Notes
to Condensed Consolidated Financial Statements
As
of December 31, 2021
NOTE
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The
Company was organized April 24, 2012 under the laws of the State of Nevada
The
Company intends to engage primarily in the development of regenerative medical applications which we intend to license from other entities
up to the point of successful completion of Phase I and or Phase II clinical trials after which we would either attempt to sell or license
those developed applications or, alternatively, advance the application further to Phase III clinical trials.
The
Company is currently engaged in actively identifying small molecules that inhibit or express NR2F6 leading to immune cell activation
for oncology applications and immune cell suppression for autoimmune disease.
The
Company is in the early stages of development of its proposed products and therapies. The Company will be required to obtain approval
from the FDA in order to market any of The Company’s products or therapies. No approval has been granted by the FDA for the marketing
and sale of any of the Company’s products and therapies and no assurance may be given that any of the Company’s products
or therapies will be granted such approval. The Company’s current plans include the development of regenerative medical applications
up to the point of successful completion of Phase I and/ or Phase II clinical trials after which the Company would either attempt to
sell or license those developed applications or, alternatively, advance the application further to Phase III clinical trials. The Company
can provide no assurance that the Company will be able to sell or license any product or that, if such product is sold or licensed, such
sale or license will be on terms favorable to the Company.
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 a September 30 year-end.
B.
PRINCIPLES OF CONSOLIDATION
The
consolidated financial statements include the accounts of KCL Therapeutics, Inc., a Nevada corporation and wholly owned subsidiary of
Regen. Significant inter-company transactions have been eliminated.
The
Company analyzes the conversion feature of Convertible Notes for derivative accounting consideration under ASC 815-15 “Derivatives
and Hedging. ASC 815-15 requires that the conversion features are bifurcated and separately accounted for as an embedded derivative contained
in the Company’s convertible debt. The embedded derivative is carried on the balance sheet at fair value. Any unrealized change
in fair value, as determined at each measurement period, is recorded as a component of the income statement and the associated carrying
amount on the balance sheet is adjusted by the change. The Company values the embedded derivative using the Black-Scholes pricing model.
The
Black Scholes pricing model used to determine the Derivative Liability on convertible notes issued by the Company in which an embedded
derivative is recognized as of December 31, 2021 utilized the following inputs:
|
Schedule of Derivative Liability
|
|
|
|
|
|
Risk
Free Interest Rate
|
|
|
1.49
|
%
|
|
Expected
Term
|
|
|
.(0.66)
– (1.85) Yrs
|
|
|
Expected
Volatility
|
|
|
824.95
|
%
|
|
Expected
Dividends
|
|
|
|
|
H.
INCOME TAXES
The
Company accounts for income taxes using the liability method prescribed by ASC 740, “Income Taxes.” Under this method, deferred
tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities
using enacted tax rates that will be in effect in the year in which the differences are expected to reverse. The Company records a valuation
allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or
all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized as income or
loss in the period that includes the enactment date.
The
Company applied the provisions of ASC 740-10-50, “Accounting For Uncertainty In Income Taxes”, which provides clarification
related to the process associated with accounting for uncertain tax positions recognized in our financial statements. Audit periods remain
open for review until the statute of limitations has passed. The completion of review or the expiration of the statute of limitations
for a given audit period could result in an adjustment to the Company’s liability for income taxes. Any such adjustment could be
material to the Company’s results of operations for any given quarterly or annual period based, in part, upon the results of operations
for the given period. As of September 30, 2021 the Company had no uncertain tax positions, and will continue to evaluate for uncertain
positions in the future.
The
Company generated a deferred tax credit through net operating loss carry forward. However, a valuation allowance of 100% has been
established.
Interest
and penalties on tax deficiencies recognized in accordance with ACS accounting standards are classified as income taxes in accordance
with ASC Topic 740-10-50-19.
I.
BASIC EARNINGS (LOSS) PER SHARE
The
Financial Accounting Standards Board (FASB) issued Accounting Standards Codification (ASC) 260, “Earnings Per Share”, which
specifies the computation, presentation and disclosure requirements for earnings (loss) per share for entities with publicly held common
stock. ASC 260 requires the presentation of basic earnings (loss) per share and diluted earnings (loss) per share. The Company has adopted
the provisions of ASC 260 effective from inception.
Basic
net loss per share amounts is computed by dividing the net income by the weighted average number of common shares outstanding.
J. ADVERTISING
Costs
associated with advertising are charged to expense as incurred. Advertising expenses were $0 for the quarters ended December 31,2020 and
December 31, 2021..
K.
NOTES RECEIVABLE
Notes
receivable are stated at cost, less impairment, if any.
As
of December 31,2021 the Company has the following Notes Receivable
|
Schedule of notes receivable
|
|
|
|
|
|
Zander
Therapeutics, Inc.
|
|
$
|
5,396
|
|
$5,396
owed to the Company by Zander Therapeutics, Inc. bears simple interest at 10% and is due upon the demand of the Company.
L.
REVENUE RECOGNITION
Sales
of products and related costs of products sold are recognized when: (i) persuasive evidence of an arrangement exists; (ii) delivery has
occurred; (iii) the price is fixed or determinable; and (iv) collectability is reasonably assured. These terms are typically met upon
the prepayment or invoicing and shipment of products.
The
Company determines the amount and timing of royalty revenue based on its contractual agreements with intellectual property licensees.
The Company recognizes royalty revenue when earned under the terms of the agreements and when the Company considers realization of payment
to be probable. Where royalties are based on a percentage of licensee sales of royalty-bearing products, the Company recognizes royalty
revenue by applying this percentage to the Company’s estimate of applicable licensee sales. The Company bases this estimate on
an analysis of each licensee’s sales results. Where warranted, revenue from licensees for contractual obligations such as License
Initiation Fees are recognized upon satisfaction of all conditions required to be satisfied in order for that revenue to have been earned
by the Company.
M.
INTEREST RECEIVABLE
Interest
receivable is stated at cost, less impairment, if any.
NOTE
2. RECENT ACCOUNTING PRONOUNCEMENTS
In
June 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-10, which eliminated certain financial
reporting requirements of companies previously identified as “Development Stage Entities” (Topic 915). The amendments in
this ASU simplify accounting guidance by removing all incremental financial reporting requirements for development stage entities. The
amendments also reduce data maintenance and, for those entities subject to audit, audit costs by eliminating the requirement for development
stage entities to present inception-to-date information in the statements of income, cash flows, and shareholder equity. Early application
of each of the amendments is permitted for any annual reporting period or interim period for which the entity’s financial statements
have not yet been issued (public business entities) or made available for issuance (other entities). Upon adoption, entities will no
longer present or disclose any information required by Topic 915. The Company has adopted this standard.
As
of the fiscal year ending September 30, 2019 the Company has adopted Accounting Standards Update 2014-09, Revenue from Contracts with
Customers (Topic 606). The guidance in this Update supersedes the revenue recognition requirements in Topic 605, Revenue Recognition,
and most industry-specific guidance throughout the Industry Topics of the Codification.
The
core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers
in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve
that core principle, an entity should apply the following steps: Step 1: Identify the contract(s) with a customer. Step 2: Identify the
performance obligations in the contract. Step 3: Determine the transaction price. Step 4: Allocate the transaction price to the performance
obligations in the contract. Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.
In
June 2014, FASB issued Accounting Standards Update (ASU) No. 2014-12 Compensation — Stock Compensation (Topic 718), Accounting
for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period.
A performance target in a share-based payment that affects vesting and that could be achieved after the requisite service period should
be accounted for as a performance condition under Accounting Standards Codification (ASC) 718, Compensation — Stock Compensation.
As a result, the target is not reflected in the estimation of the award’s grant date fair value. Compensation cost would be recognized
over the required service period, if it is probable that the performance condition will be achieved. The guidance is effective for annual
periods beginning after 15 December 2015 and interim periods within those annual periods. Early adoption is permitted. The Company has
reviewed the applicable ASU and has not, at the current time, quantified the effects of this pronouncement, however it believes that
there will be no material effect on the consolidated financial statements.
In
August2014, FASB issued Accounting Standards Update (ASU) No. 2014-15 Preparation of Financial Statements – Going Concern (Subtopic
205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. Under generally accepted accounting
principles (GAAP), continuation of a reporting entity as a going concern is presumed as the basis for preparing financial statements
unless and until the entity’s liquidation becomes imminent. Preparation of financial statements under this presumption is commonly
referred to as the going concern basis of accounting. If and when an entity’s liquidation becomes imminent, financial statements
should be prepared under the liquidation basis of accounting in accordance with Subtopic 205-30, Presentation of Financial Statements—Liquidation
Basis of Accounting. Even when an entity’s liquidation is not imminent, there may be conditions or events that raise substantial
doubt about the entity’s ability to continue as a going concern. In those situations, financial statements should continue to be
prepared under the going concern basis of accounting, but the amendments in this Update should be followed to determine whether to disclose
information about the relevant conditions and events. The amendments in this Update are effective for the annual period ending after
December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company will evaluate the
going concern considerations in this ASU, however, at the current period, management does not believe that it has met the conditions
which would subject these financial statements for additional disclosure.
