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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     $ 23,026     $ 35,923     $ 117,988     $ 114,319     $ 1,179,498  
Rent, Office related, Telecoms and Miscellaneous
  5     $ 44,575     $ 53,772     $ 124,814     $ 163,782     $ 654,392  
Warrant issuance
  6     $ 0     $ 17,882     $ (221,573 )   $ 47,797     $ 368,497  
 
(1)           Consulting expenses increased slightly by $10,249 to $152,702 for the three month period ended September 30, 2012, compared to $142,453 for the three month period ended September 30, 2011 and increased by $41,524  to $458,297 for the nine month period ended September 30, 2012 compared to $416,773 for the nine month period ended September 30, 2011. Consulting expenses includes consultants engaged with the management and administration of the Company utilized in the course of our operations and those of our subsidiaries.  The increase was primarily due to a previously stated employee within WDX who is now retained as a consultant and accounted for as a consulting expense accordingly (see note 2 below).
 
(2)           Payroll and administrative expenses reduced by $14,600 from $68,535 for the three month period ended September 30, 2011 to $53,935 for the three month period ended September 30, 2012 and reduced by $302,011 from $460,382 for the nine month period ended September 30, 2011 to $158,371 for the nine month period ended September 30, 2012. The reduction was primarily due to the termination of all employee contracts in WDX in June 2011.
 
(3)           Legal fees reduced by $101,528 from $116,692 for the three month period ended September 30, 2011 to $15,164 for the three month period ended September 30, 2012 and reduced by $269,278 to $45,426 for the nine month period ended September 30, 2012 from $314,704 for the nine month period ended September 30, 2011. The decrease was primarily due to the settlement of our legal action against Mayer Brown in November 2011.  Current legal charges are for routine legal counsel services.
 
(4)           Professional fees, comprised primarily of audit and financial compliance related costs, reduced by $12,897 from $35,923 for the three month period ended September 30, 2011 to $23,026 for the three month period ended September 30, 2012 and increased by $3,669 from $114,319 for the nine month period ended September 30, 2011 to $117,988 for the nine month period ended September 30, 2012.
 
 
(5)           Rent, Office related, Telecoms and Travel expense was $44,575 for the three month period ended September 30, 2012 compared to $53,772 for the three month period ended September 30, 2011 and was $124,814 for the nine month period ended September 30, 2012 compared to $163,782 for the nine month period ended September 30, 2011. The reduction of $38,968 for the nine month period ended September 2012 can be attributed to general cost savings initiatives across all operations within the Company.
 
(6)           On October 22, 2009, the Company issued warrants to its Directors and a key consultant to the Company, comprised of both “Time” warrants which vest in equal parts over a time period, and “Price” warrants which vest only if certain stock price parameters are achieved.  The fair value of the warrants which vested in the three and nine month periods ended September 30, 2012 amounted to non-cash accounting credits of $(0) and $(221,573), as compared to the charge for the three and nine month periods ended September 30, 2011 amounting to $17,889 and $47,797 respectively. The significant reductions in the stock based compensation of $(17,889) and $(269,370) for the comparative three and nine month periods ended September 30, 2011 and 2012 and the credit amounts arising are due to the reassessment of the actual vesting of all remaining unvested Price warrants, which, after management review during the period, it was determined would not vest.  These Price warrants expired on October 21, 2012.
 
We incurred a loss from continuing operations of $8,658,514 for the period from March 10, 2006 (date of inception) through September 30, 2012.
 
Gain/Losses from Discontinued Operations
 
There were no accounting transactions within discontinued operations for the three and nine month periods ended September 30, 2012 as compared to gains of $0 and $586,518, for the three and nine month periods ended September 30, 2011 respectively.
 
There was no change in gain/loss from discontinued operations for the three and nine month periods ended September 30, 2012 primarily due to the discontinued operations having been dissolved during the year ended December 31, 2011. This will have no further impact on the financial statements of Bio-AMD, Inc.
 
We incurred a loss from discontinued operations of $30,541,871 or $0.55 per share, for the period from March 10, 2006 (date of inception) through September 30, 2012 primarily due to the loss on disposal/ abandonment of FFE Ltd., as discontinued operations, which amounted to $27,945,099 (which comprised of loss on disposal/abandonment of a) assets of $565,714, b) transaction costs incurred in connection with acquisition of FFE Ltd. of $22,897,587, c) an impairment loss on capitalized plant under construction of $458,730 and d) removal of the accumulated foreign currency translation adjustment of $4,023,068 related to FFE Ltd. as a result of the discontinuance and the final winding down or liquidation of investment in FFE Ltd.).
 
