Attached files
| file | filename |
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| EX-32.1 - EXHIBIT 32.1 - Regenicin, Inc. | ex32_1.htm |
| EX-31.1 - EXHIBIT 31.1 - Regenicin, Inc. | ex31_1.htm |
| EX-31.2 - EXHIBIT 31.2 - Regenicin, Inc. | ex31_2.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
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[X]
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Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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For the quarterly period ended December 31, 2010
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[ ]
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Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
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For the transition period from __________ to __________
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Commission File Number: 333-146834
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Regenicin, Inc.
(Exact name of registrant as specified in its charter)
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Nevada
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27-3083341
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(State or other jurisdiction of incorporation or organization)
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(IRS Employer Identification No.)
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10 High Court, Little Falls, NJ
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(Address of principal executive offices)
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(646) 403-3581
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(Registrant’s telephone number)
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_______________________________________________________________
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(Former name, former address and former fiscal year, if changed since last report)
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). [ ] 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.
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[ ] Large accelerated filer Accelerated filer
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[ ] Non-accelerated filer
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[X] Smaller reporting company
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). [ ] Yes [X] No
State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 83,417,965 as of February 14, 2011.
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TABLE OF CONTENTS
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Page
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PART I – FINANCIAL INFORMATION
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PART II – OTHER INFORMATION
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
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Our financial statements included in this Form 10-Q are as follows:
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These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim period ended December 31, 2010 are not necessarily indicative of the results that can be expected for the full year.
3
REGENICIN, INC.
(A Development Stage company)
BALANCE SHEETS
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December 31,
2010 |
September 30,
2010 |
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(Unaudited)
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ASSETS
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CURRENT ASSETS
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Cash
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$ | 81,476 | $ | 4,564 | |
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Prepaid expenses and other current assets
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21,883 | 25,970 | |||
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Total current assets
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103,359 | 30,534 | |||
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Intangible assets
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3,007,500 | 3,007,500 | |||
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Total assets
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$ | 3,110,859 | $ | 3,038,034 | |
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LIABILITIES AND STOCKHOLDERS' EQUITY
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CURRENT LIABILITIES
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Accounts payable
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$ | 241,853 | $ | 221,762 | |
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Accrued expenses
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271,371 | 138,985 | |||
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Due to related party
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- | 318,789 | |||
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Note payable
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150,000 | 150,000 | |||
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Total current liabilities
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663,224 | 829,536 | |||
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Total liabilities
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663,224 | 829,536 | |||
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COMMITMENTS
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STOCKHOLDERS' EQUITY
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Preferred Stock, $0.001 par value 10,000,000 shares authorized; none outstanding
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Common stock, $0.001 par value; 200,000,000 shares authorized;
87,846,324 and 86,406,257 issued and outstanding
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87,847 | 86,407 | |||
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Additional paid-in capital
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4,125,674 | 3,116,841 | |||
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Deficit accumulated during development stage
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(1,765,886) | (994,750) | |||
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Total stockholders' equity
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2,447,635 | 2,208,498 | |||
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Total liabilities and stockholders' equity
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$ | 3,110,859 | $ | 3,038,034 | |
See Notes to Financial Statements.
REGENICIN, INC.
(A Development Stage company)
STATEMENTS OF OPERATIONS
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Three Months
Ended |
Three Months Ended
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September 6, 2007
(Inception Date) |
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(Unaudited)
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(Unaudited)
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(Unaudited)
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Revenues
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$ | - | $ | - | $ | - | |||
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Operating expenses
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General and administrative
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656,761 | 2,000 | 1,395,405 | ||||||
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Stock based compensation - general and administrative
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112,500 | - | 112,500 | ||||||
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Total operating expenses
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769,261 | 2,000 | 1,507,905 | ||||||
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Loss from operations
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(769,261 | ) | (2,000 | ) | (1,507,905 | ) | |||
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Other Income (Expenses)
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Interest expense, including amortization of
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beneficial conversion feature
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(1,875 | ) | - | (257,981 | ) | ||||
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Total Other Income (Expenses)
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(1,875 | ) | - | (257,981 | ) | ||||
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Net loss
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$ | (771,136 | ) | $ | (2,000 | ) | $ | (1,765,886 | ) |
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Basic and diluted loss per share:
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$ | (0.01 | ) | $ | 0.00 | ||||
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Weighted average number of shares outstanding
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Basic and diluted
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87,158,711 | 73,100,000 | |||||||
See Notes to Financial Statements.
