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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 June 30, 2011

¨
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  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 ¨  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 August 1, 2011.
 
 
BIO-AMD, INC.

FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2011
TABLE OF CONTENTS


   
PAGE
     
PART I - FINANCIAL INFORMATION  
     
Item 1.
4
     
Item 2.
19
     
Item 3.
29
     
Item 4.
29
     
PART II - OTHER INFORMATION  
     
Item 1.
30
     
Item 1A.
31
     
Item 2.
31
     
Item 3.
31
     
Item 4.
31
     
Item 5.
31
     
Item 6.
36
     
  37

 

PART I – FINANCIAL INFORMATION
 
ITEM 1.          FINANCIAL STATEMENTS
 

 
 
Bio-AMD, INC. AND SUBSIDIARIES
(FORMERLY FLEX FUELS ENERGY, INC.)
(A Development Stage Company)
CONDENSED CONSOLIDATED BALANCE SHEETS

   
June 30,
   
December 31,
 
   
2011
   
2010
 
   
(Unaudited)
       
ASSETS
           
Current Assets:
           
  Cash and cash equivalents
  $ 3,378,397     $ 4,370,011  
  Prepaid expenses
    28,020       27,144  
  Value added tax and other receivables
    24,182       22,520  
  Current assets of discontinued operations
    -       3,219  
                 
               Total Current Assets
    3,430,599       4,422,894  
                 
Property and equipment, net
    9,001       5,438  
                 
Security deposits and other assets
    55,410       44,425  
                 
Total Assets
  $ 3,495,010     $ 4,472,757  
                 
LIABILITIES AND EQUITY
               
                 
Current Liabilities:
               
   Accounts payable
  $ 313,968     $ 350,784  
   Accrued expenses
    35,290       17,300  
   Taxation and social security
    22,105       18,381  
                 
               Total Current Liabilities
    371,363       386,465  
                 
                Total Liabilities
    371,363       386,465  
                 
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 June 30, 2011 and December 31, 2010
    44,526       44,526  
  Additional Paid-in Capital
    42,399,984       42,354,269  
  Accumulated other comprehensive income - foreign currency translation adjustment
    72,147       519,451  
  Deficit accumulated during development stage
    (38,756,522 )     (38,365,608 )
               Total Bio-AMD, Inc. Stockholders' Equity
    3,760,135       4,552,638  
  Non Controlling Interest
    (636,488 )     (466,346 )
  Total equity
    3,123,647       4,086,292  
                 
               Total Liabilities and Equity
  $ 3,495,010     $ 4,472,757  
 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
 
Bio-AMD, INC. AND SUBSIDIARIES
(FORMERLY FLEX FUELS ENERGY, INC.)
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 

                           
For the Period
 
                           
from March 10, 2006
 
   
For the three months
   
For the six months
   
(date of inception) through
 
   
ended June 30,
 
ended June 30,
   
June 30,
 
   
2011
   
2010
   
2011
   
2010
   
2011
 
                               
Revenue
  $ -     $ -     $ -     $ -     $ -  
                                         
Operating expenses:
                                       
         Mining exploration costs
    -       -       -       -       21,726  
         Selling, general and administrative charges
    641,829       708,679       1,152,041       1,375,695       8,894,848  
         Impairment loss - mineral claims
    -       -       -       -       10,000  
                                         
Total operating expense
    641,829       708,679       1,152,041       1,375,695       8,926,574  
                                         
Operating loss
    (641,829 )     (708,679 )     (1,152,041 )     (1,375,695 )     (8,926,574 )
                                         
Other income:
                                       
         Interest and other income
    5,090       7,126       9,826       10,985       100,489  
                                         
Loss from continuing operations, before provision for income taxes
    (636,739 )     (701,553 )     (1,142,215 )     (1,364,710 )     (8,826,085 )
                                         
Provision for income tax
    -       -       -       -       -  
                                         
Loss from continuing operations
    (636,739 )     (701,553 )     (1,142,215 )     (1,364,710 )     (8,826,085 )
                                         
Income (loss) on discontinued operations, net of tax
    586,402       27,596       586,518       8,508       (30,541,871 )
                                         
Net loss
    (50,337 )   $ (673,957 )     (555,697 )     (1,356,202 )     (39,367,956 )
                                         
Net loss attributable to the non-controlling interest
    (88,859 )     (38,148 )     (164,783 )     (86,923 )     (611,434 )
Subsidiary preferred dividend attributable to the non-controlling interest
    (7,275 )     (8,325 )     (15,807 )     (8,325 )     (40,560 )
                                         
Net income (loss) attributable to Bio-AMD, Inc. Common Shareholders
  $ 45,797     $ (627,484 )   $ (375,107 )   $ (1,260,954 )   $ (38,715,962 )
                                         
Loss per common share from continuing operations attributable to Bio-AMD, Inc. common shareholders - basic
  $ (0.01 )   $ (0.02 )   $ (0.02 )   $ (0.03 )   $ (0.14 )
Loss per common share from continuing operations attributable to Bio-AMD, Inc. common shareholders - fully diluted
  $ (0.01 )   $ (0.02 )   $ (0.02 )   $ (0.03 )   $ (0.14 )
Income (loss) per common share from discontinued operations attributable to Bio-AMD, Inc. common shareholders - basic
  $ 0.01     $ 0.00     $ 0.01     $ 0.00     $ (0.52 )
Income (loss) per common share from discontinued operations attributable to Bio-AMD, Inc. common shareholders - fully diluted
  $ 0.01     $ 0.00     $ 0.01     $ 0.00     $ (0.52 )
Net income (loss) per common share attributable to Bio-AMD, Inc. common shareholders - basic
  $ 0.00     $ (0.01 )   $ (0.01 )   $ (0.03 )   $ (0.66 )
Net income (loss) per common share attributable to Bio-AMD, Inc. common shareholders - fully diluted
  $ 0.00     $ (0.01 )   $ (0.01 )   $ (0.03 )   $ (0.66 )
                                         
Weighted average number of common shares outstanding - basic
    44,525,966       44,525,964       44,525,966       44,525,964       58,534,653  
                                         
Weighted average number of common shares outstanding - fully diluted
    49,187,504       44,525,964       44,525,966       44,525,964       58,534,653  
                                         