On
January 31, 2013, the FASB issued Accounting Standards Update [ASU] 2013-01, entitled Clarifying the Scope of Disclosures about Offsetting
Assets and Liabilities. The guidance in ASU 2013-01 amends the requirements in the FASB Accounting Standards Codification [FASB ASC]
Topic 210, entitled Balance Sheet. The ASU 2013-01 amendments to FASB ASC 210 clarify that ordinary trade receivables and receivables
in general are not within the scope of ASU 2011-11, entitled Disclosure about Offsetting Assets and Liabilities, where that ASU amended
the guidance in FASB ASC 210. As those disclosures now are modified with the ASU 2013-01 amendments, the FASB ASC 210 balance sheet offsetting
disclosures now clearly are applicable only where reporting entities are involved with bifurcated embedded derivatives, repurchase agreements,
reverse repurchase agreements, and securities borrowing and lending transactions that either are offset using the FASB ASC 210 or 815
requirements, or that are subject to enforceable master netting arrangements or similar agreements. ASU 2013-01 is effective for annual
reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The adoption of this ASU is
not expected to have a material impact on our financial statements.
On
February 28, 2013, the FASB issued Accounting Standards Update [ASU] 2013-04, entitled Obligations Resulting from Joint and Several Liability
Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date. The ASU 2013-04 amendments add to the guidance
in FASB Accounting Standards Codification [FASB ASC] Topic 405, entitled Liabilities and require reporting entities to measure obligations
resulting from certain joint and several liability arrangements where the total amount of the obligation is fixed as of the reporting
date, as the sum of the following:
The
amount the reporting entity agreed to pay on the basis of its arrangement among co-obligors.
Any
additional amounts the reporting entity expects to pay on behalf of its co-obligors.
While
early adoption of the amended guidance is permitted, for public companies, the guidance is required to be implemented in fiscal years,
and interim periods within those years, beginning after December 15, 2013. The amendments need to be implemented retrospectively to all
prior periods presented for obligations resulting from joint and several liability arrangements that exist at the beginning of the year
of adoption. The adoption of ASU 2013-04 is not expected to have a material effect on the Company’s operating results or financial
position.
On
April 22, 2013, the FASB issued Accounting Standards Update [ASU] 2013-07, entitled Liquidation Basis of Accounting. With ASU 2013-07,
the FASB amends the guidance in the FASB Accounting Standards Codification [FASB ASC] Topic 205, entitled Presentation of Financial Statements.
The amendments serve to clarify when and how reporting entities should apply the liquidation basis of accounting. The guidance is applicable
to all reporting entities, whether they are public or private companies or not-for-profit entities. The guidance also provides principles
for the recognition of assets and liabilities and disclosures, as well as related financial statement presentation requirements. The
requirements in ASU 2013-07 are effective for annual reporting periods beginning after December 15, 2013, and interim reporting periods
within those annual periods. Reporting entities are required to apply the requirements in ASU 2013-07 prospectively from the day that
liquidation becomes imminent. Early adoption is permitted. The adoption of ASU 2013-07 is not expected to have a material effect on the
Company’s operating results or financial position.
In
January 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) 2016-01, which amends
the guidance in U.S. GAAP on the classification and measurement of financial instruments. Changes to the current guidance primarily affect
the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements
for financial instruments. In addition, the ASU clarifies guidance related to the valuation allowance assessment when recognizing deferred
tax assets resulting from unrealized losses on available-for-sale debt securities. The new standard is effective for fiscal years and
interim periods beginning after December 15, 2017, and upon adoption, an entity should apply the amendments by means of a cumulative-effect
adjustment to the balance sheet at the beginning of the first reporting period in which the guidance is effective. Early adoption is
not permitted except for the provision to record fair value changes for financial liabilities under the fair value option resulting from
instrument-specific credit risk in other comprehensive income. The Company adopted ASU 2016-01 as of the fiscal year ending September
30, 2019.
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
3. 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 $20,703,920 during the period from April 24, 2012 (inception) through December 31, 2021. This condition raises substantial
doubt about the Company’s ability to continue as a going concern. The Company’s continuation as a going concern is dependent
on its ability to meet its obligations, to obtain additional financing as may be required and ultimately to attain profitability. The
financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Management
plans to raise additional funds by offering securities for cash. Management has yet to decide what type of offering the Company will
use or how much capital the Company will raise.
NOTE
4. NOTES PAYABLE
(a)
RELATED PARTY
|
Schedule of notes payable related party
|
|
|
|
|
|
As
of December 31, 2021
|
|
David
Koos
|
|
$
|
227
|
|
|
Total:
|
|
$
|
227
|
|
$227
lent to the Company by David Koos is due and payable at the demand of the holder and bears simple interest at a rate of 15% per annum.
(b)
NON RELATED PARTY
|
Schedule of non related party
|
|
|
|
|
|
Coventry
Enterprises LLC,
|
|
$
|
1,500,000
|
|
|
Total:
|
|
$
|
1,500,000
|
|
On
September 17,2021 the “Company” issued a promissory note in the principal amount of $1,500,000 ( “Note”) of which
$75,000 was retained by the Holder through an Original Issue Discount (“OID”) for due diligence and origination related to
this transaction and Thirty-five Thousand Dollars $35,000 was remitted by the Holder, at the instance and on behalf of the Company, directly
to Holder’s counsel for documentation preparation fees resulting in net consideration paid to the Company of $1,390,000.
The
Note carries “Guaranteed Interest” on the principal amount at the rate of 5% per annum for the ten-month term of this Note
for an aggregate Guaranteed Interest $62,500 all of which Guaranteed Interest shall be deemed earned as of September 17, 2021.
The
Principal Amount and the Guaranteed Interest shall be due and payable in five equal monthly payments of $312,500 commencing on March
17, 2022 and continuing on the 17th day of each month thereafter until paid in full not later than July 18, 2022 (the “Maturity
Date”).
Solely
following an Event of Default (as such term is defined in the Note) the Note shall become convertible, in whole or in part, into shares
of Common Stock at the option of the Holder. The conversion price of the Note is 90% of the lowest per-share Trading Price per share.
Trading Price is defined as the lowest daily VWAP for the 20 Trading Days preceding a Conversion Date. VWAP is defined as the dollar
volume-weighted average price for the common shares as reported by Bloomberg.
The
OID is being amortized by the Company over the term of the Note. As of December 31 ,2021 the unamortized discount on this Note is $48,597.
NOTE
5. CONVERTIBLE NOTES PAYABLE
On
March 8, 2016 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $100,000 for
consideration consisting of $100,000 cash. The Note pays simple interest in the amount of 8% per annum . The maturity of the Note is
three years from the issue date.
The
Lender shall have the right from time to time to convert all or a 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 Company into which such Common Stock shall hereafter be changed or reclassified pursuant to the following
terms and conditions:
(a)
For the period beginning on the Issue Date and ending 365 days subsequent to the Issue Date (“Year 1”) a 50% discount to
the lowest Trading Price (as defined below) for the Common Stock during the ten (10) Trading Day (as defined below) period ending on
the latest complete Trading Day prior to the Conversion Date or ten cents per share (whichever is greater).
(b)
For the period beginning one day subsequent to the final day of Year One and ending 365 days subsequent to Year One (“Year 2”)
a 35% discount to the lowest Trading Price (as defined below) for the Common Stock during the ten (10) Trading Day (as defined below)
period ending on the latest complete Trading Day prior to the Conversion Date or ten cents per share (whichever is greater).
(c)
For the period beginning one day subsequent to the final day of Year 2 and ending 365 days subsequent to Year 2 (“Year 3”)
a 25% discount to the lowest Trading Price (as defined below) for the Common Stock during the ten (10) Trading Day (as defined below)
period ending on the latest complete Trading Day prior to the Conversion Date or ten cents per share (whichever is greater).
(d)
“Trading Price” means 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 Lender (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 Company and the Lender. “Trading Day”
shall mean 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. “Trading Volume” shall mean the number of shares traded
on such Trading Day as reported by such Reporting Service. The Conversion Price shall be equitably adjusted for stock splits, stock dividends,
rights offerings, combinations, recapitalization, reclassifications, extraordinary distributions and similar events by the Company relating
to the Lender’s securities.
The
Company shall have the right, exercisable on not less than five (5) Trading Days prior written notice to the Lender, to prepay the outstanding
Note in part or in full, including outstanding principal and accrued interest.
Upon
closing of a Transaction Event the Lender shall receive 0 .10% ( one tenth of one percent)of the consideration actually received by the
Company from an unaffiliated third party as a result of the closing of a Transaction Event.
“Transaction
Event” shall mean either of:
(a)
The sale by the Company of the Company’s proprietary NR2F6 intellectual property to an unaffiliated third party
(b)
The granting of a license by the Company to an unaffiliated third party granting that unaffiliated third party the right to develop and/or
commercialize the Company’s proprietary NR2F6 intellectual property
The
issuance of the Note amounted in a beneficial conversion feature of $42,600 which is amortized under the Interest Method over the life
of the Note. As of December 31,2021 the unamortized discount on the convertible note outstanding is $ 0. As of December 31, 2021 $100,000
of the principal amount of the Note remains outstanding.
On
April 6, 2016 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $50,000 for
consideration consisting of $50,000 cash. The Note pays simple interest in the amount of 8% per annum . The maturity of the Note is three
years from the issue date.
The
Lender shall have the right from time to time to convert all or a 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 Company into which such Common Stock shall hereafter be changed or reclassified pursuant to the following
terms and conditions:
(a)
For the period beginning on the Issue Date and ending 365 days subsequent to the Issue Date (“Year 1”) a 50% discount to
the lowest Trading Price (as defined below) for the Common Stock during the ten (10) Trading Day (as defined below) period ending on
the latest complete Trading Day prior to the Conversion Date or ten cents per share (whichever is greater).
