U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 FORM 10-Q

 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2015

 

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from

 

Commission File No. 333-191725

 

REGEN BIOPHARMA, INC.

(Exact name of small business issuer as specified in its charter)

 

Nevada		45-5192997
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

 

 4700 Spring Street, St 304, La Mesa, California 91942

(Address of Principal Executive Offices)

 

619 702 1404

(Issuer’s telephone number)

 

None

(Former name, address and fiscal year, if changed since last report) 

 

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

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

☐  Large accelerated filer	☐  Accelerated filer
☐  Non-accelerated filer	☒  Smaller reporting company

 

APPLICABLE ONLY TO CORPORATE ISSUERS:

 

As of July 1 , 2015 there were 113,937,338 shares of common stock issued and outstanding.

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):

Yes ☐ No ☒

 

 

PART I - FINANCIAL INFORMATION

Item 1. - Financial Statements

 

REGEN BIOPHARMA , INC.
BALANCE SHEET
		As of				As of
		June 30, 2015				September 30, 2014
		(unaudited)
ASSETS
CURRENT ASSETS
Cash			208,582				0
Note Receivable			12,051				10,422
Prepaid Expenses			6,289				0
Accrued Interest Receivable			1,081				233
Total Current Assets			228,003				10,655
TOTAL ASSETS			228,003				10,655
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Bank Overdraft			0				6,137
Accounts payable			1,190				3,305
Notes Payable			103,751				120,169
Accrued payroll taxes			6,692				8,463
Accrued Interest			18,147				2,212
Accrued Rent			5,000				0
Accrued Payroll			10,501				0
Total Current Liabilities			145,281				140,286
Total Liabilities			145,281				140,286
STOCKHOLDERS' EQUITY (DEFICIT)
Common Stock ($.0001 par value) 500,000,000 shares authorized; 113,525,096 issued and outstanding as of June 30, 2015 and 51,907,917 shares issued and outstanding September  30, 2014			11,353				5,191
Preferred Stock, 0.0001 par value, 100,000,000 authorized and 5,000,000 authorized as of June 30, 2015 and September 30, 2014 respectively
Series A Preferred 90,000,000 Authorized and 0 authorized, 60,548,364 and 0 outstanding as of June 30, 2105 and September 30, 2014 respectively			6,055				0
Series AA Preferred $0.0001 par value 600,000 authorized and 30,000 and 0 outstanding as of June 30, 2015 and September 30, 2014 respectively			3				0
Additional Paid in capital			11,209,694				485,097
Contributed Capital			728,658				658,658
Retained Earnings (Deficit) accumulated during the development stage			(11,873,041	)			(1,278,577	)
Total Stockholders' Equity (Deficit)			82,722				(129,631	)
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)			228,003				10,655
The Accompanying Notes are an Integral Part of These Financial Statements

REGEN BIOPHARMA , INC.
STATEMENT OF OPERATIONS
			Three months ended				Three months ended				Nine Months Ended				Nine Months Ended
			June 30, 2015				June 30, 2014				June 30, 2015				June 30, 2014
			(unaudited)				(unaudited)				(unaudited)				(unaudited)
REVENUES			0				0				0				0
COST AND EXPENSES
Research and Development			68,081				0				93,287				13,867
General and Administrative			463,765				127,580				906,754				389,961
Consulting and Professional Fees			73,364				30,287				413,125				109,917
Rent			16,200				0				43,071				0
Total Costs and Expenses			621,410				157,867				1,456,238				513,745
OPERATING LOSS			(621,410	)			(157,867	)			(1,456,238	)			(513,745	)
OTHER INCOME & (EXPENSES)
Interest Income			297				14				848				14
Refunds of amounts previously paid			0				490				0				490
Interest Expense			(3,512	)			0				(18,742	)			0
Capital contribution to parent			0				(8,658	)			0				(48,510	)
Loss on issuance of common shares for less than fair value			(937,425	)			0				(9,116,857	)			0
Preferred shares issued pursuant to contractual obligations			(321	)			0				(3,475	)			0
TOTAL OTHER INCOME (EXPENSE)			(940,961	)			(8,154	)			(9,138,226	)			(48,006	)
NET INCOME (LOSS)			(1,562,371	)			(166,021	)			(10,594,463	)			(561,751	)
BASIC AND FULLY DILUTED EARNINGS (LOSS) PER SHARE			(0.0141	)			(0.0032	)			(0.1333	)			(0.0152	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING			110,648,054				51,909,907				79,454,728				37,082,956
The Accompanying Notes are an Integral Part of These Financial Statements

 

REGEN BIOPHARMA , INC.
STATEMENT OF CASH FLOWS
(unaudited)
		Nine  Months Ended				Nine  Months Ended
		June 30, 2015				June 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (loss)			(10,594,463	)			(561,751	)
Adjustments to reconcile net Income to net cash
Preferred Stock issued for Expenses			100				0
Preferred Stock issued for interest			891				0
Common Stock issued for expenses
Preferred Stock issued pursuant to contractual obligations			3,475				0
Common Stock issued to Consultants			226,177				0
Preferred Stock issued to Consultants			440				0
Changes in operating assets and liabilities:
Increase (Decrease) in Accounts Payable			(2,115	)			117
(Increase) Decrease in Notes Receivable			(1,629	)			(2,222	)
(Increase) Decrease in Interest  Receivable			(848	)			(14	)
Increase (Decrease) in Bank Overdraft			(6,137	)			0
Increase (Decrease) in Accrued Expenses			29,665				7,343
(Increase) Decrease in Prepaid Expenses			(6,289	)			0
Net Cash Provided by (Used in) Operating			(10,350,734	)			(556,527	)
Activities
CASH FLOWS FROM FINANCING ACTIVITIES
Common Stock issued for Cash			0				300,000
Increase in Contributed Capital			70,000				140,000
Increase (Decrease)  in Notes Payable			19,582				50,000
Increase in Convertible Notes payable			972,686				0
Increase in issuance of stock below fair value			9,116,857				0
Increase in Additional Paid in Capital			380,191				0
Net Cash Provided by (Used in) Financing Activities			10,559,316				490,000
Net Increase (Decrease) in Cash			208,582				(66,527	)
Cash at Beginning of Period			0				115,922
Cash at End of Period			208,582				49,395
Supplemental Disclosure of Noncash investing and financing activities:
Common Shares Issued for Debt			1,002,686				0
Preferred Shares issued for Debt			6,000				0
The Accompanying Notes are an Integral Part of These Financial Statements

 

 

REGEN BIOPHARMA, INC.

Notes to Financial Statements

As of June 30, 2015

 

The accompanying unaudited interim condensed consolidated financial statements of Regen Biopharma , Inc. (“Regen” or “the Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the United States Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s annual report filed with the SEC on Form 10-K for the year ended September 30, 2014. In general, interim disclosures do not repeat those contained in the annual statements. In the opinion of management, all adjustments consisting of normal recurring adjustments necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. 

 

NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

The Company was organized April 24, 2012 under the laws of the State of Nevada. The Company is a majority owned subsidiary of Bio-Matrix Scientific Group, Inc, a Delaware corporation.

