Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Mar. 31, 2017 | May 12, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | Regenicin, Inc. | |
Entity Central Index Key | 1,412,659 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
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 | Q2 | |
Document Fiscal Year Focus | 2,017 |
CONSOLIDATED BALANCE SHEET
CONSOLIDATED BALANCE SHEET - USD ($) | Mar. 31, 2017 | Sep. 30, 2016 |
CURRENT ASSETS | ||
Cash | $ 40,066 | $ 218,847 |
Prepaid expenses and other current assets | 40,963 | 66,218 |
Due from related party | 71,435 | |
Common stock of Amarantus Corporation | 15,475 | 7,500 |
Total current assets | 167,939 | 292,565 |
Due from related party | 67,268 | |
Total assets | 167,939 | 359,833 |
CURRENT LIABILITIES | ||
Accounts payable | 264,940 | 262,934 |
Accrued expenses other | 331,688 | 230,897 |
Accrued salaries officers | 1,426,501 | 1,136,001 |
Bridge financing | 175,000 | 175,000 |
Loan payable | 10,000 | 10,000 |
Loans payable officer | 13,009 | |
Total current and total liabilities | 2,208,129 | 1,827,841 |
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 | 10,177,515 | 10,177,515 |
Accumulated deficit | (12,380,051) | (11,799,894) |
Other comprehensive income | 7,975 | |
Less: treasury stock; 4,428,360 shares at par | (4,428) | (4,428) |
Total stockholders deficiency | (2,040,190) | (1,468,008) |
Total liabilities and stockholders deficiency | $ 167,939 | $ 359,833 |
CONSOLIDATED BALANCE SHEET (Par
CONSOLIDATED BALANCE SHEET (Parenthetical) - $ / shares | Mar. 31, 2017 | Sep. 30, 2016 |
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 |
Treasury Stock, Issued | 4,428,360 | 4,428,360 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Income Statement [Abstract] | ||||
Revenues | ||||
Operating expenses | ||||
Research and development | 707 | 5,284 | 1,445 | |
General and administrative | 295,295 | 288,457 | 585,322 | 579,588 |
Stock based compensation - general and administrative | 67,895 | |||
Total operating expenses | 295,295 | 289,164 | 590,606 | 648,928 |
Operating loss before other operating income | (295,295) | (289,164) | (590,606) | (648,928) |
Other operating income - reversal of accounts payable | 15,000 | |||
Loss from operations | (295,295) | (289,164) | (575,606) | (648,928) |
Other income (expenses) | ||||
Interest expense | (4,315) | (4,363) | (8,726) | (8,774) |
Interest income | 1,275 | 4,175 | ||
Total other income (expenses) | (3,040) | (4,363) | (4,551) | (8,774) |
Net loss | (298,335) | (293,527) | (580,157) | (657,702) |
Preferred stock dividends | (17,458) | (17,652) | (35,303) | (35,497) |
Net loss attributable to common stockholders | $ (315,793) | $ (311,179) | $ (615,460) | $ (693,199) |
Loss per share Basic | $ 0 | $ 0 | $ 0 | $ 0 |
Loss per share Diluted | $ 0 | $ 0 | $ 0 | $ 0 |
Weighted average number of shares outstanding Basic | 153,483,050 | 153,483,050 | 153,483,050 | 153,483,050 |
Weighted average number of shares outstanding Diluted | 153,483,050 | 153,483,050 | 153,483,050 | 153,483,050 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Consolidated Statements Of Comprehensive Income Loss | ||||
Net loss | $ (298,335) | $ (293,527) | $ (580,157) | $ (657,702) |
Other comprehensive income (loss): | ||||
Change in unrealized gain (loss) on available-for-sale securities, net of income taxes | 8,775 | (145,100) | 7,975 | (286,350) |
Comprehensive loss | $ (289,560) | $ (438,627) | $ (572,182) | $ (944,052) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ 580,157 | $ 657,702 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Accrued interest income on note receivable | (4,167) | |
Accrued interest on notes and loans payable | 8,726 | |
Stock based compensation - general and administrative | 67,895 | |
Reversal of accounts payable | (15,000) | |
Expenses paid directly by officer | 15,500 | |
Changes in operating assets and liabilities | ||
Prepaid expenses and other current assets | 25,255 | (2,493) |
Accounts payable | 17,006 | 18,492 |
Accrued expenses | 92,065 | 113,642 |
Accrued salaries | 290,500 | |
Net cash used in operating activities | (161,605) | (444,666) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Repayments of loans from related party | (13,009) | (30,651) |
Net cash used in financing activities | (13,009) | (30,651) |
NET DECREASE IN CASH | (178,781) | (475,317) |
CASH - BEGINNING OF PERIOD | 218,847 | 1,061,377 |
CASH - END OF PERIOD | 40,066 | 586,060 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | ||
Cash paid for taxes | ||
Non-cash activities: | ||
Increase in loans payable - officers from Company expenses directly paid by officer | $ 15,500 |
THE COMPANY
THE COMPANY | 6 Months Ended |
Mar. 31, 2017 | |
