ENTEST GROUP, INC. - FORM 10-K

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EX-10.9 - 8% ASHER NOTE $42,500 - ENTEST GROUP, INC.	entest_ex10-9.htm
EX-31.1 - ENTEST GROUP, INC.	entest_ex31-1.htm
EX-32.1 - ENTEST GROUP, INC.	entest_ex32-1.htm
EX-31.2 - ENTEST GROUP, INC.	entest_ex31-2.htm
EX-32.2 - ENTEST GROUP, INC.	entest_ex32-2.htm
EX-10.12 - 8% ASHER NOTE $32,500 - ENTEST GROUP, INC.	entest_ex10-12.htm
EX-10.10 - 8% ASHER NOTE $37,500 - ENTEST GROUP, INC.	entest_ex10-10.htm
EX-10.11 - 8% ASHER NOTE $35,000 - ENTEST GROUP, INC.	entest_ex10-11.htm

United States Securities and Exchange Commission

Washington, D.C. 20549

Form 10-K

[X]	ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934: For the fiscal year ending August 31, 2011

[ ]	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934: For the transition period from ___________ to ___________.

Commission file number: 333-154989

ENTEST BIOMEDICAL, INC.

(Name of small business issuer in its charter)

Nevada		26-3431263
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

4700 Spring Street, Suite 203, La Mesa, California, 91942

(Address of Principal executive offices)

Issuer’s telephone number: (619) 702-1404

_______________

Securities registered under Section 12(b) of the “Exchange Act” None

Securities registered under Section 12(g) of the Exchange Act: None

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 is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Large accelerated filer [ ]	Accelerated filer [ ]	Non accelerated filer [ ]
Smaller reporting Company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes [ ] No [X]

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter: $.$32,338,347

As of November 11, 2010 Entest BioMedical, Inc. had 20,890,501 common shares outstanding and 5,000 Series AA preferred shares outstanding.

In this annual report, the terms “Entest BioMedical, Inc.. ”, “Entest”, “Company”, “we”, or “our”, unless the context otherwise requires, mean Entest BioMedical, Inc., a Nevada corporation, and its subsidiary.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This annual report on Form 10-K and other reports that we file with the SEC contain statements that are considered forward-looking statements. Forward-looking statements give the Company’s current expectations, plans, objectives, assumptions or forecasts of future events. All statements other than statements of current or historical fact contained in this annual report, including statements regarding the Company’s future financial position, business strategy, budgets, projected costs and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “estimate,” “plans,” “potential,” “projects,” “ongoing,” “expects,” “management believes,” “we believe,” “we intend,” and similar expressions. These statements are based on the Company’s current plans and are subject to risks and uncertainties, and as such the Company’s actual future activities and results of operations may be materially different from those set forth in the forward looking statements. Any or all of the forward-looking statements in this annual report may turn out to be inaccurate and as such, you should not place undue reliance on these forward-looking statements. The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy and financial needs. The forward-looking statements can be affected by inaccurate assumptions or by known or unknown risks, uncertainties and assumptions due to a number of factors, including:

·	dependence on key personnel;
·	competitive factors;
·	degree of success of research and development programs
·	the operation of our business; and
·	general economic conditions

These forward-looking statements speak only as of the date on which they are made, and except to the extent required by federal securities laws, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements contained in this annual report.

PART I

Item 1. Business

GENERAL DEVELOPMENT OF BUSINESS OF ENTEST

We were incorporated in the State of Nevada on September 24, 2008 as JB Clothing Corporation. Until July 10, 2009, our principal business objective was the offering of active/leisure fashion design clothing.

On July 10, 2009 we abandoned our efforts in the field of active/leisure fashion design clothing when we acquired 100% of the share capital of Entest BioMedical, Inc., a California corporation, (“Entest CA”) from Bio-Matrix Scientific Group, Inc. (“BMSN”) for consideration consisting of 10,000,000 shares of the common stock of the Company and the cancellation of 10,000,000 shares of the Company owned and held by Mr. Rick Plote.

As a result of this transaction, the former stockholder of Entest CA held approximately 70% of the voting capital stock of the Company immediately after the transaction. For financial accounting purposes, this acquisition was a reverse acquisition of the Company by Entest CA under the purchase method of accounting, and was treated as a recapitalization with Entest CA as the acquirer. As of November 1, 2011 the former stockholder of Entest CA held approximately 48% of the outstanding common shares of the Company.

Upon acquisition of Entest CA, we abandoned our efforts in the field of active/leisure fashion design clothing. Our business is currently the business of Entest CA, and we are currently a development stage company which intends to develop and commercialize therapies, medical devices and medical testing procedures. On July 12, 2009 we adopted the name of Entest CA when we changed our name to Entest BioMedical, Inc.

The Company intends to develop and commercialize therapies, medical devices and medical testing procedures. The Company’s current strategy is to develop and commercialize therapies, medical devices and medical testing procedures for the veterinary market. It is believed by the Company that any required regulatory approvals can be obtained much more rapidly with regard to products and services developed for the veterinary market and that the achievement of successful clinical trials and commercialization of such products and services may allow the company to enter into collaborations with larger pharmaceutical companies for the purpose of developing and commercializing these products and services for human usage.

The Company is currently focusing its efforts and allocating its resources towards:

(a) The development and commercialization of ImenVax™, a therapeutic cancer vaccine for use in canines

(b) The acquisition of veterinary clinics

On January 4, 2011, 2010, Entest CA acquired from Pet Pointers, Inc. ( a California corporation doing business as McDonald Animal Hospital) and Dr. Gregory McDonald DVM all the goodwill from Dr. McDonald and assets of Pet Pointers, Inc except cash and accounts receivables used in connection with the operation of a veterinary medical clinic located at 225 S. Milpas Street, Santa Barbara, CA 93103 which conducts business under the name McDonald Animal Hospital .

Consideration for the acquisition consisted of:

I. $70,000 in cash

II. $210,000 of the common shares of the Company valued at the closing price per share as of January 4, 2011

III. Payment of no more than $78,000 to a creditor of the sellers to be paid in monthly installments of $1,500 per month

IV. Payment of no more than $25,000 to additional creditors of the sellers to be paid in monthly installments of $825 per month

V. Payment of $50,000 to Dr. McDonald on the first business day of the fourth month following the closing of the acquisition (“Closing”)

The Company is also obligated to make payment to Dr. McDonald of that number of shares of common stock of the Company’s common stock valued at the closing bid price of the trading day immediately prior to issuance which shall equal $70,000 upon completion of the first calendar year during the Employment Period (as such period is defined in the employment agreement entered into between McDonald and Entest CA dated December 31, 2010 ) in which the business acquired generates gross sales in excess of $700,000.

Principal Products and Services

The Company is currently focusing its research and development efforts toward the successful development and commercialization of the ImenVax family of canine cancer vaccines as well as the acquisition of existing veterinary clinics / hospitals to be utilized as potential distribution channels for its ImenVax family of canine cancer vaccines. The Company believes that, in addition to serving as distribution channels for the Company’s immuno-therapeutic cancer vaccine for canines, these clinics will be able to generate revenue for the Company from current operations. It is anticipated by the Company that data collected from canine cancer treatment will provide support for eventual use of this therapy in humans and such therapy may be developed and commercialized by the Company in collaboration with larger and better capitalized pharmaceutical companies.

ImenVax™ I

ImenVax™ I, currently under development by the Company, is a therapeutic for canine cancer which utilizes the patient’s own tumor cells to induce the immune system to attack the remaining tumor cells. Tumor cells extracted from the patient are loaded into an implantable device where the tumor antigens are released to induce an anti-tumor response which kills the remaining tumors in the patient. The device is comprised of a chamber that includes a porous membrane wall that prevents the implanted cells from escaping the device but allows the tumor cells to survive and shed cancer antigens into the patient. The exposure of tumor specific antigens to the patient’s immune cells will stimulate anti-cancer immune responses.

The Company is in the process of conducting a ten dog study at the McDonald Animal Hospital to determine safety of the ImenVax™ I therapy in veterinary cancer application (“Safety Study”). As of November 1, 2011 three dogs suffering from oral melanoma have been administered the therapy with neither dog suffering any material adverse reaction.

ImenVax™ II

The Company is also developing a version of ImenVax™ called ImenVax™ II utilizing cell lines for sustained release of immunologically relevant cytokines for maximum anti-tumor immune responses. It is believed by the Company that this controlled release of cytokines will act as an adjuvant to be combined with patient’s tumor cells (antigens) within an implantable membrane encapsulation device.

ImenVax™ III

ImenVax™ III is a canine cancer vaccine under development by the Company which does not require tumor processing. ImenVax™ III treats existing tumors through stimulating immune responses to: a) kill tumor cells directly; b) indirectly kill tumor cells by cutting off the tumor blood supply; and c) block the ability of the tumor to suppress the immune system. ImenVax™ III’s primary mode of action is generated through trophoblasts derived from human placental tissue.

ENT-576™

ENT-576™ is a proprietary therapy being developed by the Company for the treatment of Chronic Obstructive Pulmonary Disease (COPD) which utilizes a stimulator (either a low level laser or an FDA approved biochemical drug) to direct stem cells to diseased lung tissue in order to cause damaged tissue to regenerate. The Company does not anticipate conducting further research and development related to ENT-576™ until completion of the Safety Study due to limited resources available to the Company

McDonald Animal Hospital

The Mc Donald Animal Hospital Inc. (“MAH”), a full service veterinary clinic located in Santa Barbara, California which is wholly owned by the Company, offers a full range of general medical and surgical services for companion animals including health examinations, diagnostic testing, routine vaccinations, spaying, neutering and dental care. MAH also offers animal boarding services to its customers as well as offering a variety of pet products including pet food, flea collars and other accessory products. The Company also offers pet products to the general public through the websites www.entpets.com and www.mydiscountpetsupplied.com.

Distribution methods of the products or services:

The Company intends to distribute its products and services through several channels including:

	(a)	utilization of an internal sales force to market directly to veterinary professionals
	(b)	distribution through acquired veterinary clinics
	(c)	utilization of contract sales organizations

Competitive business conditions and Entest's competitive position in the industry and methods of competition

We are recently formed and have yet to achieve revenues or profits. The animal health pharmaceutical and biologics industries in which we intend to compete are highly competitive and characterized by rapid technological advancement. Many of our competitors have greater resources than we do. Also, The companion animal healthcare industry (e.g. veterinary hospitals and veterinarians) although highly fragmented is also highly competitive.

We intend to be competitive by acquiring veterinary hospitals to serve as distribution channels for the products and services we produce. We also intend to be competitive by utilizing the services and advice of individuals that we believe have expertise in their field in order that we can concentrate our resources on projects in which products and services in which we have the greatest potential to secure a competitive advantage may be developed and commercialized .

To that effect, we have established a Scientific Advisory Board of (the Advisory Board) comprised of individuals who we believe have a high level of expertise in their professional fields and who have agreed to provide counsel and assistance to us in (a) determining the viability of proposed projects (b) obtaining financing for projects and (c) obtaining the resources required to initiate and complete a project in the most cost effective and rapid manner. The members of the Advisory Board have also agreed to act as consultants on a project by project basis in addition to other services they may provide under any other contractual obligations to us.

