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EX-32.1 - RegenoCELL Therapeutics, Inc.v205535_ex32-1.htm
EX-31.1 - RegenoCELL Therapeutics, Inc.v205535_ex31-1.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, 2010

 
¨ 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. 81,687,500 shares of common stock outstanding as of December 9, 2010.
 
 
 

 

 
REGENOCELL THERAPEUTICS, INC.

Quarterly Report on Form 10-Q
For the Quarterly Period Ended September 30, 2010

FORWARD-LOOKING STATEMENTS
 
This Form 10-Q for the quarterly period ended September 30, 2010 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, 2009 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.

 
2

 
 
INDEX

Part I— FINANCIAL INFORMATION
  4
   
Item 1. Interim Financial Statements and Notes – Quarter Ended September 30, 2010
  4
   
Item 2. Management’s Discussion and Analysis or Plan of Operations
  13
   
Item 3. Controls and Procedures
  18
   
Part II— OTHER INFORMATION
  18
   
Item 1. Legal Proceedings
  18
   
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  18
   
Item 3. Defaults upon Senior Securities
  18
   
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
  20
   
Signatures
  20
 
3

 

 
PART I - FINANCIAL INFORMATION

Item 1 – Interim Financial Statements and Notes – Quarter Ended September 30, 2010

Contents

 
Page No.
Consolidated Balance Sheets – September 30, 2010 and December 31, 2009
5
   
Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2010 and 2009
7
   
Consolidated Statement of Stockholders’ Equity from December 31, 2008 through September 30, 2010
8
   
Consolidated Statements of Cash Flows for the Nine Months ended September 30, 2010 and 2009
 9
   
Notes to Condensed Consolidated Financial Statements
10
 
 
4

 

RegenoCELL Therapeutics, Inc.
Consolidated Balance Sheets

   
September 30,
   
December 31,
 
   
2010
   
2009
 
   
(Unaudited)
       
             
ASSETS
           
             
CURRENT ASSETS
           
             
Cash
  $ 28,510     $ 102,078  
Accounts receivable
    33,000       -  
Prepaid expenses
    144,880       -  
Other current assets
    8,182       -  
                 
Total Current Assets
    214,572       102,078  
                 
PROPERTY AND EQUIPMENT, net
    124,898       2,893  
                 
OTHER ASSETS
               
                 
Security deposits
    137,072       -  
Goodwill
    49,338       -  
Net intangible licensing costs
    5,004,000       -  
                 
TOTAL ASSETS
  $ 5,529,880     $ 104,971  

The accompanying notes are an integral part of these financial statements.
 
 
5

 

 
RegenoCELL Therapeutics, Inc.
Consolidated Balance Sheets

   
September 30,
   
December 31,
 
   
2010
   
2009
 
   
(Unaudited)
       
             
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
           
             
CURRENT LIABILITIES
           
             
Accounts payable
  $ 483,562     $ 64,981  
Accrued interest payable
    263,139       110,597  
Accrued expenses
    485,284       750  
Notes payable, related parties
    309,265       120,094  
Notes payable, current portion
    112,000       162,323  
                 
Total Current Liabilities
    1,653,250       458,745  
                 
LONG-TERM LIABILITIES
               
                 
Notes payable, net of current portion
    3,911,823       -  
                 
TOTAL LIABILITIES
    5,565,073       458,745  
                 
STOCKHOLDERS' EQUITY (DEFICIT)
               
                 
Preferred Stock $.0001 par value, 80,000,000 shares authorized,
    -       -  
no shares issued and outstanding
               
Common Stock, $.0001 par value, 520,000,000 shares authorized,
               
81,687,500 and 41,437,500 shares issued and outstanding, repectively
    8,169       4,144  
Additional Paid in Capital
    1,259,010       4,913  
Accumulated Deficit
    (1,278,736 )     (362,831 )
Accumulated Other Comprehensive Income (Loss)
    (23,636 )     -  
                 
Total Stockholders' Equity (Deficit)
    (35,193 )     (353,774 )
                 
TOTAL LIABILITIES STOCKHOLDERS' EQUITY (DEFICIT)
  $ 5,529,880     $ 104,971  

The accompanying notes are an integral part of these financial statements.
 
