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EX-32.2 - EXHIBIT 32.2 - Panache Beverage, Inc.ex32_2.htm
EX-32.1 - EXHIBIT 32.1 - Panache Beverage, Inc.ex32_1.htm
EX-31.1 - EXHIBIT 31.1 - Panache Beverage, Inc.ex31_1.htm
EX-31.2 - EXHIBIT 31.2 - Panache Beverage, Inc.ex31_2.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 March 31, 2010.

[  ]
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 if the registrant is a well-know seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes [  ]                                No [x]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act
Yes [  ]                                No [x]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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.
[x]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files).
[  ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 if Regulation S-K (229.405 of this Chapter) is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy of information statements incorporated by reference in Part III of this Form 10-Q or any amendments to this Form 10-Q.
[  ]
 
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 March 31, 2010:     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.

 

 
INDEX TO FORM 10-Q
                                                                                                              
PART I  
  Page No.
   
Item 1.  Financial Statements  3
   
Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations 11
   
Item 3.  Quantitative and Qualitative Disclosures About Market Risk
13
   
Item 4. Controls and Procedures
13
   
Item 4T. Controls and Procedures
13
   
PART II 
 
   
Item 1.  Legal Proceedings
14
   
Item 1A. Risk Factors
14
   
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds
14
   
Item 3.  Defaults Upon Senior Securities
14
   
Item 4.  Submission of Matters to a Vote of Security Holders
14
   
Item 5.  Other Information
14
   
Item 6.  Exhibits 
14
   
 
2

 
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
 
INDEX TO BMX DEVELOPMENT CORP. CONSOLIDATED FINANCIAL STATEMENTS
 
BMX Development Corp  Page No. 
   
Consolidated Balance Sheets
4
   
Consolidated Statements of Operations
5
   
Consolidated Statement of Stockholders’ Equity  
6
   
Consolidated Statements of Cash Flows 
7
   
Notes to Consolidated Financial Statements
8

 
3

 
BMX DEVELOPMENT CORP.
CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2010 AND DECEMBER 31, 2009
             
             
   
Unaudited
   
Audited
 
ASSETS
 
03/31/2010
   
12/31/2009
 
   
 
   
 
 
CURRENT ASSETS:
           
Cash
  $ 104,800     $ 106,473  
TOTAL CURRENT ASSETS
    104,800       106,473  
                 
FIXED ASSETS:
               
Machinery and equipment
    65,000       65,000  
Accumulated depreciation
    (62,833 )     (62,833 )
TOTAL FIXED ASSETS
    2,167       2,167  
                 
TOTAL ASSETS
  $ 106,967     $ 108,640  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
               
                 
CURRENT LIABILITIES
               
Accounts payable
  $ 5,350     $ 4,275  
Due to related party
    5,000       5,000  
Current portion of bank note payable
    1,394       1,394  
TOTAL CURRENT LIABILITIES
    11,744       10,669  
                 
LONG-TERM LIABILITIES
               
Bank note payable
    2,242       2,590  
TOTAL LONG-TERM LIABILITIES
    2,242       2,590  
                 
STOCKHOLDERS' EQUITY
               
Common stock ($.001 par value, 200,000,000 shares authorized; 4,914,500 shares issued and outstanding at March 31, 2010 and at December 31, 2009, respectively)
    4,915       4,915  
Additional paid in capital
    291,852       289,152  
Retained deficit
    (203,786 )     (198,686 )
TOTAL STOCKHOLDERS' EQUITY
    92,981       95,381  
 
               
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
  $ 106,967     $ 108,640  
                 
 
The accompanying notes are an integral part of these consolidated financial statements
 
4

 
BMX DEVELOPMENT CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2010 AND 2009
             
 
           
(Unaudited)
 
For the Three Months
 
   
Ended March 31,
 
   
2010
   
2009
 
REVENUES:
           
Sales
  $ 450     $ 3,788  
Cost of sales
    (181 )     (1,515 )
Gross profit
    269       2,273  
                 
EXPENSES:
               
Selling, general and administrative expenses
    4,959       28,624  
Total expenses
    4,959       28,624  
                 