(b)
For the period beginning one day subsequent to the final day of Year One and ending 365 days subsequent to Year One (“Year 2”)
a 35% discount to the lowest Trading Price (as defined below) for the Common Stock during the ten (10) Trading Day (as defined below)
period ending on the latest complete Trading Day prior to the Conversion Date or ten cents per share (whichever is greater).
(c)
For the period beginning one day subsequent to the final day of Year 2 and ending 365 days subsequent to Year 2 (“Year 3”)
a 25% discount to the lowest Trading Price (as defined below) for the Common Stock during the ten (10) Trading Day (as defined below)
period ending on the latest complete Trading Day prior to the Conversion Date or ten cents per share (whichever is greater).
(d)
“Trading Price” means 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 Lender (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 Company and the Lender. “Trading Day”
shall mean 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. “Trading Volume” shall mean the number of shares traded
on such Trading Day as reported by such Reporting Service. The Conversion Price shall be equitably adjusted for stock splits, stock dividends,
rights offerings, combinations, recapitalization, reclassifications, extraordinary distributions and similar events by the Company relating
to the Lender’s securities.
The
Company shall have the right, exercisable on not less than five (5) Trading Days prior written notice to the Lender, to prepay the outstanding
Note in part or in full, including outstanding principal and accrued interest.
Upon
closing of a Transaction Event the Lender shall receive 0 .10% ( one tenth of one percent)of the consideration actually received by the
Company from an unaffiliated third party as a result of the closing of a Transaction Event.
“Transaction
Event” shall mean either of:
(a)
The sale by the Company of the Company’s proprietary NR2F6 intellectual property to an unaffiliated third party
(b)
The granting of a license by the Company to an unaffiliated third party granting that unaffiliated third party the right to develop and/or
commercialize the Company’s proprietary NR2F6 intellectual property
The
issuance of the Note amounted in a beneficial conversion feature of $9,900 which is amortized under the Interest Method over the life
of the Note. As of September 30,2021 the unamortized discount on the convertible note outstanding is $0. December 31,2021 $50,000 of
the principal amount of the Note remains outstanding.
On
October 31, 2016 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $50,000
for consideration consisting of $50,000 cash. The Note pays simple interest in the amount of 10% per annum . The maturity of the Note
is two years from the issue date.
The
Lender shall have the right from time to time to convert all or a part of the outstanding and unpaid principal amount of this Note into
fully paid and non- assessable shares of Common Stock and/or Series A Preferred Stock, as such Stock exists on the Issue Date, or any
shares of capital stock or other securities of the Company into which such Stock shall hereafter be changed or reclassified at a conversion
price of $0.0125 per share.
The
Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding
Note in part or in full, including outstanding principal and accrued interest.
The
issuance of the Note amounted in a beneficial conversion feature of $50,000 which is amortized under the Interest Method over the life
of the Note. As of September 30,2021 the unamortized discount on the convertible note outstanding is $0. As of December 31,2021 $50,000
of the principal amount of the Note remains outstanding.
On
October 31, 2016 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $50,000
for consideration consisting of $50,000 cash. The Note pays simple interest in the amount of 10% per annum . The maturity of the Note
is two years from the issue date.
The
Lender shall have the right from time to time to convert all or a part of the outstanding and unpaid principal amount of this Note into
fully paid and non- assessable shares of Common Stock and/or Series A Preferred Stock, as such Stock exists on the Issue Date, or any
shares of capital stock or other securities of the Company into which such Stock shall hereafter be changed or reclassified at a conversion
price of $0.0125 per share.
The
Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding
Note in part or in full, including outstanding principal and accrued interest.
The
issuance of the Note amounted in a beneficial conversion feature of $50,000 which is amortized under the Interest Method over the life
of the Note. As of September 30,2021 the unamortized discount on the convertible note outstanding is $ 0 As of December 31,2021 $50,000
of the principal amount of the Note remains outstanding.
On
October 31, 2016 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $50,000
for consideration consisting of $50,000 cash. The Note pays simple interest in the amount of 10% per annum . The maturity of the Note
is two years from the issue date.
The
Lender shall have the right from time to time to convert all or a part of the outstanding and unpaid principal amount of this Note into
fully paid and non- assessable shares of Common Stock and/or Series A Preferred Stock, as such Stock exists on the Issue Date, or any
shares of capital stock or other securities of the Company into which such Stock shall hereafter be changed or reclassified at a conversion
price of $0.0125 per share.
The Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the
outstanding Note in part or in full, including outstanding principal and accrued interest.
The
issuance of the Note amounted in a beneficial conversion feature of $50,000 which is amortized under the Interest Method over the life
of the Note. As of September 30,2021 the unamortized discount on the convertible note outstanding is $0. As of December 31 ,2021 $50,000
of the principal amount of the Note remains outstanding.
March
13, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $50,000 for consideration
consisting of $50,000 cash. The Note pays simple interest in the amount of 10% per annum . The maturity of the Note is February 24, 2020.
All or part of the principal is convertible at any time at the demand of the Lender into the Common Shares of Regen at a price per share
( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company
on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.0125 per common share.
The
Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding
Note in part or in full, including outstanding principal and accrued interest.
In
the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount
of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received
had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of
$0.05 per share.
The
warrants shall be exercisable:
In
the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary
of the date that the Note shall have been prepaid by the Company(“Prepayment Date”)
In
the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity
Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note.
As
of December 31,2021 $50,000 of the principal amount of the Note remains outstanding.
The
Company analyzed the conversion feature of the Note for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging”
and determined that the embedded conversion feature should be classified as a liability due to their being no explicit limit to the number
of shares to be delivered upon settlement of the above conversion features. ASC 815-15 requires that the conversion features are bifurcated
and separately accounted for as an embedded derivative contained in the Company’s convertible debt. The embedded derivative is
carried on the balance sheet at fair value. Any unrealized change in fair value, as determined at each measurement period, is recorded
as a component of the income statement and the associated carrying amount on the balance sheet is adjusted by the change.
The
Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $204,082 was recognized by
the Company as of December 31, 2021. The issuance of the Note amounted in a discount of $50,000 which is amortized under the Interest
Method over the life of the Note. As of December 31,2021 the unamortized discount on the convertible note outstanding is $0.
On
March 31, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $50,000 for
consideration consisting of $50,000 cash. The Note pays simple interest in the amount of 10% per annum . The maturity of the Note is
March 31, 2020. All or part of the principal is convertible at any time at the demand of the Lender into the Common Shares of Regen at
a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common
stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.0125
per common share.
The
Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding
Note in part or in full, including outstanding principal and accrued interest.
In
the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount
of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received
had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of
$0.05 per share.
The
warrants shall be exercisable:
In
the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary
of the date that the Note shall have been prepaid by the Company(“Prepayment Date”)
In
the event part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity
Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note. As of December
31 ,2021 $50,000 of the principal amount of the Note remains outstanding.
The
Company analyzed the conversion feature of the Note for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging”
and determined that the embedded conversion feature should be classified as a liability due to their being no explicit limit to the number
of shares to be delivered upon settlement of the above conversion features. ASC 815-15 requires that the conversion features are bifurcated
and separately accounted for as an embedded derivative contained in the Company’s convertible debt. The embedded derivative is
carried on the balance sheet at fair value. Any unrealized change in fair value, as determined at each measurement period, is recorded
as a component of the income statement and the associated carrying amount on the balance sheet is adjusted by the change.
The
Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $204,082 was recognized by
the Company as of December 31,2021. The issuance of the Note amounted in a discount of $50,000 which is amortized under the Interest
Method over the life of the Note. As of December 31,2021 the unamortized discount on the convertible note outstanding is $0.
On
April 19, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $50,000 for
consideration consisting of $50,000 cash. The Note pays simple interest in the amount of 10% per annum . The maturity of the Note is
April 19, 2020. All or part of the principal is convertible at any time at the demand of the Lender into the Common Shares of Regen at
a price per share ( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common
stock of the Company on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.0125
per common share.
The
Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding
Note in part or in full, including outstanding principal and accrued interest.
In
the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount
of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received
had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of
$0.05 per share.
The
warrants shall be exercisable:
In
the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary
of the date that the Note shall have been prepaid by the Company(“Prepayment Date”)
In
the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity
Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note
As
of December 31,2021 $50,000 of the principal amount of the Note remains outstanding.
The
Company analyzed the conversion feature of the Note for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging”
and determined that the embedded conversion feature should be classified as a liability due to their being no explicit limit to the number
of shares to be delivered upon settlement of the above conversion features. ASC 815-15 requires that the conversion features are bifurcated
and separately accounted for as an embedded derivative contained in the Company’s convertible debt. The embedded derivative is
carried on the balance sheet at fair value. Any unrealized change in fair value, as determined at each measurement period, is recorded
as a component of the income statement and the associated carrying amount on the balance sheet is adjusted by the change.
The
Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $204,082 was recognized by
the Company as of September 30,2021. The issuance of the Note amounted in a discount of $50,000 which is amortized under the Interest
Method over the life of the Note. As of December 31,2021 the unamortized discount on the convertible note outstanding is $0.
On
May 5, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $200,000 for
consideration consisting of $200,000 cash. The Note pays simple interest in the amount of 10% per annum . The maturity of the Note is
May 5, 2020. The Note is convertible into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent
to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the
date a conversion notice is given by the Lender to Regen or (b) $0.025 per common share as of the date which is the earlier of:
(i) One
day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of
the Company. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions, whether by
merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock of the
relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction
no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.
ii) One
day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority
percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company
tendering a fixed number of their equity securities (“Tender Offer”).