Members of the Advisory Board include as follows:

Dr. Brian Koos, MD:

Dr. Brian Koos is Professor and Vice Chair at Obstetrics and Gynecology at the David Geffen School of Medicine at UCLA, Professor at the Brain Research Institute at the UCLA School of Medicine, and Director of the Maternal-Fetal Medicine Fellowship (UCLA). Dr. Koos received his MD from Loma Linda University School of Medicine.

Dr. Steven Josephs, PhD:

Dr. Josephs is currently serving as Executive Manager and Chief Scientific Officer of TherInject LLC, a company involved in the development of pharmaceuticals to be utilized for the treatment of cancer. Dr. Josephs has 34 years of experience in research and clinical product development and production for biologics, gene therapy and medical devices.

Dr. Josephs has previously served as Director of Research and Development for Therapheresis, Inc, Head of Virology and Senior Research Scientist for Baxter Healthcare Corporation, and Director of Molecular Biology at Universal Biotechnology, Inc where Dr. Josephs directed a group performing contract molecular biology services for government and private industry.

Dr. Josephs has also worked for the National Cancer Institute where his duties included studies of the human T-cell leukemia virus as well as sequence determination and functional analyses of HIV. Dr. Josephs is the co-discoverer of human herpesvirus-6, the etiologic agent of Roseola.

Dr. Josephs holds a B.A. in Chemistry, a Ph.D. in Chemistry and has been granted a Professional Certificate in Drug Development and an ADMET process certificate by the University of California, San Diego. Dr. Josephs has also earned a Master of Science in Science Teaching.

Dr. Ewa Carrier, MD:

Dr. Carrier is Associate Professor of Clinical Medicine and Pediatrics, University of California San Diego

Blood and Marrow Transplant Program.

Dr. Carrier has served as principal investigator for the following clinical protocols:

Protocol For The Use of AMD3100 to Mobilize Peripheral Blood Stem Cells For Collection and Transplantation - Emergency Compassionate Use, Single Patient IND.

Erythropoietic Differentiation of Human ES Cells.

CTLA-4 Blockade with MDX-010 to Induce Graft-Versus-Malignancy Effects Following Allogeneic Hematopoietic Stem Cell Transplantation. (NCI Protocol Number P-6082) (closed to accrual).

Phase 3 Randomized, Open-label Clinical Trial of Tanespimycin (KOS-953) plus Bortezomib Compared to

Bortezomib Alone in Patients with Multiple Myeloma in First Relapse [Protocol KAG-301] [Protocol Version 21-JUL-2007]

Autologous Stem Cell Transplant for Myasthenia Gravis.

Collection of Bone Marrow from Patients with Multiple Myeloma for Study of New Therapies.

A Pilot Study of High-Dose Immunosuppression and Autologous Stem Cell Infusion in Patients with Systemic Lupus

Erythematosus Refractory to Conventional Therapy (closed to accrual).

Autologous Stem Cell Transplant for Myasthenia Gravis – a retrospective analysis.

Dr Carrier has served as co investigator for the following clinical protocols:

Pilot Study of Allogeneic Peripheral Blood Progenitor Cell Transplantation in Patients with Chemotherapy-Refractory or Poor- Prognosis Metastatic Breast Cancer.

Pilot Study of a Non-Myeloablative Preparative-Regimen for Allogeneic Peripheral Blood Progenitor Cell Transplantation in Patients with Chronic Myeloid and Lymphoid Malignancies.

Phase II Study of a Non-Myeloablative Preparative-Regimen for Allogeneic Hematopoietic Cell Transplantation From Matched Unrelated Donors in Patients with Chronic Myeloid and Lymphoid Malignancies.

A Phase II Study of Tumor-Specific Idiotype (Id) and Soluble GM-CSF Vaccination Following Autologous Peripheral Blood Stem Cell Transplantation in Patients with Low-Grade Non-Hodgkin's Lymphomas.

Phase II Study of FavId (Tumor-Specific Idiotype-KLH) and Soluble GM-CSF Immunotherapy in Patients with Stable or Progressive Grade 1 or 2 Follicular B-Cell Lymphomas [FavId01].

Phase II Trial of Rituxan® plus FavId™ (Tumor-Specific Idiotype-KLH) and GM-CSF Immunotherapy in Patients with Grade 1 or 2 Follicular B-Cell Lymphoma [FavId-04].

Dr. Feng Lin, MD:

Dr. Lin is the Director of Research and Development of Entest BioMedical, Inc. and has previously served as Director of Research and Development of Bio-Matrix Scientific Group, Inc., the Company’s largest shareholder.

Previously, Dr. Lin was a Senior Research Scientist, Research & Development with Inovio BC, San Diego and Postdoctoral Fellow in Burnham Institute for Medical Research, La Jolla.

Dr. Lin received his M.D. from Central South University Xiangya School of Medicine, Changsha, China, and received a M.S. Biochemistry & Molecular Biology and a Ph.D. Hematology & Physiology from the same institution.

Dr. Vladimir I. Bogin, MD, ABIM:

Dr. Bogin is currently the President and CEO of Cromos Pharma, a contract research organization that specializes in biopharmaceutical clinical outsourcing into Russia and Eastern Europe. From 2008 to 2009 he served as Director of Boehringer Ingelheim (a privately held pharmaceutical company) where he was in charge of the phase IV program for Dabigatran Etexilate.

Dr. Bogin studied medicine at the Yale University School of Medicine and the University of Rochester School of Medicine and Dentistry.

Gregory C. McDonald, D.V.M.

Dr. McDonald is a practicing veterinarian with over 30 years of clinical veterinary experience. He received his Doctor of Veterinary medicine degree (DVM) from Ohio State University in 1979. Currently he is the principal veterinarian of the McDonald Animal Hospital, which he founded over 24 years ago. His practice includes veterinary applications of stem cell therapies, as well as traditional veterinary medicine. Dr. McDonald has authored numerous publications on various aspects of veterinary care.

Brenda S. Phillips, D.V.M.

Dr. Phillips is a veterinary oncologist and co owner of Veterinary Specialty Hospital of San Diego. She received her Doctor of Veterinary Medicine in 1992 from Michigan State University, College of Veterinary Medicine.

The U.S. market for veterinary services is highly fragmented. According to the American Veterinary Medical Association, there were more than 51,000 veterinarians practicing at the end of 2009. The principal factors in a pet owner’s decision as to which veterinarian to use include convenient location and hours, personal recommendations, reasonable fees and quality of care.

In order to be competitive in the animal healthcare industry, we direct our marketing efforts toward increasing the number of annual visits from existing clients through customer education efforts and toward attracting new clients to MAH through local print advertising campaigns.

Sources and availability of raw materials and the names of principal suppliers

The supplies and materials required to conduct our operations are available through a wide variety of sources and may be obtained through a wide variety of sources.

Patents, trademarks, licenses, franchises, concessions, royalty agreements or labor contracts, including duration

Entest has not been granted any patents. Entest is not currently party to any royalty agreements. Entest is not party to any binding labor contracts.

Need for any government approval of principal products or services, effect of existing or probable governmental regulations on the business

ImenVax™ I and ImenVax™ II are Veterinary Biologics. The U.S. Department of Agriculture (USDA) is authorized under the 1913 Virus-Serum-Toxin Act to ensure that all veterinary biologics produced in, or imported into, the United States are not worthless, contaminated, dangerous, or harmful. The Veterinary Biologics Program of the USDA's Animal and Plant Health Inspection Service (“APHIS”) oversees the veterinary biologics industry in the United States.

Domestic manufacturers of veterinary biologics, for domestic use or for export, are required to possess a valid U.S. Veterinary Biologics Establishment License and an individual U.S. Veterinary Biologics Product License for each product produced for sale.

Prior to being granted a U.S. Veterinary Biologics Product License, the applicant must submit detailed information including test reports and research data sufficient to establish purity, safety, potency and efficacy of the product, an Outline of Production, and information regarding labeling and facilities that are to be used in preparation.

Prior to being granted a U.S. Veterinary Biologic Establishment License, the applicant must submit detailed information regarding the facilities and the qualifications of key personnel and must submit to an inspection of the facilities by the Center for Veterinary Biologics, a division of the USDA. To qualify for an establishment license, an applicant also must qualify for at least one product license.

In the event that a veterinary clinic or clinics can be acquired, the Company plans to attempt to distribute ImenVax™ I prior to licensure under the exemption provided by 9 CFR 107.1, which exempts a veterinary biologic from Federal regulation if the product was manufactured by veterinarians AND intended solely for use with their clients' animals under a veterinarian-client-patient (VCP) relationship.

ENT-576™ can be considered a “combination product” whose primary mode of action is through animal stem cells (a veterinary biologic) It is intended that the Company will obtain a U.S. Veterinary Biologics Establishment License and a U.S. Veterinary Biologics Product License from the U.S. Department of Agriculture. ENT-576™ can also be administered without license if administered in accordance with the safe harbor provided by 9 CFR 107.1.

ImenVax™ III can be considered a combination product whose primary mode of action is generated through trophoblasts derived from human placental tissue. Entest will be required to obtain approval from the US Food and Drug Administration (FDA) in order to market ImenVax™ III. Entest will apply for an Investigational New Animal Drug exemption (INAD) in order that the product may be shipped for testing and trials and will submit a New Animal Drug Application for ImenVax™ III.

The practice of veterinary medicine is primarily subject to State regulation. The Company will be required to comply with the statutes rules and regulations of the State in which an acquired veterinary clinic is located. Within the State of California where MAH is located , the practice of veterinary medicine is primarily governed pursuant to The California Veterinary Medicine Practice Act (CA Bus.& Prof. Code § 4800 et seq.).

Amount spent during the last fiscal year research and development activities

During the fiscal year ended August 31, 2011 we expended $109,063 on research and development activities.

Costs and effects of compliance with environmental laws (federal, state and local);

Entest has not incurred any unusual or significant costs to remain in compliance with any environmental laws and does not expect to incur any unusual or significant costs to remain in compliance with any environmental laws in the foreseeable future.

Number of total employees and number of full-time employees

As of November 1, 2011, Entest has ten employees all of which are full time.

Item 2. Properties

On June 15, 2009 Entest CA entered into an agreement with Bio-Matrix Scientific Group, Inc. (“BMSN”) whereby Entest CA has agreed to sublease approximately 3,000 square feet of office space from BMSN for 36 months commencing on June 30, 2009 and ending on June 30, 2012 for consideration consisting of monthly rental payments of $4,100 per month. Since October 2010 the Company has been paying rental expenses directly to the owner of the subleased space.

This property is utilized as office space. We believe that the foregoing property is adequate to meet its current needs. While it is anticipated that we will require access to laboratory facilities in the future, we believes that access to such facilities are available from a variety of sources.

MAH is currently located at a 4,470 square foot facility located at 225 South Milpas Street, Santa Barbara, California. The property is utilized by the Company pursuant to a lease between the property owner and Dr. Gregory McDonald, who is employed as Managing Licensee and Supervising Veterinarian of MAH by the Company (“Milpas Lease”). All rental payments required by the Milpas Lease are paid by the Company and the Asset Purchase Agreement by and between Dr. McDonald, Pet Pointers, Inc and the Company (pursuant to which the Company acquired MAH) provides that the property is subleased by Dr. McDonald to the Company upon terms and conditions identical to the Milpas Lease. Currently, the Company is paying rent of $7,576 per month as required by the Milpas Lease. The Milpas Lease expires on June 30, 2012 and provides for two extensions of seven and ten years respectively.