6

 

 
RegenoCELL Therapeutics, Inc.
Consolidated Statements of Operations
(Unaudited)

   
For the Three Months Ended
   
For the Nine Months Ended
 
   
September 30,
   
September 30,
 
   
2010
   
2009
   
2010
   
2009
 
                         
REVENUES
  $ 172,033     $ -     $ 738,855     $ -  
                                 
OPERATING EXPENSES
                               
General and administrative
    169,778       17,396       480,748       33,881  
Professional fees
    131,702       -       440,919       -  
Development costs
    -       46,914       64,625       46,914  
Employee expenses
    280,893       -       410,633       -  
                                 
Total Operating Expenses
    582,373       64,310       1,396,925       80,795  
                                 
OPERATING INCOME (LOSS)
    (410,341 )     (64,310 )     (658,071 )     (80,795 )
                                 
OTHER INCOME (EXPENSE)
                               
Marketing rights
    -       -       30,000       -  
Interest expense
    (6,994 )     -       (287,981 )     -  
Other income
    146       -       146       -  
                                 
Total Other Income (Expenses)
    (6,848 )     -       (257,835 )     -  
                                 
NET LOSS BEFORE INCOME TAXES
    (417,189 )     (64,310 )     (915,906 )     (80,795 )
Income taxes
    -       -       -       -  
                                 
NET LOSS
  $ (417,189 )   $ (64,310 )   $ (915,906 )   $ (80,795 )
                                 
OTHER COMPREHENSIVE INCOME (LOSS)
                               
Foreign currency translation adjustment
    24,881       -       (23,636 )     -  
                                 
TOTAL COMPREHENSIVE LOSS
  $ (392,308 )   $ (64,310 )   $ (939,542 )   $ (80,795 )
                                 
BASIC AND DILUTED LOSS PER
                               
COMMON SHARE
  $ (0.01 )   $ (0.00 )   $ (0.01 )   $ (0.00 )
                                 
WEIGHTED AVERAGE NUMBER OF
                               
COMMON SHARES OUTSTANDING
    81,654,348       131,437,500       81,071,016       131,437,500  

The accompanying notes are an integral part of these financial statements.
 
 
7

 

 
RegenoCELL Therapeutics, Inc.
Consolidated Statements of Stockholders’ Equity (Deficit)
(Unaudited)

                     
Accumulated
             
               
Additional
   
Other
             
   
Common Stock
   
Paid-in
   
Comprehensive
   
Accumulated
       
   
Shares
   
Amount
   
Capital
   
Deficit
   
Deficit
   
Total
 
                                     
December 31, 2008 - Balance
    131,437,500     $ 13,144     $ 4,913     $ -     $ (134,168 )   $ (116,111 )
                                                 
December 30, 2009 - Cancellation of restricted
                                               
common stock issued on July 22, 2008
    (90,000,000 )     (9,000 )     -       -       -       (9,000 )
                                                 
December 31, 2009 - Net (Loss)
    -       -       -       -       (228,663 )     (228,663 )
                                                 
December 31, 2009 - Balance
    41,437,500       4,144       4,913       -       (362,831 )     (353,774 )
                                                 
January 1, 2010- Issuance of  restricted common
                                               
stock in acquisition of licensing rights
    40,000,000       4,000       1,129,122       -       -       1,133,122  
                                                 
July 6, 2010 - Issuance of common
                                               
stock for services (unaudited)
    200,000       20       99,980       -       -       100,000  
                                                 
August 11, 2010 - Issuance of restricted common
                                               
stock for cash (unaudited)
    50,000       5       24,995       -       -       25,000  
                                                 
Foreign currency translation adjustment (unaudited)
    -       -       -       (23,636 )     -       (23,636 )
                                                 
September 30, 2010 - Net (Loss) (unaudited)
    -       -       -       -       (915,906 )     (915,906 )
                                                 
September 30, 2010 - Balance (unaudited)
    81,687,500     $ 8,169     $ 1,259,010     $ (23,636 )   $ (1,278,737 )   $ (35,194 )

The accompanying notes are an integral part of these financial statements.
 
