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, 2012

OR

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

For the transition period from to

Commission file number: 33-20897-D

HELIX BIOMEDIX, INC.

(Exact name of registrant as specified in its charter)

Delaware	91-2099117
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

22121 17th Avenue SE, Suite 112, Bothell, Washington 98021

(Address of principal executive offices, including zip code)

(425) 402-8400

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 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
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  ¨    No  x

As of July 30, 2012, 49,720,255 shares of the registrant’s common stock were issued and outstanding.

HELIX BIOMEDIX, INC.

FORM 10-Q

TABLE OF CONTENTS

	Page
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements	1
Condensed Balance Sheets (unaudited)	1
Condensed Statements of Operations and Comprehensive Loss (unaudited)	2
Condensed Statements of Stockholders’ Equity (unaudited)	3
Condensed Statements of Cash Flows (unaudited)	4
Notes to Condensed Financial Statements (unaudited)	5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3. Quantitative and Qualitative Disclosures About Market Risk	19
Item 4. Controls and Procedures	19
PART II - OTHER INFORMATION
Item 1A. Risk Factors	20
Item 6. Exhibits	21
Signatures	22

PART I - FINANCIAL INFORMATION

ITEM 1.         Financial Statements.

HELIX BIOMEDIX, INC.

CONDENSED BALANCE SHEETS

(Unaudited)

	June 30, 2012			December 31, 2011
ASSETS
Current assets:
Cash and cash equivalents	$	739,108		$	1,688,945
Accounts receivable, net		219,141			239,773
Accounts receivable, affiliated company, net		117,599			200,935
Inventory		295,584			363,869
Deferred debt issuance costs, current		201,040			—
Prepaid expenses and other assets		119,265			64,583
Total current assets		1,691,737			2,558,105
Property and equipment, net		14,825			26,098
Intangible assets, net		112,412			146,297
Deferred debt issuance costs, non-current		201,590			—
Other long term assets		9,667			20,884
Investment in affiliated company		202,665			223,255
Total assets	$	2,232,896		$	2,974,639
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	110,957		$	125,324
Accrued compensation and benefits		56,445			87,859
Accrued expenses		47,831			55,463
Deferred revenue		13,602			—
Deferred gross profit, affiliated company		69,718			134,842
Deferred rent, current		8,341			7,155
Total current liabilities		306,894			410,643
Deferred rent, non-current		23,995			28,660
Total liabilities		330,889			439,303
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value, 25,000,000 shares authorized; no shares issued or outstanding		—			—
Common stock, $0.001 par value, 100,000,000 shares authorized; 49,720,255 shares outstanding at June 30, 2012 and December 31, 2011		49,721			49,721
Additional paid-in capital		49,159,261			48,542,453
Accumulated deficit		(47,306,975	)		(46,056,838	)
Total stockholders’ equity		1,902,007			2,535,336
Total liabilities and stockholders’ equity	$	2,232,896		$	2,974,639

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

1

HELIX BIOMEDIX, INC.

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Revenue:
Licensing fees	$	173,453		$	164,975		$	488,545		$	336,400
Peptide and consumer product sales		175,794			340,349			428,521			475,281
Consumer product sales to affiliated company		121,275			187,779			233,878			239,050
Total revenue		470,522			693,103			1,150,944			1,050,731
Cost of revenue:
Cost of peptide and consumer product sales		109,363			247,698			267,136			338,995
Cost of consumer product sales to affiliated company		55,094			104,995			106,852			134,525
Total cost of revenue		164,457			352,693			373,988			473,520
Gross profit		306,065			340,410			776,956			577,211
Operating expenses:
Research and development		87,942			90,747			175,027			315,910
Marketing and business development		269,645			244,018			572,751			448,455
General and administrative		329,235			374,889			713,811			716,681
Accounting, legal and professional fees		181,201			144,196			400,423			309,633
Depreciation and amortization		22,063			28,147			45,158			54,764
Total operating expenses		890,086			881,997			1,907,170			1,845,443
Loss from operations		(584,021	)		(541,587	)		(1,130,214	)		(1,268,232	)
Other income (expense):
Interest income		384			928			1,124			2,132
Amortization of debt issuance costs		(50,123	)		—			(62,240	)		—
Equity in loss of affiliated company		(29,942	)		(59,065	)		(47,590	)		(51,073	)
Change in fair value of option to purchase interest in affiliated company		(4,597	)		(25,151	)		(11,217	)		(17,436	)
Total other income (expense), net		(84,278	)		(83,288	)		(119,923	)		(66,377	)
Net loss and comprehensive loss	$	(668,299	)	$	(624,875	)	$	(1,250,137	)	$	(1,334,609	)
Basic and diluted net loss per share	$	(0.01	)	$	(0.01	)	$	(0.03	)	$	(0.03	)
Weighted average shares outstanding		49,720,255			49,720,255			49,720,255			49,720,255

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

2

HELIX BIOMEDIX, INC.

CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Year Ended December 31, 2011 and for the Six Months Ended June 30, 2012

(Unaudited)

	Common Stock				Additional
	Number of Shares		Amount		Paid-in Capital		Accumulated Deficit			Stockholders’ Equity
Balance at December 31, 2010		49,720,255	$	49,721	$	48,392,985	$	(43,568,262	)	$	4,874,444
Stock-based compensation		—		—		149,468		—			149,468
Net loss		—		—		—		(2,488,576	)		(2,488,576	)
Balance at December 31, 2011		49,720,255		49,721		48,542,453		(46,056,838	)		2,535,336
Stock-based compensation		—		—		151,938		—			151,938
Fair value of warrants issued in connection with letter of credit		—		—		464,870		—			464,870
Net loss		—		—		—		(1,250,137	)		(1,250,137	)
Balance at June 30, 2012		49,720,255	$	49,721	$	49,159,261	$	(47,306,975	)	$	1,902,007

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

3

HELIX BIOMEDIX, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended June 30,
	2012			2011
Cash flows from operating activities
Net loss	$	(1,250,137	)	$	(1,334,609	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		45,158			54,764
Stock-based compensation expense		151,938			118,949
Amortization of debt issuance costs		62,240			—
Equity in loss of affiliated company		47,590			51,073
Change in fair value of option to purchase interest in affiliated company		11,217			17,436
Changes in assets and liabilities:
Accounts receivable, net		20,632			(131,199	)
Accounts receivable, affiliated company, net		83,336			(104,558	)
Inventory		68,285			(27,447	)
Prepaid expenses and other current assets		(54,682	)		(52,341	)
Accounts payable		(14,367	)		61,259
Accrued compensation and benefits		(31,414	)		6,119
Other accrued expenses		(11,111	)		(56,129	)
Deferred gross profit		13,602			—
Deferred gross profit, affiliated company		(65,124	)		36,031
Net cash used in operating activities		(922,837	)		(1,360,652	)
Cash flows from investing activities
Purchases of property and equipment		—			(2,669	)
Website development		—			(20,655	)
Investment in affiliated company		(27,000	)		—
Net cash used in investing activities		(27,000	)		(23,324	)
Net decrease in cash and cash equivalents		(949,837	)		(1,383,976	)
Cash and cash equivalents at beginning of period		1,688,945			4,044,309
Cash and cash equivalents at end of period	$	739,108		$	2,660,333

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

4

HELIX BIOMEDIX, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(Unaudited)

Note 1.  Summary of Significant Accounting Policies

Basis of Presentation and Preparation

The accompanying unaudited condensed financial statements of Helix BioMedix, Inc. (the Company) have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial reporting and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in annual financial statements have been condensed or omitted for interim financial information in accordance with the SEC rules and regulations for quarterly reporting. These condensed financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2011, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 27, 2012.

Use of Estimates

The preparation of the Company’s financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the dates of the balance sheets and the reported amounts of revenue and expenses during the reporting periods. In the opinion of management, the accompanying unaudited condensed financial statements include all normal recurring accruals and adjustments necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the periods indicated and to ensure that the financial statements are not misleading. Significant items subject to such estimates and assumptions include, but are not limited to, revenue recognition, impairments of long-lived assets, and valuation of receivable allowances, inventories, deferred income tax assets, stock-based compensation and option to purchase interest in affiliated company. Actual results could differ from those estimates.

The results of operations for the three and six months ended June 30, 2012 are not necessarily indicative of the results of operations that may be achieved for the entire year ending December 31, 2012.

Recent Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2011-04 (ASU 2011-04), Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs to provide a uniform framework for fair value measurements and related disclosures between U.S. GAAP and International Financial Reporting Standards (“IFRS”). Additional disclosure requirements in the update include: (1) for Level 3 fair value measurements, quantitative information about unobservable inputs used, a description of the valuation processes used by the entity, and a qualitative discussion about the sensitivity of the measurements to changes in the unobservable inputs; (2) for an entity’s use of a nonfinancial asset that is different from the asset’s highest and best use, the reason for the difference; (3) for financial instruments not measured at fair value but for which disclosure of fair value is required, the fair value hierarchy level in which the fair value measurements were determined; and (4) the disclosure of all transfers between Level 1 and Level 2 of the fair value hierarchy. ASU 2011-04 requires prospective application for interim and annual periods beginning on or after December 15, 2011. The Company is currently evaluating the impact that ASU 2011-04 will have on its financial position and results of operations.

In June 2011, the FASB issued ASU No. 2011-05 (ASU 2011-05), Comprehensive Income (Topic 220): Presentation of Comprehensive Income. ASU No. 2011-05 amends existing guidance by allowing an entity the option to present the components of net income and other comprehensive income in either a single continuous statement of comprehensive income or in two separate but consecutive statements. This ASU eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. ASU No. 2011-05 requires retrospective application and is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, with early adoption permitted. As the adoption of this guidance concerns disclosures only, it does not have a material impact on the Company’s financial position or results of operations.

Note 2.  Financing Activities

On March 9, 2012, the Company entered into an LOC Agreement (the LOC Agreement) with Frank T. Nickell, who beneficially owned approximately 40% of the Company’s outstanding common stock, pursuant to which Mr. Nickell established an irrevocable standby letter of credit by JPMorgan Chase Bank, N.A. (JPMorgan) in the amount of $2.0 million on the Company’s behalf and deposited $2.0 million with JPMorgan as collateral. Bank administrative fees for the letter of credit are expected to be 0.75% per year and borrowings under this line of credit (LOC), if not immediately repaid by the collateral, will accrue interest at a rate of 4% per year. The LOC with JPMorgan will expire on July 1, 2013 but will automatically renew until July 1, 2014 unless terminated by JPMorgan at least 14 days prior to the end of the current term, at which time the Company may draw up to the balance remaining on the LOC. Pursuant to the LOC Agreement, the Company agreed to use commercially reasonable efforts to consummate an equity financing prior to the termination date of the LOC in which it would sell and issue shares of its common stock at a price per share of at least $0.60 for aggregate proceeds of at least $3.0 million, upon consummation of which all amounts outstanding under the LOC shall be immediately repaid.

In connection with the LOC Agreement, the Company issued to Mr. Nickell a five-year fully vested warrant to purchase 2,000,000 shares of the Company’s common stock at an exercise price of $0.25 per share and agreed to reimburse Mr. Nickell for his reasonable expenses in connection with the LOC, including any interest and bank fees. As of June 30, 2012, reimbursements to Mr. Nickell had not been significant.

As the warrant was issued to obtain a letter of credit rather than in connection with a debt issuance, the Company measured this warrant at fair value on the inception date and accounted for it as equity in accordance with Accounting Standard Codification (ASC) 505-50-25, Equity-Based Payments to Non-Employees. The issuance of this warrant was equivalent to the payment of a loan commitment or access fee, and, therefore, the offset was recorded as deferred debt issuance costs to be amortized on a straight-line basis over the term of the LOC.

The Company estimated the fair value of this warrant to be $464,870 on March 9, 2012, based on the Black-Scholes option pricing model using an exercise period of 5 years, risk-free rate of 0.90%, volatility of 161%, and a trading price of the underlying shares of $0.25. For the three and six months ended June 30, 2012, the Company recorded a total of $50,123 and $62,240, respectively, of amortization expense related to the establishment of the LOC.

As of June 30, 2012, the Company had no borrowings outstanding under the LOC.

5

HELIX BIOMEDIX, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

Note 3.  Fair Value of Financial Instruments

The inputs used to measure fair value are summarized in the three broad levels listed below:

● Level 1 — Quoted prices in active markets for identical securities;

● Level 2 — Other significant observable inputs (including quoted prices in active markets for similar securities); and

● Level 3 — Significant unobservable inputs (including the Company’s own assumptions in determining fair value of investments).

The following table sets forth by level, within the fair value hierarchy, financial assets and liabilities accounted for at fair value as of June 30, 2012. As required by ASC 820-10, assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

	June 30, 2012		Quoted Prices in Active Market for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Money market funds	$	435,225	$	435,225	$	—	$	—
Option to purchase interest in affiliated company	$	1,145	$	—	$	—	$	1,145

Option to Purchase Interest in Affiliated Company. The Company estimated the fair value of the option to purchase an interest in an affiliated company to be $1,145 and $12,362 at June 30, 2012 and December 31, 2011, respectively, using the multiple of earnings method based on a number of factors and assumptions regarding the affiliated company’s potential future revenue and projected earnings before interest, tax, depreciation and amortization (EBITDA). The Company recorded decreases in fair value of $4,597 and $11,217 in the accompanying condensed statement of operations for the three and six months ended June 30, 2012, respectively.

Financial Instruments.  The carrying amount of the Company’s cash, accounts receivable, accounts payable, accrued compensation and benefits, and accrued expenses approximated their estimated fair values at June 30, 2012 and December 31, 2011 because of the short-term nature of these instruments.

Note 4. Inventory

Inventory consisted of the following as of June 30, 2012 and December 31, 2011:

	June 30, 2012		December 31, 2011
Work in process	$	86,090	$	156,425
Finished goods		209,494		207,444
	$	295,584	$	363,869

Note 5  Property and Equipment

Property and equipment consisted of the following as of June 30, 2012 and December 31, 2011:

	June 30, 2012			December 31, 2011
Machinery and equipment	$	520,950		$	520,950
Website development costs		63,175			63,175
Furniture and fixtures		50,441			50,441
Leasehold improvements		43,993			43,993
		678,559			678,559
Less accumulated depreciation		(663,734	)		(652,461	)
Property and equipment, net	$	14,825		$	26,098

Aggregate depreciation expense for property and equipment during the three months ended June 30, 2012 and 2011 was $5,121 and $11,205, respectively, and was $11,273 and $20,879 during the six months ended June 30, 2012 and 2011, respectively.

