UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
DC 20549







FORM
10-Q








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


SECURITIES
EXCHANGE ACT OF 1934





For
the quarterly period ended March 31,
2009





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





For
the transition period from __________ to __________




Commission
file No. 333-90738




Biomoda,
Inc.


(Exact
name of registrant as specified in its charter)




New
      Mexico
              85-0392345(State
      of incorporation)
              (IRS
      Employer Identification No.)




P.O. Box 11342, Albuquerque,
New Mexico 87192


(Address
of principal executive offices including zip code)





Registrant's
telephone number:  (505)
821-0875





Check
whether the issuer (1) 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
r





Indicate
by check mark whether the registrant is a large accelerated filer, and
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  r
            Accelerated
      filer  rNon-accelerated
      filer     r
            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 r No x





The
number of issuer’s shares of Common Stock outstanding as of May 14, 2009 was
77,034,589.





Table of Contents




TABLEOF CONTENTS





PART
I. Financial Information




PageItem
      1. Financial
      Statements
              3Item
      2. Management's Discussion and
      Analysis of Financial Conditionand Results of
      Operations
              9Item
      3. Quantitative and Qualitative
      Disclosures About Market Risk
              11Item
      4. Controls and
      Procedures
              11PART
      II. Other InformationItem
      1.Legal
      Proceedings
              13Item
      2. Unregistered Sales of
      Equity Securities and Use of Proceeds
              13Item
      3. Defaults Upon Senior
      Securities
              13Item
      4. Submission of Matters to a
      Vote of Security Holders
              13Item
      5. Other
      Information
              13Item
      6. Exhibits
              13Signatures
              14




Table of Contents




PART
I: FINANCIAL INFORMATION





Forward - Looking
Statements




This Form
10-Q contains forward-looking statements about the business, financial condition
and prospects of the Company that reflect assumptions made by management and
management's beliefs based on information currently available to it. We can give
no assurance that the expectations indicated by such forward-looking statements
will be realized. If any of management's assumptions should prove incorrect, or
if any of the risks and uncertainties underlying such expectations should
materialize, our actual results may differ materially from those indicated by
the forward-looking statements.





The key
factors that are not within our control and that may have a direct bearing on
operating results include, but are not limited to, the acceptance by customers
of our products, our ability to develop new products cost-effectively, the
ability of us to raise capital in the future, the development by competitors of
products using improved or alternative technology, the retention of key
employees and general economic conditions.





There may
be other risks and circumstances that management is unable to predict. When used
in this Form 10-Q, words such as, "believes," "expects," "intends," "plans,"
"anticipates" "estimates" and similar expressions are intended to identify
forward-looking statements, although there may be certain forward-looking
statements not accompanied by such expressions. All forward-looking statements
are intended to be covered by the safe harbor created by Section 21E of the
Securities Exchange Act of 1934.











3
 Table of Contents




BIOMODA, INC. AND SUBSIDIARY


(A
DEVELOPMENT STAGE COMPANY)


CONSOLIDATED
BALANCE SHEETS


(UNAUDITED)




March
      31, 2009
                                                                  
                                                                  
                                                                  December
      31, 2008ASSETSCURRENT
      ASSETSCash
                                                                  
                                                                  $
                                                                  110,307
                                                                  
                                                                  
                                                                  $
                                                                  36,854Grants
      receivable
                                                                  
                                                                  
                                                                  96,672
                                                                  
                                                                  
                                                                  
                                                                  184,124Other
      current assets
                                                                  
                                                                  
                                                                  9,573
                                                                  
                                                                  
                                                                  
                                                                  -Total
      current assets
                                                                  
                                                                  
                                                                  216,552
                                                                  
                                                                  
                                                                  
                                                                  220,978Grants
      receivable - unbilled
                                                                  
                                                                  
                                                                  -
                                                                  
                                                                  
                                                                  
                                                                  81,797Property
      and equipment, net of accumulated depreciation
                                                                  
                                                                  
                                                                  1,417
                                                                  
                                                                  
                                                                  
                                                                  1,984of
      $16,019 and $15,452Patents
      and trademarks, net of accumulated amortizationof
      $297,497 and $281,952
                                                                  
