Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Mar. 31, 2018 | May 21, 2018 | |
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, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-30 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 153,483,050 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,018 |
CONSOLIDATED BALANCE SHEET
CONSOLIDATED BALANCE SHEET - USD ($) | Mar. 31, 2018 | Sep. 30, 2017 |
CURRENT ASSETS | ||
Cash | $ 2,111 | $ 19,201 |
Prepaid expenses and other current assets | 21,655 | 60,592 |
Common stock of Amarantus Corporation | 14,125 | 8,000 |
Total current assets | 37,891 | 87,793 |
Total assets | 37,891 | 87,793 |
CURRENT LIABILITIES | ||
Accounts payable | 296,360 | 280,961 |
Accrued expenses - other | 314,493 | 298,476 |
Accrued salaries - officers | 1,997,501 | 1,707,001 |
Note payable - insurance financing | 15,521 | 37,800 |
Bridge financing | 175,000 | 175,000 |
Loan payable | 10,000 | 10,000 |
Loans payable - officer | 105,708 | 20,000 |
Total current and total liabilities | 2,914,583 | 2,529,238 |
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 | (13,215,203) | (12,773,831) |
Accumulated other comprehensive income | 6,625 | 500 |
Less: treasury stock; 4,428,360 shares at par | (4,428) | (4,428) |
Total stockholders deficiency | (2,876,692) | (2,441,445) |
Total liabilities and stockholders deficiency | $ 37,891 | $ 87,793 |
CONSOLIDATED BALANCE SHEET (Par
CONSOLIDATED BALANCE SHEET (Parenthetical) - $ / shares | Mar. 31, 2018 | Sep. 30, 2017 |
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, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||||
Revenues | ||||
Operating expenses | ||||
Research and development | 5,284 | |||
General and administrative | 228,413 | 295,295 | 431,452 | 585,322 |
Total operating expenses | 228,413 | 295,295 | 431,452 | 590,606 |
Operating loss before other operating income | (228,413) | (295,295) | (431,452) | (590,606) |
Other operating income - reversal of accounts payable | 15,000 | |||
Loss from operations | (228,413) | (295,295) | (431,452) | (575,606) |
Other income (expenses) | ||||
Interest expense | (4,853) | (4,315) | (9,920) | (8,726) |
Interest income | 1,275 | 4,175 | ||
Total other income (expenses) | (4,853) | (3,040) | (9,920) | (4,551) |
Net loss | (233,266) | (298,335) | 441,372 | 580,157 |
Preferred stock dividends | (17,458) | (17,458) | (35,303) | (35,303) |
Net loss attributable to common stockholders | $ (250,724) | $ (315,793) | $ (476,675) | $ (615,460) |
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, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Consolidated Statements Of Comprehensive Income Loss | ||||
Net loss | $ (233,266) | $ (298,335) | $ 441,372 | $ 580,157 |
Other comprehensive income (loss): | ||||
Change in unrealized gain (loss) on available-for-sale securities, net of income taxes | (21,125) | 8,775 | 6,125 | 7,975 |
Comprehensive loss | $ (254,391) | $ (289,560) | $ (435,247) | $ (572,182) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (441,372) | $ (580,157) |
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 | 8,726 |
Reversal of accounts payable | (15,000) | |
Changes in operating assets and liabilities | ||
Prepaid expenses and other current assets | 38,937 | 25,255 |
Accounts payable | 15,399 | 17,006 |
Accrued expenses | 7,291 | 92,065 |
Accrued salaries - officers | 290,500 | 290,500 |
Net cash used in operating activities | (80,519) | (165,772) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from loans from officers | 85,708 | |
Repayments of notes payable - insurance financing | (22,279) | |
Repayment of loans from officers | (13,009) | |
Net cash provided by (used in) financing activities | 63,429 | (13,009) |
NET DECREASE IN CASH | (17,090) | (178,781) |
CASH - BEGINNING OF PERIOD | 19,201 | 218,847 |
CASH - END OF PERIOD | 2,111 | 40,066 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | ||
Cash paid for taxes | $ 1,000 |
THE COMPANY
THE COMPANY | 6 Months Ended |
Mar. 31, 2018 | |
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, 2018 | |
