x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 2010 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File Number:
Registration Statement No. 333-155299
|
BioDrain
Medical, Inc.
|
Minnesota
|
33-1007393
|
|
(State
or other jurisdiction of
incorporation or organization) |
(I.R.S.
Employer
Identification No.) |
2060
Centre Pointe Blvd., Suite 7,
|
Mendota
Heights, MN 55120
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
651-389-4800
|
(Registrant’s
telephone number, including area
code)
|
_________________________________________________________________
|
(Former
name, former address and former fiscal year, if changed since last
report)
|
Large accelerated filer ¨ | Accelerated filer ¨ |
Non-accelerated filer ¨ (Do not check if a smaller reporting company) | Smaller reporting company x |
Page No.
|
||
PART
I. FINANCIAL INFORMATION
|
||
Item
1. Condensed Financial Statements
|
3
|
|
Condensed
Balance Sheets June 30, 2010 and December 31, 2009
|
3
|
|
Condensed
Statements of Operations for three-month and six-month periods
ended
|
||
June
30, 2010 and June 30, 2009
|
4
|
|
Condensed
Statements of Cash Flows for the six-month periods ended
|
||
June
30, 2010 and June 30, 2009
|
6
|
|
Notes
to Condensed Financial Statements
|
7
|
|
Item 2. Management’s
Discussion and Analysis of Financial Condition and
|
16
|
|
Results
of Operations
|
||
Item
3. Quantitative and Qualitative Disclosures About Market
Risk
|
21
|
|
Item
4T. Controls and Procedures
|
21
|
|
PART
II. OTHER INFORMATION
|
||
Item
1. Legal Proceedings
|
21
|
|
Item
1A. Risk Factors
|
21
|
|
Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds
|
22
|
|
Item
3. Defaults Upon Senior Securities
|
22
|
|
Item
4. [Removed and Reserved]
|
22
|
|
Item
5. Other Information
|
22
|
|
Item
6. Exhibits
|
22
|
|
Signatures
|
23
|
|
Exhibit
Index
|
24
|
|
EX-31.1
|
||
EX-32.1
|
June
30,
|
December
31,
|
|||||||
2010
|
2009
|
|||||||
ASSETS
|
||||||||
Current
Assets:
|
||||||||
Cash
|
$ | 8,834 | $ | 16,632 | ||||
Accounts
receivable
|
- | 15,737 | ||||||
Prepaid
expense and other assets
|
3,070 | 3,801 | ||||||
Restricted
cash in escrow (See Note4)
|
42,833 | 103,333 | ||||||
Total
Current Assets
|
54,737 | 139,503 | ||||||
Fixed
assets, net
|
8,046 | 9,260 | ||||||
Intangibles,
net
|
141,532 | 141,532 | ||||||
Total
Assets
|
$ | 204,315 | $ | 290,295 | ||||
LIABILITIES AND
SHAREHOLDERS' DEFICIT
|
||||||||
Current
Liabilities:
|
||||||||
Current
portion of long term debt (See Note 8)
|
$ | 13,620 | $ | 13,620 | ||||
Current
portion of convertible debt
|
- | 50,000 | ||||||
Accounts
payable
|
1,034,598
|
814,137 | ||||||
Shares
due investors under registration payment arrangement
|
- | 355,124 | ||||||
Accrued
expenses
|
325,682 | 201,490 | ||||||
Convertible
debenture (See Note 7)
|
- | 10,000 | ||||||
Total
Current Liabilites
|
1,373,900 | 1,444,371 | ||||||
Long
term debt and convertible debt, net of discounts
|
||||||||
of
$127,289 and $44,873 (See Note 7 and Note 8)
|
386,617 | 116,108 | ||||||
Liability
