BIOCUREX INC - FORM 10-Q - November 14, 2011

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EXCEL - IDEA: XBRL DOCUMENT - BIOCUREX INC	Financial_Report.xls
EX-31.1 - CERTIFICATION - BIOCUREX INC	bocx_ex31.htm
EX-32 - CERTIFICATION - BIOCUREX INC	bocx_ex32.htm
EX-31.2 - CERTIFICATION - BIOCUREX INC	bocx_ex312.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

þ	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2011

o	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _______

Commission File Number: 000-26947

BIOCUREX, INC.

(Exact Name of Registrant as Specified in its Charter)

Texas		75-2742601
(State or other jurisdiction of		(I.R.S. Employer Identification No.)
incorporation or organization)

7080 River Road, Suite 215

Richmond, British Columbia V6X 1X5

(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number including area code: (866) 884-8669

N/A

Former name, former address, and former fiscal year, if changed since last report

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 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. Yes þ No o

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

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 definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Larger accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	þ

Indicate by check mark whether registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 177,210,464 shares outstanding as of November 08, 2011.

BIOCUREX, INC.

(A Development Stage Company)

CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. dollars)

September 30, 2011

INDEX

Consolidated Balance Sheets			F-1

Consolidated Statements of Operations			F-2

Consolidated Statements of Cash Flows			F-3

Notes to the Consolidated Financial Statements			F-4

BIOCUREX, INC.

(A Development Stage Company)

CONSOLIDATED BALANCE SHEETS

(Expressed in U.S. dollars)

	September 30,			December 31,
ASSETS	2011			2010
	$			$
	(unaudited)			(audited)

Current Assets

Cash		323,286			1,770,194
Prepaid expenses and other		1,707			4,623
Total Current Assets		324,993			1,774,817

Debt issue costs (Note 4 (a) and 6 (b))		30,700			48,851
Patents (Note 3)		457,045			498,500

Total Assets		812,738			2,322,168

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current Liabilities

Accounts payable		90,361			90,022
Derivative liability (Note 12)		49,521			145,159
Accrued liabilities		371,416			359,322
Loans payable (Note 4 (a))		32,489			32,550
Due to related parties (Note 5)		416,390			434,718
Convertible notes payable to related party (Note 6 (a))		33,885			33,885
		994,062			1,095,656

Loans payable (Note 4 (b))		94,839			81,301
Convertible debt (Note 6 (b))		480,971			437,735
		1,569,872			1,614,692

Commitments and Contingencies (Notes 1 and 12)
Subsequent Event (Note 14)

Stockholders' Equity (Deficit)
Common stock
Authorized: 450,000,000 shares, par value $0.001
Issued and outstanding: 176,010,464 (December 31, 2010 – 168,188,974)		176,010			168,189
Additional paid-in capital		24,974,329			24,474,411
Accumulated deficit		(114,175	)		(114,175	)
Deficit accumulated during the development stage		(25,793,298	)		(23,820,949	)
Stockholders' Equity (Deficit)		(757,134	)		707,476
Total Liabilities and Stockholders' Equity (Deficit)		812,738			2,322,168

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

F-1

BIOCUREX, INC.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS

(Expressed in U.S. dollars)

(Unaudited)

													Accumulated During the
													Development Stage
	Three Months Ended						Nine Months Ended						January 1, 2001
	September 30,						September 30,						to September 30,
	2011			2010			2011			2010			2011
	$			$			$			$			$
Revenue		-			-			-			-			1,464,456

Operating Expenses

Amortization of patents (Note 3)		27,172			11,220			81,516			32,726			409,218
General and administrative (Note 5(a) & 8)		292,006			405,450			840,804			1,907,478			9,187,280
Impairment of patents		-			-			-			-			67,620
Professional and consulting fees		110,097			95,080			403,656			312,260			6,003,265
Research and development (Note 5(a))		200,068			134,561			579,711			370,318			5,358,907
Total Operating Expenses		629,343			646,311			1,905,687			2,622,782			21,026,290
Loss From Operations		(629,343	)		(646,311	)		(1,905,687	)		(2,622,782	)		(19,561,834	)

Other Income (Expense)

Accretion of discounts on debt		(19,821	)		(20,020	)		(56,774	)		(446,179	)		(3,984,749	)
Amortization of debt issue costs		(6,117	)		(6,117	)		(18,150	)		(88,960	)		(804,457	)
Gain (loss) on derivative liability		(28,614	)		1,835			50,064			(18,863	)		151,340
Gain (loss) on extinguishments of convertible debt		-			-			-			-			(374,909	)
Gain (loss) sale of equity investment securities		-			-			-			-			147,991
Gain on settlement of accounts payable		-			-						44,655			102,937
Interest expense		(13,850	)		(14,484	)		(41,802	)		(50,788	)		(1,853,296	)
Interest income		-			-			-			-			383,679

Total Other Income (Expense)		(68,402	)		(38,786	)		(66,662	)		(560,135	)		(6,231,464	)

Net Loss and Comprehensive Loss for the Period		(697,745	)		(685,097	)		(1,972,349	)		(3,182,917	)		(25,793,298	)

Net Loss Per Share - Basic and Diluted		(0.00	)		(0.00	)		(0.01	)		(0.02	)

Weighted Average Shares Outstanding		176,049,000			166,989,900			172,145,000			156,832,430

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

F-2

BIOCUREX, INC.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in U.S. dollars)

(Unaudited)

							Accumulated During
							The Development Stage
	Nine months Ended September 30,						January 1, 2001 to September 30,
	2011			2010			2011
	$			$			$
Operating Activities:
Net loss for the period		(1,972,349	)		(3,182,917	)		(25,793,298	)

