Revolutions Medical CORP - FORM 10-Q

Attached files

file	filename
EX-31.1 - Revolutions Medical CORP	v223010_ex31-1.htm
EX-32.2 - Revolutions Medical CORP	v223010_ex32-2.htm
EX-31.2 - Revolutions Medical CORP	v223010_ex31-2.htm
EX-32.1 - Revolutions Medical CORP	v223010_ex32-1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended: March 31, 2011

o 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: 000-28629

REVOLUTIONS MEDICAL CORPORATION

(Exact Name of Registrant in its Charter)

NEVADA		73-1526138
(State or other jurisdiction of		(IRS Employer I.D. No.)
incorporation)

670 MARINA DRIVE, 3RD FLOOR

CHARLESTON, SC 29492

(Address of principal executive offices and Zip Code)

(843) 971-4848

(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 past 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or 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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

As of May 16, 2011, there were 48,728,590 shares outstanding of the registrant’s common stock.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION		3

ITEM 1.	FINANCIAL STATEMENTS.	3

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.	16

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.	20

ITEM 4.	CONTROLS AND PROCEDURES.	20

PART II - OTHER INFORMATION		22

ITEM 1.	LEGAL PROCEEDINGS.	22

ITEM 1A.	RISK FACTORS.	22

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.	22

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES.	22

ITEM 4.	(REMOVED AND RESERVED).	22

ITEM 5.	OTHER INFORMATION.	22

ITEM 6.	EXHIBITS.	22

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

REVOLUTIONS MEDICAL CORPORATION

(A Development Stage Company)

BALANCE SHEET

(Unaudited)

	March 31, 2011			December 31, 2010

ASSETS

CURRENT ASSETS
Cash	$	102,024		$	69,517
Other Current Assets		226,556			303,756
NON-CURRENT ASSETS
Fixed Assets		1,172,945			812,478
Goodwill		23,276			23,275
Intangible Assets, Net		40,000			25,000

TOTAL ASSETS	$	1,564,801		$	1,234,028

LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES
Accounts payable and accrued liabilities	$	403,811		$	399,151
Accrued Salaries		246,225			246,225
Notes Payable and Accrued Interest		845,265			450,891

Total current liabilities		1,495,301			1,096,267


Total liabilities		1,495,301			1,096,267

SHAREHOLDERS’ DEFICIENCY
Preferred stock, $0.001 par value, 5,000,000 shares authorized; 1,500,000 shares issued and outstanding		1,500			1,500
Common stock, $0.001 par value, 250,000,000 shares authorized; 44,190,634 and 42,869,909 shares issued and outstanding at 3/31/11 and 12/31/10, respectively		44,191			42,869
Common Stock Subscribed		339,750
Treasury Stock		(969	)		969
Paid in capital		25,849,137			25,476,302
Deficit accumulated during the development stage		(26,164,109	)		(25,382,910	)

Total shareholders’ equity		69,500			137,761

TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIENCY	$	1,564,801		$	1,234,028

The accompanying notes are an integral part of the interim financial statements

REVOLUTIONS MEDICAL CORPORATION

(A Development Stage Company)

STATEMENTS OF OPERATIONS

(Unaudited)

	From Inception (August 16, 1996) Through March 31,			Three Months Ended March 31,
	2011			2011			2010
Investment Income	$	170,753		$	—		$	—
Other Income		3,857			—			—
		174,610			—			—
EXPENSES
Research and development		2,843,406			—			—
Purchased R&D		3,309,515			—			—
General and administrative		20,000,014			762,740			227,813
Depreciation and amortization		86,651			1,534			1,490
Total operating expenses		26,239,586			764,274			229,303

Operating income (loss)		(26,064,976	)		(764,274	)		(229,303	)

Interest income		17,277			1			—

Interest expense		147,710			16,924			—

Gain on disposal of assets		794			—			—

Gain on extinguishment of debt		(152,914	)		—			—

Net loss before minority interest		(26,347,529	)		(781,198	)		(229,303	)

Minority Interest in Subsidiary Loss		(183,422	)		—			—

Net loss from operations	$	(26,164,109	)	$	(781,198	)	$	(229,303	)

Weighted average shares outstanding		37,364,330			44,070,634			35,247,557

Net loss per share (Note 1)	$	(0.70	)	$	(.02	)	$	(0.01	)

The accompanying notes are an integral part of the interim financial statements

REVOLUTIONS MEDICAL CORPORATION

(A Development Stage Company)

STATEMENTS OF CASH FLOWS

(Unaudited)

	From Inception (August 16, 1996) Through March 31,			Three Months Ended March 31,
	2011			2011			2010
OPERATING ACTIVITIES
Loss from operations before minority interest	$	(26,164,110	)	$	(781,199	)	$	(229,303	)
Plus non-cash charges to earnings
Stock compensation expense		2,018,280			—			—
Depreciation and amortization		86,641			1534			1,490
Purchase R&D - Clear Image		3,309,514			—			—
Common stock issued for services		5,115,142			301,000			—
Preferred stock issued for services		270,000			—			—
Expenses paid by third parties		57,134			—			—
Contribution of services by officer and employees		799,154			—			—
Services by officer and employees paid for
with non-cash consideration		167,500			—			—
Compensation cost for option price reduction		50,000			—			—
Amortization of compensation cost for options granted to non-employees and common stock issued for services		1,775,577			—			—
Allowance for doubtful accounts		50,900			—			—
Gain on extinguishment of debt		(10,398	)		—			—
Write-off of Notes Receivable		14,636			—			—
Write-off of Notes Payable		(8,239	)		—			—
Write-off of organizational costs		3,196			—			—
Write-off of zero value investments		785,418			—			—
Write-off of leasehold improvements and computer equipment		2,006			—			—
Compensation costs for stock options and warrants granted to non-employees		1,205,015			—			—
Change in working capital accounts:
(Increase) decrease in receivables from related parties		(94,105	)		—			—
Increase in other assets		—			4,395			—
(Increase) decrease in goodwill		(23,276	)		—			—
(Increase) decrease in other receivables		(452,538	)		(1,600	)		—
Increase (decrease) in accrued salaries and consulting		93,977			72,805			15,000
Increase (decrease) in accrued interest		107,774			15,274			—
Increase (decrease) in accounts payable and accrued liabilities		1,909,932			6,259			—
Total operating activities		(8,930,870	)		(381,530	)		(212,813	)
INVESTING ACTIVITIES
Purchase of equipment		(1,211,255	)		(362,000	)		—
Purchase of furniture		(39,847	)		—			(1,509	)
Investment in patent development		(40,000	)		(15,000	)		—
Investment in syringe patent development		(10,000	)		—			—
Investment in Ives Health Company		(251,997	)		—			—
Investment in The Health Club		(10,000	)		—			—
Total investing activities		(1,563,099	)		(377,000	)		(1,509	)
FINANCING ACTIVITIES
Loans from shareholders		15,707			—			—
Repayment of loans from shareholders		(8,005	)		—			—
Repayments of Promissory Notes		57,325			—			—
Common stock subscribed		886,250			339,750			—
Sale of preferred stock for cash:		(1,000	)		—			—
Sale of common stock for cash:
To third-party investors (prior to merger)		574,477			—
To third-party investors		6,556,655			176,287			89,000
From exercise of stock options		2,259,468			—			—
Less: Issue Costs		(102,318	)		—			—
Convertible debentures issued for cash		655,000			275,000			75,000
Payment of exclusive license note payable		(100,000	)		—			—
Total financing activities		10,793,559			791,037			164,000
Minority interest		(197,567	)		—
Change in cash		102,024			32,507			(50,323	)
Cash at beginning of period		—			69,517			67,228
Cash at end of period	$	102,024		$	102,024		$	16,905

