SCHEDULE
14C INFORMATION
Information
Statement Pursuant to Section 14(c) of the Securities Exchange Act of 1934
CHECK
THE APPROPRIATE BOX:
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Preliminary Information Statement |
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Confidential, for Use of the Commission
Only (as permitted by Rule 14c-5(d)) |
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Definitive Information Statement |
BIO-MATRIX
SCIENTIFIC GROUP, INC.
(Name
of Registrant as Specified In Its Charter)
PAYMENT
OF FILING FEE (Check the Appropriate Box):
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No fee required. |
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Fee computed on table below
per Exchange Act Rules 14c-5(g) and 0-11. |
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Title of each
class of securities to which transaction applies: |
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Common Stock |
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Aggregate number
of securities to which transaction applies: |
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Per unit price or other underlying value
of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and
state how it was determined): N/A in aggregate cash to be received by Registrant (rule 240.0-11(c)(2)). |
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Proposed maximum
aggregate value of transaction: _______________________ |
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Check
box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously.
Identify
the previous filing by registration statement number or the Form or Schedule and the date of its filing. |
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Amount Previously
Paid:____ |
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Form, Schedule,
or Registration Statement No.:___ |
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Filing Party:___ |
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Date Filed:___ |
BIO-MATRIX
SCIENTIFIC GROUP, INC.
4700
SPRING STREET, SUITE 304, LA MESA, CALIFORNIA,
__,
2015
To
Our Stockholders:
This
information statement is provided on or about ________2015 by Bio-Matrix Scientific Group, Inc., a Delaware corporation (“We”,
“Us”, “Our” or the “Company”), to holders of our outstanding shares of common and preferred stock
pursuant to Rule 14c-2 under the Securities Exchange Act of 1934, as amended. The purpose of this information statement
is to inform our stockholders that our board of directors (the “Board”) has recommended and holders of outstanding
stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at
which all shares entitled to vote thereon were present and voted have consented in writing to amending 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.
The
abovementioned amendment will become effective upon filing of a Certificate of Amendment of Certificate of Incorporation with
the Delaware Secretary of State. This filing will not occur until after a date which is at least twenty (20) days after the filing
and mailing of this Definitive Information Statement.
As of October 14, 2015 we had 5,000,000,000 shares of common stock, $.0001 par value per share, authorized, of which 4,615,598,
199 were issued and outstanding and 20,000,000 shares of preferred stock, $.0001 par value, authorized of which 2,025,846
Preferred Shares, 742,222 Series B Preferred Shares , 94,852 Series AA Preferred Shares and 40,000 Series AAA Preferred Shares
were issued and outstanding. In addition, as of October 14, 2015 we had authorized 200,000 shares of Non Voting Convertible
Preferred Stock, $1.00 par value per share of which 0 were issued and outstanding. Certain of our stockholders having not
less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted have executed a written consent in favor of the action described above; therefore
no votes of our other stockholders are required to approve the above-referenced action. This information statement is being
sent to you for information purposes only.
WE
ARE NOT ASKING YOU FOR A PROXY AND YOU
ARE
REQUESTED NOT TO SEND US A PROXY.
Very
truly yours,
David
Koos
STOCKHOLDERS
ENTITLED TO VOTE
On
October 13, 2015 , the Board unanimously approved the proposed actions and recommended that such proposal be submitted for stockholder
approval.
The
Board has fixed the close of business on October 14, 2015 , as the record date for determining the stockholders entitled to notice
of the above noted action. Adoption of the proposed action requires the approval of our stockholders having not
less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted. As of October 1, 2015 there were 4,615,598,199 shares of our common
stock were issued and outstanding, 2,025,846 shares of our Preferred Stock were issued and outstanding, 724,222 shares of our
Series B Preferred Stock were issued and outstanding, 94,852 of our Series AA Preferred Shares were issued and outstanding, and
40,000 of our Series AAA Preferred Shares were issued and outstanding . 0 shares of our Non Voting Convertible Preferred Stock
were issued and outstanding
Each
share of our common stock outstanding entitles the holder to one vote on all matters brought before the stockholders.
Each
share of our Preferred Stock outstanding entitles the holder to one vote on all matters brought before the stockholders.
Each
share of our Series B Preferred Stock outstanding entitles the holder to two votes on all matters brought before the stockholders.
Each
share of our Series AA Preferred Stock outstanding entitles the holder to 10,000 votes on all matters brought before the stockholders.
Each
share of our Series AAA Preferred Stock outstanding entitles the holder to 100,000 votes on all matters brought before the stockholders.
