form10q.htm

0001013762-10-001739.txt : 20100730 0001013762-10-001739.hdr.sgml : 20100730 20100730124645 ACCESSION NUMBER: 0001013762-10-001739 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20100630 FILED AS OF DATE: 20100730 DATE AS OF CHANGE: 20100730 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Flex Fuels Energy, Inc. CENTRAL INDEX KEY: 0001370030 STANDARD INDUSTRIAL CLASSIFICATION: METAL MINING [1000] IRS NUMBER: 205242826 STATE OF INCORPORATION: NV FISCAL YEAR END: 0926 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-52601 FILM NUMBER: 10980388 BUSINESS ADDRESS: STREET 1: 502 EAST JOHN STREET CITY: CARSON CITY STATE: NV ZIP: 89706 BUSINESS PHONE: 604-685-7552 MAIL ADDRESS: STREET 1: 502 EAST JOHN STREET CITY: CARSON CITY STATE: NV ZIP: 89706 FORMER COMPANY: FORMER CONFORMED NAME: Malibu Minerals Inc. DATE OF NAME CHANGE: 20060724 10-Q 1 form10q.htm FLEX FUELS FORM 10-Q form10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

¨	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

FLEX FUELS ENERGY, 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 xNo ¨

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 ¨ 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 44,525,964 shares of the issuer’s common stock outstanding as of July 29, 2010.

FLEX FUELS ENERGY, INC.

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2010

TABLE OF CONTENTS

		PAGE

	PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements	3

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23

Item 4T.	Controls and Procedures	23

	PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	24

Item 1A.	Risk Factors	24

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24

Item 3.	Defaults Upon Senior Securities	24

Item 4.	(Removed and Reserved)

Item 5.	Other Information	25

Item 6.	Exhibits	28

	SIGNATURES	29

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

	Page
Condensed Consolidated Balance Sheets as of June 30, 2010 (unaudited) and December 31, 2009	4

Condensed Consolidated Statements of Operations for the three and six month periods ended June 30, 2010 and June 30, 2009 (unaudited) and the period from March 10, 2006 (date of inception) to June 30, 2010 (unaudited)	5

Condensed Consolidated Statement of Stockholders’ Equity for the period from March 10, 2006 (date of inception) through June 30, 2010 (unaudited)	6

Condensed Consolidated Statements of Cash Flows for the six month periods ended June 30, 2010 and June 30, 2009 (unaudited) and for the period from March 10, 2006 (date of inception) to June 30, 2010 (unaudited)	7

Notes to Condensed Consolidated Financial Statements (unaudited)	8

FLEX FUELS ENERGY, INC. AND SUBSIDIARIES
(A Development Stage Company)
CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30,			December 31,
	2010			2009
	(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	5,311,404		$	6,771,218
Prepaid expenses		17,067			16,668
Value added tax and other receivables		26,204			10,965
Current assets of discontinued operations		9,267			16,701

Total Current Assets		5,363,942			6,815,552

Property and equipment		7,591			-

Security deposits and other assets		26,876			20,461

Total Assets	$	5,398,409		$	6,836,013

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
Accounts payable	$	366,051		$	347,934
Accrued expenses		41,286			20,645
Taxation and social security		26,860			10,173
Liabilities of discontinued operations		-			704

Total Current Liabilities		434,197			379,456

Total Liabilities		434,197			379,456

Commitments and contingencies

Stockholders' Equity:
Common stock, $0.001 par value, 500,000,000 shares authorized,
44,525,964 shares issued and outstanding at June 30, 2010 and December 31, 2009		44,526			44,526
Additional Paid-in Capital		42,213,234			41,987,541
Accumulated other comprehensive income (loss) - foreign currency translation adjustment		310,179			656,441
Deficit accumulated during development stage		(37,292,738	)		(36,023,459	)
Total Flex Fuels Energy, Inc. Stockholders' Equity		5,275,201			6,665,049
Non Controlling Interest		(310,989	)		(208,492	)
Total stockholders' equity		4,964,212			6,456,557

Total Stockholders' Equity and Liabilities	$	5,398,409		$	6,836,013

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

FLEX FUELS ENERGY, INC. AND SUBSIDIARIES

(A Development Stage Company)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)


													For the Period
													from March 10, 2006
	For the three months						For the six months						(date of inception) through
	ended June 30,						ended June 30,						June 30,
	2010			2009			2010			2009			2010

Revenue	$	-		$	-		$	-		$	-		$	-

Operating expenses:
Mining exploration costs		-			-			-			-			21,726
Selling, general and administrative charges		708,679			374,053			1,375,695			767,402			6,556,879
Impairment loss - mineral claims		-			-			-			-			10,000

Total operating expense		708,679			374,053			1,375,695			767,402			6,588,605

Operating loss		(708,679	)		(374,053	)		(1,375,695	)		(767,402	)		(6,588,605	)

Other income (expense):
Interest and other income		7,126			422			10,985			422			79,370

Loss from continuing operations, before provision for income taxes		(701,553	)		(373,631	)		(1,364,710	)		(766,980	)		(6,509,235	)

Provision for income tax		-			-			-			-			-

Loss from continuing operations		(701,553	)		(373,631	)		(1,364,710	)		(766,980	)		(6,509,235	)

Gain/(Loss) on discontinued operations, net of tax		27,596			(4,792,986	)		8,508			(5,091,722	)		(31,079,430	)

Net loss	$	(673,957	)	$	(5,166,617	)	$	(1,356,202	)	$	(5,858,702	)	$	(37,588,665	)

Net loss attributable to the non-controlling interest		(38,148	)		(61,550	)		(86,923	)		(61,550	)	$	(295,927	)
Subsidiary preferred dividend attributable to the non-controlling interest		8,325			-			8,325			-			8,325

Net loss attributable to Flex Fuels Energy, Inc. Common Shareholders	$	(627,484	)	$	(5,105,067	)	$	(1,260,954	)	$	(5,797,152	)	$	(37,284,413	)

Loss per common share from continuing operations attributable to Flex Fuels Energy, Inc. common shareholders - basic and fully diluted	$	(0.02	)	$	(0.01	)	$	(0.03	)	$	(0.01	)	$	(0.10	)
Loss per common share from discontinued operations attributable to Flex Fuels Energy, Inc. common shareholders - basic and fully diluted		(0.00	)		(0.07	)		0.00			(0.08	)		(0.50	)
Net loss per common share attributable to Flex Fuels Energy, Inc. common shareholders - basic and fully diluted	$	(0.01	)	$	(0.08	)	$	(0.03	)	$	(0.09	)	$	(0.60	)

