UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





FORM 10-K





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





For the fiscal year ended December 31, 2009





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





For the transition period from ______________________ to ______________________





Commission file number: 333-142019





PURIO INC.


(Exact name of registrant as specified in its charter)





Nevada

98-05255034(State or other jurisdiction of incorporation or

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





1048 – 1685 H Street


Blaine, Washington 98230


(Address of principal executive offices)





949.533.8912


(Registrant’s telephone number, including area code)





Securities registered pursuant to Section 12(b) of the Exchange Act: None





Securities registered pursuant to Section 12(g) of the Exchange Act:Common Stock





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 þ





Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.  Yes o  No þ





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was require to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes þ 
No o





Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (of for such shorter period that the registrant was required
to submit and post such files).  Yes þ   No o





Indicate by check mark if the disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment
to this Form 10-K.  þ





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





Large accelerated filer o  Accelerated filer o  Non-accelerated filer o  Smaller
reporting company þ





Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o  No þ





As of June 30, 2009 the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, was $1,689,075.





As of March 31, 2010 the registrant’s outstanding common stock consisted of 55,234,603shares.







Table of Contents
  PART I
2Item 1. Business
2Item 1A. Risk Factors
4Item 1B. Unresolved Staff Comments
4Item 2. Properties
4Item 3. Legal Proceedings
4Item 4. (Removed and Reserved)
4PART II
5Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
5Item 6. Selected Financial Data
6Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
6Item 7A. Quantitative and Qualitative Disclosures about Market Risk
8Item 8. Financial Statements and Supplementary Data
8Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
9Item 9A. Controls and Procedures
9Item 9A(T). Controls and Procedures
9Item 9B. Other Information
9PART III
10Item 10. Directors, Executive Officers and Corporate Governance
10Item 11. Executive Compensation
12Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
13Item 13. Certain Relationships and Related Transactions, and Director Independence
14Item 14. Principal Accounting Fees and Services
15PART IV
16Item 15. Exhibits, Financial Statement Schedules
16


1





EXPLANATORY NOTE





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


PART I




Item 1. Business





Forward-Looking Statements





This annual report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “could”, "may", "will", "should", "expects", "plans”, "anticipates", "believes", "estimates", "predicts", "potential"
or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.





Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable laws, including the securities laws of the United States, we do not intend to update any of the forward-looking statements so as to
conform these statements to actual results.





As used in this annual report, the terms "we", "us", "our" mean Purio Inc., unless otherwise indicated.





All dollar amounts in this annual report refer to U.S. dollars unless otherwise indicated.





Overview





On December 7, 2007 we entered into a share exchange agreement with PEWS, a private Nevada corporation. Pursuant to the terms of the share exchange agreement, we agreed to acquire all of the issued and outstanding shares of PEWS’s common stock in exchange for issuing 27,500,000 shares of our common stock to the shareholders of PEWS.

On February 11, 2008 we entered into an amended and restated share exchange agreement with PEWS and the shareholders of PEWS, and this agreement was amended slightly to alter some closing conditions on February 13, 2008. The amended agreement amended and restated the share exchange agreement dated December 7, 2007 in its entirety except for Schedule
2A, Schedule 2B and Schedule 3 which were previously executed by the shareholders of PEWS. Pursuant to the amended agreement, we agreed to acquire all of the issued and outstanding shares of PEWS’s common stock in exchange for issuing approximately 27,734,603 shares of our common stock to the shareholders of PEWS, and we also agreed to cancel 27,500,000 shares of our issued and outstanding common stock held by two of our shareholders.

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

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


2





Products and Services





PEWS acquired its patented water treatment technology through the enforcement of a general security agreement which gave PEWS a secured interest in various assets of Proteus Environmental Systems Inc. (“Proteus”). Daryl English, our President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Secretary, Treasurer
and director, was the Managing Director of Proteus when PEWS entered into the general security agreement with Proteus. On December 14, 2001 PEWS enforced its security interest and became the owner of, among other assets, U.S. Patent 5904855 and Canadian patent application number CA2277922, both of which relate to PEWS’s water clarification technology.

PEWS’s patented water treatment technology has the potential to satisfy a significant demand for clean water suitable for human consumption, agricultural, industrial, domestic and recreational uses. The technology has a wide range of applications, including wastewater treatment, process water recycling, and drinking water production. It works
as a continuous-flow water/suspended-solids primary separation system. The process mechanically separates suspended solids from liquids, without the use of membranes or filters. When the process is applied to residential wastewater, the solids can be further processed through various forms of bio-reduction technology, including composting, thereby creating a value-added by-product suitable for uses in agriculture, horticulture or landscaping. We believe the same clarification equipment, because of its versatility,
also has the potential to economically reclaim process water normally disposed of in industrial and agricultural applications such as food processing. In addition, the technology is also capable of clarifying dirty surface water from ponds and rivers as the first stage in providing safe drinking water. Clarified water may be further sanitized by ozonation and treated by such means as reverse osmosis to become high-quality potable water.

We believe that PEWS’s patented technology has the ability to separate suspended solids from contaminated water (or residential waste-water) using small scale, portable technology generally reserved for larger operations. In the primary stage of clarification the equipment clarifies water on a flow-through basis using no membrane filtration. Because
of its modular design, we can custom design installations to accommodate varying requirements. The technology employs a closed system design which emits no odors and it is almost silent in its operation. It can be stopped and started without efficiency loss and its compact size (about the size of one parking space) makes it transportable. It is capable of producing sanitary clarified water through the use of our proprietary sanitizing agent and without chlorine. The product water can then be further upgraded
using readily available equipment if the objective is to produce water suitable for drinking.

We also intend to distribute a comprehensive line of in-home and office drinking water purification equipment in Canada and the Unites States. We have entered into a licensing agreement with Earl Switenky doing business as UltraSafe Water Source (“UltraSafe”) for the marketing and distribution of UltraSafe’s water purification equipment.
Mr. Switenky is our former director and was a director and officer of PEWS at the time the licensing agreement was entered into. To date we are the only entity with rights to distribute UltraSafe’s equipment, which consists of an under-the-counter reverse osmosis water purification system under the Guardian brand name and complementary products such as shower filters.

Distribution Methods

We intend to commercialize our technology via a number of channels including licensing agreements with strategic partners to build, sell and operate units outside of North America. We also intend to engage in direct sales of our units to end users and will build, own and operate, on a fee-for-service basis, these larger permanent installation stations
in North America.