                                                                  
                                                                  102,338
                                                                  
                                                                  
                                                                  
                                                                  114,576Other
      assets
                                                                  
                                                                  
                                                                  33,504
                                                                  
                                                                  
                                                                  
                                                                  -Total
      assets
                                                                  
                                                                  $
                                                                  353,811
                                                                  
                                                                  
                                                                  $
                                                                  419,335LIABILITIES
      AND STOCKHOLDERS' DEFICITCURRENT
      LIABILITIESAccounts
      payable and accrued liabilities
                                                                  
                                                                  $
                                                                  333,370
                                                                  
                                                                  
                                                                  $
                                                                  289,199Advances
      from stockholders
                                                                  
                                                                  
                                                                  205,018
                                                                  
                                                                  
                                                                  
                                                                  201,643Short-term
      debt
                                                                  
                                                                  
                                                                  90,873
                                                                  
                                                                  
                                                                  
                                                                  90,873Total
      current liabilities
                                                                  
                                                                  
                                                                  629,261
                                                                  
                                                                  
                                                                  
                                                                  581,715LONG-TERM
      DEBT
                                                                  
                                                                  
                                                                  145,834
                                                                  
                                                                  
                                                                  
                                                                  162,110Total
      liabilities
                                                                  
                                                                  
                                                                  775,095
                                                                  
                                                                  
                                                                  
                                                                  743,825STOCKHOLDERS'
      DEFICITClass
      A redeemable preferred stock; no par value; 2,000,000shares
      authorized; cumulative and convertible;liquidation
      and redemption values of $1.50 and $1.80per
      share, respectively; no shares issued or outstanding
                                                                  
                                                                  
                                                                  -
                                                                  
                                                                  
                                                                  
                                                                  -Undesignated
      preferred stock; 2,000,000 shares authorized; noshares
      issued and outstanding
                                                                  
                                                                  
                                                                  -
                                                                  
                                                                  
                                                                  
                                                                  -Common
      stock, no par value, 100,000,000 share authorized;77,034,589
      and 77,004,589 issued; 76,974,589 and 76,944,589outstanding
                                                                  
                                                                  
                                                                  7,216,581
                                                                  
                                                                  
                                                                  
                                                                  7,215,381Treasury
      stock, at cost 60,000 shares
                                                                  
                                                                  
                                                                  (9,000
                                                                  )
                                                                  
                                                                  
                                                                  (9,000
                                                                  )Deficit
      accumulated during development stage
                                                                  
                                                                  
                                                                  (7,628,865
                                                                  )
                                                                  
                                                                  
                                                                  (7,530,871
                                                                  )Total
      stockholders' deficit
                                                                  
                                                                  
                                                                  (421,284
                                                                  )
                                                                  
                                                                  
                                                                  (324,490
                                                                  )Total
      liabilities and stockholders' deficit
                                                                  
                                                                  $
                                                                  353,811
                                                                  
                                                                  
                                                                  $
                                                                  419,335




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


4
 Table of Contents




BIOMODA,
INC. AND SUBSIDIARY


(A
DEVELOPMENT STAGE COMPANY)


CONSOLIDATED
STATEMENTS OF OPERATIONS


(UNAUDITED)






Three
      Months Ended March 31
                              
                              
                              January
      3, 1990 (Inception) to2009
                              
                              
                              2008
                              
                              
                              March
      31, 2009Revenue
                              
                              $
                              -
                              
                              
                              $
                              -
                              
                              
                              $
                              23Operating
      ExpensesGeneral
      and administrative
                              
                              
                              42,612
                              
                              
                              
                              89,063
                              
                              
                              
                              4,395,339Professional
      fees
                              
                              
                              40,928
                              
                              
                              
                              395,477
                              
                              
                              
                              1,041,430Depreciation
      and amortization
                              
                              
                              16,114
                              
                              
                              
                              153,255
                              
                              
                              
                              316,132Research
      and development, net of grants received
                              
                              
                              (5,059
                              )
                              
                              
                              13,118
                              
                              
                              
                              2,711,664Total
      operating expenses
                              
                              
                              94,595
                              
                              
                              
                              650,913
                              
                              
                              
