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Great findings stockstuffer. $CIRC settlement imminent.
Even without a Masters Degree in Statistics I know that 2 out of 2 wins in court favors a win in court on the 7th.
We most certainly remain confident on reaching a penny here and all of those who invested here will be doing cartwheels at CIRC-du-soleil!
I must say, this is my favorite board to visit every day, especially when you open up and are greeted with such great shots of the product.. and the very lovely product holders !
From over $30 to $7 in less than a year? LOL $MCP is a SCAM!
$CIRC HUGE GAP UP MONDAY! Told you so!
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=84102993
Trust me..YOU WANT TO BE IN ON THIS PLAY.
These levels will be gone by end of day and on Monday, forget about it....
Thanks for being a loyal follower and believing in my picks
CirTran Corp. (OTCQB: CIRC) Looked The Monster In The Eye
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Play Beverages LLC, CirTran Beverage Corporation and CirTran Corporation (OTCQB: CIRC) announced today the U.S. District Court, Central District of California has ruled in their favor. The Court denied Playboy Enterprises International, Inc.'s ("Playboy") motion for injunction and dismissed Playboy's trademark lawsuit. The order issued January 30, 2013 ruled in favor of Play Beverages and the CirTran companies and subsequently took Play Beverages out of bankruptcy, enabling it to continue its action in state courts against Playboy Enterprises and others to protect its license to produce and sell Playboy Energy Drink.
Introduced in 2008, Playboy Energy Drink is manufactured and distributed exclusively by CirTran Beverage Corporation, a wholly owned subsidiary of CirTran Corporation (OTCQB: CIRC) under a product license from Playboy Enterprises to Play Beverages, and is currently available in more than 20 countries around the world. The Energy Drink space currently includes Monster Beverage Corp (NASDAQ: MNST), PepsiCo, Inc. (NYSE: PEP), and The Coca-Cola Company (NYSE: KO).
Shares of CirTran Beverage Corporation and CirTran Corporation (OTCQB: CIRC) are currently trading up 35%
Find out where these companies are headed along with other active movers: http://tradernewsletters.com/
Disclosure: We are not a registered investment advisor and nothing contained in any materials should be construed as a recommendation to buy or sell securities. Investors should always conduct their own due diligence with any potential investment. Please visit http://tradernewsletters.com/ for complete risks and disclosures.
info@tradernewsletters.com
www.tradernewsletters.com
SOURCE Tradernewsletters.com
Associated Documentation:Link to submission on http://www.eteligis.comTradernewsletters.com_1-31-13_SMU_2.docx
Copyright eTeligis Inc. 2013. All rights reserved.
-0-
INDUSTRY KEYWORD: BEVERAGES
ENTERTAINMENT
FOODS
INVESTMENT OPINION
SUBJECT CODE: ANA
ECR
RES
STK
-------------------------------------------------
Case Information Summary for Case Number
2012-L-012181
Filing Date: 11/26/2012 Case Type: INJUNCTION
Division: Chancery Division District: First Municipal
Ad Damnum: $0.00 Calendar: 15
Party Information
Plaintiff(s) Attorney(s)
PLAY BEVERAGES LLC GRIPPO ELDEN
111 SOUTH WACKER DR
CHICAGO IL, 60606
(312) 704-7700
CIRTRAN BEVERAGE CORP
Date of Service Defendant(s) Attorney(s)
COOPERSMITH RON
ESEBAG JIMMY
LEVIN PAUL
PLAYBOY ENTERPRISES INTER KATTEN MUCHIN ROSENMAN LL
525 W MONROE STREET
CHICAGO IL, 60661
(312) 902-5200
REDI FZE
RLC PARTNERS LLC
UNITED LICENSING GROUP
Case Activity
Activity Date: 11/26/2012 Participant: PLAY BEVERAGES LLC
INJUNCTION COMPLAINT FILED
Attorney: GRIPPO ELDEN
Activity Date: 11/26/2012 Participant: PLAY BEVERAGES LLC
CASE SET ON CASE MANAGEMENT CALL
Date: 5/28/2013
Court Time: 1030
Court Room: 2410
Judge: PANTLE, KATHLEEN M.
Attorney: GRIPPO ELDEN
Activity Date: 11/26/2012 Participant: PLAY BEVERAGES LLC
TRANSFER FILE INTO DIVISION - ALLOWED -
Court Room: 2403
Judge: JACOBIUS, MOSHE
Activity Date: 11/26/2012 Participant: PLAY BEVERAGES LLC
RETURN FOR RANDOM ASSIGNMENT
Court Room: 2403
Judge: JACOBIUS, MOSHE
Activity Date: 11/26/2012 Participant: PLAY BEVERAGES LLC
ASSIGN TO JUDGE WITHIN DIVISION
Court Room: 2403
Judge: JACOBIUS, MOSHE
Activity Date: 11/27/2012 Participant: PLAYBOY ENTERPRISES INTER
SUMMONS - RETD P.S.
Date: 11/20/2012
Activity Date: 12/18/2012 Participant: PLAYBOY ENTERPRISES INTER
MOTION SCHEDULED (MOTION COUNTER ONLY)
Date: 12/27/2012
Court Time: 0930
Attorney: KATTEN MUCHIN ROSENMAN LL
Activity Date: 12/18/2012 Participant: PLAYBOY ENTERPRISES INTER
MOTION SCHEDULED (MOTION COUNTER ONLY)
Date: 12/27/2012
Court Time: 0930
Attorney: KATTEN MUCHIN ROSENMAN LL
Activity Date: 12/18/2012 Participant: PLAYBOY ENTERPRISES INTER
***ADD ADDITIONAL PARTY(SET FOR MOTION HEARING)
Attorney: KATTEN MUCHIN ROSENMAN LL
Activity Date: 12/18/2012 Participant: PLAYBOY ENTERPRISES INTER
***DISMISS(SET FOR MOTION HEARING)
Attorney: KATTEN MUCHIN ROSENMAN LL
Activity Date: 12/18/2012 Participant: PLAYBOY ENTERPRISES INTER
***MISC.MOTION(SET FOR MOTION HEARING)
Attorney: KATTEN MUCHIN ROSENMAN LL
Activity Date: 12/18/2012 Participant: PLAYBOY ENTERPRISES INTER
APPEARANCE FILED - FEE PAID - (JURY DEMAND)
Court Fee: 436.00
Attorney: KATTEN MUCHIN ROSENMAN LL
Activity Date: 12/18/2012 Participant: PLAYBOY ENTERPRISES INTER
EXHIBITS FILED
Attorney: KATTEN MUCHIN ROSENMAN LL
Activity Date: 12/18/2012 Participant: PLAYBOY ENTERPRISES INTER
EXHIBITS FILED
Attorney: KATTEN MUCHIN ROSENMAN LL
Activity Date: 12/18/2012 Participant: PLAYBOY ENTERPRISES INTER
NOTICE OF MOTION FILED
Attorney: KATTEN MUCHIN ROSENMAN LL
Activity Date: 12/18/2012 Participant: PLAYBOY ENTERPRISES INTER
PROOF OF SERVICE FILED
Attorney: KATTEN MUCHIN ROSENMAN LL
Activity Date: 12/18/2012 Participant: PLAYBOY ENTERPRISES INTER
MOTION FILED
Attorney: KATTEN MUCHIN ROSENMAN LL
Activity Date: 12/27/2012 Participant: PLAYBOY ENTERP ISES INTER
FILE APPEARANCE OR JURY DEMAND, ANSWER OR PLEAD - ALLOWED -
Court Room: 2410
Judge: PANTLE, KATHLEEN M.
Activity Date: 12/27/2012 Participant: PLAY BEVERAGES LLC
FILE APPEARANCE OR JURY DEMAND, ANSWER OR PLEAD - ALLOWED -
Court Room: 2410
Judge: PANTLE, KATHLEEN M.
Activity Date: 12/27/2012 Participant: PLAYBOY ENTERP ISES INTER
SET BRIEFING SCHEDULE - ALLOWED -
Court Room: 2410
Judge: PANTLE, KATHLEEN M.
Activity Date: 12/27/2012 Participant: PLAYBOY ENTERP ISES INTER
STRIKE OR WITHDRAW COMPLAINT, AMENDED COMPLAINT OR PORTION THEREOF - CNT -
Date: 2/7/2013
Court Time: 1030
Court Room: 2410
Judge: PANTLE, KATHLEEN M.
Activity Date: 1/4/2013 Participant: PLAYBOY
APPEARANCE FILED - NO FEE PAID -
Attorney: APRATI JEFFERY R
Activity Date: 1/4/2013 Participant: PLAYBOY
APPEARANCE FILED - NO FEE PAID -
Attorney: CAFFREY JOHN R
Activity Date: 1/4/2013 Participant: PLAYBOY
APPEARANCE FILED - NO FEE PAID -
Attorney: THOMAS HOWARD VINCENT
New HOD .0026 NEXT WEEK = BOOM-TOWN!!! $CIRC - closed at HOD Weeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee Good bye loser who sold 5 million shares at .0024 LMAO!!! JUMPED RIGHT OVER YOU LIKE A TRACK STAR!
I got your 5 million shares right here buddy, come on down If you're going to be foolish enough to let them go today then you're going to have to let them go for a discount. You'll be sorry you hit the sell button today because you won't get them back until we run past .01 The greed will have you kicking yourself very soon. Either sell them now or let go of the sell button.
*Rubs crystal ball* ... I'm guessing minimum it will reach .01 We'll probably play some games here today and get those with couple million shares to dump their shares today because they're getting greedy again. Once we get them out by end of day we will move on to .007 and up next week.
.0025 New High-of-day (HOD) $CIRC !!!
Nothing bad was said & definitely no bankruptcy chapter 7 like some claimed. This stock is still in play I'm just waiting for it to go down a little more before I buy again, maybe around .0011/.0012/.0013 before any news comes out.
Thanks buddy ! $CIRC will be rocking next week!
New HOD coming next. You picked the right one!
-MoneyDuh
Always pointing you in the right direction $$$$$$$$
Follow me for all the hottest stock picks: http://investorshub.advfn.com/boards/profile.aspx?user=373707
10K Out! Read below:
http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=9049378
ENTEST BIOMEDICAL, INC.
FORM 10-K
(Annual Report)
Filed 02/01/13 for the Period Ending 08/31/12
Address 4700 SPRING STREET, ST 203
LA MESA, CA 91941
Telephone (619) 702-1404
CIK 0001449447
Symbol ENTB
SIC Code 0700 - Agricultural Services
Industry Biotechnology & Drugs
Sector Healthcare
Fiscal Year 08/31
http://www.edgar-online.com
© Copyright 2013, EDGAR Online, Inc. All Rights Reserved.
Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.
United States Securities and Exchange Commission
Washington, D.C. 20549
Form 10-K
Commission file number: 333-154989
ENTEST BIOMEDICAL, INC.
(Name of small business issuer in its charter)
4700 Spring Street, Suite 304, 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 No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s
knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405
of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No
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: $528,715
As of January 25, 2013 Entest BioMedical, Inc. had 446,519,900 common shares outstanding, 3,201,397 Series B Preferred shares outstanding, and 5,000 Series AA preferred shares outstanding and 75,000
Non Voting Convertible Preferred shares outstanding.
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934:
For the fiscal year ending August 31, 2012
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934:
For the transition period from ___________ to ___________.
Nevada 26-3431263
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification 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
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:
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.
• dependence on key personnel;
• competitive factors;
• degree of success of research and development programs
• the operation of our business; and
• general economic conditions
PART I
Item 1. Business
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 currently intend 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’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 process by which a new drug is approved for use in humans within the United States generally begins prior to submission of the IND (Investigational New Drug Application) with the FDA.
Prior to submission of the IND, the sponsor of the drug compound under development must test the drugs on laboratory animals (preclinical testing) in order that toxicity may be determined and efficacy
may be demonstrated. The results of such preclinical testing is crucial in determining whether or not the sponsor may proceed onto clinical trials on human beings and preclinical testing is required to be
performed on multiple species.
Drug studies in humans can begin only after an IND is reviewed by the FDA and a local institutional review board (IRB). The board is a panel of scientists and non-scientists in hospitals and research
institutions that oversees clinical research.
IRBs approve the clinical trial protocols, which describe the type of people who may participate in the clinical trial, the schedule of tests and procedures, the medications and dosages to be studied, the
length of the study, the study's objectives, and other details. IRBs make sure the study is acceptable, that participants have given consent and are fully informed of their risks, and that researchers take
appropriate steps to protect patients from harm.
After trial protocols have been approved the sponsor moves on to Phase I clinical trials (to determine safety and toxicity in a small number of volunteers) and, if Phase 1 studies don't reveal unacceptable
toxicity, Phase II and Phase III clinical trials to determine effectiveness.
The process by which a new drug is approved for veterinary use within the United States generally begins with the sponsor researching and developing the new compound and conducting initial (“pilot”)
studies on it for a specific use in a specific animal species (called the “target animal” species) If the results of the pilot studies are promising and there is a potential market for the drug, the drug sponsor
contacts The US Food and Drug Administration’s Center for Veterinary Medicine (CVM) to officially begin the drug approval process by opening an Investigational New Animal Drug (“INAD”) file.
Information is submitted regarding Chemistry, Manufacturing, and Controls; Effectiveness; Target Animal Safety; Human Food Safety(if applicable); Environmental Impact (if applicable) and Labeling in
support of the NADA (New Animal Drug Application) which is submitted by the sponsor for approval by the FDA.
With the exception of a biologic product which can be classified as a medical device, Biologics developed for human use generally are undergo the same path to FDA approval as for drugs. Biologics
classified as medical devices may, in most instance, be subject to premarket approval by the FDA. Medical devices intended for veterinary use are not subject to premarket approval by the FDA.
Veterinary Biologics are regulated by the U.S. Department of Agriculture (USDA) which is authorized, under the 1913 Virus-Serum-Toxin Act as amended by the 1985 Food Security 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 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.
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.
It is the Company’s opinion that factors such as the lack of need for multispecies pre clinical testing, smaller subject size in efficacy testing (subjects generally in the hundreds for veterinary equivalent of
Phase III clinical trials as opposed to generally in the thousands for Phase III clinical trials for drug compounds for use in humans), lack of the requirement for premarket approval for medical devices
intended for veterinary use should generally lead to a shorter timeframe for approval by the appropriate regulators of drugs, biologics, and medical devices intended for veterinary use as opposed to drugs,
biologics, and medical devices intended for human use.
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
The Company is attempting to acquire currently existing veterinary clinics so that it may benefit from:
(a) Cash flow generated from operations during the development stage of the Company’s products and services,
(b) Utilization of the clinics for clinical testing,
(c) Utilization of the clinics as a distribution channel for the Company’s products and services.
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 also became 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.
The payment of $50,000 due to Dr. McDonald was satisfied by the Company through the issuance of 143,000 of our common shares to Dr. Gregory McDonald on August 29, 2011.
Dr. McDonald was terminated from his position as Managing Licensee and Supervising Veterinarian of the McDonald Animal Hospital on March 30, 2012.
On October 10, 2012 a Complaint (“Complaint”) was filed in the Superior Court of the State of California against the Company and David Koos by McDonald, a former employee of the Company, alleging
breach of contract and breach of the covenant of good faith and dealing in connection with the assumption of lease obligations by the Company in connection with the acquisition of the assets of Pet
Pointers, Inc breach of contract and breach of the covenant of good faith and dealing in connection with an employment agreement enters into with McDonald inc connection with the Acquisition, breach of
contract in connection with the Acquisition purchase agreement, breach of the covenant of good faith and dealing in connection with the Acquisition purchase agreement, implied indemnity in connection to
amounts owed by McDonald to Anthony and Judi Marinelli, the Internal Revenue Service, and the California Franchise Tax Board, intentional misrepresentation, negligent misrepresentation , failure to pay
wages and violations of Sections 2802, 203, and 2806 of the California Labor Code. The Complaint sought judgment for nominal damages, actual damages, compensatory damages, lost wages,
compensation, expenses wage benefits and penalties pursuant to California Labor Code Sections 203 et al, 2802 and 2806, indemnification, accrued interest, punitive damages, costs of suit and attorney’s
fees.
On November 28, 2012 the “Company executed an agreement (“Agreement”) with Gregory McDonald ("McDonald"), Pet Pointers, Inc. ("Pet Pointer") whereby Mc Donald and Pet Pointer would acquire
from the Company all assets ( with the exception of cash and accounts receivable) utilized by the Company in the operation of the McDonald Animal Hospital, a full service veterinary clinic owned and
operated by the Company and located in Santa Barbara, California (“McDonald Asset Sale”).
As consideration to the Company for the assets acquired, McDonald and Pet Pointers provided to the Company a General release whereby McDonald and Pet Pointer waive, release and discharge the
Company and their respective assignees, officers, directors, shareholders, boards, owners, employees, attorneys, agents, trustors, trustees, beneficiaries, heirs, successors, and representatives from all known
and unknown claims, demands, causes of action, attorney's fees, costs, or expenses including:
(1) All claims relating to the Complaint.
(2) Those amounts owed by McDonald to Anthony and Judi Marinelli which the Company became obligated to pay on McDonald’s behalf pursuant to the asset purchase agreement entered into
between the Company and Gregory McDonald and Pet Pointers, Inc on January 4, 2011.
(3) Those amounts owed by McDonald to the Internal Revenue Service which the Company became obligated to pay on McDonald’s behalf pursuant to the asset purchase agreement entered into
between the Company and Gregory McDonald and Pet Pointers, Inc on January 4, 2011.
(4) Those amounts owed by McDonald to the California Franchise Tax Board which the Company became obligated to pay on McDonald’s behalf pursuant to the asset purchase agreement
entered into between the Company and Gregory McDonald and Pet Pointers, Inc on January 4, 2011.
Assets disposed of pursuant to the Agreement include approximately $4,897 of Property Plant and Equipment net of accumulated depreciation as well as all inventory held at the McDonald Animal
Hospital.
Assets disposed of pursuant to the Agreement also include
(i) Essentially all intellectual property, including computer software, utilized in connection with the operation of the McDonald Animal Hospital
(ii) All telephone numbers, fax numbers, service marks, trademarks, trade names, fictitious business names, websites, business email addresses, vendor lists, promotional materials, vendor records
and any and all business records including, but not limited to, such items stored in computer memories, microfiche, paper record or by any other means relevant to the operation of the McDonald
Animal Hospital.
(iii) All customer lists, customer contacts, and any and all customer records that are related to the McDonald Animal Hospital.
As a result of the agreement, the Company anticipates recording a non-cash pre-tax charge for the impairment of goodwill recorded in connection with the acquisition of the McDonald Animal Hospital of
approximately $405,000 for the quarter ended November 30, 2012.
Pursuant to the Agreement, the Company became obligated to make payment of $13,000 within five days of the Closing of the Agreement as such term is defined in the Agreement.
Pursuant to the Agreement, the Company agrees to waive, release and discharge McDonald and Pet Pointer from all known and unknown claims, demands, causes of action, attorney's fees, costs, or
expenses.
Pursuant to the Agreement, the Company agrees not to engage in a competing business within a 5 mile radius of the property currently housing the McDonald Animal Hospital for three years.
The acquisition of existing veterinary clinics / hospitals remains an integral part of the Company’s business plan. At this time, the company is seeking to identify and acquire veterinary practices existing
and operating within the areas of San Diego, California and Orange County, California .The Company believes that these areas are close enough in proximity the Company’s headquarters to allow ease of
interaction with the Company's management . In addition, the Company believes owning and operating veterinary clinics within the San Diego, California and Orange County , California areas will provide
greater convenience for persons involved with the Company's research and development activities who may be required to utilitize those facilities. The company is currently in discussions with entities it
believes can expedite local clinic acquisitions.
The Company has not undertaken any discussions with any pharmaceutical companies regarding the commercialization of any products under development. None of the Company’s products have been
approved by any regulatory body for marketing within the United States or anywhere else. No assurance can be given that all or any of the Company’s currently planned products will ever be
commercialized. Therapies which are veterinary biologics may be administered to patients of veterinary clinics that may be acquired 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.
Principal Products and Services
Th e 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 involves isolating tumor cells from the patient and then placing the cells into a cell implant device that
is inserted subcutaneously into the patient. The resulting expression of tumor antigens from the device is intended to generate an anti-tumor immune response. The implant chamber device provokes
immune responses to the tumor cells isolated from the patient’s own tumor through a process known as indirect presentation. Tumor cells implanted in the device are exposed to conditions that are distinct
from the tumor’s environment from which they were isolated. This altered environment allows for anti-tumor responses that are not ordinarily observed in the natural tumor progression.
The cells are :
1) Isolated from the tumor and freed from the natural tumor microenvironment
2) Subjected to an initial ischemic condition of hypoxia that induces increased antigen expression
3) Allowed to repopulate within the device in a context that facilitates extended release of tumor antigens.
The device utilized is comprised of a 0.4 micron inner membrane to retain the implanted cells and an
outer 5 micron membrane that allows blood vessels to form on the surface to enhance biocompatibility. The outer membrane is held in place by a polyester mesh. The membranes are sonically sealed using
a polyester mesh insert.
The device contains a surface architecture that promotes vascularization in-vivo. There is an initial ischemic phase that may additionally influence the tumor cell growth characteristics and genetic
regulation of the tumor cells.
It is hypothesized that shortly after implantation, the expression of immunosuppressive molecules is down regulated while the release of antigens is maintained, thus allowing immune responses to occur
that would normally be suppressed.
The Antigens that are released from the implanted device are taken up by antigen presenting cells (APC).
It is believed that the APCs will be trained to recognize the cancer cells and alert the body’s immune response, activating antibodies and T cells to destroy the tumor cells.
The Company is currently conducting a ten dog safety study to Evaluate ImenVax™ I for the Treatment of Canine Oral Melanoma and determine adverse effects, if any. As of May 17, 2012 three dogs
suffering from oral melanoma have been administered the therapy with no dog suffering any material adverse reaction.
Inclusion in the Safety Study is limited to ten dogs with histologically confirmed canine oral melanoma with a Studied Karnofsky performance status of one or less. The subject are required to be over
eight kg with measurable tumor lesions by caliper or imaging, either primary or metastatic, that may or may not have had prior non-immunological-based therapy. No concurrent NSAID therapy is
allowed and previous use of immune-based therapies is not permitted. Subjects are required to have a two month life expectancy, and, not have any disease or condition (other than the cancer) that would
preclude living for 3 to 6 months.
Toxicity is evaluated prior to, and after, treatment and monthly for a period of 3 months. To date, subjects have been recruited solely from patients of the McDonald Animal Hospital in order that the
therapy may be administered 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. To date, 3 dogs have been enrolled in the safety study with none exhibiting any adverse effects. The
Company estimates that an additional $100,000 will be required to be expended to complete the safety study.
Subsequent to completion of the safety study and pending favorable results, the Company plans to offer ImenVax™ I to its own patients 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
subject to the successful acquisition of one or more veterinary clinics by the Company.
ImenVax ™ II
Also in early stage development by the Company is a version of ImenVax ™ called ImenVax ™ II which utilizes 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 ™ II is designed to function in a manner similar to ImenVax™ I. However, In order to further potentiate the tumor antigen specific immune responses, the Company intends to include adjuvant
cytokine(s) along with tumor cells into the implantation device. The adjuvants can be added through cytokine expressing cell line. The implantation device to be utilized for administering ImenVax ™ II
is expected to be substantially similar to that utilized in administering ImenVax™ I.
ImenVax ™ III
ImenVax III is intended to function by harnessing the ability of placental extracts to combat canine cancers. ImenVax™III is intended to treat existing tumors through stimulation of 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.
