UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2010

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

For the transition period from ______________________ to ______________________

Commission file number: 000-53716

PURIO INC.

(Exact name of registrant as specified in its charter)

Nevada		98-05255034
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1048 – 1685 H Street

Blaine, Washington 98230

(Address of principal executive offices)

888.590.1156

(Registrant’s telephone number, including area code)

__________________________________________________

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

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

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

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

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

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

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

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

APPLICABLE ONLY TO CORPORATE ISSUERS

As of August 9, 2010 the registrant’s outstanding common stock consisted of 55,234,063 shares.

Table of Contents

PART I – FINANCIAL INFORMATION	2
Item 1. Financial Statements	2
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	3
Item 3. Quantitative and Qualitative Disclosures About Market Risk	6
Item 4. Controls and Procedures	6
PART II – OTHER INFORMATION	7
Item 1. Legal Proceedings	7
Item 2. Unregistered Sales of Equity Securities	7
Item 3. Defaults Upon Senior Securities	7
Item 4. (Removed and Reserved)	7
Item 5. Other Information	7
Item 6. Exhibits	7

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

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

Purio Inc.

(A Development Stage Company)

June 30, 2010

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

PURIO INC.

(A Development Stage Company)

CONSOLIDATED BALANCE SHEET

As at June 30, 2010 (unaudited) and December 31, 2009

	June 30,			December 31,
	2010			2009
	(Unaudited)
ASSETS
Current Assets
Cash and Cash Equivalents	$	2,062		$	279
Prepaid Expenses		-			-
Inventory		9,836			9,836
Total Current Assets		11,898			10,115
Property and Equipment
Fixed Assets, Net of Accumulated Depreciation		37,063			41,045
Other Assets
Patents		121,610			121,610

TOTAL ASSETS	$	170,571		$	172,770

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts Payable		1,070			292
Notes Payable		46,787			28,000
Subscriptions Received		291,291			291,291
Stockholders’ Loans		86,237			91,714
Total Current Liabilities		425,385			411,297

Stockholders' Equity (Deficit)
Common Stock, no par value; stated value $0.001, authorized
375,000,000 shares, issued and outstanding
55,234,063 as at June 30, 2010,
55,234,063 as at December 31, 2009		55,234			55,234
Additional Paid-In Capital		948,974			948,974
Accumulated Other Comprehensive Income		30,177			30,166
Accumulated Deficit During the Development Stage		(1,289,199	)		(1,272,901	)

TOTAL STOCKHOLDERS' EQUITY (DEFICIT)		(254,814	)		(238,527	)

TOTAL LIABILITIES AND STOCKOLDERS' EQUITY	$	170,571		$	172,770

F-1

PURIO INC.

(A Development Stage Company)

CONSOLIDATED STATEMENT OF OPERATIONS

(Unaudited)

							`						For the Period
													of Inception
													from Nov. 16,
	For the three months ended						For the six months ended						1999, through
	June 30						June 30						June 30,
	2010			2009			2010			2009			2010
Revenue
Sales	$	-		$	-		$	-		$	-		$	5,113
Selling, General and Administrative Expenses:
Marketing		-			-			-			-			40,345
Professional Fees		12,191			15,523			12,191			21,700			423,201
Exploration Costs and Expenses		-			-			-			-			22,219
Occupancy Costs		-			4,200			-			12,718			44,839
Consulting		-			-			-			-			430,698
Depreciation		1,991			2,060			3,982			4,120			44,624
Impairment of mineral rights		-			-			-			-			3,600
Stock Transfer Fees		-			-			-			-			11,018
Administration		-			8,422			-			13,524			53,564
Other Selling, General and Administrative Expenses		55			2,180			124			8,218			220,143
Total Selling, General and Administrative Expenses		14,237			32,385			16,297			60,280			1,294,251

Net Operating Loss		(14,237	)		(32,385	)		(16,297	)		(60,280	)		(1,289,138	)

Other Income (Expense)
Interest Income		-			-			-			252
Other Income		777			-			777			-			777
Interest Expense		(478	)		(476	)		(778	)		(678	)		(838	)
		(476	)		280			2,553			7,598			30,352

Net Loss		(13,888	)		(32,861	)		(16,298	)		(60,706	)		(1,289,199	)
Currency Translation Adjustment		12			-			11			2,979			30,177

Comprehensive Loss	$	(13,876	)	$	(32,861	)	$	(16,287	)	$	(57,727	)	$	(1,259,022	)

Loss Per Common Share, Basic and Diluted	$	(0.000	)	$	(0.000	)	$	(0.000	)	$	(0.001	)

Weighted Average Shares Outstanding, Basic and Diluted:		55,237,063			55,237,063			55,237,063			55,237,603

F-2

PURIO INC.

