qtxb10q_sep302015.htm

THIS QUARTERLY REPORT ON FORM 10-Q, INCLUDING EXHIBITS HERETO, CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. THESE FORWARD-LOOKING STATEMENTS ARE TYPICALLY IDENTIFIED BY THE WORDS “ANTICIPATES,” “BELIEVES,” “EXPECTS,” “INTENDS,” “FORECASTS,” “PLANS,” “ESTIMATES,” “MAY,” “FUTURE,” “STRATEGY,” OR WORDS OF SIMILAR MEANING. VARIOUS FACTORS COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN THE FORWARD-LOOKING STATEMENTS; INCLUDING THOSE DESCRIBED IN “RISK FACTORS” IN OUR ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2014. WE ASSUME NO OBLIGATIONS TO UPDATE THESE FORWARD-LOOKING STATEMENTS TO REFLECT NEW INFORMATION, ACTUAL RESULTS, CHANGES IN ASSUMPTIONS, OR CHANGES IN OTHER FACTORS, EXCEPT AS REQUIRED BY LAW.

	September 30,			December 31,
	2015			2014
	(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	84,432		$	218,546
Accounts receivable		-			352
Prepaid expenses		37,885			40,902
Deposit on Investment		50,000			-
Total Current Assets		172,317			259,800

Investments		200,000			200,000
Property and equipment, net		1,372			2,191
Intangible assets, net		22,092			28,521
Total Assets	$	395,781		$	490,512

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current Liabilities:
Accounts payable	$	419,334		$	462,306
Accrued expenses		40,795			42,770
Notes payable, net of discount		1,270,055			1,156,378
Current portion of LT notes payable		2,293			2,229
Total Current Liabilities		1,732,477			1,663,683
LT notes payable, less current portion		40,765			41,771
Total Liabilities		1,773,242			1,705,454

Commitments and Contingencies		-			-

Stockholders’ Equity (Deficit):
Preferred stock; $0.01 par value, 25,000,000 authorized shares; 20,500,000 shares designated as Series B Convertible Preferred Stock; Series B Convertible Preferred shares 16,676,942 issued and outstanding		166,769			166,769
Common Stock; $0.01 par value; 150,000,000 authorized; 68,272,918 and 63,341,163 shares issued and outstanding, respectively		682,729			633,412
Common Stock to be issued		30,000			63,000
Additional paid-in capital		48,626,924			48,428,724
Accumulated deficit		(50,883,883	)		(50,506,847	)
Total Stockholders’ Equity (Deficit)		(1,377,461	)		(1,214,942	)

Total Liabilities and Stockholders’ Equity (Deficit)	$	395,781		$	490,512

	Three Months Ended September 30,							Nine Months Ended September 30,
		2015			2014				2015			2014
Revenue:
Revenue		$	-		$	590			$	156		$	1,819
Total Revenue			-			590				156			1,819

Costs and Operating Expenses:
Cost of goods sold (excluding depreciation and amortization)			-			656				-			1,532
Sales, general and administrative			52,999			13,390				170,322			78,487
Professional fees			19,830			37,242				96,652			194,927
Research and development			-			30,044				13,154			51,960
Amortization			2,144			2,723				6,429			6,429
Depreciation			273			273				820			821
Total Costs and Operating Expenses			75,246			84,328				287,377			334,156

Loss from Operations			(75,246	)		(83,738	)			(287,221	)		(332,337	)

Other Income (Expense):
Interest and dividend income			-			808				-			4,175
Interest expense			(23,243	)		(29,340	)			(92,207)			(74,640	)
Gain on exchange of equity investment			-			26,660				(7,163)			26,660
Other financing costs			-			(26,660	)			-			(48,420	)
Amortization of debt discount to interest expense			(11,335	)		(44,669	)			(26,149)			(111,342	)
Gain on settlement of note interest			-			-				35,700			(62,150	)
Loss on Impairment			-			(808	)			-			(4,175	)
Total Other Income (Expense), net			(34,578	)		(74,009	)			(89,819	)		(269,892	)

Loss Before Taxes			(109,824	)		(157,747	)			(377,040	)		(602,229	)

Provision for Income Taxes			-			-				-			-

Net Loss		$	(109,824	)	$	(157,747	)		$	(377,040	)	$	(602,229	)

Basic and Diluted Net Loss per Common Share		$	(0.00	)	$	(0.00	)		$	(0.01	)	$	(0.01	)

Basic and Diluted Weighted Average Shares Used in per Share Calculation			67,607,773			63,328,170				65,911,204			59,585,203

	Nine Months Ended
	September 30, 2015			September 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(377,040	)	$	(602,229	)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization		7,249			7,248
Loss on deferred financing costs		-			120,019
Non-cash gain on exchange of equity investment		-			(26,660	)
Non-cash fair value of common stock issued as compensation			-		21,000
Interest expense related to amortization of beneficial conversion features		6,523			-
Interest expense related to amortization of debt discount		12,111			-
Loss on equity issuance for other financing costs		7,163				-
Stock compensation		86,000				-
Interest receivable		-			(4,175	)
Loss on impairment		-			4,175
Fair value of common stock issued & to be issued with notes and for services		41,861			63,760
Loss on issuance of common stock in exchange for interest settlement on notes payable		(35,700	)		62,150
(Increase) Decrease in:
Accounts receivable		352			917
Inventories		-			1,532
Prepaid expenses		3,017			(3,253	)
Increase (decrease) in:
Accounts payable		(42,970	)		121,661
Accrued interest and expenses		86,763			6,943

Net Cash Used by Operating Activities		(204,671	)		(226,912	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Payments received on note receivable		-			90,000
Deposit on Investment		(50,000	)

Net Cash Provided by Investing Activities		(50,000	)		90,000

CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on long-term debt		(942	)
Cash provided by Notes Payable		121,500			386,000

