SIGNATURES
THE
COMPANY HAS NOT MODIFIED OR UPDATED DISCLOSURES PRESENTED IN THE ORIGINAL FILING, EXCEPT AS INDICATED ABOVE. ACCORDINGLY, THIS
AMENDMENT DOES NOT REFLECT EVENTS OCCURRING AFTER THE DATE OF THE ORIGINAL FILING AND DOES NOT MODIFY OR UPDATE THOSE DISCLOSURES
AFFECTED BY SUBSEQUENT EVENTS, EXCEPT AS SPECIFICALLY REFERENCED HEREIN. INFORMATION NOT AFFECTED BY THE ABOVE AMENDMENTS IS UNCHANGED
AND REFLECTS THE DISCLOSURES MADE AT THE TIME OF THE ORIGINAL FILING.
Item
7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
As
of September 30, 2015 we had Cash on Hand of $76,355 and as of September 30, 2014 we had Cash on Hand of $ 502.
The
increase in Cash on Hand of approximately 15110% is primarily attributable to:
Payment
by Starcity Capital LLC of $52,500 as consideration for that $300,000 convertible promissory note issued to Starcity Capital LLC
during the three months ended March 31, 2015
$18,521
lent to Bio Matrix Scientific Group, Inc. by David Koos, the Company’s Chairman and Chief Executive Officer during the nine
months ended June 30, 2015
$25,650
lent to Regen Biopharma, Inc. by David Koos, the Company’s Chairman and Chief Executive Officer during the nine months ended
June 30, 2015.
$54,000
lent to the Company by Noteholders during the twelve months ended September 30, 2015
$283,000
lent to Regen Biopharma, Inc. by Noteholders during the twelve months ended September 30, 2015.
$70,000
received by the Company as a result of sale by Bio Matrix Scientific Group, Inc of Bio Matrix Scientific Group, Inc.’s owned
common stock of Regen Biopharma, Inc. during the six months ended March 31, 2015.
$775,000
paid to Regen Biopharma, Inc. as a result of issuance of convertible notes during the six months ended March 31, 2015
$90,000
paid to Regen Biopharma, Inc as a result of issuance of convertible notes during the three months ended June 30, 2015
$50,000
paid to Regen Biopharma, Inc. in consideration of sale of equity securities during the quarter ended September 30, 2015
Offset
By:
$66,300
of principal indebtedness repaid to the Company’s Chairman and Chief Executive Officer by Bio Matrix Scientific Group, Inc.
during the twelve months ended September 30, 2015.
$500
of principal indebtedness repaid to third party Noteholders during the twelve months ended September 30, 2015.
Expenses
incurred by the Company in the operation of its business and payment of its obligations during the twelve months ended September
30, 2015.
Rental
payments paid to Entest Biomedical, Inc. by Regen during the twelve months ended September 30, 2015.
$1,629
loaned to Entest Biomedical, Inc. by the Company during the twelve months ended September 30, 2015.
Expenses
incurred by Regen in the operation of its business during the twelve months ended September 30, 2015.
As
of September 30, 2015 we had Prepaid Expenses of $25,000 and as of September 30, 2014 we had Prepaid Expenses of $15,000.
The
increase in Prepaid Expenses of approximately 67% is attributable to $10,000 of salary prepaid by Regen to Thomas Ichim, Regen’s
then Chief Scientific Officer.
As
of September 30, 2015, we had Notes Receivable of $ 12,051 and as of September 30, 2014 we had Notes Receivable of $10,422.
The
increase in Notes Receivable of approximately 16 % is attributable to overpayment of $1,629 of rental charges to Entest Biomedical,
Inc. by Regen Biopharma, Inc. which the parties have agreed shall be due and payable to Regen Biopharma, Inc by Entest Biomedical,
Inc and which shall bear simple interest at 10% per annum.
As
of September 30, 2015 we had Accrued Interest Receivable of $1,381 and as of September 30, 2014 we had Accrued Interest Receivable
of $233.
The
increase in of Accrued Interest Receivable of approximately 492% is attributable to interest accrued but unpaid during the twelve
months ended September 30 , 2015 resulting from amounts due to Regen Biopharma, Inc. by Entest Bio-Medical, Inc.
As
of September 30, 2015 we had Securities Available for Sale of $159,720 and as of September 30, 2014 we had Securities Available
for Sale of $3,000.
The
increase in Securities Available for Sale of 5,224% is primarily attributable to 8,000,000 of the common shares of Entest Biomedical,
Inc. issued on behalf of Zander Therapeutics, Inc. (“Zander”) in satisfaction of one hundred thousand US dollars ($100,000)
to be paid to Regen by Zander as a license initiation fee pursuant to an agreement by and between Zander and the Company.
As
of September 30, 2015 we had Bank Overdraft of $0 and as of September 30, 2014 we had Bank Overdraft of $6,137.
The
decrease in Bank Overdraft of 100% is attributable to loans made to Regen Biopharma, Inc. during the quarter ended December 31,
2014.
As
of September 30, 2015 we had Accounts Payable of $167,977 and as of September 30, 2014 we had Accounts Payable of 158,492.
The
increase in Accounts Payable of approximately 6% is primarily attributable to increases in outstanding obligations of the Company
and Regen incurred in the course of business.
As
of September 30, 2015 we had Notes Payable of $400,336 and as of September 30, 2014 we had Notes Payable of $379,233.
The
increase in Notes Payable of approximately 6% is primarily attributable to:
$18,521
lent to Bio Matrix Scientific Group, Inc. by David Koos, the Company’s Chairman and Chief Executive Officer during the nine
months ended June 30, 2015
$25,650
lent to Regen Biopharma, Inc. by David Koos, the Company’s Chairman and Chief Executive Officer during the nine months ended
June 30, 2015.
$54,000
lent to the Company by Noteholders during the twelve months ended September 30, 2015
$283,000
lent to Regen Biopharma, Inc. by Noteholders during the twelve months ended September 30, 2015.
Offset
by:
$105,768
of principal indebtedness of Regen Biopharma, Inc. satisfied through the issuance of convertible notes by Regen Biopharma, Inc
to the creditors during the three months ended March 31, 2015.
$66,300
of principal indebtedness repaid to the Company’s Chairman and Chief Executive Officer by Bio Matrix Scientific Group, Inc.
during the twelve months ended September 30, 2015.
$500
of principal indebtedness repaid to third party Noteholders during the twelve months ended September 30, 2015.
The
satisfaction of $157,500 of principal indebtedness owed by the Company through the issuance of the Company’s equity
securities.
The
satisfaction of $30,000 of principal indebtedness owed by Regen through the issuance of Regen’s equity securities.
As
of September 30, 2015 we had Convertible Notes Payable Net of Unamortized Discount of $231,507 and as of September 30, 2014 we
had Convertible Notes Payable Net of Unamortized Discount of $97,701.
The
increase in Convertible Notes Payable Net of Unamortized Discount of approximately 137% is attributable to:
The
issuance by Bio Matrix Scientific Group, Inc of a $300,000 convertible note during the quarter ended March 31, 2015 on which the
unamortized discount as of September 30, 2015 is 149,194.
Offset
by:
The
issuance by Bio Matrix Scientific Group, Inc during the quarter ended March 31, 2015 of 103,030,303 of its common shares in satisfaction
of $17,000 of convertible indebtedness.
As
of September 30, 2015 we had Accrued Payroll of $738,095 and as of September 30, 2014 we had Accrued Payroll of $587,094.
The
increase in Accrued Payroll of approximately 26% is primarily attributable to:
The
addition of $35,000 of salaries accrued but unpaid due to David Koos, the Company’s Chief Executive Officer, during the
three months ended December 31, 2014
The
addition of $50,000 of salaries accrued but unpaid due to David Koos, the Company’s Chief Executive Officer, during the
three months ended March 31, 2015
The
addition of $15,000 of salaries accrued but unpaid due to David Koos, the Company’s Chief Executive Officer, during the
three months ended June 30, 2015
$6,750
of salary accrued during the quarter ended March 31, 2015 but not yet paid due to the Chief Financial Officer of Regen Biopharma,
Inc. and $751 of salary accrued during the quarter ended March 31, 2015 but not yet paid due to an employee of Regen Biopharma,
Inc.
The
addition of $45,000 of salaries accrued but unpaid due to David Koos, the Company’s Chief Executive Officer, during the
three months ended September 30, 2015
$13,500
of salary accrued during the quarter ended September 30, 2015 but not yet paid due to the Chief Financial Officer of Regen Biopharma,
Inc.
Offset
By:
The
payment of $15,000 of salary previously accrued to Thomas Ichim, the Chief Scientific Officer of Regen Biopharma, Inc., during
the three months ended December 31, 2014.
As
of September 30, 2015 we had Accrued Interest of $324,750 and as of September 30, 2014 we had Accrued Interest of $271,495.
This
increase of approximately 20% is primarily attributable to interest on Notes payable and Convertible Notes payable accrued but
unpaid over the year ended September 30, 2015.
As
of September 30, 2015 we had Accrued Payroll Tax of $44,485 and as of September 30, 2014 we had Accrued Payroll Tax of $51,117.
This
decrease of approximately 13% is primarily attributable to payment by the Company and Regen of employer tax obligations
incurred but unpaid.
As
of September 30, 2015 we had Accrued Rent of $10,000 and as of September 30, 2014 we had Accrued Rent of $0.
The
increase in Accrued Rent is attributable to rental expense incurred by Regen but not paid for the months of August 2015 and September
2015.
NOTE
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Bio-Matrix
Scientific Group, Inc. (“Company”) was organized October 6, 1998, under the laws of the State of Delaware as Tasco
International, Inc.
From
October 6, 1998 to June 3, 2006 its activities have been limited to capital formation, organization, and development of its business
plan to provide production of visual content and other digital media, including still media, 360-degree images, video, animation
and audio for the Internet.
