Notes
to Consolidated Financial Statements
As
of August 31, 2018
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. As of August 31, 2018
Entest owns Zander 34.82% of Zander.
On
February 12, 2018 the Company changed its name to The Entest Group, Inc.
As
of August 31, 2018 the Company is a “Shell Company” as such term is defined in Rule 12(b)(2) promulgated under the
Securities and Exchange Act of 1934 . This Rule defines as Shell Company as a company that has:
(1)
No or nominal operations; and
(2)
Either:
(i)
No or nominal assets;
(ii)
Assets consisting solely of cash and cash equivalents; or
(iii)
Assets consisting of any amount of cash and cash equivalents and nominal other assets.
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. These financial
statement also include the accounts of Zander up to June 10, 2018. 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, 2018 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, 2018 consisted of $ 19,601 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, 2018 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, 2018 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 $10,256,126 during the period from August 22, 2008 (inception) through August 31, 2018. 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
intends to seek business opportunities to review and analyze for purposes of effecting a merger, acquisition or other business
combination with an operating company business.
NOTE
5. NOTES PAYABLE
As
of August 31, 2018
Notes
Payable:
|
David
Koos (See Note 6)
|
|
$
|
2,600
|
|
|
Dunhill
Ross Partners, Inc.
|
|
$
|
850
|
|
|
Blackbriar
Partners (See Note 6)
|
|
|
11,600
|
|
|
Regen
Biopharma, Inc (See Note 6)
|
|
|
4,551
|
|
|
Total
|
|
$
|
19,601
|
|
$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.
$3,000
lent to the Company by Blackbriar Partners is due and payable May 4, 2019 and bears simple interest at a rate of 10% per annum.
$600
lent to the Company by Blackbriar Partners is due and payable August 20, 2019 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, 2018 the Company remains indebted to David R. Koos , the Company’s sole officer and director, in the principal
amount of $2,600 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, 2018 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.
NOTE
6. RELATED PARTY TRANSACTIONS
As
of August 31, 2018 the Company remains indebted to David R. Koos , the Company’s sole officer and director, in the principal
amount of $2,600 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, 2018 the Company remains indebted to Blackbriar Partners in the principal amount of $11,600 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 , of which$3,000 is due and payable May 4, 2019 and bears simple
interest at a rate of 10% per annum and of which $600 is due and payable August 20, 2019 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, 2018 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.
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
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. On July 3,
2018 the Company sold the aforementioned 3,500,000 shares to Zander for consideration consisting of $35,000. David R. Koos, who
serves as Chairman and Chief Executive Officer of Zander also serves as Chairman and Chief Executive Officer of Entest. Zander
is under common control with Entest.
On
July 3, 2018 Zander entered into a sublease agreement with Entest whereby Zander would sublet office space located at 4700 Spring
Street, Suite 304, La Mesa, California 91942 from Entest on a month to month basis for $6,000 per month beginning July 5, 2018.
David
R. Koos, who serves as Chairman and Chief Executive Officer of Zander also serves as Chairman and Chief Executive Officer of Entest.
Zander is under common control with Entest.
NOTE
7. INCOME TAXES
|
As of August 31, 2018
|
|
|
|
Deferred
tax assets:
|
|
|
|
|
|
Net
operating tax carry forwards
|
|
$
|
2,156,652
|
|
|
Other
|
|
|
-0-
|
|
|
|
|
|
|
|
|
Gross
deferred tax assets
|
|
|
2,156,652
|
|
|
Valuation
allowance
|
|
|
(2,156,652
|
)
|
|
Net
deferred tax assets
|
|
$
|
-0-
|
|
As
of August 31, 2018 the Company has a Deferred Tax Asset of $2,156,652 completely attributable to net operating loss
carry forwards of approximately $ 10,269,773(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)
$ 10,256,126 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 21% 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. DECONSOLIDATION OF ZANDER THERAPEUTICS, INC.
On
May 5, 2018, The Company declared the distribution on a pro rata basis as a dividend in kind of 3,000,000 of the common shares
of Zander Therapeutics, Inc., par value $0.0001, currently owned by Entest Group, Inc. to:
(a)
Holders of record of the outstanding common shares of the Company as of the record date, which is May 30, 2018.
(b)
Holders of record of the shares of any outstanding series of the preferred shares of the Company as of the record date, which
is May 30, 2018.
Shareholders
of the Company shall receive one (1) common share of Zander Therapeutics, Inc. for each 17 common and/or preferred shares of the
Company held as of the record date. The distribution of the 3,000,000 common shares of Zander Therapeutics, Inc. to the common
and preferred shareholders of the Company occurred on June 11, 2018 ("Distribution Date").