Xenogeneic (from different species) antigen induced immunity has been shown to break self tolerance and capable of engendering immune responses against the endogenous counterpart self - antigen. The
use of xenogeneic placental derived agents such as VEGF (vascular endothelial growth factor) has demonstrated regression of soft tissue sarcomas in dogs (Kamstock D, Elmslie R, Thamm D, Dow S.
2007. Evaluation of a xenogeneic VEGF vaccine in dogs with soft tissue sarcoma. 56(8): 1299 - 309).
ImenVax ™ III is intended to be an off the shelf formulation , manufactured under GMP, which shall harness the power of trophoblasts (cells forming the outer layer of a blastocyst, which provide
nutrients to the embryo and develop into a large part of the placenta) derived from human placental tissue to combat canine cancers . No tissue processing is required for the administration of the ImenVax
™ III therapy as opposed to I and II as no cellular material from the patient is utilized.
ENT-576 ™
ENT-576 ™ is a proprietary therapy being developed by the Company for the treatment of Chronic Obstructive Pulmonary Disease (COPD) such therapy comprising of:
a) extracting a therapeutic number of cells from a tissue containing in part a stem cell population;
b) processing said population of cells derived from said tissue so as to concentrate said stem cell population;
c) systemic re-administration of said cell population into the same patient; and
d) exposing the patient lung to a sufficient intensity and frequency of laser irradiation necessary to augment therapeutic activity of said cells in said patient suffering from COPD. The Company
has also considered utilizing an FDA approved biochemical drug to produce the desired augmentation of therapeutic activity.
A therapeutic intervention in COPD would require addressing the issues of inflammation and regeneration. Although approaches such as administration of bone marrow stem cells or fat derived cellular
components have both regenerative and anti-inflammatory activity in animal models, the Company feels that the need to enhance their potency for clinical applications can be addressed through the usage
of low level lasers which studies have demonstrated may induce growth factor production, inhibit inflammation and stimulate angiogenesis.
There can be no assurance that approvals required will be obtained for any of the Company’s current therapies under development, or that if such approvals are obtained that the Company will be able to
effectively market its therapies. There can be no assurance given that actual costs and timeframes related to commercialization for any proposed product will not deviate materially from the Company’s
estimation. Currently, none of the Company’s products under development may be administered or marketed in the United States or outside of the United states except pursuant to an exemption from
relevant regulation. 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.
Distribution methods of the products or services:
The Company intends to distribute its products and services through several channels including:
On October 19, 2011 the Company entered into an agreement with RenovoCyte LLC and Medistem Inc. (“Agreement”) whereby the Company shall provide research services to RenovoCyte LLC in
connection with a ten dog pilot study to determine the safety and effectiveness of the utilization of stem cell therapy for the treatment of arthritis in animals (“Pilot Study”). The term of the Agreement is
from October 19, 2011 until the earlier of the completion of the Pilot Study or October 19, 2015 unless terminated by RenovoCyte LLC due to an event of force majeure exceeding a period of 4 months. As
consideration for providing services pursuant to the Agreement, the Company shall enjoy joint publishing rights with regards to the results of the Pilot Study. Canine mesenchymal multipotent stem cell
injections to be utilized during the course of the Pilot Study shall be provided to the Company by RenovoCyte LLC at no cost to the Company.
As of January 26, 2013 there have been 8 canine patients treated through the Pilot Study.
Competitive business conditions and Entest's competitive position in the industry and methods of competition
(a) utilization of an internal sales force to market directly to veterinary professionals
(b) distribution through acquired veterinary clinics if and when such clinics are acquired
(c) utilization of contract sales organizations
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. Brian Koos is the brother of David R. Koos, the Company’s
Chairman, President and CEO.
Dr. Koos serves as a member of the Advisory Board pursuant to an agreement by and between the Company and Bio-Matrix Scientific Group, Inc. entered into on June 19, 2009 whereby the Bio-Matrix
Scientific Group, Inc assigned its rights to the services of Dr. Koos to the Company for consideration to Bio-Matrix Scientific Group of $10,000. Those rights included the services of Dr. Koos as a member
of the Company’s Advisory Board for a period ending April 8, 2014.
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. Josephs serves as a member of the Advisory Board at will and at the pleasure of the Board of Directors of the Company. There is no binding agreement by and between the Company and Dr. Josephs
regarding membership on the Advisory Board.
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. Carrier serves as a member of the Advisory Board at will and at the pleasure of the Board of Directors of the Company. There is no binding agreement by and between the Company and Dr. Carrier
regarding membership on the Advisory Board
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. Lin serves as a member of the Advisory Board at will and at the pleasure of the Board of Directors of the Company. There is no binding agreement by and between the Company and Dr. Lin regarding
membership on the Advisory Board.
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.
Dr. Bogin serves as a member of the Advisory Board at will and at the pleasure of the Board of Directors of the Company. There is no binding agreement by and between the Company and Dr. Bogin
regarding membership on the Advisory Board.
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.
Dr. Phillips agreed on January 6, 2011 to serve as a member of the Advisory Board for a period of 24 months. In connection with that agreement, Dr. Phillips received 10,000 common shares of the
Company.
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 intend to direct our marketing efforts related to clinics , if and when they may be acquired, toward increasing the number of annual visits from existing clients through
customer education efforts and toward attracting new clients 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 the Company is focusing its acquisition efforts , 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 on research and development activities
During the fiscal year ended August 31, 2012 we expended $5,798 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 January 26, 2013, Entest has _____ employees of which _____ are full time.
Item 2. Properties
On November 1, 2011, the Company entered into an agreement to lease approximately 2,320 square feet of office space beginning December 1, 2011 for a period of five years.
Rent to be charged to the Company pursuant to the lease is as follows:
$2,996 per month for the period beginning December 1, 2011 and ending November 30, 2012
$3,116 per month for the period beginning December 1, 2012 and ending November 30, 2013
$3,241 per month for the period beginning December 1, 2013 and ending November 30, 2014
$3,371 per month for the period beginning December 1, 2014 and ending November 30, 2015
$3,506 per month for the period beginning December 1, 2015 and ending November 30, 2016
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.
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 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. 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.
On May 24, 2012, a Complaint (“Complaint”) was filed in the U.S. Bankruptcy Court for the District of Oregon against the Company by Titterington Veterinary Services Inc. (“TVS”). The Complaint is an
adversary proceeding filed by TVS arising from TVS’s bankruptcy case currently pending in U.S. Bankruptcy Court for the District of Oregon. The Complaint alleges Breach of Contract resulting from the
Company’s alleged failure to pay certain expenses the Company was required to pay pursuant to an agreement with TVS, Dr. Ronald Titterington, DVM and Dr. Kathy Snell, DVM (“TVS Agreement”).
TVS is seeking a judgment and money award against the Company in an amount to be proven at trial which TVS estimates in the Complaint to be up to $50,000. TVS is also seeking a judgment and order
against the Company to provide an accounting of all revenues received by the Company pursuant to the TVS Agreement, all expenses paid, unpaid, and due and owing pursuant to the TVS Agreement as
well as a revenue share which TVS claims is due them pursuant to the TVS Agreement. TVS is also seeking a judgment requiring the Company to turn over a sum of money equal to expenses the Company
was obligated to pay pursuant to the TVS Agreement. TVS is also seeking attorney’s fees and expenses. 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 and an outcome unfavorable to the Company may have a material adverse effect
on the Company. On September 19, 2012 the Plaintiff’s Claim for Relief for turnover and an accounting under 11 U.S.C. § 542 and the Plaintiff's Claim for Relief for attorney fees were dismissed with
prejudice and , as per the claim of breach of contract, the proceeding was transferred to the United States Bankruptcy Court for the District of Southern California for all further proceedings.
On October 10, 2012 a Complaint(“Complaint”) was filed in the Superior Court of the State of California against the Company and David Koos by Dr. Gregory McDonald, a former employee of the
Company, alleging breach of contract and breach of the covenant of good faith and dealing in connection with the assumption of lease obligations by the Company in connection with the acquisition of the
assets of Pet Pointers, Inc (“Acquisition”) (Note 9) breach of contract and breach of the covenant of good faith and dealing in connection with an employment agreement enters into with Dr. McDonald inc
connection with the Acquisition, breach of contract in connection with the Acquisition purchase agreement, breach of the covenant of good faith and dealing in connection with the Acquisition purchase
agreement, implied indemnity in connection to amounts owed by Dr. McDonald to Anthony and Judi Marinelli, the Internal Revenue Service, and the California Franchise Tax Board, intentional
misrepresentation, negligent misrepresentation , failure to pay wages and violations of Sections 2802, 203, and 2806 of the California Labor Code. The Complaint seeks judgment for nominal damages,
actual damages, compensatory damages, lost wages, compensation, expenses wage benefits and penalties pursuant to California Labor Code Sections 203 et al, 2802 and 2806, indemnification, accrued
interest, punitive damages, costs of suit and attorney’s fees.
On November 28, 2012, a settlement of the aforementioned Complaint, the “Company executed an agreement (“Agreement”) with Gregory McDonald ("McDonald"), Pet Pointers, Inc. ("Pet Pointer")
whereby Mc Donald and Pet Pointer would acquire from the Company all assets ( with the exception of cash and accounts receivable) utilized by the Company in the operation of the McDonald Animal
Hospital (“McDonald Asset Sale”).
As consideration to the Company for the assets acquired, McDonald and Pet Pointers provided to the Company a General release whereby McDonald and Pet Pointer waive, release and discharge the
Company and their respective assignees, officers, directors, shareholders, boards, owners, employees, attorneys, agents, trustors, trustees, beneficiaries, heirs, successors, and representatives from all known
and unknown claims, demands, causes of action, attorney's fees, costs, or expenses including:
(1) All claims relating to the Complaint.
(2) Those owed by McDonald to Anthony and Judi Marinelli which the Company became obligated to pay on McDonald’s behalf pursuant to the asset purchase agreement entered into between
the Company and Gregory McDonald and Pet Pointers, Inc
(3) Those amounts owed by McDonald to the Internal Revenue Service which the Company became obligated to pay on McDonald’s behalf pursuant to the asset purchase agreement entered into
between the Company and Gregory McDonald and Pet Pointers, Inc
(4) Those amounts owed by McDonald to the California Franchise Tax Board which the Company became obligated to pay on McDonald’s behalf pursuant to the asset purchase agreement
entered into between the Company and Gregory McDonald and Pet Pointers, Inc
Assets disposed of pursuant to the Agreement include all Property Plant and Equipment as well as all inventory held at the McDonald Animal Hospital.
Assets disposed of pursuant to the Agreement also include:
(i) Essentially all intellectual property, including computer software, utilized in connection with the operation of the McDonald Animal Hospital
(ii) All telephone numbers, fax numbers, service marks, trademarks, trade names, fictitious business names, websites, business email addresses, vendor lists, promotional materials, vendor records
and any and all business records including, but not limited to, such items stored in computer memories, microfiche, paper record or by any other means relevant to the operation of the McDonald
Animal Hospital.
(iii) All customer lists, customer contacts, and any and all customer records that are related to the McDonald Animal Hospital.
On January 15, 2013 the Company received from Asher Enterprises, Inc.(“Asher”) a written demand for payment of $189,000 ( representing 150% of the outstanding principal balance) plus accrued interest
at the Default rate of interest which is 22% per annum. The Demand stems from Asher’s assertion that the Company has defaulted on provisions in two Convertible Notes in the principal amounts of
$63,000 per note issued by the Company to Asher as a result of the Company’s failure to comply with the reporting requirements of the Securities and Exchange Act of 1934. Collectively the amount of
$189,000 plus accrued interest at the Default rate of interest which is 22% per annum may be referred to as the Default Amount
Pursuant to the terms and conditions of the two notes, in the Event that the Company fails to pay the Default Amount within five business days of written notice that such amount is due and payable, then
the Asher shall have the right at any time, so long as the Company remains in default (and so long and to the extent that there are sufficient authorized shares), to require the Company, upon written notice,
to immediately issue, in lieu of the Default Amount, the number of shares of Common Stock of the Company equal to the Default Amount divided by the Conversion Price then in effect pursuant to the
terms and conditions of the notes.
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 2,000,000,000 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.
Holders
As of August 31, 2012 there were approximately 339 holders of our Common Stock.
Dividends
No cash dividends were paid during the fiscal year ending August 31, 2012. We do not expect to declare cash dividends in the immediate future. On March 6, 2012 a dividend of 3,201,397 shares of Series
B Preferred Stock was paid to the Company’s common shareholders of record as of February 21, 2012.
Recent Sales of Unregistered Securities
For the Fiscal Year Ended August 31, 2012:
Shares issued for Services:
On October 7, 2011 the Company issued 50,000 shares of common stock (“Shares”) to a consultant for services rendered.
September 1, 2011 to August 31, 2012 High Low
First Quarter $ 0.598 $ 0.1387
Second Quarter 0.100 0.03
Third Quarter 0.034 0.0017
Fourth Quarter $ 0.0225 $ 0.0025
September 1, 2010 to August 31, 2011 High Low
First Quarter $ 0.30 $ 0.52
Second Quarter 4.190 1.250
Third Quarter 2.900 1.180
Fourth Quarter $ 1.1730 $ 0.390
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 November 22, 2011 the Company issued 18,333 shares of common stock (“Shares”) to a consultant for services rendered.
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 January 10 , 2012 the Company issued 27,499 shares of common stock (“Shares”) to a consultant for services rendered.
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 February 26, 2012 the Company issued 174,663 shares of common stock (“Shares”) to a consultant for services rendered.
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 March 14, 2012 the Company issued 3,000,000 shares of its common stock (“Shares”) to the order of Capital Path Securities LLC for acting as the Company’s exclusive advisor and placement agent in
connection with the Equity Purchase Agreement and Registration Rights Agreement entered into by and between the Company and Southridge Partners II, LP (“Southridge”) on February 27, 2012.
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 April 3, 2012 the Company issued 50,000,000 shares of common stock (“Shares”) to David R. Koos as a bonus.
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.
David Koos may not offer to sell, sell, transfer, pledge or otherwise dispose of the Bonus Shares prior to April 2, 2017 (“Restricted Period”).
In the event that, prior to the expiration of the Restricted Period, David Koos voluntarily ceases to be employed at the Company or is terminated for cause the Shares shall be forfeited.
On April 3, 2012 the Company issued 27,000,000 shares of common stock (“Shares”) to seven employees as bonuses.
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.
No employee may offer to sell, sell, transfer, pledge or otherwise dispose of the Bonus Shares prior to April 2, 2017 (“Restricted Period”).
In the event that, prior to the expiration of the Restricted Period, any employee voluntarily ceases to be employed at the Company or is terminated for cause his or her Shares shall be forfeited.
On April 3, 2012 the Company issued 15,000,000 shares of common stock (“Shares”) to Joseph G. Vaini as bonus.
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.
Joseph G. Vaini may not offer to sell, sell, transfer, pledge or otherwise dispose of the Shares prior to April 2, 2017 (“Restricted Period”).
In the event that, prior to the expiration of the Restricted Period, Joseph G. Vaini declines to provide if requested to provide, or is unable to provide if requested to provide, consulting services to the
Company of a nature that have been customarily provided by Joseph G. Vaini to the Company the Shares shall be forfeited.
On March 27, 2012 the Company issued 75,000 shares of its nonvoting convertible preferred stock to Southridge in accordance with the terms of the Equity Purchase Agreement entered into by and
between the Company and Southridge on February 27, 2012..
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.
Shares issued for Intangible Assets:
On November 11, 2011 the Company issued 2,500,000 shares of common stock (“Shares”) in connection with rights to receive future revenues of a Utah veterinary clinic.
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.
Shares Issued for Debt:
On November 28, 2011 the Company issued 134,983 shares of common stock (“Shares”) in satisfaction of $12,000 principal amount of Convertible Notes Payable.
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.
On December 12, 2011 the Company issued 258,824 shares of common stock (“Shares”) in satisfaction of $11,000 principal amount of Convertible Notes Payable.
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.
On December 19, 2011 the Company issued 338,983 shares of common stock (“Shares”) in satisfaction of $12,000 principal amount of Convertible Notes Payable
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.
On January 27, 2012 the Company issued 227,963 shares of common stock (“Shares”) in satisfaction of $7,500 principal amount of Convertible Notes Payable.
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.
On February 3, 2012 the Company issued 528,821 shares of common stock (“Shares”) in satisfaction of $15,000 principal amount of Convertible Notes Payable.
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.
On February 16, 2012 the Company issued 721,154 shares of common stock (“Shares”) in satisfaction of $15,000 principal amount of Convertible Notes Payable.
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.
On March 7, 2012 the Company issued 2,322,695 shares of common stock (“Shares”) in satisfaction of $32,750 of Convertible Notes Payable.
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.
On March 21, 2012 the Company issued 1,886,195 shares of common stock in satisfaction of $25,200 of Convertible Notes Payable.
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.
On March 26, 2012 the Company issued 3,017,502 shares of common stock (“Shares”) in satisfaction of $24,650 of Convertible Notes Payable.
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.
On April 2, 2012 the Company issued 1,675.111 shares of common stock (“Shares”) in satisfaction of $7,538 of Convertible Notes Payable.
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.
On April 3, 2012 the Company issued 1,590, 909 shares of common stock (“Shares”) in satisfaction of $7,000 of Convertible Notes Payable.
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.
On April 10, 2012 the Company issued 5,555,555 shares of common stock (“Shares”) in satisfaction of $10,000 of Convertible Notes Payable.
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.
On April 12, 2012 the Company issued 4,722,222 shares of common stock (“Shares”) in satisfaction of $8,500 of Convertible Notes Payable.
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.
On April 13, 2012 the Company issued 8,250,000 shares of common stock (“Shares”) in satisfaction of $14,850 of Convertible Notes Payable.
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.
On April 16, 2012 the Company issued 11,250,000 shares of common stock (“Shares”) in satisfaction of $18,000 of Convertible Notes Payable.
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.
On April 18, 2012 the Company issued 1,250,000 shares of common stock (“Shares”) in satisfaction of $2,000 of Convertible Notes Payable
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.
On April 19, 2012 the Company issued 2,724,968 shares of common stock (“Shares”) in satisfaction of $4,300 of Convertible Notes Payable.
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.
On April 24, 2012 the Company issued 4,005,787 shares of common stock (“Shares”) in satisfaction of $6,922 of Convertible Notes Payable.
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.
On May 1, 2012 the Company issued 8,000,000 shares of common stock (“Shares”) in satisfaction of $12,000 of Convertible Notes Payable.
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.
On May 3, 2012 the Company issued 7,142, 857 shares of common stock (“Shares”) in satisfaction of $10,000 of Convertible Notes Payable.
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.
On May 7, 2012 the Company issued 6,250,000 shares of common stock (“Shares”) in satisfaction of $10,000 of Convertible Notes Payable.
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.
On May 9, 2012 the Company issued 5,000,000 shares of common stock (“Shares”) in satisfaction of $500 of principal indebtedness of Convertible Notes Payable.
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.
On June 20, 2012 the company issued 19,054,140 common shares (“Shares”) in satisfaction of $75,842 of Convertible Notes Payable.
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.
On June 25, 2012 the company issued 1,808,172 common shares (“Shares”) in satisfaction of $6,627 of Convertible Notes Payable.
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.
On August 9, 2012 the Company issued 15,976,380 common shares (“Shares”) in satisfaction of $19,880 of Convertible Notes Payable.
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.
On October 17, 2012 the Company issued 23,000,000 common shares (“Shares”) in satisfaction of $19,320 of outstanding convertible indebtedness.
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.
On October 22, 2012 the Company issued 10,810,811 common shares(“Shares”) in satisfaction of $8,000 of outstanding convertible indebtedness.
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.
Shares issued for interest:
On January 27, 2012 the Company issued 51,672 common shares (“Shares”) in satisfaction of $1,700 of interest accrued but unpaid.
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.
On April 10, 2012 the Company issued 833,333 common shares (“Shares”) in satisfaction of $1,500 of interest accrued but unpaid.
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.
On April 18, 2012 the Company issued 875,000 common shares (“Shares”) in satisfaction of $1,400 of interest accrued but unpaid.
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.
On May 9, 2012 the Company issued 1,300,000 common shares (“Shares”) in satisfaction of $1,300 of interest accrued but unpaid.
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.
Shares issued pursuant to Contractual Obligations:
On April 11, 2012 the Company issued 1029679 common shares (“Shares”) pursuant to contractual obligations contained in certain convertible notes outstanding.
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.
On April 11, 2012 the Company issued 2,306,275 common shares (“Shares”) pursuant to contractual obligations contained in certain convertible notes outstanding.
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.
On April 13, 2012 the Company issued 2,430,753 common shares (“Shares”) pursuant to contractual obligations contained in certain convertible notes outstanding.
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.
On August 2, 2012 the Company issued 1,536,948 common shares (“Shares”) pursuant to contractual obligations contained in certain convertible notes outstanding.
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.
Issuance of Convertible Debentures:
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.
The securities 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 securities were sold directly
through our management. No commission or other consideration was paid in connection with the sale of the securities. There was no advertisement or general solicitation made in connection with this Offer
and Sale of securities.
The note contained a provision that until such time as the shares of common stock issuable upon conversion of the Note have been registered under the Act or otherwise may be sold pursuant to Rule 144
without any restriction as to the number of securities as of a particular date that can then be immediately sold, each certificate for shares of common stock issuable upon conversion of the note that has not
been so included in an effective registration statement or that has not been sold pursuant to an effective registration statement or an exemption that permits removal of the legend, shall bear a restrictive
legend.
On December 19, 2011, the Company issued a convertible promissory note in the amount of $37,500. The note bears an interest rate of eight percent (8%), matures on September 21, 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.
The securities 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 securities were sold directly
through our management. No commission or other consideration was paid in connection with the sale of the securities. There was no advertisement or general solicitation made in connection with this Offer
and Sale of securities.
The note contained a provision that until such time as the shares of common stock issuable upon conversion of the Note have been registered under the Act or otherwise may be sold pursuant to Rule 144
without any restriction as to the number of securities as of a particular date that can then be immediately sold, each certificate for shares of common stock issuable upon conversion of the note that has not
been so included in an effective registration statement or that has not been sold pursuant to an effective registration statement or an exemption that permits removal of the legend, shall bear a restrictive
legend.
On December 20, 2011 the Company amended the terms of $30,000 in existing debt as follows:
(a) Due and payable December 31, 2012
(b) Simple interest of 10% from December 20, 2011 to the date the debt is fully converted or paid in full
(c) Convertible into the common stock of the Company at the option of the holder at a 50% discount from the average of the lowest three Trading Prices for the common stock during the 10
trading day period ending one Trading Day prior to the date the conversion notice is sent by the holder. "Trading Price" means the closing bid price on the applicable trading market as reported by
a reliable reporting service.
On February 28, 2012 the Company amended the terms of $85,500 in existing principal indebtedness as well as 3,710 of interest accrued but unpaid to be as follows:
The aggregate indebtedness of $89,210 shall bear simple interest, be payable upon demand of the holder, and be convertible into the common shares of the company at a conversion price per share equal to
60% (the “Discount”) of the lowest closing bid price for the Company’s common stock during the 5 trading days immediately preceding a conversion date, as reported by Bloomberg. provided that if the
closing bid price for the common stock on the date in which the conversion shares are deposited into Holder’s brokerage account and confirmation has been received that Holder may execute trades of the
conversion shares ( Clearing Date) is lower than the Closing Bid Price, then the purchase price for the conversion shares shall be adjusted such that the Discount shall be taken from the closing bid price on
the Clearing Date, and the Company shall issue additional shares to Purchaser to reflect such adjusted Purchase Price (“Bonus Shares”). The company has agreed on a limitation on conversion equal to
9.99% of the Company’s outstanding common stock.
