RegenoCELL Therapeutics, Inc. - FORM 10-Q

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EX-31.1 - RegenoCELL Therapeutics, Inc.	v166190_ex31-1.htm
EX-32.1 - RegenoCELL Therapeutics, Inc.	v166190_ex32-1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2009

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________to

Commission File Number: 000-50639

REGENOCELL THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

Florida	22-3880440
(State or other jurisdiction of incorporation	(I.R.S. Employer Identification No.)
or organization)

2 Briar Lane

Natick, Massachusetts 01760

(Address of Principal Executive Offices)

(508) 647-4065

(Registrant's telephone number, including area code)

Check whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

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”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act. Yes x No ¨

Large Accelerated filer ¨ Accelerated filer ¨

Non-accelerated filer (Do not check Smaller reporting company x

if a smaller reporting company) ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

Indicate the number of shares outstanding of the registrant's common stock, par value $0.0001 per share, outstanding as of the latest practical date. 131,437,500 shares of common stock outstanding as of November 10, 2009.

REGENOCELL THERAPEUTICS, INC.

Quarterly Report on Form 10-Q

For the Quarterly Period Ended September 30, 2009

FORWARD-LOOKING STATEMENTS

This Form 10-Q for the quarterly period ended September 30, 2009 contains forward-looking statements that involve risks and uncertainties. Forward-looking statements in this document or incorporated herein by reference that are not related to historical results are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.

Statements that are predictive, that depend upon or refer to future events or conditions, and/or that include words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates,” “hopes,” and similar expressions constitute forward-looking statements. In addition, any statements concerning future financial performance (including future revenues, earnings or growth rates), business strategies or prospects, or possible future actions by us are also forward-looking statements.

These forward-looking statements are based on beliefs of our management as well as current expectations, projections, assumptions and information currently available to the Company and are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or those anticipated or implied by such forward-looking statements. In evaluating these statements, you should consider various factors including the assumptions, risks and uncertainties set forth in our Annual Report on Form 10-K for the year ended December 31, 2008 and other reports and documents we have filed with or furnished to the Securities and Exchange Commission. Should one or more of those risks or uncertainties materialize or should underlying expectations, projections and assumptions prove incorrect, actual results may vary materially from those described. Those events and uncertainties are difficult to predict accurately and many are beyond our control. The Company assumes no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date of these statements except as specifically required by law. Accordingly, past results and trends should not be used to anticipate future results or trends.

INDEX

Part I— FINANCIAL INFORMATION

Item 1. Interim Financial Statements and Notes – Quarter Ended September 30, 2009	4

Item 2. Management’s Discussion and Analysis or Plan of Operations	14

Item 3. Controls and Procedures	19

Part II— OTHER INFORMATION

Item 1. Legal Proceedings	19

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	19

Item 3. Defaults upon Senior Securities	19

Item 4. Submission of Matters to a Vote of Security Holders	19

Item 5. Other Information	19

Item 6. Exhibits and Reports on Form 8-K	19

Signatures	20

RegenoCELL Therapeutics, Inc.

(A Development Stage Corporation)

PART I - FINANCIAL INFORMATION

Item 1 – Interim Financial Statements and Notes – Quarter Ended September 30, 2009

Contents

	Page No.

Balance Sheets at September 30, 2009 (unaudited) and December 31, 2008 (audited)	5

Interim Statement of Operations for the Three Months ended September 30, 2009 and 2008 and for the period from February 2, 2002 (inception) to June 30, 2009 (unaudited)	6

Interim Statement of Stockholders’ Equity (Deficit) For the period from February 1, 2002 (inception) to September 30, 2009 (unaudited)	7

Interim Statement of Cash Flow for the Three Months ended September 30, 2009 and 2008 and for the period from February 1, 2002 (inception) to September 30, 2009 (unaudited)	8

Notes to Interim Financial Statements	9

RegenoCell Theraputics Inc.