 
8

 

RegenoCELL Therapeutics, Inc.
Consolidated Statements of Cash Flows
(Unaudited)

   
For the Nine Months Ended
 
   
September 30,
 
   
2010
   
2009
 
CASH FLOWS FROM OPERATING ACTIVITIES
           
Net Loss
  $ (915,906 )   $ (80,795 )
Adjustments to reconcile net loss to net cash
               
provided by operating activities:
               
Depreciation
    75,325       -  
Common stock issued for services
    100,000       -  
Amortization of discount on note payable
    128,445       -  
Changes in operating assets and liabilities:
               
(Increase) in accounts receivable
    (33,000 )     -  
(Increase) in prepaid expenses
    (114,804 )     -  
(Increase) in other current assets
    (7,990 )     -  
Increase (Decrease) in accounts payable
    417,736       46,914  
Increase (Decrease) in accrued expenses
    122,787       (2,250 )
Increase in accrued interest
    152,542       3,792  
Increase in customer deposits
    16,500       -  
                 
Net cash provided by (used in) operating activities
    (58,365 )     (32,339 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES
               
Acquisition of property and equipment
    (76,123 )     (3,099 )
Acquisition of licensing rights
    (100,000 )     -  
                 
Net cash used in investing activities
    (176,123 )     (3,099 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES
               
Repayment of notes payable
    (50,323 )     -  
Common stock issued for cash
    25,000       -  
Proceeds from note payable
    13,125       35,438  
Proceeds from notes payable related parties
    188,546       -  
                 
Net cash provided by financing activities
    176,348       35,438  
                 
EFFECTS OF EXCHANGE RATE CHANGES
    (15,428 )     -  
                 
NET INCREASE (DECREASE) IN CASH
    (73,568 )     -  
CASH AT BEGINNING OF PERIOD
    102,078       -  
CASH AT END OF PERIOD
  $ 28,510     $ -  
                 
SUPPLEMENTAL CASH FLOW DISCLOSURES
               
Cash paid for interest
  $ -     $ -  
Cash paid for income taxes
  $ -     $ -  
                 
NON-CASH INVESTING AND FINANCING ACTIVITIES
               
Debt incurred for acquisition of property and equipment
  $ 334,266     $ -  
Debt incurred for acquisition of licensing agreement
  $ 4,900,000     $ -  
Stock issued for acquisition of licensing agreement
  $ 4,000     $ -  

The accompanying notes are an integral part of these financial statements.
 
 
9

 

RegenoCELL Therapeutics, Inc.
Notes to Condensed Consolidated Financial Statements
September 30, 2010 and December 31, 2009

NOTE 1 – CONDENSED FINANCIAL STATEMENTS

The accompanying financial statements have been prepared by the Company without audit.  In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at September 30, 2010, and for all periods presented herein, have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted.  It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 2009 audited financial statements.  The results of operations for the periods ended September 30, 2010 is not necessarily indicative of the operating results for the full year.
 
NOTE 2 - GOING CONCERN

The Company's financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
 
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Recent Accounting Pronouncements
The Company has evaluated recent pronouncements and does not expect their adoption to have a material impact on the Company’s financial position, or statements.
 
 
10

 

RegenoCELL Therapeutics, Inc.
Notes to Condensed Consolidated Financial Statements
September 30, 2010 and December 31, 2009

NOTE 4 – ASSET ACQUISITION

In early January 2010 the Company created a wholly owned foreign subsidiary in Israel for the purpose of developing and operating the laboratory facilities associated with its products. The name of the subsidiary is Regenocell Laboratories Ltd.  On January 7th 2010, the Companies foreign subsidiary Regenocell Laboratories Ltd. consummated an asset purchase agreement with TheraVitae Limited. Under the terms of the agreement the Company acquired certain assets of TheraVitae Limited at a book value of approximately $360,000, in exchange for assuming certain liabilities of approximately $334,000 and $75,000 in cash (all currency is in US dollars).

