0001607062-18-000238.txt : 20180806 0001607062-18-000238.hdr.sgml : 20180806 20180806125025 ACCESSION NUMBER: 0001607062-18-000238 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 61 CONFORMED PERIOD OF REPORT: 20180630 FILED AS OF DATE: 20180806 DATE AS OF CHANGE: 20180806 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Regen BioPharma Inc CENTRAL INDEX KEY: 0001589150 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 455192997 STATE OF INCORPORATION: NV FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 333-191725 FILM NUMBER: 18994162 BUSINESS ADDRESS: STREET 1: 4700 SPRING ST #304 CITY: LA MESA STATE: CA ZIP: 91942 BUSINESS PHONE: 619-702-1404 MAIL ADDRESS: STREET 1: 4700 SPRING ST #304 CITY: LA MESA STATE: CA ZIP: 91942 10-Q 1 rgbp063018form10q.htm FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

 For the quarterly period ended June 30, 2018

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

 For the transition period from

 Commission File No. 333-191725

 REGEN BIOPHARMA, INC.

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

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

 

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

(Address of Principal Executive Offices)

619 702 1404

(Issuer’s telephone number)

None

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

Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒  No ☐

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

Yes ☒  No ☐

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

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

 

APPLICABLE ONLY TO CORPORATE ISSUERS:

As of June 30, 2018 there were 158,726,196 shares of common stock issued and outstanding.

As of June 30, 2018 there were 139,942,206 shares of Series A Preferred Stock issued and outstanding.

As of June 30, 2018 there were 38,000,000 shares of Series M Preferred Stock issued and outstanding

As of June 30, 2018 there were 50,000 shares of Series AA Preferred Stock issued and outstanding.

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

Yes ☐  No ☒

 1 

 

 

PART I - FINANCIAL INFORMATION

Item 1. - Financial Statements

REGEN BIOPHARMA , INC.      
CONSOLIDATED BALANCE SHEET      
       
  

As of

June 30,

2018

(unaudited)

 

As of

September 30, 2017

ASSETS      
CURRENT ASSETS          
Cash   55,404    269,973 
Accounts Receivable   0    0 
Note Receivable, Related Party   4,551    4,551 
Note Receivable   0    165,000 
Prepaid Expenses   8,042    34,427 
Accrued Interest Receivable   7,559    4,436 
Prepaid Rent   15,000    0 
     Total Current Assets   90,556    478,387 
OTHER ASSETS          
Available for Sale Securities   468,252    465,852 
Total Other Assets   468,252    465,852 
           
TOTAL ASSETS   558,808    944,239 
LIABILITIES AND STOCKHOLDERS' EQUITY          
Current Liabilities:          
Bank Overdarft   203      
Accounts payable   74,044    495,749 
Notes Payable   3,227    111,355 
Accrued payroll taxes   4,241    857 
Accrued Interest   248,117    122,807 
Accrued Rent   0    5,000 
Accrued Payroll   854,163    590,996 
Other Accrued Expenses   41,243    33,034 
Due to Investor   20,000    20,000 
Due to Investor, Related Party   11,500      
Derivative Liability   6,585,896    4,234,475 
Convertible Notes Payable   712,762    248,890 
Unearned Income   68,000      
Total Current Liabilities   8,623,396    5,863,164 
Long Term Liabilities:          
Convertible Notes Payable   510,241    332,409 
Total Long Term Liabilities   510,241    332,409 
Total Liabilities   9,133,637    6,195,573 
           
STOCKHOLDERS' EQUITY (DEFICIT)          
Common Stock ($.0001 par value) 500,000,000 shares authorized; 139,704,157 issued and outstanding as of September 30, 2017 and 158726196 shares issued and outstanding June 30, 2018   15,871    13,969 
Preferred Stock, 0.0001 par value, 800,000,000 authorized as of June 30, 2018  and September 30, 2017 respectively          
Series A Preferred 300,000,000 authorized, 139,942,206 and 136,966,617  outstanding as of  June 30, 2018 and September 30, 2017 respectively   13,995    13,697 
Series AA Preferred $0.0001 par value 600,000 authorized and 50, 000 and 50,000  outstanding as of September 30, 2017 and June 30, 2018, respectively   5    5 
Series M Preferred $0.0001 par value 300,000,000 authorized and 32,000,000 and 38,000,000  outstanding as of September 30, 2017 and June 30, 2018 respectively   3,800    3,200 
Additional Paid in capital   7,055,513    6,642,979 
Contributed Capital   728,658    728,658 
Retained Earnings (Deficit)   (16,483,071)   (12,741,843)
Accumulated Other Comprehensive Income   90,400    88,000 
Total Stockholders' Equity (Deficit)   (8,574,829)   (5,251,335)
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)   558,808    944,239 
           
The Accompanying Notes are an Integral Part of These Financial Statements

 2 

 

 

REGEN BIOPHARMA , INC.            
CONSOLIDATED STATEMENT OF OPERATIONS            
(unaudited)            
             
    

Quarter Ended

June 30, 2018

    

Quarter Ended

June 30, 2017

    

Nine Months Ended

June 30, 2018

    Nine Months Ended June 30, 2017 
REVENUES   100,000    110,000    100,000    110,000 
                     
COST AND EXPENSES                    
Research and Development   8,795    374,452    338,828    686,840 
General and Administrative   172,626    193,374    570,867    633,964 
Consulting and Professional Fees   29,953    80,226    309,686    474,985 
Rent   15,000    15,000    45,000    45,000 
Total Costs and Expenses   226,374    663,052    1,264,381    1,840,789 
                     
OPERATING LOSS   (126,374)   (553,052)   (1,164,381)   (1,730,789)
                     
OTHER INCOME & (EXPENSES)                    
Interest Income   577    40    10,121    633 
Other Income   96         96    34,666 
Interest Expense   (63,618)   (28,005)   (194,093)   (56,492)
Interest Expense attributable to                    
Amortization of Discount   (345,483)   (118,976)   (997,519)   (259,749)
Derivative Income (Expense)   474,202    (1,923,414)   (1,300,011)   (2,483,975)
Loss on Early Extinguishment of                    
Convertible Debt   (53,877)        (95,443)     
TOTAL OTHER INCOME (EXPENSE)   11,897    (2,070,355)   (2,576,848)   (2,764,917)
                     
NET INCOME (LOSS)   (114,477)   (2,623,407)   (3,741,229)   (4,495,706)
NET INCOME (LOSS) attributable to common shareholders   (114,477)   (2,623,407)   (3,741,229)   (4,495,706)
BASIC AND FULLY DILUTED EARNINGS (LOSS) PER SHARE   (0.0007)   (0.0190)   (0.0252)  ($0.0316)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING   153,505,198    138,112,605    148379644.6    142215914 
                     
The Accompanying Notes are an Integral Part of These Financial Statements

 

 3 

 

REGEN BIOPHARMA, INC.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(unaudited)      
   Quarter Ended June 30, 2018
   2018  2017
Net Income (Loss)  $(114,477)  $(2,623,407)
Add:          
     Unrealized Gains on Securities          
Less:          
     Unrealized Losses on Securities   (18,400)   (8,000)
     Total Other Comprehensive Income (Loss)   (18,400)   (8,000)
Comprehensive Income  $(132,877)  $(2,631,407)
           
    Nine Months  Ended June 30 
    2018    2017 
Net Income (Loss)  $(3,741,229)  $(4,495,706)
Add:          
     Unrealized Gains on Securities        208,000 
Less:   40,000      
     Unrealized Losses on Securities   (37,600)   (8,000)
     Total Other Comprehensive Income (Loss)   2,400    200,000 
Comprehensive Income  $(3,738,829)  $(4,295,706)
           
The Accompanying Notes are an Integral Part of These Financial Statements

 4 

 

 

REGEN BIOPHARMA , INC.      
CONSOLIDATED STATEMENT OF CASH FLOWS        
       
       
  

Nine Months Ended

June 30,

2018

 

Nine Months Ended

June 30,

2017

CASH FLOWS FROM OPERATING ACTIVITIES        
Net Income (loss)  (3,741,229)  (4,495,706)
Adjustments to reconcile net Income to net cash        
Preferred Stock issued to Consultants  600   50 
Common Stock issued to Consultants  144,060   13,400 
Preferred Stock issued for Compensation      3,150 
Preferred Stock issued for expenses      5,000 
Common Stock issued for interest  5,888     
Preferred Stock Issued For Interest        
Increase (Decrease) in Interest expense attributable to amortization of Discount  997,519   259,749 
Increase (Decrease) in Loss on Early Extinguishment of debt  95,443    
Increase in Additional Paid in Capital      8,580 
Changes in operating assets and liabilities:        
Increase (Decrease) in Accounts Payable  (421,713)  218,037 
Increase in Accounts Receivable      (19,852)
(Increase) Decrease in Interest  Receivable  (10,121)  (633)
Increase (Decrease) Unearned Income  68,000     
Increase (Decrease) in accrued Expenses  418,398   301,764 
(Increase) Decrease in Prepaid Expenses  (15,000)  26,584 
(Increase) Decrease in Due From Former Employee        
Increase in Derivative Expense  1,300,011   2,483,975 
(Increase) Decrease  in Notes Receivable, Related Party        
(Increase) Decrease  in Notes Receivable  40,000   7,500 
Increase in Stock Accepted as Consideration      (83,000)
Net Cash Provided by (Used in) Operating Activities  (1,118,145)  (1,271,402)
         
CASH FLOWS FROM FINANCING ACTIVITIES        
Common Stock issued for Cash  25,000   292,500 
Preferred Stock issued for Cash  25,000   317,500 
Increase ( Decrease)  in Notes Payable  (108,128)  (21,793)
Increase in Bank Overdraft  203     
Increase in Convertible Notes payable  950,000   1,094,000 
(Increase ) Decrease in Original Issue Discount      (4,000)
Increase (Decrease) in Due to Shareholder      (50,000)
Increase (Decrease) in Due to Investor  11,500   20,000 
Net Cash Provided by (Used in) Financing Activities  903,575   1,648,207 
         
Net Increase (Decrease) in Cash  (214,570)  376,805 
         
Cash at Beginning of Period  269,973   24,822 
         
Cash at End of Period  55,404   401,627 
         
Supplemental Disclosure of Noncash investing and financing activities:        
Common shares Issued for Debt  218,000     
Preferred Shares Issued for Debt  7,000     
Cash Paid for Interest  39,666   7,000 
Common shares Issued for Interest  15,794     
Preferred Shares issued for Interest  377     
         
The Accompanying Notes are an Integral Part of These Financial Statements

 5 

 

 

REGEN BIOPHARMA, INC.

Notes to Consolidated Financial Statements

As of June 30, 2018

(Unaudited)

 

The accompanying unaudited interim condensed consolidated financial statements of Regen Biopharma , Inc. (“Regen” or “the Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the United States Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s annual report filed with the SEC on Form 10-K for the year ended September 30, 2017. In general, interim disclosures do not repeat those contained in the annual statements. In the opinion of management, all adjustments consisting of normal recurring adjustments necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.   

 

NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

The Company was organized April 24, 2012 under the laws of the State of Nevada.

 

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

 

The Company is currently engaged in actively identifying small molecules that inhibit or express NR2F6 leading to immune cell activation for oncology applications and immune cell suppression for autoimmune disease.

 

The Company is in the early stages of development of its proposed products and therapies. The Company will be required to obtain approval from the FDA in order to market any of The Company’s products or therapies. No approval has been granted by the FDA for the marketing and sale of any of the Company’s products and therapies and no assurance may be given that any of the Company’s products or therapies will be granted such approval. The Company’s current plans include the development of regenerative medical applications up to the point of successful completion of Phase I and/ or Phase II clinical trials after which the Company would either attempt to sell or license those developed applications or, alternatively, advance the application further to Phase III clinical trials. The Company can provide no assurance that the Company will be able to sell or license any product or that, if such product is sold or licensed, such sale or license will be on terms favorable to the Company.

 

A. BASIS OF ACCOUNTING

 

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

 

B. PRINCIPLES OF CONSOLIDATION

 

The consolidated financial statements include the accounts of KCL, Therapeutics, Inc., a Nevada corporation and wholly owned subsidiary of Regen. Significant inter-company transactions have been eliminated

 

 6 

 

 

C. 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.

 

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.

 

F. FAIR VALUE OF FINANCIAL INSTRUMENTS

 

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

 

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

 

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

 

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

 

G. DERIVATIVE LIABILITIES.

 

The Company evaluates its convertible debt, options, warrants or other contracts, if any, to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with ASC 815 of the FASB Accounting Standards Codification. The result of this accounting treatment is that the fair value of the embedded derivative is marked-to-market each balance sheet date and recorded as either an asset or a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the consolidated statement of operations.

 

The Company analyzes the conversion feature of Convertible Notes for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging. ASC 815-15 requires that the conversion features are bifurcated and separately accounted for as an embedded derivative contained in the Company’s convertible debt. The embedded derivative is carried on the balance sheet at fair value. Any unrealized change in fair value, as determined at each measurement period, is recorded as a component of the income statement and the associated carrying amount on the balance sheet is adjusted by the change. The Company values the embedded derivative using the Black-Scholes pricing model

 

The Black Scoles pricing model used to determine the Derivative Liability on convertible notes issued by the Company in which an embedded derivative is recognized as of June 30, 2018 utilized the following inputs:

 

Risk Free Interest Rate  1.31 -1.62%
Expected Term  0.15-2.34 Yrs
Expected Volatility  154-197%
Expected Dividends  0

 

 7 

 

 

H. INCOME TAXES

 

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

 

The Company applied the provisions of ASC 740-10-50, “Accounting For Uncertainty In Income Taxes”, which provides clarification related to the process associated with accounting for uncertain tax positions recognized in our financial statements. Audit periods remain open for review until the statute of limitations has passed. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the Company’s liability for income taxes. Any such adjustment could be material to the Company’s results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period. As of June 30, 2018 the Company had no uncertain tax positions, and will continue to evaluate for uncertain positions in the future.

 

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

 

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

 

I.  BASIC EARNINGS (LOSS) PER SHARE

 

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

 

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

 

J. ADVERTISING

 

Costs associated with advertising are charged to expense as incurred. Advertising expenses were $0 for the quarter ended June 30, 2018 ..

 

K. NOTES RECEIVABLE

 

Notes receivable are stated at cost, less impairment, if any.

 

L. REVENUE RECOGNITION

 

 Sales of products and related costs of products sold are recognized when: (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred; (iii) the price is fixed or determinable; and (iv) collectability is reasonably assured. These terms are typically met upon the prepayment or invoicing and shipment of products.

 

The Company determines the amount and timing of royalty revenue based on its contractual agreements with intellectual property licensees. The Company recognizes royalty revenue when earned under the terms of the agreements and when the Company considers realization of payment to be probable. Where royalties are based on a percentage of licensee sales of royalty-bearing products, the Company recognizes royalty revenue by applying this percentage to the Company’s estimate of applicable licensee sales. The Company bases this estimate on an analysis of each licensee’s sales results. Where warranted, revenue from licensees for contractual obligations such as License Initiation Fees are recognized upon satisfaction of all conditions required to be satisfied in order for that revenue to have been earned by the Company.

 

M. INTEREST RECEIVABLE

 

Interest receivable is stated at cost, less impairment, if any.

 

 8 

 

 

NOTE 2.  RECENT ACCOUNTING PRONOUNCEMENTS

 

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

 

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

 

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

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

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

 

 9 

 

 

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

 

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

 

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

 

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

 

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

 

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

In January 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) 2016-01, which amends the guidance in U.S. GAAP on the classification and measurement of financial instruments. Changes to the current guidance primarily affect the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the ASU clarifies guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The new standard is effective for fiscal years and interim periods beginning after December 15, 2017, and upon adoption, an entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period in which the guidance is effective. Early adoption is not permitted except for the provision to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other comprehensive income. The Company anticipates adoption in the fiscal year ending September 30, 2019. 

 10 

 

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

 

 NOTE 3. GOING CONCERN

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company generated net losses of $16,483,071 during the period from April 24, 2012 (inception) through June 30, 2018. This condition raises substantial doubt about the Company’s ability to continue as a going concern. The Company’s continuation as a going concern is dependent on its ability to meet its obligations, to obtain additional financing as may be required and ultimately to attain profitability. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Management plans to raise additional funds by offering securities for cash. Management has yet to decide what type of offering the Company will use or how much capital the Company will raise. During the quarter ended December 31, 2017 the Company raised $625,000 cash through the issuance of convertible debentures, exclusive of fees and/or discounts on notes. During the quarter ended March 31, 2018, the Company raised $50,000 cash through the sale of equity securities and $225,000 cash through the issuance of convertible debentures, exclusive of fees and/or discounts on notes. During the quarter ended June 30, 2018 the Company raised $138,000 cash through the issuance of convertible debentures and satisfaction of a Note Receivable held by the Company as consideration for a previously issued convertible debenture.

 

NOTE 4. NOTES PAYABLE

 

    June 30, 2018
David Koos ( Note 8)     227  
Bostonia Partners     3,000  
Notes payable   $ 3,227  

 

$227 lent to the Company by David Koos is due and payable at the demand of the holder and bears simple interest at a rate of 15% per annum.

 

$3,000 lent to the Company by Bostonia Partners is due and payable May 10 2017 and bears simple interest at a rate of 10% per annum.

 

NOTE 5. CONVERTIBLE NOTES PAYABLE

 

On March 8, 2016 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $100,000 for consideration consisting of $100,000 cash. The Note pays simple interest in the amount of 8% per annum . The maturity of the Note is three years from the issue date.

 

The Lender shall have the right from time to time to convert all or a part of the outstanding and unpaid principal amount of this Note into fully paid and non- assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Company into which such Common Stock shall hereafter be changed or reclassified pursuant to the following terms and conditions:

 

(a)For the period beginning on the Issue Date and ending 365 days subsequent to the Issue Date (“Year 1”) a 50% discount to the lowest Trading Price (as defined below) for the Common Stock during the ten (10) Trading Day (as defined below) period ending on the latest complete Trading Day prior to the Conversion Date or ten cents per share (whichever is greater).
(b)For the period beginning one day subsequent to the final day of Year One and ending 365 days subsequent to Year One (“Year 2”) a 35% discount to the lowest Trading Price (as defined below) for the Common Stock during the ten (10) Trading Day (as defined below) period ending on the latest complete Trading Day prior to the Conversion Date or ten cents per share (whichever is greater).

  

 11 

 

 

(iv)For the period beginning one day subsequent to the final day of Year 2 and ending 365 days subsequent to Year 2 (“Year 3”) a 25% discount to the lowest Trading Price (as defined below) for the Common Stock during the ten (10) Trading Day (as defined below) period ending on the latest complete Trading Day prior to the Conversion Date or ten cents per share (whichever is greater).
(d)“Trading Price” means the closing bid price on the Over-the-Counter Bulletin Board, or applicable trading market (the “OTCQB”) as reported by a reliable reporting service (“Reporting Service”) designated by the Lender (i.e. Bloomberg) or, if the OTCQB is not the principal trading market for such security, the closing bid price of such security on the principal securities exchange or trading market where such security is listed or traded or, if no closing bid price of such security is available in any of the foregoing manners, the average of the closing bid prices of any market makers for such security that are listed in the “pink sheets” by the National Quotation Bureau, Inc. If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by the Company and the Lender. “Trading Day” shall mean any day on which the Common Stock is tradable for any period on the OTCQB, or on the principal securities exchange or other securities market on which the Common Stock is then being traded. “Trading Volume” shall mean the number of shares traded on such Trading Day as reported by such Reporting Service. The Conversion Price shall be equitably adjusted for stock splits, stock dividends, rights offerings, combinations, recapitalization, reclassifications, extraordinary distributions and similar events by the Company relating to the Lender’s securities.

 

The Company shall have the right, exercisable on not less than five (5) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

Upon closing of a Transaction Event the Lender shall receive 0 .10% ( one tenth of one percent)of the consideration actually received by the Company from an unaffiliated third party as a result of the closing of a Transaction Event.

 

“Transaction Event” shall mean either of:

 

(a) The sale by the Company of the Company’s proprietary NR2F6 intellectual property to an unaffiliated third party

 

(b) The granting of a license by the Company to an unaffiliated third party granting that unaffiliated third party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property

 

The issuance of the Note amounted in a beneficial conversion feature of $42,600 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $ 9,845. As of June 30, 2018 $100,000 of the principal amount of the Note remains outstanding.

 

The amount by which the Note’s as converted value exceeds the principal amount as of June 30, 2018 is $0.

 

On April 6, 2016 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $50,000 for consideration consisting of $50,000 cash. The Note pays simple interest in the amount of 8% per annum . The maturity of the Note is three years from the issue date.

 

The Lender shall have the right from time to time to convert all or a part of the outstanding and unpaid principal amount of this Note into fully paid and non- assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Company into which such Common Stock shall hereafter be changed or reclassified pursuant to the following terms and conditions:

 

(a)For the period beginning on the Issue Date and ending 365 days subsequent to the Issue Date (“Year 1”) a 50% discount to the lowest Trading Price (as defined below) for the Common Stock during the ten (10) Trading Day (as defined below) period ending on the latest complete Trading Day prior to the Conversion Date or ten cents per share (whichever is greater).
(b)For the period beginning one day subsequent to the final day of Year One and ending 365 days subsequent to Year One (“Year 2”) a 35% discount to the lowest Trading Price (as defined below) for the Common Stock during the ten (10) Trading Day (as defined below) period ending on the latest complete Trading Day prior to the Conversion Date or ten cents per share (whichever is greater).
 12 

 

 

(iv)For the period beginning one day subsequent to the final day of Year 2 and ending 365 days subsequent to Year 2 (“Year 3”) a 25% discount to the lowest Trading Price (as defined below) for the Common Stock during the ten (10) Trading Day (as defined below) period ending on the latest complete Trading Day prior to the Conversion Date or ten cents per share (whichever is greater).
(d)“Trading Price” means the closing bid price on the Over-the-Counter Bulletin Board, or applicable trading market (the “OTCQB”) as reported by a reliable reporting service (“Reporting Service”) designated by the Lender (i.e. Bloomberg) or, if the OTCQB is not the principal trading market for such security, the closing bid price of such security on the principal securities exchange or trading market where such security is listed or traded or, if no closing bid price of such security is available in any of the foregoing manners, the average of the closing bid prices of any market makers for such security that are listed in the “pink sheets” by the National Quotation Bureau, Inc. If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by the Company and the Lender. “Trading Day” shall mean any day on which the Common Stock is tradable for any period on the OTCQB, or on the principal securities exchange or other securities market on which the Common Stock is then being traded. “Trading Volume” shall mean the number of shares traded on such Trading Day as reported by such Reporting Service. The Conversion Price shall be equitably adjusted for stock splits, stock dividends, rights offerings, combinations, recapitalization, reclassifications, extraordinary distributions and similar events by the Company relating to the Lender’s securities.

The Company shall have the right, exercisable on not less than five (5) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

Upon closing of a Transaction Event the Lender shall receive 0 .10% ( one tenth of one percent)of the consideration actually received by the Company from an unaffiliated third party as a result of the closing of a Transaction Event.

 

“Transaction Event” shall mean either of:

 

(a)The sale by the Company of the Company’s proprietary NR2F6 intellectual property to an unaffiliated third party
(b)The granting of a license by the Company to an unaffiliated third party granting that unaffiliated third party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property

The issuance of the Note amounted in a beneficial conversion feature of $9,900 which is amortized under the Interest Method over the life of the Note. As of June 30 2018 the unamortized discount on the convertible note outstanding is $ 2,557. As of June 30, 2018 $50,000 of the principal amount of the Note remains outstanding. The amount by which the Note’s as converted value exceeds the principal amount as of June 30, 2018 is $0.

 

On September 8, 2016 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $50,000 for consideration consisting of $50,000 cash. The Note pays simple interest in the amount of 10% per annum . The maturity of the Note is one year from the issue date.

 

The Lender shall have the right from time to time to convert all or a part of the outstanding and unpaid principal amount of this Note into fully paid and non- assessable shares of Common Stock and/or Series A Preferred Stock, as such Stock exists on the Issue Date, or any shares of capital stock or other securities of the Company into which such Stock shall hereafter be changed or reclassified at a conversion price of $0.0125 per share.

 

The Company shall have the right, exercisable on not less than three (3) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

 13 

 

 

The issuance of the Note amounted in a beneficial conversion feature of $50,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $ 0. As of June 30, 2018 $50,000 of the principal amount of the Note remains outstanding.

The amount by which the Note’s as converted value exceeds the principal amount as of June 30, 2018 is :

 

(a)$42,000 if the entire principal amount is converted into common stock
(b)$62,000 if the entire principal amount is converted into Series A Preferred stock

On September 20, 2016 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $50,000 for consideration consisting of $50,000 cash. The Note pays simple interest in the amount of 10% per annum . The maturity of the Note is one year from the issue date.

 

The Lender shall have the right from time to time to convert all or a part of the outstanding and unpaid principal amount of this Note into fully paid and non- assessable shares of Common Stock and/or Series A Preferred Stock, as such Stock exists on the Issue Date, or any shares of capital stock or other securities of the Company into which such Stock shall hereafter be changed or reclassified at a conversion price of $0.0125 per share.

 

The Company shall have the right, exercisable on not less than three (3) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

The issuance of the Note amounted in a beneficial conversion feature of $50,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $ 0. As of June 30, 2018 $50,000 of the principal amount of the Note remains outstanding.

The amount by which the Note’s as converted value exceeds the principal amount as of June 30, 2018 is :

 

(a)$42,000 if the entire principal amount is converted into common stock
(b)$62,000 if the entire principal amount is converted into Series A Preferred stock

On October 7, 2016 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $50,000 for consideration consisting of $50,000 cash. The Note pays simple interest in the amount of 10% per annum . The maturity of the Note is two years from the issue date.

 

The Lender shall have the right from time to time to convert all or a part of the outstanding and unpaid principal amount of this Note into fully paid and non- assessable shares of Common Stock and/or Series A Preferred Stock, as such Stock exists on the Issue Date, or any shares of capital stock or other securities of the Company into which such Stock shall hereafter be changed or reclassified at a conversion price of $0.0125 per share.

 

 14 

 

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

 The issuance of the Note amounted in a beneficial conversion feature of $50,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $7,191. As of June 30, 2018 $50,000 of the principal amount of the Note remains outstanding.

The amount by which the Note’s as converted value exceeds the principal amount as of June 30, 2018 is :

 

(a)$42,000 if the entire principal amount is converted into common stock
(b)$62,000 if the entire principal amount is converted into Series A Preferred stock

On October 31, 2016 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $50,000 for consideration consisting of $50,000 cash. The Note pays simple interest in the amount of 10% per annum . The maturity of the Note is two years from the issue date.

 

The Lender shall have the right from time to time to convert all or a part of the outstanding and unpaid principal amount of this Note into fully paid and non- assessable shares of Common Stock and/or Series A Preferred Stock, as such Stock exists on the Issue Date, or any shares of capital stock or other securities of the Company into which such Stock shall hereafter be changed or reclassified at a conversion price of $0.0125 per share.

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

The issuance of the Note amounted in a beneficial conversion feature of $50,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $8835. As of June 30, 2018 $50,000 of the principal amount of the Note remains outstanding.

The amount by which the Note’s as converted value exceeds the principal amount as of June 30, 2018 is :

 

(a)$42,000if the entire principal amount is converted into common stock
(b)$62,000 if the entire principal amount is converted into Series A Preferred stock

On October 31, 2016 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $50,000 for consideration consisting of $50,000 cash. The Note pays simple interest in the amount of 10% per annum . The maturity of the Note is two years from the issue date.

 

The Lender shall have the right from time to time to convert all or a part of the outstanding and unpaid principal amount of this Note into fully paid and non- assessable shares of Common Stock and/or Series A Preferred Stock, as such Stock exists on the Issue Date, or any shares of capital stock or other securities of the Company into which such Stock shall hereafter be changed or reclassified at a conversion price of $0.0125 per share.

  

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

The issuance of the Note amounted in a beneficial conversion feature of $50,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $ 8,835 As of June 30, 2018 $50,000 of the principal amount of the Note remains outstanding.

 

 15 

 

 

The amount by which the Note’s as converted value exceeds the principal amount as of June 30, 2018 is:

 

(a)$42,000 if the entire principal amount is converted into common stock
(b)$62,000 if the entire principal amount is converted into Series A Preferred stock

 

 On October 31, 2016 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $50,000 for consideration consisting of $50,000 cash. The Note pays simple interest in the amount of 10% per annum . The maturity of the Note is two years from the issue date.

 

The Lender shall have the right from time to time to convert all or a part of the outstanding and unpaid principal amount of this Note into fully paid and non- assessable shares of Common Stock and/or Series A Preferred Stock, as such Stock exists on the Issue Date, or any shares of capital stock or other securities of the Company into which such Stock shall hereafter be changed or reclassified at a conversion price of $0.0125 per share.

  

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

The issuance of the Note amounted in a beneficial conversion feature of $50,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $ 8,835 As of June 30, 2018 $50,000 of the principal amount of the Note remains outstanding.

The amount by which the Note’s as converted value exceeds the principal amount as of June 30, 2018 is :

 

(a)$42,000 if the entire principal amount is converted into common stock
(b)$62,000 if the entire principal amount is converted into Series A Preferred stock

On December 22, 2016 (“Issue date”) the Company issued a fifth Convertible Note (“Note”) in the face amount of $40,000 for consideration consisting of $40,000 cash. The Note pays simple interest in the amount of 10% per annum . The maturity of the Note is one year from the issue date.

 

The Lender shall have the right from time to time to convert all or a part of the outstanding and unpaid principal amount of this Note into fully paid and non- assessable shares of Common Stock and/or Series A Preferred Stock, as such Stock exists on the Issue Date, or any shares of capital stock or other securities of the Company into which such Stock shall hereafter be changed or reclassified at a conversion price of $0.01 per share.

  

 16 

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

The issuance of the Note amounted in a beneficial conversion feature of $40,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $ 0. As of June 30, 2018 $40,000 of the principal amount of the Note remains outstanding.

The amount by which the Note’s as converted value exceeds the principal amount as of June 30, 2018 is :

 

(a)$52,000 if the entire principal amount is converted into common stock
(b)$72,000 if the entire principal amount is converted into Series A Preferred stock

On March 1, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $75,000 for consideration consisting of $75,000 cash. The Note pays simple interest in the amount of 10% per annum . The maturity of the Note is March 1, 2020. All or part of the principal is convertible at any time at the demand of the Lender into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.0125 per common share.

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.05 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company(“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note. As of June 30 , 2018 $75,000 of the principal amount of the Note remains outstanding.

 

 17 

 

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $260,869 was recognized by the Company as of June 30, 2018.

 

The issuance of the Note amounted in a discount of $75,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $ 42,153.

 

On March 9, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $25,000 for consideration consisting of $25,000 cash. The Note pays simple interest in the amount of 10% per annum . The maturity of the Note is March 9, 2020. All or part of the principal is convertible at any time at the demand of the Lender into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.025 per common share.

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.05 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company(“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note. As of June 30, 2018 $25,000 of the principal amount of the Note remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $83,333 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount $25,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $ 14,233.

 

On March 13, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $50,000 for consideration consisting of $50,000 cash. The Note pays simple interest in the amount of 10% per annum . The maturity of the Note is February 24, 2020. All or part of the principal is convertible at any time at the demand of the Lender into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.0125 per common share.

 

 18 

 

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.05 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company(“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note. As of June 30, 2018 $50,000 of the principal amount of the Note remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $166,667 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $50,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $ 29,470.

 

On March 31, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $50,000 for consideration consisting of $50,000 cash. The Note pays simple interest in the amount of 10% per annum . The maturity of the Note is March 31, 2020. All or part of the principal is convertible at any time at the demand of the Lender into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.0125 per common share.

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.05 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company(“Prepayment Date”)

 

 19 

 

 

In the event part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note. As of June 30, 2018 $50,000 of the principal amount of the Note remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $166,667 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $50,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $30,109.

 

On April 19, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $25,000 for consideration consisting of $25,000 cash. The Note pays simple interest in the amount of 10% per annum . The maturity of the Note is April 19, 2020. All or part of the principal is convertible at any time at the demand of the Lender into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.0125 per common share.

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.05 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company(“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note

 

As of June 30, 2018 $25,000 of the principal amount of the Note remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $83,333 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $25,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $15,054.

 

 20 

 

 

On April 19, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $50,000 for consideration consisting of $50,000 cash. The Note pays simple interest in the amount of 10% per annum . The maturity of the Note is April 19, 2020. All or part of the principal is convertible at any time at the demand of the Lender into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.0125 per common share.

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.05 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company(“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note

 

As of June 30, 2018 $50,000 of the principal amount of the Note remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $166,667 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $50,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $30,109.

 

On May 5, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $200,000 for consideration consisting of $200,000 cash. The Note pays simple interest in the amount of 10% per annum . The maturity of the Note is May 5, 2020. The Note is convertible into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.025 per common share as of the date which is the earlier of:

 

(i)One day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of the Company. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions, whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.
(ii)One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company tendering a fixed number of their equity securities (“Tender Offer”).
(iii)That date which is twenty four (24) months subsequent to the date of execution of this Note.

 21 

 

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.05 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company(“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note

 

As of June 30, 2018 $200,000 of the principal amount of the Note remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $666,667 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $200,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $123,357.

 

On May 10, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $100,000 for consideration consisting of $100,000 cash. The Note pays simple interest in the amount of 10% per annum . The maturity of the Note is May 9, 2020. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.025 per common share as of the date which is the earlier of:

 

(i)One day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of the Company. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions, whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.
(ii)One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company tendering a fixed number of their equity securities (“Tender Offer”).
(iii)That date which is twenty four (24) months subsequent to the date of execution of this Note.

 

 22 

 

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.05 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company(“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note

 

As of June 30, 2018 $100,000 of the principal amount of the Note remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $333,333 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $100,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $60,082.

 

On May 19, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $50,000 for consideration consisting of $50,000 cash. The Note pays simple interest in the amount of 10% per annum . The maturity of the Note is May 19, 2020. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.0125 per common share as of the date which is the earlier of:

 

(i)One day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of the Company or KCL Therapeutics. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions, whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.
(ii)One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company tendering a fixed number of their equity securities (“Tender Offer”).
(iii)One day subsequent to a “Transaction Event”)

 

 23 

 

 

Transaction Event” shall mean either of:

 

(a)The sale by the Company or by KCL Therapeutics , Inc. of the Company’s proprietary NR2F6 intellectual property to an unaffiliated third party
(b)The granting of a license by the Company or by KCL Therapeutics , Inc to an unaffiliated third party granting that unaffiliated third party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property
(iv)That date which is twenty four (24) months subsequent to the date of execution of this Note.

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.0125 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company(“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note

 

As of June 30, 2018 $50,000 of the principal amount of the Note remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $166,667 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $50,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $30,109.

