UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2013

or

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

For the transition period from _____ to _____

Commission File Number: 000-30156

JANUS RESOURCES, INC.
(Exact name of registrant as specified in its charter)

Nevada
 
98-0170247
(State or other jurisdiction of incorporation)
 
(I.R.S. Employer Identification No.)
 
430 Park Avenue, Suite 702, New York, NY
 
10022
(Address of principal executive offices)
 
(Zip Code)

800-755-5815
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x 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 (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

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
x

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

As of November 14, 2013, the registrant had 63,075,122 shares of its common stock, par value $0.00001 per share, issued and outstanding.
 


 
 

 
TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION
       
         
Item 1.
Financial Statements
    3  
 
Consolidated Balance Sheets
    3  
 
Consolidated Statements of Operations
    4  
 
Consolidated Statements of Comprehensive Loss
    5  
 
Consolidated Statements of Stockholders’ Equity (Deficit)
    6  
 
Consolidated Statements of Cash Flows
    7  
 
Notes to Consolidated Financial Statements
    8  
 
 
       
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
    16  
 
 
       
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
    21  
 
 
       
Item 4.
Controls and Procedures
    21  
   
PART II - OTHER INFORMATION
       
 
 
       
Item 1.
Legal Proceedings
    22  
 
 
       
Item 1A.
Risk Factors
    22  
 
 
       
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
    22  
 
 
       
Item 6.
Exhibits
    22  
 
 
       
 
Signatures
    23  
 
 
2

 
 
PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

JANUS RESOURCES, INC.
 
(A Development Stage Company)
 
CONSOLIDATED BALANCE SHEETS
 
             
   
September 30,
   
December 31,
 
   
2013
   
2012
 
   
(unaudited)
       
ASSETS
           
Current assets
           
Cash and cash equivalents
  $ 236,099     $ 513,595  
Prepaid expenses
    1,504       7,562  
Current assets of discontinued operations
    -       800  
Total current assets
    237,603       521,957  
                 
Long-term assets of discontinued operations
    -       24,127  
Mineral properties
    519,750       519,750  
Intangible Assets
    152,854       -  
Total assets
  $ 910,207     $ 1,065,834  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
               
Current liabilities
               
Accounts payable and accrued liabilities
  $ 83,361     $ 17,973  
Accrued expenses - related parties
    74,562       9,638  
Current liabilities of discontinued operations
    -       12,932  
Total current liabilities
    157,923       40,543  
                 
Long-term liabilities of discontinued operations
    -       57,532  
Total liabilities
    157,923       98,075  
                 
STOCKHOLDERS' EQUITY
               
Preferred stock: $0.0001 par value: Authorized: 10,000,000 shares,
               
Issued and outstanding: nil
    -       -  
Common stock: $0.00001 par value: Authorized: 200,000,000 shares,
               
Issued and outstanding: 63,075,122 shares (2012: 63,075,122)
    631       631  
Additional paid-in capital
    5,526,526       5,462,236  
Accumulated deficit
    (4,456,504 )     (4,491,004 )
Accumulated deficit since development stage
    (314,265 )     -  
Accumulated other comprehensive loss
    (4,104 )     (4,104 )
Total stockholders' equity
    752,284       967,759  
Total liabilities and stockholders' equity
  $ 910,207     $ 1,065,834  
 
(The accompanying notes are an integral part of these consolidated financial statements)
 
 
3

 
 
JANUS RESOURCES, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
   
For the Three Months Ended
September 30,
   
For the Nine Months Ended
September 30,
   
From Feb. 20, 2013
(Date of Entering
Development
Stage) to
September 30,
 
   
2013
   
2012
   
2013
   
2012
   
2013
 
                               
                               
Revenue
  $ -     $ -     $ -     $ -     $ -  
                                         
Expenses
                                       
Exploration expenses
    -       -       -       11,284       -  
General and administrative expenses
    184,862       38,112       329,103       188,054       314,265  
   Total operating expenses
    184,862       38,112       329,103       199,338       314,265  
                                         
       Net loss from continuing operations
    (184,862 )     (38,112 )     (329,103 )     (199,338 )     (314,265 )
                                         
Discontinued operations
                                       
    Income / (loss) from discontinued
                                       
       oil and gas operations
    -       (424 )     -       (389 )     -  
   Gain on disposal of oil and gas operations
    -       -       49,338       -       -  
         Gain (loss) on discontinued operations
    -       (424 )     49,338       (389 )     -  
                                         
         Net loss
  $ (184,862 )   $ (38,536 )   $ (279,765 )   $ (199,727 )   $ (314,265 )
                                         
                                         
Earnings per share - basic and diluted
                                       
    Loss per common share continuing operations
    (0.00 )     (0.00 )     (0.01 )     (0.00 )        
    Income (loss) per common share discontinued operations
    -       (0.00 )     0.00       (0.00 )        
         Loss per common share
  $ (0.00 )   $ (0.00 )   $ (0.01 )   $ (0.00 )        
                                         
    Weighted average shares outstanding
    63,075,122       63,075,122       63,075,122       63,075,122          
 
(The accompanying notes are an integral part of these consolidated financial statements)
 
 
4

 
 
JANUS RESOURCES, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Unaudited)
 
   
For the Three Months Ended
September 30,
   
For the Nine Months Ended
September 30,
 
   
2013
   
2012
   
2013
   
2012
 
                         
Net loss
  $ (184,862 )   $ (38,536 )   $ (279,765 )   $ (199,727 )
Other comprehensive loss
                               
Foreign currency translation adjustments
    -       -       -       (904 )
Total comprehensive loss
  $ (184,862 )   $ (38,536 )   $ (279,765 )   $ (200,631 )
 
(The accompanying notes are an integral part of these consolidated financial statements)
 
 
5

 
 
JANUS RESOURCES, INC.
                 
(A Development Stage Company)
                 
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
For the year ended December 31, 2012 and nine month period ended September 30, 2013
(Unaudited)
 
   
Common Stock
   
Additional
   
Accumulated
   
Cumulative since
Feb 20, 2013
(Inception of
Development Stage)
Accumulated
   
Accumulated
other
comprehensive
       
   
Shares
   
Amount
   
paid-in capital
   
deficit
   
deficit
   
(loss)
   
Total
 
                                           
Balance, December 31, 2011
    63,075,122     $ 631     $ 5,462,236     $ (4,247,045 )   $ -     $ (4,104 )   $ 1,211,718  
                                                         
Net loss, December 31, 2012
    -       -       -       (243,959 )     -       -       (243,959 )
                                                         
Balance, December 31, 2012
    63,075,122       631       5,462,236       (4,491,004 )     -       (4,104 )     967,759  
                                                         
Series A Warrant
                    54,668       -       -       -       54,668  
Stock based compensation - options
    -       -       9,622       -       -       -       9,622  
                                                         
Net income (loss), September 30, 2013
    -       -       -       34,500       (314,265 )     -       (279,765 )
                                                         
Balance, September 30, 2013
    63,075,122     $ 631     $ 5,526,526     $ (4,456,504 )   $ (314,265 )   $ (4,104 )   $ 752,284  
 
(The accompanying notes are an integral part of these consolidated financial statements)
 
6

 
 
Janus Resources, Inc.
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
(A Development Stage Company)
 
For the nine months ended  September 30, 2013 and 2012
(Unaudited)
 
   
For the Nine Months Ended
September 30,
   
From Feb. 20, 2013
(Date of Entering
Development
Stage) to
September 30,
 
   
2013
   
2012
   
2013
 
                   
Cash flows from operating activities:
                 
Net loss
  $ (279,765 )   $ (199,727 )   $ (314,265 )
Adjustments to reconcile net loss to
                       
net cash flows from operating activities:
                       
Stock based compensation expense
    9,622       -       9,622  
Stock based consulting expense
    54,668       -       54,668  
Impairment and depreciation
    -       1,527       -  
Accretion of asset retirement obligation
    -       2,216       -  
Gain on disposal of oil and gas properties
    (49,338 )     -       -  
Changes in operating assets and liabilities:
                       
Decrease (increase) in receivables
    800       14,514       801  
Decrease (increase) in prepaid expenses
    6,058       (9,220 )     3,541  
(Decrease) increase in accounts payable
                       
and accrued expenses
    83,313       (15,317 )     84,451  
               Net cash flows from operating activities
    (174,642 )     (206,007 )     (161,182 )
                         
Cash flows from investing activities:
                       
    Acquisition of oil and gas properties
    -       (2,754 )     -  
    Proceeds from disposal of oil and gas properties
    3,000       -       3,000  
    Acquisition of intellectual property
    (105,854 )     -       (105,854 )
              Net cash flows from investing activities
    (102,854 )     (2,754 )     (102,854 )
                         
Effect of exchange rate changes on cash and cash equivalents
    -       (904 )     (9 )
Decrease in cash and cash equivalents
    (277,496 )     (209,665 )     (264,045 )
Cash and cash equivalents, beginning of period
    513,595       787,771       500,144  
Cash and cash equivalents , end of period
  $ 236,099     $ 578,106     $ 236,099  
                         
Supplemental disclosure of cash flow information:
                       
    Interest paid in cash
  $ -     $ -     $ -  
    Income tax paid in cash
  $ -     $ -     $ -  
Non-cash Investing and Financing Activities
                       
    Acquisition of intellectual property with accounts payable
  $ 47,000     $ -     $ -  
 
(The accompanying notes are an integral part of these consolidated financial statements)

 
7

 
 
JANUS RESOURCES, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Organization, Nature and Continuance of Operations

Janus Resources, Inc., together with its wholly owned subsidiaries (the “Company”), is in the business of developing and, if warranted, commercializing organ regeneration technologies. The Company was previously involved in the exploration and development of both mineral exploration properties and oil and gas properties. The Company sold its oil and gas properties on February 18 and 19, 2013. Effective February 20, 2013, the Company became a development stage company.