This property is utilized as a veterinary hospital . We believe that the foregoing property is adequate to meet its current needs.

Item 3. Legal Proceedings

On February 3, 2011, a Complaint (“Complaint”) was filed in the U.S. District Court Middle District of the State of Pennsylvania against the Company, the Company’s Chairman and BMSN by 18KT.TV LLC (“Plaintiffs”) seeking to recover general damages from Entest BioMedical, Inc. in excess of $125,000. The Complaint alleges breach of contract and unjust enrichment relating to an investor relations contract executed by the Company and Craig Fischer (on behalf of 18KT.TV LLC). The Compliant also seeks similar damages from Bio-Matrix Scientific Group Inc. and $50,000 in damages from David Koos (Chairman & CEO of both Entest BioMedical, Inc. and Bio-Matrix Scientific Group Inc.). The Company believes that the allegations in the complaint are without merit and intends to vigorously defend its interests in this matter. At this time, it is not possible to predict the ultimate outcome of these matters.

Item 4. Submission of Matters to a Vote of Security Holders

No matter was submitted during the fourth quarter of the fiscal year covered by this report to a vote of security holders, through the solicitation of proxies or otherwise.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

The Company’s common stock is a "penny stock," as defined in Rule 3a51-1 under the Exchange Act. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its sales person in the transaction, and monthly account statements showing the market value of each penny stock held in the customer's account. In addition, the penny stock rules require that the broker-dealer, not otherwise exempt from such rules, must make a special written determination that the penny stock is suitable for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure rules have the effect of reducing the level of trading activity in the secondary market for a stock that becomes subject to the penny stock rules. So long as the common stock of the Company is subject to the penny stock rules, it may be more difficult to sell common stock of the Company.

The Company’s authorized capital stock consists of 70,000,000 shares of common stock with a par value $0.001, and 5,000,000 shares of preferred stock with a par value $0.001 per share. As of November 1, 2011 there are 20,890,501 shares of common stock issued and outstanding and 5,000 shares of Series AA preferred stock issued and outstanding.

(a) Our common stock is traded on the OTCQB Tier of OTC Markets under the symbol "ENTB”. Prior to August 11, 2009 there was no established trading market for our common stock. From August 11, 2009 to February 23, 2011 our common stock traded primarily on the OTCBB. Below is the range of high and low bid information for our common equity for each quarter within the last two fiscal years. These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.

September 1, 2009 to August 31, 2010	High		Low
First Quarter	$	5.00	$	0.55
Second Quarter		1.01		0.35
Third Quarter		2.49		0.83
Fourth Quarter	$	2.09	$	0.66
September 1, 2010 to August 31, 2011	High		Low
First Quarter	$	1.30	$	0.41
Second Quarter		4.25		0.93
Third Quarter		3.00		1.05
Fourth Quarter	$	1.73	$	0.29

Holders

As of August 31, 2010 there were approximately 325 holders of our Common Stock.

Dividends

No cash dividends were paid during the fiscal year ending August 31, 2011. We do not expect to declare cash dividends in the immediate future.

Recent Sales of Unregistered Securities

On August 29, 2011, the Company issued 143,000 common shares (“Shares”) to Dr. Gregory McDonald in full satisfaction of $50,000 owed to Dr. McDonald.

The Shares were issued pursuant to Section 4(2) of the Securities Act of 1933, as amended. No underwriters were retained to serve as placement agents for the sale. The shares were sold directly through our management. No commission or other consideration was paid in connection with the sale of the shares. There was no advertisement or general solicitation made in connection with this Offer and Sale of Shares.

A legend was placed on the certificate that evidences the Shares stating that the Shares have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale of the Shares.

On August 29, 2011 the Company issued 11,000 common shares (“Shares”) to an employee as consideration for services rendered.

On October 7, 2011 the Company issued 50,000 common shares (“Shares”) to an independent consultant as consideration for services.

Item 6. Selected Financial Data

As we are a “smaller reporting company” as defined by Rule 229.10(f)(1), we are not required to provide the information required by this Item.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

As of August 31, 2011, we had $ 43,901 Cash on hand and as of August 31, 2010 we had $206 Cash on hand.

The increase in Cash of approximately 2,120% is primarily due to sales of .common stock for cash, increased borrowings, sales of convertible notes as well as revenues attributable to the operations of MAH offset by an increase in operating costs relative to the prior fiscal year.

As of August 31, 2011, we had Trade Accounts Receivable of $ 3,135 and as of August 31, 2010 we had Trade Accounts Receivable of $0.

The increase in Trade Accounts Receivable was attributable to money owed to MAH by customers for services rendered.

As of August 31, 2011, we had a balance of $62,200 in Current Portion of Prepaid Expenses compared to August 31, 2010 where the balance totaled $54,200.

The increase in Current Portion of Prepaid Expenses of approximately 15% was primarily attributable to the applicable portion of Prepaid Rent being reallocated from a non-current asset to a current asset offset by reductions in prepaid rent of $18,100.

As of August 31, 2011, we had a balance of Employee Receivables of $4,349 and as of August 31, 2010 we had a balance of Employee Receivables of $1,396.

This 211% increase in Employee Receivables is attributable to $4,349 paid by the Company on behalf of the former owner of the McDonald Animal Hospital for liabilities incurred by that business prior to its acquisition by the Company offset by the application by the Company of $1,396 of Employee Receivables towards bonus earned.

As of August 31, 2011, the balance in Non-Current Portion of Prepaid Expenses totaled $10,300 compared to the August 31, 2010 balance of $28,400.

The Non-Current Portion of Prepaid Expenses decreased by approximately 64% was primarily attributable to the applicable portion of Prepaid Rent being reallocated from a non-current asset to a current asset.

As of August 31,2011 we had Property & Equipment (Net of Accumulated Depreciation) of $17,293 and as of August 31, 2010 we had Property & Equipment (Net of Accumulated Depreciation) of $-0-.

The increase in Property & Equipment (Net of Accumulated Depreciation) was due to the equipment and furniture purchased in the acquisition of the business of the McDonald Animal Hospital.

As of August 31, 2011, we had Goodwill of $405,000 and as of August 31, 2010 we had Goodwill of $-0-.

The increase in Goodwill is due to the goodwill purchased in connection with the acquisition the business of the McDonald Animal Hospital.

As of August 31, 2011, we had Intangible Assets (Net of Accumulated Amortization) of $1,828 and as of August 31, 2010 we had Intangible Assets (Net of Accumulated Amortization) of $-0-.

The increase in Intangible Assets (Net of Accumulated Amortization) is attributable to the software acquired in connection with the acquisition the business of the McDonald Animal Hospital.

As of August 31, 2011, we had Deposits in the amount of $0 and as of August 31, 2010 we had Deposits of $1,059-.

The decrease in Deposits of 100% is attributable to a deposit of $1,059 sent by the Company to San Diego Gas and Electric Company being applied toward utility charges incurred by the Company.

As of August 31, 2011, we had Accounts Payable of $27,564 and as of August 31, 2009 we had Accounts Payable of $21,342 .

The increase in Accounts Payable of approximately 30% is primarily attributable to an increase in outstanding obligations incurred in the course of business primarily attributable to the operations of MAH.

As of August 31, 2011 we had Convertible Notes Payable (net of unamortized discount resulting from a beneficial conversion feature) totaling $42,430 and as of August 31, 2010 we had Convertible Notes Payable (net of unamortized discount resulting from a beneficial conversion feature) totaling $0.

The increase in Convertible Notes Payable (net of unamortized discount resulting from a beneficial conversion feature) is attributable to the issuance by the Company of three 8% convertible promissory notes to an investor in the amounts of $42,500, $37,500 and $35,000 respectively during the fiscal year ended August 31, 2011.

The Company has recognized beneficial conversion features of $16,398, $37,500 and $35,000 respectively which have been recorded as discounts to the carrying value of the notes and which are amortized under the interest method.

As of August 31, 2011 we had Amounts Due to Affiliates/Other of $8,000 and as of August 31, 2010 we had Amounts Due to Affiliate/Other of $-0-.

The increase in Amounts Due to Affiliate/Other is attributable to $8,000 due and payable to TheraCyte, Inc. pursuant to an agreement entered into by and between the Company and TheraCyte, Inc.

As of August 31, 2011, we had Accrued Expenses of $67, 206 and as of August 31, 2010 we had Accrued Expenses of $128,095.

The decrease in accrued expenses of approximately 47% is primarily attributable to the forgiveness of $259,058 of Salaries accrued but unpaid due to David Koos, the issuance of 5,000 shares of Series AA Preferred Stock to David Koos in satisfaction of $2,000 in salary accrued but unpaid, the payment of $19,821 of accrued interest, and the payment of $79,936 in accrued taxes offset by offset by the incurring of approximately $299,601 of expenses accrued but unpaid.

Material Changes in Results of Operations

Revenues were $349, 141 for the year ended August 31, 2010 and -0- for the year ended August 31, 2010. Net losses were $ 951,783 for the year ended August 31, 2010 and $544,891 for the same period ended 2010, an increase of approximately 74%.

This increase in Net Losses is primarily attributable to increases to Costs of Revenue, General and Administrative Expenses, Rental Expenses, Interest Expenses , Research and Development costs and Consulting Expenses offset by revenues provide by the McDonald Animal Hospital.

We feel we will not be able to satisfy its cash requirements over the next twelve months and shall be required to seek additional financing.

We currently plan to raise additional funds primarily by obtaining governmental and non-governmental grants, offering securities for cash and acquiring existing vet clinics with the ability to generate cash flow to fund operations.

We have yet to decide what type of offering we will use or how much capital we will raise. There is no guarantee that we will be able to raise any capital through any type of offerings. We can give no assurance that any governmental or non-governmental grant will be obtained by us despite our best efforts. We cannot assure that we will be successful in obtaining additional financing necessary to implement our business plan. We have not received any commitment or expression of interest from any financing source that has given us any assurance that we will obtain the amount of additional financing in the future that we currently anticipate. For these and other reasons, we are not able to assure that we will obtain any additional financing or, if we are successful, that we can obtain any such financing on terms that may be reasonable in light of our current circumstances. We have acquired MAH. Although we have acquired MAH, no assurance can be made that MAH shall generate sufficient cash flow to fund our operations nor can any assurance be made that we can acquire one or more additional veterinary clinics in the near future or at all.

Sources of liquidity for the fiscal year ended August 31, 2011 consisted primarily of borrowings of $438,007 consisting of borrowings from our Chairman and CEO and a corporation controlled by our Chairman and CEO as well as borrowings from unaffiliated third parties, the sale of common shares for cash proceeds of approximately $200,000, and revenues from the operation of MAH.

Sources of liquidity for the fiscal year ended August 31, 2010 consisted primarily of an increase in loans from our Chairman and CEO and a corporation controlled by our Chairman and CEO totaling $128,416 as well as loans from an unaffiliated third party totaling $28,150 which were utilized to pay research and development expenses and for general and administrative expenses.

As of November 12, 2010 we are not party to any binding agreements which would commit Entest to any material capital expenditures.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

As we are a smaller reporting company, as defined by Rule 229.10(f)(1), we are not required to provide the information required by this Item.

