Biopower Operations Corp - Quarter Report: 2013 May (Form 10-Q)

U. S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended May 31, 2013

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

For the transition period from ________________ to __________________

Commission File Number: 333-172139

BioPower Operations Corporation

(Exact name of registrant as specified in its charter)

Nevada		27-4460232
(State or other jurisdiction of		(IRS Employer
incorporation or organization)		Identification No.)

1000 Corporate Drive, Suite 200, Fort Lauderdale, Florida 33334

(Address of principal executive offices)

Issuer’s telephone number, including area code: (954) 202-6660

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

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

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

Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer ¨ (Do not check if a smaller reporting company)	Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨ No ¨

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

As of July 22, 2013, the registrant had 90,280,000 shares of common stock, par value $0.0001 per share, outstanding.

BIOPOWER OPERATIONS CORPORATION

(A Developmental Stage Company)

CONTENTS

		Page
PART I.	FINANCIAL INFORMATION

ITEM 1.	FINANCIAL STATEMENTS	3

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	21

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	25

ITEM 4.	CONTROLS AND PROCEDURES	25

PART II.	OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDINGS	26

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	26

ITEM 3.	DEFAULT UPON SENIOR SECURITIES	26

ITEM 4.	MINE SAFETY DISCLOSURES	26

ITEM 5.	OTHER INFORMATION	26

ITEM 6.	EXHIBITS	26

SIGNATURES		27

Exhibit 31.1	Certification Pursuant to Section 302 of the Sarbanes Oxley Act

Exhibit 32.1	Certification Pursuant to Section 906 of the Sarbanes Oxley Act

CONTENTS

	Page

Consolidated Balance Sheets as of May 31, 2013 (unaudited) and November 30, 2012	4

Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and six months ended May 31, 2013 and 2012, and from September 13, 2010 (Inception) to May 31, 2013 (unaudited)	5

Consolidated Statement of Stockholders’ Deficit from September 13, 2010 (Inception) to May 31, 2013 (unaudited)	6

Consolidated Statements of Cash Flows for the six months ended May 31, 2013 and 2012, and from September 13, 2010 (Inception) to May 31, 2013 (unaudited)	7

Notes to Consolidated Financial Statements (unaudited)	8 - 20

PART I

FINANCIAL INFORMATION

Item 1. Financial Statements

BioPower Operations Corporation and Subsidiaries

(A Development Stage Company)

Consolidated Balance Sheets

	May 31, 2013			November 30, 2012
	(Unaudited)

Assets
Current Assets
Cash	$	41,930		$	16,956
Consulting receivables		38,512			-
Available-for-sale securities		-			38,250
Prepaid expenses		4,304			682
Total Current Assets		84,746			55,888

Equipment - net		15,752			18,761
Security deposit		11,660			11,660
		27,412			30,421

Total Assets	$	112,158		$	86,309

Liabilities and Stockholders' Deficit

Current Liabilities
Accounts payable and accrued expenses	$	429,795		$	413,586
Accounts payable and accrued expenses - related parties		970,256			755,365
Deferred revenue		-			31,429
Common stock payable		252,900			208,500
Notes payable - related parties		40,675			40,675
Notes payable		214,800			89,800
Convertible debt		25,000			-
Total Current Liabilities		1,933,426			1,539,355

Long-Term Liabilities
Deferred revenue		-			25,000
Total Long-Term Liabilities		-			25,000

Total Liabilities		1,933,426			1,564,355

Stockholders' Deficit
Preferred stock, $1 par value; 10,000 shares authorized; 1 share issued and outstanding		1			1
Common stock, $0.0001 par value, 500,000,000 shares authorized; 90,280,000 shares issued and outstanding		9,028			9,028
Additional paid-in capital		820,162			795,162
Deficit accumulated during the development stage		(2,650,459	)		(2,244,437	)
Other comprehensive loss		-			(37,800	)
Total Stockholders' Deficit		(1,821,268	)		(1,478,046	)

Total Liabilities and Stockholders' Deficit	$	112,158		$	86,309

See accompanying notes to consolidated financial statements

BioPower Operations Corporation and Subsidiaries

(A Development Stage Company)

Consolidated Statements of Operations

(Unaudited)

	Three Months Ended May 31,						Six Months Ended May 31,						September 13, 2010 (Inception) to
	2013			2012			2013			2012			May 31, 2013
				(restated)						(restated)

General and administrative expenses	$	240,128		$	330,162		$	402,143		$	552,852		$	2,352,952

Other income (expense)
Interest expense		(3,655	)		(53,758	)		(29,867	)		(84,527	)		(153,932	)
Interest expense - related party		(408	)		(202	)		(808	)		(202	)		(1,757	)
Loan cost		-			-			-			-			(6,250	)
Loss on impairment of avaialble-for-sale securities		(76,050	)		-			(76,050	)		-			(76,050	)
Loss on impairment of license		-			-			-			-			(240,795	)
Loss on sale of available-for-sale marketable securities		-			-			-			-			(118,640	)
Gain on settlement of consulting revenue receivable		-			-			-			133,500			133,500
Consulting revenue		168,971			20,000			186,293			23,571			249,864
Consulting expense		(83,447	)		-			(83,447	)		-			(83,447	)
Total other income (expense) - net		5,411			(33,960	)		(3,879	)		72,342			(297,507	)

Net loss	$	(234,717	)	$	(364,122	)	$	(406,022	)	$	(480,510	)	$	(2,650,459	)

Net loss per common share - basic and diluted	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.01	)	$	(0.03	)

Weighted average number of common shares outstanding during the period - basic and diluted		90,280,000			90,340,000			90,280,000			90,328,197			78,703,703

Comprehensive loss
Net loss	$	(234,717	)	$	(364,122	)	$	(406,022	)	$	(480,510	)	$	(2,650,459	)
Unrealized loss on available-for-sale marketable securities		23,850			(31,500	)		-			(31,500	)		(37,800	)
Reclassification adjustment due to impairment on available-for-sale securities		37,800			-			37,800			-			37,800
Comprehensive loss	$	(173,067	)	$	(395,622	)	$	(368,222	)	$	(512,010	)	$	(2,650,459	)

See accompanying notes to consolidated financial statements

BioPower Operations Corporation and Subsidiaries

(A Development Stage Company)

Consolidated Statement of Stockholders' Deficit

From September 13, 2010 (Inception) to May 31, 2013

(Unaudited)

													Deficit
													Accumulated			Accumulated
	Preferred Stock,				Common Stock,						Additional		during			Other			Total
	$1 Par Value				$0.0001 Par Value						Paid In		Development			Comprehensive			Stockholders'
	Shares		Amount		Shares			Amount			Capital		Stage			Loss			Deficit

Issuance of common stock - founders ($0.0001)		-	$	-		10,000		$	1		$	-	$	-		$	-		$	1
Net loss - September 13, 2010 (Inception) to November 30, 2010		-		-		-			-			-		(1,334	)		-			(1,334	)
Balance - November 30, 2010		-		-		10,000			1			-		(1,334	)		-			(1,333	)

Cancellation of common stock - founders		-		-		(10,000	)		(1	)		-		-			-			(1	)
Issuance of preferred stock - founders ($1/share)		1		1		-			-			-		-			-			1
Issuance of common stock - founders ($0.0001/share)		-		-		32,500,000			3,250			-		-			-			3,250
Issuance of common stock - related parties ($0.0001/share)		-		-		12,300,000			1,230			-		-			-			1,230
Issuance of common stock ($0.0001/share)		-		-		39,100,000			3,910			-		-			-			3,910
Issuance of common stock ($0.25/share)		-		-		1,200,000			120			299,880		-			-			300,000
Issuance of common stock ($0.50/share)		-		-		30,000			3			14,997		-			-			15,000
Issuance of common stock for services rendered ($0.012/share)		-		-		4,150,000			415			49,585		-			-			50,000
Issuance of common stock for license ($0.25/share)		-		-		1,000,000			100			249,900		-			-			250,000
Warrants issued for services rendered		-		-		-			-			60,800		-			-			60,800
Debt discount - related party		-		-		-			-			30,000		-			-			30,000
Net loss		-		-		-			-			-		(968,655	)		-			(968,655	)
Balance - November 30, 2011		1		1		90,280,000			9,028			705,162		(969,989	)		-			(255,798	)