 

The Company intends to engage primarily in the development of regenerative medical applications which we intend to license from other entities up to the point of successful completion of Phase I and or Phase II clinical trials after which we would either attempt to sell or license those developed applications or, alternatively, advance the application further to Phase III clinical trials

 

A. BASIS OF ACCOUNTING

 

The financial statements have been prepared using the basis of accounting generally accepted in the United States of America. Under this basis of accounting, revenues are recorded as earned and expenses are recorded at the time liabilities are incurred. The Company has adopted a September 30 year-end.

 

B. 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.

 

C. CASH EQUIVALENTS

 

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

   

D. PROPERTY AND EQUIPMENT

 

Property and equipment are recorded at cost. Maintenance and repairs are expensed in the year in which they are incurred. Expenditures that enhance the value of property and equipment are capitalized.

 

E. FAIR VALUE OF FINANCIAL INSTRUMENTS

 

Fair value is the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date.  A fair value hierarchy requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of inputs required by the standard that the Company uses to measure fair value:

 

Level 1:  Quoted prices in active markets for identical assets or liabilities

 

Level 2:  Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.

 

Level 3:  Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

 

F. INCOME TAXES

 

The Company accounts for income taxes using the liability method prescribed by ASC 740, “Income Taxes.” Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the year in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized as income or loss in the period that includes the enactment date.

 

The Company applied the provisions of ASC 740-10-50, “Accounting For Uncertainty In Income Taxes”, which provides clarification related to the process associated with accounting for uncertain tax positions recognized in our financial statements. Audit periods remain open for review until the statute of limitations has passed. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the Company’s liability for income taxes. Any such adjustment could be material to the Company’s results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period. As of June 30, 2015 the Company had no uncertain tax positions, and will continue to evaluate for uncertain positions in the future.

 

The Company generated a deferred tax credit through net operating loss carry forward.  However, a valuation allowance of 100% has been established.

 

Interest and penalties on tax deficiencies recognized in accordance with ACS accounting standards are classified as income taxes in accordance with ASC Topic 740-10-50-19.

 

G.  BASIC EARNINGS (LOSS) PER SHARE

 

The Financial Accounting Standards Board (FASB) issued Accounting Standards Codification (ASC) 260, "Earnings Per Share", which specifies the computation, presentation and disclosure requirements for earnings (loss) per share for entities with publicly held common stock. ASC 260 requires the presentation of basic earnings (loss) per share and diluted earnings (loss) per share. The Company has adopted the provisions of ASC 260 effective from inception.

 

Basic net loss per share amounts is computed by dividing the net income by the weighted average number of common shares outstanding.

 

H. ADVERTISING

 

Costs associated with advertising are charged to expense as incurred. Advertising expenses were $0 for the three months ended June 30, 2015 and $0 for the three months ended June 30, 2014.

 

NOTE 2.  RECENT ACCOUNTING PRONOUNCEMENTS

 

In June 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-10, which eliminated certain financial reporting requirements of companies previously identified as "Development Stage Entities" (Topic 915). The amendments in this ASU simplify accounting guidance by removing all incremental financial reporting requirements for development stage entities. The amendments also reduce data maintenance and, for those entities subject to audit, audit costs by eliminating the requirement for development stage entities to present inception-to-date information in the statements of income, cash flows, and shareholder equity. Early application of each of the amendments is permitted for any annual reporting period or interim period for which the entity's financial statements have not yet been issued (public business entities) or made available for issuance (other entities). Upon adoption, entities will no longer present or disclose any information required by Topic 915. The Company has adopted this standard.

 

The following accounting standards updates were recently issued and have not yet been adopted by us. These standards are currently under review to determine their impact on our consolidated financial position, results of operations, or cash flows.

 

In May 2014, FASB issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. The revenue recognition standard affects all entities that have contracts with customers, except for certain items. The new revenue recognition standard eliminates the transaction-and industry-specific revenue recognition guidance under current GAAP and replaces it with a principle-based approach for determining revenue recognition. Public entities are required to adopt the revenue recognition standard for reporting periods beginning after December 15, 2016, and interim and annual reporting periods thereafter. Early adoption is not permitted for public entities. The Company has reviewed the applicable ASU and has not, at the current time, quantified the effects of this pronouncement, however it believes that there will be no material effect on the consolidated financial statements.

In June 2014, FASB issued Accounting Standards Update (ASU) No. 2014-12 Compensation — Stock Compensation (Topic 718), Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. A performance target in a share-based payment that affects vesting and that could be achieved after the requisite service period should be accounted for as a performance condition under Accounting Standards Codification (ASC) 718, Compensation — Stock Compensation. As a result, the target is not reflected in the estimation of the award's grant date fair value. Compensation cost would be recognized over the required service period, if it is probable that the performance condition will be achieved. The guidance is effective for annual periods beginning after 15 December 2015 and interim periods within those annual periods. Early adoption is permitted. The Company has reviewed the applicable ASU and has not, at the current time, quantified the effects of this pronouncement, however it believes that there will be no material effect on the consolidated financial statements.

In August2014, FASB issued Accounting Standards Update (ASU) No. 2014-15 Preparation of Financial Statements – Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern. Under generally accepted accounting principles (GAAP), continuation of a reporting entity as a going concern is presumed as the basis for preparing financial statements unless and until the entity's liquidation becomes imminent. Preparation of financial statements under this presumption is commonly referred to as the going concern basis of accounting. If and when an entity's liquidation becomes imminent, financial statements should be prepared under the liquidation basis of accounting in accordance with Subtopic 205-30, Presentation of Financial Statements—Liquidation Basis of Accounting. Even when an entity's liquidation is not imminent, there may be conditions or events that raise substantial doubt about the entity's ability to continue as a going concern. In those situations, financial statements should continue to be prepared under the going concern basis of accounting, but the amendments in this Update should be followed to determine whether to disclose information about the relevant conditions and events. The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company will evaluate the going concern considerations in this ASU, however, at the current period, management does not believe that it has met the conditions which would subject these financial statements for additional disclosure.

 

On January 31, 2013, the FASB issued Accounting Standards Update [ASU] 2013-01, entitled Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities. The guidance in ASU 2013-01 amends the requirements in the FASB Accounting Standards Codification [FASB ASC] Topic 210, entitled Balance Sheet. The ASU 2013-01 amendments to FASB ASC 210 clarify that ordinary trade receivables and receivables in general are not within the scope of ASU 2011-11, entitled Disclosure about Offsetting Assets and Liabilities, where that ASU amended the guidance in FASB ASC 210. As those disclosures now are modified with the ASU 2013-01 amendments, the FASB ASC 210 balance sheet offsetting disclosures now clearly are applicable only where reporting entities are involved with bifurcated embedded derivatives, repurchase agreements, reverse repurchase agreements, and securities borrowing and lending transactions that either are offset using the FASB ASC 210 or 815 requirements, or that are subject to enforceable master netting arrangements or similar agreements. ASU 2013-01 is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The adoption of this ASU is not expected to have a material impact on our financial statements.