6

HELIX BIOMEDIX, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

Note 6.  Intangible Assets

Identifiable intangible assets consisted of the following as of June 30, 2012 and December 31, 2011:

	June 30, 2012			December 31, 2011
Antimicrobial technology	$	222,187		$	222,187
Licensing agreements		61,391			61,391
Patents, pending and approved		834,301			834,301
Total intangible assets		1,117,879			1,117,879
Less accumulated amortization		(1,005,467	)		(971,582	)
Intangible assets, net	$	112,412		$	146,297

Amortization expense for intangible assets was $16,942 during each of the three months ended June 30, 2012 and 2011, and was $33,885 during each of the six months ended June 30, 2012 and 2011.

Note 7.  Investment in Affiliated Company

In July 2010, the Company obtained a 30% membership interest in NuGlow Cosmaceuticals, LLC (NuGlow), a direct-response company selling specialty skin care products, in exchange for an initial capital contribution of $350,000. Subsequently in September 2011, in connection with NuGlow’s additional capital raise, the Company contributed an additional $42,000 to maintain its 30% interest in NuGlow. In March 2012, the Company entered into a Second Amendment to the Amended and Restated Operating Agreement with NuGlow and consented to certain monthly payments by NuGlow. In exchange, the Company’s option to purchase the remaining interest of NuGlow (the Purchase Option) was extended from July 1, 2015 to July 1, 2017. In April 2012, in connection with NuGlow’s additional capital raise, the Company contributed an additional $27,000 to maintain its 30% interest in NuGlow and entered into a Third Amendment to the Amended and Restated Operating Agreement with NuGlow to amend the allocation and distribution of this additional capital contribution prior to other allocations or distributions thereunder.

The Company’s cumulative investment in NuGlow is accounted for as an equity investment and is adjusted at each reporting period to reflect the Company’s share of NuGlow’s net earnings, losses, contributions and any profit distributions. The Company accounts for the Purchase Option at fair value on the balance sheet with changes in value recognized in the statement of operations over the life the of the Purchase Option. Additionally, at each reporting period, the Company assesses its investment in NuGlow to determine whether any events or changes in circumstances have occurred to indicate impairment to this asset. The primary factors the Company considers in its determination are NuGlow’s financial condition and operating performance. The Company would recognize an impairment loss if there was a decline in value that was deemed other than temporary.

At December 31, 2011, the carrying value of the Company’s investment in NuGlow was $223,255. For the three and six months ended June 30, 2012, the Company recorded a loss $29,942 and $47,590, respectively, to account for its share of NuGlow’s net loss during these respective periods. The equity loss for the first six months of 2012, together with the additional investment made in April 2012, reduced the value of the Company’s investment in NuGlow to $202,665 as of June 30, 2012.

NuGlow’s condensed balance sheets at June 30, 2012 and December 31, 2011 and statements of operations for the three and six months ended June 30, 2012 and 2011 are as follows:

NuGlow’s Condensed Balance Sheets	June 30, 2012 (Unaudited)			December 31, 2011 (Unaudited)
Assets
Cash	$	14,459		$	200
Accounts receivable, net		7,013			18,276
Inventory		178,539			275,838
Prepaid expenses and other current assets		15,770			9,513
Total assets	$	215,781		$	303,827
Liabilities and members’ equity
Accounts payable and current liabilities	$	261,456		$	280,867
Members’ equity and accumulated deficit		(45,675	)		22,960
Total liabilities and members’ equity	$	215,781		$	303,827

7

HELIX BIOMEDIX, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
NuGlow’s Condensed Statements of Operations (Unaudited)	2012			2011			2012			2011
Revenue	$	251,741		$	311,164		$	485,112		$	491,884
Cost of goods sold		(129,923	)		(110,774	)		(228,150	)		(198,364	)
Operating expenses		(221,628	)		(397,273	)		(415,597	)		(463,762	)
Net loss	$	(99,810	)	$	(196,883	)	$	(158,635	)	$	(170,242	)

Note 8.  Other Assets

Other assets consisted of the following as of June 30, 2012 and December 31, 2011:

	June 30, 2012		December 31, 2011
Deposits	$	8,522	$	8,522
Option to purchase interest in affiliated company		1,145		12,362
Other assets	$	9,667	$	20,884

Note 9. Deferred Gross Profit, Affiliated Company

Deferred gross profit from an affiliated company consisted of the following as of June 30, 2012 and December 31, 2011:

	June 30, 2012		December 31, 2011
Deferred revenue, affiliated company	$	139,720	$	254,826
Deferred cost of revenue, affiliated company		70,002		119,984
Deferred gross profit, affiliated company	$	69,718	$	134,842

Note 10.  Stock-Based Compensation

2011 Stock Option Plan

On February 10, 2011, the Company’s board of directors adopted, and on May 25, 2011, the Company’s stockholders approved, the Helix BioMedix, Inc. 2011 Stock Option Plan (the 2011 Plan). The 2011 Plan provides for the grant of incentive stock options to employees and non-statutory stock options to employees, non-employee directors and consultants. The 2011 Plan is administered by the board of directors, which has the authority to select the individuals to whom awards are to be granted, the number of awards granted, and the vesting schedule. A total of 12,000,000 shares of common stock are reserved for issuance under the 2011 Plan. Options granted under the 2011 Plan to employees generally vest over a three-year period with 1/3 of the shares vesting after one year from the date of grant and 1/36 of the shares vesting monthly thereafter. Option awards to non-employee directors may vest fully upon grant or quarterly over one year. All option awards have a maximum term of ten years and exercise prices equal to the closing market price of the Company’s common stock on the grant date.

2000 Stock Option Plan

In 2000, the Company’s stockholders approved the Helix BioMedix 2000 Stock Option Plan (the 2000 Plan). The 2000 Plan provided for the granting of incentive stock options and nonqualified stock options to employees, directors and consultants. Options granted under the 2000 Plan generally became exercisable over periods ranging from one to three years, had a maximum term of ten years and exercise prices equal to the closing market price of the Company’s common stock on the grant date. Effective November 6, 2010, additional option awards under the 2000 Plan were discontinued. The 2000 Plan will remain in effect as to outstanding options granted prior to November 6, 2010.

8

HELIX BIOMEDIX, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

Stock Option Activities

During the three months ended June 30, 2012, the Company did not grant any options. For the three months ended June 30, 2011, the Company granted options under the 2011 Plan to purchase an aggregate of 35,000 shares of common stock with a grant date fair value of $0.22 per share. For the six months ended June 30, 2012 and 2011, the Company granted options under the 2011 Plan to purchase an aggregate of 1,200,000 and 170,000 shares of common stock, respectively, with a grant date fair value of $0.23 and $0.25 per share, respectively. Fair value for options granted were calculated using the Black-Scholes option pricing model with the following assumptions:

	Three Months Ended June 30,				Six months Ended June 30,
	2012		2011		2012			2011
Risk-free interest rate		—		2.14%	0.87%	–	1.14%	2.14%	–	2.17%
Expected dividend yield		—		0		0			0
Expected terms in years		—		6.0	5.0	–	6.0	5.5	–	6.0
Expected volatility		—		112%	147%	–	157%	112%	–	118%

The risk-free rate is based on the implied yield available on U.S. Treasury zero–coupon issues with a remaining term equal to the expected term of options issued. The Company does not anticipate declaring dividends in the foreseeable future. For the three and six months ended June 30, 2012 and 2011, the Company calculated expected volatility based on the annualized daily historical volatility of the Company’s stock price commensurate with the expected term of the option and other factors, including peer company data. The Company estimates the expected term as the average of the vesting period and the contractual term. The Company will continue to use this method of estimation until it has sufficient historical data to provide reasonable estimates of expected lives of stock options. The Company’s stock price volatility and option term involves management’s best estimates at that time, both of which impact the fair value of the option calculated under the Black-Scholes pricing model and, ultimately, the expense that will be recognized over the life of the option. The Company recognizes compensation expense for only the portion of options that is expected to vest. Therefore, the Company applies an estimated forfeiture rate that is derived from historical employee termination behavior. Forfeiture rates are revised in subsequent periods if actual forfeitures differ from those estimates.

Stock-based compensation expense was $33,333 and $67,821 for the three months ended June 30, 2012 and 2011, respectively. For the three months ended June 30, 2011, general and administrative expenses included $52,478 of stock compensation expense related to the modification of options held by three members of the board of directors who were not reelected in May 2011. Stock-based compensation expense for the six months ended June 30, 2012 and 2011 was $151,938 and $118,949, respectively. For the six months ended June 30, 2012, stock-based compensation included $92,240 of expenses related to fully vested options granted to the Company’s executives in February 2012. As of June 30, 2012, total unrecognized stock-based compensation related to non-vested stock options was approximately $213,515, which is expected to be recognized over a weighted-average period of approximately 2.2 years.

A summary of the Company’s stock compensation expense for the three and six months ended June 30, 2012 and 2011 is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Research and development	$	4,123	$	382	$	8,247	$	38,484
Marketing and business development		7,003		4,380		58,629		8,769
General and administrative		22,207		63,059		85,062		71,696
Total stock-based compensation	$	33,333	$	67,821	$	151,938	$	118,949

A summary of the Company’s stock option activity for the six months ended June 30, 2012 is presented in the following table:

	Shares Subject to Options			Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding, December 31, 2011		3,264,207		$	0.65
Granted		1,200,000		$	0.25
Exercised		—			—
Forfeited		—			—
Expired		(395,000	)	$	0.87
Outstanding, June 30, 2012		4,069,207		$	0.51		5.91	$	274,644
Exercisable, June 30, 2012		3,009,677		$	0.60		4.68	$	128,033

9

HELIX BIOMEDIX, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

The aggregate intrinsic value in the table above is based on the Company’s closing stock price of $0.40 on June 30, 2012. The intrinsic value is calculated as the difference between the closing stock price and the exercise price of the stock options as of June 30, 2012, had all of the options with exercise prices less than $0.40 been exercised on that date.

As of June 30, 2012, there were 12,000,000 shares of common stock reserved for issuance pursuant to the 2011 Plan, of which 10,393,000 shares remained available for future grants. Additional information regarding options outstanding as of June 30, 2012, is as follows:

			Options Outstanding						Options Exercisable
Range of Exercise Prices			Shares		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Shares		Weighted Average Exercise Price
$0.15	–	$0.37		2,223,957		8.24	$	0.28		1,164,427	$	0.29
$0.40	–	$0.57		795,000		4.29	$	0.49		795,000	$	0.49
$0.70	–	$1.00		869,000		2.18	$	0.90		869,000	$	0.90
$1.20	–	$1.80		181,250		2.28	$	1.56		181,250	$	1.56
$0.15	–	$1.80		4,069,207		5.91	$	0.51		3,009,677	$	0.60

Note 11.  Net Loss per Share

Net loss per share has been computed by dividing net loss by the weighted-average number of shares outstanding during the period. Diluted per share amounts reflect potential dilution from the exercise or conversion of securities into common stock. The Company’s capital structure includes common stock options and common stock warrants, all of which have been excluded from net loss per share calculations as they are antidilutive, as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Weighted average outstanding options		4,069,207		3,908,305		3,887,366		3,905,988
Weighted average outstanding warrants		3,013,643		2,331,917		2,309,978		2,412,427

Note 12.  Concentration of Risks

The Company maintains a portion of its cash balance in one financial institution, which at times may exceed federally insured limits. As of June 30, 2012, the Company maintained approximately $435,000 at major financial institutions in money market accounts insured by the Federal Deposit Insurance Corporation up to $250,000 per account or the Securities Investor Protection Corporation up to $500,000 per account. To date, the Company has not experienced any losses in its money market account.

A significant portion of the Company’s revenue is derived from a concentrated number of customers. The following individual customers accounted for 10% or more of revenue for the three and six months ended June 30, 2012 and 2011:

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Customer A		26	%		13	%		21	%		21	%
Customer B		33	%		29	%		43	%		32	%
Customer C		—			27	%		—			18	%
Customer D		26	%		27	%		20	%		23	%

Note 13.  Liquidity and Capital Resources

For the six months ended June 30, 2012, the Company incurred a net loss of $1,250,137. At June 30, 2012, the Company had $739,108 in cash and cash equivalents. For the six months ended June 30, 2012, cash used in operations was $922,837 and cash used in investing activities was $27,000 which reflected the additional investment in NuGlow.

10

HELIX BIOMEDIX, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

Based on the current status of the Company’s operating and product commercialization development plans, the Company estimates that its existing cash and cash equivalents, together with the LOC with JPMorgan, will be sufficient to fund its operations, continue with work towards its prescription (Rx) product development and support the continued expansion of its consumer program through the remainder of 2012. The Company will need substantial additional capital in order to maintain the current level of operations, continue commercialization of its technology and advance its pharmaceutical programs beyond 2012. Accordingly, the Company will need to draw down on the LOC and/or raise additional funding, which may include debt and/or equity financing. However, there is no assurance that additional funding will be available on favorable terms, if at all. If the Company is unable to obtain the necessary additional funding, the Company may not be able to satisfy its existing obligations or may be required to severely reduce the scope of its operations, which would significantly impede its ability to proceed with current operational plans and could lead to the discontinuation of its business.

The amount of capital the Company will need in the future will depend on many factors, including the amount of revenue generated by the Company, capital expenditures and hiring plans to accommodate future growth, research and development plans, future demand for the Company’s products and technology, and general economic conditions.

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

Forward-Looking Statements

Our disclosure and analysis in this Quarterly Report on Form 10-Q contain forward-looking statements, which provide our current expectations or forecasts of future events. Forward-looking statements include, without limitation:

● statements concerning possible or assumed future results of operations, trends in financial results and business plans, including those relating to earnings growth and revenue growth;

● statements about our product development schedule;

● statements about our future capital requirements and the sufficiency of our cash, cash equivalents, investments, and any other sources to meet these requirements;

● statements about our plans, objectives, expectations, and intentions; and

● other statements that are not historical facts.