for equity-linked financial instruments (See Note 11)
|
452,318 | 1,071,847 | ||||||
Shareholders
Deficit:
|
||||||||
Common
stock, $0.01 par value, 80,000,000 authorized, 12,834,859 and
11,383,211 outstanding
|
128,349 | 113,831 | ||||||
Additional
paid-in capital
|
4,690,568 | 3,573,506 | ||||||
Deficit
accumulated during development stage
|
(6,827,438 | ) | (6,029,368 | ) | ||||
Total
Shareholder' Deficit
|
(2,008,521 | ) | (2,342,031 | ) | ||||
Total
Liabilities and Shareholders' Deficit
|
$ | 204,315 | $ | 290,295 |
Period
From
|
||||||||||||||||||||
April
23,
2002
|
||||||||||||||||||||
Three
Months Ended
|
Six Months
Ended
|
(Inception)
To
|
||||||||||||||||||
June,
|
June,
|
June
30,
|
||||||||||||||||||
2010
|
2009
|
2010
|
2009
|
2010
|
||||||||||||||||
Revenue
|
$ | - | $ | 15,737 | $ | 288 | $ | 15,737 | $ | 16,025 | ||||||||||
Cost
of goods sold
|
- | 7,450 | 140 | 7,450 | 7,140 | |||||||||||||||
Gross
margin
|
- | 8,287 | 148 | 8,287 | 8,885 | |||||||||||||||
General
and administrative expense
|
438,481 | 604,635 | 1,150,616 | 871,540 | 5,179,043 | |||||||||||||||
Operations
expense
|
44,924 | 70,613 | 109,659 | 194,926 | 1,010,533 | |||||||||||||||
Sales
and marketing expense
|
67,598 | 105,624 | 140,650 | 208,503 | 596,826 | |||||||||||||||
Interest
expense
|
59,428 | 24,455 | 73,707 | 39,320 | 363,347 | |||||||||||||||
Loss
(gain) on valuation of equity-linked
|
||||||||||||||||||||
financial
instruments
|
(563,865 | ) | (60,079 | ) | (676,414 | ) | 436,423 | (313,426 | ) | |||||||||||
Total
expense
|
46,566 | 745,248 | 798,218 | 1,750,712 | 6,836,323 | |||||||||||||||
Net
loss available to
|
$ | (46,566 | ) | $ | (736,961 | ) | $ | (798,070 | ) | $ | (1,742,425 | ) | $ | (6,827,438 | ) | |||||
common
shareholders
|
||||||||||||||||||||
Loss
per common share
|
||||||||||||||||||||
basic
and diluted
|
$ | 0.00 | $ | (0.08 | ) | $ | (0.07 | ) | $ | (0.20 | ) | $ | (2.30 | ) | ||||||
Weighted
average shares used in
|
||||||||||||||||||||
computation,
basic and diluted
|
12,353,500 | 8,910,676 | 12,056,722 | 8,531,200 | 2,969,772 |
Shares
|
Amount
|
Paid
in Capital
|
Deficit
|
Total
|
||||||||||||||||
Issuance
of common stock 9/1/02, $.0167 (1)
|
598,549 | $ | 5,985 | $ | 4,015 | $ | - | $ | 10,000 | |||||||||||
- | ||||||||||||||||||||
Issuance
of common 10/23/02, $1.67/share
|
2,993 | 30 | 4,970 | 5,000 | ||||||||||||||||
Net
loss
|
(51,057 | ) | (51,057 | ) | ||||||||||||||||
Balance
12/31/02
|
601,542 | $ | 6,015 | $ | 8,985 | $ | (51,057 | ) | $ | (36,057 | ) | |||||||||
Issuance
of common 2/12/03, $.0167 (2)
|
23,942 | 239 | 161 | 400 | ||||||||||||||||
Issuance
of common 6/11&12/03, $1.67 (3)
|
21,548 | 216 | 34,784 | 35,000 | ||||||||||||||||
Net
Loss
|
(90,461 | ) | (90,461 | ) | ||||||||||||||||
Balance
12/31/03
|
647,032 | $ | 6,470 | $ | 43,930 | $ | (141,518 | ) | $ | (91,118 | ) | |||||||||
Issuance
of common 5/25/04, $.0167 (4)
|
6,567 | 66 | 44 | 110 | ||||||||||||||||
Net
Loss
|
(90,353 | ) | (90,353 | ) | ||||||||||||||||
Balance
12/31/04
|