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 Company’s original business was the development of a purification device. Such business was assigned to the Company’s 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 Walkersville’s 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 date of the transaction. The Company used the net proceeds of the transaction to fund development of cultured cell technology and to pursue approval of the products through the FDA as well as for general and administrative expenses. The Company has been developing its own unique cultured skin substitute since the Company received Lonza’s termination notice. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | Interim Financial Statements: The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) 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 six months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the year ending September 30, 2017. 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, 2016, 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 $12.4 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, private sale of equity securities, and the proceeds from the Sale Agreement. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The Company is using the proceeds from the Sale Agreement 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 Company’s consolidated balance sheets approximated their values as of and March 31, 2017 and September 30, 2016 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 (loss). 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 March 31, 2017 is $15,475. The unrealized gain for the six and three months ended March 31, 2017 was $7,975 and $8,775, net of income taxes, respectively, and was reported as a component of comprehensive loss. The unrealized loss for the six and three months ended March 31, 2016 was $286,350 and $145,100, net of income taxes, respectively, and was also reported as a component of comprehensive loss. The Company has recognized other than temporary losses of $2,992,500 since the acquisition of the stock in connection with the Sale Agreements. Reclassification: Certain reclassifications have been made to the prior periods’ statement of cash flows to conform to the current period’s presentation. The reclassifications did not affect the net income or retained earnings of the Company. Recent Pronouncements: In January 2016, the FASB issued ASU No. 2016-01, "Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities". The new standard principally affects accounting standards for equity investments, financial liabilities where the fair value option has been elected, and the presentation and disclosure requirements for financial instruments. Upon the effective date of the new standards, all equity investments in unconsolidated entities, other than those accounted for using the equity method of accounting, will generally be measured at fair value through earnings. There will no longer be an available-for-sale classification and therefore, no changes in fair value will be reported in other comprehensive income (loss) for equity securities with readily determinable fair values. The new guidance on the classification and measurement will be effective for public business entities in fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company is currently evaluating the impact of ASU 2016-01 on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases, (Topic 842). This new ASU represents a wholesale change to lease accounting and introduces a lease model that brings most leases on the balance sheet. It also eliminates the required use 9f bright-line tests in current U.S. GAAP for determining lease classification. This ASU is effective for armual periods beginning after December 15, 2018 (i.e., calendar periods beginning on January 1, 2019), and interim periods thereafter. Earlier application is permitted for all entities. The Company is currently evaluating the impact of ASU 2016-02 on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting, which is intended to simplify the accounting and reporting for employee share-based payment transactions. The pronouncement is effective for interim and annual period’s beginning after December 31, 2016 with early adoption permitted. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial statements. In May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation, which is intended to reduce both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, Compensation—Stock Compensation, to a change to the terms or conditions of a share-based payment award. The amendments in this Update are effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017 with early adoption permitted. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements. All other recent pronouncements issued by the FASB or other authoritative standards groups with future effective dates are either not applicable or are not expected to be significant to the financial statements of the Company. |
LOSS PER SHARE
LOSS PER SHARE | 6 Months Ended |
Mar. 31, 2017 | |
Notes to Financial Statements | |