Weighted average number of common
shares outstanding - basic and fully diluted		44,525,964			64,713,096			44,525,964			67,033,875			61,783,172

Comprehensive Loss:
Net loss attributable to Flex Fuels Energy, Inc. Common Shareholders	$	(627,484	)	$	(5,105,067	)	$	(1,260,954	)	$	(5,797,152	)	$	(37,284,413	)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment, net of tax		(9,652	)		6,553			(353,521	)		6,553			303,432
Foreign currency translation adjustment attributable to discontinued operations, net of tax		-			4,243,015			-			4,097,587			-
Total other comprehensive loss, net of tax		(637,136	)		(855,499	)		(1,614,475	)		(1,693,012	)		(36,980,981	)
Comprehensive (income) loss attributable to the non-contolling interest		465			(6,553	)		7,259			(6,553	)		6,747
Comprehensive loss attributable to the Flex Fuels Energy Inc. Common Shareholders	$	(636,671	)	$	(862,052	)	$	(1,607,216	)	$	(1,699,565	)	$	(36,974,234	)

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

FLEX FUELS ENERGY, INC. AND SUBSIDIARIES
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM MARCH 10, 2006 (DATE OF INCEPTION) THROUGH JUNE 30, 2010
										Deficit			Accumulated
										Accumulated			Other
							Additional			During			Comprehensive			Noncontrolling			Stockholders'
	Shares			Amount			Paid-in Capital			Development Stage			Income/(Loss)			Interest			Equity
Shares issued to founders at $0.001 per share, March 10, 2006		60,000,000		$	60,000		$	(50,000	)	$	-		$	-		$	-		$	10,000

Fair value of shares issued in lieu of payment for service on December 18, 2006		412,038			412			47,659			-			-			-			48,071

Shares issued at $0.1167 per share in private placement on December 29, 2006		14,142,846			14,143			1,620,857			-			-			-			1,635,000

Net Loss											(1,381,198	)		-			-			(1,381,198	)
Balance at December 31, 2006		74,554,884			74,555			1,618,516			(1,381,198	)		-			-			311,873

Shares of common stock retired on May 11, 2007		(51,685,723	)		(51,686	)		51,686			-			-			-			-

Fair value of compensatory element of insider stock not retired in May 2007		-			-			307,978			-			-			-			307,978

Fair value of shares issued in lieu of payment for services at $0.90 per share on May 22, 2007		137,344			137			123,382			-			-			-			123,519

Fair value of shares acquired at below market value on May 25, 2007		-			-			178,300			-			-			-			178,300

Shares of common stock issued at $0.90 per share in private placement on May 29, 2007		16,582,621			16,583			13,375,296			-			-			-			13,391,879

Fair value of shares issued on acquisition of Flex Fuels Energy Ltd on May 29, 2007		24,854,477			24,854			22,344,175			-			-			-			22,369,029

Shares of common stock issued at $0.90 per share in private placement on July 29, 2007		4,871,838			4,872			3,935,317			-			-			-			3,940,189

Reserve held for shares to be issued for compensation on December 31, 2007		-			-			34,125			-			-			-			34,125

Comprehensive income		-			-			-			-			43,960			-			43,960

Net Loss		-			-			-			(23,911,383	)		-			-			(23,911,383	)
Balance at December 31, 2007		69,315,441			69,315			41,968,775			(25,292,581	)		43,960			-			16,789,469

Common stock issued for compensation on May 13, 2008		65,000			65			24,310			-			-			-			24,375

Comprehensive loss		-			-			-			-			(4,130,487	)		-			(4,130,487	)

Net loss		-			-			-			(4,163,437	)		-			-			(4,163,437	)
Balance at December 31, 2008		69,380,441			69,380			41,993,085			(29,456,018	)		(4,086,527	)		-			8,519,920

Shares of common stock bought back on June 5, 2009		(16,989,136	)		(16,989	)		(114,036	)		-			-			-			(131,025	)

Shares of common stock bought back on October 9, 2009		(7,865,341	)		(7,865	)		(55,058	)		-			-			-			(62,923	)

Stock based compensation		-			-			163,550			-			-			-			163,550

Comprehensive income		-			-			-			-			4,742,968			512			4,743,480

Net loss		-			-			-			(6,567,441	)		-			(209,004	)		(6,776,445	)
Balance at December 31, 2009		44,525,964			44,526			41,987,541			(36,023,459	)		656,441			(208,492	)		6,456,557

Sale of common stock by subsidiary		-			-			-			-			-			10			10

Stock based compensation		-			-			217,368			-			-			-			217,368

Comprehensive Loss		-			-			-			-			(346,262	)		(7,259	)		(353,521	)

Subsidiary preferred dividend		-			-			8,325			-			-			(8,325	)		-

Net Loss		-			-			-			(1,269,279	)		-			(86,923	)		(1,356,202	)

Balance at June 30, 2010		44,525,964		$	44,526		$	42,213,234		$	(37,292,738	)	$	310,179		$	(310,989	)	$	4,964,212

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

FLEX FUELS ENERGY, INC. AND SUBSIDIARIES

(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

							For the Period
							from March 10, 2006
							(date of inception) through
	For the Six Months Ended June 30,						June 30,
	2010			2009			2010
Cash flows from operating activities:
Net loss	$	(1,356,202	)	$	(5,858,702	)	$	(37,588,665	)
Net income (loss) from discontinued operations		8,508			(5,091,722	)		(31,079,430	)
Net loss from continuing operations		(1,364,710	)		(766,980	)		(6,509,235	)

Adjustments to reconcile net loss to net cash
used in operating activities:
Impairment loss - mineral claims		-			-			10,000
Shares of common stock issued or acquired in lieu of payment for services		-			-			716,369
Stock based compensation		217,368			-			380,918
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(3,911	)		5,901			(46,401	)
Sales tax and interest receivable		(12,766	)		(14,045	)		(58,285	)
Security deposit and other assets		(4,503	)		-			(30,577	)
Accounts payable		(5,284	)		148,253			428,855
Accrued expenses		43,018			(81,905	)		166,554
Taxation and social security payable		17,136			7,513			66,744
Total Adjustments		251,058			65,717			1,634,177

Net cash (used in) provided by operating activities of continuing operations		(1,113,652	)		(701,263	)		(4,875,058	)

Cash flows from investing activities:
Purchase of property and equipment		(7,538	)		-			(7,538	)
Purchase of mineral claim		-			-			(10,000	)
Net cash used in investing activities of continuing operations		(7,538	)		-			(17,538	)