On April 16, 2012 the Company issued a convertible promissory note in the amount of $42,500 which was received April 21, 2012. The note bears an interest rate of eight percent (8%), matures on January
18, 2013. 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.
The securities 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 securities were sold directly
through our management. No commission or other consideration was paid in connection with the sale of the securities. There was no advertisement or general solicitation made in connection with this Offer
and Sale of securities.
The note contained a provision that until such time as the shares of common stock issuable upon conversion of the Note have been registered under the Act or otherwise may be sold pursuant to Rule 144
without any restriction as to the number of securities as of a particular date that can then be immediately sold, each certificate for shares of common stock issuable upon conversion of the note that has not
been so included in an effective registration statement or that has not been sold pursuant to an effective registration statement or an exemption that permits removal of the legend, shall bear a restrictive
legend.
On June 15, 2012 the Company amended the terms of $102,349 in existing principal indebtedness as follows:
The Aggregate Indebtedness of $102,349 is convertible at Holder’s option at a conversion price per share equal to 60% (the “Discount”) of the lowest closing bid price for the Company’s common stock
during the 5 trading days immediately preceding a conversion date, as reported by Bloomberg (the “Closing Bid Price”); provided that if the closing bid price for the common stock on the date in which the
conversion shares are deposited into Holder’s brokerage account and confirmation has been received that Holder may execute trades of the conversion shares ( Clearing Date) is lower than the Closing Bid
Price, then the purchase price for the conversion shares shall be adjusted such that the Discount shall be taken from the closing bid price on the Clearing Date, and the Company shall issue additional shares
to Purchaser to reflect such adjusted Purchase Price (“Bonus Shares”). The company has agreed on a limitation on conversion equal to 9.99% of the Company’s outstanding common stock.
On July 26, 2012, the Company issued a convertible note in the principal amount of $63,000 to Asher Enterprises, Inc. The Note bears interest at the rate of 8% per annum and matures on April 30, 2013.
The Note is convertible any time during the period beginning on the date which is one hundred eighty (180) days following the date of the Note into common stock of the Company, at Asher’s option, at a
39% discount to the average of the three lowest closing bid prices of the common stock during the 10 Trading Day period prior to conversion as Trading Day is defined in the Note.
The securities 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 securities were sold directly
through our management. No commission or other consideration was paid in connection with the sale of the securities. There was no advertisement or general solicitation made in connection with this Offer
and Sale of securities.
The note contained a provision that until such time as the shares of common stock issuable upon conversion of the Note have been registered under the Act or otherwise may be sold pursuant to Rule 144
without any restriction as to the number of securities as of a particular date that can then be immediately sold, each certificate for shares of common stock issuable upon conversion of the note that has not
been so included in an effective registration statement or that has not been sold pursuant to an effective registration statement or an exemption that permits removal of the legend, shall bear a restrictive
legend.
On August 21, 2012 the Company amended the terms of $59,000 in existing principal indebtedness as follows:
The Aggregate Indebtedness of $59,000 is convertible at Holder’s option at a conversion price per share equal to 60% (the “Discount”) of the lowest closing bid price for the Company’s common stock
during the 10 trading days immediately preceding a conversion date, as reported by Bloomberg (the “Closing Bid Price”); provided that if the closing bid price for the common stock on the date in which
the conversion shares are deposited into Holder’s brokerage account and confirmation has been received that Holder may execute trades of the conversion shares ( Clearing Date) is lower than the Closing
Bid Price, then the purchase price for the conversion shares shall be adjusted such that the Discount shall be taken from the closing bid price on the Clearing Date, and the Company shall issue additional
shares to Purchaser to reflect such adjusted Purchase Price (“Bonus Shares”). The company has agreed on a limitation on conversion equal to 9.99% of the Company’s outstanding common stock
On September 20, 2012 the Company issued a convertible promissory note in the amount of $63,000 cash from which was received September 27, 2012. The note bears an interest rate of eight percent
(8%), matures on June 25, 2013. 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 thirty nine percent (39%)
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 securities 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 securities were sold directly
through our management. No commission or other consideration was paid in connection with the sale of the securities. There was no advertisement or general solicitation made in connection with this Offer
and Sale of securities.
The note contained a provision that until such time as the shares of common stock issuable upon conversion of the Note have been registered under the Act or otherwise may be sold pursuant to Rule 144
without any restriction as to the number of securities as of a particular date that can then be immediately sold, each certificate for shares of common stock issuable upon conversion of the note that has not
been so included in an effective registration statement or that has not been sold pursuant to an effective registration statement or an exemption that permits removal of the legend, shall bear a restrictive
legend.
Use of Proceeds, Registered Offering
The Company has filed a registration statement on Form S-1 under the Securities Act of 1933 registering for resale up to 37,640,314 shares of our common stock by Southridge which are Put Shares that
may be put to Southridge pursuant to an Equity Purchase Agreement dated as of June 1, 2012 by and between Southridge and the Company (“June Purchase Agreement”). The Registration Statement was
declared effective by the United States Securities and Exchange Commission on August 27, 2012.
The June Purchase Agreement with Southridge provides that Southridge is committed to purchase up to $10 million of our common stock. We may draw on the facility from time to time, as and when we
determine appropriate in accordance with the terms and conditions of the June Purchase Agreement.
We will not receive any proceeds from the sale of the common stock offered through this prospectus by Southridge. However, we will receive proceeds from any sale of the common stock under the
Purchase Agreement to Southridge
Between September 4, 2012 and September 17, 2012 the Company sold 26,802,465 common shares to Southridge for the gross amount of $50,000 pursuant to the June Purchase Agreement. The proceeds
were utilized as follows:
On October 2 , 2012 the Company sold 10,837,849 common shares to Southridge for the gross amount of $14,300 pursuant to the June Purchase Agreement. Total gross proceeds of $14,300 were utilized
to pay $14,300 of debt due to Southridge by the Company.
(1) $20,000 was utilized to pay debt due to Southridge
(2) $2,500 was paid to Capital Path Securities who acted as placement agent
(3) $27,500 was utilized for working capital purposes
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, 2012, we had Trade Accounts Receivable of $ 2,268 and as of August 31, 2011 we had Trade Accounts Receivable of $3,135.
The decrease in Trade Accounts Receivable of approximately 27% is attributable to successful collection of $867 of delinquent payments due from a client of the McDonald Animal Hospital.
As of August 31, 2012 we had Due from an Affiliate of $39,140 and as of August 31, 2011 we had Due from an Affiliate of $0.
The increase in Due from an Affiliate is primarily attributable to the reclassification of $59,500 of rental expenses prepaid to a shareholder of the Company to a non interest bearing liability of the
shareholder due at the demand of the Company as well as $240 in expenses paid by the Company for the benefit of the shareholder offset by a payment made to the company during the twelve months
ended August 31, 2012 of $20,600.
As of August 31, 2012, we had a balance of $13,000 in Current Portion of Prepaid Expenses compared to August 31, 2011 where the balance totaled $62,200.
The decrease in Current Portion of Prepaid Expenses of approximately 79% was primarily attributable to the reclassification of rental expenses prepaid to a shareholder of the Company to a non interest
bearing liability of the shareholder due at the demand of the Company.
As of August 31, 2012, the balance in Non-Current Portion of Prepaid Expenses totaled $0 compared to the August 31, 2011 balance of $10,300.
The decrease in the Non-Current Portion of Prepaid Expenses 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, 2012, we had Deposits in the amount of $1,151 and as of August 31, 2011 we had Deposits of $0..
The decrease in Deposits of 100% is attributable to deposits sent by the Company to San Diego Gas and Electric Company to be being applied toward utility charges incurred by the Company.
As of August 31, 2012, we had Accounts Payable of $74,574 and as of August 31, 2011 we had Accounts Payable of $27,564 .
The increase in Accounts Payable of approximately 170 % is primarily attributable to s primarily attributable to increases in outstanding obligations of the Company incurred in the course of business as
well as the incurring by the Company of $20,199 in payables pursuant to that agreement entered into by and between the Company and Titterington Veterinary Services, Inc., Dr. Ronald Titterington and
Dr. Kathy Snell.
As of August 31, 2012 we had Notes Payable of $225,362 and as of August 31, 2011 we had Notes payable of $159,911.
The increase in Notes Payable of approximately 40% is primarily attributable to a combination of additional borrowings by the Company incurred in order to fund operations and the reclassification of
$57,500 of accrued salary to Notes Payable as a result of assignment of the rights to that payment to a third party offset by the reclassification of approximately $280,559 of indebtedness to Convertible
Notes payable.
As of August 31, 2012 we had Convertible Notes Payable (net of unamortized discount resulting from a beneficial conversion feature) totaling $121,495 and as of August 31, 2011 we had Convertible
Notes Payable (net of unamortized discount resulting from a beneficial conversion feature) totaling $42,430. .
The increase in Convertible Notes Payable (net of unamortized discount resulting from a beneficial conversion feature) of approximately 86% is primarily attributable to:
The issuance of $456,059 in convertible debentures through a combination of initial issuances and modifications of the terms and conditions of existing securities
The recognition of $380,480 of interest expense attributable to amortizations of discounts recognized
Offset by:
$369,059 in principal amount of convertible indebtedness converted into common stock
$37,500 in convertible debt prepaid by the Company
$350,915 of discounts on Convertible Notes recognized
As of August 31, 2012 we had Accrued Expenses of $119,726 and As of August 31, 2011, we had Accrued Expenses of $67, 206
The increase in accrued expenses of approximately 78% is primarily attributable to:
(a) $15,239 in net interest accrued
(b) $44,500 in net additions to salaries accrued but unpaid
offset by $7219 net reductions in accrued tax expenses
Material Changes in Results of Operations
Revenues were $426,252 for the twelve months ended August 31, 2012. Revenues were $349,141 for the twelve months ended August 31, 2011. Net Losses were $1,889,563 for the twelve months ended
August 31, 2012 and $951,783 for the same period ended August 31, 2011.
The increase in Net Losses of approximately 98% is primarily attributable to:
Offset by :
A decrease in Research and Development Expenses of $103,265
A decrease in general and Administrative Expenses of $231,185
An increase in other income recognized of $94,850 attributable to cancellation of stock previously issued for services
Recognition of $187,699 in revenue realized as a result of that agreement entered into by and between the Company and Titterington Veterinary Services, Inc., Dr. Ronald Titterington and Dr. Kathy Snell.
All operating revenues realized by the Company re primarily derived through provision of Veterinary Services by the McDonald Animal Hospital. The increases in Total Revenues for the twelve months
ended August 31,2012 as compared to the twelve months ended August 31 , 2011 is partially attributable to the fact that the acquisition of the assets of Pet Pointers, Inc. by the Company through which the
Company acquired the McDonald Animal Hospital, had not occurred until January 4, 2011.
(a) Increase in Cost of Revenue of $29,894
(b) Increase in rental costs of $18,216
(c) Increase in Consultant’s Expenses of $268,522
(d) Loss on early extinguishment of Debt recognized in the amount of $18,647
(e) Increase in Expenses incurred pursuant to that agreement entered into by and between the Company and Titterington Veterinary Services, Inc., Dr. Ronald Titterington and Dr. Kathy Snell.
(f) Impairment of intangible Assets recognized in the amount of $683,333
(g) Increases in Interest Expense attributable to amortization of discount in the amount of $364,052
(h) Expenses incurred resulting from shares issued pursuant to contractual obligations in the amount of $23,868
(i) Expenses paid for through the issuance of Preferred shares in the amount of $75,000 such expenses being incurred in connection with that Equity Purchase Agreement entered into by and between
the Company and Southridge on February 27, 2012.
As of August 31, 2012 we had $42,737 cash on hand and current liabilities of $549,157 (exclusive of convertible debt discount attributable to a beneficial conversion feature) such liabilities consisting of
Accounts Payable, Notes Payable, Convertible Notes Payable, Amounts due to Affiliates / Others and Accrued Expenses.
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 offering securities for cash and acquiring existing veterinary clinics with the ability to generate cash flow to fund operations.
There is no guarantee that we will be able to raise any capital through any type of offerings. We can provide no assurance that we can acquire veterinary clinics which can generate sufficient cash flow to
neither 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. 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.
As of January 26, 2013 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
SEALE AND BEERS, CPAs
PCAOB & CPAB REGISTERED AUDITORS
www.sealebeers.com
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Entest BioMedical Inc.
We have audited the accompanying balance sheets of Entest BioMedical, Inc. as of August 31, 2012, and the related statements of income, stockholders’ equity (deficit), and cash flows
for the one-year period ended August 31, 2012. Entest BioMedical, Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we 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 were we engaged to perform, an
audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express
no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Entest BioMedical, Inc. as of August 31, 2012, and the related
statements of income, stockholders’ equity (deficit), and cash flows for the year ended August 31, 2012 in conformity with accounting principles generally accepted in the United States
of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 4 to the financial statements, the Company
has incurred recurring losses and recurring negative cash flow from operating activities, and has an accumulated deficit which raises substantial doubt about its ability to continue as a
going concern. Management’s plans concerning these matters are also described in Note 4. The financial statements do not include any adjustments that might result from the outcome of
this uncertainty.
/s/ Seale and Beers, CPAs
Seale and Beers, CPAs
Las Vegas, Nevada
January 25, 2012
50 S. Jones Blvd. Suite 202 Las Vegas, NV 89107 Phone: (888)727-8251 Fax: (888)782-2351
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
The Accompanying Notes are an integral part of these Financial Statements
ENTEST BIOMEDICAL, INC.
Consolidated Balance Sheet
As of As of
August 31, August 31,
2012 2011
ASSETS
Current Assets
Cash $ 42,737 $ 43,901
Trade accounts receivable, less allowance for uncollectable accounts
of $0 and $0 at February 29, 2012 and August 31, 2011 respectively 2,268 3,135
Inventory 10,298 7,986
Due from Affiliate 39,140 0
Current Portion of Prepaid Expenses 13,000 62,200
Employee Receivable 4,349 4,349
Total Current Assets 111,792 121,571
Property & Equipment (Net of Accumulated Depreciation) 8,832 17,293
Goodwill 405,000 405,000
Intangible Assets (Net of Accumulated Amortization) 1,052 1,828
Non Current Portion of Prepaid Expenses 10,300
Deposits 1,151 0
TOTAL ASSETS $ 527,827 $ 555,992
LIABILITES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 74,574 $ 27,564
Notes Payable 225,362 159,911
Convertible notes payable, net of discount 121,495 42,430
Due to Other 8,000 8,000
Accrued Expenses 119,726 67,206
Total Current Liabilities 549,157 305,111
Notes Payable 36,469 79,143
TOTAL LIABILITIES 585,626 384,254
STOCKHOLDERS' EQUITY
Common Stock, $0.001 par value, authorized 1,000,000,000 shares;
issued and outstanding 223,492,927 shares
as of August 31, 2012 and August 31, 2011 respectively 223,493 20,838
Preferred Stock , $0.001 par value 5,000,000 shares authorized,
0 shares issued and outstanding as of August 31,2012 and August 31, 2011 0
Series AA Preferred Stock, $0.001 par value 100,000 shares authorized,
5,000 shares issued and outstanding at August 31, 2012 and
as of August 31, 2011 5 5
Series B Preferred
$0.001 par value, 4,400,000 shares authorized, 3,201,397 and 0
issued and outstanding as of August 31, 2012 and August 31, 2011 3,201 0
NonVoting Convertible Preferred
$1 par value, 200,000 shares authorized, 75,000 and 0
issued and outstanding as of August 31, 2012 and August 31, 2011 75,000 0
Additional Paid in Capital 3,030,642 1,619,330
Contributed Capital 274,162 274,162
Accumulated Deficit (3,664,302) (1,742,597)
Total Stockholders' Equity (57,799) 171,738
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY
$ 527,827 $ 555,992
The Accompanying Notes are an integral part of these Financial Statements
ENTEST BIOMEDICAL INC.
Consolidated Statement of Operations
For the For the
Year Ended Year Ended
August 31 August 31
2012 2011
REVENUES
Revenues from Veterinary Services $ 419,336 $ 349,141
Online Revenues 6,916
TOTAL REVENUE 426,252 349,141
Cost of Revenue 119,299 89,405
GROSS PROFIT 306,953 259,736
COSTS AND EXPENSES
Research and Development 5,798 109,063
Rent Costs 126,812 108,596
General and Administrative 562,424 793,609
Incorporation Costs
Consultant's Expenses 428,040 159,518
Miscellaneous Expenses
Total Costs and Expenses 1,123,074 1,170,786
OPERATING LOSS (816,121) (911,050)
OTHER INCOME AND EXPENSE
Other Income 94,949 99
Loss on Early Extinguishment of Debt (18,647)
Income generated from revenue 187,699
Share Agreement
Expenses incurred from Revenue
Share Agreement (145,362)
Loss on Impairment of intangible assets (683,333)
Interest Expense (29,400) (24,404)
Interest Expense attributable to
amortization of discount (380,480) (16,428)
Expense attributable to issuance
of shares pursuant to contractual obligation (23,868)
Expense attributable to issuance of
Non Voting Convertible Preferred
Shares in connection with Stock
Purchase Agreement (75,000)
TOTAL OTHER INCOME AND EXPENSE (1,073,442) (40,733)
LOSS BEFORE INCOME TAXES (1,889,563) (951,783)
Income Taxes 0 0
NET LOSS (1,889,563) (951,783)
Beneficial conversion feature
attributable to issuance of NonVoting
Preferred Stock (32,142)
NET LOSS available to
common shareholders (1,921,705) (951,783)
BASIC AND DILUTED
LOSS PER SHARE $ (0.02) $ (0.05)
WEIGHTED AVERAGE 94,990,042 19,895,368
NUMBER OF COMMON
SHARES OUTSTANDING
The Accompanying Notes are an integral part of these Financial Statements
Entest BioMedical, Inc.
Consolidated Statement of Stockholders' Equity
For the Fiscal Years Ended August 31, 2011 and August 31, 2012
Non Voting Accumulated
Convertible Deficit
Series AA Series B Preferred Additional Contrib- during the
Common Preferred Preferred Paid-in uted Development
Shares Amount Shares Amount Shares Amount Shares Amount Capital Capital Stage Total
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
Common Shares issued for services 3,272,000 3,269 168,481 171,750
Common Shares issued for intangible assets 2,500,000 2,500 697,500 700,000
Discount on Convertible Note Recognized 350,915 350,915
Common Shares issued for debt 113,695,700 113,695 261,264 374,959
Cancellation of Common Shares Issued (90,000) (83) (86,687) (86,687)
Restricted Stock Award to employees 77,000,000 77,000 (77,000) 0
Restricted Stock Award to consultant 15,000,000 15,000 (15,000) 0
Restricted Stock Award compensation
Expense Recognized 58,491 58,491
Series B Preferred Dividend paid 3,201,39 3,201 (3,201) 0
Issuance of Non Voting Convertible
Preferred Shares 75,000 75,000 75,000
Recognition of Beneficial Conversion Feature 32,142 32,142
Non Voting Convertible Preferred Shares
Shares issued pursuant to Contractual Obligations 6,274,726 6,274 17,594 23,868
Cancellation of Restricted Stock Award to Employee (15,000,000) (15,000) 6,813 (8,187)
Net Loss Year ended August 31, 2012 (1,889,563) (1,890,259)
Beneficial Conversion Feature Deemed Dividend (32,142) (32,142)
Balance August 31, 2012 223,492,927 223,493 5,000 5 3,201,39 3,201 75,000 75,000 3,030,642 274,162 (3,664,302) (57,799)
The Accompanying Notes are an integral part of these Financial Statements
ENTEST BIOMEDICAL, INC.
Consolidated Statement of Cash Flows
For the For the
Year ended Year ended
August 31 August 31
2012 2011
OPERATING ACTIVITIES
Net (loss) $ (1,889,563) $ (951,783)
Adjustments to reconcile net loss to net cash used
by operating activities:
Depreciation Expense 8,461 5,591
Amortization Expense 776 505
Stock issued as Compensation to Employees 48,681 55,399
Stock issued as Compensation to Consultants 181,540 122,007
Change in operating assets and liabilities:
(Increase) Decrease in Trade Accounts Receivable 867 (3,135)
(Increase) Decrease in Inventory (2,312) (7,986)
(Increase) Decrease in Employee Receivable (2,953)
Increase (Decrease) in Accounts Payable 47,010 6,222
(Increase)Decrease in Due to Other
(Increase) Decrease in Prepaid Expenses 59,500 10,100
(Increase) Decrease in Due from Affiliate (39,140)
(Increase) Decrease in Deposits (1,151) 1,059
Increase(Decrease) in amortization of intangibles 16,667
Increase (Decrease) in Accrued Expenses 52,520 (60,889)
(Increase)Decrease on gain realized on cancellation
of stock (94,937)
Increase(Decrease) in Loss on Impairment
of Intangible Assets 683,333
Net Cash Provided Used in Operating Activities (927,748) (825,863)
INVESTING ACTIVITIES
Purchase/Sale of Equipment 0 (22,884)
Net cash Provided by (Used in) Investing Activities 0 (22,884)
FINANCING ACTIVITIES
(Increase) Decrease in Goodwill from acquisition (195,000)
Stock issued in Payment of Debt
Increase (Decrease) in Common stock issued for cash 217,600
(Increase) Decrease in Intangible Assets (net) (2,299)
Increase (Decrease) in Common stock issued
for expenses 104,768
Increase (Decrease) in Due to Affiliate 8,000
Increase (Decrease) in Due to Shareholder
Increase (Decrease) in Notes Payable 470,901 516,085
Increase (Decrease) in Contributed Capital 259,058
Increase (Decrease) in Additional paid in Capital 350,915 88,998
Net Cash Provided by Financing Activities 926,584 892,442
Net Increase in Cash (1,164) 43,695
Cash at Beginning of Period 43,901 206
Cash at End of Period $ 42,737 $ 43,901
Supplemental Disclosure of Noncash investing and financing activities:
12 Months ended August 31, 2012 12 Months ended August 31, 2011
Stock issued in payment of Debt $369,059 $391,167
Stock issued in Acquisition of McDonald Animal Hospital $210,000
Stock issued pursuant to Titterington Agreement $700,000
Entest BioMedical, Inc.
Notes to Consolidated Financial Statements
As of August 31, 2012
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. The Company recognizes revenue from services and product sales when the following four revenue
recognition criteria are met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the selling price is fixed or determinable, and collectability is reasonably
assured. Product sales and service revenues are recorded when the products are delivered and title passes to customers. The customer’s credit card is authorized and charged, or checks/cash are received at
the time the services are rendered, thereby providing reasonable assurance of collectability.
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. CASH EQUIVALENTS
The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.
E. PROPERTY AND EQUIPMENT
Property and equipment are recorded at cost. Maintenance and repairs are expensed in the year in which they are incurred. Property and equipment consist of Office Equipment, medical Equipment and
Computer Equipment. Expenditures that enhance the value of property and equipment are capitalized. All property and equipment is depreciated utilizing the Straight Line Method for a period of thirty
months , such period being estimated by the Company to represent the useful life of the assets. For the Fiscal Year ended August 31, 2012 the Company incurred depreciation expense of $8,461 and for the
Fiscal Year ended August 31, 2011 the Company incurred depreciation expense of $5,591. No depreciation has been recognized in connection with one piece of computer equipment which has yet to be put
into service.
