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


FORM 10-Q
 

 
(Mark One)
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended September 30, 2012

¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from _______ to _______

Commission File Number:  000-52601

BIO-AMD, INC.
(Exact name of registrant as specified in its charter)
 
Nevada 20-5242826
(State or other jurisdiction of incorporation)  (I.R.S. Employer Identification No.)
 
3rd Floor, 14 South Molton Street, London, UK W1K 5QP
(Address of principal executive offices)
 
+ 44 (0) 8445 861910
(Registrant’s telephone number, including area code)
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  x No  ¨
 
Indicate by check mark 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 x  No ¨
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer o
 
Accelerated filer o
 
Non-accelerated filer o
 
Smaller reporting company x
       
(Do not check if a smaller
Reporting company)
   
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  ¨  No  x
 
There were 44,525,966 shares of the issuer’s common stock outstanding as of November 1st, 2012.
 
 
BIO-AMD, INC.
 
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2012
TABLE OF CONTENTS
 
   
PAGE
 
PART I - FINANCIAL INFORMATION
 
     
Item 1.
  3
     
Item 2.
  16
     
Item 3.
  26
     
Item 4.
  26
     
 
PART II - OTHER INFORMATION
 
     
Item 1.
  27
     
Item 1A.
  27
     
Item 2.
  27
     
Item 3.
  27
     
Item 4.
  27
     
Item 5.
  27
     
Item 6.
  35
     
    36

 
PART I – FINANCIAL INFORMATION
 
ITEM 1.  FINANCIAL STATEMENTS
 
 
PAGE
   
4
   
5
   
6
   
7
   
8
 
 
Bio-AMD, INC. AND SUBSIDIARIES
(A Development Stage Company)
CONDENSED CONSOLIDATED BALANCE SHEETS
 
   
September 30,
   
December 31,
 
   
2012
   
2011
 
   
(unaudited)
       
ASSETS
           
Current Assets:
           
  Cash and cash equivalents
  $ 3,183,953     $ 3,877,788  
  Prepaid expenses
    20,069       53,580  
  Value added tax and other receivables
    14,849       24,565  
                 
               Total Current Assets
    3,218,871       3,955,933  
                 
Property and equipment, net
    1,591       1,521  
                 
Security deposits and other assets
    35,964       29,830  
                 
Total Assets
  $ 3,256,426     $ 3,987,284  
                 
LIABILITIES AND EQUITY
               
                 
Current Liabilities:
               
   Accounts payable
  $ 27,382     $ 30,993  
   Accrued expenses
    15,182       3,726  
   Taxation and social security
    18,994       4,635  
                 
               Total Current Liabilities
    61,558       39,354  
                 
                Total Liabilities
    61,558       39,354  
                 
Commitments and contingencies
    -       -  
                 
Equity:
               
  Bio-AMD, Inc. Stockholders' Equity:
               
  Common stock, $0.001 par value, 500,000,000 shares authorized,
   44,525,966 shares issued and outstanding at September 30 2012, and December 31, 2011
    44,526       44,526  
  Additional Paid-in Capital
    42,271,527       42,471,629  
  Accumulated other comprehensive income (loss) - foreign currency translation adjustment
    141,536       (9,910 )
  Deficit accumulated during development stage
    (38,394,187 )     (37,807,576 )
               Total Bio-AMD, Inc. Stockholders' Equity
    4,063,402       4,698,669  
  Non-Controlling Interest
    (868,534 )     (750,739 )
  Total equity
    3,194,868       3,947,930  
                 
               Total Liabilities and Equity
  $ 3,256,426     $ 3,987,284  
 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
 
 
Bio-AMD, INC. AND SUBSIDIARIES
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 
                           
For the Period
 
 
                         
from March 10, 2006
 
   
For the three months
   
For the nine months
   
(date of inception) through
 
   
ended September 30,
   
ended September 30,
   
September 30,
 
   
2012
   
2011
   
2012
   
2011
   
2012
 
                               
Revenue
  $ -     $ -     $ -     $ -     $ -  
                                         
Operating expenses:
                                       
         Mining exploration costs
    -       -       -       -       24,726  
         Selling, general and administrative charges
    385,363       463,941       792,132       1,615,982       11,424,294  
         Impairment loss - mineral claims
    -       -       -       -       10,000  
                                         
Total operating expense
    385,363       463,941       792,132       1,615,982       11,459,020  
                                         
Operating loss
    (385,363 )     (463,941 )     (792,132 )     (1,615,982 )     (11,459,020 )
                                         
Other income:
                                       
         Interest and other income
    2,973       4,974       105,356       14,800       2,800,506  
                                         
Loss from continuing operations, before provision for income taxes
    (382,390 )     (458,967 )     (686,776 )     (1,601,182 )     (8,658,514 )
                                         
Provision for income tax
    -       -       -       -       -  
                                         
Loss from continuing operations
    (382,390 )     (458,967 )     (686,776 )     (1,601,182 )     (8,658,514 )
                                         
Income (loss) on discontinued operations, net of tax
    -       -       -       586,518       (30,541,871 )
                                         
Net loss
    (382,390 )     (458,967 )     (686,776 )     (1,014,664 )     (39,200,385 )
                                         
Net loss attributable to the non-controlling interest
    (34,035 )     (54,128 )     (100,165 )     (218,911 )     (806,198 )
Subsidiary preferred dividend attributable to the non-controlling interest
    (6,357 )     (11,524 )     (21,471 )     (27,331 )     (79,039 )
                                         
Net income (loss) attributable to Bio-AMD, Inc. Common Shareholders
  $ (341,998 )   $ (393,315 )   $ (565,140 )   $ (768,422 )   $ (38,315,148 )
                                         
