Minnesota
|
33-1007393
|
|
(State
or other jurisdiction of
|
(I.R.S.
Employer
|
|
incorporation
or organization)
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Identification
No.)
|
|
2060 Centre Pointe Blvd., Suite
7,
|
Mendota Heights, MN
55120
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Large
accelerated filer ¨
|
Accelerated filer ¨
|
Non-accelerated
filer ¨
(Do not check if a smaller reporting company)
|
Smaller reporting company
x
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Page
No.
|
|||
PART
I. FINANCIAL INFORMATION
|
|||
Item
1. Condensed Financial Statements
|
3
|
||
Condensed Balance Sheets September 30, 2010 and December 31,
2009
|
3
|
||
|
|||
Condensed Statements of Operations for three-month and nine-month periods
ended September 30, 2010 and September 30, 2009
|
4
|
||
Statement of Stockholders’ Deficit from Inception to September 30, 2010 |
5
|
||
Condensed Statements of Cash Flows for the nine-month periods ended
September 30, 2010 and September 30, 2009
|
6
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||
Notes to Condensed Financial Statements
|
7
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||
Item
2. Management’s Discussion and Analysis of Financial Condition
and Results of Operations
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16
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||
Item
3. Quantitative and Qualitative Disclosures About Market
Risk
|
21
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||
Item
4. Controls and Procedures
|
21
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PART
II. OTHER INFORMATION
|
|||
Item
1. Legal Proceedings
|
22
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||
Item
1A. Risk Factors
|
22
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||
Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds
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23
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||
Item
3. Defaults Upon Senior Securities
|
23
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||
Item
4. [Removed and Reserved]
|
23
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||
Item
5. Other Information
|
23
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||
Item
6. Exhibits
|
23
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||
Signatures
|
24
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||
Exhibit
Index
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25
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||
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|||
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September
30,
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December
31,
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|||||||
2010
|
2009
|
|||||||
ASSETS
|
||||||||
Current
Assets:
|
||||||||
Cash
|
$ | 20,434 | $ | 16,632 | ||||
Accounts
receivable
|
- | 15,737 | ||||||
Prepaid
expense and other assets
|
10,494 | 3,801 | ||||||
Restricted
cash in escrow (See Note 4)
|
- | 103,333 | ||||||
Total
Current Assets
|
30,928 | 139,503 | ||||||
Fixed
assets, net
|
7,438 | 9,260 | ||||||
Intangibles,
net
|
141,532 | 141,532 | ||||||
Total
Assets
|
$ | 179,899 | $ | 290,295 | ||||
LIABILITIES AND SHAREHOLDERS'
DEFICIT
|
||||||||
Current
Liabilities:
|
||||||||
Current
portion of long term debt (See Note 8)
|
$ | 13,925 | $ | 13,620 | ||||
Current
portion of convertible debt
|
50,000 | 50,000 | ||||||
Accounts
payable
|
1,128,367 | 814,137 | ||||||
Shares
due investors under registration payment arrangement
|
- | 355,124 | ||||||
Accrued
expenses
|
384,325 | 201,490 | ||||||
Convertible
debenture
|
- | 10,000 | ||||||
Total
Current Liabilites
|
1,576,617 | 1,444,371 | ||||||
Long
term debt and convertible debt, net of discounts of $123,628 and $44,873
(See Note 7 and 8)
|
518,371 | 116,108 | ||||||
Liability
for equity-linked financial instruments (See Note 10)
|
134,943 | 1,071,847 | ||||||
Stockholders
Deficit:
|
||||||||
Common
stock, $.01 par value, 80,000,000 authorized, 13,573,719 and 11,383,211
outstanding
|
135,737 | 113,831 | ||||||
Additional
paid-in capital
|
4,799,777 | 3,573,506 | ||||||
Deficit
accumulated during development stage
|
(6,985,548 | ) | (6,029,368 | ) | ||||
Total
Shareholder' Deficit
|
(2,050,034 | ) | (2,342,031 | ) | ||||
Total
Liabilities and Shareholders' Deficit
|
$ | 179,899 | $ | 290,295 |
BIODRAIN
MEDICAL, INC.