Words such as “may,” “should,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “could,” “future,” “target,” and similar expressions may identify forward-looking statements, but the absence of these words does not necessarily mean that a statement is not forward-looking. Our actual results could differ materially from those anticipated in the forward-looking statements for many reasons, including the factors described in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2011. You should carefully consider these factors in evaluating our forward-looking statements.

You should not unduly rely on these forward-looking statements, which speak only as of the date of this Quarterly Report. Except as required by law, we undertake no obligation to publicly revise any forward-looking statement to reflect circumstances or events after the date of this Quarterly Report or to reflect the occurrence of unanticipated events. You should, however, review the factors and risks we describe in the reports we file from time to time with the Securities and Exchange Commission (SEC) after the date of this Quarterly Report.

This information should be read in conjunction with the unaudited condensed financial statements and the notes included in Item 1 of Part I of this Quarterly Report and the audited financial statements and notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended December 31, 2011.

Business Overview

We are a biopharmaceutical company with an extensive proprietary library of structurally diverse bioactive peptides and patents covering hundreds of thousands of peptide sequences. Our mission is to enrich clinical practice and the patient/consumer experience by developing and commercializing topically applied products which offer the benefits of our advanced bioactive small molecule peptide technology. Our vision is to be recognized as the world leader in the identification, qualification and commercialization of natural and synthetic peptides.

Our business strategy is to develop our peptide and small molecule portfolio to derive revenue from a broad base of opportunities including licensing to third parties rights to use select proprietary peptides in specific fields of application and commercializing our own branded products. Over the longer term, we intend to pursue applications for products using our technology in medical devices and pharmaceutical preparations. We have developed numerous peptides with unique sequences for use in the following two areas of application:

● Consumer skin care products — we have developed a range of peptides and small molecule technologies capable of improving different aspects of the skin’s appearance, texture, tone and barrier function and are marketing these peptides as innovative ingredients for cosmetic use; and

● Prescription (Rx) products — certain of our peptides have demonstrated promising results in the areas of infection control, wound healing and immune modulation and are being developed for Rx applications.

Our Rx focus is on prescription-only topical preparations that would be subject to a shorter regulatory approval process under Section 510(k) of the Food, Drug and Cosmetic Act (510(k) devices). We continue to explore possible sources of funding to support further in-house development work on our pharmaceutical programs, which we believe will enhance potential partnership opportunities with pharmaceutical companies.

We generate revenue through license agreements with skin care product manufacturers as well as by selling proprietary branded skin care products through distribution channels and through our dedicated e-commerce websites.

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Critical Accounting Policies and Estimates

The preparation of our financial statements in conformity with United States Generally Accepted Accounting Principles (U.S. GAAP) requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities as of the dates of the balance sheets and the reported amounts of revenue and expenses during the reporting period. Actual results may differ from those estimates and judgments under different assumptions and conditions. We have discussed the critical accounting policies and estimates that we used in the preparation of our financial statements in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of the Operations – Critical Accounting Policies and Estimates,” in our Annual Report on Form 10-K for the year ended December 31, 2011 filed with the SEC on March 27, 2012. There have been no material changes to those critical accounting policies or the underlying accounting estimates or judgments, other than the fact that we have used similar concepts, judgments and estimates underlying our policy related to stock options issued to employees with respect to warrants issued in connection with our line of credit agreement.

Second Quarter Overview

Our total revenue for the three months ended June 30, 2012 decreased by 32.1% compared to the same period in the prior year, driven primarily by a decline in sales of private-labeled products to international distributors as well as to an affiliated company.

Operating expenses increased 0.9% during the three months ended June 30, 2012, as compared to the same period in 2011, principally attributable to higher spending in marketing activities and legal fees related to patents and other general corporate matters, partially offset by a decrease in stock-based compensation expenses.

Our net loss for the three months ended June 30, 2012 increased by 6.9% compared to the same period in 2011, due primarily to lower revenue and gross profit.

As of June 30, 2012, our accumulated deficit was approximately $47,307,000. We may continue to incur substantial operating losses over the next several years based on the estimated costs associated with our current level of operations and continued commercialization of our technology being greater than our anticipated revenue.

Results of Operations

Revenue

Revenue in the three and six months ended June 30, 2012 and 2011 consisted primarily of license fees, peptide sales and consumer product sales as summarized in the table below.

	Three Months Ended June 30,							Six Months Ended June 30,
	2012		2011		Change			2012		2011		Change
License fees	$	173,453	$	164,975		5.1	%	$	488,545	$	336,400		45.2	%
Peptide and consumer product sales		175,794		340,349		(48.3	)%		428,521		475,281		(9.8	)%
Consumer product sales to affiliated company		121,275		187,779		(35.4	)%		233,878		239,050		(2.2	)%
Total revenue	$	470,522	$	693,103		(32.1	)%	$	1,150,944	$	1,050,731		9.5	%

Total revenue decreased by approximately $223,000, or 32.1%, for the three months ended June 30, 2012 compared to the same period in the previous year, and increased by approximately $100,000, or 9.5%, for the first six months of 2012 compared to the first six months of 2011. License fees, which are derived from royalty arrangements, increased by approximately $8,000, or 5.1%, for the second quarter of 2012 compared to the same period in 2011, and increased by $152,000, or 45.2%, for the first six months of 2012 compared to the same period in 2011. The fluctuations in our royalty revenue for the three and six months ended June 30, 2012 reflected the variation in levels of product sales from our licensees.

Peptide and consumer product sales decreased by approximately $165,000, or 48.3%, for the second quarter of 2012 compared to the same period in the previous year and by approximately $47,000, or 9.8%, for the first six months of 2012 compared to the same period in the previous year. The variability in peptide sales, which decreased by 10.8% for the second quarter of 2012 and increased by 14.3% for the first six months of 2012 compared to the same periods in the prior year, resulted from fluctuations of sales to our bulk ingredient customers. The decreases in consumer product sales of 73.7% and 35.6% for the three and six months ended June 30, 2012, respectively, compared to the same periods in the prior year, resulted primarily from lower sales to our international distributors.

Consumer product sales to affiliated company, which consisted of products sold under private labels to NuGlow Cosmaceuticals, LLC (NuGlow), decreased by approximately $67,000, or 35.4%, for the second quarter of 2012 and by $5,000, or 2.2%, for the first six months of 2012 compared to the respective periods in the previous year. As NuGlow is an affiliated company, our revenue to NuGlow is recognized based on NuGlow’s sales to third-party customers or NuGlow’s usage of products for marketing purposes.

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Cost of Revenue and Gross Margin

Cost of revenue consists of cost of peptides and materials associated with consumer products sold. Gross profit is the difference between revenue and cost of revenue, and gross margin is gross profit expressed as a percentage of total revenue. Revenue mix affects our gross margin because our margins from license fees are higher than our margins from peptide and consumer products sales.

Cost of revenue and gross profit for the three and six months ended June 30, 2012 and 2011 are summarized in the table below.

	Three Months Ended June 30,									Six Months Ended June 30,
	2012			2011			Change			2012			2011			Change
Cost of peptides and consumer product sales	$	109,363		$	247,698			(55.8	)%	$	267,136		$	338,995			(21.2	)%
Percentage of total revenue		23.2	%		35.7	%					23.2	%		32.3	%
Cost of consumer product sales to affiliated company		55,094			104,995			(47.5	)%		106,852			134,525			(20.6	)%
Percentage of total revenue		11.7	%		15.1	%					9.3	%		12.8	%
Total cost of revenue	$	164,457		$	352,693			(53.4	)%	$	373,988		$	473,520			(21.0	)%
Gross profit	$	306,065		$	340,410			(10.1	)%	$	776,956		$	577,211			34.6	%

Cost of peptide and consumer product sales decreased by approximately $138,000, or 55.8%, for the three months ended June 30, 2012 compared to the three months ended June 30, 2011 and by approximately $72,000, or 21.2%, for the first six months of 2012 compared to the same period in the previous year. Cost of peptides and consumer product sales for the three and six months ended June 30, 2012 declined at higher rates compared to the decreases in peptide and consumer product revenue during those periods due primarily to the product mix. Cost of consumer product sales to an affiliated company decreased by approximately $50,000, or 47.5%, for the three months ended June 30, 2012 compared to the three months ended June 30, 2011 and by approximately $28,000, or 20.6%, for the first six months of 2012 compared to the same period in the previous year, due primarily to a drop in NuGlow’s sales volume to third-party customers.

Gross margin on peptide and consumer product sales was 37.8% for the three months ended June 30, 2012 compared to 27.2% for the three months ended June 30, 2011, and increased to 37.7% for the six months ended June 30, 2012 compared to 28.7% for the same period in the prior year. The higher gross margin related to peptide and consumer product sales was due primarily to the product mix and customer mix. Consumer product sales typically generate a higher gross margin than peptide sales. Gross margin on sales of consumer products to an affiliated company also grew to 54.6% during the second quarter of 2012 compared to 44.1% for the second quarter of 2011, and increased to 54.3% for the first six months of 2012 compared to 43.7% for the same period in the previous year. The improved gross margin was influenced principally by product mix.

Research and Development

Research and development (R&D) expenses consist primarily of compensation and benefit expenses, stock-based compensation expense, cost of external studies and trials, and contract and other outside service fees related to our R&D activities. R&D expenses for the three and six months ended June 30, 2012 and 2011 are summarized in the table below.

	Three Months Ended June 30,									Six Months Ended June 30,
	2012			2011			Change			2012			2011			Change
Research and development	$	87,942		$	90,747			(3.1	)%	$	175,027		$	315,910			(44.6	)%
Percentage of total revenue		18.7	%		13.1	%					15.2	%		30.1	%

R&D expenses decreased by approximately $3,000, or 3.1%, for the three months ended June 30, 2012 compared to the three months ended June 30, 2011, and by approximately $141,000, or 44.6%, for the six months ended June 30, 2012 compared to the same period in 2011. The decrease in R&D expenses for the three and six months ended June 30, 2012 was primarily attributable to lower spending on external trials and studies and reduced employee compensation resulting from the departure of our former Vice President and Chief Scientific Officer in February 2011. For the remainder of 2012, we anticipate R&D expenses to increase compared to the level experienced in the first half of 2012 as we expect to incur additional spending on external testing and studies related to the product development of our consumer products and Rx programs.

Marketing and Business Development

Marketing and business development (M&BD) expenses consist primarily of compensation and benefit expenses, stock-based compensation expense, consulting fees and various marketing costs. M&BD expenses for the three and six months ended June 30, 2012 and 2011 are summarized in the table below.

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	Three Months Ended June 30,									Six Months Ended June 30,
	2012			2011			Change			2012			2011			Change
Marketing and business development	$	269,645		$	244,018			10.5	%	$	572,751		$	448,455			27.7	%
Percentage of total revenue		57.3	%		35.2	%					49.8	%		42.7	%

M&BD expenses increased by approximately $26,000, or 10.5%, for the three months ended June 30, 2012 compared to the three months ended June 30, 2011, and by approximately $124,000, or 27.7%, for the six months ended June 30, 2012 compared to the same period in 2011. The increase for the three and six months ended June 30, 2012 was primarily driven by higher advertising expense and stock-based compensation expense. For the remainder of 2012, we anticipate M&BD expenses to be consistent with the level experienced in the first half of 2012 in absolute dollars. We expect that stock-based compensation expense will be reduced but that we will incur higher expenses on advertising, market testing and promotions for our current products as well as for new skin care products we plan to introduce in 2012

General and Administrative

General and administrative (G&A) expenses consist primarily of salaries and benefit expenses, stock-based compensation expense, consulting fees and general corporate expenditures. G&A expenses for the three and six months ended June 30, 2012 and 2011 are summarized in the table below.

	Three Months Ended June 30,									Six Months Ended June 30,
	2012			2011			Change			2012			2011			Change
General and administrative	$	329,235		$	374,889			(12.2	)%	$	713,811		$	716,681			(0.4	)%
Percentage of total revenue		70.0	%		54.1	%					62.0	%		68.2	%

G&A expenses decreased by approximately $46,000, or 12.2%, for the three months ended June 30, 2012 compared to the three months ended June 30, 2011, and by approximately $3,000, or 0.4%, for the six months ended June 30, 2012 compared to the same period in 2011. The decrease for the three months ended June 30, 2012 was primarily due to a one-time charge to stock-based compensation in the second quarter of 2011 related to option grant modifications for three board members who were not reelected in May 2011. The decrease for the six months ended June 30, 2012 was due primarily to lower spending in general corporate expenses, partially offset by an increase in stock-based compensation expense. For the remainder of 2012, we anticipate G&A expenses to increase from the level experienced in the first half of 2012 as we expect to incur higher consulting fees and general corporate expenses.

Accounting, Legal and Professional Fees

Accounting, legal and professional fees for the three and six months ended June 30, 2012 and 2011 are summarized in the table below.

	Three Months Ended June 30,									Six Months Ended June 30,
	2012			2011			Change			2012			2011			Change
Accounting, legal and professional fees	$	181,201		$	144,196			25.7	%	$	400,423		$	309,633			29.3	%
Percentage of total revenue		38.5	%		20.8	%					34.8	%		29.5	%

Accounting, legal and professional fees increased by approximately $37,000, or 25.7%, for the three months ended June 30, 2012 compared to the three months ended June 30, 2011, and by approximately $91,000, or 29.3%, for the six months ended June 30, 2012 compared to the same period in 2011. The increase for the three months ended June 30, 2012 was due primarily to higher legal fees associated with patent protection and general corporate matters. The increase for the six months ended June 30, 2012 was principally attributable to increases in accounting fees and legal fees associated with patent protection, partially offset by a decrease in legal fees related to general corporate matters.

For the remainder of 2012, we anticipate accounting, legal and professional fees will increase significantly as we expect to incur a much higher level of spending on legal fees related to the protection of our intellectual property.

Depreciation and Amortization

Depreciation and amortization expenses for the three and six months ended June 30, 2012 and 2011 are summarized in the table below.

