##### Table of Contents



U.S. SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-QSB
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2007
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number 0-27689
 AMDL, Inc.
 (Exact name of small business issuer as specified in its charter)
 Delaware
    
    33-0413161(State or other jurisdiction
    
    (IRS Employerof incorporation or organization)
    
    Identification No.)
 2492 Walnut Avenue, Suite 100, Tustin, California 92780
 (714) 505-4460
 Not Applicable
  o þ
  þ o




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##### 



PAGEPART I  FINANCIAL INFORMATIONItem 1. Financial Statements
    
    
    3Unaudited Condensed Consolidated Balance Sheet at June 30, 2007
    
    
    3Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2007 and 2006
    
    
    4Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2007 and 2006
    
    
    5Notes to Condensed Consolidated Financial Statements (unaudited)
    
    
    6Item 2. Managements Discussion and Analysis or Plan of Operation
    
    
    24Item 3A. Controls and Procedures
    
    
    34PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    35Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    35Item 3. Defaults Upon Senior Securities
    
    
    36Item 4. Submission of Matters to a Vote of Security Holders
    
    
    36Item 5. Other Information
    
    
    36Item 6. Exhibits
    
    
    36SIGNATURES
    
    
    37EXHIBIT INDEX
    
    
    38EXHIBIT 10.44EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2
   2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 AMDL, INC.
 
 CONDENSED CONSOLIDATED BALANCE SHEET
 (Unaudited)
 June 30,2007ASSETSCurrent assets:Cash and cash equivalents
    
    $
    3,258,515Accounts receivable, net
    
    
    1,338,599Inventories
    
    
    581,140Prepaid consulting
    
    
    603,538Other prepaid expenses and current assets
    
    
    2,181,378Total current assets
    
    
    7,963,170Property and equipment, net
    
    
    9,243,704Intangible assets, net
    
    
    3,815,823Other assets
    
    
    2,130,724Total assets
    
    $
    23,153,421LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable and accrued expenses
    
    $
    1,363,415Value added and other taxes payable
    
    
    170,318Deferred revenue
    
    
    314,762Current portion of notes payable
    
    
    3,203,481Total current liabilities
    
    
    5,051,976Notes payable, net of current portion
    
    
    1,864,967Total liabilities
    
    
    6,916,943Stockholders equity:Preferred stock, $0.001 par value; 25,000,000
shares authorized; no shares issued and
outstanding
    
    
    Common stock, $0.001 par value; 100,000,000
shares authorized; 12,579,317 shares issued and
12,479,317 shares outstanding
    
    
    12,479Additional paid-in capital
    
    
    54,087,245Accumulated other comprehensive gain
    
    
    321,608Accumulated deficit
    
    
    (38,184,854
    )Total stockholders equity
    
    
    16,236,478$
    23,153,421
  3




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##### Table of Contents



AMDL, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
 (Unaudited)
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Net revenues
    
    $
    2,413,501
    
    
    $
    17,725
    
    
    $
    3,837,680
    
    
    $
    33,100Cost of sales
    
    
    1,262,049
    
    
    
    6,717
    
    
    
    1,959,359
    
    
    
    12,489Gross profit
    
    
    1,151,452
    
    
    
    11,008
    
    
    
    1,878,321
    
    
    
    20,611Operating expenses:Research and development
    
    
    1,351
    
    
    
    71,597
    
    
    
    13,127
    
    
    
    119,245General and administrative
    
    
    3,244,910
    
    
    
    639,183
    
    
    
    5,240,545
    
    
    
    1,521,053Total
operating expenses
    
    
    3,246,261
    
    
    
    710,780
    
    
    
    5,253,672
    
    
    
    1,640,298Loss from operations
    
    
    (2,094,809
    )
    
    
    (699,772
    )
    
    
    (3,375,351
    )
    
    
    (1,619,687
    )Other income (expense):Loss on the disposal of fixed assets
    
    
    (2,300
    )
    
    
    
    
    
    
    (2,300
    )
    
    
    Interest income
    
    
    1,751
    
    
    
    6,698
    
    
    
    5,588
    
    
    
    14,700Interest expense
    
    
    (98,107
    )
    
    
    
    
    
    
    (188,964
    )
    
    
    Total other income (expense), net
    
    
    (98,656
    )
    
