10-Q

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, 2013

or

¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission file number: 000-54167

Sanomedics International Holdings, Inc.

(Exact name of registrant as specified in its charter)

Delaware	27-3320809
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

444 Brickell Avenue, Suite 415, Miami, Florida	33131
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (305) 433-7814

not applicable

(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 ¨ No x

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 x 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	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ¨ No x

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. 26,508,609 shares of common stock are issued and outstanding as of August 16, 2013.

TABLE OF CONTENTS

		Page No.
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements.		5
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations.		15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.		22
Item 4.	Controls and Procedures.		22
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings.		23
Item 1A.	Risk Factors.		23
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.		24
Item 3.	Defaults Upon Senior Securities.		25
Item 4.	Mine Safety Disclosures.		25
Item 5.	Other Information.		25
Item 6.	Exhibits.		26

2

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This report includes forward-looking statements that relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Words such as, but not limited to, “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “targets,” “likely,” “aim,” “will,” “would,” “could,” and similar expressions or phrases identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and future events and financial trends that we believe may affect our financial condition, results of operation, business strategy and financial needs. Forward-looking statements include, but are not limited to, statements about our:

• our revenues and profits are not assured,

• we may be unable to continue as a going concern,

• ability to close pending acquisitions,

• our ability to pay our obligations represented by secured notes when they become due,

• we may not be able to obtain the substantial additional capital we need,

• cost and quality issues might arise from our dependence on a third-party, sole source Chinese manufacturer,

• we may be unable to make or successfully integrate acquisitions,

• we may not be able to compete effectively,

• our research and development may be unsuccessful; our next generation products may not be developed, or if developed, may fail to win commercial acceptance,

• we may be unable to develop next generation products if we cannot hire electrical engineers,

• growth, if any, could be unmanageable,

• product shortages may arise if our contract manufacturer fails to comply with government regulations,

• our medical devices may not meet government regulations,

• current economic conditions may jeopardize our fund-raising efforts,

• our intellectual property may not be protectable,

• we face intellectual property risks that may negatively affect our brand names, reputation, revenues, and potential profitability,

• our trademarks are valuable, and any inability to protect them could reduce the value of our products and brands,

• product warranties and product liabilities could be costly,

• we may be unable to replace current management.

• we may receive unfavorable results in the outcome of any pending lawsuits.

• management actions could cause substantial dilution and stock price declines and discourage a takeover,

• we are engaged in a number of related party transactions,

• management could terminate employment, and our operations and viability would be hurt, if we cannot fund the 2010 bonuses and accrued salaries which were earned,

• our common stock is quoted on the OTC Markets, which may discourage investors from purchasing it more than if it was listed on a national exchange,

• our common stock is illiquid,

• the application of the “penny stock” rules could adversely affect transactions in our common stock and could increase transaction cost,

• the price of our common stock may be very volatile,

• a significant portion of our outstanding shares are restricted securities and the sale of those shares will depress our stock price

• as an issuer of a “penny stock,” the protection provided by the Federal securities laws relating to forward looking statements does not apply to us, and

• we have not paid dividends in the past and do not expect to pay dividends for the foreseeable future. Any return on investment may be limited to the value of our common stock, if any.

3

You should read thoroughly this report and the documents that we refer to herein with the understanding that our actual future results may be materially different from and/or worse than what we expect. We qualify all of our forward-looking statements by these cautionary statements including those made in Part I. Item 1A. Risk Factors appearing in our Annual Report on Form 10-K for the year ended December 31, 2012. Other sections of this report include additional factors which could adversely impact our business and financial performance. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events. These forward-looking statements speak only as of the date of this report, and you should not rely on these statements without also considering the risks and uncertainties associated with these statements and our business.

OTHER PERTINENT INFORMATION

Unless specifically set forth to the contrary, when used in this report the terms “we,” “our,” “us,” and similar terms refers to Sanomedics International Holdings, Inc., a Delaware corporation, and our wholly-owned subsidiaries. In addition, the “second quarter of 2013” refers to the three months ended June 30, 2013, the “second quarter of 2012” refers to the three months ended June 30, 2012, “2012” refers to the year ended December 31, 2012 and “2013” refers to the year ending December 31, 2013.

Unless specifically set forth to the contrary, the information which appears on our website at www.sanomedics.com is not part of this report.

4

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

Sanomedics International Holdings, Inc.

Condensed Consolidated Balance Sheets

	June 30,			December 31,
	2013			2012
	(Unaudited)			(Audited)
Assets
Current Assets
Cash	$	72,482		$	26,084
Accounts receivable		49,376			8,117
Inventory		2,318			2,171
Deposit on planned acquisition		400,000			-
Prepaid expense		10,810			-
Total Current Assets		534,986			36,372
Fixed assets, net		15,741			17,049
Other Assets
Patents, net		34,306			36,796
Deposits		7,999			-
Total Other Assets		42,305			36,796
Total Assets	$	593,032		$	90,217
Liabilities and Stockholders’ Deficit
Current Liabilities
Accrued salaries payable	$	656,569		$	1,290,516
Accounts payable and other liabilities		314,786			243,836
Accrued interest payable		283,857			217,001
Convertible notes payable, net		68,385			4,688
Derivative liabilities		1,847,560			40,697
Due to related parties		126,597			65,738
Notes payable - related parties, current portion		858,132			1,379,427
Total Current Liabilities		4,155,886			3,241,903
Notes payable - related parties		1,102,787			-
Convertible note payable, net		31,250			12,500
Total Liabilities		5,289,923			3,254,403
Commitments and Contingencies
Stockholders’ Deficit
Preferred stock, $0.001 par value: 1,000 shares authorized,
issued and outstanding as of June 30, 2013 and December 31, 2012,
respectively		1			1
Common stock, $0.001 par value: 250,000,000 shares authorized,
20,508,609 and 20,403,586 issued and outstanding as of June 30, 2013
and December 31,2012, respectively.		20,509			20,404
Additional paid in capital		6,785,860			5,748,691
Stock subscription receivable		(20,000	)		(20,000	)
Accumulated deficit		(11,483,261	)		(8,913,282	)
Total Stockholders’ Deficit		(4,696,891	)		(3,164,186	)
Total Liabilities and Stockholders' Deficit	$	593,032		$	90,217

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

5

Sanomedics International Holdings, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2013			2012			2013			2012
Revenues, net	$	63,941			7,101		$	121,079		$	35,028
Cost of goods sold		17,021			12,461			33,592			34,692
Gross profit (loss)		46,920			(5,360	)		87,487			336
Operating expenses
General and administrative		269,676			320,987			453,808			547,828
Research and development		25,750			-			53,500			8,500
Stock compensation		38,842			204,888			255,738			369,751
Depreciation and amortization		1,899			1,061			3,798			2,122
Total operating expenses		336,167			526,936			766,844			928,201
Loss from operations		(289,247	)		(532,296	)		(679,357	)		(927,865	)
Other income (expense)
Amortization of debt discount		(30,898	)		-			(54,337	)		-
Derivative expense		(2,830,798	)		-			(2,830,798	)		-
Unrealized gain on fair value of derivatives		1,047,628			-			1,047,628			-
Interest expense		(27,092	)		(54,489	)		(53,115	)		(108,956	)
Total other income (expense)		(1,841,160	)		(54,489	)		(1,890,622	)		(108,956	)
Net income (loss) before income taxes		(2,130,407	)		(586,785	)		(2,569,979	)		(1,036,821	)
Income taxes		-			-			-			-
Net income (loss)	$	(2,130,407	)	$	(586,785	)	$	(2,569,979	)	$	(1,036,821	)
Net income ( loss) per share - basic and diluted	$	(0.10	)	$	(0.04	)	$	(0.13	)	$	(0.07	)
Weighted average number of shares outstanding during the period - basic and diluted		20,410,102			14,258,939			20,454,423			14,258,939

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

6

Sanomedics International Holdings, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	For the Six Months Ended June 30,
	2013			2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(2,569,979	)	$	(1,036,821	)
Adjustments to reconcile net income (loss) to net cash used in operating activities
Depreciation and amortization		3,798			2,122
Stock compensation		255,738			369,751
Amortization of debt discount on convertible notes		54,337			-
Derivative expenses		2,830,798			-
Unrealized gain on fair value of derivative liabilities		(1,047,628	)		-
Changes in operating assets and liabilities
Accounts receivable		(41,259	)		(4,600	)
Inventory		(147	)		29,867
Prepaid expense		(400,000	)		-
Other current assets		(10,810	)		1,926
Deposits		(7,999	)		-
Bank overdraft		-			(4,522	)
Accrued salaries payable		69,392			131,539
Accounts payable and other liabilities		50,950			(34,240	)
Accrued interest payable		66,856			108,935
Due to related parties		60,859			20,547
Net Cash Used In Operating Activities		(685,094	)		(415,496	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets		-			(45	)
Net Cash Used In Investing Activities		-			(45	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes - related parties		581,492			47,000
Issuance of stock subscriptions payable		-			133,500
Sale of common stock		-			238,000
Proceeds from convertible notes payable		150,000			-
Net Cash Provided By Financing Activities		731,492			418,500
Net increase (decrease) in cash		46,398			2,959
Cash - beginning of period		26,084			-
Cash - end of period	$	72,482		$	2,959
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for:
Income taxes	$	-		$	-
Interest	$	-		$	-
Non-cash financing transactions:
Common stock issued to consultants for services	$	96,343		$	-
Common stock issued for conversion of debt, net of derivative	$	78,197		$	-
Accrued salaries payable converted to convertible promissory note - officer	$	703,339		$	-

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

7

Sanomedics International Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

June 30, 2013

(Unaudited)

NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION

Sanomedics International Holdings, Inc. (referred to herein as “we”, “us”, “our” or the “Company”) formerly Grand Niagara Mining and Development Co, Inc. ("Grand Niagara") was originally incorporated in the state of Idaho in 1955 and re-domiciled in the state of Delaware on April 6, 2009. The Company, through its subsidiaries, designs, develops, markets and distributes non-invasive infrared thermometers principally for consumer and pet home health care.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission for interim financial information. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. It is management's opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation. The results for the interim period are not necessarily indicative of the results to be expected for the full year.

The unaudited interim financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K, which contains the audited consolidated financial statements and notes thereto, together with the Management’s Discussion and Analysis, for the fiscal year ended December 31, 2012. The interim results for the three and six months ended June 30, 2013 are not necessarily indicative of the results for the full fiscal year.

NOTE 2 – LIQUIDITY AND GOING CONCERN

The condensed consolidated financial statements have been prepared on a going concern basis, and do not reflect any adjustments related to the uncertainty surrounding our recurring losses or accumulated deficit.

The Company currently has limited revenue and is experiencing recurring losses. These factors raise substantial doubt about its ability to continue as a going concern. Management has financed the Company's operations principally through loans from an affiliate of the Company’s former CEO, who is also one of the principal shareholders. Through June 30, 2013, the Company obtained its liquidity principally from approximately $582,000 of cash advances from an affiliate of the former Chairman and CEO and the Company's principal shareholder. The Company may need to continue borrowings from an affiliate of the former Chairman and CEO and the Company's principal shareholder and will also need to raise additional capital. However, management cannot provide any assurances that the Company will be successful in completing this financing and accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon continued financial commitments from related parties and eventually secure other sources of financing in addition to those funds provided by its affiliate and attain profitable operations. The accompanying condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

8

Sanomedics International Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

June 30, 2013

(Unaudited)

NOTE 3 – NOTES PAYABLE -RELATED PARTIES

	June 30,		December 31,
	2013		2012
Notes Payable consists of the following:
Secured Convertible Promissory Note - CLSS Holdings, LLC, dated September 30,
2010. Note accrues interest at 9% per annum, due and payable on October 1, 2013(A)	$	181,000	$	181,000
Secured Convertible Promissory Note - CLSS Holdings, LLC, dated March 12, 2011.
Note accrues interest at 9% per annum, due and payable on October 1, 2013 (A)		367,000		367,000
Secured Convertible Promissory Note - CLSS Holdings, LLC, dated September 30,
2011. Note accrues interest at 9% per annum, due and payable on September 30, 2013(A)		220,000		220,000
Secured Convertible Promissory Note - CLSS Holdings, LLC, dated March 12, 2011.
Note accrues interest at 7.5% per annum, due and payable on October 1, 2013 (A)		334,787		334,787
Convertible Promissory Note-Officer, dated June 17, 2013. Note accrues interest
at 9% per annum, due and payable on March 30, 2015, net of discount of $703,339
(B) Refer to Note 5		-		-
Total		1,102,787		1,102,787
Other advances from CLSS Holdings, LLC, not evidenced by a promissory Note (A)		858,132		276,640
		1,960,919		1,379,427
Less: Current portion		858,132		1,379,427
Notes Payable-related parties	$	1,102,787	$	-

The secured convertible promissory notes above are collateralized by substantially all the assets of the Company and are convertible, at the holder's option, into common shares of the Company at a fixed conversion price of $0.50 per share. CLSS is wholly owned by the Company's Former CEO who also is a principal shareholder of the Company.

