a5532864.htm
UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,
D. C. 20549
FORM
10-KSB/A
Amendment
No. 2
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For
the
transition period from December 31, 2005 to September 30, 2006
File
Number: 0-32201
BIO
MATRIX SCIENTIFIC GROUP, INC.
(Exact
name of registrant as specified in its charter)
DELAWARE
|
33-0824714
|
(State
of jurisdiction of Incorporation)
|
(I.R.S.
Employer Identification No.)
|
|
|
8885
REHCO RD.SAN DIEGO CA
|
92121
|
(Address
of principal executive offices)
|
(Zip
Code)
|
(619)
398-3517 ext. 308
(Registrants
telephone number, including area code)
Indicate
by check mark whether the Registrant (1) has filed all reports required to
be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934during the
preceding 12 months (or for such shorter period that the Registrant was required
to file such reports) and (2) has been subject to such filing requirements
for
the past 90 days. Yes x No
o
Check
if
there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. Yes x No
o
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). o
The
issuer
had no revenues for the year ended September 30, 2006.
Aggregate
market value of the voting stock held by non-affiliates computed by reference
to
the closing price at which the common stock sold on the Over-the-Counter on
September 10, 2007:$3,003,442. The voting stock held by non-affiliates on that
date consisted of 10,356,698shares of common stock.
Number
of
shares outstanding of each of the issuer's class of common stock as of September
10, 2007:
Common
Stock: 23,174,396Preferred Stock: 0
THE
STATEMENTS CONTAINED IN THIS REPORT ON FORM 10-KSB THAT ARE NOT HISTORICAL
FACTS
ARE “FORWARD-LOOKING STATEMENTS (AS THAT TERM IS DEFINED IN THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995), THAT CAN BE IDENTIFIED BY THE USE
OF
FORWARD-LOOKING WORDS SUCH AS “BELIEVES, “EXPECTS, “MAY,” “WILL,”“SHOULD,” OR
“ANTICIPATES,” OR THE NEGATIVE OF THESE WORDS OR OTHER VARIATIONS OF THESE WORDS
OR COMPARABLE WORDS, OR BY DISCUSSIONS OF STRATEGY THAT INVOLVE RISKS AND
UNCERTAINTIES. MANAGEMENT WISHES TO CAUTION THE READER THAT THESE
FORWARD-LOOKING STATEMENTS INCLUDING, BUT NOT LIMITED TO, STATEMENTS REGARDING
THE PLANNED EFFORTS TO IMPLEMENT THE COMPANY'S BUSINESS PLAN, THE STATUS OF
STEM
CELL TECHNOLOGY, OUR PLANNED MEDICAL DEVICE PRODUCTS, AND ANY OTHER EFFORTS
THAT
THE COMPANY INTENDS TO TAKE IN AN ATTEMPT TO GROW THECOMPANY, ENHANCE SALES,
ATTRACT & RETAIN QUALIFIED PERSONNEL, AND OTHERWISE EXPAND THE COMPANY'S
BUSINESS ARE NOT HISTORICAL FACTS AND ARE ONLY PREDICTIONS. NO ASSURANCES CAN
BE
GIVEN THAT SUCH PREDICTIONS WILL PROVE CORRECT OR THAT THE ANTICIPATED FUTURE
RESULTS WILL BE ACHIEVED. ACTUAL EVENTS OR RESULTS MAY DIFFER MATERIALLY EITHER
BECAUSE ONE OR MORE PREDICTIONS PROVE TO BE ERRONEOUS OR BECAUSE OF THE
CONTINUING RISKS AND UNCERTAINTIES FACING THE COMPANY. SUCH RISKS INCLUDE,
BUT
ARE NOT LIMITED TO, THE FOLLOWING: BUSINESS (OR SYSTEMATIC) RISK ASSOCIATED
WITH
AN EARLY STAGE COMPANY, UNSYSTEMATIC RISK, AND POLITICAL RISK. FURTHER, BECAUSE
OF THE SMALL SIZE OF THE COMPANY, THE COMPANY'S LIMITED FINANCIAL AND MANAGERIAL
RESOURCES AND THE CONTINUING COMPETITIVE PRESSURES AND UNCERTAINT REGULATORY
ENVIRONMENT, ANY ONE OR MORE OF THESE AND OTHER RISKS COULD CAUSE
ACTUAL RESULTS TO DIFFER MATERIALLY FROM THE FUTURE RESULTS INDICATED,
EXPRESSED, OR IMPLIED IN SUCH FORWARD-LOOKING STATEMENTS. ALL REFERENCES TO
“WE”
OR “US” CONTAINED WITHIN THIS FORM 10-KSB REFER TO BIO-MATRIX SCIENTIFIC GROUP,
INC.
ITEM
1 -
DESCRIPTION OF BUSINESS
BUSINESS
DEVELOPMENT
We
were
organized October 6, 1998, under the laws of the State of Delaware as Tasco
International, Inc.
We
are in
the development stage.
From
October 6, 1998 (the date of incorporation) of to October 19, 1999, we were
in
the business of marketing and selling hand-made jewelry and art objects on
the
Internet. We conducted no operations past the development stage and did not
generate any revenues in this business.
From
October 19, 1999 to July 3, 2006 (the date of Acquisition of BMXG) , we were
in
the business of providing production of visual content and other digital media,
including still media, 360-degree images, video, animation and audio for the
Internet.
Acquisition
of Bio Matrix Scientific group, Inc., a Nevada corporation:
On
June
14, 2006, we and Bio-Matrix Scientific Group, Inc., a Delaware corporation
(the
“Seller”) entered into a Stock Purchase Agreement (the “Acquisition Agreement”)
to acquire 100% of Bio-Matrix Scientific Group, Inc., a Nevada
corporation.
Under
the
terms of the Acquisition Agreement and pursuant to a separate Escrow Agreement
between us and the Seller, we delivered to the Escrow Agent the sum of
10,000,000 shares of our common stock and other corporate and financial records
and the Seller delivered to the Escrow Agent 25,000 shares of the common stock
of Bio-Matrix Scientific Group, Inc., a Nevada corporation, its wholly owned
subsidiary (“BMSG”). As a part of the transaction and pursuant to the terms of
the Acquisition Agreement and Stock Cancellation Agreement between the parties
and John Lauring, our former Chairman and Chief Executive Officer, John Lauring
returned 10,000,000 shares of the Buyer held and owned by him for
cancellation.
On
June
14, 2006, our former officers and directors resigned their positions and elected
Dr. David R. Koos and Mr. Brian Pockett as in-coming Directors. Following their
election and the reconstruction of the Board of Directors, the Buyer's Board
of
Directors elected Dr. David R. Koos as Chief Executive Officer and President
and
Mr. Brian Pockett as Chief Operating Officer and Vice President on June 19,
2006.
On
July 3,
2006, the Acquisition Agreement closed and we acquired the twenty-five thousand
(25,000) shares of the Common Stock of BMSG from the Seller in exchange for
the
payment of the purchase price of 10,000,000 shares of our common stock and
the
10,000,000 shares of our common stock owned and held by John Lauring were
returned to us for cancellation. At that time, the Escrow Agent released all
stock certificates and certain other corporate and financial books and records
held pursuant to the Escrow Agreement.
As
a
result of the Acquisition Agreement, BMSG is our wholly owned subsidiary. We
abandoned our efforts in the field of digital media production when we acquired
100% of BMSG on July 3, 2006. BMSG is a development stage company in the
business of designing, developing, and marketing medical devices, specifically
disposable instruments used in stem cell extraction and tissue transfer
procedures and operating cryogenic cellular storage facilities, specifically
stem cell banking facilities. As a result of this transaction, the former
stockholder BMSG held approximately 80% of our voting capital stock of the
Company immediately after the transaction. For financial accounting
purposes, this acquisition was a reverse acquisition of the Company by BMSG
under the purchase method of accounting, and was treated as a recapitalization
with Bio-Matrix Scientific Group, Inc. as the acquirer. Accordingly,
the financial statements have been prepared to give retroactive effect to August
2, 2005 (date of inception), of the reverse acquisition completed on July 3,
2006, and represent the operations of BMSG, which has changed its Fiscal Year
End to September 30, from December 31.
Through
BMSG, we have developed a line of medical devices (approximately 192 disposable
instruments for use in the plastic surgery field and stem cell research). The
instruments are designed to be used to harvest adult stem cells from adipose
(fat) tissue. We seek to market and sell these instruments to plastic surgeons
and to offer the patients of these plastic surgeons an opportunity to store
stem
cells derived from adipose tissue for future medical treatments. We have-not
conducted or obtained any independent evaluation of the efficacy or likely
market interest in using these instruments. Our evaluations have been limited
to
those conducted by our management without the benefit of any independent or
third party professional evaluation.
Through
BMSG , we are currently constructing what we believe is a state-of-the art,
FDA
good manufacturing practices (cGMP) and good tissue practices(cGTP) compliant
facility for the processing and cryo-storage (in liquid nitrogen) of adult
stem
cells. We anticipate that we will offer a similar service to expectant parents
by offering to store their newborn's cord blood stem cells as well. In
undertaking these plans, we intend to offer such storage services at our planned
facility. The planned facility is located at 8885 Rehco Road, San Diego,
California 92121 and has approximately 15,000 square feet. The planned facility
was acquired under a five year lease on December 1, 2005 at a current cost
of
$18,931 per month (plus certain common area costs). Under the terms of the
lease, the lease term may be extended for an additional five year lease term
at
the then prevailing market prices.
All
of our
current plans and strategy have been developed solely by our officers and
Directors
BUSINESS
OF THE ISSUER
PRINCIPAL
PRODUCTS AND SERVICES
We
are
engaged primarily in
(a)
The
cryogenic storage of stem cells and
(b)
The
development of medical devices used in live tissue transfer and stem cell
research. Live tissue transfer is the process of harvesting, treating, and
re-injecting tissue without damaging precious living cells, potentially
increasing the chance of tissue surviving once transplanted to a donor
site.
Stem
Cell
Bank
We
are
currently constructing what we believe to be a state-of-the art, FDA good
manufacturing practices (cGMP) and good tissue practices (cGTP) compliant
facility for the processing and cryo-storage (in liquid nitrogen) of adult
stem
cells. We anticipate that we will offer a similar service to expectant parents
by offering to store their newborn's cord blood stem cells as well. In
undertaking these plans, we intend to offer such storage services at our planned
facility. This facility is located at 8885 Rehco Road, San Diego, California
92121 and has approximately 15,000 square feet. The planned facility was
acquired by our operating subsidiary under a five year lease on December 1,
2005
at a current cost of $18,931 per month (plus certain common area costs). Under
the terms of the lease, the lease term may be extended for an additional five
year lease term at the then prevailing market prices.
Medical
devices
Through
BMSG, we have developed a line of medical devices consisting of approximately
192 disposable instruments for use in the plastic surgery field and stem cell
research. We seek to market and sell these instruments to plastic surgeons
and
to offer the patients of these plastic surgeons an opportunity to store stem
cells derived from adipose tissue for future medical treatments.
BMXG
has
filed six provisional patent applications, one utility patent application and
one international patent application. These are as follows:
A.
Cannula
- This provisional patent application was filed based on BMXG's intellectual
property and designs relating to tubular instruments used in stem cell
harvesting and tissue transfers.
B.
Tissue
Transfer Cannula and Connectors - This provisional patent application was filed
based on BMSG's intellectual property relating to tubular instrument connectors
used in conjunction with cannulae designed specifically for stem cell harvesting
and tissue transfer procedures. These tissue transfer connectors will allow
the
transfer of tissue from a 20cc to a 3cc or 6cc or 12cc syringe for harvesting
or
tissue transfer procedures.
C.
Syringe Clip - This provisional patent application was filed based on BMSG's
intellectual property relating to a locking device used with syringes which
are
connected to smaller size cannulae in stem cell harvesting and tissue transfer
procedures. This syringe clip is designed to hold and lock the plunger on the
Monoject 3cc, 6cc, 12cc, and 20cc syringes. By locking the plunger in place
it
protects the harvested cells until processing.
D.
Syringe
Clip - This provisional patent application was filed based on BMSG's
intellectual property relating to a locking device used with syringes which
are
connected to larger sized cannulae in stem cell harvesting and tissue transfer
procedures. This syringe clip is designed to hold and lock the plunger on the
Monoject 60cc syringe by locking the plunger it protects the harvested cell
until processing.
E.
Tissue
Transfer Cannula and Connectors - This provisional patent application was filed
based on BMSG's intellectual property relating to the tubular instrumentation
system used in stem cell harvesting and tissue transfer procedures. This
transfer system is used to transfer human tissue from a 60cc syringe to a35cc
or
20cc syringe for tissue transfer.
F.
Cannula
Handle and Storage System - This provisional patent application was filed back
on BMSG's intellectual property relating to a locking device used with syringes
which are connected to cannulae in stem cell harvesting and tissue transfer
procedures. This cannula handle will reduce hand and arm fatigue. The handle
will allow a proper flow of tissue through the cannula using an aspirator or
a
pull syringe.
G.
Tissue
Transfer Cannula and Connectors - This utility patent application was filed
based on BMSG's previously filed provisional patent application relating to
the
aforementioned intellectual property pertaining to tubular instruments locking
device used with syringes which are connected to cannulae in stem cell
harvesting and tissue transfer procedures.
H.
Tissue
Transfer Cannula and Connectors - This international utility patent application
was filed in conjunction with the utility patent application mentioned in Item
G
Veterinary
Division
Since
many
of the medical devices we have developed can easily be used in veterinary
applications, we plan to pursue opportunities in this field. Although
the plans for this field are still evolving, initially we expect to
only be involved in the cryogenic storage of animal stem cells. The veterinary
specimens would be totally isolated from human specimens throughout the facility
and stored in an entirely separate area and cryogenic storage
container.
The
veterinary division would market and sell its services through other companies
already serving the veterinary market.
DISTRIBUTION
METHODS OF PRODUCTS AND SERVICES
We
intend
to market and sell our planned services to medical professionals and other
companies that offer potential for commercial synergies. Our Subsidiary has
entered into an agreement with Cord Blood America, Inc. (CBAI), whereby CBAI
will market to potential clients our subsidiary's services of adipose stem
cell
banking using the Subsidiary's planned stem cell bank facility. Under this
agreement, the Subsidiary has agreed to contract with Cord Blood America Inc.
to
marketing adult stem cell banking to its clients. This contract involves a
sharing of fees charged on a 60 / 40 basis, with 60% of the fees going to us
and
40% going to Cord Blood America.
Our
marketing plan is fairly simple and our target market includes three segments:
plastic surgeons, hospitals and medical schools. We intend to reach these three
target markets through advertising and promotional efforts at medical related
trade shows/conventions, online websites, trade publications and independent
medical marketing entities. We have not yet commenced any marketing efforts
to
reach these targeted segments and we have not yet prepared a marketing budget.
We are aware, however, that our current financial resources may limit our
ability to fully promote the products and services that we plan to offer and
we
anticipate that we will need to develop and refine our marketing plans further
before commencing these efforts.
The
primary products and services we intend to offer are: (A) our medical devices
(consisting of over 192 disposable instruments used in stem cell procedures
/tissue transfer procedures) and (B) the services to be provided by our planned
stem cell bank.
