QUANTRX BIOMEDICAL CORP - Quarter Report: 2014 September (Form 10-Q)

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QUANTRX BIOMEDICAL CORPORATION

Nevada		33-0202574
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification Number)

10190 SW 90th Avenue, Tualatin, Oregon 97123

(Address of Principal Executive Offices) (Zip Code)

503-575-9385

(Registrant's Telephone Number, Including Area Code)

Large accelerated filer	[   ]	Accelerated filer	[   ]
Non-accelerated filer	[   ]	Smaller reporting company	[X]

 

 

		PAGE
PART I - FINANCIAL INFORMATION
ITEM 1.	Financial Statements	1
	Consolidated Balance Sheets as of September 30, 2014 (Unaudited) and December 31, 2013	2
	Consolidated Statements of Operations (Unaudited) for the three and nine months ended September 30, 2014 and 2013	3
	Consolidated Statements of Cash Flows (Unaudited) for the nine months ended September 30, 2014 and 2013	4
	Condensed Notes to (Unaudited) Consolidated Financial Statements	5
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
ITEM 4.	Controls and Procedures	18
PART II – OTHER INFORMATION
ITEM 1.	Legal Proceedings	19
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	19
ITEM 3.	Defaults Upon Senior Securities	19
ITEM 4.	Mine Safety Disclosures	19
ITEM 5.	Other Information	19
ITEM 6.	Exhibits	19
Signatures

 

 

 

 

The accompanying condensed notes are an integral part of these interim consolidated financial statements.

 

Our efforts to commercialize our products remain contingent on the receipt of additional financing required to execute our business and operating plan, which is currently focused on the commercialization of our PAD technology either directly or through a joint venture or other relationship intended to increase shareholder value.  In the interim, we have had nominal operations, focused principally on the limited online sale of our Unique® Miniform PAD product, maintaining and expanding our intellectual property and maintaining compliance with the public company reporting requirements. We have continued to issue promissory notes to continue as a going concern. No assurances can be given that the Company will obtain financing, or otherwise successfully develop a business and operating plan or enter into an alternative relationship to commercialize the Company’s PAD products and technology.

Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on previously reported losses, total assets or stockholders equity.

 

Each New Note accrues interest at a rate of 10% per annum, payable in either cash or shares of Common Stock and matures on February 28, 2015. Each New Note is convertible, at the option of the holder thereof, into that number of shares of Common Stock equal to the outstanding principal balance of the New Note, plus accrued but unpaid interest (the “Outstanding Balance”), divided by $0.08 (the “Conversion Shares”). Additionally, in the event the Company completes an equity or equity-linked financing with gross proceeds to the Company of at least $1.5 million (a “Qualified Financing”), the Outstanding Balance of all New Notes will, at the discretion of each respective holder, either (i) convert into securities sold in the Qualified Financing, or (ii) automatically convert into Conversion Shares.

 

 

 

 

 

 

 

		September 30, 2014				December 31, 2013
Licensed patents and patent rights		$	50,000			$	50,000
Patents			41,004				41,004
NuRx licensed technology			13,200				13,200
Less: accumulated amortization			(73,540)				(67,112	)
Intangibles, net		$	30,664			$	37,092

Asset Categories		Estimated Useful Life in Years
Patents			17
Patents under licensing			10
Website development costs			3
Intangibles acquired in 2008 (weighted average)			15

 

Prepaid expenses:		September 30, 2014				December 31, 2013
Prepaid insurance		$	33,154			$	23,718
Other			317				6,500
Prepaid expenses		$	33,471			$	30,218
Property and equipment:
Computers and office furniture, fixtures and equipment		$	28,031			$	28,031
Machinery and equipment			5,475				5,475
Less: accumulated depreciation			(31,041)				(30,221	)
Property and equipment, net		$	2,465			$	3,285
Accrued expenses:
Other Accrued expenses			26,654				19,711
Accrued expenses		$	26,654				19,711

 

On May 1, 2014, the Company received and accepted a notice of conversion to, in accordance with the procedures set forth in the Certificate of Designation for the Series B Convertible Preferred Stock, convert 3,739,286 shares of Series B Preferred into the same number of shares of Common Stock.
 

On May 21, 2013, the Company authorized the issuance of 1.0 million shares of Common Stock to management as compensation for services with a fair value of $30,000.
 

On December 6, 2013, the Company authorized the issuance of 900,000 shares of Common Stock to management as compensation for services with a fair value of $9,000.
 

On May 1, 2014, the Company received and accepted a notice of conversion to, in accordance with the procedures set forth in the Certificate of Designation for the Series B Convertible Preferred Stock, convert 3,739,286 shares of Series B Preferred into the same number of shares of Common Stock.
 

During the nine months ended September 30, 2014, 140,000 stock options and 1,331,000 warrants to purchase the Company’s Common Stock expired.

 

 

 

 

Overview

 

Research and development costs for the three months ended September 30, 2014 and 2013 were $30,044 and $20,083, respectively.  The increase in research and development fees in the 2014 period is directly attributable to the costs associated with clinical trial expense in the 2014 period. Research and development costs for the nine months ended September 30, 2014 and 2013 were $51,960 and $23,294, respectively.  

During the three months ended September 30, 2014, the Company recorded $26,660 in non-cash other financing costs related to the assignment of FPMI Warrants in connection with the consulting service deferral extension with BHA.  During the nine months ended September 30, 2014 and 2013, the Company recorded non-cash other financing expenses related to the exchange of FPMI Warrants of $48,420 and $27,753, respectively.

 

Liquidity and Capital Resources

●	obtain adequate sources of funding to pay operating expenses and fund long-term business operations;
●	enter into a licensing or other relationship that allows the Company to commercialize its products;
●	manage or control working capital requirements by reducing operating expenses; and
●	develop new and enhance existing relationships with product distributors and other points of distribution for the Company’s products.

 

 

 

 

 

 

 

Exhibit		Description
31		Certification of Chief Executive Officer and Principal Financial and Accounting Officer required under Rule 13a-14(a) or Rule 15d-14(a) of the Securities and Exchange Act of 1934, as amended.
32		Certification of Chief Executive Officer and Principal Financial and Accounting Officer required under Rule 13a-14(a) or Rule 15d-14(a) of the Securities and Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350.
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema
101.CAL		XBRL Taxonomy Extension Calculation Linkbase
101.DEF		XBRL Taxonomy Extension Definition Linkbase
101.LAB		XBRL Taxonomy Extension Label Linkbase
101.PRE		XBRL Taxonomy Extension Presentation Linkbase

Date:  November 18, 2014	/s/ Shalom Hirschman
	Shalom Hirschman Principal Executive, Financial and Accounting Officer