Attached files
file | filename |
---|---|
EX-31.1 - RegenoCELL Therapeutics, Inc. | v166190_ex31-1.htm |
EX-32.1 - RegenoCELL Therapeutics, Inc. | v166190_ex32-1.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
x QUARTERLY REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
For the
quarterly period ended September 30, 2009
¨ TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
For the
transition period from ________________to
Commission
File Number: 000-50639
REGENOCELL THERAPEUTICS,
INC.
(Exact
name of registrant as specified in its charter)
Florida
|
22-3880440
|
(State
or other jurisdiction of incorporation
|
(I.R.S.
Employer Identification No.)
|
or
organization)
|
2 Briar
Lane
Natick,
Massachusetts 01760
(Address
of Principal Executive Offices)
(508)
647-4065
(Registrant's
telephone number, including area code)
Check
whether the registrant (1) has filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act during the past
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes x No
¨
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer”,
“accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the
Exchange Act. Yes x No
¨
Large Accelerated
filer ¨
Accelerated filer ¨
Non-accelerated filer (Do not
check Smaller
reporting company x
if a smaller reporting company) ¨
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes ¨ No
x
Indicate
the number of shares outstanding of the registrant's common stock, par value
$0.0001 per share, outstanding as of the latest practical date. 131,437,500
shares of common stock outstanding as of November 10, 2009.
REGENOCELL
THERAPEUTICS, INC.
Quarterly
Report on Form 10-Q
For
the Quarterly Period Ended September 30, 2009
FORWARD-LOOKING
STATEMENTS
This Form
10-Q for the quarterly period ended September 30, 2009 contains forward-looking
statements that involve risks and uncertainties. Forward-looking
statements in this document or incorporated herein by reference that are not
related to historical results are “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995.
Statements
that are predictive, that depend upon or refer to future events or conditions,
and/or that include words such as “expects,” “anticipates,” “intends,” “plans,”
“believes,” “estimates,” “hopes,” and similar expressions constitute
forward-looking statements. In addition, any statements concerning future
financial performance (including future revenues, earnings or growth rates),
business strategies or prospects, or possible future actions by us are also
forward-looking statements.
These
forward-looking statements are based on beliefs of our management as well as
current expectations, projections, assumptions and information currently
available to the Company and are subject to certain risks and uncertainties that
could cause actual results to differ materially from historical results or those
anticipated or implied by such forward-looking statements. In
evaluating these statements, you should consider various factors including the
assumptions, risks and uncertainties set forth in our Annual Report on Form 10-K
for the year ended December 31, 2008 and other reports and documents we have
filed with or furnished to the Securities and Exchange
Commission. Should one or more of those risks or uncertainties
materialize or should underlying expectations, projections and assumptions prove
incorrect, actual results may vary materially from those
described. Those events and uncertainties are difficult to predict
accurately and many are beyond our control. The Company assumes no obligation to
update these forward-looking statements to reflect events or circumstances that
occur after the date of these statements except as specifically required by
law. Accordingly, past results and trends should not be used to
anticipate future results or trends.
2
INDEX
Part
I— FINANCIAL INFORMATION
|
|
Item
1. Interim Financial Statements and Notes – Quarter Ended September 30,
2009
|
4
|
Item
2. Management’s Discussion and Analysis or Plan of
Operations
|
14 |
Item
3. Controls and Procedures
|
19 |
Part
II— OTHER INFORMATION
|
|
Item
1. Legal Proceedings
|
19 |
Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds
|
19 |
Item
3. Defaults upon Senior Securities
|
19 |
Item
4. Submission of Matters to a Vote of Security Holders
|
19 |
Item
5. Other Information
|
19 |
Item
6. Exhibits and Reports on Form 8-K
|
19 |
Signatures
|
20 |
3
RegenoCELL
Therapeutics, Inc.
(A
Development Stage Corporation)
PART
I - FINANCIAL INFORMATION
Item
1 – Interim Financial Statements and Notes – Quarter Ended September 30,
2009
Contents
Page
No.
|
|
Balance
Sheets at September 30, 2009 (unaudited) and December 31, 2008
(audited)
|
5 |
Interim
Statement of Operations for the Three Months ended September 30, 2009 and
2008 and for the period from February 2, 2002 (inception) to June 30, 2009
(unaudited)
|
6 |
|
|
Interim
Statement of Stockholders’ Equity (Deficit) For the period from February
1, 2002 (inception) to September 30, 2009 (unaudited)
|
7 |
Interim
Statement of Cash Flow for the Three Months ended September 30, 2009 and
2008 and for the period from February 1, 2002 (inception) to September 30,
2009 (unaudited)
|
8 |
|
|
Notes
to Interim Financial Statements
|
9 |
4
RegenoCell
Theraputics Inc.