653,599 | $ | 6,536 | $ | 43,974 | $ | (231,871 | ) | $ | (181,361 | ) | |||||||||
Issuance
of common 12/14/05, $.0167 (5)
|
14,964 | 150 | 100 | 250 | ||||||||||||||||
Vested
stock options and warrants
|
2,793 | 2,793 | ||||||||||||||||||
Net
Loss
|
(123,852 | ) | (123,852 | ) | ||||||||||||||||
Balance
12/31/05
|
668,563 | $ | 6,686 | $ | 46,867 | $ | (355,723 | ) | $ | (302,170 | ) | |||||||||
Issuance
of common 5/16/06 & 8/8/06, $.0167 (6)
|
86,869 | 869 | 582 | 1,451 | ||||||||||||||||
Issuance
of common 10/19 & 23/06, $.0167 (7)
|
38,906 | 389 | 261 | 650 | ||||||||||||||||
Issuance
of common 12/01/06, $1.67 (8)
|
28,739 | 287 | 44,523 | 44,810 | ||||||||||||||||
Vested
stock options and warrants
|
13,644 | 13,644 | ||||||||||||||||||
Net
Loss
|
(273,026 | ) | (273,026 | ) | ||||||||||||||||
Balance
12/31/06
|
823,077 | $ | 8,231 | $ | 105,877 | $ | (628,749 | ) | $ | (514,641 | ) | |||||||||
Issuance
of common 1/30/07 @ 1.67 (9)
|
599 | 6 | 994 | 1,000 | ||||||||||||||||
Value
of equity instruments issued with debt
|
132,938 | 132,938 | ||||||||||||||||||
Capital
contributions resulting from waivers of debt
|
346,714 | 346,714 | ||||||||||||||||||
Vested
stock options and warrants
|
73,907 | 73,907 | ||||||||||||||||||
Net
loss
|
(752,415 | ) | (752,415 | ) | ||||||||||||||||
Balance
12/31/07
|
823,676 | $ | 8,237 | $ | 660,430 | $ | (1,381,164 | ) | $ | (712,497 | ) | |||||||||
Issuance
of common 6/11/08 to 9/30/08, $.35 (10)
|
4,552,862 | 45,528 | 1,547,974 | 1,593,502 | ||||||||||||||||
Shares
issued to finders, agents
|
2,012,690 | 20,127 | (20,127 | ) | - | |||||||||||||||
Shares
issued to pay direct legal fees
|
285,714 | 2,857 | (2,857 | ) | ||||||||||||||||
Issuance
of common due to antidilution provisions
|
205,899 | 2,059 | (2,059 | ) | - | |||||||||||||||
Shares
issued to pay investor relations services 6/23/08, $.35
|
250,000 | 2,500 | 85,000 | 87,500 | ||||||||||||||||
Vested
stock options and warrants
|
354,994 | 354,994 | ||||||||||||||||||
Capital
contributions resulting from waivers of debt
|
129,684 | 129,684 | ||||||||||||||||||
Net
loss
|
(1,762,628 | ) | (1,762,628 | ) | ||||||||||||||||
Balance
12/31/08
|
8,130,841 | $ | 81,308 | $ | 2,753,039 | $ | (3,143,792 | ) | $ | (309,445 | ) | |||||||||
Cumulative
effect of adoption of EITF 07-5
|
(486,564 | ) | 6,654 | (479,910 | ) | |||||||||||||||
Vested
stock options and warrants
|
111,835 | 111,835 | ||||||||||||||||||
Shares
issued 3/20/09 to pay for fund raising
|
125,000 | 1,250 | (1,250 | ) | - | |||||||||||||||
Shares
issued under PMM in April 2009, $.50
|
700,000 | 7,000 | 343,000 | 350,000 | ||||||||||||||||
Shares
issued under PPM in May 2009, $.50
|
220,000 | 2,200 | 107,800 | 110,000 | ||||||||||||||||
Shares
issued under PPM in June 2009, $.50
|
50,000 | 500 | 24,500 | 25,000 | ||||||||||||||||
Shares
issued under PPM in August 2009, $.50
|
80,000 | 800 | 39,200 | 40,000 | ||||||||||||||||
Shares
issued under PPM in September 2009, $.50
|
150,000 | 1,500 | 73,500 | 75,000 | ||||||||||||||||
Shares
