10-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C., 20549

FORM 10-K/A

Amendment No. 1

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

For the fiscal year ended December 31, 2012

OR

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

For the transition period from              to             

Commission File No. __________

BOREAL WATER COLLECTION, INC.

(Exact name of registrant as specified in its charter)

Nevada	98-0453421
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
Boreal Water Collection, Inc.
4496 State Road 42 North
Kiamesha Lake, NY	12751
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: 845-794-0400

Securities registered pursuant to Section 12(g) of the Act:

Title of each class:	Name of each exchange on which registered
Common Stock ($__________ par value)	None

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ¨ Yes x No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ¨ 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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x Yes ¨ No

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.  See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act.  (check one)

Large Accelerated Filer ¨ Accelerated Filer    Non-Accelerated Filer ¨ Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12-b2 of the Exchange Act). ¨ Yes x No

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of December 31, 2012 was approximately $1,000,000.

The number of shares of the Registrant’s common stock outstanding on April 15, 2013 was 310,158,889.

EXPLANATORY NOTE

The Company is filing this Amendment No. 1 to its Annual Report on Form 10-K for the year ended December 31, 2012 (the “Form 10-K”), which was originally filed with the Securities and Exchange Commission on April 16, 2013, for the sole purpose of furnishing the Interactive Data File as Exhibit 101 in accordance with Rule 405 of Regulation S-T. 

No other changes have been made to the Form 10-K. This Amendment does not reflect events that have occurred after the April 16, 2013 filing date of the Form 10-K, or modify or update the disclosures presented therein, except to reflect the amendment described above.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

Audited Financial Statements for our fiscal years 2012 and 2011 are included herewith. Our Articles of Incorporation, with all amendments thereto and our Bylaws are included as exhibits.

Exhibit Index

Exhibit Number	Description
Exhibit 3.(i)*	Articles of Incorporation
Exhibit 3.(ii)*	By-Laws
Exhibit 10.(i)*	Licensing Agreement, Spring Water – Canada
Exhibit 10.(ii)*	Licensing Agreement, Spring Water – Catskill Mountains
Exhibit 10.(iii)*	Licensing Agreement, Saint-Elie and BRWC, June 26, 2009
Exhibit 10.(iv)*	Dowser LLC lawsuit settlement and Exclusive Master Bottling Rights
Exhibit 10.(v)*	Mortgage documents (Wells Fargo)
Exhibit 10.(vi)*	English translation of Exhibit 10.(i)
Exhibit 31.1*	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Sarbanes-Oxley Section 302
Exhibit 31.2*	Certification of Principal Executive Officer pursuant to Sarbanes-Oxley Section 302
Exhibit 32.1*	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Sarbanes-Oxley Section 906
Exhibit 32.2*	Certification of Principal Executive Officer pursuant to Sarbanes-Oxley Section 906
Exhibit 99.1*	Temporary Hardship Exemption Provided by Rule 201
101.INS XBRL	Instance Document **
101.SCH XBRL	Taxonomy Extension Scheme **
101.CAL XBRL	Taxonomy Extension Calculation Linkbase **
101.DEF XBRL	Taxonomy Extension Definition Linkbase **
101.LAB XBRL	Taxonomy Extension Label Linkbase **
101.PRE XBRL	Taxonomy Presentation Linkbase **

________________

* Previously filed.

** Furnished herewith.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: April 22, 2013
	BOREAL WATER COLLECTION, INC.
	By:	/s/ Mrs. Francine Lavoie
		Name:	Mrs. Francine Lavoie
		Title:	President and CEO

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: April 22, 2013
	BOREAL WATER COLLECTION, INC.
	By:	/s/ Mr. Christopher Umecki
		Name:	Mr. Christopher Umecki
		Title:	Vice President - Operations

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8. Income Taxes (Details Narrative) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Income Taxes Details Narrative
NOL carryforwards	$ 1,560,000	$ 1,322,000

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8. Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Income Tax Disclosure [Abstract]

Schedule of Deferred Tax assets and liabilities

	December 31,			December 31,
	2012			2011
Deferred tax assets:
Net operating loss carryforwards	$	1,560,000		$	1,232,000
Other temporary differences		–			–
Deferred tax assets		1,560,000			1,232,000
Less:  Valuation allowance		(1,560,000	)		(1,232,000	)
Net deferred tax asset	$	–		$	–
Deferred tax liabilities:
Difference between book and tax basis of assets acquired in bargain asset purchase	$	(799,690	)	$	(883,185	)
Net deferred tax assets (liabilities)	$	(799,690	)	$	(883,185	)

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3. Going concern

12 Months Ended

Dec. 31, 2012

Going Concern

3. Going concern

Note 3 – Going Concern

The accompanying financial statements have been prepared assuming that the company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. Since January 10, 2006 (date of quasi reorganization), the Company has accumulated a deficit of approximately $3,323,217. Currently, the Company has a minimum cash balance available for the payment of ongoing operating expenses, and its operations is not providing a source of funds from revenues sufficient to cover its operational costs to allow it to continue as a going concern. The continued operations of the Company is F-12 dependent upon generating profits from operations and raising sufficient capital through placement of its common stock or issuance of debt securities, which would enable the Company to carry out its business plan. In the event we do not generate sufficient funds from revenues or financing through the issuance of our common stock or from debt financing, we may be unable to fully implement our business plan and pay our obligations as they become due, any of which circumstances would have a material adverse effect on our business prospects, financial condition and results of operations.

The accompanying financial statements do not include any adjustments that might be required should the company be unable to recover the value of its assets or satisfy its liabilities.

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4. Inventory (Details) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Inventory Details
Raw materials	$ 139,547	$ 131,196
Finished Goods	61,050	5,679
Total	$ 200,597	$ 136,875

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2. Summary of significant accounting principles (Details Narrative) (USD $)	9 Months Ended	12 Months Ended
	Sep. 30, 2011	Dec. 31, 2012
Summary Of Significant Accounting Principles Details Narrative
Stock compensation expense related to consulting services	$ 0	$ 32,000
Major customer revenue percentage	22.00%	28.00%

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5. Property and Equipment (Details) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Property And Equipment Details
Building	$ 2,376,000	$ 2,376,000
Land	324,000	324,000
Leasehold improvements	33,135	23,890
Furniture & fixtures	16,997	16,997
Computer equipment	26,169	26,169
Machinery and equipment	1,048,179	1,045,479
Transportation equipment	54,000	59,300
Other	170,310	170,310
Propety and Equipment, Gross	4,048,790	4,042,145
Less: accumulated depreciation	867,618	635,134
Total	$ 3,181,172	$ 3,407,011

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6. License (Details) (USD $)	Dec. 31, 2012	Dec. 31, 2011
License:
Cost of license	$ 1,022,000	$ 1,022,000
Accumulated amortization	936,833	732,434
License, net	85,166	289,566
Future amortization of license, Year ended:
2013	$ 85,165

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2. Summary of significant accounting principles

12 Months Ended

Dec. 31, 2012

Accounting Policies [Abstract]

2. Summary of significant accounting principles

Note 2 – Summary of Significant Accounting Principles

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities at the date of the financial statements, as well as their related disclosures. Such estimates and assumptions also affect the reported amounts of revenues and expenses during the reporting period. Actual results could significantly differ from those estimates.

Cash and cash equivalents

The Company considers short-term interest bearing investments with initial maturities of three months or less to be cash equivalents. Cash and cash equivalents consist of cash in banks, free credit on investment accounts and money market accounts.