 

On February 28, 2013, the FASB issued Accounting Standards Update [ASU] 2013-04, entitled Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date. The ASU 2013-04 amendments add to the guidance in FASB Accounting Standards Codification [FASB ASC] Topic 405, entitled Liabilities and require reporting entities to measure obligations resulting from certain joint and several liability arrangements where the total amount of the obligation is fixed as of the reporting date, as the sum of the following:

 

The amount the reporting entity agreed to pay on the basis of its arrangement among co-obligors.

 

Any additional amounts the reporting entity expects to pay on behalf of its co-obligors.

 

While early adoption of the amended guidance is permitted, for public companies, the guidance is required to be implemented in fiscal years, and interim periods within those years, beginning after December 15, 2013. The amendments need to be implemented retrospectively to all prior periods presented for obligations resulting from joint and several liability arrangements that exist at the beginning of the year of adoption. The adoption of ASU 2013-04 is not expected to have a material effect on the Company’s operating results or financial position.

 

On April 22, 2013, the FASB issued Accounting Standards Update [ASU] 2013-07, entitled Liquidation Basis of Accounting. With ASU 2013-07, the FASB amends the guidance in the FASB Accounting Standards Codification [FASB ASC] Topic 205, entitled Presentation of Financial Statements. The amendments serve to clarify when and how reporting entities should apply the liquidation basis of accounting. The guidance is applicable to all reporting entities, whether they are public or private companies or not-for-profit entities. The guidance also provides principles for the recognition of assets and liabilities and disclosures, as well as related financial statement presentation requirements. The requirements in ASU 2013-07 are effective for annual reporting periods beginning after December 15, 2013, and interim reporting periods within those annual periods. Reporting entities are required to apply the requirements in ASU 2013-07 prospectively from the day that liquidation becomes imminent. Early adoption is permitted. The adoption of ASU 2013-07 is not expected to have a material effect on the Company’s operating results or financial position.

A variety of proposed or otherwise potential accounting standards are currently under study by standard setting organizations and various regulatory agencies.  Due to the tentative and preliminary nature of those proposed standards, the Company’s management has not determined whether implementation of such standards would be material to its financial statements.

 

NOTE 3. GOING CONCERN

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company generated net losses of $ 11,873,041 during the period from April 24, 2012 (inception) through June 30, 2015. This condition raises substantial doubt about the Company's ability to continue as a going concern. The Company's continuation as a going concern is dependent on its ability to meet its obligations, to obtain additional financing as may be required and ultimately to attain profitability. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Management plans to raise additional funds by offering securities for cash. Management has yet to decide what type of offering the Company will use or how much capital the Company will raise. During the quarter ended March 31, 2015 the Company raised $775,000 through the issuance of convertible debt and during the quarter ended June 30, 2015 the Company raised $90,000 through the issuance of convertible debt ( Note 4).

 

NOTE 4. NOTES PAYABLE AND CONVERTIBLE NOTES PAYABLE

 

		June 30, 2015				September 30, 2014
Bio Matrix Scientific Group, Inc. (Note 7)			19,701				90,000
David Koos ( Notes7)			50				30,168
Bio Technology Partners Business Trust			84,000				0
Notes payable		$	103,751			$	120,168

  

$19,701 lent to the Company by Bio Matrix Scientific Group, Inc. is due and payable at the demand of the holder and bear simple interest at a rate of 10% per annum.

 

$50 lent to the Company by David Koos. is due and payable at the demand of the holder and bear simple interest at a rate of 15% per annum.

 

$84,000 lent to the Company by Bio Technology Partners Business Trust. is due and payable at the demand of the holder and bear simple interest at a rate of 10% per annum.

 

CONVERTIBLE NOTES PAYABLE

 

During the quarter ended March 31, 2015 the Company issued Convertible Notes ( “Notes”) with an aggregate face value of $882,686 . Consideration for these Notes consisted of:

 

(a)

$775,000 cash and

 

(b)

Satisfaction of $107,686 of existing indebtedness:

 

Each Note becomes due and payable at the demand of the Lender at any time after one year subsequent to the issuance date and bears simple interest at 10% per annum payable quarterly at the demand of the Lender.

 

All or part of the principal and accrued but unpaid interest is convertible at any time at the demand of the Lender into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to a 65% discount to the lowest Trading Price (as defined below) for the Common Shares during the thirty (30) Trading Day (as defined below) period ending on the latest complete Trading Day prior to the conversion date. “Trading Price” means the closing bid price on the Over-the-Counter Bulletin Board, or applicable trading market (the “OTCQB”) as reported by a reliable reporting service (“Reporting Service”) designated by the Lender (i.e. Bloomberg) or, if the OTCQB is not the principal trading market for such security, the closing bid price of such security on the principal securities exchange or trading market where such security is listed or traded or, if no closing bid price of such security is available in any of the foregoing manners, the average of the closing bid prices of any market makers for such security that are listed in the “pink sheets” by the National Quotation Bureau, Inc. If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by Regen and the Lender. “Trading Day” shall mean any day on which the Common Shares are tradable for any period on the OTCQB, or on the principal securities exchange or other securities market on which the Common Shares are then being traded. “Trading Volume” shall mean the number of shares traded on such Trading Day as reported by such Reporting Service. The Conversion Price shall be equitably adjusted for stock splits, stock dividends, rights offerings, combinations, recapitalization, reclassifications, extraordinary distributions and similar events by Regen relating to the Lender’s securities. Principal and interest may be prepaid in part or in full by Regen on not less than three Trading Days prior written notice to the Lender.

 

Upon expiration of the six month holding specified in Rule 144(d) promulgated under the Securities Act of 1933, Regen , at the request of the Lender, shale remove sale restrictions on one sixth (1/6) of the shares that resulted from conversions made through the issuance of this Note , each month, for a period of six months, with all restrictions being removed by the Company by the expiration of the six month subsequent to expiration of the aforementioned Rule 144 holding period.

 

If the Lender converts principal into Common Stock of Regen on or prior to 180 days from the issuance of the Note the Lender shall receive one share of Preferred Series “A” Stock of the Company for each share of Common Stock received through conversion.

 

All Notes were fully converted during the quarter ended March 31, 2015. 31,539,262 common shares of Regen were issued to the Convertible Noteholders in satisfaction of the convertible indebtedness. 31,538,862 of the Company’s Series A Preferred shares were issued to Noteholders pursuant to the terms and conditions of the Notes.

 

The Company analyzed the conversion feature of the Notes for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the embedded conversion feature should be classified as a liability due to their being no explicit limit to the number of shares to be delivered upon settlement of the above conversion features. ASC 815-15 requires that the conversion features are bifurcated and separately accounted for as an embedded derivative contained in the Company’s convertible debt. The embedded derivative is carried on the balance sheet at fair value. Any unrealized change in fair value, as determined at each measurement period, is recorded as a component of the income statement and the associated carrying amount on the balance sheet is adjusted by the change.

 

The Company values the embedded derivative using the Black-Scholes pricing model and an aggregate derivative liability of $2,368,685 was recognized by the Company. This liability was eliminated prior to the end of the Company’s second quarter as a result of the full conversion of all Notes prior to the end of the Company’s second quarter.