	Three Months Ended June 30,									Six Months Ended June 30,
	2012			2011			Change			2012			2011			Change
Depreciation and amortization	$	22,063		$	28,147			(21.6	)%	$	45,158		$	54,764			(17.5	)%
Percentage of total revenue		4.7	%		4.1	%					3.9	%		5.2	%

15

Depreciation and amortization expenses decreased by approximately $6,000, or 21.6%, for the three months ended June 30, 2012 compared to the three months ended June 30, 2011, and by approximately $10,000, or 17.5%, for the six months ended June 30, 2012 compared to the same period in 2011. The decrease for the three and six months ended June 30, 2012 was primarily due to reduced depreciation from assets becoming fully depreciated. For the remainder of 2012, we expect depreciation and amortization expenses to be consistent with the levels experienced in the first half of 2012.

Other Income (Expense), Net

Other income (expense), net consists of interest income, interest expense related to our outstanding convertible notes payable and accretion of discount on the convertible notes payable.

Other income (expense), net for the three and six months ended June 30, 2012 and 2011 is summarized in the table below.

	Three Months Ended June 30,									Six Months Ended June 30,
	2012			2011			Change			2012			2011			Change
Interest income	$	384		$	928			(58.6	)%	$	1,124		$	2,132			(47.3	)%
Amortization of debt issuance costs		(50,123	)		—		NM				(62,240	)		—		NM
Equity in loss of affiliated company		(29,942	)		(59,065	)		(49.3	)%		(47,590	)		(51,073	)		(6.8	)%
Change in fair value of option to purchase interest in affiliated company		(4,597	)		(25,151	)		(81.7	)%		(11,217	)		(17,436	)		(35.7	)%
Total other income (expense), net	$	(84,278	)	$	(83,288	)		1.2	%	$	(119,923	)	$	(66,377	)		80.7	%

NM – Not meaningful

Interest Income. Interest income for the three months ended June 30, 2012 and 2011 was not significant due to our low cash balance and prevailing interest rates. Interest income for the six months ended June 30, 2012 decreased by $1,000 compared to the same period in 2011, due primarily to a lower average cash balance on hand. For the remainder of 2012, we expect interest income to be lower than the level experienced in the first half of 2012 due to our decreasing balance in cash and cash equivalents.

Amortization of Debt Issuance Costs. For the three and six months ended June 30, 2012, we recorded expenses of approximately $50,000 and $62,000, respectively, related to the letter of credit established on our behalf by our largest stockholder on March 9, 2012. These amounts represented the amortization of the fair value of the warrants issued in connection with the letter of credit for the periods presented.

Equity in Loss of Affiliated Company. The equity in loss of affiliated company represented our share of NuGlow’s net loss for the reported periods. Equity in loss of affiliated company decreased by approximately $29,000, or 49.3%, for the three months ended June 30, 2012 compared to the three months ended June 30, 2011, and by approximately $3,000, or 6.8%, for the six months ended June 30, 2012 compared to the same period in 2011.

Change in Value of Option to Purchase Interest in Affiliated Company. For the three and six months ended June 30, 2012, we recorded a loss of approximately $5,000 and $11,000, respectively, compared to a loss of approximately $25,000 and $17,000 for the three and six months ended June 30, 2011, respectively, which reflected the change in fair value of the option to purchase the remainder of NuGlow under certain circumstances.

Liquidity and Capital Resources

Since inception, we have financed our operations primarily through the private sale of debt and equity securities. Our principal sources of liquidity are cash and cash equivalents. As of June 30, 2012, we had approximately $739,000 in cash and cash equivalents, compared to approximately $1.7 million in cash and cash equivalents at December 31, 2011. The decrease in cash and cash equivalents from December 31, 2011 was primarily attributable to cash used in operations and investment in an affiliated company.

Cash Flows from Operating Activities

Cash used in operating activities for the six months ended June 30, 2012 and 2011 was approximately $923,000 and $1,361,000, respectively, and in each case derived primarily from the net loss for the period plus the net effect of non-cash expenses. Our operating cash flows are also influenced by our working capital needs to support growth, in particular fluctuations in inventory, accounts receivable, accounts payable and other current assets and liabilities. We continue to experience negative cash flows from operating activities due to the cash requirements to maintain our current level of operations while supporting activities to expand our product lines and revenue base.

For the six months ended June 30, 2012, changes in accounts receivable, inventory and deferred revenue provided approximately $186,000 of cash while changes in prepaid expenses and other assets, accounts payable, accrued expenses and deferred gross profit from an affiliated company used approximately $177,000 of cash. During the six months ended June 30, 2011, changes in accounts receivable, inventory, prepaid expenses and other assets, and accrued expenses used approximately $372,000 of cash, while changes in accounts payable, accrued compensation and benefits, and deferred gross profit from an affiliated company provided approximately $103,000 of cash.

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Cash Flows from Investing Activities

For the six months ended June 30, 2012, cash used in investing activities was approximately $27,000, which reflected the additional investment in NuGlow, while cash used of approximately $23,000 during the same period in 2011 was due to payments for website development costs and purchases of capital assets.

Cash Flows from Financing Activities

For the six months ended June 30, 2012 and 2011, there was no cash provided by financing activities.

On March 9, 2012, we entered into an LOC Agreement (the LOC Agreement) with Frank T. Nickell, who beneficially owned approximately 40% of our outstanding common stock, pursuant to which Mr. Nickell established an irrevocable standby letter of credit by JPMorgan Chase Bank, N.A. (JPMorgan) in the amount of $2.0 million on our behalf and deposited $2.0 million with JPMorgan as collateral. Bank administrative fees for the letter of credit are expected to be 0.75% per year and borrowings under this line of credit (LOC), if not immediately repaid by the collateral, will accrue interest at a rate of 4% per year. The LOC will expire on July 1, 2013 but will automatically renew until July 1, 2014 unless terminated by JPMorgan at least 14 days prior to the end of the current term, at which time we may draw up to the balance remaining on the LOC. Pursuant to the LOC Agreement, we agreed to use commercially reasonable efforts to consummate an equity financing prior to the termination date of the LOC in which we would sell and issue shares of our common stock at a price per share of at least $0.60 for aggregate proceeds of at least $3.0 million, upon consummation of which all amounts outstanding under the LOC shall be immediately repaid. In connection with the LOC Agreement, we issued to Mr. Nickell a five-year fully vested warrant to purchase 2,000,000 shares of our common stock at an exercise price of $0.25 per share and agreed to reimburse Mr. Nickell for his reasonable expenses in connection with the LOC, including any interest and bank fees. As of June 30, 2012, we had no borrowings outstanding under the LOC and reimbursements to Mr. Nickell had not been significant.

Based on the current status of our operating and product commercialization development plans, we estimate that our existing cash and cash equivalents, together with the LOC with JPMorgan, will be sufficient to fund our operations, continue with work towards our Rx product development and support the continued expansion of our consumer program through the remainder of 2012. We will need substantial additional capital in order to maintain the current level of operations, continue commercialization of our technology and advance our pharmaceutical programs beyond 2012. Accordingly, we will need to draw down on the LOC and/or raise additional funding, which may include debt and/or equity financing. However, there is no assurance that additional funding will be available on favorable terms, if at all. If we are unable to obtain the necessary additional funding, we may not be able to satisfy our existing obligations or may be required to severely reduce the scope of our operations, which would significantly impede our ability to proceed with current operational plans and could lead to the discontinuation of our business.

The amount of capital we will need in the future will depend on many factors, including the amount of revenue we generate, capital expenditures and hiring plans to accommodate future growth, research and development plans, future demand for our products and technology, and general economic conditions.

Contractual Obligations

The following table summarizes our contractual obligations and the effect such obligations are expected to have on liquidity in future periods as of June 30, 2012:

Contractual Obligations	Remainder of 2012		2013 through 2014		2015 through 2016		2017 through 2018		Total
Operating lease	$	39,528	$	156,306	$	172,816	$	136,140	$	504,790
Purchase order commitments (1)		187,012		—		—		—		187,012
Total contractual obligations	$	226,540	$	156,306	$	172,816	$	136,140	$	691,802

(1)     Purchase order commitments primarily consist of open orders for inventory.

17

Recent Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2011-04 (ASU 2011-04), Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs to provide a uniform framework for fair value measurements and related disclosures between U.S. GAAP and International Financial Reporting Standards (“IFRS”). Additional disclosure requirements in the update include: (1) for Level 3 fair value measurements, quantitative information about unobservable inputs used, a description of the valuation processes used by the entity, and a qualitative discussion about the sensitivity of the measurements to changes in the unobservable inputs; (2) for an entity’s use of a nonfinancial asset that is different from the asset’s highest and best use, the reason for the difference; (3) for financial instruments not measured at fair value but for which disclosure of fair value is required, the fair value hierarchy level in which the fair value measurements were determined; and (4) the disclosure of all transfers between Level 1 and Level 2 of the fair value hierarchy. ASU 2011-04 requires prospective application for interim and annual periods beginning on or after December 15, 2011. We are currently evaluating the impact that ASU 2011-04 will have on our financial position and results of operations.

In June 2011, the FASB issued ASU No. 2011-05 (ASU 2011-05), Comprehensive Income (Topic 220): Presentation of Comprehensive Income. ASU No. 2011-05 amends existing guidance by allowing an entity the option to present the components of net income and other comprehensive income in either a single continuous statement of comprehensive income or in two separate but consecutive statements. This ASU eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. ASU No. 2011-05 requires retrospective application and is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, with early adoption permitted. As the adoption of this guidance concerns disclosures only, it does not have a material impact on our financial position or results of operations.

18

ITEM 3.  Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

ITEM 4.  Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Acting Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Based on that evaluation, the Chief Executive Officer and Acting Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Acting Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Change in Internal Control over Financial Reporting

No change in our internal control over financial reporting occurred during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

19

PART II – OTHER INFORMATION

ITEM 1A.     Risk Factors.

There are numerous factors that affect our business and results of operations, many of which are beyond our control. Please see our Annual Report on Form 10-K for the year ended December 31, 2011 for a description of some of the risks and uncertainties that we face. There have been no material changes in our risk factors from those described in that Annual Report. If any of those risks were to occur, our business, operating results and financial condition could be seriously harmed.

20

ITEM 6.         Exhibits.

			Incorporated by Reference
Exhibit Number	Exhibit Description	Filed Herewith	Form	Period Ending	Exhibit	Filing Date
2.1	Proposal for Approval of Reincorporation of Helix BioMedix, Inc., a Colorado corporation, from Colorado to Delaware		10-KSB	12/31/00	2	4/16/01
3.1	Certificate of Ownership and Merger of Helix BioMedix, Inc. a Delaware corporation and Helix BioMedix, Inc., a Louisiana corporation		10-KSB/A	12/31/02	3.1	4/30/03
3.2	Certificate of Incorporation of Helix BioMedix, Inc.		10-KSB/A	12/31/00	3-A	5/18/01
3.3	Certificate of Amendment to the Certificate of Incorporation of Helix BioMedix, Inc.		10-KSB/A	12/31/02	3.3	4/30/03
3.4	Bylaws of Helix BioMedix, Inc.		10-KSB/A	12/31/00	3-B	5/18/01
4.1	Rights Agreement dated August 21, 2003		10-KSB	12/31/03	10.27	3/26/04
4.2	Acceptance and Acknowledgement of Appointment dated January 4, 2004		10-KSB	12/31/03	10.28	3/26/04
10.11(c)	Third Amendment dated April 9, 2012 to Amended and Restated Operating Agreement of NuGlow Cosmaceuticals, LLC among the Company, NuGlow Cosmaceuticals, LLC and Camden Street Partners, LLC	X
31.1	Certification of the Company’s Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934	X
31.2	Certification of the Company’s Acting Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934	X
32.1	Certification of the Company’s Chief Executive Officer pursuant to 18 U.S.C. Section 1350	X
32.2	Certification of the Company’s Acting Chief Financial Officer pursuant to 18 U.S.C. Section 1350	X
101.INS*	XBRL Instance Document	X
101.SCH*	XBRL Taxonomy Extension Schema Document	X
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document	X
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document	X
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document	X
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document	X

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

21

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.

August 2, 2012

HELIX BIOMEDIX, INC.
(Registrant)
By:	/s/ R. Stephen Beatty
R. Stephen Beatty
President and Chief Executive Officer and
Acting Chief Financial Officer
(Principal Executive Officer and
Acting Principal Financial Officer)

22

EX-10.11(C)

Exhibit 10.11(c)

THIRD AMENDMENT

This Third Amendment (this “Amendment”) is made and entered into this 9th day of April, 2012, by and among NuGlow Cosmaceuticals, LLC (“NuGlow”), Camden Street Partners, LLC (“Camden”) and Helix BioMedix, Inc. (“HXBM”) and amends that certain Amended and Restated Operating Agreement of NuGlow Cosmaceuticals, LLC dated July 1, 2010 by and among NuGlow, Camden and HXBM, as amended (the “LLC Agreement”).

1.             Amendments to LLC Agreement.

(a)          Section 4.2(a) of the LLC Agreement is hereby amended and restated in its entirety as follows:

“(a)        Except as otherwise provided in Sections 4.2(b) through (h), Net Income and Net Loss shall be allocated to the Members as follows:

(A)         For allocations made or related to any period prior to September 1, 2011:

(i)           First, Net Income shall be allocated to offset in reverse order any Net Loss allocated in the current period and in all prior periods that have not previously been offset under this Section 4.2;

(ii)          Next, Net Income shall be allocated 70% to HXBM and 30% to Camden until such time as HXBM has received total cumulative distributions (excluding any Tax Distributions) that equal HXBM’s initial Capital Contribution;

(iii)         Next, Net Income shall be allocated among all Members in proportion to their respective Percentage Interests;

(iv)         In the event of a Net Loss, the Net Loss shall be allocated first as necessary to offset in reverse order any Net Income allocated in the current and all prior periods that have not previously been offset or distributed to the Members;

(v)          Next, any Net Loss shall be allocated among all Members in proportion to their respective Percentage Interests.

(B)          For allocations made or related to any period on or after September 1, 2011:

(i)           First, Net Income shall be allocated to offset in reverse order any Net Loss allocated in the current period and in all prior periods that have not previously been offset under this Section 4.2;

1

(ii)           Next, Net Income shall be allocated 30% to HXBM and 70% to Camden until such time as HXBM has received additional total cumulative distributions (excluding any Tax Distributions) that equal $69,000 and Camden has received total cumulative distributions (excluding any Tax Distributions) that equal $161,000;

(iii)          Next, Net Income shall be allocated 70% to HXBM and 30% to Camden until such time as HXBM has received additional total cumulative distributions (excluding any Tax Distributions) that equal HXBM’s initial Capital Contribution;

(iv)          Next, Net Income shall be allocated among all Members in proportion to their respective Percentage Interests;

(v)           In the event of a Net Loss, the Net Loss shall be allocated first as necessary to offset in reverse order any Net Income allocated in the current and all prior periods that have not previously been offset or distributed to the Members;

(vi)          Next, any Net Loss shall be allocated among all Members in proportion to their respective Percentage Interests.”