Foreign currency translation

The Company complies with Financial Accounting Standard Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 830, “foreign Currency Maters.” Monetary items are translated at the exchange rate in effect at the balance sheet date; non-monetary items are translated at historical exchange rates. Income and expense items are translated at the average exchange rate for the year. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.

Revenue recognition

In accordance with the FASB ASC Topic 605, “Revenue Recognition,” the Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collectability is reasonably assured. The Company recognizes revenue on the date the product is shipped, whether it is shipped f.o.b. destination or f.o.b. shipping point, due to the short distance and time it takes for the product to reach its final destination. Product is sold to customers on credit terms established on an individual basis. The credit factors used include historical performance, current economic conditions, and the nature and volume of the product. The company offers very few discounts, allowances, coupons, or other similar incentive programs. Net sales are determined after deduction of any promotional or other allowances in accordance with FASB ASC Topic 605-50. The Company offers its customers a right to return product previously shipped, and when the product is actually return, the customer’s account credited for the full value of the returned product. The Company’s normal shipping terms f.o.b. destination, which designates that the Company will pay shipping costs and remain responsible for the goods until the buyer takes possession and f.o.b. shipping point, which indicates that the buyer will pay for shipping costs and takes responsibility for the product when the product is shipped from the Company’s premise. New and certain large customers, which require the purchase of unique materials, are required to pay the Company in advance of production. This helps the Company avoid bad debts and scamming customers. These advances are recorded as deferred revenue. Revenue is recognized when the product is shipped to the customer; the deferred revenue account is then reduced accordingly.

Taxes collected from customers and remitted to governmental authorities are excluded from net sales. Freight-in is included in cost of sales and freight charged to customers is included in sales in the Company’s statements of operations. Delivery and related shipping costs are included in sales and general administrative expenses.

Accounts receivable

The Company evaluates the collectability of its trade accounts receivable based on a number of factors. In circumstances where the Company becomes aware of a specific customer’s inability to meet its financial obligations to the Company, a specific reserve for bad debts is estimated and recorded, which reduces the recognized receivable to the estimated amount the Company believes will ultimately be collected. In addition to specific customer identification of potential bad debts, bad debt charges are recorded based on the Company’s recent loss history and an overall assessment of past due trade accounts receivable outstanding. In accordance with FASB ASC Topic 210-20-45, the Company presents accounts receivable in its balance sheet net of promotional allowances only for customers that it allows net settlement. All other accounts receivable and related promotional allowances are shown on a gross basis.

Property and equipment

Property and equipment is stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Repairs and maintenance are expensed as incurred while betterments and improvements are capitalized. When items are sold or retired, the related cost and accumulated depreciation is removed from the accounts and any gain or loss is included in operations.

Property and equipment (continued)

The Company provides for depreciation and amortization over the following estimated useful lives:

Building	40  years
Land improvements	15  years
Machinery and equipment	5-7  years
Computer equipment	3  years
Office equipment	7  years
Trucks and trailers		5 years

Long-Lived Assets

In accordance with FASB ASC Topic 360 “Property, Plant, and Equipment,” the Company records impairment losses on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts.

Fair Value of Financial Instruments

The fair values of the Company’s assets and liabilities that qualify as financial instruments under FASB ASC Topic 825, “Financial Instruments,” approximate their carrying amounts presented in the accompanying balance sheet at December 31, 2012 and 2011.

Inventories

Inventory is valued at the lower of cost or market, cost being determined by the first-in, first-out (FIFO) method. Inventory costs include direct material, direct labor and a systematic allocation of fixed and variable overhead. Obsolete items are carried at estimated net realizable value.

Prior to December 31,2012, the company charged director labor and variable and fixed production expenses to cost of sales and only included direct material costs in its finished goods inventory. Effective December 31, 2012, the Company now includes in finished goods inventory, in addition to direct material costs, direct labor and applied variable and fixed factory overhead costs. The effect of this change was to increase operating income by $28,307 for the year ended December 31, 2012.

Cost of sales

Cost of sales, includes normal direct costs, such as direct labor, freight, purchases of raw materials (caps, water, bottles, boxes, wrapping, ingredients, etc.), adjusted for inventory at the end of each reporting period. Costs of sales also includes indirect costs, such as salary costs for maintenance personnel, supervisors, operation of the quality control lab, equipment and building maintenance, miscellaneous warehouse expenses, licenses and taxes, and payroll taxes and other benefit costs for direct labor and indirect labor personnel.

Selling and General Administrative Expenses

Selling and general administrative expenses include those type of costs normally included in this functional classification: sales salaries, delivery salaries, repairs, payments made to outside sales representatives, travel related costs, and benefit costs, salaries paid administrative and executive personnel, insurance, benefit costs, office supplies, professional fees, subcontract costs taxes, bank charges, stock-based compensation, postage and shipping, telephone and related communications costs, and similar costs.

Earnings per share

The Company complies with the accounting and disclosure requirements of FASB ASC 260, “Earnings Per Share.” Basic earnings per common share ("EPS") calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation.

Income Taxes

The Company accounts for income taxes in accordance with FASB ASC Topic 740 “Income Taxes”, which requires accounting for deferred income taxes under the asset and liability method. Deferred income tax asset and liabilities are computed for difference between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on the enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce the deferred income tax assets to the amount expected to be realized.

The determination of the Company’s provision for income taxes requires significant judgment, the use of estimates, and the interpretation and application of complex tax laws. Significant judgment is required in assessing the timing and amounts of deductible and taxable items and the probability of sustaining uncertain tax positions. The benefits of uncertain tax positions are recorded in the Company’s consolidated financial statements only after determining a more-likely-than-not probability that the uncertain tax positions will withstand challenge, if any, from tax authorities. When facts and circumstances change, the Company reassesses these probabilities and records any changes in the consolidated financial statements as appropriate. 

In accordance with GAAP, the Company is required to determine whether a tax position of the Company is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. De-recognition of a tax benefit previously recognized could result in the Company recording a tax liability that would reduce stockholders’ equity. This policy also provides guidance on thresholds, measurement, de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition that is intended to provide better consolidated financial statement comparability among different entities. Management’s conclusions regarding this policy may be subject to review and adjustment at a later date based on factors including, but not limited to, on-going analyses of and changes to tax laws, regulations and interpretations thereof. Generally, the tax filings are no longer subject to income tax examinations by major taxing authorities for years before 2009. Any potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with U.S. federal, state and local tax laws.  The Company's management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.

Income Taxes (continued)

Interest and Penalty Recognition on Unrecognized Tax Benefits 

The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in other operational expenses. No interest expense or penalties have been recognized as of and for the year ended December 31, 2012.

Comprehensive Income

The Company complies with FASB ASC Topic 220, “Comprehensive Income,” which establishes rules for the reporting and display of comprehensive income (loss) and its components. FASB ASC Topic 220 requires the Company’ to reflect as a separate component of stockholders’ equity items of comprehensive income.

Stock-Based Compensation 

The Company complies with FASB ASC Topic 718 “Compensation – Stock Compensation,” which establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments. FASB ASC Topic 718 focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions. FASB ASC Topic 718 requires an entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award the requisite service period (usually the vesting period). No compensation costs are recognized for equity instruments for which employees do not render the requisite service. The grant-date fair value of employee share options and similar instruments will be estimated using option-pricing models adjusted for the unique characteristics of those instruments (unless observable market prices for the same or similar instruments are available). If an equity award is modified after the grant date, incremental compensation cost will be recognized in an amount equal to the excess of the fair value of the modified award over the fair value of the original award immediately before the modification. Based on restricted stock awards granted to employees during the years ended December 31, 2012 and 2011, the Company recorded $30,000 and $226,315, respectively, as compensation expense under FASB ASC 718.