 

During the quarter ended June 30, 2015 the Company issued Convertible Notes ( “Notes”) with an aggregate face value of $90,000 . Consideration for these Notes consisted of $90,000.

All or part of the principal and accrued but unpaid interest is convertible at any time at the demand of the Lender into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent the lower of (1) a 65% discount to the lowest Trading Price (as defined below) for the Common Shares during the thirty (30) Trading Day (as defined below) period ending on the latest complete Trading Day prior to the conversion date. “Trading Price” means the closing bid price on the Over-the-Counter Bulletin Board, or applicable trading market (the “OTCQB”) as reported by a reliable reporting service (“Reporting Service”) designated by the Lender (i.e. Bloomberg) or, if the OTCQB is not the principal trading market for such security, the closing bid price of such security on the principal securities exchange or trading market where such security is listed or traded or, if no closing bid price of such security is available in any of the foregoing manners, the average of the closing bid prices of any market makers for such security that are listed in the “pink sheets” by the National Quotation Bureau, Inc. If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by Regen and the Lender. “Trading Day” shall mean any day on which the Common Shares are tradable for any period on the OTCQB, or on the principal securities exchange or other securities market on which the Common Shares are then being traded. “Trading Volume” shall mean the number of shares traded on such Trading Day as reported by such Reporting Service. The Conversion Price shall be equitably adjusted for stock splits, stock dividends, rights offerings, combinations, recapitalization, reclassifications, extraordinary distributions and similar events by Regen relating to the Lender’s securities.

 

 

 

Or

 

 

 

(2) $0.03 per share

 

 

 

Principal and interest may be prepaid in part or in full by Regen on not less than three Trading Days prior written notice to the Lender.

 

Upon expiration of the six month holding specified in Rule 144(d) promulgated under the Securities Act of 1933, Regen , at the request of the Lender, shale remove sale restrictions on one sixth (1/6) of the shares that resulted from conversions made through the issuance of this Note , each month, for a period of six months, with all restrictions being removed by the Company by the expiration of the six month subsequent to expiration of the aforementioned Rule 144 holding period.

 

If the Lender converts principal into Common Stock of Regen on or prior to 180 days from the issuance of the Note the Lender shall receive one share of Preferred Series “A” Stock of the Company for each share of Common Stock received through conversion.

 

During the quarter ended June 30, 2015 the Company issued 3,214,285 of its common shares in satisfaction of the abovementioned convertible notes and 3,214,285 shares of its Series A Preferred stock in accordance with the terms and conditions of abovementioned convertible notes. .

 

The Company values the embedded derivative using the Black-Scholes pricing model and an aggregate derivative liability of $350,666 was recognized by the Company in connection with $90,000 of convertible notes payable issued during the quarter ended June 30, 2015. This liability was eliminated prior to the end of the Company’s third quarter as a result of the full conversion of these convertible noted prior to the end of the Company’s third quarter.

 

 

NOTE 5. NOTES RECEIVABLE

 

		June 30, 2015				September 30, 2014
Entest Biomedical, Inc. (Note 7)		$	12,051			$	10,422
Notes Receivable		$	12,051			$	10,422

  

$12,051 lent by the Company to Entest Biomedical, Inc. is due and payable at the demand of the holder and bear simple interest at a rate of 10% per annum.

 

NOTE 6. INCOME TAXES

 

As of June 30, 2015

 

Deferred tax assets:
Net operating tax carry forwards		$	4,036,834
Other			-0-
Gross deferred tax assets			4,036,834
Valuation allowance			(4,036,834	)
Net deferred tax assets		$	-0-

 

As of June 30, 2015 the Company has a Deferred Tax Asset of $4,036,834 completely attributable to net operating loss carry forwards of approximately $11,873,041 (which expire 20 years from the date the loss was incurred).

 

Realization of deferred tax assets is dependent upon sufficient future taxable income during the period that deductible temporary differences and carry forwards are expected to be available to reduce taxable income. The achievement of required future taxable income is uncertain. As a result, the Company has the Company recorded a valuation allowance reducing all deferred tax assets to 0.

 

Income tax is calculated at the 34% Federal Corporate Rate. 

 

NOTE 7. RELATED PARTY TRANSACTIONS

 

As of June 30, 2015 the Company has received capital contributions from Bio Matrix Scientific Group, Inc (“BMSN”) , a corporation under common control with the Company and which possesses the majority of the voting power of the shares outstanding of the company, totaling $728,658 and has issued 50,010,000 common shares to BMSN for aggregate consideration of $20,090. The Company also utilizes approximately 2,300 square feet of office space at 4700 Spring Street, Suite 304, La Mesa California, 91941 subleased to the Company by Entest BioMedical, Inc. on a month to month basis beginning October 1, 2014. The Chief Executive Officer of Entest Biomedical Inc. is David R. Koos who also serves as the Chief Executive Officer of the Company’s parent and the Company. The sublease is on a month to month basis and rent payable to Entest Biomedical, Inc. by Regen Biopharma Inc is equal to $5,000 per month.

 

As of June 30, 2015 Entest Biomedical Inc. is indebted to the Company in the amount of $12,051. $12,051 lent by the Company to Entest Biomedical, Inc. is due and payable at the demand of the holder and bear simple interest at a rate of 10% per annum.

 

As of June 30, 2015 the Company is indebted to BMSN in the amount of $19,701. $19,701 lent to the Company by Bio Matrix Scientific Group, Inc. is due and payable at the demand of the holder and bear simple interest at a rate of 10% per annum.

 

As of June 30, 2015 the Company is indebted to David R. Koos in the amount of $50. $50 lent to the Company by Koos is due and payable at the demand of the holder and bear simple interest at a rate of 10% per annum.

 

NOTE 8. COMMITMENTS AND CONTINGENCIES

 

The Company utilizes approximately 2,300 square feet of office space at 4700 Spring Street, Suite 304, La Mesa California, 91941 subleased to the Company by Entest BioMedical, Inc. on a month to month basis beginning October 1, 2014. The Chief Executive Officer of Entest Biomedical Inc. is David R. Koos who also serves as the Chief Executive Officer of the Company’s parent and the Company. The sublease is on a month to month basis and rent payable to Entest Biomedical, Inc. by Regen Biopharma Inc is equal to $5,000 per month.

