Item 1. Business
We were incorporated in the State of Nevada on September 24, 2008 as JB Clothing Corporation. Until July 10, 2009, our principal business objective was the offering of active/leisure fashion design clothing.
On July 10, 2009 we abandoned our efforts in the field of active/leisure fashion design clothing when we acquired 100% of the share capital of Entest BioMedical, Inc., a California corporation, (“Entest CA”) from Bio-Matrix Scientific Group, Inc. (“BMSN”) for consideration consisting of 10,000,000 shares of the common stock of the Company and the cancellation of 10,000,000 shares of the Company owned and held by Mr. Rick Plote.
As a result of this transaction, the former stockholder of Entest CA held approximately 70% of the voting capital stock of the Company immediately after the transaction. For financial accounting purposes, this acquisition was a reverse acquisition of the Company by Entest CA under the purchase method of accounting, and was treated as a recapitalization with Entest CA as the acquirer..
Upon acquisition of Entest CA, we abandoned our efforts in the field of active/leisure fashion design clothing. On July 12, 2009 we adopted the name of Entest CA when we changed our name to Entest BioMedical, Inc. On June 18, 2015 Entest established Zander Therapeutics, Inc., currently a majority owned subsidiary.. We intend to engage primarily in the development and commercialization of veterinary medical therapies which we intend to license from other entities as well as develop internally
On June 23, 2015 Regen Biopharma, Inc. (“Regen”) entered into an agreement (“Agreement”) with Zander Therapeutics, Inc. (“Zander”) 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. The Agreement was amended on September 12, 2017 to grant an exclusive worldwide right and license for the development and commercialization of all intellectual property controlled by Regen exclusive of trademarks (“License IP”) for non-human veterinary therapeutic use.
Pursuant to the Agreement, Zander shall pay to Regen a 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 or in common stock of Entest BioMedical Inc. valued as of the lowest closing price on the principal exchange upon which said common stock trades publicly within the 14 trading days prior to issuance.
Pursuant to the Agreement, Zander shall pay to Regen 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 Regen 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 Regen receives payment pursuant to the terms and conditions of the Agreement).
Zander is obligated pay to Regen 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 Regen:
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 Regen 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 Regen 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.
The Chairman and Chief Executive Officer of Regen is David R. Koos who also serves as the Chairman and Chief Executive Officer of the Company and Zander.
The President of Regen is Harry Lander who also serves as President of Zander.
The Chief Financial Officer of Regen is Todd Caven who also serves as Chief Financial Officer of Zander.
On September 28, 2015 Entest issued 8,000,000 of its common shares to Regen on behalf Zander in satisfaction of the license initiation fee.
During the quarter ended November 30, 2016 Entest paid $17,000 to Regen on behalf of Zander as a partial payment of the July 15th, 2016 liability.
On May 30, 2017 the Entest issued 83,000 shares of its Non Voting Convertible Preferred Stock on behalf of Zander to Regen in satisfaction of $83,000 of the July 15th, 2016 liability.
On July 24th, 2017 Entest issued 102,852 shares of its Non Voting Convertible Preferred Stock on behalf of Zander to Regen in satisfaction of a $100,000 anniversary fee and $2,852 of minimum royalties payable by Zander Therapeutics pursuant to the Agreement.
As of November 22, 2017, we have not licensed, developed or commercialized any existing veterinary medical therapies. Intellectual properties licensed to Zander by Regen Biopharma, Inc., a company under common control with us, comprise the therapeutic concept behind ZAN-100 and ZAN-200, two therapies in early stage development by Zander.
NR2F6
Both of Zander’s products under development will operate through either inhibition or activation by small (low molecular weight) molecules of the nuclear receptor NR2F6. Nuclear receptors are a class of proteins found within cells that are responsible for sensing certain other molecules. In response, these receptors work with other proteins to regulate the expression of specific genes.
ZAN-100
ZAN-100 is intended to be a veterinary cancer therapy. In the opinion of Zander, the studies performed by Hermann-Kleiter et al. (The Nuclear Orphan Receptor NR2F6 Is a Central Checkpoint for Cancer Immune Surveillance. Cell Reports 12, 2072-2085 (2015)) demonstrate that the inhibition of NR2F6 in T cells may yield anti-cancer benefits in small animals. The studies indicate that, in the presence of NR2F6, T cell activation is limited within the tumor microenvironment. Zander believes that inhibition of NR2F6 removes a barrier to the animal’s own immune system’s ability to attack cancer cells. ZAN-100 is intended to be a small molecule therapy whose mode of action will be the inhibition of NR2F6.
High throughput screening assays conducted for Regen Biopharma, Inc. (the licensor of the intellectual property which forms the basis for Zander’s products in development) between July and September of 2016 on thirty thousand compounds yielded four newly discovered small molecule compounds which (a) can bind to the relevant structure in a cellular system and (b) show evidence of the ability to modulate the effects of NR2F6.
ZAN-200
ZAN-200 is intended to be a veterinary arthritis therapy. Rheumatoid arthritis is an immune-mediated disease. This means it is caused by an overreaction of the immune system. In rheumatoid arthritis, the body mistakes some of its own protein for foreign protein. It then makes antibodies against its own protein. In the opinion of Zander, suppression of the immune system through activation of NR2F6 in those immune cells would be an effective therapy. ZAN-200 is intended to operate by activating NR2F6 in the animals’ immune cells.
Ex-vivo assays were performed using immune cells from five dog blood samples. Data derived from those tests demonstrated the ZAN-200 may inhibit T cell activation and production of cytokines, particularly IL-17 and IL-2. IL-17 and IL-2 have been shown to create inflammatory responses leading to arthritic conditions.
We have filed applications with the United States Patent and Trademark Office for patent protection with respect to internally developed intellectual property covering our products in development. As of November 22, 2017 no patent protection has been granted to any intellectual property developed by Zander.
Neither of the Company or Zander has undertaken any discussions with any pharmaceutical companies regarding the commercialization of any products under development. None of Zander or the Company’s products have been approved by any regulatory body for marketing within the United States or anywhere else. No assurance can be given that all or any of Zander or the Company’s currently planned products will ever be commercialized.
Principal Products and Services
NR2F6
Both of Zander’s products under development will operate through either inhibition or activation by small (low molecular weight) molecules of the nuclear receptor NR2F6. Nuclear receptors are a class of proteins found within cells that are responsible for sensing certain other molecules. In response, these receptors work with other proteins to regulate the expression of specific genes.
ZAN-100
Zander has begun development of the ZAN-100 veterinary drug line. ZAN-100 is intended to be a veterinary cancer therapy. In the opinion of Zander, the studies performed by Hermann-Kleiter et al. (The Nuclear Orphan Receptor NR2F6 Is a Central Checkpoint for Cancer Immune Surveillance. Cell Reports 12, 2072-2085 (2015)) demonstrate that the inhibition of NR2F6 in T cells may yield anti-cancer benefits in small animals. The studies indicate that, in the presence of NR2F6, T cell activation is limited within the tumor microenvironment. Zander believes that inhibition of NR2F6 removes a barrier to the animal’s own immune system’s ability to attack cancer cells. ZAN-100 is intended to be a small molecule therapy whose mode of action will be the inhibition of NR2F6.
ZAN-200
Zander has begun development of the ZAN-200 veterinary drug line. ZAN-200 is intended to be a veterinary arthritis therapy. Rheumatoid arthritis is an immune-mediated disease. This means it is caused by an overreaction of the immune system. In rheumatoid arthritis, the body mistakes some of its own protein for foreign protein. It then makes antibodies against its own protein. In the opinion of Zander, suppression of the immune system through activation of NR2F6 in those immune cells would be an effective therapy. ZAN-200 is intended to operate by activating NR2F6 in the animals’ immune cells.
Development Conducted to Date
High Throughput Screening Assay
Initial high throughput screening assays were performed in July to September of 2016 by the contract research organization Proteros, GMBH for Regen Biopharma, Inc. This assay is based on Regen Biopharma Inc.’s screening assay whereby the full-length or ligand-binding domain of NR2F6 Reporter gene assays are used to screen for compounds that modulate gene expression via binding to nuclear hormone receptors. Transfer of this assay to ChemDiv, Inc., another contract research organization, by Regen Biopharma, Inc. was effected in January, 2017.
In molecular biology, a reporter gene is a gene that researchers attach to a regulatory sequence of another gene of interest in bacteria, cell culture, animals or plants. Certain genes are chosen as reporters because the characteristics they confer on organisms expressing them are easily identified and measured, or because they are selectable markers. Reporter genes are often used as an indication of whether a certain gene has been taken up by or expressed in the cell or organism population.
High Throughput Screens (HTS) are recent scientific methods in which hundreds of thousands of experimental samples are subjected to simultaneous testing under given conditions. Through this process one can rapidly identify active compounds, antibodies, or genes that modulate a particular biomolecular pathway. The results of these experiments provide starting points for drug design and for understanding the interaction or role of a particular biochemical process in biology.
HTS performed on behalf of Regen Biopharma, Inc. have been ongoing as of September 9, 2016. As of September 9, 2016 four newly discovered small molecule compounds which (a) can bind to the relevant structure in a cellular system and (b) show evidence of the ability to modulate activity of NR2F6 have been discovered.
Results of any studies conducted by Regen Biopharma, Inc. are being made available to Zander Theraputics, Inc.for use in veterinary drug development and commercialization.
Ex Vivo Assay
Ex-vivo assays were performed using immune cells from canine blood samples from five dogs. The samples were treated with compound at various concentrations and the supernatant assayed for the presence of various cytokines using ELISA-based assays. Enzyme-linked immunosorbent assay (ELISA is a biochemical technique used mainly in immunology to detect the presence of an antibody or an antigen in a sample). These assays were commenced in May, 2017 and are ongoing as of September 9, 2017.
Data derived from the five dog study indicated that the ZAN-200 series drugs could inhibit T cell activation and production of cytokines, particularly IL-17 and IL-2. IL-17 and IL-2 have been shown to create inflammatory responses leading to arthritic conditions.
Distribution methods of the products or services:
It is anticipated that Zander will enter into licensing and/or sublicensing agreements with outside entities in order that Zander may obtain royalty income on the products and services which it may develop and commercialize.
Competitive business conditions and Zander's competitive position in the industry and methods of competition
We have yet to achieve revenues or profits. The veterinary pharmaceutical industry in which we intend to compete are highly competitive and characterized by rapid technological advancement. Many of our competitors have greater resources than we do.
We intend to be competitive by utilizing the services and advice of individuals that we believe have expertise in their field in order that we can concentrate our resources on projects in which products and services in which we have the greatest potential to secure a competitive advantage may be developed and commercialized .