|
(A
DEVELOPMENT STAGE COMPANY)
|
CONDENSED
STATEMENTS OF OPERATIONS
|
(Unaudited)
|
Period
From
|
||||||||||||||||||||
April
23, 2002
|
||||||||||||||||||||
(Inception)
|
||||||||||||||||||||
Three Months Ended
September,
|
Nine Months Ended
September,
|
To September 30,
|
||||||||||||||||||
2010
|
2009
|
2010
|
2009
|
2010
|
||||||||||||||||
Revenue
|
$ | - |
-
|
$ | 288 | $ | 15,737 | $ | 16,025 | |||||||||||
Cost
of goods sold
|
- |
-
|
140 | 7,450 | 7,140 | |||||||||||||||
Gross
margin
|
- | - | 148 | 8,287 | 8,885 | |||||||||||||||
General
and administrative expense
|
381,053 | 521,532 | 1,531,669 | 1,393,072 | 5,560,096 | |||||||||||||||
Operations
expense
|
55,649 | 156,523 | 165,308 | 351,449 | 1,066,182 | |||||||||||||||
Sales
and marketing expense
|
36,415 | 136,220 | 177,065 | 344,723 | 633,241 | |||||||||||||||
Interest
expense
|
33,873 | 24,689 | 107,580 | 64,009 | 397,220 | |||||||||||||||
Loss
(gain) on valuation of equity-linked financial instruments
|
(348,880 | ) | (65,949 | ) | (1,025,294 | ) | 370,474 | (662,306 | ) | |||||||||||
Total
expense
|
158,110 | 773,015 | 956,328 | 2,523,727 | 6,994,433 | |||||||||||||||
Net
income (loss) available to common shareholders
|
$ | (158,110 | ) | $ | (773,015 | ) | $ | (956,180 | ) | $ | (2,515,440 | ) | $ | (6,985,548 | ) | |||||
Loss
per common share basic and diluted
|
$ | (0.01 | ) | $ | (0.08 | ) | $ | (0.08 | ) | $ | (0.28 | ) | $ | (2.12 | ) | |||||
Weighted
average shares used in computation, basic and diluted
|
13,159,639 | 9,634,828 | 12,428,401 | 8,903,119 | 3,287,557 |
BIODRAIN
MEDICAL, INC.
|
(A
DEVELOPMENT STAGE COMPANY)
|
STATEMENT
OF STOCKHOLDERS' DEFICIT
|
PERIOD
FROM APRIL 23, 2002 (INCEPTION)
|
TO
SEPTEMBER 30, 2010
|
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,$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 & 8/8, $.0167 (6)
|
86,869 | 869 | 582 | 1,451 | ||||||||||||||||
Issuance
of common 10/19 & 23, $.0167 (7)
|
38,906 | 389 | 261 | 650 | ||||||||||||||||
Issuance
of common 12/01, $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 to 9/30, $.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 | 9,354 | 247,100 | 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 | 113,830 | 3,573,507 | (6,029,368 | ) | (2,342,030 | ) | |||||||||||||
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 May 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 in second quarter
|
$ | 96,613 | $ | 96,613 | ||||||||||||||||
Value
of equity-linked financial instruments issued
|
||||||||||||||||||||
in
connection with PPM in second quarter
|
$ | (31,332 | ) | $ | (31,332 | ) | ||||||||||||||
Value
of equity-linked financial instruments issued
|
||||||||||||||||||||
in
connection with PPM in third quarter
|
$ | (31,506 | ) | $ | (31,506 | ) | ||||||||||||||
Value
of equity instruments issued with debt in third quarter
|
$ | 15,553 | $ | 15,553 | ||||||||||||||||
Shares
issued in September 2010 under PPM, $.10
|
250,000 | 2,500 | $ | 22,500 | $ | 25,000 | ||||||||||||||
Shares
issued to consultants in third quarter at $.22 per share
|
488,860 | 4,889 | $ | 102,660 | $ | 107,549 | ||||||||||||||
Net
Loss
|
$ | (956,180 | ) | $ | (956,180 | ) | ||||||||||||||
Balance
9/30/2010
|
13,573,719 | 135,737 | $ | 4,799,777 | $ | (6,985,548 | ) | $ | (2,050,034 | ) |
BIODRAIN
MEDICAL, INC.