On July 29, 2013, the Company’s Board approved the disposition of its Fostung tungsten mineral properties located in Canada (the “Fostung Property”). Management is evaluating alternatives for the disposition of these mineral exploration assets. The properties have not yet been disposed of by sale and therefore are classified as assets held and used during the periods presented.

On July 12, 2013, the Company , together with its wholly owned subsidiary, Janus Acquisition Corp., a Nevada corporation (“JAC”), entered into an asset purchase agreement with Dr. Jörg Gerlach, MD, PhD, pursuant to which JAC purchased all of Dr. Gerlach’s rights, title and interest to an organ regeneration technology (collectively, the “Regeneration Technology”). The Company plans to further the development of the Regeneration Technology and, if commercially viable, bring the product to market for use in a variety of applications.

The Company has recently incurred net operating losses and operating cash flow deficits. The Company’s total accumulated deficit is $4.8 million as of September 30, 2013. The Company does not currently generate revenues and will continue to incur losses from operations and operating cash flow deficits in the future. Management believes that the Company’s cash and cash equivalent balances, anticipated cash flows from operations and other external sources of capital will be sufficient to meet our cash requirements for the next six months. The future of the Company after March 2014 will depend in large part on its ability to successfully raise capital from external sources to fund operations.

2. Significant Accounting Policies

Basis of Presentation and Principles of Accounting

As the Company is devoting substantially all of its efforts to establishing a new business, and while planned principal operations have commenced, there has been no revenue generated from sales, license fees or royalties, and as such, the Company is considered a development stage company. Accordingly, the Company’s consolidated financial statements are presented in accordance with authoritative accounting guidance related to a development stage enterprise.

The interim consolidated financial statements included herein have been prepared by the Company, without audit, in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) pursuant to Part 210 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted pursuant to such SEC rules and regulations, although the Company believes that the disclosures included are adequate to make the information presented not misleading.
 
 
8

 

In management’s opinion, the unaudited consolidated financial statements contained herein reflect all adjustments, consisting solely of normal recurring items, which are necessary for the fair presentation of our financial position, results of operations, and cash flows on a basis consistent with that of our prior audited consolidated financial statements. The Company has evaluated information about subsequent events that became available to us through the date the financial statements were issued. This information relates to events, transactions or changes in circumstances that would require us to adjust the amounts reported in the financial statements or to disclose information about those events, transactions or changes in circumstances. However, the results of operations for interim periods may not be indicative of results to be expected for the full fiscal year. Therefore, these financial statements should be read in conjunction with the Company’s audited consolidated financial statements including the notes thereto for the year ended December 31, 2012, which may be found under the Company’s profile on EDGAR.

The accounting policies followed by the Company are set out in Note 2 to the audited consolidated financial statements for the year ended December 31, 2012 and have been consistently followed in the preparation of these interim consolidated financial statements.

Principles of Consolidation

These interim consolidated financial statements have been prepared in accordance with US GAAP and include the accounts of the Company and its wholly owned subsidiaries, JAC and Fostung Resources, Limited (“Fostung”). All significant intercompany transactions and balances have been eliminated. JAC was incorporated under the laws of the State of Nevada on June 12, 2013. Fostung was incorporated on May 10, 2011, in Ontario Canada.

Applicable Accounting Guidance

Any reference in these notes to applicable accounting guidance is meant to refer to the authoritative non-governmental US GAAP as found in the Financial Accounting Standards Board’s Accounting Standards Codification.

Accounting Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenues and expenses during the reporting period. Actual results, as determined by future events, may differ from these estimates.

Cash and Cash Equivalents

The Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents. The Company did not have any cash equivalents at September 30, 2013 and December 31, 2012.

Research and Development Costs

The Company intends to outsource its research and development efforts and expense related costs as incurred, including the cost of manufacturing product for testing, licensing fees and costs associated with planning and conducting clinical trials. The value ascribed to patents and other intellectual property acquired will be capitalized as it relates to particular research and development projects that may have alternative future uses.
 
 
9

 

Stock Options

The Company measures all stock-based compensation awards using a fair value method on the date of grant and recognizes such expense in its consolidated financial statements over the requisite service period. The Company uses the Black-Scholes pricing model to determine the fair value of stock-based compensation awards on the date of grant. The Black-Scholes pricing model requires management to make assumptions regarding option lives, expected volatility, and risk free interest rates.

Income Taxes

The Company recognizes income taxes on an accrual basis based on tax positions taken, or expected to be taken, in our tax returns.  A tax position is defined as a position in a previously filed tax return or a position expected to be taken in future tax filing that is reflected in measuring current or deferred income tax assets and liabilities.  Tax positions are recognized only when it is more likely than not (i.e., likelihood of greater than 50%), based on technical merits, that the position would be sustained upon examination by taxing authorities.  Tax positions that meet the more likely than not threshold are measured using a probability-weighted approach as the largest amount of tax benefit that is greater than 50% likely of being realized upon settlement.  Income taxes are accounted for using an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in our financial statements or tax returns.  A valuation allowance is established to reduce deferred tax assets if all, or some portion, of such assets will more than likely not be realized.  No provision for income taxes was recorded during the periods presented because the Company had a net taxable loss.  Should they occur, our policy is to classify interest and penalties related to tax positions as interest expense.  Since our inception, no such interest or penalties have been incurred.

Discontinued Operations

The assets and financial results of the Company’s oil and gas properties are being reported as discontinued operations as a result of the sale thereof in February 2013. Certain amounts reported in the prior periods presented have been reclassified to conform to the current period financial statement presentation. These reclassifications have no effect on previously reported net income (loss). See “Note 3. Discontinued Oil and Gas Operations” for a summary of the amounts reclassified for the periods presented herein.

Earnings (Loss) Per Share

The Company presents both basic and diluted earnings per share (“EPS”) amounts. Basic EPS is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during the period presented. Diluted EPS amounts are based upon the weighted average number of common and common equivalent shares outstanding during the period presented. Potentially dilutive shares of common stock consisted of warrants to purchase shares of common stock (1,200,000 shares for 2013 and nil shares for 2012) and options to purchase shares of common stock (40,000 shares for 2013 and nil shares for 2012).  During the periods presented, potentially dilutive shares of common stock were not included in the computation of dilutive loss per share as to do so would be anti-dilutive.

Foreign Currency Translation

Transactions and account balances originally stated in currencies other than the U.S. dollar have been translated into U.S. dollars as follows:

·  
Revenue and expense items are translated at the average exchange rate for the period in which they are incurred.
·  
Non-monetary assets and liabilities at the rate of exchange in effect on the dates the assets were acquired or the liabilities were incurred.
·  
Monetary assets and liabilities at the exchange rate at the balance sheet date.

Exchange gains and losses are recorded in operations in the period in which they occur, except for exchange gains and losses related to translation of monetary assets and liabilities associated with mineral properties, which are deferred and included in reported value of the mineral properties.
 
 
10

 

Comprehensive Income (Loss)

Comprehensive loss is comprised of net loss and foreign currency translation adjustments for the periods presented.

Related Party Transactions

A related party is generally defined as (i) any person who holds 10% or more of the Company’s securities and their immediate families; (ii) the Company’s management; (iii) someone who directly or indirectly controls, is controlled by or is under common control with the Company; or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. See “Note 8. Related Party Transactions,” for further discussion.

3. Discontinued Oil and Gas Operations

On February 18, 2013, we completed the sale of our working interest in the Onnie Ray #1, Haile #1, Pearce #1 and Stahl #1 oil wells. We entered into an Assignment Agreement with Leexus Oil LLC, the wells operator, whereby the Company assigned its right, title and interest in the oil, gas and mineral leases and the oil and gas wells. Consideration for the assignment was the assumption of all outstanding liabilities and assumption of all future payments for any and all work performed on the wells.

On February 19, 2013, we completed the sale of our working interest in the Cooke #6 well. We entered into an Assignment Agreement with Millennium Petro-Physics, the well operator, whereby we assigned the right, title and interest in the oil, gas and mineral leases and the oil and gas wells. Consideration for the assignment was $3,000 cash.

The carrying amount of the oil and gas properties was $24,127 on the date of disposal. The related asset retirement obligation amounted to $57,532 and liabilities assumed amounted to $12,932. Including the $3,000 cash received, the Company recognized a gain of $49,338 in the nine month period ended September 30, 2013, as a result of the disposal.

The Company’s revenue, reported in discontinued operations, for the three and nine months ended September 30, 2013 were $0 and $0, respectively, and for the three and nine months ended September 30, 2012 were $7,034 and $16,549, respectively. The Company’s net income (loss) reported in discontinued operations for the three and nine months ended September 30, 2013 was $0 and $49,338, respectively, and for the three and nine months ended September 30, 2012 was $(424) and $(389), respectively. The Company has not recognized any revenue nor incurred expenses with respect to its previously owned oil and gas properties since the sale of its oil and gas properties, and will not recognize any continuing cash flows with respect to these properties in the future.