(A Development Stage Corporation)

Balance Sheet

As of

	September 30,
	2009			December 31,
	(unaudited)			2008
Assets

Current Assets
Cash	$	-		$	-
Other Receivable		-			-
Total Current Assets		-			-

Net Fixed Assets		3,100			-

Net Intangible Development Costs		9,000			9,000

Total Assets	$	12,100		$	9,000

Liabilities and Stockholders' Equity

Liabilities

Current Liabilities
Accounts Payable	$	46,913		$	-
Accrued Interest		7,252			3,458
Accrued Expenses		750			3,000
Total Current Liabilities		54,915			6,458

Note Payable		154,091			118,653

Total Liabilities		209,007			125,111

Stockholders’ Equity

Preferred Stock $.0001 par value, 80,000,000 shares authorized, no shares issued and outstanding as of September 30, 2009 and December 31, 2008 respectively		-			-
Common Stock, $.0001 par value, 520,000,000 shares authorized, 131,437,500 shares issued and outstanding as of September 30, 2009 and December 31, 2008 respectively		13,144			13,144
Additional Paid in Capital		4,913			4,913
Accumulated Deficit during the development stage		(214,963	)		(134,168	)

Total Stockholders’ Equity		(196,907	)		(116,111	)

Total Liabilities and Stockholders’ Equity	$	12,100		$	9,000

The accompanying notes are an integral part of these financial statements

RegenoCell Theraputics Inc.

(A Development Stage Corporation)

Income Statement

For the Nine Months Ended September 30,

							February 1,
							2002 (Inception)
							Through
							September 30,
	2009			2008			2009
	(Unaudited)			(Unaudited)			(Unaudited)

Revenues	$	-		$	-		$	-

Administrative Expenses		33,881			19,675			166,174
Development Costs		46,914			-			46,914

Net (Loss) from development stage operations		(80,795	)		19,675			(213,088	)

Loss on abandonment of assets		-			(1,875	)		(1,875	)

Net (Loss)	$	(80,795	)	$	21,550		$	(214,963	)

Basic net loss per common share	$	(0.00	)	$	(0.00	)	$	(0.00	)

Weighted Average of Common Shares Outstanding		131,437,500			131,437,500			131,437,500

The accompanying notes are an integral part of these financial statements

RegenoCell Theraputics Inc.

(A Development Stage Corporation)

Statement of Stockholders Equity

As of September 30, 2009

Unaudited

				Par Value			Paid in			Retained
	Shares			$.0001			Capital			Earnings			Total

February 1, 2002 - Restricted common shares issued to President of Company for expenses		2,000,000		$	200		$	-		$	-		$	200
December 31, 2002 - Net (Loss)		-			-			-			(200	)		(200	)
December 31, 2002 - Balance		2,000,000			200			-			(200	)		-
February 15, 2003 - Sale of restricted shares to various stockholders		550,000			55			10,945			-			11,000
December 31, 2003 - Net (Loss)		-			-			-			(6,669	)		(6,669	)
December 31, 2003 - Balance		2,550,000			255			10,945			(6,869	)		4,331
December 31, 2004 - Net (Loss)		-			-			-			(9,272	)		(9,272	)
December 31, 2004 - Balance		2,550,000			255			10,945			(16,141	)		(4,941	)
December 31, 2005 - Net (Loss)		-			-			-			(28,583	)		(28,583	)
December 31, 2005 - Balance		2,550,000			255			10,945			(44,724	)		(33,524	)
February 2006 repurchase of stock		(106,250	)		(11	)		(6,739	)		-			(6,750	)
March 2006 repurchase of stock		(100,000	)		(10	)		(1,990	)		-			(2,000	)
December 31, 2006 - Net (Loss)		-			-			-			(25,389	)		(25,389	)
December 31, 2006 - Balance		2,343,750			234			2,216			(70,113	)		(67,663	)
Prior Year adjustment for expense reversal		-			-			-			1,650			1,650
December 31, 2007 - Net (Loss)		-			-			-			(12,592	)		(12,592	)
December 31, 2007 - Balance		2,343,750			234			2,216			(81,055	)		(78,605	)
March 31, 2008 - additional shares issued resulting from a 3 for 1 common stock split		7,031,250			703			(703	)		-			-
June 13, 2008 - additional shares issued resulting from a 10 for 1 common stock split		70,312,500			7,031			(2,450	)		(4,581	)		-
July 7, 2008 - Restricted common stock issued in lieu of employee compensation		15,000,000			1,500									1,500
July 7, 2008 - Restricted common stock issued for contracted services		5,250,000			525									525
July 22, 2008 - Issuance of restricted common stock to Thera Vitae, Inc. per the terms of the letter of intent dated July 22, 2008		90,000,000			9,000									9,000
July 23, 2008 - Cancellation of common stock		(58,500,000	)		(5,850	)		5,850						-
December 31, 2008 - Net (Loss)											(48,532	)		(48,532	)
December 31, 2008 - Balance		131,437,500			13,143			4,913			(134,168	)		(116,112	)
September 30, 2009 - Net (Loss)											(80,795	)		(80,795	)
September 30, 2009 - Balance		131,437,500		$	13,143		$	4,913		$	(214,963	)	$	(196,907	)

The accompanying notes are an integral part of these financial statements

RegenoCell Theraputics Inc.