On
July 3, 2006 the Company abandoned its efforts in the field of digital media production when it acquired 100% of the share capital
of Bio-Matrix Scientific Group, Inc., a Nevada corporation, (“BMSG”) for consideration consisting of 10,000,000 shares
of the common stock of the Company and the cancellation of 10,000,000 shares of the Company owned and held by John Lauring.
As
a result of this transaction, the former stockholder of BMSG held approximately 80% of the voting capital stock of the Company
immediately after the transaction. For financial accounting purposes, this acquisition was a reverse acquisition of the Company
by BMSG under the purchase method of accounting, and was treated as a recapitalization with BMSG as the acquirer. Accordingly,
the financial statements have been prepared to give retroactive effect to August 2, 2005 (date of inception), of the reverse acquisition
completed on July 3, 2006, and represent the operations of BMSG.
Through
its controlled subsidiary, Regen BioPharma, Inc., the Company intends to engage primarily in the development of regenerative medical
applications which we intend to license from other entities up to the point of successful completion of Phase I and or Phase II
clinical trials after which we would either attempt to sell or license those developed applications or, alternatively, advance
the application further to Phase III clinical trials The Company holds 18.3% of the equity and 70% of the voting power of Regen
BioPharma, Inc.
A.
BASIS OF ACCOUNTING
The
financial statements have been prepared using the basis of accounting generally accepted in the United States of America. Under
this basis of accounting, revenues are recorded as earned and expenses are recorded at the time liabilities are incurred. The
Company has adopted a September 30 year-end.
B.
PRINCIPLES OF CONSOLIDATION
The
consolidated financial statements include the accounts of Bio-Matrix Scientific Group, inc., a Delaware corporation, Bio Matrix
Scientific Group, Inc, a Nevada corporation and a wholly owned subsidiary (“BMSG”), Regen BioPharma, Inc., a Nevada
corporation and controlled subsidiary (Regen) and Entest BioMedical, Inc., (“Entest”), a Nevada corporation which
was a majority owned subsidiary up to February 3, 2011. Significant inter-company transactions have been eliminated.
C.
USE OF ESTIMATES
The
preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. All estimates
are of a normal, recurring nature and are required for the fair presentation of the financial statements. Actual results could
differ from those estimates.
D.
CASH EQUIVALENTS
The
Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.
E.
PROPERTY AND EQUIPMENT
Property
and equipment are recorded at cost. Maintenance and repairs are expensed in the year in which they are incurred. Expenditures
that enhance the value of property and equipment are capitalized.
F.
FAIR VALUE OF FINANCIAL INSTRUMENTS
Fair
value is the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal
or most advantageous market in an orderly transaction between market participants on the measurement date. A fair value
hierarchy requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels
of inputs required by the standard that the Company uses to measure fair value:
Level
1: Quoted prices in active markets for identical assets or liabilities
Level
2: Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in
markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially
the full term of the related assets or liabilities.
Level
3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of
the assets or liabilities.
The
Company’s financial instruments as of September 30, 2015 consisted of Securities Available for Sale consisting of 8066667
shares of Entest Biomedical, Inc and a Note Receivable from Entest Biomedical, Inc. for $12,051 . The fair value of Securities
Available for sale as of September 30, 2015 were valued according to the Level 1 input. The carrying amount of the financial instruments
is equal to the fair value as determined by the Company. The fair value of the Note Receivable was valued according to Level 3
input.
G.
INCOME TAXES
The
Company accounts for income taxes using the liability method prescribed by ASC 740, “Income Taxes.” Under this method,
deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets
and liabilities using enacted tax rates that will be in effect in the year in which the differences are expected to reverse. The
Company records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not
that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates
is recognized as income or loss in the period that includes the enactment date.
The
Company applied the provisions of ASC 740-10-50, “Accounting For Uncertainty In Income Taxes”, which provides clarification
related to the process associated with accounting for uncertain tax positions recognized in our financial statements. Audit periods
remain open for review until the statute of limitations has passed. The completion of review or the expiration of the statute
of limitations for a given audit period could result in an adjustment to the Company’s liability for income taxes. Any such
adjustment could be material to the Company’s results of operations for any given quarterly or annual period based, in part,
upon the results of operations for the given period. As of September 30, 2015 the Company had no uncertain tax positions, and
will continue to evaluate for uncertain positions in the future.
The
Company generated a deferred tax credit through net operating loss carry forward. However, a valuation allowance of 100%
has been established.
Interest
and penalties on tax deficiencies recognized in accordance with ACS accounting standards are classified as income taxes in accordance
with ASC Topic 740-10-50-19.
H.
BASIC EARNINGS (LOSS) PER SHARE
The
Financial Accounting Standards Board (FASB) issued Accounting Standards Codification (ASC) 260, "Earnings Per Share", which specifies
the computation, presentation and disclosure requirements for earnings (loss) per share for entities with publicly held common
stock. ASC 260 requires the presentation of basic earnings (loss) per share and diluted earnings (loss) per share. The Company
has adopted the provisions of ASC 260 effective from inception.
Basic
net loss per share amounts is computed by dividing the net income by the weighted average number of common shares outstanding.
All options and convertible debt outstanding has an anti-dilutive effect on the EPS, therefore Diluted Earnings per Share are
the same as basic earnings per share.
I.
ADVERTISING
Costs
associated with advertising are charged to expense as incurred. Advertising expenses were $0 and $0 for the quarter ended September
30, 2015 and the year ended September 30, 2014 respectively.
J.
REVENUE RECOGNITION
Sales
of products and related costs of products sold are recognized when: (i) persuasive evidence of an arrangement exists; (ii) delivery
has occurred; (iii) the price is fixed or determinable; and (iv) collectability is reasonably assured. These terms are typically
met upon the prepayment or invoicing and shipment of products.
The
Company determines the amount and timing of royalty revenue based on its contractual agreements with intellectual property licensees.
The Company recognizes royalty revenue when earned under the terms of the agreements and when the Company considers realization
of payment to be probable. Where royalties are based on a percentage of licensee sales of royalty-bearing products, the Company
recognizes royalty revenue by applying this percentage to the Company’s estimate of applicable licensee sales. The Company
bases this estimate on an analysis of each licensee’s sales results. Where warranted, revenue from licensees for contractual
obligations such as License Initiation Fees are recognized upon satisfaction of all conditions required to be satisfied in order
for that revenue to have been earned by the Company.
NOTE
2
.
RECENT ACCOUNTING PRONOUNCEMENTS
In
June 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-10, which eliminated certain financial
reporting requirements of companies previously identified as "Development Stage Entities" (Topic 915). The amendments in this
ASU simplify accounting guidance by removing all incremental financial reporting requirements for development stage entities.
The amendments also reduce data maintenance and, for those entities subject to audit, audit costs by eliminating the requirement
for development stage entities to present inception-to-date information in the statements of income, cash flows, and shareholder
equity. Early application of each of the amendments is permitted for any annual reporting period or interim period for which the
entity's financial statements have not yet been issued (public business entities) or made available for issuance (other entities).
Upon adoption, entities will no longer present or disclose any information required by Topic 915. The Company has adopted this
standard.
The
following accounting standards updates were recently issued and have not yet been adopted by us. These standards are currently
under review to determine their impact on our consolidated financial position, results of operations, or cash flows.
In
May 2014, FASB issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. The revenue recognition
standard affects all entities that have contracts with customers, except for certain items. The new revenue recognition standard
eliminates the transaction-and industry-specific revenue recognition guidance under current GAAP and replaces it with a principle-based
approach for determining revenue recognition. Public entities are required to adopt the revenue recognition standard for reporting
periods beginning after December 15, 2016, and interim and annual reporting periods thereafter. Early adoption is not permitted
for public entities. The Company has reviewed the applicable ASU and has not, at the current time, quantified the effects of this
pronouncement, however it believes that there will be no material effect on the consolidated financial statements.
In
June 2014, FASB issued Accounting Standards Update (ASU) No. 2014-12 Compensation — Stock Compensation (Topic 718), Accounting
for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service
Period. A performance target in a share-based payment that affects vesting and that could be achieved after the requisite service
period should be accounted for as a performance condition under Accounting Standards Codification (ASC) 718, Compensation —
Stock Compensation. As a result, the target is not reflected in the estimation of the award's grant date fair value. Compensation
cost would be recognized over the required service period, if it is probable that the performance condition will be achieved.
The guidance is effective for annual periods beginning after 15 December 2015 and interim periods within those annual periods.
Early adoption is permitted. The Company has reviewed the applicable ASU and has not, at the current time, quantified the effects
of this pronouncement, however it believes that there will be no material effect on the consolidated financial statements.
In
August 2014, FASB issued Accounting Standards Update (ASU) No. 2014-15 Preparation of Financial Statements – Going Concern
(Subtopic 205-40), Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern. Under generally accepted
accounting principles (GAAP), continuation of a reporting entity as a going concern is presumed as the basis for preparing financial
statements unless and until the entity's liquidation becomes imminent. Preparation of financial statements under this presumption
is commonly referred to as the going concern basis of accounting. If and when an entity's liquidation becomes imminent, financial
statements should be prepared under the liquidation basis of accounting in accordance with Subtopic 205-30, Presentation of Financial
Statements—Liquidation Basis of Accounting. Even when an entity's liquidation is not imminent, there may be conditions or
events that raise substantial doubt about the entity's ability to continue as a going concern. In those situations, financial
statements should continue to be prepared under the going concern basis of accounting, but the amendments in this Update should
be followed to determine whether to disclose information about the relevant conditions and events. The amendments in this Update
are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early
application is permitted. The Company will evaluate the going concern considerations in this ASU, however, at the current period,
management does not believe that it has met the conditions which would subject these financial statements for additional disclosure.
