UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)
X	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: September 30, 2009
For the quarterly period ended: March 31, 2010
	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from: _____________ to _____________

XenaCare Holdings, Inc.

(Exact name of Registrant issuer as specified in its charter)

Florida	~~333~~000-~~139595~~53916	20-3075747
(State or Other Jurisdiction	(Commission	(I.R.S. Employer
of Incorporation)	File Number)	Identification No.)

14000 Military Trail, Suite 104

Delray Beach, Florida 33484

(Address of Principal Executive Office) (Zip Code)

(561) 496-6676

(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.
		X	Yes		No
			Yes	X	No
Indicate by check mark whether the registrant has submitted electronically and posted on its Corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
			Yes		No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
Large accelerated filer	Accelerated filer
Non-accelerated filer	Smaller reporting company			X
(Do not check if a smaller reporting company
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).			Yes	X	No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
65,741,702 shares of $0.001 par value common stock at September 30, 2009.
73,742,702 shares of $0.001 par value common stock at March 31, 2010.

XENACARE HOLDINGS, INC. ~~AND SUBSIDIARIES~~

INDEX

Page PART I – FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS 1 ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS 1316 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 2124 ITEM 4T. CONTROLS AND PROCEDURES 2124 PART II – OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS 2224 ITEM 1A. RISK FACTORS 2224 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 2224 ITEM 3. DEFAULTS ONUPON SENIOR ~~DEBT~~SECURITIES 2225 ITEM 4. ~~SUBMISSION~~(REMOVED OFAND ~~MATTERS~~RESERVED) TO25 ~~A VOTE OF THE SECURITIES HOLDERS 22~~ ITEM 5. OTHER INFORMATION 2225 ITEM 6. EXHIBIT 2225 SIGNATURES 2326

PART I – FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

XenaCare Holdings, Inc. ~~and Subsidiaries~~

~~Consolidated~~ Balance Sheets

	September 30, 2009			December 31, 2008
	March 31, 2010			December 31, 2009
	(Unaudited)			~~(Audited)~~
ASSETS
Current Assets
Cash	$	~~255~~536,~~415~~503		$	~~362~~225,019
Accounts receivable		~~259~~791,~~818~~759			~~331~~30,~~027~~002
Inventory		~~286~~1,~~822~~567,492			~~311~~829,~~103~~318
Prepaid expenses and other current assets		~~138~~220,~~908~~404			~~302~~172,~~453~~008
Total Current Assets		~~940~~3,~~963~~116,158			~~944~~1,~~945~~256,347
Office Furniture and Equipment, net		~~531~~—			~~1,482~~—
Other Assets		~~273~~279,~~000~~472			273,000
TOTAL ASSETS	$	13,~~214~~395,~~494~~630		$	1,~~219~~529,~~427~~347
LIABILITIES AND SHAREHOLDERS' DEFICIT
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts payable and accrued expenses	$	1898,~~546,341~~770		$	~~857~~1,~~603~~121,889
Notes payable - current		12,~~326~~273,~~475~~751			12,~~154~~177,~~392~~138
Total Current Liabilities		23,~~872~~172,~~816~~522			23,~~011~~299,~~995~~028
Notes payable - non-current		—			—
Other liabilities		~~172,790~~—			~~257,290~~—
TOTAL LIABILITIES		3,~~045~~172,~~606~~522			23,~~269~~299,~~285~~028
COMMITMENTS AND CONTINGENCIES
Shareholder's Equity Deficit
Shareholder's Equity (Deficit)
Preferred stock, 5,000,000 shares authorized: Series A, $0.001 par value, 0 and 500,000 shares issued and outstanding at September 30, 2009 and December 31, 2008		—			500
Preferred stock, 5,000,000 shares authorized: Series E, $0.001 par value, 267,617 and 79,294 shares issued and outstanding at March 31, 2010 and December 31, 2009		270			79
Common stock, $0.001 par value, 200,000,000 shares authorized: 65,741,702 and 43,026,695 shares issued and outstanding at September 30, 2009 and December 31, 2008, respectively		65,741			43,026
Common stock, $0.001 par value, 200,000,000 shares authorized: 73,742,272 and 69,742,272 shares issued and outstanding at March 31, 2010 and December 31, 2009, respectively		73,742			69,742
Additional paid-in-capital		69,~~462~~409,~~181~~836			57,~~984~~530,~~396~~722
Stock subscription receivable		—			—
Accumulated deficit		(9,260,739	)		(9,370,224	)
Accumulated deficit		(8,359,034	)		(7,077,780	)
Total Shareholders' Equity (Deficit)		223,109			(1,769,681	)
Total Shareholders' Deficit		(1,831,112	)		(1,049,858	)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)	$	3,395,630		$	1,529,347
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT	$	1,214,494		$	1,219,427

See accompanying notes to ~~consolidated~~ financial statements.

XenaCare Holdings, Inc. and Subsidiaries

~~Consolidated~~ Statements of Operations

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	Three Months Ended March 31,
	2009			2008			2009			2008
	2010			2009
Revenue:
Product sales	$	8895,~~240~~487		$	~~328~~58,~~644~~224		$	~~79,929~~		$	~~395,286~~
Other fee revenue		—			—			—			—
Total revenue		8895,~~240~~487			~~328~~58,~~644~~224			~~79,929~~			~~395,286~~
Cost of revenue		1276,~~947~~408			~~157~~18,~~927~~940			~~24,475~~			~~178,569~~
Gross profit		6619,~~293~~079			~~170~~39,~~717~~284			~~55,454~~			~~216,717~~
		76.4	%		51.9	%		69.4	%		54.8	%
Operating costs and expenses:
Operating costs and expenses:
Selling and marketing		370,260			40,980
Selling and marketing		127,522			228,026			245,460			490,043
General and administrative		99,687			369,094
General and administrative		252,229			(181,638	)		929,831			431,567
Write downs		—			10,000
Write downs		7,951			59,160			17,951			59,160
Total operating costs and expenses		469,947			420,074
Total operating costs and expenses		387,702			105,548			1,193,242			980,770
Other income (expense)
Other income (expense)
Interest expense		(35,280	)		(32,583	)
Interest expense		(54,572	)		65,654			(130,090	)		(12,555	)
Other income		19			15,038
Other income		12,519			50			28,093			87,045
Other expenses		(4,582	)		(387	)
Other expenses		127			70,502			(41,469	)		(222,646	)
Total other income (expense)		(39,647	)		(17,932	)
Total other income (expense)		(41,926	)		136,206			(143,466	)		(148,156	)
Net Income (Loss)	$	109,485		$	(398,722	)
Net Income (Loss)	$	(423,335	)	$	201,375		$	(1,281,254	)	$	(912,209	)
Weighted average shares - basic and diluted		69,742,272			48,384,199
Weighted average shares - basic and diluted		59,491,869			25,893,338			53,938,034			25,083,088
Basic and diluted loss per share	$	0.00		$	(0.01	)
Basic and diluted loss per share	$	(0.01	)	$	0.01		$	(0.02	)	$	(0.04	)

See accompanying notes to ~~consolidated~~ financial statements.

XenaCare Holdings, Inc. and Subsidiaries

~~Consolidated~~Statement ~~Statements~~ of ~~Cash~~Changes ~~Flows~~in Equity

~~(Unaudited)~~For the Three Months Ended March 31, 2010 and the Year Ended December 31, 2009

	Nine Months Ended September 30,
	Preferred Stock						Common Stock						APIC			Accumulated Deficit			Total Shareholders' Equity
	2009			2008
	Shares			Amount			Shares			Amount
Cash Flows from Operating Activities:
December 31, 2008		500,000		$	500			43,026,695		$	43,026		$	5,984,396		$	(7,077,780	)	$	(1,049,858	)
Net loss	$	(1,281,254	)	$	(912,209	)
Shares issued
Adjustments to reconcile net loss to net cash used in operating activities:
Exchange shares		—			—			66,667			67			(67	)		—			—
Depreciation and amortization		951			951
Sale of shares		—			—			12,500,000			12,500			487,500			—			500,000
Stock issued for services		—			—
Series E (consulting services)		79,294			79			—			—			793,392			—			793,471
Changes in operating assets and liabilities:
Series F (SunPacking)		2,632			3			—			—			263,147			—			263,150
Accounts receivable		71,210			(312,414	)
Consulting services		—			—			1,000,000			1,000			15,000			—			16,000
Inventory		24,281			56,706
-		—
Prepaid expenses and other current assets		163,544			(384,475	)
Shares converted
Accounts payable and accrued expenses		688,740			(97,967	)
Series A		(500,000	)		(500	)		10,748,340			10,748			(10,248	)		—			—
Net cash used in operating activities		(332,528	)		(1,649,407	)
Series F (SunPacking)		(2,632	)		(3	)		3,000,570			3,001			(2,998	)		—			—
Cash Flows from Investing Activities:
Shares cancelled
Purchase of office furniture and equipment		—			(213	)
Exchange shares		—			—			(100,000	)		(100	)		100			—			—
Net cash used in investing activities		—			(213	)
Return of non-vested shares		—			—			(500,000	)		(500	)		500			—			—
Cash Flows from Financing Activities:
Net loss and comprehensive loss
Proceeds from notes payable		—			—
2009 Net Loss		—			—			—			—			—			(2,292,444	)		(2,292,444	)
Repayments on notes payable		35,731			—
December 31, 2009		79,294		$	79			69,742,272		$	69,742		$	7,530,722		$	(9,370,224	)	$	(1,769,681	)
Advances from (Payments to) related parties		51,850			929,459
Shares issued
Proceeds from sale of stock		500,000			719,335
Sale of shares		—			—			—			—			—			—			—
Net cash provided by financing activities		587,581			1,648,794
Series E (convert debt and accruals)		188,325			191			1,883,114			—			1,883,305
Increase (Decrease) in Cash		255,053			(826	)
Exercise of warrants		—			—			4,000,000			4,000			(4,000	)		—			—
Cash, Beginning of Period		362			1,607
Consulting services		—			—			—			—			—			—			—
Cash, End of Period	$	255,415		$	780
Shares converted
Supplemental Information:
Series A		—			—			—			—			—			—			—
Cash paid for interest	$	—		$	—
Series F (SunPacking)		—			—			—			—			—			—			—
Cash paid for taxes	$	—		$	—
Shares cancelled
NonCash Transactions:
Exchange shares		—			—			—			—			—			—			—
Conversion of preferred series A	$	10,215		$	—
Return of non-vested shares		—			—			—			—			—			—			—
Shares issued under antidilutive clauses	$	—		$	1,251
Net loss and comprehensive loss
2010 Net Income (Loss)		—			—			—			—			—			109,485			109,485
March 31, 2010		267,619		$	270			73,742,272		$	73,742		$	9,409,836		$	(9,260,739	)	$	223,109

See accompanying notes to ~~consolidated~~ financial statements.

~~XENACARE~~XenaCare ~~HOLDINGS~~Holdings, ~~INC~~Inc. ~~AND~~and ~~SUBSIDIARIES~~Subsidiaries

~~NOTES~~Statements TOof ~~CONSOLIDATED~~Cash ~~FINANCIAL STATEMENTS (Unaudited)~~Flows

~~NOTE 1. – ORGANIZATION AND NATURE OF BUSINESS~~(Unaudited)

Organization and Nature of Business


	Three Months Ended March 31,
	2010			2009
Cash Flows from Operating Activities:
Net income (loss)	$	109,485		$	(398,722	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		—			317
Changes in operating assets and liabilities:
Accounts receivable		(761,757	)		(48,355	)
Inventory		(738,175	)		(2,590	)
Prepaid expenses and other current assets		(48,396	)		(0	)
Accounts payable and accrued expenses		313,800			312,639

Net cash used in operating activities		(1,125,044	)		(136,712	)

Cash Flows from Investing Activities:
Cost of rent deposit		(6,472	)		—

Net cash used in investing activities		(6,472	)		—

Cash Flows from Financing Activities:
Proceeds from notes payable		1,500,000			—
Repayments on notes payable		(57,000	)		—
Advances from (Payments to) related parties		—			136,350

Net cash provided by financing activities		1,443,000			136,350


Increase (Decrease) in Cash		311,484			(362	)
Cash, Beginning of Period		225,019			362

Cash, End of Period	$	536,503		$	—

Supplemental Information:
Cash paid for interest	$	—		$	—
Cash paid for taxes	$	—		$	—
Non Cash Transactions:
Capitalization of debt and other accrued expenses	$	1,883,305		$	—
Conversion of preferred shares	$	—		$	10,715

~~XenaCare~~See ~~Holdings,~~accompanying ~~Inc.~~notes ~~(the “Company”, “XenaCare”, “XC Holdings”, “we”, “us” or “our”) was organized under the laws of Florida in June 2005~~ to ~~formulate,~~financial ~~market and distribute a line of clinical, life style performance and protective nutrition supplement products (“NSPs”)~~statements.

Our Clinical NSP product group has commenced the formulation and brand building of a line of NSPs for the replenishment of nutrients lost due to pharmaceutical medications, which will be sold through mass media buys (radio and television advertising), web sales and other channels of distribution.4

~~Our~~XENACARE Lifestyles Performance NSP product group is involved in the formulation of a line of NSPs for the energy/lifestyle performance market to be sold through mass media buys (radio and television advertising)HOLDINGS, ~~web sales and other channels of distribution~~INC.

~~Our~~NOTES ~~Protective~~TO ~~NSP~~FINANCIAL ~~product~~STATEMENTS group is directed to the energy/lifestyle performance market. Our initial product, SunPill™, is formulated to protect the skin when exposed to damaging ultraviolet rays. However, during the quarter, as a result of challenges we encountered in introducing this product to the marketplace, we have decided to discontinue further attempts to commercialize this product. We are currently in process of negotiating for the liquidation of existing inventory. We believe that we will able to recover our product costs and accordingly have not provided for any impairment expense. (Unaudited)

~~XenaCare~~NOTE ~~exclusively markets and distributes Cobroxin™ for Nutra Pharma Corporation (OTCBB: NPHC) in the United States~~1. ~~Cobroxin™~~– isORGANIZATION ~~the~~AND ~~first~~NATURE ~~opiate~~OF and acetaminophen-free pain reliever available as an over-the-counter formulation clinically proven to treat moderate to severe (Stage 2) pain. Available in a topical gel that relieves pain associated with joints, repetitive stress and arthritis, and in an oral spray that is formulated to relieve lower back pain, migraines, neck aches, shoulder pain, cramps and neuralgia, Cobroxin™ is derived from cobra venom. On November 3, 2009, XenaCare announced that the Chain Drug Marketing Association (CDMA) will begin inventorying Cobroxin™ for redistribution to its member pharmacies. The CDMA currently has over 6,000 independent pharmacy members throughout the United States.BUSINESS

~~XenaCare~~Organization ~~exclusively markets~~ and ~~distributes~~Nature Zeolite from Mineral Sciences, LLC within the United States. Zeolite is a cellular cleanse and detoxification product designed as an effective solution for removing heavy metals and toxins from the body. Research has also shown that the product’s ingredients may help reduce viral replication and support healthy blood sugar levels. Additionally, this product improves nutrient absorption, supports immune system function and reduces symptoms of ~~allergies.~~Business

~~History~~XenaCare ofHoldings, Inc. (the “Company”, “XenaCare”, “XC Holdings”, “we”, “us” or “our”) was organized under the laws of Florida in June 2005 to formulate, market and distribute a line of clinical and protective nutrition supplement products (“NSPs”) as well as homeopathic medication and detoxification product.

~~Initial~~Our ~~operations~~Clinical ~~have~~NSP ~~traditionally~~products ~~focused~~group onincludes ~~providing~~our aproprietary ~~small~~formulations ~~but targeted platform of poly~~-~~formulas~~ toXenaCor, ~~the~~XenaTri ~~patient~~and ~~that~~XenaZyme ~~address~~Plus, ~~key~~which ~~multi-factors~~will inbe ~~disease~~sold ~~processes~~through ~~such~~mass asmedia ~~atherosclerosis~~buys ~~and diabetes~~ (asradio ~~opposed~~and totelevision ~~the single target restrictions placed on prescription drugs that must focus on one disease factor at a time such as an HMG reductase inhibitor (Statin~~advertising), ~~that~~web ~~does~~sales ~~not~~and ~~address~~other ~~the~~channels ~~multi-factors~~ of ~~atherosclerosis)~~distribution. ~~The Company’s historical lines of NSPs are: XenaCor, XenaZymePlus and XenaTri.~~

InOur ~~mid~~Protective ~~2005~~NSP ~~the~~product ~~Company~~group ~~began~~is directed to ~~formulate~~the ~~NSPs for personal performance and~~ energy/lifestyle performance ~~products~~market. ~~The~~Our ~~Company~~initial ~~also~~product, ~~developed~~SunPill, ~~new~~is ~~distribution~~formulated ~~channels~~to ~~for~~protect the ~~historical~~skin ~~NSPs,~~when ~~including~~exposed ~~web~~to ~~site~~damaging ~~and~~ultraviolet ~~infomercials~~rays. ~~The~~However, ~~Company~~during ~~has~~the ~~also~~third ~~formulated~~quarter of 2009, as a ~~line~~result of ~~body~~challenges ~~replenishment~~we ~~NSPs,~~encountered ~~which~~in ~~are~~introducing ~~designed~~this product to ~~eliminate~~the ~~prescription~~marketplace, ~~induced~~we ~~nutrient~~have ~~depletion.~~decided Toto ~~replace~~discontinue ~~these~~further ~~nutrients,~~attempts ~~NSPs~~to ~~have~~commercialize ~~been~~this ~~formulated,~~product ~~which~~in ~~the~~its ~~Company~~current ~~believes~~formulation. ~~will~~We ~~combat~~are ~~the~~currently ~~depletion~~in ~~effects~~process of ~~commonly~~liquidating ~~prescribed~~existing ~~drugs~~inventory. ~~Additionally,~~We ~~the~~believe ~~Company~~that ~~has~~we ~~added~~will aable ~~nutritional~~to ~~supplement~~recover ~~(worldwide~~our ~~patent~~product ~~pending)~~costs ~~that~~and ~~defends~~accordingly ~~the~~have ~~skin~~not ~~from~~provided ~~the~~for ~~damaging~~any ~~effects~~impairment ofexpense. ~~the~~We ~~sun,~~are ~~and~~also developing a ~~patented~~new ~~process~~formulation for distribution in 2010.