                              8,464,565Loss
      from operations
                              
                              
                              (94,595
                              )
                              
                              
                              (650,913
                              )
                              
                              
                              (8,464,542
                              )Other
      Income (Expense)Other
      income
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              34,037Gain
      on extinguishment of debt
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              1,326,028Interest
      income
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              3,870Interest
      expense
                              
                              
                              (3,399
                              )
                              
                              
                              (14,452
                              )
                              
                              
                              (528,258
                              )Total
      other income (expense)
                              
                              
                              (3,399
                              )
                              
                              
                              (14,452
                              )
                              
                              
                              835,677Loss
      Before Provision For Income Taxes
                              
                              
                              (97,994
                              )
                              
                              
                              (665,365
                              )
                              
                              
                              (7,628,865
                              )Provision
      for income taxes
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -Net
      Loss
                              
                              $
                              (97,994
                              )
                              
                              $
                              (665,365
                              )
                              
                              $
                              (7,628,865
                              )Basic
      and diluted loss per common share
                              
                              $
                              (0.00
                              )
                              
                              $
                              (0.01
                              )Basic
      and diluted weighted average number of common shares
      outstanding
                              
                              
                              77,008,922
                              
                              
                              
                              59,518,759




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






5
 Table of Contents




BIOMODA,
INC. AND SUBSIDIARY


(A
DEVELOPMENT STAGE COMPANY)


CONSOLIDATED
STATEMENTS OF CASH FLOWS


(UNAUDITED)




For
      the Three Months
                                
                                
                                January
      3, 1990ended
      March 31,
                                
                                
                                (inception)
      to2009
                                
                                
                                2008
                                
                                
                                March
      31, 2009CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      loss
                                
                                $
                                (97,994
                                )
                                
                                $
                                (665,365
                                )
                                
                                $
                                (7,628,865
                                )Adjustments
      to reconcile net earnings to netcash
      used in operating activitiesStock
      based compensation
                                
                                
                                1,200
                                
                                
                                
                                266,293
                                
                                
                                
                                2,875,076Depreciation
      and amortization
                                
                                
                                16,114
                                
                                
                                
                                13,118
                                
                                
                                
                                316,130Interest
      converted to note payable
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -Write
      off of license fee
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                1,250Loss
      on sale of assets
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                358Foreign
      currency translation adjustments
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                3,247Gain
      on extinguishment of debt
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                (1,283,964
                                )Changes
      in operating assets and liabilitiesAccounts
      receivable
                                
                                
                                126,170
                                
                                
                                
                                -
                                
                                
                                
                                77,551Other
      assets
                                
                                
                                -
                                
                                
                                
                                (1,633
                                )
                                
                                
                                7,620Accounts
      payable and accrued liabilities
                                
                                
                                33,272
                                
                                
                                
                                (27,174
                                )
                                
                                
                                916,411Net
      cash provided by (used in) operating activities
                                
                                
                                78,762
                                
                                
                                
                                (414,761
                                )
                                
                                
                                (4,715,186
                                )CASH
      FLOWS FROM INVESTING ACTIVITIESPurchase
      of equipment
                                
                                
                                -
                                
                                
                                
                                (15,000
                                )
                                
                                
                                (25,571
                                )Sales
      of property and equipment
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                1,139Purchases
      of patents, trademarks and licenses
                                
                                
                                (3,307
                                )
                                
                                
                                (13,222
                                )
                                
                                
                                (416,833
                                )Organizational
      costs
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                (560
                                )Net
      cash used in investing activities
                                
                                
                                (3,307
                                )
                                
                                
                                (28,222
                                )
                                
                                
                                (441,825
                                )CASH
      FLOWS FROM FINANCING ACTIVITIESIssuance
      of common stock for cash, net
                                
                                
                                -
                                
                                
                                
                                677,218
                                
                                
                                
                                2,897,883Proceeds
      from  line-of-credit from affiliated entity
                                
                                
                                -
                                
                                
                                
                                9,828
                                
                                
                                
                                2,680,882Proceeds
      from stockholders' advances
                                
                                
                                3,375
                                
                                
                                
                                4,624
                                
                                
                                