Assets and liabilities of discontinued operations in the accompanying balance sheets consist of the following:
 
    September 30, 2013     December 31, 2012  
             
Assets            
Unproven Properties   $ -     $ 537,501  
Depriciation and impairment     -       (513,374 )
Oil and gas properties, net   $ -     $ 24,127  
                 
Liabilities                
Accounts payable   $ -     $ (12,932 )
Asset retirement obligation     -       (57,532 )
    $ -     $ (70,464 )
 
 
11

 
 
4. Mineral Properties and Exploration Expenses

Foster Township, Sudbury, Ontario, Canada - Fostung Tungsten Property (the “Fostung Property”)

(a)
On June 8, 2011, pursuant to an asset purchase agreement, the Company paid CAD $500,000 in cash for the acquisition of EMC Metals Corp.’s 100% leasehold interest in two mining leases known as the Fostung Property. The Fostung Property consists of two contiguous claim blocks of 30 claims totaling 485 hectors. The nine claims covered by Mining Lease 108592 expire on October 31, 2031. The twenty-one claims covered by Mining Lease 108847 have been extended by the Ministry of Northern Development, Mines and Forestry (“MNDMF”) through March 31, 2032. The Fostung Property is located in Foster Township, Sudbury Mining Division, Ontario, Canada. It is approximately 8 kilometers southeast of the town of Espanola and 70 kilometers west-southwest of the town of Sudbury. An excellent all-weather gravel road extends from Espanola, crossing the property and providing access to the west bay of Lake Panache.
 
A production bonus in the amount of CAD $500,000 is payable to Breakwater Resources Ltd. by the Company within thirty business days following the commencement of commercial production from the property. A 1% net smelter return royalty on the property is also payable to Breakwater Resources Ltd. by the Company. No capitalized costs have been amortized as of September 30, 2013. The Company did not incur any impairment of these capitalized costs through September 30, 2013.
 
(b)
The Fostung Property also consists of four unpatented mining claims, located in Foster Township in the Sudbury Mining Division, Ontario, Canada, comprised of 26 claim units which were recorded in the name of Fostung Resources Ltd. on June 7, 2011. Two of the four mining claim blocks consisting of two contiguous claims are located to the north east of the structural trend in the two contiguous claim blocks of 30 claims referred to in (a) above. Two of the four mining claim blocks consisting of two contiguous claims are located to the south west of the structural trend in the two contiguous claim blocks of 30 claims referred to in (a) above. Leases related to each of the four claims expired on June 7, 2013. On July 18, 2013, we filed an application for relief from forfeiture with the MNDMF to renew the leases.  No response has been received as of the date of this report.  The aggregate amount required to be expended in order to renew the four claims is CAD $10,400.
 
On July 29, 2013, the Company’s Board of Directors approved the disposition of the Fostung Property. M anagement is evaluating alternatives for the disposition of these mineral exploration assets.
 
5. Intangible Assets – Intellectual Property

On July 12, 2013, the Company, together with its wholly owned subsidiary, JAC, entered into an asset purchase agreement with Dr. Jörg Gerlach, MD, PhD, pursuant to which JAC purchased all of Dr. Gerlach’s rights, title and interest in the Regeneration Technology. The Company plans to further the development of the Regeneration Technology and, if commercially viable, bring the product to market. Pursuant to the terms of the Asset Purchase Agreement, upon the closing of the transaction, the Company paid Dr. Gerlach $100,002 and issued to Dr. Gerlach a Series A Stock Purchase Warrant (the “Series A Warrant”) entitling him to purchase 1,200,000 shares (each a “Warrant Share”) of the Company’s common stock, subject to vesting milestones through July 11, 2019, at an exercise price of $0.35 per share.  Acquisition related costs amounted to $52,852 and were capitalized together with the cash payment.

The Series A Warrant was issued in exchange for services to be rendered in the future by Dr. Gerlach.  An additional agreed upon cash sum will be paid to Dr. Gerlach upon the Company attaining certain milestones related to the Regeneration Technology. The value of the Series A Warrant will be recognized as consulting expenses by the Company over the vesting term of the underlying warrant, subject to Dr. Gerlach providing ongoing consulting services to the Company with respect to the Regeneration Technology. As such, the measurement date for accounting purposes will be the date on which performance by Dr. Gerlach is completed.  The fair value of each Warrant Share is estimated at the end of each fiscal quarter during which Dr. Gerlach renders services using the Black-Scholes option pricing model.  The fair value of each Warrant Share was approximately $0.47 as of September 30, 2013.  Assumptions regarding volatility, expected term, dividend yield and risk-free interest rate are required for the Black-Scholes model and are as follows :
 
Weighted average risk-free interest rate
    1.7 %
Expected life in years
 
6.0
 
Weighted average expected volatility
    99.0 %
Expected dividend yield
    0  
 
 
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6. Common Stock Options

Approval of the 2013 Long-Term Incentive Plan

On June 20, 2013, the Board of Directors (the “Board”) adopted, subject to receiving shareholder approval, the 2013 Long-Term Incentive Plan (the “Incentive Plan”). The Incentive Plan provides for the issuance of stock options of up to 20,000,000 shares (subject to adjustment) of the Company’s common stock to officers, directors, key employees and consultants of the Company. Options granted to employees under the Incentive Plan, including directors and officers who are employees, may be incentive stock options or non-qualified stock options; options granted to others under the Incentive Plan are limited to non-qualified stock options.

The Incentive Plan is administered by the Board or a committee designated by the Board. Subject to the provisions of the Incentive Plan, the Board has the authority to determine the officers, employees and consultants to whom options will be granted, the number of shares covered by each option, vesting rights and the terms and conditions of each option that is granted to them; however, no person may be granted in any of the Company’s fiscal year, options to purchase more than 2,000,000 shares under the Incentive Plan, and the aggregate fair market value (determined at the time the option is granted) of the shares with respect to which incentive stock options are exercisable for the first time by an optionee during any calendar year cannot exceed $100,000. Options granted pursuant to the Incentive Plan are exercisable no later than ten years after the date of grant.

The exercise price per share of common stock for options granted under the Incentive Plan will be the fair market value of the Company’s common stock on the date of grant, using the closing price of the Company’s common stock on the last trading day prior to the date of grant, except for incentive stock options granted to a holder of ten percent or more of the Company’s common stock, for whom the exercise price per share will not be less than 110% of the fair market value. No option can be granted under the Incentive Plan after June 20, 2023.

As of September 30, 2013, there were 19,960,000 shares available for grant.

Stock Option Activity

The following table summarizes stock option activity for the three months ended September 30, 2013.

               
Weighted
       
               
Average
       
         
Weighted
   
Remaining
   
Aggregate
 
   
Options
   
Average
   
Contractual
   
Intrinsic
 
   
Outstanding
   
Exercise Price
   
Life (Years)
   
Value
 
                         
Balance June 30, 2013
    350,000     $ 0.72           $ -  
Options granted
    40,000     $ 0.65                
Options forfeited
    (350,000 )   $ 0.72                
Options exercised
    -       -                
Balance September 30, 2013
    40,000     $ 0.65       10     $ -  
                                 
Exercisable at September 30, 2013
    20,000     $ 0.65                  
 
 
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The fair value of each stock option is estimated at the date of grant using the Black-Scholes option pricing model. The estimated weighted-average fair value of stock options granted during the nine month period ended September 30, 2013 was approximately $0.41 per share. Assumptions regarding volatility, expected term, dividend yield and risk-free interest rate are required for the Black-Scholes model. The volatility assumption is based on the Company’s historical experience. The risk-free interest rate is based on a U.S. treasury note with a maturity similar to the option award’s expected life. The expected life represents the average period of time that options granted are expected to be outstanding. The assumptions for volatility, expected life, dividend yield and risk-free interest rate are presented in the table below:
 
Weighted average risk-free interest rate
    0.10 %
Expected life in years
    5.25  
Weighted average expected volatility
    79.0 %
Expected dividend yield
    0  
 
During the three and nine month periods ended September 30, 2013, stock-based compensation expense of $8,792 and $9,622, respectively, was recognized as general and administrative expenses. There were 20,000 stock options vested and 20,000 unvested, during three and nine months ended September 30, 2013.  There was no stock compensation expense recognized in 2012. As of September 30, 2013, the Company had $6,873 of total unrecognized compensation cost related to unvested stock options, which is expected to be recognized by September 30, 2014.

The Company issues new shares when options are exercised.

7. Commitments and Contingencies

As part of the acquisition of the Fostung Property the Company will pay to Breakwater Resources Ltd. (i) a Production Bonus in the amount of CAD $500,000 within thirty (30) business days following the commencement of commercial production from the property and (ii) a 1% Net Smelter Return royalty.

On June 27, 2012, the Company entered into an At-Will Executive Services Agreement (the “Bien Services Agreement”) with Ms. Janet Bien, pursuant to which Ms. Bien was to serve as the Company’s Chief Financial Officer. Pursuant to the Bien Services Agreement, Ms. Bien was to provide the Company with services consistent with that of a Chief Financial Officer on a part-time basis, for which she was to be paid a monthly fee of $2,400 and was to be reimbursed for any business related expenses. The Bien Services Agreement was terminable by either the Company or Ms. Bien upon written notice with or without cause. The Bien Services Agreement was terminated effective as of September 30, 2013.