Competition

The water treatment industry is widespread and highly competitive. Many entities in the United States and around the world compete with us to produce, process and distribute treated water and water purification equipment. We face, and expect to continue to face, competition from entities that distribute treated water and water purification equipment.
Many of our competitors have substantially greater capital resources and more experience in research and development, manufacturing and marketing than we do. In addition, we may not succeed in distributing our products and bringing them to market in a cost-effective and timely manner relative to our competitors. Moreover, they may have greater name recognition than we do and may offer discounts as a competitive tactic. We believe that our competitive edge is that our technology is almost silent, emits no odors,
is compact and transportable, and does not require the use of chlorine.

The technologies for processing wastewater and approaches for commercializing those technologies are evolving. Technological developments may result in our processes becoming obsolete before we recover a significant portion of any capital expenditures that we may incur. If we are unable to commence wastewater processing for the production of potable
water for commercial and residential use, our financial condition will be adversely affected.

3
Customers

We have generated limited revenues to date through a small number of customers. Our prospective customers include federal, state and municipal governments, developers, industrial plants who use water in their processes, foodstuffs producers and growers, home owners, business offices, the hospitality industry, temporary camps and emergency relief agencies.


Intellectual Property




PEWS’s proprietary water clarification technology is patented under U.S. Patent 5904855. This patent expires on May 18, 2014. PEWS has also applied to patent its technology in Canada. It is management’s intention to file future patent applications occasioned by any improvements made to PEWS’s water clarification technology.
 
 Government Regulation
 
 The discharge of wastewater into the environment and the production of potable water is subject to strict regulatory standards. These regulatory standards are controlled by the states in the United States and by the provinces in Canada. Our technology has been reviewed and approved for the treatment of wastewater and the discharge of effluent in several
provinces of Canada. Government regulations relating to reclamation of process water for re-use in commercial and industrial applications typically relate to matters of sanitation thereby presenting a lower threshold compared to wastewater release standards or potable water production standards.
 
 In addition, the generation, handling, storage, transportation, treatment and disposal of waste material is subject to strict regulatory standards. Such laws and regulations are evolving constantly and it is difficult to predict the effect these regulations may have on us in the future.
 Our operations are subject to a wide variety of federal, state, provincial and municipal laws and regulations, including those governing the use, storage, handling, generation, treatment, emission release, discharge and disposal of certain materials, substances and wastes, the remediation of contaminated soil and groundwater, and the health and safety
of employees. As such, the nature of our operations exposes us to the risk of claims with respect to such matters and there can be no assurance that material costs or liabilities will not be incurred in connection with such claims. Environmental legislation also provides for standards, restrictions and prohibitions on the handling of certain types of waste and for releases, spills, emissions into the environment of substances that are being handled by our company. Any breach by our company of such legislation
may result in the suspension or revocation of necessary licenses, permits or authorizations, civil liability and the imposition of fines and penalties which would adversely affect our financial condition.
 
 Research and Development
 
 We did not spend any money on research and development activities during our two most recent fiscal years. However, we plan on spending approximately $50,000 on research and development activities over the next 12 months in order to develop PEWS’s technology for a broader range of applications.
 Employees
 
 As of March 31, 2010 we did not have any employees.


Item 1A. Risk Factors





Not required.





Item 1B. Unresolved Staff Comments





None.





Item 2. Properties





Our principal offices are located at 1048 – 1685 H Street, Blaine, Washington 98320. As of March 31, 2010 we had not entered into any lease agreements for these premises. However, we pay an annual fee of approximately $150 to use this space.





Item 3. Legal Proceedings





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





Item 4. (Removed and Reserved)




4





PART II




Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities





Market Information





Our common stock is not traded on any exchange. Our common stock is quoted on the OTC Bulletin Board under the trading symbol “PURO”. Trading in stocks quoted on the OTC Bulletin Board is often thin and is characterized by wide fluctuations in trading prices due to many factors that may have little to do with a company's operations or business
prospects. We cannot assure you that there will be a market for our common stock in the future.





OTC Bulletin Board securities are not listed or traded on the floor of an organized national or regional stock exchange. Instead, OTC Bulletin Board securities transactions are conducted through a telephone and computer network connecting dealers in stocks. OTC Bulletin Board issuers are traditionally smaller companies that do not meet the financial
and other listing requirements of a regional or national stock exchange.





Our common stock was first traded on the OTC Bulletin Board on November 28, 2007. The following table reflects the high and low bid quotations for our common stock for each fiscal quarter during our two most recently completed fiscal years. These quotations are based on inter-dealer prices, without retail mark-up, mark-down or commission, and may not
represent actual transactions.





OTC Bulletin BoardQuarter Ended
High ($)
Low ($)December 31, 2009
0.03
0.01September 30, 2009
0.05
0.02June 30, 2009
0.09
0.04March 31, 2009
0.19
0.03December 31, 2008
0.25
0.05September 30, 2008
0.47
0.12June 30, 2008
0.57
0.17March 31, 2008
0.89
0.32





Holders





As of March 31, 2010 there were approximately 50 holders of record of our common stock. We do not believe that a significant number of beneficial owners hold their shares of our common stock in street name.





Dividends





As of March 31, 2010 we had not paid dividends on shares of our common stock and we do not expect to declare or pay dividends on shares of our common stock for the foreseeable future. We intend to retain earnings, if any, to finance the development and expansion of our business. Our future dividend policy will be subject to the discretion of our Board
of Directors and will depend upon our future earnings, if any, our financial condition, and other factors deemed relevant by the Board.





Equity Compensation Plans





As of March 31, 2010 we did not have any equity compensation plans in place.





Recent Sales of Unregistered Securities





We did not make any unregistered sales of our equity securities between September 30, 2009 and December 31, 2009.




5





Item 6. Selected Financial Data





Not applicable.





Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations





The following discussion should be read in conjunction with our consolidated financial statements, including the notes thereto, appearing elsewhere in this annual report on Form 10-K. The discussions of results, causes and trends should not be construed to imply any conclusion that these results or trends will necessarily continue into the future.





We completed a share exchange transaction with Purio Environmental Water Source, Inc., a private Nevada corporation incorporated on November 16, 1999 (“PEWS”), and the shareholders of PEWS that resulted in PEWS becoming our wholly-owned subsidiary and our new operating business as of February 13, 2008. The closing of the share exchange transaction
resulted in a change of control of our company. The share exchange transaction was accounted for as a reverse acquisition and, as a result, our consolidated financial statements are, in substance, those of PEWS, with our assets, liabilities, revenues and expenses included effective from the date of the closing of the share exchange transaction.