Each
share of our Non Voting Convertible Preferred Stock outstanding entitles the holder to 0 votes on all matters brought before the
stockholders.
Certain
of our stockholders, together having not less than the minimum number of votes that would be necessary to authorize or take
such action at a meeting at which all shares entitled to vote thereon were present and voted, have executed a written consent
voting in favor of the proposed action. Because stockholders having not less than the minimum number of votes that
would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and
voted have voted in favor of the proposed action, no votes of our other stockholders are required to approve the action described
herein. Accordingly, this information statement is being furnished to you solely to provide you with information concerning
these matters in accordance with the requirements of the Securities Exchange Act of 1934, as amended, and the regulations promulgated
under that Act, including Regulation 14C.
ECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth information as of the close of business on October 14, 2015 , concerning shares of our common
stock beneficially owned by (i) each director; (ii) each named executive officer; (iii) by all directors and executive officers
as a group; and (iv) each person known by the Company to own beneficially more than 5% of the outstanding shares of common stock.
Based
on 4,615,598,199 shares issued and outstanding as of October 14, 2015
Title
of Class |
Name
and Address of Beneficial Owner |
Amount
and Nature of Beneficial Owner |
Percent
of Class |
Common |
David
R. Koos
C/o
Bio-Matrix Scientific Group, Inc
4700
SPRING STREET, SUITE 203, LA MESA, CALIFORNIA, 91942
|
72,716,693 (a) |
1.57% |
|
All
Officers and Directors
As
a Group(a) |
72,716,693 (a) |
1.57% |
(a) Includes
4,159,085 shares owned by Bombardier Pacific Ventures Inc., which is wholly owned by David Koos and 104,160 shares owned AFN Trust
for which David Koos serves as Trustee and 54 shares owned by the BMXP Holdings Shareholder Business Trust. David R. Koos is the
Trustee of BMXP Holdings Shareholder Business Trust.
The
following table sets forth information as of the close of business on October 1, 2015 concerning shares of our preferred stock
beneficially owned by (i) each director; (ii) each named executive officer; (iii) by all directors and executive officers as a
group; and (iv) each person known by the Company to own beneficially more than 5% of the outstanding shares of preferred stock.
Based
on 2,025,846 shares issued and outstanding as of October 14 , 2015
Title
of Class |
Name
and Address of Beneficial Owner |
Amount
and Nature of Beneficial Owner |
Percent
of Class |
Preferred |
David
R. Koos (a)(b)
C/o
Bio-Matrix Scientific Group, Inc
4700
SPRING STREET, SUITE 203, LA MESA, CALIFORNIA, 91942
|
(a)(b)
523,809 |
25.86% |
|
Copeland Revocable Trust |
166,907 |
8.2% |
|
Ronald Williams |
205,714 |
10% |
|
All
Officers and Directors
As
a Group(a)(b) |
(a)(b) 524,079 |
25.86% |
(a) |
Includes
458,503 Preferred Shares owned by BMXP Holdings Shareholder Business Trust. David R.
Koos is the Trustee of BMXP Holdings Shareholder Business Trust.
(b)
Includes 62,056 shares owned by Bombardier Pacific Ventures Inc., which is wholly owned by David Koos. |
The
following table sets forth information as of the close of business on October 1, 2015 concerning shares of our Series B preferred
stock beneficially owned by (i) each director; (ii) each named executive officer; (iii) by all directors and executive officers
as a group; and (iv) each person known by the Company to own beneficially more than 5% of the outstanding shares of Series B preferred
stock.
Based
on 724,222 shares issued and outstanding as of October 14, 2015
Title
of Class |
Name
and Address of Beneficial Owner |
Amount
and Nature of Beneficial Owner |
Percent
of Class |
Series B Preferred |
David
R. Koos (a)(b)
C/o
Bio-Matrix Scientific Group, Inc
4700
SPRING STREET, SUITE 203, LA MESA, CALIFORNIA, 91942 |
96,012
(a) |
13.25% |
|
All
Officers and Directors
As
a Group(c) |
|
96,012
(a) 13.25% |
(a) |
Includes 9,172 Preferred Shares
owned by BMXP Holdings Shareholder Business Trust. David R. Koos is the Trustee of BMXP Holdings Shareholder Business
Trust. Includes 58,935 shares owned by Bombardier Pacific Ventures Inc., which is wholly owned by David Koos and
836 shares owned by AFN Trust for which David Koos serves as Trustee |
The
following table sets forth information as of the close of business on October 1, 2015 concerning shares of our Series AA
Preferred stock beneficially owned by (i) each director; (ii) each named executive officer; (iii) by all directors and executive
officers as a group; and (iv) each person known by the Company to own beneficially more than 5% of the outstanding shares of Series
AA Preferred stock.