Purchase Price
           
Cash Paid
  $ 75,000        
Liabilities Assumed
    334,266        
Total Purchase Price
          $ 409,266  
Assets received
               
Computer
    173,058          
Prepaid Exp
    26,676          
Security Deposit
    137,072          
Furniture
    23,122          
Net Value of Assets Purchased
            359,928  
Goodwill
          $ 49,338  

During the quarter, Company entered into an agreement which became effective on January 7, 2010 to purchase the intangible assets of a company incorporated in Hong Kong, Yieldex.  Per the agreement, the Company purchased the rights to patents and patent applications in connection with its activities of stem cell research, therapy development, and clinical trials under the trade name "TheraVitae."  The agreement also assigned rights to testing procedures, testing results, and full copy data from clinical trials conducted by the seller over its operating and research history.

The Company entered into an agreement which became effective on January 7, 2010 to purchase the intangible assets of a company incorporated in Hong Kong, Yieldex.  Per the agreement, the Company purchased the rights to patents and patent applications in connection with its activities of stem cell research, therapy development, and clinical trials under the trade name "TheraVitae."  The agreement also assigned rights to testing procedures, testing results, and full copy data from clinical trials conducted by the seller over its operating and research history.  This also includes all other related procedures, software files, etc.  The assets were acquired in exchange for 40,000,000 shares of the Company’s common stock, $100,000 cash, and a non interest bearing note, payable January 4, 2015, in the amount of $4,900,000. Per the terms of the agreement, repayment of the note will be made out of proceeds of revenues relating to the assigned intangible assets and out of capital raised by management.

Management has discounted the face of the note to present value assuming a 5.25% interest rate. The amount of the discount is approximately $1,129,300, is being amortized in equal monthly amounts of approximately $21,437 over the term of the note and charged to interest expense on the income statement. As of September 30, 2010 the unamortized discount was $1,000,678.
 
NOTE 5 – RELATED PARTY NOTES PAYABLE

During the nine months ended September 30, 2010, the Company has borrowed $309,265 from a related party to fund continuing operations.  This note bears no interest, is due on demand and is uncollateralized. The balance as of December 31, 2009 was approximately $120,094.
 
 
11

 

RegenoCELL Therapeutics, Inc.
Notes to Condensed Consolidated Financial Statements
September 30, 2010 and December 31, 2009

 
NOTE 6 – NOTES PAYABLE

On March 30, 2010, a note payable representing 2.5 percent of total notes payable outstanding went into default which meant that the default terms of the note went into effect.  According to the terms of the agreement, in the event of default, the borrower is to pay an interest rate of 18 percent per annum on all outstanding amounts owing to the lender until all amounts including interest are paid in full. The interest began to accrue from the date of breach and will extend up to the date all amounts owing are repaid in full by the Company to the lender.
 
NOTE 7 – EQUITY TRANSACTIONS

On July 6, 2010, the Company issued 200,000 shares of its common stock for legal services valued at $0.50 per share.

On August 11, 2010, the Company issued 50,000 shares of its restricted common stock for cash at $0.50 per share. The investor also received 50,000 common stock purchase warrants with an exercise price of $0.75 per share.
 
NOTE 8 – SUBSEQUENT EVENTS

In accordance with ASC 855-10, Company management reviewed all material events through the date of this report and there are no material subsequent events to report.
 
 
12

 

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.

In 2009 the parties to the Letter of Intent reached an impasse and the license was not acquired.

In early January 2010 the Company created a wholly owned foreign subsidiary in Israel for the purpose of developing and operating the laboratory facilities associated with its products. The name of the subsidiary is Regenocell Laboratories Ltd.