~~October 30,~~Our ~~2007~~Homeopathic ~~XenaCare~~Medication ~~completed~~product anline ~~asset~~is ~~purchase~~lead ~~covering~~by ~~certain~~Cobroxin. ~~assets~~Cobroxin ofis 2Bthe ~~Healthy,~~first aopiate ~~division~~and ofacetaminophen-free ~~Beta~~pain ~~Pharmaceutical~~reliever ~~Corporation.~~available ~~Beta~~as ~~Pharmaceutical~~an ~~Corporation~~over-the-counter isformulation aclinically ~~$190 million~~proven ~~pharmaceutical~~to ~~company~~treat ~~with~~moderate ~~home~~to ~~offices~~severe in(Stage ~~the~~2) USpain. ~~and~~Available ~~distribution~~ in 14a ~~South~~topical ~~American~~gel ~~countries.~~that Asrelieves ~~part~~pain ofassociated ~~the~~with ~~asset purchase~~joints, ~~XenaCare~~repetitive ~~took~~stress ~~ownership~~and ofarthritis, ~~several~~and ~~product lines~~ in ~~the~~an 2Boral ~~Healthy~~spray ~~portfolio,~~that ofis ~~which~~formulated ~~B-Alert~~to ~~already~~relieve ~~has~~lower ~~slotting~~back ~~fees~~pain, ~~and~~migraines, ~~UPC~~neck ~~codes registered with McLane Company~~aches, ~~Weis~~shoulder ~~Markets~~pain, ~~Bashas’,~~cramps ~~Kinray~~ and ~~Hannaford.~~neuralgia, ~~This~~Cobroxin ~~relationship~~is ~~will~~derived ~~allow~~from ~~XenaCare~~cobra ~~immediate distribution in 14 South American countries and increased distribution in the US~~venom.

4Our Detoxification product line is led by Zeolite. We exclusively market and distribute Zeolite from Mineral Sciences, LLC within the United States. Zeolite is a cellular cleanse and detoxification product designed as an effective solution for removing heavy metals and toxins from the body. Research has also shown that the product’s ingredients may help reduce viral replication and support healthy blood sugar levels. Additionally, this product improves nutrient absorption, supports immune system function and reduces symptoms of allergies.

~~XENACARE~~History ~~HOLDINGS,~~of ~~INC.~~the ~~AND SUBSIDIARIES~~Company

~~NOTES~~While TOthe ~~CONSOLIDATED~~Company ~~FINANCIAL~~was ~~STATEMENTS~~organized ~~(Unaudited)~~in 2005, its predecessor, XenaCare LLC was organized in 2001. Thereafter, the Company entered into an exchange agreement with certain members of XenaCare LLC and such members exchanged their interest in XenaCare LLC for an aggregate of 800,000 shares of XenaCare Holdings, Inc. common stock, which represented a value of $1,600,000.

~~NOTE~~On 2.January 5, –2009, ~~SUMMARY~~XenaCare OFamended ~~SIGNIFICANT~~its ~~ACCOUNTING~~Articles ~~POLICIES~~of Incorporation to increase the number of authorized shares of common stock from 45 million to 200 million.

~~Terms~~In May, 2009, NutraPharma, Inc. awarded to XenaCare the US marketing rights to Cobroxin. NutraPharma is a biotechnology company that is developing treatments for adrenomyeloneuropathy, HIV and ~~Definitions~~multiple sclerosis. Cobroxin is the first opiate and acetaminophen-free pain reliever available as an over-the-counter formulation clinically proven to treat moderate to severe (Stage 2) pain. The Company has sales agreements with many major retailers.

~~Company~~In May, 2009, Mineral Sciences, Inc. awarded XenaCare the exclusive license to market and distribute a cellular cleanse and detoxification product called Zeolite for retail distribution designed as an effective solution for removing heavy metals and toxins from the body.

~~“XenaCare”,~~In ~~“XC Holdings”~~December, ~~“we”~~2009, ~~“us”~~all orof ~~“our”~~the Company’s subsidiaries were merged into XenaCare Holdings, Inc.

~~AICPA~~5

~~American~~XENACARE ~~Institute~~HOLDINGS, ofINC. ~~Certified Public Accountants~~

~~APB~~NOTES TO FINANCIAL STATEMENTS (Unaudited)

~~Accounting~~NOTE ~~Principles~~2. ~~Board~~– SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

~~ARB~~Terms and Definitions

~~Accounting Review Board~~Company

~~ASC~~“XenaCare”, “XC Holdings”, “we”, “us” or “our”

~~Accounting Standards Codification~~ASC

~~ASU~~Accounting Standards Codification

~~Accounting Standards Update~~ASU

~~EITF~~Accounting Standards Update

~~Emerging~~FASB ~~Issues Task Force~~

~~FASB~~Financial Accounting Standards Board

~~Financial Accounting Standards Board~~FIFO

~~FSP~~First-in, First-out

~~FASB~~GAAP ~~Staff Position~~(US)

~~FIFO~~Generally Accepted Accounting Principals

~~First-in, First-out~~NSP

~~GAAP~~Nutrition ~~(US)~~Supplement Product

~~Generally Accepted Accounting Principals~~ SEC

~~NSP~~Securities Exchange Commission

~~Nutrition~~SFAS ~~Supplement Product~~or

~~SAB~~FAS

~~Staff~~Statement of Financial Accounting ~~Bulletin~~Standards

~~SEC~~Q109

~~Securities~~Three ~~Exchange~~months ~~Commission~~Ended March 31, 2009

~~SFAS or~~Q110

~~FAS~~Three months Ended March 31, 2010

~~Statement~~Basis of ~~Financial~~ Accounting ~~Standards~~

~~Q308~~The financial statements are prepared using the accrual basis of accounting where revenues and expenses are recognized in the period in which they were incurred. The basis of accounting conforms to accounting principles generally accepted in the United States of America.

~~Three~~Principles ~~months~~of ~~Ended~~Consolidation ~~September 30,~~and ~~2008~~Presentation

~~Q309~~In 2010, the financial statements include the accounts of the Company since in December 2009, the Company merged all of its subsidiaries into the Company (XenaCare Holdings, Inc.).

~~Three~~In ~~months~~2009, ~~Ended~~the ~~September 30~~financial statements were consolidated and include the accounts of the Company (XenaCare Holdings, ~~2008~~Inc.) and its wholly-owned subsidiaries: BRS, Inc.; XenaCare, LLC; XenaStaff, LLC; and XenaCeutical, LLC and Raw Material Ingredients, Inc. All material intercompany accounts and transactions have been eliminated in consolidation.

~~9MOS08~~Interim Financial Statements

~~Nine~~The ~~months~~interim ~~Ended~~financial ~~September~~statements presented herein have been prepared pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. The interim financial statements should be read in conjunction with the Company’s annual financial statements, notes and accounting policies included in the Company’s Annual Report. In the opinion of management, all adjustments which are necessary to provide a fair presentation of financial position as of March 3031, ~~2008~~2010 and the related operating results and cash flows for the interim period presented have been made. All adjustments are of a normal recurring nature. The results of operations, for the period presented are not necessarily indicative of the results to be expected for the year ended December 31, 2010.

~~9MOS09~~Use of Estimates

~~Nine~~The ~~months~~preparation ~~Ended~~of ~~September 30~~consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Although these estimates are based on management’s knowledge of current events and actions it may undertake in the future, ~~2009~~they may ultimately differ from actual results.

~~Basis~~Risks ofand ~~Accounting~~Uncertainties

The ~~financial~~Company’s ~~statements~~business ~~are~~could ~~prepared~~be ~~using~~impacted ~~the~~by ~~accrual~~continuing ~~basis~~price ofpressure ~~accounting~~on ~~where~~its ~~revenues~~product ~~and~~manufacturing, ~~expenses~~acceptance ~~are~~of ~~recognized~~its products in the ~~period~~marketplace, new competitors, changes in ~~which~~federal ~~they~~and/or ~~were~~state ~~incurred.~~legislation ~~The~~and ~~basis~~other offactors. ~~accounting~~Adverse ~~conforms~~changes toin ~~accounting~~these ~~principles~~areas ~~generally~~could ~~accepted~~negatively inimpact the ~~United~~Company’s ~~States~~financial position, results of ~~America~~operations and cash flows.

~~Principles of Consolidation and Presentation~~6

~~The~~XENACARE ~~consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries: BRS~~HOLDINGS, ~~Inc~~INC.; ~~XenaCare, LLC; XenaStaff, LLC; and XenaCeutical, LLC and Raw Material Ingredients, Inc. All material intercompany accounts and transactions have been eliminated in consolidation.~~

~~Interim~~NOTES ~~Financial~~TO ~~Statements~~FINANCIAL STATEMENTS (Unaudited)

~~The~~NOTE ~~interim financial statements presented herein have been prepared pursuant to the rules and regulations of the SEC~~2. ~~Certain~~– ~~information~~SUMMARY ~~and~~OF ~~footnote~~SIGNIFICANT ~~disclosures~~ACCOUNTING ~~normally~~POLICIES included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. The interim financial statements should be read in conjunction with the Company’s annual financial statements, notes and accounting policies included in the Company’s Annual Report. In the opinion of management, all adjustments which are necessary to provide a fair presentation of financial position as of September 30, 2009 and the related operating results and cash flows for the interim period presented have been made. All adjustments are of a normal recurring nature. The results of operations, for the period presented are not necessarily indicative of the results to be expected for the year ended December 31, 2009.(Continued)

~~Use~~Going ~~of Estimates~~Concern

~~The~~As ~~preparation~~shown ofin ~~consolidated~~the accompanying financial statements, the Company’s operating and capital requirements in ~~conformity~~connection with ~~generally~~operations ~~accepted~~have ~~accounting~~been ~~principles~~and ~~requires~~will ~~management~~continue to ~~make~~be ~~estimates~~significant. The recurring losses from operations and ~~assumptions~~increased ~~that~~contractual ~~affect~~agreements raise doubt about the ~~amounts~~Company’s ~~reported~~ability into continue as a going concern. Based on current plans, the ~~consolidated~~Company ~~financial~~anticipates ~~statements~~that revenues earned from Cobroxin and ~~accompanying~~Zeolite ~~notes~~product sales will be the primary source of funds for operating activities. ~~Although~~In ~~these~~addition ~~estimates~~to ~~are~~existing ~~based~~cash, the Company may rely on ~~management’s~~bank ~~knowledge~~borrowing, if available, or sales of ~~current~~securities ~~events~~to meet the basic capital and ~~actions~~liquidity itneeds for the next 12 months. Additional capital may ~~undertake~~be insought to fund the ~~future~~expansion of product lines and marketing efforts, ~~they~~which may ~~ultimately~~also ~~differ~~include bank borrowing, or a private placement of securities. Our ability to continue as a going concern is dependent upon our ability to generate sales from ~~actual~~our ~~results~~new products and our obtaining adequate capital to fund losses until we become profitable. There can be no assurance that management’s plans will be successful.

~~Risks~~The financial statements have been prepared on a “going concern” basis and ~~Uncertainties~~accordingly do not include any adjustments that might result from the outcome of this uncertainty.

~~The~~Accounts Company’s business could be impacted by continuing price pressure on its product manufacturing, acceptance of its products in the marketplace, new competitors, changes in federal and/or state legislation and other factors. Adverse changes in these areas could negatively impact the Company’s financial position, results of operations and cash flows.Receivable

5Accounts receivable are reported at net realizable value. The Company establishes an allowance for doubtful accounts based upon factors pertaining to the credit risk of specific customers, historical trends, and other information. Delinquent accounts are written-off when it is determined that the amounts are uncollectible. At both March 31, 2010 and December 31, 2009, the allowance for doubtful accounts was $48,697.

~~XENACARE HOLDINGS, INC. AND SUBSIDIARIES~~Inventory

~~NOTES~~Inventory TOis ~~CONSOLIDATED~~reported ~~FINANCIAL~~at ~~STATEMENTS~~the lower of cost or market on the first-in, first-out (~~Unaudited~~FIFO) method. Our inventory is subject to expiration and accordingly quantities purchased and sell through rates are periodically monitored for potential overstocking or pending expiration as a basis for establishing the appropriate reserve for any estimated expiration or obsolescence. The Company’s principal brands are XenaCor, XenaTri, XenaZyme and its newest product lines, Cobroxin and Zeolite.

~~NOTE~~At 2.both –March 31, ~~SUMMARY~~2010 OFand ~~SIGNIFICANT~~December 31, ~~ACCOUNTING~~2009, ~~POLICIES~~the ~~(Continued)~~allowance for obsolete or expired inventory was $55,544.

~~Going~~Office ~~Concern~~Furniture and Equipment

AsOffice ~~shown~~furniture ~~in the accompanying financial statements, the Company’s operating~~ and ~~capital~~equipment ~~requirements~~are inrecorded ~~connection~~at ~~with~~cost ~~operations have been~~ and ~~will~~depreciation ~~continue~~is toprovided beusing ~~significant. The recurring losses from operations and increased contractual agreements raise doubt about~~ the ~~Company’s~~straight-line ~~ability~~method toover ~~continue as a going concern. Based on current plans,~~ the ~~Company~~estimated ~~anticipates~~useful ~~that~~lives ~~revenues~~of ~~earned from Cobroxin™ and Zeolite product sales will be~~ the ~~primary source of funds for operating activities~~assets. InExpenditures ~~addition to existing cash, the Company may rely on bank borrowing, if available, or sales of securities to meet the basic capital and liquidity needs~~ for ~~the~~repairs ~~next 12 months. Additional capital may be sought to fund the expansion of product lines~~ and ~~marketing~~maintenance ~~efforts, which may also include bank borrowing, or a private placement~~ of ~~securities.~~equipment ~~Our~~are ~~ability~~charged to ~~continue~~expense as aincurred. ~~going~~Major ~~concern~~replacements isand ~~dependent~~betterments ~~upon~~are ~~our~~capitalized ~~ability to generate sales from our new products~~ and ~~our~~depreciated ~~obtaining~~over ~~adequate~~the ~~capital~~remaining touseful ~~fund~~lives ~~losses~~of ~~until~~the ~~we become profitable~~assets. ~~There can be no assurance that management’s plans will be successful.~~

~~The~~Office ~~financial~~furniture ~~statements~~and ~~have~~equipment ~~been~~is ~~prepared~~depreciated onover avarious ~~“going~~lives ~~concern”~~ranging ~~basis~~from ~~and~~5 ~~accordingly~~to do10 ~~not~~years. ~~include~~Depreciation ~~any~~expense ~~adjustments~~for ~~that~~the ~~might~~three ~~result~~months ~~from~~ended March 31, 2010 and the ~~outcome~~year ofended ~~this~~December 31, ~~uncertainty~~2009 was $0 and $1,482, respectively.

~~Accounts~~Revenue ~~Receivable~~Recognition

~~Accounts~~The ~~receivable~~Company’s ~~are~~product ~~reported~~revenues atrepresent ~~net~~primarily ~~realizable~~sales ~~value.~~of ~~The~~SunPill, ~~Company~~XenaCor, ~~establishes~~XenaTri, anXenaZyme ~~allowance~~and ~~for~~Cobroxin. ~~doubtful~~Revenue ~~accounts~~is ~~based~~recognized ~~upon~~when ~~factors~~a ~~pertaining~~product tois ~~the~~shipped. ~~credit~~Product ~~risk~~is ofnot ~~specific~~shipped ~~customers,~~until ~~historical~~check ~~trends,~~or ~~and~~credit ~~other~~card ~~information.~~payment ~~Delinquent~~is ~~accounts~~received ~~are~~from ~~written-off~~the ~~when~~customer. itThe isCompany ~~determined~~manages ~~that~~ the ~~amounts~~collection ~~are~~process ~~uncollectible.~~for Attransactions ~~September 30,~~processed ~~2009~~on ~~and~~its ~~December 31~~website, ~~2008,~~but ~~the~~it ~~allowance~~outsources ~~for~~its ~~doubtful~~fulfillment ~~accounts~~(delivery) ~~was~~process ~~$48,697~~to ~~and~~a ~~$0,~~third ~~respectively~~party for certain products.

~~Inventory~~7

~~Inventory~~XENACARE ~~is reported at the lower end of cost or market on the first-in~~HOLDINGS, ~~first-out (FIFO) method~~INC. Our inventory is subject to expiration and accordingly quantities purchased and sell through rates are periodically monitored for potential overstocking or pending expiration as a basis for establishing the appropriate reserve for any estimated expiration or obsolescence. The Company’s principal brands are XenaCor, XenaTri, XenaZyme, Body Replenishment Line and its newest product lines, Cobroxin™ and Zeolite™.

~~Office~~NOTES ~~Furniture~~TO ~~and~~FINANCIAL ~~Equipment~~STATEMENTS (Unaudited)

~~Office~~NOTE ~~furniture and equipment are recorded at cost and depreciation is provided using the straight-line method over the estimated useful lives of the assets~~2. ~~Expenditures~~– ~~for~~SUMMARY ~~repairs~~OF ~~and~~SIGNIFICANT ~~maintenance~~ACCOUNTING ofPOLICIES ~~equipment are charged to expense as incurred. Major replacements and betterments are capitalized and depreciated over the remaining useful lives of the assets.~~(Continued)

~~Office~~The ~~furniture~~Company’s ~~and~~revenue ~~equipment~~recognition ispolicies ~~depreciated~~are ~~over~~in ~~various~~compliance ~~lives~~with ~~ranging~~ASC ~~from~~Topic 5605, toRevenue 10Recognition, ~~years.~~which ~~Depreciation~~establishes ~~expense~~criteria ~~for~~that ~~the~~must ~~nine~~be ~~months~~satisfied ~~ended~~before ~~September 30,~~revenue ~~2009~~is realized or realizable and ~~2008~~earned. ~~was~~The ~~$951~~Company ~~and~~recognizes ~~$951,~~revenue ~~respectively.~~when all of the following four criteria are met:

~~Revenue Recognition~~·

~~The~~persuasive ~~Company’s~~evidence ~~product revenues represent primarily sales~~ of ~~SunPill™, XenaCor, XenaTri, XenaZyme and the Body Replenishment Line. The B-Alert or 2BHealthy product lines have generated nominal revenue. Revenue is recognized when~~ a ~~product~~sales isarrangement ~~shipped. Product is not shipped until check or credit card payment is received from the customer. The Company manages the collection process for transactions processed on its website~~exists, ~~but it outsources its fulfillment (delivery) process to a third party for certain products.~~

The Company’s revenue recognition policies are in compliance with SAB 104, Revenue Recognition, which establishes criteria that must be satisfied before revenue is realized or realizable and earned. The Company recognizes revenue when all of the following four criteria are met:·

·delivery has occurred,

~~persuasive evidence of a sales arrangement exists,~~·

·the sales price is fixed or determinable, and

~~delivery has occurred,~~·

·collectability is probable.