Based
on 94,852 shares issued and outstanding as of October 14, 2015
Title
of Class |
Name
and Address of Beneficial Owner |
Amount
and Nature of Beneficial Owner |
Percent
of Class |
Series AA Preferred |
David
R. Koos
C/o
Bio-Matrix Scientific Group, Inc
4700
SPRING STREET, SUITE 203, LA MESA, CALIFORNIA, 91942 |
94,852 |
100% |
|
All
Officers and Directors
As
a Group(a) |
94,852 |
100% |
The
following table sets forth information as of the close of business on October 1, 2015 concerning shares of our Series
AAA Preferred stock beneficially owned by (i) each director; (ii) each named executive officer; (iii) by all directors and executive
officers as a group; and (iv) each person known by the Company to own beneficially more than 5% of the outstanding shares of Series
AA Preferred stock.
Based
on 40,000 shares issued and outstanding as of October 14, 2015
Title
of Class |
Name
and Address of Beneficial Owner |
Amount
and Nature of Beneficial Owner |
Percent
of Class |
Series AA Preferred |
David
R. Koos
C/o
Bio-Matrix Scientific Group, Inc
4700
SPRING STREET, SUITE 203, LA MESA, CALIFORNIA, 91942 |
40,000 |
100% |
|
All
Officers and Directors
As
a Group(a) |
40,000 |
100% |
DISTRIBUTION
AND COSTS
We
will pay all costs associated with the distribution of this information statement, including the costs of printing and mailing. In
addition, we will only deliver one information statement to multiple stockholders sharing an address, unless we have received
contrary instructions from one or more of the stockholders. Also, we will promptly deliver a separate copy of this
information statement and future stockholder communication documents to any stockholder at a shared address to which a single
copy of this information statement was delivered, or deliver a single copy of this information statement and future stockholder
communication documents to any stockholder or holders sharing an address to which multiple copies are now delivered, upon written
request to us at our address noted above.
Stockholders
may also address future requests regarding delivery of information statements and/or annual reports by contacting us at the address
noted above.
PURPOSE
OF ACTION
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:
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(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. |
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(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.
Pursuant
to the terms and conditions of the Note, the Company is required to reserve the number of the Company’s authorized and unissued
common shares necessary to fully convert the note at the applicable conversion price. The initial amount reserved was 500,000,000
of the Company’s authorized and unissued common shares.
On
October 2, 2015 the Company issued to the Plaintiff 382,657,778 of its common shares in conversion of $63,138 principal amount
of the Note. As a result of this issuance, the Company has determined that the current number of authorized but unissued common
shares are insufficient to meet the Company’s reserve requirement .
DISSENTER’S
RIGHT OF APPRAISAL
No
action will be taken in connection with the proposed action by the Board or the voting stockholders for which Delaware law, our
Certificate of Incorporation or our Bylaws provide a right of a stockholder to dissent and obtain appraisal of or payment for
such stockholder's shares.
INTEREST
OF CERTAIN PERSONS IN OR OPPOSITION TO MATTER TO BE ACTED UPON
No
officer or director has a substantial interest, either directly or indirectly, in the favorable action regarding the resolution.
DELIVERY
OF DOCUMENTS TO SECURITY HOLDERS SHARING AN ADDRESS
One
Information Statement will be delivered to multiple stockholders sharing an address unless the Company receives contrary instructions
from one or more of the stockholders. Upon receipt of such notice, the Company will undertake to deliver promptly a separate copy
of the Information Statement to the Stockholder at the shared address to which a single copy of the documents was delivered and
provide instructions as to how the stockholder can notify the Company that the Stockholder wishes to receive a separate copy of
the Information Statement. In the event that a Stockholder desires to provide such a notice to the Company such notice may be
given verbally by telephoning the Company's offices at (619) 398-3517 or in writing at the Company's offices located at 4700 Spring
Street, Suite 203, La Mesa, California 91942.
WHERE
YOU CAN FIND MORE INFORMATION
We
are subject to the information and reporting requirements of the Securities Exchange Act of 1934, as amended, and in accordance
therewith, we file periodic reports, documents and other information with the Securities and Exchange Commission relating to our
business, financial statements and other matters. These reports and other information may be inspected and are available for copying
at the offices of the Securities and Exchange Commission, 100 F Street, N.E., Washington, DC 20549. Our SEC filings are also available
to the public on the SEC’s website at http://www.sec.gov. Callers in the United States can also call 1-202-551-8090
for further information on the operations of the public reference facilities.