Loss per common share from continuing operations attributable to Bio-AMD, Inc. common shareholders - basic
  $ (0.01 )   $ (0.01 )   $ (0.01 )   $ (0.03 )   $ (0.14 )
Loss per common share from continuing operations attributable to Bio-AMD, Inc. common shareholders - fully diluted
  $ (0.01 )   $ (0.01 )   $ (0.01 )   $ (0.03 )   $ (0.14 )
Loss per common share from discontinued operations attributable to Bio-AMD, Inc. common shareholders - basic
  $ -     $ -     $ -     $ 0.01     $ (0.55 )
Loss per common share from discontinued operations attributable to Bio-AMD, Inc. common shareholders - fully diluted
  $ -     $ -     $ -     $ 0.01     $ (0.55 )
Net loss per common share attributable to Bio-AMD, Inc. common shareholders - basic
  $ (0.01 )   $ (0.01 )   $ (0.01 )   $ (0.02 )   $ (0.69 )
Net loss per common share attributable to Bio-AMD, Inc. common shareholders - fully diluted
  $ (0.01 )   $ (0.01 )   $ (0.01 )   $ (0.02 )   $ (0.69 )
                                         
Weighted average number of common
shares outstanding - basic
    44,525,966       44,525,966       44,525,966       44,525,966       55,857,983  
                                         
Weighted average number of common
shares outstanding - fully diluted
    44,525,966       44,525,966       44,525,966       44,525,966       55,857,983  
                                         
Comprehensive Income (Loss):
                                       
Net income (loss )
  $ (382,390 )   $ (458,967 )   $ (686,776 )   $ (1,014,664 )   $ (39,200,385 )
Other comprehensive income (loss), net of tax:
                                       
Foreign currency translation adjustment, net of tax
    146,157       (73,968 )     155,287       (510,824 )     157,789  
Total other comprehensive loss, net of tax
    (236,233 )     (532,935 )     (531,489 )     (1,525,488 )     (39,042,596 )
Comprehensive loss attributable to the non-controlling interest
    31,512       52,963       96,324       207,298       789,946  
Comprehensive income (loss) attributable to the Bio-AMD Inc. Common Shareholders
  $ (204,721 )   $ (479,972 )   $ (435,165 )   $ (1,318,190 )   $ (38,252,650 )
 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
 
 
Bio-AMD, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF EQUITY
FOR THE PERIOD FROM MARCH 10, 2006 (DATE OF INCEPTION) THROUGH SEPTEMBER 30, 2012
 
                     
Deficit
Accumulated
    Accumulated              
                Additional    
During
   
Other
             
                Paid-in     Development     Comprehensive     Noncontrolling    
Total
 
   
Shares
   
Amount
   
 Capital
   
 Stage
    Income/(Loss)    
Interest
   
Equity
 
Shares issued to founders at $0.001 per share, March 10, 2006
    60,000,000     $ 60,000     $ (50,000 )   $ -     $ -     $ -     $ 10,000  
                                                         
Fair value of shares issued in lieu of payment for service on December 18, 2006
    412,038       412       47,659       -       -       -       48,071  
                                                         
Shares issued at $0.1167 per share in private placement on December 29, 2006
    14,142,846       14,143       1,620,857       -       -       -       1,635,000  
                                                         
Net Loss
                            (1,381,198 )     -       -       (1,381,198 )
Balance at December 31, 2006
    74,554,884       74,555       1,618,516       (1,381,198 )     -       -       311,873  
                                                         
Shares of common stock retired on May 11, 2007
    (51,685,723 )     (51,686 )     51,686       -       -       -       -  
                                                         
Fair value of compensatory element of insider stock not retired in May 2007
    -       -       307,978       -       -       -       307,978  
                                                         
Fair value of shares issued in lieu of payment for services at $0.90 per share on May 22, 2007
    137,344       137       123,382       -       -       -       123,519  
                                                         
Fair value of shares acquired at below market value on May 25, 2007
    -       -       178,300       -       -       -       178,300  
                                                         
Shares of common stock issued at $0.90 per share in private placement on May 29, 2007
    16,582,621       16,583       13,375,296       -       -       -       13,391,879  
                                                         
Fair value of shares issued on acquisition of Bio-AMD Ltd on May 29, 2007
    24,854,477       24,854       22,344,175       -       -       -       22,369,029  
                                                         
Shares of common stock issued at $0.90 per share in private placement on July 29, 2007
    4,871,838       4,872       3,935,317       -       -       -       3,940,189  
                                                         
Reserve held for shares to be issued for compensation on December 31, 2007
    -       -       34,125       -       -       -       34,125  
                                                         
Comprehensive income
    -       -       -       -       43,960       -       43,960  
                                                         
Net Loss
    -       -       -       (23,911,383 )     -       -       (23,911,383 )
Balance at December 31, 2007
    69,315,441       69,315       41,968,775       (25,292,581 )     43,960       -       16,789,469  
                                                         
Common stock issued for compensation on May 13, 2008
    65,000       65       24,310       -       -       -       24,375  
                                                         
Comprehensive loss
    -       -       -       -       (4,130,487 )     -       (4,130,487 )
                                                         
Net loss
    -       -       -       (4,163,437 )     -       -       (4,163,437 )
Balance at December 31, 2008
    69,380,441       69,380       41,993,085       (29,456,018 )     (4,086,527 )     -       8,519,920  
                                                         
Shares of common stock bought back on June 5, 2009
    (16,989,136 )     (16,989 )     (114,036 )     -       -       -       (131,025 )
                                                         
