SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-Q
| ☒ |
QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934:
For
the quarterly period ended June 30, 2015 |
| ☐ |
TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934:
For
the transition period from ___________ to ___________. |
Commission
File Number 0-32201
BIO-MATRIX
SCIENTIFIC GROUP, INC.
(Exact
name of registrant as specified in its charter)
| |
|
| DELAWARE |
33-0824714 |
| (State
of Incorporation) |
(I.R.S.
Employer Identification No.) |
| |
|
| 4700
Spring Street, Suite 304, La Mesa, California |
91942 |
| (Address
of Principal Executive Offices) |
(Zip
Code) |
(619)
702-1404
(Registrant's
telephone number, including area code)
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes
☒ No ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated
filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
| ☐
Large accelerated filer |
☐
Accelerated filer |
| ☐ Non-accelerated
filer |
☒ Smaller
reporting company |
Indicate
by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934) (check
one): Yes ☒ No ☐
There
were 4,232,931,245 shares of Common Stock outstanding as of June 30, 2015.
PART
I - FINANCIAL INFORMATION
Item
1. - Financial Statements
| BIOMATRIX SCIENTIFIC GROUP, INC. | |
| |
|
| CONSOLIDATED BALANCE SHEET | |
| |
|
| | |
| |
|
| | |
As
of June 30, 2015 | |
As
of September 30, 2014 |
| | |
(unaudited) | |
|
| ASSETS | |
| |
|
| CURRENT ASSETS | |
| | | |
| | |
| Cash | |
| 230,904 | | |
| 502 | |
| Prepaid Expenses | |
| 21,289 | | |
| 15,000 | |
| Note Receivable | |
| 12,051 | | |
| 10,422 | |
| Interest Receivable | |
| 1,081 | | |
| 233 | |
| Total
Current Assets | |
| 265,325 | | |
| 26,157 | |
| | |
| | | |
| | |
| | |
| | | |
| | |
| OTHER ASSETS | |
| | | |
| | |
| Deposits | |
| 4,200 | | |
| 4,200 | |
| Available for Sale
Securities | |
| 3,000 | | |
| 3,000 | |
| Total Other Assets | |
| 7,200 | | |
| 7,200 | |
| | |
| | | |
| | |
| TOTAL ASSETS | |
| 272,525 | | |
| 33,357 | |
| | |
| | | |
| | |
| LIABILITIES AND STOCKHOLDERS'
EQUITY | |
| | | |
| | |
| | |
| | | |
| | |
| CURRENT LIABILITIES | |
| | | |
| | |
| Accounts Payable | |
| 143,663 | | |
| 158,492 | |
| Notes Payable | |
| 251,836 | | |
| 379,233 | |
| Bank Overdraft | |
| 0 | | |
| 6,137 | |
| Accrued Payroll | |
| 682,595 | | |
| 587,094 | |
| Accrued Payroll Taxes | |
| 49,237 | | |
| 51,117 | |
| Accrued Interest | |
| 313,678 | | |
| 271,495 | |
| Accrued Rent | |
| 5,000 | | |
| | |
| Accrued Expenses | |
| 5,000 | | |
| 5,000 | |
| Convertible Note Payable
Net of Unamortized Discount | |
| 158,120 | | |
| 97,701 | |
| Due to Affiliate | |
| 0 | | |
| 0 | |
| Due to Subsidiary
Shareholder | |
| 0 | | |
| | |
| Current portion, note
payable to affiliated party | |
| 1,000 | | |
| 1,000 | |
| Total
Current Liabilities | |
| 1,610,129 | | |
| 1,557,269 | |
| | |
| | | |
| | |
| Total Liabilities | |
| | | |
| 1,557,269 | |
| | |
| | | |
| | |
| STOCKHOLDERS' EQUITY
(DEFICIT) | |
| | | |
| | |
| | |
| | | |
| | |
| Preferred Stock ($.0001 par value) 20,000,000
shares authorized; 20,000,000 shares authorized; 2063821 issues and outstanding as of June 30 2015 and September
30, 2014 | |
| 207 | | |
| 207 | |
| Series AA Preferred ($0.0001 par value) 100,000
shares authorized 94,852 issued and outstanding as of June 30, 2015 and September 30, 2014 | |
| 9 | | |
| 9 | |
| Series AAA Preferred ($0.0001 par value)
1,000,000 shares authorized40,000 shares issued and outstanding as of June 30, 2015 and September 30, 2014 | |
| 4 | | |
| 4 | |
| Series B Preferred Shares ($.0001 par
value) 2,000,000 shares authorized; 725,409 issued and outstanding as of September 30, 2014 and June 30,2015 respectively | |
| 73 | | |
| 73 | |
| Common Stock ($.0001 par value) 5,000,000,000
shares authorized; 4,232,931,345 and 3,079,900,942 issued and outstanding as of June 30,
2015 and September 30 , 2014 respectively | |
| 423,292 | | |
| 307,989 | |
| Non Voting Converible Preferred Stock
($1 Par value) 200,000 shares authorized; 0 shares issued and outstanding as of June 30, 2015 and September 30,
2014 | |
| 0 | | |
| 0 | |
| Additional Paid in
capital | |
| 28,451,806 | | |
| 16,510,439 | |
| Contributed Capital | |
| 509,355 | | |
| 509,355 | |
| Retained Earnings
(Deficit) | |
| 10,395,818 | | |
| 22,461,356 | |
| Accumulated Other
Comprehensive Income (Loss) | |
| (41,333,361 | ) | |
| (41,333,361 | ) |
| Total Stockholders'
Equity (Deficit)Biomatrix Scientific Group, Inc. | |
| (1,552,797 | ) | |
| (1,543,929 | ) |
| Noncontrolling Interest
in subsidiary | |
| 215,193 | | |
| 20,017 | |
| Total Stockholders'
Equity | |
| (1,337,604 | ) | |
| (1,523,912 | ) |
| TOTAL LIABILITIES
& STOCKHOLDERS' EQUITY (DEFICIT) | |
| 272,525 | | |
| 33,357 | |
| | |
| | | |
| | |
| The
Accompanying Notes are an Integral Part of These Financial Statements |
| BIO MATRIX SCIENTIFIC
GROUP,INC | |
| |
| |
| |
|
| | |
| |
| |
| |
|
| CONSOLIDATED
STATEMENT OF OPERATIONS |
| (unaudited) |
| | |
| |
| |
| |
|
| | |
| |
| |
| |
|
| | |
Three
Months ended
June
30,2015 | |
Three
Months ended
June
30, 2014 | |
Nine Months
ended
June
30, 2015 | |
Nine Months
ended
June
30, 2014 |
| | |
| |
| |
| |
|
| REVENUES | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
| COST
AND EXPENSES | |
| | | |
| | | |
| | | |
| | |
| Research
and Development | |
| 68,081 | | |
| 0 | | |
| 93,287 | | |
| 13,867 | |
| General
and Administrative | |
| 494,963 | | |
| 132,975 | | |
| 989,693 | | |
| 459,411 | |
| Consulting
and Professional Fees | |
| 87,367 | | |
| 39,995 | | |
| 473,562 | | |
| 147,998 | |
| Rent | |
| 16,200 | | |
| 0 | | |
| 43,071 | | |
| | |
| Total
Costs and Expenses | |
| 666,611 | | |
| 172,970 | | |
| 1,599,614 | | |
| 621,276 | |
| | |
| | | |
| | | |
| | | |
| | |
| OPERATING
LOSS | |
| (666,611 | ) | |
| (172,970 | ) | |
| (1,599,614 | ) | |
| (621,276 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| OTHER
INCOME & (EXPENSES) | |
| | | |
| | | |
| | | |
| | |
| Interest
Income | |
| 297 | | |
| 14 | | |
| 848 | | |
| 14 | |
| Interest
Expense | |
| (11,726 | ) | |
| (8,981 | ) | |
| (44,991 | ) | |
| (26,388 | ) |
| Other
Income | |
| 0 | | |
| 490 | | |
| | | |
| 490 | |
| Loss
on Settlement of Debt through Equity Issuance below Fair value | |
| (140,000 | ) | |
| | | |
| (976,530 | ) | |
| (984,730 | ) |
| Loss
on Settlement of Debt through Issuance of Common Shares of Regen Biopharma, Inc. below fair value | |
| (937,425 | ) | |
| | | |
| (9,116,857 | ) | |
| | |
| |
| | | |
| | | |
| | | |
| | |
| Interest
Expense attributable to amortization of discount | |
| (73,387 | ) | |
| | | |
| (77,419 | ) | |
| | |
| Expense
Related to issuance of Convertible Debt to Star City | |
| 0 | | |
| | | |
| (247,500 | ) | |
| | |
| |
| | | |
| | | |
| | | |
| | |
| Preferred
Shares of Regen Biopharma, Inc. issued pursuant to contractual obligations | |
| (321 | ) | |
| | | |
| (3,475 | ) | |
| | |
| Other
Expenses | |
| | | |
| (65,000 | ) | |
| | | |
| (65,000 | ) |
| Total
Other Income & (Expense) | |
| (1,162,562 | ) | |
| (73,477 | ) | |
| (10,465,924 | ) | |
| (1,075,614 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| NET
INCOME (LOSS) | |
| (1,829,173 | ) | |
| (246,447 | ) | |
| (12,065,538 | ) | |
| (1,696,890 | ) |
| |
| | | |
| | | |
| | | |
| | |
| NET
INCOME (LOSS) before equity in subsidiary losses | |
| (1,829,173 | ) | |
| (246,447 | ) | |
| (12,065,538 | ) | |
| (1,696,890 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | | |
| | |
| NET
INCOME (LOSS) | |
| (1,829,173 | ) | |
| (246,447 | ) | |
| (12,065,538 | ) | |
| (1,696,890 | ) |
| |
| | | |
| | | |
| | | |
| | |
| Less:
(Net Income) Loss attributable to noncontrolling interest Regen Biopharma, Inc. | |
| 1,274,739 | | |
| 63,388 | | |
| 8,486,861 | | |
| 144,927 | |
| | |
| | | |
| | | |
| | | |
| | |
| NET
INCOME (LOSS) available to common shareholders | |
| (554,434 | ) | |
| (183,059 | ) | |
| (3,578,677 | ) | |
| (1,551,963 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| BASIC AND
FULLY DILUTED | |
| | | |
| | | |
| | | |
| | |
| EARNINGS
(LOSS) | |
$ | (0.0001 | ) | |
$ | (0.0001 | ) | |
$ | (0.0009 | ) | |
$ | (0.0006 | ) |
| Weighted
average number of shares outstanding | |
| 4,160,041,891 | | |
| 2,951,045,145 | | |
| 3,817,242,852 | | |
| 2,819,220,513 | |
| | |
| | | |
| | | |
| | | |
| | |
| The
Accompanying Notes are an Integral Part of These Financial Statements |
| BIO-MATRIX
SCIENTIFIC GROUP, INC. | |
| |
|
| CONSOLIDATED
STATEMENT OF CASH FLOWS | |
| |
|
| (unaudited) | |
| |
|
| | |
| |
|
| |
Nine
Months Ended | |
Nine
Months Ended |
| | |
June
30, 2015 | |
June
30, 2014 |
| | |
| |
|
| CASH
FLOWS FROM OPERATING ACTIVITIES | |
| | | |
| | |
| | |
| | | |
| | |
| Net
Income (loss) | |
| (12,065,538 | ) | |
| (1,696,890 | ) |
| Adjustments
to reconcile net Income to net cash | |
| | | |
| | |
| (used