(A
Development Stage Corporation)
Balance
Sheet
As
of
September 30,
|
||||||||
2009
|
December 31,
|
|||||||
(unaudited)
|
2008
|
|||||||
Assets
|
||||||||
Current
Assets
|
||||||||
Cash
|
$ | - | $ | - | ||||
Other
Receivable
|
- | - | ||||||
Total
Current Assets
|
- | - | ||||||
Net
Fixed Assets
|
3,100 | - | ||||||
Net
Intangible Development Costs
|
9,000 | 9,000 | ||||||
Total
Assets
|
$ | 12,100 | $ | 9,000 | ||||
Liabilities
and Stockholders' Equity
|
||||||||
Liabilities
|
||||||||
Current
Liabilities
|
||||||||
Accounts
Payable
|
$ | 46,913 | $ | - | ||||
Accrued
Interest
|
7,252 | 3,458 | ||||||
Accrued
Expenses
|
750 | 3,000 | ||||||
Total
Current Liabilities
|
54,915 | 6,458 | ||||||
Note
Payable
|
154,091 | 118,653 | ||||||
Total
Liabilities
|
209,007 | 125,111 | ||||||
Stockholders’
Equity
|
||||||||
Preferred
Stock $.0001 par value, 80,000,000 shares authorized, no shares issued and
outstanding as of September 30, 2009 and December 31, 2008
respectively
|
- | - | ||||||
Common
Stock, $.0001 par value, 520,000,000 shares authorized, 131,437,500 shares
issued and outstanding as of September 30, 2009 and December 31, 2008
respectively
|
13,144 | 13,144 | ||||||
Additional
Paid in Capital
|
4,913 | 4,913 | ||||||
Accumulated
Deficit during the development stage
|
(214,963 | ) | (134,168 | ) | ||||
Total
Stockholders’ Equity
|
(196,907 | ) | (116,111 | ) | ||||
Total
Liabilities and Stockholders’ Equity
|
$ | 12,100 | $ | 9,000 |
The
accompanying notes are an integral part of these financial
statements
5
RegenoCell
Theraputics Inc.
(A
Development Stage Corporation)
Income
Statement
For
the Nine Months Ended September 30,
February
1,
|
||||||||||||
2002 (Inception)
|
||||||||||||
Through
|
||||||||||||
September 30,
|
||||||||||||
2009
|
2008
|
2009
|
||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||
Revenues
|
$ | - | $ | - | $ | - | ||||||
Administrative
Expenses
|
33,881 | 19,675 | 166,174 | |||||||||
Development
Costs
|
46,914 | - | 46,914 | |||||||||
Net
(Loss) from development stage operations
|
(80,795 | ) | 19,675 | (213,088 | ) | |||||||
Loss
on abandonment of assets
|
- | (1,875 | ) | (1,875 | ) | |||||||
Net
(Loss)
|
$ | (80,795 | ) | $ | 21,550 | $ | (214,963 | ) | ||||
Basic
net loss per common share
|
$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | |||
Weighted
Average of Common Shares Outstanding
|
131,437,500 | 131,437,500 | 131,437,500 |
The
accompanying notes are an integral part of these financial
statements
6
RegenoCell
Theraputics Inc.
(A
Development Stage Corporation)
Statement
of Stockholders Equity
As
of September 30, 2009
Unaudited
Par Value
|
Paid
in
|
Retained
|
||||||||||||||||||
Shares
|
$.0001
|
Capital
|
Earnings
|
Total
|
||||||||||||||||
February
1, 2002 - Restricted common shares issued to President
of Company for
expenses
|
2,000,000 | $ | 200 | $ | - | $ | - | $ | 200 | |||||||||||
December
31, 2002 - Net (Loss)
|
- | - | - | (200 | ) | (200 | ) | |||||||||||||
December
31, 2002 - Balance
|
2,000,000 | 200 | - | (200 | ) | - | ||||||||||||||
February
15, 2003 - Sale of restricted shares to various
stockholders
|
550,000 | 55 | 10,945 | - | 11,000 | |||||||||||||||
December
31, 2003 - Net (Loss)
|
- | - | - | (6,669 | ) | (6,669 | ) | |||||||||||||
December
31, 2003 - Balance
|
2,550,000 | 255 | 10,945 | (6,869 | ) | 4,331 | ||||||||||||||
December
31, 2004 - Net (Loss)
|
- | - | - | (9,272 | ) | (9,272 | ) | |||||||||||||
December
31, 2004 - Balance
|
2,550,000 | 255 | 10,945 | (16,141 | ) | (4,941 | ) | |||||||||||||
December
31, 2005 - Net (Loss)
|
- | - | - | (28,583 | ) | (28,583 | ) | |||||||||||||
December
31, 2005 - Balance
|
2,550,000 | 255 | 10,945 | (44,724 | ) | (33,524 | ) | |||||||||||||
February
2006 repurchase of stock
|
(106,250 | ) | (11 | ) | (6,739 | ) | - | (6,750 | ) | |||||||||||
March
2006 repurchase of stock
|
(100,000 | ) | (10 | ) | (1,990 | ) | - | (2,000 | ) | |||||||||||
December
31, 2006 - Net (Loss)
|
- | - | - | (25,389 | ) | (25,389 | ) | |||||||||||||
December
31, 2006 - Balance
|
2,343,750 | 234 | 2,216 | (70,113 | ) | (67,663 | ) | |||||||||||||
Prior
Year adjustment for expense reversal
|
- | - | - | 1,650 | 1,650 | |||||||||||||||
December
31, 2007 - Net (Loss)
|
- | - | - | (12,592 | ) | (12,592 | ) | |||||||||||||
December
31, 2007 - Balance
|
2,343,750 | 234 | 2,216 | (81,055 | ) | (78,605 | ) | |||||||||||||
March
31, 2008 - additional shares issued resulting from a 3 for 1 common stock
split
|
7,031,250 | 703 | (703 | ) | - | - | ||||||||||||||
June
13, 2008 - additional shares issued resulting from a 10 for 1 common stock
split
|
70,312,500 | 7,031 | (2,450 | ) | (4,581 | ) | - | |||||||||||||
July
7, 2008 - Restricted common stock issued in lieu of employee
compensation
|
15,000,000 | 1,500 | 1,500 | |||||||||||||||||
July
7, 2008 - Restricted common stock issued for contracted
services
|
5,250,000 | 525 | 525 | |||||||||||||||||
July
22, 2008 - Issuance of restricted common stock to Thera Vitae, Inc. per
the terms of the letter of intent dated July 22, 2008
|
90,000,000 | 9,000 | 9,000 | |||||||||||||||||
July
23, 2008 - Cancellation of common stock
|
(58,500,000 | ) | (5,850 | ) | 5,850 | - | ||||||||||||||
December
31, 2008 - Net (Loss)
|
(48,532 | ) | (48,532 | ) | ||||||||||||||||
December
31, 2008 - Balance
|
131,437,500 | 13,143 | 4,913 | (134,168 | ) | (116,112 | ) | |||||||||||||
September
30, 2009 - Net (Loss)
|
(80,795 | ) | (80,795 | ) | ||||||||||||||||
September
30, 2009 - Balance
|
131,437,500 | $ | 13,143 | $ | 4,913 | $ | (214,963 | ) | $ | (196,907 | ) |
The
accompanying notes are an integral part of these financial
statements
7
RegenoCell
Theraputics Inc.