Shares of common stock bought back on October 9, 2009
    (7,865,341 )     (7,865 )     (55,058 )     -       -       -       (62,923 )
                                                         
Stock based compensation
    -       -       163,550       -       -       -       163,550  
                                                         
Comprehensive income
    -       -       -       -       4,742,968       512       4,743,480  
                                                         
Net loss
    -       -       -       (6,567,441 )     -       (209,004 )     (6,776,445 )
Balance at December 31, 2009
    44,525,964       44,526       41,987,541       (36,023,459 )     656,441       (208,492 )     6,456,557  
                                                         
Rounding Difference
    2       -       -       -       -       -       -  
                                                         
Sale of common stock by subsidiary
    -       -       -       -       -       451       451  
                                                         
Stock based compensation
    -       -       341,975       -       -       -       341,975  
                                                         
Comprehensive Loss
    -       -       -       -       (136,990 )     4,095       (132,895 )
                                                         
Subsidiary preferred dividend
    -       -       24,753       -       -       (24,753 )     -  
                                                         
Net Loss
    -       -       -       (2,342,149 )     -       (237,647 )     (2,579,796 )
Balance at December 31, 2010
    44,525,966       44,526       42,354,269       (38,365,608 )     519,451       (466,346 )     4,086,292  
                                                         
Stock based compensation
    -       -       84,545       -       -       -       84,545  
                                                         
Comprehensive Income
    -       -       -       -       (529,361 )     7,804       (521,557 )
                                                         
Subsidiary preferred dividend
    -       -       32,815       -       -       (32,815 )     -  
                                                         
Net Income
    -       -       -       558,032       -       (259,382 )     298,650  
Balance at December 31, 2011
    44,525,966       44,526       42,471,629       (37,807,576 )     (9,910 )     (750,739 )     3,947,930  
                                                         
Stock based compensation
    -       -       (221,573 )     -       -       -       (221,573 )
                                                         
Comprehensive Income
    -       -       -       -       151,446       3,841       155,287  
                                                         
Subsidiary preferred dividend
    -       -       21,471       -       -       (21,471 )     -  
                                                         
Net loss
    -       -       -       (586,611 )     -       (100,165 )     (686,776 )
Balance at September 30, 2012
    44,525,966     $ 44,526     $ 42,271,527     $ (38,394,187 )   $ 141,536     $ (868,534 )   $ 3,194,868  
 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
 

Bio-AMD, INC. AND SUBSIDIARIES
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
               
For the Period
 
               
from March 10, 2006
 
    For the nine months    
(date of inception) through
 
   
 ended September 30,
   
September 30,
 
   
2012
   
2011
   
2012
 
Cash flows from operating activities:
                 
Net loss
  $ (686,776 )   $ (1,014,664 )   $ (39,200,385 )
Income (loss) from discontinued operations
    -       586,518       (30,541,871 )
Loss from continuing operations
    (686,776 )     (1,601,182 )     (8,658,514 )
                         
Adjustments to reconcile net loss to net cash
used in operating activities:
                       
         Depreciation
    -       4,417       8,899  
         Impairment loss - mineral claims
    -       -       10,000  
         Impairment loss - other assets
    -       -       42,055  
         Shares of common stock issued or acquired in lieu of payment for services
    -       -       716,369  
         Stock based compensation
    (221,573 )     47,797       368,497  
         Changes in operating assets and liabilities:
                       
              Prepaid expenses and other current assets
    34,384       8,926       (45,659 )
              Sales tax and other receivable
    10,461       (2,047 )     (48,745 )
              Security deposit and other assets
    (4,643 )     (17,850 )     (68,651 )
              Accounts payable
    6,484       41,196       101,422  
              Accrued expenses
    -       (15,590 )     126,105  
              Taxation and social security payable
    13,805       (619 )     57,951  
                Total Adjustments
    (161,082 )     66,230       1,268,243  
                         
                Net cash used in operating activities of continuing operations
    (847,858 )     (1,534,952 )     (7,390,271 )
                         
Cash flows from investing activities:
                       
Purchase of property and equipment
    -       (11,851 )     (20,672 )
Purchase of mineral claim
    -       -       (10,000 )
               Net cash used in investing activities of continuing operations
    -       (11,851 )     (30,672 )
                         
Cash flows from financing activities:
                       
Repurchase of common stock
    -       -       (193,948 )
Proceeds from sale of noncontrolling interest
    -       -       451  
Proceeds from sale of shares of common stock in private placements, net of issuance costs
    -       -       18,977,068  
               Net cash provided by financing activities of continuing operations
    -       -       18,783,571  
                         
Cash flows from discontinued operations:
                       
Cash provided by operating activities of discontinued operations
    -       -       (7,827,131 )
Cash used in investing activities of discontinued operations
    -       -       (1,062,015 )
Cash provided by (used in) financing activities of discontinued operations
    -       -       -  
Effects of exchange rate changes on cash from discontinued operations
    -       -       -  
               Net cash flows from discontinued operations
    -       -       (8,889,146 )
                         
Effects of exchange rate changes on cash from continuing operations
    154,023       79,702       710,471  
                         
Net (decrease) increase in cash and cash equivalents
    (693,835 )     (1,467,101 )     3,183,953  
                         
Cash and cash equivalents, beginning of period
    3,877,788       4,370,011       -  
                         
Cash and cash equivalents, end of period
  $ 3,183,953     $ 2,902,910     $ 3,183,953  
                         
Supplementary disclosure of cash flow information:
                       
Cash paid during the period for:
                       
Interest
  $ -     $ -     $ -  
Income tax
  $ -     $ -     $ -  
                         
Supplemental schedule of non-cash investing and financing activities:
                       