Comprehensive Loss:
                                       
Net loss
  $ (50,337 )   $ (673,957 )   $ (555,697 )   $ (1,356,202 )   $ (39,367,956 )
Other comprehensive income (loss), net of tax:
                                       
Foreign currency translation adjustment, net of tax
    (587,391 )   $ (9,652 )     (436,856 )   $ (353,521 )     87,202  
Total other comprehensive loss, net of tax
    (637,728 )     (683,609 )     (992,553 )     (1,709,723 )     (39,280,754 )
Comprehensive loss attributable to the non-controlling interest
    87,367       465       154,335       94,182       596,379  
Comprehensive loss attributable to the Bio-AMD Inc. Common Shareholders
  $ (550,362 )   $ (683,144 )   $ (838,218 )   $ (1,615,541 )   $ (38,684,376 )
 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


 
Bio-AMD, INC. AND SUBSIDIARIES
(FORMERLY FLEX FUELS ENERGY, INC.)
CONDENSED CONSOLIDATED STATEMENT OF EQUITY
FOR THE PERIOD FROM MARCH 10, 2006 (DATE OF INCEPTION) THROUGH JUNE 30, 2011
(Unaudited)
 
                     
Deficit
   
Accumulated
       
                     
Accumulated
   
Other
             
               
Additional
   
During
   
Comprehensive
   
Noncontrolling
   
Total
 
   
Shares
   
Amount
   
Paid-in Capital
   
Development 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
    (24,854,477 )     (24,854 )     (169,094 )     -       -       -       (193,948 )
                                                         
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
    -       -       29,908       -       -       -       29,908  
                                                         
Comprehensive Income
    -       -       -       -       (447,304 )     10,448       (436,856 )
                                                         
Subsidiary preferred dividend
    -       -       15,807       -       -       (15,807 )     -  
                                                         
Net Loss
    -       -       -       (390,914 )     -       (164,783 )     (555,697 )
                                                         
Balance at June 30, 2011
    44,525,966     $ 44,526     $ 42,399,984     $ (38,756,522 )   $ 72,147     $ (636,488 )   $ 3,123,647  
 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
 
Bio-AMD, INC. AND SUBSIDIARIES
Bio-AMD, INC. AND SUBSIDIARIES
(FORMERLY FLEX FUELS ENERGY, INC.)
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
               
For the Period
 
               
from March 10, 2006
 
   
For the six months
   
(date of inception) through
 
   
ended June 30,
   
June 30,
 
   
2011
   
2010
   
2011
 
Cash flows from operating activities:
                 
Net loss
  $ (555,697 )   $ (1,356,202 )   $ (39,367,956 )
Net income (loss) from discontinued operations
    586,518     $ 8,508     $ (30,541,871 )
Net loss from continuing operations
  $ (1,142,215 )   $ (1,364,710 )   $ (8,826,085 )
                         
Adjustments to reconcile net loss to net cash used in operating activities:
                       
         Depreciation
    4,421       -       8,845  
         Impairment loss - mineral claims
    -       -       10,000  
         Shares of common stock issued or acquired in lieu of payment for services
    -       -       716,369  
         Stock based compensation
    29,908       217,368       535,433  
         Changes in operating assets and liabilities:
                       
              Prepaid expenses and other current assets
    1,543       (3,911 )     (55,355 )
              Sales tax and interest receivable
    (2,481 )     (12,766 )     (56,066 )
              Security deposit and other assets
    (16,904 )     (4,503 )     (64,391 )
              Accounts payable
    (12,947 )     (5,284 )     408,266  
              Accrued expenses
    (15,590 )     43,018       126,105  
              Taxation and social security payable
    11,256       17,136       61,555  
                Total Adjustments
    (794 )     251,058       1,690,761  
                         
                Net cash used in operating activities of continuing operations
    (1,143,009 )     (1,113,652 )     (7,135,324 )
                         
Cash flows from investing activities:
                       
Purchase of property and equipment
    (417 )     (7,538 )     (10,246 )
Purchase of mineral claim
    -       -       (10,000 )
               Net cash used in investing activities of continuing operations
    (417 )     (7,538 )     (20,246 )
                         
Cash flows from financing activities:
                       
Repurchase of common stock
    -       -       (193,948 )
Proceeds from sale of noncontrolling interest
    -       10       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
    -       10       18,783,571  
                         
Cash flows from discontinued operations:
                       
Cash provided by operating activities of discontinued operations
    -       14,452       (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
    -       14,452       (8,889,146 )
                         
Effects of exchange rate changes on cash from continuing operations
    151,812       (353,086 )     639,542  
                         
Net (decrease) increase in cash and cash equivalents
    (991,614 )     (1,459,814 )     3,378,397  
                         
Cash and cash equivalents, beginning of period
    4,370,011       6,771,218       -  
                         
Cash and cash equivalents, end of period
  $ 3,378,397     $ 5,311,404     $ 3,378,397  
                         
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
(formerly Flex Fuels Energy, Inc.)
(A Development Stage Company)
Notes to Condensed Consolidated Financial Statements
June 30, 2011
(Unaudited)
 
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 June 30, 2011 and the results of operations and cash flows for the three and six month periods ended June 30, 2011 and 2010 and for the period from March 10, 2006 (date of inception) through June 30, 2011. 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 six month period ended June 30, 2011 are not necessarily indicative of the results to be expected for any subsequent quarter or the entire year ending December 31, 2011.
 
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, 2010, included in the Company’s annual report on Form10-K filed with the SEC on March 23, 2011.
 
The condensed consolidated financial statements as of December 31, 2010 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.
 
 
We have staked two mineral claims containing 33 cell claim units totaling approximately 683 hectares. These mining claims are hereafter referred to as the “Malibu Gold Mine Property” or the “Malibu Gold Property”. We purchased the Malibu Gold Property in March of 2006. The Malibu Gold Property is located approximately 110 km northwest of Vancouver, British Columbia. In connection with our turnaround plan and the investments made in Bio-AMD Holdings Limited and WDX Organisation Limited, we do not plan to invest further in the Malibu Gold Property, since it now considered as non-core to our operations. If no further work is performed our rights to the claims are expected to lapse on September 30, 2011 and January 12, 2014 at which time we will lose all interests that we have in the claims.