On February 15, 2013, the Company entered into an agreement with Kenneth Kirkland, Ph.D. (the “Kirkland AB Agreement”) pursuant to which Dr. Kirkland will serve as a member of the Company’s Advisory Board. The Kirkland AB Agreement provides for a monthly fee of $2,000 and may be terminated by either party with a five day notice. The Kirkland AB Agreement was terminated effective as of June 30, 2013.

As part of the Company’s acquisition on July 12, 2013 of the Regeneration Technology, the Company agreed to pay Vector Asset Management, Inc. (“Vector”) a finder’s fee in the amount of $47,000 (the “Cash Fee”) within 60 days of the closing of the acquisition of the Regeneration Technology (the “Closing Date”). Vector may elect to receive the Cash Fee, or a portion thereof, by accepting a convertible promissory note (the “Vector Note”) in the principal amount of any or all of the Cash Fee otherwise payable and bearing interest at the rate of 7% per annum, payable upon the earlier of December 14, 2014, or upon demand in the event that the Company shall have effected a financing or series of financings in excess of $1,000,000. The Vector Note will be convertible into shares of the Company’s common stock at a price equal to the average closing prices of the Company’s common stock for the 10 trading days prior to the Closing Date.  As of the date of this report, no convertible promissory note has been issued.

On August 1, 2013, the Company engaged Vector to assist the Company with identifying subject matter experts in the medical device and biotechnology industries and to assist the Company with its ongoing research, development and eventual commercialization of its Regeneration Technology (collectively, the “Services”). In consideration of the Services, the Company will pay Vector a monthly consulting fee of Five Thousand Dollars ($5,000). The consulting agreement with Vector continues until December 31, 2014, unless earlier terminated by either party upon five (5) days prior written notice.  Vector is not considered a related party.

See also Note 8. Related Party Transactions.
 
 
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8. Related Party Transactions

Effective as of June 19, 2012, Mr. Joseph Sierchio, a member of the Company’s Board, was appointed as its Acting Interim President and Chief Executive Officer; and effective as of June 27, 2012, Ms. Janet Bien was appointed as the Company’s Chief Financial Officer.

On June 20, 2013, Mr. Joseph Sierchio, resigned as the Acting Interim President and Chief Executive Officer and remains a director; Ms. Rhonda B. Rosen was appointed to serve as the President and Chief Executive Officer and a member of the Board and entered into an employment agreement for a two year term (the “Rosen Employment Agreement”), subject to the earlier termination provisions contained therein. Pursuant to the terms of the Rosen Employment Agreement, Ms. Rosen is paid an annual salary of $120,000. In addition to Ms. Rosen’s salary, she is eligible to receive a cash bonus to be determined by our Board, in their sole discretion. The Rosen Employment Agreement also provides Ms. Rosen with a monthly stipend of no more than $1,500 to cover medical insurance premiums until such time as the Company can make available an alternative medical insurance plan.

On July 29, 2013, the Board appointed Dr. Kenneth Kirkland to serve as a member of the Board effective August 1, 2013. Prior to this appointment, Dr. Kirkland resigned from the Company’s Advisory Board. See “Note 7. Commitments and Contingencies.”

As compensation for their service on the Board, Dr. Kirkland and Mr. Sierchio will receive an annual retainer of $6,000, payable in equal quarterly installments in arrears and prorated for any partial quarters of service. Additionally, subject to their entering into a non-statutory stock option agreement with us, Dr. Kirkland and Mr. Sierchio were each issued incentive stock options to purchase up to 20,000 shares of our common stock at an exercise price of $0.65 per share, the closing price of the Company’s common stock as quoted on the OTC Markets Group Inc. QB tier (the “OTCQB”) on July 31, 2013, pursuant to the Incentive Plan. Subject to their continued service as a member of the Board, 10,000 of the option shares vest immediately and 10,000 of the option shares vest on the first anniversary of date of grant.

Effective September 30, 2013, Ms. Bien resigned as the Company’s Chief Financial Officer. Effective September 30, 2013, Ms. Rosen resigned as President and Chief Executive Officer, the Rosen Employment Agreement was terminated and the Company entered into an At-Will Executive Services Agreement (the “Rosen Services Agreement”), pursuant to which Ms. Rosen will serve as the Company’s Chief Financial Officer. Pursuant to the Rosen Services Agreement, Ms. Rosen will provide the Company with services consistent with that of a Chief Financial Officer on a part-time basis, for which she will be paid a monthly fee of $2,400 and will be reimbursed for any business related expenses. The Rosen Services Agreement is terminable by either the Company or Ms. Rosen upon advance written notice . The incentive stock options to purchase up to 350,000 shares of the Company’s common stock at an exercise price of $0.72 per share, previously issued to Ms. Rosen, were forfeited effective September 30, 2013.

Effective September 30, 2013, Mr. Sierchio resumed the position of Acting Interim President and Chief Executive Officer.

For the three and nine month periods ended September 30, 2013, fees of $75,040 (2012: $43,298) and $105,432 (2012: $82,210), respectively, were paid or are due to officers and directors of the Company. Amounts included in accounts payable and due to related parties at September 30, 2013 were $74,562 (December 31, 2012: $9,638).

9. Subsequent Events

There were no subsequent events to disclose as of the issue date of this report.
 
 
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes appearing elsewhere in this Quarterly Report filed on Form 10-Q. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including, but not limited to, those set forth under the heading “Risk Factors” in our Form 10-K filed with the SEC on April 1, 2013, and elsewhere in this report.

This discussion and analysis should be read in conjunction with the accompanying unaudited interim consolidated financial statements and related notes. The discussion and analysis of the financial condition and results of operations are based upon the unaudited interim consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of any contingent liabilities at the financial statement date and reported amounts of revenue and expenses during the reporting period. On an on-going basis we review our estimates and assumptions. The estimates were based on historical experience and other assumptions that we believe to be reasonable under the circumstances. Actual results are likely to differ from those estimates under different assumptions or conditions, but we do not believe such differences will materially affect our financial position or results of operations. Critical accounting policies, the policies we believe are most important to the presentation of our financial statements and require the most difficult, subjective and complex judgments, are outlined below in “Critical Accounting Policies,” and have not changed significantly.

Cautionary Note Regarding Forward-Looking Statements

In addition, certain statements made in this report may constitute “forward-looking statements”. These forward-looking statements involve known or unknown risks, uncertainties and other factors that may cause the actual results, performance, or achievements of ours to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Except for historical information, the matters set forth herein, which are forward-looking statements, involve certain risks and uncertainties that could cause actual results to differ. Potential risks and uncertainties include, but are not limited to, unexpected changes in business and economic conditions; significant increases or decreases in commodity prices; changes in interest and currency exchange rates; unanticipated grade changes; metallurgy, processing, access, availability of materials, equipment, supplies and water; determination of reserves; results of current and future exploration activities; results of pending and future feasibility studies; joint venture relationships; political or economic instability, either globally or in the countries in which we operate; local and community impacts and issues; timing of receipt of government approvals; accidents and labor disputes; environmental costs and risks; competitive factors, including competition for property acquisitions; and availability of external financing at reasonable rates or at all.

Forward-looking statements can be identified by terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continues” or the negative of these terms or other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements contained herein are reasonable, it cannot guarantee future results, levels of activity, performance or achievements. Forward-looking statements are made based on management’s beliefs, estimates, and opinions on the date the statements are made, and we undertake no obligation to update such forward-looking statements if these beliefs, estimates, and opinions should change, except as required by law.
 
 
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Overview

Company Overview

We are in the business of developing and, if warranted, commercializing organ regeneration technologies. We were previously involved in the exploration and development of both mineral exploration properties and oil and gas properties. On July 12, 2013, we, together with our wholly owned subsidiary, JAC, entered into an asset purchase agreement with Dr. Jörg Gerlach, MD, PhD, pursuant to which JAC purchased all of Dr. Gerlach’s rights, title and interest to the Regeneration Technology. We plan to further the development of the Regeneration Technology and, if commercially viable, bring the product to market. Pursuant to the terms of the Asset Purchase Agreement, upon the closing of the transaction, as further described in the Asset Purchase Agreement, we paid Dr. Gerlach an agreed upon initial sum and issued to Dr. Gerlach a Series A Stock Purchase Warrant entitling him to purchase shares of our common stock, subject to vesting milestones through July 11, 2019, at an agreed upon exercise price. An additional agreed upon sum will be paid to Dr. Gerlach upon our attaining certain milestones related to the Regeneration Technology. Pursuant to SEC Rule 24b-2, we submitted a request to the SEC for confidential treatment of certain portions of the Asset Purchase Agreement, which is still under review. Accordingly, certain terms of the Asset Purchase Agreement have not been disclosed. The disclosure of such confidential information may potentially harm our competitive position and jeopardize our ability to effectively negotiate future development and sublicensing agreements on preferential terms; and, ongoing relationship with Dr. Gerlach and our ability to negotiate favorable terms in regards to the ongoing development of our technologies.

