10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

(Mark One)
[  ]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended June 30, 2013
[  ]	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 000-33309

POLY SHIELD TECHNOLOGIES INC.

(Exact name of registrant as specified in its charter)

DELAWARE	33-0953557
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
428 Plaza Real, Suite 419 Boca Raton, FL	33432
(Address of principal executive offices)	(Zip Code)

1 (800) 648-4287

(Registrant's telephone number, including area code)

N/A

(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 [X]  No [  ]

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

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 [  ]	Accelerated filer [  ]
Non-accelerated filer [  ] (Do not check if a smaller reporting company)	Smaller reporting company [X]

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

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: As of August 13, 2013, the Issuer had 187,995,005 shares of common stock, issued and outstanding.

i

Table of Contents

PART I - FINANCIAL INFORMATION	1
ITEM 1. FINANCIAL STATEMENTS.	1
CONSOLIDATED BALANCE SHEETS	F-1
CONSOLIDATED STATEMENTS OF OPERATIONS	F-2
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)	F-3
CONSOLIDATED STATEMENTS OF CASH FLOWS	F-4
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS	F-5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	2
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	7
ITEM 4. CONTROLS AND PROCEDURES	8
PART II - OTHER INFORMATION	8
ITEM 1. LEGAL PROCEEDINGS	8
ITEM 1A. RISK FACTORS	8
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	13
ITEM 3. DEFAULTS UPON SENIOR SECURITIES	13
ITEM 4. MINE SAFETY DISCLOSURES	13
ITEM 5. OTHER INFORMATION	13
ITEM 6. EXHIBITS	13

ii

PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS.

The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X, and, therefore, do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders' equity in conformity with generally accepted accounting principles. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the three and six month periods ended June 30, 2013, are not necessarily indicative of the results that can be expected for the year ending December 31, 2013.

As used in this Quarterly Report, the terms "we,” "us,” "our,” and “Poly Shield” mean Poly Shield Technologies Inc. and our subsidiaries Ecolutions Inc. and New World Technologies Group Inc., unless otherwise indicated. All dollar amounts in this Quarterly Report are in U.S. dollars unless otherwise stated.

1

POLY SHIELD TECHNOLOGIES INC.

(Formerly Globetrac Inc.)

CONSOLIDATED BALANCE SHEETS

	June 30, 2013		December 31, 2012
	(unaudited)
ASSETS
Current assets
Cash	$	125,973	$	6,969
Accounts receivable		2,793		-
Prepaids		7,000		2,308
Advances		-		80,000
		135,766		89,277
Investment in option and license		802,604		946,355
Investment in distribution and license rights		50,792		-
	$	989,162	$	1,035,632
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities
Accounts payable	$	196,328	$	156,494
Accrued liabilities		164,901		112,577
Unearned revenue		350,000		-
Notes and advances payable		891,723		691,060
Due to related parties		5,722		30,101
		1,608,674		990,232
Stockholders' equity (deficit)
Common stock $0.001 par value, 200,000,000 common shares authorized, 187,845,005 issued and outstanding at June 30, 2013 (December 31, 2012 - 33,745,005)		187,845		33,745
Additional paid in capital		2,193,903		2,295,003
Obligation to issue shares		45,000		-
Accumulated deficit		(3,057,925)		(2,295,013)
Accumulated other comprehensive income		11,665		11,665
		(619,512)		45,400
	$	989,162	$	1,035,632

The accompanying notes are an integral part of these interim consolidated financial statements

F-2

POLY SHIELD TECHNOLOGIES INC.

(Formerly Globetrac Inc.)

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
		2013		2012	2013		2012
Royalty income	$	3,757	$	(692)	$	13,976	$	5,477
Amortization of license		74,084		59,895		145,959		59,895
General and administrative expenses		185,674		115,315		490,601		143,479
Royalty fee		25,000		20,833		50,000		20,833
Loss before other items		(281,001)		(196,735)		(672,584)		(218,730)
Other items
Interest expense		(49,184)		(24,818)		(90,328)		(26,495)
Net loss	$	(330,185)	$	(221,553)	$	(762,912)	$	(245,225)
Net loss per share - basic and diluted	$	(0.00)	$	(0.01)	$	(0.00)	$	(0.01)
Weighted average number of shares outstanding - basic and diluted		187,845,005		33,172,177		157,198,044		32,449,955

The accompanying notes are an integral part of these interim consolidated financial statements

F-3

POLY SHIELD TECHNOLOGIES INC.

(Formerly Globetrac Inc.)

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2013

(unaudited)

											Accumulated
	Common shares				Obligation		Additional				Other
	Number of				to Issue		Paid-in		Accumulated		Comprehensive
	Shares		Amount		Shares		Capital		Deficit		Income		Total
Balance at December 31, 2011		31,727,775	$	31,728	$	-	$	1,292,020	$	(1,517,213)	$	11,665	$	(181,800)
Adjustment to shares due to rollback		564		-		-		-		-		-		-
Shares issued on purchase of a license agreement		1,666,667		1,667		-		898,333		-		-		900,000
Shares issued for cash		350,000		350		-		104,650		-		-		105,000
Net loss for the year ended December 31, 2012		-		-		-		-		(777,800)		-		(777,800)
Balance at December 31, 2012		33,745,005		33,745		-		2,295,003		(2,295,013)		11,665		45,400
Shares issued under employment agreement		154,000,000		154,000		-		81,466,000		-		-		81,620,000
Deferred compensation		-		-		-		(81,620,000)		-		-		(81,620,000)
Shares issued for purchase of subsidiary		100,000		100		-		52,900		-		-		53,000
Obligation to issue shares						45,000								45,000
Net loss for the  six months ended June 30, 2013		-		-		-		-		(762,912)		-		(762,912)
Balance at June 30, 2013		187,845,005	$	187,845	$	45,000	$	2,193,903	$	(3,057,925)	$	11,665	$	(619,512)

The accompanying notes are an integral part of these interim consolidated financial statements

F-4

POLY SHIELD TECHNOLOGIES INC.

(Formerly Globetrac Inc.)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

	Six months Ended June 30,
	2013		2012
Cash flows used in operating activities
Net loss	$	(762,912)	$	(245,225)
Non cash items:
Amortization		145,959		59,895
Website design		45,000		-
Foreign exchange expense		(10,428)		-
Changes in operating assets and liabilities:
Accounts receivable		(2,793)		3,445
Prepaids		(4,692)		(9,683)
Advances receivable		80,000		-
Advances payable		44,765		-
Accounts payable		39,834		25,838
Accrued liabilities		52,324		11,995
Unearned revenue		350,000		-
Due to related parties		(24,379)		(3,089)
Accrued interest		89,712		7,988
Net cash used in operating activities		42,390		(148,836)
Cash flows from financing activities
Notes payable to related party		-		12,000
Notes payable		76,614		446,437
Net cash provided by financing activities		76,614		458,437
Cash flows used in investing activities
Investment in option agreement		-		(250,000)
Net cash used in investing activities		-		(250,000)
Net increase in cash		119,004		59,601
Cash, beginning		6,969		707
Cash, ending	$	125,973	$	60,308
Cash paid for:
Income tax	$	-	$	-
Interest	$	2,731	$	18,506

The accompanying notes are an integral part of these interim consolidated financial statements

F-5

POLY SHIELD TECHNOLOGIES INC.

(Formerly GLOBETRAC INC.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2013

(UNAUDITED)

NOTE 1 - ORGANIZATION AND NATURE OF OPERATIONS

Poly Shield Technologies Inc. (the “Company”) was in the global wireless tracking business in Europe until November 1, 2004, when it exchanged this business for a royalty of 6% on future gross sales.  This royalty agreement expires on October 31, 2015.

On March 12, 2012, the Company entered into an agreement to purchase the rights to market the products of Teak Shield Corp. (“Teak Shield”). Teak Shield has several proprietary processes for the production of coatings used to protect surfaces from corrosion, oxidation and degradation (Note 4).  

On December 1, 2012, the Company entered into an agreement (the “Employment Agreement”) with Rasmus Norling (the “Vendor”), the inventor and owner of certain technology used to remove alkali metal from fuel in efforts to protect gas turbines from corrosion (Note 3).

On January 31, 2013, the Company acquired all of the issued and outstanding shares in the capital of Ecolutions, Inc., (“Ecolutions”) which was formed by the Vendor on November 15, 2012, for the purpose of developing and marketing environmental and pollution emission solutions internationally. As a result of the acquisition, Ecolutions became a wholly owned subsidiary of the Company (Note 5).

On April 8, 2013, the Company acquired all of the outstanding shares of New World Technologies Group Inc. (“New World”) for consideration of $1. At the time of the acquisition, New World had no assets or liabilities.

Basis of presentation

The unaudited interim consolidated financial statements included herein have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X.  They do not include all information and notes required by generally accepted accounting principles for complete financial statements.  However, except as disclosed herein, there has been no material change in the information disclosed in the notes to the financial statements included in the Annual Report on Form 10-K of Poly Shield Technologies Inc. for the year ended December 31, 2012. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation have been included.  Operating results for the three and six months ended June 30, 2013, are not necessarily indicative of the results that may be expected for the year ending December 31, 2013.  For further information, these unaudited financial statements and the related notes should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2012, included in the Company’s report on Form 10-K.

Reclassifications

Certain prior period amounts in the accompanying consolidated financial statements have been reclassified to conform to the current period’s presentation.  These reclassifications had no effect on the consolidated results of operations or financial position for any period presented.

Going Concern

The accompanying unaudited consolidated financial statements have been prepared assuming the Company will continue as a going concern. Continuation as a going concern is dependent upon the ability of the Company to obtain the necessary financing to meet obligations and pay its liabilities arising from normal business operations when they come due and ultimately upon its ability to achieve profitable operations.  The outcome of these matters cannot be predicted with any certainty at this time and raise substantial doubt that the Company will be able to continue as a going concern.  These unaudited interim consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern.  Management intends to obtain additional funding by borrowing funds from its directors and officers, issuing promissory notes and/or a private placement of common stock.