in) provided by operating activities: | |
| | | |
| 380 | |
| Stock
issued for services rendered by consultants | |
| | | |
| 3,570 | |
| Stock
issued for interest | |
| | | |
| | |
| Stock
issued for expenses | |
| | | |
| 48,000 | |
| Interest
Expense attributable to amortization of discount | |
| 77,419 | | |
| | |
| | |
| | | |
| | |
| Changes
in operating assets and liabilities: | |
| | | |
| | |
| (Increase)
decrease in prepaid expenses | |
| (6,289 | ) | |
| | |
| Increase
(Decrease) in Accounts Payable | |
| (14,830 | ) | |
| 5,902 | |
| Increase
(Decrease) in Accrued Expenses | |
| 140,804 | | |
| (37,581 | ) |
| Increase
(Decrease) in bank Overdraft | |
| (6,137 | ) | |
| | |
| (Increase)
Decrease in Interest Receivable | |
| (848 | ) | |
| (14 | ) |
| Increase
(Decrease) in Due to Affiliate | |
| | | |
| (34,895 | ) |
| (Increase)
Decrease in Note Recievable | |
| (1,629 | ) | |
| (2,222 | ) |
| | |
| | | |
| | |
| Net
Cash Provided by (Used in) Operating | |
| | | |
| | |
| Activities | |
| (11,877,048 | ) | |
| (1,713,750 | ) |
| | |
| | | |
| | |
| CASH
FLOWS FROM FINANCING ACTIVITIES | |
| | | |
| | |
| Additional
paid in Capital | |
| 681,274 | | |
| 300,000 | |
| Increase
( Decrease) in due to shareholder | |
| 0 | | |
| 100,000 | |
| Principal
borrowings (repayments) on notes and | |
| | | |
| | |
| Convertible
Debentures | |
| 60,103 | | |
| 246,360 | |
| Principal
borrowings ( repayments) on Convertible Debentures | |
| 1,272,686 | | |
| | |
| (Increase)
Decrease in Deferred Financing Costs | |
| | | |
| 65000 | |
| Loss
on Settlement of Debt through Equity Issuance | |
| 10,093,387 | | |
| 984,730 | |
| | |
| | | |
| | |
| Net
Cash Provided by (Used in) Financing | |
| | | |
| | |
| Activities | |
| 12,107,450 | | |
| 1,696,090 | |
| | |
| | | |
| | |
| Net
Increase (Decrease) in Cash | |
| 230,402 | | |
| (17,660 | ) |
| | |
| | | |
| | |
| Cash
at Beginning of Period | |
| 502 | | |
| 116,714 | |
| | |
| | | |
| | |
| Cash
at End of Period | |
| 230,904 | | |
| 99,054 | |
| | |
| | | |
| | |
| Supplemental
Disclosure of Noncash investing and financing activities: | |
| | | |
| | |
| Common
Shares Issued for Debt | |
$ | 157,500 | | |
$ | 83,000 | |
| Common
Shares of Regen Biopharma, inc. Issued for Debt | |
$ | 972,686 | | |
| | |
| | |
| | | |
| | |
| The
Accompanying Notes are an Integral Part of These Financial Statements |
| BIO MATRIX SCIENTIFIC
GROUP,INC | |
| |
| |
| |
|
| | |
| |
| |
| |
|
| CONSOLIDATED
STATEMENT OF COMPREHENSIVE INCOME |
| (unaudited) |
| | |
| |
| |
| |
|
| | |
| |
| |
| |
|
| | |
Quarter
ended June 30, 2015 | |
Quarter
ended June 30, 2014 | |
Nine Months
ended
June
30, 2015 | |
Nine Months
ended
June
30, 2014 |
| | |
| |
| |
| |
|
| Net
Income | |
$ | (1,829,173 | ) | |
$ | (246,447 | ) | |
$ | (12,065,538 | ) | |
$ | (1,696,890 | ) |
| Add: | |
| | | |
| | | |
| | | |
| | |
| Unrealized
Gains on Securities | |
| 1,000 | | |
| (6,000 | ) | |
| 0 | | |
| | |
| Less: | |
| | | |
| | | |
| | | |
| | |
| Unrealized
Losses on Securities | |
| | | |
| | | |
| 0 | | |
| (2,000 | ) |
| Total
Other Comprehensive Income (Loss) | |
| 1,000 | | |
| (6,000 | ) | |
| 0 | | |
| (2,000 | ) |
| Comprehensive
Income | |
$ | (1,828,173 | ) | |
$ | (252,447 | ) | |
$ | (12,065,538 | ) | |
$ | (1,698,890 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| The
Accompanying Notes are an Integral Part of These Financial Statements |
BIO-MATRIX
SCIENTIFIC GROUP, INC.
Notes
to consolidated Financial Statements
As
of June 30, 2015
The
accompanying unaudited interim condensed consolidated financial statements of Bio-Matrix Scientific Group , Inc. (“Bio-Matrix
” or “the Company”) have been prepared in accordance with accounting principles generally accepted in the United
States of America and the rules of the United States Securities and Exchange Commission (“SEC”), and should be read
in conjunction with the audited financial statements and notes thereto contained in the Company’s annual report filed with
the SEC on Form 10-K for the year ended September 30, 2014. In general, interim disclosures do not repeat those contained in the
annual statements. In the opinion of management, all adjustments consisting of normal recurring adjustments necessary for a fair
presentation of financial position and the results of operations for the interim periods presented have been reflected herein.
The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.
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 June 30, 2015 consisted of Securities Available for Sale consisting of 10,000,000
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 June 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 June 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 June
30, 2015 and the year ended September 30, 2014 respectively.
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 June 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 $41,645,688 recognized upon the deconsolidation of Entest Biomedical, Inc., the Company generated net
losses of $30,586,221 excluding $663,649 of Equity in Net Losses of Entest Biomedical, Inc. recognized) during the period
from August 2, 2005 (inception) through June 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.
NOTE
5. INCOME TAXES
As
of June 30, 2015
| Deferred tax assets: | |
| | |
| Net operating tax carry forwards | |
$ | 10,412,444 | |
| Other | |
| -0- | |
| Gross deferred tax assets | |
| 10,412,
444 | |
| Valuation allowance | |
| (10,412,444 | ) |
| | |
| | |
| Net deferred tax
assets | |
$ | -0- | |
As
of June 30, 2015 the Company has a Deferred Tax Asset of 10,412,444 completely attributable to net operating
loss carry forwards of approximately $30,624,837 ( 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)
$30,586,221 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 June 30, 2015 the Company is indebted to David Koos, the Company’s Chairman and Chief Executive Officer, in the amount
of $151,286. 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 June 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 June 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.
NOTE
7. NOTES PAYABLE AND CONVERTIBLE NOTES PAYABLE
| | |
September
30, 2014 | |
June
30,
2015 |
| | |
| | | |
| | |
| Bio Technology
Partners Business Trust (Company) | |
| 35,000 | | |
| 14,000 | |
| Bio Technology Partners
Business Trust (Regen) | |
| — | | |
| 84,000 | |
| David R. Koos ( Company)(
Note 6) | |
| 189,065 | | |
| 151,286 | |
| David R. Koos ( Regen)(
Note 6) | |
| 30,168 | | |
| 50 | |
| The
Sherman family Trust | |
| 125,000 | | |
| 2,500 | |
| Total | |
$ | 379,233 | | |
$ | 251,836 | |
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.
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.
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.
CONVERTIBLE
NOTES PAYABLE JUNE 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 June 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 June 30, 2015 the unamortized discount on convertible notes outstanding is $ 222,581.
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 June 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 June 30, 2012 the Company reclassified 10,000,000 common shares of Entest (“Entest Shares”)
as Securities Available for Sale from Securities Accounted for under the Equity Method. The Entest Shares are the Company’s
sole Investment Securities as of June 30, 2015.
NOTE
11. STOCK TRANSACTIONS
Bio-
Matrix Scientific Group, Inc.:
On
April 13, 2015 the company issued 200,000,000 Common Shares in satisfaction of $20,000 of indebtedness.
Regen
Biopharma, Inc.:
Common
Stock
On
April 14, 2015 Regen Biopharma, Inc. issued 1,428, 571 of its common shares in satisfaction of $40,000 of convertible indebtedness.
On
May 12, 2015 Regen Biopharma, Inc. issued 500,000 of its common shares in satisfaction of $15,000 of indebtedness.
On
May 18, 2015 Regen Biopharma, Inc. issued 500,000 of its common shares in satisfaction of $15,000 of indebtedness.
On
May 19, 2015 Regen Biopharma, Inc. issued 1,785,714 of its common shares in satisfaction of $50,000 of convertible indebtedness.
Series
A Preferred Stock
On
April 14, 2015 Regen Biopharma, Inc. issued 1,428, 571 of its shares of Series A Preferred Stock in accordance with the terms
and conditions of a $40,000 face value convertible note issued by Regen Biopharma, Inc..
On
May 19, 2015 Regen Biopharma, Inc. issued 200,000 of its shares of Series A Preferred Stock as consideration for services rendered
by nonemployees.
On
May 19, 2015 Regen Biopharma, Inc. issued 1,785,714 of its shares of Series A Preferred Stock in accordance with the terms and
conditions of a $50,000 face value convertible note issued by Regen Biopharma, Inc..
NOTE
12. SUBSEQUENT EVENTS
On
July 1, 2015 Regen Biopharma, Inc. issued 412,242 of its shares of common stock as consideration for services rendered by a nonemployee.
