SECURITIES AND EXCHANGE COMMISSION


WASHINGTON, DC 20549





FORM 10-Q/A





x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE


SECURITIES EXCHANGE ACT OF 1934





For the quarterly period ended September 30, 2010





oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE


EXCHANGE ACT





Commission File Number: 000-26607





GENMED HOLDING CORP.




Exact name of registrant as specified in its charter





NEVADA
88-0390828(State or other jurisdiction of
I.R.S. Employerincorporation or organization)
Identification No.





Rontgenlaan 27, 2719 DX


Zoetermeer, The Netherlands




(Address of principal executive offices)





011-31-793-630-129




Registrant's telephone number, including area code





N/A


___________________________________________________


(Former name, former address and former fiscal year, if changed since last report)





Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the 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 Yesx  No o





Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.





Large accelerated filer o                                                                                                   Accelerated filer o


Non-accelerated filer o (Do not check if a smaller reporting company)    Smaller reporting company x





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





APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY


PROCEEDINGS DURING THE PRECEDING FIVE YEARS





Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes o No o





APPLICABLE ONLY TO CORPORATE ISSUERS





Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 164,977,533 shares of common stock as of November 22, 2010.


1





GENMED HOLDING CORP.





INDEX





PART I: FINANCIAL INFORMATION








ITEM 1. FINANCIAL STATEMENTS


GENMED HOLDING CORP.
 FINANCIAL STATEMENTS
 
 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009 (UNAUDITED)
 
 
 2
 
 
 CONTENTS
 ______________________________________________________________________________________
 
 Consolidated Balance Sheets as of September 30, 2010 (Unaudited) and December 31, 2009
Page   4
 
 Consolidated Statements of Operations for the three months and nine months ended September 30, 2010 and 2009 (Unaudited)
5
 
 Consolidated Statements of Cash Flows for the nine months ended September 30, 2010 and 2009 (Unaudited)
6
 Notes to Consolidated Financial Statements for the nine months ended September 30, 2010 (Unaudited)
7


3





GENMED HOLDING CORP. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETSSeptember 30,


December 31,2010


2009(Unaudited)ASSETSCURRENT ASSETSCash

$
733,536


$
-Accounts receivable


21,134



81,864VAT receivable


10,189



6,454Total Current Assets


764,859



88,318EQUIPMENT, net of accumulated depreciation of $8,156 and $5,832


9,336



12,587MEDICAL REGISTRATION RIGHTS, net of accumulated amortizationof $2,739,654 and $2,197,061


5,607,407



6,150,000Total Assets

$
6,381,602


$
6,250,905LIABILITIES AND STOCKHOLDERS' EQUITYCURRENT LIABILITIESBank overdraft

$
-


$
493Accounts payable


178,575



266,680Accrued salaries and related expenses


147,014



357,539Accrued expenses


164,102



513,880Subordinated notes


969,912Convertible debentures


-



1,146,557Discount on convertible debentures


-



(342,029
)Notes Payable


512,198



-Loans payable to related parties


172,736



204,690Total Current Liabilities


2,144,537



2,147,810STOCKHOLDERS' EQUITYClass A Convertible Preferred Stock, par value $0.001; authorized500,000,000 shares; no shares issued and outstanding atSeptember 30, 2010 and December 31, 2009, respectively.


-



-Common stock, par value $0.001; authorized 500,000,000 shares;issued and outstanding- 162,777,533 and 123,211,739 shares atSeptember 30, 2010 and December 31, 2009, respectively


162,776



123,212Additional paid-in capital


68,964,054



66,240,744Accumulated deficit


(64,916,816
)


(62,266,626
)Accumulated other comprehensive income


27,051



5,765Total Stockholders' Equity


4,237,065



4,103,095Total Liabilities and Stockholders'  Equity

$
6,381,602


$
6,250,905See accompanying notes to consolidated financial statements.





4








GENMED HOLDING CORP. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)For theThree Months Ended


For the Nine Months EndedSeptember 30,


September 30,2010


2009


2010


2009NET SALES

$
4,145


$
1,181


$
4,648


$
50,956COST AND EXPENSES:Selling, general and administrative


269,453



153,855



739,975



633,671Depreciation and amortization


181,719



368,925



545,179



1,094,627Research & development


15,055



31,580



58,266



72,267Total Costs and Expenses


466,227



554,360



1,343,420



1,800,565NET OPERATING LOSS


(462,082
)


(553,179
)


(1,338,772
)


(1,749,609
)OTHER INCOME (EXPENSE)Gain on cancellation of consulting agreement


-



-



-



285,000Loss on foreign exchange


55,054



7,833



12,760



(4,394
)Interest expense


(978,338
)


(136,519
)


(1,324,178
)


(169,696
)Total Other Income (Expense)


(923,284
)


(128,686
)


(1,311,418
)


110,910NET LOSS

$
(1,385,366
)

$
(681,865
)