Adipose
Derived Stem Cell Banking
We
have
entered into an agreement with Cord Blood America Inc. (OTCBB: CBAI) to market
the collection of adipose (fat) derived stem cells to plastic and cosmetic
surgeons. It is anticipated upon roll-out, this relationship may offer us the
opportunity to utilize as many as 28 independent out-side sales representatives
already in the field. If these efforts are successful, we plan to initiate
a new
web-site that can take orders, provide information, and respond to questions
from potential customers. We have not yet completed work on the design of this
planned web site, but we anticipate that the design and development of the
web
site will require careful planning and careful coordination with Cord Blood
America to ensure that our marketing plans can be implemented on a consistent
basis.
Collection
of adipose (fat) tissue from which stem cells may be harvested, must be done
by
a physician skilled in using a Stem Cell Collection Kit. While many physicians
have experience in handling adipose (fat) tissue as a part of their practice
as
a plastic surgeon, we will need to assist and develop their understanding and
preference for the use of our kit, instruments, and our stem cell storage
services, if we are obtain a sufficient market interest in our planned products
and services.
After
the
stem cells are collected, they are prepared for cryo-preservation and storage.
In order to successfully harvest stem cells intended for cryo-preservation
and
storage, the instruments used must be clean and free of any contaminants. To
ensure that the collection process meets these requirements and to prevent
difficulties that may arise in cryo-preservation and storage, we intend to
provide each surgeon who undertakes to collect the stem cells, with our Stem
Cell Collection Kit after the patient has entered into an agreement with us
to
store their stem cells with us.
We
anticipate that the marketing of our planned products and services will require
that we complete several steps. First, we plan to introduce our Stem Cell
Collection Kits to certain key physicians so as to allow them to become familiar
with our kit, the instrumentation, and our line of products. Second, we
anticipate that we will need to expend significant efforts to develop physician
acceptance of our kit and instruments. Third, we will need to hire and train
skilled marketing personnel to develop relationships with physicians that will
serve to encourage physicians to use and recommend our services to their
patients. We have not, as of this date, made any estimate for the amount of
funds that will be needed to complete these marketing efforts or the anticipated
time frame that will be required to implement these steps.
Stem
Cell
/ Tissue Transfer Instrumentation
If
we
implement successfully the steps outlined above, we will look to develop loyalty
among physicians who use our Stem Cell Collection Kit and attempt to convert
them to use our complete instrumentation product line. We intend, as
opportunities and our financial resources allow, to rely upon the 28 out-side
CBAI sales representatives already in the field to show our complete
product line (consisting of over 192 disposable instruments) to other
physicians, hospitals, outpatient surgery centers, and plastic surgery centers.
This strategy may allow us many advantages to showcase our instruments for
other
procedures where there is a heightened concern for the risks of
cross-contamination and the need for greater predictability in tissue
manipulation. We also believe that our instruments may offer greater ease of
use
and clean up. These features may serve to make our instruments more attractive
to physicians as it allows them and their staff to be more productive. We also
believe that our disposable instruments may allow the medical service provider
(such as a physician, hospital, or surgery center) an opportunity to directly
charge the patient for instrumentation. This may offer an additional financial
incentive to encourage physician usage and loyalty in using our
instruments.
In
addition to our planned website and direct marketing plans, we plan to attend
trade shows and conventions to further introduce and promote our planned
products and services. These trade shows and conventions will likely include
meetings and conventions sponsored by such groups as the American Society of
Plastic Surgeons Conventions, Orthopedic Surgery, and the AAPS Annual Meeting.
These efforts will be primarily focused on introducing, establishing, building,
and fostering relationships with the targeted segments of physicians, hospitals,
surgery centers, plastic surgery centers, and other providers of medical
services. These relationships will likely become critically important to us
if
we are to develop a sufficient and sustainable revenue base for our company
from
the sale of our planned products and services.
We
anticipate that if we are successful in introducing and developing loyalty
for
our planned products and services, we will need to expend significant financial
resources ranging from $1,750,000 to $2,000,000 or more for advertising and
marketing expenditures over a period of at least nine months to one year or
longer. There are many variables and factors that may impact the time frame
and
the amount of expenditures that we will need to make to introduce and develop
loyalty with our targeted segments. We may need to adjust our plans and devote
a
larger amount of funds to these efforts over a longer period of time if we
are
not able to generate a sufficient volume of product acceptance and repeat sales
that will allow us to achieve these objectives. In the event that we are
successful in achieving these objectives, we anticipate that it may take an
additional eighteen to twenty four months or longer before we may be able to
achieve profitability and positive cash flow, if at all. As we assess the cost
to enter a new business, with all of the uncertainties and risks associated
with
the offering of new products and services, while also developing, testing,
and
implementing marketing plans for the offering of products and services that
are
new, we are aware that we may be facing an ever-changing competitive environment
from other larger and well-established competitors that may force us to examine
and revise our marketing plans.
STATUS
OF
ANY PUBLICLY ANNOUNCED NEW PRODUCT OR SERVICE
Stem
Cell
Bank
In
August,
2005, BMSG signed a lease on a 14,562 sq. ft. facility. This facility, formerly
occupied by the American Red Cross blood testing laboratories provides a
significant infrastructure for the rapid establishment of Bio-Matrix's core
stem
cell business. This facility will house state-of-the-art stem cell processing
and storage laboratories
The
cryogenic storage laboratories, comprising 1050 sq. ft. have been completed.
A
central external liquid nitrogen supply system is also now in place at the
facility. In addition, the first of eight liquid nitrogen stem cell storage
tanks have been installed and is undergoing testing and validation.
Adipose
and cellular processing will be performed in Class 100 environments in our
400
sq. ft. Class 10,000 Modular Laboratory which was completed in October 2006.
Cord blood processing will be done in Class 100 environments in Class 100,000
Laboratory. The facility also has an area for viability testing, preparatory,
receiving, quarantine/ chemical storage, flow cytometry and
microbiology.
To
date,
we have completed the following:
January
2006 - Installation and inspection of 2000 liter Perma-Cyl nitrogen tank
complete.
February
2006 - Installation and testing of vacuum jacketed liquid nitrogen piping system
complete.
February
2006 - California Medical Waste Management Plan is completed and accepted by
the
state of California.
March
2006
- Installation and validation of computer lock down system and air control
monitors at Sorrento Mesa facility thus completing the Cryogenic Storage
Laboratories.
June
2006
- Delivery, Installation testing and validation of CBS Isothermal liquid
nitrogen vapor storage tank.
November
2006-Construction and installation of new Stem Cell Class 10,000 Processing
Laboratory has been completed.
September
2007 – Completed Quality Systems Procedures Manual required for State of
California licensing and FDA registration.
October
2007 – Completed Quality Systems Policies Protocols Manual required for State of
California licensing and FDA registration.
Medical
Devices:
BMXG
has
filed six provisional patent applications and one utility patent application.
These are as follows:
A.
Cannula
- This provisional patent application was filed based on BMSG's intellectual
property and designs relating to tubular instruments used in stem cell
harvesting and tissue transfers.
B.
Tissue
Transfer Cannula and Connectors - This provisional patent application was filed
based on BMSG's intellectual property relating to tubular instrument connectors
used in conjunction with cannulae designed specifically for stem cell harvesting
and tissue transfer procedures. These tissue transfer connectors will allow
the
transfer of tissue from a 20cc to a 3cc or 6cc or 12cc syringe for harvesting
or
tissue transfer procedures.
C.
Syringe
Clip - This provisional patent application was filed based on BMSG's
intellectual property relating to a locking device used with syringes which
are
connected to smaller size cannulae in stem cell harvesting and tissue transfer
procedures. This syringe clip is designed to hold and lock the plunger on the
Monoject 3cc, 6cc, 12cc, and 20cc syringes. By locking the plunger in place
it
protects the harvested cells until processing.
D.
Syringe
Clip - This provisional patent application was filed based on BMSG's
intellectual property relating to a locking device used with syringes which
are
connected to larger sized cannulae in stem cell harvesting and tissue transfer
procedures. This syringe clip is designed to hold and lock the plunger on the
Monojet 60cc syringe by locking the plunger it protects the harvested cell
until
processing.
E.
Tissue
Transfer Cannula and Connectors - This provisional patent application was filed
based on BMSG's intellectual property relating to the tubular instrumentation
system used in stem cell harvesting and tissue transfer procedures. This
transfer system is used to transfer human tissue from a 60cc syringe to a35cc
or
20cc syringe for tissue transfer.
F.
Cannula
Handle and Storage System - This provisional patent application was filed based
on BMSG's intellectual property relating to a locking device used with syringes
which are connected to cannulae in stem cell harvesting and tissue transfer
procedures. This cannula handle will reduce hand and arm fatigue. The handle
will allow a proper flow of tissue through the cannula using an aspirator or
a
pull syringe.
G.
Tissue
Transfer Cannula and Connectors - This utility patent application was filed
based on BMSG's previously filed provisional patent application relating to
the
aforementioned intellectual property pertaining to tubular instruments locking
device used with syringes which are connected to cannulae in stem cell
harvesting and tissue transfer procedures.
H.
Tissue
Transfer Cannula and Connectors - This international utility patent application
was filed in conjunction with the utility patent application mentioned in Item
G
COMPETITIVE
BUSINESS CONDITIONS AND THE SMALL BUSINESS ISSUER'S COMPETITIVE POSITION IN
THE
INDUSTRY AND METHODS OF COMPETITION
We
face
intense and ever-changing competition from many other established local,
regional and national companies. Many of these companies, such as Cryo-Cell
International Inc., California Cryo-Bank, Cord Blood Registry, Inc. and Viacord
are competitors who possess significantly greater financial, managerial, and
marketing resources. Given our small size, changing technology, and our limited
resources, the intensity of competition will likely continue for the foreseeable
future. This may limit our ability to introduce and market our products, limit
our ability to price our planned products and services, and, ultimately, our
ability to generate and sustain sufficient sales revenues that would allow
us to
achieve profitability and positive cash flow.
These
competitors have, in many cases, completed or implemented strategies that may
provide them with a greater ability and a more diversified business strategy
that will allow them to better respond to product and market changes and other
variables in this new industry.
Competitive
conditions and the industry structure are likely to further change as
comparative technologies, cost factors, and regulatory issues develop. These
and
other risks and uncertainties are likely to have a continuing direct impact
on
the Registrant in implementing its business plan.
SOURCES
AND AVAILABILITY OF RAW MATERIALS AND THE NAMES OF PRINCIPAL
SUPPLIERS
We
source
materials from a variety of vendors as the materials required by us are widely
available on competitive terms and conditions.
DEPENDENCE
ON ONE OR A FEW MAJOR CUSTOMERS
We
have
not, as of the date of this document, sold any products or services. We do
not
anticipate dependence on one or a few major customers upon commencement of
sales.
PATENTS,
TRADEMARKS, LICENSES, FRANCHISES, CONCESSIONS, ROYALTY AGREEMENTS OR LABOR
CONTRACTS, INCLUDING DURATION
None
GOVERNMENT
REGULATIONS
The
U.S.
Food and Drug Administration (FDA) regulations require that all human tissue
and
cellular products be manufactured according to Good Tissue Practice (cGTP).
FDA
code of Federal regulations 21 CFR part1271 was effective May 2005). As
currently planned, the Registrant, through its Subsidiary, plans to manufacture
human cellular based products for future, as yet undefined, medical treatments
in accordance with this regulation. Good tissue practices requires that all
tissue based and cellular products be manufactured to minimize the transmission
of diseases including hepatitis and HIV. All tissue banks (including those
banking cellular based products) must register with the FDA prior to
commencement of such product manufacture and their associated services and
be
compliant.
We
anticipate that we will be required to register with the FDA under the Public
Health Service Act to satisfy the regulatory requirements involving the storage
of stem cells and other tissue. These regulatory requirements apply to all
establishments engaged in the recovery, processing, storage, labeling,
packaging, or distribution of any Human Cells, Tissues, and Cellular and
Tissue-Based Products (HCT/Ps) or the screening or testing of a cell or tissue
donor. Stem cell banking is also subject to State Regulations. We will be
applying initially for a California State License.
Registration
with the FDA
Prior
to
registering, the Registrant and all building construction and laboratory
infrastructure that are used in these activities must be complete as well having
a comprehensive quality system in place compliant with FDA cGMP and cGTP
regulations. The Registrant anticipates completing building and laboratory
improvements near term and a compliant quality system will be in place also
at
this time, although there is no assurance that the Registrant will do so. FDA
registration will occur on completion of the above and is considered complete
at
time of receipt and recording by this Agency.
California
State licensure
If
we are
able to complete the construction and tenant improvements, and purchase and
install the necessary equipment and fixtures at our planned facility, and to
the
extent that we are able, we will seek to obtain registration for licensure
in
the State of California simultaneously with that of the FDA. We anticipate
that
our registration will be complete upon receipt of the application and fees
by
the State of California Department of Health. We currently anticipate receiving
necessary licenses from the State of California after the facility is inspected
and approved. In that event, we anticipate that we may obtain a state license
within approximately two to six weeks after receipt of application, based on
our
current assessments and the information we have received from Department of
Health.
We
are
aware that despite these plans and the information that we have developed
regarding regulatory and licensing requirements, regulatory and licensing
requirements are subject to continuing changes. The U.S. Food and Drug
Administration (FDA) regulates companies or other businesses engaged in the
manufacture of human tissue or cellular products. Currently, these products
must
be manufactured in compliance with the FDA 21CFR part 1271. This regulation
seeks to minimize the risk of transmission of diseases that can be transmitted
due to transplantation or transfusion of human tissue or cellular products
such
as hepatitis and HIV. These Federal regulations may have an adverse impact
on
the current stem cell banking industry. There is significant cost associated
with compliance to any code of Federal regulations (CFR). Only those companies
that have the financial resources to implement and maintain comprehensive
quality programs for both Good Manufacturing Processes (cGMPs) and Good Tissue
Practice (cGTP) will be able to establish such a business. While we believe
that
our plans, if implemented successfully, will allow us to satisfy our obligations
under these regulations, we cannot assure you that we will continue to satisfy
federal and state regulatory requirements or that the cost of satisfying these
and future regulatory requirements can be achieved without undue and
unacceptable expense to us.
The
environmental laws that impact us currently concern the following:
1.
Disposition of biohazardous waste.
2.
Emission control from an electricity generator to be installed for backup power
at the planned facility.
Biohazardous
waste (human tissue, blood and other body fluids) will be disposed of according
to laws of the State of California. State licensed contactors will be
used. The cost of biohazardous waste disposal is proportional to the weight
of
biohazardous material generated in a facility. It is estimated that in the
start-up phase of our planned operations that the cost attributable to disposal
of biohazardous waste will be approximately $1000 per month. No other waste
material, such as chemical or radioactive waste will be generated at our planned
facility.
The
State
of California requires that all electrical generators utilizing fossil fuels
be
in compliance with all State and local clean air requirements. A new generator
will need to be installed at our planned facility that will comply with all
Federal, State and local regulations. No significant budgetary impact is
foreseen on the cost of acquisition of back-up power at our planned facility
that will be in compliance with all local, State and Federal
regulations.