As
a result of the payment of the abovementioned property dividend, the Company’s percentage of ownership of Zander fell below
50% resulting in the deconsolidation of Zander as of the Distribution Date. As of the Distribution Date all assets and liabilities
attributable to Zander were derecognized by the Company. The Company recognized a $10,034gain as a result of the deconsolidation.
The Property dividend may be deemed to have occurred with a related party as the recipients were shareholders of Entest, including
the Chairman and Chief Executive Officer of Entest and Regen Biopharma, Inc. which is a company under common control with Entest.
The
Company’s remaining share of Zander , which consists of 5,000,000 shares of Zander’s Series M Preferred Stock (“Zander
M Stock”) is accounted for under the Equity Method as of the Distribution Date. The Zander M Stock is carried a Fair Value
and the carrying value is increased by the Company’s proportionate share of earnings of Zander and decreased by cash dividends
paid by Zander as well as the Company’s proportionate share of losses of Zander up to the carrying value . As of August
31, 2018 the carrying value of the Zander M Stock has been decreased by the Company’s proportionate share of the losses
of Zander and is 0. As of August 31, 2018 Entest beneficially owns 34.82% of the share equity of Zander.
5
million shares of Zander Series M Preferred Stock received by the Company on June 15, 2017 in consideration of services rendered
has been valued by the Company as of the deconsolidation date utilizing the following inputs:
|
Fair Value of Intellectual
Property
|
|
|
1,030
|
|
|
prepaid Expenses
|
|
|
168,000
|
|
|
Accounts Payable
|
|
|
454,493
|
|
|
Due from Entest
|
|
|
7,357
|
|
|
Accrued Expenses
|
|
|
2,148
|
|
|
Enterprise Value
|
|
|
633,028
|
|
|
Less: Total Debt
|
|
|
(463,998
|
)
|
|
Enterprise Value available
to Shareholders
|
|
|
169,030
|
|
|
Per Share
|
|
|
0.012286
|
|
The
Chairman and Chief Executive Officer of the Company and Zander is David R. Koos. Zander may be considered a related party of the
Company.
SUMMARY
INFORMATION FOR ZANDER THERAPEUTICS ,INC. FOR THE FISCAL YEAR ENDED AUGUST 31, 2018
|
Revenue
|
|
|
0
|
|
|
Operating
Loss
|
|
|
(2,801,376
|
)
|
|
Net
Loss
|
|
|
(2,780,288
|
)
|
|
Portion
of Net Loss attributable to Entest
|
|
|
(968,1
88
|
)
|
NOTE
12. 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.
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. The Company had no investment securities as of August 31, 2018
As
of August 31, 2017:
|
|
3,500,000
|
|
|
Series
A Preferred shares of Regen Biopharma, Inc
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basis
|
|
|
|
Fair
Value
|
|
|
|
Total
Unrealized Gains in Other Comprehensive Income
|
|
|
|
Net
Unrealized Gain or (Loss) realized during the quarter ended August 31, 2017
|
|
|
$
|
$5,000
|
|
|
$
|
$190,050
|
|
|
|
$185,050
|
|
|
|
$53,550
|
|
NOTE
14. STOCKHOLDERS EQUITY
The
stockholders' equity section of the Company contains the following classes of capital stock as of August 31, 2018:
Common
Stock:
$0.0001
par value, 500,000,000 shares authorized and 49,170,472 shares issued and outstanding as of August 31, 2018.
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 634 shares are issued and outstanding as of August 31, 2018
and
|
|
|
(b)
|
4,400,000
are authorized as Series B Preferred Stock of which 728,073 shares are issued and outstanding as of August 31, 2018 and
|
|
|
(c)
|
300,000
are authorized as Series AAA Preferred Stock of which 534 shares are issued and outstanding as of August
31, 2018.
|
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 August 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 1,001,533 shares are issued and outstanding as of August 31 2018 .
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
15. STOCK TRANSACTIONS
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.
NOTE
16. SUBSEQUENT EVENTS
On
October 2, 2018 Entest Group, Inc. (the “Company”) amended Article 4 of the Company’s Articles of Incorporation
to be and read as follows:
4.
Authorized Shares:
The
aggregate number of shares, which the corporation shall have authority to issue, shall consist of 500,000,000 shares of Common
Stock having a $.0001 par value, and 5,000,000 shares of Preferred Stock having a $.0001 par value and 3,000,000 shares of Non
Voting Convertible Preferred Stock having a $1.00 par value.
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 (i) $0.001 per share or (ii) 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.