Management and Board Appointments

On August 1, 2013, the Board appointed Dr. Kenneth Kirkland to serve as a member of the Board. As compensation for his service, Dr. Kirkland will receive an annual retainer of $6,000, payable in equal quarterly installments in arrears and prorated for any partial quarters of service. Additionally, subject to his entry into a non-statutory stock option agreement with us, Dr. Kirkland was issued incentive stock options to purchase up to 20,000 shares of our common stock at an exercise price of $0.65 per share, the closing price of our common stock as quoted on the OTCQB tier on July 31, 2013, pursuant to the Incentive Plan. Subject to his continued service as a member of the Board, 10,000 of the option shares vest immediately and 10,000 of the option shares vest on the first anniversary of Dr. Kirkland’s service.

Effective September 30, 2013, Ms. Bien resigned as Chief Financial Officer. Effective September 30, 2013, Ms. Rosen resigned as President and Chief Executive Officer and entered into an At-Will Executive Services Agreement (the “Rosen Services Agreement”), pursuant to which Ms. Rosen will serve as our Chief Financial Officer. Pursuant to the Rosen Services Agreement, Ms. Rosen will provide us with services consistent with that of a Chief Financial Officer on a part-time basis, for which she will be paid a monthly fee of $2,400 and will be reimbursed for any business related expenses. The Rosen Services Agreement is terminable by either we or Ms. Rosen upon advance written notice . The incentive stock options to purchase up to 350,000 shares of our common stock at an exercise price of $0.72 per share, previously issued to Ms. Rosen, were forfeited effective September 30, 2013.

Mineral Properties

On July 29, 2013, our Board approved the disposition of our mineral properties located in Canada.

Foster Township, Sudbury, Ontario, Canada – Fostung Tungsten Property

(a)
On June 8, 2011, pursuant to an asset purchase agreement, we paid CAD $500,000 in cash for the acquisition of EMC Metals Corp’s. 100% leasehold interest in two mining leases known as the Fostung Property. The Fostung Property consists of two contiguous claim blocks of 30 claims totaling 485 hectors. The nine claims covered by Mining Lease 108592 expire on October 31, 2031. The twenty-one claims covered by Mining Lease 108847 have been extended by the MNDMF through March 31, 2032. The Fostung Property is located in Foster Township, Sudbury Mining Division, Ontario, Canada. It is approximately 8 kilometers southeast of the town of Espanola and 70 kilometers west-southwest of the town of Sudbury. An excellent all-weather gravel road extends from Espanola, crossing the property and providing access to the west bay of Lake Panache.
 
A production bonus in the amount of CAD $500,000 is payable to Breakwater Resources Ltd. by us within thirty business days following the commencement of commercial production from the property. A 1% Net Smelter Return royalty on the property is also payable to Breakwater Resources Ltd. by us. No capitalized costs have been amortized as of September 30, 2013. We did not incur any impairment of these capitalized costs through September 30, 2013.
 
 
17

 
 
(b)
The Fostung Property also consists of four unpatented mining claims, located in Foster Township in the Sudbury Mining Division, Ontario, Canada, comprised of 26 claim units, were recorded in the name of Fostung Resources Ltd. on June 7, 2011. Two of the four mining claim blocks consisting of two contiguous claims are located to the north east of the structural trend in the two contiguous claim blocks of 30 claims referred to in (a) above. Two of the four mining claim blocks consisting of two contiguous claims are located to the south west of the structural trend in the two contiguous claim blocks of 30 claims referred to in (a) above. The leases expired on June 7, 2013; on July 18, 2013, we filed an application for relief from forfeiture with the MNDMF to renew the leases. No response has been received as of the date of this report.  The aggregate amount required to be expended in order to renew the four claims is CAD $10,400.

Results of Operations

We anticipate that our results of operations will fluctuate for the foreseeable future due to several factors, such as the progress of our research and development efforts and the timing and outcome of regulatory submissions. Due to these uncertainties, accurate predictions of future operations are difficult or impossible to make.

Continuing Operations

Our expenses consist primarily of professional fees and administrative costs. For the nine month periods ended September 30, 2013 and 2012, general and administrative expenses were $329,103 and $188,054. For the three months ended September 30, 2013 and 2012, general and administrative expenses were $184,862 and $38,112.

As a result of the foregoing, net income (loss) from continuing operations for three and nine months ended September 30, 2013 was $(184,862) and $(329,103), respectively, compared to a net loss of $(38,112) and $(199,338) for the three and nine months ended September 30, 2012.

Discontinued Operations

Net income (loss) from oil and gas activities was $49,338 and $(389) for the nine month periods ended September 30, 2013 and 2012, the former representing the gain on disposal of the oil and gas properties in February 2013.

Net income (loss) from discontinued operations for three and nine months ended September 30, 2013 was $0 and $49,338, respectively, compared to a net loss of $(424) and $(389) for the three and nine months, respectively, ended September 30, 2012.

Liquidity and Capital Resources

We currently finance our activities primarily by the private placement of securities. There is no assurance that equity funding will be accessible to us at the times and in the amounts required to fund our activities. There are many conditions beyond our control which have a direct bearing on the level of investor interest in the purchase of Company securities. We may also attempt to generate additional working capital through the operation, development, sale or possible joint venture development of our properties; however, there is no assurance that any such activity will generate funds that will be available for operations. Failure to obtain such additional financing may result in a reduction of our interest in certain properties or an actual foreclosure of our interest. Debt financing has not been used to fund our property acquisitions and exploration activities, and we have no current plans to use debt financing. We do not have “standby” credit facilities, or off-balance sheet arrangements and it does not use hedges or other financial derivatives. We have no agreements or understandings with any person as to additional financing.

We began 2013 with cash and cash equivalents of $513,595. At September 30, 2013, we had cash of $236,099. Total liabilities as of September 30, 2013 were $157,923 (December 31, 2012: $98,075).
 
 
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Our unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America and applicable to a going concern which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. Our continuation as a going concern is dependent upon the continued financial support of our shareholders, our ability to obtain necessary equity financing to continue operations, confirmation of our interest in the underlying properties, the attainment of profitable operations and/or realizing proceeds from the sale of one or more of the properties. As discussed in Note 1. Organization, Nature and Continuance of Operations to the consolidated financial statements, we have incurred recurring operating losses since inception and used cash of $174,642 from operating activities in 2013. As at September 30, 2013, we have a total accumulated deficit of $4.8 million and working capital of $79,680, which management believes is sufficient to fund operations through at least the next six months, however we intend to raise additional capital (presumably through equity offerings and/or debt borrowing) as the opportunity presents itself.

We expect to incur losses from operations for the near future. We expect to incur increasing research and development expenses. We expect our general and administrative expenses will increase in the future as we expand our business development, add infrastructure and incur additional costs related to being a public company.

Cash Flow

Operating activities: We used cash of $174,642 for the nine month period ended September 30, 2013 (2012: $206,007). The following is a breakdown of the cash and non-cash items used for operating activities, aside from the net losses in each period: Impairment and depreciation of $0 (2012: $1,527); accretion of asset retirement obligation of $0 (2012: $2,216); a non cash gain on the disposal of assets of $49,338 (2012: $0); changes in accounts receivable resulted in an increase in cash of $800 (2012: increase in cash of $14,514); changes in prepaid expenses resulted in an increase in cash of $6,058 (2012: decrease in cash of $9,220); changes in accounts payable and accrued expenses (including related party) resulted in an increase in cash of $83,313 (2012: decrease in cash of $15,317) respectively.

Investing Activities: During the nine month period ended September 30, 2013 the Company invested cash of $105,854 in the purchase of intellectual property and received cash of $3,000 from the disposal of oil and gas properties.  During the nine month period ended September 30, 2012 the Company invested cash of $2,754 in the purchase of oil and gas properties.

Financing Activities: There were no financing activities during 2013 and 2012.

Dividends

We have neither declared nor paid any dividends on our common stock. We intend to retain our earnings to finance growth and expand our operations and do not anticipate paying any dividends on our common stock in the foreseeable future.

Market Risk Disclosures

We have not entered into derivative contracts either to hedge existing risks or for speculative purposes during the three months ended September 30, 2013 and the subsequent period to November 14, 2013.

Off-balance Sheet Arrangements and Contractual Obligations

We do not have any off-balance sheet arrangements or contractual obligations at September 30, 2013, and the subsequent period to November 14, 2013, that are likely to have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that have not been disclosed in our consolidated financial statements.
 
 
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Environmental Compliance

Our previous exploration and development activities are subject to various federal, state and local laws and regulations in the countries in which we conduct our activities. These laws and regulations govern the protection of the environment, prospecting, development, production, taxes, labor standards, occupational health, mine safety, toxic substances and other matters. We believe that we have been able to comply with those laws and do not believe that compliance will has had a material adverse effect on our competitive position. We have an obligation to reclaim our properties after the surface has been disturbed by exploration methods at the site.

Critical Accounting Policies

See “Note 2. Significant Accounting Policies in the Notes to the Consolidated Financial Statements” included herein.

Related Party Transactions

Our proposed business may raise potential conflicts of interests between certain of our officers and directors and us. In the event that such a conflict of interest arises at a meeting of our directors, a director who has such a conflict will abstain from voting for or against the approval of such participation or such terms. In appropriate cases, we will establish a special committee of independent directors to review a matter in which several directors, or management, may have a conflict. From time to time, several companies may participate in the acquisition, exploration and development of natural resource properties thereby allowing for their participation in larger programs, involvement in a greater number of programs and reduction of the financial exposure with respect to any one program. It may also occur that a particular company will assign all or a portion of our interest in a particular program to another of these companies due to the financial position of the company making the assignment.