Item
2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
CERTAIN
FORWARD-LOOKING INFORMATION
Information
provided in this Quarterly report on Form 10Q may contain forward-looking statements within the meaning of Section 21E or Securities
Exchange Act of 1934 that are not historical facts and information. These statements represent the Company's expectations or beliefs,
including, but not limited to, statements concerning future and operating results, statements concern industry performance, the
Company's operations, economic performance, financial conditions, margins and growth in sales of the Company's products, capital
expenditures, financing needs, as well assumptions related to the forgoing. For this purpose, any statements contained in this
Quarterly Report that are not statement of historical fact may be deemed to be forward-looking statements. These forward-looking
statements are based on current expectations and involve various risks and uncertainties that could cause actual results and outcomes
for future periods to differ materially from any forward-looking statement or views expressed herein. The Company's financial
performance and the forward-looking statements contained herein are further qualified by other risks including those set forth
from time to time in the documents filed by the Company with the Securities and Exchange Commission, including the Company's most
recent Form 10Kfor the year ended September 30, 2014. All references to” We”, “Us”, “Company”
or the “Company” refer to Bio-Matrix Scientific Group, Inc.. All references to “Regen” refers to the Company’s
controlled subsidiary Regen Biopharma, Inc.
Material
Changes in Financial Condition:
As
of June 30, 2015 we had Cash on Hand of $230,904 and as of September 30, 2014 we had Cash on Hand of $ 502.
The
increase in Cash on Hand of approximately 45,897% 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
$14,000
lent to Bio Matrix Scientific Group, Inc. by third party lenders during the nine months ended June 30, 2015.
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
$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
$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
$164,
000 lent to Regen Biopharma, Inc. by a third party lender 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
Offset
by:
$56,300
of principal indebtedness repaid to the Company’s Chairman and Chief Executive Officer by Bio Matrix Scientific Group, Inc.
during the nine months ended June 30, 2015and and funds expended in the operation of the Company’s business during the nine
months ended June 30, 2015.
As
of June 30, 2015 we had Prepaid Expenses of $21,289 and as of September 30, 2014 we had Prepaid Expenses of $15,000.
The
increase in Prepaid Expenses of approximately 41% is primarily attributable to:
$5,000
in salary prepaid to Regen Biopharma, Inc.’s Chief Scientific Officer
$1,289
prepaid to an employee of Regen Biopharma, Inc.
As
of June 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 June 30, 2015 we had Accrued Interest Receivable of $1,081 and as of September 30, 2014 we had Accrued Interest Receivable
of $233.
The
increase in of Accrued Interest Receivable of approximately 364% is attributable to interest accrued but unpaid during the nine
months ended June 30 , 2015 resulting from amounts due to Regen Biopharma, Inc. by Entest Bio-Medical, Inc.
As
of June 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 June 30, 2015 we had Accounts Payable of $143,663 and as of September 30, 2014 we had Accounts Payable of 158,492.
The
Decrease in Accounts Payable of approximately 9% is primarily attributable to the payment of outstanding obligations of the Company
in the course of business.
As
of June 30, 2015 we had Notes Payable of $251,836 and as of September 30, 2014 we had Notes Payable of $379,233.
The
decrease in Notes Payable of approximately 34% is primarily attributable to:
$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.
$157,
500 of principal indebtedness of Bio Matrix Scientific Group, Inc. satisfied through the issuance of common shares of Bio Matrix
Scientific Group, Inc during the nine months ended June 30, 2015.
$30,000
of principal indebtedness of Regen Biopharma, Inc. satisfied through the issuance of common shares of of common shares of Regen
Biopharma, Inc. during the three months ended June 30, 2015.
$56,300
of principal indebtedness repaid to the Company’s Chairman and Chief Executive Officer by Bio Matrix Scientific Group, Inc.
during the nine months ended June 30, 2015.
Offset
by:
$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
$14,000
lent to Bio Matrix Scientific Group, Inc. by third party lenders 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
$164,
000 lent to Regen Biopharma, Inc. by a third party lender during the six months ended March 31, 2015.
As
of June 30, 2015 we had Convertible Notes Payable Net of Unamortized Discount of $158,120 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 61% 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 June 30, 2015 is 222, 581.
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 June 30, 2015 we had Accrued Payroll of $682,595 and as of September 30, 2014 we had Accrued Payroll of $587,094.
The
increase in Accrued Payroll of approximately 16.2% 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.
$3,000
of salary accrued during the quarter ended June 30, 2015 but not yet paid due to an employee 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 June 30, 2015 we had Accrued Interest of $313,678 and as of September 30, 2014 we had Accrued Interest of $271,495.
This
increase of approximately 15.5% is primarily attributable to interest on Notes payable and Convertible Notes payable accrued but
unpaid over the nine months ended June 30, 2015.
As
of June 30, 2105 we had Accrued Rent of $5,000 and as of September 30, 2014 we had Accrued Rent of $0.
The
increase in Accrued Rent is attributable to rental expense incurred but not paid by Regen Biopharma, Inc. for the month of June
2015.
Material
Changes in Results of Operations
Revenues
were -0- for the quarter ending June 30, 2015 and -0- for the same quarter ending 2014. Net Losses were $1,829,173 for the three
months ended June 30, 2015. Net Losses were $246,447 for the same quarter ending 2014.
The
increase in Net Loss of approximately 642% is primarily attributable to the recognition of $1,077,425 of expenses recognized during
the quarter ended June 30, 2015 resulting from the issuance for less than fair value of securities in satisfactions of debt and
the recognition of $73,387 of interest expense attributable to amortization of discount of beneficial conversion feature recognized
on convertible notes issued during the three months ended June 30, 2015.
Revenues
were -0- for the nine months ending June 30, 2015 and -0- for the same period ending 2014. Net Losses were $12,065,538 for the
nine months ended June 30, 2015. Net Losses were $1,696,890 for the same quarter ending 2014.
The
increase in Net Loss of approximately 611% is primarily attributable to the recognition of $10,093,387 of expenses recognized
during the nine months ended June 30, 2015 resulting from the issuance for less than fair value of securities in satisfactions
of debt, recognition of $247,500 of expense recognized in connection with the issuance of a $300,000 convertible note pursuant
to a legal settlement during the three months ended March 31, 2015, and the recognition of $77,419 of interest expense attributable
to amortization of discount of beneficial conversion feature recognized on convertible notes issued during the six months ended
June 30, 2015.
Liquidity
and Capital Resources
As
of June 30, 2015 we had $230,904 cash on hand and current liabilities of $1,610,129 such liabilities consisting of Accounts Payable,
Notes Payable, Convertible Notes Payable and Accrued Expenses. We feel we will not be able to satisfy our cash requirements over
the next twelve months and shall be required to seek additional financing.
The
Company plans to meet cash needs through applying for governmental and non-governmental grants as well as selling its securities
for cash. Management has yet to decide what type of offering the Company will use or how much capital the Company will raise.
There is no guarantee that the Company will be able to raise any capital through any type of offerings. Management can give no
assurance that any governmental or non-governmental grant will be obtained by the Company despite the Company’s best efforts.
The Company has identified the National Heart Lung and Blood Institute Clinical Trial Pilot Studies (R34) grant which provides
up to $450,000 in funding over a period of three years as well as the Omnibus Solicitation of the NIH for Small Business Technology
Transfer Grant Applications administered by the Small Business Innovation Research (SBIR) program of the National Institute of
Health as grants for which the Company intends to apply.
We
cannot assure that we will be successful in obtaining additional financing necessary to implement our business plan. We have not
received any commitment or expression of interest from any financing source that has given us any assurance that we will obtain
the amount of additional financing in the future that we currently anticipate. For these and other reasons, we are not able to
assure that we will obtain any additional financing or, if we are successful, that we can obtain any such financing on terms that
may be reasonable in light of our current circumstances. Management plans to raise additional funds by offering securities for
cash. Management has yet to decide what type of offering the Company will use or how much capital the Company will raise. During
the nine months ended June 30, 2015 Regen Biopharma, Inc. raised $865,000 through the issuance of convertible debt. All principal
convertible debt issued by Regen Biopharma, Inc. has been converted into equity as of June 30, 2015.
As
of June 30, 2015 the Company was not party to any binding agreements which would commit the Company to any material capital expenditures.
Item
3. Quantitative and Qualitative Disclosures About Market Risk
As
a smaller reporting company, as defined by Rule 229.10(f) (1) of Regulation S-K, we are not required to provide the information
required by this Item. We have chosen to disclose, however, that we have not engaged in any transactions, issued or bought any
financial instruments or entered into any contracts that are required to be disclosed in response to this item.
Item
4. Controls and Procedures.
Evaluation
of Disclosure Controls and Procedures
As
of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation
of David Koos, who is the Company's Principal Executive Officer/Principal Financial Officer, of the effectiveness of the design
and operation of the Company's disclosure controls and procedures. The Company's disclosure controls and procedures are designed
to provide a reasonable level of assurance of achieving the Company's disclosure control objectives. The Company's Principal Executive
Officer/Principal Financial Officer has concluded that the Company's disclosure controls and procedures are, in fact, effective
at this reasonable assurance level as of the period covered.
Changes
in Internal Controls over Financial Reporting
In
connection with the evaluation of the Company's internal controls during the period commencing on April 1, 2015 and ending June
30, 2015, David Koos, who is both the Company's Principal Executive Officer and Principal Financial Officer has determined that
there were no changes to the Company's internal controls over financial reporting that have been materially affected, or is reasonably
likely to materially effect, the Company's internal controls over financial reporting.
PART
II - OTHER INFORMATION
Item
1. Legal Proceedings.
None.
Item
2. Unregistered Sales of Equity Securities and Use of Proceeds.
BIO-
MATRIX SCIENTIFIC GROUP, INC.:
On
April 13, 2015 the company issued 200,000,000 common shares (“Shares”) in satisfaction of $20,000 of indebtedness.
The Shares
were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended (the “Act”). No underwriters were
retained to serve as placement agents for the sale. The shares were sold directly through our management. No commission or other
consideration was paid in connection with the sale of the shares. There was no advertisement or general solicitation made in connection
with this Offer and Sale of Shares.
REGEN
BIOPHARMA, INC.:
Convertible
Notes
On
April 6, 2015 Regen issued a $40,000 face value Convertible Promissory Note ( “Note”) to joint individual investors
(“Lender”) for consideration of $40,000. The Note becomes due and payable at the demand of the Lender at any time
after March 6, 2016 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 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, 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.