(Continued)

REVOLUTIONS MEDICAL CORPORATION

(A Development Stage Company)

STATEMENTS OF CASH FLOWS, Continued

(Unaudited)

	From Inception (August 16, 1996) Through March 31,			Three Months Ended March 31,
	2011			2011		2010
Supplemental disclosure of cash flow information:
Cash paid for interest and taxes during the period	$	57,571		$	—	$	—

Non-cash financing and investing activities:
Investment in Globe Joint Venture		(637,566	)		—		—
Common stock issued to founders		7,000			—		—
Common stock issued in connection with merger with Cerro Mining Corporation		300			—		—
20 to 1 reverse stock split		138,188			—		—
Common stock issued in Ives merger		346,262			—		—
Common stock subscriptions		409,550			339,750		—
Common stock issued to extinguish debt		—			—
Capitalized compensation cost for options granted		1,487,700			—		—
Common stock issued in exchange for promissory note		676,500			—		—
Common stock issued for payment of debt		152,553			—		—
Common stock issued for convertible debentures		569,760			379,100		—
Common stock issued for services		1,007,663			301,000		—
Common stock issued to pay Ives debt		27,000			—		—
Common stock issued to Clear Image shareholders under short form merger		12,208			—		—

The accompanying notes are an integral part of the interim financial statements

REVOLUTIONS MEDICAL CORPORATION

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

March 31, 2011

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Nature of Operations

Revolutions Medical Corporation, a Nevada corporation (“the Company” or “RevMed”), has been endeavoring to design, develop and commercialize auto retractable vacuum safety syringes. Our present product development effort is focused on the RevVac Auto Retractable Vacuum Safety Syringe, which is designed specifically to reduce accidental needle stick injuries and lower the spread of blood borne diseases. The Company also has developed a suite of proprietary MRI software tools; RevColor, Rev3D, RevDisplay, and RevScan. These tools are designed to enhance general diagnostic confidence through education and research use and in the future we believe will have specific commercial applications.

On March 26, 2007, RevMed completed the acquisition of Clear Image Acquisition Corporation (“Acquisition Corp.”) in exchange for 8,273,788 shares of RevMed common stock. Acquisition Corp is a company that was formed by certain shareholders of Clear Image, Inc. (“Clear Image”) in order to assemble a control block of the shares of Clear Image for the purposes of such a transaction. The sole asset of Acquisition Corp was a block of 8,260,139 shares of the Common Stock of Clear Image, a development stage company which is developing certain proprietary and patent pending technology related to color MRI scans. The block of Clear Image shares owned by Acquisition Corp represented 62.2% of Clear Image’s outstanding common stock.

During the fourth quarter of 2008, the Company commenced a short form merger to acquire the remaining minority interest in Clear Image. This short form merger was completed by December 2, 2008. The Company now owns 100% of the former Clear Image. Clear Images assets have been consolidated on our books and all inter-company transactions have been eliminated.

Development Stage Company

Since its inception in 1996, the Company has been considered a development stage enterprise for financial reporting purposes as significant efforts have been devoted to raising capital and to research and development of various safety syringes and its proprietary MRI software tools.

Cash and Cash Equivalents

The Company considers highly liquid investments (those readily convertible to cash) purchased with original maturity dates of three months or less to be cash equivalents.

Generally Accepted Accounting Principles

On July 1, 2009 the Financial Accounting Standards Board (“FASB”) released its Accounting Standards Codification (“ASC”). The ASC became effective for interim or annual financial statements issued after September 15, 2009. The ASC is the single source of generally accepted accounting principles.

Stock-based Compensation

The Company follows the guidance in ASC 718 “Compensation – Stock Compensation” which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors based on estimated fair values

Income Taxes

The Company uses the liability method of accounting for income taxes as set forth in ASC 740, “Income Taxes.” Under the liability method, deferred taxes are determined based on the differences between the financial statement and tax basis of assets and liabilities at enacted tax rates in effect in the years in which the differences are expected to reverse.

Segment Information

The Company follows the guidance in ASC 280, “Segment Reporting” The Company identifies its operating segments based on business activities, management responsibility and geographical location. During the period covered by these financial statements, the Company operated in a single business segment engaged in developing selected healthcare products.

Earnings (Loss) per Share

The Company computes net income per share in accordance with ASC 260, “Earnings per Share”. Under these provision basic net income (loss) per share is calculated by dividing net income (loss) available to common stockholders for the period by the weighted average shares of common stock of the Company outstanding during the period. Diluted net income per share is computed by dividing the net income for the period by the weighted average number of common and common equivalent shares outstanding during the period. The calculation of diluted income (loss) per share of common stock assumes the dilutive effect of stock options and warrants outstanding. During a loss period, the assumed exercise of outstanding stock options and warrants has an anti-dilutive effect. Therefore, the outstanding stock options were not included in the March 31, 2011 and December 31, 2010 calculations of loss per share.

Use of Estimates

The preparation of financial statements in conformity with generally accepted principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported revenues and expenses during the reporting period. Actual results could differ significantly from those estimates.

Reclassifications

Certain reclassifications may have been made to the prior year financial statements to conform to the current period presentation.

Stock Compensation

The fair value of all stock compensation issued is determined by calculating the difference between the option exercise price and the closing price at the day of the grant. Because all of the options issued for consulting services were issued under a very limited window for exercise (10 days), with very little expected volatility, no dividend yield and a negligible effect from interest rates in such a short time period, the value of the option based compensation is recorded according to the guidance of SFAS 123 as the difference between option exercise price and the closing share price upon the date of the grant.

Convertible Debentures

The company has entered into several convertible debt agreements over the past year. Concerning the issuance of common stock for repayment of debt, the equity conversion feature of each of these debt instruments is not detachable, the conversion premium or option cannot be settled in cash, the conversion feature is indexed to the Company’s stock and the conversion option features a beneficial conversion feature. The accounting for these debt instruments and the beneficial conversion feature have been treated in accordance with ASC 470-20-25-5 and allocated to paid-in capital for the intrinsic value of the beneficial conversion feature.