Adjustments to reconcile net loss to net cash
used in operating activities:
Accretion of discounts on debt		56,774			446,179			3,984,749
Allowance for uncollectible notes receivable		-			-			98,129
Amortization of patents		81,516			32,726			409,218
Amortization of debt issue costs		18,151			88,960			786,307
Gain on extinguishments of debt		-			-			374,909
Gain on write off accounts payable		-			-			(102,937	)
Loss (gain) on sale of investment securities		-			-			(253,065	)
Loss from impairment of patents		-			-			67,620
Gain (loss) on derivative liability		(95,638	)		18,863			(196,915	)
Stock-based compensation		329,953			1,443,376			8,072,711

Changes in operating assets and liabilities:

Notes and interest receivable		-			-			(6,296	)
Prepaid expenses and other		2,917			6,380			33,990
Accounts payable & accrued liabilities		187,870			(523,690	)		1,903,287
(Decrease) in related party		(18,327	)		(162,391	)		(69,739	)
Deferred revenue		-			-			(162,000	)
Subscriptions receivable					-			(100,682	)

Net Cash Used in Operating Activities		(1,409,133	)		(1,832,514	)		(10,954,012	)

Investing Activities:

Net Proceeds from notes receivable		-			-			1,171
Patent costs		(40,063	)		(81,698	)		(729,416	)
Proceeds from sale of investment securities		-			-			451,123

Net Cash Provided by (Used in) Investing Activities		(40,063	)		(81,698	)		(277,122	)

Financing Activities:

Due to related parties		-			-			552,281
Proceeds from loans payable		-			-			607,549
Repayment on loans payable		-			(450,000	)		(450,000	)
Proceeds from convertible debt		-			-			3,639,743
Repayment on convertible debt		-			(1,186,700	)		(2,400,951	)
Deferred financing costs		-			(94,851	)		(769,487	)
Debt issue costs		-			-			(71,293	)
Proceeds from shares issued of common stock		-			6,461,400			9,962,872
Proceeds from the exercise of stock options and warrants		2,288			1,392			1,150,204
Share issuance costs		-			(761,526	)		(909,049	)

Net Cash Provided by Financing Activities		2,288			3,969,715			11,311,869

Net Increase (Decrease) in Cash		(1,446,908	)		2,055,503			80,735

Cash - Beginning of period		1,770,194			126,605			242,551

Cash - End of period		323,286			2,182,108			323,286

Non-cash Investing and Financing Activities:
Share issued to settle debt		175,500			127,200			1,285,381
Units issued as share issuance costs		-			939,771			939,771
Note payable converted into common shares		-			-			1,594,021

Supplemental Disclosures:
Interest paid		40,540			49,526			745,827
Income taxes		-			-			-

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

F-3

BIOCUREX, INC.

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. dollars)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

(Unaudited)

1. NATURE OF BUSINESS AND CONTINUANCE OF OPERATIONS

BioCurex, Inc. (the “Company”) was incorporated on December 8, 1997, under the laws of the State of Texas. During the first quarter of 2001, the Company ceased its business activities relating to the acquisition and sale of thoroughbred racehorses when a change of majority control occurred. On February 21, 2001, the Company acquired intellectual properties and patents relating to cancer diagnostics and therapeutics. The Company is now in the business of developing, producing, marketing and licensing products based on patented and proprietary technology in the area of cancer diagnostics. The Company is considered a development stage enterprise as defined by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 915, Development Stage Entities. On October 31, 2008, the Company incorporated BioCurex China Co., Ltd. (“Biocurex China”), a wholly-owned subsidiary in China. On December 8, 2009, the Company incorporated OncoPet Diagnostics Inc., a wholly-owned subsidiary under the laws of the State of Colorado.

The consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company does not have sufficient cash nor does it have an established source of revenue to cover its ongoing costs of operations for the next twelve months. Management plans to obtain additional funds through the sale of its securities. However there is no assurance of additional funding being available. As at September 30, 2011, the Company has accumulated losses of $25,793,298 since the inception of the development stage. These factors raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments that might result from the outcome of this uncertainty.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

These consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in U.S. dollars. These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, BioCurex China and OncoPet Diagnostics Inc. The Company’s fiscal year-end is December 31.

Interim Financial Statements

The interim unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions for Securities and Exchange Commission ("SEC") Form 10-Q and they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. Therefore, these financial statements should be read in conjunction with the Company's audited financial statements and notes thereto for the year ended December 31, 2010, included in the Company's Annual Report on Form 10-K/A filed on April 1, 2011 with the SEC.

In the opinion of the Company’s management, these consolidated financial statements reflect all adjustments necessary to present fairly the Company’s consolidated financial position at September 30, 2011, and the consolidated results of operations and the consolidated statements of cash flows for the nine months ended September 30, 2011 and 2010. The results of operations for the nine months ended September 30, 2011 are not necessarily indicative of the results to be expected for the entire fiscal year.

F-4

BIOCUREX, INC.

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. dollars)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

(Unaudited)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods. The Company regularly evaluates estimates and assumptions related to valuation of patent costs, stock-based compensation, financial instrument valuations, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Cash and Cash Equivalents

The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.

Registration Payment Arrangements

The Company accounts for registration rights arrangements and related liquidated damages provisions under FASB ASC 815-40, Derivatives and Hedging – Contracts in Entity’s own Entity, which addresses an issuer's accounting for registration payment arrangements. ASC 815-40 defines a registration payment arrangement as an arrangement where the issuer i) will endeavor to file a registration statement for the resale of financial instruments, have the registration statement declared effective, or maintain its effectiveness and ii) transfer consideration to the counterparty if the registration statement is not declared effective or its effectiveness is not maintained.