|
(A
DEVELOPMENT STAGE COMPANY)
|
CONDENSED
STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
April
23,
|
||||||||||||
2002
|
||||||||||||
Nine Months
|
(Inception)
|
|||||||||||
Ended
September 30,
|
To
September 30,
|
|||||||||||
2010
|
2009
|
2010
|
||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||
Cash
flow from operating activities:
|
||||||||||||
Net
loss
|
$ | (956,180 | ) | $ | (2,515,440 | ) | $ | (6,985,548 | ) | |||
Adjustments
to reconcile net loss to
|
||||||||||||
net
cash used in operating activities:
|
||||||||||||
Depreciation
|
1,822 | 2,434 | 5,783 | |||||||||
Vested
stock options and warrants
|
11,382 | 150,544 | 568,535 | |||||||||
Equity
instruments issued for management and consulting
|
655,621 | 398,905 | 1,192,026 | |||||||||
Stock
based registration payments
|
- | 355,124 | 355,124 | |||||||||
Conversion
of accrued liabilites to capital
|
- | 84,600 | 560,998 | |||||||||
Amortization
of debt discount
|
33,411 | 6,538 | 151,627 | |||||||||
(Gain)Loss
on valuation of equity-linked instruments
|
(1,025,294 | ) | 370,474 | (662,306 | ) | |||||||
Changes
in assets and liabilities:
|
||||||||||||
Accounts
receivable
|
15,737 | (15,737 | ) | - | ||||||||
Prepaid
expense and other
|
(6,692 | ) | (2,895 | ) | (10,493 | ) | ||||||
Notes
payable to shareholders
|
- | - | (14,957 | ) | ||||||||
Accounts
payable
|
314,228 | 188,916 | 1,128,366 | |||||||||
Accrued
expenses
|
182,835 | (8,980 | ) | 384,326 | ||||||||
Net
cash used in operating activities:
|
(773,129 | ) | (985,517 | ) | (3,326,519 | ) | ||||||
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
|
582,000 | - | 1,021,505 | |||||||||
Principal
payments on long term debt and convertible debt
|
(110,677 | ) | (10,124 | ) | (126,607 | ) | ||||||
Restricted
cash in escrow
|
103,333 | - | ||||||||||
Accrued
interest converted to stock
|
- | - | 87,360 | |||||||||
Issuance
of common stock
|
202,275 | 600,000 | 2,519,448 | |||||||||
Net
cash provided by financing activities
|
776,931 | 589,876 | 3,501,706 | |||||||||
Net
increase (decrease) in cash
|
3,802 | (395,641 | ) | 20,434 | ||||||||
Cash
at beginning of period
|
16,632 | 463,838 | - | |||||||||
Cash
at end of period
|
$ | 20,434 | $ | 68,197 | $ | 20,434 |
BIODRAIN
MEDICAL, INC.
|
(A
DEVELOPMENT STAGE COMPANY)
|
NOTES
TO CONDENSED FINANCIAL STATEMENTS
|
(Amounts
presented at and for the three months and nine months ended September 30,
2010 and
|
September
30, 2009 are unaudited)
|
Years
|
||
Computers
and office equipment
|
3
|
|
Furniture
and fixtures
|
|
8
|
NOTE
2 – DEVELOPMENT STAGE
OPERATIONS
|
Valuation
and accounting for options and
warrants
|
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 | 3,035,662 | 0.38 | ||||||||||||
Expired
|
(17,956 | ) | 1.67 | (8,979 | ) | 1.67 | ||||||||||
Outstanding
at September 30, 2010
|
1,628,218 | 0.28 | 10,399,496 | 0.46 |
Range
of Exercise Prices
|
Shares
|
Weighted
Average
Remaining
Life
|
||||||
Options
|
||||||||
$0.01
|
543,292 | 7.68 | ||||||
$0.35
|
875,000 | 2.87 | ||||||
$0.50
|
180,000 | 8.14 | ||||||
$1.67
|
29,926 | 1.27 | ||||||
Total
|
1,628,218 | |||||||
Warrants
|
||||||||
$0.02
|
71,826 | 3.70 | ||||||
$0.10
|
800,000 | 2.42 | ||||||
$0.17
|
250,000 | 4.94 | ||||||
$0.35
|
798,597 | 2.18 | ||||||
$0.46
|
6,403,610 | 1.29 | ||||||
$0.65
|
2,039,550 | 1.93 | ||||||
$1.67
|