    
    6,698
    
    
    
    (185,676
    )
    
    
    14,700Loss before provision for income taxes
    
    
    (2,193,465
    )
    
    
    (693,074
    )
    
    
    (3,561,027
    )
    
    
    (1,604,987
    )Provision for income taxes
    
    
    70,840
    
    
    
    
    
    
    
    88,684
    
    
    
    Net loss
    
    
    (2,264,305
    )
    
    
    (693,074
    )
    
    
    (3,649,711
    )
    
    
    (1,604,987
    )Other comprehensive loss:Foreign currency translation gain
    
    
    326,733
    
    
    
    
    
    
    
    343,336
    
    
    
    Comprehensive loss
    
    $
    (1,937,572
    )
    
    $
    (693,074
    )
    
    $
    (3,306,375
    )
    
    $
    (1,604,987
    )Basic and diluted loss per common share
    
    $
    (0.17
    )
    
    $
    (0.11
    )
    
    $
    (0.31
    )
    
    $
    (0.26
    )Weighted average common shares outstanding  basic and diluted
    
    
    11,415,045
    
    
    
    6,590,228
    
    
    
    10,751,728
    
    
    
    6,063,086
  4




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AMDL, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)
 Six Months EndedJune 30, 2007
    
    
    June 30, 2006CASH FLOWS FROM OPERATING ACTIVITIES:Net loss
    
    $
    (3,649,711
    )
    
    $
    (1,604,987
    )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation and amortization
    
    
    631,020
    
    
    
    54,325Loss on
disposal of equipment
    
    
    2,300
    
    
    
    Fair market value of common stock, warrants and options issued to
consultants for services
    
    
    1,190,488
    
    
    
    292,857Fair market value of options granted to employees and directors for services
    
    
    1,129,600
    
    
    
    240,300Changes in operating assets and liabilities:Accounts receivable
    
    
    320,827
    
    
    
    Inventories
    
    
    159,518
    
    
    
    504Prepaid
consulting
    
    
    (647,966
    )Prepaid expenses and other current assets
    
    
    (1,471,484
    )
    
    
    (228,996
    )Other assets
    
    
    (479,289
    )
    
    
    Accounts payable and accrued expenses
    
    
    (546,739
    )
    
    
    214,029Deferred revenue
    
    
    314,762
    
    
    
    Value added
and other taxes payable
    
    
    170,318
    
    
    
    Net cash used in operating activities
    
    
    (2,876,356
    )
    
    
    (1,031,968
    )CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property and equipment
    
    
    (49,088
    )
    
    
    (2,797
    )Net cash used in investing activities
    
    
    (49,088
    )
    
    
    (2,797
    )CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from issuance of common stock, net of
offering costs of $756,674 in 2007
and $354,571 in 2006
    
    
    4,572,837
    
    
    
    1,457,924Proceeds from exercise of options
    
    
    31,200
    
    
    
    Proceeds from exercise of warrants
    
    
    
    
    
    
    42,241Net cash provided by financing activities
    
    
    4,604,037
    
    
    
    1,500,165Effect of
exchange rates on cash and cash equivalents
    
    
    (5,051
    )
    
    
    Net change in cash and cash equivalents
    
    
    1,673,542
    
    
    
    465,400Cash and
cash equivalents, beginning of the period
    
    
    1,584,973
    
    
    
    1,398,092Cash and
cash equivalents, end of period
    
    $
    3,258,515
    
    
    $
    1,863,492SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:Cash paid during the period for interest
    
    $
    183,765
    
    
    $
    Cash paid during the period for income taxes
    
    $
    
    
    
    $
    SUPPLEMENTAL
DISCLOSURE OF NON-CASH ACTIVITIES:Value of
common stock and warrants recorded as prepaid consulting
    
    $
    1,075,760
    
    
    
    Increase in
debt and fixed assets due to purchase price adjustment
    
    $
    214,617
    
    
    
    
  5




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##### Table of Contents



AMDL, INC.
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
 For the Six Months Ended June 30, 2007 and 2006
 NOTE 1  MANAGEMENTS REPRESENTATION
   NOTE 2  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 AMDL, Inc.
 ®
 Acquisition of JPI
   ®
 6