INCOME (LOSS) PER SHARE | Basic loss per share is computed by dividing the net 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 weighted average securities have been excluded from the calculation of net loss per share for the six months ended March 31, 2017 and 2016, as the exercise price was greater than the average market price of the common shares: 2017 2016 (Restated) Options — 3,542,688 Convertible Preferred Stock 722,500 722,500 The following weighted average securities have been excluded from the calculation even though the exercise price was less than the market price of the common shares because the effect of including these potential shares was anti-dilutive due to the net loss incurred during the six months ended March 31, 2017 and 2016: 2017 2016 (Restated) Options 8,955,998 601,239 Convertible Preferred Stock 8,850,000 8,850,000 The effects of options and warrants on diluted earnings per share are reflected through the use of the treasury stock method and the excluded shares that are “in the money” are disclosed above in that manner. |
DUE FROM RELATED PARTY
DUE FROM RELATED PARTY | 6 Months Ended |
Mar. 31, 2017 | |
Notes to Financial Statements | |
DUE FROM RELATED PARTY | The Company expects to purchase “Closed Herd” collagen from Pure Med Farma, LLC (“PureMed”), a development stage company in which the Company’s Chief Executive Officer and Chief Financial Officer are member - owners. The Company and PureMed entered into a three year supply agreement on October 16, 2016 naming PureMed as the exclusive provider of collagen to the Company. The Company has agreed to assist PureMed by providing consultants to work on certain tasks in order to gain FDA approval. Such consultants’ costs will be reimbursed by PureMed. For the year ended September 30, 2016, the Company paid consultants on behalf of PureMed in the amount of $64,622 and was reflected at that time as a non-current asset on the balance sheet. On December 15, 2016, PureMed issued a note in the amount of $64,622 representing the advances for consultants through that date. Under the terms of the note, interest accrued at 8% per annum and was payable on or before December 15, 2017. The balance of the note plus accrued interest of $6,813 at March 31, 2017 totaled $71,435. The balance of the note plus accrued interest of $2,646 at September 30, 2016 totaled $67,268. Interest income in the amount of $1,275 and $4,175 was earned during the three and six months ended March 31, 2017, respectively. The note and accrued interest was paid in full on May 5, 2017 in the amount of $71,930. |
LOANS PAYABLE
LOANS PAYABLE | 6 Months Ended |
Mar. 31, 2017 | |
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 March 31, 2017 and September 30, 2016, the loan payable totaled $10,000. Loans Payable - Officer: The Chief Executive Officer in fiscal year 2015 submitted for reimbursement Company expenses paid personally by him. At September 30, 2016, the balance owed to him was $13,009 and during the quarter ended December 31, 2016 that balance was repaid in full. The loan did not bear interest and was due on demand. |
BRIDGE FINANCING
BRIDGE FINANCING | 6 Months Ended |
Mar. 31, 2017 | |
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 additional interest described above. At both March 31, 2017 and September 30, 2016, the note balance was $175,000. Interest expense was $8,726 and $8,774 for the six months ended March 31, 2017 and 2016. Interest expense was $4,315 and $4,363 for the three months ended March 31, 2017 and 2016, respectively. Accrued interest on the note was $83,616 and $74,890 as of March 31, 2017 and September 30, 2016, respectively and is included in accrued expenses in the accompanying balance sheets. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | The Company did not incur current tax expense for the three and six months ended March 31, 2017 and 2016. At March 31, 2017, the Company had available approximately $5 million of net operating loss carry forwards which expire in the years 2029 through 2036. 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 corporation’s NOLs if the corporation experiences an “ownership change” as defined in Section 382 of the Code. Significant components of the Company’s deferred tax assets at March 31, 2017 and September 30, 2016 are as follows: March 31, 2017 September 30, 2016 Net operating loss carry forwards $ 1,738,382 $ 1,630,872 Unrealized loss 1,193,810 1,197,000 Stock based compensation 40,104 40,104 Accrued expenses 540,744 424,544 Total deferred tax assets 3,513,040 3,292,520 Valuation allowance (3,513,040 ) (3,292,520 ) 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 March 31, 2017 and September 30, 2016, 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 March 31, 2017 and September 30, 2016 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 2013 through 2016 tax years generally remain subject to examination by federal tax authorities. |
STOCKHOLDERS DEFICIENCY
STOCKHOLDERS DEFICIENCY | 6 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
