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SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 10-Q

 

☒ Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
  For the quarterly period ended June 30, 2021
   
☐ Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
  For the transition period from                  to __________
   
 

Commission File Number: 333-146834 

 

Regenicin, Inc.
(Exact name of registrant as specified in its charter)

 

Nevada 27-3083341
(State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.)

 

OTCBB RGIN COMMON
Name of each exchange on which registered Trading Symbol Title of each class

 

10 High Court, Little Falls, NJ 07424 (973)557-8914
(Address of principal executive offices) (Registrant’s telephone number)

_______________________________________________________________
(Former name, former address and former fiscal year, if changed since last report)

   

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☐Yes ☒No

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☐Yes ☒No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.

 

Large accelerated filer ☐ Non-accelerated Filer ☐
Non-accelerated filer ☐ Smaller reporting company ☒
    Emerging growth company ☐

  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐Yes ☒No

 

State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 153,483,050 as of June 25, 2021.

 

NOTICE: THIS 10Q FILING DOES NOT CONTAIN FINANCIAL OR OTHER INFORMATION WHICH HAS BEEN AUDITED OR REVIEWED BY OUR INDEPENDENT PUBLIC ACCOUNTING FIRM FOR REASONS SPECIFIED HEREIN. WE INTEND TO SUPPLEMENT THIS FILING, AT A CURRENTLY UNKNOWN LATER DATE, WITH SUCH REVIEWED AND AUDITED FINANCIAL INFORMATION, IF AND WHEN SUCH REVIEW AND AUDIT CAN BE OBTAINED. 

 

     

 

  TABLE OF CONTENTS Page 
 
PART I – FINANCIAL INFORMATION
 
Item 1: Financial Statements 3
Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations 4
Item 3: Quantitative and Qualitative Disclosures About Market Risk 6
Item 4: Controls and Procedures 6
PART II – OTHER INFORMATION
Item 1: Legal Proceedings 8
Item 1A: Risk Factors 8
Item 2: Unregistered Sales of Equity Securities and Use of Proceeds 8
Item 3: Defaults Upon Senior Securities 8
Item 4: Mine Safety Disclosures 8
Item 5: Other Information 8
Item 6: Exhibits 8

 

  2  

 

PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements 

 

Our consolidated financial statements included in this Form 10-Q are as follows:

 

The consolidated financial statements as of June 30, 2021 and for the three and nine months ended June 30, 2021 and 2020 have not been reviewed by our independent registered public accounting firm. The consolidated balance sheet as September 30, 2020 has not been audited by our independent registered public accounting firm. 

 

F-1 Consolidated Balance Sheets as of June 30, 2021 (unreviewed) and September 30, 2020 (unaudited);
F-2 Consolidated Statements of Operations for the three and nine months ended June 30, 2021 and 2020 (unreviewed);
F-3 Consolidated Statements of Stockholders’ Deficiency for the nine months ended June 30, 2021 and 2020 (unreviewed);
F-4 Consolidated Statements of Cash Flows for the nine months ended June 30, 2021 and 2020 (unreviewed); and
F-5 Notes to Consolidated Financial Statements.

 

These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim period ended June 30, 2021 are not necessarily indicative of the results that can be expected for the full year.

 

  3  

REGENICIN, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

 

  June 30,
2021 		  September 30,
2020
    Unreviewed       Unaudited  
ASSETS              
CURRENT ASSETS              
     Cash $ 2,805     $ 1,366  
     Common stock of Amarantus   1,875       2,775  
               Total current and total assets $ 4,680     $ 4,141  
LIABILITIES AND STOCKHOLDERS' DEFICIENCY              
CURRENT LIABILITIES              
     Accounts payable $ 93,675     $ 88,659  
     Accrued expenses - other (related party of $41,925 and $29,000)   269,139       174,438  
     Accrued salaries - officers   3,885,751       3,450,002  
     Promissory note payable   175,000       175,000  
     Convertible promissory note - officer   335,683       335,683  
     Loan payable   10,000       10,000  
     Loans payable - officer   81,235       57,635  
               Total current and total liabilities   4,850,483       4,291,417  
STOCKHOLDERS' DEFICIENCY              
    Series A 8% Convertible Preferred stock, $0.001 par value, 5,500,000 shares authorized; 885,000 issued and outstanding   885       885  
    Common stock, $0.001 par value; 200,000,000 shares authorized; 157,911,410 issued and 153,483,050 outstanding   157,914       157,914  
     Additional paid-in capital   10,208,339       10,208,339  
     Accumulated deficit   (15,208,513 )     (14,649,986 )
      Less: treasury stock; 4,428,360 shares at par   (4,428 )     (4,428 )
               Total stockholders' deficiency   (4,845,803 )     (4,287,276 )
               Total liabilities and stockholders' deficiency $ 4,680     $ 4,141  

 

See Notes to Consolidated Financial Statements.