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 promotion of the business of exploration and discovery of gold, minerals, mineral deposits and reserves, 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 June 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 June 30, 2011 and December 31, 2010 and for the three and six month periods ended June 30, 2011 and 2010 and for the period from March 10, 2006 (date of inception) through June 30, 2011 are classified as discontinued operations in the accompanying unaudited condensed 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 have 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%. (77.54% as at December 31 2010). WDX has not generated any revenue to date.

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 year ended December 31, 2010, and through June 30, 2011, Bio-AMD Holdings has been developing further its technology into three initial product types 1) a digital pregnancy test, 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 June 30, 2011 and December 31, 2010, 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, 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 June 30, 2011.  Additionally, the Company has negative cash flows from continuing operations since its date of inception of $7,135,324 and has an accumulated deficit of $38,756,522 at June 30, 2011.  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 June 30, 2011, the Company has accumulated losses of $38,756,522 (of which $30,541,871 has been incurred by the discontinued operations).
 
 
Principles of consolidation

The unaudited condensed 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. (an 87.13% owned subsidiary as of June 30, 2011) and Bio-AMD Holdings Limited (a 63% owned subsidiary as of June 30, 2011). 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 has been formally dissolved as of June 30, 2011.
 
The 12.87% third party ownership of WDX and 37% third party ownership of Bio-AMD Holdings at June 30, 2011 is recorded as noncontrolling interests in the consolidated financial statements. 
 
Reclassifications

Certain reclassifications have been made to prior year’s unaudited condensed consolidated financial statements and notes thereto for comparative purposes to conform to current year’s presentation.  These reclassifications have no effect on previously reported results of operations.
 
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 wholly-owned subsidiary, FFE Ltd and of its 87.13% 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. 
 
As a result of the discontinuance of FFE Ltd’s operations determined on June 5, 2009, we have reclassified the foreign currency translation adjustment loss of $4,051,638 related to FFE Ltd from accumulated other comprehensive loss and recognized as loss on disposal/abandonment of the investment in FFE, Ltd. or as a liquidation of the investment in FFE Ltd. under the caption, gain (loss) from discontinued operations in the consolidated financial statements during the quarter ended June 30, 2009. Subsequent to June 30, 2009 we have recorded a foreign currency translation adjustment gain of $618,241 from discontinued operations as a result from the final winding down and or liquidation of the investment in FFE Ltd.  In the aggregate, we have recognized a currency translation adjustment loss of $3,433,397 related to the discontinuance and or final winding down of the investment in FFE Ltd since the determination date, June 5, 2009 through June 30, 2011 (see Note 3).
   
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 were not included in the calculation of the diluted loss per share as their effect would be anti-dilutive. The Company has 10,100,000 common stock equivalents at June 30, 2011 and 2010. For the six months ended June 30, 2011 and the three and six months ended June 30, 2010 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
 
In April 2009, we adopted accounting guidance which requires disclosures about fair value of financial instruments in interim financial statements as well as in annual financial statements.

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 June 30, 2011 (approximately $136,000 at June 30, 2011) at each institution for each entity.  At times, such amounts held may exceed the FSA insured limits.  The uninsured cash bank balances were approximately $2,890,000 and $4,059,000 at June 30, 2011 and December 31, 2010, 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” 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.  Stock based compensation recorded in the unaudited condensed consolidated financial statements for the three months ended June 30, 2011 and 2010 was $16,163 and $149,521, respectively.  Stock based compensation recorded in the unaudited condensed consolidated financial statements for the six months ended June 30, 2011 and 2010 was $29,908 and $217,368, respectively.
  
Non-controlling Interests

The 12.87% third party ownership of WDX and 37% third party ownership of Bio-AMD Holdings at June 30, 2011 and December 31, 2010 are recorded as non-controlling interests in the consolidated financial statements. Details of changes in the non-controlling interests are reflected in the unaudited condensed consolidated statement of stockholders’ equity. 
 
 
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 – Discontinued Operations

Effective June 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, Flex Fuels Energy Limited, 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 June 30, 2011 and December 31, 2010 are classified as discontinued operations in the accompanying unaudited condensed consolidated financial statements. FFE Ltd has been formally dissolved as of June 30, 2011.
 
The primary components of the amounts reported as discontinued operations are summarized as follows:  

Loss from discontinued operations (unaudited):

   
Three Months ended June 30,
   
Six Months ended June 30,
   
Date of Inception to
 
   
2011
   
2010
   
2011
   
2010
   
June 30, 2011
 
Loss from discontinued operations, net of tax
 
$
(3,153
)
 
$
(3,377
)
 
$
(3,153
)
 
$
(14,624
)
 
$
(3,186,443
)
                                         
Income/(loss) on disposal/abandonment of discontinued operations:
                                       
                                         
Impairment loss on capitalized plant under construction
                                       
  
   
-
     
-
     
-
     
-
     
(458,730
)
Loss on abandonment of assets
   
-
     
-
     
-
     
-
     
(565,714
)
Transaction costs incurred
                                       
  in connection with acquisition
   
-
     
-
     
-
     
-
     
(22,897,587
)
Foreign currency translation adjustment
                                       
  related to discontinued operations
   
589,555
     
30,973
     
589,671
     
23,132
     
(3,433,397
)
                                         
Total income (loss) on disposal/abandonment
                                       
 of discontinued operations, net of tax
   
589,555
     
30,973
     
589,671
     
23,132
     
(27,355,428
)
                                         
Income (loss) from discontinued operations
 
$
586,402
   
$
27,596
   
$
586,518
   
$
8,508
   
$
(30,541,871
)

 
Assets and liabilities of discontinued operations:

   
June 30, 2011
(Unaudited)
   
December 31,
2010
 
Assets:
           
Cash
 
$
-
   
$
201
 
Receivables
   
-
     
3,018
 
Current assets of discontinued operations
 
 $
-
   
 $
3,219
 

Note 4 - Related Party Transactions
 
During the three month periods ended June 30, 2011 and 2010, we paid an aggregate of $42,978 and $28,529, respectively to ARM.  During the six month periods ended June 30, 2011 and 2010, we paid an aggregate of $85,957 and $48,012 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. Mr. Galvin owns 12.33% of the outstanding share capital of Bio-AMD Holdings and 2.32% of the outstanding share capital of WDX.  In addition, the Company paid a total of £3,000 and £2,000 during the six month periods ended June 30, 2011 and 2010, respectively, (approximately $4,500 and $3,000, 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 5 - 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 $23,356 and $17,383 for the three month periods ended June 30, 2011 and 2010, respectively. Rent expense was $45,115 and $27,885 for the six month periods ended June 30, 2011 and 2010, respectively.
 