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AMDL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
For the Six Months Ended June 30, 2007 and 2006
 ®
 Business
Combinations,
  Fair ValuePurchase consideration:Transaction costs, primarily legal and accounting
    
    $
    592,896Estimated fair value of common stock issued
    
    
    7,929,000Estimated fair value of options to purchase common stock
    
    
    595,000$
    9,116,896Allocation:Tangible assets acquired:Cash
    
    $
    197,140Accounts receivable
    
    
    1,440,680Inventories
    
    
    550,623Property and equipment
    
    
    9,268,300Land use rights
    
    
    1,200,769Prepayments, primarily product licenses
    
    
    1,292,531Identifiable intangible assets acquired:Non-compete agreements
    
    
    382,389Customer relationships
    
    
    254,926Trade name and logo
    
    
    637,317Total assets acquired
    
    
    15,224,675Liabilities assumed:Current liabilities
    
    
    (1,440,373
    )Current and long-term debt
    
    
    (4,667,406
    )Total liabilities assumed
    
    
    (6,107,779
    )$
    9,116,896
   7




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##### Table of Contents



AMDL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
For the Six Months Ended June 30, 2007 and 2006
  For the Six MonthsEndedJune 30, 2006Net revenues
    
    $
    3,128,603Net loss
    
    $
    (866,722
    )Basic and diluted loss per share
    
    $
    (0.10
    )Weighted average common shares outstanding  basic and diluted
    
    
    8,706,086
 Going Concern
 ® ®
 ®
     8




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##### Table of Contents



AMDL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
For the Six Months Ended June 30, 2007 and 2006
    Reverse Stock Split
  Principles of Consolidation
  9




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AMDL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
For the Six Months Ended June 30, 2007 and 2006
 Revenue Recognition
  Revenue
Recognition in Financial Statements,
 Wholesale
Sales
  Direct
Distribution
   How Taxes Collected from
Customers and Remitted to Governmental Authorities Should Be Presented in the Income Statement
(That Is, Gross Versus Net Presentation)
 Accounting for Shipping and Handling Revenue, Fees and Costs
 Accounting for Shipping and Handling Fees and Costs.
 Other Comprehensive Income and Foreign Currency Translation
 Reporting Comprehensive Income
 10




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AMDL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
For the Six Months Ended June 30, 2007 and 2006
   Research and Development
  Cash Equivalents
  Inventories
  Property and Equipment
  Office equipment
    
    3 to 10 yearsBuildings and improvements
    
    
    5 to 30 yearsMachinery and equipment, including lab equipment
    
    
    5 to 15 years
  Intangible Assets
  Intellectual Property
  11




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AMDL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
For the Six Months Ended June 30, 2007 and 2006
 Land Use Rights
  Non-Compete Agreements
  Customer Relationships
  Trade Name and Logo
  Impairment of Long-Lived Assets
 Accounting for the Impairment or Disposal of Long-Lived Assets
  
    
    significant under performance relative to expected historical or projected future operating results;
    
    market projections for cancer research technology;
    
    its ability to obtain patents, including continuation patents, on technology;
    
    significant changes in its strategic business objectives and utilization of the assets;
    
    significant negative industry or economic trends, including legal factors;
    
    potential for strategic partnerships for the development of its patented technology;
    
    changing or implementation of rules regarding manufacture or sale of pharmaceuticals in China; and
    
    ability to maintain Good Manufacturing Process (GMP) certifications.
  12




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AMDL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
For the Six Months Ended June 30, 2007 and 2006
   Accounting for Stock-Based Compensation
  Accounting for Equity
Instruments that are Issued to Other than Employees for Acquiring, or in Conjunction with Selling
Goods or Services, Accounting Recognition for Certain Transactions
Involving Equity Instruments Granted to Other than Employees.
   Share-Based Payment Accounting for Stock Issued to Employees,
  13




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AMDL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
For the Six Months Ended June 30, 2007 and 2006
 Accounting For Stock-Based
Compensation
  Summary of Assumptions and Activity
   2007
    
    2006Dividend yield
    
    
    
    
    