F. 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, 2012 consisted of $261,831, of Notes Payable, $121,495 of Convertible Notes payable (net of discount), $8,000 due to TheraCyte, Inc, $4,349 of
Employee Receivables and $39,140 due from an affiliate. The fair value of all of the Company’s financial instruments as of September 30, 2012 were valued according to the Level 3 input. The carrying
amount of the financial instruments is equal to the fair value as determined by the Company.
The Company has determined that there are no Level 1 or Level 2 inputs for determining the fair value of the Company’s financial instruments. Fair value was determined by the Company utilizing its own
assumptions and estimation. There were no transfers between levels for the period presented.
G. 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.
Property Plant and Equipment
Acquisition Cost Estimated useful Life (Months) Total
Office Equipment 30 3,235
Medical Equipment 30 17,523
Computer Equipment 30 2,126
Subtotal 22,884
Less Accumulated Depreciation (14,052)
Total 8,832
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.
H. 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. All
convertible debt has an anti-dilutive effect on the EPS , therefore Diluted earnings per share are the same as basic earnings per share.
NOTE 3. RECENT ACCOUNTING PRONOUNCEMENTS
On May 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2011-04, "Amendments to Achieve Common Fair Value Measurement and Disclosure
Requirements in U.S. GAAP and IFRSs." The amendments in this update generally represent clarifications of Topic 820, but also include some instances where a particular principle or requirement for
measuring fair value or disclosing information about fair value measurements has changed. This update results in common principles and requirements for measuring fair value and for disclosing
information about fair value measurements in accordance with U.S. GAAP and IFRS. The amendments in this update are to be applied prospectively. The amendments are effective for interim and annual
periods beginning after December 15, 2011. Early application is not permitted. The Company does not expect this guidance to have a significant impact on its consolidated financial position, results of
operations or cash flows.
In June 2011, the FASB issued ASU No. 2011-05, "Presentation of Comprehensive Income." This update was amended in December 2011 by ASU No. 2011-12, "Deferral of the Effective Date for
Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05." This update defers only those changes in
update 2011-05 that relate to the presentation of reclassification adjustments. All other requirements in update 2011-05 are not affected by this update, including the requirement to report comprehensive
income either in a single continuous financial statement or in two separate but consecutive financial statements. ASU No. 2011-05 and 2011-12 are effective for fiscal years (including interim periods)
beginning after December 15, 2011. The Company does not expect this guidance to have a significant impact on its consolidated financial position, results of operations or cash flows.
In December 2011, the FASB issued ASU No. 2011-11, "Disclosures about Offsetting Assets and Liabilities." The amendments in this update require enhanced disclosures around financial instruments and
derivative instruments that are either (1) offset in accordance with either ASC 210-20-45 or ASC 815-10-45 or (2) subject to an enforceable master netting arrangement or similar agreement, irrespective of
whether they are offset in accordance with either ASC 210-20-45 or ASC 815-10-45. An entity should provide the disclosures required by those amendments retrospectively for all comparative periods
presented. The amendments are effective during interim and annual periods beginning on or after January 1, 2013. The Company does not expect this guidance to have any impact on its consolidated
financial position, results of operations or cash flows.
A variety of proposed or otherwise potential accounting standards are currently under study by standard setting organizations and various regulatory agencies. Due to the tentative and preliminary nature of
those proposed standards, the Company’s management has not determined whether implementation of such standards would be material to its financial statements.
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 $3,664,302 during the period from August
22, 2008 (inception) through August 31, 2012. 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 primarily by offering securities for cash. Management has raised $197,500 net of legal expenses in the twelve months ended August 31, 2012 through the
issuance of convertible notes. The Company has also raised $261,475 from other borrowings during the twelve month ended August 31, 2012.
On June 1, 2012 the Company entered into an Equity Purchase Agreement (the "June Purchase Agreement") with Southridge Partners II, LP, a Delaware limited partnership ("Southridge").
Under the terms of the June Purchase Agreement, Southridge will purchase, at the Company's election, up to $10,000,000 of the Company's registered common stock (the "Shares"). During the term of the
Purchase Agreement, the Company may at any time deliver a "put notice" to Southridge thereby requiring Southridge to purchase a certain dollar amount of the Shares. Simultaneous with the delivery of
such Shares, Southridge shall deliver payment for the Shares. Subject to certain restrictions, the purchase price for the Shares shall be equal to 91% of the average of the two lowest Closing Prices during
the Valuation Period as such capitalized terms are defined in the Agreement.
The number of Shares sold to Southridge shall not exceed the number of such shares that, when aggregated with all other shares of common stock of the Company then beneficially owned by Southridge,
would result in Southridge owning more than 9.99% of all of the Company's common stock then outstanding. Additionally, Southridge may not execute any short sales of the Company's common stock.
Any sale of Shares pursuant to the June Agreement is subject to a Registration Statement filed under the Securities Act of 1933 remaining effective for the sale by Southridge of those Shares.
June Agreement shall terminate (i) on the date on which Southridge shall have purchased Shares pursuant to this Agreement for an aggregate Purchase Price of $10,000,000, or (ii) on the date occurring 24
months from the date on which the June Agreement was executed and delivered by the Company and Southridge.
The Company has also agreed to pay the following to Capital Path Securities LLC for acting as the Company’s exclusive advisor and placement agent in connection with the June Purchase Agreement a
cash placement fee of 5% of funds received by the Company through the sale of Shares to Southridge as such funds are received by the Company.
On June 12, 2012 a registration statement on form S-1 was filed with the United States Securities and Exchange Commission registering 46,238,705 shares of the Company’s common stock that will be
put to Southridge pursuant to the June Agreement which was declared effective by the United States Securities and Exchange Commission on August 27, 2012.
There is no guarantee that the Company will be able to raise additional capital through offerings.
NOTE 5. NOTES PAYABLE
As of August 31, 2012
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. The Sherman Family Trust has provided a line of credit to the Company in the amount of $____ 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 this line of credit bears simple interest at the rate of ten percent per annum. Interest is calculated
Current :
Bio Technology Partners Business Trust 13500
Venture Bridge Advisors, Inc. 32508
Southridge Partners II LLP 40000
Sherman Family Trust 79000
Officer Loans (Note 6) 30,180
Current portion of amounts to be paid on
behalf of Gregory McDonald and Pet Pointers, Inc. (Note 10 ) 30174
8% Convertible Notes (Note14 ) 105,500
10% Convertible Note (Note 14) 59000
Total: 389862
Long Term:
Long Term portion of amounts to be paid on
behalf of Gregory McDonald and
Pet Pointers, Inc. (Note 10 ) 36469
Total: 36469
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. $40,000 loaned to the Company by Southridge Partners II LLP bears no stated interest rate and is payable at the demand of Southridge Partners II LLP.
NOTE 6. RELATED PARTY TRANSACTIONS
During the quarter ended November 30, 2011 David Koos made loans to the Company totaling $8,400. These loans are due and payable at the demand of David Koos and bear simple interest at a rate of
15% per annum.
During the quarter ended February 29, 2012 David Koos made loans to the Company totaling $7,550. These loans are due and payable at the demand of David Koos and bear simple interest at a rate of
15% per annum.
During the quarter ended February 29, 2012 David Koos granted to the Sherman Family Trust, an irrevocable trust for the benefit of Blossom Sherman, all rights to and interest in $25,956 in unpaid
indebtedness owed by the Company (bearing simple interest at a rate of 15% per annum and due and payable at the demand of the holder) as well as $3,051 in unpaid interest owed by the Company.
During the quarter ended May 31, 2012 David Koos made loans to the Company in the amount of $13,625. These loans are due and payable at the demand of David Koos and bear simple interest at a rate
of 15% per annum
As of August 31, 2012 the Company remains indebted to David R. Koos in the principal amount of $30,180 due and payable at the demand of David Koos and bearing simple interest at a rate of 15% per
annum
As of August 31 , 2012 Bio-Matrix Scientific Group, Inc. (“BMSN”) , a major shareholder of the Company, is indebted to the Company in the amount of $39,140. This amount is non interest bearing and is
due at the demand of the Company.
NOTE 7. INCOME TAXES
As of August 31 ,2012 the Company has a Deferred Tax Asset of $1,250,503 completely attributable to net operating loss carry forwards of approximately $3,677,949 (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) $ 3,664,302 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-.
Income tax is calculated at the 34% Federal Corporate Rate.
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”)
NOTE 10. COMMITMENTS AND CONTINGECIES
On November 1, 2011, the Company entered into an agreement to lease approximately 2,320 square feet of office space beginning December 1, 2011 for a period of five years.
Rent to be charged to the Company pursuant to the lease is as follows:
$2,996 per month for the period beginning December 1, 2011 and ending November 30, 2012
$3,116 per month for the period beginning December 1, 2012 and ending November 30, 2013
$3,241 per month for the period beginning December 1, 2013 and ending November 30, 2014
$3,371 per month for the period beginning December 1, 2014 and ending November 30, 2015
$3,506 per month for the period beginning December 1, 2015 and ending November 30, 2016
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 and Pet Pointers, Inc., the Company pays on behalf of Gregory McDonald and Pet Pointers monthly
rent of $7,526 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
As of August 31, 2012
Deferred tax assets:
Net operating tax carry forwards $ 1,250,503
Other
-0-
Gross deferred tax assets 1,250,503
Valuation allowance
(1,250,503)
Net deferred tax assets $ -0-
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. 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.
On May 24, 2012, a Complaint (“Complaint”) was filed in the U.S. Bankruptcy Court for the District of Oregon against the Company by Titterington Veterinary Services Inc. (“TVS”). The Complaint is an
adversary proceeding filed by TVS arising from TVS’s bankruptcy case currently pending in U.S. Bankruptcy Court for the District of Oregon. The Complaint alleges Breach of Contract resulting from the
Company’s alleged failure to pay certain expenses the Company was required to pay pursuant to an agreement with TVS, Dr. Ronald Titterington, DVM and Dr. Kathy Snell, DVM (“TVS Agreement”).
TVS is seeking a judgment and money award against the Company in an amount to be proven at trial which TVS estimates in the Complaint to be up to $50,000. TVS is also seeking a judgment and order
against the Company to provide an accounting of all revenues received by the Company pursuant to the TVS Agreement, all expenses paid, unpaid, and due and owing pursuant to the TVS Agreement as
well as a revenue share which TVS claims is due them pursuant to the TVS Agreement. TVS is also seeking a judgment requiring the Company to turn over a sum of money equal to expenses the Company
was obligated to pay pursuant to the TVS Agreement. TVS is also seeking attorney’s fees and expenses. 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 and an outcome unfavorable to the Company may have a material adverse effect
on the Company. On September 19, 2012 the Plaintiff’s Claim for Relief for turnover and an accounting under 11 U.S.C. § 542 and the Plaintiff's Claim for Relief for attorney fees were dismissed with
prejudice and , as per the claim of breach of contract, the proceeding was transferred to the United States Bankruptcy Court for the District of Southern California for all further proceedings.
On October 10, 2012 a Complaint(“Complaint”) was filed in the Superior Court of the State of California against the Company and David Koos by Dr. Gregory McDonald, a former employee of the
Company, alleging breach of contract and breach of the covenant of good faith and dealing in connection with the assumption of lease obligations by the Company in connection with the acquisition of the
assets of Pet Pointers, Inc (“Acquisition”) (Note 9) breach of contract and breach of the covenant of good faith and dealing in connection with an employment agreement enters into with Dr. McDonald inc
connection with the Acquisition, breach of contract in connection with the Acquisition purchase agreement, breach of the covenant of good faith and dealing in connection with the Acquisition purchase
agreement, implied indemnity in connection to amounts owed by Dr. McDonald to Anthony and Judi Marinelli, the Internal Revenue Service, and the California Franchise Tax Board, intentional
misrepresentation, negligent misrepresentation , failure to pay wages and violations of Sections 2802, 203, and 2806 of the California Labor Code. The Complaint seeks judgment for nominal damages,
actual damages, compensatory damages, lost wages, compensation, expenses wage benefits and penalties pursuant to California Labor Code Sections 203 et al, 2802 and 2806, indemnification, accrued
interest, punitive damages, costs of suit and attorney’s fees.
There were no other legal proceedings against the Company with respect to matters arising in the ordinary course of business. The Company is not involved in any other litigation either as plaintiffs or
defendants, and has no knowledge of any threatened or pending litigation against the Company.
On June 1, 2012 the Company entered into an Equity Purchase Agreement (the "June Purchase Agreement") with Southridge Partners II, LP, a Delaware limited partnership ("Southridge").
Under the terms of the June Purchase Agreement, Southridge will purchase, at the Company's election, up to $10,000,000 of the Company's registered common stock (the "Shares"). During the term of the
Purchase Agreement, the Company may at any time deliver a "put notice" to Southridge thereby requiring Southridge to purchase a certain dollar amount of the Shares. Simultaneous with the delivery of
such Shares, Southridge shall deliver payment for the Shares. Subject to certain restrictions, the purchase price for the Shares shall be equal to 91% of the average of the two lowest Closing Prices during
the Valuation Period as such capitalized terms are defined in the Agreement.
The number of Shares sold to Southridge shall not exceed the number of such shares that, when aggregated with all other shares of common stock of the Company then beneficially owned by Southridge,
would result in Southridge owning more than 9.99% of all of the Company's common stock then outstanding. Additionally, Southridge may not execute any short sales of the Company's common stock.
Any sale of Shares pursuant to the June Agreement is subject to a Registration Statement filed under the Securities Act of 1933 remaining effective for the sale by Southridge of those Shares.
June Agreement shall terminate (i) on the date on which Southridge shall have purchased Shares pursuant to this Agreement for an aggregate Purchase Price of $10,000,000, or (ii) on the date occurring 24
months from the date on which the June Agreement was executed and delivered by the Company and Southridge.
The Company has also agreed to pay the following to Capital Path Securities LLC for acting as the Company’s exclusive advisor and placement agent in connection with the June Purchase Agreement a
cash placement fee of 5% of funds received by the Company through the sale of Shares to Southridge as such funds are received by the Company.
NOTE 11. NON VOTING CONVERTIBLE PREFERRED STOCK
On March 27, 2012 the company issued to Southridge 75,000 shares of its nonvoting convertible preferred stock to Southridge in accordance with the terms of an Equity Purchase Agreement entered into
by and between the Company and Southridge which was terminated at the Company’s option on June 1, 2012 (“February Purchase Agreement”).
Non Voting Convertible Preferred Stock is convertible at the option of the holder into shares of the Company’s common stock at a conversion price equal to seventy percent (70%) of the lowest Closing
Price for the five (5) trading days immediately preceding written receipt by the Company of the holder’s intent to convert.
“CLOSING PRICE" shall mean the closing bid price for the Company’s common stock on the Principal Market on a Trading Day as reported by Bloomberg Finance L.P.
“PRINCIPAL MARKET" shall mean the principal trading exchange or market for the Company’s common stock.
“TRADING DAY” shall mean a day on which the Principal Market shall be open for business.
The issuance of 75,000 shares of the Company’s nonvoting convertible preferred stock to Southridge resulted in recognition of a beneficial conversion feature in the amount of $32,142.Accordingly, the
Company recorded a deemed dividend on the 75,000 shares of the Company’s nonvoting convertible preferred stock of $32,142.
NOTE 12. DIVIDEND OF SERIES B PREFERRED SHARES
On March 6, 2012 a dividend of 3, 201,397 shares of Series B Preferred Stock was paid to the Company’s common shareholders of record as of February 21, 2012.
NOTE 13. STOCKHOLDERS EQUITY
The stockholders' equity section of the Company contains the following classes of capital stock as of August 31, 2012:
Common Stock:
$0.001 par value, 1,000,000,000 shares authorized 222,791,778 shares issued and outstanding as of August 31, 2012.
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 February 29,
2012 and 4,400,000 is authorized as Series B Preferred Stock of which 3, 201,397 shares are issued and outstanding as of August 31, 2012.
Upon any liquidation, dissolution, or winding up of the Company, whether voluntary or involuntary (collectively, a “Liquidation”), before any distribution or payment shall be made to any of the holders of
Common Stock or any other series of preferred stock, the holders of Series B Preferred Stock shall be entitled to receive out of the assets of the Company, whether such assets are capital, surplus or
earnings, an amount equal to $0.10 per share of Series B Preferred Stock (the “Liquidation Amount”) plus all declared and unpaid dividends thereon, for each share of Series B Preferred Stock held by
them.
If, upon any Liquidation, the assets of the Company shall be insufficient to pay the Liquidation Amount, together with declared and unpaid dividends thereon, in full to all holders of Series B Preferred
Stock, then the entire net assets of the Company shall be distributed among the holders of the Series B Preferred Stock, ratably in proportion to the full amounts to which they would otherwise be
respectively entitled and such distributions may be made in cash or in property taken at its fair value (as determined in good faith by the Board), or both, at the election of the Board..
Non Voting Convertible Preferred Stock having a $1.00 par value:
200,000 shares authorized of which 75, 000 shares are issued and outstanding as of August 31, 2102.
Non Voting Convertible Preferred Stock shall convert at the option of the holder into shares of the corporation’s common stock at a conversion price equal to seventy percent (70%) of the lowest Closing
Price for the five (5) trading days immediately preceding written receipt by the corporation of the holder’s intent to convert.
“CLOSING PRICE" shall mean the closing bid price for the corporation’s common stock on the Principal Market on a Trading Day as reported by Bloomberg Finance L.P.
“PRINCIPAL MARKET" shall mean the principal trading exchange or market for the corporation’s common stock.
“TRADING DAY” shall mean a day on which the Principal Market shall be open for business.
NOTE 14. CONVERTIBLE DEBENTURES
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 has been
amortized under the Interest Method. $42,500 of the principal amount due and $1700 in accrued interest has been converted into 1,012,425 shares of the common stock of the Company.
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. $37,500 of the principal amount due and $1500 in accrued interest has been converted into 6,193,242 shares of the common stock of the
Company.
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. . $35,000 of the principal amount due and $1400 in accrued interest has been converted into 21,708,333 shares of the common stock of the
Company.
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. The issuance of the note amounted in a beneficial conversion feature of $7,634 which is amortized under the Interest Method.
$32,500 of the principal amount due and $1300 in accrued interest has been converted into 24,635,165 shares of the common stock of the Company.
On December 19, 2011, the Company issued a convertible promissory note in the amount of $37,500. The note bears an interest rate of eight percent (8%), matures on September 21, 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. The issuance of the note amounted in a beneficial conversion feature of $37,500 which is amortized under the Interest
Method. The principal balance and $1,500 in accrued interest was satisfied by a payment of $57,647.
On December 20, 2011 the Company amended the terms of $30,000 in existing debt as follows:
(a) Due and payable December 31, 2012
(b) Simple interest of 10% from December 20, 2011 to the date the debt is fully converted or paid in full
(c) Convertible into the common stock of the Company at the option of the holder at a 50% discount from the average of the lowest three Trading Prices for the common stock during the 10
trading day period ending one Trading Day prior to the date the conversion notice is sent by the holder. "Trading Price" means the closing bid price on the applicable trading market as
reported by a reliable reporting service.
The amendment of the note amounted in a beneficial conversion feature of $16,153 which was fully amortized by February 29, 2012. The entire principal balance of the convertible note was converted into
1,249,975 shares of the common stock of the Company prior to February 29, 2012.
On February 28, 2012 the Company amended the terms of $85,500 in existing principal indebtedness as well as 3,710 of interest accrued but unpaid to be as follows:
The aggregate indebtedness of $89,210 shall bear simple interest, be payable upon demand of the holder, and be convertible into the common shares of the company at a conversion price per share equal to
60% (the “Discount”) of the lowest closing bid price for the Company’s common stock during the 5 trading days immediately preceding a conversion date, as reported by Bloomberg. provided that if the
closing bid price for the common stock on the date in which the conversion shares are deposited into Holder’s brokerage account and confirmation has been received that Holder may execute trades of the
conversion shares ( Clearing Date) is lower than the Closing Bid Price, then the purchase price for the conversion shares shall be adjusted such that the Discount shall be taken from the closing bid price on
the Clearing Date, and the Company shall issue additional shares to Purchaser to reflect such adjusted Purchase Price (“Bonus Shares”). The company has agreed on a limitation on conversion equal to
9.99% of the Company’s outstanding common stock. The amendment of the note amounted in a beneficial conversion feature of $59,473 which was fully amortized by February 29, 2012. This aggregate
indebtedness was converted into 21,307,702 of the company’s common shares.
On April 16, 2012 the Company issued a convertible promissory note in the amount of $42,500 which was received April 21, 2012. The note bears an interest rate of eight percent (8%), matures on January
18, 2013. 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. The issuance of the note amounted in a beneficial conversion feature of $11,805 which is amortized
under the Interest Method.
On June 15, 2012 the Company amended the terms of $102,349 in existing principal indebtedness as follows:
The Aggregate Indebtedness of $102,349 is convertible at Holder’s option at a conversion price per share equal to 60% (the “Discount”) of the lowest closing bid price for the Company’s common stock
during the 5 trading days immediately preceding a conversion date, as reported by Bloomberg (the “Closing Bid Price”); provided that if the closing bid price for the common stock on the date in which the
conversion shares are deposited into Holder’s brokerage account and confirmation has been received that Holder may execute trades of the conversion shares ( Clearing Date) is lower than the Closing Bid
Price, then the purchase price for the conversion shares shall be adjusted such that the Discount shall be taken from the closing bid price on the Clearing Date, and the Company shall issue additional shares
to Purchaser to reflect such adjusted Purchase Price (“Bonus Shares”). The company has agreed on a limitation on conversion equal to 9.99% of the Company’s outstanding common stock. The issuance of
the note amounted in a beneficial conversion feature of $102,349 which is immediately amortized . This aggregate indebtedness was converted by the Holders into 36,838,692 shares of the Company’s
common stock.
On July 26, 2012, the Company issued a convertible note in the principal amount of $63,000 to Asher Enterprises, Inc. The Note bears interest at the rate of 8% per annum and matures on April 30, 2013.
The Note is convertible any time during the period beginning on the date which is one hundred eighty (180) days following the date of the Note into common stock of the Company, at Asher’s option, at a
39% discount to the average of the three lowest closing bid prices of the common stock during the 10 Trading Day period prior to conversion as Trading Day is defined in the Note. The issuance of the note
amounted in a beneficial conversion feature of $63,000 which is amortized under the Interest Method.
On August 21, 2012 the Company amended the terms of $59,000 in existing principal indebtedness as follows:
The Aggregate Indebtedness of $59,000 is convertible at Holder’s option at a conversion price per share equal to 60% (the “Discount”) of the lowest closing bid price for the Company’s common stock
during the 10 trading days immediately preceding a conversion date, as reported by Bloomberg (the “Closing Bid Price”); provided that if the closing bid price for the common stock on the date in which
the conversion shares are deposited into Holder’s brokerage account and confirmation has been received that Holder may execute trades of the conversion shares ( Clearing Date) is lower than the Closing
Bid Price, then the purchase price for the conversion shares shall be adjusted such that the Discount shall be taken from the closing bid price on the Clearing Date, and the Company shall issue additional
shares to Purchaser to reflect such adjusted Purchase Price (“Bonus Shares”). The company has agreed on a limitation on conversion equal to 9.99% of the Company’s outstanding common stock. The
issuance of the note amounted in a beneficial conversion feature of $53,000 which was immediately amortized .
NOTE 16. STOCK TRANSACTIONS
During the twelve months ended August 31, 2012 the Company issued 113,695,700 Common Shares in satisfaction of $374,959 in debt and accrued interest.
During the twelve months ended August 31, 2012 the Company issued 3,272,000 Common Shares for services rendered valued at $171,750.