35,913 | 1.20 | ||||||
Total
|
10,399,496 |
Year |
Shares
|
Price
|
||||||
2006
|
23,942 | 1.67 | ||||||
2007
|
5,984 | 1.67 | ||||||
2008
|
1,243,292 | .01-.35 | ||||||
2009
|
205,000 | .35-.50 | ||||||
2010
|
150,000 | .50 | ||||||
Total
|
1,628,218 | $ | .01-$1.67 |
Warrants:
Year
|
Shares
|
Price
|
||||||
2006
|
71,826 | .02-1.67 | ||||||
2007
|
28,502 | .35 | ||||||
2008
|
5,075,204 | .02-.46 | ||||||
2009
|
2,188,302 | .35-.65 | ||||||
2010
|
3,035,662 | .10-.65 | ||||||
Total
|
10,399,496 | $ | .02-$1.67 |
From
|
||||||||||||||||||||
Three
Months Ended
|
Nine
Months Ended
|
April
23, 2002
|
||||||||||||||||||
September
30,
|
September
30,
|
(Inception)
To
|
||||||||||||||||||
2010
|
2009
|
2010
|
2009
|
September
30, 2010
|
||||||||||||||||
Numerator
|
||||||||||||||||||||
Net
Loss available in basic and diluted calculation
|
$ | (158,110 | ) | $ | (773,015 | ) | $ | (956,180 | ) | $ | (2,515,440 | ) | $ | (6,985,548 | ) | |||||
Denominator
|
||||||||||||||||||||
Weighted
average common shares oustanding-basic
|
13,159,639 | 9,634,828 | 12,428,401 | 8,903,119 | 3,287,557 | |||||||||||||||
Effect
of dilutive stock options and warrants (1)
|
- | - | - | - | - | |||||||||||||||
Weighted
average common shares outstanding-diluted
|
13,159,639 | 9,634,828 | 12,428,401 | 8,903,119 | 3,287,557 | |||||||||||||||
Loss
per common share-basic and diluted
|
$ | (0.01 | ) | $ | (0.08 | ) | $ | (0.08 | ) | $ | (0.28 | ) | $ | (2.12 | ) |
|
(1)
The number of shares underlying options and warrants outstanding as of
September 30, 2010 and September 30, 2009 are 12,027,714 and 8,595,958,
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.
|
September
30,
2010
|
December
31,
2009
|
|||||||
(Unaudited)
|
||||||||
Deferred
Tax Asset:
|
||||||||
Net
Operating Loss
|
$ | 1,500,000 | $ | 1,278,000 | ||||
Total
Deferred Tax Asset
|
1,500,000 | 1,278,000 | ||||||
Less
Valuation Allowance
|
1,500,000 | 1,278,000 | ||||||
Net
Deferred Income Taxes
|
$ | — | $ | — |
September
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 September 30,
2010) to August 2011 when the remaining balance is payable. The note is
personally guaranteed by former executives of the Company.
|
13,925 | 24,601 | ||||||
Notes
payable to two individuals, net of discounts of $11,402 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.
|
88,598 | 82,562 | ||||||
Note
payable issued on October 26, 2009 to the parents of one the Company's
officers, net of a discount of $16,128 and $27,435 discount, with interest
at 8% to March 31, 2012 and convertible into shares of common stock at
$.50 per share.
|
83,871 | 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 50% of the weighted average closing bid price over any
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 $80,803. The note bears interest at 12% to
March 31, 2012, and is convertible into common stock at $.18 per
share.
|
119,197 | - | ||||||
Note
payable issued on August 2, 2010 to and institutional
investor. The note bears interest at 8%, matures May 4, 2011
and is convertible into common stock at 50% of the average of the three
lowest closing prices in any 10 day trading period.
|
50,000 | - | ||||||
Note
payable issued on September 16, 2010 to an institutional
investor. The note bears interest at 10%, matures March 15,
2012 and is convertible into common stock at $.18 per
share.