EFFECT
OF
EXISTING OR PROBABLE GOVERNMENTAL REGULATIONS ON THE BUSINESS
Evolving
legislation may materially adversely affect our business. The Food and Drug
Administration (FDA) regulates companies or other businesses engaged in the
manufacture of human tissue or cellular products. These products must be
manufactured in compliance with the FDA 21CFR part 1271. This regulation seeks
to minimize the risk of transmission of diseases that can be transmitted due
to
transplantation or transfusion of human tissue or cellular products such as
hepatitis and HIV. These Federal regulations may have an impact on the current
stem cell banking industry. There is significant cost associated with compliance
to any code of Federal regulations (CFR). Only those Companies that have the
financial resources to implement comprehensive quality programs for both Good
Manufacturing Processes (cGMPs) and Good Tissue Practice (cGTP) will be able
to
establish such a business. There is the possibility that other legislation
maybe
enacted which will affect our business.
RESEARCH
AND DEVELOPMENT
During
the
nine months ended September 30, 2006, we expended $75,153 on research and
development. During the twelve months ended December 31, 2005, we expended
$135,387 on research and development
NUMBER
OF
TOTAL EMPLOYEES AND NUMBER OF FULL TIME EMPLOYEES
As
of
October 25, 2007, we have seven total employees who are full time
employees.
In
August,
2005, BMSG signed a lease on a 14,562 sq. ft. facility located at 8885 Rehco
Rd., San Diego CA 92121. This facility houses our stem cell processing and
storage laboratories as well as our executive offices.
The
cryogenic storage laboratories, comprising 1050 sq. ft. have been completed.
A
central external liquid nitrogen supply system is also now in place at the
facility. In addition, the first of eight liquid nitrogen stem cell storage
tanks have been installed and is undergoing testing and validation.
Adipose
and cellular processing will be performed in Class 100 environments in our
400
sq. ft. Class 10,000 Modular Laboratory which was completed in October 2006.
Cord blood processing will be done in Class 100 environments in our Class
100,000 Laboratory. The facility also has an area for viability testing,
preparatory, receiving, quarantine/ chemical storage, flow cytometry and
microbiology.
To
date,
we have completed the following:
January
2006 - Installation and inspection of 2000 liter Perma-Cyl nitrogen tank
complete.
February
2006 - Installation and testing of vacuum jacketed liquid nitrogen piping system
complete.
February
2006 - California Medical Waste Management Plan is completed and accepted by
the
state of California.
March
2006 - Installation and validation of computer lock down system and air control
monitors at Sorrento Mesa facility thus completing the Cryogenic Storage
Laboratories.
June
2006
- Delivery, Installation testing and validation of CBS Isothermal liquid
nitrogen vapor storage tank.
November
2006-Construction and installation of new Stem Cell Class 10,000 Processing
Laboratory has been completed
PART
II
Market
for
Common Shares
Our
common
stock is traded on the OTCBB under the symbol "BMSN". Prior to September 5,
2006
our Common Stock traded under the symbol "THII".
2005
|
High
|
Low
|
First
Quarter
|
|
|
Second
Quarter
|
|
|
Third
Quarter
|
3.55
|
0.12
|
Fourth
Quarter
|
3.25
|
2.75
|
2006
|
|
|
First
Quarter
|
3.00
|
1.5
|
Second
Quarter Third Quarter
|
3.00
|
1.26
|
Fourth
Quarter
|
3.19
|
1.51
|
|
2.00
|
0.49
|
Holders
As
of July
12, 2007 there were approximately 400 holders of our Common
Stock
Dividends
No
dividends were paid during the fiscal year ending September 30, 2006. We do
not
expect to declare dividends in the immediate future.
Recent
Sales of Unregistered Equity Securities
On
June
13, 2006, the Company issued 10,000,000 shares of common stock into Escrow
in
connection with the acquisition of BSMG. The shares were issued pursuant to
Section 4(2) of the Securities Act of 1933, as amended. The consideration for
these shares was 100% of the outstanding share capital of BMSG.
The
shares were offered directly through the management. No underwriters were
retained to serve as placement agents. 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 of Common Stock stating
that the shares of Common Stock have not been registered under the Act and
setting forth or referring to the restrictions on transferability and sale
of
the shares of Common Stock.
On
October
12, 2006, we issued 1,462,570 common shares of the Company to BMXP Holdings,
Inc. in full satisfaction of the amount of $1,191,619 plus accrued and unpaid
interest, owed to BMXP Holdings, Inc. by us. The shares were issued pursuant
to
Section 4(2) of the Securities Act of 1933, as amended.
The
shares
were offered directly through the management. No underwriters were retained
to
serve as placement agents. 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 of Common Stock stating
that the shares of Common Stock have not been registered under the Act and
setting forth or referring to the restrictions on transferability and sale
of
the shares of Common Stock.
As
further
consideration to BMXP Holdings, Inc. Holdings Inc. for entering into this
agreement with us whereby 1,462,570 common shares were to be issued in full
satisfaction of debts owed (“Agreement”) and abiding by the terms and conditions
thereof, at any time within a period of 365 days from the date of the Agreement,
BMXP Holdings, Inc. shall have the right, upon written demand to the Company
(“Registration Demand”), to cause us ,within ninety days of the Registration
Demand, to prepare and file with the United States Securities and Exchange
Commission a registration statement to register under the Securities Act of
1933, as amended, 11,462,570 common shares of the Company (including the shares
issued pursuant to this Agreement)owned by BMXP Holdings, Inc. (“Registerable
Securities”), in order that the Registerable Securities may be distributed to
BMXP Holdings, Inc. shareholders on a pro rata basis ( based on their ownership
of common shares of the Company as of a Record Date to be determined by BMXP
Holdings, Inc.),and use its reasonable best efforts to cause that registration
statement to be declared effective by the SEC. This right may also be exercised
by any entity to which BMXP Holdings, Inc. has transferred ownership of the
Registerable Securities in trust for the BMXP Holdings, Inc. Record
Shareholders. As of
June 28, 2007 the shares owned by BMXP Holdings were transferred by BMXP
Holdings, Inc. to the BMXP Holdings Shareholder Business Trust for the benefit
of BMXP Holdings Inc. shareholders of record May 23, 2007.
On
December 5, 2006 we issued 1,391,935 shares of common stock to Bio-Technology
Partners Business Trust which constituted full satisfaction of the amount of
$246,744 plus accrued interest owed by the Company to Bio-Technology Partners
Business Trust. The shares were issued pursuant to Section 4(2) of the
Securities Act of 1933, as amended.
The
shares
were offered directly through the management. No underwriters were retained
to
serve as placement agents. 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 of Common Stock stating
that the shares of Common Stock have not been registered under the Act and
setting forth or referring to the restrictions on transferability and sale
of
the shares of Common Stock.
On
March
9, 2007 we issued 500,000 shares of common stock to Bio-Technology Partners
Business Trust which constituted full satisfaction of the amount of $125,000
owed by the Company to Bio-Technology Partners Business Trust. The shares
were issued pursuant to Section 4(2) of the Securities Act of 1933, as
amended.
The
shares
were offered directly through the management. No underwriters were retained
to
serve as placement agents. 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 of Common Stock stating
that the shares of Common Stock have not been registered under the Act and
setting forth or referring to the restrictions on transferability and sale
of
the shares of Common Stock
During
the
period beginning January 1, 2007 and ending April 4, 2007, we sold 1,752,867
restricted shares (the "Shares") of common stock, at a purchase price of $0.25
per share.
740,666
of
the Shares were sold for cash consideration of $185,166 to five
purchasers. The net proceeds of the sale of shares sold for cash
consideration, which were $185,166, will be utilized for general working capital
purposes.
27,033
of
the Shares were issued to two purchasers as consideration for services rendered
valued at $6,758.
985,168
of
the Shares were issued to Bombardier Pacific Ventures in full satisfaction
of
$246,292 owed by the Company to Bombardier Pacific Ventures on April 4, 2007.
David R. Koos, the Company’s Chairman of the Board of Directors, President, CEO,
Secretary, and Acting CFO, is the sole beneficial owner of Bombardier Pacific
Ventures.
No
underwriters were retained to serve as placement agents for the sale. The Shares
were sold directly through the management of the Company. 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.
The
offer
and sale of the Shares was exempt from the registration provisions of the
Securities Act of 1933, as amended, by reason of Section 4(2)
thereof. Each of the purchasers warranted and represented that they
were “Accredited Investors” as that term is used in Rule 144(a)(1) of the
Securities Act of 1933 and each gave further representations that they were
experienced and sophisticated in making financial, business, and investment
decisions and thereby able to “fend for themselves.” Further, each
received an opportunity to ask questions of the Company’s management regarding
the Company, its affairs, condition, and prospects and to receive answers to
all
such questions. Finally, each received a copy of the Company’s
business plan, the risks and merits of investing in the Company, together with
copies of the Company’s financial statements so as to allow each of them to make
an informed investment decision.
On
June
21, 2007, 331,597 shares of our common stock were issued to Venture Bridge
Advisors in full satisfaction of $82,900 owed by the Company to Venture Bridge
Advisors. The shares were issued pursuant to Section 4(2) of the Securities
Act of 1933, as amended.
The
shares
were offered directly through the management. No underwriters were retained
to
serve as placement agents. 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 of Common Stock stating
that the shares of Common Stock have not been registered under the Act and
setting forth or referring to the restrictions on transferability and sale
of
the shares of Common Stock
On
July
30, 2007, we issued 566,217 common shares to Bombardier Pacific Ventures in
satisfaction of the principal amount of $141,554 owed by us to Bombardier
Pacific Ventures. David R. Koos, the Company’s Chairman of the Board of
Directors, President, CEO, Secretary, and Acting CFO, is the sole beneficial
owner of Bombardier Pacific Ventures. The offer and sale of the shares was
exempt from the registration provisions of the Securities Act of 1933, as
amended, by reason of Section 4(2) thereof.
The
shares
were offered directly through the management. No underwriters were retained
to
serve as placement agents. 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 of Common Stock stating
that the shares of Common Stock have not been registered under the Act and
setting forth or referring to the restrictions on transferability and sale
of
the shares of Common Stock
On
July
31, 2007, we issued 760,000 common shares for cash consideration of
$190,000. The net
proceeds of that sale, which were $190,000, will be utilized for general working
capital purposes. No underwriters were retained to serve as placement agents
for
the sale. These shares were sold directly through our management. No commission
or other consideration was paid in connection with the sale of these shares.
There was no advertisement or general solicitation made in connection with
this
offer and sale of shares. The offer and sale of these shares was exempt from
the
registration provisions of the Securities Act by reason of Section 4(2) thereof
and Rule 506 of Regulation D thereunder. Management made its determination
of
the availability of such exemption based upon the facts and circumstances
surrounding the offer and sale of these shares, including the representations
and warranties made by the purchasers and the fact that restrictive legends
were
placed on, and stop transfer orders placed against, the certificates for these
shares.
On
August
6, 2007, we issued 620,000 common shares to consultants as consideration for
services rendered. The offer and sale of the shares was exempt from the
registration provisions of the Securities Act of 1933, as amended, by reason
of
Section 4(2) thereof.
The
shares
were offered directly through the management. No underwriters were retained
to
serve as placement agents. 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 of Common Stock stating
that the shares of Common Stock have not been registered under the Act and
setting forth or referring to the restrictions on transferability and sale
of
the shares of Common Stock
On
August
6, 2007, we issued 440,000 common shares for cash consideration of $110,000.
The
net proceeds of that sale, which were $110,000, will be utilized for general
working capital purposes. No underwriters were retained to serve as placement
agents for the sale. These shares were sold directly through our management.
No
commission or other consideration was paid in connection with the sale of these
shares. There was no advertisement or general solicitation made in connection
with this offer and sale of shares. The offer and sale of these shares was
exempt from the registration provisions of the Securities Act by reason of
Section 4(2) thereof and Rule 506 of Regulation D thereunder. Management made
its determination of the availability of such exemption based upon the facts
and
circumstances surrounding the offer and sale of these shares, including the
representations and warranties made by the purchasers and the fact that
restrictive legends were placed on, and stop transfer orders placed against,
the
certificates for these shares.
As
of June
30, 2007 , we had $1,412 cash on hand and current
liabilities of $186,696 such liabilities consisting of Accounts Payable, Notes
Payable, Accrued Payroll Taxes, and Accrued Interest.
We
feel we
will not be able to satisfy its cash requirements over the next twelve months
and shall be required to seek additional financing.
At
this
time, we plan to fund our financial needs through operating revenues (which
cannot be assured) and, if required, through equity private placements of common
stock. (No plans, terms, offers or candidates have yet been established and
there can be no assurance that the company will be able to raise funds on terms
favorable to us or at all.)
During
the
period beginning January 1, 2007 and ending April 4, 2007, we sold 1,752,867
shares of common stock at a purchase price of $0.25 per share.
740,666
of
the Shares were sold for cash consideration of $185,166 to five
purchasers.
The
net
proceeds of the sale of shares sold for cash consideration, which were $185,166,
will be utilized for general working capital purposes. We estimate that these
net proceeds will not be sufficient to fulfill our capital needs through the
next twelve months.
27,033
of
the Shares were issued to two purchasers as consideration for services rendered
valued at $6,758.
985,
168
of the Shares were issued to Bombardier Pacific Ventures in full satisfaction
of
$246,292 owed by the Company to Bombardier Pacific Ventures on April 4,
2007.
Additionally,
during the quarter ended June 30, 2007, 331, 597 shares of our common
stock were issued to Venture Bridge Advisors in full satisfaction of $82,900
owed by the Company to Venture Bridge Advisors..
From
the
period beginning July 1, 2007 and ending August 6, 2007 we issued 1,060,000
common shares for aggregate cash consideration of $300,000. The net
proceeds of the sale of these shares sold for cash consideration, which were
$300,000, will be utilized for general working capital purposes. We estimate
that these net proceeds will not be sufficient to fulfill our capital needs
through the next twelve months.
Over
the
next 12 months and if we are successful in obtaining necessary licenses (as
described below), we anticipate opening our stem cell bank and marketing our
disposable stem cell / tissue management instruments
Prior
to
opening our stem cell banking facility, we will be required to register with
the
FDA under the Public Health Service Act to satisfy the regulatory requirements
involving the storage of stem cells and other tissue. These regulatory
requirements apply to all establishments engaged in the recovery, processing,
storage, labeling, packaging, or distribution of any Human Cells, Tissues,
and
Cellular and Tissue-Based Products (HCT/Ps) or the screening or testing of
a
cell or tissue donor. Stem cell banking is also subject to State Regulations.
the Company will also be required to obtain a California Blood Banks
and Biologics License for our facility.
Over
the
next twelve months and if we are successful in obtaining the
necessary additional financing and obtaining equipment and necessary additional
professional staff, we anticipate purchasing the following significant
laboratory equipment:
Equipment Estimated
Cost
Laboratory
information systems
|
|
$
|
30,000
|
|
Laminar
flow hoods (2 ea) 4ft
|
|
$
|
10,000
|
|
Sepax
Cell Separation Device
|
|
$
|
50,000
|
|
Blood
processing equipment
|
|
$
|
80,000
|
|
Bar
code labeling equipment
|
|
$
|
3,000
|
|
Tube
heat sealers (2 ea)
|
|
$
|
4,000
|
|
Bench
top centrifuges (2) refrigerated
|
|
$
|
12,000
|
|
Cell
Therapy Software
|
|
$
|
30,000
|
|
Cryo
Tracking Software
|
|
$
|
28,000
|
|
Cryo
Tracking Equipment
|
|
$
|
45,000
|
|
Hematology
analyzer
|
|
$
|
15,000
|
|
Flow
Cytometer
|
|
$
|
150,000
|
|
BacTec
Microbiology equipment
|
|
$
|
20,000
|
|
Small
equipment (lab set-up)
|
|
$
|
10,000
|
|
Microscope
|
|
$
|
5,000
|
|
CO2
Incubator
|
|
$
|
4,000
|
|
Lab
benches
|
|
$
|
30,000
|
|
Supplies
/ reagents*
|
|
$
|
100,000
|
|
Total
|
|
$
|
626,000
|
|
*
to be
reordered on an annual basis
We
can not
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.