REGENICIN, INC.
(A Development Stage company)
STATEMENTS OF CASH FLOWS
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Three Months Ended
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Three Months Ended
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September 6, 2007
(Inception Date) |
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(Unaudited)
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(Unaudited)
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(Unaudited)
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CASH FLOWS FROM OPERATING ACTIVITIES
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Net loss
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$ | (771,136 | ) | $ | (2,000 | ) | $ | (1,765,886 | ) |
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Adjustments to reconcile net loss to net cash used in operating activities:
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Amortization of beneficial conversion feature
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- | - | 251,214 | ||||||
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Stock based compensation
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112,500 | 112,500 | |||||||
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Changes in operating assets and liabilities
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Prepaid expenses and other current assets
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4,087 | - | (21,883 | ) | |||||
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Accounts payable
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20,091 | - | 241,853 | ||||||
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Accrued expenses
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132,386 | - | 275,013 | ||||||
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Net cash used in operating activities
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(502,072 | ) | (2,000 | ) | (907,189 | ) | |||
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CASH FLOWS FROM INVESTING ACTIVITIES
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Acquisition of intangible assets
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- | - | (3,007,500 | ) | |||||
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Net cash used in investing activities
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- | - | (3,007,500 | ) | |||||
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CASH FLOWS FROM FINANCING ACTIVITIES
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Proceeds from the sale of common stock
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467,550 | - | 3,012,575 | ||||||
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Payments of expenses relating to the sale of common stock
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(75,777 | ) | - | (444,910 | ) | ||||
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Proceeds from the issuance of notes payable
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- | - | 900,000 | ||||||
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Peoceeds from advances from related party
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187,211 | - | 506,000 | ||||||
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Proceeds from advances from officer
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- | 2,000 | 22,500 | ||||||
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Net cash provided by financing activities
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578,984 | 2,000 | 3,996,165 | ||||||
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INCREASE IN CASH
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76,912 | - | 81,476 | ||||||
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CASH - BEGINNING OF PERIOD
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4,564 | - | - | ||||||
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CASH - END OF PERIOD
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$ | 81,476 | $ | - | $ | 81,476 | |||
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Supplemental disclosures of cash flow information:
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Cash paid for interest
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$ | - | $ | - | |||||
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Non-cash activities:
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Issuance of common stock for the conversion of amounts owed to related party
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$ | 506,000 | $ | - | |||||
NOTES TO THE FINANCIAL STATEMENTS
(A Developement Stage Company)
(UNAUDITED)
NOTE 1 - THE COMPANY
Windstar , Inc. (the “Company”) was incorporated in the state of Nevada on September 6, 2007 and is in the development stage. On July 19, 2010, the Company amended its Articles of Incorporation to change the name of the Company to Regenicin, Inc.
The Company’s original business was the development of a purification device. Such business was assigned to the Company’s former management in July 2010.
The Company has adopted a new business plan and intends to help 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. To this end, we have entered into an agreement with Lonza Walkersville, Inc. (“Lonza”) for the exclusive license to use certain proprietary know-how and information necessary to develop and seek approval by the U.S. Food and Drug Administration (“FDA”) for the commercial sale of a product known as PermaDerm™.