Continuing Operations:
                       
Shares of common stock issued or acquired in lieu of payment for services
  $ -     $ -     $ 716,369  
Total non-cash investing and financing activities from continuing operations
  $ -     $ -     $ 716,369  
                         
Discontinued Operations:
                       
Transaction costs in connection with asset acquisition
  $ -     $ -     $ 22,897,759  
Office equipment acquired on credit / accounts payable
  $ -     $ -     $ 1,760  
Asset-prepaid expense acquired in connection with FFE Ltd.
  $ -     $ -     $ 449  
Liabilities-accounts payable assumed in connection with FFE Ltd.
  $ -     $ -     $ 4,516  
Liabilities-accrued expenses assumed in connection with FFE Ltd.
  $ -     $ -     $ 50,464  
Total non-cash investing and financing activities from discontinued operations
  $ -     $ -     $ 22,954,948  
 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
 
   Bio -AMD, Inc. and Subsidiaries
(A Development Stage Company)
Notes to Condensed Consolidated Financial Statements
September 30, 2012
 
Note 1 - Nature of Operations and Going Concern

General
 
The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and note disclosures normally included in annual consolidated financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.
 
In the opinion of management, the unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the consolidated financial position as of September 30, 2012 and the results of operations and cash flows for the three and nine month periods ended September 30, 2012 and 2011 and for the period from March 10, 2006 (date of inception) through September 30, 2012. The financial data and other information disclosed in the notes to the interim condensed consolidated financial statements related to these periods are unaudited. The results for the three and nine month periods ended September 30, 2012 are not necessarily indicative of the results to be expected for any subsequent quarter or the entire year ending December 31, 2012.
 
These unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto for the year ended December 31, 2011, included in the Company’s annual report on Form10-K filed with the SEC on March 29, 2012.
 
The condensed consolidated financial statements as of December 31, 2011 have been derived from the audited consolidated financial statements at that date but do not include all disclosures required by the accounting principles generally accepted in the United States of America.

Nature of Operations
 
Bio-AMD, Inc. (“Bio-AMD” the “Company”, “we”, “us”, “our”) (formerly Flex Fuels Energy, Inc. and Malibu Minerals, Inc.) was incorporated in the State of Nevada on March 10, 2006 to engage in the business of exploration and discovery of gold, minerals, mineral deposits and reserves.

On April 15, 2011, we entered into an Agreement and Plan of Merger (the "Merger Agreement") pursuant to which we merged with our newly formed, wholly owned subsidiary, Bio-AMD, Inc., a Nevada corporation ("Merger Sub" and such merger transaction, the "Merger"). Upon the consummation of the Merger, the separate existence of Merger Sub ceased and shareholders of the Company became shareholders of the surviving company named Bio-AMD, Inc. As permitted by Chapter 92A.180 of Nevada Revised Statutes, the sole purpose of the Merger was to effect a change of our name. Upon the filing of Articles of Merger (the "Articles of Merger") with the Secretary of State of Nevada on April 15, 2011 to effect the Merger, our Articles of Incorporation were deemed amended to reflect the change in our corporate name.  We are quoted on OTC Markets and the OTC Bulletin Board under the symbol “BIAD”. We changed our name to “Bio-AMD, Inc.” to reflect a name which recognizes our core business area.
 
During the fourth quarter of our 2006 fiscal year, for the purpose of diversifying our business, acquiring capital, gaining greater access to the capital markets and with the assistance of newly acquired capital, we entered into an Agreement with Flex Fuels Energy Limited (“FFE Ltd”) and the stockholders of FFE Ltd and FFE Ltd became our wholly-owned subsidiary effective on May 29, 2007. FFE Ltd engaged in the development of the business of manufacturing and distributing Oil Seed Rape (“OSR”) products. 
 

Effective September 5, 2009, after having carefully evaluated all options, we determined to abandon our proposed oil seed business as we no longer considered the business to be economically viable on either a go alone or partnered basis.  The proposed project initiated by prior management involving the establishment of an oil seed crushing plant at Cardiff by our wholly owned subsidiary, FFE Ltd, was compromised by constant delays, sub-optional design and substantial legal costs.  We were unable to raise the approximately $123,000,000 needed for maximum project efficiency, to locate a project partner, or to divest our interest in the project for value.  Accordingly, we determined that our best course of action was to preserve value by winding down the oil seed operations of FFE Ltd. which we have done on an orderly basis. The historical operations and costs of FFE Ltd and its assets and liabilities at December 31, 2011 and 2010 and for the period from March 10, 2006 (date of inception) through September 30, 2012 are classified as discontinued operations in the accompanying consolidated financial statements.

FFE Ltd. was formally dissolved in February 2011; the final winding down accounting transactions took place in May 2011.
 
On May 1, 2009, we entered into an Investment Agreement (the “Investment Agreement”) with WDX Organisation Limited (“WDX”), a corporation incorporated under the laws of England and Wales, and the founding shareholders of WDX (the “Founders”), the owners of all of the issued and outstanding shares of WDX.  On the same date, we entered into a related Loan Agreement (the “Loan Agreement”) and a related Option and Funding Agreement (the “Funding Agreement”) with WDX.  The Investment Agreement, Loan Agreement and Funding Agreement are hereinafter collectively referred to as the “Agreements”. Pursuant to the Agreements we acquired 51% ownership of WDX. WDX is the developer of a technology designed to mitigate currency risk. On August 14, 2009 we provided a further £150,000 (approximately $247,800) to WDX by way of a loan and have exercised certain call options. On November 20, 2009 we loaned an additional £150,000 (approximately $249,840) to WDX and increased our equity position in WDX. Altogether, these transactions have resulted in a total loan of £450,000 (approximately $717,000) to WDX and the ownership of 75.66% of WDX by the Company, as at the fiscal year ended December 31, 2009.  During fiscal year ended December 31, 2010, WDX applied for an international patent over its algorithm and system of providing reference data for the global currency unit, and has been working to develop contracts with a variety of banks, currency exchange networks, data providers and derivative exchanges in an effort to commercialize its technology through licensing agreements.

