Driveitaway Holdings, Inc. - Annual Report: 2008 (Form 10-K)

UNITED STATES

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

[ X ] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 2008

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________

Commission file number 333-145999

B2 HEALTH, INC.
(Exact name of registrant as specified in its Charter)


DELAWARE (State or other jurisdiction of incorporation or organization)	20-4456503 I.R.S. Employer Identification number

7750 N. Union Blvd., # 201, Colorado Springs, CO 80920
(Address of principal executive offices) (Zip Code)

Registrant’s telephone number: 719-266-1544

Securities registered under Section 12(b) of the Act: None

Securities registered under Section 12(g) of the Act: Common Stock, $.0001 par value

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 15(d) of the Exchange Act. [ ] Yes [ x ] No

Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Exchange Act from their obligations under those Sections.

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

Indicate by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K (§229.405 of this chapter) 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. [ ]

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 12-b2 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 Act).

[ x ] Yes [ ] No

The Registrant’s revenues for the fiscal year ended September 30, 2008 were $70,445. As of January 13, 2009, the aggregate market value of the voting and non-voting common equity of the registrant based upon the average bid and asked prices of such Common Stock, held by non-affiliates of the registrant was zero since there did not exist a public trading market for the shares on that date. As of January 13, 2009, there were 767,500 shares of Common Stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents if incorporated by reference and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) Any annual report to security holders; (2) Any proxy or information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or (c) under the Securities Act of 1933. The listed documents should be clearly described for identification purposes

Exhibits

See Part IV, Item 13.

FORWARD LOOKING STATEMENTS

In General

This Annual Report contains statements that plan for or anticipate the future. In this Annual Report, forward-looking statements are generally identified by the words "anticipate," "plan," "believe," "expect," "estimate," and the like. These forward-looking statements include, but are not limited to, statements regarding the following:


	*	our product and marketing plans

	*	consulting and strategic business relationships;

	*	statements about our future business plans and strategies;

	*	anticipated operating results and sources of future revenue;

	*	our organization's growth;

	*	adequacy of our financial resources;

	*	development of new products and markets;

	*	competitive pressures;

	*	changing economic conditions;

	*	expectations regarding competition from other companies; and

	*	our ability to manufacture and distribute our products.

Although we believe that any forward-looking statements we make in this Annual Report are reasonable, because forward-looking statements involve future risks and uncertainties, there are factors that could cause actual results to differ materially from those expressed or implied. For example, a few of the uncertainties that could affect the accuracy of forward-looking statements, besides the specific factors identified above in the Risk Factors section of this Annual Report, include:


	*	changes in general economic and business conditions affecting the back and spine pain relief industries;

	*	developments that make our Backroller less competitive;

	*	changes in our business strategies;

	*	the level of demand for our products; and

In light of the significant uncertainties inherent in the forward-looking statements made in this Annual Report, particularly in view of our early stage of operations, the inclusion of this information should not be regarded as a representation by us or any other person that our objectives and plans will be achieved.

PART I

ITEM 1. DESCRIPTION OF BUSINESS

The Company

B2 Health, Inc. (the “Company” or “B2 Health”) was formed and registered as a Delaware corporation on March 8, 2006. B2 Health was created to bring premium intersegmental traction beds to the healthcare industry by use of its Backroller^TM. B2 Health operates through its wholly-owned subsidiary, Back 2 Health, Ltd., a Colorado corporation.

Business Overview

We are a medical device company focused on the design, development, manufacturing and marketing of what we believe to be technologically-advanced motorized physical therapy treatment beds for a broad range of back and spinal medical indications. Our principal product is the Backroller Intersegmental Traction Bed (the “Backroller”). The Backroller passively exercises spinal muscles and massages paraspinal muscles and tissue, thus providing trainers, physical therapists, doctors, chiropractors and individuals an extremely effective way to relieve back and spinal pain.

The actions of the Backroller are designed to be helpful in:

Relieving back pain or stiffness

Providing muscular massage

Improving spinal mobility and muscle flexibility

Providing linear muscle traction of spine

Reliving fatigue, tiredness and tension

Improving spinal range of motion

Offers better sleep all night long

Reducing painful “knots” in the back muscles

Contributing to total body relaxation

The Backroller is easy to use, having been engineered with a variety of user friendly features, including touch screen technology. It is fully automated and designed with firmware technology and memory for ease of future software upgrades. We believe the traditional benefits of decompression therapy through traction combined with the actions of the Backroller will enable trainers, physical therapists, doctors, chiropractors and other health service providers to offer an effective pain relieving therapy, while at the same time, generating increased income.

We sell the Backroller through a network of local and regional third-party wholesale distributors, including independent medical supply and service organizations. Currently, our greatest demand for the Backroller currently stems from practitioners in the chiropractic, osteopathic and therapeutic fields, as well as from traditional medical doctors.

We are currently in the process of redesigning several features of the Backroller to improve its performance and competitive advantages. That redesign will include a unique table top that can be retrofitted to traction tables manufactured by others.

Market Opportunity

While we have not conducted any formal market studies, we believe that changing attitudes about alternative, non-invasive health care practices, combined with the rapidly expanding older population, contribute to a robust market opportunity for the Backroller. Trainers, physical therapists, doctors, chiropractors, and others in the pain management and relief community, can use the Backroller as a highly effective form of back and spine pain management. Placement opportunities for the Backroller should be particularly good in acute hospital, rehabilitation, and orthopedic settings, because the elderly receive the most treatment in these settings. The growing elderly population is particularly vulnerable to chronic and debilitating conditions that require therapeutic services. Also, the baby-boom generation is entering the prime age for heart attacks and strokes, increasing the demand for cardiac and physical rehabilitation.

The Backroller can be supplied directly to chiropractors, physical therapists, physicians, trainers, hospitals and nursing homes. According to the latest available figures from the Bureau of Labor Statistics (www.bls.gov) (the “BLS”), there were roughly 53,000 practicing chiropractors in the United States in 2004. Employment of chiropractors is expected to grow through at least 2014 as consumer demand for alternative health care grows. Because chiropractors emphasize the importance of healthy lifestyles and do not prescribe drugs or perform surgery, chiropractic care is appealing to many health-conscious Americans. Additionally, chiropractic treatment of the back, neck, extremities, and joints has become more widely accepted.

The latest available data from the BLS estimates that physical therapists held roughly 155,000 jobs in 2004, and they expect this number to increase as growth in the number of individuals with disabilities or limited function spurs demand for therapy services. Physicians and surgeons held about 567,000 jobs in 2004; approximately 60% of salaried physicians and surgeons were in offices of physicians, and 16% were employed by private hospitals. Additionally, there are over 15,400 nursing homes and 5,000 hospitals in the United States. As the United States population ages, we believe the healthcare market for traction beds will continue to grow. These factors, combined with widespread interest in alternative, non-invasive health promotion, contribute to a market opportunity for the Backroller.

Business Strategy, Marketing and Distribution

We believe we are well-positioned for growth in our target markets. Our sales and marketing strategy is based upon the following considerations:

Superior Product Offering. Our proprietary Backroller contours to the body more naturally and provides better spinal alignment, reduced pressure points, and greater relief of lower back and neck pain than traditional traction beds. Our innovative product and quality design and craftsmanship distinguishes us from the major manufacturers of intersegmental traction beds in the United States, which we believe offer generally similar products and must compete primarily on price.

Significant Growth Opportunities. We believe we have significant growth opportunities because we have penetrated only a small percentage of our addressable market. Furthermore, we have recently engaged independent distributors to reach a greater number of consumers and increase our brand awareness.

Based on our strategic initiatives, we are focusing our resources in the following areas:

Improving sales and distribution of the Backroller domestically through strengthened relationships with distributors, particularly the high-volume specialty distributors. We currently have distributor relationships with Med1, based in Denver, CO, an online distributor of medical equipment and supplies; BCK Sales, based out of Denver, Colorado, a distributor of exercise and rehabilitation equipment; and Southwest Medical Supply based out of Phoenix, Arizona. Med1 has been responsible for 75% of our sales to date.

Seeking strategic partnerships to expand our product offerings in the back and spine pain management market.

Increasing our brand awareness through targeted marketing and advertising campaigns that further associate our brand name with better back and spine pain management and premium quality products. These campaigns will consist of emails, direct mailings and participation in medical device and chiropractic conventions. We also have an interactive website that facilitates brand awareness and direct sales.

Continued redevelopment and redesign of the high quality Backroller design. See www.back2healthltd.com.

Warranty Policy

We will provide a standard limited lifetime warranty for the Backrollers primarily covering parts and labor to repair or replace defective components. We plan to establish reserves for estimated product warranty costs. These reserves will be based on a historical warranty experience during fiscal year 2007. As we have only recently begun product sales, we do not have any current product warranty issues.

Competition

The primary competition in the intersegmental traction bed market is from domestic manufacturers including LSI International and Verteflex, with our main competition coming from Verteflex. The Backroller offers more features, is easier to use, and comes with a lower price point than any comparable product distributed by Verteflex. LSI International competes primarily on price, offering a product designed with fewer features and lower quality craftsmanship. We believe we compete based on our technological sophistication and product quality. In addition, our products target a lower selling price than the products of our competitors and we offer a limited lifetime warranty, a broader warranty than our competitors.

Intellectual Property

We have been issued a federal trademark registration for the trademark “Backroller”.

We regard our development technology and proprietary know-how and assets as being very valuable to us, but we have no patent protection to date. We do not expect to obtain any significant patent protection, however, and we intend to rely primarily upon a combination of trade secrets and confidentiality agreements to protect our intellectual property.

There is no assurance that any measures taken by us to protect our intellectual property will be sufficient or that such property will provide us with any competitive advantage. Competitors may be able to copy valuable

features of our products or to obtain information we regard as a trade secret. We are currently not aware of any claims of infringement against us regarding our Backroller or intellectual property rights.

Governmental Regulation

In the United States, the Federal Drug Administration (the “FDA”) is responsible for regulating firms who manufacture, repackage, relabel, and/or import medical devices sold in the United States. The Medical Device Amendments of 1976 (the “1976 Act”) gives specific authority to the FDA to regulate the safety and effectiveness of medical devices. Under the 1976 Act, the FDA classifies a medical device into one of three categories (Class I, II, and III) based on the device’s risk and known facts about the device. The device classification sets the regulatory requirements for each medical device, with regulatory controls increasing from Class 1 to Class III devices. The Backroller, as a Class I device, because it is a non-invasive device, is exempt from pre-market notification under section 510(k) of the 1976 Act. Class I devices are generally lower risk products for which sufficient information exists establishing that general regulatory controls provide reasonable assurance of safety and effectiveness. Most Class I devices are exempt from the requirement for pre-market notification under section 510(k) of the Federal Food, Drug, and Cosmetic Act. Failure to comply with applicable FDA regulatory requirements may result in, among other things, injunctions, product withdrawals, recalls, product seizures, fines, and criminal prosecutions. Any such action by the FDA could materially adversely affect our ability to successfully market our products.

Advertising and other forms of promotion and methods of marketing of the products are subject to regulation by the Federal Trade Commission ("FTC") under the Federal Trade Commission Act ("FTC Act"). Section 5 of the FTC Act prohibits unfair methods of competition and unfair or deceptive acts or practices in or affecting commerce. Section 12 of the FTC Act provides that the dissemination or the causing to be disseminated of any false advertisement pertaining to, among other things, drugs, cosmetics, devices or foods, is an unfair or deceptive act or practice. Pursuant to this FTC requirement, we are required to have adequate substantiation for all advertising claims made about our products. The type of substantiation required depends upon the product claims made.

