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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 20-F

(Mark One)



oREGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

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

For the fiscal year ended June 30, 2015

OR

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



oSHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934



Date of Event requiring this shell company report _____________



For the transition period from ___________________ to ______________________



Commission file number: 000-51848



VANC Pharmaceuticals Inc.

(Exact name of Registrant as specified in its charter)



Not applicable

(Translation of Companys name into English)



Province of British Columbia, Canada

(Jurisdiction of incorporation or organization)



615  800 West Pender Street, Vancouver, BC, V6C 2V6 CANADA

Contact person: Eugene Beukman, Phone: 604-687-2038 Email ebeukman@pendergroup.ca

(Address of principal executive offices)



Securities registered or to be registered pursuant to Section 12(b) of the Act.



Title of each class

Name of each exchange on which registered

Not Applicable

Not Applicable

Securities registered or to be registered pursuant to Section 12(g) of the Act.



Common Shares Without Par Value - Toronto Venture Stock Exchange

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

None

(Title of Class)



Indicate the number of outstanding shares of each of the issuers classes of capital or common stock as of the close of the period covered by the annual report.  June 30, 2015    55,219,116



Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes  o     No x



If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934  Yes  o     No x



Indicate by check mark whether the Company (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 Company was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  x     No o



Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act (check one):  Large accelerated filer  o                   Accelerated filer o                 Non-Accelerated filerx



Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP     o                                                International Financial Reporting Standards as issued                                               Other o

by the International Accounting Standards Board              x



If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. Indicate by check mark which financial statement item the Company has elected to follow.  Item 17 x     Item 18 o



If this is an annual report, indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  o     No x



(APPLICABLE ONLY TO ISSUES INVOLVED IN BANKRUPTCY PROCEEDING DURING THE PAST FIVE YEARS)



Indicate by check mark whether the Company 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



The information set forth in this Annual Report on Form 20-F is as at June 30, 2015 unless an earlier or later date is indicated.



SEC 1852 (01-12) Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.



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FORM 20-F ANNUAL REPORT

TABLE OF CONTENTS







PART I

4

ITEM 1. IDENTITY OF DIRECTORS SENIOR MANAGEMENT AND ADVISERS

4

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

5

ITEM 3. KEY INFORMATION

5

ITEM 4. INFORMATION ON THE COMPANY

15

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

19

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

23

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

31

ITEM 8. FINANCIAL INFORMATION

32

ITEM 9. THE OFFER AND LISTING

33

ITEM 10. ADDITIONAL INFORMATION

35

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

43

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

43



PART II

44

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

44

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

44

ITEM 15. CONTROLS AND PROCEDURES

44

ITEM 16. RESERVED

44



PART III

46

ITEM 17. FINANCIAL STATEMENTS

46

ITEM 18. FINANCIAL STATEMENTS

46

ITEM 19. EXHIBITS

46

SIGNATURES

74













ii



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INTRODUCTION



The Company was incorporated by registration of its Memorandum and Articles under the BC Companies Act on May 30, 2000 under the name Duft Biotech Capital Ltd.

On November 13, 2003, the Company acquired the assets of ALDA Pharmaceuticals Inc. (API), a private company founded in 1996.

On November 26, 2003 the Company changed its name to ALDA Pharmaceuticals Corp. (the Company) The Company is still a British Columbia, Canada, company.

Effective August 19, 2005, the authorized share capital of the Company was increased to an unlimited number of common shares without par value. There are no Indentures or Agreements limiting the payment of dividends and there are no conversion rights, special liquidation rights, pre-emptive rights or subscription rights.



On July 24, 2013 the Company changed its name to NUVA Pharmaceuticals Inc. (the Company) The Company is still a British Columbia, Canada, company.



On July 28, 2014 the Company changed its name to VANC Pharmaceuticals Inc. (the Company) The Company is still a British Columbia, Canada, company.



BUSINESS OF VANC PHARMACEUTICALS INC.



The Company is now focused on the manufacture and distribution of generic and over-the-counter (OTC) pharmaceuticals.



FINANCIAL AND OTHER INFORMATION



The Companys reporting currency and domestic currency is Canadian Dollars. In this Annual Report, unless otherwise specified, all dollar amounts are expressed in Canadian Dollars (CDN$ or $). The Government of Canada permits a floating exchange rate to determine the value of the Canadian Dollar against the U.S. Dollar (US$). Comparisons of historic exchange rates between the US$ and the CDN$ are contained in Section 3.A.3.



OPERATING AND FINANCIAL REVIEW AND PROSPECTS

This Annual Report on Form 20-F contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, principally in ITEM #4, Information on the Company and ITEM #5, Operating and Financial Review of Prospects. These statements may be identified by the use of words like plan, expect, aim, believe, project, anticipate, intend, estimate, will, should, could and similar expressions in connection with any discussion, expectation, or projection of future operating or financial performance, events or trends. In particular, these include statements about the Companys strategy for growth, future performance or results of current sales and production, interest rates, foreign exchange rates, and the outcome of contingencies, such as acquisitions and/or legal proceedings and intellectual property issues.

Forward-looking statements are based on certain assumptions and expectations of future events that are subject to risks and uncertainties. Actual future results and trends may differ materially from historical results or those projected in any such forward-looking statements depending on a variety of factors, including, among other things, the factors discussed in this Annual Report under ITEM #3, Key Information, Risk Factors and factors described in documents that the Company may furnish from time to time to the Securities and Exchange Commission. The Company undertakes no obligation to update publicly or revise any forward-looking statements because of new information.

MEASUREMENT INFORMATION

Canada uses the metric measurement system and all of the measures used by the Company adhere to the standards of the metric system.





3



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PART I



ITEM 1. IDENTITY OF DIRECTORS SENIOR MANAGEMENT AND ADVISERS

1.A.1. Directors and senior management

Table No. 1 lists as of June 30, 2015 the names of the Directors of the Company.



Table No. 1

Directors



|                                                                           |     |                                
|-------------------------------------------------------------------------- | --- | -------------------------------
|Name and Residential Address                                               | Age | Date First Elected or Appointed
|Amandeep Parmar (1)
4848 Killarney St.
Vancouver BC, V5R3V5                | 28  | December 3, 2014               
|Eugene Beukman (1)
615  800 West Pender St.
Vancouver, BC V6C 2V6, Canada | 55  | November 14, 2012              
|Bob Rai
2257 128St. Surrey BC V4A 3V8, Canada                              | 45  | June 4, 2015                   
|Sina Pirooz(1)
2685 W. Broadway, Vancouver, BC V6K 2G2                     | 45  | October  25, 2013              

(1) Member of Audit Committee





1.A.2. Senior Management

Table No. 2 lists the names of the Senior Management of the Company. The Senior Management serves at the pleasure of the Board of Directors.



Table No. 2

Senior Management



|                          |     |                          
|------------------------- | --- | -------------------------
|Name and Position         | Age | Date of First Appointment
|Arun Nayyar, CEO          | 57  | November 12, 2013        
|Amandeep Parmar, CFO      | 28  | December 3, 2014         
|Eugene Beukman, Secretary | 55  | November 14, 2012        

.



Mr. Nayyars business functions, as CEO of the Company, included overall supervision of all officers and consultants, as well as management of research and development, strategic planning, business development, operations, liaison with auditors, accountants, lawyers, regulatory authorities, the financial community and shareholders and reporting to the Board of Directors.

Mr. Parmars business functions, as CFO, include financial statement preparation, accounting, liaising with auditors, accountants, lawyers and regulatory authorities and preparation, payment and organization of the expenses, taxes, and other financial activities of the Company and reporting to the Board of Directors

Mr. Beukmans business functions, as Corporate Secretary, include attending and being the secretary of all meetings of the Board, shareholders and committees of the Board and entering, or causing to be entered in records kept for that purpose, minutes of all proceedings thereat; gives or causes to be given, as and when instructed, all notices to shareholders, Directors, officers, auditors and members of committees of the Board; is the custodian of the stamp or mechanical device generally used for affixing the corporate seal of the Company and of all books, records and instruments belonging to the Company.



4



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1.B. Legal Advisors

The legal advisors for the Company are Harder & Company, 2760  200 Granville St., Vancouver, BC, V6C 1S4 Phone 604-682 - 4466 Fax 604 682 - 4467. As of October 2, 2007, the Company retained Stanislaw Ashbaugh LLP, 4400 - 701 Fifth Avenue, Seattle, WA 98104 to provide assistance with matters concerning securities laws in the United States. The firm does not provide other legal services to the Company.

The Companys Bank is the:  Bank of Montreal. Its business address and telephone number are 595 Burrard St. Vancouver, British Columbia Canada V7X 1L7. Tel: (604) 665-7374.

1.C. Auditors

Smythe LLP performed the year end audit in 2015.



ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE



No disclosure necessary.



ITEM 3. KEY INFORMATION

3.A.1. Selected Financial Data

The selected financial data should be read in conjunction with the financial statements and other financial information included elsewhere in the Annual Report.



The Company has not declared any dividends since incorporation and does not anticipate that it will do so in the foreseeable future. The present policy of the Company is to retain all available funds for use in its operations and the expansion of its business.



Table No. 3 is derived from the audited financial statements of the Company, which have been prepared in accordance with IFRS, as issued by the International Accounting Standards Board (IASB) and Interpretations of the International Financial Reporting Interpretations Committee (IFRIC). IFRS represents standards and interpretations approved by the International Accounting Standards Board (IASB), and are comprised of IFRS, International Accounting Standards (IASs), and interpretations issued by the International Financial Reporting Interpretations Committee (IFRICs) or the former Standing Interpretations Committee (SICs) and effective for the Companys reporting period ended June 30,

2015.



5



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Table No. 3

Selected Financial Data

(CDN$)





|                               |                 |                 |                 |                 |                
|------------------------------ | --------------- | --------------- | --------------- | --------------- | ---------------
|                               | Year
Ended
2015 | Year
Ended
2014 | Year
Ended
2013 | Year
Ended
2012 | Year
Ended
2011
|IFRS                           |                 |                 |                 |                 |                
|Revenue                        | 5,713           | 0               | 0               | 83,361          | 305,592        
|Net Income (Loss) for the Year | (2,200,648)     | (733,946)       | 283,432         | (306,565)       | (1,875,565)    
|Basic Income (Loss) Per Share  | (0.05)          | (0.03)          | 0.02            | (0.03)          | (0.03)         
|Dividends Per Share            | 0               | 0               | 0               | 0               | 0              
|Wtg. Avg. Shares (1)           | 47,272,866      | 26,107,760      | 18,821,177      | 6,451,760       | 6,231,468      
|Period-end Shares (1)          | 55,219,116      | 36,767,074      | 21,617,075      | 6,959,680       | 6,399,680      
|                               |                 |                 |                 |                 |                
|Working Capital                | 3,305,603       | 156,185         | 296,132         | (1,320,984)     | (1,068,383)    
|Sponsorship Liability          | 0               | 0               | 0               | 875,000         | 0              
|Long-Term Debt                 | 0               | 0               | 29,444          | 0               | 0              
|Capital Stock                  | 15,262,357      | 10,995,282      | 7,943,874       | 7,933,288       | 7,921,708      
|Shareholders Equity (Deficit) | 3,353,461       | 663,097         | (436,688)       | (1,321,164)     | (1,066,502)    
|Total Assets                   | 3,540,585       | 820,418         | 800,991         | 19,751          | 190,494        
|                               |                 |                 |                 |                 |                
|US GAAP                        |                 |                 |                 |                 |                
|Net Loss                       | (2,200,648)     | (733,946)       | 283,432         | (306,565)       | (1,875,565)    
|Income/(Loss) Per Share        | (0.05)          | (0.03)          | 0.02            | (0.03)          | (0.03)         
|Shareholders Equity (Deficit) | 3,353,461       | 663,097         | (436,688)       | (1,321,164)     | (1,066,502)    
|Total Assets                   | 3,540,585       | 820,418         | 800,991         | 19,751          | 190,494        





(1) At June 30, 2015 there were 55,219,116 shares issued and outstanding.



3.A.3. Exchange Rates



In this Annual Report, unless otherwise specified, all dollar amounts are expressed in Canadian Dollars (CDN$). The Government of Canada permits a floating exchange rate to determine the value of the Canadian Dollar against the U.S. Dollar (US$).

Table No. 4 sets forth the exchange rates for the Canadian Dollar at the end of four most recent fiscal years ended June 30, 2015, the average rates for the period and the range of high and low rates for the period. The data for each month during the most recent six months is also provided.

For purposes of this table, the rate of exchange means the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York.



The table sets forth the number of US Dollars required under that formula to buy one Canadian Dollar. For example, where the number 0.8704 is quoted in the upper left hand number in the table, it means that it took on average in December 2012, 98.95 cents US to purchase one Canadian dollar. For most periods presented, the Canadian dollar has been worth less than one US dollar.



6



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Table No. 4

U.S. Dollar/Canadian Dollar





|                                      |         |        |        |       
|------------------------------------- | ------- | ------ | ------ | ------
|Period                                | Average | Low    | High   | Close 
|April 2015                            | 0.8252  | 0.8241 | 0.8333 | 0.8289
|May 2015                              | 0.8022  | 0.7983 | 0.8046 | 0.8041
|June 2015                             | 0.8017  | 0.8002 | 0.8089 | 0.8006
|July 2015                             | 0.7665  | 0.7634 | 0.7728 | 0.7645
|August 2015                           | 0.7563  | 0.7504 | 0.7603 | 0.7601
|September 2015                        | 0.7466  | 0.7449 | 0.7496 | 0.7493
|                                      |         |        |        |       
|Three Months Ended September 30, 2015 | 0.7463  | 0.7449 | 0.7496 | 0.7491
|Three Months Ended June 30, 2015      | 0.8007  | 0.8002 | 0.8089 | 0.8006
|                                      |         |        |        |       
|Fiscal Year Ended June 30, 2015       | 0.8010  | 0.8002 | 0.8089 | 0.8006
|Fiscal Year Ended June 30, 2014       | 0.9328  | 0.8866 | 0.9803 | 0.9343
|Fiscal Year Ended June 30, 2013       | 0.9593  | 0.9694 | 0.9694 | 0.9694
|Fiscal Year Ended June 30, 2012       | 1.0019  | 1.0002 | 1.0221 | 1.0019
|                                      |         |        |        |       



(Source: http://www.bankofcanada.ca/rates/exchange/10-year-converter/)



3.B. Capitalization and Indebtedness



Table No. 5 sets forth the capitalization and indebtedness of the Company as of June 30, 2015.



Private Placements:





i)

On December 10, 2014, the Company closed a non-brokered private placement of 7,607,332 units at a price of $0.15 per unit for gross proceeds of $1,141,100. Each unit consists of one common share and one-half of one transferrable share purchase warrant. Each warrant entitles the holder thereof to purchase one additional common share on or before December 10, 2015 at a price of $0.25. Finders fees of $91,287 cash were paid in addition to the issuance of 608,586 warrants. The fair value of the warrants issued to agents was estimated using the Black-Scholes option pricing model and amounted to $67,553.



Securities are subject to a four month hold period that expired April 11, 2015. Proceeds from the offering will be used by the Company for commercialization of the generic and OTC products and for general ongoing    corporate and working capital purposes.



Additional share issue costs totaling $203,490 were incurred relating to options and warrants exercised for the year.



ii)

On April 08, 2014 the Company closed a non-brokered Private Placement of 1,750,000 units of the Company at a price of $0.10 per unit for gross proceeds of $175,000.



Each Unit consists of one (1) common share and one (1) transferrable share purchase warrant. Each Warrant will entitle the holder thereof to purchase one (1) additional Common Share for a period of twelve (12) months from the Closing Date of the Offering at a price of CDN$0.30 per Common Share.



The Warrants will be subject to an accelerated exercise provision in the event the shares trade more than $0.10 above the exercise price for ten (10) consecutive days.



In addition, on April 08, 2014 the Company closed a non-brokered Private Placement of 2,000,000 units of the Company at a price of $0.10 per unit for gross proceeds of $200,000.



7



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Each Unit consists of one (1) common share and one (1) transferrable share purchase warrant. Each warrant will entitle the holder thereof to purchase one (1) additional Common Share for a period of twenty four (24) months from the Closing Date of the Offering at a price of CDN$0.13 per Common Share.



In accordance with the Private Placements, Finders fees of $12,000 cash were paid in addition to the issuance of 300,000 agent warrants. 120,000 warrants have a life of two years and are exercisable at $0.13. The remaining 180,000 warrants have a life of one year and are exercisable at $0.30. The fair value of these warrants was measured at $47,567. Total share issue cost was $59,567.



Proceeds from the Offering will be used by the Company for general ongoing corporate and working capital purposes.







iii)

On June 12, 2013 the Company closed a non-brokered private placement of 8,000,000 units of the Companys common shares at a price of $0.10 per unit, for proceeds of $800,000. Each Unit will be exchangeable for one common share of the Company and one share purchase warrant.



Each warrant will entitle the holder to purchase one additional common share of the Company for a period of 36 months at a price of $0.30 per common share in the first year, $0.40 in the second year and $0.50 in the third year. The Units cannot be exchanged for shares and warrants during the first year unless the holder either simultaneously exercises or forgoes the warrants.



The warrants will be subject to an accelerated exercise provision in the event that the shares trade more than $0.10 above the exercise price for ten consecutive trading days.



The private placement was subject to a TSX-V hold period expiring on October 12, 2013. As of June 30, 2013, the private placement was classified as Share Subscriptions. Legal fees of $850 and finders fees of $57,600 were charged against share capital in connection with the private placement. The fair value of the warrants issued as part of the private placement is $663,834



Options:



The changes in share options including those granted to directors, offers and consultants during the years ended June 30, 2015 and 2014 are summarized as follows



|                  |               |               |           |         
|----------------- | ------------- | ------------- | --------- | --------
|                  | June 30, 2015 | June 30, 2014
|                  |               | Weighted      |           | Weighted
|                  |               | Average       |           | Average 
|                  | Number        | Exercise      | Number    | Exercise
|                  | of Shares     | Price         | of Shares | Price   
|Beginning Balance | 2,250,000     | $0.11         | -         | -       
|Options granted   | 4,255,000     | $0.31         | 3,200,000 | $0.11   
|Expired/Cancelled | -             |               | (950,000) | $0.10   
|Exercised         | (1,625,000)   | $0.16         | -         |         
|Ending Balance    | 4,880,000     | $0.27         | 2,250,000 | $0.11   
|Exercisable       | 3,097,500     | $0.19         | 1,650,000 | $0.10   





8



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The following table summarizes information about share options outstanding at June 30, 2015 and 2014:



|            |  |             |           |          
|----------- |  | ----------- | --------- | ---------
|            |  | Outstanding
|            |  | Exercise    | June 30,  | June 30, 
|Expiry date |  | Price       | 2015      | 2014     
|            |  |             |           |          
|19-Feb-17   |  | $0.20       | 450,000   | -        
|15-Apr-17   |  | $0.55       | 230,000   | -        
|05-Jun-17   |  | $0.55       | 300,000   | -        
|05-Sep-18   |  | $0.10       | -         | 450,000  
|21-Feb-19   |  | $0.10       | 1,000,000 | 1,000,000
|08-May-19   |  | $0.13       | 500,000   | 800,000  
|25-Jul-19   |  | $0.10       | 200,000   | -        
|14-Nov-19   |  | $0.15       | 150,000   | -        
|18-Dec-19   |  | $0.20       | 800,000   | -        
|08-Jan-20   |  | $0.20       | 150,000   | -        
|15-May-20   |  | $0.45       | 200,000   | -        
|05-Jun-20   |  | $0.45       | 400,000   | -        
|05-Jun-20   |  | $0.55       | 500,000   | -        
|Granted     |  |             | 4,880,000 | 2,250,000
|Exercisable |  |             | 3,097,500 | 1,650,000



The weighted average remaining contractual life of options outstanding and exercisable is 3.78 and 3.81  years, respectively.



Warrants:





The Company has issued warrants entitling the holders to acquire common shares of the Company. A summary of changes in warrants is presented below:



|                       |               |               |             |         
|---------------------- | ------------- | ------------- | ----------- | --------
|                       | June 30, 2015 | June 30, 2014
|                       |               | Weighted      |             | Weighted
|                       |               | Average       |             | Average 
|                       | Number        | Exercise      | Number      | Exercise
|                       | of Warrants   | Price         | of Warrants | Price   
|Beginning balance      | 11,800,000    | $0.33         | 8,000,000   | $0.30   
|Warrants granted       | 4,412,252     | $0.25         | 4,050,000   | $0.21   
|Expired/Cancelled      | -             |               | (250,000)   | $0.30   
|Exercised              | (9,219,710)   | $0.31         | -           |         
|Issued and exercisable | 6,992,542     | $0.31         | 11,800,000  | $0.33   



|                       |  |             |           |           
|---------------------- |  | ----------- | --------- | ----------
|                       |  | Outstanding
|                       |  | Exercise    | June 30,  | June 30,  
|Expiry date            |  | Price       | 2015      | 2014      
|                       |  |             |           |           
|April 8, 2015          |  | $0.30       | -         | 1,890,000 
|December 11, 2015      |  | $0.25       | 1,787,542 | -         
|April 8, 2016          |  | $0.13       | 1,300,000 | 2,160,000 
|June 12, 2016          |  | **$0.40     | 3,905,000 | 7,750,000 
|Issued and exercisable |  |             | 6,992,542 | 11,800,000



*These warrants are exercisable at a price of $0.30 per warrant until June 12, 2014, $0.40 until June 12, 2015 and $0.50 until June 12, 2016.



9



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Table No. 5

Capitalization and Indebtedness

As of June 30, 2015



|                                     |             
|------------------------------------ | ------------
|SHAREHOLDERS EQUITY                 |             
|Common shares issued and outstanding | 55,219,116  
|Share Capital                        | $15,262,357 
|Subscriptions Receivables            | 0           
|Reserve-Warrants                     | 69,058      
|Reserve  Options                    | 2,572,620   
|Deficit                              | (14,550,574)
|Net Shareholders Equity             | 3,353,461   
|TOTAL CAPITALIZATION                 |             
|Stock Options Outstanding:           | 4,880,000   
|Warrants Outstanding (1):            | 6,992,542   
|Capital Leases:                      | None        
|Guaranteed Debt                      | None        
|Secured Debt:                        | None        



(1)See Table 12 for exercise prices and terms of these warrants.