Results of Operations





Revenues





We have limited operational history. From our inception on November 16, 1999 to December 31, 2009 we generated revenues of $5,113. For the year ended December 31, 2009 we did not generate any revenues, whereas we generated revenues of $3,394 for the year ended December 31, 2008. We anticipate that we will incur substantial losses for the foreseeable
future and our ability to generate any revenues in the next 12 months is uncertain.





Expenses





From our inception on November 16, 1999 to December 31, 2009 we incurred total expenses of $1,277,954, including $411,010 in professional fees, $430,698 in consulting fees, $40,642 in depreciation expenses, $44,839 in occupancy costs, $22,219 in exploration costs and expenses, $3,600 in impairment of mineral rights, $11,018 in stock transfer fees, $53,564
in administration expenses and $220,019 in general and administrative expenses. Our general and administrative expenses consisted of travel, meals and entertainment, office maintenance, communication expenses (cellular, internet, fax and telephone), office supplies, web development and courier and postage costs. Our professional fees consisted of legal, accounting and auditing fees.





During the year ended December 31, 2009 we incurred total expenses of $154,816, including $64,489 in professional fees, $9,562 in depreciation, $22,960 in occupancy costs, $6,031 in stock transfer fees, $10,670 in administration expenses and $41,074 in other general and administrative expenses. During the year ended December 31, 2008 we incurred total
expenses of $357,985, including $75,382 in professional fees, $40,865 in consulting fees, $5,126 in depreciation, $40,345 in marketing expenses, $28,532 in occupancy costs, $2,033 in stock transfer fees, $37,490 in administration expenses and $128,212 in other general and administrative expenses.


Net Loss





From our inception on November 16, 1999 to December 31, 2009 we incurred a net loss of $1,272,901. For the year ended December 31, 2009 we incurred a net loss of $154,591, compared to a net loss of $354,876 for the year ended December 31, 2008.





Liquidity and Capital Resources





As of December 31, 2009 we had $279 in cash and cash equivalents, $172,770 in total assets, $411,297 in total liabilities and a working capital deficit of $401,182. As of December 31, 2009 we had an accumulated deficit of $1,272,901.




We are dependent on the funds raised through our equity financing. Our net loss of $1,272,901 from our inception on November 16, 1999 to December 31, 2009 was funded by our equity financing. Since our inception on November 16, 1999, we have raised gross proceeds of $564,768 in cash from the sale of our common stock.





From our inception on November 16, 1999 to December 31, 2009 we spent $596,047 on operating activities. During the year ended December 31, 2009 we spent $152,486 on operating activities, compared to spending of $115,533 on operating activities during the year ended December 31, 2008.


6





From our inception on November 16, 1999 to December 31, 2009 we spent $212,777 on investing activities related to our technology. During the year ended December 31, 2009 we spent $4,638 on investing activities, compared to spending of $38,388 on investing activities during the year ended December 31, 2008. The decrease in our spending on investing activities
during the year ended December 31, 2009 was primarily due to decreases in our acquisition of equipment and water vessels.





From our inception on November 16, 1999 to December 31, 2009 we received $778,937 from financing activities. During the year ended December 31, 2009 we received $118,234 from financing activities, including $74,625 from stockholder loans, $28,000 from the repayment of a note payable and $15,609 in other contributed capital. During the year ended December
31, 2008 we spent $29,162 on financing activities, of which $29,228 was in the form of a bank advance.





During the year ended December 31, 2009 we also received $2,760 from the effect of exchange rates, and we have received $30,246 from this effect from our inception on November 16, 1999 to December 31, 2009.


The decrease in cash for the year ended December 31, 2009 of $36,130 was due to a combination of our operating, investing and financing activities.





During the next 12 months we intend to identify and establish markets for our products and arrange for the construction, delivery and commissioning of equipment to satisfy those markets. Our $279 in cash as of December 31, 2009 will not be able to satisfy our cash requirements for the next 12 months, and anticipate that we will have to raise additional
funds of approximately $1,000,000 for the following:





Description
PotentialCompletion Date
EstimatedExpenses
($)Construction or purchase of purification equipment
12 months
500,000Marketing expenses
12 months
300,000Research and development
12 months
50,000Professional fees (legal, accounting and auditing fees)
12 months
100,000General and administrative expenses
12 months
50,000Total

1,000,000





We will require additional funds to implement our growth strategy and develop our water clarification and water reclamation business. These funds may be raised through equity financing, debt financing, or other sources, which may result in further dilution to the equity ownership of our common stock. There is no assurance that we will be able to maintain
our operations at a level sufficient for an investor to obtain a return on his or her investment in our common stock. Further, we may be unprofitable.





We intend to design and build purification equipment based on contracted orders, and we plan to conduct marketing via demonstrations, participation in trade shows, advertising in electronic and print media and by developing a global representative and dealer network. We also plan to spend money on research and development activities in order to develop
PEWS’s technology for a broader range of applications.




We cannot provide a guarantee that we will be able to obtain the funds required to continue our operations. We intend to pursue various financing alternatives to meet our immediate and long-term financial requirements, but there is no assurance that additional financing will be available to us when we need it or that we will be able to obtain it on
commercially reasonable terms. If we are not able to obtain additional financing on a timely basis, we will be unable to conduct our operations as planned, and we will not be able to meet our obligations as they become due. In such event, we will be forced to scale down or perhaps even cease our operations.





Going Concern





We have generated limited revenues to date and depend on obtaining outside financing to carry out our operations. If we are unable to raise equity or secure alternative financing, we may not be able to continue our operations and our business plan may fail.





If our operations and cash flow improve, management believes that we can continue to operate. However, no assurance can be given that management's actions will result in profitable operations or an improvement in our liquidity situation. The threat of our ability to continue as a going concern will cease to exist only when our revenues have reached
a level able to sustain our business operations.




7





Off-Balance Sheet Arrangements





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





Critical Accounting Policies





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





Principles of Consolidation





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





Patent





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





Item 7A. Quantitative and Qualitative Disclosures about Market Risk





Not required.





Item 8. Financial Statements and Supplementary Data





Purio Inc.