Revenues
 
We have not generated any revenues from operations for the period from March 10, 2006 (date of inception) through September 30, 2012 and anticipate that we will not generate any revenues until late 2012, although there can be no guarantee that this will occur.
 
 
Other Income
 
We recorded Other Income during the three and nine month periods ended September 30, 2012 of $2,973 and $105,356 as compared to $4,974 and $14,800 for the three and nine month periods ended September 30, 2011.  During the nine month period ended September 30, 2012, a UK tax credit rebate was granted to our subsidiary WDX amounting to £61,338 (approximately $97,000) in consideration for a retrospective application for the surrender of operating tax losses in the financial year ended December 31, 2010.
 
Net Losses
 
We incurred net losses in the amounts of $382,390 and $686,776 or $0.01 and $0.01 per share for the three and nine periods ended September 30, 2012, as compared to net losses of $458,967 and $1,014,664 or $0.01 and $0.02 per share for the three and nine months periods ended September 30, 2011 as discussed above. We incurred a net loss in the amount of $39,200,385 or $0.69 per share from March 10, 2006 (date of inception) through September 30, 2012.
 
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 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. 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 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
 

Liquidity and Capital Resources
 
We have limited cash reserves and may need substantial amounts of capital to implement our planned business strategies.  Given the currently unsettled state of the capital markets and credit markets, there is no assurance that we will be able to raise the amount of capital that we may seek for potential acquisitions, to support our working capital requirements or for further investment in current and future operations.  If we are unable to raise the necessary capital at the times we require such funding, we may have to materially change our business plan, delaying implementation of aspects of our business plan or curtailing or abandoning our business plan.  Investing in us is a speculative investment and investors may lose all of their investment.
 
Since our inception, we have been financed primarily by private placements.  We raised $10,000 for shares issued to founders in 2006, $1,635,000 on December 29, 2006 (net of legal fees of $20,000), $13,391,879 on May 29, 2007 (net of legal fees of $1,492,000), and $3,940,189 on July 29, 2007 (net of legal fees of $444,654) by way of three separate private placements of shares of common stock.  At September 30, 2012, we had cash and cash equivalents of $3,183,953; other current assets of $34,918 consisting of value added tax and other receivables and prepaid expenses, and current liabilities of $61,558, consisting of accounts payable, accrued expenses, and taxation and social security.  We attribute our net loss to having no operating revenues to sustain our operating costs as we are a development stage company.
 
 
Continuing Operations:
 
Net Cash Used in Operating Activities
 
Net cash used in operating activities of continuing operations was $847,858 for the nine months ended September 30, 2012, as compared to $1,534,952 for the nine months ended September 30, 2011. Net cash used in operating activities of continuing operations for the nine months ended September 30, 2012 is primarily attributable to our net loss from continuing operations of $686,776, a stock based compensation credit of $(221,573) due to the reassessment of the estimated vesting of all remaining unvested warrants, and the net change in the balances of operating assets and liabilities in the aggregate amount of $60,491. During the period from March 10, 2006 (date of inception) through September 30, 2012, we used net cash in operating activities of continuing operations of $7,390,271, which was primarily attributable to our net loss from continuing operations of $8,658,514, net with depreciation of $8,899, impairment loss of $52,055, common shares issued or acquired in lieu of payments for services and stock based compensation of $1,084,866, and the net change in the balances of operating assets and liabilities in the aggregate amount of $122,423.
 
Net Cash Used in Investing Activities
 
During the nine months ended September 30, 2012, we did not use net cash for investing activities. During the nine months ended September 30, 2011, we used net cash in investing activities of continuing operations of $11,851 primarily for the purchase of property and equipment. During the period from March 10, 2006 (date of inception) through September 30, 2012, we used net cash in investing activities of continuing operations of $30,672 which is comprised of the purchase of mineral claims of $10,000 and software and equipment acquired by WDX and Bio-AMD of $20,672.
 
Net Cash Provided by Financing Activities
 
We did not raise any funds through financing activities of continuing operations during the nine month periods ended September 30, 2012 and 2011.  During the period from March 10, 2006 (date of inception) through September 30, 2012, we received net cash provided by financing activities of continuing operations of $18,783,571 ($18,977,068 received from private placements and net of $131,025 and $62,923 used to repurchase our common stock from certain shareholders in September 2009 and October 2009, respectively; and $451 in proceeds from the sale of non-controlling interest during the third quarter of 2010).
 
