U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

   FORM 10-Q/A

Amendment No. 2

 

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

 

  For the quarterly period ended December 31, 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 January 25, 2016 there were 124,287,272 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 ☒

 

 

 

 EXPLANATORY NOTE:

THIS AMENDMENT NO.2 TO REGEN BIOPHARMA, INC’S (THE “COMPANY”) FORM 10-Q FOR THE PERIOD ENDED DECEMBER 31, 2015 (“(“ORIGINAL FILING”) IS BEING FILED SOLELY TO AMEND THE FOLLOWING PORTIONS OF AMENDMENT NO.1 OF THE ORIGINAL FILING (“AMENDMENT NO.1”).  

 

PART 1, ITEM 4

 

THE COMPANY HAS NOT MODIFIED OR UPDATED DISCLOSURES PRESENTED IN AMENDMENT NO.1 OR THE ORIGINAL FILING, EXCEPT AS INDICATED ABOVE. ACCORDINGLY, THIS AMENDMENT DOES NOT REFLECT EVENTS OCCURRING AFTER THE DATE OF THE ORIGINAL FILING AND DOES NOT MODIFY OR UPDATE THOSE DISCLOSURES AFFECTED BY SUBSEQUENT EVENTS, EXCEPT AS SPECIFICALLY REFERENCED HEREIN. INFORMATION NOT AFFECTED BY THE ABOVE AMENDMENTS IS UNCHANGED AND REFLECTS THE DISCLOSURES MADE AT THE TIME OF THE ORIGINAL FILING.    

 

 

 

PART I - FINANCIAL INFORMATION

Item 1. - Financial Statements

 

REGEN BIOPHARMA , INC.
BALANCE SHEET
		As of December 31, 2015 (restated)				As of September 30, 2015 (restated)
ASSETS
CURRENT ASSETS
Cash			168,517				38,620
Note Receivable			12,051				12,051
Prepaid Expenses			1,000				10,000
Accrued Interest Receivable			1,681				1,381
Due from Former Employees			15,000
Total Current Assets			198,249				62,052
OTHER ASSETS
Available for Sale Securities			120,000				158,400
Total Other Assets			120,000				158,400
TOTAL ASSETS			318,249				220,452
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Bank Overdraft			0				0
Accounts payable			27,646				25,854
Notes Payable			168,050				222,751
Accrued payroll taxes			5,771				1,940
Accrued Interest			26,095				21,093
Accrued Rent			10,000				10,000
Accrued Payroll			52,663				36,001
Due to Shareholder			50,000
Total Current Liabilities			340,225				317,639
Total Liabilities			340,225				317,639
STOCKHOLDERS' EQUITY (DEFICIT)
Common Stock ($.0001 par value) 500,000,000 shares authorized; 114,753,938 issued and outstanding as of September 30, 2015 and 124,287,272 shares issued and outstanding December 31, 2015			12,427				11,474
Preferred Stock, 0.0001 par value, 800,000,000 authorized and 100,000,000 authorized as of December 31, 2015 and September 30, 2015 respectively
Series A Preferred 90,000,000 Authorized and 300,000,000 authorized, 60,981,697 and 80,248,364 outstanding as of  September  30, 2105 and December 31, 2015 respectively			8,025				6,098
Series AA Preferred $0.0001 par value 600,000 authorized and 30,000 outstanding as of September  30, 2015 and December 31, 2015			3				3
Additional Paid in capital			3,484,356				2,679,473
Contributed Capital			728,658				728,658
Retained Earnings (Deficit) accumulated during the development stage			(4,183,446	)			(3,489,293	)
Accumulated Other Comprehensive Income			(72,000	)			(33,600	)
Total Stockholders' Equity (Deficit)			(21,976	)			(97,187	)
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)			318,249				220,452
The Accompanying Notes are an Integral Part of These Financial Statements

 

 

 