Net Cash Provided from financing activities		120,558			386,000

Net Increase (Decrease) in Cash and Cash Equivalents		(134,113	)		249,088

Cash and Cash Equivalents, Beginning of Period		218,546			4,457

Cash and Cash Equivalents, End of Period	$	84,432		$	253,545

Supplemental Cash Flow Disclosures:
Interest expense paid in cash	$	-		$	-
Income tax paid	$	-		$	-

We have developed and intend to commercialize our innovative PAD based products for the OTC markets for the treatment of hemorrhoids, minor vaginal infection, urinary incontinence, general catamenial uses and other medical needs. We are developing and intend to commercialize genomic diagnostics for the laboratory market, based on our patented PadKit® technology. Our platforms include: inSync®, Unique™, PadKit®, and OEM branded OTC and laboratory testing products based on the Company’s core intellectual property related to its PAD technology.

Our efforts to commercialize our products remain contingent on the receipt of additional financing required to execute our business and operating plan, which is currently focused on the commercialization of our PAD technology either directly or through a joint venture or other relationship intended to increase shareholder value. In the interim, we have had nominal operations, focused principally on the limited online sale of our Unique® Miniform PAD product, maintaining and expanding our intellectual property and maintaining compliance with the public company reporting requirements. We have continued to issue promissory notes to continue as a going concern. No assurances can be given that the Company will obtain financing, or otherwise successfully develop a business and operating plan or enter into an alternative relationship to commercialize the Company’s PAD technology.

On June 20, 2012, the Company formed a wholly-owned subsidiary, QX Labs, Inc. (“QX”), and proceeded to transfer to QX all intellectual property and assets related to the Company’s diagnostic testing business ("Diagnostics Business"). The Diagnostic Business is based principally on the Company’s proprietary PadKit® technology, which the Company believes provides a patented platform technology for genomic diagnostics, including fetal genomics. Following the transfer of the Diagnostics Business to QX, the Company’s remaining business line consists of its over-the-counter business, including the InSync feminine hygienic interlabial pad, the Unique® Miniform for hemorrhoid application, and other treated miniforms (the “OTC Business”), as well as established and continuing licensing relationships related to the OTC Business. Management believes the creation of QX permits the Company to more efficiently explore different options to maximize the value of the Diagnostics Business and the OTC Business (collectively, the “Businesses”), with the objective of maximizing the value of the Businesses for the benefit of the Company and its stakeholders.

The Company’s current focus is to obtain additional working capital necessary to continue as a going concern, supplement its management team, and develop a longer term financing and operating plan to: (i) leverage its broad-based intellectual property (“IP”) and patent portfolio to develop new and innovative diagnostic products; (ii) commercialize its OTC Business and its Diagnostics Business either directly or through joint ventures, mergers or similar transactions intended to capitalize on commercial opportunities presented by each of the Businesses; (iii) contract manufacturing to third parties while maintaining control over the manufacturing process; and (iv) maximize the value of the Company’s investments in non-core assets. As a result of its current financial condition, however, the Company’s efforts in the short-term will be focused on limited online sale of our Unique® Miniform PAD product, and obtaining financing necessary to maintain the Company as a going concern.

The Company follows the accounting guidance outlined in the Financial Accounting Standards Board Codification guidelines. The accompanying unaudited interim consolidated financial statements have been prepared in accordance with generally accepted principles for interim financial information and with the items under Regulation S-K required by the instructions to Form 10-Q. They may not include all information and footnotes required by United States generally accepted accounting principles for complete financial statements. However, except as disclosed herein, there have been no material changes in the information disclosed in the notes to the financial statements for the year ended December 31, 2014 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 15, 2015. The interim unaudited financial statements presented herein should be read in conjunction with those financial statements included in the Form 10-K. In the opinion of Management, all adjustments considered necessary for a fair presentation, which unless otherwise disclosed herein, consisting primarily of normal recurring adjustments, have been made. Operating results for three and nine months ended September 30, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015.

On September 3, 2015, the Company entered into a non-binding letter of intent (the “Global LOI”) with Global Cancer Diagnostics, Inc., a privately held laboratory in Tempe, Arizona (“Global”), for a proposed business combination of the two entities. If executed, the Company will acquire 100% of the outstanding capital stock of Global in exchange for restricted shares of the Company’s common stock, par value $0.01 per share (“Common Stock”), and will continue as the surviving entity, with Global becoming a wholly owned subsidiary of the Company. The Global LOI had an original termination date of October 31, 2015 (the “Termination Date”), but may be terminated or extended anytime by the mutual written consent of the parties. Management is currently in active discussions with Global regarding certain matters contained in the Global LOI, including an extension of the Termination Date.

Pursuant to the terms and conditions of the Global LOI, the Company advanced to Global $50,000 during the quarter ended September 30, 2015 (the “Global Advance”), which amount is due and payable by Global, on demand, anytime after the Termination Date. In the event the Company and Global execute definitive merger documents on or before the Termination Date, Global will issue to the Company that number of shares of Global’s common stock equal to 10% of the then outstanding shares of Global’s common stock, on a fully-diluted basis, as payment of the Global Advance.

During the year ended December 31, 2014, the Company initiated two separate international studies to develop the laboratory techniques needed to utilize the Company’s PadKit sampling technology for fetal cell and genome detection and analysis. The Company completed one of the studies initiated during 2014, and expects current and future studies to be an on-going effort, as it continues to expand and validate new disease targets and markets for its PadKit based diagnostic system.

