WASHINGTON, D.C. 20549

FORM 10-QSB

Quarterly Report under Section 13 or 15 (d) of

Securities Exchange Act of 1934

For Period ended June 30, 2007

Commission File Number 0-32201

BIO- MATRIX SCIENTIFIC GROUP, INC.

(Exact name of registrant as specified in its charter)

 

DELAWARE	33-0824714
(State of Incorporation)	(I.R.S. Employer Identification No.)
8885 Rehco Road, San Diego, California	92121
(Address of Principal Executive Offices)	(Zip Code)

(619) 398-3517

(Registrant's telephone number, including area code)

Check whether the registrant (1) has filed all reports required to be filed by

Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding

12 months (or for such shorter period that the registrant was required to file

such reports), and (2) has been subject to such filing requirements for the past

90 days. Yes x Noo

There were  23,174,396  shares of Common Stock outstanding as of August 8, 2007.

 

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Chang G. Park, CPA, Ph. D. t 371 E STREET t CHULA VISTA t CALIFORNIA 91910-2615t t TELEPHONE (858)722-5953 t FAX (858) 408-2695  t FAX (858) 764-5480 t E-MAIL changgpark@gmail.com t

 

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 Report of Independent Registered Public Accounting Firm

To the Board of Directors of

Bio-Matrix Scientific Group, Inc. and Subsidiary

(Formerly Tasco International, Inc.)

(A Development Stage Company)

 

We have reviewed the consolidated accompanying balance sheet of Bio-Matrix Scientific Group, Inc. and Subsidiary  (Formerly Tasco International, Inc) (A Development Stage “Company”) as of June 30, 2007, and the related consolidated statements of operation, changes in stockholders’ equity, and cash flows for the nine months and three months ended June 30, 2007; and for the period from October 6, 1998 (inception) through June 30, 2007.  These financial statements are the responsibility of the Company’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States).  A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters.  It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole.  Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the consolidated financial statements referred to above for them to be in conformity with generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 5 to the consolidated financial statements, the Company is currently in the development stage.  Because of the Company’s current status and limited operations there is substantial doubt about its ability to continue as a going concern.  Management’s plans in regard to its current status are also described in Note 5.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

/s/ Chang G. Park

____________________________

Chang G. Park, CPA

August 8, 2007

Chula Vista, California

 

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BIO-MATRIX SCIENTIFIC GROUP, INC. AND SUBSIDIARY

(FORMERLY TASCO INTERNATIONAL, INC.)

(A Development Stage Company)

Balance Sheet

ASSETS
		As of June 30, 2007 (unaudited)			As of September 30, 2006
CURRENT ASSETS
Cash		$	1,412		$22,641
Employee Receivable			-
Pre-paid Expenses			13,156		20,207
					-
Total Current Assets			14,568		42,848
PROPERTY & EQUIPMENT			364,403		340,557
GOODWILL
Intangible Assets/Technology			-
Total Other Assets			23,092		29,127
					-
TOTAL ASSETS		$	402,063		$412,532

 

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BIO-MATRIX SCIENTIFIC GROUP, INC. AND SUBSIDIARY (FORMERLY TASCO INTERNATIONAL, INC.) (A Development Stage Company) Balance Sheet    LIABILITIES AND STOCKHOLDERS' EQUITY
		As of June 30, 2007 (unaudited)			As of September 30, 2006
CURRENT LIABILITIES
Accounts payable		$	5,483		$91,079
Loans from former parent			-		1,195,196
Due To/ From New Parent			-		-
Notes Payable			138,846		148,952
Accrued Interest			5,678		1,368
Accrued Payroll			-		-
Accrued Payroll Taxes			36,689		16,460
Accrued  expenses			-		-
Total Current Liabilities			186,696		1,453,055
LONG TERM LIABILITIES			-		-
TOTAL LIABILITIES			186,696		1,453,055
STOCKHOLDERS' EQUITY
Preferred Stock ($.0001 par value authorized
20,000,000 shares authorized; none
issued and outstanding.)
Common Stock,  ($.0001  par value authorized
100,000,000 shares authorized;  13,385,000 & 20,110,179
shares issued and outstanding as of September 30, 2006 and June 30, 2007, respectively			2,011		1339
Additional paid in Capital			33,331,561		30,375,584
Deficit accumulated during the development stage			(33,118,205	)	(31,417,446)
Total Stockholders' Equity (Deficit)		$	215,367		$(1,040,523)
TOTAL LIABILITIES
& STOCKHOLDERS' EQUITY		$	402,063		$412,532

The accompanying notes are an integral part of these financial statements

 

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BIO-MATRIX SCIENTIFIC GROUP, INC. AND SUBSIDIARY

(FORMERLY TASCO INTERNATIONAL, INC.)

(A Development Stage Company)

Consolidated Statement of Operations(Unaudited) 

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Bio-Matrix Scientific Group, Inc.
(BMXG/TASCO)
Statements of Operations(Unaudited)
																		Inception
		BMXG/TASCO				TASCO				BMXG/TASCO				TASCO				(October 6, 1998)
		3 Mos Ended				3 Mos Ended				9 Mos Ended				9 Mos Ended				through
		June 30,				June 30,				June 30,				June 30,				June 30,
		2007				2006				2007				2006				2007
REVENUES
Sales		$	-			$	-			$	-			$	-			$	1,000
Total Revenues			-				-				-				-				1,000
COSTS AND EXPENSES			-
Research and Development			59,337								228,429								256,104
General and administrative			421,315				1,831				863,078				3,714				1,689,773
Depreciation and amortization			334				-				1,001				-				1,334
Consulting and professional fees			233,763				-				587,924				-				1,378,559
Impairment of goodwill & intangiblrs			-								-								29,777,222
Total Costs and Expenses			714,749				1,831				1,680,432				3,714				33,102,992
OPERATING LOSS			(714,749	)			(1,831	)			(1,680,432	)			(3,714	)			(33,101,992	)
OTHER INCOME & (EXPENSES)
Interest Expense			(4,206	)			-				(20,560	)			-				(21,928	)
Other Expense			-								(73	)							(73	)
Interest Income			-				1				306				14				345
Other income			-				-				-				-				5,443
Total Other Income & (Expenses)			(4,206	)			1				(20,327	)			14				(16,213	)
NET INCOME (LOSS)		$	(718,955	)		$	(1,830	)			(1,700,759	)			(3,700	)		$	(33,118,205	)
BASIC AND DILUTED EARNINGS (LOSS) PER SHARE
BASIC AND DILUTED EARNINGS (LOSS) PER SHARE		$	(0.04	)		$	(0.00	)			(0.10	)			(0.00	)		$	-
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING			19,330,268				12,780,000				17,178,178				12,780,000				-

The accompanying notes are an integral part of these financial statements

 

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BIO-MATRIX SCIENTIFIC GROUP INC. AND SUBSIDIARY

(FORMERLY TASCO INTERNATIONAL, INC.)