STOCKHOLDERS (DEFICIENCY) EQUITY | Preferred Stock: Series A At both December 31, 2016 and September 30, 2016, 885,000 shares of Series A Preferred Stock (“Series A Preferred”) were outstanding. 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 ($885,000 liquidation preference as of March 31, 2017 and September 30, 2016 plus dividends in arrears as per below). Each share of Series A Preferred Stock has an initial stated value of $1 and are convertible into shares of the Company’s common stock at the rate of 10 for 1. The dividends are cumulative commencing on the issue date when and if declared by the Board of Directors. As of March 31, 2017 and September 30, 2016, dividends in arrears were $428,340 ($.48 per share) and $393,037 ($.44 per share), respectively. During the fourth quarter of 2016, the Company identified an error in the recording of accrued dividends on the Series A Convertible Preferred Stock. An immaterial error correction was made in the consolidated balance sheet at September 30, 2015, and in the consolidated statements of changes in stockholders’ deficiency as of October 1, 2014. Preferred stock dividends are no longer accrued as a balance sheet liability but continue to accrue and are disclosed as preferred dividends in arrears and accordingly, a non-cash disclosure for preferred stock dividends in the amount of $35,497 on the statement of cash flows has been removed for the six months ended March 31, 2016. 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 March 31, 2017, no shares of Series B Preferred are outstanding. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | The Company’s principal executive office is 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. 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. No rent is charged for either premise. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Mar. 31, 2017 | |
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 718, “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 Company’s 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 $-0- and $67,895 for the six months ended March 31, 2017 and 2016, respectively. Stock-based compensation is included in general and administrative expenses. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | Management has evaluated subsequent events through the date of this filing. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Interim Financial Statements | The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) 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 six months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the year ending September 30, 2017. 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, 2016, 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 $12.4 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, private sale of equity securities, and the proceeds from the sale Agreement. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The Company is using the proceeds from the sale Agreement 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 Company’s consolidated balance sheets approximated their values as of and March 31, 2017 and September 30, 2016 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 (loss). 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 March 31, 2017 is $15,475. The unrealized gain for the six and three months ended March 31, 2017 was $7,975 and $8,775, net of income taxes, respectively, and was reported as a component of comprehensive loss. The unrealized loss for the six and three months ended March 31, 2016 was $286,350 and $145,100, net of income taxes, respectively, and was also reported as a component of comprehensive loss. During the fiscal year ended September 30, 2016, the Company recognized another than temporary loss on the stock in the amount of $292,500 which was recognized in the statement of net operations. |
Reclassification | In January 2016, the FASB issued ASU No. 2016-01, "Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities". The new standard principally affects accounting standards for equity investments, financial liabilities where the fair value option has been elected, and the presentation and disclosure requirements for financial instruments. Upon the effective date of the new standards, all equity investments in unconsolidated entities, other than those accounted for using the equity method of accounting, will generally be measured at fair value through earnings. There will no longer be an available-for-sale classification and therefore, no changes in fair value will be reported in other comprehensive income (loss) for equity securities with readily determinable fair values. The new guidance on the classification and measurement will be effective for public business entities in fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company is currently evaluating the impact of ASU 2016-01 on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases, (Topic 842). This new ASU represents a wholesale change to lease accounting and introduces a lease model that brings most leases on the balance sheet. It also eliminates the required use 9f bright-line tests in current U.S. GAAP for determining lease classification. This ASU is effective for armual periods beginning after December 15, 2018 (i.e., calendar periods beginning on January 1, 2019), and interim periods thereafter. Earlier application is permitted for all entities. The Company is currently evaluating the impact of ASU 2016-02 on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting, which is intended to simplify the accounting and reporting for employee share-based payment transactions. The pronouncement is effective for interim and annual period’s beginning after December 31, 2016 with early adoption permitted. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial statements. In May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation, which is intended to reduce both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, Compensation—Stock Compensation, to a change to the terms or conditions of a share-based payment award. The amendments in this Update are effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017 with early adoption permitted. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial statements. All other recent pronouncements issued by the FASB or other authoritative standards groups with future effective dates are either not applicable or are not expected to be significant to the financial statements of the Company. |
Recent Pronouncements | In January 2016, the FASB issued ASU No. 2016-01, "Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities". The new standard principally affects accounting standards for equity investments, financial liabilities where the fair value option has been elected, and the presentation and disclosure requirements for financial instruments. Upon the effective date of the new standards, all equity investments in unconsolidated entities, other than those accounted for using the equity method of accounting, will generally be measured at fair value through earnings. There will no longer be an available-for-sale classification and therefore, no changes in fair value will be reported in other comprehensive income (loss) for equity securities with readily determinable fair values. The new guidance on the classification and measurement will be effective for public business entities in fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company is currently evaluating the impact of ASU 2016-01 on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases, (Topic 842). This new ASU represents a wholesale change to lease accounting and introduces a lease model that brings most leases on the balance sheet. It also eliminates the required use 9f bright-line tests in current U.S. GAAP for determining lease classification. This ASU is effective for armual periods beginning after December 15, 2018 (i.e., calendar periods beginning on January 1, 2019), and interim periods thereafter. Earlier application is permitted for all entities. The Company is currently evaluating the impact of ASU 2016-02 on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting, which is intended to simplify the accounting and reporting for employee share-based payment transactions. The pronouncement is effective for interim and annual period’s beginning after December 31, 2016 with early adoption permitted. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial statements. In May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation, which is intended to reduce both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, Compensation—Stock Compensation, to a change to the terms or conditions of a share-based payment award. The amendments in this Update are effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017 with early adoption permitted. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial statements. All other recent pronouncements issued by the FASB or other authoritative standards groups with future effective dates are either not applicable or are not expected to be significant to the financial statements of the Company. |
LOSS PER SHARE (Tables)
LOSS PER SHARE (Tables) | 6 Months Ended |
Mar. 31, 2017 | |
Loss Per Share Tables | |
Schedule Of Income Loss per Common Share Exclusions | 2017 2016 (Restated) Options — 3,542,688 Convertible Preferred Stock 722,500 722,500 |
Schedule of Income Loss per Common Share Exclusions | 2017 2016 (Restated) Options 8,955,998 601,239 Convertible Preferred Stock 8,850,000 8,850,000 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 6 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Deferred Tax Assets | March 31, 2017 September 30, 2016 Net operating loss carry forwards $ 1,738,382 $ 1,630,872 Unrealized loss 1,193,810 1,197,000 Stock based compensation 40,104 40,104 Accrued expenses 540,744 424,544 Total deferred tax assets 3,513,040 3,292,520 Valuation allowance (3,513,040 ) (3,292,520 ) Net deferred tax assets $ — $ — |
THE COMPANY (Details Narrative)
THE COMPANY (Details Narrative) | 6 Months Ended |
