10-Q 1 bio-amd10q093014.htm 10-Q bio-amd10q093014.htm


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


 
FORM 10-Q 


 
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended September 30, 2014

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

Commission File Number:  000-52601

BIO-AMD, INC.
(Exact name of registrant as specified in its charter)
 
Nevada
20-5242826
(State or other jurisdiction of incorporation) 
(I.R.S. Employer Identification No.)
 
3rd Floor, 14 South Molton Street, London, UK W1K 5QP
(Address of principal executive offices)
 
+ 44 (0) 8445 861910
(Registrant’s telephone number, including area code)
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  x No  ¨
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes x  No ¨
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer o
 
Accelerated filer o
 
Non-accelerated filer o
 
Smaller reporting company x
       
(Do not check if a smaller
Reporting company)
   
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  ¨  No  x
 
There were 44,525,966 shares of the issuer’s common stock outstanding as of November 06, 2014.
 
 
BIO-AMD, INC.
 
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2014
TABLE OF CONTENTS
 
   
PAGE
 
PART I - FINANCIAL INFORMATION
 
     
Item 1.
3
     
Item 2.
14
     
Item 3.
23
     
Item 4.
23
     
 
PART II - OTHER INFORMATION
 
     
Item 1.
24
     
Item 1A.
24
     
Item 2.
24
     
Item 3.
24
     
Item 4.
24
     
Item 5.
24
     
Item 6.
24
     
 
25

 
PART I – FINANCIAL INFORMATION
 
ITEM 1.  FINANCIAL STATEMENTS
 
 
 
Bio-AMD, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
 
   
September 30,
   
December 31,
 
   
2014
   
2013
 
   
(unaudited)
       
ASSETS
           
Current Assets:
           
  Cash and cash equivalents
  $ 1,042,260     $ 1,921,895  
  Prepaid expenses
    14,391       8,633  
  Value added tax and other receivables
    15,521       23,776  
                 
               Total Current Assets
    1,072,172       1,954,304  
                 
Property and equipment, net
    847       860  
                 
Security deposits and other assets
    100,235       88,027  
                 
Total Assets
  $ 1,173,254     $ 2,043,191  
                 
LIABILITIES AND EQUITY
               
                 
Current Liabilities:
               
   Accounts payable
  $ 26,206     $ 24,551  
   Accrued expenses
    322       8,232  
   Taxation and social security
    11,453       7,217  
                 
               Total Current Liabilities
    37,981       40,000  
                 
                Total Liabilities
    37,981       40,000  
                 
Commitments and contingencies
    -       -  
                 
Equity:
               
  Bio-AMD, Inc. Stockholders' Equity:
               
  Preferred stock, $0.001 par value, 10,000,000 shares authorized, no shares issued and
    outstanding as of  September 30, 2014 and December 31, 2013
    -       -  
  Common stock, $0.001 par value, 500,000,000 shares authorized,
    44,525,966 shares issued and outstanding at September 30, 2014 and December 31, 2013
    44,526       44,526  
  Additional Paid-in Capital
    42,324,017       42,304,522  
  Accumulated other comprehensive income - foreign currency translation adjustment
    144,930       152,530  
  Accumulated deficit
    (40,265,489 )     (39,510,727 )
               Total Bio-AMD, Inc. Stockholders' Equity
    2,247,984       2,990,851  
  Non-controlling interest
    (1,112,711 )     (987,660 )
  Total Equity
    1,135,273       2,003,191  
                 
               Total Liabilities and Equity
  $ 1,173,254     $ 2,043,191  
 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
 
 
Bio-AMD, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)



   
For the three months
   
For the nine months
 
   
ended September 30,
   
ended September 30,
 
   
2014
   
2013
   
2014
   
2013
 
                         
Revenue
  $ -     $ -     $ -     $ -  
                                 
Operating expenses:
                               
         Selling, general and administrative charges
    307,222       266,988       868,497       857,346  
                                 
Total operating expense
    307,222       266,988       868,497       857,346  
                                 
Operating loss
    (307,222 )     (266,988 )     (868,497 )     (857,346 )
                                 
Other income:
                               
         Grant income
    -       77       -       70,559  
         Interest and other income
    1,259       1,721       4,316       5,082  
                                 
Loss from operations, before provision for income taxes
    (305,963 )     (265,190 )     (864,181 )     (781,705 )
                                 
Provision for income tax
    -       -       -       -  
                                 
Net loss
    (305,963 )     (265,190 )     (864,181 )     (781,705 )
                                 
Net loss attributable to the non-controlling interest
    (46,964 )     (32,365 )     (109,419 )     (59,721 )
Subsidiary preferred dividend attributable to the non-controlling interest
    (5,942 )     (7,267 )     (19,495 )     (19,371 )
                                 
Net loss attributable to Bio-AMD, Inc. Common Shareholders
  $ (253,057 )   $ (225,558 )   $ (735,267 )   $ (702,613 )
                                 
Net loss per common share attributable to Bio-AMD, Inc. common shareholders - basic
  $ (0.01 )   $ (0.01 )   $ (0.02 )   $ (0.02 )
Net loss per common share attributable to Bio-AMD, Inc. common shareholders - diluted
  $ (0.01 )   $ (0.01 )   $ (0.02 )   $ (0.02 )
                                 
Weighted average number of common
shares outstanding - basic
    44,525,966       44,525,966       44,525,966       44,525,966  
                                 
Weighted average number of common
shares outstanding - diluted
    44,525,966       44,525,966       44,525,966       44,525,966  
                                 
Comprehensive Loss:
                               
Net loss
  $ (305,963 )   $ (265,190 )   $ (864,181 )   $ (781,705 )
Other comprehensive income (loss), net of tax:
                               
Foreign currency translation adjustment, net of tax
    (54,325 )     126,133       (3,737 )     (37,207 )
Total other comprehensive loss, net of tax
    (360,288 )     (139,057 )     (867,918 )     (818,912 )
Comprehensive loss attributable to the non-controlling interest
    39,900       32,963       105,556       62,412  
Comprehensive loss attributable to the Bio-AMD Inc. Common Shareholders
  $ (320,388 )   $ (106,094 )   $ (762,362 )   $ (756,500 )
 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
 
 
Bio-AMD, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF EQUITY
FOR THE NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2014
(Unaudited)

                           
Accumulated
             
                           
Other
             
   
Common Stock
   
Additional
   
Accumulated
   
Comprehensive
   
Noncontrolling
   
Total
 
   
Shares
   
Amount
   
Paid-in Capital
   
Deficit
   
Income
   
Interest
   
Equity
 
Balance at December 31, 2013
    44,525,966     $ 44,526     $ 42,304,522     $ (39,510,727 )   $ 152,530     $ (987,660 )   $ 2,003,191  
                                                         
Comprehensive loss
    -       -       -       -       (7,600 )     3,863       (3,737 )
                                                         