F-6

NOTE 2 - RELATED PARTY TRANSACTIONS

	June 30, 2013		December 31, 2012
Due to a company controlled by a director (a)	$	5,460	$	29,839
Due to a director of the Company (a)		262		262
Due to related parties	$	5,722	$	30,101

a)  Amounts are unsecured, are due on demand and bear no interest.

During the six months ended June 30, 2013 and 2012, the Company paid $80,000 and $35,500 respectively in administrative fees to a company controlled by a director.

NOTE 3 - EMPLOYMENT AGREEMENT

On December 6, 2012, the Company entered into an Employment Agreement with the Vendor. This agreement became effective on February 5, 2013 (“Effective Date”) when the Company’s board of directors determined that the Vendor had satisfied his obligations to deliver certain deliverables including a ten year license for the rights to utilize, market, sell and distribute emission abatement technologies and certain intellectual property (“Minimum Technology Rights”). Under the terms of the Employment Agreement, the Vendor was appointed the Company’s Chief Executive Officer and received a signing bonus of $180,000. Beginning on the first anniversary of the Effective Date, the Vendor will be paid an annual base salary of $180,000 per year. In addition, on the Effective Date, the Company issued 154,000,000 shares of its common stock with a fair value of $81,620,000, which were placed in escrow and will be released to the Vendor upon delivery of bona fide contracts for the sale or lease of products or services at a rate of one share for each $0.25 in revenue. Escrowed stock will be released in increments of 1,250,000 shares of common stock. Escrowed stock which will not be eligible for release by December 31, 2013, will be forfeited.

On January 12, 2013, as part of the Minimum Technology Rights required by Employment Agreement, the Vendor assigned to the Company rights to U.S. and European patent applications for the desalination “Bio Scrubber” technology.

NOTE 4 - LICENSE AGREEMENT

On March 12, 2012, the Company entered into a license agreement with Teak Shield (the “Teak Shield License”) and its owners Robert and Marion Diefendorf (the “Licensors”) whereby the Company has acquired a license to market and sell Teak Shield’s licensed products. In exchange, the Company agreed to pay a 5% royalty to the Licensors with a minimum $100,000 annual royalty payment, and agreed to issue to the Licensors 1,666,667 shares of the Company.  At June 30, 2013, the Company has accrued $120,833 in royalty payable under this agreement.

On April 13, 2012, the purchase of the Teak Shield License was completed and 1,666,667 shares with a fair value of $900,000 were issued.  As part of the agreement the Company acquired a two year option to purchase 100% of the Licensor’s ownership and interest in its proprietary rights and assets (the “Teak Shield Option”) including all licensed products, manufacturing, patents, intellectual property, technology, contracts, trademarks and goodwill for $250,000. To exercise the Teak Shield Option the Company must pay an additional $2,750,000.

The Teak Shield License and the Teak Shield Option are in effect for two years from the completion of the acquisition, and may be automatically renewed for a further two years. During the six months ended June 30, 2013, amortization expense of $143,751 (2012 - $59,895) was recorded.

The following table summarizes investment in option and license:

	June 30, 2013		December 31, 2012
Purchase price of Teak Shield License	$	900,000	$	900,000
Purchase price of Teak Shield Option		250,000		250,000
Amortization for the period		(347,396)		(203,645)
Total investment in option and license	$	802,604	$	946,355

F-7

In connection with the purchase of the Teak Shield Option, on April 19, 2012, the Company signed a loan agreement for $260,000, repayable on December 31, 2013 (the “Acamar Loan”) (Note 6).  Interest is calculated at 3.5% per month for an effective rate of 51% per annum.  The minimum interest payable on the loan is $26,000. The loan is secured by the Teak Shield License.

NOTE 5 - DISTRIBUTION AND LICENSE RIGHTS

On January 31, 2013, the Company issued 100,000 shares of its common stock with a fair value of $53,000 as a purchase price for all of the issued and outstanding shares in the capital of Ecolutions which held the rights to the intellectual property of Green Tech Marine AS (“GTM”). As a result of acquiring Ecolutions, the Company acquired distribution and license rights to the Exhaust Scrubber (the “GTM Contracts”), a proprietary exhaust gas scrubber technology developed by GTM.

Under the terms of the GTM Contracts, the Company is granted exclusive distribution rights for the Exhaust Scrubber for all of North America and Singapore, as well as non-exclusive distribution rights for the rest of the world (excluding any existing GTM customers and customers not generated by the Company).

GTM has also provided the Company with an exclusive license to manufacture, sell and distribute the Exhaust Scrubber and the related technologies in North America and Singapore, and non-exclusive rights to the rest of the world (excluding any existing GTM customers and customers not generated by the Company).

The GTM Contracts are in effect for ten years until November 15, 2022, and may be automatically renewed for a further ten year period unless either party gives written notice of termination at least 90 days prior to the then current term.  

The GTM Contracts are amortized over 10 years on a straight line basis. During the six months ended June 30, 2013, amortization expense of $2,208 (2012 - $Nil) was recorded.

NOTE 6 - NOTES AND ADVANCES PAYABLE

On February 5, 2013, the Company received a $40,000 advance, on April 5, 2013 a $7,500 advance was received; and on May 13, 2013 a $7,000 advance was received, all of which were added to the outstanding balance of the Acamar Loan. As of June 30, 2013, the total amount of the note payable under the Acamar Loan is $339,500 (Note 4). On July 24, 2013, Acamar agreed to extend the Acamar Loan to December 31, 2013.

During the six months ended June 30, 2013, the Company received advances for the total of $140,236. The advances do not bear interest, are due on demand and are unsecured.

During the six months ended June 30, 2013, the Company repaid $45,000 in advances received from unrelated parties. The advances bore no interest, were unsecured and due on demand.

During the six months ended June 30, 2013, the Company repaid $20,000 in principal and $2,731 in interest on a loan received from an unrelated party. The loan was unsecured and due on demand.

NOTE 7 - SUBSEQUENT EVENTS

On May 28, 2013, the Company entered into an agreement for the development of marketing, branding and design services. Under the agreement, the Company was to pay the consultant the equivalent sum of $60,300 in shares of the Company. 150,000 shares were due when the agreement was executed. The 150,000 shares were issued subsequent to June 30, 2013 and have been recorded as an obligation to issue shares as at June 30, 2013.

On July 18, 2013 the company signed a contract with a major ship management company to install two DSOX-15 fuel scrubbers on two of their ships.  The agreement provides for the purchase of up to forty additional DSOX-15 fuel purification systems at the same price should the ship management company wish to do so. Under the agreement, the Company is required to maintain at its sole expense comprehensive general liability insurance with a minimum combined single limit of liability of $5,000,000. The policy shall be maintained during the term of the agreement. As at June 30, 2013, the Company has received a deposit for the two units.

F-8

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this Quarterly Report constitute "forward-looking statements". These statements, identified by words such as “plan,” "anticipate," "believe," "estimate," "should," "expect" and similar expressions, include our expectations and objectives regarding our future financial position, operating results and business strategy. These statements reflect the current views of management with respect to future events and are subject to risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from those described in the forward-looking statements. Such risks and uncertainties include those set forth under this caption "Management's Discussion and Analysis" and elsewhere in this Quarterly Report. We do not intend to update the forward-looking information to reflect actual results or changes in the factors affecting such forward-looking information. We advise you to carefully review the reports and documents we file from time to time with the United States Securities and Exchange Commission (the “SEC”).

OVERVIEW

We were incorporated under the laws of the State of Delaware on March 2, 2000, under the original name 411 Place.com Inc.  On February 28, 2001, we changed our name to Artescope, Inc., on July 29, 2002, we changed the name to GlobeTrac Inc. and on July 11, 2012, to Poly Shield Technologies Inc. On July 11, 2012, we also effected a consolidation of our issued and outstanding common stock on a one-for-three basis (the “Reverse Split”), without decreasing our authorized capital.  We currently have an authorized capital of 205,000,000 shares with a par value of $0.001, consisting of 200,000,000 shares of Common Stock and 5,000,000 shares of Preferred Stock with 187,845,005 shares of Common Stock currently issued and outstanding. Our principal executive offices are headquartered in Boca Raton, Florida.

We are in the business of marketing cost effective, energy efficient and durability solutions in various industries worldwide. Currently our main efforts are directed toward marketing of the Exhaust Scrubber and DSOX-15 fuel purification systems as well as the fluoropolymer products to various divisions of the marine industry, such as cruise, cargo, tanker and navy ships.  Through our wholey owned subsidiary, New World Technologies Group Inc., we also market commercial property efficiency products.

Under the terms of our Collaboration, Master Distributorship and License Agreements with Green Tech Marine AS, a Norwegian corporation, we act as the exclusive distributor for the Exhaust Scrubber in North America (the United States, Canada and Mexico) and Singapore, and a non-exclusive distributor for the Exhaust Scrubber for the rest of the world. The main purpose of the Exhaust Scrubber is to remove sulfur oxides and other particulate matter from exhaust gas produced by ships during normal operations.

Our proprietary DSOX-15 Fuel Purification System is a cost-effective technology designed to remove sulfur from fuel in an effort to meet the upcoming sulfur emissions regulations due to take effect in 2015. The technology is directly aimed at the maritime industry which includes vessels for criuse-line, freight shipping and tanker companies and can be installed during normal vessel operation without the need to use expensive dry dock time. The technology has a worldwide application that is not limited to the maritime industry.

The New World Technologies’ WaterX heat recovery system has the potential to result in 30% or higher energy savings versus a standard HVAC system.  New World Technologies also offers its CoolX system for cooling tower upgrade and maintenance without the need for chemicals, and in full compliance of the new 8 cycle requirement set by EPA 2012 where the objective is to save water.  The EnergX system captures energy from exhaust fan units which is reused in the AC system to reduce load and energy consumption.

We act as a worldwide distributor of the fluoropolymer coatings developed by Teak Shield Corp. Fluoropolymers are polymer materials containing fluorine atoms in their chemical structure. The unique electronic structure of the fluorine atom gives these coatings such excellent properties as outstanding chemical resistance, weather stability, low surface energy and extreme flexibility. One of the main usages for these products is in marine industry, which is why our fluoropolymer products complement our Exhaust Scrubber and DSOX-15 fuel purification systems.

In addition to the technologies described above, we have a royalty agreement with WebTech Wireless Inc. (“WebTech”) under which we have a royalty right to 6% of gross qualified sales made by WebTech to qualified potential customers related to our former wireless tracking and telematics equipment business.

During the next twelve months, we plan to refine our business and marketing plan for the DSOX-15 and the Exhaust Scrubber as well as the New World Technologies and Teak Shield products and expand our presence in the marine technology market.

2

Recent Corporate Developments

The following corporate developments have occurred during the second quarter ended June 30, 2013, and up to the date of the filing of this report:

Acamar Loan Extension

On July 24, 2013, we received a letter from Acamar Investments, Inc. (“Acamar”), certifying that Acamar has agreed to extend the maturity date of the loan (the “Acamar Loan”) from June 30, 2013, to December 31, 2013. Acamar advanced the Acamar Loan to us in accordance with the terms of a loan agreement dated April 19, 2012, between Acamar and us. All remaining terms and conditions of the Loan Agreement remain unchanged. At the date of the filing of this report, we have borrowed a total of $339,500 under the Acamar Loan and accrued $104,037 in interest.

New World Technologies Group Inc.

On April 8, 2013, we acquired all of the outstanding shares of New World Technologies Group Inc. ("New World") for consideration of $1. New World will initially focus on marketing systems to increase commercial property efficiency including reduction of energy consumption, energy recovery, cooling tower upgrade and maintenance, and water system descaling and biofilm prevention.

Shares for Services

On May 28, 2013, we entered into an agreement for the development of marketing, branding and design services.  Under the terms of the agreement, we agreed to pay the consultant the sum of $60,300 payable in shares of our common stock at a deemed price of $0.2999 per share.  150,000 shares were due when the agreement was executed, which shares were issued in August 2013.  The remaining 51,067 shares will be issued upon completion of the services.  The shares were issued pursuant to the exemptions from registration provided by Rule 506 of Regulation D of the Securities Act of 1933, as amended, based on representations provided by the consultant that he is an accredited investor as defined in Regulation D.

Sales Agreement with LMS Ship Management Inc. (“LMS”)

On July 19, 2013, we entered into sales and purchase agreement with LMS dated effective July 18, 2013 for the installation of two DSOX-15 fuel scrubbers on cargo ships operated and manged by LMS.  The agreement also provides LMS with an option to purchase up to 40 additional DSOX-15 fuel purification systems at the same price.  Additional details of our agreement with LMS are provided in our Current Report on Form 8-K, filed on July 24, 2013.

3

RESULTS OF OPERATIONS

	Three months Ended June 30,				Percentage Increase / (Decrease)
	2013		2012
Royalty income	$	3,757	$	(692)		-642.9%
Amortization of license		74,084		59,895		23.7%
General and administrative		185,674		115,315		61.0%
Royalty fee		25,000		20,833		20.0%
Operating expenses		284,758		196,043		45.3%
Loss before interest expense		(281,001)		(196,735)		42.9%
Interest		(49,154)		(24,818)		98.2%
Net loss	$	330,185	$	221,553		49.0%

	Six months Ended June 30,				Percentage Increase / (Decrease)
	2013		2012
Royalty income	$	13,976	$	5,477		155.2%
Amortization of license		145,959		59,895		143.7%
General and administrative		490,601		143,479		241.9%
Royalty fee		50,000		20,833		140.0%
Operating expenses		686,560		224,207		206.2%
Loss before interest expense		(672,584)		(218,730)		207.5%
Interest		(90,328)		(26,495)		240.9%
Net loss	$	762,912	$	245,225		211.1%

Revenues

Our royalty revenue increased by $4,449 or 642.9% from a negative revenue of $692 for the three months ended June 30, 2012, to $3,757 for the three months ended June 30, 2013. All of our revenue was the result of the 6% royalty under the Royalty Agreement with WebTech. The increase mainly resulted from a reorganization of WebTech’s European operations. Revenues for the three months ended June 30, 2012 were negative due to an over accrual of estimated revenues in the prior quarter.

Our royalty revenue increased by $8,499 or 155.2% from $5,477 for the six months ended June 30, 2012, to $13,976 for the six months ended June 30, 2013. All of our revenue was the result of the 6% royalty under the Royalty Agreement with WebTech. The increase mainly resulted from a reorganization of WebTech’s European operations.

Operating Expenses

During the three months ended June 30, 2013, our operating expenses increased by $88,715 or 45.3% from $196,043 for the three months ended June 30, 2012, to $284,758 for the three months ended June 30, 2013.  This change was primarily caused by: an increase of $45,000 in website design costs, an increase of $15,278 in salary and withholding taxes paid to or accrued on behalf of our CEO and an increase of $50,950 in travel. These increases were associated with the development of our  business related to the Exhaust Scrubber and the DSOX-15 fuel purification system along with the development of our new subsidiary, New World Technologies Group Inc.

During the six months ended June 30, 2013, our operating expenses increased by $462,353 or 206.2% from $224,207 for the six months ended June 30, 2012, to $686,560 for the six months ended June 30, 2013.  This change was primarily caused by $207,793 in salary and withholding taxes paid to or accrued on behalf of our CEO, non-cash amortization expense of $145,959, recorded on our license and option rights under the Teak Shield License Agreement, website design cost increase of $33,857, as well as accrued royalty fee payable to Teak Shield of $50,000. Our professional fees increased by $23,010, administration expenses by $44,500, and travel and entertainment expenses by $71,305. These increases were associated with the acquisition of the rights to the Exhaust Scrubber and the Bio Scrubber, along with the development of the DSOX-15 fuel purification system, our business and our new subsidiary, New World Technologies Group Inc.

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Our business efforts with respect to the Exhaust Scrubber, DSOX-15 fuel purification system, New World products and fluoropolymer products are currently in the development stage, and thus, as we pursue the development of our new business, we expect our operating expenses to increase in the fiscal 2013 as compared to the prior year’s results.  In addition, because we do not have any operating history with respect to these business lines, it may be difficult for us to predict future operating expenses and capital requirements related to these businesses and our historical results are not expected to be reflective of future expenses and capital requirements.

Other Items

During the three months ended June 30, 2013, our interest expenses increased by $24,366, or 98.2% from $24,818 for the  three months ended June 30, 2012, to $49,184 for the three months ended June 30, 2013.

During the six months ended June 30, 2013, our interest expenses increased by $63,833, or 240.9% from $26,495 for the six months ended June 30, 2012, to $90,328 for the six months ended June 30, 2013.

LIQUIDITY AND CAPITAL RESOURCES

Working Capital

	June 30, 2013		December 31, 2012		Percentage Increase / (Decrease)
Current Assets	$	135,766	$	89,277		52%
Current Liabilities		1,608,674		990,232		62%
Working Capital Deficit	$	(1,472,908)	$	(900,955)		63%

As of June 30, 2013, we had a cash balance of $125,793, a working capital deficit of $1,472,908 and cash flows from operations of $4,596 for the  six months then ended. During the six months ended June 30, 2013, we primarily funded our operations with $187,500 in loans and advances received during this period and with a deposit received for the sale of DSOX-15 fuel purification systems.

Cash Flows

	Six months Ended June 30,
	2013		2012
Cash Flows Provided by (Used in) Operating Activities	$	42,930	$	(148,836)
Cash Flows Provided by Financing Activities		76,614		458,437
Cash Flows Used in Investing Activities		-		(250,000)
Net Increase in Cash During Period	$	119,004	$	59,601

Net Cash Used in Operating Activities

Net cash provided by operating activities during the six months ended June 30, 2013, was $42,390. This cash was primarily provided by unearned revenue of $350,000 and was offset by our operating loss of $762,912  Cash from operations was also provided by a decrease in advances of $80,000, increases in accounts payable of $39,834, accrued liabilities of $52,325, and accrued interest on notes and advances payable of $89,712. During the same period we recorded non-cash items of $145,959 for amortization of the license and option to purchase and $45,000 for web site design expense.

Net cash used in operating activities during the six months ended June 30, 2012, was $148,836. This cash was primarily used to cover our operating loss of $245,225. These uses of cash were offset primarily by increases in due to accounts payable of $25,838 and accrued liabilities of $11,995. During the same period we recorded a non-cash item of $59,895 for amortization of the license and option to purchase.

Net Cash Provided by Financing Activities

During the six months ended June 30, 2013, we received $194,835 in loans and advances from unrelated parties. In addition, we repaid $118,221 in loans and advances including $2,731 in interest. $89,712 in interest was accrued on the loans and we had a $10,228 gain on foreign exchange in holding of Canadian dollar denominated loans.

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During the six months ended June 30, 2012, we received $12,000 in exchange for a non-convertible note payable to a related party and $446,437 in loans was received from unrelated parties. We also repaid $3,089 to related parties.

Net Cash Used in Investing Activities

We did not have any investing activities during the six months ended June 30, 2013.  

In the six months ended June 30, 2012 we invested $250,000 for an option to purchase the assets of Teak Shield.  This is a two year option to purchase 100% of the Licensor’s ownership and interest in its proprietary rights and assets (the “Teak Shield Option”) including all licensed products, manufacturing, patents, intellectual property, technology, contracts, trademarks and goodwill for $250,000. To exercise the Teak Shield Option the Company must pay an additional $2,750,000.

Going Concern

The notes to our financial statements at June 30, 2013, disclose our uncertain ability to continue as a going concern. We were in the business of selling, marketing, distributing and installing global wireless tracking and telematics equipment in Europe until November 1, 2004, when we exchanged our rights to sell, market, distribute and install global wireless tracking and telematics equipment in Europe as well as specific assets and liabilities, for a royalty of 6% on future gross sales to qualified customers in Europe. This royalty agreement ends on November 1, 2015, which will end the revenue from this source. Our other products earned limited revenue.

On July 18, 2013 we signed a contract with a major ship management company to install two DSOX-15 fuel purification systems on two of their ships.  The agreement provides for the purchase of up to forty additional DSOX-15 fuel purification systems at the same price should the ship management company wish to do so.

We have accumulated a deficit of $3,057,925 since inception and increased sales will be required to fund and support our operations. We plan to mitigate our losses in future years by controlling our operating expenses and actively seeking contracts for our new technologies. However, we cannot assure you that we will be successful in these efforts. The financial statements do not include any adjustments that might result from the outcome of these uncertainties

Off-Balance Sheet Arrangements

None.

Critical Accounting Policies

An appreciation of our critical accounting policies is necessary to understand our financial results. These policies may require management to make difficult and subjective judgments regarding uncertainties, and as a result, such estimates may significantly impact our financial results. The precision of these estimates and the likelihood of future changes depend on a number of underlying variables and a range of possible outcomes. Other than our accounting for our royalty revenue, our critical accounting policies do not involve the choice between alternative methods of accounting. We have applied our critical accounting policies and estimation methods consistently.

Revenue Recognition

Revenue is recognized when pervasive evidence of an agreement exists, when it is received or when the income is determinable and collectability is reasonably assured.

Accounts Receivable

Receivables represent valid claims against debtors for royalties arising on or before the balance sheet date and are reduced to their estimated net realizable value.  An allowance for doubtful accounts is based on an assessment of the collectability of all past due accounts. At June 30, 2013, and December 31, 2012, our allowance for doubtful accounts was $0.

At June 30, 2013, our accounts receivable consisted of royalty revenue for the months of May and June 2013. As of the date of the filing, we have not received payment of the recorded royalty.

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Foreign Exchange Risk

We are subject to foreign exchange risk on our royalty revenue and some purchases which are denominated in Canadian dollars. Foreign currency risk arises from the fluctuation of foreign exchange rates and the degree of volatility of these rates relative to the U.S. dollar.  Foreign exchange rate fluctuations may adversely impact our results of operations as exchange rate fluctuations on transactions denominated in currencies other than our functional currency result in gains and losses that are reflected in our Statement of Operations. To the extent the U.S. dollar weakens against foreign currencies, the translation of these foreign currency-denominated transactions will result in increased net revenue. Conversely, our net revenue will decrease when the U.S. dollar strengthens against foreign currencies. We do not believe that we have any material risk due to foreign currency exchange.

Fair Value of Financial Instruments

Our financial instruments include cash, accounts receivable, accounts payable and accrued liabilities. We believe the fair value of these financial instruments approximate their carrying values due to their short maturities.

Concentration of Credit Risk

Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and trade accounts receivable.

At June 30, 2013, we had $125,973 in cash on deposit with a large chartered Canadian bank; $2,000 of this cash was insured.  As part of our cash management process, we perform periodic evaluations of the relative credit standing of this financial institution.  We have not experienced any losses in cash balances and do not believe we are exposed to any significant credit risk on our cash.

Accounts receivable consists of royalty income from one source and is not collateralized.  We continually monitor the financial condition of our customer to reduce the risk of loss. We routinely assess the financial strength of our source of revenue income and as a consequence, concentration of credit risk is limited. At June 30, 2013, we had $2,793 in royalties receivable from this source.

Recent Accounting Standards and Pronouncements

Recent accounting pronouncements issued by the Financial Accounting Standards Board or other authoritative standards groups with future effective dates are either not applicable or are not expected to be significant to our financial statements.

Subsequent Events

On May 28, 2013, we entered into an agreement for the development of marketing, branding and design services. Under the agreement, the we agreed to pay the consultant the equivalent sum of $60,300 in shares of our common stock. 150,000 shares were due when the agreement was executed. The 150,000 shares were issued subsequent to June 30, 2013 and have been recorded as an obligation to issue shares as at June 30, 2013.

We signed a contract, dated effective July 19, 2013, with a major ship management company to install two DSOX-15 fuel scrubbers on two of their ships.  The agreement provides for the purchase of up to forty additional DSOX-15 fuel purification systems at the same price should the ship management company wish to do so. Under the agreement, we are required to maintain at our sole expense comprehensive general liability insurance with a minimum combined single limit of liability of $5,000,000. The policy shall be maintained during the term of the agreement. As at June 30, 2013,  we have received a deposit for the two units.

 On July 24, 2013, Acamar agreed to extend the Acamar Loan to December 31, 2013.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not Applicable.

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ITEM 4. CONTROLS AND PROCEDURES.

In connection with the preparation of this quarterly report on Form 10-Q, an evaluation was carried out by our management, with the participation of our Chief Executive Officer and the Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”) as of June 30, 2013. Based on that evaluation, our management concluded, as of the end of the period covered by this report, that our disclosure controls and procedures were effective in recording, processing, summarizing, and reporting information required to be disclosed, within the time periods specified in the Securities and Exchange Commission’s rules and forms.

During the quarter ended June 30, 2013, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

None.

ITEM 1A. RISK FACTORS.

The following are certain risk factors that could affect our business, financial position, results of operations or cash flows. These risk factors should be considered along with the forward-looking statements contained in this Quarterly Report on Form 10-Q because these factors could cause our actual results or financial condition to differ materially from those projected in forward-looking statements. The following discussion is not an all-inclusive listing of risks, although we believe these are the more material risks that we face. If any of the following occur, our business, financial position, results of operations or cash flows could be negatively affected. We caution the reader to keep these risk factors in mind and refrain from attributing undue certainty to any forward-looking statements, which speak only as of the date of this Quarterly Report.

We cannot guarantee that we will continue receiving royalty revenue from our agreement with WebTech Wireless (“WebTech”).

From November 2004 through the date of filing of this report on Form 10-Q, our sole source of revenue was from royalties received from WebTech on the sale of global wireless tracking and telematics equipment from qualified customers. In 2012 WebTech closed their UK office and curtailed some of their European operations. Even though WebTech continues its sales in Europe through its head office based in Canada, we cannot accurately predict future revenue from our royalty agreement due to uncertainties resulting form the WebTech’s changes in operations.

We have earned limited revenues from the sale of products or services related to the Exhaust Scrubber, the DSOX-15 fuel purification system, the New World Technologies products and the fluoropolymer products.

Our current principal business focus is on the sale of products and services related to the Exhaust Scrubber, the DSOX-15 fuel purification system, the New World Technologies products and the Teak Shield fluoropolymer products.  However, our efforts in these areas are in the development stage and we have earned limited revenues related to these business efforts, and there is no assurance that we will be able to earn revenues from these businesses in the future.

We have only one supplier for our Exhaust Scrubbers.

Our Exhaust Scrubber is manufactured by Green Tech Marine AS (“Green Tech Marine”) and Green Tech Marine is currently our sole supplier. Until we reach Manufacturing Capability under the GTM Contracts, of which there is no assurance, we will be wholly restricted to the manufacturing capacity of our sole supplier.

Flag Ship Approval under Regulation 4 of Marpol Annex VI is made on a ship by ship basis.

The approval of the scrubber installation is made on a ship by ship basis and it is very hard to receive a Type Approval for the system prior to the installation. While our Exhaust Scrubber is the only scrubber to have received Type Approval for large gas turbine engines, we cannot guarantee that it will receive Type Approval on future installations.  Failure to receive Type Approval on future installations could have a significant material impact on the financial results of our Company.

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We have only one supplier that has approval to use the formula to produce our fluoropolymer products.

The formula used to produce our fluoropolymer products is controlled by the Teak Shield Licensors and our sole supplier of our Teak Shield products is a manufacturing company owned by the Teak Shield Licensors. Since we do not own the formula, we cannot produce the products on our own. Unless we exercise the Teak Shield Option to purchase all of the Teak Shield Licensors’ proprietary rights to the Shield Products, of which there is no assurance, we will be restricted to the manufacturing capacity of our sole supplier.

We have a lack of operating history in the fluoropolymer, scrubber and commercial property efficiency industries and there is no assurance that our business efforts in these fields will be successful.

With our entry into the Teak Shield License Agreement, GTM Contracts, and development of the DSOX-15 fuel purification system technology and the New World Technologies products, we have added to our business. Although our Board of Directors and Executive Officers have extensive business experience, they do not have experience in the fluoropolymer industry, and aside from our Chief Executive Officer, limited experience in the scrubber industry. Some of our competitors may have greater experience and/or greater financial resources than we do at this time. We intend to hire experienced sales and consulting teams to market our products. However, we have no history of earning revenue in the fluoropolymer, as well as the Exhaust and the DSOX-15 fuel purification system and New World Technologies businesses, and there is no assurance that our business efforts in these industries will prove successful.

Inability to protect and enforce our intellectual property rights could adversely affect our financial results.

Intellectual property rights, including patents, trade secrets, confidential information, trademarks, tradenames and other forms of trade dress, are important to our business. We endeavor to protect our intellectual property rights in jurisdictions in which our products are produced or used and in jurisdictions into which our products are imported. However, we may be unable to obtain protection for our intellectual property in key jurisdictions. We have designed and implemented internal controls to restrict access to and distribution of our intellectual property. Despite these precautions, our intellectual property is vulnerable to unauthorized access through employee error or actions, theft and cyber security incidents, and other security breaches.

Demand for and supply of our products and services may be adversely affected by several factors, some of which we cannot predict or control, that could adversely affect our financial position, results of operations or cash flows.