On January 7th 2010, the Company’s foreign subsidiary Regenocell Laboratories Ltd. consummated an asset purchase agreement with TheraVitae Limited. Under the terms of the agreement the Company will acquire certain assets of TheraVitae Limited, approximate net book value of $346,000, in exchange for assuming certain liabilities of approximately $334,000 and $75,000 in cash (all currency is in US dollars).
 
 
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In early January 2010 the Company signed an Assignment of Rights agreement with Yieldex LTD a Hong Kong corporation.  Under the agreement the Company purchased the right to use outside of Asia the patents and patent applications related to Yieldex LTD’s stem cell research, therapy development and clinical trials. In addition the Company obtained the rights to all the clinical trial results, endorsements, files and other pertinent information.  Under the terms of the agreement the Company will pay Yieldex LTD $5,000,000 (US) in cash over a period of 5 years. In addition the Company will also irrevocably issue 40,000,000 shares of Common stock to Yieldex LTD.

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 3 of the notes to our consolidated 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 preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Provision for Taxes

The Company applies ASC 740, which requires the asset and liability method of accounting for income taxes.  This method requires that the current or deferred tax consequences of all events recognized in the financial statements be measured by applying the provisions of enacted tax laws to determine the amount of taxes payable or refundable currently or in future years.  Deferred tax assets are reviewed for recoverability and the Company records a valuation to reduce its deferred tax assets when it is more likely than not that all or some portion of the deferred tax assets will not be recovered.

Foreign Currency Translation

Assets and liabilities of consolidated subsidiaries whose functional currency is not the U.S. dollar are translated into U.S. dollars, the functional currency of the Company, using the exchange rate in effect at each period end.  Revenues and expenses are translated at the weighted average exchange rate during the period.  The effects of the foreign currency translation adjustment arising from differences in exchange rate from period to period are deferred and accumulated in other comprehensive loss for subsidiaries whose functional currency is their local currency.  Currency transaction gain or losses, derived on monetary assets and liabilities stated in a currency other than the functional currency, are recognized in current operations and have not been significant to the Company’s operating results in any period.

Off Balance Sheet Arrangements

The Company is not a party to any off-balance sheet arrangements.
 
 
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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 a part of its operations or otherwise.

The principal business address of the Company is 2 Briar Lane, Natick, Massachusetts 01760, which is space owned by the President and Chief Executive Officer of the Company. Rent has not been charged for the office space and it is not expected that rent will be charged in the near-term.

Regenocell Laboratories, Ltd. has assumed a lease with Africa-Israel for its manufacturing operations in Israel.  Lease payments converted to dollars are $10,400 plus VAT totaling $12,050 per month.  The lease runs through August 31, 2011 with a two year option to renew.  There is $135,000 in a restricted account used by Bank Hapoalim to guarantee payment of the lease.  These funds were transferred and accordingly the bank guarantee transferred from TheraVitae Limited to Regenocell Laboratories, Ltd.

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 manufacturers a product utilizing adult stem cells for the treatment of congestive heart failure and other indications. 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.  The manufacturing operations for this process are located in Israel.

Currently congestive heart failure patients cleared for treatment have one-half pint of blood drawn which is sent to the 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 several locations 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 (500) 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.

 
·
Decrease in the Canadian Cardiovascular Society (CCS) Grading Scale.

On January 7, 2010 the Company entered into two agreements.  Closing occurred on February 4, 2010.
 
 
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The first agreement is between TheraVitae Limited, the Israeli corporation manufacturing the stem cell therapy product, and a newly formed Israeli corporation which is a wholly owned subsidiary of the Company, Regenocell Laboratories, Ltd.  Pursuant to the terms of the agreement, certain assets were acquired and certain liabilities assumed.  These assets include all the manufacturing and office equipment and the transfer of the lease.  At signing the Company paid $75,000 toward the reduction of the assumed liabilities.  All the employees were terminated then offered and accepted employment with Regenocell Laboratories, Ltd.