ASC 815-40 requires the contingent obligation to make future payments or otherwise transfer consideration under a registration payment arrangement, whether issued as a separate agreement or included as a provision of a financial instrument or other agreement, to be separately recognized and measured in accordance with ASC 450, Contingencies.

Research and Development Costs

Research and development costs are charged to operations as incurred.

Foreign Currency Translation

The Company’s functional and reporting currency is the United States dollar. Monetary assets and liabilities denominated in foreign currencies are translated to United States dollars in accordance with ASC 830, Foreign Currency Translation Matters using the exchange rate prevailing at the balance sheet date. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. Foreign currency transactions are primarily undertaken in Canadian dollars and Chinese Renminbi.

Revenue Recognition

The Company recognizes revenue in accordance with ASC 605 Revenue Recognition, Revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed, and collectability is reasonably assured. The Company’s revenue since the inception of the development stage consisted of license fees related to the licensing of its RECAF™ technology.

F-5

BIOCUREX, INC.

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. dollars)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

(Unaudited)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Long-lived Assets

In accordance with ASC 360, Property Plant and Equipment, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life.

Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.

Income Taxes

The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Income Taxes. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

Stock-based Compensation

The Company records stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation, and ASC 505-50, Equity-Based Payments to Non-Employees using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.

F-6

BIOCUREX, INC.

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. dollars)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

(Unaudited)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Basic and Diluted Net Loss per Share

The Company computes net loss per share in accordance with ASC 260 Earnings Per Share which requires presentation of basic earnings per share and diluted earnings per share. The computation of basic earnings per share is computed by dividing income available to common stockholders by the weighted-average number of outstanding common shares during the period. Diluted earnings per share gives effect to all potentially dilutive common shares outstanding during the period. The computation of diluted EPS does not assume conversion, exercise or contingent exercise of securities that would have an anti-dilutive effect on earnings. As of September 30, 2011, the Company had approximately 151,779,821 potentially dilutive securities, including options, warrants and equity instruments related to convertible notes payable and convertible debt, all of which were anti-dilutive since the Company incurred losses during these periods.

Comprehensive Loss

ASC 220, Comprehensive Income, establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. During the nine months ended September 30, 2011 and 2010, the Company has no items that represent other comprehensive loss and, therefore, has not included a schedule of other comprehensive loss in the financial statements.

Patents

Patents are stated at cost and have a definite life. Once the Company receives patent approval, amortization is calculated using the straight-line method over the remaining life of the patents.

Reclassifications

Certain reclassifications have been made to the prior period’s financial statements to conform to the current period’s presentation.

Recent Accounting Pronouncements

In January 2010, the FASB issued Accounting Standards Update (ASU) No. 2010-06, Improving Disclosures about Fair Value Measurements, which amends the ASC Topic 820, Fair Value Measures and Disclosures. ASU No. 2010-06 amends the ASC to require disclosure of transfers into and out of Level 1 and Level 2 fair value measurements, and also requires more detailed disclosure about the activity within Level 3 fair value measurements. The new disclosures and clarifications of existing disclosures were effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures concerning purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. Those disclosures were effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. This guidance requires expanded disclosures only, and did not have a material impact on the Company’s financial statements.

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

F-7

BIOCUREX, INC.

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. dollars)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

(Unaudited)

PATENTS

Patents relate to developing the method for diagnostic and treatment of cancer using a new cancer marker called “RECAF.” The Company has filed patent applications in 23 countries with ongoing applications currently being prepared. As of September 30, 2011, the Company had received patent approval from five countries and the European patent office. Additions made after September 30, 2011 will have a remaining life of approximately four years. The Company intends to apply for extensions in the near future.

A schedule of the patents is as follows:

	September 30, 2011			December 31, 2010
	$			$

Patents		857,512			817,451
Less:
Accumulated amortization		(400,467	)		(318,951	)

Net Carrying Value		457,045			498,500

Amortization expense totaled $81,516 and $32,726 for the nine months ended September 30, 2011 and 2010, respectively.

The estimated future amortization expense is as follows:

	$

2011		27,172
2012		108,687
2013		108,687
2014		108,687
Thereafter		103,812
		457,045

F-8

BIOCUREX, INC.

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. dollars)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

(Unaudited)

4. LOANS PAYABLE

a)	On September 21, 2009, the Company completed a private placement in which it sold three promissory notes in the aggregate principal amount of $125,000 and 1,785,715 shares of its common stock for an aggregate purchase price of $125,000.

The promissory notes bear interest at a rate of 10% per annum. Both interest and principal are payable on January 31, 2013.

The aggregate purchase price for the units was allocated equally between the notes and shares contained in each Unit based on their relative fair value. The relative fair value assigned to the shares totaled $62,500. These amounts were recorded as a notes discount and will be amortized as interest expense over the term of the promissory notes.

During the nine months ended of September 30, 2011, the Company paid interest in the amount of $9,349 (2010 - $ 9,349) and recorded $13,538 (2010 – $11,018) as the accretion expense related to these promissory notes. As at September 30, 2011, the carrying value of these notes was $94,839 (December 2010 - $81,301).

During nine months ended September 30, 2011, the Company expensed $2,277 (2010 - $2,277) of the debt issue costs related to promissory notes, and at September 30, 2011, the balance of debt issue costs was $4,070 (December 2010 - $6,347).