(A Development Stage Corporation)

Cash Flow Statement

For the Nine Months Ended September 30,

Unaudited

							February 1, 2002
							(date of inception)
							through
	2009			2008			September 30,
	(Unaudited)			(Unaudited)			2009

Cash Flows From Operating Activities:
Cash paid to suppliers	$	(32,339	)	$	(23,063	)	$	(142,941	)
Net cash provided by (used in) operating activities		(32,339	)		(23,063	)		(142,941	)

Cash Flows From Investing Activities
(Purchase) of equipment		(3,099	)		-			(7,699	)
Investment in production activites		-			(16,442	)		(9,000	)
Net cash used in investing activities		(3,099	)		(16,442	)		(16,699	)

Cash Flows From Financing Activities:
Proceeds from note payable		35,438			56,488			181,856
Repayment of notes payable		-			(25,593	)		(27,765	)
Sale of common stock		-			9,000			11,200
Repurchase of common stock		-			-			(8,750	)

Net cash provided by (used in) financing activities		35,438			39,895			156,541

Net Increase (Decrease) in Cash		(0	)		390			(3,099	)
Cash Beginning of Period		-			(390	)		-
Cash End of Period	$	(0	)	$	0		$	(3,099	)

Reconciliation of Income in Net Assets to Net Cash Provided by Operating Activities:

Net Loss from Development Stage Activities	$	(80,795	)	$	(21,550	)	$	(216,188	)
Non cash activities:
Depreciation		-			8,663			2,725
Accrual of Interest Expense		3,792			(1,875	)		3,792
Abandonment of Assets		-			250			4,581
Write off uncollected other receivable		-			2,025			-
Stock issued in lieu of compensation		-						11,025
Reconciliation Adjustments								-
(Decrease) in Accounts Payable		46,913			(2,200	)		46,913
(Decrease) in Accrued Expenses		(2,250	)		(2,000	)		(3,930	)
(Decrease) in Accrued Interest		-			(6,376	)		8,140

Net cash provided by (used in) operating activites	$	(32,339	)	$	(23,063	)	$	(142,941	)

The accompanying notes are an integral part of these financial statements

RegenoCELL Therapeutics, Inc.

(A Development Stage Enterprise)

NOTES TO FINANCIAL STATEMENTS

Note 1 - Summary of Significant Company & Organization Policies

Organization and Business Operations

RegenoCELL Therapeutics, Inc. (formerly Good Buddy's Coffee Express, Inc.) (the "Company") was incorporated in the State of Florida on February 1, 2002. The Company’s main office was located in South Carolina and planned to develop a national chain of drive through, high quality coffee outlets. In July 2008 the main office was relocated to Massachusetts and the corporate mission was amended to develop a stem cell therapy business for the treatment of congestive heart failure and peripheral artery disease in lieu of its original goals. On July 7, 2008, the Company amended its Articles of Incorporation changing the name of the corporation to RegenoCELL Therapeutics, Inc. In addition the Company approved an employment agreement with James F. Mongiardo as President and Chief Executive Officer. In addition, Scott Massey, the former President, Chief Executive Officer and Director of the Company, and Phillips N. Dee, the former Director of the Company resigned from their positions as officers and directors of the Company and James F. Mongiardo was elected as Chief Executive Officer, President, Treasurer, Secretary and sole Director of the Company.

At the current time the Company is still in the development stage and as such reports its financial statements as a Development Stage Enterprise. All costs associated with the development of the Company’s market are expenses as per SPO 98-5.

Note 2 - Summary of Significant Accounting Policies

Concentration of Credit Risk

The Company's financial instruments that are exposed to concentration of credit risk are cash. Additionally, the Company maintains cash balances in bank deposit accounts which, at times, may exceed federally insured limits.

Cash and Cash Equivalents

The Company considers all highly liquid investments with maturity of three months or less when purchased to be cash equivalents.

Accrued Expenses

At year end management recognizes an appropriate expense for the audit of its financial records.

Fair Value of Financial Instruments

Financial instruments, including cash, receivables, accounts payable, and notes payable are carried at amounts which reasonably approximate their fair value due to the short term nature of these amounts or due to variable rates of interest which are consistent with market rates. At present, the Company does not have any material accounts receivables or accounts payable.

RegenoCELL Therapeutics, Inc.