STAR
CITY $300,000 CONVERTIBLE NOTE
Exhibit
A
EXHIBIT
A
THE
SECURITIES OFFERED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY SECTION 4(a)(2) OF THE SECURITIES
ACT OF 1933, AS AMENDED, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER (THE 1933 ACT) $300,000.00 BIO-MATRIX SCIENTIFIC
GROUP, INC. CONVERTIBLE NOTE DUE April 1, 2016
FOR
VALUE TO BE RECIEVED, Bio-Matrix Scientific Group, Inc. (the “Company”) promises to pay to the order of STARCITY CAPITAL,
LLC, or its designee, and authorized successors and permitted assigns (“Holder”), the aggregate principal face amount
of Three Hundred Thousand Dollars (U.S. $300,000.00) on or before April 1, 2016. (“Maturity Date”). No interest shall
accrue against such principal balance. the principal of this Note is payable at 767 3rd Avenue, #25-1a; New York, New York, 10017,
initially, and if changed, last appearing on the records of the Company as designated in writing by the Holder hereof from time
to time. The Company will pay the outstanding principal due upon this note before or on the Maturity Date, less any amounts required
by law to be deducted or withheld, to the Holder of this Note by check or wire transfer addressed to such Holder at the last address
appearing on the records of the Company. The forwarding of such check or wire transfer shall constitute a payment of outstanding
principal hereunder and shall satisfy and discharge the liability for principal on this Note to the extent of the sum represented
by such check or wire transfer.
This
Note is subject to the following additional provisions:
1.
This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations, as requested
by the Holder surrendering the same. No service charge will be made for such registration or transfer or exchange, except the
Holder shall pay any tax or other governmental charges payable in connection therewith.
2.
The Company shall be entitled to withhold from all payments any amounts required to be withheld under applicable laws.
3.
This Note may be transferred or exchanged only in compliance with the Securities Act of 1933, as amended (“Act”) and
applicable state securities laws. Any attempted transfer to a non-qualifying party shall be treated by the Company as void. Prior
to due presentment for transfer of this Note, the Company and any agent of the Company may treat the person in whose name this
Note is duly registered on the Company’s records as the owner hereof for all other purposes, whether or not this Note be
overdue, and neither the Company nor any such agent shall be affected or bound by notice to the contrary. Any Holder of this Note
electing to exercise the right of conversion set forth in Section 4(a) hereof, in addition to the requirements set forth in Section
4(a), and any prospective transferee of this Note, also is required to give the Company written confirmation that this Note is
being converted (“Notice of Conversion”) in the form annexed hereto as Exhibit A. The date of receipt (including receipt
by telecopy) of such Notice of Conversion shall be the Conversion Date.
4.
In the event that payment to the Company by Starcity in accordance with section 4(b) of that settlement agreement by and between
the Company and Starcity dated January 28, 2015 is not made on or before April 1, 2015, such payment constituting consideration
for the Note, ther terms and conditions of this Note shall not be binding upon the Company.
5.
Conversion Price and Discount.
a.
The Holder of this Note is entitled, at its option, at any time after 180 days after the date the $52,500 payment is paid to the
Company, in accordance with section 4(b) of the settlement agreement, to conver 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 immedialtely preceeding a conversion date, as reported by Bloomberg (the”Closing Bid Price”)
(“Initial conversion Price”) or
(ii)
$0.0001.
b.
Notwithstanding the foregoing, other than as provided in 5 (p), 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.
c.
Holder may sell the shares issued upon conversion immediately after issuance, subject to all applicable securities laws.
d.
So long as the requested sale of shares issued upon conversion satisfies the safe harbor provisions of Rule 144 promulgated under
the Securities Act of 1933 (“rule 144”), which allows holders of restricted seurities to make public sales of those
securities when certain conditions are met, the Company agrees to accept an opinion of counsel to the Starcity, which opinion
will be issued at Starcity’s expense, and to issue the Common Shares without restrictive legend of any kind.
e.
On or before February 6, 2015, the Company shall issue an irrevocable transfer agent instructions in the form attached hereto
at Exhibit 1 reserving 500,000,000 shares of BMSN common stock for conversions under this Note (the "Share Reserve").