During the year ended December 31, 2010, the Company received a net advance of 207,325 RMB (September 30, 2011- US$32,489; December 31, 2010 – US$32,550) from BioCurex China’s Agent. The advance is non-interest bearing, unsecured and due on demand. The balance as denominated in RMB remains unchanged at September 30, 2011

5.	RELATED PARTY TRANSACTIONS AND BALANCES

	September 30, 2011		December 31, 2010
	$		$

Due to Pacific BioSciences Research Centre Inc. and Company’s President (a)		403,072		417,734
Due to Company’s Chairman (b)		8,388		12,054
Due to a former officer (c)		4,930		4,930

		416,390		434,718

F-9

BIOCUREX, INC.

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. dollars)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

(Unaudited)

5.	RELATED PARTY TRANSACTIONS AND BALANCES (continued)

The Company’s research and development is performed by Pacific BioSciences Research Centre (“Pacific”). Pacific is 100% owned by the CEO of the Company. During the nine months ended September 30, 2011 and 2010, Pacific performed research and development for the Company valued at $506,250 and $327,960, respectively.

Pacific also provided administrative services during the nine months ended September 30, 2011 and 2010, valued at $178,093 and $153,684, respectively. During the nine months ended September 30, 2011, and 2010, Pacific charged interest of $5,520 and $6,824, respectively, calculated at the bank prime rate on the monthly balance owed. As at September 30, 2011 and December 31, 2010, the amount due to Pacific was $403,072 and $405,688, respectively, and is unsecured and due on demand.

On September 15, 2009, the Company entered into an agreement with the Company’s CEO to provide management services for a fee of $250,000 per annum. During nine months ended September 30, 2011, the Company incurred $187,500 (2010 - $187,500) for the management services of September 30, 2011. As at December 31, 2010, $12,054 was payable to the CEO.

On September 15, 2009, the Company entered into an agreement with the Company’s Chairman to provide management services for a fee of $100,000 per annum based on 40 hours per month. During the nine months ended September 30, 2011, the Company incurred $86,000 (2010 - $104,333) for management services. As at September 30, 2011, the Company is indebted to the Company’s Chairman for $8,388 of June management fees and miscellaneous expense (December 31, 2010- $12,054).

c)	The balance represents $4,930 owing to a former officer which is unsecured, non-interest bearing and due on demand.

6. CONVERTIBLE NOTES AND DEBT

As of September 30, 2011, one $33,885 (2010 - $33,885) convertible note is outstanding which is payable to a related party. The note bears interest at 5% annum, is unsecured and due on demand.

Under the convertibility terms of the notes payable, the principal, plus accrued interest, can be converted immediately, at the option of the holder, either in whole, or in part, into fully paid common shares of the Company. The conversion price per share is equal to the lesser of the stated price at $0.17 or 75% of the average closing bid prices for the five trading days ending on the trading day immediately before the date of the conversion.

As at September 30, 2011, the Company has convertible notes (the “Notes”) in the principal amount of $563,300. The Notes bear interest at an annual rate of prime (as adjusted monthly on the first business day of each month) plus 2.75% per year, payable in arrears on the first day of each month. The Notes are due and payable on December 31, 2012 and are secured by substantially all of the Company’s assets. At the holders’ option, the Notes are convertible into shares of the Company's common stock at a conversion price of $0.14 per share. The embedded conversion option contains a reset provision that can cause an adjustment to the conversion price if the Company issues an equity instrument that does not qualify as an Exempt Issuance at a price lower than the initial conversion price. An Exempt Issuance is defined as:

i.	shares or options issued to employees of Biocurex for services rendered pursuant to any stock or option plan adopted by the Directors of Biocurex, not to exceed 500,000 shares or options in any year;

F-10

BIOCUREX, INC.

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. dollars)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

(Unaudited)

6. CONVERTIBLE NOTES AND DEBT (continued)

ii.	options issued to officers or directors of Biocurex, provided that the number of options issued during any twelve-month period may not exceed 500,000;

iii.	shares or options issued at fair market value for services rendered to independent consultants, limited to 500,000 shares or options in any year;

iv.

restricted equity securities sold for cash, provided that no more than 500,000 restricted equity securities can be sold in any year, the restricted equity securities cannot be registered for public sale, and the restricted equity securities, and the exercise price of any warrants, cannot be less than 75% of the market price of Biocurex's common stock;

v.	shares issued to any note holder in payment of principal or interest;

vi.	shares sold to any note holder;

vii.	securities issued upon the conversion of the Notes or the exercise of the Warrants;

viii.

securities issued upon the conversion of notes or the exercise of options or warrants issued and outstanding on June 25, 2007, provided that the securities have not been amended to increase the number of such securities or to decrease the exercise, exchange or conversion price of the securities.

Due to this provision, the embedded conversion option qualifies for derivative accounting under ASC 815-15 (See Note 12).

The following table summarizes the changes in the Notes during the nine months ended September 30, 2011:

	Principal		Discount			Carrying Value
	$		$			$
Balance, December 31, 2010		563,300		(125,565	)		437,735
Accretion of discount on convertible debt		–		43,236			43,236

Balance, September 30, 2011		563,300		(82,329	)		480,971

During the nine months ended September 30, 2011, the Company expensed $15,873 (2010 - $15,873) of the debt issue costs related to these convertible notes. The balance of debt issue costs at September 30, 2011 is $26,630 (December 31, 2010 - $42,504).

7.	COMMON STOCK

For the nine months ended September 30, 2011:

a)	In January 2011, the Company issued 500,000 shares of common stock to a vendor to settle accounts payable of $35,000.

b)	In January 2011, the Company entered into a consulting agreement for investor relation consulting services ending May 31, 2011. The Company issued 500,000 restricted common shares with an estimated fair value of $35,000.

c)	In April 2011, the Company issued 2,288,157 shares of common stock pursuant to stock options exercised at $0.001 per share for common shares subscriptions totaling $2,288 received in March 2011.