Subsidiary preferred dividend
    -       -       19,495       -       -       (19,495 )     -  
                                                         
Net loss
    -       -       -       (754,762 )     -       (109,419 )     (864,181 )
Balance at September 30, 2014
    44,525,966     $ 44,526     $ 42,324,017     $ (40,265,489 )   $ 144,930     $ (1,112,711 )   $ 1,135,273  
 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
 
 
Bio-AMD, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

   
For the nine months ended September 30,
 
   
2014
   
2013
 
Cash flows from operating activities:
           
Net loss
  $ (864,181 )   $ (781,705 )
                 
Adjustments to reconcile net loss to net cash
used in operating activities:
               
         Changes in operating assets and liabilities:
               
              Prepaid expenses and other current assets
    (5,862 )     3,365  
              Sales tax and other receivable
    38,702       2,983  
              Security deposit and other assets
    (13,917 )     (21,257 )
              Accounts payable
    (36,510 )     (11,649 )
              Taxation and social security payable
    4,467       (6,871 )
                Total Adjustments
    (13,120 )     (33,429 )
                 
                Net cash used in operating activities
    (877,301 )     (815,134 )
                 
Cash flows from investing activities:
               
Purchase of property and equipment
    -       (410 )
               Net cash used in investing activities
    -       (410 )
                 
Cash flows from financing activities:
    -       -  
                 
Effects of exchange rate changes on cash
    (2,334 )     (38,380 )
                 
Net decrease in cash and cash equivalents
    (879,635 )     (853,924 )
                 
Cash and cash equivalents, beginning of period
    1,921,895       2,936,307  
                 
Cash and cash equivalents, end of period
  $ 1,042,260     $ 2,082,383  
                 
Supplementary disclosure of cash flow information:
               
Cash paid during the period for:
               
Interest
  $ -     $ -  
Income tax
  $ -     $ -  
                 
Supplemental schedule of non-cash investing and financing activities:
  $ -     $ -  
 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
 
 
Bio -AMD, Inc. and Subsidiaries
Notes to Unaudited Condensed Consolidated Financial Statements
September 30, 2014
 
Note 1 - Nature of Operations and Going Concern

General
 
The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and note disclosures normally included in annual consolidated financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.
 
In the opinion of management, the unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the consolidated financial position as of September 30, 2014 and the results of operations and cash flows for the three and nine month periods ended September 30, 2014 and 2013.The financial data and other information disclosed in the notes to the interim condensed consolidated financial statements related to these periods are unaudited. The results for the three and nine month period ended September 30, 2014 are not necessarily indicative of the results to be expected for any subsequent quarter or the entire year ending December 31, 2014.
 
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, 2013, included in the Company’s annual report on Form 10-K filed with the SEC on March 28, 2014.
 
The condensed consolidated financial statements as of December 31, 2013 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 known as 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 to Bio-AMD, Inc. to better reflect our core business area. 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”.
 
During the fourth quarter of our 2006 fiscal year, for the purpose of diversifying our business, acquiring capital, gaining greater access to the capital markets and with the assistance of newly acquired capital, we entered into an Agreement with Flex Fuels Energy Limited (“FFE Ltd”) and the stockholders of FFE Ltd and FFE Ltd became our wholly-owned subsidiary effective on May 29, 2007. FFE Ltd engaged in the development of the business of manufacturing and distributing Oil Seed Rape (“OSR”) products.
 
Effective September 5, 2009, after having carefully evaluated all options, we determined to abandon our proposed oil seed business, as we no longer considered the business to be economically viable on either a go alone or partnered basis.  The proposed project initiated by prior management involving the establishment of an oil seed crushing plant at Cardiff, Wales 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.
 
FFE Ltd. was formally dissolved in February 2011; the final winding down accounting transactions took place in May 2011.
 
 
From our inception through the date of these consolidated financial statements, we have not generated any revenues and have incurred significant expenses. The Company intends to fund its development of the currency risk technology, diagnostic technology and on-going 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. Consequently, our operations are subject to all the risks and uncertainties inherent in the establishment of a new business enterprise.
 
WOCU Limited Acquisition

On May 1, 2009, we entered into an Investment Agreement (the “Investment Agreement”) with WDX Organisation Limited, a corporation incorporated under the laws of England and Wales, and the founding shareholders of WDX Organisation Limited (the “Founders”), the owners of all of the issued and outstanding shares of WDX Organisation Limited.  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 Organisation Limited.  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 Organisation Limited. WDX Organisation Limited changed its name to WOCU Limited (“WL”) effective January 29, 2013.

WL 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 WL 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 WL and increased our equity position in WL. Altogether, these transactions have resulted in a total loan of £450,000 (approximately $717,000) to WL and the ownership of 75.66% of WL by the Company, as at the fiscal year ended December 31, 2009. During fiscal year ended December 31, 2010, WL 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 WL and executed certain call options and further increased our equity position in WL. The loans were the result of our ongoing investment in WL as contemplated by our May 1, 2009 Investment Agreement with WL.
 
Altogether, these transactions resulted in a total loan of £600,000 (approximately $904,000) to WL and the ownership of 93% of WL by the Company on March 8, 2010.
 
On July 23, 2010 we entered into a Subscription Agreement with WL and the founders of WL under which we purchased 500,000 preference shares of WL (the “Preference Shares”) at a price of one British Pound per share (approximately $750,000).   The Preference Shares earn in priority to any other class of stock of WL, 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 WL stock in the event of a sale, liquidation or listing of WL. Upon liquidation, sale or listing and after repayment of the outstanding loans made by us to WL, other liabilities of WL 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 WL.
 
The Subscription Agreement also provided for WL to allot up to an aggregate of 16,900 C Ordinary Shares of WL to employees, directors and consultants of WL to secure their continued service to WL and incentivize them in the performance thereof.  An aggregate of 14,061 C Ordinary Shares were issued, for nominal consideration, to three employees and Robert Galvin, our Chief Financial Officer on July 23, 2010. The issuance of the 14,061 C Ordinary Shares reduced our ownership in WL from 93% to 77.54%.

Effective June 30, 2011, WL 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 WL Articles of Association terminated employees gave up 9,243 C Ordinary Shares. This increased our ownership in WL to 87.13%.

During November 2011 we loaned an additional £50,000 (approximately $77,000) to WL as a short-term unsecured intercompany loan. On July 12, 2012 it was agreed that this loan would be settled through the issuance to us of 5,000,000 ordinary shares, increasing our ownership in WL to 99.81%.
 
Since January 2013, the Company has provided further advances totaling £170,000 (approximately $290,000) into WL to fund its operations based on the prospective pipeline of opportunities that have been generated.

As at September 30, 2014, there were no commercial agreements in place, and no revenues had been generated by WL.
 