3.C. Reasons for the Offer and Use of Proceeds



General working capital, pay down liabilities and applications for registrations with Health Canada.



3.D. Risk Factors



Risks pertaining to the Company:



The Company's limited operating history makes it difficult to evaluate the Companys current business and forecast future results.

The Company was started as a Capital Pool Company, has been operating its current business since November, 2003 and has had limited revenues during this time. Since its inception, the Company has experienced significant operating losses each year. These losses are due to substantial expenditures on intellectual property protection, product development and product testing of commercial and consumer infection control products. The Company has also been engaged in a program of pre-clinical testing for registration of a number of therapeutic products with Health Canada and the FDA. This testing is costly and time consuming and the Company does not have sufficient funds to undertake all of the testing that is required to satisfy the requirements of these regulatory agencies. Accordingly, the Company requires outside funding to complete these tests. As funds are raised, they will be invested in the testing and the Company will continue to accumulate losses that are proportional to the funds raised and spent on testing. In addition, the Company launched a number of consumer and commercial products, described above, and established new sales and distribution agreements. Although sales of T36® Antiseptic Hand Sanitizer products were substantial during the last quarter of 2009, sales subsequently dropped to nearly zero for reasons discussed below in the commentary on the financial statements. As a result, future sales of the Companys products are virtually impossible to predict.



The Company has no significant source of operating cash flow and failure to generate revenues in the future could cause the Company to go out of business.

Based upon current plans to introduce its products into the Canadian market, the company should be able to generate sufficient cash flows to funds its growing operations.  At the time of reporting, the Company has sufficient cash to fund its operations and do not anticipate undertaking additional financings.









10



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If the Company raises further funds through equity issuances, the price of its securities could decrease due to the dilution caused by the sale of additional shares.

Additional funds raised by the Company through the issuance of equity or convertible debt securities will cause the Companys current shareholders to experience dilution and possibly lower the trading price of its shares. Such securities may grant rights, preferences or privileges senior to those of the Companys common shareholders. The Company is not profitable and will not be profitable for the foreseeable future under its current development plan. The Company plans to issue further equity to raise funds as necessary to continue operations and fund its program of research and development, patent protection and regulatory approvals. As a result, an indeterminate amount of dilution of the Companys capital stock will occur.



The Company has issued a limited number of shares out of its authorized capital of an unlimited number of common shares, which could be dilutive and negatively affect the share price.

Having an unlimited number of authorized but unissued common shares could allow the Companys Directors and Officers to issue a large number of shares without shareholder approval, leading to significant dilution of current shareholders and possible lowering of the share price.



The Company could enter into debt obligations and not have the funds to repay these obligations.

The Company does not have any contractual restrictions on its ability to incur debt and, accordingly, the Company could incur significant amounts of indebtedness to finance its operations. Any such indebtedness could contain covenants, which would restrict the Companys operations. The Company might not be able to repay indebtedness.



The Company could enter into contractual obligations and not have the funds to pay for these obligations.

The Company does not have any contractual restrictions on its ability to enter into binding agreements and, accordingly, the Company could incur significant obligations to third parties including financial obligations. Any such obligations could restrict the Companys operations and the Company might not be able to pay for its commitments. If the Company cannot meet its commitments, legal action could be taken against the Company. Any such actions could further restrict the Companys ability to conduct its business or could cause the Company to go out of business.



The Company has a history of generating limited revenues and the continuing failure to generate further revenues could cause the Company to cease operations.

The Company has no history of pre-tax profit and in the previous three years has had only limited annual revenues for each of the years it has been operating. The Company sustained operating losses for each of its fiscal years and has sustained significant accumulated operating losses. The continued operation of the Company will be dependent upon its ability to generate operating revenues and to procure additional financing. The Company may not be successful in generating revenues or raising capital in the future. Failure to generate revenues or raise capital could cause the Company to cease operations.



As the Company is a Canadian company, it may be difficult for U.S. shareholders of the Company to effect service on the Company or to realize on judgments obtained in the United States.

The Company is a Canadian corporation. A majority of its directors and officers are residents of Canada and a significant part of its assets are, or will be, located outside of the United States. As a result, it may be difficult for shareholders resident in the United States to effect service within the United States upon the Company, directors, officers or experts who are not residents of the United States, or to realize in the United States judgments of courts of the United States predicated upon civil liability of any of the Company, directors or officers under the United States federal securities laws. If a judgment is obtained in the U.S. courts based on civil liability provisions of the U.S. federal securities laws against the Company or its directors or officers, it will be difficult to enforce the judgment in the Canadian courts against the Company and any of the Companys non-U.S. resident executive officers or directors. Accordingly, United States shareholders may be forced to bring actions against the Company and its respective directors and officers under Canadian law and in Canadian courts in order to enforce any claims that they may have against the Company or its directors and officers. Nevertheless, it may be difficult for United States shareholders to bring an original action in the Canadian courts to enforce liabilities based on the U.S. federal securities laws against the Company and any of the Companys non-U.S. resident executive officers or directors.



11



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The Companys future performance is dependent on key personnel. The loss of the services of any of the Companys executives or Board of Directors could have a material adverse effect on the Company.

The Companys performance is substantially dependent on the performance and continued efforts of the Companys executives and its Board of Directors. Aman Parmar is the Chief Financial Office and a Director. Eugene Beukman and Bob Rai are independent Directors and members of the Audit Committee. The loss of the services of any of the Companys executives or Board of Directors could have a material adverse effect on the Companys business, results of operations and financial condition. There is no assurance that key personnel can be replaced with people with similar qualifications within a reasonable period of time. The Company currently does not carry any key person insurance on any of the executives or members of the board of directors. The only contracts in place with any of the employees, officers or directors of the Company are with the CEO Arun Nayyar and the CFO Aman Parmar.



The Company has not declared any dividends since its inception in 2000 and has no present intention of paying any cash dividends on its common shares in the foreseeable future.

The Company has not declared any dividends since its inception in 2000, and has no present intention of paying any cash dividends on its common shares in the foreseeable future. The payment by the Company of dividends, if any, in the future, rests in the discretion of the Company's Board of Directors and will depend, among other things, upon the Company's earnings, its capital requirements and financial condition, as well as other relevant factors.



The Companys future performance is dependent on key suppliers and manufacturers and a loss of any suppliers or manufacturers could have a material adverse effect on the Company by reducing or eliminating the ability of the Company to manufacture or sell its products.

The Company does not have agreements in place with any of its key suppliers for raw materials, other supplies or manufacturing. If any of the Companys suppliers or manufacturers were to go out of business or were unable to procure the raw materials or other supplies required by the Company to manufacture its products, the Company would have to find other suppliers or manufacturers. There is no guarantee that the Company would be able to find other suppliers or manufacturers. If the Company could not find other suppliers or manufacturers, production of the Companys products would be delayed for an indefinite period of time and such delays would lead to delayed revenues or reduced revenues or both.



If the Company is unable to manufacture its products, there is a risk that customers will be lost and that the Company will be unable to regain these customer.

The company has been able to secure manufacturing for its products and has secured long term partners to ensure sufficient inventory levels.



To meet its financial obligations, the Company may be required to divest itself of certain assets

At the date of reporting the Company does not anticipate any issues in meeting its financial obligations.



There is no assurance that the patent applications filed for theT36®technology or for other products will be approved, and failure to obtain such approvals could leave the Company with no further protection for its intellectual property and reduced sales.

The Company has obtained patent approval for its T36 product which it has rebranded under the label VANC Cortivera.  The Company has written off its Ferro-heme and Pediasafe products as management is no longer pursuing these products.



There is no assurance that the Company will be able to secure the funds needed for future development, and failure to secure such funds could lead to a lack of opportunities for growth.

Many of the Companys products require very costly laboratory testing to establish toxicity, efficacy and analytical methods and clinical trials to establish effectiveness and safety on human subjects. This testing is required in order to obtain required regulatory approvals from Health Canada, the EPA and FDA in the US and the EMA in the EU. A lack of funds would impair the ability of the Company to complete such tests. A lack of funds would also impair the Companys ability to establish marketing and sales plans once the products have been approved for sale. If adequate financing is not available when required, the Company may be required to delay, scale back or eliminate various activities and may be unable to continue in operation. The Company may seek such additional financing through debt or equity offerings, but there can be no assurance that such financing will be available on terms acceptable to the Company or at all. Any equity offering will result in dilution to the ownership interests of the Companys shareholders and may result in dilution to the value of such interests.



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There is no assurance that research and development being conducted by the Company to create new products will be successful.

The Company is conducting research and development on new products, but the outcomes of research and development are never certain. For example, there is no assurance that any new products will be developed or that any new products that do result will have a competitive advantage or market acceptance, will not be superseded by the new products of competitors, will not infringe on the patents of other companies or that other companies will not develop products that infringe on patents obtained by the Company for its new products. The Company has completed the formulations for new products but still needs to conduct the toxicity and efficacy tests and establish the analytical methods required to obtain regulatory approvals from Health Canada, the EPA and FDA in the US and the EMA in the EU.



The Company and the Companys products have limited brand awareness which limits the ability of the Company to gain credibility from prospective customers and to sell its products into new markets.

Market knowledge of the Companys name is limited. The Company will need to devote considerable resources to educate new markets about the products the Company offers. In establishing new markets, the Company will be competing with companies that are potentially already entrenched in such markets or may be better funded than the Company. The ability of the Company to raise brand awareness will depend on its ability to raise the money required to undertake such an intensive marketing effort. As noted elsewhere, there is no assurance that the Company can raise funds required for such an investment in marketing.



The Company has limited sales and marketing experience and can provide no assurance that the Company can keep its current customers or gain new ones.

The Company has limited experience in marketing and selling its products and the Company has no sales or marketing staff. The Company will have to expend substantial funds to promote and develop its products. The Companys success in this regard will depend on the quality of its products and its ability to develop and implement an effective sales and marketing strategy. Failure to achieve the marketing objectives will have a material adverse effect on the Company and on its results of operations and financial condition.



Conflicts of interest may exist for Directors and Officers which may inhibit their ability to act in the best interests of the Company and its shareholders leading to possible impairment of the Companys ability to achieve its business objectives.

The directors and officers of the Company will not be devoting all of their time to the affairs of the Company. The directors and officers of the Company are directors and officers of other companies. The directors and officers of the Company will be required by law to act in the best interests of the Company. They will have the same obligations to the other companies in respect of which they act as directors and officers. Discharge by the directors and officers of their obligations to the Company may result in a breach of their obligations to the other companies and, in certain circumstances, this could expose the Company to liability to those companies. Similarly, discharge by the directors and officers of their obligations to the other companies could result in a breach of their obligation to act in the best interests of the Company. Such conflicting legal obligations may expose the Company to liability to others and impair its ability to achieve its business objectives. Aman Parmar is not a Director or Officer of any companies that compete with or provide services that are similar to those of the Company.



Management of the Company can, through their stock ownership in the Company, influence all matters requiring approval by the Companys shareholders.

Management of the Company at the time of this report, collectively own approximately 5% of the Company's issued and outstanding common shares at that date. These shareholders, if acting together, could significantly influence all matters requiring approval by the Company's shareholders, including the election of directors and the approval of mergers or other business combination transactions. Management may not make decisions that will maximize shareholder value and may make decisions that will contribute to or cause the entrenchment of management.



The value and transferability of the Company shares may be adversely impacted by the limited trading market for the Companys common shares.

No assurance can be given that a market for the Companys common shares will be quoted on an exchange in the U.S. or on the NASD's Over the Counter Bulletin Board. The Companys common shares may be subject to illiquidity and investors may not be able to sell their shares in a timely manner.



13



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The value and transferability of the Company shares may be adversely impacted by the penny stock rules.

The sale or transfer of the Company common shares by shareholders in the United States may be subject to the so-called "penny stock rules." Under Rule 15g-9 of the Exchange Act, a broker or dealer may not sell a "penny stock" (as defined in Rule 3a51-1) or effect the purchase of a penny stock by any person unless:



(a)

Such sale or purchase is exempt from Rule 15g-9;



(b)

Prior to the transaction the broker or dealer has (1) approved the person's account for transaction in penny stocks in accordance with Rule 15g-9, and (2) received from the person a written agreement to the transaction setting forth the identity and quantity of the penny stock to be purchased; and



(c)

The purchaser has been provided an appropriate disclosure statement as to penny stock investment.



The SEC adopted regulations generally define a penny stock to be any equity security other than a security excluded from such definition by Rule 3a51-1. Such exemptions include, but are not limited to (1) an equity security issued by an issuer that has (i) net tangible assets of at least $2,000,000, if such issuer has been in continuous operations for at least three years, (ii) net tangible assets of at least $5,000,000, if such issuer has been in continuous operation for less than three years, or (iii) average revenue of at least $6,000,000 for the preceding three years; (2) except for purposes of Section 7(b) of the Exchange Act and Rule 419, any security that has a price of $5.00 or more; and (3) a security that is authorized or approved for authorization upon notice of issuance for quotation on the NASDAQ Stock Market, Inc.'s Automated Quotation System. It is likely that the Companys common shares, assuming a market were to develop in the US, will be subject to the regulations on penny stocks. Consequently, the market liquidity for the common shares may be adversely affected by such regulations limiting the ability of broker/dealers to sell the Companys common shares and the ability of shareholders to sell their securities in the secondary market in the US Moreover, the Company shares may only be sold or transferred by the Company shareholders in those jurisdictions in the US in which an exemption for such "secondary trading" exists or in which the shares may have been registered.



There is no guarantee that there is a market for the Companys common shares in the United States.

Although the Companys common shares were added to the OTC Bulletin Board System on April 20, 2009 under the symbol APCSF, trading of the companys shares is very limited. The Company cannot guarantee that there will be a market for the Companys common shares in the United States or that there will any significant amount trading in the companys shares for the foreseeable future The Company cannot guarantee that it will continue to maintain a listing in the United States or that it will not be found in default of existing regulations or new regulations and be suspended from trading or delisted.



Risks Pertaining to the Industry



Registration of products may not occur in a timely manner which could lead to delays in product introductions, reduced revenue expectations and extra costs to conduct further tests to satisfy regulatory agencies.

Government agencies, such as the EPA and the Food and Drug Administration (FDA) in the United States and Health Products and Food Branch in Canada, need to provide approvals of the Companys products prior to any sales of these products. To obtain such approvals, the Company must submit extensive amounts of information on the efficacy, toxicology, carcinogenicity, mutagenecity and other testing of the products that it is trying to register. After all of the information is provided, the agencies can request supplemental information and further testing. Once all of the requirements for documentation are satisfied, the agencies can take an indeterminate amount of time to provide approvals for the Company to market its products. Significant delays could lead to slower revenue growth than anticipated. In addition, regulatory delays can allow time for competitors to devise strategies to prevent or reduce market penetration. There is no assurance that government agencies will accept for registration any of the Companys products.



The Company is very dependent on the registration and sale of its commercial, retail and therapeutic products.

If the Company is not successful in achieving regulatory approval of its products, its ability to generate revenues will be impaired. Even if registrations are successful, there is no guarantee that the Company will be able to maintain the registrations or be able to pass inspections by the regulatory authorities that permit the sale of the Companys products. In the event of a failed inspection, it is possible that the Company may be ordered to stop the sale of its products or undertake a recall of products that the regulatory authorities deem to be non-compliant with existing regulations. If the Company is ordered to recall or stop the sale of any of its products, the ability of the Company to generate revenues will be impaired. If such a recall or suspension of sales occurs, there is no guarantee that the Company will, at any future date, be able to resume the sale of the suspended or recalled products.





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There is a risk that the Companys intellectual property infringes upon the rights of other companies, which could lead to reduced revenues, reduced margins due to sanctions against the Company, outright withdrawal or prohibition of products or trademarks from the market and significant costs for legal defense against infringement claims, re-branding of products and revised marketing materials.

The Company is unaware of any infringement claims being made against the Company or its products or processes at the time of writing. In the future, there can be no assurances that third parties will not assert infringement claims in the future or require the Company to obtain a license for the intellectual property rights of such third parties. There can be no assurance that such a license, if required, will be available on reasonable terms or at all. If the Company does not obtain such a license, it could encounter delays in the introduction of products or could find that the development, manufacture or sale of products requiring such a license could be prohibited.



There is a risk that earlier inventionsmay exist that invalidate the Companys patent applications so that the Company may not be able to sell any infringing products.

Since patent applications are maintained in secrecy for a period of time after filing, and since publication of discoveries in the scientific or patent literature often lags behind actual discoveries, the Company cannot be certain that it was the first creator of inventions covered by pending patent applications, or that it was the first to file patent applications for such inventions. The Company might have to participate in interference proceedings in U.S., Canadian or patent offices in other jurisdictions to determine priority of invention, at substantial cost, particularly if such actions are required overseas. There can be no assurance that the Companys patents, if issued, would be held valid or enforceable by a court. The Company has patents issued in the United States, China and Australia and patent applications filed in the European Union and Canada. These patent applications seek intellectual property protection for the basic formulation of the T36®formulation, the method for making it and certain therapeutic uses of the formulation.



There may be limited ability to defend the patents if and when they are issued, leading to loss of sales that might otherwise be realized if the Company was in a position to defend its patents.

Litigation among pharmaceutical companies can be intense and costly. The Company might not have the financial ability to defend its patents, if issued, against larger industry players. Litigation may be necessary to enforce patents issued or assigned to the Company, or to determine the scope and validity of a third party's proprietary rights. Additionally, there can be no assurances that the Company would prevail in any such action. An adverse outcome in litigation or as part of an interference or other proceeding in a court or patent office could subject the Company to significant liabilities, require disputed rights to be licensed from other parties or require the Company to cease using certain technology or products, any of which could have a material adverse effect on the Companys business.



ITEM 4. INFORMATION ON THE COMPANY



4.A.  History and Development of the Company



Capital Pool Company



The Company was incorporated by registration of its Memorandum and Articles under the BC Companies Act on May 30, 2000 under the name Duft Biotech Capital Ltd. and was classified as a Capital Pool Company (CPC) on the TSX Venture Exchange. Under the policies of the TSX Venture Exchange, the principal business of a CPC is to identify and evaluate opportunities for acquisition. The completion of such an acquisition is referred to as a Qualifying Transaction. A CPC does not carry on any business other than the identification and evaluation of assets or businesses in connection with potential Qualifying Transactions, does not have business operations or assets other than seed capital and has no written or oral agreements for the acquisition of an asset or business at the time of formation.



A Qualifying Transaction, pursuant to the policies of the TSX Venture Exchange, is a transaction whereby a capital pool company:

(a)

Issues or proposes to issue, in consideration for the acquisition of significant assets or businesses, common shares or securities convertible, exchangeable or exercisable into common shares, which, if fully converted, exchanged or exercised would represent more than 25 percent of its common shares issued and outstanding immediately prior to the issuance;

(b)

Enters into an arrangement, amalgamation, merger or reorganization with another issuer with significant assets, whereby the ratio of securities which are distributed to the security holders of the capital pool company and the other issuer results in the security holders of the other issuer acquiring control of the resulting entity; or

(c)

Otherwise acquires significant assets other than cash.







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Financings



The Company has financed its operations since inception through funds raised in a series of private placements of common shares:



|            |                                                                       |                  |           
|----------- | --------------------------------------------------------------------- | ---------------- | ----------
|Fiscal Year | Nature of Share Issuance                                              | Number of Shares | Amount ($)
|Fiscal 2001 | Private Placement @ $0.085                                            | 1,176,475        | $100,000  
|            |                                                                       |                  |           
|Fiscal 2002 | Canadian Prospectus Offering (IPO) @$0.17                             | 1,200,000        | $204,000  
|Fiscal 2003 | Brokers Warrant Shares on Canadian Prospectus Offering (IPO) @ $0.17 | 150,000          | $25,500   
|            |                                                                       |                  |           
|Fiscal 2004 | Private Placement @ $0.15                                             | 346,666          | $52,000   
|            | Private Placement @ $0.20                                             | 6,200,000        | $1,240,000
|            |                                                                       |                  |           
|Fiscal 2005 | Private Placement @ $0.10                                             | 3,000,000        | $300,000  
|            |                                                                       |                  |           
|Fiscal 2006 | Private Placement @$0.05                                              | 3,916,000        | $195,800  
|            |                                                                       |                  |           
|            | Private placement @ $0.05                                             | 1,100,000        | $55,000   
|            |                                                                       |                  |           
|Fiscal 2007 | Private placement @ $0.05                                             | 1,430,000        | $ 71,500  
|            | Private placement @ $0.10                                             | 8,000,000        | $800,000  
|            |                                                                       |                  |           
|Fiscal 2008 | Private placement @ $0.12                                             | 2,000,000        | $240,000  
|            | Private placement @ $0.15                                             | 3,500,000        | $525,000  
|            |                                                                       |                  |           
|Fiscal 2009 | N/A                                                                   | N/A              | N/A       
|            |                                                                       |                  |           
|Fiscal 2010 | Private placement @ $0.25                                             | 6,000,000        | $1,500,000
|            |                                                                       |                  |           
|Fiscal 2011 | Private placement @ $0.10                                             | 3,275,000        | $327,500  
|            | Private placement @ $0.10                                             | 2,000,000        | $200,000  
|            |                                                                       |                  |           
|Fiscal 2012 | Private placement @ $0.10                                             | 560,000          | $56,000   
|            |                                                                       |                  |           
|Fiscal 2013 | Private placement @ $0.10                                             | 8,000,000        | $800,000  
|            |                                                                       |                  |           
|Fiscal 2014 | Private placement @ $0.10                                             | 3,750,000        | $375,000  
|Fiscal 2015 | Private placement @ $0.15                                             | 7,607,332        | $1,141,100
|            |                                                                       |                  |           



4.B. Business Overview



On August 12, 2013, Vanc Pharmaceuticals Inc. trades on the TSX Venture Exchange in Canada under the symbol NPH and on February 23, 2014 on the OTCQB under the symbol NUVPF.