                                165,608Repayments
      of line-of-credit from affiliated entity
                                
                                
                                -
                                
                                
                                
                                (27,579
                                )
                                
                                
                                (341,107
                                )Repayments
      of short-term debt
                                
                                
                                -
                                
                                
                                
                                (30,000
                                )
                                
                                
                                (109,692
                                )Repayments
      of long-term debt
                                
                                
                                (5,377
                                )
                                
                                
                                -
                                
                                
                                
                                (17,256
                                )Acquisition
      of treasury stock
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                (9,000
                                )Net
      cash provided by financing activities
                                
                                
                                (2,002
                                )
                                
                                
                                634,091
                                
                                
                                
                                5,267,318NET
      (DECREASE) INCREASE IN CASH
                                
                                
                                73,453
                                
                                
                                
                                191,108
                                
                                
                                
                                110,307Cash
      at beginning of year
                                
                                
                                36,854
                                
                                
                                
                                479,800
                                
                                
                                
                                -Cash
      at end of year
                                
                                $
                                110,307
                                
                                
                                $
                                670,908
                                
                                
                                $
                                110,307Supplemental
      cash flow information:Interest
      expense paid in cash
                                
                                $
                                -
                                
                                
                                $
                                -
                                
                                
                                $
                                -Income
      taxes paid in cash
                                
                                $
                                -
                                
                                
                                $
                                -
                                
                                
                                $
                                -Non-cash
      investing and financing activities:Accrued
      salaries converted to notes payable
                                
                                $
                                -
                                
                                
                                $
                                -
                                
                                
                                $
                                479,484Interest
      converted to note payable
                                
                                $
                                -
                                
                                
                                $
                                -
                                
                                
                                $
                                159,462Common
      stock issued to extinguish related party debt
                                
                                $
                                -
                                
                                
                                $
                                -
                                
                                
                                $
                                1,418,768




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


6
 Table of Contents


_____________________________________________


BIOMODA,
INC.


(A
Development Stage Company)


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)


_____________________________________________








1.  BASIS
OF PRESENTATION





The
accompanying unaudited interim financial statements of Biomoda, Inc. have been
prepared in accordance with accounting principles generally accepted in the
United States of America for interim financial information and with the
instructions to Form 10-Q. Accordingly, they do not include all of the
information and notes required by generally accepted accounting principles for
complete financial statements and should be read in conjunction with the
Management's Discussion and Analysis and the audited financial statements and
notes thereto contained in our 2008 Annual Report filed with the Securities and
Exchange Commission on Form 10-K. In the opinion of management, all adjustments,
consisting of normal recurring adjustments, necessary for a fair presentation of
financial position and the results of operations for the interim periods
presented have been reflected herein. The results of operations for the interim
periods are not necessarily indicative of the results to be expected for the
full year. Notes to the financial statements which would substantially duplicate
the disclosure contained in the audited financial statements for 2008 as
reported on Form 10-K have been omitted.





2.  DEVELOPMENT
STAGE





We have
been in the development stage since we began operations on January 3, 1990. We
have a continuing government contract for fiscal year ended June 30, 2009 of
$1.3 million of which approximately  $940,000 has been already
reimbursed leaving approximately $360,000 until the end of June, 2009.Beginning
July 1, 2009, we have been approved for approximately $600,000 in reimbursement
of research and development costs and associated overhead expenses for the year
ending June 30, 2010.  As of March 31, 2009, we had an accumulated
deficit of $7,628,865 and a working capital deficit of
$412,709.


In
addition, we have historically not generated any cash from
operations.  These factors create a substantial doubt as to our
ability to continue as a going concern.





We will
require additional funding for continuing research and development and obtaining
regulatory approval and for the commercialization of our products. Management
expects to be able to raise enough funds to meet our working capital
requirements through the sale of our common stock or other means of
financing.





There is
no assurance that we will be able to obtain sufficient additional funds when
needed, or that such funds, if available, will be obtainable on terms
satisfactory to us.









7
 Table of Contents




_____________________________________________


BIOMODA,
INC.


(A
Development Stage Company)


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)


_____________________________________________




3.  COMMON
STOCK





During
the three months ended March 31, 2009, we issued 30,000 common shares for
services valued at $1,200.