 
Bio-AMD Holdings Limited Acquisition

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 (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 a portfolio of patent applications on technologies, which it expects to enable it to develop highly accurate, low cost, hand held electronic diagnostic devices capable of reading certain third party assays. Since 2010 Bio-AMD Holdings has been developing its technology into three initial product types 1) a digital strip reader targeted initially into the “over the counter” pregnancy testing market, 2) a blood coagulation device and 3) early stage development work into a POC immunoassay detection system based on magnetic nanoparticle manipulation.  In addition, Bio-AMD Holdings is working to develop various commercial relationships with manufacturers, bio-chemistry companies and sales distributions partners to enable commercialization of its products through licensing agreements.

Since January 2014, the Company has provided additional working capital by way of cash injections via intercompany loans amounting to £185,000 (approximately $313,400) to Bio-AMD to further fund operations.

As at September 30, 2014, there were no commercial agreements in place, and no revenues had been generated by Bio-AMD Holdings.

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

Going Concern

The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  The Company 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 through September 30, 2014.  Additionally, the Company has recurring negative cash flows from operations and has an accumulated deficit of $40,265,489 at September 30, 2014.  These factors raise substantial doubt about the Company’s ability to continue as a going concern.
  
The Company’s ability to continue its 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 on-going 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.
 
 
Principles of consolidation

The unaudited condensed consolidated financial statements include the accounts of Bio-AMD, Inc., Flex Fuels Energy Limited (“FFE Ltd”), a formally wholly owned subsidiary including the FFE Ltd. Subsidiaries (which consisted of four inactive and now dissolved companies), WOCU Limited (a 99.81% owned subsidiary as of September 30, 2014) and Bio-AMD Holdings Limited (a 63% owned subsidiary as of September 30, 2014). 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 was formally dissolved in February 2011 and the final winding down accounting transaction took place in May 2011.
 
The 0.19% third party ownership of WL and 37% third party ownership of Bio-AMD Holdings at September 30, 2014 and December 31, 2013 is recorded as non-controlling interests in the unaudited condensed consolidated financial statements. 

Foreign currency translation

The Company’s reporting and functional currency is US Dollars. The accounts of the Company’s 99.81% owned subsidiary, WL, and its 63% owned subsidiary, Bio-AMD Holdings, are maintained using the local currency (Great British Pound) as the functional currency. All assets and liabilities are translated into U.S. Dollars at the balance sheet date, equity is translated at historical rates 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 unaudited condensed consolidated statements of operations.

The relevant translation rates are as follows: For the nine month period ended September 30, 2013 closing rate at 1.6136 US$:GBP, average rate at 1.5461 US$:GBP and for the nine month period ended September 30, 2014 closing rate at 1.6239 US$:GBP, average rate at 1.6693 US$:GBP.   

Recently Issued Accounting Standards

In June of 2014 the Financial Accounting Standards Board issued Accounting Standards Update ASU 2014-10, “Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation” (“ASU 2014-10”). The amendments in ASU 2014-10 remove the definition of a development stage entity from the master glossary of the Accounting Standards Codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information in the statements of income, cash flows, and shareholder equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage.

The amendments also clarify that the guidance in Topic 275, Risks and Uncertainties, is applicable to entities that have not commenced planned principal operations.

The Company has elected to adopt the provisions of ASU 2014-10 for the fiscal period ending June 30, 2014. The adoption of ASU 2014-10 did not have a significant impact on our results of operations, financial condition or cash flow. 

Other 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 unaudited condensed consolidated financial statements.
 
Note 3 - Related Party Transactions
 
During the three month periods ended September 30, 2014 and 2013, we paid an aggregate of $48,425 and $44,528, respectively, to The ARM Partnership (“ARM”), a partnership in which Robert Galvin, our Chief Financial Officer and Treasurer is a partner, for services provided to us by Mr. Galvin in all capacities. During the nine month periods ended September 30, 2014 and 2013 we paid an aggregate of $144,228 and $133,583, respectively, to ARM. Mr. Galvin owns 12.33% of the outstanding share capital of Bio-AMD Holdings. In addition, the Company paid a total of £11,250 and £4,500 during the nine month periods ended September 30, 2014 and 2013, respectively (approximately $18,800 and $7,000, 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 for Bio-AMD Inc. (approximately $830) and £750 per month for Bio-AMD Holdings (approximately $1,250).
 
 
During the three month periods ended September 30, 2014 and 2013, we paid an aggregate of $39,671 and $36,717, respectively, to Thomas Barr, our Chief Executive Officer, for services provided to us by Mr. Barr in all capacities. During the nine month periods ended September 30, 2014 and 2013 we paid an aggregate of $118,928 and $110,150, respectively, to Mr. Barr.

During the three month periods ended September 30, 2014 and 2013, we paid an aggregate of $25,764 and $23,846, respectively, to David Miller, our President, for services provided to us by Mr. Miller in all capacities. During the nine month periods ended September 30, 2014 and 2013 we paid an aggregate of $77,237 and $71,537, respectively, to Mr. Miller.

Note 4 - Commitments and Contingencies
 
Lease commitments
 
The Company has no long-term lease commitments. All leases are terminable with 2 – 3 months’ notice.
 
Rent expense was $7,572 and $18,897 for the three month periods ended September 30, 2014 and 2013, respectively. Rent expense was $43,189 and $28,862 for the nine month periods ended September 30, 2014 and 2013, respectively.

Consulting agreements

The Company has entered into consulting agreements with outside contractors, certain of whom are also the Company’s stockholders, officers 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 $173,214 and $149,046 in consulting fees to these individuals for the three month periods ended September 30, 2014 and 2013, respectively and $478,604 and $453,050 for the nine month periods ended September 30, 2014 and 2013, respectively.

Litigation

From time to time we may be a defendant or plaintiff in various legal proceedings arising in the normal course of our business. We are currently not a party to any material legal proceedings or government actions, including any bankruptcy, receivership, or similar proceedings. In addition, we are not aware of any 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 5 - Segment Information

We currently operate in two segments, 1) the development of a technology designed to mitigate currency risk through our 99.81% owned subsidiary, WL as of September 30, 2014, and 2) the development of highly accurate, low cost, hand held, electronic medical diagnostic devices capable of reading third party assays through our 63% owned subsidiary, Bio-AMD Holdings as of September 30, 2014. Segment information for the three and nine months ended September 30, 2014 and 2013 consists of the following:
 
Three months ended September 30, 2014:
 
   
WL
   
Bio-AMD Holdings
   
Other
(Corporate)
   
Consolidated
 
                         
Revenue
 
$
-
   
$
-
   
$
-
   
$
-
 
Interest income
   
8
     
-
     
751
     
759
 
Other income
   
500
     
-
     
-
     
500
 
Segment net loss
   
(29,852
)
   
(126,778
)
   
(149,333
)
   
(305,963
)
Segment total assets
   
43,735
     
162,539
     
966,980
     
1,173,254
 
Expenditures for segment assets
   
-
     
-
     
-
     
-
 

 
Three months ended September 30, 2013:

   
WL
   
Bio-AMD Holdings
   
Other
(Corporate)
   
Consolidated
 
                         
Revenue
 
$
-
   
$
-
   
$
-
   
$
-
 
Interest income
   
14
     
-
     
1,242
     
1,256
 
Other income
   
465
     
77
     
-
     
542
 
Segment net loss
   
(41,226
)
   
(87,261
)
   
(136,703
)
   
(265,190
)
Segment total assets
   
99,838
     
162,212
     
1,931,322
     
2,193,372
 
Expenditures for segment assets
   
-
     
-
     
-
     
-
 

 
Nine months ended September 30, 2014:
 
   
WL
   
Bio-AMD Holdings
   
Other
(Corporate)
   
Consolidated
 
                         
Revenue
 
$
-
   
$
-
   
$
-
   
$
-
 
Interest income
   
9
     
-
     
2,805
     
2,814
 
Other income
   
1,502
     
-
     
-
     
1,502
 
Segment net loss
   
(92,860
)
   
(295,251
)
   
(476,070
)
   
(864,181
)
Segment total assets
   
43,735
     
162,539
     
966,980
     
1,173,254
 
Expenditures for segment assets
   
-
     
-
     
-
     
-
 
 
Nine months ended September 30, 2013:

   
WL
   
Bio-AMD Holdings
   
Other
(Corporate)
   
Consolidated
 
                         
Revenue
 
$
-
   
$
-
   
$
-
   
$
-
 
Interest income
   
44
     
-
     
3,801
     
3,845
 
Other income
   
1,237
     
70,559
     
-
     
71,796
 
Segment net loss
   
(128,272
)
   
(160,750
)
   
(492,683
)
   
(781,705
)
Segment total assets
   
99,838
     
162,212
     
1,931,322
     
2,193,372
 
Expenditures for segment assets
   
-
     
410
     
-
     
410
 
  
NOTE 6 – Subsequent Events
 
Management evaluated all activities of the Company through the issuance date of the Company’s interim unaudited condensed consolidated financial statements and concluded that no subsequent events have occurred that would require adjustments or disclosure into the interim unaudited condensed consolidated financial statements.
 
 
ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
Statement Regarding Forward-Looking Information
 
This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts included in this Quarterly Report on Form 10-Q, including without limitation, statements in this Management’s Discussion and Analysis of Financial Condition and Results of Operations regarding our financial position, estimated working capital, business strategy, the plans and objectives of our management for future operations and those statements preceded by, followed by or that otherwise include the words “believe”, “expects”, “anticipates”, “intends”, “estimates”, “projects”, “target”, “goal”, “plans”, “objective”, “should”, or similar expressions or variations on such expressions are forward-looking statements. We can give no assurances that the assumptions upon which the forward-looking statements are based will prove to be correct. Because forward-looking statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by the forward-looking statements. There are a number of risks, uncertainties and other important factors that could cause our actual results to differ materially from the forward-looking statements, including, but not limited to, the availability and pricing of additional capital to finance operations.
 
Except as otherwise required by the federal securities laws, we disclaim any obligations or undertaking to publicly release any updates or revisions to any forward-looking statement contained in this Quarterly Report on Form 10-Q to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
 
The following discussion should be read in conjunction with our unaudited condensed consolidated financial statements and the accompanying notes included elsewhere in this Quarterly Report on Form 10-Q.
 
Overview
 
We were incorporated in the State of Nevada under the name Malibu Minerals, Inc. on March 10, 2006, to engage in the business of exploration and discovery of gold, minerals, mineral deposits and reserves. On July 6, 2007 we changed our name to Flex Fuels Energy, Inc. through a merger effected for that sole purpose. On April 15, 2011 we changed our name to Bio-AMD, Inc. through a merger effected for that sole purpose. During the fourth quarter of 2006, we acquired a 15% interest in Flex Fuels Energy Limited (“FFE Ltd.”). In May 2007 we completed the acquisition of the remaining 85% of FFE Ltd., making FFE Ltd. a wholly owned subsidiary of ours.  FFE Ltd. was formed on November 26, 2006 under the laws of England and Wales to engage in the business of manufacturing and distributing Oil Seed Rape (“OSR”) products. Effective September 5, 2009, we determined to abandon FFE Ltd.’s proposed OSR business and related projects as we no longer considered the business to be economically viable on either a go alone or partnered basis. FFE Ltd was formally dissolved in February 2011 and the final winding down accounting transaction took place in May 2011.
 
The effect of reporting FFE Ltd. as a discontinued operation is to effectively revert the consolidated financial statements back to those items associated with the parent company, reflecting mainly compliance related costs and movements in shareholders’ funds, and to the investment made by us into our Bio AMD Holdings Limited and WOCU Limited subsidiaries, as described herein.
 
On May 1, 2009 we acquired stock of WDX Organisation Limited, a corporation incorporated under the laws of England and Wales representing a 51% interest in the company. WDX Organisation Limited changed its name to WOCU Limited (“WL”) effective January 29, 2013. Since May 1, 2009, we have acquired additional stock of WL and since July 12, 2012 we have owned 99.81% of WL making it a majority owned subsidiary of ours. WL is the developer of a technology designed to mitigate currency risk.
 
On February 25, 2010, we entered into a Subscription and Shareholders Agreement with Bio AMD Holdings Limited (“Bio-AMD”), a UK limited company, and the managers of Bio-AMD, under which we acquired 63% of the fully diluted equity in Bio-AMD for £865,000 GBP (approximately $1,287,000 at the time of purchase). Bio-AMD is a technology company focused in the rapidly expanding medical diagnostic Point Of Care (“POC”) market. Bio-AMD currently has eight patent applications pending covering its three technology platforms. In January 2014, the Company provided additional working capital by way of a cash injection via an intercompany loan amounting to £150,000 (approximately $250,000) to Bio-AMD to further fund operations.

On December 24, 2011, we sold the mineral licenses and associated rights over the “Malibu Gold Property” which was originally acquired on March 27, 2006 to engage in the business of exploration and discovery of gold, minerals, mineral deposits and reserves. The claims were sold for gross proceeds of 20,000 Canadian Dollars (approximately $20,000 at the time of payment) subject to a commission payable of 15% equivalent to 3,000 Canadian Dollars (approximately $3,025 at the time of payment).
 
 
Business Overview
 
During the quarter ended September 30, 2014, we were engaged in the following sectors:
 
Ÿ
developing our POC medical diagnostic business; and
 
Ÿ
developing our currency risk mitigation business.
 
Operations - Bio-Alternative Medical Devices

The trend toward greater POC testing is driven by the faster diagnostic benefits it provides.  Other reasons have also emerged for the high demand of POC testing, including clinical staff shortages, an ageing population, long-term healthcare cost savings and rural locations without conventional laboratory services.  We believe that Bio-AMD is an innovator in the field of diagnostic technology development, with the attributes of its technology platform fitting well with these key trends.
 