(A
Development Stage Corporation)
Cash
Flow Statement
For
the Nine Months Ended September 30,
Unaudited
February 1, 2002
|
||||||||||||
(date of inception)
|
||||||||||||
through
|
||||||||||||
2009
|
2008
|
September
30,
|
||||||||||
(Unaudited)
|
(Unaudited)
|
2009
|
||||||||||
Cash
Flows From Operating Activities:
|
||||||||||||
Cash
paid to suppliers
|
$ | (32,339 | ) | $ | (23,063 | ) | $ | (142,941 | ) | |||
Net
cash provided by (used in) operating activities
|
(32,339 | ) | (23,063 | ) | (142,941 | ) | ||||||
Cash
Flows From Investing Activities
|
||||||||||||
(Purchase)
of equipment
|
(3,099 | ) | - | (7,699 | ) | |||||||
Investment
in production activites
|
- | (16,442 | ) | (9,000 | ) | |||||||
Net
cash used in investing activities
|
(3,099 | ) | (16,442 | ) | (16,699 | ) | ||||||
Cash
Flows From Financing Activities:
|
||||||||||||
Proceeds
from note payable
|
35,438 | 56,488 | 181,856 | |||||||||
Repayment
of notes payable
|
- | (25,593 | ) | (27,765 | ) | |||||||
Sale
of common stock
|
- | 9,000 | 11,200 | |||||||||
Repurchase
of common stock
|
- | - | (8,750 | ) | ||||||||
Net
cash provided by (used in) financing activities
|
35,438 | 39,895 | 156,541 | |||||||||
Net
Increase (Decrease) in Cash
|
(0 | ) | 390 | (3,099 | ) | |||||||
Cash
Beginning of Period
|
- | (390 | ) | - | ||||||||
Cash
End of Period
|
$ | (0 | ) | $ | 0 | $ | (3,099 | ) | ||||
Reconciliation
of Income in Net Assets to Net Cash Provided by Operating
Activities:
|
||||||||||||
Net
Loss from Development Stage Activities
|
$ | (80,795 | ) | $ | (21,550 | ) | $ | (216,188 | ) | |||
Non
cash activities:
|
||||||||||||
Depreciation
|
- | 8,663 | 2,725 | |||||||||
Accrual
of Interest Expense
|
3,792 | (1,875 | ) | 3,792 | ||||||||
Abandonment
of Assets
|
- | 250 | 4,581 | |||||||||
Write
off uncollected other receivable
|
- | 2,025 | - | |||||||||
Stock
issued in lieu of compensation
|
- | 11,025 | ||||||||||
Reconciliation
Adjustments
|
- | |||||||||||
(Decrease)
in Accounts Payable
|
46,913 | (2,200 | ) | 46,913 | ||||||||
(Decrease)
in Accrued Expenses
|
(2,250 | ) | (2,000 | ) | (3,930 | ) | ||||||
(Decrease)
in Accrued Interest
|
- | (6,376 | ) | 8,140 | ||||||||
Net
cash provided by (used in) operating activites
|
$ | (32,339 | ) | $ | (23,063 | ) | $ | (142,941 | ) |
The
accompanying notes are an integral part of these financial
statements
8
RegenoCELL
Therapeutics, Inc.
(A
Development Stage Enterprise)
NOTES TO
FINANCIAL STATEMENTS
Note 1 -
Summary of Significant Company & Organization Policies
Organization
and Business Operations
RegenoCELL
Therapeutics, Inc. (formerly Good Buddy's Coffee Express, Inc.) (the "Company")
was incorporated in the State of Florida on February 1, 2002. The Company’s main
office was located in South Carolina and planned to develop a national chain of
drive through, high quality coffee outlets. In July 2008 the main office was
relocated to Massachusetts and the corporate mission was amended to develop a
stem cell therapy business for the treatment of congestive heart failure and
peripheral artery disease in lieu of its original goals. On July 7, 2008, the
Company amended its Articles of Incorporation changing the name of the
corporation to RegenoCELL Therapeutics, Inc. In
addition the Company approved an employment agreement with James F.