In July 2014, the Company’s Board of Directors approved of a private offering of convertible promissory demand notes (the “Bridge Notes”) to certain accredited investors in the aggregate principal amount of up to $500,000. As additional consideration for the purchase of the Bridge Notes, the Board approved of the issuance of 200,000 shares of the Company’s Common Stock to participating investors for every $100,000 invested. During the nine months ended September 30, 2015, the Company issued Bridge Notes in the aggregate principal amount of $121,500, and issued an aggregate total of 243,000 shares of its Common Stock. During the three months ended September 30, 2015, the Company arranged for an extension of the maturity date of Bridge Notes from June 30, 2015 to December 31, 2015. As consideration for the extension of the maturity date of the Bridge Notes, the Company issued an aggregate total of 286,500 shares of Common Stock to the Bridge Note holders.

Each Bridge Note accrues interest at a rate of 10% per annum, payable in either cash or shares of the Company’s Common Stock and matures on December 31, 2015. Each Bridge Note is convertible, at the option of the holder thereof, into that number of shares of Common Stock equal to the outstanding principal balance of the Bridge Note, plus accrued but unpaid interest (the “Outstanding Balance”), divided by $0.08 (the “Conversion Shares”). Additionally, in the event the Company completes an equity or equity-linked financing with gross proceeds to the Company of at least $1.5 million (a “Qualified Financing”), the Outstanding Balance of all Bridge Notes will, at the discretion of each respective holder, either (i) convert into securities sold in the Qualified Financing, or (ii) automatically convert into Conversion Shares.

The Company currently generates only nominal revenue from operations. The Company has historically financed its operations primarily through issuances of equity and the proceeds from the issuance of promissory notes. In the past, the Company also provided for its cash needs by issuing Common Stock, options and warrants for certain operating costs, including consulting and professional fees, as well as divesting its minority equity interests and equity-linked investments.

The Company’s history of operating losses, limited cash resources and the absence of an operating plan necessary to capitalize on the Company’s assets raise substantial doubt about our ability to continue as a going concern, absent a strengthening of our cash position. Management is currently pursuing various funding options, including seeking debt or equity financing, licensing opportunities and the sale of certain investment holdings, as well as a strategic merger or other transaction, to obtain additional funding to continue the development of, and to successfully commercialize, its products. There can be no assurance that the Company will be successful in its efforts. Should the Company be unable to obtain adequate financing or generate sufficient revenue in the future, the Company’s business, result of operations, liquidity and financial condition would be materially and adversely harmed, and the Company will be unable to continue as a going concern.

This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America (“GAAP”) and have been consistently applied in the preparation of the financial statements.

Accounting for Share-Based Payments. The Company follows the provisions of ASC Topic 718, which establishes the accounting for transactions in which an entity exchanges equity securities for services and requires companies to expense the estimated fair value of these awards over the requisite service period. The Company uses the Black-Scholes option pricing model in determining fair value. Accordingly, compensation cost has been recognized using the fair value method and expected term accrual requirements as prescribed. During the nine months ended September 30, 2015, the Company recorded stock compensation expense related to options issued for director fees in the amount of $56,000.

The Company accounts for share-based payments granted to non-employees in accordance with ASC Topic 505, “Equity Based Payments to Non-Employees.” The Company determines the fair value of the stock-based payment as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. If the fair value of the equity instruments issued is used, it is measured using the stock price and other measurement assumptions as of the earlier of either (i) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, or (ii) the date at which the counterparty’s performance is complete.

In the case of modifications, the Black-Scholes model is used to value modified warrants on the modification date by applying the revised assumptions. The difference between the fair value of the warrants prior to the modification and after the modification determines the incremental value. The Company has modified warrants in connection with the issuance of certain notes and note extensions. These modified warrants were originally issued in connection with previous private placement investments. In the case of debt issuances, the warrants were accounted for as original issuance discount based on their relative fair values. When modified in connection with a note issuance, the Company recognizes the incremental value as a part of the debt discount calculation, using its relative fair value in accordance with ASC Topic 470-20, “Debt with Conversion and Other Options.” When modified in connection with note extensions, the Company recognized the incremental value as prepaid interest, which is expensed over the term of the extension.

The fair value of each share based payment is estimated on the measurement date using the Black-Scholes model with the following assumptions, which are determined at the beginning of each year and utilized in all calculations for that year. During the nine months ending September 30, 2015, the Company used an average risk-free interest rate of 1.61%, a dividend yield of zero, and an average volatility of 417%, to calculate the fair value of equity securities issued for services. During the year ended December 31, 2014, the Company used an average risk free interest rate of 2.73%, expected volatility of 242%, and a dividend yield of zero.

Pre-Vesting Forfeitures. Estimates of pre-vesting option forfeitures are based on Company experience. The Company will adjust its estimate of forfeitures over the requisite service period based on the extent to which actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures will be recognized through a cumulative catch-up adjustment in the period of change and will also impact the amount of compensation expense to be recognized in future periods.

Earnings per Share. The Company computes net income (loss) per common share in accordance with ASC Topic 260. Net income (loss) per share is based upon the weighted average number of outstanding common shares and the dilutive effect of common share equivalents, such as options and warrants to purchase Common Stock, convertible preferred stock and convertible notes, if applicable, that are outstanding each year. Basic and diluted earnings per share were the same at the reporting dates of the accompanying financial statements, as including Common Stock equivalents in the calculation of diluted earnings per share would have been antidilutive.

Use of Estimates. The accompanying financial statements are prepared in conformity with accounting principles generally accepted in the United States of America, and include certain estimates and assumptions, which affect the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Accordingly, actual results may differ from those estimates.

