0001002014-15-000238.txt : 20150520 0001002014-15-000238.hdr.sgml : 20150520 20150520162521 ACCESSION NUMBER: 0001002014-15-000238 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20150331 FILED AS OF DATE: 20150520 DATE AS OF CHANGE: 20150520 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HDS INTERNATIONAL CORP. CENTRAL INDEX KEY: 0001454742 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374] IRS NUMBER: 263988293 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-53949 FILM NUMBER: 15879906 BUSINESS ADDRESS: STREET 1: 9272 OLIVE BOULEVARD CITY: ST. LOUIS STATE: MO ZIP: 63132 BUSINESS PHONE: (401) 400-0028 MAIL ADDRESS: STREET 1: 9272 OLIVE BOULEVARD CITY: ST. LOUIS STATE: MO ZIP: 63132 FORMER COMPANY: FORMER CONFORMED NAME: GMV Wireless, Inc. DATE OF NAME CHANGE: 20090126 10-Q 1 hdsi10q-03312015.htm HDS INTERNATIONAL CORP. FORM 10-Q (3/31/2015)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X]	QUARTERLY REPORT UNDER TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2015

	OR

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

Commission File Number 000-53949

HDS INTERNATIONAL CORP.

(Exact name of registrant as specified in its charter)

Nevada

(State of incorporation)

9272 Olive Boulevard

St. Louis, MO 63132

(Address of principal executive offices)

(401) 400-0028

(Registrant's telephone number)

Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the last 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 (SS 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," "non-accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer	[ ]		Accelerated Filer	[ ]
Non-accelerated Filer (Do not check if 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]

APPLICABLE ONLY TO CORPORATE ISSUERS:

As of May 13, 2014, there were 1,814,822,222 shares of the registrant's $0.001 par value common stock issued and outstanding.

HDS INTERNATIONAL CORP.

TABLE OF CONTENTS

		Page

PART I. FINANCIAL INFORMATION

ITEM 1.	FINANCIAL STATEMENTS.	3

	Consolidated Balance Sheets	3
	Consolidated Statements of Operations	4
	Consolidated Statements of Cash Flows	5
	Notes to the Consolidated Financial Statements	6

ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.	15

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.	18

ITEM 4.	CONTROLS AND PROCEDURES.	18
-

PART II. OTHER INFORMATION

ITEM 1A.	RISK FACTORS.	18

ITEM 6.	EXHIBITS.	19

Signatures		20

Exhibit Index		21

-2-

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

HDS International Corp.

Consolidated Balance Sheets

(expressed in U.S. dollars)

	March 31, 2015 (unaudited) $			December 31, 2014 $
ASSETS

Current Assets
Cash		–			73
Current portion of deferred financing costs		515			1,020

Total Assets		515			1,093

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities
Bank indebtedness		5			–
Accounts payable and accrued liabilities		43,253			728,581
Accounts payable and accrued liabilities – related parties		20,114			304,962
Due to related parties		–			300,000
Convertible debentures, net of unamortized discount of $21,036 and $36,088, respectively		18,264			31,952
Derivative liability		56,417			70,290

Total Liabilities		138,053			1,435,785

Stockholders' Deficit
Preferred Stock Authorized: 25,000,000 preferred shares, with a par value of $0.001 per share Issued and outstanding: nil preferred shares		–			–
Class A Preferred Stock Authorized: 25,000,000 preferred shares, with a par value of $0.001 per share Issued and outstanding: 7,500,000 shares		7,500			7,500
Class B Preferred Stock Authorized: 15,000,000 preferred shares, with a par value of $0.001 per share Issued and outstanding: 13,624,300 and nil shares, respectively		13,624			–
Common Stock Authorized: 2,000,000,000 common shares, with a par value of $0.001 per share Issued and outstanding: 1,922,000,000 and 571,564,504 shares, respectively		1,922,000			571,564
Additional paid-in capital		359,592			296,785
Accumulated deficit		(2,440,254	)		(2,310,541	)

Total Stockholders' Deficit		(137,538	)		(1,434,692	)

Total Liabilities and Stockholders' Deficit		515			1,093

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

HDS International Corp.

Consolidated Statements of Operations

(expressed in U.S. dollars)

(unaudited)

	For the Three Months Ended March 31, 2015 $			For the Three Months Ended March 31, 2014 $

Revenue		–			–

Operating Expenses

Consulting fees		69,835			96,000
General and administrative		8,409			1,760
Professional fees		3,250			11,100

Total Operating Expenses		81,494			108,860

Loss Before Other Expenses		(81,494	)		(108,860	)

Other Expenses

Interest expense		(22,830	)		(17,377	)
Loss on change in fair value of derivative liability		(25,389	)		(44,752	)

Total Other Expenses		(48,219	)		(62,129	)

Net Loss		(129,713	)		(170,989	)

Net Loss Per Share, Basic and Diluted		(0.00	)		(0.00	)

Weighted Average Shares Outstanding		931,678,536			377,203,075

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

HDS International Corp.

Consolidated Statements of Cash Flows

(expressed in U.S. dollars)

(unaudited)

	For the Three Months Ended March 31, 2015 $			For the Three Months Ended March 31, 2014 $
Operating Activities

Net loss for the period		(129,713	)		(170,989	)

Adjustment to reconcile net loss to net cash used in operating activities:

Accretion of debt discount		15,052			6,241
Amortization of deferred financing costs		505			1,537
Loss on change in fair value of derivative liability		25,389			44,752

Changes in operating assets and liabilities:

Accounts payable and accrued liabilities		50,837			68,303
Accounts payable and accrued liabilities – related parties		37,857			37,397

Net Cash Used in Operating Activities		(73	)		(12,759	)

Financing activities

Proceeds from convertible debenture, net of financing costs		–			15,000
Proceeds from related parties		–			1,200

Net Cash Provided by Financing Activities		–			16,200

Change in Cash		(73	)		3,441

Cash, Beginning of Period		73			3,371

Cash, End of Period		–			6,812

Non-cash investing and financing activities
Adjustment to derivative liability due to conversion of debt		39,262			–
Common stock issued for conversion of debt		31,400			–
Debt discount due to beneficial conversion feature		–			15,500
Fair value of common stock issued to acquire license		200,000			–
Fair value of common stock issued to settle debt		1,356,205			–
Fair value of Class B preferred stock issued to acquire license		13,624			–

Supplemental Disclosures
Interest paid		–			–
Income tax paid		–			–

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

HDS International Corp.

Notes to the Consolidated Financial Statements

(expressed in U.S. dollars)

(unaudited)

1. Nature of Operations and Continuance of Business

HDS International Corp. (the "Company") was incorporated on November 3, 2008 under the laws of the State of Nevada. The Company was formerly engaged in the business of providing renewable energy and eco-sustainability solutions based on its licensed technologies. On March 5, 2015, the Company entered into a Strategic Expansion Agreement and refocused its efforts from renewable energy to emergency management software services. A substantial portion of the Company's activities has involved developing a business plan and establishing contacts and visibility in the marketplace and the Company has not generated any revenue to date.

Going Concern

These consolidated financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has generated no revenues to date and has never paid any dividends and is unlikely to pay dividends or generate significant earnings in the immediate or foreseeable future. As of March 31, 2015, the Company had a working capital deficiency of $137,538 and an accumulated deficit of $2,440,254. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability to raise equity or debt financing, and the attainment of profitable operations from the Company's future business. These factors raise substantial doubt regarding the Company's ability to continue as a going concern. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

2. Summary of Significant Accounting Policies

a) Basis of Presentation and Principles of Consolidation

The consolidated financial statements for the periods ending March 31, 2015 and December 31, 2014 include the accounts of the Company, and HDS Energy and Ecosystems NB, Ltd., the Company's wholly owned subsidiary. All intercompany transactions and balances have been eliminated on consolidation.

These consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in US dollars. The Company's fiscal year-end is December 31.

b) Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the fair values of convertible debentures, derivative liability, stock-based compensation, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company's estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

c) Cash and Cash Equivalents

The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. As of March 31, 2015 and December 31, 2014, the Company had no cash equivalents.

d) Intangible Assets

Intangible assets are carried at the purchased cost less accumulated amortization. Amortization is computed over the estimated useful lives of the respective assets, generally from fifteen to twenty years

HDS International Corp.

