchange Act filings is recorded, processed, summarized and reported within the time periods specified and pursuant to Securities and Exchange
Commission rules and forms, including controls and procedures designed to ensure that this information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.





As of the end of the period covered by this report, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures. Based upon this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure
controls and procedures were (1) designed to ensure that material information relating to our Company is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, in a timely manner, particularly during the period in which this report was being prepared, and (2) effective, in that they provide reasonable assurance that information we are required to disclose in the reports filed or submitted under the Exchange Act is recorded, processed, summarized
and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.





Changes in Internal Control





There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) during the three months ended September 30, 2009 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.





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PART II – OTHER INFORMATION





Item 1. Legal Proceedings





We are not aware of any legal proceedings to which we are a party or of which our property is the subject. None of our directors, officers, affiliates, any owner of record or beneficially of more than 5% of our voting securities, or any associate of any such director, officer, affiliate or security holder are (i) a party adverse to us in any legal proceedings,
or (ii) have a material interest adverse to us in any legal proceedings. We are not aware of any other legal proceedings that have been threatened against us.





Item 2. Unregistered Sales of Equity Securities





None.





Item 3.Defaults Upon Senior Securities





None.





Item 4.Submission of Matters to a Vote of Security Holders





None.





Item 5. Other Information




None.





Item 6. Exhibits





Exhibit
Number
Exhibit
Description31.1
Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1
Certification pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002





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SIGNATURES





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





Date: November 16, 2009
Purio Inc.By:
/s/ Daryl EnglishDaryl EnglishPresident, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Secretary, Treasurer and Director