PermaDerm™ is a tissue-engineered skin substitute prepared from autologous (patient’s own) skin cells. It is a combination of cultured epithelium with a collagen-fibroblast implant that produces a skin substitute that contains both epidermal and dermal components. This model has been shown in preclinical studies to generate a functional skin barrier and in clinical studies to promote closure and healing of burns. Critically, the Company believes that self-to-self skin grafts for permanent skin tissue will not be rejected by the immune system of the patient, unlike with porcine or cadaver grafts in which rejection is an important possibility.
NOTE 2 - BASIS OF PRESENTATION
The accompanying unaudited financial statements of Regenicin, Inc. (the “Company”) 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 footnotes 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 three months ended December 31, 2010 are not necessarily indicative of the results that may be expected for the year ending September 30, 2011. These unaudited financial statements should be read in conjunction with the audited financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended September 30, 2010, as filed with the Securities and Exchange Commission.
Going Concern:
The Company’s 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 of approximately $1,766,000 for the period September 6, 2007 (inception date) through December 31, 2010, expects to incur further losses in the development of its business and has been dependent on funding operations through the issuance of convertible debt and private sale of equity securities. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans include continuing to finance operations through the private or public placement of debt and/or equity securities and the reduction of expenditures. However, no assurance can be given at this time as to whether the Company will be able to achieve these objectives. The 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.
Development Stage Activities and Operations:
The Company is in the development stage and has had no revenues. A development stage company is defined as one in which all efforts are devoted substantially to establishing a new business and even if planned principal operations have commenced, revenues are insignificant.
NOTE 3 - 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 earnings (loss) per share give 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 Company had no outstanding potential common shares.
NOTE 4 - INTANGIBLES ASSETS
In July 2010, the Company entered into an agreement with Lonza for the exclusive license to use certain proprietary know-how and information necessary to develop and seek approval by the U.S. Food and Drug Administration (“FDA”) for the commercial sale of a product known as PermaDerm™.
The Company paid Lonza $3,000,000 for the exclusive know-how license and assistance to seek approval from the FDA for the commercial sale of PermaDerm™ in the U.S., and later for approval in foreign jurisdictions for commercial sale of PermaDerm™ throughout the world. In conjunction with Lonza, we intend to create and implement a strategy to conduct human clinical trials and to assemble and present the relevant information and data in order to obtain the necessary approvals for PermaDerm™ and possible related products.
In August 2010, the Company paid $7,500 and obtained the rights to the trademarks PermaDerm® and TempaDerm® from KJR-10 Corp.
Intangible assets, which include purchased licenses, patents and patent rights, are stated at cost and will be amortized using the straight-line method over their useful lives based upon the pattern in which the expected benefits will be realized, or on a straight-line basis, whichever is greater.
We review our intangible assets subject to amortization whenever events or changes in circumstances indicate that the carrying amount of such an asset may not be recoverable. Recoverability of these assets is measured by comparison of their carrying amount to the future undiscounted cash flows the assets are expected to generate. If such assets are considered impaired, the impairment to be recognized is equal to the amount by which the carrying value of the assets exceeds their fair value determined by either a quoted market price, if any, or a value determined by utilizing a discounted cash flow technique. In assessing recoverability, we must make assumptions regarding estimated future cash flows and discount factors. If these estimates or related assumptions change in the future, we may be required to record impairment charges. We did not record any impairment charges in the three months ended December 31, 2010.
NOTE 5 – NOTE PAYABLE
On August 2, 2010, the Company issued a demand promissory note (the “Demand Note”) for $150,000. The Demand Note bears interest at 5% per annum. Interest accrued on the Demand Note amounted to $1,875 and $0 for the three months ended December 31, 2010 and 2009, respectively.
NOTE 6 – RELATED PARTY TRANSACTIONS
The Broadsmoore Group, LLC (“TBG”):
TBG is a stockholder of the Company. On August 30, 2010, the Company had entered into a finance representation agreement with TBG. TBG was to provide advice to the Company and evaluate relevant transactions the Company may consider.