Bio-AMD currently has eight patent applications pending covering its three proprietary technology platforms listed below.  We continue to review our intellectual property strategy with the intention of sufficiently protecting our key intangible assets, and that any new IP generated is reviewed as far as possible to optimize the novel nature of the IP and freedom to operate in key jurisdictions.
 
•  
A disposable micro-fluidic test strip which has been adapted to measure prothrombin time (PT)/INR through a POC blood coagulation monitoring device (“COAG”) enabling patient based, anticoagulant drug therapy monitoring;
 
•  
A Digital Strip Reader (“DSR”) able to read a wide variety of lateral flow based immunoassay diagnostic test strips already in the POC market including, but not limited to, cardiac markers, infectious diseases, drugs of abuse and female wellbeing (pregnancy/ovulation testing) to provide semi-quantitative results; and
 
•  
A disposable test strip combining micro-fluidics and ‘lab-on-chip’ technology providing fully quantitative measurement into a highly sensitive and accurate immunoassay platform that detects nanoparticles through magnetic manipulation using a novel magnetic and optical double detection technique – Magnetic Immunoassay Detection System (“MIDS”).  

COAG 

Bio-AMD’s micro-fluidic strip technology has been adapted for use in a POC hand-held device to detect prothrombin time (“PT”)/International Normalized Ratio (“INR”), or the speed of blood coagulation. In 2013, the POC coagulation market for PT/INR measurement was estimated to be worth approximately US$ 870 million globally and projected to grow to an estimated US$ 1.1 billion by 2017.  Market growth is driven by the rising number of patients using anti-coagulation therapy, improved re-imbursement levels from health authorities following growing clinical evidence supporting the use of such testing and strong patient demand for patient self-testing. The market is dominated by a small number of major players including Alere, Roche, Siemens and Philips who have either developed products internally or have acquired exclusive rights to license appropriate technologies from smaller companies.  Patients with cardiac problems are often on life-long oral anticoagulation therapy, for example Warfarin. Frequent testing and careful monitoring of the PT/INR or blood coagulation, to regulate the doses of anticoagulation therapy, is a necessity.  A patient taking too much anticoagulant is at risk of serious bleeding events and if too little is taken they may be at risk of thrombosis.   PT/INR measurement products currently in the market are often cited as being expensive and complicated to use.

Bio-AMD has established a design that allows for low cost manufacture of the disposable strip whilst ensuring scalability and repeatability.  We have performed initial in-house bench tests at our laboratory, which, when compared against the current ‘best in market’ devices, produces comparable results which we believe validates the feasibility of our design.

In late 2013, we filed a patent application for a multi-chamber microfluidic strip design, incorporating a novel locking mechanism that allows for the control of fluid flow through the strip.  In addition to being able to test for PT which requires the presence of a single reagent in the immunoassay testing process, this enhanced strip design may enable other coagulation based tests requiring the use of multiple reagents in the immunoassay process, e.g. Activated Partial Thromboplastin Time (“APTT”), a laboratory based test which is used to measure the activity of direct thrombin inhibitors.

We envisage applying the new strip design as the basis for multiple, different coagulation specific tests utilizing a common hand held reader device to display the results.  For example, a clinician testing for PT/INR would use a specific PT/INR strip and record the result from the reader. The clinician would then be able to test for APTT using a separate APTT specific strip using the same reader device. The test strips would use a common plastic component design reducing production costs.
 
 
Launching a product into the coagulation market that incorporates our COAG technology will require us to partner with a much larger, suitable business with the requisite capital resources and skills including distribution and sales channels, and ideally global marketing expertise in sectors such as hematology and immunochemistry.  Our strategy for commercialization of COAG has centered on attracting a suitable partner that fits this profile, and which is keen to add a coagulation based POC system to its existing product line.   
 
We have been in active discussions with several parties since mid-2013 and have progressed with one potential partner that fits well with our required profile. Those discussions are at an advanced stage and we anticipate entering into an agreement to undertake a detailed feasibility study allowing that potential partner to further assess our technology utilizing the newly designed multi-chamber strip for suitability in both PT/INR and APTT.  We further anticipate this feasibility study, if successful, forming the first stage of a full-scale development project to take the coagulation system through to market. However, no formal agreement has yet been entered into, and there can be no assurance that a formal agreement will materialize and be concluded.
 
DSR

The DSR technology platform utilizes a patented proprietary method for reading and quantifying traditional chromatography based, nitro-cellulose, lateral-flow immunoassay tests, centered on what we believe to be a unique optical sensor arrangement.  The DSR comprises a proprietary design incorporating sensors, diagnostics, display and power management capabilities.  A key feature of the DSR technology is that its platform can be adapted and applied to numerous and disparate lateral flow diagnostic tests.
 
Bio-AMD has created designs for both single and multi-test versions of the DSR hand-held reader device and laboratory based bench tests have been performed by us in our premises using a variety of third party lateral flow strips.  The DSR device is designed to be fully disposable and can be powered by solar power cells, although traditional battery power sources can also be used.  Our multi-test device utilizes a replaceable cap system in which a new test strip is fitted, thereby enabling the hand-held reader to be used multiple times for the same test.  By way of example, existing over the counter (“OTC”) home fertility testing packs normally contain up to 20 separate identical tests; for this fertility application our device would require just one reader device with 20 caps, each cap containing the test strip, thereby reducing the number of component parts and manufacturing cost.

In addition, we are in the early stages of developing a unique strip design aimed at the OTC market that would enable the majority of the electronic and power management functions to be run by a smart phone, which would significantly reduce the manufacturing cost of a disposable device.  In essence the test strip and our detection sensor would be contained in a disposable cartridge which would plug into a smart phone on which would run a downloaded “app” for the computation, test result display and other features such as the management of historical results.

The market for female wellbeing, which includes digital home pregnancy and fertility testing, was estimated to be worth approximately US$1.5 billion globally in 2012.  During the course of 2013 and through to the end of March 2014, we undertook two extensive testing studies for a third party (“A Inc.”) to assess the suitability of our technology to create a disposal pregnancy test kit, using its proprietary test strips. The results of those studies were successful as compared to existing product results.  However, A Inc. has determined that a decision to take development further is to be deferred until the early part of 2015, since other projects within their portfolio have been prioritized.  We continue to remain close to A Inc., and will seek to re-establish our discussions with them at the appropriate time.
 
Since the period ended June 2014, we have engaged in discussions with a third party with a view to developing a suitable detection system for that third party’s new OTC DNA based health test, utilizing our proprietary technology, to be aimed at the fitness and health market space, initially in the U.S.  Currently, the assay to be detected has been developed as a color change test result; our technology will provide a digital readout to display test results.  Currently, this type of OTC test does not require approval from the FDA, reducing significantly both the cost and time to bring a product to market. Discussions are at an early stage, and we are assessing the suitability of our technology to provide the detection system. We have not yet entered into any formal agreement and there can be no assurance that a formal agreement will materialize and be concluded.
 