$
(2,650,190
)

$
(1,638,699
)OTHER COMPREHENSIVE INCOME (LOSS)Foreign currency transaction


(66,584
)


3,409



21,286



(14,285
)COMPREHENSIVE LOSS

$
(1,451,950
)

$
(678,456
)

$
(2,628,904
)

$
(1,652,984
)NET LOSS PER COMMON SHARE(BASIC AND DILUTED)

$
(0.01
)

$
(0.01
)

$
(0.02
)

$
(0.01
)WEIGHTED AVERAGE COMMONSHARES OUTSTANDING


161,821,489



123,211,739



149,302,895



124,094,092See accompanying notes to consolidated financial statements.
  5


GENMED HOLDING CORP. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)For the nine months endedSeptember 30,2010


2009CASH FLOWS FROM OPERATING ACTIVITIESNet loss

$
(2,650,190
)

$
(1,638,699
)Adjustments to reconcile net loss to cash flows used in operating activities:Depreciation and amortization


545,179



1,094,627Stock based compensation


-



102,000Amortization of beneficial conversion feature


1,303,941



115,625Changes in operating assets and liabilities:Accounts receivable


60,730



(29,184
)VAT receivable


(3,735
)


3,518Accounts payable


(88,105
)


26,217Accrued salaries and related expenses


(159,130
)


16,147Accrued expenses


560,929



(114,669
)Net Cash Used in Operating Activities


(430,381
)


(424,418
)CASH FLOWS FROM INVESTING ACTIVITIESPurchase of equipment


-



-Net Cash Used in Investing Activities


-



-CASH FLOWS FROM FINANCING ACTIVITIESBank overdraft


(493
)


-Proceeds from notes payable


512,198



-Proceeds from sale of common stock


603,010



-Advances from notes payable to related parties


17,412



445,802Net Cash Provided by Investing Activities


1,132,127



445,802EFFECT OF EXCHANGE RATE


31,790



(14,669
)INCREASE IN CASH


733,536



6,715CASH, BEGINNING OF PERIOD


-



1,764CASH, END OF PERIOD

$
733,536


$
8,479SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATIONCash paid for interest

$
-


$
-Cash paid for taxes


-



-Non cash activities:Conversion of convertible debenture into common stock


1,197,952



-Conversion of accrued expenses and loans to subordinated notes


969,912



-Conversion of related party debt to convertible debenture


-



925,000Beneficial conversion feature on convertible debenture


-



462,500Cancellation of common stock


-



2,400See accompanying notes to consolidated financial statements.
  6
 GENMED HOLDING CORP. AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 SEPTEMBER 30, 2010
 
 NOTE 1 – BASIS OF PRESENTATION
 
 The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary in order to make the financial statements not misleading have been included.  Results for the three and nine months ended September 30, 2010 are not necessarily indicative of the results that may be expected for the year ending December 31, 2010.  For further information, refer to the financial statements and footnotes thereto included in the Genmed Holding Corp. and Subsidiaries annual report on Form 10-K for the year ended December 31, 2009.
 
 
 NOTE 2 – GOING CONCERN
 
 As shown in the accompanying financial statements, the Company has incurred an accumulated deficit of $64,916,816 and has negative working capital of $1,379,678.  Management's plans include the raising of capital through the equity markets to fund future operations and the generating of revenue through its business. Failure to raise adequate capital and generate adequate sales revenues could result in the Company having to curtail or cease operations.  Additionally, even if the Company does raise sufficient capital to support its operating expenses and generate adequate revenues, there can be no assurance that the revenue will be sufficient to enable it to develop business to a level where it will generate profits and cash flows from operations.  These matters raise substantial doubt about the Company's ability to continue as a going concern.  However, the accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.  These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.
 
 
 NOTE 3 – GENERAL RELEASE AND SETTLEMENT AGREEMENT
 
 On April 17, 2008, the Company entered into a General Release and Settlement Agreement (the "General Release Agreement") with Total Look, B.V. (“Total Look”), London Finance Group, Ltd., a California corporation (“LFG”), Dojo Enterprises, LLC, a Nevada limited liability company (“Dojo”), Hyperion Fund, L.P., a Colorado limited partnership (“Hyperion”), The Palisades Capital, LLC 401(k) Profit Sharing Trust (“Palisades”), The Morpheus 2005 Trust dated December 1, 2005 (“Morpheus”), Burton Partners, LLC (“Burton”), Picasso, LLC (“Picasso”) and Glacier, LLC (“Glacier,” and, together with Total Look, LFG, Dojo, Hyperion, Palisades, Morpheus, Burton and Picasso, the “Preferred Shareholders”) to settle all accounts and disputes between the parties and to avoid the expense and delay of litigation.
 
 Pursuant to the General Release Agreement, the Company issued 39,000,000 warrants to the Preferred Shareholders, which were subsequently cancelled, to purchase shares of common stock of the Company.
 