In addition, TBG advanced monies to the Company. The advances were due on demand and were non-interest bearing. In addition, the Company was utilizing the office space and employees of TBG at no cost.
For the three months ended December 31, 2010 and 2009, the Company did not incur any fees to TBG.
In fiscal 2011, the Company borrowed additional funds from TBG. Effective December 30, 2010, the Company and TBG signed a settlement agreement by which TBG accepted 666,667 shares of common stock in exchange for all monies owed TBG to date (approximately $506,000). These shares were previously issued as part of the October 28, 2010 offering. In addition, the Company orally agreed to pay a $200,000 success fee to TBG if the Company raises the remaining $3.5 million being offered in its current offering that commenced on October 28, 2010 (see Note 7 – Stockholders’ Equity).
NOTE 7 – STOCKHOLDERS’ EQUITY
Authorized Shares:
On October 27, 2010, the Company increased the number of authorized shares of common stock from 90,000,000 shares to 200,000,000 by amending our Articles of Incorporation.
Common Stock Issuances:
Private Placement
On October 28, 2010, the Company began offering under a Private Placement Memorandum up to 6,000,000 shares of its common stock at an offering price of $0.75 per share. Offering expenses are estimated to be equal to 10% of the offering price. For the period October 28, 2010 through February 10, 2011, the Company sold 623,400 shares of common stock and received gross proceeds of $467,550. Expenses related to the offering totaled $75,777 and were offset against additional paid-in capital.
TBG
Effective December 30, 2010, TBG accepted 666,667 shares of common stock in exchange for all monies owed TBG to date (approximately $506,000).
Stock Based Compensation
On November 22, 2010, the Company issued 150,000 shares for consulting services rendered. The shares were valued at $112,500.
Treasury Stock:
On July 19, 2010, Mr. McCoy agreed to deliver to the Company 4,428,360 shares of common stock beneficially owned by him with instructions that such shares be cancelled and returned to treasury. Such shares were to be returned to offset the potential dilution caused by an equity incentive plan for directors involving the same number of shares that was adopted (see below). Mr. McCoy delivered the shares on January 5, 2011.
2010 Incentive Plan:
On December 15, 2010, the board of directors approved the Regenicin, Inc. 2010 Incentive Plan (the “Plan”). The Plan provides for the granting of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, stock units, performance shares and performance units to our employees, officers, directors and consultants, including incentive stock options, non-qualified stock options, restricted stock, and other benefits. The Plan provides for the issuance of up to 4,428,360 shares of our common stock.
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 is $0.62 per share, The options vest over a three-year period and expire on December 22, 2015.
Registration Penalties:
On August 16, 2010, we sold 4,035,524 shares of our common stock as part of a Securities Purchase Agreement with certain accredited investors (the “Purchasers”) pursuant to the closing of our Private Placement Offering (the “Offering”).
Pursuant to a Registration Rights Agreement that accompanies the Securities Purchase Agreement, we agreed to file an initial registration statement covering the resale of the common stock no later than 45 days from the closing of the Offering and to have such registration statement declared effective no later than 180 days from filing of the registration statement. If we do not timely file the registration statement, cause it to be declared effective by the required date, or maintain the filing, then each Purchaser in the offering will be entitled to liquidated damages equal to 1% of the aggregate purchase price paid by such Purchaser for the securities, and an additional 1% for each month that we do not file the registration statement, cause it to be declared effective, of fail to maintain the filing (subject to a maximum penalty of 10% of the aggregate purchase price). The Offering closed on August 16, 2010. The Company has not filed an initial registration statement and began accruing liquidating damages from October 1, 2010. Registration penalties totaled $75,061 for the three months ended December 31, 2010.