Whilst the market for pregnancy testing is very competitive and dominated by a small number of large global brands e.g. Clearblue, Predictor and First Response, several regions particularly Asia, has shown that demand from local distributors for OEM produced pregnancy test kits (“PTK”) is increasing, the key factors being price and marketability by way of unique product features.  Consequently, in tandem with our strategy to find suitable development and distribution partners we are currently reviewing the viability of creating our own branded and/or OEM digital pregnancy testing kit which will entail our finalizing the manufacturing design file and obtaining appropriate territorial regulatory approval.  Under this scenario we would incur the costs to get to that stage with a product ready to manufacture.  Such a strategy will require additional capital, which we cannot guarantee would be available on terms acceptable to us or at all.
 
 
MIDS

Demand is increasing for POC tests that can detect very low concentrations of a target analyte and to quantify the result.  Current lateral flow based immunoassays can detect analyte at high levels of concentration.  However, at low concentration levels, the assay system requires amplification either of the signal or the target, which will typically increase the complexity and the costs of the testing device.  Consequently, current POC tests remain largely unreliable for targets that require quantification.
 
We believe an opportunity exists which addresses these issues by creating an immunoassay platform technology capable of detecting biomarkers at the nanoparticle level and providing laboratory quality quantified results in a POC setting, encompassing sample collection, pre-treatment, analyte specific reaction, signal production, signal reaction and final result: from sample to result in one step.   Immunoassays for these types of tests largely rely on the detection of magnetic nanoparticles tagged with antibodies which adheres or binds to a molecule of interest. 
 
The technology will incorporate what we believe to be a novel microfluidic strip design, magnetic nanoparticle manipulation and a double detection technique using bespoke ‘Hall Effect’ sensors and unique Bio-AMD optical sensor which, when combined, will increase significantly the sensitivity and accuracy of the result.  We are not aware that this method is being used in products currently being offered in the market or in development.
 
We plan to develop the immunoassay platform using the primary cardiac biomarker for cardiac myocardial infarction, troponin I (cTnI), to initially develop the system design.  Our ultimate aim is to commercialize a product for the multiple cardiac marker testing market currently estimated to be worth US $900 million globally increasing to US $1.4 billion by 2017.  Additionally, we envisage the technology platform can be extended into new test areas, e.g. infectious diseases and drugs of abuse; has potential to expand into a multifunctional device, i.e. one analyzer using different strips for different tests; and can be introduced into high growth areas such as companion diagnostics (where POC devices are used to optimize the personalized dosage of a therapeutic drug).
 
We believe that the Bio-AMD MIDS technology has considerable potential to create a next generation of POC test devices. Our proposed method aims to bring together biology, chemistry, nano-fluidics, and electronics and, 'lab-on-chip' technology together into what we believe can be unique, economically viable products.
 
To date some very early stage work has been completed in conjunction with the Science, Technology and Facilities Council, one of Europe’s largest independent scientific research public body organizations in-part funded by the UK Government.  This work has centered on the feasibility of our design and has proved successful.  In April 2011 we made an initial patent application for the technology and in October 2012 we entered into the national phase stage, making applications in Europe, US, India and China. 
 
In October 2014, the Company received a conditional offer of a funding assistance award from Innovate UK, the UK’s Government supported innovation agency, for a Proof of Market report for our MIDS technology. A third party research company, Inventya Ltd., based in the UK, will support Bio-AMD in conducting an extensive market report into the potential for MIDS. This will include a survey of key buyers and interviews with target development partners, as well as pricing and likely commercialization strategies. The Company plans to make further funding assistance applications in line with Innovate UK competitions as they are launched, the next being scheduled in January 2015.  Access to further funding assistance, if successful, will provide a step change in the development of this key technology platform for the Company.
  
Bio-AMD’s current business model aims to commercialize its pipeline of technologies into diagnostic testing devices in conjunction with preferred partners.  Target partners are those who we believe our technology will fit strategically within their existing portfolio either as a complement to a product line, as a replacement technology or as a new product initiative.  The partner will have the requisite resource including sales and marketing, brand strength, distribution channels and balance sheet strength to take a product to market in tandem with us.
 
Bio-AMD expects that its revenue model will include revenue sharing or royalty payments, licensing sales, and milestone awards from development partners, depending on the terms of the commercial agreement entered into.  Our plan for the fiscal year ending 2014 is to continue in our attempts to secure commercial agreements for the DSR and COAG technologies.  This will significantly enhance our public exposure, help to validate the commerciality of our technology platforms and generate revenues from licensing sales and/or royalties.
 
 
We believe this strategy is especially relevant in the med-tech sector where developing manufacturing capability and sales/distribution network requires significant capital resources to establish from the outset.  Our strategy focuses our efforts on capitalizing on our core expertise and establishing a partner agreement for our COAG system as a first step.  In the event that we are successful we plan to rollout our growth strategy which will include commencement of a full scale project development program for MIDS, and potentially enter into manufacturing arrangements for specific products into target areas, for example fast growing segments of the POC market such as cardiac markers, infectious diseases and drugs of abuse.  However, we will only contemplate such moves where it makes economic sense to do so and where we believe significant value can be added to our business.  In addition, the further work required on our MIDS platform will require additional capital if we decide to commence work on a full development project.  Currently we are constrained from such activity by our limited working capital, expertise and resources, and it is unlikely that royalty and licensing revenues, if they materialize, will be sufficient to fund these growth plans.  Any decision to undertake any significant development work in new testing areas of the POC market, enter into manufacturing or to further our work on the MIDS will require us to raise capital to fund those plans.
 
Since January 2014, the Company has provided additional working capital by way of cash injections via intercompany loans amounting to £185,000 (approximately $313,400) to Bio-AMD to further fund operations.

As at September 30, 2014, there were no commercial agreements in place, and no revenues had been generated by Bio-AMD Holdings.
 
Operations - WL - Currency Risk Mitigating Business
 
WL is the creator of a proprietary algorithm that produces a global currency derivative quotation known as the WOCU®.  The WOCU can be applied to financial products provided by third parties such as index structure products, exchange traded funds or derivate contracts, with a view to mitigating any currency risk inherent within those products. The WOCU algorithm was completed in June 2009, with further work including back-testing using historical foreign exchange data, to prove the attributes of the WOCU design, taking place throughout 2010 until the WOCU’s launch late that year.  Since that time, the WL management team has sought to achieve licensing deals with a variety of financial institutions that are seeking to create financial products denominated in WOCU.
 