Nonemployee awards

The fair value of equity instruments issued to a nonemployee is measured by using the stock price and other measurement assumptions as of the date of either: (i) a commitment for performance by the nonemployee has been reached; or (ii) the counterparty’s performance is complete. Expenses related to nonemployee awards are generally recognized in the same period and in the same period as the Company incurs the related liability for goods and services received. The Company recorded stock compensation of approximately $32,000 and $-0- during the year ended December 31, 2012 and 2011, respectively, related to consulting services.

Valuation of Investments in Securities at Fair Value – Definition and Hierarchy

In accordance with GAAP, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date.

In determining fair value, the Company uses various valuation approaches. In accordance with GAAP, a fair value hierarchy for inputs is used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are those that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company’s assumptions about the inputs market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

The fair value hierarchy is categorized into three levels based on the inputs as follows:

Level 1 – Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities the Company has the ability to access.

Level 2 - Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

The availability of valuation techniques and observable inputs can vary from security to security and is affected by a wide variety of factors including, the type of security, whether the security is new and not yet established in the marketplace, and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Those estimated values do not necessarily represent the amounts that may be ultimately realized due to the occurrence of future circumstances that cannot be reasonably determined.

Because of the inherent uncertainty of valuation, those estimated values may be materially higher or lower than the values that would have been used had a ready market for the securities existed. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for securities categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, fordisclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement.

Fair value is a market-based measure considered from the perspective of a market participant rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, the Company’s own assumptions are set to reflect those that market participants would use in pricing the asset or liability at the measurement date. The Company uses prices and inputs that are current as of the measurement date, including periods of market dislocation. In periods of market dislocation, the observability of prices and inputs may be reduced for many securities. This condition could cause a security to be reclassified to a lower level within the fair value hierarchy.

Valuation Techniques

The Company values investments in securities that are freely tradable and are listed on a national securities exchange or reported on the NASDAQ national market at their last sales price as of the last business day of the year.

Government Bonds

The fair value of sovereign government bonds is generally based on quoted prices in active markets. When quoted prices are not available, fair value is determined based on a valuation model that uses inputs that include interest-rate yield curves, cross-currency-basis index spreads, and country credit spreads similar to the bond in terms of issuer, maturity and seniority.

Certificate of Deposits

The fair values of the bank certificate of deposits are based on the face value of the certificate of deposits.

Recently Adopted Accounting Pronouncements

On June 16, 2011, the FASB issued ASU No. 2011-05, “Presentation of Comprehensive Income (Topic 220),” which requires companies to report total net income, each component of comprehensive income, and total comprehensive income on the face of the income statement, or as two consecutive statements. The components of comprehensive income will not be changed, nor does the ASU affect how earnings per share is calculated or reported. These amendments will be reported retrospectively upon adoption. The adoption of the ASU will be required for the Company’s September 30, 2012 quarterly filing, and is not expected to have a material impact on the Company.

In May 2011, the FASB issued an accounting standard update which works to achieve common fair value measurement and disclosure requirements in GAAP and International Financial Reporting Standards. The update both clarifies the FASB’s intent about the application of existing fair value guidance, and also changes certain principles regarding measurement and disclosure.  The update is effective prospectively and is effective for annual periods beginning after December 15, 2011. Early application is permitted for interim periods beginning after December 15, 2011. The Company is currently evaluating the effect the update will have on its consolidated financial statements.

In January 2010, the FASB issued an accounting standard update on fair value measurements and disclosures. The update requires more robust disclosures about (1) the different classes of assets and liabilities measured at fair value, (2) the valuation techniques and inputs used, (3) the activity in Level 3 fair value measurements, and (4) the transfers between Levels 1, 2, and 3. The new disclosures and clarifications of existing disclosures are effective for interim and annual reporting periods beginning after December 15, 2009; except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. The adoption of this update did not have an effect on the Company’s consolidated financial statements.

Concentration of Credit Risk

The Company maintains its cash and cash equivalents in bank deposit accounts, which, at times may exceed federally insured limits. The Company has not experienced any losses in such accounts. Management believes the Company is not exposed to any significant credit risk related to cash and cash equivalents.

The Company’s two largest customers accounted for approximately 28% and 22% of sales for the years ended December 31, 2012 and December 31, 2011, respectively.

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8. Income Taxes (Details) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Deferred tax assets:
Net operating loss carryforwards	$ 1,560,000	$ 1,232,000
Other temporary differences	0	0
Deferred tax assets	1,560,000	1,232,000
Less: Valuation allowance	(1,560,000)	(1,232,000)
Net deferred tax asset	0	0
Deferred tax liabilities:
Difference between book and tax basis of assets acquired in bargain asset purchase	(799,690)	(883,185)
Net deferred tax assets (liabilities)	$ (799,690)	$ (883,185)

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Balance Sheets (USD $)	Dec. 31, 2012	Dec. 31, 2011
Current assets
Cash	$ 146,373	$ 68,345
Accounts receivable, less allowance for doubtful accounts of $8,219 and $16,105 at December 31, 2012 and December 31, 2011, respectively	90,792	91,327
Accounts receivable-other	13,624	0
Inventory	200,597	136,875
Prepaids	16,841	56,946
Total current assets	468,227	353,493
Property and equipment, net of accumulated depreciation	3,181,172	3,407,011
Other assets
License, net of accumulated amortization	85,166	289,566
Security deposit	4,500	29,840
Total other assets	89,666	319,406
Total assets	3,739,065	4,079,910
Current liabilities
Line of credit	250,000	250,000
Loan payable - property taxes	38,858	85,973
Loan payable - equipment	7,500	55,000
Mortgage payable - bank	1,943,426	1,840,000
Accounts payable and accrued expenses	523,309	321,607
Deferred revenue	0	12,292
Deposit on purchases of common shares	65,000	0
Due to Related Party	284,367	125,412
Total current liabilities	3,112,460	2,690,284
Deferred Tax Liability	799,690	883,185
Long-term portion of loan payable - property taxes	0	38,624
Total Liabilities	3,912,149	3,612,093
Commitments and Contingencies
Stockholders' equity
Common stock, $.001 par value; 600,000,000 shares authorized, 310,158,889 and 292,903,333 shares issued and outstanding at December 31, 2012 and December 31, 2011, respectively	310,159	292,903
Additional paid-in capital	2,839,973	2,675,229
Deficit accumulated since January 10, 2006 in connection with quasi reorganization	(3,323,217)	(2,500,315)
Total stockholders' equity (deficiency)	(173,084)	467,817
Total liabilities and stockholders' equity (deficiency)	$ 3,739,065	$ 4,079,910