(A)   On May 9, 2013, the Company and an affiliate of the Company’s former CEO agreed to terminate each of the above listed convertible notes and issue a single replacement convertible note that includes the obligations currently provided together with the advances and accrued interest of $238,868. The original convertible notes were not delivered to the Company and accordingly, the replacement note was not issued and voided. On August 13, 2013 an agreement was executed covering these Notes to extend the maturity of these Notes to March 31, 2015.

(B)   On June 17, 2013, the Company and its President and a principal stockholder of the Company and a Director agreed to convert accrued salary totaling $703,339 into a long term convertible note as reflected above. The Note isconvertible, at the holder's option, into common shares of the Company at a fixed conversion price of $0.50 per share.

9

Sanomedics International Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

June 30, 2013

(Unaudited)

NOTE 4 – CONVERTIBLE NOTES PAYABLE

On August 24, 2012, the Company executed a convertible note for $75,000. The convertible note is unsecured and has a maturity date of August 24, 2014. Interest will accrue at 9% per annum until paid or maturity and is convertible into common shares at a fixed convertible price of $0.50 per share. In the event that the Company undertakes financing while this debt is unpaid, the holder shall have the right to convert at the lessor of the offering price or the fixed conversion price. As of June 30, 2013 and December 31, 2012, the convertible note amounted to $31,250 and $12,500, net of unamortized discounts of $43,750 and $62,500, respectively.

On December 6, 2012, the Company entered into a Securities Purchase Agreement and convertible promissory note (“Note”) in the principal amount of $37,500. The Note, which was due on August 29, 2013, bears interest at 8% per annum until paid or to maturity was converted on June 11, 2013 and June 18, 2013 into a total of 29,128 shares of the Company’s common stock at a conversion price equal to a 42% discount to the average of the lowest three closing bid prices of the common stock during the 10 trading days prior to conversion or $1.36 and $1.36 per share. As of June 30, 2013 and December 31, 2012, the convertible note amounted to $ -0- and $4,688, net of unamortized discount of $37,500 and $32,812, respectively.

On June 17, 2013, the Company entered into a Promissory Note (the “Note”) with a third party lender (“Lender”) in the principal amount up to $500,000. On June 19, 2013, the Lender executed the Note and funded the Company an initial tranche of $150,000 pursuant to the terms thereof. The principal sum of the Note carries a $50,000 original issue discount (“OID”) , which is prorated based on the consideration paid by the lender. The maturity date of each tranche funded under the Note is one year from the date of each payment by the Lender. The principal amount of the Note due is prorated based upon the consideration actually paid to us, plus a 10% OID, and we are only obligated to repay the amount of the funded Note, together with interest and fees. The Note may be prepaid by us at any time on or before 90 days from the date of issue interest free. After the initial 90 day period the Note bears a one-time interest charge of 12% applied to the principal sum. All principal and accrued interest on the Note is convertible into shares of the Company’s common stock at the election of the Lender at any time at a conversion price of the lesser of $2.75 or 70% of the lowest trade price in the 25 trading days prior to conversion. At all times while the Note is outstanding we agreed to reserve from our authorized but unissued shares of common stock 550,000 shares for the possible conversion of the Note; plus provide registration rights. As of June 30, 2013, the Note amounted to $68,385 , net of unamortized discount of $81,615.

In accordance with ASC 470-20 Debt with Conversion and Other Options, the Company recorded total discounts of $125,365 and $0 for the beneficial conversion features of the convertible debts incurred during the periods ended June 30, 2013 and June 30, 2012, respectively. The discounts are being amortized to interest expense over the term of the notes using the effective interest method. The Company recorded $54,337 and $-0- of interest expense pursuant to the amortization of the note discounts for the six months ended June 30, 2013 and for the six months  ended June 30, 2012, respectively; and $30,898 and $ -0- for the three months ended June 30, 2013 and June 30, 2012.

NOTE 5 – DERIVATIVE LIABILITIES

The Company analyzed the related party convertible note-officer and convertible promissory notes referred to in Notes 3 and 4 based on the provisions of ASC 815-15 and determined that the conversion options of the convertible notes qualify as embedded derivatives.

10

Sanomedics International Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

June 30, 2013

(Unaudited)

NOTE 5 – DERIVATIVE LIABILITIES (CONTINUED)

The fair value upon inception of the embedded derivatives are determined to total $2,915,188 and recorded as embedded derivative liabilities. The embedded derivatives are revalued at the end of each reporting period and any resulting gain or loss is recognized as a current period charge to the statement of operations.

The Company accounts for the embedded conversion features included in its common stock as well as derivative liabilities. The aggregate fair value of derivative liabilities as of June 30, 2013 and December 31, 2012 amounted to $1,847,560 and $40,697, respectively. The net decrease of $1,047,628 in the fair value of the derivative liabilities between the respective periods is included in other income as an unrealized gain on fair value of derivatives.

NOTE 6 – COMMITMENTS AND CONTINGENCIES

Litigation

From time to time, the Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm its business.

On May 21, 2013, Exergen Corporation commenced legal action in the United States District Court for the District of Massachusetts against us, claiming infringement of certain intellectual property. Exergen is seeking various types of relief, including an injunction against further infringement of certain intellectual property. Given the inherent uncertainty and unpredictability of litigation and due to the early status of this legal action, no range of loss or possible loss can be reasonably estimated at this time. However, we do not expect the outcome of this matter to have a material adverse effect on our consolidated financial statements when taken as a whole. As of June 30, 2013 and through the date of this filing, no amount is accrued as a loss is not considered probable or estimable.

NOTE 7 – STOCKHOLDERS’ DEFICIT

Common stock

On February 9, 2013, the Company issued a total of 50,000 shares of common stock to two consultant for services valued at $1.15 per share. As a result, the Company recorded stock compensation in the amount of $57,500 for the three months ended March 31, 2013.

On June 28, 2013, the Company issued a total of 25,895 shares of common stock to a public relations firm as settlement of its services valued at $1.50 per share. As a result, the Company recorded stock compensation in the amount of $38,842 for the three months ended June 30, 2013.

On June 11, 2013 and June 28, 2013, in connection with a Securities Purchase Agreement and convertible promissory note (“Note”) in the principal amount of $37,500, the Company converted the Note into a total of 29,128 shares of the Company’s common stock at a conversion price of $1.36  per share.

Stock Options

On March 7, 2013, the Company granted to its Chief Technology Officer 150,000 seven-year stock options with an exercise price of $0.50 per share. The Company determined that the fair value of the options was approximately $159,000 using the Black Scholes method and recorded as stock compensation in the accompanying condensed consolidated financial statements.

11

Sanomedics International Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

June 30, 2013

(Unaudited)

NOTE 8 – PENDING ACQUISITION

Prime Time Medical:

On April 26, 2013, the Company entered into a Stock Purchase Agreement (the “Stock Purchase Agreement ”) with Prime Time Medical, Inc., a Florida corporation (“Prime Time”) and Mark R. Miklos, the sole equity holder of Prime Time (“Miklos”). Prime Time is a Durable Medical Equipment provider of home medical equipment servicing consumers throughout West Central Florida.

Pursuant to the Stock Purchase Agreement, at the closing Miklos will transfer to the Company all the outstanding shares of capital stock of Prime Time for an aggregate purchase price of up to $3,100,000, subject to certain adjustments as summarized herein. The purchase price will be paid in a combination of cash, promissory notes and shares of the Company’s common stock

On the closing date, the Company will make a total cash payment to Miklos as follows: (a) if the closing occurs on or prior to May 26, 2013, the Company shall pay $950,000 at closing, (b) if the closing occurs after May 26, 2013 but on or prior to June 26, 2013 the Company shall pay to Seller $1,050,000 at closing, and (c) if the closing occurs after June 26, 2013, the Company shall pay to Seller $1,150,000 at closing. The Purchase Agreement requires total deposits of $400,000 to be paid towards the purchase price, to be paid by June 26, 2013. As of June 30, 2013 the Company has paid $300,000 and recorded and accrual for $100,000. Subsequently the company paid an additional $50,000, which has resulted in the seller granting the Company additional time to close.

Additionally, at closing, the Company will issue two additional promissory notes (the “Prime Time Notes A and B”) to Miklos in the aggregate principal amount of $1,000,000.  Prime Time Note A in the principal amount of $500,000 will bear interest at 5% per annum, with monthly payments of principal and interest, and will mature three years after the closing date.  Prime Time Note B in the principal amount of $500,000 will bear interest at 5% per annum, with annual payments of interest and principal payable annually over two years from the date of closing provided; however, that the principal balance of Prime Time Note B (and the respective annual payment) shall be reduced if: (i) the earnings before income taxes, depreciation and amortization (“EBITDA”) for the fiscal year ended December 31, 2013 is less than $975,000; and/or (ii) the EBITDA for the fiscal year ended December 31, 2014 is less than $975,000. At Miklos’ option, Prime Time Note B can be paid in shares of common stock of the Company on terms acceptable to Miklos and the Company.

Total consideration also includes $750,000 in the form of shares of restricted common stock of the Company (the “Shares”), with the number of Shares to be issued to be determined at closing by dividing $750,000 by the average of the highest bid and lowest asked prices for the Company’s common stock as quoted on the OTC Bulletin Board, the OTC Pink Sheets or other similar quotation system, as applicable, at the end of the trading day immediately preceding the closing (the “Original Issuance Price”). If as of the first anniversary of the closing Miklos has not received at least $1,500,000 of the purchase price in the form of cash (including from the payment of principal on Prime Time Notes A and B and the sale of Shares in the public market), then, following such first anniversary, Miklos may put, and Company shall promptly purchase from Miklos in cash, such number of Shares equal to the difference between such cash payments and $1,500,000 divided by the Original Issuance Price.

The Purchase Agreement also requires the Company to enter at closing into an employment agreement with the Seller for certain management services and; also contains a covenant of the Seller not to compete with the Company for a two year period.

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Sanomedics International Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

June 30, 2013

(Unaudited)

NOTE 8 – PENDING ACQUISITION (CONTINUED)

The Purchase Agreement further provides that the Company will engage its independent registered public accounting firm to prepare an audit of Prime Time’s financial statements for the years ended December 31, 2011 and 2012. If, for any reason the audit cannot be concluded, the Company will not be required to pay any amounts due under Notes A or B and such notes will be cancelled. The Company, however, has no right to receive a refund of the cash portion of the purchase price as tendered or to effect a cancellation of the Shares. In addition, if Prime Time’s total asset value at December 31, 2012 as determined in accordance with the audited financial statements is less than the value set forth on the financial statements previously provided to the Company, the purchase price will be reduced by such amount on a dollar for dollar basis through a return of a number of Shares equal to such deficiency, and, if the deficiency is greater than the Original Issue Price, through a set off of the amount which will be due under Note A.

NOTE 9 – SUBSEQUENT EVENTS

Pending Acquisition

On July 10, 2013, the Company entered into an Equity Purchase Agreement (the “Equity Purchase Agreement ”) with Duke Medical Equipment LLC, a Texas limited liability company (“Duke Medical”) and Vann R. Duke, the sole equity holder of Duke (“Duke”). Duke Medical is a Durable Medical Equipment provider of home medical equipment servicing consumers throughout the Houston and Galveston, Texas area.

Pursuant to the Equity Agreement, at the closing Duke will transfer to the Company all the membership interest of Duke Medical for an aggregate purchase price of $7,000,000, subject to certain adjustments as summarized herein. The purchase price will be paid in a combination of cash, promissory notes and shares of the Company’s common stock. On the closing date the Company will make a total cash payment to the Seller of $2,000,000.

Additionally, at closing, the Company will issue two additional promissory notes (the “Duke Medical Notes A and B”) to Duke in the aggregate principal amount of $2,000,000. Duke Medical Note A in the principal amount of $1,000,000 will bear interest at 5% per annum, with monthly payments of principal and interest, and will mature eighteen (18) months after the closing date. Duke Medical Note B in the principal amount of $1,000,000 will bear interest at 5% per annum, with annual payments of interest and principal payable annually over two years from the date of closing provided; however, that the principal balance of Duke Medical Note B (and the respective annual payment) shall be reduced if: (i) EBITDA for the fiscal year ended December 31, 2013 is less than $1,500,000; and/or (ii) the EBITDA for the fiscal year ended December 31, 2014 is less than $1,500,000. At Duke’s option, Duke Medical Note B can be paid in shares of common stock of the Buyer on terms acceptable to Duke and the Company.