Debt discount		-		-		-			-			50,000		-			-			50,000
Debt discount - related party		-		-		-			-			40,000		-			-			40,000
Unrealized loss on available-for-sale marketable securities		-		-		-			-			-		-			(37,800	)		(37,800	)
Net loss		-		-		-			-			-		(1,274,448	)		-			(1,274,448	)
Balance - November 30, 2012		1		1		90,280,000			9,028			795,162		(2,244,437	)		(37,800	)		(1,478,046	)

Debt discount		-		-		-			-			25,000		-			-			25,000
Reclassification adjustment due to impiarment on available-for-sale securities		-		-		-			-			-		-			37,800			37,800
Net loss		-		-		-			-			-		(406,022	)		-			(406,022	)
Balance - May 31, 2013		1	$	1		90,280,000		$	9,028		$	820,162	$	(2,650,459	)	$	-		$	(1,821,268	)

See accompanying notes to consolidated financial statements

BioPower Operations Corporation and Subsidiaries

(A Development Stage Company)

Consolidated Statements of Cash Flows

(Unaudited)

	Six Months Ended May 31,						September 13, 2010 (Inception) to
	2013			2012			May 31, 2013
				(restated)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(406,022	)	$	(480,510	)	$	(2,650,459	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of license		-			2,507			9,205
Loss on impairment of license		-			-			240,795
Loss on impairment of marketable securities		76,050			-			76,050
Loss on sale of available-for-sale marketable securities		-			-			118,640
Depreciation		3,009			2,776			12,008
Amortization of debt discount		25,000			83,096			145,000
Loan cost		-			-			6,250
Amortization of stock to be issued for services rendered		45,133			-			95,133
Warrants issued for services rendered		-			-			60,800
Available-for-sale securities received as consideration for consulting revenue		-			(120,000	)		(120,000	)
Gain on settlement of consulting revenue receivable		-			(133,500	)		(133,500	)
Changes in operating assets and liabilities:
Accounts receivable		(38,512	)		-			(38,512	)
Prepaid expenses		(4,355	)		(1,585	)		(5,037	)
Security deposit		-			-			(11,660	)
Accounts payable and accrued expenses		16,209			(6,329	)		429,795
Accounts payable and accrued expenses - related parties		214,891			301,471			970,256
Common stock payable for services rendered		-			97,500			108,500
Deferred revenue		(56,429	)		96,429			-
Net Cash Used In Operating Activities		(125,026	)		(158,145	)		(686,736	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale of available-for-sale securities		-			-			52,560
Purchase of equipment		-			-			(27,760	)
Net Cash Provided By Investing Activities		-			-			24,800

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from convertible debt		25,000			50,000			75,000
Proceeds from convertible debt - related party		-			40,000			70,000
Proceeds from notes payable - related parties		-			28,500			65,973
Proceeds from notes payable		125,000			-			145,800
Repayment of notes payable - related parties		-			-			(25,298	)
Repayment of notes payable		-			-			(1,000	)
Proceeds from issuance of preferred stock		-			-			1
Proceeds from issuance of common stock		-			-			323,390
Proceeds from common stock to be issued		-			50,000			50,000
Net Cash Provided By Financing Activities		150,000			168,500			703,866

Net Increase in Cash		24,974			10,355			41,930

Cash - Beginning of Period		16,956			6,111			-

Cash - End of Period	$	41,930		$	16,466		$	41,930

SUPPLEMENTARY CASH FLOW INFORMATION:
Cash Paid During the Period for:
Income Taxes	$	-		$	-		$	-
Interest	$	-		$	-		$	-

SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Issuance of common stock for license	$	-		$	-		$	250,000
Common stock to be issued for services rendered	$	44,400		$	-		$	44,400
Debt discount recorded on convertible debt	$	25,000		$	50,000		$	75,000
Debt discount recorded on convertible debt - related party	$	-		$	40,000		$	70,000
Conversion of convertible debt to common stock payable	$	-		$	-		$	50,000
Reclassification from convertible debt to notes payable	$	-		$	-		$	70,000
Cancellation of common stock - founders	$	-		$	-		$	1

See accompanying notes to consolidated financial statements

BioPower Operations Corporation and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial Statements

May 31, 2013

Unaudited

Note 1 Basis of Presentation

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Article 8 of Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. It is our opinion, however, that the accompanying unaudited interim consolidated financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.

The accompanying unaudited interim consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended November 30, 2012 as filed with the SEC, which contains the audited financial statements and notes thereto, together with Management’s Discussion and Analysis, for the years ended November 30, 2012 and 2011. The financial information as of November 30, 2012 is derived from the audited financial statements presented in our Annual Report on Form 10-K for the year ended November 30, 2012. The interim results for the three and six months ended May 31, 2013 are not necessarily indicative of the results to be expected for the year ending November 30, 2013 or for any future interim periods.

Note 2 Restatement of Financial Statements

The unaudited interim consolidated financial statements as of and for the three and six months ended May 31, 2012, filed with the SEC on July 24, 2012, have been restated as a result of management’s determination that the Company’s accounting treatment pertaining to (a) revenue recognition on its non-operating consulting advisory agreement executed in February 2012 and (b) common stock authorized but not issued should be modified.

Management initially concluded that the non-refundable fee and first-year consulting fee received in connection with its consulting agreement should be recognized as revenue upon receipt. After further review, management determined that the non-refundable fee should be recognized as revenue over the term of the agreement and the first-year consulting fee should be recognized as revenue over the first year of the agreement. Additionally, management initially concluded that the value of the shares received in connection with its consulting agreement should be recorded as consulting revenue. Upon further review, management determined that a gain on settlement of consulting revenue receivable received should have been recorded since the value of the shares received was greater that the value of the services to be rendered.

Management initially concluded that certain common stock authorized, but not issued, should be treated as outstanding shares of common stock. Upon further review, management determined that common stock authorized, but not yet issued, should be treated as common stock payable and are, therefore, not considered outstanding.

This change in accounting treatment resulted in a restatement of consulting revenue, gain on settlement of consulting revenue receivable, net loss, basic and diluted loss per share and basic and diluted weighted average number of common shares outstanding on the Company’s consolidated statement of operations for the three and six months ended May 31, 2012 and deferred consulting revenue, common stock payable, common stock, additional paid in capital and accumulated deficit in the Company’s consolidated balance sheet at May 31, 2012. The restatement had no effect on the Company’s cash or net cash (used in) provided by operating, investing and financing activities for the six months ended May 31, 2012.

	Restated Consolidated Balance Sheet
	As Reported			Adjustments			Restated			Notes
Total Assets	$	522,890		$	-		$	522,890

Deferred consulting revenue	$	-		$	62,322		$	62,322		1
Common stock payable		-			147,500			147,500		2
Total Current Liabilities		956,769			209,822			1,166,591
Deferred consulting revenue		-			34,107			34,107
Total Long-Term Liabilities		-			34,107			34,107

Common stock		9,063			(35	)		9,028		2
Additional paid-in capital		942,627			(147,465	)		795,162		2
Deficit accumulated during the development stage		(1,354,070	)		(96,429	)		(1,450,499	)	1
Accumulated other comprehensive income		(31,500	)		-			(31,500	)
Total Stockholders' Deficit		(433,879	)		(243,929	)		(677,808	)

Total Liabilities and Stockholders' Deficit	$	522,890		$	-		$	522,890

BioPower Operations Corporation and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial Statements

May 31, 2013

Unaudited

	Three Months Ended								Six Months Ended
	May 31, 2012								May 31, 2012
Consolidated Statements of Operations	As Reported			Adjustments		Restated			As Reported			Adjustments			Restated			Notes

Revenue	$	-		$	-	$	-		$	253,500		$	(253,500	)	$	-

General and administrative expenses		(330,162	)				(330,162	)		(552,852	)					(552,852	)
Consulting revenue		-			20,000		20,000			-			23,571			23,571		1
Interest expense		(53,758	)				(53,758	)		(84,527	)					(84,527	)
Interest expense - related parties		(202	)				(202	)		(202	)					(202	)
Gain on settlement of consulting revenue receivable		-			-		-			-			133,500			133,500		3
Net income (loss)	$	(384,122	)	$	20,000	$	(364,122	)	$	(384,081	)	$	(96,429	)	$	(480,510	)

Net income (loss) per common share - basic and diluted	$	(0.00	)			$	(0.00	)	$	(0.00	)				$	(0.01	)

Weighted average number of common shares outstanding during the period - basic and diluted		90,647,609					90,340,000			90,442,295						90,328,197		2

Comprehensive loss	$	(415,622	)	$	78,500	$	(337,122	)	$	(415,581	)	$	(96,429	)	$	(512,010	)	1

	Six Months Ended
	May 31, 2012
Consolidated Statements of Cash Flows	As Reported			Adjustments			Restated			Notes
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(384,081	)	$	(96,429	)	$	(480,510	)		1
Stock issued for services rendered		97,500			(97,500	)		-			2
Available-for-sale securities received as consideration for consulting revenue		(253,500	)		133,500			(120,000	)		1
Gain on settlement of consulting revenue receivable		-			(133,500	)		(133,500	)		3
Common stock payable for services rendered		-			97,500			97,500			2
Deferred revenue		-			96,429			96,429			1
Net Cash Used In Operating Activities		(158,145	)		-			(158,145	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock		50,000			(50,000	)		-			2
Proceeds from common stock to be issued		-			50,000			50,000			2
Net Cash Provided By Financing Activities		168,500			-			168,500

Notes:

Adjustment to recognize revenue on a straight-line basis on (a) the $60,000 non-refundable fee paid upon execution of the consulting agreement over the term of the agreement and (b) the $60,000 first year consulting fee over the first year of the agreement.