In May 2011, FluoroPharma, Inc. (“FPI”) entered into a reverse merger with FluoroPharma Medical, Inc. (“FPMI”). In connection with this transaction, the Company's warrants to purchase FPI common stock were exchanged for warrants in FPMI (the “FPMI Warrants”). During 2012, the Company recognized a gain in the amount of $115,752 as a result of the issuance of certain of these warrants to holders of promissory notes of the Company that matured during the period. During the period ended September 30, 2014, the Company assigned its remaining 109,917 FPMI Warrants, with an exercise price of $1.00 and expiring on February 15, 2019 to Burnham Hill Advisors, LLC (“BHA”) in exchange for the extension of BHA’s previous cash deferral agreement through December 31, 2014. Following the transaction, the Company recognized a gain on the exchange in the amount of $20,660 and no longer held FPMI warrants.

In May 2006, the Company purchased 144,024 shares of common stock of Genomics USA, Inc. (“GUSA”) for $200,000. After the investment, QuantRx owned approximately 5% of the total issued and outstanding common stock of GUSA. As of the end of September 30, 2015, the Company’s position had been diluted to less than 5% of the issued and outstanding common stock of GUSA, and it is expected that the Company’s position will continue to be diluted in the future. The investment is recorded at historical cost and is assessed at least annually for impairment. GUSA now does business as GMS Biotech.

Pursuant to the Global LOI described in Note 1 above, under the heading “Recent Developments”, in September 2015, the Company advanced to Global Cancer Diagnostics, Inc. $50,000 during the quarter ended September 30, 2015, which amount is due and payable by Global, on demand, anytime after the Termination Date of the Global LOI. In the event the Company and Global execute definitive merger documents contemplated by the Global LOI on or before the Termination Date, Global will issue to the Company that number of shares of Global’s common stock equal to 10% of the then outstanding shares of Global’s common stock, on a fully-diluted basis as payment of the Global Advance.

The Company’s intangible assets consist of patents, licensed patents and patent rights, are carried at the legal cost to obtain them. Costs to renew or extend the term of intangible assets are expensed when incurred. In 2008, through our formerly majority owned subsidiary, the Company also held technology licenses and other acquired intangibles. Intangible assets are amortized using the straight-line method over the estimated useful life. Useful lives are as follows:

On March 1, 2013, the Company entered into an Exchange Agreement with NuRx Pharmaceuticals, Inc. (“NuRx”) and QN Diagnostics, LLC (“QND”), pursuant to which the Company exchanged the shares of NuRx common stock received under the terms of the settlement agreement with NuRx in July 2011 (the "Settlement Shares") for certain patents, trademarks and other intellect property formerly held by NuRx and QND covering point-of-care lateral flow diagnostics (RapidSense™) and related oral fluid collection technologies. The Company has recorded the value associated with this exchange at $13,200, and will amortize these costs over the remaining useful lives of the intellectual property exchanged.

2012 Notes and 2013 Notes. In May 2012, in consideration for the extension of certain promissory notes originally due and payable on March 31, 2012 (the “2012 Notes”) to June 30, 2012, the Company assigned to the holders of the 2012 Notes FPMI Warrants to purchase a total of 113,127 shares of FPMI common stock for $0.50 per share (the “$0.50 FPMI Warrants”). In August 2012, in consideration for the extension of the maturity date of the 2012 Notes to November 15, 2012, the Company agreed to assign a total of 155,877 $0.50 FPMI Warrants to the holders of the 2012 Notes. As a result, a total of 260,508 $0.50 FPMI Warrants have been assigned to holders of 2012 Notes.

The 2012 and 2013 Notes accrue interest at the rate of 6% annually prior to maturity, and 12% annually thereafter. All 2012 Notes and 2013 Notes have matured and are currently due and payable on demand. The 2012 Notes and 2013 Notes are convertible at the option of each respective holder into shares of Common Stock at a conversion price equal to $0.10 per share. In addition, the holders may exchange the 2012 Notes and 2013 Notes for Common Stock in the event the Company consummates a qualified financing (the “Qualified Financing”), which is defined in the 2012 Notes and 2013 Notes as a financing resulting in gross proceeds to the Company of at least $500,000. While the Company intends to pay the 2012 Notes and 2013 Notes using proceeds from a Qualified Financing, such Qualified Financing may not occur prior to the date the holders of the 2012 Notes and 2013 Notes demand repayment.

In connection with the issuance of the 2013 Notes, the Company has recorded debt discount and expenses in the amount of $27,753 related to the value of the 64,000 FPMI warrants to the holders of the 2013 Notes. The Company will amortize the costs over the remaining life of these 2013 Notes. As of September 30, 2014, the Company recorded other financing costs of $27,753 related to the debt discount on the 2013 Notes.

On October 29, 2013, the holder of certain outstanding 2012 Notes and 2013 Notes totaling approximately $217,000 in principal and accrued interest agreed to cancel such notes in exchange for a new promissory note with a face amount of $217,000 maturing on March 31, 2014, and 100,000 FPMI Warrants. Separately, our financial advisor agreed to exchange $216,000 of fees accrued from May 15, 2012 to October 15, 2013, otherwise payable in cash on or before December 31, 2013, for a promissory note with a face amount of $250,000 maturing on March 31, 2014, and 100,000 FPMI Warrants. These promissory notes accrued interest at a rate of 8% annually prior to maturity, and, following maturity of both promissory notes on March 31, 2014, now accrue interest at rate of 12% annually.

Bridge Notes. During the year ended December 31, 2014, the Company issued Bridge Notes in the aggregate principal amount of $386,000. As additional consideration for the purchase of the Bridge Notes, the Company issued an aggregate total of 772,000 shares of Common Stock to the purchasers of the Bridge Notes. In connection with the issuance of the Bridge Notes during the year ended December 31, 2014, the Company recorded debt discount and expenses related to the beneficial conversion feature in the amount of $35,944 and $48,444, respectively. The Company will amortize these amounts over the life of the debt and, accordingly, recorded interest expense related to the debt discount and beneficial conversion feature in the amount of $26,958, and $36,333, respectively. The Company also incurred $46,000 of costs related to issuance of the Bridge Notes, which were amortized over the life of the debt. Total issuance costs recognized during the year ended December 31, 2014 amounted to $34,263.