Total consideration also includes $3,000,000 in the form of shares, with the number of shares to be issued to be determined at closing by dividing $3,000,000 by the average of the closing bid price for the Company’s common stock as quoted on the OTC Bulletin Board, the OTC Pink Sheets or other similar quotation system, as applicable, for the five (5) trading days immediately preceding the closing (the “Duke Medical Original Issuance Price”).

The Equity Purchase Agreement also requires the Company to enter at closing into employment agreements with Duke and his spouse for certain management services and; also contains a covenant of Duke and his spouse not to compete with the Company for a two year period.

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Sanomedics International Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

June 30, 2013

(Unaudited)

NOTE 9 – SUBSEQUENT EVENTS (CONTINUED)

The Equity Purchase Agreement further provides that the Company will engage its independent registered public accounting firm to conduct an audit of Duke Medical’s financial statements for the years ended December 31, 2011 and 2012. If, for any reason the audit cannot be concluded, the Company will not be required to pay any amounts due under the Duke Medical Notes A or B and such notes will be cancelled. The Company, however, has no right to receive a refund of the cash portion of the purchase price as tendered or to effect a cancellation of the Shares. In addition, if Duke Medical’s total asset value at December 31, 2012 as determined in accordance with the audited financial statements is less than the value set forth on the financial statements previously provided to the Company, the purchase price will be reduced by such amount on a dollar for dollar basis through a return of a number of Shares equal to such deficiency, and, if the deficiency is greater than the Duke Medical Original Issue Price, through a set off of the amount which will be due under Duke Medical Note A.

Share Issuances:

In August 12, 2013 the Company issued 6,000,000 shares of its common stock upon the conversion of $6,000 portion of Convertible Note due to CLSS originally at $220,000 and sold to six (6) third parties by the original holder, with the shares valued at current fair market totaling $11,940,000.

Management has evaluated the subsequent events through August 19, 2013, the date at which the condensed consolidated financial statements were available for issue.

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

The following discussion of our financial condition and results of operations for the six and three months ended June 30, 2013 and 2012 should be read in conjunction with the financial statements and the notes to those statements that are included elsewhere in this report. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under Cautionary Notice Regarding Forward-Looking Statements appearing earlier in this report together with Part II, Item 1. of this report and Item 1A. Risk Factors, and the Business section in our Annual Report on Form 10-K for the year ended December 31, 2012. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements.

OVERVIEW

We design, develop and market a line of non-contact infrared thermometers principally for the “professional” market (physician, medical clinics, nursing homes and institutions), a market in which we conducted limited test-marketing during 2010 and 2011. Prior to 2012 we marketed our thermometers to consumer home healthcare for children and, under the “ThermoPet” brand name for pet dogs which, we stopped marketing to these two markets during 2012. Our marketing research led us to redirect our research and development efforts and focus on our second generation product with improved accuracy, and during the second quarter of 2012 we introduced our second generation product line commercially into the “professional” market. 

During the first and second quarters of 2013 our focus has been to continue the introduction and selling of our second generation product line. We are also pursuing the growth of our business through strategic acquisitions in the sleep apnea space. As previously reported, on April 26, 2013, we entered into a Stock Purchase Agreement with Prime Time Medical, Inc., a Florida corporation (“Prime Time”) and Mark R. Miklos, the sole equity holder of Prime Time. Prime Time is a durable medical equipment provider of home medical equipment with products such as power wheel chairs and scooters specializing in complex rehab products, respiratory equipment including oxygen concentrators and nebulizer compressors, diabetic supplies, hospital beds, bariatric equipment, walkers, CPMs, commodes, manual wheel chairs and support surface products for wound care management, servicing consumers throughout West Central Florida. Pursuant to the terms of the Stock Purchase Agreement, we agreed to purchase all of the stock of Prime Time from Mr. Miklos for an aggregate purchase price of up to $3,100,000, subject to certain adjustments. The purchase price will be paid in a combination of cash, promissory notes and shares of our common stock. On the closing date, we will make a total cash payment to Mr. Miklos of $1,150,000,

We have tendered $350,000 in deposit towards the purchase price through August 2013. The balance of the purchase price will be paid through a combination of promissory notes and shares of our common stock, all as more fully described in Note 7 of the Notes to Condensed Consolidated Financial Statements appearing earlier in this report. Under the terms of the Stock Purchase Agreement, if the transaction did not close by May 26, 2013, we were obligated to tender an additional $100,000 deposit to Mr. Miklos, and if the transaction did not close by June 26, 2013, we were obligated to tender an additional $100,000 deposit to him. The Purchase Agreement requires total deposits of $400,000 to be paid towards the purchase price, to be paid by June 26, 2013. As of June 30, 2013 the Company has paid $300,000 and subsequently paid an additional $50,000, which has resulted in the seller granting the Company additional time to close.

The parties are presently working to extend the closing date to September 30, 2013 and, if the transaction does not close by September 30, 2013, under the terms of the agreement Mr. Miklos is entitled to terminate the agreement and retain the deposits.

Additionally, on June 10, 2013, the Company entered into an Equity Purchase Agreement with Duke Medical Equipment LLC, a Texas limited liability company (“Duke Medical”) and Vann R. Duke, the sole equity holder of Duke. Duke Medical is a durable medical equipment provider of home medical equipment servicing consumers throughout the Houston and Galveston, Texas area.

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Pursuant to the Equity Purchase Agreement, at the closing the Seller will transfer to the Company all the membership interest of Duke Medical for an aggregate purchase price of $7,000,000, subject to certain adjustments as summarized herein. The purchase price will be paid in a combination of cash, promissory notes and shares of the Company’s common stock. On the closing date which is contemplated to be 90 days from the Equity Purchase Agreement, the Company will make a total cash payment to the Seller of $2,000,000.

We will need to raise additional capital to close these acquisitions. Although we are currently in various discussions with several investment bankers and lending institutions, we do not have any firm commitments for the capital and there are no assurances we will be able to raise the funds prior to closing dates. As a result, there are no assurances that these transactions will close and we may forfeit any deposits rendered.

Critical Accounting Policies and Estimates

The methods, estimates and judgments we use in applying our accounting policies have a significant impact on the results we report in our consolidated financial statements. Some of our accounting policies require us to make difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. We believe our critical accounting policies are those described below.

Revenue Recognition

The Company recognizes revenue at the time the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the fee is fixed or determinable; and (4) collectability is reasonably assured.

Certain product sales are subject to rights of return. Such rights include the right to return defective items within 30 days and with certain large accounts a right to return unsold products. For products sold where the buyer has the right to return the product, the Company recognizes revenue at the time of sale only if (1) the Company’s price to the buyer is substantially fixed or determinable at the date of sale, (2) the buyer has paid the Company, or the buyer is obligated to pay the seller and the obligation is not contingent on resale of the product, (3) the buyer’s obligation to the Company would not be changed in the event of theft or physical destruction or damage of the product, (4) the buyer acquiring the product for resale has economic substance apart from that provided by the seller, (5) the Company does not have significant obligations for future performance to directly bring about resale of the product by the buyer, and (6) the amount of future returns can be reasonably estimated. The Company recognizes such product revenues when either it has met all the above criteria, including the ability to reasonably estimate future returns, when it can reasonably estimate that the return privilege has expired.

Revenue from sales of the Company’s products is recorded when title and risk of loss have passed to the buyer and provided the criteria for revenue recognition are met. The Company sells its products to individual consumers and resellers upon receipt of a written order. The Company has a limited return policy for defective items that requires that the customer give the Company notice within 30 days after receipt of the product; however, such risk is passed to the manufacturer and therefore, the Company recognizes revenue at the time of delivery without providing any reserve. For sales made by certain large accounts with a right to return unsold items, the Company provides for a reserve for the estimated amount of unsold items.

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Inventories

Inventories are stated at the lower of cost (on a first-in, first-out basis) or market value. The stated cost is comprised of finished goods of non-invasive medical devices. Reserves, if necessary, are recorded to reduce inventory to market value based on assumptions about consumer demand, current inventory levels and product life cycles for the various inventory items, as follows:

● Consumer demand – our first generation products have been discontinued and have been written down to lower of cost or market.  

● Current inventory levels – we have approximately 62 units remaining as of June 30, 2013.  

● Product life cycles – although we continue to improve on the design and manufacturing of our 2nd generation professional models, we believe our products are still readily marketable consumer products and demanded by professional healthcare practitioners.

Derivative Liability

The Company evaluates its convertible instruments, options, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under ASC Topic 815, “Derivatives and Hedging.” The result of this accounting treatment is that the fair value of the derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income (expense). Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Equity instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815 are reclassified to liabilities at the fair value of the instrument on the reclassification date. We analyzed the derivative financial instruments (the Convertible Notes), in accordance with ASC 815. The objective is to provide guidance for determining whether an equity-linked financial instrument is indexed to an entity’s own stock. This determination is needed for a scope exception which would enable a derivative instrument to be accounted for under the accrual method. The classification of a non-derivative instrument that falls within the scope of ASC 815-40-05 “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock” also hinges on whether the instrument is indexed to an entity’s own stock. A non-derivative instrument that is not indexed to an entity’s own stock cannot be classified as equity and must be accounted for as a liability. There is a two-step approach in determining whether an instrument or embedded feature is indexed to an entity’s own stock. First, the instrument's contingent exercise provisions, if any, must be evaluated, followed by an evaluation of the instrument's settlement provisions. The Company utilized multinomial lattice models that value the derivative liability within the notes based on a probability weighted discounted cash flow model. The Company utilized the fair value standard set forth by the Financial Accounting Standards Board, defined as the amount at which the assets (or liability) could be bought (or incurred) or sold (or settled) in a current transaction between willing parties, that is, other than in a forced or liquidation sale.

Stock-Based Compensation

The Company applies the fair value method stipulated by ASC Topic 718, Compensation - Stock Compensation in accounting for its stock based compensation. This standard states that 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, if any. During 2012 as the Company does not have sufficient, reliable and readily determinable values relating to its common stock, the Company has used the stock value pursuant to its most recent private sale of stock by an affiliate of our CEO, for purposes of valuing stock based compensation. The Company believes that the market price of the Company's stock is not indicative of value as the stock is not widely held. During 2013 the fair value of restricted stock is estimated on the date of grant and is generally equal to the closing price of our common stock on that date.

Income Taxes

Income taxes are accounted for under the asset and liability method as stipulated by the ASC Topic 740 Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC Topic 740, the effect on deferred tax assets and liabilities or a change in tax rate is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced to estimated amounts to be realized by the use of a valuation allowance. A valuation allowance is applied when in management's view it is more likely than not (50%) that such deferred tax will not be utilized.

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The Company adopted certain provisions under ASC Topic 740, which provide interpretative guidance for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Effective with the Company's adoption of these provisions, interest related to the unrecognized tax benefits is recognized in the consolidated financial statements as a component of income taxes.

In the unlikely event that an uncertain tax position exists in which the Company could incur income taxes, the Company would evaluate whether there is a probability that the uncertain tax position taken would be sustained upon examination by the taxing authorities. Reserves for uncertain tax positions would be recorded if the Company determined it is probable that a position would not be sustained upon examination or if payment would have to be made to a taxing authority and the amount is reasonably estimated. As of June 30, 2013, the Company does not believe it has any uncertain tax positions that would result in the Company having a liability to the taxing authorities. The Company's tax returns are subject to examination by the federal and state tax authorities for the tax years ended 2008 through 2012.