Long-Lived Assets

Property, plant and equipment, including significant improvements, are stated at cost. Expenditures for maintenance and repairs are charged to operating expenses as incurred. When properties are retired or otherwise disposed of, the cost of the asset and the related accumulated depreciation are removed from the accounts with the resulting gain or loss being reflected in results of operations.

Intangible assets include patents and trademarks, which are valued at acquisition through independent appraisals. Debt issuance costs are amortized over the terms of the various agreements. Patents and trademarks are amortized on a straight-line basis over periods varying from 7 to 40 years.

In 2007, the Company acquired a 62.2% interest in Clear Image, Inc. (“Clear Image”). Clear Image was a privately held company and was conducting research and development on Color MRI Technology. Clear Image was not able to secure the funding needed to keep this research and development going into the future. Clear Image had expensed the research and development costs in accordance with accounting standards in effect at the time. The Company believed it to be advantageous to acquire a controlling interest in Clear Image and keep the technology in development rather than starting all over again. The Company exchanged approximately 8.2 million of its common shares which were trading between $0.40 and $0.50 at the time of acquisition. To arrive at a value for the Color MRI Technology the Company and Clear Image determined the amount of funding provided for the research and development of this technology by looking at the amount expended from 1999 until the acquisition date. The value of the Company’s stock exchanged for the controlling interest exceeded those expensed amounts by approximately $23,000 which was recorded as goodwill because there were no other assets to value.

Critical Accounting Policies

The Financial Accounting Standards Board (“FASB”) periodically issues new accounting standards in a continuing effort to improve standards of financial accounting and reporting. Management has reviewed the recently issued pronouncements and concluded that the following new accounting standards are potentially applicable to the Company.

In April 2010, the FASB issued Accounting Standards Update (“ASU)”), No. 2010-12, “Accounting for Certain Tax Effects of the 2010 Health Care Reform Acts. The purpose of this update is to indicate that the signing dates of the Health Care and Education Reconciliation Act of 2010, signed March 30, 2010, and the Patient Protection and Affordable Care Act, signed March 23, 2010, should be considered as a single date for determining the effect, if any, on an issuer’s accounting for income taxes. This ASU amends the FASB Accounting Standards Codification (“ASC”) Income Taxes (Topic 740).

In April 2009, the FASB issued Staff Position No. 141(R)-1, “Accounting for Assets Acquired and Liabilities Assumed in a Business Combination that Arise from Contingencies.” The Staff Position amends SFAS No. 141(R), “Business Combinations,” to require an acquirer to recognize at fair value at acquisition date an asset acquired or liability assumed in a business combination that arises from a contingency if the acquisition date fair value of that asset or liability can be determined during the measurement period. The Staff Position is effective for business combinations with an acquisition date on or after December 15, 2008. The adoption of this standard did not have a material impact on the Company’s financial position, results of operations, or cash flows.

In April 2009, the FASB issued Staff Position No. 157-4, “Determining Fair Value when the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions that are not Orderly.” The Staff Position provides guidance for making fair value measurements more consistent with the principles presented in SFAS No. 157, “Fair Value Measurements.” The Staff Position relates to determining fair values when there is no active market or where the inputs being used represent distressed sales. The Staff Position is effective for interim and annual periods ending after September 15, 2009, but entities may early adopt the Staff Position for the interim and annual periods ending after March 15, 2009. The Company does not expect the adoption of this standard to have a material impact on its financial position, results of operations, or its cash flows.

In April 2009, the FASB issued Staff Position No. 107-1 and APB 28-1, “Interim Disclosures about Fair Value of Financial Instruments.” The purpose of this Staff Position is to enhance consistency in financial reporting by increasing the frequency of fair value disclosures. The Staff Position relates to assets and liabilities that are not currently disclosed on the statement of financial position at fair value. These financial instruments are currently disclosed at fair value in the notes to the financial statements on an annual basis only. This Staff Position provides for these fair value footnote disclosures to be made at interim periods, also. The Staff Position is effective for interim and annual periods ending after September 15, 2009, but entities may early adopt the Staff Position for the interim and annual periods ending after March 15, 2009. The Company does not expect the adoption of this standard to have a material impact on its financial position, results of operations, or its cash flows.

In April 2009, the FASB issued Staff Position No. 115-2 and 124-2, “Recognition and Presentation of Other-Than-Temporary Impairment.” The purpose of this Staff Position is to bring greater consistency to the timing of impairment recognition and greater clarity regarding disclosures to investors regarding the cash flows, credit losses and aging of securities with unrealized losses. The Staff Position is effective for interim and annual periods ending after September 15, 2009, but entities may early adopt the Staff Position for the interim and annual periods ending after March 15, 2009. The Company does not expect the adoption of this standard to have a material impact on its financial position, results of operations, or its cash flows.

In June 2009, the FASB issued SFAS No. 166, “Accounting for Transfers of Financial Assets, an Amendment of FASB Statement No. 140” (“SFAS No. 166”). SFAS No. 166 amends SFAS No. 140 “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities.” SFAS No. 166 improves the comparability of information that a reporting entity provides regarding transfers of financial assets and the effects on its financial statements. SFAS No. 166 is effective for interim and annual reporting periods ending after November 15, 2009. The Company is currently evaluating the effect that SFAS No. 166 will have on its financial statements.

In June 2009, the FASB issued SFAS No. 167, (ASU 2009-17) “Amendments to FASB Interpretation No. 46(R)” (“SFAS No. 167”). SFAS No. 167 amends FIN No. 46(R), “Consolidation of Variable Interest Entities” and changes the consolidation guidance applicable to a variable interest entity. Among other things, it requires a qualitative analysis to be performed in determining whether an enterprise is the primary beneficiary of a variable interest entity. SFAS No. 167 is effective for interim and annual reporting periods ending after November 15, 2009. The Company is currently evaluating the effect that SFAS No. 167 will have on its financial statements.

In June 2009, the FASB issued SFAS No. 168, (ASU 2009-01) “The FASB Accounting Standards Codification™ and the Hierarchy of Generally Accepted Accounting Principles a Replacement of FASB Statement No. 162” (“SFAS No. 168”). SFAS No. 168 replaces SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles” as the source of authoritative accounting principles recognized by the FASB to be applied by non-governmental entities in the preparation of financial statements in accordance with generally accepted accounting principles. SFAS No. 168 is effective for interim and annual reporting periods ending after September 15, 2009. On September 30, 2009, the Company adopted SFAS No. 168, which has no effect on the Company’s financial statements as it is for disclosure purposes only.