(b)           Section 4.4(b) of the LLC Agreement is hereby amended and restated in its entirety as follows:

“(b)           For distributions other than those paid under Section 4.4(a) and Tax Distributions, the Manager shall distribute any Distributable Cash to the Members as follows: (A) for distributions made or related to any period prior to September 1, 2011, (i) until such time as HXBM has received total cumulative distributions (excluding any Tax Distributions) that equal HXBM’s initial Capital Contribution, 70% of such Distributable Cash shall be distributed to HXBM and 30% of such Distributable Cash shall be distributed to Camden; and (ii) thereafter, Distributable Cash shall be distributed to the Members in accordance with each Member’s Percentage Interest; and (B) for distributions made or related to any period on or after September 1, 2011, (i) until such time as HXBM has received total cumulative distributions (excluding any Tax Distributions) that equal $69,000 and Camden has received total cumulative distributions (excluding any Tax Distributions) that equal $161,000, 30% of such Distributable Cash shall be distributed to HXBM and 70% of such Distributable Cash shall be distributed to Camden; (ii) until such time as HXBM has received additional total cumulative distributions (excluding any Tax Distributions) that equal HXBM’s initial Capital Contribution, 70% of such Distributable Cash shall be distributed to HXBM and 30% of such Distributable Cash shall be distributed to Camden; and (iii) thereafter, Distributable Cash shall be distributed to the Members in accordance with each Member’s Percentage Interest.”

2

(c)           Section 10.2(d) of the LLC Agreement is hereby amended and restated in its entirety as follows:

“(d)           All liquidation proceeds and any other remaining assets of the Company shall be distributed to the Members and Economic Interest Holders as follows: (A) for any such distributions made or related to any period prior to September 1, 2011, (i) first, 100% of such proceeds shall be paid to HXBM until such time as HXBM has received total cumulative distributions (comprising both ordinary and liquidating distributions, but excluding any Tax Distributions) that equal the aggregate of HXBM’s initial and any additional Capital Contributions; (ii) second, to the extent of the positive balance of each Member’s or Economic Interest Holder’s Capital Account, as determined after taking into account all Capital Account adjustments, including, but not limited to, adjustments in connection with the liquidation, until each such Capital Account is reduced to zero; and then (iii) the remainder, if any, in accordance with the Percentage Interest of each Member or Economic Interest Holder, as applicable; and (B) for any such distributions made or related to any period on or after September 1, 2011, (i) 30% of such proceeds shall be paid to HXBM until such time as HXBM has received total cumulative distributions (comprising both ordinary and liquidating distributions, but excluding any Tax Distributions) that equal $69,000 and 70% of such proceeds shall be paid to Camden until such time as Camden has received total cumulative distributions (comprising both ordinary and liquidating distributions, but excluding any Tax Distributions) that equal $161,000; (ii) second, 100% of any remaining proceeds shall be paid to HXBM until such time as HXBM has received additional total cumulative distributions (comprising both ordinary and liquidating distributions, but excluding any Tax Distributions) that equal the aggregate of HXBM’s initial and any additional Capital Contributions (less up to $69,000 paid pursuant to clause (d)(B)(i) above); (iii) third, to the extent of the positive balance of each Member’s or Economic Interest Holder’s Capital Account, as determined after taking into account all Capital Account adjustments, including, but not limited to, adjustments in connection with the liquidation, until each such Capital Account is reduced to zero; and then (iv) the remainder, if any, in accordance with the Percentage Interest of each Member or Economic Interest Holder, as applicable.”

2.             Force and Effect.

The remainder of the LLC Agreement is not amended hereby and shall remain in full force and effect.  The parties hereby ratify and confirm the terms and conditions of the LLC Agreement, as amended by this Amendment.

[signature page follows]

3

IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their duly authorized representatives as of the date first set forth above.

NUGLOW COSMACEUTICALS, LLC
By:	/s/ Steven Sheiner
	Name: Steven Sheiner
	Title: Managing Member of Camden Street Partners, LLC, its Manager

CAMDEN STREET PARTNERS, LLC
By:	/s/ Steven Sheiner
	Name: Steven Sheiner
	Title: Managing Member

HELIX BIOMEDIX, INC.
By:	/s/ R. Stephen Beatty
	Name: R. Stephen Beatty
	Title: President and Chief Executive Officer

4

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO RULE 13a-14(a) OR RULE 15d-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934

I, R. Stephen Beatty, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Helix BioMedix, 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.

Date: August 2, 2012

/s/ R. Stephen Beatty

R. Stephen Beatty

President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO RULE 13a-14(a) OR RULE 15d-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934

I, R. Stephen Beatty, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Helix BioMedix, 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.

Date: August 2, 2012

/s/ R. Stephen Beatty

R. Stephen Beatty

Acting Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350

I, R. Stephen Beatty, President and Chief Executive Officer of Helix BioMedix, Inc. (the “Company”), certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) the Quarterly Report on Form 10-Q of the Company for the quarterly period ended June 30, 2012 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

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

Date: August 2, 2012

/s/ R. Stephen Beatty

R. Stephen Beatty

President and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION OF ACTING CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350

I, R. Stephen Beatty, Acting Chief Financial Officer of Helix BioMedix, Inc. (the “Company”), certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) the Quarterly Report on Form 10-Q of the Company for the quarterly period ended June 30, 2012 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

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

Date: August 2, 2012

/s/ R. Stephen Beatty

R. Stephen Beatty

Acting Chief Financial Officer

XML

Note 7 - Investment in Affiliated Company (Detail) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Apr. 30, 2012	Dec. 31, 2011	Sep. 30, 2011	Jul. 31, 2010
Equity Method Investment, Ownership Percentage					30.00%		30.00%	30.00%
Equity Method Investment Summarized Financial Information, Equity					$ 27,000		$ 42,000	$ 350,000
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures	202,665		202,665			223,255
Income (Loss) from Equity Method Investments	$ (29,942)	$ (59,065)	$ (47,590)	$ (51,073)

XML

Note 10 - Stock-Based Compensation (Detail) - Additional information regarding options outstanding (USD $)	6 Months Ended
	Jun. 30, 2012
Options Outstanding - Shares	4,069,207
Options Outstanding - Weighted Average Remaining Contractual Life (Years)	5 years 332 days
Options Outstanding - Weighted Average Exercise Price (in Dollars per share)	$ 0.51
Options Exercisable - Shares	3,009,677
Options Exercisable -Weighted Average Exercise Price (in Dollars per share)	$ 0.60
Range of $0.15 - $0.37 [Member]
Options Outstanding - Shares	2,223,957
Options Outstanding - Weighted Average Remaining Contractual Life (Years)	8 years 87 days
Options Outstanding - Weighted Average Exercise Price (in Dollars per share)	$ 0.28
Options Exercisable - Shares	1,164,427
Options Exercisable -Weighted Average Exercise Price (in Dollars per share)	$ 0.29
Range of $0.40 - $0.57 [Member]
Options Outstanding - Shares	795,000
Options Outstanding - Weighted Average Remaining Contractual Life (Years)	4 years 105 days
Options Outstanding - Weighted Average Exercise Price (in Dollars per share)	$ 0.49
Options Exercisable - Shares	795,000
Options Exercisable -Weighted Average Exercise Price (in Dollars per share)	$ 0.49
Range of $0.70 - $1.00 [Member]
Options Outstanding - Shares	869,000
Options Outstanding - Weighted Average Remaining Contractual Life (Years)	2 years 65 days
Options Outstanding - Weighted Average Exercise Price (in Dollars per share)	$ 0.90
Options Exercisable - Shares	869,000
Options Exercisable -Weighted Average Exercise Price (in Dollars per share)	$ 0.90
Range of $1.20 - $1.80 [Member]
Options Outstanding - Shares	181,250
Options Outstanding - Weighted Average Remaining Contractual Life (Years)	2 years 102 days
Options Outstanding - Weighted Average Exercise Price (in Dollars per share)	$ 1.56
Options Exercisable - Shares	181,250
Options Exercisable -Weighted Average Exercise Price (in Dollars per share)	$ 1.56

XML

Note 10 - Stock-Based Compensation (Detail) - Summary of the Company’s stock compensation expense (USD $)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011
Stock-based compensation	$ 33,333	$ 67,821	$ 151,938	$ 118,949	$ 149,468
Research and Development Expense [Member]
Stock-based compensation	4,123	382	8,247	38,484
Marketing Expense [Member]
Stock-based compensation	7,003	4,380	58,629	8,769
General and Administrative Expense [Member]
Stock-based compensation	$ 22,207	$ 63,059	$ 85,062	$ 71,696

XML

Note 3 - Fair Value of Financial Instruments (Detail) - Financial assets and liabilities accounted for at fair value (USD $)	Jun. 30, 2012	Dec. 31, 2011
Money market funds	$ 435,225
Option to purchase interest in affiliated company	1,145	12,362
Option to purchase interest in affiliated company	1,145	12,362
Fair Value, Inputs, Level 1 [Member]
Money market funds	435,225
Fair Value, Inputs, Level 3 [Member]
Option to purchase interest in affiliated company	$ 1,145

XML

Note 7 - Investment in Affiliated Company (Tables)

6 Months Ended

Jun. 30, 2012

Balance Sheets [Member]

Schedule of Equity Method Investments [Table Text Block]

NuGlow’s Condensed Balance Sheets	June 30, 2012 (Unaudited)			December 31, 2011 (Unaudited)
Assets
Cash	$	14,459		$	200
Accounts receivable, net		7,013			18,276
Inventory		178,539			275,838
Prepaid expenses and other current assets		15,770			9,513
Total assets	$	215,781		$	303,827
Liabilities and members’ equity
Accounts payable and current liabilities	$	261,456		$	280,867
Members’ equity and accumulated deficit		(45,675	)		22,960
Total liabilities and members’ equity	$	215,781		$	303,827

Statements of Operations [Member]

Schedule of Equity Method Investments [Table Text Block]

	Three Months Ended June 30,						Six Months Ended June 30,
NuGlow’s Condensed Statements of Operations (Unaudited)	2012			2011			2012			2011
Revenue	$	251,741		$	311,164		$	485,112		$	491,884
Cost of goods sold		(129,923	)		(110,774	)		(228,150	)		(198,364	)
Operating expenses		(221,628	)		(397,273	)		(415,597	)		(463,762	)
Net loss	$	(99,810	)	$	(196,883	)	$	(158,635	)	$	(170,242	)

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Note 12 - Concentration of Risks (Detail) (USD $)	6 Months Ended
	Jun. 30, 2012
Concentration Risk, Credit Risk, Uninsured Deposits	The Company maintains a portion of its cash balance in one financial institution, which at times may exceed federally insured limits.
Money Market Funds, at Carrying Value (in Dollars)	$ 435,225
Interest-bearing Deposits [Member]
Money Market Funds, at Carrying Value (in Dollars)	$ 435,000

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Note 8 - Other Assets (Detail) - Other assets (USD $)	Jun. 30, 2012	Dec. 31, 2011
Deposits	$ 8,522	$ 8,522
Option to purchase interest in affiliated company	1,145	12,362
Other assets	$ 9,667	$ 20,884

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Note 6 - Intangible Assets (Detail) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Amortization of Intangible Assets	$ 16,942	$ 16,942	$ 33,885	$ 33,885

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Note 13 - Liquidity and Capital Resources (Detail) (USD $)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011	Dec. 31, 2010
Net Income (Loss) Attributable to Parent	$ (668,299)	$ (624,875)	$ (1,250,137)	$ (1,334,609)	$ (2,488,576)
Cash and Cash Equivalents, at Carrying Value	739,108	2,660,333	739,108	2,660,333	1,688,945	4,044,309
Net Cash Provided by (Used in) Operating Activities			(922,837)	(1,360,652)
Net Cash Provided by (Used in) Investing Activities			$ (27,000)	$ (23,324)

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Note 10 - Stock-Based Compensation (Detail) - Summary of stock option activity (USD $)	6 Months Ended
	Jun. 30, 2012
Outstanding, June 30, 2012	4,069,207
Outstanding, June 30, 2012 (in Dollars per share)	$ 0.51
Outstanding, June 30, 2012	5 years 332 days
Exercisable, June 30, 2012	3,009,677
Exercisable, June 30, 2012 (in Dollars per share)	$ 0.60
Options [Member]
Outstanding, December 31, 2011	3,264,207
Outstanding, December 31, 2011 (in Dollars per share)	$ 0.65
Outstanding, June 30, 2012	4,069,207
Outstanding, June 30, 2012 (in Dollars per share)	$ 0.51
Outstanding, June 30, 2012	5 years 332 days
Outstanding, June 30, 2012 (in Dollars)	$ 274,644
Exercisable, June 30, 2012	3,009,677
Exercisable, June 30, 2012 (in Dollars per share)	$ 0.60
Exercisable, June 30, 2012	4 years 248 days
Exercisable, June 30, 2012 (in Dollars)	$ 128,033
Granted	1,200,000
Granted (in Dollars per share)	$ 0.25
Expired	(395,000)
Expired (in Dollars per share)	$ 0.87

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Note 3 - Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2012

Fair Value Disclosures [Text Block]

Note 3.  Fair Value of Financial Instruments

The inputs used to measure fair value are summarized in the three broad levels listed below:

● Level 1 — Quoted prices in active markets for identical securities;

● Level 2 — Other significant observable inputs (including quoted prices in active markets for similar securities); and

● Level 3 — Significant unobservable inputs (including the Company’s own assumptions in determining fair value of investments).