Cash flows from financing activities:
Repurchase of common stock		-			(131,025	)		(193,948	)
Proceeds from sale of noncontrolling interest		10			-			10
Proceeds from sale of shares of common stock in private placements, net of issueance costs		-			-			18,977,068
Net cash provided by (used in) financing activities of continuing operations		10			(131,025	)		18,783,130

Cash flows from discontinued operations:
Cash provided by (used in) operating activities of discontinued operations		14,452			678,743			(7,784,540	)
Cash used in investing activities of discontinued operations		-			(117,859	)		(1,062,015	)
Cash provided by (used in) financing activities of discontinued operations		-			-			-
Effects of exchange rate changes on cash from discontinued operations		-			-			-
Net cash flows from discontinued operations		14,452			560,884			(8,846,555	)

Effects of exchange rate changes on cash from continuing operations		(353,086	)		7,275			267,425

Net (decrease) increase in cash and cash equivalents		(1,459,814	)		(264,129	)		5,311,404

Cash and cash equivalents, beginning of period		6,771,218			7,382,778			-

Cash and cash equivalents, end of period	$	5,311,404		$	7,118,649		$	5,311,404

Supplementary disclosure of cash flow information:
Cash paid during the period for:
Interest	$	-		$	-		$	-
Income tax	$	-		$	-		$	-

Supplemental schedule of non-cash investing and financing activities:
Continuing Operations:
Shares of common stock issued or acquired in lieu of payment for services	$	-		$	-		$	716,369
Total non-cash investing and financing activities from continuing operations	$	-		$	-		$	716,369

Discontinued Operations:
Transaction costs in connection with asset acquistion	$	-		$	-		$	22,897,759
Office equipment acquired on credit / accounts payable	$	-		$	-		$	1,760
Asset-prepaid expense acquire in connection with FFE Ltd.	$	-		$	-		$	449
Liabilities-accounts payable assumed in connection with FFE Ltd.	$	-		$	-		$	4,516
Liabilities-accrued expenses assumed in connection with FFE Ltd.	$	-		$	-		$	50,464
Total non-cash investing and financing activities from discontinued operations	$	-		$	-		$	22,954,948

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

Flex Fuels Energy, Inc. and Subsidiaries

(A Development Stage Company)

Notes to Condensed Consolidated Financial Statements

June 30, 2010

(Unaudited)

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 June 30, 2010 and the results of operations and cash flows for the three and six month periods ended June 30, 2010 and 2009 and for the period from March 10, 2006 (date of inception) through June 30, 2010. 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 six month period ended June 30, 2010 are not necessarily indicative of the results to be expected for any subsequent quarter or the entire year ending December 31, 2010.

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, 2009, included in the Company’s annual report on Form10-K filed with the SEC on March 22, 2010.

The condensed consolidated financial statements as of December 31, 2009 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

Flex Fuels Energy, Inc. (“Flex Fuels”, “we”, “us”, “our”) (formerly 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. Flex Fuels has staked two mineral claims containing 33 cell claim units totaling approximately 683 hectares. These mining claims are hereafter referred to as the “Malibu Gold Mine Property” or the “Malibu Gold Property”. Flex Fuels purchased the Malibu Gold Property in March of 2006. The Malibu Gold Property is located approximately 110 km northwest of Vancouver, British Columbia.

Flex Fuels has expended minimal assets on the Malibu Gold property since acquisition.

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 promotion of Flex Fuels business of exploration and discovery of gold, minerals, mineral deposits and reserves, Flex Fuels 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. was engaged in the development of the business of manufacturing and distributing Oil Seed Rape (“OSR”) products.

Effective June 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 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 ord erly basis. The historical operations and costs of FFE Ltd. and its assets and liabilities at June 30, 2010 and December 31, 2009 and for the three and six month periods ended June 30, 2010 and 2009 and for the period from March 10, 2006 (date of inception) through June 30, 2010 are classified as discontinued operations in the accompanying unaudited condensed consolidated financial statements.

On May 1, 2009, we entered into an Investment Agreement (the “Investment Agreement”) with WDX Organisation Limited (“WDX”), a corporation incorporated under the laws of England and Wales, and the founding shareholders of WDX (the “Founders”), the owners of all of the issued and outstanding shares of WDX. 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. 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. WDX is the developer of a technology designed to mitigate currency risk. On August 14, 2009 we provi ded a further £150,000 (approximately $247,800) to WDX 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 WDX and increased our equity position in WDX. On March 8, 2010 we loaned an additional £150,000 (approximately $224,055) to WDX and executed certain call options and further increased our equity position in WDX. The loans were the result of our ongoing investment in WDX as contemplated by our May 1, 2009 Investment Agreement with WDX.

Altogether, these transactions have resulted in a total loan of £600,000 (approximately $904,000) to WDX and the ownership of 93% of WDX by the Company.

On February 25, 2010, we entered into a Subscription and Shareholders Agreement with Bio-AMD Holdings Limited (“Bio-AMD”), a United Kingdom company, and the managers of Bio-AMD, under which we acquired a 63% interest in Bio-AMD for £865,000 British Pounds Sterling (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 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 Point of Care (“POC”) diagnost ic space. Bio-AMD owns three patents and three patent applications on technologies which it expects to enable it to develop highly accurate, low cost, hand held electronic diagnostic devices capable of reading third party assays. If successfully developed, Bio-AMD expects to license its technologies and devices to international manufacturers and distributors.

Flex Fuels Energy, Inc., WDX, a majority-owned subsidiary, Bio-AMD, a majority-owned subsidiary and FFE Ltd, are hereafter collectively referred to as “Flex Fuels”, “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 is a development stage entity and 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 for the period from March 10, 2006 (date of inception) through June 30, 2010. Additionally, the Company has negative cash flows from operations since its date of inception and has an accumulated deficit of $37,292,738 at June 30, 2010. These factors raise substantial doubt about the Company’s ability to continue as a& #160;going concern.

The Company’s ability to continue 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 acquisition endeavors and 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.

Development stage entity

The Company is considered to be a development stage entity, as defined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 915. The Company has not generated any revenues to date, has incurred significant expenses and has sustained recurring losses. Consequently, its operations are subject to all the risks inherent in the establishment of a new business enterprise. For the period from March 10, 2006 (date of inception) through June 30, 2010, the Company has accumulated losses of $37,292,738 (of which $31,079,430 has been incurred by the discontinued operations).