(A Development Stage Enterprise)

NOTES TO FINANCIAL STATEMENTS

Intangible Assets

The Company has acquired a non-exclusive license to market the TheraVitae, Inc.’s stem cell technology in Mexico and the Caribbean. The cost of the license is recorded as intangible assets and will be amortized at the time when the company begins recognizing revenue over the life of the agreement.

Income Taxes

The Financial Accounting Standards Board (FASB) issued Statements of Financial Accounting Standards (SFAS) No. 109 "Accounting for Income Taxes", which requires companies to use the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred income taxes are recognized for the tax consequence of temporary differences by applying enacted statutory tax rates applicable to future year's differences between the financial statements carrying amounts and the tax basis of existing assets and liabilities. Pursuant to SFAS No. 109, the effect on deferred taxes of a change in tax rates is recognized as income in the period that includes the enactment date. Under the deferred method, deferred taxes recognized using the tax applicable to the year of the calculation and were not adjusted for subsequent changes in tax rates.

Earnings (Loss) Per Share

The Company presents "basic" earnings (loss) per share and, if applicable, "diluted" earnings per share pursuant to the provisions of Statement of Financial Accounting Standards No. 128, Earnings per Share (SFAS 128). Basic earnings (loss) per share are calculated by dividing net income or loss by the weighted average number of shares outstanding during each period. The calculation of diluted earnings (loss) per share is the same as the basic earnings (loss) per share.

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. Actual results could differ from those estimates.

Note 3 - Fixed Assets

Fixed Assets are stated at cost less accumulated depreciation. Expenditures for ordinary maintenance and repairs are charged to operations as incurred. Major additions and improvements are capitalized using the straight-line method over the estimated useful life of the asset.

	September 30,		December 31,
	2009		2008		Estimated
					Useful Life
Equipment	$	3,099		0	5 years
		3,099		0
Less: Accumulated Depreciation		-0-		0
Net Fixed Assets	$	3,099	$	0

RegenoCELL Therapeutics, Inc.

(A Development Stage Enterprise)

NOTES TO FINANCIAL STATEMENTS

Note 4 - Notes Payable

The Company has issued various unsecured demand promissory notes to the majority shareholder and other unrelated individuals as of September 30, 2009. No demand has been placed or is anticipated to be placed and therefore, they have been classified as long term debt. The detail of the long term debt is as of September 30, is as follows:

	Principle		Principal
	2009		2008

February 5, 2005 - Demand Note		47,824		47,824	5% per
					annum
June 26, 2008 – Convertible Demand Note 5% per annum, convertible to common stock at $1.00 per share		39,164		39,164

September 30, 2008 – Demand Notes, 0% per Annum.		12,408		12,408

October 1, 2008 – Demand Notes, 5% per Annum.		10,000		10,000

December 31, 2008 – Demand Notes, 0% per Annum.		9,257		9,257

March 31, 2009 – Demand Notes, 0% per Annum		8,960		-

June 30, 2009-Demand Notes, 0% per Annum		6,782		-

September 1, 2008 – Demand Notes, 5% per Annum.		2,500		-

September 30, 2009-Demand Notes, 0% per Annum	17,196		-

Total Debt		154,092		118,653
Less Current Portion		-		-
Long Term Debt	$	154,092	$	118,653

Interest expense for the nine months ending September 30,	$	3,792	$	5,771

RegenoCELL Therapeutics, Inc.

(A Development Stage Enterprise)

NOTES TO FINANCIAL STATEMENTS

Note 5 - Income Taxes

The reconciliation of the statutory Federal income tax rate to the effective tax rate are as follows for the period ended:

	September 30, 2009						December 31, 2008
	Amount			Rate			Amount			Rate

Income Taxes at Statutory Rate	$	(32,709	)		-15.0	%	$	(20,126	)		-15.0	%
Increase (Decrease) in taxes
Valuation Allowance		32,709			15.0	%	$	20,126			15.0	%
	$	-			0.0	%	$	-			0.0	%

The major components of deferred tax assets are as follows:

	September 30,			December 31,
	2009			2008

Deferred tax assets:
Net operating loss carryforward	$	(218,063	)	$	(134,170	)
Valuation allowance		218,063			134,170
Net deferred tax assets	$	-		$	-

Note 6 - Stockholders Equity

On May 29, 2008 the Board of Directors unanimously voted to increase the authorized shares of both the preferred stock and common stock from 5,000,000 to 10,000,000 shares and from 20,000,000 to 200,000,000 shares respectively.