The
Note was issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended (the “Act”). No underwriters
were retained to serve as placement agents for the sale. The Note was sold directly through our management. No commission or other
consideration was paid in connection with the sale of the Note. There was no advertisement or general solicitation made in connection
with this Offer and Sale of the Note. A legend was placed on the Note stating that the Note has not been registered under the
Act and setting forth or referring to the restrictions on transferability and sale of the Note. Cash proceeds received from the
Note will be utilized by Regen for general corporate purposes. On April 14, 2015 1,428,571 Common Shares of Regen were issued
in satisfaction of the abovementioned convertible note. On April 14, 2015 Regen Biopharma, Inc. issued 1,428,571 shares of its
Series A Preferred Stock in accordance with the terms and conditions of abovementioned convertible note
On
May 18, 2015 Regen issued a $50,000 face value Convertible Promissory Note ( “Note”) to an individual investor (“Lender”)
for consideration of $50,000. The Note becomes due and payable at the demand of the Lender at any time after May 7, 2016 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 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, 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.
The
Note was issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended (the “Act”). No underwriters
were retained to serve as placement agents for the sale. The Note was sold directly through our management. No commission or other
consideration was paid in connection with the sale of the Note. There was no advertisement or general solicitation made in connection
with this Offer and Sale of the Note. A legend was placed on the Note stating that the Note has not been registered under the
Act and setting forth or referring to the restrictions on transferability and sale of the Note. Cash proceeds received from the
Note will be utilized by Regen for general corporate purposes. On May 19, 2015 1,785,714 Common Shares of Regen were issued in
satisfaction of the abovementioned convertible note. On May 19, 2015 Regen Biopharma, Inc. issued 1,785,714 shares of its Series
A Preferred Stock in accordance with the terms and conditions of abovementioned convertible note
Common
Stock:
On
April 14, 2015 Regen Biopharma, Inc. issued 1,428, 571 of its common shares (“Shares”) in satisfaction of $40,000
of convertible indebtedness.
The
Shares were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended (the “Act”). No underwriters
were retained to serve as placement agents for the sale. The shares were sold directly through our management. No commission or
other consideration was paid in connection with the sale of the shares. There was no advertisement or general solicitation made
in connection with this Offer and Sale of Shares. A legend was placed on the certificate that evidences the Shares stating that
the Shares have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale
of the Shares.
On
May 12, 2015 Regen Biopharma, Inc. issued 500,000 of its common shares (“Shares”) in satisfaction of $15,000 of indebtedness.
The
Shares were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended (the “Act”). No underwriters
were retained to serve as placement agents for the sale. The shares were sold directly through our management. No commission or
other consideration was paid in connection with the sale of the shares. There was no advertisement or general solicitation made
in connection with this Offer and Sale of Shares.
On
May 18, 2015 Regen Biopharma, Inc. issued 500,000 of its common shares (“Shares”) in satisfaction of $15,000 of indebtedness.
The
Shares were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended (the “Act”). No underwriters
were retained to serve as placement agents for the sale. The shares were sold directly through our management. No commission or
other consideration was paid in connection with the sale of the shares. There was no advertisement or general solicitation made
in connection with this Offer and Sale of Shares.
On
May 19, 2015 Regen Biopharma, Inc. issued 1,785,714 of its common shares (“Shares”) in satisfaction of $50,000 of
convertible indebtedness.
The
Shares were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended (the “Act”). No underwriters
were retained to serve as placement agents for the sale. The shares were sold directly through our management. No commission or
other consideration was paid in connection with the sale of the shares. There was no advertisement or general solicitation made
in connection with this Offer and Sale of Shares. A legend was placed on the certificate that evidences the Shares stating that
the Shares have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale
of the Shares.
On
July 1, 2015 Regen Biopharma, Inc. issued 206,121 common shares ( “Shares”) to a consultant for services.
The
Shares were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended (the “Act”). No underwriters
were retained to serve as placement agents for the sale. The shares were sold directly through our management. No commission or
other consideration was paid in connection with the sale of the shares. There was no advertisement or general solicitation made
in connection with this Offer and Sale of Shares. A legend was placed on the certificate that evidences the Shares stating that
the Shares have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale
of the Shares.
Series
A Preferred Stock:
On
April 14, 2015 Regen Biopharma, Inc. issued 1,428, 571 of its shares of Series A Preferred Stock (“Shares”) in accordance
with the terms and conditions of a $40,000 face value convertible note issued by Regen Biopharma, Inc..
The
Shares were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended (the “Act”). No underwriters
were retained to serve as placement agents for the sale. The shares were sold directly through our management. No commission or
other consideration was paid in connection with the sale of the shares. There was no advertisement or general solicitation made
in connection with this Offer and Sale of Shares. A legend was placed on the certificate that evidences the Shares stating that
the Shares have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale
of the Shares.
On
May 19, 2015 Regen Biopharma, Inc. issued 200,000 of its shares of Series A Preferred Stock (“Shares”) as consideration
for services rendered by nonemployees.
The
Shares were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended (the “Act”). No underwriters
were retained to serve as placement agents for the sale. The shares were sold directly through our management. No commission or
other consideration was paid in connection with the sale of the shares. There was no advertisement or general solicitation made
in connection with this Offer and Sale of Shares. A legend was placed on the certificate that evidences the Shares stating that
the Shares have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale
of the Shares.
On
May 19, 2015 Regen Biopharma, Inc. issued 1,785,714 of its shares of Series A Preferred Stock (“Shares”) in accordance
with the terms and conditions of a $50,000 face value convertible note issued by Regen Biopharma, Inc..
The
Shares were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended (the “Act”). No underwriters
were retained to serve as placement agents for the sale. The shares were sold directly through our management. No commission or
other consideration was paid in connection with the sale of the shares. There was no advertisement or general solicitation made
in connection with this Offer and Sale of Shares. A legend was placed on the certificate that evidences the Shares stating that
the Shares have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale
of the Shares.
Item
3. DEFAULTS UPON SENIOR SECURITIES
None.
Item
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
Item
5. OTHER INFORMATION
None
Item
6. EXHIBITS
31.1 Certification
of Chief Executive Officer
31.2 Certification
of Acting Chief Financial Officer
32.1 Certification
of Chief Executive Officer under Section 906 of the Sarbanes-Oxley Act of 2002.
32.2 Certification
of Acting Chief Financial Officer under Section 906 of the Sarbanes-Oxley Act of 2002.
10.1 Form
of Convertible Note issued by Regen
10.2 AGREEMENT
BY AND BETWEEN REGEN BIOPHARMA, INC. AND ZANDER THERAPEUTICS, INC. (a)
10.3 AGREEMENT
BY AND BETWEEN REGEN BIOPHARMA, INC. AND SANTOSH KESARI
| (a) | Incorporated
by reference to Exhibit 10.1 of that Form 8-K filed by the Company dated June 25, 2015. |
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
| |
Bio-Matrix
Scientific Group, Inc. |
| |
|
| Date:
August 10, 2015 |
By: |
/s/
David R. Koos |
| |
|
David
R. Koos
Chief Executive Officer |
Exhibit
10.1
CONVERTIBLE
PROMISSORY NOTE
THIS
NOTE AND ANY SHARES OF STOCK ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THIS NOTE AND ANY SHARES OF STOCK ISSUABLE UPON THE CONVERSION HEREOF MAY NOT BE
SOLD, OFFERED FOR SALE, MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT COVERING THIS NOTE OR SUCH SHARES UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR THE DELIVERY OF AN OPINION
OF COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED. THIS NOTE IS ALSO SUBJECT TO RESTRICTIONS ON TRANSFER.
Regen
BioPharma, Inc.
Issue
Date: May 7, 2015
Principal
Amount: $50,000
1. Terms.
For value received, the Regen BioPharma, Inc., a Nevada corporation (the “Company”) hereby absolutely and unconditionally
promises to pay to the order of_______, ON DEMAND AT ANY TIME AFTER May 7. , 2016 (the “Maturity Date”), the principal
amount of Fifty Thousand Dollars ($50,000) and interest on the whole amount of said principal sum outstanding and remaining from
time to time unpaid (the “Note”), commencing from the date hereof and continuing until payment in full of this Note
or conversion as hereinafter provided, at an annual rate equal to ten percent (10%) simple interest. Interest shall be payable
quarterly upon demand or upon conversion pursuant to Section 2 hereunder. Interest shall be computed on the basis of the actual
number of days elapsed divided by 365. Principal and interest shall be payable in lawful money of the United States of America,
at the principal place of business of the Lender or at such other place as the Lender may have designated from time to time in
writing to the Company.
2. Conversion.
2.1
Conversion Right. The Lender shall have the right from time to time to convert all or a part of the outstanding and unpaid
principal amount of this Note into fully paid and non- assessable shares of Common Stock, as such Common Stock exists on the Issue
Date, or any shares of capital stock or other securities of the Company into which such Common Stock shall hereafter be changed
or reclassified at the conversion price (the “Conversion Price”) determined as provided herein (a “Conversion”).
The Lender shall have the right to convert one hundred percent (100%) of the Principal Amount immediately upon execution of this
agreement and any accrued interest may be converted as well.
The
number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the principal
amount of this Note to be converted (the “Conversion Amount”) by the applicable Conversion Price as defined in this
Section 2 then in effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit A (the “Notice
of Conversion”), delivered to the Company by the Lender on such conversion date (the “Conversion Date”).
2.2
Conversion Price. The “Conversion Price” shall be defined as a 65% discount to the lowest Trading Price (as
defined below) for the Common Stock during the thirty (30) Trading Day (as defined below) period ending on the latest complete
Trading Day prior to the Conversion Date or 3 cents per share ( whichever is lower) . “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 the Company and the Lender. “Trading
Day” shall mean any day on which the Common Stock is tradable for any period on the OTCQB, or on the principal securities
exchange or other securities market on which the Common Stock is 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 the Company relating to the Lender’s securities.
2.3
Method of Conversion. Subject to Section 2.1, this Note may be converted by the Lender by submitting to the Company a
Notice of Conversion by facsimile, e-mail or other reasonable means of communication dispatched on the Conversion Date prior to
5:00 p.m., New York, New York time. The Lender shall not be required to physically surrender this Note to the Company unless the
entire unpaid principal amount of this Note is so converted. The Lender and the Company shall maintain records showing the principal
amount so converted and the dates of such conversions so as not to require physical surrender of this Note upon each such conversion.
In the event of any dispute or discrepancy, such records of the Company shall, prima facie, be controlling and determinative in
the absence of manifest error. Notwithstanding the foregoing, if any portion of this Note is converted as aforesaid, the Lender
may not transfer this Note unless the Lender first physically surrenders this Note to the Company, whereupon the Company will
forthwith issue and deliver upon the order of the Lender a new Note of like tenor, registered as the Lender (upon payment by the
Lender of any applicable transfer taxes) may request, representing in the aggregate the remaining unpaid principal amount of this
Note.