On
January 31, 2013, the FASB issued Accounting Standards Update [ASU] 2013-01, entitled Clarifying the Scope of Disclosures about
Offsetting Assets and Liabilities. The guidance in ASU 2013-01 amends the requirements in the FASB Accounting Standards Codification
[FASB ASC] Topic 210, entitled Balance Sheet. The ASU 2013-01 amendments to FASB ASC 210 clarify that ordinary trade receivables
and receivables in general are not within the scope of ASU 2011-11, entitled Disclosure about Offsetting Assets and Liabilities,
where that ASU amended the guidance in FASB ASC 210. As those disclosures now are modified with the ASU 2013-01 amendments, the
FASB ASC 210 balance sheet offsetting disclosures now clearly are applicable only where reporting entities are involved with bifurcated
embedded derivatives, repurchase agreements, reverse repurchase agreements, and securities borrowing and lending transactions
that either are offset using the FASB ASC 210 or 815 requirements, or that are subject to enforceable master netting arrangements
or similar agreements. ASU 2013-01 is effective for annual reporting periods beginning on or after January 1, 2013, and interim
periods within those annual periods. The adoption of this ASU is not expected to have a material impact on our financial statements.
On
February 28, 2013, the FASB issued Accounting Standards Update [ASU] 2013-04, entitled Obligations Resulting from Joint and Several
Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date. The ASU 2013-04 amendments
add to the guidance in FASB Accounting Standards Codification [FASB ASC] Topic 405, entitled Liabilities and require reporting
entities to measure obligations resulting from certain joint and several liability arrangements where the total amount of the
obligation is fixed as of the reporting date, as the sum of the following:
The
amount the reporting entity agreed to pay on the basis of its arrangement among co-obligors.
Any
additional amounts the reporting entity expects to pay on behalf of its co-obligors.
While
early adoption of the amended guidance is permitted, for public companies, the guidance is required to be implemented in fiscal
years, and interim periods within those years, beginning after December 15, 2013. The amendments need to be implemented retrospectively
to all prior periods presented for obligations resulting from joint and several liability arrangements that exist at the beginning
of the year of adoption. The adoption of ASU 2013-04 is not expected to have a material effect on the Company’s operating
results or financial position.
On
April 22, 2013, the FASB issued Accounting Standards Update [ASU] 2013-07, entitled Liquidation Basis of Accounting. With ASU
2013-07, the FASB amends the guidance in the FASB Accounting Standards Codification [FASB ASC] Topic 205, entitled Presentation
of Financial Statements. The amendments serve to clarify when and how reporting entities should apply the liquidation basis of
accounting. The guidance is applicable to all reporting entities, whether they are public or private companies or not-for-profit
entities. The guidance also provides principles for the recognition of assets and liabilities and disclosures, as well as related
financial statement presentation requirements. The requirements in ASU 2013-07 are effective for annual reporting periods beginning
after December 15, 2013, and interim reporting periods within those annual periods. Reporting entities are required to apply the
requirements in ASU 2013-07 prospectively from the day that liquidation becomes imminent. Early adoption is permitted. The adoption
of ASU 2013-07 is not expected to have a material effect on the Company’s operating results or financial position.
A
variety of proposed or otherwise potential accounting standards are currently under study by standard setting organizations and
various regulatory agencies. Due to the tentative and preliminary nature of those proposed standards, the Company’s
management has not determined whether implementation of such standards would be material to its financial statements.
NOTE
3. OPTIONS AND WARRANTS
As
of September 30, 2015 the Company has no options or warrants outstanding.
NOTE
4. GOING CONCERN
The
accompanying financial statements have been prepared assuming that the Company will continue as a going concern. Exclusive of
a onetime non-cash gain of $312,237 recognized upon the deconsolidation of Entest Biomedical, Inc., the Company generated net
losses of $31,316,257 excluding $663,649 of Equity in Net Losses of Entest Biomedical, Inc. recognized) during the period
from August 2, 2005 (inception) through September 30, 2015. This condition raises substantial doubt about the Company's ability
to continue as a going concern. The Company's continuation as a going concern is dependent on its ability to meet its obligations,
to obtain additional financing as may be required and ultimately to attain profitability. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
Management
plans to raise additional funds by offering securities for cash.
During
the quarter ended March 31, 2015 Regen Biopharma Inc. raised $775,000 through the issuance of convertible debt.
During
the quarter ended June 30, 2015 Regen Biopharma Inc. raised $90,000 through the issuance of convertible debt.
During
the quarter ended September 30, 2015 Regen Biopharma, Inc. raised $50,000 through the issuance of 333,333 units of securities
of Regen Biopharma, Inc. (“Units”) with each Unit consisting of 2 common shares and one share of Regen Biopharma,
Inc.’s Series A Preferred Stock .
NOTE
5. INCOME TAXES
As
of September 30, 2015
|
Deferred
tax assets:
|
|
|
|
|
|
Net
operating tax carry forwards
|
|
$
|
10,647,527
|
|
|
Other
|
|
|
-0-
|
|
|
Gross
deferred tax assets
|
|
|
10,647,527
|
|
|
Valuation
allowance
|
|
|
(10,647,527
|
|
|
|
|
|
|
|
|
Net
deferred tax assets
|
|
$
|
-0-
|
|
As
of September 30, 2015 the Company has a Deferred Tax Asset of 10,647,527 completely attributable to net operating
loss carry forwards of approximately $31,316,257 ( which expire 20 years from the date the loss was incurred) consisting
of
(a)
$38,616, of Net Operating Loss Carry forwards acquired in the reverse acquisition of BMSG and
(b)
$31,277,641 attributable to Bio-Matrix Scientific Group, Inc. a Delaware corporation, BMSG and Regen.
Realization
of deferred tax assets is dependent upon sufficient future taxable income during the period that deductible temporary differences
and carry forwards are expected to be available to reduce taxable income. The achievement of required future taxable income is
uncertain. In addition, the reverse acquisition of BMSG has resulted in a change of control. Internal Revenue Code Sec 382 limits
the amount of income that may be offset by net operating loss (NOL) carryovers after an ownership change. As a result, the Company
has the Company recorded a valuation allowance reducing all deferred tax assets to 0.
Income
tax is calculated at the 34% Federal Corporate Rate.
NOTE
6. RELATED PARTY TRANSACTIONS
As
of September 30, 2015 the Company is indebted to David Koos, the Company’s Chairman and Chief Executive Officer, in the
amount of $141,286. These loans and any accrued interest are due and payable at the demand of Mr. Koos and bear simple interest
at the rate of 15% per annum.
As
of September 30, 2015 Regen is indebted to David Koos, the Company’s Chairman and Chief Executive Officer, in the amount
of $50. These loans and any accrued interest are due and payable at the demand of Mr. Koos and bear simple interest at the rate
of 15% per annum.
The
Company utilizes approximately 2,300 square feet of office space at 4700 Spring Street, Suite 304, La Mesa California, 91941 subleased
to Regen by Entest BioMedical, Inc. on a month to month basis beginning October 1, 2014. The Chief Executive Officer of Entest
Biomedical Inc. is David R. Koos who also serves as the Chief Executive Officer of the Company. The sublease is on a month to
month basis and rent payable to Entest Biomedical, Inc. by Regen Biopharma Inc is equal to $5,000 per month,
As
of September 30, 2015 Entest Biomedical, Inc. is indebted to Regen in the amount of $12,051. $12,051lent by Regen to Entest Biomedical,
Inc . is due and payable at the demand of the holder and bear simple interest at a rate of 10% per annum.
On
June 23, 2015 Regen Biopharma, Inc. entered into an agreement (“Agreement”) with Zander Therapeutics, Inc. ( “Zander”)
whereby Regen Biopharma, Inc. granted to Zander an exclusive worldwide right and license for the development and commercialization
of certain intellectual property controlled by Regen Biopharma, Inc. (“ License IP”) for non-human veterinary therapeutic
use for a term of fifteen years. Zander is a wholly owned subsidiary of Entest Biomedical, Inc.
Pursuant
to the Agreement, Zander shall pay to Regen Biopharma, Inc. one-time, non-refundable, upfront payment of one hundred thousand
US dollars ($100,000) as a license initiation fee which must be paid within 90 days of June 23, 2015 and an annual non-refundable
payment of one hundred thousand US dollars ($100,000) on the first anniversary of the effective date of the Agreement and each
subsequent anniversary.
The
abovementioned payments may be made, at Zander’s discretion, in cash or newly issued common stock of Zander or in common
stock of Entest BioMedical Inc. valued as of the lowest closing price on the principal exchange upon which said common stock trades
publicly within the 14 trading days prior to issuance.
Pursuant
to the Agreement, Zander shall pay to Regen Biopharma, Inc. royalties equal to four percent (4%) of the Net Sales , as such term
is defined in the Agreement, of any Licensed Products, as such term is defined in the Agreement, in a Quarter.
Pursuant
to the Agreement, Zander will pay Regen Biopharma, Inc. ten percent (10%) of all consideration (in the case of in-kind consideration,
at fair market value as monetary consideration) received by Zander from sublicensees ( excluding royalties from sublicensees based
on Net Sales of any Licensed Products for which Regen Biopharma, Inc. receives payment pursuant to the terms and conditions of
the Agreement).
Zander
is obligated pay to Regen Biopharma, Inc. minimum annual royalties of ten thousand US dollars ($10,000) payable per year on each
anniversary of the Effective Date of this Agreement, commencing on the second anniversary of June 23, 2015. This minimum annual
royalty is only payable to the extent that royalty payments made during the preceding 12-month period do not exceed ten thousand
US dollars ($10,000).
The
Agreement may be terminated by Regen Biopharma, Inc.:
If
Zander has not sold any Licensed Product by ten years of the effective date of the Agreement or Zander has not sold any Licensed
Product for any twelve (12) month period after Zander’s first commercial sale of a Licensed Product.
The
Agreement may be terminated by Zander with regard to any of the License IP if by five years from the date of execution of the
Agreement a patent has not been granted by the United States patent and Trademark Office to Regen Biopharma, Inc. with regard
to that License IP.