F-11

BIOCUREX, INC.

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. dollars)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

(Unaudited)

7.	COMMON STOCK (continued)

d)	In April 2011, the Company issued 150,000 shares of common stock to a scientist to settle accounts payable of $7,500.

e)	In June 2011, the Company issued 300,000 shares of common stock to a scientist with an estimated fair value of $10,500 for consulting services.

f)	In June 2011, the Company issued 2,500,000 shares of common stock to a vendor with an estimated fair value of $87,500 for consulting services.

g)	In July, 2011, the Company issued 750,000 shares of common stock to a vendor with an estimated fair value of $27,000 for consulting services.

h)	In September, 2011, the Company issued 833,333 shares of common stock to a vendor with an estimated fair value of $22,500 for consulting services (see Note 13(e)).

8.	STOCK-BASED COMPENSATION

Stock Bonus Plan

Under the Company’s Stock Bonus Plan, employees, directors, officers, consultants and advisors are eligible to receive a grant of the Company’s shares, provided that bona fide services are rendered by consultants or advisors and such services must not be in connection with the offer or sale of securities in a capital-raising transaction. On November 30, 2010, the Company increased the number of shares issuable pursuant to this plan from 10,500,000 shares to 20,000,000 shares with 6,529,132 common shares available for future issuance as of September 30, 2011.

Non-Qualified Stock Option Plan

The Company’s Non-Qualified Stock Option Plan authorizes the issuance of common shares to persons that exercise stock options granted. The Company’s employees, directors, officers, consultants and advisors are eligible to be granted stock options pursuant to this plan, provided that bona fide services are rendered by such consultants or advisors and such services must not be in connection with the offer or sale of securities in a capital-raising transaction. The stock option exercise price is determined by a committee and cannot be less than $0.001.

On November 30, 2010, the Company increased the number of shares issuable pursuant to this plan from 17,500,000 shares to 22,500,000 shares with 8,870,666 common shares available for future issuance as of September 30, 2011.

Management stock options

During the year ended December 31, 2010, the Company granted 28,500,000 stock options to five directors and one officer at an exercise price of $0.0714 per share. The stock options expire on December 31, 2020. Holders of the management stock options may exercise the options by paying the exercise price to the Company or on a cashless basis upon the approval of the Company’s board of directors. Should the options be exercised on a cashless basis, the Company will issue common shares of the Company with a market value equal to the intrinsic value of the options at the close of trading on the date of exercise. The management stock options were not issued under the Company’s Non-Qualified Stock Option Plan and as at July 1, 2010, the Company filed a registration statement under the Securities Act of 1933 to register the underlying shares. Accordingly, any shares issuable upon the exercise of these options will be free trading securities.

F-12

BIOCUREX, INC.

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. dollars)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

(Unaudited)

8.	STOCK-BASED COMPENSATION (continued)

A summary of the changes in the Company’s stock options is presented below:

	Number of Shares			Weighted Average Exercise Price $		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value $

Outstanding, December 31, 2010		33,094,757			0.062		7.98		294,064

Exercised		(2,288,157	)		0.001

Outstanding, September 30, 2011		30,806,600			0.066		7.81		57,665
Exercisable, September 30, 2011		21,306,600			0.064		7.59		57,665

As at September 30, 2011, there was $101,107 of unrecognized compensation costs related to non-vested share-based compensation arrangements granted which are expected to be recognized within a year. The compensation cost of shares vested was $280,451 and $1,406,000 for the nine months ended September 30, 2011 and 2010, respectively. Compensation cost has been included in general and administration expense in the statement of operations.

A summary of the status of the Company’s non-vested options as of September 30, 2011, and changes during the nine months end of September 30, 2011, is presented below:

	Number of			Weighted Average
Non-vested	Options			Exercise Price

Non-vested at December 31, 2010		19,000,000			0.0714
Vested during period		(9,500,000	)		0.0714

Non-vested at September 30, 2011		9,500,000			0.0714

F-13

BIOCUREX, INC.

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. dollars)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

(Unaudited)

9. SHARE PURCHASE WARRANTS

A summary of the changes in the Company’s share purchase warrants is presented below:

	Number of shares			Weighted Average Exercise Price
Balance, December 31, 2010		104,192,134			0.134
Expired		(4,775,526	)		0.12
Balance, September 30, 2011		99,416,608			0.13

As at September 30, 2011, the following share purchase warrants were outstanding:

Warrants	Exercise Price	Expiration Date

252,278	$0.05	31-Dec-2011(1)
1,000,000	$0.25	30-Apr-2012
2,000,000	$0.11	1-Apr-2012
2,204,730	$0.08	26-Aug-2014
3,500,000	$0.14	27-Jun-2012
90,459,600	$0.11	19-Jan-2015(2)
99,416,608

(1)	The warrants can be exercised by paying in cash or on a cashless basis.

(2)

The public warrants are exercisable at any time before January 19, 2015. The Company may redeem some or all of the public warrants at a price of $0.003 per warrant by giving the holders not less than 30 days’ notice at any time the common stock closes, as quoted on the Bulletin Board, at or above $0.143 per share for five consecutive trading days.

10. UNIT PURCHASE WARRANTS

On January 28, 2010, the Company issued a warrant in conjunction with an Underwriting Agreement. The warrant had an estimated fair value of $939,771 and it allows the underwriters to purchase up to 120,000 units at $6.00 per unit for a term of five years from January 19, 2015. Each unit consists of 70 shares of common stock and 70 warrants to purchase shares of the Company’s common stock at an exercise price of $0.107 per share. As at September 30, 2011, the 120,000 unit purchase warrants were outstanding.