REGEN BIOPHARMA , INC.
STATEMENT OF OPERATIONS
(unaudited)
			Quarter Ended December 31, 2015 (restated)				Quarter Ended December 31, 2014
REVENUES			0				0
COST AND EXPENSES
Research and Development			105,323				2,237
General and Administrative			488,596				139,453
Consulting and Professional Fees			80,533				59,848
Rent			15,000				11,871
Total Costs and Expenses			689,452				213,409
OPERATING LOSS			(689,452	)			(213,409	)
OTHER INCOME & (EXPENSES)
Interest Income			300				260
Refunds of amounts previously paid
Interest Expense			(5,001	)			(6,042	)
TOTAL OTHER INCOME (EXPENSE)			(4,701	)			(5,782	)
NET INCOME (LOSS)			(694,153	)			(219,191	)
BASIC AND FULLY DILUTED
EARNINGS (LOSS) PER SHARE			(0.0059	)			(0.0042	)
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING			118,216,582				52,000,576
The Accompanying Notes are an Integral Part of These Financial Statements

 

 

 

 

REGEN BIOPHARMA, INC.
STATEMENT OF COMPREHENSIVE INCOME
(unaudited)
		Quarter  Ended December 31
		2015				2014
		(restated)
Net Income (Loss)		$	(694,153	)		$	(219,191	)
Add:
Unrealized Gains on Securities			0				0
Less:
Unrealized Losses on Securities			(38,400	)			0
Total Other Comprehensive Income (Loss)			(38,400	)			0
Comprehensive Income		$	(732,553	)		$	(219,191	)

 

 

 

REGEN BIOPHARMA , INC.
STATEMENT OF CASH FLOWS
(unaudited)
		Three Months Ended December 31, 2015 (Restated)				Three Months Ended December 31, 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (loss)		$	(694,153	)		$	(219,191	)
Adjustments to reconcile net Income to net cash
Common Stock issued to Consultants						$	22,440
Preferred Stock issued to Consultants		$	40
Changes in operating assets and liabilities:
Increase (Decrease) in Accounts Payable		$	1,792			$	196
(Increase) Decrease in Notes Receivable		$	—
(Increase) Decrease in Interest  Receivable		$	(300	)		$	(260	)
Increase ( Decrease) in Bank Overdraft						$	(6,137	)
Increase (Decrease) in accrued Expenses		$	25,495			$	5,849
(Increase) Decrease in Prepaid Expenses		$	9,000
(Increase) Decrease in Due from Former Employee		$	(15,000	)
Increase in Additional Paid in Capital		$	247,723
Net Cash Provided by (Used in) Operating Activities		$	(425,403	)		$	(197,103	)
CASH FLOWS FROM FINANCING ACTIVITIES
Common Stock issued for Cash			321,667
Preferred Stock issued for Cash			238,334
Increase in Contributed Capital							65,000
Increase ( Decrease)  in Notes Payable			(54,701	)			185,725
Increase in Convertible Notes payable
Increase in Due to Shareholder			50,000
Net Cash Provided by (Used in) Financing Activities			555,300				250,725
Net Increase (Decrease) in Cash		$	129,897.48			$	53,622
Cash at Beginning of Period			38,620				0
Cash at End of Period		$	168,517			$	53,622
The Accompanying Notes are an Integral Part of These Financial Statements

 

 

 

 REGEN BIOPHARMA, INC.

