Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jun. 30, 2019 | Aug. 15, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | Regenicin, Inc. | |
Entity Central Index Key | 0001412659 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-30 | |
Entity File Number | 333-146834 | |
Entity Incorporation State Code | NV | |
Is Entity's Reporting Status Current? | Yes | |
Is Entity's Interactive Data Current? | No | |
Is Entity Emerging Growth Company? | false | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Common Stock, Shares Outstanding | 153,483,050 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2019 |
CONSOLIDATED BALANCE SHEET
CONSOLIDATED BALANCE SHEET - USD ($) | Jun. 30, 2019 | Sep. 30, 2018 |
CURRENT ASSETS | ||
Cash | $ 1,707 | $ 2,702 |
Prepaid expenses and other current assets | 9,844 | 45,281 |
Common stock of Amarantus | 4,850 | 8,450 |
Total current and total assets | 16,401 | 56,433 |
CURRENT LIABILITIES | ||
Accounts payable | 127,689 | 67,532 |
Accrued expenses other | 266,721 | 340,931 |
Accrued salaries officers | 2,723,751 | 2,288,001 |
Note payable insurance financing | 30,429 | 37,800 |
Bridge financing | 175,000 | 175,000 |
Loan payable | 10,000 | 10,000 |
Loans payable officers | 260,568 | 137,222 |
Total current and total liabilities | 3,594,158 | 3,056,486 |
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 | 10,208,339 | 10,177,515 |
Accumulated deficit | (13,940,467) | (13,332,889) |
Accumulated other comprehensive income | 950 | |
Less: treasury stock; 4,428,360 shares at par | (4,428) | (4,428) |
Total stockholders deficiency | (3,577,757) | (3,000,053) |
Total liabilities and stockholders deficiency | $ 16,401 | $ 56,433 |
CONSOLIDATED BALANCE SHEET (Par
CONSOLIDATED BALANCE SHEET (Parenthetical) - $ / shares | Jun. 30, 2019 | Sep. 30, 2018 |
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 | 9 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Statement [Abstract] | ||||
Revenues | ||||
Operating expenses | ||||
General and administrative | 176,234 | 181,937 | 560,563 | 613,389 |
Stock based compensation - general and administrative | 30,824 | |||
Total operating expenses | 176,234 | 181,937 | 591,387 | 613,389 |
Loss from operations | (176,234) | (181,937) | (591,387) | (613,389) |
Other income (expenses) | ||||
Interest expense | (4,362) | (4,451) | (13,541) | (14,371) |
Change in unrealized loss on securities | (2,275) | (3,600) | ||
Total other income (expenses) | (6,637) | (4,451) | (17,141) | (14,371) |
Net loss | (182,871) | 186,388 | (608,528) | (627,760) |
Preferred stock dividends | (17,651) | (17,652) | (52,954) | (52,955) |
Net loss attributable to common stockholders | $ (200,522) | $ (204,040) | $ (661,482) | $ (680,715) |
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 CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS DEFICIENCY - USD ($) | 3 Months Ended | 9 Months Ended | |||||||
Jun. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2019 | Jun. 30, 2018 | |
Convertible Preferred Stock | |||||||||
Balance Beginning, Shares | 885,000 | 885,000 | 885,000 | 885,000 | 885,000 | 885,000 | 885,000 | 885,000 | |
Balance Beginning, Amount | $ 885 | $ 885 | $ 885 | $ 885 | $ 885 | $ 885 | $ 885 | $ 885 | |
Balance Ending, Shares | 885,000 | 885,000 | 885,000 | 885,000 | 885,000 | 885,000 | 885,000 | 885,000 | 885,000 |
Balance Ending, Amount | $ 885 | $ 885 | $ 885 | $ 885 | $ 885 | $ 885 | $ 885 | $ 885 | $ 885 |
Common Stock | |||||||||
Balance Beginning, Shares | 157,911,410 | 157,911,410 | 157,911,410 | 157,911,410 | 157,911,410 | 157,911,410 | 157,911,410 | 157,911,410 | |
Balance Beginning, Amount | $ 157,914 | $ 157,914 | $ 157,914 | $ 157,914 | $ 157,914 | $ 157,914 | $ 157,914 | $ 157,914 | |
Balance Ending, Shares | 157,911,410 | 157,911,410 | 157,911,410 | 157,911,410 | 157,911,410 | 157,911,410 | 157,911,410 | 157,911,410 | 157,911,410 |
Balance Ending, Amount | $ 157,914 | $ 157,914 | $ 157,914 | $ 157,914 | $ 157,914 | $ 157,914 | $ 157,914 | $ 157,914 | $ 157,914 |
Additional Paid-In Capital | |||||||||
Balance Beginning, Amount | 10,208,339 | 10,208,339 | 10,177,515 | 10,177,515 | 10,177,515 | 10,177,515 | 10,177,515 | 10,177,515 | |
Stock compensation expense | 30,824 | ||||||||
Balance Ending, Amount | 10,208,339 | 10,208,339 | 10,208,339 | 10,208,339 | 10,177,515 | 10,177,515 | 10,177,515 | 10,208,339 | 10,177,515 |
Accumulated Deficit | |||||||||
Balance Beginning, Amount | (13,757,596) | (13,579,245) | (13,332,889) | (13,215,203) | (12,981,937) | (12,773,831) | (13,332,889) | (12,773,831) | |
Adoption of ASU | 950 | ||||||||