11.	FAIR VALUE MEASUREMENTS

ASC 825 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.

Fair Value Hierarchy

ASC 825 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 825 establishes three levels of inputs that may be used to measure fair value.

F-14

BIOCUREX, INC.

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. dollars)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

(Unaudited)

Level 1

Level 1 applies to assets and liabilities for which there are quoted prices in active markets for identical assets or liabilities. Valuations are based on quoted prices that are readily and regularly available in an active market and do not entail a significant degree of judgment.

Level 2

Level 2 applies to assets and liabilities for which there are other than Level 1 observable inputs such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets), or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 2 instruments require more management judgment and subjectivity as compared to Level 1 instruments.

Level 3

Level 3 applies to assets and liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The determination of fair value for Level 3 instruments requires the most management judgment and subjectivity.

The Company’s financial instruments consist principally of cash, accounts payable, derivative liability, loans payable, convertible note payable to related party, convertible debt and amounts due to related parties. The carrying value of accounts payable and amounts due to related parties approximate fair value due to their nature and short terms of maturity. The carrying value of loans payable, convertible note payable to related party and convertible debt approximate fair value are based on market rates for similar financial instruments.

Assets and liabilities measured at fair value on a recurring basis were presented on the Company’s consolidated balance sheet as of September 30, 2011 as follows:

	Fair Value Measurements Using
	Quoted Prices in			Significant
	Active Markets			Other			Significant
	For Identical			Observable			Unobservable
	Instruments			Inputs			Inputs			Balance as of
	(Level 1)			(Level 2)			(Level 3)			September 30, 2011
Assets:
Cash		$	323,286		$	–		$	–		$	323,286

Total assets measured at fair value		$	323,286		$	–		$	–		$	323,286

Liabilities:

Derivative liabilities		$	–		$	49,521		$	–		$	49,521

Total liabilities measured at fair value		$	–		$	49,521		$	–		$	49,521

F-15

BIOCUREX, INC.

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. dollars)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

(Unaudited)

12.	DERIVATIVE LIABILITIES

The embedded conversion option in the Company’s note described in Note 6(b) contains a reset provision that can cause an adjustment to the conversion price if the Company issues certain equity instruments at a price lower than the initial conversion price. The fair value of these liabilities will be re-measured at the end of every reporting period and the change in fair value will be reported in our consolidated statement of operations as a gain or loss on derivative financial instruments.

The following table summarizes the change in derivative liabilities for the nine months ended September 30, 2011:

	$
Derivative liabilities at December 31, 2010		145,159
Settlement of derivative liabilities		(45,574	)
Change in fair value of derivative liabilities		(50,064	)
Derivative liabilities at September 30, 2011		49,521

The Company used the Black-Scholes option pricing model to value the embedded conversion feature using the following assumptions: number of options as set forth in the convertible note agreements; no expected dividend yield; expected volatility ranging from 99% - 175%; risk-free interest rates ranging from 0.16% - 1.98% and expected terms based on the contractual term.

F-16

BIOCUREX, INC.

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. dollars)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

(Unaudited)

13.	COMMITMENTS AND CONTINGENCIES

a)	On April 4, 2006, the Company entered into a consulting agreement with a term of nine months for consideration of 75,000 common shares. As of September 30, 2011, the Company had issued 37,500 common shares and 37,500 common shares are still owed to the consultant.

b)	On April 10, 2006, the Company entered into a consulting agreement with a term of one year for consideration of 75,000 common shares. As of September 30, 2011, the Company had issued 37,500 common shares and 37,500 common shares are still owed to the consultant.

c)	BioCurex China has entered into a lease agreement with a third party with a term from February 15, 2009 to February 1, 2012 in consideration of 78,200 RMB (approximately $11,885 USD) to be paid annually.

On January 3, 2011, the Company entered into a consulting agreement with CaroLink Science Solutions (“CaroLink”) whereby CaroLink will provide consulting services to the Company from January 3, 2011 to December 31, 2011 in consideration of common shares of the Company with an estimated fair value of approximately $30,000 to be paid through quarterly installments on March 31, June 30, September 30 and December 31. As at September 30, 2011, 450,000 common shares have been issued with a fair value of $18,000.

On July 12, 2011, the Company entered into a consulting agreement with Strategic Services (“Strategic”) whereby Strategic will provide consulting services to the Company from August 15, 2011 to November 15, 2011 in consideration of common shares of the Company to be issued through three equal installments on September 14, 2011, October 14, 2011 and November 13, 2011. As at September 30, 2011, 833,333 common shares have been issued with a fair value of $22,500 (see Note 14(b)).

14.	SUBSEQUENT EVENTS

a)	On October 12, 2011, the Company issued 1,200,000 shares of common stock to a vendor with an estimated fair value of $36,000 for consulting services.

b)	On October 14, 2011, 833,333 shares of common stock became issuable under the agreement disclosed in Note 13(e).

F-17

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION

We are a development stage biotechnology company developing products based on patented and proprietary technology in the area of cancer diagnostics. The technology identifies a universal cancer marker known as RECAF. Patents have been granted in the United States, Europe, Australia and China and are pending in other major worldwide markets.

RECAF is a molecule that is present on cancer cells but not detected in significant levels on healthy cells or benign tumor cells. It is the receptor for alpha-fetoprotein and is classified as an oncofetal antigen due to its presence on both fetal and malignant tissues. This characteristic makes RECAF a more accurate indicator of cancer than most current tumor markers.

We are commercializing our technology through licensing arrangements with companies that develop and market diagnostic tests for the large automated clinical laboratory setting, through development and marketing of non-automated clinical laboratory tests, through development of rapid, point-of-care test formats, and through marketing of our OncoPet RECAF test for cancer in companion animals.

