September 11, 2007
Remitted Via EDGAR
Mr. Daniel F. Gordon, Esq.
Branch Chief
Mr. William Demarest, C.P.A.
Division of Corporation Finance
Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
RE: Your Letter of September 5, 2007
Bio-Matrix Scientific Group, Inc.
File No. 0-32201; 2006 Form 10-KSB
Gentlemen:
We received your letter ("Letter") regarding our response to your comments
concerning the Form 10-KSB as filed for Bio-Matrix Scientific Group, Inc., a
Delaware corporation (the "Company") for the period ending September 30, 2006.
In accordance with your request, our responses are numbered in a manner that
corresponds with your comments.
ITEM 7, FINANCIAL STATEMENTS, PAGE 13
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The Company respectfully disagrees with the Commission's belief that:
(a) the Company had ignored four of the five factors to be considered in
particular in identifying the acquiring entity in a combination
effected through an exchange of equity interests
The Company is not of the belief that it had ignored four of the five
aforementioned factors. As agreed in the Letter, there is no requirement under
SFAS 141 to assign equal weight to the five factors, as well as any other
pertinent factors which may be taken into consideration.
The Company determined that since the market value of the stock issued to the
seller represented such a large premium over the value of the acquired entity it
was proper to assign a weight to that factor higher than the combined weight
assigned to all other factors considered in determining the acquiring entity for
accounting purposes. The Company is unaware of any prohibition in SFAS 141 to
the assigning of a weight to a specific factor greater than the combined weights
of all other factors considered in determining the acquiring entity for
accounting purposes.
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(b) the Company had assigned an inappropriate weight to the quoted price
of the Tasco Holdings International, Inc. stock issued in the
acquisition.
The Commission has stated in its Letter that it believes that no premium was
paid by the Company in its acquisition of Bio-Matrix Scientific Group, Inc., a
Nevada corporation ("BMSG") and that it was erroneous for the Company to rely on
the quoted market price of its common stock at the time in determining that a
premium was paid. The Commission also offers the following arguments to support
its belief of the above.
(i) "The Tasco stock was quoted on the over the counter bulletin boards
and such quotes represent inter-dealer quotations without retail
markup, markdown or commission and do not necessarily represent actual
transactions"
(ii) "The Tasco shares had no intrinsic value at the time as the company
had no assets or operations"
In response to (i) above, the calculation of the premium was based on actual
trades reported on the over the counter bulletin board representing actual
transactions between willing parties, not solely on reported bids or offers.*
Also, the Company would like to call the Commission's attention to Footnote 9 to
paragraph 17(e) of SFAS 141** (referring to premiums based on the market value
of equity securities issued) which do not imply any bias against inter dealer
quotation systems.
In response to (ii) above, the Company feels that its "intrinsic value" at the
time of acquisition is not applicable in determining the cost of the transaction
as it was the shares of stock which were issued to the seller as consideration,
the fair market value of which more accurately reflect the cost of the
transaction.
In conclusion, the Company still believes that it has made no errors in arriving
at its conclusions regarding the accounting treatment of the acquisition of
BMSG.
Note 14, subsequent events, page 28
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Note 14 relates to loans from a specific lender, Bio-Technology Business
Partners Trust, that were satisfied by the issuance of 1,391,935 shares of the
Company's Common Stock on December 5, 2006.
As of December 5, 2006, a total of $246,744 was owed Bio- Technology Business
Partners Trust. Of this total, $138,752 was outstanding as of September 30, 2006
and was reflected in the Company's balance sheet as of September 30, 2006.
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Between October 5 and November 9, 2006, Bio-Technology Business Partners Trust
loaned an additional $109,922 to the Company resulting in the total amount owed
of $246,744.
The Notes Payable shown on the Company's balance sheet as of September 30, 2006
of $148,952 consisted of $138,752 owed to Bio-Technology Business Partners Trust
plus $10,200 owed to other lenders.
Total amounts outstanding due and payable to Bio- Technology Business Partners
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Trust as of December 5, 2006
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Due Date Amount
23-Aug-07 $ 23,683.00
24-Aug-07 $ 16,667.21
30-Aug-07 $ 7,077.59
30-Aug-07 $ 26,122.00
5-Sep-07 $ 787.50
7-Sep-07 $ 7,269.87
12-Sep-07 $ 1,900.00
13-Sep-07 $ 12,085.72
13-Sep-07 $ 6,128.93
21-Sep-07 $ 2,200.00
28-Sep-07 $ 6,075.50
28-Sep-07 $ 28,754.53
5-Oct-07 $ 23,751.63
11-Oct-07 $ 14,000.00
11-Oct-07 $ 6,120.57
12-Oct-07 $ 982.12
18-Oct-07 $ 7,186.15
8-Nov-07 $ 52,051.90
9-Nov-07 $ 3,900.00
Total $246,744.22
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Total amounts outstanding to Bio- Technology Business Partners Trust as of
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September 30, 2006.
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Due Date Amount
23-Aug-07 $ 23,683.00
24-Aug-07 $ 16,667.21
30-Aug-07 $ 7,077.59
30-Aug-07 $ 26,122.00
5-Sep-07 $ 787.50
7-Sep-07 $ 7,269.87
12-Sep-07 $ 1,900.00
13-Sep-07 $ 12,085.72
13-Sep-07 $ 6,128.93
21-Sep-07 $ 2,200.00
28-Sep-07 $ 6,075.50
28-Sep-07 $ 28,754.53
Total $138,751.85
CONCLUSION
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Thank you for your kind assistance and the courtesies that you have extended to
assist us in fulfilling our obligations under the Securities Exchange Act of
1934. If, at any time, you have any further questions, please let us know.
Sincerely,
/s/ David R. Koos
David R. Koos, Ph.D.
Chairman & CEO
*Fair value is defined in the glossary to SFAS 141 as "The amount at which an
asset (or liability) could be bought (or incurred) or sold (or settled) in a
current transaction between willing parties, that is, other than in a forced or
liquidation sale."
**"This criterion shall apply only if the equity securities exchanged in a
business combination are traded in a public market on either (a) a stock
exchange (domestic or foreign) or (b) in an over-the-counter market (including
securities quoted only locally or regionally)."
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