Adjustment to record common stock authorized but not yet issued.

Adjustment to record a gain on shares received since the value of the shares received was greater than the value of the services to be rendered upon execution of the consulting agreement.

Note 3 Nature of Operations and Summary of Significant Accounting Policies

BioPower Corporation (“BioPower” or “the Company”) was incorporated in the State of Florida on September 13, 2010. On January 5, 2011, the Company re-domiciled to Nevada and formed BioPower Operations Corporation, a Nevada corporation. On January 6, 2011, the shareholders of BioPower Corporation contributed their shares of BioPower Corporation to BioPower Operations Corporation and BioPower Corporation became a wholly-owned subsidiary.

The Company intends to be in the business of converting biomass into products such as biofuels, fertilizer or derivative based products from oils. Biomass can come from growing plants or wastes such as plant, human or animal.

BioPower Operations Corporation and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial Statements

May 31, 2013

Unaudited

On June 8, 2012, the Company's Chief Executive Officer contributed 100% of his member interest in FTZ Exchange, LLC, (“FTZ”) which became a 100% wholly subsidiary to the Company for no consideration. On the date of contribution, FTZ had a 50-50 joint venture, known as, the Qx Health Exchange (“QX”) and a wholly-owned subsidiary, called FTZ Energy Exchange Corporation, which intended to launch an energy exchange. FTZ is a licensing company which intends to use its business know-how to develop multiple distribution channels, known as exchanges, for the sale of various products and services. On the date of contribution, FTZ had a nominal net book value. The joint venture was cancelled on May 1, 2013.

The Company’s fiscal year end is November 30.

Principles of Consolidation

The accompanying unaudited interim consolidated financial statements include the accounts of BioPower and its wholly-owned and majority owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

Development Stage

The Company is a development stage company and has primarily generated revenues from a consulting agreement and from revenues earned from the testing phase in connection with the Testing Services Agreement in Paraguay (see Note 15). Revenues recognized to date are not indicative of future expected revenues, once the Company begins marketing its fertilizer related products to customers. During the three and six months ended May 31, 2013, two customers accounted for 23% and 77%, respectively, and 30% and 70%, respectively, of consulting revenue. During the three and six months ended May 31, 2012, one customer accounted for 100% of consulting revenue.

The Company's unaudited interim consolidated financial statements are presented as those of a development stage enterprise. Activities during the development stage primarily include negotiating distribution agreements and marketing the territory for distribution outlets for its fertilizer related products. The Company, while seeking to implement its business plan, will look to obtain additional debt and/or equity related funding opportunities. The Company has not generated any revenues from its planned and principal operations since inception.

Risks and Uncertainties

The Company intends to operate in an industry that is subject to rapid change. The Company's operations will be subject to significant risk and uncertainties including financial, operational, technological, regulatory and other risks, including the potential risk of business failure. Also, see Note 4 regarding going concern matters.

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets at liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the unaudited interim consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from our estimates.

Currently, the Company derives revenue from the consulting services provided to third parties. Revenue is recognized when the contract is signed, the fees are fixed or determinable, delivery of service has occurred, and collectability of the fees is considered probable. Consulting services are recognized ratably over the term of the agreement or as services are rendered. Amounts billed to customers or payments received from customers prior to providing services and for which the related revenue recognition criteria have not been met are recorded as deferred revenue and recognized ratably as revenue over the term of the agreement.

BioPower Operations Corporation and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial Statements

May 31, 2013

Unaudited

Reclassification

Reclassifications have been made to certain prior period amounts to conform to the current period presentation. These reclassifications have no effect on the financial position or on the results of operations or cash flows for the periods presented.

Cash

The Company considers all highly liquid instruments purchased with a maturity of three months or less and money market accounts to be cash equivalents. The Company had no cash equivalents at May 31, 2013 and November 30, 2012.

We minimize credit risk associated with cash by periodically evaluating the credit quality of our primary financial institutions. At times, our cash may be uninsured or in deposit accounts that exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance limit. On May 31, 2013 and November 30, 2012, our deposits did not exceed the FDIC limit.

Accounts Receivable

Accounts receivable represent obligations from our customers. We periodically evaluate the collectability of our accounts receivable and consider the need to record an allowance for doubtful accounts. Actual amounts could vary from the recorded estimates. We did not deem it necessary to record an allowance for doubtful accounts at May 31, 2013. At May 31, 2013, all accounts receivable are with one customer.

Marketable Securities

At the time of acquisition, a security is designated as held-to-maturity, available-for-sale or trading, depending on the Company’s ability and intent to hold such security to maturity. Securities classified as trading and available-for-sale are reported at fair value, while securities classified as held-to-maturity are reported at amortized cost.

Marketable securities are composed of available-for-sale securities and are reported at fair value. Realized gains and losses on sales of investments are recognized in net income on the specific identification basis. Changes in the fair values of securities that are considered temporary are recorded as unrealized gains and losses in accumulated other comprehensive income (loss) within stockholders’ equity. Other-than-temporary declines in market value from original cost are reflected in operating income in the period in which the unrealized losses are deemed other than temporary. In order to determine whether other-than-temporary declines in market value have occurred, the duration of the decline in value and the Company’s ability to hold the investment are considered in conjunction with an evaluation of the strength of the underlying collateral and the extent to which the investment’s amortized cost or cost, as appropriate, exceeds its related market value. The Company undertook a review of the value of its available-for-sale securities as of May 31, 2013 and determined that the value of its securities had been impaired. Accordingly, the Company recorded an impairment charge of $76,050 in the accompanying unaudited consolidated statement of operations during the three and six months ended May 31, 2013. The impairment results from the Company’s inability to obtain the underlying shares of common stock from its escrow agent, as the escrow agent has refused to release these shares to the Company (see Note 12). Management has decided not to take further action on this matter.

The following table summarizes marketable securities held at May 31, 2013 and November 30, 2012, all of which are classified as available-for-sale:

	Cost		Impairment Charge		Fair Value
May 31, 2013
Common stock	$	76,050	$	76,050	$	-
Total available-for-sale securities	$	76,050	$	76,050	$	-

	Cost		Unrealized Loss		Fair Value
November 30, 2012
Common stock	$	76,050	$	37,800	$	38,250
Total available-for-sale securities	$	76,050	$	37,800	$	38,250

BioPower Operations Corporation and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial Statements

May 31, 2013

Unaudited

The Company did not realize any gains and/or losses on sales of investments during the three and six months ended May 31, 2013 and 2012, nor did it recognize any dividend or interest income during those same periods. The Company has a 100% concentration in one publicly traded stock.

Equipment

Equipment is stated at cost, less accumulated depreciation computed on a straight-line basis over the estimated useful lives. Maintenance and repairs are charged to operations when incurred. Betterments and renewals are capitalized when deemed material. When equipment is sold or otherwise disposed of, the asset account and related accumulated depreciation account are relieved, and any gain or loss is included in operations.

Equipment is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. There were no impairment charges taken during the six months ended May 31, 2013.

Investment in Joint Venture

FTZ entered into a Joint Venture with QX, a third party, to engage in the business of becoming an independent medical & health network for hospitals, physicians, outpatient and urgent care centers, dental care, vision care, insurance companies, alternative medicine, medical tourism, pharmaceutical companies, vendors and patients. FTZ owned fifty percent of the QX joint venture.