issued to directors, management and consultant in August 2009,
$.50
|
797,810 | 7,978 | 390,927 | 398,905 | ||||||||||||||||
Shares
issued to finder in September 2009, $.50
|
100,000 | 1,000 | 49,000 | 50,000 | ||||||||||||||||
Capital
contributions resulting from waivers of debt
|
84,600 | 84,600 | ||||||||||||||||||
Value
of equity-linked financial instruments issued in connection with
PPMs
|
(222,296 | ) | (222,296 | ) | ||||||||||||||||
Value
of equity instruments issued with debt
|
30,150 | 30,150 | ||||||||||||||||||
Shares
issued to consultant for fund raising
|
30,000 | 300 | (300 | ) | - | |||||||||||||||
Shares
issued under PPM in November 2009, $.50
|
50,000 | 500 | 24,500 | 25,000 | ||||||||||||||||
Shares
issued upon conversion of debt and interest, $.27
|
935,446 | 9,355 | 247,099 | 256,454 | ||||||||||||||||
Shares
issued upon conversion of shareholder note, $.35
|
14,024 | 140 | 4,766 | 4,906 | ||||||||||||||||
Net
Loss
|
$ | (2,892,230 | ) | (2,892,230 | ) | |||||||||||||||
Balance
12/31/09
|
11,383,121 | $ | 113,831 | $ | 3,573,505 | $ | (6,029,368 | ) | $ | (2,342,031 | ) | |||||||||
Shares
issued in March 2010 under PPM, $.50
|
174,550 | 1,746 | 85,529 | 87,275 | ||||||||||||||||
Shares
issed to consultants for IR and consulting, $.50
|
374,090 | 3,741 | 183,304 | 187,045 | ||||||||||||||||
Vested
stock options and warrants
|
11,382 | 11,382 | ||||||||||||||||||
Value
of equity instruments issued for consulting services
|
354,602 | 354,602 | ||||||||||||||||||
Value
of equity-linked financial instruments issued in connection with PPM in
first quarter
|
(25,553 | ) | (25,553 | ) | ||||||||||||||||
Shares
issued in April 2010 under PPM, $.50
|
180,000 | 1,800 | 88,200 | 90,000 | ||||||||||||||||
Shares
issed in May 2010 to consultant, $.50
|
12,850 | 129 | 6,296 | 6,425 | ||||||||||||||||
Shares
issued in June 2010 to 2008 investors as a penalty for late registration
of 4,552,862 shares, $.50
|
710,248 | 7,102 | 348,022 | 355,124 | ||||||||||||||||
Value
of equity instruments issued with debt
|
96,613 | 96,613 | ||||||||||||||||||
Value
of equity-linked financial instruments issued in connection with PPM in
second quarter
|
(31,332 | ) | (31,332 | ) | ||||||||||||||||
Net
Loss
|
(798,070 | ) | (798,070 | ) | ||||||||||||||||
Balance
6/30/2010
|
12,834,859 | $ | 128,349 | $ | 4,690,568 | $ | (6,827,438 | ) | $ | (2,008,521 | ) |
April
23,
|
||||||||||||
2002
|
||||||||||||
Six Months
|
(Inception)
|
|||||||||||
Ended
June 30,
|
To
June 30,
|
|||||||||||
2010
|
2009
|
2010
|
||||||||||
|
|
|
||||||||||
Cash
flow from operating activities:
|
||||||||||||
Net
loss
|
$ | (798,070 | ) | $ | (1,742,425 | ) | $ | (6,827,438 | ) | |||
Adjustments
to reconcile net loss to
|
||||||||||||
net
cash used in operating activities:
|
||||||||||||
Depreciation
|
1,215 | 1,827 | 5,176 | |||||||||
Vested
stock options and warrants
|
11,382 | 81,675 | 568,535 | |||||||||
Equity
instruments issued for management and consulting services
|
548,072 | 1,084,477 | ||||||||||
Stock
based registration payments
