form10q.htm

10-Q 1 form10q.htm FORM 10-Q form10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the quarterly period ended May 31, 2014

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from __________ to __________

000-53700
Commission File Number

Cortronix Biomedical Advancement Technologies Inc.
(Exact name of registrant as specified in its charter)

Nevada	98-0515701
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

8200 N.W. 41st Street, Suite 145B, Doral, FL	33166
(Address of principal executive offices)	(Zip Code)

(786) 859-3585
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)

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 [X] No [ ]

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 [X ]

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	[ ]	Accelerated filer	[ ]

Non-accelerated filer	[ ]	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]

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Yes [ ] No [ ]

APPLICABLE ONLY TO CORPORATE ISSUERS

349,500,000 shares of common stock issued and outstanding as of July 31, 2014

(Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.)

Cortronix Biomedical Advancement Technologies Inc.

TABLE OF CONTENTS

		Page
	PART I – Financial Information
Item 1.	Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	6
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	9
Item 4.	Controls and Procedures	9

	PART II – Other Information
Item 1.	Legal Proceedings	10
Item 1A.	Risk Factors	10
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	10
Item 3.	Defaults Upon Senior Securities	10
Item 4.	Mine Safety Disclosures	10
Item 5.	Other Information	10
Item 6.	Exhibits	11
	Signatures	12

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Reference is made in particular to the description of our plans and objectives for future operations, assumptions underlying such plans and objectives, and other forward-looking statements included in this report. Such statements may be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “believe,” “estimate,” “anticipate,” “intend,” “continue,” or similar terms, variations of such terms, or the negative of such terms. Such statements are based on management’s current expectations and are subject to a number of factors and uncertainties, which could cause actual results to differ materially from those described in the forward-looking statements. Such statements address future events and conditions concerning, among others, capital expenditures, earnings, litigation, regulatory matters, liquidity and capital resources, and accounting matters. Actual results in each case could differ materially from those anticipated in such statements by reason of factors such as future economic conditions, changes in consumer demand, legislative, regulatory and competitive developments in markets in which we operate, results of litigation, and other circumstances affecting anticipated revenues and costs, and the risk factors set forth under the heading “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended August 31, 2013 filed on February 21, 2014.

In this Quarterly Report on Form 10-Q, references to “dollars” and “$” are to United States dollars and references to “we,” “us,” “Company,” “our” means CorTronix Biomedical Advancement Technologies Inc., unless otherwise indicated.

YOU SHOULD NOT PLACE UNDUE RELIANCE ON THESE FORWARD LOOKING STATEMENTS

The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events or information as of the date on which the statements are made in this Quarterly Report on Form 10-Q. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. You should read this report and the documents that we reference in this report, including documents referenced by incorporation, completely and with the understanding that our actual future results may be materially different from what we expect or hope.

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Article 210 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. All such adjustments are of a normal recurring nature. Operating results for the nine month period ended May 31, 2014 are not necessarily indicative of the results that may be expected for the fiscal year ending August 31, 2014. For further information refer to the consolidated financial statements and footnotes thereto included in our Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2013.

	Page
Unaudited Consolidated Financial Statements
Consolidated Balance Sheets	F-1
Consolidated Statements of Operations	F-2
Consolidated Statements of Cash Flows	F-3
Notes to Consolidated Financial Statements	F-4 to F-10

CORTRONIX BIOMEDICAL ADVANCEMENT TECHNOLOGIES INC.

CONSOLIDATED BALANCE SHEETS

	May 31, 2014 (Unaudited)			August 31, 2013
ASSETS
Current assets
Cash	$	760		$	640
Prepaid expenses		60,377			60,377
Total current assets		61,137			61,017

Security deposit		-			3,390
Equipment and furniture, net		15,976			20,962
Total Assets	$	77,113		$	85,369

LIABILTIES AND STOCKHOLDERS’ DEFICIENCY
Current liabilities
Accounts payable and accrued liabilities	$	47,207		$	77,625
Accounts payable and accrued liabilities, related parties		158,577			28,827
Accrued interest		179,200			116,473
Payroll liabilities		9,943			9,943
Advances from related parties		89,334			85,008
Notes payable		850,674			819,374
Total Current Liabilities		1,334,935			1,137,250

STOCKHOLDERS’ DEFICIENCY
Common stock: 800,000,000 shares authorized, at $0.001 par value 349,500,000 and 287,000,000 shares issued and outstanding at May 31, 2014 and August 31, 2013, respectively		349,500			287,000
Capital in excess of par value		4,048,798			(888,702	)
Deficit accumulated during the development stage		(5,656,120	)		(450,179	)
Total Stockholders’ Deficiency		(1,257,822	)		(1,051,881	)
Total Liabilities and Stockholders’ Deficiency	$	77,113		$	85,369