 

On March 20, 2015 Regen Biopharma, Inc. agreed to sublease 199 square feet of laboratory space located at 5310 Eastgate Mall, San Diego, CA 92121 from Human BioMolecular Research Institute (“Sublease Agreement”). Pursuant to the terms of the Sublease Agreement Regen Biopharma, Inc. will pay rent of $400 per month to Human BioMolecular Research Institute (“HBRI”) . The term of the sublease shall be from March 9, 2015 to September 8, 2015 (a period of 6 months) and will automatically renew thereafter for the same 6 month term unless written notice is received by HBRI within 60 days prior to renewal. On June 1, 2015 Regen Biopharma, Inc. terminated its sublease with Human BioMolecular Research Institute

 

On March 20, 2015 Regen Biopharma, Inc entered into a Research Agreement with HBRI wherein HBRI agreed to provide a variety of professional, scientific and technical services for the proper conduct of research by Regen Biopharma, Inc. and also to make available certain research equipment to Regen Biopharma, Inc. The term of the agreement shall be from March 9, 2015 to September 8, 2015 (a period of 6 months) and will automatically renew thereafter for the same 6 month term unless written notice is received by HBRI within 60 days prior to renewal. As consideration Regen Biopharma, Inc shall pay a monthly fee of $2,700 to HBRI over the term of the agreement. On June 1, 2015 Regen Biopharma, Inc. terminated the aforementioned agreement with Human BioMolecular Research Institute

 

  

NOTE 9. STOCKHOLDERS' EQUITY

 

The stockholders' equity section of the Company contains the following classes of capital stock as June 30, 2015:

 

Common stock, $ 0.0001 par value; 500,000,000 shares authorized: 113,525,096 shares issued and outstanding.

With respect to each matter submitted to a vote of stockholders of the Corporation, each holder of Common Stock shall be entitled to cast that number of votes which is equivalent to the number of shares of Common Stock owned by such holder times one (1).

On any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the holders of the Common Stock shall receive, out of assets legally available for distribution to the Company's stockholders, a ratable share in the assets of the Corporation.

Preferred Stock, $0.0001 par value, 100,000,000 shares authorized of which 600,000 is designated as Series AA Preferred Stock: 30,000 shares issued and outstanding as of June 30, 2015 and 90,000,000 is designated Series A Preferred Stock of which 60,548,364 shares are outstanding as of June 30, 2015.

The abovementioned shares authorized pursuant to the Company’s certificate of incorporation may be issued from time to time without prior approval of the shareholders. The Board of Directors of the Company shall have the full authority permitted by law to establish one or more series and the number of shares constituting each such series and to fix by resolution full or limited, multiple or fractional, or no voting rights, and such designations, preferences, qualifications, restrictions, options, conversion rights and other special or relative rights of any series of the Stock that may be desired.

 

Series AA Preferred Stock

 

On September 15, 2014 the Company filed a CERTIFICATE OF DESIGNATION (“Certificate of Designations”) with the Nevada Secretary of State setting forth the preferences rights and limitations of a newly authorized series of preferred stock designated and known as “Series AA Preferred Stock” (hereinafter referred to as “Series AA Preferred Stock”).

 

The Board of Directors of the Company have authorized 600,000 shares of the Series AA Preferred Stock, par value $0.0001. With respect to each matter submitted to a vote of stockholders of the Corporation, each holder of Series AA Preferred Stock shall be entitled to cast that number of votes which is equivalent to the number of shares of Series AA Preferred Stock owned by such holder times ten thousand (10,000). Except as otherwise required by law holders of Common Stock, other series of Preferred issued by the Corporation, and Series AA Preferred Stock shall vote as a single class on all matters submitted to the stockholders.

 

Series A Preferred Stock

 

On January 15, 2015 the Company filed a CERTIFICATE OF DESIGNATION ("Certificate of Designations") with the Nevada Secretary of State setting forth the preferences rights and limitations of a newly authorized series of preferred stock designated and known as "Series A Preferred Stock" (hereinafter referred to as "Series A Preferred Stock").

The Board of Directors of the Company have authorized 90,000,000 shares of the Series A Preferred Stock, par value $0.0001. With respect to each matter submitted to a vote of stockholders of the Corporation, each holder of Series A Preferred Stock shall be entitled to cast that number of votes which is equivalent to the number of shares of Series A Preferred Stock owned by such holder times one . Except as otherwise required by law holders of Common Stock, other series of Preferred issued by the Corporation, and Series A Preferred Stock shall vote as a single class on all matters submitted to the stockholders.

Holders of the Series A Preferred Stock will be entitled to receive, when, as and if declared by the board of directors of the Company (the “Board”) out of funds legally available therefore, non-cumulative cash dividends of $0.01 per quarter. In the event any dividends are declared or paid or any other distribution is made on or with respect to the Common Stock , the holders of Series A Preferred Stock as of the record date established by the Board for such dividend or distribution on the

Common Stock shall be entitled to receive, as additional dividends (the “Additional Dividends”) an amount (whether in the form of cash, securities or other property) equal to the amount (and in the form) of the dividends or distribution that such holder would have received had each share of the Series A Preferred Stock been one share of the Common Stock, such Additional Dividends to be payable on the same payment date as the payment date for the Common Stock.

Upon any liquidation, dissolution, or winding up of the Company, whether voluntary or involuntary (collectively, a “Liquidation”), before any distribution or payment shall be made to any of the holders of Common Stock or any other series of preferred stock, the holders of Series A Preferred Stock shall be entitled to receive out of the assets of the Company, whether such assets are capital, surplus or earnings, an amount equal to $0.01 per share of Series A Preferred (the “Liquidation Amount”) plus all declared and unpaid dividends thereon, for each share of Series A Preferred held by them.

If, upon any Liquidation, the assets of the Company shall be insufficient to pay the Liquidation Amount, together with declared and unpaid dividends thereon, in full to all holders of Series A Preferred, then the entire net assets of the Company shall be distributed among the holders of the Series A Preferred, ratably in proportion to the full amounts to which they would otherwise be respectively entitled and such distributions may be made in cash or in property taken at its fair value (as determined in good faith by the Board), or both, at the election of the Board.

 

NOTE 10. STOCK TRANSACTIONS

 

Common Stock

 

On April 14, 2015 the Company issued 1,428, 571 of its common shares in satisfaction of $40,000 of convertible indebtedness.

On May 12, 2015 the Company issued 500,000 of its common shares in satisfaction of $15,000 of indebtedness.

On May 18, 2015 the Company issued 500,000 of its common shares in satisfaction of $15,000 of indebtedness.

On May 19, 2015 the Company issued 1,785,714 of its common shares in satisfaction of $50,000 of convertible indebtedness.

 

Series A Preferred Stock

 

On April 14, 2015 the Company issued 1,428, 571 of its shares of Series A Preferred Stock in accordance with the terms and conditions of a $40,000 face value convertible note issued by the Company.

 

On May 19, 2015 the Company issued 200,000 of its shares of Series A Preferred Stock as consideration for services rendered by nonemployees.

 

On May 19, 2015 the Company issued 1,785,714 of its shares of Series A Preferred Stock in accordance with the terms and conditions of a $50,000 face value convertible note issued by the Company.

 

 

NOTE 11. SUBSEQUENT EVENTS

 

On July 1, 2015 the Company issued 412,242 of its shares of common stock as consideration for services rendered by a nonemployee.

 

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

 

CERTAIN FORWARD-LOOKING INFORMATION

 

Information provided in this Quarterly report on Form 10Q may contain forward-looking statements within the meaning of Section 21E or Securities Exchange Act of 1934 that are not historical facts and information. These statements represent the Company's expectations or beliefs, including, but not limited to, statements concerning future and operating results, statements concerning industry performance, the Company's operations, economic performance, financial conditions, margins and growth in sales of the Company's products, capital expenditures, financing needs, as well assumptions related to the forgoing. For this purpose, any statements contained in this Quarterly Report that are not statement of historical fact may be deemed to be forward-looking statements. These forward-looking statements are based on current expectations and involve various risks and uncertainties that could cause actual results and outcomes for future periods to differ materially from any forward-looking statement or views expressed herein. The Company's financial performance and the forward-looking statements contained herein are further qualified by other risks including those set forth from time to time in the documents filed by the Company with the Securities and Exchange Commission. All references to” We”, “Us”, “Company” or the “Company” refer to Regen BioPharma, Inc.