Mongiardo as President and Chief Executive Officer. In addition, Scott Massey,
the former President, Chief Executive Officer and Director of the Company, and
Phillips N. Dee, the former Director of the Company resigned from their
positions as officers and directors of the Company and James F. Mongiardo was
elected as Chief Executive Officer, President, Treasurer, Secretary and sole
Director of the Company.
At the
current time the Company is still in the development stage and as such reports
its financial statements as a Development Stage Enterprise. All costs associated
with the development of the Company’s market are expenses as per SPO
98-5.
Note 2 -
Summary of Significant Accounting Policies
Concentration
of Credit Risk
The
Company's financial instruments that are exposed to concentration of credit risk
are cash. Additionally, the Company maintains cash balances in bank
deposit accounts which, at times, may exceed federally insured
limits.
Cash and
Cash Equivalents
The
Company considers all highly liquid investments with maturity of three months or
less when purchased to be cash equivalents.
Accrued
Expenses
At year
end management recognizes an appropriate expense for the audit of its financial
records.
Fair
Value of Financial Instruments
Financial
instruments, including cash, receivables, accounts payable, and notes payable
are carried at amounts which reasonably approximate their fair value due to the
short term nature of these amounts or due to variable rates of interest which
are consistent with market rates. At present, the Company does not have any
material accounts receivables or accounts payable.
9
RegenoCELL
Therapeutics, Inc.
(A
Development Stage Enterprise)
NOTES TO
FINANCIAL STATEMENTS
Intangible
Assets
The
Company has acquired a non-exclusive license to market the TheraVitae, Inc.’s
stem cell technology in Mexico and the Caribbean. The cost of the license is
recorded as intangible assets and will be amortized at the time when the company
begins recognizing revenue over the life of the agreement.
Income
Taxes
The
Financial Accounting Standards Board (FASB) issued Statements of Financial
Accounting Standards (SFAS) No. 109 "Accounting for Income Taxes", which
requires companies to use the asset and liability method of accounting for
income taxes. Under the asset and liability method, deferred income taxes are
recognized for the tax consequence of temporary differences by applying enacted
statutory tax rates applicable to future year's differences between the
financial statements carrying amounts and the tax basis of existing assets and
liabilities. Pursuant to SFAS No. 109, the effect on deferred taxes of a change
in tax rates is recognized as income in the period that includes the enactment
date. Under the deferred method, deferred taxes recognized using the tax
applicable to the year of the calculation and were not adjusted for subsequent
changes in tax rates.
Earnings
(Loss) Per Share
The
Company presents "basic" earnings (loss) per share and, if applicable, "diluted"
earnings per share pursuant to the provisions of Statement of Financial
Accounting Standards No. 128, Earnings per Share (SFAS 128). Basic earnings
(loss) per share are calculated by dividing net income or loss by the weighted
average number of shares outstanding during each period. The calculation of
diluted earnings (loss) per share is the same as the basic earnings (loss) per
share.
Use of
Estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those
estimates.
Note 3 -
Fixed Assets
Fixed
Assets are stated at cost less accumulated depreciation. Expenditures for
ordinary maintenance and repairs are charged to operations as incurred. Major
additions and improvements are capitalized using the straight-line method over
the estimated useful life of the asset.
September 30,
|
December 31,
|
||||||||
2009
|
2008
|
Estimated
|
|||||||
Useful
Life
|
|||||||||
Equipment
|
$ | 3,099 | 0 |
5
years
|
|||||
3,099 | 0 | ||||||||
Less:
Accumulated Depreciation
|
-0- | 0 | |||||||
Net
Fixed Assets
|
$ | 3,099 | $ | 0 |
10
RegenoCELL
Therapeutics, Inc.
(A
Development Stage Enterprise)
NOTES TO
FINANCIAL STATEMENTS
Note 4 -
Notes Payable
The
Company has issued various unsecured demand promissory notes to the majority
shareholder and other unrelated individuals as of September 30,
2009. No demand has been placed or is anticipated to be placed and
therefore, they have been classified as long term debt. The detail of the long
term debt is as of September 30, is as follows:
Principle
|
Principal
|
||||||||
2009
|
2008
|
||||||||
February
5, 2005 - Demand Note
|
47,824 | 47,824 |
5%
per
|
||||||
annum
|
|||||||||
June
26, 2008 – Convertible Demand Note 5% per annum, convertible to common
stock at $1.00 per share
|
39,164 | 39,164 | |||||||
September
30, 2008 – Demand Notes, 0% per Annum.
|
12,408 | 12,408 | |||||||
October
1, 2008 – Demand Notes, 5% per Annum.
|
10,000 | 10,000 | |||||||
December
31, 2008 – Demand Notes, 0% per Annum.
|
9,257 | 9,257 | |||||||
March
31, 2009 – Demand Notes, 0% per Annum
|
8,960 | - | |||||||
June
30, 2009-Demand Notes, 0% per Annum
|
6,782 | - | |||||||
September
1, 2008 – Demand Notes, 5% per Annum.
|
2,500 | - | |||||||
September
30, 2009-Demand Notes, 0% per Annum
|
17,196
|
-
|
|||||||
Total
Debt
|
154,092 | 118,653 | |||||||
Less
Current Portion
|
- | - | |||||||
Long
Term Debt
|
$ | 154,092 | $ | 118,653 | |||||
Interest
expense for the nine months ending
September 30,
|
$ | 3,792 | $ | 5,771 |
11
RegenoCELL
Therapeutics, Inc.