(iii) That
date which is twenty four (24) months subsequent to the date of execution of this Note.
The
Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding
Note in part or in full, including outstanding principal and accrued interest.
In
the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount
of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received
had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of
$0.05 per share.
The
warrants shall be exercisable:
In
the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary
of the date that the Note shall have been prepaid by the Company(“Prepayment Date”)
In
the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity
Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note
As
of December 31,2021 $200,000 of the principal amount of the Note remains outstanding.
The
Company analyzed the conversion feature of the Note for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging”
and determined that the embedded conversion feature should be classified as a liability due to their being no explicit limit to the number
of shares to be delivered upon settlement of the above conversion features. ASC 815-15 requires that the conversion features are bifurcated
and separately accounted for as an embedded derivative contained in the Company’s convertible debt. The embedded derivative is
carried on the balance sheet at fair value. Any unrealized change in fair value, as determined at each measurement period, is recorded
as a component of the income statement and the associated carrying amount on the balance sheet is adjusted by the change.
The
Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $816,327 was recognized by
the Company as of December 31,2021. The issuance of the Note amounted in a discount of $200,000 which is amortized under the Interest
Method over the life of the Note. As of December 31 ,2021 the unamortized discount on the convertible note outstanding is $0.
On June 26, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $150,000
for consideration consisting of $150,000 cash. The Note pays simple interest in the amount of 10% per annum . The maturity of the Note
is June 16, 2020. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent
to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the
date a conversion notice is given by the Lender to Regen or (b) $0.025 per common share as of the date which is the earlier of:
(i) One
day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of
the Company or KCL Therapeutics. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions,
whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock
of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction
no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.
(ii) One
day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority
percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company
tendering a fixed number of their equity securities (“Tender Offer”).
(iv)
One day subsequent to a “Transaction Event”)
Transaction
Event” shall mean either of:
(a)
The sale by the Company or by KCL Therapeutics , Inc. of the Company’s proprietary NR2F6 intellectual property to an unaffiliated
third party
(b)
The granting of a license by the Company or by KCL Therapeutics , Inc to an unaffiliated third party granting that unaffiliated third
party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property
(v)
That date which is twenty four (24) months subsequent to the date of execution of this Note.
The
Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding
Note in part or in full, including outstanding principal and accrued interest.
In
the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount
of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received
had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of
$0.025 per share.
The
warrants shall be exercisable:
In
the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary
of the date that the Note shall have been prepaid by the Company(“Prepayment Date”)
In
the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity
Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note
As
of December 31,2021 $150,000 of the principal amount of the Note remains outstanding.
The
Company analyzed the conversion feature of the Note for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging”
and determined that the embedded conversion feature should be classified as a liability due to their being no explicit limit to the number
of shares to be delivered upon settlement of the above conversion features. ASC 815-15 requires that the conversion features are bifurcated
and separately accounted for as an embedded derivative contained in the Company’s convertible debt. The embedded derivative is
carried on the balance sheet at fair value. Any unrealized change in fair value, as determined at each measurement period, is recorded
as a component of the income statement and the associated carrying amount on the balance sheet is adjusted by the change.
The
Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $612,245 was recognized by
the Company as of December 31,2021. The issuance of the Note amounted in a discount of $150,000 which is amortized under the Interest
Method over the life of the Note. As of December 31,2021 the unamortized discount on the convertible note outstanding is $0.
On September 25, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $50,000
for consideration consisting of $50,000 cash. The Note pays simple interest in the amount of 10% per annum. The maturity of the Note
is September 25, 2020. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”)
equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately
prior to the date a conversion notice is given by the Lender to Regen or (b) $0.0125 per common share as of the date which is the earlier
of:
(i) One
day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of
the Company or KCL Therapeutics. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions,
whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock
of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction
no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.
(ii) One
day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority
percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company
tendering a fixed number of their equity securities (“Tender Offer”).
(iv)
One day subsequent to a “Transaction Event”)
Transaction
Event” shall mean either of:
(a)
The sale by the Company or by KCL Therapeutics , Inc. of the Company’s proprietary NR2F6 intellectual property to an unaffiliated
third party
(b)
The granting of a license by the Company or by KCL Therapeutics , Inc to an unaffiliated third party granting that unaffiliated third
party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property
(v)
That date which is twenty four (24) months subsequent to the date of execution of this Note.
The
Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding
Note in part or in full, including outstanding principal and accrued interest.
In
the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount
of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received
had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of
$0.025 per share.
The
warrants shall be exercisable:
In
the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary
of the date that the Note shall have been prepaid by the Company (“Prepayment Date”)
In
the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity
Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note
As
of December 31, 2021 $50,000 of the principal amount of the Note remains outstanding.
The
Company analyzed the conversion feature of the Note for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging”
and determined that the embedded conversion feature should be classified as a liability due to their being no explicit limit to the number
of shares to be delivered upon settlement of the above conversion features. ASC 815-15 requires that the conversion features are bifurcated
and separately accounted for as an embedded derivative contained in the Company’s convertible debt. The embedded derivative is
carried on the balance sheet at fair value. Any unrealized change in fair value, as determined at each measurement period, is recorded
as a component of the income statement and the associated carrying amount on the balance sheet is adjusted by the change.
The
Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $204,082 was recognized by
the Company as of December 31, 2021. The issuance of the Note amounted in a discount of $50,000 which is amortized under the Interest
Method over the life of the Note. As of December 31,2021 the unamortized discount on the convertible note outstanding is $0.
On
October 3, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $50,000 for
consideration consisting of $50,000 cash. The Note pays simple interest in the amount of 10% per annum. The maturity of the Note is October
3, 2020. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”) equivalent
to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately prior to the
date a conversion notice is given by the Lender to Regen or (b) $0.025 per common share as of the date which is the earlier of:
(i) One
day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of
the Company or KCL Therapeutics. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions,
whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock
of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction
no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.
(ii)
One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority
percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company
tendering a fixed number of their equity securities (“Tender Offer”).
(iv)
One day subsequent to a “Transaction Event”)
Transaction
Event” shall mean either of:
(a)
The sale by the Company or by KCL Therapeutics , Inc. of the Company’s proprietary NR2F6 intellectual property to an unaffiliated
third party
(b)
The granting of a license by the Company or by KCL Therapeutics , Inc to an unaffiliated third party granting that unaffiliated third
party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property
(v)
That date which is twenty four (24) months subsequent to the date of execution of this Note.
The
Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding
Note in part or in full, including outstanding principal and accrued interest.
In
the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount
of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received
had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of
$0.025 per share.
The
warrants shall be exercisable:
In
the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary
of the date that the Note shall have been prepaid by the Company (“Prepayment Date”)
In
the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity
Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note
As
of December 31,2021, $50,000 of the principal amount of the Note remains outstanding.
The
Company analyzed the conversion feature of the Note for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging”
and determined that the embedded conversion feature should be classified as a liability due to their being no explicit limit to the number
of shares to be delivered upon settlement of the above conversion features. ASC 815-15 requires that the conversion features are bifurcated
and separately accounted for as an embedded derivative contained in the Company’s convertible debt. The embedded derivative is
carried on the balance sheet at fair value. Any unrealized change in fair value, as determined at each measurement period, is recorded
as a component of the income statement and the associated carrying amount on the balance sheet is adjusted by the change.
The
Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $204,082 was recognized by
the Company as of December 31,2021. The issuance of the Note amounted in a discount of $50,000 which is amortized under the Interest
Method over the life of the Note. As of December 31,2021 the unamortized discount on the convertible note outstanding is $0.
On
October 16, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $100,000
for consideration consisting of $100,000 cash. The Note pays simple interest in the amount of 10% per annum. The maturity of the Note
is October 9, 2020. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”)
equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately
prior to the date a conversion notice is given by the Lender to Regen or (b) $0.025 per common share as of the date which is the earlier
of:
(i) One
day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of
the Company or KCL Therapeutics. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions,
whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock
of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction
no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.
(ii) One
day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority
percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company
tendering a fixed number of their equity securities (“Tender Offer”).
(iv)
One day subsequent to a “Transaction Event”)
Transaction Event” shall mean either of:
(a)
The sale by the Company or by KCL Therapeutics , Inc. of the Company’s proprietary NR2F6 intellectual property to an unaffiliated
third party
(b)
The granting of a license by the Company or by KCL Therapeutics , Inc to an unaffiliated third party granting that unaffiliated third
party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property
(v)
That date which is twenty four (24) months subsequent to the date of execution of this Note.
The
Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding
Note in part or in full, including outstanding principal and accrued interest.
In
the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount
of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received
had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of
$0.025 per share.
The
warrants shall be exercisable:
In
the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary
of the date that the Note shall have been prepaid by the Company (“Prepayment Date”)
In
the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity
Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note
As
of December 31,2021 $100,000 of the principal amount of the Note remains outstanding.
The
Company analyzed the conversion feature of the Note for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging”
and determined that the embedded conversion feature should be classified as a liability due to their being no explicit limit to the number
of shares to be delivered upon settlement of the above conversion features. ASC 815-15 requires that the conversion features are bifurcated
and separately accounted for as an embedded derivative contained in the Company’s convertible debt. The embedded derivative is
carried on the balance sheet at fair value. Any unrealized change in fair value, as determined at each measurement period, is recorded
as a component of the income statement and the associated carrying amount on the balance sheet is adjusted by the change.