Shipping and handling charges related to sales transactions are recorded as sales revenues when billed to customers or included in the sales price isin ~~fixed~~accordance orwith ~~determinable~~ASC Topic 605, shipping and handling costs are included in cost of revenue.

·The Company accepts product returns and will issue a credit, refund or product exchange. To date, product returns have occurred but are not considered material. The Company does not have a product return reserve established.

~~collectability~~Research isand ~~probable.~~Development

6The Company does not engage in research and development as defined in ASC Topic 730 Research and Development Costs. However, the Company does incur formulation costs that include salaries, materials and consultant fees. These costs are classified as selling, general and administrative expenses in the consolidated statements of operations.

~~XENACARE~~Income ~~HOLDINGS, INC. AND SUBSIDIARIES~~Taxes

~~NOTES~~We TOrecognize ~~CONSOLIDATED~~deferred ~~FINANCIAL~~tax ~~STATEMENTS~~assets ~~(Unaudited)~~and liabilities based on differences between the financial reporting and tax bases of assets and liabilities using the enacted tax rates and laws that are expected to be recovered. We provide a valuation allowance for deferred tax assets for which we do not consider realization of such assets to be more likely than not.

~~NOTE~~Earnings 2.per ~~– SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)~~share

~~Shipping~~The Company computes basic and ~~handling~~diluted ~~charges~~earnings ~~related~~per toshare ~~sales~~amounts ~~transactions~~in ~~are~~accordance ~~recorded~~with asASC ~~sales~~Topic ~~revenues~~260, ~~when~~Earnings ~~billed~~per Share. Basic earnings per share is computed by dividing net income (loss) available to ~~customers~~common orshareholders ~~included~~by inthe weighted average number of common shares outstanding during the ~~sales~~reporting ~~price~~period. inDiluted ~~accordance~~earnings ~~with~~per ~~ASC~~share ~~Topic~~reflects ~~605,~~the ~~formerly~~potential ~~EITF~~dilution ~~00-10,~~that “could ~~Accounting~~occur ~~for~~if ~~Shipping~~stock options and ~~Handling~~other ~~Fees~~commitments ~~and~~to ~~Costs.” Shipping~~issue ~~and~~common ~~handling~~stock ~~costs~~were ~~are~~exercised ~~included~~or equity awards vest resulting in ~~cost~~the issuance of ~~revenue~~common stock that could share in the earnings of the Company.

~~The~~Segment Company accepts product returns and will issue a credit, refund or product exchange. To date, product returns have occurred but are not considered material. The Company does not have a product return reserve established.Information

~~Research~~ASC Topic 280, Disclosures about Segments of an Enterprise and ~~Development~~Related Information, established standards for the way that public business enterprises report information about operating segments in annual financial statements and requires those enterprises to report selected information about operating segments in interim financial reports issued to stockholders. The Company operates in one segment for management reporting purposes.

The Company does not engage in research and development as defined in ASC Topic 730, formerly SFAS 2, “Accounting for Research and Development Costs.” However, the Company does incur formulation costs that include salaries, materials and consultant fees. These costs are classified as selling, general and administrative expenses in the consolidated statements of operations.8

~~Income~~XENACARE ~~Taxes~~HOLDINGS, INC.

WeNOTES ~~recognize~~TO ~~deferred~~FINANCIAL ~~tax~~STATEMENTS assets and liabilities based on differences between the financial reporting and tax bases of assets and liabilities using the enacted tax rates and laws that are expected to be recovered. We provide a valuation allowance for deferred tax assets for which we do not consider realization of such assets to be more likely than not.(Unaudited)

~~Earnings~~NOTE ~~per~~3. ~~share~~– RECENT ACCOUNTING PRONOUNCEMENTS

~~The~~Recent ~~Company~~accounting ~~computes~~pronouncements ~~basic~~that and diluted earnings per share amounts in accordance with ASC Topic 260, formerly SFAS 128, “Earnings per Share” Basic earnings per share is computed by dividing net income (loss) available to common shareholders by the ~~weighted~~Company ~~average~~has ~~number~~adopted ofor ~~common shares outstanding during the reporting period. Diluted earnings per share reflects the potential dilution~~ that ~~could~~will ~~occur~~be ifrequired ~~stock options and other commitments~~ to ~~issue~~adopt ~~common stock were exercised or equity awards vest resulting~~ in the ~~issuance~~future ofare ~~common~~summarized ~~stock that could share in the earnings of the Company~~below.

~~Segment~~See ~~Information~~recently filed Form 10-K for the year ended December 31, 2009.

~~ASC~~Other ~~Topic~~ASUs ~~280,~~not ~~formerly~~effective ~~SFAS~~until ~~131~~after December 31, ~~“Disclosures about Segments of an Enterprise and Related Information~~2009,” ~~established~~are ~~standards~~not ~~for~~expected ~~the way that public business enterprises report information about operating segments in annual financial statements and requires those enterprises~~ to ~~report~~have ~~selected~~a ~~information~~significant ~~about~~effect ~~operating~~on ~~segments~~the inCompany’s ~~interim~~consolidated financial ~~reports~~position ~~issued~~or toresults ~~stockholders.~~of ~~The Company operates in one segment for management reporting purposes~~operations.

NOTE 34. – ~~RECENT ACCOUNTING PRONOUNCEMENTS~~INVENTORY

~~Recent~~Significant ~~accounting~~components ~~pronouncements~~of ~~that~~inventory ~~the~~at ~~Company~~March 31, ~~has~~2010 ~~adopted~~and orDecember 31, ~~that~~2009 ~~will~~consist ~~be required to adopt in the future are summarized below.~~of:

In June 2009, FASB issued its final statement SFAS 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles a Replacement of FASB Statement No. 162”. SFAS 168 made the FASB Accounting Standards Codification (the Codification) the single source of U.S. GAAP used by nongovernmental entities in the preparation of financial statements, except for rules and interpretive releases of the SEC under authority of federal securities laws, which are sources of authoritative accounting guidance for SEC registrants. The Codification is meant to simplify user access to all authoritative accounting guidance by reorganizing U.S. GAAP pronouncements into roughly 90 accounting topics within a consistent structure; its purpose is not to create new accounting and reporting guidance. The Codification supersedes all existing non-SEC accounting and reporting standards and was effective for the Company beginning July 1, 2009. Following SFAS 168, the Board will not issue new standards in the form of Statements, FASB Staff Positions, or Emerging Issues Task Force Abstracts; instead, it will issue Accounting Standards Updates (ASU). The FASB will not consider ASUs as authoritative in their own right; these updates will serve only to update the Codification, provide background information about the guidance, and provide the bases for conclusions on the change(s) in the Codification.


	2010			2009

Bulk product	$	96,000		$	96,000
Merchandise inventory		1,527,036			788,862
		1,623,036			884,862
Allowances for expiration		(55,544	)		(55,544	)

	$	1,567,492		$	829,318

7Bulk product – Bulk product consists of completed unpackaged loose SunPill product that has been stored in barrels awaiting commercial packaging to make it market ready for distribution. As discussed below, the Company has arranged for the disposition of its existing SunPill inventory.

~~XENACARE~~Merchandise ~~HOLDINGS,~~inventory ~~INC~~- Merchandise inventory consists primarily of the Cobroxin and SunPill product along with lesser quantities of XenaCor. ~~AND~~Our ~~SUBSIDIARIES~~formulations are batch controlled and carry an expiration date in accordance with applicable government regulations. Any product approaching their expiration date have been destroyed and removed from the inventory. Continued delays in fully implementing our marketing and distribution programs have resulted in significantly slower than anticipated sales in 2009 and 2008. Consequently, we have established an allowance on the remaining inventory, based on the estimated sell through rate for each product, before their expiration.

~~NOTES~~As TOa ~~CONSOLIDATED~~result ~~FINANCIAL~~of ~~STATEMENTS~~the ~~(Unaudited)~~suspension of the sales agreement for SunPill, which contained the potential right of return, all unsold product was returned. Accordingly, the Company currently recognizes approximately $120,504 of returned SunPill product. Subsequent to December 31, 2009 the Company has arranged for the liquidation of this merchandize along with any bulk product. The Company has fully reserved for estimated loss associated with the disposition.

~~NOTE 3. – RECENT ACCOUNTING PRONOUNCEMENTS (Continued)~~9

InXENACARE ~~August 2009~~HOLDINGS, ~~the FASB issued ASU 2009-05 which includes amendments to Subtopic 820-10, “Fair Value Measurements and Disclosures—Overall”~~INC. The update provides clarification that in circumstances, in which a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using one or more of the techniques provided for in this update. The amendments in this ASU clarify that a reporting entity is not required to include a separate input or adjustment to other inputs relating to the existence of a restriction that prevents the transfer of the liability and also clarifies that both a quoted price in an active market for the identical liability at the measurement date and the quoted price for the identical liability when traded as an asset in an active market when no adjustments to the quoted price of the asset are required are Level 1 fair value measurements. The guidance provided in this ASU is effective for the first reporting period, including interim periods, beginning after issuance. The adoption of this standard did not have a material impact on the Company’s consolidated financial position and results of operations.

InNOTES ~~September 2009,~~TO ~~the~~FINANCIAL ~~FASB~~STATEMENTS ~~issued ASU 2009-06, Income Taxes~~ (~~Topic 740~~Unaudited), ”Implementation Guidance on Accounting for Uncertainty in Income Taxes and Disclosure Amendments for Nonpublic Entities”, which provides implementation guidance on accounting for uncertainty in income taxes, as well as eliminates certain disclosure requirements for nonpublic entities. For entities that are currently applying the standards for accounting for uncertainty in income taxes, this update shall be effective for interim and annual periods ending after September 15, 2009. For those entities that have deferred the application of accounting for uncertainty in income taxes in accordance with paragraph 740-10-65-1(e), this update shall be effective upon adoption of those standards. The adoption of this standard is not expected to have an impact on the Company’s consolidated financial position and results of operations since this accounting standard update provides only amends implementation and disclosure.

InNOTE ~~September 2009, the FASB has published ASU No~~5. ~~2009-12,~~ “Fair Value Measurements and Disclosures (Topic 820) - Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)”. This ASU amends Subtopic 820-10, “Fair Value Measurements and Disclosures – ~~Overall”,~~ACCOUNTS toPAYABLE ~~permit~~AND aACCRUED reporting entity to measure the fair value of certain investments on the basis of the net asset value per share of the investment (or its equivalent). This ASU also requires new disclosures, by major category of investments including the attributes of investments within the scope of this amendment to the Codification. The guidance in this Update is effective for interim and annual periods ending after December 15, 2009. Early application is permitted. The Company is in the process of evaluating the impact of this standard on its consolidated financial position and results of operations. The adoption of this standard did not have an impact on the Company’s consolidated financial position and results of operations.EXPENSES

InSignificant ~~October 2009,~~components the FASB has published ASU 2009-13, “Revenue Recognition (Topic 605)-Multiple Deliverable Revenue Arrangements”, which addresses the accounting for multiple-deliverable arrangements to enable vendors to account for products or services (deliverables) separately rather than as a combined unit. Specifically, this guidance amends the criteria in Subtopic 605-25, “Revenue Recognition-Multiple-Element Arrangements”, for separating consideration in multiple-deliverable arrangements. This guidance establishes a selling price hierarchy for determining the selling price of aaccounts ~~deliverable,~~payable ~~which is based on: (a) vendor-specific objective evidence; (b) third-party evidence; or (c) estimates. This guidance also eliminates the residual method of allocation~~ and ~~requires~~accrued ~~that~~expenses ~~arrangement consideration be allocated~~ at the inception of the arrangement to all deliverables using the relative selling price method and also requires expanded disclosures. The guidance in this update is effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after JuneMarch 1531, 2010. ~~Early adoption is permitted. The adoption of this standard did not have an impact on the Company’s consolidated financial position~~ and ~~results~~December 31, of2009 ~~operations.~~consist of:

In October 2009, the FASB has published ASU 2009-14, “Software (Topic 985)-Certain Revenue Arrangements that Include Software Elements” and changes the accounting model for revenue arrangements that include both tangible products and software elements. Under this guidance, tangible products containing software components and nonsoftware components that function together to deliver the tangible product's essential functionality are excluded from the software revenue guidance in Subtopic 985-605, “Software-Revenue Recognition”. In addition, hardware components of a tangible product containing software components are always excluded from the software revenue guidance. The guidance in this ASU is effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. Early adoption is permitted. The adoption of this standard did not have an impact on the Company’s consolidated financial position and results of operations.


	2010		2009

Trade payables	$	761,584	$	447,785
Accrued accounting and legal fees		16,500		28,500
Accrued payroll		—		433,333
Accrued interest		120,686		158,104
Other accrued expenses		—		54,167

	$	898,770	$	1,121,889

~~Other~~NOTE ~~ASUs~~6. ~~not~~– ~~effective~~NOTES ~~until~~PAYABLE ~~after~~- ~~September 30, 2009, are not expected to have a significant effect on the Company’s consolidated financial position or results of operations.~~CURRENT

8Significant components of notes payable – current at March 31, 2010 and December 31, 2009 consist of:

XENACARE HOLDINGS, INC. AND SUBSIDIARIES


	2010		2009

Related parties	$	96,751	$	500,138
Shareholder loans		1,200,000		700,000
Sun Packing, Inc.		977,000		977,000

	$	2,273,751	$	2,177,138

~~NOTES~~Related TOParties ~~CONSOLIDATED~~- ~~FINANCIAL~~Notes ~~STATEMENTS~~payable ~~(Unaudited)~~to related parties were issued in various traunches, each mature one year from issuance and bear interest at 15%. The lenders are related parties to the Company through common executive management as our CFO and President are also officers in the lenders. The notes matured on June 30, 2009 however, during the first quarter of 2010, the parties agreed to convert $346,387 of these notes into 34,639 shares of Series E preferred stock. In addition, during the first quarter of 2010, the Company repaid $57,000 of the remaining outstanding balance due after partial conversion.

~~NOTE~~Shareholder 4.Loans – ~~INVENTORY~~Unsecured notes payable to shareholder were issued in various traunches commencing in January 2009, each mature one year from issuance and bear interest at from 12%-15%. During the first quarter of 2010, the shareholder advanced an additional $1,500,000 and then converted $1,000,000 of outstanding debt into 100,000 shares of Series E preferred shares.

~~Significant~~Sun ~~components~~Packing, ofInc. ~~inventory~~- atThe ~~September 30~~Sun Packing, ~~2009~~Inc. note originated during merger negotiations with the Company during the third and ~~December 31,~~fourth quarters of 2008. ~~consist~~The ~~primarily~~parties ~~of:~~were unable to reach an agreement on several key issues and the merger negotiations were discontinued. The note is personally guaranteed by our officers and bears interest at 6%. The note is payable upon demand. To date the note has not been called.

	2009			2008
Bulk product	$	96,640		$	112,061
Merchandise inventory		245,726			239,164
		342,366			351,225
Allowances for expiration		(55,544	)		(40,122	)
	$	286,822		$	311,103

~~Bulk~~XENACARE ~~product~~HOLDINGS, ~~– Bulk product consists of completed unpackaged loose SunPill™ product that has been stored in barrels awaiting commercial packaging to make it market ready for distribution~~INC.

~~Merchandise~~NOTES ~~inventory~~TO -FINANCIAL ~~Merchandise~~STATEMENTS inventory consists primarily of the SunPill™ product along with lesser quantities of XenaCore and BRS product. Our formulations are batch controlled and carry an expiration date in accordance with applicable government regulations. Any product approaching their expiration date have been destroyed and removed from the inventory. Continued delays in fully implementing our marketing and distribution programs have resulted in significantly slower than anticipated sales in 2009 and 2008. Consequently, we have established an allowance on the remaining inventory, based on the estimated sell through rate for each product, before their expiration.(Unaudited)

~~During~~NOTE ~~the quarter, as a result of challenges we encountered in introducing this product to the marketplace, we have decided to discontinue further attempts to commercialize the SunPill™ product~~7. We– ~~are~~COMMITMENTS ~~currently~~AND ~~in process of negotiating for the liquidation of existing inventory. We believe that we will able to recover our product costs and accordingly have not provided for any impairment expense.~~ CONTINGENCIES

~~NOTE~~The 5.Company, –during ~~ACCOUNTS~~the ~~PAYABLE~~year ~~AND~~operated ~~ACCRUED~~under ~~EXPENSES~~several material agreements as listed below:

~~Significant~~Consulting ~~components~~service of/ ~~accounts~~employment ~~payable and accrued expenses at September 30, 2009 and December 31, 2008 consist primarily of:~~agreements

	2009		2008
Trade payables	$	163,874	$	245,928
Accrued accounting and legal fees		41,443		37,500
Accrued product and description costs		—		1,500
Accrued payroll		958,361		206,018
Accrued interest		71,080		18,099
Expenses reimbursable to officer		52,369		64,344
Other accrued expenses		—		25,000
Unearned revenue		259,214		259,214
	$	1,546,341	$	857,603

9Employment agreements - Employment agreements with two individuals for their services in the areas of sales (our President), operations and mergers and acquisitions (our CFO) were terminated in the fourth quarter of 2009. These agreements covered cash as well as stock compensation and health insurance benefits and expire December 31, 2011. The agreements were terminated on December 31, 2009 by mutual consent. All accrued and unpaid compensation and benefits totaling $562,500 were converted into 56,250 Series E preferred shares. New employment agreements were entered into with these individuals, which provide for monthly draws of $5,000 and quarterly bonus based on performance. The agreements can be terminated at any time.

~~XENACARE HOLDINGS, INC. AND SUBSIDIARIES~~·

~~NOTES~~Beauty TODevelopment ~~CONSOLIDATED~~- ~~FINANCIAL~~In ~~STATEMENTS~~December 2009, ~~(Unaudited)~~we entered into a three year agreement with Beauty Development Corporation, to provide distribution management, development and product merchandising services. The Company issued 8,475 shares of Series E preferred shares which calls for performance based vesting over the three year term. This agreement has been fully prepaid.