Upon
receipt by the Company from the Lender of a facsimile transmission, e-mail, or other reasonable means of communication of a Notice
of Conversion meeting the requirements for conversion, the Company shall issue and deliver or cause to be issued and delivered
to or upon the order of the Lender certificates for the Common Stock issuable upon such conversion within five (5) business days
after such receipt. Upon receipt by the Company of a Notice of Conversion, the Lender shall be deemed to be the Lender of record
of the Common Stock issuable upon such conversion, the outstanding principal amount and the amount of accrued and unpaid interest
on this Note shall be reduced to reflect such conversion. All rights with respect to the portion of this Note being so converted
shall forthwith terminate except the right to receive the Common Stock or other securities as herein provided on such conversion.
In lieu of delivering physical certificates representing the Common Stock issuable upon conversion, provided the Company is participating
in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”) program, upon request
of the Lender, the Company shall use its best efforts to cause its transfer agent to electronically transmit the Common Stock
issuable upon conversion to the Lender by crediting the account of Lender’s Prime Broker with DTC through its Deposit Withdrawal
Agent Commission (“DWAC”) system.
2.4
Timing of the sale of Common Shares. Upon expiration of Rule 144, the Company will, at the request of the Investor, remove
the 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 Rule 144.
2.5
Concerning the Shares. The shares of Common Stock and/or Preferred Stock issuable
upon conversion of this Note may not be sold or transferred unless (i) such shares are sold pursuant to an effective registration
statement under the Act or (ii) the Company or its transfer agent shall have been furnished with an opinion of counsel (which
opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that
the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration or (iii) such
shares are sold or transferred pursuant to Rule 144 under the Act (or a successor rule) ("Rule 144") or (iv) such shares
are transferred to an "affiliate" (as defined in Rule 144) of the Company who agrees to sell or otherwise transfer the
shares only in accordance with this Section 2.5 and who is an Accredited Investor as the term Accredited Investor is defined in
Rule 501 of Regulation D, promulgated under the Act.
Subject
to the removal provisions set forth below, until such time as the shares of Common Stock and/or Preferred Stock issuable
upon conversion of this Note have been registered under the Act or otherwise may be sold pursuant to Rule 144 without any restriction
as to the number of securities as of a particular date that can then be immediately sold, each certificate for shares of issuable
upon conversion of this Note that has not been so included in an effective registration statement or that has not been sold pursuant
to an effective registration statement or an exemption that permits removal of the legend, shall bear a legend substantially in
the following form, as appropriate:
"NEITHER
THE ISSUANCE OR SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I)
IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
(B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE LENDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS
NOT REQUIRED UNDER SAID ACT."
The
legend set forth above shall be removed and the Company shall issue to the Lender a new certificate therefore free of any transfer
legend if (i) the Company or its transfer agent shall have received an opinion of counsel, in form, substance and scope customary
for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Common Stock and/or Preferred
Stock may be made without registration under the Act and the shares are so sold or transferred, (ii) such Lender provides
the Company or its transfer agent with reasonable assurances that the Common Stock and/or Preferred Stock issuable upon
conversion of this Note (to the extent such securities are deemed to have been acquired on the same date) can be sold pursuant
to Rule 144 or (iii) in the case of the Common Stock and/or Preferred Stock issuable upon conversion of this Note, such
security is registered for sale by under an effective registration statement filed under the Act or (iv) otherwise may be sold
pursuant to Rule 144 without any restriction as to the number of securities as of a particular date that can then be immediately
sold.
2.6
Incentive to Convert on or prior to 180 Days from Issue Date. Each Lender who converts principal into Common Stock
of the Company on or prior to 180 days from Issuance shall receive one share of Preferred Series “A” Stock of the
Company for each share of Common Stock received through conversion. Lenders who convert principal into Common Stock of the
Company after 180 from Issuance shall receive no shares of Preferred Stock of the Company.
3. Prepayment.
Notwithstanding anything to the contrary contained herein, the Company shall have the right, exercisable on not less than three
(3) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding
principal and accrued interest. Any notice of prepayment hereunder shall be delivered to the Lender at its registered addresses
and shall state that the Company is exercising its right to prepay the Note and the date of prepayment, which shall be not more
than three (3) Trading Days from the date of the prepayment notice. Upon receipt of a prepayment notice, Lender shall have the
right, but not the obligation, to accelerate the conversion period specified in Section 2.1 and convert that portion of the outstanding
principal balance which is subject to prepayment to Common Shares as provided for in Section 2.
4. Events
of Default.
4.1
The following shall constitute events of default (individually an "Event of Default"):
(a)
default in the payment, when due or payable, of an obligation to pay interest or principal under this Note, which default is not
cured by payment in full of the amount due within thirty (30) days from the date that the Lender receives notice of the occurrence
of such default;
(b)
filing of a petition in bankruptcy or the commencement of any proceedings under any bankruptcy laws by or against the Company,
which filing or proceeding, is not dismissed within ninety (90) days after the filing or commencement thereof; or
(c)
failure of the Company to comply in any way with the terms, covenants or conditions contained in this Note.
4.2
If an Event of Default shall occur and be continuing, the Lender may, at its option, declare this Note to be immediately due and
payable without further notice or demand, whereupon this Note shall become immediately due and payable without presentment, demand
or protest, all of which are hereby waived by the Company.
5. Transfer
of Note. This Note may not be transferred or assigned other than a transfer or assignment to an Affiliate of the Lender. As
used herein, the term “Affiliate” means an entity that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, the Lender.
6. Certain
Waivers. The Company hereby expressly and irrevocably waives presentment, demand, protest, notice of protest and any other
formalities of any kind.
7. Amendment,
Modification or Termination. This Note may only be modified, amended, or terminated (other than by payment in full) by an
agreement in writing signed by the Company and the Lender. No waiver of any term, covenant or provision of this Note shall be
effective unless given in writing by the Lender.
8. Governing
Law. This Note and the obligations of the Company hereunder shall be governed by and interpreted and determined in accordance
with the laws of the State of California (excluding the laws and rules of law applicable to conflicts or choice of law).
IN
WITNESS WHEREOF, this Note has been duly executed on behalf of the undersigned on the day and in the year first above written.
| REGEN
BIOPHARMA, INC. |
|
| |
|
| /s/:
David R. Koos |
5/18/
2015 |
| David
R. Koos |
|
| Chairman
and CEO |
|
The
foregoing Convertible Promissory Note is hereby accepted and agreed to by the undersigned on and as of the date first above written.
Exhibit
10.3
AGREEMENT
BY AND BETWEEN REGEN BIOPHARMA, INC. AND SANTOSH KESARI
Agreement
by and between Santosh Kesari (“Consultant”) , a natural person whose address is at 3525 Del Mar Heights Road #133,
San Diego CA 92130 and Regen Biopharma, Inc. (“Company”) , a Nevada corporation whose address is 4700 Spring Street,
St 304, La Mesa, California 91942.
It
is agreed as follows:
1.
SCOPE OF SERVICES
| |
(a) |
Consultant
shall complete all experiments, procedures, studies and tasks described within that document entitled “ Dr. Kesari Lab-Regen
BioPharma Collaborative Project-dCellVax FDA Requested Studies” (“Proposal”) attached to this Agreement
as EXHIBT A and incorporated herein. |
| |
(b) |
Consultant
shall assist the Company in the preparation of an Investigational New Drug Application (“IND”) to be submitted
to the United States Food and Drug Administration (“FDA”) with regard to the marketing of the Company’s
proprietary product “DCellVax” as a treatment for gliomas such a assistance to be provided for a period of no
less than twelve months from the execution date of this Agreement. |
2.
COMPENSATION
| |
(a) |
Consultant
shall receive that number of common shares of the company, valued as of the closing price on the OTCBB as of the date of execution
of this Agreement, which shall equal $66,000 USD (“Signing Shares”). In the event that the date of execution of
this Agreement is not a Trading Day then the Signing Shares shall be valued as of the closing price on the OTCBB as of the
latest complete Trading Day immediately prior to the execution of this Agreement. “Trading Day” shall mean any
day on which the common shares of the Company are tradable for any period on the OTBB. |
| |
(b) |
One
half of the Signing Shares to be issued shall be registered under the Securities Act of 1933 on Form S-8. |
| |
(c) |
Signing
Shares shall be issued to the Consultant on or prior to the expiration of a two week period following the execution of this
Agreement. |
| |
(d) |
Upon
completion of the studies described within Section 3 of the Proposal and successful demonstration of silencing of indolamine
2,3 deoxygenase in human dendritic cells Consultant shall be entitled to receive that number of common shares of the company,
valued as of the closing price on the OTCBB as of the date that successful demonstration of silencing is presented to the
Company by the Consultant (“Milestone Date”) , which shall equal $66,000 USD (“Milestone Shares”).
In the event that the Milestone Date is not a Trading Day then the Milestone Shares shall be valued as of the closing price
on the OTCBB as of the latest complete Trading Day immediately prior to the Milestone Date |
| |
(e) |
One
half of the Milestone Shares to be issued shall be registered under the Securities Act of 1933 on Form S-8. |
| |
(f) |
Milestone
Shares shall be issued to the Consultant on or prior to the expiration of a two week period following the Milestone Date. |
| |
(g) |
Upon
the date of submission to the FDA of a response, prepared by the Consultant, providing evidence of vitro and/or in vivo confirmation
of efficacy of the human siRNA sequences proposed for the clinical trial with regard to IND# 16200 for a proposed Phase I/II
clinical trial assessing safety with signals of efficacy of the dCellVax gene silenced dendritic cell immunotherapy for treating
breast cancer ( “Response Date”) Consultant shall be entitled to receive that number of common shares of the company,
valued as of the closing price on the OTCBB as of the Response Date which shall equal $66,000 USD (“Response Date Shares”).
In the event that the Response Date is not a Trading Day then the Response Date Shares shall be valued as of the closing price
on the OTCBB as of the latest complete Trading Day immediately prior to the Response Date. |
| |
(h) |
One
half of the Response Date Shares to be issued shall be registered under the Securities Act of 1933 on Form S-8. |
| |
(i) |
Response
Date Shares shall be issued to the Consultant on or prior to the expiration of a two week period following the Response Date. |
3.