In addition, on the date that is 180 days after payment by Starcity to BMSN of $52,500, the share reserve shall be increased to
equal the number of shares necessary to fully convert the note at the ConversionPrice on such date and an additional share reserve
instruction, signed by the Company and its Transfer Agent, shall be provided to Starcity in the form attached at Exhibit 1. The
Share Reserve shall be replenished as needed in the same manner to allow for conversions of this Note. Upon full conversion of
this Note, any shares remaining in the Share Reserve shall be cancelled. The Company shall pay all costs associated with issuing
and delivering the shares. The Company should at all times reserve a minimum number of shares equal to the number required if
the remaining balance of the note would be fully converted at the then applicable Conversion Price. The Holder may reasonably
request, and the Company shall comply with all such reasonable requests, to increase the reserve from time to time so that the
reserve, at all times, includes such minimum number of BMSN shares. In connection with each share increase, irrevocable instructions
to the transfer agent signed by the transfer agent and the Company shall be provided to Starcity in the form attached hereto at
Exhibit 1.
f.
In the event that Starcity fails to fund the loan by making a payment of $52,500 to BMSN on or before April 1, 2015, BMSN’s
obligations under this Convertible Note shall be terminated, cancelled and relinquished and all shares so reserved shall be free
from reserve and shall be free from the terms of the irrevocable transfer agent instruction letter at Exhibit 1.
g.
As of February 1, 2015, the Company has provided all Current Public Information as defined in Rule 144(c) and has filed with the
SEC all reports required to be filed under the Securities Exchange Act of 1934 (the "SEC Reports") and covenants to
file all required SEC Reports until the maturity date of the Company's Note.
h.
As of February 1, 2015, except as specifically disclosed in its SEC Reports, there has been no event, occurrence or development
that, individually or in the aggregate, has had or that could reasonably be expected to result in a Material Adverse Effect, neither
the Company nor any of its Subsidiaries has incurred any material liabilities other than those disclosed in the Company’s
financial statements pursuant to GAAP or required to be disclosed in filings made with the SEC.
i.
As of February 1, 2015, the Company has not altered its method of accounting or the identity of its auditors.
j.
As of February 1, 2015, the Company has not declared or made any dividend or distribution of cash or other property to its stockholders,
in their capacities as such, or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock
(except for repurchases by the Company of shares of capital stock held by employees, officers, directors, or consultants pursuant
to an option of the Company to repurchase such shares upon the termination of employment or services).
k.
As of February 1, 2015 no representation or warranty or other statement made by the Company or any Subsidiary in this Note or
in its SEC Reports, contains any untrue statement or omits to state a material fact necessary to make any such statement, in light
of the circumstances in which it was made, not misleading.
l.
The Company acknowledges that Starcity is expressly relying on the provisions of this Section in entering into this Note and consummating
the transactions contemplated hereby.
m.
Such conversion shall be effectuated by the Company delivering the shares of Common Stock to the Holder within 3 business days
of receipt by the Company of the Notice of Conversion. If the shares have not been delivered within 3 business days, the Notice
of Conversion may be rescinded.
n.
Once the Holder has received such shares of Common Stock, the Holder shall surrender this Note to the Company, executed by the
Holder evidencing such Holder's intention to convert this Note or a specified portion hereof, and accompanied by proper assignment
hereof in blank. No fractional shares or scrip representing fractions of shares will be issued on conversion, but the number of
shares issuable shall be rounded to the nearest whole share. Other than as provided in 5(p), in no event shall the Holder be allowed
to effect a conversion if such conversion, along with all other shares of Company Common Stock beneficially owned by the Holder
and its affiliates would exceed 9.99% of the outstanding shares of the Common Stock of the Company.
o.
This Note may not be prepaid.
p.
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) (each of items (i), (ii) and
(iii) being referred to as a "Sale Event"), then, in each case, Holder may convert the unpaid principal amount of this
Note into shares of Common Stock immediately prior to such Sale Event at the Conversion Price without regard to the limitation
of Section 4(b) of this Note.
q.
No provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the
principal of this Note at the time, place, and in the form, herein prescribed.
r.
The Company hereby expressly waives demand and presentmentfor payment, notice of non-payment, protest, notice of protest, notice
of dishonor, notice of acceleration or intent to accelerate, and diligence in taking any action to collect amounts called for
hereunder and shall be directly and primarily liable for the payment of all sums owing and to be owing hereto.
s.
The Company agrees to pay all costs and expenses, including reasonable attorneys' fees and expenses, which may be incurred by
the Holder in collecting any amount due under this Note.
6.
If one or more of the following described "Events of Default" shall occur:
a.
The Company shall default in the payment of principal or interest on this Note, the Settlement Agreement executed concurrently
with this Note or any other note issued to the Holder by the Company; or
b.
Any of the representations or warranties made by the Company herein, in the Settlement Agreement or in any certificate or financial
or other written statements heretofore or hereafter furnished by or on behalf of the Company in connection with the execution
and delivery of this Note, or the Settlement Agreement pursuant to which this note was issued shall be false or misleading in
any respect; or
c.