If
we are
able to obtain the amount of additional financing that we require, we will
need
to undertake the following capital expenditures:
Equipment Estimated
cost
Computer
system / Lab & offices
|
|
$
|
100,000
|
|
Medical
Software
|
|
$
|
45,000
|
|
Misc
equipment
|
|
$
|
30,000
|
|
Phone
system
|
|
$
|
30,000
|
|
Back-up
generator
|
|
$
|
50,000
|
|
Security
system
|
|
$
|
20,000
|
|
Total
|
|
$
|
275,000
|
|
In
the
event that we are successful in obtaining the amount of the
additional financing that we require on acceptable terms, we currently
anticipate that we will need to add the following additional
employees during the twelve month period thereafter:
Title Estimated
Annual
Compensation
Director of
Labs
|
|
$
|
120,000
|
|
Director of
Quality & Assurance
|
|
$
|
75,000
|
|
Adm.
Director
|
|
$
|
75,000
|
|
Dir.
Of Engineering / Production
|
|
$
|
85,000
|
|
Lab
Tech
|
|
$
|
65,000
|
|
Lab
Tech
|
|
$
|
65,000
|
|
Customer
Service Representative.
|
|
$
|
45,000
|
|
Director
of Market & Sales
|
|
$
|
100,000
|
|
Facility
Manager / Receiving & Shipping
|
|
$
|
60,000
|
|
Support
Staff
|
|
$
|
50,000
|
|
Total
|
|
$
|
740,000
|
|
We
have
not undertaken any efforts to recruit any persons to fill any of the positions
shown above. We may face protracted difficulties in recruiting
individuals with sufficient experience and skills needed to fill these positions
and we can not assure that we will be successful in
obtaining the necessary persons at the compensations levels shown above or
that
we will not incur significant additional expenses to attract, relocate, and
retain any persons that we recruit.
These
time
frames and our objectives are subject to change as we review and re-evaluate
market conditions and opportunities.
Chang
G. Park, CPA, Ph. D.
t
371 E STREET t CHULA VISTA
t
CALIFORNIA
91910-2615t
t
TELEPHONE (858)722-5953
t FAX (858)
408-2695 t FAX (858)
764-5480
t E-MAIL
changgpark@gmail.com t
Report
of
Independent Registered Public Accounting Firm
To
the
Board of Directors and Stockholders
Bio-Matrix
Scientific Group, Inc.
(Formerly
Tasco International, Inc.)
(A
Development Stage Company)
We
have
audited the accompanying consolidated balance sheet of Bio-Matrix Scientific
Group, Inc. and subsidiary (Formerly Tasco International, Inc.) (A Development
Stage “Company”) as of September 30, 2006 and the related consolidated
statements of operations, changes in shareholders’ equity and cash flows for the
nine months then ended, and for the period from August 2,
2005 (inception) to September 30, 2006. These consolidated financial
statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audit. The consolidated financial statements of the
Company as of December 31, 2005, and for the period from August 2, 2005
(inception) to December 31, 2005 were audited by other auditors whose report
dated April 28, 2006, expressed an unqualified opinion on those
statements. Their report included an explanatory paragraph regarding
going concern.
We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis
for our opinion.
In
our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Bio-Matrix
Scientific Group, Inc. and subsidiary as of September 30, 2006, and the results
of its operation and its cash flows for the nine months then ended and for
the
period from August 2, 2005 (inception) to September 30, 2006 in conformity
with
U.S. generally accepted accounting principles.
The
consolidated financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 5 to the
consolidated financial statements, the Company’s losses from operations raise
substantial doubt about its ability to continue as a going
concern. The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/
Chang G. Park
CHANG
G.
PARK, CPA
October
22, 2007
San
Diego,
CA. 91910
Bio-Matrix
Scientific Group Inc.
|
|
(A
Development Stage Company)
|
|
Consolidated
|
|
Balance
Sheet
|
|
|
|
|
|
|
|
|
|
|
|
As
of September 30, 2006
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
Cash
|
|
$ |
22,641
|
|
Pre-paid
Expenses
|
|
|
20,207
|
|
|
|
|
|
|
Total
Current Assets
|
|
|
42,848
|
|
|
|
|
|
|
PROPERTY
& EQUIPMENT
|
|
|
340,557
|
|
|
|
|
|
|
Intangible
Assets/Technology
|
|
|
-
|
|
|
|
|
|
|
Total
Other Assets
|
|
|
29,127
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
$ |
412,532
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
Accounts
payable
|
|
$ |
91,079
|
|
Loans
from former parent
|
|
|
1,195,196
|
|
Due
To/ From New Parent
|
|
|
-
|
|
Notes
Payable
|
|
|
148,952
|
|
Accrued
Payroll Taxes
|
|
|
4,983
|
|
Accrued
Expenses
|
|
|
1,368
|
|
Accrued
payroll taxes
|
|
|
11,477
|
|
|
|
|
-
|
|
|
|
|
-
|
|
Total
Current Liabilities
|
|
|
1,453,055
|
|
|
|
|
-
|
|
LONG
TERM LIABILITIES
|
|
|
-
|
|
TOTAL
LIABILITIES
|
|
|
1,453,055
|
|
|
|
|
-
|
|
STOCKHOLDERS'
EQUITY
|
|
|
-
|
|
Preferred
Stock ($.0001 par value authorized
|
|
|
|
|
20,000,000
shares authorized; none issued and outstanding.)
|
|
|
|
|
Common
Stock, ($.0001 par value authorized
|
|
|
-
|
|
80,000,000
shares authorized; 13,385,000
|
|
|
|
|
shares
issued and outstanding as of September 30, 2006
|
|
|
1,339
|
|
Additional
paid in Capital
|
|
|
1,379,332
|
|
Deficit
accumulated during the development stage
|
|
|
(2,421,194 |
) |
|
|
|
|
|
|
|
|
|
|
Total
Stockholders' Equity (Deficit)
|
|
$ |
(1,040,523 |
) |
|
|
|
|
|
The
accompanying notes are an integral part of these Financial
statements
Bio-Matrix
Scientific Group, Inc.
|
|
(A
Development Stage company)
|
|
Statements
of Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inception
|
|
|
|
|
|
|
|
|
|
(August
2, 2005)
|
|
|
|
9
Months Ended
|
|
|
12
Months Ended
|
|
|
through
|
|
|
|
September
30,
|
|
|
December
31,
|
|
|
September
30,
|
|
|
|
2006
|
|
|
2005
|
|
|
2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$ |
-
|
|
|
$ |
-
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Revenues
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COSTS
AND EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
Research
and Development
|
|
|
75,453
|
|
|
|
135,387
|
|
|
|
210,840
|
|
General
and administrative
|
|
|
1,138,364
|
|
|
|
186,202
|
|
|
|
1,324,566
|
|
Depreciation
and amortization
|
|
|
742
|
|
|
|
140
|
|
|
|
882
|
|
Consulting
and professional fees
|
|
|
801,635
|
|
|
|
46,054
|
|
|
|
847,689
|
|
Impairment
of Intangibles
|
|
|
34,688
|
|
|
|
|
|
|
|
34,688
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Costs and Expenses
|
|
|
2,050,882
|
|
|
|
367,783
|
|
|
|
2,418,665
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
LOSS
|
|
|
(2,050,882 |
) |
|
|
(367,783 |
) |
|
|
(2,418,665 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER
INCOME & (EXPENSES)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Expense
|
|
|
(2,367 |
) |
|
|
(162 |
) |
|
|
(2,529 |
) |
Interest
Income
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Other
income
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Other Income & (Expenses)
|
|
|
(2,367 |
) |
|
|
(162 |
) |
|
|
(2,529 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
INCOME (LOSS)
|
|
$ |
(2,053,249 |
) |
|
$ |
(367,945 |
) |
|
$ |
(2,421,194 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC
AND DILUTED EARNINGS (LOSS) PER SHARE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC
AND DILUTED EARNINGS (LOSS) PER SHARE
|
|
$ |
(0.19 |
) |
|
$ |
(14.72 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED
AVERAGE NUMBER OF
|
|
|
|
|
|
|
|
|
|
|
|
|
COMMON
SHARES OUTSTANDING
|
|
|
10,960,440
|
|
|
|
25,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
accompanying notes are an integral part of these Financial
statements
Bio-Matrix
Scientific Group, Inc.
|
|
(A
Development Stage Company)
|
|
Consolidated
Statement of Changes in Stockholders' Equity
|
|
From
August 2, 2005 through September 30, 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
|
|
|
|
|
|
|
|
|
|
Common
|
|
|
Paid-in
|
|
|
Retained
|
|
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Earnings
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued to Parent
|
|
|
25,000
|
|
|
|
35,921
|
|
|
|
|
|
|
|
|
|
35,921
|
|
Net
Loss August 2, 2005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
through
September 30, 2005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,000 |
) |
|
|
(1,000 |
) |
Balance
September 30, 2005
|
|
|
25,000
|
|
|
|
35,921
|
|
|
|
-
|
|
|
|
(1,000 |
) |
|
|
34,921
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss October 1, 2005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
through
December 31, 2005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(366,945 |
) |
|
|
(366,945 |
) |
Balance
December 31, 2005
|
|
|
25,000
|
|
|
|
35,921
|
|
|
|
-
|
|
|
|
(367,945 |
) |
|
|
(332,024 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recapitalization
|
|
|
9,975,000
|
|
|
|
(34,921 |
) |
|
|
34,921
|
|
|
|
|
|
|
|
-
|
|
Stock
issued July 3, 2006 Tasco Merger
|
|
|
2,780,000
|
|
|
|
278
|
|
|
|
(278 |
) |
|
|
|
|
|
|
-
|
|
Stock
issued for services
|
|
|
305,000
|
|
|
|
31
|
|
|
|
759,719
|
|
|
|
|
|
|
|
759,750
|
|
Stock
issued for Compensation
|
|
|
300,000
|
|
|
|
30
|
|
|
|
584,970
|
|
|
|
|
|
|
|
585,000
|
|
Net
Loss January 1, 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
through
September 30, 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,053,249 |
) |
|
|
(2,053,249 |
) |
Balance
September 30, 2006
|
|
|
13,385,000
|
|
|
|
1,339
|
|
|
|
1,379,332
|
|
|
|
(2,421,194 |
) |
|
|
(1,040,523 |
) |
The
accompanying notes are an integral part of these Financial
statements
Bio-Matrix
Scientific Group, Inc
|
|
(A
Development Stage Company)
|
|
Consolidated
Statements of Cash Flows
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
August
2, 2005
|
|
|
|
|
|
|
|
|
|
(inception)
|
|
|
|
Year
Ended
|
|
|
Year
Ended
|
|
|
through
|
|
|
|
September
30,
|
|
|
December
31,
|
|
|
September
30,
|
|
|
|
2006
|
|
|
2005
|
|
|
2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
(loss)
|
|
$ |
(2,053,249 |
) |
|
$ |
(367,945 |
) |
|
$ |
(2,421,194 |
) |
Adjustments
to reconcile net loss to net cash (used in) provided
|
|
|
|
|
|
|
|
|
|
|
|
|
by
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
expense
|
|
|
742
|
|
|
|
140
|
|
|
|
882
|
|
Stock
issued for compensation
|
|
|
585,000
|
|
|
|
-
|
|
|
|
585,000
|
|
Stock
issued for services
|
|
|
759,750
|
|
|
|
-
|
|
|
|
759,750
|
|
Changes
in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
(Increase)
decrease in prepaid expenses
|
|
|
(15,074 |
) |
|
|
(5,133 |
) |
|
|
(20,207 |
) |
(Increase)
decrease in organizational costs
|
|
|
|
|
|
|
-
|
|
|
|
|
|
Increase
(Decrease) in Accounts Payable
|
|
|
67,878
|
|
|
|
23,201
|
|
|
|
91,079
|
|
Increase
(Decrease) in Accrued Expenses
|
|
|
15,799
|
|
|
|
2,029
|
|
|
|
17,828
|
|
(
Increase) Decrease in Deposits
|
|
|
-
|
|
|
|
(29,127 |
) |
|
|
(29,127 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash Provided by (Used in) Operating
Activities
|
|
|
(639,154 |
) |
|
|
(376,835 |
) |
|
|
(1,015,989 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases
of fixed assets
|
|
|
(237,874 |
) |
|
|
(103,565 |
) |
|
|
(341,439 |
) |
Purchases
of Intangible assets
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash Provided by (Used in) Investing
Activities
|
|
|
(237,874 |
) |
|
|
(103,565 |
) |
|
|
(341,439 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock issued for cash
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Additional
paid in Capital
|
|
|
-
|
|
|
|
35,921
|
|
|
|
35,921
|
|
Principal
borrowings on notes
|
|
|
148,952
|
|
|
|
-
|
|
|
|
148,952
|
|
Net
borrowings from related parties
|
|
|
750,450
|
|
|
|
444,746
|
|
|
|
1,195,196
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash Provided by (Used in) Financing
Activities
|
|
|
899,402
|
|
|
|
480,667
|
|
|
|
1,380,069
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Increase (Decrease) in Cash
|
|
|
22,374
|
|
|
|
267
|
|
|
|
22,641
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
at Beginning of Year
|
|
|
267
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
at End of Year
|
|
$ |
22,641
|
|
|
$ |
-
|
|
|
|
(22,641 |
) |
|
|
|
|
|
|
|
64,022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Cash
Flow Disclosures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
paid during period for interest
|
|
$ |
-
|
|
|
$ |
-
|
|
|
$ |
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
paid during period for taxes
|
|
$ |
800
|
|
|
$ |
800
|
|
|
$ |
800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
accompanying notes are an integral part of these Financial
statements
BIO-MATRIX
SCIENTIFIC GROUP, INC. AND SUBSIDIARY
(Formerly
Tasco International, Inc.)
(A
Development Stage Company)
Notes
to
consolidated Financial Statements
As
of
September 30, 2006
NOTE
1.
ORGANIZATION AND DESCRIPTION OF BUSINESS
Bio-Matrix
Scientific Group, Inc. (“Company”) was organized October 6, 1998, under the laws
of the State of Delaware as Tasco International, Inc.
The
Company is in the development stage. From October 6, 1998 to June 3, 2006 its
activities have been limited to capital formation, organization, and development
of its business plan to provide production of visual content and other digital
media, including still media, 360-degree images, video, animation and audio
for
the Internet.
On
July 3,
2006 the Company abandoned its efforts in the field of digital media production
when it acquired 100% of the share capital of Bio-Matrix Scientific Group,
Inc.,
a Nevada corporation, for consideration consisting of 10,000,000 shares of
the
common stock of the Company and the cancellation of 10,000,000 shares of the
Company owned and held by John Lauring.