Our business model is to develop internally our RECAF cancer diagnostic platform to the stage where individual applications can be partnered or licensed in strategic relationships for regulatory approval and commercialization. Our objective is to receive cash from licensing fees, milestone payments, and royalties from such partnerships which support continued development of our cancer diagnostic portfolio. We have signed licensing agreements for its cancer detection blood tests with Abbott Laboratories and with Inverness Medical Innovations. In the veterinarian market where there are no regulatory hurdles, our objective is to commercialize our technology through our subsidiary, OncoPet Diagnostics, and with distributors in North America, Europe and elsewhere.

Our principal objectives for the twelve-month period ending September 30, 2012 are as follows:

·	grant one additional license for our cancer detection blood test;

·	commercialize veterinary applications of RECAF testing technology through our wholly-owned subsidiary, OncoPet Diagnostics;

·	finish development for our rapid, point of care cancer test; and

·	commercialize other test formats through our wholly-owned subsidiary in China, BioCurex China Co., Ltd.

Our success is dependent upon several factors, including, maintaining sufficient levels of funding through pubic and/or private financing, establishing the reliability of our RECAF cancer tests in screening, diagnosis, and follow-up for cancer recurrence, securing and supporting strategic partnerships, securing regulatory approvals where necessary, and commercializing our technology. We may not be able to achieve these objectives by September 30, 2012, or at all.

Recent Developments

In October 2010 we filed a new patent within the Patent Cooperation Treaty, which presently includes 142 countries. The subject of this patent is a synthetic peptide that recognizes RECAF™ and that can replace the antibodies used in our RECAF test. The synthetic peptide also allows for many other applications that cannot be performed with an antibody. Our patent application contains over 50 claims covering different applications and uses of this peptide.

An antibody is a biological reagent that requires production under sterile conditions in large volumes of cell culture medium. The antibodies then need to be extracted and purified from the medium. This process is expensive and delicate. The synthetic peptide will allow our to replace the antibodies in the RECAF test. A peptide is a short sequence of amino acids, much like a very small protein. Peptides are produced with an automated peptide synthesizer. A well known small peptide is aspartame, the synthetic sweetener used in Nutrasweet®.

To make a peptide in a laboratory, its amino acids sequence is entered into a computer and the rest of the process is automatically handled by special computer software and instrumentation. Since the peptide is synthesized chemically rather than biologically, the batch-to-batch variability is drastically reduced and the cost reduction is significant. Being small molecules, peptides are also more stable than antibodies, resulting in longer shelf life and related issues.

The most important advantage of peptides over antibodies is their flexibility: Antibodies cannot be modified unless very expensive and complex molecular engineering processes are used. To change the specificity of an antibody, one has to develop a new one, which is a very labor intensive and unpredictable process. On the other hand, to modify a peptide, all that is required is to use a different amino acid sequence on the computer. This tremendous flexibility opens many possibilities for us, some of which are listed below:

1)	Tailoring dog, cat and other animal RECAF tests for each species rather than relying, on the cross reactivity exhibited by anti-human RECAF antibodies against dog RECAF.

2)	Tailor-tagging of the peptide for different uses such as cancer targeted therapy, imaging or blood diagnostic tests.

Attaching the peptide to liposomes for cancer targeting. Liposomes are artificially prepared vesicles that can be filled with anti-cancer drugs, Interference RNA or other compounds and delivered to cancer cells. Attaching the peptide to the surface of liposomes should increase the delivery to cancer cells since our peptide recognizes RECAF and RECAF is on the surface of cancer cells but not on healthy cells. Liposomes are used for delivery of a variety of formulations from medicine to cosmetics.

Incorporation of a DNA sequence that encodes the peptide into the DNA or RNA of a virus which would then express the peptide on its surface. Since the peptide recognizes RECAF which is on cancer cells but not on normal cells, the virus would only infect and kill the cancer cells thus becoming an oncolytic virus.

In October 2010 we entered into a non-exclusive distribution agreement with VetRed B.V. from Naarden, the Netherlands. VetRed, a private company under Dutch law, will represent our wholly owned subsidiary OncoPet Diagnostics to distribute our OncoPet RECAF™ cancer test for dogs in Europe.

Through a network of its own companies, agents and distributors, VetRed will market our OncoPet’s RECAF™ test to the European Union member states. Samples will be collected and grouped prior to their dispatch to our laboratories Canada. Europe is second in the world for its number of cats and dogs, according to a recent survey—there are approximately 78 million dogs and 94 million cats in Europe. The United States and Canada have the largest dog and cat population, with an estimated 52 million dogs and 66 million cats.

VetRed made an entrance in the veterinary diagnostic market in 2009 with the introduction of the Pandora® Slide Stainer, a tabletop fully automated unit, which stains in fully reproducible samples prior to their evaluation under the microscope. VetRed also markets chromogenic media for rapid determination of fungi and bacteria.

On November 4, 2011, our wholly owned subsidiary, OncoPet(TM) Diagnostics, Inc., has entered into another non-exclusive distribution agreement with Webster Veterinary Supply for the distribution of the OncoPet Sample Collection Kit for canine cancer diagnosis. Webster Veterinary, is a division of Patterson Companies, Inc.

Per the non-exclusive distribution agreement, Webster Veterinary will purchase vouchers for tests to be carried out in our facilities. The distributor then sells the vouchers to veterinarians, veterinary practices, veterinary hospitals and others within the United States and territories of the U.S. including Puerto Rico, Guam as well as others. The voucher includes a sample collection kit which the veterinarian will use to process the blood and ship the serum to our laboratory for testing. OncoPet then emails the results directly to the veterinarian.