The following table summarizes our consolidated operating results as a percentage of net sales revenue for the periods indicated:

	Three Months Ended June 30						Six Months Ended June 30
	2013			2012			2013			2012
Revenues, net		100	%		100	%		100	%		100	%
Costs and Expenses:
Cost of goods sold		27	%		176	%		28	%		99	%
General and administrative		422	%		4,520	%		375	%		1,564	%
Research and development		40	%		0	%		44	%		24	%
Stock compensation		61	%		2,885	%		211	%		1,056	%
Depreciation and amortization		3	%		15	%		3	%		6	%
		553	%		7,596	%		661	%		2,749	%
Loss from operations		-453	%		-7,496			-561	%		2,649	%
Other income (expenses):
Amortization of debt discount		-48	%		0	%		-45	%		0	%
Derivative expense		-4,427	%		-			-2,337	%
Unrealized gain on fair value of derivatives		1,638	%		0	%		865	%		0	%
Interest expense		-43	%		-767	%		-44	%		-311	%
Total other expense		2,880	%		-767	%		-1,561	%		-311	%
Net income (loss) before taxes		-3,333	%		-8,263	%		-2,122	%		-2,960	%
Income taxes		0	%		0	%		0	%		0	%
Net income (loss)		-3,333	%		-8,263	%		-2,122	%		-2,960

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Results of Operations

Three Months Ended June 30, 2013 compared to the Three Months Ended June 30, 2012

Revenues, net: The increase was attributable to the introduction and continued launch of our new professional model the “Caregiver” compared to the sales of our previous first generation products.

Cost of goods sold: Cost of goods sold consists of product, shipping and other costs. Cost of goods sold as a percentage of revenues, net decreased in the second quarter of 2013 as compared to the second quarter of 2012 due to the additional sales generated of the newer professional models during the 2013 period. We anticipate our costs of goods sold as a percentage of revenues, net will remain the same throughout the balance of 2013, although there are no assurances that it will.

Gross Profit: Gross profit was approximately $47,000 for the second quarter of 2013 as compared to approximately negative $5,400 during the same period in 2012, due primarily to the favorable change to our new higher margin product.

Operating Expenses: Operating expenses consist of general and administrative expenses, research and development, stock compensation and depreciation and amortization. For the second quarter of 2013, operating expenses decreased primarily as a result of decreases in officer payroll, legal and professional fees and rent expense. Although we expect our future general and administrative expenses to increase as we continue with our sales growth and acquisition plans. Research and development expenses increased for the second quarter of 2013 from second quarter of primarily due to an increase in consulting and contractor expenses. We expect our future research and development expenses to scale down as our existing products require minimal development

Other income (expense): The Company recorded derivative expense of $2,830,798 and a net unrealized gain of $1,064,837 for the three months in 2013 from the decrease in carrying value of the derivative liabilities associated with convertible promissory notes issued to an officer of the company and third party lenders.

Net Loss: Net loss for the second quarter of 2013 compared to a net loss in the second quarter of 2012 increased primarily as a result of the increases in gross profit combined with reductions in operating expenses and the derivative expense and unrealized gain in fair value of derivatives as described above.

Six Months Ended June 30, 2013 compared to the Six Months Ended June 30, 2012

Revenues, net: The increase in revenues, net for the six months ended June 30, 2013 was attributable to the continued selling and marketing of our “ Caregiver” professional thermometer model.

Cost of goods sold: Cost of goods sold as a percentage of revenues, net also decreased in six months ended June 30, 2013 from the comparable period in 2012 due to the favorable change to our new higher margin product.

Gross Profit: Gross profit was $87,000 for the six months ended June 30, 2013 as compared to $336 during the same period in 2012, due primarily to the reasons stated above.

Operating Expenses: The approximate $161,000 decrease in operating expenses for the six months ended June 30, 2013 from the comparable period in 2012 was primarily a result of a decrease in stock compensation amounting to $152,000 relating to the issuance of warrants to investors and for stock issued to consultants.

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Other income (expense): The Company recorded a net unrealized gain of $1,064,837 for the three months in 2013 from the decrease in carrying value of the derivative liabilities associated with convertible promissory notes issued to an officer of the company and third party lenders.

Net Loss : Net loss for the six months ended June 30, 2013 compared to a net loss for the six months ended June 30, 2012 increased primarily from the derivative expense and the unrealized gain in fair value of derivatives and as a result of decreases in operating expenses as described above.

Financial Condition

June 30, 2013 (unaudited) compared to December 31, 2012

Assets: At June 30, 2013 as compared to December 31, 2012, our total assets increased by approximately $503,000 or 557%, to approximately $593,000. This was primarily attributable to an increase of approximately $300,000 in our deposits paid towards our planned acquisition of Prime Time combined with increases in accounts receivable, prepaid expenses and cash.

Liabilities : At June 30, 2013, our total liabilities increased by approximately $2,035,000 or 62%, to approximately $5.3 million, attributable primarily due to $2.5 million derivative recognition, an increase of approximately $650,000 in borrowings from an affiliate of a former director and principal shareholder, borrowings of approximately $150,000 from third parties, an increase in accrued interest payable of $67,000 and an increase in accounts payable and other liabilities of approximately $51,000.

Stockholders’ Deficit : At June 30, 2013, our stockholders’ deficit increased by approximately $2.2 million, or 70%, to approximately $5.4 million, primarily due to $2.8 million in computed debt discount on convertible notes offset by an increases in paid in capital of approximately $334,000 that resulted from the issuance of stock compensation and debt conversion to equity and net income of approximately $278,000.

Liquidity and Capital Resources

At June 30, 2013 our cash on hand was approximately $72,000. Working capital was approximately negative $3,600,000 and negative $3,206,000 at June 30, 2013 and December 31, 2012, respectively.

Since our inception in 2009, we obtained our liquidity principally from approximately $2.1 million principal amount of cash advances from an affiliate of our former Chairman and CEO and one of our principal shareholders. The Company has executed promissory notes totaling approximately $1.1 million as of June 30, 2013, with CLSS Holdings, LLC (“CLSS”). Each note (a) bears annual interest at 9.0% (20% upon the occurrence, and during the continuance, of an event of default), is convertible into our common stock at a fixed conversion price of $0.50, and is not pre-payable by us, and (b) is subject to a security agreement under which all of our assets secure our loan repayment obligation. As previously reported, on May 9, 2013, the Company and CLSS agreed to terminate the pending convertible notes and issue a single replacement convertible note that includes the obligations currently provided together with the advances and accrued interest of $238,868. The original convertible notes were not delivered to the Company and accordingly, the replacement note was not issued and has been voided. On August 13, 2013 an addendum was executed covering these notes to extend the maturity of these notes to March 30, 2015. As additional consideration for the extension of the maturity date, the addendum provided for an additional 5,000,000 shares of common stock to be issued at the earlier of the consideration date or maturity..

Although we intend to increase our revenue by engaging in more aggressive sales, marketing and advertising activity designed to increase awareness of our products, there are no assurances our efforts will be successful. In addition, even if we succeed in substantially increasing our revenues, we still need substantial additional capital to pay our obligations as they become due and finance our business activities on an ongoing basis, as our revenue is insufficient to fund our operations. We have approximately $1,100,000 in secured obligations to related parties which mature in March 2015 which are secured by substantially all of our assets, and we do not have sufficient funds to pay those obligations. In addition, we also need to raise approximately $2,800,000 of capital to fund the cash portions of the purchase price of the pending acquisitions of Prime Time and Duke Medical.

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At June 30, 2013, we had approximately $72,000 in cash on hand; and unless and until we receive additional financing from third parties, which we may never achieve, in the absence of on-going cash infusions on an as needed basis by an affiliate of our former Chairman and CEO and one of our principal shareholders, we would be unable to continue to operate. If we are unable to pay our obligations as they become due, the related parties who are holders of the secured notes could seek to foreclose on our assets. In that event, we would be unable to continue our business and operations as they are now conducted and investors could lose their entire investments in our company.

Even if we are successful in raising the equity financing noted above we will require substantial additional funds to finance our business activities and acquisition strategy on an ongoing basis. There is no assurance that the additional financing we require would be available on reasonable terms, if at all; and if available, any such financing likely would result in a material and substantial dilution of the equity interests of our current shareholders. The unavailability of such additional financing could require us to delay, scale back or terminate our business activities, which would have a material adverse effect on our viability and prospects.

Summary of Cash Flow for the three months ended June 30, 2013

Our cash flows for the six months ended June 30, 2013 and 2012 were as follows:

	Six Months Ended June 30,
	2013			2012
Net cash used in operating activities	$	(685,094	)	$	(415,496	)
Net cash used in investing activities	$	-0-		$	(45)
Net cash provided by financing activities	$	731,492		$	418,500

Operating Activities

Our total cash used by operating activities increased by approximately $270,000 or 65% for the six months ended June 30, 2013, compared to the six months ended June 30, 2012. The increase is primarily due to the decreased loss, offset by the increase in non-cash items and deposit paid on the planned acquisition.

Financing Activities

Our total cash provided for financing activities increased by approximately $313,000, or 75%, to approximately $732,000 for the six months ended June 30, 2013, compared to approximately $418,000 for the six months ended June 30, 2012. The increase is primarily due to $584,000 in borrowings from an affiliate of our former Chairman and CEO and one of our principal shareholders, $150,000 in borrowings from a third party lender, offset by $371,000 raised in the Company's offering during the 2012 period.

Current Commitments for Expenditures

Our current cash commitments for expenditures are mainly operational and SEC compliance in nature. We seek to use current revenue to pay vendors for materials for contracts, for payroll, and related employment expenditures (i.e. benefits).

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Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, and results of operations, liquidity or capital expenditures.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable to smaller reporting companies.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures. We maintain “disclosure controls and procedures” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934. In designing and evaluating our disclosure controls and procedures, our management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures 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. Based on their evaluations as of the end of the period covered by this report, our President, who serves as our Principal Executive Officer, and our Chief Financial Officer have concluded that our disclosure controls and procedures were not effective such that the information relating to our company, required to be disclosed in our Securities and Exchange Commission reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and (ii) is accumulated and communicated to our management, including our Principal Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure, as a result of our failure to timely file several Current Reports on Form 8-K. Subsequent to the end of the period, we expect to institute enhanced procedures to ensure that we comply with the proper reporting procedures in future periods.

Changes in Internal Control over Financial Reporting. There have been no changes in our internal control over financial reporting during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

On May 21, 2013, Exergen Corporation commenced legal action in the United States District Court for the District of Massachusetts entitled Exergen Corp. v. Thermomedics, Inc.,etal.,Civ. Action No. 13-cv-11243, against us, claiming infringement of certain intellectual property. Exergen is seeking various types of relief, including an injunction against further infringement of certain intellectual property. While we intend to vigorously defend against the allegations set forth in the complaint, the case is still at an early stage, and we have not yet answered or otherwise responded to the complaint.

Item 1A. Risk Factors.

In addition to the risk factors disclosed in Item 1A. of our Annual Report on Form 10-K for year ended December 31, 2012, the following are additional risk factors facing our company:

If we fail to pay secured convertible notes when due, or if the holders do not elect to convert those notes, our ability to continue our business and operations could be in jeopardy.

In 2010 and 2011 we issued secured convertible notes in the aggregate principal amount of approximately $1,100,000 to a related party which originally matured between September 30, 2013 and October 1, 2013. In August 2013 we extended the maturity dates of those notes to March 30, 2015. These notes are collateralized by substantially all of our assets. We do not have the funds necessary to satisfy these obligations and there are no assurances the holders will convert the notes at or before maturity into shares of our common stock. In the event we should be unable to pay these obligations when they become due, and the holders do not convert the notes, the holders could seek to foreclose on our assets. If they are successful, we would be unable to continue our business and operations as they are presently conducted and it is possible that our stockholders would lose their entire investment in our company.

We need to raise significant capital to consummate two pending acquisitions. There are no assurances these acquisitions will be consummated

We have entered into agreements to acquire two companies, Prime Time and Duke Medical, which require us to pay a material portion of the purchase price for each transaction in cash. The terms of the Prime Time acquisition provided that if we did not close the transaction by June 26, 2013, subsequently to be extended to September 30, 2013, we were required to increase our initial deposit to a total of $400,000 and pay an additional $750,000 at closing. We have paid a total of $350,000 towards this deposit. In addition, the seller is entitled to cancel this agreement at any time and retain the $350,000 funds we have tendered to date. We are required to pay $2,000,000 in cash at the closing of the Duke Medical acquisition. We need to raise capital to fund these acquisitions, but so far we have been unable to obtain commitments for the necessary capital. Accordingly, there are no assurances we will close one of both of these pending acquisitions, and it is possible that we will forfeit the $350,000 deposit paid to date in connection with the Prime Time acquisition.

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From time to time we engage in related party transactions, the terms of which are not negotiated on an arms length basis.

In June 2013 we issued a $703,339 principal amount convertible promissory note to Mr. Houlihan, our President, in satisfaction of accrued but unpaid salary due him. This note, which bears interest at 9% per annum, is due on March 30, 2105. The note is convertible at Mr. Houlihan’ s option into shares of our common stock at the lesser of (a) the average of the lowest three closing bid prices for the 10 trading days prior to the notice of conversion, or (b) $0.50 per share. This conversion price is subject to reduction if we should issue or sell shares of our common stock or common stock equivalents at a price less than the then conversion price to such lower price.