On May 29, 2008, the Board of Directors unanimously voted for a 10 for 1 forward stock split of the common shares effective for stockholders of record on June 13, 2008. The number of outstanding shares of common stock was adjusted from approximately 7,031,250 to 70,312,500 shares, resulting from the split.

On July 7, 2008, the Company Amended its Articles of Incorporation and increased the number of authorized common stock to 520,000,000 shares at a par value of $.0001 per share. The Company also issued 250,000 restricted common shares to Douglas T. Rice in lieu of payment for business consulting services, 5,000,000 restricted common shares to Domenic Mazza for marketing consultation services and 15,000,000 restricted common shares to James F. Mongiardo CEO of the Company as employee compensation.

On July 22, 2008, in accordance with a Letter of Intent between TheraVitae, Inc and the Company to secure licensing rights from Thera Vitae, Inc., the Board of Directors placed 90,000,000 restricted common shares at par value of $0.0001.in escrow. These shares will be released upon completion and execution of the agreements incorporating the terms of the Letter of Intent. The Letter of Intent with TheraVitae provides for a non exclusive license in Mexico and later the Islands of the Caribbean to commercialize TheraVitae’s stem cell therapy for cardiovascular indications. The Company may establish clinics to treat congestive heart failure patients with VesCell, TheraVitae’s stem cell therapy. It also provides for an exclusive license in the United States, Canada and Mexico to obtain regulatory approvals and then market VesCell stem cell therapy for the treatment of peripheral artery disease.

RegenoCELL Therapeutics, Inc.

(A Development Stage Enterprise)

NOTES TO FINANCIAL STATEMENTS

On July 23, 2008, the Board authorized the cancellation from certain shareholders of 49,125,000 restricted common shares, par value $0.0001. Said shares were returned to the transfer agent for cancellation.

Note 7 - Going Concern

The Company has no revenues to date. Since its inception the Company has been dependent upon the receipt of capital investment to fund its continuing activities. In addition to the normal risks associated with a new business venture, there can be no assurance that the Company's business plan will be successfully executed. As has been stated, an insignificant amount of funds have been raised to date. In order to raise the necessary capital to commence its planned principal operations and to implement its business plan, the Company's management plans to complete a private placement of its common stock. The Company's ability to execute its business model will depend on its ability to obtain additional financing and achieve a profitable level of operations. There can be no assurance that sufficient financing will be obtained. Nor can any assurance be made that the Company will generate substantial revenues or that the business operations will prove to be profitable.

ITEM 2. Management’s Discussion and Analysis or Plan of Operations

Overview

The Company was incorporated in Florida on February 1, 2002 and planned to develop cafes in South Carolina expanding to other states in the South East, featuring gourmet coffee, pastries and related items. The Company’s objective was to develop cafes that provided a forum for rapid service and a strong community identity with the widespread popularity of coffee and related products. Due to intense competition, in early 2008 the Company changed its focus.

On July 16, 2008 the Company began focusing on a new stem cell therapy business opportunity as set forth in a Letter of Intent dated March 31, 2008 with TheraVitae, Inc. by completing several actions. These actions included the filing of Amended Articles of Incorporation which among other matters changed the name of the corporation to RegenoCELL Therapeutics, Inc. and increased the authorized capitalization to 520,000,000 shares of Common Stock and 80,000,000 shares of Preferred Stock, approved Amended Bylaws, issued restricted common shares to Douglas T. Rice (250,000) for introducing this new business opportunity, Dominick Mazza (5,000,000) for consulting services for this new business opportunity and James F. Mongiardo (15,000,000) for negotiating the Letter of Intent which will become the new business of the corporation and for directing and building it as its President and Chief Executive Officer, ratified the March 31 Letter of Intent with TheraVitae, and approved the Employment Agreement with James F. Mongiardo as President and Chief Executive Officer.

The Letter of Intent with TheraVitae provides for a non exclusive license in Mexico and later the Islands of the Caribbean to commercialize TheraVitae’s stem cell therapy for cardiovascular indications. The Company may establish clinics to treat congestive heart failure patients with VesCell, TheraVitae’s stem cell therapy. It also provides for an exclusive license in the United States, Canada and Mexico to obtain regulatory approvals and then market VesCell stem cell therapy for the treatment of peripheral artery disease.

Further in connection with this change in business focus, the Board of Directors accepted the resignations of Scott Massey and Phillips N. Dee as directors and officers of the Company and elected James F. Mongiardo to fill the vacancies on the Board. Mr. Mongiardo was elected as Chief Executive Officer, President, Treasurer, Secretary and sole director of the Company.