(A Development Stage Company)


December 31, 2009





Report of Independent Registered Public Accounting Firm
F-1Consolidated Balance Sheet
F-2Consolidated Statement of Operations
F-3Consolidated Statement of Cash Flows
F-4Consolidated Statement of Stockholders’ Equity
F-5Notes to the Consolidated Financial Statements
F-6




8




REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  To: The Board of Directors and Shareholders
 Purio Inc.
 Blaine, Washington
  I have audited the accompanying consolidated balance sheet of Purio Inc. (the “Company”) as of December 31, 2009 and 2008 and the related consolidated statements of operations, cash flows and stockholders’ equity for the years then ended. These financial statements are the responsibility of the Company’s
management.  My responsibility is to express an opinion on these financial statements based on my audit.
  I conducted my audits in accordance with the standards of the Public Company Accounting Oversight Board.  Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  I believe that my audit provides a reasonable basis for my opinion.
  In my opinion the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2009 and 2008, and the results of its operations and its cash flows for the years then ended, and the period
from inception (November 16, 1999) to December 31, 2009,in conformity with United States generally accepted accounting principles.
  The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 4 to the financial statements, the Company has suffered recurring losses and has not yet commenced operations.  This raises substantive doubt about the Company’s ability to continue as a going concern.
  Management’s plans in regard to these matters are also described in Note 2.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
  The Company has determined that it is not required to have, nor was I engaged to perform, an audit of the effectiveness of its documented internal controls over financial reporting.
 /s/John Kinross-Kennedy
 John Kinross-Kennedy
 Certified Public Accountant
  Irvine, California
  March 23, 2010


F-1


PURIO INC.
 ( A Development Stage Company)
 CONSOLIDATED BALANCE SHEET


2009


2008ASSETSCurrent AssetsCash and cash equivalents

$
279


$
36,409Prepaid Expenses


-



11,088Inventory


9,836



11,006Total Current Assets


10,115



58,503Property and EquipmentFixed Assets, net of accumulated depreciation


41,045



45,999Other AssetsPatents


121,610



121,610TOTAL ASSETS

$
172,770


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


292



9,988Notes Payable


28,000Deposit


-



265,385Subscriptions Received


291,291



35,955Stockholders' Loans


91,714



17,089Total Current Liabilities


411,297



328,417Stockholders' Equity (Deficit)Common Stock, no par value; stated value $0.001, authorized375,000,000 shares, issued and outstanding55,234,603 as at September 30, 2009,55,234,603 as at December 31, 2008


55,234



55,234Additional Paid-In Capital


948,974



933,365Accumulated other comprehensive income


30,166



27,406Accumulated deficit during the development stage


(1,272,901
)


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


(238,527
)


(102,305
)TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$
172,770


$
226,112




F-2


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





For the Periodof Inception fromNovember 16,For the year ended


1999, throughDecember 31,


December 31,


December 31,2009


2008


2009RevenueSales

$
-


$
3,394



5,113Selling ExpensesMarketing


-



40,345



40,345General and Administrative Expenses:Professional Fees


64,489



75,382



411,010Exploration Costs and Expenses


-



-



22,219Occupancy Costs


22,960



28,532



44,839Consulting


-



40,865



430,698Depreciation


9,592



5,126



40,642Impairment of mineral rights


-



-



3,600Stock Transfer Fees


6,031



2,033



11,018Administration


10,670



37,490



53,564Other General and AdministrativeExpenses


41,074



128,212



220,019Total General and AdministrativeExpenses


154,816



317,640



1,237,609Net Operating Loss


(154,816
)


(354,591
)


(1,272,841
)Other Income (Expense)


225



(285
)


(60
)Net Loss


(154,591
)


(354,876
)


(1,272,901
)Currency translation adjustment


2,760



22,422



30,246Comprehensive Loss

$
(151,831
)

$
(332,454
)

$
(1,242,655
)Loss Per Common Share, basic and diluted

$
(0.003
)

$
(0.006
)Weighted Average Shares Outstanding,Basic and Diluted:


55,237,603



55,205,924





F-3


PURIO INC.
 (A Development Stage Company)
 CONSOLIDATED STATEMENT OF CASH FLOWS


For the Periodof Inception fromFor the year ended


Nov. 16,1999, throughDecember 31,


December 31,


December 31,2009


2008


2009Cash flows from operating activities:Net Operating Income (Loss)

$
(154,591
)


(332,454
)

$
(1,272,901
)Adjustments to reconcile net loss tonet cash used by operating activities:Non-cash depreciation


9,592



5,126



50,122Subscriptions received


255,336



23,805



291,291Non Cash Common Stock for services










373,979Consolidation of subsidiary paid-in capital










(28,994
)Change in operating assets and liabilities:Accounts Payable


(9,696
)


(10,617
)


292Inventory


1,170



(11,006
)


(9,836
)Deposits


(265,385
)


219,930Prepaid Expenses


11,088



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


(152,486
)


(115,533
)


(596,047
)Cash flows from investing activities:Acquistion of patents






(1,615
)


(121,610
)Disposal (acquisition) of equipment


(4,638
)


(18,816
)


(75,445
)Acquisition of water vessels






(17,957
)


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


(4,638
)


(38,388
)


(212,777
)Cash flows from financing activities:Common stock issued for cash






234



564,768Proceeds of stockholders' loans


74,625



(168
)


91,714Bank Advance






(29,228
)Proceeds (repayment) of Note Payable


28,000







28,000Other Contributed Capital


15,609







94,455Net cash (used by) provided by financing activities


118,234



(29,162
)


778,937Effect of exchange rates on cash


2,760



-



30,166Net increase (decrease) in cash


(36,130
)


(183,083
)


279Cash, beginning of the period


36,409



219,492



-Cash, end of the period

$
279


$
36,409


$
279Supplemental cash flow disclosure:Interest paid

$
1,931


$
-


$
2,471Taxes paid

$
-


$
-


$
-


F-4


PURIO INC.
 (A Development Stage Company)
 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
 For the Period from November 16, 1999 (Inception) to December 31, 2009
  AccumulatedCommon Stock


Additional


Deficit


TotalNumber of





Paid-In


during the Development


Shareholders'EquityShares


Capital


Capital


Stage


(Deficit)Inception, November 16, 1999


-


$
-


$
-


$
-


$
-Subscriptions received during period



20,379











20,379Balances, December 31, 1999


-



20,379







-



20,379Cash contributed from Global Tech







232







232Subscriptions received during year



115,116











115,116Net loss for year ended Dec. 31, 2000











(2,672.00
)


(2,672.00
)Balances, December 31, 2000


-


$
135,495


$
232


$
(2,672
)

$
133,055Subscriptions received during year



1,888











1,888Net loss for year ended Dec. 31, 2001











(5,126
)