During
the three months ended March 31, 2008, we issued 3,225,860 common shares for
services valued at $266,293.  We also sold 23,426,179 common shares
for $2,535,255, incurring $1,858,037 in costs related to the Regulation S
offering.





4.  REIMBURSEMENT
OF R&D EXPENSES





During
the quarter ended March 31, 2009, we received a reimbursement of allowable
research and development expenses through a clinical program funded through the
New Mexico Department of Veterans Services and administered by the New Mexico
Institute of Mining and Technology to screen New Mexican Veterans for lung
cancer.  For the three months ended March 31, 2009, we recorded
$246,084 as a reduction of operating expenses related to this clinical study
program.





5.
SUBSEQUENT EVENTS





On April
22, 2009, Biomoda, Advanced Optics Electronics, Inc. (“ADOT”), and Leslie S.
Robins (“Robins”) entered into a Settlement Agreement and Release (“Settlement”)
to resolve all claims in the pending federal lawsuit entitled Advanced Optics Electronics, Inc.,
et al. v. Leslie S. Robins, et al.No. CIV-2007-00855, JB/DJS, U.S.
District Court for the District of New Mexico and two related
suits.  As described below, the Settlement effectively separates
Biomoda from ADOT and Robins and cedes control of ADOT to Robins.





Pursuant
to the Settlement, in addition to executing a release in favor of Biomoda,
Robins took the following action:




(a) paid
$10,000 to Biomoda and delivered to Biomoda all Biomoda documents within his
possession or control;




(b)
resigned from any position he may claim to hold or claim he should hold as an
officer or director of Biomoda;




(c)
transferred all shares of Biomoda stock currently held by Robins or by any
family member or other person, corporation or entity in which he has any
control, which consisted of 747,000 shares; and




(d)
agreed to not ever acquire any Biomoda shares in the future.




In
addition, on April 22, 2009, our President and current board member, John J.
Cousins, resigned as a director and officer of ADOT, and Robins was appointed
Chairman, Chief Executive Officer and President of ADOT.  Pursuant to
the Settlement, ADOT also transferred 1,231,575 Biomoda shares to the Company
and released Biomoda from all ADOT claims, including claims related to an
alleged promissory note dated May 1, 2002 in the amount of $1,030,748, which was
disputed and previously written off by Biomoda as of the year ended December 31,
2008.




The
pending federal lawsuit against Robins will be dismissed with
prejudice.




The two
remaining Defendants in the Federal RICO lawsuit are Alvin Robins (brother of
Leslie Robins) and John Kearns (attorney for Leslie Robins). A default judgment
has been rendered by the Court against Alvin Robins and John Kearns on all
counts alleged and in favor of Biomoda and ADOT. The damages portion of the
judgment will be heard at the Court's convenience. Both ADOT and Biomoda have
alleged in court documents damages in the tens of millions of dollars. The
remaining two defendants have yet to file a responsive pleading before the
Court. Biomoda intends to aggressively pursue collection of damages against the
remaining defendants.







8
 Table of Contents




Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS AND RESULTS OF
OPERATIONS





COMPANY
OVERVIEW





Biomoda,
Inc. is a development stage company incorporated in the state of New Mexico on
January 3, 1990. Our general focus is on discovery, development,
manufacture and marketing of proprietary medical diagnostic and treatment
products used to treat life threatening and other serious
diseases.  Our primary focus is creating diagnostic solutions for
early detection and clinical management of cancer.





PLAN OF
OPERATION





Our plan
of operation for the next eighteen months is to complete our Phase I/II/ and III
Clinical Trials for our lung cancer assay.  We are currently
conducting a program to screen veterans for lung cancer in New
Mexico.  This program is being partially funded by the state of New
Mexico Department of Veteran Services.


Our
initial product is a diagnostic test for lung cancer that will be performed out
of body by using a sputum sample from the patient.  Our test does not
require any invasive sample taking.  The sample will be sent to a
clinical lab where the procedure will be performed to determine the presence, or
not, of lung cancer or precancerous cells.  Our diagnostic test can be
used for other cell samples and we intend to create and market products to
diagnose and screen for other prevalent cancers such as breast, cervical,
bladder, and colorectal.  We have determined that our initial markets
will be the developed nations of Europe, North America and
Japan.  This has been determined on the basis of available healthcare
delivery and payer infrastructure.  Japan has instituted a nationwide
lung cancer-screening program.  We also intend to sell our product in
additional markets throughout the world such as India, Brazil and South America,
Asia and Russia.  We will market different product formats based on
the region of the world.