Net loss | (182,871) | (178,351) | (247,306) | (186,388) | (233,266) | (208,106) | |||
Balance Ending, Amount | (13,940,467) | (13,940,467) | (13,757,596) | (13,579,245) | (13,401,591) | (13,215,203) | (12,981,937) | (13,940,467) | (13,401,591) |
Accumulated Other Comprehensive Income | |||||||||
Balance Beginning, Amount | 950 | 6,625 | 27,750 | 500 | 950 | 500 | |||
Adoption of ASU | (950) | ||||||||
Other comprehensive income (loss) | (3,875) | (21,125) | 27,250 | ||||||
Balance Ending, Amount | 2,750 | 6,625 | 27,750 | 2,750 | |||||
Treasury Stock | |||||||||
Balance Beginning, Amount | (4,428) | (4,428) | (4,428) | (4,428) | (4,428) | (4,428) | (4,428) | (4,428) | |
Balance Ending, Amount | (4,428) | (4,428) | (4,428) | (4,428) | (4,428) | (4,428) | (4,428) | (4,428) | (4,428) |
Balance Beginning, Amount | (3,394,886) | (3,216,535) | (3,000,053) | (2,876,692) | (2,622,301) | (2,441,445) | (3,000,053) | (2,441,445) | |
Stock compensation expense | 30,824 | ||||||||
Other comprehensive income (loss) | (3,875) | (21,125) | 27,250 | ||||||
Net loss | 182,871 | (182,871) | (178,351) | (247,306) | (186,388) | (233,266) | (208,106) | 608,528 | 627,760 |
Balance Ending, Amount | $ (3,577,757) | $ (3,577,757) | $ (3,394,886) | $ (3,216,535) | $ (3,066,955) | $ (2,876,692) | $ (2,622,301) | $ (3,577,757) | $ (3,066,955) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (608,528) | $ (627,760) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Unrealized loss on investment | 3,600 | |
Stock based compensation general and administrative | 30,824 | |
Changes in operating assets and liabilities | ||
Prepaid expenses and other current assets | 35,437 | 50,750 |
Accounts payable | (1) | 15,399 |
Accrued expenses other | (14,052) | 41,645 |
Accrued salaries officers | 435,750 | 435,750 |
Net cash used in operating activities | (116,970) | (84,216) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Repayments of notes payable insurance financing | (7,371) | (33,898) |
Proceeds of loans from officers | 132,075 | 104,108 |
Repayment of loans payable officers | (8,729) | (3,886) |
Net cash provided by financing activities | 115,975 | 66,324 |
NET DECREASE IN CASH | (995) | (17,892) |
CASH - BEGINNING OF PERIOD | 2,702 | 19,201 |
CASH - END OF PERIOD | 1,707 | 1,309 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 453 | |
Cash paid for income taxes |
THE COMPANY
THE COMPANY | 9 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
THE COMPANY | Regenicin, Inc. (“Regenicin”), formerly known as 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. 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 business plan is 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. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Jun. 30, 2019 | |
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 nine months ended June 30, 2019 are not necessarily indicative of the results that may be expected for the year ending September 30, 2019. 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, 2018, 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, as of June 30, 2019, has an accumulated deficit of approximately $13.9 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. 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: As of October 1, 2018, the Company adopted 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 no longer is 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. As a result of the adoption, the Company recorded a cumulative effect adjustment of a $950 decrease to accumulated other comprehensive income, and a corresponding decrease to accumulated deficit, as of October 1, 2018. Common stock of Amarantus is 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, and unrealized gains and losses are 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, 2019 is $4,850. The change in unrealized loss for the nine and three months ended June 30, 2019 was $3,600 and $2,275, net of income taxes, respectively, and was reported as other income (expense). The change in unrealized gain (loss) for the nine and three months ended June 30, 2018 was $2,250 and $(3,875), net of income taxes, respectively, and was reported as a component of comprehensive income (loss). Recently Issued Accounting Pronouncements: Any 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
LOSS PER SHARE | 9 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