The
Agreement may be terminated by Zander with regard to any of the License IP if a patent that has been granted by the United States
patent and Trademark Office to Regen Biopharma, Inc. with regard to that License IP is terminated.
The
Agreement may be terminated by either party in the event of a material breach by the other party.
On
September 28, 2015 Zander caused to be issued to Regen Biopharma, Inc. 8,000,000 of the common shares of Entest Biomedical, Inc
in satisfaction of one hundred thousand US dollars ($100,000) to be paid to Regen Biopharma, Inc. by Zander as a license initiation
fee. Regen Biopharma, Inc. recognized revenue of $192,000 equivalent to the fair value of 8,000,000 of the common shares of Entest
Biomedical, Inc as of the date of issuance.
David
R. Koos serves as sole officer and director of both Zander and Entest Biomedical, Inc. and also serves as Chairman and Chief Executive
Officer of Regen Biopharma, Inc..
NOTE
7. NOTES PAYABLE AND CONVERTIBLE NOTES PAYABLE
|
|
|
September
30, 2014
|
|
|
|
|
|
|
|
Bio
Technology Partners Business Trust (Company)
|
|
|
35,000
|
|
|
David
R. Koos ( Company)( Note 6)
|
|
|
189,065
|
|
|
David
R. Koos ( Regen)( Note 6)
|
|
|
30,168
|
|
|
The
Sherman family Trust
|
|
|
125,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
379,233
|
|
|
|
|
|
September
30, 2015
|
|
|
|
|
|
|
|
|
Bio
Technology Partners Business Trust (Company)
|
|
$
|
14,000
|
|
|
Bio
Technology Partners Business Trust (Regen)
|
|
$
|
84,000
|
|
|
David
R. Koos ( Company)( Note 6)
|
|
$
|
141,286
|
|
|
David
R. Koos ( Regen)( Note 6)
|
|
$
|
50
|
|
|
The
Sherman family Trust
|
|
$
|
2,000
|
|
|
Bostonia
Partners ( Company)
|
|
$
|
40,000
|
|
|
Bostonia
Partners ( Regen)
|
|
$
|
119,000
|
|
|
Total
|
|
$
|
400,336
|
|
Amounts
due to the Biotechnology Partners Business Trust. are due and payable at the demand of the holder and bear simple interest
at a rate of 10% per annum.
These
amount was loaned pursuant to a Line of Credit Promissory Note issued by Regen in the maximum amount of $500,000 or so much thereof
as may be disbursed to, or for the benefit of the Borrower by Lender in Lender's sole and absolute discretion and pursuant to
a Line of Credit Promissory Note issued by the Company in the maximum amount of $700,000 or so much thereof as may be disbursed
to, or for the benefit of the Borrower by Lender in Lender's sole and absolute discretion.
All
loans to the Company and Regen made by David R. Koos are due and payable at the demand of Koos and bear simple interest at a rate
of 15% per annum. These amount was loaned pursuant to a Line of Credit Promissory Note issued by Regen in the maximum amount of
$700,000 or so much thereof as may be disbursed to, or for the benefit of the Borrower by Lender in Lender's sole and absolute
discretion and pursuant to a Line of Credit Promissory Note issued by the Company in the maximum amount of $700,000 or so much
thereof as may be disbursed to, or for the benefit of the Borrower by Lender in Lender's sole and absolute discretion.
All
amounts due to the Sherman Family Trust bear no interest and are due and payable, in whole or in part, at the option of the holder. These
amount was loaned pursuant to a Line of Credit Promissory Note issued by the Company in the maximum amount of $700,000 or so much
thereof as may be disbursed to, or for the benefit of the Borrower by Lender in Lender's sole and absolute discretion.
$60,000
lent to Regen Biopharma, Inc. by Bostonia Partners is due and payable September 16, 2016 and bear simple interest at a rate of
10% per annum
$59,000
lent to Regen Biopharma, Inc. by Bostonia Partners is due and payable September 22, 2016 and bear simple interest at a rate of
10% per annum.
$40,000
lent to the Company by Bostonia Partners is due and payable September 2, 2016 and bear simple interest at a rate of 10% per annum.
As
of September 30, 2015 the weighted average interest rate on all debt due and payable in one year or less was 11.7% As of September
30, 2014 the weighted average interest rate on all debt due and payable in one year or less was 9.5%
CONVERTIBLE
NOTES PAYABLE SEPTEMBER 30, 2015
|
|
|
|
|
|
|
$
|
50,000
|
|
|
Scott
Levine
|
|
$
|
10,000
|
|
|
Mike
and Ofie Weiner
|
|
$
|
18,400
|
|
|
Mike
and Ofie Weiner
|
|
$
|
2,301
|
|
|
Bio
Technology Partners Business Trust
|
|
$
|
300,000
|
|
|
Star
City Capital, LLC
|
|
$
|
380,701
|
|
|
Total
|
$300,000
due and payable to Starcity Capital LLC (“Note”) bears no interest, is payable on April1, 2016 and permits conversion
at the Holder’s option into common shares of the Company under the following terms and conditions:
The
Holder of the Note is entitled, at its option, at any time after 180 days after March 27, 2015 to convert all or any amount of
the principal face amount of this Note then outstanding into shares of the Company's common stock (the "Common Stock") at a price
("Conversion Price") for each share of Common Stock equal to the greater of
(iii)
fifty five percent (55%) (the "Discount'') of the lowest closing bid price for the Company's common stock during the five (5)
trading days immediately preceding a conversion date, as reported by Bloomberg (the "Closing Bid Price") ("Initial Conversion
Price") or
(iv)
$0.0001.
Upon
:
(i)
a transfer of all or substantially all of the assets of the Company to any person in a single transaction or series of related
transactions,
(ii)
a reclassification, capital reorganization or other change or exchange of outstanding shares of the Common Stock, or
(iii)
any consolidation or merger of the Company with or into another person or entity in which the Company is not the surviving entity
(other than a merger which is effected solely to change the jurisdiction of incorporation of the Company and results in a reclassification,
conversion or exchange of outstanding shares of Common Stock solely into shares of Common Stock)
then,
in each case, Holder may convert the unpaid principal amount of this Note into shares of Common Stock immediately prior to such
event at the Conversion Price.
other
than as provided in (i), (ii) and(ii) above, the Holder shall not have the right to convert its debt into shares which, when added
to such Holder’s other holdings in the Company stock, shall have caused such Holder to hold more than 9.99% of the Company’s
outstanding common stock.
The
issuance of the Note amounted in a beneficial conversion feature of $300,000 which is amortized under the Interest Method over
the life of the Note.
The
amount by which the instrument’s as converted value exceeds the principal amount as of September 30, 2015 is $245,454.
$50,000
due and payable to Scott Levine bears simple interest at 12% per annum and is convertible into common shares of the company at
$0.15 per share. The instrument became due and payable on November 14, 2009. No demand for payment has been made.
$10,000
due and payable to Mike and Ofie Weiner bears simple interest at 12% per annum and is convertible into common shares of the company
at $0.15 per share. The instrument became due and payable on March 3 , 2010. No demand for payment has been made.
$18,400
due and payable to Mike and Ofie Weiner bears simple interest at 12% per annum and is convertible into common shares of the company
at $0.15 per share. The instrument became due and payable on December 28, 2009. No demand for payment has been made.
$2,301
due and payable to Bio Technology Partners Business Trust bears simple interest at 12% per annum and is convertible into common
shares of the company at $0.15 per share. The instrument became due and payable on November 26, 2009. No demand for payment has
been made.
As
of September 30, 2014 the unamortized discount on convertible notes outstanding is $0.
As
of September 30, 2015 the unamortized discount on convertible notes outstanding is $ 149,193.
CONVERTIBLE
NOTES ISSUED BY REGEN BIOPHARMA, INC.
During
the quarter ended March 31, 2015 Regen Biopharma, Inc. issued Convertible Notes ( “Notes”) with an aggregate face
value of $882,686 . Consideration for these Notes consisted of:
|
|
(b)
|
Satisfaction
of $107,686 of existing indebtedness:
|
Each
Note becomes due and payable at the demand of the Lender at any time after one year subsequent to the issuance date and bears
simple interest at 10% per annum payable quarterly at the demand of the Lender.
All
or part of the principal and accrued but unpaid interest is convertible at any time at the demand of the Lender into the Common
Shares of Regen at a price per share ( “Conversion Price”) equivalent to a 65% discount to the lowest Trading Price
(as defined below) for the Common Shares during the thirty (30) Trading Day (as defined below) period ending on the latest complete
Trading Day prior to the conversion date. “Trading Price” means the closing bid price on the Over-the-Counter Bulletin
Board, or applicable trading market (the “OTCQB”) as reported by a reliable reporting service (“Reporting Service”)
designated by the Lender (i.e. Bloomberg) or, if the OTCQB is not the principal trading market for such security, the closing
bid price of such security on the principal securities exchange or trading market where such security is listed or traded or,
if no closing bid price of such security is available in any of the foregoing manners, the average of the closing bid prices of
any market makers for such security that are listed in the “pink sheets” by the National Quotation Bureau, Inc. If
the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be
the fair market value as mutually determined by Regen and the Lender. “Trading Day” shall mean any day on which the
Common Shares are tradable for any period on the OTCQB, or on the principal securities exchange or other securities market on
which the Common Shares are then being traded. “Trading Volume” shall mean the number of shares traded on such Trading
Day as reported by such Reporting Service. The Conversion Price shall be equitably adjusted for stock splits, stock dividends,
rights offerings, combinations, recapitalization, reclassifications, extraordinary distributions and similar events by Regen relating
to the Lender’s securities. Principal and interest may be prepaid in part or in full by Regen on not less than three Trading
Days prior written notice to the Lender.
Upon
expiration of the six month holding specified in Rule 144(d) promulgated under the Securities Act of 1933, Regen , at the request
of the Lender, shale remove sale restrictions on one sixth (1/6) of the shares that resulted from conversions made through the
issuance of this Note , each month, for a period of six months, with all restrictions being removed by Regen Biopharma, Inc. by
the expiration of the six month subsequent to expiration of the aforementioned Rule 144 holding period.