Item 8. Financial Statements and Supplementary Data

FINANCIAL STATEMENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To: The Board of Directors and Stockholders

Entest BioMedical, Inc.

I have audited the accompanying consolidated balance sheet of Entest BioMedical, Inc. as of August 31, 2011 and 2010 and the related statements of operations, stockholders’ equity and cash flows for the years ended August 31, 2011 and 2010, and for the period from inception (August 22, 2008) to August 31, 2011. These financial statements are the responsibility of the Company’s management. My responsibility is to express an opinion on these financial statements based on my audit.

Except as discussed in the following paragraph, I conducted my audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor was I engaged to perform, an audit of its internal control over financial reporting. My audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but do not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, I express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provides a reasonable basis for my opinion.

In my opinion, the financial statements referred to in the first paragraph present fairly, in all material respects, the financial position of Entest BioMedical, Inc. as of August 31, 2011 and 2010 and the results of its operations and changes in stockholders equity and cash flows for the years ended August 31, 2011 and 2010, and the period from inception (August 22, 2008) to August 31, 2011 in conformity with accounting principles generally accepted in the United States.

The accompanying financial statements have been prepared assuming that the Company is a going concern. As discussed in Note 4 to the financial statements, the Company has not generated income and has accumulated losses. This raises substantive doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 8. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/ s /John Kinross-Kennedy

John Kinross-Kennedy

Certified Public Accountant

Irvine, California

October 31, 2011

Entest Biomedical, Inc.
(A Development Stage Company)
Consolidated Balance Sheet
As of August 31, 2011 and 2010


		2011			2010

ASSETS
Current Assets
Cash	$	43,901		$	206
Trade accounts receivable, less allowance for uncollectible accounts
of $0 and $0 at August 31, 2010 and August 31, 2011, respectively		3,135			-
Inventory		7,986			-
Current Portion of Prepaid Expenses		62,200			54,200
Employee Receivable		4,349			1,396
Total Current Assets		121,571			55,802

Property & Equipment (Net of Accumulated Depreciation)		17,293			-
Goodwill		405,000			-
Intangible Assets (Net of Accumulated Amortization)		1,828			-

Long Term Assets
Non Current Portion of Prepaid Expenses		10,300			28,400
Non Current Portion of Deposits					1,059
Total Long Term Assets		10,300			29,459

TOTAL ASSETS	$	555,992		$	85,261

LIABILITES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable	$	27,564		$	21,342
Notes Payable		159,911			156,566
Convertible notes payable, net of discount		42,430			-
Due to Affiliate /Other		8,000			-
Accrued Expenses		67,206			128,095
Total Current Liabilities		305,111			306,003

Long Term Liabilities
Notes Payable		79,143			-
Total Long Term Liabilities		79,143			-

TOTAL LIABILITIES		384,254			306,003

STOCKHOLDERS' EQUITY
Common Stock, $0.001 par value, 70,000,000 shares
authorized, 17,553,040 and 20,840,501 shares issued and
outstanding as of August 31, 2010 and August 31, 2011		20,838			17,553
Preferred Stock , $0.001 par value 5,000,000 shares authorized,
0 shares issued and outstanding as of August 31, 2011 and 2010		-			-
Series AA Preferred Stock , $0.001 par value 100,000 shares authorized,		5			-
0 shares issued and outstanding at August 31, 2010 and 5,000 shares
as of August 31, 2011
Additional Paid in Capital		1,619,330			537,415
Contributed Capital		274,162			15,104
Accumulated Deficit		(1,742,597	)		(790,814	)

Total Stockholders' Equity		171,738			(220,742	)

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY	$	555,992		$	85,261

The Accompanying Notes are an Integral Part of these Financial Statements

Entest BioMedical, Inc.
(A Development Stage Company)
Consolidated Statement of Operations

							Period from
							Inception
							(Aug. 22, 2008)
	Year ended			Year ended			through
	August 31,			August 31,			August 31,
		2011			2010			2011
REVENUES
Total Revenues	$	349,141		$	-		$	349,141
TOTAL REVENUE		349,141						349,141

Cost of Revenue		89,405			-			89,405
GROSS PROFIT		259,736			-			259,736

COSTS AND EXPENSES
Research and Development		109,063			20,933			139,996
Rent Costs		108,596			49,200			165,996
General and Administrative		793,609			421,213			1,242,059
Incorporation Costs								408
Consultant's Expenses		159,518			46,470			405,988
Miscellaneous Expenses								78
Total Costs and Expenses		1,170,786			537,816			1,954,525

OPERATING LOSS		(911,050	)		(537,816	)		(1,694,789	)

OTHER INCOME AND EXPENSE

Other Income		99						99
Interest Expense		(24,404	)		(7,075	)		(31,479	)
Interest Expense attributable to
amortization of discount		(16,428	)					(16,428	)
		(40,733	)		(7,075	)		(47,808	)

LOSS BEFORE INCOME TAXES		(951,783	)		(544,891	)		(1,742,597	)
Income Taxes

NET INCOME (LOSS)	$	(951,783	)	$	(544,891	)	$	(1,742,597	)


BASIC AND DILUTED EARNINGS
(LOSS) PER SHARE		(0.048	)		(0.031	)

WEIGHTED AVERAGE
NUMBER OF COMMON
SHARES OUTSTANDING		19,895,368			17,540,420

The Accompanying Notes are an Integral Part of these Financial Statements

Entest BioMedical, Inc.
(A Development Stage Company)
Consolidated Statement of Stockholders' Equity
From August 22, 2008 (Inception) through August 31, 2011

														Accumulated
														Deficit
							Series AA		Additional			Contrib-		during the
	Common						Preferred		Paid-in			uted		Development
	Shares			Amount			Shares	Amount	Capital			Capital		Stage			Total

Beginning balances Aug. 22, 2008		-		$	-				$	-		$	-	$	-		$	-
Shares issued to parent		1,500			408													408
Net Loss August 22, 2008
through August 31, 2008															(408	)		(408	)

Balances August 31, 2008		1,500		$	408				$	-		$	-	$	(408	)	$	-
Recapitalization in connection with
reverse acquisition		(1,500	)		(408	)				408			-		-			-
		10,000,000			10,000					(10,000	)		-		-			-
Common Shares issued in Reverse
Acquisition		4,000,000			4,000					(4,000	)		-		-			-
Increases in Contributed Capital		-			-					-			485		-			485
Common Shares issued for Cash		1,000,000			1,000					99,000			-		-			100,000
Restricted Stock Award issued to
employee		2,000,000			2,000					(2,000	)		-		-			-
Restricted Stock Award
compensation expense for the
year ended August 31, 2009		-			-					24,725			-		-			24,725
Common Stock issued to
consultant		50,000			50					199,950			-		-			200,000
Net Loss year ended Aug. 31, 2009															(245,515	)		(245,515	)

Balances August 31, 2009		17,050,000		$	17,050				$	308,083		$	485	$	(245,923	)	$	79,695
Common Shares issued for Cash		500,000			500					49,500			-		-			50,000
Restricted Stock Award
compensation expense for the
3 months ended Nov. 30, 2009		-			-					98,916			-		-			98,916
Common Stock as Compensation		3,040			3					4,557			-		-			4,560
Increases in Contributed Capital		-			-					-			4,263		-			4,263
Restricted Stock Award
compensation expense for the
3 months ended February 28, 2010		-			-					76,359			-		-			76,359
Increases in Contributed Capital		-			-					-			10,356		-			10,356
Net Loss year ended Aug. 31, 2010		-			-					-			-		(544,891	)		(544,891	)

Balances, August 31, 2010		17,553,040		$	17,553				$	537,415		$	15,104	$	(790,814	)	$	(220,742	)
Common Shares issued for Cash		2,217,600			2,217					215,383			-		-			217,600
Common Shares issued for Debt		781,712			780					340,387			-		-			341,167
Common Shares issued to Consultants		74,383			74					121,967			-		-			122,041
Common Stock issued to employees		163,766			164					303,235			-		-			303,399
Restricted Stock Awards issued to employee		50,000			50					(50	)		-		-			-
Restricted Stock Award Compensation
expense recognized		-			-					10,000			-		-			10,000
Discount on Convertible Debt recognized		-			-					88,998			-		-			88,998
Increases in Contributed capital		-			-					-			259,058		-			259,058
Preferred Stock issued for Accrued compensation							5,000	5		1,995								2,000
Net Loss Year ended August 31, 2011															(951,783	)		(951,783	)


Balances, August 31, 2011		20,840,501		$	20,838		5,000	$ 5	$	1,619,330		$	274,162	$	(1,742,597	)	$	171,738

The Accompanying Notes are an Integral Part of these Financial Statements

Entest BioMedical, Inc.
(A Development Stage Company)
Consolidated Statement of Cash Flows

							Period from
							Inception
							(Aug. 22, 2008)
	Year ended			Year ended			through
	August 31,			August 31,			August 31,
	2011			2010			2011

CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss)	$	(951,783	)	$	(544,891	)	$	(1,742,597	)
(Increase) Decrease in Trade Accounts Receivable		(3,135	)					(3,135	)
(Increase) Decrease in Inventory		(7,986	)					(7,986	)
(Increase) Decrease in Employee Receivable		(2,953	)		(1,396	)		(4,349	)
Increase (Decrease) in Accounts Payable		6,222						27,567
(Increase) Decrease in Prepaid Expenses		10,100			18,990			(72,500	)
(Increase) Decrease in Deposits		1,059			(800	)		-
Increase (Decrease) in Accrued Expenses		(60,889	)		(1,059	)		67,205
Stock issued as Compensation to Employees		362			128,094			204,923
Stock issued to Prepay Expenses					179,836
Stock issued as Compensation to Consultants		19						200,019
Net Cash Provided by (Used in) Operating Activities		(1,008,984	)		(221,226	)		(1,330,853	)

CASH FLOWS FROM FINANCING ACTIVITIES
(Increase) Decrease in Property and equip. additions (net)		(17,293	)					(17,293	)
(Increase) Decrease in Goodwill from acquisition		(405,000	)					(405,000	)
(Increase) Decrease in Intangible Assets (net)		(1,828	)					(1,828	)
Increase (Decrease) in Common stock issued for cash		2,217			500			3,717
Increase (Decrease) in Common stock issued for expenses		55						55
Increase (Decrease) in Due to Affiliate/Other		8,000						8,000
Increase (Decrease) in Due to Shareholder
Increase (Decrease) in Notes Payable		124,918			156,567			281,485
Stock issued in Payment of Debt		780						780
Increase (Decrease) in Contributed Capital		259,058			14,618			274,161
Increase (Decrease) in Additional paid in Capital		1,081,772			49,500			1,230,680
Net Cash Provided by Financing Activities		1,052,679			221,185			1,374,757

Net Increase in Cash		43,695			(41	)		43,901

Cash at Beginning of Period		206			250			-

Cash at End of Period	$	43,901		$	209		$	43,901

The Accompanying Notes are an Integral Part of these Financial Statements

Entest BioMedical, Inc.

(A Development Stage Company)

Notes to Consolidated Financial Statements

As of August 31, 2011

NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS

Entest BioMedical Inc. (the “Company”) was incorporated in the State of Nevada on September 24, 2008 as JB Clothing Corporation. Until July 10, 2009, the Company’s principal business objective was the offering of active/leisure fashion design clothing.