The second agreement is between Yieldex, Ltd. and the Company for the acquisition of certain rights.  This includes clinical data, the non exclusive use of the CRM System which manages clinical data and input necessary to schedule a patient for stem cell production, and all rights in patent and patent applications, if any, in connection with activities of stem cell research, therapy development and clinical trials under the trade name ”TheraVitae” for the world except for Asia.  Israel is excluded by definition from being part of Asia.  The cash price is $5,000,000 (five million United States dollars), of which $75,000 was paid to TheraVitae Limited and $25,000 to Yieldex on January 7.  The balance is due in monthly installments on or before January 4, 2015.  Minimum installments are $5,000 per patient processed in Israel after the first eight patients during the preceding month.  In addition 25% of any equity raised by the Company will be applied to the outstanding balance.

In addition 40,000,000 (forty million) shares of the Company’s common stock, par value $.0001, was issued to Yieldex Ltd and its nominees.  The 40,000,000 shares are restricted and subject to a two year Lock-Up period beginning January 4, 2010.  These shares are also subject to a voting agreement.  During the Lock-Up period and for any subsequent period until the shares are sold to the public in the open market,  the Board of Directors will be expanded to five members and the shareholders whose shares are locked up will vote for a maximum of two directors.  The Company’s affiliated shareholders who are not parties to the Lock-Up agreement will vote their shares for the same two directors until the aggregate number of Yieldex shares are 15,000,000 (fifteen million) or less. The Yieldex shareholders agree to vote the Yieldex shares for a maximum of three directors designated by James F. Mongiardo.  While this voting rights agreement is in effect, unanimous approval of all the directors then in office or approval of holders of at least a majority of the shares will be required for: (i) any proposal to increase capital in a way that would result in dilution of existing shareholders’ percentages by ten percent (10%) or more; (ii) any proposal to merge, consolidate or amalgamate with any other corporate entity; (iii) any proposal to sell all or a material part of the assets; and, (iv) any proposal to amend the bylaws.

As a result of the actions described above, on February 4, 2010 the Company’s primary asset is Regenocell Laboratories Ltd. which is manufacturing and selling stem cell therapy product used to treat congestive heart failure and peripheral artery disease.  Purchases are or have been made to treat patients for these indications in Bangkok, Thailand and the Dominican Republic.  It is anticipated that purchases will also be made to treat patients in Croatia and other countries.

For the three months ended September 30, 2010, the Company had revenues of $172,033 compared to no revenues for the same three months in 2009.  Revenues for the nine months ended September 30, 2010 were $738,855 compared to no revenues for the same nine months in 2009.  Total comprehensive loss for the three months ended September 30, 2010 was $(392,308) compared to $(64,310) for the same three months in 2009.  Net comprehensive loss for the nine months ended September 30, 2010 was $(939,542) compared to $(80,795) for the same nine months in 2009.  The increase in revenues and the increase in net comprehensive loss are a result of the asset purchase and assignment of rights transactions completed in January 2010.

Cash on hand was $28,510 as of September 30, 2010 which amount is inadequate to fund the company’s current projected capital requirements.  In order to implement the new strategy of the Company, the Company will need to raise capital during the next twelve months.  The Company has funded operations to date in part through the sale of equity securities and loans, although such efforts have been insufficient to effectively pursue its business strategy.

 
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With respect to Regenocell Laboratories, Ltd., processing eight patients during a month will result in revenues exceeding $130,000.  The combination of the existing business being serviced by the manufacturing operations and the addition of patients to be treated in other locations is expected to keep patient flow for the manufacturing facility at or above the breakeven of eight patients.  Capacity at the current configuration of the manufacturing facility is more than double the breakeven.  There can be no assurance of any patient flow for any given month.

Our capital requirements will depend on numerous factors, including but not limited to the commitments and progress of our research and development efforts, the progress of clinical trials, the cost of sales and marketing for the congestive heart failure stem cell therapy business and other products, medical and business consultants and advisors, the time and cost involved in maintaining regulatory compliance, and competing technological and market developments.  Future activities, including the establishment of stem cell therapy for the treatment of peripheral artery disease in the medical marketplace, will be subject to our ability to raise funds.