NOTE 8 – EMPLOYMENT AGREEMENTS
On October 4, 2010, we entered into a written employment agreement with Chris Hadsall. Pursuant to the terms and conditions of the employment agreement:
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Mr. Hadsall will serve as Chief Operating Officer of our company for a period of three years;
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Mr. Hadsall will earn a base salary of $120,000 for the first 12 months, and will be entitled to increases thereafter as determined by our board of directors;
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Mr. Hadsall will be eligible for an annual bonus as determined by our board of directors; and
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Mr. Hadsall will be entitled to participate in any employee benefit plans, as established by our board of directors.
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On October 4, 2010, we entered into a written employment agreement with Joseph Connell. Pursuant to the terms and conditions of the employment agreement:
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Mr. Connell will serve as President of our company for a period of three years;
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Mr. Connell will earn a base salary of $250,000 for the first 12 months, and will be entitled to increases thereafter as determined by our board of directors. (He agreed to a reduction in his salary to $125,000 until such time as we achieve a positive net income);
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Mr. Connell will be eligible for an annual bonus as determined by our board of directors; and
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Mr. Connell will be entitled to participate in any employee benefit plans, as established by our board of directors.
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Both Messrs. Hadsall and Connell signed agreements to keep certain information confidential and not compete with or solicit from our company for a period of time.
NOTE 9 - SUBSEQUENT EVENTS
Management has evaluated subsequent events through the date of this filing.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.
Overview
We intend to help 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. To this end, we have entered into an agreement with Lonza Walkersville, Inc. (“Lonza”) for the exclusive license to use certain proprietary know-how and information necessary to develop and seek approval by the U.S. Food and Drug Administration (“FDA”) for the commercial sale of a product called PermaDerm™.
PermaDerm™ is a tissue-engineered skin substitute prepared from autologous (patient’s own) skin cells. It is a combination of cultured epithelium with a collagen-fibroblast implant that produces a skin substitute that contains both epidermal and dermal components. This model has been shown in preclinical studies to generate a functional skin barrier. Critically, we believe that self-to-self skin grafts for permanent skin tissue will not be rejected by the immune system of the patient, unlike with porcine or cadaver grafts in which rejection is an important possibility.
We paid Lonza $3,000,000 for the exclusive license and assistance to seek approval from the FDA for the commercial sale of PermaDerm™ in the U.S., and later for approval in foreign jurisdictions for commercial sale of PermaDerm™ throughout the world. In conjunction with Lonza, we intend to create and implement a strategy to conduct human clinical trials and to assemble and present the relevant information and data in order to obtain the necessary approvals for PermaDerm™ and possible related products.
The agreement with Lonza also provides that, upon Lonza obtaining FDA approval for commercial sale of PermaDerm™ we will pay Lonza an additional $2 million to buy its subsidiary, Cutanogen Corporation, (which controls certain exclusive patent licenses underlying the product), and that Lonza will then serve as our exclusive manufacturer and distributor for the product and will share in our product revenue. We currently do not own any rights to PermaDerm™.
Results of Operations for the Three Months Ended December 31, 2010 vs. December 31, 2009.
We have generated no revenues since the inception of the Company. We do not expect to generate revenues until we are able to obtain FDA approval of PermaDerm™, and thereafter acquire the license rights to sell products associated with that technology.
We incurred operating expenses of $769,261 for the three months ended December 31, 2010, compared with operating expenses of $2,000 for the three months ended December 31, 2009. Our operating expenses for both periods consisted of general and administrative expenses. Our operating expenses in 2009, consisting of professional fees, were incurred primarily to enable us to satisfy the requirements of a reporting company. Our operating expenses increased dramatically in 2010 as a result of ramping up operations in connection with our tissue-engineered skin substitutes business, and consisted mainly of the following:
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Operating Expense
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Amount
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Legal and Accounting
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100,197
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Salaries and Other Compensation
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164,583
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Consulting
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172,176
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Public Relations and Market Support
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160,817
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Office Expenses
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12,043
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Travel
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46,634
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Insurance
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26,622
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Website Expenses
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4,015
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Registration Penalties
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75,061
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Miscellaneous
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7,113
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We incurred stock based compensation of $112,500 from the issuance of 150,000 shares of our common stock to a consultant. Such amount is included above under consulting. Our other expenses for the three months December 31, 2010 consisted of interest expense amounting to $1,875. The interest expense was incurred under the terms of a demand note payable.