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Statements of Cash Flows (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Cash flows from operations
Net loss	$ (822,902)	$ (1,278,827)
Adjustment to reconcile net loss to net cash:
Depreciation and amortization	441,750	440,065
Stock-based compensation	30,000	226,315
Stock issued for services	32,000	0
Allowance for doubtful accounts	(7,886)	0
Gain on sale of fixed asset	(567)	0
Loss on extinguishment of debt	0	445,767
Changes in operating assets and liabilities:
Accounts receivable	8,421	84,633
Accounts receivable-other	(13,624)	0
Inventory	(63,722)	13,896
Prepaid expenses	40,105	(14,594)
Employee advances	0	400
Security deposits refunded	25,340	0
Accounts payable and accrued expenses	201,702	24,811
Deferred tax liability	(83,495)	0
Deferred revenue	(12,292)	2,454
Net cash used for operating activities	(225,170)	(55,080)
Cash Flows from investing activities
Proceeds from sale of fixed asset	3,000	0
Purchases of property and equipment	(13,944)	(21,504)
Net cash provided by (used for) investing activities	(10,944)	(21,504)
Cash flows from financing activities
Issuance of common stock	120,000	143,575
Deposit on purchases of common shares	65,000	0
Related party transactions, net	158,955	130,753
Payments on capital lease obligation	0	(12,292)
Payments against loan payment - property taxes	(85,739)	(75,500)
Payments on equipment loan	(47,500)	(20,000)
Increase (decrease) mortgage payable	103,426	(60,000)
Net cash provided by financing activities	314,142	106,536
Net increase in cash	78,028	29,952
Cash, beginning of period	68,345	38,393
Cash, end of period	146,373	68,345
Supplemental disclosures, cash paid during the year for:
Interest	26,770	70,286
Taxes	1,500
Non-cash investing and financing transactions:
Common stock issued in settlement of debt obligation		157,667
Common stock issued in settlement of unpaid wages		53,315
Issuance of 3,000,000 shares of common stock in connection with stock based compensation	30,000
Issuance of 3,255,556 shares of common stock in connection with professional services rendered	32,000
Conversion of unpaid property taxes from accounts payable to loan payable - County of Sullivan		$ 200,056

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10. Short-Term Debt (Details Narrative) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Short-Term Debt Details Narrative
Property tax agreement	$ 38,000	$ 125,000

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4. Inventory (Tables)

12 Months Ended

Dec. 31, 2012

Inventory Disclosure [Abstract]

Inventory

	2012		2011
Raw materials	$	139,547	$	131,196
Finished Goods		61,050		5,679
Total	$	200,597	$	136,875

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12. Commitments and Contingencies (Details) (USD $)	Dec. 31, 2012
Commitments And Contingencies Details
2013	$ 65,000
2014	65,000
2015	65,000
2016	65,000
2017	65,000
Thereafter	1,421,667
Total	$ 1,746,667

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6. License (Tables)

12 Months Ended

Dec. 31, 2012

Notes to Financial Statements

Schedule of License amortization

	December 31,		December 31,
	2012		2011
License:
Cost of license	$	1,022,000	$	1,022,000
Accumulated amortization		936,833		732,434
License, net	$	85,166	$	289,566
Future amortization of license:
Year ended:
2013	$	85,166

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1. Description of Business and Corporate Information

12 Months Ended

Dec. 31, 2012

Organization, Consolidation and Presentation of Financial Statements [Abstract]

1. Description of Business and Corporate Information

Note 1 – Description of Business and Corporate Information

Organization

Boreal Water Collection, Inc. (“Boreal” or the “Company”) was incorporated in the State of Nevada on August 21, 2001. The Company is trading on the OTC under the symbol (BRWC.PK).

The Company has operated under various names since incorporation, most recently Canadian Blue Gold, Inc. from October 2007 to March 2008, when the name was changed to Boreal Water Collection, Inc.

In April 2009, the Company acquired the assets of A.T. Reynolds and Sons, Inc., operating as Leisure Time Spring Water (“Leisure”) in Kiamesha Lake, New York. The Company is a personalized bottled water company specializing in premium custom bottled water, as a contract packer of bottled water focused on value-added products and services. The Company currently offers three types of water: spring water, distilled water, enhanced water, which is customized with minerals, oxygen, and fluoride, and a fourth type to be added, sparkling water. The Company was originally founded in 1884.

Accounting period

The Company has adopted an annual accounting period of January through December.

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Balance Sheets (Parenthetical) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Statement of Financial Position [Abstract]
Common stock, par value	$ 0.001	$ 0.001
Common stock, Authorized	600,000,000	600,000,000
Common stock, Issued	310,158,889	292,903,333
Common stock, outstanding	310,158,889	292,903,333
Allowance for doubtful accounts	$ 8,219	$ 16,105

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11. Related Party

12 Months Ended

Dec. 31, 2012

Related Party Transactions [Abstract]

11. Related Party

Note 11 – Related Party

On May 10, 2011, the Company issued 5,331,494 shares of its $0.001 par value common stock to its president and CEO in settlement of unpaid wages from the year 2010.

At December 31, 2012 and 2011, the Company owed a related party approximately $284,000 and $125,000, respectively, for ongoing operating and purchase transactions with the related party company.

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Document and Entity Information (USD $)	12 Months Ended
	Dec. 31, 2012	Apr. 15, 2013
Document And Entity Information
Entity Registrant Name	Boreal Water Collection Inc.
Entity Central Index Key	0001538333
Document Type	10-K
Document Period End Date	Dec. 31, 2012
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Public Float	$ 1,000,000
Entity Common Stock, Shares Outstanding		310,158,889
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2012

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12. Commitments and Contingencies

12 Months Ended

Dec. 31, 2012

Commitments and Contingencies Disclosure [Abstract]

12. Commitments and Contingencies

Note 12 – Commitments and Contingencies

The Company is party to a forty year exclusive agreement (“Agreement”), with an original effective date of November 1, 1995, modified on April 25, 2000, to reduce certain minimum guarantee and compensation provisions of the Agreement. The Agreement provides that the Company shall draw not less than seven million (7,000,000) gallons or water from certain springs on an annual basis. During the remainder of the first twenty-five (25) years of the Agreement, the Company pays one cent ($0.01 per gallon for the first five million (5,000,000) gallons of water drawn and three-fourth of one cent ($0.0075) for all gallonage thereafter, but not less than $65,000 per year regardless of the actual gallonage drawn, payable in monthly installments of $5,416. In event that drought or other conditions reduce the capacity of the springs, so that the springs cannot meet the minimum guarantee, the minimum guarantee shall bereduced in accordance with an agreed to formula. For the last fifteen years of the agreement, which expires October 31, 2035, the Agreement provides that the Company shall pay one and one-quarter cents ($0.0125) per gallon for the first five million (5,000,000) gallons and for gallons thereafter the Company shall pay one cent ($0.01) per gallon, with an annual minimum of $82,500, payable in monthly installments of $6,875. The Company is responsible for all maintenance and repairs, utilities, and capital improvement costs incurred in connection with the water collection facility, which includes storage tanks, a pump building, piping, and other related equipment necessary for and related to the harvesting of water from the springs. The Agreement also provides that the owner of springs may sell water from the springs under certain conditions, provided, however, that the charge per gallon sold shall not be less than the price per gallon paid by the Company, with such proceeds divided equally between the Company and the owner. The Company has an option of first refusal in the event that the owner enters into an agreement for the sale of all or a portion of the real property, which includes the springs located on the real property. Upon execution of a valid binding contract between the owner and a third party, which contract shall be made subject to the terms of the option, the owner shall provide the Company a copy of the contract and it shall have thirty (30) days from date of delivery or mailing within which to exercise its option by delivering to the owner a check in the amount of the contract deposit, in which event the owner and the Company shall be bound by the contract sale.