The joint venture was cancelled on May 1, 2013 and has had no activity through the cancellation date.

Convertible Instruments

We review all of our convertible instruments for the existence of an embedded conversion feature which may require bifurcation, if certain criteria are met. These criteria include circumstances in which:

The economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract,

The hybrid instrument that embodies both the embedded derivative instrument and the host contract is not remeasured at fair value under otherwise applicable GAAP with changes in fair value reported in earnings as they occur, and

A separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to certain requirements (except for when the host instrument is deemed to be conventional).

A bifurcated derivative financial instrument may be required to be recorded at fair value and adjusted to market at each reporting period end date, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives. In addition, we may be required to classify certain stock equivalents issued in connection with the underlying debt instrument as derivative liabilities. In determining the appropriate fair value, the Company expects to use the Black-Scholes option-pricing model.

For convertible instruments that we have determined should not be bifurcated from their host instruments, we record discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their earliest date of redemption.

In addition, we review all of our convertible instruments for the existence of a beneficial conversion feature. Upon the determination that a beneficial conversion feature exists, the relative fair value of the beneficial conversion feature would be recorded as a discount from the face amount of the respective debt instrument and the discount would be amortized to interest expense over the life of the debt.

Share-based payments

The Company recognizes all forms of share-based payments, including stock option grants, warrants, restricted stock grants and stock appreciation rights, at their fair value on the grant date, which are based on the estimated number of awards that are ultimately expected to vest.

BioPower Operations Corporation and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial Statements

May 31, 2013

Unaudited

Share based payments, excluding restricted stock, are valued using a Black-Scholes option pricing model. Share based payment awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable.

The grants are amortized on a straight-line basis over the requisite service periods, which is generally the vesting period. If an award is granted, but vesting does not occur, any previously recognized compensation cost is reversed in the period related to the termination of service.

Earnings per share

Basic loss per share (“EPS”) is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to all dilutive potential of shares of common stock outstanding during the period including stock options or warrants, using the treasury stock method (by using the average stock price for the period to determine the number of shares assumed to be purchased from the exercise of stock options or warrants), and convertible debt using the if-converted method. Diluted EPS excludes all dilutive potential of shares of common stock if their effect is anti-dilutive.

The computation of basic and diluted loss per share for the three and six months ended May 31, 2013 and 2012, excludes the common stock equivalents of the following potentially dilutive securities because their inclusion would be anti-dilutive:

	May 31, 2013		May 31, 2012

Convertible debt ($25,000 at $0.05 per share)		500,000		-
Convertible debt ($50,000 at $0.25 per share)		-		200,000
Convertible debt – related party ($70,000 at $0.25 per share)		-		280,000
Common stock payable		1,056,250		350,000
Total common stock equivalents		1,556,250		830,000

Recent Accounting Pronouncements

There are no new accounting pronouncements that are expected to have any material impact on the Company’s consolidated financial statements.

Note 4 Going Concern

As reflected in the accompanying consolidated financial statements, the Company had a net loss of $406,022 and net cash used in operations of $125,026 for the six months ended May 31, 2013. Additionally, the Company had a working capital deficit of $1,848,680 and a stockholders’ deficit of $1,821,268 at May 31, 2013. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

BioPower Operations Corporation and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial Statements

May 31, 2013

Unaudited

Note 5 Equipment

At May 31, 2013 and November 30, 2012, equipment consists of the following:

	2013			2012			Estimated Useful Life
Computer Equipment	$	27,760		$	27,760		5 years
Less: Accumulated depreciation		(12,008	)		(8,999	)
Equipment, net	$	15,752		$	18,761

Note 6 Notes Payable – Related Parties

Notes payable – related parties consists of the following:

	Balance			Interest Rate			Maturity
Balance - September 10, 2010	$	-
Borrowings		20,927			4	%	Due on demand
Balance - November 30, 2010		20,927
Borrowings		2,954			4	%	Due on demand
Repayments of borrowings		(23,881	)
Balance - November 30, 2011		-
Borrowings		40,500			4	%	Due on demand
Borrowings		1,592			0	%	Due on demand
Repayments of borrowings		(1,417	)
Balance - May 31, 2013 and November 30, 2012	$	40,675

Accrued interest at May 31, 2013 and November 30, 2012 amounted to $2,136 and $854, respectively, which is included as a component of accounts payable and accrued expenses – related parties. Interest expense on notes payable to related parties amounted to $408 and $202 for the three months ended May 31, 2013 and 2012, respectively, and $808, $202 and $1,757 for the six months ended May 31, 2013 and 2012, and the period from September 13, 2010 (inception) to May 31, 2013, respectively.

Note 7 Convertible Debt – Related Parties

Convertible debt – related parties consists of the following:

	Balance			Interest Rate			Maturity	Conversion Price
Balance - November 30, 2010	$	-
Borrowings		30,000			4	%	Due on demand	$	0.25
Balance - November 30, 2011		30,000
Borrowings		40,000			4	%	Due on demand	$	0.25
Reclassification from convertible debt to notes payable (see Note 8)		(70,000	)
Balance - May 31, 2013 and November 30, 2012	$	-

During the years ended November 30, 2011 and 2010, the Company's former President/Chief Operating Officer advanced a total of $70,000. The Company determined that these were conventional convertible debt instruments, with a beneficial conversion feature. The loans were deemed to have a beneficial conversion feature because the fair value of the stock exceeded the effective conversion price embedded in the loan on the commitment date. Accordingly, the Company recorded the value of the beneficial conversion feature, which was determined to be $70,000, as a discount to the loans and a corresponding increase to additional paid in capital. The discount to the loans was fully amortized to interest expense during the year ended November 30, 2012. The loans have been reflected as a note payable to a third party given the individual resigned from his position as of August 2012 and has made a demand for payment (see Note 8). Given the Company’s inability to repay the note, the note is currently in default.

BioPower Operations Corporation and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial Statements

May 31, 2013

Unaudited

Note 8 Notes Payable and Convertible Debt

Notes payable consists of the following:

	Balance			Interest Rate			Maturity
Balance - November 30, 2011	$	-
Reclassification from convertible debt to notes payable		70,000			4	%	Due on demand
Borrowings		20,800			4	%	Due on demand
Repayments of borrowings		(1,000	)
Balance - November 30, 2012		89,800
Borrowings		125,000			8	%	Due on demand
Balance - May 31, 2013	$	214,800

Accrued interest at May 31, 2013 and November 30, 2012 amounted to $7,724 and $3,674, respectively, which is included as a component of accounts payable and accrued expenses. Interest expense on notes payable to third parties amounted to $3,655 and $877 for the three months ended May 31, 2013 and 2012, respectively, and $4,867 and $1,431 for the six months ended May 31, 2013 and 2012, respectively.

Convertible debt consists of the following:

	Balance			Interest Rate			Maturity	Conversion Price
Balance - November 30, 2011	$	-
Borrowings		50,000			4	%	11/30/2012	$	0.25
Conversion of convertible debt to common stock payable		(50,000	)
Balance - November 30, 2012		-
Borrowings		25,000			4	%	Due on demand	$	0.05
Balance - May 31, 2013	$	25,000

During the year ended November 30 2012, a third party investor advanced $50,000 due on July 31, 2012. The lender could convert the loan into 200,000 restricted shares of the Company at $0.25 per share. On July 31, 2012, the notes maturity dates were extended until November 30, 2012. On October 18, 2012, the third party investor requested to convert the loans into 200,000 restricted shares of the Company's common stock at $0.25/share. As of February 28, 2013, the 200,000 shares have not been issued and are included in common stock payable.

In January 2013, a third party investor advanced $25,000. The lender may convert the loan into 500,000 restricted shares of the Company at $0.05 per share. The Company determined that the loan met the definition of a conventional convertible debt since the holder of the note can only realize the benefit of the conversion option by exercising it and receiving the entire amount of proceeds in a fixed number of shares or cash. The loan was deemed to have a beneficial conversion feature because the fair value of the stock exceeded the effective conversion price embedded in the loan on the commitment date. Accordingly, the Company recorded the value of the beneficial conversion feature, which was determined to be $25,000, as a discount to the loan and a corresponding increase to additional paid in capital. The amount was immediately recognized as interest expense since the loan is due on demand.