In 2003, VANC developed a patented infection control formulation, referred to as T36®, a mixture of ethanol containing the anti-microbial ingredients o-phenyl phenol (OPP), benzalkonium chloride (BZK), chlorhexidine gluconate (CHG) and Nonoxynol-9 (N-9). All of these component chemicals are bio-degradable.



The Company is continuing to maintain patents for the T3/6 product in Canada and China.



The Company is now focused on the manufacturing and distribution of generic and over-the-counter (OTC) pharmaceuticals.



On April 16, 2014  the Company announced that it has signed Cross Referencing Agreements (CRA) for prescription generic products for Canadian markets. These agreements cover 48 prescription generic products and are for acute and chronic diseases.



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Sales



Sales during the year ended June 30, 2015 were $5,713 (June 30, 2014 - $nil).



Manufacturing



On April 16, 2014 the Company announced that it had signed CRAs with three large pharmaceutical companies for multiple products in the prescription generic drug lines. The suppliers will manufacture and VANC will market and sell these new product lines under its own label.



As at June 30, 2015, management has decided to discontinue efforts related to the Pedia-Safe Polyvitamin Drops and FerroHeme Iron supplements for the foreseeable future, as there have been significant changes in the competitive landscape for these products in Canada. The Company is continuing to focus on the manufacture and distribution of generic and OTC pharmaceuticals. Accordingly, the Company fully impaired the carrying value of intangible assets to $nil.





Patents



The Company has abandoned T3/6 patent renewals in Europe, the USA and Australia. It is maintaining the Chinese patent and the Canadian patent, which was assigned in a debt settlement agreement with a former Director.



China



On February 6, 2008, the Company announced that Certificate of Invention Patent Number ZL02829642.7 had been issued by the State Intellectual Property Office of the Peoples Republic of China. The patent provides protection for the composition and production methods for T36® formulation until August 20, 2022. On November 25, 2010 the Company was advised that the above patent became vulnerable to an application for a compulsory license on October 17, 2010. Under Chinese patent practice, it is possible for a third party to apply for the grant of a compulsory license should the invention not have been worked or otherwise been impeded from being worked, three years from the grant of a Patent. This may take into account circumstances where the conditions attached to the licensing of the invention are unreasonable, or the demand for the invention is not reasonably being met. The government body responsible for considering applications for a compulsory license will consider a multitude of factors before granting such a license and there may be mechanisms available for patentees to respond, or comment, on such applications.



Amendments to the original patent application were also drafted by the Company. As in the case of the amendments prepared for CIPO, the proposed amendments to the original Chinese patent application expanded the original claims to include a number of therapeutic applications of the T36® formulation, including its use in cosmetics and in a microbicidal gel to prevent the transmission of sexually transmitted infections (STIs). On October 10, 2007, the Company was advised that the amended claims had been submitted to the Chinese Patent Office. On January 30, 2008 the Chinese Patent office assigned Chinese Divisional Patent Application No. 200710142798.3 to the new application which was published in the Chinese Patent Gazette, under Publication No. CN101112624A. On April 13, 2010, the Company received an Office Action from the Chinese Patent Office and a response was filed by the Company prior to the deadline of June 11, 2010. A second Office Action was received on September 23, 2010 and a response was filed prior to the deadline of October 16, 2010. A third Office Action was received by the Company on February 1, 2011. The Company chose not to respond to this Office Action.



Canada

On April 6, 2011, the Company announced in a news release that the Canadian patent had been allowed. The Company allowed the patent to become temporarily abandoned and had it reinstated on October 3, 2012. The company settled debts with a former Officer and Director with the transfer of the T3/6 patent for Canada. Part of the agreement was that the Company would maintain the patent renewals.



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Trademarks



T36®

The Company successfully trademarked T36® and the design of the T36® logo in Canada on April 22, 2004 (Registration No. TMA608308) for pharmaceuticals, namely a disinfectant agent.



Hema-fer

In 2015 the Company made application to have the above-mentioned trade-mark registered.



Products Registered in Canada

The following table summarizes the NPNs that have been received from Health Canada.



NPNs - Products to be marketed by the Company.



|         |           |         
|-------- | --------- | --------
|80061817 | May 26/15 | Hema-fer



Risk Factors



Limited Operating History



There is no assurance that Vanc will earn profits in the future, or that profitability, if achieved, will be sustained. Operating in the pharmaceutical and biotechnology industry and the pharmaceutical contract manufacturing industry requires financial resources, and there is no assurance that future revenues will be sufficient to generate the funds required to continue Vanc business development and marketing activities. If Vanc does not have sufficient capital to fund its operations, we may be required to reduce our sales and marketing efforts or forego certain business opportunities.



Development of Technological Capabilities



The market for Vancs products is characterized by changing technology and continuing process development. The future success of Vancs business will depend in large part upon our ability to maintain and enhance the Companys technological capabilities, develop and market products and services which meet changing customer needs and successfully anticipate or respond to technological changes on a cost effective and timely basis. Although we believe that Vancs operations provide the products and services currently required by our customers, there can be no assurance that Vancs process development efforts will be successful or that the emergence of new technologies, industry standards or customer requirements will not render Vancs products or services uncompetitive. If Vanc needs new technologies and equipment to remain competitive, the development, acquisition and implementation of those technologies and equipment may require us to make significant capital investments. Vanc may not be able to raise the required capital on terms satisfactory to Vanc or at all.



4.C. Organization structure



The Company is not part of a group and has the following wholly owned subsidiaries, VANC Marine Pharmaceuticals Inc. and Vise Healthcare Inc., the Companies are incorporated in British Columbia. They are currently inactive.



4.D. Property, Plant and Equipment



The Company has no facilities.



The Company uses outside manufacturers for its production needs.



Item 4A Unresolved Staff Comments



No disclosure necessary.



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ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS



This discussion should be read in conjunction with the audited consolidated financial statements of the Company and related notes included therein.



5. A. Operating Results of the Company



Overview



During the 2015 fiscal year, the Company was able to commence commercialization of its generic portfolio.  The Company will continue to grow its generic portfolio as well as commence commercialization of its Over-the-counter products.



1.4

RESULTS OF OPERATIONS



Sales



The Company recorded sales of $5,713 in 2015 compared to $nil in 2014.



Cost of Goods Sold

For the year ended June 30, 2015 was $2,491 and $nil for 2014.



Gross Profit

For the year ended June 30, 2015 was $3,222 and $nil for 2014.



Consulting & Management

Consulting and management fees for the year ended June 30, 2015 were $362,727 compared to $254,337 for the year ended June 30, 2014.  The increase is due to an increase in Executive compensation as well as the addition of a full time CFO.



Filing and Transfer Agent Fees

Fees amounted to $53,714 for the year ended June 30, 2015 compared to $39,567 for the same period ended June 30, 2014.   This was due to significant increase in public news releases and capital transactions which resulted in filing fees with the TSX Exchange.



Legal and Audit Fees

Legal and accounting fees were $37,806 for the year ended June 30, 2015 compared to $48,862 for the year ended June 30, 2014.  This decrease was due to legal fees which were charged in 2014 for due diligence on products the Company was in-licensing.



Product Registration and Development Costs

Total costs incurred in this category for the year ended June 30, 2015 were $56,143 compared to $5,156 for the year ended June 30, 2014. Costs incurred in this category consist primarily of fees paid to maintain the Companys trademarks as well as the costs incurred to file products with Health Canada.



Share Based Payments

Stock based Compensation expenses were $915,211 for the year ended June 30, 2015, compared to $291,355 for the year ended June 30, 2014. This increase was expected due to the significant amount of share based transaction in the third quarter of 2015.



Comprehensive (Gain)/Loss from Operations

The Comprehensive (loss) from operations was $(2,200,648) for the year ended June 30, 2015 compared to a loss of $(733,946) during the same period ended June 30, 2014.  This significant increase was due to non-cash transactions.











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5. B. Liquidity and capital resources



Liquidity



As at June 30, 2015, the Company had working capital of $3,305,603 ($156,185  June 30, 2014).



|                    |               |              
|------------------- | ------------- | -------------
|                    | June 30, 2015 | June 30, 2014
|                    | $             | $            
|Current Assets      | 3,492,727     | 313,506      
|Current Liabilities | (187,124)     | (157,321)    
|Working Capital     | 3,305,603     | 156,185      



Management has raised sufficient cash from warrant and option exercises in the third and fourth quarter to fund the current business operations.  Management does not anticipate any additional financings or capital requirements to fund the current operations.



Capital resources



During the year ended June 30, 2015 and 2014, the following were changes in share options



|                  |               |               |           |         
|----------------- | ------------- | ------------- | --------- | --------
|                  | June 30, 2015 | June 30, 2014
|                  |               | Weighted      |           | Weighted
|                  |               | Average       |           | Average 
|                  | Number        | Exercise      | Number    | Exercise
|                  | of Shares     | Price         | of Shares | Price   
|Beginning Balance | 2,250,000     | $0.11         | -         | -       
|Options granted   | 4,255,000     | $0.31         | 3,200,000 | $0.11   
|Expired/Cancelled | -             |               | (950,000) | $0.10   
|Exercised         | (1,625,000)   | $0.16         | -         |         
|Ending Balance    | 4,880,000     | $0.27         | 2,250,000 | $0.11   
|Exercisable       | 3,097,500     | $0.19         | 1,650,000 | $0.10   



The following table summarizes information about share options outstanding at June 30, 2015 and 2014:



|            |  |             |           |          
|----------- |  | ----------- | --------- | ---------
|            |  | Outstanding
|            |  | Exercise    | June 30,  | June 30, 
|Expiry date |  | Price       | 2015      | 2014     
|            |  |             |           |          
|19-Feb-17   |  | $0.20       | 450,000   | -        
|15-Apr-17   |  | $0.55       | 230,000   | -        
|05-Jun-17   |  | $0.55       | 300,000   | -        
|05-Sep-18   |  | $0.10       | -         | 450,000  
|21-Feb-19   |  | $0.10       | 1,000,000 | 1,000,000
|08-May-19   |  | $0.13       | 500,000   | 800,000  
|25-Jul-19   |  | $0.10       | 200,000   | -        
|15-Sep-19   |  | $0.10       | -         | -        
|14-Nov-19   |  | $0.15       | 150,000   | -        
|18-Dec-19   |  | $0.20       | 800,000   | -        
|08-Jan-20   |  | $0.20       | 150,000   | -        
|15-May-20   |  | $0.45       | 200,000   | -        
|05-Jun-20   |  | $0.45       | 400,000   | -        
|05-Jun-20   |  | $0.55       | 500,000   | -        
|Granted     |  |             | 4,880,000 | 2,250,000
|Exercisable |  |             | 3,097,500 | 1,650,000







At the time of this report, the Company has sufficient working capital to pursue its current business plan.



Critical Accounting Policies



The consolidated financial statements of the Company comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and interpretations of the International Financial Reporting Interpretations Committee (IFRIC).



The preparation of the consolidated financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the amounts reported of assets and liabilities, the disclosure of contingent assets and liabilities at the date of consolidated financial statements and the amounts of revenues and expenses for the reporting period. The areas of estimation are the stock-based compensation, estimated useful lives of depreciable assets, and intellectual property. The Company believes that the estimates and assumptions upon which it relies are reasonable and are based on information available to the Company at the time that estimates and assumptions are made. Actual results could differ from those estimates.



Changes in Significant Accounting Policies



The Company has applied the following standards in these consolidated financial statements, which were effective for the Company beginning July 1, 2014:



Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32)



Amends IAS 32 Financial Instrument: Presentationto clarify certain aspects because of diversity in application of the requirements on offsetting, focused on four main areas:



·

The meaning of currently has a legally enforceable right of set-off

·

The application of simultaneous realization and settlement

·

The offsetting of collateral amounts

·

The unit of account for applying the offsetting requirements



Recoverable Amount Disclosures for Non-Financial Assets (Amendments to IAS 36)



Amends IAS 36 Impairment of Assets to reduce the circumstances in which the recoverable amount of assets or cash-generating units is required to be disclosed, clarify the disclosures required, and to introduce an explicit requirement to disclose the discount rate used in determining impairment (or reversals) where recoverable amount (based on fair value less costs of disposal) is determined using a present value technique. The application of this standard did not have a significant impact on the Companys consolidated financial statements.



Change in accounting policy



During the year ended June 30, 2015, the Company changed its accounting policy over the allocation of fair value of the proceeds of units in accordance with IAS 32 Financial Instruments: Presentation. The Company uses the residual method and now, under this method, proceeds are allocated first to share capital based on the fair value of the common shares at the time the units are priced and any residual value is allocated to the warrants reserve. Previously, the Company had first measured the fair value of the warrants using the Black-Scholes option pricing model with the difference between the fair value of the warrants and the proceeds received being allocated to the common shares.



This change has been applied retrospectively. An adjustment to remove any previously recorded fair value allocated to warrants has been recorded as a reduction to the warrant reserve and recorded as additional share capital on the consolidated statements of financial position (Note 19).



Future accounting policy change issued, but not yet effective

IFRS 9 Financial Instruments



21



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IFRS 9 was issued by the IASB in October 2010. It incorporates revised requirements for the classification and measurement of financial liabilities and carrying over the existing derecognition requirements from IAS 39 Financial Instruments: Recognition and measurement.The revised financial liability provisions maintain the existing amortized cost measurement basis for more liabilities. New requirements apply where an entity chooses to measure a liability at fair value through profit or loss; in these cases, the portion of the change in fair value related to changes in the entitys own credit risk is presented in other comprehensive income rather than within profit or loss. IFRS 9 is effective for annual periods beginning on or after July 1, 2018. The impact of IFRS 9 on the Companys consolidated financial statements has not yet been determined.



5.C. Research and development, patents and licenses etc.



The Company wont be devoting resources to research, development and patents going forward. The Company is now focused on the manufacture and distribution of generic  and over-the-counter (OTC) pharmaceuticals.



5.D.  Trend information



There are significant market swings away from branded pharmaceuticals towards low cost generics. The Company will attempt to integrate itself into this shift.



5.E. Off-balance sheet arrangements



The Company does not have any off-balance sheet arrangements.



5.F. Tabular disclosure of contractual obligations



The Company does not have any long-term debt obligations, purchase obligations or other long-term liabilities reflected on the Companys statement of financial position.



The Company has entered into contracts for leased premises, which expire in 2018. Total future minimum lease payments (net of sub-lease arrangement) under these contracts are as follows:



|              |   |       
|------------- | - | ------
|Within 1 year | $ | 34,763
|2 years       |   | 37,354
|3 years       |   | 22,671
|              | $ | 94,788





5.G. Safe Harbor



This Annual Report on Form 20-F contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, principally in ITEM #4, Information on the Company and ITEM #5, Operating and Financial Review and Prospects. These statements may be identified by the use of words like plan, expect, aim, believe, project, anticipate, intend, estimate, will, should, could and similar expressions in connection with any discussion, expectation, or projection of future operating or financial performance, events or trends. In particular, these include statements about the Companys strategy for growth, future performance or results of current sales and production, interest rates, foreign exchange rates, and the outcome of contingencies, such as acquisitions and/or legal proceedings and intellectual property issues.



Forward-looking statements are based on certain assumptions and expectations of future events that are subject to risks and uncertainties. Actual future results and trends may differ materially from historical results or those projected in any such forward-looking statements depending on a variety of factors, including, among other things, the factors discussed in this Annual Report under ITEM #3, Key Information, Risk Factors and factors described in documents that the Company may furnish from time to time to the Securities and Exchange Commission. The Company undertakes no obligation to update publicly or revise any forward-looking statements because of new information.



22



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ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES



A. Directors and Senior Management



The following table sets forth certain information as of June 30, 2015 about the Companys current directors and senior management. There have been no subsequent changes to the Companys current directors and senior management, except as footnoted below:





Table No. 6:

Directors and Senior Management:





|                |          |                        |                                                                                                                                                                                                                   |                  
|--------------- | -------- | ---------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------
|Name            | Age      | Position               | Other Reporting Companies in Canada 
or the United States                                                                                                                                                        
|Company         | Position
|Arun Nayyar     | 57       | CEO                    | n/a                                                                                                                                                                                                               | n/a              
|Amandeep Parmar | 28       | CFO, and Director      | n/a                                                                                                                                                                                                               | n/a              
|Sina Pirooz     | 45       | Director               | n/a                                                                                                                                                                                                               | n/a              
|Bob Rai         | 45       | Director               | n/a                                                                                                                                                                                                               | n/a              
|Eugene Beukman  | 55       | Director and Secretary | Acana Capital Corp., Anergy Capital Corp., Bard Ventures Inc., Burnstone Ventures Inc., Emerge Resources Inc., Grand Peak Capital Corp., Innovative Properties Inc., Orofino Minerals Inc., SLAM Exploration Ltd. | All Directorships





o

Aman Parmar  CFO:  B-Tech (Accounting) British Columbia Institute of Technology, 2010; Chartered Accountant Designation 2013.



o

Mr. Eugene Beukman, Director & Secretary:  has been a corporate consultant to public companies in Canada since January 1994, primarily involved in the acquisition of assets and joint ventures.  Mr. Beukman graduated from Rand University of Johannesburg, South Africa, with a Bachelor of Law Degree and a Bachelor of Law Honors Postgraduate Degree.



Overall he has over thirty years experience in the acquisition of assets and joint venture agreements.  Mr. Beukman is an Advocate of the Supreme Court of South Africa.  He is a director and/or officer of several reporting companies listed on the TSX Venture Exchange and CNSX



o

Mr. Pirooz Director is a registered and practicing pharmacist and a professional member of the College of Pharmacists of British Columbia, with over ten years of pharmaceuticals and pharmacy management experience. He is an owner of Pure Integrative Pharmacy chain stores and President of SP RX Services, an established pharmacy consulting company, which provides consulting, pharmacist and pharmacy management services to many of Canadas largest and established drug store chains, pharmacy chains and independent pharmacies and drug stores, including Shoppers Drug Mart, Rexall Drugs, Pharmasave and Guardian Pharmacies.



o

Mr. Bob Rai Director is a registered and practicing pharmacist and a professional member of the College of Pharmacists of British Columbia, with over fifteen years of pharmaceuticals and pharmacy management experience. He is an owner of Medicine Shoppe Pharmacy chain stores.



23



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The Directors have served in their respective capacities since their election and/or appointment and will serve until the next Annual General Meeting or until a successor is duly elected, unless the office is vacated in accordance with the Articles/By-Laws of the Company.



No Director and/or member of senior management had been the subject of any order, judgment, or decree of any governmental agency or administrator or of any court or competent jurisdiction, revoking or suspending for cause any license, permit or other authority of such person or of any corporation of which he is a Director and/or member of senior management, to engage in the securities business or in the sale of a particular security or temporarily or permanently restraining or enjoining any such person or any corporation of which he is an officer or director from engaging in or continuing any conduct/practice/employment in connection with the purchase or sale of securities, or convicting such person of any felony or misdemeanor involving a security or any aspect of the securities business or of theft or of any felony.



There are no family relationships between any two or more Directors or members of senior management.



There are no arrangements or understandings with major shareholders, customers, suppliers or others, pursuant to which any person referred to above was selected as a Director or member of senior management.



6.B. Compensation



Cash Compensation



Total compensation accrued and/or paid (directly and/or indirectly) to all Directors/Senior Management during the year ended June 30, 2015 and previous years are detailed in Table No. 7 below:



24



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Table No. 7

Annual Compensation of Senior Management





|                                             |                |                     |                        |                                   |                                             |                                                     |                     |                  
|-------------------------------------------- | -------------- | ------------------- | ---------------------- | --------------------------------- | ------------------------------------------- | --------------------------------------------------- | ------------------- | -----------------
|                                             |                | Annual Compensation | Long Term Compensation |                                  
|                                             |                |                     |                        |                                   | Awards                                      | Payouts                                             |                    
|Name and
Principal Position                  | Year           | Salary
($)          | Bonus
($)              | Other 
Annual 
Compen-
sation ($) | Securities Under 
Option/
SAR's Granted
(#) | Shares/
Units 
Subject to 
Resale 
Restrictions
($) | LTIP 
Pay-
outs ($) | FMV Options 
($) 
|Eugene Beukman
Secretary(1)                  | 2015
2014
2013 | Nil
Nil
Nil         | Nil
Nil
Nil            | 26,380
25,200
Nil                 | 400,000
150,000
Nil                         | Nil
Nil
Nil                                         | Nil
Nil
Nil         | 73,200
24,990
Nil
|Amandeep Parmar, Chief Financial Officer (1) | 2015           | Nil                 | Nil                    | 25,000                            | 300,000                                     | Nil                                                 | Nil                 | 54,900           
|Arun Nayyar
Chief Executive
Officer(1)       | 2015
2014      | Nil
Nil             | Nil
Nil                | 120,000
78,333                    | 850,000
1,000,000                           | Nil
Nil                                             | Nil
Nil             | 142,400
120,440  

(1)

Consulting/management fees were paid to a management consulting company owned by Eugene Beukman, Amandeep Parmar and Arun Nayyar;





Table No. 8

Director Stock Option at June 30, 2015





|                           |              |         |                 |         |             
|-------------------------- | ------------ | ------- | --------------- | ------- | ------------
|                           | Issued       | FMV - $ | Issued          | Vested  | Expiry Date 
|Amandeep Parmar, CFO, Dir. | Dec 18, 2014 | 54,900  | 300,000 @ $0.15 | 300,000 | Dec 18, 2019
|Eugene Beukman Sec, Dir.   | Dec 18, 2014 | 73,200  | 400,000 @ $0.15 | 300,000 | Dec 18, 2019
|Sina Pirooz, Dr.  (vest)   | None in 2015 |         |                 |         |             
|Bob Rai, Dr                | None in 2015 |         |                 |         |             

















25



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The following table gives certain information concerning stock option exercises during Fiscal 2015 by the Companys Senior Management and Directors. It also gives information concerning stock option values.