  F-1  

REGElNICIN, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

  

  Nine Months   Nine Months   Three Months   Three Months
  Ended   Ended   Ended   Ended
  June 30,   June 30,   June 30,   June 30,
  2021   2020   2021   2020
  (Unreviewed)   (Unreviewed)   (Unreviewed)   (Unreviewed)
               
Revenues $ —       $ —       $ —       $ —    
Operating expenses                              
General and administrative   532,113       517,262       155,559       162,054  
Stock based compensation - general and administrative   —                 —         —    
Total operating expenses   532,113       517,262       155,559       162,054  
Loss from operations   (532,113 )     (517,262 )     (155,559 )     (162,054 )
Other Expenses                              
Interest expense (related party of $(12,425), $(25,271), $(4,448) and $(4,196)   (25,514 )     (38,410 )     (8,811 )     (8,559 )
Change in unrealized loss on securities   (900 )     (2,800 )     (975 )     (1,225 )
Total other Expenses   (26,414 )     (41,210 )     (9,786 )     (9,784 )
Net loss   (558,527 )     (558,472 )     (165,345 )     (171,838 )
Preferred stock dividends   (52,954 )     (53,147 )     (17,651 )     (17,651 )
Net loss attributable to common stockholders $ (611,481 )   $ (611,619 )   $ (182,996 )   $ (189,489 )
Loss per share basic $ (0.00 )   $ (0.00 )   $ (0.00 )   $ (0.00 )
Loss per share diluted $ (0.00 )   $ (0.00 )   $ (0.00 )   $ (0.00 )
Weighted average number of shares outstanding basic   153,483,050       153,483,050       153,483,050       153,483,050  
Weighted average number of shares outstanding diluted   153,483,050       153,483,050       153,483,050       153,483,050  

 

See Notes to Consolidated Financial Statements.

  F-2  

REGENICIN, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY
(UNREVIEWED)

 

                          Accumulated        
                  Additional       Other        
  Convertible Preferred Stock   Common Stock   Paid-in   Accumulated   Comprehensive   Treasury    
  Shares   Amount   Shares   Amount   Capital   Deficit   Income   Stock (1)   Total
                                   
Balances at October 1, 2020   885,000     $ 885       157,911,410     $ 157,914     $ 10,208,339     $ (14,649,986 )     —     $ (4,428 )     (4,287,276 )
Net loss           —               —       —       (159,878 )     —       —       (159,878 )
Balances at December 31,  2020   885,000     $ 885       157,911,410     $ 157,914     $ 10,208,339     $ (14,809,864 )     —     $ (4,428 )     (4,447,154 )
Net loss           —               —       —       (233,304 )     —       —       (233,304 )
Balances at March 31,  2021   885,000     $ 885       157,911,410     $ 157,914     $ 10,208,339     $ (15,043,168 )     —     $ (4,428 )     (4,680,458 )
Net loss           —       —       —       —       (165,345 )     —       —       (165,345 )
Balances at June 30,  2021   885,000     $ 885       157,911,410     $ 157,914     $ 10,208,339     $ (15,208,513 )   $ —       $ (4,428 )   $ (4,845,803 )
Balances at October 1, 2019   885,000     $ 885       157,911,410     $ 157,914     $ 10,208,339     $ (14,090,395 )     —     $ (4,428 )     (3,727,685 )
Net loss           —       —       —       —       (197,986 )     —       —       (197,986 )
Balances at December 31,  2019   885,000     $ 885       157,911,410     $ 157,914     $ 10,208,339     $ (14,288,381 )     —     $ (4,428 )     (3,925,671 )
Net loss           —       —       —       —       (188,648 )     —       —       (188,648 )
Balances at March 31,  2020   885,000     $ 885       157,911,410     $ 157,914     $ 10,208,339     $ (14,477,029 )     —     $ (4,428 )   $ (4,114,319 )
Net loss           —       —       —       —       (171,838 )     —       —       (171,838 )
Balances at June 30,  2020   885,000     $ 885       157,911,410     $ 157,914     $ 10,208,339     $ (14,648,867 )   $ —       $ (4,428 )   $ (4,286,157 )

 

(1) The number of shares in treasury stock for all periods presented was 4,428,360.

