Attached files

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EX-32.1 - EXHIBIT 32.1 - Panache Beverage, Inc.ex32_1.htm
EX-32.2 - EXHIBIT 32.2 - Panache Beverage, Inc.ex32_2.htm
EX-31.2 - EXHIBIT 31.2 - Panache Beverage, Inc.ex31_2.htm
EX-31.1 - EXHIBIT 31.1 - Panache Beverage, Inc.ex31_1.htm
 


U.S. Securities and Exchange Commission
Washington, D.C. 20549
 
FORM 10-Q
 
[X]
Quarterly Report Under Section 13 or 15(d) of The Securities Exchange Act of 1934 for the Quarterly Period Ended September 30, 2009.

[  ]
Transition Report Under Section 13 or 15(d) of The Securities Exchange Act of 1934 for the Transition Period from _______ to _______

Commission File Number: 000-52670
 
BMX DEVELOPMENT CORP.
 
(Exact name of small business issuer as specified in its charter)
 
FLORIDA
20-2089854
(State or other jurisdiction of
(IRS Employer Identification No.)
incorporation or organization)
 
 
19720 Jetton Road, 3rd Floor
Cornelius, North Carolina 28031
(Address of principal executive offices)

704-892-8733
(Issuer's telephone number)
 
Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No []

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [] No []
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer 
¨
Non-accelerated filer 
¨ (Do not check if a smaller reporting company) 
Accelerated filer 
¨
Smaller reporting company 
þ

Indicate by check mark whether the registrant is a shell company (as defined in rule 12b-2 of the exchange act). Yes [ ] No [X]

Number of shares of common stock outstanding as of November 11, 2009:      4,914,500
 
 
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION
 
The discussion contained in this 10-Q under the Securities Exchange Act of 1934, as amended, contains forward-looking statements that involve risks and uncertainties. The issuer's actual results could differ significantly from those discussed herein. These include statements about our expectations, beliefs, intentions or strategies for the future, which we indicate by words or phrases such as "anticipate," "expect," "intend," "plan," "will," "we believe," "the Company believes," "management believes" and similar language, including those set forth in the discussions under "Notes to Consolidated Financial Statements" and "Management's Discussion and Analysis or Plan of Operation" as well as those discussed elsewhere in this Form 10-Q. We base our forward-looking statements on information currently available to us, and we assume no obligation to update them. Statements contained in this Form 10-Q that are not historical facts are forward-looking statements that are subject to the "safe harbor" created by the Private Securities Litigation Reform Act of 1995.
 
 





                                                                                                                      
 
   
PART I. FINANCIAL INFORMATION
 
   
   
   
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
4
   
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
9
   
ITEM 3. QUANTITATIVE ANDQUALITATIVE DISCLOSURES ABOUT MARKET RISK
    11
   
   
PART II. OTHER INFORMATION
 
   
ITEM 1. LEGAL PROCEEDINGS
12
   
ITEM 1A. RISK FACTORS
     12
   
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
12
   
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
     12
   
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
     12
   
ITEM 5. OTHER INFORMATION
 12
   
ITEM 6. EXHIBITS
12
   
SIGNATURES
13
   
INDEX TO EXHIBITS
14
 
 
 
                                                                         
 
 
2

 
 
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

INDEX TO BMX DEVELOPMENT CORP. CONSOLIDATED FINANCIAL STATEMENTS

BMX Development Corp
 
 
Page
   
Consolidated Balance Sheets
4
   
Consolidated Statements of Operations
5
   
Consolidated Stockholders' Equity                                                                                                                                                                                                                                             6
   
Consolidated Statements of Cash Flows
7
   
Notes to Condensed Consolidated Financial Statements
8
 
                                                                                                                                                                          
3



 
BMX DEVELOPMENT CORP.
AS OF SEPTEMBER 30, 2009 AND DECEMBER 31, 2008
             
             
   
Unaudited
   
Audited
 
ASSETS
 
9/30/2009
   
12/31/2008
 
   
 
   
 
 
CURRENT ASSETS:
           
Cash
  $ 107,350     $ 87,074  
TOTAL CURRENT ASSETS
    107,350       87,074  
                 
FIXED ASSETS:
               
Machinery and equipment
    65,000       65,000  
Accumulated depreciation
    (62,833 )     (56,333 )
TOTAL FIXED ASSETS
    2,167       8,667  
                 
TOTAL ASSETS
  $ 109,517     $ 95,741  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
               
                 
CURRENT LIABILITIES
               
Accounts payable
  $ 700     $ 3,975  
Due to related party
    5,000       5,000  
Current portion of bank note payable
    1,394       1,394  
TOTAL CURRENT LIABILITIES
    7,094       10,369  
                 
LONG-TERM LIABILITIES
               
Bank note payable
    3,472       4,387  
TOTAL LONG-TERM LIABILITIES
    3,472       4,387  
                 
STOCKHOLDERS' EQUITY
               
Common stock ($.001 par value, 200,000,000 shares authorized; 4,914,500 and 4,896,000 shares issued and outstanding at September 30, 2009 and December 31, 2008, respectively)
    4,915       4,896  
Additional paid in capital
    286,452       220,248  
Retained deficit
    (192,416 )     (144,159 )
TOTAL STOCKHOLDERS' EQUITY
    98,951       80,985  
 
               
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
  $ 109,517     $ 95,741  
                 
                 
 
               
                 
The accompanying notes are an integral part of these consolidated financial statements
         

 
4

 
 
BMX DEVELOPMENT CORP.
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
 
                         
 