The future minimum payments due under the terms of the Agreement are as follows:

Years Ending
December 31,
	2013	$	65,000
	2014		65,000
	2015		65,000
	2016		65,000
	2017		65,000
	Thereafter		1,421,667
		$	1,746,667

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Statements of Operations (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Income Statement [Abstract]
Sales	$ 2,680,429	$ 2,658,608
Cost of sales	2,142,368	1,972,618
Gross profit	538,061	685,990
Operating Expenses
Selling and general and administrative	817,342	979,760
Depreciation and amortization	441,751	440,065
Total expenses	1,259,093	1,419,825
Operating loss	(721,032)	(733,835)
Other income (expense)
Interest expense - net	(127,532)	(99,225)
Rental income	10,600	0
Gain on sale of equipment	567	0
Total other expense	(116,365)	(99,225)
Loss before income taxes	(837,397)	(833,060)
Provision for income taxes (benefit)	(81,995)	0
Loss before extraordinary items	(755,402)	(833,060)
Extraordinary items:
Litigation settlement	(75,000)	0
Gain (loss) on extinguishment of debt	7,500	(445,767)
Net loss	$ (822,902)	$ (1,278,827)
Net loss per weighted share, basic and fully diluted
Loss before extraordinary items	$ 0.00	$ 0.00
Extraordinary items		$ 0.00
Net loss per weighted share, basic and fully diluted	$ 0.00	$ 0.00
Weighted average number of common shares outstanding, basic and fully diluted	303,757,467	274,920,020

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6. License

12 Months Ended

Dec. 31, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

6. License

Note 6 – License

On December 17, 2007, the Company entered into an exclusive licensing agreement (“Agreement”) with a Canadian bottle water company to distribute, sell, advertise, promote, and market under private label, its products in the United States., with an original cost of $2.0 million. The Agreement was subsequently revised and replaced with a new Agreement on June 16, 2008 at a cost of $1.022 million. The Company’s president and CEO is the principal shareholder of the Canadian company. The license is being amortized over a five year period from June 16, 2008.

At December 31, 2012 and 2011, the unamortized balance is as follows: 

	December 31,		December 31,
	2012		2011
License:
Cost of license	$	1,022,000	$	1,022,000
Accumulated amortization		936,833		732,434
License, net	$	85,166	$	289,566
Future amortization of license:
Year ended:
2013	$	85,166

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5. Property and Equipment

12 Months Ended

Dec. 31, 2012

Property, Plant and Equipment [Abstract]

5. Property and Equipment

Note 5 – Property and Equipment

Equipment consists of the following categories at December 31, 2012 and December 31, 2011:

	2012		2011
Building	$	2,376,000	$	2,376,000
Land		324,000		324,000
Leasehold improvements		33,135		23,890
Furniture & fixtures		16,997		16,997
Computer equipment		26,169		26,169
Machinery and equipment		1,048,179		1,045,479
Transportation equipment		54,000		59,300
Other		170,310		170,310
		4,048,790		4,042,145
Less: accumulated depreciation		867,618		635,134
Total	$	3,181,172	$	3,407,011

Depreciation expense for the year ended December 31, 2012 and 2011 totaled $237,350 and $235,664, respectively.

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5. Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2012

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

	2012		2011
Building	$	2,376,000	$	2,376,000
Land		324,000		324,000
Leasehold improvements		33,135		23,890
Furniture & fixtures		16,997		16,997
Computer equipment		26,169		26,169
Machinery and equipment		1,048,179		1,045,479
Transportation equipment		54,000		59,300
Other		170,310		170,310
		4,048,790		4,042,145
Less: accumulated depreciation		867,618		635,134
Total	$	3,181,172	$	3,407,011

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13. Litigation

12 Months Ended

Dec. 31, 2012

Litigation

13. Litigation

Note 13 – Litigation

On April 20, 2009, Dowser, LLC (“Dowser”) commenced action against the Company and Boreal Water, Inc., as defendants in the United States District Court for the Southern District of New York, alleging breach of contract arising out of the Company’s purchase of certain assets in the Chapter 11 Bankruptcy Case in Re A.T. Reynolds & Sons, Inc. Case No. 08-37739 (cgm), pending in the United States Bankruptcy Court, Southern District of New York, Poughkeepsie Division (“Reynolds Bankruptcy”). As alleged in its complaint, Dowser alleged “actual and consequential damages in the amount to be determined at trial, but believe to exceed $3.5 million plus interest.

On June 12, 2009, the Company submitted its answer in the Dowser Action, denying liability and asserting various affirmative defenses, including, among other things, failure to condition precedent and the Bankruptcy Court Orders regarding the sale of the assets to the Company.

In 2012, the parties to this action reached an out of court settlement, which provided that the Company would make a cash payment to Dowser in the amount of $75,000 and also grant Dowser exclusive master bottling rights to bottle Leisure Time water in 3, 5, and 6 gallon refillable containers. The $75,000 settlement payment is shown as an extraordinary item on the statement of operations.

A “Summons with Notice” (but not a Complaint), naming BRWC, Mrs. Lavoie and Mr. Cortellazi, who was a Canadian citizen trying to buy controlling interest in the Company during 2011, as defendants, was filed on March 14, 2012 in the Sullivan County, New York Supreme Court (and later served on BRWC and Mrs. Lavoie) by counsel for plaintiffs (the proposed CEO and former Boreal employee, who were brought into the negotiations by Mr. Cortellazi, to assist him in his effort to buy controlling interest of the Company from Mrs. Lavoie). The index number of the court filing is 2012-676. The Company and Mrs. Lavoie have retained counsel.

A Complaint has since been served, seeking damages totaling $53,600 plus $15,000 in attorney’s fees, alleging violations of Article 11 of New York’s General Obligations Law. Defendants BRWC and Mrs. Lavoie have filed an Answer and Counterclaims, dated September 24, 2012. Counterclaims have been filed against Cortellazi, who has admitted his role in the scheme, and others for fraud, defamation and slander, and damages, including punitive damages and attorney’s fees. See Statement of Changes in Stockholders’ Equity for reference to 3.0 million shares not previously recognized.

The Company may be defendant in various suits and claims that arise in the normal course of business. In the opinion of management, the ultimate disposition of these other suits and claims will have no material effect on the Company’s financial position, liquidity, or results of operations.

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9. Line of Credit

12 Months Ended

Dec. 31, 2012

Line Of Credit

9. Line of Credit

Note 9 – Line of Credit

During 2009, the Company obtained a line of credit with a commercial bank in the amount of $250,000. The line of credit is secured by the Company’s accounts receivable and inventory. At December 31, 2012, the Company owed $250,000 against the line of credit at an annual interest rate of 5.25%.

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7. Stockholders' Equity

12 Months Ended

Dec. 31, 2012

Equity [Abstract]

7. Stockholders' Equity

Note 7 – Stockholders’ Equity

On April 25, 2011, the Company issued 5,000,000 shares of its $0.001 par value common stock in settlement of a debt obligation.

On May 9, 2011, the Company issued 3.4 million shares of its $0.001 par value common stock to its employees as bonuses. We valued these shares at $0.05 per share.

On May 10, 2011, the Company issued 10.0 million shares of its $0.001 par value common stock to a third party investor for a cash payment of $143,575.

On May 10, 2011, the Company issued 5,331,494 shares of its $0.001 par value common stock to its president and CEO in settlement of unpaid wages. We valued these shares at $0.01 per share.

On May 23, 2011, the Company issued 5,952,500 shares of its $0.001 par value common stock in settlement of a debt obligation.

On September 1, 2011, the Company issued 10,766,700 shares of its $0 .001 par value common stock in settlement of a debt obligation.

On December 5, 2011, the Company issued 300,000 shares of its $0.001 par value common stock for services rendered. We valued these shares at $0.01 per share.

On January 23, 2012, The Company issued 3.0 million shares of its $0.001 par value common stock to its employees as bonuses. We valued these shares at $0.01 per share.

On January 23, 2012, the Company issued 1.8 million shares of its $0.001 par value common stock for services rendered. We valued these shares at $0.01 per share.