In August 2013 CLSS, a related party, agreed to extend the maturity date of secured convertible notes representing approximately $1.1 million in obligations from September 2013 and October 2013 to March 2015. As additional consideration, we agreed to issue the lender 5,000,000 shares of our common stock at the conversion date or maturity date of those notes. We will recognize an expense equal to the fair market value of these shares when issued. While these transactions were approved by our Board of Directors, Mr. Houlihan is one of our two directors and these transactions were not negotiated on an arms-length basis. There are no assurances that the terms of these transactions are as fair to our company as we might receive from unaffiliated third parties.

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

On June 28, 2013, the Company issued a total of 25,895 shares of common stock to a public relations firm as settlement of its services valued at $1.50 per share. As a result, the Company recorded stock compensation in the amount of $38,842 for the three months ended June 30, 2013. The recipients were accredited or otherwise sophisticated investors who had access to financial and business information concerning the Company. The issuances were exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(2) of that act.

As previously disclosed, on December 6, 2012, the Company entered into a Securities Purchase Agreement and convertible promissory note in the principal amount of $37,500. The note, which was due on August 29, 2013, bore interest at 8% per annum until paid or to maturity and was convertible into shares of the Company’s common stock, at the election of the lender, at any time after 180 days from issuance date of the note at a conversion price equal to a 42% discount to the average of the lowest three closing bid prices of the common stock during the 10 trading days prior to conversion. On June 11, 2013 and June 28, 2013 the holder converted the note into a total of 29,128 shares of the Company’s common stock at a conversion price of $1.36 per share. The recipient was an accredited investor and the issuances were exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 3(a)(9) of that act.

On June 17, 2013, we issued Mr. Keith Houlihan, our President, a promissory note in the principal amount of $703,339.33 in satisfaction of all amounts due him for accrued but unpaid salary. The recipient was an accredited investor and the issuance was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(2) of that act.

This note bears interest at the rate of 9% per annum and is due on March 30, 2015. At Mr. Houlihan’ s option, the note is convertible into shares of our common stock at the lesser of (a) the variable conversion price equal to the average of the lowest three closing bid prices for the 10 trading days prior to the notice of conversion, or (b) $0.50 per share. This conversion price is subject to adjustment in the event we should issue or sell shares of our common stock or common stock equivalents, other than issuances under employee stock option plans) at a price less than the then conversion price. In that event, the conversion price of the note will be reduced to this lesser amount. The principal and accrued interest become immediately due in the event of certain events, including our failure to pay any amounts due under the note, our dissolution, insolvency, or bankruptcy, among other events. We agreed to indemnify the holder against and claims or losses arising out of our obligations under the note.

The description of the terms and conditions of this note is qualified in its entirety by reference to such note which is filed as Exhibit 10.43 to this report.

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Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable to our company’s operations.

Item 5. Other Information.

As previously disclosed, we owed CLSS, a related party, approximately $1.1 million under secured convertible promissory notes which were originally due on September 30, 2013 and October 1, 2013. The secured convertible promissory notes are collateralized by substantially all of our assets and are convertible, at the holder's option, into shares of our common stock at a fixed conversion price ranging of $0.50 per share. CLSS is wholly owned by our former CEO who also is a principal shareholder of our company and a former director. In May 2013, the Company and CLSS agreed to terminate the individual convertible notes and issue a single replacement convertible note that included the obligations currently provided together with the advances and accrued interest of $238,868. The replacement note was for a total of $1,740,786. Additionally the replacement note extended the maturity date to March 30, 2015. Subsequently, CLSS was unable to delivery the original convertible notes for exchange, and we did not issue the replacement note, which has been voided. Thereafter, on August 13, 2013 an agreement was executed covering these notes to extend the maturity of these notes to March 31, 2015.

In August 12, 2013 the Company issued 6,000,000 shares of its common stock upon the conversion of $6,000 portion of Convertible Note due to CLSS originally at $220,000 and sold to six (6) third parties by the original holder, with the shares valued at current fair market totaling $11,940,000.

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Item 6. Exhibits.

No.	Description
10.41	$500,000 Promissory Note dated June 19, 2013 payable to JMJ Financial Duke (incorporated by reference to the Current Report on Form 8-K as filed on June 24, 2013).
10.42	Equity Purchase Agreement dated July 10, 2013 by and among Sanomedics International Holdings, Inc., Anovent, Inc., Duke Medical Equipment LLC and Vann R. Duke (incorporated by reference to the Current Report on Form 8-K as filed on July 16, 2013).
10.43	$703,339.33 principal amount Promissory Note dated June 17, 2013 payable to Keith Houlihan.*
10.44	[EXTENSION OF CLSS NOTES]
10.45	[EXTENSION OF PRIME MEDICAL AGREEMENT]
31.1	Rule 13a-14(a)/ 15d-14(a) Certification of principal executive officer*
31.2	Rule 13a-14(a)/ 15d-14(a) Certification of principal financial and accounting officer *
32.1	Section 1350 Certifications of President and Chief Financial Officer*
101.INS	XBRL INSTANCE DOCUMENT **
101.SCH	XBRL TAXONOMY EXTENSION SCHEMA **
101.CAL	XBRL TAXONOMY EXTENSION CALCULATION LINKBASE **
101.DEF	XBRL TAXONOMY EXTENSION DEFINITION LINKBASE **
101.LAB	XBRL TAXONOMY EXTENSION LABEL LINKBASE **
101.PRE	XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE **

____________

*  filed herewith

** In accordance with Regulation S-T, the XBRL-formatted interactive data files that comprise Exhibit 101 in this Quarterly Report on Form 10-Q shall be deemed “furnished” and not “filed”.

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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.

	Sanomedics International Holdings, Inc.
Dated: August 19, 2013	By:	/s/ Keith Houlihan
		Keith Houlihan, President
	By:	/s/ David C. Langle
		David C. Langle, Chief Financial Officer

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EX-10.43

EXHIBIT 10.43

PROMISSORY NOTE

$703,339.33 June 17, 2013 Miami, Florida

WHEREAS, Keith Houlihan (“Houlihan”) is a member of the Board and President of Sanomedics International Holdings, Inc., a Delaware corporation (the “Company”), is owed accrued, unpaid salary from the Company in the aggregage amount of $703,339.33;

WHEREAS, the Company and Houlihan wish to issue a convertible note that includes the obligations currently represented as accrued salary pursuant to the terms as set forth in this note.

FOR VALUE RECEIVED, the undersigned, Sanomedics International Holdings, Inc., a Delaware corporation ("Maker" or the “Company”), hereby promises to pay to the order of Keith Houlihan, a director and officer of Maker ("Holder") the principal sum of Seven Hundred Three Thousand Three Hundred Thirty Nine and 33/100 Dollars ($703,339.33)(the “Principal Amount”), on or by March 30, 2015 (the "Maturity Date"), plus accrued and unpaid interest as set forth below.

1.  Principal and interest shall be payable in lawful money of the United States of America in immediately available funds, without any deduction, setoff or counterclaim, at the address of Holder specified herein.

2.This Note shall bear interest on the unpaid principal amount hereof commencing on the date hereof at a rate of 9% per annum. Upon the occurrence and during the continuance of an Event of Default, interest shall accrue on the unpaid principal amount of this Note, from the date of such default until the earlier of the date the principal sum is paid in full or, if applicable, the date such default is cured, at the rate of 15% per annum (but not higher than the applicable maximum rate provided by law).  Accrued interest on the outstanding principal amount of this Note shall be payable on the Maturity Date, unless accelerated as a result of the occurrence of an Event of Default as set forth below. The principal amount of this Note may not be prepaid without the prior written consent of the Holder which may be withheld for any reason.

3.This Note and any ancillary documents entered into in connection therewith, each as amended, extended or modified from time to time, are referred to collectively herein as the "Transaction Documents".

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4. (a) Prepayment Conversion.  Notwithstanding anything contained in this Note to the contrary, Holder of this Note is entitled, at his option, at any time after the issuance of this Note, to convert all or any lesser portion of the Principal Amount and accrued but unpaid interest into common stock of the Maker (“Common Stock”) at a conversion price for each share of Common Stock equal to at a price (the “Conversion Price”) which is equal to the lesser of: (i) the Variable Conversion Price (as defined herein); and (ii) the Fixed Conversion Price (as defined herein) (subject, in each case, to equitable adjustments for stock splits, stock dividends or rights offerings by the Maker relating to the Maker’s securities or the securities of any subsidiary of the Maker, combinations, recapitalization, reclassifications, extraordinary distributions and similar events).  The “Variable Conversion Price” shall mean the Applicable Percentage (as defined herein) multiplied by the Market Price (as defined herein).  “Market Price” means the average of the lowest three (3) Trading Prices (as defined below) for the Common Stock during the ten (10) Trading Day period ending one Trading Day prior to the date the Conversion Notice is sent by the Holder to the Maker via facsimile (the “Conversion Date”).  “Trading Price” means, for any security as of any date, the closing bid price on the Over-the-Counter Bulletin Board, or applicable trading market (the “OTCBB”) as reported by a reliable reporting service (“Reporting Service”) mutually acceptable to Maker and Holder, or, if the OTCBB is not the principal trading market for such security, the closing bid price of such security on the principal securities exchange or trading market where such security is listed or traded or, if no closing bid price of such security is available in any of the foregoing manners, the average of the closing bid prices of any market makers for such security that are listed in the “pink sheets” by the National Quotation Bureau, Inc.  If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by the Maker and the holders of a majority in interest of the Notes being converted for which the calculation of the Trading Price is required in order to determine the Conversion Price of such Notes.  “Trading Day” shall mean any day on which the Common Stock is traded for any period on the OTCBB, or on the principal securities exchange or other securities market on which the Common Stock is then being traded.  “Applicable Percentage” shall mean 50%. “Fixed Conversion Price” shall mean $0.50. (The Common stock into which the Note is converted shall be referred to in this agreement as “Conversion Shares”),

(b) The Company will not issue fractional shares or scrip representing fractions of shares of Common Stock on conversion, but the Company will round the number of shares of Common Stock issuable up to the nearest whole share.  The date on which a Notice of Conversion is given shall be deemed to be the date on which the Holder notifies the Company of its intention to so convert by delivery, by facsimile transmission or otherwise, of a copy of the Notice of Conversion.  Notice of Conversion may be sent by facsimile to the Company, Attn: Keith Houlihan, Fax.: 305-433-5129.  Upon receipt of the Notice of Conversion, the Company shall immediately cause the issuance of the shares of common stock subject to the notice.  The Holder will deliver this Note, together with original executed copy of the Notice of Conversion, to the Company within three (3) business days following the Conversion Date.  At the Maturity Date, the Company will pay any unconverted Outstanding Principal Amount and accrued Interest thereon, at the option of the Holder, in either (a) cash or (b) Common Stock valued at a price equal to the Conversion Price determined as if the Note was converted in accordance with its terms into Common Stock on the Maturity Date.

(c) Adjustment Due to Dilutive Issuance.  If, at any time when the Note is issued and outstanding, the Company issues or sells, or in accordance with this Section 4(c) hereof is deemed to have issued or sold, any shares of Common Stock for no consideration or for a consideration per share (before deduction of reasonable expenses or commissions or underwriting discounts or allowances in connection therewith) less than the Conversion Price in effect on the date of such issuance (or deemed issuance) of such shares of Common Stock (a “Dilutive Issuance”), then immediately upon the Dilutive Issuance, the Conversion Price will be reduced to the amount of the consideration per share received by the Company in such Dilutive Issuance.

2

The Company shall be deemed to have issued or sold shares of Common Stock if the Company in any manner issues or grants any warrants, rights or options (not including employee stock option plans), whether or not immediately exercisable, to subscribe for or to purchase Common Stock or other securities convertible into or exchangeable for Common Stock (“Convertible Securities”) (such warrants, rights and options to purchase Common Stock or Convertible Securities are hereinafter referred to as “Options”) and the price per share for which Common Stock is issuable upon the exercise of such Options is less than the Conversion Price then in effect, then the Conversion Price shall be equal to such price per share.  For purposes of the preceding sentence, the “price per share for which Common Stock is issuable upon the exercise of such Options” is determined by dividing (i) the total amount, if any, received or receivable by the Company as consideration for the issuance or granting of all such Options, plus the minimum aggregate amount of additional consideration, if any, payable to the Company upon the exercise of all such Options, plus, in the case of Convertible Securities issuable upon the exercise of such Options, the minimum aggregate amount of additional consideration payable upon the conversion or exchange thereof at the time such Convertible Securities first become convertible or exchangeable, by (ii) the maximum total number of shares of Common Stock issuable upon the exercise of all such Options (assuming full conversion of Convertible Securities, if applicable).  No further adjustment to the Conversion Price will be made upon the actual issuance of such Common Stock upon the exercise of such Options or upon the conversion or exchange of Convertible Securities issuable upon exercise of such Options.