(5,126
)Balances, December 31, 2001


-


$
137,383


$
232


$
(7,798
)

$
129,817Subscriptions received during year



7,630











7,630Net loss for year ended Dec. 31, 2002











(11,544
)


(11,544
)Balances, December 31, 2002


-


$
145,013


$
232


$
(19,342
)

$
125,903Subscriptions received during year



1,428











1,428Net loss for year ended Dec. 31, 2003











(6,149
)


(6,149
)Balances, December 31, 2003


-


$
146,441


$
232


$
(25,491
)

$
121,182Subscriptions received during the year



1,613











1,613Net loss for year ended Dec. 31, 2004











(8,461
)


(8,461
)Balances, December 31, 2004


-


$
148,054


$
232


$
(33,952
)

$
114,334Net loss for year ended Dec. 31, 2005











(4,395
)


(4,395
)Balances, December 31, 2005


-


$
148,054


$
232


$
(38,347
)

$
109,939Net loss for year ended Dec. 31, 2006











(4,330
)


(4,330
)Balances, December 31, 2006


-


$
148,054


$
232


$
(42,677
)

$
105,609Capital revalued Sep. 28, 2007






(148,054
)










(148,054
)Balances September 28, 2007Balances September 28, 2007 before stock issue


-


$
-


$
232


$
(42,677
)

$
(42,445
)
  F-5
  Accumulated


AccumulatedCommon Stock


Additional


Other


Deficit


TotalNumber of


Capital


Paid-In


Comprehensive


during the Development


Shareholders' EquityShares


Stock


Capital


Income


stage


(Deficit)Balances September 28, 2007before stock issue


-


$
-


$
232





$
(42,677
)

$
(42,445
)Common stock issued for cash @$0.0026 per share Sep. 28, 2007


10,808,694



10,809



17,569










28,378Common stock issued for cash @$0.036 per share Sep. 28, 2007


9,017,010



9,017



313,268










322,285Common stock issued for cash @$0.25 per share Sep. 28, 2007


776,600



776



193,329










194,105Common stock issued for cash @$0.50 per share Sep. 28, 2007


40,000



40



19,960










20,000Common stock isued for services @$0.0545 per share Sep. 28, 2007


6,857,696



6,858



366,886










373,744Net loss for year ended Dec. 31, 2007














(626,948
)


(626,948
)Balances, December 31, 2007


27,500,000



27,500



911,244






(669,625
)


269,119Merger: Purio EnvironmentalWater Source, Inc. (PEWS) andPurio, Inc. February 13, 2008:Consolidate Purio Inc.










78,849



4,984



(93,809
)


(9,976
)Merger adjustments










(28,994
)Retire PEWS stock


(27,500,000
)


(27,500
)


27,500Issue Purio Stock


27,500,000



27,500



(27,500
)Issue Purio Stock


27,737,603



27,734



(27,734
)(28,994
)Net loss for year ended Dec. 31, 2008











22,422



(354,876
)


(332,454
)Balances, December 31, 2008


55,237,603



55,234



933,365



27,406



(1,118,310
)


(102,305
)Other contributed capital










15,609











15,609Net loss for year ended Dec. 31, 2009











2,760



(154,591
)


(151,831
)Balances, September 30, 2009


55,237,603


$
55,234


$
948,974


$
30,166


$
(1,272,901
)

$
-


F-6


PURIO INC.
 (A DEVELOPMENT STAGE COMPANY)
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER 31, 2009
 (Expressed in US Dollars)
  NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
  (A)Organization
  Purio Inc. (f/k/a AOM Minerals Ltd.) (a development stage company) (the “Company”) was incorporated under the laws of the State of Nevada on June 3, 2005. The Company initially was an exploration stage company with an objective of acquiring, exploring and if warranted and feasible, developing natural resource properties. Activities during
this stage included developing the business plan and raising capital.

Effective December 5, 2007, the Company changed its name to “Purio Inc.” and entered into a share exchange agreement with Purio Environmental Water Source, Inc. (“PEWS”), a private Nevada corporation, and the shareholders of PEWS. Pursuant to the share exchange agreement, the Company issued 27,734,603 shares of its common stock
in return for all outstanding shares of PEWS. By this means, PEWS became a 100% owned subsidiary of the Company. PEWS is the active entity therefore for accounting purposes, the merger was treated as a reverse acquisition such that the activity presented reflects the year end of PEWS.

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

The consolidated financial statements have been prepared in accordance with the accounting principles generally accepted in the United States of America and include the following significant accounting policies:
  (B)   Principles of Consolidaton
  The consolidated financial statements include the accounts of the Company and PEWS, the Company’s wholly owned subsidiary. Significant inter-company transactions have been eliminated.
 (C)   Use of Estimates
  In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates.
  (D)   Cash and Cash Equivalents
  For purposes of the cash flow statements, the Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents.
  (E)   Long-Lived Assets
  The Company accounts for long-lived assets under the Statements of Financial Accounting Standards (“SFAS”) Nos. 142 and 144, “Accounting for Goodwill and Other Intangible Assets” and “Accounting for Impairment or Disposal of Long-Lived Assets”. In accordance with SFAS No. 142 and 144, long-lived assets, goodwill and certain identifiable intangible assets held and used by the Company are reviewed
for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset will not be recoverable. For purposes of evaluating the recoverability of long-lived assets, goodwill and intangible assets, the recoverability test is performed using undiscounted net cash flows related to the long-lived assets. Impairment of experimental water clarification equipment is calculated based on its estimated useful life.
  (F)   Income Taxes
  The Company utilizes SFAS No. 109, “Accounting for Income Taxes”, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the tax basis of assets and liabilities and their financial reporting
amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company generated deferred tax credits through net operating loss carryforwards. However, a valuation allowance of 100% has been established, as the realization of the deferred tax credits is not reasonably certain, based on going concern
considerations outlined below.
  F-7
  (G)   Loss Per Share
  Statement of Financial Accounting Standards No. 128, “Earnings Per Share”, requires presentation of basic earnings per share and diluted earnings per share. Basic income (loss) per share (“Basic EPS”) is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share (“Diluted EPS”) is similarly
calculated using the treasury stock. At December 31, 2009, there were no potentially dilutive securities.
  The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations for the 12 months ended December 31, 2009 and 2008:
  2009
2008Numerator:Basic and diluted net loss per share:Comprehensive Loss
$ (151,831)
$ (332,454)Denominator:Basic and diluted weighted averagenumber of shares outstanding
55,237,603
55,205,924Basic and Diluted Net Loss Per Share:
$ (0.003)
$ (0.006)
 