Principles of consolidation

The unaudited condensed consolidated financial statements include the accounts of Flex Fuels Energy, Inc., FFE Ltd, a wholly owned subsidiary including the FFE Ltd. Subsidiaries (consisting of four inactive companies), WDX (a 93% owned subsidiary as of June 30, 2010) and Bio-AMD (a 63% owned subsidiary as of June 30, 2010). 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.

The 7% third party ownership of WDX and 37% third party ownership of Bio-AMD at June 30, 2010 is recorded as noncontrolling interests in the consolidated financial statements.

Reclassifications

Certain reclassifications have been made to prior year’s unaudited condensed consolidated financial statements and notes thereto for comparative purposes to conform with current year’s presentation, primarily related to the discontinued operations of FFE Ltd. These reclassifications have no effect on previously reported results of operations.

Foreign currency translation

The Company’s reporting currency is US Dollars. Flex Fuels functional currency is US Dollars. The accounts of the Company’s wholly-owned subsidiary, FFE Ltd. and of its 93% owned subsidiary, WDX, and its 63% owned subsidiary, Bio-AMD, are maintained using the local currency (Great British Pound) as the functional currency. Monetary assets and liabilities are translated into U.S. Dollars at balance sheet date 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 cu rrency are included in the consolidated statements of operations.

As a result of the discontinuance of FFE Ltd’s operations, we have reclassified the foreign currency translation adjustment loss of $4,051,638 related to FFE Ltd. from accumulated other comprehensive loss and recognized as loss on disposal/abandonment of the investment in FFE Ltd. or as a liquidation of the investment in FFE Ltd. under the caption loss from discontinued operations in the consolidated financial statements during the quarter ended June 30, 2009 (see Note 3). Subsequent to June 30, 2009 we have recorded a foreign currency translation adjustment gain of $77,270 from discontinued operations (including gains of $30,973 and $23,132 during the three and six months ended June 30, 2010, respectively).

Basic and diluted loss per share

We utilize ASC 260, “Earnings Per Share” for calculating the basic and diluted loss per share. In accordance with ASC 260, the basic and diluted loss per share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding. Diluted net loss per share is computed similar to basic loss per share except that the denominator is adjusted for the potential dilution that could occur if stock options, warrants, and other convertible securities were exercised or converted into common stock. Potentially dilutive securities were not included in the calculation of the diluted loss per share as their effect would be anti-dilutive. The Company has 10,100,000 common stock equivalents at June 3 0, 2010 and none at June 30, 2009. For the three and six months ended June 30, 2010 these potential shares were excluded from the shares used to calculate diluted earnings per share as their inclusion would reduce net loss per share.

Fair value of financial instruments

In April 2009, we adopted accounting guidance which requires disclosures about fair value of financial instruments in interim financial statements as well as in annual financial statements.

Our short-term financial instruments, including cash, receivables, prepaid expenses and other assets, accounts payable and other liabilities, consist primarily of instruments without extended maturities, the fair value of which, based on management’s estimates, reasonably approximate their book value.

Income taxes

The Company utilizes ASC 740 “Income Taxes” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income.

Concentrations of Credit Risk

The Company maintains cash and cash equivalents with major financial institutions. Cash held in UK bank accounts is insured by the Financial Services Authority (“FSA”) up to £50,000 at June 30, 2010 (approximately $75,000 at June 30, 2010) at each institution for each entity. At times, such amounts held may exceed the FSA insured limits. The uninsured cash bank balances were approximately $5,000,000 and $6,692,000 at June 30, 2010 and December 31, 2009, respectively. The Company has not experienced any loss on these accounts. The balances are maintained in demand accounts to minimize risk.

Stock-based compensation

The Company accounts for its stock based compensation under ASC 718 “Compensation – Stock Compensation” which was adopted in 2006, using the fair value based method. Under this method, compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. This guidance establishes standards for the accounting for transactions in which an entity exchanges it equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments.

Non-controlling Interests

The 7% third party ownership of WDX and 37% third party ownership of Bio-AMD at June 30, 2010 are recorded as noncontrolling interests in the consolidated financial statements.

For the six months ended June 30, 2010 the Non-controlling Interests are summarized as follows:
	Amount
Balance at December 31, 2009	$	(208,492	)
Third party investment		10
Non-controlling interest’s share of losses		(86,923	)
Non-controlling interest’s share of comprehensive income/(loss)		(7,259	)
Non-controlling interest’s share of preferred dividend		(8,325	)
Balance at June 30, 2010	$	(310,989	)

New Accounting Pronouncements Effective January 1, 2010

In June 2009, the FASB issued new accounting guidance which will require more information about the transfer of financial assets where companies have continuing exposure to the risks related to transferred financial assets. This guidance is effective at the start of a company’s first fiscal year beginning after November 15, 2009, or January 1, 2010 for companies reporting earnings on a calendar-year basis. The adoption of this guidance did not have an impact on our consolidated financial position or results of operations.

In June 2009, the FASB issued new accounting guidance which will change how a company determines when an entity that is insufficiently capitalized or is not controlled through voting (or similar rights) should be consolidated. Under this guidance, determining whether a company is required to consolidate an entity will be based on, among other things, an entity's purpose and design and a company's ability to direct the activities of the entity that most significantly impact the entity's economic performance. This guidance is effective at the start of a company’s first fiscal year beginning after November 15, 2009, or January 1, 2010 for companies reporting earnings on a calendar-year basis. The adoption of this guidance did not have an impact on our consolidated financial position or results of operations.

Recently Issued Accounting Standards

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 consolidated financial statements.

Note 3 – Discontinued Operations

Effective June 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 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 ord erly basis. The historical operations and costs of FFE Ltd. and its assets and liabilities at June 30, 2010 and December 31, 2009 are classified as discontinued operations in the accompanying unaudited condensed consolidated financial statements.