Loss from operations
  $ (4,690 )   $ (26,351 )
                 
Interest expense
    (410 )     (579 )
                 
Loss before income taxes
    (5,100 )     (26,930 )
                 
Provision for income taxes
    -       -  
                 
NET LOSS
  $ (5,100 )   $ (26,930 )
                 
Basic and fully diluted net loss per common share:
  $ **     $ **  
                 
Weighted average common shares outstanding
    4,914,500       4,905,250  
                 
** Less than $.01
               
                 
The accompanying notes are an integral part of these consolidated financial statements
 
5

 
BMX DEVELOPMENT CORP.
 
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
 
FOR THE THREE MONTHS ENDED MARCH 31, 2010
 
                         
                     
 
 
(Unaudited)
                   
 
 
         
Additional
   
 
 
   
Common Stock
   
Paid-in
   
Retained
 
   
Shares
   
Amount
   
Capital
   
Deficit
 
                         
Balances, December 31, 2009
    4,914,500     $ 4,915     $ 289,152     $ (198,686 )
                                 
Fair value of rent contributed by related party
    -       -       2,700       -  
                                 
Net loss for the three months ended March 31, 2010
    -       -       -       (5,100 )
                                 
Balances, March 31, 2010
    4,914,500     $ 4,915     $ 291,852     $ (203,786 )
                                 
                                 
 
The accompanying notes are an integral part of these consolidated financial statements
 
6

BMX DEVELOPMENT CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2010 AND 2009
   
 
       
             
   
Unaudited
   
Unaudited
 
   
2010
   
2009
 
CASH FLOWS FROM OPERATING ACTIVITIES:
           
Net loss
  $ (5,100 )   $ (26,930 )
Adjustments to reconcile net loss to net cash provided by
               
    (used in) operations:
               
Depreciation
    -       3,250  
Fair value of warrants issued to accredited investors
    -       21,123  
      Fair value of rent contributed by related party
    2,700       2,700  
Increase (decrease) in operating liabilities
               
Accounts payable
    1,075       103  
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
    (1,325 )     246  
                 
CASH FLOWS FROM FINANCING ACTIVITIES:
               
Issuance of common shares to accredited investors
    -       37,000  
Principal repayments of bank note payable
    (348 )     (305 )
NET CASH PROVIDED BY (USED) IN FINANCING ACTIVITIES
    (348 )     36,695  
                 
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    (1,673 )     36,941  
                 
CASH AND CASH EQUIVALENTS,
               
BEGINNING OF THE PERIOD
    106,473       87,074  
                 
END OF THE PERIOD
  $ 104,800     $ 124,015  
                 
The accompanying notes are an integral part of these consolidated financial statements
 
7

 
BMX DEVELOPMENT CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Three Months Ended March 31, 2010 and 2009

NOTE 1                      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business Activity

BMX Development Corp., FKA Biometrix International Inc., (the “Company”) is a street and off-road motorcycle servicing and repair 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, 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. (“BMX”)

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, the Company (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 the Company.

The above mentioned stock exchange transaction has been accounted for as a reverse acquisition and recapitalization of the Company whereby JHP is deemed to be the accounting acquirer (legal acquiree) and the Company 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.

Basis of Presentation
The consolidated financial statements include the accounts of BMX Development Corp. and its wholly owned subsidiaries 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.

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

Cash and Cash Equivalents - For purposes of the Statements 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 motorcycle repair services are completed provided collection from the motorcycle owner 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. There were no common stock equivalents necessary for the computation of diluted loss per share.

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 three to seven years.

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 - The Company accounts for share-based compensation using the fair value method of Financial Accounting Standard No. 123R. Common shares issued for services rendered by a third party (both employees and non-employees) are recorded at the fair value of the shares issued or services rendered, whichever is more readily determinable. The Company accounts for options and warrants under the same authoritative guidance using the Black-Scholes Option Pricing Model.

Advertising Costs - Advertising costs are expensed as incurred. The Company does not incur any direct-response advertising costs.

Recent Accounting Pronouncements - The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.