(A
Development Stage Enterprise)
NOTES TO
FINANCIAL STATEMENTS
Note 5 -
Income Taxes
The
reconciliation of the statutory Federal income tax rate to the effective tax
rate are as follows for the period ended:
September 30, 2009
|
December 31, 2008
|
|||||||||||||||
Amount
|
Rate
|
Amount
|
Rate
|
|||||||||||||
Income
Taxes at Statutory Rate
|
$ | (32,709 | ) | -15.0 | % | $ | (20,126 | ) | -15.0 | % | ||||||
Increase
(Decrease) in taxes
|
||||||||||||||||
Valuation
Allowance
|
32,709 | 15.0 | % | $ | 20,126 | 15.0 | % | |||||||||
$ | - | 0.0 | % | $ | - | 0.0 | % |
The major
components of deferred tax assets are as follows:
September 30,
|
December 31,
|
|||||||
2009
|
2008
|
|||||||
Deferred
tax assets:
|
||||||||
Net
operating loss carryforward
|
$ | (218,063 | ) | $ | (134,170 | ) | ||
Valuation
allowance
|
218,063 | 134,170 | ||||||
Net
deferred tax assets
|
$ | - | $ | - |
Note 6 -
Stockholders Equity
On May
29, 2008 the Board of Directors unanimously voted to increase the authorized
shares of both the preferred stock and common stock from 5,000,000 to 10,000,000
shares and from 20,000,000 to 200,000,000 shares respectively.
On May
29, 2008, the Board of Directors unanimously voted for a 10 for 1 forward stock
split of the common shares effective for stockholders of record on June 13,
2008. The number of outstanding shares of common stock was adjusted from
approximately 7,031,250 to 70,312,500 shares, resulting from the
split.
On July
7, 2008, the Company Amended its Articles of Incorporation and increased the
number of authorized common stock to 520,000,000 shares at a par value of $.0001
per share. The Company also issued 250,000 restricted common shares to Douglas
T. Rice in lieu of payment for business consulting services, 5,000,000
restricted common shares to Domenic Mazza for marketing consultation services
and 15,000,000 restricted common shares to James F. Mongiardo CEO of the Company
as employee compensation.
On July
22, 2008, in accordance with a Letter of Intent between TheraVitae, Inc and the
Company to secure licensing rights from Thera Vitae, Inc., the Board of
Directors placed 90,000,000 restricted common shares at par value of $0.0001.in
escrow. These shares will be released upon completion and execution
of the agreements incorporating the terms of the Letter of Intent. The Letter of
Intent with TheraVitae provides for a non exclusive license in Mexico and later
the Islands of the Caribbean to commercialize TheraVitae’s stem cell therapy for
cardiovascular indications. The Company may establish clinics to
treat congestive heart failure patients with VesCell, TheraVitae’s stem cell
therapy. It also provides for an exclusive license in the United
States, Canada and Mexico to obtain regulatory approvals and then market VesCell
stem cell therapy for the treatment of peripheral artery
disease.
12
RegenoCELL
Therapeutics, Inc.
(A
Development Stage Enterprise)
NOTES TO
FINANCIAL STATEMENTS
On July
23, 2008, the Board authorized the cancellation from certain shareholders of
49,125,000 restricted common shares, par value $0.0001. Said shares
were returned to the transfer agent for cancellation.
Note 7 -
Going Concern
The
Company has no revenues to date. Since its inception the Company has been
dependent upon the receipt of capital investment to fund its continuing
activities. In addition to the normal risks associated with a new business
venture, there can be no assurance that the Company's business plan will be
successfully executed. As has been stated, an insignificant amount of funds have
been raised to date. In order to raise the necessary capital to commence its
planned principal operations and to implement its business plan, the Company's
management plans to complete a private placement of its common stock. The
Company's ability to execute its business model will depend on its ability to
obtain additional financing and achieve a profitable level of operations. There
can be no assurance that sufficient financing will be obtained. Nor can any
assurance be made that the Company will generate substantial revenues or that
the business operations will prove to be profitable.
13
ITEM
2. Management’s
Discussion and Analysis or Plan of Operations
Overview
The
Company was incorporated in Florida on February 1, 2002 and planned to develop
cafes in South Carolina expanding to other states in the South East, featuring
gourmet coffee, pastries and related items. The Company’s objective was to
develop cafes that provided a forum for rapid service and a strong community
identity with the widespread popularity of coffee and related products. Due to
intense competition, in early 2008 the Company changed its focus.
On July
16, 2008 the Company began focusing on a new stem cell therapy business
opportunity as set forth in a Letter of Intent dated March 31, 2008 with
TheraVitae, Inc. by completing several actions. These actions included the
filing of Amended Articles of Incorporation which among other matters changed
the name of the corporation to RegenoCELL Therapeutics, Inc. and increased the
authorized capitalization to 520,000,000 shares of Common Stock and 80,000,000
shares of Preferred Stock, approved Amended Bylaws, issued restricted common
shares to Douglas T. Rice (250,000) for introducing this new business
opportunity, Dominick Mazza (5,000,000) for consulting services for this new
business opportunity and James F. Mongiardo (15,000,000) for negotiating the
Letter of Intent which will become the new business of the corporation and for
directing and building it as its President and Chief Executive Officer, ratified
the March 31 Letter of Intent with TheraVitae, and approved the Employment
Agreement with James F. Mongiardo as President and Chief Executive
Officer.