The primary components of the amounts reported as discontinued operations are summarized as follows:

Loss from discontinued operations (unaudited):

	Three Months ended June 30,						Six Months ended June 30,						Date of Inception to
	2010			2009			2010			2009			June 30, 2010
Loss from discontinued operations, net of tax	$	(3,377	)	$	(201,898	)	$	(14,624	)	$	(500,634	)	$	(3,183,031	)

Loss on disposal/abandonment of discontinued operations:

Impairment loss on capitalized plant under construction
		-			-			-			-			(458,730	)
Loss on abandonment of assets		-			(539,450	)		-			(539,450	)		(565,714	)
Transaction costs incurred
in connection with acquisition		-			-			-			-			(22,897,587	)
Foreign currency translation adjustment
related to discontinued operations		30,973			(4,051,638	)		23,132			(4,051,638	)		(3,974,368	)

Total income (loss) on disposal/abandonment of
discontinued operations, net of tax		30,973			(4,591,088	)		23,132			(4,591,088	)		(27,896,399	)

Income (loss) from discontinued operations	$	27,596		$	(4,792,986	)	$	8,508		$	(5,091,722	)	$	(31,079,430	)

Assets and liabilities of discontinued operations:


	June 30, 2010 (Unaudited)		December 31, 2009
Assets:
Cash	$	6,327	$	7,260
Prepaid expenses		-		8,581
Receivables		2,940		860
Current assets of discontinued operations	$	9,267	$	16,701

Liabilities:
Accrued expenses	$	-	$	704
Total liabilities of discontinued operations	$	-	$	704

NOTE 4 – Acquisitions

Bio-AMD Holdings Limited Acquisition

The 37% of Bio-AMD not owned by us is owned by Dr. Nasser Djennati (12.33%), Dr. Andrew Mitchell (12.33%) and Robert Galvin (12.33%). Bio-AMD’s board of directors presently consists of Drs. Djennati and Mitchell and Mr. Galvin and may be expanded to provide for a fourth director to be appointed by us. Drs. Djennati and Mitchell and Mr. Galvin also serve as Bio-AMD’s managers. Mr. Galvin is also an officer and director of ours but did not participate in the determination to proceed with the Bio-AMD acquisition.

Note 5 - Commitments and Contingencies

Consulting agreements

The Company has entered into consulting agreements with outside contractors, certain of whom are also the Company’s stockholders 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 $129,319 and $92,321 in consulting fees to these individuals for the three months ended June 30, 2010 and 2009, respectively, and $256,801 and $124,748 for the six months ended June 30, 2010 and 2009, respectively. The Company incurred $912,184 in fees to these individuals for the period from March 10, 2006 (date of inception) through June 30, 2010.

Litigation

On July 21, 2009 we commenced an action in the Nevada Court against our former corporate counsel, Mayer Brown International, LLP (“Mayer Brown”) claiming relief for general and special damages. On October 20, 2009 the Nevada Court dismissed the action, determining that any dispute should be conducted in the U.K. courts.

Accordingly, the Company wrote to Mayer Brown on April 9, 2010, in compliance with the Professional Negligence Pre-Action Protocol applicable in the UK, informing Mayer Brown of the Company’s proposed action to seek recovery of losses, damages and costs in the U.K. There is no certainty of any outcome at this time.

Note 6 – Subsequent Events

WDX

On July 23, 2010 we entered into a Subscription Agreement with our majority owned subsidiary, WDX, and the founders of WDX under which we purchased 500,000 preference shares of WDX (the “Preference Shares”) at a price of one British Pound per share or an aggregate of 500,000 British Pounds (approximately $750,000). The Preference Shares earn in priority to any other class of stock of WDX, 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 WDX stock in the event of a sale, liquidation or listing of WDX. Upon liquidation, sale or listing and after repayment of the outsta nding loans made by us to WDX, other liabilities of WDX 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 WDX.

The Subscription Agreement also provided for WDX to allot up to an aggregate of 16,900 C Ordinary Shares of WDX to employees, directors and consultants of WDX to secure their continued service to WDX and incentivize them in the performance thereof. An aggregate of 14,061 C Ordinary Shares were issued, for nominal consideration, to four persons on July 23, 2010, each of whom is a director of WDX, including the three incumbent management founders of WDX and Robert Galvin. Mr. Galvin received 1,736 C Ordinary Shares. Mr. Galvin also serves as our chief financial officer and treasurer and as one of our directors. The issuance of the 14,061 C Ordinary Shares reduced our ownership in WDX from approximately 93% to approximately 77.54%. If the remaining 2,839 C Ordinary Shares eligible for issuance are issued, our ow nership of WDX will be reduced to 75%.

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”, &# 8220;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 consolidated financial statements and the accompanying notes included elsewhere in this Quarterly Report on Form 10-Q.

Overview

Flex Fuels Energy, Inc. (“Flex Fuels”, “we” or “us”) (formerly 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 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 a 63% interest in Bio-AMD. Bio-AMD is intended to form the main focus of our operations going forward. Bio-AMD is a medical technology company in the rapidly expanding Point Of Care (“POC”) diagnostic space. Bio-AMD owns several patents and patent applications on technologies expected to be developed by Bio-AMD into low cost hand-held electronic diagnostic devices able to read third party assays. See Part II, Item 5, Other Information – Bio-Alternative Medical Devices.

On May 1, 2009 we entered into an Investment Agreement (the “Investment Agreement”) and related agreements with WDX Organisation Limited (“WDX”), a corporation incorporated under the laws of England and Wales, and the founding shareholders of WDX (the “Founders”), the owners of all of the issued and outstanding shares of WDX, pursuant to which we have acquired a 93% interest in WDX. See Part II, Item 5, Other Information – Currency Risk Mitigation Business.

We have staked two mineral claims containing 33 cell claim units totaling approximately 683 hectares referred to herein as the “Malibu Gold Mine Property” or the “Malibu Gold Property”. We purchased the Malibu Gold Property in March of 2006. The Malibu Gold Property is located approximately 110 km northwest of Vancouver, British Columbia, and 75 km north of Sechelt, BC. The property is situated on the south side of Queen’s Reach on upper Jervis Inlet, at the entrance to Princess Louisa Inlet. Access to the property is available via plane from Vancouver or Sechelt, or by boat from Egmont or Pender Harbor on the Sechelt Peninsula. See Part II, Item 5, Other Information – Malibu Gold Property.

Effective June 5, 2009, after having carefully evaluated all options, we determined to abandon our proposed oil seed business to be conducted by our wholly owned subsidiary, Flex Fuels Energy Limited (“FFE Ltd.”) as we no longer consider the business to be economically viable on either a go alone or partnered basis. As discussed in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2009, the proposed project initiated by prior management involving the establishment of an oil seed crushing plant at Cardiff by FFE Ltd. was compromised by constant delays, sub-optimal 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. 60;Accordingly, we determined that our best course of action was to preserve value by winding down the oil seed operations of FFE Ltd. which has been done on an orderly basis, the FFE Ltd. subsidiary now being effectively dormant.

As a consequence of the decision to wind down the operations of our subsidiary, FFE Ltd., we have reported the results of FFE Ltd. as “discontinued operations” in the financial statements covered in this quarterly filing for the period ended June 30, 2010. 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 into our Bio-AMD and WDX subsidiaries, as described above.