The Company shall fail to perform or observe, in any respect, any covenant, term, provision, condition, agreement or obligation
of the Company under this Note, the Settlement Agreement or any other note issued to the Holder, and not cure such failure within
10 days of such event; or
d.
The Company shall
(1)
become insolvent;
(2)
admit in writing its inability to pay its debts generally as they mature;
(3)
make an assignment for the benefit of creditors or commence proceedings for its dissolution;
(4)
apply for or consent to the appointment of a trustee, liquidator or receiver for its or for a substantial part of its property
or business;
(5)
file a petition for bankruptcy relief, consent to the filing of such petition or have filed against it an involuntary petition
for bankruptcy relief, all under federal or state laws as applicable; or
(6)
a trustee, liquidator or receiver shall be appointed for the Company or for a substantial part of its property or business without
its consent and shall not be discharged within thirty (30) days after such appointment; or
e.
Any governmental agency or any court of competent jurisdiction at the instance of any governmental agency shall assume custody
or control of the whole or any substantial portion of the properties or assets of the Company; or
f.
One or more money judgments, writs or warrants of attachment, or similar process, in excess of two hundred and fifty thousand
dollars ($250,000) in the aggregate, shall be entered or filed against the Company or any of its properties or other assets and
shall remain unpaid, unvacated, unbonded or unstayed for a periodof fifteen (15) days or in any event later than five (5) days
prior to the date of any proposed sale thereunder; or
g.
The Company shall have its Common Stock de1isted from its primary public market or trading in the Common Stock shall be suspended
for more than 10 consecutive days; or
h.
The Company shall not deliver to the Holder the Common Stock to be issued upon conversion of this Note within 3 business days
of its receipt of a Notice of Conversion; or
i.
The Company shall not replenish the reserve as required in this Note, within one hundred and twenty (120) business days of the
request of the Holder.
j.
The Company shall not be "current" in its filings with the Securities and Exchange Commission; or
k.
The Company shall lose the "bid" price for its stock in a market (including the OTCQB marketplace or other exchange).
Then, or at any time thereafter, unless cured, and in each and every such case, unless such Event of Default shall have been waived
in writing by the Holder (which waiver shall not be deemed to be a waiver of any subsequent default) at the option of the Holder
and in the Holder's sole discretion, the Holder may consider this Note immediately due and payable, without presentment, demand,
protest or (further) notice of any kind (other than notice of acceleration), all of which are hereby expressly waived, anything
herein or in any note or other instruments contained to the contrary notwithstanding, and the Holder may immediately, and without
expiration of any period of grace, enforce any and all of the Holder's rights and remedies provided herein or any other rights
or remedies afforded by law.
7.
STARCITY’S REPRESENTATIONS AND WARRANTIES. Starcity represents and warrants to the Company that:
a.
This Note is acquired for the Holder’s account only for investment purposes only and not with a view towards, or for resale
in connection with, the public sale or distribution thereof, nor with any present intention of distributing or selling the same,
and it has no present or contemplated agreement, undertaking, arrangement, obligation, indebtedness or commitment providing for
the disposition thereof; provided however; that by making the representations herein, Starcity does not agree to hold the Note
or any portion thereof or any Common Stock issued upon conversion of for any minimum or other specific term and reserves the right
to dispose of the Note or any of such Common Stock at any time in accordance with or pursuant to a registration statement or an
exemption under the 1933 Act and applicable state securities laws.
b.
Reliance on Exemptions. Starcity understands that the Note is issued to it by the Company in reliance upon specific exemptions
from the registration requirements of United States federal and state securities laws and the Company is relying upon the truth
andaccuracy of, and Starcity's compliance with, the representations, warranties, agreements, acknowledgments and understandings
of Starcity set forth herein in order to determine the availability of such exemptions and the eligibility of Starcity to acquire
this security.
c.
Non-affiliate Status. Starcity is not, and has not for in excess of ninety (90) days been, and subsequent to the closing of this
transaction not be, an "Affiliate" of the Company, as that term is defined by Rule 144 under the 1933 Act. Starcity
is not acting in concert with any other person in a manner that would require their sales of securities to be aggregated for purposes
of Rule 144 or would cause Starcity to be considered an "Underwriter" as that term is defined by Section 2 of the 1933
Act.
d.