If the FTC has reason to believe the law is being violated (e.g., the manufacturer or distributor does not possess adequate substantiation for product claims), it can initiate an enforcement action. The FTC has a variety of processes and remedies available to it for enforcement, both administratively and judicially, including compulsory process authority, cease and desist orders, and injunctions. FTC enforcement could result in orders requiring, among other things, limits on advertising, consumer redress, divestiture of assets, rescission of contracts, and such other relief as may be deemed necessary. Violation of such orders could result in substantial fines or other penalties.

We cannot predict the nature of any future laws, regulations, interpretations, or applications, nor can we determine what effect additional governmental regulations or administrative orders, when and if promulgated, would have on our business in the future. They could include, however, requirements for the reformulation of certain products to meet new standards, the recall or discontinuance of certain products, additional record keeping, expanded documentation of the properties of certain products, expanded or different labeling, and additional scientific substantiation.

Research and Development

Our research and development team is lead by Mr. Rusty Munn, manufacturing designer of the Backroller, and John B. Quam, our President. We will use market input to develop products that solve specific problems as well as provide superior benefits to end-users.

Other Industry Segments

During fiscal 2008, we engaged in several unrelated business opportunities in an effort to generate additional gross margin. Those business activities were:

Jewelry Sales

During 2008, we took advantage of an opportunity to purchase a quantity of designer jewelry inventory that was requested by Chris Christmas, LLC, a Denver, Colorado based jewelry designer. Chris Christmas, LLC is controlled by Mr. Chris Christmas, a personal acquaintance of Mr. Quam. Mr. Quam would also be deemed a promoter of Christmas & Company, a holding parent corporation of Chris Christmas, LLC. The inventory was purchased for an aggregate of $25,959 and was immediately resold to Chris Christmas, LLC for an aggregate of $29,074. As of September 30, 2008, an aggregate of $0 has been paid by Chris Christmas, LLC and a balance of $29,074 was still outstanding and unpaid. The Company has written down this receivable to zero at September 30, 2008.

Book Sales

During 2008, we took advantage of an opportunity to purchase a quantity of used book inventory that was requested by A Trillion Books, Inc., a Colorado Springs, Colorado based reseller of used books. A Trillion Books is controlled by Mr. Stephen Calandrella, a shareholder of the Company. The inventory was purchased for an aggregate of $8,903 and was immediately resold to Trillion Books for an aggregate of $9,970. As of December 31, 2008, an aggregate of $2,000 has been paid by Trillion Books and a balance of $6,571 was still outstanding and unpaid.

The Company has no intention of engaging in similar unrelated business activities in the future.

Employees

As of January 13, 2009, we had a total of one (1) part-time employee. The part-time employee is John B. Quam. Currently, Mr. Quam devotes 80% of his time to the day-to-day operations of the Company. Given adequate capital, we would like to hire additional marketing and sales personnel.

Corporate Contact Information

Our principal executive offices are located at 7750 N. Union Blvd., Suite 201, Colorado Springs, Colorado 80920, and our telephone number at that address is (719) 266-1544. Our website address is http://www.back2healthltd.com. The reference to this website address does not constitute incorporation by reference of the information contained therein. We have included our web site address as a factual reference and do not intend it to be an active link to our web site.

Consultants

The Company has no consultants.

ITEM 1A.

RISK FACTORS

We are subject to risks associated with a new business

Our operations are subject to all of the risks inherent in a start-up business enterprise. These risks include the absence of a substantial operating history, shortage of cash, under-capitalization and lack of experience in our chosen industry. We expect to encounter various problems, expenses, complications and delays in connection with the development of our business. The profit potential of our business model is unproven and there can be no assurance that our services will achieve commercial acceptance.

We are a development stage company with a history of operating losses.

We were incorporated on March 8, 2006. Through December 31, 2006, we had no sales, no revenues and we recorded a cumulative operating loss of approximately $44,340. We expect to incur additional losses until sufficient sales of our Backroller Intersegmental Traction products are achieved. We have not yet commenced manufacturing and shipping of the Backroller in substantial volumes. Our limited operating history makes the prediction of future operating results difficult or impossible to make. There can be no assurance that our future revenues will ever be significant or that our operations will ever be profitable.

Our limited operating history makes it difficult to evaluate our prospects and the merits of investing in our securities.

Our business is at an early stage of development. We have not begun to generate significant revenues. Our business will require significant additional investment in inventory and marketing before operations commence. As a general guideline, we anticipate expending approximately $5,000 per month on our day-to-day operations for fiscal 2009. Should our efforts to market and promote ourselves to distributors, health care practitioners and end-users be unsuccessful, we may not attract enough, or any, customers to purchase the Backroller from us. Accordingly, there can be no assurance that our future revenues will ever be significant or that our operations will ever be profitable.

Our trademarks, including the name “Backroller” and other intellectual property rights do not provide us with protection against competition.

We rely heavily on developing brand recognition for the Backroller Intersegmental Traction Bed (the “Backroller”) and claim common law trademark protection for its name. We have also recently applied to the United States Patent and Trademark Office to register our trademark in the name Backroller.

Additionally, we rely upon a combination of laws and contractual restrictions, including restrictions contained in confidentiality agreements, to establish and protect our rights to any intellectual property that we create. Any infringement of our proprietary rights could result in significant litigation costs, and any failure to adequately protect our proprietary rights could result in our competitors offering similar products, potentially resulting in loss of a competitive advantage and decreased revenues. Attempts may be made to copy or reverse engineer aspects of our products or to obtain and use information that we regard as proprietary. Accordingly, we

may not be able to prevent misappropriation of our technology or deter others from developing similar technology. Furthermore, policing the unauthorized use of our products is difficult. Litigation may be necessary in the future to enforce our intellectual property rights or to determine the validity and scope of the proprietary rights of others. This litigation could result in substantial costs and diversion of resources and could significantly harm our business. Nonetheless, we do not believe that intellectual property rights, including trademark and copyright laws form a basis for significant competitive advantage or protect us from intense competition.

We may not be able to finance the development of our business.

Our ability to satisfy our future capital requirements and implement our expansion plans will depend upon many factors, including the financial resources available to us, the expansion of our sales and marketing efforts and the status of competition. We believe that current and future available capital resources, including the revenues from sale of our product, will be sufficient to fund its operations at current levels for 12 to 16 months. However, the exact amount of funds that we will require will depend upon many factors, and it is possible that we will require additional financing prior to such time. There can be no assurance that additional financing will be available to us on acceptable terms, or at all. If additional funds are raised by issuing equity securities, further dilution to the existing stockholders will result. If adequate funds are not available, we may be required to delay, reduce or eliminate our programs or obtain funds through arrangements with partners or others that may require us to relinquish rights to certain of our products, technologies or other assets. Accordingly, the inability to obtain such financing could have a material adverse effect on our business, financial condition and results of operations.

We are dependent on a limited number of products. All of our sales have been derived from sales of our existing Backroller Intersegmental Traction table.

Although we plan to develop products in addition to the Backroller, there can be no assurance that these development efforts will be successful or, if successful, that resulting products will receive market acceptance, generate significant sales or result in gross profits. We believe that success in the general back and spinal pain market is somewhat dependent on product acceptance by orthopedists and chiropractors. Our future operating results, particularly in the near term, are significantly dependent upon market acceptance of the Backroller. Because all of our current sales are derived from the Backroller, failure to achieve broad market acceptance of the Backroller as a result of competition, technological change or other factors or the failure to successfully market any new or enhanced versions of existing products would have a material adverse effect on our business, operating results and financial condition.

We may not be able to keep up with rapid technological change and expensive technological innovation.

The back and spinal pain management market is characterized by rapid, technological innovation and change. Many companies are engaged in research and development of devices, drugs and alternative methods to relieve back pain, enhance spinal mobility and improve sleep. New technologies may be developed which may render our products obsolete and non-competitive. If we cannot keep pace with the technological developments and become uncompetitive, we may not be able to generate sufficient revenues, or any existing revenues may materially decrease.

We face significant competition in the markets where we operate from competitors with greater financial resources and established operations and revenues, which make it difficult to attract customers and obtain a market share.

The back and spinal pain management market is very competitive and competition is likely to increase. Increased competition may result in price cuts, reduced gross margins and loss of market share, any of which could seriously harm our business. Many of our competitors have, and potential competitors may possess, longer operating histories and significantly greater financial, technical, personnel and other resources than us. Competitors and potential competitors may also have larger, more established research and development departments and greater name and brand recognition than we currently possess. These greater resources may permit them to implement extensive advertising, sales, promotions and programs that we may not be able to match. Better financed competitors may also have greater success in future research and development efforts. As these competitors enter the field, our sales growth may fail to increase, despite its efforts to continue to design and manufacture superior products. There can be no assurance that we will have the ability to compete successfully in this environment. If we are unable to compete successfully, our business will be seriously harmed.

We have limited human resources; we need to attract and retain highly skilled personnel and consultants; and we may be unable to manage our growth with our limited resources effectively.

We expect that the expansion of our business may place a strain on our limited managerial, operational, and financial resources. We will be required to expand our operational and financial systems significantly and to expand, train and manage our work force in order to manage the expansion of our operations. Our future success will depend in large part on our ability to attract, train, and retain additional highly skilled executive level management, logistics, and sales personnel. We may not be successful in attracting and retaining qualified personnel on a timely basis, on competitive terms or at all. Further, our ability to manage our growth effectively will require us to continue to improve our operational, financial and management controls, reporting systems and procedures, to install new management information and control systems and to train, motivate and manage employees. If we are unable to manage growth effectively, our operating results will suffer.

Our success will depend, to a large degree, upon the efforts and abilities of our officers and key management employees, including, without limitation, John Quam, our President and member of the Board of Directors (the “Board”). For direct knowledge of the industry, extensive research experience and professional administration skills, we rely on Dr. Glynn Hopkins, a chiropractic consultant, and Rusty Munn, the manufacturing designer of the Backroller. The loss of the services of one or more of our key consultants could have a material adverse effect on our operations. We have no employment agreements with any of our employees, and do not maintain a key man life insurance policy on any employee.

We depend on our suppliers for our components and raw materials, and our production or operating margins would be harmed if these suppliers are not able to meet our demand and reasonable alternative sources are not available.

The components used to make the Backroller come from various suppliers. The Backroller is comprised of many elements, all of which are available as commodity products. We believe that each of these components is readily available in sufficient quantities from multiple sources on commercially accepted terms. However, any substantial increase in the price or interruption in the supply of these materials, or if one or more of our suppliers are unable to meet our demand for our components, and if we are unable to obtain alternative sources, our ability to maintain timely and cost-effective production of the Backroller would be seriously harmed and our operating results would suffer. In addition, production of the Backroller may require raw materials for which the sources and quantities are limited. An inability to obtain adequate supplies of raw materials could significantly delay development, regulatory approval and marketing of the Backroller and other future products. We may have to seek alternative sources of supply or abandon or sell product lines on unsatisfactory terms. We may not be able to enter into alternative supply arrangements on commercially acceptable terms, if at all. In addition, as we do not have written agreements with any of our suppliers, they may stop manufacturing our components at any time.

If our products or materials purchased from our suppliers experience performance issues, our business will suffer.

Our business depends on the production of products of consistently high quality. Our products, components and materials purchased from our suppliers, are typically tested for quality. These testing procedures are limited to evaluating the Backroller under likely and foreseeable failure scenarios. For various reasons, the Backroller, including materials purchased from our suppliers, may fail to perform as expected. In some cases, product redesigns or additional expense may be required to correct a defect. A significant or systemic product failure could result in customer relations problems, lost sales, and financial damages.

We rely on third parties to manufacture our products and our reputation and operating results could be harmed if they fail to produce quality products in a timely and cost-effective manner and in sufficient quantities.

We do not currently have manufacturing facilities or personnel to independently manufacture the Backroller. We depend on third-party manufacturers to produce sufficient volumes of the Backroller in a timely fashion, at satisfactory quality and cost levels. If our manufacturers fail to produce quality finished Backrollers on time, at expected cost targets and in sufficient quantities, our reputation and operating results would suffer. In addition, as we have no long-term agreements with our manufacturers, we do not have firm commitments on the timing, pricing and quality of the manufacturing process, and, they manufacturers may stop manufacturing for us at any time, with little or no notice. If for any reason we are unable to obtain or retain third party manufacturers on commercially acceptable terms, we may not be able to distribute the Backroller, or other future products, as planned. If we encounter delays or difficulties with contract manufacturers in producing or packaging the Backroller, the distribution, marketing and subsequent sales of the Backroller will be adversely affected. There can be no assurance that the manufacturers we have engaged will be able to provide sufficient quantities of the Backroller or that the Backroller supplied will meet our specifications.

We do not have written agreements with our manufacturers and, as a result, we could be subject to increases in component or manufacturing costs and/or delivery schedule changes which could harm our reputation and operating results.

Cost increases for our components or manufacturing services, whether resulting from shortages of materials, labor or otherwise, including, but not limited to rising cost of materials, transportation, services, labor, commodity price increases and the impact of foreign currency fluctuations could negatively impact our gross margins. Because of market condition and other factors, we may not be able to offset any such increased costs by adjusting the price of our products.

Any errors or defects contained in our products, or our failure to comply with applicable safety standards, could result in delayed shipments or rejection of our products, damage to our reputation and expose us to regulatory or other legal action.

In the future, we may experience delays in releasing the Backroller, or other future products due to defects or errors in the products. The Backroller may contain errors or defects after commercial shipments have begun, which could result in the rejection of our products by our distributors, damage to our reputation, lost sales, diverted development resources and increased customer service and support costs and warranty claims, any of which could harm our business. Individuals could sustain injuries from our products, and we may be subject to product liability claims or lawsuits resulting from such injuries. There is a risk that these claims or liabilities may exceed, or fall outside the scope of, our insurance coverage. Moreover, our products could be subject to involuntary recalls and other actions by regulatory authorities. Concerns about potential liability may lead us to recall voluntarily the Backroller. While we currently maintain product liability insurance, a significant product liability judgment against us or a widespread product recall, to the extent either such event is in excess of the limits of its product liability insurance, could result in substantial financial losses.

We rely heavily upon independent distributors to market our product. Those distributors also market other back and spine pain relieving equipment, including traction beds, which are competitive with ours. As a result, distributors over whom we exercise little control can significantly influence the degree to which third parties buy our products instead of products of competitive manufacturers.

We distribute our products through a network of independent distributors for resale to trainers, physical therapists, doctors, chiropractors. Accordingly, we depend on these distributors to sell the Backroller and to assist us in creating demand for, and promoting market acceptance of our product. We also depend upon them to provide adequate pre-sales service to our customers. These distributors also promote and market other back and spine pain relieving products, some of which are in competition with the Backroller. There can be no assurance that our distributors will devote the resources necessary to provide effective sales and promotional support to us. A disruption of our distributors, the loss of a significant customer, or the termination by any major distributor could have a material adverse impact on our sales and results of operations.

If for any reason we are unable to obtain or retain third party distributors on commercially acceptable terms, we may not be able to distribute the Backroller as planned. If we encounter delays or difficulties with contract distributors, the distribution, marketing and subsequent sales of the Backroller would be adversely affected, and we may have to seek alternative sources of distribution or abandon or sell the Backroller on unsatisfactory terms. We may not be able to enter into alternative distribution arrangements on commercially acceptable terms, if at all. There can be no assurance that the distributors we have engaged will be able to provide sufficient distribution of the Backroller in order for us to meet our current or future obligations to our customers.

We have no formal long-term written distribution agreements with our distributors; and most distribution arrangements can be terminated by the distributor without prior notice. As a result, agreements with respect to price, inventory, cooperative advertising or special promotions, among other things, are subject to periodic negotiation with each distributor. Additionally, distributors make no binding long-term commitments to us regarding purchase volumes and make all purchases by delivering on-time purchase orders. A down-turn in the performance, a change in the terms on which we conduct business, or the loss of a single distributor, could negatively impact the timing, quality, price and sales of the Backroller and, as a result, our business and operating results could be harmed.

We do not have a written warranty policy; manufacturing defects are handled directly by us and we may experience significant returns or warranty claims.

We offer a limited lifetime warranty on all Backrollers. Since we have only a limited history of commercial sales of our Backroller, we have no data regarding the performance or maintenance requirements. Accordingly, we have no basis on which we can currently predict warranty costs. If we experience significant warranty service requirements or product recalls, potential customers may not purchase our products. Any significant warranty service requirements or product recalls would increase our costs substantially and likely reduce the value of our brand.

We could become subject to infringement claims by third-parties which could impair our limited capital resources and potentially result in substantial adverse judgment.

In recent years, there has been significant litigation in the United States and elsewhere involving patents and other intellectual property rights. Third parties may assert patent, copyright, trademark and other intellectual property rights to technologies used in our business. Any infringement claims, with or without merit, could be time consuming, result in costly litigation, and divert the efforts of our technical and management personnel. If we are unsuccessful in defending against these types of claims, we may be required to do one or more of the following:

stop selling those products that use or incorporate the challenged intellectual property;

attempt to obtain a license to sell or use the relevant technology or substitute technology, which license may not be available on reasonable terms or at all; or

redesign those products that use the relevant technology, which we may not be able to do on a timely or cost effective basis, or at all; or,

pay substantial damages.

In the event a claim against us is successful and we can not obtain a license to the relevant technology on acceptable terms or license a substitute technology or redesign its products to avoid infringement, our business will be significantly harmed. A substantial uninsured judgment could force us to cease operations altogether.

The success of our business depends in large part on health care reform.

The levels of revenues and profitability of medical device companies may be affected by the continuing efforts of governmental and third-party payers to contain or reduce the costs of health care through various means. In the United States there have been, and we expect that there will continue to be, a number of federal and state proposals to control health care costs. There have been a number of proposals introduced to Congress to comprehensively reform the nation’s health care system. Some of the proposed legislation has contained measures intended to control public and private spending on health care as well as to provide universal public

access to the health care system. In addition, some of the proposed legislation included limitations on Medicare and Medicaid reimbursement for medical products and services and called for the creation of a committee to monitor and evaluate the pricing of new medical products and services. Although no such legislation has been passed by Congress, federal, state and local officials and legislators (and certain foreign government officials and legislators) have proposed or are reportedly considering proposing a variety of additional reforms to the health care systems in their respective jurisdictions, including reforms that may affect the medical device industries. It is uncertain what new legislative proposals, if any, might be adopted or what actions federal, state or third-party payers may take in response to any health care reform proposals or legislation. We cannot predict the effect health care reforms may have on its business or the business of its collaborators.

In the United States and elsewhere, sales of therapeutic pain management products are dependent in part on the availability of reimbursement from third-party payers, such as government and private insurance plans. These third-party payers are increasingly challenging the prices charged for medical products and services. If we succeed in bringing one or more products to the market, there can be no assurance that these products will be considered cost effective and that reimbursement to the consumer will be available or will be sufficient to allow us to sell our products on a profitable basis.

We are subject to federal, state and local laws and regulations that could impose additional costs or changes on the conduct of our business.

We operate in a highly regulated environment. U.S. federal, state and local governmental entities regulate many aspects of our business, including the distribution of medical devices. Such regulations may include accounting standards, taxation requirements, trade restrictions, safety and other administrative and regulatory restrictions. Compliance with or changes in these and other laws and regulations could impose additional costs on the conduct of our business, and failure to comply with these and other laws and regulations or changes in these and other laws and regulations may impose additional costs or cause us to change the conduct of our business.

Market acceptance of the Backroller will be adversely impacted by the absence of reimbursement from third party health care payers, which cannot be guaranteed.

There can be no assurance that any product we develop will gain market acceptance among health care providers. Even if the Backroller gains wide market acceptance, sales may be dependent on the availability of reimbursement from third-party health care payers, such as government and private insurance plans. We do not believe that our Backroller will be eligible for third-party reimbursement, and as a result, market acceptance may be adversely affected.

The success of the Backroller depends in large part upon the acceptance by medical practitioners and patients, which cannot be guaranteed.

Medical practitioners and patients may not accept and use the Backroller. Acceptance and use will depend upon a number of factors, including perceptions by members of the health care community, including physicians, about the safety and effectiveness of the device; cost-effectiveness of the device relative to competing products; availability of reimbursement for the products from government or other healthcare payers; and effectiveness of marketing and distribution efforts by us and our licensees and distributors, if any. Because we expect sales of the Backroller to generate substantially all of our product revenues for the foreseeable future, the failure of the Backroller to find market acceptance would harm our business and could require us to seek additional financing.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

None

ITEM 2. DESCRIPTION OF PROPERTY

We in fact do not presently maintain executive offices at any location. We use the address of our former director, John Overturf, as our principal address. Mr. Overturf died in December 2008.

Our inventory of completed but unsold Backrollers is warehoused with Med1, one of our distributors. Med1 will add a fee on each unit shipped to a designated customer as compensation for the warehousing service.

ITEM 3. LEGAL PROCEEDINGS

There are no material legal proceedings in which either we or any of our affiliates are involved which could have a material adverse effect on our business, financial condition or future operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None, except as previously disclosed.

PART II


ITEM 5.	MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information

The outstanding shares of Common Stock are traded over-the-counter and quoted on the OTC Bulletin Board ("OTCBB") under the symbol "BTWO". The reported high and low bid and ask prices for the common stock are shown below for the period from November 7, 2008, the commencement of public trading, through December 31, 2008.

Bid

Ask

High

Low

High

Low

2008 Fiscal Year

Oct – Dec 2008

.75

.15

1.00

-0-

The bid and ask prices of the Company's common stock as of January 13, 2009 were $0.15 and $0 respectively, as reported on the OTCBB. The OTCBB prices are bid and ask prices which represent prices between broker-dealers and do not include retail mark-ups and mark-downs or any commissions to the broker-dealer. The prices do not reflect prices in actual transactions. As of January 13, 2009,there were approximately 80 record owners of the Company's common stock.

The OTC Bulletin Board is a registered quotation service that displays real-time quotes, last sale prices and volume information in over-the-counter (OTC) securities. An OTC equity security generally is any equity that is not listed or traded on NASDAQ or a national securities exchange. The OTCBB is not an issuer listing service, market or exchange. Although the OTCBB does not have any listing requirements, per se, to be eligible for quotation on the OTCBB, issuers must remain current in their filings with the SEC or applicable regulatory authority.

The Company's Board of Directors may declare and pay dividends on outstanding shares of common stock out of funds legally available therefore in its sole discretion; however, to date no dividends have been paid on common stock and the Company does not anticipate the payment of dividends in the foreseeable future. Further, under the terms of the convertible preferred stock issued by the Company, the Company is restricted from paying cash dividends on common stock during the period that the convertible preferred stock is outstanding.

Rules Governing Low-Price Stocks that May Affect Our Shareholders' Ability to Resell Shares of Our Common Stock

Quotations on the OTC/BB reflect inter-dealer prices, without retail mark-up, markdown or commission and may not reflect actual transactions. Our common stock may be subject to certain rules adopted by the SEC that regulate broker-dealer practices in connection with transactions in "penny stocks". Penny stocks generally are securities with a price of less than $5.00, other than securities registered on certain national exchanges or quoted on the Nasdaq system, provided that the exchange or system provides current price and volume information with respect to transaction in such securities. The additional sales practice and disclosure requirements imposed upon broker-dealers may discourage broker-dealers from effecting transactions in our shares which could severely limit the market liquidity of the shares and impede the sale of our shares in the secondary market.

The penny stock rules require broker-dealers, prior to a transaction in a penny stock not otherwise exempt from the rules, to make a special suitability determination for the purchaser to receive the purchaser’s written consent to the transaction prior to sale, to deliver standardized risk disclosure documents prepared by the SEC that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock. In addition, the penny stock regulations require the broker-dealer to deliver, prior to any transaction involving a penny stock, a disclosure schedule prepared by the SEC relating to the penny stock market, unless the broker-dealer or the transaction is otherwise exempt. A broker-dealer is also required to disclose commissions payable to the broker-dealer and the registered representative and current quotations for the securities. Finally, a broker-dealer is required to send monthly statements disclosing recent price information with respect to the penny stock held in a customer's account and information with respect to the limited market in penny stocks.

Holders

As of the date of this report, we have approximately 80 shareholders of record of the Company’s common stock.

Rule 144 Shares

A total of 0 shares of the common stock are available for resale by our shareholders to the public. In the future, we may issue shares without registration under the Securities Act in reliance upon exemptions from the registration requirements of the Securities Act, in which event those shares would be deemed “restricted securities” and may, in the future, become eligible for resale under Rule 144.

Effective February 15, 2008, the SEC has amended Rule 144 as part of its efforts to facilitate public and private capital raising and ease disclosure requirements, particularly for smaller companies but also for large public companies. Under Rule 144, as amended, a non-affiliate of an issuer is eligible to resell restricted securities after they have been owned for six months without regard to the former rules related to manner of sale, volume limitations and the requirement to file a Form 144 with the SEC. After a non-affiliate has owned restricted securities for one year, the amended Rule 144 eliminates the requirement that the issuer have current public information available.

Under the amended Rule 144, affiliates of an issuer may resell restricted securities after the applicable six month holding period but continue to be subject to the current public information, volume limitation, manner of sale and Form 144 filing requirements. However, the manner of sale has been amended to permit resales through “risk list principal transactions”, as well as “broker’s transactions”. The revised Rule 144 also eliminates the manner of sale requirements for resale of debt securities by affiliates and increases the volume limitations for resales of debt securities by affiliates to an amount not to exceed 10% of a particular tranche that such debt securities were issued under in any three-month period.

Dividends.

We have not paid any dividends to our shareholders. There are no restrictions which would limit our ability to pay dividends on common equity or that are likely to do so in the future. Delaware General Corporation Law, however, prohibits us from declaring dividends where, after giving effect to the distribution of the dividend, we would not be able to pay our debts as they become due in the usual course of business; or if our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution.

EQUITY COMPENSATION PLAN INFORMATION


	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)	Weighted average exercise price of outstanding options, warrants and rights (b)	Number of securities remaining available for future issuances under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders	0	0	0
Equity compensation plans not approved by security holders	0	0	0
Total	0	0	0

Recent Sales of Unregistered Securities

1. In June 2006, we sold to three non-affiliated investors and two affiliated investors an aggregate of 250,000 shares of common stock in consideration of $2,500, consisting of $2,500 in cash. The investors were of Harlan B. Munn III, Glynn Hopkins II, John B. Quam, Stephen G. Calandrella, and John R. Overturf, Jr. Each investor executed a subscription agreement attesting that he/she/it qualified as an "accredited investor" within the meaning of Rule 501(a) of Regulation D under the Securities Act, or had such knowledge and experience in financial and business matters that their were capable of evaluating the merits and risks of the investment. The securities, which were taken for investment purposes and were subject to appropriate transfer restrictions and restrictive legend, were issued without registration under the Securities Act in reliance upon the exemption set forth in Section 4(2) of the Securities Act.

2. In June 2006, we also issued to one non-affiliated investor and one non-affiliated investor an aggregate of 250,000 shares for total consideration of $100,000. The investors were Stephen G. Calandrella, and John R. Overturf, Jr. Each investor executed a subscription agreement attesting that he/she/it qualified as an "accredited investor" within the meaning of Rule 501(a) of Regulation D under the Securities Act, or had such knowledge and experience in financial and business matters that their were capable of evaluating the merits and risks of the investment. The securities, which were taken for investment purposes and were subject to appropriate transfer restrictions and restrictive legend, were issued without registration under the Securities Act in reliance upon the exemption set forth in Section 4(2) of the Securities Act.

3. In April, 2007, we issued to our two directors, 2,500 shares each in consideration of services to the Company valued at $.0001 per share. Each of the subscribers qualified as a “accredited investor” within the meaning of Rule 501(a) of Regulation D under the Securities Act. The securities, which were taken for investment purposes and were subject to appropriate transfer restrictions and restrictive legend, were issued without registration under the Securities Act in reliance upon the exemption set forth in Section 4(2) of the Securities Act.

4. The following information is being provided pursuant to Item 701(f) of Regulation SB under the Securities Act of 1933, as amended (the “Securities Act”):

1. The Company’s registration statement on Form SB-2, SEC File No. 333-145999 (the “Registration Statement”) was declared effective by the Securities and Exchange Commission on October 30, 2007. The Registration Statement registered for sale an aggregate of 500,000 shares of common stock to be offered by the Company to the public in a direct public offering, without the use of an underwriter, on a 200,000 share minimum, all or none (the “minimum offering”), 500,000 share maximum-basis (the “maximum offering”).

2. The Offering commenced on October 30, 2007.

3. Not applicable

4. (i) The Offering terminated on February 12, 2008 with the Company having sold an aggregate of 200,000 shares of common stock, 300,000 shares of common stock fewer than the maximum offering of 500,000 shares.

(ii) There was no managing underwriter.

(iii) The Registration Statement registered a maximum of 500,000 shares of common stock, $.0001 par value.

(iv) The Registration Statement registered for sale to the public a maximum of 500,000 shares of common stock at a public offering price of $1.00 per share. The offering terminated on February 12, 2008, with the Company having sold an aggregate of 200,000 shares of common stock at a price of $1.00 per share, or gross proceeds of $200,000.

(v) As of December 31, 2007 the Company had incurred expenses totaling $49,626 related to the public offering of its securities. The Company has carried $49,626 of the costs as deferred offering costs. All legal and accounting costs incurred in excess of $49,626 have been charged as a current expense, and not an expense related to the public offering.

(A). No expense payments have been made, directly or indirectly to directors, officers, general partners of the issuer or their associates; to persons owning 10% or more of any class of equity securities of the issuer, or to affiliates of the issuer.

(B). The following offering expenses were paid to others:

Legal Counsel: $36,458

Independent Registered Public Accountants: $8,250;

Printing, Mailing, Travel: $2,418;

Transfer/Escrow Agent: $2,500

(vi) The net offering proceeds to the issuer after deducting total expenses described in paragraph (f)(4)(v) of this Item were $150,374.

(vii) The amount of net offering proceeds to the issuer have not yet been expended.


ITEM 6.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Certain statements in this Management's Discussion and Analysis of Financial Condition and Results of Operations which are not historical facts are forward-looking statements such as statements relating to future operating results, existing and expected competition, financing and refinancing sources and availability and plans for future development or expansion activities and capital expenditures. Such forward-looking statements involve a number of risks and uncertainties that may significantly affect our liquidity and results in the future and, accordingly, actual results may differ materially from those expressed in any forward-looking statements. Such risks and uncertainties include, but are not limited to, those related to effects of competition, maintaining sufficient working capital for our operations, and the general economic conditions and environment in which we operate. The following discussion and analysis should be read in conjunction with the consolidated financial statements and notes thereto appearing elsewhere in this report.

Overview

B2 Health offers its Backroller primarily through a number of regional distributors located throughout the United States. We chose to market our product though distributors to increase our market reach and achieve faster market penetration.

Plan of Operation

Following completion of our direct public offering in February 2008, we have been working to increase production, increase sales and reduce our operating losses. We still face operational challenges to increase our sales and production levels. The following are the key issues and challenges facing the Company:


	*	Production Planning. It is difficult to project future sales and, as a result, we may have to delay orders or only fill partial orders. We plan to maintain a revolving inventory so that in the event of rapid increases in sales, we can quickly supply the demand.
	*	Lack of Marketing Materials. We have had very limited marketing budgets and are not yet competitive with others in the medical device industry marketing in the amount and quality of marketing materials needed to support our distribution network.


	*	Availability of Distributor Agreements and Brand Recognition. Because we are a new entrant in the industry, we must build brand recognition and stimulate demand through our network of independent, third-party distributors. While we have informal agreements with two independent sales organizations that deal specifically in the medical device industry, these arrangements are terminable without prior notice.
	*	Continued Operating Losses. Our history of operating losses makes it difficult to raise capital for our working capital needs.

Our direct public offering of common stock, completed in February 2008 and as discussed below, was critical to our future success to provide our working capital to allow us to further execute our business plan. We believe sales can be increased with increased market penetration of the Backroller, and the creation of new brands and products, although there can be no assurance that our increased focus on marketing will be successful. An increase in net sales and gross profits, if achieved, can reduce net losses only if other operating expenses can be managed effectively. Specifically, general, administration and marketing levels can be increased only as net sales and gross profits increase. There is no guarantee that we will be able to achieve this plan.

The following discussion and analysis has been based on a short operating history and should be read in conjunction with our Financial Statements and Notes thereto included herein.

Liquidity and Capital Resources

As of September 30, 2008, we had a working capital of $87,457 and stockholders’ equity of $87,457, compared with working capital of $9,713 and stockholders’ equity of $44,452 as of September 30, 2007. The Company’s working capital and stockholder’s equity increased during this time period primarily resulting from the completion of our public offering.

On February 12, 2008 we completed the direct public offering of our common stock. Our registration statement on Form SB-2 was declared effective by the Securities Exchange Commission on October 30, 2007, and registered for sale up to 500,000 shares of our common stock. The offering was conducted on a 200,000 share minimum, best efforts, and all-or-none, 500,000 share maximum basis at an offering price of $1.00 per share. Each investor was required to purchase a minimum of 500 shares, for a minimum investment of $500. We sold an aggregate of 200,000 shares, 300,000 fewer than the maximum offering of 500,000 shares. The costs of this offering amounted to $65,862, which resulted in net proceeds of the offering of $134,138.