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

F-1

CORTRONIX BIOMEDICAL ADVANCEMENT TECHNOLOGIES INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

For the three and nine months ended May 31, 2014 and 2013

	Three months ended May 31,						Nine months ended May 31,
	2014			2013			2014			2013

REVENUE	$	-		$	-		$	-		$	-

EXPENSES
Professional fees		3,086			4,141			17,205			37,744
Patent fees		-			19,742			-			19,742
Salary and wages		43,250			44,905			129,750			137,296
Depreciation		1,662			254			4,986			763
Marketing expenses		274			-			4,205,274			-
Other general and administrative expenses		10,485			23,310			25,999			81,759
OPERATING LOSS		(58,757	)		(92,352	)		(4,383,214	)		(277,304	)

Other income and expense
Interest expense		(21,637	)		(20,290	)		(62,727	)		(53,912	)
Loss on debt settlement		-			-			(760,000	)		-

NET LOSS	$	(80,394	)	$	(112,642	)		(5,205,941	)		(331,216	)

Basic and diluted loss per share	$	(0.00	)	$	(0.00	)		(0.02	)		(0.00	)

Weighted average number of shares outstanding, basic and diluted		349,500,000			287,000,000			331,184,982			282,487,179

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

F-2

CORTRONIX BIOMEDICAL ADVANCEMENT TECHNOLOGIES INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the nine months ended May 31, 2014 and 2013

	Nine Months ended May 31, 2014			Nine Months ended May 31, 2013

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(5,205,941	)	$	(331,216	)
Adjustments to reconcile net loss to net cash (used in) operating activities:
Shares issued for marketing expenses		4,200,000			-
Loss on shares issued for settlement of accounts payable		760,000			-
Depreciation		4,986			763
Change in operating assets and liabilities:
Accrued interest		62,727			53,912
Damage deposit		3,390			-
Prepaid expenses		-			(65,168	)
Payroll liabilities		-			1,038
Advances from related party		4,326			-
Accounts payable and accrued liabilities		9,582			32,308
Accounts payable – related parties		129,750			27,829
Net cash provided by (used) in operating activities		(31,180	)		(280,534	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of equipment and furniture		-			(14,019	)
Cash from acquisition		-			22,889
Net cash provided by ( used) in investing activities		-			8,870

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes		31,300			240,000
Proceeds from issuance of common stock		-			-
Net cash provided by financing activities		31,300			240,000

Increase (decrease) in cash during the period		120			(31,664	)
Cash, beginning of period		640			31,686
Cash, end of period	$	760		$	22


Supplemental disclosure of non-cash investing activities:
Shares issued to settle accounts payable	$	40,000		$	-
Accounts payable acquired from reverse acquisition		-			19,702
Accrued interest acquired from reverse acquisition		-			41,907
Advances from related parties acquired from reverse acquisition		-			34,358
Notes payable acquired from reverse acquisition		-			579,373
Loan receivable		-			(50,000	)
	$	40,000		$	625,340

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

F-3

CORTRONIX BIOMEDICAL ADVANCEMENT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

May 31, 2014

1. ORGANIZATION AND BASIS OF PRESENTATON

CorTronix Biomedical Advancement Technologies Inc. (formerly Pana-Minerales S.A.) (the “Company”), was incorporated under the laws of the State of Nevada on October 4, 2006 with authorized capital stock of 100,000,000 shares at $0.001 par value. The Company was originally organized for the purpose of acquiring and developing mineral properties.

On August 15, 2012, we entered into an acquisition agreement with CorTronix Technologies Inc. (“CorTronix”). The officer and director of CorTronix, Yoel Palomino is also the officer and director of the Company, and is the developer of the technology held by CorTronix. CorTronix was incorporated solely for the purpose of this acquisition and its only operations were the development of a proprietary technology known as Corlink. Corlink, is an advanced telemetric system used to transmit, analyze, report and store all types and variations of physiological studies. Under the terms of the acquisition agreement CorTronix became a wholly owned subsidiary of the Company and is now the operational company which will continue with the commercialization of the technology it holds. Under the terms of the agreement, the Company acquired all of the issued and outstanding shares of CorTronix in exchange for the issuance of 175,000,000 restricted shares of the Company. The Share Exchange Agreement was completed on September 11, 2012.

The business combination was accounted for as a reverse acquisition and recapitalization using accounting principles applicable to reverse acquisitions whereby the financial statements subsequent to the date of the transaction are presented as a continuation of CorTronix. Under reverse acquisition accounting CorTronix (subsidiary) is treated as the accounting parent (acquirer) and the Company (parent) is treated as the accounting subsidiary (acquiree). All outstanding shares have been restated to reflect the effect of the business combination.