On March 8, 2010, we loaned an additional £150,000 (approximately $224,055) to WDX and executed certain call options and further increased our equity position in WDX. The loans were the result of our ongoing investment in WDX as contemplated by our May 1, 2009 Investment Agreement with WDX.
 
Altogether, these transactions resulted in a total loan of £600,000 (approximately $904,000) to WDX and the ownership of 93% of WDX by the Company on March 8, 2010.
 
On July 23, 2010 we entered into a Subscription Agreement with WDX and the founders of WDX under which we purchased 500,000 preference shares of WDX (the “Preference Shares”) at a price of one British Pound per share or an aggregate of 500,000 British Pounds (approximately $750,000).   The Preference Shares earn in priority to any other class of stock of WDX, a cumulative dividend equal to 5% of the subscription price of such Preference Shares per annum. These Preference Shares carry a preference over all other classes of WDX stock in the event of a sale, liquidation or listing of WDX. Upon liquidation, sale or listing and after repayment of the outstanding loans made by us to WDX, other liabilities of WDX and related transaction costs, the holder of the Preference Shares is entitled to a payment equal to three times the subscription price (the “Preference Shares Payment”) paid for such Preference Shares.  The Preference Shares are redeemable upon a sale, listing or winding down of WDX.
 
 
The Subscription Agreement also provided for WDX to allot up to an aggregate of 16,900 C Ordinary Shares of WDX to employees, directors and consultants of WDX to secure their continued service to WDX and incentivize them in the performance thereof.  An aggregate of 14,061 C Ordinary Shares were issued, for nominal consideration, to four persons on July 23, 2010, each of whom is a director of WDX, including the three incumbent management founders of WDX and Robert Galvin.  Mr. Galvin received 1,736 C Ordinary Shares. Mr. Galvin also serves as our chief financial officer and treasurer and as one of our directors. The issuance of the 14,061 C Ordinary Shares reduced our ownership in WDX from 93% to 77.54%.

Effective June 30, 2011, WDX agreed with all three of its employees to terminate existing employment agreements so as to reduce the monthly cash outflows. As a result of the termination of employment contracts and in accordance with the WDX Articles of Association terminated employees gave up 9,243 C Ordinary Shares. This increased our ownership in WDX to 87.13%. WDX has not generated any revenue to date.

During November 2011 we loaned an additional £50,000 to WDX as a short-term unsecured intercompany loan. On July 12, 2012 it was agreed that this loan will be settled through the issuance to us of 5,000,000 ordinary shares, increasing our ownership in WDX to 99.81%

On February 25, 2010, we entered into a Subscription and Shareholders Agreement with Bio-AMD Holdings Limited (“Bio-AMD Holdings”), a United Kingdom company, and the managers of Bio-AMD Holdings, under which we acquired a 63% interest in Bio-AMD Holdings for £865,000 British Pounds Sterling (approximately $1,335,000) through the purchase of preferred shares.  The preferred shares accrue dividends at the rate of 5% per year and provide for a preference in liquidation equal to £865,000, plus accrued unpaid dividends (the preference on a sale is £850,000, plus accrued and unpaid dividends). Bio-AMD Holdings is a development stage company, formed in February 2010, which, through its operating subsidiary, Bio Alternative Medical Devices Ltd. (“Bio-Medical”), principally operates in the Medical Point of Care (“PoC”) diagnostic space. Where context requires, reference to Bio-AMD Holdings also includes reference to Bio-Medical. Bio-AMD Holdings owns three patents and three patent applications on technologies which it expects to enable it to develop highly accurate, low cost, hand held electronic diagnostic devices capable of reading third party assays. During the fiscal years ended December 31, 2011 and 2010 Bio-AMD Holdings has been developing further its technology into three initial product types 1) a digital strip reader targeted initially into the “over the counter” pregnancy testing market, 2) a blood coagulation device and 3) early stage development work into a quantitative magnetic particle reader.  In addition, Bio-AMD Holdings has worked on the development of various commercial relationships with manufacturers, bio-chemistry companies and sales distributions partners to enable commercialization of its products through licensing agreements.  As at September 30, 2012 and December 31, 2011, there were no commercial agreements in place, and no revenues had been generated by Bio-AMD Holdings.

Bio-AMD, Inc., WDX, a majority-owned subsidiary, Bio-AMD Holdings, a majority-owned subsidiary, and FFE Ltd. (dissolved in 2011), are hereafter collectively referred to as “Bio-AMD”, “we”, “us”, “our” or, the “Company”.

Going Concern

The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  The Company is a development stage entity and has not commenced its planned principal operations. As shown in the accompanying unaudited condensed consolidated financial statements, the Company has not generated any revenue and has incurred recurring losses for the period from March 10, 2006 (date of inception) through September 30, 2012.  Additionally, the Company has negative cash flows from continuing operations since its date of inception of $7,390,271 and has an accumulated deficit of $38,394,187 at September 30, 2012.  These factors raise substantial doubt about the Company’s ability to continue as a going concern.
 