 (H)   Patent
  The patent is United States Patent 5904855 granted May 18, 1999 for a “Closed Chemically Advanced Treatment System”. The invention described in the patent is used by the Company in the water purification equipment which is under development. The patent is not in use to protect marketed products and is therefore not amortized. There has been no change in circumstances that would warrant impairment per an evaluation under
SFAS No. 121.
  (I)   Foreign Currency Translation
  In accordance with SFAS No. 52, “Foreign Currency Translation”, the Company has determined that its functional currency is the United States Dollar. The Company recorded a consolidated comprehensive gain of $2,760 in the year ended December 31, 2009, primarily from the translation of transactions through a Canadian bank. Exchange differences are accumulated as a component of accumulated other comprehensive gain.
  (J)   Comprehensive Income (Loss)
  Comprehensive income or loss encompasses net income or loss and “other comprehensive income or loss”, which includes all other non-owner transactions and events that change shareholders’ equity/deficiency. The Company’s other comprehensive gain reflects the effect of foreign currency translation adjustments on the translation of the financial statements from the functional currency of Canadian dollars into
the reporting currency of U.S. dollars.
  (K)   Fair Value of Financial Instruments
  The carrying amounts on the Company’s financial instruments including accounts payable approximate fair value due to the relatively short period to maturity for this instrument.
  (L)   Development-Stage Company
  The Company is considered a development-stage company, with limited operating revenues during the periods presented, as defined by SFAS No. 7. SFAS  No. 7 requires companies to report their operations, shareholders deficit and cash flows since inception through the date that revenues are generated from management’s intended operations, among other things. Management has defined inception as November 16, 1999. Since inception,
the Company has incurred an operating loss of $1,272,901. The Company’s working capital has been generated through the sales of common stock. Management has provided financial data since inception in the financial statements, as a means to provide readers of the Company’s financial information to make informed investment decisions.
  F-8
  NOTE 2. ACQUISITION OF MINERAL PROPERTY
  On March 31, 2006, the Company entered into an agreement for an option to acquire a 100% interest in the August Property in the Kettle River Region of British Columbia, Canada for a purchase price of $3,600. The property consists of 2 mineral claims known as the Kenrick #1 and Hard To Beat Claims.
  In August 2006, a geological survey on the property was completed, geological report filed, and exploration program recommended.
  Because the company had not yet established the viability of the property, the mineral rights were impaired 100% as of March 31, 2008.
  NOTE 3. STOCKHOLDERS EQUITY
  On February 28, 2006, the Company issued 27,500,000 shares of common stock to its founders for cash of $5,500 ($0.0002 per share).

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

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

On December 7, 2007, the Company entered into a share exchange agreement with PEWS, a private Nevada corporation, and the shareholders of PEWS. Pursuant to the terms of the share exchange agreement, the Company agreed to acquire all of the issued and outstanding shares of PEWS’s common stock in exchange for 27,500,000 shares
of the Company.

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

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

At September 30, 2009, the Company was authorized to issue 375,000,000 shares, of which there were 55,234,603 shares issued and outstanding.
  NOTE 4. GOING CONCERN
  As reflected in the accompanying financial statements, the Company is in the development stage with no operations, and from inception has a consolidated net operating loss of $1,242,655.  The Company has negative consolidated working capital of $401,182 and a stockholders’ deficit of $238,527 as at December 31, 2009. There is substantial doubt about its ability to continue as a going concern. The ability of the Company
to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
  Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern.
  NOTE 5. CONTINGENCIES, LITIGATION
  There were no loss contingencies or legal proceedings against the Company with respect to matters arising in the ordinary course of business. Neither the Company nor any of its officers or directors is involved in any other litigation either as plaintiffs or defendants, and have no knowledge of any threatened or pending litigation against them or any of the officers or directors.


F-9





Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure





None.





Item 9A. Controls and Procedures





Not applicable.





Item 9A(T). Controls and Procedures





Evaluation of Disclosure Controls and Procedures





We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"), that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in the rules and forms of the Securities and Exchange Commission (the “SEC”), and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.





As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the evaluation of these disclosure
controls and procedures, our management concluded that our disclosure controls and procedures were not effective due to control deficiencies.





Management Report on Internal Control Over Financial Reporting





Our management is responsible for establishing and maintaining effective internal control over financial reporting. Under the supervision of our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2009 using the criteria established
in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).





A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control over
financial reporting as of December 31, 2009, our management determined that there were significant deficiencies that constituted material weaknesses, as described below.





1. Certain entity level controls establishing a “tone at the top” were considered material weaknesses. We do not have a majority of independent directors. We have no policy on fraud.  A whistleblower policy is not necessary given our small size. We do
not have a code of ethics.





2. There is a lack of monitoring of internal control as we are in the development stage and have limited resources.





3. The potential for management override exists due to our lack of independent directors.





Our management is currently evaluating remediation plans for the above control deficiencies.





In light of the existence of these control deficiencies, our management concluded that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by our internal controls.





As a result, our management has concluded that we did not maintain effective internal control over financial reporting as of December 31, 2009 based on criteria established in Internal Control—Integrated Frameworkissued by COSO.





John Kinross-Kennedy, our independent registered public accountant, was not required to and has not issued a report concerning the effectiveness of our internal control over financial reporting as of December 31, 2009. Management’s report was not subject to attestation by Mr. Kinross due to temporary rules of the SEC that permit us to provide
only the conclusions to management’s report in this annual report




Changes in Internal Control





During the fiscal year ended December 31, 2009 there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.





Item 9B. Other Information





None.




9





PART III





Item 10. Directors, Executive Officers and Corporate Governance





The following table sets forth the name, age and position of our executive officers and directors as of March 31, 2010.





Name
Age
PositionDaryl English
62
President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Secretary, Treasurer and DirectorJoseph A.M. Swanson
61
Chief Operations Officer, Vice-President and Director





Our current directors will serve as such until the next annual meeting of our shareholders or until their successors are elected and qualified. Our current executive officers hold their positions at the will of our Board of Directors. There are no arrangements, agreements or understandings between non-management security holders and management under
which non-management security holders may directly or indirectly participate in or influence the management of our affairs.





Daryl English, President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Secretary, Treasurer and Director





Daryl English has been our President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Secretary and Treasurer since February 8, 2008, and our Director since August 21, 2008. Mr. English brings a strong business background and excellent educational credentials to his positions.