Discontinued Operations:
 
We have reclassified FFE Ltd. as discontinued operations for all periods presented in the accompanying unaudited condensed consolidated financial statements and throughout this quarterly report to provide readers the information necessary to an understanding of our consolidated financial condition, changes in financial condition and results of operations.  Accordingly, we have reclassified the cash flows from discontinued operations for cash provided by (used in) operating, investing and financing activities of discontinued operations.  We used net cash in discontinued operations of $8,889,146 during the period from March 10, 2006 (date of inception) through September 30, 2012.
 
 
General
 
We will only commit to capital expenditures for any of our planned projects if we have adequate capital or as and when adequate capital or new lines of finance are made available to us. There is no assurance that we will be able to obtain any financing or enter into any form of credit arrangement.  Although we may be offered such financing, the terms may not be acceptable to us.  If we are not able to secure financing or it is offered on unacceptable terms, then our business plan may have to be modified or curtailed or certain aspects terminated.  There is no assurance that even with financing, we will be able to achieve our goals.
 
The accompanying unaudited condensed consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  However, our ability to continue as a going concern will be dependent upon our ability to generate sufficient cash flow from our planned operations to meet our obligations on a timely basis, to obtain additional financing, and ultimately attain profitability. Also our ability to continue as a going concern will be determined by our ability to obtain additional funding or commence our planned business to generate sufficient revenue to cover our operating expenses. We currently have no sources of financing available and we do not expect to earn any revenues in the near term. Our unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
 
Critical Accounting Policies and Estimates
 
Significant Accounting Policies
 
Financial Reporting Release No. 60, published by the SEC, recommends that all companies include a discussion of critical accounting policies used in the preparation of their financial statements. While all these significant accounting policies impact our consolidated financial condition and results of operations, we view certain of these policies as critical.  Policies determined to be critical are those policies that have the most significant impact on our consolidated financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates.
 
We believe that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause a material effect on our consolidated results of operations, financial position or liquidity for the periods presented in this report.
 
General
 
The Company’s Consolidated Financial Statements are prepared in accordance with U.S. generally accepted accounting principles, which require management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, net revenue, if any, and expenses, and the disclosure of contingent assets and liabilities.  Management bases its estimates on historical experience and on various other assumptions 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 that are not readily apparent from other sources.  Senior management has discussed the development, selection and disclosure of these estimates with the Board of Directors.  Management believes that the accounting estimates employed and the resulting balances are reasonable; however, actual results may differ from these estimates under different assumptions or conditions.
 
 
An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, if different estimates reasonably could have been used, or if changes in the estimate that are reasonably possible could materially impact the consolidated financial statements. Management believes the following critical accounting policies reflect the significant estimates and assumptions used in the preparation of the Consolidated Financial Statements.
 
Development Stage Company
 
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.
 
Going Concern
 
The consolidated financial statements have been prepared on the going concern basis, which assumes the realization of assets and liquidation of liabilities in the normal course of operations. If we were not to continue as a going concern, we would likely not be able to realize on our assets at values comparable to the carrying value or the fair value estimates reflected in the balances set out in the preparation of the consolidated financial statements. There can be no assurances that we will be successful in generating additional cash from equity or other sources to be used for operations. The consolidated financial statements do not include any adjustments relating to the recoverability of assets and classification of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.
 
Principles of Consolidation
 
The consolidated financial statements include the accounts of Bio-AMD, Inc. and 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 Ltd. (a 63% owned subsidiary as of September 30, 2012). All significant intercompany transactions and balances have been eliminated in consolidation. The 0.19% third party ownership of WDX Organisation Ltd., and the 37% third party ownership of Bio-AMD Holdings Ltd (both as at September 30, 2012) are recorded as non-controlling interests in the consolidated financial statements.
 
Revenue Recognition
 
The Company has generated no revenues to date. It is the Company’s policy that revenue from product sales or services will be recognized in accordance with ASC 605 “Revenue Recognition”. Four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management's judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company will defer any revenue for which the product was not delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required.
 
 
Stock-Based Compensation
 
The Company accounts for its stock based compensation under ASC 718 “Compensation – Stock Compensation” which was adopted in 2006, 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 it 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.
 