8

 
BMX DEVELOPMENT CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Three Months Ended March 31, 2010 and 2009
 
FASB Accounting Standards Codification

(Accounting Standards Update (“ASU”) 2009-01)

In June 2009, FASB approved the FASB Accounting Standards Codification (“the Codification”) as the single source of authoritative nongovernmental GAAP. All existing accounting standard documents, such as FASB, American Institute of Certified Public Accountants, Emerging Issues Task Force and other related literature, excluding guidance from the Securities and Exchange Commission (“SEC”), have been superseded by the Codification. All other non-grandfathered, non-SEC accounting literature not included in the Codification has become nonauthoritative. The Codification did not change GAAP, but instead introduced a new structure that combines all authoritative standards into a comprehensive, topically organized online database. The Codification is effective for interim or annual periods ending after September 15, 2009, and impacts the Company’s consolidated financial statements as all future references to authoritative accounting literature will be referenced in accordance with the Codification. There have been no changes to the content of the Company’s consolidated financial statements or disclosures as a result of implementing the Codification during the three months ended March 31, 2010.

As a result of the Company’s implementation of the Codification during the fiscal year ended December 31, 2009, previous references to new accounting standards and literature are no longer applicable. In the current annual consolidated financial statements, the Company will provide reference to both new and old guidance to assist in understanding the impacts of recently adopted accounting literature, particularly for guidance adopted since the beginning of the current fiscal year but prior to the Codification.

Subsequent Events

(Included in Accounting Standards Codification (“ASC”) 855 “Subsequent Events”, previously SFAS No. 165 “Subsequent Events”)

SFAS No. 165 established general standards of accounting for and disclosure of events that occur after the balance sheet date, but before the consolidated financial statements are issued or available to be issued (“subsequent events”). An entity is required to disclose the date through which subsequent events have been evaluated and the basis for that date. For public entities, this is the date the consolidated financial statements are issued. SFAS No. 165 does not apply to subsequent events or transactions that are within the scope of other GAAP and did not result in significant changes in the subsequent events reported by the Company. SFAS No. 165 became effective for interim or annual periods ending after June 15, 2009 and did not impact the Company’s consolidated financial statements. The Company evaluated for subsequent events through the issuance date of the Company’s consolidated financial statements. No recognized or non-recognized subsequent events were noted.

Determination of the Useful Life of Intangible Assets

(Included in ASC 350 “Intangibles — Goodwill and Other”, previously FSP SFAS No. 142-3 “Determination of the Useful Lives of Intangible Assets”)

FSP SFAS No. 142-3 amended the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under previously issued goodwill and intangible assets topics. This change was intended to improve the consistency between the useful life of a recognized intangible asset and the period of expected cash flows used to measure the fair value of the asset under topics related to business combinations and other GAAP. The requirement for determining useful lives must be applied prospectively to intangible assets acquired after the effective date and the disclosure requirements must be applied prospectively to all intangible assets recognized as of, and subsequent to, the effective date. FSP SFAS No. 142-3 became effective for consolidated financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. The adoption of FSP SFAS No. 142-3 did not impact the Company’s consolidated financial statements.

Noncontrolling Interests
(Included in ASC 810 “Consolidation”, previously SFAS No. 160 “Noncontrolling Interests in Consolidated Financial Statements an amendment of ARB No. 51”)

SFAS No. 160 changed the accounting and reporting for minority interests such that they will be recharacterized as noncontrolling interests and classified as a component of equity. SFAS No. 160 became effective for fiscal years beginning after December 15, 2008 with early application prohibited. The Company implemented SFAS No. 160 at the start of fiscal 2009 and no longer records an intangible asset when the purchase price of a noncontrolling interest exceeds the book value at the time of buyout. The adoption of SFAS No. 160 did not have any other material impact on the Company’s financial statements.