                       
(Unaudited)
 
For the Three Months
   
For the Nine Months
 
   
Ended September 30,
   
Ended September 30,
 
   
2009
   
2008
   
2009
   
2008
 
REVENUES:
                       
Sales
  $ 1,075     $ 7,192     $ 5,528     $ 32,591  
Cost of sales
    (436 )     (4,096 )     (2,505 )     (19,488 )
Gross profit
    639       3,096       3,023       13,103  
                                 
EXPENSES:
                               
Selling, general and administrative expenses
    2,728       6,938       49,543       33,712  
Total expenses
    2,728       6,938       49,543       33,712  
                                 
Loss from operations
  $ (2,089 )   $ (3,842 )   $ (46,520 )   $ (20,609 )
                                 
Interest expense
    (576 )     (1,709 )     (1,737 )     (4,638 )
                                 
Loss before income taxes
    (2,665 )     (5,551 )     (48,257 )     (25,247 )
                                 
Provision for income taxes
    -       -       -       -  
                                 
NET LOSS
  $ (2,665 )   $ (5,551 )   $ (48,257 )   $ (25,247 )
                                 
Basic and fully diluted net loss per common share:
  $ **     $ **     $ **     $ **  
                                 
Weighted average common shares outstanding
    4,914,500       4,796,000       4,905,250       4,796,000  
                                 
** Less than $.01
                               
                                 
 
The accompanying notes are an integral part of these consolidated financial statements
 
 
5

 
 
BMX DEVELOPMENT CORP.
 
 
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
 
                         
                     
 
 
(Unaudited)
                   
 
 
         
Additional
   
 
 
   
Common Stock
   
Paid-in
   
Retained
 
   
Shares
   
Amount
   
Capital
   
Deficit
 
                         
Balances, January 1, 2009
    4,896,000     $ 4,896     $ 220,248     $ (144,159 )
                                 
Fair value of rent contributed by related party
    -       -       8,100       -  
                                 
Fair value of warrants issued to investors
    -       -       21,123       -  
                                 
Issuance of common shares to accredited investors
    18,500       19       36,981       -  
                                 
Net loss for the nine months ended September 30, 2009
    -       -       -       (48,257 )
                                 
Balances, September 30, 2009
    4,914,500     $ 4,915     $ 286,452     $ (192,416 )
                                 
                                 

The accompanying notes are an integral part of these consolidated financial statements
 
6

 
BMX DEVELOPMENT CORP.
 
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
 
   
 
       
             
   
Unaudited
   
Unaudited
 
   
2009
   
2008
 
CASH FLOWS FROM OPERATING ACTIVITIES:
           
Net (loss)
  $ (48,257 )   $ (25,247 )
Adjustments to reconcile (net loss) to net cash
               
    (used in) operations:
               
Depreciation
    6,500       9,750  
Fair value of warrants issued to accredited investors
    21,123       -  
      Fair value of rent contributed by related party
    8,100       8,100  
Increase (decrease) in operating liabilities
               
Accounts payable
    (3,275 )     (3,247 )
NET CASH (USED IN) OPERATING ACTIVITIES
    (15,809 )     (10,644 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES:
               
Issuance of common shares to accredited investors
    37,000       -  
Principal repayments of bank note payable
    (915 )     (1,026 )
NET CASH PROVIDED BY (USED) IN FINANCING ACTIVITIES
    36,085       (1,026 )
                 
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    20,276       (11,670 )
                 
CASH AND CASH EQUIVALENTS,
               
BEGINNING OF THE PERIOD
    87,074       57,548  
                 
END OF THE PERIOD
  $ 107,350     $ 45,878  
                 
                 
The accompanying notes are an integral part of these consolidated financial statements
 
7

 
 
BMX DEVELOPMENT CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Three and Nine Months Ended September 30, 2009 and 2008

NOTE 1                      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
Business Activity
 
BMX Development Corp., (the “Company”) is a motor cycle repair service company located in the Charlotte, North Carolina area. The Company was certified as incorporated in the State of Florida officially on January 3, 2005 although the articles of incorporation were filed on December 28, 2004. Accordingly, under Florida Statutes 607.0203, the effective date for corporate existence was December 28, 2004, within five business days of the certification thereto. On May 30, 2007, the Company legally changed its name to BMX Development Corp. to better suit the business in which it currently operates in.

Basis of Presentation
The consolidated financial statements include the accounts of BMX Development Corp. and its wholly owned subsidiary under the accrual basis of accounting. All intercompany accounts and transactions have been eliminated.

Management’s Use of Estimates
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
 
Deferred Taxes
Income taxes are provided in accordance with Statement of Financial Accounting Standards No. 109 (SFAS No. 109), “Accounting for Income Taxes.” A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss-carry forwards.

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 asset will not be realized. Deferred tax assets and liabilities are adjusted for the effect of changes in tax laws and rates on the date of enactment.

Financial Instruments
The Company’s consolidated financial instruments are cash and accounts payable. The recorded values of cash and accounts payable approximate their fair values based on their short-term nature.

Cash and Cash Equivalents - For purposes of the Statement of Cash Flows, the Company considers highly liquid investments with an original maturity of three months or less to be cash equivalents.
 
Revenue Recognition – Revenue is recognized when repair services are completed provided collection of the resulting receivable is probable.

Comprehensive Income (Loss) - The Company adopted Financial Accounting Standards Board Statement of Financial Accounting Standards No. 130, “Reporting Comprehensive Income”, which establishes standards for the reporting and display of comprehensive income and its components in the consolidated financial statements. There were no items of comprehensive income (loss) applicable to the Company during the period covered in the consolidated financial statements.
 
Loss Per Share - The Company reports loss per share in accordance with Statement of Financial Accounting Standard (SFAS) No.128. This statement requires dual presentation of basic and diluted earnings (loss) with a reconciliation of the numerator and denominator of the loss per share computations. Basic earnings per share amounts are based on the weighted average shares of common outstanding. If applicable, diluted earnings per share would assume the conversion, exercise or issuance of all potential common stock instruments such as options, warrants and convertible securities, unless the effect is to reduce a loss or increase earnings per share. There were no adjustments required to consolidated net loss for the period presented in the computation of consolidated diluted earnings per share.
 

Impairment of Long-Lived Assets - In accordance with SFAS No. 144, the Company reviews and evaluates its long-lived assets for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable. When such factors and circumstances exist, including those noted above, the Company compares the assets’ carrying amounts against the estimated undiscounted cash flows to be generated by those assets over their estimated useful lives. If the carrying amounts are greater than the undiscounted cash flows, the fair values of those assets are estimated by discounting the projected cash flows. Any excess of the carrying amounts over the fair values are recorded as impairments in that fiscal period.

Property and Equipment - Property and equipment is stated at cost. Depreciation is provided by the straight-line method over the estimated economic life of the property and equipment remaining from five to seven years. Depreciation ceases once the net book value of the property and equipment reaches its net residual value.

When assets are sold or retired, their costs and accumulated deprecation are eliminated from the accounts and any gain or loss resulting from their disposal is included in the statement of operations.

The Company recognizes an impairment loss on property and equipment when evidence, such as the sum of expected future cash flows (undiscounted and without interest charges), indicates that future operations will not produce sufficient revenue to cover the related future costs, including depreciation, and when the carrying amount of the asset cannot be realized through sale. Measurement of the impairment loss is based on the fair value of the assets.

Risk and Uncertainties - The Company is subject to risks common to companies in the service industry, including, but not limited to, litigation, development of new technological innovations and dependence on key personnel.

Share-Based Payments - In December 2004, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 123 (R), “Share-Based Payment”, which establishes standards for transactions in which an entity exchanges its equity instruments for goods and services. This standard replaces SFAS No. 123 and supersedes Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock-Based Compensation”. This standard requires a public entity to measure the cost of employee services, using an option-pricing model, such as the Black-Scholes Model, received in exchange for an award of equity instruments based on the grant-date fair value of the award. This eliminates the exception to account for such awards using the intrinsic method previously allowable under APB No. 25. Shares of commons stock issued for services rendered by a third party are recorded at fair market value, generally the quote at the close of market trading on the day for issuance of the stock or most recent sale. The Company adopted this standard in prior years using the modified prospective method.

Recent Accounting Pronouncements - In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. However, in February 2008, the FASB Staff Position No. 157-2 was issued, which delays the effective date of the requirements of SFAS 157 as to nonfinancial assets and nonfinancial liabilities except for items that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis. The effective date has been deferred to fiscal years beginning after November 15, 2008 for these nonfinancial assets and liabilities. The Company’s adoption of SFAS 157 on January 1, 2008 did not have a material impact on its consolidated financial position, results of operations or cash flows during the year ended December 31, 2008. The Company does not expect the deferred portion of the adoption of SFAS 157 to have a material impact on its consolidated financial statements.
 
8

 
BMX DEVELOPMENT CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Three and Nine Months Ended September 30, 2009 and 2008

NOTE 1                      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

In December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations” (“SFAS 141R”).  SFAS 141R establishes principles and requirements for how the acquirer in a business combination recognizes and measures in its financial statements the fair value of identifiable assets acquired, the liabilities assumed and any noncontrolling interest in the acquiree at the acquisition date. SFAS 141R determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS 141R is effective for fiscal years beginning after December 15, 2008. The Company is currently evaluating the impact of adopting SFAS 141R on its results of consolidated operations and consolidated financial condition and plans to adopt it as required in the first quarter of fiscal 2009.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements” (“SFAS 160”), an amendment of Accounting Research Bulletin No. 51, “Consolidated Financial Statements” (“ARB 51”).  SFAS 160 establishes accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. Minority interests will be recharacterized as noncontrolling interests and will be reported as a component of equity separate from the parent’s equity, and purchases or sales of equity interests that do not result in a change in control will be accounted for as equity transactions. In addition, net income attributable to the noncontrolling interest will be included in consolidated net income on the face of the income statement and upon a loss of control, the interest sold, as well as any interest retained, will be recorded at fair value with any gain or loss recognized in earnings. This pronouncement is effective for fiscal years beginning after December 15, 2008. The Company is currently evaluating the impact of adopting SFAS 160 on its consolidated results of operations and consolidated financial condition and plans to adopt it as required in the first quarter of fiscal 2009.

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities — an amendment to FASB Statement No. 133.” SFAS No. 161 is intended to improve financial standards for derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position, financial performance, and cash flows. Entities are required to provide enhanced disclosures about: (a) how and why an entity uses derivative instruments; (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations; and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. It is effective for financial statements issued for fiscal years beginning after November 15, 2008, with early adoption encouraged. The adoption of this statement, which is expected to occur in the first quarter of 2009, is not expected to have a material effect on the Company’s consolidated financial statements.
 
In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles.” SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States. It is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles.” The adoption of this statement is not expected to have a material effect on the Company’s consolidated financial statements.
 
In May 2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts — an interpretation of FASB Statement No. 60.” SFAS No. 163 requires that an insurance enterprise recognize a claim liability prior to an event of default when there is evidence that credit deterioration has occurred in an insured financial obligation. It also clarifies how Statement No. 60 applies to financial guarantee insurance contracts, including the recognition and measurement to be used to account for premium revenue and claim liabilities, and requires expanded disclosures about financial guarantee insurance contracts. It is effective for financial statements issued for fiscal years beginning after December 15, 2008, except for some disclosures about the insurance enterprise’s risk-management activities. SFAS No. 163 requires that disclosures about the risk-management activities of the insurance enterprise be effective for the first period beginning after issuance. Except for those disclosures, earlier application is not permitted. The adoption of this statement is not expected to have a material effect on the Company’s consolidated financial statements.

On May 9, 2008, the FASB issued FASB Staff Position (“FSP”) APB 14-1, “Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement).” FSP APB 14-1 clarifies that convertible debt instruments that may be settled in cash upon conversion (including partial cash settlement) are not addressed by paragraph 12 of APB Opinion No. 14, “Accounting for Convertible Debt and Debt Issued with Stock Purchase Warrants.” Additionally, FSP APB 14-1 specifies that issuers of such instruments should separately account for the liability and equity components in a manner that will reflect the entity’s nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. FSP APB14-1 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. FSP APB 14-1 will be effective for the Company on January 1, 2009. The adoption of FSP APB 14-1 is not expected to have a material impact on the Company’s consolidated results of operations or its consolidated financial position.

On June 16, 2008, the FASB issued FSP EITF 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities”, to address the question of whether instruments granted in share-based payment transactions are participating securities prior to vesting. FSP EITF 03-6-1 indicates that
 
Recent Accounting Pronouncements (cont.) –   unvested share-based payment awards that contain rights to dividend payments should be included in earnings per share calculations. The guidance is effective for fiscal years beginning after December 15, 2008. FSP EITF 03-6-1 will be effective for the Company on January 1, 2009. The adoption of FSP EITF 03-6-1 is not expected to have a material impact on the Company’s consolidated results of operations or consolidated financial position.

In June 2008, the FASB issued EITF Issue 07-5 (EITF 07-5), “Determining whether an Instrument (or Embedded Feature) is indexed to an Entity’s Own Stock.” EITF 07-5 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. Early application is not permitted. Paragraph 11(a) of SFAS No. 133 “Accounting for Derivatives and Hedging Activities”, specifies that a contract that would otherwise meet the definition of a derivative but is both (a) indexed to the Company’s own stock and (b) classified in stockholders’ equity in the statement of financial position would not be considered a derivative financial instrument. EITF 07-5 provides a new two-step model to be applied in determining whether a financial instrument or an embedded feature is indexed to an issuer’s own stock and thus able to qualify for the SFAS No. 133 paragraph 11(a) scope exception. EITF 07-5 will be effective for the Company on January 1, 2009. The adoption of EITF 07-5 is not expected to have a material impact on the Company’s consolidated financial statements.

In June 2008, the FASB issued FSP EITF 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions are Participating Securities” (FSP 03-6-1). FSP 03-6-1 clarifies that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and are to be included in the computation of earnings per share under the two-class method described in SFAS No. 128, “Earnings Per Share”. This FSP will be effective for the Company on January 1, 2009 and requires that all prior-period earnings-per-share data that are presented be adjusted retrospectively. The Company does not expect FSP 03-6-1 to have a material impact on its earnings per share calculations.

In October 2008, the FASB issued FSP No. 157-3, “Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active” (FSP 157-3). FSP 157-3 clarifies the application of SFAS 157 in a market that is not active and provides an example to illustrate key considerations in determining the fair value of a financial asset when the market for that financial asset is not active. As it relates to the Company’s financial assets and liabilities recognized or disclosed at fair value in the Company’s consolidated financial statements on a recurring basis (at least annually), the adoption of FSP 157-3 did not have a material impact on the Company’s consolidated financial statements.

9


BMX DEVELOPMENT CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Three and Nine Months Ended September 30, 2009 and 2008


NOTE 1                      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 
In November 2008, the EITF reached consensus on Issue No. 08-6, “Equity Method Investment Accounting Considerations” (EITF 08-6), which clarifies the accounting for certain transactions and impairment considerations involving equity method investments.
The intent of EITF 08-6 is to provide guidance on (i) determining the initial carrying value of an equity method investment, (ii) performing an impairment assessment of an underlying indefinite-lived intangible asset of an equity method investment, (iii) accounting for an equity method investee’s issuance of shares, and (iv) accounting for a change in an investment from the equity method to the cost method. EITF 08-6 is effective for the Company’s year beginning January 1, 2009 and is to be applied prospectively. The adoption of Issue No. 08-6 is not expected to have a material impact on the Company’s consolidated financial position or consolidated results of operations.

In December 2008, the FASB issued FSP FAS 140-4 and FIN 46(R)-8, “Disclosures by Public Entities (Enterprises) About Transfers of Financial Assets and Interest in Variable Interest Entities” (FSP 140-4). FSP 140-4 requires additional disclosure about transfers of financial assets and an enterprise’s involvement with variable interest entities. FSP 140-4 was effective for the first reporting period ending after December 15, 2008. The adoption of FSP 140-4 did not have any impact on the Company’s consolidated financial statements.

In December 2008, the FASB issued FSP No.132 (R)-1, “Employers’ Disclosures about Pensions and Other Postretirement Benefits” (FSP 132R-1). FSP 132R-1 requires enhanced disclosures about the plan assets of a Company’s defined benefit pension and other postretirement plans. The enhanced disclosures required by this FSP are intended to provide users of financial statements with a greater understanding of: (1) how investment allocation decisions are made, including the factors that are pertinent to an understanding of investment policies and strategies; (2) the major categories of plan assets; (3) the inputs and valuation techniques used to measure the fair value of plan assets; (4) the effect of fair value measurements using significant unobservable inputs (Level 3) on changes in plan assets for the period; and (5) significant concentrations of risk within plan assets. This FSP will be effective for the Company’s year beginning January 1, 2009 and is not expected to have a material impact on its consolidated financial statements.

 
NOTE 2                      INCOME TAXES
 
At September 30, 2009, the Company had federal and state net operating loss carry forwards of approximately $126,000 that expire in the year 2020.

Due to operating losses, there is no provision for current federal or state income taxes for the three months ended September 30, 2009 and 2008.
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amount used for federal and state income tax purposes.

The Company’s deferred tax asset at September 30, 2009 consists of net operating loss carry forwards calculated using federal and state effective tax rates equating to approximately $27,000 less a valuation allowance in the amount of approximately $27,000. Because of the Company’s lack of earnings history, the deferred tax asset has been fully offset by a valuation allowance. The valuation allowance increased by approximately $6,000 for the nine month period ended September 30, 2009.
 
The Company’s total deferred tax asset as of September 30, 2009 is as follows:
 
 
 Net operating loss carry forwards                                                     $   27,000
 Valuation allowance                                                                               (27,000)
 
Net deferred tax asset                                                    $           --
                    =======

The reconciliation of income taxes computed at the federal and state statutory income tax rate to total income taxes for the three and nine months ended September 30, 2009 and 2008 is as follows:

  Income tax computed at the federal statutory rate                                34%
Income tax computed at the state statutory rate                                     5%
Valuation allowance                                                                               (39%)

Total deferred tax asset                                                                             0%


NOTE 3                      CAPITAL STOCK
The Company is authorized to issue 200,000,000 common shares at $.001 par value per share.
 
In the first quarter of 2009, the Company issued 18,500 shares of its restricted common stock to four accredited investors in exchange for $37,000 in cash. The Company also issued an equal warrant for each share sold. See Note 9 below for disclosure of the warrants. The Company recorded $21,123 in expense during the three months ended June 30, 2009 to record the fair market value of the warrants issued based on the Black Scholes option-pricing model.

 
NOTE 4                      LOSS PER SHARE
Loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. Basic and diluted loss per share was the same for the three and nine months ended September 30, 2009 and 2008.

NOTE 5                      SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental disclosures of cash flow information for the nine months ended September 30, 2009 and 2008 are summarized as follows:
 
        Cash paid during the periods for interest and income taxes:
 

2009                                2008

Income Taxes                                                       $   --                                 $  --

Interest                                                                $1,737                               $4,638

NOTE 6                      GOING CONCERN AND UNCERTAINTY

The Company has suffered recurring losses from operations since inception. In addition, the Company has yet to generate an internal cash flow from its business operations. These factors raise substantial doubt as to the ability of the Company to continue as a going concern.

Management’s plans with regard to these matters encompass the following actions: 1) obtain funding from new investors to alleviate the Company’s working deficiency, and 2) implement a plan to generate sales. The Company’s continued existence is dependent upon its ability to resolve it liquidity problems and increase profitability in its current business operations. However, the outcome of management’s plans cannot be ascertained with any degree of certainty. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of these risks and uncertainties.

NOTE 7                      BANK NOTE PAYABLE

The Company has a term bank note payable to an unrelated banking institution bearing annual interest of 10.25%, secured by equipment with a net book value of $2,167 at September 30, 2009. The note was originally for $9,900 and consists of eighty-four monthly payments of principal and interest of $168 with principal maturity in December, 2011.

Principal maturities of the bank note payable as of September 30, 2009 for the next five years with none due thereafter are as follows:

2009                                           $       1,394
2010                                           $       1,728
2011                                           $       1,744
Total                                           $       4,866
                                                    ========

NOTE 8                      LEASE COMMITMENT AND RELATED PARTY TRANSACTION

The Company has a three year lease at $100 per month with a related party company that is partially owned by its President. The lease expires on December 31, 2009 and, therefore, no future minimum lease commitment exists beyond one year.

The Company also has an oral, month-to-month lease with an individual related to the Company’s Vice President. The lease is gratuitous and consists of approximately 1,100 square feet of space including a bay area, shop and office. The consolidated financial statements herein include the imputed fair value of the space at $900 per month based upon comparables in the area.

At September 30, 2009, the Company owes $5,000 plus accrued interest to a company related through common ownership with the Company’s officer, director and majority shareholder for money it borrowed in prior years.

NOTE 9                      STOCK WARRANTS

During the three months ended June 30, 2009, the Company issued 18,500 stock warrants to four unrelated accredited investors who subscribed to the Company’s common stock. The stock warrants allow the unrelated parties to purchase shares of the Company’s stock at $2.00 per share per the individual signed warrant agreement. The warrants allow the unrelated parties to purchase one common share of the Company’s common stock for each warrant. The warrants expire in February, 2012 per the individual warrant agreement. The Company did not grant any registration rights with respect to any shares of common stock issuable upon exercise of the warrants. The Company recorded an expense of $21,123 equal to the estimated fair value of the options at the date of grants. The fair market value was calculated using the Black-Scholes options pricing model, assuming approximately 5% risk-free interest, 0% dividend yield, 65% volatility, $2.00 per share strike price, and a life of three years.
 
 
Stock warrants outstanding and exercisable on September 30, 2009 are as follows:
 
Exercise
Shares Under
Remaining Life
Price per  Share
Option
In Years
Outstanding:
   
$1.50
96,000
1.25
$2.00
18,500
2.40
     
Exercisable:
   
$1.50
96,000
1.25
$2.00
18,500
2.40
 
10

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

As used herein the terms "we", "us", "our," the “Registrant,” “BMX” and the "Company" means, BMX Development Corp., a Florida corporation. These terms also refer to our wholly-owned subsidiary corporation, Johnson High Performance, Inc. (“JHP”), organized and existing under the laws of North Carolina on September 1, 2004, acquired on April 27, 2007.


GENERAL DESCRIPTION OF BUSINESS

We were incorporated on December 28, 2004 under the name Biometrix International, Inc. On May 30, 2007, we filed an amendment to the Articles of Incorporation with the Secretary of State of Florida to change our corporate name to BMX Development Corp. On April 27, 2007, we acquired our sole wholly-owned subsidiary, Johnson High Performance, Inc. ("JHP"). After the acquisition, we changed our corporate name to BMX Development Corp. as mentioned above and began the business for motorcycle repairs.

On April 27, 2007, BMX (legal acquirer) executed a Plan of Exchange with JHP (accounting acquirer), the sole shareholder of JHP, pursuant to which BMX issued the new 200,000 common shares to Dean A. Stewart, sole shareholder of JHP, pursuant to Regulation D under the Securities Act of 1933, as amended, in exchange for all of the common shares of JHP. As a result, JHP became the wholly-owner subsidiary of BMX.

The above mentioned stock exchange transaction has been accounted for as a reverse acquisition and recapitalization of BMX whereby JHP is deemed to be the accounting acquirer (legal acquiree) and BMX to be the accounting acquiree (legal acquirer). The accompanying consolidated financial statements are in substance those of JHP, with the assets and liabilities, and revenues and expenses, of BMX being included effective from the date of stock exchange transaction. BMX is deemed to be a continuation of the business of JHP. Accordingly, the accompanying consolidated financial statements include the following:

 
(1) The balance sheet consists of the net assets of the accounting acquirer at historical cost and the net assets of the accounting acquiree at historical cost;

 
(2) the financial position, results of operations, and cash flows of the acquirer for all periods presented as if the recapitalization had occurred at the beginning of the earliest period presented and the operations of the accounting acquiree from the date of stock exchange transaction.

Since the completion of the Plan of Exchange, which was on April 27, 2007, we have continued operations of JHP. Prior to the merger with JHP, we were an inactive, dormant shell corporation. We had been dormant since December, 2004 with operations consisting of only organizational activities. Management decided that the repair and servicing of motor cycles would be beneficial, thus we acquired a business in this field.

Our operations primarily involve street and off-road motorcycle servicing and repair, specializing in affordable brand name and after-market replacement products. Through our emphasis on budget pricing and high quality service, we have developed a market in the motorcycle service industry in the local Charlotte, North Carolina area and a fifty mile surrounding area. We currently operate one office and one service bay area that is maintained by a management team of two individuals. The present geographic area we operate in includes primarily the Mecklenburg County, and Iredell County areas of North Carolina. Our subsidiary’s phone number is (336) 992-0241. This is the number used by customers and for all other business related matters.

Marketing for our services is accomplished through print ads in newspapers as well as wholesale referrals. Additionally, we utilize a network of motor cycle owners and obtain business through networking with them.

The motorcycle repair service industry is highly competitive with respect to price, service, quality, and location. There are numerous competitors in the motorcycle repair servicing industry that possess substantially greater financial, marketing, personnel and other resources. There can be no assurance that we will be able to respond to various competitive factors affecting the business. We plan to gain a competitive advantage over our competitors in the motorcycle repair servicing industry by offering quality services at a low price.

We believe our quality and good customer service will differentiate our services from our competitors. For example, many of our listed prices currently match or are lower than the advertised prices of our major competitors. Also, we offer next day servicing on our repairs and our customer service professionals have an average of five years in the motorcycle industry which allows them to better serve our customers. However, since many of our competitors have greater brand loyalty and more capital resources than we do, there can be no assurance we will be successful in gaining that competitive advantage in our marketplace.

Our main markets are individual retail customers and wholesale buyers and no single customer makes up more than ten percent of our total revenues. We do not expect that this will change in the future.

We have two full-time employees. We also have two management consultants that are each independently contracted by us to service and provide financial consulting and services.
 
Our service line consists primarily of the following:
·  
Air filters
·  
Air shifters
·  
Carburetors
·  
Cylinders
·  
Exhaust systems
·  
Fuel valves
·  
Gaskets
·  
Ignitions
·  
Piston kits
·  
Race engine valves
·  
RPM limiters
·  
Throttle assemblies
·  
Tires
·  
Transmission and clutch parts
·  
Valves
·  
Velocity stacks
·  
Wheels
 
We provide installation services for these products.

No single customer accounts for more than ten percent of our business. At the present time there is no need for governmental approvals, though this may change in the future.

Servicing

Our tool inventory consists of products which we purchase from wholesalers. Of our 200 total square feet of facility, 100 square feet is dedicated to accounting, administration, billing, etc. We do provide installation and repair services from this facility.

Pricing

The price range of motor cycle replacement parts varies from market to market, affected by several factors including brand recognition, marketing strategies, quality, warranties, payment terms etc. A strategy primarily focused on being the lowest price typically results in more intense competition and lower profit margin. Therefore, on many of our services we offer multiple value choices in a good/better/best assortment, with appropriate price and quality differences from the “good” products to the “better” and “best” products. We believe that our overall prices compare favorably to those of our competitors.

Marketing

We believe that targeted advertising and marketing play important roles in succeeding in today’s environment. We will constantly work to understand our customers’ wants and needs so that we can build long-lasting, loyal relationships. We plan to utilize marketing and advertising primarily to advise customers about the overall importance of motor cycle maintenance, our great value and the availability of high quality service and parts. We are attempting to develop a targeted ‘loyalty program’ as a marketing method of driving new traffic to us. The basic idea of a ‘loyalty program’ is providing incentive discounts to the repeat customers. We will store up our customers' purchase records and set up guidelines to identify qualified customers. Such guidelines may include the total amount spent on repairs, or total visits for our services. For example, we may provide a 10% discount to customers whose total yearly spending exceeds $1,000. The loyalty program is still under development. We believe such incentives will appeal to our targeted customers including garages, service stations and other mechanics that repeatedly purchase use our services. To increase average sales dollars per transaction, we utilize creative promotional materials to increase the chance of up-selling and cross-selling opportunities.

Purchasing and Supply Chain

Replacement parts are selected and purchased from various vendors locally. We currently have several primary suppliers including Kustomwerks and Zippers. Neither of them are related parties. We typically assemble a list of replacement parts and products we need and phone or fax our orders into our suppliers on a daily basis. Most replacement parts and products are delivered to us the same day. We do not have any written distributors agreements with any of our suppliers. If we lost any of our suppliers, we believe we will be able to replace them with a comparable supplier without a material disruption to our business. However, we believe that we currently have good relationships with our suppliers.
 
Environmental Law Compliance
 
 
There are no current existing environmental concerns for our services. If this changes in the future, we make every effort to comply with all such applicable regulations.

11


RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008

The following discussion should be read in conjunction with the consolidated financial statements included in this report and is qualified in its entirety by the foregoing.
 
FORWARD LOOKING STATEMENTS
Certain statements in this report, including statements of our expectations, intentions, plans and beliefs, including those contained in or implied by "Management's Discussion and Analysis" and the Notes to Consolidated Financial Statements, are "forward-looking statements", within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that are subject to certain events, risks and uncertainties that may be outside our control. The words “believe”, “expect”, “anticipate”, “optimistic”, “intend”, “will”, and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. We undertake no obligation to update or revise any forward-looking statements. These forward-looking statements include statements of management's plans and objectives for our future operations and statements of future economic performance, information regarding our expansion and possible results from expansion, our expected growth, our capital budget and future capital requirements, the availability of funds and our ability to meet future capital needs, the realization of our deferred tax assets, and the assumptions described in this report underlying such forward-looking statements. Actual results and developments could differ materially from those expressed in or implied by such statements due to a number of factors, including, without limitation, those described in the context of such forward-looking statements.

Revenues

Sales were $1,075 and $7,192 for the three months ended September 30, 2009 and 2008, respectively. Sales revenues were due primarily to motorcycle repairs and maintenance. The decline in sales was due to fewer advertising in 2009 and a weakening, recessionary economy.

Gross profits were $639 and $3,096 for the three months ended September 30, 2009 and 2008, respectively. Sales revenues were due primarily to motorcycle repairs and maintenance. The decline in quarterly revenues was due to fewer advertising in 2009 and a weakening, recessionary economy.

Sales were $5,528 and $32,591 for the nine months ended September 30, 2009 and 2008, respectively. Sales revenues were due primarily to motorcycle repairs and maintenance. The decline in sales was due to fewer advertising in 2009 and a weakening, recessionary economy.

Gross profits were $3,023 and $13,103 for the nine months ended September 30, 2009 and 2008, respectively. Sales revenues were due primarily to motorcycle repairs and maintenance. The decline in quarterly revenues was due to fewer advertising in 2009 and a weakening, recessionary economy.
 
Income / Loss

We had net losses of $2,665 and $5,551 for the three months ended September 30, 2009 and 2008, respectively. The net losses in these periods were primarily due to the increase in selling, general, and administrative expenses from $2,728 for the three months ended September 30, 2009 compared to $6,938 for the three months ended September 30, 2008.

We had net losses of $48,257 and $25,247 for the nine months ended September 30, 2009 and 2008, respectively. The net losses in these periods were primarily due to the increase in selling, general, and administrative expenses from $49,543 for the nine months ended September 30, 2009 compared to $33,712 for the nine months ended September 30, 2008. The increase in expenses was attributable to the issuance of warrants in the first quarter of 2009 which were recorded at fair value of $21,123 using the Black Scholes option pricing method.
 

Expenses

Operating expenses for the three months ended September 30, 2009 and 2008 were $2,728 and $6,938 respectively.
 
Operating expenses for the nine months ended September 30, 2009 and 2008 were $49,543 and $33,712 respectively. The increase was mainly attributable to the issuance of warrants in the first quarter of 2009 which were recorded at fair value of $21,123 using the Black Scholes option pricing method.