    
    Expected volatility
    
    
    353
    %
    
    
    108
    %Risk-free interest rate
    
    
    4.92
    %
    
    
    4.76
    %Expected term
    
    5.0 year
    
    1.0 year
   Weighted
    
    
    RemainingAverage
    
    
    Contractual
    
    
    AggregateNumber
    
    
    Exercise
    
    
    Term
    
    
    Intrinsicof Shares
    
    
    Price
    
    
    (Years)
    
    
    ValueOptions outstanding at January 1, 2007
    
    
    1,562,637
    
    
    $
    4.35
    
    
    
    3.35Granted
    
    
    320,000
    
    
    $
    4.06Expired/forfeited
    
    
    (245,402
    )
    
    $
    5.13Exercised
    
    
    (13,000
    )
    
    $
    2.40Options outstanding and exercisable at June 30, 2007
    
    
    1,624,235
    
    
    $
    4.19
    
    
    
    3.20
    
    
    $
    207,990
  14




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AMDL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
For the Six Months Ended June 30, 2007 and 2006
   Basic and Diluted Loss Per Share
  Income Taxes
 Accounting for Income Taxes.
  Value Added Tax Payable
  Use of Estimates
  Risks and Uncertainties
 ®
 ® ®
 15




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AMDL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
For the Six Months Ended June 30, 2007 and 2006
 ® ® ® ® ®
 ®
  Operations in China
    Concentration of Risk
  Customers
  16




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AMDL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
For the Six Months Ended June 30, 2007 and 2006
    Fair Value of Financial Instruments
 Disclosures About Fair Value of
Financial Instruments,
 Recent Accounting Pronouncements
 Accounting for Uncertainty in Income Taxes  an
interpretation of FASB Statement No. 109
 Fair Value Measurements
 The Fair Value Option for Financial Assets and
Financial Liabilities
 17




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AMDL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
For the Six Months Ended June 30, 2007 and 2006


NOTE 3  SEGMENT REPORTING


Disclosures about Segments of an Enterprise and Related
Information.




China
    
    U.S.
    
    TotalNet revenue
    
    $
    3,777,080
    
    
    $
    60,600
    
    
    $
    3,837,680Gross profit
    
    $
    1,825,695
    
    
    $
    52,626
    
    
    $
    1,878,321Depreciation
    
    $
    468,807
    
    
    $
    3,631
    
    
    $
    472,438Amortization
    
    $
    108,582
    
    
    $
    50,000
    
    
    $
    158,582Interest expense
    
    $
    188,964
    
    
    $
    
    
    
    $
    188,964Net income (loss)
    
    $
    506,339
    
    
    $
    (4,156,050
    )
    
    $
    (3,649,711
    )Identifiable assets
    
    $
    17,226,233
    
    
    $
    5,927,188
    
    
    $
    23,153,421Capital expenditures
    
    $
    36,757
    
    
    $
    12,331
    
    
    $
    49,088




NOTE 4
 OTHER PREPAID EXPENSES AND CURRENT ASSETS




Consulting fees to business agents
    
    $
    2,172,197Advance to related parties
    
    
    9,181$
    2,181,378


NOTE 5  INTANGIBLE ASSETS




Weighted-AverageGross


Adjustment


Adjusted








AmortizationCarrying


due to currency


Carrying


Accumulated





PeriodValue


translation


Value


Amortization


Net


(in years)Assets subject to amortization:Intellectual property

$
2,000,000


$



$
2,000,000


$
(591,667
)

$
1,408,333



20Land use rights


1,200,769



87,675



1,288,444



(30,615
)


1,257,829



33Non-compete agreements


382,389







382,389



(57,360
)


325,029



5Customer relationships


254,926







254,926



(27,315
)


227,611



7Trade name and logo


637,317







637,317



(40,296
)


597,021



10$
4,475,401


$
87,675


$
4,563,076


$
(747,253
)

$
3,815,823  18




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AMDL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
For the Six Months Ended June 30, 2007 and 2006
 NOTE 6  ACCOUNTS PAYABLE AND ACCRUED EXPENSES
  Accounts payable
    
    $
    1,003,861Accrued payroll and related expenses
    
    
    183,109Other liabilities and accrued expenses
    
    
    176,445$
    1,363,415
 NOTE 7
 EQUITY TRANSACTIONS
        19




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AMDL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
For the Six Months Ended June 30, 2007 and 2006
      NOTE 8
 NOTES PAYABLE
    2007
    