Impairment of Long-Lived Assets
 
The Company follows ASC 360, "Property, Plant and Equipment" which requires that long-lived assets and certain identifiable intangibles held and used by the Company be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses, or a forecasted inability to achieve break-even operating results over an extended period. The Company evaluates the recoverability of long-lived assets based upon forecasted undiscounted cash flows. Should impairment in value be indicated, the carrying value of the long-lived assets and certain identifiable intangibles will be adjusted, based on estimates of future discounted cash flows resulting from the use and ultimate disposition of the asset.  ASC 360 also requires assets to be disposed of be reported at the lower of the carrying amount or the fair value less disposal costs.
 
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.
 
Foreign Currency Translation
 
The Company’s reporting and functional currency is US Dollars. The accounts of the Company’s wholly-owned subsidiary, FFE Ltd, of its 99.81% owned subsidiary, WDX and of its 63% owned subsidiary, Bio AMD Holdings Ltd., 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.
 
Recent accounting pronouncements
 
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.
 
 
Off-Balance Sheet Arrangements
 
We have no off-balance sheet arrangements.
 
ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
Not applicable.
 
ITEM 4.  CONTROLS AND PROCEDURES
 
Evaluation of Disclosure Controls and Procedures
 
We maintain disclosure controls and procedures that are designed to ensure that material information required to be disclosed in our periodic reports filed under the Securities Exchange Act of 1934, as amended, or 1934 Act, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and to ensure that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer as appropriate, to allow timely decisions regarding required disclosure. During the quarter ended September 30, 2012 we carried out an evaluation, under the supervision and with the participation of our management, including the principal executive officer and the principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13(a)-15(e) under the 1934 Act. Based on this evaluation, management concluded that as of September 30, 2012 our disclosure controls and procedures were effective.
 
Limitations on Effectiveness of Controls and Procedures
 
Our management, including our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), does not expect that our disclosure controls and procedures will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include, but are not limited to, the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
 
Changes in Internal Controls
 
During the fiscal quarter ended September 30, 2012, there have been no changes in our internal control over financial reporting that have materially affected or are reasonably likely to materially affect our internal controls over financial reporting.
 
 
PART II – OTHER INFORMATION
 
ITEM 1.  LEGAL PROCEEDINGS
 
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 Quarterly 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.
 
ITEM 1A.  RISK FACTORS
 
Not applicable.
 
ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 
We issued no equity securities during the quarter ended September 30, 2012.
 
ITEM 3.  DEFAULTS UPON SENIOR SECURITIES
 
None.
 
ITEM 4.  MINE SAFETY DISCLOSURES
 
Not applicable.
 
ITEM 5.  OTHER INFORMATION
 
Operations - Bio-Alternative Medical Devices
 
Our 63% owned subsidiary, Bio-AMD Holdings Limited (“Bio-AMD”) is a technology company focused in the rapidly expanding POC medical diagnostic reader market. Bio-AMD owns three patents which have been filed and subsequently granted in varying territories including UK, Europe, Japan, US and China and a further three pending patent applications which have been filed initially in the UK (the “Patents”).  The Patents involve adaptable technology platforms that are being or are expected to be applied into a variety of low cost, hand-held, digital diagnostic reader devices for a range of semi-quantitative and quantitative tests, working with bio-chemistry and manufacturing companies.
 
 
Currently, Bio-AMD is developing three primary technologies:
 
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A Digital Strip Reader (“DSR”) able to perform a wide variety of POC, low cost, rapid assay tests for example infectious diseases, drugs of abuse, cardiology, oncology, cholesterol and the female well-being market (pregnancy, fertility and menopause);
 
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A digital, handheld, POC prothrombin time monitor/blood coagulation device incorporating a Bio-AMD designed micro-fluidic test strip (“COAG”) to enable patient based, anticoagulant drug therapy monitoring; and
 
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A highly accurate Magnetic Particle Reader (“MPR”), providing fully quantitative measurement through the novel application of micro-fluidics and ‘lab-on-chip’ technology. The MPR, when fully developed, is believed to be capable of quantifying the intensity and behavior of magnetic markers on the diagnostic strip.
 
Each of these technology areas are at varying stages in their development.
 
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The DSR device has been tested and redesigned extensively since development work commenced based on market feedback obtained.  Currently, we have focused the first application of the technology into the well-established, over the counter (“OTC”), digital pregnancy testing market and are in discussions with a number of potential distributors to either supply the product under a “white label” arrangement to sell under their own brand, or license the technology directly to them.  At this point, no formal agreement has been entered into and no detailed commercial terms have been discussed.  The opportunity to manufacture the product under a white label arrangement will require significant additional development work which we will only consider undertaking on the strength of a firm order for the device in sufficient volumes that make it economically viable.    There can be no guarantee that we will enter into a commercial agreement with any third party with whom we discuss the DSR for pregnancy testing.
 