Consolidated Statement of Stockholders' Equity

From October 6, 1998 through June 30, 2007

(Unaudited)

										Additional
		Common								Paid-in				Retained
		Shares				Amount				Capital				Earnings				Total
Stock issued for cash October 6, 1998			1,000,000				100				(90	)							10
Stock issued for cash October 9, 1998			1,300,000				130				1,170								1,300
Stock issued for cash October 9, 1998			190,000				19				171								190
Stock issued for cash April 1, 1999			290,000				29				261								290
Net Loss October 6,1998 (inception)through September 30, 1999															(295	)			(295	)
Balance September 30, 1999			2,780,000				278				1,512				(295	)			1,495
Stock issued for cash October 19, 1999			10,000,000				1,000				9,000								10,000
Net Loss October 1,1999   through September 30, 2000															(367	)			(367	)
Balance September 30, 2000			12,780,000				1,278				10,512				(662	)			11,128
Net Loss October 1, 2000  through September 30, 2001															(11,028	)			(11,028	)
Balance September 30, 2001			12,780,000				1,278				10,512				(11,690	)			100
Net Loss October 1, 2001																			-
through September 30, 2002															(4,257	)			(4,257	)
Balance September 30, 2002			12,780,000				1,278				10,512				(15,947	)			(4,157	)
Net Loss October 1, 2002																			-
through September 30, 2003															(4,328	)			(4,328	)
Balance September 30, 2003			12,780,000				1,278				10,512				(20,275	)			(8,485	)
Contributed Capital											12,362								12,362
Net Loss October 1, 2003																			-
through September 30, 2004															(7,974	)			(7,974	)
Balance September 30, 2004			12,780,000				1,278				22,874				(28,249	)			(4,097	)

 

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Contributed Capital											9,021								9,021
Net Loss October 1, 2004																			0
through September 30, 2005															(6,667	)			(6,667	)
Balance September 30, 2005			12,780,000				1,278				31,895				(34,916	)			(1,743	)
Stock Cancelled June 13, 2006			(10,000,000	)			(1,000	)											(1,000	)
Stock issued June 13, 2006			10,000,000				1,000				28,999,000								29,000,000
Stock issued for services			305,000				31				759,719								759,750
Stock issued for Compensation			300,000				30				584,970								585,000
Net Loss October 1, 2005																			0
through September 30, 2006															(31,382,530	)			(31,382,530	)
Balance September 30, 2006			13,385,000				1,339				30,375,584				(31,417,446	)			(1,040,523	)
Stock issued for services			100,184				10				112,524								112,534
Stock issued for Compensation			153,700				15				101,465								101,480
Stock issued in exchange for canceling debt			2,854,505				284				1,446,120								1,446,404
Net Loss October 1, 2006																			0
through December 31, 2006															(466,179	)			(466,179	)
Balance December 31, 2006			16,493,389				1,649				32,035,693				(31,883,625	)			153,717
Stock issued for cash			500,000				50				124,950								125,000
Stock issued for services			359,310				36				235,042								235,078
Stock issued for Compensation			143,920				14				88,400								88,414
Stock issued in exchange for canceling debt			500,000				50				124,950								125,000
Net Loss January 1, 2007																			0
through March 31, 2007															(515,624	)			(515,624	)
Balance March 31, 2007			17,996,619				1,800				32,609,035				(32,399,249	)			211,585
Stock issued for cash			240,666				24				60,142								60,166
Stock issued for services			406,129				41				222,889								222,930
Stock issued for Compensation			150,000				15				110,435								110,450
Stock issued in exchange for canceling debt			1,316,765				132				329,059								329,191
Net Loss April 1, 2007																			0
through June 30, 2007															(718,955	)			(718,955	)
Balance June 30, 2007			20,110,179				2,011				33,331,560				(33,118,204	)			215,367

The accompanying notes are an integral part of these financial statements

 

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BIO-MATRIX SCIENTIFIC GROUP, INC. AND SUBSIDIARY

(FORMERLY TASCO INTERNATIONAL, INC.)

( A Development stage Company)

Consolidated Statements of Cash Flows (Unaudited)

		9 Months Ended				9 Months Ended				3 Months Ended				3 Months Ended				October 6, 1998 (inception) through
		June 30,				June 30,				June 30,				June 30,				June 30,
		2007				2006				2007				2006				2007
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss)		$	(1,700,759	)		$	(3,700	)		$	(718,955	)			(1,830	)		$	(33,118,205	)
Adjustments to reconcile net loss to net cash (used in) provided
by operating activities:
Impairment of goodwill and intangible asset			-																29,777,222
Depreciation expense			1,000				-				333				-				1,333
Stock issued for compensation			300,344				-				110,450				-				885,344
Stock issued for services			570,542				-				222,930				-				1,330,292
Cancellation of Debt																			(5,443	)
Stock issued to cancel debt plus accrued interest			705,400								329,191								705,400
Changes in operating assets and liabilities:															-
(Increase) decrease in receivables			-								3,000								-
(Increase) decrease in prepaid expenses			7,051								10,571								(13,156	)
Increase (Decrease) in Accounts Payable			(85,596	)			(1,600	)			1,538				-				5,483
Increase (Decrease) in Accrued Expenses			24,541				-				14,565				-				42,369
( Increase) Decrease in Deposits			6,035								2,634								(23,092	)
Net Cash Provided by (Used in) Operating Activities			(171,442	)			(5,300	)			(23,743	)			(1,830	)			(412,453	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of fixed assets			(24,847	)			-				-				-				(365,737	)
Purchases of Intangible assets							-				-				-				(29,777,222	)
Net Cash Provided by (Used in) Investing Activities			(24,847	)			-				-				-				(30,142,959	)