Notes to the Consolidated Financial Statements

(expressed in U.S. dollars)

(unaudited)

2. Summary of Significant Accounting Policies (continued)

e) Impairment of Long-Lived Assets

Long-lived assets and certain identifiable intangible assets to be held and used are reviewed for impairment whenever events or changes in circumstance indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. Measurement of an impairment loss for long-lived assets and certain identifiable intangible assets that management expects to hold and use is based on the fair value of the asset. Long-lived assets and certain identifiable intangible assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell.

f) Beneficial Conversion Features

From time to time, the Company may issue convertible notes that may contain an embedded beneficial conversion feature. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of the warrants, if related warrants have been granted. The intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method.

g)	Derivative Liability

From time to time, the Company may issue equity instruments that may contain an embedded derivative instrument which may result in a derivative liability. A derivative liability exists on the date the equity instrument is issued when there is a contingent exercise provision. The derivative liability is records at is fair value calculated by using an option pricing model such as a multi-nominal lattice model. The fair value of the derivative liability is then calculated on each balance sheet date with the corresponding gains and losses recorded in the consolidated statement of operations.

h)	Basic and Diluted Net Loss Per Share

The Company computes net loss per share in accordance with ASC 260, Earnings Per Share, which requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. At March 31, 2015, the Company had 810,188,333 (December 31, 2014 – 1,572,180,000) potentially dilutive shares from outstanding convertible debentures.

i)	Interim Consolidated Financial Statements

There interim unaudited consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company's financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period.

j) Income Taxes

Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted ASC 740, Income Taxes, as of its inception. Pursuant to ASC 740, the Company is required to compute tax asset benefits for net operating losses carried forward. The potential benefits of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.

HDS International Corp.

Notes to the Consolidated Financial Statements

(expressed in U.S. dollars)

(unaudited)

2. Summary of Significant Accounting Policies (continued)

k) Comprehensive Loss

ASC 220, Comprehensive Income, establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at March 31, 2015 and December 31, 2014, the Company has no items that represent comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.

l) Financial Instruments

ASC 820, "Fair Value Measurements" and ASC 825, Financial Instruments, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. It establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. It prioritizes the inputs into three levels that may be used to measure fair value:

Level 1

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

Assets and liabilities measured at fair value on a recurring basis based on level 3 inputs were presented on the Company's balance sheet as at March 31, 2015 and December 31, 2014 as follows:

	Balance, December 31, 2014 $	Conversions $	Changes in Fair Values $	Balance, March 31, 2015 $

Derivative Liability	70,290	(39,262)	25,389	56,417

The carrying values of all of our other financial instruments, which include accounts payable and accrued liabilities, convertible debentures, and amounts due to related parties approximate their current fair values because of their nature and respective maturity dates or durations.

m)	Recent Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

HDS International Corp.

Notes to the Consolidated Financial Statements

(expressed in U.S. dollars)

(unaudited)

3. Convertible Debentures

On July 15, 2013, the Company entered into a $27,500 convertible debenture with a non-related party. Under the terms of the debenture, the amount is unsecured, bears interest at 8% per annum, and is due on January 16, 2015. The note is convertible into shares of common stock 180 days after the date of issuance (January 11, 2014) at a conversion rate of 50% of the average of the five lowest closing bid prices of the Company's common stock for the thirty trading days ending one trading day prior to the date the conversion notice is sent by the holder to the Company. As at March 31, 2015, the Company recorded accrued interest of $873 (December 31, 2014 - $3,077), which has been included in accounts payable and accrued liabilities.

In accordance with ASC 470-20, "Debt with Conversion and Other Options", the Company recognized the intrinsic value of the embedded beneficial conversion feature of $27,500 as additional paid-in capital and an equivalent discount which will be charged to operations over the term of the convertible note. During the period ended March 31, 2015, the Company issued 454,000,000 common shares (December 31, 2014 - 23,312,500) for the conversion of $20,040 (December 31, 2014 - $7,460) of this debenture and $2,660 (December 31, 2014 - $nil) of accrued interest. During the period ended March 31, 2015, the Company had amortized $2,260 (December 31, 2014 - $22,461) of the debt discount to interest expense. As at March 31, 2015, the carrying value of the debenture was $nil (December 31, 2014 - $17,780).

On January 11, 2014, the note became convertible resulting in the Company recording a derivative liability of $36,272 with a corresponding adjustment to loss on change in fair value of derivative liabilities. As at March 31, 2015, the Company revalued the derivative liability to its fair value resulting in the Company recording $nil (December 31, 2014 - $23,331) as a gain on change in fair value of derivative liabilities. As at March 31, 2015, the fair value of the derivative liability was $nil (December 31, 2014 - $3,061). Refer to Note 4.

On October 4, 2013, the Company entered into a $32,500 convertible debenture with a non-related party. Under the terms of the debenture, the amount is unsecured, bears interest at 8% per annum, and is due on July 8, 2015. The note is convertible into shares of common stock 180 days after the date of issuance (April 2, 2014) at a conversion rate of 50% of the average of the five lowest closing bid prices of the Company's common stock for the thirty trading days ending one trading day prior to the date the conversion notice is sent by the holder to the Company. As at March 31, 2015, the Company recorded accrued interest of $3,868 (December 31, 2014 - $3,227), which has been included in accounts payable and accrued liabilities.

In accordance with ASC 470-20, "Debt with Conversion and Other Options", the Company recognized the intrinsic value of the embedded beneficial conversion feature of $32,500 as additional paid-in capital and an equivalent discount which will be charged to operations over the term of the convertible note. During the period ended March 31, 2015, the Company issued 174,000,000 common shares (December 31, 2014 - nil) for the conversion of $8,700 (December 31, 2014 - $nil) of this debenture. During the period ended March 31, 2015, the Company had amortized $10,339 (December 31, 2014 - $10,123) of the debt discount to interest expense. As at March 31, 2015, the carrying value of the debenture was $13,380 (December 31, 2014 - $11,741).

On April 2, 2014, the note became convertible resulting in the Company recording a derivative liability of $47,794 with a corresponding adjustment to loss on change in fair value of derivative liabilities. As at March 31, 2015, the Company revalued the derivative liability to its fair value resulting in the Company recording $18,600 (December 31, 2014 - $2,882 gain) as a loss on change in fair value of derivative liabilities. As at March 31, 2015, the fair value of the derivative liability was $35,615 (December 31, 2014 - $44,912). Refer to Note 4.

On February 18, 2014, the Company entered into a $15,500 convertible debenture with a non-related party. Under the terms of the debenture, the amount is unsecured, bears interest at 8% per annum, and is due on August 20, 2015. The note is convertible into shares of common stock 180 days after the date of issuance (August 17, 2014) at a conversion rate of 50% of the average of the five lowest closing bid prices of the Company's common stock for the thirty trading days ending one trading day prior to the date the conversion notice is sent by the holder to the Company. As at March 31, 2015, the Company recorded accrued interest of $1,379 (December 31, 2014 - $1,074), which has been included in accounts payable and accrued liabilities.

In accordance with ASC 470-20, "Debt with Conversion and Other Options", the Company recognized the intrinsic value of the embedded beneficial conversion feature of $15,500 as additional paid-in capital and an equivalent discount which will be charged to operations over the term of the convertible note. During the period ended March 31, 2015, the Company had amortized $2,453 (December 31, 2014 - $2,431) of the debt discount to interest expense. As at March 31, 2015, the carrying value of the debenture was $4,884 (December 31, 2014 - $2,431).

HDS International Corp.

Notes to the Consolidated Financial Statements

(expressed in U.S. dollars)

(unaudited)

3. Convertible Debentures (continued)

On August 17, 2014, the note became convertible resulting in the Company recording a derivative liability of $21,750 with a corresponding adjustment to loss on change in fair value of derivative liabilities. As at March 31, 2015, the Company revalued the derivative liability to its fair value resulting in the Company recording $6,789 (December 31, 2014 - $1,038 gain) as a loss on change in fair value of derivative liabilities. As at March 31, 2015, the fair value of the derivative liability was $20,802 (December 31, 2014 - $20,712). Refer to Note 4.

4. Derivative Liabilities

The Company records the fair value of the of the conversion price of the convertible debentures disclosed in Notes 3(a) and 3(b) in accordance with ASC 815, Derivatives and Hedging. The fair value of the derivative was calculated using a multi-nominal lattice model performed by an independent qualified business valuator. The fair value of the derivative liability is revalued on each balance sheet date with corresponding gains and losses recorded in the consolidated statement of operations. During the period ended March 31, 2015, the Company recorded a loss on the change in fair value of derivative liability of $25,389 (December 31, 2014 - $78,680). As at March 31, 2015, the Company recorded a derivative liability of $56,417 (2014 - $70,290).

The following inputs and assumptions were used to value the convertible debentures outstanding during the periods ended March 31, 2015 and December 31, 2014:

·	The underlying stock price of $0.0001 to $0.0006 was used as the fair value of the common stock as at December 31, 2014.