To that effect, Zander has entered into nonemployee consulting agreements with individuals who we believe have a high level of expertise in their professional fields and who have agreed to provide counsel and assistance to Zander in (a) determining the viability of proposed projects (b) obtaining financing for projects and (c) obtaining the resources required to initiate and complete a project in the most cost effective and rapid manner.
These individuals are as follows:
Brian Devine
Mr. Brian Devine has agreed to act as Chairman of Zander’s Business Advisory Board.
Mr. Devine has served as Chairman Emeritus of Petco Holdings, Inc. from March 2016 to October 2016, Chairman of the Board of Directors of Petco Animal Supplies Stores, Inc. from 1994 until March 2016 and as President and Chief Executive Officer of PETCO Animal Supplies, Inc. from 1990 until 2004.
On June 21, 2017 Zander entered into an agreement (“Agreement”) with Mr. Brian Devine whereby Mr. Devine shall serve as Chairman of Zander’s Business Advisory Board.
The term of the Agreement shall commence on June 23, 2017 and shall expire on June 23, 2020. The term of the Agreement may be extended by mutual agreement.
Pursuant to the Agreement:
(a) Mr. Devine shall, for so long as he remains a member of the Business Advisory Board, meet with Zander upon written request, at dates and times mutually agreeable to Candidate and Zander, to discuss any matter involving Zander or its Subsidiaries
(b) Identify and introduce to Zander persons to serve as members of Zander's Business Advisory Board ("Advisory Candidates").
(c) Identify and introduce to Zander potential purchasers of Zander's securities.
Pursuant to the Agreement:
(i) Mr. Devine received 500,000 of the common shares of Zander.
(ii) In the event that an Advisory Candidate identified and introduced by Mr. Devine to Zander serves as a member of the Business Advisory Board of Zander, Mr. Devine shall receive, ten business days subsequent to the completion of 12 months service by the Advisory Candidate as a member of the Business Advisory Board of Zander, a fee paid in the common shares of Zander, equal to 5% of any shares of Zander issued to the Advisory Candidate.
Dr. Thomas Donnelly, DVM
Dr. Thomas Donnelly has agreed to act as a Senior Veterinary Advisor to Zander. Dr. Donnelly is a board-certified specialist in the field of laboratory animal medicine, an Adjunct Associate Professor at Tufts University Cummings School of Veterinary Medicine and a Professor at Ecole Nationale Veterinaire d’Alfort, a French public institution of scientific research and higher education in veterinary medicine.
On August 7, 2017 Zander entered into an agreement (“Agreement”) with Dr. Donnelly whereby Dr. Donnelly shall serve as Senior Veterinary Advisor to Zander. The term of the Agreement shall be from August 17, 2017 and shall expire on August 16, 2018. The term of this Agreement may be extended by mutual consent.
Pursuant to the Agreement:
(a) Dr. Donnelly shall advise Zander on various nominal matters regarding veterinary ''Nominal" is defined as periodic conversations in which Dr. Donnelly is asked for a referral to an appropriate researcher on a specific topic or input on research data Zander is developing.
(b) In the event Dr. Donnelly is requested to provide research services, such services will be negotiated separately between Dr. Donnelly and Zander.
As consideration for his services pursuant to this Agreement, Dr. Donnelly received 500,000 of Zander’s Series M Preferred Shares on August 21, 2017.
Dr. Donnelly is also party to another agreement between the Company and Dr. Donnelly (“ENTB Agreement”) whereby Dr. Donnelly shall provide similar services to Zander as those to be provided under the Agreement.
Consideration pursuant to the ENTB Agreement was 100,000 shares of the Series B Preferred Stock of ENTB (“Compensation Shares”).Within 30 business days subsequent to the effective date of a Registration Statement filed under the Securities Act of 1933, as amended, registering common shares of Zander (“Zander Registration Statement”) Donnelly shall have the right to exchange up to the total number of the Compensation Shares issued pursuant to the terms and conditions of the ENTB Agreement for an equivalent number of the common shares of Zander Therapeutic, Inc. six months subsequent to the date that the Zander Registration Statement is declared effective by the United States Securities and Exchange Commission. The term of the ENTB Agreement is March 1, 2017 to February 29, 2019.
Dr. Thomas Ichim, PhD Senior Research Consultant
Dr. Thomas Ichim has agreed to act as Senior Research Consultant to Zander. Dr. Ichim has served as a director and as President of Creative Medical Technology, Inc. since February 2016, and has served Chief Scientific Officer of Creative Medical Technology Holdings, Inc. since March 2017. Between 2007 and 2015 Dr. Ichim served as Chief Science Officer, Chief Executive Officer, President, and member of the Board of Directors of MediStem Inc., a San Diego-based company engaged in development of endometrial regenerative cells which was acquired in 2014 by Intrexon Corporation. From 2004 until 2007 he served as program manager for biorasi LLC, a clinical research organization. Between October 2012 and September 2015 Dr. Ichim served as Chief Scientific Officer and Director of research at Regen Biopharma, Inc., a company under common control with Zander. Thomas Ichim serves at will and is not party to a consulting contract with Zander
Debbie Dorsee Director of Business Development
Ms. Debbie Dorsee has agreed to act as Director of Business Development for Zander. Ms. Dorsee is the founder and principal officer of the Dorsee Company, a San Diego based public relations firm. Debbie Dorsee serves at will and is not party to a consulting contract with Zander.
Dr. Linda L. Black, DVM, PhD
Dr. Linda L. Black has agreed to act as a Senior Veterinary Advisor to Zander.
On March 20, 2017 the Company entered into an agreement (“Agreement”) with Dr. Black whereby Dr. Black shall serve as Senior Veterinary Advisor to Zander. The term of the Agreement shall be from March 20 2017 and shall expire on March 19, 2018. The term of this Agreement may be extended by mutual consent.
Pursuant to the Agreement:
(a) Dr. Black shall advise Zander on various nominal matters regarding veterinary ''Nominal" is defined as periodic conversations in which Dr. Donnelly is asked for a referral to an appropriate researcher on a specific topic or input on research data Zander is developing.
(b) In the event Dr. Black is requested to provide research services, such services will be negotiated separately between Dr. Black and Zander.
(c) As consideration of the performance of services pursuant to this Agreement, Black shall receive 100,000 shares of the Series B Preferred Stock of the Company (“Compensation Shares”).Within 30 business days subsequent to the effective date of a Registration Statement filed under the Securities Act of 1933, as amended, registering common shares of Zander (“Zander Registration Statement”) Black shall have the right to exchange up to the total number of the Compensation Shares issued pursuant to the terms and conditions of this Agreement for an equivalent number of the common shares of Zander Therapeutic, Inc. six months subsequent to the date that the Zander Registration Statement is declared effective by the United States Securities and Exchange Commission.
Dr. Black currently serves as Chief Operating Officer and Vice President of Clinical Science for Medicus Biosciences, a biotech company focused on drug delivery for ophthalmology, advanced wound healing, osteoarthritis, and regenerative medicine applications both veterinary and non-veterinary.
On June 20th, 2017 Zander issued 500,000 of Zander’s Series M Preferred shares as consideration for services provided by Dr. Black to Zander.
Jonathan Baell, Ph.D.
On August 16th 2017 Professor Jonathan Baell entered into an agreement (“Agreement”) with Zander whereby, pursuant to the Agreement:
(a)
Baell shall advise Zander on various nominal matters regarding veterinary. ''Nominal" is defined as periodic conversations in which Baell is asked for a referral to an appropriate researcher on a specific topic or input on research data Zander is developing.
(b)
In the event Baell is requested to provide research services, such services will be negotiated separately between Baell and Zander.
The term of the Agreement is from August 17, 2017 to August 18, 2018. Baell was issued 400,000 of Zander’s Series M Preferred stock pursuant to the terms of the Agreement. 100,000 of Zander’s Series M Preferred stock was issued to Baell prior to entering into the Agreement.
Prof. Jonathan Baell, Ph.D. is a Larkins Fellow, Co-Director of the Australian Translational Medicinal Chemistry Facility and an National Health and Medical Research Council Senior Research Fellow at Monash Institute of Pharmaceutical Sciences (MIPS) located in Australia.
Robin Gasser Ph.D., BVM, DVM, DVSc
On August 7th 2017 Professor Robin Gasser entered into an agreement (“Agreement”) with Zander whereby, pursuant to the Agreement:
(a)
Gasser shall advise Zander on various nominal matters regarding veterinary ''Nominal" is defined as periodic conversations in which Gasser is asked for a referral to an appropriate researcher on a specific topic or input on research data Zander is developing.
(b)
In the event Gasser is requested to provide research services, such services will be negotiated separately between Gasser and Zander.
The term of the Agreement is from August 17, 2017 to August 16, 2018. Gasser was issued 500,000 of Zander’s Series M Preferred stock pursuant to the terms of the Agreement.
Prof. Gasser is a Professor at the University of Melbourne Faculty of Veterinary Science and serves as President of the Australian Society for Parasitology
Sources and availability of raw materials and the names of principal suppliers
The supplies and materials required to conduct our operations are available through a wide variety of sources and may be obtained through a wide variety of sources.
Patents, trademarks, licenses, franchises, concessions, royalty agreements or labor contracts, including duration
Other than that license granted by Regen to Zander whereby Regen granted to Zander an exclusive worldwide right and license for the development and commercialization of intellectual property controlled by Regen for non-human veterinary therapeutic use for a term of fifteen years, Zander and/or the Company has not been granted any license to develop and commercialize any third party intellectual property.
Company has been granted no patents. Certain intellectual property licensed to Zander by Regen has been granted patent protection (“Patented IP”). The Patented IP is as follows:
US Patent #8389708
METHOD OF CANCER TREATMENT USING SIRNA SILENCING
The present invention is a method for the treatment of cancer involving tumor derived immunosuppression in a subject. The method comprises administering to a subject one or more siRNA constructs capable of inhibiting the expression of an immunosuppressive molecule. The invention also provides siRNA constructs and compositions.
US Patent #9091696
MODULATION OF NR2F6 AND METHODS AND USES THEREOF
The application provides methods of modulating NR2F6 in a cell or animal in need thereof by administering an effective amount of a NR2F6 modulator.
US Patent #8263571
GENE SILENCING OF THE BROTHER OF THE REGULATOR OF IMPRINTED SITES (BORIS)
The Company and/or Zander has no trademarks.
The Company and/or Zander is not party to any binding labor contracts.