Results of Operations

Loss from Continuing Operations

We incurred loss from continuing operations of $701,553 and $1,364,710 (excluding the losses on discontinued operations) for the three and six month periods ended June 30, 2010 compared to loss from continuing operations of $373,631 and $766,980 (excluding the loss on discontinued operations) for the three and six month periods ended June 30, 2009.

The increase in loss from continuing operations for the three and six month periods ended June 30, 2010 (excluding the losses on discontinued operations) was primarily due to 1) Stock based compensation which is a non-cash item ($149,521 and $217,368 in the three and six month periods ended June 30, 2010 as compared to $0 and $0 in the three and six month periods ended June 30, 2009), 2) Consultancy Fees consisting mainly of amounts to our directors and internal accounting support who are classified as consultants ($129,319 and $256,801 in the three and six month periods ended June 30, 2010 as compared to $92,321 and $124,748 in the three and six month periods ended June 30, 2009), 3) Directors Remuneration for employees of WDX and Bio-AMD ($107,793 and $164,126 in the three and six m onth periods ended June 30, 2010 as compared to $14,416 and $71,370 in the three and six month periods ended June 30, 2009),and the ongoing legal costs associated with the legal actions as discussed in Part II, Item 1, “Legal Proceedings,” ($123,405 and $302,879 in the three and six month periods ended June 30, 2010 as compared to $132,166 and $245,800 in the three and six month periods ended June 30, 2009).

We incurred loss from continuing operations of $6,509,235 (excluding the loss on discontinued operations of $31,079,430) for the period from March 10, 2006 (date of inception) through June 30, 2010.

Loss from Discontinued Operations

We incurred a gain from discontinued operations of $27,596 or $0.00 per share and $8,508 or $0.00 per share, for the three and six month periods ended June 30, 2010 as compared to a loss from discontinued operations of $4,792,986 or $0.07 per share and $5,091,722 or $0.08 per share, for the three and six month periods ended June 30, 2009.

The increase in gain from discontinued operations for the three and six month periods ended June 30, 2010 was primarily due to adjustment of the accumulated foreign currency translation adjustment related to FFE Ltd. as a result of the discontinuance of FFE Ltd’s operations and recognized as a loss from disposal/abandonment or liquidation of the investment in FFE Ltd. on the date of discontinuance.

We incurred a loss from discontinued operations of $31,079,430 or $0.50 per share, for the period from March 10, 2006 (date of inception) through June 30, 2010 primarily due to the loss on disposal/abandonment of FFE Ltd. as discontinued operations, which amounted to $27,896,399 (consisted of loss on disposal/abandonment of a) assets of $565,714, b) transaction costs incurred in connection with acquisition of FFE Ltd. of $22,897,587 and c) removal of the accumulated foreign currency translation adjustment of $3,974,368 related to FFE Ltd. as a result of the discontinuance of FFE Ltd’s operations and recognized as a loss from disposal/abandonment or liquidation of the investment in FFE Ltd).

Revenues

We have not generated any revenues from operations for the period from March 10, 2006 (date of inception) through June 30, 2010 and anticipate that we will not generate any revenues until 2011.

Net Loss

We incurred net losses in the amount of $673,957 or $0.02 per share and $1,356,202 or $0.03 per share for the three and six month periods ended June 30, 2010 as compared to a net loss of $5,166,617 or $0.08 per share and $5,858,702 or $0.09 per share for the three and six month periods ended June 30, 2009 as discussed above. We incurred a net loss in the amount of $37,588,665 or $0.60 per share for the period from March 10, 2006 (date of inception) through June 30, 2010.

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 for potential acquisitions, 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 31, 2007 (net of legal fees of $444,654) by way of three separate private placements of shares of common stock. The total net funds raised of $18,977,068 since inception through June 30, 2010 have been used principally as follows: (a) $1,383,039 in payroll and administrative expenses; (b) $2,620,551 in legal fees; (c) $887,630 in consulting fees; (d) $844,676 in professional fees in connection with our financial reporting requirements; (e) and $7,538 in purchase of property and equipment. At June 30, 2010, we had available cash balances of $5,311,404 which are held in interest bearing bank accounts.

At June 30, 2010, we had cash and cash equivalents of $5,311,404, other current assets consisting of value added tax and other receivables, prepaid expenses , and current assets of discontinued operations of $52,538 and current liabilities of $434,197, 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 as we are a development stage company. At June 30, 2009, we had cash and cash equivalents of $7,118,649, other current assets consisting of prepaid expenses, value added tax, other receivables and current assets of discontinued operations of $50,641 and current liabilities of $539,913, consisting of accounts payable, accrued expenses, and taxation and social security and the remaining liabilities of the discontinued operations.

Continuing Operations:

Net Cash (Used in) Provided By Operating Activities

Net cash used in operating activities of continuing operations was $1,113,652 for the six months ended June 30, 2010, as compared to $701,263 for the six months ended June 30, 2009. The increase was primarily due to an increase in net loss due to additional expenditure within WDX and Bio-AMD. During the period from March 10, 2006 (date of inception) through June 30, 2010, we used net cash in operating activities of continuing operations of $4,875,058, which mainly was used for legal, consulting fees, professional fees and payroll and administrative expense.

Net Cash Used in Investing Activities

During the six months ended June 30, 2010, we used net cash in investing activities of continuing operations of $7,538 primarily for the property and equipment acquired by Bio-AMD start up. We did not utilize any cash in investing activities of continuing operations during the three months ended June 30, 2009. During the period from March 10, 2006 (date of inception) through June 30, 2010, we used net cash in investing activities of continuing operations of $17,538 which is comprised of the purchase of mineral claims of $10,000 and the property and equipment acquired by Bio-AMD of $7,538.

Net Cash (Used in) Provided by Financing Activities

We did not raise any funds through financing activities of continuing operations during the six month period ended June 30, 2010 and 2009. During the period from March 10, 2006 (date of inception) through June 30, 2010, we received net cash provided by financing activities of continuing operations of $18,783,130 ($18,977,068 received from private placements and net of $131,025 and $62,923 used to repurchase our common stock from certain shareholders in June 2009 and October 2009, respectively).

Discontinued Operations:

We have reclassified FFE Ltd. as discontinued operations for all periods presented in the accompanying unaudited condensed consolidated financial statements and throughout this quarterly report to provide readers the information necessary to an understanding of our consolidated financial condition, changes in financial condition and results of operations. Accordingly, we have reclassified the cash flows from discontinued operations for cash provided by (used in) operating, investing and financing activities of discontinued operations. We used net cash from discontinued operations of $8,846,555 during the period from March 10, 2006 (date of inception) through June 30, 2010.

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. Our unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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 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 account ing 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.