During the year ended December 31, 2014, the Company authorized the issuance of 2,601,233 shares of Common Stock to the holders of all outstanding notes payable with an aggregate outstanding principal balance of $870,693 in order to satisfy all accrued, but unpaid, interest on the notes issued between 2012 and June 2014. During the period, all of the authorized shares of Common Stock were issued to settle the total outstanding interest payable on the notes, which amounted to $93,924. The Company recognized a loss of $62,150 in connection with the settlement.

On January 2, 2015, the Company issued an additional Bridge Note in the principal amount of $36,500 and issued 73,000 shares of Common Stock to the purchaser of the additional Bridge Note. Additionally, we issued 500,000 shares of Common Stock in January 2015 to certain investors who purchased Bridge Notes during the year ended December 31, 2014, which were previously classified as shares to be issued.

In June 2015, the Company authorized the issuance of an aggregate total of 1,875,691 shares of Common Stock as payment for accrued interest for the period from January 1, 2015 through June 30, 2015 under certain convertible notes payable. The Company settled a total of $70,256 in accrued interest, recognizing a gain on settlement in the amount of $23,364. The Company and the holders of the Bridge Notes also agreed to extend the maturity date of the Bridge Notes from June 30, 2015 to December 31, 2015. As consideration for the extension of the maturity date of the Bridge Notes, the Company issued an aggregate total of 286,500 shares of Common Stock to the Bridge Note holders.

The Company received a $44,000 loan from the Portland Development Commission in 2007. The loan matures in 20 years and was interest free through February 2010. The terms of the note stipulated monthly interest only payments from April 2010 through December 2014, at a 5% annual rate. The Company recorded interest expense on this loan of $709 and $741 for the three months ended September 30, 2015 and 2014, respectively. The Company recorded interest expense on this loan of $1,432 and $1,851 for the nine months ended September 30, 2015 and 2014, respectively. The loan balance as of September 30, 2015 was $43,058 (current portion of $2,293), and the loan balance as of September 30, 2014 was $44,000.

Prepaid expenses:	September 30, 2015 (unaudited)			December 31, 2014
Prepaid insurance	$	35,195		$	24,866
Other		-			16,036
Prepaid expenses	$	35,195		$	40,902


Property and equipment:
Computers and office furniture, fixtures and equipment	$	28,031		$	28,031
Machinery and equipment		5,475			5,475
Less: accumulated depreciation		(32,134	)		(31,315	)
Property and equipment, net	$	1,372		$	2,191

Accrued expenses:
Other Accrued expenses	$	40,795			42,770
Accrued expenses	$	40,795			42,770

Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The Company’s property and equipment at September 30, 2015 consisted of computer and office equipment, machinery and equipment with estimated useful lives of three to seven years. Depreciation expense for the three and nine months ended September 30, 2015 was $273 and $820, while depreciation expense for the three and nine months ended September 30, 2014 was $273 and $821, respectively.

The Company has authorized 20,500,000 shares of Series B Preferred, $0.01 par value. The Series B Preferred ranks prior to the Common Stock for purposes of liquidation preference, and to all other classes and series of equity securities of the Company that by their terms do not rank senior to the Series B Preferred (“Junior Stock”). Holders of the Series B Preferred are entitled to receive cash dividends only if the Company’s Board of Directors declare a dividend on the Common Stock. In that event, holders of Series B Preferred will be entitled to receive an amount equal to the cash dividend declared on one share of Common Stock, multiplied by the number of shares of Common Stock issuable upon conversion of the shares of Series B Preferred held. The holders of Series B Preferred have voting rights to vote, as a class, on the following matters: (i) amending, altering or repealing the provisions of the Series B Preferred so as to adversely affect any right, preference, privilege or voting power of the Series B Preferred, or (ii) to effect any distribution with respect to Junior Stock. At any time, the holders of Series B Preferred may, subject to limitations, elect to convert all or any portion of their Series B Preferred into fully paid non-assessable shares of Common Stock at a 1:1 conversion rate.

In June 2015, the Company’s Board of Directors authorized the following issuances of Common Stock: (i) an aggregate total of 286,500 shares issuable to the Bridge Note holders as consideration for the extension of the maturity date of the Bridge Notes to December 31, 2015; (ii) an aggregate total of 1,875,691 shares of Common Stock as payment of accrued but unpaid interest on certain of the Company’s convertible promissory notes; and (iii) an aggregate total of 100,000 shares of Common Stock to certain investors who purchased Bridge Notes in the aggregate principal amount of $50,000 during the three months ended June 30, 2015.

2007 Incentive and Non-Qualified Stock Option Plan. The fair value of options granted under the Company’s 2007 Incentive and Non-Qualified Stock Option Plan is recorded as compensation expense over the vesting period, or, for performance based awards, the expected service term. During the nine months ended September 30, 2015 and 2014, the Company recorded stock compensation expense related to options issued for director fees in the amount of $56,000 and $0, respectively.

On October 29, 2013, we entered into an advisory agreement with BHA. Pursuant to this agreement, we agreed to pay a retainer in the amount of $100,000 and $15,000 per month beginning on November 29, 2013. The initial term of the agreement expired on December 31, 2014. BHA agreed to defer the cash fees due under the new agreement until June 30, 2014. On July 1, 2014, the Company and BHA modified the terms of this agreement to provide for a one-time $15,000 payment in August 2014, and deferred all other remaining cash fees through December 31, 2014 in consideration for the issuance of the 109,917 FPMI Warrants. As of September 30, 2015, this obligation is still due and payable to BHA and we are currently in negotiations for an extension to the agreement.