The
Letter of Intent with TheraVitae provides for a non exclusive license in Mexico
and later the Islands of the Caribbean to commercialize TheraVitae’s stem cell
therapy for cardiovascular indications. The Company may establish
clinics to treat congestive heart failure patients with VesCell, TheraVitae’s
stem cell therapy. It also provides for an exclusive license in the
United States, Canada and Mexico to obtain regulatory approvals and then market
VesCell stem cell therapy for the treatment of peripheral artery
disease.
Further
in connection with this change in business focus, the Board of Directors
accepted the resignations of Scott Massey and Phillips N. Dee as directors and
officers of the Company and elected James F. Mongiardo to fill the vacancies on
the Board. Mr. Mongiardo was elected as Chief Executive Officer,
President, Treasurer, Secretary and sole director of the Company.
Critical
Accounting Policies
Our
financial statements are impacted by the accounting policies used and the
estimates and assumptions made by management during their
preparation. A complete summary of these policies is included in Note
2 of the notes to our historical financial statements. We have
identified below the accounting policies that are of particular importance in
the presentation of our financial position, results of operations and cash flows
and which require the application of significant judgment by
management.
Use
of Estimates
The
accompanying financial statements are prepared in conformity with accounting
principles generally accepted in the United States of America and include
certain estimates and assumptions which affect the reported amounts of assets
and liabilities at the date of the financial statements, and the reported
amounts of revenues and expenses during the reporting
period. Accordingly, actual results may differ from these
estimates.
14
Income
Taxes
The
Company follows the provisions of Statement of Financial Accounting Standards
No. 109, “Accounting for Income Taxes” (“SFAS No. 109”), under which deferred
tax assets and liabilities are determined based on differences between financial
reporting and tax basis of assets and liabilities. Deferred tax
assets and liabilities are measured using the enacted tax rates and laws that
are expected to be in effect when the differences are expected to
reverse. The provisions of SFAS No. 109 also require the recognition
of future tax benefits such as net operating loss carry-forwards, to the extent
that the realization of such benefits is more likely than not. To the
extent that it is more likely than not that such benefit will not be received,
the Company records a valuation allowance against the related deferred tax
asset.
Research
and Development Costs
Research
and development costs are expensed as incurred. The cost of
intellectual property purchased from others that is immediately marketable or
that has an alternative future use is capitalized and amortized as intangible
assets. Capitalized costs are amortized using the straight-line
method over the estimated economic life of the related asset. The
Company periodically reviews its capitalized intangible assets to assess
recoverability based on the projected undiscounted cash flows from operations,
and impairments are recognized in operating results when a permanent diminution
in value occurs.
Off
Balance Sheet Arrangements
The
Company is not a party to any off-balance sheet arrangements.
Description
of Property
The
Company does not own any real property or any interest in real property and does
not invest in real property or have any policies with respect thereto as part of
its operations or otherwise.
Our
principal office facility is presently located in space owned by our sole
officer. Rent has not been charged for the office space, and it is
not expected that rent will be charged in the near-term.
Management’s
Discussion and Analysis and Plan of Operations
The new
mission of the Company is to bring stem cell therapy treatments to the market as
quickly as possible. The Company has identified and entered into a
Letter of Intent with a company currently treating patients with adult stem
cells for congestive heart failure and other indications. TheraVitae,
located in Bangkok, Thailand, has developed a process for which patent
applications are pending to identify and process adult stem cells found in a
patient’s blood. These adult stem cells are grown into large numbers
in vitro (outside the body) and then encouraged to differentiate into angiogenic
precursor cells or blood vessel forming cells for the treatment of congestive
heart failure. These adult stem cells can also be used for the
treatment of other conditions such as peripheral artery disease.
Currently
congestive heart failure patients cleared for treatment have one-half pint of
blood drawn which is sent to TheraVitae’s cell processing facility in Israel.
After the adult stem cells in the patient’s blood have been extracted and grown
into large numbers of angiogenic precursor cells, they are sent to Bangkok,
Thailand for infusion into the patient in a minimally invasive
procedure. The stem cell therapy is either delivered through a
catheter or injected directly into the myocardium. All patients are
private pay.
The
results to date have been impressive. Over three hundred (300)
congestive heart failure patients with no other options have shown similar
results to a clinical trial of 24 patients. In that trial,
statistically significant improvements between baseline and the three month and
six month follow-up were achieved for:
15
|
·
|
Improvement
in the six minutes walking test.
|
|
·
|
Increase
in metabolic equivalent units (METs) during the stress
test.
|
|
·
|
Decrease
in the perfusion defect region of the target artery, meaning it had
improved.
|
|
·
|
Decrease
in the Canadian Cardiovascular Society (CCS) Grading Scale, meaning the
patient has improved.
|
The
Company has entered into a Letter of Intent which provides for two basic
businesses. The first is an opportunity to generate revenue in the short term
for the treatment of congestive heart failure. The second is an
opportunity to generate substantial revenues in the long term for the treatment
of peripheral artery disease.
The first
stem cell business is a non exclusive license to establish clinics
initially in Mexico and later in the Caribbean (exclusive of the Dominican
Republic) to treat patients with TheraVitae’s stem cell therapy for congestive
heart failure and all other cardiovascular indications. The non exclusive
license is for four years but automatically renewable if 500 patients are
treated in either year three or four. Patients may not be treated in
the United States. However patients from the United States may be
identified, qualified, agree to the treatment, pay for the treatment in advance
and then have their blood drawn for processing by TheraVitae.