NON DISCLOSURE
| |
(a) |
All
information, whether in oral, written, graphic, electronic or other form, disclosed by the Company to the Consultant shall
be deemed to be “Proprietary Information.” In particular, Proprietary Information includes, without limitation,
any trade secrets, confidential information, ideas, inventions or research and development information; matters of a technical
nature, including technology; notes, products, know-how, engineering or other data (including test data and data files); specifications,
processes, techniques, formulae or work-in-process; manufacturing, planning or marketing procedures, clinical data and regulatory
strategies or information; accounting, financial or pricing procedures or information, budgets or projections, or personnel
or salary structure/compensation information; information regarding suppliers, clients, customers, employees, contractors,
investors or investigators of the Company, information which has been designated in writing as confidential by the Company;
programs, procedures (including operating procedures), processes, methods, guidelines, policies, proposals or contracts; computer
software, data bases or programming; and any other information which, if divulged to a third party, could have an adverse
impact on the Company, or on any third party to which it owes a confidentiality obligation. In addition, “Proprietary
Information” includes any of the foregoing relating to the past, present or future operations, organization, projects,
finances, business interests, methodology or affairs of any third party to which the Company owes a duty of confidentiality
including, without limitation, the mere fact that the Company is or may be working with or for any client. |
| |
(b) |
The
obligations of confidentiality shall not apply to any Proprietary Information that was known by the Consultant at the time
of disclosure to it by such Company, or that is independently developed or discovered by the Consultant after disclosure by
such Company, without the aid, application or use of any item of such Company’s Proprietary Information, as evidenced
by written records; now, or subsequently becomes, through no act or failure to act on the part of the Consultant, generally
known or available; is disclosed to the Consultant by a third party authorized to disclose it; or is required by law or by
court or administrative order to be disclosed; provided, that the Consultant shall have first given prompt notice to such
Company of such required disclosure. |
| |
(c) |
Consultant
shall exercise due care to prevent the unauthorized use or disclosure of the Company’s Proprietary Information, and
shall not, without the Company’s prior written consent, disclose or otherwise make available, directly or indirectly,
any item of the Company’s Proprietary Information to any person or entity other than those employees, independent contractors
or agents of the Consultant (collectively, “Representatives”), to the extent such Representatives reasonably need
to know the same in order to evaluate such Proprietary Information, to participate in the business relationship between the
parties, or to make decisions or render advice in connection therewith. Consultant shall advise its Representatives who have
access to the Company’s Proprietary Information of the confidential and proprietary nature thereof, and agrees that
such Representatives shall be bound by terms of confidentiality and restrictions on use with respect thereto that are at least
as restrictive as the terms of this Agreement. |
| |
(d) |
Consultant
shall exercise due care to prevent the unauthorized use or disclosure of the Company’s Proprietary Information, and
shall not, without the Company’s prior written consent, disclose or otherwise make available, directly or indirectly,
any item of the Company’s Proprietary Information to any person or entity other than those employees, independent contractors
or agents of the Consultant (collectively, “Representatives”), to the extent such Representatives reasonably need
to know the same in order to participate in any business relationship between the parties, or to make decisions or render
advice in connection therewith. Consultant shall advise its Representatives who have access to the Company’s Proprietary
Information of the confidential and proprietary nature thereof, and agrees that such Representatives shall be bound by terms
of confidentiality and restrictions on use with respect thereto that are at least as restrictive as the terms of this Agreement. |
| |
(e) |
Consultant
shall use the Company’s Proprietary Information solely for the purposes of performing his duties pursuant to this Agreement
and shall not make any other use of the Company’s Proprietary Information without the Company’s specific written
authorization. |
| |
(f) |
All
Proprietary Information of the Company (including all copies thereof) shall be and at all times remain the property of such
Company, and all non-oral Proprietary Information of the Company which is then in the Consultant’s possession or control
shall be destroyed or returned to the Company promptly upon its request at any time, and in any event, no later than 60 days
following any expiration or termination of this Agreement. |
| |
(g) |
Nothing
in this Agreement shall be construed, by implication or otherwise, as a grant of any right or license to trademarks, inventions,
copyrights or patents, as a grant of a license to either Consultant to use any of the Company’s Proprietary Information
except as expressly set forth herein. |
| |
(h) |
The
provisions of Section 3 of this Agreement shall survive until such time as all Confidential Information disclosed hereafter
becomes publically known and made generally available through no action or inaction of Consultant. |
4.
REPRESENTATIONS AND WARRANTIES OF COMPANY
| |
(a) |
Company
is a corporation duly organized, validly existing and in good standing under the laws of the state its incorporation and has
the requisite corporate power and authority to enter into and perform its obligations under this Agreement without the consent,
approval or authorization of, or obligation to notify, any person, entity or governmental agency which consent has not been
obtained. |
| |
(b) |
The
execution, delivery and performance of this Agreement by Company does not and shall not constitute Company’s breach
of any statute or regulation or ordinance of any governmental authority, and shall not conflict with or result in a breach
of or default under any of the terms, conditions, or provisions of any order, writ, injunction, decree, contract, agreement,
or instrument to which the Company is a party, or by which Company is or may be bound. |
5.
REPRESENTATIONS AND WARRANTIES OF CONSULTANT
| |
(a) |
Consultant
has the requisite power and authority to enter into and perform his obligations under this Agreement without the consent,
approval or authorization of, or obligation to notify, any person, entity or governmental agency which consent has not been
obtained. |
| |
(b) |
The
execution, delivery and performance of this Agreement by Consultant does not and shall not constitute Consultant’s breach
of any statute or regulation or ordinance of any governmental authority, and shall not conflict with or result in a breach
of or default under any of the terms, conditions, or provisions of any order, writ, injunction, decree, contract, agreement,
or instrument to which the Consultant is a party, or by which Company is or may be bound. |
6.
RESTRICTED SECURITIES ACKNOWLEDGMENT
Consultant
acknowledges that any securities issued pursuant to this Agreement that shall not be registered pursuant to the Securities Act
of 1933 shall constitute “restricted securities” as that term is defined in Rule 144 promulgated under the Securities
Act of 1933, and shall contain the following restrictive legend:
“THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR SECURITIES LAWS OF
ANY STATE AND MAY NOT BE OFFERED, SOLD, ASSIGNED, PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION
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THE COMPANY THAT THE PROPOSED TRANSFER IS EXEMPT FROM THE ACT OR SUCH LAWS.”
7.
SPECIFIC PERFORMANCE
Any
breach of this Agreement may result in irreparable damage to Company for which Company will not have an adequate remedy at law.
Accordingly, in addition to any other remedies and damages available, Consultant acknowledges and agrees that Company may immediately
seek enforcement of this Agreement by means of specific performance or injunction, without any requirement to post a bond or other
security.
8.
EXECUTION
This
Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same Agreement
and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood
that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission,
such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed)
with the same force and effect as if such facsimile signature page were an original thereof.
9.
ENTIRE AGREEMENT
This
Agreement constitutes a final written expression of all the terms of the Agreement between the parties regarding the subject matter
hereof, are a complete and exclusive statement of those terms, and supersedes all prior and contemporaneous Agreements, understandings,
and representations between the parties.
10.
SEVERABILITY
If
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remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt
to agree upon a valid and enforceable provision that is a reasonable substitute therefore, and upon so agreeing, shall incorporate
such substitute provision in this Agreement
11.
GOVERNING LAW, VENUE, WAIVER OF JURY TRIAL
All
questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed
and enforced in accordance with the internal laws of the State of California, without regard to the principles of conflicts of
law thereof. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in California
for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed
herein and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or inconvenient venue for such
proceeding. If either party shall commence an action or proceeding to enforce any provisions of this Agreement, then the prevailing
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incurred with the investigation, preparation and prosecution of such action or proceeding.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized signatories
as of the date first indicated above.
| Company |
Consultant |
| By:/s/
David R. Koos |
By:/s/Santosh
Kesari |
| David
R. Koos |
Dr.
Satosh Kesari |
| Chairman
& CEO |
|
| Regen
Biopharma, Inc. |
|
| Date:
June 8, 2015 |
Date:
May 13, 2015 |
EXHIBIT
A
Dr.
Kesari Lab-Regen BioPharma Collaborative Project
dCellVax
FDA Requested Studies
April
2015
Background
Regen
BioPharma has purchased a US patent and licensed Benitec Biopharma’s ddRNAi technology for the field of use of inhibiting
indolamine 2,3 deoxygenase (IDO) in dendritic cells (DC) for the purpose of immune stimulation in cancer patients.
Through
silencing of murine IDO in DC, Regen scientist Dr. Wei-Ping Min demonstrated inhibition of melanoma and breast cancer in the B16[1]
and 4T1 models[2], respectively.
Based
on these preclinical data, Regen BioPharma submitted an IND for treatment of breast cancer in patients that have failed conventional
therapy. The FDA responded to this IND requesting “in vitro and/or in vivo confirmation of efficacy of the human siRNA sequences
proposed for the clinical trial” before the clinical trial can be initiated.
The
experiments proposed below are designed to demonstrate in vitro efficacy of human IDO siRNA in the human DC in vitro model. Upon
completion of these experiments, the results will be submitte to the FDA for allowance to initiate clinical trials.
Objectives
| |
• |
Development
and optimization of sensitive molecular methods (reverse transcriptase polymerase chain reaction (RT-PCR)) for detecting the
IDO gene, initially in human cancer cells[3], which then will be transferred to human dendritic cells |
| |
• |
Development
and optimization of short interfering RNA (siRNA) sequences for effective silencing of IDO expression in cancer cells. |
| |
• |
Application
of IDO detection and silencing methodology to human DC (in vitro dCellVax). |
| |
• |
Demonstration
of in vitro augmentation of immunogenicity by IDO-silenced DC as compared to control DC |
| |
o |
Mixed
lymphocyte reaction |
| |
o |
Cytokine
Production (IL-4, IL-10, IL-12, IFN-gamma) |
| |
o |
Increased
Tryptophan, decreased kyneurinine in culture media |
Rationale
Although
the main role of the immune system is to protect the body from foreign pathogens, the immune system also requires a “regulatory”
arm in order to prevent immune responses from destroying not only the pathogen, but also the body. Examples of unrestrained immune
responses include autoimmune conditions, in which the immune system starts attacking the pancreas (Type 1 Diabetes), the nervous
system (multiple sclerosis) or collagen protein in the joints (rheumatoid arthritis). A more severe example of unrestrained immune
response is sepsis, where the immune activation against blood borne infections results in death of the patient. The immune system
possesses regulatory cells, whose role in the body is to restrain immunity. One specific type of regulatory cell is the immature
DC. While mature DC are known to be one of the most potent activators of immunity, in the immature state, DC actively suppress
T cell activation. Immature dendritic cells are found in pregnancy to protect the fetus from maternal immune attack against proteins
found on the fetus that are inherited from the father[4]. Immature DC are also found in tumors, and contribute to tumor
escape from the immune system[5]. Other conditions associated with immune regulation such as viral infections[6],
bacterial infections[7], and remission from autoimmune diseases[8] are associated with immature DC.