In determining whether we will participate in a particular program and the interest therein to be acquired by it, the directors will primarily consider the potential benefits to us, the degree of risk to which we may be exposed and our financial position at that time. Other than as indicated, we have no other procedures or mechanisms to deal with conflicts of interest. We are not aware of the existence of any conflict of interest as described herein.

Effective as of June 27, 2012, Ms. Janet Bien was appointed as our Chief Financial Officer.

On June 20, 2013, Mr. Joseph Sierchio, resigned as our Acting Interim President and Chief Executive Officer and remains a director; Ms. Rhonda B. Rosen was appointed to serve as our President and Chief Executive Officer.

At a Board meeting held on July 29, 2013, the Board resolved that effective as of August 1, 2013, all non-employee directors will receive an annual retainer of $6,000, payable in equal quarterly installments in arrears and prorated for any partial quarters. Additionally, subject to their entry into a non-statutory stock option agreement, all non- employee directors receive options to purchase up to 20,000 shares of our common stock, which, subject to their continued service to the Board, vest in equal installments on the date of the grant and the first anniversary of the date of the grant.

Effective as of August 1, 2013, Dr. Kenneth Kirkland was appointed to serve as a member of the Board. As per above, both Dr. Kirkland and Joseph Sierchio were granted incentive stock options to purchase up to 20,000 shares of our common stock at an exercise price of $0.65 per share, the closing price of our common stock as quoted on the OTCQB tier on July 31, 2013, pursuant to the Incentive Plan.

Effective September 30, 2013, Ms. Bien resigned as our Chief Financial Officer. Effective September 30, 2013, Ms. Rosen resigned as President and Chief Executive Officer and entered into the Rosen Services Agreement, pursuant to which Ms. Rosen serves as our Chief Financial Officer. Pursuant to the Rosen Services Agreement, Ms. Rosen will provide us with services consistent with that of a Chief Financial Officer on a part-time basis, for which she will be paid a monthly fee of $2,400 and will be reimbursed for any business related expenses.
For the three and nine month periods ended September 30, 2013, fees of $75,040 (2012: $43,298) and $105,432 (2012: $82,210), respectively, were paid or are due to officers, directors and companies controlled by our directors. Included in accounts payable at September 30, 2013 were related party liabilities of $74,562  (December 31, 2012: $9,638).
 
 
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Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

At the end of the period covered by this Quarterly Report on Form 10-Q for the nine month period ended September 30, 2013, an evaluation was carried out under the supervision of and with the participation of our management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act). Based on that evaluation the CEO and the CFO have concluded that as of the end of the period covered by this report, our disclosure controls and procedures are effective in ensuring that: (i) information required to be disclosed by us in reports that it files or submits to the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in applicable rules and forms and (ii) material information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow for accurate and timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

During the period covered by this report, there were no changes to internal control over financial reporting that materially affected or are reasonably likely to materially affect our internal control over financial reporting.
 
 
21

 
 
PART II – OTHER INFORMATION

Item 1. Legal Proceedings

None

Item 1A. Risk Factors

Smaller reporting companies are not required to provide the information required by this item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Pursuant to the terms of the Asset Purchase Agreement we entered into with Dr. Gerlach, on July 12, 2013, we issued to Dr. Gerlach a Series A Warrant entitling him to purchase shares of our common stock, subject to vesting milestones through July 11, 2019, at an exercise price of $0.35 per share. The issuance of the Series A Warrant was exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”) by reason of the securities registration exemption contained in Section 4(2) of the Securities Act for a transaction by an issuer not involving a public offering.

Item 6. Exhibits

Exhibit Index

Exhibit No.
 
Description of Exhibit
   
 
4.1
 
Series A Common Stock Purchase Warrant. (Incorporated by reference to the Form 8-K filed by Janus Resources, Inc. on July 18, 2013)
10.1
 
At-Will Executive Services Agreement between Janus Resources, Inc. and Rhonda B. Rosen dated as of October 1, 2013.*
10.2
 
Asset Purchase Agreement between Janus Resources, Inc. and Jörg Gerlach, MD, PhD, dated as of June 21, 2013. ( Incorporated by reference to the Form 8-K filed by Janus Resources, Inc. on July 18, 2013)
10.3
 
Finder’s Agreement between Janus Resources, Inc. and Vector Asset Management, Inc. dated as of August 13, 2013. (Incorporated by reference to the Form 10-Q filed by Janus Resources, Inc. on August 14, 2013)
31.1
 
Certification of Principal Executive Officer Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 .*
31.2
 
Certification of Principal Financial Officer Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1
 
Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *
101.INS
 
XBRL Instance Document**
101.SCH
 
XBRL Taxonomy Extension - Schema Document**
101.CAL
 
XBRL Taxonomy Extension - Calculation Linkbase Document**
101.DEF
 
XBRL Taxonomy Extension - Definition Linkbase Document**
101.LAB
 
XBRL Taxonomy Extension - Label Linkbase Document**
101.PRE
 
XBRL Taxonomy Extension - Presentation Linkbase Document**

* Filed herewith.

** Furnished herewith. XBRL (eXtensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
 
 
22

 
 
SIGNATURES

Pursuant to the requirements of Sections 13 or 15 (d) of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
Janus Resources, Inc.
(Registrant)
 
       
  By: /s/ Joseph Sierchio  
  Name: Joseph Sierchio  
  Title: Acting Interim President and Chief Executive Officer  
    (Principal Executive Officer)  
 
  By: /s/ Rhonda B. Rosen  
  Name: Rhonda B. Rosen  
  Title: Chief Financial Officer  
    (Principal Financial Officer)  
 
 
23
EXHIBIT 10.1
 
Janus Resources, Inc.
430 Park Avenue
Suite 702
New York, NY 10022
Telephone: (212) 246-3030 • Facsimile (212) 246-3039

October 1, 2013

Re:           At-Will Executive Services Agreement with Janus Resources, Inc.

Dear Roni:

This At-Will Executive Services Agreement (the “ Agreement ”) sets forth the terms and conditions of your engagement as an independent consultant to and by Janus Resources, Inc. (the “ Company ”). For the purposes of this Agreement, capitalized terms used but not otherwise defined in this Agreement shall have the meanings ascribed thereto in Paragraph 21 hereof. By entering into this Agreement you hereby agree that it supersedes all previous agreements entered into between you and the Company regarding your engagement by the Company, including, but not limited to the employment agreement dated as of June 20, 2013, between you and the Company, which has been terminated as of September 30, 2013.

1.           Position and Duties.

(a)             Executive Positions. In your capacity as an independent consultant to the Company hereunder, you shall be appointed by the Company to serve as its Chief Financial Officer and/or to such other positions as the Company’s Board of Directors (the “ Board ”) may from time to time designate (collectively, the “ Executive Positions ”); your services hereunder shall include, but not be limited to, the preparation and adjudication of financial statements for the Company’s quarterly and annual reports, managing the auditor relationship and preparing materials required for the auditors to issue an opinion, to assist in establishing a database for the Company’s financial documents, maintaining the Company’s financial records, preparing other materials at the Company’s request, signing financial statements and performing other duties consistent with the role of Chief Financial Officer. In performance of your duties, you shall be subject to the direction of, and be reporting directly to the Company’s President and Chief Executive Officer and the Company’s Board of Directors; anything herein to the contrary notwithstanding, if requested by the Board, you will immediately resign from any Executive Positions in which you may be serving at such time. Your execution of this Agreement constitutes your acceptance of your appointment as the Company’s Chief Financial Officer.

(b)             Part Time Efforts . While you agree to devote as much of your efforts, professional attention, knowledge, and experience as may be necessary to carry on your duties pursuant to this Agreement and the fulfillment of your responsibilities in accordance with the Executive Positions, it is acknowledged that your engagement is on a “part-time” basis. Subject further to Paragraph 19(d) hereof, you may render accounting and executive services to, or serve as a director of, any other Person without the prior approval of the Board, so long as such services do not create a conflict of interest with you fulfilling your responsibilities in your Executive Positions.
 
 
1

 

(c)             Travel. Upon reasonable notice, you shall be available to travel as the reasonable needs of the Company’s Business require. The Company shall reimburse you for reasonable childcare costs associated with travel on behalf of the Company.

(d)             Code of Ethics. You agree to continue to abide by the Code of Ethics and Business Conduct you previously executed and provided to the Company.

2.           At-Will Engagement as a Consultant.

Anything herein to the contrary notwithstanding, your engagement as a consultant with and by the Company is an “at-will engagement” arrangement and may be terminated by you or the Company at any time, with or without cause, and for any reason whatsoever, upon written notice as provided in Paragraph 10 hereof.

3.           Compensation.

You shall act in the capacity of an independent contractor and shall not be an employee of the Company during the term of this Agreement. You shall be compensated by the Company for your services hereunder as follows:

(a)           Cash Compensation

(i) Monthly Fee . Commencing October 1, 2013 (the “ Start Date ”), you shall be paid a fee of $2,400 per month (the “ Monthly Fee ”); the Monthly Fee is payable on the last day of each calendar month during the term of this Agreement. Other than the month on which your employment commences, the Monthly Fee shall be prorated for any partial months during the term of this Agreement. The Monthly Fee shall be reported to the IRS on Form 1099.

(ii) Additional Compensation for Registration Statement . If the Company requests that you provide it with services related to the review and filing of a registration statement, in addition to the Monthly Fee, the Company shall pay an hourly rate of $150, with a maximum amount for any given calendar month of $5,000.