·	The underlying stock price of $0.0005 to $0.0011 was used as the fair value of the common stock as at March 31, 2015.

·	The principal of the debenture on the July 15, 2013 date of issuance was $27,500.

·	The balance of the principal and interest of the July 15, 2013 debenture on January 11, 2014, the date the debenture became convertible, was $28,579.

·	The balance of the principal and interest of the July 15, 2013 debenture on December 31, 2014 was $23,117.

·	The balance of the principal and interest of the July 15, 2013 debenture on March 31, 2015 was $873.

·	The principal of the debenture on the October 4, 2013 date of issuance was $32,500.

·	The balance of the principal and interest of the October 4, 2013 debenture on April 2, 2014, the date the debenture became convertible, was $33,782.

·	The balance of the principal and interest of the October 4, 2013 debenture on December 31, 2014 was $35,727.

·	The balance of the principal and interest of the October 4, 2013 debenture on March 31, 2015 was $27,668.

·	The principal of the debenture on the February 18, 2014 date of issuance was $15,500.

·	The balance of the principal and interest of the February 18, 2014 debenture on August 17, 2014, the date the debenture became convertible, was $16,112.

·	The balance of the principal and interest of the February 18, 2014 debenture on December 31, 2014 was $16,574.

·	The balance of the principal and interest of the February 18, 2014 debenture on March 31, 2015 was $16,879.

·	Capital raising events are not a factor for the debenture.

·	The debt holder would redeem based on availability of alternative financing 0% of the time increasing 1.0% monthly to a maximum of 10%.

·	The debt holder would automatically convert the note at maturity if the registration (after 120 days) was effective and the Company is not in default.

The projected annual volatility for each valuation period was based on the historic volatility of the Company of 176% as at December 31, 2013, 175% as at January 11, 2014, 176% as at June 30, 2014, 176% as at August 17, 2014, 170% as at September 30, 2014, 2014, 166% as at October 26, 2014, 168% as at December 2, 2014, 170% as at December 4, 2014, 172% as at December 9, 2014, 183% as at December 31, 2014, 203% as at February 6, 2015, 206% as at February 10, 2015, 209% as at February 13, 2015, 212% as at February 18, 2015, 216% as at February 23, 2015, 222% as at March 2, 2015, 223% as at March 3, 2015, 238% as at March 16, 2015, 240% as at March 17, 2015, 244% as at March 19, 2015, 249% as at March 24, 2015, 251% as at March 25, 2015, and 259% as at March 31, 2015.

·	An event of default would occur 0% of the time, increasing to 1.0% per month to a maximum of 5%. To date, the debenture is not in default nor converted by the debt holder.

HDS International Corp.

Notes to the Consolidated Financial Statements

(expressed in U.S. dollars)

(unaudited)

4. Derivative Liabilities (continued)

A summary of the activity of the derivative liability is shown below:

	$
Balance, December 31, 2013	45,521
Derivative loss due to new issuances	105,816
Adjustment for conversion	(59,911	)
Mark to market adjustment	(27,136	)
Balance, December 31, 2014	70,290
Adjustment for conversion	(39,262	)
Mark to market adjustment	25,389
Balance, March 31, 2015	56,417

5. Common Stock

On March 5, 2015, the Company issued 200,000,000 common shares with a par value of $200,000 pursuant to a license agreement with a third party to acquire the rights to technologies related to emergency management and communications. As the transaction resulted in a change of control, the par value of the license was allocated to additional paid-in capital. As a result of the completion of the transaction, SirenGPS and Paul Rauner are deemed related parties.

On March 5, 2015, the Company issued 106,050,000 common shares with a fair value of $21,210 for the settlement of accounts payable of $733,500 owing to consultants resulting in a gain on settlement of debt of $712,290. As the transaction was pursuant to the agreement which resulted in a change of control, the gain has been recorded to additional paid-in capital.

On March 5, 2015, the Company issued 342,150,496 common shares with a fair value of $68,430 for the settlement of $300,000 of principal and $107,479 of accrued interest owing to a company controlled by the former President and CEO of the Company. The transaction resulted in a gain on settlement of debt of $339,049 which was recorded against additional paid-in capital. Refer to Note 7(a).

On March 5, 2015, the Company issued 74,235,000 common shares with a fair value of $14,847 for the settlement of $215,225 owing to the former President and CEO and companies under his control. The transaction resulted in a gain on settlement of debt of $200,378 which was recorded against additional paid-in capital. Refer to Notes 7 and 8.

During the period ended March 31, 2015, the Company issued 454,000,000 common shares for the conversion of $20,040 of principal and $2,660 of accrued interest of the July 15, 2013 convertible debenture. As the conversions were within the terms of the agreement, no additional gain or loss was recognized as a result of the conversion.

During the period ended March 31, 2015, the Company issued 174,000,000 common shares for the conversion of $8,700 of principal of the October 4, 2013 convertible debenture. As the conversions were within the terms of the agreement, no additional gain or loss was recognized as a result of the conversion.

6. Preferred Stock

On March 5, 2015, the Company issued 13,624,300 Class B preferred stock with a par value of $13,624 pursuant to a license agreement with a third party to acquire the rights to technologies related to emergency management and communications. As the transaction resulted in a change of control, the par value of the license was allocated to additional paid-in capital. As a result of the completion of the transaction, SirenGPS and Paul Rauner are deemed related parties. Each Class B preferred stock is convertible into common stock of the Company at a rate of 200 shares of common stock per each Class B preferred stock.

7. Related Party Transactions

a)	As at March 31, 2015, the Company owes $570 (December 31, 2014 – $nil) to the President and CEO of the Company for reimbursement of expenses which has been included in accounts payable and accrued liabilities – related parties. The amount owing is unsecured, non-interest bearing, and due on demand.

HDS International Corp.

Notes to the Consolidated Financial Statements

(expressed in U.S. dollars)

(unaudited)

7. Related Party Transactions (continued)

As at March 31, 2015, the Company owes $19,544 (December 31, 2014 – $7,518) to the former President and CEO of the Company for reimbursement of expenses which has been included in accounts payable and accrued liabilities – related parties. The amount owing is unsecured, non-interest bearing, and due on demand.

As at March 31, 2015, the Company owes $nil (December 31, 2014 - $300,000) to a company controlled by former officers and directors of the Company. The amount owing is unsecured, bears interest at 10% per annum, and is due on demand. As at March 31, 2015, the Company has recorded accrued interest of $nil (December 31, 2014 - $102,219) which has been included in accounts payable and accrued liabilities – related parties. During the period ended March 31, 2015, the Company issued 342,150,496 common shares to settle the amounts owing. Refer to Note 5(c).

As at March 31, 2015, the Company owes $nil (December 31, 2014 - $15,225) to companies under common control by former officers and directors of the Company which has been included in accounts payable and accrued liabilities – related parties. The amounts owing are unsecured, non-interest bearing, and due on demand. During the period ended March 31, 2015, the Company issued 5,251,378 common shares to settle the amounts owing. Refer to Note 5(d).

During the period ended March 31, 2015, the Company has incurred $20,000 (December 31, 2014 - $120,000) to the former President and CEO of the Company for consulting services. As at March 31, 2015, the Company recorded a related party accounts payable of $nil (December 31, 2014 - $180,000), which has been included in accounts payable and accrued liabilities – related party. The amounts owing are unsecured, non-interest bearing, and due on demand. During the period ended March 31, 2015, the Company issued 68,983,622 common shares to settle the amount owing. Refer to Notes 5(d) and 8(c).

8. Commitments

On October 12, 2011, the Company entered into a verbal consulting agreement with a non-related party whereby the Company will pay a monthly consulting fee for services provided in the amounts of $3,000. The agreement is for a one month term automatically renewing in each successive month unless earlier terminated. On July 18, 2012, the Board of Directors reviewed the consulting agreement and authorized an increase to the monthly consulting fee from $3,000 to $3,750 per month beginning July 2012. On October 1, 2012, the Board of Directors reviewed the consulting agreement and adjusted the consulting fee from $3,750 to $3,000 per month beginning October 2012. On April 8, 2014, The Board of Directors reviewed the consulting agreement and adjusted the consulting fee from $3,000 to $500 per month effective January 1, 2014. On March 5, 2015, the Company entered into a Settlement and Mutual Release Agreement whereby the parties agreed to terminate the consulting agreement and settle all amounts owing under the consulting agreement.