In May 2009, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 165, “Subsequent Events” (“SFAS No. 165”). SFAS No. 165 establishes the period in which management of a reporting entity should evaluate events and transactions for recognition or disclosure in the financial statements. It also describes the circumstances under which an entity should recognize events or transactions that occur after the balance sheet date. SFAS No. 165 is effective for interim and annual reporting periods ending after June 15, 2009. The Company does not expect the adoption of SFAS No. 165 to have a material effect on its financial statements and related disclosures.

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

Date of Management’s Review

Subsequent events have been evaluated through May 16, 2011, the date the financial statements were available to be issued.

NOTE 2 - UNCERTAINTIES

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. The Company is in the development stage and has not established sources of revenues to fund the development of business and pay operating expenses, resulting in a cumulative net loss of $(26,164,109) for the period from inception (August 16, 1996) to March 31, 2010. The ability of the Company to continue as a going concern during the next year depends on the successful completion of the Company’s capital raising efforts to fund the development of its retractable safety syringe. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 3 - MAXXON/GLOBE JOINT VENTURE AGREEMENT

On November 3, 2005, Maxxon and Globe Med Tech, Inc. entered into a definitive joint venture agreement to patent, develop, manufacture, market and distribute safety needle products throughout the world. Maxxon and Globe each own 50% of the joint venture. Maxxon contributed its safety syringe technology and patent rights related thereto and Globe contributed its safety syringe IV catheter and patent rights related thereto. In connection with the agreement, Maxxon issued restricted shares of its common stock, valued at $625,066, to Globe. Subsequent to December 31, 2006, the Company ended the joint venture and cancelled the shares of common stock and options that were issued to Globe pursuant to the agreement. On March 1, 2007, the Company filed a lawsuit in the District Court of Tulsa County, Oklahoma against Globe Med Tech, Inc. to rescind, terminate and seek monetary damages for the non-fulfillment and breach of a joint venture agreement entered into November 3, 2005 and other related agreements, in addition to an accounting of expenditures of funds under the terms and provisions of the agreements. On May 11, 2007, a partial default judgment against Globe was granted by the District Court of Harris County, Texas. The partial default judgment as to liability only was granted with respect to the Company’s causes of action against Globe for breach of contract, conversion and common law fraud with respect to the Company’s Original Petition and Application for Temporary and Permanent Injunctions against Globe on January 30, 2007. On August 13, 2007, the Company was granted a final default judgment for permanent injunctive relief and for damages in the amount of $14,029,000 against Globe. Globe has appealed the judgment. On November 23, 2007, the Court signed an order granting Globe’s Motion for New Trial and setting aside the Final Default Judgment entered in favor of the Company on August 13, 2007.

On October 29, 2008, the Company filed a lawsuit in the district court of Harris county Texas, a lawsuit for fraud and contempt of court for Globe Med Tech and Andy Hu individually. In response, Globe filed a motion to stay the lawsuit based upon the forum selection clause in the joint venture agreement between RMC and Globe which provides that the exclusive forum for all disputes relating to the Joint Venture Agreement shall be Oklahoma state court/Tulsa County. Due to the Texas state district’s court’s backlog of cases and the withdrawal of Globe and Hu’s counsel, the motion to stay was not heard until May 1, 2009. The motion was granted as to Globe; however, Hu did not join in the motion and, after the May 1st hearing, filed a separate motion to stay, based upon the same grounds as Globe’s motion. Hu’s motion to stay was denied at a May 8th hearing. Accordingly, RMC intends to proceed with discovery with respect to its claims against Hu, including without limitation obtaining the deposition of key witnesses.

On July 15, 2010, the deposition of Andy Hu finally took place in Tulsa, OK. After reviewing the full transcript of this deposition, the Company believed there was enough strong evidence to move directly with a summary judgment filing with the District Court of Tulsa County, OK. The Company’s attorneys, Parks and Beards, filed this summary judgment with the District Court of Tulsa County, OK on August 31, 2010. A summary judgment hearing was held on May 4, 2011. The Company is expecting a full or partial judgment ruling within a few weeks.

NOTE 4 - OTHER COMMITMENTS AND CONTINGENCIES

Employment Agreement with Rondald L. Wheet, CEO

Effective March 31, 2008, the Company and Mr. Wheet, our CEO, entered into a three (3) year employment agreement. The agreement provides for an annual salary of $225,000. He is responsible for the Company’s substantive and financial reporting requirements of the Securities Exchange Act of 1934, as amended, and is specifically allowed to hire any and all professionals necessary to assist that process. The Company will provide him with all reasonable and customary fringe benefits, including, but not limited to, participation in pension plans, profit sharing plans, employee stock ownership plans, stock option plans (whether statutory or not), stock appreciation rights plans, hospitalization, medical dental disability and life insurance, car allowance, vacation and sick leave. The Company will reimburse of all his reasonable and necessary travel, entertainment or other related expenses incurred by him in carrying out his duties and responsibilities under the agreement. The Company will also provide him with a cell phone, suitable office space, and membership dues in professional organizations and for any seminars and conferences related to Company business.

Mr. Wheet may elect, by written notice to the Company, to terminate his employment with continued pay through the employment agreement term if (i) the Company sells all of its assets, (ii) the Company merges with another business entity with a change in control,(iii) more than 50% of the outstanding stock is acquired by a third party, (iv) the Company requires Mr. Wheet to relocate or assigns duties not commensurate with his position as CEO, (v) Mr. Wheet is removed from the Board of Directors and (vi) the Company defaults in making payments required to Mr. Wheet under this agreement. For two years following his resignation or termination, Mr. Wheet will not work for or provide any services in any capacity to any competitor and will not solicit any of the Company’s customers or accounts. This agreement has been extended until such time when both parties can agree on new terms.

Employment Agreement with Thomas O’Brien, President

Effective October 26, 2009, the Company and Mr. O’Brien, our President, entered into a three (3) year employment agreement. The agreement provides for an annual salary of $180,000. As of March 31, 2011, the Company owed Mr. O’Brien $126,225 pursuant to his prior employment agreement. He is responsible for the administration, supervision, management and control of the business development of the Company, including the research, development, manufacture, marketing and sales of its current products and such future products as may be added to the Company’s business from time to time. The Company will provide him with all reasonable and customary fringe benefits, including, but not limited to, participation in pension plans, profit sharing plans, employee stock ownership plans, stock option plans (whether statutory or not), stock appreciation rights plans, hospitalization, medical dental disability and life insurance, car allowance, vacation and sick leave. The Company will reimburse of all his reasonable and necessary travel, entertainment or other related expenses incurred by him in carrying out his duties and responsibilities under the agreement. The Company will also provide him with a cell phone, suitable office space, and membership dues in professional organizations and for any seminars and conferences related to Company business.