Critical Accounting Policies

Our financial statements are impacted by the accounting policies used and the estimates and assumptions made by management during their preparation. A complete summary of these policies is included in Note 2 of the notes to our historical financial statements. We have identified below the accounting policies that are of particular importance in the presentation of our financial position, results of operations and cash flows and which require the application of significant judgment by management.

Use of Estimates

The accompanying financial statements are prepared in conformity with accounting principles generally accepted in the United States of America and include certain estimates and assumptions which affect the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Accordingly, actual results may differ from these estimates.

Income Taxes

The Company follows the provisions of Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes” (“SFAS No. 109”), under which deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities. Deferred tax assets and liabilities are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. The provisions of SFAS No. 109 also require the recognition of future tax benefits such as net operating loss carry-forwards, to the extent that the realization of such benefits is more likely than not. To the extent that it is more likely than not that such benefit will not be received, the Company records a valuation allowance against the related deferred tax asset.

Research and Development Costs

Research and development costs are expensed as incurred. The cost of intellectual property purchased from others that is immediately marketable or that has an alternative future use is capitalized and amortized as intangible assets. Capitalized costs are amortized using the straight-line method over the estimated economic life of the related asset. The Company periodically reviews its capitalized intangible assets to assess recoverability based on the projected undiscounted cash flows from operations, and impairments are recognized in operating results when a permanent diminution in value occurs.

Off Balance Sheet Arrangements

The Company is not a party to any off-balance sheet arrangements.

Description of Property

The Company does not own any real property or any interest in real property and does not invest in real property or have any policies with respect thereto as part of its operations or otherwise.

Our principal office facility is presently located in space owned by our sole officer. Rent has not been charged for the office space, and it is not expected that rent will be charged in the near-term.

Management’s Discussion and Analysis and Plan of Operations

The new mission of the Company is to bring stem cell therapy treatments to the market as quickly as possible. The Company has identified and entered into a Letter of Intent with a company currently treating patients with adult stem cells for congestive heart failure and other indications. TheraVitae, located in Bangkok, Thailand, has developed a process for which patent applications are pending to identify and process adult stem cells found in a patient’s blood. These adult stem cells are grown into large numbers in vitro (outside the body) and then encouraged to differentiate into angiogenic precursor cells or blood vessel forming cells for the treatment of congestive heart failure. These adult stem cells can also be used for the treatment of other conditions such as peripheral artery disease.

Currently congestive heart failure patients cleared for treatment have one-half pint of blood drawn which is sent to TheraVitae’s cell processing facility in Israel. After the adult stem cells in the patient’s blood have been extracted and grown into large numbers of angiogenic precursor cells, they are sent to Bangkok, Thailand for infusion into the patient in a minimally invasive procedure. The stem cell therapy is either delivered through a catheter or injected directly into the myocardium. All patients are private pay.

The results to date have been impressive. Over three hundred (300) congestive heart failure patients with no other options have shown similar results to a clinical trial of 24 patients. In that trial, statistically significant improvements between baseline and the three month and six month follow-up were achieved for:

Improvement in the six minutes walking test.

Increase in metabolic equivalent units (METs) during the stress test.

Decrease in the perfusion defect region of the target artery, meaning it had improved.

Decrease in the Canadian Cardiovascular Society (CCS) Grading Scale, meaning the patient has improved.

The Company has entered into a Letter of Intent which provides for two basic businesses. The first is an opportunity to generate revenue in the short term for the treatment of congestive heart failure. The second is an opportunity to generate substantial revenues in the long term for the treatment of peripheral artery disease.

The first stem cell business is a non exclusive license to establish clinics initially in Mexico and later in the Caribbean (exclusive of the Dominican Republic) to treat patients with TheraVitae’s stem cell therapy for congestive heart failure and all other cardiovascular indications. The non exclusive license is for four years but automatically renewable if 500 patients are treated in either year three or four. Patients may not be treated in the United States. However patients from the United States may be identified, qualified, agree to the treatment, pay for the treatment in advance and then have their blood drawn for processing by TheraVitae.

When the stem cell therapy is ready for administration, the patient will travel outside the United States to a clinic in Mexico or the Caribbean operated by a subsidiary of the Company to be formed to receive the treatment. Because this is an autologous treatment, it is anticipated that the regulatory requirements for administering this stem cell therapy in Mexico and the Islands of the Caribbean will be less extensive than the United States. The market size for congestive heart failure in the United States is so large that multiple treatment clinics will be needed to handle potential demand. Approximately five million patients have been diagnosed in the United States with congestive heart failure.