|
- | 355,124 | ||||||||||
Conversion
of accrued liabilites to capital
|
- | 84,600 | 560,998 | |||||||||
Amortization
of debt discount
|
14,196 | 4,526 | 132,412 | |||||||||
(Gain)Loss
on valuation of equity-linked instruments
|
(676,414 | ) | 436,423 | (313,426 | ) | |||||||
Changes
in assets and liabilities:
|
||||||||||||
Accounts
receivable
|
15,737 | (15,737 | ) | - | ||||||||
Prepaid
expense and other
|
732 | 1,808 | (3,069 | ) | ||||||||
Notes
payable to shareholders
|
- | - | (14,957 | ) | ||||||||
Accounts
payable
|
220,459 | 152,294 | (1,034,597 | ) | ||||||||
Accrued
expenses
|
124,192 | 288,115 | 325,683 | |||||||||
Net
cash used in operating activities:
|
(538,498 | ) | (706,894 | ) | (3,091,888 | ) | ||||||
Cash
flow from investing activities:
|
||||||||||||
Purchase
of fixed assets
|
- | - | (12,258 | ) | ||||||||
Purchase
of intangibles
|
- | - | (142,495 | ) | ||||||||
Net
cash used in investing activities
|
- | - | (154,753 | ) | ||||||||
Cash
flow from financing activities:
|
||||||||||||
Proceeds
from long term and convertible debt
|
400,000 | - | 921,505 | |||||||||
Repayment
of convertible debt
|
(100,000 | ) | - | (100,000 | ) | |||||||
Principal
payments on long term debt
|
(7,075 | ) | (6,697 | ) | (279,005 | ) | ||||||
Restricted
cash in escrow
|
60,500 | (42,833 | ) | |||||||||
Debt
converted to common stock
|
- | - | 174,000 | |||||||||
Accrued
interest converted to stock
|
- | 87,360 | ||||||||||
Issuance
of common stock
|
177,275 | 485,000 | 2,494,448 | |||||||||
Net
cash provided by financing activities
|
530,700 | 478,303 | 3,255,475 | |||||||||
Net
increase (decrease) in cash
|
(7,798 | ) | (228,591 | ) | 8,834 | |||||||
Cash
at beginning of period
|
16,632 | 463,818 | - | |||||||||
Cash
at end of period
|
$ | 8,834 | $ | 235,227 | $ | 8,834 |
Years
|
|||
Computers
and office equipment
|
3
|
||
Furniture
and fixtures
|
5
|
Stock Options (1)
|
Warrants (1)
|
|||||||||||||||
Number of
Shares
|
Average
Exercise
Price
|
Number of
Shares
|
Average
Exercise
Price
|
|||||||||||||
Outstanding
at December 31, 2005
|
17,956
|
$
|
1.67
|
20,950
|
$
|
2.62
|
||||||||||
Issued
|
23,942
|
1.67
|
71,826
|
0.85
|
||||||||||||
Outstanding
at December 31, 2006
|
41,898
|
$
|
1.67
|
92,776
|
$
|
1.25
|
||||||||||
Issued
|
5,984
|
1.67
|
28,502
|
0.35
|
||||||||||||
Outstanding
at December 31, 2007
|
47,882
|
$
|
1.67
|
121,278
|
$
|
1.04
|
||||||||||
Issued
|
1,243,292
|
0.20
|
5,075,204
|
0.45
|
||||||||||||
Expired
|
(11,971
|
)
|
3.76
|
|||||||||||||
Outstanding
at December 31, 2008
|
1,291,174
|
$
|
0.26
|
5,184,511
|
0.45
|
|||||||||||
Issued
|
205,000
|
0.37
|
2,188,302
|
0.65
|
||||||||||||
Outstanding
at December 31, 2009
|
1,496,174
|
0.27
|
7,372,813
|
0.49
|
||||||||||||
Issued
|
150,000
|
0.50
|
2,154,550
|
0.38
|
||||||||||||
Outstanding
at June 30, 2010
|
1,646,174
|
0.29
|
9,527,363
|
0.46
|
(1)
|
Adjusted
for the reverse stock splits in total at June 6, 2008 and October 20,
2008. There were no options or warrants exercised in the
periods.