Notes to Financial Statements

As of December 31, 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, 2015. 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 controlled subsidiary of Bio-Matrix Scientific Group, Inc, (“BMSN”) 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 December 31, 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 December 31, 2015 and $0 for the three months ended December 31, 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 August 2014, FASB issued Accounting Standards Update (ASU) No. 2014-15 Preparation of Financial Statements – Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern. Under generally accepted accounting principles (GAAP), continuation of a reporting entity as a going concern is presumed as the basis for preparing financial statements unless and until the entity's liquidation becomes imminent. Preparation of financial statements under this presumption is commonly referred to as the going concern basis of accounting. If and when an entity's liquidation becomes imminent, financial statements should be prepared under the liquidation basis of accounting in accordance with Subtopic 205-30, Presentation of Financial Statements—Liquidation Basis of Accounting. Even when an entity's liquidation is not imminent, there may be conditions or events that raise substantial doubt about the entity's ability to continue as a going concern. In those situations, financial statements should continue to be prepared under the going concern basis of accounting, but the amendments in this Update should be followed to determine whether to disclose information about the relevant conditions and events. The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company will evaluate the going concern considerations in this ASU, however, at the current period, management does not believe that it has met the conditions which would subject these financial statements for additional disclosure.

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

 

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

 

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

 

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

 

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

 

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

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

 

NOTE 3. 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 $ 4,183,446 during the period from April 24, 2012 (inception) through December 31, 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 December 31, 2015 the Company raised $560,000 through the issuance of equity securities for cash.

 

 

 

NOTE 4. NOTES PAYABLE

 

		December 31, 2015
David Koos ( Notes7)			50
Bio Technology Partners Business Trust			49,000
Bostonia Partners			119,000
Notes payable		$	168,050

  

$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.

 

$49,000 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.

 

$60,000 lent to the Company by Bostonia Partners is due and payable September 16, 2016 and bear simple interest at a rate of 10% per annum

 

$59,000 lent to the Company by Bostonia Partners is due and payable September 22, 2016 and bear simple interest at a rate of 10% per annum.

 

NOTE 5. NOTES RECEIVABLE

 

		December 31, 2015
Entest Biomedical, Inc. (Note 7)		$	12,051
Notes Receivable		$	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.

 

NOTE 6. INCOME TAXES

 

As of December 31, 2015

 

Deferred tax assets:
Net operating tax carry forwards		$	1,422,371
Other			-0-
Gross deferred tax assets			1,422,371
Valuation allowance			(1,422,371	)
Net deferred tax assets		$	-0-

 

As of December 31, 2015 the Company has a Deferred Tax Asset of $1,422,371 completely attributable to net operating loss carry forwards of approximately $4,183,446 (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 December 31, 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 December 31, 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 September 30, 2015 the Company was indebted to BMSN in the amount of $19,701. $19,701 lent to the Company by Bio Matrix Scientific Group, Inc. was due and payable at the demand of the holder and bear simple interest at a rate of 10% per annum. During the quarter ended December 31, 2015 the Company repaid $19,701 of principal indebtedness due and payable to BMSN. David R. Koos, the Chairman and Chief Executive Officer of the Company, also serves as Chairman and Chief Executive Officer of BMSN. Primarily resulting from BMSN’s ownership of 30,000 shares of the Company’s Series AA Preferred Stock, BMSN possesses the majority of the shareholder voting power .

As of December 31, 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.

 

On June 23, 2015 the Company entered into an agreement (“Agreement”) with Zander Therapeutics, Inc. ( “Zander”) whereby The Company granted to Zander an exclusive worldwide right and license for the development and commercialization of certain intellectual property controlled by The Company (“ License IP”) for non-human veterinary therapeutic use for a term of fifteen years. Zander is a wholly owned subsidiary of Entest Biomedical, Inc.

 

Pursuant to the Agreement, Zander shall pay to The Company one-time, non-refundable, upfront payment of one hundred thousand US dollars ($100,000) as a license initiation fee which must be paid within 90 days of June 23, 2015 and an annual non-refundable payment of one hundred thousand US dollars ($100,000) on the first anniversary of the effective date of the Agreement and each subsequent anniversary.

 

The abovementioned payments may be made, at Zander’s discretion, in cash or newly issued common stock of Zander or in common stock of Entest BioMedical Inc. valued as of the lowest closing price on the principal exchange upon which said common stock trades publicly within the 14 trading days prior to issuance.

 

Pursuant to the Agreement, Zander shall pay to The Company royalties equal to four percent (4%) of the Net Sales , as such term is defined in the Agreement, of any Licensed Products, as such term is defined in the Agreement, in a Quarter.