Employment agreements

As of June 30, 2011 Bio-AMD had no direct employees, all employment agreements having been terminated during the first half of 2009.  The Company has entered into consultancy agreements with certain management upon the discontinuance of FFE Ltd.’s operations and these consultancy agreements were effective on July 1, 2009 for a term of 12 months with an automatic extension of an additional 12 months.

Bio-AMD Holdings

There are two employees both of whom work on a full-time basis. Each of the service agreements are identical in nature and provide for the following:

·
Annual salaries of £75,000 (approximately $116,000), subject to annual review;
·
Minimum 2 year employment period;
·
Immediate termination by Bio-AMD Holdings for cause and similar events;
·
Termination by either party upon giving at least 6 months notice;
·
An entitlement to receive profit share on the basis of 7.5% of PBIT commencing December 31, 2010;
·
Expense reimbursement;
·
Bonus payments as determined by the board of directors;
·
All intellectual property made, designed or created during the term of the Service Agreement belongs to Bio-AMD Holdings;
·
Confidentiality provisions; and
·
Covenants not to compete.
 
 
WDX

Effective June 30, 2011, WDX agreed with all three of its employees to terminate existing employment agreements so as to reduce the monthly cash outgoings of the business.  Two former employees, who are also directors of WDX, are currently working through their three month notice period to undertake a strategic and corporate finance review of the business which will determine and provide tactics for taking the business forward into the next stage of its development.

Previously WDX had three employees working on a full-time basis. Each of the employment agreements were identical in nature and provided for the following:

·
Annual salaries of £65,000 (approximately US$101,000);
·
Expense reimbursement;
·
Immediate termination by WDX for cause and similar events;
·
Termination by either party upon giving of at least 3 months written notice;
·
Confidentiality provisions; and
·
Covenant not to compete.
 
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 $137,708 and $274,320 in consulting fees to these individuals for the three month periods ended June 30, 2011 and 2010, respectively.  The Company incurred $274,320 and $256,801 in consulting fees to these individuals for the six month periods ended June 30, 2011 and 2010, respectively.  The Company incurred $1,443,453 in fees to these individuals for the period from March 10, 2006 (date of inception) through June 30, 2011.

Litigation

On July 21, 2009 we commenced an action in the Nevada Court against our former corporate counsel, Mayer Brown International, LLP (“Mayer Brown”), claiming relief for general and special damages on each count of Professional Negligence, Breach of Fiduciary Duty and Breach of Contract, costs of the suit incurred including reasonable attorneys fees and such other relief as the court deemed just and proper. On October 20, 2009 the Nevada Court granted a Motion to Dismiss filed by Mayer Brown on the grounds that the forum selection clause in the Company’s contract with Mayer Brown (as entered into by prior management) determined that any dispute, including relief for Professional Negligence, Breach of Fiduciary Duty and Breach of Contract, should be conducted in the UK courts.
 
On April 9, 2010 in compliance with the UK Professional Negligence Pre-Action Protocol we informed Mayer Brown of a proposed action to seek recovery of losses, damages and costs in the UK. On July 29, 2010 we were informed by Mayer Brown that it believed that our claims were wholly without merit. We fundamentally disagreed and subsequently prepared a detailed claim.

On February 8, 2011 we submitted a claim against Mayer Brown in the High Court of Justice, Chancery Division, London, UK (“Court”), having first obtained After The Event insurance (“ATE”) intended to protect us against costs being awarded against us in the event that we lose the claim. The ATE has been extended by a leading specialist provider which, after detailed examination, has taken a view on the merits of our claim and specifically, in that regard, the likelihood of our losing our claim.
 
 
Our claim is for damages, an account in respect of sums paid to Mayer Brown, a declaration that outstanding invoices issued by Mayer Brown are not due or payable by us (collectively, the “Claim”), and for interest and costs. The amount of the Claim is made up in amounts of approximately $4 million and approximately £1 million (approximately $1.6 million) amounting to a combined total claim of approximately $5.6 million. A defense and counterclaim (the counterclaim amounting to the outstanding invoices issued by Mayer Brown) to the Claim was submitted by Mayer Brown to the Court on April 7, 2011. The Company has replied to the defense and counterclaim and the Claim is now subject to the Court case management process, with information being exchanged prior to trial.  On May 26, 2011 we obtained an order from the Court that the trial of the Claim take place in a trial window between October 1, 2012 and December 31, 2012.  On July 28, 2011, we successfully obtained a varied order from the Court bringing the trial window forward to between May 1, 2012 and July 1, 2012.  The outcome of the Claim is unknown at this time.

From time to time we may be a defendant and plaintiff in various other legal proceedings arising in the normal course of our business. Except as disclosed above, 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.

Note 6 – Segment Information

We currently operate in two segments, the development of a technology designed to mitigate currency risk through our 87.13% owned subsidiary, WDX, and the development of highly accurate, low cost, hand held electronic diagnostic devices capable of reading third party assays through our 63% owned subsidiary, Bio-AMD Holdings. Segment information for the three and six months ended June 30, 2011 and 2010 consists of the following:
Three months ended June 30, 2011:
 
   
WDX
   
Bio-AMD Holdings
   
Other
(Corporate)
   
Consolidated
 
                         
Revenue
 
$
-
   
$
-
   
$
-
   
$
-
 
Interest income
   
86
     
-
     
3,288
     
3,374
 
Other income
   
1,716
     
-
     
-
     
1,716
 
Segment net loss
   
(227,165
   
(102,267
   
279,095
     
(50,337
Expenditures for segment assets
   
-
     
-
     
-
     
-
 


Three months ended June 30, 2010:
 
   
WDX
   
Bio-AMD Holdings
   
Other
(Corporate)
   