Table No. 9

Aggregated Stock Options Exercises in Fiscal 2015

Fiscal Year-end Unexercised Stock Options

Fiscal Year-end Stock Option Values

Senior Management/Directors





|      |                                       |                          |                                                                                        
|----- | ------------------------------------- | ------------------------ | ---------------------------------------------------------------------------------------
|Name  | Number of Shares Acquired on Exercise | Aggregate Value Realized | Value of Unexercised In-the-Money Options at Fiscal Year-End Exercisable/Un-exercisable
|Total | 0                                     | $0                       | $0                                                                                     
|      |                                       |                          |                                                                                        





Director Compensation:  The Company has no formal plan for compensating its Directors for their service in their capacity as Directors. Directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of the Board of Directors. The Board of Directors may award special remuneration to any Director undertaking any special services on behalf of the Company other than services ordinarily required of a Director. Other than indicated below no Director received any compensation for his services as a Director, including committee participation and/or special assignments.



Stock Options:  The Company may grant stock options to Directors, Senior Management and employees. Refer to ITEM #6.E., "Share Ownership" and Table No. 8 for information about stock option grants. During the fiscal year ended June 30, 2015  2,625,000 - options were granted.



Other Compensation:  No Senior Manager or Director received other compensation in excess of the lesser of US$25,000 or 10% of such officer's cash compensation, and all Senior Managers or Directors as a group did not receive other compensation which exceeded US$25,000 times the number of persons in the group or 10% of the compensation.



Bonus/Profit Sharing/Non-Cash Compensation:  Except for the stock option program discussed in ITEM #6.E., the Company had no material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to the Company's Directors or Senior Management.



Pension/Retirement Benefits: No funds were set aside or accrued by the Company during Fiscal 2015 to provide pension, retirement or similar benefits for Directors or Senior Management.



6.C. Board Practices



6.C.1. Terms of Office.

At every Annual General Meeting of the Company, the Directors are elected by the shareholders and serve as Directors until the next Annual General Meeting is held.





26



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6.C.2. Directors Service Contracts.



The Company retains its officers through Employment agreements. The material terms of these contracts are as follows.



The Company retains the Officer as independent consultants. The Company will not be required to make contributions for employment insurance, Canada Pension, workers compensation or other similar levies in respect of the fee for services to be paid to the Officers. The Officers agree to pay all required contributions and deductions for income taxes, workers compensation and employment insurance and shall indemnify and save the Company harmless from and against all claims, actions, losses, expenses, costs or damages which the Company or its officers, employees or agents may suffer as a result of the Consultants non-compliance with this requirement.



The Officer agrees to provide sufficient time and attention to the business and affairs of the Company, to advise and counsel the Board and to channel to the Company all knowledge, business and customer contacts and any other information that could concern or be in any way beneficial to the Company. All information communicated to the Company will be the property of the Company.The Officers acknowledge that each is a person in a special relationship, as that expression is defined in the securities laws of various provinces of Canada, and may receive material information concerning the business and affairs of the Company that has not been generally disclosed, and covenant and agree that they will not purchase or sell any securities of the Company until such information has been generally disclosed.The Company is aware that the Officers may provide services to certain other companies from time to time as disclosed above. The Officers agree that they will not provide services to any other companies without the written approval of the Company.



The Company will pay a consulting fee in the amount of (Cdn) $17,333.00 per month to Arun Nayyar for CEO consulting services. The fees payable will be reviewed annually, and may be adjusted by the Company in consultation with the Officers to reflect general economic conditions, changes in the duties provided under this Agreement or performance by the Officers. The Officers are entitled to participate in the Companys incentive stock option plan (Exhibit 4.m).The Company will reimburse the Officers for all reasonable travelling and other out-of-pocket expenses incurred in connection with services provided to the Company. The Officers will be entitled to participate in any benefit programs established by the Company. To date, no such plans are in place.



Inventions of any type made by the Officers become the sole property of the Company which will hold all intellectual property rights for such inventions. If the Company chooses to patent, copyright, trademark or otherwise protect the inventions, the Officers will assign their rights to the Company. The Officers will treat all information of the company as confidential except any information that is presently in the public domain, any information that subsequently becomes part of the public domain, any information obtained by the Officers from a third party with a valid right to disclose it or any information that was independently developed by the Officers or was in their possession prior to receipt from the Company.



The Officers agree that they shall not engage in any activity that is contrary to or detracts from the performance of the business of the Company, will not receive and personal benefit from any party having business with the Company without the approval of the Board and, during the term of the agreement and for a period of one year afterwards, will not compete with the Company or solicit customers or employees of the Company



The Officers may terminate this Agreement by giving thirty (30) days written notice to the Company. The Company may waive such notice and, if it does so, this Agreement will cease on the date the Company waives such notice.The Company may terminate this Agreement without notice or payment in lieu of notice for breach of the agreement.The Company may terminate this Agreement at its sole discretion and for any reason upon giving the Consultant written notice of termination provided that the Company pays, in lieu of notice, twelve (12) months fee severance.The Company may terminate this Agreement without notice or payment in lieu of notice upon a change of control of the holding company of the Officer or the death or permanent disability of the Officer.Upon termination of this Agreement, the Consultant will promptly return all property. This Agreement may be subject to the acceptance by TSX Venture Exchange and a refusal to do so shall not constitute a default of the Company.



Amandeep Parmar charges a consulting fee of $8,333 per month..



Eugene Beukman through his company Pender Street Consulting invoices at $3,000 per month.



27



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6.C.3. Board of Director Committees.



The Company has an Audit Committee, which is governed by an Audit Committee Charter (filed as Exhibit 11 with the amended 2007 Form 20-F filed on December 3, 2008.), recommends to the Board of Directors the engagement of the independent auditors of the Company and reviews with the independent auditors the scope and results of the Companys audits, the Companys internal accounting controls, and the professional services furnished by the independent auditors to the Company. The current members of the Audit Committee are: Aman Parmar (the Companys CFO), Eugene Beukman (Director, Secretary), Sina Pirooz (non-management Director) and Bob Rai (non-management Director). The Audit Committee met four times during the year ended June 30, 2015 to discuss and approve the Companys audited and quarterly financial statements. The Audit Committee also met subsequent to the Companys last Annual General Meeting of shareholders.



6.D. Employees



As of the date of this report, the Company had no employees.



6.E. Share Ownership



Table No. 10 lists, as of June 30, 2015, Directors and Senior Management who beneficially own the Company's voting securities, consisting solely of common shares, and the amount of the Company's voting securities owned by the Directors and Senior Management as a group.



Table No. 10

Shareholdings of Directors and Senior Management





|               |                            |                                           |                     |                                                               
|-------------- | -------------------------- | ----------------------------------------- | ------------------- | --------------------------------------------------------------
|Title of Class | Name of Beneficial Owner   | Amount and Nature
of
Beneficial Ownership | Percent of Class(1) | Options and
Warrants exercisable in 60 days from June 30, 2015
|Common         | N/A                        | Nil                                       | -                   | 1,950,000 Options                                             
|               | Total Directors/Management | -                                         | -                   | -                                                             





Stock Options:  The terms of incentive options grantable by the Company are done in accordance with the rules and policies of the TSX Venture Exchange and the British Columbia Securities Commission, including the number of common shares under option, the exercise price and expiry date of such options and any amendments thereto. The Company adopted a formal written stock option plan (the "Plan") on December 13, 2005. (A copy of the Companys Stock Option Plan was filed with the 2005 Form 20-F as Exhibit 4.e.) At every Annual General Meeting of the Company, the Plan is presented to and voted on by the shareholders of the Company. If approved, the terms and conditions of the Plan remain in force for the subsequent year. The Stock Option Plan was amended and passed by a majority of shareholders at the Annual General Meeting held on April 26, 2013. A copy of the amended Stock Option Plan is provided as Exhibit 4.m. It will remain in effect until the next Annual General Meeting of Shareholders.



Such terms and conditions, including the pricing of the options, expiry and the eligibility of personnel for such stock options, are described below. The terms of the original Stock Option Plan and the major changes in the Stock Option Plan as amended in 2013 (the 2012 Plan) are described below and provided as Exhibit 4.m.



The principal purposes of the Companys stock option program are to (a) assist the Company in attracting, retaining, and motivating directors, officers and employees of the Company and, (b) to closely align the personal interests of such directors, officers and employees with the interests of the Company and its shareholders.



28



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The Plan provides that stock options may be granted to service providers for the Company. The term service providers means:



(a)

Any full or part-time employee or Officer, or insider of the Company or any of its subsidiaries;



(b)

Any other person employed by a company or individual providing management services to the Company;



(c)

Any other person or company engaged to provide ongoing consulting services for the Company or any entity controlled by the Company or



(d)

Any individual engaged to provide services that promote the purchase or sale of the issued securities (any person in (a), (b), (c) or (d) hereinafter referred to as an Eligible Person); and



(e)

Any registered retirement savings plan established by such Eligible Person, or any corporation controlled by such Eligible Person, the issued and outstanding voting shares of which are, and will continue to be, beneficially owned, directly or indirectly, by such Eligible Person and/or spouse, children and/or grandchildren of such Eligible Person.



For stock options to Employees, Consultants or Management Company Employees, the Company must represent that the optionee is a bona fide Employee, Consultant or Management Company Employee as the case may be. The terms insider Controlled and subsidiary shall have the meanings ascribed thereto in the Securities Act (Ontario) from time to time. Subject to the foregoing, the board of directors or Committee, as applicable, shall have full and final authority to determine the persons who are to be granted options under the Plan and the number of shares subject to each option.



The Plan shall be administered by the board of directors of the Company or a committee established by the board of directors for that purpose. Subject to approval of the granting of options by the board of directors or Committee, as applicable, the Company shall grant options under the Plan.



The Plan provides that the aggregate number of shares of the Company, which may be issued and sold under the Plan, will not exceed 10% of the issued shares of the Company. The Company shall not, upon the exercise of any option, be required to issue or deliver any shares prior to (a) the admission of such shares to listing on any stock exchange on which the Companys shares may them be listed, and (b) the completion of such registration or other qualification of such shares under any law, rules or regulation as the Company shall determine to be necessary or advisable. If any shares cannot be issued to any optionee for whatever reason, the obligation of the Company to issue such shares shall terminate and any option exercise price paid to the Company shall be returned to the optionee.



If a stock option expires or otherwise terminates for any reason without having been exercised in full, the number of common shares reserved for issuance under that expired or terminated stock option shall again be available for the purposes of the Plan. Any stock option outstanding when the Plan is terminated will remain in effect until it is exercised or it expires. The Plan provides that it is solely within the discretion of the Board to determine who should receive stock options and in what amounts, subject to the following conditions:



(a)

Options will be non-assignable and non-transferable except that they will be exercisable by the personal representative of the option holder in the event of the option holders death;

(b)

Under the revised 2012 Plan, options may be exercisable for a maximum of 5 years from grant date rather than five years;

(c)

Under the revised 2012 Plan, options to acquire more than 5% of the issued shares of the Company may be granted to any one individual in any 12-month period the approval of the disinterested shareholders of the Company;

(d)

Options to acquire no more than 2% of the issued shares of the Company may be granted to any one consultant in any 12-month period;

(e)

Options to acquire no more than an aggregate of 2% of the issued shares of  the Company may be granted to an employee conducting investor relations activities (as defined in TSX Venture Exchange Policy 1.1), in any 12 month period;

(f)

Options to acquire no more than 10% of the issued shares of the Company may be granted to any insiders in any 12-month period;



29



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(g)

Under the revised 2012 Plan, options held by an option holder who is a director, employee, consultant or management company employee are no longer required to expire within 90 days after the option holder ceases to be a director, employee, consultant or management company employee;

(h)

Under the revised 2012 Plan, options held by an option holder who is engaged in investor relations activities are no longer required expire within 30 days after the option holder ceases to be employed by the Company to provide investor relations activities; and

(i)

In the event of an option holders death, the option holders personal representative may exercise any portion of the option holders vested outstanding options for a period of one year following the option holders death.



The Plan provides that other terms and conditions may be attached to a particular stock option, such terms and conditions to be referred to in a schedule attached to the option certificate. Stock options granted to directors, senior officers, employees or consultants will vest when granted unless otherwise determined by the Board on a case by case basis, other than stock options granted to consultants performing investor relations activities, which will vest in stages over 12 months with no more than one-fourth of the options vesting in any three month period.



The price at which an option holder may purchase a common share upon the exercise of a stock option will be as set forth in the option certificate issued in respect of such option and in any event will not be less than the discounted market price of the Companys common shares as of the date of the grant of the stock option (the Award Date). The market price of the Companys common shares for a particular Award Date will typically be the closing trading price of the Companys common shares on the day immediately preceding the Award Date, or otherwise in accordance with the terms of the Plan. Where there is no such closing price or trade on the prior trading day market price shall mean the average of the most recent bid and ask of the shares of the Company on any stock exchange on which the shares are listed or dealing network on which the shares of the Company trade.



In no case will a stock option be exercisable at a price less than the minimum prescribed by each of the organized trading facilities or the applicable regulatory authorities that would apply to the award of the stock option in question.



Common shares will not be issued pursuant to stock options granted under the Plan until they have been fully paid for by the option holder. The Company will not provide financial assistance or loans to option holders to assist them in exercising their stock options.









30



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ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS



7.A. Major Shareholders



As of June 30, 2015, all shareholders have the same voting rights attached thereto as all other common shares of the Company except that, under the terms of the Voting Agreement described above and attached as Exhibit 3 to the amended 2007 Form 20-F filed on December 3, 2008. As of June 30, 2015, no shareholder held more than 5% of the Issued and Outstanding Common Shares.



7.A.1.a. Holdings By Major Shareholders.

Refer to ITEM #6.E and Table No. 10.



7.A.1.b. Significant Changes in Major Shareholders Holdings.

---No Disclosure Required---



7.A.1.c. Different Voting Rights.



The Companys major shareholders do not have different voting rights except as described in the Voting Agreement (Exhibit 3 filed with the amended 2007 Form 20-F on December 3, 2008) which is summarized in Section 4.A., History and Development of the Company.



7.A.2. Canadian Share Ownership.



On June 30, 2015, the Companys shareholders list showed 55,219,116 common shares outstanding, an estimated 1800 registered shareholders. The Company has researched the indirect holding by depository institutions and other financial institutions estimates that there are 48,241,411 common shareholders in Canada.



7.A.3. Control of the Company

The Company is a publicly owned Canadian corporation, the shares of which are owned primarily by Canadian residents and other foreign residents. The Company is not controlled by any foreign government or other person(s) except as described in ITEM #4.A., History and Development of the Company, and ITEM #6.E., Share Ownership.



7.A.4. Change of Control of Company Arrangements

---No Disclosure Necessary---



7.B. Related Party Transactions



Related party transactions are described in Note 13 to the consolidated financial statements and are shown below. The remuneration of the Companys directors and other members of key management, being the Chief Executive Officer (CEO) and Chief Financial Officer (CFO), who have the authority and responsibility for planning, directing and controlling the activities of the Company, consist of the following amounts:



|                                         |     |          |           |          
|---------------------------------------- | --- | -------- | --------- | ---------
|                                         |     |          | June 30,  | June 30, 
|                                         |     |          | 2015      | 2014     
|                                         |     |          |           |          
|Accounts payable and accrued liabilities | $
- | $
26,375
|Promissory note                          |     |          | $
-       | $
32,978 
|Expenditures                             |     |          |           |          
|Management and consulting fees           |     |          | $
149,667 | $
166,458
|Share-based payments                     |     |          | $
297,073 | $
252,466
|Rent                                     |     |          | $
4,500   | $
9,530  



Accounts payable and promissory note balances at June 30, 2014 consisted of an unpaid balance of CEO fees owed by the Company for services rendered and a loan that was settled during the year ended June 30, 2015.



Management and consulting fees includes payments to officers and directors of the Company for services rendered, and include payments to the CEO, CFO and the corporate secretary.



31



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Rent expenses consist of fees paid to the CEO.



All related party transactions were in the normal course of business operations.



Accounting Fees

For the annual statements dated June 30, 2015 the Company paid Smythe Ratcliffe accounting fees of $15,000.



Indirect Payments

---No Disclosure Required---



Shareholder Loans

---No Disclosure Required---



Amounts Owing to Senior Management/Directors

--No Disclosure Required--



7.C. Interests of Experts and Counsel

---No Disclosure Required---



ITEM 8. FINANCIAL INFORMATION



8.A. Consolidated Statements and Other Financial Information



The consolidated financial statements of the Company comply with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB).



Basis of preparation

The consolidated financial statements of the Company have been prepared on an accrual basis and are based on historical costs, modified where applicable. The consolidated financial statements are presented in Canadian dollars unless otherwise noted.



Significant estimates and judgments

The preparation of consolidated financial statements in accordance with IFRS requires the Companys management to make estimates, judgments and assumptions that affect amounts reported in the consolidated financial statements and accompanying notes to the consolidated financial statements. The Companys management reviews these estimates and underlying judgments on an ongoing basis, based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revisions to estimates are adjusted for prospectively in the year in which the estimates are revised.



Changes in Significant Accounting Polices



(a) IFRS 9 Financial instruments (IFRS 9) was issued by the IASB in October 2010 and will replace IAS 39 - Financial Instruments: Recognition and Measurement (IAS 39). IFRS 9 uses a single approach to determine whether a financial asset is measured at amortized cost or fair value, replacing the multiple rules in IAS 39. The approach in IFRS 9 is based on how an entity manages its financial instruments in the context of its business model and the contractual cash flow characteristics of the financial assets. Most of the requirements in IAS 39 for classification and measurement of financial liabilities were carried forward unchanged to IFRS 9. The new standard also requires a single impairment method to be used, replacing the multiple impairment methods in IAS 39. IFRS 9 is effective for annual periods beginning on or after January 1, 2013.  IASB has proposed to move the effective date of IFRS 9 to January 1, 2015.



(b) IFRS 10 Consolidated Financial Statements  effective for annual periods beginning on or after January 1, 2013, with early adoption permitted, establishes principles for the presentation and preparation of consolidated financial statements when an entity controls one or more other entities.



(c) IFRS 11 Joint arrangements (IFRS 11) was issued by the IASB in May 2011 and will replace IAS 31 - Interests in Joint ventures and SIC 13  Jointly Controlled Entities  Non-Monetary Contributions by Ventures. IFRS 11 is effective for annual period beginning on or after January 1, 2013.



32



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(d) IFRS 12 Disclosure of Interests in Other Entities - effective for annual periods beginning on or after January 1, 2013, with early adoption permitted, requires the disclosure of information that enables users of financial statements to evaluate the nature of, and risks associated with its interests in other entities and the effects of those interests on its financial position, financial performance and cash flows.



(e) IFRS 13 Fair Value Measurement - effective for annual periods beginning on or after January 1, 2013, with early adoption permitted, provides   the guidance on the measurement of   fair value and related disclosures through a fair value hierarchy.



8.A.7. Legal/Arbitration Proceedings



There are no legal proceedings against the Company. Two Small Claims judgements by suppliers have been paid in full.



8.B. Significant Changes



The Company has abandoned all patent, maintenance except for Canada and China.



The Company is now focused on the manufacture and distribution of generic and over-the-counter (OTC) pharmaceuticals.



ITEM 9. THE OFFER AND LISTING



9.A. Common Share Trading Information



The Company's common shares trade on the TSX Venture Exchange in Toronto, Ontario, Canada, under the symbol "NPH". The Company also trades on the OTCQB under the symbol NPHSF.



Table No. 11 lists the high, low and closing sales prices on the TSX Venture Exchange for the last five months, last seven fiscal quarters, and last five fiscal years.



33



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Table No. 11

TSX Venture Exchange

Common Shares Trading Activity





Canadian Dollars



|                                |       |       |        
|------------------------------- | ----- | ----- | -------
|                                | High  | Low   | Closing
|Month ended 11/30/15            | n/a   | n/a   | n/a    
|Month ended 10/31/15            | n/a   | n/a   | n/a    
|Month ended 09/30/15            | .48   | .405  | .405   
|Month ended 08/31/15            | .46   | .35   | .415   
|Month ended 07/31/15            | .395  | 0.35  | .37    
|                                |       |       |        
|Fiscal Year Ended 06/30/2015    | .94   | .07   | .44    
|Fiscal Year Ended 06/30/2014    | 0.14  | .06   | 0.14   
|Fiscal Year Ended 06/30/2013    | n/a   | n/a   | 0.08   
|Fiscal Year Ended 06/30/2012    | n/a   | n/a   | .07    
|Fiscal Year Ended 06/30/2011    | 0.045 | 0.045 | 0.045  
|                                |       |       |        
|Fiscal Quarter Ended 09/30/2015 | .16   | .07   | .085   
|Fiscal Quarter Ended 06/30/2015 | .58   | .395  | .44    
|Fiscal Quarter Ended 03/31/2015 | .15   | .94   | .485   
|Fiscal Quarter Ended 12/31/2014 | .24   | .075  | .22    
|Fiscal Quarter Ended 09/30/2014 | 0.16  | 0.07  | .085   
|Fiscal Quarter Ended 06/30/2014 | 0.16  | 0.12  | 0.12   
|Fiscal Quarter Ended 03/31/2014 | 0.23  | 0.16  | 0.16   





9.A.5. Common Share Description



Registrar/Common Shares Outstanding/Shareholders



Effective August 19, 2005, the authorized share capital of the Company was increased to an unlimited number of common shares without par value due to changes in the British Columbia Company Act which permitted this action.



There are no Indentures or Agreements limiting the payment of dividends and there are no conversion rights, special liquidation rights, pre-emptive rights or subscription rights.



Computershare Trust Company of Canada (located at 2nd Floor, 510 Burrard Street, Vancouver, British Columbia Canada V6C 3B9) is the registrar and transfer agent for the common shares.