When the
stem cell therapy is ready for administration, the patient will travel outside
the United States to a clinic in Mexico or the Caribbean operated by a
subsidiary of the Company to be formed to receive the
treatment. Because this is an autologous treatment, it is anticipated
that the regulatory requirements for administering this stem cell therapy in
Mexico and the Islands of the Caribbean will be less extensive than the United
States. The market size for congestive heart failure in the United
States is so large that multiple treatment clinics will be needed to handle
potential demand. Approximately five million patients have been
diagnosed in the United States with congestive heart failure.
There are
over 1,100 investigation stem cell clinical trials being conducted in the United
States. It will take multiple years for any product to be approved,
especially products derived from embryonic or umbilical cord
blood stem cells. In the interim, patients may benefit from adult stem cell
treatment today through identification and qualification in the United States
and the administration of treatment outside the United States. The
Company intends to be one of the first companies to benefit from the commercial
possibilities associated with adult stem cell therapy through the establishment
of clinics initially in Mexico and later in the Caribbean where patients from
the United States may be treated. Thus, the Company will be among the
first to be able to earn revenues from adult stem cell therapy.
The
second business is an exclusive license for the United States, Canada and Mexico
for the treatment of peripheral artery disease. The exclusive license
is for four years automatically renewable for additional four year periods if
there is either (a) an active IND in the United States or (b) an approval to
market for peripheral artery disease in the United States. Over ten
million Americans suffer from poor circulation to their extremities. Peripheral
artery disease is especially prevalent among diabetics. After
standard treatments fail, the only alternative is amputation of the toes, foot
or leg, sometimes fingers, hand or arm. TheraVitae’s stem cell
therapy has been shown in pilot clinical trials to re-establish blood flow to
the extremities resulting in saving the limbs from amputation.
The
process for treating peripheral artery disease is very similar to the process
for treating congestive heart failure. After the patient is
qualified, a half liter of blood is drawn and sent to TheraVitae for
processing. The adult stem cells are extracted, grown into large
numbers and then encouraged to become angiogenic precursor
cells. This adult stem cell therapy is then injected in multiple
locations in the limb which is experiencing poor circulation.
16
The
Company will be responsible for all costs associated with obtaining all required
regulatory approvals for the treatment of peripheral artery disease in the
United States, Canada and Mexico. It intends to submit to the Food
and Drug Administration an Investigational New Drug (“IND”) application for
authorization to initiate clinical trials in the United States and complete what
is necessary to apply for regulatory approval to market the
product. Such an approval in the United States will have substantial
potential since the market size is large and flexibility of pricing is great
given the alternative of amputation.
The
Company has not generated any revenues from its operations. To effectuate the
new stem cell business plan during the next twelve months, the Company must
raise funding, locate a suitable source for congestive heart failure patients
and/or implement marketing programs to find these patients who may benefit from
stem cell therapy, establish a review procedure and staging center to draw blood
from qualified patients, and establish a site outside the United States which
can administer the stem cell therapy. In addition the Company must
begin assembling or developing the required data, finalizing a clinical protocol
and clinical case report form, contracting with clinical sites able to conduct
the requisite clinical trials, obtaining Institutional Review Board approval for
these clinical trials, and contracting with a clinical research organization to
administer these clinical trials as part of or in conjunction with the
submission of an IND to the Food and Drug Administration for authorization to
begin clinical trials in the United States for the treatment of peripheral
artery disease.
The key
part of the business plan, namely the treatment of no option congestive heart
failure patients from the United States in Mexico, required obtaining approval
from COFEPRIS (Mexican FDA) to conduct a clinical trial in Mexico for an
unapproved product. This is analogous to the United States where the
Food and Drug Administration approves clinical trials for unapproved
products.
A
clinical trial requires a protocol which includes the safety and efficacy data
supporting the product. It also requires information about other
similar products and details about the manufacturing process. As part
of the Company’s arrangement with TheraVitae, this necessary information was
given to the Company to incorporate into the clinical trial. The
Company put together an extensive Mexican information package. The process in
Mexico required that the Company’s clinical trial first be approved by the
Research and Bioethics Committee of Christus Muguerza Hospital, similar to an
Institutional Review Board in the United States. Since the Company is
applying in Mexico, any documents the Company created had to be translated into
Spanish.
The
Company obtained the Research and Bioethics Committee approval to conduct the
clinical trial on March 18, 2009. Before the Company submitted to
COFEPRIS, a local Mexico City firm, Accelerated Clinical Research (“ACR”) was
retained to assist with the application and to follow it through
COFEPRIS. A regulatory strategy was agreed upon and multiple
additional documents were created to satisfy what ACR said COFEPRIS would expect
to see.
COFEPRIS
does not mail any letters about action it is taking. Rather all letters are hand
delivered and if you miss a deadline because you did not pick up your letter on
time, you start all over. Through ACR, the Company had someone go to
the offices of COFEPRIS in Mexico City every day post the Company’s
submission. COFEPRIS responded on June 1, 2009 requesting three
changes to the Company’s program. The most significant was their
request that instead of following patients for 6 months, the Company follow them
for 2 years with visits every three months which include measuring the left
ventricular ejection fraction at each visit. The Company agreed to
the three changes but before the Company could resubmit had to obtain approval
for these changes from the Research and Bioethics Committee at Christus Muguerza
Hospital. The Company did obtain that approval and resubmitted to
COFEPRIS on June 19, 2009 which was on time. Subsequently on July 15,
2009, COFEPRIS raised another issue concerning language in the Informed
Consent. The Company then engaged through ACR local counsel who
negotiated with COFEPRIS revised language to the Informed
Consent. COFEPRIS acknowledged receipt of the revised language on
August 28, 2009.