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We have continued to develop our COAG micro-fluidic strip technology, to further improve on quality, having already established a design that allows low cost manufacture of the strip whilst ensuring scalability and repeatability.    We are in continuing third party discussions with a view to establishing a development agreement for the COAG technology, whereby they would provide more detailed input and support to ensure the technology is market ready which can then be sold through their extensive market and distribution channels.
 
Our key objective has been to ensure that our more advanced technology platforms i.e. DSR and COAG are at a stage where a commercial agreement(s) has been secured enabling us to launch our technology into the market which will both significantly enhance our public exposure and generate revenues from the sale of products or licensing of the technology.
 
Given the more advanced status of DSR and COAG as outlined above, and to provide a platform from which the Bio-AMD platform can grow, development of our MPR technology has been temporarily put on hold. Some very early stage work has been completed in conjunction with the Science, Technology and Facilities Council, one of Europe’s largest independent scientific research public body organizations part funded by the UK Government.  We originally anticipated recommencing work on the MPR technology in the latter part of 2012, although on further review it would be more realistic to assume resumption of this project dependent on the progress of both DSR and COAG.
 
 
Our aim for fiscal year ending 2012 is to secure commercial agreements for the DSR and COAG technologies.  As at September 30, 2012 there were no commercial agreements in place, and no revenues had been generated by Bio AMD Holdings Limited and there can be no guarantee that we will be able to secure commercial agreements being pursued
 
The POC Market
 
POC diagnostics generally include diagnostic testing that is not performed in a central laboratory (often also referred to as ‘decentralized’ or ‘near patient’ testing and, if conducted by the patient, Patient Self-Testing). This includes tests at a doctor’s office, out-patient setting, emergency room, intensive or critical care unit, operating room or maternity unit or at home.  It encompasses tests performed using bodily fluids such as blood, urine or saliva samples.  A unique feature of POC technology is that it does not require interpretation by a trained laboratory professional, but is simple enough to be used by medical professionals or sometimes patients themselves.
 
In 2010, the POC market was estimated to be worth $13.7 billion worldwide, of which approximately 40% or $5.5 billion represented sales into women’s health and other products including cardiology, oncology, infectious disease, coagulation and clinical chemistry.  Annual market growth of 8% to 9% is predicted to 2016 due to growing adoption of POC technologies by both healthcare providers and consumers, and the introduction of new products that enable POC testing for more applications, enhanced ease-of-use and improvements on the accuracy of current products.
 
The main trends in the POC market are:
 
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Development of increasingly wide ranges of complex bio-chemical detectors and markers;
 
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Increasing sophistication of smart strips to accommodate innovations in bio-chemistry; and
 
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Increasing sophistication of readers, now regarded as both alternatives and complements to complex laboratory equipment.
 
POC diagnosis requires the combination of two main fields of science:
 
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Bio-chemistry designed to detect changes in body fluid chemistry and signal a medical condition; and
 
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Electro-mechanical engineering required to create apparatus to measure those chemical changes.
 
Successful delivery of POC diagnosis combines the following elements:
 
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The biochemistry itself;
 
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The medium that holds and combines the bio-chemistry with a body fluid sample; and
 
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The device/reader that detects the changes in the biochemistry and communicates the result to the user/patient.
 
 
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Reader technology development is focused on several key trends:
 
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The miniaturization of the reader using low tolerance electronic and mechanical components;
 
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Ease of use;
 
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Reliability/accuracy/sensitivity;
 
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Low manufacturing and end user cost; and
 
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Self–powered operation with preferable use of ‘green’ technology such as solar powering of the device.
 
We believe that Bio-AMD is an innovator in the field of reader technology development, given that its technology attributes fit well with these key trends.
 
Bio-AMD Business Model, Strategy and Technology
 
Bio-AMD’s current business model aims to license its pipeline of technologies into diagnostic testing devices with preferred partners, comprised primarily of bio-chemistry companies, manufacturers and sales/distribution channels, with a view to entering into distribution and/or licensing agreements on a geographic basis and/or for specific tests.  In many cases a preferred partner may have all three attributes vertically integrated into their business.
 
Bio-AMD expects to benefit from participation in revenue sharing or royalty payments, licensing sales, milestone awards from development partners (depending on the commercial agreement entered into).  Where the opportunity exists, and where it makes economic sense to do so, we may enter into manufacturing arrangements.  However, we will be very focused in deciding those products in which we undertake to manufacture as we are currently limited by funds, expertise and resources.
 