Mr. O’Brien may elect, by written notice to the Company, to terminate his employment with continued pay through the employment agreement term if (i) the Company sells all or substantially all of its assets, (ii) the Company merges with another business entity with a change in control,(iii) more than 50% of the outstanding stock is acquired by a third party, (iv) the Company requires Mr. O’Brien to relocate or assigns duties not commensurate with his position as the President, (v) Mr. O’Brien is removed from the Board of Directors and (vi) the Company defaults in making payments required to Mr. O’Brien under this agreement. For two years following his resignation or termination, Mr. O’Brien will not work for or provide any services in any capacity to any competitor and will not solicit any of the Company’s customers or accounts.

Mutual Release and Settlement Agreement with Former Chief Executive Officer

On April 8, 2008, the Company entered into a Memorandum of Understanding with its former CEO to settle an outstanding obligation through the issuance of its common stock on a quarterly basis commencing May 8, 2008, for one year. The value of the issuance of the common stock will be determined by the market value of the ten day average price at the time of each quarterly issuance of common stock. During 2008, the Company issued 271,491 shares at a total value of $133,030 to partially repay this debt.

In May 2009, the Company completed its obligations under the Memorandum of Understanding with its former CEO.

In 2010, the Company issued 400,000 shares of the Company’s common stock as additional repayment for this debt.

Amounts Due Pursuant to Employment and Consulting Agreements

As of March 31, 2011, the Company had accrued approximately $246,225 pursuant to employment agreements. Although the Company plans to settle these amounts, there is no assurance that its efforts to settle will be successful. No litigation related to these previous employment agreements has been initiated or threatened. There is no assurance, however, that such litigation will not be initiated in the future.

Patent Applications for the Company’s Retractable Safety Syringes

The Company owns one (1) published patent on its Auto Retractable Vacuum RevVac safety syringe issued in January 2005 and one (1) published patent on its safety blood drawing device issued in June 2003. In January 2009, a second patent for the RevVac auto retractable vacuum safety syringe was issued by the U.S. patent office and published in April 2009 related to the Globe/Revolutions Medical Joint Venture. The Company has 50% ownership of this patent and is awaiting the Tulsa County, Oklahoma District Court’s decision on its ownership of the entire patent. The Company also filed international patent protection rights regarding the RevVac Auto Retractable Vacuum Safety Syringe in the following countries: Australia, China, Japan, Taiwan, Mexico, Canada and several countries in Europe.

The Company is also engaged in the development of technology which can segment and reference MRI images. By “segmenting” an image, the Company’s technology will let the user select a part of the image (bone, fluid, tissue) and render that selection in three dimensions. Essentially, different components of an image are given different colors and the user can choose the color or colors to be studied, thus eliminating those portions colored with the colors being discarded. By “referencing” the image to a data base, the user can obtain similar, identified images to aid the user in interpretation of the image being studied. The Company currently owns four (4) separate patent applications, filed in June of 2007, each of which received USPTO office actions during 2010. Revolutions Medical expects to receive issuances or additional office actions on some if not all of these patents over the next 12 months.

AMOUNTS DUE TO CONSULTANTS

None.

NOTE 5 - PREFERRED STOCK AND COMMON STOCK TRANSACTIONS

SERIES 2006 PREFERRED STOCK

Currently, 1,000,000 shares of Series 2006 Preferred Stock are outstanding. Rondald L. Wheet, our Chairman and Chief Executive Officer, has been issued the 1,000,000 shares.

SERIES 2009 PREFERRED STOCK

Currently 500,000 shares of Series 2009 Preferred Stock are outstanding. Thomas O'Brien, our President and Director, has been issued the 500,000 shares.

Dividends: The holder of the Series 2006 and the Series 2009 Preferred stock is entitled to receive, ratably, dividends when, as and if declared by the board of directors out of funds legally available therefore. If any dividend or other distributions are declared on our common stock, then a dividend or other distribution must also be declared on the outstanding Series 2006 and Series 2009 Preferred stock at the same time and on the same terms and conditions, so that each holder of Series 2006 and Series 2009 Preferred stock will receive the same dividend or distribution such holder would have received if the holder had converted his

Series 2006 and Series 2009 Preferred stock as of the record date for determining stockholders entitled to receive such dividend or distribution.

Liquidation Preference: In the event of the liquidation, dissolution or winding up, the holders of Series 2006 or 2009 Preferred stock are entitled to receive a liquidation preference of $0.001 for each share of Series 2006 or Series 2009 Preferred stock prior to payment being made to any junior stock.

Conversion: The holders of Series 2006 and Series 2009 Preferred stock may convert each share into 1 share of common stock.

Preemption: The holders of Series 2006 and Series 2009 Preferred stock have no preemptive rights and they are not subject to further calls or assessments.

Voting Rights: The holders of Series 2006 and Series 2009 Preferred stock are entitled to 125 votes for each share of common stock into which their Series 2006 and Series 2009 Preferred stock is then convertible (currently 1 share), voting together with our common stock as a single class. Cumulative voting is not permitted. Upon conversion of a Series 2006 or Series 2009 Preferred share, each share of common stock issued upon the conversion will be entitled to only one (1) vote per share.

Redemption: There are no redemption or sinking fund provisions applicable to the Series 2006 or Series 2009 Preferred stock.

BLANK CHECK PREFERRED STOCK

The Company’s Articles of Incorporation authorize its board of directors to establish one or more additional series of preferred stock and to determine, with respect to any such series of preferred stock, its terms and rights, including: the designation of each series; the voting powers, if any, associated with each such series whether dividends, if any, will be cumulative or noncumulative and the dividend rate of each series; the redemption rights and price or prices, if any, for shares of each series; and preferences and other special rights, if any, of shares of each series in the event of any liquidation, dissolution, or distribution of the Company’s assets.

2011 COMMON STOCK TRANSACTIONS

During the three months ended March 31, 2011, 520,725 shares were issued under the terms of the Drawdown Equity Financing Agreement with Auctus Private Equity, Inc. The Company received proceeds of $176,287 in connection with these share issuances.

Also during the three months ended March 31, 2011, the Company issued an additional 860,000 shares of common stock with a total value of $301,000 in lieu of cash as payment for outside services.

NOTE 6 - STOCK OPTIONS AND WARRANTS OUTSTANDING

The following tables summarize information about the stock options and warrants outstanding at March 31, 2011:

	OPTIONS		WARRANTS		TOTAL		WEIGHTED AVERAGE EXERCISE PRICE

Balance at December 31, 2010		12,834,750		1,871,600		14,706,350	$	0.21
Granted		—		—				—
Exercised		—		—				—
Expired/Forfeited		—

BALANCE AT MARCH 31, 2011		12,834,750		1,871,600		14,706,350		0.21

	OPTIONS OUTSTANDING						EXERCISABLE
Range of Exercise Price	Number Outstanding at March 31, 2011		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Number Exercisable at December 31, 2011		Weighted Average Exercise Price
OPTIONS
0.08 - 0.25		9,453,750		1.00	$	0.08		9,453,750	$	0.08
0.26-1.00		3,381,000		3.34		0.54		3,381,000		0.54
1.00-10.00

		12,834,750						12,834,750

NOTE 7 - RELATED PARTY TRANSACTIONS

On September 1, 2009, the Company entered into a five (5) year lease agreement with Osprey South, LLC (“Osprey”), to lease the property at 670 Marina Drive, Suite 301, Building F, Charleston, South Carolina, 29492. The leased property is approximately 2,395 square feet. During the course of the five (5) year lease, ending on August 31, 2014, the Company is to pay Osprey $4,500 in monthly rental installments payable on the first day of each succeeding month. The Company paid $13,500 in office rent to Osprey South, LLC for the first quarter of 2011. Ron Wheet is the sole member of Osprey South, LLC. The contract is a triple net lease with terms based upon market rates for class A office space at the time of the lease signing. The lease contract is due to expire on August 31, 2014.