During the twelve months ended August 31, 2012 the Company issued 2,500,000 Common shares for acquisition of intangible assets valued at $700,000.
During the twelve months ended August 31, 2012 the Company issued 6,274,726 Common Shares valued at $23,868 pursuant to contractual obligations contained in certain convertible notes outstanding.
During the twelve months ended August 31, 2012 the Company issued 75,000 shares of its Non Voting Convertible Preferred Stock for services rendered valued at $75,000.
On December 26, 2011 an employee of the Company consented to the cancellation of 15,000 common shares previously issued as compensation.
On December 29, 2011 75,000 common shares previously issued to the company’s former Chief Financial Officer were returned for cancellation by the Company. Of that amount 40,000 were subject to
forfeiture and are cancelled pursuant to those forfeiture provisions at the company’s option and the company’s former Chief Financial Officer has consented to cancellation of the remaining 35,000 common
shares.
During the Quarter ended May 31, 2012 a dividend of 3, 201,397 shares of Series B Preferred Stock was paid to the Company’s common shareholders of record as of February 21, 2012.
On April 3, 2012 the Company issued 50,000,000 shares of common stock to David R. Koos, the Company’s Chief Executive Officer, as a restricted stock award (“Bonus Shares”).David Koos may not
offer to sell, sell, transfer, pledge or otherwise dispose of the Bonus Shares prior to April 2, 2017 (“Restricted Period”). In the event that, prior to the expiration of the Restricted Period, David Koos
voluntarily ceases to be employed at the Company or is terminated for cause the Shares shall be forfeited.
On April 3, 2012 the Company issued 27,000,000 shares of common stock to seven employees as a restricted stock award (“Bonus Shares”).No employee may offer to sell, sell, transfer, pledge or
otherwise dispose of the Bonus Shares prior to April 2, 2017 (“Restricted Period”).In the event that, prior to the expiration of the Restricted Period, any employee voluntarily ceases to be employed at the
Company or is terminated for cause his or her Shares shall be forfeited.
On April 3, 2012 the Company issued 15,000,000 shares of common stock to a consultant as a restricted stock award (“Bonus Shares”).The recipient may not offer to sell, sell, transfer, pledge or otherwise
dispose of the Shares prior to April 2, 2017 (“Restricted Period”). In the event that, prior to the expiration of the Restricted Period, the recipient declines to provide if requested to provide, or is unable to
provide if requested to provide, consulting services to the Company of a nature that have been customarily provided by the recipient to the Company the Shares shall be forfeited.
On August 2, 2012 an employee of the Company consented to the cancelation of 15,000,000 common shares issued to her as a Restricted Stock Award.
NOTE 17. SUBSEQUENT EVENTS
Between September 4, 2012 and September 17, 2012 the Company sold 26,802,465 common shares to Southridge for the gross amount of $50,000 pursuant to the June Purchase Agreement.
On September 21 , 2012 the Company paid $20,000 of indebtedness due to Southridge.
On September 20, 2012 the Company issued a convertible promissory note in the amount of $63,000 cash from which was received September 27, 2012. The note bears an interest rate of eight percent
(8%), matures on June 25, 2013. 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 thirty nine percent (39%)
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.
On October 2 , 2012 the Company sold 10,837,849 common shares to Southridge for the gross amount of $14,300 pursuant to the June Purchase Agreement. Total gross proceeds of $14,300 were utilized
to pay $14,300 of debt due to Southridge by the Company.
On October 17, 2012 the Company issued 23,000,000 common shares in satisfaction of $19,320 of outstanding convertible indebtedness.
On October 17, 2012 the Company amended its certificate of incorporation in order to authorize 2,000,000,000 shares of Common Stock
On October 22, 2012 the Company issued 10,810,811 common shares in satisfaction of $8,000 of outstanding convertible indebtedness.
On November 28, 2012 the “Company executed an agreement (“Agreement”) with Gregory McDonald ("McDonald"), Pet Pointers, Inc. ("Pet Pointer") whereby Mc Donald and Pet Pointer would acquire
from the Company all assets ( with the exception of cash and accounts receivable) utilized by the Company in the operation of the McDonald Animal Hospital, a full service veterinary clinic owned and
operated by the Company and located in Santa Barbara, California (“McDonald Asset Sale”).
On October 10, 2012 a Complaint (“Complaint”) was filed in the Superior Court of the State of California against the Company and David Koos by McDonald, a former employee of the Company, alleging
breach of contract and breach of the covenant of good faith and dealing in connection with the assumption of lease obligations by the Company in connection with the acquisition of the assets of Pet
Pointers, Inc breach of contract and breach of the covenant of good faith and dealing in connection with an employment agreement enters into with McDonald inc connection with the Acquisition, breach of
contract in connection with the Acquisition purchase agreement, breach of the covenant of good faith and dealing in connection with the Acquisition purchase agreement, implied indemnity in connection to
amounts owed by McDonald to Anthony and Judi Marinelli, the Internal Revenue Service, and the California Franchise Tax Board, intentional misrepresentation, negligent misrepresentation , failure to pay
wages and violations of Sections 2802, 203, and 2806 of the California Labor Code. The Complaint sought judgment for nominal damages, actual damages, compensatory damages, lost wages,
compensation, expenses wage benefits and penalties pursuant to California Labor Code Sections 203 et al, 2802 and 2806, indemnification, accrued interest, punitive damages, costs of suit and attorney’s
fees.
As consideration to the Company for the assets acquired, McDonald and Pet Pointers provided to the Company a General release whereby McDonald and Pet Pointer waive, release and discharge the
Company and their respective assignees, officers, directors, shareholders, boards, owners, employees, attorneys, agents, trustors, trustees, beneficiaries, heirs, successors, and representatives from all known
and unknown claims, demands, causes of action, attorney's fees, costs, or expenses including:
(1) All claims relating to the Complaint.
(2) Those owed by McDonald to Anthony and Judi Marinelli which the Company became obligated to pay on McDonald’s behalf pursuant to the asset purchase agreement entered into between the
Company and Gregory McDonald and Pet Pointers, Inc on January 4, 2011. The balance due on this obligation as of December 5, 2012 was $55,000.
(3) Those amounts owed by McDonald to the Internal Revenue Service which the Company became obligated to pay on McDonald’s behalf pursuant to the asset purchase agreement entered into between
the Company and Gregory McDonald and Pet Pointers, Inc on January 4, 2011. The balance due on this obligation as of December 5, 2012 was $6,369.69.
(4) Those amounts owed by McDonald to the California Franchise Tax Board which the Company became obligated to pay on McDonald’s behalf pursuant to the asset purchase agreement entered into
between the Company and Gregory McDonald and Pet Pointers, Inc on January 4, 2011. The balance due on this obligation as of December 5, 2012 was $3,474.
Assets disposed of pursuant to the Agreement include approximately $4,897 of Property Plant and Equipment net of accumulated depreciation as well as all inventory held at the McDonald Animal
Hospital.
Assets disposed of pursuant to the Agreement also include
(i) Essentially all intellectual property, including computer software, utilized in connection with the operation of the McDonald Animal Hospital.
(ii) All telephone numbers, fax numbers, service marks, trademarks, trade names, fictitious business names, websites, business email addresses, vendor lists, promotional materials, vendor records and any
and all business records including, but not limited to, such items stored in computer memories, microfiche, paper record or by any other means relevant to the operation of the McDonald Animal Hospital.
(iii) All customer lists, customer contacts, and any and all customer records that are related to the McDonald Animal Hospital.
As a result of the agreement, the Company anticipates recording a non-cash pre-tax charge for the impairment of goodwill recorded in connection with the acquisition of the McDonald Animal Hospital of
approximately $405,000 for the quarter ended November 30, 2012.
Pursuant to the Agreement, the Company is obligated to make payment of $13,000 within five days of the Closing of the Agreement as such term is defined in the Agreement.
Pursuant to the Agreement, the Company agrees to waive, release and discharge McDonald and Pet Pointer from all known and unknown claims, demands, causes of action, attorney's fees, costs, or
expenses.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
(a) On September 27, 2012 the Board of Directors of . (the “Registrant” or the “Company”) approved of the dismissal of John Kinross-Kennedy, CPA (“Kennedy”) as the Registrant’s independent
registered public accounting firm.
Kennedy’s report of the Company’s financial statements for the fiscal years ended August 31, 2011 and August 31, 2010 did not contain any adverse opinion or disclaimer of opinion, nor was modified as
to uncertainty, audit scope, or accounting principles. The audit reports prepared by Kennedy for the fiscal years ending August 31, 2011 and August 31, 2010 contained a paragraph with respect to the
Company's ability to continue as a going concern.
During the Registrant's two most recent fiscal years and the subsequent interim periods thereto there were no disagreements with Kennedy, 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 Kennedy’s satisfaction, would have caused it to make reference to the subject matter of the disagreement
in connection with its report on the Registrant's financial statements.
On September 27, 2012, the Board of Directors of the Registrant, acting as the Registrant's Audit Committee, approved the engagement of Anton and Chia, LLP as its independent auditor. On same date,
September 27, 2012, the accounting firm of Anton and Chia, LLP was engaged as the Registrant's new independent registered public accounting firm.
(b) On December 4, 2012 the Board of Directors of Entest BioMedical, Inc. (the “Registrant” or the “Company”) approved of the dismissal of Anton and Chia, LLP (“Anton”) as the Registrant’s
independent registered public accounting firm.
Since September 27, 2012 (the date on which Anton has been engaged as the Registrant’s independent registered public accounting firm) Anton has neither reviewed nor completed an audit of any of the
financial statements of the Registrant. Therefore, no reports of Anton on the Registrant’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. The Company disagreed with the conclusion arrived at by
Anton while performing audit procedures for the year ended August 31, 2012 that the Company had not appropriately accounted for the conversion features of convertible notes payable and that the
Company had not appropriately accounted for certain equity transactions. The accounting treatment for the conversion features of convertible notes payable was discussed by Anton and the sole Director
of the Company and the Company has authorized Anton to respond fully to the inquiries of the successor accountant concerning the subject matter of all disagreements.
On December 4, 2012, the Board of Directors of the Registrant, acting as the Registrant's Audit Committee, approved the engagement of Seale and Beers, Certified Public Accountants LLC (“S&B”) as its
independent auditor. On same date, December 4, 2012, the accounting firm of S&B was engaged as the Registrant's new independent registered public accounting firm.
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, 2012. 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, 2012 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:
* As of January 28,2012 Bio-Matrix Scientific Group Inc. owned 10,000,000 common shares of the company
** 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
* Includes $102,000 in salary earned by David Koos which was accrued but unpaid for the fiscal year ended August 31, 2011
***** On April 3, 2012 the Company issued 50,000,000 shares of common stock to David R. Koos as a restricted stock award (“Bonus Shares”).
David Koos may not offer to sell, sell, transfer, pledge or otherwise dispose of the Bonus Shares prior to April 2, 2017 (“Restricted Period”).
In the event that, prior to the expiration of the Restricted Period, David Koos voluntarily ceases to be employed at the Company or is terminated for cause the Shares shall be forfeited.
** represents 5,000 shares of the Company’s Series AA Preferred Stock
**** Includes 190,558 in salary earned by David Koos which was accrued but unpaid for the fiscal year ended August 31, 2011
***The Company and Ms. Reynolds had agreed that Ms. Reynolds shall receive:
Upon the expiration of one year from the date of the grant of the Compensation Shares, Transfer Restrictions shall no longer apply to 25% of the Restricted Comp Shares.
Position: Company Name: Employment Dates:
Chairman, President, CEO and Acting CFO Bio-Matrix Scientific Group, Inc.*
June 14, 2006 (Chairman) to Present
June 19, 2006 (President, CEO and Acting CFO)
June 19, 2006 (Secretary) to Present
Chairman, CEO, Secretary & Acting CFO Frezer Inc. May 2, 2005 to February 2007
Chairman, CEO & Acting CFO BMXP Holdings, Inc.
December 6, 2004 to June 2008
Managing Director & President Cell Source Research Inc. December 5, 2001 to Present
Managing Director & President Venture Bridge Inc. November 21, 2001 to Present
Chairman of the Board of Directors, CFO & Secretary Cell Bio-Systems Inc.
(New York)
July 17, 2003 to December 1, 2003
Registered Representative Amerivet Securities Inc.** March 31, 2004 to February 2008
Name and Principal Position Year
Salary
($)
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, 2011 to August 31, 2012 $120,000* 0 0 400,000***** 0 0 0 0 $520,000
David Koos
Chairman, President and CEO
From September 1, 2010 to August 31, 2011 $208,000**** 0 $2,000** 0 0 0 0 0 $210,558
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
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 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.
On December 29, 2011 75,000 common shares previously issued to Ms. Reynolds were returned for cancellation by the Company. Of that amount 40,000 were subject to forfeiture and were cancelled
pursuant to those forfeiture provisions at the company’s option and Ms. Reynolds has consented to cancellation of the remaining 35,000 common shares.
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 January 28, 2013 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
Based on 446,539,900 shares issued and outstanding as of August 9, 2012 (Except as otherwise indicated)
*Includes 10,000,000 common shares owned by Bio-Matrix Scientific Group, Inc. (David Koos is CEO, President and Chairman of Bio-Matrix Scientific Group, Inc.).
Based on 3,201,397 shares issued and outstanding as of January 28, 2012
*Includes 1,250,000 Series B Preferred shares owned by Bio-Matrix Scientific Group, Inc. (David Koos is CEO, President and Chairman of Bio-Matrix Scientific Group, Inc.).
Based on 5,000 shares issued and outstanding as of January 28 , 2012
Based on 75,000 shares issued and outstanding as of January 28, 2012
Item 13. Certain Relationships and Related Transactions, and Director Independence
During the quarter ended November 30, 2011 David Koos made loans to the Company totaling $8,400. These loans are due and payable at the demand of David Koos and bear simple interest at a rate of
15% per annum.
During the quarter ended February 29, 2012 David Koos made loans to the Company totaling $7,550. These loans are due and payable at the demand of David Koos and bear simple interest at a rate of
15% per annum.
Title of Class Name and Address of Beneficial Owner
Amount and Nature
of Beneficial Owner Percent of Class
Common David R. Koos*
C/o Entest Bio Medical Inc., Inc
4700 SPRING STREET, SUITE 203, LA MESA, CALIFORNIA, 91942
60,000,000 13.4%
Common All Officers and Directors As a Group 60,000,000 13.4%
Title of Class Name and Address of Beneficial Owner
Amount and Nature
of Beneficial Owner Percent of Class
Series B Preferred David R. Koos*
C/o Entest Bio Medical Inc., Inc
4700 SPRING STREET, SUITE 203, LA MESA, CALIFORNIA, 91942
1250000 39%
Series B Preferred National Financial Services, LLC
200 Liberty Street
New York NY 10281
201,585 6.2%
Series B Preferred Sleezer family Trust
c/o Charles Sleezer
12550 Carson Street
Hawaiian Gardens, CA
687,500 21.4%
Series B Preferred Ronald J. Titterington and Kathy Snell
3880 W 11th Street
Eugene Oregon
312,500 9.7%
Series B Preferred All Officers and Directors as a Group* 1250000 39%
Title of Class Name and Address of Beneficial Owner
Amount and Nature
of Beneficial Owner Percent of Class
Series AA Preferred Shares David R. Koos
C/o Entest Bio Medical Inc., Inc
4700 SPRING STREET, SUITE 203, LA MESA, CALIFORNIA, 91942
5,000 100%
Series AA Preferred Shares All Officers and Directors
As a Group
5,000 100%
Title of Class Name and Address of Beneficial Owner
Amount and Nature
of Beneficial
Owner
Percent of
Class
NonVoting Convertible Preferred
Shares
Southridge Partners II LLP(1)
90 Grove Street
Ridgefield CT
75,000 100%
All Officers and Directors
As a Group
(1) Stephen Hicks possesses voting power and investment power over 75,000 NonVoting Convertible Preferred Shares held by
Southridge.
0 0%
During the quarter ended February 29, 2012 David Koos granted to the Sherman Family Trust, an irrevocable trust for the benefit of Blossom Sherman, all rights to and interest in $25,956 in unpaid
indebtedness owed by the Company (bearing simple interest at a rate of 15% per annum and due and payable at the demand of the holder) as well as $3,051 in unpaid interest owed by the Company.
During the quarter ended May 31, 2012 David Koos made loans to the Company in the amount of $13,625. These loans are due and payable at the demand of David Koos and bear simple interest at a rate
of 15% per annum
As of August 31, 2012 the Company remains indebted to David R. Koos in the principal amount of $30,180 due and payable at the demand of David Koos and bearing simple interest at a rate of 15% per
annum
As of August 31 , 2012 Bio-Matrix Scientific Group, Inc. (“BMSN”) , a major shareholder of the Company, is indebted to the Company in the amount of $39,140. This amount is non interest bearing and is
due at the demand of the Company.
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
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.
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, 2010 and ending August 31, 2011:
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.
All Other Fees: Audit of the financial statements of Pet Pointers, Inc.
The following table sets forth the aggregate fees billed to us by John Kinross-Kennedy, CPA during the period beginning September 1, 2011 and ending August 31, 2012:
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 2012 these fees were primarily derived from review of financial statements in the Company's Form 10Q Reports.
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
Audit Fees $ 4,600
Audit Related Fees 400
Tax Fees 0
All Other Fees 2,800
$ 7,800
Audit Fees $ 4,000
Audit Related Fees 1,300
Tax Fees 0
$ 5,300
Exhibit No. Description
3(i)(a) Articles of Incorporation
3(ii)(b) Bylaws
10.1 ( c) Agreement by and Between David Koos and the Company
10.2 (Incorporated by Reference to Exhibit 10.2 of the Company’s Form S-1 filed June
12, 2012)
Terms of Employment Agreement by and between the Company and Tammy Reynolds
10.3 (d) August 2010 Agreement by and between the Company and TheraCyte, Inc.
10.3 (e) Asset Purchase Agreement by and between the Company, Dr. Gregory McDonald and Pet Pointers
10.4 (f) Exhibit A to Asset Purchase Agreement by and between the Company, Dr. Gregory McDonald and Pet Pointers
10.5 (g) Exhibit B to Asset Purchase Agreement by and between the Company, Dr. Gregory McDonald and Pet Pointers
10.6 (h) CRO Agreement by and between the Company and RenovoCyte LLC
3(i)(2)(i) Certificate of Designations Series AA Preferred Stock
10.7(j) 8% ASHER NOTE $42,500
10.8(k) 8% ASHER NOTE $37,500
10.9(l) 8% ASHER NOTE $35,000
10.10(m) 8% ASHER NOTE $32,500
3(i)(3) (n) Amendment to Certificate of Incorporation dated June 4, 2009
3(ii)(2) (o) Bylaws of Entest BioMedical, inc., a California corporation and wholly owned subsidiary of the Registrant
3(i)(4) (p)
Certificate of Incorporation of Entest BioMedical, inc., a California corporation and wholly owned subsidiary of
the Registrant
10.11(q) 8% ASHER NOTE $37,500
3(i)(5) ( r) Certificate of Designations Series B Preferred Stock
3(i) (6)(s) Amendment to Certificate of Incorporation
10.12 (t) Equity purchase Agreement, Southridge Feb 27, 2012
10.13(u) Registration Rights Agreement, Southridge
10.14(Incorporated by Reference to Exhibit 10.14 of the Company’s Form S-1 filed June
12, 2012)
Line of Credit Promissory Note December 1, 2010 Bio Technology Partners Business Trust
10.15(Incorporated by Reference to Exhibit 10.15 of the Company’s Form S-1 filed June
12, 2012)
Line of Credit Promissory Note December 1, 2010 Venture Bridge Advisors, Inc.
10.16(Incorporated by Reference to Exhibit 10.16 of the Company’s Form S-1 filed June
12, 2012)
Line of Credit Promissory Note December 1, 2010 Bombardier Pacific ventures
10.17(Incorporated by Reference to Exhibit 10.17 of the Company’s Form S-1 filed June
12, 2012)
Line of Credit Promissory Note December 1, 2010 David Koos
3(i)(7) (v) Amendment to Certificate of Incorporation
10.18(Incorporated by Reference to Exhibit 10.18 of the Company’s Form S-1 filed June
12, 2012)
Agreement amending terms of outstanding Debt by the Company
10.19(Incorporated by Reference to Exhibit 10.19 of the Company’s Form S-1 filed June
12, 2012)
Agreement amending terms of outstanding Debt by the Company
10.20(Incorporated by Reference to Exhibit 10.20 of the Company’s Form S-1 filed June
12, 2012)
Agreement amending terms of outstanding Debt by the Company
10.21(w) Form of Bonus Share Agreement
5.1 Opinion Regarding Legality
14 (y) Code of Ethics
10.24 (aaaa) Assignment dated June 15, 2009 by and between Entest BioMedical, Inc. and Bio-Matrix Scientific Group, Inc.
10.22 (z) Lease
3(i)(8) (aa) Text of Amendment to Certificate of Incorporation
10.23(aaa) 8% ASHER NOTE $42,500
10.24 (aaaa) Assignment dated June 15, 2009 by and between Entest BioMedical, Inc. and Bio-Matrix Scientific Group, Inc.