We incurred a net loss of $771,136 for the three months ended December 31, 2010, as compared with a net loss of $2,000 for the three months ended December 31, 2009.
Liquidity and Capital Resources
As of December 31, 2010, we had total current assets of $103,359 and total assets in the amount of $3,110,859. Our total current liabilities as of December 31, 2010 were $663,224. We had a working capital deficit of $559,885 as of December 31, 2010. Our cash was $81,476 as of December 31, 2010.
Operating activities used $502,072 in cash for the three months ended December 31, 2010. The decrease in cash was primarily attributable to funding the loss for the period.
Financing activities provided $578,984 for the three months ended December 31, 2010 and consisted of $467,550 in proceeds from the sale of common stock less expenses of $75,777, and $187,211 from advances from related parties.
Based upon our current financial condition, we do not have sufficient cash to operate our business at the current level for the next twelve months. We intend to fund operations through increased sales and debt and/or equity financing arrangements, which may be insufficient to fund expenditures or other cash requirements. We plan to seek additional financing in a private equity offering to secure funding for operations. There can be no assurance that we will be successful in raising additional funding. If we are not able to secure additional funding, the implementation of our business plan will be impaired. There can be no assurance that such additional financing will be available to us on acceptable terms or at all. Our recent financings are discussed below.
On October 28, 2010, we began offering under a Private Placement Memorandum up to 6,000,000 shares of our common stock at an offering price of $0.75 per share. Offering expenses are estimated to be equal to 10% of the offering price. For the period October 28, 2010 through February 10, 2011, we sold 623,400 shares of common stock and received net proceeds of $391,773.
Off Balance Sheet Arrangements
As of December 31, 2010, there were no off balance sheet arrangements.
Going Concern
We have negative working capital, have incurred losses since inception, and have not yet received revenues from sales of products or services. These factors create substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustment that might be necessary if we are unable to continue as a going concern.
Our ability to continue as a going concern is dependent on our generating cash from the sale of common stock and/or obtaining debt financing and attaining future profitable operations. Management’s plans include selling our equity securities and obtaining debt financing to fund our capital requirement and ongoing operations; however, there can be no assurance we will be successful in these efforts.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
A smaller reporting company is not required to provide the information required by this Item.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of December 31, 2010. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2010, our disclosure controls and procedures were not effective due to the presence of material weaknesses in internal control over financial reporting.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified the following material weaknesses which have caused management to conclude that, as of December 31, 2010, our disclosure controls and procedures were not effective: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.
Remediation Plan to Address the Material Weaknesses in Internal Control over Financial Reporting
Our company plans to take steps to enhance and improve the design of our internal controls over financial reporting. During the period covered by this quarterly report on Form 10-Q, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we plan to implement the following changes during our fiscal year ending September 30, 2011: (i) appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting. The remediation efforts set out are largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.
We are unable to remedy our controls related to the inadequate segregation of duties and ineffective risk management until we receive financing to hire additional employees. In January 2011, we hired an outsourced controller to improve the controls for accounting and financial reporting.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the three months ended December 31, 2010 that have materially affected, or are reasonable likely to materially affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
We are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.
Item 1A: Risk Factors
A smaller reporting company is not required to provide the information required by this Item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None
Item 3. Defaults upon Senior Securities
None
Item 4. (Removed and Reserved)
Item 5. Other Information
None
Item 6. Exhibits
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Exhibit Number
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Description of Exhibit
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SIGNATURES
In accordance with the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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Regenicin, Inc.
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Date:
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February 14, 2010
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By: /s/ Randall McCoy
Randall McCoy
Title: Chief Executive Officer and Director
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