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 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, 2018 are not necessarily indicative of the results that may be expected for the year ending September 30, 2018. 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, 2017, 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 $13.2 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 Asset Sale. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The Company used the proceeds from the Asset Sale to fund operations. Currently 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 March 31, 2018 and September 30, 2017 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, 2018 is $14,125. The unrealized gain (loss) for the six and three months ended March 31, 2018 was $6,125 and $(21,125), net of income taxes, respectively, and was reported as a component of comprehensive loss. 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 also reported as a component of comprehensive loss. Recently Issued Accounting 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, and early adoption of certain items is permitted. The Company is currently evaluating the impact of adopting this guidance. 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 consolidated financial statements of the Company. |
DUE FROM RELATED PARTY
DUE FROM RELATED PARTY | 6 Months Ended |
Mar. 31, 2018 | |
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 CEO and CFO 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 would be reimbursed by PureMed. 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 $7,308 was repaid in full in May 2017. |
LOANS PAYABLE
LOANS PAYABLE | 6 Months Ended |
Mar. 31, 2018 | |
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, 2018 and September 30, 2017, the loan payable totaled $10,000. Loans Payable - Officer: In September 2017, John Weber, the Company’s Chief Financial Officer, made an advance to the Company of $10,000. From November 2017 through March 2018 additional advances were made totaling $80,958. The loans do not bear interest and are due on demand. In September 2017, J. Roy Nelson, the Company’s Chief Science Officer, made an advance to the Company of $10,000. From November 2017 through March 2018 additional advances totaling $4,750 were made. The loans do not bear interest and are due on demand. |
BRIDGE FINANCING
BRIDGE FINANCING | 6 Months Ended |
Mar. 31, 2018 | |
Bridge Financing | |
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 as described above. At both March 31, 2018 and September 30, 2017, the note balance was $175,000. Interest expense was $8,726 for both the six months ended March 31, 2018 and 2017. Interest expense was $4,315 for both the three months ended March 31, 2018 and 2017. Accrued interest on the note was $101,116 and $92,389 as of March 31, 2018 and September 30, 2017, respectively and is included in accrued expenses in the accompanying balance sheet. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | The Company did not incur current tax expense for the six months ended March 31, 2018 and 2017. At March 31, 2018, the Company had available approximately $4.6 million of net operating loss carry forwards (“NOLs”) which expire in the years 2029 through 2037. However, the use of the NOLs 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. On December 22, 2017, new tax legislation came into effect. The provisions are generally effective for years beginning on or after January 1, 2018. The most impactful item to the Company in the new law is the change in tax rate from 34% to 21%. This will reduce the gross deferred tax assets prior to existing full valuation allowance from an effective rate of 40% to an effective rate of 27%. The provision and disclosures for the period ended March 31, 2018 reflect the new tax legislation. Significant components of the Company’s deferred tax assets at March 31, 2018 and September 31, 2017 are as follows: March 31, 2018 September 30, 2017 Net operating loss carry forwards $ 1,240,222 $ 1,780,508 Unrealized loss 807,975 1,197,000 Stock based compensation 27,070 40,104 Accrued expenses 539,325 686,800 Total deferred tax assets 2,614,592 3,704,412 Valuation allowance (2,614,592 ) (3,704,412 ) 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, 2018 and September 30, 2017, 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, 2018, and September 30, 2017 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 2014 through 2017 tax years generally remain subject to examination by federal tax authorities. |
STOCKHOLDERS DEFICIENCY
STOCKHOLDERS DEFICIENCY | 6 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