The net proceeds of the direct public offering should satisfy our working capital requirements for approximately 12 to 16 months, assuming our planned levels of operations. Other than our revolving credit facility discussed below, we have no commitments, understandings or arrangements for any additional working capital. If we are unable to secure additional financing to cover our operating losses until break-even operations can be achieved, we may not be able to continue as a going concern. We are not aware of any trends, events or uncertainties that have or are reasonably likely to have a material impact on our short-term or our long-term liquidity.

In addition to the proceeds of the public offering, we estimate that we may require as much as approximately $200,000 over the next twelve (12) months to fully implement our existing business plan. We may require additional funds over the next three years to assist in realizing our goals. The amount and timing of additional funds required will be dependent on a variety of factors and cannot be determined at this time. The Company has

been successful in paying its operating costs from sales of common stock and draws against its revolving credit facility. We cannot be certain that we will be able to raise any additional capital to fund our ongoing operations.

In April, 2007, we entered into a Credit Agreement with a former director, John Overturf, Jr. Under the terms of the Credit Agreement, we may borrow up to $50,000 which is repayable together with interest at the rate of 10% per annum. At Mr. Overturf’s option, advances under the Credit Agreement are repayable either in shares of our common stock, valued at $0.50 per share, or in cash. In addition, Mr. Overturf will receive a financing fee of ten shares of common stock for every $1,000 in maximum loan balance drawn under the Credit Agreement. Our obligation to repay advances under the Credit Agreement is secured by a Security Agreement covering all of our tangible and intangible assets. Through September 30, 2008 we had borrowed $24,300 under this Credit Agreement. Upon completion of the public offering as discussed above, all outstanding principal amounts under the Credit Agreement were repaid. Mr. Overturf died in December 2008, and as a result we consider the Credit Agreement terminated.

We contract with an OEM to manufacture our Backroller. As we have no long term manufacturing commitments or arrangements, nor have we developed a pricing strategy beyond our current introductory pricing, we do not believe that the product gross margins reported since inception are reflective of future operations. Our future operating plans include purchasing of product in larger lots which we believe will reduce the manufacturing costs, and combined with a long-term pricing strategy will enhance our future gross margins. However, there can be no assurance that we will obtain sufficient operating capital to execute our marketing and production plans discussed elsewhere in this report, nor can there be assurance that planned marketing efforts will result in increasing demand for our product to levels sufficient to realize manufacturing efficiencies.

Our operating expenses since inception consist primarily of officer salaries and certain accounting and legal costs associated with our financial reporting, interest on borrowings under the Credit Agreement as discussed above, the write-off of certain accounts receivable as discussed above, as well as minor operating expenses associated with the day to day operations of the company. Our current cash requirements for our daily ongoing operations are approximately $5,000 per month, which to date we have paid principally out of working capital derived from sales of equity securities and short-term borrowing. There can be no assurance that we will receive sufficient funding from such sources to continue to fund our current operations and continue to execute our business plans.

Overview of Product Distribution

Our primary method of distribution is through a network of independent local and regional distributors, whose principal business is the distribution of medical devices and, in some cases, other traction beds, and who traditionally have distribution relationships with other medical device developers. We have no long-term commitments with or from any distributor. When not available for local or regional distribution, we plan to deliver the Backroller via independent shipping companies. Our website is used as an advertising channel for the Backroller and is listed in all of the local and regional internet directories.

We have historically operated with no backlog and, therefore, our ability to predict sales for future periods is limited.

Other Business Opportunities

^{During 2008, we took advantage of an opportunity to purchase a quantity of designer jewelry inventory that was requested by Chris Christmas, LLC, a Denver, Colorado based jewelry designer. Chris Christmas, LLC is controlled by Mr. Chris Christmas, a personal acquaintance of Mr. Quam. Mr. Quam would also be deemed a promoter of Christmas & Company, a holding parent corporation of Chris Christmas, LLC. The inventory was purchased for an aggregate of $25,959 and was immediately resold to Chris Christmas, LLC for an aggregate of $29,074. As of September 30, 2008, an aggregate of $0 has been paid by Chris Christmas, LLC. Due to various uncertainties, the balance of $29,074 was written-off and is included in general and administrative expenses. We intend to vigorously pursue collection of this transaction.}

^{The Company has no intention of engaging in similar unrelated business activities in the future.}

Certain Considerations: Issues and Uncertainties

We do not provide forecasts of future financial performance or sales volume, although the offering prospectus contains certain other types of forward-looking statements that involve risks and uncertainties. Those risks and uncertainties are discussed more fully in the section of the prospectus titled "Risk Factors" and “Forward Looking Statements.”

Sources of Working Capital

From our inception on March 8, 2006 through June 30, 2008, our primary sources of working capital have come from sale of equity securities and short-term borrowings under our Credit Agreement as discussed above. In light of Mr. Overturf’s demise, we do not consider the Credit Agreement a future source of working capital.

Material Commitments for Capital Expenditures

Under our current arrangement with our OEM manufacturer, we order Backroller traction beds in increments of 25 units. Depending upon the size, configuration and features, these units will cost between $45,000 and $55,000. Payment to our OEM manufacturer is due on a net thirty day basis.

Off Balance Sheet Arrangements

We do not have any off balance sheet arrangements.

Results of Operations – Year ended September 30, 2008 compared to year ended September 30, 2007

For the year ended September 30, 2008 we had a net loss of $(91,133), or $(0.13) per share, compared to a net loss of $(32,082), or (0.06) per share for the year ended September 30, 2007. During the year ended September 30, 2008 we realized sales of $31,401 from the sale of beds, resulting in a gross profit $2,613. Also as discussed above, we recognized $29,074 from the sale of jewelry, resulting in a gross profit of $3,115, and sales from books of $9,970, resulting in a gross profit of $1,067. For the year ended September 30, 2007 we realized sales from beds of $10,998, resulting in a gross profit of $264. All our bed sales have been generally promotional in nature and we expect gross margins from future sales to improve, although there can be no assurance. The net losses during both periods generally reflect our ongoing general and administrative expenses consisting mainly of certain accounting and legal fees associated with our financial reporting, as well as other organization and marketing costs. For the year ended September 30, 2008, we also wrote-off $50,974 of certain accounts receivable, including the jewelry transaction as discussed above, which are also included in general and administrative expenses.

For the years ended June 30, 2007 and 2008, we incurred interest expense of $653 and $1,606, respectively, related to the borrowings under the Credit Agreement as discussed above.

In 2008, we opened a brokerage account to take advantage of various short-term marketable investment security opportunities. For the year ended September 30, 2008 we purchased and sold various debt and equity securities resulting in a net gain of $3,413. In addition, we earned $2,874 in investment dividends and interest on money market funds. At September 30, 2008 we had no security investments and the $78,935 balance of money market funds is included in cash.

Results of Operations – Period from Inception (March 8, 2006) through September 30, 2008

From our inception on March 8, 2006 to June 30, 2008, B2 Health had a net loss of $(151,681). Since inception, we have realized sales of $52,369 from the sale of beds, resulting in a gross profit $3,944. Also as discussed above, we recognized $29,074 from the sale of jewelry, resulting in a gross profit of $3,115, and sales from books of $9,970, resulting in a gross profit of $1,067. Total revenues since inception are $81,443, on which we have realized a gross profit of $7,059. All our bed sales have been generally promotional in nature and we expect gross margins from future sales to improve, although there can be no assurance. The net loss primarily reflects our ongoing general and administrative expenses consisting mainly of certain accounting and legal fees associated with our financial reporting, as well as other organization and marketing costs. We also wrote-off $50,974 of certain accounts receivable, including the jewelry transaction as discussed above, which are also included in general and administrative expenses.

For the period from inception (March 8, 2006) through June 30, 2008 we have incurred interest expense of $2,259 related to the borrowings under the Credit Agreement as discussed above.

Critical Accounting Policies And Estimates

In the ordinary course of business, we have made a number of estimates and assumptions relating to the reporting of results of operations and financial condition in the preparation of our financial statements in conformity with accounting principles generally accepted in the United States of America. Actual results could differ significantly from those estimates under different assumptions and conditions. We believe that the preceding discussion addresses our most critical accounting policies, which are those that are most important to the portrayal of our financial condition and results. We constantly re-evaluate these significant factors and make adjustments where facts and circumstances dictate.

Recent Accounting Pronouncements

During 2007 and 2008, various accounting pronouncements have been issued, none of which are expected to have significant effects on our financial statements.

B2 HEALTH, INC.

(A Development Stage Company)

CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2007 and 2008

F-1

ITEM 7. FINANCIAL STATEMENTS

The following consolidated financial statements are filed as part of this report:



	1.	Report of Independent Registered Public Accounting Firm – Ronald R. Chadwick, PC

	2.	Consolidated Balance Sheet as of September 30, 2008 and September 30, 2007

	3.	Consolidated Statements of Operations for the Years Ended September 30, 2008 and 2007 and for the period March 8, 2006 (inception) through September 30, 2008

	4.	Consolidated Statements of Stockholders' Equity for the Years Ended September 30, 2008, 2007 and 2006

	5.	Consolidated Statements of Cash Flows for the Years Ended September 30, 2008 and 2007 and for the period March 8, 2006 (inception) through September 30, 2008

	6.	Notes to Consolidated Financial Statements

F-2

RONALD R. CHADWICK, P.C.

Certified Public Accountant

2851 South Parker Road, Suite 720

Aurora, Colorado 80014

Telephone (303)306-1967

Fax (303)306-1944

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors

B2 Health, Inc.

Colorado Springs, Colorado

I have audited the accompanying consolidated balance sheets of B2 Health, Inc., a development stage company, as of September 30, 2007 and 2008, and the related consolidated statements of operations, stockholders' equity and cash flows for the years then ended and for the period from March 8, 2006 (inception) through September 30, 2008. These financial statements are the responsibility of the Company's management. My responsibility is to express an opinion on these financial statements based on my audit.

I conducted my audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provides a reasonable basis for my opinion.

In my opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of B2 Health, Inc. as of September 30, 2007 and 2008, and the consolidated results of its operations and its cash flows for the years then ended and for the period from March 8, 2006 (inception) through September 30, 2008 in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 7 to the financial statements the Company has incurred losses that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 7. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Aurora, Colorado

/s/ Ronald R. Chadwick, P.C.

December 17, 2008

RONALD R. CHADWICK, P.C.