On May 1, 2012, the Company issued 955,556 shares of its $0.001 par value common stock for services rendered. We valued these shares at $0.01 per share.

On May 7, 2012, the Company issued 1.5 million shares of its $0.001 par value common stock to a third party investor for a cash payment of $30,000.

On June 11, 2012, the Company issued 500,000 shares of its $0.001 par value common stock for services rendered. We valued these shares at $0.01 per share.

On July 12, 2012, the Company issued 6.5 million shares of its $0.001 par value common stock to a third party investor for a cash payment of $90,000.

On September 30, 2012, the Company recognized the issuance to an entity of its $0.001 par value common stock, issued at a prior date, but not previously recognized, because the shares were obtained from the Company in an illegal manner. See Note 13 for further discussion.

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8. Income Taxes

12 Months Ended

Dec. 31, 2012

Income Tax Disclosure [Abstract]

8. Income Taxes

Note 8 – Income Taxes

At December 31, 2012, the Company had approximately $3.9 million of net operating losses (“NOL”) carry-forwards for federal and state income purposes. These losses are available for future years and expire through 2032. Utilization of these losses may be severely or completely limited if the Company undergoes an ownership change pursuant to Internal Revenue Code Section 382.

The tax effects of temporary differences and carry forwards that give rise to deferred tax assets and liabilities consist of the following:

	December 31,			December 31,
	2012			2011
Deferred tax assets:
Net operating loss carryforwards	$	1,560,000		$	1,232,000
Other temporary differences		–			–
Deferred tax assets		1,560,000			1,232,000
Less:  Valuation allowance		(1,560,000	)		(1,232,000	)
Net deferred tax asset	$	–		$	–
Deferred tax liabilities:
Difference between book and tax basis of assets acquired in bargain asset purchase	$	(799,690	)	$	(883,185	)
Net deferred tax assets (liabilities)	$	(799,690	)	$	(883,185	)

The Company has taken a full valuation allowance against the other timing differences and the deferred asset attributable to the NOL carry-forwards of approximately $1,560,000 and $1,232,000 at December 31, 2012 and 2011, respectively, due to the uncertainty of realizing the future tax benefits.

The Company did not pay any income taxes during the years ended December 31, 2012 or 2011.

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10. Short-Term Debt

12 Months Ended

Dec. 31, 2012

Debt Disclosure [Abstract]

10. Short-Term Debt

Note 10 – Short-Term Debt

In April 2009, the Company acquired the assets of A.T. Reynolds and Sons, Inc. (“Reynolds”), operating as Leisure Time Spring Water (“Leisure”) in Kiamesha Lake, New York (See Note 12). In connection with the acquisition of these assets, the Company assumed a $1.9 million mortgage that was due a commercial bank (“Bank”) against a building and land, included as part of the total assets acquired from Reynolds. On April 3, 2009, the Company entered into a Mortgage Consolidation, Modification and Extension Agreement with the Bank. The Company was required to make interest payments only through April 3, 2011, at which time the entire principal balance was due the Bank. Monthly interest is based on 90-day Libor at 4.50%. The $1.9 million mortgage is personally guaranteed by the Company’s chief executive officer. The balance due against this mortgage at December 31, 2012 was $1,943,426. The balance due the Bank on April 3, 2011 was not paid putting the Company in default under the terms of the original agreement. The Company entered into a Forbearance Agreement (“Agreement”) on May 31, 2011, and upon expiration of that Agreement, the Company entered into an extension to the Agreement on October 3, 2011, which extended the Agreement period until April 3, 2012. On April 3, 2012, the Agreement period was further extended until October 3, 2012. On October 3, 2012 the forbearance agreement expired and the company is currently is in default its mortgage obligation. The Company is presently negotiating with a finance company to pay back the mortgage that is due to Wells Fargo Bank. There is no guarantee or assurance we will be able to close any loan arrangement to repay our current mortgage with Wells Fargo Bank.

Under the terms of the May 31, 2011 Agreement, the Company was required to make monthly principal payments of $15,000 plus all accrued and unpaid interest on the debt obligation. The Company was also assessed a forbearance fee of $19,000, and it was required to provide evidence acceptable to the commercial bank that the Company and Sullivan County had agreed to a payment plan for real estate taxes that were in arrears as of the date of the Agreement. The interest rate based on 90-day Libor rate of 4.0% did not change as a result of the Forbearance Agreement. All loan documents and the Security Agreement remained in full force and effect in accordance with the original terms. Under the terms of the October 3, 2011 Agreement, the commercial bank waived the $15,000 monthly principal payments, but not the interest payments. An additional $19,000 forbearance fee was assessed. All other terms of the original note obligation and the May 31, 2011 Agreement remained in full force and effect. The interest rate based on 90-day Libor rate of 4.625% did not change as a result of this Forbearance Agreement. Under the terms of the April 3, 2012 Agreement, the commercial bank assessed an additional forbearance fee of $19,000, continued to waive the monthly $15,000 principal payment, but not the monthly interest payments. All other terms of the original note obligation and the May 31, 2011 Agreement remained in full force and effect. The 90-day Libor rate of 4.5% did not change as a result of this Forbearance Agreement.

On October 24, 2011, the Company purchased distiller equipment for $75,000. The sale contract provided for a deposit of $5,000, with an additional $5,000 on November 1, 2011 and the balance of $65,000 to be paid on or before November 16, 2011. At December 31, 2012 and 2011, the Company owed a total of $7,500 and 55,000, respectively, putting the Company in default under terms of the contract. During November and December 2012, the Company successfully negotiated a reduction in the amount owed at December 31, 2012 from $15,000 to $7,500 and this reduced amount was paid subsequent to December 31, 2012.

On May 31, 2011, the Company entered into a payment arrangement (“Agreement”) with the County of Sullivan for payment of past due property taxes. The Agreement provides for a down payment of approximately $30,000, which was equal to 15.0% of the eligible delinquent taxes, with the balance of $192,153 due in 24 monthly payments of principal and interest of $8,006. The $30,000 down payment was paid on May 31, 2011. As part of the Agreement, the County of Sullivan will obtain a Judgment of Foreclosure, however, the County of Sullivan acknowledges that it will not take title of the property, unless and until the Company is in default and breached the terms within the Agreement, and further it will not take title sooner than two years from the date of the levy of the earliest outstanding lien. At December 31, 2012 and 2011, the balance due against this note was approximately $38,000 and $125,000, respectively.

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9. Line of Credit (Details Narrative) (USD $)	12 Months Ended
	Dec. 31, 2012
Line Of Credit Details Narrative
Amount owed against line of credit	$ 250,000
Interest rate on line of credit	5.25%

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2. Summary of significant accounting principles (Tables)

12 Months Ended

Dec. 31, 2012

Summary Of Significant Accounting Principles Tables

Schedule of useful lives for property and equipment

Building	40  years
Land improvements	15  years
Machinery and equipment	5-7  years
Computer equipment	3  years
Office equipment	7  years
Trucks and trailers		5 years

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12. Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2012

Commitments and Contingencies Disclosure [Abstract]

Schedule of minimum payments due under the agreement

Years Ending
December 31,
	2013	$	65,000
	2014		65,000
	2015		65,000
	2016		65,000
	2017		65,000
	Thereafter		1,421,667
		$	1,746,667