(A Development Stage Company)

CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

													For the Period
													of Inception
													Nov. 16,
	For the three months ended						For the six months ended						1999, through
	June 30,						June 30,						June 30,
	2010			2009			2010			2009			2010
Cash Flows from Operating Activities:
Net Operating Income (Loss)	$	(13,888	)	$	(32,861	)	$	(57,727	)	$	(57,727	)	$	(1,289,119	)
Adjustments to Reconcile Net Loss to
Net Cash Used by Operating Activities:
Non-Cash Depreciation		1,992			2,060			3,982			4,120			44,624
Subscriptions Received											3,500			291,291
Non Cash Common Stock for Services														373,979
Consolidation of Subsidiary Paid-In Capital														(28,994	)
Change in Operating Assets and Liabilities:
Accounts Payable, Accrued Interest		428			1,976			778			1,664			1,070
Inventory											(2,087	)		(9,836	)
Net Cash (Used by) Operating Activities		(11,468	)		(28,825	)		(11,538	)		(50,530	)		(617,065	)

Cash Flows from Investing Activities:
Acquisition of Patents														(121,610	)
Disposal (Acquisition) of Equipment														(63,904	)
Acquisition of Water Vessels														(15,722	)
Net Cash (Used by) Investing Activities		-			-			-			-			(201,236	)

Cash Flows from Financing Activities:
Common Stock Issued for Cash														564,768
Proceeds (Repayment) of Stockholders’ Loans		(5,477	)		14,200			(5,477	)		14,200			86,237
Proceeds (Repayment) of Notes Payable		18,786			1,500			18,786			1,500			46,786
Other Contributed Capital														92,395
Net Cash (Used by) Provided by Financing Activities		13,309			15,700			13,309			15,700			790,186

Effect of exchange rates on cash		12						12						30,177
Net increase (decrease) in cash		1,853			(13,125	)		1,783			(34,830	)		2,062
Cash, beginning of the period		209			14,704			279			36,409			-

Cash, end of the period	$	2,062		$	1,579		$	2,062		$	1,579		$	2,062


Supplemental cash flow disclosure:
Interest paid	$	-		$	476		$	-		$	678		$	2,471
Taxes paid	$	-		$	-		$	-		$	-		$	-

F-3

PURIO INC.

(A Development Stage Company)

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

For the Period from November 16, 1999 (Inception) to June 30, 2010

(Unaudited)

										Accumulated		Accumulated
										Other		Deficit			Total
	Common Stock						Additional			Comprehen-		during the			Shareholders'
	Number of						Paid-In			sive		Development			Equity
	Shares			Capital			Capital			Income		Stage			(Deficit)

Inception, November 16, 1999		-		$	-		$	-				$	-		$	-
Subscriptions received during period					20,379											20,379
Balances, December 31, 1999		-			20,379								-			20,379

Cash contributed from Global Tech								232								232
Subscriptions received during year					115,116											115,116
Net loss for year ended Dec. 31, 2000													(2,672	)		(2,672	)
Balances, December 31, 2000		-		$	135,495		$	232				$	(2,672	)	$	133,055

Subscriptions received during year					1,888											1,888
Net loss for year ended Dec. 31, 2001													(5,126	)		(5,126	)
Balances, December 31, 2001		-		$	137,383		$	232				$	(7,798	)	$	129,817

Subscriptions received during year					7,630											7,630
Net loss for year ended Dec. 31, 2002													(11,544	)		(11,544	)
Balances, December 31, 2002		-		$	145,013		$	232				$	(19,342	)	$	125,903

Subscriptions received during year					1,428											1,428
Net loss for year ended Dec. 31, 2003													(6,149	)		(6,149	)
Balances, December 31, 2003		-		$	146,441		$	232				$	(25,491	)	$	121,182