As
a
result of this transaction, the former stockholder of Bio-Matrix Scientific
Group, Inc held approximately 80% of the voting capital stock of the Company
immediately after the transaction. For financial accounting purposes,
this acquisition was a reverse acquisition of the Company by Bio-Matrix
Scientific Group, Inc under the purchase method of accounting, and was treated
as a recapitalization with Bio-Matrix Scientific Group, Inc. as the
acquirer. Accordingly, the financial statements have been prepared to give
retroactive effect to August 2, 2005 (date of inception), of the reverse
acquisition completed on July 3, 2006, and represent the operations of
Bio-Matrix Scientific Group, Inc.
Bio-Matrix
Scientific Group, Inc. (“BMSG”) is a development stage company in the business
of designing, developing, and marketing medical devices, specifically disposable
instruments used in stem cell extraction and tissue transfer procedures and
operating cryogenic cellular storage facilities, specifically stem cell banking
facilities. BMSG is the Company's only subsidiary and operating entity at this
time.
NOTE
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A.
BASIS
OF ACCOUNTING
The
financial statements have been prepared using the accrual basis of accounting.
Under the accrual 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.
DEVELOPMENT STAGE
The
Company is a development stage company that devotes substantially all of its
efforts in the development of its plan to operate in the field of the
development, manufacture and marketing of medical devices and the operation
of
cellular storage facilities, specifically stem cell banking
facilities.
D.
CASH
EQUIVALENTS
The
Company considers all highly liquid investments with a maturity of three months
or less when purchased to be cash equivalents.
E.
PROPERTY AND EQUIPMENT
Property
and equipment are recorded at cost. Maintenance and repairs are expensed in
the
year in which they are incurred. Expenditures that enhance the value of property
and equipment are capitalized.
The
Company has depreciated property and equipment by the straight-line method
over
the useful life.
F.
INCOME
TAXES
Income
taxes are provided in accordance with Statement of Financial accounting
Standards No. 109 (SFAS 109), Accounting for Income Taxes. A deferred tax asset
or liability is recorded for all temporary differences between financial and
tax
reporting and net operating loss carry forwards. Deferred tax expense (benefit)
results from the net change during the year of deferred tax assets and
liabilities.
Deferred
tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all of the deferred
tax assets will not be realized. Deferred tax assets and liabilities are
adjusted for the effects of changes in tax laws and rates on the date of
enactment.
G.
BASIC
EARNINGS (LOSS) PER SHARE
In
February 1997, the FASB issued SFAS No. 128, "Earnings Per Share", which
specifies the computation, presentation and disclosure requirements for earnings
(loss) per share for entities with publicly held common stock. SFAS No. 128
supersedes the provisions of APB No. 15, and requires the presentation of basic
earnings (loss) per share and diluted earnings (loss) per share. The Company
has
adopted the provisions of SFAS No. 128 effective October 6, 1998
(inception).
Basic
net
loss per share amounts is computed by dividing the net income by the weighted
average number of common
shares
outstanding. Diluted earnings per share are the same as basic earnings per
share
due to the lack of dilutive items in the Company.
NOTE
3.
Property and equipment
Property
and equipment as of September 30, 2006 consists of the following:
|
2006
|
|
Acquisition
cost:
|
|
|
|
|
Production
Equipment
|
US
|
|
$ |
93,315
|
|
Production
Clean room
|
|
|
|
56,917
|
|
Leasehold
improvement
|
|
|
|
185,482
|
|
Office
equipment
|
|
|
|
3,057
|
|
Computer
|
|
|
|
2,668
|
|
Subtotal
|
|
|
|
341,439
|
|
Less
accumulated depreciation
|
|
|
|
882
|
|
Total
|
US
|
|
$ |
340,557
|
|
NOTE
4.
WARRANTS AND OPTIONS
On
July
17, 2006 the Company signed a public relations agreement with OTCFN which called
for the issuance of an option agreement for 200,000 options exercisable at
$4.50
per share. These options expire six months from the date of execution of the
agreement
NOTE
5.
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 $2,421,194
during the period from August 2, 2005 (inception) through September
30 2006. 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 through debt or equity offerings. Management
has
yet to decide what type of offering the Company will use or how much capital
the
Company will rise. There is no guarantee that the Company will be able to raise
any capital through any type of offerings.
NOTE
6.
INCOME TAXES
|
|
|
|
Deferred
tax assets:
|
|
|
|
Net
operating tax carry forwards
|
|
$
|
853,117
|
|
Other
|
|
|
-0-
|
|
Gross
deferred tax assets
|
|
|
853,117
|
|
Valuation
allowance
|
|
|
(853,117
|
)
|
|
|
|
|
|
Net
deferred tax assets
|
|
$
|
-0-
|
|
As
of
September 30 , 2006 the Company has a Deferred Tax Asset
of $853,117 completely attributable to net
operating loss carry forwards of approximately $2,459, 810 ( which
expire 20 years from the date the loss was incurred)
.consisting of
(a)
$38,616, of Net Operating Loss Carry forwards acquired in the reverse
acquisition and
(b)
2,
421, 194 attributable to BMSG.
Realization
of deferred tax assets is dependent upon sufficient future taxable income during
the period that deductible temporary differences and carry forwards are expected
to be available to reduce taxable income. The achievement of required future
taxable income is uncertain. In addition, the reverse acquisition of BMSG has
resulted in a change of control. Internal Revenue Code Sec 382 limits the amount
of income that may be offset by net operating loss (NOL) carryovers after an
ownership change. As a result, the Company has the Company recorded a valuation
allowance reducing all deferred tax assets to 0.
NOTE
7.
RELATED PARTY TRANSACTION
On
July 3,
2006, the Company acquired 100% of the share capital of BMSG from BMXP Holdings,
Inc., formerly named Bio Matrix Scientific Group, Inc. in a reverse acquisition
(See Note 11).
David
R.
Koos, the Chairman, CEO and President of the Company, is, and at the time of
the
acquisition was, the Chairman and Chief Executive Officer of BMXP Holdings
Inc.
as well as beneficial owner of 24% of the share capital of BMXP Holdings, Inc.
Brian Pockett, Vice President, COO and Director of the Company, is , and at
the
time of the acquisition was, Chief Operating Officer, Managing Director and
a
Director of BMXP Holdings Inc. as well as beneficial owner of 14% of the share
capital of BMXP Holdings, Inc.
NOTE
8.
STOCK TRANSACTIONS
Transactions,
other than employees' stock issuance, are in accordance with paragraph 8 of
SFAS
123. Thus issuances shall be accounted for based on the fair value of the
consideration received. Transactions with employees' stock issuance are in
accordance with paragraphs (16-44) of SFAS 123. These issuances shall be
accounted for based on the fair value of the consideration received or the
fair
value of the equity instruments issued, or whichever is more readily
determinable.
NOTE
9.
STOCKHOLDERS' EQUITY
The
stockholders' equity section of the Company contains the following classes
of
capital stock as of September 30, 2006:
*
Preferred stock, $ 0.0001 par value; 20,000,000 shares authorized: -0- shares
issued and outstanding.
*
Common
stock, $ 0.0001 par value; 80,000,000 shares authorized: 13,385,000 shares
issued and outstanding.
NOTE
10.
COMMITMENTS AND CONTINGENCIES
On
August
3, 2005, the Company entered into an agreement to lease a 14,562 square foot
facility for use as a cellular storage facility at a rate of $18,931 per month.
The lease is for a period of five years commencing on December 1, 2005 and
expiring on November 30, 2010. The lease contains a renewal option enabling
the
Company to renew the lease for an additional five years. There are no contingent
payments which the Company is required to make.
Lease
Commitments
2006
|
$
227,739
|
2007
|
$
234,562
|
2008
|
$
241,611
|
2009
|
$
248,864
|
2010
|
$
234,377
|
Since
the
signing of this lease, the Company has been improving this facility and has
made
substantial progress toward creating a cGMP (Good Manufacturing Practices)
and
cGTP (Good Tissue Practices) compliant facility specifically designed for the
cryogenic storage of stem cells, medical device engineering, stem cell research
and stem cell specimen processing laboratories.
The
Company expects to have the facility
licensed by the State of California and registered with the FDA. Concurrently,
the Company has been developing the policies and procedures needed for
processing stem cells for cryogenic storage.
NOTE
11.
ACQUISITION OF BIO-MATRIX SCIENTIFIC GROUP (NEVADA).
On
June
14, 2006, the Company and Bio-Matrix Scientific Group, Inc., a Delaware
corporation (the “Seller”) entered into a Stock Purchase Agreement (the
“Acquisition Agreement”).
Under
the
terms of the Acquisition Agreement and pursuant to a separate Escrow Agreement
between the Company and the Seller, The Company delivered to the Escrow Agent
the sum of 10,000,000 shares of the Company's common stock and other corporate
and financial records and the Seller delivered to the Escrow Agent 25,000 shares
of the common stock of BSMG., a Nevada corporation (the “Subsidiary”). As a part
of the transaction and pursuant to the terms of the Acquisition Agreement and
Stock Cancellation Agreement between the parties and John Lauring, the Company's
former Chairman and Chief Executive Officer, John Lauring returned 10,000,000
shares of the Company held and owned by him for cancellation.
On
June
14, 2006, the Company's officers and directors resigned their positions and
elected Dr. David R. Koos and Mr. Brian Pockett as in-coming Directors of the
Registrant. Following their election and the reconstruction of the Board of
Directors, the Registrant's Board of Directors elected Dr. David R. Koos as
Chief Executive Officer and President and Mr. Brian Pockett as Chief Operating
Officer and Vice President on June 19, 2006.
On
July 3,
2006, the Acquisition Agreement closed and Company acquired the twenty-five
thousand (25,000) shares of the Common Stock of the Subsidiary from the Seller
in exchange for the payment of the purchase price of 10,000,000 shares of the
common stock of the Company and the 10,000,000 shares of the Company owned
and
held by John Lauring were returned to the Company for cancellation. At that
time, the Escrow Agent released all stock certificates and certain other
corporate and financial books and records held pursuant to the Escrow
Agreement.
As
a
result of the Acquisition Agreement, the Subsidiary became a wholly owned
subsidiary of the Company and the Seller became the holder of approximately
78.24% of the outstanding common stock of the Registrant. For financial
accounting purposes, this acquisition was a reverse acquisition of the Company
by Bio-Matrix Scientific Group, Inc under the purchase method of accounting,
and
was treated as a recapitalization with Bio-Matrix Scientific Group, Inc. as
the
acquirer.
NOTE
12.
TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS STOCK
COMPENSATION PLAN
On
July
25, 2006 the Company adopted the TASCO HOLDINGS INTERNATIONAL, INC. 2006
EMPLOYEE AND CONSULTANTS STOCK COMPENSATIONPLAN (“the Plan”) which provides for
the issuance of up to 1,500,000 authorized but unissued shares of Common Stock
to eligible employees and consultants for services rendered (“Award Shares” or
“Awards”). These Award Shares were registered with the Securities and Exchange
Commission (“Commission”) on Form S-8 filed with the Commission on August 8,
2006. This Plan shall terminate on July 15, 2016.
Award
Shares may be issued to Eligible Persons (The term "Eligible Person" means
any
natural person who, at a particular time, is an employee, officer, director,
consultant, or advisor of the Company or any Parent or Subsidiary of the
Company; provided that, in the case of consultants or advisors such services
are
not in connection with the offer and sale of securities in a capital-raising
transaction and /or such services are not intended to directly or indirectly
promote or maintain a market for the Company 's securities) in any of the
following instances:
(i)
as a
bonus for services previously rendered and compensated, in which case the
recipient of the Award Shares shall not be required to pay any consideration
for
such Award Shares, and the value of such Award Shares shall be the Fair Market
Value of such Award Shares on the date of grant; or
(ii)
as
compensation for the previous performance or future performance of services
or
attainment of goals, in which case the recipient of the Award Shares shall
not
be required to pay any consideration for such Award Shares (other than the
prior
performance of his services or the assumption of the obligation of future
performance of services ).
The
Plan
is currently administered by the Plan Committee, which currently consists of
the
entire Board of Directors of the Company, and which has sole and absolute
discretion to interpret and determine the effect of all matters and questions
relating to this Plan.
The
Plan
Committee has the full and final authority in its sole discretion, at any time
and from time-to-time, subject only to the express terms, conditions and other
provisions of the Articles of Incorporation of the Company and this Plan, and
the specific limitations on such discretion set forth herein, to:
(i)
Designate the Eligible Persons or classes of Eligible Persons eligible to
receive Awards from among the Eligible Persons;
(ii)
Grant
Awards to such selected Eligible Persons or classes of Eligible Persons in
such
form and amount (subject to the terms of the Plan) as the Plan Committee shall
determine;
(iii)
Interpret the Plan, adopt, amend and rescind rules and regulations relating
to
the Plan, and make all other determinations and take all other action necessary
or advisable for the implementation and administration of the Plan;
and
(iv)
Delegate all or a portion of its authority to one or more directors of the
Company who are executive officers of the Company, subject to such restrictions
and limitations (such as the aggregate number of shares of Common Stock that
may
be awarded) as the Plan Committee may decide to impose on such delegate
directors.
As
of
September 30, 2006, 605,000 shares have been issued pursuant to the
Plan*
|
|
Number
of
|
|
|
|
Shares
|
|
Twelve
months ended September 30, 2006:
|
|
|
|
|
|
|
|
Granted
|
|
|
605,000 |
* |
|
|
|
|
|
Remaining
shares available for issuance under the Plan as of September 30,
2006
|
|
|
895,000
|
|
*Does
not
include 300,000 shares which were issued erroneously and subsequently
cancelled
NOTE
13.
SUBSEQUENT EVENTS
Between
August 24, 2006 and November 10, 2006, the Company borrowed $246,744 from
Bio-Technology Partners Business Trust. These loans carried interest at the
rate
of 10% and were due and payable in accordance with the following
schedule:
23-Aug-07
|
$23,683.00
|
|
24-Aug-07
|
$16,667.21
|
|
30-Aug-07
|
$7,077.59
|
|
30-Aug-07
|
$26,122.00
|
|
5-Sep-07
|
$787.50
|
|
7-Sep-07
|
$7,269.87
|
|
12-Sep-07
|
$1,900.00
|
|
13-Sep-07
|
$12,085.72
|
|
13-Sep-07
|
$6,128.93
|
|
21-Sep-07
|
$2,200.00
|
|
28-Sep-07
|
$6,075.50
|
|
28-Sep-07
|
$28,754.53
|
|
5-Oct-07
|
$23,751.63
|
|
11-Oct-07
|
$14,000.00
|
|
11-Oct-07
|
$6,120.57
|
|
12-Oct-07
|
$982.12
|
|
18-Oct-07
|
$7,186.15
|
|
8-Nov-07
|
$52,051.90
|
|
9-Nov-07
|
$3,900.00
|
|
On
October, 6, 2006 the Company issued 8,850 shares of common stock to consultants
for services.
On
October
11, 2006, the Company entered into an Agreement with BMXP Holdings, Inc (“BMXP”)
(“Agreement”) whereby the Company shall issue to BMXP 1,462,570 common shares of
the Company on or prior to October 12, 2006. This issuance will constitute
full
satisfaction of the amount of $1,191,619 plus any accrued and unpaid interest,
owed to BMXP by the Company.