On May 28, 2014, the Company entered into a Consulting Services Agreement for financial related services with JFS Investments PR LLC (“JFS”). Under the terms of the agreement, JFS will receive a total of 2.5 million restricted shares of Common Stock as compensation under the agreement. The initial payment of 625,003 shares was to be issued, provided the Company receives gross proceeds of at least $500,000 of equity capital (the “Initial Capital Raise”). As of September 30, 2015, the Initial Capital Raise had not been completed.

Although the Company has yet to receive proceeds sufficient to constitute an Initial Capital Raise (as defined above), in February 2015, the Company agreed to issue 300,000 shares of Common Stock to Mayer and 625,003 shares to JFS Investments as consideration for services rendered under the agreements thus far, and during the nine months ended September 30, 2015, the Company issued an aggregate total of 286,500 shares of Common Stock to Mayer for services rendered under the Consulting Services Agreement.

11. Subsequent Events

In October 2015, the Company issued 1.5 million shares of restricted Common Stock to its officers and directors as discussed in Note 9 above, which were classified as Shares To Be Issued as of September 30, 2015.

The following discussion of our financial condition should be read in conjunction with the financial statements and notes to financial statements included elsewhere in this filing. The following discussion (as well as statements in Item 1 above and elsewhere) contains forward-looking statements within the meaning of the Private Securities Litigation Act of 1995 that involve risks and uncertainties. Some or all of the results anticipated by these forward-looking statements may not occur. Forward-looking statements involve known and unknown risks and uncertainties including, but not limited to, trends in the biotechnology, healthcare, and pharmaceutical sectors of the economy; competitive pressures and technological developments from domestic and foreign genetic research and development organizations which may affect the nature and potential viability of our business strategy; and private or public sector demand for products and services similar to what we plan to commercialize. We disclaim any intention or obligation to publicly announce the results of any revisions to any of the forward-looking statements contained herein to reflect future events or developments.

The Company’s current focus is to obtain additional working capital necessary to continue as a going concern, and develop a longer term financing and operating plan to: (i) leverage its broad-based intellectual property (“IP”) and patent portfolio to develop new and innovative diagnostic products; (ii) commercialize its OTC Business and its Diagnostics Business either directly or through joint ventures, mergers or similar transactions intended to capitalize on commercial opportunities presented by each of the Businesses; (iii) contract manufacturing to third parties while maintaining control over the manufacturing process; and (iv) maximize the value of the Company’s investments in non-core assets. As a result of its current financial condition, however, the Company’s efforts in the short-term will be focused on limited online sale of our Unique® Miniform PAD product, and obtaining financing necessary to maintain the Company as a going concern.

On September 3, 2015, the Company entered into a non-binding letter of intent (the “Global LOI”) with Global Cancer Diagnostics, Inc., a privately held laboratory in Tempe, Arizona (“Global”), for a proposed business combination of the two entities. If executed, the Company will acquire 100% of the outstanding capital stock of Global in exchange for restricted shares of the Company’s common stock, and will continue as the surviving entity, with Global becoming a wholly owned subsidiary of the Company. The Global LOI had an original termination date of October 31, 2015 (the “Termination Date”), but may be terminated or extended anytime by the mutual written consent of the parties. Management is currently in active discussions with Global regarding certain matters contained in the Global LOI, including an extension of the Termination Date.

In July 2014, the Company’s Board of Directors approved of a private offering of convertible promissory demand notes (the “Bridge Notes”) to certain accredited investors in the aggregate principal amount of up to $500,000. As additional consideration for the purchase of the Bridge Notes, the Board approved of the issuance of 200,000 shares of the Company’s common stock, par value $0.01 per share (“Common Stock”), to participating investors for every $100,000 invested. During the nine months ended September 30, 2015, the Company issued Bridge Notes in the aggregate principal amount of $121,500, and issued an aggregate total of 243,000 shares of its Common Stock. During the three months ended September 30, 2015, the Company arranged for an extension of the maturity date of Bridge Notes from June 30, 2015 to December 31, 2015. As consideration for the extension of the maturity date of the Bridge Notes, the Company issued an aggregate total of 286,500 shares of Common Stock to the Bridge Note holders.

The Company had total revenue during the three months ended September 30, 2015 of $0 and $590 during the three months ended September 30, 2014. Total revenue for the nine months ended September 30, 2015 and 2014 was $156 and $1,819, respectively. The decrease in revenue during the 2015 period, as compared to the same period in 2014, is due to a decrease in royalty revenue attributable to the Company’s PAD technology. Until such time as the Company develops a plan to commercialize its products, which is contingent on the receipt of additional financing, management does not anticipate that revenue will materially increase above amounts received in the current fiscal quarter.

Sales, general and administrative expense for the three months ended September 30, 2015 and 2014 was $52,995 and $13,390, respectively. Sales, general and administrative expense for the nine months ended September 30, 2015 and 2014 was $170,318 and $78,487, respectively. The decrease in sales, general and administrative expense is principally attributable to lower costs of maintaining our intellectual property portfolio in the 2015 period, as compared to the 2014 period.

Professional fees for the three months ended September 30, 2015 and 2014 were $19,830 and $37,242, respectively. Professional fees for the nine months ended September 30, 2015 and 2014 were $96,652 and $194,927, respectively. Professional fees include the costs of legal, consulting and auditing services provided to us. The decrease in professional fees in the 2015 periods is directly related to lower costs of legal, accounting, consulting, and financial services during the three and nine-months ended September 30, 2015, as compared to the same periods in 2014.

Research and development costs during the three months ended September 30, 2015 and 2014 were $0 and $30,044, respectively. Research and development costs for the nine months ended September 30, 2015 and 2014 were $13,154 and $51,960, respectively. The decrease in research and development fees in the 2015 period is directly attributable to lower costs associated with clinical trial expense in the 2015 period.