The demand for our products and services could be affected by several factors, including:

·

economic downturns in the markets in which we sell our products;

·

competition from other products;

·

changes in customer preferences;

·

product obsolescence or technological changes that render our products less desirable to use or more expensive to produce;

·

changes in environmental regulations that may make our products illegal to sell and distribute in their present form;

·

inability of our supplier to obtain materials used in production due to factors such as work stoppages, shortages or supplier plant shutdowns; and

·

inability to supply products due to factors such as work stoppages, plant shutdowns or regulatory changes and exogenous factors, like severe weather.

If any of these events occur, the demand for and supply of our products and services could suffer, which could have a material adverse affect on our financial position, results of operations and cash flows.

Changes in government policies, regulations and laws could adversely affect our financial results.

We expect the majority of our future revenue to come from sales of our DSOX-15, which is heavily dependent on current and future IMO Regulations being enforced by international signatories to MARPOL Annex VI.  While currently, the United States, Canada and the E.U. have ECA’s in place, and sulfur oxide limit restrictions in these ECA’s are expected to drop, there can be no assurance that this will happen.  A change in the current and upcoming IMO regulations could have a significant material impact on our financial results.

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Unforeseen complications during the installation of the Exhaust and DSOX-15 fuel purification systems can potentially halt ships operation, which could adversely affect our sales, results of operations or cash flows, as well as increase potential for lawsuits filed against us.

Our Exhaust and DSOX-15 fuel purification systems can be installed on a ship without disruption to the ship’s operations. However, if the planning and/or execution of the installation process have flaws, we can face a situation where the ship’s operation has to be halted in order to complete installation. Depending on the type of the ship and its machinery, this risk can be mitigated by scheduling the operation of a different engine. However, if the alternative engine is not available, we will have no choice but to stop the operation of the ship.

Manufacturing of our polymer products are contracted out and they are subject to hazards and other risks associated with polymer production and the related storage and transportation of raw materials, products and wastes.

Polymer production is subject to the possible hazards and risks associated with the related storage and transportation of inventories and wastes, including fires, explosions, natural disasters, inclement weather, mechanical failure, unscheduled downtime, transportation interruptions, remediation, chemical spills, discharges or releases of toxic or hazardous substances or gases and other risks. These hazards can cause personal injury and loss of life, severe damage to, or destruction of, property and equipment, reduced production and environmental contamination. Accordingly, these hazards, and their consequences could have a material adverse effect on our operations as a whole, including our results of operations and cash flows, both during and after the period of operational difficulties.

Extensive environmental, health and safety laws and regulations impact the production of our fluoropolymer products and compliance with these regulations could adversely affect the cost of purchasing the product from our supplier.

The production of our fluoropolymer products is subject to extensive environmental, health and safety laws and regulations at the national, state and local governmental levels. The nature of our business exposes our supplier of fluoropolymer products to compliance costs and risks of liability under these laws and regulations due to the production, storage, transportation, recycling or disposal and/or sale of materials that can cause contamination and other harm to the environment or personal injury if they are released. Environmental compliance requirements on our suppliers may significantly increase our operating costs, which could adversely affect our financial position, results of operations or cash flows.

We face competition from other fluoropolymer and chemical companies, which could adversely affect our sales, results of operations or cash flows.

We compete with companies that produce similar products and with companies that produce different products that are designed for the same end uses. We encounter competition based on several key criteria, including product performance and quality, product price, product availability and security of supply, responsiveness of product development in cooperation with customers and customer service.

We expect that our competitors will continue to develop and introduce new and enhanced products, which could cause a decline in the market acceptance of our products. In addition, our competitors could cause a reduction in the selling prices of some of our products as a result of intensified price competition. Competitive pressures can also result in the loss of major customers. An inability to compete successfully could have an adverse effect on our financial position, results of operations or cash flows.

We may also experience increased competition from companies that offer products based on alternative technologies and processes that may be more competitive or better in price or performance, causing us to lose customers and result in a decline in our sales volume and earnings.

Additionally, some of our customers may already be or may become large enough to justify developing in-house production capabilities. Any significant reduction in customer orders as a result of a shift to in-house production could adversely affect our future sales and operating prospects.

We face competition from other companies who manufacture and install exhaust scrubbers or other emission abatement solutions, which could adversely affect our sales, results of operations or cash flows.

At the moment, none of our main competitors for the Exhaust Scrubber has received a full approval (EPA, USCG, MEPC) for operation on commercial vessels. The scrubbers used by these competitors are limited to operating with caustic soda or in the open loop, which increases operating costs and risks due to the nature and sensitivity of the chemicals. However, should these companies get the full approval or develop and introduce more enhanced technologies, we could face a decline in the market share for our Exhaust Scrubbers.

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Current and future disruptions in the global credit and financial markets could limit our access to financing, which could negatively impact our business.

Domestic and foreign credit and financial markets have experienced extreme disruption in the past three years, including volatility in security prices, diminished liquidity and credit availability, declining valuations of certain investments and significant changes in the capital and organizational structures of certain financial institutions. We are unable to predict the likely duration and severity of the continuing disruption in the credit and financial markets or of any related adverse economic conditions. These market conditions may limit our ability to access the capital necessary to grow and maintain our business. Accordingly, we may be forced to delay raising capital, issue shorter tenors than we prefer or pay unattractive interest rates, which could increase our interest expense, decrease our profitability and significantly reduce our financial flexibility. Overall, our results of operations, financial condition and cash flows could be materially adversely affected by the disruptions in the global credit and financial markets.

The global economic downturn may have a negative effect on our business and operations.

The global economic downturn has caused a general tightening in the credit markets, lower levels of liquidity, increases in the rates of default and bankruptcy, and lower business spending, all of which may have a negative effect on our business, results of operations, financial condition and liquidity. Potential customers may be unable to fund purchases or may determine to reduce purchases or inventories or may cease to continue in business. In addition, our supplier may not be able to supply us with needed raw materials on a timely basis, may increase prices or go out of business, which could result in our inability to meet customer demand or could affect our gross margins.

The timing, strength or duration of any recovery in the global economic markets remains uncertain, and there can be no assurance that market conditions will improve in the near future or that our results will not continue to be materially and adversely affected. Such conditions make it very difficult to forecast operating results, make business decisions and identify and address material business risks. There can be no assurance that the economy and our operating results will continue to improve, that the economy will not experience another significant downturn. In such an event, our operating results, financial condition and business could be adversely affected.

The agreements governing our debt contain various covenants that limit our ability to take certain actions, failure to comply with which could have a material adverse effect on us.

The agreements governing our senior secured term loan contain a number of covenants that, among other things, limit our ability to: transfer or sell all or substantially all of our assets or make certain other restricted payments. Any future refinancing of the term loan is likely to contain similar restrictive covenants.

Our Chief Executive Officer and President holds approximately 82% of our common stock and will be able to exert considerable influence over our actions.

Mr. Rasmus Norling owns approximately 82% of the outstanding shares of our common stock. As the Chief Executive Officer, President and a significant stockholder, he has the power to exert considerable influence over our actions and the outcome of matters on which our stockholders are entitled to vote including the election of directors and other significant corporate actions. The interests of Mr. Norling may be different from the interests of our shareholders.

The loss of key members of our senior management team could disrupt the management of our business.

We believe that our success depends on the continued contributions of the members of our senior management team, including Mr. Rasmus Norling, our Chief Executive Officer, President and principal stockholder. The loss of the services of Mr. Norling could impair our ability to identify and secure new customer contracts, to maintain good customer relationships and to otherwise manage our business, which could have a material adverse effect on our financial performance and our ability to compete.

We are subject to risks associated with selling our products internationally.

Our non-domestic sales efforts are subject to varying degrees of regulation in each of the foreign jurisdictions in which we may seek to provide services. Local laws and regulations, and their interpretation and enforcement, differ significantly among those jurisdictions, and can change significantly over time. Future regulatory, judicial and legislative changes or interpretations may have a material adverse effect on our ability to deliver services in foreign jurisdictions.

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In addition to these international regulatory risks, some of the other risks inherent in conducting business internationally include:

·

economic, political and social instability;

·

currency restrictions and exchange rate fluctuations;

·

potential submission to the jurisdiction of a foreign court or arbitration panel;

·

import and export quotas;

·

longer payment cycles and problems collecting accounts receivable,

·

potential vessel seizure, terrorist attacks, piracy, kidnapping, the expropriation of assets and other governmental acts

·

pandemics or epidemics that disrupt worldwide trade or the movement of vessels;

·

additional U.S. and other regulation of non-domestic operations, including regulation under the Foreign Corrupt Practices Act as well as other anti-corruption laws; and

·

the imposition of unanticipated or increased taxes, increased environmental and safety regulations or other forms of public and governmental regulation that increase our operating expenses.

Many of these risks are beyond our control, and we cannot predict the nature or the likelihood of the occurrence or corresponding effect of any such events, each of which could have an adverse effect on our financial condition and results of operations.

To service our indebtedness, we will require a significant amount of cash. Our ability to generate cash depends on many factors beyond our control.

Our ability to pay interest on our debt and to satisfy our other debt obligations will depend in part upon our future financial and operating performance and upon our ability to renew or refinance borrowings. Prevailing economic conditions and financial, business, competitive, legislative, regulatory and other factors, many of which are beyond our control, will affect our ability to make these payments. While we believe that cash flow from our current level of operations, available cash and available borrowings will provide adequate sources of liquidity for at least the next twelve months, a significant drop in operating cash flow resulting from economic conditions, competition or other uncertainties beyond our control could create the need for alternative sources of liquidity. If we are unable to generate sufficient cash flow to meet our debt service obligations, we will have to pursue one or more alternatives, such as, reducing or delaying capital or other expenditures, refinancing debt, selling assets, or raising equity capital.