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 three and nine months ended June 30, 2019 and 2018, as the exercise price was greater than the average market price of the common shares: 2019 2018 Warrants — 390,000 Options 1,771,344 — The following securities have been excluded from the calculation even though the exercise price was less than the average 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 three and nine months ended June 30, 2019 and 2018: 2019 2018 Options 4,051,465 9,270,817 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. |
LOANS PAYABLE
LOANS PAYABLE | 9 Months Ended |
Jun. 30, 2019 | |
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, 2019 and September 30, 2018, the loan payable totaled $10,000. Loans Payable - Officer: Loans payable - officer consists of the following: Through September 2018, John Weber, the Company’s Chief Financial Officer, made advances to the Company totaling $105,858. From October 2018 through June 2019 he advanced an additional $123,275. The loans do not bear interest and are due on demand. Through September 2018, J. Roy Nelson, the Company’s Chief Science Officer, made net advances to the Company totaling $26,864. From October 2018 through June 2019 he made additional advances of $8,800 and was repaid $8,729 for a net increase of $71. The loans do not bear interest and are due on demand. In September 2018, Randall McCoy, the Company’s Chief Executive Officer, made an advance to the Company of $4,500. The loan does not bear interest and is due on demand. |
BRIDGE FINANCING
BRIDGE FINANCING | 9 Months Ended |
Jun. 30, 2019 | |
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. 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 June 30, 2019 and September 30, 2018, the note balance was $175,000. Interest expense was $13,089 for both the nine months ended June 30, 2019 and 2018. Interest expense was $4,363 for both the three months ended June 30, 2019 and 2018. Accrued interest on the note was $122,977 and $109,888 as of June 30, 2019 and September 30, 2018, respectively and is included in accrued expenses in the accompanying balance sheet. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | The Company recorded no income tax expense for the three and nine months ended June 30, 2019 and 2018 because the estimated annual effective tax rate was zero. As of June 30, 2019, the Company continues to provide a valuation allowance against its net deferred tax assets since the Company believes it is more likely than not that its deferred tax assets will not be realized. In December 2017, the United States Government passed new tax legislation that, among other provisions, lowered the federal corporate tax rate from 35% to 21%. In addition to applying the new lower corporate tax rate to any taxable income the Company may have the legislation affects the way the Company can use and carryforward net operating losses and results in a revaluation of deferred tax assets and liabilities recorded on its balance sheet. Given that current deferred tax assets are offset by a full valuation allowance, these changes have no net impact on the balance sheet. However, if the Company becomes profitable, they will receive a reduced benefit from such deferred tax assets. At both June 30, 2019 and September 30, 2018, 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, 2019, and September 30, 2018 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 tax years ended September 30, 2015 through September 30, 2018 generally remain subject to examination by federal tax authorities. |
STOCKHOLDERS DEFICIENCY
STOCKHOLDERS DEFICIENCY | 9 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
STOCKHOLDERS DEFICIENCY | Preferred Stock: Series A At both June 30, 2019 and September 30, 2018, 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 June 30, 2019 and September 30, 2018 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. There have been no new developments related to the remaining Series A holders regarding this claim and the conversion 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 June 30, 2019, and September 30, 2018, dividends in arrears were $587,591 ($.66 per share) and $534,637 ($.60 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 June 30, 2019, no shares of Series B Preferred are outstanding. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Jun. 30, 2019 | |