Stock Options

Refer to ITEM 6.E., Table No. 10 (Aggregate Option Exercises)



Table No. 12 lists, as of June 30, 2015, share purchase warrants (options to purchase common shares) outstanding, the date the share purchase warrants were issued, the exercise price, and the expiration date of the share purchase warrants.  These warrants were issued in conjunction with private placements of the Companys securities and all holders of the Companys warrants are resident in Canada.



34



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Table No. 12

Share Purchase Warrants Outstanding



|                       |  |             |           |           
|---------------------- |  | ----------- | --------- | ----------
|                       |  | Outstanding
|                       |  | Exercise    | June 30,  | June 30,  
|Expiry date            |  | Price       | 2015      | 2014      
|                       |  |             |           |           
|April 8, 2015          |  | $0.30       | -         | 1,890,000 
|December 11, 2015      |  | $0.25       | 1,787,542 | -         
|April 8, 2016          |  | $0.13       | 1,300,000 | 2,160,000 
|June 12, 2016          |  | **$0.40     | 3,905,000 | 7,750,000 
|Issued and exercisable |  |             | 6,992,542 | 11,800,000



*These warrants are exercisable at a price of $0.30 per warrant until June 12, 2014, $0.40 until June 12, 2015 and $0.50 until June 12, 2016.





9.A.6. Differing Rights

---No Disclosure Necessary---



9.A.7.a. Subscription Warrants/Right

---No Disclosure Necessary---



9.A.7.b. Convertible Securities/Warrants

---No Disclosure Necessary---



9.C. Stock Exchanges Identified



The common shares trade on the TSX Venture Exchange which is headquartered in Toronto, Ontario.



Refer to ITEM #9.A.4 for trading information and history. At this time, the Company is not seeking a listing on any other stock exchange.



ITEM 10. ADDITIONAL INFORMATION



10.A. Share Capital



10.A.1. Authorized/Issued Capital.



At June 30, 2015, there were an unlimited number of common shares authorized and  common shares issued and outstanding.



At June 30, 2014, there were an unlimited number of common shares authorized and 36,767,074 common shares issued and outstanding.



At June 30, 2013, there were an unlimited number of common shares authorized and 21,617,074 common shares issued and outstanding.



At June 30, 2012, there were an unlimited number of common shares authorized and 6,959,680 common shares issued and outstanding. On March 08, 2012 the Company consolidated its shares on a 10 to 1 basis



At June 30, 2011, there were an unlimited number of common shares authorized and 63,996,799 common shares issued and outstanding.



At June 30, 2010, there were an unlimited number of common shares authorized and 58,721,799 common shares issued and outstanding.



35



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At June 30, 2009, there were an unlimited number of common shares authorized and 51,341,799 common shares issued and outstanding.



At June 30, 2008, there were an unlimited number of common shares authorized and there were 49,511,799 common shares issued and outstanding.



At June 30, 2007, there were an unlimited number of common shares authorized and there were 32,192,404 common shares issued and outstanding.



At June 30, 2006, there were an unlimited number of common shares authorized and there were 20,800,404 common shares issued and outstanding.



Effective August 19, 2005, the authorized share capital of the Company was increased to an unlimited number of common shares without par value due to changes in the British Columbia Company Act which permitted this action.



As of June 30, 2005, there were 100,000,000 common shares authorized and 15,784,404 common shares issued.



As of June 30, 2004, there were 100,000,000 common shares authorized and 12,784,404 common shares issued.



As of June 30, 2003, there were 100,000,000 common shares authorized and 2,451,475 common shares issued.



As of June 30, 2002, there were 100,000,000 common shares authorized and 2,376,475 common shares issued.



As of June 30, 2001, there were 100,000,000 common shares authorized and 1,176,475 common shares issued.



During the last five years, less than 1% of the capital has been paid for with assets other than cash.



10.A.2. Shares Not Representing Capital.

---No Disclosure Necessary---



10.A.3. Shares Held By Company.

---No Disclosure Necessary---



10.A.4. Stock Options/Share Purchase Warrants

---Refer to Tables No. 8, No. 11 No. 13.---



10.A.5. Stock Options/Share Purchase Warrants

---Refer to Tables No. 8, No. 11 No. 13.---



36



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10.A.6. History of Share Capital



The Company has financed its operations through funds raised in public and private placements of common shares and warrants and from revenues from the sale of its products:





|            |                                                                       |                  |                  
|----------- | --------------------------------------------------------------------- | ---------------- | -----------------
|Fiscal Year | Nature of Share Issuance                                              | Number of Shares | Amount ($)       
|Fiscal 2001 | Private Placement @ $0.85                                             | 117,647          | $100,000         
|            |                                                                       |                  |                  
|Fiscal 2002 | Canadian Prospectus Offering (IPO) @$1.70                             | 120,000          | $204,000         
|Fiscal 2003 | Brokers Warrant Shares on Canadian Prospectus Offering (IPO) @ $1.70 | 15,000           | $25,500          
|            |                                                                       |                  |                  
|Fiscal 2004 | Private Placement @ $1.50                                             | 34,666           | $52,000          
|            | Private Placement @ $2..00                                            | 620,000          | $1,240,000       
|            |                                                                       |                  |                  
|Fiscal 2005 | Private Placement @ $1.00                                             | 300,000          | $300,000         
|            |                                                                       |                  |                  
|Fiscal 2006 | Private Placement @$0.50
Private Placement @$0.50                     | 391,600
110,000  | $195,800
$55,000 
|            |                                                                       |                  |                  
|Fiscal 2007 | Private Placement @$1.50
Private Placement @$1.00                     | 143,000
800,000  | $71,500
$800,000 
|            |                                                                       |                  |                  
|Fiscal 2008 | Private placement @ $1.20                                             | 200,000          | $240,000         
|            | Private placement @ $1.50                                             | 350,000          | $525,000         
|            |                                                                       |                  |                  
|Fiscal 2009 | N/A                                                                   | N/A              | N/A              
|            |                                                                       |                  |                  
|Fiscal 2010 | Private placement @ $2.50                                             | 600,000          | 1,500,000        
|            |                                                                       |                  |                  
|Fiscal 2011 | Private placement @ $1.00
Private placement @ $1.00                   | 327,500
200,000  | $327,500
$200,000
|            |                                                                       |                  |                  
|Fiscal 2012 | Private placement @$0.10                                              | 560,000          | $56,000          
|            |                                                                       |                  |                  
|Fiscal 2013 | Private placement @$0.10                                              | 8,000,000        | $800,000         
|            |                                                                       |                  |                  
|Fiscal 2014 | Private placement @$0.10                                              | 3,750,000        | $375,000         
|Fiscal 2015 | Private placement @$0.15                                              | 7,607,332        | 1,141,000        



10.A.7. Resolutions/Authorizations/Approvals

---No Disclosure Necessary---



10.B. Memorandum and Articles of Association

The Companys corporate constituting documents comprising the Notice of Articles and Articles are registered with the British Columbia Registrar of Companies under Incorporation No. BC0607937. A copy of the Articles was filed as an Exhibit 1 with the Companys initial registration statement on Form 20-F.



The following is a summary of certain  provisions of the Company's  Notice of Articles and Articles and certain provisions of the British Columbia Business Corporations Act (the BCA), applicable to the Company:



Objects and Purposes

The Articles do not specify objects or purposes. Under both the BCA, a British Columbia corporation generally has all the legal powers of a natural person. British Columbia corporations may not undertake certain limited business activities such as operating as a trust company or railroad without alterations to its form of articles and specific government consent.



37



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Share Capital

The authorized capital of the Company consists of an unlimited number of common shares without par value. All of the common shares must be fully paid and are not subject to any future call or assessment. All of the common shares of the Company rank equally as to voting rights, participation in a distribution of the assets of the Company on a liquidation, dissolution or winding-up of the Company and the entitlement to dividends. The holders of the common shares are entitled to receive notice of all shareholder meetings and to attend and vote at such meetings. Shareholders are not entitled to cumulative voting. Each common share carries with it the right to one vote. The common shares do not have preemptive or conversion rights. In addition, there are no sinking fund or redemption provisions applicable to the common shares or any provisions discriminating against any existing or prospective holders of such securities as a result of a shareholder owning a substantial number of shares.



Share Certificates

Under the Articles, a shareholder is entitled to a share certificate representing the number of shares of the Company held or a written acknowledgement of the shareholders right to obtain such a share certificate.



No Limitation on Foreign Ownership

There are no limitations under the Companys Articles or in the BCA on the right of persons who are not citizens of Canada to hold or vote common shares.



Dividends

Dividends may be declared by the Board out of available assets and are paid ratably to holders of common shares. No dividend may be paid if the Company is, or would thereby become, insolvent.



Voting Rights

Each of the Companys common share is entitled to one vote on matters to which common shares ordinarily vote including the annual election of directors, appointment of auditors and approval of corporate changes. There are no cumulative voting rights applicable to the Company.



Borrowing Powers

The Company, if authorized by the directors, may: (a) borrow money in the manner and amount, on the security, from the sources and on the terms and conditions that they consider appropriate; (b) issue bonds, debentures and other debt obligations either outright or as security for any liability or obligation of the Company or any other person and at such discounts or premiums and on such other terms as they consider appropriate; (c) guarantee the repayment of money by any other person or the performance of any obligation of any other person; and (d)mortgage, charge, whether by way of specific or floating charge, grant a security interest in, or give other security on, the whole or any part of the present and future assets and undertaking of the Company.



Indemnity Provisions

Under the Articles and the BCA, the Company is now permitted (and is, in some circumstances, required) to indemnify a past or present director or officer of the Company or an associated corporation without obtaining prior court approval in respect of an eligible proceeding. An eligible proceeding includes any legal proceeding relating to the activities of the individual as a director or officer of the Company. However, under the BCA, the Company will be prohibited from paying an indemnity if: (a) the party did not act honestly and in good faith with a view to the best interests of the Company; (b) the proceeding was not a civil proceeding and the party did not have reasonable grounds for believing that his or her conduct was lawful; and (c) the proceeding is brought against the party by the Company or an associated corporation.



Directors  Number and Qualification

The Companys Articles do not specify a maximum number of directors. The minimum under British Columbia law for a public company is three. The number of directors shall be the number of directors fixed by the directors annually or the number that are actually elected at a general shareholders meeting under the Existing Articles. The number of directors is determined, annually, by shareholders at the annual shareholders meeting and all directors are elected at that time. Under the Articles the directors are entitled between successive annual general meetings to appoint one or more additional directors but not more than one-third of the number of directors fixed at a shareholders or actually elected at the preceding annual shareholders meeting. Directors automatically retire at the commencement of each annual meeting but may be re-elected thereat.



38



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Directors must be of the age of majority (18), and meet eligibility criteria including being mentally competent, not an un-discharged bankrupt, no fraud related convictions in the previous five years. There are residency requirements and there is no mandatory retirement age either under the Articles or under the BCA. Directors need not own any shares of the Company in order to qualify as directors.



Directors - Powers and Limitations

Directors must manage or supervise the management of the business and affairs of the Company and have the authority to exercise all such powers which are not required to be exercised by the shareholders as governed by the BCA. Directors may, by resolution, create and appoint an executive committee consisting of the director or directors that they deem appropriate. This executive committee has, during the intervals between meetings of the Board, all of the directors powers, except the power to fill vacancies in the Board, the power to remove a Director, the power to change the membership of, or fill vacancies in, any committee of the Board and any such other powers as may be set out in the resolution or any subsequent directors resolution. Directors may also by resolution appoint one or more committees other than the executive committee. These committees may be delegated any of the directors powers except the power to fill vacancies on the board of directors, the power to remove a director, the power to change the membership or fill vacancies on any committee of the directors, and the power to appoint or remove officers appointed by the directors.



Under the BCA, directors are obligated to abstain from voting on matters in which they may be financially interested after disclosing in writing such interest. Directors compensation is not a matter on which they must abstain. Directors borrowing powers are not generally restricted where the borrowing is in the Companys best interests, but the directors may not authorize the Company to provide financial assistance for any reason where the Company is insolvent or the providing of the guarantee would render it insolvent.



Amendment of Articles and Notice of Articles; Special Transactions

The Articles provide that the general authority required to amend all provisions of the Companys Articles and the Notice of Articles relating to the authorized share structure is a resolution of the directors and the attachment of special rights and restrictions thereto, including any changes therein, an ordinary resolution. If the amendment prejudices or interferes with the rights or special rights attached to any class of issued shares, by the provisions of the BCA, the consent of the holders of that class of shares by a special separate resolution is also required.



Certain corporate changes or proposed transactions including amalgamation with another company, sale of substantially all of the Companys assets, re-domiciling out of the jurisdiction of British Columbia, creation of new classes of shares not only require the consent of the holders of common shares by a special separate resolution but generally also give rise to a dissent right which is the right to be paid the fair value of the stockholders shares in cash if the required special resolution is actually passed and the Company elects to proceed with the matter notwithstanding receipt of dissent notices. A notice of a shareholders meeting at which such a change or proposed transaction is intended to be considered must include a prominent notice of the dissent right. Dissent provisions are governed by the BCA and not by the Articles of the Company.



Under the Articles, a special separate resolution requires a majority of three-quarters of the votes cast.



Shareholders Meetings

In addition to reflecting the present notice and other provisions of the BCA relating to shareholders meetings, the Articles provide that shareholders meetings may be held at such place as is determined by the directors. Shareholders meetings are governed by the Articles of the Company but many important protections and procedures are contained within the BCA and the Securities Act (British Columbia) and the Securities Act (Alberta) and the respective regulations and rules thereto and the policy statements, notices and blanket orders of the respective commissions of each of British Columbia and Alberta, together with the national policy statements, and national instruments applied by the such commissions (collectively, Applicable Canadian Securities Law). The Articles provide that the Company will hold an annual shareholders meeting, will provide at least 21 days notice and will provide for certain procedural matters and rules of order with respect to conduct of the meeting. The BCA and Applicable Canadian Securities Law superimpose requirements that generally provide that shareholders meetings require not less than a 60 day notice period from initial public notice and that the Company makes a thorough advanced search of intermediary and brokerage registered shareholdings to facilitate communication with beneficial shareholders so that meeting proxy and information materials can be sent via the brokerages to unregistered but beneficial shareholders. The form and content of information circulars and proxies and like matters are governed by Applicable Canadian Securities Law and includes the specifies relating to disclosure requirements for the proxy materials and various corporate actions, background information on the nominees for election for director, executive compensation paid in the previous year and full details of any unusual matters or related party transactions.



39



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The Company must hold an annual shareholders meeting open to all shareholders for personal attendance or by proxy at each shareholders determination. The meeting must be held within 13 months of the previous annual shareholders meeting and must present audited statements which are dated no more than six months prior to such meeting.



Change in Control

The Company has not implemented any shareholders rights or other poison pill protection against possible take-overs. The Company does not have any agreements which are triggered by a take-over or other change of control. There are no provisions in its articles triggered by or affected by a change in outstanding shares which gives rise to a change in control. There are no provisions in the Companys material agreements giving special rights to any person on a change in control.



Insider Share Ownership Reporting

The Articles of the Company do not require disclosure of share ownership. Share ownership of director nominees must be reported annually in proxy materials sent to the Companys shareholders. There are no requirements under the BCA to report ownership of shares of the Company but Applicable Canadian Securities Law requires disclosure of trading by insiders (generally officers, directors and holders of 10% of voting shares) within 10 days of the trade. Controlling shareholders (generally those in excess of 20% of outstanding shares) must provide seven days advance notice of share sales.



Applicable Canadian Securities Law

Applicable Canadian Securities Law governs matters typically pertaining to public companies such as continuous quarterly financial reporting, immediate disclosure of material changes, insider trade reporting, take-over protections to ensure fair and equal treatment of all shareholders, exemption and resale rules pertaining to non-prospectus securities issuances as well as civil liability for certain misrepresentations, disciplinary, appeal and discretionary ruling matters. All of the Companys shareholders regardless of residence have equal rights under this legislation except as provided for in the Voting Agreement (Exhibit 3.a.).



10.C. Material Contracts



The Company has entered in 3 manufacturing contracts with its suppliers.  These contracts stipulate the products and amount which must be purchased from the supplier.



10.D. Exchange Controls



Canada has no system of exchange controls. There are no Canadian restrictions on the repatriation of capital or earnings of a Canadian public company to non-resident investors. There are no laws in Canada or exchange restrictions affecting the remittance of dividends, profits, interest, royalties and other payments to non-resident holders of the Companys securities, except as discussed in ITEM 10, Taxation" below.



Restrictions on Share Ownership by Non-Canadians:  There are no limitations under the laws of Canada or in the organizing documents of the Company on the right of foreigners to hold or vote securities of the Company, except that the Investment Canada Act may require review and approval by the Minister of Industry (Canada) of certain acquisitions of "control" of the Company by a "non-Canadian". The threshold for acquisitions of control is generally defined as being one-third or more of the voting shares of the Company. "Non-Canadian" generally means an individual who is not a Canadian citizen, or a corporation, partnership, trust or joint venture that is ultimately controlled by non-Canadians. If a non-Canadian (for example, a US resident acquirer) were to acquire such a control position, they would not be required to do any filings or provide any notices to the Ministry of Industry (Canada) unless notified first by that Ministry that their acquisition of control was under review.



Canada has, as does the United States, competition laws designed to promote competition in industry and markets. The Competition Act (Canada) provides Canadas federal government with the power to review or prevent business transactions, such as acquiring a controlling interest in a company similar to the Company , if it is found that the acquisition of control would reduce competition in a given market or industry. Since the market that the Company competes in is extremely competitive, no single company, including the Company, seems to have significant market power. Acquisition of the Company, therefore, would not lead to reduced competition.



40



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10.E. Taxation



Canadian Federal Income Tax Considerations:



The following is a brief summary of some of the principal Canadian federal income tax consequences to a holder of common shares of the Company (a "U.S. Holder") who deals at arm's length with the Company, holds the shares as capital property and who, for the purposes of the Income Tax Act (Canada) (the "Act") and the Canada  United States Income Tax Convention (the "Treaty"), is at all relevant times resident in the United States, is not and is not deemed to be resident in Canada and does not use or hold and is not deemed to use or hold the shares in carrying on a business in Canada. Special rules, which are not discussed below, may apply to a U.S. Holder that is an insurer that carries on business in Canada and elsewhere.



Under the Act and the Treaty, a U.S. Holder of common shares will generally be subject to a 5% withholding tax on dividends paid or credited or deemed by the Act to have been paid or credited on such shares. The withholding tax rate is 5% where the U.S. Holder is a corporation that beneficially owns at least 10% of the voting shares of the Company and the dividends may be exempt from such withholding in the case of some U.S. Holders such as qualifying pension funds and charities.

In general, a U.S. Holder will not be subject to Canadian income tax on capital gains arising on the disposition of shares of the Company unless (i) at any time in the five-year period immediately preceding the disposition, 25% or more of the shares of any class or series of the capital stock of the Company was owned by (or was under option of or subject to an interest of) the U.S. holder or persons with whom the U.S. holder did not deal at arm's length, and (ii) the value of the common shares of the Company at the time of the disposition derives principally from real property (as defined in the Treaty) situated in Canada. For this purpose, the Treaty defines real property situated in Canada to include rights to explore for or exploit mineral deposits and other natural resources situated in Canada, rights to amounts computed by reference to the amount or value of production from such resources, certain other rights in respect of natural resources situated in Canada and shares of a corporation the value of whose shares is derived principally from real property situated in Canada.



The US Internal Revenue Code provides special anti-deferral rules regarding certain distributions received by US persons with respect to, and sales and other dispositions (including pledges) of stock of, a passive foreign investment company. A foreign corporation, such as the Company, will be treated as a passive foreign investment company if 75% or more of its gross income is passive income for a taxable year or if the average percentage of its assets (by value) that produce, or are held for the production of, passive income is at least 50% for a taxable year. The Company believes that it was not a passive foreign investment company for the taxable year ended December 31, 2009 and, furthermore, expects to conduct its affairs in such a manner so that it will not meet the criteria to be considered passive foreign investment company in the foreseeable future.



Dividends:



A Holder will be subject to Canadian withholding tax ("Part XIII Tax") equal to 25%, or such lower rate as may be available under an applicable tax treaty, of the gross amount of any dividend paid or deemed to be paid on common shares. Under the Canada-U.S. Income Tax Convention (1980) as amended by the Protocols signed on 6/14/1983, 3/28/1984, 3/17/1995, and 7/29/1997 (the "Treaty"), the rate of Part XIII Tax applicable to a dividend on common shares paid to a Holder who is a resident of the United States and who is the beneficial owner of the dividend, is 5%. If the Holder is a company that owns at least 10% of the voting stock of the Company paying the dividend, and, in all other cases, the tax rate is 15% of the gross amount of the dividend. The Company will be required to withhold the applicable amount of Part XIII Tax from each dividend so paid and remit the withheld amount directly to the Receiver General for Canada for the account of the Holder.



41



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Disposition of Common Shares:



A Holder who disposes of a common share, including by deemed disposition on death, will not normally be subject to Canadian tax on any capital gain (or capital loss) thereby realized unless the common share constituted "taxable Canadian property" as defined by the Tax Act. Generally, a common share of a public corporation will not constitute taxable Canadian property of a Holder if the share is listed on a prescribed stock exchange unless the Holder or persons with whom the Holder did not deal at arm's length alone or together held or held options to acquire, at any time within the five years preceding the disposition, 25% or more of the shares of any class of the capital stock of the Company. The Canadian Venture Exchange is a prescribed stock exchange under the Tax Act. A Holder who is a resident of the United States and realizes a capital gain on a disposition of a common share that was taxable Canadian property will nevertheless, by virtue of the Treaty, generally be exempt from Canadian tax thereon unless:



(a)  More than 50% of the value of the common shares is derived from, or from an interest in, Canadian real estate, including Canadian mineral resource properties,

(b)

The common share formed part of the business property of a permanent establishment that the Holder has or had in Canada within the 12 month period preceding the disposition, or

(c)

The Holder is an individual who (i) was a resident of Canada at any time during the 10 years immediately preceding the disposition, and for a total of 120 months during any period of 20 consecutive years, preceding the disposition, and (ii) owned the common share when he ceased to be resident in Canada.