 The Preferred Shareholders collectively owned 2,179,533 shares of Class A Convertible Preferred Stock of the Company, which equaled to 100% of the outstanding preferred shares of stock of the Company. Pursuant to the General Release Agreement, all of the outstanding preferred shares of the Company were cancelled upon the issue of the common stock to the Preferred Shareholders.
 
 Subsequent to December 31, 2008, on or around April 11, 2009, the Preferred Shareholders entered into a Release and Settlement Agreement in which the parties agreed to the cancellation of all the warrants and to the cancellation and re-issuing of certain shares of Common Stock that were issued pursuant to the General Release and Settlement Agreement of April 17, 2008.
 
 
 7
 GENMED HOLDING CORP. AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 SEPTEMBER 30, 2010
 
 
 
 NOTE 3 – GENERAL RELEASE AND SETTLEMENT AGREEMENT (Continued)
 
 Pursuant to the Release and Settlement Agreement of April 11, 2009, such shares of common stock of the Company were issued as follows:
 
 Shareholder
Common StockTotal Look B.V.
62,678,826  sharesDojo Enterprises, Ltd.
1,120,107  sharesHyperion Fund, L.P.
1,760,428  sharesDiane Breitman, as Trustee of The Morpheus 2005 Trust
2,720,000  sharesBurton Partners, LLC
2,240,213  sharesPicasso, LLC
2,240,213  sharesGlacier, LLC
2,240,213  sharesTOTAL
75,000,000  shares
 
 
 NOTE 4- STOCK EXCHANGE AGREEMENT
 
 On April 17, 2008, Genmed Holding Corp. ("Genmed," or the “Company”) entered into a Stock Exchange Agreement (the "Stock Exchange Agreement") with Joost de Metz (“de Metz”), Willem Blijleven (“Blijleven”), Erwin R. Bouwens (“Bouwens”) and Medical Network Holding BV (“MNH,” and collectively with de Metz, Blijlevens and Bouwens, the “Shareholders”). The Shareholders were holders of 100% of the outstanding capital stock of Genmed BV (“GMBV”), a company organized in The Netherlands.
 
 Pursuant to the Stock Exchange Agreement, Genmed agreed to purchase from the Shareholders 18,000 restricted shares of the registered and outstanding capital stock of GMBV (the “GMBV Shares”), representing 100% of its outstanding capital stock, for a purchase price equal to 48,000,000 shares of restricted common stock of Genmed and the issuance of 24,000,000 warrants at $0.10 per share.
 
 Subsequent to December 31, 2008, on or around April 11, 2009, the ‘Shareholders’ entered into a Release and Settlement Agreement in which the parties agreed to the cancellation of all the warrants that were issued pursuant to the Stock Exchange Agreement of April 17, 2008.
 
 The fair value of the assets acquired were as follows:
 
 Cash

$
4,993Receivables


17,513Fair Value of Medical Registration Rights


14,600,000Liabilities Assumed


(6,153
)14,616,353Fair value of 48,000,000 shares @ $0.51 per share and24,000,000 warrants valued at 9,881,923


34,361,923Impairment of Goodwill

$
19,745,570
 
 The Medical Registration Rights represent a distribution agreement with Atabay Group to distribute generic drugs in various European Union and other countries outside the European Union as well as the registration rights to Paracetamol (acetaminophen), a generic form of Tylenol, in the European Union.  These rights are being amortized over their estimated useful life of 10 years.  Amortization expenses for the year ended December 31, 2009 was $1,460,000.  Estimated future amortization for the next five years is as follows:
 
 2010

$
745,0002011


745,0002012


745,0002013


745,0002014


745,000
 
 8
 GENMED HOLDING CORP. AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 SEPTEMBER 30, 2010
 
 NOTE 4 – STOCK EXCHANGE AGREEMENT (Continued)
 
 Subsequent to the acquisition of Genmed BV, the Company tested the business unit for impairment.  As a result, the Company determined that the Goodwill was impaired and wrote off the entire balance of $19,745,570.
 
 
 NOTE 5- IMPAIRMENT OF MEDICAL REGISTRATION RIGHTS
 
 The Company reviewed its medical registration rights for impairment on December 31, 2009.  The Company determined that its’ inability to obtain authorization to market drugs under the Atabay agreement, its’ inability to generate the revenues originally anticipated, and the difficulty in raising the funds to market the rights indicated that the carrying amount of the medical registration rights may not be recoverable.  The Company valued the medical registration rights on December 31, 2009 using the income approach.  In valuing the medical registration rights, the Company considered the projected sales for Paracetamol in the approved markets in the European Union.  The Company determined that the value of the medical registration rights on December 31, 2009 was $6,150,000.  As such, an impairment loss of $6,252,359 was recognized.
 