 

 24 

 

 

On June 26, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $150,000 for consideration consisting of $150,000 cash. The Note pays simple interest in the amount of 10% per annum . The maturity of the Note is June 16, 2020. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.025 per common share as of the date which is the earlier of:

 

(i)One day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of the Company or KCL Therapeutics. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions, whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.
(ii)One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company tendering a fixed number of their equity securities (“Tender Offer”).

(iii)One day subsequent to a “Transaction Event”)

 

Transaction Event” shall mean either of:

 

(a)The sale by the Company or by KCL Therapeutics , Inc. of the Company’s proprietary NR2F6 intellectual property to an unaffiliated third party
(b)The granting of a license by the Company or by KCL Therapeutics , Inc to an unaffiliated third party granting that unaffiliated third party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property
(iv)That date which is twenty four (24) months subsequent to the date of execution of this Note.

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.025 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company(“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note

 

As of June 30, 2018 $150,000 of the principal amount of the Note remains outstanding.

 

 25 

 

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $500,000 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $150,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $99,171.

 

On June 28, 2016 the Company issued a Convertible Note (“Note”) in the face amount of $79,000 for consideration consisting of $75,000 cash. The Note bears a one time interest charge of 10% of the principal amount of $79,000 and is convertible into the Common Stock of the Company at a price per share equal to the lower of 60% of the lowest trade price in the 25 trading days prior to conversion or 0.0365 however conversions cannot be effected for a price less than $0.01 per common share except in the event of certain breaches of the Terms and Conditions of the Note by the Company. The Note matures 8 months from issuance. The issuance of the Note amounted in a discount of $79,000 which is amortized under the Interest Method over the life of the Note. The Company recognized an Original Issue Discount of $4,000 in connection with the issuance of the Note.On July 7, 2017 the Company issued 308,219 shares of common stock as an origination fee in connection with the issuance of this Note. The common stock, valued at $12,060, was recorded at a discount which is amortized over the life of the Note and was fully amortized as of the quarter ended December 31, 2017. During the quarter ended December 31, 2017 the Company issued 365,741 common shares as payment for interest on the Note and issued 3,611,111 common shares in conversion of $78,000 of principal indebtedness.

As of June 30, 2018 the unamortized discount on the convertible note outstanding is $0. As of June 30, 2018 $1,000 of the Note remains outstanding.

 

On July 24, 2017 the Company issued a Convertible Note (“Note”) in the face amount of $60,000 for consideration consisting of $60,000 cash. The Note bears simple interest at the rate of 10% per annum and is convertible into the Common Stock of the Company at a price per share equal to the lower of 75% of the lowest trade price of the date immediately prior to conversion or 0.025 per share. The Note matures July 24, 2020. The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

As of June 30, 2018 $60,000 of the principal amount of the Note remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $200,000 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $60,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $41,332

 

 26 

 

 

On August 23, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $85,000 for consideration consisting of $74,750 cash and payment on behalf of the Company of 10,250 of expenses incurred in connection with the issuance of the Note. The Note pays simple interest in the amount of 8% per annum. The maturity of the Note is August 23, 2018. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to 65% of the lowest Volume Weighted Average Price of the Common Stock of the Company as reported on the National Quotations Bureau OTC Markets exchange upon which the Company's shares are traded or any exchange upon which the Common Stock of the Company may be traded in the future , for the fourteen prior trading days including the day upon which a Notice of Conversion is received by the Company or its transfer agent. . In no event shall the Holder be allowed to effect a conversion if such conversion, along with all other shares of Company Common Stock beneficially owned by the Holder and its affiliates would exceed 9.9% of the outstanding shares of the Common Stock of the Company.

 

The Note may be prepaid with the following penalties:

 

Time Period  Payment Premium
<=60 days after note issuance  115% of the sum of principal  plus accrued interest
>60 days <= 120 days after note issuance  125% of the sum of principal  plus accrued interest
>120 days <=180 days  afternote·issuance  135% of the sum· of principal plus accrued· interest

 

This Note may not be- prepaid after the 180th day.

 

As of June 30, 2018 $85,000 of the principal amount of the Note remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $68,750 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $85,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $12,609.

 

 27 

 

 

On September 7, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $40,000 for consideration consisting of $38,000 cash and payment on behalf of the Company of $2,000 of expenses incurred in connection with the issuance of the Note. The Note pays simple interest in the amount of 8% per annum. The maturity of the Note is September 7, 2018. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to 65% of the lowest Trading Price of the Common Stock of the Company as reported on the National Quotations Bureau OTC Markets exchange upon which the Company's shares are traded or any exchange upon which the Common Stock of the Company may be traded in the future , for the twenty prior trading days including the day upon which a Notice of Conversion is received by the Company or its transfer agent. . In no event shall the Holder be allowed to effect a conversion if such conversion, along with all other shares of Company Common Stock beneficially owned by the Holder and its affiliates would exceed 9.9% of the outstanding shares of the Common Stock of the Company.

 

The Note may be prepaid with the following penalties:

 

Time Period  Payment Premium
<=60 days after note issuance  115% of the sum of principal  plus accrued interest
>60 days <= 120 days after note issuance  125% of the sum of principal  plus accrued interest
>120 days <=180 days  afternote·issuance  135% of the sum· of principal plus accrued· interest

 

This Note may not be prepaid after the 180th day.

 

As of June 30, 2018 $25,000 of the Note Remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $20,147 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $40,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $7,645.

 

On September 7, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $40,000 for consideration consisting of promissory Note payable to the Company in the amount of 40,000. The Note pays simple interest in the amount of 8% per annum. The maturity of the Note is September 7, 2018. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to 65% of the lowest Trading Price of the Common Stock of the Company as reported on the National Quotations Bureau OTC Markets exchange upon which the Company's shares are traded or any exchange upon which the Common Stock of the Company may be traded in the future , for the twenty prior trading days including the day upon which a Notice of Conversion is received by the Company or its transfer agent. . In no event shall the Holder be allowed to effect a conversion if such conversion, along with all other shares of Company Common Stock beneficially owned by the Holder and its affiliates would exceed 9.9% of the outstanding shares of the Common Stock of the Company.

 

As of June 30, 2018 $40,000 of the Note Remains outstanding.

 

 28 

 

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $32,234 was recognized by the Company as of June 30 2018. The issuance of the Note amounted in a discount of $40,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $7645.

 

On September 7, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $40,000 for consideration consisting of $38,000 cash and payment on behalf of the Company of $2,000 of expenses incurred in connection with the issuance of the Note. The Note pays simple interest in the amount of 8% per annum. The maturity of the Note is September 7, 2018. The Note may be converted into shares of the Series A Preferred stock of Regen at a price per share ( “Conversion Price”) equivalent to 65% of the lowest Trading price of the Series A Preferred Stock of the Company as reported on the National Quotations Bureau OTC Markets exchange upon which the Company's shares are traded or any exchange upon which the Common Stock of the Company may be traded in the future , for the twenty prior trading days including the day upon which a Notice of Conversion is received by the Company or its transfer agent. . In no event shall the Holder be allowed to effect a conversion if such conversion, along with all other shares of Company Common Stock beneficially owned by the Holder and its affiliates would exceed 9.9% of the outstanding shares of the Common Stock of the Company.

 

The Note may be prepaid with the following penalties:

 

Time Period  Payment Premium
<=60 days after note issuance  115% of the sum of principal  plus accrued interest
>60 days <= 120 days after note issuance  125% of the sum of principal  plus accrued interest
>120 days <=180 days  afternote·issuance  135% of the sum· of principal plus accrued· interest

 

This Note may not be prepaid after the 180th day.

 

As of June 30, 2018 $33,000 of the Note Remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $106,615 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $40,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $7,671.

 

 29 

 

 

On August 29, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $25,000 for consideration consisting of $25,000 cash. The Note pays simple interest in the amount of 10% per annum. The maturity of the Note is August 29, 2020. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.025 per common share as of the date which is the earlier of:

 

(i)One day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of the Company or KCL Therapeutics. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions, whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.
(ii)One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company tendering a fixed number of their equity securities (“Tender Offer”).
(iii)One day subsequent to a “Transaction Event”)

 

Transaction Event” shall mean either of:

 

(a)The sale by the Company or by KCL Therapeutics , Inc. of the Company’s proprietary NR2F6 intellectual property to an unaffiliated third party
(b)The granting of a license by the Company or by KCL Therapeutics , Inc to an unaffiliated third party granting that unaffiliated third party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property
(iv)That date which is twenty four (24) months subsequent to the date of execution of this Note.

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.025 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company(“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note

 

As of June 30, 2018 $25,000 of the principal amount of the Note remains outstanding.

 

 30 

 

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $83,333 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $25,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $18,042.

 

On September 22, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $50,000 for consideration consisting of $50,000 cash. The Note pays simple interest in the amount of 10% per annum. The maturity of the Note is September 21, 2020. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.0125 per common share as of the date which is the earlier of:

 

(i)One day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of the Company or KCL Therapeutics. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions, whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.
(ii)One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company tendering a fixed number of their equity securities (“Tender Offer”).
(iii)One day subsequent to a “Transaction Event”)

Transaction Event” shall mean either of:

 

(a)The sale by the Company or by KCL Therapeutics , Inc. of the Company’s proprietary NR2F6 intellectual property to an unaffiliated third party
(b)The granting of a license by the Company or by KCL Therapeutics , Inc to an unaffiliated third party granting that unaffiliated third party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property
(iv)That date which is twenty four (24) months subsequent to the date of execution of this Note.

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.025 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company (“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note

 

As of June 30, 2018 $50,000 of the principal amount of the Note remains outstanding.

 

 31 

 

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $173,913 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $50,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $37,317

 

On September 22, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $100,000 for consideration consisting of $100,000 cash. The Note pays simple interest in the amount of 10% per annum. The maturity of the Note is September 22, 2020. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.025 per common share as of the date which is the earlier of:

 

(i)One day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of the Company or KCL Therapeutics. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions, whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.
(ii)One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company tendering a fixed number of their equity securities (“Tender Offer”).
(iii)One day subsequent to a “Transaction Event”)

 

Transaction Event” shall mean either of:

 

(a)The sale by the Company or by KCL Therapeutics , Inc. of the Company’s proprietary NR2F6 intellectual property to an unaffiliated third party
(b)The granting of a license by the Company or by KCL Therapeutics , Inc to an unaffiliated third party granting that unaffiliated third party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property
(iv)That date which is twenty four (24) months subsequent to the date of execution of this Note.

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.025 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company(“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note

 

As of June 30, 2018 $100,000 of the principal amount of the Note remains outstanding.

 

 32 

 

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $350,877 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $100,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $74,361.

 

On September 25, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $50,000 for consideration consisting of $50,000 cash. The Note pays simple interest in the amount of 10% per annum. The maturity of the Note is September 25, 2020. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.0125 per common share as of the date which is the earlier of:

 

(i)One day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of the Company or KCL Therapeutics. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions, whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.
(ii)One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company tendering a fixed number of their equity securities (“Tender Offer”).

(iii)One day subsequent to a “Transaction Event”)

 

Transaction Event” shall mean either of:

 

(a)The sale by the Company or by KCL Therapeutics , Inc. of the Company’s proprietary NR2F6 intellectual property to an unaffiliated third party
(b)The granting of a license by the Company or by KCL Therapeutics , Inc to an unaffiliated third party granting that unaffiliated third party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property
(iv)That date which is twenty four (24) months subsequent to the date of execution of this Note.

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.025 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company (“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note

 

As of June 30, 2018 $50,000 of the principal amount of the Note remains outstanding.

 

 33 

 

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $175,439 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $50,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $37,317.

 

On October 3, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $50,000 for consideration consisting of $50,000 cash. The Note pays simple interest in the amount of 10% per annum. The maturity of the Note is October 3, 2020. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.025 per common share as of the date which is the earlier of:

 

(i)One day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of the Company or KCL Therapeutics. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions, whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.
(ii)One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company tendering a fixed number of their equity securities (“Tender Offer”).
(iii)One day subsequent to a “Transaction Event”)

 

Transaction Event” shall mean either of:

 

(a)The sale by the Company or by KCL Therapeutics , Inc. of the Company’s proprietary NR2F6 intellectual property to an unaffiliated third party
(b)The granting of a license by the Company or by KCL Therapeutics , Inc to an unaffiliated third party granting that unaffiliated third party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property
(iv)That date which is twenty four (24) months subsequent to the date of execution of this Note.

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.025 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company (“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note

 

As of June 30 2018, 2017 $50,000 of the principal amount of the Note remains outstanding.

 

 34 

 

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $173,913 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $50,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $37,819.

 

On October 4, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $40,000 for consideration consisting of $40,000 cash. The Note pays simple interest in the amount of 10% per annum. The maturity of the Note is October 4, 2020. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.025 per common share as of the date which is the earlier of:

 

(i)One day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of the Company or KCL Therapeutics. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions, whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.
(ii)One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company tendering a fixed number of their equity securities (“Tender Offer”).
(iii)One day subsequent to a “Transaction Event”)

 

Transaction Event” shall mean either of:

 

(a)The sale by the Company or by KCL Therapeutics , Inc. of the Company’s proprietary NR2F6 intellectual property to an unaffiliated third party
(b)The granting of a license by the Company or by KCL Therapeutics , Inc to an unaffiliated third party granting that unaffiliated third party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property
(iv)That date which is twenty four (24) months subsequent to the date of execution of this Note.

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.025 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company (“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note

 

As of June 30, 2018 $40,000 of the principal amount of the Note remains outstanding.

 

 35 

 

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $139,130 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $40,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $30,291.

 

On October 16, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $100,000 for consideration consisting of $100,000 cash. The Note pays simple interest in the amount of 10% per annum. The maturity of the Note is October 9, 2020. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.025 per common share as of the date which is the earlier of:

 

(i)One day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of the Company or KCL Therapeutics. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions, whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.
(ii)One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company tendering a fixed number of their equity securities (“Tender Offer”).
(iii)One day subsequent to a “Transaction Event”)

 

Transaction Event” shall mean either of:

 

(a)The sale by the Company or by KCL Therapeutics , Inc. of the Company’s proprietary NR2F6 intellectual property to an unaffiliated third party
(b)The granting of a license by the Company or by KCL Therapeutics , Inc to an unaffiliated third party granting that unaffiliated third party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property
(iv)That date which is twenty four (24) months subsequent to the date of execution of this Note.

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.025 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company (“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note

 

As of June 30, 2018 $100,000 of the principal amount of the Note remains outstanding.

 

 36 

 

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $347,826 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $100,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $76,186.

 

On November 1, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $25,000 for consideration consisting of $25,000 cash. The Note pays simple interest in the amount of 10% per annum. The maturity of the Note is November 1, 2020. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.025 per common share as of the date which is the earlier of:

 

(i)One day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of the Company or KCL Therapeutics. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions, whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.
(ii)One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company tendering a fixed number of their equity securities (“Tender Offer”).
(iii)One day subsequent to a “Transaction Event”)

Transaction Event” shall mean either of:

 

(a)The sale by the Company or by KCL Therapeutics , Inc. of the Company’s proprietary NR2F6 intellectual property to an unaffiliated third party
(b)The granting of a license by the Company or by KCL Therapeutics , Inc to an unaffiliated third party granting that unaffiliated third party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property
(iv)That date which is twenty four (24) months subsequent to the date of execution of this Note.

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.025 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company (“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note

 

As of June 30, 2018 $25,000 of the principal amount of the Note remains outstanding.

 

 37 

 

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $86,957 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $25,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $19,571.

 

On November 1, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $25,000 for consideration consisting of $25,000 cash. The Note pays simple interest in the amount of 10% per annum. The maturity of the Note is November 1, 2020. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.025 per common share as of the date which is the earlier of:

 

(i)One day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of the Company or KCL Therapeutics. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions, whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.
(ii)One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company tendering a fixed number of their equity securities (“Tender Offer”).
(iii)One day subsequent to a “Transaction Event”)

Transaction Event” shall mean either of:

 

(a)The sale by the Company or by KCL Therapeutics , Inc. of the Company’s proprietary NR2F6 intellectual property to an unaffiliated third party
(b)The granting of a license by the Company or by KCL Therapeutics , Inc to an unaffiliated third party granting that unaffiliated third party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property
(iv)That date which is twenty four (24) months subsequent to the date of execution of this Note.

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.025 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company (“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note

 

As of June 30, 2018 $25,000 of the principal amount of the Note remains outstanding.

 

 38 

 

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $86,957 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $25,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $19,571.

 

On October 9, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $100,000 for consideration consisting of $100,000 cash. The Note pays simple interest in the amount of 10% per annum. The maturity of the Note is October 9, 2020. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.025 per common share as of the date which is the earlier of:

 

(i)One day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of the Company or KCL Therapeutics. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions, whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.
(ii)One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company tendering a fixed number of their equity securities (“Tender Offer”).
(iii)One day subsequent to a “Transaction Event”)

Transaction Event” shall mean either of:

 

(a)The sale by the Company or by KCL Therapeutics , Inc. of the Company’s proprietary NR2F6 intellectual property to an unaffiliated third party
(b)The granting of a license by the Company or by KCL Therapeutics , Inc to an unaffiliated third party granting that unaffiliated third party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property
(iv)That date which is twenty four (24) months subsequent to the date of execution of this Note.

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.025 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company (“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note

 

As of June 30, 2018 $100,000 of the principal amount of the Note remains outstanding.

 

 39 

 

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $347,826 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $100,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $76,186.

 

On December 15, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $35,000 for consideration consisting of $35,000 cash. The Note pays simple interest in the amount of 10% per annum. The maturity of the Note is December 15, 2020. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.025 per common share as of the date which is the earlier of:

 

(i)One day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of the Company or KCL Therapeutics. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions, whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.
(ii)One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company tendering a fixed number of their equity securities (“Tender Offer”).
(iii)One day subsequent to a “Transaction Event”)

Transaction Event” shall mean either of:

 

(a)The sale by the Company or by KCL Therapeutics , Inc. of the Company’s proprietary NR2F6 intellectual property to an unaffiliated third party
(b)The granting of a license by the Company or by KCL Therapeutics , Inc to an unaffiliated third party granting that unaffiliated third party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property
(iv)That date which is twenty four (24) months subsequent to the date of execution of this Note.

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.025 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company (“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note

 

As of June 30, 2018 $35,000 of the principal amount of the Note remains outstanding.

 

 40 

 

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $127,826 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $35,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $28,804.

 

On December 20, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $100,000 for consideration consisting of $100,000 cash. The Note pays simple interest in the amount of 10% per annum. The maturity of the Note is December 20, 2020. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.025 per common share as of the date which is the earlier of:

 

(i)One day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of the Company or KCL Therapeutics. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions, whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.
(ii)One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company tendering a fixed number of their equity securities (“Tender Offer”).
(iv)One day subsequent to a “Transaction Event”)

Transaction Event” shall mean either of:

 

(a)The sale by the Company or by KCL Therapeutics , Inc. of the Company’s proprietary NR2F6 intellectual property to an unaffiliated third party
(b)The granting of a license by the Company or by KCL Therapeutics , Inc to an unaffiliated third party granting that unaffiliated third party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property
(v)That date which is twenty four (24) months subsequent to the date of execution of this Note.

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.025 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company (“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note

 

As of June 30, 2018 $100,000 of the principal amount of the Note remains outstanding.

 

 41 

 

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $365,217 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $100,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $82,755.

 

On December 20, 2017 the Company issued a Convertible Note (“Note”) in the face amount of $115,000 for consideration consisting of $100,000 cash and payment on behalf of the Company of 13,250 of expenses incurred in connection with the issuance of the Note. The Note also carries an Original Issue Discount of $1,750.The Note pays simple interest in the amount of 8% per annum. The maturity of the Note is December 6, 2018. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to 65% of the lowest Trading Price of the Common Stock of the Company as reported on the National Quotations Bureau OTC Markets exchange upon which the Company's shares are traded or any exchange upon which the Common Stock of the Company may be traded in the future , for the fourteen prior trading days including the day upon which a Notice of Conversion is received by the Company or its transfer agent. In no event shall the Holder be allowed to effect a conversion if such conversion, along with all other shares of Company Common Stock beneficially owned by the Holder and its affiliates would exceed 9.9% of the outstanding shares of the Common Stock of the Company.

 

The Note may be prepaid with the following penalties:

 

Time Period  Payment Premium
<=60 days after note issuance  115% of the sum of principal  plus accrued interest
>60 days <= 120 days after note issuance  125% of the sum of principal  plus accrued interest
>120 days <=180 days  afternote·issuance  135% of the sum· of principal plus accrued· interest

 

This Note may not be prepaid after the 180th day.

 

As of June 30, 2018 $115,000 of the Note Remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $109,524 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $115,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $51,041.

 

 42 

 

 

On December 6, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $50,000 for consideration consisting of $50,000 cash. The Note pays simple interest in the amount of 10% per annum. The maturity of the Note is December 6, 2020. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.025 per common share as of the date which is the earlier of:

 

(i)One day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of the Company or KCL Therapeutics. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions, whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.
(ii)One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company tendering a fixed number of their equity securities (“Tender Offer”).
(iv)One day subsequent to a “Transaction Event”)

 

Transaction Event” shall mean either of:

 

(a)The sale by the Company or by KCL Therapeutics , Inc. of the Company’s proprietary NR2F6 intellectual property to an unaffiliated third party
(b)The granting of a license by the Company or by KCL Therapeutics , Inc to an unaffiliated third party granting that unaffiliated third party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property
(v)That date which is twenty four (24) months subsequent to the date of execution of this Note.

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.025 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company (“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note

 

As of June 30, 2018 $50,000 of the principal amount of the Note remains outstanding.

 

 43 

 

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $182,609 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $50,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $40,739.

 

On January 24, 2018 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $25,000 for consideration consisting of $25,000 cash. The Note pays simple interest in the amount of 10% per annum. The maturity of the Note is December 6, 2020. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.025 per common share as of the date which is the earlier of:

 

(i)One day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of the Company or KCL Therapeutics. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions, whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.
(ii)One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company tendering a fixed number of their equity securities (“Tender Offer”).
(iv)One day subsequent to a “Transaction Event”)

Transaction Event” shall mean either of:

 

(a)The sale by the Company or by KCL Therapeutics , Inc. of the Company’s proprietary NR2F6 intellectual property to an unaffiliated third party
(b)The granting of a license by the Company or by KCL Therapeutics , Inc to an unaffiliated third party granting that unaffiliated third party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property
(v)That date which is twenty four (24) months subsequent to the date of execution of this Note.

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.025 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company (“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note

 

As of June 30, 2018 $25,000 of the principal amount of the Note remains outstanding.

 

 44 

 

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $91,304 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $25,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $21,275.

 

On February 28, 2018 (“Issue date”) the Company issued a two Convertible Notes (“Notes”) in the aggregate face amount of $100,000 for consideration consisting of $100,000 cash. The Note pays simple interest in the amount of 10% per annum. The maturity of the Notes is February 28, 2021. The Notes may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.025 per common share as of the date which is the earlier of:

 

(i)One day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of the Company or KCL Therapeutics. For purposes of these Notes, a Change of Control shall be defined as any transaction or series of transactions, whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.
(ii)One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company tendering a fixed number of their equity securities (“Tender Offer”).
(iv)One day subsequent to a “Transaction Event”)

 

Transaction Event” shall mean either of:

 

(a)The sale by the Company or by KCL Therapeutics , Inc. of the Company’s proprietary NR2F6 intellectual property to an unaffiliated third party
(b)The granting of a license by the Company or by KCL Therapeutics , Inc to an unaffiliated third party granting that unaffiliated third party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property
(v)That date which is twenty four (24) months subsequent to the date of execution of this Note.

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Notes in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the notes, or if the Lender chooses not to convert the remaining amount of the notes into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Notes into Common shares of the Company. The warrants shall have a strike price of $0.025 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Notes on or prior to the close of business on the three (3) month anniversary of the date that the Notes shall have been prepaid by the Company (“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Notes, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Notes

 

As of June 30, 2018 $100,000 of the principal amount of the Notes remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $365,217 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $100,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $88,959.

On February 26, 2018 the Company issued a Convertible Note (“Note”)in the principal amount of $115,000 for net consideration of $100,000. The Company recognized an Original Issue Discount of $15,000 in connection with the Note. The Note bears simple interest of 12%.The Note matures on February 26, 2019.

 

The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to a 35% discount to the lowest trading price during the previous 14 trading days up to the conversion notice. The Note and accrued interest on the Note may be prepaid by the Company on or prior to the date which occurs 180 days after the issuance date at a cash redemption premium of 135%.

 

As of June 30, 2018 115,000 of the principal amount of the Notes remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $100,000 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $115,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $76,246.

 

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On May 18, 2018 the Company issued a Convertible Note (“Note”)in the principal amount of $114,000 for net consideration of $100,000. The Company recognized an Original Issue Discount of $14,000 in connection with the Note. The Note bears simple interest of 10%.The Note matures on February 18, 2019.

 

The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to equal the lesser of (i) the lowest Trading Price during the previous twenty-five (25) Trading Day period ending on the latest complete Trading Day prior to the date of the Note and (ii) the Variable Conversion Price. “Variable Conversion Price” shall mean 50% multiplied by the Market Price (representing a discount rate of 50%). “Market Price” means the lowest Trading Price for the Common Stock during the twenty-five (25) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date.

 

(a)At any time during the period beginning on the Issue Date and ending on the date which is ninety (90) days following the Issue Date, the Borrower shall have the right, exercisable on not less than three (3) Trading Days prior written notice to the Holder of the Note to prepay the outstanding Note (principal and accrued interest), in full by making a payment to the Holder of an amount in cash equal to 135%, multiplied by the sum of: (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note plus (y) Default Interest, if any.
(b)At any time during the period beginning the day which is ninety one (91) days following the Issue Date and ending on the date which is one hundred eighty (180) days following the Issue Date, the Borrower shall have the right, exercisable on not less than three (3) Trading Days prior written notice to the Holder of the Note to prepay the outstanding Note (principal and accrued interest), in full by making a payment to the Holder of an amount in cash equal to 150%, multiplied by the sum of: (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note plus (y) Default Interest, if any.
(c)After the expiration of one hundred eighty (180) days following the date of the Note, the Borrower shall have no right of prepayment.

As of June 30, 2018 114,000 of the principal amount of the Notes remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $173,714 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $114,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $96,303.

 

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NOTE 6. NOTES RECEIVABLE

 

    June 30, 2018
Entest Biomedical, Inc. (Note 8)   $ 4,551  

  

$4,551 lent by the Company to Entest Biomedical, Inc. is due and payable at the demand of the holder and bear simple interest at a rate of 10% per annum.

 

NOTE 7. INCOME TAXES

 

As of June 30, 2018

 

Deferred tax assets:      
Net operating tax carry forwards   $ 3,461,445
181Other     -0-
Gross deferred tax assets     3,461,445
Valuation allowance     (3,461,445)
Net deferred tax assets   $ -0-

 

As of June 30 2018 the Company has a Deferred Tax Asset of $3,461,445 completely attributable to net operating loss carry forwards of approximately $16,483,071 (which expire 20 years from the date the loss was incurred). 

 

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

 

Income tax is calculated at the 21% Federal Corporate Rate. 

 

NOTE 8. RELATED PARTY TRANSACTIONS

 

As of June 30, 2018 the Company has received capital contributions from Bio Matrix Scientific Group, Inc (“BMSN”) , a corporation under common control with the Company and which possesses the majority of the voting power of the shares outstanding of the company, totaling $728,658 and has issued 50,010,000 common shares to BMSN for aggregate consideration of $20,090.

 

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

 

As of June 30, 2018 Entest Biomedical Inc. is indebted to the Company in the amount of $4,551. $4,551 lent by the Company to Entest Biomedical, Inc. is due and payable at the demand of the holder and bear simple interest at a rate of 10% per annum.

 

On March 17, 2018 Harry Lander, the Company’s President, agreed to not elect to exchange any of Regen’s Series M Preferred Stock issued to Lander pursuant to the “AMENDMENT TO EMPLOYMENT AGREEMENT BY AND BETWEEN HARRY M. LANDER AND REGEN BIOPHARMA, INC. AND AGREEMENT TO RETURN SHARES OF STOCK DATED February 23, 2017” for any other class of Regen’s securities for a period of five years for consideration of $45,000.

 

As of June 30, 2018 the Company is indebted to David R. Koos in the amount of $227. $227 lent to the Company by Koos is due and payable at the demand of the holder and bear simple interest at a rate of 10% per annum.

 

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

 

Pursuant to the Agreement, Zander shall pay to The Company one-time, non-refundable, upfront payment of one hundred thousand US dollars ($100,000) as a license initiation fee which must be paid within 90 days of June 23, 2015 and an annual non-refundable payment of one hundred thousand US dollars ($100,000) on July 15th, 2016 and each subsequent anniversary of the effective date of the Agreement.

 

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

 

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

 

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

 

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

 

The Agreement may be terminated by The Company:

 

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

 

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

 

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

 

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

 

On September 28, 2015 Zander caused to be issued to the Company 8,000,000 of the common shares of Entest Biomedical, Inc in satisfaction of one hundred thousand US dollars ($100,000) to be paid to the Company by Zander as a license initiation fee. Regen Biopharma, Inc. recognized revenue of $192,000 equivalent to the fair value of 8,000,000 of the common shares of Entest Biomedical, Inc as of the date of issuance.

 

During the quarter ended September 30, 2016 Zander paid $17,000 to the Company as a partial payment of the July 15th, 2016 liability.

 

During the quarter ended June 30, 2017 Zander caused to be issued to the Company 83,000 shares of the nonvoting convertible preferred stock of Entest Biomedical, Inc. in satisfaction of 83,000 owed to the Company by Zander.On June 23, 2017 $7,000 of principal indebtedness and $147 of Accrued Interest Payable by the Company to Zander was applied toward the satisfaction of a minimum royalty payment owed by Zander to the Company pursuant to the Agreement.

 

During the quarter ended September 30, 2017 Zander caused to be issued to the Company 102,852 shares of the nonvoting convertible preferred stock of Entest Biomedical, Inc. in satisfaction of $102,852 owed to the Company by Zander.

 

During the quarter ended December 31, 2017 Zander prepaid $58,000 of minimum royalties which will become due pursuant to the Agreement.

 

During the quarter ended March 31, 2018 Zander prepaid $20,000 of minimum royalties which will become due pursuant to the Agreement.

 

On February 7, 2018 the Company and Zande agreed to a 10% reduction of Zander’s June 2018 Annual Anniversary Fee obligation if Zander pays such fee on or before February 10, 2018. $90,000 was paid by Zander in satisfaction of the June 2018 Annual Anniversary Fee during the quarter ended March 31, 2018

 

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

 

During the quarter ended June 30, 2018 $11,500 was advanced to the Company by Todd Caven , the Chief Financial Officer of the Company, in anticipation of the purchase by Caven of the securities of the Company. Todd Caven serves as Chief Financial Officer of the Company.

 

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NOTE 9. COMMITMENTS AND CONTINGENCIES

 

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

  

NOTE 10. STOCKHOLDERS’ EQUITY

 

The stockholders’ equity section of the Company contains the following classes of capital stock as of June 30, 2018:

 

Common stock, $ 0.0001 par value; 500,000,000 shares authorized: 158,726,196 shares issued and outstanding.

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

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

Preferred Stock, $0.0001 par value, 800,000,000 shares authorized of which 600,000 is designated as Series AA Preferred Stock: 50,000 shares issued and outstanding as of June 30, 2018, 300,000,000 is designated Series A Preferred Stock of which 139,942,206 shares are outstanding as of June 30, 2018 and 300,000,000 is designated Series M Preferred Stock of which 38,000,000 shares are outstanding as of June 30, 2018. 

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

Series AA Preferred Stock

 

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

 

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

 

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Series A Preferred Stock

 

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

The Board of Directors of the Company have authorized 300,000,000 shares of the Series A Preferred Stock, par value $0.0001. With respect to each matter submitted to a vote of stockholders of the Corporation, each holder of Series A Preferred Stock shall be entitled to cast that number of votes which is equivalent to the number of shares of Series A Preferred Stock owned by such holder times one . Except as otherwise required by law holders of Common Stock, other series of Preferred issued by the Corporation, and Series A Preferred Stock shall vote as a single class on all matters submitted to the stockholders.

Holders of the Series A Preferred Stock will be entitled to receive, when, as and if declared by the board of directors of the Company (the “Board”) out of funds legally available therefore, non-cumulative cash dividends of $0.01 per quarter. In the event any dividends are declared or paid or any other distribution is made on or with respect to the Common Stock , the holders of Series A Preferred Stock as of the record date established by the Board for such dividend or distribution on the Common Stock shall be entitled to receive, as additional dividends (the “Additional Dividends”) an amount (whether in the form of cash, securities or other property) equal to the amount (and in the form) of the dividends or distribution that such holder would have received had each share of the Series A Preferred Stock been one share of the Common Stock, such Additional Dividends to be payable on the same payment date as the payment date for the Common Stock.

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

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

On January 10, 2017 Regen Biopharma, Inc. (“Regen”) filed a CERTIFICATE OF DESIGNATION ("Certificate of Designations") with the Nevada Secretary of State setting forth the preferences rights and limitations of a newly authorized series of preferred stock designated and known as "Series M Preferred Stock" (hereinafter referred to as "Series M Preferred Stock").

The Board of Directors of Regen have authorized 300,000,000 shares of the Series M Preferred Stock, par value $0.0001. With respect to each matter submitted to a vote of stockholders of Regen, each holder of Series M Preferred Stock shall be entitled to cast that number of votes which is equivalent to the number of shares of Series M Preferred Stock owned by such holder times one. Except as otherwise required by law holders of Common Stock, other series of Preferred issued by Regen, and Series M Preferred Stock shall vote as a single class on all matters submitted to the stockholders.

The holders of Series M Preferred Stock shall be entitled receive dividends, when, as and if declared by the Board of Directors in accordance with Nevada Law, in its discretion, from funds legally available therefore

On any voluntary or involuntary liquidation, dissolution or winding up of Regen, the holders of the Series M Preferred Stock shall receive, out of assets legally available for distribution to Regen’s stockholders, a ratable share in the assets of Regen.

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11. INVESTMENT SECURITIES

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

On May 30, 2017 Zander Therapeutics Inc. caused to be issued to Regen Biopharma, Inc. 83,000 of the nonvoting convertible preferred shares of Entest Biomedical, Inc in satisfaction of eighty three thousand US dollars ($83,000) to be paid to Regen Biopharma, Inc. by Zander Theraputics, Inc as a license fee

 

On July 19, 2017 Zander Therapeutics Inc. caused to be issued to Regen Biopharma, Inc. 102852 of the nonvoting convertible preferred shares of Entest Biomedical, Inc in satisfaction of $102,852 to be paid to Regen Biopharma, Inc. by Zander Theraputics, Inc .