In
addition to augmenting laboratory research and development, management plans to
further strengthen our corporate infrastructure to adequately manage the future
growth and success of our operations.  Management expects to hire
additional personnel and enter into consulting and collaborative arrangements
over the next twelve months as needed to continue to strengthen and enhance the
effectiveness of implementing our plan as we grow.




We have a
continuing government contract for fiscal year ended June 30, 2009 of $1.3
million of which approximately $940,000 has been already reimbursed leaving
approximately $360,000 until the end of June, 2009.Beginning July 1, 2009, we
have been approved for approximately $600,000 in reimbursement of research and
development costs and associated overhead expenses for the year ending June 30,
2010.




Management
plans to implement an “Investigational Use Only” (“IUO”) program to allow
interested parties to be screened for lung cancer and for the company to recoup
product development costs.





Our
research and development laboratories are located at 609 Broadway NE in
Albuquerque, New Mexico.





Over the
next eighteen months, management and the Board of Directors will continuously
evaluate and develop our business plan which includes assessing the technology
we utilize and the markets we intend to serve and evaluating the prospect of
expanding into additional products and markets as business conditions warrant.
In connection with this continual evaluation, management will also look at
taking actions designed to mitigate any and all risks associated with our
business plan.





PATENTS
AND TRADEMARKS





In
January 2005, the U.S. Patent Office awarded a Patent to Biomoda researchers
entitled "Compositions and Methods for Detecting Precancerous Conditions in
Cells and Tissue Samples using 5, 10, 15, 20 Tetrakis (Carboxyphenyl) Porphine".
This Patent brings a significant addition to our patent portfolio and expands
our intellectual property to include cancer screening as a compliment to our
existing technology. We filed for a continuation for this Patent based on
research currently underway by researchers at Biomoda.






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In April,
2008, the U.S. Patent Office awarded a Divisional Patent to Biomoda researchers
entitled “Method of Prognosing Response to Cancer Therapy with 5, 10, 15, 20 -
Tetrakis (Carboxyphenyl) Porphine”.  We are planning to file new
patents next quarter related to the making of TCPP and the proprietary
innovations based on flow cytometry and dark-field microscopy as
platforms.





U.S.
Patent and Trademark Office has registered the marks CyPath® and
CyDx®.




CLINICAL
STUDY UPDATE





As of May
14, we have recruited 230 out of approximately 350 Veterans needed for our Phase
II study and we have screened 52 so far.  Preliminary results will be
available as soon as 100 participants have been screened and the results
recorded. We anticipate this Phase II study to complete by September 30,
2009.





Response
to this program has been very positive.  Interested veterans living in
New Mexico may sign up online at our website, www.biomoda.com by
clicking “sign up for the study’ at the bottom of the Home page.





RESULTS
OF OPERATIONS





Due to
our limited operating history, we believe that period-to-period comparisons of
our results of operations are not fully meaningful and should not be relied upon
as an indication of future performance.





Comparison of the three
months ended March 31, 2009 and 2008





REVENUE.  As
of March 31, 2009, there have been no significant revenues since
inception.





RESEARCH
AND DEVELOPMENT.  Product developmentexpenses
consist primarily of personnel expenses and consulting fees. Research and
development, including payroll costs and other technical costs decreased to
$5,059 in income in the three months ended March 31, 2009 from $153,255 in the
three months ended March 31, 2008. We believe that continued investment in
product development is critical to attaining our strategic objectives and, as a
result, we expect expenses such as clinical studies and collaborations to
increase significantly in the next year. We expense product development costs as
they are incurred.  During the quarter ended March 31, 2009, we
received a reimbursement of allowable research and development expenses through
a clinical study funded through the New Mexico Department of Veterans Services
and administered by the New Mexico Institute of Mining and Technology to screen
New Mexican Veterans for lung cancer.  For the three months ended
March 31, 2009, we recorded $246,084 as a reduction of research and development
expenses related to this clinical study program.