 

Pursuant to the Agreement, Zander will pay The Company ten percent (10%) of all consideration (in the case of in-kind consideration, at fair market value as monetary consideration) received by Zander from sublicensees ( excluding royalties from sublicensees based on Net Sales of any Licensed Products for which The Company receives payment pursuant to the terms and conditions of the Agreement).

 

Zander is obligated pay to The Company minimum annual royalties of ten thousand US dollars ($10,000) payable per year on each anniversary of the Effective Date of this Agreement, commencing on the second anniversary of June 23, 2015. This minimum annual royalty is only payable to the extent that royalty payments made during the preceding 12-month period do not exceed ten thousand US dollars ($10,000).

 

The Agreement may be terminated by The Company:

 

If Zander has not sold any Licensed Product by ten years of the effective date of the Agreement or Zander has not sold any Licensed Product for any twelve (12) month period after Zander’s first commercial sale of a Licensed Product.

 

The Agreement may be terminated by Zander with regard to any of the License IP if by five years from the date of execution of the Agreement a patent has not been granted by the United States patent and Trademark Office to The Company with regard to that License IP.

 

The Agreement may be terminated by Zander with regard to any of the License IP if a patent that has been granted by the United States patent and Trademark Office to The Company with regard to that License IP is terminated.

 

The Agreement may be terminated by either party in the event of a material breach by the other party.

 

On September 28, 2015 Zander caused to be issued to the Company 8,000,000 of the common shares of Entest Biomedical, Inc in satisfaction of one hundred thousand US dollars ($100,000) to be paid to the Company by Zander as a license initiation fee.

David R. Koos serves as sole officer and director of both Zander and Entest Biomedical, Inc. and also serves as Chairman and Chief Executive Officer of The Company.

 

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.

 

 

   

NOTE 9. STOCKHOLDERS' EQUITY

 

The stockholders' equity section of the Company contains the following classes of capital stock as December 31, 2015:

 

Common stock, $ 0.0001 par value; 500,000,000 shares authorized: 124,287,272 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, 800,000,000 shares authorized of which 600,000 is designated as Series AA Preferred Stock: 30,000 shares issued and outstanding as of December 31, 2015 and 300,000,000 is designated Series A Preferred Stock of which 80,248,364 shares are outstanding as of December 31, 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 300,000,000 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 October 28, 2015 the Company issued 3,333,334 of its Common Shares for cash consideration of $166,667.

 

On November 20, 2015 the Company issued 2,200,000 of its Common Shares for cash consideration of $55,000.

 

On December 29, 2015 the Company issued 4,000,000 of its Common Shares for cash consideration of $100,000.

 

Series A Preferred Stock

 

On October 28, 2015 the Company issued 1,666,667 shares of its Series A Preferred stock for cash consideration of $83,333.

 

On October 28, 2015 the Company issued 11,000,000 shares of its Series A Preferred stock to Dr. Harry Lander, the Company’s President and Chief Scientific Officer, pursuant to the terms and conditions of that employment agreement entered into by and between Dr. Lander and Regen dated October 9, 2015.

 

On November 20, 2015 the Company issued 2,200,000 shares of its Series A Preferred stock for cash consideration of $55,000.

 

On November 20, 2015 the Company issued 400,000 shares of its Series A Preferred stock as consideration for nonemployee services.

 

On December 29, 2015 the Company issued 4,000,000 shares of its Series A Preferred stock for cash consideration of $100,000.

 

 

 

NOTE 11. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

 

Subsequent to the original issuance of Regen’s quarterly financial statements for the period ended December 31, 2015 the Company determined that the recognition of $ 1,163,313 of expenses recognized during the period resulting from the issuance for less than fair value of equity securities should not have been recognized.