A Holder who is subject to Canadian tax in respect of a capital gain realized on a disposition of a common share must include three quarters of the capital gain (taxable capital gain) in computing the Holder's taxable income earned in Canada. The Holder may, subject to certain limitations, deduct three-quarters of any capital loss (allowable capital loss) arising on a disposition of taxable Canadian property from taxable capital gains realized in the year of disposition in respect to taxable Canadian property and, to the extent not so deductible, from such taxable capital gains realized in any of the three preceding years or any subsequent year.



United States Taxation:



For federal income tax purposes, an individual who is a citizen or resident of the United States or a domestic corporation ("U.S. Taxpayer") will recognize a gain or loss on the sale of the Company's common shares equal to the difference between the proceeds from such sale and the adjusted tax basis of the common shares. The gain or loss will be a capital gain or capital loss if the Company's common shares are a capital asset in U.S. Taxpayer's hands.



For federal income tax purposes, a U.S. Taxpayer will be required to include in gross income dividends received on the Company's common shares. A U.S. Taxpayer who pays Canadian tax on a dividend on common shares will be entitled, subject to certain limitations, to a credit (or alternatively, a deduction) against federal income tax liability. A domestic corporation that owns at least 10% of the voting shares should consult its tax advisor as to applicability of the deemed paid foreign tax credit with respect to dividends paid on the Company's common shares.



Under a number of circumstances, United States Investor acquiring shares of the Company may be required to file an information return with the Internal Revenue Service Center where they are required to file their tax returns with a duplicate copy to the Internal Revenue Service Center, Philadelphia, PA 19255. In particular, any United States Investor who becomes the owner, directly or indirectly, of 10% or more of the shares of the Company will be required to file such a return. Other filing requirements may apply. United States Investors should consult their own tax advisors concerning these requirements.



The US Internal Revenue Code provides special anti-deferral rules regarding certain distributions received by US persons with respect to, and sales and other dispositions (including pledges) of stock of, a passive foreign investment company. A foreign corporation, such as the Company, will be treated as a passive foreign investment company if 75% or more of its gross income is passive income for a taxable year or if the average percentage of its assets (by value) that produce, or are held for the production of, passive income is at least 50% for a taxable year. The Company believes that it was not a passive foreign investment company for the taxable year ended December 31, 2009 and, furthermore, expects to conduct its affairs in such a manner so that it will not meet the criteria to be considered passive foreign investment company in the foreseeable future.



42



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10.F. Dividends and Paying Agents



The Company has not declared any dividends on its common shares for the last five years and does not anticipate that it will do so in the foreseeable future. The present policy of the Company is to retain future earnings for use in its operations and the expansion of its business.



Notwithstanding the aforementioned: the Company is unaware of any dividend restrictions; has no specific procedure for the setting of the date of dividend entitlement; but might expect to set a record date for stock ownership to determine entitlement; has no specific procedures for non-resident holders to claim dividends, but might expect to mail their dividends in the same manner as resident holders. The Company has not nominated any financial institutions to be the potential paying agents for dividends in the United States.



10.G. Statement by Experts



The Companys auditor for its consolidated financial statements for fiscal year ended 2015 was Smythe Ratcliffe LLP. Their audit report for Fiscal 2015 is included with the related consolidated financial statements in this Annual Report.



10.H. Document on Display

--- No Disclosure Necessary ---



ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

--- No Disclosure Necessary ---



ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES



12.A. Debt Securities

--- No Disclosure Necessary ---



12.B. Warrants and Rights

--- No Disclosure Necessary ---



12.C. Other Securities

--- No Disclosure Necessary ---



12.D. American Depository Shares

-- No Disclosure Necessary ---



43



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PART II



ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

--- No Disclosure Necessary ---



ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

--- No Disclosure Necessary ---



ITEM 15. CONTROLS AND PROCEDURES



The Company carried out an evaluation, under the supervision and with the participation of the Companys management, including the Companys CEO, of the effectiveness of the design and operation of the Companys disclosure controls and procedures (as defined in the Exchange Act Rule 13a-15(e)) as of the end of the period covered by this report. Based upon that evaluation, the President concluded that the Companys disclosure controls and procedures are effective in timely alerting them to material information relating to the Company required to be included in the Companys periodic SEC filings, and that information is recorded, processed, summarized and reported as and when required.



There was no significant change in the Companys internal control over financial reporting that occurred during the Companys most recently completed fiscal year ended June 30, 2015 that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting. Nor were there any significant deficiencies or material weaknesses in the Company's internal controls requiring corrective actions.



ITEM 16. RESERVED



ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERTS



Amandeep Parmar, is a financially literate member of the Companys Audit Committee. Eugene Beukman, and Sina Pirooz are considered independent and financially literate, as those terms are defined in applicable securities legislation.



ITEM 16B. CODE OF ETHICS



The Company has not adopted a formal code of ethics because, as a TSX Venture Exchange issuer, the Company is only required have an audit committee. The audit committee is composed of a majority of independent members as discussed above under the heading Item 16.B. Audit Committee Financial Experts.



In lieu of a code of ethics, the Company has adopted the following methodology with respect to corporate governance.



The management of VANC is responsible for establishing and maintaining disclosure controls and procedures for information relating to the Company, including its consolidated subsidiaries. The Companys management is also responsible for establishing and maintaining adequate internal control over financial reporting.



VANCs Board of Directors facilitates its exercise of independent supervision over management by ensuring that the Board is composed of a majority of independent directors. The Board, at present, is composed of four directors, all of which are considered to be independent except for Mr. Parmar who is also a senior officer. In determining whether a director is independent, the Board considers, for example, whether the director has a relationship, which could, or could be perceived to, interfere with the director's ability to objectively assess the performance of management.



44



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The Board monitors the ethical conduct of VANC and its management and ensures that it complies with applicable legal and regulatory requirements, such as those of relevant securities commissions and stock exchanges. The Board has found that the fiduciary duties placed on individual directors by the Companys governing corporate legislation and the common law, as well as the restrictions placed by applicable corporate legislation on the individual directors participation in decisions of the Board in which the director has an interest, have been sufficient to ensure that the Board operates independently of management and in the best interests of the Company.



The Board is specifically responsible for approving long-term strategic plans and annual operating plans and budgets recommended by management. Board consideration and approval is also required for all material contracts, business transactions and all debt and equity financing proposals. The independent directors on the Board are also responsible for approving senior executive compensation and retirement plans.



The Board delegates to management, through the offices of Chief Executive Officer and Chief Financial Officer, responsibility for meeting defined corporate objectives, implementing approved strategic and operating plans, carrying on the Companys business in the ordinary course, managing the Companys cash flow, evaluating new business opportunities, recruiting staff and complying with applicable regulatory requirements. The Board also looks to management to furnish recommendations respecting corporate objectives, long-term strategic plans and annual operating plans.





ITEM 16C. PRINCIPAL ACCOUNTING FEES AND SERVICES



External Auditor Service Fees



During the financial year ending June 30, 2015, the Companys auditors were Smythe Ratcliffe LLP. The following table sets out the aggregate fees billed by MNP LLP during the prior years.  The Company anticipates fiscal year 2015 fees to be about $20,000.



|     |            |                       |             |                  
|---- | ---------- | --------------------- | ----------- | -----------------
|Year | Audit Fees | Audit Related Fees(1) | Tax Fees(2) | All Other Fees(3)
|2014 | $15,000    | $Nil                  | $750        | $Nil (0%)        
|2013 | $16,000    | $Nil                  | $800        | $Nil (0%)        



(1)Related to assurance and related services that are reasonably related to the performance of the audit and review of the Companys financial statements and not included in the amounts noted underAudit Fees.

(2)Related to fees billed by the Companys external auditor for professional services rendered for tax compliance, tax advice and tax planning.

(3)Related to other accounting services that is excluded from theAudit Fees.



Pre-Approval Policies and Procedures



The Audit Committee has adopted an Audit Committee Charter (Exhibit 11) governing the provision of audit and non-audit services by the external auditor. This charter requires the Audit Committee to:



1.

recommend to the Board of Directors the external auditor to be nominated by the Board of Directors and the compensation of the external auditor (see 4.1.(a) and (b), Exhibit 11) and



2.

to pre-approve all non-audit services provided by the external auditor (see 4.1.(n), Exhibit 11).



ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

---Not applicable---



ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE COMPANY/AFFILIATED PURCHASERS

---Not Applicable---



45



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PART III



ITEM 17. FINANCIAL STATEMENTS



The Company's financial statements are stated in Canadian Dollars (CDN$) and are prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and interpretations of the International Financial Reporting Interpretations Committee (IFRIC).



The financial statements as required under ITEM #17 are attached hereto and found immediately following the text of this Annual Report. The audit report of Smythe Ratcliffe LLP, Chartered Accountants, is included herein immediately preceding the audited financial statements.



Audited Financial Statements

-- included after exhibit list

ITEM 18. FINANCIAL STATEMENTS



The Company has elected to provide financial statements pursuant to ITEM #17.







ITEM 19. EXHIBITS



The financial statements thereto as required under ITEM #17 are attached hereto and found immediately following the text of this Annual Report. The report of the Companys independent auditors for the audited financial statements are included herein immediately preceding the audited financial statements.



(A) Financial information



(i)

Audited Consolidated Financial Statements for the fiscal years ending June 30, 2015 and 2014.

1.

Auditors Report, dated September 29, 2015.

2.

Consolidated Statements of Financial Position at June 30, 2015, 2014, and 2013.

3.

Consolidated Statements of Comprehensive Loss for the fiscal years ending June 30, 2015 and 2014.

4.

Consolidated Statements of Changes in Equity for the fiscal years ended June 30, 2015 and 2014.

5.

Consolidated Statements of Cash Flows for the fiscal years ended June 30, 2015 and 2014.

6.

Notes to Consolidated Financial Statements.





46



---







(B)  Index to Exhibits:



|                                                                                                                                                                              
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                              
|1. Articles of Incorporation  Amendment to Articles of Incorporation, Name Change, July 28, 2014, filed with Form 6-K, November 18, 2014                                     
|2.  Instruments defining the rights of holders  N/A                                                                                                                          
|3.  Voting trust agreements  N/A                                                                                                                                             
|4.  Material contracts  N/A                                                                                                                                                  
|5.  List of Foreign Patents
China: ZL02829642.7                                                                                                                               
|6.  Calculation of earnings per share  N/A                                                                                                                                   
|7.  Explanation of calculation of ratios  N/A                                                                                                                                
|8.  List of Subsidiaries  Vanc Marine PharmaceuticalsInc., Vise Healthcare Inc.                                                                                              
|9.  Statement pursuant to the instructions to Item 8.A.4, regarding the financial statements filed in registration statements for initial public offerings of securities  N/A
|10.  Notice required by Rule 104 of Regulation BTR  N/A                                                                                                                      
|11.  Code of Ethics  Filed with Form 20F, February 27, 2014                                                                                                                  
|12.1  Certification of Chief Executive Officer pursuant to Section 302 of SarbanesOxley Act of 2002                                                                          
|12.2  Certification of Chief Financial Officer pursuant to Section 302 of SarbanesOxley Act of 2002                                                                          
|13.1  Certification of Chief Executive Officer pursuant to Section 906 of SarbanesOxley Act of 2002                                                                          
|13.2  Certification of Chief Financial Officer pursuant to Section 906 of SarbanesOxley Act of 2002                                                                          
|14.  Legal opinion  N/A                                                                                                                                                      
|15.  Additional Information  Documents pertaining to the Change of Auditors - previously filed with the 6K Form as of March 6, 2015.                                         
|16.  Mine Safety Disclosures  N/A                                                                                                                                            









47



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Vanc Pharmaceuticals Inc.



Consolidated Financial Statements



For The Years Ended June 30, 2015 and 2014



(Expressed In Canadian Dollars)











---





[vanc20fnov1215002.gif]



Independent Auditors Report



To the Shareholders of Vanc Pharmaceuticals Inc.:



We have audited the accompanying consolidated financial statements of Vanc Pharmaceuticals Inc. and its subsidiaries, which comprise the consolidated statements of financial position as at June 30, 2014 and 2013, and the consolidated statements of loss and comprehensive loss, changes in equity and cash flows for the years then ended, and a summary of significant accounting policies and other explanatory information.



Managements Responsibility for the consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IASB) , and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.



Auditors Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards and the standards established by the Public Company Accounting Oversight Board (PCAOB) (United States). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.



An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entitys preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entitys internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.



We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion.



Opinion

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Vanc Pharmaceuticals Inc. and its subsidiaries as at June 30, 2014 and 2013, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards as issued by the IASB.



Emphasis of Matter

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring losses from operations and has accumulated deficit that raise substantial doubt about its ability to continue as a going concern. Managements plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.



Vancouver, BC

[vanc20fnov1215004.gif]

October 28, 2014

Vancouver, BC Chartered Accountants

[vanc20fnov1215006.gif]







---

[vanc20fnov1215008.gif]



INDEPENDENT AUDITORS REPORT



TO THE SHAREHOLDERS OF VANC PHARMACEUTICALS INC.



We have audited the accompanying consolidated financial statements of Vanc Pharmaceuticals Inc., which comprise the consolidated statement of financial position as at June 30, 2015, and the consolidated statements of comprehensive loss, changes in equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.



Management's Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards, as issued by the International Accounting Standards Board, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.



Auditors Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.



An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.



We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.



Opinion

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Vanc Pharmaceuticals Inc. as at June 30, 2015, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards, as issued by the International Accounting Standards Board.



Emphasis of Matter

Without qualifying our opinion, we draw attention to note 1 in the consolidated financial statements, which describes matters and conditions that indicate the existence of material uncertainties that may cast substantial doubt about the Companys ability to continue as a going concern.



Other Matter

The consolidated financial statements of Vanc Pharmaceuticals Inc. as at June 30, 2014 and 2013 and for the years then ended were audited by another auditor who expressed an unmodified opinion on those statements on October 28, 2014.



[vanc20fnov1215010.gif]

Chartered Professional Accountants

Vancouver, Canada

September 29, 2015



[vanc20fnov1215012.gif]



50



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Vanc Pharmaceuticals Inc.

Consolidated Statements of Financial Position

(Expressed In Canadian Dollars)





|                                                              |               |               |             
|------------------------------------------------------------- | ------------- | ------------- | ------------
|As at                                                         | June 30, 2015 | June 30, 2014 | July 1, 2013
|                                                              |               |               | (Note 19)   
|ASSETS                                                        |               |               |             
|                                                              |               |               |             
|Current Assets                                                |               |               |             
|Cash and cash equivalents                                     | $
2,722,777   | $
295,377     | $
619,296   
|Accounts receivable (Note 4)                                  | 26,542        | 15,629        | 11,695      
|Prepaids and deposits (Note 5)                                | 387,119       | 2,500         | -           
|Inventory (Note 6)                                            | 356,289       | -             | -           
|                                                              | 3,492,727     | 313,506       | 630,991     
|                                                              |               |               |             
|Equipment(Note 7)                                             | 47,858        | 30,912        | -           
|Intellectual Property (Note 8)                                | -             | 476,000       | 170,000     
|Total Assets                                                  | $
3,540,585   | $
820,418     | $
800,991   
|                                                              |               |               |             
|                                                              |               |               |             
|LIABILITIES                                                   |               |               |             
|                                                              |               |               |             
|Current Liabilities                                           |               |               |             
|Accounts payable and accrued liabilities (Notes 9, 12 and 13) | $
187,124     | $
124,343     | $
215,785   
|Loans                                                         | -             | -             | 35,907      
|Current portion of promissory notes (Note 13)                 | -             | 32,978        | 83,167      
|                                                              | 187,124       | 157,321       | 334,859     
|                                                              |               |               |             
|Promissory Notes                                              | -             | -             | 29,444      
|                                                              | 187,124       | 157,321       | 364,303     
|                                                              |               |               |             
|SHAREHOLDERS EQUITY                                          |               |               |             
|                                                              |               |               |             
|Share Capital (Notes 11 and 19)                               | 15,262,357    | 10,995,282    | 9,573,849   
|Share Subscriptions                                           | -             | -             | 800,000     
|Reserves (Notes 11 and 19)                                    | 2,641,678     | 2,017,741     | 1,678,819   
|Deficit                                                       | (14,550,574)  | (12,349,926)  | (11,615,980)
|                                                              | 3,353,461     | 663,097       | 436,688     
|Total Liabilities and Shareholders Equity                    | $
3,540,585   | $
820,418     | $
800,991   
|                                                              |               |               |             



*See accompanying notes to the consolidated financial statements







Approved and authorized on Behalf of the Board of Directors on September 29, 2015.



Eugene Beukman

Amandeep Parmar



Eugene Beukman, Director

Amandeep Parmar, CFO & Director





51



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Vanc Pharmaceuticals Inc.

Consolidated Statements of Comprehensive Loss

For The Years Ended June 30, 2015 and 2014

(Expressed In Canadian Dollars)





|                                                     |               |               |   |           
|---------------------------------------------------- | ------------- | ------------- | - | ----------
|                                                     | June 30, 2015 | June 30, 2014
|                                                     |               |               |   |           
|                                                     |               |               |   |           
|Revenue                                              | $             | 5,713         | $ | -         
|Cost of Goods Sold                                   |               | 2,491         |   | -         
|                                                     |               |               |   |           
|Gross Profit                                         |               | 3,222         |   | -         
|                                                     |               |               |   |           
|Expenses                                             |               |               |   |           
|Amortization                                         |               | 13,900        |   | 948       
|Bank service charges                                 |               | 1,061         |   | 2,631     
|Advertising and promotion                            |               | 9,858         |   | 501       
|Filing fees and transfer agent fees                  |               | 53,714        |   | 39,567    
|Foreign exchange                                     |               | 1,337         |   | 759       
|Investor relations                                   |               | 54,334        |   | 32,500    
|Legal and audit                                      |               | 37,806        |   | 48,862    
|Management and consulting fees (Note 13)             |               | 362,727       |   | 254,337   
|Office and miscellaneous                             |               | 51,357        |   | 28,244    
|Product registration and development                 |               | 56,143        |   | 5,156     
|Rent (Note 13)                                       |               | 48,982        |   | 18,530    
|Payroll                                              |               | 54,665        |   | -         
|Insurance                                            |               | 18,366        |   | 5,561     
|Research                                             |               | -             |   | 29,573    
|Seminars                                             |               | 23,084        |   | -         
|Share-based payments (Notes 11(b) and 13)            |               | 915,211       |   | 291,355   
|Travel                                               |               | 30,441        |   | 16,109    
|                                                     |               |               |   |           
|Interest income                                      |               | (126)         |   | -         
|Other income                                         |               | (4,990)       |   | -         
|Impairment of intellectual property (Note 8)         |               | 476,000       |   | -         
|Net gain on liabilities settled (Note 12)            |               | -             |   | (40,687)  
|                                                     |               |               |   |           
|                                                     |               |               |   |           
|Net Loss and Comprehensive Loss for the Year         | $             |               | $ |           
|                                                     |               |               |   |           
|                                                     |               |               |   |           
|Basic and Diluted Loss Per Share                     | $             | (0.05)        | $ | (0.03)    
|Weighted Average Number of Common Shares Outstanding |               | 47,272,866    |   | 26,107,760
|                                                     |               |               |   |           



*See accompanying notes to the consolidated financial statements



52



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Vanc Pharmaceuticals Inc.

Consolidated Statements of Comprehensive Loss

For The Years Ended June 30, 2015 and 2014

(Expressed In Canadian Dollars)





|                                |                  |               |                       |                 |                |              |            
|------------------------------- | ---------------- | ------------- | --------------------- | --------------- | -------------- | ------------ | -----------
|                                | Number
of Shares | Share
Capital | Share Subscript-
ions | Warrant
Reserve | Option
Reserve | Deficit      | Total      
|                                |                  | $             | $                     | $               | $              | $            | $          
|Balance, July 1, 2013 (Note 19) | 21,617,074       | 9,573,849     | 800,000               | 38,205          | 1,640,614      | (11,615,980) | 436,688    
|                                |                  |               |                       |                 |                |              |            
|Issued during year (Note 11)    |                  |               |                       |                 |                |              |            
|For cash                        | 3,750,000        | 375,000       | -                     | -               | -              | -            | 375,000    
|For assets                      | 3,400,000        | 306,000       | -                     | -               | -              | -            | 306,000    
|For share subscriptions         | 8,000,000        | 800,000       | (800,000)             | -               | -              | -            | -          
|Share issue costs               | -                | (59,567)      | -                     | 47,567          | -              | -            | (12,000)   
|Share-based payments            | -                | -             | -                     | -               | 291,355        | -            | 291,355    
|Net loss                        | -                | -             | -                     | -               | -              | (733,946)    | (733,946)  
|                                |                  |               |                       |                 |                |              |            
|Balance, June 30, 2014          |                  |               | -                     |                 |                |              |            
|                                |                  |               |                       |                 |                |              |            
|Issued during year (Note 11)    |                  |               |                       |                 |                |              |            
|For cash                        | 7,607,332        | 1,141,100     | -                     | -               | -              | -            | 1,141,100  
|For exercise of options         | 1,625,000        | 531,060       | -                     | -               | (274,560)      | -            | 256,500    
|For exercise of warrants        | 9,219,710        | 2,957,245     | -                     | (84,267)        | -              | -            | 2,872,978  
|Share issue costs               | -                | (362,330)     | -                     | 67,553          | -              | -            | (294,777)  
|Share-based payments            | -                | -             | -                     | -               | 915,211        | -            | 915,211    
|Net loss                        | -                | -             | -                     | -               | -              | (2,200,648)  | (2,200,648)
|                                |                  |               |                       |                 |                |              |            
|Balance, June 30, 2015          |                  |               | -                     |                 |                |              |            
|                                |                  |               |                       |                 |                |              |            
|                                |                  |               |                       |                 |                |              |            











*See accompanying notes to the consolidated financial statements







53



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Vanc Pharmaceuticals Inc.

