Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jun. 30, 2016 | Aug. 19, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | Regenicin, Inc. | |
Entity Central Index Key | 1,412,659 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
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 | 153,483,050 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,016 |
CONSOLIDATED BALANCE SHEET
CONSOLIDATED BALANCE SHEET - USD ($) | Jun. 30, 2016 | Sep. 30, 2015 |
CURRENT ASSETS | ||
Cash | $ 343,428 | $ 1,061,377 |
Prepaid expenses and other current assets | 47,429 | 119,236 |
Common stock of Amrantus Corporation | 12,750 | 300,000 |
Total current assets | 403,607 | 1,480,613 |
Due from related party | 64,622 | |
Total assets | 468,229 | 1,480,613 |
CURRENT LIABILITIES | ||
Accounts payable | 338,648 | 360,228 |
Accrued expenses other | 549,424 | 484,635 |
Accrued salaries officers | 990,751 | 801,751 |
Dividends payable preferred stock | 375,191 | 322,042 |
Bridge financing | 175,000 | 175,000 |
Loan payable | 10,000 | 10,000 |
Loans payable officers | 37,297 | 95,000 |
Total current and total liabilities | 2,476,311 | 2,248,656 |
STOCKHOLDERS DEFICIENCY | ||
Series A 10% Convertible Preferred stock, $0.001 par value, 5,500,000 shares authorized; 885,000 issued and outstanding | 885 | 885 |
Common stock, $0.001 par value; 200,000,000 shares authorized; 157,911,410 issued and 153,483,050 outstanding | 157,914 | 157,914 |
Additional paid-in capital | 9,802,324 | 9,787,578 |
Accumulated deficit | (11,677,527) | (10,709,992) |
Accumulated other comprehensive loss | (287,250) | |
Less: treasury stock; 4,428,360 shares at par | (4,428) | (4,428) |
Total stockholders deficiency | (2,008,082) | (768,043) |
Total liabilities and stockholders deficiency | $ 468,229 | $ 1,480,613 |
CONSOLIDATED BALANCE SHEET (Par
CONSOLIDATED BALANCE SHEET (Parenthetical) - $ / shares | Jun. 30, 2016 | Sep. 30, 2015 |
Statement of Financial Position [Abstract] | ||
Series A Preferred Stock, Par Value | $ 0.001 | $ 0.001 |
Series A Preferred Stock, Shares Authorized | 5,500,000 | 5,500,000 |
Series A Preferred Stock, Issued and outstanding | 885,000 | 885,000 |
Common Stock, Par Value | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 |
Common Stock, Issued | 157,911,410 | 157,911,410 |
Common Stock, Outstanding | 153,483,050 | 153,483,050 |
Treasury Stock, Issued | 4,428,360 | 4,428,360 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income Statement [Abstract] | ||||
Revenues | ||||
Operating expenses | ||||
Research and development | 1,445 | 33,400 | ||
General and administrative | 305,470 | 438,502 | 885,058 | 845,319 |
Stock based compensation - general and administrative | 67,895 | 32,365 | ||
Total operating expenses | 305,470 | 438,502 | 954,398 | 911,084 |
Operating loss before other operating income | (305,470) | (438,502) | (954,398) | (911,084) |
Other operating income | ||||
Reversal of accounts payable - Lonza | 973,374 | |||
Income (loss) from operations | (305,470) | (438,502) | (954,398) | (911,084) |
Other income (expenses) | ||||
Interest expense, including amortization of debt discounts | (4,363) | (18,407) | (13,137) | (58,408) |
Gain on sale of assets | 6,604,431 | |||
Loss on derivative liabilities | (528,230) | |||
Total other income (expenses) | (4,363) | (18,407) | (13,137) | 6,017,793 |
Income (loss) before income tax | (309,833) | (456,909) | (967,535) | 6,080,083 |
Income tax expense | 2,829,000 | |||
Net income (loss) | (309,833) | (456,909) | (967,535) | 3,251,083 |
Preferred stock dividends | (17,652) | (17,652) | (53,149) | (52,955) |
Net income (loss) attributable to common stockholders | $ (327,485) | $ (474,561) | $ (1,020,684) | $ 3,198,128 |
Income (loss) per share Basic | $ 0 | $ 0 | $ (0.01) | $ 0.02 |
Income (loss) per share Diluted | $ 0 | $ 0 | $ (0.01) | $ 0.02 |
Weighted average number of shares outstanding Basic | 153,483,050 | 153,483,049 | 153,483,050 | 153,188,645 |
Weighted average number of shares outstanding Diluted | 153,483,050 | 153,483,049 | 153,483,050 | 162,038,645 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Consolidated Statements Of Comprehensive Income Loss | ||||
Net income (loss) | $ (309,833) | $ (456,909) | $ (967,535) | $ 3,251,083 |
Other Comprehensive income (loss) | ||||
Changes in unrealized gains (loss) on available for sale securities, net of income taxes | (900) | 62,500 | (287,250) | (1,437,500) |
Comprehensive income (loss) | $ (310,733) | $ (394,409) | $ (1,254,785) | $ 1,813,583 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income (loss) | $ (967,535) | $ 3,251,083 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Deferred income taxes | 2,829,000 | |
Amortization of debt discounts | 7,675 | |
Stock based compensation - G&A | 67,895 | 32,365 |
Loss on derivative liabilities | 528,230 | |
Gain on sale of assets | (6,604,431) | |
Reversal of accounts payable | (973,374) | |
Expenses paid directly by officer | 95,000 | |
Changes in operating assets and liabilities | ||
Prepaid expenses and other current assets | 71,807 | (36,746) |
Accounts payable | (21,580) | (361,059) |
Accrued expenses other | 51,652 | (8,353) |
Accrued salaries officers | 189,000 | (379,087) |
Accrued interest on notes and loans payable | 13,137 | (7,114) |