GENERAL
AND ADMINISTRATIVE.  General and administrative expenses consist of
expenses for executive and administrative personnel, facilities, professional
services, travel and general corporate activities.  General and
administrative costs, taken together with professional fees, decreased to
$83,540 in the three months ended March 31, 2009 from $484,540 in the three
months ended March 31, 2008.  The decrease was primarily related to
the company reducing overhead costs in 2009.  We expect general and
administrative costs to increase in the future as our business prospects develop
and we will require more staff. The costs associated with being a publicly
traded company and future strategic acquisitions will also be a contributing
factor to increases in this expense.





OTHER
INCOME (EXPENSE).  Other income (expense) in these periods consists of
interest expense, which decreased to $3,399 in the three months ended March 31,
2009 from $14,452 in the three months ended March 31, 2008 due to extinguishment
in related party debt as of 12/31/08.




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LIQUIDITY
AND CAPITAL RESOURCES





We have
funded our operations with sales of equity for cash, issuance of equity for
services in lieu of cash and government funding.  In the next 18 months, it
is our intent to generate revenues from product sales and to begin partially
funding operations from revenues which will be subject to clinical trials and
FDA approval.





Product
development expenditures, including personnel expense, and general and
administrative expense was $78,481 for the three months ended March 31,
2009.  Funds for operations, product development and capital
expenditures were provided from the sale of restricted company stock and the
reimbursement grant we received.  We will require substantial
additional funding for continuing research and development, obtaining regulatory
approval and for the commercialization of our products.





Management
believes that sales of securities and government contracts will provide adequate
liquidity and capital resources to meet the anticipated development stage
requirements through the end of 2010.  In addition, it is anticipated
that sales of our initial screening product will begin in 2010, pending FDA
approval, and generate operating revenues.  It is anticipated that
these sales will provide the additional capital resources to fund the
proportionately higher working capital requirements of production and sales
initiatives and continued product development for second-generation diagnostic
and therapeutic products.





There is
no assurance that we will be able to obtain sufficient additional funds when
needed, or that such funds, if available, will be obtainable on terms
satisfactory to us.  The consolidated financial statements do not
include any adjustments that might be necessary should we be unable to continue
as a going concern.





INFLATION





Management
believes that inflation has not had a material effect on our results of
operations.





Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK





There has
been no material change in our market risks since the end of the fiscal year
2008.





Item 4: CONTROLS AND PROCEDURES





Under the
supervision and with the participation of our management, we evaluated the
effectiveness of the design and operation of our disclosure controls and
procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Exchange Act as of
the end of the period covered by this report, March 31, 2009).  Based
upon that evaluation, we concluded that our disclosure controls and procedures
were not effective.





We are in
the development stages of our business operations and have limited resources
available to plan, develop, and implement disclosure and procedure controls and
other procedures that are designed to ensure that information required to be
disclosed in our periodic reports filed or submitted under the Exchange Act is
recorded, processed, summarized and reported, within the time periods specified
in the Securities and Exchange Commission's rules and forms. Disclosure controls
and procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed in our periodic reports filed
under the Exchange Act is accumulated and communicated to management to allow
timely decisions regarding required disclosure.





We
are re-evaluating and revising our existing control policies and procedures. As
part of such plan and implementation, we are re-evaluating, re-designing and
documenting policies and procedures, putting such procedures in operation, and
monitoring the effectiveness of the procedures.




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CHANGES
IN CONTROLS AND PROCEDURES





Significant
changes have been made to improve our internal controls over financial reporting
during the three months ended March 31, 2009.  We have employed
additional accounting personnel which has helped us increase our segregation of
duties.  We are implementing a review process over significant
business transactions.