Need for any government approval of principal products or services, effect of existing or probable governmental regulations on the business
The Center for Veterinary Medicine (“CVM”) at the United States Food and Drug Administration (“FDA”) regulates animal pharmaceuticals under the Food, Drug and Cosmetics Act. Our current proposed products are animal pharmaceuticals regulated by the CVM. Manufacturers of animal health pharmaceuticals must show their products to be safe, effective and produced by a consistent method of manufacture. The CVM’s basis for approving a drug application is documented in a Freedom of Information Summary. We will be required to conduct post-approval monitoring of FDA approved pharmaceutical products and to submit reports of product quality defects, adverse events or unexpected results to the CVM’s Surveillance and Compliance group. Each other country outside the United States of America has its own regulatory requirements for approving and marketing veterinary pharmaceuticals which the Company must comply with prior to marketing animal drugs in those countries.
Amount spent during the last fiscal year on research and development activities
During the fiscal year ended August 31, 2017 we expended $124,770 on research and development activities.
Costs and effects of compliance with environmental laws (federal, state and local);
Entest has not incurred any unusual or significant costs to remain in compliance with any environmental laws and does not expect to incur any unusual or significant costs to remain in compliance with any environmental laws in the foreseeable future.
Number of total employees and number of full-time employees
As of November 22, 2017, the consolidated Company has 3 employee of which 1 is full time.
Item 2.
Item 2. Properties
On November 1, 2011, the Company entered into an agreement to lease approximately 2,320 square feet of office space beginning December 1, 2011 for a period of five years.
Rent to be charged to the Company pursuant to the lease is as follows:
$2,996 per month for the period beginning December 1, 2011 and ending November 30, 2012
$3,116 per month for the period beginning December 1, 2012 and ending November 30, 2013
$3,241 per month for the period beginning December 1, 2013 and ending November 30, 2014
$3,371 per month for the period beginning December 1, 2014 and ending November 30, 2015
$3,506 per month for the period beginning December 1, 2015 and ending November 30, 2016
On November 27, 2016 the lease was extended until November 30, 2021
Rent to be charged to the Company pursuant to the extension is as follows:
$2,996 per month for the period beginning December 1, 2016 and ending November 30, 2017
$3,116 per month for the period beginning December 1, 2017 and ending November 30, 2018
$3,241 per month for the period beginning December 1, 2018 and ending November 30, 2019
$3,371 per month for the period beginning December 1, 2019 and ending November 30, 2020
$3,506 per month for the period beginning December 1, 2020 and ending November 30, 2021
This property is utilized as office space. The Company believes that the foregoing property is adequate to meet its current needs. While it is anticipated that the Company will require access to laboratory facilities in the future, the Company believes that access to such facilities are available from a variety of sources.
Item 3.
Item 3. Legal Proceedings
None
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders
No matter was submitted during the fourth quarter of the fiscal year covered by this report to a vote of security holders, through the solicitation of proxies or otherwise.
PART II
Item 5.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
The Company’s common stock is a "penny stock," as defined in Rule 3a51-1 under the Exchange Act. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its sales person in the transaction, and monthly account statements showing the market value of each penny stock held in the customer's account. In addition, the penny stock rules require that the broker-dealer, not otherwise exempt from such rules, must make a special written determination that the penny stock is suitable for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure rules have the effect of reducing the level of trading activity in the secondary market for a stock that becomes subject to the penny stock rules. So long as the common stock of the Company is subject to the penny stock rules, it may be more difficult to sell common stock of the Company.
The Company’s authorized capital stock consists of 500,000,000 shares of common stock with a par value $0.0001, and 5,000,000 shares of preferred stock with a par value $0.0001 per share (of which 100,000 are designated as Series AA Preferred Stock, 4,400,000 are designated as Series B Preferred Stock and 300,000 are designated as Series AAA Preferred Stock) and 3,000,000 shares authorized of Non Voting Convertible Preferred Stock, par value $1.00 . As of November 22,2017 Entest BioMedical, Inc. had 49,171,072 common shares outstanding, 728, 009 Series B Preferred shares outstanding , 667 Series AA preferred shares outstanding, 533 Series AAA preferred shares outstanding, and 1001533 shares of the Company’s Non Voting Convertible Preferred Stock outstanding.
(a)
Our common stock is traded on the OTC Pink Tier of OTC Markets under the symbol "ENTB”. Below is the range of high and low bid information for our common equity for each quarter within the last two fiscal years. These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.
Holders
As of August 31, 2017 there were approximately 348 holders of our Common Stock.
Dividends
No cash dividends were paid during the fiscal year ending August 31, 2017. We do not expect to declare cash dividends in the immediate future.
Recent Sales of Unregistered Securities
Common Shares
On January 27, 2017 the Company issued 100,000 of its Common Shares (“Shares”) to Synergy Business Consultants, Inc. as consideration for services.
The Shares were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended. No underwriters were retained to serve as placement agents for the sale. The Shares were sold directly through our management. No commission or other consideration was paid in connection with the sale of the Shares. There was no advertisement or general solicitation made in connection with this Offer and Sale of Shares. A legend was placed on the certificate that evidences the Shares stating that the Shares have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale of the Shares.
On February 7, 2017 the Company issued 1,000,000 of its Common Shares (“Shares”) in satisfaction of $10,000 of principal indebtedness.
The Shares were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended. No underwriters were retained to serve as placement agents for the sale. The Shares were sold directly through our management. No commission or other consideration was paid in connection with the sale of the Shares. There was no advertisement or general solicitation made in connection with this Offer and Sale of Shares. A legend was placed on the certificate that evidences the Shares stating that the Shares have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale of the Shares.
On February 10, 2017 the Company issued 2,000,000 of its Common Shares (“Shares”)in satisfaction of $20,000 of principal indebtedness.
The Shares were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended. No underwriters were retained to serve as placement agents for the sale. The Shares were sold directly through our management. No commission or other consideration was paid in connection with the sale of the Shares. There was no advertisement or general solicitation made in connection with this Offer and Sale of Shares. A legend was placed on the certificate that evidences the Shares stating that the Shares have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale of the Shares.
On March 10, 2017 the Company issued 100,000 of its Common Shares (“Shares”)as consideration for services.
The Shares were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended. No underwriters were retained to serve as placement agents for the sale. The Shares were sold directly through our management. No commission or other consideration was paid in connection with the sale of the Shares. There was no advertisement or general solicitation made in connection with this Offer and Sale of Shares. A legend was placed on the certificate that evidences the Shares stating that the Shares have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale of the Shares.
On April 3, 2017 the Company issued 750,000 of its Common Shares (“Shares”) for consideration of $15,000
The Shares were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended. No underwriters were retained to serve as placement agents for the sale. The Shares were sold directly through our management. No commission or other consideration was paid in connection with the sale of the Shares. There was no advertisement or general solicitation made in connection with this Offer and Sale of Shares. A legend was placed on the certificate that evidences the Shares stating that the Shares have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale of the Shares.
On May 30, 2017 the Company issued 100,000 of its Common Shares (“Shares”)to Synergy Business Consultants, Inc. as consideration for services.
The Shares were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended. No underwriters were retained to serve as placement agents for the sale. The Shares were sold directly through our management. No commission or other consideration was paid in connection with the sale of the Shares. There was no advertisement or general solicitation made in connection with this Offer and Sale of Shares. A legend was placed on the certificate that evidences the Shares stating that the Shares have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale of the Shares.
On July 24, 2017 the Company issued 2,450,000 of its Common Shares (“Shares”) to consultants as consideration for services.
The Shares were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended. No underwriters were retained to serve as placement agents for the sale. The Shares were sold directly through our management. No commission or other consideration was paid in connection with the sale of the Shares. There was no advertisement or general solicitation made in connection with this Offer and Sale of Shares. A legend was placed on the certificate that evidences the Shares stating that the Shares have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale of the Shares.
On September 8, 2017 the Company issued 2,500,000 Common Shares (“Shares”) in connection with a conversion of 25,000 Non Voting Convertible Preferred Shares.
The Shares were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended. No underwriters were retained to serve as placement agents for the sale. The Shares were sold directly through our management. No commission or other consideration was paid in connection with the sale of the Shares. There was no advertisement or general solicitation made in connection with this Offer and Sale of Shares.
Series B Preferred Shares
On March 10, 2017 the Company issued 500,000 of its Series B Preferred Shares(“Shares”) as additional consideration towards the purchase of investment securities.
The Shares were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended. No underwriters were retained to serve as placement agents for the sale. The Shares were sold directly through our management. No commission or other consideration was paid in connection with the sale of the Shares. There was no advertisement or general solicitation made in connection with this Offer and Sale of Shares. A legend was placed on the certificate that evidences the Shares stating that the Shares have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale of the Shares.
On March 10, 2017 the Company issued 100,000 of its Series B Preferred Shares(“Shares”) as consideration for services
The Shares were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended. No underwriters were retained to serve as placement agents for the sale. The Shares were sold directly through our management. No commission or other consideration was paid in connection with the sale of the Shares. There was no advertisement or general solicitation made in connection with this Offer and Sale of Shares. A legend was placed on the certificate that evidences the Shares stating that the Shares have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale of the Shares.
On March 31, 2017 the Company issued 100,000 of its Series B Preferred Shares (“Shares”) as consideration for services
The Shares were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended. No underwriters were retained to serve as placement agents for the sale. The Shares were sold directly through our management. No commission or other consideration was paid in connection with the sale of the Shares. There was no advertisement or general solicitation made in connection with this Offer and Sale of Shares. A legend was placed on the certificate that evidences the Shares stating that the Shares have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale of the Shares.
Non Voting Convertible Preferred Shares
On May 30, 2017 the Company issued 840,681 of its Non Voting Convertible Preferred Shares (“Shares”) in satisfaction of $840,681 of principal indebtedness.
The Shares were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended. No underwriters were retained to serve as placement agents for the sale. The Shares were sold directly through our management. No commission or other consideration was paid in connection with the sale of the Shares. There was no advertisement or general solicitation made in connection with this Offer and Sale of Shares. A legend was placed on the certificate that evidences the Shares stating that the Shares have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale of the Shares.
On May 30, 2017 the Company issued 83,000 of its Non Voting Convertible Preferred Shares (“Shares”) in satisfaction of $83,000 of expenses accrued but unpaid.
The Shares were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended. No underwriters were retained to serve as placement agents for the sale. The Shares were sold directly through our management. No commission or other consideration was paid in connection with the sale of the Shares. There was no advertisement or general solicitation made in connection with this Offer and Sale of Shares. A legend was placed on the certificate that evidences the Shares stating that the Shares have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale of the Shares.