Net cash used in operating activities | (595,624) | (1,626,811) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Proceeds from sale of assets | 3,600,000 | |
Advances to related party | (64,622) | |
Purchase of intangible asset | (10,000) | |
Net cash (used in) provided by financing activities | (64,622) | 3,590,000 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Repayments of notes payable | (275,000) | |
Proceeds from loans from officers | 15,500 | 23,330 |
Repayments of loans from officers | (73,203) | (229,147) |
Repayments of notes payable - insurance financing | (51,613) | |
Net cash used in financing activities | (64,622) | 3,590,000 |
NET (DECREASE) INCREASE IN CASH | (717,949) | 1,430,759 |
CASH - BEGINNING OF PERIOD | 1,061,377 | 492 |
CASH - END OF PERIOD | 343,428 | 1,431,251 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 13,447 | |
Cash paid for taxes | ||
Non-cash activities: | ||
Sale of assets | 6,600,000 | |
Common Stock of Amarantus received | (3,000,000) | |
Cash received | 3,600,000 | |
Preferred stock dividends | 53,149 | 52,955 |
Shares issued/to be issued in connection with conversion of debt and accrued interest | 11,091 | |
Derivative liabilities reclassified to additional paid-in capital | $ 533,394 |
THE COMPANY
THE COMPANY | 9 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
THE COMPANY | Windstar, Inc. was incorporated in the state of Nevada on September 6, 2007. On July 19, 2010, the Company amended its Articles of Incorporation to change the name of the Company to Regenicin, Inc. (Regenicin). In September 2013, Regenicin formed a new wholly-owned subsidiary for the sole purpose of conducting research in the State of Georgia (together, the Company). The subsidiary has no activity since its formation due to the lack of funding. The Companys original business was the development of a purification device. Such business was assigned to the Companys former management in July 2010. The Company adopted a new business plan and intended to develop and commercialize a potentially lifesaving technology by the introduction of tissue-engineered skin substitutes to restore the qualities of healthy human skin for use in the treatment of burns, chronic wounds and a variety of plastic surgery procedures. The Company entered into a Know-How License and Stock Purchase Agreement (the Know-How SPA) with Lonza Walkersville, Inc. (Lonza Walkersville) on July 21, 2010. Pursuant to the terms of the Know-How SPA, the Company paid Lonza Walkersville $3,000,000 and, in exchange, the Company was to receive an exclusive license to use certain proprietary know-how and information necessary to develop and seek approval by the U.S. Food and Drug Administration (FDA) for the commercial sale of technology held by the Cutanogen Corporation (Cutanogen), a subsidiary of Lonza Walkersville. Additionally, pursuant to the terms of the Know-How SPA, the Company was entitled to receive certain related assistance and support from Lonza Walkersville upon payment of the $3,000,000. Under the Know-How SPA, once FDA approval was secured for the commercial sale of the technology, the Company would be entitled to acquire Cutanogen, Lonza Walkersvilles subsidiary, for $2,000,000 in cash. After prolonged attempts to negotiate disputes with Lonza Walkersville failed, on September 30, 2013, the Company filed a lawsuit against Lonza Walkersville, Lonza Group Ltd. and Lonza America, Inc. (Lonza America) in Fulton County Superior Court in the State of Georgia. On November 7, 2014, the Company entered into an Asset Sale Agreement (the Sale Agreement) with Amarantus Bioscience Holdings, Inc., (Amarantus). Under the Sale Agreement, the Company agreed to sell to Amarantus all of its rights and claims in the litigation currently pending in the United States District Court for the District of New Jersey against Lonza Walkersville and Lonza America, Inc. (the Lonza Litigation). This includes all of the Cutanogen intellectual property rights and any Lonza manufacturing know-how technology. In addition, the Company agreed to sell the PermaDerm® trademark and related intellectual property rights associated with it. The purchase price paid by Amarantus was: (i) $3,600,000 in cash, and (ii) shares of common stock in Amarantus having a value of $3,000,000 at the sale date. See Note 4 for a further discussion. The Company is using the net proceeds of the transaction to fund development of cultured cell technology and to pursue approval of the products through the FDA. The Company has been developing its own unique cultured skin substitute since receiving Lonzas termination notice. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | Interim Financial Statements: T he accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and note disclosures required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine months ended June 30, 2016 are not necessarily indicative of the results that may be expected for the year ending September 30, 2016. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended September 30, 2015, as filed with the Securities and Exchange Commission. Going Concern: The Company's consolidated financial statements have been prepared assuming that the Company will continue as a going concern which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has incurred cumulative losses and has an accumulated deficit of approximately $11.7 million from inception, expects to incur further losses in the development of its business and has been dependent on funding operations through the issuance of convertible debt and private sale of equity securities. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The Company is using the proceeds from the Asset Sale to fund operations. Once the funds are exhausted, management plans to finance operations through the private or public placement of debt and/or equity securities. However, no assurance can be given at this time as to whether the Company will be able to obtain such financing. The consolidated financial statements do not include any adjustment relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Financial Instruments and Fair Value Measurement: Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable or inputs that can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Unobservable inputs which are supported by little or no market activity. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The carrying value of cash, prepaid expenses and other current assets, accounts payable, accrued expenses and all loans and notes payable in the Companys consolidated balance sheets approximated their values as of and June 30, 2016 and September 30, 2015 due to their short-term nature. Common stock of Amarantus represents equity investments in common stock that the Company classifies as available for sale. Such investments are carried at fair value in the accompanying consolidated balance sheets. Fair value is determined under the guidelines of GAAP which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Realized gains and losses, determined using the first-in, first-out (FIFO) method, are included in net income. Unrealized gains and losses considered to be temporary are reported as other comprehensive income (loss) and are included in stockholders equity. Other than temporary declines in the fair value of investment is included in other income (expense) on the statement of operations. The common stock of Amarantus is valued at the closing price reported on the active market on which the security is traded. This valuation methodology is considered to be using Level 1 inputs. The total value of Amarantus common stock at June 30, 2016 is $12,750. The unrealized loss for the nine months ended June 30, 2016 and 2015 was $287,250 and $1,437,500, net of income taxes, respectively, and was reported as a component of comprehensive income (loss). The unrealized gain (loss) for the three months ended June 30, 2016 and 2015 was $(900) and $62,500 net of income taxes, respectively, and was reported as a component of comprehensive income (loss). During the fiscal year ended September 30, 2015, the Company recognized an other than temporary loss on the stock in the amount of $2.7 million which was recognized in the statement of operations for that fiscal year. Recent Pronouncements: Management does not believe that any of the recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying consolidated financial statements. Reclassifications: Certain amounts have been reclassified in the prior year financial statements presented herein, to conform to the current year presentation. |
INCOME (LOSS) PER SHARE
INCOME (LOSS) PER SHARE | 9 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
INCOME (LOSS) PER SHARE | Basic income (loss) per share is computed by dividing the net income (loss) by the weighted average number of common shares outstanding during the period. Diluted loss per share gives effect to dilutive convertible securities, options, warrants and other potential common stock outstanding during the period; only in periods in which such effect is dilutive. The following table summarizes the components of the income (loss) per common share calculation: Nine Months Ended Three Months Ended 2016 2015 2016 2015 Income (Loss) Per Common Share - Basic: Net income (loss) available to common stockholders $ (1,020,684 ) $ 3,198,128 $ (327,485 ) $ (474,561 ) Weighted-average common shares outstanding 153,483,050 153,188,645 153,483,050 153,483,049 Basic income (loss) per share $ (0.01 ) $ 0.02 $ (0.00 ) $ (0.00 ) Income (Loss) Per Common Share - Diluted: Net income (loss) attributable to common stockholders $ (1,020,684 ) $ 3,198,128 $ (327,485 ) $ (474,561 ) Preferred stock dividends 52,955 Net income (loss) available to common stockholders (1,020,684) 52,955 (327,485 ) (474,561 ) Weighted-average common shares outstanding 153,483,050 153,188,645 153,483,050 153,483,049 Convertible preferred stock 8,850,000 Weighted-average common shares outstanding and common share equivalents 153,483,050 162,038,645 153,483,050 153,483,049 Diluted income (loss) per share $ (0.01 ) $ 0.02 $ (0.00 ) $ (0.00 ) The following securities have been excluded from the dilution per share calculation for the three and nine months ended June 30, 2016, and for the three months ended June 30, 2015 as their effect would be anti-dilutive: Three and Nine months Three months Ended Ended June 30, 2016 June 30, 2015 Options 13,542,688 15,542,688 Warrants 722,500 3,061,667 Convertible preferred stock 8,850,000 8,850,000 The following securities have been excluded from the diluted per share calculation for the nine months ended June 30, 2015 because the exercise price was greater than the average market price of the common shares: Options 15,542,688 Warrants 3,061,667 |