Development Stage Company

The Company is considered to be a development stage entity, as defined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 915.

Going Concern

The 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 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 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 consolidated financial statements include the accounts of Flex Fuels Energy, Inc. and Flex Fuels Energy Limited (“FFE Ltd.”), a wholly owned subsidiary including the FFE Ltd. Subsidiaries (consisting of four inactive companies), WDX Organisation Ltd. (a 93% owned subsidiary as of June 30, 2010) and Bio-AMD Holdings Ltd. (a 63% owned subsidiary as of June 30, 2010). All significant intercompany transactions and balances have been eliminated in consolidation. The 7% third party ownership of WDX Organisation Ltd. and the 37% third party ownership of Bio-AMD Holdings Ltd (both as at June 30, 2010) are recorded as non-controlling interests in the 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 whi ch 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.

Stock-Based Compensation

Impairment of Long-Lived Assets

The Company follows ASC 360, "Property, Plant and Equipment" which requires that long-lived assets and certain identifiable intangibles held and used by the Company be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses, or a forecasted inability to achieve break-even operating results over an extended period. The Company evaluates the recoverability of long-lived assets based upon forecasted undiscounted cash flows. Should impairment in value be indicated, the carrying value of the long-lived assets and certain identifiable intangibles will be adjusted, based on estimates of future discounted cash flows resulting from the use and ultima te disposition of the asset. ASC 360 also requires assets to be disposed of be reported at the lower of the carrying amount or the fair value less disposal costs.

Income Taxes

Foreign Currency Translation

The Company’s reporting currency is US Dollars. Flex Fuels functional currency is US Dollars. The accounts of the Company’s wholly-owned subsidiary, FFE Ltd, of its 93% owned subsidiary, WDX and of its 63% owned subsidiary, Bio-AMD Holdings Ltd., are maintained using the local currency (Great British Pound) as the functional currency. Monetary assets and liabilities are translated into U.S. Dollars at balance sheet date 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 functiona l currency are included in the consolidated statements of operations.

Recent accounting pronouncements

New Accounting Pronouncements Effective January 1, 2010

Recently Issued Accounting Standards

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4T. 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 June 30, 2010 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 June 30, 2010 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 June 30, 2010, 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

Accordingly, the Company wrote to Mayer Brown on April 9, 2010 in compliance with the Professional Negligence Pre-Action Protocol informing Mayer Brown of the Company’s proposed action to seek recovery of losses, damages and costs in the U.K. There is no certainty of any outcome at this time.

From time to time we may be a defendant and plaintiff in various other legal proceedings arising in the normal course of our business. Except as disclosed above, 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 known litigation or liabilities involving the operators of our properties that could affect our operations. Furthermore, as of the date of this Annual 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 June 30, 2010.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. (REMOVED AND RESERVED)

ITEM 5. OTHER INFORMATION

Bio-Alternative Medical Devices

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 $1,335,000) 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). The purchase price is to be applied to the development of the Bio-AMD business.

Bio-AMD is intended to form the main focus of our operations going forward. The Bio-AMD core, which may be further expanded, is expected to enable us to optimally apply our capital in an established, high growth sector and significantly reduce our risk profile.

Bio-AMD is a medical technology company in the rapidly expanding Point Of Care (“POC”) diagnostic sector. Bio-AMD owns three patents and has a further three patent applications for technologies expected to be developed by Bio-AMD into low cost hand-held electronic diagnostic devices able to read third party assays. Bio-AMD expects to license these technologies and devices to international manufacturers and distributors.

Initial technologies slated for development by Bio-AMD include:

·	A low manufacturing cost, qualitatively advanced, digital read-out home pregnancy test;

·	A POC prothrombin time monitor using low cost and user-friendly technology to enable patient based, anticoagulant drug therapy monitoring;

·	A Digital Strip Reader (“DSR”) able to perform POC rapid assay tests at a low cost in areas such as the cardiac treatment monitoring market; and

·	A highly accurate Magnetic Particle Reader (“MPR”), able to perform POC tests for multiple indications at a low cost.

POC devices offer rapid near patient diagnostic testing, reducing costs and improving clinical outcomes. The POC market is growing rapidly. There is clear demand for rapid, intuitive and easy to use, robust handheld technologies at an effective cost. POC testing accounts for an estimated 33% of the US$35 billion global in-vitro diagnostic testing market. Diagnostic testing accounts for a very low proportion of healthcare expenditure worldwide, yet influences around two thirds of healthcare decisions.

Bio-AMD is managed by experienced personnel, expert in the development of technically advanced, low cost POC devices. Our CFO, Robert Galvin, is actively involved in the financial management of Bio-AMD and the development of the Bio-AMD business plan.

WDX – Currency Risk Mitigating Business

On May 1, 2009 we entered into an Investment Agreement (the “Investment Agreement”) with WDX Organisation Limited (“WDX”), and the founding shareholders of WDX (the “Founders”), the owners of all of the issued and outstanding shares of WDX. 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. The Investment Agreement, Loan Agreement and Funding Agreement are hereinafter collectively referred to as the “Agreements”. As at March 31, 2010, we held 93% of the outstanding share capital of WDX on a fully diluted basis.

WDX is the developer of a technology designed to mitigate currency risk known as the Wocu. The Wocu is effectively a “World Currency” quotation derived by a WDX proprietary algorithm from the currency pair market prices of the world’s twenty largest economies, weighted by International Monetary Fund Gross Domestic Product figures of individual countries and outputted in real time.

On September 10, 2009 a patent application was made to the United States Patent and Trademark Office designed to protect WDX’s computer implemented method for determining the value of a global currency unit using real time currency values and International Monetary Fund Gross Domestic Product data to weight those values.

The Wocu algorithm was completed in June 2009 and live prices are being outputted. WDX 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.

The Agreements provided for us to make loans to WDX in the minimum amount of approximately $225,510 and the maximum amount of approximately $902,040 and receive shares in WDX constituting a minimum of 51% and a maximum of 73% of WDX’s outstanding share capital on a fully diluted basis. The Agreements also contained conditions which were required to be satisfied by WDX in connection with the loans. WDX’s failure to satisfy such conditions (the “Performance Conditions”) had the potential to result in our receiving rights to acquire up to an additional 20% of WDX on a fully diluted basis, or 93% in total. As at March 31, 2010, we had increased our stake in WDX through the exercising of certain clauses in the original inv estment agreement as described above, which consequently increased our holding to 93% of the outstanding share capital on a fully diluted basis.