 
 NOTE 6- CONSULTING AGREEMENTS
 
 Subsequent to December 31, 2008, on or around April 11, 2009, the Company and London Finance Group entered into a Release and Settlement Agreement in which the parties agreed to rescind the Consultancy Agreement entered into by the Company and the London Finance Group on April 17, 2008 and to cancel the shares and warrants that were issued pursuant to the Consulting Agreement as well as to waive all monies owed by the Company to the London Finance Group as part of the same Consulting Agreement.  As part of this agreement, the Company recognized $285,000 as a Gain on the cancellation of the amounts due under the consulting agreements.
 
 
 NOTE 7 – NOTES PAYABLE TO RELATED PARTIES
 
 On June 30, 2009, the Company and two note holders agreed upon the consolidation of their notes, including the unpaid interest, and to issue a new 100% Premium Secured Convertible Promissory Note. The new note is issued for the amount of $925,000, bears an annual interest rate of 8% and is convertible into shares of the Company’s Common Stock at a share price of $0.04 per share.   The Secured Promissory Note is due on June 30, 2010.  A beneficial conversion feature of $462,500 was recognized as part of this conversion and is being amortized over the year of the Secured Promissory Note.  As such, the beneficial conversion feature of $462,500 is included as a discount to the convertible debenture at June 30, 2009.
 
 On December 31, 2009, the Company and Mr. Bouwens, the CEO of the Company, agreed upon the conversion of his note, including the unpaid interest, and to issue a new 100% Premium Secured Convertible Promissory Note. The new note is issued for the amount of $221,557, bears an annual interest rate of 8% and is convertible into shares of the Company’s Common Stock at a share price of $0.04 per share.   The Secured Promissory Note is due on December 31, 2010.  A beneficial conversion feature of $110,779 was recognized as part of this conversion and is being amortized over the year of the Secured Promissory Note.
 
 On March 3, 2010, the holders of the Convertible notes converted their notes including the unpaid interest into shares of the Company’s Common Stock. As such, the Company issued 29,948,794 of new shares of Common Stock of the Company.
 
 Besides the funds that The Company has received from the convertible note holders, the Company has received other advances from individuals related to the Company at various times for working capital and to fund required operating expenses. These advances are unsecured and bear interest at the rate of 8% per year. The amount outstanding at September 30, 2010 and December 31, 2009 aggregate $172,736 and $204,690 respectively.
 
 In August 2010, the Company has requested the related note holders and its officers to subordinate the loans and unpaid interest as well as unpaid fees and salaries receivable from the Company to all bonds that have been issued and will be issued for the term of such bonds. At August 25, 2010, the Company and the related note
 
 9
 GENMED HOLDING CORP. AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 SEPTEMBER 30, 2010
 NOTE 7 – NOTES PAYABLE TO RELATED PARTIES
 
 
 holders as well as the officers of the Company entered into various subordination agreements, subordinating a total amount of approximately $960,000. The new notes bear an annual interest of 7.8%, payable each calendar quarter and include an option to convert the subordinated amounts into shares of Common Stock of the Company at a fixed conversion price of $0.04 per share.  A beneficial conversion feature of approximately $960,000 was recognized as part of this conversion and was amortized as interest expense at the issuance date as the notes are convertible immediately.
 
 
 NOTE 8 – NOTES PAYABLE
 
 In June 2010, as part of the implementation of its business plan, the Company issued €380,000 ($512,198) in bonds. The bonds have a term of 48 months and bearing an annual interest rate of 7.4%. The Bonds are recallable, after 10, 22 or 34 months, with a notice of two months and a penalty of 10% of the value of the bond, up to a yearly maximum of 5% of the total funds received through the issuances of such bonds. Buyback requests will be handled in order of entries.
 
 
 NOTE 9 – STOCK ISSUANCES
 
 On May 19, 2010, in exchange for $14,880 (€12,000) in cash, the Company issued 297,600 shares of its common stock at $0.05 per share to a non-related individual.
 
 On June 8, 2010, in exchange for $5,970 (€5,000) in cash, the Company issued 119,400 shares of its common stock at $0.05 per share to a non-related individual.
 
 On July 8, 2010, in exchange for $378,090 (€300,000) in cash, the Company issued 6,000,000 shares of its common stock at $0.06 (€0.05) per share to a non-related individual.
 
 On July 11, 2010, in exchange for $12,645 (€10,000) in cash, the Company issued 200,000 shares of its common stock at $0.06 (€0.05) per share to a non-related individual.
 
 On July 15, 2010, in exchange for $127,260 (€100,000) in cash, the Company issued 2,000,000 shares of its common stock at $0.06 (€0.05) per share to a non-related individual.
 
 On July 16, 2010, in exchange for $64,165 (€50,000) in cash, the Company issued 1,000,000 shares of its common stock at $0.06 (€0.05) per share to a non-related individual.
 