On July 24, 2017 the Company issued 102,852 of its Non Voting Convertible Preferred Shares (“Shares”) in satisfaction of $102,852 of expenses accrued but unpaid.
The Shares were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended. No underwriters were retained to serve as placement agents for the sale. The Shares were sold directly through our management. No commission or other consideration was paid in connection with the sale of the Shares. There was no advertisement or general solicitation made in connection with this Offer and Sale of Shares. A legend was placed on the certificate that evidences the Shares stating that the Shares have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale of the Shares.
On September 8, 2017 25,000 of the Company’s Non Voting Convertible Preferred Shares were converted into 2,500,000 Common Shares (“Shares”)
The Shares were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended. No underwriters were retained to serve as placement agents for the sale. The Shares were sold directly through our management. No commission or other consideration was paid in connection with the sale of the Shares. There was no advertisement or general solicitation made in connection with this Offer and Sale of Shares.
Common Shares of Zander Therapeutics Inc.
On April 10, 2017 Zander issued 8,000 of its common shares (“Shares”) for consideration of $20,000.
The Shares were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended. No underwriters were retained to serve as placement agents for the sale. The Shares were sold directly through our management. No commission or other consideration was paid in connection with the sale of the Shares. There was no advertisement or general solicitation made in connection with this Offer and Sale of Shares. A legend was placed on the certificate that evidences the Shares stating that the Shares have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale of the Shares.
On July 10, 2017 Zander issued 100,000 common shares (“Shares”)to the Chairman of Zander’s Business Advisory Board for consideration of $100,000.
The Shares were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended. No underwriters were retained to serve as placement agents for the sale. The Shares were sold directly through our management. No commission or other consideration was paid in connection with the sale of the Shares. There was no advertisement or general solicitation made in connection with this Offer and Sale of Shares. A legend was placed on the certificate that evidences the Shares stating that the Shares have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale of the Shares
On July 10, 2017 Zander issued 500,000 common shares (“Shares”) to the Chairman of Zander’s Business Advisory Board as consideration for services.
The Shares were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended. No underwriters were retained to serve as placement agents for the sale. The Shares were sold directly through our management. No commission or other consideration was paid in connection with the sale of the Shares. There was no advertisement or general solicitation made in connection with this Offer and Sale of Shares. A legend was placed on the certificate that evidences the Shares stating that the Shares have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale of the Shares
On October 30, Zander issued 900,000 of its common shares (“Shares”) for consideration of $900,000.
The Shares were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended. No underwriters were retained to serve as placement agents for the sale. The Shares were sold directly through our management. No commission or other consideration was paid in connection with the sale of the Shares. There was no advertisement or general solicitation made in connection with this Offer and Sale of Shares. A legend was placed on the certificate that evidences the Shares stating that the Shares have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale of the Shares
Preferred Shares of Zander Therapeutic, Inc.
On June 15, 2017 Zander issued 500,000 of its Series M Preferred Shares (“Shares”) to David Koos as consideration for services
The Shares were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended. No underwriters were retained to serve as placement agents for the sale. The Shares were sold directly through our management. No commission or other consideration was paid in connection with the sale of the Shares. There was no advertisement or general solicitation made in connection with this Offer and Sale of Shares. A legend was placed on the certificate that evidences the Shares stating that the Shares have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale of the Shares
On June 15, 2017 Zander issued 500,000 of its Series M Preferred Shares (“Shares”) to Harry Lander as consideration for services
The Shares were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended. No underwriters were retained to serve as placement agents for the sale. The Shares were sold directly through our management. No commission or other consideration was paid in connection with the sale of the Shares. There was no advertisement or general solicitation made in connection with this Offer and Sale of Shares. A legend was placed on the certificate that evidences the Shares stating that the Shares have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale of the Shares
On June 15, 2017 Zander issued 500,000 of its Series M Preferred Shares to Todd Caven (“Shares”) as consideration for services
The Shares were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended. No underwriters were retained to serve as placement agents for the sale. The Shares were sold directly through our management. No commission or other consideration was paid in connection with the sale of the Shares. There was no advertisement or general solicitation made in connection with this Offer and Sale of Shares. A legend was placed on the certificate that evidences the Shares stating that the Shares have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale of the Shares
On June 20, 2017 Zander issued 1,000,000 of its Series M Preferred Shares (“Shares”) for Services
The Shares were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended. No underwriters were retained to serve as placement agents for the sale. The Shares were sold directly through our management. No commission or other consideration was paid in connection with the sale of the Shares. There was no advertisement or general solicitation made in connection with this Offer and Sale of Shares. A legend was placed on the certificate that evidences the Shares stating that the Shares have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale of the Shares
On July 10, 2017 Zander issued 100,000 of its Series M Preferred Shares (“Shares”) for Services
The Shares were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended. No underwriters were retained to serve as placement agents for the sale. The Shares were sold directly through our management. No commission or other consideration was paid in connection with the sale of the Shares. There was no advertisement or general solicitation made in connection with this Offer and Sale of Shares. A legend was placed on the certificate that evidences the Shares stating that the Shares have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale of the Shares
On August 21, 2017 Zander issued 1,400,000 of its Series M Preferred Shares (“Shares”) for Services
The Shares were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended. No underwriters were retained to serve as placement agents for the sale. The Shares were sold directly through our management. No commission or other consideration was paid in connection with the sale of the Shares. There was no advertisement or general solicitation made in connection with this Offer and Sale of Shares. A legend was placed on the certificate that evidences the Shares stating that the Shares have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale of the Shares
On September 15, 2017 Zander issued 200 of its Series AA Preferred Shares (“Shares”) to David Koos, Zander’s Chief Executive Officer, for Services.
The Shares were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended. No underwriters were retained to serve as placement agents for the sale. The Shares were sold directly through our management. No commission or other consideration was paid in connection with the sale of the Shares. There was no advertisement or general solicitation made in connection with this Offer and Sale of Shares. A legend was placed on the certificate that evidences the Shares stating that the Shares have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale of the Shares
Item 6.
Item 6. Selected Financial Data
As we are a “smaller reporting company” as defined by Rule 229.10(f)(1), we are not required to provide the information required by this Item.
Item 7.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
As of August 31, 2017, we had Cash in the amount of $86,559 and as of August 31, 2016 we had Cash in the amount of $859.
The increase in cash of 9,979% is primarily attributable to sales of securities for cash and additional borrowings offset by costs incurred in the operation of the business of Entest and Zander.
As of August 31, 2017 we had Accrued Interest Receivable of $908 and as of August 31 2017 we had Accrued Interest Receivable of 0.
The increase in Accrued Interest Receivable is primarily attributable to interest earned but not yet paid on funds lent to Regen Biopharma, Inc., a company under common control with the Company, by the Company and Zander.
As of August 31, 2017 we had Prepaid Expenses of $58,652 and as of the end of the same period ended 2016 we had Prepaid Expenses of $8,000.
The increase in Prepaid Expenses of approximately 633% is attributable to $50,652 of fees prepaid to consultants.
As of August 31, 2017 we had Accrued Rent Receivable of 0 and as of the end of the same period of 2016 we had Accrued Rent Receivable of $15,000.
The decrease in Accrued Rent Receivable is attributable to payment in full of all rental charges incurred by Regen Biopharma, Inc. due to the Company. Regen Biopharma, Inc. is under common control with the Company.
As of August 31, 2017 we had Securities Available for Sale in the amount of $190,050 and as of August 31, 2016 we had Securities Available for Sale in the amount of $0.
The increase in Securities Available for Sale is attributable to the purchase by the Company of 3,500,000 of the Series A Preferred shares of Regen Biopharma, Inc. from an unaffiliated third party.
As of August 31, 2017 we had Accounts Payable of $28,446 and as of August 31, 2016 we had Accounts Payable of $112,162.
The decrease in Accounts Payable of approximately 74.6% is primarily attributable to
(a)the derecognition by the Company during the quarter ended November 30, 2016 of $65,092 of aged payables which are effectively uncollectible by the creditors due to the expiration of the statute of limitations imposed upon such collection activity pursuant to relevant statute.
(b) the derecognition by the Company during the quarter ended May 31, 2017 of $11,605 of aged payables which are effectively uncollectible by the creditors due to the expiration of the statute of limitations imposed upon such collection activity pursuant to relevant statute.
As of August 31, 2017 we had Notes Payable of $13,501 and as of August 31, 2016 we had Notes Payable of $455,601.
The decrease in Notes Payable of approximately 97% is primarily attributable to:
The settlement by the Company of $30,000 of principal indebtedness through the issuance of equity securities during the nine months ended May 31, 2017.
The settlement of $840,681 of principal indebtedness through the issuance of equity securities during the nine months ended May 31, 2017.
Offset by borrowings by the Company from third party lenders.
As of August 31, 2017 we had Accrued Expenses of $269,398 and as of August 31, 2016 we had Accrued Expenses of $426,965.
The decrease in Accrued Expenses of approximately 36.9% is primarily attributable to:
(a) Payment during the year ended August 31, 2017 of $102,000 of salary accrued but unpaid to David R. Koos, the Company’s sole officer.
(b) Partial payment of $17,000 to Regen Biopharma, Inc. against $100,000 of expenses incurred as a result of that agreement entered into by and between Regen Biopharma, Inc. ( “Regen”) and Zander Therapeutics, Inc. ( “Zander”) 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. David Koos , CEO of the Company and Zander, serves as Chairman and Chief Executive Officer of Regen.
(c) Settlement of $83,000 due to Regen Biopharma, Inc incurred as a result of that agreement entered into by and between Regen Biopharma, Inc. ( “Regen”) and Zander Therapeutics, Inc. ( “Zander”) 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. David Koos , CEO of the Company and Zander, serves as Chairman and Chief Executive Officer of Regen.
(d) Settlement of $102,852 due to Regen Biopharma, Inc incurred as a result of that agreement entered into by and between Regen Biopharma, Inc. ( “Regen”) and Zander Therapeutics, Inc. ( “Zander”) 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. David Koos , CEO of the Company and Zander, serves as Chairman and Chief Executive Officer of Regen.
Offset by:
$12,335 of accruals of interest payable during the quarter ended November 30, 2016.
$14,445 of accruals of interest payable during the quarter ended February 28, 2017.
$15,881 of accruals of interest payable during the quarter ended May 31, 2017.
$304 of accrued interest payable during the quarter ended August 31, 2017.
$957 of accrued tax payable incurred in connection with vesting of Restricted Stock Awards.
Material Changes in Results of Operations
Revenues from continuing operations were $0 for the year ended August 31, 2017 and -0- for the year ended August 31, 2016. Net Losses from continuing operations were $664,792 for the year ended August 31, 2017 and $506,690 for the same period ended 2016.