Subscriptions received during year					1,613											1,613
Net loss for year ended Dec. 31, 2004													(8,461	)		(8,461	)
Balances, December 31, 2004		-		$	148,054		$	232				$	(33,952	)	$	114,334

Net loss for year ended Dec. 31, 2005													(4,395	)		(4,395	)
Balances, December 31, 2005		-		$	148,054		$	232				$	(38,347	)	$	109,939

Net loss for year ended Dec. 31, 2006													(4,330	)		(4,330	)
Balances, December 31, 2006		-		$	148,054		$	232				$	(42,677	)	$	105,609

Capital revalued Sep. 28, 2007					(148,054	)										(148,054	)
Balances September 28, 2007
before stock issue		-		$	-		$	232				$	(42,677	)	$	(42,445	)

Balances September 28, 2007
before stock issue		-		$	-		$	232				$	(42,677	)	$	(42,445	)
Common stock issued for cash @
$0.0026 per share Sep. 28, 2007		10,808,694			10,809			17,569								28,378
Common stock issued for cash @
$0.036 per share Sep. 28, 2007		9,017,010			9,017			313,268								322,285
Common stock issued for cash @
$0.25 per share Sep. 28, 2007		776,600			776			193,329								194,105
Common stock issued for cash @
$0.50 per share Sep. 28, 2007		40,000			40			19,960								20,000
Common stock isued for services @
$0.0545 per share Sep. 28, 2007		6,857,696			6,858			366,886								373,744
Net loss for year ended Dec. 31, 2007													(626,948	)		(626,948	)

Balances, December 31, 2007		27,500,000		$	27,500		$	911,244				$	(669,625	)	$	269,119
Merger: Purio Environmental
Water Source, Inc. (PEWS) and
Purio, Inc. February 13, 2008:
Consolidate Purio Inc.								78,849			4,984		(93,809	)		(9,976	)
Merger adjustments								(28,994	)							(28,994	)
Retire PEWS stock		(27,500,000	)		(27,500	)		27,500
Issue Purio Stock		27,500,000			27,500			(27,500	)
Issue Purio Stock		27,737,603			27,734			(27,734	)

Net loss for year ended Dec. 31, 2008											22,422		(354,876	)		(332,454	)

Balances, December 31, 2008		55,237,603		$	55,234		$	933,365		$	27,406	$	(1,118,310	)	$	(102,305	)
Other contributed capital								15,609								15,609
Net loss for year ended Dec. 31, 2009											2,760		(154,591	)		(151,831	)

Balances, September 30, 2009		55,237,603		$	55,234		$	948,974		$	30,166	$	(1,272,901	)	$	(238,527	)
Net loss for 6 months ended June 30, 2010											11		(16,298	)		(16,287	)

Balances, June 30, 2010		55,237,603		$	55,234		$	948,974		$	30,177	$	(1,289,199	)	$	(254,814	)

F-4

PURIO INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2010

(Expressed in US Dollars)

(Unaudited)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION

The unaudited interim financial statements as of and for the six months ended June 30, 2010 reflect all adjustments which, in the opinion of management, are necessary to fairly state the Company’s financial position and the results of its operations for the periods presented in accordance with the accounting principles generally accepted in the United States of America. All adjustments are of a normal recurring nature.

These unaudited interim financial statements should be read in conjunction with the Company’s financial statements and notes thereto included in the Company’s fiscal year end December 31, 2009 report. The Company assumes that the users of the interim financial information herein have read, or have access to, the audited financial statements for the preceding period, and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. The results of operations for the six months ended June 30, 2010 are not necessarily indicative of results for the entire year ending December 31, 2010.

(A) Organization

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

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

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

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

(B) Principles of Consolidaton

The consolidated financial statements include the accounts of the Company and PEWS, the Company’s wholly owned subsidiary. Significant inter-company transactions have been eliminated.

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

(D) Cash and Cash Equivalents

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

(E) Long-Lived Assets

The Company accounts for long-lived assets under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 340-10, Other Assets and Deferred Costs. In accordance with ASC 340, long-lived assets, goodwill and certain identifiable intangible assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset will not be recoverable. For purposes of evaluating the recoverability of long-lived assets, goodwill and intangible assets, the recoverability test is performed using undiscounted net cash flows related to the long-lived assets. Impairment of experimental water clarification equipment is calculated based on its estimated useful life.