The abovementioned constitute the Company’s sole investment securities as of June 30, 2018.

As of June 30, 2018:

  8,000,000     Common Shares of Entest Biomedical, Inc.          
                             
  Basis       Fair Value       Total Unrealized Gains in Other Comprehensive Income         Net Unrealized Gain or (Loss) realized during the Quarter  ended June 30, 2018  
$ 192,000     $ $282,400       90,400       $(18,400

 

 

  185,852     Nonvoting Convertible Preferred Shares  of Entest Biomedical, Inc.          
                             
  Basis       Fair Value       Total Unrealized Gains in Other Comprehensive Income         Net Unrealized Gain or (Loss) realized during the quarter  ended June 30, 2018  
$ 185,852     $ $185,852       0       0  

 

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NOTE 12. STOCK TRANSACTIONS

 

Issuance of Common Shares

 

On April 20, 2018 the Company issued 785,237 Common Shares (“Shares”) in satisfaction of $12,000 of convertible indebtedness and $760 of accrued interest due on convertible indebtedness.

 

On April 30, 2018 the Company issued 363,597 of its Common Shares (“Shares”) in satisfaction of $5,000 of convertible indebtedness and $199 of accrued interest due on convertible indebtedness.

 

On May 7, 2018 the Company issued 403,583 of its Common Shares (“Shares”) in satisfaction of $5,000 of convertible indebtedness and $246 of accrued interest due on convertible indebtedness.

 

On June 1, 2018 the Company issued 405,858 of its Common Shares (“Shares”) in satisfaction of $5,000 of convertible indebtedness and $276 of accrued interest due on convertible indebtedness.

 

On June 11, 2018 the Company issued 728,390 of its Common Shares (“Shares”) in satisfaction of $10,000 of convertible indebtedness and $117 of accrued interest due on convertible indebtedness.

 

On May 18, 2018 the Company issued 4712320 of its Common Shares (“Shares”) in satisfaction of $50,000 of convertible indebtedness and $8904 of accrued interest due on convertible indebtedness.

 

Issuance of Series A Preferred Shares

 

On April 10 2018 the Company issued 40,080 Series A Preferred Shares (“Shares”) in satisfaction of $1,000 of convertible indebtedness and $42 of accrued interest due on convertible indebtedness.

 

On May 18, 2018 the Company issued 108,004 Series A Preferred Shares (“Shares”) in satisfaction of $2,000 of convertible indebtedness and $106 of accrued interest due on convertible indebtedness.

 

On June 1, 2018 the Company issued 146,407 Series A Preferred Shares (“Shares”) in satisfaction of $2,000 of convertible indebtedness and $112 of accrued interest due on convertible indebtedness.

 

On June 13, 2018 the Company issued 181,018 Series A Preferred Shares (“Shares”) in satisfaction of $2,000 of convertible indebtedness and $117 of accrued interest due on convertible indebtednes

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NOTE 13. PRIOR PERIOD ADJUSTMENTS

 

The Company has adjusted Research and Development Expenses and Interest Expense for the Period ended December 31, 2016 in the following manner:

 

(1)Research and Development Expenses recognized for the period ended December 31, 2016 has been reduced by $15,000
(2)Interest Expense has been increased by $1,246

 

The aforementioned adjustments have resulted in a reduction in Net Loss for the period ended December 31, 2016 as originally reported of $13,754

 

The Company has adjusted Research and Development Expenses and Interest Expense for the Period ended March 31, 2017 in the following manner:

 

(3)Research and Development Expenses recognized for the period ended March 31, 2017 has been reduced by $80,000
(4)Interest Expense has been increased by $1,219

 

The aforementioned adjustments have resulted in a reduction in Net Loss for the period ended March 31, 2017 as originally reported of $78,781

 

The Company has adjusted Interest Expense for the Period ended June 30, 2017 in the following manner: Interest Expense has been increased by $1,232

 

The aforementioned adjustments have resulted in an increase in Net Loss for the period ended June 30, 2017 as originally reported of $1,232.

 

NOTE 14. SUBSEQUENT EVENTS

On July 11, 2018 the Company issues 451,629 common shares in consideration of $5,000of convertible indebtedness and 313 of accrued interest on convertible indebtedness.

 

On July 11, 2018 the Company issued a a Convertible Note (“Note”) in the face amount of $11,500 to the Company’s Chief Financial Officer for consideration consisting of $11,500 cash. The Note pays simple interest in the amount of 10% per annum .. The maturity of the Note is May 4, 2021.

 

The Note is convertible into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.01 per common share as of the date which is the earlier of:

 

(i)One day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of the Company. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions, whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.
(ii)One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company tendering a fixed number of their equity securities (“Tender Offer”).
(iii)That date which is twenty four (24) months subsequent to the date of execution of this Note.
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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

CERTAIN FORWARD-LOOKING INFORMATION

 

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

 

Material Changes in Financial Condition

As of June 30, 2018 we had cash of $55,404 and as of September 31, 2017 we had cash of $269,973. The Decrease in Cash of approximately 79.4% is primarily attributable to:

 

  1) Cash expended in the operation of the Company’s Business

 

  2) Decrease in Notes Payable of $108,128

 

Offset by

 

  (a) Sale by the Company of Convertible Notes for Net Cash Proceeds of $950,000

 

  (b) Sale by the Company of Equity Securities for Net Cash Proceeds of $50,000

(iv) Deposit by the Company’s Chief Financial Officer of $11,500 in anticipation of purchase of the Company’s securities.

As of June 30, 2018 we had Notes Receivable ( non related parties) of $0 and as of September 30, 2017 we had Notes Receivable (non related parties) of $165,000

The decrease in Notes Receivable is attributable to the satisfaction of a $40,000 Note receivable issued to the Company as consideration for a $40,000 Convertible Note issued by the Company as well as cancellation of several Notes Receivable issued to the Company pursuant to their terms.

 

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As of June 30, 2018 we had Prepaid Expenses of $8,042 and as of September 30, 2017 we had Prepaid Expenses of $34,427.

 

The decrease in Prepaid Expenses of approximately 76.6% is attributable to recognition of $26,583 of Research and Development expenses which had been paid for in a prior period.

 

As of September 30, 2017 we had Accrued Interest Receivable of $4,436 and as of June 30, 2018 we had Accrued Interest Receivable of $7,559.

 

The increase in Accrued Interest Receivable of approximately 70.4% is attributable to interest accrued but unpaid during the nine months ended June 30, 2018 resulting from amounts due to the Company by Entest Bio-Medical, Inc. as well as interest accrued but unpaid due to the Company from LG Capital Funding LLC. David R. Koos serves as Chairman of the Board and Chief Executive Officer of both the Company and Entest Bio-Medical, Inc.

 

As of June 30, 2018 we had Prepaid Rent of $15,000 and as of September 30, 2017 we had Prepaid Rent of $0.

 

The increase in Prepaid Rent is attributable to the payment by the Company during the quarter ended June 30, 2018 of rental expenses not due until the subsequent quarter.

 

As of September 30, 2017 we had Accounts Payable of $495,749 and as of June 30, 2018 we had Accounts Payable of $74,044.

 

The decrease in Accounts Payable of 85.6% is attributable primarily to payments made on obligations of the Company to Contract Research Organizations incurred in the course of business.

 

As of June 30, 2018 we had a Bank Overdraft of $203 and as of September 30, 2017 we had a Bank Overdraft of $0.

 

The increase in Bank Overdraft is attributable to withdrawal of money that is greater than the available balance in a bank account maintained by the Company during the quarter ended June 30, 2018.

 

As of September 30, 2017 we had Notes Payable of $111,355 and as of June 30, 2018 we had Notes Payable of $3,227.

The decrease in Notes Payable of approximately 97% is attributable to:

 

(a)repayment of $6,000 of principal indebtedness owed by the Company to Bio Matrix Scientific Group, Inc. David R. Koos serves as Chairman of the Board and Chief Executive Officer of both the Company and Bio Matrix Scientific Group, Inc.
(b)repayment of $46,840 of principal indebtedness to Blackbriar Partners, Inc. Blackbriar Partners Inc. is controlled by David R. Koos
(c)repayment of $55,288 of principal indebtedness to an unaffiliated third party lender.

 

As of June 30, 2018 we had Accrued Payroll Tax of $4,241 and as of September 30, 2017 we had Accrued Payroll Tax of $857.

 

The increase of 394% is primarily attributable to employer taxes owed by the Company as a result of a $45,000 compensation payment made to Harry Lander during the quarter ended March 31, 2018.

 

As of September 30, 2017 we had accrued rent of $5,000 and as of June 30, 2018 we had Accrued Rent of $0.

 

The decrease in accrued rent is attributable to a decrease in Rental Expenses accrued but unpaid due to Entest Biomedical, Inc.

 

As of June 30, 2018, we had Accrued Payroll of $854,163 and as of September 30, 2017 we had Accrued Payroll of $590,996.

 

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The increase in Accrued Payroll of 44.29% is attributable to:

 

$45,000 in salary expense due to the Company’s Chief Executive Officer incurred but unpaid during the three months ended December 31, 2017.

 

$40,500 in salary expense due to the Company’s Chief Financial Officer incurred but unpaid during the three months ended December 31, 2017.

 

$35,000 in salary expense due to the Company’s Chief Executive Officer incurred but unpaid during the three months ended March 31, 2018.

 

$40,500 in salary expense due to the Company’s Chief Financial Officer incurred but unpaid during the three months ended March 31, 2018.

 

$45,000 in salary expense due to the Company’s Chief Executive Officer incurred but unpaid during the three months ended June 30 2018.

 

$40,500 in salary expense due to the Company’s Chief Financial Officer incurred but unpaid during the three months ended June 30, 2018.

 

$16,667 in salary expense due to the Company’s President incurred but unpaid during the three months ended June 30, 2018.

As of September 30, 2017 we had Accrued Interest Payable of $122,807 and as of June 30, 2018 we had Accrued Interest Payable of $248,117.

 

The increase in Accrued Interest Payable of approximately 102 % is primarily attributable to interest expense on Notes Payable and Convertible Notes Payable incurred during the nine months ended June 30, 2018 but not yet paid offset by

 

(a)the conversion of $2,012 of interest due on convertible debt into common shares of Regen during the quarter ended December 31, 2017
(b)The conversion of $2,650 of interest due on convertible debt into common shares of Regen during the quarter ended March 31, 2018

 

The cancellation during the period of an $85,000 convertible note issued by the Company in accordance with that instrument’s terms and conditions resulting in the derecognition of $2384 of accrued interest during the quarter ended March 31, 2018.        

(c)the conversion of $11,509 of interest due on convertible debt into shares of Regen during the quarter ended June 30, 2018
(d)the cancellation during the quarter ended June 30, 2018 of a $40,000 convertible note issued by the Company in accordance with that instrument’s terms and conditions resulting in the derecognition of approximately $4600 of accrued interest during the quarter ended June 30, 2018.
(e)payment of $10,359 cash for interest during the quarter ended June 30, 2018.

As of September 30, 2017 we had Other Accrued Expenses of $33,034 and as of June 30, 2018 we had Other Accrued Expenses of $41,243.

 

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The increase in Other Accrued Expenses of approximately 24.8% is attributable to additional reimbursements due by the Company to the Company’s Chief Financial Officer for business expenses incurred by the Company’s Chief Financial Officer in the performance of his duties.

 

As of June 30, 2018 we had Convertible Notes Payable of $2,728,000and as of September 30, 2017 we had Convertible Notes Payable of $2,084,000.

 

The increase in Convertible Notes of 30.9% is attributable to:

 

(a)The issuance during the quarter ended December 31, 2017 of Convertible Debt with a face value of $755,000
(b)The issuance during the quarter ended March 31, 2018 of Convertible Debt with a face value of $240,000
(c)The issuance during the quarter ended June 30, 2018 of Convertible Debt with a face value of $114,000

 

Offset by:

 

(a)The conversion during the quarter ended December 31, 2017 of $78,000 of convertible debt into common shares.
(b)The conversion during the quarter ended March 31, 2018 of $53,000 of convertible debt into common shares.
(c)The cancellation of $85,000 of convertible debt in connection with the cancellation of an $85,000 Note receivable issued to the Company as payment for that convertible debt
(d)The cancellation of $40,000 of convertible debt in connection with the cancellation of a $40,000 Note receivable issued to the Company as payment for that convertible debt
(e)The cancellation of $115,000 of convertible debt in connection with the cancellation of a $113,250 Note receivable issued to the Company as payment for that convertible debt.
(f)The conversion during the quarter ended June 30, 2018 of $87,000 of convertible debt into common shares.
(g)The conversion during the quarter ended June 30, 2018 of $7,000 of convertible debt into preferred shares.

As of June 30 2018 we had Unearned Income of $68,000 and as of September 30, 2017 we had Unearned Income of $0.

 

The increase in Unearned Income is attributable to prepayment by Zander Therapeutics, Inc. of Minimum Annual Royalties which will become due and payable to the Company by Zander Therapeutics, Inc. pursuant to the terms and conditions of an agreement (“Agreement”) with Zander Therapeutics, Inc. ( “Zander”) whereby The Company granted to Zander an exclusive worldwide right and license for the development and commercialization of certain intellectual property controlled by The Company (” License IP”) for non-human veterinary therapeutic use for a term of fifteen years and an annual Anniversary Fee payable pursuant to the Terms and conditions of the Agreement. David Koos serves as Chairman and Chief Executive Officer of the Company and Zander. Harry Lander serves as President and Chief Scientific Officer of the Company and Zander. Todd Caven serves as Chief Financial Officer of the Company and Zander.

 

As of June 30, 2018 we had amounts due to a Related Party Investor of $11,500 and as of September 30, 2017 we had amounts due to a Related Party Investor of $0.

 

The increase in amounts due to a Related Party Investor is attributable to the deposit with the Company of $11,500 (“Deposit”) by Todd Caven during the quarter ended June 30, 2018 in anticipation of entering into an agreement with the Company regarding the purchase of the Company’s securities by Mr. Caven. On July 11, 2018 Mr Caven was issued a convertible note by the Company in satisfaction of the Deposit. Mr. Caven serves as the Company’s Chief Financial Officer.

 

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As of September 30, 2017 we had a Derivative Liability of $4,234,475 and as of June 30, 2018 we had a Derivative Liability of $ 6,585,896.

 

The increase in Derivative Liability of 55.3 % is primarily attributable to the recognition by the Company of embedded derivatives on Convertible Notes Payable with an aggregate face value of $2,237,000 .

 

Material Changes in Results of Operations

 

Net losses were$114,477 for the fiscal quarter ended June 30, 2018 and $2,623,407 for the same quarter ended 2017.

 

The decrease in Net Losses of 95% is primarily attributable to by lower total operating expenses incurred during the quarter ended June 30, 2018 when compared to the same quarter ended 2017 and higher derivative expense recognized during the quarter ended June 30, 2017 when compared to the same quarter ended 2018 partially offset by higher Interest Expense, Interest Expense attributable to Amortization of Beneficial Conversion Features and Loss on Early Extinguishment of Convertible Debt recognized during the quarter ended June 30, 2018 when compared to the same quarter ended 2017.

 

Net losses were $3,741,229 for the nine months ended June 30, 2018 and $4,495,706 for the same quarter ended 2017.

The decrease in Net Losses of approximately 16.78% is primarily attributable to lower total operating expenses incurred during the period ended June 30, 2018 when compared to the same period ended 2017 and higher derivative expense recognized during the period ended June 30, 2017 when compared to the same period ended 2018 partially offset by higher Interest Expense, Interest Expense attributable to Amortization of Beneficial Conversion Features and Loss on Early Extinguishment of Convertible Debt recognized during the period ended June 30, 2018 when compared to the same period ended 2017.

 

As of June 30 2018 we had $55,404 in cash on hand and current liabilities of $8,623,396 such liabilities consisting of Accounts Payable, Notes Payable, Unearned Income, Convertible Notes Payable ( Net of Unamortized Discount), Derivative Liability Recognized, bank overdraft and Accrued Expenses. We feel we will not be able to satisfy our cash requirements over the next twelve months and shall be required to seek additional financing.

 

During the quarter ended June 30 2018 the Company raised $100,000 cash through the issuance of convertible notes.

The Company also received a deposit of $11,500 from the Company’s Chief Financial Officer (“Deposit”) in anticipation of a potential purchase of the Company’s Securities. On July 11, 2018 a convertible note was issued by the Company in the principal amount of $11,500 in satisfaction of the Deposit.

 

As of June 30, 2018 the Company was not party to any binding agreements which would commit Regen to any material capital expenditures.

 

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

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

 

Item 4. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

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

 

Changes in Internal Controls over Financial Reporting

 

In connection with the evaluation of the Company’s internal controls during the period commencing on April 1, 2018 and ending on June 30, 2018, David Koos and Todd S. Caven , who serve as the Company’s Principal Executive Officer and Principal Financial Officer respectively, have determined that there were no changes to the Company’s internal controls over financial reporting that have been materially affected, or is reasonably likely to materially effect, the Company’s internal controls over financial reporting.

 

PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

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

 

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

 

Common Shares

On April 20, 2018 the Company issued 785,237 Common Shares (“Shares”) in satisfaction of $12,000 of convertible indebtedness and $760 of accrued interest due on convertible indebtedness.

 

On April 30, 2018 the Company issued 363,597 of its Common Shares (“Shares”) in satisfaction of $5,000 of convertible indebtedness and $199 of accrued interest due on convertible indebtedness.

 

On May 7, 2018 the Company issued 403,583 of its Common Shares (“Shares”) in satisfaction of $5,000 of convertible indebtedness and $246 of accrued interest due on convertible indebtedness.

 

On June 1, 2018 the Company issued 405,858 of its Common Shares (“Shares”) in satisfaction of $5,000 of convertible indebtedness and $276 of accrued interest due on convertible indebtedness.

 

On June 11, 2018 the Company issued 728,390 of its Common Shares (“Shares”) in satisfaction of $10,000 of convertible indebtedness and $117 of accrued interest due on convertible indebtedness.

 

On May 18, 2018 the Company issued 4712320 of its Common Shares (“Shares”) in satisfaction of $50,000 of convertible indebtedness and $8904 of accrued interest due on convertible indebtedness.

 

On July 11, 2018 the Company issues 451,629 Common Shares (“Shares”) in consideration of $5,000of convertible indebtedness and 313 of accrued interest on convertible indebtedness.

 

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

 

Preferred Shares

 

On April 10 2018 the Company issued 40,080 Series A Preferred Shares (“Shares”) in satisfaction of $1,000 of convertible indebtedness and $42 of accrued interest due on convertible indebtedness.

 

On May 18, 2018 the Company issued 108,004 Series A Preferred Shares (“Shares”) in satisfaction of $2,000 of convertible indebtedness and $106 of accrued interest due on convertible indebtedness.

 

On June 1, 2018 the Company issued 146,407 Series A Preferred Shares (“Shares”) in satisfaction of $2,000 of convertible indebtedness and $112 of accrued interest due on convertible indebtedness.

 

On June 13, 2018 the Company issued 181,018 Series A Preferred Shares (“Shares”) in satisfaction of $2,000 of convertible indebtedness and $117 of accrued interest due on convertible indebtedness.

 

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

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Convertible Notes

On May 18, 2018 the Company issued a Convertible Note (“Note”)in the principal amount of $114,000 for net consideration of $100,000. The Company recognized an Original Issue Discount of $14,000 in connection with the Note. The Note bears simple interest of 10%.The Note matures on February 18, 2019.

 

The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to equal the lesser of (i) the lowest Trading Price during the previous twenty-five (25) Trading Day period ending on the latest complete Trading Day prior to the date of the Note and (ii) the Variable Conversion Price. “Variable Conversion Price” shall mean 50% multiplied by the Market Price (representing a discount rate of 50%). “Market Price” means the lowest Trading Price for the Common Stock during the twenty-five (25) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date.

On July 11, 2018 the Company issued a a Convertible Note (“Note”) in the face amount of $11,500 to the Company’s Chief Financial Officer for consideration consisting of $11,500 cash. The Note pays simple interest in the amount of 10% per annum .. The maturity of the Note is May 4, 2021.

 

The Note is convertible into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.01 per common share as of the date which is the earlier of:

 

(i)One day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of the Company. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions, whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.
(ii)One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company tendering a fixed number of their equity securities (“Tender Offer”).
(iii)That date which is twenty four (24) months subsequent to the date of execution of this Note.

 

ll the abovementioned Notes contained a provision that until such time as the shares of stock issuable upon conversion of the Note have been registered under the Act or otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities as of a particular date that can then be immediately sold, each certificate for shares of stock issuable upon conversion of the Note that has not been so included in an effective registration statement or that has not been sold pursuant to an effective registration statement or an exemption that permits removal of the legend, shall bear a restrictive legend. The Notes were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended (the “Act”). No underwriters were retained to serve as placement agents for the sale. The Notes were sold directly through our management. No commission or other consideration was paid in connection with the sale of the Notes. There was no advertisement or general solicitation made in connection with this Offer and Sale of Notes.

 

Use of Proceeds

 

With regard to all securities sold for cash consideration described above, Cash proceeds received from sale will be utilized by Regen for general corporate purposes

 

Cancellation of Convertible Notes

During the quarter ended June 30, 2018 Convertible Notes having an aggregate face value of $155,000 (“155 K Notes”) along with Notes Receivable having an aggregate value of $153,250 issued to the Company as consideration for the 155 K Notes were cancelled pursuant to the terms and conditions of the instruments. 

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Item 3. DEFAULTS UPON SENIOR SECURITIES

 

None.

 

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

 

None.

 

Item 5. OTHER INFORMATION

 

None.

 

Item 6. EXHIBITS

31.1       Certification of Chief Executive Officer
31.2       Certification of Acting Chief Financial Officer
10.1       Form of Convertible Note $114,000
10.2       Form of Convertible Note $11,500

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SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on July 25, 2018.

 

      Regen Biopharma, Inc.
       
  By:   /s/ David R. Koos
  Name:   David R. Koos
  Title:   Principal Executive Officer
  Date:    July 25, 2018

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on July 25, 2018.

 

      Regen Biopharma, Inc.
       
  By:   /s/ David R. Koos
  Name:   David R. Koos
  Title:   Chairman,  Director
  Date:    July 25, 2018

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on July 25, 2018.

 

      Regen Biopharma, Inc.
       
  By:   /s/ Todd S. Caven
  Name:   Todd S. Caven
  Title:   Principal Financial Officer
  Date:    July 25, 2018

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on July 25, 2018.

 

      Regen Biopharma, Inc.
       
  By:   /s/ Todd S. Caven
  Name:   Todd S. Koos
  Title:   Principal Accounting Officer
  Date:    July 25, 2018

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EX-10.1 2 ex10_1.htm EXHIBIT 10.1

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

 

Principal Amount: US$114,000.00 Purchase Price: US$114,000.00

Issue Date: May 18, 2018

 

CONVERTIBLE PROMISSORY NOTE

 

FOR VALUE RECEIVED, REGEN BIOPHARMA, INC., a Nevada corporation (hereinafter called the "Borrower"), hereby promises to pay to the order of AUCTUS FUND, LLC, a Delaware limited liability company, or registered assigns (the "Holder") the sum of US$114,000.00 together with any interest as set forth herein, on February 18, 2019 (the "Maturity Date"), and to pay interest on the unpaid principal balance hereof at the rate of ten percent (I 0%) (the "Interest Rate") per annum from the date hereof (the "Issue Date") until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. This Note may not be prepaid in whole or in part except as otherwise explicitly set forth herein with the written consent of the Holder which may be withheld for any reason or for no reason. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of the lesser of (i) twenty four percent (24%) per annum or (ii) the maximum amount allowed by law from the due date thereof until the same is paid (the "Default Interest"). Interest shall commence accruing on the date that the Note is fully paid and shall be computed on the basis of a 360-day year and the actual number of days elapsed. All payments due hereunder (to the extent not converted into common stock, $0.0001 par value per share (the "Common Stock") in accordance with the terms hereof) shall be made in lawful money of the United States of America. All payments shall be made at such address as the Holder shall hereafter give to the Borrower by written notice made in accordance with the provisions of this Note. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a business day, the same shall instead be due on the next succeeding day which is a business day and, in the case of any interest payment date which is not the date on which this Note is paid in full, the extension of the due date thereof shall not be taken into account for purposes of determining the amount of interest due on such date. As used in this Note, the term "business day" shall mean any day other than a Saturday, Sunday or a day on which commercial banks in the city of New York, New York are authorized or required by law or executive order to remain closed. Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto in that certain Securities Purchase Agreement dated the date hereof, pursuant to which this Note was originally issued (the "Purchase Agreement").

 

This Note is free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Borrower and will not impose personal liability upon the holder thereof.

 

The following terms shall apply to this Note:

 

ARTICLE I. CONVERSION RIGHTS

 

1.1   Conversion Right. The Holder shall have the right from time to time, and at any time following the Issue Date and ending on the later of (i) the Maturity Date and (ii) the date of payment of the Default Amount (as defined in Article III) pursuant to Section 1.6(a) or Article III, each in respect of the remaining outstanding principal amount of this Note to convert all or any part of the outstanding and unpaid principal amount of this Note into fully paid and non-assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock shall hereafter be changed or reclassified at the Conversion Price (as defined below) determined as provided herein (a "Conversion"); provided, however, that in no event shall the Holder be entitled to convert any portion of this Note in excess of that portion of this Note upon conversion of which the sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion of any other security of the Borrower subject to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock. For purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Regulations l 3D-G thereunder, except as otherwise provided in clause (1) of such proviso, provided, further, however, that the limitations on conversion may be waived by the Holder (up to a maximum of 9.99%) upon, at the election of the Holder, not less than 61 days' prior notice to the Borrower, and the provisions of the conversion limitation shall continue to apply until such 61st day (or such later date, as determined by the Holder, as may be specified in such notice of waiver). The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit A (the "Notice of Conversion"), delivered to the Borrower by the Holder in accordance with Section 1.4 below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to the Borrower before 6:00 p.m., New York, New York time on such conversion date (the "Conversion Date"). The term "Conversion Amount" means, with respect to- any conversion of this Note, the sum of (I) the principal amount of this Note to be converted in such conversion plus (2) at the Holder's option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided in this Note to the Conversion Date, provided however, that the Borrower shall have the right to pay any or all interest in cash plus (3) at the Holder's option, Default Interest, if any, on the amounts referred to in the immediately preceding clauses (I) and/or (2) plus (4) at the Holder's option, any amounts owed to the Holder pursuant to Sections 1.3 and I .4(g) hereof.

 

1.2 Conversion Price.

 

Calculation of Conversion Price. Subject to the adjustments described herein, the conversion price (the "Conversion Price") shall equal the lesser of (i) the lowest Trading Price (as defined below) during the previous twenty-five (25) Trading Day period ending on the latest complete Trading Day prior to the date of this Note and (ii) the Variable Conversion Price (as defined herein) (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower relating to the Borrower's securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The "Variable Conversion Price" shall mean 50% multiplied by the Market Price (as defined herein) (representing a discount rate of 50%). "Market Price" means the lowest Trading Price for the Common Stock during the twenty-five (25) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. "Trading Price" means, for any security as of any date, the lesser of: (i) the lowest trade price on the OTC Pink, OTCQB or applicable trading market as reported by a reliable reporting service ("Reporting Service") designated by the Holder or, if the OTC Pink is not the principal trading market for such security, the trading price of such security on the principal securities exchange or trading market where such security is listed or traded or, if no trading price of such security is available in any of the foregoing manners, the average of the trading prices of any market makers for such security that are listed in the "pink sheets" by the National Quotation Bureau, Inc., or (ii) the closing bid price on the OTC Pink, OTCQB or applicable trading market as reported by a Reporting Service designated by the Holder or, if the OTC Pink is not the principal trading market for such security, the closing bid price of such security on the principal securities exchange or trading market where such security is listed or traded or, if no closing bid price of such security is available in any of the foregoing manners, the average of the closing bid prices of any market makers for such security that are listed in the "pink sheets" by the National Quotation Bureau, Inc. To the extent the Conversion Price of the Borrower's Common Stock closes below the par value per share, the Borrower will take all steps necessary to solicit the consent of the stockholders to reduce the par value to the lowest value possible under law. The Borrower agrees to honor all conversions submitted pending this adjustment. Furthermore, the Conversion Price may be adjusted downward if, within three (3) business days of the transmittal of the Notice of Conversion to the Borrower, the Common Stock has a closing bid which is 5% or lower than that set forth in the Notice of Conversion. If the shares of the Borrower's Common Stock have not been delivered within three (3) business days to the Borrower, the Notice of Conversion may be rescinded. At any time after the Closing Date, if in the case that the Borrower's Common Stock is not deliverable by DW AC (including if the Borrower's transfer agent has a policy prohibiting or limiting delivery of shares of the Borrower's Common Stock specified in a Notice of Conversion), an additional I 0% discount will apply for all future conversions under all Notes. If in the case that the Borrower's Common Stock is "chilled" for deposit into the OTC system and only eligible for clearing deposit, an additional 15% discount shall apply for all future conversions under all Notes while the "chiJI" is in effect. If in the case of both of the above, an additional cumulative 25% discount shall apply. Additionally, if the Borrower ceases to be a reporting company pursuant to the 1934 Act or if the Note cannot be converted into free trading shares after one hundred eighty-one (181) days from the Issue Date, an additional 30% discount will be attributed to the Conversion Price. If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by the Borrower and the holders of a majority in interest of the Notes being converted for which the calculation of the Trading Price is required in order to determine the Conversion Price of such Notes. "Trading Day" shall mean any day on which the Common Stock is tradable for any period on the OTC Pink, OTCQB or on the principal securities exchange or other securities market on which the Common Stock is then being traded. The Borrower shall be responsible for the fees of its transfer agent and all OTC fees associated with any such issuance. Holder shall be entitled to deduct $500.00 from the conversion amount in each Notice of Conversion to cover Holder's deposit fees associated with each Notice of Conversion. If at any time the Conversion Price as determined hereunder for any conversion would be less than the par value of the Common Stock, then at the sole discretion of the Holder, the Conversion Price hereunder may equal such par value for such conversion and the Conversion Amount for such conversion may be increased to include Additional Principal, where "Additional Principal" means such additional amount to be added to the Conversion Amount to the extent necessary to cause the number of conversion shares issuable upon such conversion to equal the same number of conversion shares as would have been issued had the Conversion Price not been adjusted by the Holder to the par value price.

 

While this Note is outstanding, each time any 3rd party has the right to convert monies owed to that 3rd party (or receive shares pursuant to a settlement or otherwise), including but not limited to under Section 3(a)(9) and Section 3(a)(10), at a discount to market greater than the Conversion Price in effect at that time (prior to all other applicable adjustments in the Note), then the HI older, in Holder's sole discretion, may utilize such greater discount percentage (prior to all applicable adjustments in this Note) until this Note is no longer outstanding. While this Note is outstanding, each time any 3rd party has a look back period greater than the look back period in effect under the Note at that time, including but not limited to under Section 3(a)(9) and Section 3(a)(10), then the Holder, in Holder's sole discretion, may utilize such greater number of look back days until this Note is no longer outstanding. The Borrower shall give written notice to the Holder within one (1) business day of becoming aware of any event that could permit the Holder to make any adjustment described in the two immediately preceding sentences.

 

(a)   Conversion Price During Major Announcements. Notwithstanding anything contained in Section 1.2(a) to the contrary, in the event the Borrower (i) makes a public announcement that it intends to consolidate or merge with any other corporation (other than a merger in which the Borrower is the surviving or continuing corporation and its capital stock is unchanged) or sell or transfer all or substantially all of the assets of the Borrower or (ii) any person, group or entity (including the Borrower) publicly announces a tender offer to purchase 50% or more of the Borrower's Common Stock (or any other takeover scheme) (the date of the announcement referred to in clause (i) or (ii) is hereinafter referred to as the "Announcement Date"), then the Conversion Price shall, effective upon the Announcement Date and continuing through the Adjusted Conversion Price Termination Date (as defined below), be equal to the lower of (x) the Conversion Price which would have been applicable for a Conversion occurring on the Announcement Date and (y) the Conversion Price that would otherwise be in effect. From and after the Adjusted Conversion Price Termination Date, the Conversion Price shall be determined as set forth in this Section I .2(a). For purposes hereof, "Adjusted Conversion Price Termination Date" shall mean, with respect to any proposed transaction or tender offer (or takeover scheme) for which a public announcement as contemplated by this Section l.2(b) has been made, the date upon which the Borrower (in the case of clause (i) above) or the person, group or entity (in the case of clause (ii) above) consummates or publicly announces the termination or abandonment of the proposed transaction or tender offer (or takeover scheme) which caused this Section I .2(b) to become operative.

 

(b) Pro Rata Conversion; Disputes. In the event of a dispute as to the number of shares of Common Stock issuable to the Holder in connection with a conversion of this Note, the Borrower shall issue to the Holder the number of shares of Common Stock not in dispute and resolve such dispute in accordance with Section 4.13.

 

1.3  Authorized Shares. The Borrower covenants that during the period the conversion right exists, the Borrower will reserve from its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of Common Stock upon the full conversion of this Note issued pursuant to the Purchase Agreement. The Borrower is required at all times to have authorized and reserved ten times the number of shares that is actually issuable upon full conversion of the Note (based on the Conversion Price of the Notes in effect from time to time) (the "Reserved Amount"). The Reserved Amount shall be increased from time to time in accordance with the Borrower's obligations pursuant to Section 3(d) of the Purchase Agreement. The Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. In addition, if the Borrower shall issue any securities or make any change to its capital structure which would change the number of shares of Common Stock into which the Notes shall be convertible at the then current Conversion Price, the Borrower shall at the same time make proper provision so that thereafter there shall be a sufficient number of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion of the outstanding Notes. The Borrower (i) acknowledges that it has irrevocably instructed its transfer agent to issue certificates for the Common Stock issuable upon conversion of this Note, and (ii) agrees that its issuance of this Note shall constitute full authority to its officers and agents who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock in accordance with the terms and conditions of this Note. Notwithstanding the foregoing, in no event shall the Reserved Amount be lower than the initial Reserved Amount, regardless of any prior conversions.

 

If, at any time the Borrower does not maintain or replenish the Reserved Amount within three (3) business days of the request of the Holder, the principal amount of the Note shall increase by Five Thousand and No/ I00 United States Dollars ($5,000) (under Holder's and Borrower's expectation that any principal amount increase will tack back to the Issue Date) per occurrence.

 

1.4 Method of Conversion.

(a)   Mechanics of Conversion. Subject to Section 1.1, this Note may be converted by the Holder in whole or in part at any time from time to time after the Issue Date, by

(A) submitting to the Borrower a Notice of Conversion (by facsimile, e-mail or other reasonable means of communication dispatched on the Conversion Date prior to 5:00 p.m., New York, New York time) and (B) subject to Section I .4(b), surrendering this Note at the principal office of the Borrower.

 

(b)   Surrender of Note Upon Conversion. Notwithstanding anything to the contrary set forth herein, upon conversion of this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Borrower unless the entire unpaid principal amount of this Note is so converted. The Holder and the Borrower shall maintain records showing the principal amount so converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Borrower, so as not to require physical surrender of this Note upon each such conversion. In the event of any dispute or discrepancy, such records of the Borrower shall, prima.facie, be controlling and determinative in the absence of manifest error. Notwithstanding the foregoing, if any portion of this Note is converted as aforesaid, the Holder may not transfer this Note unless the Holder first physically surrenders this Note to the Borrower, whereupon the Borrower will forthwith issue and deliver upon the order of the Holder a new Note of like tenor, registered as the Holder (upon payment by the Holder of any applicable transfer taxes) may request, representing in the aggregate the remaining unpaid principal amount of this Note. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note represented by this Note may be less than the amount stated on the face hereof.

 

(c)    Payment of Taxes. The Borrower shall not be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of shares of Common Stock or other securities or property on conversion of this Note in a name other than that of the Holder (or in street name), and the Borrower shall not be required to issue or deliver any such shares or other securities or property unless and until the person or persons (other than the Holder or the custodian in whose street name such shares are to be held for the Holder's account) requesting the issuance thereof shall have paid to the Borrower the amount of any such tax or shall have established to the satisfaction of the Borrower that such tax has been paid.

 

(d)   Delivery of Common Stock Upon Conversion. Upon receipt by the Borrower from the Holder of a facsimile transmission or e-mail (or other reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in this Section 1.4, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder certificates for the Common Stock issuable upon such conversion within three (3) business days after such receipt (the "Deadline") (and, solely in the case of conversion of the entire unpaid principal amount hereof, surrender of this Note) in accordance with the terms hereof and the Purchase Agreement.

 

(e)    Obligation of Borrower to Deliver Common Stock. Upon receipt by the Borrower of a Notice of Conversion, the Holder shall be deemed to be the holder of record of the Common Stock issuable upon such conversion, the outstanding principal amount and the amount of accrued and unpaid interest on this Note shall be reduced to reflect such conversion, and, unless the Borrower defaults on its obligations under this Article I, all rights with respect to the portion of this Note being so converted shall forthwith terminate except the right to receive the Common Stock or other securities, cash or other assets, as herein provided, on such conversion. If the Holder shall have given a Notice of Conversion as provided herein, the Borrower's obligation to issue and deliver the certificates for Common Stock shall be absolute and unconditional, irrespective of the absence of any action by the Holder to enforce the same, any waiver or consent with respect to any provision thereof, the recovery of any judgment against any person or any action to enforce the same, any failure or delay in the enforcement of any other obligation of the Borrower to the holder of record, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder of any obligation to the Borrower, and irrespective of any other circumstance which might otherwise limit such obligation of the Borrower to the Holder in connection with such conversion. The Conversion Date specified in the Notice of Conversion shall be the Conversion Date so long as the Notice of Conversion is received by the Borrower before 5:00 p.m., New York, New York time, on such date.

 

(t) Delivery of Common Stock by Electronic Transfer. In lieu of delivering physical certificates representing the Common Stock issuable upon conversion, provided the Borrower is participating in the Depository Trust Company ("OTC") Fast Automated Securities Transfer ("FAST") program, upon request of the Holder and its compliance with the provisions contained in Section I. I and in this Section 1.4, the Borrower shall use its commercially reasonable best efforts to cause its transfer agent to electronically transmit the Common Stock issuable upon conversion to the Holder by crediting the account of Holder's Prime Broker with OTC through its Deposit Withdrawal At Custodian ("DWAC") system.

 

(g)               OTC Eligibility & Market Loss. If the Borrower fails to maintain its status as "OTC Eligible" for any reason, or, if the Conversion Price is less than $0.0 I at any time while this Note is outstanding, the principal amount of the Note shall increase by Fifteen Thousand and No/100 United States Dollars ($15,000) (under Holder's and Borrower's expectation that any principal amount increase will tack back to the Issue Date). In addition, the Variable Conversion Price shall be redefined to mean forty percent (40%) multiplied by the Market Price, subject to adjustment as provided in this Note.

 

(h)   Failure to Deliver Common Stock Prior to Delivery Deadline. Without in any way limiting the Holder's right to pursue other remedies, including actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion of this Note is not delivered by the Dead Iine (other than a failure due to the circumstances described in Section 1.3 above, which failure shall be governed by such Section) the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the Deadline that the Borrower fails to deliver such Common Stock until the Borrower issues and delivers a certificate to the Holder or credit the Holder's balance account with OTC for the number of shares of Common Stock to which the Holder is entitled upon such Holder's conversion of any Conversion Amount (under Holder's and Borrower's expectation that any damages will tack back to the Issue Date).. Such cash amount shall be paid to Holder by the fifth day of the month following the month in which it has accrued or, at the option of the Holder (by written notice to the Borrower by the first day of the month following the month in which it has accrued), shall be added to the principal amount of this Note, in which event interest shall accrue thereon in accordance with the terms of this Note and such additional principal amount shall be convertible into Common Stock in accordance with the terms of this Note. The Borrower agrees that the right to convert is a valuable right to the Holder. The damages resulting from a failure, attempt to frustrate, interference with such conversion right are difficult if not impossible to qualify. Accordingly the parties acknowledge that the liquidated damages provision contained in this Section 1.4(h) are justified.

 

(i)                 Rescindment of a Notice of Conversion. If (i) the Borrower fails to respond to Holder within one (1) business day from the Conversion Date confirming the details of Notice of Conversion, (ii) the Borrower fails to provide any of the shares of the Borrower's Common Stock requested in the Notice of Conversion within three (3) business days from the date of receipt of the Note of Conversion, (iii) the Holder is unable to procure a legal opinion required to have the shares of the Borrower's Common Stock issued unrestricted and/or deposited to sell for any reason related to the Borrower's standing, (iv) the Holder is unable to deposit the shares of the Borrower's Common Stock requested in the Notice of Conversion for any reason related to the Borrower's standing, (v) at any time after a missed Deadline, at the Holder's sole discretion, or (vi) if OTC Markets changes the Borrower's designation to 'Limited Information' (Yield), 'No Information' (Stop Sign), 'Caveat Emptor' (Skull & Crossbones), 'OTC', 'Other OTC' or 'Grey Market' (Exclamation Mark Sign) or other trading restriction on the day of or any day after the Conversion Date, the Holder maintains the option and sole discretion to rescind the Notice of Conversion ("Rescindment") with a "Notice of Rescindment."

 

1.5   Concerning the Shares. The shares of Common Stock issuable upon conversion of this Note may not be sold or transferred unless (i) such shares are sold pursuant to an effective registration statement under the Act or (ii) the Borrower or its transfer agent shall have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration or (iii) such shares are sold or transferred pursuant to Rule 144 under the Act (or a successor rule) ("Rule 144") or (iv) such shares are transferred to an "affiliate" (as defined in Rule 144) of the Borrower who agrees to sell or otherwise transfer the shares only in accordance with this Section 1.5 and who is an Accredited Investor (as defined in the Purchase Agreement). Except as otherwise provided in the Purchase Agreement (and subject to the removal provisions set forth below), until such time as the shares of Common Stock issuable upon conversion of this Note have been registered under the Act or otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities as of a particular date that can then be immediately sold, each certificate for shares of Common Stock issuable upon conversion of this Note that has not been so included in an effective registration statement or that has not been sold pursuant to an effective registration statement or an exemption that permits removal of the legend, shall bear a legend substantially in the following form, as appropriate:

 

"NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES."

 

The legend set forth above shat I be removed and the Borrower shat I issue to the Holder a new certificate therefore free of any transfer legend if (i) the Borrower or its transfer agent shall have received an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Common Stock may be made without registration under the Act, which opinion shall be reasonably accepted by the Borrower so that the sale or transfer is effected or (ii) in the case of the Common Stock issuable upon conversion of this Note, such security is registered for sale by the Holder under an effective registration statement filed under the Act or otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities as of a particular date that can then be immediately sold. In the event that the Borrower does not accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities pursuant to an exemption from registration, such as Rule 144 or Regulation S, at the Deadline, it will be considered an Event of Default pursuant to Section 3.2 of the Note.

 

1.6 Effect of Certain Events.

 

(a)    Effect of Merger, Consolidation, Etc. At the option of the Holder, the sale, conveyance or disposition of all or substantially all of the assets of the Borrower, the effectuation by the Borrower of a transaction or series of related transactions in which more than 50% of the voting power of the Borrower is disposed of, or the consolidation, merger or other business combination of the Borrower with or into any other Person (as defined below) or Persons when the Borrower is not the survivor shall either: (i) be deemed to be an Event of Default (as defined in Article Ill) pursuant to which the Borrower shall be required to pay to the Holder upon the consummation of and as a condition to such transaction an amount equal to the Default Amount (as defined in Article Ill) or (ii) be treated pursuant to Section l .6(b) hereof. "Person" shall mean any individual, corporation, limited liability company, partnership, association, trust or other entity or organization.

 

(b)   Adjustment Due to Merger, Consolidation, Etc. If, at any time when this Note is issued and outstanding and prior to conversion of all of the Notes, there shall be any merger, consolidation, exchange of shares, recapitalization, reorganization, or other similar event, as a result of which shares of Common Stock of the Borrower shall be changed into the same or a different number of shares of another class or classes of stock or securities of the Borrower or another entity, or in case of any sale or conveyance of all or substantially all of the assets of the Borrower other than in connection with a plan of complete liquidation of the Borrower, then the Holder of this Note shall thereafter have the right to receive upon conversion of this Note, upon the basis and upon the terms and conditions specified herein and in lieu of the shares of Common Stock immediately theretofore issuable upon conversion, such stock, securities or assets which the Holder would have been entitled to receive in such transaction had this Note been converted in full immediately prior to such transaction (without regard to any limitations on conversion set forth herein), and in any such case appropriate provisions shalJ be made with respect to the rights and interests of the Holder of this Note to the end that the provisions hereof (including, without limitation, provisions for adjustment of the Conversion Price and of the number of shares issuable upon conversion of the Note) shall thereafter be applicable, as nearly as may be practicable in relation to any securities or assets thereafter deliverable upon the conversion hereof. The Borrower shall not affect any transaction described in this Section l.6(b) unless (a) it first gives, to the extent practicable, thirty (30) days prior written notice (but in any event at least fifteen (15) days prior written notice) of the record date of the special meeting of shareholders to approve, or if there is no such record date, the consummation of, such merger, consolidation, exchange of shares, recapitalization, reorganization or other similar event or sale of assets (during which time the Holder shall be entitled to convert this Note) and (b) the resulting successor or acquiring entity (if not the Borrower) assumes by written instrument the obligations of this Section l .6(b). The above provisions shall similarly apply to successive consolidations, mergers, sales, transfers or share exchanges.

 

(c)   Adiustment Due to Distribution. If the Borrower shall declare or make any distribution of its assets (or rights to acquire its assets) to holders of Common Stock as a dividend, stock repurchase, by way of return of capital or otherwise (including any dividend or distribution to the Borrower's shareholders in cash or shares (or rights to acquire shares) of capital stock of a subsidiary (i.e., a spin-off)) (a "Distribution"), then the Holder of this Note shall be entitled, upon any conversion of this Note after the date of record for determining shareholders entitled to such Distribution, to receive the amount of such assets which would have been payable to the older with respect to the shares of Common Stock issuable upon such conversion had such Holder been the holder of such shares of Common Stock on the record date for the determination of shareholders entitled to such Distribution.

 

(d)   Adiustment Due to Dilutive Issuance. If, at any time when any Notes are issued and outstanding, the Borrower issues or sells, or in accordance with this Section 1.6(d) hereof is deemed to have issued or sold, except for shares of Common Stock issued directly to vendors or suppliers of the Borrower in satisfaction of amounts owed to such vendors or suppliers (provided, however, that such vendors or suppliers shall not have an arrangement to transfer, sell or assign such shares of Common Stock prior to the issuance of such shares), any shares of Common Stock for no consideration or for a consideration per share (before deduction of reasonable expenses or commissions or underwriting discounts or allowances in connection therewith) less than the Conversion Price in effect on the date of such issuance (or deemed issuance) of such shares of Common Stock (a "Dilutive Issuance"), then immediately upon the Dilutive Issuance, the Conversion Price will be reduced to the amount of the consideration per share received by the Borrower in such Dilutive Issuance.

The Borrower shall be deemed to have issued or sold shares of Common Stock if the Borrower in any manner issues or grants any warrants, rights or options (not including employee stock option plans), whether or not immediately exercisable, to subscribe for or to purchase Common Stock or other securities convertible into or exchangeable for Common Stock ("Convertible Securities") (such warrants, rights and options to purchase Common Stock or Convertible Securities are hereinafter referred to as "Options") and the price per share for which Common Stock is issuable upon the exercise of such Options is less than the Conversion Price then in effect, then the Conversion Price shall be equal to such price per share. For purposes of the preceding sentence, the "price per share for which Common Stock is issuable upon the exercise of such Options" is determined by dividing (i) the total amount, if any, received or receivable by the Borrower as consideration for the issuance or granting of all such Options, plus the minimum aggregate amount of additional consideration, if any, payable to the Borrower upon the exercise of all such Options. plus, in the case of Convertible Securities issuable upon the exercise of such Options, the minimum aggregate amount of additional consideration payable upon the conversion or exchange thereof at the time such Convertible Securities first become convertible or exchangeable, by (ii) the maximum total number of shares of Common Stock issuable upon the exercise of all such Options (assuming full conversion of Convertible Securities, if applicable). No further adjustment to the Conversion Price will be made upon the actual issuance of such Common Stock upon the exercise of such Options or upon the conversion or exchange of Convertible Securities issuable upon exercise of such Options.

 

Additionally, the Borrower shall be deemed to have issued or sold shares of Common Stock if the Borrower in any manner issues or sells any Convertible Securities, whether or not immediately convertible (other than where the same are issuable upon the exercise of Options), and the price per share for which Common Stock is issuable upon such conversion or exchange is less than the Conversion Price then in effect, then the Conversion Price shall be equal to such price per share. For the purposes of the preceding sentence, the "price per share for which Common Stock is issuable upon such conversion or exchange" is determined by dividing (i) the total amount, if any, received or receivable by the Borrower as consideration for the issuance or sale of all such Convertible Securities, plus the minimum aggregate amount of additional consideration, if any, payable to the Borrower upon the conversion or exchange thereof at the time such Convertible Securities first become convertible or exchangeable, by (ii) the maximum total number of shares of Common Stock issuable upon the conversion or exchange of all such Convertible Securities. No further adjustment to the Conversion Price will be made upon the actual issuance of such Common Stock upon conversion or exchange of such Convertible Securities.

 

(e)    Purchase Rights. If, at any time when any Notes are issued and outstanding, the Borrower issues any convertible securities or rights to purchase stock, warrants, securities or other property (the "Purchase Rights") pro rata to the record holders of any class of Common Stock, then the Holder of this Note will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which such Holder could have acquired if such Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Note (without regard to any limitations on conversion contained herein) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights.

 

(f)    Notice of Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price as a result of the events described in this Section 1.6, the Borrower, at its expense, shal I promptly compute such adjustment or readjustment and prepare and furnish to the Holder a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Borrower shall, upon the written request at any time of the Holder, furnish to such Holder a like certificate setting forth (i) such adjustment or readjustment, (ii) the Conversion Price at the time in effect and (iii) the number of shares of Common Stock and the amount, if any, of other securities or property which at the time would be received upon conversion of the Note.

 

1.7 [Intentionally Omitted].

 

1.8   Status as Shareholder. Upon submission of a Notice of Conversion by a Holder, (i) the shares covered thereby (other than the shares, if any, which cannot be issued because their issuance would exceed such Holder's allocated portion of the Reserved Amount or Maximum Share Amount) shall be deemed converted into shares of Common Stock and (ii) the Holder's rights as a Holder of such converted portion of this Note shall cease and terminate, excepting only the right to receive certificates for such shares of Common Stock and to any remedies provided herein or otherwise available at law or in equity to such Holder because of a failure by the Borrower to comply with the terms of this Note. Notwithstanding the foregoing, if a Holder has not received certificates for all shares of Common Stock prior to the tenth (10th) business day after the expiration of the Deadline with respect to a conversion of any portion of this Note for any reason, then (unless the Holder otherwise elects to retain its status as a holder of Common Stock by so notifying the Borrower) the Holder shall regain the rights of a Holder of this Note with respect to such unconverted portions of this Note and the Borrower shall, as soon as practicable, return such unconverted Note to the Holder or, if the Note has not been surrendered, adjust its records to reflect that such portion of this Note has not been converted. In all cases, the Holder shall retain all of its rights and remedies (including, without limitation, (i) the right to receive Conversion Default Payments pursuant to Section 1.3 to the extent required thereby for such Conversion Default and any subsequent Conversion Default and (ii) the right to have the Conversion Price with respect to subsequent conversions determined in accordance with Section 1.3) for the Borrower's failure to convert this Note.

 

1.9   Prepayment. Notwithstanding anything to the contrary contained in this Note, the Borrower may prepay the amounts outstanding hereunder pursuant to the following terms and conditions:

 

(a)   At any time during the period beginning on the Issue Date and ending on the date which is ninety (90) days following the Issue Date, the Borrower shall have the right, exercisable on not less than three (3) Trading Days prior written notice to the Holder of the Note to prepay the outstanding Note (principal and accrued interest), in full by making a payment to the Holder of an amount in cash equal to 135%, multiplied by the sum of: (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note plus (y) Default Interest, if any.

 

(b) At any time during the period beginning the day which is ninety one( 91) days following the Issue Date and ending on the date which is one hundred eighty (180) days following the Issue Date, the Borrower shalI have the right, exercisable on not less than three (3) Trading Days prior written notice to the Holder of the Note to prepay the outstanding Note (principal and accrued interest), in full by making a payment to the Holder of an amount in cash equal to 150%, multiplied by the sum of: (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note plus (y) Default Interest, if any.

 

(c)   After the expiration of one hundred eighty (180) days following the date of the Note, the Borrower shall have no right of prepayment.

 

1.10           Any notice of prepayment hereunder (an "Optional Prepayment Notice") shall be delivered to the Holder of the Note at its registered addresses and shall state: (1) that the Borrower is exercising its right to prepay the Note, and (2) the date of prepayment which shall be not more than three (3) Trading Days from the date of the Optional Prepayment Notice. On the date fixed for prepayment (the "Optional Prepayment Date"), the Borrower shall make payment of the applicable prepayment amount to or upon the order of the Holder as specified by the Holder in writing to the Borrower at least one (I) business day prior to the Optional Prepayment Date. If the Borrower delivers an Optional Prepayment Notice and fails to pay the applicable prepayment amount due to the Holder of the Note within two (2) business days following the Optional Prepayment Date, the Borrower shall forever forfeit its right to prepay the Note pursuant to this Section 1.9.

 

ARTICLE II. CERTAIN COVENANTS

 

2.1   Distributions on Capital Stock. So long as the Borrower shall have any obligation under this Note, the Borrower shall not without the Holder's written consent (a) pay, declare or set apart for such payment, any dividend or other distribution (whether in cash, property or other securities) on shares of capital stock other than dividends on shares of Common Stock solely in the form of additional shares of Common Stock or (b) directly or indirectly or through any subsidiary make any other payment or distribution in respect of its capital stock except for distributions pursuant to any shareholders' rights plan which is approved by a majority of the Borrower's disinterested directors. ·

 

2.2   Restriction on Stock Repurchases. So long as the Borrower shall have any obligation under this Note, the Borrower shall not without the Holder's written consent redeem, repurchase or otherwise acquire (whether for cash or in exchange for property or other securities or otherwise) in any one transaction or series of related transactions any shares of capital stock of the Borrower or any warrants, rights or options to purchase or acquire any such shares.

 

2.3   Borrowings. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder's written consent, create, incur, assume guarantee, endorse, contingently agree to purchase or otherwise become liable upon the obligation of any person, firm, partnership, joint venture or corporation, except by the endorsement of negotiable instruments for deposit or collection, or suffer to exist any liability for borrowed money, except (a) borrowings in existence or committed on the date hereof and of which the Borrower has informed Holder in writing prior to the date hereof, (b) indebtedness to trade creditors financial institutions or other lenders incurred in the ordinary course of business or (c) borrowings, the proceeds of which shall be used to repay this Note.

 

2.4  Sale of Assets. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder's written consent, sell, lease or otherwise dispose of any significant portion of its assets outside the ordinary course of business. Any consent to the disposition of any assets may be conditioned on a specified use of the proceeds of disposition.

 

2.5  Advances and Loans. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder's written consent, lend money, give credit or make advances to any person, firm, joint venture or corporation, including, without limitation, officers, directors, employees, subsidiaries and affiliates of the Borrower, except loans, credits or advances (a) in existence or committed on the date hereof and which the Borrower has informed Holder in writing prior to the date hereof, (b) made in the ordinary course of business or (c) not in excess of $100,000.

 

2.6  Section 3(a)(9) or 3(a)( I 0) Transaction. So long as this Note is outstanding, the Borrower shall not enter into any transaction or arrangement structured in accordance with, based upon, or related or pursuant to, in whole or in part, either Section 3(a)(9) of the Securities Act (a "3(a)(9) Transaction") or Section 3(a)(I0) of the Securities Act (a "3(a)(I0) Transaction"). In the event that the Borrower does enter into, or makes any issuance of Common Stock related to a 3(a)(9) Transaction or a 3(a)(I0) Transaction while this note is outstanding, a liquidated damages charge of 25% of the outstanding principal balance of this Note, but not less than Fifteen Thousand Dollars $15,000, will be assessed and will become immediately due and payable to the Holder at its election in the form of cash payment or addition to the balance of this Note.

 

2.7   Preservation of Existence, etc. The Borrower shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, its existence, rights and privileges, and become or remain, and cause each of its Subsidiaries (other than dormant Subsidiaries that have no or minimum assets) to become or remain, duly qualified and in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary.

 

2.8   Non-circumvention. The Borrower hereby covenants and agrees that the Borrower will not, by amendment of its Certificate or Articles of Incorporation or Bylaws, or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Note, and will at all times in good faith carry out all the provisions of this Note and take all action as may be required to protect the rights of the Holder.

2.9    Repayment from Proceeds. While any portion of this Note is outstanding, if the Company receives cash proceeds from any source or series of related or unrelated sources, including but not limited to, from payments from customers, the issuance of equity or debt, the conversion of outstanding warrants of the Borrower, the issuance of securities pursuant to an equity line of credit of the Borrower or the sale of assets, the Borrower shall, within one (1) business day of Borrower's receipt of such proceeds, inform the Holder of such receipt, following which the Holder shall have the right in its sole discretion to require the Borrower to immediately apply all or any portion of such proceeds to repay all or any portion of the outstanding amounts O\yed under this Note. Failure of the Borrower to comply with this provision shall constitute an Event of Default. In the event that such proceeds are received by the Holder prior to the Maturity Date, the required prepayment shall be subject to the terms of Section 1.9 herein.

 

ARTICLE III. EVENTS OF DEFAULT

 

If any of the following events of default (each, an "Event of Default") shall occur:

 

3.1   Failure to Pay Principal or Interest. The Borrower fails to pay the principal hereof or interest thereon when due on this Note, whether at maturity, upon acceleration or otherwise.

 

3.2   Conversion and the Shares. The Borrower (i) fails to issue shares of Common Stock to the Holder (or announces or threatens in writing that it will not honor its obligation to do so) upon exercise by the Holder of the conversion rights of the Holder in accordance with the terms of this Note, (ii) fails to transfer or cause its transfer agent to transfer (issue) (electronically or in certificated form) any certificate for shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, (iii) directs its transfer agent not to transfer or delays, impairs, and/or hinders its transfer agent in transferring (or issuing) (electronically or in certificated form) any certificate for shares of Common Stock to be issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, (iv) fails to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note (or makes any written announcement, statement or threat that it does not intend to honor the obligations described in this paragraph) and any such failure shall continue uncured (or any written announcement, statement or threat not to honor its obi igations shall not be rescinded in writing) for three (3) business days after the Holder shall have delivered a Notice of Conversion, (v) fails to remain current in its obligations to its transfer agent, (vi) causes a conversion of this Note is delayed, hindered or frustrated due to a balance owed by the Borrower to its transfer agent, (vii) fails to repay Holder, within forty eight (48) hours of a demand from the Holder, any amount of funds advanced by Holder to Borrower's transfer agent in order to process a conversion or reserve increase, and/or (viii) fails to maintain the Reserved Amount.

 

3.3    Failure to Deliver Transaction Expense Amount. The Borrower fails to deliver the Transaction Expense Amount (as defined in the Purchase Agreement) to the Holder within three (3) business days of the date such amount is due.

 

3.4    Breach of Covenants. The Borrower breaches any material covenant or other material term or condition contained in this Note and any collateral documents including but not limited to the Purchase Agreement and such breach continues for a period of ten ( l 0) days after written notice thereof to the Borrower from the Holder.

 

3.5    Breach of Representations and Warranties. Any representation or warranty of the Borrower made herein or in any agreement, statement or certificate given in writing pursuant hereto or in connection herewith (including, without limitation, the Purchase Agreement), shall be false or misleading in any material respect when made and the breach of which has (or with the passage of time will have) a material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement.

 

3.6    Receiver or Trustee. The Borrower or any subsidiary of the Borrower shall make an assignment for the benefit of creditors or commence proceedings for its dissolution, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business, or such a receiver or trustee shal I otherwise be appointed for the Borrower or for a substantial part of its property or business without its consent and shall not be discharged within sixty (60) days after such appointment.

 

3.7   Judgments. Any money judgment, writ or similar process shall be entered or filed against the Borrower or any subsidiary of the Borrower or any of its property or other assets for more than $50,000, and shall remain unvacated, unbonded or unstayed for a period of twenty

(20) days unless otherwise consented to by the Holder, which consent will not be unreasonably withheld.

 

3.8   Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or involuntary, for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any subsidiary of the Borrower, or the Borrower admits in writing its inability to pay its debts generally as they mature, or have filed against it an involuntary petition for bankruptcy relief, all under federal or state laws as applicable or the Borrower admits in writing its inability to pay its debts generally as they mature, or have filed against it an involuntary petition for bankruptcy relief, all under international, federal or state laws as applicable.

 

3.9    Delisting of Common Stock. The Borrower shall fail to maintain the listing of the Common Stock on at least one of the OTC Pink, OTCQB, Nasdaq National Market, Nasdaq Small Cap Market, New York Stock Exchange, NYSE MKT, or an equivalent replacement exchange

 

3.10            Failure to Comply with the Exchange Act. The Borrower shall fail to comply with the reporting requirements of the Exchange Act (including but not limited to becoming delinquent in its filings); and/or the Borrower shall cease to be subject to the reporting requirements of the Exchange Act.

 

3.11           Liquidation. Any dissolution, liquidation, or winding up of Borrower or any substantial portion of its business.

 

3.12           Cessation of Operations. Any cessation of operations by Borrower or Borrower admits it is otherwise generally unable to pay its debts as such debts become due, provided, however, that any disclosure of the Borrower's ability to continue as a "going concern" shall not be an admission that the Borrower cannot pay its debts as they become due.

 

3.13            Maintenance of Assets. The failure by Borrower to maintain any material intellectual property rights, personal, real property or other assets which are necessary to conduct its business (whether now or in the future), or any disposition or conveyance of any material asset of the Borrower.

 

3.14           Financial Statement Restatement. The restatement of any financial statements filed by the Borrower with the SEC for any date or period from two years prior to the Issue Date of this Note and until this Note is no longer outstanding, if the result of such restatement would, by comparison to the unrestated financial statement, have constituted a material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement.

 

3.15           Reverse Splits. The Borrower effectuates a reverse split of its Common Stock without twenty (20) days prior written notice to the Holder.

 

3.16           Replacement of Transfer Agent. In the event that the Borrower proposes to replace its transfer agent, the Borrower fails to provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower.

 

3.17           Cessation of Trading. Any cessation of trading of the Common Stock on at least one of the OTC Pink, OTCQB, Nasdaq National Market, Nasdaq Small Cap Market, New York Stock Exchange, NYSE MKT, or an equivalent replacement exchange, and such cessation of trading shall continue for a period of five consecutive (5) Trading Days.

 

3.18           Cross-Default. Notwithstanding anything to the contrary contained in this Note or the other related or companion documents, a breach or default by the Borrower of any covenant or other term or condition contained in any of the Other Agreements (as defined herein), after the passage of all applicable notice and cure or grace periods, shall, at the option of the Holder, be considered a default under this Note and the Other Agreements, in which event the Holder shall be entitled (but in no event required) to apply all rights and remedies of the Holder under the terms of this Note and the Other Agreements by reason of a default under said Other Agreement or hereunder. "Other Agreements" means, collectively, all agreements and instruments between, among or by: (1) the Borrower, and, or for the benefit of, (2) the Holder (and any affiliate of the Holder) or any other third party, including, without limitation, promissory notes; provided, however, the term "Other Agreements" shall not include the agreements and instruments defined as the Documents. Each of the loan transactions wit1 ·be cross-defaulted with each other loan transaction and with all other existing and future debt of Borrower to the Holder.

 

3.19            Bid Price. The Borrower shall lose the "bid" price for its Common Stock ($0.0001 on the "Ask" with zero market makers on the "Bid" per Level 2) and/or a market (including the OTC Pink, OTCQB or an equivalent replacement exchange).

 

3.20            OTC Markets Designation. OTC Markets changes the Borrower's designation to 'No Information' (Stop Sign), 'Caveat Emptor' (Skull and Crossbones), or 'OTC', 'Other OTC' or 'Grey Market' (Exclamation Mark Sign).

 

3.21            Inside Information. Any attempt by the Borrower or its officers, directors, and/or affiliates to transmit, convey, disclose, or any actual transmittal, conveyance, or disclosure by the Borrower or its officers, directors, and/or affiliates of, material non-public information concerning the Borrower, to the Holder or its successors and assigns, which is not immediately cured by Borrower's filing of a Form 8-K pursuant to Regulation FD on that same date.

 

3.22Unavailability of Rule 144. If, at any time on or after the date which is six

(6) months after the Issue Date, the Holder is unable to (i) obtain a standard "144 legal opinion letter" from an attorney reasonably acceptable to the Holder, the Holder's brokerage firm (and respective clearing firm), and the Borrower's transfer agent in order to facilitate the Holder's conversion of any portion of the Note into free trading shares of the Borrower's Common Stock pursuant to Rule 144, and (ii) thereupon deposit such shares into the Holder's brokerage account.

 

Upon the occurrence of any Event of Default specified in Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.I3, 3.14, 3.15, 3.16. 3.17, 3.18, 3.19, 3.20, 3.21, and/or 3.22 exercisable through the delivery of written notice to the Borrower by such Holders (the "Default Notice"), the Note shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to (i) 150% (EXCEPT WITH RESPECT TO SECTION 3.2 AND/OR 3.22, IN WHICH CASE 150% SHALL BE REPLACED WITH 200%) times the sum of (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the date of payment (the "Mandatory Prepayment Date") plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and/or (x) plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof (the then outstanding principal amount of this Note to the date of payment plus the amounts referred to in clauses (x), (y) and (z) shall collectively be known as the "Default Sum") or (ii) at the option of the Holder, the "parity value" of the Default Sum to be prepaid, where parity value means (a) the highest number of shares of Common Stock issuable upon conversion of or otherwise pursuant to such Default Sum in accordance with Article I, treating the Trading Day immediately preceding the Mandatory Prepayment Date as the "Conversion Date" for purposes of determining the lowest applicable Conversion Price, unless the Default Event arises as a result of a breach in respect of a specific Conversion Date in which case such Conversion Date shall be the Conversion Date), multiplied by (b) the highest Trading Price for the Common Stock during the period beginning on the date of fast occurrence of the Event of Default and ending one day prior to the Mandatory Prepayment Date (the " Default Amount") and all other amounts payable hereunder shall immediately become due and payable , all without demand, presentment or notice, all of which hereby are expressly waived, together with all costs, including, without limitation , legal fees and expenses , of collection, and the Holder shall be entitled to exercise all other rights and remedies available at law or in equity. Further, if a breach of Sections 3.9, 3.1 0 and/or 3.19 occurs or is continuing after the six (6) month anniversary of this Note, then the principal amount of the Note shall increase by fifteen Thousand and 00/100 United States Dollars ($15,000) (under Holder's and Borrower's expectation that any principal amount increase will tack back to the Issue Date) and the Holder shall be entitled to use the lowest Trading Price during the delinquency period as a base price for the conversion with the Variable Conversion Price shall be redefined to mean forty percent (40%) multiplied by the Market Price (at the option of the Holder), subject to adjustment as provided in this Note. For example, if the lowest Trading Price during the delinquency period is $0.01 per share and the conversion discount is 50%, then the Holder may elect to convert future conversions at $0.005 per share. If this Note is not paid at Maturity Date, then the outstanding principal due under this Note shall in crease by Fifteen Thousand and No/I 00 United States Dollars ($15, 000).

 

The Holder shall have the right at any time, to require the Borrower, to immediately issue, in lieu of the Default Amount, the number of shares of Common Stock or the Borrower equal to the Default Amount divided by the Conversion Price then in effect, pursuant to the terms of this Note (including but not limited to any beneficial ownership limitations contained he re in). This requirement by the Borrower shall automatically apply upon the occurrence of an Event of Default without the need for any party to give any notice or take any other action.

 

If the Holder shall commence an action or proceeding to enforce any provisions of this Note, including, with out limitation, en gaging an attorney , then if the Holder prevails in such action, the Holder shall be reimbursed by the Borrower for its attorneys ' fees and other costs and expenses incurred in the investigation , preparation and prosecution of such action or proceeding.

 

ARTICLE IV. MISCELLANEOUS

 

4. 1 Failure or Indulgence Not Waive r. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right. power or privileges. All rights and remedies existing hereunder are cumulative to and not exclusive of. any rights or remedies otherwise avail able .

 

4.2  Notices. All notices. demands , requests, consents, approvals , and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice . Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile , with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such deli very (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service . fully prepaid, addressed to such address, or upon actual receipt of such mailing. whichever shall first occur. The addresses for such communications shall be:

 

If to the Borrower, to:

Regen Biopharma , Inc.

4700 Spring Street, Suite 304

La Mesa , CA 9 19 42

Attn: David Koos

E-mai I: david.koos@regenbiopharma.com

If to the Holder:

Auctus Fund , LLC

177 H untington Avenue , 17th Floor Boston, MA 02 11 5

Attn: Lou Posner

Facsimil e : (617) 532-6420

 

With a copy to (which copy shall not constitute notice) :

Chad Friend, Esq., LL.M.

Legal & Compliance, LLC

330 Clematis Street, Suite 217

West Palm Beach, FL 334 0 I

E-mail: CFriend@LegalandCompl iance .com

 

4.3   3 Amendments. This Note and any provision hereof may only be amended by an instrument in writing signed by the Borrower and the Holder. The term " Note" and all reference thereto. as used throughout this instrument, shall mean this instrument (and the other Notes issued pursuant to the Purchase Agreement) as originally executed, or if later amended or supplemented, then as so amended or supplemented.

 

4.4  4 Assignability. This Note shall be bin ding upon the Borrower and its successors and assigns, and shall insure to be the benefit of the Holder and its successors and assigns. Neither the Borrower nor the Holder shall assign this Note or any rights or obligations hereunder without the prior written consent of the other. Not withstanding the foregoing, the Holder may assign its rights hereunder to any "accredited investor" (as defined in Rule 5 0 1(a) of the 1933 Act) in a private transaction from the Holder or to any of its "affiliates", as that term is defined under the 1934 Act, without the consent of the Borrower. Notwithstanding anything in this Note to the contrary, this Note may be pledged as collateral in connection with a bona fide margin account or other lending arrangement. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note represented by this Note may be less than the amount stated on the face hereof.

 

4.5  Cost of Collection. If default is made in the payment of this Note, the Borrower shall pay the Holder hereof reasonable costs of collection, including reasonable attorneys' fees.

 

4.6  Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of Nevada without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Note shall be brought only in the state courts of Massachusetts or in the federal courts located in the Commonwealth of Massachusetts. The parties to this Note hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. THE BORROWER HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs. In the event that any provision of this Note or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

 

4.7  Certain Amounts. Whenever pursuant to this Note the Borrower is required to pay an amount in excess of the outstanding principal amount (or the portion thereof required to be paid at that time) plus accrued and unpaid interest plus Default Interest on such interest, the Borrower and the Holder agree that the actual damages to the Holder from the receipt of cash payment on this Note may be difficult to determine and the amount to be so paid by the Borrower represents stipulated damages and not a penalty and is intended to compensate the Holder in part for loss of the opportunity to convert this Note and to earn a return from the sale of shares of Common Stock acquired upon conversion of this Note at a price in excess of the price paid for such shares pursuant to this Note. The Borrower and the Holder hereby agree that such amount of stipulated damages is not plainly disproportionate to the possible loss to the Holder from the receipt of a cash payment without the opportunity to convert this Note into shares of Common Stock.

 

4.8  Purchase Agreement. By its acceptance of this Note, each party agrees to be bound by the applicable terms of the Purchase Agreement.

 

4.9  Notice of Corporate Events. Except as otherwise provided below, the Holder of this Note shall have no rights as a Holder of Common Stock unless and only to the extent that it converts this Note into Common Stock. The Borrower shall provide the Holder with prior notification of any meeting of the Borrower's shareholders (and copies of proxy materials and other information sent to shareholders). In the event of any taking by the Borrower of a record of its shareholders for the purpose of determining shareholders who are entitled to receive payment of any dividend or other distribution, any right to subscribe for, purchase or otherwise acquire (including by way of merger, consolidation, reclassification or recapitalization) any share of any class or any other securities or property, or to receive any other right, or for the purpose of determining shareholders who are entitled to vote in connection with any proposed sale, lease or conveyance of all or substantially all of the assets of the Borrower or any proposed liquidation, dissolution or winding up of the Borrower, the Borrower shall mail a notice to the Holder, at least twenty (20) days prior to the record date specified therein (or thirty (30) days prior to the consummation of the transaction or event, whichever is earlier), of the date on which any such record is to be taken for the purpose of such dividend, distribution, right or other event, and a brief statement regarding the amount and character of such dividend, distribution, right or other event to the extent known at such time. The Borrower shall make a public announcement of any event requiring notification to the Holder hereunder substantially simultaneously with the notification to the Holder in accordance with the terms of this Section 4.9 including, but not limited to, name changes, recapitalizations, etc. as soon as possible under law.

 

4.10           Usury. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury, the applicable provision shall automatically be revised to equal the maximum rate of interest or other amount deemed interest permitted under applicable law. The Borrower covenants (to the extent that it may lawfully do so) that it will not seek to claim or take advantage of any law that would prohibit or forgive the Borrower from paying all or a portion of the principal or interest on this Note.

 

4.1 I Remedies. The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder, by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Borrower acknowledges that the remedy at law for a breach of its obligations under this Note will be inadequate and agrees, in the event of a breach or threatened breach by the Borrower of the provisions of this Note, that the Holder shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Note and to enforce specifically the terms and provisions thereof, without the necessity of showing economic loss and without any bond or other security being required. No provision of this Note shall alter or impair the obligation of the Borrower, which is absolute and unconditional, to pay the principal of, and interest on, this Note at the time, place, and rate, and in the form, herein prescribed.

 

4.12 Severability. In the event that any provision of this Note is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision hereof.

 

4. I 3 Dispute Resolution. In the case of a dispute as to the determination of the Conversion Price, Conversion Amount, any prepayment amount or Default Amount, Default Sum, Closing or Maturity Date, the closing bid price, or fair market value (as the case may be) or the arithmetic calculation of the Conversion Price or the applicable prepayment amount(s) (as the case may be), the Borrower or the Holder shall submit the disputed determinations or arithmetic calculations via facsimile (i) within two (2) Business Days after receipt of the applicable notice giving rise to such dispute to the Borrower or the Holder or (ii) if no notice gave rise to such dispute, at any time after the Holder learned of the circumstances giving rise to such dispute. If the Holder and the Borrower are unable to agree upon such determination or calculation within two (2) Business Days of such disputed determination or arithmetic calculation (as the case may be) being submitted to the Borrower or the Holder, then the Borrower shall, within two (2) Business Days, submit via facsimile (a) the disputed determination of the Conversion Price, the closing bid price, the or fair market value (as the case may be) to an independent, reputable investment bank selected by the Borrower and approved by the Holder or (b) the disputed arithmetic calculation of the Conversion Price, Conversion Amount, any prepayment amount or Default Amount, Default Sum to an independent, outside accountant selected by the Holder that is reasonably acceptable to the Borrower. The Borrower shall cause at its expense the investment bank or the accountant to perform the determinations or calculations and notify the Borrower and the Holder of the results no later than ten ( I0) Business Days from the time it receives such disputed determinations or calculations. Such investment bank's or accountant's determination or calculation shall be binding upon all parties absent demonstrable error.

 

4.14          Terms of Future Financings. So long as this Note is outstanding, upon any issuance by the Borrower or any of its subsidiaries of any security with any term more favorable to the holder of such security or with a term in favor of the holder of such security that was not similarly provided to the Holder in this Note, then the Borrower shall notify the Holder of such additional or more favorable term and such term, at Holder's option, shall become a part of the transaction documents with the Holder. The types of terms contained in another security that may be more favorable to the holder of such security include, but are not limited to, terms addressing conversion discounts, prepayment rate, conversion lookback periods, interest rates, original issue discounts, stock sale price, private placement price per share, and warrant coverage.

 

4.15          Piggyback Registration Rights. The Borrower shall include on the next registration statement the Borrower files with SEC (or on the subsequent registration statement if such registration statement is withdrawn) all shares issuable upon conversion of this Note. Failure to do so will result in liquidated damages of 25% of the outstanding principal balance of this Note, but not less than Fifteen Thousand and No/ I00 United States Dollars ($15,000), being immediately due and payable to the Holder at its election in the form of cash payment or addition to the balance of this Note.

 

4. I 6 Exemption to Restrictive Provisions. Sections 2.3 and 2.9 of the Note shall not apply to any transaction in which the Borrower issues securities to (a) any holder of the securities of the Borrower as of the Issue Date ("Present Investor") or (b) any entity which has been issued securities of the Borrower prior to the Issue Date that is not a Present Investor ("Previous Investor").

 

 

[signature page follows]

 

 

 1 

 

 

IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly authorize d officer as of the date first above written.

 

 

    REGEN BIOPHARMA, INC.
     
  Name /s/ David Koos
  Title Chief Executive Officer
     

 

 2 

 

 

EXHIBIT A NOTICE OF CONVERSION

 

The undersigned hereby elects to convert principal amount of the Note (defined below) together with$ of accrued and unpaid interest thereto, totaling $ into that number of shares of Common Stock to be issued pursuant to the conversion of the Note ("Common Stock") as set forth below, of Regen Biopharma, Inc., a Nevada corporation (the "Borrower"), according to the conditions of the convertible note of the Borrower dated as of May 18, 2018 (the ''Note"), as of the date written below. No fee will be charged to the Holder for any conversion, except for transfer taxes, if any.

 

Box Checked as to applicable instructions:

 

[ ] The Borrower shall electronically transmit the Common Stock issuable pursuant to this Notice of Conversion to the account of the undersigned or its nominee with DTC through its Deposit Withdrawal At Custodian system ("DW AC Transfer").

 

Name of DTC Prime Broker: Account Number:

 

[ ] The undersigned hereby requests that the Borrower issue a certificate or certificates for the number of shares of Common Stock set forth below (which numbers are based on the Holder's calculation attached hereto) in the name(s) specified immediately below or, if additional space is necessary, on an attachment hereto:

 

Date of Conversion:

Applicable Conversion Price    
(Attach Bloomberg price documentation)  
Number of Shares of Common Stock to be Issued Pursuant to Conversion of Note:    
     
Amount of Principal Balance Due Remaining Under the Note After This Conversion:    
Accrued and unpaid interest remaining:    

 

[HOLDER]

 

 

By: ___________________________________ Name: [NAME]

Title: [TITLE]

Date: [DATE]

EX-10.2 3 ex10_2.htm EXHIBIT 10.2

CONVERTIBLE PROMISSORY NOTE

 

THIS NOTE AND ANY SHARES OF STOCK ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THIS NOTE AND ANY SHARES OF STOCK ISSUABLE UPON THE CONVERSION HEREOF MAY NOT BE SOLD, OFFERED FOR SALE, MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT COVERING THIS NOTE OR SUCH SHARES UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR THE DELIVERY OF AN OPINION OF COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED. THIS NOTE IS ALSO SUBJECT TO RESTRICTIONS ON TRANSFER.

 

REGEN BIOPHARMA, INC.

 

Issue Date: July 11, 2018 Principal Amount: $11,500.00

 

1.      Terms. For value received, the Regen BioPharma, Inc., a Nevada corporation (the "Company") hereby absolutely and unconditionally promises to pay to the order of Caven Investments LLC (the "Lender") ON DEMAND AT ANY TIME AFTER May 4, 2021 (the "Maturity Date"), the principal amount of eleven thousand five hundred dollars ($11,500.00) and interest on the whole amount of said principal sum outstanding and remaining from time to time unpaid (the ''Note"), commencing from the date hereof and continuing until payment in full of this Note or conversion as hereinafter provided, at an annual rate equal to ten percent (10%) simple interest. Interest shall be payable quarterly upon demand or upon conversion pursuant to Section 2 hereunder. Interest shall be computed on the basis of the actual number of days elapsed divided by 365. Principal and interest shall be payable in lawful money of the United States of America, at the principal place of business of the Lender or at such other place as the Lender may have designated from time to time in writing to the Company.

 

2. Conversion.

 

2.1   Conversion Right. The Lender shall have the right from time to time to convert all or a part of the outstanding and unpaid principal amount of this Note and all or part of the outstanding and unpaid accrued interest of this Note into fully paid and non-assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Company into which such Common Stock shall hereafter be changed or reclassified at the conversion price (the "Conversion Price") determined as provided herein (a "Conversion").

 

The Lender shall have the right to convert one hundred percent (100%) of the Principal Amount and any accrued interest commencing as of the date which is the earlier of:

 

(i)One day subsequent to the execution of an agreement to a transaction whose completion would result in a "Change of Control" of the Company. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions, whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.
  
(ii)(ii) One day subsequent to the execution of an agreement to a transaction whose completion would result in a "Change of Control" of KCL Therapeutics, Inc. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions, whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.
  
(iii)One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority percentage of the Company's outstanding equity securities for a limited period of time contingent on shareholders of the Company tendering a fixed number of their equity securities ("Tender Offer").
  
(iv)One day subsequent to the execution of an agreement that could result in a Transaction Event:

 

"Transaction Event" shall mean either of:

 

(a)The sale by the Company or by KCL Therapeutics, Inc. of any or all of the Company's proprietary NR2F6 intellectual property to an unaffiliated third party

 

(b)The granting of a license by the Company or by KCL Therapeutics, Inc. to an unaffiliated third party granting that unaffiliated third party the right to develop and/or commercialize any or all of the Company's proprietary NR2F6 intellectual property

 

If the execution of the agreement resulting in a Transaction Event shall result in a closing of the Transaction Event prior to 30 days subsequent to the execution of the agreement, the right to convert under this subsection (iv) shall be 30 days prior to the closing to the Transaction Event, and the Company shall provide the Lender with a Notice of Right to Convert at least 30 days prior to the closing of the Transaction Event.

 

(v)That date which is twenty four (24) months subsequent to the date of execution of this Note.

 

The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the principal amount of this Note to be converted (the "Conversion Amount") by the applicable Conversion Price as defined in this Section 2 then in effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit A (the "Notice of Conversion"), delivered to the Company by the Lender on such conversion date (the "Conversion Date").

 

 

2.2  Conversion Price. The "Conversion P ice" shall be defined as the lower $0.0 I per share, or, a 75% discount to the closing price of the Common Stock on the Over-the-Counter Bulletin Board on the trading day immediately prior to the date that a Notice of Conversion is submitted pursuant to Section 2.3. or, if the Over-the-Counter Bulletin Board is not the principal trading market for such security, the closing price of such security on the principal securities exchange or trading market where such security is listed or traded on the trading day immediately prior to the date that a Notice of Conversion is submitted pursuant to Section 2.3. or, if no closing bid price of such security is available in any of the foregoing manners, the average of the closing bid prices of any market makers for such security that are listed in the "pink sheets" by the National Quotation Bureau, Inc. on the trading day immediately prior to the date that a Notice of Conversion is submitted pursuant to Section 2.3.

 

2.3    Method of Conversion. Subject to Section 2.1, this Note may be converted by the Lender by submitting to the Company a Notice of Conversion by facsimile, e-mail or other reasonable means of communication dispatched on the Conversion Date prior to 5:00 p.m., New York, New York time. The Lender shall not be required to physically surrender this Note to the Company unless the entire unpaid principal amount of this Note is so converted. The Lender and the Company shall maintain records showing the principal amount so converted and the dates of such conversions so as not to require physical surrender of this Note upon each such conversion. In the event of any dispute or discrepancy, such records of the Company shall, prima facie, be controlling and determinative in the absence of manifest error. Notwithstanding the foregoing, if any portion of this Note is converted as aforesaid, the Lender may not transfer this Note unless the Lender first physically surrenders this Note to the Company, whereupon. the Company will forthwith issue and deliver upon the order of the Lender a new Note of like tenor, registered as the Lender (upon payment by the Lender of any applicable transfer taxes) may request, representing in the aggregate the remaining unpaid principal amount of this Note.

 

Upon receipt by the Company from the Lender of a facsimile transmission, e-mail, or other reasonable means of communication of a Notice of Conversion meeting the requirements for conversion, the Company shall issue and deliver or cause to be issued and delivered to or upon the order of the Lender certificates for the Common Stock issuable upon such conversion within ten (10) business days after such receipt. Upon receipt by the Company of a Notice of Conversion, the Lender shall be deemed to be the Lender of record of the Common Stock issuable upon such conversion, the outstanding principal amount and the amount of accrued and unpaid interest on this Note shall be reduced to reflect such conversion. All rights with respect to the portion of this Note being so converted shall forthwith terminate except the right to receive the Common Stock or other securities as herein provided on such conversion. In lieu of delivering physical certificates representing the Common Stock issuable upon conversion, provided the Company is participating in the Depository Trust Company ("DTC") Fast Automated Securities Transfer ("FAST") program, upon request of the Lender, the Company shall use its best efforts to cause its transfer agent to electronically transmit the Common Stock issuable upon conversion to the Lender by crediting the account of Lender's Prime Broker with DTC through its Deposit Withdrawal Agent Commission ("DWAC") system.

 

2.4   Concerning the Shares. The shares of Common Stock issuable upon conversion of this Note may not be sold or transferred unless (i) such shares are sold pursuant to an effective registration statement under the Act or (ii) the Company or its transfer agent shall have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration or

(iii) such shares are sold or transferred pursuant to Rule 144 under the Act (or a successor rule) ("Rule 144") or (iv) such shares are transferred to an "affiliate" (as defined in Rule 144) of the Company who agrees to sell or otherwise transfer the shares only in accordance with this Section

 

2.5 and who is an Accredited Investor as the term Accredited Investor is defined in Rule 501 of Regulation D, promulgated under the Act.

 

Subject to the removal provisions set forth below, until such time as the shares of Common Stock issuable upon conversion of this Note have been registered under the Act or otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities as of a particular date that can then be immediately sold, each certificate for shares of issuable upon conversion of this Note that has not been so included in an effective registration statement or that has not been sold pursuant to an effective registration statement or an exemption that permits removal of the legend, shall bear a legend substantially in the following form, as appropriate:

 

"NEITHER THE ISSUANCE OR SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF I 933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF I933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE LENDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT."

 

The legend set forth above shall be removed and the Company shall issue to the Lender a new certificate therefore free of any transfer legend if (i) the Company or its transfer agent shall have received an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Common Stock may be made without registration under the Act and the shares are so sold or transferred, (ii) such Lender provides the Company or its transfer agent with reasonable assurances that the Common Stock issuable upon conversion of this Note (to the extent such securities are deemed to have been acquired on the same date) can be sold pursuant to Rule 144 or (iii) in the case of the Common Stock issuable upon conversion of this Note, such security is registered for sale by under an effective registration statement filed under the Act or (iv) otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities as of a particular date that can then be immediately sold.

 

2.5 Reverse Stock Splits. If the number of shares of Common Stock outstanding at any time while this Note is outstanding is decreased by a combination of the outstanding shares ofC ommon Stock, then, following the record date of such combination, the Conversion Price shall be appropriately increased so that the number of shares of Common Stock issuable on conversion hereof shall be decreased in proportion to such decrease in outstanding shares.

 

2.6 Stock Dividends and Stock Splits. If the Company, at any time while this Note is outstanding subdivides outstanding shares of Common Stock into a larger number of shares then the Conversion price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of the Company) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such even'

 

 

3. Payment.

 

 

WIRE INSTRUCTIONS:

First Republic Bank San Francisco, CA ABA 321081669

619-462-6700

Regen BioPharma, Inc.

Acct# 80002061175

 

 

 

4.           Prepayment. Notwithstanding anything to the contrary contained herein, the Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest. Any notice of prepayment hereunder shall be delivered to the Lender at its registered addresses and shall state that the Company is exercising its right to prepay the Note and the date of prepayment, which shall be not more than ten (10) Trading Days from the date of the prepayment notice. Upon receipt of a prepayment notice, Lender shall have the right, but not the obligation, to accelerate the conversion period specified in Section 2.1 and convert that portion of the outstanding principal balance which is subject to prepayment to Common Shares as provided for in Section 2.

 

5.      Warrant Coverage. In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.01 per share. See Exhibit B (incorporated into this Note) for instructions on completing the Exercise of Warrants document.

 

 

6. Events of Default.

 

6.1  The following shall constitute events of default (individually an "Event of Default"):

 

The following shall constitute events of default (individually an "Event of Default"):

 

(a)default in the payment, when due or payable, of an obligation to pay interest or principal under this Note, which default is not cured by payment in full of the amount due within thirty (30) days from the date that the Lender receives notice of the occurrence of such default;
(b)filing of a petition in bankruptcy or the commencement of any proceedings under any bankruptcy laws by or against the Company, which filing or proceeding, is not dismissed within ninety (90) days after the filing or commencement thereof; or
(c)failure of the Company to comply in any way with the terms, covenants or conditions contained in this Note.

 

6.2 If an Event of Default shall occur and be continuing, the Lender may, at its option, declare this Note to be immediately due and payable without further notice or demand, whereupon this Note shall become immediately due and payable without presentment, demand or protest, all of which are hereby waived by the Company.

 

7. Transfer of Note. This Note may not be transferred or assigned other than a transfer or assignment to an Affiliate of the Lender. As used herein, the term "Affiliate" means an entity that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the Lender.

 

8. Certain Waivers. The Company hereby expressly and irrevocably waives presentment, demand, protest, notice of protest and any other formalities of any kind.

 

9. Amendment, Modification or Termination. This Note may only be modified, amended, or terminated (other than by payment in full) by an agreement in writing signed by the Company and the Lender. No waiver of any term, covenant or provision of this Note shall be effective unless given in writing by the Lender.

 

10. Governing Law. This Note and the obligations of the Company hereunder shall be governed by and interpreted and determined in accordance with the laws of the State of California (excluding the laws and rules of law applicable to conflicts or choice of law).

 

 

/s/ David R. Koos    
David R. Koos Date
Chairman and CEO    
     
     

 

The foregoing Convertible Promissory Note is hereby accepted and agreed to by the undersigned on and as of the date first above written.

 

 

Cav   07/11/2018
Caven Investment LLC   Date
8578 Terraceview Lane North    
Maple Grove, MN 55311    
     

 

 1 

 

 

EXHIBIT A

NOTICE OF CONVERSION

The undersigned hereby elects to convert $ ___________________________ principal amount and ________________ accrued interest of the Note into that number of shares of Common Stock to be issued pursuant to the conversion of the Note as set forth below of REGEN BIOPHARMA, INC. according to the conditions of the convertible note of the Company dated as of 2017 as of the date written below.

Date of Conversion:

Applicable Conversion Price    
(Attach Bloomberg price documentation)  
Number of Shares of Common Stock to be Issued Pursuant to Conversion of Note:    
     
Amount of Principal Balance Due Remaining Under the Note After This Conversion:    

Checked box corresponds to applicable instructions:

The Borrower shall electronically transmit the Common Stock issuable pursuant to this Notice of Conversion to the account of the undersigned or its nominee with DTC through its Deposit Withdrawal Agent Commission system ("DWAC Transfer").

 

  Name of DTC Prime Broker:    
  Account Number    

[1 The undersigned hereby requests that the Borrower issue a certificate or certificates for the number of shares of Common Stock set forth below in the name(s) specified immediately below or, if additional space is necessary, on an attachment hereto:

  Name:    
  Address:    
       
       
  Phone:    

 

       
Name   Date  
Title      

 

 

 2 

 

 

EXHIBIT B

 

COMMON STOCK PURCHASE WARRANT REGEN BIOPHARMA, INC.

 

THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT OR APPLICABLE EXEMPTION OR SAFE HARBOR PROVISION.

 

 

THIS COMMON STOCK PURCHASE WARRANT (the "Warrant") certifies that, for value received, Lender is entitled, solely upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, to subscribe for and purchase from the Company, shares of common stock of the Company (the "Warrant Shares"). The purchase price of one Warrant Share under this Warrant shall be equal to the $0.01 per Warrant Share ("Exercise Price").

 

1.In the event that Company shall exercise Company's rights pursuant to Section 4 of the Note ("Prepayment Clause") , Lender shall be entitled , on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company ("Prepayment Date") , to subscribe for and purchase from the Company up to that number of Warrant Shares at the Exercise Price per Share equivalent to that one tenth of that number of Common Shares that Lender would have been entitled to be issued had Lender exercised Lender's Conversion Right pursuant to Section 2.1 of the Note as of the Prepayment Date.
2.In the event that, as of the Maturity Date, part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding, Lender shall be entitled, on or prior to the close of business on the three (3) month anniversary of the Maturity Date, to subscribe for and purchase from the Company up to that number of Warrant Shares at the Exercise Price per Share equivalent to that one tenth of that number of Common Shares that Lender would have been entitled to be issued had Lender exercised Lender's Conversion Right pursuant to Section 2.1 of the Note as of the Maturity Date.
3.If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3 shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or reclassification
4.Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, from and after the initial exercise date, and then at any time, by delivery to the Company (or such other office or agency of the Company as it may designate by notice in writing to Lender at the address of the Lender appearing on the books of the Company) of a duly executed facsimile or emailed copy of the Notice of Exercise form annexed hereto and delivery of the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer.
5.Warrant Shares purchased hereunder will be delivered to Holder within 10 business days of Notice of Exercise.
6.The Warrant Shares may not be sold or transferred unless (i) such shares are sold pursuant to an effective registration statement under the Act or (ii) the Company or its transfer agent shall have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration or (iii) such shares are sold or transferred pursuant to Rule 144 under the Act (or a successor rule) ("Rule 144") or (iv) such shares are transferred to an "affiliate" (as defined in Rule 144) of the Company who agrees to sell or otherwise transfer the shares only in accordance with this Section 6 and who is an Accredited Investor as the term Accredited Investor is defined in Rule 501 of Regulation D, promulgated under the Act. Subject to the removal provisions set forth below, until such time as the Warrant Shares have been registered under the Act or otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities as of a particular date that can then be immediately sold, each certificate for Warrant Shares that have not been so included in an effective registration statement or that have not been sold pursuant to an effective registration statement or an exemption that permits removal of the legend, shall bear a legend substantially in the following form, as appropriate:

 

"NEITHER THE ISSUANCE OR SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE LENDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT."

 

The legend set forth above shall be removed and the Company shall issue to the Lender a new certificate therefore free of any transfer legend if (i) the Company or its transfer agent shall have received an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such securities may be made without registration under the Act and the shares are so sold or transferred, (ii) such Lender provides the Company or its transfer agent with reasonable assurances that the Warrant Shares can be sold pursuant to Rule 144 or (iii) such security is registered for sale by under an effective registration statement filed under the Act or (iv) otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities as of a particular date that can then be immediately sold.

 

 

7.The Lender shall not be required to physically surrender this Warrant to the Company. If the Lender has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, this Warrant shall automatically be cancelled without the need to surrender the Warrant to the Company for cancellation.
8.This Warrant may not be transferred or assigned other than a transfer or assignment to an Affiliate of the Lender. As used herein, the term "Affiliate" means an entity that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the Lender.
9.FORM OF WARRANT NOTICE

 

 

NOTICE OF EXERCISE

 

TO: REGEN BIOPHARMA, INC.

 

The undersigned hereby elects to purchase Warrant Shares of the Company pursuant to the terms of the Warrant issued in connection with that Convertible Note in the amount of

by and between

and the Company dated

and maturing

, 2020 and

tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.

 

Please issue a certificate or certificates representing said Warrant Shares in the name of the undersigned. The undersigned is an "accredited investor" as defined in Regulation D promulgated under the Securities Act of 1933, as amended.

 

[SIGNATURE]

 

Name:-----------------

Date:-----------------

 3 

 

EX-31.1 4 ex31_1.htm EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, David Koos, certify that:

 

1. I have reviewed this Quarterly Report on Form 10-Q of Regen BioPharma, Inc.;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

 

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

 

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 

Date: July 25, 2018 By: /s/  David R. Koos
    David R. Koos 
Chief Executive Officer

 

 

EX-31.2 5 ex31_2.htm EXHIBIT 31.2

CERTIFICATION OF ACTING CHIEF FINANCIAL OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Todd S. Caven, certify that:

 

1. I have reviewed this Quarterly Report on Form 10-Q of Regen BioPharma, Inc.;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

 

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

 

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 

Date: July 25, 2018 By: /s/  Todd S. Caven
    Todd S. Caven 

 

 

EX-32.1 6 ex32_1.htm EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

 

 

In connection with the Quarterly report of Regen BioPharma, Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, in the capacities and on the dates indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

 

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and

 

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: July 25, 2018 By: /s/  David R. Koos
    David R. Koos 
Chief Executive Officer

 

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002, or other document authentications, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Regen BioPharma, Inc. and will be retained by Regen BioPharma, Inc. and furnished to the Securities and Exchange Commission or its staff upon request

 

 

 

 

EX-32.2 7 ex32_2.htm EXHIBIT 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

 

 

In connection with the Quarterly report of Regen BioPharma, Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, in the capacities and on the dates indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to her knowledge:

 

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and

 

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

  

Date: July 25, 2018 By: /s/  Todd S. Caven
    Todd S. Caven 
Acting Chief Financial Officer

  

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002, or other document authentications, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Regen BioPharma, Inc. and will be retained by Regen BioPharma, Inc. and furnished to the Securities and Exchange Commission or its staff upon request. 

  

 

 

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Notes Payable Convertible Notes Payable Receivables [Abstract] Notes Receivable Income Tax Disclosure [Abstract] Income Taxes Related Party Transactions [Abstract] Related Party Transactions Commitments and Contingencies Disclosure [Abstract] Commitments and Contingencies Equity [Abstract] Stockholders Equity Investment Securities Notes to Financial Statements Stock Transactions Prior Period Adjustments Subsequent Events [Abstract] Subsequent Events BASIS OF ACCOUNTING PRINCIPLES OF CONSOLIDATION USE OF ESTIMATES CASH EQUIVALENTS PROPERTY AND EQUIPMENT FAIR VALUE OF FINANCIAL INSTRUMENTS DERIVATIVE LIABILITIES INCOME TAXES BASIC EARNINGS (LOSS) PER SHARE ADVERTISING NOTES RECEIVABLE REVENUE RECOGNITION INTEREST RECEIVABLE Schedule of Derivative Liability Notes Payable Notes Receivable Deferred tax assets Comprehensive Income Advertising expenses Valuation allowance Net loss since inception Sale of equity securities Issuance of convertible debt Notes Payable Note payable Interest rate per annum Maturity Date Convertible note issued and outstanding Convertible note, interest rate Beneficial conversion feature Unamortized discount Converted value that exceeds the principal amount Outstanding balance Converted value that exceeds the principal if converted into common stock Converted value that exceeds the principal if converted into Series A Preferred Stock Derivative Liability Cash issued for convertible note Original Issue Discount Notes Receivable Promissory Note Deferred tax assets: Net operating tax carry forwards Other Gross deferred tax assets Valuation allowance Net deferred tax assets Deferred Tax Asset Net operating loss carry forwards Federal corporate rate Capital contributions from related party Common shares issued to BMSN Value of shares issued to BMSN Monthly rent payable to Entest Notes Receivable Notes Payable, Total amount Consideration License fee Royalties receivable, percentage Royalties, receivable Common shares issued in satisfaction of license fee Common shares value in issuance of license initiaion fee Revenue recognized equivalent to fair value of common shares Partial payment Nonvoting convertible preferred stock of Entest Biomedical, Inc issued Debt applied to royalty payment Receivable from Zander Indebtedness satisfied in cash Anniversery Fee Advance From Related Party Common stock, Par value Common stock, authorized Common stock issued and outstanding Preferred stock, authorized Preferred stock, shares issued and outstanding Preferred stock, non-cumulative cash dividends Preferred shares voting Investment Securities, Basis Investment Securities, Fair Value Investment Securities, Total Unrealized Losses Investment Securities, Net Unrealized Loss during the quarter Stock issued as license fee, shares Stock issued as license fee, value Common shares of Entest Biomedical, Inc Stock issued in satisfaction of debt, shares Stock issued in satisfaction of debt, value Shares issued in satisfaction of convertible identedness 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Document and Entity Information
9 Months Ended
Jun. 30, 2018
shares
Document And Entity Information  
Entity Registrant Name Regen BioPharma Inc
Entity Central Index Key 0001589150
Document Type 10-Q
Document Period End Date Jun. 30, 2018
Amendment Flag false
Current Fiscal Year End Date --09-30
Is Entity a Well-known Seasoned Issuer? No
Is Entity a Voluntary Filer? No
Is Entity's Reporting Status Current? Yes
Entity Filer Category Smaller Reporting Company
Entity Common Stock, Shares Outstanding 158,726,196
Document Fiscal Period Focus Q3
Document Fiscal Year Focus 2018
XML 15 R2.htm IDEA: XBRL DOCUMENT v3.10.0.1
Balance Sheet (Unaudited) - USD ($)
Jun. 30, 2018
Sep. 30, 2017
CURRENT ASSETS    
Cash $ 55,404 $ 269,973
Accounts Receivable 0 0
Note Receivable, Related Party 4,551 4,551
Note Receivable 0 165,000
Prepaid Expenses 8,042 34,427
Accrued Interest Receivable 7,559 4,436
Prepaid Rent 15,000 0
Total Current Assets 90,556 478,387
OTHER ASSETS    
Available for Sale Securities 468,252 465,852
Total Other Assets 468,252 465,852
TOTAL ASSETS 558,808 944,239
Current Liabilities:    
Bank Overdraft 203 0
Accounts payable 74,044 495,749
Notes Payable 3,227 111,355
Accrued payroll taxes 4,241 857
Accrued Interest 248,117 122,807
Accrued Rent 0 5,000
Accrued Payroll 854,163 590,996
Other Accrued Expenses 41,243 33,034
Due to Investor 20,000 20,000
Due to Investor, Related Party 11,500 0
Derivative Liability 6,585,896 4,234,475
Convertible Notes Payable 712,762 248,890
Unearned Income 68,000 0
Total Current Liabilities 8,623,396 5,863,164
Long Term Liabilities:    
Convertible Notes Payable 510,241 332,409
Total Long Term Liabilities 510,241 332,409
Total Liabilities 9,133,637 6,195,573
STOCKHOLDERS EQUITY (DEFICIT)    
Common Stock ($.0001 par value) 500,000,000 shares authorized; 139,704,157 issued and outstanding as of A September 30, 2017 and 158726196 shares issued and outstanding June 30, 2018 15,871 13,969
Series A Preferred 300,000,000 authorized, 139,942,206 and 136,966,617 outstanding as of June 30, 2018 and September 30, 2017 respectively 13,995 13,697
Series AA Preferred $0.0001 par value 600,000 authorized and 50, 000 and 50,000 outstanding as of September 30, 2017 and June 30, 2018, respectively 5 5
Series M Preferred $0.0001 par value 300,000,000 authorized and 32,000,000 and 38,000,000 outstanding as of September 30, 2017 and June 30, 2018 respectively 3,800 3,200
Additional Paid in capital 7,055,513 6,642,979
Contributed Capital 728,658 728,658
Retained Earnings (Deficit) (16,483,071) (12,741,843)
Accumulated other comprehensive income 90,400 88,000
Total Stockholders' Equity (Deficit) (8,574,829) (5,251,335)
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT) 558,808 944,239
Series A Preferred Stock    
STOCKHOLDERS EQUITY (DEFICIT)    
Series A Preferred 300,000,000 authorized, 139,942,206 and 136,966,617 outstanding as of June 30, 2018 and September 30, 2017 respectively 13,995 13,697
Series AA Preferred Stock    
STOCKHOLDERS EQUITY (DEFICIT)    
Series AA Preferred $0.0001 par value 600,000 authorized and 50, 000 and 50,000 outstanding as of September 30, 2017 and June 30, 2018, respectively 5 5
Series M    
STOCKHOLDERS EQUITY (DEFICIT)    
Series M Preferred $0.0001 par value 300,000,000 authorized and 32,000,000 and 38,000,000 outstanding as of September 30, 2017 and June 30, 2018 respectively $ 3,800 $ 3,200
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Balance Sheet (Unaudited) (Parenthetical) - $ / shares
Jun. 30, 2018
Sep. 30, 2017
Common stock, par value (in dollars per share) $ 0.0001 $ 0.0001
Common stock, shares authorized 500,000,000 500,000,000
Common stock, shares issued 158,726,196 139,704,157
Common stock, shares outstanding 158,726,196 139,704,157
Preferred stock, par value $ 0.0001 $ 0.0001
Preferred stock, shares authorized 800,000,000 100,000,000
Series A Preferred Stock    
Preferred stock, par value $ 0.0001 $ 0.0001
Preferred stock, shares authorized 300,000,000 300,000,000
Preferred stock, shares issued 139,942,206 136,966,617
Preferred stock, shares outstanding 139,942,206 136,966,617
Series AA Preferred Stock    
Preferred stock, par value $ 0.0001 $ 0.0001
Preferred stock, shares authorized 600,000 600,000
Preferred stock, shares issued 50,000 50,000
Preferred stock, shares outstanding 50,000 50,000
Series M    
Preferred stock, par value $ 0.0001 $ 0.0001
Preferred stock, shares authorized 300,000,000 300,000,000
Preferred stock, shares issued 38,000,000 32,000,000
Preferred stock, shares outstanding 38,000,000 32,000,000
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Statements of Operations (Unaudited) - USD ($)
3 Months Ended 9 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Income Statement [Abstract]        
REVENUES $ 100,000 $ 110,000 $ 100,000 $ 110,000
COST AND EXPENSES        
Research and Development 8,795 374,452 338,828 686,840
General and Administrative 172,626 193,374 570,867 633,964
Consulting and Professional Fees 29,953 80,226 309,686 474,985
Rent 15,000 15,000 45,000 45,000
Total Costs and Expenses 226,374 663,052 1,264,381 1,840,789
OPERATING LOSS (126,374) (553,052) (1,164,381) (1,730,789)
OTHER INCOME & (EXPENSES)        
Interest Income 577 40 10,121 633
Other Income 96   96 34,666
Interest Expense (63,618) (28,005) (194,093) (56,492)
Interest Expense attributable to Amortization of Discount (345,483) (118,976) (997,519) (259,749)
Derivative Income (Expense) 474,202 (1,923,414) (1,300,011) (2,483,975)
Loss on Early Extinguishment of Convertible Debt (53,877)   (95,443)  
TOTAL OTHER INCOME (EXPENSE) 11,897 (2,070,355) (2,576,848) (2,764,917)
NET INCOME (LOSS) (114,477) (2,623,407) (3,741,229) (4,495,706)
NET INCOME (LOSS) attributable to common shareholders $ (114,477) $ (2,623,407) $ (3,741,229) $ (4,495,706)
BASIC AND FULLY DILUTED EARNINGS (LOSS) PER SHARE $ (0.0007) $ (0.0190) $ (0.0252) $ 0.0316
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 153,505,198 138,112,605 148,379,644.6 142,215,914
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Statement of Comprehensive Income (Unaudited) - USD ($)
3 Months Ended 9 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Statement Of Comprehensive Income        
Net Income (Loss) $ (114,477) $ (2,623,407) $ (3,741,229) $ (4,495,706)
Add:        
Unrealized Gains on Securities     40,000 208,000
Less:        
Unrealized Losses on Securities (18,400) (8,000) (37,600) (8,000)
Total Other Comprehensive Income (Loss) (18,400) (8,000) 2,400 200,000
Comprehensive Income $ (132,877) $ (2,631,407) $ (3,738,829) $ (4,295,706)
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Statement of Cash Flows (Unaudited) - USD ($)
9 Months Ended
Jun. 30, 2018
Jun. 30, 2017
CASH FLOWS FROM OPERATING ACTIVITIES    
Net Income (Loss) $ (3,741,229) $ (4,495,706)
Adjustments to reconcile net Income to net cash    
Preferred Stock issued to Consultants 600 50
Common Stock issued to Consultants 144,060 13,400
Preferred Stock issued for Compensation   3,150
Preferred Stock issued for expenses   5,000
Common Stock issued for Interest 5,888  
Increase (Decrease) in Interest expense attributable to amortization of Discount 997,519 259,749
Increase (Decrease) in Loss on Early Extinguishment of debt 95,443  
Increase in Additional Paid in Capital   8,580
Increase (Decrease) in Accounts Payable (421,713) 218,037
Increase in Accounts Receivable   (19,852)
(Increase) Decrease in Interest Receivable (10,121) (633)
Increase (Decrease) Unearned Income 68,000  
Increase (Decrease) in Accrued Expenses 418,398 301,764
(Increase) Decrease in Prepaid Expenses (15,000) 26,584
Increase in Derivative Expense 1,300,011 2,483,975
(Increase) Decrease in Notes Receivable 40,000 7,500
Increase in Stock Accepted as Consideration   (83,000)
Net Cash Provided by (Used in) Operating Activities (1,118,145) (1,271,402)
CASH FLOWS FROM FINANCING ACTIVITIES    
Common Stock issued for Cash 25,000 292,500
Preferred Stock issued for Cash 25,000 317,500
Increase (Decrease) in Notes Payable (108,128) (21,793)
Increase in Bank Overdraft 203  
Increase in Convertible Notes Payable 950,000 1,094,000
(Increase) Decrease in Original Issue Discount   (4,000)
Increase (Decrease) in Due to Shareholder   (50,000)
Increase (Decrease) in Due to Investor 11,500 20,000
Net Cash Provided by (Used in) Financing Activities 903,575 1,648,207
Net Increase (Decrease) in Cash (214,570) 376,805
Cash at Beginning of Period 269,973 24,822
Cash at End of Period 55,404 401,627
Supplemental Disclosure of Noncash Investing and Financing Activities:    
Common Shares Issued for Debt 218,000  
Preferred Shares Issued for Debt 7,000  
Cash Paid for Interest 39,666 $ 7,000
Common shares Issued for Interest 15,794  
Preferred Shares issued for Interest $ 377  
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Organization and Summary of Significant Accounting Policies
9 Months Ended
Jun. 30, 2018
Accounting Policies [Abstract]  
Organization and Summary of Significant Accounting Policies

NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

The Company was organized April 24, 2012 under the laws of the State of Nevada.

 

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

 

The Company is currently engaged in actively identifying small molecules that inhibit or express NR2F6 leading to immune cell activation for oncology applications and immune cell suppression for autoimmune disease.

 

The Company is in the early stages of development of its proposed products and therapies. The Company will be required to obtain approval from the FDA in order to market any of The Company’s products or therapies. No approval has been granted by the FDA for the marketing and sale of any of the Company’s products and therapies and no assurance may be given that any of the Company’s products or therapies will be granted such approval. The Company’s current plans include the development of regenerative medical applications up to the point of successful completion of Phase I and/ or Phase II clinical trials after which the Company would either attempt to sell or license those developed applications or, alternatively, advance the application further to Phase III clinical trials. The Company can provide no assurance that the Company will be able to sell or license any product or that, if such product is sold or licensed, such sale or license will be on terms favorable to the Company.

 

A. BASIS OF ACCOUNTING

 

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

 

B. PRINCIPLES OF CONSOLIDATION

 

The consolidated financial statements include the accounts of KCL, Therapeutics, Inc., a Nevada corporation and wholly owned subsidiary of Regen. Significant inter-company transactions have been eliminated

 

C. 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.

 

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.

 

F. FAIR VALUE OF FINANCIAL INSTRUMENTS

 

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

 

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

 

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

 

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

 

G. DERIVATIVE LIABILITIES.

 

The Company evaluates its convertible debt, options, warrants or other contracts, if any, to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with ASC 815 of the FASB Accounting Standards Codification. The result of this accounting treatment is that the fair value of the embedded derivative is marked-to-market each balance sheet date and recorded as either an asset or a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the consolidated statement of operations.

 

The Company analyzes the conversion feature of Convertible Notes for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging. ASC 815-15 requires that the conversion features are bifurcated and separately accounted for as an embedded derivative contained in the Company’s convertible debt. The embedded derivative is carried on the balance sheet at fair value. Any unrealized change in fair value, as determined at each measurement period, is recorded as a component of the income statement and the associated carrying amount on the balance sheet is adjusted by the change. The Company values the embedded derivative using the Black-Scholes pricing model

 

The Black Scoles pricing model used to determine the Derivative Liability on convertible notes issued by the Company in which an embedded derivative is recognized as of June 30, 2018 utilized the following inputs:

 

Risk Free Interest Rate   1.31 -1.62%
Expected Term   0.15-2.34 Yrs
Expected Volatility   154-197%
Expected Dividends   0

 

H. INCOME TAXES

 

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

 

The Company applied the provisions of ASC 740-10-50, “Accounting For Uncertainty In Income Taxes”, which provides clarification related to the process associated with accounting for uncertain tax positions recognized in our financial statements. Audit periods remain open for review until the statute of limitations has passed. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the Company’s liability for income taxes. Any such adjustment could be material to the Company’s results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period. As of June 30, 2018 the Company had no uncertain tax positions, and will continue to evaluate for uncertain positions in the future.

 

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

 

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

 

I.  BASIC EARNINGS (LOSS) PER SHARE

 

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

 

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

 

J. ADVERTISING

 

Costs associated with advertising are charged to expense as incurred. Advertising expenses were $0 for the quarter ended June 30, 2018 .

 

K. NOTES RECEIVABLE

 

Notes receivable are stated at cost, less impairment, if any.

 

L. REVENUE RECOGNITION

 

 Sales of products and related costs of products sold are recognized when: (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred; (iii) the price is fixed or determinable; and (iv) collectability is reasonably assured. These terms are typically met upon the prepayment or invoicing and shipment of products.

 

The Company determines the amount and timing of royalty revenue based on its contractual agreements with intellectual property licensees. The Company recognizes royalty revenue when earned under the terms of the agreements and when the Company considers realization of payment to be probable. Where royalties are based on a percentage of licensee sales of royalty-bearing products, the Company recognizes royalty revenue by applying this percentage to the Company’s estimate of applicable licensee sales. The Company bases this estimate on an analysis of each licensee’s sales results. Where warranted, revenue from licensees for contractual obligations such as License Initiation Fees are recognized upon satisfaction of all conditions required to be satisfied in order for that revenue to have been earned by the Company.

 

M. INTEREST RECEIVABLE

 

Interest receivable is stated at cost, less impairment, if any.

XML 21 R8.htm IDEA: XBRL DOCUMENT v3.10.0.1
Recent Accounting Pronouncements
9 Months Ended
Jun. 30, 2018
Accounting Changes and Error Corrections [Abstract]  
Recent Accounting Pronouncements

NOTE 2.  RECENT ACCOUNTING PRONOUNCEMENTS

 

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

 

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

 

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

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

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

 

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

 

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

 

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

 

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

 

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

 

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

In January 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) 2016-01, which amends the guidance in U.S. GAAP on the classification and measurement of financial instruments. Changes to the current guidance primarily affect the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the ASU clarifies guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The new standard is effective for fiscal years and interim periods beginning after December 15, 2017, and upon adoption, an entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period in which the guidance is effective. Early adoption is not permitted except for the provision to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other comprehensive income. The Company anticipates adoption in the fiscal year ending September 30, 2019. 

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

XML 22 R9.htm IDEA: XBRL DOCUMENT v3.10.0.1
Going Concern
9 Months Ended
Jun. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Going Concern

NOTE 3. GOING CONCERN

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company generated net losses of $16,483,071 during the period from April 24, 2012 (inception) through June 30, 2018. This condition raises substantial doubt about the Company’s ability to continue as a going concern. The Company’s continuation as a going concern is dependent on its ability to meet its obligations, to obtain additional financing as may be required and ultimately to attain profitability. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Management plans to raise additional funds by offering securities for cash. Management has yet to decide what type of offering the Company will use or how much capital the Company will raise. During the quarter ended December 31, 2017 the Company raised $625,000 cash through the issuance of convertible debentures, exclusive of fees and/or discounts on notes. During the quarter ended March 31, 2018, the Company raised $50,000 cash through the sale of equity securities and $225,000 cash through the issuance of convertible debentures, exclusive of fees and/or discounts on notes. During the quarter ended June 30, 2018 the Company raised $138,000 cash through the issuance of convertible debentures and satisfaction of a Note Receivable held by the Company as consideration for a previously issued convertible debenture.

XML 23 R10.htm IDEA: XBRL DOCUMENT v3.10.0.1
Notes Payable
9 Months Ended
Jun. 30, 2018
Debt Disclosure [Abstract]  
Notes Payable

NOTE 4. NOTES PAYABLE

 

    June 30, 2018
David Koos ( Note 8)     227  
Bostonia Partners     3,000  
Notes payable   $ 3,227  

 

$227 lent to the Company by David Koos is due and payable at the demand of the holder and bears simple interest at a rate of 15% per annum.

 

$3,000 lent to the Company by Bostonia Partners is due and payable May 10 2017 and bears simple interest at a rate of 10% per annum.

XML 24 R11.htm IDEA: XBRL DOCUMENT v3.10.0.1
Convertible Notes Payable
9 Months Ended
Jun. 30, 2018
Debt Disclosure [Abstract]  
Convertible Notes Payable

NOTE 5. CONVERTIBLE NOTES PAYABLE

 

On March 8, 2016 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $100,000 for consideration consisting of $100,000 cash. The Note pays simple interest in the amount of 8% per annum . The maturity of the Note is three years from the issue date.

 

The Lender shall have the right from time to time to convert all or a part of the outstanding and unpaid principal amount of this Note into fully paid and non- assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Company into which such Common Stock shall hereafter be changed or reclassified pursuant to the following terms and conditions:

 

(a)   For the period beginning on the Issue Date and ending 365 days subsequent to the Issue Date (“Year 1”) a 50% discount to the lowest Trading Price (as defined below) for the Common Stock during the ten (10) Trading Day (as defined below) period ending on the latest complete Trading Day prior to the Conversion Date or ten cents per share (whichever is greater).

 

(b)   For the period beginning one day subsequent to the final day of Year One and ending 365 days subsequent to Year One (“Year 2”) a 35% discount to the lowest Trading Price (as defined below) for the Common Stock during the ten (10) Trading Day (as defined below) period ending on the latest complete Trading Day prior to the Conversion Date or ten cents per share (whichever is greater).

 

(iv)   For the period beginning one day subsequent to the final day of Year 2 and ending 365 days subsequent to Year 2 (“Year 3”) a 25% discount to the lowest Trading Price (as defined below) for the Common Stock during the ten (10) Trading Day (as defined below) period ending on the latest complete Trading Day prior to the Conversion Date or ten cents per share (whichever is greater).

 

(d)   “Trading Price” means the closing bid price on the Over-the-Counter Bulletin Board, or applicable trading market (the “OTCQB”) as reported by a reliable reporting service (“Reporting Service”) designated by the Lender (i.e. Bloomberg) or, if the OTCQB is not the principal trading market for such security, the closing bid price of such security on the principal securities exchange or trading market where such security is listed or traded or, if no closing bid price of such security is available in any of the foregoing manners, the average of the closing bid prices of any market makers for such security that are listed in the “pink sheets” by the National Quotation Bureau, Inc. If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by the Company and the Lender. “Trading Day” shall mean any day on which the Common Stock is tradable for any period on the OTCQB, or on the principal securities exchange or other securities market on which the Common Stock is then being traded. “Trading Volume” shall mean the number of shares traded on such Trading Day as reported by such Reporting Service. The Conversion Price shall be equitably adjusted for stock splits, stock dividends, rights offerings, combinations, recapitalization, reclassifications, extraordinary distributions and similar events by the Company relating to the Lender’s securities.

 

The Company shall have the right, exercisable on not less than five (5) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

Upon closing of a Transaction Event the Lender shall receive 0 .10% ( one tenth of one percent)of the consideration actually received by the Company from an unaffiliated third party as a result of the closing of a Transaction Event.

 

“Transaction Event” shall mean either of:

 

(a) The sale by the Company of the Company’s proprietary NR2F6 intellectual property to an unaffiliated third party

 

(b) The granting of a license by the Company to an unaffiliated third party granting that unaffiliated third party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property

 

The issuance of the Note amounted in a beneficial conversion feature of $42,600 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $ 9,845. As of June 30, 2018 $100,000 of the principal amount of the Note remains outstanding.

 

The amount by which the Note’s as converted value exceeds the principal amount as of June 30, 2018 is $0.

 

On April 6, 2016 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $50,000 for consideration consisting of $50,000 cash. The Note pays simple interest in the amount of 8% per annum . The maturity of the Note is three years from the issue date.

 

The Lender shall have the right from time to time to convert all or a part of the outstanding and unpaid principal amount of this Note into fully paid and non- assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Company into which such Common Stock shall hereafter be changed or reclassified pursuant to the following terms and conditions:

 

(a)   For the period beginning on the Issue Date and ending 365 days subsequent to the Issue Date (“Year 1”) a 50% discount to the lowest Trading Price (as defined below) for the Common Stock during the ten (10) Trading Day (as defined below) period ending on the latest complete Trading Day prior to the Conversion Date or ten cents per share (whichever is greater).

 

(b)   For the period beginning one day subsequent to the final day of Year One and ending 365 days subsequent to Year One (“Year 2”) a 35% discount to the lowest Trading Price (as defined below) for the Common Stock during the ten (10) Trading Day (as defined below) period ending on the latest complete Trading Day prior to the Conversion Date or ten cents per share (whichever is greater).

 

(iv)   For the period beginning one day subsequent to the final day of Year 2 and ending 365 days subsequent to Year 2 (“Year 3”) a 25% discount to the lowest Trading Price (as defined below) for the Common Stock during the ten (10) Trading Day (as defined below) period ending on the latest complete Trading Day prior to the Conversion Date or ten cents per share (whichever is greater).

 

(d)   “Trading Price” means the closing bid price on the Over-the-Counter Bulletin Board, or applicable trading market (the “OTCQB”) as reported by a reliable reporting service (“Reporting Service”) designated by the Lender (i.e. Bloomberg) or, if the OTCQB is not the principal trading market for such security, the closing bid price of such security on the principal securities exchange or trading market where such security is listed or traded or, if no closing bid price of such security is available in any of the foregoing manners, the average of the closing bid prices of any market makers for such security that are listed in the “pink sheets” by the National Quotation Bureau, Inc. If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by the Company and the Lender. “Trading Day” shall mean any day on which the Common Stock is tradable for any period on the OTCQB, or on the principal securities exchange or other securities market on which the Common Stock is then being traded. “Trading Volume” shall mean the number of shares traded on such Trading Day as reported by such Reporting Service. The Conversion Price shall be equitably adjusted for stock splits, stock dividends, rights offerings, combinations, recapitalization, reclassifications, extraordinary distributions and similar events by the Company relating to the Lender’s securities.

The Company shall have the right, exercisable on not less than five (5) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

Upon closing of a Transaction Event the Lender shall receive 0 .10% ( one tenth of one percent)of the consideration actually received by the Company from an unaffiliated third party as a result of the closing of a Transaction Event.

 

“Transaction Event” shall mean either of:

 

(a)   The sale by the Company of the Company’s proprietary NR2F6 intellectual property to an unaffiliated third party

 

(b)   The granting of a license by the Company to an unaffiliated third party granting that unaffiliated third party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property

The issuance of the Note amounted in a beneficial conversion feature of $9,900 which is amortized under the Interest Method over the life of the Note. As of June 30 2018 the unamortized discount on the convertible note outstanding is $ 2,557. As of June 30, 2018 $50,000 of the principal amount of the Note remains outstanding. The amount by which the Note’s as converted value exceeds the principal amount as of June 30, 2018 is $0.

 

On September 8, 2016 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $50,000 for consideration consisting of $50,000 cash. The Note pays simple interest in the amount of 10% per annum . The maturity of the Note is one year from the issue date.

 

The Lender shall have the right from time to time to convert all or a part of the outstanding and unpaid principal amount of this Note into fully paid and non- assessable shares of Common Stock and/or Series A Preferred Stock, as such Stock exists on the Issue Date, or any shares of capital stock or other securities of the Company into which such Stock shall hereafter be changed or reclassified at a conversion price of $0.0125 per share.

 

The Company shall have the right, exercisable on not less than three (3) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

The issuance of the Note amounted in a beneficial conversion feature of $50,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $ 0. As of June 30, 2018 $50,000 of the principal amount of the Note remains outstanding.

The amount by which the Note’s as converted value exceeds the principal amount as of June 30, 2018 is :

 

(a)   $42,000 if the entire principal amount is converted into common stock

 

(b)   $62,000 if the entire principal amount is converted into Series A Preferred stock

On September 20, 2016 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $50,000 for consideration consisting of $50,000 cash. The Note pays simple interest in the amount of 10% per annum . The maturity of the Note is one year from the issue date.

 

The Lender shall have the right from time to time to convert all or a part of the outstanding and unpaid principal amount of this Note into fully paid and non- assessable shares of Common Stock and/or Series A Preferred Stock, as such Stock exists on the Issue Date, or any shares of capital stock or other securities of the Company into which such Stock shall hereafter be changed or reclassified at a conversion price of $0.0125 per share.

 

The Company shall have the right, exercisable on not less than three (3) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

The issuance of the Note amounted in a beneficial conversion feature of $50,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $ 0. As of June 30, 2018 $50,000 of the principal amount of the Note remains outstanding.

The amount by which the Note’s as converted value exceeds the principal amount as of June 30, 2018 is :

 

(a)   $42,000 if the entire principal amount is converted into common stock

 

(b)   $62,000 if the entire principal amount is converted into Series A Preferred stock

On October 7, 2016 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $50,000 for consideration consisting of $50,000 cash. The Note pays simple interest in the amount of 10% per annum . The maturity of the Note is two years from the issue date.

 

The Lender shall have the right from time to time to convert all or a part of the outstanding and unpaid principal amount of this Note into fully paid and non- assessable shares of Common Stock and/or Series A Preferred Stock, as such Stock exists on the Issue Date, or any shares of capital stock or other securities of the Company into which such Stock shall hereafter be changed or reclassified at a conversion price of $0.0125 per share.

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

 The issuance of the Note amounted in a beneficial conversion feature of $50,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $7,191. As of June 30, 2018 $50,000 of the principal amount of the Note remains outstanding.

The amount by which the Note’s as converted value exceeds the principal amount as of June 30, 2018 is :

 

(a)   $42,000 if the entire principal amount is converted into common stock

 

(b)   $62,000 if the entire principal amount is converted into Series A Preferred stock

On October 31, 2016 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $50,000 for consideration consisting of $50,000 cash. The Note pays simple interest in the amount of 10% per annum . The maturity of the Note is two years from the issue date.

 

The Lender shall have the right from time to time to convert all or a part of the outstanding and unpaid principal amount of this Note into fully paid and non- assessable shares of Common Stock and/or Series A Preferred Stock, as such Stock exists on the Issue Date, or any shares of capital stock or other securities of the Company into which such Stock shall hereafter be changed or reclassified at a conversion price of $0.0125 per share.

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

The issuance of the Note amounted in a beneficial conversion feature of $50,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $8835. As of June 30, 2018 $50,000 of the principal amount of the Note remains outstanding.

The amount by which the Note’s as converted value exceeds the principal amount as of June 30, 2018 is :

 

(a)   $42,000if the entire principal amount is converted into common stock

 

(b)   $62,000 if the entire principal amount is converted into Series A Preferred stock

On October 31, 2016 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $50,000 for consideration consisting of $50,000 cash. The Note pays simple interest in the amount of 10% per annum . The maturity of the Note is two years from the issue date.

 

The Lender shall have the right from time to time to convert all or a part of the outstanding and unpaid principal amount of this Note into fully paid and non- assessable shares of Common Stock and/or Series A Preferred Stock, as such Stock exists on the Issue Date, or any shares of capital stock or other securities of the Company into which such Stock shall hereafter be changed or reclassified at a conversion price of $0.0125 per share.

  

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

The issuance of the Note amounted in a beneficial conversion feature of $50,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $ 8,835 As of June 30, 2018 $50,000 of the principal amount of the Note remains outstanding.

 

The amount by which the Note’s as converted value exceeds the principal amount as of June 30, 2018 is:

 

(a)   $42,000 if the entire principal amount is converted into common stock

 

(b)   $62,000 if the entire principal amount is converted into Series A Preferred stock

 

 On October 31, 2016 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $50,000 for consideration consisting of $50,000 cash. The Note pays simple interest in the amount of 10% per annum . The maturity of the Note is two years from the issue date.

 

The Lender shall have the right from time to time to convert all or a part of the outstanding and unpaid principal amount of this Note into fully paid and non- assessable shares of Common Stock and/or Series A Preferred Stock, as such Stock exists on the Issue Date, or any shares of capital stock or other securities of the Company into which such Stock shall hereafter be changed or reclassified at a conversion price of $0.0125 per share.

  

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

The issuance of the Note amounted in a beneficial conversion feature of $50,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $ 8,835 As of June 30, 2018 $50,000 of the principal amount of the Note remains outstanding.

The amount by which the Note’s as converted value exceeds the principal amount as of June 30, 2018 is :

 

(a)   $42,000 if the entire principal amount is converted into common stock

 

(b)   $62,000 if the entire principal amount is converted into Series A Preferred stock

On December 22, 2016 (“Issue date”) the Company issued a fifth Convertible Note (“Note”) in the face amount of $40,000 for consideration consisting of $40,000 cash. The Note pays simple interest in the amount of 10% per annum . The maturity of the Note is one year from the issue date.

 

The Lender shall have the right from time to time to convert all or a part of the outstanding and unpaid principal amount of this Note into fully paid and non- assessable shares of Common Stock and/or Series A Preferred Stock, as such Stock exists on the Issue Date, or any shares of capital stock or other securities of the Company into which such Stock shall hereafter be changed or reclassified at a conversion price of $0.01 per share.

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

The issuance of the Note amounted in a beneficial conversion feature of $40,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $ 0. As of June 30, 2018 $40,000 of the principal amount of the Note remains outstanding.

The amount by which the Note’s as converted value exceeds the principal amount as of June 30, 2018 is :

 

(a)   $52,000 if the entire principal amount is converted into common stock

 

(b)   $72,000 if the entire principal amount is converted into Series A Preferred stock

On March 1, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $75,000 for consideration consisting of $75,000 cash. The Note pays simple interest in the amount of 10% per annum . The maturity of the Note is March 1, 2020. All or part of the principal is convertible at any time at the demand of the Lender into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.0125 per common share.

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.05 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company(“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note. As of June 30 , 2018 $75,000 of the principal amount of the Note remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $260,869 was recognized by the Company as of June 30, 2018.

 

The issuance of the Note amounted in a discount of $75,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $ 42,153.

 

On March 9, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $25,000 for consideration consisting of $25,000 cash. The Note pays simple interest in the amount of 10% per annum . The maturity of the Note is March 9, 2020. All or part of the principal is convertible at any time at the demand of the Lender into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.025 per common share.

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.05 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company(“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note. As of June 30, 2018 $25,000 of the principal amount of the Note remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $83,333 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount $25,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $ 14,233.

 

On March 13, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $50,000 for consideration consisting of $50,000 cash. The Note pays simple interest in the amount of 10% per annum . The maturity of the Note is February 24, 2020. All or part of the principal is convertible at any time at the demand of the Lender into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.0125 per common share.

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.05 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company(“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note. As of June 30, 2018 $50,000 of the principal amount of the Note remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $166,667 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $50,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $ 29,470.

 

On March 31, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $50,000 for consideration consisting of $50,000 cash. The Note pays simple interest in the amount of 10% per annum . The maturity of the Note is March 31, 2020. All or part of the principal is convertible at any time at the demand of the Lender into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.0125 per common share.

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.05 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company(“Prepayment Date”)

 

In the event part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note. As of June 30, 2018 $50,000 of the principal amount of the Note remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $166,667 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $50,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $30,109.

 

On April 19, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $25,000 for consideration consisting of $25,000 cash. The Note pays simple interest in the amount of 10% per annum . The maturity of the Note is April 19, 2020. All or part of the principal is convertible at any time at the demand of the Lender into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.0125 per common share.

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.05 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company(“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note

 

As of June 30, 2018 $25,000 of the principal amount of the Note remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $83,333 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $25,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $15,054.

 

On April 19, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $50,000 for consideration consisting of $50,000 cash. The Note pays simple interest in the amount of 10% per annum . The maturity of the Note is April 19, 2020. All or part of the principal is convertible at any time at the demand of the Lender into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.0125 per common share.

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.05 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company(“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note

 

As of June 30, 2018 $50,000 of the principal amount of the Note remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $166,667 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $50,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $30,109.

 

On May 5, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $200,000 for consideration consisting of $200,000 cash. The Note pays simple interest in the amount of 10% per annum . The maturity of the Note is May 5, 2020. The Note is convertible into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.025 per common share as of the date which is the earlier of:

 

(i)   One day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of the Company. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions, whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.

 

(ii)   One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company tendering a fixed number of their equity securities (“Tender Offer”).

 

(iii)   That date which is twenty four (24) months subsequent to the date of execution of this Note.

  

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.05 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company(“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note

 

As of June 30, 2018 $200,000 of the principal amount of the Note remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $666,667 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $200,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $123,357.

 

On May 10, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $100,000 for consideration consisting of $100,000 cash. The Note pays simple interest in the amount of 10% per annum . The maturity of the Note is May 9, 2020. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.025 per common share as of the date which is the earlier of:

 

(i)   One day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of the Company. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions, whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.

 

(ii)   One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company tendering a fixed number of their equity securities (“Tender Offer”).

 

(iii)   That date which is twenty four (24) months subsequent to the date of execution of this Note.

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.05 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company(“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note

 

As of June 30, 2018 $100,000 of the principal amount of the Note remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $333,333 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $100,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $60,082.

 

On May 19, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $50,000 for consideration consisting of $50,000 cash. The Note pays simple interest in the amount of 10% per annum . The maturity of the Note is May 19, 2020. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.0125 per common share as of the date which is the earlier of:

 

(i)   One day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of the Company or KCL Therapeutics. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions, whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.

 

(ii)   One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company tendering a fixed number of their equity securities (“Tender Offer”).

 

(iii)   One day subsequent to a “Transaction Event”)

 

Transaction Event” shall mean either of:

 

(a)   The sale by the Company or by KCL Therapeutics , Inc. of the Company’s proprietary NR2F6 intellectual property to an unaffiliated third party

 

(b)   The granting of a license by the Company or by KCL Therapeutics , Inc to an unaffiliated third party granting that unaffiliated third party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property

 

(iv)   That date which is twenty four (24) months subsequent to the date of execution of this Note.

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.0125 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company(“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note

 

As of June 30, 2018 $50,000 of the principal amount of the Note remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $166,667 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $50,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $30,109.

 

On June 26, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $150,000 for consideration consisting of $150,000 cash. The Note pays simple interest in the amount of 10% per annum . The maturity of the Note is June 16, 2020. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.025 per common share as of the date which is the earlier of:

 

(i)   One day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of the Company or KCL Therapeutics. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions, whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.

 

(ii)   One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company tendering a fixed number of their equity securities (“Tender Offer”).

 

(iii)   One day subsequent to a “Transaction Event”)

 

Transaction Event” shall mean either of:

 

(a)   The sale by the Company or by KCL Therapeutics , Inc. of the Company’s proprietary NR2F6 intellectual property to an unaffiliated third party

 

(b)   The granting of a license by the Company or by KCL Therapeutics , Inc to an unaffiliated third party granting that unaffiliated third party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property

 

(iv)   That date which is twenty four (24) months subsequent to the date of execution of this Note.

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.025 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company(“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note

 

As of June 30, 2018 $150,000 of the principal amount of the Note remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $500,000 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $150,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $99,171.

 

On June 28, 2016 the Company issued a Convertible Note (“Note”) in the face amount of $79,000 for consideration consisting of $75,000 cash. The Note bears a one time interest charge of 10% of the principal amount of $79,000 and is convertible into the Common Stock of the Company at a price per share equal to the lower of 60% of the lowest trade price in the 25 trading days prior to conversion or 0.0365 however conversions cannot be effected for a price less than $0.01 per common share except in the event of certain breaches of the Terms and Conditions of the Note by the Company. The Note matures 8 months from issuance. The issuance of the Note amounted in a discount of $79,000 which is amortized under the Interest Method over the life of the Note. The Company recognized an Original Issue Discount of $4,000 in connection with the issuance of the Note.On July 7, 2017 the Company issued 308,219 shares of common stock as an origination fee in connection with the issuance of this Note. The common stock, valued at $12,060, was recorded at a discount which is amortized over the life of the Note and was fully amortized as of the quarter ended December 31, 2017. During the quarter ended December 31, 2017 the Company issued 365,741 common shares as payment for interest on the Note and issued 3,611,111 common shares in conversion of $78,000 of principal indebtedness.

As of June 30, 2018 the unamortized discount on the convertible note outstanding is $0. As of June 30, 2018 $1,000 of the Note remains outstanding.

 

On July 24, 2017 the Company issued a Convertible Note (“Note”) in the face amount of $60,000 for consideration consisting of $60,000 cash. The Note bears simple interest at the rate of 10% per annum and is convertible into the Common Stock of the Company at a price per share equal to the lower of 75% of the lowest trade price of the date immediately prior to conversion or 0.025 per share. The Note matures July 24, 2020. The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

As of June 30, 2018 $60,000 of the principal amount of the Note remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $200,000 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $60,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $41,332

 

On August 23, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $85,000 for consideration consisting of $74,750 cash and payment on behalf of the Company of 10,250 of expenses incurred in connection with the issuance of the Note. The Note pays simple interest in the amount of 8% per annum. The maturity of the Note is August 23, 2018. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to 65% of the lowest Volume Weighted Average Price of the Common Stock of the Company as reported on the National Quotations Bureau OTC Markets exchange upon which the Company's shares are traded or any exchange upon which the Common Stock of the Company may be traded in the future , for the fourteen prior trading days including the day upon which a Notice of Conversion is received by the Company or its transfer agent. . In no event shall the Holder be allowed to effect a conversion if such conversion, along with all other shares of Company Common Stock beneficially owned by the Holder and its affiliates would exceed 9.9% of the outstanding shares of the Common Stock of the Company.

 

The Note may be prepaid with the following penalties:

 

Time Period   Payment Premium
<=60 days after note issuance   115% of the sum of principal  plus accrued interest
>60 days <= 120 days after note issuance   125% of the sum of principal  plus accrued interest
>120 days <=180 days  afternote·issuance   135% of the sum· of principal plus accrued· interest

 

This Note may not be- prepaid after the 180th day.

 

As of June 30, 2018 $85,000 of the principal amount of the Note remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $68,750 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $85,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $12,609.

 

On September 7, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $40,000 for consideration consisting of $38,000 cash and payment on behalf of the Company of $2,000 of expenses incurred in connection with the issuance of the Note. The Note pays simple interest in the amount of 8% per annum. The maturity of the Note is September 7, 2018. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to 65% of the lowest Trading Price of the Common Stock of the Company as reported on the National Quotations Bureau OTC Markets exchange upon which the Company's shares are traded or any exchange upon which the Common Stock of the Company may be traded in the future , for the twenty prior trading days including the day upon which a Notice of Conversion is received by the Company or its transfer agent. . In no event shall the Holder be allowed to effect a conversion if such conversion, along with all other shares of Company Common Stock beneficially owned by the Holder and its affiliates would exceed 9.9% of the outstanding shares of the Common Stock of the Company.

 

The Note may be prepaid with the following penalties:

 

Time Period   Payment Premium
<=60 days after note issuance   115% of the sum of principal  plus accrued interest
>60 days <= 120 days after note issuance   125% of the sum of principal  plus accrued interest
>120 days <=180 days  afternote·issuance   135% of the sum· of principal plus accrued· interest

 

This Note may not be prepaid after the 180th day.

 

As of June 30, 2018 $25,000 of the Note Remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $20,147 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $40,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $7,645.

 

On September 7, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $40,000 for consideration consisting of promissory Note payable to the Company in the amount of 40,000. The Note pays simple interest in the amount of 8% per annum. The maturity of the Note is September 7, 2018. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to 65% of the lowest Trading Price of the Common Stock of the Company as reported on the National Quotations Bureau OTC Markets exchange upon which the Company's shares are traded or any exchange upon which the Common Stock of the Company may be traded in the future , for the twenty prior trading days including the day upon which a Notice of Conversion is received by the Company or its transfer agent. . In no event shall the Holder be allowed to effect a conversion if such conversion, along with all other shares of Company Common Stock beneficially owned by the Holder and its affiliates would exceed 9.9% of the outstanding shares of the Common Stock of the Company.

 

As of June 30, 2018 $40,000 of the Note Remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $32,234 was recognized by the Company as of June 30 2018. The issuance of the Note amounted in a discount of $40,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $7645.

 

On September 7, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $40,000 for consideration consisting of $38,000 cash and payment on behalf of the Company of $2,000 of expenses incurred in connection with the issuance of the Note. The Note pays simple interest in the amount of 8% per annum. The maturity of the Note is September 7, 2018. The Note may be converted into shares of the Series A Preferred stock of Regen at a price per share ( “Conversion Price”) equivalent to 65% of the lowest Trading price of the Series A Preferred Stock of the Company as reported on the National Quotations Bureau OTC Markets exchange upon which the Company's shares are traded or any exchange upon which the Common Stock of the Company may be traded in the future , for the twenty prior trading days including the day upon which a Notice of Conversion is received by the Company or its transfer agent. . In no event shall the Holder be allowed to effect a conversion if such conversion, along with all other shares of Company Common Stock beneficially owned by the Holder and its affiliates would exceed 9.9% of the outstanding shares of the Common Stock of the Company.

 

The Note may be prepaid with the following penalties:

 

Time Period   Payment Premium
<=60 days after note issuance   115% of the sum of principal  plus accrued interest
>60 days <= 120 days after note issuance   125% of the sum of principal  plus accrued interest
>120 days <=180 days  afternote·issuance   135% of the sum· of principal plus accrued· interest

 

This Note may not be prepaid after the 180th day.

 

As of June 30, 2018 $33,000 of the Note Remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $106,615 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $40,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $7,671.

 

On August 29, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $25,000 for consideration consisting of $25,000 cash. The Note pays simple interest in the amount of 10% per annum. The maturity of the Note is August 29, 2020. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.025 per common share as of the date which is the earlier of:

 

(i)   One day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of the Company or KCL Therapeutics. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions, whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.

 

(ii)   One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company tendering a fixed number of their equity securities (“Tender Offer”).

 

(iii)   One day subsequent to a “Transaction Event”)

 

Transaction Event” shall mean either of:

 

(a)   The sale by the Company or by KCL Therapeutics , Inc. of the Company’s proprietary NR2F6 intellectual property to an unaffiliated third party

 

(b)   The granting of a license by the Company or by KCL Therapeutics , Inc to an unaffiliated third party granting that unaffiliated third party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property

 

(iv)   That date which is twenty four (24) months subsequent to the date of execution of this Note.

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.025 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company(“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note

 

As of June 30, 2018 $25,000 of the principal amount of the Note remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $83,333 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $25,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $18,042.

 

On September 22, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $50,000 for consideration consisting of $50,000 cash. The Note pays simple interest in the amount of 10% per annum. The maturity of the Note is September 21, 2020. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.0125 per common share as of the date which is the earlier of:

 

(i)   One day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of the Company or KCL Therapeutics. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions, whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.

 

(ii)   One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company tendering a fixed number of their equity securities (“Tender Offer”).

 

(iii)   One day subsequent to a “Transaction Event”)

Transaction Event” shall mean either of:

 

(a)   The sale by the Company or by KCL Therapeutics , Inc. of the Company’s proprietary NR2F6 intellectual property to an unaffiliated third party

 

(b)   The granting of a license by the Company or by KCL Therapeutics , Inc to an unaffiliated third party granting that unaffiliated third party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property

 

(iv)   That date which is twenty four (24) months subsequent to the date of execution of this Note.

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.025 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company (“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note

 

As of June 30, 2018 $50,000 of the principal amount of the Note remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $173,913 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $50,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $37,317

 

On September 22, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $100,000 for consideration consisting of $100,000 cash. The Note pays simple interest in the amount of 10% per annum. The maturity of the Note is September 22, 2020. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.025 per common share as of the date which is the earlier of:

 

(i)   One day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of the Company or KCL Therapeutics. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions, whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.

 

(ii)   One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company tendering a fixed number of their equity securities (“Tender Offer”).

 

(iii)   One day subsequent to a “Transaction Event”)

 

Transaction Event” shall mean either of:

 

(a)   The sale by the Company or by KCL Therapeutics , Inc. of the Company’s proprietary NR2F6 intellectual property to an unaffiliated third party

 

(b)   The granting of a license by the Company or by KCL Therapeutics , Inc to an unaffiliated third party granting that unaffiliated third party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property

 

(iv)   That date which is twenty four (24) months subsequent to the date of execution of this Note.

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.025 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company(“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note

 

As of June 30, 2018 $100,000 of the principal amount of the Note remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $350,877 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $100,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $74,361.

 

On September 25, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $50,000 for consideration consisting of $50,000 cash. The Note pays simple interest in the amount of 10% per annum. The maturity of the Note is September 25, 2020. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.0125 per common share as of the date which is the earlier of:

 

(i)   One day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of the Company or KCL Therapeutics. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions, whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.

 

(ii)   One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company tendering a fixed number of their equity securities (“Tender Offer”).

 

(iii)   One day subsequent to a “Transaction Event”)

 

Transaction Event” shall mean either of:

 

(a)   The sale by the Company or by KCL Therapeutics , Inc. of the Company’s proprietary NR2F6 intellectual property to an unaffiliated third party

 

(b)   The granting of a license by the Company or by KCL Therapeutics , Inc to an unaffiliated third party granting that unaffiliated third party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property

 

(iv)   That date which is twenty four (24) months subsequent to the date of execution of this Note.

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.025 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company (“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note

 

As of June 30, 2018 $50,000 of the principal amount of the Note remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $175,439 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $50,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $37,317.

 

On October 3, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $50,000 for consideration consisting of $50,000 cash. The Note pays simple interest in the amount of 10% per annum. The maturity of the Note is October 3, 2020. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.025 per common share as of the date which is the earlier of:

 

(i)   One day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of the Company or KCL Therapeutics. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions, whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.

 

(ii)   One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company tendering a fixed number of their equity securities (“Tender Offer”).

 

(iii)   One day subsequent to a “Transaction Event”)

 

Transaction Event” shall mean either of:

 

(a)   The sale by the Company or by KCL Therapeutics , Inc. of the Company’s proprietary NR2F6 intellectual property to an unaffiliated third party

 

(b)   The granting of a license by the Company or by KCL Therapeutics , Inc to an unaffiliated third party granting that unaffiliated third party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property

 

(iv)   That date which is twenty four (24) months subsequent to the date of execution of this Note.

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.025 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company (“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note

 

As of June 30 2018, 2017 $50,000 of the principal amount of the Note remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $173,913 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $50,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $37,819.

 

On October 4, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $40,000 for consideration consisting of $40,000 cash. The Note pays simple interest in the amount of 10% per annum. The maturity of the Note is October 4, 2020. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.025 per common share as of the date which is the earlier of:

 

(i)   One day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of the Company or KCL Therapeutics. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions, whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.

 

(ii)   One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company tendering a fixed number of their equity securities (“Tender Offer”).

 

(iii)   One day subsequent to a “Transaction Event”)

 

Transaction Event” shall mean either of:

 

(a)   The sale by the Company or by KCL Therapeutics , Inc. of the Company’s proprietary NR2F6 intellectual property to an unaffiliated third party

 

(b)   The granting of a license by the Company or by KCL Therapeutics , Inc to an unaffiliated third party granting that unaffiliated third party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property

 

(iv)   That date which is twenty four (24) months subsequent to the date of execution of this Note.

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.025 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company (“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note

 

As of June 30, 2018 $40,000 of the principal amount of the Note remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $139,130 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $40,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $30,291.

 

On October 16, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $100,000 for consideration consisting of $100,000 cash. The Note pays simple interest in the amount of 10% per annum. The maturity of the Note is October 9, 2020. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.025 per common share as of the date which is the earlier of:

 

(i)   One day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of the Company or KCL Therapeutics. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions, whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.

 

(ii)   One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company tendering a fixed number of their equity securities (“Tender Offer”).

 

(iii)   One day subsequent to a “Transaction Event”)

 

Transaction Event” shall mean either of:

 

(a)   The sale by the Company or by KCL Therapeutics , Inc. of the Company’s proprietary NR2F6 intellectual property to an unaffiliated third party

 

(b)   The granting of a license by the Company or by KCL Therapeutics , Inc to an unaffiliated third party granting that unaffiliated third party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property

 

(iv)   That date which is twenty four (24) months subsequent to the date of execution of this Note.

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.025 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company (“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note

 

As of June 30, 2018 $100,000 of the principal amount of the Note remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $347,826 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $100,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $76,186.

 

On November 1, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $25,000 for consideration consisting of $25,000 cash. The Note pays simple interest in the amount of 10% per annum. The maturity of the Note is November 1, 2020. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.025 per common share as of the date which is the earlier of:

 

(i)   One day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of the Company or KCL Therapeutics. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions, whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.

 

(ii)   One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company tendering a fixed number of their equity securities (“Tender Offer”).

 

(iii)   One day subsequent to a “Transaction Event”)

Transaction Event” shall mean either of:

 

(a)   The sale by the Company or by KCL Therapeutics , Inc. of the Company’s proprietary NR2F6 intellectual property to an unaffiliated third party

 

(b)   The granting of a license by the Company or by KCL Therapeutics , Inc to an unaffiliated third party granting that unaffiliated third party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property

 

(iv)   That date which is twenty four (24) months subsequent to the date of execution of this Note.

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.025 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company (“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note

 

As of June 30, 2018 $25,000 of the principal amount of the Note remains outstanding. 

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $86,957 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $25,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $19,571.

 

On November 1, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $25,000 for consideration consisting of $25,000 cash. The Note pays simple interest in the amount of 10% per annum. The maturity of the Note is November 1, 2020. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.025 per common share as of the date which is the earlier of:

 

(i)   One day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of the Company or KCL Therapeutics. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions, whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.

 

(ii)   One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company tendering a fixed number of their equity securities (“Tender Offer”).

 

(iii)   One day subsequent to a “Transaction Event”)

Transaction Event” shall mean either of:

 

(a)   The sale by the Company or by KCL Therapeutics , Inc. of the Company’s proprietary NR2F6 intellectual property to an unaffiliated third party

 

(b)   The granting of a license by the Company or by KCL Therapeutics , Inc to an unaffiliated third party granting that unaffiliated third party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property

 

(iv)   That date which is twenty four (24) months subsequent to the date of execution of this Note.

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.025 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company (“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note

 

As of June 30, 2018 $25,000 of the principal amount of the Note remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $86,957 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $25,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $19,571.

 

On October 9, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $100,000 for consideration consisting of $100,000 cash. The Note pays simple interest in the amount of 10% per annum. The maturity of the Note is October 9, 2020. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.025 per common share as of the date which is the earlier of:

 

(i)   One day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of the Company or KCL Therapeutics. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions, whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.

 

(ii)   One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company tendering a fixed number of their equity securities (“Tender Offer”).

 

(iii)   One day subsequent to a “Transaction Event”)

Transaction Event” shall mean either of:

 

(a)   The sale by the Company or by KCL Therapeutics , Inc. of the Company’s proprietary NR2F6 intellectual property to an unaffiliated third party

 

(b)   The granting of a license by the Company or by KCL Therapeutics , Inc to an unaffiliated third party granting that unaffiliated third party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property

 

(iv)   That date which is twenty four (24) months subsequent to the date of execution of this Note.

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.025 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company (“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note

 

As of June 30, 2018 $100,000 of the principal amount of the Note remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $347,826 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $100,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $76,186.

 

On December 15, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $35,000 for consideration consisting of $35,000 cash. The Note pays simple interest in the amount of 10% per annum. The maturity of the Note is December 15, 2020. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.025 per common share as of the date which is the earlier of:

 

(i)   One day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of the Company or KCL Therapeutics. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions, whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.

 

(ii)   One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company tendering a fixed number of their equity securities (“Tender Offer”).

 

(iii)   One day subsequent to a “Transaction Event”)

Transaction Event” shall mean either of:

 

(a)   The sale by the Company or by KCL Therapeutics , Inc. of the Company’s proprietary NR2F6 intellectual property to an unaffiliated third party

 

(b)   The granting of a license by the Company or by KCL Therapeutics , Inc to an unaffiliated third party granting that unaffiliated third party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property

 

(iv)   That date which is twenty four (24) months subsequent to the date of execution of this Note.

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.025 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company (“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note

 

As of June 30, 2018 $35,000 of the principal amount of the Note remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $127,826 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $35,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $28,804.

 

On December 20, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $100,000 for consideration consisting of $100,000 cash. The Note pays simple interest in the amount of 10% per annum. The maturity of the Note is December 20, 2020. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.025 per common share as of the date which is the earlier of:

 

(i)   One day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of the Company or KCL Therapeutics. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions, whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.

 

(ii)   One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company tendering a fixed number of their equity securities (“Tender Offer”).

 

(iv)   One day subsequent to a “Transaction Event”)

Transaction Event” shall mean either of:

 

(a)   The sale by the Company or by KCL Therapeutics , Inc. of the Company’s proprietary NR2F6 intellectual property to an unaffiliated third party

 

(b)   The granting of a license by the Company or by KCL Therapeutics , Inc to an unaffiliated third party granting that unaffiliated third party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property

 

(v)   That date which is twenty four (24) months subsequent to the date of execution of this Note.

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.025 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company (“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note

 

As of June 30, 2018 $100,000 of the principal amount of the Note remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $365,217 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $100,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $82,755.

 

On December 20, 2017 the Company issued a Convertible Note (“Note”) in the face amount of $115,000 for consideration consisting of $100,000 cash and payment on behalf of the Company of 13,250 of expenses incurred in connection with the issuance of the Note. The Note also carries an Original Issue Discount of $1,750.The Note pays simple interest in the amount of 8% per annum. The maturity of the Note is December 6, 2018. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to 65% of the lowest Trading Price of the Common Stock of the Company as reported on the National Quotations Bureau OTC Markets exchange upon which the Company's shares are traded or any exchange upon which the Common Stock of the Company may be traded in the future , for the fourteen prior trading days including the day upon which a Notice of Conversion is received by the Company or its transfer agent. In no event shall the Holder be allowed to effect a conversion if such conversion, along with all other shares of Company Common Stock beneficially owned by the Holder and its affiliates would exceed 9.9% of the outstanding shares of the Common Stock of the Company.

 

The Note may be prepaid with the following penalties:

 

Time Period   Payment Premium
<=60 days after note issuance   115% of the sum of principal  plus accrued interest
>60 days <= 120 days after note issuance   125% of the sum of principal  plus accrued interest
>120 days <=180 days  afternote·issuance   135% of the sum· of principal plus accrued· interest

 

This Note may not be prepaid after the 180th day.

 

As of June 30, 2018 $115,000 of the Note Remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $109,524 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $115,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $51,041.

 

On December 6, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $50,000 for consideration consisting of $50,000 cash. The Note pays simple interest in the amount of 10% per annum. The maturity of the Note is December 6, 2020. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.025 per common share as of the date which is the earlier of:

 

(i)   One day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of the Company or KCL Therapeutics. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions, whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.

 

(ii)   One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company tendering a fixed number of their equity securities (“Tender Offer”).

 

(iv)   One day subsequent to a “Transaction Event”)

 

Transaction Event” shall mean either of:

 

(a)   The sale by the Company or by KCL Therapeutics , Inc. of the Company’s proprietary NR2F6 intellectual property to an unaffiliated third party

 

(b)   The granting of a license by the Company or by KCL Therapeutics , Inc to an unaffiliated third party granting that unaffiliated third party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property

 

(v)   That date which is twenty four (24) months subsequent to the date of execution of this Note.

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.025 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company (“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note

 

As of June 30, 2018 $50,000 of the principal amount of the Note remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $182,609 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $50,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $40,739.

 

On January 24, 2018 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $25,000 for consideration consisting of $25,000 cash. The Note pays simple interest in the amount of 10% per annum. The maturity of the Note is December 6, 2020. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.025 per common share as of the date which is the earlier of:

 

(i)   One day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of the Company or KCL Therapeutics. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions, whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.

 

(ii)   One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company tendering a fixed number of their equity securities (“Tender Offer”).

 

(iv)   One day subsequent to a “Transaction Event”)

Transaction Event” shall mean either of:

 

(a)   The sale by the Company or by KCL Therapeutics , Inc. of the Company’s proprietary NR2F6 intellectual property to an unaffiliated third party

 

(b)   The granting of a license by the Company or by KCL Therapeutics , Inc to an unaffiliated third party granting that unaffiliated third party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property

 

(v)   That date which is twenty four (24) months subsequent to the date of execution of this Note.

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of $0.025 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary of the date that the Note shall have been prepaid by the Company (“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note

 

As of June 30, 2018 $25,000 of the principal amount of the Note remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $91,304 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $25,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $21,275.

 

On February 28, 2018 (“Issue date”) the Company issued a two Convertible Notes (“Notes”) in the aggregate face amount of $100,000 for consideration consisting of $100,000 cash. The Note pays simple interest in the amount of 10% per annum. The maturity of the Notes is February 28, 2021. The Notes may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.025 per common share as of the date which is the earlier of:

 

(i)   One day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of the Company or KCL Therapeutics. For purposes of these Notes, a Change of Control shall be defined as any transaction or series of transactions, whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.

 

(ii)   One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company tendering a fixed number of their equity securities (“Tender Offer”).

 

(iv)   One day subsequent to a “Transaction Event”)

 

Transaction Event” shall mean either of:

 

(a)   The sale by the Company or by KCL Therapeutics , Inc. of the Company’s proprietary NR2F6 intellectual property to an unaffiliated third party

 

(b)   The granting of a license by the Company or by KCL Therapeutics , Inc to an unaffiliated third party granting that unaffiliated third party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property

 

(v)   That date which is twenty four (24) months subsequent to the date of execution of this Note.

 

The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Notes in part or in full, including outstanding principal and accrued interest.

 

In the event that that the Company exercises its right to prepay the notes, or if the Lender chooses not to convert the remaining amount of the notes into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received had the Lender converted the remaining amount of the Notes into Common shares of the Company. The warrants shall have a strike price of $0.025 per share.

 

The warrants shall be exercisable:

 

In the event that the Company exercises its right to Prepay the Notes on or prior to the close of business on the three (3) month anniversary of the date that the Notes shall have been prepaid by the Company (“Prepayment Date”)

 

In the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity Date of the Notes, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Notes

 

As of June 30, 2018 $100,000 of the principal amount of the Notes remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $365,217 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $100,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $88,959.

On February 26, 2018 the Company issued a Convertible Note (“Note”)in the principal amount of $115,000 for net consideration of $100,000. The Company recognized an Original Issue Discount of $15,000 in connection with the Note. The Note bears simple interest of 12%.The Note matures on February 26, 2019.

 

The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to a 35% discount to the lowest trading price during the previous 14 trading days up to the conversion notice. The Note and accrued interest on the Note may be prepaid by the Company on or prior to the date which occurs 180 days after the issuance date at a cash redemption premium of 135%.

 

As of June 30, 2018 115,000 of the principal amount of the Notes remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $100,000 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $115,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $76,246.

 

On May 18, 2018 the Company issued a Convertible Note (“Note”)in the principal amount of $114,000 for net consideration of $100,000. The Company recognized an Original Issue Discount of $14,000 in connection with the Note. The Note bears simple interest of 10%.The Note matures on February 18, 2019.

 

The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to equal the lesser of (i) the lowest Trading Price during the previous twenty-five (25) Trading Day period ending on the latest complete Trading Day prior to the date of the Note and (ii) the Variable Conversion Price. “Variable Conversion Price” shall mean 50% multiplied by the Market Price (representing a discount rate of 50%). “Market Price” means the lowest Trading Price for the Common Stock during the twenty-five (25) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date.

 

(a)   At any time during the period beginning on the Issue Date and ending on the date which is ninety (90) days following the Issue Date, the Borrower shall have the right, exercisable on not less than three (3) Trading Days prior written notice to the Holder of the Note to prepay the outstanding Note (principal and accrued interest), in full by making a payment to the Holder of an amount in cash equal to 135%, multiplied by the sum of: (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note plus (y) Default Interest, if any.

 

(b)   At any time during the period beginning the day which is ninety one (91) days following the Issue Date and ending on the date which is one hundred eighty (180) days following the Issue Date, the Borrower shall have the right, exercisable on not less than three (3) Trading Days prior written notice to the Holder of the Note to prepay the outstanding Note (principal and accrued interest), in full by making a payment to the Holder of an amount in cash equal to 150%, multiplied by the sum of: (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note plus (y) Default Interest, if any.

 

(c)   After the expiration of one hundred eighty (180) days following the date of the Note, the Borrower shall have no right of prepayment.

As of June 30, 2018 114,000 of the principal amount of the Notes remains outstanding.

 

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

 

The Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $173,714 was recognized by the Company as of June 30, 2018. The issuance of the Note amounted in a discount of $114,000 which is amortized under the Interest Method over the life of the Note. As of June 30, 2018 the unamortized discount on the convertible note outstanding is $96,303.

XML 25 R12.htm IDEA: XBRL DOCUMENT v3.10.0.1
Notes Receivable
9 Months Ended
Jun. 30, 2018
Receivables [Abstract]  
Notes Receivable

NOTE 6. NOTES RECEIVABLE

 

    June 30, 2018
Entest Biomedical, Inc. (Note 8)   $ 4,551  

  

$4,551 lent by the Company to Entest Biomedical, Inc. is due and payable at the demand of the holder and bear simple interest at a rate of 10% per annum.

XML 26 R13.htm IDEA: XBRL DOCUMENT v3.10.0.1
Income Taxes
9 Months Ended
Jun. 30, 2018
Income Tax Disclosure [Abstract]  
Income Taxes

NOTE 7. INCOME TAXES

 

As of June 30, 2018

 

Deferred tax assets:      
Net operating tax carry forwards   $ 3,461,445
181Other     -0-
Gross deferred tax assets     3,461,445
Valuation allowance     (3,461,445)
Net deferred tax assets   $ -0-

 

As of June 30 2018 the Company has a Deferred Tax Asset of $3,461,445 completely attributable to net operating loss carry forwards of approximately $16,483,071 (which expire 20 years from the date the loss was incurred). 

 

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

 

Income tax is calculated at the 21% Federal Corporate Rate. 

XML 27 R14.htm IDEA: XBRL DOCUMENT v3.10.0.1
Related Party Transactions
9 Months Ended
Jun. 30, 2018
Related Party Transactions [Abstract]  
Related Party Transactions

NOTE 8. RELATED PARTY TRANSACTIONS

 

As of June 30, 2018 the Company has received capital contributions from Bio Matrix Scientific Group, Inc (“BMSN”) , a corporation under common control with the Company and which possesses the majority of the voting power of the shares outstanding of the company, totaling $728,658 and has issued 50,010,000 common shares to BMSN for aggregate consideration of $20,090.

 

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

 

As of June 30, 2018 Entest Biomedical Inc. is indebted to the Company in the amount of $4,551. $4,551 lent by the Company to Entest Biomedical, Inc. is due and payable at the demand of the holder and bear simple interest at a rate of 10% per annum.

 

On March 17, 2018 Harry Lander, the Company’s President, agreed to not elect to exchange any of Regen’s Series M Preferred Stock issued to Lander pursuant to the “AMENDMENT TO EMPLOYMENT AGREEMENT BY AND BETWEEN HARRY M. LANDER AND REGEN BIOPHARMA, INC. AND AGREEMENT TO RETURN SHARES OF STOCK DATED February 23, 2017” for any other class of Regen’s securities for a period of five years for consideration of $45,000.

 

As of June 30, 2018 the Company is indebted to David R. Koos in the amount of $227. $227 lent to the Company by Koos is due and payable at the demand of the holder and bear simple interest at a rate of 10% per annum.

 

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

 

Pursuant to the Agreement, Zander shall pay to The Company one-time, non-refundable, upfront payment of one hundred thousand US dollars ($100,000) as a license initiation fee which must be paid within 90 days of June 23, 2015 and an annual non-refundable payment of one hundred thousand US dollars ($100,000) on July 15th, 2016 and each subsequent anniversary of the effective date of the Agreement.

 

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

 

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

 

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

 

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

 

The Agreement may be terminated by The Company:

 

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

 

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

 

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

 

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

 

On September 28, 2015 Zander caused to be issued to the Company 8,000,000 of the common shares of Entest Biomedical, Inc in satisfaction of one hundred thousand US dollars ($100,000) to be paid to the Company by Zander as a license initiation fee. Regen Biopharma, Inc. recognized revenue of $192,000 equivalent to the fair value of 8,000,000 of the common shares of Entest Biomedical, Inc as of the date of issuance.

 

During the quarter ended September 30, 2016 Zander paid $17,000 to the Company as a partial payment of the July 15th, 2016 liability.

 

During the quarter ended June 30, 2017 Zander caused to be issued to the Company 83,000 shares of the nonvoting convertible preferred stock of Entest Biomedical, Inc. in satisfaction of 83,000 owed to the Company by Zander.On June 23, 2017 $7,000 of principal indebtedness and $147 of Accrued Interest Payable by the Company to Zander was applied toward the satisfaction of a minimum royalty payment owed by Zander to the Company pursuant to the Agreement.

 

During the quarter ended September 30, 2017 Zander caused to be issued to the Company 102,852 shares of the nonvoting convertible preferred stock of Entest Biomedical, Inc. in satisfaction of $102,852 owed to the Company by Zander.

 

During the quarter ended December 31, 2017 Zander prepaid $58,000 of minimum royalties which will become due pursuant to the Agreement.

 

During the quarter ended March 31, 2018 Zander prepaid $20,000 of minimum royalties which will become due pursuant to the Agreement.

 

On February 7, 2018 the Company and Zande agreed to a 10% reduction of Zander’s June 2018 Annual Anniversary Fee obligation if Zander pays such fee on or before February 10, 2018. $90,000 was paid by Zander in satisfaction of the June 2018 Annual Anniversary Fee during the quarter ended March 31, 2018

 

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

 

During the quarter ended June 30, 2018 $11,500 was advanced to the Company by Todd Caven , the Chief Financial Officer of the Company, in anticipation of the purchase by Caven of the securities of the Company. Todd Caven serves as Chief Financial Officer of the Company.

XML 28 R15.htm IDEA: XBRL DOCUMENT v3.10.0.1
Commitments and Contingencies
9 Months Ended
Jun. 30, 2018
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

NOTE 9. COMMITMENTS AND CONTINGENCIES

 

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

XML 29 R16.htm IDEA: XBRL DOCUMENT v3.10.0.1
Stockholders Equity
9 Months Ended
Jun. 30, 2018
Equity [Abstract]  
Stockholders Equity

NOTE 10. STOCKHOLDERS’ EQUITY

 

The stockholders’ equity section of the Company contains the following classes of capital stock as of June 30, 2018:

 

Common stock, $ 0.0001 par value; 500,000,000 shares authorized: 158,726,196 shares issued and outstanding.

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

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

Preferred Stock, $0.0001 par value, 800,000,000 shares authorized of which 600,000 is designated as Series AA Preferred Stock: 50,000 shares issued and outstanding as of June 30, 2018, 300,000,000 is designated Series A Preferred Stock of which 139,942,206 shares are outstanding as of June 30, 2018 and 300,000,000 is designated Series M Preferred Stock of which 38,000,000 shares are outstanding as of June 30, 2018. 

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

Series AA Preferred Stock

 

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

 

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

 

Series A Preferred Stock

 

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

The Board of Directors of the Company have authorized 300,000,000 shares of the Series A Preferred Stock, par value $0.0001. With respect to each matter submitted to a vote of stockholders of the Corporation, each holder of Series A Preferred Stock shall be entitled to cast that number of votes which is equivalent to the number of shares of Series A Preferred Stock owned by such holder times one . Except as otherwise required by law holders of Common Stock, other series of Preferred issued by the Corporation, and Series A Preferred Stock shall vote as a single class on all matters submitted to the stockholders.

Holders of the Series A Preferred Stock will be entitled to receive, when, as and if declared by the board of directors of the Company (the “Board”) out of funds legally available therefore, non-cumulative cash dividends of $0.01 per quarter. In the event any dividends are declared or paid or any other distribution is made on or with respect to the Common Stock , the holders of Series A Preferred Stock as of the record date established by the Board for such dividend or distribution on the Common Stock shall be entitled to receive, as additional dividends (the “Additional Dividends”) an amount (whether in the form of cash, securities or other property) equal to the amount (and in the form) of the dividends or distribution that such holder would have received had each share of the Series A Preferred Stock been one share of the Common Stock, such Additional Dividends to be payable on the same payment date as the payment date for the Common Stock.

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

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

On January 10, 2017 Regen Biopharma, Inc. (“Regen”) filed a CERTIFICATE OF DESIGNATION ("Certificate of Designations") with the Nevada Secretary of State setting forth the preferences rights and limitations of a newly authorized series of preferred stock designated and known as "Series M Preferred Stock" (hereinafter referred to as "Series M Preferred Stock").

The Board of Directors of Regen have authorized 300,000,000 shares of the Series M Preferred Stock, par value $0.0001. With respect to each matter submitted to a vote of stockholders of Regen, each holder of Series M Preferred Stock shall be entitled to cast that number of votes which is equivalent to the number of shares of Series M Preferred Stock owned by such holder times one. Except as otherwise required by law holders of Common Stock, other series of Preferred issued by Regen, and Series M Preferred Stock shall vote as a single class on all matters submitted to the stockholders.

The holders of Series M Preferred Stock shall be entitled receive dividends, when, as and if declared by the Board of Directors in accordance with Nevada Law, in its discretion, from funds legally available therefore

On any voluntary or involuntary liquidation, dissolution or winding up of Regen, the holders of the Series M Preferred Stock shall receive, out of assets legally available for distribution to Regen’s stockholders, a ratable share in the assets of Regen.

XML 30 R17.htm IDEA: XBRL DOCUMENT v3.10.0.1
Investment Securities
9 Months Ended
Jun. 30, 2018
Accounting Policies [Abstract]  
Investment Securities

11. INVESTMENT SECURITIES

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

On May 30, 2017 Zander Therapeutics Inc. caused to be issued to Regen Biopharma, Inc. 83,000 of the nonvoting convertible preferred shares of Entest Biomedical, Inc in satisfaction of eighty three thousand US dollars ($83,000) to be paid to Regen Biopharma, Inc. by Zander Theraputics, Inc as a license fee

 

On July 19, 2017 Zander Therapeutics Inc. caused to be issued to Regen Biopharma, Inc. 102852 of the nonvoting convertible preferred shares of Entest Biomedical, Inc in satisfaction of $102,852 to be paid to Regen Biopharma, Inc. by Zander Theraputics, Inc .

The abovementioned constitute the Company’s sole investment securities as of June 30, 2018.

As of June 30, 2018:

  8,000,000     Common Shares of Entest Biomedical, Inc.          
                             
  Basis       Fair Value       Total Unrealized Gains in Other Comprehensive Income         Net Unrealized Gain or (Loss) realized during the Quarter  ended June 30, 2018  
$ 192,000     $ $282,400       90,400       $(18,400

 

 

  185,852     Nonvoting Convertible Preferred Shares  of Entest Biomedical, Inc.          
                             
  Basis       Fair Value       Total Unrealized Gains in Other Comprehensive Income         Net Unrealized Gain or (Loss) realized during the quarter  ended June 30, 2018  
$ 185,852     $ $185,852       0       0  
XML 31 R18.htm IDEA: XBRL DOCUMENT v3.10.0.1
Stock Transactions
9 Months Ended
Jun. 30, 2018
Notes to Financial Statements  
Stock Transactions

NOTE 12. STOCK TRANSACTIONS

 

Issuance of Common Shares

 

On April 20, 2018 the Company issued 785,237 Common Shares (“Shares”) in satisfaction of $12,000 of convertible indebtedness and $760 of accrued interest due on convertible indebtedness.

 

On April 30, 2018 the Company issued 363,597 of its Common Shares (“Shares”) in satisfaction of $5,000 of convertible indebtedness and $199 of accrued interest due on convertible indebtedness.

 

On May 7, 2018 the Company issued 403,583 of its Common Shares (“Shares”) in satisfaction of $5,000 of convertible indebtedness and $246 of accrued interest due on convertible indebtedness.

 

On June 1, 2018 the Company issued 405,858 of its Common Shares (“Shares”) in satisfaction of $5,000 of convertible indebtedness and $276 of accrued interest due on convertible indebtedness.

 

On June 11, 2018 the Company issued 728,390 of its Common Shares (“Shares”) in satisfaction of $10,000 of convertible indebtedness and $117 of accrued interest due on convertible indebtedness.

 

On May 18, 2018 the Company issued 4712320 of its Common Shares (“Shares”) in satisfaction of $50,000 of convertible indebtedness and $8904 of accrued interest due on convertible indebtedness.

 

Issuance of Series A Preferred Shares

 

On April 10 2018 the Company issued 40,080 Series A Preferred Shares (“Shares”) in satisfaction of $1,000 of convertible indebtedness and $42 of accrued interest due on convertible indebtedness.

 

On May 18, 2018 the Company issued 108,004 Series A Preferred Shares (“Shares”) in satisfaction of $2,000 of convertible indebtedness and $106 of accrued interest due on convertible indebtedness.

 

On June 1, 2018 the Company issued 146,407 Series A Preferred Shares (“Shares”) in satisfaction of $2,000 of convertible indebtedness and $112 of accrued interest due on convertible indebtedness.

 

On June 13, 2018 the Company issued 181,018 Series A Preferred Shares (“Shares”) in satisfaction of $2,000 of convertible indebtedness and $117 of accrued interest due on convertible indebtednes

XML 32 R19.htm IDEA: XBRL DOCUMENT v3.10.0.1
Prior Period Adjustments
9 Months Ended
Jun. 30, 2018
Equity [Abstract]  
Prior Period Adjustments

NOTE 13. PRIOR PERIOD ADJUSTMENTS

 

The Company has adjusted Research and Development Expenses and Interest Expense for the Period ended December 31, 2016 in the following manner:

 

  (1) Research and Development Expenses recognized for the period ended December 31, 2016 has been reduced by $15,000

 

  (2) Interest Expense has been increased by $1,246

 

The aforementioned adjustments have resulted in a reduction in Net Loss for the period ended December 31, 2016 as originally reported of $13,754

 

The Company has adjusted Research and Development Expenses and Interest Expense for the Period ended March 31, 2017 in the following manner:

 

  (3) Research and Development Expenses recognized for the period ended March 31, 2017 has been reduced by $80,000

 

  (4) Interest Expense has been increased by $1,219

 

The aforementioned adjustments have resulted in a reduction in Net Loss for the period ended March 31, 2017 as originally reported of $78,781

 

The Company has adjusted Interest Expense for the Period ended June 30, 2017 in the following manner: Interest Expense has been increased by $1,232

 

The aforementioned adjustments have resulted in an increase in Net Loss for the period ended June 30, 2017 as originally reported of $1,232.

XML 33 R20.htm IDEA: XBRL DOCUMENT v3.10.0.1
Subsequent Events
9 Months Ended
Jun. 30, 2018
Subsequent Events [Abstract]  
Subsequent Events

NOTE 14. SUBSEQUENT EVENTS

 

On July 11, 2018 the Company issues 451,629 common shares in consideration of $5,000of convertible indebtedness and 313 of accrued interest on convertible indebtedness.

 

On July 11, 2018 the Company issued a a Convertible Note (“Note”) in the face amount of $11,500 to the Company’s Chief Financial Officer for consideration consisting of $11,500 cash. The Note pays simple interest in the amount of 10% per annum . The maturity of the Note is May 4, 2021.

 

The Note is convertible into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.01 per common share as of the date which is the earlier of:

 

(i)   One day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of the Company. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions, whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.

 

(ii)   One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company tendering a fixed number of their equity securities (“Tender Offer”).

 

(iii)   That date which is twenty four (24) months subsequent to the date of execution of this Note.
XML 34 R21.htm IDEA: XBRL DOCUMENT v3.10.0.1
Organization and Summary of Significant Accounting Policies (Policies)
9 Months Ended
Jun. 30, 2018
Accounting Policies [Abstract]  
BASIS OF ACCOUNTING

A. BASIS OF ACCOUNTING

 

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

PRINCIPLES OF CONSOLIDATION

B. PRINCIPLES OF CONSOLIDATION

 

The consolidated financial statements include the accounts of KCL, Therapeutics, Inc., a Nevada corporation and wholly owned subsidiary of Regen. Significant inter-company transactions have been eliminated

USE OF ESTIMATES

C. 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.

CASH EQUIVALENTS

D. CASH EQUIVALENTS

 

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

PROPERTY AND EQUIPMENT

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.

FAIR VALUE OF FINANCIAL INSTRUMENTS

F. FAIR VALUE OF FINANCIAL INSTRUMENTS

 

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

 

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

 

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

 

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

DERIVATIVE LIABILITIES

G. DERIVATIVE LIABILITIES.

 

The Company evaluates its convertible debt, options, warrants or other contracts, if any, to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with ASC 815 of the FASB Accounting Standards Codification. The result of this accounting treatment is that the fair value of the embedded derivative is marked-to-market each balance sheet date and recorded as either an asset or a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the consolidated statement of operations.

 

The Company analyzes the conversion feature of Convertible Notes for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging. ASC 815-15 requires that the conversion features are bifurcated and separately accounted for as an embedded derivative contained in the Company’s convertible debt. The embedded derivative is carried on the balance sheet at fair value. Any unrealized change in fair value, as determined at each measurement period, is recorded as a component of the income statement and the associated carrying amount on the balance sheet is adjusted by the change. The Company values the embedded derivative using the Black-Scholes pricing model

 

The Black Scoles pricing model used to determine the Derivative Liability on convertible notes issued by the Company in which an embedded derivative is recognized as of June 30, 2018 utilized the following inputs:

 

Risk Free Interest Rate   1.31 -1.62%
Expected Term   0.15-2.34 Yrs
Expected Volatility   154-197%
Expected Dividends   0
INCOME TAXES

H. INCOME TAXES

 

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

 

The Company applied the provisions of ASC 740-10-50, “Accounting For Uncertainty In Income Taxes”, which provides clarification related to the process associated with accounting for uncertain tax positions recognized in our financial statements. Audit periods remain open for review until the statute of limitations has passed. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the Company’s liability for income taxes. Any such adjustment could be material to the Company’s results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period. As of June 30, 2018 the Company had no uncertain tax positions, and will continue to evaluate for uncertain positions in the future.

 

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

 

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

BASIC EARNINGS (LOSS) PER SHARE

I.  BASIC EARNINGS (LOSS) PER SHARE

 

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

 

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

ADVERTISING

J. ADVERTISING

 

Costs associated with advertising are charged to expense as incurred. Advertising expenses were $0 for the quarter ended June 30, 2018 .

NOTES RECEIVABLE

K. NOTES RECEIVABLE

 

Notes receivable are stated at cost, less impairment, if any.

REVENUE RECOGNITION

L. REVENUE RECOGNITION

 

 Sales of products and related costs of products sold are recognized when: (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred; (iii) the price is fixed or determinable; and (iv) collectability is reasonably assured. These terms are typically met upon the prepayment or invoicing and shipment of products.

 

The Company determines the amount and timing of royalty revenue based on its contractual agreements with intellectual property licensees. The Company recognizes royalty revenue when earned under the terms of the agreements and when the Company considers realization of payment to be probable. Where royalties are based on a percentage of licensee sales of royalty-bearing products, the Company recognizes royalty revenue by applying this percentage to the Company’s estimate of applicable licensee sales. The Company bases this estimate on an analysis of each licensee’s sales results. Where warranted, revenue from licensees for contractual obligations such as License Initiation Fees are recognized upon satisfaction of all conditions required to be satisfied in order for that revenue to have been earned by the Company.

INTEREST RECEIVABLE

M. INTEREST RECEIVABLE

 

Interest receivable is stated at cost, less impairment, if any.

XML 35 R22.htm IDEA: XBRL DOCUMENT v3.10.0.1
Organization and Summary of Significant Accounting Policies (Tables)
9 Months Ended
Jun. 30, 2018
Accounting Policies [Abstract]  
Schedule of Derivative Liability
Risk Free Interest Rate   1.31 -1.62%
Expected Term   0.15-2.34 Yrs
Expected Volatility   154-197%
Expected Dividends   0
XML 36 R23.htm IDEA: XBRL DOCUMENT v3.10.0.1
Notes Payable (Tables)
9 Months Ended
Jun. 30, 2018
Debt Disclosure [Abstract]  
Notes Payable
    June 30, 2018
David Koos ( Note 8)     227  
Bostonia Partners     3,000  
Notes payable   $ 3,227  
XML 37 R24.htm IDEA: XBRL DOCUMENT v3.10.0.1
Notes Receivable (Tables)
9 Months Ended
Jun. 30, 2018
Receivables [Abstract]  
Notes Receivable
    June 30, 2018
Entest Biomedical, Inc. (Note 8)   $ 4,551  
XML 38 R25.htm IDEA: XBRL DOCUMENT v3.10.0.1
Income Taxes (Tables)
9 Months Ended
Jun. 30, 2018
Income Tax Disclosure [Abstract]  
Deferred tax assets
Deferred tax assets:      
Net operating tax carry forwards   $ 3,461,445
181Other     -0-
Gross deferred tax assets     3,461,445
Valuation allowance     (3,461,445)
Net deferred tax assets   $ -0-
XML 39 R26.htm IDEA: XBRL DOCUMENT v3.10.0.1
Investment Securities (Tables)
9 Months Ended
Jun. 30, 2018
Accounting Policies [Abstract]  
Comprehensive Income
  8,000,000     Common Shares of Entest Biomedical, Inc.          
                             
  Basis       Fair Value       Total Unrealized Gains in Other Comprehensive Income         Net Unrealized Gain or (Loss) realized during the Quarter  ended June 30, 2018  
$ 192,000     $ $282,400       90,400       $(18,400

 

 

  185,852     Nonvoting Convertible Preferred Shares  of Entest Biomedical, Inc.          
                             
  Basis       Fair Value       Total Unrealized Gains in Other Comprehensive Income         Net Unrealized Gain or (Loss) realized during the quarter  ended June 30, 2018  
XML 40 R27.htm IDEA: XBRL DOCUMENT v3.10.0.1
Organization and Summary of Significant Accounting Policies (Details Narrative)
9 Months Ended
Jun. 30, 2018
USD ($)
Accounting Policies [Abstract]  
Advertising expenses $ 0
Valuation allowance 100.00%
XML 41 R28.htm IDEA: XBRL DOCUMENT v3.10.0.1
Going Concern (Details Narrative) - USD ($)
3 Months Ended 71 Months Ended
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2017
Jun. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]        
Net loss since inception       $ (16,483,071)
Sale of equity securities   $ 50,000    
Issuance of convertible debt $ 138,000 $ 225,000 $ 625,000  
XML 42 R29.htm IDEA: XBRL DOCUMENT v3.10.0.1
Notes Payable and Convertible Notes Payable - Notes Payable (Details)
Jun. 30, 2018
USD ($)
Notes Payable $ 3,227
David Koos  
Notes Payable 227
Bostonia Partners  
Notes Payable $ 3,000
XML 43 R30.htm IDEA: XBRL DOCUMENT v3.10.0.1
Notes Payable (Details Narrative)
9 Months Ended
Jun. 30, 2018
USD ($)
David Koos  
Note payable $ 227
Interest rate per annum 15.00%
Bostonia Partners  
Note payable $ 3,000
Interest rate per annum 10.00%
Maturity Date May 10, 2017
Entest Biomedical, Inc  
Interest rate per annum 10.00%
XML 44 R31.htm IDEA: XBRL DOCUMENT v3.10.0.1
Convertible Notes Payable (Details Narrative)
9 Months Ended
Jun. 30, 2018
USD ($)
Convertible Note; December 22, 2016  
Convertible note issued and outstanding $ 40,000
Convertible note, interest rate 10.00%
Unamortized discount $ 0
Outstanding balance 40,000
Convertible Note; March 8, 2016  
Convertible note issued and outstanding $ 100,000
Convertible note, interest rate 8.00%
Maturity Date Mar. 08, 2019
Beneficial conversion feature $ 42,600
Unamortized discount 9,845
Converted value that exceeds the principal amount 0
Outstanding balance 100,000
Convertible Note; April 6, 2016  
Convertible note issued and outstanding $ 50,000
Convertible note, interest rate 8.00%
Maturity Date Apr. 06, 2019
Beneficial conversion feature $ 9,900
Unamortized discount 2,557
Converted value that exceeds the principal amount 0
Outstanding balance 50,000
Convertible Note; September 8, 2016  
Convertible note issued and outstanding $ 50,000
Convertible note, interest rate 10.00%
Maturity Date Sep. 08, 2017
Beneficial conversion feature $ 50,000
Unamortized discount 0
Outstanding balance 50,000
Converted value that exceeds the principal if converted into common stock 42,000
Converted value that exceeds the principal if converted into Series A Preferred Stock 62,000
Convertible Note; September 20, 2016  
Convertible note issued and outstanding $ 50,000
Convertible note, interest rate 10.00%
Maturity Date Sep. 20, 2017
Beneficial conversion feature $ 50,000
Unamortized discount 0
Outstanding balance 50,000
Converted value that exceeds the principal if converted into common stock 42,000
Converted value that exceeds the principal if converted into Series A Preferred Stock 62,000
Convertible Note; October 7, 2016  
Convertible note issued and outstanding $ 50,000
Convertible note, interest rate 10.00%
Maturity Date Oct. 07, 2018
Beneficial conversion feature $ 50,000
Unamortized discount 7,191
Outstanding balance 50,000
Converted value that exceeds the principal if converted into common stock 42,000
Converted value that exceeds the principal if converted into Series A Preferred Stock 62,000
Convertible Note; October 31, 2016  
Convertible note issued and outstanding $ 50,000
Convertible note, interest rate 10.00%
Maturity Date Oct. 31, 2018
Beneficial conversion feature $ 50,000
Unamortized discount 8,835
Outstanding balance 50,000
Converted value that exceeds the principal if converted into common stock 42,000
Converted value that exceeds the principal if converted into Series A Preferred Stock 62,000
Convertible Note #2; October 31, 2016  
Convertible note issued and outstanding $ 50,000
Convertible note, interest rate 10.00%
Maturity Date Oct. 31, 2018
Beneficial conversion feature $ 50,000
Unamortized discount 8,835
Outstanding balance 50,000
Converted value that exceeds the principal if converted into common stock 42,000
Converted value that exceeds the principal if converted into Series A Preferred Stock 62,000
Convertible Note #3; October 31, 2016  
Convertible note issued and outstanding $ 50,000
Convertible note, interest rate 10.00%
Maturity Date Oct. 31, 2018
Beneficial conversion feature $ 50,000
Unamortized discount 8,835
Outstanding balance 50,000
Converted value that exceeds the principal if converted into common stock 42,000
Converted value that exceeds the principal if converted into Series A Preferred Stock $ 62,000
Convertible Note; December 22, 2016  
Maturity Date Dec. 22, 2017
Beneficial conversion feature $ 40,000
Converted value that exceeds the principal if converted into common stock 52,000
Converted value that exceeds the principal if converted into Series A Preferred Stock 72,000
Convertible Note; March 1, 2017  
Convertible note issued and outstanding $ 75,000
Convertible note, interest rate 10.00%
Maturity Date Mar. 01, 2020
Unamortized discount $ 42,153
Outstanding balance 75,000
Derivative Liability 260,869
Convertible Note; March 9, 2017  
Convertible note issued and outstanding $ 25,000
Convertible note, interest rate 10.00%
Maturity Date Mar. 09, 2020
Unamortized discount $ 14,233
Outstanding balance 25,000
Derivative Liability 83,333
Convertible Note; March 13, 2017  
Convertible note issued and outstanding $ 50,000
Convertible note, interest rate 10.00%
Maturity Date Feb. 24, 2020
Unamortized discount $ 29,470
Outstanding balance 50,000
Derivative Liability 166,667
Convertible Note: March 31, 2017  
Convertible note issued and outstanding $ 50,000
Convertible note, interest rate 10.00%
Maturity Date Mar. 31, 2020
Unamortized discount $ 30,109
Outstanding balance 50,000
Derivative Liability 166,667
Convertible Note; April 19, 2017  
Convertible note issued and outstanding $ 25,000
Convertible note, interest rate 10.00%
Maturity Date Apr. 19, 2020
Unamortized discount $ 15,054
Outstanding balance 25,000
Derivative Liability 83,333
Convertible Note #2; April 19, 2017  
Convertible note issued and outstanding $ 50,000
Convertible note, interest rate 10.00%
Maturity Date Apr. 19, 2020
Unamortized discount $ 30,109
Outstanding balance 50,000
Derivative Liability 166,667
Convertible Note; May 5, 2017  
Convertible note issued and outstanding $ 200,000
Convertible note, interest rate 10.00%
Maturity Date May 05, 2020
Unamortized discount $ 123,357
Outstanding balance 200,000
Derivative Liability 666,667
Convertible Note; May 10, 2017  
Convertible note issued and outstanding $ 100,000
Convertible note, interest rate 10.00%
Maturity Date May 09, 2020
Unamortized discount $ 60,082
Outstanding balance 100,000
Derivative Liability 333,333
Convertible Note; May 19, 2017  
Convertible note issued and outstanding $ 50,000
Convertible note, interest rate 10.00%
Maturity Date May 19, 2020
Unamortized discount $ 30,109
Outstanding balance 50,000
Derivative Liability 166,667
Convertible Note; June 26, 2017  
Convertible note issued and outstanding $ 150,000
Convertible note, interest rate 10.00%
Maturity Date Jun. 16, 2020
Unamortized discount $ 99,171
Outstanding balance 150,000
Derivative Liability 500,000
Convertible Note; June 28, 2016  
Convertible note issued and outstanding $ 79,000
Convertible note, interest rate 10.00%
Unamortized discount $ 0
Outstanding balance 1,000
Original Issue Discount 4,000
Convertible Note; July 24, 2017  
Convertible note issued and outstanding $ 60,000
Convertible note, interest rate 10.00%
Maturity Date Jul. 24, 2020
Unamortized discount $ 41,332
Outstanding balance 60,000
Derivative Liability 200,000
Convertible Note; August 23, 2017  
Convertible note issued and outstanding $ 85,000
Convertible note, interest rate 8.00%
Maturity Date Aug. 23, 2018
Unamortized discount $ 12,609
Outstanding balance 85,000
Derivative Liability 68,750
Cash issued for convertible note 74,750
Convertible Note; September 7, 2017  
Convertible note issued and outstanding $ 40,000
Convertible note, interest rate 8.00%
Maturity Date Sep. 07, 2018
Unamortized discount $ 7,645
Outstanding balance 25,000
Derivative Liability 20,147
Cash issued for convertible note 38,000
Convertible Note; #2 September 7, 2017  
Convertible note issued and outstanding $ 40,000
Convertible note, interest rate 8.00%
Maturity Date Sep. 07, 2018
Unamortized discount $ 7,645
Outstanding balance 40,000
Derivative Liability 32,234
Cash issued for convertible note 38,000
Convertible Note; #3 September 7, 2017  
Convertible note issued and outstanding $ 40,000
Convertible note, interest rate 8.00%
Maturity Date Sep. 07, 2018
Unamortized discount $ 7,671
Outstanding balance 33,000
Derivative Liability 106,615
Cash issued for convertible note 38,000
Convertible Note; August 29, 2017  
Convertible note issued and outstanding $ 25,000
Convertible note, interest rate 10.00%
Maturity Date Aug. 29, 2020
Unamortized discount $ 18,042
Outstanding balance 25,000
Derivative Liability 83,333
Convertible Note; September 22, 2017  
Convertible note issued and outstanding $ 50,000
Convertible note, interest rate 10.00%
Maturity Date Sep. 21, 2020
Unamortized discount $ 37,317
Outstanding balance 50,000
Derivative Liability 173,913
Convertible Note; #2 September 22, 2017  
Convertible note issued and outstanding $ 100,000
Convertible note, interest rate 10.00%
Maturity Date Sep. 22, 2020
Unamortized discount $ 74,361
Outstanding balance 350,877
Derivative Liability 344,828
Cash issued for convertible note 100,000
Convertible Note; September 25, 2017  
Convertible note issued and outstanding $ 50,000
Convertible note, interest rate 10.00%
Maturity Date Sep. 25, 2020
Unamortized discount $ 37,317
Outstanding balance 50,000
Derivative Liability 175,439
Cash issued for convertible note 50,000
Convertible Note; October 3, 2017  
Convertible note issued and outstanding $ 50,000
Convertible note, interest rate 10.00%
Maturity Date Oct. 03, 2020
Unamortized discount $ 37,819
Outstanding balance 50,000
Derivative Liability 173,913
Convertible Note; October 4, 2017  
Convertible note issued and outstanding $ 40,000
Convertible note, interest rate 10.00%
Maturity Date Oct. 04, 2020
Unamortized discount $ 30,291
Outstanding balance 40,000
Derivative Liability 139,130
Convertible Note; October 16, 2017  
Convertible note issued and outstanding $ 100,000
Convertible note, interest rate 10.00%
Maturity Date Oct. 09, 2020
Unamortized discount $ 76,186
Outstanding balance 100,000
Derivative Liability 347,826
Convertible Note; November 01, 2017  
Convertible note issued and outstanding $ 25,000
Convertible note, interest rate 10.00%
Maturity Date Nov. 01, 2020
Unamortized discount $ 19,571
Outstanding balance 25,000
Derivative Liability 86,957
Convertible Note; #2 November 1, 2017  
Convertible note issued and outstanding $ 25,000
Convertible note, interest rate 10.00%
Maturity Date Nov. 01, 2020
Unamortized discount $ 19,571
Outstanding balance 25,000
Derivative Liability 86,957
Convertible Note; October 9, 2017  
Convertible note issued and outstanding $ 100,000
Convertible note, interest rate 10.00%
Maturity Date Oct. 09, 2020
Unamortized discount $ 76,186
Outstanding balance 100,000
Derivative Liability 347,826
Convertible Note; December 15, 2017  
Convertible note issued and outstanding $ 35,000
Convertible note, interest rate 10.00%
Maturity Date Dec. 15, 2020
Unamortized discount $ 28,804
Outstanding balance 35,000
Derivative Liability 127,826
Convertible Note; December 20, 2017  
Convertible note issued and outstanding $ 100,000
Convertible note, interest rate 10.00%
Maturity Date Dec. 20, 2020
Unamortized discount $ 365,714
Outstanding balance 100,000
Derivative Liability 82,755
Convertible Note #2; December 20, 2017  
Convertible note issued and outstanding $ 115,000
Convertible note, interest rate 8.00%
Maturity Date Dec. 06, 2018
Unamortized discount $ 51,041
Outstanding balance 115,000
Derivative Liability 109,524
Cash issued for convertible note 100,000
Original Issue Discount 1,750
Convertible Note; December 06, 2017  
Convertible note issued and outstanding $ 50,000
Convertible note, interest rate 10.00%
Maturity Date Nov. 06, 2020
Unamortized discount $ 40,739
Outstanding balance 50,000
Derivative Liability 182,609
Cash issued for convertible note 50,000
Convertible Note; January 24, 2018  
Convertible note issued and outstanding $ 25,000
Convertible note, interest rate 10.00%
Maturity Date Dec. 06, 2020
Unamortized discount $ 21,275
Outstanding balance 25,000
Derivative Liability 91,304
Cash issued for convertible note 25,000
Convertible Note; February 28, 2018  
Convertible note issued and outstanding $ 100,000
Convertible note, interest rate 10.00%
Maturity Date Feb. 28, 2021
Unamortized discount $ 88,959
Outstanding balance 100,000
Derivative Liability 365,217
Cash issued for convertible note 100,000
Convertible Note; February 26, 2018  
Convertible note issued and outstanding $ 115,000
Convertible note, interest rate 12.00%
Maturity Date Feb. 26, 2019
Unamortized discount $ 76,246
Outstanding balance 115,000
Derivative Liability 100,000
Cash issued for convertible note 100,000
Original Issue Discount 15,000
Convertible Note; May 18, 2018  
Convertible note issued and outstanding $ 114,000
Convertible note, interest rate 10.00%
Maturity Date Feb. 18, 2019
Unamortized discount $ 96,303
Outstanding balance 114,000
Derivative Liability 173,714
Cash issued for convertible note 100,000
Original Issue Discount $ 14,000
XML 45 R32.htm IDEA: XBRL DOCUMENT v3.10.0.1
Notes Receivable - Notes Receivable (Details)
Jun. 30, 2018
USD ($)
Entest Biomedical, Inc  
Notes Receivable $ 4,551
XML 46 R33.htm IDEA: XBRL DOCUMENT v3.10.0.1
Notes Receivable (Details Narrative) - Entest Biomedical, Inc
9 Months Ended
Jun. 30, 2018
USD ($)
Promissory Note $ 4,551
Interest rate per annum 10.00%
XML 47 R34.htm IDEA: XBRL DOCUMENT v3.10.0.1
Income Taxes - Deferred tax assets (Details)
Jun. 30, 2018
USD ($)
Deferred tax assets:  
Net operating tax carry forwards $ 3,461,445
Other 0
Gross deferred tax assets 3,461,445
Valuation allowance (3,461,445)
Net deferred tax assets $ 0
XML 48 R35.htm IDEA: XBRL DOCUMENT v3.10.0.1
Income Taxes (Details Narrative)
9 Months Ended
Jun. 30, 2018
USD ($)
Income Tax Disclosure [Abstract]  
Deferred Tax Asset $ 3,461,445
Net operating loss carry forwards $ 16,483,071
Federal corporate rate 21.00%
XML 49 R36.htm IDEA: XBRL DOCUMENT v3.10.0.1
Related Party Transactions (Details Narrative) - USD ($)
3 Months Ended 9 Months Ended
Jun. 30, 2018
Sep. 30, 2017
Jun. 30, 2017
Sep. 30, 2016
Sep. 28, 2015
Jun. 30, 2018
Mar. 31, 2018
Mar. 17, 2018
Jun. 23, 2017
Capital contributions from related party           $ 728,658      
Common shares issued to BMSN           50,010,000      
Value of shares issued to BMSN           $ 20,090      
Monthly rent payable to Entest           5,000      
Notes Receivable $ 4,551         4,551      
Notes Payable, Total amount 3,227         3,227      
License fee         $ 100,000        
Royalties receivable, percentage         4.00%        
Royalties, receivable         $ 10,000        
Common shares issued in satisfaction of license fee         8,000,000        
Common shares value in issuance of license initiaion fee         $ 100,000        
Revenue recognized equivalent to fair value of common shares         192,000        
Partial payment       $ 17,000          
Nonvoting convertible preferred stock of Entest Biomedical, Inc issued   102,852 83,000            
Debt applied to royalty payment                 $ 7,147
Receivable from Zander 20,000 $ 17,000       20,000 $ 58,000    
Anniversery Fee         $ 100,000 $ 90,000      
Todd Caven                  
Advance From Related Party 11,500                
Harry M. Lander                  
Consideration               $ 45,000  
Entest Biomedical, Inc                  
Interest rate per annum           10.00%      
David Koos                  
Interest rate per annum           15.00%      
Notes Payable, Total amount 227         $ 227      
Note payable 227         227      
Blackbriar Partners                  
Notes Payable, Total amount 46,840         46,840      
Note payable $ 274         $ 274      
XML 50 R37.htm IDEA: XBRL DOCUMENT v3.10.0.1
Commitments and Contingencies (Details Narrative)
9 Months Ended
Jun. 30, 2018
USD ($)
Commitments and Contingencies Disclosure [Abstract]  
Monthly rent payable to Entest $ 5,000
XML 51 R38.htm IDEA: XBRL DOCUMENT v3.10.0.1
Stockholders Equity (Details Narrative) - $ / shares
9 Months Ended
Jun. 30, 2018
Sep. 30, 2017
Common stock, Par value $ 0.0001 $ 0.0001
Common stock, authorized 500,000,000 500,000,000
Common stock issued and outstanding 158,726,196 139,704,157
Preferred stock, par value $ 0.0001 $ 0.0001
Preferred stock, authorized 800,000,000 100,000,000
Series A    
Preferred stock, non-cumulative cash dividends $ 0.01  
Preferred shares voting

Series A Preferred Stock

 

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

The Board of Directors of the Company have authorized 300,000,000 shares of the Series A Preferred Stock, par value $0.0001. With respect to each matter submitted to a vote of stockholders of the Corporation, each holder of Series A Preferred Stock shall be entitled to cast that number of votes which is equivalent to the number of shares of Series A Preferred Stock owned by such holder times one . Except as otherwise required by law holders of Common Stock, other series of Preferred issued by the Corporation, and Series A Preferred Stock shall vote as a single class on all matters submitted to the stockholders.

Holders of the Series A Preferred Stock will be entitled to receive, when, as and if declared by the board of directors of the Company (the “Board”) out of funds legally available therefore, non-cumulative cash dividends of $0.01 per quarter. In the event any dividends are declared or paid or any other distribution is made on or with respect to the Common Stock , the holders of Series A Preferred Stock as of the record date established by the Board for such dividend or distribution on the Common Stock shall be entitled to receive, as additional dividends (the “Additional Dividends”) an amount (whether in the form of cash, securities or other property) equal to the amount (and in the form) of the dividends or distribution that such holder would have received had each share of the Series A Preferred Stock been one share of the Common Stock, such Additional Dividends to be payable on the same payment date as the payment date for the Common Stock.

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

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

 
Series AA Preferred Stock    
Preferred stock, par value $ 0.0001 $ 0.0001
Preferred stock, authorized 600,000 600,000
Preferred stock, shares issued and outstanding 50,000 50,000
Preferred stock, shares outstanding 50,000 50,000
Preferred shares voting

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

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

 
Series M    
Preferred stock, par value $ 0.0001 $ 0.0001
Preferred stock, authorized 300,000,000 300,000,000
Preferred stock, shares issued and outstanding 38,000,000 32,000,000
Preferred stock, shares outstanding 38,000,000 32,000,000
Preferred shares voting

On January 10, 2017 Regen Biopharma, Inc. (“Regen”) filed a CERTIFICATE OF DESIGNATION ("Certificate of Designations") with the Nevada Secretary of State setting forth the preferences rights and limitations of a newly authorized series of preferred stock designated and known as "Series M Preferred Stock" (hereinafter referred to as "Series M Preferred Stock").

The Board of Directors of Regen have authorized 300,000,000 shares of the Series M Preferred Stock, par value $0.0001. With respect to each matter submitted to a vote of stockholders of Regen, each holder of Series M Preferred Stock shall be entitled to cast that number of votes which is equivalent to the number of shares of Series M Preferred Stock owned by such holder times one. Except as otherwise required by law holders of Common Stock, other series of Preferred issued by Regen, and Series M Preferred Stock shall vote as a single class on all matters submitted to the stockholders.

The holders of Series M Preferred Stock shall be entitled receive dividends, when, as and if declared by the Board of Directors in accordance with Nevada Law, in its discretion, from funds legally available therefore

On any voluntary or involuntary liquidation, dissolution or winding up of Regen, the holders of the Series M Preferred Stock shall receive, out of assets legally available for distribution to Regen’s stockholders, a ratable share in the assets of Regen.

 
Series A Preferred Stock    
Preferred stock, par value $ 0.0001 $ 0.0001
Preferred stock, authorized 300,000,000 300,000,000
Preferred stock, shares issued and outstanding 139,942,206 136,966,617
Preferred stock, shares outstanding 139,942,206 136,966,617
XML 52 R39.htm IDEA: XBRL DOCUMENT v3.10.0.1
Investment Securities (Details) - USD ($)
9 Months Ended
Jun. 30, 2018
Sep. 30, 2017
Investment Securities, Fair Value $ 468,252 $ 465,852
Common Stock    
Investment Securities, Basis 192,000  
Investment Securities, Fair Value 282,400  
Investment Securities, Total Unrealized Losses 90,400  
Investment Securities, Net Unrealized Loss during the quarter (18,400)  
Nonvoting Convertible Preferred Stock    
Investment Securities, Basis 185,852  
Investment Securities, Fair Value 185,852  
Investment Securities, Total Unrealized Losses 0  
Investment Securities, Net Unrealized Loss during the quarter $ 0  
XML 53 R40.htm IDEA: XBRL DOCUMENT v3.10.0.1
Investment Securities (Details Narrative) - USD ($)
9 Months Ended
Jun. 30, 2018
Jul. 19, 2017
May 30, 2017
Sep. 28, 2015
Common shares of Entest Biomedical, Inc 8,000,000      
Nonvoting Convertible Preferred Stock        
Stock issued in satisfaction of debt, shares   102,852 83,000  
Stock issued in satisfaction of debt, value   $ 102,852 $ 83,000  
Common Stock        
Stock issued as license fee, shares       8,000,000
Stock issued as license fee, value       $ 100,000
XML 54 R41.htm IDEA: XBRL DOCUMENT v3.10.0.1
Stock Transactions (Details Narrative) - Convertible Debt - USD ($)
6 Months Ended 7 Months Ended 8 Months Ended
Apr. 10, 2018
May 07, 2018
Apr. 30, 2018
Apr. 20, 2018
Jun. 13, 2018
Jun. 11, 2018
Jun. 01, 2018
May 18, 2018
Common Stock                
Shares issued in satisfaction of convertible identedness   403,583   785,237   728,390 405,858 4,712,320
Value of shares issued in satisdaction of convertible debt   $ 5,000   $ 12,000   $ 10,000 $ 5,000 $ 50,000
Accrued Interest   $ 246   $ 760   $ 117 $ 276 $ 8,904
Series A Preferred Stock                
Shares issued in satisfaction of convertible identedness 40,080       181,018   146,407 108,004
Value of shares issued in satisdaction of convertible debt $ 1,000       $ 2,000   $ 2,000 $ 2,000
Accrued Interest $ 42       $ 117   $ 112 $ 106
Common Stock                
Shares issued in satisfaction of convertible identedness     363,597          
Value of shares issued in satisdaction of convertible debt     $ 5,000          
Accrued Interest     $ 199          
XML 55 R42.htm IDEA: XBRL DOCUMENT v3.10.0.1
Prior Period Adjustments (Details Narrative) - USD ($)
3 Months Ended 6 Months Ended 9 Months Ended
Dec. 31, 2016
Mar. 31, 2017
Jun. 30, 2017
Equity [Abstract]      
Reduction in Research and Development Expenses $ 15,000 $ 80,000  
Increase in interest expense 1,246 1,219 $ 1,232
Reduction in Net Loss $ 13,754 $ 78,781 $ 1,232
XML 56 R43.htm IDEA: XBRL DOCUMENT v3.10.0.1
Subsequent Events (Details Narrative) - USD ($)
7 Months Ended 8 Months Ended
Jul. 11, 2018
May 07, 2018
Apr. 20, 2018
Jun. 11, 2018
Jun. 01, 2018
May 18, 2018
Jun. 30, 2018
Sep. 30, 2017
Cash             $ 55,404 $ 269,973
Convertible Debt | Common Stock                
Shares issued in satisfaction of convertible identedness   403,583 785,237 728,390 405,858 4,712,320    
Value of shares issued in satisdaction of convertible debt   $ 5,000 $ 12,000 $ 10,000 $ 5,000 $ 50,000    
Accrued Interest   $ 246 $ 760 $ 117 $ 276 $ 8,904    
Subsequent Event [Member] | Convertible Debt | Chief Financial Officer [Member]                
Convertible debt face amount $ 11,500              
Cash $ 11,500              
Interest rate 10.00%              
Maturity Date May 04, 2021              
Subsequent Event [Member] | Convertible Debt | Common Stock                
Shares issued in satisfaction of convertible identedness 451,629              
Value of shares issued in satisdaction of convertible debt $ 5,000              
Accrued Interest $ 313              
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