NOTE 8 - REVERSE STOCK SPLIT

On January 18, 2007, the Company’s name changed from Maxxon, Inc. to Revolutions Medical Corporation and the Company’s common stock was reverse split on a 20 to 1 basis which changed the number of outstanding shares of common stock from 145,560,798 to 7,272,972. The number of authorized shares of common stock was not affected by the reverse stock split and remains at 250,000,000 shares.

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

This quarterly report on Form 10-Q and other reports filed by Revolutions Medical Corporation (“we,” “us,” “our,” or the “Company”) from time to time with the U.S. Securities and Exchange Commission (the “SEC”) contain or may contain forward-looking statements and information that are based upon beliefs of, and information currently available to, the Company’s management as well as estimates and assumptions made by Company’s management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used in the filings, the words “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “plan,” or the negative of these terms and similar expressions as they relate to the Company or the Company’s management identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These accounting principles require us to make certain estimates, judgments, and assumptions. We believe that the estimates, judgments, and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments, and assumptions are made. These estimates, judgments, and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our financial statements would be affected to the extent there are material differences between these estimates and actual results. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result. The following discussion should be read in conjunction with our consolidated financial statements and notes thereto appearing elsewhere in this report.

PLAN OF OPERATION

The Company continues to move forward with the production of its 3ml Auto Retractable Vacuum Safety Syringe, the RevVac Safety Syringe, by entering into a strategic manufacturing agreement with Medical Investment Group, Inc. (“MIG”), dated September 17, 2010. The Company expects that the first shipments of syringes should be delivered by the end of the 2nd quarter 2011. The Company made all of its pre-production payments per this manufacturing agreement and expects to start sales of its 3ml RevVac Safety Syringe in the 2nd quarter of 2011. The Company also amended the MIG agreement in January 2011, to include the 1ml size RevVac Safety Syringe. The Company plans on completing all of the pre-production payments by June 30, 2011, and to start sales and delivery during the 4th quarter of 2011 for the 1ml syringe. The Company plans to fund the manufacture process of these syringes through the use of the Auctus Equity line and the JMJ Financial convertible note. The Company also plans to continue funding the clinical study with the Philadelphia College of Medicine, North Georgia Campus, using its proprietary MRI software tools, RevColor, RevDisplay and Rev3D with its current equity line and the JMJ Financial convertible note. The study is expected to be completed in the 3rd quarter of 2011.

The Company completed its designs for the 5ml and 10ml RevVac safety syringe in November 2010 and completed the designs for the 1ml syringe in March 2011, with anticipated production of the 1ml beginning in the 3rd quarter of 2011 with sales and delivery expected in the fourth quarter of 2011. The Company completed its designs on its new pre-filled syringe using its patented vacuum technology and filed an additional provisional patent on this new design on May 3, 2011. The Company will use this new design for its interchangeable needles, RevLock, for all syringe sizes and for the new pre-filled syringes and expects to be starting this production process during the 1st quarter of 2012. The Company expects to complete designs and launch sales for its Software as a Service (SAS) business model using its MRI software tools in the 4th quarter of 2011 on its first clinical application; concussions and head trauma. The Company may also seek additional capital to secure a manufacturing facility in South Carolina for the production of its new pre filled safety syringes.

This RevVac Safety Syringe uses vacuum technology to retract the needle into the plunger after use. The syringe cannot be reused once the vacuum is activated. Revolutions Medical believes its safety syringe has many advantages over its competition including price, ease of use, and safety. It should help reduce accidental needle stick injuries and also aid in reducing the spread of contagious diseases. You may view a video of the syringe in use on are website at www.revolutionsmedical.com. The Company also believes that with the help of government regulation initiatives, individual state laws, and the importance of world health concerns, the safety syringe market will continue to have substantial growth into the foreseeable future.

The Company introduced its proprietary Color MRI software tools at the prestigious Radiological Society of North America (RSNA) show in Chicago, IL at the beginning of December 2009. Based upon the feedback from the show validating its Software as a Service (SAS) business model, the Company is now currently working on a clinical validation studies with Dr. Keith Brown at the Philadelphia College of Medicine, north Georgia Campus. The Company is hopeful that the many advantages that its proprietary RevColor, Rev3D and RevDisplay software tools have over the traditional black and white images will be validated with these first clinical studies. The Company can then proceed with other clinical studies directed at concussions, stroke, Alzheimer’s, abdomen and breast disease. The Company believes that its proprietary color MRI software tools will eventually aid in the enhanced diagnosis, detection, and monitoring of such diseases and afflictions. These first clinical studies should be completed in the 3rd quarter of 2011.

When an MRI is taken, the black and white images are sent to a picture archiving and communication system (PACS), which displays the images for a radiologist to view. By using high speed internet, these images can be securely sent to the Company’s secure website, after a secure account is opened. This is called teleradiology. For a small nominal fee or monthly subscription, the Company will use its proprietary software, based upon specific parameters and information provided, and send back the images in enhanced color and sorted in correct sequence along with the original black and white images, in a matter of minutes. A video of the MRI software can be found on the Company’s website.

On December 31, 2010, the Company announced that it had acquired the exclusive rights to license a breast biopsy localization system. The Company recently signed a worldwide exclusive license agreement with Traxsys, Inc. for an image-guided navigation system that incorporates high accuracy breast biopsies systems (“BSS”) to conventional mammography systems, which number more than 50,000 globally. This technology has already received 510K market clearance by the FDA. BSS facilitates accurate and fast non-palpable lesions and micro calcification localization in the treatment of breast cancer. It is a low-cost, standalone, stereotactic image-based system which uses data from a pair of mammograms to enable radiologists to accurately position a localization needle or biopsy tool at the location of suspicious abnormalities. The system can also be modified to leverage existing popular biopsy tools. The technology can be used to provide a technology platform for future development, including multi-modal breast imaging for the image fusion of MRI and X-Ray images. The BSS will be modified to use Revolutions Medical’s proprietary safety syringe technology. The Company believes that this technology has the potential to be deployed in the vast majority of more than 50,000 mammography machines that are currently in use worldwide, including more than 15,000 in the United States.