F-5

(F) Income Taxes

The Company utilizes FASB ASC 740, Income Taxes, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company generated a deferred tax credit through net operating loss carryforward. However, a valuation allowance of 100% has been established, as the realization of the deferred tax credits is not reasonably certain, based on going concern considerations outlined below.

(G) Recent Accounting Pronouncements

In May, 2009, the FASB issued ASC 855, Subsequent Events, which established

general standards of accounting and disclosure for events that occur after the balance sheet date, but before financial statements are issued or available to be issued. In accordance with ASC 855, the Company has evaluated subsequent events through the date the financial statements were filed.

In June, 2009, the FASB issued their final Statement of Financial Accounting Standards (“SFAS”) No. 168, FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles. This was reflected in the codification as FASB ASC 105, Generally Accepted Accounting Principles. “ASC” is the single source of authoritative US generally accepted accounting principles recognized by the FASB to be applied to nongovernmental entities. It is effective for financial statements issued for interim and annual periods ending after September 15, 2009. It will not have an impact on the Company’s financial position, results of operations or cash flows.

(H) Loss Per Share

Net loss per share is calculated in accordance with FASB ASC 260, Earnings Per Share, for the period presented. ASC 260 requires presentation of basic earnings per share and diluted earnings per share. Basic income (loss) per share (“Basic EPS”) is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share (“Diluted EPS”) is similarly calculated using the treasury stock. At June 30, 2010, there were no potentially dilutive securities.

The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations for the three months ended June 30, 2010 and 2009:

	2010			2009
Numerator:
Basic and diluted net loss per share:	$	(16,287	)	$	(57,727	)
Net Loss
Denominator:
Basic and diluted weighted average number of shares outstanding		55,2347,603			55,237,603
Basic and Diluted Net Loss Per Share:	$	(0.000	)	$	(0.001	)

(I) Patent

The patent is United States Patent 5904855 granted May 18, 1999 for a “Closed Chemically Advanced Treatment System”. The invention described in the patent is used by the Company in the water purification equipment which is under development. The patent is not in use to protect marketed products and is therefore not amortized. There has been no change in circumstances that would warrant impairment per an evaluation under FASB ASC 340-10.

(J) Foreign Currency Translation

In accordance with FASB ASC 830-20, Foreign Currency Transactions, the Company has determined that its functional currency is the United States Dollar. The Company recorded a foreign currency gain of $12 in the six months ended June 30, 2010. Exchange differences since inception are accumulated as a component of accumulated other comprehensive gain.

F-6

(K) Comprehensive Income (Loss)

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

(L) Fair Value of Financial Instruments

The FASB issued ASC 820-10, Fair Value Measurements and Disclosures, for financial assets and liabilities. ASC 820-10 provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. ASC 820-10 defines fair value as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. ASC 820-10 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of inputs required by the standard that the Company uses to measure fair value:

-	Level 1: Quoted prices in active markets for identical assets or liabilities

Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.

-	Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The carrying amounts of the Company’s financial instruments as of June 30, 2010, reflect

-	Cash: Level One measurement based on bank reporting.

-	Subscriptions Received: Level 2 based on contract.

-	Loans from Officers: Level 3 based on promissory notes.

-	Notes Payable: Level 2 based on observable inputs.

NOTE 2. ACQUISITION OF MINERAL PROPERTY

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

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

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

F-7

NOTE 3. STOCKHOLDERS EQUITY

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

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

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

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

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

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

At June 30, 2010, the Company was authorized to issue 375,000,000 shares, of which there were 55,234,603 shares issued and outstanding.

NOTE 4. GOING CONCERN

As reflected in the accompanying financial statements, the Company is in the development stage with no operations, and from inception has a consolidated net operating loss of $1, 289,199. The Company has negative consolidated working capital of $413,487 and a stockholders’ deficit of $254,814 as at June 30, 2010. There is substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

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

NOTE 5. LITIGATION

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

NOTE 6. SUBSEQUENT EVENTS

Events subsequent to June 30, 2010 have been evaluated through August 4, 2010, the date these statements were available to be issued, to determine whether they should be disclosed to keep the financial statements from being misleading. Management found no subsequent events to be disclosed.

F-8

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

Explanatory Note

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

Forward Looking Statements

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

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

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

Business Overview

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

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

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

Results of Operations

Our results of operations are presented below:

	Three Months Ended June 30, 2010 ($) (Unaudited)	Three Months Ended June 30, 2009 ($) (Unaudited)	Six Months Ended June 30, 2010 ($) (Unaudited)	Six Months Ended June 30, 2009 ($) (Unaudited)	Period from November 16, 1999 (Date of Inception) to June, 2010 ($) (Unaudited)
Revenue	-	-	-	-	5,113
Selling, General and Administrative Expenses	14,237	32,385	16,297	60,280	1,294,251
Net Loss	13,888	32,861	16,298	60,706	1,289,199

Results of Operations for the Three Months Ended June 30, 2010 and for the period from November 16, 1999 (Date of Inception) to June 30, 2010

During the three months ended June 30, 2010 we incurred a net loss of $13,888, compared to a net loss of $32,861 during the same period in fiscal 2009. Our net loss from our inception on November 16, 1999 to June 30, 2010 was $1,289,199. We did not experience any net loss per share during the three months ended June 30, 2010 or 2009.

Our total operating expenses during the three months ended June 30, 2010 were $14,237, compared to total operating expenses of $32,385 during the same period in fiscal 2009. Our total operating expenses from our inception on November 16, 1999 to June 30, 2010 were $1,294,251.

Our total operating expenses during the three months ended June 30, 2010 consisted entirely of selling, general and administrative expenses, including $12,191 in professional fees, $1,991 in depreciation and $55 in other selling, general and administrative expenses. We did not incur any other operating expenses during this period.

Our total operating expenses during the three months ended June 30, 2009 consisted entirely of selling, general and administrative expenses, including $15,523 in professional fees, $4,200 in occupancy costs, $2,060 in depreciation, $8,422 in administration and $2,180 in other selling, general and administrative expenses. We did not incur any other operating expenses during this period.

Our total operating expenses from our inception on November 16, 1999 to June 30, 2010 consisted of $40,345 in marketing expenses, $423,201 in professional fees, $22,219 in exploration costs and expenses, $44,839 in occupancy costs, $430,698 in consulting fees, $44,624 in depreciation, $3,600 in impairment of mineral rights, $11,018 in stock transfer fees, $53,564 in administration costs and $220,143 in other general and administrative expenses.

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

The decrease in our operating expenses for the three months ended June 30, 2010 was primarily due to decreases in our professional fees, occupancy costs and administration expenses.

Results of Operations for the Six Months Ended June 30, 2010

During the six months ended June 30, 2010 we incurred a net loss of $16,298, compared to a net loss of $60,706 during the same period in fiscal 2009. We did not experience any net loss per share during the six months ended June 30, 2010, whereas we experienced a net loss per share of $0.001 during the same period in fiscal 2009.

Our total operating expenses during the six months ended June 30, 2010 were $16,297, compared to total operating expenses of $60,280 during the same period in fiscal 2009.

Our total operating expenses during the six months ended June 30, 2010 consisted entirely of selling, general and administrative expenses, including $12,191 in professional fees, $3,982 in depreciation and $124 in other selling, general and administrative expenses. We did not incur any other operating expenses during this period.

Our total operating expenses during the six months ended June 30, 2009 consisted entirely of selling, general and administrative expenses, including $21,700 in professional fees, $12,718 in occupancy costs, $4,120 in depreciation, $13,524 in administration costs and $8,218 in other selling, general and administrative expenses. We did not incur any other operating expenses during this period.

The decrease in operating expenses for the six months ended June 30, 2010 was primarily due to decreases in our professional fees, occupancy costs, administration expenses and other selling, general and administrative expenses.

Liquidity and Capital Resources

As of June 30, 2010 we had cash of $2, 062 in our bank accounts. As of June 30, 2010 we also had inventory of $9,836, property and equipment of $37,063 and patents of $121,610, for total assets of $170,571.

As of June 30, 2010 we had current assets of $11,898, current liabilities of $425,385 and a working capital deficit of $413,487. Our accumulated deficit from our inception on November 16, 1999 to June 30, 2010 was $1,289,199 and was funded primarily through equity financing and loans from stockholders.

During the three months ended June 30, 2010 we spent net cash of $11,468 on operating activities, compared to net cash spending of $28,825 on operating activities during the same period in fiscal 2009. The decrease in our expenditures on operating activities during the three months ended June 30, 2010 was primarily due to a decrease in our net operating loss for the period.

During the six months ended June 30, 2010 we spent net cash of $11,538 on operating activities, compared to net cash spending of $50,530 on operating activities during the same period in fiscal 2009. The decrease in our expenditures on operating activities during the six months ended June 30, 2010 was primarily due to a decrease in our net operating loss for the period.

We did not engage in any investing activities during the three months or six months ended June 30, 2010, nor did we engage in any investing activities during the same periods in fiscal 2009.

During the three months ended June 30, 2010 we received net cash of $13,309 from financing activities, whereas we received net cash of $15,700 from financing activities during the same period in fiscal 2009. The increase in our receipts from financing activities during the three months ended June 30, 2010 was primarily due to an increase in our proceeds from notes payable.

During the six months ended June 30, 2010 we received net cash of $13,309 from financing activities, whereas we received net cash of $15,700 from financing activities during the same period in fiscal 2009. The increase in our receipts from financing activities during the three months ended June 30, 2010 was primarily due to an increase in our proceeds from notes payable.

We estimate our planned expenses for the next 12 months (beginning August 2010) to be approximately $1,000,000, as summarized in the table below:

Description	Potential Completion Date	Estimated Expenses ($)
Construction or purchase of purification equipment	12 months	500,000
Marketing expenses	12 months	300,000
Research and development	12 months	50,000
Professional fees (legal, accounting and auditing fees)	12 months	100,000
Other general and administrative expenses	12 months	50,000
Total		1,000,000

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

Based on our planned expenditures, we require additional funds of approximately $998,000 (a total of $1,000,000 less our approximately $2,000 in cash as of June 30, 2010) to proceed with our business plan over the next 12 months. If we are not able to obtain additional financing on a timely basis, we will be unable to conduct our operations as planned, and we will not be able to meet our obligations as they become due. In such event, we will be forced to scale down or perhaps even cease our operations.

Future Financings

We have generated limited revenues, have achieved losses since our inception, and rely upon the sale of our securities to fund our operations. We anticipate that we will incur substantial losses for the foreseeable future, and we are dependent upon obtaining outside financing to carry out our operations. Our financial statements for the three months ended March 31, 2010 have been prepared on a going concern basis and do not include any adjustments that might result from the outcome of this uncertainty.

We will require approximately $1,000,000 over the next 12 months in order to enable us to proceed with our plan of operations, including paying our ongoing expenses. These cash requirements are in excess of our current cash and working capital resources. Accordingly, we intend to raise the balance of our cash requirements for the next 12 months (approximately $998,000) from private placements, stockholder loans or possibly a registered public offering (either self-underwritten or through a broker-dealer). If we are unsuccessful in raising enough money through such efforts, we may review other financing possibilities such as bank loans. At this time we do not have a commitment from any broker-dealer to provide us with financing, and there is no guarantee that any financing will be available to us or if available, on terms that will be acceptable to us.

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

Off-Balance Sheet Arrangements

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

Critical Accounting Policies

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

Principles of Consolidation

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

Patent

The patent is United States Patent 5904855 granted May 18, 1999 for a “Closed Chemically Advanced Treatment System”. The invention described in the patent is used by us in the water purification equipment which is under development. The patent is not in use to protect marketed products and is therefore not amortized. There has been no change in circumstances that would warrant impairment per an evaluation under FASB ASC 340-10.

Inflation

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

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 4. Controls and Procedures

Disclosure Controls

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

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

Changes in Internal Control

During the three months ended June 30, 2010 there were no changes in our internal control over financial reporting (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

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

Item 2. Unregistered Sales of Equity Securities

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. (Removed and Reserved)

Item 5. Other Information

None.

Item 6. Exhibits

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

SIGNATURES

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

Date: August 9, 2010	Purio Inc.

	By:	/s/ Daryl English
		Daryl English
		President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Secretary, Treasurer and Director

PURIO INC. 10-Q