17
On
September 24, 2009 COFEPRIS agreed to the revised Informed Consent
language. COFEPRIS also instructed that the Company resubmit the
application with the updated Informed Consent. Subsequent to the
close of the quarter on October 12, 2009 approval of the Research and Bioethics
Committee to the changes in the Informed Consent was obtained. The
resubmission to COFEPRIS was made on October 13, 2009. It is
anticipated that COFEPRIS will review the revised application on an expedited
basis. Once the Company has that approval, the Company can then obtain an import
license from another section of COFEPRIS which on average takes 15 business
days.
During
the quarter ending September 30, TheraVitae asked the Company to become its
staging center for patients in North America. The Company will screen
and qualify them, draw their blood and ship it to the cell processing facility
in Israel. The patients will fly to Bangkok to receive the stem cell
treatment. It should be noted that both the shipment of blood and the
shipment of stem cells from that blood must be done under a 48 window under
controlled temperature conditions. The logistics for shipment have
almost been finalized. Once the Company is cleared to treat patients in Mexico,
the TheraVitae referrals will become the Company’s
patients. Subsequent to the close of the quarter, the agreement
incorporating these terms was finalized and executed.
The
Company has reached tentative agreement with Titan Imaging located in West
Hollywood, California to serve as the staging center for patients. It
is expected that patients will be screened, have their blood dawn and receive
all the tests in the subsequent follow-up visits at Titan Imaging’s facilities
required by the protocol submitted to COFEPRIS. Titan Imaging will be
paid as each patient is processed.
The
Company anticipates earning revenues for the treatment of congestive heart
failure patients with the possibility of the first patients being treated in the
first quarter of 2010. There is no assurance, however, that this will
occur. The Company does not anticipate that during the next twelve
months the Company will earn sufficient revenues to fully support all aspects of
the new stem cell business plan and, therefore, will continue to seek new
funding through equity financings.
For the
twelve month period following the date of this Quarterly Report, the Company
will be required to obtain additional financing in order to continue to pursue
the business plan. The Company anticipates that additional funding will be in
the form of equity financing from the sale of its common stock. The
Company cannot provide investors with any assurance that the Company will be
able to raise sufficient funding from the sale of its common stock to fund the
business plan going forward.
If the
Company is unsuccessful at raising sufficient capital to fund its operations,
for whatever reason, the Company may be forced to seek opportunities outside of
its new business focus or to seek a buyer for its business or another entity
with which the Company could partner. Even if the Company is
successful in obtaining equity financing to fund its business plan, there is no
assurance that the Company will obtain the funding necessary to pursue its plan
over the long-term.
18
ITEM
3. Controls and
Procedures
Evaluation of disclosure controls
and procedures
In
connection with the preparation of this Quarterly Report on Form 10-Q, an
evaluation was carried out by our management, with the participation of the
Chief Executive Officer and Chief Financial Officer, of the effectiveness of our
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
under the Securities Exchange Act of 1934 (Exchange Act)) as of September 30,
2009. Disclosure controls and procedures are designed to ensure that
information required to be disclosed in reports filed or submitted under the
Exchange Act is recorded, processed, summarized, and reported within the time
periods specified in the SEC rules and forms and that such information is
accumulated and communicated to management, including the Chief Executive
Officer and the Chief Financial Officer, to allow timely decisions regarding the
required disclosures. Based on its evaluation, our management
concluded, as of the end of the period covered by this report, that our
disclosure controls and procedures were effective.
There has
been no change in our internal control over financial reporting (as defined in
Rule 13 a-15(f) under the Exchange Act) during the quarter ended September 30,
2009 that has materially affected, or is reasonably likely to materially affect,
our internal control over financial reporting.
PART
II – OTHER INFORMATION
Item
1. Legal Proceedings
We are
not party to any legal proceedings as of the date of this Form
10-Q.
Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds
Not
applicable.
Item
3. Defaults Upon Senior Securities
Not
applicable.
Item
4. Submission of Matters to a Vote of Security Holders
None.
Item
5. Other Information
Not
applicable.
Item
6. Exhibits and Reports on Form 8-K.
a)
|
Exhibits
|
The
following are exhibits included with this Quarterly Report on Form
10-Q:
31.1
Certification of Chief Executive Officer and Chief Financial Officer pursuant to
Rule 13a-14 or 15d-14 of the Securities Exchange Act of
1934, as adopted pursuant to section 302 of the Sarbanes-Oxley Act of
2002.
19
32.1
Certification of Chief Executive Officer and Chief Financial Officer pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
b)
|
Reports
on Form 8-K
|
None.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
REGENOCELL
THERAPEUTICS, INC.
|
|||
Dated: November
13, 2009
|
|||
By:
|
/s/ James F. Mongiardo
|
||
James
F. Mongiardo
|
|||
Principal
Executive Officer,
|
|||
President,
Principal Financial Officer,
|
|||
Principal
Accounting Officer, and
|
|||
Director
|
20