See Notes to Consolidated Financial Statements. 

  F-3  

REGENICIN, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

Nine Months
Ended
June 30, 		  Nine Months
Ended
June 30,
  2021   2020
(Unreviewed)   (Unreviewed)
CASH FLOWS FROM OPERATING ACTIVITIES              
     Net loss $ (558,527 )   $ (558,472 )
     Adjustments to reconcile net loss to net cash used in operating activities:              
         Unrealized loss on investment   900       2,800  
         Accrued interest on loans and notes payable   25,514          
         Changes in operating assets and liabilities              
             Prepaid expenses and other current assets   —         —   
             Accounts payable   5,016       (15,451 )
             Accrued expenses - other   69,187       38,412  
             Accrued salaries - officers   435,749       435,750  
Net cash used in operating activities   (22,161 )     (96,961 )
CASH FLOWS FROM FINANCING ACTIVITIES              
        Proceeds of loans from officers   23,600       97,550  
Net cash provided by financing activities   23,600       97,550  
NET INCREASE IN CASH   1,439       589  
CASH - BEGINNING OF PERIOD   1,366       815  
CASH - END OF PERIOD $ 2,805     $ 1,404  
Supplemental disclosures of cash flow information:              
       Cash paid for interest $ —       $ —    
       Cash paid for taxes $ —       $ —    
Non-cash activities:              
       Issuance of convertible promissory note in exchange for loan payable - officer $ —       $ 335,683  

 

See Notes to Consolidated Financial Statements.

  F-4  

REGENICIN

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED AND UNREVIEWED)

 

NOTE 1 - THE COMPANY

 

Regenicin, Inc. ("Regenicin"), formerly known as Windstar, Inc., was incorporated in the state of Nevada on September 6, 2007. On July 19, 2010, the Company amended its Articles of Incorporation to change the name of the Company to Regenicin, Inc. In September 2013, Regenicin formed a new wholly-owned subsidiary for the sole purpose of conducting research in the State of Georgia (together, the "Company"). The subsidiary has no activity since its formation due to the lack of funding. The Company's business plan is to develop and commercialize a potentially lifesaving technology by the introduction of tissue-engineered skin substitutes to restore the qualities of healthy human skin for use in the treatment of burns, chronic wounds and a variety of plastic surgery procedures.

 

NOTE 2 - BASIS OF PRESENTATION

 

Interim Financial Statements:

 

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and note disclosures required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of those of a recurring nature) considered necessary for a fair presentation have been included. Operating results for the nine months ended June 30, 2021, are not necessarily indicative of the results that may be expected for the year ending September 30, 2021. These unaudited consolidated financial statements should be read in conjunction with the unaudited consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended September 30, 2020, as filed with the Securities and Exchange Commission. The consolidated balance sheet as of September 30, 2020 contained herein has been derived from the unaudited consolidated financial statements as of September 30, 2020 but does not include all disclosures required by U.S. GAAP.

 

Going Concern:

 

The Company's consolidated financial statements have been prepared assuming that the Company will continue as a going concern which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has incurred recurring losses and as of June 30, 2021, has an accumulated deficit of approximately $15.2 million from inception, expects to incur further losses in the development of its business and has been dependent on funding operations through the issuance of convertible debt and private sale of equity securities. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Currently management plans to finance operations through the private or public placement of debt and/or equity securities. However, no assurance can be given at this time as to whether the Company will be able to obtain such financing. The consolidated financial statements do not include any adjustment relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

Financial Instruments and Fair Value Measurement:

 

Common stock of Amarantus BioScience Holdings, Inc. (“Amarantus”) is carried at fair value in the accompanying consolidated balance sheets. