a5552703.htm
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-QSB/A
Amendment
No. 1
Quarterly
Report under Section 13 or 15 (d) of
Securities
Exchange Act of 1934
For
Period
ended December 31, 2006
Commission
File Number 0-32201
BIO
MATRIX SCIENTIFIC GROUP, INC.
(Exact
name of registrant as specified in its charter)
DELAWARE
|
|
33-0824714
|
(State
of Incorporation)
|
|
(I.R.S.
Employer Identification No.)
|
|
|
|
8885
Rehco Road, San Diego, California
|
|
92121
|
(Address
of Principal Executive Offices)
|
|
(Zip
Code)
|
(619)
398-3517
(Registrant's
telephone number, including area code)
Check
whether the registrant (1) has filed all reports required to be filed
by
Section
13
or 15 (d) of the Securities Exchange Act of 1934 during 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 [ ]
There
were
23,174,396 shares of Common Stock outstanding as of September 10,
2007.
PART
I.
Item
1: Financial Statements
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 of
Bio-Matrix
Scientific Group, Inc. and Subsidiary
(Formerly
Tasco International, Inc.)
(A
Development Stage Company)
We
have
reviewed the consolidated accompanying balance sheet of Bio-Matrix Scientific
Group, Inc. and Subsidiary (Formerly Tasco International, Inc) (A Development
Stage “Company”) as of December 31, 2006, and the related consolidated
statements of operation, changes in stockholders’ equity, and cash flows for the
three months ended December 31, 2006; and for the period from August 2, 2005
(inception) through December 31, 2006. These financial statements are
the responsibility of the Company’s management.
We
conducted our review in accordance with the standards of the Public Company
Accounting Oversight Board (United States). A review of interim
financial information consists principally of applying analytical procedures
to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit
conducted in accordance with the standards of the Public Company Accounting
Oversight Board, the objective of which is the expression of an opinion
regarding the financial statements taken as a whole. Accordingly, we
do not express such an opinion.
Based
on
our review, we are not aware of any material modifications that should be made
to the consolidated financial statements referred to above for them to be in
conformity with generally accepted accounting principles.
The
accompanying 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 is currently in the
development stage. Because of the Company’s current status and
limited operations there is substantial doubt about its ability to continue
as a
going concern. Management’s plans in regard to its current status are
also described in Note 5. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/
Chang
G. Park
Chang
G.
Park, CPA
November
14, 2007
Chula
Vista, California
Bio-Matrix
Scientific Group Inc.
(A
Development Stage Company)
Consolidated
Balance
Sheet
ASSETS
|
|
|
|
As
of December 31,
2006
(unaudited)
|
|
CURRENT
ASSETS
|
|
|
|
Cash
|
|
$ |
14,991
|
|
Receivable
|
|
|
74
|
|
Pre-paid
Expenses
|
|
|
-
|
|
|
|
|
|
|
Total
Current Assets
|
|
|
15,065
|
|
|
|
|
|
|
PROPERTY
& EQUIPMENT
|
|
|
365,070
|
|
|
|
|
|
|
Intangible
Assets/Technology
|
|
|
-
|
|
|
|
|
|
|
Total
Other Assets
|
|
|
29,127
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
$ |
409,262
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
Accounts
payable
|
|
$ |
54,223
|
|
Loans
from former parent
|
|
|
-
|
|
Due
To/ From New Parent
|
|
|
-
|
|
Notes
Payable
|
|
|
188,324
|
|
Accrued
Payroll
|
|
|
4,000
|
|
Accrued
Payroll taxes
|
|
|
7,611
|
|
Accrued
Interest
|
|
|
1,387
|
|
Accrued
expenses
|
|
|
-
|
|
Total
Current Liabilities
|
|
|
255,545
|
|
|
|
|
|
|
LONG
TERM LIABILITIES
|
|
|
-
|
|
TOTAL
LIABILITIES
|
|
|
255,545
|
|
|
|
|
|
|
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; 16,493,389
|
|
|
|
|
shares issued and outstanding as of December
31, 2006
|
|
|
1,649
|
|
Additional
paid-in Capital
|
|
|
3,039,441
|
|
Deficit
accumulated during the development stage
|
|
|
(2,887,373 |
) |
|
|
|
|
|
Total
Stockholders' Equity (Deficit)
|
|
$ |
153,717
|
|
|
|
|
|
|
TOTAL
LIABILITIES & STOCKHOLDERS'
EQUITY
|
|
$ |
409,262
|
|
The
accompanying Notes are an integral part of these financial
statements.
Bio-Matrix
Scientific Group, Inc.
(A
Development Stage company)
Statements
of Operations
|
|
3
Months Ended
December
31,
2006
(unaudited)
|
|
|
3
Months Ended
December
31,
2005
(unaudited)
|
|
|
Inception
(August
2, 2005)
through
December
31,
2006
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$ |
-
|
|
|
$ |
-
|
|
|
$ |
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Revenues
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COSTS
AND EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
Research
and Development
|
|
|
108,489
|
|
|
|
135,387
|
|
|
|
319,329
|
|
General
and administrative
|
|
|
224,673
|
|
|
|
185,202
|
|
|
|
1,549,239
|
|
Depreciation
and amortization
|
|
|
333
|
|
|
|
140
|
|
|
|
1,215
|
|
Consulting
and professional fees
|
|
|
125,840
|
|
|
|
46,054
|
|
|
|
973,529
|
|
Impairment
of intangibles
|
|
|
-
|
|
|
|
-
|
|
|
|
34,688
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Costs and Expenses
|
|
|
459,335
|
|
|
|
(366,783 |
) |
|
|
2,878,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
LOSS
|
|
|
(459,335 |
) |
|
|
(366,783 |
) |
|
|
(2,878,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER
INCOME & (EXPENSES)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Expense
|
|
|
(6,844 |
) |
|
|
(162 |
) |
|
|
(9,373 |
) |
Interest
Income
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Other
income
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Other Income & (Expenses)
|
|
|
(6,844 |
) |
|
|
(162 |
) |
|
|
(9,373 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
INCOME (LOSS)
|
|
$ |
(466,179 |
) |
|
$ |
(366,945 |
) |
|
$ |
(2,887,373 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC
AND DILUTED EARNINGS (LOSS) PER SHARE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC
AND DILUTED EARNINGS (LOSS) PER SHARE
|
|
$ |
(0.03 |
) |
|
$ |
(14.68 |
) |
|
$ |
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED
AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING
|
|
|
15,275,294
|
|
|
|
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
(unaudited)
|
|
|
|
|
Additional
|
|
|
|
|
|
|
|
|
|
Common
|
|
|
Paid-in
|
|
|
Retained
|
|
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Earnings
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued to Parent
|
|
|
25,000
|
|
|
|
35,921
|
|
|
|
0
|
|
|
|
|
|
|
35,921
|
|
Net
Loss August 2, 2005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
through
September 30, 2005 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,000
|
) |
|
|
(1,000 |
) |
Balance
September 30, 2005
|
|
|
25,000
|
|
|
|
35,921
|
|
|
|
0
|
|
|
|
(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
|
|
|
|
0
|
|
|
|
(367,945 |
) |
|
|
(332,024 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recapitalization
|
|
|
9,975,000
|
|
|
|
(34,921 |
) |
|
|
34,921
|
|
|
|
|
|
|
|
-
|
|
Stock
issued July 3, 2006 reverse acquisition
|
|
|
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 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
issued for services
|
|
|
100,184
|
|
|
|
10
|
|
|
|
112,524
|
|
|
|
|
|
|
|
112,534
|
|
Stock
issued for Compensation
|
|
|
153,700
|
|
|
|
15
|
|
|
|
101,465
|
|
|
|
|
|
|
|
101,480
|
|
Stock
issued in exchange for canceling debt
|
|
|
2,854,505
|
|
|
|
284
|
|
|
|
1,446,120
|
|
|
|
|
|
|
|
1,446,404
|
|
Net
Loss October 1, 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
through
December 31, 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(466,179 |
) |
|
|
(466,179 |
) |
Balance
December 30, 2006
|
|
|
16,493,389
|
|
|
|
1,649
|
|
|
|
3,039,441
|
|
|
|
(2,887,373 |
) |
|
|
153,717
|
|
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
|
|
3
Months
Ended
December
31,
2006
(unaudited)
|
|
|
3
Months
Ended
December
31,
2005
(unaudited)
|
|
|
August
2, 2005
(inception)
through
December
31,
2006
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
(loss)
|
|
$ |
(466,179 |
) |
|
$ |
(366,945 |
) |
|
$ |
(2,887,373 |
) |
Adjustments
to reconcile net loss to net cash (used in) provided by
operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
expense
|
|
|
333
|
|
|
|
140
|
|
|
|
1,215
|
|
Stock
issued for compensation
|
|
|
101,480
|
|
|
|
-
|
|
|
|
686,480
|
|
Stock
issued for services
|
|
|
112,534
|
|
|
|
-
|
|
|
|
872,284
|
|
Stock
issued to cancel debt plus accrued interest
|
|
|
251,209
|
|
|
|
|
|
|
|
251,209
|
|
Changes
in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
(Increase)
decrease in receivables
|
|
|
(74 |
) |
|
|
34921
|
|
|
|
(74 |
) |
(Increase)
decrease in prepaid expenses
|
|
|
20,207
|
|
|
|
(5,133 |
) |
|
|
-
|
|
(Increase)
decrease in organizational costs
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
Increase
(Decrease) in Accounts Payable
|
|
|
(36,856 |
) |
|
|
23,201
|
|
|
|
54,223
|
|
Increase
(Decrease) in Accrued Expenses
|
|
|
(4,830 |
) |
|
|
2,029
|
|
|
|
12,998
|
|
(Increase)
Decrease in Deposits
|
|
|
-
|
|
|
|
(29,127 |
) |
|
|
(29,127 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash Provided by (Used in) Operating
Activities
|
|
|
(22,176 |
) |
|
|
(340,914 |
) |
|
|
(1,038,165 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases
of fixed assets
|
|
|
(24,846 |
) |
|
|
(103,565 |
) |
|
|
(366,285 |
) |
Purchases
of Intangible assets
|
|
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash Provided by (Used in) Investing
Activities
|
|
|
(24,846 |
) |
|
|
(103,565 |
) |
|
|
(366,285 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock issued for cash
|
|
|
-
|
|
|
|
|
|
|
|
1,278
|
|
Additional
paid-in Capital
|
|
|
-
|
|
|
|
|
|
|
|
34,643
|
|
Principal
borrowings on notes
|
|
|
39,372
|
|
|
|
-
|
|
|
|
188,324
|
|
Net
borrowings from related parties
|
|
|
|
|
|
|
444,746
|
|
|
|
1,195,196
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash Provided by (Used in) Financing
Activities
|
|
|
39,372
|
|
|
|
444,746
|
|
|
|
1,419,441
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Increase (Decrease) in Cash
|
|
|
(7,650 |
) |
|
|
267
|
|
|
|
14,991
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
at Beginning of Quarter
|
|
|
22,641
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
at End of Quarter
|
|
$ |
14,991
|
|
|
$ |
267
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Cash Flow Disclosures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
paid during period for interest
|
|
$ |
-
|
|
|
$ |
-
|
|
|
$ |
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
paid during period for taxes
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
The
accompanying Notes are an integral part of these financial
statements.
BIO-MATRIX
SCIENTIFIC GROUP, INC. AND SUBSIDIARY
(Formerly
Tasco Holdings International, Inc.)
(A
Development Stage Company)
Notes
to
unaudited consolidated Financial Statements
As
of
December 31, 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 December 31, 2006 consists of the following:
Acquisition
cost:
|
|
|
Production
Equipment
|
US$
|
|
|
93,314
|
|
Production
Cleanroom
|
|
|
|
78,264
|
|
Leasehold
improvement
|
|
|
|
188,981
|
|
Office
equipment
|
|
|
|
3,057
|
|
Computer
|
|
|
|
2,120
|
|
|
|
|
|
|
|
Subtotal
|
|
|
|
365,736
|
|
Less
accumulated depreciation
|
|
|
|
(666 |
) |
Total
|
US$
|
|
|
365,070
|
|
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 $2,887,373
during the period from August 2, 2005 (inception) through December 31, 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 raise. There is no guarantee that the Company will be able to
raise
any capital through any type of offerings.
NOTE
6. INCOME TAXES
As
of December 31 , 2006
|
|
|
|
|
|
|
|
Deferred
tax assets:
|
|
|
|
Net
operating tax carry forwards
|
|
$
|
994,836
|
|
Other
|
|
|
-0-
|
|
Gross
deferred tax assets
|
|
|
994,836
|
|
Valuation
allowance
|
|
|
(994,836)
|
|
|
|
|
|
|
Net
deferred tax assets
|
|
$
|
-0-
|
|
As
of
December 31 , 2006 the Company has a Deferred Tax Asset
of $994,836 completely attributable to net operating loss carry
forwards of approximately $2,925,989 (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)
2,887,373 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.
On
October
11, 2006, the Company entered into an Agreement with BMXP Holdings, Inc (“BMXP”)
(“Agreement”) pursuant to which the Company issued 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.
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 December 31, 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: 16,493,389
shares issued and outstanding
NOTE
10.
COMMITMENTS AND CONTINGENCIES
On
August
3, 2005, BMSG 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, BMSG 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
December 31, 2006, 858,884 shares have been issued pursuant to the
Plan.
|
|
Number
of
|
|
|
|
Shares
|
|
As
of December 31, 2006:
|
|
|
|
|
|
|
|
Granted
|
|
|
858,884 |
* |
|
|
|
|
|
Remaining
shares available for issuance under the Plan as of December 31,
2006
|
|
|
641,116
|
|
*Does
not
include 300,000 shares which were issued erroneously and subsequently
cancelled
NOTE
13.
SUBSEQUENT EVENTS
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
October
29, 2007, the Company issued 20,000 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
November 1, 2007, the Company was granted a Biologics license (“License”) from
the Department of Health Services of the State of California. This License
permits the Company’s current facility to accept and store cord blood (Stem
Cells), whole blood, and various blood related specimens for cryogenic short
and
long term storage and on November 13, 2007, the Company entered into an
agreement with Dr. Joao L. Ascensao, M.D., Ph.D., F.A.C.P. whereby Dr. Ascensao,
as an independent contractor and not as an employee, has agreed to act
as the Company’s Medical Director.
On
November 7, 2007, the Company issued 28,750 common shares to consultants
pursuant to the BIO-MATRIX SCIENTIFIC GROUP, INC. 2007 EMPLOYEE AND CONSULTANTS
STOCK COMPENSATION PLAN as consideration for services rendered.
Between
October 12, 2007 and November 9, 2007, the Company borrowed $106,240 from
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. In consideration for this loan, the
Company issued bombardier Pacific Ventures a series of Notes, callable at par
plus any accrued and unpaid interest by the company upon five days written
notice, bearing simple interest at 15% maturing on the following
dates:
Due
Date |
Principal
Amount |
October
25, 2008 |
$3,620 |
October
19, 2008 |
$10,000 |
November
9, 2008 |
$14,000 |
October
25, 2008 |
$19,500 |
October
12, 2008 |
$28,000 |
November
2, 2008 |
$31,300 |
On
November 14, 2007 the Company sold a $50,000 face value convertible
debenture (“Convertible Debenture”) for an aggregate purchase price of $50,000
to one purchaser.
Interest
on the Convertible Debenture shall accrue at a rate of 12% per annum based
on a
365 day year. The Company shall pay simple interest to the holder on the
aggregate unconverted and then outstanding principal amount of this Convertible
Debenture at the rate of 12% per annum, payable on the maturity Date, which
is
November 14, 2009.
At
any
time subsequent to the expiration of a six month period since either
of:
(i) that
Registration Statement, as amended, filed with the SEC on Form SB-2
relating to the sale of an aggregate of 17,195,263 shares of the common stock
of
the Company by certain selling shareholders (the “Selling
Shareholders Registration Statement”) has been declared effective by the SEC
or
(ii) the
Selling Shareholder Registration Statement has been withdrawn by the
Company.
the
holder
may convert the Convertible Debenture, in whole but not in part, into the
Company’s common shares at the conversion rate of $0.15 per
Share.
Subsequent
to any conversion , the holder shall have the right, upon written
demand to Company (“Registration Demand”), to cause Company, within ninety days
of the Registration Demand, to prepare and file with the United States
securities and Exchange Commission (“SEC”) a Registration Statement in order
that the Conversion Shares may be registered under the Securities Act of 1933,
as amended, and use its reasonable best efforts to cause that Registration
Statement to be declared effective by the SEC. There is no penalty to the
Company in the event the registration Statement is not declared effective by
the
SEC.
Item
2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
CERTAIN
FORWARD-LOOKING INFORMATION
Information
provided in this Quarterly report on Form 10QSB may contain forward-looking
statements within the meaning of Section 21E or Securities Exchange Act of
1934
that are not historical facts and information. These statements represent the
Company's expectations or beliefs, including, but not limited to, statements
concerning future and operating results, statements concerning industry
performance, the Company's operations, economic performance, financial
conditions, margins and growth in sales of the Company's products, capital
expenditures, financing needs, as well assumptions related to the forgoing.
For
this purpose, any statements contained in this Quarterly Report that are not
statement of historical fact may be deemed to be forward-looking statements.
These forward-looking statements are based on current expectations and involve
various risks and uncertainties that could cause actual results and outcomes
for
future periods to differ materially from any forward-looking statement or views
expressed herein. The Company's financial performance and the forward-looking
statements contained herein are further qualified by other risks including
those
set forth from time to time in the documents filed by the Company with the
Securities and Exchange Commission, including the Company's most recent Form
10KSBas amended for the year ended September 30, 2006.
CONDITION
AND RESULTS OF OPERATIONS THREE MONTHS ENDED DECEMBER 31,
2006
Revenues
were -0- for the quarter ending December 31, 2006 and -0- for the same quarter
ending 2005. Operating Expenses were $459,335 for the three months ended
December 31, 2006 and $366,783 for the same period in
2005.
ACQUISITION
OF WHOLLY OWNED SUSIDIARY
As
of the
acquisition of 100% of the share capital of Bio-Matrix Scientific Group, Inc.
(“BMSG”, a Nevada corporation) on July 3, 2006, Tasco Holdings International,
Inc.(“Company”) has ceased all activities relating to its historical business
and adopted the business plan of BMSG.
BMSG
is
developmental stage company engaged primarily in the cryogenic storage of stem
cells and the development of medical devices used in live tissue transfer and
stem cell research.
Through
BMSG, the Company has 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. The Company seeks 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. The Company has not conducted or obtained any
independent evaluation of the efficacy or likely market interest in using these
instruments. The Company's evaluations have been limited to those conducted
by
Company management without the benefit of any independent or third party
professional evaluation.
Through
BMSG , the Company is currently constructing what it believes 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. It anticipates that it 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, it intend to offer such storage services
at
its 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 the
Company's current plans and strategy have been developed solely by our officers
and Directors.
PLAN
OF OPERATION
As
of
December 31, 2006 the Company has $14,991 cash on hand and current liabilities
of $255,545, such liabilities consisting of Accounts Payable , Notes Payable,
Accrued Payroll, Accrued Interest , Accrued Expenses and Accrued
Taxes.
The
Company feels it 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, the Company plans to fund its 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 the Company or at all.)
During
the
period beginning January 1, 2007 and ending April 4, 2007, the Company 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. The
Company estimates that these net proceeds will not be sufficient to
fulfill its 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 the Company 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
the Company’s capital needs through the next twelve months.
On
November 14, 2007 the Company sold $50,000 face value of convertible debentures
for an aggregate purchase price of $50,000 to one purchaser. The net proceeds,
which are $50,000, will be utilized general working capital
purposes.
Over
the
next 12 months and if the Company is successful in obtaining necessary licenses
(as described below), the Company anticipates opening its stem cell bank and
marketing its disposable stem cell / tissue management
instruments.
On
November 1, 2007, the Company was granted a Biologics license (“License”) from
the Department of Health Services of the State of California. This License
permits the Company’s current facility to accept and store cord blood (Stem
Cells), whole blood, and various blood related specimens for cryogenic short
and
long term storage and on November 13, 2007, the
Company entered into an agreement with Dr. Joao L. Ascensao, M.D.,
Ph.D., F.A.C.P. whereby Dr. Ascensao, as an independent contractor and not
as an
employee, has agreed to act as the Company’s Medical
Director.
The
Company 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.
Over
the
next twelve months and if the Company is successful in obtaining the
necessary additional financing and obtaining equipment and necessary additional
professional staff, the Company anticipates 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
The
Company can not assure that it will be successful in obtaining additional
financing necessary to implement its business plan. The
Company has not received any commitment or expression of interest
from any financing source that has given it any assurance that it
will obtain the amount of additional financing in the future that it currently
anticipates. For these and other reasons, the Company is
not able to assure that it will obtain any additional financing or,
if it is successful, that it can obtain any such financing
on terms that may be reasonable in light of its current
circumstances.
Item
3. CONTROLS AND PROCEDURES
(A)
Evaluation of Disclosure Controls and Procedures
As
of the
end of the period covered by this report, the Company carried out an evaluation,
under the supervision and with the participation of David Koos, who is the
Company's Principal Executive Officer/Principal Financial Officer, of the
effectiveness of the design and operation of the Company's disclosure controls
and procedures. The Company's disclosure controls and procedures are designed
to
provide a reasonable level of assurance of achieving the Company's disclosure
control objectives. The Company's Principal Executive Officer/Principal
Financial Officer has concluded that the Company's disclosure controls and
procedures are, in fact, effective at this reasonable assurance level as of
the
period covered.
(B)
Changes in Internal Controls over Financial Reporting
In
connection with the evaluation of the Company's internal controls during the
period commencing on April 1, 2006 and ending June 30, 2006, David Koos, who
is
both the Company's Principal Executive Officer and Principal Financial Officer
has determined that there are no changes to the Company's internal controls
over
financial reporting that has materially affected, or is reasonably likely to
materially effect, the Company's internal controls over financial reporting.
PART
II.
Item
1. LEGAL PROCEEDINGS
None.
On
June
13, 2006, the Company deposited 10,000,000 newly issued common shares into
Escrow pursuant to a stock purchase agreement (“Agreement”) by and between the
Company and Bio-Matrix Scientific Group, Inc (“Seller”) , a Delaware
corporation.
Under
the
terms of the Agreement, the Company acquired all of the outstanding common
stock
of BMSG (at that time a wholly-owned subsidiary of the Seller) and the
aforementioned 10,000,000 newly issued common shares were released to the Seller
from Escrow at the closing of the acquisition (July 3, 2006).
The
shares
were issued pursuant to Section 4(2) of the Securities Act of 1933, as amended.
No underwriters were retained to serve as placement agents. The shares were
offered directly through the management of the Company, and the consideration
for the shares was 100% of the share capital of BMSG.
On
July
17, 2006 the Company signed a public relations agreement with OTCFN (“PR
Agreement) which called for the issuance of an option agreement for 200,000
options exercisable at $4.50 per share (“OTCFN Options”). These options expired
unexercised six months from the date of execution of the agreement.
The
OTCFN
Options were issued pursuant to Section 4(2) of the Securities Act of 1933,
as
amended. No underwriters were retained to serve as placement agents. The OTCFN
Options were offered directly through the management of the
Company.
Consideration
for the OTCFN OPTIONS was OTCFN's entry into the PR Agreement and the
performance of services by OTCFN pursuant to that PR Agreement.
On
October
12, 2006, the Company 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.
The
shares
were issued pursuant to Section 4(2) of the Securities Act of 1933, as amended.
No underwriters were retained to serve as placement agents. The shares were
offered directly through the management of the Company, and the consideration
for the shares was full satisfaction of the amount of $1,191,619 plus accrued
and unpaid interest, owed to BMXP Holdings, Inc. by the Company.
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.
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, the Company 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 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. 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, the Company 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, the Company 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, the Company 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, the Company 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.
On
November 14, 2007 the Company sold $50,000 face value convertible
debenture (“Convertible Debenture”) for an aggregate purchase price of $50,000
to one purchaser, who is accredited investor as “accredited investor” is defined
in Rule 501 of Regulation D, promulgated under the Securities Act of 1933,
as
amended . and who also has for two years had a substantive, pre-existing
relationship with the Company.
Interest
on the Convertible Debenture shall accrue at a rate of 12% per annum based
on a
365 day year. The Company shall pay simple interest to the holder on the
aggregate unconverted and then outstanding principal amount of this Convertible
Debenture at the rate of 12% per annum, payable on the maturity Date, which
is
November 14, 2009.
At
any
time subsequent to the expiration of a six month period since either
of:
(i) that
Registration Statement, as amended, filed with the SEC on Form SB-2
relating to the sale of an aggregate of 17,195,263 shares of the common stock
of
the Company by certain selling shareholders (the “Selling
Shareholders Registration Statement”) has been declared effective by the SEC
or
(ii) the
Selling Shareholder Registration Statement has been withdrawn by the
Company.
The
holder
may convert the Convertible Debenture, in whole but not in part, into the
Company’s common shares at the conversion rate of $0.15 per Share.
Subsequent
to any conversion , the holder shall have the right, upon written
demand to Company (“Registration Demand”), to cause Company, within ninety days
of the Registration Demand, to prepare and file with the United States
securities and Exchange Commission (“SEC”) a Registration Statement in order
that the Conversion Shares may be registered under the Securities Act of 1933,
as amended, and use its reasonable best efforts to cause that Registration
Statement to be declared effective by the SEC. There is no penalty to the
Company in the event the registration Statement is not declared effective by
the
SEC.
The
net
proceeds, which are $50,000, will be utilized general working capital purposes.
No underwriters were retained to serve as placement agents for the sale. This
Convertible Debenture was sold directly through our management. No commission
or
other consideration was paid in connection with the sale of the Convertible
Debenture. There was no advertisement or general solicitation made in connection
with this offer and sale of the Convertible Debenture. The offer and sale of
the
Convertible Debenture was exempt from the registration provisions of the
Securities Act by reason of Section 4(2) thereof. Management made its
determination of the availability of such exemption based upon the facts and
circumstances surrounding the offer and sale of the Convertible Debenture,
including the representations and warranties made by the purchaser and the
fact
that a restrictive legend was placed on the Convertible Debenture and
restrictive legends will be placed on, and stop transfer orders
placed against, the certificates for any shares into which the
Convertible debenture may convert.
Item
3. DEFAULTS UPON SENIOR SECURITIES
None.
Item
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
Item
5. OTHER INFORMATION
Item
6. EXHIBITS
31.1
|
Certification
of Chief Executive Officer*
|
|
|
31.2
|
Certification
of Acting Chief Financial Officer*
|
|
|
32.1
|
Certification
of Chief Executive Officer under Section 906 of the Sarbanes-Oxley
Act of
2002.*
|
|
|
32.2
|
Certification
of Acting Chief Financial Officer under Section 906 of the Sarbanes-Oxley
Act of 2002.*
|
|
|
31.3
|
Certification
of Chief Executive Officer dated 11/20/07
|
|
|
31.4
|
Certification
of Acting Chief Financial Officer dated 11/20/07
|
|
|
32.3
|
Certification
of Chief Executive Officer under Section 906 of the Sarbanes-Oxley
Act of
2002 dated 11/20/07
|
|
|
32.4
|
Certification
of Acting Chief Financial Officer under Section 906 of the Sarbanes-Oxley
Act of 2002 dated 11/20/07
|
*
previously filed
SIGNATURES
In
accordance with the requirements of the Exchange Act, the Company caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
|
Bio
Matrix Scientific Group, Inc,.
|
|
a
Delaware corporation
|
|
|
By:
|
/s/
David R. Koos
|
|
David
R.
Koos
|
|
Chief
Executive Officer
|
|
Date:
November 20, 2007
|
17