If
the Lender converts principal into Common Stock of Regen on or prior to 180 days from the issuance of the Note the Lender shall
receive one share of Preferred Series “A” Stock of Regen Biopharma, Inc. for each share of Common Stock received through
conversion.
All
Notes were fully converted during the quarter ended March 31, 2015. 31,539,262 common shares of Regen were issued to the Convertible
Noteholders in satisfaction of the convertible indebtedness. 31,538,862 of Regen Biopharma, Inc.’s Series A Preferred shares
were issued to Noteholders pursuant to the terms and conditions of the Notes.
Regen
Biopharma, Inc. analyzed the conversion feature of the Notes for derivative accounting consideration under ASC 815-15 “Derivatives
and Hedging” and determined that the embedded conversion feature should be classified as a liability due to their being
no explicit limit to the number of shares to be delivered upon settlement of the above conversion features. ASC 815-15 requires
that the conversion features are bifurcated and separately accounted for as an embedded derivative contained in Regen Biopharma,
Inc.’s convertible debt. The embedded derivative is carried on the balance sheet at fair value. Any unrealized change in
fair value, as determined at each measurement period, is recorded as a component of the income statement and the associated carrying
amount on the balance sheet is adjusted by the change.
Regen
Biopharma, Inc. values the embedded derivative using the Black-Scholes pricing model and an aggregate derivative liability of
$2,368,685 was recognized by Regen Biopharma, Inc.. This liability was eliminated prior to the end of Regen Biopharma, Inc.’s
second quarter as a result of the full conversion of all Notes prior to the end of Regen Biopharma, Inc.’s second quarter.
During
the quarter ended June 30, 2015 the Regen Biopharma, Inc. issued Convertible Notes ( “Notes”) with an aggregate face
value of $90,000 . Consideration for these Notes consisted of $90,000.
All
or part of the principal and accrued but unpaid interest is convertible at any time at the demand of the Lender into the Common
Shares of Regen at a price per share ( “Conversion Price”) equivalent the lower of (1) a 65% discount to the lowest
Trading Price (as defined below) for the Common Shares during the thirty (30) Trading Day (as defined below) period ending on
the latest complete Trading Day prior to the conversion date. “Trading Price” means the closing bid price on the Over-the-Counter
Bulletin Board, or applicable trading market (the “OTCQB”) as reported by a reliable reporting service (“Reporting
Service”) designated by the Lender (i.e. Bloomberg) or, if the OTCQB is not the principal trading market for such security,
the closing bid price of such security on the principal securities exchange or trading market where such security is listed or
traded or, if no closing bid price of such security is available in any of the foregoing manners, the average of the closing bid
prices of any market makers for such security that are listed in the “pink sheets” by the National Quotation Bureau,
Inc. If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price
shall be the fair market value as mutually determined by Regen and the Lender. “Trading Day” shall mean any day on
which the Common Shares are tradable for any period on the OTCQB, or on the principal securities exchange or other securities
market on which the Common Shares are then being traded. “Trading Volume” shall mean the number of shares traded on
such Trading Day as reported by such Reporting Service. The Conversion Price shall be equitably adjusted for stock splits, stock
dividends, rights offerings, combinations, recapitalization, reclassifications, extraordinary distributions and similar events
by Regen relating to the Lender’s securities.
Or
(2)
$0.03 per share
Principal
and interest may be prepaid in part or in full by Regen on not less than three Trading Days prior written notice to the Lender.
Upon
expiration of the six month holding specified in Rule 144(d) promulgated under the Securities Act of 1933, Regen , at the request
of the Lender, shall remove sale restrictions on one sixth (1/6) of the shares that resulted from conversions made through the
issuance of this Note , each month, for a period of six months, with all restrictions being removed by the Company by the expiration
of the six month subsequent to expiration of the aforementioned Rule 144 holding period.
If
the Lender converts principal into Common Stock of Regen on or prior to 180 days from the issuance of the Note the Lender shall
receive one share of Preferred Series “A” Stock of the Company for each share of Common Stock received through conversion.
During
the quarter ended June 30, 2015 the Regen issued 3,214,285 of its common shares in satisfaction of the abovementioned convertible
notes and 3,214,285 shares of its Series A Preferred stock in accordance with the terms and conditions of abovementioned convertible
notes.
Regen
Biopharma, Inc. analyzed the conversion feature of the Notes for derivative accounting consideration under ASC 815-15 “Derivatives
and Hedging” and determined that the embedded conversion feature should be classified as a liability due to their being
no explicit limit to the number of shares to be delivered upon settlement of the above conversion features. ASC 815-15 requires
that the conversion features are bifurcated and separately accounted for as an embedded derivative contained in Regen Biopharma,
Inc.’s convertible debt. The embedded derivative is carried on the balance sheet at fair value. Any unrealized change in
fair value, as determined at each measurement period, is recorded as a component of the income statement and the associated carrying
amount on the balance sheet is adjusted by the change.
Regen
values the embedded derivative using the Black-Scholes pricing model and an aggregate derivative liability of $350,666 was recognized
by the Company in connection with $90,000 of convertible notes payable issued during the quarter ended June 30, 2015. This liability
was eliminated prior to the end of Regen’s third quarter as a result of the full conversion of these convertible noted prior
to the end of Regen’s third quarter.
NOTE
8. STOCKHOLDERS' EQUITY
The
stockholders' equity section of the Company contains the following classes of capital stock as of September 30, 2015:
Preferred
stock, $0.0001 par value; 20,000,000 shares authorized:
2,063,821 Preferred
Shares, par value $0.0001, issued and outstanding.
With
respect to each matter submitted to a vote of stockholders of the Corporation, each holder of Preferred Stock shall be entitled
to cast that number of votes which is equivalent to the number of shares of Series B Preferred Stock owned by such holder times
one (1).
On
any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the holders of the Preferred Stock shall
receive, out of assets legally available for distribution to the Company's stockholders, a ratable share in the assets of the
Corporation.
94,852
Series AA Preferred Shares, par value $0.0001, issued and outstanding.
With
respect to each matter submitted to a vote of stockholders of the Corporation, each holder of Series AA Preferred Stock shall
be entitled to cast that number of votes which is equivalent to the number of shares of Series AA Preferred Stock owned by such
holder times ten thousand (10,0000).
On
any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the holders of the Series AA Preferred
Stock shall receive, out of assets legally available for distribution to the Company's stockholders, a ratable share in the assets
of the Corporation.
40,000
Series AAA Preferred Shares, par value $0.0001, issued and outstanding.
With
respect to each matter submitted to a vote of stockholders of the Corporation, each holder of Series AA Preferred Stock shall
be entitled to cast that number of votes which is equivalent to the number of shares of Series AA Preferred Stock owned by such
holder times one hundred thousand (100,0000).
On
any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the holders of the Series AA Preferred
Stock shall receive, out of assets legally available for distribution to the Company's stockholders, a ratable share in the assets
of the Corporation.
725,409
Series B Preferred Shares, Par Value $0.0001, issued and outstanding.
With
respect to each matter submitted to a vote of stockholders of the Corporation, each holder of Series B Preferred Stock shall be
entitled to cast that number of votes which is equivalent to the number of shares of Series B Preferred Stock owned by such holder
times two (2).
On
any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the holders of the Series B Preferred
Stock shall receive, out of assets legally available for distribution to the Company's stockholders, a ratable share in the assets
of the Corporation.
Non
Voting Convertible Preferred Stock, $1.00 Par value, 200,000 shares authorized, 0 shares issued and outstanding
Each
Non Voting Convertible Preferred Stock shall convert at the option of the holder into shares of the corporation’s common
stock at a conversion price equal to seventy percent (70%) of the lowest Closing Price for the five (5) trading days immediately
preceding written receipt by the corporation of the holder’s intent to convert.
“CLOSING
PRICE" shall mean the closing bid price for the corporation’s common stock on the Principal Market on a Trading Day as reported
by Bloomberg Finance L.P.
“PRINCIPAL
MARKET" shall mean the principal trading exchange or market for the corporation’s common stock.
“TRADING
DAY” shall mean a day on which the Principal Market shall be open for business.
On
any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the holders of the Non Voting Convertible
Preferred shall receive, out of assets legally available for distribution to the Company's stockholders, a ratable share in the
assets of the Corporation.
Common
stock, $ 0.0001 par value; 5,000,000,000 shares authorized: 4,232,931,245 shares issued and outstanding.
With
respect to each matter submitted to a vote of stockholders of the Corporation, each holder of Common Stock shall be entitled to
cast that number of votes which is equivalent to the number of shares of Common Stock owned by such holder times one (1).
NOTE
9. COMMITMENTS AND CONTINGENCIES
On
April 12, 2013 a complaint (Complaint) was filed in the U.S. District Court Southern District of the State of new York against
the Company, the Company’s Chairman and Does 1-50 by Star city Capital, LLC (“Plaintiff”) alleging securities
fraud, common law fraud, negligent misrepresentation, breach of fiduciary duties and breach of contract in connection with the
issuance of. The Plaintiff is also request declaratory relief from the Court.
The
action arises from the issuance and subsequent cancellation of 103,030,303 of the company’s common shares in satisfaction
of $17,000 of convertible indebtedness of the Company held by the Plaintiff. The Plaintiff alleges that a cancellation notice
sent by them to the Company’s transfer agent was meant to instruct the Transfer Agent simply to cancel the physical certificate
in order that an equivalent number of shares may be transferred via DWAC to the Plaintiff’s stockbroker for the benefit
of the Plaintiff. DWAC is the acronym for Deposit/Withdrawal At Custodian. The DWAC transaction system run by The Depository Trust
Company (a.k.a. DTC or CEDE & CO) permits brokers and custodial banks, the DTC participants, to request the movement of shares
to or from the issuer’s transfer agent electronically. A DWAC results in the crediting or debiting of shares to or from
DTC’s book-entry account on the records of the issuer maintained by the transfer agent.