Company Information. Starcity and its advisors, if any, have been furnished with all materials relating to the business, finances
and operations of the Company, including copies of the Company’s most recent publicly available financial statements as
available as of December 31, 2014 on the SEC's EDGAR system. Starcity and its advisors have been afforded the opportunity to ask
questions of the Company. Neither such inquiries nor any other due diligence investigation conducted by Starcity shall modify,
amend or affect Starcity's right to rely on the Company's representations and warranties contained below. Starcity understands
that its investment, including but not limited to this Note (and/or in the Common Stock issuable thereunder), involves a significant
degree of risk.
e.
Governmental Review. Starcity understands that no United States federal or state agency or any other government or governmental
agency has passed upon or made any recommendation or endorsement of the Note or the rights to principal, interest or conversion
of the same into stock.
f.
Transfer or Resale. Starcity understands that
(i)
the sale or resale of the Note or any portion thereof and the Common Stock issuable thereunder has not been registered under the
1933 Act or any applicable state securities laws, and the Note and the Common Stock issuable thereunder may not be transferred
unless
(a)
such security is sold pursuant to an effective registration statement under the 1933 Act,
(b)
the security is sold or transferred pursuant to an exemption from such registration;
(c)
the security is sold or transferred to an "affiliate" (as defined in Rule 144 promulgated under the 1933 Act or a successor
rule; "Rule 144") of Starcity who agrees to sell or otherwise transfer the security only in accordance with this Section
and who is an Accredited Investor, or
(d)
(i) the Common Stock is sold pursuant to Rule 144, if such Rule is available;
(ii)
any sale of such Common Stock made in reliance on Rule 144 may be made only in accordance with theterms of said Rule and further,
if said Rule is not applicable, any resale of such Common Stock under circumstances in which the seller (or the person through
whom the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) and may require compliance
with some other exemption under the 1933 Act or the rules and regulations of the SEC thereunder.
g.
Authorization; Enforcement. This Note has been duly and validly authorized by Starcity. This Note has been duly executed and delivered
on behalf of Starcity, and this Note constitutes a valid and binding agreement of Starcity enforceable in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
or similar laws relating to, or affecting generally, the enforcement of creditors' rights and remedies or by other equitable principles
of general application.
h.
No Brokers. Starcity has taken no action which would give rise to any claim by any person for brokerage commissions, finder's
fees or similar payments relating to this Note or the transactions contemplated hereby.
8.
REPRESENTATIONS AND WARRANTIES OF the Company. the Company represents and warrants to Starcity that:
a.
Authorization; Enforcement.
(i)
the Company has all requisite power and authority to enter into and perform this Note and to consummate the transactions contemplated
hereby and to sell the relevant Purchased Note in accordance with the terms hereof,
(ii)
the execution and delivery of this Note by the Company and the consummation by it of the transactions contemplated hereby have
been duly authorized by the Company and no further consent or authorization of the Company or any person is required,
(iii)
this Note has been duly executed and delivered by the Company, and
(iv)
this Note constitutes a legal, valid and binding obligation of the Company enforceable against the Company in accordance with
its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
or similar laws relating to, or affecting generally, the enforcement of creditors' rights and remedies or by other equitable principles
of general application.
b.
No Conflicts. The execution, delivery and performance of this Note by the Company and the consummation by the Company of the transactions
contemplated hereby will not
(i)
violate or conflict with, or result in a breach of any provision of, or constitute a default (or an event which with notice or
lapse of time or both could become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation
of, any agreement, note, bond, indenture or other instrument to which the Company is a party, or
(ii)
result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and
regulations and regulations of any selfregulatory organizations to which the Company is subject) applicable to the Company or
by which any property of the Company is bound or affected. Except as specifically contemplated by this Note and as required under
the 1933 Act and any applicable federal and state securities laws, the Company is not required to obtain any consent, authorization
or order of, or make any filing or registration with any court, governmental agency, regulatory agency, self-regulatory organization
or stock market or any third party in order for it to execute, deliver or perform any of its obligations under this Note in accordance
with the terms hereof. Except for filings that may be required under applicable federal and state securities laws in connection
with the issuance and sale of the Company's Note, all consents, authorizations, orders, filings and registrations which the Company
is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the date hereof.
c.
No Brokers. The Company has taken no action which would give rise to any claim by any person for brokerage commissions, finder's
fees or similar payments relating to this Note or the transactions contemplated hereby.
d.
No Other Representations. The Company makes no other representations or warranties with respect to the Company, its financial
status, earnings, assets, liabilities, corporate status or any other matter.
9.
GOVERNING LAW; MISCELLANEOUS.
a.