|
100,000 | - | ||||||
Note
payable issued on September 21, 2010 to the parents of one of our
officers, net of a discount of $15,294. The note bears interest
at 12%, matures March 30, 2012 and is convertible into common stock at
$.18 per shares
|
16,706 | - | ||||||
Total
|
572,296 | 179,728 | ||||||
Less
amount due within one year
|
63,925 | 63,620 | ||||||
Long-Term
Debt
|
$ | 508,371 | $ | 116,108 |
|
||||
2011
|
$ | 63,925 | ||
2012
|
$ | 642,000 | ||
2013
|
$ | 0 |
2010
|
$ | 29,000 | ||
2011
|
$ | 30,000 | ||
2012
|
$ | 30,000 | ||
2013
|
$ | 26,000 | ||
2014
|
$ | 0 |
Stock
price
|
$ | .22 to $.50 | ||
Exercise
price
|
$ | .17 to $.65 | ||
Expected
life
|
2.00
to 6.5
|
years | ||
Expected
volatility
|
59%
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
9/30/2010
|
|||||||||||||||||
January
1, 2009 Adoption
|
$ | 479,910 | $ | (390,368 | ) | $ | 870,278 | 799,779 | 70,498 | ||||||||||||
Warrants
issued in quarter ended 6/30/2009
|
169,854 | 20,847 | 149,007 | 129,312 | 19,695 | ||||||||||||||||
Warrants
issued in quarter ended 9/30/2009
|
39,743 | (738 | ) | 40,481 | 38,473 | 2,008 | |||||||||||||||
Warrants
issued in quarter ended 12/31/2009
|
12,698 | 617 | 12,081 | 10,202 | 1,879 | ||||||||||||||||
Subtotal
|
$ | 702,205 | $ | (369,642 | ) | $ | 1,071,847 | ||||||||||||||
Warrants
issued in quarter ended 3/31/2010
|
25,553 | 20,903 | 4,650 | ||||||||||||||||||
Warrants
issued in quarter ended 6/30/2010
|
31,332 | 26,393 | 4,939 | ||||||||||||||||||
Warrants
issued in quarter ended 9/30/2010
|
31,506 | 232 | 31,274 | ||||||||||||||||||
Total
|
$ | 790,506 | $ | 1,025,294 | $ | 134,943 |
BIODRAIN
MEDICAL, INC.
|
||
Date:
November 12, 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
|
|
3.1*
|
Articles of Incorporation, as amended. | |
3.2*
|
Bylaws, As Amended. | |
31.1*
|
Certification
of Principal Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
|
31.2*
|
Certification
of 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.
|
|
|
|
|
a.
|
General
Business purposes.
|
|
|
|
|
b.
|
To manufacture, buy, sell, deal
in, and to engage in, contact, and carry on the business of manufacturing,
buying, selling and dealing in, goods, wares and merchandise of every class and
description.
|
|
|
|
|
c.
|
To purchase, acquire, hold,
improve, sell, convey, assign, release, mortgage, encumber, lease, hire and deal
in and otherwise dispose of real and personal property of every kind, name
and nature, within or without the state, including stocks, securities and
obligations, and to loan money and take securities for the payment of all
sums due the corporation, and to sell, assign and release such securities,
and to take real and personal property by Will and
gift.
|
|
|
|
|
d.
|
To carry out the purposes
herein above set forth in any state, territory, district or possession of the United
States, or in any foreign country, to the extent that such purposes are not forbidden
by the laws thereof; and, in the case of any state, territory, district or
possession of the United States, or any foreign country, in which one or more
of such purposes are forbidden by law, to limit, in any certificate for application
to do business, the purpose or purposes which the corporation proposes to
carry on therein to such as are not forbidden by the law
thereof.
|
|
|
|
/s/
Lawrence W. Gadbaw
|
|
|
|
Lawrence W.