Consolidated
 
                         
Revenue
 
$
-
   
$
-
   
$
-
   
$
-
 
Interest income
   
33
     
-
     
3,633
     
3,666
 
Other income
   
3,460
     
-
     
-
     
3,460
 
Segment net loss
   
(159,756
   
(72,879
   
(441,322
   
(673,957
Expenditures for segment assets
   
-
     
-
     
-
     
-
 


Six months ended June 30, 2011:
 
   
WDX
   
Bio-AMD Holdings
   
Other
(Corporate)
   
Consolidated
 
                         
Revenue
 
$
-
   
$
-
   
$
-
   
$
-
 
Interest income
   
157
     
-
     
5,952
     
6,109
 
Other income
   
3,717
     
-
     
-
     
3,717
 
Segment net loss
   
(384,184
   
(212,151
   
40,638
     
(555,697
Segment total assets
   
155,686
     
853,932
     
2,485,392
     
3,495,010
 
Expenditures for segment assets
   
-
     
417
     
-
     
417
 

Six months ended June 30, 2010:
 
   
WDX
   
Bio-AMD Holdings
   
Other
(Corporate)
   
Consolidated
 
                         
Revenue
 
$
-
   
$
-
   
$
-
   
$
-
 
Interest income
   
33
     
-
     
4,993
     
5,026
 
Other income
   
5,959
     
-
     
-
     
5,959
 
Segment net loss
   
(320,656
   
(118,965
   
(916,581
   
(1,356,202
Segment total assets
   
119,532
     
1,213,715
     
4,065,162
     
5,398,409
 
Expenditures for segment assets
   
-
     
7,538
     
-
     
7,538
 
 

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 consolidated financial statements and the accompanying notes included elsewhere in this Quarterly Report on Form 10-Q.
 
Overview
 
Bio-AMD, Inc. (“Bio-AMD”, the “Company”, “we” or “us”) (formerly Flex Fuels Energy, 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.
 
 
On February 25, 2010, we entered into a Subscription and Shareholders Agreement with Bio AMD Holdings Limited (“Bio-AMD Holdings”), a UK limited company, and the managers of Bio-AMD Holdings, under which we acquired a 63% interest in Bio-AMD Holdings. Bio-AMD Holdings is presently the main focus of our operations. Bio-AMD Holdings is a technology company engaged in the rapidly expanding medical diagnostic Point of Care (“PoC”) market. Bio-AMD Holdings owns several patents and has several patent applications for technology platforms that can be applied into a variety of low cost, hand-held, digital diagnostic measurement devices capable of reading a variety of third party assays detecting medical conditions such as cardiac, prothrombin time measurement and infectious diseases. See Part II, Item 5, Other Information - Bio-Alternative Medical Devices.
 
On May 1, 2009 we entered into an Investment Agreement (the “Investment Agreement”) and related agreements 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 pursuant to which we acquired a 93% interest in WDX. Pursuant to a July 23, 2010 Subscription Agreement among us, WDX and the Founders, we purchased 500,000 preferred shares of WDX and determined to allot up to 16,900 C Ordinary Shares of WDX to employees, directors and consultants of WDX to secure their continued serve to WDX and incentivize them in their performance thereof. As the result of the issuance of 14,061 of the 16,900 allotted shares, we owned 77.54% of WDX. On June 30, 2011, WDX agreed with all three of its employees to terminate existing employment agreements so as to reduce the monthly cash outgoings. 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%. See Part II, Item 5, Other Information – WDX - Currency Risk Mitigation Business.
 
We have staked two mineral claims containing 33 cell claim units totaling approximately 683 hectares referred to herein as the “Malibu Gold Property”. In connection with our turnaround plan and the investments made in Bio-AMD Holdings and WDX, we do not plan to invest further in the Malibu Gold Property, since it now considered as non-core to our operations. If no further work is performed our rights to the claims are expected to lapse on September 30, 2011 and January 12, 2014 at which time we will lose all interests that we have in the claims.
 
Effective June 5, 2009, after having carefully evaluated all options, we determined to abandon our proposed oil seed business  to be conducted by our wholly owned subsidiary, Flex Fuels Energy Limited (“FFE Ltd.”) as we no longer considered the business to be economically viable on either a go alone or partnered basis.  As a consequence of the decision to wind down the operations of our subsidiary, FFE Ltd, we have reported the results of FFE Ltd. as “discontinued operations” in the financial statements covered in this quarterly filing for the period ended June 30, 2011. FFE Ltd. was formally dissolved in February 2011, the final winding down accounting transactions 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 and WDX subsidiaries, as described above.
 
 
Results of Operations
 
Losses from Continuing Operations
 
We incurred losses from continuing operations of $636,739 and $1,142,215 for the three and six month periods ended June 30, 2011 compared to losses from continuing operations of $701,553 and $1,364,710 for the three and six month periods ended June 30, 2010.
 
The reduction in loss from continuing operations  for the three and six month periods ended June 30, 2011 (excluding the losses on discontinued operations) was primarily due to 1) Stock based compensation, a non-cash item, ($16,163 and $29,908 in the three and six month periods ended June 30, 2011 as compared to $149,521 and $217,368  in the three and six month periods ended June 30, 2010), 2) Audit and Accountancy fees ($19,091 and $78,396 in the three and six month periods ended June 30, 2011 as compared to $27,658 and $124,017 in the three and six month periods ended June 30, 20010), and 3) Public Relations and Advertising ($12,293 and $31,123 in the three and six month periods ended June 30, 2011 as compared to $53,830 and $81,089 in the three and six month periods ended June 30, 2010), The reduction was off-set by increases in consultancy, ($137,708 and $274,320 in the three and six month periods ended June 30, 2011 as compared to $129,319 and $256,801 in the three and six month periods ended June 30, 2010), payroll administration expenses ($236,408 and $391,847 in the three and six month periods ended June 30, 2011 as compared to $169,399 and $284,836 in the three and six month periods ended June 30, 2010), and rent and office related expenses ($35,751 and $76,102 in the three and six month periods ended June 30, 2011 as compared to $27,779 and $43,900 in the three and six month periods ended June 30, 2010). These increases were mainly due to the commencement of Bio-AMD in February 2010 meaning that 4 months of expenditure on these items during 2010 has been compared to 6 months of expenditure during 2011.
 
We incurred a loss from continuing operations of $8,826,085 for the period from March 10, 2006 (date of inception) through June 30, 2011.
 