Both the Company and its subsidiary CorTronix have a fiscal year end of August 31.

2. USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS

The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

These consolidated financial statements include the accounts of CorTronix Biomedical Advancement Technologies Inc., and its wholly-owned subsidiary, CorTronix Technologies Inc. All intercompany balances and transactions have been eliminated in consolidation.

Cash and Cash Equivalents

For purposes of the consolidated statement of cash flows, the Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents.

F-4

CORTRONIX BIOMEDICAL ADVANCEMENT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

May 31, 2014

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Property, Plant and Equipment

Property, plant and equipment are recorded at cost. Depreciation and amortization of property and equipment are calculated using the straight-line method over the assets’ estimated useful lives as follows: computer hardware and software (three years), leasehold improvements (the shorter of five years or lease life), furniture and fixtures (five years) and equipment (three to ten years).

Maintenance and repairs are charged to expense as incurred. Significant renewals and betterments are capitalized. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in operations.

Research and Development

Research and development costs are expensed as incurred. The costs of materials and equipment that will be acquired or constructed for project development activities, and that have alternative future uses, both in project development, marketing or sales, will be capitalized classified as property, plant and equipment and depreciated over their estimated useful lives. To date, research costs, including amounts paid for man hours allocated to ongoing technology development, have been expensed when incurred.

Accounting Methods

The Company recognizes income and expenses based on the accrual method of accounting.

Dividend Policy

The Company has not yet adopted a policy regarding payment of dividends.

Basic and Diluted Net Income (loss) Per Share

Basic net income (loss) per share amounts are computed based on the weighted average number of shares actually outstanding. Diluted net income (loss) per share amounts are computed using the weighted average number of common and common equivalent shares outstanding as if shares had been issued on the exercise of any common share rights unless the exercise becomes antidilutive and then the basic and diluted per share amounts are the same.

Income Taxes

The Company utilizes the liability method of accounting for income taxes. Under the liability method, deferred tax assets and liabilities are determined based on the differences between financial reporting and the tax bases of the assets and liabilities and are measured using the enacted tax rates and laws that will be in effect, when the differences are expected to reverse. An allowance against deferred tax assets is recorded, when it is more likely than not, that such tax benefits will not be realized. As of May 31, 2014, the Company had a deferred tax asset and related valuation allowance of $2,285,474, which begins to expire in 2032, related to its current operations.

Section 382 of the Internal Revenue Code imposes limitations on net loss carryforwards when there is a change in control. Due to the change of business and management, the Company has assumed loss carryforwards related to the Company’s prior operations will not be available to offset future taxable income.

F-5

CORTRONIX BIOMEDICAL ADVANCEMENT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

May 31, 2014

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Advertising and Market Development

The Company expenses advertising and market development costs as incurred.

Impairment of Long-lived Assets

The Company reviews and evaluates long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. The assets are subject to impairment consideration under ASC 360-10-35-17 if events or circumstances indicate that their carrying amounts might not be recoverable. When the Company determines that an impairment analysis should be done, the analysis will be performed using rules of ASC 930-360-35, Asset Impairment, and 360-10-15-3 through 15-5, Impairment or Disposal of Long-Lived Assets.

Financial Instruments

The carrying amounts of financial instruments are considered by management to be their fair value due to their short term maturities.

Statement of Cash Flows

For the purposes of the statement of cash flows, the Company considers all highly liquid investments with a maturity of three months or less to be cash equivalents.

Recent Accounting Pronouncements

On June 10, 2014, The Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, consolidation removes all incremental financial reporting requirements from GAAP for development stage entities, including the removal of Topic 915 from the FASB Accounting Standards Codification. For the first annual period beginning after December 15, 2014, the presentation and disclosure requirements in Topic 915 will no longer be required for the public business entities. The revised consolidation standards are effective one year later, in annual periods beginning after December 15, 2015. Early adoption is permitted. The Company has adopted the amendment.

There are several new accounting pronouncements issued by the Financial Accounting Standards Board (“FASB”) which are not yet effective. Each of these pronouncements, as applicable, has been or will be adopted by the Company. As of May 31, 2014, none of these pronouncements is expected to have a material effect on the financial position, results of operations or cash flows of the Company.

4. GOING CONCERN

The Company will need additional working capital to service its debt, for ongoing operational expenses and to continue with the commercialization of its development stage technology, which raises substantial doubt about its ability to continue as a going concern. While management of the Company has developed a strategy, which it believes will accomplish this objective through additional loans and advances, equity funding, and long term financing, which will enable the Company to operate for the coming year, there can be no assurance that funds will be available to the Company if and when needed.