Consolidated Statements of Cash Flows

For The Years Ended June 30, 2015 and 2014

(Expressed In Canadian Dollars)





|                                                    |               |               |   |          
|--------------------------------------------------- | ------------- | ------------- | - | ---------
|                                                    | June 30, 2015 | June 30, 2014
|                                                    |               |               |   |          
|Operating Activities:                               |               |               |   |          
|Net loss                                            | $             | (2,200,648)   | $ | (733,946)
|Items Not Involving Cash                            |               |               |   |          
|Amortization                                        |               | 13,900        |   | 948      
|Impairment of intellectual property                 |               | 476,000       |   | -        
|Gain on settlement of liabilities                   |               | -             |   | (40,687) 
|Share-based payments                                |               | 915,211       |   | 291,355  
|                                                    |               |               |   |          
|Changes in Non-Cash Working Capital Items           |               |               |   |          
|Accounts receivable                                 |               | (10,913)      |   | (3,934)  
|Prepaids and deposits                               |               | (384,619)     |   | (2,500)  
|Inventory                                           |               | (356,289)     |   | -        
|Accounts payable and accrued liabilities            |               | 62,781        |   | (50,755) 
|Net cash used in operating activities               |               |               |   |          
|                                                    |               |               |   |          
|Investing Activities:                               |               |               |   |          
|Equipment                                           |               | (30,846)      |   | (31,860) 
|Net cash used in investing activities               |               | (30,846)      |   | (31,860) 
|                                                    |               |               |   |          
|Financing Activities:                               |               |               |   |          
|Proceeds from private placement                     |               | 1,141,100     |   | 375,000  
|Proceeds from exercise of options                   |               | 256,500       |   | -        
|Proceeds from exercise of warrants                  |               | 2,872,978     |   | -        
|Share issue costs                                   |               | (294,777)     |   | (12,000) 
|Repayment of promissory notes                       |               | (32,978)      |   | (79,633) 
|Short term loans                                    |               | -             |   | (35,907) 
|Net cash provided by financing activities           |               |               |   |          
|                                                    |               |               |   |          
|Increase (Decrease) in Cash and Cash Equivalents    |               | 2,427,400     |   |          
|Cash and Cash Equivalents, Beginning of Year        |               | 295,377       |   | 619,296  
|Cash and Cash Equivalents, End of Year              | $             |               | $ |          
|                                                    |               |               |   |          
|Cash and Cash Equivalents Consist of:               |               |               |   |          
|Cash                                                | $             | 711,277       | $ | 283,877  
|Guaranteed investment certificates                  |               | 2,011,500     |   | 11,500   
|Cash and cash equivalents                           | $             |               | $ |          
|                                                    |               |               |   |          
|Transactions Not Involving Cash                     |               |               |   |          
|Shares issued for intellectual property             | $             | -             | $ | 306,000  
|Shares issued for subscriptions previously received | $             | -             | $ | 800,000  
|                                                    |               |               |   |          
|                                                    |               |               |   |          











*See accompanying notes to the consolidated financial statements



54



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1.

NATURE OF OPERATIONS AND GOING CONCERN



Vanc Pharmaceuticals Inc. (the Company) was incorporated under the Company Act of British Columbia on May 30, 2000, and is listed on the TSX Venture Exchange (the Exchange) as NPH and is quoted on the OTC as NUVPF. The address of the Companys corporate office and principal place of business is located at 615  800 West Pender Street, Vancouver, British Columbia, V6C 2V6.



The Companys main business activity until October 31, 2011 was the development, production and marketing of infection control agent products, principally a product marketed as T36®. Effective November 26, 2003, the name of the Company was changed from Duft Biotech Capital Ltd. to ALDA Pharmaceuticals Corp. During the year ended June 30, 2012, the Company granted Canadian manufacturing and marketing rights for certain T36® products to a former officer of the Company. On August 12, 2013, the Company again changed its name to Nuva Pharmaceuticals Inc. and subsequent to the year ended June 30, 2014 the Company changed its name to Vanc Pharmaceuticals Inc.



The Company is now focused on the manufacture and distribution of generic and over-the-counter (OTC) pharmaceuticals.



These consolidated financial statements have been prepared on the basis of accounting principles applicable to a going concern, which assumes that the Company will continue in operations for the foreseeable future and be able to realize assets and satisfy liabilities in the normal course of business. The Company has always experienced operating losses and negative operating cash flows. Operations have been funded by the issuance of share capital. These conditions may cast substantial doubt on the Companys ability to continue as a going concern. The continuation of the Company as a going concern is dependent upon its ability to generate revenue from its operations, which commenced in the fourth quarter of fiscal year 2015 or raise additional financing to cover ongoing cash requirements.



These consolidated financial statements do not reflect any adjustments, which could be material, to the carrying values of assets and liabilities, which may be required should the Company be unable to continue as a going concern.



|                   |                 |                
|------------------ | --------------- | ---------------
|                   | June 30, 2015
$ | June 30, 2014
$
|Comprehensive Loss | (2,200,648)     | (733,946)      
|Deficit            | (14,550,574)    | (12,349,926)   
|Working Capital    | 3,305,603       | 156,185        





2.

STATEMENT OF COMPLIANCE



The consolidated financial statements of the Company comply with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB).



These consolidated financial statements were approved and authorized for issue by the Board of Directors of the Company on September 29, 2015.























55



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3.

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES



Basis of preparation

The consolidated financial statements of the Company have been prepared on an accrual basis and are based on historical costs, modified where applicable. The consolidated financial statements are presented in Canadian dollars unless otherwise noted.



Significant estimates, judgments and assumptions

The preparation of consolidated financial statements in accordance with IFRS requires the Companys management to make estimates, judgments and assumptions that affect amounts reported in the consolidated financial statements and accompanying notes to the consolidated financial statements. The Companys management reviews these estimates and underlying judgments and assumptions on an ongoing basis, based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revisions to estimates are adjusted for prospectively in the year in which the estimates are revised.



Significant estimates used in applying accounting policies that have the most significant effect on the amounts recognized in the consolidated financial statements are as follows:



i)

Inventories



The Company estimates the net realizable values of inventories, taking into account the most reliable evidence available at each reporting date. The future realization of these inventories may be affected by regulatory changes or other market-driven changes that may reduce future selling prices. A change to these assumptions could impact the Companys inventory valuation and gross margin.



ii)

Recoverability of the carrying value of intangible assets



The Company is required to review the carrying value of its intangible assets for potential impairment. Impairment is indicated if the carrying value of the Companys intangible assets exceeds its recoverable value. If impairment is indicated, the amount by which the carrying value of intangible assets exceeds the estimated fair value is charged to the consolidated statement of comprehensive loss.



Evaluating the recoverability requires judgments in determining whether future economic benefits from sale or otherwise are likely. Evaluation may be more complex where activities have not reached a stage that permits a reasonable assessment of the viability of the asset. Management must make certain estimates and assumptions about future events or circumstances including, but not limited to, the interpretation of marketing and sales data, as well as the Companys financial ability to continue marketing and sales activities and operations.



iii)

Useful lives of depreciable assets



The Company reviews its estimate of the useful lives of depreciable assets at each reporting date, based on the expected utilization of the assets. Uncertainties in these estimates relate to technical obsolescence that may change the utilization of certain equipment.



iv)

Share-based payments



The Company grants share-based awards to certain directors, officers, employees, consultants and other eligible persons. For equity-settled awards, the fair value is charged to the consolidated statement of comprehensive loss and credited to the reserves over the vesting period using the graded vesting method, after adjusting for the estimated number of awards that are expected to vest.









56



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3.

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)



Significant estimates, judgments and assumptions (continued)



iv)

Share-based payments (continued)



The fair value of equity-settled awards is determined at the date of the grant using the Black-Scholes option pricing model. For equity-settled awards to non-employees, the fair value is measured at each vesting date. The estimate of warrant and option valuation also requires determining the most appropriate inputs to the valuation model, including the volatility, expected life of warrants and options, risk free interest rate and dividend yield. Changes in these assumptions can materially affect the fair value estimate, and therefore the existing models do not necessarily provide a reliable measure of the fair value of the Companys options and warrants issued.



Management must also make significant judgments or assessments as to how financial assets and liabilities are categorized.



Significant judgments used in applying accounting policies that have the most significant effect on the amounts recognized in the consolidated financial statements are as follows:



i)

Tax interpretations, regulations and legislation in the various jurisdictions the Company operates are subject to change. The determination of income tax expense and deferred tax involves judgment and estimates as to the future taxable earnings, expected timing of reversals of deferred tax assets and liabilities, and interpretations of laws in the countries in which the Company operates. The Company is subject to assessments by tax authorities who may interpret the tax law differently. Changes in these estimates may materially affect the final amount of deferred taxes or the timing of tax payments.



Consolidation

These consolidated financial statements include the accounts of the Company and its controlled wholly-owned subsidiaries, Vanc Marine Pharmaceuticals Inc. and Vise Healthcare Inc. All significant intercompany balances and transactions have been eliminated on consolidation.



Determination of functional currency

The functional currency of the Company is measured using the currency of the primary economic environment in which that the Company operates. The Company determines the functional currency through an analysis of several indicators such as expenses and cash flow, financing activities, retention of operating cash flows and frequency of transactions with the reporting entity. The Companys functional currency is the Canadian dollar.



Transactions and balances

Transactions denominated in foreign currencies are translated into the relevant functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the consolidated statements of comprehensive loss.











57



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3.

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)



Share-based payments

The Company operates an incentive share purchase option plan. Share-based payments to employees are measured at the fair value of the instruments issued and amortized over the vesting periods. Share-based payments to non-employees are measured at the fair value of goods or services received or the fair value of the equity instruments issued, if it is determined the fair value of the goods or services cannot be reliably measured, and are recorded at the date the goods or services are received. The corresponding amount is recorded to the option reserve. The fair value of options is determined using the Black-Scholes option pricing model, which incorporates all market vesting conditions. The number of shares and options expected to vest is reviewed and adjusted at the end of each reporting period such that the amount recognized for services received as consideration for the equity instruments granted shall be based on the number of equity instruments that eventually vest.



Share capital

Proceeds from the exercise of stock options and warrants are recorded as share capital in the amount for which the option or warrant enabled the holder to purchase a share in the Company. Any previously recorded share-based payment included in the reserves account is transferred to share capital on exercise of options. Share capital issued for non-monetary consideration is valued at the closing market price at the date of issuance. The proceeds from issuance of units are allocated between common shares and warrants based on the residual method. Under this method, the proceeds are allocated first to share capital based on the fair value of the common shares at the time the units are priced and any residual value is allocated to the warrants reserve. Consideration received for the exercise of warrants is recorded in share capital, and any related amount recorded in warrants reserve is transferred to share capital.



Loss per share

Basic loss per share is calculated by dividing the loss attributable to common shareholders by the weighted average number of common shares outstanding in the year. For all years presented, the loss attributable to common shareholders equals the reported loss attributable to owners of the Company. Diluted loss per share is calculated by the treasury stock method. Under the treasury stock method, the weighted average number of common shares outstanding for the calculation of diluted loss per share assumes that the proceeds to be received on the exercise of dilutive share options and warrants are used to repurchase common shares at the average market price during the year.



Income taxes

Income tax expense, consisting of current and deferred tax expense, is recognized in the consolidated statements of comprehensive loss. Current tax expense is the expected tax payable on the taxable income for the period, using tax rates enacted or substantively enacted at period-end, adjusted for amendments to tax payable with regard to previous years.



Deferred tax assets and liabilities and the related deferred income tax expense or recovery are recognized for deferred tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using the enacted or substantively enacted tax rates expected to apply when the asset is realized or the liability settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income (loss) in the period that substantive enactment occurs.



A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the asset can be utilized. To the extent that the Company does not consider it probable that a deferred tax asset will be recovered, the deferred tax asset is reduced. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.











58



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3.

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)



Cash equivalents

Cash equivalents include short-term guaranteed investment certificates readily convertible into a known amount of cash, which is subject to insignificant change in value.



Inventory

Inventories consist entirely of raw materials comprising the ingredients used to manufacture OTC pharmaceuticals, as well as the packaging for these products, and finished goods comprising Canadian generic pharmaceuticals. All inventories are recorded at the lower of cost on a weighted average basis and net realizable value. The stated value of all inventories includes purchase, shipping and freight, quality control testing, inventory management and warehousing fees. A regular review is undertaken to determine the extent of any provision for obsolescence.



Equipment

Equipment is stated at historical cost less accumulated amortization and accumulated impairment losses.



Subsequent costs are included in the assets carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to the consolidated statement of comprehensive loss during the financial year in which they are incurred.



Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognized in the consolidated statement of comprehensive loss.



Amortization is calculated on a declining balance method over their estimated useful lives. The Companys equipment, which consists of computers, furniture, equipment and leasehold improvements, is amortized at 30%.



Intangible assets

The carrying values of intangible assets, which are determined to have a finite useful life, are amortized on a systematic basis over the estimated life of the assets. Intangible assets are subject to an impairment test on an annual basis, based on a comparison of the fair value of the intangible asset to its carrying value. Any excess of the carrying amount over the fair value of the intangible asset is charged to earnings in the year occurred.



Revenue recognition

Revenues are recognized when the risks and rewards of ownership have passed to the customer based on the terms of the sale, collection of the relevant receivable is probable, evidence of an arrangement exists and the sales price is fixed or determinable. Risks and rewards of ownership pass to the customer upon successful completion of shipment of pharmaceuticals. Provisions for sales discounts and returns are made on a per sale basis.



Financial instruments

The Company classifies its financial instruments in the following categories: at fair value through profit or loss, loans and receivables, held-to-maturity investments, available-for-sale and other financial liabilities. The classification depends on the purpose for which the financial instruments were acquired. Management determines the classification of its financial instruments at initial recognition. All financial assets and liabilities are recorded at fair value at initial recognition.













59



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3.

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)



Financial instruments (continued)

Financial assets are classified at fair value through profit or loss when they are either held for trading for the purpose of short-term profit taking, derivatives not held for hedging purposes, or when they are designated as such to avoid an accounting mismatch or to enable performance evaluation where a group of financial assets is managed by key management personnel on a fair value basis in accordance with a documented risk management or investment strategy. Such assets are subsequently measured at fair value with changes in carrying value being included in profit or loss.



Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortized cost. They are included in current assets, except for maturities greater than twelve months after the end of the reporting period. These are classified as non-current assets.



Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments, and it is the Companys intention to hold these investments to maturity. They are subsequently measured at amortized cost. Held-to-maturity investments are included in non-current assets, except for those that are expected to mature within twelve months after the end of the reporting period.



Available-for-sale financial assets are non-derivative financial assets that are designated as available-for-sale or are not suitable to be classified as financial assets at fair value through profit or loss, loans and receivables or held-to maturity investments and are subsequently measured at fair value. These are included in current assets to the extent they are expected to be realized within twelve months after the end of the reporting period. Unrealized gains and losses are recognized in other comprehensive income (loss), except for impairment losses and foreign exchange gains and losses on monetary financial assets.



Other financial liabilities (excluding financial guarantees) are subsequently measured at amortized cost.



Regular purchases and sales of financial assets are recognized on the trade-date  the date on which the Company commits to purchase the asset. Financial assets are derecognized when the rights to receive cash flows from the investments have expired or have been transferred and the Company has transferred substantially all risks and rewards of ownership.



At each reporting date, the Company assesses whether there is objective evidence that a financial instrument has been impaired. In the case of available-for-sale financial instruments, a significant and prolonged decline in the value of the instrument is considered to determine whether an impairment has arisen.



The Company does not have any derivative financial assets and liabilities.



The Company classifies its financial instruments as follows:



Cash and equivalents

Fair value through profit or loss

Accounts receivable

Loans and receivables

Accounts payable and accrued liabilities

Other financial liability

Promissory notes

Other financial liability

Loans

Other financial liability





60



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3.

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)



Changes in significant accounting policies and adoption of new accounting standards

The Company has applied the following standards in these consolidated financial statements, which were effective for the Company beginning July 1, 2014:



Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32)



Amends IAS 32 Financial Instrument: Presentationto clarify certain aspects because of diversity in application of the requirements on offsetting, focused on four main areas:



·

The meaning of currently has a legally enforceable right of set-off

·

The application of simultaneous realization and settlement

·

The offsetting of collateral amounts

·

The unit of account for applying the offsetting requirements



Recoverable Amount Disclosures for Non-Financial Assets (Amendments to IAS 36)



Amends IAS 36 Impairment of Assets to reduce the circumstances in which the recoverable amount of assets or cash-generating units is required to be disclosed, clarify the disclosures required, and to introduce an explicit requirement to disclose the discount rate used in determining impairment (or reversals) where recoverable amount (based on fair value less costs of disposal) is determined using a present value technique. The application of this standard did not have a significant impact on the Companys consolidated financial statements.



Change in accounting policy



During the year ended June 30, 2015, the Company changed its accounting policy over the allocation of fair value of the proceeds of units in accordance with IAS 32 Financial Instruments: Presentation. The Company uses the residual method and now, under this method, proceeds are allocated first to share capital based on the fair value of the common shares at the time the units are priced and any residual value is allocated to the warrants reserve. Previously, the Company had first measured the fair value of the warrants using the Black-Scholes option pricing model with the difference between the fair value of the warrants and the proceeds received being allocated to the common shares.



This change has been applied retrospectively. An adjustment to remove any previously recorded fair value allocated to warrants has been recorded as a reduction to the warrant reserve and recorded as additional share capital on the consolidated statements of financial position (Note 19).



Future accounting policy change issued, but not yet effective

IFRS 9 Financial Instruments



IFRS 9 was issued by the IASB in October 2010. It incorporates revised requirements for the classification and measurement of financial liabilities and carrying over the existing derecognition requirements from IAS 39 Financial Instruments: Recognition and measurement.The revised financial liability provisions maintain the existing amortized cost measurement basis for more liabilities. New requirements apply where an entity chooses to measure a liability at fair value through profit or loss; in these cases, the portion of the change in fair value related to changes in the entitys own credit risk is presented in other comprehensive income rather than within profit or loss. IFRS 9 is effective for annual periods beginning on or after July 1, 2018. The impact of IFRS 9 on the Companys consolidated financial statements has not yet been determined.



Pronouncements that are not applicable or that do not have a significant impact to the Company have not been included in these consolidated financial statements.

















61



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4.

ACCOUNTS RECEIVABLE



At June 30, 2015 and 2014, the Companys accounts receivable consists of the following:



|                  |                 |                
|----------------- | --------------- | ---------------
|                  | June 30, 2015
$ | June 30, 2014
$
|Trade receivables | 3,979           | 1,428          
|GST receivable    | 22,563          | 14,201         
|                  | 26,542          | 15,629         





5.

PREPAIDS AND DEPOSITS



Included in prepaids and deposits at June 30, 2015 are deposits totaling $342,740 (2014 - $nil) for inventory received subsequent to year-end.





6.

INVENTORY



At June 30, 2015 and 2014, the Companys inventory consists of the following:



|               |                 |                
|-------------- | --------------- | ---------------
|               | June 30, 2015
$ | June 30, 2014
$
|Raw materials  | 30,829          | -              
|Finished goods | 325,460         | -              
|               | 356,289         | -              





7.

EQUIPMENT



|                       |           |               |              |         
|---------------------- | --------- | ------------- | ------------ | --------
|                       |           | Furniture and | Leasehold    |         
|                       | Computers | Equipment     | Improvements | Total   
|Cost                   |           |               |              |         
|Balance, July 1, 2013  | $
-       | $
-           | $
-          | $
-     
|Additions              | 1,702     | 5,976         | 24,182       | 31,860  
|Balance, June 30, 2014 | 1,702     | 5,976         | 24,182       | 31,860  
|Additions              | -         | 30,846        | -            | 30,846  
|Balance, June 30, 2015 | $
1,702   | $
36,822      | $
24,182     | $
62,706
|                       |           |               |              |         
|Amortization           |           |               |              |         
|Balance, July 1, 2013  | $
-       | $
-           | $
-          | $
-     
|Depreciation           | 116       | 228           | 604          | 948     
|Balance, June 30, 2014 | 116       | 228           | 604          | 948     
|Depreciation           | 476       | 6,351         | 7,073        | 13,900  
|Balance, June 30, 2015 | $
592     | $
6,579       | $
7,677      | $
14,848
|                       |           |               |              |         
|Carrying value         |           |               |              |         
|Balance, June 30, 2014 | $
1,586   | $
5,748       | $
23,578     | $
30,912
|Balance, June 30, 2015 | $
1,110   | $
30,243      | $
16,505     | $
47,858









62



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8.

INTELLECTUAL PROPERTY



|                    |                 |                
|------------------- | --------------- | ---------------
|                    | June 30, 2015
$ | June 30, 2014
$
|Pedia -Safe license | 170,000         | 170,000        
|FerroHeme           | 306,000         | 306,000        
|Impairment          | (476,000)       | -              
|                    | -               | 476,000        



On September 5, 2013, the Company entered into a license agreement with Canagen Pharmaceuticals Inc. (Canagen) of Richmond, British Columbia. The agreement provided the Company with the global sales and marketing rights, and the right to make or have made FerroHeme Iron supplement. As consideration, the Company issued 3,400,000 common shares at a price of $0.09 per share. This transaction did not result in a change of control or in the creation of new insiders.



On September 12, 2012, the Company entered into a license agreement with Canagen. The agreement provided the Company with the global sales and marketing rights, except for China and India, and the right to make or have made Pedia-Safe Polyvitamin Drops. The agreement is effective for 99 years from the effective date of signing of the agreement. As consideration, the Company issued 3,400,000 common shares at a deemed price of $0.05 per share. This transaction did not result in a change of control or in the creation of new insiders.



As at June 30, 2015, management has decided to discontinue efforts related to the Pedia-Safe Polyvitamin Drops and FerroHeme Iron supplements for the foreseeable future, as there have been significant changes in the competitive landscape for these products in Canada. The Company is continuing to focus on the manufacture and distribution of generic and OTC pharmaceuticals. Accordingly, the Company fully impaired the carrying value of intangible assets to $nil at June 30, 2015.





9.