During the three and nine months ended September 30, 2015, the Company recorded non-cash interest expense related to the amortization of debt discount on notes payable of $11,335 and $26,149, respectively. During the three and nine months ended September 30, 2014, the Company recorded non-cash interest expense related to the amortization of debt discount, beneficial conversion features, and debt issuance costs of notes payable of $44,669 and $111,342 respectively. During the three months ended September 30, 2014, the Company recorded $26,660 in non-cash other financing costs related to the assignment of FPMI Warrants in connection with the consulting service deferral extension with BHA. During the nine months ended September 30, 2014, the Company recorded non-cash other financing expenses related to the exchange of FPMI Warrants of $48,420.

During the three and nine months ended September 30, 2015, the Company recorded a gain on the issuance of Common Stock in exchange of accrued interest payable on notes payable in the amount of $0 and $35,700, respectively. During the three and nine months ended September 30, 2014, the Company recorded non-cash loss on the issuance of Common Stock in exchange of accrued interest payable on notes payable in the amount of $62,150.

The Company’s net loss for the three months ended September 30, 2015 was $109,824 compared to net loss for the three months ended September 30, 2014 of $157,747, Net loss for the nine months ended September 30, 2015 was $377,040 compared to net loss for the nine months ended September 30, 2014 of $602,229. The decrease in net losses in the three and nine month periods ending September 30, 2015 compared to the comparable periods in 2014 is due to lower expenses, including lower professional fees and sales, general and administrative expense, as discussed above.

As of September 30, 2015, the Company had cash and cash equivalents of $84,432, compared to cash and cash equivalents of $218,546 as of December 31, 2014. During the nine months ended September 30, 2015, the Company’s cash used for operating activities totaled $254,316. During the nine months ended September 30, 2015, the Company’s cash provided by financing activities totaled $120,202. The overall net decrease in cash of $134,114 for the nine months ended September 30, 2015, is attributable to net cash used for operating activities offset by cash received from financing activities.

The Company has not generated sufficient revenues from operations to meet its operating expenses. In addition, the Company will require additional funding to complete the development and launch of its products, or to otherwise capitalize on its PAD technology. The Company has historically financed its operations primarily through issuances of equity and the proceeds of debt instruments. In the past, the Company has also provided for its cash needs by issuing Common Stock, options and warrants for certain operating costs, including consulting and professional fees.

Management believes that given the current economic environment and the continuing need to strengthen our cash position, there is substantial doubt about our ability to continue as a going concern. We are pursuing various funding options, including licensing opportunities and the sale of investment holdings, as well other financing transactions, to obtain additional funding to continue the development of our products and bring them to commercial markets. There can be no assurance that we will be successful in our efforts. Should we be unable to raise adequate financing or generate sufficient revenue in the future, the Company’s business, results of operations, liquidity and financial condition would be materially and adversely harmed.

	●	obtain adequate sources of funding to pay operating expenses and fund long-term business operations;
	●	attract and retain additional executive management;
	●	enter into a licensing or other relationship that allows the Company to commercialize its products;

	●	manage or control working capital requirements by reducing operating expenses; and

	●	develop new and enhance existing relationships with product distributors and other points of distribution for the Company’s products.

We have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivative instruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest in an unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.

The Company recognizes revenue in accordance with SEC Staff Accounting Bulletin Topic 13 when persuasive evidence of an arrangement exists and delivery has occurred, provided the fee is fixed or determinable and collection is probable. The Company assesses whether the fee is fixed and determinable based on the payment terms associated with the transaction. If a fee is based upon a variable such as acceptance by the customer, the Company accounts for the fee as not being fixed and determinable. In these cases, the Company defers revenue and recognizes it when it becomes due and payable. Up-front engagement fees are recorded as deferred revenue and amortized to income on a straight-line basis over the term of the agreement, although the fee is due and payable at the time the agreement is signed or upon annual renewal. Payments related to substantive, performance-based milestones in an agreement are recognized as revenue upon the achievement of the milestones as specified in the underlying agreement when they represent the culmination of the earnings process.

The Company assesses the probability of collection based on a number of factors, including past transaction history with the customer and the current financial condition of the customer. If the Company determines that collection of a fee is not reasonably assured, revenue is deferred until the time collection becomes reasonably assured. Significant management judgment and estimates must be made and used in connection with the revenue recognized in any accounting period. Material differences may result in the amount and timing of our revenue for any period if our management made different judgments or utilized different estimates.

The Company recognizes revenue from nonrefundable minimum royalty agreements from distributors or resellers upon delivery of product to the distributor or reseller, provided no significant obligations remain outstanding, the fee is fixed and determinable, and collection is probable. Once minimum royalties have been received, additional royalties are recognized as revenue when earned based on the distributor’s contractual reporting obligations. The Company is able to recognize minimum royalty payments on an accrual basis, as they are specified in the contract. However, since the Company cannot forecast product sales by licensees, royalty payments that are based on product sales by the licensees are not determinable until the licensee has completed their computation of the royalties due and/or remitted their cash payment to us. Should information on licensee product sales become available so as to enable the Company to recognize royalty revenue on an accrual basis, materially different revenues and results of operations could occur.

Our strategy includes entering into collaborative agreements with strategic partners for the development, commercialization and distribution of our product candidates. Such collaboration agreements may have multiple deliverables. In arrangements with multiple deliverables where we have continuing performance obligations, contract, milestone and license fees are recognized as revenue together with any up-front payments over the term of the arrangement as performance obligations are completed, unless the deliverable has stand-alone value and there is objective, reliable evidence of fair value of the undelivered element in the arrangement. In the case of an arrangement where it is determined there is a single unit of accounting, all cash flows from the arrangement are considered in the determination of all revenue to be recognized. Cash received in advance of revenue recognition is recorded as deferred revenue.

