10-K
Post# of 5066
Amended Annual Report (10-k/a) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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| UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-K/A Amendment No 3. ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Year Ended September 30, 2012 File Number: 0-32201 BIO-MATRIX SCIENTIFIC GROUP, INC. (Exact name of registrant as specified in its charter)
(619) 702-1404 (Registrants telephone number, including area code) Securities registered pursuant to Section 12(b) of the Exchange Act:
Securities registered under Section 12(g) of the Act: Common Stock, Par Value $.0001 (Title of Class) Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ? No ? Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ? No ? Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 12 months, (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ? No ? Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in the definitive proxy or information statement incorporated by reference in Part III of this Form 10-K or amendment to Form 10-K. ? Indicate by check mark whether the registrant is a large accelerated filer, and accelerated filer, a non-accelerated filer, or a small reporting company. See definitions of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check One):
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). 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 ? As of March 31, 2012, the aggregate market value of the issued and outstanding common stock held by non-affiliates of the registrant, based upon the closing price of the common stock, under the symbol “BMSN” as quoted on the OTC market of $0.095., was approximately $564,979. For purposes of the statement in the preceding statement, all directors, executive officers and 10% shareholders are assumed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for any other purpose. Number of shares outstanding of each of the issuer's class of common stock as of June 13, 2013: Common: 1,998,299,049 In this annual report, the terms “Bio-Matrix Scientific Group Inc.”, “Company”, “us”, “we”, or “our”, unless the context otherwise requires, mean Bio-Matrix Scientific Group, Inc., a Delaware corporation, and its subsidiaries. This annual report on Form 10-K and other reports that we file with the SEC contain statements that are considered forward-looking statements. Forward-looking statements give the Company’s current expectations, plans, objectives, assumptions or forecasts of future events. All statements other than statements of current or historical fact contained in this annual report, including statements regarding the Company’s future financial position, business strategy , budgets, projected costs and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “estimate,” “plans,” “potential,” “projects,” “ongoing,” “expects,” “management believes,” “we believe,” “we intend,” and similar expressions. These statements are based on the Company’s current plans and are subject to risks and uncertainties, and as such the Company’s actual future activities and results of operations may be materially different from those set forth in the forward looking statements. Any or all of the forward-looking statements in this annual report may turn out to be inaccurate and as such, you should not place undue reliance on these forward-looking statements. The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its financial condition, results of operations , business strategy and financial needs. The forward-looking statements can be affected by inaccurate assumptions or by known or unknown risks, uncertainties and assumptions due to a number of factors, including:
These forward-looking statements speak only as of the date on which they are made, and except to the extent required by federal securities laws, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements contained in this annual report. EXPLANATORY NOTE:
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. As of September 30, 2012 we had cash of $75,752 and as of September 30, 2011 we had cash of $331. The increase in cash of approximately 22,786% is primarily attributable to increased net borrowings by the Company of approximately $316,812 offset by expenses paid attributable to the operation of the Company. As of September 30, 2012 we had Prepaid Expenses of $15,000 and as of September 30, 2011 we had Prepaid Expenses of $39,925.. The decrease in Prepaid Expenses of approximately 62% is primarily attributable to: The incurrence by the Company of expenses related to the derecognition of $39,925 of Prepaid Expenses. The payment by the Company of $15,000 to employees of the Company as an advance against work to be performed outside the current contractual scope of their employment. As of September 30, 2012 we had Deferred Financing Costs of $65,000 and as of September 30, 2011 we had Deferred Financing Costs of $0. The increase in Deferred Financing Costs are primarily attributable to the issuance of 5,000,000 Common Shares to the order of Capital Path Securities in consideration for services rendered as Placement Agent in connection with the April 26, 2012 Equity Purchase Agreement and Registration Rights Agreement (the Company executed with Southridge Partners II, LP. As if September 30,2012 we had an Investment in Subsidiary of $0 and as of September 30, 2011 we had an Investment in Subsidiary of $41,735,443. The reduction in Investment in Subsidiary is primarily attributable to: (a) Decrease in Investment In Subsidiary resulting from recognition of $399,082 of Equity in Net Loss of the subsidiary during the nine months ended June 30, 2012 (b) Reclassification of Investment In Subsidiary as Available for Sale Securities as a result of Company’s ownership of the subsidiary falling to below 20% during the three months ended June 30, 2012. As if September 30,2012 we had Available for Sale Securities of $22,000 and as of September 30, 2011 we had Available for Sale Securities of $0. The increase in Available for Sale Securities is primarily attributable to reclassification of Investment In Subsidiary as Available for Sale Securities as a result of Company’s ownership of the subsidiary falling to below 20% during the three months ended June 30, 2012 offset by subsequent remeasurement based