 

The following tables reflect the corrections:

 

REGEN BIOPHARMA , INC.
BALANCE SHEET
		As of December 31, 2015 (unaudited)				Adjustments				As of December 31, 2015 (unaudited) restated
ASSETS
CURRENT ASSETS
Cash			168,517								168,517
Note Receivable			12,051								12,051
Prepaid Expenses			1,000								1,000
Accrued Interest Receivable			1,681								1,681
Due from Former Employees			15,000								15,000
Total Current Assets			198,249								198,249
OTHER ASSETS
Available for Sale Securities			120,000								120,000
Total Other Assets			120,000								120,000
TOTAL ASSETS			318,249								318,249
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Bank Overdraft			0								0
Accounts payable			27,646								27,646
Notes Payable			168,050								168,050
Accrued payroll taxes			5,771								5,771
Accrued Interest			26,095								26,095
Accrued Rent			10,000								10,000
Accrued Payroll			52,663								52,663
Due to Shareholder			50,000								50,000
Total Current Liabilities			340,225								340,225
Total Liabilities			340,225								340,225
STOCKHOLDERS' EQUITY (DEFICIT)
Common Stock ($.0001 par value) 500,000,000 shares authorized; 114,753,938 issued and outstanding as of September 30, 2015 and 124,287,272 shares issued and outstanding December 31, 2015			12,427								12,427
Preferred Stock, 0.0001 par value, 800,000,000 authorized and 100,000,000 authorized as of December 31,  2015 and September 30, 2015 respectively
Series A Preferred 90,000,000 Authorized and 300,000,000 authorized, 60,981,697 and 80,248,364 outstanding as of  September 30, 2105 and December 31, 2015 respectively			8,025								8,025
Series AA Preferred $0.0001 par value 600,000 authorized and 30,000 outstanding as of September 30, 2015 and December 31, 2015			3								3
Additional Paid in capital			13,632,102				(10,147,746	)			3,484,356
Contributed Capital			728,658								728,658
Retained Earnings (Deficit) accumulated during the development stage			(14,331,191	)			(10,147,746	)			(4,183,446	)
Accumulated Other Comprehensive Income			(72,000	)							(72,000	)
Total Stockholders' Equity (Deficit)			(21,976	)							(21,976	)
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)			318,249								318,249
The Accompanying Notes are an Integral Part of These Financial Statements

 

 

 

REGEN BIOPHARMA , INC.
STATEMENT OF OPERATIONS
(unaudited)
			Quarter Ended December 31, 2015				Adjustments				Quarter Ended December 31, 2015
REVENUES			0								0
COST AND EXPENSES
Research and Development			105,323								105,323
General and Administrative			488,596								488,596
Consulting and Professional Fees			80,533								80,533
Rent			15,000								15,000
Total Costs and Expenses			689,452								689,452
OPERATING LOSS			(689,452	)							(689,452	)
OTHER INCOME & (EXPENSES)
Interest Income			300								300
Refunds of amounts previously paid
Interest Expense			(5,001	)							(5,001	)
Loss on issuance of common shares for
less than fair value			(1,163,313	)			1,163,313				0
TOTAL OTHER INCOME (EXPENSE)			(1,168,014	)							(4,701	)
NET INCOME (LOSS)			(1,857,466	)							(694,153	)
BASIC AND FULLY DILUTED EARNINGS (LOSS) PER SHARE			(0.0157	)							(0.0059	)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING			118,216,582								118,216,582
The Accompanying Notes are an Integral Part of These Financial Statements

 

 

 

REGEN BIOPHARMA,INC. STATEMENT OF COMPREHENSIVE INCOME
(unaudited)
		Quarter  Ended December 31
		2015								2015
						adjustments				(restated)
Net Income (Loss)		$	(1,857,466	)			1,163,313			$	(694,153	)
Add:
Unrealized Gains on Securities			0								0
Less:
Unrealized Losses on Securities			(38,400	)							(38,400	)
Total Other Comprehensive Income (Loss)			(38,400	)							(38,400	)
Comprehensive Income		$	(1,895,866	)							(732,553	)