Additionally, the Company shall be deemed to have issued or sold shares of Common Stock if the Company in any manner issues or sells any Convertible Securities, whether or not immediately convertible (other than where the same are issuable upon the exercise of Options), and the price per share for which Common Stock is issuable upon such conversion or exchange is less than the Conversion Price then in effect, then the Conversion Price shall be equal to such price per share.  For the purposes of the preceding sentence, the “price per share for which Common Stock is issuable upon such conversion or exchange” is determined by dividing (i) the total amount, if any, received or receivable by the Company as consideration for the issuance or sale of all such Convertible Securities, plus the minimum aggregate amount of additional consideration, if any, payable to the Company upon the conversion or exchange thereof at the time such Convertible Securities first become convertible or exchangeable, by (ii) the maximum total number of shares of Common Stock issuable upon the conversion or exchange of all such Convertible Securities.  No further adjustment to the Conversion Price will be made upon the actual issuance of such Common Stock upon conversion or exchange of such Convertible Securities.

5. The unpaid principal amount of this Note, the accrued interest thereon and all other obligations of Maker hereunder (collectively, the "Obligations"), at the option of Holder, shall become immediately due and payable upon the occurrence of any of the following events of default ("Events of Default"):

(a) Maker shall fail to pay: (i) any principal or accrued interest under this Note within ten (10) days after the Maturity Date; or (ii) any of the other monetary Obligations to be paid by it under this Note within ten (10) days of the due date for payment of same.

(b) Maker shall default in the observance or performance of any material agreements, covenants or conditions contained in: (i) this Note, the Transaction Documents or in any other document or instrument referred to herein or therein (except the failure to pay monetary Obligations); or (ii) any agreement by and between the Maker and the Holder; and fail to cure such default within ten (10) business days of the date Maker obtains notice thereof whether from Holder or otherwise.

3

(c) Any present or future representation or warranty made by or on behalf of Maker whether contained herein or in any of the other document shall be false or incorrect in any material respect when such representation or warranty is made.

(d) The occurrence of any of the following with respect to Maker: dissolution; termination of existence; insolvency; business cessation; calling of a meeting of creditors; appointment of a receiver for any property; assignment for the benefit of creditors or admit in writing its inability to pay its debts as they become due; voluntary commencement of any proceeding under any bankruptcy or insolvency law; commencement of any involuntary proceeding under any bankruptcy or insolvency law and if any such involuntary proceeding is not dismissed within 45 days or the relief requested is granted; entry of a court order which enjoins or restrains the conduct of business in the ordinary course.

6. Maker shall reimburse Holder for all costs and expenses incurred by Holder and shall pay the reasonable fees, disbursements and out of pocket expenses of counsel to Holder in connection with the enforcement of Holder's rights hereunder.  Maker shall also pay any and all taxes (other than taxes on or measured by net income of the holder of this Note) recording fees, filing charges, search fees or similar items incurred or payable in connection with the execution and delivery of this Note.

7. Maker waives demand, presentment, protest and notice of any kind and consents to the release, surrender or substitution of any and all security or guarantees for the Obligations evidenced hereby or other indulgence with respect to this Note, all without notice.

8. Maker shall indemnify, defend and save Holder harmless from and against any and all claims, liabilities, losses, costs and expenses (including, without limitation, reasonable attorneys' fees, disbursements and out of pocket expenses) of any nature whatsoever which may be asserted against or incurred by Holder arising out of or in any manner occasioned by or any failure by Maker to perform any of its Obligations hereunder.

9. Maker agrees to do such further acts and to execute and deliver to Holder such additional agreements, instruments and documents as Holder may reasonably require or deem advisable to effectuate the purposes of this Note, or to confirm to Holder its rights, powers and remedies under this Note.

10. (a)  Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered or transmitted personally by messenger, by recognized overnight courier, telecopied or mailed (by registered or certified mail, postage prepaid) as follows:  

4

(i) If to Maker, one copy to:

Sanomedics International Holdings, Inc.

444 Brickell Avenue, Suite 415

Miami, Florida 33131

(ii)  If to the Holder:

Keith Houlihan

c/o Sanomedics International Holdings, Inc.

444 Brickell Avenue, Suite 415

Miami, Florida 33131

(b) Each such notice or other communication shall be effective: (i) if given by telecopier, when such telecopy is transmitted to the telecopier number specified in Section 10(a) (with confirmation of transmission received by the sender); or (ii) if given by any other means, when received at the address specified in Section 10(a).  Any party by notice given in accordance with this Section 10 to the other party may designate another address (or telecopier number) or person for receipt of notices hereunder.

11. This Note contain the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements, written or oral, with respect thereto including the Convertible Notes which upon the execution and delivery of this Note shall be terminated and of no further force or effect.

12. This Note may be amended, superseded, cancelled, renewed or extended only by a written instrument signed by Holder and Maker.  Any provisions hereof may be waived by a party but any such waiver must be in writing signed by such party and any such waiver shall be effective only in the specific instance and for the specific purpose for which given.  No delay on the part of any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any party of any such right, power or privilege, nor any single or partial exercise of any such right, power or privilege, preclude any further exercise thereof or the exercise of any other such right, power or privilege.  The rights and remedies herein provided are cumulative and are not exclusive of any rights or remedies that any party may otherwise have at law or in equity.

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13. This Agreement shall be governed by and construed in accordance with the laws of the State of Florida applicable to agreements made and to be performed entirely within such State, without regard to the conflict of laws rules thereof.

14. Maker irrevocably: (a) agrees that any suit, action or other legal proceeding arising out of this Agreement may be brought in the courts of the State of Florida or the courts of the United States located in Dade County, Florida; (b) consents to the jurisdiction of each court in any such suit, action or proceeding; (c) waives any objection which it may have to the laying of venue of any such suit, action or proceeding in any of such courts; (d) waives the right to assert any counterclaim in any such suit, action and proceeding; and (e) waives the right to a trial by jury in any such suit, action or other legal proceeding.  

15. This Note and all of its provisions, rights and Obligations shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors, assigns and legal representatives.  Nothing herein express or implied is intended or shall be construed to confer upon or to give anyone other than the parties hereto and their respective heirs, legal representatives and successors any rights or benefits under or by reason of this Agreement and no other party shall have any right to enforce any of the provisions of this Agreement.  This note may be transferred or assigned by the Holder, in full or in part.

16. If any provision of this Note for any reason shall be held to be illegal, invalid or unenforceable, such illegality shall not affect any other provision of this Note, but this Note shall be construed as if such illegal, invalid or unenforceable provision had never been included herein.

6

IN WITNESS WHEREOF, the undersigned has executed this Promissory Note as of the date first written above.

ATTEST:	MAKER: Sanomedics International Holdings, Inc.,
/s/  Miriam Sardinas	By:	/s/ David Langle
		Name: David Langle
		Title: Chief Financial Officer and by resolution of the members of the Board of Directors)

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Exhibit A

Conversion Notice

NOTICE OF CONVERSION

The undersigned hereby elects to convert $____________ principal amount of the Note (defined below) into that number of shares of Common Stock to be issued pursuant to the conversion of the Note (“Common Stock”) as set forth below, of Sanomedics International Holdings, Inc., a Delaware corporation (the “Borrower”) according to the conditions of the convertible note of the Borrower dated as of [insert date of note] (the “Note”), as of the date written below.  No fee will be charged to the Holder for any conversion, except for transfer taxes, if any.  

Box Checked as to applicable instructions:

[ ] The Borrower shall electronically transmit the Common Stock issuable pursuant to this Notice of Conversion to the account of the undersigned or its nominee with DTC through its Deposit Withdrawal Agent Commission system (“DWAC Transfer”).

Name of DTC Prime Broker:   

Account Number:  

[  ] The undersigned hereby requests that the Borrower issue a certificate or certificates for the number of shares of Common Stock set forth below (which numbers are based on the Holder’s calculation attached hereto) in the name(s) specified immediately below or, if additional space is necessary, on an attachment hereto:

Date of Conversion:  

Applicable Conversion Price:

Number of Shares of Common Stock to be Issued Pursuant to

Conversion of the Notes:  

Amount of Principal Balance Due on Note being Converted:

BY_____________________________

Name:

Date: _________

Address:

 8

EX-31.1

EXHIBIT 31.1

Rule 13a-14(a)/15d-14(a) Certification

I, Keith Houlihan, certify that:

1. I have reviewed this report on Form 10-Q for the period ended June 30, 2013 of Sanomedics International Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting 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 (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated: August 19, 2013	By:	/s/ Keith Houlihan
		Keith Houlihan President, principal executive officer

EX-31.2

EXHIBIT 31.2

Rule 13a-14(a)/15d-14(a) Certification

I, David C. Langle, certify that:

1. I have reviewed this report on Form 10-Q for the period ended June 30, 2013 of Sanomedics International Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting 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 (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated: August 19, 2013	By:	/s/ David C. Langle
		David C. Langle Chief Financial Officer, principal financial and accounting officer

EX-32.1

EXHIBIT 32.1

Section 1350 Certification

In connection with the Quarterly Report of Sanomedics International Holdings, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2013 as filed with the Securities and Exchange Commission (the “Report”), I, Keith Houlihan, President, and David C. Langle, Chief Financial Officer, of the Company, certify, pursuant to 18 U.S.C. SS. 1350, as adopted pursuant to SS. 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, as amended, and

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

Dated: August 19, 2013	By:	/s/ Keith Houlihan
		Keith Houlihan President, principal executive officer
Dated: August 19, 2013	By:	/s/ David C. Langle
		David C. Langle Chief Financial Officer, principal financial and accounting officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signatures that appear in typed form within the electronic version of this written statement 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.

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NOTES PAYABLE -RELATED PARTY (Details) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Total Notes	$ 1,102,787	$ 1,102,787
Other advances from CLSS Holdings, Inc, LLC, not evidenced by a promissory Note	858,132	276,640
Notes payable - related party	1,960,919	1,379,427
Less: Current portion	858,132	1,379,427
Notes Payable-related parties	1,102,787
Secured Convertible Promissory Note September 30, 2010 [Member]
Total Notes	181,000	181,000
Secured Convertible Promissory Note March 12, 2011 [Member]
Total Notes	367,000	367,000
Secured Convertible Promissory Note September 30, 2011 [Member]
Total Notes	220,000	220,000
Secured Convertible Promissory Note One March 12, 2011 [Member]
Total Notes	$ 334,787	$ 334,787

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Consolidated Statements of Operations (Unaudited) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Consolidated Statements Of Operations
Revenues, net	$ 63,941	$ 7,101	$ 121,079	$ 35,028
Cost of goods sold	17,021	12,461	33,592	34,692
Gross profit (loss)	46,920	(5,360)	87,487	336
Operating expenses
General and administrative	269,676	320,987	453,808	547,828
Research and development	25,750		53,500	8,500
Stock compensation	38,842	204,888	255,738	369,751
Depreciation and amortization	1,899	1,061	3,798	2,122
Total operating expenses	336,167	526,936	766,844	928,201
Loss from operations	(289,247)	(532,296)	(679,357)	(927,865)
Other income (expense)
Amortization of debt discount	(30,898)		(54,337)
Derivative expense	(2,830,798)		(2,830,798)
Unrealized gain on fair value of derivatives	1,047,628		1,047,628
Interest expense	(27,092)	(54,489)	(53,115)	(108,956)
Total other income (expense)	(1,841,160)	(54,489)	(1,890,622)	(108,956)
Net income (loss) before income taxes	(2,130,407)	(586,785)	(2,569,979)	(1,036,821)
Income taxes
Net income (loss)	$ (2,130,407)	$ (586,785)	$ (2,569,979)	$ (1,036,821)
Net income (loss) per share - basic and diluted	$ (0.10)	$ (0.04)	$ (0.13)	$ (0.07)
Weighted average number of shares outstanding during the period - basic and diluted	20,410,102	14,258,939	20,454,423	14,258,939

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DERIVATIVE LIABILITIES

6 Months Ended

Jun. 30, 2013

Notes to Financial Statements

NOTE 5 - DERIVATIVE LIABILITIES

The Company analyzed the related party convertible note-officer and convertible promissory notes referred to in Notes 3 and 4 based on the provisions of ASC 815-15 and determined that the conversion options of the convertible notes qualify as embedded derivatives.