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and related disclosures of contingent assets and liabilities in the financial statements and accompanying notes. The accounting policies discussed below are considered by management to be the most important to the Company’s financial condition and results of operations, and require management to make its most difficult and subjective judgments due to the inherent uncertainty associated with these matters. All significant estimates and assumptions are developed based on the best information available to us at the time made and are regularly reviewed and adjusted when necessary. We believe that our estimates and assumptions are reasonable under the circumstances. However, actual results may vary from these estimates and assumptions. Additional information on significant accounting principles is provided in Note 3 of the attached financial statements.

We assess the impairment of long-lived assets, including our other intangible assets, at least annually or whenever events or changes in circumstances indicate that their carrying value may not be recoverable. The determination of related estimated useful lives and whether or not these assets are impaired involves significant judgments, related primarily to the future profitability and/or future value of the assets. Changes in our strategic plan and/or market conditions could significantly impact these judgments and could require adjustments to recorded asset balances. We hold investments in companies having operations or technologies in areas which are within or adjacent to our strategic focus when acquired, all of which are privately held and whose values are difficult to determine. We record an investment impairment charge if we believe an investment has experienced a decline in value that is other than temporary. Future changes in our strategic direction, adverse changes in market conditions or poor operating results of underlying investments could result in losses or an inability to recover the carrying value of the investments that may not be reflected in an investment’s current carrying value, thereby possibly requiring an impairment charge in the future.

In determining fair value of assets, the Company bases estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets that are not readily apparent from other sources. Actual fair value may differ from management estimates resulting in potential impairments causing material changes to certain assets and results of operations.

We grant options to purchase our Common Stock to our employees and directors under our stock option plan. We estimate the value of stock option awards on the date of grant using a Black-Scholes pricing model (Black-Scholes model). The determination of the fair value of share-based payment awards on the date of grant using the Black-Scholes model is affected by our stock price as well as assumptions regarding a number of complex and subjective variables. These variables include, but are not limited to, our expected stock price volatility over the term of the awards, actual and projected employee stock option exercise behaviors, and risk-free interest rate. If factors change and we employ different assumptions in future periods, the compensation expense that we record may differ significantly from what we have recorded in the current period.

We determine the fair value of the share-based compensation awards granted to non-employees as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. If the fair value of the equity instruments issued is used, it is measured using the stock price and other measurement assumptions as of the earlier of either of (i) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, or (ii) the date at which the counterparty’s performance is complete.

We recognize deferred tax assets and liabilities based on differences between the financial statement carrying amounts and tax bases of assets and liabilities, which requires management to perform estimates of future transactions and their respective valuations. We review our deferred tax assets for recoverability and establish a valuation allowance if it is more likely than not that the Company will not realize the benefit of the net deferred tax asset. At December 31, 2014 and 2013, a valuation allowance has been established. The likelihood of a material change in the valuation allowance depends on our ability to generate sufficient future taxable income. In the future, if management determines that the likelihood exists to utilize the Company’s deferred tax assets, a reduction of the valuation allowance could materially increase the Company’s net deferred tax asset.

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the design and operations of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as of September 30, 2015. Based on this evaluation, and in light of the material weaknesses in internal controls over financial reporting described below, the Company’s Chief Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were not effective.

There has been no change in our internal control over financial reporting that occurred during our most recent fiscal year that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. There has been no progress towards remediating our previously disclosed material weakness due to the lack of funding. In addition, as a result of the recent death of our Chief Scientific Officer, any progress toward remediating our material weaknesses is likely to be delayed.

Exhibit		Description
31		Certification of Chief Executive Officer and Principal Financial and Accounting Officer required under Rule 13a-14(a) or Rule 15d-14(a) of the Securities and Exchange Act of 1934, as amended.
32		Certification of Chief Executive Officer and Principal Financial and Accounting Officer required under Rule 13a-14(a) or Rule 15d-14(a) of the Securities and Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350.

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

Nevada		33-0202574
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification Number)

	10190 SW 90th Avenue, Tualatin, Oregon 97123
	(Address of Principal Executive Offices) (Zip Code)

	(212) 980-2235
	(Registrant's Telephone Number, Including Area Code)

Large accelerated filer	[ ]	Accelerated filer	[ ]
Non-accelerated filer	[ ]	Smaller reporting company	[X]

		PAGE
PART I - FINANCIAL INFORMATION

ITEM 1.	Financial Statements	1

	Consolidated Balance Sheets as of September 30, 2015 (Unaudited) and December 31, 2014	1

	Consolidated Statements of Operations (Unaudited) for the three and nine months ended September 30, 2015 and 2014	2

	Consolidated Statements of Cash Flows (Unaudited) for the nine months ended September 30, 2015 and 2014	3

	Condensed Notes to (Unaudited) Consolidated Financial Statements	4

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12

ITEM 4.	Controls and Procedures	17

PART II – OTHER INFORMATION

ITEM 1.	Legal Proceedings	18

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	18

ITEM 3.	Defaults Upon Senior Securities	18

ITEM 4.	Mine Safety Disclosures	18

ITEM 5.	Other Information	18

ITEM 6.	Exhibits	18

Signatures		19

	September 30, 2015			December 31, 2014
Licensed patents and patent rights	$	50,000		$	50,000
Patents		41,004			41,004
NuRx licensed technology		13,200			13,200
Less: accumulated amortization		(82,112	)		(75,683	)
Intangibles, net	$	22,092		$	28,521

Asset Categories	Estimated Useful Life in Years
Patents		17
Patents under licensing		10
Intangibles acquired in 2008 (weighted average)		15

Date: November 16, 2015	/s/ Shalom Hirschman
	Shalom Hirschman Principal Executive, Financial and Accounting Officer