F-6

CORTRONIX BIOMEDICAL ADVANCEMENT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

May 31, 2014

5. PREPAID EXPENSES

The following table provides details of the Company’s prepaid expenses as of May 31, 2014 and August 31, 2013:

	May 31, 2014		August 31, 2013
Advances to manufacturer		60,377		60,377
	$	60,377	$	60,377

Prepaid expenses of $60,377 consist of amounts advanced to manufacturing firms with respect to the development of Corlink prototypes and manufacturing moulds. As at the date of this report certain of the moulds have been completed and during September 2013 the prototype for CorTab was received, has been tested and is considered mostly functional and ready for trials. The Company has made request for a statement of account from the manufacturers in order to capitalize qualifying expenditures. As at the date of this report the requested statement has not yet been received.

6. PROPERTY AND EQUIPMENT

	May 31, 2014			August 31, 2013
Computer hardware and software	$	6,191		$	6,191
Testing equipment		10,701			10,701
Office furniture		5,087			5,087
Total		21,979			21,979
Accumulated depreciation		(6,003	)		(1,017	)
	$	15,976		$	20,962

7. LEASE AGREEMENT

On August 22, 2012, CorTronix leased office space in Hialeah, Florida on a one year lease with monthly rental payments of $1,814 per month including applicable taxes. The lease was renewed during the current year for a further term ending on August 22, 2014 with monthly rental payments of $1,869 per month including applicable taxes.

On April 25, 2014, the Company executed a lease termination agreement with the Landlord. Under the terms of the termination agreement, the Company will be required to remit past due rent as of the date of termination totaling $10,684, as well as a penalty for early termination of two months’ rent totaling $3,738. The security deposit held by the Landlord totaling $3,990 was immediately applied to the past due rent, leaving an amount payable of $10,432 on termination, which amount shall be settled as to $6,694 on April 30, 2014 and $3,738 no later than June 30, 2014. The Company made cash payment of $7,694 in respect to the termination agreement, leaving $2,738 in the current accounts payable.

8. COMMITMENTS

On July 25, 2013, the Company entered into a marketing agreement with Global Investment Strategies S.A. LLC., a company with offices in Saudi Arabia (“GIS”) whereby GIS is granted the exclusive license for the Middle East and will provide support, management and personnel to make strategic introductions to end users of the Cortronix technologies, including but not limited to hospitals, government agencies, the military and certain airlines in the middle east and other countries. The Company is not requested to pay any payments, fees, royalties or other consideration other than to issue a total of 52,500,000 shares of the common stock of the Company which were issued on November 19, 2013.

F-7

CORTRONIX BIOMEDICAL ADVANCEMENT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

May 31, 2014

8. COMMITMENTS (continued)

The contract also gives GIS the right to appoint a member to the Board of Directors; however, no appointment has yet been made. The agreement has an initial term of five years and renews automatically for an additional five years unless written notice is provided by either party. The shares of common stock were valued at $0.08 per share, totaling $4,200,000, the fair market value of the shares on the date of issuance. The value was recorded as marketing expense.

On September 6, 2013, the Company entered into a consulting and investor relations agreement with Maplehurst Investment Group, LLC (“Maplehurst”). The Company had previously, during November 2012, engaged Maplehurst to provide consulting and investor relations services for a fee of $5,000 per month. Under the terms of the new agreement, the Company agreed to settle the outstanding amount of $40,000 under the contract with Maplehurst by way of the issuance of 10,000,000 shares of the common stock of the Company and Maplehurst agreed to provide services under the contract for an additional twelve month period for no further consideration. The shares were issued on November 19, 2013.

9. LOANS PAYABLE

(1)	Loan payable from unrelated party

A summary of the principal balances of notes payable included in the consolidated balance sheet as of May 31, 2014:

Date	Principal
April 15, 2011	$	50,000
May 6, 2011		50,000
May 26, 2011		31,000
September 30, 2011		49,798
October 5, 2011		3,903
November 5, 2011		8,570
November 7, 2011		50,000
January 10, 2012		1,995
March 12, 2012		21,320
March 27, 2012		200,000
April 5, 2012		6,214
April 10, 2012		100,000
July 6, 2012		6,573
November 9, 2012		150,000
February 4, 2013		50,000
April 2, 2013		40,000
	$	819,374

At May 31, 2014, there was a balance of $819, 374 outstanding, due to an unrelated third party. These notes each have a one year term, bearing interest at ten (10%) percent per annum and are payable in full on the anniversary date. The accrued interest for the three and nine month periods ended May 31, 2014 was $20,653 and $61,285, respectively (May 31, 2013 - $20,290 and $53,912). The Company did not make any payments towards accrued interest in the period, leaving an amount of $177,758 (August 31, 2013 - $116,473) reflected on the Company’s balance sheet as Accrued Interest.