The
Company believes that the cancellation notice sent by the Plaintiff clearly represents a cancellation of the conversion notice
itself.
The
convertible indebtedness held by the Plaintiff was convertible at Holder’s demand into the common shares of the Company’s
stock at a conversion price per share equal to 55% (the “Discount”) of the lowest closing bid price for the Company’s
common stock during the 5 trading days immediately preceding a conversion date, as reported by Bloomberg (the “Closing Bid
Price”); provided that if the closing bid price for the common stock on the date in which the conversion shares are deposited
into Holder’s brokerage account and confirmation has been received that Holder may execute trades of the conversion shares
( Clearing Date) is lower than the Closing Bid Price, then the purchase price for the conversion shares would be adjusted such
that the Discount shall be taken from the closing bid price on the Clearing Date, and the Company shall issue additional shares
to Purchaser to reflect such adjusted Purchase Price(“Reset”). The Company and the Plaintiff had agreed on a limitation
on conversion equal to 9.99% of the Company’s outstanding common stock.
On
February 2, 2015 Plaintiff and the Company entered into a Settlement Agreement and Mutual General Release to fully and finally
resolve the aforementioned legal action pursuant to the following terms and conditions:
|
|
(a)
|
Within
seven business days of the Company’s transfer agent’s receipt of an appropriate opinion of counsel, the Company
shall deliver to Starcity or its designee or assignee (which designation or assignment shall be provided in writing) via DWAC,
103,030,303 of the common shares of the Company , it being the agreement of the parties that such issuance shall constitute
full and complete satisfaction of $17,000 due to Starcity by the Company.
|
|
|
(b)
|
The
Company shall deliver to Starcity a non interest bearing Convertible Note in the face amount of $300,000 (“Note”)
due and payable April 1, 2016.
|
The
Holder of this Note is entitled, at its option, at any time after 180 days after the date that consideration of $52,500 is paid
to the Company to convert all or any amount of the principal face amount of this Note then outstanding into shares of the Company's
common stock (the "Common Stock") at a price ("Conversion Price") for each share of Common Stock equal to the greater of
|
|
(i)
|
fifty
five percent (55%) (the "Discount'') of the lowest closing bid price for the Company's common stock during the five (5) trading
days immediately preceding a conversion date, as reported by Bloomberg (the "Closing Bid Price") ("Initial Conversion Price")
or
|
Other
than as provided in 5(p) of the Note ), the Holder shall not have the right to convert its debt into shares which, when added
to such Holder’s other holdings in the Company stock, shall have caused such Holder to hold more than to hold more than
9.99% of the Company's outstanding common stock. Section 5(p) of the Note states that:
Upon
:
(i)
a transfer of all or substantially all of the assets of the Company to any person in a single transaction or series of related
transactions,
(ii)
a reclassification, capital reorganization or other change or exchange of outstanding shares of the Common Stock, or
(iii)
any consolidation or merger of the Company with or into another person or entity in which the Company is not the surviving entity
(other than a merger which is effected solely to change the jurisdiction of incorporation of the Company and results in a reclassification,
conversion or exchange of outstanding shares of Common Stock solely into shares of Common Stock)
then,
in each case, Holder may convert the unpaid principal amount of this Note into shares of Common Stock immediately prior to such
event at the Conversion Price.
In
the event that Starcity fails to fund the Note by making a payment of $52,500 to the Company on or before April 1, 2015, the Company’s
obligations under this Note shall be terminated, cancelled and relinquished.
On
August 21, 2012 the Company entered into a settlement funding agreement with Princeton Research, Inc. and Jan Vandersande (collectively
the “PRI Parties”) which obligates the Company to pay the PRI Parties $1,000 a month over thirty months.
The
Company utilizes approximately 2,300 square feet of office space at 4700 Spring Street, Suite 304, La Mesa California, 91941 subleased
to Regen Biopharma, Inc. by Entest BioMedical, Inc. on a month to month basis beginning October 1, 2014. The Chief Executive Officer
of Entest Biomedical Inc. is David R. Koos who also serves as the Chief Executive Officer of Regen and the Company. The sublease
is on a month to month basis and rent payable to Entest Biomedical, Inc. by Regen Biopharma Inc is equal to $5,000 per month.
On
March 20, 2015 Regen Biopharma, Inc. agreed to sublease 199 square feet of laboratory space located at 5310 Eastgate Mall, San
Diego, CA 92121 from Human BioMolecular Research Institute (“Sublease Agreement”). Pursuant to the terms of the Sublease
Agreement Regen Biopharma, Inc. will pay rent of $400 per month to Human BioMolecular Research Institute (“HBRI”)
. The term of the sublease shall be from March 9, 2015 to September 8, 2015 (a period of 6 months) and will automatically renew
thereafter for the same 6 month term unless written notice is received by HBRI within 60 days prior to renewal. Regen Biopharma,
Inc. terminated its sublease with Human BioMolecular Research Institute
On
March 20, 2015 Regen Biopharma, Inc entered into a Research Agreement with HBRI wherein HBRI agreed to provide a variety of professional,
scientific and technical services for the proper conduct of research by Regen Biopharma, Inc. and also to make available certain
research equipment to Regen Biopharma, Inc. The term of the agreement shall be from March 9, 2015 to September 8, 2015 (a period
of 6 months) and will automatically renew thereafter for the same 6 month term unless written notice is received by HBRI within
60 days prior to renewal. As consideration Regen Biopharma, Inc shall pay a monthly fee of $2,700 to HBRI over the term of the
agreement. Regen Biopharma, Inc. terminated the aforementioned agreement with Human BioMolecular Research Institute.
NOTE
10. INVESTMENT SECURITIES
As
of the quarter ending September 30, 2012 the Company reclassified 66,667 ( retroactively adjusted for reverse stock split.) common
shares of Entest Biomedical, Inc. as Securities Available for Sale from Securities Accounted for under the Equity Method.
On
September 28, 2015 Zander Theraputics, Inc. caused to be issued to Regen Biopharma, Inc. 8,000,000 of the common shares of Entest
Biomedical, Inc in satisfaction of one hundred thousand US dollars ($100,000) to be paid to Regen Biopharma, Inc. by Zander Theraputics,
Inc as a license initiation fee.
As
of September 30, 2015 the Company recognized an other than temporary impairment of $41,333,361 on 8,066,667 Common Shares of Entest
Biomedical, Inc.
The
Company concluded that such impairment should be recognized based primarily due to:
(a) History
of recurring losses for Entest Biomedical, Inc.
(b) Large
percentage decline in fair value during the Company’s period of ownership
The
common shares of Entest Biomedical, Inc described above constitute the Company’s sole investment securities as of September
30, 2015.
|
8,066,667
|
Common
Shares of Entest Biomedical, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basis
|
Fair
Value
|
Total
Unrealized Losses in Other Comprehensive Income
|
Net
Unrealized Gain or (Loss )realized during the year ended September 31, 2015
|
|
41,528,361
|
159,720
|
(35,280)
|
(35,280)
|
NOTE
11. STOCK TRANSACTIONS
BIO-MATRIX
SCIENTIFIC GROUP, INC.:
During
the fiscal year ended September 30, 2015 the Company issued 1,153,030,303 Common Shares in satisfaction of $174,500 of indebtedness.
REGEN
BIOPHARMA, INC.
Common
Stock
During
the year ended September 30, 2015 Regen Biopharma, Inc. issued 666,666 Common Shares for cash proceeds of $33,333.
During
the year ended September 30, 2015 Regen Biopharma, Inc. issued 1,425,808 Common Shares valued at $307,956 for services .
During
the year ended September 30, 2015 Regen Biopharma, Inc. issued 25,000,000 Common Shares as Restricted Stock Awards to employees.
During
the year ended September 30, 2015 Regen Biopharma, Inc. issued 35,753,547 Common Shares in satisfaction of $1,003,575 of indebtedness.
Series
A Preferred Stock
On
March 11, 2015 stock dividend of 10,395,217 Series A Preferred shares was paid to Regen Biopharma, Inc.’s common shareholders
of record as of March 10, 2015. Common shareholders received one share of Series A Preferred Stock for every 10 shares of Regen
Biopharma, Inc. common Stock owned as of the Record Date.
During
the year ended September 30, 2015 Regen Biopharma, Inc. issued 10,000,000 Series A Preferred shares as Restricted Stock Awards
to employees.
On
March 17, 2015 Regen Biopharma, Inc. issued 1,000,000 shares of its Series A Preferred Stock to Thomas Ichim, Regen Biopharma,
Inc.’s Chief Scientific Officer, as partial consideration for the sale to Regen Biopharma, Inc. by Ichim of all right, title,
and interest in and to the certain invention (hereinafter “Invention”) entitled “Gene Silencing of the Brother
of the Regulator of Imprinted Sites” for which a U.S. Patent Number, 8,263,571, issued by the United States Patent and Trademark
Office on September 11, 2011
During
the year ended September 30, 2015 Regen Biopharma, Inc. issued 34,753,547 shares of its Series A Preferred Stock in accordance
with the terms and conditions of convertible notes issued.
During
the year ended September 30, 2015 Regen Biopharma, Inc. issued 4,500,00 shares of its Series A Preferred Stock for services .
During
the year ended September 30, 2015 Regen Biopharma, Inc. issued 333,333 shares of its Series A Preferred Stock for cash proceeds
of $16,667
NOTE
12. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS
Subsequent
to the original issuance of the Company’s annual consolidated financial statements, the Company determined that:
An
other than temporary impairment of $41,333,361 on 8,066,667 Common Shares of Entest Biomedical, Inc. owned by the Company should
be recognized as of September 30, 2015 due to the following factors:
|
|
(a)
|
History
of recurring losses for Entest Biomedical, Inc.
|
|
|
(b)
|
Large
percentage decline in fair value during the Company’s period of ownership
|
The
line Items “Increase in Additional Paid in Capital” and “Loss on Settlement of Debt through Equity issuance”
are to be categorized as “Adjustments to reconcile net Income to net cash (used in) provided by operating activities”
in the Company’s statement of cash flow.