During the period ended March 31, 2015, the Company incurred $1,000 (December 31, 2014 - $6,000) in consulting fees relating to this agreement, of which $nil (December 31, 2014- $48,000) has been recorded in accounts payable and accrued liabilities as at March 31, 2015. During the period ended March 31, 2015, the Company issued 31,815,000 common shares to settle the amount owing of $49,000. Refer to Note 5(b).

On October 12, 2011, the Company entered into a consulting agreement with a non-related party whereby the Company will pay a monthly consulting fee for services provided in the amounts of $27,500. The agreement is for a one month term automatically renewing in each successive month unless earlier terminated. On April 8, 2014, The Board of Directors reviewed the consulting agreement and adjusted the consulting fee from $27,500 to $21,500 per month effective January 1, 2014. On March 5, 2015, the Company entered into a Settlement and Mutual Release Agreement whereby the parties agreed to terminate the consulting agreement and settle all amounts owing under the consulting agreement.

During the period ended March 31, 2015, the Company incurred $43,000 (December 31, 2014 - $258,000) in consulting fees relating to this agreement, of which $nil (December 31, 2014 - $641,500) has been recorded in accounts payable and accrued liabilities as at March 31, 2015. During the period ended March 31, 2015, the Company issued 74,235,000 common shares to settle the amount owing of $684,500. Refer to Note 5(b).

HDS International Corp.

Notes to the Consolidated Financial Statements

(expressed in U.S. dollars)

(unaudited)

8. Commitments (continued)

On October 12, 2011, the Company entered into a consulting agreement with the former President and CEO of the Company whereby the Company will pay a monthly consulting fee for services provided in the amounts of $3,000. The agreement is for a one month term automatically renewing in each successive month unless earlier terminated. On June 10, 2012, the Board of Directors authorized an increase to the monthly consulting fee from $3,000 to $6,000 per month beginning June 2012. On July 18, 2012, the Board of Directors reviewed the consulting agreement and adjusted the monthly consulting fee to $3,750 beginning July 2012. On April 8, 2014, The Board of Directors reviewed the consulting agreement and adjusted the consulting fee from $3,750 to $10,000 per month effective January 1, 2014. On March 5, 2015, the Company entered into a Settlement and Mutual Release Agreement whereby the parties agreed to terminate the consulting agreement and settle all amounts owing under the consulting agreement.

During the period ended March 31, 2015, the Company incurred $20,000 (December 31, 2014 - $120,000) in consulting fees relating to this agreement, of which $nil (December 31, 2014 - $180,000) has been recorded in accounts payable and accrued liabilities – related parties as at March 31, 2015. During the period ended March 31, 2015, the Company issued 68,983,622 common shares to settle the amount owing of $200,000. Refer to Notes 5(d) and 7(e).

On January 2, 2013, the Company entered into a consulting agreement with The Holden Group, LLC ("Holden") whereby the Company paid Holden $2,000 and issued 600,000 restricted common shares of the Company upon the execution of the agreement as well as pay $500 on each of the first, second and third month anniversaries of the agreement. These final three payments have been accrued and recorded in accounts payable and accrued liabilities.

9. Subsequent Events

On April 1, 2015, the Company issued a draw-down convertible promissory note to a non-related party in the principal amount of up to $600,000 (The April 1, 2015 Debenture). Under the terms of the promissory note, the amount is unsecured, bears interest at 10% per annum, and is due on April 1, 2016. The note is convertible into shares of common stock at a conversion rate of 50% of the average of the three lowest end-of-day closing prices of the Company's common stock for the twenty-five trading days prior to the date the holder elects to convert all or part of the promissory note.

On April 1, 2015, the Company consented to the assignment of the February 18, 2014 and the October 4, 2013 convertible debentures. According to the terms of the assignment agreement, the February 18, 2014 note was sold to the purchaser and simultaneously exchanged for a new note (the "New February Note"). In accordance with the exchange, The New February Note was deemed to have been issued February 18, 2014, and carried substantially the same terms as the original note, with the following exceptions: the New February bears 0% interest, and the overall ownership of the purchaser at any one moment shall be limited to 9.99% of the issued and outstanding shares of our common stock. The purchaser also entered into an agreement with original debenture holder, granting the purchaser the exclusive right to acquire the October 4, 2013 note, on or before May 7, 2015.

On April 2, 2015, the Company entered into an equity line of credit (ELOC) up to $4,000,000 with a non-related party, which allows the Company to "put" shares to the debtor at a 20% discount to the lowest trading price over the five consecutive trading days immediately succeeding the applicable Put Notice Date. The ELOC requires the filing of a registration statement prior to the funds becoming available to the Company. Once the registration is filed, funding under the ELOC occurs at the discretion of the Company. The minimum amount of the Put Notice is restricted to $5,000 and the maximum to 100% of the average of the daily trading dollar volume for the ten consecutive trading days immediately prior to the Put Notice Date but not to exceed an accumulated amount per month of $150,000 unless prior approval is obtained.

d)	On April 3, 2015, two shareholders of the Company agreed to convert 422,000,000 shares of common stock into 2,215,500 shares of Class B Preferred Stock at the request of the Company, to facilitate the closing of the other transactions herein described.

On April 6, 2015, the Company entered into a Common Stock Purchase Warrant agreement with a non-related party providing the holder the right to purchase shares of common stock of the Company by investing up to $50,000 into new shares of common stock at a price of $0.001 per share for a period of five years. This warrant agreement was negotiated as part of the draw-down convertible promissory note as described in Note 9(a).

HDS International Corp.

Notes to the Consolidated Financial Statements

(expressed in U.S. dollars)

(unaudited)

9. Subsequent Events (continued)

f)	On April 9, 2015, the Company received $40,000 under the April 1, 2015 Debenture and applied the proceeds to fund operating expenses.

g)	On April 10, 2015, the Company issued 149,844,444 common shares upon the issuance of $6,743 of principal of the February 18, 2014 convertible debenture. Refer to Note 3(c).

On April 15, 2015, the Company entered into a draw-down convertible promissory note to a non-related party in the principal amount of up to $100,000 (the April 15, 2015 Debenture). Under the terms of the debenture, the amount is unsecured, bears interest at 10% per annum, and is due on October 15, 2016. The note is convertible into shares of common stock after the maturity date at a conversion rate of 50% of the average of the three lowest closing bid prices of the Company's common stock for the twenty trading days ending on the trading day the conversion notice is received by the Company.

i)	On April 15, 2015, the Company issued 100,000 warrants to a non-related party. Each warrant entitles the holder to purchase one share of common stock at $0.001 per share until April 15, 2020. The warrants are subject to a cashless conversion feature at the election of the holder.

j)	On April 16, 2015, the Company received $50,000 under the April 15, 2015 Debenture and applied the proceeds to fund operating expenses.

k)	On April 22, 2015, the Company received $20,000 under the April 1, 2015 Debenture and applied the proceeds to fund operating expenses.

l)	On April 23, 2015, the Company issued 164,977,778 common shares for the conversion of $7,424 of principal of the February 18, 2014 convertible debenture. Refer to Note 3(c).

On May 7, 2015, Under the April 1, 2015 agreement the purchaser exercised the option to purchase the October 4, 2013 debenture on May 7, 2015. According to the terms of the assignment agreement, the October 4, 2013 note was sold to the purchaser and simultaneously exchanged for a new note (the "New October Note"). In accordance with the exchange, The New October Note was deemed to have been issued October 4, 2013, and carried substantially the same terms as the original note, with the following exceptions: the New October Note bears 0% interest, and the overall ownership of the purchaser at any one moment shall be limited to 9.99% of the issued and outstanding shares of our common stock.

ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION.

Forward Looking Statements

This Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) contains forward-looking statements that involve known and unknown risks, significant uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed, or implied, by those forward-looking statements. You can identify forward-looking statements by the use of the words may, will, should, could, expects, plans, anticipates, believes, estimates, predicts, intends, potential, proposed, or continue or the negative of those terms. These statements are only predictions. In evaluating these statements, you should consider various factors which may cause our actual results to differ materially from any forward-looking statements. Although we believe that the exceptions reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.

We are considered a start-up corporation. Our auditors have issued a going concern opinion on the financial statements for the year ended December 31, 2014.

RESULTS OF OPERATIONS

Working Capital

	March 31, 2015 $			December 31, 2014 $
Current Assets		515			1,093
Current Liabilities		138,053			1,435,785
Working Capital Deficit		(137,538	)		(1,434,692	)

Cash Flows

	March 31, 2015 $			March 31, 2014 $
Cash Flows used in Operating Activities		(73	)		(12,759	)
Cash Flows from Financing Activities		–			16,200
Net Decrease in Cash During Period		(73	)		3,441

Operating Revenues

We have not generated any revenues since inception.