The following table sets forth by level, within the fair value hierarchy, financial assets and liabilities accounted for at fair value as of June 30, 2012. As required by ASC 820-10, assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

	June 30, 2012		Quoted Prices in Active Market for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Money market funds	$	435,225	$	435,225	$	—	$	—
Option to purchase interest in affiliated company	$	1,145	$	—	$	—	$	1,145

Option to Purchase Interest in Affiliated Company. The Company estimated the fair value of the option to purchase an interest in an affiliated company to be $1,145 and $12,362 at June 30, 2012 and December 31, 2011, respectively, using the multiple of earnings method based on a number of factors and assumptions regarding the affiliated company’s potential future revenue and projected earnings before interest, tax, depreciation and amortization (EBITDA). The Company recorded decreases in fair value of $4,597 and $11,217 in the accompanying condensed statement of operations for the three and six months ended June 30, 2012, respectively.

Financial Instruments.  The carrying amount of the Company’s cash, accounts receivable, accounts payable, accrued compensation and benefits, and accrued expenses approximated their estimated fair values at June 30, 2012 and December 31, 2011 because of the short-term nature of these instruments.

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Note 9 - Deferred Gross Profit, Affiliated Company (Detail) - Deferred gross profit from an affiliated company (USD $)	Jun. 30, 2012	Dec. 31, 2011
Deferred revenue, affiliated company	$ 139,720	$ 254,826
Deferred cost of revenue, affiliated company	70,002	119,984
Deferred gross profit, affiliated company	$ 69,718	$ 134,842

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Note 11 - Net Loss per Share (Tables)

6 Months Ended

Jun. 30, 2012

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Weighted average outstanding options		4,069,207		3,908,305		3,887,366		3,905,988
Weighted average outstanding warrants		3,013,643		2,331,917		2,309,978		2,412,427

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Note 10 - Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2012

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

	Three Months Ended June 30,				Six months Ended June 30,
	2012		2011		2012			2011
Risk-free interest rate		—		2.14%	0.87%	–	1.14%	2.14%	–	2.17%
Expected dividend yield		—		0		0			0
Expected terms in years		—		6.0	5.0	–	6.0	5.5	–	6.0
Expected volatility		—		112%	147%	–	157%	112%	–	118%

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block]

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Research and development	$	4,123	$	382	$	8,247	$	38,484
Marketing and business development		7,003		4,380		58,629		8,769
General and administrative		22,207		63,059		85,062		71,696
Total stock-based compensation	$	33,333	$	67,821	$	151,938	$	118,949

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

	Shares Subject to Options			Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding, December 31, 2011		3,264,207		$	0.65
Granted		1,200,000		$	0.25
Exercised		—			—
Forfeited		—			—
Expired		(395,000	)	$	0.87
Outstanding, June 30, 2012		4,069,207		$	0.51		5.91	$	274,644
Exercisable, June 30, 2012		3,009,677		$	0.60		4.68	$	128,033

Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block]

			Options Outstanding						Options Exercisable
Range of Exercise Prices			Shares		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Shares		Weighted Average Exercise Price
$0.15	–	$0.37		2,223,957		8.24	$	0.28		1,164,427	$	0.29
$0.40	–	$0.57		795,000		4.29	$	0.49		795,000	$	0.49
$0.70	–	$1.00		869,000		2.18	$	0.90		869,000	$	0.90
$1.20	–	$1.80		181,250		2.28	$	1.56		181,250	$	1.56
$0.15	–	$1.80		4,069,207		5.91	$	0.51		3,009,677	$	0.60

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Note 10 - Stock-Based Compensation (Detail) (USD $)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011	Dec. 31, 2010	Feb. 10, 2011
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in Shares)	12,000,000		12,000,000				12,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Description					Options granted under the 2011 Plan to employees generally vest over a three-year period with 1/3 of the shares vesting after one year from the date of grant and 1/36 of the shares vesting monthly thereafter. Option awards to non-employee directors may vest fully upon grant or quarterly over one year. All option awards have a maximum term of ten years and exercise prices equal to the closing market price of the Company's common stock on the grant date.
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights						Options granted under the 2000 Plan generally became exercisable over periods ranging from one to three years, had a maximum term of ten years and exercise prices equal to the closing market price of the Company's common stock on the grant date. Effective November 6, 2010, additional option awards under the 2000 Plan were discontinued. The 2000 Plan will remain in effect as to outstanding options granted prior to November 6, 2010.
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period (in Shares)		35,000	1,200,000	170,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value (in Dollars per share)		$ 0.22	$ 0.23	$ 0.25
Share-based Compensation	$ 33,333	$ 67,821	$ 151,938	$ 118,949	$ 149,468
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Stock Options	213,515		213,515
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition			2 years 73 days
Closing Stock Price (in Dollars per share)	$ 0.40		$ 0.40
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant (in Shares)	10,393,000		10,393,000
Modifications of Terms of Options Held by Former Directors [Member]
Share-based Compensation		52,478
Fully Vested Options Granted to Executives [Member]
Share-based Compensation			$ 92,240

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Note 12 - Concentration of Risks (Tables)

6 Months Ended

Jun. 30, 2012

Schedule of Revenue by Major Customers by Reporting Segments [Table Text Block]

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Customer A		26	%		13	%		21	%		21	%
Customer B		33	%		29	%		43	%		32	%
Customer C		—			27	%		—			18	%
Customer D		26	%		27	%		20	%		23	%

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Note 2 - Financing Activities (Detail) (USD $)	0 Months Ended	2 Months Ended	3 Months Ended		6 Months Ended
	Mar. 09, 2012	Mar. 09, 2012	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Ownership Of Outstanding Common Stock By Owner	40.00%
Line of Credit Facility, Maximum Borrowing Capacity	$ 2,000,000	$ 2,000,000
Debt Instrument, Fee	Bank administrative fees for the letter of creditare expected to be 0.75% per year
Line of Credit Facility, Interest Rate Description	borrowings under this line of credit (LOC), if not immediately repaid by the collateral, will accrue interest at a rate of 4% per year
Line of Credit Facility, Covenant Terms	Pursuant to the LOC Agreement, the Company agreed to use commercially reasonable efforts to consummate an equity financing prior to the termination date of the LOC in which it would sell and issue shares of its common stock at a price per share of at least $0.60 for aggregate proceeds of at least $3.0 million, upon consummation of which all amounts outstanding under the LOC shall be immediately repaid.
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in Shares)	2,000,000	2,000,000
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per Item)	0.25	0.25
Adjustments to Additional Paid in Capital, Warrant Issued		464,870			464,870
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term				6 years
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate				2.14%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate				112.00%
Warrant Exercise Price Per Share (in Dollars per share)	$ 0.25
Amortization of Financing Costs			$ 50,123	$ 0	$ 62,240	$ 0
Warrant [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term	5 years
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate	0.90%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate	161.00%

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Note 2 - Financing Activities

6 Months Ended

Jun. 30, 2012

Additional Financial Information Disclosure [Text Block]

Note 2.  Financing Activities

On March 9, 2012, the Company entered into an LOC Agreement (the LOC Agreement) with Frank T. Nickell, who beneficially owned approximately 40% of the Company’s outstanding common stock, pursuant to which Mr. Nickell established an irrevocable standby letter of credit by JPMorgan Chase Bank, N.A. (JPMorgan) in the amount of $2.0 million on the Company’s behalf and deposited $2.0 million with JPMorgan as collateral. Bank administrative fees for the letter of credit are expected to be 0.75% per year and borrowings under this line of credit (LOC), if not immediately repaid by the collateral, will accrue interest at a rate of 4% per year. The LOC with JPMorgan will expire on July 1, 2013 but will automatically renew until July 1, 2014 unless terminated by JPMorgan at least 14 days prior to the end of the current term, at which time the Company may draw up to the balance remaining on the LOC. Pursuant to the LOC Agreement, the Company agreed to use commercially reasonable efforts to consummate an equity financing prior to the termination date of the LOC in which it would sell and issue shares of its common stock at a price per share of at least $0.60 for aggregate proceeds of at least $3.0 million, upon consummation of which all amounts outstanding under the LOC shall be immediately repaid.

In connection with the LOC Agreement, the Company issued to Mr. Nickell a five-year fully vested warrant to purchase 2,000,000 shares of the Company’s common stock at an exercise price of $0.25 per share and agreed to reimburse Mr. Nickell for his reasonable expenses in connection with the LOC, including any interest and bank fees. As of June 30, 2012, reimbursements to Mr. Nickell had not been significant.

As the warrant was issued to obtain a letter of credit rather than in connection with a debt issuance, the Company measured this warrant at fair value on the inception date and accounted for it as equity in accordance with Accounting Standard Codification (ASC) 505-50-25, Equity-Based Payments to Non-Employees. The issuance of this warrant was equivalent to the payment of a loan commitment or access fee, and, therefore, the offset was recorded as deferred debt issuance costs to be amortized on a straight-line basis over the term of the LOC.

The Company estimated the fair value of this warrant to be $464,870 on March 9, 2012, based on the Black-Scholes option pricing model using an exercise period of 5 years, risk-free rate of 0.90%, volatility of 161%, and a trading price of the underlying shares of $0.25. For the three and six months ended June 30, 2012, the Company recorded a total of $50,123 and $62,240, respectively, of amortization expense related to the establishment of the LOC.

As of June 30, 2012, the Company had no borrowings outstanding under the LOC.

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Note 3 - Fair Value of Financial Instruments (Detail) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011
Fair Value of Option to Purchase an Interest in Related Party	$ 1,145		$ 1,145		$ 12,362
Fair Value Assets Related Party Measured on Recurring Basis Gain Loss Included in Other Income	$ (4,597)	$ (25,151)	$ (11,217)	$ (17,436)

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Note 7 - Investment in Affiliated Company (Detail) - NuGlow’s condensed balance sheets (USD $)	Jun. 30, 2012	Dec. 31, 2011	Jun. 30, 2011	Dec. 31, 2010
Assets
Cash	$ 739,108	$ 1,688,945	$ 2,660,333	$ 4,044,309
Accounts receivable, net	219,141	239,773
Inventory	295,584	363,869
NuGlow [Member]
Assets
Cash	14,459	200
Accounts receivable, net	7,013	18,276
Inventory	178,539	275,838
Prepaid expenses and other current assets	15,770	9,513
Total assets	215,781	303,827
Liabilities and members’ equity
Accounts payable and current liabilities	261,456	280,867
Members’ equity and accumulated deficit	(45,675)	22,960
Total liabilities and members’ equity	$ 215,781	$ 303,827

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Condensed Balance Sheets (Unaudited) (USD $)	Jun. 30, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents	$ 739,108	$ 1,688,945
Accounts receivable, net	219,141	239,773
Accounts receivable, affiliated company, net	117,599	200,935
Inventory	295,584	363,869
Deferred debt issuance costs, current	201,040	0
Prepaid expenses and other assets	119,265	64,583
Total current assets	1,691,737	2,558,105
Property and equipment, net	14,825	26,098
Intangible assets, net	112,412	146,297
Deferred debt issuance costs, non-current	201,590	0
Other long term assets	9,667	20,884
Investment in affiliated company	202,665	223,255
Total assets	2,232,896	2,974,639
Current liabilities:
Accounts payable	110,957	125,324
Accrued compensation and benefits	56,445	87,859
Accrued expenses	47,831	55,463
Deferred revenue	13,602	0
Deferred gross profit, affiliated company	69,718	134,842
Deferred rent, current	8,341	7,155
Total current liabilities	306,894	410,643
Deferred rent, non-current	23,995	28,660
Total liabilities	330,889	439,303
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value, 25,000,000 shares authorized; no shares issued or outstanding	0	0
Common stock, $0.001 par value, 100,000,000 shares authorized; 49,720,255 shares outstanding at June 30, 2012 and December 31, 2011	49,721	49,721
Additional paid-in capital	49,159,261	48,542,453
Accumulated deficit	(47,306,975)	(46,056,838)
Total stockholders’ equity	1,902,007	2,535,336
Total liabilities and stockholders’ equity	$ 2,232,896	$ 2,974,639

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Note 10 - Stock-Based Compensation (Detail) - Stock option valuation assumptions using Black-Scholes option pricing model	3 Months Ended	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2012 Minimum [Member]	Jun. 30, 2011 Minimum [Member]	Jun. 30, 2012 Maximum [Member]	Jun. 30, 2011 Maximum [Member]
Risk-free interest rate	2.14%	0.87%	2.14%	1.14%	2.17%
Expected dividend yield	0.00%
Expected terms in years	6 years	5 years	5 years 6 months	6 years	6 years
Expected volatility	112.00%	147.00%	112.00%	157.00%	118.00%

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Condensed Statements of Cash Flows (Unaudited) (USD $)	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Cash flows from operating activities
Net loss	$ (1,250,137)	$ (1,334,609)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	45,158	54,764
Stock-based compensation expense	151,938	118,949
Amortization of debt issuance costs	62,240	0
Equity in loss of affiliated company	47,590	51,073
Change in fair value of option to purchase interest in affiliated company	11,217	17,436
Changes in assets and liabilities:
Accounts receivable, net	20,632	(131,199)
Accounts receivable, affiliated company, net	83,336	(104,558)
Inventory	68,285	(27,447)
Prepaid expenses and other current assets	(54,682)	(52,341)
Accounts payable	(14,367)	61,259
Accrued compensation and benefits	(31,414)	6,119
Other accrued expenses	(11,111)	(56,129)
Deferred gross profit	13,602
Deferred gross profit, affiliated company	(65,124)	36,031
Net cash used in operating activities	(922,837)	(1,360,652)
Cash flows from investing activities
Purchases of property and equipment		(2,669)
Website development		(20,655)
Investment in affiliated company	(27,000)
Net cash used in investing activities	(27,000)	(23,324)
Net decrease in cash and cash equivalents	(949,837)	(1,383,976)
Cash and cash equivalents at beginning of period	1,688,945	4,044,309
Cash and cash equivalents at end of period	$ 739,108	$ 2,660,333

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Note 5 - Property and Equipment (Detail) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Depreciation	$ 5,121	$ 11,205	$ 11,273	$ 20,879

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Note 4 - Inventory (Tables)

6 Months Ended

Jun. 30, 2012

Schedule of Inventory, Current [Table Text Block]

	June 30, 2012		December 31, 2011
Work in process	$	86,090	$	156,425
Finished goods		209,494		207,444
	$	295,584	$	363,869

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Note 5 - Property and Equipment (Detail) - Property and equipment (USD $)	Jun. 30, 2012	Dec. 31, 2011
Machinery and equipment	$ 520,950	$ 520,950
Website development costs	63,175	63,175
Furniture and fixtures	50,441	50,441
Leasehold improvements	43,993	43,993
	678,559	678,559
Less accumulated depreciation	(663,734)	(652,461)
Property and equipment, net	$ 14,825	$ 26,098

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Note 6 - Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2012

Schedule of Finite-Lived Intangible Assets [Table Text Block]

	June 30, 2012			December 31, 2011
Antimicrobial technology	$	222,187		$	222,187
Licensing agreements		61,391			61,391
Patents, pending and approved		834,301			834,301
Total intangible assets		1,117,879			1,117,879
Less accumulated amortization		(1,005,467	)		(971,582	)
Intangible assets, net	$	112,412		$	146,297

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Note 1 - Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2012

Significant Accounting Policies [Text Block]

Note 1.  Summary of Significant Accounting Policies

Basis of Presentation and Preparation

The accompanying unaudited condensed financial statements of Helix BioMedix, Inc. (the Company) have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial reporting and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in annual financial statements have been condensed or omitted for interim financial information in accordance with the SEC rules and regulations for quarterly reporting. These condensed financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2011, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 27, 2012.