Cost of Sales


Cost of revenue primarily includes sales of purchased motor cycle parts inventory. During the three months ended September 30, 2009, we had cost of revenues of $436, or approximately 40.55% of revenues, and $4,096 for the three months ended September 30, 2008, or approximately 56.95%. The cost of revenue as a percentage of revenue decreased during the three-month period ended September 30, 2009 primarily due to the overall decrease in sales.

Cost of revenue primarily includes sales of purchased motor cycle parts inventory. During the nine months ended September 30, 2009, we had cost of revenues of $2,505, or approximately 45.34% of revenues, and $19,488 for the nine months ended September 30, 2008, or approximately 59.8%. The cost of revenue as a percentage of revenue decreased with overall sales decreasing.


Impact of Inflation

We believe that inflation has had a negligible effect on operations during the three months ended September 30, 2009 and 2008. We believe that we can offset inflationary increases in the cost of revenue by increasing revenue and improving operating efficiencies.
 
Liquidity and Capital Resources

Net cash flows provided by (used in) operating activities were $(15,809) and $(10,644) for the nine months ended September 30, 2009 and 2008, respectively, primarily attributable to a net loss, which were $48,257 and $25,247 for the nine months ended September 30, 2009 and 2008, offset by depreciation expense of $6,500, fair value of rent provided in the amount of $8,100, and increases in accounts payable in September 30, 2009. Also, the fair value of warrants issued to accredited investors increased from $-0- in September 30, 2008 to $21,123 in September 30, 2009.

There were no cash flows from investing activities for the nine months ended September 30, 2009 and 2008.

Net cash flows provided by (used in) financing activities were $36,085 and $(1,026) for the nine months ended September 30, 2009 and 2008, attributable to principal repayments on our note payable to the bank and issuances of common shares to accredited investors in the amount of $37,000 in the quarter ending September 30, 2009. 
 
Overall, we have funded all of our cash needs from inception through September 30, 2009 with proceeds from issuance of our common stock.

On September 30, 2009, we had cash of $87,074 on hand. We do not have or anticipate having within the next 12 months any cash flow or liquidity problems and we are not in default or in breach of our note or lease or other indebtedness or financing arrangement requiring us to make payments.

No significant amount of our trade payables has been unpaid within the stated trade term. We are not subject to any unsatisfied judgments, liens or settlement obligations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information to be reported under this item is not required of smaller reporting companies.
 
ITEM 4. CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934 (“Exchange Act”) is recorded, processed, summarized and reported within the specified time periods. Our Chief Executive Officer and its Chief Financial Officer (collectively, the “Certifying Officers”) are responsible for maintaining our disclosure controls and procedures. The controls and procedures established by us are designed to provide reasonable assurance that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms.
 
As of the end of the period covered by this report, the Certifying Officers evaluated the effectiveness of our disclosure controls and procedures. Based on the evaluation, the Certifying Officers concluded that our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us 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 applicable rules and forms, and that it is accumulated and communicated to our management, including the Certifying Officers, as appropriate to allow timely decisions regarding required disclosure.
 
The Certifying Officers have also concluded, based on their evaluation of our controls and procedures that as of September 30, 2009, our internal controls over financial reporting are effective and provide a reasonable assurance of achieving their objective.
 
The Certifying Officers have also concluded that there was no change in our internal controls over financial reporting identified in connection with the evaluation that occurred during our fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 4T. CONTROLS AND PROCEDURES
 
(a) Conclusions regarding disclosure controls and procedures. Disclosure controls and procedures are the Company’s controls and other procedures that are designed to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files under the Exchange Act is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Management is responsible for establishing and maintaining adequate internal control over financial reporting.
 
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-14(c) promulgated under the Exchange Act as of September 30, 2009, and, based on their evaluation, as of the end of such period, the our disclosure controls and procedures were effective as of the end of the period covered by the Quarterly Report,
 
(b) Management’s Report On Internal Control Over Financial Reporting. It is management’s responsibilities to establish and maintain adequate internal controls over the Company’s financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, the issuer’s principal executive and principal financial officers and effected by the issuer’s management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

•           Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the issuer; and
 
 
•           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 issuer are being made only in accordance with authorizations of management of the issuer; and
 
 
•           Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the issuer’s assets that could have a material effect on the financial statements.
  
As of the end of the period covered by the Quarterly Report, an evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our internal control over financial reporting.
 
Management assessed the effectiveness of our internal control over financial reporting as of September 30, 2009. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework.
 
Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, internal controls over financial reporting were effective as of the end of the period covered by the Report.
 
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.
 
This Quarterly Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this Quarterly Report.
 
(c) Changes in internal control over financial reporting. There were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
 
12

 

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are not aware of any pending or threatened legal proceedings, in which we are involved. In addition, we are not aware of any pending or threatened legal proceedings in which entities affiliated with our officers, directors or beneficial owners are involved.
 
ITEM 1A. RISK FACTORS

The information to be reported under this item has not changed since the previously filed 10-K, for the year ended December 31, 2008.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 
None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.


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

None.

 
     None.


ITEM 6. EXHIBITS

(1)  
Exhibits: Exhibits required to be attached by Item 601 of Regulation S-B are listed in the Index to Exhibits beginning on page 32 of this Form 10-Q, which is incorporated herein by reference.
 
      Reports on Form 8-K filed

(2)  
None.
   

 
13




Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, there unto duly authorized.
 
     
 
BMX DEVELOPMENT CORP.
     
Date: November 11, 2009
By:  
/s/ Michael J. Bongiovanni
 
Michael J. Bongiovanni
President
 
14


 
INDEX TO EXHIBITS