F-8

CORTRONIX BIOMEDICAL ADVANCEMENT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

May 31, 2014

9. LOANS PAYABLE (Continued)

(1)	Loan payable from unrelated party (continued)

The total principal balance of the loans in the amount of $819,374 is currently due and payable. At the maturity dates, the lender has verbally agreed to convert the loans to “demand” loans, with interest continuing to accrue until such time as they are paid in full.

(2)	Loan payable from shareholder

On December 30, 2013 and On April 24, 2014, the Company received funds in the amount of $15,500 and $15,800, respectively, from Global Investment Strategies S.A. LLC, a shareholder of the Company. Each of the loans is a one-year unsecured promissory note with interest at a rate of 18% per 365 day period. After the maturity date, each of the notes shall accrue interest at a rate of 18%, payable semi-annually, plus a penalty of 6% per 30 day period. Should the principal amount of the note and all accrued interest not be repaid within 30 days after the maturity date, the Company should pay a penalty in the form of shares of common stock equal to 18,750 shares per month pro-rated daily.

The accrued interest on these loans for the three and nine months period ended May 31, 2014 was $984 and $1,442, respectively. The Company did not make any payments towards accrued interest in the period, leaving an amount of $1,442 reflected on the Company’s balance sheet as Accrued Interest.

10. SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES

A former officer and director and 11% shareholder was due an amount totaling $34,358 (August 31, 2013 - $34,358) which amount bears no interest, is unsecured and payable on demand.

On August 3, 2012, the Company entered into a consulting agreement with Mr. Yoel Palomino, director and officer of the Company. Under the terms of the agreement, the Company will pay an annual salary of $125,000 to Mr. Palomino, payable weekly. During the nine month period ended May 31, 2014, the Company accrued management fees of $93,750 (May 31, 2013 - $93,750). The Company did not make any cash payments to Mr. Palomino in the period, leaving $127,404 (August 31, 2013 – $16,827) due and payable to Mr. Palomino pursuant to the agreement.

During the nine month period ended May 31, 2014, Mr. Palomino further advanced the Company $4,326 in order to settle certain operating expenses payable as they came due. As of May 31, 2014, $54,976 (August 31, 2013 - $50,650) had been advanced by Mr. Palomino and was due for reimbursement.

During the nine month period ended May 31, 2014, Mr. Jorge Saer, the Chief Technology Officer of the Company, invoiced a total amount of $36,000 (May 31, 2013 - $36,000) for project development services. The Company did not make any cash payments to Mr. Saer, leaving $48,000 (August 31, 2013 – $12,000) due and payable to Mr. Saer as at May 31, 2014.

During the nine month period ended May 31, 2014, an amount of $115,688 from the salary and wage expenses for Yoel Palomino and Jorge Saer was attributed to research and development with respect to the Company’s software currently under development.

11. CAPITAL STOCK

On August 15, 2012, we entered into an acquisition agreement with Cortronix Technologies Inc. (“Cortronix”). Under the term of the acquisition agreement, the Company acquired all of the issued and outstanding shares of Cortronix in exchange for the issuance of 175,000,000 restricted shares of the Company. On September 11, 2012, the Company completed this transaction. All outstanding shares have been restated to reflect the effect of the business combination.

F-9

CORTRONIX BIOMEDICAL ADVANCEMENT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

May 31, 2014

11. CAPITAL STOCK (Continued)

On November 19, 2013, we issued 10,000,000 shares of common stock at $0.001 per share in settlement of $40,000 due to Maplehurst. (ref Note 7). The shares of common stock were valued at $0.08 per share, totaling $800,000, the fair market value of the shares on the date of issuance. The excess value was recorded as a loss totaling $760,000.

On November 19, 2013, we issued a total of 52,500,000 shares of common stock to GIS. (ref Note 7). The shares of common stock were valued at $0.08 per share, totaling $4,200,000, the fair market value of the shares on the date of issuance. The value was recorded as marketing expense.

As at May 31, 2014, the Company had a total of 349,500,000 shares of common stock issued and outstanding.

12. SUBSEQUENT EVENTS

The Company has evaluated subsequent events from the balance sheet date through the date that the financial statements were issued and determined that there were no other events to disclose.