(iii) Review of Compensation . Your compensation shall be reviewed periodically by the Company’s Board of Directors at its sole discretion.

(b)           Stock Awards

No stock awards will be granted to you upon entrance into this Agreement. Notwithstanding anything in the previous sentence to the contrary, you shall be entitled to receive stock awards in the form of stock options or restricted stock grants as the Company’s Board of Directors, in its sole discretion, may determine, pursuant to the Company’s stock incentive plan.
 
 
2

 

4.             Additional Benefits .

(a)             Business Expense Reimbursement. You shall be entitled to reimbursement for reasonable travel and other out-of-pocket expenses necessarily incurred in the performance of your duties hereunder, upon submission and approval of written statements and bills in accordance with the then regular procedures of the Company (collectively, “ Business Expense Reimbursement ”).

(b)             D&O Insurance; Officer Liability. The Company does not currently have D&O insurance.

5.           Your Representations and Warranties.

You represent and warrant to the Company that:

(a)            The execution, delivery and performance of this Agreement by you does not conflict with or result in a violation or breach of, or constitute (with or without notice or lapse of time or both) a default under any contract, agreement or understanding, whether oral or written, to which you are a party or of which you or should be aware and that there are no restrictions, covenants, agreements or limitations on your right or ability to enter into and perform the terms of this Agreement;

(b)            You are not party to any ongoing civil or criminal proceedings, and have not been party such proceedings within the past ten years, and do not know of any such proceeding that may be threatened or pending against you; and

(c)            You are not currently engaged in activities and will not knowingly engage in future activities that may cause embarrassment to the Company or tarnish the reputation or public image of the Company, including but not necessarily limited to association with or party to: any criminal behavior(s) such as drug use, theft, or any other potential or active violation of law; political controversy, civil disobedience, or public protest; lewd, lascivious behavior.

6.           [Intentionally Omitted]

7.           [Intentionally Omitted]

8.           Non-competition and Non-Solicitation and Non-Circumvention.

(a)             Non-competition. Except as authorized by the Board, during the term of this Agreement and for a period of one (1) month thereafter, you will not (except as an officer, director, stockholder, employee, agent or consultant of the Company or any subsidiary or affiliate thereof) either directly or indirectly, whether or not for consideration, (i) in any way, directly or indirectly, solicit, divert, or take away the business of any person who is or was a customer of the Company, or in any manner influence such person to cease doing business in part or in whole with Company; (ii) engage in a Competing Business; or (iii) engage in any practice the purpose or effect of which is to intentionally evade the provisions of this covenant. For purposes of this section, “ Competing Business ” means any company or business which is engaged directly or indirectly in any Company Business then carried on or planned to be carried on (if such plans were developed during the term of this Agreement) by the Company or any of its subsidiaries or affiliates.
 
 
3

 

            (b)             Non-Solicitation and Non-Circumvention . For a period of three (3) months following the termination of this Agreement, you will not directly or indirectly, whether for your account or for the account of any other individual or entity, solicit or canvas the trade, business or patronage of, or sell to, any individuals or entities that were investors, customers or employees of the Company during the term of this Agreement, or prospective customers with respect to whom a sales effort, presentation or proposal was made by the Company or its affiliates, during the one year period prior to the termination of this Agreement. Without limiting the foregoing, you shall not, directly or indirectly, (i) solicit, induce, enter into any agreement with, or attempt to influence any individual who was an employee or consultant of the Company at any time during the term of this Agreement, to terminate his or her employment relationship with the Company or to become employed or engaged by you or any individual or entity by which you are employed or for which you are acting as a consultant or other advisory capacity (ii) interfere in any other way with the employment, or other relationship, of any employee of, or consultant to, the Company or its affiliates.

(c)             Requirement to Safeguard Confidential Information. All Confidential Information of the Company is expressly acknowledged by you to be the sole property of the Company, and the disclosure of the Confidential Information shall not be deemed to confer any rights with respect to such Confidential Information on you. You will exercise reasonable care to ensure the confidentiality of the Confidential Information. All confidential information which you may now possess, or may obtain or create prior to the termination date of this Agreement, relating to the business of the Company, or any customer or supplier of the Company, or any agreements, arrangements, or understandings to which the Company is a party, shall not be disclosed or made accessible by you to any other person or entity either during the term of or after the termination of this Agreement or used by you except during the term of this Agreement in the business and for the benefit of the Company, without the prior written consent of the Company. Nothing herein shall be construed as an obligation of the Company to consent to the terms and conditions of any such request and under no circumstances shall any such approval be deemed to waive, alter or modify the terms and conditions of this Agreement. You shall return all tangible evidence of such Confidential Information to the Company prior to or upon the termination of this Agreement.

9.           Enforcement.

(a)             Provisions Reasonable. You acknowledge and agreed that:

(i)            before and since the Start Date the Company has operated and competed and will operate and compete in a global market, with respect to the Company’s Business;

(ii)           competitors of the Company are located in countries around the world;

(iii)          in order to protect the Company adequately, any enjoinder of competition would have to apply world-wide;

(iv)           during the term of this Agreement, both before and after the Start Date, on behalf of the Company, you have acquired and will acquire knowledge of, and you have come into contact with, initiated and established relationships with and will come into contact with, initiate and establish relationships with, both existing and new clients, customers, suppliers, principals, contacts and prospects of the Company, and that in some circumstances you have been or may well become the senior or sole representative of the Company dealing with such persons; and

(v)            in light of the foregoing, the provisions of Paragraph 8 are reasonable and necessary for the proper protection of the business, property and goodwill of the Company and the Company’s Business.

(b)             Enforcement. Nothing herein contained shall be construed as prohibiting the Company or you from pursuing any remedies available for any breach or threatened breach of this Agreement. A waiver by the Company or you of any breach of any provision hereof shall not operate or be construed as a waiver of a breach of any other provision of this Agreement or of any subsequent breach.
 
 
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10.           Termination.

(a)             Manner of Termination. The Company and you may terminate this Agreement, with or without cause, for any reason whatsoever, by providing thirty (30) days advance written notice (the “ Termination Notice ”), in accordance with Paragraph 17 , to the other specifying the date of termination (the “ Termination Date ”).

(b)             Effect of Termination. In the event this Agreement is terminated pursuant to Paragraph 10 (a) your rights and the Company’s obligations hereunder shall cease as of the effective date of the termination; provided, however, that the Company shall pay you: (i) your Monthly Fee, prorated through the Termination Date and (ii) your Business Expense Reimbursements through the Termination Date; the full payment to you of the items enumerated in clauses (i) and (ii) above, upon termination of this Agreement, shall completely and fully discharge and constitute a release by you of any and all obligations and liabilities of the Company to you, including, without limitation, the right to receive any other compensation hereunder, and you shall not be entitled to any severance compensation of any kind, and shall have no further right or claim to any compensation, or severance compensation under this Agreement or otherwise against the Company or its affiliates, from and after the Termination Date.

(c)             Resignation. The termination of this Agreement pursuant to this Paragraph 10 shall constitute your resignation from any and all Executive Positions and, if applicable, as a Director of the Company effective as of the Termination Date.

(d)             Return of Documents and Property. Upon the expiration or termination of this Agreement, or at any time upon the request of the Company, you (or your heirs or personal representatives) shall deliver to the Company in good order (a) all documents and materials (including, without limitation, computer files) containing Trade Secrets and Confidential Information relating to the business and affairs of the Company or its affiliates; (b) all documents, materials, equipment and other property (including, without limitation, computer files, computer programs, computer operating systems, computers, printers, scanners, pagers, telephones, credit cards and ID cards) belonging to the Company or its affiliates, which in either case are in the possession or under the your control (or the control of your heirs or personal representatives); and (c) all corporate records of the Company, including minute books, accounting related materials, audit related materials, attorney correspondence, and any other such records which may be in your possession.

(e)             Survival of Certain Provisions . Notwithstanding anything to the contrary contained herein, if this Agreement is terminated the provisions of Paragraphs 5, 8, 9, 10, 12 and 13 of this Agreement shall survive such termination and continue in full force and effect.

(f)             Relinquishment of Authority. Notwithstanding anything to the contrary set forth herein, upon written notice to you, the Company may immediately relieve you of all your duties and responsibilities hereunder and may relieve you of authority to act on behalf of, or legally bind, the Company. However, such action by the Company shall not alter the Company’s obligations to you with regard to the procedure for a termination.

11.           Successors and Assigns.

This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns. In view of the personal nature of the services to be performed under this Agreement by you, you shall not have the right to assign or transfer any of your rights, obligations or benefits under this Agreement, except as otherwise noted herein.

12.           No Reliance on Representations.

You acknowledge that you are not relying, and have not relied, on any promise, representation or statement made by or on behalf of the Company which is not set forth in this Agreement.
 
 
5

 

13.           Entire Agreements; Amendments.

This Agreement sets forth our entire understanding with respect to your engagement by the Company as a consultant, and supersedes all existing agreements between you and the Company concerning such engagement, and may be modified only by a written instrument duly executed by each of you and the Company.

14.           Waiver.

Any waiver by either party of a breach of any provision of this Agreement shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Agreement. The failure of a party to insist upon strict adherence to any term of this Agreement on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement. Any waiver must be in writing.