Operating Expenses and Net Loss

Operating expenses for the three months ended March 31, 2015 were $81,494 compared with $108,860 for the three months ended March 31, 2014. The decrease in operating expenses was attributed to a decrease in consulting fees of $26,165 and professional fees of $7,850, offset by an increase in general and administrative fees of $6,649 for day-to-day operating costs. The decrease to consulting fees is a result of the Company entering into settlement and mutual release agreements with three consultants at the beginning of March resulting in the termination of the consulting agreements compared to these consultants receiving a full three months of fees during the period ended March 31, 2014.

During the three months ended March 31, 2015, the Company recorded a net loss of $129,713 compared with a net loss of $170,989 for the three months ended March 31, 2014. In addition to the above, the Company incurred an increase of $5,453 of interest expense relating to debt balances offset by a decrease of $19,363 for loss on the change in fair value of derivatively liabilities. The increase in interest expense is a result of the Company accreting the debt discount relating to the convertible debentures held. The decrease in the loss on the change in fair value of the derivative liabilities relates to the fact that the Company has converted $68,700 of the $108,000 convertible debentures outstanding as at March 31, 2014 leaving a balance of $39,300 as at March 31, 2015.

Liquidity and Capital Resources

As at March 31, 2015, the Company's cash balance was $nil compared to cash balance of $73 as at December 31, 2014. As at March 31, 2015, the Company's total assets were $515 compared to total assets of $1,093 as at December 31, 2014. The decrease in the total assets was attributed to the decrease of cash of $73 and a decrease of deferred financing costs of $505.

As at March 31, 2015, the Company had total liabilities of $138,053 compared with total liabilities of $1,435,785 as at December 31, 2014. The decrease in total liabilities is attributed to a decrease of account payable and accrued liabilities of $970,176, $685,328 of which pertained to trade accounts payable and $284,848 pertained to related party accounts payable and accrued liabilities as well as a decrease in due to related parties of $300,000, convertible debentures of $13,688 and derivative liabilities of $13,873. The decrease in accounts payable and accrued liabilities and due to related parties was the result of the Company issuing 522,435,496 common shares for the settlement of $733,500 of accounts payable and accrued liabilities, $322,704 of accounts payable and accrued liabilities – related parties, and $300,000 of due to related parties. The decrease in both the convertible debentures and derivative liability is the result of the Company converting $68,700 of the $108,000 convertible debentures outstanding as at March 31, 2014 leaving a balance of $39,300 as at March 31, 2015.

As at March 31, 2015, the Company has a working capital deficit of $137,538 compared with working capital deficit of $1,434,692 at December 31, 2014 with the decrease in the working capital deficit attributed to the decreases in accounts payable and accrued liabilities, due to related parties, convertible debentures and derivative liabilities during the period as discussed above.

Cashflow from Operating Activities

During the three months ended March 31, 2015, the Company used $73 of cash for operating activities compared to the use of $12,759 of cash for operating activities during the three months ended March 31, 2014. The decrease in the level of cash used for operating activities was due to the increase in non-cash accretion of debt discount, amortization of intangible assets, offset by an decrease in non-cash amortization of deferred financing costs and loss on change in fair value of derivative liability as well as the change in the level of accounts payable and accrued liabilities – related parties.

Cashflow from Financing Activities

During the three months ended March 31, 2015, the Company received $nil of proceeds from financing activities compared to $16,200 during the three months ended March 31, 2014. The decrease in proceeds from financing activities was due to the Company receiving proceeds of $15,000 for the issuance of a convertible debenture and $1,200 from a related party during the three months ended March 31, 2014 compared to $nil received during the three months ended March 31, 2015.

Subsequent Developments

On April 1, 2015, the Company issued a draw-down convertible promissory note to a non-related party in the principal amount of up to $600,000. Under the terms of the promissory note, the amount is unsecured, bears interest at 10% per annum, and is due on April 1, 2016. The note is convertible into shares of common stock at a conversion rate of 50% of the average of the three lowest end-of-day closing prices of the Company's common stock for the twenty-five trading days prior to the date the holder elects to convert all or part of the promissory note.

On April 3, 2015, two shareholders of the Company agreed to convert 422,000,000 shares of common stock into 2,215,500 shares of Class B Preferred Stock at the request of the Company, to facilitate the closing of the other transactions herein described.

On April 10, 2015, the Company issued 149,844,444 common shares upon the issuance of $6,743 of principal of the February 18, 2014 convertible debenture.

On April 15, 2015, the Company entered into a draw-down convertible promissory note to a non-related party in the principal amount of up to $100,000. Under the terms of the debenture, the amount is unsecured, bears interest at 10% per annum, and is due on October 15, 2016. The note is convertible into shares of common stock after the maturity date at a conversion rate of 50% of the average of the three lowest closing bid prices of the Company's common stock for the twenty trading days ending on the trading day the conversion notice is received by the Company.

On April 15, 2015, the Company issued 100,000 warrants to a non-related party. Each warrant entitles the holder to purchase one share of common stock at $0.001 per share until April 15, 2020. The warrants are subject to a cashless conversion feature at the election of the holder.

On April 23, 2015, the Company issued 164,977,778 common shares for the conversion of $7,424 of principal of the February 18, 2014 convertible debenture.

Going Concern

We have not attained profitable operations and are dependent upon the continued financial support from our shareholders, the ability to raise equity or debt financing, and the attainment of profitable operations from our future business. These factors raise substantial doubt regarding our ability to continue as a going concern.

Off-Balance Sheet Arrangements

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

Future Financings

We will continue to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund our operations and other activities. We are also exploring equity investment into the preferred shares of the Company.

Critical Accounting Policies

Our consolidated financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods.

We regularly evaluate the accounting policies and estimates that we use to prepare our consolidated financial statements. A complete summary of these policies is included in the notes to our consolidated financial statements. In general, management's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.

Recently Issued Accounting Pronouncements

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 4. CONTROLS AND PROCEDURES.

Under the supervision and with the participation of our management, including the Principal Executive Officer and Principal Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, the Principal Executive Officer and Principal Financial Officer have concluded that these disclosure controls and procedures are not effective due to the material weaknesses resulting from the Board of Directors not currently having any independent members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K, and controls were not designed and in place to ensure that all disclosures required were originally addressed in our financial statements. Please refer to our Annual Report on Form 10-K as filed with the SEC on April 15, 2015, for a complete discussion relating to the foregoing evaluation of Disclosures and Procedures.

There were no changes in our internal control over financial reporting during the quarter ended March 31, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1A. RISK FACTORS.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

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ITEM 6. EXHIBITS.

Exhibit		Incorporated by reference			Filed
Number	Description of Exhibit	Form	Date	Number	herewith
3.1	Articles of Incorporation.	S-1	3/24/09	3.1
3.2	Bylaws.	S-1	3/24/09	3.2
3.3	Amended and Restated Articles of Incorporation.	8-K	6/14/11	3.1a
3.4	Amended and Restated Articles of Incorporation.	8-K	8/17/11	3.1
10.1	Management Agreement between the Company and Mr. Mark Simon dated March 23, 2010.	10-K	4/07/10	10.1
10.2	Promissory Note issued to Newton Management Ltd. dated September 28, 2010.	8-K	10/08/10	10.1
10.3	Amended Management Agreement between the Company and Mr. Mark Simon dated October 1, 2010.	8-K	11/10/10	10.1
10.4	Investors Relations Services Agreement with Blue Chip IR dated October 1, 2010.	10-Q	11/15/10	10.3
10.5	Share Exchange Agreement with AmeriSure Pharmaceuticals LLC dated May 13, 2011.	8-K	5/16/11	10.1
10.6	Promissory Note to Amerisure Pharmaceuticals, LLC dated June 20, 2011.	8-K	6/29/11	10.1
10.7	Promissory Note to Serik Enterprises, Inc.	8-K	8/12/11	10.1
10.8	Settlement Agreement with Vail International Ltd.	8-K	8/12/11	10.2
10.9	Settlement Agreement with Newton Management Ltd.	8-K	8/12/11	10.3
10.10	Settlement Agreement with Mark Simon.	8-K	8/12/11	10.4
10.11	Settlement Agreement with Carrillo Huettel, LLC.	8-K	8/12/11	10.5
10.12	Asset Acquisition Agreement.	8-K	8/17/11	10.1
10.13	Promissory Note with Hillwinds Ocean Energy, LLC.	8-K	8/17/11	10.2
10.14	Settlement Agreement and General Mutual Release with Serik Enterprises, Inc.	10-Q	11/21/11	10.14
10.15	Draw Down Convertible Promissory Note.	10-Q	11/21/11	10.15
10.16	Intellectual Property License Agreement with Hillwinds Energy Development Corporation.	10-K	4/16/12	10.1
10.17	Exclusivity and Feasibility Study Agreement with City of Saint John.	8-K	12/05/12	10.1
10.18	Intellectual Property License Agreement with Hillwinds Energy Development Corporation dated December 10, 2012.	8-K	12/12/12	10.1
10.19	Consulting Agreement with The Holden Group.	8-K	1/03/13	10.1
10.20	Restructuring Agreement with Dennis Holden.	8-K/A	2/14/13	10.1
10.21	Restructuring Agreement with Stephen Walker.	8-K/A	2/14/13	10.2
10.22	Restructuring Agreement with Lance Warren.	8-K/A	2/14/13	10.3
10.23	Exchange Agreement with Denali Equity Group, LLC.	10-Q	5/20/15	10.23	X
14.1	Code of Ethics.	10-K	3/29/11	14.1
21.1	List of subsidiaries	S-1/A-1	1/17/13	21.1
31.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.				X
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.				X
99.1	Subscription Agreement.	S-1/A-1	1/17/13	99.1
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension – Schema.
101.CAL	XBRL Taxonomy Extension – Calculations.
101.LAB	XBRL Taxonomy Extension – Labels.
101.PRE	XBRL Taxonomy Extension – Presentation.
101.DEF	XBRL Taxonomy Extension – Definition.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the Registrant and in the capacities on this 19^th day of May, 2015.