On July 10, 2009 the Company abandoned its efforts in the field of active/leisure fashion design clothing when it acquired 100% of the share capital of Entest BioMedical, Inc., a California corporation, (“Entest CA”).

The Company’s current business consists of the development and commercialization of immunotherapeutic therapies for the veterinary market as well as the acquisition and operation of veterinary hospitals.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. BASIS OF ACCOUNTING

The financial statements have been prepared using the basis of accounting generally accepted in the United States of America. Under this basis of accounting, revenues are recorded as earned and expenses are recorded at the time liabilities are incurred. The Company has adopted an August 31 fiscal year-end.

B. PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Entest CA, the Company’s wholly owned subsidiary. Significant inter-company transactions have been eliminated.

C. 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.

D. DEVELOPMENT STAGE

The Company is a development stage company that devotes substantially all of its efforts in the development of its business.

E. CASH EQUIVALENTS

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

F. PROPERTY AND EQUIPMENT

Property and equipment are recorded at cost. Maintenance and repairs are expensed in the year in which they are incurred. Expenditures that enhance the value of property and equipment are capitalized.

G. FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair value is the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. A fair value hierarchy requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of inputs required by the standard that the Company uses to measure fair value:

Level 1: Quoted prices in active markets for identical assets or liabilities

Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.

Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The Company’s financial instruments as of August 31, 2011 consisted of $159,911 of Notes Payable, $42,430 of Convertible Notes payable (net of discount), $8,000 due to TheraCyte, Inc, and $4,349 of Employee Receivables. The fair value of all of the Company’s financial instruments as of September 30, 2010 were valued according to the Level 2 input. The carrying amount of the financial instruments is equal to the fair value as determined by the Company

H. INCOME TAXES

The Company accounts for income taxes using the liability method prescribed by ASC 740, “Income Taxes.” Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the year in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized as income or loss in the period that includes the enactment date.

The Company applied the provisions of ASC 740-10-50, “Accounting For Uncertainty In Income Taxes”, which provides clarification related to the process associated with accounting for uncertain tax positions recognized in our financial statements. Audit periods remain open for review until the statute of limitations has passed. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the Company’s liability for income taxes. Any such adjustment could be material to the Company’s results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period. As of August 31, 2011 and 2010, the Company had no uncertain tax positions, and will continue to evaluate for uncertain positions in the future.

The Company generated a deferred tax credit through net operating loss carry forward. However, a valuation allowance of 100% has been established.

Interest and penalties on tax deficiencies recognized in accordance with ACS accounting standards are classified as income taxes in accordance with ASC Topic 740-10-50-19.

I. BASIC EARNINGS (LOSS) PER SHARE

The Financial Accounting Standards Board (FASB) issued Accounting Standards Codification (ASC) 260, "Earnings Per Share", which specifies the computation, presentation and disclosure requirements for earnings (loss) per share for entities with publicly held common stock. ASC 260 requires the presentation of basic earnings (loss) per share and diluted earnings (loss) per share. The Company has adopted the provisions of ASC 260 effective from inception.

Basic net loss per share amounts is computed by dividing the net income by the weighted average number of common shares outstanding. Diluted earnings per share are the same as basic earnings per share due to the lack of dilutive items in the Company.

NOTE 3. RECENT ACCOUNTING PRONOUNCEMENTS

In February 2010, the FASB issued ASU No. 2010-09, “Subsequent Events (ASC Topic 855), Amendments to Certain Recognition and Disclosure Requirements.” This Standard update requires a SEC Filer to (1) evaluate subsequent events through the date that the financial statements are issued or available to be issued, (2) defines “SEC Filer” as an entity that is required to file or furnish its financial statements with either the SEC or, with respect to an entity subject to Section 12(i) of the Securities Exchange Act of 1934, as amended, the appropriate agency under that Section, (3) not be bound to disclosing the date through which subsequent events have been evaluated, (4) note the definition ofpublic entityis not longer defined nor necessary for Topic 855, (5) note the scope of the reissuance disclosure requirements is refined to include revised financial statements only. These Updates are effective for interim or annual periods ending after June 15, 2010. ASU No. 2010-09 has no effect on the Company’s financial position, statements of operations, or cash flows at this time.

In January 2010, the FASB issued ASU No. 2010-08, “Technical Corrections to various Topics.” This Standard is being updated to eliminate outdated or inconsistent GAAP standards and to clarify the Boards original intent mainly with regards to derivatives and hedging. This is effective for the first reporting period (including interim periods) beginning after issuance. ASU No. 2010-08 has no effect on the Company’s financial position, statements of operations, or cash flows at this time.

In January 2010, the FASB issued ASU No. 2010-06, “Improving Disclosures about Fair Value Measurements” related to ASC Topic 820-10. This update requires new disclosures to; transfers in or out of Levels 1 and 2, activity in Level 3fair value measurements, Level of disaggregation, and disclosures about inputs and valuation techniques. This amendment will be effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. ASU No. 2010-06 has no impact on the Company’s results of operations, financial condition or cash flows.

In January 2010, the FASB issued ASU No. 2010-01, amends SFAS No. 168, “The FASB Accounting Standards Codification™ and the Hierarchy of Generally Accepted Accounting Principles.” This Standard codified in ASC 105 is being modified to include the authoritative and non-authoritative levels of GAAP. This amendment is effective for financial statements issued for interim and annual periods ending after September 15, 2009. ASU No. 2010-01 has no effect on the Company’s financial position, statements of operations, or cash flows at this time.

In January, 2010, the FASB issued ASU 2010-06, Improving Disclosures about Fair Value Measurements. The standard amends ASC Topic 820, Fair Value Measurements and Disclosures to require additional disclosures related to transfers between levels in the hierarchy of fair value measurement. The standard does not change how fair values are measured. The standard is effective for interim and annual reporting periods beginning after December 15, 2009. As a result, it is effective for the Company in the first quarter of fiscal year 2010. The Company does not believe that the adoption of ASU 2010-06 will have a material impact on consolidated its financial statements.

In June 2009, the FASB issued new guidance which is now part of ASC 105-10 (formerly Statement of Financial Accounting Standards No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles). ASC 105-10 replaces FASB Statement No. 162, "The Hierarchy of Generally Accepted Accounting Principles", and establishes the FASB Accounting Standards Codification as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with generally accepted accounting principles. ASC 105-10 is effective for interim and annual periods ending after September 15, 2009. The adoption of ASC 105-10 did not have a material impact on the Company’s financial statements.

In June 2009, the FASB amended ASC 810 (formerly Statement of Financial Accounting Standards No.167, Amendments to FASB Interpretation No. 46(R)). The amendments include: (1) the elimination of the exemption for qualifying special purpose entities, (2) a new approach for determining who should consolidate a variable-interest entity, and (3) changes to when it is necessary to reassess who should consolidate a variable-interest entity. ASC 810 is effective for the first annual reporting period beginning after November 15, 2009 and for interim periods within that first annual reporting period. The Company will adopt ASC 810 in fiscal 2010. The Company does not expect that the adoption of ASC 810 will have a material impact on its financial statements.

In June 2009, the FASB amended ASC 860, (formerly SFAS No. 166, Accounting for Transfers of Financial Assets, an amendment to SFAS No. 140). ASC 860 eliminates the concept of a “qualifying special-purpose entity,” changes the requirements for derecognizing financial assets, and requires additional disclosures in order to enhance information reported to users of financial statements by providing greater transparency about transfers of financial assets, including securitization transactions, and an entity’s continuing involvement in and exposure to the risks related to transferred financial assets. ASC 860 is effective for fiscal years beginning after November 15, 2009. The Company will adopt ASC 860 in fiscal 2010. The Company does not expect that the adoption of ASC 860 will have a material impact on its financial statements.

In May 2009, the FASB issued new guidance for accounting for subsequent events. The new guidance, which is now part of ASC 855-10, Subsequent Events (formerly, SFAS No. 165, Subsequent Events) is consistent with existing auditing standards in defining subsequent events as events or transactions that occur after the balance sheet date but before the financial statements are issued or are available to be issued, but it also requires the disclosure of the date through which an entity has evaluated subsequent events and the basis for that date. The new guidance defines two types of subsequent events: “recognized subsequent events” and “non-recognized subsequent events.” Recognized subsequent events provide additional evidence about conditions that existed at the balance sheet date and must be reflected in the Company’s financial statements. Non-recognized subsequent events provide evidence about conditions that arose after the balance sheet date and are not reflected in the financial statements of a company. Certain non-recognized subsequent events may require disclosure to prevent the financial statements from being misleading. The new guidance was effective on a prospective basis for interim or annual periods ending after June 15, 2009. The Company adopted the provisions of ASC 855-10 as required.

NOTE 4. GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company generated net losses of $1,742,597 during the period from August 22, 2008 (inception) through August 31, 2011. This condition raises substantial doubt about the Company's ability to continue as a going concern. The Company's continuation as a going concern is dependent on its ability to meet its obligations, to obtain additional financing as may be required and ultimately to attain profitability. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Management plans to raise additional funds by obtaining governmental and nongovernmental grants as well as offering securities for cash. Management has yet to decide what type of offering the Company will use or how much capital the Company will raise. There is no guarantee that the Company will be able to raise any capital through any type of offerings. Management can give no assurance that any governmental or nongovernmental grant will be obtained by the Company despite the Company’s best efforts. Management also plans to acquire one or more operating veterinary clinics in order to generate cash flow to fund research and development. Management can give no assurance that any such clinics can be acquired on terms favorable to the Company, if at all, and if acquired whether such clinics would generate cash flow sufficient to fund the Company’s operations. Management has raised $332,500 in the twelve months ended August 31, 2011through the sale of the Company’s securities.

NOTE 5. NOTES PAYABLE (Current Liability)

Notes Payable (Current Liability)

	2011		2010

Bombardier Pacific Ventures (Note 7)				80,471
Bio-Technology Partners Business Trust		92,050		28,150
Officer Loans (Note 7)		28,961		47,945
Venture Bridge Advisors		29,000		0
Current portion of amounts to be paid on
behalf of Gregory McDonald and Pet Pointers, Inc. (Note 9 )		9,910		0


8% Convertible Notes Payable (net of unamortized beneficial
conversion feature) (Note 12)		42,430		0

Accrued Interest Bombardier Pacific Ventures (Note 7)		1,228		5,128
Accrued Interest Bio Technology Partners Business Trust		4087		161
Accrued Interest Officer Loans (Note 7)		2,793		1,785
Accrued Interest Venture Bridge Advisors		868
Accrued Interest Convertible Notes (Note 12)		1,371		0

Both of Bio Technology Partners Business Trust and Venture Bridge Advisors have provided lines of credit to the Company in the amount of $200,000 each or so much thereof as may be disbursed to, or for the benefit of the Company by Lender in Lender's sole and absolute discretion. The unpaid principal of these lines of credit bear simple interest at the rate of ten percent per annum. Interest is calculated based on the principal balance as may be adjusted from time to time to reflect additional advances or payments made hereunder. Principal balance and accrued interest shall become due and payable in whole or in part at the demand of the Lender.