The
Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $408,163 was recognized by
the Company as of December 31,2021. The issuance of the Note amounted in a discount of $100,000 which is amortized under the Interest
Method over the life of the Note. As of December 31,2021 the unamortized discount on the convertible note outstanding is $0.
On November 1, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $25,000
for consideration consisting of $25,000 cash. The Note pays simple interest in the amount of 10% per annum. The maturity of the Note
is November 1, 2020. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”)
equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately
prior to the date a conversion notice is given by the Lender to Regen or (b) $0.025 per common share as of the date which is the earlier
of:
(i) One
day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of
the Company or KCL Therapeutics. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions,
whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock
of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction
no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.
(ii)
One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority
percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company
tendering a fixed number of their equity securities (“Tender Offer”).
(iv)
One day subsequent to a “Transaction Event”)
Transaction
Event” shall mean either of:
(a)
The sale by the Company or by KCL Therapeutics , Inc. of the Company’s proprietary NR2F6 intellectual property to an unaffiliated
third party
(b)
The granting of a license by the Company or by KCL Therapeutics , Inc to an unaffiliated third party granting that unaffiliated third
party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property
(v)
That date which is twenty four (24) months subsequent to the date of execution of this Note.
The
Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding
Note in part or in full, including outstanding principal and accrued interest.
In
the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount
of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received
had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of
$0.025 per share.
The
warrants shall be exercisable:
In
the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary
of the date that the Note shall have been prepaid by the Company (“Prepayment Date”)
In
the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity
Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note
As
of December 31,2021 $25,000 of the principal amount of the Note remains outstanding.
The
Company analyzed the conversion feature of the Note for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging”
and determined that the embedded conversion feature should be classified as a liability due to their being no explicit limit to the number
of shares to be delivered upon settlement of the above conversion features. ASC 815-15 requires that the conversion features are bifurcated
and separately accounted for as an embedded derivative contained in the Company’s convertible debt. The embedded derivative is
carried on the balance sheet at fair value. Any unrealized change in fair value, as determined at each measurement period, is recorded
as a component of the income statement and the associated carrying amount on the balance sheet is adjusted by the change.
The
Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $102,041 was recognized by
the Company as of December 31,2021. The issuance of the Note amounted in a discount of $25,000 which is amortized under the Interest
Method over the life of the Note. As of December 31,2021 the unamortized discount on the convertible note outstanding is $0.
On
November 1, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $25,000
for consideration consisting of $25,000 cash. The Note pays simple interest in the amount of 10% per annum. The maturity of the Note
is November 1, 2020. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”)
equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately
prior to the date a conversion notice is given by the Lender to Regen or (b) $0.025 per common share as of the date which is the earlier
of:
(i) One
day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of
the Company or KCL Therapeutics. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions,
whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock
of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction
no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.
(ii)
One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority
percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company
tendering a fixed number of their equity securities (“Tender Offer”).
(iv)
One day subsequent to a “Transaction Event”)
Transaction
Event” shall mean either of:
(a)
The sale by the Company or by KCL Therapeutics , Inc. of the Company’s proprietary NR2F6 intellectual property to an unaffiliated
third party.
(b)
The granting of a license by the Company or by KCL Therapeutics , Inc to an unaffiliated third party granting that unaffiliated third
party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property.
(v)
That date which is twenty four (24) months subsequent to the date of execution of this Note.
The
Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding
Note in part or in full, including outstanding principal and accrued interest.
In
the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount
of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received
had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of
$0.025 per share.
The
warrants shall be exercisable:
In
the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary
of the date that the Note shall have been prepaid by the Company (“Prepayment Date”)
In
the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity
Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note
As
of December 31,2021 $25,000 of the principal amount of the Note remains outstanding.
The
Company analyzed the conversion feature of the Note for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging”
and determined that the embedded conversion feature should be classified as a liability due to their being no explicit limit to the number
of shares to be delivered upon settlement of the above conversion features. ASC 815-15 requires that the conversion features are bifurcated
and separately accounted for as an embedded derivative contained in the Company’s convertible debt. The embedded derivative is
carried on the balance sheet at fair value. Any unrealized change in fair value, as determined at each measurement period, is recorded
as a component of the income statement and the associated carrying amount on the balance sheet is adjusted by the change.
The
Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $102,041 was recognized by
the Company as of December 31,2021. The issuance of the Note amounted in a discount of $25,000 which is amortized under the Interest
Method over the life of the Note. As of December 31,2021 the unamortized discount on the convertible note outstanding is $0.
On
December 20, 2017 (“Issue date”) the Company issued a Convertible Note (“Note”) in the face amount of $100,000
for consideration consisting of $100,000 cash. The Note pays simple interest in the amount of 10% per annum. The maturity of the Note
is December 20, 2020. The Note may be converted into the Common Shares of Regen at a price per share ( “Conversion Price”)
equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day immediately
prior to the date a conversion notice is given by the Lender to Regen or (b) $0.025 per common share as of the date which is the earlier
of:
(i)
One day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control”
of the Company or KCL Therapeutics. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions,
whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock
of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction
no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.
(ii) One
day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority
percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company
tendering a fixed number of their equity securities (“Tender Offer”).
(iv)
One day subsequent to a “Transaction Event”)
Transaction
Event” shall mean either of:
(a)
The sale by the Company or by KCL Therapeutics , Inc. of the Company’s proprietary NR2F6 intellectual property to an unaffiliated
third party
(b)
The granting of a license by the Company or by KCL Therapeutics , Inc to an unaffiliated third party granting that unaffiliated third
party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property
(v)
That date which is twenty four (24) months subsequent to the date of execution of this Note.
The
Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding
Note in part or in full, including outstanding principal and accrued interest.
In
the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount
of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received
had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of
$0.025 per share.
The
warrants shall be exercisable:
In
the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary
of the date that the Note shall have been prepaid by the Company (“Prepayment Date”)
In
the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity
Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note
As
of December 31,2021 $100,000 of the principal amount of the Note remains outstanding.
The
Company analyzed the conversion feature of the Note for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging”
and determined that the embedded conversion feature should be classified as a liability due to their being no explicit limit to the number
of shares to be delivered upon settlement of the above conversion features. ASC 815-15 requires that the conversion features are bifurcated
and separately accounted for as an embedded derivative contained in the Company’s convertible debt. The embedded derivative is
carried on the balance sheet at fair value. Any unrealized change in fair value, as determined at each measurement period, is recorded
as a component of the income statement and the associated carrying amount on the balance sheet is adjusted by the change.
The
Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $408,163 was recognized by
the Company as of December 31,2021. The issuance of the Note amounted in a discount of $100,000 which is amortized under the Interest
Method over the life of the Note. As of December 31,2021 the unamortized discount on the convertible note outstanding is $0.
On
February 28, 2018 (“Issue date”) the Company issued a two Convertible Notes (“Notes”) in the aggregate face amount
of $100,000 for consideration consisting of $100,000 cash. The Note pays simple interest in the amount of 10% per annum. The maturity
of the Notes is February 28, 2021. The Notes may be converted into the Common Shares of Regen at a price per share ( “Conversion
Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company on the trading day
immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.025 per common share as of the date which
is the earlier of:
(i) One
day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of
the Company or KCL Therapeutics. For purposes of these Notes, a Change of Control shall be defined as any transaction or series of transactions,
whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock
of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction
no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.
(ii) One
day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority
percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company
tendering a fixed number of their equity securities (“Tender Offer”).
(iv)
One day subsequent to a “Transaction Event”)
Transaction
Event” shall mean either of:
(a)
The sale by the Company or by KCL Therapeutics , Inc. of the Company’s proprietary NR2F6 intellectual property to an unaffiliated
third party
(b)
The granting of a license by the Company or by KCL Therapeutics , Inc to an unaffiliated third party granting that unaffiliated third
party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property
(v)
That date which is twenty four (24) months subsequent to the date of execution of this Note.
The
Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding
Notes in part or in full, including outstanding principal and accrued interest.
In
the event that that the Company exercises its right to prepay the notes, or if the Lender chooses not to convert the remaining amount
of the notes into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received
had the Lender converted the remaining amount of the Notes into Common shares of the Company. The warrants shall have a strike price
of $0.025 per share.
The
warrants shall be exercisable:
In
the event that the Company exercises its right to Prepay the Notes on or prior to the close of business on the three (3) month anniversary
of the date that the Notes shall have been prepaid by the Company (“Prepayment Date”).
In
the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity
Date of the Notes, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Notes.
As
of December 31,2021 $100,000 of the principal amount of the Notes remains outstanding.
The
Company analyzed the conversion feature of the Notes for derivative accounting consideration under ASC 815-15 “Derivatives and
Hedging” and determined that the embedded conversion feature should be classified as a liability due to their being no explicit
limit to the number of shares to be delivered upon settlement of the above conversion features. ASC 815-15 requires that the conversion
features are bifurcated and separately accounted for as an embedded derivative contained in the Company’s convertible debt. The
embedded derivative is carried on the balance sheet at fair value. Any unrealized change in fair value, as determined at each measurement
period, is recorded as a component of the income statement and the associated carrying amount on the balance sheet is adjusted by the
change.
The
Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $408,163 was recognized by
the Company as of December 31,2021. The issuance of the Notes amounted in a discount of $100,000 which is amortized under the Interest
Method over the life of the Notes. As of December 31,2021 the unamortized discount on the convertible notes outstanding is $0.
On
July 11, 2018 the Company issued a Convertible Note (“Note”) in the face amount of $11,500 to an entity controlled by the
Company’s then Chief Financial Officer for consideration consisting of $11,500 cash. The Note pays simple interest in the amount
of 10% per annum. The maturity of the Note is May 4, 2021. The Note may be converted into the Common Shares of Regen at a price per share
( “Conversion Price”) equivalent to the lower of (a) a 75% discount to the closing price of the common stock of the Company
on the trading day immediately prior to the date a conversion notice is given by the Lender to Regen or (b) $0.01 per common share as
of the date which is the earlier of:
(i) One
day subsequent to the execution of an agreement to a transaction whose completion would result in a “Change of Control” of
the Company or KCL Therapeutics. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions,
whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding stock
of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of Control transaction
no longer constitute a majority of the Board of Directors of the surviving entity following the closing of such transaction.
(ii)
One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase a majority
percentage of the Company’s outstanding equity securities for a limited period of time contingent on shareholders of the Company
tendering a fixed number of their equity securities (“Tender Offer”).
(iv)
One day subsequent to a “Transaction Event”)
Transaction
Event” shall mean either of:
(a)
The sale by the Company or by KCL Therapeutics , Inc. of the Company’s proprietary NR2F6 intellectual property to an unaffiliated
third party
(b)
The granting of a license by the Company or by KCL Therapeutics , Inc to an unaffiliated third party granting that unaffiliated third
party the right to develop and/or commercialize the Company’s proprietary NR2F6 intellectual property
(v)
That date which is twenty four (24) months subsequent to the date of execution of this Note.
The
Company shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding
Note in part or in full, including outstanding principal and accrued interest.
In
the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the remaining amount
of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares it would have received
had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants shall have a strike price of
$0.01 per share.
The
warrants shall be exercisable:
In
the event that the Company exercises its right to Prepay the Note on or prior to the close of business on the three (3) month anniversary
of the date that the Note shall have been prepaid by the Company (“Prepayment Date”)
In
the event , part of the outstanding and unpaid principal amount of this Note and any Accrued Interest remains outstanding on the Maturity
Date of the Note, or prior to the close of business on the three (3) month anniversary of the Maturity Date of the Note.
As
of December 31,2021 $11,500 of the principal amount of the Note remains outstanding.
The
Company analyzed the conversion feature of the Notes for derivative accounting consideration under ASC 815-15 “Derivatives and
Hedging” and determined that the embedded conversion feature should be classified as a liability due to their being no explicit
limit to the number of shares to be delivered upon settlement of the above conversion features. ASC 815-15 requires that the conversion
features are bifurcated and separately accounted for as an embedded derivative contained in the Company’s convertible debt. The
embedded derivative is carried on the balance sheet at fair value. Any unrealized change in fair value, as determined at each measurement
period, is recorded as a component of the income statement and the associated carrying amount on the balance sheet is adjusted by the
change.
The
Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $46,938 was recognized by
the Company as of December 31,2021. The issuance of the Notes amounted in a discount of $11,500 which is amortized under the Interest
Method over the life of the Notes. As of December 31,2021 the unamortized discount on the convertible note outstanding is $0.
On
September 30, 2018 Regen Biopharma, Inc. (“Regen”) issued a convertible promissory note in the principal amount of $350,000
(“Note”) to Zander Therapeutics, Inc. (“Zander”). Consideration for the Note consisted of $350,000. A onetime
interest charge of 10% of the principal amount shall be applied to the principal amount of the Note. The Note is due and payable 24 months
from the effective date.
Zander
has the right, at any time after the September 30, 2018, at its election, to convert all or part of the outstanding and unpaid Principal
Sum and accrued interest (and any other fees) into shares of fully paid and non-assessable shares of Series A Preferred stock of Regen
as per this conversion formula: Number of shares receivable upon conversion equals the dollar conversion amount divided by the Conversion
Price. The Conversion Price is the greater of $0.0001 or 60% of the lowest trade price in the 25 trading days previous to the conversion.
Zander, at any time prior to selling all of the shares from a conversion, may, for any reason, rescind any portion, in whole or in part,
of that particular conversion attributable to the unsold shares and have the rescinded conversion amount returned to the Principal Sum
with the rescinded conversion shares returned to Regen.
As
of December 31, 2021, 10,000 of the principal amount of the Note remains outstanding.
The
issuance of the Note amounted in a beneficial conversion feature of $350,000 which is amortized under the Interest Method over the life
of the Note. As of December 31 2021 the unamortized discount on the convertible note outstanding is $0.
Zander
and Regen are under common control. Zander Therapeutics, Inc. is the sole licensee of Regen's NR2F6 intellectual property for veterinary
applications.
On
July 19, 2019 the Company issued a convertible promissory note in the face amount of $100,000 (“Note”) for consideration
consisting of:
$95,000
cash
the
payment of $5,000 of legal fees
The
Note pays simple interest in the amount of 10% per annum. The maturity of the Note is July 19, 2020. The Note may be converted into the
common stock of Regen at a price per share ( “Conversion Price”) equivalent to 60% of the lowest Trading price of the common
stock of the Company as reported on the National Quotations Bureau OTC Markets exchange upon which the Company's shares are traded or
any exchange upon which the Common Stock of the Company may be traded in the future , for the twenty prior trading days including the
day upon which a Notice of Conversion is received by the Company or its transfer agent. . In no event shall the Holder be allowed to
effect a conversion if such conversion, along with all other shares of Company common stock beneficially owned by the Holder and its
affiliates would exceed 9.9% of the outstanding shares of the Common Stock of the Company.
The
proceeds from the issuance of the Note are to be allocated as follows:
$30,592
will be utilized to retire the outstanding balance of a $75,000 note issued by the Company on August 15, 2018 to One44 capital, LLC and
$22,877 will be allocated to the Company’s accountants and auditors to bring the Company current with regards to the Company’s
quarterly reporting requirements under the Securities and Exchange Act of 1934.
The
Note may be prepaid with the following penalties:
|
Time
Period
|
|
Payment
Premium
|
|
<=60
days after note issuance
|
|
125%
of the sum of principal plus accrued interest
|
|
>60
days <= 120 days after note issuance
|
|
135%
of the sum of principal plus accrued interest
|
|
>120
days <=180 days after note issuance
|
|
140%
of the sum· of principal plus accrued· interest
|
This
Note may not be prepaid after the 180th day.
As
of December 31,2021 $1,000 of the principal amount of the Note remains outstanding.
The
Company analyzed the conversion feature of the Note for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging”
and determined that the embedded conversion feature should be classified as a liability due to their being no explicit limit to the number
of shares to be delivered upon settlement of the above conversion features. ASC 815-15 requires that the conversion features are bifurcated
and separately accounted for as an embedded derivative contained in the Company’s convertible debt. The embedded derivative is
carried on the balance sheet at fair value. Any unrealized change in fair value, as determined at each measurement period, is recorded
as a component of the income statement and the associated carrying amount on the balance sheet is adjusted by the change.
The
Company values the embedded derivative using the Black-Scholes pricing model and a derivative liability of $3,048 was recognized by the
Company as of December 31,2021.
The
issuance of the Note amounted in a discount of $100,000 which is amortized under the Interest Method over the life of the Note. As of
December 31,2021 the unamortized discount on the convertible note outstanding is $0.
NOTE
6. RELATED PARTY TRANSACTIONS
On
June 23, 2015 the Company entered into an agreement (“Agreement”) with Zander Therapeutics, Inc. ( “Zander”)
whereby The Company granted to Zander an exclusive worldwide right and license for the development and commercialization of certain intellectual
property controlled by The Company (” License IP”) for non-human veterinary therapeutic use for a term of fifteen years.
Zander is under common control with the Company.
Pursuant
to the Agreement, Zander shall pay to The Company one-time, non-refundable, upfront payment of one hundred thousand US dollars ($100,000)
as a license initiation fee which must be paid within 90 days of June 23, 2015 and an annual non-refundable payment of one hundred thousand
US dollars ($100,000) on July 15th, 2016 and each subsequent anniversary of the effective date of the Agreement.
The
abovementioned payments may be made, at Zander’s discretion, in cash or newly issued common stock of Zander.
Pursuant
to the Agreement, Zander shall pay to The Company royalties equal to four percent (4%) of the Net Sales , as such term is defined in
the Agreement, of any Licensed Products, as such term is defined in the Agreement, in a Quarter.
Pursuant
to the Agreement, Zander will pay The Company ten percent (10%) of all consideration (in the case of in-kind consideration, at fair market
value as monetary consideration) received by Zander from sublicensees ( excluding royalties from sublicensees based on Net Sales of any
Licensed Products for which The Company receives payment pursuant to the terms and conditions of the Agreement).
Zander
is obligated pay to The Company minimum annual royalties of ten thousand US dollars ($10,000) payable per year on each anniversary of
the Effective Date of this Agreement, commencing on the second anniversary of June 23, 2015. This minimum annual royalty is only payable
to the extent that royalty payments made during the preceding 12-month period do not exceed ten thousand US dollars ($10,000).
The
Agreement may be terminated by The Company:
If
Zander has not sold any Licensed Product by ten years of the effective date of the Agreement or Zander has not sold any Licensed Product
for any twelve (12) month period after Zander’s first commercial sale of a Licensed Product.
The
Agreement may be terminated by Zander with regard to any of the License IP if by five years from the date of execution of the Agreement
a patent has not been granted by the United States patent and Trademark Office to The Company with regard to that License IP.