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, as extended, on December 31, 2018. Effective as of the expiration date, the Company extended the term of those options for two of the directors to December 31, 2023. 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 $1,316 in compensation expense, which is included in the results of operations for the nine months ended June 30, 2019. 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 25.54%, risk free rate of 2.51% and expected term of 5 years. On January 15, 2015, the Company approved the issuance of 10,000,000 options to one of its Officers at an exercise price of $0.02, per share that were set to expire on January 15, 2019. Effective December 31, 2018, the Company extended the term of those options to December 31, 2023. 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 $29,508 in compensation expense, which is included in the results of operations for the nine months ended June 30, 2019. 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 $0.02, expected volatility of 25.54%, risk free rate of 2.51% and expected term of 5 years. Stock-based compensation is included as a separate line item in operating expenses in the accompanying consolidated statement of operations. |
LICENSE RIGHTS
LICENSE RIGHTS | 9 Months Ended |
Jun. 30, 2019 | |
Notes to Financial Statements | |
SALE OF ASSET | On November 7, 2014, the Company entered into a Sale Agreement, as amended on January 30, 2015, as discussed in the Company’s Form 10-K for the year ended September 30, 2018, with Amarantus BioScience Holdings, Inc. (“Amarantus”). See Note 1. As part of the Sale Agreement, the Company 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 June 30, 2019, the option has not been exercised. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Jun. 30, 2019 | |
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 officer of the Company is an owner of CPR. No rent is charged for the 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. See Note 4 for loans payable to related parties. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Jun. 30, 2019 | |
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, 2019 | |
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, 2019 are not necessarily indicative of the results that may be expected for the year ending September 30, 2019. 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, 2018, 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 $13.9 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. 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. |
Income 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 three and nine months ended June 30, 2019 and 2018, as the exercise price was greater than the average market price of the common shares: 2019 2018 Warrants — 390,000 Options 1,771,344 — The following securities have been excluded from the calculation even though the exercise price was less than the average 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 three and nine months ended June 30, 2019 and 2018: 2019 2018 Options 4,051,465 9,270,817 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. |
Financial Instruments and Fair Value Measurement | As of October 1, 2018, the Company adopted 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 no longer is 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. As a result of the adoption, the Company recorded a cumulative effect adjustment of a $950 decrease to accumulated other comprehensive income, and a corresponding decrease to accumulated deficit, as of October 1, 2018. Common stock of Amarantus 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, and unrealized gains and losses are 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, 2019 is $4,850. The unrealized loss for the nine and three months ended June 30, 2019 was $3,600 and $2,275, net of income taxes, respectively, and was reported as other income (expense). The unrealized gain (loss) for the nine and three months ended June 30, 2018 was $2,250 and $(3,875), net of income taxes, respectively, and was reported as a component of comprehensive income (loss). |
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, as extended, on December 31, 2018. Effective as of the expiration date, the Company extended the term of those options for two of the directors to December 31, 2023. 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 $1,316 in compensation expense, which is included in the results of operations for the nine months ended June 30, 2019. 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 25.54%, risk free rate of 2.51% and expected term of 5 years. On January 15, 2015, the Company approved the issuance of 10,000,000 options to one of its Officers at an exercise price of $0.02, per share that were set to expire on January 15, 2019. Effective December 31, 2018, the Company extended the term of those options to December 31, 2023. 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 $29,508 in compensation expense, which is included in the results of operations for the nine months ended June 30, 2019. 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 $0.02, expected volatility of 25.54%, risk free rate of 2.51% and expected term of 5 years. Stock-based compensation is included as a separate line item in operating expenses in the accompanying consolidated statement of operations. |