Consolidation of Variable Interest Entities — Amended
(To be included in ASC 810 “Consolidation”, SFAS No. 167 “Amendments to FASB Interpretation No. 46(R)”)

SFAS No. 167 amends FASB Interpretation No. 46(R) “Consolidation of Variable Interest Entities regarding certain guidance for determining whether an entity is a variable interest entity and modifies the methods allowed for determining the primary beneficiary of a variable interest entity. The amendments include: (1) the elimination of the exemption for qualifying special purpose entities, (2) a new approach for determining who should consolidate a variable-interest entity, and (3) changes to when it is necessary to reassess who should consolidate a variable-interest entity. SFAS No. 167 is effective for the first annual reporting period beginning after November 15, 2009, with earlier adoption prohibited. The Company will adopt SFAS No. 167 in fiscal 2010 and does not anticipate any material impact on the Company’s financial statements.

NOTE 2                      INCOME TAXES

At March 31, 2010, the Company had federal and state net operating loss carry forwards of approximately $85,000 that expire in various years through the year 2023.

Due to operating losses, there is no provision for current federal or state income taxes for the three months ended March 31, 2010 and 2009.

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 March 31, 2010 consists of net operating loss carry forwards calculated using federal and state effective tax rates equating to approximately $34,000 less a valuation allowance in the amount of approximately $34,000. 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 $2,000 for the three months ended March 31, 2010.

The Company’s total deferred tax asset as of March 31, 2010 is as follows:

Net operating loss carry forwards                                                    $   34,000
Valuation allowance                                                                               (34,000)

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 months ended March 31, 2010 and 2009 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%

9

 
BMX DEVELOPMENT CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Three Months Ended March 31, 2010 and 2009
 
NOTE 3                      CAPITAL STOCK

The Company is authorized to issue 200,000,000 common shares at $.001 par value per share.

The Company records the fair value of rent of its operational and headquarters provided by a related party in the amount of $900 per month as a charge to current period expense and a credit to additional paid in capital.

During the three months ended March 31, 2009, the Company issued 18,500 common shares in exchange for $37,000 in cash collections, respectively, from the sale thereof pursuant to a private placement to accredited investors made under Regulation 504.

NOTE 4                      WARRANTS

As part of the issuance of common shares in 2009 noted in footnote 3 above, the Company issued 18,500 stock warrants during the year 2009. No warrants were issued in 2010. These warrants expire in three years from issuance in the first quarter of 2009 and the exercise price is $2.00 per warrant. No warrants expired during 2010.

During the three months ended March 31, 2009, 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 5.0% risk-free interest, 0% dividend yield, 65% volatility, and a life of three years. The remaining life of the warrants as of March 31, 2010 is 2.00 years.

NOTE 5                      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 years ended December 31, 2009 and 2008.

NOTE 6                      SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental disclosures of cash flow information for the three months ended March 31, 2010 and 2009 are summarized as follows:

Cash paid during the period for interest and income taxes:

2009                               2010
Income Taxes                                                  $   --                                $  --
Interest                                                             $ 305                              $ 410

NOTE 7                      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 8                      BANK NOTE PAYABLE

The Company has a term bank note payable to an unrelated banking institution bearing annual interest of 9.50% as of March of 2010, secured by equipment with a net book value of approximately $2,167 at March 31, 2010. 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 March 31, 2010 for the next five years and thereafter are as follows:

2010                                           $       1,394
2011                                           $       2,242
Total                                           $       3,636
                                                      =======

NOTE 9                      LEASE COMMITMENTS AND RELATED PARTY TRANSACTIONS

The Company had a three year lease at $100 per month with a related party company that is partially owned by its President. The lease, which was extended for a one year period past its original expiration, currently expires on December 31, 2010. 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 financial statements herein include the imputed fair value of the space at $900 per month based upon comparables in the area.
 
10

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

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-owned 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 Fuel valves
Throttle assemblies
Air shifters
Gaskets
Tires
Carburetors
Ignitions
Transmission and clutch parts
Chains
Piston kits
Valves
Cylinders
Race engine valves
Velocity stacks
Exhaust systems
RPM limiters
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.

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RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2010 and 2009

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.

CRITICAL ACCOUNTING POLICIES
Revenue recognition

We recognize revenue when repair services are completed, persuasive evidence of an arrangement exists, the fee is fixed or determinable and collectibility is probable. We assess collectibility based upon the clients’ financial condition and prior payment history, as well as our performance under the contract.