 

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CASH FLOWS FROM FINANCING ACTIVITIES
Common stock issued for cash			74								24								1,352
Additional paid in Capital			185,092				-				60,142				-				29,221,430
Principal borrowings on notes			(10,106	)			-				(182,716	)			-				138,846
Net borrowings from related parties							5,300				-				1,800				1,195,196
Net Cash Provided by (Used in) Financing Activities			175,060				5,300				(122,550	)			1,800				30,556,824
Net Increase (Decrease) in Cash			(21,229	)			-				(146,293	)			(30	)			1,412
Cash at Beginning of Period			22,641				-				147,705				30				-
Cash at End of Period		$	1,412				-			$	1,412				-				(1,412	)
Supplemental  Cash Flow Disclosures:
Cash paid during period for interest		$	-				-			$	-				-			$	-
Cash paid during period for taxes		$	-				-			$	-				-			$	800

The accompanying notes are an integral part of these financial statements

BIO-MATRIX SCIENTIFIC GROUP, INC. AND SUBSIDIARY

(A Development Stage Company)

Notes to consolidated Financial Statements

(unaudited)

As of June 30, 2007

NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS

Bio-Matrix Scientific Group, Inc. (“Company”) was organized October 6, 1998, under the laws of the State of Delaware as Tasco International, Inc.

The Company is in the development stage. From October 6, 1998 to June 3, 2006 its activities were limited to capital formation, organization, and development of its business plan to provide production of visual content and other digital media, including still media, 360-degree images, video, animation and audio for the Internet.

On June 3, 2006 the Company abandoned its efforts in the field of digital media production when it acquired 100% of the share capital of Bio-Matrix Scientific Group, Inc., a Nevada corporation (“BMSG”).

Bio-Matrix Scientific Group, Inc. is a development stage company in the business of designing, developing, and marketing medical devices, specifically disposable instruments used in stem cell extraction and tissue transfer procedures and operating cryogenic cellular storage facilities, specifically stem cell banking facilities. BMSG is the Company’s only subsidiary and operating entity at this time. On August 25, 2006, the Company amended its certificate of incorporation in order to change its name to Bio-Matrix Scientific Group, Inc.

 

 

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NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. BASIS OF ACCOUNTING

The consolidated financial statements have been prepared using the accrual basis of accounting. Under the accrual 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. USE OF ESTIMATES

The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

C. DEVELOPMENT STAGE

The Company is a development stage company that, through its wholly owned subsidiary devotes substantially all of its efforts in the development of its plan to operate in the field of the development, manufacture and marketing of medical devices and the operation of cellular storage facilities, specifically stem cell banking facilities.

 

D. CASH EQUIVALENTS

 

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

E. PROPERTY AND EQUIPMENT 

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

The Company has depreciated property and equipment by the straight-line method over the useful life.

 

F. INCOME TAXES

 

Income taxes are provided in accordance with Statement of Financial accounting Standards No. 109 (SFAS 109), Accounting for Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities.

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of all of the deferred tax assets will be not realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

G. BASIC EARNINGS (LOSS) PER SHARE

In February 1997, the FASB issued SFAS No. 128, "Earnings Per Share", which specifies the computation, presentation and disclosure requirements for earnings (loss) per share for entities with publicly held common stock. SFAS No. 128 supersedes the provisions of APB No. 15, and requires the presentation of basic earnings (loss) per share and diluted earnings (loss) per share. The Company has adopted the provisions of SFAS No. 128 effective October 6, 1998 (inception).

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

H. VALUATION OF GOODWILL

In accordance with SFAS No. 142, goodwill and other intangible assets with indefinite lives are not amortized, they are instead tested for impairment annually or whenever events or changes in circumstances indicate that the asset may be impaired. The Company performed an evaluation of goodwill and intangible assets in the fourth quarter of the twelve months ended September 30, 2006 which resulted in impairment charges of $29,777,222. The Company currently has $0 of goodwill.

 

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NOTE 3. Property and equipment

 

Property and equipment as of June 30, 2007 consists of the following:

Acquisition cost:
Production Equipment	US$			93,315
Production Clean room				78,264
Leasehold improvement				188,981
Office equipment				3,057
Computer				2,120
Subtotal				365,737
Less accumulated depreciation				(1,334	)
Total	US$			364,403

 

NOTE 4. WARRANTS AND OPTIONS

On July 17, 2006 the Company signed a public relations agreement with OTCFN which called for the issuance of an option agreement for 200,000 options exercisable at $4.50 per share. These options expired unexercised six months from the date of execution of the agreement

 

NOTE 5. GOING CONCERN

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company generated net losses of $33,118,205 during the period from October 6, 1998 (inception) through June 30, 2007. 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 through debt or equity offerings. Management has yet to decide what type of offering the Company will use or how much capital the Company will raise. There is no guarantee that the Company will be able to raise any capital through any type of offerings.

NOTE 6. INCOME TAXES

		As of June 30 , 2007
Deferred tax assets:
Net operating tax carry forwards		$	11,260,190
Other			0
Gross deferred tax assets			11,260,190
Valuation allowance			(11,260,190	)
Net deferred tax assets		$	0

 

Realization of deferred tax assets is dependent upon sufficient future taxable income during the period that deductible temporary differences and carry forwards are expected to be available to reduce taxable income. As the achievement of required future taxable income is uncertain, the Company recorded a valuation allowance. In addition, the acquisition of BMSG has resulted in a change of control. Internal Revenue Code Sec 382 limits the amount of income that may be offset by net operating loss (NOL) carryovers after an ownership change.