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Statements of Changes in Shareholders Equity (USD $)	Common Stock	Additional Paid-In Capital	Retained Earnings	Total
Beginning Balance, Amount at Dec. 31, 2010	$ 252,152	$ 1,742,656	$ (1,221,488)	$ 773,320
Beginning Balance, Shares at Dec. 31, 2010	252,152,639
Common shares issued in settlement of debt obligation, Shares	21,719,200
Common shares issued in settlement of debt obligation, Amount	21,720	135,947	0	157,667
Stock-based compensation, Shares	3,400,000
Stock-based compensation, Amount	3,400	166,600		170,000
Common shares issued for cash, Shares	10,000,000
Common shares issued for cash, Amount	10,000	133,575		143,575
Common shares issued in settlement of unpaid wages, Shares	5,331,494
Common shares issued in settlement of unpaid wages, Amount	5,331	47,984		53,315
Common shares issued for services, Shares	300,000
Common shares issued for services, Amount	300	2,700		3,000
Extinguishment of debt		445,767		445,767
Net loss			(1,278,827)	(1,278,827)
Ending Balance, Amount at Dec. 31, 2011	292,903	2,675,229	(2,500,315)	467,817
Ending Balance, Shares at Dec. 31, 2011	292,903,333
Stock-based compensation, Shares	3,000,000
Stock-based compensation, Amount	3,000	27,000		30,000
Common shares issued for cash, Shares	8,000,000
Common shares issued for cash, Amount	8,000	112,000		120,000
Common shares issued for services, Shares	3,255,556
Common shares issued for services, Amount	3,256	28,744		32,000
Common shares issued, not previously recognized, Shares	3,000,000
Common shares issued, not previously recognized, Amount	3,000	(3,000)		0
Net loss			(822,902)	(822,902)
Ending Balance, Amount at Dec. 31, 2012	$ 310,159	$ 2,839,973	$ (3,323,217)	$ (173,084)
Ending Balance, Shares at Dec. 31, 2012	310,158,889

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4. Inventory

12 Months Ended

Dec. 31, 2012

Inventory Disclosure [Abstract]

4. Inventory

Note 4 – Inventory

Inventory consists of the following categories:

	2012		2011
Raw materials	$	139,547	$	131,196
Finished Goods		61,050		5,679
Total	$	200,597	$	136,875

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2. Summary of significant accounting principles (Details)	12 Months Ended
	Dec. 31, 2012
Building
Useful life of Property and Equipment	40 years
Land Improvement
Useful life of Property and Equipment	15 years
Machinery and Equipment, Minimum
Useful life of Property and Equipment	5 years
Machinery and Equipment, Maximum
Useful life of Property and Equipment	7 years
Computer Equipment
Useful life of Property and Equipment	3 years
Office Equipment
Useful life of Property and Equipment	7 years
Trucks and Trailers
Useful life of Property and Equipment	5 years

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2. Summary of significant accounting principles (Policies)

12 Months Ended

Dec. 31, 2012

Accounting Policies [Abstract]

Use of estimates

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities at the date of the financial statements, as well as their related disclosures. Such estimates and assumptions also affect the reported amounts of revenues and expenses during the reporting period. Actual results could significantly differ from those estimates.

Cash and cash equivalents

Cash and cash equivalents

The Company considers short-term interest bearing investments with initial maturities of three months or less to be cash equivalents. Cash and cash equivalents consist of cash in banks, free credit on investment accounts and money market accounts.

Foreign currency translation

Foreign currency translation

The Company complies with Financial Accounting Standard Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 830, “foreign Currency Maters.” Monetary items are translated at the exchange rate in effect at the balance sheet date; non-monetary items are translated at historical exchange rates. Income and expense items are translated at the average exchange rate for the year. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.

Revenue recognition

Revenue recognition

In accordance with the FASB ASC Topic 605, “Revenue Recognition,” the Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collectability is reasonably assured. The Company recognizes revenue on the date the product is shipped, whether it is shipped f.o.b. destination or f.o.b. shipping point, due to the short distance and time it takes for the product to reach its final destination. Product is sold to customers on credit terms established on an individual basis. The credit factors used include historical performance, current economic conditions, and the nature and volume of the product. The company offers very few discounts, allowances, coupons, or other similar incentive programs. Net sales are determined after deduction of any promotional or other allowances in accordance with FASB ASC Topic 605-50. The Company offers its customers a right to return product previously shipped, and when the product is actually return, the customer’s account credited for the full value of the returned product. The Company’s normal shipping terms f.o.b. destination, which designates that the Company will pay shipping costs and remain responsible for the goods until the buyer takes possession and f.o.b. shipping point, which indicates that the buyer will pay for shipping costs and takes responsibility for the product when the product is shipped from the Company’s premise. New and certain large customers, which require the purchase of unique materials, are required to pay the Company in advance of production. This helps the Company avoid bad debts and scamming customers. These advances are recorded as deferred revenue. Revenue is recognized when the product is shipped to the customer; the deferred revenue account is then reduced accordingly.

Taxes collected from customers and remitted to governmental authorities are excluded from net sales. Freight-in is included in cost of sales and freight charged to customers is included in sales in the Company’s statements of operations. Delivery and related shipping costs are included in sales and general administrative expenses.

Accounts receivable

Accounts receivable

The Company evaluates the collectability of its trade accounts receivable based on a number of factors. In circumstances where the Company becomes aware of a specific customer’s inability to meet its financial obligations to the Company, a specific reserve for bad debts is estimated and recorded, which reduces the recognized receivable to the estimated amount the Company believes will ultimately be collected. In addition to specific customer identification of potential bad debts, bad debt charges are recorded based on the Company’s recent loss history and an overall assessment of past due trade accounts receivable outstanding. In accordance with FASB ASC Topic 210-20-45, the Company presents accounts receivable in its balance sheet net of promotional allowances only for customers that it allows net settlement. All other accounts receivable and related promotional allowances are shown on a gross basis.

Property and equipment

Property and equipment

Property and equipment is stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Repairs and maintenance are expensed as incurred while betterments and improvements are capitalized. When items are sold or retired, the related cost and accumulated depreciation is removed from the accounts and any gain or loss is included in operations.

Long-Lived Assets

Long-Lived Assets

In accordance with FASB ASC Topic 360 “Property, Plant, and Equipment,” the Company records impairment losses on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The fair values of the Company’s assets and liabilities that qualify as financial instruments under FASB ASC Topic 825, “Financial Instruments,” approximate their carrying amounts presented in the accompanying balance sheet at December 31, 2012 and 2011.

Inventories

Inventories

Inventory is valued at the lower of cost or market, cost being determined by the first-in, first-out (FIFO) method. Inventory costs include direct material, direct labor and a systematic allocation of fixed and variable overhead. Obsolete items are carried at estimated net realizable value.

Prior to December 31,2012, the company charged director labor and variable and fixed production expenses to cost of sales and only included direct material costs in its finished goods inventory. Effective December 31, 2012, the Company now includes in finished goods inventory, in addition to direct material costs, direct labor and applied variable and fixed factory overhead costs. The effect of this change was to increase operating income by $28,307 for the year ended December 31, 2012.

Cost of sales

Cost of sales

Cost of sales, includes normal direct costs, such as direct labor, freight, purchases of raw materials (caps, water, bottles, boxes, wrapping, ingredients, etc.), adjusted for inventory at the end of each reporting period. Costs of sales also includes indirect costs, such as salary costs for maintenance personnel, supervisors, operation of the quality control lab, equipment and building maintenance, miscellaneous warehouse expenses, licenses and taxes, and payroll taxes and other benefit costs for direct labor and indirect labor personnel.

Selling and General Administrative Expenses

Selling and General Administrative Expenses

Selling and general administrative expenses include those type of costs normally included in this functional classification: sales salaries, delivery salaries, repairs, payments made to outside sales representatives, travel related costs, and benefit costs, salaries paid administrative and executive personnel, insurance, benefit costs, office supplies, professional fees, subcontract costs taxes, bank charges, stock-based compensation, postage and shipping, telephone and related communications costs, and similar costs.