Since 2000, Mr. English has been a senior business consultant with a Canadian management consulting company specializing in small and medium sized businesses. Prior to that, he acted as senior business consultant for a prominent international business consulting firm, where he specialized in organizational development and financial turn-around situations.
In 1994, Mr. English founded a communications and international business consulting company, before which he was the Vice President and Chief Financial Officer of a publicly-traded energy service company. All of this followed a successful career in commercial banking.





Over the course of his career, Mr. English has provided a broad range of business management consulting services to privately owned businesses located in Canada and the United States. Such services include, but are not limited to, organizational development and restructuring, financial management, and the development of strategies, systems and procedures
designed to increase revenues, improve profitability and provide suitable management control.





Mr. English graduated from Queen’s University in Kingston, Ontario with an MBA degree in 1996.





Joseph A.M. Swanson, Chief Operations Officer, Vice-President and Director





Joseph Swanson has been our Chief Operations Officer, Vice-President and Director since November 20, 2007. Mr. Swanson brings a significant amount of business knowledge and experience gained from a variety of industries to his positions.





For the past six years, Mr. Swanson has provided business consulting services to various private companies in a self-employed capacity. From 1990 to 2003, he acted as the marketing manager for C. Brothers Ltd., a company involved in the metal recycling industry. While at C. Brothers, Mr. Swanson was responsible for the development of sales and marketing
strategies for the provinces of British Columbia, Alberta, Saskatchewan and Manitoba. From 1980 to 1990, Mr. Swanson was the owner of Nastec Developments Ltd., a company who contracted with MacMillan-Bloedel Limited to offer several forestry-related services, specifically those related to environmental compliance issues. During this time, he was also employed with Canag R&D, an instrumental promoter of soil and water conservation, agricultural methodology and equipment, with whom he began his professional
career. While at Canag R&D, Mr. Swanson sat on the Soil Conservation Strategies Committee.


None of our directors currently serve on the board of any other public company or any company registered as an investment company.




10





Significant Employees





Other than our directors and officers, we do not have any employees. We do not expect any other individuals to make a significant contribution to our business.





Family Relationships





There are no family relationships among our directors, executive officers or persons nominated or chosen by us to become directors or executive officers.





Legal Proceedings





None of our directors, executive officers, promoters or control persons has been involved in any of the following events during the past five years:





· any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;





· any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);





· being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting
his involvement in any type of business, securities or banking  activities; or





· being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodity Futures Trading Commission to have violated any federal or state securities or commodities law, and the judgment has
not been subsequently reversed, suspended or vacated.





Section 16(a) Beneficial Ownership Compliance Reporting





Section 16(a) of the Exchange Act requires our directors, executive officers and persons who own more than ten percent (10%) of our common stock to file reports regarding ownership of, and transactions in, our securities with the SEC and to provide us with copies of those filings. Based solely on our review of the copies of such forms received by us,
or written representations from certain reporting persons, we believe that during fiscal year ended December 31, 2009 our directors, executive officers and ten percent (10%) stockholders complied with all applicable filing requirements.





Code of Ethics





We have not yet adopted a code of ethics that applies to our Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer or controller, or persons performing similar functions because we have not yet finalized the content of such a code.




11





Audit Committee





On September 30, 2009 we established an audit committee and directed the audit committee to carry out its duties in accordance with a charter. A current copy of our audit committee charter is not yet available to our security holders on our website, but we plan to make the charter available in the near future. Daryl English, our President, Chief Executive
Officer, Chief Financial Officer, Principal Accounting Officer, Secretary, Treasurer and Director, is the sole member of our audit committee.


Our audit committee has:





· reviewed and discussed our audited financial statements with management;





· recommended to our Board of Directors that the audited financial statements be included this annual report on Form 10-K;





· discussed with our independent auditors the matters required to be discussed by the statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1, AU section 380), as adopted by the Public
Company Accounting Oversight Board (the “PCAOB”) in Rule 3200T; and





· received the written disclosures and the letter from the independent accountant required by applicable requirements of the PCAOB regarding the independent accountant’s communications
with the audit committee concerning independence, and discussed with the independent accountant the independent accountant's independence.





Our Board of Directors has determined that we do not have an audit committee financial expert on our Board carrying out the duties of the audit committee. The Board has determined that the cost of hiring a financial expert to act as a director and to be a member of the audit committee or otherwise perform audit committee functions outweighs the benefits
of having an audit committee financial expert on the Board.





Director Nominees





We do not have a nominating committee. Our Board of Directors selects individuals to stand for election as members of the Board. Our Board of Directors does not have a policy with regards to the consideration of any director candidates recommended by our security holders. Our Board has determined that it is in the best position to evaluate our company’s
requirements as well as the qualifications of each candidate when the Board considers a nominee for a position on our Board. If security holders wish to recommend candidates directly to our Board, they may do so by communicating directly with our President at the address specified on the cover of this annual report.





Item 11. Executive Compensation





None of our directors or executive officers has received any compensation from us from our inception on November 16, 1999 to December 31, 2009. Pursuant to Item 402(a)(5) of Regulation S-K we have omitted all tables and columns since no compensation has been awarded to, earned by, or paid to these individuals.





Pension, Retirement or Similar Benefit Plans





There are no arrangements or plans in which we provide pension, retirement or similar benefits to our directors or executive officers. We have no material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of
the Board of Directors or a committee thereof.




12





Compensation Committee





We currently do not have a compensation committee of the Board of Directors or a committee performing a similar function. It is the view of the Board that it is appropriate for us not to have such a committee because of our size and because the Board as a whole determines executive compensation.





Compensation of Directors





We have no formal plan for compensating our directors for their service in their capacity as directors, although such directors may in the future receive stock options to purchase shares of our common stock as awarded by the Board of Directors or any compensation committee thereof. Directors are entitled to reimbursement for reasonable travel and other
out-of-pocket expenses incurred in connection with attendance at meetings of the Board. Our Board may award special remuneration to any director undertaking any special services on our behalf other than services ordinarily required of a director.





Change of Control





As of March 31, 2010 we had no pension plans or compensatory plans or other arrangements which provide compensation in the event of a termination of employment or a change in our control.





Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters





Neither we nor our wholly owned subsidiary have any compensation plans or individual compensation arrangements under which our securities are authorized for issuance to either employees or non-employees.