We intend to raise capital primarily through the public or private sale of securities (equity and/or debt), although there can be no assurance that we will be able to obtain capital or, if such capital is available, that the terms of any financing will be acceptable.  If the Company succeeds in raising capital, such funds will be used to facilitate the manufacturing operations of Regenocell Laboratories Ltd., to find new customers for Regenocell Laboratories Ltd. With respect to peripheral artery disease, capital will be used for completing the research and development to submit an IND (and its equivalent in Europe) for authorization to begin clinical trials in the United States and Europe. This may include payment for additional animal trials. Payment for clinical trials includes retaining the services of a clinical research organization, payment to the clinical research site(s) for patients enrolled in the clinical trials, payment for the stem cell therapy used in these clinical trials, payment for costs associated with Institution Review Board Approval, and preparation of reports to the Food and Drug Administration (“FDA”) and European Medicines Agency (“EMEA”), requests to continue later phase clinical trials and submission of a BLA to the FDA and its equivalent to the EMEA requesting marketing approval for the treatment of peripheral artery disease.

The Company also does not expect to purchase any plant or significant equipment over the next 12 months.  Regenocell Laboratories, Ltd. may purchase between $100,000-$300,000 in new equipment for its manufacturing operations.

If we are unsuccessful at raising sufficient capital to fund our operations, for whatever reason, we may be forced to seek opportunities outside of our new corporate focus or to seek a buyer for our business or another entity with which we could partner.  Ultimately, if all of these alternatives fail, we may be required to cease operations and seek protection from creditors under applicable bankruptcy laws.
 
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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 March 31, 2010.  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, 2010 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

On February 10, 2010, Kwalata Trading Limited, a wholly owned subsidiary of TheraVitae, Inc., a Canadian corporation, obtained an ex parte order from the District Court for the Central Region of Israel to seize the intellectual property alleged owned by Kwalata which is in the possession of either Theravitae, Ltd. or Regenocell Laboratories Ltd., the wholly owned Israeli subsidiary corporation of the Company. The Court appointed trustee took files and computers including computers dedicated solely to equipment from  Regenocell Laboratories facilities at 7, Pinchas St., Ness Ziona in what the Company considered to be an unlawful attempt to close the facilities.

Prior to a scheduled hearing, a settlement agreement was reached which then became the resolution of the case by the District Court for the Central Region of Israel.  All equipment and files taken are to be returned subject to copying by the applicants at their expense.  Excluded from copying are attorney-client privileged documents, business documents and private documents.  Regenocell Laboratories and the Company agree not to disclose the alleged intellectual property to third parties except in the ordinary course of business, for government filings and when a non disclosure agreement is obtained. This order remains in effect until a subsequent order by the Court or the resolution of an arbitration begun in Canada by Kwalata against TheraVitae, Ltd.

On October 20, 2010, TheraVitae, Inc., the same Canadian corporation involved in the litigation in Israel, served the Company with a Statement of Claim filed with the Ontario, Canada Superior Court of Justice alleging breach of a Confidentiality and Non-Circumvention Agreement.  A response is due on or before December 31, 2010.  The Company believes that the Statement of Claim is totally without merit.

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

Pursuant to a Private Placement dated June 10, 2010, fifty thousand Units were sold at $.50 per Unit.  Net proceeds to the Company were $25,000, all of which was used to fund operations in Israel.  The purchaser of the Units was issued 50,000 unregistered common shares and a five year warrant to purchase 50,000 unregistered common shares at $.75 per share.

Item 3.  Defaults Upon Senior Securities

Not applicable.