Mar. 31, 2017USD ($) | |
Date of Incorporation | Sep. 6, 2007 |
Sale Agreement | |
Date of Agreement | Nov. 7, 2014 |
Purchase Price | $ 3,600,000 |
Know How SPA | |
Date of Agreement | Jul. 21, 2010 |
Payment to Acquire Subsidiary | $ 2,000,000 |
BASIS OF PRESENTATION (Details
BASIS OF PRESENTATION (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Common stock of Amarantus Corporation | $ 15,475 | $ 15,475 | $ 7,500 | ||
Change in unrealized gains on available-for-sale securities, net of | 8,775 | $ (145,100) | 7,975 | $ (286,350) | |
Accumulated deficit | $ (12,380,051) | $ (12,380,051) | (11,799,894) | ||
Loss on other than a temporary decline in fair value of investment | $ (292,500) |
LOSS PER SHARE - Schedule Of In
LOSS PER SHARE - Schedule Of Income Loss per Common Share Exclusions (Details) - shares | Mar. 31, 2017 | Mar. 31, 2016 |
Exclusions - Calcs | ||
Options | ||
Convertible preferred stock | 722,500 | |
Exclusions - Diluted Calcs | ||
Options | 3,542,688 | |
Convertible preferred stock | 722,500 | |
Exclusions - Calcs #2 | ||
Options | 8,955,997 | |
Convertible preferred stock | 8,850,000 | |
Exclusions - Diluted Calcs #2 | ||
Options | 601,239 | |
Convertible preferred stock | 8,850,000 |
DUE FROM RELATED PARTY (Details
DUE FROM RELATED PARTY (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Sep. 30, 2016 | |
Interest income | $ 1,275 | $ 4,175 | |||
Promissory Note 38 | |||||
Date of Note | Dec. 15, 2016 | ||||
Interest rate | 8.00% | 8.00% | |||
Debt Instrument, Principal | $ 64,622 | $ 64,622 | $ 67,268 | ||
Maturity Date | Dec. 15, 2017 | ||||
Conversion Description | The option to convert up $42,500 of the balance owed into 17 Membership Interest Units of PureMed at a conversion price of $2,500 per unit. The note is collateralized by PureMed’s assets. | ||||
Debt Instrument, Accrued Interest | $ 6,813 | 2,646 | |||
Debt Instrument, Balance | $ 7,135 | $ 7,135 | |||
Supply Agmt | |||||
Date of Agreement | Oct. 16, 2016 | ||||
Term of Agreement | 3 years | ||||
Advances to Consultant | $ 64,622 |
LOANS PAYABLE (Details Narrativ
LOANS PAYABLE (Details Narrative) - USD ($) | 6 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Sep. 30, 2016 | |
Loan payable | $ 10,000 | $ 10,000 | |
Loans payable - related parties | 13,009 | ||
Repayments of loans from officers | (13,009) | $ (30,651) | |
Shareholder | |||
Loan payable | 10,000 | ||
Loan payable, balance | 10,000 | ||
Shareholder | |||
Loan payable | 10,000 | ||
Loan payable, balance | $ 10,000 | ||
Chief Executive Officer | |||
Loans payable - related parties | 13,009 | ||
Loan payable, balance | $ 0 |
BRIDGE FINANCING (Details Narra
BRIDGE FINANCING (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Sep. 30, 2016 | |
Accrued expenses other | $ 331,688 | $ 331,688 | $ 230,897 | ||
Interest expense | (4,315) | $ (4,363) | $ (8,726) | $ (8,774) | |
Promissory Note 2 | |||||
Date of Note | Dec. 21, 2011 | ||||
Debt Instrument | $ 150,000 | $ 150,000 | |||
Maturity Date | Jun. 21, 2012 | ||||
Interest Rate | 31.23% | 31.23% | |||
Additional interest rate if late | 10.00% | 10.00% | |||
Debt Instrument, Balance | $ 175,000 | $ 175,000 | 175,000 | ||
Accrued expenses other | $ 83,616 | $ 83,616 | $ 74,890 |
INCOME TAXES - Deferred Tax Ass
INCOME TAXES - Deferred Tax Assets (Details) - USD ($) | Mar. 31, 2017 | Sep. 30, 2016 |
Deferred tax asset attributable to: | ||
Net operating loss carryover | $ 1,738,382 | $ 1,630,872 |
Unrealized loss | 1,193,810 | 1,197,000 |
Stock based compensation | 40,104 | 40,104 |
Accrued expenses | 540,744 | 424,544 |
Total deferred tax assets | 3,513,040 | 3,292,520 |
Valuation allowance | (3,513,040) | (3,292,520) |
Net deferred tax asset |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | 6 Months Ended |
Mar. 31, 2017USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Operating Loss Carryforwards | $ 5,000,000 |
Carryforward Expiration Date | Jan. 1, 2029 |
STOCKHOLDERS DEFICIENCY (Detail
STOCKHOLDERS DEFICIENCY (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Sep. 30, 2016 | |
Series A Preferred Stock, Shares Authorized | 5,500,000 | 5,500,000 | 5,500,000 | ||
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 | ||||
Series A | |||||
Dividends | $ 35,497 | ||||
Dividends payable | $ 428,340 | $ 428,340 | $ 393,037 | ||
Series A Preferred Stock, Issued and outstanding | 885,000 | 885,000 | 885,000 | ||
Series B | |||||
Series B Preferred Stock, Shares Authorized | 4,000,000 | 4,000,000 | |||
Series B Preferred Stock, Outstanding | 0 | 0 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Sep. 30, 2016 | |
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 | ||||
4 Board Members | |||||
Date of Issuance | Jan. 6, 2011 | ||||
Common stock, Issued | 885,672 | 885,672 | |||
Compensation Expense, Recognized | $ 67,895 | 32,365 | |||
Common Stock Option, Exercise Price | $ 0.035 | $ 0.035 | |||
Stock based compensation - general and administrative | $ 0 | $ 67,895 | |||
Date of Expiration | Dec. 31, 2018 |