Liquidity and Capital Resources

Since January 2003, we have been able to finance our operations primarily from equity and debt financing, the proceeds from exercise of warrants and stock options, interest income on funds held for investment, and license fees. We do not have lines of credit with banks or other financial institutions.

Our sources and (uses) of cash during the nine months ended September 30, 2011 and 2010 were as follows:

	Nine Months Ended September 30,
	2011			2010

Cash used in operations	$	(1,409,133	)	$	(1,832,514	)
Patent costs		(40,063	)		(81,698	)
Repayment of loans		-			(450,000	)
Repayment of convertible debt		-			(1,186,700	)
Proceeds from sale of common stock and exercise of options and warrants, net of issuance costs		-			5,699,874
Deferred financing costs		-			(94,851	)
Other		2,288			1,392

In June 2007, we sold convertible notes, plus warrants, to private investors for $3,000,000. The notes are due and payable on December 31, 2012 and are secured by substantially all of our assets. At the holder’s option the notes are convertible into shares of our common stock at a conversion price of $0.13. From the proceeds of our January 2010 public offering we repaid $1,186,700 to the note holders. Due to principal payments and conversions, the outstanding principal balance of the notes as of September 30, 2011 was $563,300.

In September 2009, we sold promissory notes in the principal amount of $575,000 to twenty accredited investors. As partial consideration for lending us the $575,000 we issued 8,214,292 shares of our common stock to the investors. With the proceeds from our January 2010 public offering we repaid $450,000 to the investors. The remaining balance of $125,000 bears interest at 10%, is unsecured, and is payable on or before January 31, 2013.

In January 2010 we sold 90,459,600 shares of our common stock at a price of $0.0714 per share in a public offering. For each share sold the investors also received one warrant. Each warrant entitles the holder to purchase one share of our common stock at a price of $0.107 per share at any time on or before January 2015. The net proceeds to us from the sale of the shares and warrants, after deducting underwriting commissions and offering costs, were approximately $5,700,000. The net cash provided from this financing after repayment of loans and convertible debt was approximately $3,970,000.

We anticipate that our capital requirements for the twelve-month period ending September 30, 2012 will be as follows:

Research, development and production of our diagnostic products	$	900,000
General and administrative expenses		700,000
Marketing and investor communications		150,000
Business development		50,000
Payment of interest on amended senior convertible notes and unsecured promissory notes		100,000
Payment of outstanding liabilities		250,000
	$	2,150,000

Our most significant capital requirements are research and development and general and administrative expenses. General and administrative expenses, exclusive of depreciation, amortization and other expenses not requiring the use of cash (such as the costs associated with issuing stock and options for services), average approximately $60,000 per month. Our research and development expenses vary, depending upon the scope of the programs that we undertake. As we move further through the development process our research activities become more mature and less capital intensive. New development projects may have additional capital requirements which we balance with capital available for such programs.

We may not be successful in obtaining additional capital in the future. If we are unable to raise the capital we need, our research and development activities will be curtailed or delayed and our operations will be reduced to a level which can be funded with the capital available to us.

Material changes of items in our Statement of Operations for the three and nine months ended September 30, 2011, as compared to the same period in the prior year, are discussed below:

	Increase (I)
Item	or Decrease (D)	Reason

General and administrative	D	The decrease was primarily attributable to lower stock-based compensation expense.

Professional and Consulting Fees	I	The Company entered into consulting agreements to strength the overall marketing strategies.

Research and Development	I	The increase was primarily attributable to lab materials, supplies and a new scientist was retained.

Interest expenses	D	The repayment of a large portion of the convertible notes in January 2010 resulted in decreasing of interest payment.

Accretion of discount on convertible debt (nine month period only)	D	The repayment of a large portion of the convertible notes in January 2010 resulted in the decrease in accretion of discount on the convertible debt during the year.

Amortization of debt issue costs (nine month period only)	D	A large portion of the convertible notes were repaid in January 2010. As a result, the debt issue costs were less during the current period.

Recent Accounting Pronouncements

See Note 2 to the financial statements which are included as part of this report.

Critical Accounting Policies

Our significant accounting policies are more fully described in Note 2 to the financial statements included as a part of this report. However, certain accounting policies are particularly important to the portrayal of our financial position and results of operations and require the application of significant judgments by management. As a result, the consolidated financial statements are subject to an inherent degree of uncertainty. In applying those policies, management uses its judgment to determine the appropriate assumptions to be used in the determination of certain estimates. These estimates are based on our historical experience, terms of existing contracts, observance of trends in the industry and information available from outside sources, as appropriate.

ITEM 4.

CONTROLS AND PROCEDURES

Our Principal Executive and Financial Accounting Officers have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934), as of the end of the period covered by this report, and in their opinion our disclosure controls and procedures are effective.

There were no changes in our internal control over financial reporting that occurred during the fiscal quarter ended September 30, 2011 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting as discussed above.

PART II

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Note 7 to the financial statements included as part of this report lists the shares of our common stock which were issued during the nine months ended September 30, 2011.

With the exception of the shares described in subparagraphs (b), (g) and (h) of Note 7, we relied upon the exemption provided by Section 4(2) of the Securities Act of 1933.

The shares described in the remaining subparagraphs of Note 7 were registered by means of a registration statement on Form S-8.

ITEM 6.

EXHIBITS

Exhibits

31.1

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

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

	BIOCUREX, INC.

November 14, 2011	By:	/s/ Dr. Ricardo Moro
		Dr. Ricardo Moro – Principal Executive Officer



November 14, 2011	By:'	/s/ Gladys Chan
		Gladys Chan – Principal Financial and
		Accounting Officer

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