10.25(Incorporated by Reference to Exhibit 10.25 of the Company’s Form S-1 filed June
12, 2012)
Advisory Board Letter Agreement
10.26 (aaaaa) Equity Purchase Agreement Southridge June 1 2012
10.27(Incorporated by Reference to Exhibit 10.27 of the Company’s Form S-1 filed June
12, 2012)
Amendment to Registration Rights Agreement
10.28(Incorporated by Reference to Exhibit 10.28 of the Company’s Form S-1 filed June
12, 2012)
Termination Letter February 27 Equity Purchase Agreement
Exhibit No. Description
10.29(zzzzzzzz1) AGREEMENT AMENDING TERMS OF OUTSTANDING DEBT BY THE COMPANY
10.30(zzzzzzzz2) AGREEMENT AMENDING TERMS OF OUTSTANDING DEBT BY THE COMPANY
10.31(zzzzzzzz3) AGREEMENT AMENDING TERMS OF OUTSTANDING DEBT BY THE COMPANY
10.32(zzzzzzzz4) AGREEMENT AMENDING TERMS OF OUTSTANDING DEBT BY THE COMPANY
10.33(zzzzzzzz5) AGREEMENT AMENDING TERMS OF OUTSTANDING DEBT BY THE COMPANY
10.34(zzzzzzzz6) AGREEMENT AMENDING TERMS OF OUTSTANDING DEBT BY THE COMPANY
10.35 ( incorporated by Reference to Exhibit 10.35 of the company’s amended Form S-1
Filed August 17,2012)
ASHER NOTE $63,000
10.36( incorporated by Reference to Exhibit 10.36 of the company’s amended Form S-1
Filed August 17,2012)
TERMS OF COMPENSATION DAVID KOOS
10.38 (incorporated by reference to Exhibit 10.1 Of the Company’s 8-K filed December 12,
2012 )
Settlement Agreement with G. McDonald
3.i (8) (Incorporated by Reference to Exhibit 3 (i) of the Company’s 8-K filed October 19,
2012
10.39 Line of Credit Promissory Note Sherman family Trust
31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002
31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-
OXLEY ACT OF 2002
32.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350 AS
ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
32.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350 AS
ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
(a) Incorporated by Reference to Exhibit 3(1) of the Company's Form S-1 Filed November 4, 2008
(b) Incorporated by Reference to Exhibit 3(2) of the Company's Form S-1 Filed November 4, 2008
(c) Incorporated by Reference to Exhibit 10(1) of the Company's Form10-K Filed November 17, 2009
(d) Incorporated by Reference to Exhibit 10(1) of the Company's Form10-K Filed November 16, 2010
(e) Incorporated by Reference to Exhibit 10(1) of the Company's Form 8-K Filed December 17, 2010
(f) Incorporated by Reference to Exhibit 10(2) of the Company's Form 8-K Filed December 17, 2010
(g) Incorporated by Reference to Exhibit 10(3) of the Company's Form 8-K Filed December 17, 2010
(h) Incorporated by Reference to Exhibit 10(3) of the Company's Form 8-K Filed October 24, 2011
(i) Incorporated by Reference to Exhibit 3(i) of the Company's Form 8-K Filed June 10, 2011
(j) Incorporated by Reference to Exhibit 10(9) of the Company's Form 10-K filed November 3 2011
(k) Incorporated by Reference to Exhibit 10(10) of the Company's Form 10-K filed November 3 2011
(l) Incorporated by Reference to Exhibit 10(11) of the Company's Form 10-K filed November 3 2011
(m) Incorporated by Reference to Exhibit 10(12) of the Company's Form 10-K filed November 3 2011
(n) Incorporated by Reference to Exhibit 3(i) (2)of the Company's Form 8-K Filed June 10, 2011
(o) Incorporated by Reference to Exhibit 3(ii) of the Company's Form 8-K Filed June 10, 2011
(p) Incorporated by Reference to Exhibit 3(i) of the Company's Form 8-K Filed June 10, 2011
(q) Incorporated by Reference to Exhibit 10.1 of the Company's Form 10-Q Filed January 11, 2012
( r) Incorporated by Reference to Exhibit 3(i) of the Company's Form 8-K Filed February 9, 2012
(s) Incorporated by Reference to Exhibit (3)(i) of the Company's Form 10-Q Filed February 9, 2012
(t) Incorporated by Reference to Exhibit 10.1 of the Company's Form 10-Q Filed February 9, 2012
(u) Incorporated by Reference to Exhibit 10.2 of the Company's Form 10-Q Filed February 9, 2012
(v) Incorporated by Reference to Exhibit 3(i) of the Company's Form 8-K Filed March 22, 2012
(w) Incorporated by Reference to Exhibit 10.1 of the Company's Form 8-K Filed April 5, 2012
(x) Filed as Exhibit 5.1
(y) Incorporated by Reference to Exhibit 14 of the Company's Form10-K Filed November 17, 2009
(z) Incorporated by Reference to Exhibit 10.1 of the Company's Form 10-Q Filed March 28, 2012
(aa) Incorporated by Reference to Exhibit 3(i) of the Company's Form 8-K Filed April 25, 2012
(aaa) Incorporated by Reference to Exhibit 10 of the Company's Form 8-K Filed April 25, 2012
(aaaa) Incorporated by Reference to Exhibit 10.2 of the Company's Form 8-K Filed July 10, 2009
(aaaaa) Incorporated by Reference to Exhibit 10.1 of the Company's Form 8-K Filed June 4, 2012
(zzzzzzzz1) Incorporated by Reference to Exhibit 10.1 of the Company's Form 10-Q Filed July 23, 2012
(zzzzzzzz2) Incorporated by Reference to Exhibit 10.2 of the Company's Form 10-Q Filed July 23, 2012
(zzzzzzzz3) Incorporated by Reference to Exhibit 10.3 of the Company's Form 10-Q Filed July 23, 2012
(zzzzzzzz4) Incorporated by Reference to Exhibit 10.4 of the Company's Form 10-Q Filed July 23, 2012
(zzzzzzzz5) Incorporated by Reference to Exhibit 10.5 of the Company's Form 10-Q Filed July 23, 2012
(zzzzzzzz6) Incorporated by Reference to Exhibit 10.6 of the Company's Form 10-Q Filed July 23, 2012
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.
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
February 1, 2013.
Entest BioMedical, Inc.
By: /s/ David R. Koos
Name: David R. Koos
Title: President, Chairman, Chief Executive Officer
Date:
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:
EXHIBIT 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, David R. Koos, certify that:
Date: February 1, 2013
/s/ David R. Koos
David R. Koos
Chief Executive Officer
1. I have reviewed this annual report on Form 10-K for the YEAR ended August 31, 2012 of Entest BioMedical, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information
relating to the registrant’s, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being
prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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:
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth
fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit
committee of registrant’s board of directors (or persons performing the equivalent function):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the
registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
EXHIBIT 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, David R. Koos, certify that:
Date: February 1, 2013
/s/ David Koos
David R. Koos
Acting Chief Financial Officer
1. I have reviewed this annual report on Form 10-K for the YEAR ended August 31, 2012 of Entest BioMedical, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the
registrant’s, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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:
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the
end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the
case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s
board of directors (or persons performing the equivalent function):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
EXHIBIT 32.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Entest BioMedical, Inc. on Form 10-K for the year ended August 31, 2012 as filed with the Securities and Exchange Commission on the date hereof (the
“Report”), I, David R. Koos, Chief Executive Officer certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge
and belief:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Dated: February 1, 2013 /s/ David R. Koos
David R. Koos
Chief Executive Officer
EXHIBIT 32.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Entest BioMedical, Inc. on Form 10-K for the year ended August 31, 2012 as filed with the Securities and Exchange Commission on the date hereof (the
“Report”), I, David R. Koos, Chief Financial Officer certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge
and belief:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Dated: February 1, 2013 /s/ David R. Koos
David R. Koos
Chief Financial Officer
EXHIBIT 10.37
NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.
NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY THE SECURITIES.
Principal Amount: $63,000 Issue Date: September 21, 2012
Purchase Price: $63,000
CONVERTIBLE PROMISSORY NOTE
FOR VALUE RECEIVED , ENTEST BIOMEDICAL, INC. , a Nevada corporation (hereinafter called the “Borrower”), hereby promises to pay to the order of ASHER ENTERPRISES, INC. , a
Delaware corporation, or registered assigns (the “Holder”) the sum of $63,000.00 together with any interest as set forth herein, on June 25, 2013 (the “Maturity Date”), and to pay interest on the unpaid
principal balance hereof at the rate of eight percent (8%) (the “Interest Rate”) per annum from the date hereof (the “Issue Date”) until the same becomes due and payable, whether at maturity or upon
acceleration or by prepayment or otherwise. This Note may not be prepaid in whole or in part except as otherwise explicitly set forth herein. Any amount of principal or interest on this Note which is not
paid when due shall bear interest at the rate of twenty two percent (22%) per annum from the due date thereof until the same is paid (“Default Interest”). Interest shall commence accruing on the date that
the Note is fully paid and shall be computed on the basis of a 365-day year and the actual number of days elapsed. All payments due hereunder (to the extent not converted into common stock, $0.001 par
value per share (the “Common Stock”) in accordance with the terms hereof) shall be made in lawful money of the United States of America. All payments shall be made at such address as the Holder shall
hereafter give to the Borrower by written notice made in accordance with the provisions of this Note. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a
business day, the same shall instead be due on the next succeeding day which is a business day and, in the case of any interest payment date which is not the date on which this Note is paid in full, the
extension of the due date thereof shall not be taken into account for purposes of determining the amount of interest due on such date. As used in this Note, the term “business day” shall mean any day other
than a Saturday, Sunday or a day on which commercial banks in the city of New York, New York are authorized or required by law or executive order to remain closed. Each capitalized term used herein,
and not otherwise defined, shall have the meaning ascribed thereto in that certain Securities Purchase Agreement dated the date hereof, pursuant to which this Note was originally issued (the “Purchase
Agreement”).
This Note is free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Borrower and will
not impose personal liability upon the holder thereof.
The following terms shall apply to this Note:
ARTICLE I. CONVERSION RIGHTS
1.1 Conversion Right. The Holder shall have the right from time to time, and at any time during the period beginning on the date which is one hundred eighty (180) days following the date of this Note and
ending on the later of: (i) the Maturity Date and (ii) the date of payment of the Default Amount (as defined in Article III) pursuant to Section 1.6(a) or Article III, each in respect of the remaining
outstanding principal amount of this Note to convert all or any part of the outstanding and unpaid principal amount of this Note into fully paid and non- assessable shares of Common Stock, as such
Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock shall hereafter be changed or reclassified at the conversion price
(the “Conversion Price”) determined as provided herein (a “Conversion”); provided, however, that in no event shall the Holder be entitled to convert any portion of this Note in excess of that portion of this
Note upon conversion of which the sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed
beneficially owned through the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion of any other security of the Borrower subject to a limitation on conversion or
exercise analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to which the determination of
this proviso is being made, would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock. For purposes of the proviso to the
immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulations
13D-G thereunder, except as otherwise provided in clause (1) of such proviso, provided, further, however, that the limitations on conversion may be waived by the Holder upon, at the election of the
Holder, not less than 61 days’ prior notice to the Borrower, and the provisions of the conversion limitation shall continue to apply until such 61st day (or such later date, as determined by the Holder, as may
be specified in such notice of waiver). The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below)
by the applicable Conversion Price then in effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit A (the “Notice of Conversion”), delivered to the Borrower by the
Holder in accordance with Section 1.4 below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to the
Borrower before 6:00 p.m., New York, New York time on such conversion date (the “Conversion Date”). The term “Conversion Amount” means, with respect to any conversion of this Note, the sum of (1)
the principal amount of this Note to be converted in such conversion plus (2) at the Borrower’s option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided in this Note
to the Conversion Date, plus (3) at the Borrower’s option, Default Interest, if any, on the amounts referred to in the immediately preceding clauses (1) and/or (2) plus (4) at the Holder’s option, any amounts
owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof.
1.2 Conversion Price.
(a) Calculation of Conversion Price. The conversion price (the “Conversion Price”) shall equal the Variable Conversion Price (as defined herein) (subject to equitable adjustments for stock splits, stock
dividends or rights offerings by the Borrower relating to the Borrower’s securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary
distributions and similar events). The "Variable Conversion Price" shall mean 61% multiplied by the Market Price (as defined herein) (representing a discount rate of 39%). “Market Price” means the
average of the lowest three (3) Trading Prices (as defined below) for the Common Stock during the ten (10) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date.
“Trading Price” means, for any security as of any date, the closing bid price on the Over-the-Counter Bulletin Board, or applicable trading market (the “OTCQB”) as reported by a reliable reporting service
(“Reporting Service”) designated by the Holder (i.e. Bloomberg) or, if the OTCQB is not the principal trading market for such security, the closing bid price of such security on the principal securities
exchange or trading market where such security is listed or traded or, if no closing bid price of such security is available in any of the foregoing manners, the average of the closing bid prices of any market
makers for such security that are listed in the “pink sheets” by the National Quotation Bureau, Inc. If the Trading Price cannot be calculated for such security on such date in the manner provided above, the
Trading Price shall be the fair market value as mutually determined by the Borrower and the holders of a majority in interest of the Notes being converted for which the calculation of the Trading Price is
required in order to determine the Conversion Price of such Notes. “Trading Day” shallmean any day on which the Common Stock is tradable for any period on the OTCQB, or on the principal securities
exchange or other securities market on which the Common Stock is then being traded.
(b) Conversion Price During Major Announcements. Notwithstanding anything contained in Section 1.2(a) to the contrary, in the event the Borrower (i) makes a public announcement that it intends to
consolidate or merge with any other corporation (other than a merger in which the Borrower is the surviving or continuing corporation and its capital stock is unchanged) or sell or transfer all or
substantially all of the assets of the Borrower or (ii) any person, group or entity (including the Borrower) publicly announces a tender offer to purchase 50% or more of the Borrower’s Common Stock (or
any other takeover scheme) (the date of the announcement referred to in clause (i) or (ii) is hereinafter referred to as the “Announcement Date”), then the Conversion Price shall, effective upon the
Announcement Date and continuing through the Adjusted Conversion Price Termination Date (as defined below), be equal to the lower of (x) the Conversion Price which would have been applicable for a
Conversion occurring on the Announcement Date and (y) the Conversion Price that would otherwise be in effect. From and after the Adjusted Conversion Price Termination Date, the Conversion Price
shall be determined as set forth in this Section 1.2(a). For purposes hereof, “Adjusted Conversion Price Termination Date” shall mean, with respect to any proposed transaction or tender offer (or takeover
scheme) for which a public announcement as contemplated by this Section 1.2(b) has been made, the date upon which the Borrower (in the case of clause (i) above) or the person, group or entity (in the
case of clause (ii) above) consummates or publicly announces the termination or abandonment of the proposed transaction or tender offer (or takeover scheme) which caused this Section 1.2(b) to become
operative.
1.3 Authorized Shares. The Borrower covenants that during the period the conversion right exists, the Borrower will reserve from its authorized and unissued Common Stock a sufficient number of shares,
free from preemptive rights, to provide for the issuance of Common Stock upon the full conversion of this Note issued pursuant to the Purchase Agreement. The Borrower is required at all times to have
authorized and reserved four and one half times the number of shares that is actually issuable upon full conversion of the Note (based on the Conversion Price of the Notes in effect from time to time) (the
“Reserved Amount”). The Reserved Amount shall be increased from time to time in accordance with the Borrower’s obligations pursuant to Section 4(g) of the Purchase Agreement. The Borrower
represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. In addition, if the Borrower shall issue any securities or make any change to its capital structure
which would change the number of shares of Common Stock into which the Notes shall be convertible at the then current Conversion Price, the Borrower shall at the same time make proper provision so
that thereafter there shall be a sufficient number of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion of the outstanding Notes. The Borrower (i) acknowledges
that it has irrevocably instructed its transfer agent to issue certificates for the Common Stock issuable upon conversion of this Note, and (ii) agrees that its issuance of this Note shall constitute full authority
to its officers and agents who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock in accordance with the terms and
conditions of this Note.
If, at any time the Borrower does not maintain the Reserved Amount it will be considered an Event of Default under Section 3.2 of the Note.
1.4 Method of Conversion.
(a) Mechanics of Conversion. Subject to Section 1.1, this Note may be converted by the Holder in whole or in part at any time from time to time after the Issue Date, by (A) submitting to the Borrower a
Notice of Conversion (by facsimile, e-mail or other reasonable means of communication dispatched on the Conversion Date prior to 6:00 p.m., New York, New York time) and (B) subject to Section 1.4(b),
surrendering this Note at the principal office of the Borrower.
(b) Surrender of Note Upon Conversion. Notwithstanding anything to the contrary set forth herein, upon conversion of this Note in accordance with the terms hereof, the Holder shall not be required to
physically surrender this Note to the Borrower unless the entire unpaid principal amount of this Note is so converted. The Holder and the Borrower shall maintain records showing the principal amount so
converted and thedates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Borrower, so as not to require physical surrender of this Note upon each such
conversion. In the event of any dispute or discrepancy, such records of the Borrower shall, prima facie, be controlling and determinative in the absence of manifest error. Notwithstanding the foregoing, if
any portion of this Note is converted as aforesaid, the Holder may not transfer this Note unless the Holder first physically surrenders this Note to the Borrower, whereupon the Borrower will forthwith issue
and deliver upon the order of the Holder a new Note of like tenor, registered as the Holder (upon payment by the Holder of any applicable transfer taxes) may request, representing in the aggregate the
remaining unpaid principal amount of this Note. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion
of a portion of this Note, the unpaid and unconverted principal amount of this Note represented by this Note may be less than the amount stated on the face hereof.
(c) Payment of Taxes. The Borrower shall not be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of shares of Common Stock or other securities or
property on conversion of this Note in a name other than that of the Holder (or in street name), and the Borrower shall not be required to issue or deliver any such shares or other securities or property
unless and until the person or persons (other than the Holder or the custodian in whose street name such shares are to be held for the Holder’s account) requesting the issuance thereof shall have paid to the
Borrower the amount of any such tax or shall have established to the satisfaction of the Borrower that such tax has been paid.
(d) Delivery of Common Stock Upon Conversion. Upon receipt by the Borrower from the Holder of a facsimile transmission or e-mail (or other reasonable means of communication) of a Notice of
Conversion meeting the requirements for conversion as provided in this Section 1.4, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder certificates
for the Common Stock issuable upon such conversion within three (3) business days after such receipt (the “Deadline”) (and, solely in the case of conversion of the entire unpaid principal amount hereof,
surrender of this Note) in accordance with the terms hereof and the Purchase Agreement.
(e) Obligation of Borrower to Deliver Common Stock. Upon receipt by the Borrower of a Notice of Conversion, the Holder shall be deemed to be the holder of record of the Common Stock issuable upon
such conversion, the outstanding principal amount and the amount of accrued and unpaid interest on this Note shall be reduced to reflect such conversion, and, unless the Borrower defaults on its
obligations under this Article I, all rights with respect to the portion of this Note being so converted shall forthwith terminate except the right to receive the Common Stock or other securities, cash or other
assets, as herein provided, on such conversion. If the Holder shall have given a Notice of Conversion as provided herein, the Borrower’s obligation to issue and deliver the certificates for Common Stock
shall be absolute and unconditional, irrespective of the absence of any action by the Holder to enforce the same, any waiver or consent with respect to any provision thereof, the recovery of any judgment
against any person or any action to enforce the same, any failure or delay in the enforcement of any other obligation of the Borrower to the holder of record, or any setoff, counterclaim, recoupment,
limitation or termination, or any breach or alleged breach by the Holder of any obligation to the Borrower, and irrespective of any other circumstance which might otherwise limit such obligation of the
Borrower to the Holder in connection with such conversion. The Conversion Date specified in the Notice of Conversion shall be the Conversion Date so long as the Notice of Conversion is received by the
Borrower before 6:00 p.m., New York, New York time, on such date.
(f) Delivery of Common Stock by Electronic Transfer. In lieu of delivering physical certificates representing the Common Stock issuable upon conversion, provided the Borrower is participating in the
Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”) program, upon request of the Holder and its compliance with the provisions contained in Section 1.1 and in this Section
1.4, the Borrower shall use its best efforts to cause its transfer agent to electronically transmit the Common Stock issuable upon conversion to the Holder by crediting the account of Holder’s Prime Broker
with DTC through its Deposit Withdrawal Agent Commission (“DWAC”) system.
(g) Failure to Deliver Common Stock Prior to Deadline. Without in any way limiting the Holder’s right to pursue other remedies, including actual damages and/or equitable relief, the parties agree that if
delivery of the Common Stock issuable upon conversion of this Note is not delivered by the Deadline (other than a failure due to the circumstances described in Section 1.3 above, which failure shall be
governed by such Section) the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the Deadline that the Borrower fails to deliver such Common Stock. Such cash amount shall be
paid to Holder by the fifth day of the month following the month in which it has accrued or, at the option of the Holder (by written notice to the Borrower by the first day of the month following the month
in which it has accrued), shall be added to the principal amount of this Note, in which event interest shall accrue thereon in accordance with the terms of this Note and such additional principal amount shall
be convertible into Common Stock in accordance with the terms of this Note. The Borrower agrees that the right to convert is a valuable right to the Holder. The damages resulting from a failure, attempt to
frustrate, interference with such conversion right are difficult if not impossible to qualify. Accordingly the parties acknowledge that the liquidated damages provision contained in this Section 1.4(g) are
justified.
1.5 Concerning the Shares. The shares of Common Stock issuable upon conversion of this Note may not be sold or transferred unless (i) such shares are sold pursuant to an effective registration statement
under the Act or (ii) the Borrower or its transfer agent shall have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in
comparable transactions) to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration or (iii) such shares are sold or transferred pursuant
to Rule 144 under the Act (or a successor rule) (“Rule 144”) or (iv) such shares are transferred to an “affiliate” (as defined in Rule 144) of the Borrower who agrees to sell or otherwise transfer the shares
only in accordance with this Section 1.5 and who is an Accredited Investor (as defined in the Purchase Agreement). Except as otherwise provided in the Purchase Agreement (and subject to the removal
provisions set forth below), until such time as the shares of Common Stock issuable upon conversion of this Note have been registered under the Act or otherwise may be sold pursuant to Rule 144 without
any restriction as to the number of securities as of a particular date that can then be immediately sold, each certificate for shares of Common Stock issuable upon conversion of this Note that has not been so
included in an effective registration statement or that has not been sold pursuant to an effective registration statement or an exemption that permits removal of the legend, shall bear a legend substantially in
the following form, as appropriate:
“NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.
NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY THE SECURITIES.”
The legend set forth above shall be removed and the Borrower shall issue to the Holder a new certificate therefore free of any transfer legend if (i) the Borrower or its transfer agent shall have received an
opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Common Stock may be made without
registration under the Act, which opinion shall be accepted by the Company so that the sale or transfer is effected or (ii) in the case of the Common Stock issuable upon conversion of this Note, such
security is registered for sale by the Holder under an effective registration statement filed under the Act or otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities
as of a particular date that can then be immediately sold. In the event that the Company does not accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities pursuant to an
exemption from registration, such as Rule
144 or Regulation S, at the Deadline, it will be considered an Event of Default pursuant to Section 3.2 of the Note.
1.6 Effect of Certain Events.
(a) Effect of Merger, Consolidation, Etc. At the option of the Holder, the sale, conveyance or disposition of all or substantially all of the assets of the Borrower, the effectuation by the Borrower of a
transaction or series of related transactions in which more than 50% of the voting power of the Borrower is disposed of, or the consolidation, merger or other business combination of the Borrower with or
into any other Person (as defined below) or Persons when the Borrower is not the survivor shall either: (i) be deemed to be an Event of Default (as defined in Article III) pursuant to which the Borrower
shall be required to pay to the Holder upon the consummation of and as a condition to such transaction an amount equal to the Default Amount (as defined in Article III) or (ii) be treated pursuant to Section
1.6(b) hereof. “Person” shall mean any individual, corporation, limited liability company, partnership, association, trust or other entity or organization. Any transaction relating to a potential merger with
veterinary hospitals will not be considered an Event of Default under the Note or Purchase agreement, provided that the Borrower maintains controls of the merged company.
(b) Adjustment Due to Merger, Consolidation, Etc. If, at any time when this Note is issued and outstanding and prior to conversion of all of the Notes, there shall be any merger, consolidation, exchange of
shares, recapitalization, reorganization, or other similar event, as a result of which shares of Common Stock of the Borrower shall be changed into the same or a different number of shares of another class
or classes of stock or securities of the Borrower or another entity, or in case of any sale or conveyance of all or substantially all of the assets of the Borrower other than in connection with a plan of complete
liquidation of the Borrower, then the Holder of this Note shall thereafter have the right to receive upon conversion of this Note, upon the basis and upon the terms and conditions specified herein and in lieu
of the shares of Common Stock immediately theretofore issuable upon conversion, such stock, securities or assets which the Holder would have been entitled to receive in such transaction had this Note
been converted in full immediately prior to such transaction (without regard to any limitations on conversion set forth herein), and in any such case appropriate provisions shall be made with respect to the
rights and interests of the Holder of this Note to the end that the provisions hereof (including, without limitation, provisions for adjustment of the Conversion
Price and of the number of shares issuable upon conversion of the Note) shall thereafter be applicable, as nearly as may be practicable in relation to any securities or assets thereafter deliverable upon the
conversion hereof. The Borrower shall not affect any transaction described in this Section 1.6(b) unless (a) it first gives, to the extent practicable, thirty (30) days prior written notice (but in any event at
least fifteen (15) days prior written notice) of the record date of the special meeting of shareholders to approve, or if there is no such record date, the consummation of, such merger, consolidation, exchange
of shares, recapitalization, reorganization or other similar event or sale of assets (during which time the Holder shall be entitled to convert this Note) and (b) the resulting successor or acquiring entity (if not
the Borrower) assumes by written instrument the obligations of this Section 1.6(b). The above provisions shall similarly apply to successive consolidations, mergers, sales, transfers or share exchanges.