~~NOTE~~Marketing ~~5. – ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Continued)~~agreements

Unearned revenue - Unearned revenue represents product shipped and invoiced but subject to return by the retailer. Due to the potential right of return, the Company has recorded the invoicing as unearned revenue and will recognize revenue on these transactions, only when collectability is reasonably assured, in accordance with the guidance offered in SAB 104. Revenue on these transactions will be recognized when the retailer acknowledges selling the product and commits to payment or when payment is received.·

~~NOTE~~Creative 6Management and Arnot - An image marketing and branding agreement with Creative Management, Inc. –and ~~NOTES~~a ~~PAYABLE~~companion -spokesperson ~~CURRENT~~agreement with Dr. Bob Arnot, a nationally known medical and news correspondent. The terms of the agreements extend through May 31, 2009 and included various levels of compensation based upon performance. The agreement was not renewed.

~~Significant components of notes payable – current at September 30, 2009 and December 31, 2008 consist primarily of:~~·

	2009			2008
Related parties	$	135,074		$	135,072
Investors		217,448			5,000
Wachovia - line of credit		(3,047	)		37,320
Sun Packing, Inc.		977,000		977,000
	$	1,326,475		$	1,154,392

Nutritional Alliances, Inc - In December 2009, we also entered into a three year agreement with Nutritional Alliances, Inc to provide market penetration and expand our customer base. The Company issued 8,475 shares of Series E preferred shares which calls for performance based vesting over the three year term. This agreement has been fully prepaid.

Related Parties - Notes payable to related parties were issued in various traunches, each mature one year from issuance and bear interest at 15%. The lenders are related parties to the Company through common executive management as our CFO and President are also officers in the lenders. The terms of the notes have been extended to mature on June 30, 2009. We have not paid these notes as of September 30, 2009, and are discussing a further extension with the lenders.11

~~Investors~~XENACARE ~~- Notes payable to investors were issued in various traunches commencing in January 2009~~HOLDINGS, ~~each mature one year from issuance and bear interest at 15%~~INC.

~~Wachovia~~NOTES -TO ~~The~~FINANCIAL ~~Wachovia~~STATEMENTS ~~line of credit was originated in November 2007 and is personally guaranteed by the Company’s President. The line of credit bears interest at 10.1%.~~(Unaudited)

~~Sun~~NOTE ~~Packing, Inc~~7. -– ~~The~~COMMITMENTS ~~Sun~~AND ~~Packing,~~CONTINGENCIES Inc. note originated during merger negotiations with the Company during the third and fourth quarters of 2008. The parties were unable to reach an agreement on several key issues and the merger negotiations were discontinued. The note is personally guaranteed by our officers and bears interest at 6%. The note is payable upon demand. To date the note has not been called.(Continued)

~~NOTE~~Lease 7.for –office ~~COMMITMENTS AND CONTINGENCIES~~facilities

~~The Company is currently operating under several material agreements as listed below:~~·

·Delray Beach office - The Company currently leases office space in Delray Beach, Florida on a month-to-month basis from a non-related party. The annualized rental expense is approximately $50,000.

Employment agreements with three individuals for their services in the areas of sales, operations and mergers and acquisitions. These agreements cover cash as well as stock compensation and health insurance benefits and expire December 31, 2011.·

·Boca Raton office – In March 2010, the Company entered into a 3 year lease agreement for its new corporate headquarters in Boca Raton, Florida. Occupancy is scheduled for June 2010 and the lease provides for the first fourth months of rent waived.

Business consulting agreement with one individual for his services in the areas of mergers and acquisitions. The agreement covers cash as well as stock compensation and health insurance benefits and expire December 31, 2011.


Summary of commitments	2010		2011		2012		2013		Beyond		Total

Employment agreements	$	—	$	—	$	—	$	—	$	—	$	—
Beauty Development Corporation		—		—		—		—		—		—
Creative Management and Arnot		—		—		—		—		—		—
Nutritional Alliances, Inc		—		—		—		—		—		—
Delray Beach office lease (current)		10,000		—		—		—		—		10,000
Boca Raton office lease (future)		8,296		35,189		38,513		16,610		—		98,608
	$	18,296	$	35,189	$	38,513	$	16,610	$	—	$	108,608

·NOTE 8. – COMMON AND PREFERRED STOCK

OnCommon August 5, 2008 the Company amended its April 23, 2008 sales agreement with Pure Laboratories, LLC to purchase all rights to SunPill™. This agreement supersedes the Company’s previous SunPill™ license agreement with Pure Laboratories, LLC dated February 8, 2007. The aggregate purchase price is the greater of 5% of gross sales capped at $2,500,000, payable quarterly at 5% of gross sales subject to an annual minimum payment of $75,000.Stock

10The Company’s shares commenced quotation on the Over the Counter Bulletin Board on March 5, 2008. The Company’s quotation symbol is XCHO:OTC.

~~XENACARE~~During ~~HOLDINGS~~the first quarter of 2009, ~~INC.~~the ~~AND~~Company ~~SUBSIDIARIES~~retired 33,000 shares of common stock and issued 10,748,340 shares to retire Preferred A shares.

~~NOTES~~In TOSeptember 2009, ~~CONSOLIDATED~~we ~~FINANCIAL~~sold ~~STATEMENTS~~12,500,000 shares of XenaCare common stock to an accredited investor for $500,000. No broker dealer was involved in the sale of the shares and no commission or other remuneration was paid in connection with the sale. The shares were issued in a private placement to an accredited investor pursuant to an exemption from registration under the Securities Act of 1933 pursuant to Section 4(~~Unaudited~~2) thereof and Rule 506 of Regulation D. The shareholder who received the forgoing shares signed a subscription agreement acknowledging that the shares were not registered under the Securities Act of 1933, and could only be sold under a registration or exemption from registration. Each certificate for such shares contains a restricted legend concerning the foregoing restrictions on transfer and a stop transfer order has been lodged against such shares. The investor was offered access to our books and records and the opportunity to ask our officers questions and receive answers concerning the terms and condition of the offering and the company.

~~NOTE~~In 72009, we issued 3,000,750 shares of XenaCare common stock in exchange for services from various consultants. –The ~~COMMITMENTS~~shares ~~AND~~were ~~CONTINGENCIES~~issued pursuant to an exemption from registration under the Securities Act of 1933 pursuant to Section 4(~~Continued~~2) thereof. The shareholders who received the forgoing shares signed an investment letter acknowledging that the shares were not registered under the Securities Act of 1933, and could only be sold under a registration or exemption from registration. Each certificate for such shares contains a restricted legend concerning the foregoing restrictions on transfer and a stop transfer order has been lodged against such shares.

·12

~~The~~XENACARE ~~Company~~HOLDINGS, ~~leases office space on a month-to-month basis from a non-related party~~INC. ~~The annualized rental expense is approximately $50,000.~~

~~NOTE~~NOTES 8.TO –FINANCIAL ~~COMMON~~STATEMENTS ~~AND PREFERRED STOCK~~(Unaudited)

~~Common~~NOTE ~~Stock~~8. – COMMON AND PREFERRED STOCK (Continued)

~~The~~Preferred ~~Company’s shares commenced quotation on the Over the Counter Bulletin Board on March 5, 2008. The Company’s quotation symbol is XCHO:OTC.~~Stock

During the first quarter of 2009, the Company ~~retired~~converted 33500,000 shares of ~~common~~Preferred ~~stock~~A ~~and~~to ~~issued~~ 10,748,340 shares of ~~common stock to retire Preferred A shares. During the third quarter of 2009, the Company sold 12, 500,000 shares of~~ restricted common stock ~~to an accredited investor for $500,000~~.

~~Preferred~~During ~~Stock~~December of 2009 the board of directors authorized the issue of up to 300,000 shares of Series “E” preferred stock. The stated value of each share is Ten $10.00 per share. Each shares to be issued bears a dividend rate of fifteen (15%) percent and has voting rights as if converted to common shares of the corporation. The conversion of such shares is the stated value divided by the common stock price, as published by NASDAQ, at the time of issue. For each shares of common stock issued by this series is entitled to one warrant share as determined by the board of directors. These warrants are cashless, fully paid, and non-assessable.

During the ~~first~~fourth quarter of 2009, the ~~Company~~company ~~converted~~issued ~~500~~78,000 shares of ~~Preferred~~preferred Astock series “E.” 68,000 shares were issued to corporate executives for accrued salaries and stockholder loans and 10,~~748,340~~000 shares ofwere ~~restricted~~issued ~~common~~as ~~stock~~a bonus to one employee and one outside consultant.

~~NOTE~~During 9the first quarter of 2010, all accrued and unpaid compensation and benefits for two consultants, one who provided acquisition and financing services and one who provided administration services, totaling $536,918 were converted into 53,686 Series E preferred shares. –There ~~INCOME~~services ~~TAXES~~were terminated in 2009 and no new agreements were entered into with these individuals.

~~The~~During ~~provision~~the ~~(benefit)~~first ~~for~~quarter ~~income~~of ~~taxes~~2010, is$1,000,000 ~~summarized~~of asoutstanding ~~follows:~~debt was converted into 100,000 shares of Series E preferred shares.

	Nine Months Ended September 30,
	2009			2008
Current:
Federal	$	—		$	—
State		—			—
Deferred:
Federal		448,439			319,273
State		57,656			41,049
Increase in Valuation allowance		(506,095	)		(360,322	)
Total provision (benefit) for income taxes	$	—		$	—

During the first quarter of 2010, two employees (the CFO and the President) who are lenders to the Company converted $346,487 of their outstanding debt into 34,639 shares of Series E preferred stock.

1113

XENACARE HOLDINGS, INC. ~~AND SUBSIDIARIES~~

NOTES TO ~~CONSOLIDATED~~ FINANCIAL STATEMENTS (Unaudited)

NOTE 9. – INCOME TAXES ~~(Continued)~~

The provision ~~for income taxes differs from the amount computed by applying the federal statutory rate to income~~ (~~loss) before provision (~~benefit) for income taxes is summarized as follows:

	Nine Months Ended September 30,
	Three Months Ended March 31,
	2009			2008
	2010			2009
Expected provision(benefit) at statutory rate		35.0	%		35.0	%
Current:
State taxes		4.5	%		4.5	%
Federal	$	—		$	—
Valuation allowance for Net Loss		-39.5	%		-39.5	%
State		—			—
Total provision (benefit) for income taxes		0.0	%		0.0	%
Deferred:
Federal		(38,320	)		139,553
State		(4,927	)		17,942
Increase in Valuation allowance		43,247			(157,495	)
Total provision (benefit) for income taxes	$	—		$	—

~~Deferred~~The provision for income taxes ~~reflect~~differs from the ~~net~~amount ~~tax~~computed ~~effect~~by ofapplying ~~tax carry-forward items and~~ the ~~temporary~~federal ~~differences~~statutory ~~between~~rate ~~the~~to ~~recognition of~~ income ~~and~~(loss) ~~expenses~~before ~~for~~provision ~~financial~~(benefit) ~~reporting purposes and~~ for ~~tax~~income ~~purposes.~~taxes ~~The tax effect of these temporary differences representing deferred tax assets and liabilities are~~ as follows:

	September 30, 2009			December 31, 2008
	Three Months Ended March 31,
Deferred tax assets:
	2010			2009
Net operating loss carry-forwards	$	3,173,019		$	2,666,924
Expected provision(benefit) at statutory rate		35.0	%		35.0	%
		—			—
State taxes		4.5	%		4.5	%
Total deferred tax assets		3,173,019			2,666,924
Valuation allowance for Net Loss		-39.5	%		-39.5	%
Valuation allowance		(3,173,019	)		(2,666,924	)
Total provision (benefit) for income taxes		0.0	%		0.0	%
Net deferred tax assets	$	—		$	—

AsDeferred ofincome ~~September 30,~~taxes ~~2009~~reflect ~~and December 31, 2008~~ the ~~Company~~net ~~had~~tax aeffect ~~valuation~~of ~~allowance on its deferred~~ tax ~~assets~~carry-forward ofitems ~~$3,173,019~~ and ~~$2,666,924,~~the ~~respectively,~~temporary ~~which~~differences ~~relates~~between tothe ~~net~~recognition ~~operating~~of ~~losses.~~income ~~The valuation allowance increased $506,095~~ and ~~$711,764~~expenses infor ~~the~~financial ~~nine~~reporting ~~months~~purposes ~~ended September 30, 2009~~ and ~~the~~for ~~year~~tax ~~ended~~purposes. ~~December 31,~~The ~~2008~~tax ~~respectively.~~effect ~~The~~of ~~increase~~these intemporary ~~2009~~differences ~~and~~representing ~~2008~~deferred ~~were~~tax ~~attributable~~assets toand ~~accumulated~~liabilities ~~net~~are ~~operating~~as ~~losses.~~follows:

As of September 30, 2009 and 2008, the Company had net operating loss carry-forwards of $8,359,034 and $7,077,780, respectively. Unused net operating loss carry-forwards will expire at various dates beginning 2020.


	March 31, 2010			December 31, 2009
Deferred tax assets:
Net operating loss carry-forwards	$	3,529,192		$	3,572,439
forwards		—			—
Total deferred tax assets:		3,529,192			3,572,439
Valuation allowance		(3,529,192	)		(3,572,439	)
Net deferred tax assets	$	—		$	—

As of ~~September~~March 3031, ~~2009~~2010 and December 31, ~~2008,~~2009 the Company had noa ~~unrecognized~~valuation allowance on its deferred tax ~~benefit~~assets of $3,529,192 and ~~accordingly~~$3,572,439, norespectively, ~~related~~which ~~accrued~~relates ~~interest~~to ornet ~~penalties~~operating losses. The ~~Company~~valuation isallowance ~~not~~increased ~~under~~$43,247 ~~examination~~and by$905,515 ~~either~~in the USthree ~~federal~~months orended ~~State~~March 31, of2009 ~~Florida~~and ~~tax~~the ~~authorities~~year ended December 31, 2008 respectively. The decrease in 2010 and increase in 2009 were attributable to accumulated net operating earnings or losses.

1214

~~ITEM~~XENACARE 2HOLDINGS, INC.

~~MANAGEMENT’S~~NOTES ~~DISCUSSION~~TO ~~AND ANALYSIS OF~~ FINANCIAL ~~CONDITIONS~~STATEMENTS ~~AND RESULTS OF OPERATIONS~~(Unaudited)

~~Introduction~~NOTE 9. – INCOME TAXES (continued)

~~Management’s~~As ~~discussion and analysis~~ of ~~financial~~March 31, ~~condition~~2010 and ~~results~~December 31, of2009, ~~operations~~the isCompany ~~provided~~had asnet aoperating ~~supplement~~loss tocarry-forwards ~~our~~of ~~condensed~~$8,044,430 ~~consolidated financial statements~~ and ~~accompanying notes to help provide an understanding of our financial condition~~$8,153,915, ~~changes~~respectively. inUnused ~~financial~~net ~~condition~~operating ~~and~~loss ~~results~~carry-forwards ofwill ~~operations.~~expire ~~The~~at ~~discussion~~various ~~and~~dates ~~analysis~~beginning ~~is organized as follows:~~2020.

~~Terms~~As of March 31, 2010 and ~~Definitions~~December 31, 2009, the Company had no unrecognized tax benefit and accordingly no related accrued interest or penalties. The Company is not under examination by either the US federal or State of Florida tax authorities.

~~Company~~NOTE 10. – SUPPLIER CONCENTRATION

~~“XenaCare”~~Our Cobroxin and Zeolite products, ~~“XC~~are ~~Holdings”~~sold under an exclusive long-term marketing and distribution agreement from the manufacturer, “however we” do not possess rights to the formulation. Should the manufacture fail, ~~“us”~~for orany “reason to produce the product in the quantities we require, our” business may be adversely affected.

~~AICPA~~NOTE 11. – CUSTOMER CONCENTRATION

~~American~~Our ~~Institute~~Cobroxin products, are sold both to retail customers directly and to retailers, grocery and pharmacies. 2 customers represent 80.9% of ~~Certified~~our ~~Public~~sales ~~Accountants~~collectively during the quarter end March 31, 2010.

~~APB~~ 15

~~Accounting~~ITEM ~~Principles Board~~2

~~ARB~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS

~~Accounting Review Board~~Introduction

~~ASC~~Management’s discussion and analysis of financial condition and results of operations is provided as a supplement to our condensed financial statements and accompanying notes to help provide an understanding of our financial condition, changes in financial condition and results of operations. It provides a general description of our business, trends in our industry, as well as significant transactions that have occurred that we believe are important in understanding our financial condition and results of operations. Management’s discussion and analysis of financial condition and results of operations is organized as:

~~Accounting Standards Codification~~•

~~ASU~~Caution concerning forward-looking statements. This section discusses how certain forward-looking statements made by us throughout this discussion and analysis are based on management’s present expectations about future events and are inherently susceptible to uncertainty and changes in circumstance.

~~Accounting Standards Update~~•

~~EITF~~Overview and Operations. This section discusses our product offering, the business environment and the regulatory environment we operate in.

~~Emerging Issues Task Force~~•

Recent accounting pronouncements. This section provides an analysis of relevant recent accounting pronouncements issued by the FASB and the effect of those pronouncements.

~~Financial Accounting Standards Board~~•

~~FSP~~Critical accounting policies and estimates. This section discusses those accounting policies that are both considered important to our financial condition and results of operations, and require significant judgment and estimates on the part of management in their application for the three months ended March 31, 2010.

~~FASB Staff Position~~•

~~FIFO~~Results of operations. This section provides an analysis of our results of operations for three months ended March 31, 2010 relative to the comparative prior year period presented in the accompanying statements of operations.

~~First-in, First-out~~•

~~GAAP~~Liquidity ~~(US)~~and capital resources. This section provides an analysis of our cash flows, capital resources and off-balance sheet arrangements and our contractual obligations as of March 31, 2010.

~~Generally~~Caution ~~Accepted~~Concerning ~~Accounting~~Forward-Looking ~~Principals~~ Statements

~~NSP~~The SEC encourages companies to disclose forward-looking information so that investors can better understand a company’s future prospects and make informed investment decisions. This document contains such “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, particularly statements anticipating future growth in revenues, operating income and cash flow. Statements that are predictive in nature, that depend upon or refer to future events or conditions or that include words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “will,” “estimates,” and similar expressions are forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results and performance to be materially different from any future results or performance expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, history of operating losses and accumulated deficit; possible need for additional financing; competition; dependence on management; risks related to proprietary rights; government regulation; and other factors discussed in this report and our other filings with the SEC.