 
 NOTE 10 – LITIGATION
 
 The Company has been named as a defendant in a lawsuit filed in the Circuit Court of the 11th Judicial Circuit in Miami-Dade County, Florida, Case No. 08-79227CA25. The Company’s former Chief Executive Officer, Jerri Palmer, has instigated the lawsuit against the Company alleging Breach of Contract and Unjust Enrichment.  Ms. Palmer is claiming damages in excess of $15,000. Ms. Palmer was the Company’s Chief Executive Officer from December 5, 2005, until her resignation on May 19, 2006.  The Company has alleged counter claims against Ms. Palmer for breach of contract and breach of fiduciary duty.
 
 In March 2010, the Company and Ms. Palmer settled the lawsuit for $40,000.  The Company accrued this settlement in the financial statements at December 31, 2009.
 
 On July 20, 2010, since the Company was not able to pay this amount, Ms. Palmer entered into a final judgment against the Company for $40,000 bearing an annual interest rate at 6%. In July the Company and Ms. Palmer agreed upon a payment plan for 6 installments payable at the end of each month. As per October 31, 2010, the Company has made four installments of $7,000 each.
 
 
 10
 GENMED HOLDING CORP. AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 SEPTEMBER 30, 2010
 
 
 NOTE 11 – SUBSEQUENT EVENT
 
 In October of 2010, the Company issued a total of 2,200,000 shares of common stock at $0.07 (€0.05) per share to two investors for total proceeds of $153,159 (€110,000). From October 1st through November 19, 2010, the Company issued €305,000 ($414,745) in interest bearing bonds.


11





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





Forward-looking Information





This Form 10-Q quarterly report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical facts, included in this Form 10-Q that address activities, events, or developments that we expect or anticipate will or may occur in the future, including such things as future capital expenditures (including the amount and nature thereof), business strategy and measures to implement strategy, competitive strength, goals, expansion and growth of our business and operations, plans, references to future success, reference to intentions as to future matters, and other such matters are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," or "continue," or the negative of such terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially. These statements are based up on certain assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments as well as other factors that we believe are appropriate in the circumstances. However, whether actual results and developments will conform to our expectations and predictions is subject to a number of risks, uncertainties, and other factors, many of which are beyond our control.





Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Moreover, we do not assume responsibility for the accuracy and completeness of such forward-looking statements. We are under no duty to update any of the forward-looking statements after the date of this report to conform such statements to actual results.





General





The following discussion and analysis summarizes the results of operations of Genmed Holding Corp. ("Genmed," the "Company," or "we"), formerly called Satellite Newspapers Corp., for the nine-month period ended September 30, 2010.





During the nine-month period ended September 30, 2010, the Company successfully obtained the sales license for its first generic product within seven countries of the European Union. The Company continued developing its business, and has now entered into negotiations with distributors in four countries within the EU.





The Company has also started negotiations with certain distributors in countries outside the European Union to sell a number of its products. The Company hopes that these negotiations will finally result in sales orders, though the Company anticipates that actual sales will take some time to develop due to the registration requirements in the various countries. The Company believes that the registration process in these countries is less costly and less time consuming than the registration process for countries within the European Union, and hopes to be able to start selling its products in a reasonable time.





On April 17, 2008, the Company entered into a Stock Exchange Agreement (the “Stock Exchange Agreement”) with Genmed BV resulting in Genmed BV becoming a wholly owned subsidiary of the Company. Also on April 17, 2008, the Company entered into a General Release and Settlement Agreement (the “General Release and Settlement Agreement) and a consulting agreement with London Finance Group. See Exhibits 10.1, 10.2, and 10.3 incorporated by reference hereto.





In April 2009, the parties to the Stock Exchange Agreement, the General Release and Settlement Agreement and the consulting agreement described above, agreed and formalized by written agreement, to the cancellation of all of the warrants issued pursuant to such agreements, to the cancellation and re-issuing of certain shares issued pursuant to such agreements, and agreed to the cancellation of the consulting agreement with the London Finance Group, including the cancellation of the shares and warrants that have been issued to the London Finance Group as part of such consulting agreement. See Exhibit 10.4 hereto, Release and Settlement Agreement between the Company, Joost de Metz, Willem Blijleven, E.R. Bouwens Beheermaatschappij B.V., Medical Network Holding BV, Total Look, BV, London Finance Group, Ltd., Dojo Enterprises, LLC, Hyperion Fund, L.P., The Palisades Capital, LLC 401(k) Profit Sharing Trust, The Morpheus 2005 Trust dated December 1, 2005, Burton Partners, LLC, Picasso, LLC, and Glacier, LLC.


12





Risks





The Company is currently in the development stage of its generic drug distribution business and is attempting to develop and maintain relationships with generic drug manufacturers, retail entities, and government regulatory authorities. If the Company is unable to develop and maintain such relationships or unable to secure and maintain contractual relationships with generic drug manufacturers, retail entities, and government regulatory and licensing authorities the Company may not be able to fulfill its business plan and would likely be unable to continue its operations.