on unrealized loss. As of September 30, 2012 we had Property and Equipment (Net of Accumulated Depreciation) of $0 and as of September 30, 2011 we had Property and Equipment (Net of Accumulated Depreciation) of $20,789. The decrease in Property and Equipment (Net of Accumulated Depreciation) of100% is attributable to the abandonment by the Company of Computer Equipment and Office Equipment during the quarter ended September 30, 2012. As of September 30, 2012 we had Notes Payable of $817,020 and as of September 30, 2011 we had Notes Payable of $169,575. The increase in Notes Payable of approximately 382% is primarily attributable to: (a) Reclassification of $700,000 of Accrued Salaries as Notes Payable due to transfer of all rights to and interest in the Accrued Salaries to a nonrelated third party. (b) Additional Borrowings of $199,571 Offset by: (a) Repayments of $36,032 (b) Reclassification of $396,479 of Notes Payable to Convertible Notes Payable As of September 30, 2012 we had Accrued Payroll of $307,692 and as of September 30, 2011 we had Accrued Payroll of $627,000 The decrease in Accrued Payroll of approximately 51% is primarily attributable to: (a) Reclassification of $700,000 of Accrued Salaries as Notes Payable due to transfer of all rights to and interest in the Accrued Salaries to a nonrelated third party offset by (b) Accrual of $83,871 in salaries payable to employees of Regen (c) Accrual of $296,281 in salaries payable to the Company’s CEO As of September 30, 2012 we had Accrued Payroll Taxes of $27,769 and as of September 30, 2011 we had Accrued Payroll Taxes of $23,780 The increase in Accrued Payroll Taxes of approximately 17% is primarily attributable to employer tax obligations incurred but not yet paid arising from vesting of Restricted Stock Awards. As of September 30, 2012 we had Accrued Interest of $210,069 and as of September 20, 2011 we had Accrued Interest of $154,930. The increase in Accrued Interest of approximately 36% is primarily attributable to the incurring by the Company of $55,139 in interest expense during the year ended September 30, 2012 accrued but unpaid. As of September 30, 2012 we had Amounts due to Affiliate of $39,140 and as of September 30, 2011 we had Amounts due to Affiliate of $59,500. The decrease in Amounts Due to Affiliate (Entest BioMedical, Inc.) of approximately 34% is primarily attributable to: (a) Payments by the Company to Entest BioMedical, Inc. of $20,600 during the year ended September 30, 2012 offset by (b) Payments made during the year ended September 30, 2012 by Entest BioMedical, Inc on behalf of the Company of $240. Material Changes in Results of Operations: Revenues were $0 for the twelve months ended September 30, 2012 and the same period ended September 30, 2011. Net Losses were $1,752,809 for the year ended September 30, 2012. Net Income was $40,289,686 for the same period ended September 30, 2011. The decrease was primarily attributable to a noncash gain of $41,645,688 resulting from the deconsolidation of Entest BioMedical, Inc. recognized by the Company during the year ended September 30, 2012. Other material factors contributing to the decrease include: (a) A 235% increase in consulting expenses incurred by the Company during the year ended September 30, 2012 when compared to the year ended September 30, 2011 which was primarily attributable to $75,000 in non voting convertible preferred stock issued to Southridge Partners II, LP in accordance with the terms and conditions of that Equity Purchase Agreement (the "Purchase Agreement") entered into by and between the Company and Southridge Partners II, LP as well as an increase in legal fees incurred by the Company resulting from litigation. (b) $41,688 recognized by the Company resulting from a loss on the early extinguishment of $77,500 of convertible debt during the twelve months ended September 30, 2012. (c) $374,388 of interest expense recognized resulting from amortization of discounts recognized on convertible debentures issued during the twelve months ended September 30, 2012. (d) $20,789 loss recognized resulting from abandonment of Office and Computer equipment during the twelve months ended September 30, 2012 (e) $66,372 in expenses incurred by the Company during the twelve months ended September 30, 2012 resulting from stock issued pursuant to contractual obligations with convertible debt holders. As of September 30, 2012 we had $75,752 Cash on Hand and current liabilities of $1,841,238 (exclusive of convertible debt discount attributable to a beneficial conversion feature). 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 twelve months ended September 30, 2012 we satisfied our cash requirements primarily through the issuance of Convertible Notes for cash, borrowings pursuant to lines of credit provided to the Company by Bio-Technology Partners Business Trust and Venture Bridge Advisors (collectively the “LOC Notes”) and borrowings from David Koos. Funds lent to the Company pursuant to the LOC Notes may be disbursed to, or for the benefit of, the Company by Lender in Lender's sole and absolute discretion and principal and any accrued but unpaid interest are due and payable at the demand of the Lender. As there is no contractual obligation binding the Lender to disperse any minimum amount and any and as all disbursements are at the Lender’s discretion the company can give no assurance that funding pursuant to the LOC Notes will be made available to the Company in the future. There can also be no assurance given by the Company that funds will continue to be lent to the Company by David Koos Management plans to raise additional funds by offering securities for cash. On April 26, 2012 the Company executed an Equity Purchase Agreement (the "Purchase Agreement") and Registration Rights Agreement (the "Rights Agreement") with Southridge Partners II, LP, and a Delaware limited partnership ("Southridge"). Under the terms of the Purchase Agreement, Southridge will purchase, at the Company's election, up to $20,000,000 of the Company's registered common stock (the "Shares"). During the term of the Purchase Agreement, the Company may at any time deliver a "put notice" to Southridge thereby requiring Southridge to purchase a certain dollar amount of the Shares. Simultaneous with the delivery of such