~~Nutrition~~Overview ~~Supplement~~and ~~Product~~Operations

~~SAB~~XenaCare Holdings, Inc. was organized under the laws of Florida in June 2005 to formulate, market and distribute a line of clinical and protective NSPs as well as homeopathic medication and detoxification product.

~~Staff~~The ~~Accounting~~Company ~~Bulletin~~currently operates or is in the process of developing the following product lines:

~~SEC~~•

~~Securities~~Our ~~Exchange~~line ~~Commission~~of Clinical NSPs includes XenaCor, XenaZyme Plus and XenaTri. These products are poly-formulas designed to address key multi-factors in disease processes such as atherosclerosis and diabetes.

~~SFAS or~~16

~~FAS~~•

~~Statement~~Our line of ~~Financial~~Protective ~~Accounting~~NSPs ~~Standards~~currently consists of SunPill, which is a revolutionary nutritional supplement that is designed to defend your skin when exposed to damaging ultraviolet rays and sun damage.

~~Q308~~ •

~~Three~~Our ~~months~~line ~~Ended~~of ~~September 30,~~Homeopathic ~~2008~~Medication currently consists of Cobroxin which is the first opiate and acetaminophen-free pain reliever available as an over-the-counter formulation clinically proven to treat moderate to severe (Stage 2) pain.

~~Q309~~•

~~Three~~Our ~~months~~line ~~Ended~~of ~~September 30,~~Detoxification ~~2008~~products currently consists of Zeolite which is a cellular cleanse and detoxification product designed as an effective solution for removing heavy metals and toxins from the body.

~~9MOS08~~Up until the third quarter of 2009, substantially all revenues to date have been generated from sales of historical Clinical NSPs, XenaCor, XenaTri and XenaZymePlus and Protective NSPs, SunPill. Commencing in the third quarter of 2009 we began to establish our Homeopathic and Detoxification product lines. These newer product lines now generate the bulk of our revenue. Since our inception, we were never profitable until this quarter.

~~Nine~~We ~~months~~purchase ~~Ended~~all ~~September 30~~of our products and supplies from third-party sources. We have no long-term contracts, ~~2008~~as purchases are made on an order-by-order basis. In the event that a current manufacturer is unable to meet our manufacturing and delivery requirements at some time in the future, we may suffer short-term interruptions of delivery of certain products while we establish an alternative source.

~~9MOS09~~Clinical NSPs

~~Nine~~Our ~~months~~line ~~Ended~~of ~~September 30~~Clinical NSPs seek to shift a portion of current consumer “out-of-pocket” spending on ineffective and/or incomplete self-care and healing products, ~~2009~~obtained through a myriad of retail and internet distribution systems. Our Clinical NSPs provide consumers with access to proprietary nutritional supplements. We also plan to sell and distribute these products through pharmacies and other distribution outlets as well as through infomercials and a book authored by Dr. Xenakis.

~~Overview~~XenaCor, XenaTri and ~~Operations~~XenaZymePlus ~~This~~are ~~section~~specifically ~~provides~~formulated ato ~~general~~support ~~description~~and ofhelp ~~our~~maintain ~~business,~~patient ~~trends~~healthcare infor ~~our~~many ~~industry~~risk factors, asincluding ~~well~~those asrelated ~~significant~~to ~~transactions~~homocysteine ~~that~~levels, ~~have~~lipid ~~occurred~~control, ~~that~~blood weflow ~~believe~~and blood pressure. These NSPs are ~~important~~formulated inunder ~~understanding~~the ~~our~~guidelines ~~financial~~of ~~condition~~the Food and ~~results~~Drug Administration (“FDA”) and its regulation of ~~operations~~the Nutritional Supplement and Health Education Act. However, while the FDA regulates the nutritional supplement industry, no approvals by the FDA are required for our products.

·•

~~Caution~~We ~~concerning~~believe ~~forward-looking~~our ~~statements.~~Clinical ~~This~~NSPs ~~section~~listed ~~discusses~~below ~~how~~support ~~certain forward-looking statements made by us throughout this discussion~~ and ~~analysis~~maintain ~~are~~the ~~based on management’s present expectations about future events and are inherently susceptible to uncertainty and changes in circumstance.~~following:

·•

~~Recent~~XenaCor: ~~accounting~~the ~~pronouncements.~~lowering ~~This section provides an analysis~~ of ~~relevant~~serum ~~recent~~cholesterol, ~~accounting~~C-reactive ~~pronouncements~~protein ~~issued~~and byhomocysteine ~~the~~levels. ~~FASB~~This ~~and~~product ~~the~~was ~~effect~~designed ofto ~~those~~support ~~pronouncements~~cardiovascular health.

·•

~~Critical~~XenaTri: ~~accounting~~the ~~policies~~lowering ~~and estimates. This section discusses those accounting policies that are both considered important to our financial condition and results~~ of ~~operations,~~triglycerides and ~~require~~raising ~~significant judgment and estimates on the part~~ of ~~management~~HDL. inThis ~~their~~product ~~application~~was ~~for~~designed ~~the~~to ~~three~~support ~~and~~cardiovascular ~~nine months ended September 30, 2009~~health.

·•

~~Results~~XenaZyme ofPlus: ~~operations.~~increases ~~This~~the ~~section~~body’s ~~provides~~oxygen-carrying ancapacities. ~~analysis~~This ofproduct ~~our~~was ~~results~~designed ~~of operations for Q109 relative~~ to ~~the~~support ~~comparative prior year period presented in the accompanying consolidated statements of operations~~digestion.

·We believe these NSPs significantly differentiate themselves from our competition including self-help vitamin and herbal product manufacturers and distributors. These NSPs are formulated to support the delivery of measurable subjective (improved medical history) and/or objective (laboratory results) effects regardless of what other medications or supplements the patient is taking. We believe that these NSPs support significant positive health actions and outcomes without deleterious adverse side effects. The Company does not diagnose nor treat diseases. Our products are only formulated to support and maintain an individual’s health and well being.

~~Liquidity and capital resources. This section provides an analysis of our cash flows, capital resources and off-balance sheet arrangements and our contractual obligations as of September 30, 2009.~~17

~~XenaCare~~Protective Holdings, Inc. (the “Company”, “XC Holdings”, “we”, “us” or “our”) was organized under the laws of Florida in June 2005 to formulate, market and distribute nutrition supplement products (“NSPs~~”).~~

~~The~~SunPill, ~~Company~~a ~~currently~~nutritional ~~operates~~supplement orthat is indesigned to defend your skin from photo-aging and sun damage, was developed by the ~~process~~founder of ~~developing~~Banana Boat, and Sea and Ski, an inventor at the ~~following~~forefront ~~lines~~of protecting skin from the damaging effects of ~~NSPs~~the sun. We have acquired the worldwide rights to produce and ~~performance~~distribute ~~products:~~the SunPill. We believe the composition of the SunPill, when taken daily, protects the skin against the effects of ultraviolet (UV) radiation from the sun or other sources which include sunburn, skin redness, swelling, immune suppression, photo-damage.

·XenaCare’s exclusive world-wide marketing agreement for the SunPill has already received the attention of various marketers from several foreign countries, included but not limited to, countries such as China, Canada, Australia and South Africa. We have also received interest from several countries in Europe, South America and the Caribbean. The cruise and travel industry are also likely candidates and have shown interest.

~~Our~~Homeopathic ~~line of Clinical NSPs includes XenaCor, XenaZyme Plus and XenaTri. These products are poly-formulas designed to address key multi-factors in disease processes such as atherosclerosis and diabetes.~~ Medication

13XenaCare exclusively markets and distributes Cobroxin for Nutra Pharma Corporation (OTCBB: NPHC) within the United States. On November 3, 2009, XenaCare announced that the Chain Drug Marketing Association (CDMA) will begin inventorying Cobroxin for redistribution to its member pharmacies. The CDMA currently has over 6,000 independent pharmacy members throughout the United States.

~~The~~Cobroxin ~~Company~~is ~~has~~the ~~expanded~~first ~~its~~opiate ~~historical~~and ~~clinical~~acetaminophen-free ~~line~~pain byreliever ~~formulating~~available as an over-the-counter formulation clinically proven to treat moderate to severe (Stage 2) pain. Available in a ~~line~~topical gel that relieves pain associated with joints, repetitive stress and arthritis, and in an oral spray that is formulated to relieve lower back pain, migraines, neck aches, shoulder pain, cramps and neuralgia, Cobroxin is derived from cobra venom. The medical application of ~~body~~cobra ~~replenishment~~venom ~~NSPs~~was incorporated into the Homeopathic Pharmacopoeia Materia Medica in the 1800s along with several other snake venoms. In the early 1900s, ~~which~~Calmette ~~are~~(of ~~designed~~BCG fame) investigated the use of cobra venom in the treatment of cancer in mice. It was subsequently applied clinically to ~~combat~~subjects with cancer where it established a reputation in France for relieving pain. In 1936, Macht, a researcher within the ~~nutrient~~pharmaceutical ~~depletion~~company, Westcott, Hynson and Dunning, showed that cobra venom, when injected in minute doses, produced analgesic effects that were superior to morphine in activity. In fact, cobra venom was employed when morphine was no longer effective or when patients became addicted to the opiate. Cobra venom proved to be 80% effective in the clinic for the treatment of ~~commonly~~headache ~~prescribed~~and ~~drugs~~arthritis pain and it allowed long-term control of chronic pain conditions without addictive problems. A feature of this venom product was its slow onset of analgesic activity however its activity is prolonged. In 1938, acceptance of homeopathic medicine including cobra venom was incorporated into the Food, Drug & Cosmetic Act sponsored by Royal Copeland. In the latter part of the last century cobra venoms were studied for the treatment of severe pain but also rheumatism, trigeminal neuralgia, asthma, ocular therapy, and neuroses.

·Today, Cobra venom is being studied for treating various forms of pain, cancers, autoimmune and neurological disorders. Researchers have proven that cobra venom contains constituents that control pain and inflammation. Researchers in China are examining the possibility that cobra venom can be used to treat drug addiction. The National Cancer Institute in Italy has participated in Chinese clinical trials to assess the efficacy of Cobra toxins in controlling post operative pain and moderate to severe cancer pain. More recently Cobra toxin has been reported to kill mesothelioma and lung cancer cells, 75 years after the first reports in the 1933 issue of the medical journal Lancet.

~~Our~~XenaCare ~~line~~is supporting its fast-growing network of ~~Lifestyle~~retailers ~~Performance~~carrying ~~NSPs~~Cobroxin iswith ~~currently~~a ~~under~~comprehensive ~~development~~multi-million dollar national advertising campaign that includes direct response, print media, television commercials and national sponsorship programs. We ~~are~~market ~~developing~~and ~~formulations~~distribute ~~for~~our ~~the~~products ~~Lifestyle~~through ~~Performance~~a ~~market~~variety of retail outlets, ~~which~~including ~~consists~~chain ofdrug astores, ~~sports~~independent ~~line~~pharmacies, ~~for~~grocery ~~athletes~~chains, mass marketers, catalog companies and ~~increased~~e-commerce ~~performance~~sites. ~~for~~Cobroxin ~~the~~was ~~over~~marketed 50through ~~generation.~~Internet Assales during the last quarter of 2009, and in the ~~date~~first quarter of ~~this~~2010 ~~filing~~the weproduct ~~have~~has ~~not~~been ~~completed~~accepted ~~any~~by 40% of the ~~formulations~~105,000 retail stores (as reported in the trade publication, Chain Drug Review) selling healthcare products across the country. Analgesic products average 21 inventory turnovers per year and are among the fastest sellers in drug stores.

·18

~~Our~~XenaCare ~~line~~has ofpurchased ~~Protective~~advertising ~~NSPs~~in ~~currently~~a ~~consists~~comprehensive array of ~~SunPill™~~men’s, women’s and ~~Cobroxin™~~specialty magazines. ~~SunPill™~~The isads amade ~~revolutionary~~their ~~nutritional~~debut ~~supplement~~in ~~that~~November 2009 isand ~~designed~~are projected to ~~defend~~generate ~~your~~about ~~skin~~108 million ~~from~~reader ~~photo~~impressions over a 3-~~aging~~month ~~and~~period. ~~sun~~Cobroxin ~~damage~~will also be featured through the distribution of 18 million retail catalogs throughout the US.

·Additionally, the Company has been authorized to use the American Arthritis Foundation’s logo on packaging, Websites, Customer websites and to send out direct mailings to 100,000 Arthritis foundation members. XenaCare Holdings is advertised in the 2010 Super Bowl XLIV Game Program, the NFL Alumni Guide program and Yearbook, and will advertise in the 2010 NBA Allstar as well as in the official annual publication of NASCAR that will be seen by 8,000,000 attendees. XenaCare is also advertising in Prevention, Arthritis Today, Shape, Allure, Woman’s Day, Men’s Journal, Martha Stewart Living, Balancing Act, Lifetime and Redbook. Television commercials are also in production for May 2010 distribution. XenaCare has also contracted to publish Cobroxin advertisements in 2010 Major League Baseball (MLB) yearbooks. The advertisements are scheduled to run in the yearbooks of 6 major league cities, including the New York Mets, the Los Angeles Dodgers and the Chicago Cubs. In addition to its marketing campaigns, XenaCare is participating in an athletic sponsorship with Megan Wallin, a professional beach volleyball player on the AVP Tour. Megan, a Florida native, has proven to be a strong force on the sand and in the world of business and has had six professional wins and 10 finals appearances in 2009; she also competed against the two-time gold medalists from the 2004 Athens Olympics and 2008 Beijing Olympics. Her goal 2010 is to make the U.S. Olympic, Megan is rated #1 in Florida and in the top 30 in the world.

~~Our~~Cobroxin ~~line~~is ofavailable ~~Pain~~to ~~Relievers~~independent ~~currently~~pharmacy ~~consists~~owners through membership in the Chain Drug Marketing Association (CDMA), one of the largest pharmacy organizations representing more than 6,000 outlets in 32 states. Additionally, Cobroxin™ ~~which~~will isbe ~~the~~sold ~~first~~through ~~opiate~~most major drugstore chains, mass marketers and ~~acetaminophen-free~~food ~~pain~~giants, ~~reliever~~as ~~available~~well as anonline ~~over-the-counter~~at: ~~formulation~~Cobroxin.com, ~~clinically~~Amazon.com, ~~proven~~Overstock.com toand ~~treat~~Drugstore.com. ~~moderate~~More tothan ~~severe~~200 ~~(Stage~~brokers 2)also ~~pain~~market Cobroxin through retail outlets.

·During the first quarter of 2010, the Company entered into agreements for the sale of Cobroxin through major retail outlets. Although some of the retailers listed have not yet ordered product at the filing of this report, agreements are in place for all of them. Our agreements do not require these customers to purchase any specific quantity. They are:

Our line of Detoxification product currently consists of Zeolite which is a cellular cleanse and detoxification product designed as an effective solution for removing heavy metals and toxins from the bodyAMAZON.COM

Since mid-2005, we expanded our focus and began to formulate NSPs for personal and lifestyle performance products and develop new distribution channels for our historical Clinical NSPs. We have also acquired exclusive worldwide rights, patents and technology developed by Pure Laboratories, LLC, through which we will showcase and market, the SunPill™. Additionally, we have entered into an exclusive worldwide proprietary sales agreement for Algae BioSciences, an algae-based Omega 3 fatty acid that can be ingested as a food additive or through other nutraceutical and medicinal applications.AMERIMARK

~~Substantially all revenues to date have been generated from sales of historical Clinical NSPs, XenaCor, XenaTri and XenaZymePlus. Since our inception, we have never been profitable.~~BENCHMARK

We purchase all of our products and supplies from third-party sources. We have no long-term contracts, as purchases are made on an order-by-order basis. In the event that a current manufacturer is unable to meet our manufacturing and delivery requirements at some time in the future, we may suffer short-term interruptions of delivery of certain products while we establish an alternative source.CDMA

~~Clinical NSPs~~CVS

Our line of Clinical NSPs seek to shift a portion of current consumer “out-of-pocket” spending on ineffective and/or incomplete self-care and healing products, obtained through a myriad of retail and internet distribution systems. Our Clinical NSPs provide consumers with access to proprietary nutritional supplements and supplement nutrient depletion resulting from the use of certain prescription pharmaceuticals. We also plan to sell and distribute these products through pharmacies and other distribution outlets as well as through infomercials and a book authored by Dr. Xenakis.DERMADOCTOR

XenaCor, XenaTri and XenaZymePlus are specifically formulated to support and help maintain patient healthcare for many risk factors, including those related to homocysteine levels, lipid control, blood flow and blood pressureDR. These NSPs are formulated under the guidelines of the Food and Drug Administration (“FDA”) and its regulation of the Nutritional Supplement and Health Education Act. However, while the FDA regulates the nutritional supplement industry, no approvals by the FDA are required for our products.LEONARD’S

WeDRUG ~~believe our Clinical NSPs listed below support and maintain the following:~~EMPORIUM

·DRUGSTORE.COM

~~XenaCor:~~DUANE ~~the lowering of serum cholesterol, C-reactive protein and homocysteine levels. This product was designed to support cardiovascular health.~~READE

·EVITAMINS

~~XenaTri: the lowering of triglycerides and raising of HDL. This product was designed to support cardiovascular health.~~HANNAFORD

·HARDTOFIND BRANDS

~~XenaZyme~~HD ~~Plus: increases the body’s oxygen-carrying capacities. This product was designed to support digestion.~~SMITH

WeHEALTHY believe these NSPs significantly differentiate themselves from our competition including self-help vitamin and herbal product manufacturers and distributors. These NSPs are formulated to support the delivery of measurable subjective (improved medical history) and/or objective (laboratory results) effects regardless of what other medications or supplements the patient is taking. We believe that these NSPs support significant positive health actions and outcomes PETS

14IMPERIAL DISTRIBUTORS

~~without~~JOHNSON ~~deleterious adverse side effects. The Company does not diagnose nor treat diseases. Our products are only formulated to support and maintain an individual’s health and well being.~~SMITH

~~Body~~KERR Replenishment Systems (“BRS”) formulations provide patients access to NSPs that combat prescription drug induced nutrient depletion problems widely recognized by both consumer and clinician. As stated in The Drug-induced Nutrient Depletion Handbook, second edition (2003) by Ross Pelton et al., “ 16 of the top 20 drugs are associated with drug/nutrient interaction.” BRS formulations focus on replacing prescription drug depleted nutrients and position themselves as extensions to the primary Clinical NSPs. We believe that BRS formulations will not compete with our historical Clinical NSPs as our historical Clinical NSPs specifically support disease treatment. We also believe that BRS formulations will meet a high revenue opportunity without affecting current revenue generating Clinical NSPs. The BRS formulations will be marketed and sold through the same outlets as our other Clinical NSPs. This strategy has no effect on the current and future operations of our other Clinical NSPs.DRUG

~~Presently~~KINNEY various new formulations have been designed and manufactured for consumers being treated with prescription drugs for high blood pressure, heart disease, diabetes, ulcers, depression, infection, arthritis, aids and weight loss. BRS intends to utilize toll free telephone and virtual computer linkups, using the same marketing and sales practices as our current Clinical NSPs operations. We believe BRS is a natural supplementation for prescription induced nutrition depletion and is necessary and important for positive patient health outcomes. As part of our marketing program, Dr. Xenakis, our CEO and chairman, wrote a book titled, “When Good Medicines do Bad Things to Healthy Bodies” in 2006. In addition, an infomercial featuring Dr. Xenakis is being produced to educate the consumer on the depletion of nutrients by the use of prescription drugs.DRUG

~~Lifestyle Performance NSPs~~MAX-WELNESS

We are developing formulations for the Lifestyle Performance market, which consist of a sports line for athletes and increased performance for the over 50 generation. As of the date of this filing we have not completed any of the formulations.MEIJER

~~Protective~~NATURAL ~~NSPs~~HEALTH CENTER

~~SunPill™,~~MUTUAL aDRUG nutritional supplement that is designed to defend your skin from photo-aging and sun damage, was developed by the founder of Banana Boat, and Sea and Ski, an inventor at the forefront of protecting skin from the damaging effects of the sunCO. We have acquired the worldwide rights to produce and distribute the SunPill™. We believe the composition of the SunPill™, when taken daily, protects the skin against the effects of ultraviolet (UV) radiation from the sun or other sources which include sunburn, skin redness, swelling, immune suppression, photo-damage.