  
The Company’s ability to continue existence is dependent upon commencing its planned operations, management’s ability to develop and achieve profitable operations and/or upon obtaining additional financing to carry out its planned business.  The Company intends to fund its development of the currency risk technology, diagnostic technology and acquisition endeavors and operations through equity and debt financing arrangements.  However, there can be no assurance that these arrangements will be sufficient to fund its ongoing capital expenditures, working capital, and other cash requirements.  The outcome of these matters cannot be predicted at this time.
 
There can be no assurance that any additional financings will be available to the Company on satisfactory terms and conditions, if at all.  In the event we are unable to continue as a going concern, we may elect or be required to seek protection from our creditors by filing a voluntary petition in bankruptcy or may be subject to an involuntary petition in bankruptcy. To date, management has not considered this alternative, nor does management view it as a likely occurrence.
 
The accompanying unaudited condensed consolidated financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern. 
 
Note 2 - Summary of Significant Accounting Policies
 
Use of estimates

The preparation of consolidated financial statements in conformity with generally accepted accounting principles 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 consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
 
Development stage entity

The Company is considered to be a development stage entity, as defined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 915. The Company has not generated any revenues to date, has incurred significant expenses and has sustained recurring losses. Consequently, its operations are subject to all the risks inherent in the establishment of a new business enterprise. For the period from March 10, 2006 (date of inception) through September 30, 2012, the Company has accumulated deficit of $38,394,187 (of which $30,541,871 has been incurred by the discontinued operations).
 
Principles of consolidation

The consolidated financial statements include the accounts of Bio-AMD, Inc., Flex Fuels Energy Limited (“FFE Ltd”), a wholly owned subsidiary including the FFE Ltd. Subsidiaries (consisting of four inactive companies), WDX Organisation Ltd. (a 99.81% owned subsidiary as of September 30, 2012) and Bio-AMD Holdings Limited (a 63% owned subsidiary as of September 30, 2012). All significant intercompany transactions and balances have been eliminated in consolidation.  FFE Ltd ceased to be a variable interest entity on May 29, 2007 when the Company acquired the remaining 85% of FFE Ltd. Effective June 5, 2009 we have accounted for FFE Ltd as discontinued operations. FFE Ltd had been formally dissolved within May 2011.
 
The 0.19% third party ownership of WDX and 37% third party ownership of Bio-AMD Holdings at September 30, 2012 and December 31, 2011 is recorded as non-controlling interests in the unaudited condensed consolidated financial statements. 
  

Foreign currency translation

The Company’s reporting currency is US Dollars. Bio-AMD’s functional currency is US Dollars. The accounts of the Company’s 99.81% owned subsidiary, WDX, and its 63% owned subsidiary, Bio-AMD Holdings, are maintained using the local currency (Great British Pound) as the functional currency. Monetary assets and liabilities are translated into U.S. Dollars at balance sheet date and revenue and expense accounts are translated at the average exchange rate for the year or the reporting period. The translation adjustments are deferred as a separate component of stockholders’ equity, captioned as accumulated other comprehensive (loss) gain.  Transaction gains and losses arising from exchange rate fluctuation on transactions denominated in a currency other than the functional currency are included in the consolidated statements of operations. 
  
Basic and diluted loss per share

We utilize ASC 260, “Earnings Per Share” for calculating the basic and diluted loss per share. In accordance with ASC 260, the basic and diluted loss per share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding. Diluted net loss per share is computed similar to basic loss per share except that the denominator is adjusted for the potential dilution that could occur if stock options, warrants, and other convertible securities were exercised or converted into common stock. Potentially dilutive securities are not included in the calculation of the diluted loss per share if their effect would be anti-dilutive. The Company has 10,100,000 common stock equivalents at September 30, 2012 and 2011. For the three and nine month periods ended September 30, 2012 and 2011 these potential shares were excluded from the shares used to calculate diluted earnings per share as their inclusion would reduce net loss per share. 
 
Fair value of financial instruments
 
Our short-term financial instruments, including cash, receivables, prepaid expenses and other assets, accounts payable and other liabilities, consist primarily of instruments without extended maturities, the fair value of which, based on management’s estimates, reasonably approximate their book value.

Income taxes

The Company utilizes ASC 740 “Income Taxes” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income.  

Concentrations of Credit Risk

The Company maintains cash and cash equivalents with major financial institutions. Cash held in UK bank accounts is insured by the Financial Services Authority (“FSA”) up to £85,000 at September 30, 2012 (approximately $137,000 at September 30, 2012) at each institution for each entity.  At time, such amounts may exceed the FSA limits.  The uninsured cash bank balances were approximately $2,811,000 and $3,492,000 at September 30, 2012 and December 31, 2011, respectively.  The Company has not experienced any loss on these accounts.  The balances are maintained in demand accounts to minimize risk.
 
 
Stock-based compensation

The Company accounts for its stock based compensation under ASC 718 “Compensation – Stock Compensation” using the fair value based method. Under this method, compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period.  This guidance establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments. 
 
The Company accounts for its stock based compensation under ASC 718 “Compensation – Stock Compensation” using the fair value based method. Under this method, compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. This guidance establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments. Stock based compensation recorded in the unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2012 was $0 and a credit of $221,573, respectively, the credit amount being due to a reassessment of the estimated vesting of unvested warrants. Stock based compensation recorded in the unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2011 was expense of $17,889 and $47,797, respectively.
  
Recently Issued Accounting Standards

Recent accounting pronouncements issued by the FASB and the SEC did not or are not believed by management to have a material impact on the Company's present or future consolidated financial statements.
 