As
further
consideration to BMXP for entering into this Agreement and abiding by the terms
and conditions thereof, at any time within a period of 365 days from the date
of
the Agreement, BMXP shall have the right, upon written demand to the Company
(“Registration Demand”), to cause the Company, within ninety days of the
Registration Demand, to prepare and file with the United States Securities
and
Exchange Commission (“SEC”) a registration statement to register under the
Securities Act of 1933, as amended, 11,462,570 common shares of the Company
(including the shares issued pursuant to this Agreement) owned by BMXP
(“Registerable Securities”), in order that the Registerable Securities may be
distributed to BMXP shareholders on a pro rata basis ( based on their ownership
of common shares of the Company as of a Record Date to be determined by BMXP),
and use its reasonable best efforts to cause that registration statement to
be
declared effective by the SEC. This right may also be exercised by any entity
to
which BMXP has transferred ownership of the Registerable Securities in trust
for
the BMXP Record Shareholders
On
October
11, 2006 the Company issued 43,000 shares of common stock to consultants for
services.
On
October
12, 2006, the Company shall issued 1,462,570 common shares of the Company to
BMXP in full satisfaction of the amount of $1,191,619 plus accrued and unpaid
interest, owed to BMXP Holdings, Inc. by the Company.
On
November 10, 2006 the Company issued 100,000 shares of common stock to
management pursuant to the TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE
AND
CONSULTANTS STOCK COMPENSATION PLAN
On
December 5, 2006 the Company issued 8,554 shares of common stock to a consultant
for services.
On
December 5, 2006 the Company issued 1,391,935 shares of common stock to
Bio-Technology Partners Business Trust which constituted full satisfaction
of
the amount of $246,744 plus accrued interest owed by the Company to
Bio-Technology Partners Business Trust.
On
December 14, 2006 the Company issued 68,700 shares of common stock to
management, employees and consultants for services pursuant to the TASCO
HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION
PLAN.
During
the
quarter ended March 31, 2007 the Company issued 143,920 shares of common stock
to management and employees as compensation pursuant to the TASCO HOLDINGS
INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION
PLAN.
During
the
quarter ended March 31, 2007 the Company issued 359,310 to consultants for
services pursuant to the TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE AND
CONSULTANTS STOCK COMPENSATION PLAN.
On
March
9, 2007 the Company issued 500,000 shares of common stock to Bio-Technology
Partners Business Trust which constituted full satisfaction of the amount of
$125,000 owed by the Company to Bio-Technology Partners Business
Trust.
During
the
quarter ended March 31, 2007 the Company issued 500,000 shares of common stock
for cash consideration of $125,000.
On
April
4, 2007, the Company issued 240,666 common shares for cash consideration of
$60,166.
On
April
4, 2007, the Company issued 27,033 Shares to two purchasers as consideration
for
services rendered valued at $6,758.
On
April
4, 2007 -- 985,168 shares of the Company’s common stock were issued
to Bombardier Pacific Ventures in full satisfaction of $246,292 owed by the
Company to Bombardier Pacific Ventures. David R. Koos, the Company’s Chairman of
the Board of Directors, President, CEO, Secretary, and Acting CFO, is the sole
beneficial owner of Bombardier Pacific Ventures
On
April
4, 2007, the Company issued 5,000 common shares to an employee as compensation
pursuant to the TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS
STOCK COMPENSATION PLAN.
On
April
4, 2007, the Company issued 5,000 common shares pursuant to the TASCO HOLDINGS
INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN as
consideration for services rendered valued at $3,750
On
May 22,
2007, the Company issued 15,000 common shares pursuant to the TASCO HOLDINGS
INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN as
consideration for services rendered valued at $9,300.
On
May 22,
2007 the Company issued 65,000 common shares to management pursuant to
the TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS
STOCK COMPENSATION PLAN
On June
3 , 2007 the Company adopted the BIO-MATRIX SCIENTIFIC GROUP, INC. 2007
EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN (“the Bio
Plan”) which provides for the issuance of up to 1,500,000 authorized but
unissued shares of Common Stock to eligible employees and consultants for
services rendered (“Award Shares” or “Awards”). These Award Shares were
registered with the Securities and Exchange Commission (“Commission”) on Form
S-8 filed with the Commission on June 5, 2007. This Bio Plan shall terminate
on
June 3, 2017.
Award
Shares may be issued to Eligible Persons (The term "Eligible Person" means
any
natural person who, at a particular time, is an employee, officer, director,
consultant, or advisor of the Company or any Parent or Subsidiary of the
Company; provided that, in the case of consultants or advisors such services
are
not in connection with the offer and sale of securities in a capital-raising
transaction and /or such services are not intended to directly or indirectly
promote or maintain a market for the Company ’s securities) in any of the
following instances:
(i)
as a
bonus for services previously rendered and compensated, in which case the
recipient of the Award Shares shall not be required to pay any consideration for
such Award Shares, and the value of such Award Shares shall be the Fair Market
Value of such Award Shares on the date of grant; or
(ii)
as
compensation for the previous performance or future performance of services
or
attainment of goals, in which case the recipient of the Award Shares shall
not
be required to pay any consideration for such Award Shares (other than the
prior
performance of his services or the assumption of the obligation of future
performance of services ).
The
Bio
Plan is currently administered by a Plan Committee, which currently consists
of
the entire Board of Directors of the Company, and which has sole and absolute
discretion to interpret and determine the effect of all matters and questions
relating to this Bio Plan.
The
Plan
Committee has the full and final authority in its sole discretion, at any time
and from time-to-time, subject only to the express terms, conditions and other
provisions of the Articles of Incorporation of the Company and this Bio Plan,
and the specific limitations on such discretion set forth herein,
to:
(i)
Designate the Eligible Persons or classes of Eligible Persons eligible to
receive Awards from among the Eligible Persons;
(ii)
Grant
Awards to such selected Eligible Persons or classes of Eligible Persons in
such
form and amount (subject to the terms of the Plan) as the Plan Committee shall
determine;
(iii)
Interpret the Plan, adopt, amend and rescind rules and regulations relating
to
the Plan, and make all other determinations and take all other action necessary
or advisable for the implementation and administration of the Plan;
and
(iv)
Delegate all or a portion of its authority to one or more directors of the
Company who are executive officers of the Company, subject to such restrictions
and limitations (such as the aggregate number of shares of Common Stock that
may
be awarded) as the Plan Committee may decide to impose on such delegate
directors.
On
June 7,
2007, the Company issued 32,040 common shares pursuant to the BIO-MATRIX
SCIENTIFIC GROUP, INC. 2007 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN
as
consideration for services rendered valued at $20,185.
On
June 7,
2007, the Company issued 5,000 common shares to an employee as compensation
pursuant to the TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS
STOCK COMPENSATION PLAN.
On
June
21, 2007, 331,597 shares of the Company’s common stock were issued to Venture
Bridge Advisors in full satisfaction of $82,900 owed by the Company to Venture
Bridge Advisors.
On
June
28, 2007 the Company issued 321,500 common shares pursuant to the BIO-MATRIX
SCIENTIFIC GROUP, INC. 2007 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN
as
consideration for services rendered valued at $176,825.
On
June
28, 2007 the Company issued 35,000 common shares to management pursuant to
the
BIO-MATRIX SCIENTIFIC GROUP, INC. 2007 EMPLOYEE AND CONSULTANTS STOCK
COMPENSATION PLAN
On
July
12, 2007, the Company issued 23,000 common shares to consultants pursuant to
the
BIO-MATRIX SCIENTIFIC GROUP, INC. 2007 EMPLOYEE AND CONSULTANTS STOCK
COMPENSATION PLAN as consideration for services rendered.
On
July
30, 2007, the Company issued 555,000 common shares to consultants pursuant
to
the BIO-MATRIX SCIENTIFIC GROUP, INC. 2007 EMPLOYEE AND CONSULTANTS STOCK
COMPENSATION PLAN as consideration for services rendered
On
July
30, 2007, the Company issued 100,000 common shares to management pursuant
to the BIO-MATRIX SCIENTIFIC GROUP, INC. 2007 EMPLOYEE AND CONSULTANTS STOCK
COMPENSATION PLAN
On
July
30, 2007, the Company issued 566,217 common shares to Bombardier Pacific
Ventures in satisfaction of the principal amount of $141,554 owed
by the Company to Bombardier Pacific Ventures. David R. Koos, the Company’s
Chairman of the Board of Directors, President, CEO, Secretary, and Acting CFO,
is the sole beneficial owner of Bombardier Pacific Ventures.
On
July
31, 2007, the Company issued 760,000 common shares for cash consideration of
$190,000.
On
August
6, 2007, the Company issued 620,000 common shares to consultants as
consideration for services rendered.
On
August
6, 2007, the Company issued 440,000 common shares for cash consideration of
$110,000
On
September 10, 2007, the Company issued 55,000 common shares to consultants
pursuant to the BIO-MATRIX SCIENTIFIC GROUP, INC. 2007 EMPLOYEE AND CONSULTANTS
STOCK COMPENSATION PLAN as consideration for services rendered
On
October
2, 2007, the Company issued 21,429 common shares to consultants pursuant to
the
BIO-MATRIX SCIENTIFIC GROUP, INC. 2007 EMPLOYEE AND CONSULTANTS STOCK
COMPENSATION PLAN as consideration for services rendered
On
October
4, 2007, the Company issued 28,752 common shares to consultants pursuant to
the
BIO-MATRIX SCIENTIFIC GROUP, INC. 2007 EMPLOYEE AND CONSULTANTS STOCK
COMPENSATION PLAN as consideration for services rendered
On
August
7, 2006 Armando C Ibarra, CPA (“Ibarra”), the independent accountant who was
engaged previously to audit our financial statements, declined to stand for
re-election as our independent accountant.
Ibarra's
report of our financial statements for the fiscal years ended September 30,
2004
and September 30, 2005 did not contain any adverse opinion or disclaimer of
opinion, nor was modified as to uncertainty, audit scope, or accounting
principles. The audit reports prepared by Ibarra for the fiscal years ending
September 30, 2005 and 2004 contained a paragraph with respect to the Company's
ability to continue as a going concern.
During
the
most recent fiscal years ended September 30, 2005 and 2004 and through the
date
of Ibarra's decision not to stand for re-election as our independent accountant,
there were no disagreements with Ibarra on any matter of accounting principles
or practices, financial statement disclosure, or auditing scope or procedure,
which, if not resolved to the former accountant's satisfaction, would have
caused it to make reference to the subject matter of the disagreement in
connection with its report.
In
addition, there were no "reportable events" as described in Item
304(a)(1)(iv)(B)1 through 3 of Regulation S-B that occurred within the Company's
most recent fiscal year and the subsequent interim period preceding Ibarra's
decision not to stand for re-election.
Ibarra's
decision not to stand for re-election was not recommended or approved by the
Board of Directors, nor was such approval or recommendation
required.
(b)
Effective on August 7, 2006 the firm of Chang G. Park, CPA (“Park”) was engaged
to serve as the new principal accountant to audit the Company’s financial
statements.
The
engagement of Park as the new principal accountant to audit the Company's
financial statements was approved by the Board of Directors of the
Company.
During
the
Company's most recent fiscal year, and the subsequent interim period prior
to
engaging Park, neither the Company (nor someone on its behalf) consulted Park
regarding any matter.
ITEM
8A-
CONTROLS AND PROCEDURES
Based
on
his evaluation as of September 30, 2006,, our principal executive officer and
principal financial officer, David Koos, has concluded that our disclosure
controls and procedures as defined in Rules 13a-14(c) and 15d-14(c) under the
Securities Exchange Act of 1934 (the Exchange Act) are effective to ensure
that
information required to be disclosed by us in reports that we file or submit
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in Securities and Exchange Commission rules and
forms.
There
were
no significant changes in our internal controls or in other factors that could
significantly affect these controls subsequent to the date of their evaluation
and up to the filing date of this Annual Report on Form 10-KSB. There were
no
significant deficiencies or material weaknesses, and therefore there were no
corrective actions taken.
It
should
be noted that any system of controls, however well designed and operated, can
provide only reasonable, and not absolute, assurance that the objectives of
the
system are met. In addition, the design of any control system is based in part
upon certain assumptions about the likelihood of future events. Because of
these
and other inherent limitations of control systems, there can be no assurance
that any design will succeed in achieving its stated goals under all potential
future conditions, regardless of how remote.
ITEM
8B -
OTHER INFORMATION
Not
Applicable
Directors
and executive officers
The
following table sets forth certain information regarding the current Directors
and Executive Officers of the Company as of December 12, 2006. Each
director holds office from election until the next annual meeting of
stockholders or until their successors is duly elected and
qualified.
Name
|
|
|
Age
|
|
|
Position
|
|
David
R. Koos
|
|
|
49
|
|
|
Chairman
of the Board of Directors, President, CEO, Secretary, and Acting
CFO
|
|
Brian
Pockett
|
|
|
53
|
|
|
Vice
President and COO, Director
|
|
David
R.
Koos, PhD & DBA (49) - Chairman and CEO, Secretary, Acting
CFO
Dr. Koos
has served as our CEO, President, Secretary, and Acting CFO since June 19,
2006,
and as Chairman of our board of Directors since June 14, 2006.Over the past
five
years, Dr. Koos either is currently, or has previously been employed as:
Chairman, Chief Executive Officer, Secretary & Acting Chief Financial
Officer of both BMXP Holdings, Inc. and BMSG (December 6, 2004 to Present)
,
Managing Director & President of Cell Source Research Inc.(December 5, 2001
to Present) Managing Director & President of Venture Bridge Inc.( November
21, 2001 to Present) Board Member, Chief Financial Officer& Secretary of
Cell Bio-Systems Inc., a New York corporation currently operating under the
name
Franklin Scientific, Inc. (July 17, 2003 to December 1,2003) and as a Registered
Representative of Amerivet Securities, Inc. (March 31, 2004 to Present and
also
from November, 2000 to May, 2002). In addition, Dr. Koos has been involved
with
investment banking, venture capital, and investor relations for the past 20
years. He has worked with several major Wall Street Investment Banks and was
a
Vice-President of Investments with Sutro & Co., Everen Securities and Dean
Witter. Dr. Koos holds the following securities licenses: NASD Series 7 (General
Securities), and Series 24 (Securities Managing Principal).
Dr.
Koos'
educational background includes two doctoral degrees. His first doctorate is
a
Doctor of Philosophy degree (PhD) in Economic Sociology (2003). Dr. Koos' PhD
studies in Sociology were done at the University of California, Riverside,
which
he left prior to completing his Ph.D. degree.
Dr.
Koos
completed his PhD studies at Atlantic International University (a non-accredited
institution based in Honolulu, Hawaii) where he was allowed 120 units in
transfer credits in support of being admitted on an ABD (All But Dissertation)
basis for a joint PhD/DBA program. Subsequent to the transfer credits, he
completed an additional 91 units at Atlantic International University. His
dissertation for his Ph.D. in Sociology, “Examining the Efficacy of
Telemarketing Fundraisers as a Venture Capital Alternative in the Biotechnology
Industry.” focused on applied research in Telemarketing and Venture Capital
Fundraising and is available directly through Atlantic International University.
His second doctorate, a Doctor of Business Administration (DBA),
specialized in Corporate Finance (2003), focusing on the process of Public
Trading, Direct Public Offerings and Synthetic Reverse Mergers. Both of these
degrees are the result of studies and research completed through Atlantic
International University (a non-accredited institution).The dissertation for
Dr.