~~Formulation~~OVERSTOCK.COM ~~of NSPs~~

~~The~~UNIVERSAL ~~Company~~DIRECT ~~has~~(SUPPORT no patent protection for any of its products or services, except the SunPill™ but has multiple trademark protection on certain service marks currently in commerce. We have historically expensed our formulation costs and do not have any separately itemized research and development expenses.PLUS)

~~Manufacturing and Supplies~~QUICK2YOU

~~The~~VALUE Company uses contracted third parties to manufacture its products and to provide raw materials. The third party manufacturers are responsible for receipt and storage of raw material, production and packaging, and labeling of finished goods. At present, the Company is dependent upon manufacturers for the production of all of its products and, should the manufacturers discontinue their relationship with us, the Company’s sales could be adversely impacted. The Company believes at the present time it will be able to obtain the quantity of products and supplies needed to meet orders.DRUG

WeVITAMIN/PURITAN purchase all of our products from third-party suppliers and manufacturers pursuant to purchase orders without any long-term agreements. In the event that a current manufacturer is unable to meet our manufacturing and delivery requirements at some time in the future, we may suffer short-term interruptions of delivery of certain products while we establish an alternative source. While we believe alternative sources are in most cases readily available and we have also established working relationships with several third-party suppliers and manufacturers, none of these agreements are long term. We also rely on third-party carriers for product shipments, including shipments to and from our distribution facilities. We are, therefore, subject to the risks, including employee strikes and inclement weather, associated with our carrier’s ability to provide delivery services to meet our fulfillment and shipping needs. Failure to deliver products to our customers in a timely and accurate manner would harm our reputation, our business and results of operations.PRIDE

15WALGREENS

~~Pain~~WINN ~~Reliever~~DIXIE

XenaCare exclusively markets and distributes Cobroxin™ for Nutra Pharma Corporation (OTCBB: NPHC) within the United States. On November 3, 2009, XenaCare announced that the Chain Drug Marketing Association (CDMA) will begin inventorying Cobroxin™ for redistribution to its member pharmacies. The CDMA currently has over 6,000 independent pharmacy members throughout the United States.Detoxification

~~Cobroxin™~~Zeolite is ~~the~~a ~~first~~cellular ~~opiate~~cleanse and ~~acetaminophen-free~~detoxification ~~pain~~product ~~reliever~~designed ~~available~~ as an ~~over-the-counter~~effective ~~formulation~~solution ~~clinically~~for ~~proven~~removing toheavy ~~treat~~metals ~~moderate to severe (Stage 2) pain. Available in a topical gel that relieves pain associated with joints, repetitive stress~~ and ~~arthritis,~~toxins ~~and in an oral spray that is formulated to relieve lower back pain, migraines, neck aches, shoulder pain, cramps and neuralgia, Cobroxin™ is derived~~ from ~~cobra venom. The medical application of cobra venom was incorporated into~~ the ~~Homeopathic Pharmacopoeia Materia Medica in the 1800s along with several other snake venoms~~body. InZeolite ~~the~~is ~~early~~an ~~1900s,~~effective ~~Calmette~~solution ~~(of BCG fame) investigated the use of cobra venom in the treatment of cancer in mice. It was subsequently applied clinically to subjects with cancer where it established a reputation in France~~ for ~~relieving~~removing ~~pain.~~heavy Inmetals ~~1936, Macht, a researcher within the pharmaceutical company, Westcott, Hynson~~ and ~~Dunning,~~toxins ~~showed~~from that cobra venom, when injected in minute doses, produced analgesic effects that were superior to morphine in activity. In fact, cobra venom was employed when morphine was no longer effective or when patients became addicted to the ~~opiate~~body. ~~Cobra~~Research ~~venom~~has ~~proved~~also toshown bethat ~~80% effective in~~ the ~~clinic~~product's ~~for~~ingredients ~~the~~may ~~treatment~~help ofreduce ~~headache~~viral ~~and~~replication ~~arthritis pain~~ and itsupport ~~allowed~~healthy ~~long-term~~blood ~~control~~sugar ~~of chronic pain conditions without addictive problems~~levels. AAdditionally, ~~feature of~~ this ~~venom~~ product ~~was~~improves ~~its~~nutrient ~~slow onset of analgesic activity however its activity is prolonged. In 1938~~absorption, ~~acceptance~~supports ofimmune ~~homeopathic~~system ~~medicine~~function ~~including~~and ~~cobra~~reduces ~~venom~~symptoms ~~was incorporated into the Food, Drug & Cosmetic Act sponsored by Royal Copeland. In the latter part~~ of ~~the last century cobra venoms were studied for the treatment of severe pain but also rheumatism, trigeminal neuralgia, asthma, ocular therapy, and neuroses~~allergies.

~~Today,~~The ~~Cobra~~detox ~~venom~~market is ~~being~~one ~~studied for treating various forms~~ of ~~pain,~~the ~~cancers,~~fastest ~~autoimmune~~growing ~~and~~nutritional ~~neurological~~markets ~~disorders. Researchers have proven that cobra venom contains constituents that control pain and inflammation. Researchers~~ in ~~China are examining~~ the ~~possibility~~U.S. ~~that~~with ~~cobra~~current ~~venom~~estimates ~~can~~at beover ~~used~~$4 billion ~~to treat drug addiction~~annually. ~~The~~Many ~~National Cancer Institute in Italy has participated in Chinese clinical trials to assess the efficacy~~ of ~~Cobra~~these ~~toxins~~products ininclude ~~controlling~~digestive ~~post~~cleansers ~~operative~~that ~~pain~~act ~~and~~mostly ~~moderate~~as ~~to severe cancer pain~~laxatives. ~~More recently Cobra toxin has been reported to kill mesothelioma and lung cancer cells, 75 years after the first reports in the 1933 issue of the medical journal Lancet.~~

~~Detoxification product~~19

Zeolite is aunique ~~cellular~~in ~~cleanse~~its ~~and~~ability ~~detoxification~~to ~~product~~detox ~~designed as an effective solution for removing heavy metals and toxins from~~ the entire body. ~~Research~~– ~~has~~not ~~also~~just ~~shown that~~ the ~~product’s~~digestive ~~ingredients~~system. ~~may~~XenaCare ~~help~~exclusively ~~reduce~~markets ~~viral replication~~ and ~~support~~distributes ~~healthy~~Zeolite ~~blood~~within ~~sugar~~the ~~levels.~~United ~~Additionally, this product improves nutrient absorption, supports immune system function and reduces symptoms of allergies~~States.

~~The~~XenaCare ~~detox market~~ is ~~one~~designing ofa ~~the~~marketing ~~fastest~~campaign ~~growing~~for ~~nutritional~~Zeolite, ~~markets~~after inMineral ~~the~~Sciences, UInc.S. ~~with~~awarded ~~current~~XenaCare ~~estimates~~the atexclusive ~~over~~license ~~$4 billion~~to ~~annually.~~market ~~Many~~to ofretailers ~~these~~and ~~products~~distribute ~~include~~this ~~digestive~~cellular ~~cleansers~~cleanse ~~that~~and ~~act~~detoxification ~~mostly~~product asat ~~laxatives~~retail. ~~Zeolite™ is unique in its ability to detox the entire body – not just the digestive system.~~

~~XenaCare~~Formulation ~~exclusively~~of ~~markets and distributes Zeolite™ within the United States.~~NSPs

~~Governmental~~The ~~Regulation~~Company has no patent protection for any of its products or services, except the SunPill but has multiple trademark protection on certain service marks currently in commerce. We have historically expensed our formulation costs and do not have any separately itemized research and development expenses.

~~The~~Manufacturing ~~Federal Drug Administration (FDA) oversees product safety, manufacturing,~~ and product information, such as statements on the product’s label, package inserts, and accompanying literature. The FDA has promulgated regulations governing the labeling and marketing of dietary and nutritional supplement products. The regulations include:Supplies

·The Company uses contracted third parties to manufacture its products and to provide raw materials. The third party manufacturers are generally responsible for receipt and storage of raw material, production, packaging and labeling of finished goods. At present, the Company is dependent upon manufacturers for the production of all of its products and, should the manufacturers discontinue their relationship with us, the Company’s sales could be adversely impacted. The Company believes at the present time it will be able to obtain the quantity of products and supplies needed to meet orders.

In the ~~identification~~event that a current manufacturer is unable to meet our manufacturing and delivery requirements for our clinical and protective NSPs at some time in the future, we may suffer short-term interruptions of ~~dietary~~delivery orof ~~nutritional~~certain ~~supplements~~products while we establish an alternative source. While we believe alternative sources are in these cases readily available and ~~their~~we ~~nutrition~~have also established working relationships with several third-party suppliers and ~~ingredient~~manufacturers, ~~labeling;~~none of these agreements are long term.

·Our Cobroxin and Zeolite products, are sold under an exclusive long-term marketing and distribution agreement from the manufacturer, however we do not possess rights to the formulation. Should the manufacture fail, for any reason to produce the product in the quantities we require, our business may be adversely affected.

~~requirements~~We ~~related~~also rely on third-party carriers for product shipments, including shipments to and from our distribution facilities. We are, therefore, subject to the ~~wording~~risks, ~~used~~including ~~for~~employee ~~statements~~strikes ~~about~~and ~~nutrients~~inclement weather, ~~health~~associated ~~statements~~with our carrier’s ability to provide delivery services to meet our fulfillment and shipping needs. Failure to deliver products to our customers in a timely and accurate manner would harm our reputation, our business and ~~statements~~results of ~~nutritional support;~~operations.

·Governmental Regulation

~~labeling~~The ~~requirements~~Federal ~~for~~Drug ~~dietary~~Administration or(FDA) ~~nutritional~~oversees ~~supplements~~product ~~for~~safety, ~~which~~manufacturing, ~~“high~~and ~~potency~~product information,” ~~“antioxidant~~such as statements on the product’s label,” package inserts, and ~~“trans-fatty~~accompanying ~~acids”~~literature. ~~statements~~The ~~are~~FDA ~~made;~~has promulgated regulations governing the labeling and marketing of dietary and nutritional supplement products. The regulations include:

·•

~~notification~~the ~~procedures~~identification ~~for~~of ~~statements on~~ dietary ~~and~~or nutritional supplements; and their nutrition and ingredient labeling;

·•

~~pre-market~~requirements ~~notification~~related ~~procedures~~to the wording used for ~~new~~statements ~~dietary~~about ~~ingredients~~nutrients, inhealth statements, and statements of nutritional ~~supplements.~~support;

16•

Welabeling ~~utilize~~requirements afor ~~substantiation~~dietary ~~program~~or ~~that~~nutritional ~~involves~~supplements ~~the compilation and review of scientific literature pertinent to the ingredients contained in each of our products. We continuously update our substantiation program to expand evidence~~ for ~~each~~which of“high ~~our~~potency, ~~product~~”antioxidant,” ~~statements~~ and ~~notify~~“transfatty ~~the~~acids” ~~FDA of certain types of performance~~ statements ~~made~~are ~~in connection with our products.~~made;

In certain markets, including the United States, specific statements made by us with respect to our products may change the regulatory status of a product. For example, a product sold as a nutritional supplement but marketed as a treatment, prevention, or cure for a specific disease or condition would likely be considered by the FDA or other regulatory bodies as an unapproved drug and asked to be removed from the market. To maintain the product’s status as a nutritional supplement, the labeling and marketing must comply with the provisions in the Dietary Supplement Health and Education Act of 1994 (DSHEA) and the FDA’s extensive regulations. As a result, we have procedures in place to promote and enforce compliance by our employees related to the requirements of DSHEA, the Food, Drug and Cosmetic Act, and various other regulations. Because of the diverse scope of regulations applicable to our products, and the varied regulators enforcing these regulatory requirements, determining how to conform to all requirements is often open to interpretation and debate. As a result, we can make no assurances that regulators will not question any of our actions in the future, even though we have put continuing effort into complying with all applicable regulations.•

~~Nutritional~~notification ~~supplements~~procedures ~~are~~for ~~also subject to the Nutrition, Labeling and Education Act and various other acts that regulate health~~ statements, ~~ingredient~~on ~~labeling,~~dietary and ~~nutrient content statements that characterize the level of nutrients in a product. These acts prohibit the use of any specific health statement for~~ nutritional supplements; ~~unless the health statement is supported by significant scientific research~~ and ~~is pre-approved by the FDA.~~

Regulators such as the Federal Trade Commission (FTC) regulate marketing practices and advertising of a company and its products. In the past several years, regulators have instituted various enforcement actions against numerous nutritional supplement companies for false and/or misleading marketing practices, as well as misleading advertising of certain products. These enforcement actions have resulted in consent decrees and significant monetary judgments against the companies and/or individuals involved. Regulators require a company to convey product statements clearly and accurately, and further require marketers to maintain adequate substantiation for their statements. The FTC requires such substantiation to be competent and reliable scientific evidence. Specifically, the FTC requires a company to have a reasonable basis for the expressed and implied product statement before it disseminates an advertisement. A reasonable basis is determined based on the statements made, how the statements are presented in the context of the entire advertisement, and how the statements are qualified. The FTC’s standard for evaluating substantiation is designed to ensure that consumers are protected from false and/or misleading statements by requiring scientific substantiation of product statements at the time such statements are first made. The failure to have this substantiation violates the Federal Trade Commission Act.•

~~Caution~~pre-market ~~Concerning~~notification ~~Forward-Looking~~procedures ~~Statements~~for new dietary ingredients in nutritional supplements.

~~The~~We ~~SEC~~utilize ~~encourages~~a ~~companies~~substantiation toprogram ~~disclose forward-looking information so~~ that ~~investors~~involves ~~can~~the ~~better~~compilation ~~understand a company’s future prospects~~ and ~~make~~review ~~informed~~of ~~investment~~scientific ~~decisions.~~literature ~~This~~pertinent ~~document~~to ~~contains such “forward-looking statements” within~~ the ~~meaning~~ingredients ofcontained ~~the~~in ~~Private~~each ~~Securities Litigation Reform Act~~ of ~~1995,~~our ~~particularly statements anticipating future growth in revenues, operating income and cash flow~~products. ~~Statements~~We ~~that~~continuously ~~are~~update ~~predictive~~our insubstantiation ~~nature,~~program ~~that depend upon or refer~~ to ~~future~~expand ~~events~~evidence orfor ~~conditions~~each orof ~~that~~our ~~include~~product ~~words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “will,” “estimates,” and similar expressions are forward-looking~~ statements. ~~These statements involve known~~ and ~~unknown~~notify ~~risks,~~the ~~uncertainties~~FDA ~~and~~of ~~other~~certain ~~factors~~types ~~that~~of ~~may cause our actual results and~~ performance ~~to be materially different from any future results or performance expressed or implied by these forward-looking~~ statements. ~~Factors~~made that could cause or contribute to such differences include, but are not limited to, history of operating losses and accumulated deficit; possible need for additional financing; competition; dependence on management; risks related to proprietary rights; government regulation; and other factors discussed in ~~this~~connection ~~report~~with ~~and~~ our ~~other filings with the SEC~~products.

~~Critical Accounting Policies and Estimates~~ 20

~~The~~In ~~preparation~~certain ofmarkets, ~~financial~~including ~~statements~~the ~~and~~United ~~related~~States, ~~disclosures~~specific instatements ~~conformity~~made by us with ~~U.S.~~respect ~~generally~~to ~~accepted~~our ~~accounting~~products ~~principles~~may ~~and~~change the ~~Company’s~~regulatory ~~discussion~~status ~~and~~of ~~analysis~~a ofproduct. ~~its~~For ~~financial~~example, ~~condition~~a ~~and~~product ~~operating~~sold ~~results~~as ~~require~~a ~~the~~nutritional ~~Company’s~~supplement ~~management~~but tomarketed ~~make~~as ~~judgments~~a treatment, ~~assumptions~~prevention, ~~and~~or ~~estimates~~cure ~~that~~for ~~affect~~a ~~the~~specific ~~amounts~~disease ~~reported~~or incondition ~~its~~would ~~Consolidated~~likely ~~Financial~~be ~~Statements~~considered ~~and~~by the ~~accompanying~~FDA ~~notes.~~or ~~Note~~other 2,regulatory ~~“Summary~~bodies ofas ~~Significant~~an ~~Accounting~~unapproved ~~Policies”~~drug ofand ~~this~~asked ~~Form 10-Q~~to ~~and~~be ~~the~~removed ~~Notes~~from tothe ~~Consolidated~~market. ~~Financial~~To ~~Statements~~maintain in the ~~Company~~product’s ~~2008~~status ~~Form 10-K~~as ~~describes~~a ~~the~~nutritional ~~significant~~supplement, ~~accounting~~the ~~policies~~labeling and ~~methods~~marketing ~~used~~must comply with the provisions in the ~~preparation~~Dietary Supplement Health and Education Act of 1994 (DSHEA) and the ~~Company~~FDA’s ~~Consolidated~~extensive ~~Financial Statements~~regulations. ~~Management~~As ~~bases~~a ~~its~~result, ~~estimates~~we onhave ~~historical~~procedures ~~experience~~in place to promote and onenforce ~~various~~compliance ~~other~~by ~~assumptions~~our itemployees ~~believes~~related to bethe ~~reasonable~~requirements ~~under~~of DSHEA, the ~~circumstances~~Food, Drug and Cosmetic Act, and various other regulations. Because of the ~~results~~diverse scope of ~~which~~regulations ~~form~~applicable to our products, and the ~~basis~~varied ~~for~~regulators ~~making~~enforcing ~~judgments~~these ~~about~~regulatory ~~the~~requirements, ~~carrying~~determining ~~values~~how ofto ~~assets~~conform to all requirements is often open to interpretation and ~~liabilities~~debate. ~~Actual~~As ~~results~~a ~~may~~result, ~~differ~~we ~~from~~can ~~these~~make ~~estimates~~no ~~and~~assurances ~~such~~that ~~differences~~regulators ~~may~~will benot ~~material.~~question any of our actions in the future, even though we have put continuing effort into complying with all applicable regulations.