Shares, Southridge shall deliver payment for the Shares. Subject to certain restrictions, the purchase price for the Shares shall be equal to 91% of the Market Price, as such capitalized term is defined in the Purchase Agreement, on such date on which the Purchase Price is calculated in accordance with the terms and conditions of this Agreement. Market Price, as such term is defined in the Purchase Agreement, means the lowest Closing Price, as such term is defined in the Purchase Agreement, during the Valuation Period, as such term is defined in the Purchase Agreement. Closing Price is defined in the Purchase Agreement as the closing bid price for the Company’s common stock on the principal market over which the Company’s common shares trade on a day on which that principal market is open for business as reported by Bloomberg Finance L.P. Valuation Period , as such term is defined in the Purchase Agreement, means the period of 5 Trading Days immediately following the Clearing Date, as such term is defined in the Purchase Agreement, associated with the applicable Put Notice during which the Purchase Price of the Shares is valued. Clearing Date, as such term is defined in the Purchase Agreement, means the date in which the Estimated Put Shares (as defined in Section 2.2(a) of the Purchase Agreement) have been deposited into Southridge’s brokerage account and Southridge’s broker has confirmed with Southridge that Southridge may execute trades of such Estimated Put Shares. The definition of Estimated Put Shares in Section 2.2(a) of the Purchase Agreement is that number of Shares equal to the dollar amount indicated in the Put Notice divided by the Closing Price on the Trading Day immediately preceding the Put Date, multiplied by 125%. Pursuant to the Purchase Agreement, on a Put Date the Company will be required to the applicable number of Estimated Put Shares to Southridge’s brokerage account. At the end of the Valuation Period the Purchase Price shall be established and the number of Shares shall be determined for a particular Put. If the number of Estimated Put Shares initially delivered to Southridge is greater than the Put Shares purchased by Southridge pursuant to such Put, then immediately after the Valuation Period Southridge shall deliver to Company any excess Estimated Put Shares associated with such Put. If the number of Estimated Put Shares delivered to Investor is less than the Shares purchased by Southridge pursuant to a Put, then immediately after the Valuation Period the Company shall deliver to Southridge the difference between the Estimated Put Shares and the Shares issuable pursuant to such Put. The number of Shares sold to Southridge shall not exceed the number of such shares that, when aggregated with all other shares of common stock of the Company then beneficially owned by Southridge, would result in Southridge owning more than 9.99% of all of the Company's common stock then outstanding. Additionally, Southridge may not execute any short sales of the Company's common stock. The Purchase Agreement shall terminate (i) on the date on which Southridge shall have purchased Shares pursuant to this Agreement for an aggregate Purchase Price of $20,000,000, or (ii) on the date occurring 24 months from the date on which the Agreement was executed and delivered by the Company and Southridge. Under the terms of the Rights Agreement, the Company agreed to file a registration statement with the Securities and Exchange Commission within 90 days of the date on which the Purchase Agreement was executed and delivered by the Company and Southridge. The registration statement shall be filed with respect to not less than the maximum allowable number of Shares issuable pursuant to a put notice to Southridge that has been exercised or may be exercised in accordance with the terms and conditions of the Purchase Agreement permissible under Rule 415, promulgated under the Securities Act of 1933. The Company is obligated to keep such registration statement effective until (i) three months after the last closing of a sale of Shares under the Purchase Agreement, (ii) the date when Southridge may sell all the Shares under Rule 144 without volume limitations, or (iii) the date Southridge no longer owns any of the Shares. The Purchase Agreement requires the Company to reserve and keep available until the consummation of such Closing, free of preemptive rights sufficient shares of common stock for the purpose of enabling the Company to satisfy its obligation to issue the Shares. The Purchase Agreement also required the Company to issue to Southridge shares of a newly designated preferred stock with a stated value of $50,000 convertible at the option of Southridge into shares of the Company’s common stock at a conversion price equal to seventy percent (70%) of the lowest Closing Price for the five (5) trading days immediately preceding a conversion notice. The Preferred Stock has no registration rights. There is no guarantee that we will be able to raise any capital through any type of offerings.. We cannot assure that we will be successful in obtaining additional financing necessary to implement our business plan. We have not received any commitment or expression of interest from any financing source that has given us any assurance that we will obtain the amount of additional financing in the future that we currently anticipate. For these and other reasons, we are not able to assure that we will obtain any additional financing or, if we are successful, that we can obtain any such financing on terms that may be reasonable in light of our current circumstances. In the event that we are unable to raise additional capital there is risk that the Company may not be able to continue as a going concern. Other than what is disclosed in this document, The Company is unaware of any trends, demands or uncertainties that will result in the Company’s liquidity increasing or decreasing in any material way. As of June 13, 2013 we are not party to any binding agreements which would commit us to any material capital expenditures. Item 8. Financial Statements and Supplementary Data SEALE AND BEERS, CPAs PCAOB & CPAB REGISTERED AUDITORS www.sealebeers.com REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
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