NOTE 6. NOTES PAYABLE (Long Term Liability)

	2011		2010
Non Current portion of amounts to be paid on
behalf of Gregory McDonald and Pet Pointers, Inc. (Note 9 )		79,143		0

NOTE 7. RELATED PARTY TRANSACTIONS

Between September 1, 2010 and August 31, 2011, Bombardier Pacific Ventures (“Bombardier”), a company controlled by David R. Koos who is the Company’s Chief Executive Officer, made loans to the Company totaling $7,438. These loans are due and payable at the demand of Bombardier and bear simple interest at a rate of 15% per annum.

Between September 1, 2010 and August 31, 2011, David R. Koos personally made loans to the Company totaling $114,561. These loans are due and payable at the demand of David R. Koos and bear simple interest at a rate of 15% per annum.

As of August 31, 2011 the Company remains indebted to Bombardier in the amount of $1,281 consisting of interest accrued and unpaid on the Bombardier loans.

As of August 31, 2011 the Company remains indebted to David R. Koos in the amount of $31,756 consisting of the remaining principal amount of the Koos Loans ($28,963) plus interest accrued but unpaid on the Koos loans ($2,793).

On June 15, 2009 the Company entered into an agreement with Bio Matrix Scientific Group, Inc. (“BMSN”), a significant shareholder of the Company , whereby the Company has agreed to sublease approximately 3,000 square feet of office space from BMSN for a term of 3 years for consideration consisting of monthly rental payments of $4,100 per month. Beginning October 2010 the Company has been paying rental expenses directly to the owner of the subleased space and is currently carrying a balance of $59,500 of rental expenses prepaid to BMSN.

On April 4, 2011, the Company issued 600,000 shares of common stock to David Koos, CEO, in lieu of outstanding loans to Mr. Koos and to Bombardier, a company controlled by Mr. Koos. The loan balances and accrued interest were paid in the amount of $251,178.

On June 9, 2011, the Company issued 5,000 shares of Series AA Preferred Stock to David Koos, the Company’s CEO as payment of Accrued Salary in the amount of $2,000.

NOTE 8. ACQUISITION OF ENTEST CA

On July 10, 2009 the Company acquired 100% of Entest CA, a California corporation and wholly owned subsidiary of the Company, from BMSN for consideration consisting of (a) the issuance to BMSN of 10,000,000 newly issued common shares of Entest and (b) the return by Mr. Rick Plote of 10,000,000 shares of Entest’s common stock previously issued to him by Entest for cancellation.

NOTE 9. ACQUISITION OF THE ASSETS OF PET POINTERS, INC.

On January 4, 2011Entest CA acquired from Pet Pointers, Inc., a California corporation doing business as McDonald Animal Hospital (“Seller”), and Dr. Gregory McDonald DVM (“McDonald”) all the goodwill from McDonald and assets of Seller except cash and accounts receivables used in connection with the operation of a veterinary medical clinic located at 225 S. Milpas Street, Santa Barbara, CA 93103 (the "Business").

Consideration for the acquisition consisted of:

I. $70,000 in cash

II. $210,000 of the Company’s common shares valued at the closing price per share as of January 4, 2011

III. Payment of no more than $78,000 to a creditor of the Seller to be paid in monthly installments of $1,500 per month

IV. Payment of no more than $25,000 to additional creditors of the Seller to be paid in monthly installments of $825 per month

V. Payment of $50,000 to McDonald on the first business day of the fourth month following the closing of the acquisition (“Closing”)

The Company is also obligated to make payment to McDonald of that number of shares of common stock of the Company’s common stock valued at the closing bid price of the trading day immediately prior to issuance which shall equal $70,000 upon completion of the first calendar year during the Employment Period (as such period is defined in the employment agreement entered into between McDonald and Entest CA dated December 31, 2010) in which the Business generates gross sales in excess of $700,000.

NOTE 10. INCOME TAXES

As of August 31, 2011

Deferred tax assets:
Net operating tax carry forwards	$	614,685
Other		-0-
Gross deferred tax assets		614,685
Valuation allowance		(614,685	)

Net deferred tax assets	$	-0-

As of May 31, 2011 the Company has a Deferred Tax Asset of $613,441 completely attributable to net operating loss carry forwards of approximately $1,756,244 (which expire 20 years from the date the loss was incurred) consisting of:

	(a)	$ 13,647 of Net Operating Loss carry forwards acquired in the reverse acquisition of Entest BioMedical, Inc, a California corporation, and
	(b)	$ 1,752,293 of Net Operating Loss carry forwards attributable to Entest BioMedical, Inc.

Realization of deferred tax assets is dependent upon sufficient future taxable income during the period that deductible temporary differences and carry forwards are expected to be available to reduce taxable income. A valuation allowance is recorded when it is “more likely-than-not” that a deferred tax asset will not be realized. In addition, the reverse acquisition in which Entest BioMedical, Inc. was involved in 2009 has resulted in a change of control. Internal Revenue Code Sec 382 limits the amount of income that may be offset by net operating loss (NOL) carryovers after an ownership change. As a result, the Company has recorded a valuation allowance reducing all deferred tax assets to $ -0-.

NOTE 11. COMMITMENTS AND CONTINGENCIES

On June 15, 2009, the Company entered into an agreement with BMSN whereby the Company has agreed to sublease approximately 3,000 square feet of office space from BMSN for 36 months commencing on June 30, 2009 and ending on June 30, 2012 for consideration consisting of monthly rental payments of $4,100 per month. the Company. currently pays monthly rent of $4,176 directly to the owner of the property for the term indicated.

This property is utilized as office space. The Company believes that the foregoing property is adequate to meet its current needs. While it is anticipated that the Company will require access to laboratory facilities in the future, the Company believes that access to such facilities are available from a variety of sources.

On January 4, 2011, as part of the asset purchase agreement with the Company and Gregory McDonald / Pet Pointers, Inc., the Company pays on behalf of Gregory McDonald and Pet Pointers monthly rent of $7,320 (which adjusts to $7,576 in July, 2011) to Anthony Marinelli for the terms indicated in the Gregory McDonald / Pet Pointers lease. These payments are not obligations of the Company but, are payments the Company agreed to make on behalf of Gregory McDonald and Pet Pointers as part of the Asset Purchase Agreement.

On January 4, 2011, as part of the asset purchase agreement with the Company and Gregory McDonald on behalf of Pet Pointers, Inc., the Company pays on behalf of Gregory McDonald and Pet Pointers monthly payments of $1,500 to Anthony and Judi Marinelli towards the extinguishment of a total note of $78,000. These payments are payments the Company agreed to make on behalf of Gregory McDonald and Pet Pointers.

On January 4, 2011, as part of the asset purchase agreement with the Company and Gregory McDonald on behalf of Pet Pointers, Inc., the Company pays on behalf of Gregory McDonald and Pet Pointers an installment agreement due to the Franchise Tax Board in the amount of $11,405 with monthly payments of $400. These payments, are payments the Company agreed to make on behalf of Gregory McDonald and Pet Pointers.

On January 4, 2011, as part of the asset purchase agreement with the Company and Gregory McDonald on behalf of Pet Pointers, Inc., the Company pays on behalf of Gregory McDonald and Pet Pointers an installment agreement due to the Internal Revenue Service in the amount of $13,595 with monthly payments of $425. These payments are payments the Company agreed to make on behalf of Gregory McDonald and Pet Pointers.

On February 3, 2011, a Complaint (“Complaint”) was filed in the U.S. District Court Middle District of the State of Pennsylvania against the Company, the Company’s Chairman and BMSN . by 18KT.TV LLC (“Plaintiffs”) seeking to recover general damages from the Company. in excess of $125,000. The Complaint alleges breach of contract and unjust enrichment relating to an investor relations contract executed by the Company and Craig Fischer (on behalf of 18KT.TV LLC). The Complaint also seeks similar damages from BMSN. and $50,000 in damages from David Koos (Chairman & CEO of both the Company and BMSN.). The Company believes that the allegations in the complaint are without merit and intends to vigorously defend its interests in this matter. At this time, it is not possible to predict the ultimate outcome of these matters.

There were no other legal proceedings against the Company with respect to matters arising in the ordinary course of business. Neither the Company nor any of its officers or directors is involved in any other litigation either as plaintiffs or defendants, and have no knowledge of any threatened or pending litigation against them or any of the officers or directors.

Commitments

	2011		2012		2013		2014		2015
Office lease	$	50,112	$	25,056	$	-	$	-	$	-
Veterinary clinic lease		89,376		45,456		-		-		-
Marinelli Note		18,000		18,000		18,000		18,000		18,000
IRS installment agreement		5,100		5,100		5,100		5,100		5,100
FTB installment agreement		4,800		4,800		4,800		4,800		4,800
TOTAL	$	167,388	$	98,412	$	27,900	$	27,900	$	27,900

NOTE 12. CONVERTIBLE NOTES

On May 20, 2011, the Company issued a convertible promissory note in the amount of $42,500 which was received May 26, 2011. The note bears an interest rate of eight percent (8%), matures on February 23, 2012 and may be converted after 180 days from execution of this note for shares of the Company’s common stock. The note may be converted at a forty two percent (42%) discount to the average of the lowest 3 closing bid prices of the common stock during the 10 trading days prior to the conversion date. The issuance of the note amounted in a beneficial conversion feature of $16,398 which is amortized under the Interest Method.

On July 5, 2011, the Company issued a convertible promissory note (the “Second Note”) in the principal amount of $ $37,500. The Second Note, which matures April 11, 2012, bears interest at the rate of 8% per annum. At any time after 180 days from the execution of the Second Note, the Second Note is convertible into shares of the Company’s common stock at the election of Asher at a conversion price equal to a 45% discount to the average of the 3 closing bid prices of the common stock during the 10 trading day period prior to conversion. The issuance of the note amounted in a beneficial conversion feature of $37,500 which is amortized under the Interest Method.

On August 29, 2011, the Company issued a convertible promissory note (the “Third Note”) in the principal amount of $ $35,000. The Third Note, which matures May 25, 2012, bears interest at the rate of 8% per annum. At any time after 180 days from the execution of the Third Note, the Third Note is convertible into shares of the Company’s common stock at the election of Asher at a conversion price equal to a 45% discount to the average of the 3 closing bid prices of the common stock during the 10 trading day period prior to conversion. The issuance of the note amounted in a beneficial conversion feature of $35,000 which is amortized under the Interest Method

NOTE 13. STOCKHOLDERS' EQUITY

The stockholders' equity section of the Company contains the following classes of capital stock as of August 31, 2011:

Common Stock:

$0.001 par value, 70,000,000 shares authorized 20,840,501 shares issued and outstanding as of May 31, 2011.

Preferred Stock:

$0.001 par value 5,000,000 shares authorized of 100,000 shares authorized is authorized as Series AA Preferred Stock , $001 par value of which 5,000 shares are issued and outstanding as of August 31, 2011.

NOTE 14. STOCK TRANSACTIONS

In the twelve months ended May 31, 2011, the Company:

On October 12, 2010, the Company issued 2,000,000 shares of common stock at five cents per share, realizing $100,000.

On November 16, 2010, the Company made a Stock Award of 45,000 common shares for services. An expense of $53,100 was recorded.

On November 30, 2010, the Company made a Stock Award of 10,000 common shares for services. An expense of $9,300 was recorded.

On January 3, 2011, the Company issued 38,712 shares of common stock in satisfaction of $39,989 owed by the Company.

On January 3, 2011, the Company issued 3,000 shares of common stock to employees as consideration for services rendered. An expense of $5,640 was recorded.

On January 3, 2011, the Company issued 10,000 shares of common stock to employees as consideration for services rendered. An expense of $18,800 was recorded.

On January 3, 2011, the Company issued 25,000 shares of common stock to its CFO as consideration for services rendered. An expense of $47,000 was recorded.

On January 4, 2011, the Company issued 9,383 shares to a consultant for broker fees. An expense of $17,640 was recognized as part of the purchase agreement with Pet Pointers, Inc.

On January 14, 2011, the Company issued 102,766 shares of common stock as part of the purchase agreement with Pet Pointers, Inc. An expense of $193,200 was recognized.

On January 26, 2011, the Company sold 200,000 common shares at fifty cents per share, realizing $100,000.

On February 4, 2011, the Company issued 10,000 shares of common stock to a consultant for services. An expense of $42,000 was recorded.

On February 4, 2011, the Company issued 5,000 common shares to an employee. An expense of $21,000 was recorded.

On March 25, 2011, the Company issued 7,000 shares of common stock to multiple employees as bonuses. The expense of $15,330 was recorded.

On April 1, 2011, the Company issued 50,000 shares of restricted stock to Tammy Reynolds, the Company’s CFO as consideration for completion of her first year’s employment agreement. Of this amount, 10,000 shares vested as of April 1, 2011 and an expense in the amount of $10,000 was recognized. The remaining 40,000 are forfeited pursuant to Ms. Reynolds terms of employment and are subject to cancellation.

On May 3, 2011, the Company issued 17,600 shares to Pet Pointers, Inc. in the purchase of their accounts receivable. An accounts receivable asset was booked in the amount of $17,600.

On June 9, 2011, the Company issued 5,000 shares of Series AA Preferred Stock to David Koos, the Company’s CEO as payment of Accrued Salary in the amount of $2,000.

On August 29, 2011, the Company issued 143,000 common shares to Dr. Gregory McDonald in full satisfaction of $50,000 owed to Dr. McDonald.

On August 29, 2011 the Company issued 11,000 shares to an employee as consideration for services rendered valued at $3,268.

NOTE 15. SUBSEQUENT EVENTS

On October 25, 2011, the Company issued a convertible promissory note in the amount of $32,500. The note bears an interest rate of eight percent (8%), matures on July 27, 2012 and may be converted after 180 days from execution of this note for shares of the Company’s common stock. The note may be converted at a fifty two percent (52%) discount to the average of the lowest 3 closing bid prices of the common stock during the 10 trading days prior to the conversion date.

Events subsequent to August 31, 2011 have been evaluated through October 31, 2011, the date these statements were available to be issued, to determine whether they should be disclosed to keep the financial statements from being misleading.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

(a) On October 16, 2009, the Board of Directors of the Company, acting as the Company's Audit Committee, approved of the dismissal of Seale and Beers, CPAs as the Company’s independent registered public accounting firm and also approved the engagement of John Kinross-Kennedy, CPA as its independent auditor. On same date, October 16, 2009, the accounting firm of John Kinross-Kennedy, CPA was engaged as the Company's new independent registered public accounting firm. On October 20, 2009, the Company informed Seale and Beers, CPAs that Seale and Beers, CPAs has been dismissed as the Company’s independent registered public accounting firm.

Since August 6, 2009 (the date on which Seale and Beers, CPAs has been engaged as the Company’s independent registered public accounting firm) Seale and Beers CPAs has neither reviewed nor audited any of the financial statements of the Company. Therefore, no reports of Seale and Beers CPAs on the Company’s financial statements for either of the past two years or subsequent interim period contained an adverse opinion or disclaimer of opinion, or was qualified or modified as to uncertainty, audit scope or accounting principles as no such reports have been prepared.

(b) During the Company's two most recent fiscal years, there were no disagreements with Seale and Beers, CPAs, whether or not resolved, on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to Seale and Beers, CPAs satisfaction, would have caused it to make reference to the subject matter of the disagreement in connection with its report on the Company's financial statements.

Item 9A. Controls and Procedures

(a) Evaluation of disclosure controls and procedures.

The principal executive officer and principal financial officer have evaluated the Company’s disclosure controls and procedures as of August 31, 2011. Based on this evaluation, they have concluded that the disclosure controls and procedures were effective to ensure that the information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms and to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. David Koos is the Company’s CEO and acting CFO. He functions as the Company’s principal executive officer and principal financial officer.

b) Management’s annual report on internal control over financial reporting.

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) promulgated under the Securities and Exchange Act of 1934. Rule 13a-15(f) defines internal control over financial reporting as follows:

“The term internal control over financial reporting is defined as a process designed by, or under the supervision of, the issuer's principal executive and principal financial officers, or persons performing similar functions, and effected by the issuer's board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the issuer;

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management and directors of the issuer; and

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the issuer's assets that could have a material effect on the financial statements.”

The Company’s internal control over financial reporting is a process designed under the supervision of the Company’s management to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with U.S. generally accepted accounting principles.

In designing and evaluating our disclosure controls and procedures, our management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only a reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met.

The Company’s management assessed the effectiveness of its internal control over financial reporting as of August 31, 2010 based on the framework in “Internal Control over Financial Reporting – Guidance for Smaller Public Companies (2006) issued by the Committee of Sponsoring Organizations of the Treadway Commission.” Based on its assessment, management believes that, as of August 31, 2010, the Company’s internal control over financial reporting is effective.

Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the company to provide only management's report in this annual report. This exemption for smaller reporting companies provided under the temporary rules referenced above has been made permanent under Section 989G of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

(c) There have been no changes during the quarter ended August 31, 2011 in the Company’s internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting.

Item 10. Directors, Executive Officers and Corporate Governance

On June 19, 2009 the Board of Directors of the Company elected David R. Koos, 52, a director of the Company and appointed Dr. Koos President, Chief Executive Officer, Secretary, Chief Financial Officer, Principal Accounting Officer of the Company. Dr. Koos resigned as Chief Financial Officer on March 31, 2010 and assumed the position of Acting Chief Financial Officer and Principal Accounting Officer on August 8, 2011 upon the resignation of Tammy L. Reynolds who served as Chief Financial Officer from the period from March 31, 2010 to August 8, 2011.

Dr. Koos has served as Chairman, CEO, President, Secretary, and Acting CFO of the BMSN since June 19, 2006, and as Chairman CEO, President, Secretary, and Acting CFO of Entest CA since August 22, 2008.

Education:

DBA - Finance (December 2003)

Atlantic International University

Ph.D. - Sociology (September 2003)

Atlantic International University

MA - Sociology (June 1983)

University of California - Riverside, California

Five Year Employment History:

Position:	Company Name:	Employment Dates:

Chairman, President, CEO and Acting CFO	Bio-Matrix Scientific Group, Inc.*	June 14, 2006 (Chairman) to Present June 19, 2006 (President, CEO and Acting CFO) June 19, 2006 (Secretary) to Present
Chairman, CEO, Secretary & Acting CFO	Frezer Inc.	May 2, 2005 to February 2007
Chairman, CEO & Acting CFO	BMXP Holdings, Inc.	December 6, 2004 to June 2008
Managing Director & President	Cell Source Research Inc.	December 5, 2001 to Present
Managing Director & President	Venture Bridge Inc.	November 21, 2001 to Present
Chairman of the Board of Directors, CFO & Secretary	Cell Bio-Systems Inc. (New York)	July 17, 2003 to December 1, 2003
Registered Representative	Amerivet Securities Inc.**	March 31, 2004 to February 2008

* As of November 1, 2011 Bio-Matrix Scientific Group Inc. owned 10,000,000 common shares of the company representing 48% of the common shares outstanding.

** Amerivet Securities Inc. has not been active during the period as the Chief Executive Officer was on deployment in Iraq through the U.S. Army Reserves.

Code of Ethics

On November 11, 2009 we adopted a Code of Ethics pursuant to Section 406 of the Sarbanes-Oxley Act of 2002

Director Independence

Audit Committee and Audit Committee Financial Expert

The sole member of the Company’s board of Directors may not be considered independent as he is also its sole officer. The Company is not a "listed company" under Securities and Exchange Commission (“SEC”) rules and is therefore not required to have an audit committee comprised of independent directors. The Company does not currently have an audit committee, however, for certain purposes of the rules and regulations of the SEC and in accordance with the Sarbanes-Oxley Act of 2002, the Company’s Board of Directors is deemed to be its audit committee and as such functions as an audit committee and performs some of the same functions as an audit committee including: (1) selection and oversight of our independent accountant; (2) establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal controls and auditing matters; and (3) engaging outside advisors. The Board of Directors has determined that its member is able to read and understand fundamental financial statements and has substantial business experience that results in that member's financial sophistication. Accordingly, the Board of Directors believes that its member has the sufficient knowledge and experience necessary to fulfill the duties and obligations that an audit committee would have.

Nominating and Compensation Committees

The Company does not have standing nominating or compensation committees, or committees performing similar functions. The board of directors believes that it is not necessary to have a compensation committee at this time because the functions of such committee are adequately performed by the board of directors. The board of directors also is of the view that it is appropriate for the Company not to have a standing nominating committee because the board of directors has performed and will perform adequately the functions of a nominating committee. The Company is not a "listed company" under SEC rules and is therefore not required to have a compensation committee or a nominating committee.

Shareholder Communications

There has not been any defined policy or procedure requirements for stockholders to submit recommendations or nomination for directors. There are no specific, minimum qualifications that the board of directors believes must be met by a candidate recommended by the board of directors. Currently, the entire board of directors decides on nominees, on the recommendation of any member of the board of directors followed by the board’s review of the candidates’ resumes and interview of candidates. Based on the information gathered, the board of directors then makes a decision on whether to recommend the candidates as nominees for director. The Company does not pay any fee to any third party or parties to identify or evaluate or assist in identifying or evaluating potential nominee.

Because management and the Board of Directors of the Company are the same people, the Board of Directors has determined not to adopt a formal methodology for communications from shareholders on the belief that any communication would be brought to the Board of Directors’ attention by virtue of the co-extensive capacities of the Board of Directors.

Executive Compensation

SUMMARY COMPENSATION TABLE

Name and Principal Position	Year	Salary ($)	Bonus ($)	Stock Awards ($)	Restricted Stock Awards ($)	Option Awards ($)	Non Equity Incentive Plan Compensation ($)	Nonqualified Deferred Compensation Earnings ($)	All Other Compensation ($)	Total ($)

David Koos Chairman, President and CEO	From September 1, 2009 to August 31, 2010	$6,000*	0	$4,560	0	0	0	0	0	$10,460

Tammy Reynolds, CFO and Director	From March 31, 2010 to August 31, 2010	$26,923	0	0	0	0	0	0	0	$26,923

David Koos Chairman, President and CEO	From September 1, 2010 to August 31, 2011	$18,000*	0	$2,000**	0	0	0	0	0	$20,000

Tammy Reynolds, Former CFO and Director (resigned from all positions with the Company effective August 8,2011	From September1, 2010 to August 31, 2011	$65,961	0	$47,000	$50,000***	0	0	0	0	$162,961

* Does not include $49,000 in salary earned by David Koos which is accrued but unpaid.