LIMITATIONS
ON THE EFFECTIVENESS OF INTERNAL CONTROL





Our
management, including the CEO, does not expect that our disclosure controls and
procedures or our internal control over financial reporting will necessarily
prevent all fraud and material errors.  An internal control system, no
matter how well conceived and operated, can provide only reasonable, not
absolute, assurance that the objectives of the control system are met. Further,
the design of a control system must reflect the fact that there are resource
constraints, and the benefits of controls must be considered relative to their
costs.  Because of the inherent limitations on all internal control
systems, no evaluation of controls can provide absolute assurance that all
control issues and instances of fraud, if any, within the Company have been
detected.  These inherent limitations include the realities that
judgments in decision-making can be faulty, and that breakdowns can occur
because of simple error or mistake. Additionally, controls can be circumvented
by the individual acts of some persons, by collusion of two or more people,
and/or by management's override of the controls. The design of any system of
internal control is also based in part upon certain assumptions about the
likelihood of future events, and there can be no assurance that any design will
succeed in achieving its stated goals under all potential future
conditions.  Over time, controls may become inadequate because of
changes in circumstances, and/or the degree of compliance with the policies and
procedures may deteriorate.  Because of the inherent limitations in a
cost-effective internal control system, financial reporting misstatements due to
error or fraud may occur and not be detected on a timely basis.









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PART
II. OTHER INFORMATION





Item1.  LEGAL PROCEEDINGS




On April
22, 2009, Biomoda, Advanced Optics Electronics, Inc. (“ADOT”), and Leslie S.
Robins (“Robins”) entered into a Settlement Agreement and Release (“Settlement”)
to resolve all claims in the pending federal lawsuit entitled Advanced Optics Electronics, Inc.,
et al. v. Leslie S. Robins, et al.No. CIV-2007-00855, JB/DJS, U.S.
District Court for the District of New Mexico and two related
suits.  As described below, the Settlement effectively separates
Biomoda from ADOT and Robins and cedes control of ADOT to Robins.




Pursuant
to the Settlement, in addition to executing a release in favor of Biomoda,
Robins took the following action:




(a) paid
$10,000 to Biomoda and delivered to Biomoda all Biomoda documents within his
possession or control;




(b)
resigned from any position he may claim to hold or claim he should hold as an
officer or director of Biomoda;




(c)
transferred all shares of Biomoda stock currently held by Robins or by any
family member or other person, corporation or entity in which he has any
control, which consisted of 747,000 shares; and




(d)
agreed to not ever acquire any Biomoda shares in the future.




In
addition, on April 22, 2009, our President and current board member, John J.
Cousins, resigned as a director and officer of ADOT, and Robins was appointed
Chairman, Chief Executive Officer and President of ADOT.  Pursuant to
the Settlement, ADOT also transferred 1,231,575 Biomoda shares to the Company
and released Biomoda from all ADOT claims, including claims related to an
alleged promissory note dated May 1, 2002 in the amount of $1,030,748, which was
disputed and previously written off by Biomoda as of the year ended December 31,
2008.




The
pending federal lawsuit against Robins will be dismissed with
prejudice.




The two
remaining Defendants in the Federal RICO lawsuit are Alvin Robins (brother of
Leslie Robins) and John Kearns (attorney for Leslie Robins). A default judgment
has been rendered by the Court against Alvin Robins and John Kearns on all
counts alleged and in favor of Biomoda and ADOT. The damages portion of the
judgment will be heard at the Court's convenience. Both ADOT and Biomoda have
alleged in court documents damages in the tens of millions of dollars. The
remaining two defendants have yet to file a responsive pleading before the
Court. Biomoda intends to aggressively pursue collection of damages against the
remaining defendants.




Item2.  CHANGES IN SECURITIES - None




Item
3.  DEFAULTS UPON SENIOR SECURITIES - None




Item
4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS -
None




Item
5.  OTHER INFORMATION - None




Item
6.  EXHIBITS





31  Certification of
Principal Executive Officer pursuant to Securities Exchange Act rules 13a-15 and
15d-15(c) as adopted pursuant to section 302 of the Sarbanes-Oxley act of
2002.





32  Certification of
Principal Executive and Accounting Officer pursuant to 18 U.S.C. section 1350,
as adopted pursuant to section 906 of the Sarbanes-Oxley act of
2002.











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SIGNATURES








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








Dated:
May 14, 2009





BIOMODA,
INC.





By: /s/ John J.
Cousins


John J.
Cousins


President


(Principal
Executive and Accounting Officer)









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