SALE OF ASSET
SALE OF ASSET | 9 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
SALE OF ASSET | On November 7, 2014, the Company entered into a Sale Agreement with Amarantus, Clark Corporate Law Group LLP ("CCLG") and Gordon & Rees, LLP (Gordon & Rees). Under the Sale Agreement, the Company had agreed to sell to Amarantus all of its rights and claims in the Lonza Litigation. These include all of the Cutanogen intellectual property rights and any Lonza manufacturing know-how technology. In addition, the Company had agreed to sell its PermaDerm® trademark and related intellectual property rights associated with it. The purchase price to be paid by Amarantus was: i) $3,500,000 in cash, and ii) shares of common stock in Amarantus having a value of $3,000,000. A portion of the cash purchase price was allocated to repay debt. On January 30, 2015, the agreement was amended whereby the cash portion of the purchase price was increased by $100,000 to $3,600,000 and the final payment was extended to February 20, 2015. Since Amarantus did not adhere to the original and amended agreements, the Company did not record the final installment of $2.5 million until it was received on February 24, 2015. The payments to CCLG, satisfied in full the obligations owed to CCLG under its secured promissory note. The $3,000,000 in Amarantus common stock was satisfied by the issuance of 37,500,000 shares of Amarantus common stock from Amarantus to the Company. In addition to the sale price, Amarantus paid Gordon & Rees $450,000 upon entering the agreement. The payment to Gordon & Rees was to satisfy in full all contingent litigation fees and costs owed to Gordon & Rees in connection with the Lonza Litigation. During the nine months ended June 30, 2015, the Company recorded a gain on the sale of assets of $6,604,431. In addition, as a result of the Sale Agreement, the Company determined that it is no longer liable for accounts payable to Lonza in the amount of $973,374. The liability was reversed and included in operating expenses as an item of income during the nine months ended June 30, 2015. The Company also granted to Amarantus an exclusive five (5) year option to license any engineered skin designed for the treatment of patients designated as severely burned by the FDA developed by the Company. Amarantus can exercise this option at a cost of $10,000,000 plus a royalty of 5% on gross revenues in excess of $150 million. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 9 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLES ASSETS | As discussed in Note 1, the Company paid $3,000,000 to Lonza in 2010 to purchase an exclusive know-how license and assistance in gaining FDA approval. The $3,000,000 payment was recorded as an intangible asset. Due to ongoing disputes and pending any settlement of the lawsuit, the Company subsequently determined that the value of the intangible asset and related intellectual property had been fully impaired. As a result, the balance of the intangible asset was $-0- at September 30, 2014. In August 2010, the Company paid $7,500 and obtained the rights to the trademarks PermaDerm® and TempaDerm® from KJR-10 Corp. As discussed above in Note 4, the Company sold its intangible assets on November 7, 2014. |
LOANS PAYABLE
LOANS PAYABLE | 9 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
LOANS PAYABLE | Loan Payable: In February 2011, an investor advanced $10,000. The loan does not bear interest and is due on demand. At both June 30, 2016 and September 30, 2015, the loan payable totaled $10,000. Loans Payable - Officers: During the year ended September 30, 2015, the Company recorded expenses that were paid directly by Randall McCoy, the Companys Chief Executive Officer in prior years and were submitted for reimbursement in the amount of $95,000. During the nine months ended June 30, 2016 the Company repaid $57,703 of this loan. At June 30, 2016 and September 30, 2015, the outstanding balance was $37,297 and $95,000, respectively. The loan does not bear interest and is due on demand. During the quarter ended December 31, 2015, $15,500 of Company expenses were paid directly by John Weber, the Companys Chief Financial Officer and were submitted for reimbursement. During the quarter ended March 31, 2016 this amount was repaid to the Company. |
BRIDGE FINANCING
BRIDGE FINANCING | 9 Months Ended |
Jun. 30, 2016 | |
Receivables [Abstract] | |
BRIDGE FINANCING | On December 21, 2011, the Company issued a $150,000 promissory note to an individual. The note bore interest so that the Company would repay $175,000 on the maturity date of June 21, 2012, which correlated to an effective rate of 31.23%. Additional interest of 10% was charged on any late payments. The note was not paid at the maturity date and the Company is incurring interest at 10% per annum. At both June 30, 2016 and September 30, 2015, the note balance was $175,000. Accrued interest was $70,479 and $57,342 at June 30, 2016 and September 30, 2015, respectively, which is included in accrued expenses - other on the accompanying consolidated balance sheets. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | The Company did not incur tax expense for the three and nine months ended June 30, 2016. The provision for income taxes of $2,829,000 for the nine months ended June 30, 2015, represents deferred taxes. The Company did not incur tax expense for the three months ended June 30, 2015. At June 30, 2016, the Company had available approximately $4.14 million of net operating loss carry forwards which expire in the years 2029 through 2035. However, the use of the net operating loss carryforwards generated prior to September 30, 2011 totaling $0.7 million is limited under Section 382 of the Internal Revenue Code. Section 382 of the Internal Revenue Code of 1986, as amended (the Code), imposes an annual limitation on the amount of taxable income that may be offset by a corporations NOLs if the corporation experiences an ownership change as defined in Section 382 of the Code. Significant components of the Companys deferred tax assets at June 30, 2016 and September 30, 2015 are as follows: June 30, 2016 September 30, 2015 Net operating loss carry forwards $ 1,656,411 $ 2,574,628 Unrealized loss 1,194,540 1,080,000 Stock based compensation 40,105 227,201 Accrued expenses 469,038 355,265 Total deferred tax assets 3,360,094 4,237,094 Valuation allowance (3,360,094 ) (4,237,094 ) Net deferred tax assets $ $ Due to the uncertainty of their realization, a valuation allowance has been established for all of the income tax benefit for these deferred tax assets. At both June 30, 2016 and September 30, 2015, the Company had no material unrecognized tax benefits and no adjustments to liabilities or operations were required. The Company does not expect that its unrecognized tax benefits will materially increase within the next twelve months. The Company recognizes interest and penalties related to uncertain tax positions in general and administrative expense. As of June 30, 2016 and 2015, the Company has not recorded any provisions for accrued interest and penalties related to uncertain tax positions. The Company files its federal income tax returns under a statute of limitations. The 2012 through 2015 tax years generally remain subject to examination by federal tax authorities. The Company has not filed any of its state income tax returns since inception. Due to recurring losses, management believes that once such returns are filed, the Company would incur state minimum tax liabilities that were not deemed material to accrue. |
STOCKHOLDERS DEFICIENCY
STOCKHOLDERS DEFICIENCY | 9 Months Ended |
Jun. 30, 2016 | |
Equity [Abstract] | |
STOCKHOLDERS (DEFICIENCY) EQUITY | Preferred Stock: Series A Series A Preferred pays a dividend of 8% per annum on the stated value and have a liquidation preference equal to the stated value of the shares. Each share of Preferred Stock has an initial stated value of $1 and are convertible into shares of the Companys common stock at the rate of 10 for 1. The dividends are cumulative commencing on the issue date whether or not declared. Dividends amounted to $53,149 and $17,652 for the nine and three months ended June 30, 2016, respectively and $52,955 and $17,652, respectively for the corresponding periods in the prior year. At June 30, 2016 and September 30, 2015, dividends payable total $375,191 and $322,042, respectively. At both June 30, 2016 and September 30, 2015, 885,000 shares of Series A Preferred were outstanding. Series B On January 23, 2012, the Company designated a new class of preferred stock called Series B Convertible Preferred Stock (Series B Preferred). Four million shares have been authorized with a liquidation preference of $2.00 per share. Each share of Series B Preferred is convertible into ten shares of common stock. Holders of Series B Convertible Preferred Stock have a right to a dividend (pro-rata to each holder) based on a percentage of the gross revenue earned by the Company in the United States, if any, and the number of outstanding shares of Series B Convertible Preferred Stock, as follows: Year 1 - Total Dividend to all Series B holders = .03 x Gross Revenue in the U.S. Year 2 - Total Dividend to all Series B holders = .02 x Gross Revenue in the U.S. Year 3 - Total Dividend to all Series B holders = .01 x Gross Revenue in the U.S. At June 30, 2016, no shares of Series B Preferred are outstanding. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
STOCK-BASED COMPENSATION | The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with FASB ASC 505, Equity On January 6, 2011, the Company approved the issuance of 885,672 options to each of the four members of the board of directors at an exercise price of $0.035, as amended, per share that were to expire on December 22, 2015. Effective as of the expiration date, the Company extended the term of those options to December 31, 2018. All other contractual terms of the options remained the same. The option exercise price was compared to the fair market value of the Companys shares on the date when the extension was authorized by the Company, resulting in the immediate recognition of $67,895 in compensation expense. There is no deferred compensation expense associated with this transaction, since all extended options had previously been fully vested. The extended options were valued utilizing the Black-Scholes option pricing model with the following assumptions: Exercise price of $0.035, expected volatility of 208%, risk free rate of 1.31% and expected term of 3.03 years. Stock based compensation amounted to $67,895 and $32,365 for the nine months ended June 30, 2016 and 2015, respectively, and $0 for the three months ended June 30, 2016 and 2015. Stock-based compensation is included in general and administrative expenses. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Jun. 30, 2016 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | The Companys principal executive offices are located in Little Falls, New Jersey. The headquarters is located in the offices of McCoy Enterprises LLC, an entity controlled by Mr. McCoy. The office is attached to his residence but has its own entrances, restroom and kitchen facilities. The Company also maintains an office at Carbon & Polymer Research Inc. ("CPR") in Pennington, New Jersey, which is the Company's materials and testing laboratory. An employee of the Company is an owner of CPR. No rent is charged for either premise. On May 16, 2016, the Company entered into an agreement with CPR in which CPR will supply the collagen scaffolds used in the Company's production of the skin tissue. The contract contains a most favored customer clause guaranteeing the Company prices equal or lower than those charged to other customers. The Company has not yet made purchases from CPR. The Company expects to purchase Closed Herd collagen from PureMed Pharma LLC (PureMed), a development stage company in which the companys CEO and CFO are member - owners. The Company has agreed to assist PureMed by providing consultants to work on certain tasks in order to gain FDA approval and such consultants costs would be reimbursed by PureMed. For the three and nine months ended June 30, 2016, the Company paid consultants on behalf of PureMed in the amount of $9,222 and $64,622, respectively. There were no such advances during the nine months ended June 30, 2015. As of June 30, 2016 and September 30, 2015 the amount due from PureMed was $64,622 and $0, respectively, and reflected in due from related party on the accompanying consolidated balance sheets. The Company has classified the advances as non-current as repayment is not expected within the next twelve months. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Jun. 30, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | Management has evaluated subsequent events through the date of this filing. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Interim Financial Statements | The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and note disclosures required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine months ended June 30, 2016 are not necessarily indicative of the results that may be expected for the year ending September 30, 2016. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended September 30, 2015, as filed with the Securities and Exchange Commission. |
Going Concern | The Company's consolidated financial statements have been prepared assuming that the Company will continue as a going concern which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has incurred cumulative losses and has an accumulated deficit of approximately $11.7 million from inception, expects to incur further losses in the development of its business and has been dependent on funding operations through the issuance of convertible debt and private sale of equity securities. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The Company is using the proceeds from the Asset Sale to fund operations. Once the funds are exhausted, management plans to finance operations through the private or public placement of debt and/or equity securities. However, no assurance can be given at this time as to whether the Company will be able to obtain such financing. The consolidated financial statements do not include any adjustment relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
Financial Instruments and Fair Value Measurement | The Company measures fair value of its financial assets on a three-tier value hierarchy, which prioritizes the inputs, used in the valuation methodologies in measuring fair value: Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable or inputs that can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Unobservable inputs which are supported by little or no market activity. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The carrying value of cash, prepaid expenses and other current assets, accounts payable, accrued expenses and all loans and notes payable in the Companys consolidated balance sheets approximated their values as of and June 30, 2016 and September 30, 2015 due to their short-term nature. Common stock of Amarantus represents equity investments in common stock that the Company classifies as available for sale. Such investments are carried at fair value in the accompanying consolidated balance sheets. Fair value is determined under the guidelines of GAAP which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Realized gains and losses, determined using the first-in, first-out (FIFO) method, are included in net income. Unrealized gains and losses considered to be temporary are reported as other comprehensive income (loss) and are included in stockholders equity. Other than temporary declines in the fair value of investment is included in other income (expense) on the