15.           Construction.

You and the Company have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by you and the Company and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. Any reference to any federal, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. The word “including” shall mean including without limitation. Whenever the context may require, any pronouns used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular forms of nouns and pronouns shall include the plural, and vice versa. The headings in this Agreement are solely for the convenience of reference and shall be given no effect in the construction or interpretation of this Agreement.

16.           Severability.

Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.

17.           Notices.

All notices, demands or requests made pursuant to, under or by virtue of this Agreement must be in writing and sent to the party to which the notice, demand or request is being made by (i) certified mail, return receipt requested, (ii) nationally recognized overnight courier delivery, (iii) by facsimile transmission provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party or (iv) hand delivery as follows:
 
 
6

 

To the Company:

Janus Resources, Inc.
430 Park Avenue, Suite 702
New York, NY 10022
Attention: President and Chief Executive Officer
Fax: (212) 246-3039

With a copy (which shall not constitute notice) to:

Joseph Sierchio, Esq.
Sierchio & Company, LLP
430 Park Avenue, Suite 702
New York, NY 10022
Fax: (212) 246-3039

To you:

Ms. Rhonda B. Rosen
43 Dickinson Road
Basking Ridge, NJ  07920
rhondarosen@verizon.net

Or, to such other address, facsimile number, or email address, as is specified by a party by notice to the other party given in accordance with the provisions of this Paragraph 17 . Any notice given in accordance with the provisions of this Paragraph 17 shall be deemed given (i) three (3) business days after mailing (if sent by certified mail), (ii) one (1) business day after deposit of same with a nationally recognized overnight courier service (if delivered by nationally recognized overnight courier service), or (iii) on the date delivery is made if delivered by hand or facsimile.

18.           Counterparts; Delivery by Facsimile.

(a)            This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by you and the Company and delivered to the other, it being understood that you and the Company need not sign the same counterpart. This Agreement may be executed by facsimile signature and a facsimile signature shall constitute an original for all purposes.

(b)            This Agreement, the agreements referred to herein, and each other agreement or instrument entered into in connection herewith or therewith or contemplated hereby or thereby, and any amendments hereto or thereto, to the extent signed and delivered by means of a facsimile machine, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto or to any such agreement or instrument, each other party hereto or thereto shall re-execute original forms thereof and deliver them to all other parties. No party hereto or to any such agreement or instrument shall raise the use of a facsimile machine to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile machine as a defense to the formation or enforceability of a contract and each such party forever waives any such defense.
 
 
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19.           Disclosure and Avoidance of Conflicts of Interest.

During the term of this Agreement, you will promptly, fully and frankly disclose to the Company in writing:

(a)            the nature and extent of any interest you or your Affiliates (as hereinafter defined) have or may have, directly or indirectly, in any contract or transaction or proposed contract or transaction of or with the Company or any subsidiary or affiliate of the Company;

(b)            every office you may hold or acquire, and every property you or your Affiliates may possess or acquire, whereby directly or indirectly a duty or interest might be created in conflict with the interests of the Company or your duties and obligations under this Agreement;

(c)            the nature and extent of any conflict referred to in subsection (b) above; and

(d)            you acknowledge that it is the policy of the Company that all interests and conflicts of the sort described herein be avoided, and you agree to comply with all policies and directives of the Board from time to time regulating, restricting or prohibiting circumstances giving rise to interests or conflicts of the sort described herein. During the term of this Agreement, without prior written approval of the Board, which approval may be granted or denied in its sole discretion, you shall not enter into any agreement, arrangement or understanding with any other person or entity that would in any way conflict or interfere with this Agreement or your duties or obligations under this Agreement or that would otherwise prevent you from performing your obligations hereunder, and you represent and warrant that you or your Affiliates have not entered into any such agreement, arrangement or understanding.

20.           Code Section 409A.

This Agreement shall be interpreted, construed and administered in a manner that satisfies the requirements of Sections 409A of the Internal Revenue Code of 1986, as amended from time to time and the Treasury Regulations thereunder (the “ Code ”), and any payment scheduled to be made hereunder that would otherwise violate Section 409A of the Code shall be delayed to the extent necessary for this Agreement and such payment to comply with Section 409A of the Code.

21.           Definitions.

For purposes of this Agreement, the following terms shall have the meanings ascribed to them below:

Affiliate ” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with such Person.

Company’s Business ” means the Company’s business activities and operations as conducted during the term of this Agreement, together with all services provided or planned by the Company or any of its Affiliates, during your relationship with the Company.
 
 
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Confidential Information ” shall mean any and all information in addition to Trade Secrets used by, or which is in the possession of the Company and relating to the Company’s business or assets specifically including, but not limited to, information relating to the Company’s products, services, strategies, pricing, customers, representatives, suppliers, distributors, technology, finances, employee compensation, computer software and hardware, inventions, developments, in each case to the extent that such information is not required to be disclosed by applicable law or compelled to be disclosed by any governmental authority. Notwithstanding the foregoing, the terms “ Trade Secrets ” and “ Confidential Information ” do not include information that (i) is or becomes generally available to or known by the public (other than as a result of a disclosure by you), provided, that the source of such information is not known by you to be bound by a confidentiality agreement with the Company; or (ii) is independently developed by you without violating this Agreement.
 
Person ” means any natural person, corporation, company, limited or general partnership, joint stock company, joint venture, association, limited liability company, trust, bank, trust company, land trust, business trust or other entity or organization.

Trade Secrets ” shall mean all confidential and proprietary information belonging to the Company (including current client lists and prospective client lists, ideas, formulas, compositions, inventions (whether patentable or unpatentable and whether or not reduced to practice), know-how, manufacturing and production processes and techniques, research and development information, drawings, specifications, designs, plans, proposals, technical data, copyrightable works, financial and marketing plans and customer and supplier lists and information.

22.             Further Assurances. The parties will execute such further instruments and take such further actions as may be reasonably necessary to carry out the intent of this Agreement.

23 .             Non-Employee Status; Independent Contractor . The Company and you hereby acknowledge that you are and will be an independent consultant to and not an employee (or person of similar status) of the Company or any of its Affiliates (defined below) for purposes of the Internal Revenue Code of 1986, as amended (the “ Code ”), and Sections 601-608 of the Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”). You acknowledge that you will not be paid any “wages” (as defined in the Code) in respect of the services under this Agreement, and the Company will not withhold any amounts from the consideration paid hereunder for tax purposes.

You shall be solely responsible for all taxes (including penalties and interests thereon) imposed on you by reason of the payment of any compensation, benefits or other amounts payable in respect of the this Agreement or the services under this Agreement, if any, and shall indemnify the Company and its Affiliates for any losses or damages (including reasonable attorneys’ fees) incurred or suffered by the Company or its Affiliates as a result of your failure to pay any such taxes (including any penalties and interest thereon).

24.             Governing Law. All other questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, County of New York for the adjudication of any dispute hereunder or in connection herewith or therewith, or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
 
 
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If you agree to, and accept employment in accordance with, the foregoing terms and conditions, please sign a copy of this Agreement where indicated below and return it to the Company.

Sincerely,
 
Janus Resources, Inc.
 
By: /s/ Joseph Sierchio  
Name: Joseph Sierchio  
Title: Acting Interim President and Chief Executive Officer  
 
 
ACCEPTED AND AGREED
 
 
/s/ Rhonda B. Rosen
 
Rhonda B. Rosen
 
 
10 

Exhibit 31.1

CERTIFICATION PURSUANT TO RULE 13A-14(A) OR RULE 15D-14(A)
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Joseph Sierchio, certify that:

1.
I have reviewed this quarterly report on Form 10-Q of Janus Resources, Inc.;

2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) ) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 
(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     
 
(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
     
 
(c)
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
     
 
(d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

 
(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     
 
(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 14, 2013
By:
/s/ Joseph Sierchio
 
  Name: Joseph Sierchio  
  Title: Acting Interim President and Chief Executive Officer  
   
(Principal Executive Officer)
 
 
Exhibit 31.2

CERTIFICATION PURSUANT TO RULE 13A-14(A) OR RULE 15D-14(A)
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Rhonda B. Rosen, certify that:

1.
I have reviewed this quarterly report on Form 10-Q of Janus Resources, Inc.;

2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) ) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 
(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     
 
(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
     
 
(c)
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
     
 
(d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

 
(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     
 
(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
Date: November 14, 2013
By:
/s/ Rhonda B. Rosen
 
  Name: Rhonda B. Rosen  
  Title: Chief Financial Officer  
    (Principal Financial Officer)  
Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Section 1350 of Chapter 63 of Title 18 of the United States Code), the undersigned officers of Janus Resources, Inc. (the “Company”) do hereby certify with respect to the Quarterly Report of the Company on Form 10-Q for the period ended September 30, 2013 (the “Report”) that:

(i) the Report filed by the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(ii) The information contained in that Report fairly presents, in all material respects, the financial condition and results of operations of the Company on the dates and for the periods presented therein.
 
 
JANUS RESOURCES, INC.
 
       
Date: November 14, 2013
By:
/s/ Joseph Sierchio
 
  Name: Joseph Sierchio  
  Title: Acting Interim President and Chief Executive Officer  
   
(Principal Executive Officer)
 

Date: November 14, 2013
By:
/s/ Rhonda B. Rosen
 
  Name: Rhonda B. Rosen  
  Title: Chief Financial Officer  
    (Principal Financial Officer)  
 
This certification accompanies this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.