Koos' D.B.A. in Finance was titled “De-Coupling A Reverse Merger to facilitate a
Direct Public Offering's Time to Market: A Case Study Testing the value of
a Synthetic Reverse Merger in Achieving Public Trading Status”. Prior to
obtaining these two doctoral degrees, Dr. Koos received a Master of Arts degree
in the Economic Sociology from the University of California, Riverside,
California (1983). David R. Koos, our Chief Executive Officer, has been the
subject of the following securities related regulatory actions:
On
June 26
- 28 of 2001 the New York Stock Exchange (NYSE) held an administrative hearing
panel regarding Mr. David Koos' handling of a client's account while he was
at
Everen Securities. Mr. Koos has not been employed by Everen over the last five
years. The panel found Mr. Koos had engaged in excessive, unsuitable and
discretionary trading in a client's account. The NYSE found Mr. Koos
guilty of the aforementioned and suspended him from association with the NYSE
and its affiliates for a period of 9 months. On appeal, the Enforcement
Division requested the suspension be 18 months, which was upheld by the Appeal
Board.
The
suspension began on May 10, 2002 at the close of business and lasted until
November 10, 2003. The NYSE took no further action at the end of the suspension.
David Koos' securities licenses (NASD Series 7 and Series 24 ) were
re-instated with Amerivet Securities Inc. on March 31, 2004.
Amerivet's business is currently on hold as the CEO is on deployment
in Iraq.
On
December 7, 1999 First Union Securities (formerly known as Everen Securities)
and Thomas Monahan settled with Dr. Jan Yanda for the sum of $55,000.The claim
made by Dr. Yanda to the NASD (Case # 98-03797) was that Mr. Monahan and his
then partner David Koos mishandled her account in failing to correctly advise
her on the liquidation of an annuity contract. Dr. Yanda asserted that she
was
not aware of any tax consequences in withdrawing funds from her annuity.
Mr. Koos was named as a result of being in a then partnership with Mr.
Monahan while they worked together at Everen Securities. In the terms of the
settlement, $55,000 was paid to Dr. Yanda by First Union Securities (formerly
Everen Securities) At the time the claim was filed, David Koos was no longer
working for First Union Securities (formerly known as Everen Securities).
The matter was fully settled by First Union Securities (formerly Everen
Securities) and there are no outstanding issues in this matter.
Education:
DBA
-
Finance (December 2003)
Atlantic
International University
Non-Accredited
University
PhD
-
Sociology (Economic Sociology - September 2003)
Atlantic
International University
Non-Accredited
University
MA
-
Sociology (Economic Sociology - June 1983)
University
of California - Riverside, California
Fully
Accredited
Five
Year
Employment History:
Position:
|
Company
Name:
|
Employment
Dates:
|
|
|
|
Chairman,
President, CEO and Acting CFO
|
Bio-Matrix
Scientific Group,
Inc.
|
June
14, 2006 (Chairman) to Present
June
19, 2006 (President, CEO and Acting CFO)
June
19, 2006(Secretary) to Present
|
|
|
|
Chairman,
Chief Executive Officer, Secretary &Acting Chief Financial
Officer
|
Frezer
Inc.
|
May
2, 2005 to Present
|
|
|
|
Chairman,
Chief Executive Officer, Secretary &Acting Chief Financial
Officer
|
BMXP
Holdings, Inc.
BMSG
|
December
6, 2004 to Present
|
|
|
|
Managing
Director & President
|
Cell
Source Research Inc.
|
December
5, 2001 to Present
|
|
|
|
Managing
Director & President
|
Venture
Bridge Inc.
|
November
21, 2001 to Present
|
|
|
|
Member
of the Board of Directors, Chief Financial Officer &
Secretary
|
Cell
Bio-Systems Inc.
(New
York)
|
July
17, 2003 to December 1, 2003
|
|
|
|
Registered
Representative
|
Amerivet
Securities Inc.*
|
March
31, 2004 to Present
(Previously
employed: November, 2000 to
May,2002)
|
*
Amerivet
Securities Inc. is currently not active as the Chief Executive Officer is on
deployment in Iraq through the U.S. Army Reserves.
Brian
Pockett (53) - Managing Director and COO
Brian
Pockett has served as our Vice President and COO since June 19, 2006 and as
a
Director since June 14, 2006. Mr. Pockett has over twenty-nine years of
professional experience in operations, marketing, sales, financial and grant
development. Prior to assuming his positions with us, Mr. Pockett founded
PD&C, a private consulting firm and has served as a consultant to some of
the largest companies in North America including Disney, SONY, Nintendo, Acclaim
Entertainment and UFO. Mr. Pocket has not been affiliated with
PD&C during the past five years. The scope of client projects expanded
into the areas of global distributing, product development, commercialization,
investment and intellectual properties. Mr. Pockett served as an Executive
Vice
President of Operations for Metropolis Publications and as Sr. Vice President
of
Marketing and Sales for Slawson Communications.
Education:
Ordination
- Ordained Minister
Crestmont
College - Rancho Palos Verdes, CA (Accredited thru Azusa Pacific
University)
June
11,
1979
Advanced
Teachers Training Certificate
Crestmont
College - Rancho Palos Verdes, CA
Evangelical
Teachers Training Association
June
11,
1979
Associate
of Arts - Business
Azusa
Pacific University - Azusa, CA
June
1977
Christian
Education Administration Certificate
George
Fox
College - Portland, OR
June
1983
Five
Year
Employment History:
Position:
|
Company
Name:
|
Employment
Dates:
|
Vice
President, COO and Director
|
Bio-Matrix
Scientific Group, Inc.
|
June
19, 2006 (Vice President and COO) to Present
June
14, 2006 (Director) to Present
|
Managing
Director & Chief Operating Officer
|
Frezer
Inc.
|
May
2, 2005 to Present
|
Managing
Director & Chief Operating Officer
|
BMXP
Holdings, Inc.
BMSG
|
December
6, 2004 to Present
|
Business
Development Consultant
|
Cell
Bio-Systems Inc.
(New
York)
|
April
1, 2003 to November 30, 2004
|
Sales
& Marketing Consultant
|
North
County Times
|
July
1, 2002 to March 15, 2003
|
Independent
Magazine Contractor
|
DaVinci
|
January
1, 2000 to June 30, 2002
|
Independent
Magazine Contractor
Independent
Magazine Contractor
|
Digital
Diner
Shock
Waves
|
January
1, 2000 to June 30, 2002
January
1, 2000 to June 30, 2002
|
Significant
Employees
Geoffrey
O'Neill, PhD (57) - Chief Scientific Advisor
Since
August 9, 2006, Dr. Geoffrey O'Neil, is an independent contractor and not as
an
employee, has served as our Chief Scientific Advisor.
Dr.
Geoffrey O'Neill received his Ph.D. in Immunology from the University of Glasgow
in 1973.
In
1974,
he undertook post-doctoral training under the guidance of Dr. Robert A Good
(who
performed the first bone marrow transplantation in a patient with
immunodeficiency) at Memorial Sloan-Kettering Cancer Center in New York. Dr.
O'Neill's field of study at Sloan-Kettering was transplantation immunobiology.
Dr. O'Neill was a Research Fellow with Dr. Robert A. Good from 1974 - 1976.
No
formal certification of this training was provided to any of Dr. Good's
Fellows.
In
1982,
Dr. O'Neill was the recipient of the Jean Julliard Prize for Outstanding
Research. This Award was granted by the International Society of Blood
Transfusion, presented in Budapest, Hungary. The International Society of Blood
Transfusion is a scientific society, founded in 1935 which brings together
professionals involved in blood transfusion and transfusion medicine from more
than 85 countries.
In
April
1975, Dr. O'Neill was awarded the JM Foundation Award from the JM Foundation;
a
New York based philanthropic organization that makes grants (awards) to various
organizations and institutions. The JM Foundation award is given to post
doctoral trainees by merit of their research. This award, which was given to
Dr,
O'Neill while a post doctoral fellow at Memorial Sloan-Kettering Cancer center,
resulted in a grant to Memorial Sloan-Kettering Cancer Center.
Dr.
O'Neill's academic career covers tenures as Visiting Professor, NIH-RCMI
Program, University of Puerto Rico, School of Medicine, San Juan; Associate
Professor of Pathology and Assistant Medical Director, Transfusion Medicine,
University of Miami, Jackson Memorial Hospital; Visiting Professor, Institute
of
Immunology, University of Munich, FRG; Associate Professor of Graduate Medical
Sciences, Cornell University School of Medicine New York. Dr. O'Neill has
authored and co-authored over 90 publications of which 87 primarily focused
on
the field of bone marrow transplantation and 3, co- authored by Dr.
O'Neill, primarily focused on stem cell biology. Three publications
were co-authored with Dr. Good, of which one primarily focused on stem cell
biology Dr. O’Neill was employed by Cryo-Cell International as Laboratory and
Scientific Director from April 1999 through July 2003. Dr. O'Neil also
currently serves as President of Frezer, Inc and BMXP Holdings,
Inc.
Education:
Ph.D.
-
Immunology (1973)
University
of Glasgow
Glasgow,
Scotland
B.Sc.
-
Microbiology (1970)
University
of Glasgow
Glasgow,
Scotland
Five
Year
Employment History:
Position:
|
Company
Name:
|
Employment
Dates:
|
Chief
Scientific Advisor
|
Bio-Matrix
Scientific Group, Inc.
|
August
9, 2006 to present
|
President
|
Frezer
Inc., San Diego , CA
|
May
2, 2005 to present
|
President
|
BMXP
Holdings, Inc.. San Diego, CA
|
March,
2005 to present
|
Consultant
in Biotechnology
|
Self
employed, Tarpon Springs FL
|
July,
2004 to March, 2005
|
Laboratory
and Scientific Director
|
Cryo-Cell
International Inc, Clearwater, FL
|
April,
1999 to June, 2004
|
Publications
co- authored by Dr. O'Neill primarily focused on stem cell biology
1.Kagan,
W. A.; O'Neill, G. J.; Incefy, G. S.; Goldstein, G.; Good, R. A.: Induction
of human granulocyte differentiation in vitro by ubiquitin and
thymopoietin. Blood 50:275, 1977
2.
O'Neill
GJ, Yang SY, DuPont B: Two HLA-linked loci controlling human complement C4.
Proc. Natl. Acad Sci. USA 75:5165, 1978
3.
Maharaj
D, Lewis-Ximenez, Riley R, Gomez O, and O’Neill GJ: Serum G-CSF levels in
patients undergoing G-CSF/chemotherapy mobilized peripheral stem cell harvest.
Blood 84:1380, 1994
All
journals which have published articles authored or co- authored by
Dr.O'Neill.
Immunology
Annals
of
Immunology
Journal
of
Reticuloendothelial Society
Journal
of
Immunology
Blood
Cellular
Immunology
Proceedings
of the National Academy of Science (USA)
Nature
Transplantation
Proceedings
New
England Journal of Medicine
Transplantation
Immunobiology
Tissue
Antigens
American
Journal of Human Genetics
Clinical
Immunology and Immunopathology
Family
Relationships
There
are
no family relationships between Dr. Koos, Mr. Pockett and Dr.
O'Neill.
Committees:
Plan
Committee, TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS
STOCK COMPENSATION PLAN
On
July
25, 2006 we adopted the TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE AND
CONSULTANTS STOCK COMPENSATION PLAN(“the Plan”) which provides for the issuance
of up to 1,500,000 authorized but unissued shares of Common Stock to eligible
employees and consultants for services rendered (“Award Shares” or “Awards”).
These Award Shares were registered with the Securities and Exchange Commission
(“Commission”) on Form S-8 filed with the Commission on August 8, 2006. This
Plan shall terminate on July 15, 2016.
Award
Shares may be issued to Eligible Persons (The term "Eligible Person" means
any
natural person who, at a particular time, is an employee, officer, director,
consultant, or advisor of us or any Parent or Subsidiary of us (provided that,
in the case of consultants or advisors such services are not in connection
with
the offer and sale of securities in a capital-raising transaction and /or such
services are not intended to directly or indirectly promote or maintain a market
for the Company 's securities) in any of the following instances:
(i)
as a
bonus for services previously rendered and compensated, in which case the
recipient of the Award Shares shall not be required to pay any consideration
for
such Award Shares, and the value of such Award Shares shall be the Fair Market
Value of such Award Shares on the date of grant; or
(ii)
as
compensation for the previous performance or future performance of services
or
attainment of goals, in which case the recipient of the Award Shares shall
not
be required to pay any consideration for such Award Shares (other than the
prior
performance of his services or the assumption of the obligation of future
performance of services ).
The
Plan
is currently administered by the Plan Committee, which currently consists of
the
entire Board of Directors of the Company, and which has sole and absolute
discretion to interpret and determine the effect of all matters and questions
relating to this Plan.
The
Plan
Committee has the full and final authority in its sole discretion, at any time
and from time-to-time, subject only to the express terms, conditions and other
provisions of the Articles of Incorporation of the Company and this Plan, and
the specific limitations on such discretion set forth herein, to:
(i)
Designate the Eligible Persons or classes of Eligible Persons eligible to
receive Awards from among the Eligible Persons;
(ii)
Grant
Awards to such selected Eligible Persons or classes of Eligible Persons in
such
form and amount (subject to the terms of the Plan) as the Plan Committee shall
determine;
(iii)
Interpret the Plan, adopt, amend and rescind rules and regulations relating
to
the Plan, and make all other determinations and take all other action necessary
or advisable for the implementation and administration of the Plan;
and
(iv)
Delegate all or a portion of its authority to one or more directors of the
Company who are executive officers of the Company, subject to such restrictions
and limitations (such as the aggregate number of shares of Common Stock that
may
be awarded) as the Plan Committee may decide to impose on such delegated
directors.
Plan
Committee, BIO-MATRIX SCIENTIFIC GROUP, INC. 2007 EMPLOYEE AND
CONSULTANTS STOCK COMPENSATION PLAN
On June
3 , 2007 we adopted the BIO-MATRIX SCIENTIFIC GROUP, INC. 2007
EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN (“the Bio
Plan”) which provides for the issuance of up to 1,500,000 authorized but
unissued shares of Common Stock to eligible employees and consultants for
services rendered (“Award Shares” or “Awards”). These Award Shares were
registered with the Securities and Exchange Commission (“Commission”) on Form
S-8 filed with the Commission on June 5, 2007. This Bio Plan shall terminate
on
June 3, 2017.
Award
Shares may be issued to Eligible Persons (The term "Eligible Person" means
any
natural person who, at a particular time, is an employee, officer, director,
consultant, or advisor of us or any Parent or Subsidiary of us ( provided that,
in the case of consultants or advisors such services are not in connection
with
the offer and sale of securities in a capital-raising transaction and /or such
services are not intended to directly or indirectly promote or maintain a market
for our securities) in any of the following instances:
(i)
as a
bonus for services previously rendered and compensated, in which case the
recipient of the Award Shares shall not be required to pay any consideration
for
such Award Shares, and the value of such Award Shares shall be the Fair Market
Value of such Award Shares on the date of grant; or
(ii)
as
compensation for the previous performance or future performance of services
or
attainment of goals, in which case the recipient of the Award Shares shall
not
be required to pay any consideration for such Award Shares (other than the
prior
performance of his services or the assumption of the obligation of future
performance of services ).
The
Bio
Plan is currently administered by a Plan Committee, which currently consists
of
our entire Board of Directors , and which has sole and absolute discretion
to
interpret and determine the effect of all matters and questions relating to
this
Bio Plan.