 

NOTE 7. SCHEDULE OF NET OPERATING LOSSES

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1998 Net Operating Loss		$	(295	)
1999 Net Operating Loss			(367	)
2000 Net Operating Loss			(11,028	)
2001 Net Operating Loss			(4,257	)
2002 Net Operating Loss			(4,328	)
2003 Net Operating Loss			(7,974	)
2004 Net Operating Loss			(6,667	)
2005 Net Operating Loss			(31,382,530	)
Nine  Months Ended June 30, 2007 Net  Operating Loss			(1,700,759	)
				)
Net Operating Loss		$	(33,118,205	)

 

As of June 30, 2007 the Company has a net operating loss carry forward of approximately $33,118,205 which will expire 20 years from the date the losses were incurred.

NOTE 8. RELATED PARTY TRANSACTION

Until July 3, 2006, a former director has provided office services without charge. Such costs are immaterial to the financial statements and, accordingly, have not been reflected therein.

The Company was loaned $5,300 from a related party without repayment terms and with no interest being charged. This Loan was forgiven as part of the Purchase Agreement involving the Company’s purchase of Bio-Matrix Scientific Group Inc. (Nevada).

On July 3, 2006, the Company acquired 100% of the share capital of BMSG from BMXP Holdings, Inc., formerly named Bio-Matrix Scientific Group, Inc. (See Note 12).

David R. Koos, the Chairman, CEO and President of the Company, is, and at the time of the acquisition was, the Chairman and Chief Executive Officer of BMXP Holdings Inc. as well as beneficial owner of 24% of the share capital of BMXP Holdings, Inc. Brian Pockett, Vice President, COO and Director of the Company, is , and at the time of the acquisition was, Chief Operating Officer, Managing Director and a Director of BMXP Holdings Inc. as well as beneficial owner of 14% of the share capital of BMXP Holdings, Inc.

 

On October 11, 2006, the Company entered into an Agreement with BMXP Holdings, Inc (“BMXP”) (“Agreement”) pursuant to which the Company issued to BMXP 1,462,570 common shares of the Company on or prior to October 12, 2006. This issuance constituted full satisfaction of the amount of $1,191,619 plus any accrued and unpaid interest, owed to BMXP by the Company at that time.

As further consideration to BMXP for entering into this Agreement and abiding by the terms and conditions thereof, at any time within a period of 365 days from the date of the Agreement, BMXP shall have the right, upon written demand to the Company (“Registration Demand”), to cause the Company, within ninety days of the Registration Demand, to prepare and file with the United States Securities and Exchange Commission (“SEC”) a registration statement to register under the Securities Act of 1933, as amended, 11,462,570 common shares of the Company (including the shares issued pursuant to this Agreement) owned by BMXP (“Registerable Securities”), in order that the Registerable Securities may be distributed to BMXP shareholders on a pro rata basis ( based on their ownership of common shares of the Company as of a Record Date to be determined by BMXP), and use its reasonable best efforts to cause that registration statement to be declared effective by the SEC. This right may also be exercised by any entity to which BMXP has transferred ownership of the Registerable Securities in trust for the BMXP Record Shareholders.

On April 4, 2007, 985,168 shares of the Company’s common stock were issued to Bombardier Pacific Ventures in full satisfaction of $246,292 owed by the Company to Bombardier Pacific Ventures. David R. Koos, the Company’s Chairman of the Board of Directors, President, CEO, Secretary, and Acting CFO is the sole beneficial owner of Bombardier Pacific Ventures

 

NOTE 9. STOCK TRANSACTIONS

Transactions, other than employees' stock issuance, are in accordance with paragraph 8 of SFAS 123. Thus issuances shall be accounted for based on the fair value of the consideration received. Transactions with employees' stock issuance are in accordance with paragraphs (16-44) of SFAS 123. These issuances shall be accounted for based on the fair value of the consideration received or the fair value of the equity instruments issued, or whichever is more readily determinable.

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On August 29, 2005 the Company split its common stock ten for one (10:1) from 1,278,000 to 12,780,000 shares outstanding. All stock transactions have been retroactively restated to reflect the ten for one stock split.

On October 6, 1998, the Company issued 1,000,000 shares of common stock for cash at $0.0001 per share.

On October 9, 1998, the Company issued 1,300,000 shares of common stock for cash at $0.001 per share.

On October 12, 1998, the Company issued 190,000 shares of common stock for cash at $0.001 per share.

On April 1, 1999, the Company issued 290,000 shares of common stock for cash at $0.001 per share.

 

On October 19, 1999, the Company issued 10,000,000 shares of common stock for cash at $0.01 per share.

On June 13, 2006 the Company cancelled 10,000,000 shares of common stock belonging to the Company’s former Chairman

On June 13, 2006 the Company issued 10,000,000 shares of common stock into Escrow in connection with the acquisition of BSMG.

On August 28, 2006 the Company issued 300,000 shares of common stock to consultants for services. Initially, 600,000 shares were issued in error, and 300,000shares were subsequently cancelled October 17, 2006.

On September 14, 2006 the Company issued 300,000 shares of common stock to management pursuant to the TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN

On September 14, 2006 the Company issued 5,000 shares of common stock to consultants for services pursuant to the TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN.

On October, 6, 2006 the Company issued 8,850 shares of common stock to consultants for services pursuant to the TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN.

On October 11, 2006 the Company issued 43,000 shares of common stock to consultants for services pursuant to the TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN.

On October 11, 2006, the Company shall issued 1,462,570 common shares of the Company to BMXP in full satisfaction of the amount of $1,191,619 plus accrued and unpaid interest, owed to BMXP Holdings, Inc. by the Company.

On November 10, 2006 the Company issued 100,000 shares of common stock to management pursuant to the TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN.

 

On November 10, 2006 the Company issued 25,000 shares of common stock to consultants for services pursuant to the TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN.

On December 5, 2006 the Company issued 8,334 shares of common stock to a consultant for services pursuant to the TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN.

On December 5, 2006 the Company issued 1,391,935 shares of common stock to Bio-Technology Partners Business Trust which constituted full satisfaction of the amount of $246,744 plus accrued interest owed by the Company to Bio-Technology Partners Business Trust.

 

On December 14, 2006 the Company issued 68,700 shares of common stock to management, employees and consultants for services pursuant to the TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN.