The following table sets forth the ownership, as of March 31, 2010, of our common stock by each of our directors, by all of our executive officers and directors as a group and by each person known to us who is the beneficial owner of more than 5% of any class of our securities. As of March 31, 2010, there were 55,234,603 shares of our common stock issued
and outstanding. All persons named have sole or shared voting and investment control with respect to the shares, except as otherwise noted. The number of shares described below includes shares which the beneficial owner described has the right to acquire within 60 days of the date of this annual report.




Title of Class
Name and Address of Beneficial Owner
Amount and Nature of Beneficial Ownership
Percent of Class
(%)Common Stock
Daryl English (1)
c/o 1048 – 1685 H Street
Blaine, Washington 98320
2,853,517
5.2Common Stock
Joseph A.M. Swanson (2)
c/o 1048 – 1685 H Street
Blaine, Washington 98320
2,772,421
5.0All Officers and Directors as a Group
5,625,938
10.2Common Stock
Wolfberry Devco of North America Inc. (3)
101 Convention Center Drive, Suite 100
Las Vegas, NV 89109
7,381,781
13.4








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(1)
Daryl English is our President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Secretary, Treasurer and Director.

(2)
Joseph A.M. Swanson is our Chief Operating Officer, Vice President and Director.

(3)
Wendy Switenky has sole voting and investment power over the shares held by Wolfberry Devco of North America Inc.





Item 13. Certain Relationships and Related Transactions, and Director Independence





On December 7, 2007 we entered into a share exchange agreement with PEWS, a privately held Nevada corporation. Pursuant to the terms of the share exchange agreement, we agreed to acquire all of the issued and outstanding shares of PEWS’s common stock in exchange for issuing 27,500,000 shares of our common stock to the shareholders of PEWS.

On December 10, 2007 PEWS entered into a license agreement with Earl Switenky doing business as UltraSafe Water Source for the marketing and distribution of UltraSafe’s water purification equipment. Mr. Switenky is our former director and was a director and officer of PEWS at the time the licensing agreement was entered into. To date we are the
only entity with rights to distribute UltraSafe’s equipment, which consists of an under-the-counter reverse osmosis water purification system under the Guardian brand name and complementary products such as shower filters.

On February 11, 2008 we entered into an amended and restated share exchange agreement with PEWS and the shareholders of PEWS, which was amended slightly to alter closing conditions on February 13, 2008. The amended agreement amended and restated the share exchange agreement dated December 7, 2007 in its entirety except for Schedule 2A, Schedule 2B and
Schedule 3 which were previously executed by the shareholders of PEWS. Pursuant to the amended agreement, we agreed to acquire all of the issued and outstanding shares of PEWS’s common stock in exchange for issuing approximately 27,734,603 shares of our common stock to the shareholders of PEWS, and we also agreed to cancel 27,500,000 shares of our issued and outstanding common stock held by two of our shareholders. The agreement closed on February 13, 2007, at which time we issued 27,734,603 shares to the
previous PEWS shareholders. After cancelling the 27,500,000 issued and outstanding shares of our common stock, the PEWS shareholders owned more than 50% of the issued and outstanding shares of our common stock.


As at February 11, 2008 the following relationships existed:


·
Daryl English, our President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Secretary, Treasurer and director, was the President and sole director of PEWS;
 
 ·
Earl Switenky, our former director, was the Secretary and Treasurer of PEWS;
 
 ·
Mr. Switenky had sole voting and investment power over 7,308,694 shares of PEWS’s common stock owned by Wolfberry Devco of North America Inc.;
 
 ·
Cindy Schattenkirk, the spouse of Mr. Switenky, owned 202,000 shares of PEWS’s common stock;
 
 ·
Mr. English owned 3,291,848 shares of PEWS’s common stock; and
 
 ·
Joseph A.M. Swanson, our Chief Operating Officer, Vice President and director, owned 3,291,848 shares of PEWS’s common stock.




At the closing of the share exchange agreement, in consideration for the shares of PEWS’s common stock, we issued 7,381,781 shares of our common stock to Wolfberry, 3,324,767 shares of our common stock to Mr. English, 3,324,767 shares of our common stock to Mr. Swanson and 202,000 shares of our common stock to Ms. Schattenkirk, the spouse of Mr.
Switenky.


Other than as described above, we have not entered into any transactions with our officers, directors, persons nominated for these positions, beneficial owners of 5% or more of our common stock, or family members of these persons wherein the amount involved in the transaction or a series of similar transactions exceeded the lesser of $120,000 or 1%
of the average of our total assets at year end for the last two completed fiscal years.





Director Independence





The OTC Bulletin Board on which our common stock is quoted on does not have any director independence requirements. We currently have two directors, Daryl English and Joseph A.M. Swanson. We do not have a definition of independence, although we plan to develop a definition of independence in the future and scrutinize our Board of Directors with regard
to this definition.




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Item 14. Principal Accountant Fees and Services





Audit and Non-Audit Fees





The following table sets forth the fees for professional audit services and the fees billed for other services rendered by our auditor, John Kinross-Kennedy, in connection with the audit of our financial statements for the years ended December 31, 2009 and 2008, and any other fees billed for services rendered during these periods:





John Kinross-KennedyPeriod from January 1, 2009 to December 31, 2009Audit fees
$

5,200Audit-related fees
$

1,600Tax fees
$

0All other fees
$

0Total
$

6,800








John Kinross-KennedyPeriod from December 1, 2007 to December 31, 2008Audit fees
$

3,000Audit-related fees
$

0Tax fees
$

0All other fees
$

0Total
$

3,000





From our inception on November 16, 1999 to September 30, 2009, our Board of Directors, performing the duties of the audit committee, reviewed all audit and non-audit related fees at least annually. Since October 1, 2009 this review has been carried out by our audit committee. Our audit committee pre-approved all audit related services for the year ended
December 31, 2009.




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PART IV





Item 15. Exhibits, Financial Statement Schedules





For our financial statements, see Item 8 set forth on page 9 of this annual report.





We have omitted financial statement schedules because they are inapplicable or the requested information is shown in our financial statements or the notes related thereto.





ExhibitNumber
ExhibitDescription31.1
Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1
Certification pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002





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SIGNATURES





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





Date: March 31, 2010
Purio Inc.By:
/s/ Daryl EnglishDaryl EnglishPresident, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Secretary, Treasurer and Director





Pursuant to the requirements of the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.





SIGNATURE

TITLE

DATE/s/ Daryl English

President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Secretary, Treasurer and Director

March 31, 2010Daryl English/s/ Joseph A.M. Swanson

Chief Operating Officer, Vice President and Director

March 31, 2010Joseph A.M. Swanson





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