RESULTS OF OPERATION

For the quarter ended March 31, 2011 compared to March 31, 2010

During the quarters ended March 31, 2011 and 2010, the Company had no revenues and continued to focus on completion of the final molds needed to begin production of the 3ml RevVac Safety Syringe. Related to this process, during the quarter ended March 31, 2011, the Company incurred $762,740 in general and administrative expenses, compared to $227,813 for the same period in 2010. These expenses primarily relate to employee salaries, consulting agreements and legal fees associated with obtaining FDA approval and expenses associated with refining our current products to a production level quality. We utilize third parties for this process. We also incurred capital expenditures in the amount of $330,000 and $0, during the quarters ended March 31, 2011 and 2010, respectively, for payments to complete the pilot design and final design of our production molds related to the 3 ml RevVac Safety Syringe.

The net loss for the quarter ended March 31, 2011, was higher than the same period of March 31, 2010, as the Company incurred greater expenses primarily related to an increase in salaries and consulting fees as the safety syringe product transitions from the development stage to the production stage. The Company incurred a net operating loss of $781,198 during the quarter ended March 31, 2011, compared to a net operating loss of $229,303 for the same period in 2010. The increase in net operating loss for the first quarter of 2011, compared to the first quarter of 2010 is due in most part to the increase in consulting fees related to the 3ml RevVac Safety Syringe. During the first quarter of 2011, consulting fees totaled $383,180 compared to $51,650 for the first quarter of 2010.

In order to fund the completion of the RevVac Safety Syringe production molds, we issued stock options and/or common stock when it is acceptable to the third party for services rendered in assisting us in the product distribution and marketing process. Compensation costs related to the issuance of stock options to outside parties for services rendered during the quarters ended March 31, 2011 and 2010, were $301,000 and $0, respectively. We also sell stock as needed for cash through the equity line with Auctus to be used in our operations. During the quarters ended 2011 and 2010, we received proceeds from the exercise of stock options or sale of stock of $176,287 and $89,000, respectively. Additionally, we received payments for exercised options at the end of the first quarter totaling $339,750, in which stock was issued in April 2011 for these options.

As of March 31, 2011, the Company did not have and continues to not have sufficient cash to pay present obligations as they become due. We are searching for additional financing to generate the liquidity necessary to continue our operations. Due to current economic conditions and the Company’s risks and uncertainties, there is no assurance that we will be able to raise any additional capital on acceptable terms, if at all. Because of these uncertainties, the auditors have expressed substantial doubt about our ability to continue as a going concern. We presently have an outstanding convertible note with JMJ Financial and an equity line agreement with Auctus, but due to the Company’s risks and uncertainties, there is no assurance that we will be successful in continuing to fund money under these financing transactions. We may also not be able to establish new agreements. Even if such new agreements are established, there is no assurance that they will result in any funding. If we obtain additional funds by selling any of our equity securities or by issuing common stock to pay current or future obligations, the percentage ownership of our stockholders will be reduced, stockholders may experience additional dilution, or the equity securities may have rights preferences or privileges senior to the common stock. If adequate funds are not available to us on satisfactory terms, we may be required to cease operating or otherwise modify our business strategy.

Because we do not currently generate any cash from operations and have no credit facilities available, our only means of funding is through the sale of our common stock. We presently have 250,000,000 shares of common stock authorized, of which 44,190,634 shares were issued and outstanding as of March 31, 2011. If we obtain additional funds by selling any of our equity securities or by issuing common stock to pay current or future obligations, the percentage ownership of our stockholders will be reduced, stockholders may experience additional dilution, or the equity securities may have rights preferences or privileges senior to the common stock. If adequate funds are not available to us when needed on satisfactory terms, we may be required to cease operating or otherwise modify our business strategy.

Liquidity and Capital Resources

As of March 31, 2011, the Company did not have and continues to not have sufficient cash on hand to pay present obligations as they become due. In addition, due to current economic conditions and the Company’s related risks and uncertainties, there is no assurance that we will be able to raise additional capital on acceptable terms, if at all, to meet our current obligation over the next 12 months. Because of the foregoing, the Company’s auditors have expressed substantial doubt about our ability to continue as a going concern.

Net cash used for operating activities for the quarters ended March 31, 2011 and 2010 was $(381,530) and $(212,813), respectively. The net loss for the years ended March 31, 2011 and 2010 was $(781,198) and $(229,303), respectively. This increase is primarily attributable to the increased expense related to consulting agreements. During the first quarter of 2011, this expense was $383,180, compared to $51,650 for the first quarter of 2010. Cash requirements did not increase by this amount as $175,000 in consulting agreements were paid through the issuance of stock options and another $137,180 had been prepaid through the issuance of stock options on July 1, 2010. The remaining $71,000 in consulting agreement expense was paid in cash.

Net cash used for investing activities for the quarters ended March 31, 2011 and 2010, was $(377,000) and $(1,509), respectively. This increase in cash used for investing activities is a result of the purchase of the syringe molds in the amount of 362,000 and the purchase of a licensing agreement in the amount of $15,000.

Net cash obtained through all financing activities for quarter ended March 31, 2011, was $791,037, as compared to $164,000 for the quarter ended March 31, 2010. The increase in cash obtained through financing activities is a result of cash received for common stock subscribed in the amount of $339,750. Additionally, cash received through the issuance of convertible debt totaled $275,000 in the first quarter and cash received under the terms of the Drawdown Equity Financing Agreement with Auctus Private Equity, Inc. totaled $176,287.

We believe that our existing available cash and available funds through the convertible note with JMJ Financial will enable us to meet our working capital requirements for at least the next 6 months. Our estimated working capital requirement for the next 12 months is $1,600,000 with an estimated burn rate of $135,000 per month. This working capital requirement includes initial orders for the safety syringe expected in the 2nd quarter of 2011.

During the first quarter of 2011, the Company entered into two new convertible notes. Under the terms of the agreement with JMJ Financial, The Company signed a convertible note on February 14, 2011, set to mature on February 14, 2014, that will provide funding in the amount of $1,050,000 if fully funded. The Company will incur a one-time interest rate charge of 8% per annum due upon maturity date or conversion. The embedded beneficial conversion feature of the agreement allows the lender to convert into common stock at a discount of 30% to the average of the three lowest closing prices in the 20 trading days prior to the conversion. The Company also entered into a new note with Asher Enterprises, Inc. on January 19, 2011, that provides funding of $60,000 set to mature on October 21, 2011. The Company will incur a one-time interest rate charge of 22% per annum due upon maturity date or conversion. The embedded beneficial conversion feature of the agreement allows the lender to convert into common stock at a discount of 45% to the average of the three lowest closing prices in the 10 trading days prior to the conversion.