During the quarter ended March 31, 2007 the Company issued 143,920 shares of common stock to management and employees as compensation pursuant to the TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN.

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During the quarter ended March 31, 2007 the Company issued 359,310 to consultants for services pursuant to the TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN.

On March 9, 2007 the Company issued 500,000 shares of common stock to Bio-Technology Partners Business Trust which constituted full satisfaction of the amount of $125,000 owed by the Company to Bio-Technology Partners Business Trust.

During the quarter ended March 31, 2007 the Company issued 500,000 shares of common stock for cash consideration of $125,000.

On April 4, 2007, the Company issued 240,666 common shares for cash consideration of $60,166.

On April 4, 2007, the Company issued 27,589 common shares pursuant to the TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN as consideration for services rendered valued at $11,619.

On April 4, 2007, the Company issued 5,000 common shares as consideration for services rendered valued at $1,250

On April 4, 2007, the Company issued 40,000 common shares to management and employees as compensation pursuant to the TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN.

On April 4, 2007, 985,168 shares of the Company’s common stock were issued to Bombardier Pacific Ventures in full satisfaction of $246,292 owed by the Company to Bombardier Pacific Ventures. David R. Koos, the Company’s Chairman of the Board of Directors, President, CEO, Secretary, and Acting CFO, is the sole beneficial owner of Bombardier Pacific Ventures.

On April 4, 2007, the Company issued 5,000 common shares to an employee as compensation pursuant to the TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN.

On April 4, 2007, the Company issued 5,000 common shares pursuant to the TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN as consideration for services rendered valued at $3,750

On May 22, 2007, the Company issued 15,000 common shares pursuant to the TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN as consideration for services rendered valued at $9,300.

On May 22, 2007 the Company issued 65,000 common shares to management pursuant to the BIO-MATRIX SCIENTIFIC GROUP, INC. 2007 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN

 

On June 7, 2007, the Company issued 32,040 common shares pursuant to the BIO-MATRIX SCIENTIFIC GROUP, INC. 2007 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN as consideration for services rendered valued at $20,185.

On June 7, 2007, the Company issued 5,000 common shares to an employee as compensation pursuant to the TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN.

 

On June 21, 2007, 331,597 shares of the Company’s common stock were issued to Venture Bridge Advisors in full satisfaction of $82,900 owed by the Company to Venture Bridge Advisors.

On June 28, 2007 the Company issued 321,500 common shares pursuant to the BIO-MATRIX SCIENTIFIC GROUP, INC. 2007 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN as consideration for services rendered valued at $176,825.

On June 28, 2007 the Company issued 35,000 common shares to management pursuant to the BIO-MATRIX SCIENTIFIC GROUP, INC. 2007 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN

NOTE 10. STOCKHOLDERS' EQUITY

The stockholders' equity section of the Company contains the following classes of capital stock as of June 30, 2007:

* Preferred stock, $ 0.0001 par value; 20,000,000 shares authorized: -0- shares issued and outstanding.

* Common stock, $ 0.0001 par value; 100,000,000 shares authorized: 20,110,179 shares issued and outstanding.

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NOTE 11. COMMITMENTS AND CONTINGENCIES

On August 3, 2005, BMSG entered into an agreement to lease a 14,562 square foot facility for use as a cellular storage facility at a rate of:

$18,931 per month for the twelve months ended November 30, 2006,

$19,498 per month for the twelve months ended November 30, 2007,

$20,084 per month for the twelve months ended November 30, 2008,

$20,687 per month for the twelve months ended November 30, 2009, and

$21,307 per month for the twelve months ended November 30, 2010.

The lease is for a period of five years commencing on December 1, 2005 and expiring on November 30, 2010. The lease contains a renewal option enabling the Company to renew the lease for an additional five years. The Company is also responsible to pay its pro rata portion of common charges such as property taxes and insurance.

 

Minimum Lease Commitments

For the fiscal years ended on September 30,

 

2007		$	232,842
2008		$	239,936
2009		$	247,038
2010		$	254,444
2011		$	42,614

 

Since the signing of this lease, BMSG has been improving this facility and has made substantial progress toward creating a cGMP (Good Manufacturing Practices) and cGTP (Good Tissue Practices) compliant facility specifically designed for the cryogenic storage of stem cells, medical device engineering, stem cell research and stem cell specimen processing laboratories.

 

The Company expects to have the facility licensed by the State of California and registered with the FDA. Concurrently, the Company has been developing the policies and procedures needed for processing stem cells for cryogenic storage.

NOTE 12. ACQUISITION OF BIO-MATRIX SCIENTIFIC GROUP (NEVADA).

On June 14, 2006, the Company and Bio-Matrix Scientific Group, Inc., a Delaware corporation (the “Seller”) entered into a Stock Purchase Agreement (the “Acquisition Agreement”).

Under the terms of the Acquisition Agreement and pursuant to a separate Escrow Agreement between the Company and the Seller, The Company delivered to the Escrow Agent the sum of 10,000,000 shares of the Company’s common stock and other corporate and financial records and the Seller delivered to the Escrow Agent 25,000 shares of the common stock of BSMG., a Nevada corporation (the “Subsidiary”). As a part of the transaction and pursuant to the terms of the Acquisition Agreement and Stock Cancellation Agreement between the parties and John Lauring, the Company’s former Chairman and Chief Executive Officer, John Lauring returned 10,000,000 shares of the Company held and owned by him for cancellation.

On June 14, 2006, the Company’s officers and directors resigned their positions and elected Dr. David R. Koos and Mr. Brian Pockett as in-coming Directors of the Registrant. Following their election and the reconstruction of the Board of Directors, the Registrant’s Board of Directors elected Dr. David R. Koos as Chief Executive Officer and President and Mr. Brian Pockett as Chief Operating Officer and Vice President on June 19, 2006.

On July 3, 2006, the Acquisition Agreement closed and Company acquired the twenty-five thousand (25,000) shares of the Common Stock of the Subsidiary from the Seller in exchange for the payment of the purchase price of 10,000,000 shares of the common stock of the Company and the 10,000,000 shares of the Company owned and held by John Lauring were returned to the Company for cancellation. At that time, the Escrow Agent released all stock certificates and certain other corporate and financial books and records held pursuant to the Escrow Agreement.