The increase in net losses from continuing operations of 31.2 % is primarily attributable to the recognition during the quarter ended February 28, 2017 of 107,700 of expense attributable to Issuance of Securities for less than Fair Value offset by the recognition during the quarter ended November 30, 2016 of $65,092 of income attributable to the derecognition of $65,092 of aged payables which are effectively uncollectible by the creditors due to the expiration of the statute of limitations imposed upon such collection activity pursuant to relevant statute and the recognition during the quarter ended May 31 , 2017 of $11,605 of income attributable to the derecognition by the Company during the quarter ended May 31, 2017 of $11,605 of aged payables which are effectively uncollectible by the creditors due to the expiration of the statute of limitations imposed upon such collection activity pursuant to relevant statute.
As of August 31, 2017 we had $86,559 cash on hand and current liabilities of $319,345 such liabilities consisting of Accounts Payable, Notes Payable, Amounts due to Others and Accrued Expenses.
We feel we will not be able to satisfy our cash requirements over the next twelve months and shall be required to seek additional financing.
We currently plan to raise additional funds primarily by offering securities for cash.
There is no guarantee that we will be able to raise any capital through any type of offerings. We cannot assure that we will be successful in obtaining additional financing necessary to implement our business plan. We have not received any commitment or expression of interest from any financing source that has given us any assurance that we will obtain the amount of additional financing in the future that we currently anticipate. For these and other reasons, we are not able to assure that we will obtain any additional financing or, if we are successful, that we can obtain any such financing on terms that may be reasonable in light of our current circumstances.
As of November 22, 2017 we are not party to any binding agreements which would commit Entest to any material capital expenditures.
Item 7A.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
As we are a smaller reporting company, as defined by Rule 229.10(f)(1), we are not required to provide the information required by this Item.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Entest BioMedical, Inc.
We have audited the accompanying balance sheet of Entest BioMedical, Inc. as of August 31, 2017 and August 31, 2016 and the related statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the years in the two-year period ended August 31, 2017. Entest BioMedical, Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Entest BioMedical, Inc. as of August 31, 2017 and August 31, 2016, and the results of its operations and its cash flows for each of the years in the two-year period ended August 31, 2017 in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 4 to the financial statements, the Company has no revenues, has negative working capital at August 31, 2017, has incurred recurring losses and recurring negative cash flow from operating activities, and has an accumulated deficit which raises substantial doubt about its ability to continue as a going concern. Management’s plans concerning these matters are also described in Note 4. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ AMC Auditing
AMC Auditing
Las Vegas, Nevada
November 27, 2017
Item 8.
Item 8. Financial Statements and Supplementary Data
Entest BioMedical, Inc.
Notes to Consolidated Financial Statements
As of August 31, 2017
NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS
Entest Biomedical, Inc ( The “Company”) was incorporated in the State of Nevada on September 24, 2008 as JB Clothing Corporation. Until July 10, 2009, the Company’s principal business objective was the offering of active/leisure fashion design clothing.
On July 10, 2009 the Company abandoned its efforts in the field of active/leisure fashion design clothing when it acquired 100% of the share capital of Entest BioMedical, Inc., a California corporation, (“Entest CA”).
On June 18, 2015 the Company formed Zander Therapeutics, Inc. (“Zander”) , a Nevada corporation. Zander is a 63.45% owned subsidiary of the Company as of August 31, 2017.
The Company intends to engage primarily in the development of veterinary medical applications which we intend to license from other entities as well as develop internally.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. BASIS OF ACCOUNTING
The financial statements have been prepared using the basis of accounting generally accepted in the United States of America. Under this basis of accounting, revenues are recorded as earned and expenses are recorded at the time liabilities are incurred. The Company has adopted an August 31 fiscal year-end. The Company recognizes revenue from services and product sales when the following four revenue recognition criteria are met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the selling price is fixed or determinable, and collectability is reasonably assured.
B. PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of Entest CA the Company’s wholly owned subsidiary and Zander; the Company’s majority owned subsidiary. Significant inter-company transactions have been eliminated.
C. USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
D. CASH EQUIVALENTS
The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.
E. PROPERTY AND EQUIPMENT
As of August 31, 2017 Property and Equipment consists of $0
F. FAIR VALUE OF FINANCIAL INSTRUMENTS
Fair value is the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. A fair value hierarchy requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of inputs required by the standard that the Company uses to measure fair value:
Level 1: Quoted prices in active markets for identical assets or liabilities
Level 2: Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.
Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
The Company’s financial instruments as of August 31, 2017 consisted of $13,501 of Notes Payable and $8,000 due to TheraCyte, Inc.. The fair value of all of the Company’s financial instruments as of August 31, 2017 were valued according to the Level 3 input. The carrying amount of the financial instruments is equal to the fair value as determined by the Company.
The Company has determined that there are no Level 1 or Level 2 inputs for determining the fair value of the Company’s financial instruments. Fair value was determined by the Company utilizing its own assumptions and estimation. There were no transfers between levels for the period presented.
G. INCOME TAXES
The Company accounts for income taxes using the liability method prescribed by ASC 740, “ Income Taxes. ” Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the year in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized as income or loss in the period that includes the enactment date.
The Company applied the provisions of ASC 740-10-50, “Accounting for Uncertainty in Income Taxes”, which provides clarification related to the process associated with accounting for uncertain tax positions recognized in our financial statements. Audit periods remain open for review until the statute of limitations has passed. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the Company’s liability for income taxes. Any such adjustment could be material to the Company’s results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period. As of August 31, 2017 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.
H. BASIC EARNINGS (LOSS) PER SHARE
The Financial Accounting Standards Board (FASB) issued Accounting Standards Codification (ASC) 260, "Earnings Per Share", which specifies the computation, presentation and disclosure requirements for earnings (loss) per share for entities with publicly held common stock. ASC 260 requires the presentation of basic earnings (loss) per share and diluted earnings (loss) per share. The Company has adopted the provisions of ASC 260 effective from inception. Basic net loss per share amounts is computed by dividing the net income by the weighted average number of common shares outstanding. All convertible debt has an anti-dilutive effect on the EPS, therefore Diluted earnings per share are the same as basic earnings per share.
NOTE 3. RECENT ACCOUNTING PRONOUNCEMENTS
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.
The following accounting standards updates were recently issued and have not yet been adopted by the Company. These standards are currently under review to determine their impact on the Company’s consolidated financial position, results of operations, or cash flows.
In May 2014, FASB issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. The revenue recognition standard affects all entities that have contracts with customers, except for certain items. The new revenue recognition standard eliminates the transaction-and industry-specific revenue recognition guidance under current GAAP and replaces it with a principle-based approach for determining revenue recognition. Public entities are required to adopt the revenue recognition standard for reporting periods beginning after December 15, 2016, and interim and annual reporting periods thereafter. Early adoption is not permitted for public entities. 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 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.
NOTE 4. GOING CONCERN
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company generated net losses of $8,721,498 during the period from August 22, 2008 (inception) through August 31, 2017. This condition raises substantial doubt about the Company's ability to continue as a going concern. The Company's continuation as a going concern is dependent on its ability to meet its obligations, to obtain additional financing as may be required and ultimately to attain profitability. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Management plans to raise additional funds primarily by offering securities for cash. Management has 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. During the quarter ended May 31, 2017 Entest Biomedical, Inc. raised $15,000 through the sale for cash of equity securities. During the quarter ended May 31, 2017 Zander Therapeutics, Inc. raised $20,000 through the sale for cash of equity securities. During the quarter ended August 31, 2017 Zander Therapeutics, Inc. raised $100,000 through the sale for cash of equity securities.
NOTE 5. NOTES PAYABLE
As of August 31, 2017
Notes Payable:
$1,000 lent to the Company by Blackbriar Partners is due and payable February 17, 2018 and bears simple interest at a rate of 10% per annum
$7,000 lent to the Company by Blackbriar Partners is due and payable February 28, 2018 and bears simple interest at a rate of 10% per annum.
Blackbriar Partners is controlled by David R. Koos , the Company’s sole officer and director.
As of August 31, 2017 the Company remains indebted to David R. Koos , the Company’s sole officer and director, in the principal amount of $100 due and payable in whole or in part at the demand of David Koos and bearing simple interest at a rate of 15% per annum.
Amounts due to Regen Biopharma Inc. as of August 31, 2017 are due and payable at the demand of the holder and bear simple interest at a rate of 10% per annum. David R. Koos , the Company’s sole officer, serves as Chairman and Chief Executive officer of Regen Biopharma, Inc. Harry Lander, President and Chief Scientific Officer of Regen Biopharma Inc. serves as President and Chief Scientific Officer of Zander Therapeutics, Inc. The Chief Financial Officer of Regen Biopharma, Inc.is Todd Caven who also serves as Chief Financial Officer of Zander Therapeutics, Inc .
NOTE 6. RELATED PARTY TRANSACTIONS
As of August 31, 2017 the Company remains indebted to David R. Koos , the Company’s sole officer and director, in the principal amount of $100 due and payable in whole or in part at the demand of David Koos and bearing simple interest at a rate of 15% per annum.
As of August 31, 2017 the Company remains indebted to Blackbriar Partners in the principal amount of $8,000 of which $1,000 is due and payable February 17, 2018 and bears simple interest at a rate of 10%per annum and of which $7,000 is due and payable February 28, 2018 and bears simple interest at a rate of 10% per annum.
As of August 31, 2017 the Company remains indebted to Regen Biopharma, Inc. in the principal amount of $4,551 due and payable in whole or in part at the demand of the holder and bearing simple interest at a rate of 10% per annum. David R. Koos , the Company’s sole officer, serves as Chairman and Chief Executive officer of Regen Biopharma, Inc. Harry Lander, President and Chief Scientific Officer of Regen Biopharma Inc. serves as President and Chief Scientific Officer of Zander Therapeutics, Inc. The Chief Financial Officer of Regen Biopharma, Inc.is Todd Caven who also serves as Chief Financial Officer of Zander Therapeutics, Inc .
On October 1, 2014 Regen Biopharma Inc. entered into an agreement to sublease approximately 2,320 square feet of office space from the Company. Entest Biomedical Inc. is under common control with Regen Biopharma, Inc. as the Chairman and CEO of the Company also serves as the Chairman and CEO of Regen Biopharma, Inc. The sublease is on a month to month basis and rent payable to the Company by Regen Biopharma Inc is equal to the rent payable to the lessor by the Company and is to be paid in at such time specified in accordance with the original lease agreement between the Company and the lessor. On January 20, 2015 the sublease was amended retroactive to January 1, 2015 as follows:
The rent payable to Entest BioMedical, Inc. by the subtenant is equal to Five Thousand Dollars per month ($5,000) and is to be paid in at such time specified in accordance with the original lease agreement between the Entest BioMedical, Inc. (“Entest”) and the lessor. All charges for utilities connected with premises which are to be paid under the master lease shall be paid by Regen Biopharma, Inc. for the term of this sublease to the extent that such charges exceed the difference between the rent payable to the lessor by Entest under the master lease and the rent payable to Entest by Regen Biopharma, Inc.
On June 23, 2015 Regen Biopharma, Inc. ( “Regen”) entered into an agreement (“Agreement”) with Zander whereby Regen granted to Zander an exclusive worldwide right and license for the development and commercialization of certain intellectual property controlled by Regen (“ License IP”) for non-human veterinary therapeutic use for a term of fifteen years.
Pursuant to the Agreement, Zander shall pay to Regen 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 or in common stock of Entest BioMedical Inc. valued as of the lowest closing price on the principal exchange upon which said common stock trades publicly within the 14 trading days prior to issuance.
Pursuant to the Agreement, Zander shall pay to Regen 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 Regen 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 Regen receives payment pursuant to the terms and conditions of the Agreement).
Zander is obligated pay to Regen 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 Regen:
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 Regen 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 Regen 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 September 28, 2015 the Company issued 8,000,000 of its common shares to Regen in satisfaction of the license initiation fee.
During the quarter ended November 30, 2016 the Company paid $17,000 to Regen as a partial payment of the July 15th, 2016 liability.
On May 30, 2017 the “Company issued 83,000 shares of its Non Voting Convertible Preferred Stock (“ Shares”) to Regen in satisfaction of $83,000 of the July 15th, 2016 liability.
On July 24, 2017 the Company issued 102,852 of its Non Voting Convertible Preferred Stock (“ Shares”) to Regen in satisfaction of $102,852 of liabilities incurred pursuant to the Agreement.
On February 28, 2016, the Company purchased from a third party 3,500,000 shares of the Series A Preferred stock of Regen Biopharma, Inc for consideration consisting of $5,000 cash and 500,000 shares of the Company’s Series B Preferred Stock.
During the quarter ended August 31, 2017, David R. Koos , the Company’s Chairman and Chief Executive Officer, satisfies a $500 Account Payable to an unrelated party on behalf of the Company. The Company is under no obligation to repay this amount to David R. Koos.
NOTE 7. INCOME TAXES
As of August 31, 2017 the Company has a Deferred Tax Asset of $2,969,949 completely attributable to net operating loss carry forwards of approximately $8,735,145(which expire 20 years from the date the loss was incurred) consisting of:
(a)$13,647 of Net Operating Loss carry forwards acquired in the reverse acquisition of Entest BioMedical, Inc., a California corporation, and
(b)$8,721,498 of Net Operating Loss carry forwards attributable to Entest BioMedical, Inc.
Realization of deferred tax assets is dependent upon sufficient future taxable income during the period that deductible temporary differences and carry forwards are expected to be available to reduce taxable income. A valuation allowance is recorded when it is “more likely-than-not” that a deferred tax asset will not be realized. In addition, the reverse acquisition in which Entest BioMedical, Inc. was involved in 2009 has resulted in a change of control. Internal Revenue Code Sec 382 limits the amount of income that may be offset by net operating loss (NOL) carryovers after an ownership change. As a result, the Company has recorded a valuation allowance reducing all deferred tax assets to $-0-.
Income tax is calculated at the 34% Federal Corporate Rate.
NOTE 8. ACQUISITION OF ENTEST CA
On July 10, 2009 the Company acquired 100% of Entest CA, a California corporation and wholly owned subsidiary of the Company, from BMSN for consideration consisting of (a) the issuance to BMSN of 10,000,000 newly issued common shares of Entest and (b) the return by Mr. Rick Plote of 10,000,000 shares of Entest’s common stock previously issued to him by Entest for cancellation.
NOTE 9. ACQUISITION OF THE ASSETS OF PET POINTERS, INC.
On January 4, 2011 Entest CA acquired from Pet Pointers, Inc., a California corporation doing business as McDonald Animal Hospital (“Seller”), and Dr. Gregory McDonald DVM (“McDonald”) all the goodwill from McDonald and assets of Seller except cash and accounts receivables used in connection with the operation of a veterinary medical clinic located at 225 S. Milpas Street, Santa Barbara, CA 93103 (the "Business").
Consideration for the acquisition consisted of:
I. $70,000 in cash
II. $210,000 of the Company’s common shares valued at the closing price per share as of January 4, 2011
III. Payment of no more than $78,000 to a creditor of the Seller to be paid in monthly installments of $1,500 per month
IV. Payment of no more than $25,000 to additional creditors of the Seller to be paid in monthly installments of $825 per month
V. Payment of $50,000 to McDonald on the first business day of the fourth month following the closing of the acquisition (“Closing”).
NOTE 10. DISPOSITION OF THE ASSETS OF PET POINTERS, INC.
On November 28, 2012 the “Company executed an agreement (“Agreement”) with Gregory McDonald ("McDonald"), Pet Pointers, Inc. ("Pet Pointer") whereby Mc Donald and Pet Pointer would acquire from the Company all assets (with the exception of cash and accounts receivable) utilized by the Company in the operation of the McDonald Animal Hospital, a full service veterinary clinic owned and operated by the Company and located in Santa Barbara, California (“McDonald Asset Sale”).
On October 10, 2012 a Complaint (“Complaint”) was filed in the Superior Court of the State of California against the Company and David Koos by McDonald, a former employee of the Company, alleging breach of contract and breach of the covenant of good faith and dealing in connection with the assumption of lease obligations by the Company in connection with the acquisition of the assets of Pet Pointers, Inc breach of contract and breach of the covenant of good faith and dealing in connection with an employment agreement enters into with McDonald inc connection with the Acquisition, breach of contract in connection with the Acquisition purchase agreement, breach of the covenant of good faith and dealing in connection with the Acquisition purchase agreement, implied indemnity in connection to amounts owed by McDonald to Anthony and Judi Marinelli, the Internal Revenue Service, and the California Franchise Tax Board, intentional misrepresentation, negligent misrepresentation , failure to pay wages and violations of Sections 2802, 203, and 2806 of the California Labor Code. The Complaint sought judgment for nominal damages, actual damages, compensatory damages, lost wages, compensation, expenses wage benefits and penalties pursuant to California Labor Code Sections 203 et al, 2802 and 2806, indemnification, accrued interest, punitive damages, costs of suit and attorney’s fees.
As consideration to the Company for the assets acquired, McDonald and Pet Pointers provided to the Company a General release whereby McDonald and Pet Pointer waive, release and discharge the Company and their respective assignees, officers, directors, shareholders, boards, owners, employees, attorneys, agents, trustors, trustees, beneficiaries, heirs, successors, and representatives from all known and unknown claims, demands, causes of action, attorney's fees, costs, or expenses including:
(1) All claims relating to the Complaint.
(2) Those owed by McDonald to Anthony and Judi Marinelli which the Company became obligated to pay on McDonald’s behalf pursuant to the asset purchase agreement entered into between the Company and Gregory McDonald and Pet Pointers, Inc on January 4, 2011.
(3) Those amounts owed by McDonald to the Internal Revenue Service which the Company became obligated to pay on McDonald’s behalf pursuant to the asset purchase agreement entered into between the Company and Gregory McDonald and Pet Pointers, Inc on January 4, 2011.
(4) Those amounts owed by McDonald to the California Franchise Tax Board which the Company became obligated to pay on McDonald’s behalf pursuant to the asset purchase agreement entered into between the Company and Gregory McDonald and Pet Pointers, Inc on January 4, 2011.
Assets disposed of pursuant to the Agreement include approximately $4,840 of Property Plant and Equipment net of accumulated depreciation as well as all inventory held at the McDonald Animal Hospital.
Assets disposed of pursuant to the Agreement also include
(i) Essentially all intellectual property, including computer software, utilized in connection with the operation of the McDonald Animal Hospital
(ii) All telephone numbers, fax numbers, service marks, trademarks, trade names, fictitious business names, websites, business email addresses, vendor lists, promotional materials, vendor records and any and all business records including, but not limited to, such items stored in computer memories, microfiche, paper record or by any other means relevant to the operation of the McDonald Animal Hospital.
(iii) All customer lists, customer contacts, and any and all customer records that are related to the McDonald Animal Hospital.
As a result of the agreement, the Company recorded a non-cash pre-tax charge for the impairment of goodwill recorded in connection with the acquisition of the McDonald Animal Hospital of approximately $405,000 for the quarter ended November 30, 2012.
Pursuant to the Agreement, the Company is obligated to make payment of $13,000 within five days of the Closing of the Agreement as such term is defined in the Agreement.
Pursuant to the Agreement, the Company agrees to waive, release and discharge McDonald and Pet Pointer from all known and unknown claims, demands, causes of action, attorney's fees, costs, or expenses.
NOTE 11. COMMITMENTS AND CONTINGENCIES
On November 1, 2011, the Company entered into an agreement to lease approximately 2,320 square feet of office space beginning December 1, 2011 for a period of five years.
Rent to be charged to the Company pursuant to the lease is as follows:
$2,996 per month for the period beginning December 1, 2011 and ending November 30, 2012
$3,116 per month for the period beginning December 1, 2012 and ending November 30, 2013
$3,241 per month for the period beginning December 1, 2013 and ending November 30, 2014
$3,371 per month for the period beginning December 1, 2014 and ending November 30, 2015
$3,506 per month for the period beginning December 1, 2015 and ending November 30, 2016
On November 27, 2016 the lease was extended until November 30, 2021
Rent to be charged to the Company pursuant to the extension is as follows:
$2,996 per month for the period beginning December 1, 2016 and ending November 30, 2017
$3,116 per month for the period beginning December 1, 2017 and ending November 30, 2018
$3,241 per month for the period beginning December 1, 2018 and ending November 30, 2019
$3,371 per month for the period beginning December 1, 2019 and ending November 30, 2020
$3,506 per month for the period beginning December 1, 2020 and ending November 30, 2021
This property is utilized as office space. The Company believes that the foregoing property is adequate to meet its current needs. While it is anticipated that the Company will require access to laboratory facilities in the future, the Company believes that access to such facilities are available from a variety of sources.
NOTE 12. STOCKHOLDERS EQUITY
The stockholders' equity section of the Company contains the following classes of capital stock as of August 31, 2017:
Common Stock:
$0.0001 par value, 500,000,000 shares authorized and 46,670,472 shares issued and outstanding as of August 31, 2017.