17Nutritional supplements are also subject to the Nutrition, Labeling and Education Act and various other acts that regulate health statements, ingredient labeling, and nutrient content statements that characterize the level of nutrients in a product. These acts prohibit the use of any specific health statement for nutritional supplements unless the health statement is supported by significant scientific research and is pre-approved by the FDA.

~~Management~~Regulators ~~believes~~such as the ~~Company’s~~Federal ~~critical~~Trade ~~accounting~~Commission ~~policies~~(FTC) regulate marketing practices and ~~estimates~~advertising ~~are~~of ~~those~~a ~~related~~company toand ~~revenue~~its ~~recognition~~products. In the past several years, ~~accounts~~regulators ~~receivable~~have ~~and~~instituted ~~allowance~~various enforcement actions against numerous nutritional supplement companies for ~~doubtful~~false ~~accounts~~and/or misleading marketing practices, ~~inventory~~as ~~valuation~~well as misleading advertising of certain products. These enforcement actions have resulted in consent decrees and ~~income~~significant ~~taxes~~monetary judgments against the companies and/or individuals involved. ~~Management~~Regulators ~~considers~~require ~~these~~a ~~critical~~company ~~policies~~to ~~because~~convey ~~they~~product ~~are~~statements ~~both~~clearly ~~important~~and accurately, and further require marketers to ~~the~~maintain ~~portrayal~~adequate ofsubstantiation for their statements. The FTC requires such substantiation to be competent and reliable scientific evidence. Specifically, the ~~Company’s~~FTC ~~financial~~requires ~~condition~~a company to have a reasonable basis for the expressed and ~~operating~~implied ~~results~~product statement before it disseminates an advertisement. A reasonable basis is determined based on the statements made, how the statements are presented in the context of the entire advertisement, and ~~they~~how ~~require~~the ~~management~~statements are qualified. The FTC’s standard for evaluating substantiation is designed to ~~make~~ensure ~~judgments~~that consumers are protected from false and/or ~~estimates~~misleading ~~about~~statements ~~inherently~~by ~~uncertain~~requiring ~~matters~~scientific substantiation of product statements at the time such statements are first made. The failure to have this substantiation violates the Federal Trade Commission Act.

~~Recent~~Critical Accounting ~~Pronouncements~~Policies and Estimates

~~Recent~~The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting ~~pronouncements~~principles ~~that~~and the Company’s ~~has~~discussion ~~adopted~~and oranalysis of its financial condition and operating results require the Company’s management to make judgments, assumptions, and estimates that ~~will~~affect bethe ~~required~~amounts reported in its Financial Statements and the accompanying notes. Note 2, “Summary of Significant Accounting Policies” of this Form 10-Q and the Notes to ~~adopt~~Consolidated Financial Statements in the ~~future~~Company’s ~~are~~2009 ~~summarized~~Form 10-K ~~below~~describes the significant accounting policies and methods used in the preparation of the Company’s Consolidated Financial Statements. Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates and such differences may be material.

InManagement ~~June 2009,~~believes ~~FASB~~the ~~issued~~Company’s ~~its~~critical ~~final~~accounting ~~statement~~policies ~~SFAS 168, “The FASB Accounting Standards Codification~~ and ~~the~~estimates ~~Hierarchy~~are ofthose ~~Generally~~related ~~Accepted~~to ~~Accounting~~revenue Principles a Replacement of FASB Statement No. 162”. SFAS 168 made the FASB Accounting Standards Codification (the Codification) the single source of U.S. GAAP used by nongovernmental entities in the preparation of financial statementsrecognition, ~~except~~accounts ~~for~~receivable ~~rules~~ and ~~interpretive~~allowance ~~releases~~for ofdoubtful ~~the SEC under authority of federal securities laws~~accounts, ~~which~~inventory ~~are~~valuation ~~sources~~and ofincome ~~authoritative accounting guidance for SEC registrants~~taxes. ~~The~~Management ~~Codification~~considers isthese ~~meant~~critical topolicies ~~simplify~~because ~~user~~they ~~access~~are toboth ~~all~~important ~~authoritative accounting guidance by reorganizing U.S. GAAP pronouncements into roughly 90 accounting topics within a consistent structure; its purpose is not~~ to ~~create~~the ~~new~~portrayal ~~accounting~~of ~~and~~the ~~reporting~~Company’s ~~guidance.~~financial ~~The~~condition ~~Codification supersedes all existing non-SEC accounting~~ and ~~reporting~~operating ~~standards~~results and ~~was~~they ~~effective~~require ~~for~~management the Company beginning July 1, 2009. Following SFAS 168, the Board will not issue new standards in the form of Statements, FASB Staff Positions, or Emerging Issues Task Force Abstracts; instead, it will issue Accounting Standards Updates (ASU). The FASB will not consider ASUs as authoritative in their own right; these updates will serve only to ~~update~~make ~~the~~judgments ~~Codification,~~and ~~provide~~estimates ~~background information~~ about ~~the~~inherently ~~guidance,~~uncertain ~~and provide the bases for conclusions on the change(s) in the Codification~~matters.

In August 2009, the FASB issued ASU 2009-05 which includes amendments to Subtopic 820-10, “Fair Value Measurements and Disclosures—Overall”. The update provides clarification that in circumstances, in which a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using one or more of the techniques provided for in this update. The amendments in this ASU clarify that a reporting entity is not required to include a separate input or adjustment to other inputs relating to the existence of a restriction that prevents the transfer of the liability and also clarifies that both a quoted price in an active market for the identical liability at the measurement date and the quoted price for the identical liability when traded as an asset in an active market when no adjustments to the quoted price of the asset are required are Level 1 fair value measurements. The guidance provided in this ASU is effective for the first reporting period, including interim periods, beginning after issuance. The adoption of this standard did not have a material impact on the Company’s consolidated financial position and results of operations.21

InRecent ~~September 2009, the FASB issued ASU 2009-06, Income Taxes (Topic 740), ”Implementation Guidance on~~ Accounting for Uncertainty in Income Taxes and Disclosure Amendments for Nonpublic Entities”, which provides implementation guidance on accounting for uncertainty in income taxes, as well as eliminates certain disclosure requirements for nonpublic entities. For entities that are currently applying the standards for accounting for uncertainty in income taxes, this update shall be effective for interim and annual periods ending after September 15, 2009. For those entities that have deferred the application of accounting for uncertainty in income taxes in accordance with paragraph 740-10-65-1(e), this update shall be effective upon adoption of those standards. The adoption of this standard is not expected to have an impact on the Company’s consolidated financial position and results of operations since this accounting standard update provides only implementation and disclosure amendments. Pronouncements

InRecent ~~September 2009,~~accounting pronouncements that the ~~FASB~~Company has ~~published~~adopted ~~ASU No. 2009-12, “Fair Value Measurements and Disclosures (Topic 820) - Investments in Certain Entities That Calculate Net Asset Value per Share (~~or ~~Its~~that ~~Equivalent)”.~~will ~~This~~be ~~ASU~~required ~~amends Subtopic 820-10, “Fair Value Measurements and Disclosures – Overall”,~~ to ~~permit~~adopt ain ~~reporting entity to measure~~ the ~~fair~~future ~~value~~are ofdiscussed ~~certain~~in ~~investments~~Note on2 ~~the~~“Summary ~~basis~~ of ~~the~~Significant ~~net~~Accounting ~~asset~~Policies” ~~value~~in ~~per share of~~ the ~~investment~~notes ~~(or its equivalent). This ASU also requires new disclosures, by major category of investments including the attributes of investments within the scope of this amendment~~ to the ~~Codification. The guidance in this Update is effective for~~ interim ~~and~~financial ~~annual~~statements ~~periods~~included ~~ending after December 15, 2009. Early application is permitted. The Company is~~ in ~~the process of evaluating the impact of~~ this ~~standard on its consolidated financial position and results of operations~~filing. ~~The adoption of this standard did not have an impact on the Company’s consolidated financial position and results of operations.~~

InResults ~~October 2009,~~of the FASB has published ASU 2009-13, “Revenue Recognition (Topic 605)-Multiple Deliverable Revenue Arrangements”, which addresses the accounting for multiple-deliverable arrangements to enable vendors to account for products or services (deliverables) separately rather than as a combined unit. Specifically, this guidance amends the criteria in Subtopic 605-25, “Revenue Recognition-Multiple-Element Arrangements”, for separating consideration in multiple-deliverable arrangements. This guidance establishes a selling price hierarchy for determining Operations

18Comparison of the three months ended March 31, 2010 (“Q110”) to the three months ended March 31, 2009 (“Q109”)

~~the~~Net ~~selling~~Revenues ~~price~~Total ofnet arevenues ~~deliverable~~increased $837,263 ~~which~~or is1,438.0%, ~~based~~to ~~on:~~$895,487 (aQ110) ~~vendor-specific~~from ~~objective~~$58,224 ~~evidence;~~ (bQ109). ~~third-party~~We ~~evidence;~~began orredirected ~~(c)~~our ~~estimates.~~efforts ~~This~~and ~~guidance~~allocated ~~also~~available ~~eliminates~~resources ~~the~~to ~~residual~~concentrate ~~method~~on ofthe ~~allocation~~marketing, promotion and ~~requires~~distribution ~~that~~of ~~arrangement~~Cobroxin ~~consideration~~in bethe ~~allocated~~third atquarter ~~the~~of ~~inception~~2009. ofThat ~~the~~initial ~~arrangement~~effort was directed primarily to ~~all~~internet ~~deliverables~~based ~~using~~marketing directly to consumers. During the ~~relative~~fourth ~~selling~~quarter ~~price~~of ~~method~~2009 and ~~also~~on ~~requires~~into ~~expanded~~the ~~disclosures.~~current ~~The~~quarter, ~~guidance~~we inbegan ~~this~~the ~~update~~second isphase ~~effective~~two ~~prospectively~~our ~~for~~marketing ~~revenue~~strategy ~~arrangements~~which ~~entered~~expanded ~~into~~our orfocus ~~materially~~to ~~modified~~retailers in ~~fiscal~~the ~~years~~food ~~beginning~~and ondrug orindustry. ~~after~~In ~~June 15,~~the first quarter of 2010. ~~Early~~we ~~adoption~~have isadded ~~permitted.~~a ~~The~~significant ~~adoption~~number of ~~this~~retailers, ~~standard~~cataloguers ~~did~~and ~~not~~drug ~~have~~chains anas ~~impact~~customers, onas discussed above. Sales in Q109 were primarily the ~~Company~~result of our Clinical and Protective NSP’s ~~consolidated~~whereas ~~financial~~sales ~~position~~in ~~and~~Q110 ~~results~~were ofprimarily ~~operations.~~from Homeopathic Medication products, specifically Cobroxin.

InCost ~~October 2009,~~of ~~the~~Revenues ~~FASB~~Total ~~has~~cost ~~published~~of ~~ASU~~revenues ~~2009-14~~increased $257,468 ~~“Software~~or ~~(Topic 985)-Certain Revenue Arrangements that Include Software Elements” and changes the accounting model for revenue arrangements that include both tangible products and software elements~~1,359. ~~Under this guidance~~4%, ~~tangible products containing software components and nonsoftware components that function together~~ to ~~deliver~~$619,079 ~~the~~(Q110) ~~tangible product's essential functionality are excluded~~ from ~~the software revenue guidance in Subtopic 985-605~~$39,284 ~~“Software-Revenue Recognition”~~(Q109). ~~In addition, hardware components of a tangible product containing software components are always excluded from the software revenue guidance.~~ The ~~guidance~~increase ~~in this ASU~~ is ~~effective~~directly ~~prospectively~~related ~~for~~to ~~revenue~~sales ~~arrangements~~volume ~~entered~~increases ~~into~~as ora ~~materially~~result ~~modified~~of inour ~~fiscal~~rollout ~~years beginning on or after June 15, 2010. Early adoption is permitted. The adoption~~ of ~~this~~Cobroxin ~~standard~~to ~~did not have an impact on~~ the ~~Company’s~~food ~~consolidated financial position~~ and ~~results~~drug ~~of operations~~industry.

~~Other~~Selling ~~ASUs~~and ~~not~~Marketing ~~effective~~Costs ~~until~~Selling ~~after~~and ~~September 30~~marketing costs increased $329,280 ~~2009~~or 803.5%, ~~are~~to ~~not~~$370,260 ~~expected~~(Q110) from $40,980 (Q109). The increase in selling and marketing expenses is primarily due to ~~have~~advertising aand ~~significant~~marketing ~~effect~~expenses onassociated with the ~~Company’s~~Cobroxin ~~consolidated~~rollout. ~~financial~~During ~~position~~the orfirst ~~results~~quarter of ~~operations~~2010, the Company has invested in magazine adds, promotion maters and media and sporting events and well as acquiring sponsorships and endorsements.

~~Results~~General ofand ~~Operations~~Administrative Costs General and administrative costs decreased ($269,407) or 73.0%, to $99,687 (Q110) from $369,094 (Q109). The decrease in general and administrative expenses is primarily related to reductions in compensation for consultants wherein the agreements have either been modified or terminated between Q109 and Q110.

~~Comparison~~Other ofIncome(Expense) ~~the~~Other ~~three~~income(expense) ~~months~~increased ~~ended September 30~~$21,715 ~~2009~~or ~~(“Q309”)~~121.1% to ~~the~~($39,647) ~~three~~expense ~~months~~(Q110) ~~ended~~from ~~September 30~~($17,932) ~~2008~~expense (~~“Q308‘~~Q109). The increase in other expense is related to interest expense associated with increased borrowings in Q110 compared to Q109 because some borrowings in Q109 did not accrue interest.

~~Revenues.~~Liquidity ~~Total net revenues decreased $320,404 or 97.5%, to $8,240 (Q309) from $326,644 (Q308). Our efforts in the past were in redirecting~~ and ~~allocating~~Capital available resources to concentrate on the distribution of the SunPill™, a defense system that protects the skin from the damaging effects of the sun, and the distribution of AlGal, a tasteless, odorless form of Omega 3 fatty acid, which is used as a food additive has began to yield results. No sales from AlGal products were generated in Q309 however the bulk of our decrease in revenue was a result of discontinuing the SunPill™ product in Q309. We will continue to market our proprietary Clinical NSPs - XenaCor, XenaTri and XenaZymePlus distributed through the mail to our existing customer base.Resources

The Company has approximately $300,000 of product placed with customers, however sales of SunPill™ remained suppressed during Q309 as a result of the Company’s inability to raise sufficient cash to effect the marketing promotions necessary to generate significant sell thru. These factors resulted in the decision to discontinue the SunPill™ product.Overview

~~Cost~~Although ofwe ~~Revenues.~~generated ~~Total~~a ~~cost~~net income for the three months ended March 31, 2010 of ~~revenues~~$109,485 ~~decreased~~and had a reduced our deficit in working capital to $~~155~~56,~~980~~364 at March 31, 2010, we do not believe that one profitable quarter is sufficient to assert that this source of revenue is or 98will continue to cover our operating costs.~~8%,~~ We believe that we have achieved a successful launch of our Cobroxin product and that its acceptance in the market place will continue to expand. Although we have raised $1,~~947~~500,000 ~~(Q309)~~in ~~from~~capital ~~$157,927~~during ~~(Q308).~~the ~~The~~quarter ~~decrease~~to isimplement ~~directly~~our ~~related~~Cobroxin launch and have managed to reduce our ~~decrease~~deficit in ~~SunPill™~~working ~~sales~~capital to near breakeven, we understand that we will need even more capital to promote, acquire and support logistics as aour ~~result~~market penetration expands. For these reasons, specifically, limited track record of ~~the~~profitability ~~business~~and ~~factors~~continued ~~discussed~~demand ~~above~~for capital to implement our Cobroxin product strategy, our ability to continue as a going concern is still in doubt.

~~Selling~~Based ~~and~~on ~~Marketing~~our ~~Costs.~~current ~~Selling~~plans, ~~and~~we ~~marketing~~anticipate ~~costs~~that ~~decreased~~revenues ~~$100,504~~earned orfrom 44Cobroxin product sales will be the primary source of funds for operating activities.~~1%,~~ In addition to ~~$127~~existing cash and cash equivalents,~~522~~ ~~(Q309)~~we ~~from~~may ~~$228~~rely on bank borrowing,~~026~~ ~~(Q308).~~if ~~The~~available, ~~decrease~~or insales ~~selling~~of securities to meet our capital and ~~marketing~~liquidity ~~expenses~~needs isfor ~~primarily~~the ~~due~~next 12 months. Additional capital may be sought to fund the ~~Company’s~~expansion ~~lack~~ of ~~sufficient~~our ~~funding~~product toline ~~adequately~~and ~~promote~~marketing ~~SunPill™~~efforts, ~~sales.~~which ~~AlGal~~may ~~products~~also ~~are~~include ~~still~~bank ~~being~~borrowing, ~~commercialized~~or a private placement of securities.