 

As a result of the Acquisition Agreement, the Subsidiary became a wholly owned subsidiary of the Company and the Seller became the holder of approximately 78.24% of the outstanding common stock of the Registrant.

On July 3, 2006, the Company changed its principal offices from 23 Brigham Road, Worcester MA 01609 to 8885 Rehco Road, San Diego, California 92121

NOTE 13. TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN

On July 25, 2006 the Company adopted the TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS STOCK COMPENSATIONPLAN (“the Plan”) which provides for the issuance of up to 1,500,000 authorized but unissued shares of Common Stock to eligible employees and consultants for services rendered (“Award Shares” or “Awards”). These Award Shares were registered with the Securities and Exchange Commission (“Commission”) on Form S-8 filed with the Commission on August 8, 2006. This Plan shall terminate on July 15, 2016.

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Award Shares may be issued to Eligible Persons (The term "Eligible Person" means any natural person who, at a particular time, is an employee, officer, director, consultant, or advisor of the Company or any Parent or Subsidiary of the Company; provided that, in the case of consultants or advisors such services are not in connection with the offer and sale of securities in a capital-raising transaction and /or such services are not intended to directly or indirectly promote or maintain a market for the Company ’s securities) in any of the following instances:

 

(i) as a bonus for services previously rendered and compensated, in which case the recipient of the Award Shares shall not be required to pay any consideration for such Award Shares, and the value of such Award Shares shall be the Fair Market Value of such Award Shares on the date of grant; or

(ii) as compensation for the previous performance or future performance of services or attainment of goals, in which case the recipient of the Award Shares shall not be required to pay any consideration for such Award Shares (other than the prior performance of his services or the assumption of the obligation of future performance of services ).

The Plan is currently administered by the Plan Committee, which currently consists of the entire Board of Directors of the Company, and which has sole and absolute discretion to interpret and determine the effect of all matters and questions relating to this Plan.

The Plan Committee has the full and final authority in its sole discretion, at any time and from time-to-time, subject only to the express terms, conditions and other provisions of the Articles of Incorporation of the Company and this Plan, and the specific limitations on such discretion set forth herein, to:

(i) Designate the Eligible Persons or classes of Eligible Persons eligible to receive Awards from among the Eligible Persons;

(ii) Grant Awards to such selected Eligible Persons or classes of Eligible Persons in such form and amount (subject to the terms of the Plan) as the Plan Committee shall determine;

(iii) Interpret the Plan, adopt, amend and rescind rules and regulations relating to the Plan, and make all other determinations and take all other action necessary or advisable for the implementation and administration of the Plan; and

(iv) Delegate all or a portion of its authority to one or more directors of the Company who are executive officers of the Company, subject to such restrictions and limitations (such as the aggregate number of shares of Common Stock that may be awarded) as the Plan Committee may decide to impose on such delegate directors.

 

As of June 30, 2007 , 1,454,772  shares have been issued pursuant to the Plan

 

		Number of
		Shares
As of June 30, 2007:
Granted			1,454,772	*
Remaining shares available for issuance under the Plan as of June 30, 2007			45,228

 

*Does not include 300,000 shares which were issued erroneously and subsequently cancelled

NOTE 14. BIO-MATRIX SCIENTIFIC GROUP, INC. 2007 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN

On  June 3 , 2007 the Company adopted the BIO-MATRIX SCIENTIFIC GROUP, INC. 2007 EMPLOYEE  AND CONSULTANTS STOCK COMPENSATION PLAN (“the  Bio Plan”) which provides for the issuance of up to 1,500,000 authorized but unissued shares of Common Stock to eligible employees and consultants for services rendered (“Award Shares” or “Awards”). These Award Shares were registered with the Securities and Exchange Commission (“Commission”) on Form S-8 filed with the Commission on June 5, 2007. This Bio Plan shall terminate on June 3, 2017.

Award Shares may be issued to Eligible Persons (The term "Eligible Person" means any natural person who, at a particular time, is an employee, officer, director, consultant, or advisor of the Company or any Parent or Subsidiary of the Company; provided that, in the case of consultants or advisors such services are not in connection with the offer and sale of securities in a capital-raising transaction and /or such services are not intended to directly or indirectly promote or maintain a market for the Company ’s securities) in any of the following instances:

 

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(i) as a bonus for services previously rendered and compensated, in which case the recipient of the Award Shares shall not be required to pay any consideration for such Award Shares, and the value of such Award Shares shall be the Fair Market Value of such Award Shares on the date of grant; or

(ii) as compensation for the previous performance or future performance of services or attainment of goals, in which case the recipient of the Award Shares shall not be required to pay any consideration for such Award Shares (other than the prior performance of his services or the assumption of the obligation of future performance of services ).

The Bio Plan is currently administered by a Plan Committee, which currently consists of the entire Board of Directors of the Company, and which has sole and absolute discretion to interpret and determine the effect of all matters and questions relating to this Bio Plan.

The Plan Committee has the full and final authority in its sole discretion, at any time and from time-to-time, subject only to the express terms, conditions and other provisions of the Articles of Incorporation of the Company and this Bio Plan, and the specific limitations on such discretion set forth herein, to:

(i) Designate the Eligible Persons or classes of Eligible Persons eligible to receive Awards from among the Eligible Persons;

(ii) Grant Awards to such selected Eligible Persons or classes of Eligible Persons in such form and amount (subject to the terms of the Plan) as the Plan Committee shall determine;

(iii) Interpret the Plan, adopt, amend and rescind rules and regulations relating to the Plan, and make all other determinations and take all other action necessary or advisable for the implementation and administration of the Plan; and

(iv) Delegate all or a portion of its authority to one or more directors of the Company who are executive officers of the Company, subject to such restrictions and limitations (such as the aggregate number of shares of Common Stock that may be awarded) as the Plan Committee may decide to impose on such delegate directors.