There are over 1,100 investigation stem cell clinical trials being conducted in the United States. It will take multiple years for any product to be approved, especially products derived from embryonic or umbilical cord blood stem cells. In the interim, patients may benefit from adult stem cell treatment today through identification and qualification in the United States and the administration of treatment outside the United States. The Company intends to be one of the first companies to benefit from the commercial possibilities associated with adult stem cell therapy through the establishment of clinics initially in Mexico and later in the Caribbean where patients from the United States may be treated. Thus, the Company will be among the first to be able to earn revenues from adult stem cell therapy.

The second business is an exclusive license for the United States, Canada and Mexico for the treatment of peripheral artery disease. The exclusive license is for four years automatically renewable for additional four year periods if there is either (a) an active IND in the United States or (b) an approval to market for peripheral artery disease in the United States. Over ten million Americans suffer from poor circulation to their extremities. Peripheral artery disease is especially prevalent among diabetics. After standard treatments fail, the only alternative is amputation of the toes, foot or leg, sometimes fingers, hand or arm. TheraVitae’s stem cell therapy has been shown in pilot clinical trials to re-establish blood flow to the extremities resulting in saving the limbs from amputation.

The process for treating peripheral artery disease is very similar to the process for treating congestive heart failure. After the patient is qualified, a half liter of blood is drawn and sent to TheraVitae for processing. The adult stem cells are extracted, grown into large numbers and then encouraged to become angiogenic precursor cells. This adult stem cell therapy is then injected in multiple locations in the limb which is experiencing poor circulation.

The Company will be responsible for all costs associated with obtaining all required regulatory approvals for the treatment of peripheral artery disease in the United States, Canada and Mexico. It intends to submit to the Food and Drug Administration an Investigational New Drug (“IND”) application for authorization to initiate clinical trials in the United States and complete what is necessary to apply for regulatory approval to market the product. Such an approval in the United States will have substantial potential since the market size is large and flexibility of pricing is great given the alternative of amputation.

The Company has not generated any revenues from its operations. To effectuate the new stem cell business plan during the next twelve months, the Company must raise funding, locate a suitable source for congestive heart failure patients and/or implement marketing programs to find these patients who may benefit from stem cell therapy, establish a review procedure and staging center to draw blood from qualified patients, and establish a site outside the United States which can administer the stem cell therapy. In addition the Company must begin assembling or developing the required data, finalizing a clinical protocol and clinical case report form, contracting with clinical sites able to conduct the requisite clinical trials, obtaining Institutional Review Board approval for these clinical trials, and contracting with a clinical research organization to administer these clinical trials as part of or in conjunction with the submission of an IND to the Food and Drug Administration for authorization to begin clinical trials in the United States for the treatment of peripheral artery disease.

The key part of the business plan, namely the treatment of no option congestive heart failure patients from the United States in Mexico, required obtaining approval from COFEPRIS (Mexican FDA) to conduct a clinical trial in Mexico for an unapproved product. This is analogous to the United States where the Food and Drug Administration approves clinical trials for unapproved products.

A clinical trial requires a protocol which includes the safety and efficacy data supporting the product. It also requires information about other similar products and details about the manufacturing process. As part of the Company’s arrangement with TheraVitae, this necessary information was given to the Company to incorporate into the clinical trial. The Company put together an extensive Mexican information package. The process in Mexico required that the Company’s clinical trial first be approved by the Research and Bioethics Committee of Christus Muguerza Hospital, similar to an Institutional Review Board in the United States. Since the Company is applying in Mexico, any documents the Company created had to be translated into Spanish.

The Company obtained the Research and Bioethics Committee approval to conduct the clinical trial on March 18, 2009. Before the Company submitted to COFEPRIS, a local Mexico City firm, Accelerated Clinical Research (“ACR”) was retained to assist with the application and to follow it through COFEPRIS. A regulatory strategy was agreed upon and multiple additional documents were created to satisfy what ACR said COFEPRIS would expect to see.