The
Plan
Committee has the full and final authority in its sole discretion, at any time
and from time-to-time, subject only to the express terms, conditions and other
provisions of our Articles of Incorporation and this Bio Plan, and the specific
limitations on such discretion set forth herein, to:
(i)
Designate the Eligible Persons or classes of Eligible Persons eligible to
receive Awards from among the Eligible Persons;
(ii)
Grant
Awards to such selected Eligible Persons or classes of Eligible Persons in
such
form and amount (subject to the terms of the Plan) as the Plan Committee shall
determine;
(iii)
Interpret the Plan, adopt, amend and rescind rules and regulations relating
to
the Plan, and make all other determinations and take all other action necessary
or advisable for the implementation and administration of the Plan;
and
(iv)
Delegate all or a portion of its authority to one or more of our
directors who are our executive officers , subject to such
restrictions and limitations (such as the aggregate number of shares of Common
Stock that may be awarded) as the Plan Committee may decide to impose on such
delegate directors.
Audit
Committee.
We
do not
have a financial expert serving on our Board of Directors. We are currently
in
the process of establishing an Audit Committee and are also in the process
of
locating, nominating, and appointing to our Board of Directors one or more
individuals who would qualify as Audit Committee Financial Experts, as that
term
is defined in Regulation SB Item 401, to serve on the Audit Committee when
established. Currently, the entire Board of Directors serves as the Audit
Committee.
Involvement
in certain legal proceedings.
During
the
past five years, no current officer, director or control person of Bio Matrix
Scientific Group, Inc. has:
·Any
bankruptcy petition filed by or against any business of which such person was
a
general partner or executive officer either at the time of the bankruptcy or
within two years prior to that time;
·Any
conviction in a criminal proceeding or being subject to a pending criminal
proceeding (excluding traffic violations and other minor offenses);
·Being
subject to any order, judgment, or decree, not subsequently reversed, suspended
or vacated, of any
court
of
competent jurisdiction, permanently or temporarily enjoining, barring,
suspending or otherwise limiting his involvement in any type of business,
securities or banking activities; and
·Being
found by a court of competent jurisdiction (in a civil action), the Commission
or the Commodity Futures Trading Commission to have violated a federal or state
securities or commodities law, and the judgment has not
been
reversed, suspended, or vacated.
Director's
Compensation.
We
do not
provide any Director's Compensation at this time.
Code
of
Ethics.
We
have
adopted a Code of Business Conduct and Ethics (the “Code”) that applies to our
Directors, officers and employees. The Code is filed as Exhibit A of our
Information Statement Pursuant to Section 14(c) of the Securities Exchange
Act
of 1934 filed with the Commission on August 11, 2006 . A written copy of the
Code will be provided upon request at no charge by writing to our Chief
Executive Officer, David Koos, at:
DR.
DAVID
KOOS
BIO
MATRIX
SCIENTIFIC GROUP, INC.
8885
REHCO
RD.SAN DIEGO CA 92121.
Section
16(a) Beneficial Ownership Compliance.
Section
16(a) Beneficial Ownership Compliance.
Section
16(a) of the Securities Exchange Act of 1934, as amended, requires our executive
officers and directors and persons who own more than 10% of a registered class
of our equity securities to file with the Securities and Exchange Commission
initial statements of beneficial ownership, reports of changes in ownership
and
annual reports concerning their ownership of our common stock and other equity
securities, on Forms 3, 4 and 5 respectively. Executive officers, directors
and
greater than 10% shareholders are required by the Securities and Exchange
Commission regulations to furnish us with copies of all Section 16(a)reports
they file. Such persons are further required by SEC regulation to furnish us
with copies of all Section 16(a) forms (including Forms 3, 4 and 5) that they
file. Based solely on our review of the copies of such forms received by us
with
respect to fiscal year 2006, or written representations from certain reporting
persons, we believe all of our directors and executive officers met all
applicable filing requirements, except as described in this
paragraph:
Brian
Pockett, our Director and COO, filed one late Form 4 on October 27,
2004
10-
EXECUTIVE COMPENSATION
The
following table sets forth information relating to the annual and long-term
compensation for the fiscal year ended September 30, 2006:
SUMMARY
COMPENSATION TABLE
|
|
|
Name
and principal position
|
Year
|
Salary($)
|
Bonus($)
|
Stock
Awards($)
(a)
|
Option
Awards($)
|
Non-Equity
Incentive Plan
Compensation
($)
|
Nonqualified
Deferred
Compensation
Earnings
($)
|
All
Other
Compensation
($)
|
Total
($)
|
Dr.
David Koos
Chairman,
CEO and President
|
October
1, 2005 to September 30, 2006
|
0
|
0
|
$292,500
|
0
|
0
|
0
|
0
|
$292,500
|
Mr.
Brian Pockett
Vice
President, COO and Director
|
October
1, 2005 to September 30, 2006
|
0
|
0
|
$292,500
|
|
|
0
|
0
|
$292,500
|
(a)
issued
pursuant to TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS
STOCK COMPENSATION PLAN
Currently,
neither of Dr. David Koos or Mr. Brian Pockett is party to an employment
agreement with us.
The
following table sets forth information as of the close of business onOctober
26,
2007, concerning shares of our common stock beneficially owned by (i)each
director; (ii) each named executive officer; (iii) by all directors and
executive officers as a group; and (iv) each person known by the Company to
own
beneficially more than 5% of the outstanding shares of common
stock.
Title
of Class
|
Name
and Address of Beneficial Owner
|
Amount
and Nature of Beneficial Owner
|
Percent
of Class
|
Common
|
David
R. Koos (a)
C/o
Bio-Matrix Scientific Group, Inc
8885
REHCO RD.SAN DIEGO CA92121
|
12,640,738
|
55
|
Common
|
Brian
Pockett
(a)
C/o
Bio-Matrix Scientific Group, Inc
8885
REHCO RD.SAN DIEGO CA92121
|
11,639,530
|
50.2
|
Common
|
BMXP
Holdings Shareholder Business Trust
|
11,462,570
|
49.5
|
Common
|
All
Officers and Directors
As
a
Group(a)
|
12,817,698
|
55
|
(a)Includes
11,462,570 Common Shares owned by BMXP Holdings Shareholder Business
Trust. David R. Koos is the Trustee of BMXP Holdings Shareholder
Business Trust. as well as beneficial owner of 24% of the BMSN common shares
owned by the Trust. Brian Pockett is a beneficial owner of 14% of the BMSN
common shares owned by the Trust.
On
June
14, 2006, we and Bio-Matrix Scientific Group, Inc., a Delaware corporation
currently named BMXP Holdings, Inc.(the “Seller”) entered into a Stock Purchase
Agreement (the “Acquisition Agreement”).
On
June
14, 2006, our officers and directors resigned their positions and elected Dr.
David R. Koos and Mr. Brian Pockett as in-coming Directors of the Registrant.
Following their election and the reconstruction of the Board of Directors,
the
Registrant's Board of Directors elected Dr. David R. Koos as Chief Executive
Officer and President and Mr. Brian Pockett as Chief Operating Officer and
Vice
President on June 19, 2006
Under
the
terms of the Acquisition Agreement and pursuant to a separate Escrow Agreement
between us and the Seller, We delivered to the Escrow Agent the sum of
10,000,000 shares of the Company's common stock and other corporate and
financial records and the Seller delivered to the Escrow Agent 25,000 shares
of
the common stock of BSMG, a Nevada corporation and wholly owned subsidiary
of
the Seller. As a part of the transaction and pursuant to the terms of the
Acquisition Agreement and Stock Cancellation Agreement between the parties
and
John Lauring, our former Chairman and Chief Executive Officer, John Lauring
returned 10,000,000 shares of the Company held and owned by him for
cancellation.
On
July 3,
2006, the Acquisition Agreement closed and we acquired the twenty-five thousand
(25,000) shares of the Common Stock of BMSG from the Seller in exchange for
the
payment of the purchase price of
(a)10,000,000
shares of our common stock and
(b)the
return for cancellation of 10,000,000 shares of our stock owned and held by
John
Lauring
At
that
time, the Escrow Agent released all stock certificates and certain other
corporate and financial books and records held pursuant to the Escrow
Agreement.
As
a
result of the Acquisition Agreement, BMSG became our wholly owned subsidiary
and
the Seller became the holder of approximately 78.24% of our outstanding common
stock as of the closing of the Acquisition .
On
July 3,
2006, the Company the Company changed its principal offices from 23 Brigham
Road, Worcester, MA 01609 to 8885 Rehco Road, San Diego, California
92121
David
R.
Koos, the Chairman, CEO and President of the Company, is, and at the time of
the
acquisition was, the Chairman and Chief Executive Officer of the Seller as
well
as beneficial owner of 24% of the share capital of the Seller. Brian Pockett,
Vice President, COO and Director of the Company, is, and at the time of the
acquisition was, Chief Operating Officer, Managing Director and a Director
of
the Seller as well as beneficial owner of 14% of the share capital of the
Seller.
On
October
11, 2006, we entered into an Agreement with BMXP Holdings, Inc (“BMXP”)
(“Agreement”) pursuant to which we issued to BMXP 1,462,570 common shares of the
Company on or prior to October 12, 2006. This issuance constituted full
satisfaction of the amount of $1,191,619 plus any accrued and unpaid interest,
owed to BMXP by the Company at that time.
As
further
consideration to BMXP for entering into this Agreement and abiding by the terms
and conditions thereof, at any time within a period of 365 days from the date
of
the Agreement, BMXP shall have the right, upon written demand to us
(“Registration Demand”), to cause us, within ninety days of the Registration
Demand, to prepare and file with the United States Securities and Exchange
Commission (“SEC”) a registration statement to register under the Securities Act
of 1933, as amended, 11,462,570 of our common shares (including the
shares issued pursuant to this Agreement) owned by BMXP (“Registerable
Securities”), in order that the Registerable Securities may be distributed to
BMXP shareholders on a pro rata basis ( based on their ownership of our common
shares as of a Record Date to be determined by BMXP), and use our
reasonable best efforts to cause that registration statement to be declared
effective by the SEC. This right may also be exercised by any entity to which
BMXP has transferred ownership of the Registerable Securities in trust for
the
BMXP Record Shareholders. As of June 28, 2007 the shares owned by BMXP were
transferred by BMXP. to the BMXP Holdings Shareholder Business Trust for the
benefit of BMXP Holdings Inc. shareholders of record May 23,
2007.
On
April
4, 2007, 985,168 of our common shares were issued to Bombardier
Pacific Ventures in full satisfaction of $246,292 owed by the Company to
Bombardier Pacific Ventures. David R. Koos, the Company’s Chairman of the Board
of Directors, President, CEO, Secretary, and Acting CFO is the sole beneficial
owner of Bombardier Pacific Ventures
None
of
our Directors may be considered independent under the independence standards
applicable to the small business issuer under paragraph (a)(1) of Item407 of
Regulation SB.
EXHIBIT
INDEX
EXHIBIT
NUMBER
|
|
|
DESCRIPTION
|
|
|
|
|
|
|
31.1**
|
|
|
CERTIFICATION
BY CEO PURSUANT TO SECTION 302 OF SARBANES OXLEY ACT
|
|
32.1**
|
|
|
CERTIFICATION
BY CEO PURSUANT TO SECTION 906 OF SARBANES OXLEY ACT
|
|
31.2**
|
|
|
CERTIFICATION
BY CEO PURSUANT TO SECTION 302 OF SARBANES OXLEY ACT
|
|
32.2**
|
|
|
CERTIFICATION
BY CFO PURSUANT TO SECTION 906 OF SARBANES OXLEY ACT
|
|
31.3*
|
|
|
CERTIFICATION
BY CEO PURSUANT TO SECTION 302 OF SARBANES OXLEY ACT
|
|
31.4*
|
|
|
CERTIFICATION
BY CFO PURSUANT TO SECTION 302 OF SARBANES OXLEY ACT
|
|
31.5
|
|
|
CERTIFICATION
BY CEO PURSUANT TO SECTION 302 OF SARBANES OXLEY ACT
|
|
31.6
|
|
|
CERTIFICATION
BY CFO PURSUANT TO SECTION 302 OF SARBANES OXLEY ACT
|
|
*INCORPORATED
BY REFERENCE, PREVIOUSLY FILED WITH THE COMPANY'S 10KSB/A Amendment
number 1FOR THE TWELVE MONTHS ENDED SEPTEMBER 30,2006.
** INCORPORATED
BY REFERENCE, PREVIOUSLY FILED WITH THE COMPANY'S 10KSB FOR THE TWELVE MONTHS
ENDED SEPTEMBER 30,2006.
The
following table sets forth the aggregate fees billed to us by Chang G. Park
:
|
|
Period
beginning Oct1,2005 and ending September 30, 2006
|
|
|
|
|
|
Audit
Fees
|
|
$
|
5800
|
|
Audit
Related Fees
|
|
|
4670
|
|
Tax
Fees
|
|
|
0
|
|
All
Other Fees
|
|
|
75
|
|
|
|
|
|
|
|
|
$
|
10545
|
|
Audit
Fees: Aggregate fees billed for professional services rendered for the
audit of the Company's annual financial statements.
Audit
Related Fees: Aggregate fees billed for professional services rendered for
assurance and related services that were reasonably related to the performance
of the audit or review of our financial statements and are not reported under
“Audit Fees” above. In 2005 these fees were primarily derived from review of
financial statements in the Company's Form 10QSB Reports.
All
services listed were pre-approved by the Board of Directors, functioning as
the
Audit Committee in accordance with Section 2(a) 3 of the Sarbanes-Oxley Act
of
2002.
The
Board
has considered whether the services described above are compatible with
maintaining the independent accountant's independence and has determined that
such services have not adversely affected Chang G Park`s
independence.
The
following table sets forth the aggregate fees billed to us by Armando C Ibarra,
:
|
|
|
|
|
|
Period
beginning Oct1, 2005 and endingSeptember30, 2006
|
|
|
|
|
|
Audit
Fees
|
|
$
|
0
|
|
Audit
Related Fees
|
|
|
2500
|
|
Tax
Fees
|
|
|
0
|
|
All
Other Fees
|
|
|
0
|
|
|
|
|
|
|
|
|
$
|
2500
|
|
Audit
Fees: Aggregate fees billed for professional services rendered for the
audit of the Company's annual financial statements.
Audit
Related Fees: Aggregate fees billed for professional services rendered for
assurance and related services that were reasonably related to the performance
of the audit or review of our financial statements and are not reported under
“Audit Fees” above. In 2005 these fees were primarily derived from review of
financial statements in the Company's Form 10QSB Reports.
All
services listed were pre-approved by the Board of Directors, functioning as
the
Audit Committee in accordance with Section 2(a) 3 of the Sarbanes-Oxley Act
of
2002.
The
Board
has considered whether the services described above are compatible with
maintaining the independent accountant's independence and has determined that
such services have not adversely affected Armando C Ibarra's
independence.
SIGNATURES
In
accordance with Section 13 or 15(d) of the Securities Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
In
accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities on the
dates
indicated.
BIO-MATRIX
SCIENTIFIC GROUP, INC.
|
By:
|
/s/ David
R. Koos |
|
|
|
David
R. Koos |
|
|
|
Chairman,
CEO and President |
|
Dated:
October 29, 2007
31