Similarly, if the Company is unable to obtain regulatory licensing to distribute, market, and sell its generic drugs, the Company would likely be unable to continue its operations. The Company is seeking to distribute and sell its generic drugs throughout Europe and in other countries. The Company will be subject to certain regulatory requirements which may cause the Company to incur additional expenses and resources maintaining compliance with such regulations, and may slow or stop the Company’s ability to distribute and sell generic drugs.





The distribution of pharmaceuticals and related healthcare solutions is highly competitive. The Company competes with national wholesale distributors of pharmaceuticals; regional and local distributors of pharmaceuticals; chain drugstores that warehouse their own pharmaceuticals; specialty distributors; and other healthcare providers. As a development stage Company, the Company is competing against more experienced and more developed competitors with greater resources, and established relationships, contracts, and products.





As shown in the accompanying financial statements and notes, the Company has incurred an accumulated deficit of $64,916,816 and has negative working capital of $1,379,678. The Company is reliant upon its officers and directors for capital and intends to raise capital through equity markets to fund future operations and to generate revenue through its business operations. Failure to raise adequate capital and to generate adequate sales revenues could result in the Company being unable to effectuate its business plan.  Additionally, even if the Company does raise sufficient capital to support its operating expenses and generate adequate revenues, there can be no assurance that such revenue will be sufficient to enable it to develop business to a level where it will generate profits and cash flow from operations. These matters have raised substantial doubt about the Company's ability to continue as a going concern.





Results of Operations





Comparison of the three months ended September 30, 2010 and 2009





Net Sales.The Company had $4,145 in net sales during the three months ended September 30, 2010 compared to $1,181 in net sales for the three months ended September 30, 2009. Such net sales primarily consisted of consulting services and did not include any sales of generic products.





Selling, General, and Administrative expenses. Selling, general, and administrative expenses increased 75,1% to $269,453 during the three month period ended September 30, 2010 as compared to $153,855 for the comparable period in 2009.  The increase is mainly due to increase in consulting expenses for the quarter.





Depreciation and Amortization.The Company incurred $181,719 in depreciation and amortization during the three months ended September 30, 2010, compared $368,925 in depreciation and amortization during the three months ended September 30, 2009. The decrease in depreciation and amortization expenses is primarily due to the impairment of the Medical Registration Rights as per December 31, 2009. The Company reviewed its medical registration rights for impairment on December 31, 2009 and determined that the value of the medical registration rights on December 31, 2009 was $6,150,000 and as such, an impairment loss of $6,252,359 was recognized. The depreciation and impairment expenses for the medical registration rights have been adjusted for the new value for the remaining useful life of this asset.




Research and Development.The Company incurred $15,055 in Research and Development expenses during the three months ended September 30, 2010, as compared to $31,580 in Research and Development expenses during the three months ended September 30, 2009.





Net Operating Loss. As a result of the Company’s selling, general, and administrative expenses, the Company incurred a net operating loss of $462,082 for the period ended September 30, 2010, as compared with $553,179 for the period ended September 30, 2009.


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Loss on Foreign Exchange and Interest Expense. The Company incurred an income on foreign exchange during the three month period ended September 30, 2010 of $55,054 compared to an income of $7,833 for the three month period ended September 30, 2009. The Company incurred interest expenses of $978,338 during the three month period ended September 30, 2010, as compared to $136,519 during the comparable period in 2009. The increase in interest expense was due primarily to the subordination agreements the Company entered into with related note holders and its officers. As such  a beneficial conversion feature of approximately $960,000 was recognized and was amortized as interest expense at the issuance date of the agreement.





Net Gain (Loss). The Company incurred a net loss of $1,385,366 during the three month period ended September 30, 2010, as compared with a net loss of $681,865 for the three month period ended September 30, 2009. The increase in net loss was due primarily to the subordination agreements the Company entered into with related note holders and its officers. As such  a beneficial conversion feature of approximately $960,000 was recognized and amortized at the issuance date of the agreement.





Comparison of the nine months ended September 30, 2010 and 2009





Net Sales.The Company had $4,648 in net sales during the period ended September 30, 2010 compared to $50,956 in net sales for the same period ended September 30, 2009. Such net sales primarily consisted of consulting services and did not include any sales of generic products.





Selling, General, and Administrative expenses. Selling, general, and administrative expenses increased 16,8% to $739,975 during the nine month period ended September 30, 2010 as compared to $633,671 for the comparable period in 2009.  The increase is mainly due to increase in consulting expenses for the quarter.





Depreciation and Amortization.The Company incurred $545,179 in depreciation and amortization during the nine months ended September 30, 2010, compared $1,094,627  in depreciation and amortization during the nine months ended September 30, 2009. The decrease in depreciation and amortization expenses is primarily due to the impairment of the Medical Registration Rights as per December 31, 2009. The Company reviewed its medical registration rights for impairment on December 31, 2009 and determined that the value of the medical registration rights on December 31, 2009 was $6,150,000 and as such, an impairment loss of $6,252,359 was recognized. The depreciation and impairment expenses for the medical registration rights have been adjusted for the new value for the remaining useful life of this asset.