  

REGEN BIOPHARMA , INC.
STATEMENT OF CASH FLOWS
(unaudited)
		Three Months Ended December 31, 2015				Adjustments				Three Months Ended December 31, 2015 Restated
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (loss)		$	(1,857,466	)		$	1,163,313			$	(694,153	)
Adjustments to reconcile net Income to net cash
Common Stock issued to Consultants
Preferred Stock issued to Consultants		$	40							$	40
Changes in operating assets and liabilities:
Increase (Decrease) in Accounts Payable		$	1,792							$	1,792
(Increase) Decrease in Notes Receivable		$	—							$	—
(Increase) Decrease in Interest  Receivable		$	(300	)						$	(300	)
Increase ( Decrease) in Bank Overdraft
Increase (Decrease) in accrued Expenses		$	25,495							$	25,495
(Increase) Decrease in Prepaid Expenses		$	9,000							$	9,000
(Increase) Decrease in Due from Former Employee		$	(15,000	)						$	(15,000	)
Increase in issuance of stock below fair value			1,163,313				(1,163,313	)			0
Increase in Additional Paid in Capital			247,723								247,723
Net Cash Provided by (Used in) Operating		$	(425,403	)						$	(425,403	)
Activities
CASH FLOWS FROM FINANCING ACTIVITIES
Common Stock issued for Cash			321,667								321,667
Preferred Stock issued for Cash			238,334								238,334
Increase in Contributed Capital
Increase ( Decrease)  in Notes Payable			(54,701	)							(54,701	)
Increase in Convertible Notes payable
Increase in Due to Shareholder			50,000								50,000
Net Cash Provided by (Used in) Financing
Activities			555,300								555,300
Net Increase (Decrease) in Cash			129,897								129,897
Cash at Beginning of Period			38,620								38,620
Cash at End of Period		$	168,517							$	168,517

 

 

 

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 December 31 2015, we had Cash of $ 168,517and as of September 30, 2015 we had Cash of $38,620.

 

The increase in Cash of 336 % is primarily attributable to:

The sale of $560,000 of equity securities by the Company

The deposit with the Company of $50,000 by an investor in anticipation of purchasing the equity securities of the Company

Offset by:

Payment by the Company of $19,701 of principal indebtedness owed by the Company to Bio Matrix Scientific Group, Inc. ( an entity under common control with the Company)

Payment by the Company of $35,000 of principal indebtedness owed by the Company to an unaffiliated third party lender.

Cash expended in the operation of the Company’s business.

As of December 31 2015, we had Prepaid Expenses of $ 1,000 and as of September 30, 2015 we had Prepaid Expenses of $10,000

The decrease in Prepaid Expenses of 90% is attributable to:

 

 

$10,000 of salary prepaid to the Company’s former Chief Scientific Officer having been reclassified during the quarter ended December 31, 2015 as amounts Due from Former Employee as a result of the resignation of the Company’s former Chief Scientific Officer during the quarter ended December 31, 2015

 

Offset by:

 

$1,000 in salary having been prepaid to an employee during the quarter ended December 31, 2015

 

As of December 31, 2015 we had Accrued Interest Receivable of $1,681 and as of September 30, 2015 we had Accrued Interest Receivable of $1,381

 

The increase in of Accrued Interest Receivable of approximately 21.7% is attributable to interest accrued but unpaid during the three months ended December 31 , 2015 resulting from amounts due to the Company by Entest Bio-Medical, Inc. David R. Koos serves as Chairman of the Board and Chief Executive Officer of both the Company and Entest Bio-Medical, Inc.

 

As of December 31, 2015 we had Amounts Due from Former Employee of $15,000 and as of September 30, 2015 we had Amounts Due from Former Employee of $0.