We cannot assure you, however, that our business will generate sufficient cash flow from operations or that future borrowings will be available to us in an amount sufficient to enable us to pay our indebtedness or to fund our other liquidity needs. We may need to refinance all or a portion of our indebtedness on or before maturity. We cannot assure you that we will be able to refinance any of our indebtedness, including our term loan and revolving credit facility, on commercially reasonable terms or at all.

Because our stock is a penny stock, stockholders will be more limited in their ability to sell their stock.

The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or quotation system.

Because our securities constitute "penny stocks" within the meaning of the rules, the rules apply to us and to our securities. The rules may further affect the ability of owners of shares to sell our securities in any market that might develop for them. As long as the quotation price of our common stock is less than $5.00 per share, the common stock will be subject to Rule 15g-9 under the Exchange Act. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that:

·

contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading;

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·

contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of securities laws;

·

contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price;

·

contains a toll-free telephone number for inquiries on disciplinary actions;

·

defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and

·

contains such other information and is in such form, including language, type, size and format, as the SEC shall require by rule or regulation.

The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with: (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) a monthly account statements showing the market value of each penny stock held in the customer's account. In addition, the penny stock rules require that, prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our stock.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

On May 28, 2013, We agreed to issue 201,067 shares of our common stock at a deemed price of $60,300 or $0.2999 per share in exchange for consulting services.  The information required by this Item 2 is provided in Part I of this report under “Recent Corporate Developments”

All other unregistered equity sales during the six months ended June 30, 2013, have been previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2012, or in our Current Reports on Form 8-K filed during the period.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

None.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS.

All Exhibits required to be filed with this Quarterly Report on Form 10-Q are included in this Quarterly Report or incorporated by reference to our previous filings with the SEC, which can be found in their entirety at the SEC website at www.sec.gov under SEC File Number 000-33309 and 333-66590.

Exhibit Number	Description of Exhibit
3.1	Articles of Incorporation.(1)
	Certificate of Amendment to Certificate of Incorporation - Name Change to Artescope Inc.(1)
3.2	Certificate of Amendment to Certificate of Incorporation - Name Change to GlobeTrac Inc.(2)
3.3	Certificate of Amendment to Certificate of Incorporation - Name Change to Poly Shield Technologies Inc.(7)
3.4	Bylaws.(1)
10.1	Termination and Transfer Agreement dated for reference November 1, 2004, among the Company, Global Axxess Corporation Limited, WebTech Wireless International and WebTech Wireless Inc.(3)
10.2	Letter Agreement dated June 9, 2011, among the Company, Angelo Scola, and Thermoforte Green, LLC.(4)
10.3	Letter Agreement dated September 26, 2011, among the Company, David Bernard, and Michael Avatar .(5)
10.4	Technology License Agreement with Option to Purchase dated March 12, 2012, between the Company, Teak Shield Corp., and Robert and Marion Diefendorf. (5)

13

Exhibit Number	Description of Exhibit
10.5	Loan Agreement dated April 19, 2012, between GlobeTrac Inc. and Acamar Investments Inc.(5)
10.6	Acamar Promissory Note dated April 19, 2012, given the Company in favor of Acamar Investments, Inc.(5)
10.7	Security Agreement dated April 19, 2012, granted by GlobeTrac Inc. in favor of Acamar Investments Inc.(5)
10.8	Loan Agreement dated June 29, 2012, in respect of the principal sum of CDN $40,000 between the Company and Quarry Bay Capital LLC.(6)
10.9	Loan Agreement dated June 29, 2012, in respect of the principal sum of CDN $100,000 between the Company and Quarry Bay Capital LLC.(6)
10.10	Loan Agreement dated June 29, 2012, in respect of the principal sum of CDN $50,000 between the Company and Quarry Bay Capital LLC.(6)
10.11	Extension letter dated October 17, 2012, from Acamar Investments, Inc. (8)
10.12	Amendment No. 1 to Loan Agreement and Promissory Note dated November 16, 2012, between Poly Shield Technologies Ltd. and Acamar Investments, Inc.(9)
10.13	Employment Agreement between Rasmus Norling and Poly Shield Technologies, Inc. dated December 1, 2012. (10)
10.14	U.S. Patent Assignment Agreement dated January 12, 2013, between Rasmus Norling and Poly Shield Technologies Inc.(11)
10.15	European Patent Assignment Agreement dated January 12, 2013, between Rasmus Norling and Poly Shield Technologies Inc.(11)
10.16	Share Purchase Agreement dated January 31, 2013, between Rasmus Norling and Poly Shield Technologies Inc.(12)
10.17	Collaboration Agreement dated November 15, 2012, between Ecolutions, Inc. and Green Tech Marine AS.(12)
10.18	Master Distributor Agreement dated November 15, 2012, between Ecolutions, Inc. and Green Tech Marine AS.(12)
10.19	License Agreement dated November 15, 2012, between Ecolutions, Inc. and Green Tech Marine AS. (12)
10.20	Share Purchase Agreement dated April 8, 2013, between J. Douglas Faulkner and Poly Shield Technologies Inc.(13)
10.21	Sales and Purchase Agreement dated July 18, 2013 between LMS Shipmanagement, Inc. and  Poly Shield Technologies Inc.(14)
31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase.
101.DEF	XBRL Taxonomy Extension Definition Linkbase.
101.LAB	XBRL Taxonomy Extension Label Linkbase.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase.

(1) Filed as an exhibit to our Registration statement on Form SB-2 filed on August 2, 2001.

(2) Filed as an exhibit to our Quarterly Report on Form 10-QSB filed on April 15, 2003.

(3) Filed as an exhibit to our Current Report on Form 8-K filed on November 14, 2005.

(4) Filed as an exhibit to our Current Report on Form 8-K filed on June 10, 2011.

(5) Filed as an exhibit to our Current Report on Form 8-K filed on September 30, 2011.

(6) Filed as an exhibit to our Current Report on Form 8-K filed on March 16, 2012.

(7) Filed as an exhibit to our Current Report on Form 8-K filed on July 13, 2012.

(8) Filed as an exhibit to our Current Report on Form 8-K filed on November 6, 2012.

(9) Filed as an exhibit to our Current Report on Form 8-K filed on December 7, 2012.

(10) Filed as an exhibit to our Current Report on Form 8-K filed on December 11, 2012.

(11) Filed as an exhibit to our Current Report on Form 8-K filed on January 17, 2013.

(12) Filed as an exhibit to our Current Report on Form 8-K filed on February 6, 2013.

(13) Filed as an exhibit to our Quarterly Report on Form 10-Q filed on May 14, 2013

(14) Filed as an exhibit to our Current Report on Form 8-K filed on July 24, 2013

14

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.

POLY SHIELD TECHNOLOGIES INC.
By:	/s/ Rasmus Norling
Name:	Rasmus Norling
Title:	Chief Executive Officer, President (Principal Executive Officer)
Dated:	August 13, 2013
By:	/s/ John da Costa
Name:	John da Costa
Title:	Chief Financial Officer, Treasurer and Secretary (Principal Financial Officer)
Dated:	August 13, 2013

16

EX-31.1

POLY SHIELD TECHNOLOGIES INC.
CERTIFICATIONS PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

CERTIFICATION

I, Rasmus Norling, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the six months ending June 30, 2013, of Poly Shield Technologies Inc.;

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

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

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

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

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

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  August 13, 2013

/s/ Rasmus Norling

Rasmus Norling
Chief Executive Officer

EX-31.2

POLY SHIELD TECHNOLOGIES INC.
CERTIFICATIONS PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

CERTIFICATION

I, John da Costa, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the six months ending June 30, 2013, of Poly Shield Technologies Inc.;

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

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

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

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

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

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  August 13, 2013

/s/ John da Costa

John da Costa
Chief Financial Officer

EX-32.1

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

In connection with the Quarterly Report of Poly Shield Technologies Inc. (the “Company”) on Form 10-Q for the period ending June 30, 2013, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Rasmus Norling, President and Chief Executive Officer, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)  The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Rasmus Norling

Rasmus Norling
Chief Executive Officer

August 13, 2013

EX-32.2

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

In connection with the Quarterly Report of Poly Shield Technologies Inc. (the “Company”) on Form 10-Q for the period ending June 30, 2013, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John da Costa, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)  The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ John da Costa   

John da Costa
Chief Financial Officer

August 13, 2013

XML

Related Party Transactions: Schedule of Related Party Transactions (Tables)

3 Months Ended

Jun. 30, 2013

Tables/Schedules

Schedule of Related Party Transactions

	June 30, 2013		December 31, 2012
Due to a company controlled by a director (a)	$	5,460	$	29,839
Due to a director of the Company (a)		262		262
Due to related parties	$	5,722	$	30,101

XML

Consolidated Statements of Operations (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Income Statement
Royalty income	$ 3,757	$ (692)	$ 13,976	$ 5,477
Operating expenses
Amortization of license	74,084	59,895	145,959	59,895
General and administrative expense	185,674	115,315	490,601	143,479
Royalty fee	25,000	20,833	50,000	20,833
Loss before other items	(281,001)	(196,735)	(672,584)	(218,730)
Other items
Interest expense	(49,184)	(24,818)	(90,328)	(26,495)
Net loss	$ (330,185)	$ (221,553)	$ (762,912)	$ (245,225)
Net loss per common share - basic and diluted	$ 0	$ (0.01)	$ 0	$ (0.01)
Weighted common shares outstanding - basic and diluted	187,845,005	33,172,177	157,198,044	32,449,955

XML

License Agreement

3 Months Ended

Jun. 30, 2013

Notes

License Agreement

NOTE 4 - LICENSE AGREEMENT

On March 12, 2012, the Company entered into a license agreement with Teak Shield (the “Teak Shield License”) and its owners Robert and Marion Diefendorf (the “Licensors”) whereby the Company has acquired a license to market and sell Teak Shield’s licensed products. In exchange, the Company agreed to pay a 5% royalty to the Licensors with a minimum $100,000 annual royalty payment, and agreed to issue to the Licensors 1,666,667 shares of the Company.  At June 30, 2013, the Company has accrued $120,833 in royalty payable under this agreement.