Note 3 - Related Party Transactions
 
During the three month periods ended September 30, 2012 and 2011, we paid an aggregate of $45,449 and $43,874, respectively to The ARM Partnership (“ARM”), a partnership in which Robert Galvin, our Chief Financial Officer and Treasurer is a partner, for services provided to us by Mr. Galvin in all capacities. During the nine month periods ended September 30, 2012 and 2011, we paid an aggregate of $135,322 and $130,572 to ARM. Mr. Galvin owns 12.33% of the outstanding share capital of Bio-AMD Holdings. In addition, the Company paid a total of £4,500 and £4,500 during the nine month periods ended September 30, 2012 and 2011, respectively, (approximately $7,100 and $7,300, respectively), for the use of ARM’s offices in central London located at 3rd Floor, 14 South Molton Street, London, UK. The Company has use of the office space for internal, board and third party meetings and document storage. The rental charge for use of the premises by the Company is currently set at £500 per month (approximately $800), which provides only partial reimbursement of the lease and other direct occupancy costs incurred by the ARM Partnership.
   
Note 4 - Commitments and Contingencies
 
Lease commitments
 
The Company has no long-term lease commitments. All leases are terminable with 2 – 3 months’ notice.
 
Rent expense was $19,133 and $21,361 for the three month periods ended September 30, 2012 and 2011, respectively. Rent expense was $58,421 and $66,476 for the nine month periods ended September 30, 2012 and 2011, respectively.
 
 
Consulting agreements

The Company has entered into consulting agreements with outside contractors, certain of whom are also the Company’s stockholders and directors. The Agreements are generally for a term of one year or less from inception and renewable unless either the Company or Consultant terminates such agreement by written notice.  The Company incurred $152,702 and $142,453 in consulting fees to these individuals for the three month periods ended September 30, 2012 and 2011, respectively.  The Company incurred $458,297 and $416,773 in consulting fees to these individuals for the nine month periods ended September 30, 2012 and 2011, respectively. The Company incurred $2,368,644 in fees to these individuals for the period from March 10, 2006 (date of inception) through September 30, 2012.

Litigation

From time to time we may be a defendant and plaintiff in various legal proceedings arising in the normal course of our business. We are currently not a party to any material legal proceedings or government actions, including any bankruptcy, receivership, or similar proceedings. In addition, we are not aware of any known litigation or liabilities involving the operators of our properties that could affect our operations. Furthermore, as of the date of this Report, our management is not aware of any proceedings to which any of our directors, officers, or affiliates, or any associate of any such director, officer, affiliate, or security holder is a party adverse to our company or has a material interest adverse to us.
 
Note 5 - Segment Information

We currently operate in two segments, 1) the development of a technology designed to mitigate currency risk through our 99.81% owned subsidiary, WDX as of September 30, 2012, and 2) the development of highly accurate, low cost, hand held, electronic medical diagnostic devices capable of reading third party assays through our 63% owned subsidiary, Bio-AMD Holdings as of September 30, 2012. Segment information for the three and nine months ended September 30, 2012 and 2011 consists of the following:
 
Three months ended September 30, 2012:
 
   
WDX
   
Bio-AMD Holdings
   
Other
(Corporate)
   
Consolidated
 
                         
Revenue
 
$
-
   
$
-
   
$
-
   
$
-
 
Interest income
   
3
     
-
     
1,495
     
1,498
 
Other income
   
1,475
     
-
     
-
     
1,475
 
Segment net income (loss)
   
(54,315
   
(91,707
   
(236,368
   
(382,390
Segment total assets
   
37,186
     
389,263
     
2,829,977
     
3,256,426
 
Expenditures for segment assets
   
-
     
-
     
-
     
-
 
 
Three months ended September 30, 2011:

   
WDX
   
Bio-AMD Holdings
   
Other
(Corporate)
   
Consolidated
 
                         
Revenue
 
$
-
   
$
-
   
$
-
   
$
-
 
Interest income
   
-
     
-
     
2,475
     
2,475
 
Other income
   
2,499
     
-
     
-
     
2,499
 
Segment net income (loss)
   
(51,900
   
(114,785
   
(292,282
   
(458,967
Segment total assets
   
90,750
     
726,909
     
2,203,620
     
3,021,279
 
Expenditures for segment assets
   
4,036
     
-
     
-
     
4,036
 
 
 
Nine months ended September 30, 2012:
 
   
WDX
   
Bio-AMD Holdings
   
Other
(Corporate)
   
Consolidated
 
                         
Revenue
 
$
-
   
$
-
   
$
-
   
$
-
 
Interest income
   
35
     
-
     
5,366
     
5,401
 
Other income
   
99,955
     
-
     
-
     
99,955
 
Segment net loss
   
(78,445
   
(262,044
   
(346,287
   
(686,776
Segment total assets
   
37,186
     
389,263
     
2,829,977
     
3,256,426
 
Expenditures for segment assets
   
-
     
-
     
-
     
-
 
 
Nine months ended September 30, 2011:
 
   
WDX
   
Bio-AMD Holdings
   
Other
(Corporate)
   
Consolidated
 
                         
Revenue
 
$
-
   
$
-
   
$
-
   
$
-
 
Interest income
   
157
     
-
     
8,427
     
8,584
 
Other income
   
6,216
     
-
     
-
     
6,216
 
Segment net income (loss)
   
(436,084
   
(326,936
   
(251,644
   
(1,014,664
Segment total assets
   
90,750
     
726,909
     
2,203,620
     
3,021,279
 
Expenditures for segment assets
   
11,434
     
417
     
-
     
11,851
 

 
ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
Statement Regarding Forward-Looking Information
 
This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts included in this Quarterly Report on Form 10-Q, including without limitation, statements in this Management’s Discussion and Analysis of Financial Condition and Results of Operations regarding our financial position, estimated working capital, business strategy, the plans and objectives of our management for future operations and those statements preceded by, followed by or that otherwise include the words “believe”, “expects”, “anticipates”, “intends”, “estimates”, “projects”, “target”, “goal”, “plans”, “objective”, “should”, or similar expressions or variations on such expressions are forward-looking statements. We can give no assurances that the assumptions upon which the forward-looking statements are based will prove to be correct. Because forward-looking statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by the forward-looking statements. There are a number of risks, uncertainties and other important factors that could cause our actual results to differ materially from the forward-looking statements, including, but not limited to, the availability and pricing of additional capital to finance operations.
 