One
of the main molecular mechanisms by which immature DC suppress the immune system is through high expression of the enzyme indolamine
2,3 deoxygenase (IDO). IDO was originally discovered in 1967 in the rabbit intestine and has been the object of renewed attention
by immunologists in view of its capacity to act as an inducible negative regulator of T cell viability, proliferation, and activation
during inflammation. In addition to potential in direct effects by IDO on APC function, IDO has been proposed to suppress T cells
by degrading tryptophan and increasing the level of tryptophan degradation products (kynureneria and quinolinate). Both of these
activities suppress T cell response by inducing T cell apoptosis.
It
has been shown that immune suppression in cancer[9], pregnancy[10], and viral infection[11] can
be overcome by chemical inhibition of IDO. Unfortunately, chemical inhibitors of IDO, to date, do not possess specificity towards
IDO, and are associated with various side effects[12]. Additionally, administration of chemical inhibitors is not selective
to immune cells, given that IDO possesses numerous functions, systemic administration of inhibitors is not likely to induce sufficient
suppression of the enzyme where it is needed, in the tumor associated DC.
Induction
of RNA interference (RNAi) by administration of siRNA represents a highly specific and efficient mechanism of blocking gene expression.
As an endogenous viral defense mechanism, RNA interference (RNAi) uses a specific subset of enzymes that can bind and cleave homologous
transcripts within mammalian and plant cells. Dr. Wei-Ping Min from the University of Western Ontario has previous used siRNA
to silence immune-associated genes for the purpose of inducing immunomodulation in a publication with Dr. David Koos CEO of Regen
BioPharma[13]. Whereas in the mentioned publication the gene for IL-12 was silenced in DC in order to inhibit immunity,
Regen BioPharma believes that silencing of IDO in DC will stimulate cancer immunity.
Goals
| |
1. |
Establishment
of assay system to detect IDO gene expression in human cancer cell lines |
Cancer
cell lines such as HeLa (cervical)[14] and MDA-MB-231 (breast)[15] have been published to express human
IDO. RT-PCR methodology methodology with primers specific to human IDO in these cell lines. This methodology will allow for detection
of the IDO gene. It is important to qualitatively establish detection of this gene so that we can quantify the level of gene silencing
that is achieved by the siRNA sequences.
| |
2. |
Identification
of novel human siRNA sequences silencing IDO |
Sequences
will be developed using bioinformatics algorithms, as well as based on prior literature. Approximately 10-20 sequences will be
utilized to identify optimal silencing effect on cancer cell lines. (The use of cancer cell lines is to safe costs on given
optimizing the detection and efficacy of silencing, dendritic cells are not ideal for screening experiments due to difficulty
in expanding them).
| |
3. |
Application
of optimized sequences to human DC |
Once
ideal sequences for detection of IDO and silencing elucidated, they will be applied to human DC. Gene silencing efficacy will
be assessed by RT-PCR and immune stimulating ability will be assessed by ability to induce proliferation of allogeneic lymphocytes.
This will be the human preclinical data that goes into the IND package.
Proposed
Protocols
Stage
1 of Project: Quantification of IDO mRNA Detection
MDA-MB-231
human breast cancer cells will be obtained from American Type Tissue Culture (ATCC: Manassas, VA) and grown under fully humidified
5% CO2 environment with DMEM supplemented with 10% FBS, 2% sodium pyruvate, non-essential amino acids (2 mM), penicillin (100
units/ml), streptomycin (100 µg/ml), and glutamine (4 mM) (Gibco-BRL). HeLa cells will be grown under the same conditions
with the exception that MEM will be used as the base media. Cells are passaged by trypsinization twice weekly or as needed based
on 75% confluency. For some experiments IDO induction will be achieved by pretreatment with interferon gamma at a concentration
of 1 IU/ml.
Total
RNA will be isolated using the RNeasy Mini Kit (QIAGEN). Specifically, cells will be trypsinized and harvested at a concentration
of 5-10 x 106 cells, as a cell pellet after washing in PBS an appropriate volume of Buffer RLT Plus will be added and the cells
will be vortexted for 30 seconds. This will result in lysis of the cells, with the lysate then being spun at 3 minutes at 15000g.
The supernatant is then removed and applied to a gDNA Eliminator spin column which is then placed in a 2 ml collection tube. Subsequently,
the collected material is centrifuged for 30 s at ≥8000 x g (≥10,000 rpm). The column is discarded and the flow-through
is saved. The same volume (usually 350 μl or 600 μl) of 70% ethanol is added to the flow-through that has been collected.
Up to 700 μl of the sample, including any precipitate, is then added to an RNeasy spin column placed in a 2 ml collection tube
and the tube is centrifuged for 15 s at ≥8000 x g. The flow-through is discarded. 700 μl of Buffer RW1 is then added
to the RNeasy Mini spin column (in a 2 ml collection tube) and centrifuged for 15 s at ≥8000 x g. 500 μl of Buffer
RPE is added to the RNeasy spin column and centrifuged for 15 s at ≥8000 x g. Subsequently 500 μl of Buffer RPE is
added to the RNeasy spin column and centrifuged for 2 min at ≥8000 x g (≥10,000 rpm). The RNeasy spin column will
then be placed in a new 1.5 ml collection tube. Approximately 30–50 μl RNase-free water is added directly to the spin
column membrane and centrifuged for 1 min at ≥8000 x g to elute the RNA. Reverse transcription performed using Moloney
murine leukemia virus reverse transcriptase (Promega) following the manufacturer's instructions. Reverse-transcribed products
will be analyzed on a Mastercyler Ep Realplex (Eppendorf) using the QuantiFast SYBR Green PCR Kit (QIAGEN) according to the manufacturer's
instructions.
As
gene-specific primers, the following oligo-DNAs will be assessed
| |
a) |
Forward
(5′-3′): IDO, GGTCATGGAGATGTCCGTAAGGT |
| |
b) |
Forward
5′-GGAAATAGCAGCTGCTTCTGCA-3′; IDO reverse, 5′-CTCCTCAGGGAGACCAGAGCTT3′ |
| |
c) |
Forward
5′-tgccaaatccacaggaaaat-3′, reverse: 5′-gtttgccaagacacagtctg-3′; |
| |
d) |
Forward
5′-caaatccacgatcatgtgaacc-3′, reverse: 5′-agaacccttcatacaccagac-3′, |
| |
e) |
Forward
5′-GGAAATAGCAGCTGCTTCTGCA-3′; reverse 5′-CTCCTCAGGGAGACCAGAGCTT-3′ |
| |
f) |
Forward
5’ TTCAGTGCTTTGACGTCCTG; reverse 5’ TGGAGGAACTGAGCAGCAT |
As
an internal control β-actin mRNA was also amplified using the following primers: β-actin forward, 5′-ATCTGGCACCACACCTTCTACAATGAGCTGCG-3′;
β-actin reverse, 5′-CGTCATACTCCTGCTTGCTGATCCACATCTGC-3
PCR
products will be size-separated on a 1.5% agarose gel; expression levels
normalized to the GAPDH mRNA product, and will be visualized by SYBR Safe DNA gel staining (Invitrogen).
A
minimum of 3 independent experiments will be performed per sequence assessed. If inducible expression is not observed, sequences
will be modified using internal algorithms, as well as variations in cycle number and annealing/reannealing temperatures.
Anticipated
Results: Sequences from the proposed sequences will possess varying ability to detect mRNA. This will be used as the test system
for human IDO expression. We anticipate significantly higher expression of IDO mRNA in cells that have been pretreated for 48
hours with Interferon Gamma, based on previous publications[16].
Stage
2 of Project: Identification of novel human siRNA sequences silencing IDO.
HeLa
and MDA cells either growing in stable conditions or pretreated with 1 IU/ml of interferon gamma for 48 hours under conditions
identified in stage 1 of the project to induce maximal expression of the IDO gene.
Various
siRNA sequences will be tested that have been previously shown to inhibit IDO or have been generated based on gene-specific algorithms.
To prepare the modified siRNA duplexes, complementary strands were mixed at equal concentrations, then heated at 70° for 1
min and allowed to anneal at 37° for 30 min. Successful annealing will be assessed with polyacrlamide gel electrophoresis.
Specific
sequences tested will include:
sense
strand
- 5′-TAATACGACTCACTATAGCCGTGAGTTTGTCCTTTCAA-3′
- 5′-TTGAAAGGACAAACTCACGGCTATAGTGAGACGTATTA-3′
- 5′-UCACCAAAUCCACGAUCAUUU-3’
- 5′-UUUCAGUGUUCUUCGCAUAUU-3’
- 5′-GUAUGAAGGGUUCUGGGAAUU-3′
- 5′-GAACGGGACACUUUGCUAAUU-3′
DNA
oligonucleotides for the anti-sense strand
- 5′-TAATACGACTCACTATAGAAAGGACAAACTCACGGACT-3′
- 5′-AGTCCGTGAGTTTGTCCTTTCTATAGTGAGACGTATTA-3′
- 5′-PUAUGCGAAGAACACUGAAAUU-3′
- 5′-PUAUGCGAAGAACACUGAAAUU-3′
- 5′-PUUCCCAGAACCCUUCAUACUU-3′
- 5′-PUUAGCAAAGUGUCCCGUUCUU-3′
Cells
will be transfected using the Amaxa Nucleofector Kit V (Amaxa biosystems, Koeln, Germany). Briefly, 3 * 105 cells
were resuspended in 100 µl of the nucleofector solution V and mixed with 1.5 µg of siRNA, then electroporated using
program V005. Alternatively, lipofectamine based transfection may be utilized depending on efficacy.
Suppression
of IDO gene expression will be assessed using the method identified as most sensitive from Project Stage 1.
Anticipated
Results: These experiments will provide ideal siRNA sequences for silencing of the IDO gene. These sequences will be utilized
as the basis of silencing IDO in DC in the next Stage of the project.
Stage
3 of Project: Application of optimized sequences to human DC.