The
Agreement may be terminated by Zander with regard to any of the License IP if a patent that has been granted by the United States patent
and Trademark Office to The Company with regard to that License IP is terminated.
The
Agreement may be terminated by either party in the event of a material breach by the other party.
On
December 17, 2018 Regen Biopharma, Inc.(“Licensor”) , KCL Therapeutics, Inc. (“Assignee”) and Zander Therapeutics,
Inc. (“Licensee”) entered into a LICENSE ASSIGNMENT AND CONSENT AGREEMENT whereby, with regards to certain intellectual property
which was assigned by Regen Biopharma, Inc.(“Assigned Properties”) to its wholly owned subsidiary KCL Therapeutics, Inc.,
Licensor hereby transfers and assigns to Assignee all rights, duties, and obligations of Licensor under the Agreement with respect to
the Assigned Properties , and Assignee agrees to assume such duties and obligations thereunder and be bound to the terms of the Agreement
with respect thereto.
On
December 16, 2019 Zander Therapeutics, Inc. (“Zander”), KCL Therapeutics, Inc. (“KCL”) and Regen Biopharma, Inc.
(“Regen”) entered into an agreement (“Agreement”) whereby:
1)
Zander shall return for cancellation 194,285,714 shares of the Series A Preferred stock of Regen (“Conversion Shares”) acquired
by Zander through conversion of $340,000 of principal indebtedness of a $350,000 convertible note payable issued by Regen to Zander.
Subsequent to this event the principal amount due to Zander by Regen pursuant to the Convertible Note shall be $350,000 which shall be
applied pursuant to the Agreement.
2)
A $35,000 one time charge due to Zander by Regen (“One Time Charge”) shall be applied pursuant to the Agreement.
3)
$75,900 of principal indebtedness due to Regen by Zander and $4,328 of accrued but unpaid interest due by Regen to Zander shall be applied
pursuant to the Agreement.
No
actions were taken by any of the parties to enforce the terms of the Agreement.
On
April 15, 2021 the Agreement was amended as follows so that the material terms and conditions shall be:
a) Zander
shall not return the Conversion shares for cancellation and the principal indebtedness of the aforementioned convertible note shall not
reflect such return
b) As
of December 16, 2019 all principal and accrued interest payable by Regen to Zander on that date resulting from Promissory Notes issued
by Regen to Zander shall be credited towards amounts due by Zander pursuant to that agreement, as amended, entered into by and between
Zander and Regen on June 23, 2015 (“License Agreement”) whereby Regen granted to Zander an exclusive worldwide right and
license for the development and commercialization of certain intellectual property controlled by Regen for non-human veterinary therapeutic
use for a term of fifteen years and that License Assignment And Consent agreement entered into by and between Regen, KCL and Zander on
December 17, 2018 whereby Regen transferred and assigned to KCL all rights, duties, and obligations of Regen under the License Agreement
and KCL agreed to assume such duties and obligations thereunder and be bound to the terms of the License Agreement with respect thereto.
Zander
and Regen are under common control.
On
September 30, 2018 Regen Biopharma, Inc. (“Regen”) issued a convertible promissory note in the principal amount of $350,000
(“Note”) to Zander Therapeutics, Inc. (“Zander”). Consideration for the Note consisted of $350,000. A onetime
interest charge of 10% of the principal amount shall be applied to the principal amount of the Note. The Note is due and payable 24 months
from the effective date.
Zander
has the right, at any time after the September 30, 2018, at its election, to convert all or part of the outstanding and unpaid Principal
Sum and accrued interest (and any other fees) into shares of fully paid and non-assessable shares of Series A Preferred stock of Regen
as per this conversion formula: Number of shares receivable upon conversion equals the dollar conversion amount divided by the Conversion
Price. The Conversion Price is the greater of $0.0001 or 60% of the lowest trade price in the 25 trading days previous to the conversion.
Zander, at any time prior to selling all of the shares from a conversion, may, for any reason, rescind any portion, in whole or in part,
of that particular conversion attributable to the unsold shares and have the rescinded conversion amount returned to the Principal Sum
with the rescinded conversion shares returned to Regen.
As
of September 30, 2021, $10,000 of the principal amount of the Note remains outstanding.
During
the quarter ended June 30, 2021 Zander Therapeutics, Inc. issued a promissory note in the amount of $5,396 to the Company as consideration
for expenses of Zander Therapeutics Inc., paid by the Company. The Note is payable on demand of the Holder and bears simple interest
at 10% per annum.
On
October 8,2021 the Company entered into an agreement with Dr. Brian Koos, MD PhD whereby Dr. Brian Koos would provide services to the
Company consisting of :
a) Reviewing
existing publications on research being conducted on Checkpoint NR2F6.
b) Identifying
the most promising applications for the Company’s technology
c) Drafting
a “white paper” on results for 1(b)
d) Making
introductions to known experts in appropriate fields identified in 1(b).
Dr.
Brian Koos is to be paid compensated $117,000 as total consideration for performing the abovementioned tasks. During the quarter ended
December 31, 2021 Dr. Brian Koos was paid the amount of $80,275. Dr. Brian Koos is the brother of David Koos the Chairman and Chief Executive
Officer of the Company.
As
of December 31, 2021 the Company is indebted to David R. Koos the Company’s sole officer and director in the amount of $227. $227
lent to the Company by Koos is due and payable at the demand of the holder and bear simple interest at a rate of 15% per annum.
During
the quarter ended December 31, 2021 the Company paid $5,000 of rental expenses to the landlord of BST Partners as consideration to BST
Partners for use of office space. BST Partners is controlled by David R. Koos the Chairman and Chief Executive Officer of the Company.
On
January 13, 2022 Regen Biopharma, Inc. entered into a sublease agreement with BST Partners (“BST”) whereby Regen Biopharma,
Inc. would sublet office space located at 4700 Spring Street, Suite 304, La Mesa, California 91942 from BST on a month to month basis
for $5,000 per month beginning January 14, 2022.
BST
Partners is controlled by David Koos who serves as the sole officer and director of Regen Biopharma, Inc.
NOTE
7. ACCOUNTS RECEIVABLE, RELATED PARTY
Accounts
Receivable due from Related Party as of December 31, 2021 consists solely of amounts earned by the Company not yet paid resulting from
the Company’s license agreement with KCL Therapeutics (See Note 6).
NOTE
8. STOCKHOLDERS’ EQUITY
The
stockholders’ equity section of the Company contains the following classes of capital stock as of December 31 2021:
Common
stock, $ 0.0001 par value; 4,800,000,000 shares authorized: 4,564,002,832 shares issued and outstanding.
With
respect to each matter submitted to a vote of stockholders of the Corporation, each holder of Common Stock shall be entitled to cast
that number of votes which is equivalent to the number of shares of Common Stock owned by such holder times one (1).
On
any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the holders of the Common Stock shall receive,
out of assets legally available for distribution to the Company’s stockholders, a ratable share in the assets of the Corporation.
Preferred
Stock, $0.0001 par value, 800,000,000 shares authorized of which 600,000 is designated as Series AA Preferred Stock: 50,000 shares issued
and outstanding as of December 31,2021, 300,000,000 is designated Series A Preferred Stock of which 439,293,406 shares are outstanding
as of December 31,2021, 300,000,000 is designated Series M Preferred Stock of which 44,000,000 shares are outstanding as of December
31,2021, and 20,000 is designated Series NC stock of which 10,000 shares are outstanding as of December 31, 2021. .
The
abovementioned shares authorized pursuant to the Company’s certificate of incorporation may be issued from time to time without
prior approval of the shareholders. The Board of Directors of the Company shall have the full authority permitted by law to establish
one or more series and the number of shares constituting each such series and to fix by resolution full or limited, multiple or fractional,
or no voting rights, and such designations, preferences, qualifications, restrictions, options, conversion rights and other special or
relative rights of any series of the Stock that may be desired.
Series
AA Preferred Stock
On
September 15, 2014 the Company filed a CERTIFICATE OF DESIGNATION (“Certificate of Designations”) with the Nevada Secretary
of State setting forth the preferences rights and limitations of a newly authorized series of preferred stock designated and known as
“Series AA Preferred Stock” (hereinafter referred to as “Series AA Preferred Stock”).
The
Board of Directors of the Company have authorized 600,000 shares of the Series AA Preferred Stock, par value $0.0001. With respect to
each matter submitted to a vote of stockholders of the Corporation, each holder of Series AA Preferred Stock shall be entitled to cast
that number of votes which is equivalent to the number of shares of Series AA Preferred Stock owned by such holder times ten thousand
(10,000). Except as otherwise required by law holders of Common Stock, other series of Preferred issued by the Corporation, and Series
AA Preferred Stock shall vote as a single class on all matters submitted to the stockholders.
Series
A Preferred Stock
On
January 15, 2015 the Company filed a CERTIFICATE OF DESIGNATION (“Certificate of Designations”) with the Nevada Secretary
of State setting forth the preferences rights and limitations of a newly authorized series of preferred stock designated and known as
“Series A Preferred Stock” (hereinafter referred to as “Series A Preferred Stock”).
The
Board of Directors of the Company have authorized 300,000,000 shares of the Series A Preferred Stock, par value $0.0001. With respect
to each matter submitted to a vote of stockholders of the Corporation, each holder of Series A Preferred Stock shall be entitled to cast
that number of votes which is equivalent to the number of shares of Series A Preferred Stock owned by such holder times one . Except
as otherwise required by law holders of Common Stock, other series of Preferred issued by the Corporation, and Series A Preferred Stock
shall vote as a single class on all matters submitted to the stockholders.