Earnings per share

Earnings per share

The Company complies with the accounting and disclosure requirements of FASB ASC 260, “Earnings Per Share.” Basic earnings per common share ("EPS") calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation.

Income Taxes

Income Taxes

The Company accounts for income taxes in accordance with FASB ASC Topic 740 “Income Taxes”, which requires accounting for deferred income taxes under the asset and liability method. Deferred income tax asset and liabilities are computed for difference between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on the enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce the deferred income tax assets to the amount expected to be realized.

The determination of the Company’s provision for income taxes requires significant judgment, the use of estimates, and the interpretation and application of complex tax laws. Significant judgment is required in assessing the timing and amounts of deductible and taxable items and the probability of sustaining uncertain tax positions. The benefits of uncertain tax positions are recorded in the Company’s consolidated financial statements only after determining a more-likely-than-not probability that the uncertain tax positions will withstand challenge, if any, from tax authorities. When facts and circumstances change, the Company reassesses these probabilities and records any changes in the consolidated financial statements as appropriate. 

In accordance with GAAP, the Company is required to determine whether a tax position of the Company is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. De-recognition of a tax benefit previously recognized could result in the Company recording a tax liability that would reduce stockholders’ equity. This policy also provides guidance on thresholds, measurement, de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition that is intended to provide better consolidated financial statement comparability among different entities. Management’s conclusions regarding this policy may be subject to review and adjustment at a later date based on factors including, but not limited to, on-going analyses of and changes to tax laws, regulations and interpretations thereof. Generally, the tax filings are no longer subject to income tax examinations by major taxing authorities for years before 2009. Any potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with U.S. federal, state and local tax laws.  The Company's management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.

Interest and Penalty Recognition on Unrecognized Tax Benefits 

The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in other operational expenses. No interest expense or penalties have been recognized as of and for the year ended December 31, 2012.

Comprehensive Income

Comprehensive Income

The Company complies with FASB ASC Topic 220, “Comprehensive Income,” which establishes rules for the reporting and display of comprehensive income (loss) and its components. FASB ASC Topic 220 requires the Company’ to reflect as a separate component of stockholders’ equity items of comprehensive income.

Stock-Based Compensation

Stock-Based Compensation 

The Company complies with FASB ASC Topic 718 “Compensation – Stock Compensation,” which establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments. FASB ASC Topic 718 focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions. FASB ASC Topic 718 requires an entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award the requisite service period (usually the vesting period). No compensation costs are recognized for equity instruments for which employees do not render the requisite service. The grant-date fair value of employee share options and similar instruments will be estimated using option-pricing models adjusted for the unique characteristics of those instruments (unless observable market prices for the same or similar instruments are available). If an equity award is modified after the grant date, incremental compensation cost will be recognized in an amount equal to the excess of the fair value of the modified award over the fair value of the original award immediately before the modification. Based on restricted stock awards granted to employees during the years ended December 31, 2012 and 2011, the Company recorded $30,000 and $226,315, respectively, as compensation expense under FASB ASC 718.

Nonemployee awards

Nonemployee awards

The fair value of equity instruments issued to a nonemployee is measured by using the stock price and other measurement assumptions as of the date of either: (i) a commitment for performance by the nonemployee has been reached; or (ii) the counterparty’s performance is complete. Expenses related to nonemployee awards are generally recognized in the same period and in the same period as the Company incurs the related liability for goods and services received. The Company recorded stock compensation of approximately $32,000 and $-0- during the year ended December 31, 2012 and 2011, respectively, related to consulting services.

Valuation of Investments in Securities at Fair Value - Definition and Hierarchy

Valuation of Investments in Securities at Fair Value – Definition and Hierarchy

In accordance with GAAP, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date.

In determining fair value, the Company uses various valuation approaches. In accordance with GAAP, a fair value hierarchy for inputs is used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are those that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company’s assumptions about the inputs market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

The fair value hierarchy is categorized into three levels based on the inputs as follows:

Level 1 – Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities the Company has the ability to access.

Level 2 - Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

The availability of valuation techniques and observable inputs can vary from security to security and is affected by a wide variety of factors including, the type of security, whether the security is new and not yet established in the marketplace, and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Those estimated values do not necessarily represent the amounts that may be ultimately realized due to the occurrence of future circumstances that cannot be reasonably determined.

Because of the inherent uncertainty of valuation, those estimated values may be materially higher or lower than the values that would have been used had a ready market for the securities existed. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for securities categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, fordisclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement.

Fair value is a market-based measure considered from the perspective of a market participant rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, the Company’s own assumptions are set to reflect those that market participants would use in pricing the asset or liability at the measurement date. The Company uses prices and inputs that are current as of the measurement date, including periods of market dislocation. In periods of market dislocation, the observability of prices and inputs may be reduced for many securities. This condition could cause a security to be reclassified to a lower level within the fair value hierarchy.

Valuation Techniques

The Company values investments in securities that are freely tradable and are listed on a national securities exchange or reported on the NASDAQ national market at their last sales price as of the last business day of the year.

Government Bonds

Government Bonds

The fair value of sovereign government bonds is generally based on quoted prices in active markets. When quoted prices are not available, fair value is determined based on a valuation model that uses inputs that include interest-rate yield curves, cross-currency-basis index spreads, and country credit spreads similar to the bond in terms of issuer, maturity and seniority.

Certificate of Deposits

Certificate of Deposits

The fair values of the bank certificate of deposits are based on the face value of the certificate of deposits.

Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

On June 16, 2011, the FASB issued ASU No. 2011-05, “Presentation of Comprehensive Income (Topic 220),” which requires companies to report total net income, each component of comprehensive income, and total comprehensive income on the face of the income statement, or as two consecutive statements. The components of comprehensive income will not be changed, nor does the ASU affect how earnings per share is calculated or reported. These amendments will be reported retrospectively upon adoption. The adoption of the ASU will be required for the Company’s September 30, 2012 quarterly filing, and is not expected to have a material impact on the Company.

In May 2011, the FASB issued an accounting standard update which works to achieve common fair value measurement and disclosure requirements in GAAP and International Financial Reporting Standards. The update both clarifies the FASB’s intent about the application of existing fair value guidance, and also changes certain principles regarding measurement and disclosure.  The update is effective prospectively and is effective for annual periods beginning after December 15, 2011. Early application is permitted for interim periods beginning after December 15, 2011. The Company is currently evaluating the effect the update will have on its consolidated financial statements.

In January 2010, the FASB issued an accounting standard update on fair value measurements and disclosures. The update requires more robust disclosures about (1) the different classes of assets and liabilities measured at fair value, (2) the valuation techniques and inputs used, (3) the activity in Level 3 fair value measurements, and (4) the transfers between Levels 1, 2, and 3. The new disclosures and clarifications of existing disclosures are effective for interim and annual reporting periods beginning after December 15, 2009; except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. The adoption of this update did not have an effect on the Company’s consolidated financial statements.

Concentration of Credit Risk

Concentration of Credit Risk

The Company maintains its cash and cash equivalents in bank deposit accounts, which, at times may exceed federally insured limits. The Company has not experienced any losses in such accounts. Management believes the Company is not exposed to any significant credit risk related to cash and cash equivalents.

The Company’s two largest customers accounted for approximately 28% and 22% of sales for the years ended December 31, 2012 and December 31, 2011, respectively.