statement of operations. The common stock of Amarantus is valued at the closing price reported on the active market on which the security is traded. This valuation methodology is considered to be using Level 1 inputs. The total value of Amarantus common stock at June 30, 2016 is $12,750. The unrealized loss for the nine months ended June 30, 2016 and 2015 was $287,250 and $1,437,500, net of income taxes, respectively, and was reported as a component of comprehensive income (loss). The unrealized gain (loss) for the three months ended June 30, 2016 and 2015 was $(900) and $62,500 net of income taxes, respectively, and was reported as a component of comprehensive income (loss). During the fiscal year ended September 30, 2015, the Company recognized an other than temporary loss on the stock in the amount of $2.7 million which was recognized in the statement of operations for that fiscal year. |
Recent Pronouncements | Management does not believe that any of the recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying consolidated financial statements. |
Reclassifications | C ertain amounts have been reclassified in the prior year financial statements presented herein, to conform to the current year presentation. |
INCOME (LOSS) PER SHARE (Tables
INCOME (LOSS) PER SHARE (Tables) | 9 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Income Loss Per Share Tables | ||
Schedule of Income Loss per Common Share | Nine Months Ended Three Months Ended 2016 2015 2016 2015 Income (Loss) Per Common Share - Basic: Net income (loss) available to common stockholders $ (1,020,684 ) $ 3,198,128 $ (327,485 ) $ (474,561 ) Weighted-average common shares outstanding 153,483,050 153,188,645 153,483,050 153,483,049 Basic income (loss) per share $ (0.01 ) $ 0.02 $ (0.00 ) $ (0.00 ) Income (Loss) Per Common Share - Diluted: Net income (loss) attributable to common stockholders $ (1,020,684 ) $ 3,198,128 $ (327,485 ) $ (474,561 ) Preferred stock dividends 52,955 Net income (loss) available to common stockholders (1,020,684) 52,955 (327,485 ) (474,561 ) Weighted-average common shares outstanding 153,483,050 153,188,645 153,483,050 153,483,049 Convertible preferred stock 8,850,000 Weighted-average common shares outstanding and common share equivalents 153,483,050 162,038,645 153,483,050 153,483,049 Diluted income (loss) per share $ (0.01 ) $ 0.02 $ (0.00 ) $ (0.00 ) | |
Schedule Of Income Loss per Common Share Exclusions | Three and Nine months Three months Ended Ended June 30, 2016 June 30, 2015 Options 13,542,688 15,542,688 Warrants 722,500 3,061,667 Convertible preferred stock 8,850,000 8,850,000 | Options 15,542,688 Warrants 3,061,667 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 9 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Deferred Tax Assets | June 30, 2016 September 30, 2015 Net operating loss carry forwards $ 1,656,411 $ 2,574,628 Unrealized loss 1,194,540 1,080,000 Stock based compensation 40,105 227,201 Accrued expenses 469,038 355,265 Total deferred tax assets 3,360,094 4,237,094 Valuation allowance (3,360,094 ) (4,237,094 ) Net deferred tax assets $ $ |
THE COMPANY (Details Narrative)
THE COMPANY (Details Narrative) - USD ($) | 9 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Date of Incorporation | Sep. 6, 2007 | |
Payment to Acquire Intangible Assets | $ 10,000 | |
Purchase Price | $ 3,600,000 | |
Sale Agreement | ||
Date of Agreement | Nov. 7, 2014 | |
Purchase Price | $ 3,500,000 | |
Know How SPA | ||
Date of Agreement | Jul. 21, 2010 | |
Payment to Acquire Intangible Assets | $ 3,000,000 | |
Payment to Acquire Subsidiary | $ 2,000,000 |
BASIS OF PRESENTATION (Details
BASIS OF PRESENTATION (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Common stock of Amarantus Corporation | $ 12,750 | $ 12,750 | $ 300,000 | ||
Change in unrealized gains on available-for-sale securities, net of | (900) | $ 62,500 | (287,250) | $ (1,437,500) | |
Accumulated deficit | $ (11,677,527) | $ (11,677,527) | (10,709,992) | ||
Loss on other than a temporary decline in fair value of investment | $ (27,000,000) |
Schedule of Income Loss per Com
Schedule of Income Loss per Common Share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income (Loss) Per Common Share Basic | ||||
Net income (loss) attributable to common stockholders | $ (327,485) | $ (474,561) | $ (1,020,684) | $ 3,198,128 |
Weighted average number of shares outstanding | 153,483,050 | 153,483,049 | 153,483,050 | 153,188,645 |
Basic income (loss) per share | $ 0 | $ 0 | $ (0.01) | $ 0.02 |
Income (Loss) Per Common Share Diluted | ||||
Net income (loss) attributable to common stockholders | $ (327,485) | $ (474,561) | $ (1,020,684) | $ 3,198,128 |
Preferred stock dividends | 52,955 | |||
Net income (loss) available to common shareholders | $ (327,485) | $ (474,561) | $ (1,020,684) | $ 3,251,083 |
Weighted average number of shares outstanding | 153,483,050 | 153,483,049 | 153,483,050 | 153,188,645 |
Convertible preferred stock | $ 8,850,000 | |||
Weighted average number of shares outstanding and common share equivalents | 153,483,050 | 153,483,049 | 153,483,050 | 162,038,645 |
Diluted income (loss) per share | $ 0 | $ 0 | $ (0.01) | $ 0.02 |
LOSS PER SHARE - Schedule Of In
LOSS PER SHARE - Schedule Of Income Loss per Common Share Exclusions (Details) - shares | Jun. 30, 2016 | Jun. 30, 2015 |