Gains and Losses from Discontinued Operations
 
We had gains from discontinued operations of $586,402 and $586,518 for the three and six month periods ended June 30, 2011 resulting mainly from the discontinuance, final winding down and or liquidation of investment in FFE Ltd upon dissolution as compared to gains of $27,596 and $8,508 for the three and six month periods ended June 30, 2010.
 
The increase in gain from discontinued operations for the three and six month periods ended June 30, 2011 was primarily due to currency translation adjustment.
 
We incurred a loss from discontinued operations of $30,541,871 or $0.52 per share, for the period from March 10, 2006 (date of inception) through June 30, 2011 primarily due to the loss on disposal/abandonment of FFE Ltd. as discontinued operations, which amounted to $27,355,428 (consisted 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 $3,433,397 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 June 30, 2011 and anticipate that we will not generate any revenues until late 2012.
 
Net Losses
 
We incurred net losses in the amounts of $50,337 or $0.01 per share and $555,697 or $0.01 per share for the three and six month periods ended June 30, 2011, respectively as compared to net losses of $673,957 or $0.02 per share and $1,356,202 or $0.03 per share for the three and six month periods ended June 30, 2010, respectively as discussed above.  We incurred a net loss in the amount of $39,367,956 or $0.14 per share for the period from March 10, 2006 (date of inception) through June 30, 2011.
 
Segment Information
 
We currently operate in two segments, the development of a technology designed to mitigate currency risk through our 87.13% owned subsidiary, WDX, and the development of technology platforms for adoption in, low cost, hand held electronic diagnostic devices capable of reading third party assays for detection of a variety of medical conditions at point of care, through our 63% owned subsidiary, Bio-AMD Holdings. Segment information for the six and three months ended June 30, 2011 and 2010 consists of the following
 
Three months ended June 30, 2011:
 
   
WDX
   
Bio-AMD Holdings
   
Other
(Corporate)
   
Consolidated
 
                         
Revenue
 
$
-
   
$
-
   
$
-
   
$
-
 
Interest income
   
86
     
-
     
3,288
     
3,374
 
Other income
   
1,716
     
-
     
-
     
1,716
 
Segment net loss
   
(227,165)
     
(102,267)
     
279,095
     
(50,337)
 
Expenditures for segment assets
   
-
     
-
     
-
     
-
 

 
Three months ended June 30, 2010:
 
 
 
   
WDX
   
Bio-AMD Holdings
   
Other
(Corporate)
   
Consolidated
 
                         
Revenue
 
$
-
   
$
-
   
$
-
   
$
-
 
Interest income
   
33
     
-
     
3,633
     
3,666
 
Other income
   
3,460
     
-
     
-
     
3,460
 
Segment net loss
   
(159,756)
     
(72,879)
     
(441,322)
     
(673,957)
 
Expenditures for segment assets
   
-
     
-
     
-
     
-
 
 
Six months ended June 30, 2011:
 
   
WDX
   
Bio-AMD Holdings
   
Other
(Corporate)
   
Consolidated
 
                         
Revenue
 
$
-
   
$
-
   
$
-
   
$
-
 
Interest income
   
157
     
-
     
5,952
     
6,109
 
Other income
   
3,717
     
-
     
-
     
3,717
 
Segment net loss
   
(384,184)
     
(212,151)
     
40,638
     
(555,697)
 
Segment total assets
   
155,686
     
853,932
     
2,485,392
     
3,495,010
 
Expenditures for segment assets
   
-
     
417
     
-
     
417
 

 
Six months ended June 30, 2010:
 
 
 
   
WDX
   
Bio-AMD Holdings
   
Other
(Corporate)
   
Consolidated
 
                         
Revenue
 
$
-
   
$
-
   
$
-
   
$
-
 
Interest income
   
33
     
-
     
4,993
     
5,026
 
Other income
   
5,959
     
-
     
-
     
5,959
 
Segment net loss
   
(320,656)
     
(118,965)
     
(916,581)
     
(1,356,202)
 
Segment total assets
   
119,532
     
1,213,715
     
4,065,162
     
5,398,409
 
Expenditures for segment assets
   
-
     
7,538
     
-
     
7,538
 
 
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 31, 2007 (net of legal fees of $444,654) by way of three separate private placements of shares of common stock.  At June 30, 2011, we had cash and cash equivalents of $3,378,397, other current assets of $52,202 consisting of value added tax and other receivables and prepaid expenses, and current liabilities of $371,363, 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.  At December 31, 2010, we had cash and cash equivalents of $4,370,011, other current assets of $52,883 consisting of prepaid expenses, value added tax, other receivables and current assets of discontinued operations and current liabilities of $386,465, consisting of accounts payable, accrued expenses and taxation and social security.
 
 
Continuing Operations:
 
Net Cash (Used in) Provided By Operating Activities
 
Net cash used in operating activities of continuing operations was $1,143,009 for the six months ended June 30, 2011, as compared to $1,113,652 for the six months ended June 30, 2010. Net cash used in operating activities of continuing operations for the six months ended June 30, 2011 is primarily attributable to our net loss from continuing operation of $1,142,215 and the net change in the balances of operating assets and liabilities in the amount of $35,123, net with depreciation of $4,421 and stock based compensation of $29,908.  During the period from March 10, 2006 (date of inception) through June 30, 2011, we used net cash in operating activities of continuing operations of $7,135,324, which was primarily attributable to our net loss from continuing operations of $8,826,085, net with depreciation of $8,845, impairment loss of $10,000, common shares issued or acquired in lieu of payments for services and stock based compensation of $1,251,802, and the net change in the balances of operating assets and liabilities in the amount of $420,114.
 
Net Cash Used in Investing Activities
 
During the six months ended June 30, 2011, we used net cash in investing activities of continuing operations of $417 primarily for the purchase of property and equipment. During the six months ended June 30, 2010, we used net cash in investing activities of continuing operations of $7,538 primarily for the property and equipment acquired by Bio-AMD start up. During the period from March 10, 2006 (date of inception) through June 30, 2011, we used net cash in investing activities of continuing operations of $20,246 which is comprised of the purchase of mineral claims of $10,000 and equipment acquired by Bio-AMD of $10,246.
 
Net Cash Provided by Financing Activities
 
We did not raise any funds through financing activities of continuing operations during the six month period ended June 30, 2011.  During the period from March 10, 2006 (date of inception) through June 30, 2011, 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 June 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 June 30, 2011.
 
 
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. (an 87.13% owned subsidiary as of June 30, 2011) and Bio-AMD Holdings Ltd. (a 63% owned subsidiary as of June 30, 2011). All significant intercompany transactions and balances have been eliminated in consolidation. The 12.87% third party ownership of WDX Organisation Ltd. and the 37% third party ownership of Bio-AMD Holdings Ltd (both as at June 30, 2011) 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 87.13% 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 June 30, 2011 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 June 30, 2011 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 June 30, 2011, 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
 
On July 21, 2009 we commenced an action in the Nevada Court against our former corporate counsel, Mayer Brown International, LLP (“Mayer Brown”), claiming relief for general and special damages on each count of Professional Negligence, Breach of Fiduciary Duty and Breach of Contract, costs of the suit incurred including reasonable attorney’s fees and such other relief as the court deemed just and proper. On October 20, 2009 the Nevada Court granted a Motion to Dismiss filed by Mayer Brown on the grounds that the forum selection clause in the Company’s contract with Mayer Brown (as entered into by prior management) determined that any dispute, including relief for Professional Negligence, Breach of Fiduciary Duty and Breach of Contract, should be conducted in the UK courts.
 
On April 9, 2010 in compliance with the UK Professional Negligence Pre-Action Protocol we informed Mayer Brown of a proposed action to seek recovery of losses, damages and costs in the UK. On July 29, 2010 we were informed by Mayer Brown that it believed that our claims were wholly without merit. We fundamentally disagreed and subsequently prepared a detailed claim.
 
On February 8, 2011 we submitted a claim against Mayer Brown in the High Court of Justice, Chancery Division, London, UK (“Court”), having first obtained After The Event insurance (“ATE”) intended to protect us against costs being awarded against us in the event that we lose the claim. The ATE has been extended by a leading specialist provider which, after detailed examination, has taken a view on the merits of our claim and specifically, in that regard, the likelihood of our losing our claim.
 
Our claim is for damages, an account in respect of sums paid to Mayer Brown, a declaration that outstanding invoices issued by Mayer Brown are not due or payable by us (collectively, the “Claim”), and for interest and costs. The amount of the Claim is made up in amounts of approximately $4 million and approximately £1 million (approximately $1.6 million) amounting to a combined total claim of approximately $5.6 million. A defense and counterclaim (the counterclaim amounting to the outstanding invoices issued by Mayer Brown) to the Claim was submitted by Mayer Brown to the Court on April 7, 2011. The Company has replied to the defense and counterclaim and the Claim is now subject to the Court case management process, with information being exchanged prior to trial.  On May 26, 2011 we obtained an order from the Court that the trial of the Claim take place in a trial window between October 1, 2012 and December 31, 2012.  On July 28, 2011, we successfully obtained a varied order from the Court bringing the trial window forward to between May 1, 2012 and July 1, 2012.  The outcome of the Claim is unknown at this time.
 
From time to time we may be a defendant and plaintiff in various other legal proceedings arising in the normal course of our business. Except as disclosed above, 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 June 30, 2011.
 
ITEM 3.          DEFAULTS UPON SENIOR SECURITIES
 
None.
 
ITEM 4.          (REMOVED AND RESERVED)
 
ITEM 5.          OTHER INFORMATION
 
Name Change
 
As discussed in greater detail in Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview, on April 15, 2011 we changed our name to Bio-AMD, Inc. to better reflect a name which recognizes our core business area.
 
Operations - Bio-Alternative Medical Devices
 
On February 25, 2010, we entered into a Subscription and Shareholders Agreement with Bio AMD Holdings Limited (“Bio-AMD Holdings”), a UK limited company, and the managers of Bio-AMD Holdings, under which we acquired 63% of the fully diluted equity in Bio-AMD Holdings for £865,000 GBP (approximately US$1,287,000 at the time of purchase). The purchase price was applied to the development of the Bio-AMD Holdings business. The 37% of Bio-AMD Holdings not owned by us is owned by Dr. Nasser Djennati (12.33%), Dr. Andrew Mitchell (12.33%) and Robert Galvin (12.33%). Bio-AMD Holdings is a development stage company, formed in February 2010, which primarily operates through its subsidiary, Bio Alternative Medical Devices Ltd. (“Bio-Medical”). Where context requires, reference to Bio-AMD Holdings also includes reference to Bio-Medical.
 
Bio-AMD Holdings is a technology company focused in the rapidly expanding PoC medical diagnostic reader market. Bio-AMD Holdings 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 Holdings is working on the following product areas:
 
•  
A novel Digital Strip Reader (“DSR”) able to perform a 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);
 
•  
A digital, handheld, PoC prothrombin time monitor/blood coagulation device (“COAG”) to enable patient based, anticoagulant drug therapy monitoring; and
 
•  
A highly accurate Magnetic Particle Reader (“MPR”), providing fully quantitative measurement through the novel application of micro-fluidics and ‘lab-on-chip’ technology.
 
Each of these product areas are at varying stages in their development.  The DSR is the most advanced, with testing currently being undertaken on a variety of third party strips to establish the technology platform; the novel aspect of the COAG patent filed is also being tested with results expected in the next three months; and MPR is in early feasibility stages of development work.
 
The PoC Market
 
PoC diagnostics generally includes diagnostic testing that is not performed in a central laboratory (often also referred to as ‘decentralized’ or ‘near patient’ 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.
 
By the end of 2008, the PoC market was estimated to be worth $12.6 billion worldwide, of which $8.2 billion accounted for the established blood glucose monitoring market, $1.0 billion represented women’s health and the balance of $3.4 billion made up of other products including cardiology, oncology, infectious disease, coagulation and clinical chemistry.  The total market for PoC, excluding blood glucose products, is forecast to increase to $8.4 billion by the end of 2014, with average annual growth at approximately 11%.
 
The main trends in the PoC market are:
 
•  
Development of increasingly wide ranges of complex bio-chemical detectors and markers;
 
•  
Increasing sophistication of smart strips to accommodate the innovations in bio-chemistry; and
 
•  
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:
 
•  
Bio-chemistry designed to detect changes in body fluid chemistry and signal a medical condition; and
 
•  
Electro-mechanical engineering required to create apparatus to measure those chemical changes.
 
 
Successful delivery of PoC diagnosis combines the following elements:
 
•  
The biochemistry itself;
 
•  
The medium that holds and combines the bio-chemistry with a body fluid sample; and
 
•  
The device/reader that detects the changes in the biochemistry and communicates the result to the user/patient.
 
Reader technology development is focused on several key trends:
 
The miniaturization of the reader using low tolerance electronic and mechanical components;
 
•  
Ease of use;
 
•  
Reliability/accuracy/sensitivity;
 
•  
Low manufacturing and end user cost; and
 
•  
Preferably self–powered operation with use of ‘green’ technology such as solar powering of the device.
 
We believe that Bio-AMD Holdings has positioned itself to be an innovator in the field of reader technology development.
 
Bio-AMD Holdings Business Model, Strategy and Technology
 
Bio-AMD Holdings’ 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 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.
 
The first stage of Bio-AMD Holdings’ 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 novel 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.
 
The first planned product utilizing the DSR technology platform is a next generation, digital pregnancy test aimed at the established over the counter (“OTC”) market. Bio-AMD Holdings is currently collecting data from existing lateral flow test strips for human chorionic gonadotropin, the hormone produced early in pregnancy by the placenta, working with several bio-chemistry companies with manufacturing capability in both the US and China. In addition, Bio-AMD Holdings is exploring the extension of the DSR technology into related areas of the female health market such as ovulation, fertility and menopause testing, as well as cholesterol tests for both OTC and clinical use.
 
 
In parallel to the development of the DSR, Bio-AMD Holdings has commenced development of its COAG technology into a blood coagulation monitor.  Bio-AMD Holdings is currently testing the novel aspects of its patent application which involves the creation of a unique strip design and method for prothrombin time measurement.  We are currently in early stage partnership discussions with a preferred manufacturer and a distributor for the COAG product.
 
Bio-AMD Holdings has also commenced early stage work on its MPR technology platform based on magnetic nano-particle manipulation and detection. MPR offers significantly enhanced sensitivity compared to purely optical methods, capable of interpreting results on a fully quantitative basis. Bio-AMD Holdings has entered into discussion with a UK government backed research body with a view to establishing a collaboration agreement to develop its technology. If entered into, such a collaborative effort would significantly enhance the profile of this development work.   However, these discussions are in early stages, and there can be no assurance that these discussion will result in a formal agreement between the parties.
 
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 centers on a novel, highly sensitive and accurate method of determining with a much greater degree of accuracy and at very low levels (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 Holdings’ 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 infarcation, 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.  We believe that the Bio-AMD Holdings MPR technology has considerable potential; it may open up new diagnostic testing markets, where meaningful diagnosis can only be made if the degree of a condition can be measured with high levels of precision and accuracy.  Our method aims to bring together biology, chemistry, nano-fluidics, electronics and, 'lab-on-chip' technology together into unique, economically viable products.
 
Bio-AMD Holdings Management
 
Bio-AMD Holdings is based at the Daresbury Science and Innovation Campus (“DSIC”) in Cheshire, UK.  The DSIC was formed as part of a UK government initiative to maximize the effects of public investment on business-science collaborations.  Being based at the DSIC means that Bio-AMD Holdings 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.  Bio-AMD Holdings has also collaborated extensively with the Science and Technologies Facilities Council, one of seven national research councils in the UK funded by the UK Government, on its MPR technology, following an introduction via the DSIC.
 
 
Bio-AMD Holdings 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 Holdings and the development of the Bio-AMD Holdings business plan. Mr. Galvin owns 12.33% of Bio-AMD Holdings directly.
 
Operations - WDX Currency Risk Mitigating Business
 
On May 1, 2009 we entered into an Investment Agreement (the “Investment Agreement”) with WDX Organisation Limited (“WDX”), 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”.  As of June 30, 2011, we owned 87.13% of the issued and outstanding share capital of WDX on a fully diluted basis (77.54% as at December 2010).
 
WDX is the developer of a technology designed to mitigate currency risk known as the Wocu.  The Wocu is effectively a “World Currency” quotation derived by a WDX proprietary algorithm. The Wocu algorithm was completed in June 2009. WDX has not achieved any operating revenues to date and does not expect to achieve operating revenues until such time, if ever, that the Wocu is successfully marketed.
 
On September 10, 2009 a patent application was made to the United States Patent and Trademark Office designed to protect WDX’s computer implemented method for determining the value of a global currency unit using real time currency values and International Monetary Fund Gross Domestic Product data to weight those values.
 
On July 21, 2010 we entered into a Deed of Variation of Loan Agreement with WDX for the purpose of consolidating the outstanding loans (being a principal amount of 600,000 British Pounds) made by us to WDX.
 
On July 23, 2010 we entered into a Subscription Agreement with WDX and the Founders 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 US$750,000) at the time of purchase. 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%.
 
On September 9, 2010 WDX filed a New International Patent Application with The European Patent Office in relation to its computer-implemented global currency determination using a unique “World Currency” unit algorithm. The word “Wocu” is subject to trademark.
 
 
On September 17, 2010 WDX filed a Trademark Application with The European Trademark Office in relation to the word “Wocu”. This was granted and certified on July 14th 2011.
 
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 of WDX and create a leaner business structure that will assist the business to move into its next stage of development. 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%. Two of the former WDX employees are WDX Board members. These individuals continue to serve as Board members and have undertaken to perform their normal duties at WDX as if they were employed for the immediate future, continuing to work on a number of existing sales opportunities, including a commodities exchange and several banks which have indicated an interest in creating tradable Wocu prices.  The Board of WDX believes that the current resources are adequate to pursue these objectives in the near term. Strategic options will be reviewed concurrently, in conjunction with the Board of Bio-AMD, Inc.
 
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:
 
•  
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;
 
•  
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;
 
•  
may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and
 
•  
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:
 
 
 
 
 
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.  
       
August 11, 2011 
By:
/s/ Thomas Barr  
    Thomas Barr  
    Chief Executive Officer  
       
 
August 11, 2011 
By:
/s/ Robert Galvin  
    Robert Galvin  
    Chief Financial Officer