 

The increase in Amounts Due from Former Employee is attributable to:

 

$10,000 of salary prepaid to the Company’s former Chief Scientific Officer having been reclassified during the quarter ended December 31, 2015 as amounts Due from Former Employee as a result of the resignation of the Company’s former Chief Scientific Officer during the quarter ended December 31, 2015.

 

$5,000 overpayment of salary due to the Company’s former Chief Scientific Officer during the quarter ended December 31, 2015.

 

As of December 31, 2015 we had Available for Sale Securities of $120,000 and as of September 30, 2015 we had Available for Sale Securities of $158,400

 

The decrease in Available for Sale Securities of 24.2% is attributable to unrealized losses recognized on 8,000,000 common shares of Entest Biomedical, Inc. owned by the Company.

As of December 31, 2015 we had Accounts Payable of $27,646 and as of September 30, 2015 we had Accounts payable of $25,854.

 

The increase in Accounts Payable of approximately 6.9% is attributable to increases in outstanding obligations of the Company incurred in the course of business.

As of December 30,2015 we had Notes Payable of $168,050 and as of September 30, 2015 we had Notes Payable of $222,751.

The decrease in Notes Payable of approximately 24.5% is attributable to:

Payment by the Company of $19,701 of principal indebtedness owed by the Company to Bio Matrix Scientific Group, Inc. ( an entity under common control with the Company)

Payment by the Company of $35,000 of principal indebtedness owed by the Company to an unaffiliated third party lender.

As of December 30, 2105 we had Accrued Payroll Taxes of $5,771 and as of September 30, 2015 we had Accrued Payroll Taxes of $1,940.

The increase in Accrued Payroll Taxes of approximately 197% is primarily attributable to employer tax obligations incurred but unpaid during the three months ended December 31, 2015.

As of December 31, 2105 we had Accrued Interest of $26,095 and as of September 30, 2015 we had Accrued Interest of $21,093.

The increase in Accrued Interest of approximately 23.7% is attributable to interest expense on Notes Payable incurred during the three months ended December 31, 2015 but not yet paid.

As of December 31, 2105 we had Accrued Payroll of $52,663 and as of September 30, 2015 we had Accrued Payroll of $36,001.

The increase in Accrued Payroll of approximately 46.2% is attributable to :

$45,162 in salary expense due to the Company’s President incurred but unpaid during the quarter ended December 31, 2015 offset by the payment by the Company during the quarter ended December 31, 2015 of $15,000 of salary accrued but unpaid due to the Company’s Chief Executive Officer and $13,500 of salary accrued but unpaid due to the Company’s Chief Financial Officer.

 

As of December 31, 2015 we had Amounts Due to Shareholder of $50,000 and as of September 30, 2015 we had Amounts Due to Shareholder of $0.

The increase in Amounts Due to Shareholder is attributable to the deposit with the Company of $50,000 by an investor in anticipation of purchasing the equity securities of the Company

 

Material Changes in Results of Operations

Revenues from operations were $0 for the three months ended December 31, 2015 and -0- for the three months ended December 31, 2014. Net Losses were $694,153 for the three months ended December 31,, 2015 and $219,191 for the same period ended 2014. 

The increase in Net Losses of approximately 217% is primarily attributable to an increase in expenses related to General and Administrative, Research and Development, Rent and Consulting and professional Fees incurred during the quarter ended December 31, 2015 as compared to the same quarter ended 2014 partially offset by lower interest expenses incurred during the quarter ended December 31, 2015 as compared to the same quarter ended 2014 and higher interest income earned during the quarter ended December 31, 2015 as compared to the same quarter ended 2014.

Liquidity and Capital Resources

 

As of December 31, 2015 we had $168,517in cash and current liabilities of $340,225 such liabilities consisting of Accounts Payable, Notes Payable , Amounts Due to Shareholder 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. During the quarter ended December 31, 2015 the Company raised $560,000 through the sale of equity securities.

 

As of December 31, 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 not effective at this reasonable assurance level as of the period covered solely because of the material weakness in our internal control over financial reporting described below.