Accrued interest at May 31, 2013 amounted to $1,263, which is included as a component of accounts payable and accrued expenses. Interest expense on convertible debt with third parties amounted to $252 and $330 for the three and six months ended May 31, 2013 and 2012, respectively.

Interest expense on notes payable and convertible debt with third parties amounted to $8,932 for the period from September 13, 2010 (inception) to May 31, 2013. Amortization expense of debt discount, included in interest expense, amounted to $145,000 for the period from September 13, 2010 (inception) to May 31, 2013.

Note 9 Stockholders’ Deficit

(A)

Preferred Stock

On January 28, 2011, the Company issued one share of Series A, preferred stock for $1. This series of preferred stock had a provision that the holder of the one share, a related party controlled by the Company’s Chief Executive Officer and a Director, can vote 50.1% of the total votes. There are no preferences, dividends, or conversion rights.

BioPower Operations Corporation and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial Statements

May 31, 2013

Unaudited

(B)

Common Stock

On September 13, 2010, the Company issued 10,000 shares of common stock to its founders for $1 ($0.0001/share). On January 5, 2011, in connection with the re-domiciling to Nevada, these shares were cancelled for no consideration.

During the year ended November 30, 2011, the Company issued the following shares for cash and services.

Type	Quantity		Valuation		Range of Value per share
Cash		40,330,000	$	318,910	$	0.0001 – 0.50
Cash – related parties		44,800,000		4,480	$	0.0001
License agreement (1)		1,000,000		250,000	$	0.25
Services rendered (2)		4,150,000		50,000	$	0.012
Total		90,280,000	$	623,390	$	0.0001 - 0.50

There were no shares issued during the year ended November 30, 2012 or the six months ended May 31, 2013.

The following represents the Company’s shares authorized for issuance as of May 31, 2013:

Type	Quantity		Valuation		Range of Value per share
Cash		200,000	$	50,000	$	0.25
Services rendered – related parties		50,000		11,000		0.22
Services rendered (3)		150,000		97,500		0.65
Debt conversion		200,000		50,000		0.25
Balance - November 30, 2012		600,000	$	208,500	$	0.65
Services rendered (3)		456,250		44,400		0.017 – 0.16
Balance – May 31, 2013 (4)		1,056,250	$	252,900	$	0.017 – 0.65

(1)

The value of the license agreement of $250,000, net of the accumulated amortization, was deemed to be impaired during the year ended November 30, 2012 and, accordingly, as of November 30, 2012, the Company recorded an impairment loss of $240,795 related to this license.

(2)

In connection with the stock issued for services rendered, the Company determined fair value based upon the value of the services provided, which was the most readily available evidence.

(3)

Fair value based upon the quoted closing market price of the Company’s common stock as of the authorized issuance date (date of grant).

(4)

The 1,056,250 shares are recorded as common stock payable because they have not been issued in connection with settling amounts due under contractual arrangements. Given these shares have not been issued, they are not included in earnings per share for the three and six months ended May 31, 2013 and 2012 and from September 13, 2010 (inception) to May 31, 2013.

(C)

Warrants

On January 11, 2011, the Company issued one year warrants for 1,000,000 shares with a consultant, with an exercise price of $1 per share. The warrants were granted for services rendered and had a fair value of $60,800. The warrants expired unexercised on January 11, 2012.

Note 10 Related Party Transactions

The Company has separated accounts payable and accrued expenses on the balance sheet to reflect amounts due to related parties primarily consisting of officer compensation, health insurance, interest on notes and reimbursable expenses to officers for travel, meals and entertainment, vehicle and other related business expenses.

BioPower Operations Corporation and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial Statements

May 31, 2013

Unaudited

Note 11 Commitments and Contingencies

Employment Agreements – Officers and Directors

As of May 31, 2013, the Company has employment agreements with certain executives and directors (two individuals) containing the following provisions:

Term of contract		5 years, expiring on December 31, 2015
Salary		$200,000
Salary deferral		All salaries will be accrued, but may be paid from the Company’s available cash flow funds.

Leases

The Company’s lease on its office space expired on May 31, 2013. On June 3, 2013, the Company entered into a new lease agreement with its current landlord. The lease is for a 24 month period, expiring on May 31, 2015, and requires monthly base rental payments of $2,000 for the period from June 1, 2013 through May 31, 2014 and $2,080 for the period from June 1, 2014 through May 31, 2015.

Contingencies

From time to time, the Company may be involved in legal matters arising in the ordinary course of business. While the Company believes that such matters are currently not material, there can be no assurance that matters arising in the ordinary course of business for which the Company is, or could be, involved in litigation, will not have a material adverse effect on its business, financial condition or results of operations.

Note 12 Revenue – other

On February 13, 2012, the Company was engaged by a third party to provide consulting services in a three year contract for $60,000 per year plus a non-refundable $60,000 initial payment upon execution. The Company may earn fees in the form of cash or common stock of the third party, a public company, at their election. In lieu of cash payments for services to be rendered under the terms of the agreement, the third party elected to pay the Company 15,000,000 shares of public company restricted common stock, at a fifty percent discount using the preceding five days average trading price per the terms of the agreement. $120,000 was due upon execution of agreement. The fair value of the shares received upon the execution of this agreement was $253,500, as evidenced by the quoted closing trading price. The Company recorded the value of the shares received as deferred revenue totaling $120,000, which evidenced the fair value of the services to be performed and recorded a gain of $133,500, with a corresponding asset classified as available-for-sale securities. A gain was recorded since the value of the shares received was greater than the value of the services to be rendered upon the execution of the agreement.

In August 2012, the Company executed a loan agreement with a lender, who is also a shareholder, to obtain 10,000,000 free trading shares of the public company reference above. The shares received by the Company were sold during 2012. In exchange for the free trading shares, the Company was required to repay 10,500,000 shares in free trading stock of this public company. The 500,000 shares are deemed to be a loan cost, having a fair value of $6,250 ($0.0125/share), based upon the quoted closing trading price on the date of the agreement.

During 2012, the Company, received 15,000,000 shares of the public company for services to be rendered and sold 10,000,000 shares as noted above based upon the ability to obtain the 10,000,000 shares of free trading stock from the lender. The 15,000,000 shares is currently held in escrow, of which 4,500,000 shares was to be released to the Company and the balance, of 10,500,000 shares will be paid to the shareholder for the 10,000,000 shares borrowed and the 500,000 shares for the loan cost as noted above upon the shares becoming unrestricted. The Company does not have any rights to the 10,500,000 shares. The Company has not recorded any asset or liability for the shares held in escrow. In May 2013, the Company was notified by the escrow agent that it would not release the shares to the Company. The Company has determined the value of the 4,500,000 shares to be impaired and has recorded an impairment charge of $76,050 during the three and six months ended May 31, 2013 (see Note 3). Management has decided not to take further action on this matter.

The contract had the following remaining payment terms:

•

$60,000 due on February 13, 2013; and

•

$60,000 due on February 13, 2014

As of May 31, 2013, the Company has not received the $60,000 due on February 13, 2013 under the contract. Collectability of this amount is not reasonably assured, therefore the Company has not recorded the related revenue, accounts receivable or deferred revenue associated with this amount as of May 31, 2013. Additionally, in May 2013, the Company was notified by the third party of its intent to terminate the agreement. Given this notification, the Company recognized the remaining portion of the deferred consulting revenue of $39,107 as consulting revenue in the accompanying statement of operations as of May 31, 2013.

BioPower Operations Corporation and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial Statements

May 31, 2013

Unaudited

Note 13 Investor Relations Agreement

On February 5, 2013, the Company entered into an investor relations agreement with a third party, pursuant to which the third party will provide certain investor relations services including, but not limited to, consulting and liaison services relating to the conception and implementation of its corporate and business development plan. The agreement is for a one-year term, commencing February 5, 2013 and is cancelable on a quarterly basis. In consideration for the services, the Company will issue 800,000 shares of common stock, to be delivered in four equal quarterly installments of 200,000 shares each. The first 200,000 shares were to be delivered upon execution of the agreement. In addition to the shares, the Company will pay the consultant $3,000 per month, in cash or stock, at the option of the Company. If the Company elects to pay the monthly fee in shares of the Company’s common stock, the number of shares to be issued will be calculated by dividing the fee owed by the closing price of the Company’s common stock.