Property, Plant, and Equipment

Property and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated on the straight-line basis over the following expected useful lives from the date on which they become fully operational and after taking into account their estimated residual values:

 
Depreciable life
   
Machinery
5 years
Equipment
5 years

Expenditure for maintenance and repairs is expensed as incurred.

Revenues

Sales were $450 and $3,788 for the three months ended March 31, 2010 and 2009, respectively. Sales revenues were due primarily to motorcycle repairs and maintenance. The decline in sales was due to fewer advertising in 2010 and a recessionary economy.

Gross profits were $269 and $2,273 for the three months ended March 31, 2010 and 2009, respectively. Sales revenues were due primarily to motorcycle repairs and maintenance. The decline in quarterly revenues was due to fewer advertising in 2010 and a recessionary economy.

Income / Loss

We had net losses of $5,100 and $26,930 for the three months ended March 31, 2010 and 2009, respectively. The net losses in these periods were primarily due to the amount of selling, general, and administrative expenses as $4,959 for the three months ended March 31, 2010 compared to $28,624 for the three months ended March 31, 2009. The amount in expenses in 2009 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 March 31, 2010 and 2009 were $4,959 and $28,624, respectively. The decrease 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. The decrease is also attributable to an overall decrease in sales.

Cost of Sales

Cost of revenue primarily includes sales of purchased motor cycle parts inventory. During the three months ended March 31, 2010, we had cost of revenues of $181, or approximately 40.22% of revenues, and $1,515 for the three months ended March 31, 2009, or approximately 39.99%. The cost of revenue as a percentage of revenue stayed constant with costs of parts and labor staying constant during the three-month period ended March 31, 2010.

Impact of Inflation

We believe that inflation has had a negligible effect on operations during the three months ended March 31, 2010 and 2009. 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 $(1,325) and $246 for the three months ended March 31, 2010 and 2009, respectively, primarily attributable to a net loss, which were $5,100 and $26,930 for the three months ended March 31, 2010 and 2009, respectively, offset by depreciation expense of $3,250 in 2009, fair value of rent provided in the amount of $2,700 in both 2010 and 2009, and increases in accounts payable in March 31, 2010 in the amount of $1,075. Also, the fair value of warrants issued to accredited investors decreased from $21,123 in March 31, 2009 to $0 in March 31, 2010.

There were no cash flows from investing activities for the three months ended March 31, 2010 and 2009.

Net cash flows provided by (used in) financing activities were $(348) and $36,695 for the three months ended March 31, 2010 and 2009, attributable to principal repayments on our note payable to the bank in both periods. For the three months ended March 31, 2009, the issuances of common shares to accredited investors in the amount of $37,000 provided positive cash flows in financing activities for the period.
 
Overall, we have funded all of our cash needs from inception through March 31, 2010 with proceeds from issuance of our common stock.

On March 31, 2010, we had cash of $104,800 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.

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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 March 31, 2010, 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 March 31, 2010, 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 March 31, 2010. 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.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROC EEDINGS

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 10K, for the year ended December 31, 2009.

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.

ITEM 5. OTHER INFOR MATION

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 of this Form 10-Q, which is incorporated herein by reference.
 
Reports on Form 8-K filed

On February 8, 2010, we filed a Current Report on Form 8-K announcing that on February 3, 2010, BMXD entered into an Agreement by and among the Registrant and Apollo Energy Systems, Inc. Pursuant to the Agreement, BMXD was appointed as an Apollo Distributor for the new Silver Volt II, Lead Cobalt Batteries and Alkaline Fuel Cells for the United States. BMXD will attempt to sell the cars through distributors, dealers, and fleet owners. The cars will be provided to BMXD via the assembler, Viridian Motor Corporation.

On February 12, 2010, we filed a Current Report on Form 8-K announcing the appointment of Mr. Robert Aronsson to the Advisory Board of Directors which is a newly created subcommittee for the Electric Car Product Line Division.

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SIG NATURES

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: May 12, 2010
By:  
/s/ Michael J. Bongiovanni
 
Michael J. Bongiovanni
President
 
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INDEX TO E XHIBITS