The fair value upon inception of the embedded derivatives are determined to total $2,915,188 and recorded as embedded derivative liabilities. The embedded derivatives are revalued at the end of each reporting period and any resulting gain or loss is recognized as a current period charge to the statement of operations.

The Company accounts for the embedded conversion features included in its common stock as well as derivative liabilities. The aggregate fair value of derivative liabilities as of June 30, 2013 and December 31, 2012 amounted to $1,847,560 and $40,697, respectively. The net decrease of $1,047,628 in the fair value of the derivative liabilities between the respective periods is included in other income as an unrealized gain on fair value of derivatives.

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NOTES PAYABLE -RELATED PARTY (Details Narrative) (USD $)	Jun. 30, 2013
Notes Payable -Related Party Details Narrative
Advances and accrued interest	$ 238,868

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ORGANIZATION AND BASIS OF PRESENTATION

6 Months Ended

Jun. 30, 2013

Notes to Financial Statements

NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION

Sanomedics International Holdings, Inc. (referred to herein as “we”, “us”, “our” or the “Company”) formerly Grand Niagara Mining and Development Co, Inc. ("Grand Niagara") was originally incorporated in the state of Idaho in 1955 and re-domiciled in the state of Delaware on April 6, 2009. The Company, through its subsidiaries, designs, develops, markets and distributes non-invasive infrared thermometers principally for consumer and pet home health care.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission for interim financial information. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. It is management's opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation. The results for the interim period are not necessarily indicative of the results to be expected for the full year.

The unaudited interim financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K, which contains the audited consolidated financial statements and notes thereto, together with the Management’s Discussion and Analysis, for the fiscal year ended December 31, 2012. The interim results for the three and six months ended June 30, 2013 are not necessarily indicative of the results for the full fiscal year.

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NOTES PAYABLE -RELATED PARTY

6 Months Ended

Jun. 30, 2013

Notes to Financial Statements

NOTE 3 - NOTES PAYABLE -RELATED PARTY

	June 30,		December 31,
	2013		2012
Notes Payable consists of the following:
Secured Convertible Promissory Note - CLSS Holdings, LLC, dated September 30, 2010. Note accrues interest at 9% per annum, due and payable on October 1, 2013(A)	$	181,000	$	181,000
Secured Convertible Promissory Note - CLSS Holdings, LLC, dated March 12, 2011. Note accrues interest at 9% per annum, due and payable on October 1, 2013 (A)		367,000		367,000
Secured Convertible Promissory Note - CLSS Holdings, LLC, dated September 30, 2011. Note accrues interest at 9% per annum, due and payable on September 30, 2013(A)		220,000		220,000
Secured Convertible Promissory Note - CLSS Holdings, LLC, dated March 12, 2011. Note accrues interest at 7.5% per annum, due and payable on October 1, 2013 (A)		334,787		334,787
Convertible Promissory Note-Officer, dated June 17, 2013. Note accrues interest at 9% per annum, due and payable on March 30, 2015, net of discount of $703,339 (B) Refer to Note 5		-		-
Total		1,102,787		1,102,787
Other advances from CLSS Holdings, LLC, not evidenced by a promissory Note (A)		858,132		276,640
		1,960,919		1,379,427
Less: Current portion		858,132		1,379,427
Notes Payable-related parties	$	1,102,787	$	-

The secured convertible promissory notes above are collateralized by substantially all the assets of the Company and are convertible, at the holder's option, into common shares of the Company at a fixed conversion price of $0.50 per share. CLSS is wholly owned by the Company's Former CEO who also is a principal shareholder of the Company.

(A)   On May 9, 2013, the Company and an affiliate of the Company’s former CEO agreed to terminate each of the above listed convertible notes and issue a single replacement convertible note that includes the obligations currently provided together with the advances and accrued interest of $238,868. The original convertible notes were not delivered to the Company and accordingly, the replacement note was not issued and voided. On August 13, 2013 an agreement was executed covering these Notes to extend the maturity of these Notes to March 31, 2015.

(B)   On June 17, 2013, the Company and its President and a principal stockholder of the Company and a Director agreed to convert accrued salary totaling $703,339 into a long term convertible note as reflected above. The Note isconvertible, at the holder's option, into common shares of the Company at a fixed conversion price of $0.50 per share.

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COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2013

Notes to Financial Statements

NOTE 6 - COMMITMENTS AND CONTINGENCIES

Litigation

From time to time, the Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm its business.

On May 21, 2013, Exergen Corporation commenced legal action in the United States District Court for the District of Massachusetts against us, claiming infringement of certain intellectual property. Exergen is seeking various types of relief, including an injunction against further infringement of certain intellectual property. Given the inherent uncertainty and unpredictability of litigation and due to the early status of this legal action, no range of loss or possible loss can be reasonably estimated at this time. However, we do not expect the outcome of this matter to have a material adverse effect on our consolidated financial statements when taken as a whole. As of June 30, 2013 and through the date of this filing, no amount is accrued as a loss is not considered probable or estimable.

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CONVERTIBLE NOTES PAYABLE

6 Months Ended

Jun. 30, 2013

Notes to Financial Statements

NOTE 4 - CONVERTIBLE NOTES PAYABLE

On August 24, 2012, the Company executed a convertible note for $75,000. The convertible note is unsecured and has a maturity date of August 24, 2014. Interest will accrue at 9% per annum until paid or maturity and is convertible into common shares at a fixed convertible price of $0.50 per share. In the event that the Company undertakes financing while this debt is unpaid, the holder shall have the right to convert at the lessor of the offering price or the fixed conversion price. As of June 30, 2013 and December 31, 2012, the convertible note amounted to $31,250 and $12,500, net of unamortized discounts of $43,750 and $62,500, respectively.

On December 6, 2012, the Company entered into a Securities Purchase Agreement and convertible promissory note (“Note”) in the principal amount of $37,500. The Note, which was due on August 29, 2013, bears interest at 8% per annum until paid or to maturity was converted on June 11, 2013 and June 18, 2013 into a total of 29,128 shares of the Company’s common stock at a conversion price equal to a 42% discount to the average of the lowest three closing bid prices of the common stock during the 10 trading days prior to conversion or $1.36 and $1.36 per share. As of June 30, 2013 and December 31, 2012, the convertible note amounted to $ -0- and $4,688, net of unamortized discount of $37,500 and $32,812, respectively.

On June 17, 2013, the Company entered into a Promissory Note (the “Note”) with a third party lender (“Lender”) in the principal amount up to $500,000. On June 19, 2013, the Lender executed the Note and funded the Company an initial tranche of $150,000 pursuant to the terms thereof. The principal sum of the Note carries a $50,000 original issue discount (“OID”) , which is prorated based on the consideration paid by the lender. The maturity date of each tranche funded under the Note is one year from the date of each payment by the Lender. The principal amount of the Note due is prorated based upon the consideration actually paid to us, plus a 10% OID, and we are only obligated to repay the amount of the funded Note, together with interest and fees. The Note may be prepaid by us at any time on or before 90 days from the date of issue interest free. After the initial 90 day period the Note bears a one-time interest charge of 12% applied to the principal sum. All principal and accrued interest on the Note is convertible into shares of the Company’s common stock at the election of the Lender at any time at a conversion price of the lesser of $2.75 or 70% of the lowest trade price in the 25 trading days prior to conversion. At all times while the Note is outstanding we agreed to reserve from our authorized but unissued shares of common stock 550,000 shares for the possible conversion of the Note; plus provide registration rights. As of June 30, 2013, the Note amounted to $68,385 , net of unamortized discount of $81,615.

In accordance with ASC 470-20 Debt with Conversion and Other Options, the Company recorded total discounts of $125,365 and $0 for the beneficial conversion features of the convertible debts incurred during the periods ended June 30, 2013 and June 30, 2012, respectively. The discounts are being amortized to interest expense over the term of the notes using the effective interest method. The Company recorded $54,337 and $-0- of interest expense pursuant to the amortization of the note discounts for the six months ended June 30, 2013 and for the six months  ended June 30, 2012, respectively; and $30,898 and $ -0- for the three months ended June 30, 2013 and June 30, 2012.

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Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Stockholders' Deficit
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	1,000	1,000
Preferred stock, shares issued	1,000	1,000
Preferred stock, shares outstanding	1,000	1,000
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	250,000,000	250,000,000
Common stock, shares issued	20,508,609	20,403,586
Common stock, shares outstanding	20,508,609	20,403,586

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SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2013

Notes to Financial Statements

NOTE 9 - SUBSEQUENT EVENTS

Pending Acquisition

On July 10, 2013, the Company entered into an Equity Purchase Agreement (the “Equity Purchase Agreement ”) with Duke Medical Equipment LLC, a Texas limited liability company (“Duke Medical”) and Vann R. Duke, the sole equity holder of Duke (“Duke”). Duke Medical is a Durable Medical Equipment provider of home medical equipment servicing consumers throughout the Houston and Galveston, Texas area.

Pursuant to the Equity Agreement, at the closing Duke will transfer to the Company all the membership interest of Duke Medical for an aggregate purchase price of $7,000,000, subject to certain adjustments as summarized herein. The purchase price will be paid in a combination of cash, promissory notes and shares of the Company’s common stock. On the closing date the Company will make a total cash payment to the Seller of $2,000,000.

Additionally, at closing, the Company will issue two additional promissory notes (the “Duke Medical Notes A and B”) to Duke in the aggregate principal amount of $2,000,000. Duke Medical Note A in the principal amount of $1,000,000 will bear interest at 5% per annum, with monthly payments of principal and interest, and will mature eighteen (18) months after the closing date. Duke Medical Note B in the principal amount of $1,000,000 will bear interest at 5% per annum, with annual payments of interest and principal payable annually over two years from the date of closing provided; however, that the principal balance of Duke Medical Note B (and the respective annual payment) shall be reduced if: (i) EBITDA for the fiscal year ended December 31, 2013 is less than $1,500,000; and/or (ii) the EBITDA for the fiscal year ended December 31, 2014 is less than $1,500,000. At Duke’s option, Duke Medical Note B can be paid in shares of common stock of the Buyer on terms acceptable to Duke and the Company.

Total consideration also includes $3,000,000 in the form of shares, with the number of shares to be issued to be determined at closing by dividing $3,000,000 by the average of the closing bid price for the Company’s common stock as quoted on the OTC Bulletin Board, the OTC Pink Sheets or other similar quotation system, as applicable, for the five (5) trading days immediately preceding the closing (the “Duke Medical Original Issuance Price”).

The Equity Purchase Agreement also requires the Company to enter at closing into employment agreements with Duke and his spouse for certain management services and; also contains a covenant of Duke and his spouse not to compete with the Company for a two year period.

The Equity Purchase Agreement further provides that the Company will engage its independent registered public accounting firm to conduct an audit of Duke Medical’s financial statements for the years ended December 31, 2011 and 2012. If, for any reason the audit cannot be concluded, the Company will not be required to pay any amounts due under the Duke Medical Notes A or B and such notes will be cancelled. The Company, however, has no right to receive a refund of the cash portion of the purchase price as tendered or to effect a cancellation of the Shares. In addition, if Duke Medical’s total asset value at December 31, 2012 as determined in accordance with the audited financial statements is less than the value set forth on the financial statements previously provided to the Company, the purchase price will be reduced by such amount on a dollar for dollar basis through a return of a number of Shares equal to such deficiency, and, if the deficiency is greater than the Duke Medical Original Issue Price, through a set off of the amount which will be due under Duke Medical Note A.

Share Issuances:

In August 12, 2013 the Company issued 6,000,000 shares of its common stock upon the conversion of $6,000 portion of Convertible Note due to CLSS originally at $220,000 and sold to six (6) third parties by the original holder, with the shares valued at current fair market totaling $11,940,000.

Management has evaluated the subsequent events through August 19, 2013, the date at which the condensed consolidated financial statements were available for issue.