Holders
of the Series A Preferred Stock will be entitled to receive, when, as and if declared by the board of directors of the Company (the “Board”)
out of funds legally available therefore, non-cumulative cash dividends of $0.01 per quarter. In the event any dividends are declared
or paid or any other distribution is made on or with respect to the Common Stock , the holders of Series A Preferred Stock as of the
record date established by the Board for such dividend or distribution on the Common Stock shall be entitled to receive, as additional
dividends (the “Additional Dividends”) an amount (whether in the form of cash, securities or other property) equal to the
amount (and in the form) of the dividends or distribution that such holder would have received had each share of the Series A Preferred
Stock been one share of the Common Stock, such Additional Dividends to be payable on the same payment date as the payment date for the
Common Stock.
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 A 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 $0.01 per share of Series A Preferred (the “Liquidation Amount”) plus all declared and unpaid
dividends thereon, for each share of Series A Preferred 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 A Preferred, then the entire net assets of the Company shall be distributed among
the holders of the Series A Preferred, 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.
On
January 10, 2017 Regen Biopharma, Inc. (“Regen”) filed a CERTIFICATE OF DESIGNATION ("Certificate of Designations")
with the Nevada Secretary of State setting forth the preferences rights and limitations of a newly authorized series of preferred stock
designated and known as "Series M Preferred Stock" (hereinafter referred to as "Series M Preferred Stock").
The
Board of Directors of Regen have authorized 300,000,000 shares of the Series M Preferred Stock, par value $0.0001. With respect to each
matter submitted to a vote of stockholders of Regen, each holder of Series M Preferred Stock shall be entitled to cast that number of
votes which is equivalent to the number of shares of Series M Preferred Stock owned by such holder times one. Except as otherwise required
by law holders of Common Stock, other series of Preferred issued by Regen, and Series M Preferred Stock shall vote as a single class
on all matters submitted to the stockholders.
The
holders of Series M Preferred Stock shall be entitled receive dividends, when, as and if declared by the Board of Directors in accordance
with Nevada Law, in its discretion, from funds legally available therefore
On
any voluntary or involuntary liquidation, dissolution or winding up of Regen, the holders of the Series M Preferred Stock shall receive,
out of assets legally available for distribution to Regen’s stockholders, a ratable share in the assets of Regen.
On
March 26, 2021 Regen Biopharma, Inc. ( “Regen”) filed a CERTIFICATE OF DESIGNATION ("Certificate of Designations")
with the Nevada Secretary of State setting forth the preferences rights and limitations of a newly authorized series of preferred stock
designated and known as Nonconvertible Series NC Preferred Stock (hereinafter referred to as "Series NC Preferred Stock").
The
Board of Directors of Regen have authorized 20,000 shares of the Series NC Preferred Stock, par value $0.0001. With respect to each matter
submitted to a vote of stockholders of Regen, each holder of Series NC Preferred Stock shall be entitled to cast that number of votes
which is equivalent to the number of shares of Series NC Preferred Stock owned by such holder times 500,000. Except as otherwise required
by law holders of Common Stock, other series of Preferred issued by Regen, and Series NC Preferred Stock shall vote as a single class
on all matters submitted to the stockholders.
The
holders of Series NC Preferred Stock shall be entitled receive dividends, when, as and if declared by the Board of Directors in accordance
with Nevada Law, in its discretion, from funds legally available therefore
On
any voluntary or involuntary liquidation, dissolution or winding up of Regen, the holders of the Series NC Preferred Stock shall receive,
out of assets legally available for distribution to Regen’s stockholders, a ratable share in the assets of Regen.
NOTE
9. INVESTMENT SECURITIES, RELATED PARY
On
June 11, 2018 Regen Biopharma, Inc. was paid a property dividend consisting of 470,588 of the common shares of Zander Therapeutics, Inc.
On
November 29, 2018 the Company accepted 725,000 shares of the Series M Preferred stock of Zander Therapeutics, Inc. in satisfaction of
prepaid rent and accrued interest owed to the Company collectively amounting to $13,124.
On
December 31,2021 the Company revalued 470,588 of the common shares of Zander Therapeutics, Inc. and 725,000 shares of the Series M Preferred
stock of Zander Therapeutics, Inc. based on the following inputs:
|
Schedule of dividend income
|
|
|
|
|
|
Fair
Value of Intellectual Property
|
|
$
|
1,500
|
|
|
Prepaid
Expenses
|
|
|
74,298
|
|
|
Due
from Employee
|
|
|
1,071
|
|
|
Note
Receivable
|
|
|
64,400
|
|
|
Accrued
Interest Receivable
|
|
|
20,274
|
|
|
Investment
Securities
|
|
|
593,357
|
|
|
Convertible
Note Receivable
|
|
|
10,000
|
|
|
Accounts
Payable
|
|
|
1,269,041
|
|
|
Notes
Payable
|
|
|
500,000
|
|
|
Accrued
Expenses Related Parties
|
|
|
89,529
|
|
|
Accrued
Expenses
|
|
|
203,037
|
|
|
Enterprise
Value
|
|
|
2,826,507
|
|
|
Less:
Total Debt
|
|
|
(2,061,607
|
)
|
|
Portion
of Enterprise Value Attributable to Shareholders
|
|
|
764,900
|
|
|
Fair
Value Per Share
|
|
$
|
0.0167
|
|
The
abovementioned constitute the Company’s sole related party investment securities as of December 31, 2021
As
of December 31, 2021:
|
|
Schedule of comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
470,588
Common Shares of Zander Therapeutics, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basis
|
|
|
|
Fair
Value
|
|
|
|
Total
Unrealized Gains
|
|
Net
Unrealized Gain or (Loss) realized during the quarter ended December 31,2021
|
|
$
|
5,741
|
|
|
$
|
7,858
|
|
|
$
|
2,118
|
|
$
|
0
|
|
725,000
Series M Preferred of Zander Therapeutics, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basis
|
|
|
|
Fair
Value
|
|
|
|
Total
Unrealized Loss
|
|
Net
Unrealized Gain or (Loss) realized during the quarter ended September 30,2021
|
|
$
|
13,124
|
|
|
$
|
12,109
|
|
|
$
|
(1,104
|
)
|
$
|
0
|
NOTE
10. INVESTMENT SECURITIES
During
the quarter ended June 30, 2021 the Company was paid 50,000 common shares of Oncology Pharma, Inc. pursuant to an agreement entered into
by and between KCL Therapeutics, Inc. ( a wholly owned subsidiary of the Company) and Oncology Pharma, Inc. whereby Oncology Pharma,
Inc. was granted a license for the development and commercialization of certain intellectual property (“License IP”) for
the treatment in humans of colon cancer for a term of fifteen years from April 7, 2021.
During
the quarter ended June 30, 2021 13,000 of the aforementioned common shares were sold to an unrelated party for $300,000 cash.
During
the quarter ended September 30, 2021 18,000 of the aforementioned common shares were sold to an unrelated party for $195,000 cash.
As
of December 31, 2021 18,300 common shares of Oncology Pharma, Inc. constitute the sole investment securities other than shares of Zander
Therapeutics, Inc. held by the Company.
On
December 31,2021 the Company revalued 18,300 common shares of Oncology Pharma, Inc. at the closing price of the common shares on the
OTC Pink market.
As
of December 31, 2021:
|
|
Schedule of investment securities
|
|
|
|
|
|
|
|
|
|
|
|
18,300
Common Shares of Oncology Pharma, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basis
|
|
|
|
Fair
Value
|
|
|
|
Total
Unrealized Losses
|
|
Net
Unrealized Gain or (Loss) realized during the quarter ended December 31,2021
|
|
$
|
677,100
|
|
|
$
|
74,115
|
|
|
$
|
602,985
|
|
$
|
(123,891)
|
NOTE
12. STOCK TRANSACTIONS
On
October 1, 2021 the Company issued 101,718,058 common shares in satisfaction of $425,000 of convertible indebtedness and $154,991 of
accrued interest on convertible indebtedness.
On
October 1, 2021 the Company issued 5,869,589 shares of Series A Preferred stock in satisfaction of $50,000 of convertible indebtedness
and $23,369 of accrued interest on convertible indebtedness.
On
October 29, 2021 the Company issued 25748147 common shares in satisfaction of $140,000 of convertible indebtedness and $54,000 of accrued
interest on convertible indebtedness.
On
November 4 , 2021 the Company issued 8626613 common shares in satisfaction of $50,000 of convertible indebtedness and $69,012 of accrued
interest on convertible indebtedness.
On
November 24, 2021 the Company issued 77355500 common shares in satisfaction of $95,964 of convertible indebtedness and $36,967 of accrued
interest on convertible indebtedness.
On
December 10 2021 the Company issued 1,425,000 shares of Series A Preferred stock in satisfaction of $25,000 of convertible indebtedness
and $10,625 of accrued interest on convertible indebtedness.
NOTE
13. SUBSEQUENT EVENTS
On
January 13, 2022 Regen Biopharma, Inc. entered into a sublease agreement with BST Partners (“BST”) whereby Regen Biopharma,
Inc. would sublet office space located at 4700 Spring Street, Suite 304, La Mesa, California 91942 from BST on a month to month basis
for $5,000 per month beginning January 14, 2022.
BST
Partners is controlled by David Koos who serves as the sole officer and director of Regen Biopharma, Inc.