Gadbaw
|
|
|
|
/s/
Peter
L. Morawetz
|
|
|
|
Peter
L. Morawetz
|
|
|
|
/s/
Jeffery K. Drogue
|
|
|
|
j.j.a.w.w., LLC (In the person
of Jeffery K. Drogue, its Governor)
|
|
|
|
/s/
Gerald D. Rice
|
|
|
|
Gerald
D. Rice
|
|
Authorized
Shares: The total number of par shares which this
Corporation shall have authority to issue is 40,000,000 shares with a par
value of one cent ($.01) per share; all of such shares shall be common
stock.”
|
/s/ Gerald D. Rice
|
||
Jerry
Rice, Secretary
|
|
|
/s/ Alan Shuler | |
Alan Shuler, Secretary | |||
|
|
/s/ Kevin R. Davidson | |
Kevin R. Davidson, President and Chief | |||
Executive Officer | |||
|
|
|
(2) The
term”expenses” broadly construed shall include without limitation court
costs, attorneys’ fees, witness fees, amounts paid in settlement or
judgment and any other costs and expenses of any nature or kind incurred
in connection with any proceeding.
|
|
|
|
(3) The
term “corporation” shall include, in addition to the resulting
corporation, any constituent corporation (including any constituent)
absorbed in a consolidation or merger which, if its separate existence had
continued, would have had the power and authority to indemnify its
directors, officers, and employees or agents, so that any person who is or
was a director, officer, employee or agent of such constituent
corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, shall
stand in the same position under the provisions of this ARTICLE IV with
respect to the resulting or surviving corporation as he would have with
respect to such constituent corporation if its separate existence had
continued.
|
|
|
|
(4)
References to a “director,” “executive officer,” “officer,” “employee” or
“agent” of the corporation shall include, without limitation, situations
where such person is serving at the request of the corporation as,
respectively, a director, executive officer, officer, employee, trustee or
agent of another corporation, partnership, joint venture, trust or other
enterprise.
|
|
|
|
(5)
References to “other enterprises” shall include employee benefit plans;
references to “fines” shall include any excise taxes assessed on a person
with respect to an employee benefit plan; and references to “serving at
the request of the corporation” shall include any service as a director,
officer, employee or agent of the corporation which imposes duties on, or
involves services by, such director, officer, employee or agent with
respect to an employee benefit plan, its participants and beneficiaries;
of an employee benefit plan shall be deemed to have acted in a manner “not
opposed to the best interests of the corporation” as referred to in this
ARTICLE IV.
|
|
|
|
These By-Laws may be altered, amended, or
repealed by the Board of Directors subject to the power of the
stockholders, by the affirmative vote of a majority of the stockholders
entitled to vote, at any meeting, to change or repeal such By-Laws,
provided that notice of such proposed amendment shall have been given in
the notice of such meeting. The Board of Directors shall not make or alter
any By-Laws fixing their number, qualifications, or term of
office.
|
|
|
|
/s/ Lawrence W. Gadbaw
|
|
Lawrence W. Gadbaw, President
and CEO
|
|
|
|
/s/ Gerald D. Rice
|
|
Gerald
D. Rice, Vice-President, Secretary and Treasurer
|
|
|
|
/s/ Gerald D. Rice
|
|
Gerald
D. Rice, Secretary
|
1.
|
I
have reviewed this quarterly report on Form 10-Q of BioDrain Medical,
Inc.;
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
4.
|
The
registrant’s other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
a.
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
b.
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principals;
|
c.
|
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
d.
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting; and
|
5.
|
The
registrant’s other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting,
to the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent
functions):
|
a.
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information;
and
|
b.
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal control
over financial reporting.
|
Date:
November 12, 2010
|
/s/
Kevin R. Davidson
|
|
Kevin
R. Davidson
|
||
Chief
Executive Officer (Principal Executive Officer)
|
1.
|
I
have reviewed this quarterly report on Form 10-Q of BioDrain Medical,
Inc.;
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
4.
|
The
registrant’s other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principals;
|
c)
|
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
d)
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting; and
|
5.
|
The
registrant’s other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting,
to the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent
functions):
|
a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information;
and
|
b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal control
over financial reporting.
|
Date:
November 12, 2010
|
/s/
Kevin R. Davidson
|
|
Kevin
R. Davidson
|
||
Chief
Financial Officer (Principal Financial Officer)
|
Date:
November 12, 2010
|
/s/
Kevin R. Davidson
|
|
Kevin
R. Davidson
|
||
Chief
Executive Officer (Principal Executive Officer) and Chief Financial
Officer (Principal Financial Officer)
|