F-10

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

The Company was incorporated under the laws of the State of Nevada on October 4, 2006 with authorized capital stock of 100,000,000 shares at $0.001 par value. The Company was originally organized for the purpose of acquiring and developing mineral properties. The Company divested itself of all of its mining properties during 2012, upon finalizing the agreements with CorTronix Technologies Inc. CorTronix is a BioMedical corporation with a core competency in Mobile Cardio Devices. CorTronix™ is in development stages of creating a complete product line that will consist of what management believes to be revolutionary multiple mobile devices with the capacity to acquire and process patient's data through a consolidated “Single Source” Network.

On August 15, 2012, we entered into an acquisition agreement with CorTronix Technologies Inc. (“CorTronix”). Yoel Palomino, the sole officer and director of the Company is the developer of the technology held by CorTronix. CorTronix was incorporated solely for the purpose of this acquisition. The assets of CorTronix are CorlinkTM an advanced telemetric system used to transmit, analyze, report and store all types and variations of physiological studies. Under the terms of the agreement, the Company acquired all of the issued and outstanding shares of CorTronix in exchange for the issuance of 175,000,000 restricted shares of the common stock of the Company in exchange for all of the issued and outstanding shares of CorTronix. The transaction was completed on September 11, 2012.

The Company is developing the CorTronix technology through its wholly-owned subsidiary.

Results of Operations

We have suffered recurring losses from operations. The continuation of our Company is dependent upon us attaining and maintaining profitable operations and raising additional capital as needed.

Three months ended May 31, 2014 and 2013

During the three months ended May 31, 2014 and 2013 we earned no revenues from operations. For the three month period ended May 31, 2014 we incurred losses from operations of $58,757 and a net loss of $80,394 as compared to losses from operations of $92,352 and a net loss of $112,642 for the three months ended May 31, 2013. The decrease in losses for the three months ended May 31, 2014 over the comparable period ended May 31, 2013 is related to a reduction in professional fees and other general and administrative expenses as the Company curtailed some of its operations while raising capital for ongoing project development. Salaries and wages were slightly reduced period over period to $43,250 (2014) as compared to $44,905 (2013), professional fees decreased from $4,141 (May 31, 2013) to $3,086 at May 31, 2014, general and administrative expenses also decreased from $27,061 (May 31, 2014) to $3,172 at May 31, 2014 as a result of the termination of our office lease in the current fiscal year, while depreciation increased from $254 (May 31, 2013) to $1662 at May 31, 2014. Our net loss includes an interest expense of $21,637 for the three months ended May 31, 2014 as compared to an interest expense of $20,290 for the comparable period ended May 31, 2013.

Nine months ended May 31, 2014 and 2013

During the nine months ended May 31, 2014 and 2013 we earned no revenues from operations. During the period ended May 31, 2014 we incurred losses from operations of $4,383,214 and a net loss of $5,205,941 as compared to losses from operations of $277,304 and a net loss of $331,216 for the nine months ended May 31, 2013. The substantial increase in losses for the nine months ended May 31, 2014 over the comparable period ended May 31, 2013 is related to the Company progressing its business and the entry into a marketing agreement whereby the Company issued shares which were valued at $0.08 per share as of the date of issuance for a total consideration of $4,200,000 which has been allocated to marketing expenses. There were no similar expenditures in the prior comparative nine month period. Salaries and wages were slightly decreased period over period at $137,296 at May 31, 2014 compared to $129,750 at May 31, 2014, professional fees decreased from $37,744 (May 31, 2013) to $17,205 at May 31, 2014, general and administrative expenses also decreased from $81,759 (2013) to $25,999 (2014) while depreciation increased from $763 (2013) to $4,986 (2014). The Company also incurred a further $5,274 in marketing expenses during the current nine month period ended May 31, 2014, with no similar expenses in the prior comparative period ended May 31, 2013. Not taking into account the total expense of $4,205,274 in marketing costs, our expenses for operations decreased from $277,304 for the nine month period ended May 31, 2013 to $177,942 at May 31, 2014. Our net loss includes an interest expense of $62,727 for the nine months ended May 31, 2014, as compared to an interest expense of $53,912 for the comparable period ended May 31, 2013 and a loss on debt settlement of $760,000 for the current nine months ended May 31, 2014 with no comparable expense in the prior comparative period ended May 31, 2013. The $760,000 recorded as a loss on debt settlement was due to the issuance of shares to retire $40,000 in debt, which 10,000,000 shares were valued on issue date at the market value of $0.08 per share.