The WOCU is expected to have application to:
 
Ÿ
Multinational corporate treasury operations;
 
Ÿ
Reference pricing for general global trade;

Ÿ
Reference pricing for currency fixing, including virtual, online currencies;
 
Ÿ
Commodity pricing and trade;
 
Ÿ
Currency balanced savings accounts;
 
Ÿ
Fund management, including Exchange Traded Funds;
 
Ÿ
FX and derivative trading and speculation;
 
Ÿ
Global index calculations; and
 
Ÿ
Reserve ratio applications (similar to the IMF’s Special Drawing Right or SDR).
 
The WOCU’s apolitical, bank-independent, transparent, instant availability and universal nature are believed to be key differentiator compared to alternative methods of hedging against currency risk.

WL has established relationships with a number of individuals and organizations authorized to serve as introducing agents (“IAs”) to the WL business, charged with identifying suitable prospects that fit the WL target profile.   These IAs are remunerated purely on a contingent basis linked only to successful results and each IA generally carries its own expenses. The exact terms of any IA arrangement is agreed between WL and the IA on a case by case basis.  IAs are chosen based on their experience and knowledge of the financial markets and have a deep contact network. To date six such IAs has been appointed.
 
WOCU quotation indicative cross rates with the major fiat currencies are now available on several proprietary platforms, including Reuters screens and ADVFN (the UK equivalent of Investorshub in the U.S). The recent rise in prominence of crypto currencies and digital wallets has also been beneficial to promoting the WOCU, which we believe can be of application to these developments. Accordingly, the WOCU has seen enquiries from several startup businesses regarding the application of the WOCU to digital wallets and cross-border lending, although there can be no certainty that any current interest will come to fruition.

Since January 2013, the Company has provided further advances totaling £170,000 (approximately $290,000) into WL to fund its anticipated operations based on the prospective pipeline of opportunities that have been generated.

WL 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.

Results of Operations
 
Losses from Operations
 
We incurred losses from operations of $305,963 and $864,181 for the three and nine month periods ended September 30, 2014, respectively, compared to losses from operations of $265,190 and $781,705 for the three and nine month periods ended September 30, 2013, respectively. 
 
The main components of the recorded operating loss during the three and nine month periods ended September 30, 2014 compared to losses from continuing operations during the three and nine month periods ended September 30, 2013 were as follows:
 
       
3 months ended September 30,
   
9 months ended September 30,
 
   
Note
 
2014
   
2013
   
2014
   
2013
 
Consulting expenses
 
1
 
$
173,214
   
$
149,046
   
$
478,604
   
$
453,050
 
Payroll and administrative expenses
 
2
 
$
57,029
   
$
52,896
   
$
167,304
   
$
155,067
 
Legal Fees
 
3
 
$
4,278
   
$
2,339
   
$
7,125
   
$
16,552
 
Professional Fees
 
4
 
$
20,000
   
$
19,758
   
$
108,050
   
$
112,186
 
Rent, Office related, Telecoms and Miscellaneous
 
5
 
$
28,237
   
$
32,614
   
$
56,854
   
$
59,032
 
  
(1)           Consulting expenses increased by $24,168 to $173,214 for the three month period ended September 30, 2014, compared to $149,046 for the three month period ended September 30, 2013 and increased by $25,554 to $478,604 for the nine month period ended September 30, 2014 compared to $453,050 for the nine month period ended September 30, 2013. Consulting expenses includes consultants engaged with the management and administration of the Company utilized in the course of our operations and those of our subsidiaries. The increase was primarily due to additional consultancy services within Bio Alternative Medical Devices Ltd., together with exchange rate fluctuations as a result of the payments being made in GBP and the translation to USD for reporting purposes.
 
(2)           Payroll and administrative expenses increased by $4,134 from $52,896 for the three month period ended September 30, 2013 to $57,030 for the three month period ended September 30, 2014 and increased by $12,237 from $155,067 for the nine month period ended September 30, 2013 to $167,304 for the nine month period ended September 30, 2014. The increase was primarily due to exchange rate fluctuations as a result of the payments being made in GBP and the translation to USD on a quarterly basis.

(3)           Legal fees increased by $1,940 from $2,339 for the three month period ended September 30, 2013 to $4,279 for the three month period ended September 30, 2014 and reduced by $9,427 to $7,125 for the nine month period ended September 30, 2014 from $16,552 for the nine month period ended September 30, 2013. We continue to monitor all advisor related expenditure to ensure maximum value at minimal cost.

(4)           Professional fees comprised primarily of audit and financial compliance related costs, increased by $242 from $19,758 for the three month period ended September 30, 2013 to $20,000 for the three month period ended September 30, 2014 and decreased by $4,136 from $112,186 for the nine month period ended September 30, 2013 to $108,050 for the nine month period ended September 30, 2014. The fluctuations were primarily due to timings of invoices received.
 
(5)           Rent, Office related, Telecoms and Travel expense was $28,237 for the three month period ended September 30, 2014 compared to $32,614 for the three month period ended September 30, 2013 and were $56,854 for the nine month period ended September 30, 2014 compared to $59,032 for the nine month period ended September 30, 2013. The decrease of $2,178 for the nine month period ended September 2014 can mainly be attributed to change in premises utilized by Bio-AMD.
 

Revenues
 
We have not generated any revenues from operations for the three and nine month period ended September 30, 2014 and 2013.
 
Other Income
 
We recorded other income during the three and nine month periods ended September 30, 2014 of $1,259 and $4,316, respectively, as compared to $1,798 and $75,641 for the three and nine month periods ended September 30, 2013, respectively.  During the three month period ended September 30, 2013, a UK tax credit was granted to our subsidiary Bio Alternative Medical Devices Ltd. amounting to £45,637 (approximately $71,000) in consideration for a retrospective application for the partial surrender of operating tax losses in the financial year ended December 31, 2011, in return for a cash payment. The balance relates to interest income of approximately $1,700.  We intend to make further similar applications for subsequent tax years to maximize cash flow into Bio Alternative Medical Devices Ltd. The value recorded for the three month period ended September 30, 2014 relates solely to interest income.
 
Net Losses
 
We incurred a net loss in the amount of $305,963 and $864,181 ($0.01 and $0.02 per share) for the three and nine month periods ended September 30, 2014, respectively, as compared to a net loss of $265,190 and $781,705 ($0.01 and $0.02 per share) for the three and nine month periods ended September 30, 2013, respectively, as discussed above.

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 to support our working capital requirements or for further investment in current and future operations.  If we are unable to raise the necessary capital at the times we require such funding, we may have to materially change our business plan, delaying implementation of aspects of our business plan or curtailing or abandoning our business plan.  Investing in us is a speculative investment and investors may lose all of their investment.
 