|
Year
|
Options
|
Fair Value
|
Fair value vested
|
|||||||||
2005
|
17,956
|
$
|
0.671
|
$
|
1,673
|
|||||||
2006
|
23,942
|
$
|
0.682
|
$
|
12,919
|
|||||||
2007
|
5,984
|
$
|
0.687
|
$
|
71,038
|
|||||||
2008
|
1,243,292
|
$
|
0.232
|
$
|
220,287
|
|||||||
2009
|
205,000
|
$
|
0.243
|
$
|
52,272
|
|||||||
2010
|
150,000
|
0.319
|
11,382
|
|||||||||
Total
|
1,646,174
|
$
|
0.247
|
$
|
369,571
|
Range of Exercise Prices
|
Shares
|
Weighted
Average
Remaining
Life
|
||||||
Options
|
||||||||
$0.01
|
$
|
543,292
|
$
|
7.94
|
||||
$0.35
|
875,000
|
2.37
|
||||||
$0.50
|
180,000
|
8.40
|
||||||
$1.67
|
47,882
|
1.01
|
||||||
Total
|
1,646,174
|
|||||||
Warrants
|
||||||||
$0.02
|
71,826
|
3.95
|
||||||
$0.10
|
800,000
|
2.67
|
||||||
$0.35
|
798,597
|
2.95
|
||||||
$0.46
|
5,772,498
|
1.32
|
||||||
$0.65
|
2,039,550
|
2.19
|
||||||
$1.67
|
44,892
|
1.19
|
||||||
Total
|
9,527,363
|
Stock
Options:
|
||||||||
Year
|
Shares
|
Price
|
||||||
2005
|
17,956
|
$
|
1.67
|
|||||
2006
|
23,942
|
1.67
|
||||||
2007
|
5,984
|
.35-1.67
|
||||||
2008
|
1,243,292
|
.01-.35
|
||||||
2009
|
205,000
|
.35-.50
|
||||||
2010
|
150,0000
|
.50
|
||||||
Total
|
1,646,174
|
$
|
.01-$1.67
|
Warrants:
|
Year
|
Shares
|
Price
|
||||||
2005
|
8,979
|
$
|
1.67
|
|||||
2006
|
71,826
|
.02-1.67
|
||||||
2007
|
28,502
|
.35
|
||||||
2008
|
5,075,204
|
.02-.46
|
||||||
2009
|
2,188,302
|
.35-.65
|
||||||
2010
|
2,154,550
|
.10-.65
|
||||||
Total
|
9,527,363
|
$
|
.02-$1.67
|
From
|
||||||||||||||||||||
April
23, 2002
|
||||||||||||||||||||
Three
Months Ended
|
Six
Months Ended
|
(Inception)
To
|
||||||||||||||||||
June
30,
|
June
30,
|
June
30,
|
||||||||||||||||||
2010
|
2009
|
2010
|
2009
|
2010
|
||||||||||||||||
Numerator
|
||||||||||||||||||||
Net
Loss available in basic and diluted calculation
|
$ | (46,566 | ) | $ | (736,961 | ) | $ | (798,070 | ) | $ | (1,742,425 | ) | $ | (6,827,438 | ) | |||||
Denominator
|
||||||||||||||||||||
Weighted
average common shares oustanding-basic
|
12,353,500 | 8,910,676 | 12,056,722 | 8,531,200 | 2,969,772 | |||||||||||||||
Effect
of dilutive stock options and warrants (1)
|
- | - | - | - | - | |||||||||||||||
Weighted
average common shares outstanding-diluted
|
12,353,500 | 8,910,676 | 12,056,722 | 8,531,200 | 2,969,772 | |||||||||||||||
Loss
per common share-basic and diluted
|
$ | 0.00 | $ | (0.08 | ) | $ | (0.07 | ) | $ | (0.20 | ) | $ | (2.30 | ) |
(1)
|
The
number of shares underlying options and warrants outstanding as of June
30, 2010 and June 30, 2009 are 11,173,537 and 8,305,780 respectively. The
effect of the shares that would be issued upon exercise of such options
and warrants has been excluded from the calculation of diluted loss per
share because those shares are
anti-dilutive.
|
June
30,
|
December 31
,
|
|||||||
2010
|
2009
|
|||||||
(Unaudited)
|
||||||||
Deferred
Tax Asset:
|
||||||||
Net
Operating Loss
|
$
|
1,453,000
|
$
|
1,278,000
|
||||
Total
Deferred Tax Asset
|
1,453,000
|
1,278,000
|
||||||
Less
Valuation Allowance
|
1,453,000
|
1,278,000
|
||||||
Net
Deferred Income Taxes
|
$
|
—
|
$
|
—
|
June
30,
2010
|
December 31,
2009
|
|||||||
Note
payable to bank in monthly installments of $1,275/including variable
interest at 2% above the prevailing prime rate (3.25% at June 30, 2010) to
August 2011 when the remaining balance is payable. The note is personally
guaranteed by former executives of the Company.