As of May 31, 2013, the Company was required to issue 400,000 shares of its common stock and determined to pay the first quarter’s fee of $9,000 in stock, representing 56,250 shares of the Company’s common stock. The fair value of the 456,250 shares of common stock to be issued to the third party was $44,400, based upon the quoted closing trading price of the Company’s common stock as of the date of grant. The Company has recorded this amount as a prepaid expense and is amortizing the expense over the service term. The Company as elected to pay the second quarter’s fee in cash. The Company recorded $17,799 and $31,466 during the three and six months ended May 31, 2013, respectively, as professional fees. Since the 456,250 shares of common stock have not been issued to the third party as of May 31, 2013, the Company has included the value of the shares of $44,400 in common stock payable in the accompanying consolidated balance sheet and has not included these shares in the earnings per share calculations as of May 31, 2013.

Note 14 Fair Value of Financial Assets and Liabilities

The Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. The following are the hierarchical levels of inputs to measure fair value:

•

Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

•

Level 2: Inputs reflect: quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means.

•

Level 3: Unobservable inputs reflecting the Company’s assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available.

The Company had assets measured at fair market value on a recurring basis. Consequently, the Company had gains and losses reported in the statement of comprehensive income (loss), that were attributable to the change in unrealized gains or losses relating to those assets still held at the reporting date for the period ended May 31, 2013.

The following is the Company’s assets measured at fair value on a recurring basis at May 31, 2013 and November 30, 2012, using quoted prices in active markets for identical assets (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3):

	May 31, 2013		November 30, 2012
Level 1 – None	$	-	$	-
Level 2 – Marketable Securities		-		38,250
Level 3 – None		-		-
Total	$	-	$	38,250

BioPower Operations Corporation and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial Statements

May 31, 2013

Unaudited

See Note 3 regarding the impairment charge recognized during the three and six months ended May 31, 2013 on the Company’s marketable securities.

The carrying amounts reported in the balance sheet for cash, available-for-sale securities, prepaid expenses, accounts payable and accrued expenses, notes payable, notes payable – related parties and convertible debt, approximate fair value based on the short-term nature of these instruments.

Note 15 Subsequent Events

Advances

In June 2013, a third party investor advanced an aggregate of $38,506 to the Company. The advance was unsecured, due on demand and bore interest at 8%. The advance was converted into shares of the Company’s common stock (see below).

On July 2, 2013, a third party investor advanced $18,000 to the Company. The advance is unsecured, due on demand and bears interest at 8%.

Common Stock Issuances

During June 2013, in connection with a common stock offering (the “Offering”), the Company sold an aggregate of 1,075,000 shares of its common stock at a purchase price of $0.012 per share, for a total offering amount of $12,900.

On June 21, 2013, one of the Company’s directors converted $4,000 of director’s fees owed into 333,333 shares of common stock and converted $8,000 of consulting fees owed into 666,667 shares of common stock. The fair value of $0.012 per share was based upon the purchase price from the Company’s Offering (see above).

On June 21, 2013, the Company’s Chief Executive Officer and Director of Business Strategy converted amounts due to them for reimbursable expenses of $113,694 into 9,474,500 shares of common stock, or $0.012 per share. The fair value of the stock was based upon the purchase price from the Company’s Offering.

On June 21, 2013, the Company’s Chief Executive Officer converted his outstanding note payable of $40,500, along with accrued interest of $1,950, into 3,537,500 shares of common stock, or $0.012 per share. The fair value of the stock was based upon the purchase price from the Company’s Offering.

On June 21, 2013, third party investors converted $208,306 of notes payable and convertible debt, along with $4,392 of accrued interest, into 17,724,834 shares of common stock, or $0.012 per share. The fair value of the stock was based upon the purchase price from the Company’s Offering.

On June 21, 2013, the Company granted 7,500,000 shares of common stock to a consultant for services to be provided over a twelve month period, commencing June 1, 2013. The shares will vest after one year of service. In addition, the Company will pay the consultant a fee of $7,500 per month, cash flow permitting, over the same twelve month period.

On June 21, 2013, the Company’s Chief Executive Officer and Director of Business Strategy were each granted 10,000,000 shares of common stock in exchange for continuing to work without cash payment of their full salary and to convert accrued expenses and a note payable as noted above. The shares will vest after one year of service. The shares will not replace the Company’s obligation to pay the required salary over the next year.

BioPower Operations Corporation and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial Statements

May 31, 2013

Unaudited

Testing Services Agreement

On July 2, 2013, the Company entered into agreements for the first stage of a project to develop a castor plantation and milling operation in the Republic of Paraguay with offshore entities (aka “Ambrosia and “Developer”) for the testing and development of a project with up to $10,000,000 in financing upon certification of the castor yield effective. Under the terms of the Testing Services Agreement (the “TSA”), the Developer will provide the land, pay costs for the testing and pay the Company a monthly project management fee of $45,000 and reimbursement of expenses during the test period for subcontractors on the ground in Paraguay. The Company will provide project management testing services through the testing phase for up to 12 months until the successful certification of the yield from growing castor is proven, subject to material and adverse events. Once Ambrosia approves the project, then under the Castor Master Farm Management Services Agreement, the $10,000,000 to be invested from Ambrosia will go towards the development and operations of the first stage of the castor plantation and the building of the mill and its operations. The Company will earn 6% of the net income for ten years or have an option to become a 20% owner of the project. The Company began the initial test phase in Paraguay on March 20, 2013, and subject to the terms of the TSA, is entitled to project management fees. The Company recorded consulting revenue of $129,864 in connection with services provided under the TSA as of May 31, 2013.

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

FORWARD LOOKING STATEMENTS AND ASSOCIATED RISK

The information contained in this Quarterly Report on Form 10-Q (this “Quarterly Report”) is intended to update the information contained in our Annual Report on Form 10-K for the year ended November 30, 2012 (our “2012 Annual Report”) and presumes that readers have access to, and will have read, the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other information contained in our 2012 Annual Report. The following discussion and analysis also should be read together with our consolidated financial statements and the notes to the consolidated financial statements included elsewhere in this Quarterly Report.

This discussion summarizes the significant factors affecting the consolidated operating results, financial condition and liquidity and cash flows of BioPower Operations Corp. for the three and six months ended May 31, 2013 and 2012. Except for historical information, the matters discussed in this Management’s Discussion and Analysis of Financial Condition and Results of Operations are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result” and similar expressions. Forward-looking statements involve risks and uncertainties and are based upon judgments concerning various factors that are beyond our control. Forward-looking statements are based on current expectations and assumptions and actual results could differ materially from those projected in the forward-looking statements as a result of, among other things, those factors set forth in “Risk Factors” contained in Item 1A of our 2012 Annual Report.

Throughout this Quarterly Report, the terms “we,” “us” and “our” refers to BioPower Operations Corporation and, unless the context indicates otherwise, our subsidiaries in which we hold 100% of such entities’ outstanding equity securities, including BioPower Corporation (“BioPower Corporation”), Green Oil Plantations Americas Inc. (“Green Oil”) and Green Energy Crops Corporation (“GECC”), on a consolidated basis. Unless otherwise indicated, all monetary amounts are reflected in United States Dollars.

Overview

BioPower Corporation (“we,” “our,” “BioPower,” “BIO” or the “Company”) was incorporated in the State of Florida on September 13, 2010. On January 5, 2011, the Company re-domiciled to Nevada and formed BioPower Operations Corporation, a Nevada corporation. On January 6, 2011, the shareholders of BioPower Corporation contributed their shares of BioPower Corporation to BioPower Operations Corporation and BioPower Corporation became a wholly-owned subsidiary. The Company and its subsidiaries intend to grow biomass crops coupled with processing and/or conversion facilities to produce oils, biofuels, electricity and other biomass products. We also intend to utilize licensed patented technology to convert biomass wastes into products and reduce the amount of waste going to landfills through license, joint venture and build and own facilities. Further, we intend to license and create royalties by utilizing our FTZ Exchange subsidiary to help create exchanges.

We are a development stage company and have primarily generated revenues from a consulting agreement and from revenues earned from the testing phase in connection with the Testing Services Agreement in Paraguay (see below). Revenues recognized to date are not indicative of future expected revenues, once we begin marketing our fertilizer related products to customers. Accordingly, we must raise cash from other sources, such as from the proceeds of loans, sale of common shares, advances from related parties and consulting agreements.

From inception (September 13, 2010) to May 31, 2013, the Company’s business operations have been primarily focused on developing our business plan, developing potential products and biomass projects, becoming a trading public company through an S-1 registration statement, raising money, licensing technologies and licensing and developing on-line exchanges.