	HDS INTERNATIONAL CORP.
	(the "Registrant")

	BY:	PAUL RAUNER
		Paul Rauner
		President

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EXHIBIT INDEX

Exhibit		Incorporated by reference			Filed
Number	Description of Exhibit	Form	Date	Number	herewith
3.1	Articles of Incorporation.	S-1	3/24/09	3.1
3.2	Bylaws.	S-1	3/24/09	3.2
3.3	Amended and Restated Articles of Incorporation.	8-K	6/14/11	3.1a
3.4	Amended and Restated Articles of Incorporation.	8-K	8/17/11	3.1
10.1	Management Agreement between the Company and Mr. Mark Simon dated March 23, 2010.	10-K	4/07/10	10.1
10.2	Promissory Note issued to Newton Management Ltd. dated September 28, 2010.	8-K	10/08/10	10.1
10.3	Amended Management Agreement between the Company and Mr. Mark Simon dated October 1, 2010.	8-K	11/10/10	10.1
10.4	Investors Relations Services Agreement with Blue Chip IR dated October 1, 2010.	10-Q	11/15/10	10.3
10.5	Share Exchange Agreement with AmeriSure Pharmaceuticals LLC dated May 13, 2011.	8-K	5/16/11	10.1
10.6	Promissory Note to Amerisure Pharmaceuticals, LLC dated June 20, 2011.	8-K	6/29/11	10.1
10.7	Promissory Note to Serik Enterprises, Inc.	8-K	8/12/11	10.1
10.8	Settlement Agreement with Vail International Ltd.	8-K	8/12/11	10.2
10.9	Settlement Agreement with Newton Management Ltd.	8-K	8/12/11	10.3
10.10	Settlement Agreement with Mark Simon.	8-K	8/12/11	10.4
10.11	Settlement Agreement with Carrillo Huettel, LLC.	8-K	8/12/11	10.5
10.12	Asset Acquisition Agreement.	8-K	8/17/11	10.1
10.13	Promissory Note with Hillwinds Ocean Energy, LLC.	8-K	8/17/11	10.2
10.14	Settlement Agreement and General Mutual Release with Serik Enterprises, Inc.	10-Q	11/21/11	10.14
10.15	Draw Down Convertible Promissory Note.	10-Q	11/21/11	10.15
10.16	Intellectual Property License Agreement with Hillwinds Energy Development Corporation.	10-K	4/16/12	10.1
10.17	Exclusivity and Feasibility Study Agreement with City of Saint John.	8-K	12/05/12	10.1
10.18	Intellectual Property License Agreement with Hillwinds Energy Development Corporation dated December 10, 2012.	8-K	12/12/12	10.1
10.19	Consulting Agreement with The Holden Group.	8-K	1/03/13	10.1
10.20	Restructuring Agreement with Dennis Holden.	8-K/A	2/14/13	10.1
10.21	Restructuring Agreement with Stephen Walker.	8-K/A	2/14/13	10.2
10.22	Restructuring Agreement with Lance Warren.	8-K/A	2/14/13	10.3
10.23	Exchange Agreement with Denali Equity Group, LLC.	10-Q	5/20/15	10.23	X
14.1	Code of Ethics.	10-K	3/29/11	14.1
21.1	List of subsidiaries	S-1/A-1	1/17/13	21.1
31.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.				X
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.				X
99.1	Subscription Agreement.	S-1/A-1	1/17/13	99.1
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension – Schema.
101.CAL	XBRL Taxonomy Extension – Calculations.
101.LAB	XBRL Taxonomy Extension – Labels.
101.PRE	XBRL Taxonomy Extension – Presentation.
101.DEF	XBRL Taxonomy Extension – Definition.

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EX-10.23 2 exh10-23.htm EXCHANGE AGREEMENT WITH DENALI EQUITY GROUP, LLC

Exhibit 10.23

EXCHANGE AGREEMENT

THIS EXCHANGE AGREEMENT (the "Agreement"), dated as of May 5, 2015 is entered into by and between HDS International Corp., a Nevada corporation with principal address at 9272 Olive Blvd, St Louis, MO 63132 (the "Company") and Denali Equity Group, LLC, a Nevada limited liability company with principal address at 7200 Wisconsin Ave. Suite 206, Bethesda, MD 20814 (the "Holder"). As used herein, the term "Parties" shall be used to refer to the Company and Holder jointly.

WHEREAS:

A. The Company warrants and represents that it issued that certain Convertible Promissory Note to Asher Enterprises, Inc. (the "Original Investor") on or before October 4, 2013, in the total stated amount of $32,500 (the "Original Note"). The Original Note was later assigned to Jabro Funding Corp. (the "Current Investor") on November 19, 2014.

B. The Company warrants and represents that in connection with the issuance of the Original Note the Company received the sum of $32,500 from the Original Investor on or about October 4, 2013 (the "Original Note Issuance Date").

C. The Company warrants and represents that the Original Note was issued to the Original Investor on the basis of a pre-existing business relationship that the Company had with the Original Investor.

D. The Parties acknowledge and agree that contemporaneous with this Agreement, the Holder has entered into that certain Note Purchase Agreement, dated May 5, 2015 (the "Purchase Agreement") wherein the Holder is acquiring $23,800 of the Original Note plus accrued interest (the "Note Portion") from the Original Investor as more particularly set forth in that certain Note Purchase Agreement attached hereto as Exhibit B.

E. The Parties acknowledge and agree that prior to entering into this Agreement, the Company and the Holder have had a pre-existing business relationship and that this Agreement is not the product or the result of any advertising or general solicitation.

F. The Holder warrants and represents that it is sophisticated and experienced in acquiring the securities of small public companies that has allowed it to evaluate the risks and uncertainties involved in acquiring said securities and thereby make an informed investment decision.

G. The Parties acknowledge and agree that contemporaneously with such purchase of the Note Portion by the Holder from the Original Investor, and as a condition to such purchase, the Company and the Holder desire to exchange the Note Portion for a new convertible promissory note in the form of Exhibit B attached hereto ("Exchange Note"), all on the terms set forth herein.

Jabro Exchange Agreement

HDS International Corp. – Denali Equity Group, LLC

May 5, 2015

NOW THEREFORE THE PARTIES AGREE AS FOLLOWS:

1.00 Exchange of Note. The Parties agree that solely in consideration of the surrender of the Note Portion, that:

1.01 Issuance of Exchange Note. Upon the following terms and conditions:

(A)

Exchange Note. The Company shall issue to the Holder, and the Holder shall acquire from the Company, that certain Exchange Note dated and issued as of May 5, 2014 in the aggregate original principal amount of $26,400 in exchange for the surrender and cancellation of the Principal and Interest (until October 4, 2014) of the Note Portion. The Exchange Note is being issued in substitution for and not in satisfaction of the Note Portion, provided, however, the Holder acknowledges and agrees that upon the issuance and acceptance of the Exchange Note issued pursuant to this Section the Note Portion will be deemed cancelled and will be promptly surrendered to the Company. The Parties further agree that the "Closing" and the "Closing Date" shall be deemed to occur upon the issuance of the Exchange Note as provided by this Section 1.01 (A) of this Agreement.