Governing Law; Jurisdiction. THIS NOTE SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
CALIFORNIA APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITH SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT
OF LAWS. THE PARTIES HERETO HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED IN THE CITY
OF SAN DIEGO, CALIFORNIA WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS NOTE. THE AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST CLASS
MAIL SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR PROCEEDING. NOTHING HEREIN
SHALL AFFECT ANY PARTY'S RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. THE PARTIES AGREE THAT A FINAL NON-APPEALABLE
JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT
OR IN ANY OTHER LAWFUL MANNER. THE PARTIES HEREBY WAIVE A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER
OF THE PARTIES HERETO AGAINST THE OTHER IN RESPECT OF ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS NOTE.
b.
Counterparts; Signatures by Facsimile. This Note may be executed in one or more counterparts, each of which shall be deemed an
original but all of which shall constitute one and the same agreement and shall become effective when counterparts have been signed
by each party and delivered to the other party. This Note, once executed by a party, may be delivered to the other party hereto
by facsimile transmission of a copy of this Note bearing the signature of the party so delivering this Note.
c.
Headings. The headings of this Note are for convenience of reference only and shall not form part of, or affect the interpretation
of, this Note.
e.
Severability. In the event that any provision of this Note is invalid or enforceable under any applicable statute or rule of law,
then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform
with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect
the validity or enforceability of any other provision hereof.
f.
Entire Agreement; Amendments. This Note, the Settlement Agreement executed herewith and the exhibits and instruments referenced
herein and therein contain the entire understanding of the parties with respect to the matters covered herein and therein and,
except as specifically set forth herein or therein, neither the Company nor Starcity makes any representation, warranty, covenant
or undertaking with respect to such matters. No provision of this Note may be waived or amended other than by an instrument in
writing signed by the party to be charged with enforcement.
10.
Notices. Any notices required or permitted to be given under the terms of this Agreement shall be sent by certified or registered
mail (return receipt requested) or delivered personally or by courier (including a recognized overnight delivery service, which
may include UPS, Fedex or UnitedStates Postal Service) or by facsimile and shall be effective five days after being placed in
the mail, if mailed by regular United States mail, or upon receipt, if delivered personally or by courier (including a recognized
overnight delivery service) or by facsimile, in each case addressed to a party. The addresses for such communications shall be
as provided in the Settlement Agreement between the parties executed concurrently with this Note. The Company may change its address
by notice similarly given to each Starcity. Each Starcity may change its address by notice similarly given to the Company.
11.
Successors and Assigns. This Note shall be binding upon and inure to the benefit of the parties and their successors and assigns.
Neither the Company nor Starcity shall assign this Note or any rights or obligations hereunder without the prior written consent
of the other. Notwithstanding the foregoing, Starcity also may assign its rights hereunder without further consent of the Company
to any person that purchases the same in a private transaction from Starcity or to any of Starcity’s or its members’
affiliates, without the consent of the Company.
12.
Third Party Beneficiaries. This Note is intended for the benefit of the Parties hereto and their respective permitted successors
and assigns; and is not for the benefit of, nor may any provision hereof be enforced by, any other person.
13.
Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and
shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably
request in order to carry out the intent and accomplish the purposes of this Note and the consummation of the transactions contemplated
hereby.
14.
If the Holder shall commence an action or proceeding to enforce any provisions of this Note, including, without limitation, engaging
an attorney, then if the Holder prevails in such action, the Holder shall be reimbursed by the Company for its attorneys' fees
and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.
15.
In case any provision of this Note is held by a court of competent jurisdiction to be excessive in scope or otherwise invalid
or unenforceable, such provision shall be adjusted rather than voided, if possible, so that it is enforceable to the maximum extent
possible, and the validity and enforceability of the remaining provisions of this Note will not in any way be affected or impaired
thereby.
16.
Neither this Note nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument signed
by the Company and the Holder.
17.
The Company represents that it is not a "shell" issuer and has never been a "shell" issuer or that if it previously
has been a "shell" issuer that at least 12 months have passed since the Company has reported form 10 type information
indicating it is no longer a "shell issuer. Further, the Company will instruct its counsel to either (i) write a 144-3(a)(9)
opinion to allow for salability of the conversion shares or (ii) accept such opinion from Holder's counsel.
18.
The Company will give the Holder direct notice of any corporate actions including but not limited to name changes, stock splits,
recapitalizations etc. This notice shall be given to the Holder as soon as possible under law.
In
Witness Whereof the Company has caused the Note to be duly executed by an officer thereunto duly authorized.
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BIO MATRIX SCIENTIFIC GROUP, Inc. |
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By: /s/ David R. Koos |
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David R. Koos |
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Its: Chief Executive Officer |