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Consolidated Statements of Cash Flows (USD $)	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (2,569,979)	$ (1,036,821)
Adjustments to reconcile net income (loss) to net cash used in operating activities
Depreciation and amortization	3,798	2,122
Stock compensation	255,738	369,751
Amortization of debt discount on convertible notes	337
Derivative expense	2,830,798
Unrealized gain on fair value of derivative liabilities	(1,047,628)
Changes in operating assets and liabilities
Accounts receivable	(41,259)	(4,600)
Inventory	(147)	29,867
Deposit on planned acquisition	(400,000)
Prepaid expense	(10,810)	1,926
Deposits	(7,999)
Bank overdraft		(4,522)
Accrued salaries payable	69,392	131,539
Accounts payable and other liabilities	50,950	(34,240)
Accrued interest payable	66,856	108,935
Due to related parties	60,859	20,547
Net Cash Used In Operating Activities	(685,094)	(415,496)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets		(45)
Net Cash Used In Investing Activities		(45)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes - related party	581,492	47,000
Issuance of stock subscriptions payable		133,500
Sale of common stock		238,000
Proceeds from convertible notes payable	150,000
Net Cash Provided By Financing Activities	731,492	418,500
Net increase in cash	46,398	2,959
Cash - beginning of period	26,084
Cash - end of period	72,482	2,959
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for: Income taxes
Cash paid during the period for: Interest
Non-cash Financing transactions:
Common stock issued to consultants for services	96,343
Common stock issued for conversion of debt, net of derivative	78,197
Accrued salaries payable converted to convertible promissory note - officer	$ 703,339

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Consolidated Balance Sheets (Unaudited) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Current Assets
Cash	$ 72,482	$ 26,084
Accounts receivable	49,376	8,117
Inventory	2,318	2,171
Deposit on planned acquisition	400,000
Prepaid expense	10,810
Total Current Assets	534,986	36,372
Fixed assets, net	15,741	17,049
Patents, net	34,306	36,796
Deposit	7,999
Total Other Assets	42,305	36,796
Total Assets	593,032	90,217
Current Liabilities
Accrued salaries payable	656,569	1,290,516
Accounts payable and other liabilities	314,786	243,836
Accrued interest payable	283,857	217,001
Convertible note payable, net	68,385	4,688
Derivative liabilities	1,847,560	40,697
Due to related parties	126,597	65,738
Notes payable - related parties, current portion	858,132	1,379,427
Total Current Liabilities	4,155,886	3,241,903
Notes payable - related parties	1,102,787
Convertible note payable, net	31,250	12,500
Total Liabilities	5,289,923	3,254,403
Commitments and Contingencies
Stockholders' Deficit
Preferred stock, $0.001 par value: 1,000 shares authorized, issued and outstanding as of June 30, 2013 and December 31, 2012, respectively	1	1
Common stock, $0.001 par value: 250,000,000 shares authorized, 20,508,609 and 20,403,586 issued and outstanding as of June 30, 2013 and December 31,2012, respectively.	20,509	20,404
Additional paid in capital	6,785,860	5,748,691
Stock subscription receivable	(20,000)	(20,000)
Accumulated deficit	(11,483,261)	(8,913,282)
Total Stockholders' Deficit	(4,696,891)	(3,164,186)
Total Liabilities and Stockholders' Deficit	$ 593,032	$ 90,217

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PENDING ACQUISITION

6 Months Ended

Jun. 30, 2013

Notes to Financial Statements

NOTE 8 - PENDING ACQUISITION

Prime Time Medical:

On April 26, 2013, the Company entered into a Stock Purchase Agreement (the “Stock Purchase Agreement ”) with Prime Time Medical, Inc., a Florida corporation (“Prime Time”) and Mark R. Miklos, the sole equity holder of Prime Time (“Miklos”). Prime Time is a Durable Medical Equipment provider of home medical equipment servicing consumers throughout West Central Florida.

Pursuant to the Stock Purchase Agreement, at the closing Miklos will transfer to the Company all the outstanding shares of capital stock of Prime Time for an aggregate purchase price of up to $3,100,000, subject to certain adjustments as summarized herein. The purchase price will be paid in a combination of cash, promissory notes and shares of the Company’s common stock

On the closing date, the Company will make a total cash payment to Miklos as follows: (a) if the closing occurs on or prior to May 26, 2013, the Company shall pay $950,000 at closing, (b) if the closing occurs after May 26, 2013 but on or prior to June 26, 2013 the Company shall pay to Seller $1,050,000 at closing, and (c) if the closing occurs after June 26, 2013, the Company shall pay to Seller $1,150,000 at closing. The Purchase Agreement requires total deposits of $400,000 to be paid towards the purchase price, to be paid by June 26, 2013. As of June 30, 2013 the Company has paid $300,000 and recorded an accrual for $100,000. Subsequently the company paid an additional $50,000, which has resulted in the seller granting the Company additional time to close.

Additionally, at closing, the Company will issue two additional promissory notes (the “Prime Time Notes A and B”) to Miklos in the aggregate principal amount of $1,000,000.  Prime Time Note A in the principal amount of $500,000 will bear interest at 5% per annum, with monthly payments of principal and interest, and will mature three years after the closing date.  Prime Time Note B in the principal amount of $500,000 will bear interest at 5% per annum, with annual payments of interest and principal payable annually over two years from the date of closing provided; however, that the principal balance of Prime Time Note B (and the respective annual payment) shall be reduced if: (i) the earnings before income taxes, depreciation and amortization (“EBITDA”) for the fiscal year ended December 31, 2013 is less than $975,000; and/or (ii) the EBITDA for the fiscal year ended December 31, 2014 is less than $975,000. At Miklos’ option, Prime Time Note B can be paid in shares of common stock of the Company on terms acceptable to Miklos and the Company.

Total consideration also includes $750,000 in the form of shares of restricted common stock of the Company (the “Shares”), with the number of Shares to be issued to be determined at closing by dividing $750,000 by the average of the highest bid and lowest asked prices for the Company’s common stock as quoted on the OTC Bulletin Board, the OTC Pink Sheets or other similar quotation system, as applicable, at the end of the trading day immediately preceding the closing (the “Original Issuance Price”). If as of the first anniversary of the closing Miklos has not received at least $1,500,000 of the purchase price in the form of cash (including from the payment of principal on Prime Time Notes A and B and the sale of Shares in the public market), then, following such first anniversary, Miklos may put, and Company shall promptly purchase from Miklos in cash, such number of Shares equal to the difference between such cash payments and $1,500,000 divided by the Original Issuance Price.

The Purchase Agreement also requires the Company to enter at closing into an employment agreement with the Seller for certain management services and; also contains a covenant of the Seller not to compete with the Company for a two year period.

The Purchase Agreement further provides that the Company will engage its independent registered public accounting firm to prepare an audit of Prime Time’s financial statements for the years ended December 31, 2011 and 2012. If, for any reason the audit cannot be concluded, the Company will not be required to pay any amounts due under Notes A or B and such notes will be cancelled. The Company, however, has no right to receive a refund of the cash portion of the purchase price as tendered or to effect a cancellation of the Shares. In addition, if Prime Time’s total asset value at December 31, 2012 as determined in accordance with the audited financial statements is less than the value set forth on the financial statements previously provided to the Company, the purchase price will be reduced by such amount on a dollar for dollar basis through a return of a number of Shares equal to such deficiency, and, if the deficiency is greater than the Original Issue Price, through a set off of the amount which will be due under Note A.

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LIQUIDITY AND GOING CONCERN (Details Narrative) (USD $)	Jun. 30, 2013
Liquidity And Going Concern Details Narrative
Due to Officers or Stockholders	$ 582,000

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STOCKHOLDERS' DEFICIT

6 Months Ended

Jun. 30, 2013

Notes to Financial Statements

NOTE 7 - STOCKHOLDERS' DEFICIT

Common stock

On February 9, 2013, the Company issued a total of 50,000 shares of common stock to two consultant for services valued at $1.15 per share. As a result, the Company recorded stock compensation in the amount of $57,500 for the three months ended March 31, 2013.

On June 28, 2013, the Company issued a total of 25,895 shares of common stock to a public relations firm as settlement of its services valued at $1.50 per share. As a result, the Company recorded stock compensation in the amount of $38,842 for the three months ended June 30, 2013.

On June 11, 2013 and June 28, 2013, in connection with a Securities Purchase Agreement and convertible promissory note (“Note”) in the principal amount of $37,500, the Company converted the Note into a total of 29,128 shares of the Company’s common stock at a conversion price of $1.36  per share.

Stock Options

On March 7, 2013, the Company granted to its Chief Technology Officer 150,000 seven-year stock options with an exercise price of $0.50 per share. The Company determined that the fair value of the options was approximately $159,000 using the Black Scholes method and recorded as stock compensation in the accompanying condensed consolidated financial statements.

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LIQUIDITY AND GOING CONCERN

6 Months Ended

Jun. 30, 2013

Notes to Financial Statements

NOTE 2 - LIQUIDITY AND GOING CONCERN

The condensed consolidated financial statements have been prepared on a going concern basis, and do not reflect any adjustments related to the uncertainty surrounding our recurring losses or accumulated deficit.

The Company currently has limited revenue and is experiencing recurring losses. These factors raise substantial doubt about its ability to continue as a going concern. Management has financed the Company's operations principally through loans from an affiliate of the Company’s former CEO, who is also one of the principal shareholders. Through June 30, 2013, the Company obtained its liquidity principally from approximately $582,000 of cash advances from an affiliate of the former Chairman and CEO and the Company's principal shareholder. The Company may need to continue borrowings from an affiliate of the former Chairman and CEO and the Company's principal shareholder and will also need to raise additional capital. However, management cannot provide any assurances that the Company will be successful in completing this financing and accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon continued financial commitments from related parties and eventually secure other sources of financing in addition to those funds provided by its affiliate and attain profitable operations. The accompanying condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

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CONVERTIBLE NOTES PAYABLE (Details Narrative) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
Debt Instrument [Line Items]
Convertible note payable	$ 31,250		$ 31,250		$ 12,500
Beneficial conversion features of convertible debts			125,365	0
Interest expense	30,898	0	54,337	0
On August 24, 2012 [Member]
Debt Instrument [Line Items]
Convertible note payable	31,250		31,250		12,500
Percentage of interest rate on convertible note	9.00%		9.00%		9.00%
Unamortized discounts	43,750		43,750		62,500
On December 6, 2012 [Member]
Debt Instrument [Line Items]
Convertible note payable	0		0		4,688
Percentage of interest rate on convertible note	8.00%		8.00%		8.00%
Unamortized discounts	$ 37,500		$ 37,500		$ 32,812

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NOTES PAYABLE -RELATED PARTY (Tables)

6 Months Ended

Jun. 30, 2013

Notes Payable -Related Party Tables

Schedule of Notes payable

	June 30,		December 31,
	2013		2012
Notes Payable consists of the following:
Secured Convertible Promissory Note - CLSS Holdings, LLC, dated September 30, 2010. Note accrues interest at 9% per annum, due and payable on October 1, 2013(A)	$	181,000	$	181,000
Secured Convertible Promissory Note - CLSS Holdings, LLC, dated March 12, 2011. Note accrues interest at 9% per annum, due and payable on October 1, 2013 (A)		367,000		367,000
Secured Convertible Promissory Note - CLSS Holdings, LLC, dated September 30, 2011. Note accrues interest at 9% per annum, due and payable on September 30, 2013(A)		220,000		220,000
Secured Convertible Promissory Note - CLSS Holdings, LLC, dated March 12, 2011. Note accrues interest at 7.5% per annum, due and payable on October 1, 2013 (A)		334,787		334,787
Convertible Promissory Note-Officer, dated June 17, 2013. Note accrues interest at 9% per annum, due and payable on March 30, 2015, net of discount of $703,339 (B) Refer to Note 5		-		-
Total		1,102,787		1,102,787
Other advances from CLSS Holdings, LLC, not evidenced by a promissory Note (A)		858,132		276,640
		1,960,919		1,379,427
Less: Current portion		858,132		1,379,427
Notes Payable-related parties	$	1,102,787	$	-

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PENDING ACQUISITION (Details Narrative) (USD $)	Jun. 30, 2013
Pending Acquisition Details Narrative
Purchase price paid	$ 300,000
Accrual amount	100,000
Purchase price paid an additional	$ 50,000

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DERIVATIVE LIABILITIES (Details Narrative) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Derivative Liabilities Details Narrative
Fair value of derivative liabilities	$ 1,847,560	$ 40,697

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Document and Entity Information	6 Months Ended
	Jun. 30, 2013	Aug. 16, 2013
Document And Entity Information
Entity Registrant Name	Sanomedics International Holdings, Inc
Entity Central Index Key	0001501972
Document Type	10-Q
Document Period End Date	Jun. 30, 2013
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		26,508,609
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2013

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STOCKHOLDERS' DEFICIT (Details Narrative) (USD $)	3 Months Ended
	Jun. 30, 2013
Stockholders Deficit Details Narrative
Stock compensation	$ 38,842