COFEPRIS does not mail any letters about action it is taking. Rather all letters are hand delivered and if you miss a deadline because you did not pick up your letter on time, you start all over. Through ACR, the Company had someone go to the offices of COFEPRIS in Mexico City every day post the Company’s submission. COFEPRIS responded on June 1, 2009 requesting three changes to the Company’s program. The most significant was their request that instead of following patients for 6 months, the Company follow them for 2 years with visits every three months which include measuring the left ventricular ejection fraction at each visit. The Company agreed to the three changes but before the Company could resubmit had to obtain approval for these changes from the Research and Bioethics Committee at Christus Muguerza Hospital. The Company did obtain that approval and resubmitted to COFEPRIS on June 19, 2009 which was on time. Subsequently on July 15, 2009, COFEPRIS raised another issue concerning language in the Informed Consent. The Company then engaged through ACR local counsel who negotiated with COFEPRIS revised language to the Informed Consent. COFEPRIS acknowledged receipt of the revised language on August 28, 2009.

On September 24, 2009 COFEPRIS agreed to the revised Informed Consent language. COFEPRIS also instructed that the Company resubmit the application with the updated Informed Consent. Subsequent to the close of the quarter on October 12, 2009 approval of the Research and Bioethics Committee to the changes in the Informed Consent was obtained. The resubmission to COFEPRIS was made on October 13, 2009. It is anticipated that COFEPRIS will review the revised application on an expedited basis. Once the Company has that approval, the Company can then obtain an import license from another section of COFEPRIS which on average takes 15 business days.

During the quarter ending September 30, TheraVitae asked the Company to become its staging center for patients in North America. The Company will screen and qualify them, draw their blood and ship it to the cell processing facility in Israel. The patients will fly to Bangkok to receive the stem cell treatment. It should be noted that both the shipment of blood and the shipment of stem cells from that blood must be done under a 48 window under controlled temperature conditions. The logistics for shipment have almost been finalized. Once the Company is cleared to treat patients in Mexico, the TheraVitae referrals will become the Company’s patients. Subsequent to the close of the quarter, the agreement incorporating these terms was finalized and executed.

The Company has reached tentative agreement with Titan Imaging located in West Hollywood, California to serve as the staging center for patients. It is expected that patients will be screened, have their blood dawn and receive all the tests in the subsequent follow-up visits at Titan Imaging’s facilities required by the protocol submitted to COFEPRIS. Titan Imaging will be paid as each patient is processed.

The Company anticipates earning revenues for the treatment of congestive heart failure patients with the possibility of the first patients being treated in the first quarter of 2010. There is no assurance, however, that this will occur. The Company does not anticipate that during the next twelve months the Company will earn sufficient revenues to fully support all aspects of the new stem cell business plan and, therefore, will continue to seek new funding through equity financings.

For the twelve month period following the date of this Quarterly Report, the Company will be required to obtain additional financing in order to continue to pursue the business plan. The Company anticipates that additional funding will be in the form of equity financing from the sale of its common stock. The Company cannot provide investors with any assurance that the Company will be able to raise sufficient funding from the sale of its common stock to fund the business plan going forward.

If the Company is unsuccessful at raising sufficient capital to fund its operations, for whatever reason, the Company may be forced to seek opportunities outside of its new business focus or to seek a buyer for its business or another entity with which the Company could partner. Even if the Company is successful in obtaining equity financing to fund its business plan, there is no assurance that the Company will obtain the funding necessary to pursue its plan over the long-term.

ITEM 3. Controls and Procedures

Evaluation of disclosure controls and procedures

In connection with the preparation of this Quarterly Report on Form 10-Q, an evaluation was carried out by our management, with the participation of the Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (Exchange Act)) as of September 30, 2009. Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and the Chief Financial Officer, to allow timely decisions regarding the required disclosures. Based on its evaluation, our management concluded, as of the end of the period covered by this report, that our disclosure controls and procedures were effective.

There has been no change in our internal control over financial reporting (as defined in Rule 13 a-15(f) under the Exchange Act) during the quarter ended September 30, 2009 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

We are not party to any legal proceedings as of the date of this Form 10-Q.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Submission of Matters to a Vote of Security Holders

None.

Item 5. Other Information

Not applicable.

Item 6. Exhibits and Reports on Form 8-K.

Exhibits

The following are exhibits included with this Quarterly Report on Form 10-Q:

31.1 Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14 or 15d-14 of the Securities Exchange Act of 1934, as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002.

32.1 Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

b)	Reports on Form 8-K

None.

SIGNATURES

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

	REGENOCELL THERAPEUTICS, INC.

Dated: November 13, 2009

	By:	/s/ James F. Mongiardo
	James F. Mongiardo
	Principal Executive Officer,
	President, Principal Financial Officer,
	Principal Accounting Officer, and
	Director

RegenoCELL Therapeutics, Inc. - FORM 10-Q - November 13, 2009

Attached files

RegenoCELL Therapeutics, Inc. Reports