(c) Adjustment Due to Distribution. If the Borrower shall declare or make any distribution of its assets (or rights to acquire its assets) to holders of Common Stock as a dividend, stock repurchase, by way of
return of capital or otherwise (including any dividend or distribution to the Borrower’s shareholders in cash or shares (or rights to acquire shares) of capital stock of a subsidiary (i.e., a spin-off)) (a
“Distribution”), then the Holder of this Note shall be entitled, upon any conversion of this Note after the date of record for determining shareholders entitled to such Distribution, to receive the amount of
such assets which would have been payable to the Holder with respect to the shares of Common Stock issuable upon such conversion had such Holder been the holder of such shares of Common Stock on
the record date for the determination of shareholders entitled to such Distribution.
(d) Adjustment Due to Dilutive Issuance. If, at any time when any Notes are issued and outstanding, the Borrower issues or sells, or in accordance with this Section 1.6(d) hereof is deemed to have issued or
sold, any shares of Common Stock for no consideration or for a consideration per share (before deduction of reasonable expenses or commissions or underwriting discounts or allowances in connection
therewith) less than the Conversion Price in effect on the date of such issuance (or deemed issuance) of such shares of Common Stock (a “Dilutive Issuance”), then immediately upon the Dilutive Issuance,
the Conversion Price will be reduced to the amount of the consideration per share received by the Borrower in such Dilutive Issuance.
The Borrower shall be deemed to have issued or sold shares of Common Stock if the Borrower in any manner issues or grants any warrants, rights or options (not including employee stock option plans),
whether or not immediately exercisable, to subscribe for or to purchase Common Stock or other securities convertible into or exchangeable for Common Stock (“Convertible Securities”) (such warrants,
rights and options to purchase Common Stock or Convertible Securities are hereinafter referred to as “Options”) and the price per share for which Common Stock is issuable upon the exercise of such
Options is less than the Conversion Price then in effect, then the Conversion Price shall be equal to such price per share. For purposes of the preceding sentence, the “price per share for which Common
Stock is issuable upon the exercise of such Options” is determined by dividing (i) the total amount, if any, received or receivable by the Borrower as consideration for the issuance or granting of all such
Options, plus the minimum aggregate amount of additional consideration, if any, payable to the Borrower upon the exercise of all such Options, plus, in the case of Convertible Securities issuable upon the
exercise of such Options, the minimum aggregate amount of additional consideration payable upon the conversion or exchange thereof at the time such Convertible
Securities first become convertible or exchangeable, by (ii) the maximum total number of shares of Common Stock issuable upon the exercise of all such Options (assuming full conversion of Convertible
Securities, if applicable). No further adjustment to the Conversion Price will be made upon the actual issuance of such Common Stock upon the exercise of such Options or upon the conversion or exchange
of Convertible Securities issuable upon exercise of such Options.
Additionally, the Borrower shall be deemed to have issued or sold shares of Common Stock if the Borrower in any manner issues or sells any Convertible Securities, whether or not immediately convertible
(other than where the same are issuable upon the exercise of Options), and the price per share for which Common Stock is issuable upon such conversion or exchange is less than the Conversion Price then
in effect, then the Conversion Price shall be equal to such price per share. For the purposes of the preceding sentence, the “price per share for which Common Stock is issuable upon such conversion or
exchange” is determined by dividing (i) the total amount, if any, received or receivable by the Borrower as consideration for the issuance or sale of all such Convertible Securities, plus the minimum
aggregate amount of additional consideration, if any, payable to the Borrower upon the conversion or exchange thereof at the time such Convertible Securities first become convertible or exchangeable, by
(ii) the maximum total number of shares of Common Stock issuable upon the conversion or exchange of all such Convertible Securities. No further adjustment to the Conversion Price will be made upon
the actual issuance of such Common Stock upon conversion or exchange of such Convertible Securities.
(e) Purchase Rights. If, at any time when any Notes are issued and outstanding, the Borrower issues any convertible securities or rights to purchase stock, warrants, securities or other property (the
“Purchase Rights”) pro rata to the record holders of any class of Common Stock, then the Holder of this Note will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate
Purchase Rights which such Holder could have acquired if such Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Note (without regard to any
limitations on conversion contained herein) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights or, if no such record is taken, the date as of which
the record holders of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights.
(f) Notice of Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price as a result of the events described in this Section 1.6, the Borrower, at its expense, shall
promptly compute such adjustment or readjustment and prepare and furnish to the Holder a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The Borrower shall, upon the written request at any time of the Holder, furnish to such Holder a like certificate setting forth (i) such adjustment or readjustment, (ii) the
Conversion Price at the time in effect and (iii) the number of shares of Common Stock and the amount, if any, of other securities or property which at the time would be received upon conversion of the
Note.
1.7 Trading Market Limitations. Unless permitted by the applicable rules and regulations of the principal securities market on which the Common Stock is then listed or traded, in no event shall the
Borrower issue upon conversion of or otherwise pursuant to this Note and the other Notes issued pursuant to the Purchase Agreement more than the maximum number of shares of Common Stock that the
Borrower can issue pursuant to any rule of the principal United States securities market on which the Common Stock is then traded (the “Maximum Share Amount”), which shall be 4.99% of the total
shares outstanding on the Closing Date (as defined in the Purchase Agreement), subject to equitable adjustment from time to time for stock splits, stock dividends, combinations, capital reorganizations and
similar events relating to the Common Stock occurring after the date hereof. Once the Maximum Share Amount has been issued, if the Borrower fails to eliminate any prohibitions under applicable law or
the rules or regulations of any stock exchange, interdealer quotation system or other self-regulatory organization with jurisdiction over the Borrower or any of its securities on the Borrower’s ability to issue
shares of Common Stock in excess of the Maximum Share Amount, in lieu of any further right to convert this Note, this will be considered an Event of Default under Section 3.3 of the Note.
1.8 Status as Shareholder. Upon submission of a Notice of Conversion by a Holder, (i) the shares covered thereby (other than the shares, if any, which cannot be issued because their issuance would exceed
such Holder’s allocated portion of the Reserved Amount or Maximum Share Amount) shall be deemed converted into shares of Common Stock and (ii) the Holder’s rights as a Holder of such converted
portion of this Note shall cease and terminate, excepting only the right to receive certificates for such shares of Common Stock and to any remedies provided herein or otherwise available at law or in equity
to such Holder because of a failure by the Borrower to comply with the terms of this Note. Notwithstanding the foregoing, if a Holder has not received certificates for all shares of Common Stock prior to
the tenth (10th) business day after the expiration of the Deadline with respect to a conversion of any portion of this Note for any reason, then (unless the Holder otherwise elects to retain its status as a
holder of Common Stock by so notifying the Borrower) the Holder shall regain the rights of a Holder of this Note with respect to such unconverted portions of this Note and the Borrower shall, as soon as
practicable, return such unconverted Note to the Holder or, if the Note has not been surrendered, adjust its records to reflect that such portion of this Note has not been converted. In all cases, the Holder
shall retain all of its rights and remedies (including, without limitation, (i) the right to receive Conversion Default Payments pursuant to Section 1.3 to the extent required thereby for such Conversion
Default and any subsequent Conversion Default and (ii) the right to have the Conversion Price with respect to subsequent conversions determined in accordance with Section 1.3) for the Borrower’s failure
to convert this Note.
I.9 Prepayment. Notwithstanding anything to the contrary contained in this is thirty (30) days following the issue date, the Borrower shall have the right, exercisable on not less than three (3) Trading Days
prior written notice to the Holder of the Note to prepay the outstanding Note ( principal and accrued interest), in full, in accordance with this Section 1.9. Any notice or prepayment hereunder (an “Optional
Prepayment Notice”) shall be delivered to the Holder of the Note at its registered addresses and shall state: (1) that the Borrower is exercising its right to prepay the Note, and (2) the date of prepayment
which shall be not more than three (3) Trading Days from the date of the Optional Prepayment Notice. On the date fixed for prepayment (the “Optional Prepayment Date”), the Borrower shall make
payment of the Optional Prepayment Amount (as defined below) to or upon the order of the Holder as specified by the Holder in writing to Borrower at least one (1) business day prior to the Optional
Prepayment Date. If the Borrower exercises its right to prepay the Note, the Borrower shall make payment to the Holder of an amount in cash (the “Optional Prepayment Amount”) equal to 110%
multiplied by the sum of: (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the Optional Prepayment Date plus (y)
Default Interest, if any, on the amounts referred to in clauses (w) and (x) plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof. If the Borrower delivers an Optional
Prepayment Notice and fails to pay the Optional Prepayment Amount due to the Holder of the Note within two (2) business days following the Optional Prepayment Date, the Borrower shall forever forfeit
its right to prepay the Note pursuant to this Section 1.9.
Notwithstanding anything to the contrary contained in this Note , at any time during the period beginning on the date which is thirty one (31) days following the issue date and ending on the date which is
sixty (60) days following the issue date , the Borrower shall have the right, exercisable on not less than three (3) Trading Days prior written notice to the Holder of the Note to prepay the outstanding Note
( principal and accrued interest), in full, in accordance with this Section 1.9. Any notice or prepayment hereunder (an “Optional Prepayment Notice”) shall be delivered to the Holder of the Note at its
registered addresses and shall state: (1) that the Borrower is exercising its right to prepay the Note, and (2) the date of prepayment which shall be not more than three (3) Trading Days from the date of the
Optional Prepayment Notice. On the date fixed for prepayment (the “Optional Prepayment Date”), the Borrower shall make payment of the Optional Prepayment Amount (as defined below) to or upon the
order of the Holder as specified by the Holder in writing to Borrower at least one (1) business day prior to the Optional Prepayment Date. If the Borrower exercises its right to prepay the Note, the Borrower
shall make payment to the Holder of an amount in cash (the “Second Optional Prepayment Amount”) equal to 115% multiplied by the sum of: (w) the then outstanding principal amount of this Note plus
(x) accrued and unpaid interest on the unpaid principal amount of this Note to the Optional Prepayment Date plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and (x) plus (z) any
amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof. If the Borrower delivers an Optional Prepayment Notice and fails to pay the Second Optional Prepayment Amount due to the Holder
of the Note within two (2) business days following the Optional Prepayment Date, the Borrower shall forever forfeit its right to prepay the Note pursuant to this Section 1.9.
Notwithstanding anything to the contrary contained in this Note , at any time during the period beginning on the date which is sixty one (61) days following the issue date and ending on the date which is
ninety (90) days following the issue date , the Borrower shall have the right, exercisable on not less than three (3) Trading Days prior written notice to the Holder of the Note to prepay the outstanding Note
( principal and accrued interest), in full, in accordance with this Section 1.9. Any notice or prepayment hereunder (an “Optional Prepayment Notice”) shall be delivered to the Holder of the Note at its
registered addresses and shall state: (1) that the Borrower is exercising its right to prepay the Note, and (2) the date of prepayment which shall be not more than three (3) Trading Days from the date of the
Optional Prepayment Notice. On the date fixed for prepayment (the “Optional Prepayment Date”), the Borrower shall make payment of the Optional Prepayment Amount (as defined below) to or upon the
order of the Holder as specified by the Holder in writing to Borrower at least one (1) business day prior to the Optional Prepayment Date. If the Borrower exercises its right to prepay the Note, the Borrower
shall make payment to the Holder of an amount in cash (the “Third Optional Prepayment Amount”) equal to 120% multiplied by the sum of: (w) the then outstanding principal amount of this Note plus (x)
accrued and unpaid interest on the unpaid principal amount of this Note to the Optional Prepayment Date plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and (x) plus (z) any
amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof. If the Borrower delivers an Optional Prepayment Notice and fails to pay the Third Optional Prepayment Amount due to the Holder
of the Note within two (2) business days following the Optional Prepayment Date, the Borrower shall forever forfeit its right to prepay the Note pursuant to this Section 1.9.
Notwithstanding anything to the contrary contained in this Note , at any time during the period beginning on the date which is ninety one (91) days following the issue date and ending on the date which is
one hundred and twenty (120) days following the issue date , the Borrower shall have the right, exercisable on not less than three (3) Trading Days prior written notice to the Holder of the Note to prepay
the outstanding Note ( principal and accrued interest), in full, in accordance with this Section 1.9. Any notice or prepayment hereunder (an “Optional Prepayment Notice”) shall be delivered to the Holder of
the Note at its registered addresses and shall state: (1) that the Borrower is exercising its right to prepay the Note, and (2) the date of prepayment which shall be not more than three (3) Trading Days from
the date of the Optional Prepayment Notice. On the date fixed for prepayment (the “Optional Prepayment Date”), the Borrower shall make payment of the Optional Prepayment Amount (as defined below)
to or upon the order of the Holder as specified by the Holder in writing to Borrower at least one (1) business day prior to the Optional Prepayment Date. If the Borrower exercises its right to prepay the
Note, the Borrower shall make payment to the Holder of an amount in cash (the “Fourth Optional Prepayment Amount”) equal to 125% multiplied by the sum of: (w) the then outstanding principal amount
of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the Optional Prepayment Date plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and
(x) plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof. If the Borrower delivers an Optional Prepayment Notice and fails to pay the Fourth Optional Prepayment Amount
due to the Holder of the Note within two (2) business days following the Optional Prepayment Date, the Borrower shall forever forfeit its right to prepay the Note pursuant to this Section 1.9
Notwithstanding anything to the contrary contained in this Note , at any time during the period beginning on the date which is one hundred and twenty one (121) days following the issue date and ending on
the date which is one hundred and fifty (150) days following the issue date , the Borrower shall have the right, exercisable on not less than three (3) Trading Days prior written notice to the Holder of the
Note to prepay the outstanding Note ( principal and accrued interest), in full, in accordance with this Section 1.9. Any notice or prepayment hereunder (an “Optional Prepayment Notice”) shall be delivered
to the Holder of the Note at its registered addresses and shall state: (1) that the Borrower is exercising its right to prepay the Note, and (2) the date of prepayment which shall be not more than three (3)
Trading Days from the date of the Optional Prepayment Notice. On the date fixed for prepayment (the “Optional Prepayment Date”), the Borrower shall make payment of the Optional Prepayment Amount
(as defined below) to or upon the order of the Holder as specified by the Holder in writing to Borrower at least one (1) business day prior to the Optional Prepayment Date. If the Borrower exercises its right
to prepay the Note, the Borrower shall make payment to the Holder of an amount in cash (the “Fifth Optional Prepayment Amount”) equal to 130% multiplied by the sum of: (w) the then outstanding
principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the Optional Prepayment Date plus (y) Default Interest, if any, on the amounts referred to in
clauses (w) and (x) plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof. If the Borrower delivers an Optional Prepayment Notice and fails to pay the Fifth Optional
Prepayment Amount due to the Holder of the Note within two (2) business days following the Optional Prepayment Date, the Borrower shall forever forfeit its right to prepay the Note pursuant to this
Section 1.9.
Notwithstanding anything to the contrary contained in this Note , at any time during the period beginning on the date which is one hundred and fifty one (151) days following the issue date and ending on
the date which is one hundred and eighty (180) days following the issue date , the Borrower shall have the right, exercisable on not less than three (3) Trading Days prior written notice to the Holder of the
Note to prepay the outstanding Note ( principal and accrued interest), in full, in accordance with this Section 1.9. Any notice or prepayment hereunder (an “Optional Prepayment Notice”) shall be delivered
to the Holder of the Note at its registered addresses and shall state: (1) that the Borrower is exercising its right to prepay the Note, and (2) the date of prepayment which shall be not more than three (3)
Trading Days from the date of the Optional Prepayment Notice. On the date fixed for prepayment (the “Optional Prepayment Date”), the Borrower shall make payment of the Optional Prepayment Amount
(as defined below) to or upon the order of the Holder as specified by the Holder in writing to Borrower at least one (1) business day prior to the Optional Prepayment Date. If the Borrower exercises its right
to prepay the Note, the Borrower shall make payment to the Holder of an amount in cash (the “Sixth Optional Prepayment Amount”) equal to 135% multiplied by the sum of: (w) the then outstanding
principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the Optional Prepayment Date plus (y) Default Interest, if any, on the amounts referred to in
clauses (w) and (x) plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof. If the Borrower delivers an Optional Prepayment Notice and fails to pay the SixthOptional
Prepayment Amount due to the Holder of the Note within two (2) business days following the Optional Prepayment Date, the Borrower shall forever forfeit its right to prepay the Note pursuant to this
Section 1.9
After the expiration of one hundred eighty (180) following the date of the Note, the Borrower shall have no right of prepayment.
ARTICLE II. CERTAIN COVENANTS
2.1 Distributions on Capital Stock. So long as the Borrower shall have any obligation under this Note, the Borrower shall not without the Holder’s written consent (a) pay, declare or set apart for such
payment, any dividend or other distribution (whether in cash, property or other securities) on shares of capital stock other than dividends on shares of Common Stock solely in the form of additional shares
of Common Stock or (b) directly or indirectly or through any subsidiary make any other payment or distribution in respect of its capital stock except for distributions pursuant to any shareholders’ rights
plan which is approved by a majority of the Borrower’s disinterested directors.
2.2 Restriction on Stock Repurchases. So long as the Borrower shall have any obligation under this Note, the Borrower shall not without the Holder’s written consent redeem, repurchase or otherwise
acquire (whether for cash or in exchange for property or other securities or otherwise) in any one transaction or series of related transactions any shares of capital stock of the Borrower or any warrants,
rights or options to purchase or acquire any such shares.
2.3 Borrowings. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s written consent, create, incur, assume guarantee, endorse, contingently
agree to purchase or otherwise become liable upon the obligation of any person, firm, partnership, joint venture or corporation, except by the endorsement of negotiable instruments for deposit or collection,
or suffer to exist any liability for borrowed money, except (a) borrowings in existence or committed on the date hereof and of which the Borrower has informed Holder in writing prior to the date hereof, (b)
indebtedness to trade creditors or financial institutions incurred in the ordinary course of business, (c) borrowings from one or more shareholders of the Borrower, so long as these borrowings are not repaid
during the term of the Note or (d) borrowings, the proceeds of which shall be used to repay this Note.
2.4 Sale of Assets. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s written consent, sell, lease or otherwise dispose of any significant portion
of its assets outside the ordinary course of business. Any consent to the disposition of any assets may be conditioned on a specified use of the proceeds of disposition.
2.5 Advances and Loans. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s written consent, lend money, give credit or make advances to any
person, firm, joint venture or corporation, including, without limitation, officers, directors, employees, subsidiaries and affiliates of the Borrower, except loans, credits or advances (a) in existence or
committed on the date hereof and which the Borrower has informed Holder in writing prior to the date hereof, (b) made in the ordinary course of business or (c) not in excess of $100,000.
ARTICLE III. EVENTS OF DEFAULT
If any of the following events of default (each, an “Event of Default”) shall occur:
3.1 Failure to Pay Principal or Interest. The Borrower fails to pay the principal hereof or interest thereon when due on this Note, whether at maturity, upon acceleration or otherwise.
3.2 Conversion and the Shares. The Borrower fails to issue shares of Common Stock to the Holder (or announces or threatens in writing that it will not honor its obligation to do so) upon exercise by the
Holder of the conversion rights of the Holder in accordance with the terms of this Note, fails to transfer or cause its transfer agent to transfer (issue) (electronically or in certificated form) any certificate for
shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, the Borrower directs its transfer agent not to transfer or delays,
impairs, and/or hinders its transfer agent in transferring (or issuing) (electronically or in certificated form) any certificate for shares of Common Stock to be issued to the Holder upon conversion of or
otherwise pursuant to this Note as and when required by this Note, or fails to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any
restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this
Note as and when required by this Note (or makes any written announcement, statement or threat that it does not intend to honor the obligations described in this paragraph) and any such failure shall
continue uncured (or any written announcement, statement or threat not to honor its obligations shall not be rescinded in writing) for three (3) business days after the Holder shall have delivered a Notice of
Conversion. It is an obligation of the Borrower to remain current in its obligations to its transfer agent. It shall be an event of default of this Note, if a conversion of this Note is delayed, hindered or
frustrated due to a balance owed by the Borrower to its transfer agent. If at the option of the Holder, the Holder advances any funds to the Borrower’s transfer agent in order to process a conversion, such
advanced funds shall be paid by the Borrower to the Holder within forty eight (48) hours of a demand from the Holder.
3.3 Breach of Covenants. The Borrower breaches any material covenant or other material term or condition contained in this Note and any collateral documents including but not limited to the Purchase
Agreement and such breach continues for a period of ten (10) days after written notice thereof to the Borrower from the Holder.
3.4 Breach of Representations and Warranties. Any representation or warranty of the Borrower made herein or in any agreement, statement or certificate given in writing pursuant hereto or in connection
herewith (including, without limitation, the Purchase Agreement), shall be false or misleading in any material respect when made and the breach of which has (or with the passage of time will have) a
material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement.
3.5 Receiver or Trustee. The Borrower or any subsidiary of the Borrower shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for
a substantial part of its property or business, or such a receiver or trustee shall otherwise be appointed.
3.6 Judgments. Any money judgment, writ or similar process shall be entered or filed against the Borrower or any subsidiary of the Borrower or any of its property or other assets for more than $50,000,
and shall remain unvacated, unbonded or unstayed for a period of twenty (20) days unless otherwise consented to by the Holder, which consent will not be unreasonably withheld.
3.7 Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or involuntary, for relief under any bankruptcy law or any law for the relief of debtors
shall be instituted by or against the Borrower or any subsidiary of the Borrower.
3.8 Delisting of Common Stock. The Borrower shall fail to maintain the listing of the Common Stock on at least one of the OTCQB or an equivalent replacement exchange, the Nasdaq National Market, the
Nasdaq SmallCap Market, the New York Stock Exchange, or the American Stock Exchange.
3.9 Failure to Comply with the Exchange Act. The Borrower shall fail to comply with the reporting requirements of the Exchange Act; and/or the Borrower shall cease to be subject to the reporting
requirements of the Exchange Act.
3.10 Liquidation. Any dissolution, liquidation, or winding up of Borrower or any substantial portion of its business.
3.11 Cessation of Operations. Any cessation of operations by Borrower or Borrower admits it is otherwise generally unable to pay its debts as such debts become due, provided, however, that any disclosure
of the Borrower’s ability to continue as a “going concern” shall not be an admission that the Borrower cannot pay its debts as they become due.
3.12 Maintenance of Assets. The failure by Borrower to maintain any material intellectual property rights, personal, real property or other assets which are necessary to conduct its business (whether now or
in the future).
3.13 Financial Statement Restatement. The restatement of any financial statements filed by the Borrower with the SEC for any date or period from two years prior to the Issue Date of this Note and until
this Note is no longer outstanding, if the result of such restatement would, by comparison to the unrestated financial statement, have constituted a material adverse effect on the rights of the Holder with
respect to this Note or the Purchase Agreement.
3.14 Reverse Splits. The Borrower effectuates a reverse split of its Common Stock without twenty (20) days prior written notice to the Holder.
3.15 Replacement of Transfer Agent. In the event that the Borrower proposes to replace its transfer agent, the Borrower fails to provide, prior to the effective date of such replacement, a fully executed
Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the
Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower.