Our corporate headquarters are located at 1000 Corporate Drive, Suite 200, Fort Lauderdale, Florida 33334 and our phone number is (954) 202-6660. Our website can be found at www.biopowercorp.com. The information on our website is not incorporated in this report.

Our Business

Biomass is all plant and animal matter on the Earth's surface. Harvesting biomass such as crops, trees or dung and using it to generate energy such as heat, electricity or motion, is bioenergy. Biomass is a very broad term which is used to describe material of recent biological origin that can be used either as a source of energy or for its chemical components. As such, it includes trees, crops, algae and other plants, as well as agricultural and forest residues. It also includes many materials that are considered as wastes by our society including food and drink manufacturing effluents, sludge, manures, industrial (organic) by-products and the organic fraction of household waste.

Initially we developed a strategy to license and grow long-term biomass products that take five to seven years to reach maturation. After commencing development activities we recognized that the economic climate for lending and investment is focused on shorter term returns of two to three years. Therefore, BioPower analyzed various shorter term biomass technologies and market niche opportunities. As a result, we developed short term plans to produce and sell biomass products which we call our Castor project. We have deferred our plans for the development of our long-term, licensed biomass products until specific funding can be obtained for such projects.

BioPower intends to create a special purpose entity (“SPE”) company for each biomass project. Every SPE must have a sustainable, biomass growing project with facilities to process the biomass into saleable products possibly coupled with an end use agreement. This end use agreement may enable the SPE to obtain financing based upon the potential profitability of each project. The Company intends to offer ownership in our initial SPEs to partners who can provide land and money. The role BioPower will fulfill in each SPE is executive and general management, procurement of funding and development of markets for the sale of biomass and biomass products. The initial focus for biomass business opportunities will be in the United States of America, the Caribbean, South America and Central America.

The Company also intends to investigate and license and/or joint venture with the most promising, emerging biomass products and processes.

Castor Project

The Company has begun the process to obtain financing for a castor plantation and milling operation to supply castor oil to the U.S.A. and/or international marketplace. We have located a hybrid seed that should result in high yields per acre. We have identified unique growing protocols that also may enhance the yield of seed thus oil by weight. We have identified engineering firms to prepare both general and site specific engineering for permitting and construction purposes. We have identified the mill equipment to process the seed into oil and the agricultural equipment required to facilitate the growing protocols that have been identified. We are currently working on the development of a long-term (greater than one year) purchase agreement for the sale of castor oil. Although we have discussed various potential sites in the center of Florida, we have not made a final determination of the specific location.

The U.S.A. currently imports almost 100% of the castor oil used as a feedstock into the personal care, pharmaceuticals, polymers and plastics, adhesives, coatings and other specialty chemical markets. The Company proposes to develop a project in Florida to grow proven hybrid castor which can be harvested within 110 days per crop. Given the rainfall, the temperature profile and the nature of the soil, it is anticipated that the land when developed will produce 2.6 to 3.0 metric tons of oil seeds per acre based on two crops per year. We will process the seeds into oil (43% of seed weight) with our own, vertically integrated mill which we consider critical to this project. Based on our ability to obtain financing in this fiscal year, we hope to realize revenues and profits from this operation during the latter half of 2013.

On July 2, 2013, we entered into agreements for the first stage of a project to develop a castor plantation and milling operation in the Republic of Paraguay with offshore entities (aka “Ambrosia and “Developer”) for the testing and development of a project with up to $10,000,000 in financing upon certification of the castor yield effective. Under the terms of the Testing Services Agreement, the Developer will provide the land, pay costs for the testing and pay us a monthly project management fee of $45,000 and reimbursement of expenses during the test period for subcontractors on the ground in Paraguay. We will provide project management testing services through the testing phase for up to 12 months until the successful certification of the yield from growing castor is proven, subject to material and adverse events. Once Ambrosia approves the project, then under the Castor Master Farm Management Services Agreement, the $10,000,000 to be invested from Ambrosia will go towards the development and operations of the first stage of the castor plantation and the building of the mill and its operations. We will earn 6% of the net income for ten years or have an option to become a 20% owner of the project. We began the initial test phase in Paraguay and have earned over $150,000 in project management fees to date. The first stage of the project encompasses approximately 1681 hectares or 4,154 acres of land.

Licensed Technology

We recently announced that we obtained a non-exclusive global license from AGT Technologies LLC (“AGT”) until June 2029 when the patent expires. The license is for the patented one-step enzyme technology which converts wastes from poultry, hogs, humans and sugar to products such as, fertilizer, ethanol and other products.

BioPower intends to focus initially on municipalities who have a significant need to reduce their costs of the handling of sewage by utilizing the Company's licensed technology to reduce landfill costs by converting a portion of the sewage into products that do not have to go to the landfill but can be used for energy and fertilizer. The utilization of biomass residues is of paramount importance to achieve environmental sustainability by harnessing the potential of renewable resources in the production of clean energy and value added products. The Company will also target Fortune 500 companies that seek solutions for their waste sugars.

We are required to pay AGT 50% of any sub-license fees that we receive. We are also required to pay AGT 12% in royalties on all revenues we earn from utilizing the technology. As of May 31, 2013, no amounts are due under the license agreement.

The patented technology is a one-step platform that integrates enzymatic fermentation process that requires no pretreatment of the feedstock before fermentation. During the fermentation process the bacteria within the wastes are inactivated by the injected proprietary microbes that also hydrolyze natural biopolymers and simultaneously convert the hydrolyzed fermentable sugars into ethanol.

The process can also convert human waste which is reduced from the conversion of it to ethanol and CO2. Once commercialized, BioPower believes that the process will allow sewage treatment plants to reduce or entirely eliminate their sludge volumes and create saleable Class A fertilizer in lieu of delivering pressed sludge to a landfill in an environmentally unsound method. The process allows farmers to utilize the bacteria free solids to be sold and utilized as an environmentally safe soil amendment or fertilizer. Savings result from less energy used in the processing of sludge, elimination of the hauling costs of treated sludge, and the added profit from ethanol and fertilizer sales. Water utilized in the fermentation stage is recycled back into the process minimizing waste streams from the process.

Critical Accounting Policies

In response to financial reporting release FR-60, Cautionary Advice Regarding Disclosure About Critical Accounting Policies, from the SEC, we have selected our more subjective accounting estimation processes for purposes of explaining the methodology used in calculating the estimate, in addition to the inherent uncertainties pertaining to the estimate and the possible effects on the our financial condition. The accounting estimates involve certain assumptions that, if incorrect, could have a material adverse impact on our results of operations and financial condition. Our more significant accounting policies can be found in Note 3 of our unaudited interim consolidated financial statements found elsewhere in this report and in our Annual Report on Form 10-K for the year ended November 30, 2012, as filed with the SEC. There have been no material changes to our critical accounting policies during the period covered by this report.

Results of Operations

Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation. We expect that we will require additional capital to meet our operating requirements. We expect to raise additional capital through, among other things, the sale of equity and/or debt securities.

Three and Six Months Ended May 31, 2013 Compared to the Three and Six Months Ended May 31, 2012

The following tables set forth, for the periods indicated, results of operations information from our unaudited interim consolidated financial statements:

	Three Months Ended May 31,						Change			Change
	2013			2012			(Dollars)			(Percentage)
				(restated)
Expenses
General and administrative expenses	$	240,128		$	330,162		$	(90,034	)		-27.3	%

Other Income (Expense)
Interest expense		(3,655	)		(53,758	)		(50,103	)		-93.2	%
Interest expense - related party		(408	)		(202	)		206			102.0	%
Loss on impairment of available-for-sale securities		(76,050	)		-			76,050			100.0	%
Consulting revenue		168,971			20,000			148,971			744.9	%
Consulting expense		(83,447	)		-			83,447			100.0	%
Total Other Expense - net		5,411			(33,960	)		(39,371	)		-115.9	%

Net loss	$	(234,717	)	$	(364,122	)	$	(129,405	)		-35.5	%

	Six Months Ended May 31,						Change			Change
	2013			2012			(Dollars)			(Percentage)
				(restated)
Expenses
General and administrative expenses	$	402,143		$	552,852		$	(150,709	)		-27.3	%

Other Income (Expense)
Interest expense		(29,867	)		(84,527	)		(54,660	)		-64.7	%
Interest expense - related party		(808	)		(202	)		606			300.0	%
Loss on impairment of available-for-sale securities		(76,050	)		-			76,050			100.0	%
Gain on settlement of consulting revenue receivable		-			133,500			(133,500	)		-100.0	%
Consulting revenue		186,293			23,571			162,722			690.3	%
Consulting expense		(83,447	)		-			83,447			100.0	%
Total Other Expense - net		(3,879	)		72,342			76,221			105.4	%

Net loss	$	(406,022	)	$	(480,510	)	$	(74,488	)		-15.5	%

General and Administrative Expenses. Our general and administrative expenses are mainly comprised of compensation expense, corporate overhead, development costs, and financial and administrative contracted services for professional services including legal and accounting, SEC filing fees, and insurance. The decrease in our general and administrative expenses is primarily attributable to lower compensation expense due to the departure of our former President/Chief Operating Officer in August 2012. Additionally, insurance expense decreased during the three and six months ended May 31, 2013 as a result of not renewing our directors’ and officers’ liability insurance.