DC
will be generated from peripheral blood of healthy volunteers. Peripheral blood mononuclear cells (PBMC) will be purified from
heparinized blood on lymphoprep cushions (LSM; Organon Teknilra Corp., Rockville, MD) and resuspended in RPMI-10% FCS, and allowed
to adhere to 6-well plates (Costar Corp., Cambridge, MA). After 2 h incubation at 37 Celsius, the nonadherent cells will be removed
and the adherent cells will subsequently be washed in phosphate buffered saline (PBS), followed by detachment by incubation with
Mg 2+ and Ca 2+ free PBS containing 0.5 mM EDTA at 37 Celsius. The adherent fraction is subsequently cultured at 3 x 10(6)/ml
in RPMI-10% FCS supplemented with 50 ng/ml GM-CSF and 1,000 U/ml IL-4. Media is changed every 2 days for a total of 8 days culture.
DC will be isolated by positive selection for CD83 and subsequently exposed to IFN-gamma on day 6 of culture. The siRNA sequences
identified in Stage 2 of the project will be utilized. IDO gene expression will be assessed by RT-PCR using primers identified
in Stage 1 of the project.
Successfully
silenced DC will be assessed for immunological responsiveness by ability to stimulate mixed lymphocyte reaction
Dendritic
Cell Isolation from Human Blood – Adherent Method
Materials:
| Reagent |
Vendor |
Cat# |
Amount |
Price |
| Recombinant
Human IL-4 CF |
RND
Systems |
204-IL-010/CF |
1
mg |
$4,300
|
| |
|
|
10
µg |
$205
|
| |
|
|
50
µg |
$679
|
| Recombinant
Human GM-CSF |
RND
Systems |
215-GM-010/CF |
10
µg |
$219
|
| |
|
|
50
µg |
$799
|
| RPMI
1640 with L glutmine and 25mM HEPES buffer |
Life
Technologies |
22400-105 |
10x
500ml |
$271
|
| RPMI
1640 with L glutamine |
Life
Technologies |
11875-119 |
10x
500ml |
$188
|
| HEPES
Buffer |
Life
Technologies |
15630-106 |
20
ml |
$18.50
|
| Beta-mercaptoethanol |
Sigma |
M3148-25ML |
25
ml |
$15.30
|
| 6
well plates |
Fisher
Scientific |
08-772-1B |
50
plates |
$118.03
|
| 50
ml Centrifuge Tube |
Fisher
Scientific |
1443222 |
500
tubes |
$333.65
|
| Penicillin-Streptomycin
(100x) |
Life
Technologies |
15140-122 |
100
ml |
$18.91
|
| Human
Albumin Solution 25% |
Gemeni
Bio Products |
800-120 |
50
ml |
$95
|
| Human
Serum AB (Heat Inactivated) |
Gemeni
Bio Products |
100-512 |
100
ml |
$159
|
| Trypan
BLue 0.4% |
Sigma |
T8154-20ML |
20
ml |
$5 |
Reagents
to Prepare:
IL-4
Reconstitution:
Reconstitute
in PBS with 8% Human Albumin Solution to a final concentration of 20µg/ml.
(Example:
We reconstituted 10µg of IL-4 in 500µL of solution)
GM-CSF
Reconstitution:
Reconstitute
in PBS with 8% Human Albumin Solution to a final concentration of 20µg/ml.
(Example:
We reconstituted 10µg of IL-4 in 500µL of solution)
Dendritic
Cell Culture Media (keep at 37C for culture):
RPMI
1640 w/ L-glutamine
25mM
HEPES
1%
Pen Strep
5%
Human Serum AB
50
µM BME (optional)
Before
culture make sure to filter with a 0.22µm filter to remove bacterial contaminants
200ml
PBS (1x) – for washing platelets out of supernatant following ficoll separation
Procedure:
| |
1. |
Obtain 10ml
of blood sample |
| |
2. |
Dilute 1:1
in PBS warmed to RT |
| |
3. |
Place remaining
~180ml PBS on ice |
| |
a. |
Slow down
pipette aid to minimize disruptance to interphase layer. |
| |
b. |
Be careful
of air bubbles that could disrupt layer |
| |
5. |
Carefully
transfer tube into centrifuge being careful not to disrupt interphase layer |
| |
a. |
Spin at
2000RPM, 20min, no brakes @RT |
| |
b. |
After spin
is completed set temperature on centrifuge to 4C |
| |
6. |
Remove interphase
layer and transfer to new 50ml conical |
| |
a. |
Optional
tips: removing the upper layer (containing PRP) for easier access to interphase layer – this allows you to use a P1000
pipette instead of a pipette aid for greater accuracy |
| |
7. |
Add
PBS (on ice or 4C) to solution containing interphase layer to bring the total volume to 50ml |
| |
8. |
Centrifuge
at 1500RPM, 10min, brakes on @4C |
| |
9. |
Inspect
clarity of supernatant, repeat wash cycles (900RPM, 10min, no brakes, @4C) until supernatant is clear (typically 3 wash cycles
completed) |
| |
10. |
Aspirate
supernatant and resuspend in 1ml DC Culture Media at 4C |
| |
11. |
Take
10µL of cell suspension and count using a hemocytometer to determine the number of wells necessary for culture (approximately
2 million mononuclear cells per well) |
| |
a. |
Add trypan
blue to check cell viability |
| |
12. |
Plate 6
million cells per well with 3mL warmed DC media per well |
| |
13. |
Place 6
well plate in incubator at 37C, 5% CO2 for 1 hour |
| |
14. |
After
hour incubation is complete, aspirate supernatant leaving behind adherent cells, wash 4 times with warm PBS |
| |
15. |
Replace
with fresh DC Culture Media with 3ml per well |
| |
a. |
Desired
final concentration 10ng/ml |
| |
b. |
Therefore
given a stock solution of 20µg/ml, alloquat 3µL per well |
| |
a. |
Desired
final concentration 50ng/ml |
| |
b. |
Therefore
given a stock solution of 20µg/ml, alloquat 15µL per well |
| |
18. |
Place 6
well plate back in incubator at 37C with 5% CO2 |
| |
19. |
On day 2
after isolation procedure, replace cytokines |
| |
20. |
On day 4
after isolation procedure, replace cytokines |
| |
21. |
On 5th
day, add maturation signal for 2 days |
| |
a. |
10 ng/ml
Lipopolysaccharides for 24 hours |
[1]
Zheng et al. J Immunol. 2006 Oct 15;177(8):5639-46.
[2]
Zheng et al. Int J Cancer. 2013 Feb 15;132(4):967-77.
[3]
Cancer cell lines are initially used to allow for rapid screening without the need for continual supply of blood
[4]
Bartmann et al. Am J Reprod Immunol. 2014 Feb;71(2):109-19.
[5]
Klatka et al. Oncol Rep. 2012 Jul;28(1):207-17
[6]
Jin et al. J Virol. 2009 May;83(10):4984-94.
[7]
Latchumanan et al. Tuberculosis (Edinb). 2005 Sep-Nov;85(5-6):377-83.
[8]
Pellegrini et al. Neuroimmunomodulation. 2005;12(4):220-34.
[9]
Chen et al. J Immunol. 2008 Oct 15;181(8):5396-404.
[10]
Munn et al. Science. 1998 Aug 21;281(5380):1191-3.
[11]
Fox et al. J Gen Virol. 2013 Jul;94(Pt 7):1451-61
[12]
Serbecic et al. Exp Res. 2006 Mar;82(3):416-26.
[13]
Li et al. J Transl Med. 2012 Jan 31;10:19.
[14]
Beatty et al. Infect Immun. 1994 Sep;62(9):3705-11.
[15]
Basu et al. J Immunol. 2006 Aug 15;177(4):2391-402.
[16]
Gu et al. Cancer Res. 2010 Jan 1;70(1):129-38.
Exhibit
31.1
CERTIFICATION
OF CHIEF EXECUTIVE OFFICER PURSUANT TO
SECTION
302 OF THE SARBANES-OXLEY ACT OF 2002
I,
David Koos, certify that:
1.
I have reviewed this Quarterly Report on Form 10-Q of Bio Matrix Scientific Group, Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect
to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this report;
4.
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;
(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles;
(c)
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on
such evaluation; and
(d)
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's
most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected,
or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing
the equivalent functions):
(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information;
and
(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's
internal control over financial reporting.
| |
|
| Dated:
August 10, 2015 |
By: /s/
David Koos |
| |
David
Koos |
Exhibit
31.2
CERTIFICATION
OF ACTING CHIEF FINANCIAL OFFICER PURSUANT TO
SECTION
302 OF THE SARBANES-OXLEY ACT OF 2002
I,
David Koos, certify that:
1.
I have reviewed this Quarterly Report on Form 10-Q of Bio Matrix Scientific Group, Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect
to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this report;
4.
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;
(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles;
(c)
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on
such evaluation; and
(d)
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's
most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected,
or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing
the equivalent functions):
(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information;
and
(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's
internal control over financial reporting.
| |
|
| Dated:
August 10, 2015 |
By: /s/
David Koos |
| |
David
Koos |
| |
Chief
Financial Officer |
Exhibit
32.1
CERTIFICATION
OF CHIEF EXECUTIVE OFFICER
PURSUANT
TO 18 U.S.C. SECTION 1350
AS
ADOPTED PURSUANT TO SECTION 906
OF
THE SARBANES-OXLEY ACT OF 2002
In
connection with the Quarterly report of Bio-Matrix Scientific Group, Inc. (the “Company”) on Form 10-Q for the
quarter ended June 30, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”),
the undersigned, in the capacities and on the dates indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:
1.
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and
2.
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations
of the Company.
| |
|
| Dated:
August 10,, 2015 |
By: /s/
David Koos |
| |
David
Koos |
| |
Chief
Executive Officer |
A
signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002, or other document authentications,
acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement
required by Section 906, has been provided to Bio-Matrix Scientific Group, Inc. and will be retained by Bio-Matrix Scientific
Group, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
Exhibit
32.2
CERTIFICATION
OF CHIEF FINANCIAL OFFICER
PURSUANT
TO 18 U.S.C. SECTION 1350
AS
ADOPTED PURSUANT TO SECTION 906
OF
THE SARBANES-OXLEY ACT OF 2002
In
connection with the Quarterly report of Bio-Matrix Scientific Group, Inc. (the “Company”) on Form 10-Q for the
quarter ended June 30, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”),
the undersigned, in the capacities and on the dates indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:
1.
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and
2.
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations
of the Company.
| |
|
| Dated:
August 10, 2015 |
By: /s/
David Koos |
| |
David
Koos |
| |
Chief
Executive Officer |
A
signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002, or other document authentications,
acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement
required by Section 906, has been provided to Bio-matrix Scientific Group, Inc. and will be retained by Bio-Matrix Scientific
Group, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.