3.16 Cross-Default. Notwithstanding anything to the contrary contained in this Note or the other related or companion documents, a breach or default by the Borrower of any covenant or other term or
condition contained in any of the Other Agreements, after the passage of all applicable notice and cure or grace periods, shall, at the option of the Holder, be considered a default under this Note and the
Other Agreements, in which event the Holder shall be entitled (but in no event required) to apply all rights and remedies of the Holder under the terms of this Note and the Other Agreements by reason of a
default under said Other Agreement or hereunder. “Other Agreements” means, collectively, all agreements and instruments between, among or by: (1) the Borrower, and, or for the benefit of, (2) the Holder
and any affiliate of the Holder, including, without limitation, promissory notes; provided, however, the term “Other Agreements” shall not include the related or companion documents to this Note. Each of
the loan transactions will be cross-defaulted with each other loan transaction and with all other existing and future debt of Borrower to the Holder.
Upon the occurrence and during the continuation of any Event of Default specified in Section 3.1 (solely with respect to failure to pay the principal hereof or interest thereon when due at the Maturity Date),
the Note shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the Default Sum (as defined herein).
UPON THE OCCURRENCE AND DURING THE CONTINUATION OF ANY EVENT OF DEFAULT SPECIFIED IN SECTION 3.2, THE NOTE SHALL BECOME IMMEDIATELY DUE AND
PAYABLE AND THE BORROWER SHALL PAY TO THE HOLDER, IN FULL SATISFACTION OF ITS OBLIGATIONS HEREUNDER, AN AMOUNT EQUAL TO: (Y) THE DEFAULT SUM (AS
DEFINED HEREIN); MULTIPLIED BY (Z) TWO (2). Upon the occurrence and during the continuation of any Event of Default specified in Sections 3.1 (solely with respect to failure to pay the principal
hereof or interest thereon when due on this Note upon a Trading Market Prepayment Event pursuant to Section 1.7 or upon acceleration), 3.3, 3.4, 3.6, 3.8, 3.9, 3.11, 3.12, 3.13, 3.14, and/or 3. 15
exercisable through the delivery of written notice to the Borrower by such Holders (the “Default Notice”), and upon the occurrence of an Event of Default specified the remaining sections of Articles III
(other than failure to pay the principal hereof or interest thereon at the Maturity Date specified in Section 3,1 hereof), the Note shall become immediately due and payable and the Borrower shall pay to the
Holder, in full satisfaction of its obligations hereunder, an amount equal to the greater of (i) 150% times the sum of (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid
interest on the unpaid principal amount of this Note to the date of payment (the “Mandatory Prepayment Date”) plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and/or (x) plus (z)
any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof (the then outstanding principal amount of this Note to the date of payment plus the amounts referred to in clauses (x), (y) and (z)
shall collectively be known as the “Default Sum”) or (ii) the “parity value” of the Default Sum to be prepaid, where parity value means (a) the highest number of shares of Common Stock issuable upon
conversion of or otherwise pursuant to such Default Sum in accordance with Article I, treating the Trading Day immediately preceding the Mandatory Prepayment Date as the “Conversion Date” for
purposes of determining the lowest applicable Conversion Price, unless the Default Event arises as a result of a breach in respect of a specific Conversion Date in which case such Conversion Date shall be
the Conversion Date), multiplied by (b) the highest Closing Price for the Common Stock during the period beginning on the date of first occurrence of the Event of Default and ending one day prior to the
Mandatory Prepayment Date (the “Default Amount”) and all other amounts payable hereunder shall immediately become due and payable, all without demand, presentment or notice, all of which hereby
are expressly waived, together with all costs, including, without limitation, legal fees and expenses, of collection, and the Holder shall be entitled to exercise all other rights and remedies available at law or
in equity.
If the Borrower fails to pay the Default Amount within five (5) business days of written notice that such amount is due and payable, then the Holder shall have the right at any time, so long as the Borrower
remains in default (and so long and to the extent that there are sufficient authorized shares), to require the Borrower, upon written notice, to immediately issue, in lieu of the Default Amount, the number of
shares of Common Stock of the Borrower equal to the Default Amount divided by the Conversion Price then in effect.
ARTICLE IV. MISCELLANEOUS
4.1 Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privileges. All rights and remedies existing hereunder are cumulative to, and not
exclusive of, any rights or remedies otherwise available.
4.2 Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally
served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery,
telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to
be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number
designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business
day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or
upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:
If to the Borrower, to:
ENTEST BIOMEDICAL, INC.
4700 Spring Street - Suite 203
La Mesa, CA 91942
Attn: DAVID KOOS, Chief Executive Officer
facsimile:
With a copy by fax only to (which copy shall not constitute notice):
[enter name of law firm]
Attn: [attorney name]
[enter address line 1]
[enter city, state, zip]
facsimile: [enter fax number]
If to the Holder:
ASHER ENTERPRISES, INC.
1 Linden Pl., Suite 207
Great Neck, NY. 11021
Attn: Curt Kramer, President
facsimile: 516-498-9894
With a copy by fax only to (which copy shall not constitute notice):
Naidich Wurman Birnbaum & Maday, LLP
80 Cuttermill Road, Suite 410
Great Neck, NY 11021
Attn: Bernard S. Feldman, Esq.
facsimile: 516-466-3555
4.3 Amendments. This Note and any provision hereof may only be amended by an instrument in writing signed by the Borrower and the Holder. The term “Note” and all reference thereto, as used
throughout this instrument, shall mean this instrument (and the other Notes issued pursuant to the Purchase Agreement) as originally executed, or if later amended or supplemented, then as so amended or
supplemented.
4.4 Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to be the benefit of the Holder and its successors and assigns. Each transferee of this Note
must be an “accredited investor” (as defined in Rule 501(a) of the 1933 Act). Notwithstanding anything in this Note to the contrary, this Note may be pledged as collateral in connection with a bona fide
margin account or other lending arrangement.
4.5 Cost of Collection. If default is made in the payment of this Note, the Borrower shall pay the Holder hereof costs of collection, including reasonable attorneys’ fees.
4.6 Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of laws. Any action brought by either party
against the other concerning the transactions contemplated by this Note shall be brought only in the state courts of New York or in the federal courts located in the state and county of Nassau. The parties to
this Note hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non
conveniens . The Borrower and Holder waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs. In the event that any provision of this
Note or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it
may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or
enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in
connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in
effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any
way any right to serve process in any other manner permitted by law.
4.7 Certain Amounts. Whenever pursuant to this Note the Borrower is required to pay an amount in excess of the outstanding principal amount (or the portion thereof required to be paid at that time) plus
accrued and unpaid interest plus Default Interest on such interest, the Borrower and the Holder agree that the actual damages to the Holder from the receipt of cash payment on this Note may be difficult to
determine and the amount to be so paid by the Borrower represents stipulated damages and not a penalty and is intended to compensate the Holder in part for loss of the opportunity to convert this Note and
to earn a return from the sale of shares of Common Stock acquired upon conversion of this Note at a price in excess of the price paid for such shares pursuant to this Note. The Borrower and the Holder
hereby agree that such amount of stipulated damages is not plainly disproportionate to the possible loss to the Holder from the receipt of a cash payment without the opportunity to convert this Note into
shares of Common Stock.
4.8 Purchase Agreement. By its acceptance of this Note, each party agrees to be bound by the applicable terms of the Purchase Agreement.
4.9 Notice of Corporate Events. Except as otherwise provided below, the Holder of this Note shall have no rights as a Holder of Common Stock unless and only to the extent that it converts this Note into
Common Stock. The Borrower shall provide the Holder with prior notification of any meeting of the Borrower’s shareholders (and copies of proxy materials and other information sent to shareholders). In
the event of any taking by the Borrower of a record of its shareholders for the purpose of determining shareholders who are entitled to receive payment of any dividend or other distribution, any right to
subscribe for, purchase or otherwise acquire (including by way of merger, consolidation, reclassification or recapitalization) any share of any class or any other securities or property, or to receive any other
right, or for the purpose of determining shareholders who are entitled to vote in connection with any proposed sale, lease or conveyance of all or substantially all of the assets of the Borrower or any
proposed liquidation, dissolution or winding up of the Borrower, the Borrower shall mail a notice to the Holder, at least twenty (20) days prior to the record date specified therein (or thirty (30) days prior to
the consummation of the transaction or event, whichever is earlier), of the date on which any such record is to be taken for the purpose of such dividend, distribution, right or other event, and a brief
statement regarding the amount and character of such dividend, distribution, right or other event to the extent known at such time. The Borrower shall make a public announcement of any event requiring
notification to the Holder hereunder substantially simultaneously with the notification to the Holder in accordance with the terms of this Section 4.9.
4.10 Remedies. The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder, by vitiating the intent and purpose of the transaction contemplated
hereby. Accordingly, the Borrower acknowledges that the remedy at law for a breach of its obligations under this Note will be inadequate and agrees, in the event of a breach or threatened breach by the
Borrower of the provisions of this Note, that the Holder shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or
injunctions restraining, preventing or curing any breach of this Note and to enforce specifically the terms and provisions thereof, without the necessity of showing economic loss and without any bond or
other security being required.
IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly authorized officer this September 21, 2012.
ENTEST BIOMEDICAL, INC.
By: /s /David Koos
DAVID KOOS
Chief Executive Officer
EXHIBIT 10.39
LINE OF CREDIT PROMISSORY NOTE
$700,000 Date: June 10, 2012
FOR VALUE RECEIVED, Entest BioMedical Inc. , ("Borrower") promises to pay to the order of the Sherman Family Trust ("Lender") the principal sum of Seven Hundred Thousand
Dollars ($700,000), or so much thereof as may be disbursed to, or for the benefit of the Borrower by Lender in Lender's sole and absolute discretion. It is the intent of the Borrower and
Lender hereunder to create a line of credit agreement between Borrower and Lender whereby Borrower may borrow up to $ 700,000 from Lender. This agreement shall also be the terms
and conditions of any and all borrowed amounts outstanding as of this date.
INTEREST & PRINCIPAL: The unpaid principal of this line of credit shall bear simple interest at the rate of ten percent (10%) per annum. Interest shall be 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.
REPRESENTATIONS AND WARRANTIES OF BORROWER
Borrower (a) is a corporation duly formed, validly existing and in good standing under the laws of the State of Nevada and (b) has all requisite power and authority, and has all
governmental licenses, authorizations, consents and approvals necessary to execute and deliver this Agreement and to consummate the transactions contemplated by this Agreement.
None of the execution, delivery and performance of this Agreement by Borrower, or the consummation of the transactions contemplated hereby and thereby (a) constitute or will
constitute a violation of the organizational documents of Borrower, (b) constitutes or will constitute a breach or violation of, or a default (or an event which, with notice or lapse of time or
both, would constitute such a default) under, any indenture, mortgage, deed of Borrower, loan agreement, lease or other agreement or instrument to which Borrower is a party or by which
Borrower or any of its properties may be bound
BORROWER:
By: /s/ David Koos
Its: CEO
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Shares of CirTran Beverage Corporation and CirTran Corporation (OTCQB: CIRC) are currently trading up 35%
Find out where these companies are headed along with other active movers: http://tradernewsletters.com/
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Associated Documentation:Link to submission on http://www.eteligis.comTradernewsletters.com_1-31-13_SMU_2.docx
Copyright eTeligis Inc. 2013. All rights reserved.
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INDUSTRY KEYWORD: BEVERAGES
ENTERTAINMENT
FOODS
INVESTMENT OPINION
SUBJECT CODE: ANA
ECR
RES
STK
-------------------------------------------------
Case Information Summary for Case Number
2012-L-012181
Filing Date: 11/26/2012 Case Type: INJUNCTION
Division: Chancery Division District: First Municipal
Ad Damnum: $0.00 Calendar: 15
Party Information
Plaintiff(s) Attorney(s)
PLAY BEVERAGES LLC GRIPPO ELDEN
111 SOUTH WACKER DR
CHICAGO IL, 60606
(312) 704-7700
CIRTRAN BEVERAGE CORP
Date of Service Defendant(s) Attorney(s)
COOPERSMITH RON
ESEBAG JIMMY
LEVIN PAUL
PLAYBOY ENTERPRISES INTER KATTEN MUCHIN ROSENMAN LL
525 W MONROE STREET
CHICAGO IL, 60661
(312) 902-5200
REDI FZE
RLC PARTNERS LLC
UNITED LICENSING GROUP
Case Activity
Activity Date: 11/26/2012 Participant: PLAY BEVERAGES LLC
INJUNCTION COMPLAINT FILED
Attorney: GRIPPO ELDEN
Activity Date: 11/26/2012 Participant: PLAY BEVERAGES LLC
CASE SET ON CASE MANAGEMENT CALL
Date: 5/28/2013
Court Time: 1030
Court Room: 2410
Judge: PANTLE, KATHLEEN M.
Attorney: GRIPPO ELDEN
Activity Date: 11/26/2012 Participant: PLAY BEVERAGES LLC
TRANSFER FILE INTO DIVISION - ALLOWED -
Court Room: 2403
Judge: JACOBIUS, MOSHE
Activity Date: 11/26/2012 Participant: PLAY BEVERAGES LLC
RETURN FOR RANDOM ASSIGNMENT
Court Room: 2403
Judge: JACOBIUS, MOSHE
Activity Date: 11/26/2012 Participant: PLAY BEVERAGES LLC
ASSIGN TO JUDGE WITHIN DIVISION
Court Room: 2403
Judge: JACOBIUS, MOSHE
Activity Date: 11/27/2012 Participant: PLAYBOY ENTERPRISES INTER
SUMMONS - RETD P.S.
Date: 11/20/2012
Activity Date: 12/18/2012 Participant: PLAYBOY ENTERPRISES INTER
MOTION SCHEDULED (MOTION COUNTER ONLY)
Date: 12/27/2012
Court Time: 0930
Attorney: KATTEN MUCHIN ROSENMAN LL
Activity Date: 12/18/2012 Participant: PLAYBOY ENTERPRISES INTER
MOTION SCHEDULED (MOTION COUNTER ONLY)
Date: 12/27/2012
Court Time: 0930
Attorney: KATTEN MUCHIN ROSENMAN LL
Activity Date: 12/18/2012 Participant: PLAYBOY ENTERPRISES INTER
***ADD ADDITIONAL PARTY(SET FOR MOTION HEARING)
Attorney: KATTEN MUCHIN ROSENMAN LL
Activity Date: 12/18/2012 Participant: PLAYBOY ENTERPRISES INTER
***DISMISS(SET FOR MOTION HEARING)
Attorney: KATTEN MUCHIN ROSENMAN LL
Activity Date: 12/18/2012 Participant: PLAYBOY ENTERPRISES INTER
***MISC.MOTION(SET FOR MOTION HEARING)
Attorney: KATTEN MUCHIN ROSENMAN LL
Activity Date: 12/18/2012 Participant: PLAYBOY ENTERPRISES INTER
APPEARANCE FILED - FEE PAID - (JURY DEMAND)
Court Fee: 436.00
Attorney: KATTEN MUCHIN ROSENMAN LL
Activity Date: 12/18/2012 Participant: PLAYBOY ENTERPRISES INTER
EXHIBITS FILED
Attorney: KATTEN MUCHIN ROSENMAN LL
Activity Date: 12/18/2012 Participant: PLAYBOY ENTERPRISES INTER
EXHIBITS FILED
Attorney: KATTEN MUCHIN ROSENMAN LL
Activity Date: 12/18/2012 Participant: PLAYBOY ENTERPRISES INTER
NOTICE OF MOTION FILED
Attorney: KATTEN MUCHIN ROSENMAN LL
Activity Date: 12/18/2012 Participant: PLAYBOY ENTERPRISES INTER
PROOF OF SERVICE FILED
Attorney: KATTEN MUCHIN ROSENMAN LL
Activity Date: 12/18/2012 Participant: PLAYBOY ENTERPRISES INTER
MOTION FILED
Attorney: KATTEN MUCHIN ROSENMAN LL
Activity Date: 12/27/2012 Participant: PLAYBOY ENTERP ISES INTER
FILE APPEARANCE OR JURY DEMAND, ANSWER OR PLEAD - ALLOWED -
Court Room: 2410
Judge: PANTLE, KATHLEEN M.
Activity Date: 12/27/2012 Participant: PLAY BEVERAGES LLC
FILE APPEARANCE OR JURY DEMAND, ANSWER OR PLEAD - ALLOWED -
Court Room: 2410
Judge: PANTLE, KATHLEEN M.
Activity Date: 12/27/2012 Participant: PLAYBOY ENTERP ISES INTER
SET BRIEFING SCHEDULE - ALLOWED -
Court Room: 2410
Judge: PANTLE, KATHLEEN M.
Activity Date: 12/27/2012 Participant: PLAYBOY ENTERP ISES INTER
STRIKE OR WITHDRAW COMPLAINT, AMENDED COMPLAINT OR PORTION THEREOF - CNT -
Date: 2/7/2013
Court Time: 1030
Court Room: 2410
Judge: PANTLE, KATHLEEN M.
Activity Date: 1/4/2013 Participant: PLAYBOY
APPEARANCE FILED - NO FEE PAID -
Attorney: APRATI JEFFERY R
Activity Date: 1/4/2013 Participant: PLAYBOY
APPEARANCE FILED - NO FEE PAID -
Attorney: CAFFREY JOHN R
Activity Date: 1/4/2013 Participant: PLAYBOY
APPEARANCE FILED - NO FEE PAID -
Attorney: THOMAS HOWARD VINCENT
$CIRC just bought in, great looking play.
$WGAS looks like we're at bottom Lots of positive speculation here, I'm in.
$VNDB 199,472,300-shares-(@.0002) x 4,125,200-shares-(@.0003) LOL! -updated 2 minutes ago!
This is my last post of the day guys but believe me this is about to SKY ROCKET!!! $VNDB short squeeze imminent!
Update on L2: 865,000-shares-(@.0003) x 71,550,000-shares-(@.0003)
They are trying to cover almost 200,000,000 shares at .0002 so make them pay! See you tomorrow folks (and heck, grab as many as you can at .0002 if you can get them)! Go $VNDB SHORT SQUEEZE COMING !!!!
VNDB on SHO list for failure to deliver: http://www.nasdaqtrader.com/Trader.aspx?id=RegSHOThreshold
#2 stock on OTC Short Report Site: http://otcshortreport.com/vndb
$VNDB 700,000,000+ shares shorted since Jan 1st! http://otcshortreport.com/vndb
$VNDB on Reg-SHO LIST! Confirmed buy @ .0002 followers!
See here:
http://www.nasdaqtrader.com/Trader.aspx?id=RegSHOThreshold
Remember what happened with our last 3 Reg-SHO plays: up 100%-500% 1-2 days afterwards!
First thing I do every morning is look at what stocks sharky's in LOL Keep it up buddy, I'm watching and I will bring my followers to any good plays you have going on
! *p.s., I like bottom plays* Not necessarily saying this one but I'm just commenting. $ACYD hope you guys are up big over here!
My..thoughts..exactly.. this might have been organized criminal shorting! Looking at the 5-year history this stock has NEVER been this low.. I'm not saying to buy here because it could dip even lower tomorrow on a Friday sell-off/criminal shorting but hey, if it reaches $1.00 I'm buying no matter what LOL! Shorts get caught eventually, and this isn't the end of the world news it has to bounce at some point.
I agree with you buddy. Right now me and my followers are up pretty squarely from .0011 Personally, I sold some at .0018 and a couple at .0023, I'm holding on to the rest through today and will let them go tomorrow by end-of-day if nothing happens. It was a good run though and I'll buy back if it dips to .0011 again in the future Let's see where it goes, if it goes up today/tomorrow then I'll still be holding at least until .005
Something..tells..me..CLSN..was..hacked.. I think someone did this on purpose LOL because I just tried to confirm all of these PR's and nothing is adding up. Could it have been a brazen move from some oversea hooligans?! I don't know but I'm definitely buying if it hits $1.00
$COWI..come..on..man, give me those .0002's already LOL ! You keep jumping over my bid for some hooligans haha!
Keeping an eye on this one folks. Please don't buy it unless you get an alert from me as I don't want anyone getting trapped. Wait until it goes past .001 and if it does then a buy is confirmed
-moneyduh
Always Making You Cash on my Alerts
Thinking there might be an end-of-day run? What do you guys think? I might sell on Friday but I'm just being honest with my followers as if you don't make money then neither do I Gonna give it one more day here and then move on to another play for all of my loyal followers! And if you aren't following me already join us in the money making madness http://investorshub.advfn.com/boards/profilea.aspx?user=373707
$IRBL 2,110,000(@.0005) x 304,800(@.0007) GETTING EXCITING HERE FOLKS! Someone knows something, the secret is out! GREEN up 100%!
$IRBL 1,210,000(@0.0005) x 304,800(@.0007) 1,350,000 just bought on ask!
BOOM! SOMEONE'S BUYING BIG TIME! It's getting thinner...You're absolutely right. With everything going on in Syria $IRBL could be ready to explode. Thanks for reminding me that it's an Israeli National Security play. STT radio sent it flying last year on speculation alone. Let's see how far it goes this year. It ran around this time last year so we might be in for a surprise.
$IRBL 1,210,000 (@0.0005) x 500,000 (@.0006)
Thinking alike! This could go parabolic..any..day..now CliffRaRaRa86 . Mysterious buying patterns all of a sudden out of nowhere.. this ran hard last year to .009 and I think it just may be that time of the year again for $IRBL That's 1,500%-1,800% from these levels! I think we may be at the beginning of an epic run here
I'm going to watch it for a couple days before I alert it.
$ENTB GREEN! Buy today for big run tomorrow!
This is my last post of the day but make sure to read my latest posts! $ENTB going up 100% minimum tomorrow! Weeeeeeeeeeeee !
Don't be fooled by the same fools leaving negative comments, they need to cover 70,000,000 shares by tomorrow!
.0016 almost gone!!! We're going up big today !
BIG BUYS COMING IN !!! Let's..do..this..people!
Tick..tock..1..day..left..shorty
$SWVI I just got out. BE CAREFUL GUYS!
You know APS tends to dump in this area till we hit .07/.10 so just play it safe with your money in this zone, ESPECIALLY if you're a day trader like myself..
$NTEK is the magic coming back? I hope we're not just going to bounce of .02's and go right back down smh. Keeping one eye over here and one eye on my other plays. GLTA.
Told you so guys! Look at this L2 image!
Notice everytime it gets closer and closer to .0037 they cover immediately! 9,000,000 share covers (that's over $32,000 USD!!!), 1,000,000+ & another consecutive 1,000,000+ covers! Guys let's keep it up, they are going to be bankrupt and the pressure is on! They're pulling out all the tricks today! 500,000,000+ shares need to be covered by EOD tomorrow! No 2 ways about it! $BMSN JUST LOOK AT THE DIFFERENCE IN VOLUME IN THE LAST TWO DAYS IN THAT CHART!!! It speaks for itself, don't need a glass ball for that!
Damn it, will you give me .0001 already LOL!
Trying to get in here for the dead cat bounce.
Lots going to be running to $ENTB once they realize this is the safer play! We're still only in the mid .001's lol! If they put just 1/2 of the money they put into $BMSN over here we'd be up 1,000% today but #OWell you just can't get some folks to listen & they do what they want lol. Either way $ENTB is rocking the house!
They're trying to keep it under .0037 so their accounts won't be negative and they won't have to owe millions of dollars TOMORROW, if we can push it past .0037 and keep it there, we zero their accounts and kick them the hell out of the game! Tomorrow will be BOOMING! Shorts can't handle the pressure! Time to reload! Make them pay! This small victory will put some of these folks who think they're so smart in DEBT OVER THEIR EYEBALLS! Let's get them off ihub and bankrupt them! The less shorts on ihub the more money and dependability in our stock plays! Get them guys! Get rid of them today! They only have 1 more day to play games!
Shorts desperate! Gambling entire accounts..to..short..1..day..before..EOM! HAHA BRING IT!!!