Liquidity and Capital Resources

As of the nine months ended May 31, 2014 we had $760 cash on hand, prepaid expenses of $60,377 and a working capital deficiency of $1,273,798 as compared to our fiscal year ended August 31, 2013, when we had approximately $640 in cash, prepaid expenses of $60,377 and a working capital deficiency of $1,076,233 During the nine months ended May 31, 2014 we used net cash of $31,180 in operating activities compared to $280,534 during the nine months ended May 31, 2013.

During the nine months ended May 31, 2014, we received funds totaling $31,300 by way of loans from an unrelated third party in order to fund operations with $240,000 in comparable loans received for the period ended May 31, 2013. While the Company has been receiving funding from loans and from related party advances we have not received sufficient funds to meet our obligations as they become due. This lack of available funding when needed has impacted not only on the development of our business but on our ability to meet our filing obligations with the requisite regulatory authorities. There can be no assurance that we will be able to raise funding when required and we may not be able to continue operations. The Company intends to seek additional funding by way of loans or equity financings.

We will not have sufficient funds for our planned operations or to meet ongoing obligations unless we are successful in raising additional capital. Unless the Company can raise additional funds it will not be able to be able to continue to meet its filing requirements when they come due. Further, it will not have any funding with which to continue to further the development and marketing of its proprietary technologies. This could mean a loss of your investment.

We anticipate that we will require a minimum of $1,500,000 over the next twelve months in order to finalize the R&D on the majority of our products and to maintain public company operations and to pay our outstanding liabilities. The Company believes that $600,000 would be sufficient funding if it did not have to repay its outstanding loans. In that twelve month period we anticipate that we will have 4 out of 5 prototypes completed and in the approval process while continuing development of the final products. We are allocating a total of $183,000 for remaining R&D for the upcoming 12 months; however we may not expend the entire R&D budget over the twelve month period as it is dependent on the timelines for development of each product. During the current nine month period, an amount of $115,688 from salaries and consulting fees paid or accrued to Yoel Palomino and Jorge Saer was designated as R&D expenditures. Following is an updated review of the status of the Company’s technology as of the date of this filing. There has been no change in status from the information as provided in the Company’s Form 10-K filed on February 21, 2014.

CorLink&CorView:

99% complete

The cloud system is 98% complete, as the mechanism for sending and receiving studies is implemented with email notification along with the User management and security protocols. The mobile application is also 99-100% complete allowing for users to capture, analyze, process, manage and send 12 lead high resolution ECGs.

Cost to completion between $5,000 and $30,000 for FDA approvals and medical trials. This amount does not include marketing or sales costs which are not yet determined. For the purposes of our funding requirements we have used $30,000 for completion costs, but have not impacted any marketing or sales costs as those will be determined once the medical trials and FDA approvals have been received.

CorTab:

99% complete

From the date of acquisition of the project the Company has migrated from an embedded ECG solution to a Bluetooth based solution through the R&D process. A prototype, fully functional Unit is being tested at the moment on patients. The advanced tablet prototype was received from our manufacturer in China. The Bluetooth patient acquisition module was, manufactured and assembled in-house at the Cortronix headquarters. Arrangements have been made to begin production once orders are received.

During September 2013 the prototype for CorTab was received and tested and is mostly functional, ready for trials.

Testing costs fall within the Corview costs, defined above and the product will require FDA approvals and medical trials.

CorPak:

60%complete

The Company has selected the main device and platform to be used for the CorPak device. Testing on the main circuit has been successful, and is functioning properly. Tests continue to be implemented to bring about the definitive copy of the electrical schematic to remit to Noble Win International in China for implementation into the main device. Hardware designs have also been developed to provide an idea of how the device will ultimately look.

Cost to completion $48,000

CorCare:

40% complete.

This technology uses platform protocols in common with our other units, therefore the work on the other units can be directly implemented with CorCare thus furthering the development of this technology.

Cost to completion $50,000

CorCheck:

42% complete.

This technology is similar to CorCare in that they both use the same platform. Work on the previous platforms can therefore also be adopted for CorCheck. Research on the duel cells used for alcohol detection in breath is being done as well as finger print analysis.

Cost to completion $55,000

Total R&D funding: $183,000

We do not presently have sufficient funds to undertake our plan of operations. We intend to raise these funds by the sale of equity or loans as they can be negotiated. We do not currently have any sources for equity funding and we cannot predict whether we will be able to negotiate any loans or raise the funding required to undertake our business plan.

Our ability to continue operations will be dependent upon the successful completion of additional long-term or permanent equity financing, the support of creditors and shareholders, and, ultimately, the achievement of profitable operations. There can be no assurances that we will be successful, which would in turn significantly affect our ability to be successful in our new business plan. If not, we will likely be required to reduce operations or liquidate assets. We will continue to evaluate our projected expenditures relative to our available cash and to seek additional means of financing in order to satisfy our working capital and other cash requirements.