On July 23, 2010 we entered into a Subscription Agreement with WDX, and the founders of WDX under which we purchased 500,000 preference shares of WDX (the “Preference Shares”) at a price of one British Pound per share or an aggregate of 500,000 British Pounds (approximately $750,000). The Preference Shares earn in priority to any other class of stock of WDX, a cumulative dividend equal to 5% of the subscription price of such Preference Shares per annum. The Subscription Agreement also provided for WDX to allot up to an aggregate of 16,900 C Ordinary Shares of WDX to employees, directors and consultants of WDX to secure their continued service to WDX and incentivize them in the performance thereof. An aggregate of 14,061 C Ordinar y Shares were issued, for nominal consideration, to four persons on July 23, 2010, each of whom is a director of WDX. The issuance of the 14,061 C Ordinary Shares reduced our ownership in WDX from approximately 93% to approximately 77.54%. If the remaining 2,839 C Ordinary Shares eligible for issuance are issued, our ownership of WDX will be reduced to 75%.

We believe that the provision of these funds, and the revised capital structure, will enable our subsidiary to further promote the Wocu and take advantage of the considerable interest being shown in the Wocu licensing products.

Malibu Gold Property

Property Acquisition Details

On March 27, 2006, we acquired a mineral license for the Malibu Gold Property from Mr. James Laird, a former director and stockholder, for $10,000. Since non-Canadian individuals or companies cannot directly hold mineral licenses in British Columbia, Mr. Laird holds the license on behalf of the Company under a trust agreement entered into on November 28, 2007. The Trust Agreement remains in force and can be transferred by Flex Fuels without any requirement to notify or obtain the further consent of Mr. Laird.

Mining Claims

The Malibu Gold Property comprises two MTO mineral claims containing 33 cell claim units totaling 683.445 hectares.

BC Tenure #	Work Due Date	Staking Date	Total Area (Ha.)
525215	Jan. 12, 2014	Jan. 12, 2006	165.685
592273	Sep. 30, 2011	Sept. 30, 2008	517.760

Both properties are without known reserves and the proposed program is exploratory in nature.

Plan for Property

In connection with our turnaround plan and related entry into the Medical Point Of Care diagnostics sector, we are examining options for the Malibu Gold Property including a further survey, or divestment in order to realize value. No decision has been made at this time

FFE Ltd.

FFE Ltd. proposed to engage in the business of manufacturing and distributing oil seed rape (“OSR”) products. In addition, it had been anticipated that FFE Ltd. would also construct an associated biodiesel production facility with an associated Combined Heat and Power plant (“CHP”). Following a change in our board of directors on December 12, 2008, we commenced a strategic review of the proposed FFE Ltd. OSR processing facility (the “Project”). The review identified potential enhancements to the Project, providing clearer definition to the OSR processing facility. A modified construction plan and scale was developed and submitted for study by FFE Ltd's preferred engineering contractor. The plan provided for reversion to the original preferred and permitted site and the construction of a co-located CHP to deliver lower energy costs and to attract potential partners. Effective June 5, 2009, after having carefully evaluated all options, we determined to abandon our proposed OSR 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 by us was compromised by constant delays, sub-optimal 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 did on an orderly basis. The historical operations and costs of FFE Ltd. and its assets and liabilities at December 31, 2009 hav e been reclassified as discontinued operations.

As a consequence of the decision to wind down the operations of our main subsidiary FFE Ltd, we have reported the results of FFE Ltd. as “discontinued operations” in the consolidated financial statements covered in this Quarterly Report for the quarter ended March 31, 2010. In addition, we have reclassified the historical operations of FFE Ltd. and its assets and liabilities as discontinued operations. As a result of the discontinuance of FFE Ltd’s operations, we have removed our accumulated other comprehensive loss-foreign currency translation adjustment related to FFE Ltd. and recognized as loss on disposal/abandonment of investment in FFE Ltd. or as a liquidation of the investment in FFE Ltd. for the quarter ended March 31, 2010 under the caption, loss from discontinued operations. 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 shareholder’s funds, and to reflect the investment made into our subsidiaries, Bio-AMD and WDX, as described above.

ITEM 6. EXHIBITS

In reviewing the agreements included as exhibits to this Form 10-Q, please remember that they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about the Company or the other parties to the agreements. The agreements may contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the parties to the applicable agreement and:

•	should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;

•	have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;

•	may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and

•	were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.

Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. Additional information about the Company may be found elsewhere in this Form 10-Q and the Company’s other public filings, which are available without charge through the SEC’s website at http://www.sec.gov.

The following exhibits are included as part of this report:

Exhibit No.		Description

31.1		Certification of Principal Executive Officer pursuant to Section 302 the Sarbanes-Oxley Act of 2002

31.2		Certification of Principal Financial Officer pursuant to Section 302 the Sarbanes-Oxley Act of 2002

32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

SIGNATURES

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.

	FLEX FUELS ENERGY, INC.

July 30, 2010	By:	/s/ Thomas Barr
		Thomas Barr, Chief Executive Officer



July 30, 2010	By:	/s/ Robert Galvin
		Robert Galvin, Chief Financial Officer

EX-31.1 2 ex311.htm EXHIBIT 31.1 ex311.htm

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE AND FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Thomas Barr, Principal Executive Officer of Flex Fuels Energy, Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Flex Fuels Energy, Inc. for the quarterly period ended June 30, 2010;

2. Based on my knowledge, the quarterly report does not contain any untrue statement of 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 quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly report;

4. The registrant’s other certifying officers 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 quarterly 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 principles;

(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 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 officers 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 function):

(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 controls.



Date: July 30, 2010	By:	/s/ Thomas Barr
		Thomas Barr, Principal Executive Officer

EX-31.2 3 ex312.htm EXHIBIT 31.2 ex312.htm

Exhibit 31.2

CERTIFICATION OF PRINCIPAL EXECUTIVE AND FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Robert Galvin, Principal Financial Officer of Flex Fuels Energy, Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Flex Fuels Energy, Inc. for the quarterly period ended June 30, 2010;

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls.



Date: July 30, 2010	By:	/s/ Robert Galvin
		Robert Galvin, Principal Financial Officer

EX-32.1 4 ex321.htm EXHIBIT 32.1 ex321.htm

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Flex Fuels Energy, Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2010 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Thomas Barr, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.



Date: July 30, 2010	By:	/s/ Thomas Barr
		Thomas Barr, Chief Executive Officer

EX-32.2 5 ex322.htm EXHIBIT 32.2 ex322.htm

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Flex Fuels Energy, Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2010 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Robert Galvin, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



Date: July 30, 2010	By:	/s/ Robert Galvin
		Robert Galvin, Chief Financial Officer