Research and Development.The Company incurred $58,266 in Research and Development expenses during the nine months ended September 30, 2010, as compared to $72,267 in Research and Development expenses during the nine months ended September 30, 2009.





Net Operating Loss. As a result of the Company’s selling, general, and administrative expenses, the Company incurred a net operating loss of $1,338,772 for the period ended September 30, 2010, as compared with $1,749,609 for the period ended September 30, 2009.





Loss on Foreign Exchange and Interest Expense. The Company incurred a gain on foreign exchange during the period ended September 30, 2010 of $12,760 compared to a loss of $4,394 for the period ended September 30, 2009. The Company incurred interest expenses of $1,324,178 during the nine month period ended September 30, 2010, as compared to $169,696 during the comparable period in 2009. The increase in interest expense was due primarily to the subordination agreements the Company entered into with related note holders and its officers. As such  a beneficial conversion feature of approximately $960,000 was recognized and was amortized as interest expense at the issuance date of the agreement.





Net Gain (Loss). The Company incurred a net loss of $2,650,190 during the period ended September 30, 2010, as compared with a net loss of $1,638,699 for the period ended September 30, 2009. The increase in net loss was due primarily to the subordination agreements the Company entered into with related note holders and its officers. As such  a beneficial conversion feature of approximately $960,000 was recognized and amortized at the issuance date of the agreement.


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Liquidity and Capital Resources





At September 30, 2010, the Company had $6,381,602 of total net assets. Total assets consisted of $733,536 in cash, $21,134 in accounts receivable, $10,189 in VAT receivables, $9,336 in equipment, $5,607,407 in medical registration rights.





The Company's working capital deficit was $1,379,678 at September 30, 2010, compared to a working capital deficit of $2,059,492 at December 31, 2009.





At September 30, 2010, the Company had acquired its wholly owned subsidiary Genmed BV, successfully registered its first generic product in seven EU countries and continued developing its business of the distribution and sale of generic drugs. The Company had no revenues in generic products during the nine months ended September 30, 2010 and had no revenues in generic products during the nine months ended September 30, 2009. The revenues the Company did have in the aforementioned period consisted primarily of consulting services.





As of September 30, 2010, the Company was primarily relying on its corporate officers, directors, and outside investors for the funding needed for the implementation of its business plan. The Company’s management is currently looking for the capital needed to complete its corporate objectives. The Company cannot predict the extent to which its liquidity and capital resources will be available prior to execute its business plan or whether it will have sufficient capital to fund typical operating expenses.





If the Company is unable to obtain financing from any of one of these aforementioned sources, the Company would not be able to complete the financial requirements regarding the development of its generic drug distribution business or to continue as a going concern.





In August 2010, the Company requested from their related party note holders and its officers to subordinate any outstanding loans, interest, fees and unpaid salaries due to them from the Company to any and all bonds holders of the Company. As of August 25, 2010, a total amount of $960,000 has been subordinated to the Company’s bond holders.





As of November 22, 2010, the Company has realized €587,000 (approx. $756,000) in equity financing and issued for €685,000 (approx. $936,000) in interest bearing bonds.





Item 3.  Quantitative and Qualitative Disclosures about Market Risk





Smaller reporting companies are not required to provide the information required by this item.





Item 4.  Controls and Procedures





Disclosure controls and procedures





As of the end of the period covered by this quarterly report, the Company, through its Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective to enable us to record, process, summarize and report information required to be included in our reports that we file or submit under the Exchange Act within the time periods required.





Changes in Internal Control over Financial Reporting





There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended) during the quarter ended September 30, 2010 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.




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PART II - OTHER INFORMATION





Item 1 Legal Proceedings





The Company was named as a defendant in a lawsuit filed in the Circuit Court of the 11thJudicial Circuit in Miami-Dade County, Florida, Case No. 08-79227CA25 in December 2008. The Company’s former Chief Executive Officer, Jerri Palmer, instigated the lawsuit against the Company alleging Breach of Contract and Unjust Enrichment. Ms. Palmer is claiming damages in excess of $15,000. Ms. Palmer was the Company’s Chief Executive Officer from December 5, 2005, until her resignation on May 19, 2006.




In March 2010, the Company and Ms. Palmer have settled the lawsuit for an amount of $40,000. The Company accrued this settlement in the financial statements at December 31, 2009.





On July 20, 2010, since the Company was not able to pay this amount, Ms. Palmer entered into a final judgment against the Company for $40,000 bearing an annual interest rate at 6%. In July the Company and Ms. Palmer agreed upon a payment plan for 6 installments payable at the end of each month. As per October 31, 2010, the Company has made four installments of $7,000 each.