 

Material Changes in Financial Condition

 

As of June 30, 2015, we had Cash on Hand of $ 208,582 and as of September 30, 2014 we had Cash on Hand of $0.

 

The increase in Cash on Hand of 100 % is primarily attributable to :

 

(a)

$25, 650 lent to the Company by David Koos, the Company’s Chief Executive Officer, during the six months ended March 31, 2015

 

(b)

$164, 000 lent to the Company by Bio Technology Partners Business Trust during the six months ended March 31, 2015

 

(c)

$775,000 paid to the Company as a result of issuance of convertible notes during the six months ended March 31, 2015 (d) $90,000 paid to the Company as a result of issuance of convertible notes during the three months ended June 30, 2015

Offset by $60,425 of debt repaid to the Company’s parent, Bio Matrix Scientific Group, Inc. and funds expended in the operation of the Company’s business during the six months ended March 31, 2015.

 

As of June 30, 2015 we had Prepaid Expenses of $6,289 and as of September 30, 2014 we had Prepaid Expenses of $0.

 

The increase in Prepaid Expenses is attributable to:

 

$5,000 in salary prepaid to the company’s Chief Scientific Officer

$1,289 prepaid to an employee of the Company

 

 

As of June 30, 2015, we had Notes Receivable of $ 12,051 and as of September 30, 2014 we had Notes Receivable of $10,422 .

 

The increase in Notes Receivable of approximately 16 % is attributable to overpayment of $1,629 of rental charges to Entest Biomedical, Inc. by the Company which the parties have agreed shall be due and payable to the Company by Entest Biomedical, Inc and which shall bear simple interest at 10% per annum.

 

As of June 30, 2015 we had Accrued Interest Receivable of $1,081 and as of September 30, 2014 we had Accrued Interest Receivable of $233.

 

The increase in of Accrued Interest Receivable of approximately 364% is attributable to interest accrued but unpaid during the nine months ended June 30 , 2015 resulting from amounts due to the Company by Entest Bio-Medical, Inc.

 

As of June 30, 2015 we had Bank Overdraft of $0 and as of September 30, 2014 we had Bank Overdraft of $6,137.

 

The decrease in Bank Overdraft of 100% is attributable to loans made to the Company during the quarter ended December 31, 2014.

 

As of June 30, 2015 we had Accounts Payable of $1,190 and as of September 30, 2014 we had Accounts payable of $3,305.

 

The decrease in Accounts Payable of approximately 64% is primarily attributable to the payment of outstanding obligations of the Company in the course of business.

 

As of June 30,2015 we had Notes Payable of $103,751 and as of September 30, 2014 we had Notes Payable of $120,169.

 

The increase in Notes Payable of approximately 14% is attributable to:

(a)

$25, 650 lent to the Company by the Company’s Chief Executive Officer during the six months ended March 31, 2015

 

(b)

$164,000 lent to the Company by a third party lender during the quarter ended December 31, 2014.

 

(c)

$8,500 of company expenses paid by Bio Matrix Scientific Group, Inc. on the Company’s behalf during the quarter ended December 31, 2014.

Offset by:

(a)

$48,051 of principal debt repaid in cash to Bio Matrix Scientific Group, Inc. during the six months ended March 31, 2015

 

(a)

$6,000 of principal debt owed to Bio Matrix Scientific Group, Inc satisfied through the issuance of the Company’s Series AA Preferred stock

 

(c)

$105,768 of principal indebtedness satisfied through the issuance of convertible notes to the creditors.

 (d) $30,000 of principal indebtedness satisfied through the issuance of common shares.

 

As of June 30, 2105 we had Accrued Payroll Taxes of $6,692 and as of September 30, 2014 we had Accrued Payroll Taxes of $8,463.

 

The decrease in Accrued Payroll Taxes of approximately 20% is attributable to payment by the Company of employer tax obligations incurred in prior periods.

 

As of June 30, 2105 we had Accrued Interest of $18,147 and as of September 30, 2014 we had Accrued Interest of $2,212.

 

The increase in Accrued Interest of approximately 720% is attributable to interest expense on Notes Payable and Convertible Notes Payable incurred during the six months ended March 31 , 2015 but not yet paid offset by $1,918 of accrued interest owed to the company’s Chief Executive Officer satisfied by the issuance of a convertible note to the Officer as well as $890 of accrued interest on convertible notes satisfied through the issuance of common stock.

 

As of June 30, 2105 we had Accrued Rent of $5,000 and as of September 30, 2014 we had Accrued Rent of $0.

 

The increase in Accrued Rent is attributable to rental expense incurred but not paid for the month of June 2015.

 

As of June 30, 2015 we had Accrued Salaries of $10,501 and as of September 30, 2014 we had Accrued Salaries of $0.

 

The increase is attributable to $6,750 of salary accrued during the quarter ended March 31, 2015 but not yet paid due to the Company’s Chief Financial Officer and $3,751 of salary accrued during the nine months ended June 30, 2015 but not yet paid due to an employee.

 

Material Changes in Results of Operations

Revenues from operations were $0 for the three months ended June 30, 2015 and -0- for the three months ended June 30 , 2014. Net Losses were $1,562,371 for the three months ended June 30, 2015 and $166,021 for the same period ended 2014. 

The increase in Net Losses of approximately 841% is primarily attributable to the recognition of $937,425 of expenses recognized during the quarter ended June 30, 2015 resulting from the issuance for less than fair value of common shares in satisfactions of principal indebtedness, the recognition of $16,000 of rental expenses during the quarter ended June 30, 2015, the recognition of $3,512 of interest expense during the quarter ended June 30, 2015, as well as an increase in expenses related to General and Administrative, Research and Development, and consulting and professional Fees incurred during the quarter ended June 30, 2015 as compared to the same quarter ended 2014.

 

Revenues from operations were $0 for the nine months ended June 30, 2015 and -0- for the nine months ended June 30, 2014. Net Losses were $10,594,463 for the nine months ended June 30, 2015 and $561,471 for the same period ended 2014.

The increase in Net Losses of approximately 1785% is primarily attributable to the recognition of $9,116,857 of expenses recognized during the six months ended June 30, 2015 resulting from the issuance for less than fair value of common shares in satisfactions of indebtedness.

 

Liquidity and Capital Resources

 

As of June 30, 2015 we had $208,582 cash on hand and current liabilities of $145,281 such liabilities consisting of Accounts Payable, Notes Payable and Accrued Expenses. We feel we will not be able to satisfy our cash requirements over the next twelve months and shall be required to seek additional financing.