Exclusions - Calcs | ||
Options | 13,542,688 | |
Warrants | 722,500 | |
Convertible preferred stock | 8,850,000 | |
Exclusions - Diluted Calcs | ||
Options | 15,542,688 | |
Warrants | 3,061,667 | |
Convertible preferred stock | 8,850,000 |
SALE OF ASSET (Details Narrativ
SALE OF ASSET (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Common Stock of Amarantus received | $ (3,000,000) | |||
Purchase Price | 3,600,000 | |||
Gain on sale of assets | 6,604,431 | |||
Reversal of accounts payable - Lonza | $ 973,374 | |||
Sale Agreement | ||||
Date of Agreement | Nov. 7, 2014 | |||
Common Stock of Amarantus received | $ 3,000,000 | |||
Purchase Price | $ 3,500,000 | |||
Common Stock of Amarantus received, shares | 37,500,000 | |||
Gain on sale of assets | $ 6,604,431 | |||
Reversal of accounts payable - Lonza | $ 973,374 | |||
Sale Agmt Amendment | ||||
Date of Agreement | Jan. 30, 2015 | |||
Purchase Price | $ 3,600,000 | |||
Exclusive License Grant | ||||
Purchase Price | $ 10,000,000 | |||
Option, Term | P5Y | |||
Royalty Fee | 5.00% |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Sep. 30, 2010 | Sep. 30, 2014 | |
Payment to Acquire Intangible Assets | $ 10,000 | |||
Know How SPA | ||||
Date of Agreement | Jul. 21, 2010 | |||
Payment to Acquire Intangible Assets | $ 3,000,000 | |||
Intangible assets | $ 0 | |||
KJR 10 Corp | ||||
Payment to Acquire Intangible Assets | $ 7,500 |
LOANS PAYABLE (Details Narrativ
LOANS PAYABLE (Details Narrative) - USD ($) | 9 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Sep. 30, 2015 | |
Loan payable | $ 10,000 | $ 10,000 | ||
Loans payable - related parties | 37,297 | 95,000 | ||
Repayments of loans from officers | (73,203) | $ (229,147) | ||
Investor | ||||
Loan payable | 10,000 | 10,000 | ||
Loan payable, balance | 10,000 | 10,000 | ||
Chief Executive Officer | ||||
Loans payable - related parties | 95,000 | |||
Repayments of loans from officers | 57,703 | |||
Loan payable, balance | 37,297 | $ 95,000 | ||
Chief Financial Officer | ||||
Loans payable - related parties | $ 15,500 | |||
Loan payable, balance | $ 0 |
BRIDGE FINANCING (Details Narra
BRIDGE FINANCING (Details Narrative) - USD ($) | 9 Months Ended | |
Jun. 30, 2016 | Sep. 30, 2015 | |
Accrued expenses other | $ 549,424 | $ 484,635 |
Promissory Note 2 | ||
Date of Note | Dec. 21, 2011 | |
Debt Instrument | $ 150,000 | |
Maturity Date | Jun. 21, 2012 | |
Interest Rate | 31.23% | |
Additional interest rate if late | 10.00% | |
Debt Instrument, Balance | $ 175,000 | 175,000 |
Accrued expenses other | $ 70,479 | $ 57,342 |
INCOME TAXES - Deferred Tax Ass
INCOME TAXES - Deferred Tax Assets (Details) - USD ($) | Jun. 30, 2016 | Sep. 30, 2015 |
Deferred tax asset attributable to: | ||
Net operating loss carryover | $ 1,656,411 | $ 2,574,628 |
Unrealized loss | 1,194,540 | 1,080,000 |
Stock based compensation | 40,105 | 227,201 |
Accrued expenses | 469,038 | 355,265 |
Total deferred tax assets | 3,360,094 | 4,237,094 |
Valuation allowance | (3,360,094) | (4,237,094) |
Net deferred tax asset |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 9 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Operating Loss Carryforwards | $ 4,140,000 | |
Provision for income tax benefits | $ 2,829,000 |
STOCKHOLDERS DEFICIENCY (Detail
STOCKHOLDERS DEFICIENCY (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Jun. 30, 2016 | Jun. 30, 2015 | Mar. 31, 2014 | Jun. 30, 2016 | Jun. 30, 2015 | Sep. 30, 2015 | |
Series A Preferred Stock, Shares Authorized | 5,500,000 | 5,500,000 | 5,500,000 | |||
Dividends payable | $ 375,191 | $ 375,191 | $ 322,042 | |||
Common stock, Issued | 157,911,410 | 157,911,410 | 157,911,410 | |||
Common stock, Value | $ 157,914 | $ 157,914 | $ 157,914 | |||
Common Stock, Par Value | $ 0.001 | $ 0.001 | $ 0.001 | |||
Series A Preferred Stock, Issued and outstanding | 885,000 | 885,000 | 885,000 | |||
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 | 200,000,000 | |||
Stock based compensation - general and administrative | $ 67,895 | $ 32,365 | ||||
Series A | ||||||
Dividends | 17,652 | $ 52,955 | $ 17,652 | 53,149 | ||
Dividends payable | $ 357,191 | $ 357,191 | $ 322,042 | |||
Series A Preferred Stock, Issued and outstanding | 885,000 | 885,000 | 885,000 | |||
Series B | ||||||
Series B Preferred Stock, Shares Authorized | 4,000,000 | |||||
Series B Preferred Stock, Outstanding | 0 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Sep. 30, 2015 | |
Common stock, Issued | 157,911,410 | 157,911,410 | 157,911,410 | ||
Common stock, Value | $ 157,914 | $ 157,914 | $ 157,914 | ||
Stock based compensation - general and administrative | $ 67,895 | $ 32,365 | |||
4 Board Members | |||||
Date of Issuance | Jan. 6, 2011 | ||||
Common stock, Issued | 885,672 | 885,672 | |||
Compensation Expense, Recognized | $ 0 | $ 0 | $ 67,895 | $ 32,365 | |
Common stock, Value | $ 27,556 | $ 27,556 | |||
Common Stock Option, Exercise Price | $ 0.035 | $ 0.035 | |||
Grant Date, Fair Value | $ 0.02 | ||||
Stock based compensation - general and administrative | $ 67,895 | ||||
Date of Expiration | Dec. 31, 2018 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Sep. 30, 2015 | |
Due from related party | $ 64,622 | $ 64,622 | |||
Advances to related party | (9,222) | (64,622) | |||
PureMed | |||||
Due from related party | $ 64,622 | $ 64,622 | $ 0 |