Use of Estimates

The preparation of the Company’s financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the dates of the balance sheets and the reported amounts of revenue and expenses during the reporting periods. In the opinion of management, the accompanying unaudited condensed financial statements include all normal recurring accruals and adjustments necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the periods indicated and to ensure that the financial statements are not misleading. Significant items subject to such estimates and assumptions include, but are not limited to, revenue recognition, impairments of long-lived assets, and valuation of receivable allowances, inventories, deferred income tax assets, stock-based compensation and option to purchase interest in affiliated company. Actual results could differ from those estimates.

The results of operations for the three and six months ended June 30, 2012 are not necessarily indicative of the results of operations that may be achieved for the entire year ending December 31, 2012.

Recent Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2011-04 (ASU 2011-04), Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs to provide a uniform framework for fair value measurements and related disclosures between U.S. GAAP and International Financial Reporting Standards (“IFRS”). Additional disclosure requirements in the update include: (1) for Level 3 fair value measurements, quantitative information about unobservable inputs used, a description of the valuation processes used by the entity, and a qualitative discussion about the sensitivity of the measurements to changes in the unobservable inputs; (2) for an entity’s use of a nonfinancial asset that is different from the asset’s highest and best use, the reason for the difference; (3) for financial instruments not measured at fair value but for which disclosure of fair value is required, the fair value hierarchy level in which the fair value measurements were determined; and (4) the disclosure of all transfers between Level 1 and Level 2 of the fair value hierarchy. ASU 2011-04 requires prospective application for interim and annual periods beginning on or after December 15, 2011. The Company is currently evaluating the impact that ASU 2011-04 will have on its financial position and results of operations.

In June 2011, the FASB issued ASU No. 2011-05 (ASU 2011-05), Comprehensive Income (Topic 220): Presentation of Comprehensive Income. ASU No. 2011-05 amends existing guidance by allowing an entity the option to present the components of net income and other comprehensive income in either a single continuous statement of comprehensive income or in two separate but consecutive statements. This ASU eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. ASU No. 2011-05 requires retrospective application and is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, with early adoption permitted. As the adoption of this guidance concerns disclosures only, it does not have a material impact on the Company’s financial position or results of operations.

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Condensed Balance Sheets (Unaudited) (Parentheticals) (USD $)	Jun. 30, 2012	Dec. 31, 2011
Preferred stock par value (in Dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	25,000,000	25,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in Dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares outstanding	49,720,255	49,720,255

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Note 11 - Net Loss per Share

6 Months Ended

Jun. 30, 2012

Earnings Per Share [Text Block]

Note 11.  Net Loss per Share

Net loss per share has been computed by dividing net loss by the weighted-average number of shares outstanding during the period. Diluted per share amounts reflect potential dilution from the exercise or conversion of securities into common stock. The Company’s capital structure includes common stock options and common stock warrants, all of which have been excluded from net loss per share calculations as they are antidilutive, as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Weighted average outstanding options		4,069,207		3,908,305		3,887,366		3,905,988
Weighted average outstanding warrants		3,013,643		2,331,917		2,309,978		2,412,427

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Document And Entity Information	6 Months Ended
	Jun. 30, 2012	Jul. 30, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	HELIX BIOMEDIX INC
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		49,720,255
Amendment Flag	false
Entity Central Index Key	0000831749
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Document Period End Date	Jun. 30, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2

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Note 12 - Concentration of Risks

6 Months Ended

Jun. 30, 2012

Concentration Risk Disclosure [Text Block]

Note 12.  Concentration of Risks

The Company maintains a portion of its cash balance in one financial institution, which at times may exceed federally insured limits. As of June 30, 2012, the Company maintained approximately $435,000 at major financial institutions in money market accounts insured by the Federal Deposit Insurance Corporation up to $250,000 per account or the Securities Investor Protection Corporation up to $500,000 per account. To date, the Company has not experienced any losses in its money market account.

A significant portion of the Company’s revenue is derived from a concentrated number of customers. The following individual customers accounted for 10% or more of revenue for the three and six months ended June 30, 2012 and 2011:

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Customer A		26	%		13	%		21	%		21	%
Customer B		33	%		29	%		43	%		32	%
Customer C		—			27	%		—			18	%
Customer D		26	%		27	%		20	%		23	%

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Condensed Statements of Operations (Unaudited) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Revenue:
Licensing fees	$ 173,453	$ 164,975	$ 488,545	$ 336,400
Peptide and consumer product sales	175,794	340,349	428,521	475,281
Consumer product sales to affiliated company	121,275	187,779	233,878	239,050
Total revenue	470,522	693,103	1,150,944	1,050,731
Cost of revenue:
Cost of peptide and consumer product sales	109,363	247,698	267,136	338,995
Cost of consumer product sales to affiliated company	55,094	104,995	106,852	134,525
Total cost of revenue	164,457	352,693	373,988	473,520
Gross profit	306,065	340,410	776,956	577,211
Operating expenses:
Research and development	87,942	90,747	175,027	315,910
Marketing and business development	269,645	244,018	572,751	448,455
General and administrative	329,235	374,889	713,811	716,681
Accounting, legal and professional fees	181,201	144,196	400,423	309,633
Depreciation and amortization	22,063	28,147	45,158	54,764
Total operating expenses	890,086	881,997	1,907,170	1,845,443
Loss from operations	(584,021)	(541,587)	(1,130,214)	(1,268,232)
Other income (expense):
Interest income	384	928	1,124	2,132
Amortization of debt issuance costs	(50,123)	0	(62,240)	0
Equity in loss of affiliated company	(29,942)	(59,065)	(47,590)	(51,073)
Change in fair value of option to purchase interest in affiliated company	(4,597)	(25,151)	(11,217)	(17,436)
Total other income (expense), net	(84,278)	(83,288)	(119,923)	(66,377)
Net loss and comprehensive loss	$ (668,299)	$ (624,875)	$ (1,250,137)	$ (1,334,609)
Basic and diluted net loss per share (in Dollars per share)	$ (0.01)	$ (0.01)	$ (0.03)	$ (0.03)
Weighted average shares outstanding (in Shares)	49,720,255	49,720,255	49,720,255	49,720,255

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Note 6 - Intangible Assets

6 Months Ended

Jun. 30, 2012

Intangible Assets Disclosure [Text Block]

Note 6.  Intangible Assets

Identifiable intangible assets consisted of the following as of June 30, 2012 and December 31, 2011:

	June 30, 2012			December 31, 2011
Antimicrobial technology	$	222,187		$	222,187
Licensing agreements		61,391			61,391
Patents, pending and approved		834,301			834,301
Total intangible assets		1,117,879			1,117,879
Less accumulated amortization		(1,005,467	)		(971,582	)
Intangible assets, net	$	112,412		$	146,297

Amortization expense for intangible assets was $16,942 during each of the three months ended June 30, 2012 and 2011, and was $33,885 during each of the six months ended June 30, 2012 and 2011.

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Note 5 - Property and Equipment

6 Months Ended

Jun. 30, 2012

Property, Plant and Equipment Disclosure [Text Block]

Note 5  Property and Equipment

Property and equipment consisted of the following as of June 30, 2012 and December 31, 2011:

	June 30, 2012			December 31, 2011
Machinery and equipment	$	520,950		$	520,950
Website development costs		63,175			63,175
Furniture and fixtures		50,441			50,441
Leasehold improvements		43,993			43,993
		678,559			678,559
Less accumulated depreciation		(663,734	)		(652,461	)
Property and equipment, net	$	14,825		$	26,098

Aggregate depreciation expense for property and equipment during the three months ended June 30, 2012 and 2011 was $5,121 and $11,205, respectively, and was $11,273 and $20,879 during the six months ended June 30, 2012 and 2011, respectively.

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Note 5 - Property and Equipment (Tables)

6 Months Ended

Jun. 30, 2012

Schedule of Property, Plant and Equipment [Table Text Block]

	June 30, 2012			December 31, 2011
Machinery and equipment	$	520,950		$	520,950
Website development costs		63,175			63,175
Furniture and fixtures		50,441			50,441
Leasehold improvements		43,993			43,993
		678,559			678,559
Less accumulated depreciation		(663,734	)		(652,461	)
Property and equipment, net	$	14,825		$	26,098

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Note 13 - Liquidity and Capital Resources

6 Months Ended

Jun. 30, 2012

Liquidity And Capital Resources

Note 13.  Liquidity and Capital Resources

For the six months ended June 30, 2012, the Company incurred a net loss of $1,250,137. At June 30, 2012, the Company had $739,108 in cash and cash equivalents. For the six months ended June 30, 2012, cash used in operations was $922,837 and cash used in investing activities was $27,000 which reflected the additional investment in NuGlow.

Based on the current status of the Company’s operating and product commercialization development plans, the Company estimates that its existing cash and cash equivalents, together with the LOC with JPMorgan, will be sufficient to fund its operations, continue with work towards its prescription (Rx) product development and support the continued expansion of its consumer program through the remainder of 2012. The Company will need substantial additional capital in order to maintain the current level of operations, continue commercialization of its technology and advance its pharmaceutical programs beyond 2012. Accordingly, the Company will need to draw down on the LOC and/or raise additional funding, which may include debt and/or equity financing. However, there is no assurance that additional funding will be available on favorable terms, if at all. If the Company is unable to obtain the necessary additional funding, the Company may not be able to satisfy its existing obligations or may be required to severely reduce the scope of its operations, which would significantly impede its ability to proceed with current operational plans and could lead to the discontinuation of its business.

The amount of capital the Company will need in the future will depend on many factors, including the amount of revenue generated by the Company, capital expenditures and hiring plans to accommodate future growth, research and development plans, future demand for the Company’s products and technology, and general economic conditions.

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Note 9 - Deferred Gross Profit, Affiliated Company

6 Months Ended

Jun. 30, 2012

Deferred Revenue Related Party Disclosure [Text Block]

Note 9. Deferred Gross Profit, Affiliated Company

Deferred gross profit from an affiliated company consisted of the following as of June 30, 2012 and December 31, 2011:

	June 30, 2012		December 31, 2011
Deferred revenue, affiliated company	$	139,720	$	254,826
Deferred cost of revenue, affiliated company		70,002		119,984
Deferred gross profit, affiliated company	$	69,718	$	134,842

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Note 7 - Investment in Affiliated Company

6 Months Ended

Jun. 30, 2012

Equity Method Investments and Joint Ventures Disclosure [Text Block]

Note 7.  Investment in Affiliated Company

In July 2010, the Company obtained a 30% membership interest in NuGlow Cosmaceuticals, LLC (NuGlow), a direct-response company selling specialty skin care products, in exchange for an initial capital contribution of $350,000. Subsequently in September 2011, in connection with NuGlow’s additional capital raise, the Company contributed an additional $42,000 to maintain its 30% interest in NuGlow. In March 2012, the Company entered into a Second Amendment to the Amended and Restated Operating Agreement with NuGlow and consented to certain monthly payments by NuGlow. In exchange, the Company’s option to purchase the remaining interest of NuGlow (the Purchase Option) was extended from July 1, 2015 to July 1, 2017. In April 2012, in connection with NuGlow’s additional capital raise, the Company contributed an additional $27,000 to maintain its 30% interest in NuGlow and entered into a Third Amendment to the Amended and Restated Operating Agreement with NuGlow to amend the allocation and distribution of this additional capital contribution prior to other allocations or distributions thereunder.

The Company’s cumulative investment in NuGlow is accounted for as an equity investment and is adjusted at each reporting period to reflect the Company’s share of NuGlow’s net earnings, losses, contributions and any profit distributions. The Company accounts for the Purchase Option at fair value on the balance sheet with changes in value recognized in the statement of operations over the life the of the Purchase Option. Additionally, at each reporting period, the Company assesses its investment in NuGlow to determine whether any events or changes in circumstances have occurred to indicate impairment to this asset. The primary factors the Company considers in its determination are NuGlow’s financial condition and operating performance. The Company would recognize an impairment loss if there was a decline in value that was deemed other than temporary.

At December 31, 2011, the carrying value of the Company’s investment in NuGlow was $223,255. For the three and six months ended June 30, 2012, the Company recorded a loss $29,942 and $47,590, respectively, to account for its share of NuGlow’s net loss during these respective periods. The equity loss for the first six months of 2012, together with the additional investment made in April 2012, reduced the value of the Company’s investment in NuGlow to $202,665 as of June 30, 2012.