David Koos is not party to an executed employment agreement. From April of 2010 to April4, 2011 we had agreed to compensate David Koos $25,000 per month for his services, exclusive of any bonuses or benefits. From April 4, 2011 to the date of this document we had agreed to compensate David Koos $10,000 per month for his services, exclusive of any bonuses or benefits. The majority of this compensation has been accrued.

** represents 5,000 shares of the Company’s Series AA Preferred Stock

***The Company and Ms. Reynolds had agreed that Ms. Reynolds shall receive:

	a)	Compensation of $70,000 per annum for her services as Chief Financial Officer.
	b)	Fifty Thousand Dollars worth of the Common Shares of the Company (“Compensation Shares”) to be granted to Ms. Reynolds upon the completion of twelve months employment as CFO of the Company under the condition that80% of the Compensation Shares (“Restricted Comp Shares”) may not be sold, transferred, assigned, pledged or otherwise encumbered or disposed of by Ms. Reynolds (“Transfer Restriction”) except as follows:

Upon the expiration of one year from the date of the grant of the Compensation Shares, Transfer Restrictions shall no longer apply to 25% of the Restricted Comp Shares.

Upon the expiration of two years from the date of the grant of the Compensation Shares, Transfer Restrictions shall no longer apply to an additional 25% of the Restricted Comp Shares.

Upon the expiration of three years from the date of the grant of the Compensation Shares, Transfer Restrictions shall no longer apply to an additional 25% of the Restricted Comp Shares

Upon the expiration of four years from the date of the grant of the Compensation Shares, Transfer Restrictions shall no longer apply to an additional 25% of the Restricted Comp Shares.

As Ms. Reynolds is no longer employed as CFO of the Company, any Restricted Comp Shares still subject to Transfer Restrictions shall be forfeited by the Ms. Reynolds, and ownership of the Restricted Comp Shares shall be transferred back to the Company. As such, 80% of the restricted Stock Award paid to Ms Reynolds during the fiscal year ended August 31, 2011 is subject to forfeiture. Ms. Reynolds is currently not party to a written employment agreement with the Company .

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth information known to the Company with respect to the beneficial ownership of each class of the Company’s capital stock as of November 1, 2011 for (1) each person known by the Company to beneficially own more than 5% of each class of the Company’s voting securities, (2) each executive officer, (3) each of the Company’s directors and (4) all of the Company’s executive officers and directors as a group. As of November 1, 2011 the Company had 20,890, 501 common shares outstanding and 5,000 Series AA Preferred Shares outstanding

(1) Title Of Class	(2) Name And Address Of Beneficial Owner	(3) Amount And Nature Of Beneficial Owner	(4) Percent Of Class
Common Stock	David R. Koos, President, Chief Executive Officer, Secretary, Treasurer, Director, Acting Chief Financial Officer C/O Entest BioMedical, Inc. 4700 Spring Street, St 203 La Mesa California, 91942*	10,000,000	47.8%*
Common Stock	Tammy Reynolds Chief Financial Officer and Director **	75,000***	.003%
Officers and Directors As a Group		10,075,000	48.1%
Common Stock	Bio-Matrix Scientific Group, Inc. 8885 Rehco Road San Diego, California 92121	10,000,000	47.8%
Common Stock	Sleezer Family Trust	5,500,000	26.3%

*Includes common shares owned by Bio-Matrix Scientific Group, Inc. (David Koos is CEO, President and Chairman of Bio-Matrix Scientific Group, Inc.).

** Resigned as CFO and Director August 8, 2011

*** 40,000 common shares subject to forfeiture.

(1) Title Of Class	(2) Name And Address Of Beneficial Owner	(3) Amount And Nature Of Beneficial Owner	(4) Percent Of Class
Series AA Preferred	David R. Koos, President, Chief Executive Officer, Secretary, Treasurer, Director, Acting Chief Financial Officer C/O Entest BioMedical, Inc. 4700 Spring Street, St 203 La Mesa California, 91942	5,000	100%
Officers and Directors As a Group (2 Persons)		5,000	100%

Item 13. Certain Relationships and Related Transactions, and Director Independence

As of August 31, 2011 the Company remains indebted to Bombardier in the amount of $1,281 consisting of interest accrued and unpaid on the Bombardier loans.

Director Independence

Audit Committee and Audit Committee Financial Expert

The Company’s sole director may not be considered independent as he is also an officer. The Company is not a "listed company" under Securities and Exchange Commission (“SEC”) rules and is therefore not required to have an audit committee comprised of independent directors. The Company does not currently have an audit committee, however, for certain purposes of the rules and regulations of the SEC and in accordance with the Sarbanes-Oxley Act of 2002, the Company’s Board of Directors is deemed to be its audit committee and as such functions as an audit committee and performs some of the same functions as an audit committee including: (1) selection and oversight of our independent accountant; (2) establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal controls and auditing matters; and (3) engaging outside advisors. The Board of Directors has determined that its sole member is able to read and understand fundamental financial statements and has substantial business experience that results in the member's financial sophistication. Accordingly, the Board of Directors believes that its member has the sufficient knowledge and experience necessary to fulfill the duties and obligations that an audit committee would have.

Nominating and Compensation Committees

The Company does not have standing nominating or compensation committees, or committees performing similar functions. The Board of Directors believes that it is not necessary to have a compensation committee at this time because the functions of such committee are adequately performed by the board of directors. The Board of Directors also is of the view that it is appropriate for the Company not to have a standing nominating committee because the Board of Directors has performed and will perform adequately the functions of a nominating committee. The Company is not a "listed company" under SEC rules and is therefore not required to have a compensation committee or a nominating committee.

Shareholder Communications

The Board of Directors has determined not to adopt a formal methodology for communications from shareholders on the belief that any communication would be brought to the board of directors’ attention by virtue of communication with management

Item 14. Principal Accounting Fees and Services

The following table sets forth the aggregate fees billed to us by John Kinross-Kennedy, CPA during the period beginning September 1, 2009 and ending August 31, 2010:

Audit Fees	$	4,000
Audit Related Fees		400
Tax Fees		0
All Other Fees		0
	$	4,400

Audit Fees: Aggregate fees billed for professional services rendered for the audit of the Company's annual financial statements.

Audit Related Fees: Aggregate fees billed for professional services rendered for assurance and related services that were reasonably related to the performance of the audit or review of our financial statements and are not reported under “Audit Fees” above. In 2010 these fees were primarily derived from review of financial statements in the Company's Form 10Q Reports.

The following table sets forth the aggregate fees billed to us by John Kinross-Kennedy, CPA during the period beginning September 1, 2010 and ending August 31, 2011:

Audit Fees	$	4,600
Audit Related Fees		400
Tax Fees		0
All Other Fees		2,800
	$	7,800

Audit Fees: Aggregate fees billed for professional services rendered for the audit of the Company's annual financial statements.

All Other Fees: Audit of the financial statements of Pet Pointers, Inc.

All services listed were pre-approved by the Board of Directors, functioning as the Audit Committee in accordance with Section 2(a) 3 of the Sarbanes-Oxley Act of 2002.

The Board has considered whether the services described above are compatible with maintaining the independent accountant's independence and has determined that such services have not adversely affected the independence John Kinross-Kennedy.

Item 15. Exhibit Index

EXHIBIT INDEX

EXHIBIT NUMBER	DESCRIPTION

3(i) (3)************	CERTIFICATE OF DESIGNATIONS SERIES AA PREFERRED STOCK
31.1	CERTIFICATION BY CEO PURSUANT TO SECTION 302 OF SARBANES OXLEY ACT
32.1	CERTIFICATION BY CEO PURSUANT TO SECTION 906 OF SARBANES OXLEY ACT
31.2	CERTIFICATION BY CFO PURSUANT TO SECTION 302 OF SARBANES OXLEY ACT
32.2	CERTIFICATION BY CFO PURSUANT TO SECTION 906 OF SARBANES OXLEY ACT
10.1**************	AGREEMENT BY AND BETWEEN THE COMPANY AND THERACYTE,INC.
10.2*	ESCROW AGREEMENT BY AND BETWEEN THE COMPANY, HERMAN H. PETTEGROVE, ESQ. AND DR. GREGORY MCDONALD, DVM
14.1**	CODE OF ETHICS
10.3***	AGREEMENT FOR ISSUANCE OF STOCK TO DAVID KOOS
3(i)****	CERTIFICATE OF INCORPORATION OF JB CLOTHING
3(ii)*****	BYLAWS
3(i)(2)******	AMENDMENT TO CERTIFICATE OF INCORPORATION OF JB CLOTHING
10.3*******	ASSET PURCHASE AGREEMENT BY AND BETWEEN PET POINTERS INC, GREGORY McDONALD AND THE COMPANY
10.4********	EXHIBIT A TO ASSET PURCHASE AGREEMENT
10.5*********	EXHIBIT B TO ASSET PURCHASE AGREEMENT
10.6**********	EMPLOYMENT AGREEMENT GREGORY MCDONALD
10.7 ***********	AMENDMENT ESCROW AGREEMENT BY AND BETWEEN THE COMPANY, HERMAN H. PETTEGROVE, ESQ. AND DR. GREGORY MCDONALD, DVM
10.8 *************	AGREEMENT BY AND BETWEEN THE COMPANY AND RENOVOCYTE LLC
10.9	8% ASHER NOTE $42,500
10.10	8% ASHER NOTE $37,500
10.11	8% ASHER NOTE $35,000
10.12	8% ASHER NOTE $32,500

* Incorporated by reference to Exhibit 10.1 of Form 8-K dated October 27, 2010

** Incorporated by reference to Exhibit 14.1 of Form 10-K dated November 11, 2009

*** Incorporated by reference to Exhibit 10.1 of Form 10-K dated November 11, 2009

****Incorporated by reference to Exhibit 3(i) of Company’s S-1 filed November 4, 2008

*****Incorporated by reference to Exhibit 3(ii) of Company’s S-1 filed November 4, 2008

******Incorporated by reference to Exhibit 3 (i)(2) of Company’s 8-K filed July 10, 2009

******* Incorporated by reference to Exhibit 10.1 of Company’s 8-K filed December 27, 2010

******** Incorporated by reference to Exhibit 10.2 of Company’s 8-K filed December 27, 2010

********* Incorporated by reference to Exhibit 10.3 of Company’s 8-K filed December 27, 2010

********** Incorporated by reference to Exhibit 10.4 of Company’s 8-K filed December 27, 2010

*********** Incorporated by reference to Exhibit 10.6 of Company’s 8-K filed December 27, 2010

************* Incorporated by reference to Exhibit 3(i) of Company’s 8-K filed June 10, 2011

************* Incorporated by reference to Exhibit 10.01 of Company’s 8-K filed October 24, 2011

************** Incorporated by reference to Exhibit 10.1 of Company’s 10K for the year ended August 31, 2010

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

			Entest BioMedical, Inc.

		By:	/s/ David R. Koos
			Name: David R. Koos
			Title: President, Chairman, Chief Executive Officer
			Date: November 2, 2011

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on November 2, 2011.

		By:	/s/ David R. Koos
			Name: David R. Koos
			Title: President, Chairman of the Board of Directors, Chief Executive Officer, Acting Chief Financial Officer
			Date: November 2, 2011

Attached files

ENTEST GROUP, INC. Reports

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