Interest Expense. Interest expense for the three and six months ended May 31, 2013 and 2012 primarily represents the accretion of debt discount to interest expense on our outstanding debt, as well as contractual interest expense on our notes payable and convertible debt.

Loss on impairment. The Company previously reported certain shares due to them by an escrow agent as available-for-sale securities. In May 2013, the Company was notified by the escrow agent that it would not release these shares. Accordingly, the Company determined the value of the available-for-sale securities to be impaired and recorded an impairment charge of $76,050 as of May 31, 2013.

Gain on Settlement of Consulting Revenue Receivable. In February 2012, the Company entered into a consulting agreement with a third party, pursuant to which we received 15,000,000 shares of the third party’s restricted common stock as payment for services to be rendered by us. As of May 31, 2012, the value of the shares received was $253,500, of which $120,000 was recorded as deferred revenue and $133,500 was recorded as gain on settlement of consulting revenue receivable.

Consulting Revenue. During the three months ended May 31, 2013 and 2012, the Company recognized $39,107 and $20,000, respectively, in consulting revenue related to the consulting agreement entered into with a third party in February 2012. During the six months ended May 31, 2013 and 2012, the Company recognized $56,429 and $23,571, respectively, in consulting revenue related to this same agreement. During the three and six months ended May 31, 2013, the Company recognized $129,864 in consulting revenue related to our Testing Services Agreement entered into to develop a castor plantation and milling operation in Paraguay.

Consulting expense. Consulting expense represents our cost to provide services under the Testing Services Agreement to develop a castor plantation and milling operation in Paraguay. These costs are mainly comprised of third party outsourcing expenses and certain reimbursable expenses. During the three and six months ended May 31, 2013, we recognized $83,447 in consulting expense.

Liquidity and Financial Condition

	Six Months Ended May 31,
Category	2013			2012

Net cash used in operating activities	$	(125,026	)	$	(158,145	)
Net cash provided (used) in investing activities		-			-
Net cash provided by financing activities		150,000			168,500

Net increase in cash	$	24,974		$	10,355

Cash Flows from Operating Activities

Net cash used in operating activities was $125,026 for the six months ended May 31, 2013, compared with 158,145 for the comparable period in 2012. Net cash used in operating activities for the six months ended May 31, 2013 is mainly attributable to our net loss of $406,022, offset by the loss on impairment of securities and an increase in accounts payable and accrued expenses due to related parties. Net cash used in operating activities for the six months ended May 31, 2012 is mainly attributable to our net loss of $480,510, available for sale securities received as consideration for consulting revenue of $120,000 and gain on the sale of consulting revenue receivable of $133,500. Offsetting these amounts was an increase in accounts payable and accrued expenses due to related parties and an increase in deferred revenue.

Cash Flows from Financing Activities

We have financed our operations primarily from either advancements or the issuance of equity and debt instruments. For the six months ended May 31, 2013 cash flows provided by financing activities was $150,000, compared to $168,500 for the comparable period in 2012. We received $150,000 in proceeds from convertible debt and notes payable with third parties during the six months ended May 31, 2013, compared to $68,500 in proceeds from convertible debt and notes payable with related parties, $50,000 in proceeds from convertible debt with third parties, and $50,000 in proceeds from common stock to be issued during the six months ended May 31, 2012. Management is seeking, and expects to continue to seek to raise additional capital through equity and/or debt financings, including through one or more equity or debt financings to fund its operations, and pay amounts due to its creditors and employees. However, there can be no assurance that the Company will be able to raise such additional equity or debt financing or obtain such bank borrowings on terms satisfactory to the Company or at all.

The Company does not currently have sufficient resources to cover on-going expenses and expansion. As of May 31, 2013, the Company had cash of $41,930 and current liabilities of $1,933,426. Our current liabilities include accounts payable and accrued expenses to related parties of $970,256. Our operations used $686,736 in cash since inception in September 2010. We have historically financed our operations primarily through private placements of common stock, loans from third parties and loans from our Officer. We plan on raising additional funds from investors to implement our business model. In the event we are unsuccessful, this will have a negative impact on our operations.

As reflected in the accompanying unaudited interim consolidated financial statements, the Company has a net loss of $406,022 and net cash used in operations of $125,026 for the six months ended May 31, 2013; and a working capital deficit of $1,848,680 and a deficit accumulated during the development stage of $2,650,459 at May 31, 2013. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

The ability of the Company to continue as a going concern is dependent on Management's plans, which include potential asset acquisitions, mergers or business combinations with other entities, further implementation of its business plan and continuing to raise funds through debt and/or equity financings. The Company will likely rely upon related party debt and/or equity financing in order to ensure the continuing existence of the business. The financial statements have been prepared assuming that we will continue as a going concern, which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.

Recent Accounting Pronouncements

See Note 3 to our unaudited interim consolidated financial statements regarding recent accounting pronouncements.

Off-Balance Sheet Arrangements

As of the date of this Quarterly Report, we do not have any 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 investors.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

This item is not applicable to smaller reporting companies.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

Our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of May 31, 2013, the end of the period covered by this report. Based on, and as of the date of such evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as May 31, 2013 such that the information required to be disclosed in our SEC reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

Other than the material weakness discussed below that was identified and remediated during the quarter ended May 31, 2013, there have not been any significant changes in our internal control over financial reporting during the fiscal quarter ended May 31, 2013 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Remediation of a Material Weakness in Internal Control Over Financial Reporting

We recognize the importance of the control environment as it sets the overall tone for the organization and is the foundation for all other components of internal control. Consequently, we designed and implemented remediation measures to address the material weakness identified as of November 30, 2012 and enhance our internal control over financial reporting. The material weakness related to the lack of technical resources to apply accounting requirements as they relate to non-routine and highly complex transactions and resulted in restatements to our financial statements which will be filed on Form 10-Q for the periods ended February 29, May 31 and August 31, 2012. The following actions, which we believe remediated the material weakness in internal control over financial reporting, were completed as of the date of this filing:

•

We retained accounting and consulting personnel with the appropriate level of knowledge, skills and experience in financial accounting and reporting;

•

We have examined significant accounts and improved related account reconciliations; and

•

We changed our monitoring practices concerning the review of significant accounts and transactions and related financial results and reporting.

We are committed to a strong internal control environment and will continue to review the effectiveness of our internal controls over financial reporting and other disclosure controls and procedures. As we continue to evaluate and work to improve our internal control over financial reporting, management may determine to take additional measures.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

From time to time, we are a party to, or otherwise involved in, legal proceedings arising in the normal and ordinary course of business. As of the date of this report, we are not aware of any proceeding, threatened or pending, against us which, if determined adversely, would have a material effect on our business, results of operations, cash flows or financial position.

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

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS.

The following exhibits are being filed as part of this Quarterly Report on Form 10-Q.

Exhibit
Number		Exhibit Description

31.1		Certification of Chief Executive Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d- 14(a)

32.1		Certification of Chief Executive Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(b) or 15d- 14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

Copies of this report (including the financial statements) and any of the exhibits referred to above will be furnished at no cost to our shareholders who make a written request to BioPower Operations Corp., 1000 Corporate Drive, Suite 200, Fort Lauderdale, Florida 33334 Attention: Mr. Robert Kohn.

SIGNATURES

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

Dated: July 19, 2013	BioPower Operations Corporation

	By:	/s/ Robert D. Kohn
		Robert D. Kohn, Chairman and Chief Executive Officer and Chief Financial Officer