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

On January 4, 2010 through written consent in lieu of a special meeting of the stockholders of RegenoCELL Therapeutics, Inc., stockholders representing at least of majority of the outstanding stock of the Company agreed to purchase certain assets which will give the Company control over the manufacture of the stem cell product which will be used to treat patients in Mexico as well as supply that products for patients being treated by other corporations in Bangkok, the Dominican Republic and other locations, and the Company having arranged for the funding needed to execute the agreements which will give it control over the manufacture of the stem cell product thereupon approved, adopted, ratified and confirmed the following actions taken by the Board of Directors: (1)  Effective January 4, 2010, or as soon as practicable thereafter, create a wholly owned subsidiary incorporated under the laws of the state of Israel with the corporate name “Regenocell Laboratories, Ltd.”  The sole shareholder of Regenocell Laboratories, Ltd. shall be the Corporation; and upon creation of Regenocell Laboratories, Ltd., authorize James F. Mongiardo to serve as its sole director; and upon the appointment of James F. Mongiardo as the sole director of Regenocell Laboratories, Ltd., authorize the opening of corporate accounts for Regenocell Laboratories, Ltd. with Bank Hapoalim or another local bank in Israel with employees of Regenocell Laboratories, Ltd. being authorized as signatories on said accounts; (2) approve an Asset Purchase Agreement between Regenocell Laboratories, Ltd. and TheraVitae Ltd., a company incorporated under the laws of the state of Israel; (3) approve an Assignment of Rights between Yieldex, Ltd., a company incorporated under the laws of Hong Kong; (4) pursuant to the terms of the Yieldex agreement, issue forty million (40,000,000) restricted common shares, par value $.0001. Said shares shall be initially issued in the name of “Yieldex, Ltd.”, held in escrow by the Corporation and voted in accordance with recommendations by the Corporation’s Board until agreed upon Share Lock-Up and Corporate Governance documents are executed by each entity or person to receive these shares. When presented with such documents setting forth the entire re-allocation of these shares, the Corporation shall instruct Florida Atlantic Stock Transfer to cancel the Yieldex, Ltd. stock certificate and re-issue the same number shares in accordance with the instructions and documentation received; (5) approve a Loan Agreement between Mr. Christian Frampton and the Corporation for one hundred sixty thousand United States dollars ($160,000); and (6) in return for the personal guarantee of the President of the Corporation James F. Mongiardo to guarantee the repayment of the capital but not the fee of the loan, grant James F. Mongiardo a first lien on all assets of the Corporation including its wholly owned subsidiaries until said capital has been repaid by the Corporation.

Item 5.  Other Information

On June 22, 2010, a Registration Statement on From S-1 was filed to register shares which the Company believed were already free trading and 5,450,000 restricted shares issued on or after July 16, 2008.  This was done at the request of FINRA who indicated that the effectiveness of such a Registration Statement was necessary before FINRA would approve trading on the OTC Bulletin Board.  The SEC decided not to review the Registration Statement.  The S-1 became effective July 6, 2010.  The new market maker then submitted a Form 211 to FINRA on July 13, 2010 seeking approval for the Company’s shares to trade on the OTC Bulletin Board.  FINRA on July 21 made additional comments.  A proposal was then made by the Company to the new market maker on a response which the market maker accepted.  Certain shareholders located in Florida agreed to open accounts with the new market maker.  These shareholders and certain others also agreed to a Lock-up/Leak out agreement for one year.  The market-maker submitted a response to FINRA.  On September 27, 2010, FINRA approved trading on the Over-the-Counter Bulletin Board and Pink Sheets.

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

a)
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

The Company filed a Current Report on Form 8-K on March 22, 2010 which was then amended on March 31, 2010 in connection with a change in certifying accountants from Lieberman, Sharma & Associates, PA to Sadler, Gibb & Associates.

The Company filed a Current Report on Form 8-K on April 9, 2010 in connection with the actions taken by the Board of Directors with the approval of at least a majority of the outstanding stock of the Company to acquire certain assets and assume certain liabilities in Israel through its wholly owned subsidiary Regenocell Laboratories, Ltd. from Thera Vitae, Ltd. and to enter into an assignment of rights agreement with Yieldex, Ltd.
 
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:  December 13, 2010
 
   
 
By:
/s/ James F. Mongiardo
 
 
James F. Mongiardo
 
Principal Executive Officer,
 
President, Principal Financial Officer,
 
Principal Accounting Officer, and
 
Director
 
 
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