Except as otherwise required by the federal securities laws, we disclaim any obligations or undertaking to publicly release any updates or revisions to any forward-looking statement contained in this Quarterly Report on Form 10-Q to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
 
The following discussion should be read in conjunction with our unaudited condensed consolidated financial statements and the accompanying notes included elsewhere in this Quarterly Report on Form 10-Q.
 
Overview
 
We were incorporated in the State of Nevada under the name Malibu Minerals, Inc. on March 10, 2006, to engage in the business of exploration and discovery of gold, minerals, mineral deposits and reserves. On July 6, 2007 we changed our name to Flex Fuels Energy, Inc. through a merger effected for that sole purpose. On April 15, 2011 we changed our name to Bio-AMD, Inc. through a merger effected for that sole purpose. During the fourth quarter of 2006, we acquired a 15% interest in Flex Fuels Energy Limited (“FFE Ltd.”). In May 2007 we completed the acquisition of the remaining 85% of FFE Ltd., making FFE Ltd. a wholly owned subsidiary of ours.  FFE Ltd., a development stage company, was formed on November 26, 2006 under the laws of England and Wales to engage in the business of manufacturing and distributing oil seed rape (“OSR”) products. Effective September 5, 2009, we determined to abandon FFE Ltd.’s proposed oil seed business and related projects as we no longer considered the business to be economically viable on either a go alone or partnered basis. FFE Ltd was formally dissolved in February 2011 and the final winding down accounting transaction took place in May 2011.
 
 
The effect of reporting FFE Ltd. as a discontinued operation, is to effectively revert the consolidated financial statements back to those items associated with the parent company, reflecting mainly compliance related costs and movements in shareholders’ funds, and to the investment made by us into our Bio AMD Holdings Limited and WDX Organisation Limited subsidiaries, as described herein.
 
On May 1, 2009 we acquired stock of WDX Organisation Limited, a corporation incorporated under the laws of England and Wales (“WDX”) representing a 51% interest in the company. Since such time, we have acquired additional stock of WDX and since July 12, 2012 we have owned 99.81% of WDX making it a majority owned subsidiary of ours. WDX is the developer of a technology designed to mitigate currency risk.
 
On February 25, 2010, we entered into a Subscription and Shareholders Agreement with Bio AMD Holdings Limited (“Bio-AMD”), a UK limited company, and the managers of Bio-AMD, under which business we acquired 63% of the fully diluted equity in Bio-AMD for £865,000 GBP (approximately US$1,287,000 at the time of purchase). Bio-AMD is a technology company focused in the rapidly expanding medical diagnostic Point Of Care (“POC”) market. Bio-AMD owns a portfolio of patents and has several patent applications for technologies being developed in conjunction with bio-chemistry and Original Equipment Manufacturers into low cost hand-held, digital diagnostic measurement devices able to read a Bio-AMD developed test strip and third party assays.
 
On December 24, 2011, we sold the mineral licenses and associated rights over the “Malibu Gold Property” which was originally acquired on March 27, 2006 to engage in the business of exploration and discovery of gold, minerals, mineral deposits and reserves. The claims were sold for gross proceeds of 20,000 Canadian Dollars (approximately US$20,000 at the time of payment), subject to a commission payable of 15% equivalent to 3,000 Canadian Dollars (approximately US$3,025 at the time of payment).
 
Business Overview
 
During the quarter ended September 30, 2012, we were engaged in the following sectors:
 
Ÿ  
developing our POC medical diagnostic reader device business; and
 
Ÿ  
developing our currency risk mitigation business.
 
Although we maintained considerable cash balances throughout the fiscal quarter ended September 30, 2012, we have incurred operating losses since our inception and have generated no revenues. As a result, we have generated negative cash flow and had an accumulated deficit of $38,394,187 as of September 30, 2012.
 
Results of Operations
 
Losses from Continuing Operations
 
We incurred losses from continuing operations of $382,390 and $686,776 for the three and nine month periods ended September 30, 2012 compared to losses from continuing operations of $458,967 and $1,601,182 for the three and nine month periods ended September 30, 2011.
 
 
The main components of the recorded operating loss from continuing operations during the three and nine month periods ended September 30, 2012 compared to losses from continuing operations during the three and nine month periods ended September 30, 2011 and for the period from March 10, 2006 (date of inception) through September 30, 2012 were as follows:
 
         
3 months ended
September 30,
   
9 months ended
September 30,
   
For the
Period from
March 10, 2006
(date of inception)
through
September 30,
 
   
Note
   
2012
   
2011
   
2012
   
2011
   
2012
 
Consulting expenses
  1     $ 152,702     $ 142,453     $ 458,297     $ 416,773     $ 2,368,644  
Payroll and administrative expenses
  2     $ 53,935     $ 68,535     $ 158,371     $ 460,382     $ 2,357,406  
Legal Fees
  3     $ 15,164     $ 116,692     $ 45,426     $ 314,704     $ 4,099,888  
Professional Fees
  4