 

The Company plans to meet cash needs through applying for governmental and non-governmental grants as well as selling its securities for cash. Management has yet to decide what type of offering the Company will use or how much capital the

Company will raise. There is no guarantee that the Company will be able to raise any capital through any type of offerings. Management can give no assurance that any governmental or non-governmental grant will be obtained by the Company despite the Company’s best efforts. As of February 19, 2014 The Company has identified the National Heart Lung and Blood Institute Clinical Trial Pilot Studies (R34) grant which provides up to $450,000 in funding over a period of three years as well as the Omnibus Solicitation of the NIH for Small Business Technology Transfer Grant Applications administered by the Small Business Innovation Research (SBIR) program of the National Institute of Health as grants for which the Company intends to apply.

 

We cannot assure that we will be successful in obtaining additional financing necessary to implement our business plan. We have not received any commitment or expression of interest from any financing source that has given us any assurance that we will obtain the amount of additional financing in the future that we currently anticipate. For these and other reasons, we are not able to assure that we will obtain any additional financing or, if we are successful, that we can obtain any such financing on terms that may be reasonable in light of our current circumstances. Management plans to raise additional funds by offering securities for cash. Management has yet to decide what type of offering the Company will use or how much capital the Company will raise. During the nine months ended June 30, 2015 the Company raised $865,000 through the issuance of convertible debt. All principal convertible debt issued by the Company has been converted into equity as of June 30, 2015.

 

As of June 30, 2015 the Company was not party to any binding agreements which would commit Regen to any material capital expenditures.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

As a smaller reporting company, as defined by Rule 229.10(f) (1) of Regulation S-K, we are not required to provide the information required by this Item. We have chosen to disclose, however, that we have not engaged in any transactions, issued or bought any financial instruments or entered into any contracts that are required to be disclosed in response to this item.

 

Item 4. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of David Koos, who is the Company's Principal Executive Officer and Todd S. Caven who is the Company’s Chief Financial Officer and Principal Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures. The Company's disclosure controls and procedures are designed to provide a reasonable level of assurance of achieving the Company's disclosure control objectives. The Company's Principal Executive Officer and Principal Financial Officer have concluded that the Company's disclosure controls and procedures are, in fact, effective at this reasonable assurance level as of the period covered.

 

Changes in Internal Controls over Financial Reporting

 

In connection with the evaluation of the Company's internal controls during the period commencing on April 1, 2015 and ending on June 30, 2015, David Koos and Todd S. Caven , who serve as the Company's Principal Executive Officer and Principal Financial Officer respectively, have determined that there were no changes to the Company's internal controls over financial reporting that have been materially affected, or is reasonably likely to materially effect, the Company's internal controls over financial reporting.

 

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

 

There are no material pending legal proceedings to which the Company is a party or of which any of the Company’s property is the subject.

 

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

CONVERTIBLE NOTES

 

On April 6, 2015 Regen issued a $40,000 face value Convertible Promissory Note ( “Note”) to joint individual investors (“Lender”) for consideration of $40,000. The Note becomes due and payable at the demand of the Lender at any time after March 6, 2016 and bears simple interest at 10% per annum payable quarterly at the demand of the Lender.

 

All or part of the principal and accrued but unpaid interest is convertible at any time at the demand of the Lender into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent the lower of (1) a 65% discount to the lowest Trading Price (as defined below) for the Common Shares during the thirty (30) Trading Day (as defined below) period ending on the latest complete Trading Day prior to the conversion date. “Trading Price” means the closing bid price on the Over-the-Counter Bulletin Board, or applicable trading market (the “OTCQB”) as reported by a reliable reporting service (“Reporting Service”) designated by the Lender (i.e. Bloomberg) or, if the OTCQB is not the principal trading market for such security, the closing bid price of such security on the principal securities exchange or trading market where such security is listed or traded or, if no closing bid price of such security is available in any of the foregoing manners, the average of the closing bid prices of any market makers for such security that are listed in the “pink sheets” by the National Quotation Bureau, Inc. If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by Regen and the Lender. “Trading Day” shall mean any day on which the Common Shares are tradable for any period on the OTCQB, or on the principal securities exchange or other securities market on which the Common Shares are then being traded. “Trading Volume” shall mean the number of shares traded on such Trading Day as reported by such Reporting Service. The Conversion Price shall be equitably adjusted for stock splits, stock dividends, rights offerings, combinations, recapitalization, reclassifications, extraordinary distributions and similar events by Regen relating to the Lender’s securities.

 

Or

 

(2) $0.03 per share

 

Principal and interest may be prepaid in part or in full by Regen on not less than three Trading Days prior written notice to the Lender.

 

Upon expiration of the six month holding specified in Rule 144(d) promulgated under the Securities Act of 1933, Regen , at the request of the Lender, shale remove sale restrictions on one sixth (1/6) of the shares that resulted from conversions made through the issuance of this Note , each month, for a period of six months, with all restrictions being removed by the Company by the expiration of the six month subsequent to expiration of the aforementioned Rule 144 holding period.

 

If the Lender converts principal into Common Stock of Regen on or prior to 180 days from the issuance of the Note the Lender shall receive one share of Preferred Series “A” Stock of the Company for each share of Common Stock received through conversion.

 

The Note was issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended (the “Act”). No underwriters were retained to serve as placement agents for the sale. The Note was sold directly through our management. No commission or other consideration was paid in connection with the sale of the Note. There was no advertisement or general solicitation made in connection with this Offer and Sale of the Note. A legend was placed on the Note stating that the Note has not been registered under the Act and setting forth or referring to the restrictions on transferability and sale of the Note. Cash proceeds received from the Note will be utilized by Regen for general corporate purposes. On April 14, 2015 1,428,571 Common Shares of Regen were issued in satisfaction of the abovementioned convertible note. On April 14, 2015 the Company issued 1,428,571 shares of its Series A Preferred Stock in accordance with the terms and conditions of abovementioned convertible note

On May 18, 2015 Regen issued a $50,000 face value Convertible Promissory Note ( “Note”) to an individual investor (“Lender”) for consideration of $50,000. The Note becomes due and payable at the demand of the Lender at any time after May 7, 2016 and bears simple interest at 10% per annum payable quarterly at the demand of the Lender.

 

All or part of the principal and accrued but unpaid interest is convertible at any time at the demand of the Lender into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent the lower of (1) a 65% discount to the lowest Trading Price (as defined below) for the Common Shares during the thirty (30) Trading Day (as defined below) period ending on the latest complete Trading Day prior to the conversion date. “Trading Price” means the closing bid price on the Over-the-Counter Bulletin Board, or applicable trading market (the “OTCQB”) as reported by a reliable reporting service (“Reporting Service”) designated by the Lender (i.e. Bloomberg) or, if the OTCQB is not the principal trading market for such security, the closing bid price of such security on the principal securities exchange or trading market where such security is listed or traded or, if no closing bid price of such security is available in any of the foregoing manners, the average of the closing bid prices of any market makers for such security that are listed in the “pink sheets” by the National Quotation Bureau, Inc. If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by Regen and the Lender. “Trading Day” shall mean any day on which the Common Shares are tradable for any period on the OTCQB, or on the principal securities exchange or other securities market on which the Common Shares are then being traded. “Trading Volume” shall mean the number of shares traded on such Trading Day as reported by such Reporting Service. The Conversion Price shall be equitably adjusted for stock splits, stock dividends, rights offerings, combinations, recapitalization, reclassifications, extraordinary distributions and similar events by Regen relating to the Lender’s securities.