Item 2 Unregistered Sales of Equity Securities and Use of Proceeds





On or around April 8, 2009, the parties to the Stock Exchange Agreement, the General Release and Settlement Agreement, and the consulting agreement with London Finance Group, agreed and formalized by written agreement, to the cancellation of all of the warrants issued to such agreements, to the cancellation and re-issuing of certain shares issued pursuant to such agreements, and agreed to the cancellation of the consulting agreement with London Finance Group, including the cancellation of the shares and warrants that were issued to London Finance Group as part of such agreement. See Exhibit 10.4 hereto.





On June 30, 2009, the Company and two note holders agreed upon the consolidation of their notes, including the unpaid interest, and to issue a new 100% Premium Secured Convertible Promissory Note. The new note is issued for the amount of $925,000, bears an annual interest rate of 8% and is convertible into shares of the Company’s Common Stock at a share price of $0.04 per share.   The Secured Promissory Note is due on June 30, 2010.





On December 31, 2009, the Company and Mr. Bouwens, the CEO of the Company, agreed upon the conversion of his note, including the unpaid interest, and to issue a new 100% Premium Secured Convertible Promissory Note. The new note is issued for the amount of $221,557, bears an annual interest rate of 8% and is convertible into shares of the Company’s Common Stock at a share price of $0.04 per share.   The Secured Promissory Note is due on December 31, 2010.





On March 3, 2010, the holders of the Convertible notes have converted their notes including the unpaid interest into shares of the Company’s Common Stock. As such, the Company has issued 29,948,794 of newly shares of Common Stock of the Company.





On May 19, 2010, in exchange for $14,880 (€12,000) in cash, the Company issued 297,600 shares of its common stock to a non-related individual.





On June 8, 2010, in exchange for $5,970 (€5,000) in cash, the Company issued 119,400 shares of its common stock to a non-related individual.





On July 8, 2010, in exchange for $378,090 (€300,000) in cash, the Company issued 6,000,000 shares of its common stock at $0.06 (€0.05) per share to a non-related individual.





On July 11, 2010, in exchange for $12,645 (€10,000) in cash, the Company issued 200,000 shares of its common stock at $0.06 (€0.05) per share to a non-related individual.





On July 15, 2010, in exchange for $127,260 (€100,000) in cash, the Company issued 2,000,000 shares of its common stock at $0.06 (€0.05) per share to a non-related individual.


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On July 16, 2010, in exchange for $64,165 (€50,000) in cash, the Company issued 1,000,000 shares of its common stock at $0.06 (€0.05) per share to a non-related individual.





On October 12, 2010, in exchange for $139,233 (€100,000) in cash, the Company issued 2,000,000 shares of its common stock at $0.07 (€0.05) per share to a non-related individual.





On October 23, 2010, in exchange for $13,926 (€10,000) in cash, the Company issued 1,000,000 shares of its common stock at $0.07 (€0.05) per share to a non-related individual.







Item 3 Defaults Upon Senior Securities





N/A





Item 4 Submission of Matters to a Vote of Security Holders





N/A





Item 5 Other Information





See Part II, Item 2 Unregistered Sales of Equity Securities and Use of Proceeds, above.





Item 6 Exhibits





Exhibit    10.1
Stock Exchange Agreement between the Company and Joost de Metz (“de Metz”), Willem Blijleven (“Blijleven”), Erwin R. Bouwens (“Bouwens”) and Medical Network Holding BV dated April 17, 2008, incorporated herein by reference to Exhibit 9.2 to the Form 8-K current  report of the Company filed on May 2, 2008.





Exhibit    10.2
General Release and Settlement Agreement, incorporated herein by reference to Exhibit 9.1 to the Form 8-K current report of the Company filed on May 2, 2008.





Exhibit    10.3
Consulting Agreement between the Company and London Finance Group, Ltd.,
incorporated herein by reference to Exhibit 9.1 to the Form 8-K current report of the Company filed on May 2, 2008.





Exhibit    10.4
Release and Settlement Agreement between the Company, Joost de Metz, Willem Blijleven,  E.R. Bouwens Beheermaatschappij B.V., Medical Network Holding BV, Total Look, BV, London Finance Group, Ltd.,  Dojo Enterprises, LLC,  Hyperion Fund, L.P.,  The Palisades Capital, LLC 401(k) Profit Sharing Trust, The Morpheus 2005 Trust dated December 1, 2005, Burton Partners, LLC, Picasso, LLC  and Glacier, LLC, incorporated herein by reference to Exhibit 10.2 to the Form 10-K annual report of the Company filed on May 15, 2009.





Exhibit    31.1
Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.





Exhibit    31.2
Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.





Exhibit    32
Certification of the Chief Executive Officer pursuant to U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


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SIGNATURES





In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.





Dated:   December 6, 2010
Genmed Holding Corp.By: /s/ Randy HibmaRandy Hibma, Chief Financial Officer, Vice President, and Secretary








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