    $
    3,203,4812008
    
    
    1,864,9675,068,448Less current portion
    
    
    (3,203,481
    )$
    1,864,967
 20




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AMDL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
For the Six Months Ended June 30, 2007 and 2006
   NOTE 9  COMMITMENTS AND CONTINGENCIES
 Operating Leases
   Litigation
     21




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AMDL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
For the Six Months Ended June 30, 2007 and 2006
  Suspension of Product Sales
   Consulting Agreements
   
    
    commission of 2% on the amount of goods or services sold to the distributor if total
sales delivered to the distributor exceeds $63,000 in any single month;
    
    additional commission of 1% if total sales delivered to the distributor exceeds $189,000
in any single month;
    
    Special bonus of 2% on total amount of goods delivered exceeds $251,000 in any single month; and
    
    An additional allowance progressively increased with the number of distributors successfully solicited.
   22




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AMDL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
For the Six Months Ended June 30, 2007 and 2006
 Indemnities and Guarantees
  NOTE 10
 SUBSEQUENT EVENTS
    23




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Item 2. Managements Discussion and Analysis or Plan of Operation.
 Forward Looking Statements
  Overview
  ®
  Acquisition of Jade Pharmaceuticals Inc.
  JPIS Sales and Distribution Activities
  Region
    
    PercentageCentral
    
    
    26
    %South East
    
    
    22
    %North East
    
    
    20
    %Eastern
    
    
    23
    %North
    
    
    8
    %South West
    
    
    1
    %
  24




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##### Table of Contents




    
    JPI signed a Distribution and Agency agreement with Anihui Huayuan Medical Co., Ltd that
involves the distribution of products manufactured by JJB and YYB. The areas covered by
the agreement include the provinces and municipal cities of Anhui, Shandong, Hebei, Shanxi,
Beijing and Tianjing. This agreement is for a one year period commencing May 2007 to May
2008. In addition, JPI signed a Distribution and Agency agreement with Hunan Double-Crane
Pharmaceutical Co., Ltd for the distribution of Ondansetron Injection, Chondroitin Sulfate
Injhection, GuYanLin, Domperidon Tablets for a one year period commencing in May 2007 for
the provinces and municipal cities of Hunan, Hubei, Sichuan, Chongging, Guangxi, Yunnan and
Guizhou.
    
    JJB signed an agreement with YunNan KunMing YuSi Pharmaceutical Co. Ltd to distribute
Levofloxacin. This distribution agreement commences in July 2007
for a term of two years.
    
    JJB signed a Distribution and Agency Agreement with Shanghai SiFul Medicine Co., Ltd.
This one year renewable agreement covers primarily the city of Shanghai. This agreement
covers twelve various products including Ondansetron Injectibles, Domperidon Tablet,
Chondroitin Sulfate injectibles, GuyanLin Compounds, Bezoic Acid/Camphor Solutions,
Levofloxacin and Lactate Injectibles.
  
    
    Access to the fastest growing pharmaceutical and consumer market in the world, China;
    
    A platform to in-license North American drugs for manufacture and sale in China and Asia;
    
    A program for DR-70(R) and CIT clinical trials, sales, and marketing into China and Asia;
    
    New opportunities for cancer-related product development in China.
 25




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The Current Economic and Market Environment
  Research and Development
 ®
    
    
    Increase in inventory necessary for anticipated demand for product;
    
    Renovation of current manufacturing facilities to accommodate new products;
    
    Purchase of new machinery to increase capacity for existing products as well as
purchase of machinery to facilitate the manufacture of new products; and
    
    Increase the distribution network for current as well as new products.
  Liquidity and Capital Resources
  26




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® ®
 ® ®
  Critical Accounting Policies
  27