F-3


B2 HEALTH, INC.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS

		Sept. 30,	Sept. 30,
		2007	2008
ASSETS

	Current assets
	Cash	$ 1,900	$ 85,842
	Accounts receivable		7,971
	Inventory	32,201	3,412
	Total current assets	34,101	97,225

	Deferred offering costs	34,739	-
		34,739	-

	Total Assets	$ 68,840	$ 97,225

LIABILITIES & STOCKHOLDERS' EQUITY

	Current liabilities
	Accounts payable	$ 8,735	$ 8,461
	Note payable - related party	15,000
	Accrued interest payable	653	1,307
	Total current liabilities	24,388	9,768

	Total Liabilities	24,388	9,768

	Stockholders' Equity
	Preferred stock, $.0001 par value;
	10,000,000 shares authorized; none issued and outstanding	-	-
	Common stock, $.0001 par value;
	50,000,000 shares authorized;
	567,500 shares issued and 505,000 outstanding (2007) &
	775,500 shares issued and 713,000 outstanding (2008)	57	78
	Additional paid in capital	129,943	272,060
	Treasury stock at cost (62,500 shares)	(25,000)	(25,000)
	Deficit accumulated during the development stage	(60,548)	(159,681)

	Total Stockholders' Equity	44,452	87,457

	Total Liabilities and Stockholders' Equity	$ 68,840	$ 97,225

See accompanying notes to these financial statements

F-4


B2 HEALTH, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS


				March 8, 2006
				(Inception)
		Year Ended	Year Ended	Through
		Sept. 30, 2007	Sept. 30, 2008	Sept. 30, 2008


	Sales	$ 10,998	$ 70,445	$ 81,443
	Cost of goods sold	10,734	63,650	74,384

	Gross profit	264	6,795	7,059

	Operating expenses:
	General and administrative	31,693	110,609	170,768
		31,693	110,609	170,768

	Gain (loss) from operations	(31,429)	(103,814)	(163,709)

	Other income (expense):
	Interest expense	(653)	(1,606)	(2,259)
	Interest and dividend income		2,874	2,874
	Realized gain (loss) on securities		3,413	3,413
		(653)	4,681	4,028


	Income (loss) before provision for income taxes	(32,082)	(99,133)	(159,681)

	Provision for income tax	-	-	-

	Net income (loss)	$ (32,082)	$ (99,133)	$ (159,681)

	Net income (loss) per share
	(Basic and fully diluted)	$ (0.06)	$ (0.14)

	Weighted average number of
	common shares outstanding	502,083	685,667

See accompanying notes to these financial statements

F-5


B2 HEALTH, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
					Deficit
					Accum.
					During the	Stock-
	Common Stock		Paid In	Treasury	Development	holders'
	Shares	Amount	Capital	Stock	Stage	Equity
Balances at March 8, 2006	-	$ -	$ -	$ -	$ -	$ -

Sales of common stock	562,500	56	127,444			127,500

Repurchase of 62,500 shares
into treasury at cost from
a related party				(25,000)		(25,000)

Gain (loss) for the period					(28,466)	(28,466)

Balances at September 30, 2006	562,500	$ 56	$ 127,444	$ (25,000)	$ (28,466)	$ 74,034

Compensatory stock issuances	5,000	1	2,499			2,500

Gain (loss) for the period					(32,082)	(32,082)
Balances at September 30, 2007	567,500	57	129,943	(25,000)	(60,548)	44,452

Sales of common stock (net of
deferred offering costs
of $65,862)	200,000	20	134,118			134,138
Compensatory stock issuances	8,000	1	7,999			8,000
Gain (loss) for the period					(99,133)	(99,133)
Balances at September 30, 2008	775,500	78	272,060	(25,000)	(159,681)	87,457

See accompanying notes to these financial statements

F-6


B2 HEALTH, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS


							March 8, 2006
							(Inception)
		Year Ended		Year Ended		Through
		Sept. 30, 2007		Sept. 30, 2008		Sept. 30, 2008

	Cash Flows From Operating Activities:
	Net income (loss) during the development stage	$ (32,082)	$ (99,133)		$ (159,681)

	Adjustments to reconcile net loss to
	net cash provided by (used for)
	operating activities:
	Compensatory stock issuances	2,500	8,000		10,500
	Accounts receivable		(7,971)		(7,971)
	Inventory	(32,201)	28,789		(3,412)
	Accounts payable	4,395	(274)		8,461
	Accrued interest payable	653	654		1,307
	Realized (gains) losses		(3,413)		(3,413)

	Net cash provided by (used for)
	operating activities	(56,735)	(73,348)		(154,209)


	Cash Flows From Investing Activities:
	Deferred offering costs	(24,739)	(31,123)		(65,862)
	Securities - purchases		(318,129)		(318,129)
	Securities - sales		321,542		321,542
	Treasury stock purchase				(25,000)
	Net cash provided by (used for)
	investing activities	(24,739)	(27,710)		(87,449)




(Continued On Following Page)

See accompanying notes to these financial statements

F-7


B2 HEALTH, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS


(Continued From Previous Page)


													March 8, 2006
													(Inception)
				Year Ended						Year Ended					Through
				Sept. 30, 2007						Sept. 30, 2008					Sept. 30, 2008

	Cash Flows From Financing Activities:
	Notes payable - borrowings		15,000				9,300				24,300
	Notes payable - payments						(24,300)						(24,300)
	Sales of common stock							200,000				327,500
	Net cash provided by (used for)
	financing activities		15,000				185,000						327,500

	Net Increase (Decrease) In Cash		(66,474)				83,942						85,842

	Cash At The Beginning Of The Period	68,374				1,900								-

	Cash At The End Of The Period		$ 1,900				$ 85,842						$ 85,842


	Schedule Of Non-Cash Investing And Financing Activities

	None

	Supplemental Disclosure

	Cash paid for interest				$ -				$ -				$ -
	Cash paid for income taxes				$ -				$ -				$ -

See accompanying notes to these financial statements

F-8

B2 HEALTH, INC.

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

B2 Health, Inc. (the “Company”), was incorporated in the State of Delaware on March 8, 2006. The Company plans to design and manufacture specialized chiropractic tables. The Company is currently in the development stage and has limited operations to date.

Principles of consolidation

The accompanying consolidated financial statements include the accounts of B2 Health, Inc. and its wholly owned subsidiary. All intercompany accounts and transactions have been eliminated in consolidation.

Cash and cash equivalents

The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents.

Accounts receivable

The Company reviews accounts receivable periodically for collectability and establishes an allowance for doubtful accounts and records bad debt expense when deemed necessary. At September 30, 2007 and 2008 the Company had no balance in its allowance for doubtful accounts.

Property and equipment

Property and equipment are recorded at cost and depreciated under accelerated methods over each item's estimated useful life.

Revenue recognition

Revenue is recognized on an accrual basis as earned under contract terms.

Use of Estimates

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

Inventories

Inventories, consisting of customized chiropractic beds, are stated at the lower of cost or

F-9

B2 HEALTH, INC.

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

market (first-in, first-out method). Costs capitalized to inventory include the purchase price, transportation costs, and any other expenditures incurred in bringing the goods to the point of sale and putting them in saleable condition. Costs of goods sold include those expenditures capitalized to inventory.

Income tax

The Company accounts for income taxes under Statement of Financial Accounting Standards No. 109 (“SFAS 109”). Under SFAS 109 deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Net income (loss) per share

The net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of shares of common outstanding. Warrants, stock options, and common stock issuable upon the conversion of the Company's preferred stock (if any), are not included in the computation if the effect would be anti-dilutive and would increase the earnings or decrease loss per share.

Financial Instruments

The carrying value of the Company’s financial instruments, as reported in the accompanying balance sheet, approximates fair value.

Sales and cost of goods sold

Of the $70,445 in sales in 2008, $31,401 resulted from the sale of chiropractic beds, $29,074 from jewelry sales, and $9,970 from the sale of used books, with corresponding cost of goods sold of $28,788, $25,959 and $8,903 respectively.

Marketable Securities

Marketable Securities are classified as available-for-sale and are presented in the balance sheets at fair market value. Gains and losses are determined using the specific identification method. The Company had realized gains from the sale of marketable securities of $3,413 in 2008. No balance remained in the marketable securities account at September 30, 2008 and therefore the Company had no unrealized gains or losses.

F-10

B2 HEALTH, INC.

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2. INCOME TAXES

Deferred income taxes arise from the temporary differences between financial statement and income tax recognition of net operating losses and other items. Loss carryovers are limited under the Internal Revenue Code should a significant change in ownership occur.

The Company accounts for income taxes pursuant to SFAS 109. The components of the Company’s deferred tax assets and liabilities are as follows:


	September 30, 2007	September 30, 2008
Deferred tax liability	$ -	$ -
Deferred tax asset arising from:
Net operating loss carryforwards	12,110	31,353
	12,110	31,353
Valuation allowance	(12,110)	(31,353)

Net Deferred Taxes	$ -	$ -

Income taxes at Federal and state statutory rates are reconciled to the Company’s actual income taxes as follows:


	September 30, 2007	September 30, 2008
Tax at federal statutory rate (15%)	(4,812)	(14,870)
State income tax (5%)	(1,604)	(4,957)
Book to tax differences	-	583
Change in valuation allowance	6,416	19,244

	$ -	$ -

NOTE 3. RELATED PARTY TRANSACTIONS

In 2007 the Company issued 5,000 common shares to officers for management services valued at $2,500.

NOTE 4. LEASE

In 2008 the Company commenced leasing office space on a verbal, month to month basis at $1,000 per month. Rent expense in 2008 was $9,000.

F-11

B2 HEALTH, INC.

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5. NOTES PAYABLE

At September 30, 2007 the Company had a $15,000 note payable outstanding to a related party individual, collateralized by Company assets, bearing interest at 10% per annum, with principal and interest due December 31, 2007. The note was convertible, although the Company set no specific conversion terms. Interest expense incurred under the note in fiscal year 2007 was $653, with accrued interest payable at September 30, 2007 in the same amount. In fiscal year 2008 the note was paid.

NOTE 6. COMMON STOCK

In April 2008, the Company issued 8,000 shares of its common stock valued at $1.00 per share as payment for certain design services.

NOTE 7. GOING CONCERN

The Company has suffered recurring losses from operations. This condition raises substantial doubt about the Company’s ability to continue as a going concern. The Company may raise additional capital through the sale of its equity securities, through an offering of debt securities, or through borrowings from financial institutions. By doing so, the Company hopes through increased marketing efforts to generate greater revenues. Management believes that actions presently being taken to obtain additional funding provide the opportunity for the Company to continue as a going concern.

F-12

ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT

MARKET RISK.

Not applicable


ITEM 9	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

The Company is subject to the requirements of Section 404 of the Sarbanes-Oxley Act. However, for the fiscal year ended September 30, 2008, the Company did not undertake procedures required to evaluate the adequacy of its internal controls over financial reporting for purposes of preparing a Management Report , based on the criteria for effective internal control described in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Accordingly, the Company has concluded that its internal controls over financial reporting are not effective to:

1) Ensure the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

2) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and,

3) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the Company’s financial statements.

The Company's Principal Executive Officer and Principal Financial Officer has established and is currently maintaining disclosure controls and procedures for the Company. The disclosure controls and procedures have been designed to provide reasonable assurance that the information required to be disclosed by the Company in reports that it files under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and to ensure that information required to be disclosed by the Company is accumulated and communicated to the Company's management as appropriate to allow timely decisions regarding required disclosure.

The Principal Executive Officer and Principal Financial Officer conducted a review and evaluation of the effectiveness of the Company's disclosure controls and procedures and has concluded, based on his evaluation as of the end of the period covered by this Report, that our disclosure controls and procedures are not effective to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms and to ensure that the information required to be disclosed by the Company is accumulated and communicated to management, including our principal executive officer and our principal financial officer, to allow timely decisions regarding required disclosure.

Our principal executive and financial officer does not expect that our current disclosure or internal control systems will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute assurance that the objectives of the system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented if there exists in an individual a desire to do so. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

There has been no change in our internal control over financial reporting during the fourth quarter ended September 30, 2008 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART III


ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Directors and Executive Officers

Our executive officers, key employees and directors and their respective ages and positions are set forth below:


Name	Age	Position

John B. Quam	44	President and Director

________________________________

John Bernett Quam, age 44, has been the President of B2 Health, Inc. since its inception on March 8, 2006. When not engaged in the business of the Company, he maintains his position as Director of Sales with Charles Jacquin Liquor Distiller, where he has been employed since August of 1994 and is paid a monthly salary of approximately $11,500. He was President and Chief Executive Officer of New World Publishing from June 1996 to April 1999. He also served as a member on the Board of Directors for New World Publishing from June 1996 to April 1999. Mr. Quam attended the University of Colorado, where he received a Bachelor’s of Science degree in Earth Sciences.