The
Common and/or Preferred Stock of the Company may be issued from time to time without prior approval by the stockholders. The Common
and/or Preferred Stock may be issued for such consideration as may be fixed from time to time by the Board of Directors- The Board
of Directors may issue such share of Common and/or Preferred Stock in one or more series, with such voting powers, designations,
preferences and rights or qualifications, limitations or restrictions thereof as shall be stated in the resolution or resolutions.”
On
November 16, 2018 Entest terminated its lease on office space. The property has been assumed by BST Partners which is permitting
the Company to utilize the space free of charge on a week to week basis.
BST
Partners is controlled by David Koos, the Company’s Chairman and Chief Executive Officer.
On
November 16, 2018 Zander Therapeutics Inc. and the Company agreed to terminate Zander’s sublease with the Company ( See
Note 6) effective the rental period commencing November, 2018.
On
November 16, 2018 Regen Biopharma Inc. and the Company agreed to terminate Regen’s sublease with the Company ( See Note
6) effective the rental period commencing November, 2018.
David
R. Koos serves as Chairman and Chief Executive Officer of the Company, Zander Therapeutics, Inc. and Regen Biopharma Inc.
On
November 16, 2018:
Entest
Group, Inc. and David R. Koos agreed to satisfy any and all unpaid interest resulting from accrued interest earned on Notes Payable
to Koos by Entest from the beginning of time to November 30, 2018 by transferring to Koos 3,000,000 shares of the Series M Preferred
stock of Zander Therapeutics, Inc. owned by the Company
Entest
Group, Inc. and Blackbriar Partners (“BP) agreed to satisfy any and all unpaid interest resulting from accrued interest
earned on Notes Payable to BP by Entest from the beginning of time to November 30, 2018 by transferring to BP 20,000 shares of
the Series M Preferred stock of Zander Therapeutics, Inc. owned by the Company. BP is controlled by David Koos the Company’s
sole officer and director.
Entest
Group, Inc. and the Sherman Family Trust (“SFT”) agreed to satisfy any and all unpaid interest resulting from accrued
interest earned on Notes Payable to SFT by Entest from the beginning of time to November 30, 2018 by transferring to SFT 612,500
shares of the Series M Preferred stock of Zander Therapeutics, Inc. owned by the Company.
Entest
Group, Inc. and Dunhill Ross Partners (“DR”) agreed to satisfy any and all unpaid interest resulting from accrued
interest earned on Notes Payable to DR by Entest from the beginning of time to November 30, 2018 by transferring to DR 12,500
shares of the Series M Preferred stock of Zander Therapeutics, Inc. owned by the Company.
Entest
Group, Inc. and the Bio Technology Partners Business Trust (“BPBT”) agreed to satisfy any and all unpaid interest
resulting from accrued interest earned on Notes Payable to BPBT by Entest from the beginning of time to November 30, 2018 by transferring
to BPBT 412,500 shares of the Series M Preferred stock of Zander Therapeutics, Inc. owned by the Company.
Entest
Group, Inc. and the Bio Matrix Scientific Group, Inc. (“BMSN”) agreed to satisfy any and all unpaid interest resulting
from accrued interest earned on Notes Payable to BMSN by Entest from the beginning of time to November 30, 2018 by transferring
to BMSN 5,000 shares of the Series M Preferred stock of Zander Therapeutics, Inc. owned by the Company. David R. Koos serves as
Chairman and Chief Executive Officer of the Company and BMSN.
Entest
Group, Inc. and Bostonia Partners (“BSP”) agreed to satisfy any and all unpaid interest resulting from accrued interest
earned on Notes Payable to BSP by Entest from the beginning of time to November 30, 2018 by transferring to BSP 212,500 shares
of the Series M Preferred stock of Zander Therapeutics, Inc. owned by the Company.
Entest
Group, Inc. and Regen Biopharma, Inc. (“RGBP”) agreed to satisfy any and all unpaid interest resulting from accrued
interest earned on Notes Payable to RGBP by Entest from the beginning of time to November 30, 2018 by transferring to RGBP 250,000
shares of the Series M Preferred stock of Zander Therapeutics, Inc. owned by the Company.
Entest
Group, Inc. and Regen Biopharma, Inc. (“RGBP”) agreed to satisfy any and all rent prepaid by RGBP to Entest from the
beginning of time to November 30, 2018 by transferring to RGBP 475,000 shares of the Series M Preferred stock of Zander Therapeutics,
Inc. owned by the Company.
David
R. Koos serves as Chairman and Chief Executive Officer of the Company and RGBP.