Preferred Stock:
$0.0001 par value 5,000,000 shares authorized of which:
(a) 100,000 are authorized as Series AA Preferred Stock of which 667 shares are issued and outstanding as of August 31, 2017 and
(b) 4,400,000 are authorized as Series B Preferred Stock of which 728,009 shares are issued and outstanding as of August 31, 2017 and
(c) 300,000 are authorized as Series AAA Preferred Stock of which 533 shares are issued and outstanding as of August 31 2017.
Upon any liquidation, dissolution, or winding up of the Company, whether voluntary or involuntary (collectively, a “Liquidation”), before any distribution or payment shall be made to any of the holders of Common Stock or any other series of preferred stock, the holders of Series B Preferred Stock shall be entitled to receive out of the assets of the Company, whether such assets are capital, surplus or earnings, an amount equal to $0.10 per share of Series B Preferred Stock (the “Liquidation Amount”) plus all declared and unpaid dividends thereon, for each share of Series B Preferred Stock held by them.
If, upon any Liquidation, the assets of the Company shall be insufficient to pay the Liquidation Amount, together with declared and unpaid dividends thereon, in full to all holders of Series B Preferred Stock, then the entire net assets of the Company shall be distributed among the holders of the Series B Preferred Stock, ratably in proportion to the full amounts to which they would otherwise be respectively entitled and such distributions may be made in cash or in property taken at its fair value (as determined in good faith by the Board), or both, at the election of the Board.
Non Voting Convertible Preferred Stock having a $1.00 par value:
3,000,000 shares authorized of which 1,026,533 shares are issued and outstanding as of August 31, 2017 .
Non Voting Convertible Preferred Stock shall convert at the option of the holder into shares of the corporation’s common stock at a conversion price equal to the greater of $0.01 per share or seventy percent (70%) of the lowest Closing Price for the five (5) trading days immediately preceding written receipt by the corporation of the holder’s intent to convert.
“CLOSING PRICE" shall mean the closing bid price for the corporation’s common stock on the Principal Market on a Trading Day as reported by Bloomberg Finance L.P.
“PRINCIPAL MARKET" shall mean the principal trading exchange or market for the corporation’s common stock.
“TRADING DAY” shall mean a day on which the Principal Market shall be open for business.
NOTE 13. INVESTMENT SECURITIES
On February 28, 2017 the Company purchased 3,500,000 of the Series A Preferred shares of Regen Biopharma, Inc.for consideration consisting of $5,000 and 500,000 shares of the Company’s Series B Preferred stock.
The Series A Preferred shares of Regen Biopharma, Inc. described above constitute the Company’s sole investment securities as of August 31, 2017.
As of August 31, 2017:
NOTE 15. STOCK TRANSACTIONS
Common Shares
On January 27, 2017 the Company issued 100,000 of its Common Shares to Synergy Business Consultants, Inc. as consideration for services.
On February 7, 2017 the Company issued 1,000,000 of its Common Shares in satisfaction of $10,000 of principal indebtedness.
On February 10, 2017 the Company issued 2,000,000 of its Common Shares in satisfaction of $20,000 of principal indebtedness.
On March 10, 2017 the Company issued 100,000 of its Common Shares as consideration for services.
On April 3, 2017 the Company issued 750,000 of its Common Shares for consideration of $15,000
On May 30, 2017 the Company issued 100,000 of its Common Shares to Synergy Business Consultants, Inc. as consideration for services.
On July 24, 2017 the Company issued 2,450,000 of its Common Shares to consultants as consideration for services.
Preferred Shares
On March 10, 2017 the Company issued 500,000 of its Series B Preferred Shares as additional consideration towards the purchase of investment securities.
On March 10, 2017 the Company issued 100,000 of its Series B Preferred Shares as consideration for services
On March 31, 2017 the Company issued 100,000 of its Series B Preferred Shares as consideration for services
Non Voting Convertible Preferred Shares
On May 30, 2017 the Company issued 840,681 of its Non Voting Convertible Preferred Shares in satisfaction of $840,681 of principal indebtedness.
On May 30, 2017 the Company issued 83,000 of its Non Voting Convertible Preferred Shares in satisfaction of $83,000 of expenses accrued but unpaid.
The issuance of 923,681 of the Company’s Non Voting Convertible Preferred Shares during the quarter ended May 31, 2017 resulted in the recognition of a Beneficial Conversion Feature of $576,804 which was immediately amortized.
On July 24, 2017 the Company issued 102,852 of its Non Voting Convertible Preferred Shares in satisfaction of $102,852 of expenses accrued but unpaid.
The issuance of 102,852 of the Company’s Non Voting Convertible Preferred Shares during the quarter ended August 31, 2017 resulted in the recognition of a Beneficial Conversion Feature of $74,801 which was immediately amortized.
Common Shares of Zander Therapeutics Inc.
On April 10, 2017 Zander issued 8,000 of its common shares for consideration of $20,000.
On July 10, 2017 Zander issued 100,000 common shares to the Chairman of Zander’s Business Advisory Board for consideration of $100,000.
On July 10, 2017 Zander issued 500,000 common shares to the Chairman of Zander’s Business Advisory Board as consideration for services.
Preferred Shares of Zander Therapeutic, Inc.
On June 15, 2017 Zander issued 500,000 of its Series M Preferred Shares to David Koos as consideration for services
On June 15, 2017 Zander issued 500,000 of its Series M Preferred Shares to Harry Lander as consideration for services
On June 15, 2017 Zander issued 500,000 of its Series M Preferred Shares to Todd Caven as consideration for services
On June 20, 2017 Zander issued 1,000,000 of its Series M Preferred Shares for Services
On July 10, 2017 Zander issued 100,000 of its Series M Preferred Shares for Services
On August 21, 2017 Zander issued 1,400,000 of its Series M Preferred Shares for Services
NOTE 16. SUBSEQUENT EVENTS
On September 8, 2017 the Company issued 2,500,000 Common Shares in connection with a conversion of 25,000 Non Voting Convertible Preferred Shares.
On September 14, 2017 Zander Therapeutics Inc. 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”). 1,000,000 of Zander’s authorized preferred stock is designated as Series AA Preferred Stock. With respect to each matter submitted to a vote of stockholders of Zander, 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).
On any voluntary or involuntary liquidation, dissolution or winding up of Zander, the holders of the Series AA Preferred Stock shall receive, out of assets legally available for distribution to Zander's stockholders, a ratable share in the assets of Zander.
On September 15, 2017 Zander issued 200 of its Series AA Preferred Shares to David Koos, Zander’s Chief Executive Officer, for Services.
On October 30, Zander issued 900,000 of its common shares for consideration of $900,000.
Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
During the Registrant's most two most recent fiscal years there were no disagreements with AMC Auditing (“AMC”) , the Company’s independent registered public accounting firm, whether or not resolved, on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to AMC’s satisfaction, would have caused it to make reference to the subject matter of the disagreement in connection with its report on the Registrant's financial statements.
Item 9A.
Item 9A. Controls and Procedures
a) Evaluation of disclosure controls and procedures.
The principal executive officer and principal financial officer have evaluated the Company’s disclosure controls and procedures as of August 31, 2017. Based on this evaluation, they have concluded that the disclosure controls and procedures were effective to ensure that the information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms and to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. David Koos is the Company’s CEO and acting CFO. He functions as the Company’s principal executive officer and principal financial officer.
b) Management’s annual report on internal control over financial reporting.
Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) promulgated under the Securities and Exchange Act of 1934. Rule 13a-15(f) defines internal control over financial reporting as follows:
“The term internal control over financial reporting is defined as a process designed by, or under the supervision of, the issuer's principal executive and principal financial officers, or persons performing similar functions, and effected by the issuer's board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the issuer;
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management and directors of the issuer; and
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the issuer's assets that could have a material effect on the financial statements.”
The Company’s internal control over financial reporting is a process designed under the supervision of the Company’s management to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with U.S. generally accepted accounting principles.
In designing and evaluating our disclosure controls and procedures, our management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only a reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met.
The Company’s management assessed the effectiveness of its internal control over financial reporting as of August 31, 2017 based on the framework in 2013 Committee of Sponsoring Organizations of the Treadway Commission, or COSO, framework. Based.” Based on its assessment, management believes that, as of August 31, 2017, the Company’s internal control over financial reporting is effective.
Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the company to provide only management's report in this annual report. This exemption for smaller reporting companies provided under the temporary rules referenced above has been made permanent under Section 989G of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
(c) There have been no changes during the quarter ended August 31, 2017 in the Company’s internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting
Item 10.
Item 10. Directors, Executive Officers and Corporate Governance
On June 19, 2009 the Board of Directors of the Company elected David R. Koos, a director of the Company and appointed Dr. Koos President, Chief Executive Officer, Secretary, Chief Financial Officer, Principal Accounting Officer of the Company. Dr. Koos resigned as Chief Financial Officer on March 31, 2010 and assumed the position of Acting Chief Financial Officer and Principal Accounting Officer on August 8, 2011 upon the resignation of Tammy L. Reynolds who served as Chief Financial Officer from the period from March 31, 2010 to August 8, 2011.
Education:
DBA - Finance (December 2003)
Atlantic International University
Ph.D. - Sociology (September 2003)
Atlantic International University
MA - Sociology (June 1983)
University of California - Riverside, California
Five Year Employment History:
Code of Ethics
On November 11, 2009 we adopted a Code of Ethics pursuant to Section 406 of the Sarbanes-Oxley Act of 2002
Director Independence
Audit Committee and Audit Committee Financial Expert
The sole member of the Company’s board of Directors may not be considered independent as he is also its sole officer. The Company is not a "listed company" under Securities and Exchange Commission (“SEC”) rules and is therefore not required to have an audit committee comprised of independent directors. The Company does not currently have an audit committee, however, for certain purposes of the rules and regulations of the SEC and in accordance with the Sarbanes-Oxley Act of 2002, the Company’s Board of Directors is deemed to be its audit committee and as such functions as an audit committee and performs some of the same functions as an audit committee including: (1) selection and oversight of our independent accountant; (2) establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal controls and auditing matters; and (3) engaging outside advisors. The Board of Directors has determined that its member is able to read and understand fundamental financial statements and has substantial business experience that results in that member's financial sophistication. Accordingly, the Board of Directors believes that its member has the sufficient knowledge and experience necessary to fulfill the duties and obligations that an audit committee would have.