The following table summarizes total current assets, liabilities and working capital at March 31, 2011, compared to March 31, 2010.

	March 31, 2011 (unaudited)			March 31, 2010 (unaudited)			Increase/ (Decrease)
Current Assets	$	328,580		$	373,273		$	(44,693)
Current Liabilities	$	1,495,301		$	1,096,267		$	399,034
Working Capital Deficit	$	(1,166,721	)	$	(722,994	)	$	443,270	)

As of March 31, 2011, we had a working capital deficit of $1,166,721, as compared to a working capital deficit of $722,994 as of March 31, 2010, an increase of $443,270. Factors contributing to the increase in this deficit include the settlement agreement reach with Gifford Mabie and the SEC which increased current liabilities by $924,568, of which $500,000 in current liabilities have been reduced through the issuance of shares to partially satisfy the judgment. Additionally, the issuance of the convertible note increases current liabilities to $404,100 as of March 31, 2011, as compared to a convertible debt liability balance of $75,000 as of March 31, 2010.

Other current assets include the amount related to pre-paid consulting expenses incurred through the issuance and exercise of stock options July 1, 2010. The balance of prepaid consulting fees as of March 31, 2011 was $201,555 compared to $0 as of March 31, 2010. The remaining balance of $25,000 is a short term note receivable.

	March 31, 2011			March 31, 2010

Building	$	---		$	—
Production machinery and equipment		1,142,000			---
Furniture and fixtures		39,847			39,847
Office equipment		2,214			1,347
Leasehold improvements		—			---

		1,183,402			40,934
Less: accumulated depreciation and amortization		(10,457	)		(4,764	)
Property, plant and equipment, net	$	1,172,945		$	36,170

Production machinery and equipment as of March, 2011 consists primarily of amounts incurred in connection with the pilot molds and final molds related to the lines for the RevVac syringe.

The Company does not currently generate any cash from operations and does not have access to traditional credit facilities, however, the Company expects product sales beginning in the second quarter of 2011. Over the next 12 months, we expect to rely upon funds raised from drawdowns under our equity line of credit with Auctus Private Equity, Inc. and subsequent funding under our $1,050,000 convertible promissory note with JMJ Financial in order to implement our business plan and meet our liquidity needs going forward. The Company may also sell shares of its common stock or permit warrant exercises. We presently have 250,000,000 shares of common stock authorized, of which 44,190,634 shares were issued and outstanding as of March 31, 2011. If we implement any of the foregoing financing alternatives to pay current or future obligations, the percentage ownership of our stockholders will be reduced, stockholders may experience additional dilution, or the equity securities may have rights preferences or privileges senior to the common stock. If adequate funds are not available to us when needed on satisfactory terms, we may be required to cease operating or otherwise modify our business strategy.

Current Liabilities consists of the following:


	March 31, 2011		March 31, 2010

Accounts Payable	$	296,028	$	53,027
Credit cards		18,826		---
Accrued Salaries		246,226		476,449
Convertible Debentures and Accrued Interest		410,853		75,000
Note Payable and Accrued Interest		434,412		10,000

Other Current Liabilities		88,956		80,360

Total current liabilities	$	1,495,301	$	694,837

Changes in the balance to Accounts Payable are a result of the purchase agreement for the 1ml and 3ml RevVac Safety Syringe molds. Notes payable and Accrued Interest are a result of the settlement and determination of a liability with Gifford Mabie and the SEC. Other current liabilities include an amount due to a former employee of the Company.

Expected Purchase or Sale of Plant and Significant Equipment

None.

Expected Significant Changes in the Number of Employees

None.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We do not hold any derivative instruments and do not engage in any hedging activities.

ITEM 4. CONTROLS AND PROCEDURES.

(a) Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s principal executive officer (“CEO”) and principal financial officer (“CFO”), evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on this evaluation, the CEO and CFO concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective to ensure that information that is required to be disclosed by the Company in the reports it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to the Company’s management, including the CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

(b) Management’s Assessment of Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a−15(f) and 15d−15(f) under the Exchange Act. Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that internal controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management has assessed the effectiveness of our internal control over financial reporting as of March 31, 2011. In making this assessment, management used the criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The objective of this assessment is to determine whether our internal control over financial reporting was effective as of March 31, 2011. Based on our assessment utilizing the criteria issued by COSO, management has concluded that our internal controls over financial reporting were effective at a reasonable assurance level as of March 31, 2011. Management’s assessment identified the following material weaknesses:

As of March 31, 2011, there was a lack of accounting personnel with the requisite knowledge of Generally Accepted Accounting Principles (“GAAP”) in the U.S. and the financial reporting requirements of the SEC.

As of March 31, 2011, there were insufficient written policies and procedures to insure the correct application of accounting and financial reporting with respect to the current requirements of GAAP and SEC disclosure requirements.

As of March 31, 2011, there was a lack of segregation of duties, in that we only had one person performing all accounting-related duties.

Notwithstanding the existence of these material weaknesses in our internal control over financial reporting, our management believes that the financial statements included in its reports fairly present in all material respects the Company’s financial condition, results of operations and cash flows for the periods presented. We continue to evaluate the effectiveness of internal controls and procedures on an on-going basis. We plan to further address these issues once we commence operations and are able to hire additional personnel in financial reporting.

There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

Other than as previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2010, filed with the SEC on March 31, 2011, we are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

ITEM 1A. RISK FACTORS.

We believe there are no changes that constitute material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2010, filed with the SEC on March 31, 2011.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

There were no unregistered sales of the Company’s equity securities during the quarter ended March 31, 2011 that were not otherwise required to be disclosed in a Current Report on Form 8-K.

ITEM 3. DEFAULT UPON SENIOR SECURITIES.

There were no defaults upon senior securities during the quarter ended March 31, 2011.

ITEM 4. (REMOVED AND RESERVED).

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS.

Exhibit No.		Description

4.1		$1,050,000 Convertible Promissory Note, dated February 24, 2011 (as filed as Exhibit 4.2 on Form S-1, filed on April 6, 2011)

10.1		Registration Rights Agreement, dated February 24, 2011, by and between Revolutions Medical Corporation and JMJ Financial (as filed as Exhibit 10.11 on Form S-1, filed on April 6, 2011)

31.1		Certification of Principal Executive Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 302 of 2002*

31.2		Certification of Principal Accounting Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 302 of 2002*

32.1		Certification of Principal Executive Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

32.2		Certification of Principal Accounting Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

*filed herewith

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	REVOLUTIONS MEDICAL CORPORATION


Dated: May 17, 2011	By:	/s/ Rondald L. Wheet
	Name:	Rondald L. Wheet
	Title:	Chief Executive Officer (Principal Executive Officer)
		Chief Financial Officer (Principal Accounting Officer)

Revolutions Medical CORP - FORM 10-Q - May 17, 2011

Attached files

Revolutions Medical CORP Reports