The
following tables reflect the corrections:
|
BIOMATRIX
SCIENTIFIC GROUP, INC.
|
|
|
|
|
|
CONSOLIDATED
BALANCE SHEET
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
of September 30, 2015
|
|
|
|
Adjustments
|
|
|
|
As
of September 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
originally Reported
|
|
|
|
|
|
|
|
Restated
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
|
76,355
|
|
|
|
|
|
|
|
76,355
|
|
|
Prepaid
Expenses
|
|
|
25,000
|
|
|
|
|
|
|
|
25,000
|
|
|
Note
Receivable
|
|
|
12,051
|
|
|
|
|
|
|
|
12,051
|
|
|
Interest
Receivable
|
|
|
1,381
|
|
|
|
|
|
|
|
1,381
|
|
|
Total
Current Assets
|
|
|
114,787
|
|
|
|
|
|
|
|
114,787
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
4,200
|
|
|
|
|
|
|
|
4,200
|
|
|
Available
for Sale Securities
|
|
|
159,720
|
|
|
|
|
|
|
|
159,720
|
|
|
Total
Other Assets
|
|
|
163,920
|
|
|
|
|
|
|
|
163,920
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
|
278,707
|
|
|
|
|
|
|
|
278,707
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
Payable
|
|
|
167,977
|
|
|
|
|
|
|
|
167,977
|
|
|
Notes
Payable
|
|
|
400,336
|
|
|
|
|
|
|
|
400,336
|
|
|
Bank
Overdraft
|
|
|
0
|
|
|
|
|
|
|
|
0
|
|
|
Accrued
Payroll
|
|
|
738,095
|
|
|
|
|
|
|
|
738,095
|
|
|
Accrued
Payroll Taxes
|
|
|
44,485
|
|
|
|
|
|
|
|
44,485
|
|
|
Accrued
Interest
|
|
|
324,750
|
|
|
|
|
|
|
|
324,750
|
|
|
Accrued
Rent
|
|
|
10,000
|
|
|
|
|
|
|
|
10,000
|
|
|
Accrued
Expenses
|
|
|
5,000
|
|
|
|
|
|
|
|
5,000
|
|
|
Convertible
Note Payable Net of Unamortized Discount
|
|
|
231,507
|
|
|
|
|
|
|
|
231,507
|
|
|
Due
to Affiliate
|
|
|
0
|
|
|
|
|
|
|
|
0
|
|
|
Due
to Subsidiary Shareholder
|
|
|
0
|
|
|
|
|
|
|
|
0
|
|
|
Current
portion, note payable to affiliated party
|
|
|
1,000
|
|
|
|
|
|
|
|
1,000
|
|
|
Total
Current Liabilities
|
|
|
1,923,150
|
|
|
|
|
|
|
|
1,923,150
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
Stock ($.0001 par value) 20,000,000 shares authorized;
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000,000
shares authorized; 2063821 issues and outstanding as of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30 2015
|
|
|
207
|
|
|
|
|
|
|
|
207
|
|
|
Series
AA Preferred ($0.0001 par value) 100,000 shares authorized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
94,852
issued and outstanding as of September 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9
|
|
|
|
|
|
|
|
9
|
|
|
Series
AAA Preferred ($0.0001 par value) 1,000,000 shares authorized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000
shares issued and outstanding as of September 30, 2015
|
|
|
4
|
|
|
|
|
|
|
|
4
|
|
|
Series
B Preferred Shares ($.0001 par value) 2,000,000 shares authorized;
|
|
|
|
|
|
|
|
|
|
|
|
|
|
725,409
issued and outstanding as of and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,2015
|
|
|
73
|
|
|
|
|
|
|
|
73
|
|
|
Common
Stock ($.0001 par value) 5,000,000,000 shares authorized;
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,232,931,345
issued and outstanding as of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2015
|
|
|
423,292
|
|
|
|
|
|
|
|
423,292
|
|
|
Non
Voting Convertible Preferred Stock ($1 Par value)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
200,000
shares authorized; 0 shares issued and outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
as
of September 30, 2015
|
|
|
0
|
|
|
|
|
|
|
|
0
|
|
|
Additional
Paid in capital
|
|
|
29,004,809
|
|
|
|
|
|
|
|
29,004,809
|
|
|
Contributed
Capital
|
|
|
509,355
|
|
|
|
|
|
|
|
509,355
|
|
|
Retained
Earnings (Deficit)
|
|
|
9,704,398
|
|
|
|
(41,333,361
|
)
|
|
|
(31,628,963
|
)
|
|
Accumulated
Other Comprehensive Income (Loss)
|
|
|
(41,368,641
|
)
|
|
|
41,333,361
|
|
|
|
(35,280
|
)
|
|
Total
Stockholders' Equity (Deficit)Biomatrix Scientific Group, Inc.
|
|
|
(1,726,494
|
)
|
|
|
|
|
|
|
(1,726,494
|
)
|
|
Noncontrolling
Interest in subsidiary
|
|
|
82,050
|
|
|
|
|
|
|
|
82,050
|
|
|
Total
Stockholders' Equity
|
|
|
(1,644,444
|
)
|
|
|
|
|
|
|
(1,644,444
|
)
|
|
TOTAL
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
|
|
|
278,707
|
|
|
|
|
|
|
|
278,707
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BIO
MATRIX SCIENTIFIC GROUP, INC
|
|
|
|
CONSOLIDATED
STATEMENT OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
ended 9/30/2015
As
originally presented
|
|
|
|
Adjustments
|
|
|
|
Year
ended 9/30/2015
Restated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES
|
|
|
192,000
|
|
|
|
|
|
|
|
192,000
|
|
|
COST
AND EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research
and Development
|
|
|
282,295
|
|
|
|
|
|
|
|
282,295
|
|
|
General
and Administrative
|
|
|
1,430,553
|
|
|
|
|
|
|
|
1,430,553
|
|
|
Consulting
and Professional Fees
|
|
|
587,470
|
|
|
|
|
|
|
|
587,470
|
|
|
Rent
|
|
|
58,071
|
|
|
|
|
|
|
|
58,071
|
|
|
Total
Costs and Expenses
|
|
|
2,358,389
|
|
|
|
|
|
|
|
2,358,389
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
LOSS
|
|
|
(2,166,389
|
)
|
|
|
|
|
|
|
(2,166,389
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER
INCOME & (EXPENSES)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Income
|
|
|
1,148
|
|
|
|
|
|
|
|
1,148
|
|
|
Interest
Expense
|
|
|
(56,063
|
)
|
|
|
|
|
|
|
(56,063
|
)
|
|
Other
Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
on Settlement of Debt through Equity Issuance below Fair value
|
|
|
(942,015
|
)
|
|
|
|
|
|
|
(942,015
|
)
|
|
Loss
on Settlement of Debt through issuance of Common Shares of Regen Biopharma, Inc. below fair value
|
|
|
(9,191,857
|
)
|
|
|
|
|
|
|
(9,191,857
|
)
|
|
Interest
Expense attributable to amortization of discount
|
|
|
(150,806
|
)
|
|
|
|
|
|
|
(150,806
|
)
|
|
Expense
Related to issuance of Convertible Debt to Star City
|
|
|
(247,500
|
)
|
|
|
|
|
|
|
(247,500
|
)
|
|
Preferred
Shares of Regen Biopharma, Inc. issued pursuant
|
|
|
|
|
|
|
|
|
|
|
|
|
|
to
contractual obligations
|
|
|
(3,475
|
)
|
|
|
|
|
|
|
(3,475
|
)
|
Other
than Temporary Impairment
Available
for Sale Securities
|
|
|
|
|
|
|
(41,333,361
|
)
|
|
|
(41,333,361
|
)
|
|
Other
Income
|
|
|
0
|
|
|
|
|
|
|
|
0
|
|
|
Other
Expenses
|
|
|
0
|
|
|
|
|
|
|
|
0
|
|
|
Total
Other Income & (Expense)
|
|
|
(10,590,568
|
)
|
|
|
|
|
|
|
(51,923,929
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
INCOME (LOSS)
|
|
|
(12,756,958
|
)
|
|
|
(41,333,361
|
)
|
|
|
(54,090,319
|
)
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Net
Income) Loss attributable to noncontrolling interest Regen Biopharma, Inc.
|
|
|
8,977,733
|
|
|
|
|
|
|
|
8,977,733
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
INCOME (LOSS) available to common shareholders
|
|
|
(3,779,225
|
)
|
|
|
(41,333,361
|
)
|
|
|
(45,112,586
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC AND
FULLY DILUTED
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS
(LOSS)
|
|
$
|
(0.001
|
)
|
|
$
|
(0.015
|
)
|
|
$
|
(0.016
|
)
|
|
Weighted
average number of shares outstanding
|
|
|
2,855,088,489
|
|
|
|
|
|
|
|
2,855,088,489
|
|
BIO
MATRIX SCIENTIFIC GROUP, INC.