On April 13, 2012, the purchase of the Teak Shield License was completed and 1,666,667 shares with a fair value of $900,000 were issued.  As part of the agreement the Company acquired a two year option to purchase 100% of the Licensor’s ownership and interest in its proprietary rights and assets (the “Teak Shield Option”) including all licensed products, manufacturing, patents, intellectual property, technology, contracts, trademarks and goodwill for $250,000. To exercise the Teak Shield Option the Company must pay an additional $2,750,000.

The Teak Shield License and the Teak Shield Option are in effect for two years from the completion of the acquisition, and may be automatically renewed for a further two years. During the six months ended June 30, 2013, amortization expense of $143,751 (2012 - $59,895) was recorded.

The following table summarizes investment in option and license:

	June 30, 2013		December 31, 2012
Purchase price of Teak Shield License	$	900,000	$	900,000
Purchase price of Teak Shield Option		250,000		250,000
Amortization for the period		(347,396)		(203,645)
Total investment in option and license	$	802,604	$	946,355

In connection with the purchase of the Teak Shield Option, on April 19, 2012, the Company signed a loan agreement for $260,000, repayable on December 31, 2013 (the “Acamar Loan”) (Note 6).  Interest is calculated at 3.5% per month for an effective rate of 51% per annum.  The minimum interest payable on the loan is $26,000. The loan is secured by the Teak Shield License.

XML

License Agreement: Investment in option and license table (Details) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Amortization for the period	$ (347,396)	$ (203,645)
Total investment in option and lease	802,604	946,355
Teak Shield License
Purchase price	900,000	900,000
Teak Shield Option
Purchase price	$ 250,000	$ 250,000

XML

License Agreement: Investment in option and license table (Tables)

3 Months Ended

Jun. 30, 2013

Tables/Schedules

Investment in option and license table

	June 30, 2013		December 31, 2012
Purchase price of Teak Shield License	$	900,000	$	900,000
Purchase price of Teak Shield Option		250,000		250,000
Amortization for the period		(347,396)		(203,645)
Total investment in option and license	$	802,604	$	946,355

XML

Subsequent Events (Details) (USD $)	1 Months Ended
	Aug. 09, 2013	Jun. 30, 2013
Subsequent Event
Value of stock issued for services	$ 60,300
Shares issued to consultant	150,000
Obligation to issue stock (shares)		150,000
DSOX-15
Minimum liability insurance		$ 5,000,000

XML

Notes and Advances Payable (Details) (USD $)	6 Months Ended	0 Months Ended
	Jun. 30, 2013	May 13, 2013 Acamar Loan	Apr. 05, 2013 Acamar Loan	Feb. 05, 2013 Acamar Loan	Jun. 30, 2013 Acamar Loan
Advance received	$ 140,236	$ 7,000	$ 7,500	$ 40,000
Total note payable					339,500
Total advances received during period	140,236	7,000	7,500	40,000
Advances redpaid during period	45,000
Loan repaid during period	20,000
Interest paid	$ 2,731

XML

Distribution and License Rights (Details) (USD $)	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Amortization expense	$ 143,751	$ 59,895
Ecolutions
Shares of common stock issued for purchase	100,000
Fair value of purchase price	53,000
GTM Contracts
Amortization expense	$ 2,208

XML

Consolidated Statements of Cash Flows (USD $)	6 Months Ended		12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
Cash Flows from Operating Activities
Net loss	$ (762,912)	$ (245,225)	$ (777,800)
Non cash items
Amortization	145,959	59,895
Website design	45,000
Foreign exchange expense	(10,428)
Changes to operating assets and liabilities:
Accounts receivable	(2,793)	3,445
Prepaids	(4,692)	(9,683)
Advances receivable	80,000
Advances payable	44,765
Accounts payable	39,834	25,838
Accrued liabilities	52,324	11,995
Unearned revenue	350,000
Due to related parties	(24,379)	(3,089)
Accrued interest	89,712	7,988
Net cash used in operating activities	42,390	(148,836)
Cash Flows from Financing Activities
Notes payable to related party		12,000
Notes payable	76,614	446,437
Net cash provided by financing activities	76,614	458,437
Cash Flows from Investing Activities
Investment in option agreement		250,000
Net cash used in investing activities		(250,000)
Net increase in cash	119,004	59,601
Cash, beginning of period	6,969	707	707
Cash, end of period	125,973	60,308	6,969
Supplemental Disclosure of Cash Flow Information:
Income tax
Interest	$ 2,731	$ 18,506

XML

Related Party Transactions

3 Months Ended

Jun. 30, 2013

Notes

Related Party Transactions

NOTE 2 - RELATED PARTY TRANSACTIONS

	June 30, 2013		December 31, 2012
Due to a company controlled by a director (a)	$	5,460	$	29,839
Due to a director of the Company (a)		262		262
Due to related parties	$	5,722	$	30,101

a)  Amounts are unsecured, are due on demand and bear no interest.

During the six months ended June 30, 2013 and 2012, the Company paid $80,000 and $35,500 respectively in administrative fees to a company controlled by a director.

XML

Distribution and License Rights

3 Months Ended

Jun. 30, 2013

Notes

Distribution and License Rights

NOTE 5 - DISTRIBUTION AND LICENSE RIGHTS

On January 31, 2013, the Company issued 100,000 shares of its common stock with a fair value of $53,000 as a purchase price for all of the issued and outstanding shares in the capital of Ecolutions which held the rights to the intellectual property of Green Tech Marine AS (“GTM”). As a result of acquiring Ecolutions, the Company acquired distribution and license rights to the Exhaust Scrubber (the “GTM Contracts”), a proprietary exhaust gas scrubber technology developed by GTM.

Under the terms of the GTM Contracts, the Company is granted exclusive distribution rights for the Exhaust Scrubber for all of North America and Singapore, as well as non-exclusive distribution rights for the rest of the world (excluding any existing GTM customers and customers not generated by the Company).

GTM has also provided the Company with an exclusive license to manufacture, sell and distribute the Exhaust Scrubber and the related technologies in North America and Singapore, and non-exclusive rights to the rest of the world (excluding any existing GTM customers and customers not generated by the Company).

The GTM Contracts are in effect for ten years until November 15, 2022, and may be automatically renewed for a further ten year period unless either party gives written notice of termination at least 90 days prior to the then current term. 

The GTM Contracts are amortized over 10 years on a straight line basis.During the six months ended June 30, 2013, amortization expense of $2,208 (2012 - $Nil) was recorded.

XML

Employment Agreement

3 Months Ended

Jun. 30, 2013

Notes

Employment Agreement

NOTE 3 - EMPLOYMENT AGREEMENT

On December 6, 2012, the Company entered into an Employment Agreement with the Vendor. This agreement became effective on February 5, 2013 (“Effective Date”) when the Company’s board of directors determined that the Vendor had satisfied his obligations to deliver certain deliverables including a ten year license for the rights to utilize, market, sell and distribute emission abatement technologies and certain intellectual property (“Minimum Technology Rights”). Under the terms of the Employment Agreement, the Vendor was appointed the Company’s Chief Executive Officer and received a signing bonus of $180,000. Beginning on the first anniversary of the Effective Date, the Vendor will be paid an annual base salary of $180,000 per year. In addition, on the Effective Date, the Company issued 154,000,000 shares of its common stock with a fair value of $81,620,000, which were placed in escrow and will be released to the Vendor upon delivery of bona fide contracts for the sale or lease of products or services at a rate of one share for each $0.25 in revenue. Escrowed stock will be released in increments of 1,250,000 shares of common stock. Escrowed stock which will not be eligible for release by December 31, 2013, will be forfeited.

On January 12, 2013, as part of the Minimum Technology Rights required by Employment Agreement, the Vendor assigned to the Company rights to U.S. and European patent applications for the desalination “Bio Scrubber” technology.

XML

Balance Sheets (Parenthetical) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Balance Sheet
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	187,845,005	33,745,005
Common stock, shares outstanding	187,845,005	33,745,005

XML

Organization and Nature of Operations: Basis of Presentation (Policies)

3 Months Ended

Jun. 30, 2013

Policies

Basis of Presentation

Basis of presentation

The unaudited interim consolidated financial statements included herein have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X.  They do not include all information and notes required by generally accepted accounting principles for complete financial statements.  However, except as disclosed herein, there has been no material change in the information disclosed in the notes to the financial statements included in the Annual Report on Form 10-K of Poly Shield Technologies Inc. for the year ended December 31, 2012. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation have been included.  Operating results for the three and six months ended June 30, 2013, are not necessarily indicative of the results that may be expected for the year ending December 31, 2013.  For further information, these unaudited financial statements and the related notes should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2012, included in the Company’s report on Form 10-K.