STOCKHOLDERS (DEFICIENCY) | Preferred Stock: Series A At both March 31, 2018 and September 30, 2017, 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 has a liquidation preference equal to the stated value of the shares ($885,000 liquidation preference as of March 31, 2018 and September 30, 2017 plus dividends in arrears as per below). Each share of Series A Preferred Stock has an initial stated value of $1 and is convertible into shares of the Company’s common stock at the rate of 10 for 1. The Series A Preferred Stock was marketed through a private placement memorandum that included a reference to a ratchet provision which would have allowed the holders of the stock to claim a better conversion rate based on other stock transactions conducted by the Company during the three-year period following the original issuance of the shares. The Certificate of Designation does not contain a ratchet provision. Certain of the stock related transactions consummated by the Company during this time period may have triggered this ratchet provision, and thus created a claim by holders of the Series A Preferred Stock who purchased based on this representation for a greater conversion rate than initially provided. The Company is currently negotiating with some of the remaining Series A holders regarding this claim and their conversation rate of their Series A Preferred Stock. Changes to the preferred stock conversion ratio may result in modification or extinguishment accounting. That may result in a deemed preferred stock dividend which would reduce net income available to common stockholders in the calculation of earnings per share. Certain of the smaller Series A holders have already converted or provided notice of conversion of their shares. In respect of this claim, the Company and its outside counsel determined that it is not possible to offer an opinion regarding the outcome. An adverse outcome could materially increase the accumulated deficit. The dividends are cumulative commencing on the issue date when and if declared by the Board of Directors. As of March 31, 2018, and September 30, 2017, dividends in arrears were $499,140 ($.56 per share) and $463,837 ($.52 per share), respectively. 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, 2018, no shares of Series B Preferred are outstanding. |
SALE OF ASSET
SALE OF ASSET | 6 Months Ended |
Mar. 31, 2018 | |
Notes to Financial Statements | |
SALE OF ASSET | On November 7, 2014, the Company entered into a Sale Agreement, as amended on January 30, 2015, with Amarantus. See Note 1. Under the Sale Agreement, the Company 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 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. As of March 31, 2018, the option has not been exercised. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | The Company’s 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. 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. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Mar. 31, 2018 | |
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, 2018 | |
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 six months ended March 31, 2018 are not necessarily indicative of the results that may be expected for the year ending September 30, 2018. 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, 2017, 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 $13.2 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 Asset Sale. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The Company used the proceeds from the Asset Sale to fund operations. Currently 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 March 31, 2018 and September 30, 2017 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, 2018 is $14,125. The unrealized gain (loss) for the six and three months ended March 31, 2018 was $6,125 and $(21,125), net of income taxes, respectively, and was reported as a component of comprehensive loss. 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 also reported as a component of comprehensive loss. |
Recently Issued Accounting 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, and early adoption of certain items is permitted. The Company is currently evaluating the impact of adopting this guidance. 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 consolidated financial statements of the Company. |
LOSS PER SHARE (Tables)
LOSS PER SHARE (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Income Loss per Common Share Exclusions | 2018 2017 Warrants 722,500 722,500 |
Schedule of Income Loss per Common Share Exclusions | 2018 2017 Options 9,927,819 8,955,998 Convertible Preferred Stock 8,850,000 8,850,000 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Tax Assets | March 31, 2018 September 30, 2017 Net operating loss carry forwards $ 1,240,222 $ 1,780,508 Unrealized loss 807,975 1,197,000 Stock based compensation 27,070 40,104 Accrued expenses 539,325 686,800 Total deferred tax assets 2,614,592 3,704,412 Valuation allowance (2,614,592 ) (3,704,412 ) Net deferred tax assets $ — $ — |
THE COMPANY (Details Narrative)
THE COMPANY (Details Narrative) | 6 Months Ended |
Mar. 31, 2018USD ($) | |
Date of Incorporation | Sep. 6, 2007 |
State of Incorporation | Nevada |
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 | |||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Sep. 30, 2017 | |
Basis Of Presentation Details Narrative | |||||
Common stock of Amarantus Corporation | $ 14,125 | $ 14,125 | $ 8,000 | ||
Change in unrealized gain (loss) on available-for-sale securities, net of income taxes | (21,125) | $ 8,775 | 6,125 | $ 7,975 | |
Accumulated deficit | $ (13,215,203) | $ (13,215,203) | $ (12,773,831) |
LOSS PER SHARE - Schedule Of In
LOSS PER SHARE - Schedule Of Income Loss per Common Share Exclusions (Details) - shares | Mar. 31, 2018 | Mar. 31, 2017 |
Exclusions - Calcs | ||
Warrants | 722,500 | |
Exclusions - Diluted Calcs | ||
Warrants | 722,500 | |
Exclusions - Calcs #2 | ||
Options | 9,927,819 | |
Convertible preferred stock | 8,850,000 | |
Exclusions - Diluted Calcs #2 | ||
Options | 8,955,998 | |
Convertible preferred stock | 8,850,000 |
DUE FROM RELATED PARTY (Details
DUE FROM RELATED PARTY (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Interest income | $ (1,275) | $ (4,175) | ||
Supply Agmt | ||||
Date of Agreement | Oct. 16, 2016 | |||
Term of Agreement | 3 years | |||
Advances to Consultant | $ 64,622 | $ 64,622 | ||
Interest rate | 8.00% | 8.00% | ||
Maturity Date | Dec. 31, 2017 | |||
Debt Instrument, Balance | $ 0 | $ 0 |
LOANS PAYABLE (Details Narrativ
LOANS PAYABLE (Details Narrative) - USD ($) | 6 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Sep. 30, 2017 | |
Loan payable | $ 10,000 | $ 10,000 | |
Loans payable - related parties | 105,708 | 20,000 | |
Repayments of loans from officers | 85,708 | ||
Shareholder | |||
Loan payable | 10,000 | 10,000 | |
Loan payable, balance | 10,000 | $ 10,000 | |
CFO | |||
Loans payable - related parties | 80,958 | ||
CSO | |||
Loans payable - related parties | $ 4,750 |
BRIDGE FINANCING (Details Narra
BRIDGE FINANCING (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Sep. 30, 2017 | |
Accrued expenses other | $ 314,493 | $ 314,493 | $ 298,476 | ||
Interest expense | 4,853 | $ 4,315 | $ 9,920 | $ 8,726 | |
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 | 101,116 | 101,116 | $ 92,389 | ||
Interest expense | $ (4,315) | $ (4,315) | $ (8,726) | $ (8,726) |
INCOME TAXES - Schedule of Defe
INCOME TAXES - Schedule of Deferred Tax Assets (Details) - USD ($) | Mar. 31, 2018 | Sep. 30, 2017 |
Deferred tax asset attributable to: | ||
Net operating loss carryover | $ 1,240,222 | $ 1,780,508 |
Unrealized loss | 807,975 | 1,197,000 |
Stock based compensation | 27,070 | 40,104 |
Accrued expenses | 539,325 | 686,800 |
Total deferred tax assets | 2,614,592 | 3,704,412 |
Valuation allowance | (2,614,592) | (3,704,412) |
Net deferred tax asset |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | 6 Months Ended |
Mar. 31, 2018USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Operating Loss Carryforwards | $ 4,600,000 |
Carryforward Expiration Date | Jan. 1, 2029 |
Statutory federal income tax rate | 21.00% |
Adjustment of valuation allowance | 27.00% |
STOCKHOLDERS DEFICIENCY (Detail
STOCKHOLDERS DEFICIENCY (Details Narrative) - USD ($) | 6 Months Ended | |
Mar. 31, 2018 | Sep. 30, 2017 | |
Series A Preferred Stock, Issued and outstanding | 885,000 | 885,000 |
Series A | ||
Dividend per annum | 8.00% | |
Dividend Stated Value, Description | Each share of Preferred Stock has an initial stated value of $1 and is convertible into shares of the Company’s common stock at the rate of 10 for 1. | |
Dividends payable | $ 499,140 | $ 463,837 |
Series A Preferred Stock, Issued and outstanding | 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 |
Series B Preferred Stock, Liquidation Preference | $ 2 | $ 2 |
SALE OF ASSET (Details Narrativ
SALE OF ASSET (Details Narrative) | 6 Months Ended |
Mar. 31, 2018USD ($) | |
Sale Agreement | |
Date of Agreement | Nov. 7, 2014 |
Option to License IP, Term | 5 years |
Option to License IP, Cost | $ 10,000,000 |
Option to License IP, Description | 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. |
Sale Agmt Amendment | |
Date of Agreement | Jan. 30, 2015 |