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##### Table of Contents



Allowance for Doubtful Accounts
 Inventories
  Sales Allowances.
 Valuation of Intangible Assets Accounting for the Impairment or Disposal of Long-Lived Assets
 
    
    significant under performance relative to expected historical or projected future operating results;
    
    market projections for cancer research technology;
    
    its ability to obtain patents, including continuation patents, on technology;
    
    significant changes in its strategic business objectives and utilization of the assets;
    
    significant negative industry or economic trends, including legal factors;
    
    potential for strategic partnerships for the development of its patented technology;
    
    changing or implementation of rules regarding manufacture or sale of pharmaceuticals in China; and
    
    ability to maintain Good Manufacturing Process (GMP) certifications.
 28
    Table of Contents  Revenue Recognition.
 Revenue
Recognition in Financial Statements
 Wholesale
Sales.
 Direct
Distribution.
  How Taxes Collected from
Customers and Remitted to Governmental Authorities Should Be Presented in the Income Statement
(That Is, Gross Versus Net Presentation)
 Deferred Taxes
 Litigation Accounting for
Contingencies
 Stock-Based Compensation.
 Accounting for Equity Instruments that are Issued to Other than Employees for Acquiring, or
in Conjunction with Selling Goods or Services, Accounting Recognition for
Certain Transactions Involving Equity Instruments Granted to Other than Employees.
 29
    Table of Contents     Share-Based Payment Accounting for Stock Issued to Employees
  Accounting for Stock-Based Compensation
 Results of Operations
 Three Months Ended June 30, 2007 Compared to Three Months Ended June 30, 2006
  Net Revenues
  ® ® ® ®
 30    Table of Contents  ® ® ®
    Research and Development. ®
 General
and Administrative Expenses
 
    
    Additional consulting fees paid to various investor relations firms;
    
    Increase in salaries and wages, due in part to the inclusion of the fair value of
options granted as computed under the Black-Scholes model.
    
    Increase in directors fees, due in part to the inclusion of
the fair value of options granted as
computed under the Black-Scholes model.
 Six Months Ended June 30, 2007 Compared to Six Months Ended June 30, 2006
  Net Revenues
 AMDL-U.S
 ® ® ® ®
 . ®
 31
    Table of Contents  ®
  JPI-China
     Name
    
    Percent of SalesDomperidone
    
    
    40.50
    %Gu Yan Ling
    
    
    10.60
    %Diavitamin, Calcium Hydrogen Phosphate and Lysince Tablets
    
    
    8.60
    %Human Placenta Tissue Hydrolysis
    
    
    3.80
    %Compound Benzoic Acid, Camphor and Iodine Solution
    
    
    2.90
    %66.40
    %
  Gross Profit.
 AMDL-U.S.
 ®
 JPI-China
  32
    Table of Contents  Research and Development.
 AMDL-U.S.
 ® ®
 JPI-China
  General and Administrative Expenses
 AMDL-U.S.
  Six monthsended June 30,2007Investor relations (including value of warrants/options)
    
    $
    1,315,479Salary and wages (including value of options)
    
    $
    1,429,337Directors fees (including value of options)
    
    $
    586,215Consulting fees
    
    $
    159,126Accounting and other professional fees
    
    $
    183,695Legal
    
    $
    160,887
 JPI-China
   33
    Table of Contents  Net Loss.
 
 Item 3A. Controls and Procedures.
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Controls
  34
    Table of Contents  PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
      35
    Table of Contents  Item 3. Defaults Upon Senior Securities.
  
 Item 4. Submission of Matters to a Vote of Security Holders.
  
 Item 5. Other Information.
  ®
 
 Item 6. Exhibits.
 (a)
    
    Exhibits
 10.44
    
    Amendment No. 1 to Escrow Agreement dated August 10, 2007 between the Company and Jade
Capital Group Limited, et al.31.1
    
    Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer31.2
    
    Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer32.1
    
    Certification Pursuant to 18 U.S.C. § 1350 of Chief Executive Officer32.2
    
    Certification Pursuant to 18 U.S.C. § 1350 of Chief Financial Officer
 36
    Table of Contents  SIGNATURES
  AMDL, Inc.Dated: August 20, 2007
    By:
    /s/ Gary L. DreherGARY L. DREHER, Chief Executive Officer 37
    Table of Contents  Exhibit No.
    
    Description10.44
    
    Amendment No. 1 to Escrow Agreement dated August 10, 2007 between
the Company and Jade Capital Group Limited, et al.31.1
    
    Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer31.2
    
    Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer32.1
    
    Certification Pursuant to 18 U.S.C. §1350 of Chief Executive Officer32.2
    
    Certification Pursuant to 18 U.S.C. §1350 of Chief Financial Officer
 38