General and Administrative Costs. General and administrative costs increased $433,867 or 10.5%, to $252,229 (Q309) from ($181,638) (Q308). The increase in general and administrative expenses is related primarily accrued salaries in Q309 and to certain modifications of contracts resulting in rescinding certain costs in Q308, in connection with the proposed merger which was subsequently terminated.22

~~Other~~We ~~Income(Expense).~~plan ~~Other~~to ~~income(expense)~~continue ~~decreased~~utilizing ~~$178~~our current resources to further develop our business,~~132~~ orestablish ~~130~~our sales and marketing network, operations, customer support and administrative organizations.8% toWe ~~$41~~believe,~~926~~ ~~expense~~based ~~(Q309)~~upon indications from ~~$136,206~~our ~~income~~sales ~~(Q308)~~agents and others that sufficient revenues will continue to be generated from product sales to cover our expenses. ~~The~~These ~~decrease~~revenues infrom ~~other~~product ~~income(expense)~~sales istogether ~~due~~with proceeds from private fundings should be sufficient to ~~accrued~~meet ~~interest~~presently ~~expense~~anticipated inworking ~~Q309~~capital and tocapital ~~certain~~expenditure ~~modifications~~requirements ofover ~~contracts~~the ~~resulting~~next in12 ~~rescinding~~months. ~~certain~~To ~~costs~~the inextent ~~Q308~~that we do not generate sufficient revenues we will reduce our expenses and/or seek additional financing. As of March 31, in2010 ~~connection~~there ~~with~~were ~~the~~no ~~proposed~~commitments ~~merger~~for ~~which~~long-term ~~was~~capital ~~subsequently~~expenditures ~~terminated~~other than those discussed in Note 7 to the quarterly financial statements.

~~Comparison~~Cash ofFlows ~~the~~for ~~nine months ended September 30, 2009 (“9mos09”) to~~ the ~~nine~~Three ~~months~~Months ~~ended~~Ended ~~September~~March 3031, ~~2008 (“9mos08‘)~~2010.

~~Revenues.~~Our ~~Total~~cash ~~net~~and ~~revenues~~cash ~~decreased~~equivalents increased $~~315~~311,~~357~~484 ~~or 79.8%,~~ to $79536,~~929~~503 ~~(9mos09)~~as ~~from $395,286 (9mos08). Our efforts in the past were in redirecting and allocating available resources to concentrate on the distribution~~ of ~~the SunPill™~~March 31, a2010 ~~defense system that protects the skin~~ from ~~the damaging effects of the sun~~$225,019 ~~and~~as ~~the distribution~~ of ~~AlGal~~December 31, ~~a tasteless, odorless form of Omega 3 fatty acid, which is used as a food additive has began to yield results~~2009. ~~No sales from AlGal products were generated in Q309 however the bulk of our decrease in revenue was a result of discontinuing the~~

19Cash Flows from Operating Activities

~~SunPill™~~Operating ~~product~~activities used net cash for the three months ended March 31, 2010 of $1,125,044. Net cash used resulted from a net income of approximately $109,485, after adjustment for various items which impact net income but do not impact cash during the period, such as depreciation and stock issued for services. The net income was partially offset by net cash used from a net change in ~~Q309~~working capital components of $1,234,529. WeThe ~~will~~most ~~continue~~significant toworking ~~market~~capital ~~our~~component ~~proprietary~~changes ~~Clinical~~were ~~NSPs~~an -increase ~~XenaCor~~in accounts receivable of $761,757, ~~XenaTri~~resulting from increased sales and ~~XenaZymePlus~~an ~~distributed~~increase ~~through~~in ~~the~~inventory ~~mail~~of $738,175 as a result of increased stocking levels to ~~our~~support ~~existing~~increased ~~customer~~sales. ~~base~~These uses of cash were partially offset by an increase in accounts payable of $313,800 as a result of establishing and obtaining increased vendor terms and financing.

~~The~~Cash ~~Company~~Flows ~~has~~used approximately $300,000 of product placed with customers, however sales of SunPill™ remained suppressed during Q309 as a result of the Company’s inability to raise sufficient cash to effect the marketing promotions necessary to generate significant sell thru. These factors resulted in ~~the~~Investing ~~decision~~Activities ~~to discontinue the SunPill™ product.~~

~~Cost~~Our ofinvesting ~~Revenues.~~activities ~~Total~~used ~~cost of revenues decreased~~ $~~154~~6,~~094~~472 orin ~~86.3%,~~net tocash ~~$24,475~~during ~~(9mos09)~~the ~~from~~three ~~$178,569~~months ~~(9mos08).~~ended ~~The~~March 31, ~~decrease~~2010, isfor ~~directly related to our decrease in SunPill™ sales as~~ a ~~result~~lease ofdeposit ~~the~~on ~~business~~our ~~factors~~planned ~~discussed~~new ~~above~~corporate headquarters.

~~Selling~~Cash ~~and~~Flows ~~Marketing Costs. Selling and marketing costs decreased $244,583 or 49.9%, to $245,460 (9mos09)~~ from ~~$490,043~~Financing ~~(9mos08).~~Activities ~~The decrease in selling and marketing expenses is primarily due to the Company’s lack of sufficient funding to adequately promote SunPill™ sales. AlGal products are still being commercialized.~~

~~General~~Our ~~and~~financing ~~Administrative~~activities ~~Costs.~~provided ~~General~~net ~~and~~cash ~~administrative~~of ~~costs increased~~ $~~498~~1,~~264~~443,000 orfor ~~10.5%,~~the tothree ~~$929~~months ended March 31,~~831~~ ~~(9mos09)~~2010. ~~from~~We raised approximately $~~431~~1,~~567~~500,000 ~~(9mos08).~~in ~~The~~advances ~~increase~~from a shareholder in ~~general~~the ~~and~~form ~~administrative~~of ~~expenses~~a isnote. ~~related~~We ~~primarily~~also ~~accrued~~repaid ~~salaries~~$57,000 in advances from certain officers.

~~Other~~Financial ~~Income(Expense).~~Position ~~Other income(expense) decreased $4,690 or 3.2% to $143,466 expense (9mos09) from $148,156 expense (9mos08). The decrease in other income(expense) is nominal.~~

~~Liquidity~~Our ~~and~~total ~~Capital~~assets ~~Resources~~increased $1,866,284 to $3,395,630 as of March 31, 2010 from $1,529,347 as of December 31, 2009.

~~Overview~~Most of the increase, $1,859,812 or 99.7% was from changes in our current assets which are described above in the discussion of cash flows from operating activities as it relates to net changes in working capital components. The remainder of the increase, $6,472 resulted from changes in long term assets primarily associated with a rent deposit for our planned new corporate headquarters.

WeBorrowings ~~incurred~~Outstanding a net loss for the nine months ended September 30, 2009 of $1,281,254 and had a $1,931,853deficit in working capital at September 30, 2009. We have not yet established an ongoing source of revenues sufficient to cover our operating costs and we have not raised sufficient capital to implement our business model resulting in a decline in working capital for Q309. Our ability to continue as a going concern is dependent upon our ability to generate sales from our new products and our obtaining adequate capital to fund losses until we become profitable.

~~Our~~As ~~operating~~of ~~and~~March 31, ~~capital~~2010, ~~requirements~~we inhad ~~connection~~borrowings ~~with~~of ~~operations~~$2,273,751, ~~have~~which ~~been~~are ~~and~~discussed ~~will~~more ~~continue~~fully toin beNote ~~significant~~6. ~~Our~~However, ~~recurring~~most ~~losses~~of ~~from operations and increased contractual agreements raise doubt about~~ our ~~ability~~financing tohas ~~continue~~come ~~as a going concern. Based on our current plans, we anticipate that revenues earned~~ from ~~Cobroxin™~~private ~~and~~sources ~~Zeolite~~who ~~product~~are ~~sales~~also ~~will~~shareholders bein the ~~primary source of funds for operating activities~~Company. InWe ~~addition~~also toobtained ~~existing~~financing ~~cash~~from ~~and~~a ~~cash~~potential ~~equivalents,~~merger ~~we may rely on bank borrowing~~partner, ifspecifically ~~available~~$977,000 orfrom ~~sales~~Sun ofPacking, ~~securities~~Inc. toalso ~~meet~~discussed ~~the~~in ~~basic~~Note ~~capital~~6. ~~and~~We ~~liquidity~~do ~~needs~~have ~~for~~a ~~the~~$10,000 ~~next~~available 12credit ~~months.~~line ~~Additional~~from ~~capital~~Wachovia ~~may~~which bewas ~~sought~~intended to ~~fund~~establish ~~the~~a ~~expansion~~commercial ofbanking ~~our~~relationship, ~~product~~however ~~line~~given ~~and~~its ~~marketing efforts~~limit, ~~which~~we ~~may~~currently ~~also~~consider ~~include~~this ~~bank~~facility ~~borrowing,~~to orbe ~~a private placement of securities~~nominal.

We plan to continue utilizing our current resources to further develop our business, establish our sales and marketing network, operations, customer support and administrative organizations. We believe, based upon indications from our sales agents and others that sufficient revenues will be generated from product sales by the end of the fourth quarter of 2009 to cover our expenses. These revenues from product sales together with proceeds from private placements should be sufficient to meet presently anticipated working capital and capital expenditure requirements over the next 12 months. To the extent that we do not generate sufficient revenues we will reduce our expenses and/or seek additional financing. As of September 30, 2009 there were no commitments for long-term capital expenditures other than those discussed in Note 7 to the quarterly financial statements.23

~~Cash~~Material ~~Flows~~Commitments, ~~for~~Expenditures ~~the~~and ~~Nine~~Contingencies ~~months ended September 30, 2009.~~

~~Our~~We ~~cash~~had ~~and~~no ~~cash~~outstanding ~~equivalents~~purchase ~~increased~~commitments ~~$255,053~~ to ~~$255,415~~purchase raw materials as of ~~September~~March 3031, ~~2009~~2010. ~~from~~We ~~$362~~believe asthat a minimum of ~~December 31~~an additional $1,000,000 ~~2008~~will be needed over the next 6 months to continue the successful launch the Cobroxin product based on purchase orders and commitments received.

~~Cash~~Dividends ~~Flows from Operating Activities~~

~~Operating~~We ~~activities~~have used net cash for the nine months ended September 30, 2009 of $332,528. Net cash used resulted from a net loss of approximately $1,280,303, after adjustment for various items which impact net income but do not ~~impact~~paid ~~cash~~any ~~during the period, such as depreciation and stock issued for services~~dividends. The net loss was partially offset by net cash provided from a net change in working capital components of $947,775. The most significant working capital component change was an increase in accounts payable and accrued expenses of $688,740, resulting from the Company securing more services related to its commercialization of the SunPill™ and correspondingly increasing vendor credit utilized.

20ITEM 3

~~Cash~~QUANTITATIVE ~~Flows~~AND ~~used~~QUALITATIVE inDISCLOSURES ~~Investing~~ABOUT ~~Activities~~MARKET RISK

~~Our~~The ~~investing~~rules ~~activities~~applicable ~~used~~to $0a insmaller ~~net~~reporting ~~cash~~company ~~during~~do ~~the~~not ~~nine~~require ~~months~~further ~~ended~~disclosure ~~September 30,~~in ~~2009~~this item.

~~Cash~~ITEM ~~Flows from Financing Activities~~4T

~~Our~~CONTROLS ~~financing~~AND activities provided net cash of $587,581 for the nine months ended September 30, 2009. We raised approximately $500,000 from the sale of common stock to a qualified investor, supplemented by an additional $87,581 in net advances from related parties.PROCEDURES

An evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”) and our Chief Financial ~~Position~~Officer (“CFO”), of the effectiveness of our disclosure controls and procedures as of March 31, 2010. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective as of March 31, 2010.

~~Our~~No ~~total~~change ~~assets~~in ~~decreased~~internal ~~$169,363~~control toover ~~$1,050,064~~financial asreporting ofoccurred ~~September~~during the quarter ended March 3031, ~~2009~~2010 ~~from~~that $1has materially affected,~~219,427~~ asor ofis ~~December 31,~~reasonably ~~2008~~likely to materially affect internal control over financial reporting.

~~Our~~PART ~~accounts~~II ~~receivable~~– ~~decreased~~OTHER $71,210; our inventory decreased $24,281; and our prepaid expenses and other current assets decreased $163,544 as a result of amortization of a SunPill™ related “slotting allowance” and the completion of a prepaid SunPill™ related infomercial. INFORMATION

~~Borrowings~~ITEM ~~Outstanding~~1

AsLEGAL of September 30, 2009, we had borrowings, both current and non-current of $1,499,265 that was composed of $525,312 from investors, shareholders, officers and related parties, $3,047 overpayment of a $40,000 line of credit from Wachovia, secured by the personal guarantee of an officer of the Company, and $977,000 from Sun Packing, Inc.PROCEEDINGS

~~Material Commitments, Expenditures and Contingencies~~None

WeITEM ~~had no outstanding purchase commitments to purchase raw materials as of September 30, 2009.~~ 1A

~~Dividends~~RISK FACTORS

WeThere have ~~not~~been ~~paid~~no ~~any~~material ~~dividends~~changes during the period ended March 31, 2010 in our risk factors as set forth in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2009.

ITEM 3.2

~~QUANTITATIVE~~UNREGISTERED ~~AND~~SALES ~~QUALITATIVE~~OF ~~DISCLOSURES~~EQUITY ~~ABOUT~~SECURITIES ~~MARKET~~AND ~~RISK~~USE OF PROCEEDS

~~The~~Preferred ~~rules applicable to a smaller reporting company do not require further disclosure in this item.~~Stock

~~ITEM~~During 4Tthe first quarter of 2010, all accrued and unpaid compensation and benefits for two consultants, one who provided acquisition and financing services and one who provided administration services, totaling $536,918 were converted into 53,686 Series E preferred shares. There services were terminated in 2009 and no new agreements were entered into with these individuals.

~~CONTROLS~~During ~~AND~~the ~~PROCEDURES~~first quarter of 2010, $1,000,000 of outstanding debt was converted into 100,000 shares of Series E preferred shares.

AnDuring ~~evaluation was carried out under~~ the ~~supervision~~first ~~and~~quarter ~~with the participation~~ of ~~our management~~2010, ~~including~~two ~~our~~employees ~~Chief Executive Officer~~ (~~“CEO”)~~the ~~and our Chief Financial Officer (“~~CFO~~”),~~ ofand the ~~effectiveness~~President) ofwho ~~our~~are ~~disclosure~~lenders ~~controls~~to ~~and~~the ~~procedures~~Company asconverted ~~of September 30~~$346,487 ~~2009.~~of ~~Based~~their onoutstanding ~~this~~debt ~~evaluation~~into 34,639 ~~our~~shares ~~Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective as~~ of ~~September~~Series ~~30,~~E ~~2009~~preferred stock.

No ~~change~~broker dealer was involved in ~~internal~~the ~~control~~sale ~~over~~of ~~financial~~the ~~reporting~~shares ~~occurred~~and ~~during~~no commissions or other remuneration was paid in connection with the ~~quarter~~sale. ~~ended~~The ~~September~~shares were issued in a private placement to an accredited investor pursuant to an exemption from registration under the Securities Act of 1933 pursuant to Section ~~30,~~4(2) ~~2009~~thereof and Rule 506 of Regulation D. The shareholder who received the forgoing shares signed a subscription agreement acknowledging that ~~has~~the ~~materially~~shares ~~affected~~were not registered under the Securities Act of 1933, and could only be sold under a registration or isexemption ~~reasonably~~from ~~likely~~registration. toEach ~~materially~~certificate ~~affect~~for ~~internal~~such ~~control~~shares ~~over~~contains ~~financial~~a ~~reporting~~restrictive legend concerning the foregoing restrictions on transfer and a stop transfer order has been lodged against such shares. The investor was offered access to our books and records and the opportunity to ask our officers questions and receive answers concerning the terms and condition of the offering and the company.

2124

~~PART~~ITEM ~~II – OTHER INFORMATION~~3

~~ITEM~~DEFAULTS 1.UPON SENIOR SECURITIES

~~LEGAL PROCEEDINGS~~None

~~None~~ITEM 4

~~ITEM~~(REMOVED ~~1A.~~AND RESERVED)

~~RISK~~ITEM ~~FACTORS~~5

~~There~~OTHER ~~have been no material changes during the period ended June 30, 2009 in our risk factors as set forth in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2008.~~INFORMATION

~~ITEM 2.~~ None

~~UNREGISTERED~~ITEM ~~SALES OF EQUITY SECURITIES AND USE OF PROCEEDS~~6

~~Common Stock~~EXHIBIT

~~In August 2009 we sold 12,500.000 shares of our common stock to an accredited investor for $500,000.~~ No ~~broker dealer was involved in the sale of the shares and no commissions or other remuneration was paid in connection with the sale~~. The shares were issued in a private placement to an accredited investor pursuant to an exemption from registration under the Securities Act of 1933 pursuant to Section 4(2) thereof and Rule 506 of Regulation D. The shareholder who received the forgoing shares signed a subscription agreement acknowledging that the shares were not registered under the Securities Act of 1933, and could only be sold under a registration or exemption from registration. Each certificate for such shares contains a restrictive legend concerning the foregoing restrictions on transfer and a stop transfer order has been lodged against such shares. The investor was offered access to our books and records and the opportunity to ask our officers questions and receive answers concerning the terms and condition of the offering and the company.

~~ITEM 3.~~ Description

~~DEFAULTS ON SENIOR DEBT~~31.1

~~None~~Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act.

~~ITEM 4~~31.2

~~SUBMISSION~~Certification OFof ~~MATTERS~~Chief TOFinancial AOfficer ~~VOTE~~Pursuant OFto ~~THE~~Section 302 ~~SECURITIES~~of ~~HOLDERS~~the Sarbanes-Oxley Act.

~~None~~32.1

~~ITEM~~Certification 5of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act.

~~OTHER~~32.2 ~~INFORMATION~~

~~None~~Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act.

~~ITEM 6.~~25

~~EXHIBIT~~SIGNATURES

~~Exhibit~~Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

~~Description~~Date: April 20, 2010

31XenaCare Holdings, Inc.1 By: /s/ Frank Rizzo Frank Rizzo President (principal executive officer) and Director By: /s/ Bobby Story Bobby Story Chief Financial Officer and Treasurer (principal financial and accounting officer)

~~Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act.~~ 26

31.2

Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act.

32.1

Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act.

32.2

Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: November 15, 2009

XenaCare Holdings, Inc. By: /s/ Frank Rizzo Frank Rizzo President (principal executive officer) and Director By: /s/ Bobby Story Bobby Story Chief Financial Officer and Treasurer (principal financial and accounting officer)

Filing Compare · Xenacare Holdings, Inc.