|
17,526
|
24,601
|
||||||
Notes
payable to two individuals, net of discounts of $13,414 and $17,438 with
interest only payments at 12% to March 2012 when the remaining balance is
payable. The notes are convertible into 285,715 shares of common stock in
the Company at $.35 per share.
|
86,586
|
82,562
|
||||||
Note
payable issued on October 26, 2009 to the parents of one the
Company's officers, net of a discount of $19,898 and $27,435
discount, with interest at 8% to March 31, 2012 and convertible into
200,000 shares of common stock at $.50 per share.
|
80,102
|
72,565
|
||||||
Notes
payable issued to two individuals in January, 2010. The notes
bear interest at 8%, mature March 31, 2012 and are convertible into shares
of common stock, at the election of the lender, at 50% of the weighted
average trading price over 10-consecutive days of trading.
|
100,000
|
-
|
||||||
Note
payable issued on June 12, 2010 to the parents of one of the
Company's officers, net of a discount of $93,978. The note
bears interest at 12% to March 31, 2012, and is convertible into common
stock at $.25 per share.
|
$ |
106,022
|
||||||
Total
|
390,237
|
179,728
|
||||||
Less
amount due within one year
|
13,620
|
63,620
|
||||||
Long-Term
Debt
|
$
|
376,617
|
$
|
116,108
|
2010
|
$
|
13,620
|
||
2011
|
$
|
3,906
|
||
2012
|
$
|
510,000
|
||
2013
|
$
|
0
|
||
2014
|
$
|
0
|
2010
|
$ |
29,000
|
||
2011
|
$ |
30,000
|
||
2012
|
$ |
30,000
|
||
2013
|
$ |
26,000
|
||
2014
|
$ |
0
|
Stock
price
|
$.35
to $.50
|
|
Exercise
price
|
$.46
to $.65
|
|
Expected
life
|
2.00
to 6.5 years
|
|
Expected
volatility
|
63%
to 67%
|
|
Assumed
dividend rate
|
-%
|
|
Risk
free interest rate
|
.710%
to 2.97%
|
Initial Value
|
Annual Gain (Loss)
|
Value at 12/31/2009
|
YTD 2010 Gain
|
Value at 6/30/2010
|
||||||||||||||||
January
1, 2009 Adoption
|
$ | 479,910 | $ | (390,368 | ) | $ | 870,278 | 527,567 | 342,711 | |||||||||||
Warrants
issued in quarter ended 6/30/09
|
169,854 | 20,847 | 149,007 | 86,355 | 62,652 | |||||||||||||||
Warrants
issued in quarter ended 9/30/09
|
39,743 | (738 | ) | 40,481 | 30,020 | 10,461 | ||||||||||||||
Warrants
issued in quarter ended 12/31/09
|
12,698 | 617 | 12,081 | 5,604 | 6,477 | |||||||||||||||
Total
|
$ | 702,205 | $ | (369,642 | ) | $ | 1,071,847 | |||||||||||||
Warrants
issued in quarter ended 3/31/10
|
25,553 | 10,893 | 14,660 | |||||||||||||||||
Warrants
issued in quarter ended 6/30/10
|
31,332 | 15,974 | 15,357 | |||||||||||||||||
Total
|
$ | 676,414 | $ | 452,318 |
|
•
|
Adverse
economic conditions;
|
•
|
Inability
to raise sufficient additional capital to operate our
business;
|
•
|
Unexpected
costs and operating deficits, and lower than expected sales and revenues,
if any;
|
•
|
Adverse
results of any legal
proceedings;
|
•
|
The
volatility of our operating results and financial
condition;
|
•
|
Inability
to attract or retain qualified senior management personnel, including
sales and marketing personnel;
and
|
•
|
Other
specific risks that may be alluded to in this
report.
|
BIODRAIN MEDICAL, INC. | |||
Date:
August 13, 2010
|
By:
|
/s/ Kevin R. Davidson | |
President,
Chief Executive Officer and
Chief
Financial Officer
(Principal
Executive Officer and
Principal
Financial and Accounting Officer)
|
Exhibit No.
|
Description
|
|
Certification
of Principal Executive Officer and Principal Financial and Accounting
Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
|
||
32.1*
|
Certification
of Principal Executive Officer and Principal Financial and Accounting
Officer pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|