Critical Accounting Policies and Estimates

The preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments which are based on historical experience and on various other factors that are believed to be reasonable under the circumstances. The results of their evaluation form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions and circumstances. Our significant accounting policies are more fully discussed in the Notes to our Financial Statements.

Off-Balance Sheet Arrangements

The Company does not presently have any off-balance sheet arrangements.

Critical Accounting Policies and Estimates

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

Not Applicable.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

An evaluation was conducted under the supervision and with the participation of our management of the effectiveness of the design and operation of our disclosure controls and procedures as of May 31, 2014. Based on that evaluation, our management concluded that our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.

Changes in Internal Control

There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the nine months ended May 31, 2014, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None

ITEM 1A. RISK FACTORS

A smaller reporting company is not required to provide the information required by this Item.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Unregistered Sales of Equity Securities

There were no unregistered securities sold or issued by the Company without the registration of these securities under the Securities Act of 1933 in reliance on exemptions from such registration requirements, within the period covered by this report, which have not been previously included in a Quarterly Report on Form 10-Q or a Current Report on Form 8-K.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS

Number	Description
3.1(a)	Articles of Incorporation.	Incorporated by reference to the Company’s Form S-1 registration statement filed with the Securities and Exchange Commission on October 14, 2008.
3.1(b)	Amendment to Articles of Incorporation	Incorporated by reference to the Company’s Current Report on Form 8-K filed on September 9, 2011.
3.1(c)	Amendment to Articles of Incorporation	Incorporated by reference to the Company’s Definitive 14C filed on November 2, 2012
3.2(a)	Bylaws.	Incorporated by reference to the Company’s Form S-1 registration statement filed with the Securities and Exchange Commission on October 14, 2008.
3.2(b)	Amendment to Bylaws	Incorporated by reference to the Company’s Current Report on Form 8-K filed on September 28, 2011.
10.1	Consulting Services and Finders Fee Agreement, dated February 1, 2012	Incorporated by reference to the Company’s Current Report on Form 8-K filed on February 1, 2012.
10.2	Mining Option Agreement, dated February 1, 2012	Incorporated by reference to the Company’s Current Report on Form 8-K filed on February 1, 2012.
10.3	Mutual Release Agreement by and between the Company and David Gibson	Incorporated by reference to the Company’s Form 10-K annual report filed with the Securities and Exchange Commission on December 14, 2011.
10.4	Form of Promissory Note	Incorporated by reference to the Company’s Form 10-K annual report filed with the Securities and Exchange Commission on December 14, 2011.
10.5	Acquisition Agreement between the Company and Cortronix dated August 15, 2012	Incorporated by reference to the Company’s Current Report on Form 8-K filed on August 21, 2012.
10.6	Assignment Agreement between Yoel Palomino and Cortronix dated August 10, 2012	Incorporated by reference to the Company’s Current Report on Form 8-K filed on August 21, 2012.
10.7	Consulting and Investor Relations Agreement between the Company and Maplehurst Investment Group LLC dated September 6, 2013	Incorporated by reference to the Company’s Current Report on Form 10-K filed on February 21, 2014.
10.8	Marketing Agreement between the Company and Global Investments Strategies SA LLC dated July 25, 2013	Incorporated by reference to the Company’s Current Report on Form 10-K filed on February 21, 2014.
31.1	Section 302 Certification- Principal Executive Officer	Filed herewith
31.2	Section 302 Certification- Principal Financial Officer	Filed herewith
32.1+	Certification Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith
101.INS++	XBRL Instance Document	Filed herewith
101.SCH++	XBRL Taxonomy Extension Schema	Filed herewith
101.CAL++	XBRL Taxonomy Extension Calculation Linkbase	Filed herewith
101.DEF++	XBRL Taxonomy Extension Definition Linkbase	Filed herewith
101.LAB++	XBRL Taxonomy Extension Label Linkbase	Filed herewith
101.PRE++	XBRL Taxonomy Extension Presentation Linkbase	Filed herewith

+The certification attached as Exhibit 32.1 that accompanies this Quarterly Report on Form 10-Q is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Cortronix Biomedical Advancement Technologies Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing.

†† XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and is otherwise not subject to liability under these sections.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		CORTRONIX BIOMEDICAL ADVANCEMENT TECHNOLOGIES INC.

Date:	August 1, 2014	By:	/s/ Yoel Palomino
		Name:	Yoel Palomino
		Title:	Chief Executive Officer, Chief Financial Officer, President, Secretary, Treasurer and Director (Principal Executive Officer, Principal Financial and Principal Accounting Officer)