 

As of June 30, 2007, 458,540 shares have been issued pursuant to the Plan

		Number of
		Shares
As of June 30, 2007:
Granted			458,540
Remaining shares available for issuance under the Plan as of June 30, 2007			1,041,460

NOTE 15 SUBSEQUENT EVENTS

On July 12, 2007, the Company issued 23,000 common shares to consultants pursuant to the BIO-MATRIX SCIENTIFIC GROUP, INC. 2007 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN as consideration for services rendered.

On July 30, 2007, the Company issued 555,000 common shares to consultants pursuant to the BIO-MATRIX SCIENTIFIC GROUP, INC. 2007 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN as consideration for services rendered

On July 30,2007,  the Company issued 100,000 common shares to management pursuant to the BIO-MATRIX SCIENTIFIC GROUP, INC. 2007 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN

On July 30, 2007, the Company issued 566,217 common shares to Bombardier Pacific Ventures in satisfaction of  the principal amount  of $141,554  owed by the Company to Bombardier Pacific Ventures. David R. Koos, the Company’s Chairman of the Board of Directors, President, CEO, Secretary, and Acting CFO, is the sole beneficial owner of Bombardier Pacific Ventures.

On July 31, 2007, the Company issued 760,000 common shares for cash consideration of $190,000.

On August 6, 2007, the Company issued 620,000 common shares to consultants as consideration for services rendered.

On August 6, 2007, the Company issued 440,000 common shares for cash consideration of $110,000

 

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

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CERTAIN FORWARD-LOOKING INFORMATION

 

Information provided in this Quarterly report on Form 10QSB may contain forward-looking statements within the meaning of Section 21E or Securities Exchange Act of 1934 that are not historical facts and information. These statements represent the Company's expectations or beliefs, including, but not limited to, statements concerning future and operating results, statements concerning industry performance, the Company's operations, economic performance, financial conditions, margins and growth in sales of the Company's products, capital expenditures, financing needs, as well assumptions related to the forgoing. For this purpose, any statements contained in this Quarterly Report that are not statement of historical fact may be deemed to be forward-looking statements. These forward-looking statements are based on current expectations and involve various risks and uncertainties that could cause actual results and outcomes for future periods to differ materially from any forward-looking statement or views expressed herein. The Company's financial performance and the forward-looking statements contained herein are further qualified by other risks including those set forth from time to time in the documents filed by the Company with the Securities and Exchange Commission, including the Company's most recent Form 10KSB for the year ended September 30, 2006. All references to “Company” or the “Company” refer to Bio-Matrix Scientific Group, Inc.

CONDITION AND RESULTS OF OPERATIONS THREE MONTHS ENDED JUNE 30, 2007

Revenues were -0- for the quarter ending June, 2007 and -0- for the same quarter ending June 30, 2006. Net losses were $718,955 for the three months ended June 30, 2007 and $1,830 for the same period ended June 30 , 2006.

 

PLAN OF OPERATION

As of June 30, 2007 the Company has $1,412 cash on hand and current liabilities of $186,696 such liabilities consisting of Accounts Payable, Notes Payable, Accrued Payroll Taxes, and Accrued Interest.

 

The Company feels it will not be able to satisfy its cash requirements over the next twelve months and shall be required to seek additional financing.

  

At this time, the Company plans to fund its financial needs through operating revenues (which cannot be assured) and, if required, through equity private placements of common stock. (No plans, terms, offers or candidates have yet been established and there can be no assurance that the company will be able to raise funds on terms favorable to the Company or at all.)

During the period beginning January 1, 2007 and ending April 4, 2007, the Company sold 1,752,867 shares of common stock at a purchase price of $0.25 per share.

740,666 of the Shares were sold for cash consideration of $185,166 to five purchasers.

The net proceeds of the sale of shares sold for cash consideration, which were $185,166, will be utilized for general working capital purposes. We estimate that these net proceeds will not be sufficient to fulfill our capital needs through the next twelve months.

 

27,033 of the Shares were issued to two purchasers as consideration for services rendered valued at $6,758.

985, 168 of the Shares were issued to Bombardier Pacific Ventures in full satisfaction of $246,292 owed by the Company to Bombardier Pacific Ventures on April 4, 2007.

Additionally, during the quarter ended June 30, 2007, 331, 597 shares of the Company’s common stock were issued to Venture Bridge Advisors in full satisfaction of $82,900 owed by the Company to Venture Bridge Advisors.

Over the next 12 months and if the company is successful in obtaining necessary licenses (as described below), the Company anticipates opening its stem cell bank and marketing its disposable stem cell / tissue management instruments

Prior to opening its stem cell banking facility, the Company will be required to register with the FDA under the Public Health Service Act to satisfy the regulatory requirements involving the storage of stem cells and other tissue. These regulatory requirements apply to all establishments engaged in the recovery, processing, storage, labeling, packaging, or distribution of any Human Cells, Tissues, and Cellular and Tissue-Based Products (HCT/Ps) or the screening or testing of a cell or tissue donor. Stem cell banking is also subject to State Regulations. the Company  will also be required to obtain a California Blood Banks and Biologics License for our facility.

Over the next twelve months and if the Company is successful in obtaining the necessary additional financing and obtaining equipment and necessary additional professional staff, the Company anticipates purchasing the following significant laboratory equipment:

 

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Equipment                                                                    Estimated Cost

Laboratory information systems		$	30,000
Laminar flow hoods (2 ea) 4ft		$	10,000
Sepax Cell Separation Device		$	50,000
Blood processing equipment		$	80,000
Bar code labeling equipment		$	3,000
Tube heat sealers (2 ea)		$	4,000
Bench top centrifuges (2) refrigerated		$	12,000
Cell Therapy Software		$	30,000
Cryo Tracking Software		$	28,000
Cryo Tracking Equipment		$	45,000
Hematology analyzer		$	15,000
Flow Cytometer		$	150,000
BacTec Microbiology equipment		$	20,000
Small equipment (lab set-up)		$	10,000
Microscope		$	5,000
CO2 Incubator		$	4,000
Lab benches		$	30,000
Supplies / reagents*		$	100,000
Total		$	626,000

* to be reordered on an annual basis

 

The Company can not assure that it will be successful in obtaining additional financing necessary to implement its  business plan.  The Company has not received any commitment or expression of interest from any financing source that has given the Company  any assurance that it will obtain the amount of additional financing in the future that it currently anticipates.  For these and other reasons, the Company is not able to assure that it will obtain any additional financing or, if it are successful, that it can obtain any such financing on terms that may be reasonable in light of its current circumstances.