(B)

Delivery of Documents.The Company shall, at the Closing Date, deliver to the Holder duly executed copies of each of the exhibits to this Agreement and faithfully fulfill the obligations set forth in Section 2.08 of this Agreement.

2.00 Representations of the Company. The Company hereby makes to the Holder the following representations and warranties as of the date of this Agreement and on each and every closing date hereafter:

2.01 Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and the Exchange Note by the Company and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, its board of directors or its stockholders in connection therewith. This Agreement and the Exchange Note have been duly executed by the Company and, when delivered in accordance with the terms hereof will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms.

2.02 No Conflicts. The execution, delivery and performance of this Agreement and the Exchange Note by the Company and the consummation by the Company of the transactions contemplated hereby do not and will not: (i) conflict with or violate any provision of the Company's or any of its subsidiary's certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that

Jabro Exchange Agreement

HDS International Corp. – Denali Equity Group, LLC

May 5, 2015

with notice or lapse of time or both would become a default) under, result in the creation of any lien or encumbrance upon any of the properties or assets of the Company or any subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any material agreement, credit facility, debt or other material instrument (evidencing a Company or subsidiary debt or otherwise) or other material understanding to which the Company or any subsidiary is a party or by which any property or asset of the Company or any subsidiary thereof is bound or affected, or (iii) conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a material adverse effect on the Company or its business of financial condition.

2.03 Filings, Consents and Approvals. The Company is not required to obtain any approval, consent, waiver, authorization or order of, give any notice to, or make any filing, qualification or registration with, any court or other federal, state, local, foreign or other governmental authority or other person or entity in connection with the execution, delivery and performance by the Company of this Agreement, the Exchange Note and both of them. No further approval is required for the issuance or sale of the Exchange Note or any shares of Common Stock issuable upon the conversion or exchange of, in payment of interest on, or otherwise pursuant to the Exchange Note ("Underlying Shares").

2.04 Issuance and Reservation of Securities. The Exchange Note and the Underlying Shares are duly authorized. Any Underlying Shares, when issued in accordance with the terms of Exchange Note, will be duly and validly issued, fully paid and nonassessable, free and clear of all liens, freely tradable and without any legends thereon. The Company will, and at all times, reserve from its duly authorized capital stock for issuance upon conversion pursuant to the Exchange Note at least such amount of shares of Common Stock as is equal to no less than five times the amount of Underlying Shares into which the Exchange Note is convertible (without regard to any limitations on ownership or conversion set forth therein).

2.05 Private Placement. No registration under the Securities Act of 1933, as amended (the "1933 Act"), is required for the issuance of the Exchange Note or any Underlying Shares in accordance with the terms hereof and thereof.

2.06 No Inside Information. Neither the Company nor any Person acting on its behalf has provided the Holder or its counsel with any information that constitutes or might constitute material, non-public information concerning the Company.

2.07 Equal Consideration. Except as otherwise set forth herein, no consideration has been offered or paid to any person to amend or consent to a waiver, modification, forbearance, exchange or any other action with respect to any provision of the Note Portion.

Jabro Exchange Agreement

HDS International Corp. – Denali Equity Group, LLC

May 5, 2015

2.08 Survival & Delivery of Documents to the Holder. All of the Company's warranties and representations contained in this Agreement shall survive the execution, delivery and acceptance of this Agreement by the Parties hereto and continue for a period of 5 years after the date of this Agreement.

2.08.01 Documents RE: Exchange Note. Further, contemporaneous with the execution and delivery of this Agreement to the Holder, the Company hereby further delivers the following: (a) a duly executed copy of the Exchange Note (attached hereto to Exhibit A); (b) a duly executed copy of the Original Note, Original Proof of Payment, the Note Portion, and the Debt Purchase Agreement (attached hereto as Exhibit B); (c) a duly executed and notarized copy of the Notarized Certificate of Chief Executive Officer (attached hereto as Exhibit C); and (d) a duly executed Irrevocable Instructions to Stock Transfer Agent (attached hereto as Exhibit D). The Parties agree that time is of the essence in connection with the deliveries set forth in this Section 2.08.01 of this Agreement and the obligations imposed on the Company are material to this Agreement.

2.09 Holding Period for Exchange Note. Pursuant to Rule 144 promulgated under the 1933 Act: the holding period of the Exchange Note (and the underlying shares of Common Stock issuable upon conversion thereof or in payment of interest thereon) shall begin on the Original Note issuance date. The Company agrees not to take a position contrary to this paragraph.

2.10 No Event of Default. Upon consummation of the exchange hereunder, no Event of Default (as defined in the Original Note) shall have occurred and be continuing.

2.11 Balances. As of the date hereof, the balance outstanding under the Original Note including principal and interest, are as follows, and no further amounts are due under either or both of them:

Description of Note Balance

Debt being Purchased $23,800.00

Interest being Purchased $ 2,600.00

2.12 Legal Opinion. The Company hereby agrees to allow the Holder's legal counsel to issue a legal opinion to the Holder and the Company's Transfer Agent regarding this Agreement and the transactions contemplated hereby, in form and substance reasonably acceptable to said agent, including an opinion that all shares issuable upon conversion of the Exchange Note or in payment of interest thereunder) may be sold pursuant to Rule 144. The Company acknowledges that certificates representing any such shares may be issued without a restrictive legend as required pursuant to Section 2.04.

2.13 Transfer Consent and Documentation. The Company hereby consents to the following:

Jabro Exchange Agreement

HDS International Corp. – Denali Equity Group, LLC

May 5, 2015

(i)

the transfer of the Note Portion from the Original Investor to the Holder as contemplated in the Debt Purchase Agreement, an executed copy of which has been furnished to the Company;

(ii)

the Company hereby waives any requirement for any legal opinion in connection with such transfer, and represents and warrants that no further consent of or action by any other person or entity is required in connection with such transfer.

2.14 Public Information. So long as the Holder owns the Exchange Note and/or Underlying Shares, the Company shall timely file (or timely obtain extensions in respect thereof and file within the applicable grace period) all reports and definitive proxy or information statements required to be filed by the Company under the Securities Exchange Act of 1934, as amended ("Exchange Act"), and shall not terminate its status as an issuer required to file reports under the Exchange Act (even if the Exchange Act or the rules and regulations promulgated thereunder would otherwise permit such termination).

2.15 Conversion Procedures. The form of Conversion Notice included in the Exchange Note sets forth the totality of the procedures required of a Holder in order to convert Exchange Note. No additional legal opinion or other information or instructions shall be required of the Holder to convert the Exchange Note. The Company shall honor all conversions of the Exchange Note and shall deliver Underlying Shares in accordance with the terms, conditions and time periods set forth therein.

3.00 Miscellaneous.

3.01 Counterparts. This Agreement may be executed in two or more counterparts and by facsimile signature, delivery of PDF images of executed signature pages by email or otherwise, and each of such counterparts shall be deemed an original and all of such counterparts together shall constitute one and the same agreement.

3.02 Effect of Invalidity. If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express, without material change, the original intentions of the Parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the Parties or the practical realization of the benefits that would otherwise be conferred upon the Parties. The Parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

Jabro Exchange Agreement

HDS International Corp. – Denali Equity Group, LLC

May 5, 2015

3.03 Matter of Further Assurances & Cooperation. The Holder and the Company hereby agree and the Company further agrees that it shall provide further assurances that it will, in the future, execute and deliver any and all further agreements, certificates, instruments and documents and do and perform or cause to be done and performed, all acts and things as may be necessary or appropriate to carry out the intent and accomplish the purposes of this Agreement without unreasonable delay and in no event later than one (1) business after it receives any reasonable written request from the Holder.

3.04 Successors. The provisions of this Agreement shall be deemed to obligate, extend to and inure to the benefit of the successors, assigns, transferees, grantees, and indemnitees of each of the Parties to this Agreement.

3.05 Independent Counsel. Each of the Parties to this Agreement acknowledges and agrees that it has been represented by independent counsel of its own choice throughout all negotiations which preceded the execution of this Agreement and the transactions referred to in this Agreement, and each has executed this Agreement with the consent and upon the advice of said independent counsel. Each party represents that he or it fully understands the provisions of this Agreement, has consulted with counsel concerning its terms and executes this Agreement of his or its own free choice without reference to any representations, promises or expectations not set forth herein.

3.06 Exhibits. Exhibits A, B, C, and D, attached hereto, are each incorporated by reference herein.

3.07 Integration. This Agreement, after full execution, acknowledgment and delivery, memorializes and constitutes the entire agreement and understanding between the parties and supersedes and replaces all prior negotiations and agreements of the Parties, whether written or unwritten with the exception of the Company's profit sharing plan and any agreements related thereto.