XML

Consolidated Statements of Stockholders' Equity (Deficit) (USD $)	Common Stock	Obligation to Issue Shares	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Income	Total
Beginning Balance, amount at Dec. 31, 2011	$ 31,728		$ 1,292,020	$ (1,517,213)	$ 11,665	$ (181,800)
Beginning Balance, shares at Dec. 31, 2011	31,727,775
Adjustment to shares due to rollback (shares)	564
Shares issued on purchase of a license agreement, shares	1,666,667
Shares issued on purchase of a license agreement, value	1,667		898,333			900,000
Shares issued for cash, shares	1,666,667
Shares issued for cash, value	1,667		898,333			900,000
Net loss for the period				(777,800)		(777,800)
Ending Balance, amount at Dec. 31, 2012	33,745		2,295,003	(2,295,013)	11,665	45,400
Ending Balance, shares at Dec. 31, 2012	33,745,005
Shares issued under employeement agreement, shares	154,000,000
Shares issued under employeement agreement, value	154,000		81,466,000			81,620,000
Deferred compensation			(81,620,000)			(81,620,000)
Shares issued for purchase of subsidiary, shares	100,000
Shares issued for purchase of subsidiary, value	100		52,900			53,000
Obligation to issue shares, value		45,000				45,000
Net loss for the period				(762,912)		(762,912)
Ending Balance, amount at Jun. 30, 2013	$ 187,845		$ 2,193,903	$ (3,057,925)	$ 11,665	$ (619,512)
Ending Balance, shares at Jun. 30, 2013	187,845,005

XML

Consolidated Balance Sheets (USD $)	Jun. 30, 2013	Dec. 31, 2012
Current Assets
Cash	$ 125,973	$ 6,969
Accounts receivable	2,793
Prepaids	7,000	2,308
Advances		80,000
Total Current Assets	135,766	89,277
Investment in option and license	802,604	946,355
Investment in distribution and license rights	50,792
Total Assets	989,162	1,035,632
Current Liabilities
Accounts payable	196,328	156,494
Accrued liabilities	164,901	112,577
Unearned revenue	350,000
Notes and advances payable	891,723	691,060
Due to related parties	5,722	30,101
Total Current Liabilities	1,608,674	990,232
Stockholders' Deficit
Common stock value	187,845	33,745
Additional paid-in capital	2,193,903	2,295,003
Obligation to issue shares	45,000
Accumulated deficit	(3,057,925)	(2,295,013)
Accumulated other comprehensive income	11,665	11,665
Total Stockholders' Equity (Deficit)	(619,512)	45,400
Total Liabilities and Stockholders' Equity (Deficit)	$ 989,162	$ 1,035,632

XML

License Agreement (Details) (USD $)	6 Months Ended		0 Months Ended			0 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Apr. 13, 2012 Teak Shield License	Mar. 12, 2012 Teak Shield License	Jun. 30, 2013 Teak Shield License	Apr. 13, 2012 Teak Shield Option	Apr. 19, 2012 Teak Shield Option
Annual royalty payment percentage				5.00%
Minimum annual royalty payment				$ 100,000
Shares agreed to be issued to licensors				1,666,667
Royalty payable accrued					120,833
Shares issued to licensors			1,666,667
Fair value of shares issued			900,000
Payment to acquire option to purchase business						250,000
Exercise price for purchase option						2,750,000
Amortization expense	143,751	59,895
Loan agreement							260,000
*Loan agreement interest rate							3.50%
Loan agreement, effective rate							51.00%
Minimum interest payable							$ 26,000

XML

Subsequent Events

3 Months Ended

Jun. 30, 2013

Notes

Subsequent Events

NOTE 7 - SUBSEQUENT EVENTS

On May 28, 2013, the Company entered into an agreement for the development of marketing, branding and design services. Under the agreement, the Company was to pay the consultant the equivalent sum of $60,300 in shares of the Company. 150,000 shares were due when the agreement was executed. The 150,000 shares were issued subsequent to June 30, 2013 and have been recorded as an obligation to issue shares as at June 30, 2013.

On July 18, 2013 the company signed a contract with a major ship management company to installtwo DSOX-15 fuel scrubbers on two of their ships.  The agreement provides for the purchase of up to forty additional DSOX-15 fuel purification systems at the same price should the ship management company wish to do so. Under the agreement, the Company is required to maintain at its sole expense comprehensive general liability insurance with a minimum combined single limit of liability of $5,000,000. The policy shall be maintained during the term of the agreement. As at June 30, 2013, the Company has received a deposit for the two units.

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Organization and Nature of Operations: Going Concern (Policies)

3 Months Ended

Jun. 30, 2013

Policies

Going Concern

Going Concern

The accompanying unaudited consolidated financial statements have been prepared assuming the Company will continue as a going concern. Continuation as a going concern is dependent upon the ability of the Company to obtain the necessary financing to meet obligations and pay its liabilities arising from normal business operations when they come due and ultimately upon its ability to achieve profitable operations.  The outcome of these matters cannot be predicted with any certainty at this time and raise substantial doubt that the Company will be able to continue as a going concern.  These unaudited interim consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern.  Management intends to obtain additional funding by borrowing funds from its directors and officers, issuing promissory notes and/or a private placement of common stock.

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Notes and Advances Payable

3 Months Ended

Jun. 30, 2013

Notes

Notes and Advances Payable

NOTE 6 - NOTES AND ADVANCES PAYABLE

On February 5, 2013, the Company received a $40,000 advance, on April 5, 2013 a $7,500 advance was received; and on May 13, 2013 a $7,000 advance was received, all of which were added to the outstanding balance of the Acamar Loan. As of June 30, 2013, the total amount of the note payable under the Acamar Loan is $339,500 (Note 4). On July 24, 2013, Acamar agreed to extend the Acamar Loan to December 31, 2013.

During the six months ended June 30, 2013, the Company received advances for the total of $140,236. The advances do not bear interest, are due on demand and are unsecured.

During the six months ended June 30, 2013, the Company repaid $45,000 in advances received from unrelated parties. The advances bore no interest, were unsecured and due on demand.

During the six months ended June 30, 2013, the Company repaid $20,000 in principal and $2,731 in interest on a loan received from an unrelated party. The loan was unsecured and due on demand.

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Organization and Nature of Operations

3 Months Ended

Jun. 30, 2013

Notes

Organization and Nature of Operations

NOTE 1 - ORGANIZATION AND NATURE OF OPERATIONS

Poly Shield Technologies Inc. (the “Company”) was in the global wireless tracking business in Europe until November 1, 2004, when it exchanged this business for a royalty of 6% on future gross sales.  This royalty agreement expires on October 31, 2015.

On March 12, 2012, the Company entered into an agreement to purchase the rights to market the products of Teak Shield Corp. (“Teak Shield”). Teak Shield has several proprietary processes for the production of coatings used to protect surfaces from corrosion, oxidation and degradation (Note 4). 

On December 1, 2012, the Company entered into an agreement (the “Employment Agreement”) with Rasmus Norling (the “Vendor”), the inventor and owner of certain technology used to remove alkali metal from fuel in efforts to protect gas turbines from corrosion (Note 3).

On January 31, 2013, the Company acquired all of the issued and outstanding shares in the capital of Ecolutions, Inc., (“Ecolutions”) which was formed by the Vendor on November 15, 2012, for the purpose of developing and marketing environmental and pollution emission solutions internationally. As a result of the acquisition, Ecolutions became a wholly owned subsidiary of the Company (Note 5).

On April 8, 2013, the Company acquired all of the outstanding shares of New World Technologies Group Inc. (“New World”) for consideration of $1. At the time of the acquisition, New World had no assets or liabilities.

Basis of presentation

The unaudited interim consolidated financial statements included herein have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X.  They do not include all information and notes required by generally accepted accounting principles for complete financial statements.  However, except as disclosed herein, there has been no material change in the information disclosed in the notes to the financial statements included in the Annual Report on Form 10-K of Poly Shield Technologies Inc. for the year ended December 31, 2012. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation have been included.  Operating results for the three and six months ended June 30, 2013, are not necessarily indicative of the results that may be expected for the year ending December 31, 2013.  For further information, these unaudited financial statements and the related notes should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2012, included in the Company’s report on Form 10-K.

Reclassifications

Certain prior period amounts in the accompanying consolidated financial statements have been reclassified to conform to the current period’s presentation.  These reclassifications had no effect on the consolidated results of operations or financial position for any period presented.

Going Concern

The accompanying unaudited consolidated financial statements have been prepared assuming the Company will continue as a going concern. Continuation as a going concern is dependent upon the ability of the Company to obtain the necessary financing to meet obligations and pay its liabilities arising from normal business operations when they come due and ultimately upon its ability to achieve profitable operations.  The outcome of these matters cannot be predicted with any certainty at this time and raise substantial doubt that the Company will be able to continue as a going concern.  These unaudited interim consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern.  Management intends to obtain additional funding by borrowing funds from its directors and officers, issuing promissory notes and/or a private placement of common stock.

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Organization and Nature of Operations (Details) (USD $)	104 Months Ended
	Jun. 30, 2013	Apr. 08, 2013
Details
Royalty on future gross sales in exchange for business	6.00%
Acquisition cost for New World Technologies Group Inc.		$ 1

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Organization and Nature of Operations: Reclassifications (Policies)

3 Months Ended

Jun. 30, 2013

Policies

Reclassifications

Reclassifications

Certain prior period amounts in the accompanying consolidated financial statements have been reclassified to conform to the current period’s presentation.  These reclassifications had no effect on the consolidated results of operations or financial position for any period presented.

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Employment Agreement (Details) (Chief Executive Officer, USD $)	0 Months Ended
	Dec. 06, 2012	Feb. 05, 2013
Chief Executive Officer
Signing bonus	$ 180,000
Annual base salary		180,000
Shares of common stock issued and placed in escrow per agreement		154,000,000
Fair value of common stock issued		$ 81,620,000
Revenue per share release		$ 0.25
Number of incremental shares of escrowed stock to released		1,250,000

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Related Party Transactions: Schedule of Related Party Transactions (Details) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Due to related parties, total	$ 5,722	$ 30,101
Company controlled by a director
Due to related parties	5,460	29,839
Director
Due to related parties	$ 262	$ 262

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Document and Entity Information	3 Months Ended
	Jun. 30, 2013
Document and Entity Information
Entity Registrant Name	Poly Shield Technologies Inc.
Document Type	10-Q
Document Period End Date	Jun. 30, 2013
Amendment Flag	false
Entity Central Index Key	0001143238
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding	187,845,005
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2

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Related Party Transactions (Details) (USD $)	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Details
Amounts due to related party	Amounts are unsecured, are due on demand and bear no interest
Administrative fees paid to related party	$ 80,000	$ 35,500