Nominating and Compensation Committees
The Company does not have standing nominating or compensation committees, or committees performing similar functions. The board of directors believes that it is not necessary to have a compensation committee at this time because the functions of such committee are adequately performed by the board of directors. The board of directors also is of the view that it is appropriate for the Company not to have a standing nominating committee because the board of directors has performed and will perform adequately the functions of a nominating committee. The Company is not a "listed company" under SEC rules and is therefore not required to have a compensation committee or a nominating committee.
Shareholder Communications
There has not been any defined policy or procedure requirements for stockholders to submit recommendations or nomination for directors. There are no specific, minimum qualifications that the board of directors believes must be met by a candidate recommended by the board of directors. Currently, the entire board of directors decides on nominees, on the recommendation of any member of the board of directors followed by the board’s review of the candidates’ resumes and interview of candidates. Based on the information gathered, the board of directors then makes a decision on whether to recommend the candidates as nominees for director. The Company does not pay any fee to any third party or parties to identify or evaluate or assist in identifying or evaluating potential nominee.
Because management and the Board of Directors of the Company are the same people, the Board of Directors has determined not to adopt a formal methodology for communications from shareholders on the belief that any communication would be brought to the Board of Directors’ attention by virtue of the co-extensive capacities of the Board of Directors.
Executive Compensation
SUMMARY COMPENSATION TABLE
*Includes 120,000 in salary earned by David Koos which was accrued but unpaid for the fiscal year ended August 31, 2016
** Does not include 102,000 in salary accrued but unpaid during prior periods paid to David Koos during the fiscal year ended August 31, 2017
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table sets forth information known to the Company with respect to the beneficial ownership of each class of the Company’s capital stock as of November 22, 2017 for (1) each person known by the Company to beneficially own more than 5% of each class of the Company’s voting securities, (2) each executive officer, (3) each of the Company’s directors and (4) all of the Company’s executive officers and directors as a group. As of November 22, 2017 Entest BioMedical, Inc. had 49,171,072 common shares outstanding, 728, 009 Series B Preferred shares outstanding , 667 Series AA preferred shares outstanding, 533 Series AAA preferred shares outstanding, and 1001533 shares of the Company’s Non Voting Convertible Preferred Stock outstanding.
Based on 49,171,072 shares issued and outstanding as of November 22, 2017
*Includes 66,667 common shares owned by Bio-Matrix Scientific Group, Inc. (David Koos is CEO, President and Chairman of Bio-Matrix Scientific Group, Inc.). Includes 8,000,000 common shares owned by Regen Biopharma, Inc. (David Koos is CEO and Chairman of Regen Biopharma, Inc.)
Based on 728,009 shares issued and outstanding as of November 22, 2017
*Includes 8,334 Series B Preferred shares owned by Bio-Matrix Scientific Group, Inc. (David Koos is CEO, President and Chairman of Bio-Matrix Scientific Group, Inc.).
Based on 667 shares issued and outstanding as of November 22, 2017
Based on 533 shares issued and outstanding as of November 22, 2017
Based on 1,001,533 shares issued and outstanding as of November 22, 2017
* Includes 185,852 shares owned by Regen Biopharma, Inc. David R. Koos is Chairman and Chief Executive Officer of both Entest Biomedical, Inc. and Regen Biopharma, Inc.
Item 13.
Item 13. Certain Relationships and Related Transactions, and Director Independence
As of August 31, 2017 the Company remains indebted to David R. Koos , the Company’s sole officer and director, in the principal amount of $100 due and payable in whole or in part at the demand of David Koos and bearing simple interest at a rate of 15% per annum.
As of August 31, 2017 the Company remains indebted to Blackbriar Partners in the principal amount of $8,000 of which $1,000 is due and payable February 17, 2018 and bears simple interest at a rate of 10%per annum and of which $7,000 is due and payable February 28, 2018 and bears simple interest at a rate of 10% per annum.
As of August 31, 2017 the Company remains indebted to Regen Biopharma, Inc. in the principal amount of $4,551 due and payable in whole or in part at the demand of the holder and bearing simple interest at a rate of 10% per annum. David R. Koos , the Company’s sole officer, serves as Chairman and Chief Executive officer of Regen Biopharma, Inc. Harry Lander, President and Chief Scientific Officer of Regen Biopharma Inc. serves as President and Chief Scientific Officer of Zander Therapeutics, Inc. The Chief Financial Officer of Regen Biopharma, Inc.is Todd Caven who also serves as Chief Financial Officer of Zander Therapeutics, Inc .
On October 1, 2014 Regen Biopharma Inc. entered into an agreement to sublease approximately 2,320 square feet of office space from the Company. Entest Biomedical Inc. is under common control with Regen Biopharma, Inc. as the Chairman and CEO of the Company also serves as the Chairman and CEO of Regen Biopharma, Inc. The sublease is on a month to month basis and rent payable to the Company by Regen Biopharma Inc is equal to the rent payable to the lessor by the Company and is to be paid in at such time specified in accordance with the original lease agreement between the Company and the lessor. On January 20, 2015 the sublease was amended retroactive to January 1, 2015 as follows:
The rent payable to Entest BioMedical, Inc. by the subtenant is equal to Five Thousand Dollars per month ($5,000) and is to be paid in at such time specified in accordance with the original lease agreement between the Entest BioMedical, Inc. (“Entest”) and the lessor. All charges for utilities connected with premises which are to be paid under the master lease shall be paid by Regen Biopharma, Inc. for the term of this sublease to the extent that such charges exceed the difference between the rent payable to the lessor by Entest under the master lease and the rent payable to Entest by Regen Biopharma, Inc.
On June 23, 2015 Regen Biopharma, Inc. ( “Regen”) entered into an agreement (“Agreement”) with Zander whereby Regen granted to Zander an exclusive worldwide right and license for the development and commercialization of certain intellectual property controlled by Regen (“ License IP”) for non-human veterinary therapeutic use for a term of fifteen years.
Pursuant to the Agreement, Zander shall pay to Regen 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 or in common stock of Entest BioMedical Inc. valued as of the lowest closing price on the principal exchange upon which said common stock trades publicly within the 14 trading days prior to issuance.
Pursuant to the Agreement, Zander shall pay to Regen 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 Regen 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 Regen receives payment pursuant to the terms and conditions of the Agreement).
Zander is obligated pay to Regen 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 Regen:
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 Regen 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 Regen 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 September 28, 2015 the Company issued 8,000,000 of its common shares to Regen in satisfaction of the license initiation fee.
During the quarter ended November 30, 2016 the Company paid $17,000 to Regen as a partial payment of the July 15th, 2016 liability.
On May 30, 2017 the “Company issued 83,000 shares of its Non Voting Convertible Preferred Stock (“ Shares”) to Regen in satisfaction of $83,000 of the July 15th, 2016 liability.
On July 24, 2017 the Company issued 102,852 of its Non Voting Convertible Preferred Stock (“ Shares”) to Regen in satisfaction of $102,852 of liabilities incurred pursuant to the Agreement.
On February 28, 2016, the Company purchased from a third party 3,500,000 shares of the Series A Preferred stock of Regen Biopharma, Inc for consideration consisting of $5,000 cash and 500,000 shares of the Company’s Series B Preferred Stock.
During the quarter ended August 31, 2017, David R. Koos , the Company’s Chairman and Chief Executive Officer, satisfies a $500 Account Payable to an unrelated party on behalf of the Company. The Company is under no obligation to repay this amount to David R. Koos.
Director Independence
Audit Committee and Audit Committee Financial Expert
The Company’s sole director may not be considered independent as he is also an officer. The Company is not a "listed company" under Securities and Exchange Commission (“SEC”) rules and is therefore not required to have an audit committee comprised of independent directors. The Company does not currently have an audit committee, however, for certain purposes of the rules and regulations of the SEC and in accordance with the Sarbanes-Oxley Act of 2002, the Company’s Board of Directors is deemed to be its audit committee and as such functions as an audit committee and performs some of the same functions as an audit committee including: (1) selection and oversight of our independent accountant; (2) establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal controls and auditing matters; and (3) engaging outside advisors. The Board of Directors has determined that its sole member is able to read and understand fundamental financial statements and has substantial business experience that results in the member's financial sophistication. Accordingly, the Board of Directors believes that its member has the sufficient knowledge and experience necessary to fulfill the duties and obligations that an audit committee would have.
Nominating and Compensation Committees
The Company does not have standing nominating or compensation committees, or committees performing similar functions. The Board of Directors believes that it is not necessary to have a compensation committee at this time because the functions of such committee are adequately performed by the board of directors. The Board of Directors also is of the view that it is appropriate for the Company not to have a standing nominating committee because the Board of Directors has performed and will perform adequately the functions of a nominating committee. The Company is not a "listed company" under SEC rules and is therefore not required to have a compensation committee or a nominating committee.
Shareholder Communications
There has not been any defined policy or procedure requirements for stockholders to submit recommendations or nomination for directors. There are no specific, minimum qualifications that the board of directors believes must be met by a candidate recommended by the board of directors. Currently, the entire board of directors decides on nominees, on the recommendation of any member of the board of directors followed by the board’s review of the candidates’ resumes and interview of candidates. Based on the information gathered, the board of directors then makes a decision on whether to recommend the candidates as nominees for director. The Company does not pay any fee to any third party or parties to identify or evaluate or assist in identifying or evaluating potential nominee.
The Board of Directors has determined not to adopt a formal methodology for communications from shareholders on the belief that any communication would be brought to the board of directors’ attention by virtue of communication with management
Item 14.
Item 14. Principal Accounting Fees and Services
The following table sets forth the aggregate fees billed to us by AMC Auditing during the period beginning September 1, 2016 and ending August 31, 2017:
Audit Fees: Aggregate fees billed for professional services rendered for the audit of the Company's annual financial statements.
Audit Related Fees: Aggregate fees billed for professional services rendered for assurance and related services that were reasonably related to the performance of the audit or review of our financial statements and are not reported under “Audit Fees” above. During the year ended August 31, 2017 these fees were primarily derived from review of financial statements in the Company's Form 10Q Reports.
All services listed were pre-approved by the Board of Directors, functioning as the Audit Committee in accordance with Section 2(a) 3 of the Sarbanes-Oxley Act of 2002.
The Board has considered whether the services described above are compatible with maintaining the independent accountant's independence and has determined that such services have not adversely affected the independence of AMC Auditing.
Item 15.
Item 15. Exhibit Index
EXHIBIT INDEX
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Entest BioMedical, Inc.
By: /s/David R. Koos
Name: David R. Koos
Title: President, Chairman, Chief
Executive Officer
Date: November 29, 2017.
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on November 25, 2014.
By: /s/ David R. Koos
Name: David R. Koos
Title: President, Chairman of the Board of Directors, Chief Executive Officer, Acting Chief Financial Officer
Date: November 29, 2017.