Recently Issued Accounting Pronouncements | Any recent pronouncements issued by the FASB or other authoritative standards groups with future effective dates are either not applicable or are not expected to be significant to the consolidated financial statements of the Company. |
LOSS PER SHARE (Tables)
LOSS PER SHARE (Tables) | 9 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Income Loss per Common Share Exclusions #1 | 2019 2018 Warrants — 390,000 Options 1,771,344 — |
Schedule of Income Loss per Common Share Exclusions #2 | 2019 2018 Options 4,051,465 9,270,817 Convertible Preferred Stock 8,850,000 8,850,000 |
THE COMPANY (Details Narrative)
THE COMPANY (Details Narrative) | 9 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Date of Incorporation | Sep. 6, 2007 |
State of Incorporation | NV |
BASIS OF PRESENTATION (Details
BASIS OF PRESENTATION (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Sep. 30, 2018 | |
Basis Of Presentation | |||||
Common stock of Amarantus Corporation | $ 4,850 | $ 4,850 | $ 8,450 | ||
Unrealized gain (loss) on securities | (2,275) | (3,600) | |||
Accumulated deficit | $ (13,940,467) | $ (13,940,467) | $ (13,332,889) |
LOSS PER SHARE - Schedule Of In
LOSS PER SHARE - Schedule Of Income Loss per Common Share Exclusions (Details) - shares | Jun. 30, 2019 | Jun. 30, 2018 |
Exclusions - Calcs | ||
Warrants | ||
Options | 1,771,344 | |
Exclusions - Diluted Calcs | ||
Warrants | 390,000 | |
Options | ||
Exclusions - Calcs #2 | ||
Options | 4,051,465 | |
Convertible preferred stock | 8,850,000 | |
Exclusions - Diluted Calcs #2 | ||
Options | 9,270,817 | |
Convertible preferred stock | 8,850,000 |
LOANS PAYABLE (Details Narrativ
LOANS PAYABLE (Details Narrative) - USD ($) | 9 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Sep. 30, 2018 | |
Loan payable | $ 10,000 | $ 10,000 | |
Loans payable - related parties | 260,568 | 137,222 | |
Repayments of loans from officers | 132,075 | $ 104,108 | |
Shareholder | |||
Loan payable | 10,000 | 10,000 | |
Loan payable, balance | 4,500 | ||
CFO | |||
Loans payable - related parties | 123,275 | 105,858 | |
CSO | |||
Loans payable - related parties | 8,800 | $ 26,864 | |
Repayments of loans from officers | $ 8,729 |
BRIDGE FINANCING (Details Narra
BRIDGE FINANCING (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Sep. 30, 2018 | |
Accrued expenses other | $ 266,721 | $ 266,721 | $ 340,931 | ||
Interest expense | (4,362) | $ (4,451) | $ (13,541) | $ (14,371) | |
Promissory Note 2 | |||||
Date of Note | Dec. 21, 2011 | ||||
Debt Instrument | $ 150,000 | $ 150,000 | |||
Maturity Date | Jun. 21, 2012 | ||||
Additional interest rate if late | 10.00% | 10.00% | |||
Debt Instrument, Balance | $ 175,000 | $ 175,000 | 175,000 | ||
Accrued expenses other | $ 122,977 | 122,977 | $ 109,888 | ||
Interest expense | $ 4,363 | $ 4,363 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | 3 Months Ended | 9 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Statutory federal income tax rate | 21.00% | 21.00% |
STOCKHOLDERS DEFICIENCY (Detail
STOCKHOLDERS DEFICIENCY (Details Narrative) - USD ($) | 9 Months Ended | ||
Jun. 30, 2019 | Sep. 30, 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 | $ 587,591 | $ 534,637 | |
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 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Sep. 30, 2018 | |
Common stock, Issued | 157,911,410 | 157,911,410 | 157,911,410 | ||
Stock based compensation - general and administrative | $ 30,824 | ||||
Board Members | |||||
Date of Issuance | Jan. 6, 2011 | ||||
Common stock, Issued | 885,672 | 885,672 | |||
Common Stock Option, Exercise Price | $ 0.035 | $ 0.035 | |||
Stock based compensation - general and administrative | $ 1,316 | ||||
Date of Expiration | Dec. 31, 2018 | ||||
Stock Option Agreement | |||||
Stock based compensation - general and administrative | $ 29,508 | ||||
Date of Expiration | Jan. 15, 2019 | ||||
Date of Agreement | Jan. 15, 2015 | ||||
Options | 10,000,000 | ||||
Exercise price | $ 0.02 |
LICENSE RIGHTS (Details Narrati
LICENSE RIGHTS (Details Narrative) - Sale Agmt Amendment | 9 Months Ended |
Jun. 30, 2019USD ($) | |
Date of Agreement | Jan. 30, 2015 |
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. |