 

Or

 

(2) $0.03 per share

 

Principal and interest may be prepaid in part or in full by Regen on not less than three Trading Days prior written notice to the Lender.

 

Upon expiration of the six month holding specified in Rule 144(d) promulgated under the Securities Act of 1933, Regen , at the request of the Lender, shale remove sale restrictions on one sixth (1/6) of the shares that resulted from conversions made through the issuance of this Note , each month, for a period of six months, with all restrictions being removed by the Company by the expiration of the six month subsequent to expiration of the aforementioned Rule 144 holding period.

 

If the Lender converts principal into Common Stock of Regen on or prior to 180 days from the issuance of the Note the Lender shall receive one share of Preferred Series “A” Stock of the Company for each share of Common Stock received through conversion.

 

The Note was issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended (the “Act”). No underwriters were retained to serve as placement agents for the sale. The Note was sold directly through our management. No commission or other consideration was paid in connection with the sale of the Note. There was no advertisement or general solicitation made in connection with this Offer and Sale of the Note. A legend was placed on the Note stating that the Note has not been registered under the Act and setting forth or referring to the restrictions on transferability and sale of the Note. Cash proceeds received from the Note will be utilized by Regen for general corporate purposes. On May 19, 2015 1,785,714 Common Shares of Regen were issued in satisfaction of the abovementioned convertible note. On May 19, 2015 the Company issued 1,785,714 shares of its Series A Preferred Stock in accordance with the terms and conditions of abovementioned convertible note

 

COMMON SHARES

On April 14, 2015 the Company issued 1,428, 571 of its common shares (“Shares”) in satisfaction of $40,000 of convertible indebtedness.

 

The Shares were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended (the “Act”). No underwriters were retained to serve as placement agents for the sale. The shares were sold directly through our management. No commission or other consideration was paid in connection with the sale of the shares. There was no advertisement or general solicitation made in connection with this Offer and Sale of Shares. A legend was placed on the certificate that evidences the Shares stating that the Shares have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale of the Shares.

 

On May 12, 2015 the Company issued 500,000 of its common shares (“Shares”) in satisfaction of $15,000 of indebtedness.

 

The Shares were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended (the “Act”). No underwriters were retained to serve as placement agents for the sale. The shares were sold directly through our management. No commission or other consideration was paid in connection with the sale of the shares. There was no advertisement or general solicitation made in connection with this Offer and Sale of Shares.

 

On May 18, 2015 the Company issued 500,000 of its common shares (“Shares”) in satisfaction of $15,000 of indebtedness.

 

The Shares were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended (the “Act”). No underwriters were retained to serve as placement agents for the sale. The shares were sold directly through our management. No commission or other consideration was paid in connection with the sale of the shares. There was no advertisement or general solicitation made in connection with this Offer and Sale of Shares.

 

On May 19, 2015 the Company issued 1,785,714 of its common shares (“Shares”) in satisfaction of $50,000 of convertible indebtedness.

The Shares were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended (the “Act”). No underwriters were retained to serve as placement agents for the sale. The shares were sold directly through our management. No commission or other consideration was paid in connection with the sale of the shares. There was no advertisement or general solicitation made in connection with this Offer and Sale of Shares. A legend was placed on the certificate that evidences the Shares stating that the Shares have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale of the Shares.

 

 

On July 1, 2015 the company issued 206,121 common shares ( “Shares”) to a consultant for services.

 

The Shares were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended (the “Act”). No underwriters were retained to serve as placement agents for the sale. The shares were sold directly through our management. No commission or other consideration was paid in connection with the sale of the shares. There was no advertisement or general solicitation made in connection with this Offer and Sale of Shares. A legend was placed on the certificate that evidences the Shares stating that the Shares have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale of the Shares.

 

Series A Preferred Stock:

 

On April 14, 2015 the Company issued 1,428, 571 of its shares of Series A Preferred Stock (“Shares”) in accordance with the terms and conditions of a $40,000 face value convertible note issued by the Company.

 

The Shares were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended (the “Act”). No underwriters were retained to serve as placement agents for the sale. The shares were sold directly through our management. No commission or other consideration was paid in connection with the sale of the shares. There was no advertisement or general solicitation made in connection with this Offer and Sale of Shares. A legend was placed on the certificate that evidences the Shares stating that the Shares have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale of the Shares.

 

 

On May 19, 2015 the Company issued 200,000 of its shares of Series A Preferred Stock (“Shares”) as consideration for services rendered by nonemployees.

 

The Shares were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended (the “Act”). No underwriters were retained to serve as placement agents for the sale. The shares were sold directly through our management. No commission or other consideration was paid in connection with the sale of the shares. There was no advertisement or general solicitation made in connection with this Offer and Sale of Shares. A legend was placed on the certificate that evidences the Shares stating that the Shares have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale of the Shares.

 

 

On May 19, 2015 the Company issued 1,785,714 of its shares of Series A Preferred Stock (“Shares”) in accordance with the terms and conditions of a $50,000 face value convertible note issued by the Company.

 

The Shares were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended (the “Act”). No underwriters were retained to serve as placement agents for the sale. The shares were sold directly through our management. No commission or other consideration was paid in connection with the sale of the shares. There was no advertisement or general solicitation made in connection with this Offer and Sale of Shares. A legend was placed on the certificate that evidences the Shares stating that the Shares have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale of the Shares.

 

Item 3. DEFAULTS UPON SENIOR SECURITIES

 

None.

  

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

 

None.

 

Item 5. OTHER INFORMATION

 

None

 

Item 6. EXHIBITS

31.1 Certification of Chief Executive Officer

31.2 Certification of Acting Chief Financial Officer

32.1 Certification of Chief Executive Officer under Section 906 of the Sarbanes-Oxley Act of 2002.

32.2 Certification of Acting Chief Financial Officer under Section 906 of the Sarbanes-Oxley Act of 2002.

10.1 Form of Convertible Note

10.2 AGREEMENT BY AND BETWEEN REGEN BIOPHARMA, INC. AND ZANDER THERAPEUTICS, INC. (a)

10.3 AGREEMENT BY AND BETWEEN REGEN BIOPHARMA, INC. AND SANTOSH KESARI (b)

 

 

(a)

Incorporated by reference to Exhibit 10.1 of that Form 8-K filed by the Company dated June 25, 2015

(b)

Incorporated by reference to Exhibit 10.1 of that Form 8-K filed by the Company dated June 10, 2015

SIGNATURE

 

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

 

	Regen Biopharma, Inc.
Dated: July 28, 2015	By: /s/ David Koos
	David Koos
	Chief Executive Officer

 

Dated: July 28, 2015	By: /s/ Todd S. Caven
	Todd S. Caven
	Chief Financial Officer