| Nature of Operations [Text Block] | Note 1 – Nature of Operations and Continuance of Business
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 March 31, 2016 and the results of operations and cash flows for the three month periods ended March 31, 2016 and 2015. 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 month period ended March 31, 2016 are not necessarily indicative of the results to be expected for any subsequent quarter or the entire year ending December 31, 2016.
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, 2015, included in the Company’s annual report on Form 10-K filed with the SEC on March 30, 2016.
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 by which 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 involved building an oil seed crushing plant at Cardiff, Wales was compromised by delays, sub-optional design and substantial legal costs. We were unable to raise the necessary financing, 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.
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/or 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 the WOCU technology, an algorithm and system of providing reference data for its WOCU global currency unit, 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. WL 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 WOCU technology through licensing agreements.
On March 8, 2010, we loaned an additional £150,000 (approximately $224,055) to WL and executed certain call options to further increase 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 of 5,000,000 common shares, increasing our ownership in WL to 99.81%.
Since January 2013, the Company has provided further advances totaling £194,000 (approximately $279,000) into WL to fund its operations based on the prospective pipeline of opportunities that have been generated.
As at March 31, 2016, 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” female well being market (including digital pregnancy, ovulation and fertility testing, (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 £100,000 (approximately $143,000) to Bio-AMD Holdings to further fund operations. These loans are secured against the assets of Bio-AMD Holdings and its wholly owned operating subsidiary, Bio-Medical.
Bio-AMD, Inc., WL, a majority-owned subsidiary, and Bio-AMD Holdings, a majority-owned subsidiary, 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 March 31, 2016. Additionally, the Company has recurring negative cash flows from operations and has an accumulated deficit of $41,477,123 and a working capital deficit of $109,387 as at March 31, 2016. 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. |