CONSOLIDATED
STATEMENT OF CASH FLOWS
|
|
|
Year
Ended
|
|
|
|
Year
Ended
|
|
Year
Ended
|
|
|
|
Year
Ended
|
|
|
|
September
30, 2015
|
|
|
|
September
30, 2015
|
|
September
30, 2014
|
|
|
|
September
30, 2014
|
|
|
|
As
Previously Reported
|
|
Adjustments
|
|
Restated
|
|
As
Previously Reported
|
|
Adjustments
|
|
Restated
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income (loss)
|
|
|
(12,756,958
|
)
|
|
|
(41,333,361
|
)
|
|
|
(54,090,319
|
)
|
|
|
(2,080,958
|
)
|
|
|
|
|
|
|
(2,080,958
|
)
|
|
Adjustments
to reconcile net Income to net cash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(used
in) provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
issued by licensee to subsidiary in payment of services
|
|
|
(192,000
|
)
|
|
|
|
|
|
|
(192,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
issued for services rendered by consultants
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,180
|
|
|
|
|
|
|
|
26,180
|
|
|
Stock
issued for interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,570
|
|
|
|
|
|
|
|
3,570
|
|
|
Stock
issued for expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
48,000
|
|
|
|
|
|
|
|
48,000
|
|
|
Interest
Expense attributable to amortization of discount
|
|
|
150,806
|
|
|
|
|
|
|
|
150,806
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment
of Available for sale Securities
|
|
|
|
|
|
|
41,333,361
|
|
|
|
41,333,361
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
Paid in Capital
|
|
|
|
|
|
|
1,010,650
|
|
|
|
1,010,650
|
|
|
|
|
|
|
|
300,000
|
|
|
|
300,000
|
|
|
Loss
on Settlement of Debt through Equity issuance
|
|
|
|
|
|
|
10,133,872
|
|
|
|
10,133,872
|
|
|
|
|
|
|
|
1,112,230
|
|
|
|
1,112,230
|
|
|
Changes
in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Increase)
decrease in prepaid expenses
|
|
|
(10,000
|
)
|
|
|
|
|
|
|
(10,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase
(Decrease) in Accounts Payable
|
|
|
9,484
|
|
|
|
|
|
|
|
9,484
|
|
|
|
19,920
|
|
|
|
|
|
|
|
19,920
|
|
|
Increase
(Decrease) in Accrued Expenses
|
|
|
207,624
|
|
|
|
|
|
|
|
207,624
|
|
|
|
12,397
|
|
|
|
|
|
|
|
12,397
|
|
|
Increase
(Decrease) in bank Overdraft
|
|
|
(6,137
|
)
|
|
|
|
|
|
|
(6,137
|
)
|
|
|
6,137
|
|
|
|
|
|
|
|
6,137
|
|
|
(Increase)
Decrease in Interest Receivable
|
|
|
(1,148
|
)
|
|
|
|
|
|
|
(1,148
|
)
|
|
|
(233
|
)
|
|
|
|
|
|
|
(233
|
)
|
|
Increase
(Decrease) in Due to Affiliate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(34,895
|
)
|
|
|
|
|
|
|
(34,895
|
)
|
|
(Increase)
Decrease in Note Recievable
|
|
|
(1,629
|
)
|
|
|
|
|
|
|
(1,629
|
)
|
|
|
(10,422
|
)
|
|
|
|
|
|
|
(10,422
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash Provided by (Used in) Operating
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Activities
|
|
|
(12,599,958
|
)
|
|
|
11,144,522
|
|
|
|
(1,455,435
|
)
|
|
|
(2,010,304
|
)
|
|
|
1,412,230
|
|
|
|
(598,074
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
Stock issued for Cash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
|
|
|
|
|
|
|
100,000
|
|
|
Common
Stock issued for cash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Stock issued for Debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Stock issued for Accrued Salaries
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
Stock issued for Accrued Salaries
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Stock issued pursuant to Contractual
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Obligations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
paid in Capital
|
|
|
1,010,650
|
|
|
|
(1,010,650
|
)
|
|
|
0
|
|
|
|
300,000
|
|
|
|
(300,000
|
)
|
|
|
0
|
|
|
Increase
(Decrease) in due to shareholder
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
in subsidiary sold for cash
|
|
|
50,000
|
|
|
|
|
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal
borrowings (repayments) on notes and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible
Debentures
|
|
|
208,603
|
|
|
|
|
|
|
|
208,603
|
|
|
|
316,862
|
|
|
|
|
|
|
|
316,862
|
|
|
Principal
borrowings ( repayments) on Convertible Debentures
|
|
|
1,272,686
|
|
|
|
|
|
|
|
1,272,686
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Increase)
Decrease in Deferred Financing Costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
65,000
|
|
|
|
|
|
|
|
65,000
|
|
|
Loss
on Settlement of Debt through Equity Issuance
|
|
|
10,133,872
|
|
|
|
(10,133,872
|
)
|
|
|
0
|
|
|
|
1,112,230
|
|
|
|
(1,112,230
|
)
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash Provided by (Used in) Financing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Activities
|
|
|
12,675,811
|
|
|
|
(11,143,982
|
)
|
|
|
1,531,289
|
|
|
|
1,894,092
|
|
|
|
(1,412,230
|
)
|
|
|
481,863
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Increase (Decrease) in Cash
|
|
|
75,853
|
|
|
|
|
|
|
|
75,853
|
|
|
|
(116,212
|
)
|
|
|
|
|
|
|
(116,212
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
at Beginning of Period
|
|
|
502
|
|
|
|
|
|
|
|
502
|
|
|
|
116,714
|
|
|
|
|
|
|
|
116,714
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
at End of Period
|
|
|
76,355
|
|
|
|
|
|
|
|
76,355
|
|
|
|
502
|
|
|
|
|
|
|
|
502
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Disclosure of Noncash investing and financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Shares Issued for Debt
|
|
$
|
157,500
|
|
|
|
|
|
|
|
157,500
|
|
|
|
158,000
|
|
|
|
|
|
|
|
158,000
|
|
|
Common
Shares of Regen Biopharma, inc. Issued for Debt
|
|
$
|
1,002,686
|
|
|
|
|
|
|
|
1,002,686
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
paid for Interest
|
|
$
|
0
|
|
|
|
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
0
|
|
|
Cash
paid for Income tax
|
|
$
|
0
|
|
|
|
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE
13. SUBSEQUENT EVENTS
On
October 2, 2015 the Company issued 382,657,778 of its Common Shares in satisfaction of $63,138 of convertible indebtedness.
On
November 13, 2015, the Company amended the Certificate of Incorporation of the Company as follows:
Striking
out Articles Four (4.) thereof and substituting in lieu of said Article the following new Article:
“"FOURTH.
The total number of shares of stock which this corporation is authorized to issue is:
Eight
Billion (8,000,000,000) shares of Common Stock with a par value of $0.0001 each; and Twenty Million (20,000,000) shares of Preferred
Stock with a par value of $0.0001 each, Two Hundred Thousand (200,000) shares of Non Voting Preferred Stock with a par value of
$1.00 each
Non
Voting Convertible Preferred Stock shall convert at the option of the holder into shares of the corporation’s common stock
at a conversion price equal to seventy percent (70%) of the lowest Closing Price for the five (5) trading days immediately preceding
written receipt by the corporation of the holder’s intent to convert.
“CLOSING
PRICE" shall mean the closing bid price for the corporation’s common stock on the Principal Market on a Trading Day as reported
by Bloomberg Finance L.P.
“PRINCIPAL
MARKET" shall mean the principal trading exchange or market for the corporation’s common stock.
“TRADING
DAY” shall mean a day on which the Principal Market shall be open for business.
The
Common Stock authorized by this Certificate of Incorporation may be issued from time to time in one or more series. The Board
of Directors of the Corporation shall have the full authority permitted by law to establish one or more series and the number
of shares constituting each such series and to fix by resolution full or limited, multiple or fractional, or no voting rights,
and such designations, preferences, qualifications,
privileges,
limitations, restrictions, options, conversion rights and other special or relative rights of any series of the Common Stock that
may be desired. Subject to the limitation on the total number of shares of Common Stock which the Corporation has authority to
issue hereunder, the Board of Directors is also authorized to increase or decrease the number of shares of any series, subsequent
to the issue of that series, but not below the number of shares of such series then outstanding. In case the number of shares
of any series shall be so decreased, the shares constituting such decrease shall resume the status which they had prior to the
adoption of the resolution originally fixing the number of shares of such series.
The
Preferred Stock authorized by this Certificate of Incorporation may be issued from time to time in one or more series. The Board
of Directors of the Corporation shall have the full authority permitted by law to establish one or more series and the number
of shares constituting each such series and to fix by resolution full or limited, multiple or fractional, or no voting rights,
and such designations, preferences, qualifications, privileges, limitations, restrictions, options, conversion rights and other
special or relative rights of any series of the Preferred Stock that may be desired. Subject to the limitation on the total number
of shares of Preferred Stock which the Corporation has authority to issue hereunder, the Board of Directors is also authorized
to increase or decrease the number of shares of any series, subsequent to the issue of that series, but not below the number of
shares of such series then outstanding. In case the number of shares of any series shall be so decreased, the shares constituting
such decrease shall resume the status which they had prior to the adoption of the resolution originally fixing the number of shares
of such series.
On
December 15,2015 the Company issued 273,476,806 of its Common Shares in satisfaction of $30,082 of convertible indebtedness.
On
October 28, 2015 Regen issued 3,333,334 of its common shares (“Shares”) for cash consideration of $166,666.
On
November 20, 2015 Regen issued 2,200,000 of its common shares (“Shares”) for cash consideration of $55,000.
On
December 29,2015 Regen issued 4,000,000 of its common shares ( Shares”) for cash consideration of $100,000
On
October 28, 2015 Regen issued 1,666,667 of its shares of Series A Preferred Stock (“Shares”) for cash consideration
of $83,333.
On
October 28, 2015 Regen issued 11,000,000 of its shares of Series A Preferred Stock (“Shares”) to Dr. Harry Lander,
Regen’s President, pursuant to the terms and conditions of that employment agreement entered into by and between Dr. Lander
and Regen dated October 9, 2015.
On
November 20, 2015 Regen issued 400,000 of its shares of Series A Preferred Stock (“Shares”) as consideration for nonemployee
services.
On
November 20, 2015 Regen issued 2,200,000 of its shares of Series A Preferred Stock (“Shares”) for cash consideration
of $55,000.
On
December 29, 2015 Regen issued 4,000,000 of its Series A Preferred Stock ( Shares”) for cash consideration of $100,000