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES



Accounts payable and accrued liabilities consist of:



|                       |                 |                
|---------------------- | --------------- | ---------------
|                       | June 30, 2015
$ | June 30, 2014
$
|Trade accounts payable | 172,124         | 110,343        
|Accrued liabilities    | 15,000          | 14,000         
|                       | 187,124         | 124,343        





63



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10.

ESCROW SHARES



During the year ended June 30, 2013, the Company entered into a sponsorship agreement with the Canadian Olympic Committee.



On September 12, 2012, the Company settled the remaining liability through the issuance of 10,687,500 shares of common stock measured at a value of $0.05 per share. These shares are subject to resale restrictions equivalent to Exchange Tier 2 Value Security Escrow Agreement, which allows a scheduled release of shares from escrow over a three year period as follows:



Escrow schedule



|                  |                            
|----------------- | ---------------------------
|Release Date      | To Be Released             
|August 30, 2012   | 10% or 1,068,750 securities
|February 28, 2013 | 15% or 1,603,125 securities
|August 30, 2013   | 15% or 1,603,125 securities
|February 28, 2014 | 15% or 1,603,125 securities
|August 30, 2014   | 15% or 1,603,125 securities
|February 28, 2015 | 15% or 1,603,125 securities
|August 30, 2015   | 15% or 1,603,125 securities
|Total             | 10,687,500 securities      



As of June 30, 2015, there are 1,603,125 shares held in escrow.





11.

SHAREHOLDERS EQUITY



a)

Authorized share capital



Authorized: Unlimited number of common shares without par value.



Issued share capital



2015 private placements



On December 10, 2014, the Company closed a non-brokered private placement of 7,607,332 units at a price of $0.15 per unit for gross proceeds of $1,141,100. Each unit consists of one common share and one-half of one transferrable share purchase warrant. Each warrant entitles the holder thereof to purchase one additional common share on or before December 10, 2015 at a price of $0.25. Finders fees of $91,287 cash were paid in addition to the issuance of 608,586 warrants. The fair value of the warrants issued to agents was estimated using the Black-Scholes option pricing model and amounted to $67,533.



Securities are subject to a four month hold period that expires April 11, 2015. Proceeds from the offering will be used by the Company for commercialization of the generic and OTC products and for general ongoing corporate and working capital purposes.



Additional share issue costs totaling $203,490 were incurred relating to options and warrants exercised for the year.



















64



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11.

SHAREHOLDERS EQUITY (CONTINUED)



a)

Authorized share capital (continued)



2014 private placements



i)

On April 8, 2014, the Company closed a non-brokered private placement of 1,750,000 units at a price of $0.10 per unit for gross proceeds of $175,000. Each unit consists of one common share and one transferrable share purchase warrant. Each warrant entitles the holder thereof to purchase one additional common share for a period of twelve months from the closing date of the offering at a price of $0.30. The warrants will be subject to an accelerated exercise provision in the event the shares trade more than $0.10 above the exercise price for ten consecutive days.



In addition, on April 8, 2014, the Company closed a non-brokered private placement of 2,000,000 units of the Company at a price of $0.10 per unit for gross proceeds of $200,000. Each unit consists of one common share and one transferrable share purchase warrant. Each warrant entitles the holder thereof to purchase one additional common share for a period of 24 months from the closing date of the offering at a price of $0.13.



Finders fees of $12,000 cash were paid in addition to the issuance of 300,000 agent warrants; 120,000 warrants have a life of two years and are exercisable at $0.13. The remaining 180,000 warrants have a life of one year and are exercisable at $0.30 per unit. The fair value of the warrants issued to agents was estimated using the Black-Scholes option pricing model and amounted to $47,567.



ii)

On September 12, 2013, the Company issued 8,000,000 shares at a price of $0.10 for subscriptions received during the year ended June 30, 2013.



b)

Stock options



The Company has adopted an incentive share purchase option plan under the rules of the Exchange pursuant to which it is authorized to grant options to executive officers, directors, employees and consultants, enabling them to acquire up to 10% of the issued and outstanding common shares of the Company. The options can be granted for a maximum term of five years and generally vest either immediately or in specified increments of 25%.



No individual may hold options to purchase common shares of the Company exceeding 5% of the total number of common shares outstanding from time to time. Pursuant to the policies of the Exchange, shares issued on exercise of options are restricted from trading during the four-month period subsequent to the date of grant.





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11.

SHAREHOLDERS EQUITY (CONTINUED)



b)

Stock options (continued)



The changes in share options including those granted to directors, offers and consultants during the years ended June 30, 2015 and 2014 are summarized as follows



|                  |               |               |           |         
|----------------- | ------------- | ------------- | --------- | --------
|                  | June 30, 2015 | June 30, 2014
|                  |               | Weighted      |           | Weighted
|                  |               | Average       |           | Average 
|                  | Number        | Exercise      | Number    | Exercise
|                  | of Shares     | Price         | of Shares | Price   
|Beginning Balance | 2,250,000     | $0.11         | -         | -       
|Options granted   | 4,255,000     | $0.31         | 3,200,000 | $0.11   
|Expired/Cancelled | -             |               | (950,000) | $0.10   
|Exercised         | (1,625,000)   | $0.16         | -         |         
|Ending Balance    | 4,880,000     | $0.27         | 2,250,000 | $0.11   
|Exercisable       | 3,097,500     | $0.19         | 1,650,000 | $0.10   



The following table summarizes information about share options outstanding at June 30, 2015 and 2014:



|            |  |             |           |          
|----------- |  | ----------- | --------- | ---------
|            |  | Outstanding
|            |  | Exercise    | June 30,  | June 30, 
|Expiry date |  | Price       | 2015      | 2014     
|            |  |             |           |          
|19-Feb-17   |  | $0.20       | 450,000   | -        
|15-Apr-17   |  | $0.55       | 230,000   | -        
|05-Jun-17   |  | $0.55       | 300,000   | -        
|05-Sep-18   |  | $0.10       | -         | 450,000  
|21-Feb-19   |  | $0.10       | 1,000,000 | 1,000,000
|08-May-19   |  | $0.13       | 500,000   | 800,000  
|25-Jul-19   |  | $0.10       | 200,000   | -        
|15-Sep-19   |  | $0.10       | -         | -        
|14-Nov-19   |  | $0.15       | 150,000   | -        
|18-Dec-19   |  | $0.20       | 800,000   | -        
|08-Jan-20   |  | $0.20       | 150,000   | -        
|15-May-20   |  | $0.45       | 200,000   | -        
|05-Jun-20   |  | $0.45       | 400,000   | -        
|05-Jun-20   |  | $0.55       | 500,000   | -        
|Granted     |  |             | 4,880,000 | 2,250,000
|Exercisable |  |             | 3,097,500 | 1,650,000



The weighted average remaining contractual life of options outstanding and exercisable is 3.78 and 3.81 years, respectively.





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11.

SHAREHOLDERS EQUITY (CONTINUED)



b)

Stock options (continued)

Share-based payments



Share-based payments of $915,211 (2014 - $291,355) were recognized in the year ended June 30, 2015 for stock options granted and the vesting of options granted in the prior year. Options issued to Directors and Officers of the Company (2,655,000 options) vested immediately, while those issued to consultants (1,600,000 options) vest in equal quarterly increments every six months, with 25% vesting on grant date.  During the year ended June 30, 2014, options issued to Directors and Officers of the Company (2,400,000 options) vested immediately, while those issued to consultants (800,000 options) vest in equal quarterly increments every six months, with 25% vesting on grant date,



Share-based payments for options granted and vesting was measured using the Black-Scholes option pricing model with the following weighted average parameters:



|                        |               |              
|----------------------- | ------------- | -------------
|                        | June 30, 2015 | June 30, 2014
|Expected life           | 4.10          | 4.63         
|Volatility              | 169%          | 159%         
|Dividend yield          | 1%            | 0%           
|Risk-free interest rate | 1.03%         | 1.81%        



Option pricing models require the use of highly subjective estimates and assumptions including the expected stock price volatility. Changes in the underlying assumptions can materially affect the fair value estimates.



c)

Warrants



The Company has issued warrants entitling the holders to acquire common shares of the Company. A summary of changes in warrants is presented below:



|                       |               |               |             |         
|---------------------- | ------------- | ------------- | ----------- | --------
|                       | June 30, 2015 | June 30, 2014
|                       |               | Weighted      |             | Weighted
|                       |               | Average       |             | Average 
|                       | Number        | Exercise      | Number      | Exercise
|                       | of Warrants   | Price         | of Warrants | Price   
|Beginning balance      | 11,800,000    | $0.33         | 8,000,000   | $0.30   
|Warrants granted       | 4,412,252     | $0.25         | 4,050,000   | $0.21   
|Expired/Cancelled      | -             |               | (250,000)   | $0.30   
|Exercised              | (9,219,710)   | $0.31         | -           |         
|Issued and exercisable | 6,992,542     | $0.31         | 11,800,000  | $0.33   



|                       |  |             |           |           
|---------------------- |  | ----------- | --------- | ----------
|                       |  | Outstanding
|                       |  | Exercise    | June 30,  | June 30,  
|Expiry date            |  | Price       | 2015      | 2014      
|                       |  |             |           |           
|April 8, 2015          |  | $0.30       | -         | 1,890,000 
|December 11, 2015      |  | $0.25       | 1,787,542 | -         
|April 8, 2016          |  | $0.13       | 1,300,000 | 2,160,000 
|June 12, 2016          |  | **$0.40     | 3,905,000 | 7,750,000 
|Issued and exercisable |  |             | 6,992,542 | 11,800,000



*These warrants are exercisable at a price of $0.30 per warrant until June 12, 2014, $0.40 until June 12, 2015 and $0.50 until June 12, 2016.













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11.

SHAREHOLDERS EQUITY (CONTINUED)



c)

Warrants (continued)



The fair value of each warrant was estimated as at the date of grant using the Black-Scholes pricing model with the following weighted-average assumptions:



|                        |               |              
|----------------------- | ------------- | -------------
|                        | June 30, 2015 | June 30, 2014
|Expected life           | 1.00          | 1.48         
|Volatility              | 179%          | 190%         
|Dividend yield          | 0%            | 0%           
|Risk-free interest rate | 1.07%         | 1.07%        



12.

GAIN ON SETTLEMENT OF LIABILITIES



On September 23, 2011, a supplier to the Company, Cosmaceutical Research Lab, Inc. (CRL) filed a Notice of Claim (the CRL Claim) in the Provincial Court of British Columbia, Surrey, against the Company for $9,728 for unpaid invoices and court costs. The Company did not dispute the claim and the Court issued a summary judgment against the Company, which was still outstanding at June 30, 2013.



During the year ended June 30, 2014, the Company settled and paid the debt for $6,000, resulting in a debt settlement gain of $3,728. Additionally, the Company settled accounts payable totaling $88,162 for $53,393 resulting in a debt settlement gain of $34,769 during the year.





13.

RELATED PARTY TRANSACTIONS



Related party transactions not otherwise described in these consolidated financial statements are shown below. The remuneration of the Companys directors and other members of key management, being the Chief Executive Officer (CEO) and Chief Financial Officer (CFO), who have the authority and responsibility for planning, directing and controlling the activities of the Company, consist of the following amounts:



|                                         |     |          |           |          
|---------------------------------------- | --- | -------- | --------- | ---------
|                                         |     |          | June 30,  | June 30, 
|                                         |     |          | 2015      | 2014     
|                                         |     |          |           |          
|Accounts payable and accrued liabilities | $
- | $
26,375
|Promissory note                          |     |          | $
-       | $
32,978 
|Expenditures                             |     |          |           |          
|Management and consulting fees           |     |          | $
149,667 | $
166,458
|Share-based payments                     |     |          | $
297,073 | $
252,466
|Rent                                     |     |          | $
4,500   | $
9,530  



Accounts payable and promissory note balances at June 30, 2014 consist of an unpaid balance of CEO fees owed by the Company for services rendered and a loan that was settled during the year ended June 30, 2015.



Management and consulting fees includes payments to officers and directors of the Company for services rendered, and include payments to the CEO, CFO and the corporate secretary.



Rent expenses consist of fees paid to the CEO.



All related party transactions were in the normal course of business operations.





14.

CAPITAL DISCLOSURES



The Company includes shareholders equity in the definition of capital. The Companys objective when managing capital is to maintain sufficient cash resources to support its day-to-day operations. The availability of capital is solely through the issuance of the Companys common shares. The Company will not issue additional equity until such time when funds are needed and the market conditions become favorable to the Company. There are no assurances that funds will be made available to the Company when required. The Company makes every effort to



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safeguard its capital and minimize its dilution to its shareholders.



The Company is not subject to any externally imposed capital requirements. There were no changes in the Companys approach to capital management during the year ended June 30, 2015.





15.

COMMITMENTS



The Company has entered into contracts for leased premises, which expire in 2018. Total future minimum lease payments (net of sub-lease arrangement) under these contracts are as follows:



|              |   |       
|------------- | - | ------
|Within 1 year | $ | 34,763
|2 years       |   | 37,354
|3 years       |   | 22,671
|              | $ | 94,788





16.

FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT



The Companys financial instruments include cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, loans and promissory notes. The Companys risk management policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to market conditions and the Companys activities. The Company has exposure to credit risk, liquidity risk and market risk as a result of its use of financial instruments.



This note presents information about the Companys exposure to each of the above risks and the Companys objectives, policies and processes for measuring and managing these risks. Further quantitative disclosures are included throughout these consolidated financial statements. The Board of Directors has overall responsibility for the establishment and oversight of the Companys risk management framework. The Board has implemented and monitors compliance with risk management policies.



a)

Credit risk



Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises primarily from the Companys cash and cash equivalents and accounts receivable. The Companys cash and cash equivalents are held through a large Canadian financial institution. The cash equivalent is composed of a guaranteed investment certificate and is issued by a Canadian bank with high investment-grade ratings. The Company does not have financial assets that are invested in asset-backed commercial paper.



The Company performs ongoing credit evaluations of its accounts receivable, but does not require collateral. The Company establishes an allowance for doubtful accounts based on the credit risk applicable to particular customers and historical data.



The Company monitors the concentration of exposure and where possible, if necessary, takes steps to limit exposure to any counterparty. The Company views credit risk on cash deposits and accounts receivables as minimal.































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16.

FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (CONTINUED)



b)

Liquidity risk



Liquidity risk is the risk that the Company will incur difficulties meeting its financial obligations as they are due. The Companys approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions without incurring unacceptable losses or risking harm to the Companys reputation.



The Company monitors its spending plans, repayment obligations and cash resources, and takes actions with the objective of ensuring that there is sufficient capital in order to meet short-term business requirements. To facilitate its expenditure program, the Company raises funds primarily through public equity financing. The Company anticipates it will have adequate liquidity to fund its financial liabilities through future equity contributions.



As at June 30, 2015, the Companys financial liabilities were comprised of accounts payable and accrued liabilities of $187,124.



c)

Market risk



Market risk for the Company consists of currency risk and interest rate risk. The objective of market risk management is to manage and control market risk exposure within acceptable limits, while maximizing returns.



(i)

Currency risk

Foreign currency risk is the risk that the fair value or future cash flows will fluctuate as a result of changes in foreign exchange rates. As all of the Companys purchases and sales are denominated in Canadian dollars, and it has no significant cash balances denominated in foreign currencies, the Company is not exposed to foreign currency risk at this time.



(ii)

Interest rate risk

Interest rate risk is the risk that fair values or future cash flows will fluctuate as a result of changes in market interest rates. In respect of financial assets, the Companys policy is to invest cash at floating interest rates and cash reserves are to be maintained in cash equivalents in order to maintain liquidity, while achieving a satisfactory return for shareholders.



The Company is not exposed to significant interest rate risk.



d)

Determination of fair value



The fair values of financial assets and financial liabilities are determined as follows:



(i)

Cash and cash equivalents are measured at fair value. For accounts receivable, accounts payable and accrued liabilities, and loans carrying amounts approximate fair value due to their short-term maturity;



(ii)

The fair value of promissory notes payable approximate their carrying value, as their effective interest rates approximate current market rates;

















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16.

FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (CONTINUED)



d)

Determination of fair value (continued)



The fair value hierarchy establishes three levels to classify the inputs to valuation techniques used to measure fair value. The three levels of the fair value hierarchy are described below:



Level 1:

Unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities and amounts resulting from direct arms length transactions.



Cash and cash equivalents are valued using quoted market prices or from amounts resulting from direct arms length transactions. As a result, these financial assets and liabilities have been included in Level 1 of the fair value hierarchy.



Level 2:

Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full contractual term. Derivatives are included in Level 2 of the fair value hierarchy as they are valued using price models. These models require a variety of inputs, including, but not limited to, contractual terms, market prices, forward price curves, yield curves and credit spreads. The Company has no financial instruments at this level



Level 3:

Inputs for the asset or liability are not based on observable market data. Currently, the Company has no financial instruments at this level.





17.

INCOME TAXES



The following table reconciles the expected income taxes expense (recovery) at the Canadian statutory income tax rates to the amounts recognized in the consolidated statements of comprehensive loss for the years ended 2015 and 2014:



|                                            |   |             |   |          
|------------------------------------------- | - | ----------- | - | ---------
|                                            |   | 2015        |   | 2014     
|Income (loss) before taxes                  | $ | (2,200,648) | $ | (733,946)
|Statutory tax rate                          |   | 26.00%      |   | 26.00%   
|Expected income tax (recovery)              |   | (572,169)   |   | (190,826)
|Non-deductible items                        |   | 237,955     |   | 76,352   
|Loss expired                                |   | 84,778      |   | 29,000   
|Share issue costs                           |   | (2,771)     |   | (15,487) 
|Change in deferred tax asset not recognized |   | 252,207     |   | 100,961  
|Total income taxes                          | $ | -           | $ | -        



Deferred taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes. Deferred tax assets (liabilities) at June 30, 2015 and 2014 are comprised of the following:

















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17.

INCOME TAXES (CONTINUED)



|                                   |   |           |   |          
|---------------------------------- | - | --------- | - | ---------
|                                   |   | 2015      |   | 2014     
|Non-capital loss carry-forwards    | $ | 2,574,735 | $ | 2,496,210
|Property and equipment             |   | 133,232   |   | 5,858    
|Intangible asset                   |   | 90,639    |   | 90,639   
|Financing costs                    |   | 69,478    |   | 23,170   
|                                   |   | 2,868,084 |   | 2,615,877
|Deferred tax asset not recognized  |   | 2,868,084 |   | 2,615,877
|Net deferred tax asset (liability) | $ | -         |   | -        



The Company has non-capital loss carry-forwards of $9,902,826, which may be carried forward to apply against future year income tax for Canadian income tax purposes, subject to the final determination by taxation authorities, expiring in the following years:



|       |          
|------ | ---------
|EXPIRY | $        
|       |          
|2026   | 463,528  
|2027   | 450,897  
|2028   | 893,646  
|2029   | 859,482  
|2030   | 3,456,877
|2031   | 1,422,631
|2032   | 755,486  
|2033   | 236,246  
|2034   | 519,905  
|2035   | 874,155  
|TOTAL  | 9,902,826



The deferred tax assets have not been recognized because at this stage of the Companys development, it is not determinable that future taxable profit will be available against which the Company can utilize such deferred tax assets.





18.

ECONOMIC DEPENDENCE



The Company currently has licensing arrangements with three manufacturers to purchase, distribute and commercialize their drug molecules in Canada. These licensing arrangements constitute 100% of the Companys revenues for the year ended June 30, 2015. As a result, the ability of the Company to sustain operations is dependent on the continued operation of these manufacturers.





19.

CHANGE IN ACCOUNTING POLICY



During the year ended June 30, 2015, the Company changed its accounting policy over the allocation of proceeds from private placement units consisting of common shares and warrants. Management believes that the change in accounting policy better represents the value of share capital issued by the Company and is consistent with other companies that raise public market funds.



Prior to the year ended June 30, 2015, the Company allocated proceeds received for unit offerings firstly to the warrant component, using the Black-Scholes option pricing model, with any residual value being allocated to the share capital. Effective July 1, 2014 (and retrospectively applied), the Company allocates the proceeds received from unit offerings firstly to share capital based on observable market price of the common shares with any residual amount being allocated to the warrant component (Note 3).















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19.

CHANGE IN ACCOUNTING POLICY (CONTINUED)



Management has determined that using actual trading prices of the Companys common shares to measure fair value of the common shares reduces the degree of estimation uncertainty, and therefore provides reliable and a more relevant basis for allocation of proceeds.



In accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, the change in accounting policy has been applied retrospectively.



The impact of the change in accounting policy on the consolidated statements of financial position is set out below:



|                                                                            |   |               |   |            
|--------------------------------------------------------------------------- | - | ------------- | - | -----------
|June 30, 2014                                                               |   | Share capital |   | Reserves   
|                                                                            |   |               |   |            
|Balance, as previously reported                                             | $ | 8,990,307     | $ | 4,022,716  
|Remove fair value allocated to warrants during the year ended June 30, 2014 |   | 375,000       |   | (375,000)  
|Adjustment to opening balance as at July 1, 2013                            |   | 1,629,975     |   | (1,629,975)
|Adjusted balance                                                            | $ | 10,995,282    | $ | 2,017,741  



|                                                 |   |               |   |            
|------------------------------------------------ | - | ------------- | - | -----------
|July 1, 2013                                     |   | Share capital |   | Reserves   
|                                                 |   |               |   |            
|Balance, as previously reported                  | $ | 7,943,874     | $ | 3,308,794  
|Adjustment to opening balance as at July 1, 2013 |   | 1,629,975     |   | (1,629,975)
|Adjusted balance                                 | $ | 9,573,849     | $ | 1,678,819  



There was no impact on basic or diluted loss per share as a result of the adjustments.

































































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SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this registration report on its behalf.

|                            |                          
|--------------------------- | -------------------------
|Dated:    November 12, 2015 | VANC PHARMACEUTICALS INC.
|                            |                          
|                            | By: /s/Amandeep Parmar   
|                            | Amandeep Parmar,         
|                            | Chief Financial Officer  





74