During the year ended September 30, 2008, John Overturf, Jr. also served as a director. However, in December 2008, Mr. Overturf died.

During the last five years none of our directors or officers have:


	a.	had any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

	b.	been convicted in a criminal proceeding or subject to a pending criminal proceeding;

	c.	been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or

	d.	been found by a court of competent jurisdiction in a civil action, the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.

Our executive officers are elected annually at the annual meeting of our Board of Directors held after each annual meeting of shareholders. Our directors are elected annually at the annual meeting of our shareholders. Each director and executive officer will hold office until his successor is duly elected and qualified, until his resignation or until he shall be removed in the manner provided by our by-laws.

There do not exist any family relationships among our directors. Additionally, there do not exist any arrangements or understandings between any director and any other person pursuant to which any director was elected as such.

Indemnification and Limitation on Liability of Directors

Our certificate of incorporation limits the liability of a director for monetary damages for his conduct as a director, except for:


	*	Any breach of the duty of loyalty to us or our stockholders,

	*	Acts or omissions not in good faith or that involved intentional misconduct or a knowing violation of law,

	*	Dividends or other distributions of corporate assets from which the director derives an improper personal benefit.

	*	Liability under federal securities law

The effect of these provisions is to eliminate our right and the right of our stockholders (through stockholder's derivative suits on our behalf) to recover monetary damages against a director for breach of his fiduciary duty of care as a director, except for the acts described above. These provisions do not limit or eliminate our right or the right of a stockholder to seek non-monetary relief, such as an injunction or rescission, in the event of a breach of a director's duty of care.

Our certificate of incorporation also provides that we shall indemnify, to the full extent permitted by Delaware law, any of our directors, officers, employees or agents who are made, or threatened to be made, a party to a proceeding by reason of the fact that he or she is or was one of our directors, officers, employees or agents. The indemnification is against judgments, penalties, fines, settlements, and reasonable expenses incurred by the person in connection with the proceeding if certain standards are met. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to our directors, officers and controlling persons in accordance with these provisions, or otherwise, we have been advised that, in the opinion of the SEC, indemnification for liabilities arising under the Securities Act of 1933 is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

Compliance with Section 16(a) of the Exchange Act

Under the Securities Laws of the United States, the Company's Directors, its Executive (and certain other) Officers, and any persons holding more than ten percent (10%) of the Company's common stock are required to report their ownership of the Company's common stock and any changes in that ownership to the Securities and Exchange Commission. Specific due dates for these reports have been established and the Company is required to report in this report any failure to file by these dates. All of these filing requirements were satisfied by its

Officers, Directors, and ten- percent holders. In making these statements, the Company has relied on the written representation of its Directors and Officers or copies of the reports that they have filed with the Commission.

ITEM 9B.

OTHER INFORMATION

None.

ITEM 11. EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

Introduction. This Compensation Discussion and Analysis (“CD&A”) provides an overview of the Company’s executive compensation program together with a description of the material factors underlying the decisions which resulted in the compensation provided for 2008 to the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) (the “Named Executive Officers” or “NEOs”), as presented in the tables which follow this CD&A. The following discussion and analysis contains statements regarding future individual and Company performance targets and goals. These targets and goals are disclosed in the limited context of the Company’s compensation programs and should not be understood to be statements of management’s expectations or estimates of financial results or other guidance. The Company specifically cautions investors not to apply these statements to other contexts.

The Board has responsibility for determining and implementing the Company’s philosophy with respect to executive compensation. To implement this philosophy, the Board oversees the establishment and administration of the Company’s executive compensation program.

It is expected that the compensation of the executives in fiscal 2009, including equity awards, will be reviewed based on the expected performance of the Company as established by the Board of Directors

Compensation Philosophy and Objectives. The guiding principle of the Board’s executive compensation philosophy is that the executive compensation program should enable the Company to attract, retain and motivate a team of highly qualified executives who will create long-term value for the Shareholders. To achieve this objective, the Board has developed an executive compensation program that is ownership-oriented and that rewards the attainment of specific annual, long-term and strategic goals that will result in improvement in total shareholder return. To that end, the Board believes that the executive compensation program should include both cash and equity-based compensation that rewards specific performance. In addition, the Board continually monitors the effectiveness of the program to ensure that the compensation provided to executives remains competitive relative to the compensation paid to executives in a peer group comprised of select container industry and other manufacturing companies. The Board annually evaluates the components of the compensation program as well as the desired mix of compensation among these components. The Board believes that a substantial portion of the compensation paid to the Company’s NEOs should be at risk, contingent on the Company’s operating and market performance. Consistent with this philosophy, the Board will continue to place significant emphasis on stock-based compensation and performance measures, in an effort to more closely align compensation with Shareholder interests and to increase executives’ focus on the Company’s long-term performance.

Role of Executive Officers in Compensation Decisions. The Board makes all compensation decisions for the CEO and the CFO. Decisions regarding the compensation of other employees are made by the CEO and CFO in

consultation with the Board. In this regard, the CEO and CFO provide the Board evaluations of executive performance, business goals and objectives and recommendations regarding salary levels and equity awards.

Market-Based Compensation Strategy. The Board adopted the following market-based compensation strategy:


*	Pay levels are evaluated and calibrated relative to other companies of comparable size operating in the business information systems industry (the “Peer Group”) as the primary market reference point. In addition, general industry data is reviewed as an additional market reference and to ensure robust competitive data.

*	Target total direct compensation (target total cash compensation plus the annualized expected value of long-term incentives) levels for NEOs are calibrated relative to the Peer Group.

*	Base salary and target total cash compensation levels (base salary plus target annual incentive) for NEOs are calibrated to the Peer Group.

*	The long-term incentive component of the executive compensation program is discretionary and viewed in light of the target total direct compensation level.

The Board retains discretion, however, to vary compensation above or below the targeted percentile based upon each NEO’s experience, responsibilities and performance.

Total Direct Compensation

Our objective is to target total direct compensation, consisting of cash salary, cash bonus and long term equity compensation at levels consistent with the surveyed companies, if specified corporate and business unit performance metrics and individual performance objectives are met. We selected this target for compensation to remain competitive in attracting and retaining talented executives. Many of our competitors are significantly larger and have financial resources greater than our own. The competition for experienced, technically proficient executive talent in the industry is currently particularly acute, as companies seek to draw from a limited pool of such executives.

We structure total direct compensation to the named executive officers so that some of this compensation is delivered in the form of equity awards in order to provide incentives to work toward long-term profitable growth that will enhance stockholder returns. We also structure their cash compensation so that a significant portion is at risk under the cash bonus plan, payable based on corporate, business unit and individual performance. In the following sections, we further detail each component of total direct compensation.

Components of Compensation. For the year ended September 30, 2008, the CEO did not receive a base salary. We did not provide additional compensation in the form of annual incentive bonus, long term incentives, retirement benefits, or perquisites.

The following tables and discussion set forth information with respect to all plan and non-plan compensation awarded to, earned by or paid to the Chief Executive Officer ("CEO"), and the Company's four (4) most highly compensated executive officers other than the CEO, for all services rendered in all capacities to the Company and its subsidiaries for each of the Company's last three (3) completed fiscal years; provided, however, that no disclosure has been made for any executive officer, other than the CEO, whose total annual salary and bonus does not exceed $100,000.

The following table and discussions summarize all plan and non-plan compensation earned by or paid to our President for the period ending December 31, 2008. No other executive officer received total annual salary and bonus of at least $100,000 during that period.

SUMMARY COMPENSATION TABLE


Name and Principal Position	Year	Salary	Bonus	Stock Awards	Options Awards	Non equity Incentive Plan Compensation	Nonqualified Deferred Compensation Earnings	All Other Compensation	Total
John. B. Quam; President	2008	-0-	-0-	-0-	-0-	-0-	-0-	-0-	$-0-
	2007	$48,000	-0-	-0-	-0-	-0-	-0-	-0-

Our President, Mr. Quam, was our only salaried executive officer. He was compensated at the rate of $48,000 per year for his part-time service as President of the Company. Mr. Quam devotes approximately 80% of his time and attention to the business of the Company. Beginning May, 2007, Mr. Quam agreed to waive his base salary until the Company has sufficient working capital to pay it.

No executive officer will receive perquisites and other personal benefits which, in the aggregate, exceed the lesser of either $50,000 or 10% of the total of annual salary and bonus paid during the fiscal year.

The following table sets forth summary information related to director compensation during the last completed fiscal year:

DIRECTOR COMPENSATION TABLE

Name

Fees

Earned

Paid

Cash

Stock

Awards

Option

Awards

Non-Equity

Incentive Plan

Compensation

Nonqualified

Deferred

Compensation

Earnings

All

Other

Compensation

Total

John B. Quam; Director and President

John Overturf, Jr.; Director

Board Meeting and Compensation

During the fiscal year ended September 30, 2008 meetings of the Board of Directors were held both in person and telephonically, and business of the board was also conducted by written unanimous consent. All Board members attended 100% of the Board meetings. Directors are entitled to reimbursement of their expenses associated with attendance at such meeting or otherwise incurred in connection with the discharge of their duties as a Director. The Board of Directors has not adopted a compensation plan for outside directors. During fiscal 2008, Directors were not compensated for their services as a Director.

During fiscal 2008 the entire Board of Directors assumed all responsibilities of the Audit, Compensation and Nominating Committees. The board had no formal standing committees, but plans to create those committees when it determines that those committees would be beneficial. No member of the Audit, Compensation or Nominating Committees will receive any additional compensation for his service as a member of that Committee.

Audit Committee

The Board as a whole serves as the audit committee. No Director would qualify as an “audit committee financial expert” within the meaning of Item 407(d)(5) of Regulation SB.

Mr. Quam would not be deemed to be "independent" within the meaning of the National Association of Securities Dealers, Inc.'s listing standards. For this purpose, an audit committee member is deemed to be independent if he does not possess any vested interests related to those of management and does not have any financial, family or other material personal ties to management.

During the fiscal year ended September 30, 2008, the audit committee had no meetings. The committee is responsible for accounting and internal control matters. The audit committee:


	-	reviews with management, the internal auditors and the independent auditors policies and procedures with respect to internal controls;

	-	reviews significant accounting matters;

	-	approves any significant changes in accounting principles of financial reporting practices;

	-	reviews independent auditor services; and

	-	recommends to the board of directors the firm of independent auditors to audit our consolidated financial statements.

In addition to its regular activities, the committee is available to meet with the independent accountants, controller or internal auditor whenever a special situation arises.

The Audit Committee of the Board of Directors will adopt a written charter, which when adopted will be filed with the Commission.

Compensation Advisory Committee

The composition of the compensation advisory committee has not been determined.

The compensation advisory committee did not meet during fiscal 2008. The compensation advisory committee:


	-	recommends to the board of directors the compensation and cash bonus opportunities based on the achievement of objectives set by the compensation advisory committee with respect to our chairman of the board and president, our chief executive officer and the other executive officers;

	-	administers our compensation plans for the same executives;



	-	determines equity compensation for all employees;

	-	reviews and approves the cash compensation and bonus objectives for the executive officers; and

	-	reviews various matters relating to employee compensation and benefits.