Bio-AMD continues to be alert to grant funding opportunities primarily from the UK Government based initiatives and schemes, as and when they arise.  However, in the UK generally, since 2009, grant funding pools have diminished due to wider macro factors and applications for development grants that have been made available have become increasingly competitive and difficult to secure.
 
The first stage of Bio-AMD’s corporate strategy has been to develop its DSR technology platform utilizing a patented proprietary method for reading and quantifying traditional chromatography based, nitro-cellulose, lateral-flow immunoassay tests, centered on a unique optical sensor arrangement.  The DSR comprises a proprietary generic design incorporating sensors, diagnostics, display and power management capabilities.  The unique feature of the DSR technology is that its platform can be adapted and applied to numerous and disparate lateral flow diagnostic tests.
 
Bio-AMD has created both single and multi-test versions of the DSR device, all of which are fully disposable and operated by solar power cells.  Our multi-test device is sufficiently robust enough to be used numerous times in professional settings such as clinician offices and laboratories.  In April 2012 we submitted two additional patent applications to the UK Intellectual Property Office for a Photovoltaic Sensor Array and a Cartridge Cap, comprising proprietary features independent of the underlying technology within the reader, which is also patented.  We will continue to review our patent portfolio to ensure that all applicable technologies in development are fully protected.  In addition we will discard any patents considered irrelevant or out of date so as not to incur unnecessary patent maintenance costs.
 
 
The first planned product utilizing the DSR technology platform is a next generation, digital pregnancy test aimed at the established OTC market. Bio-AMD is in active discussions regarding the potential commercialization of DSR as applied to digital pregnancy testing and also to other areas of the wider female well-being health market such as ovulation, fertility and menopause testing.
 
In parallel to the development of the DSR, Bio-AMD has continued the development of its COAG technology into a blood coagulation monitor.  Bio-AMD has performed initial tests of its patent applied-for application technology involving the creation of a unique strip design and method for prothrombin time measurement, which have been successful.  We continue to progress with the product development and anticipate completion of a strip mould that will allow mass production of strips at low cost.  However, the COAG technology will require a development partner (to whom we would license the technology) with the requisite resources to ensure that a final product will be launched into the market. We continue to be in active discussions with such a development partner that fits well with our required profile, although no formal agreement has yet been entered into.
 
In many medical conditions early and accurate diagnosis is critical and sometimes makes the difference between full, partial or no recovery.  However, most quantitative measuring systems remain lab based and current medical practices based on late-stage, hospital based interventions constitute one of the most cost intensive solutions for healthcare providers.  Our proposed MPR technology aims to create a flexible, high speed, robust and highly sensitive diagnostic testing method which is small enough to be used 'near-patient' whether that be in an ambulance, a health clinic, a doctor’s office or at home. The MPR technology centers on a novel, highly sensitive and accurate method of determining with a much greater degree of accuracy and at very low levels of sample size (typically less than 5 micro liters) the presence and/or concentration of substances of interest in body fluids.  Immunoassays for these types of tests rely on the detection of magnetic nano-particles tagged with antibodies which adheres or binds to a molecule of interest.
 
Bio-AMD’s proposed technology around the MPR can potentially be used as an aid to diagnosis of any medical condition where rapid and quantitative measurement of variation in concentration of analyte or antibody is medically vital.  For example, cardiac troponin I, the key marker for myocardial infarction, is one of the most difficult analytes to measure reproducibly.  A rapid quantitative diagnostic test can significantly improve the chances of recovery, through quick identification and administering of the appropriate treatment required.    MPR offers significantly enhanced sensitivity compared to purely optical methods, capable of interpreting results on a fully quantitative basis. We believe that the Bio-AMD MPR technology has considerable potential; the ability to perform quantitative measurement in a PoC device represents a critical milestone and opens up to new markets of diagnosing and treating a wide range of conditions in a rapid and efficient way.  For example, cardiac markers (for emergency wards and paramedics), oncology, infectious diseases, drugs of abuse, cholesterol, cortisol and vitamin deficiency.
 
Our proposed method aims to bring together biology, chemistry, nano-fluidics, electronics and, 'lab-on-chip' technology together into unique, economically viable products.
 