 

The Company’s internal control over financial reporting is a process designed under the supervision of the Company’s management to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with U.S. generally accepted accounting principles.

In designing and evaluating our disclosure controls and procedures, our management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only a reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met.

The Company’s management assessed the effectiveness of its internal control over financial reporting as of December 31, 2015 based on the framework in 2013 Committee of Sponsoring Organizations of the Treadway Commission, or COSO, framework. Based on its assessment, management believes that, as of December 31, 2015, the Company’s internal control over financial reporting is not effective.

Management identified a material weakness in internal control over financial reporting as of December 31, 2015. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

We did not design and maintain effective internal control over the accounting for issuances of equity securities of the Company for cash consideration and issuances of equity securities of the Company for conversion of convertible securities. This control deficiency resulted in the improper recognition of $1,163,313 of expenses recognized during the quarter ended December 31, 2015 resulting from the issuance for less than fair value of equity securities which not have been recognized ( See Note 11 of Notes to Financial Statements.)

Remediation

Plan for Material Weakness in Internal Control over Financial Reporting

The Company’s management has begun to design and implement certain remediation measures to address the above-described material weakness and enhance the Company’s internal control over financial reporting. We will take the following actions to improve the design and operating effectiveness of our internal control in order to remediate this material weakness:

Institute an additional review of any and all issuances of capital stock to ensure the event is recognized in accordance with United States GAAP.

Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the company to provide only management's report in this annual report. This exemption for smaller reporting companies provided under the temporary rules referenced above has been made permanent under Section 989G of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

 

Changes in Internal Controls over Financial Reporting

 

In connection with the evaluation of the Company's internal controls during the period commencing on October 1, 2015 and ending on December 31, 2015, David Koos and Todd S. Caven , who serve as the Company's Principal Executive Officer and Principal Financial Officer respectively, have determined that, other than as described above, 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

 

Common Shares

 

On October 28, 2015 the Company issued 3,333,334 of its Common Shares (“Shares”) for cash consideration of $166,667.

 

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. Cash proceeds received from sale will be utilized by Regen for general corporate purposes.

 

On November 20, 2015 the Company issued 2,200,000 of its Common Shares (“Shares”) for cash consideration of $55,000.

 

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. Cash proceeds received from sale will be utilized by Regen for general corporate purposes.

 

 

On December 29, 2015 the Company issued 4,000,000 of its Common Shares (“Shares”) for cash consideration of $100,000.

 

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. Cash proceeds received from sale will be utilized by Regen for general corporate purposes.

 

Series A Preferred Stock

 

On October 28, 2015 the Company issued 1,666,667 shares of its Series A Preferred stock (“Shares”) for cash consideration of $83,333.

 

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. Cash proceeds received from sale will be utilized by Regen for general corporate purposes.

 

 

On October 28, 2015 the Company issued 11,000,000 shares of its Series A Preferred stock (“Shares”) to Dr. Harry Lander, the Company’s President and Chief Scientific Officer, pursuant to the terms and conditions of that employment agreement entered into by and between Dr. Lander and Regen dated October 9, 2015.

 

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 November 20, 2015 the Company issued 2,200,000 shares of its Series A Preferred stock (“Shares”) for cash consideration of $55,000.

 

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. Cash proceeds received from sale will be utilized by Regen for general corporate purposes.

 

On November 20, 2015 the Company issued 400,000 shares of its Series A Preferred stock (“Shares”) as consideration for nonemployee 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.

 

On December 29, 2015 the Company issued 4,000,000 shares of its Series A Preferred stock (“Shares”) for cash consideration of $100,000.

 

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. Cash proceeds received from sale will be utilized by Regen for general corporate purposes.

 

 

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.

 

 

 

 

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: 04/28/2017	By:  /s/ David Koos
	David Koos
	Chief Executive Officer

 

Dated: 04/28/2017		By:  /s/ Todd S. Caven
		Todd S. Caven
		Chief Financial Officer