If the Company is able to obtain the amount of additional financing that it requires, it will need to undertake the following capital expenditures:

Equipment                                                          Estimated cost

Computer system / Lab & offices		$	100,000
Medical Software		$	45,000
Misc equipment		$	30,000
Phone system		$	30,000
Back-up generator		$	50,000
Security system		$	20,000
Total		$	275,000

 

In the event that the Company is successful in obtaining the amount of the additional financing that it requires on acceptable terms, the Company currently anticipates that it  will need to add the following additional employees during the twelve month period thereafter:

 

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Title                                                                                  Estimated Annual

      Compensation

Director  of Labs		$	120,000
Director  of Quality & Assurance		$	75,000
Adm. Director		$	75,000
Dir. Of Engineering / Production		$	85,000
Lab Tech		$	65,000
Lab Tech		$	65,000
Customer Service Representative.		$	45,000
Director of Market & Sales		$	100,000
Facility Manager / Receiving & Shipping		$	60,000
Support Staff		$	50,000
Total		$	740,000

The Company has not undertaken any efforts to recruit any persons to fill any of the positions shown above.  The Company may face protracted difficulties in recruiting individuals with sufficient experience and skills needed to fill these positions and it can not assure  that it  will be successful in obtaining the necessary persons at the compensations levels shown above or that it will not incur significant additional expenses to attract, relocate, and retain any persons that it recruits.

 

Item 3. CONTROLS AND PROCEDURES

 

(A) Evaluation of Disclosure Controls and Procedures

 

As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of David Koos, who is the Company's Principal Executive Officer/Principal Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures. The Company's disclosure controls and procedures are designed to provide a reasonable level of assurance of achieving the Company's disclosure control objectives. The Company's Principal Executive Officer/Principal Financial Officer has concluded that the Company's disclosure controls and procedures are, in fact, effective at this reasonable assurance level as of the period covered.

 

(B) Changes in Internal Controls over Financial Reporting

 

In connection with the evaluation of the Company's internal controls during the period commencing on April 1, 2007 and ending June 30 , 2007, David Koos, who is both the Company's Principal Executive Officer and Principal Financial Officer has determined that there are no changes to the Company's internal controls over financial reporting that has materially affected, or is reasonably likely to materially effect, the Company's internal controls over financial reporting.

 

PART II.

 

Item 1: LEGAL PROCEEDINGS

None

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On April 4, 2007, the Company issued 240,666 common shares for cash consideration of $60,166.

No underwriters were retained to serve as placement agents for the sale. The 240,666 shares of common stock were sold directly through the management of the Company. No commission or other consideration was paid in connection with the sale of the 240,66  shares of common stock.

The proceeds of the sale of the 240,666 shares of common stock will be utilized for general working capital purposes. The Company estimates that these net proceeds will not be sufficient to fulfill our capital needs through the next twelve months

 

The offer and sale of the 240,666 shares of common stock was exempt from the registration provisions of the Securities Act of 1933, as amended, by reason of Section 4(2) thereof.

 

On April 4, 2007, the Company issued 5,000 common shares as consideration for services rendered valued at $1,250.

 

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No underwriters were retained to serve as placement agents for the issuance. The 5,000 shares of common stock were offered and sold directly through the management of the Company. No commission or other consideration was paid in connection with the sale of the 5,000 shares of common stock.

The offer and sale of the 5,000 shares of common stock was exempt from the registration provisions of the Securities Act of 1933, as amended, by reason of Section 4(2) thereof.

 

On April 4, 2007, the Company issued 985, 168 common shares to Bombardier Pacific Ventures for consideration consisting of full satisfaction of $246,292 owed by the Company to Bombardier Pacific Ventures.  David R. Koos, the Company’s Chairman of the Board of Directors, President, CEO, Secretary, and Acting CFO, is the sole beneficial owner of Bombardier Pacific Ventures.

No underwriters were retained to serve as placement agents for the sale. The Shares were sold directly through the management of the Company. No commission or other consideration was paid in connection with the sale of the Shares

The offer and sale of the Shares was exempt from the registration provisions of the Securities Act of 1933, as amended, by reason of Section 4(2) thereof.

On June 21, 2007, the Company issued 331,597 common shares to Venture Bridge Advisors for consideration consisting of  full satisfaction of $82,900 owed by the Company to Venture Bridge Advisors  .

No underwriters were retained to serve as placement agents for the sale. The Shares were sold directly through the management of the Company. No commission or other consideration was paid in connection with the sale of the Shares

The offer and sale of the Shares was exempt from the registration provisions of the Securities Act of 1933, as amended, by reason of Section 4(2) thereof.

On July 30, 2007, the Company issued 566,217 common shares to Bombardier Pacific Ventures in satisfaction of  the principal amount  of $141,554  owed by the Company to Bombardier Pacific Ventures. David R. Koos, the Company’s Chairman of the Board of Directors, President, CEO, Secretary, and Acting CFO, is the sole beneficial owner of Bombardier Pacific Ventures.

No underwriters were retained to serve as placement agents for the sale. The shares were sold directly through the management of the Company. No commission or other consideration was paid in connection with the sale of the shares

The offer and sale of the shares was exempt from the registration provisions of the Securities Act of 1933, as amended, by reason of Section 4(2) thereof.

 

On July 31, 2007, the Company issued 760,000 common shares for cash consideration of $190,000.

The Net Proceeds of the sale, which were $190,000, will be utilized by the Company for working capital.

No underwriters were retained to serve as placement agents for the sale. The shares were sold directly through the management of the Company. No commission or other consideration was paid in connection with the sale of the shares

The offer and sale of the shares was exempt from the registration provisions of the Securities Act by reason of Section 4(2) thereof and Rule 506 of Regulation D thereunder.