Bio-AMD Management
 
Bio-AMD is based at the Sci-Tech Daresbury (formerly the Daresbury Science and Innovation Campus) in Cheshire, UK, which is now a government designated Enterprise Zone.  Sci-Tech Daresbury was formed as part of a UK government initiative to maximize the effects of public investment on business-science collaborations.  Being based at Sci-Tech Daresbury means that Bio-AMD is able to access a network of government supported research facilities including expertise and resources which are based on site and collaborate with high profile government backed scientific bodies. To date, Bio-AMD has benefited from some small grant aid made available to it through various schemes offered throughout the campus network, and it continues to take advantage of the access afforded to it by the Science and Technologies Facilities Council, one of seven national research councils in the UK funded by the UK Government, which is located on the campus site.
 
 
Bio-AMD is managed by experienced personnel, expert in the development of technically advanced, low cost POC devices. Our Chief Financial Officer, Robert Galvin, is actively involved in the financial and commercial management of Bio-AMD and the execution of the Bio-AMD business plan. Mr. Galvin owns 12.33% of Bio-AMD directly.
 
Operations - WDX Currency Risk Mitigating Business
 
WDX’s product – the WOCU
 
The WOCU is WDX’s proprietary “currency stabilizing” financial product. It is a foreign exchange derivative quotation; a weighted currency basket encompassing the exchange rates of the fiat (national) currencies of the world’s twenty largest economies (currently accounting for around 81% of global production), weighted by the International Monetary Fund (“IMF”) Gross Domestic Product figures of those individual countries and outputted in real time.
 
The WOCU’s generally low volatility (compared to the world’s traditional reserve currency, the US Dollar, “USD”) against fiat currencies offers huge commercial advantages as a unit of account for the denomination of world trade, compared to the status quo of cross border trade denominated in fiat currency pairs, or in USD.  Transactions across currencies (except in isolated cases where one exchange rate is “pegged” to the other) inevitably involve a potential “casino effect”, where the profitability of a commercial trade is affected by movements in exchange rates. The WOCU’s advantage is its lowered volatility compared to traditional exchange rate pairs, coupled with its transparent and readily exchangeable nature. Multinationals or international trading partners can choose to transact across borders and denominate the value of those transactions in WOCU, reducing the risk of unfavorable exchange rate movement. This is especially true of longer term contracts, such as protracted construction projects, or forward buying.
 
The WOCU’s apolitical, bank-independent, transparent, instantly available and universal nature is seen as a key differentiator between it and bespoke currency baskets sometimes used to manage currency risk, which are currently the preserve of larger institutions and corporations.
 
The WOCU quotation is available as daily and hourly fixed reference prices, as real time, millisecond updated prices and as 15 minute delayed prices. In addition WOCU Foreign Exchange (“FX”) 1, 2, 3, 6, 9 and 12 month Forward quotations are produced by WDX against the USD, from which a Forward WOCU rate can be calculated for any currency for which Forward rates are currently quoted, plus WOCU Interest Rate forward quotations covering the Overnight 1, 2, 3, 6, 9 and 12 month money market periods. The WOCU reference price is fixed daily at 16:00 UTC against all major currencies and is also available as an hourly reference price, from 00:00 Monday to 23:00 Friday, and as hourly price captures for Gold, Silver and Oil.
 
The WOCU real-time price is produced by WDX in a multiple redundancy environment to support 24 x 7 availability of the quotation with monitoring and failover functionality. The WOCU real-time quotation is available (non-exclusively) from WDX’s re-seller Interactive Data Corporation (“IDC”) via its data terminals and data feeds under the ticker symbol XCU. IDC currently calculate and offer 47 WOCU based currency pairs, and 6 commodities, as cross rates and supply a stand-alone WOCU real-time charting package application via IDC’s PrimePortal™ application.
 
 
The WOCU quotation is also available via a mobile application for Apple mobile devices known as “WOCU”. This application supports five languages; English, simplified Chinese, traditional Chinese, Japanese and Korean.  The WOCU quotation is also available as an hourly reference price available directly from WDX by RSS feed, e-mail and via WDX’s FTP server. The WOCU quotation as a 15 minute delayed, 5 second update price is also available from the Company’s corporate website www.wocu.com.
 
The WOCU, if successfully established, may be incorporated into the following areas:
 
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Multinational corporate treasury operations;
 
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Reference pricing for general global trade;
 
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Commodity pricing and trade;
 
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Currency balanced savings accounts;
 
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Fund management, including Exchange Traded Funds;
 
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FX and derivative trading and speculation;
 
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Global index calculations; and
 
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Reserve ratio applications (similar to the IMF’s Special Drawing Right or SDR).
 