3.08 Attorneys' Fees. In the event of a dispute between the parties concerning the enforcement or interpretation of this Agreement, the prevailing party in such dispute, whether by legal proceedings or otherwise, shall be reimbursed immediately for the reasonably incurred attorneys' fees and other costs and expenses by the other parties to the dispute.

3.09 Interpretation. Wherever the context so requires: the singular number shall include the plural; the plural shall include the singular; and the masculine gender shall include the feminine and neuter genders.

3.10 Captions. The captions by which the sections and subsections of this Agreement are identified are for convenience only, and shall have no effect whatsoever upon its interpretation.

3.11 Severance. If any provision of this Agreement is held to be illegal or invalid by a court of competent jurisdiction, such provision shall be deemed to be severed and deleted; and neither such provision, nor its severance and deletion, shall affect the validity of the remaining provisions.

Jabro Exchange Agreement

HDS International Corp. – Denali Equity Group, LLC

May 5, 2015

3.12 Expenses Associated With This Agreement. Each of the Parties hereto agrees to bear its own costs, attorneys' fees and related expenses associated with this Agreement.

3.13 Arbitration. Any dispute or claim arising to or in any way related to this Agreement shall be settled by binding arbitration in San Diego, California. All arbitration shall be conducted in accordance with the rules and regulations of the American Arbitration Association ("AAA"). AAA shall designate an arbitrator from an approved list of arbitrators following both parties' review and deletion of those arbitrators on the approved list having a conflict of interest with either party. Each party shall pay its own expenses associated with such arbitration (except as set forth in Section 3.08 Above). A demand for arbitration shall be made within a reasonable time after the claim, dispute or other matter has arisen and in no event shall such demand be made after the date when institution of legal or equitable proceedings based on such claim, dispute or other matter in question would be barred by the applicable statutes of limitations. The decision of the arbitrators shall be rendered within 60 days of submission of any claim or dispute, shall be in writing and mailed to all the parties included in the arbitration. The decision of the arbitrator shall be binding upon the parties and judgment in accordance with that decision.

3.14 Waiver of Jurisdiction. Each of the Parties hereto waive any claim that any such jurisdiction in San Diego, California (as provided by Section 3.13) is not a convenient forum for any such suit or proceeding and any defense or lack of in personam jurisdiction with respect thereto. To the fullest extent permitted by law, each of the Parties hereto hereby knowingly, voluntarily and intentionally waives its respective rights to a jury trial of any claim or cause of action based upon or arising out of this Agreement or any other document or any dealings between them relating to the subject matter of this Agreement and other documents. In addition to any and all other remedies that may be available at law, in the event of any breach of this Agreement, each of Parties hereto shall be entitled to specific performance of the agreements and obligations hereunder and to such other injunctive or other equitable relief as may be granted by a court of competent jurisdiction.

[The remainder of this page has been left intentionally blank.]

[Signature page follows.]

Jabro Exchange Agreement

HDS International Corp. – Denali Equity Group, LLC

May 5, 2015

IN WITNESS WHEREOF, this Agreement is executed as of the date first set forth above.

FOR THE COMPANY:

HDS International Corp.

By: ______________________________________________________________________

Name:

Title:

FOR THE HOLDER:

Denali Equity Group, LLC

By: ______________________________________________________________________

Name:

Title: Manager

[SIGNATURE PAGE TO EXCHANGE AGREEMENT]

Jabro Exchange Agreement

HDS International Corp. – Denali Equity Group, LLC

May 5, 2015

EXHIBIT A

COPY OF EXCHANGE NOTE

(As attached)

Jabro Exchange Agreement

HDS International Corp. – Denali Equity Group, LLC

May 5, 2015

EXHIBIT B

COPY OF ORIGINAL NOTE

AND

NOTE PURCHASE AGREEMENT

(As attached.)

Jabro Exchange Agreement

HDS International Corp. – Denali Equity Group, LLC

May 5, 2015

EXHIBIT C

NOTARIZED CERTIFICATE OF CHIEF EXECUTIVE OFFICER

HDS INTERNATIONAL CORP.

(Three Pages)

The undersigned, is the duly elected Chief Executive Officer of HDS International Corp., a Nevada corporation (the "Company").

I hereby warrant and represent that I have undertaken a complete and thorough review of the Company's corporate and financial books and records including, but not limited to the Company's records relating to the following:

(A)

that certain promissory note dated October 4, 2013 (the "Original Note Issuance Date") to Asher Enterprises, Inc. (the "Original Investor") by the Company in the total amount of $32,5000 (the "Original Note"), which was later sold to Jabro Funding Corp (the "Current Investor") is a valid debt and current outstanding obligation of the Company;

(B)

the Company's receipt before the Original Note Issuance Date of the sum of at least $32,500 from the Original Investor;

(C)

the Company's Board of Directors duly approved the issuance of the Original Note to the Original Investor and the Exchange Note to Denali Equity Group, LLC.

(D)

the Company's Board of Directors duly approved the terms of that certain Note Purchase Agreement by and between Jabro Funding Corp. and Denali Equity Group, LLC, dated May 5, 2015.

(E)

The Company has not received and will not be receiving any new consideration from any persons in connection with the issuance of the Exchange Note and the Company's officers and directors have not entered into or given any commitment contemplating the receipt or acceptance of any said consideration arising out of or relating to the issuance of the Exchange Note.

(F)

To my best knowledge and after completing the aforementioned review of the Company's shareholder and corporate records, I am able to certify that Jabro Funding Corp. and any affiliate of Jabro Funding Corp. are not officers, directors, or directly or indirectly, 10% or more stockholders of the Company and none of said persons have had any such status in the 120 days immediately preceding the date of this Certificate.

Jabro Exchange Agreement

HDS International Corp. – Denali Equity Group, LLC

May 5, 2015

(G)

To my best knowledge and after completing the aforementioned review of the Company's shareholder and corporate records, I am able to certify that Denali Equity Group, LLC and its partners and management are not officers, directors, or directly or indirectly, 10% or more stockholders of the Company and none of said persons have had any such status in the 120 days immediately preceding the date of this Certificate.

(H)

The Company represents that it is not a "shell" issuer. If it has previously been a "shell" issuer, the Company represents that at least 12 months have passed since the Company reported Form 10 type information indicating it is no longer a "shell issuer".

(I)

The Company's Board of Directors have approved duly adopted resolutions approving the Irrevocable Instructions to the Company's Stock Transfer Agent attached as Exhibit D to the Exchange Agreement of May 5, 2015.

(J)

I understand the constraints imposed under Rule 144 on those persons who are or may be deemed to be "affiliates," as that term is defined in Rule 144(a)(1) of the 1933 Act.

(K)

I understand that all of the representations set forth in this Certificate will be relied upon by counsel to Denali Equity Group, LLC in connection with the preparation of a legal opinion claiming the exemption provided by Rule 144 of the Securities Act of 1933, as amended.

I hereby affix my signature to this Notarized Certificate and hereby confirm the accuracy of the statements made herein.

Signed: _______________________________________ Date: _____________

Name: Title:

SUBSCRIBED AND SWORN TO BEFORE ME ON THIS ________ DAY OF ____________________2015.

Commission Expires: ______________

____________________________________

Notary Public

Jabro Exchange Agreement

HDS International Corp. – Denali Equity Group, LLC

May 5, 2015

EXHIBIT D

IRREVOCABLE INSTRUCTIONS TO TRANSFER AGENT

HDS INTERNATIONAL CORP.

(As attached.)

Jabro Exchange Agreement

HDS International Corp. – Denali Equity Group, LLC

May 5, 2015

EX-31.1 3 exh31-1.htm SARBANES-OXLEY 302 CERTIFICATION

Exhibit 31.1

SARBANES-OXLEY SECTION 302(a) CERTIFICATION

I, Paul Rauner, certify that:

1.	I have reviewed this Form 10-Q for the period ended March 31, 2015 of HDS International Corp.;

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.	I am 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:

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;

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;

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,

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.	I have disclosed, based on my 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):

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

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:	May 19, 2015	PAUL RAUNER
		Paul Rauner
		Principal Executive Officer and Principal Financial Officer

EX-32.1 4 exh32-1.htm SARBANES-OXLEY 906 CERTIFICATION

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of HDS International Corp. (the "Company") on Form 10-Q for the period ended March 31, 2015 as filed with the Securities and Exchange Commission on the date here of (the "report"), I, Paul Rauner, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 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 this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated this 19^th day of May, 2015.

	PAUL RAUNER
	Paul Rauner
	Chief Executive Officer and Chief Financial Officer