NuGlow’s condensed balance sheets at June 30, 2012 and December 31, 2011 and statements of operations for the three and six months ended June 30, 2012 and 2011 are as follows:

NuGlow’s Condensed Balance Sheets	June 30, 2012 (Unaudited)			December 31, 2011 (Unaudited)
Assets
Cash	$	14,459		$	200
Accounts receivable, net		7,013			18,276
Inventory		178,539			275,838
Prepaid expenses and other current assets		15,770			9,513
Total assets	$	215,781		$	303,827
Liabilities and members’ equity
Accounts payable and current liabilities	$	261,456		$	280,867
Members’ equity and accumulated deficit		(45,675	)		22,960
Total liabilities and members’ equity	$	215,781		$	303,827

	Three Months Ended June 30,						Six Months Ended June 30,
NuGlow’s Condensed Statements of Operations (Unaudited)	2012			2011			2012			2011
Revenue	$	251,741		$	311,164		$	485,112		$	491,884
Cost of goods sold		(129,923	)		(110,774	)		(228,150	)		(198,364	)
Operating expenses		(221,628	)		(397,273	)		(415,597	)		(463,762	)
Net loss	$	(99,810	)	$	(196,883	)	$	(158,635	)	$	(170,242	)

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Note 8 - Other Assets

6 Months Ended

Jun. 30, 2012

Other Assets Disclosure [Text Block]

Note 8.  Other Assets

Other assets consisted of the following as of June 30, 2012 and December 31, 2011:

	June 30, 2012		December 31, 2011
Deposits	$	8,522	$	8,522
Option to purchase interest in affiliated company		1,145		12,362
Other assets	$	9,667	$	20,884

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Note 10 - Stock-Based Compensation

6 Months Ended

Jun. 30, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Note 10.  Stock-Based Compensation

2011 Stock Option Plan

On February 10, 2011, the Company’s board of directors adopted, and on May 25, 2011, the Company’s stockholders approved, the Helix BioMedix, Inc. 2011 Stock Option Plan (the 2011 Plan). The 2011 Plan provides for the grant of incentive stock options to employees and non-statutory stock options to employees, non-employee directors and consultants. The 2011 Plan is administered by the board of directors, which has the authority to select the individuals to whom awards are to be granted, the number of awards granted, and the vesting schedule. A total of 12,000,000 shares of common stock are reserved for issuance under the 2011 Plan. Options granted under the 2011 Plan to employees generally vest over a three-year period with 1/3 of the shares vesting after one year from the date of grant and 1/36 of the shares vesting monthly thereafter. Option awards to non-employee directors may vest fully upon grant or quarterly over one year. All option awards have a maximum term of ten years and exercise prices equal to the closing market price of the Company’s common stock on the grant date.

2000 Stock Option Plan

In 2000, the Company’s stockholders approved the Helix BioMedix 2000 Stock Option Plan (the 2000 Plan). The 2000 Plan provided for the granting of incentive stock options and nonqualified stock options to employees, directors and consultants. Options granted under the 2000 Plan generally became exercisable over periods ranging from one to three years, had a maximum term of ten years and exercise prices equal to the closing market price of the Company’s common stock on the grant date. Effective November 6, 2010, additional option awards under the 2000 Plan were discontinued. The 2000 Plan will remain in effect as to outstanding options granted prior to November 6, 2010.

Stock Option Activities

During the three months ended June 30, 2012, the Company did not grant any options. For the three months ended June 30, 2011, the Company granted options under the 2011 Plan to purchase an aggregate of 35,000 shares of common stock with a grant date fair value of $0.22 per share. For the six months ended June 30, 2012 and 2011, the Company granted options under the 2011 Plan to purchase an aggregate of 1,200,000 and 170,000 shares of common stock, respectively, with a grant date fair value of $0.23 and $0.25 per share, respectively. Fair value for options granted were calculated using the Black-Scholes option pricing model with the following assumptions:

	Three Months Ended June 30,				Six months Ended June 30,
	2012		2011		2012			2011
Risk-free interest rate		—		2.14%	0.87%	–	1.14%	2.14%	–	2.17%
Expected dividend yield		—		0		0			0
Expected terms in years		—		6.0	5.0	–	6.0	5.5	–	6.0
Expected volatility		—		112%	147%	–	157%	112%	–	118%

The risk-free rate is based on the implied yield available on U.S. Treasury zero–coupon issues with a remaining term equal to the expected term of options issued. The Company does not anticipate declaring dividends in the foreseeable future. For the three and six months ended June 30, 2012 and 2011, the Company calculated expected volatility based on the annualized daily historical volatility of the Company’s stock price commensurate with the expected term of the option and other factors, including peer company data. The Company estimates the expected term as the average of the vesting period and the contractual term. The Company will continue to use this method of estimation until it has sufficient historical data to provide reasonable estimates of expected lives of stock options. The Company’s stock price volatility and option term involves management’s best estimates at that time, both of which impact the fair value of the option calculated under the Black-Scholes pricing model and, ultimately, the expense that will be recognized over the life of the option. The Company recognizes compensation expense for only the portion of options that is expected to vest. Therefore, the Company applies an estimated forfeiture rate that is derived from historical employee termination behavior. Forfeiture rates are revised in subsequent periods if actual forfeitures differ from those estimates.

Stock-based compensation expense was $33,333 and $67,821 for the three months ended June 30, 2012 and 2011, respectively. For the three months ended June 30, 2011, general and administrative expenses included $52,478 of stock compensation expense related to the modification of options held by three members of the board of directors who were not reelected in May 2011. Stock-based compensation expense for the six months ended June 30, 2012 and 2011 was $151,938 and $118,949, respectively. For the six months ended June 30, 2012, stock-based compensation included $92,240 of expenses related to fully vested options granted to the Company’s executives in February 2012. As of June 30, 2012, total unrecognized stock-based compensation related to non-vested stock options was approximately $213,515, which is expected to be recognized over a weighted-average period of approximately 2.2 years.

A summary of the Company’s stock compensation expense for the three and six months ended June 30, 2012 and 2011 is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Research and development	$	4,123	$	382	$	8,247	$	38,484
Marketing and business development		7,003		4,380		58,629		8,769
General and administrative		22,207		63,059		85,062		71,696
Total stock-based compensation	$	33,333	$	67,821	$	151,938	$	118,949

A summary of the Company’s stock option activity for the six months ended June 30, 2012 is presented in the following table:

	Shares Subject to Options			Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding, December 31, 2011		3,264,207		$	0.65
Granted		1,200,000		$	0.25
Exercised		—			—
Forfeited		—			—
Expired		(395,000	)	$	0.87
Outstanding, June 30, 2012		4,069,207		$	0.51		5.91	$	274,644
Exercisable, June 30, 2012		3,009,677		$	0.60		4.68	$	128,033

The aggregate intrinsic value in the table above is based on the Company’s closing stock price of $0.40 on June 30, 2012. The intrinsic value is calculated as the difference between the closing stock price and the exercise price of the stock options as of June 30, 2012, had all of the options with exercise prices less than $0.40 been exercised on that date.

As of June 30, 2012, there were 12,000,000 shares of common stock reserved for issuance pursuant to the 2011 Plan, of which 10,393,000 shares remained available for future grants. Additional information regarding options outstanding as of June 30, 2012, is as follows:

			Options Outstanding						Options Exercisable
Range of Exercise Prices			Shares		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Shares		Weighted Average Exercise Price
$0.15	–	$0.37		2,223,957		8.24	$	0.28		1,164,427	$	0.29
$0.40	–	$0.57		795,000		4.29	$	0.49		795,000	$	0.49
$0.70	–	$1.00		869,000		2.18	$	0.90		869,000	$	0.90
$1.20	–	$1.80		181,250		2.28	$	1.56		181,250	$	1.56
$0.15	–	$1.80		4,069,207		5.91	$	0.51		3,009,677	$	0.60

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Note 4 - Inventory (Detail) - Inventory (USD $)	Jun. 30, 2012	Dec. 31, 2011
Work in process	$ 86,090	$ 156,425
Finished goods	209,494	207,444
	$ 295,584	$ 363,869

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Note 12 - Concentration of Risks (Detail) - Major customers	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Customer A [Member]
Customer	26.00%	13.00%	21.00%	21.00%
Customer B [Member]
Customer	33.00%	29.00%	43.00%	32.00%
Customer C [Member]
Customer		27.00%		18.00%
Customer D [Member]
Customer	26.00%	27.00%	20.00%	23.00%

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Note 3 - Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2012

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

	June 30, 2012		Quoted Prices in Active Market for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Money market funds	$	435,225	$	435,225	$	—	$	—
Option to purchase interest in affiliated company	$	1,145	$	—	$	—	$	1,145

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Note 8 - Other Assets (Tables)

6 Months Ended

Jun. 30, 2012

Schedule of Other Assets, Noncurrent [Table Text Block]

	June 30, 2012		December 31, 2011
Deposits	$	8,522	$	8,522
Option to purchase interest in affiliated company		1,145		12,362
Other assets	$	9,667	$	20,884

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Note 11 - Net Loss per Share (Detail) - Antidilutive securities excluded from net loss per share calculations	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Stock Options [Member]
Weighted average outstanding	4,069,207	3,908,305	3,887,366	3,905,988
Warrant [Member]
Weighted average outstanding	3,013,643	2,331,917	2,309,978	2,412,427

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Note 7 - Investment in Affiliated Company (Detail) - NuGlow’s condensed statements of operations (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Revenue	$ 251,741	$ 311,164	$ 485,112	$ 491,884
Cost of goods sold	(129,923)	(110,774)	(228,150)	(198,364)
Operating expenses	(890,086)	(881,997)	(1,907,170)	(1,845,443)
NuGlow [Member]
Operating expenses	(221,628)	(397,273)	(415,597)	(463,762)
Net loss	$ (99,810)	$ (196,883)	$ (158,635)	$ (170,242)

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Condensed Statements of Stockholders' Equity (Unaudited) (USD $)	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Balance at Dec. 31, 2010	$ 49,721	$ 48,392,985	$ (43,568,262)	$ 4,874,444
Balance (in Shares) at Dec. 31, 2010	49,720,255
Stock-based compensation		149,468		149,468
Net loss			(2,488,576)	(2,488,576)
Balance at Dec. 31, 2011	49,721	48,542,453	(46,056,838)	2,535,336
Balance (in Shares) at Dec. 31, 2011	49,720,255			49,720,255
Stock-based compensation		151,938		151,938
Fair value of warrants issued in connection with letter of credit		464,870		464,870
Net loss			(1,250,137)	(1,250,137)
Balance at Jun. 30, 2012	$ 49,721	$ 49,159,261	$ (47,306,975)	$ 1,902,007
Balance (in Shares) at Jun. 30, 2012	49,720,255			49,720,255

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Note 4 - Inventory

6 Months Ended

Jun. 30, 2012

Inventory Disclosure [Text Block]

Note 4. Inventory

Inventory consisted of the following as of June 30, 2012 and December 31, 2011:

	June 30, 2012		December 31, 2011
Work in process	$	86,090	$	156,425
Finished goods		209,494		207,444
	$	295,584	$	363,869

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Note 9 - Deferred Gross Profit, Affiliated Company (Tables)

6 Months Ended

Jun. 30, 2012

Schedule of Related Party Transactions [Table Text Block]

	June 30, 2012		December 31, 2011
Deferred revenue, affiliated company	$	139,720	$	254,826
Deferred cost of revenue, affiliated company		70,002		119,984
Deferred gross profit, affiliated company	$	69,718	$	134,842

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Note 6 - Intangible Assets (Detail) - Identifiable intangible assets (USD $)	Jun. 30, 2012	Dec. 31, 2011
Finite-lived intangible assets, gross	$ 1,117,879	$ 1,117,879
Less accumulated amortization	(1,005,467)	(971,582)
Intangible assets, net	112,412	146,297
Antimicrobial Technology [Member]
Finite-lived intangible assets, gross	222,187	222,187
Licensing Agreements [Member]
Finite-lived intangible assets, gross	61,391	61,391
Patents [Member]
Finite-lived intangible assets, gross	$ 834,301	$ 834,301

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Accounting Policies, by Policy (Policies)	6 Months Ended
	Jun. 30, 2012
Basis of Accounting, Policy [Policy Text Block]	Basis of Presentation and Preparation The accompanying unaudited condensed financial statements of Helix BioMedix, Inc. (the Company) have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial reporting and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in annual financial statements have been condensed or omitted for interim financial information in accordance with the SEC rules and regulations for quarterly reporting. These condensed financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended December31, 2011, included in the Company's Annual Report on Form 10-K filed with the SEC on March27, 2012.
Use of Estimates, Policy [Policy Text Block]	Use of Estimates The preparation of the Company's financial statements in conformity with U.S. GAAP requires the Company's management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the dates of the balance sheets and the reported amounts of revenue and expenses during the reporting periods. In the opinion of management, the accompanying unaudited condensed financial statements include all normal recurring accruals and adjustments necessary for a fair presentation of the Company's financial position, results of operations and cash flows for the periods indicated and to ensure that the financial statements are not misleading. Significant items subject to such estimates and assumptions include, but are not limited to, revenue recognition, impairments of long-lived assets, and valuation of receivable allowances, inventories, deferred income tax assets, stock-based compensation and option to purchase interest in affiliated company. Actual results could differ from those estimates. The results of operations for the three and six months ended June 30, 2012 are not necessarily indicative of the results of operations that may be achieved for the entire year ending December31, 2012.
New Accounting Pronouncements, Policy [Policy Text Block]	Recent Accounting Pronouncements In May 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2011-04 (ASU 2011-04), Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs to provide a uniform framework for fair value measurements and related disclosures between U.S. GAAP and International Financial Reporting Standards ("IFRS"). Additional disclosure requirements in the update include: (1)for Level 3 fair value measurements, quantitative information about unobservable inputs used, a description of the valuation processes used by the entity, and a qualitative discussion about the sensitivity of the measurements to changes in the unobservable inputs; (2)for an entity's use of a nonfinancial asset that is different from the asset's highest and best use, the reason for the difference; (3)for financial instruments not measured at fair value but for which disclosure of fair value is required, the fair value hierarchy level in which the fair value measurements were determined; and (4)the disclosure of all transfers between Level 1 and Level 2 of the fair value hierarchy. ASU 2011-04 requires prospective application for interim and annual periods beginning on or after December15, 2011. The Company is currently evaluating the impact that ASU 2011-04 will have onits financial position and results of operations. In June2011, the FASB issued ASU No.2011-05 (ASU 2011-05), Comprehensive Income (Topic 220): Presentation of Comprehensive Income. ASU No.2011-05 amends existing guidance by allowing an entity the option to present the components of net income and other comprehensive income in either a single continuous statement of comprehensive income or in two separate but consecutive statements. This ASU eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders' equity. ASU No.2011-05 requires retrospective application and is effective for fiscal years, and interim periods within those years, beginning after December15, 2011, with early adoption permitted. As the adoption of this guidance concerns disclosures only, it does not have a material impact on the Company's financial position or results of operations.