Nomination Process

The Board of Directors has not appointed a standing nomination committee and does not intend to do so during the current year. The process of determining director nominees has been addressed by the board as a whole, which consists of two members. The board has not adopted a charter to govern the director nomination process.

Of the currently serving two directors, Mr. Quam would not be deemed to be independent within the meaning of the National Association of Securities Dealers, Inc.'s listing standards. For this purpose, a director is deemed to be independent if he does not possess any vested interests related to those of management and does not have any financial, family or other material personal ties to management.

The board of directors has not adopted a policy with regard to the consideration of any director candidates recommended by security holders, since to date the board has not received from any security holder a director nominee recommendation. The board of directors will consider candidates recommended by security holders in the future. Security holders wishing to recommended a director nominee for consideration should contact Mr. John Quam, President, at the Company's principal executive offices located in Boulder, Colorado and provide to Mr. Neuman, in writing, the recommended director nominee's professional resume covering all activities during the past five years, the information required by Item 401 of Regulation SB, and a statement of the reasons why the security holder is making the recommendation. Such recommendation must be received by the Company before September 30, 2009.

The board of directors believes that any director nominee must possess significant experience in business and/or financial matters as well as a particular interest in the Company's activities.

All director nominees identified in this proxy statement were recommended by our President and Chief Financial Officer and unanimously approved by the board of directors.

Shareholder Communications

Any shareholder of the Company wishing to communicate to the board of directors may do so by sending written communication to the board of directors to the attention of Mr. Clifford L. Neuman, President , at the principal executive offices of the Company. The board of directors will consider any such written communication at its next regularly scheduled meeting.

Any transactions between the Company and its officers, directors, principal shareholders, or other affiliates have been and will be on terms no less favorable to the Company than could be obtained from unaffiliated third parties on an arms-length basis and will be approved by a majority of the Company's independent, outside disinterested directors.

Code of Ethics

Our Board of Directors adopted a Code of Business Conduct and Ethics for all of our directors, officers and employees during the fiscal year ended September 30, 2008. We will provide to any person without charge, upon request, a copy of our Code of Business Conduct and Ethics. Such request should be made in writing and addressed to Investor Relations, B2 Health, Inc., 7750 N. Union Blvd., # 201, Colorado Springs, CO 80920. Further, our Code of Business Conduct and Ethics is filed as an exhibit to this Annual Report on Form 10-K for the fiscal year ended September 30, 2008 and can be reviewed on the website maintained by the SEC at www.SEC.gov.

No family relationship exists between any director and executive officer.

2006 Equity Incentive Plan

On August 7, 2006, we adopted our 2006 Equity Incentive Plan for our officers, directors and other employees, plus outside consultants and advisors. Under the Equity Incentive Plan, our employees, outside consultants and advisors may receive awards of non-qualified options and incentive options, stock appreciation rights or shares of stock. As required by Section 422 of the Internal Revenue Code of 1986, as amended, the aggregate fair market value of our common stock underlying incentive stock options granted to an employee exercisable for the first time in any calendar year may not exceed $100,000. The foregoing limitation does not apply to non-qualified options. The exercise price of an incentive option may not be less than 100% of the fair market value of the shares of our common stock on the date of grant. The same limitation does not apply to non-qualified options. An option is not transferable, except by will or the laws of descent and distribution.

If the employment of an optionee terminates for any reason, (other than for cause, or by reason of death, disability or retirement), the optionee may exercise his options within a 90-day period following such termination to the extent he was entitled to exercise such options at the date of termination. A maximum of 100,000 shares of our common stock are subject to the Equity Incentive Plan. As of the date of this prospectus, no options, stock appreciation rights or bonus stock have been granted under the 2006 Equity Incentive Plan. The purpose of the Equity Incentive Plan is to provide employees, including our officers and employee directors, and non-employee consultants and advisors, with an increased incentive to make significant and extraordinary contributions to our long-term performance and growth, to join their interests with the interests of our shareholders, and to facilitate attracting and retaining employees of exceptional ability.

The Equity Incentive Plan may be administered by the Board or in the Board's sole discretion by the Compensation Committee of the Board or such other committee as may be specified by the Board to perform the functions and duties of the Committee under the Equity Incentive Plan. Subject to the provisions of the Equity Incentive Plan, the Committee and the Board shall determine, from those eligible to be participants in the Equity Incentive Plan, the persons to be granted stock options, stock appreciation rights and restricted stock, the amount of stock or rights to be optioned or granted to each such person, and the terms and conditions of any stock option, stock appreciation rights and restricted stock.

The following table sets forth information concerning unexercised options, stock that has not vested and equity incentive plan awards for each named executive officer outstanding as of the end of the most recently completed fiscal year:

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE


	Option Awards					Stock Awards
Name	Number of Securities Underlying Unexercised Options Exercisable	Number of Securities Underlying Unexercised Options Unexercisable	Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options	Option Exercise Price	Option Expiration Date	Number of Shares or Units of Stock That Have Not Vested	Market Value of Shares or Units That Have Not Vested	Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested	Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
John B. Quam; President	0	0	0	0	0	0	0	0	0
John Overturf, Jr.	0	0	0	0	0	0	0	0	0


ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth information, as of January 20, 2009, with respect to beneficial ownership of our common stock by:


	*	each person who beneficially owns more than 5% of the common stock;
	*	each of our executive officers named in the Management section;
	*	each of our Directors; and
	*	all executive officers and Directors as a group.

The table shows the number of shares owned as of January 20, 2009 and the percentage of outstanding common stock owned as of January 20, 2009. Each person has sole voting and investment power with respect to the shares shown, except as noted.


		Percent of Class
Name and Address of Beneficial Owner⁽¹⁾	Amount and Nature of Beneficial Ownership ^{(2) (4)}	Before Offering^{(3) (4)}

Estate of John R. Overturf, Jr	177,500	35.1%
John B. Quam	52,500	10.4%
Triumph Capital, Inc.	50,000	9.9%
Webquest, Inc.	62,500	12.4%
Calandrella Family Foundation	62,500	12.4%
Glynn Hopkins, II 10940 S. Parker Road # 427 Parker, CO 80134	50,000	9.9%
Harlan B. Munn, III 5758 Singletree Lane Parker, CO 80134	50,000	9.9%
All officers and directors as a group (two persons)	230,000	45.5%


(1)	Unless otherwise stated, address is 7750 N. Union Blvd., Suite 201, Colorado Springs, CO 80920.
(2)	Under SEC Rules, we include in the number of shares owned by each person the number of shares issuable under outstanding options or warrants if those options or warrants are exercisable within 60 days of the date of this prospectus. In calculating percentage ownership, we calculate the ownership of each person who owns exercisable options by adding (i) the number of exercisable options for that person only to (ii) the number of total shares outstanding and dividing that result into (iii) the total number of shares and exercisable options owned by that person.
(3)	Shares and percentages beneficially owned are based upon 713,000 shares outstanding on January 20, 2009..
(4)	Does not include shares to be issued under the Credit Agreement between John Overturf, Jr. and the Company, dated April 3, 2007.


ITEM 13.		CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Effective March 24, 2006, we issued 250,000 founders shares for an aggregate consideration of $2,500. Two of the investors who acquired founder’s shares are listed below.

Name

Number of Shares

Consideration

John B. Quam

50,000

$500.00

John R. Overturf, Jr.

50,000

$500.00

Also effective March 24, 2006, we issued an additional 250,000 shares for aggregate consideration of $100,000 to two investors as set forth below.

Name

Number of Shares

Consideration

Triumph Capital, Inc.

125,000

$50,000.00

John R. Overturf, Jr.

125,000

$50,000.00

In September, 2006, we redeemed 62,500 shares from Triumph Capital, Inc., in consideration of payment in the amount of $25,000. We then sold an additional 62,500 shares to the Calendrella Family Foundation, a Colorado not-for-profit corporation, in consideration of $25,000.

Effective April, 2007 we issued an additional 5,000 shares in consideration of services rendered to the Company to the following:

Name

Number of Shares

Consideration

John Quam

2,500

Services

John R. Overturf, Jr.

2,500

Services

In April 2007, the Company entered into a Credit Agreement (the “Credit Agreement”) with John R. Overturf, Jr., one of our directors and principal shareholders. Specifically, Mr. Overturf made a credit facility available to the Company in the maximum amount of $50,000. Pursuant to the terms of the Credit Agreement, Mr. Overturf will make loans to the Company, each an Advance, in such amounts as the Company may request from time to time. When needed, the Company will use these Advances to finance its operations. Interest will accrue on the daily outstanding credit balance at the rate of ten percent (10%) per annum. Interest, including default interest, is payable either in cash or in shares of the Company’s common stock valued at $0.50 per share, at the option of Mr. Overturf. In addition, as additional consideration to Mr. Overturf for making the Advances , Mr. Overturf is entitled to a financing fee of 10 shares of common stock of the Company for every $1,000 of the maximum credit balance under the Credit Agreement. Our obligation under the Credit Agreement is secured by a security interest covering all of the Company’s tangible and intangible assets.


ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table details the aggregate fees billed to the Company by Ronald R. Chadwick, PC its current accountant, for each of the last two fiscal years:


	2008	2007
Audit Fees	$ 5,600	$ 5,000
Audit-Related Fees	4,500	3,500
Tax Fees	0	0


All Other Fees	0	0
Total	$10,100	$ 8,500

The caption "Audit Fees" includes professional services rendered for the audit of the annual consolidated financial statements and review of the quarterly consolidated financial statements.

It is the policy of the Board of Directors, acting as the audit committee to pre-approve all services to be performed by the independent accountants.

PART IV


ITEM 15.			EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
	Exhibit No.				Title

*		3.1		Certificate of Incorporation of B2 Health, Inc. dated March 8, 2006
*		3.2		By-Laws of B2 Health, Inc.
*		5		Opinion re: Legality
*		10.1		Equity Incentive Plan
*		10.2		Manufacturing Agreement between Back 2 Health, Ltd. and Technology Driven Products, Inc., dated February 20, 2007
*		10.3		Nondisclosure Agreement between Back 2 Health, Ltd. and Precision Metal Manufacturing, Inc. dated February 6, 2007.
*		10.4		Redemption Agreement between B2 Health, Inc. and Triumph Capital, Inc., dated September, 2006.
*		10.5		Form of Subscription Agreement
*		10.6		Credit Agreement dated April 3, 2007
*		10.7		Fund Escrow Agreement
*		10.8		General Security Agreement
**		14.1		Code of Business Conduct and Ethics
***		31		Certification required by Section 13a-14(a) of the Exchange Act
***		32		Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
______________________
*				Incorporated by reference from the Company’s Registration Statement on Form SB-2, SEC File No. 333- 145999 as declared effective by the Commission on October 30, 2007.
**				Previously filed
***				Filed 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 annual report to be signed on its behalf by the undersigned, thereunto duly authorized.


	B2 HEALTH, INC.

Date: January 28, 2009	By:_/s/ John Quam_________ John Quam, President, Principal Executive Officer and Principal Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.


SIGNATURE	TITLE	DATE
_/s/ John Quam_____ John Quam	President, Principal Executive Officer, Principal Financial Officer & Director	January 28, 2009