WDX corporate strategy and Business model
 
The core strategy of WDX has been to market the WOCU across an inter-connected triumvirate group of 1) corporates (who will trade and transact in the WOCU), 2) commercial banks (who would provide pricing and settlement of WOCU transactions into local currency), and 3) exchanges (who would provide products and instruments suitable for trading).
 
WDX plans to monetize its products with a combined license fee and commission based transaction fee linked to volume trades made in WOCU.  Specifically, WDX plans to generate multiple revenue streams:
 
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From / via users: reference, real time and historical data sales, to be distributed via global third party data distributors;
 
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From banks: transaction fees and / or algorithm licensing fees; and
 
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From derivatives exchanges: transaction fees and / or WOCU licensing fees.
 
 
Key partnerships and relationships in this regard fall broadly into these categories;
 
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Data distribution;
 
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Bank and FX Electronic Communication Networks (“ECN”) liquidity;
 
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Derivative liquidity;
 
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Commercial customers; and
 
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Other platforms and opportunities.
 
Since the initial investment, WDX has had numerous discussions with members from all three target groups, with strong interest shown by the majority of parties.  However, securing sufficient licensing contracts has fallen far short of initial expectations despite the injection of additional working capital funding.  In September 2011, WDX determined that all employee contracts should be terminated, with a view to reducing the fixed monthly expenditure.
 
WDX has established a network of individuals and organizations who it expects will serve as introducing agents to the business, charged with identifying suitable prospects which fit our target profile.  WDX immediate objective is to pursue a focused strategy to execute those targets in the near-term pipeline, coupled with limited yet targeted marketing and business development activity to secure new contract opportunities, working with this sophisticated network of introducing agents.  These agents will be remunerated purely on successful results, and the exact terms of any such arrangement is agreed between WDX and the individual on a case by case basis.  Agents are chosen based on their potential, and are likely to have extensive knowledge of the financial markets, and a very deep client network. To date, five such agents have been appointed.
 
During the three month period ended September 2012, we have made positive progress with several high profile leads introduced to us via our agents. WDX’s initial intention is to simultaneously engage with a bank, a derivatives exchange and a large retail focused user in order to launch the tradable WOCU and associated products. Discussions continue with such parties.
 
Since January 1, 2012, Mr. Michael Blakey, IT and Operations Director, has assumed leadership responsibility for WDX, and on April 20, 2012, Mr. Michael King resigned as non-executive Director. The Board of WDX, which also serves as the operational management team, comprises Mr. Michael Blakey, Mr. Thomas Barr and Mr. Robert Galvin. Messrs. Barr and Galvin also serve as directors of Bio-AMD, Inc. Our CFO Robert Galvin is actively involved in the financial management and corporate development of WDX and the implementation of the WDX business plan
 
All direct monthly costs have been reduced to a minimum to maximize use of cash balances and currently run at an average of less than $20,000 per month.  WDX continues to benefit from cash received from local tax credit rebates for prior year losses surrendered in exchange, and will submit further applications as appropriate.  The Company has resolved to provide limited finance to WDX by way of intercompany loan as and when required, although it is not anticipated that a cash funding request will be forthcoming until toward the end of 2012, given the available cash balances already held within WDX and income expected to be received from further tax credit applications currently being made.
 
 
ITEM 6.  EXHIBITS
 
In reviewing the agreements included as exhibits to this Form 10-Q, please remember that they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about the Company or the other parties to the agreements. The agreements may contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the parties to the applicable agreement and:
 
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should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;
 
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have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;
 
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may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and
 
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were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.
 
Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. Additional information about the Company may be found elsewhere in this Form 10-Q and the Company’s other public filings, which are available without charge through the SEC’s website at http://www.sec.gov.
 
The following exhibits are included as part of this report:
 
Exhibit No.
 
Description
     
31.1
 
31.2
 
32.1
 
32.2
 
101.INS**
 
XBRL Instance Document
101.SCH**
 
XBRL Taxonomy Extension Schema Document
101.CAL**
 
XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF**
 
XBRL Taxonomy Extension Definition Linkbase Document
101.LAB**
 
XBRL Taxonomy Extension Label Linkbase Document
101.PRE**
 
XBRL Taxonomy Extension Presentation Linkbase Document

 
 
In accordance with the requirements of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
BIO-AMD, INC.
 
November 8, 2012                                                                      By: /s/ Thomas Barr                                   
Thomas Barr, Chief Executive Officer
 
BIO-AMD, INC.
 
November 8, 2012                                                                      By: /s/ Robert Galvin                                 
Robert Galvin, Chief Financial Officer