Since our inception, we have been financed primarily by private placements.  We raised $10,000 for shares issued to founders in 2006, $1,635,000 on December 29, 2006 (net of legal fees of $20,000), $13,391,879 on May 29, 2007 (net of legal fees of $1,492,000), and $3,940,189 on July 29, 2007 (net of legal fees of $444,654) by way of three separate private placements of shares of common stock.  At September 30, 2014, we had cash and cash equivalents of $1,042,260; other current assets of $29,912 consisting of value added tax and other receivables and prepaid expenses, and current liabilities of $37,981, 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. 
 
Net Cash Used in Operating Activities
 
Net cash used in operating activities of continuing operations was $877,301 for the nine months ended September 30, 2014, as compared to $815,134 for the nine months ended September 30, 2013. The increase is primarily attributable to our net loss from operations of $864,181 and the net change in the balances of operating assets and liabilities in the aggregate amount of $13,120.
 
Net Cash Used in Investing Activities
 
Net cash used in investing activities during the nine month periods ended September 30, 2014 and 2013 was $0 and $410, respectively. The expenditure during the nine month period ended September 30, 2013 was related to the purchase of furniture and fittings. 

Net Cash Provided by Financing Activities
 
We did not raise any funds through financing activities of continuing operations during the nine month periods ended September 30, 2014 and 2013.  
 
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. Additionally, the Company has negative cash flows from operations for the nine months ended September 30, 2014 of $877,301 and has an accumulated deficit of $40,265,489 at September 30, 2014.  These factors raise substantial doubt about our ability to continue as a going concern. Our unaudited condensed consolidated financial statements do not include any adjustments that might result from our inability to continue as a going concern.
 
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 unaudited condensed 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.
 
Going Concern
 
The unaudited condensed 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 unaudited condensed 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 unaudited condensed 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 unaudited condensed 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), WOCU Limited, (a 99.81% owned subsidiary as of September 30, 2014) and Bio-AMD Holdings Limited (a 63% owned subsidiary as of September 30, 2014). All significant intercompany transactions and balances have been eliminated in consolidation. The 0.19% third party ownership of WOCU Limited, and the 37% third party ownership of Bio-AMD Holdings Limited (both as at September 30, 2014) are recorded as non-controlling interests in the unaudited condensed 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.
 
Foreign Currency Translation
 
The Company’s reporting and functional currency is US Dollars. The accounts of the Company’s wholly-owned subsidiary, FFE Ltd, of its 99.81% owned subsidiary, WOCU Limited and of its 63% owned subsidiary, Bio AMD Holdings Limited, are maintained using the local currency (Great British Pound) as the functional currency. All assets and liabilities are translated into US Dollars at balance sheet date, equity is translated at historical rate 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.

The relevant translation rates are as follows: For the nine month period ended September 30, 2013 closing rate at 1.6136 US$:GBP, average rate at 1.5461 US$:GBP and for the nine month period ended September 30, 2014 closing rate at 1.6239 US$:GBP, average rate at 1.6693 US$:GBP.   

Non-controlling Interest

The 0.19% third party ownership of WL and 37% third party ownership of Bio-AMD at September 30, 2014 and 2013 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 equity.
 
Recent accounting pronouncements
 
In June of 2014 the Financial Accounting Standards Board issued Accounting Standards Update ASU 2014-10, “Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation” (“ASU 2014-10”). The amendments in ASU 2014-10 remove the definition of a development stage entity from the master glossary of the Accounting Standards Codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information in the statements of income, cash flows, and shareholder equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage.

The amendments also clarify that the guidance in Topic 275, Risks and Uncertainties, is applicable to entities that have not commenced planned principal operations.

The Company has elected to adopt the provisions of ASU 2014-10 for the fiscal period ending June 30, 2014. The adoption of ASU 2014-10 did not have a significant impact on our results of operations, financial condition or cash flow. 

Other 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 unaudited condensed consolidated financial statements.
 
Off-Balance Sheet Arrangements
 
We have no off-balance sheet arrangements.
 
 
Inflation

We believe that inflation has not had, and is not expected to have, a material effect on our operations.

Climate Change

We believe that neither climate change, nor governmental regulations related to climate change, have had, or are expected to have, any material effect on our operations. 

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
Not applicable.
 
ITEM 4.  CONTROLS AND PROCEDURES
 
Evaluation of Disclosure Controls and Procedures
 
We maintain disclosure controls and procedures that are designed to ensure that material information required to be disclosed in our periodic reports filed under the Securities Exchange Act of 1934, as amended, or 1934 Act, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and to ensure that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer as appropriate, to allow timely decisions regarding required disclosure. During the quarter ended September 30, 2014 we carried out an evaluation, under the supervision and with the participation of our management, including the principal executive officer and the principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13(a)-15(e) under the 1934 Act. Based on this evaluation, management concluded that as of September 30, 2014 our disclosure controls and procedures were effective.
 
Limitations on Effectiveness of Controls and Procedures
 
Our management, including our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), does not expect that our disclosure controls and procedures will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include, but are not limited to, the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
 
Changes in Internal Controls
 
During the fiscal quarter ended September 30, 2014, there have been no changes in our internal control over financial reporting that have materially affected or are reasonably likely to materially affect our internal controls over financial reporting.
 
 
PART II – OTHER INFORMATION
 
ITEM 1.  LEGAL PROCEEDINGS
 
From time to time we may be a defendant or plaintiff in various legal proceedings arising in the normal course of our business. We are currently not a party to any material legal proceedings or government actions, including any bankruptcy, receivership, or similar proceedings. In addition, we are not aware of any litigation or liabilities involving the operators of our properties that could affect our operations. Furthermore, as of the date of this Quarterly Report, our management is not aware of any proceedings to which any of our directors, officers, or affiliates, or any associate of any such director, officer, affiliate, or security holder is a party adverse to our company or has a material interest adverse to us.
 
ITEM 1A.  RISK FACTORS
 
Not applicable.
 
ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 
We issued no equity securities during the quarter ended September 30, 2014.
 
ITEM 3.  DEFAULTS UPON SENIOR SECURITIES
 
None.
 
ITEM 4.  MINE SAFETY DISCLOSURES
 
Not applicable.
 
ITEM 5.  OTHER INFORMATION

None.
 
ITEM 6.  EXHIBITS
  
The following exhibits are included as part of this report:
 
Exhibit No.
 
Description
     
31.1
 
31.2
 
32.1
 
32.2
 
101.INS
 
XBRL Instance Document
101.SCH
 
XBRL Taxonomy Extension Schema Document
101.CAL
 
XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
 
XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
 
XBRL Taxonomy Extension Label Linkbase Document
101.PRE
 
XBRL Taxonomy Extension Presentation Linkbase Document

 
 
In accordance with the requirements of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
BIO-AMD, INC.
 
November 14, 2014                                                                                 By: /s/ Thomas Barr                                   
      Thomas Barr, Chief Executive Officer
 
BIO-AMD, INC.
 
November 14, 2014                                                                                 By: /s/ Robert Galvin                                 
      Robert Galvin, Chief Financial Officer
 
 
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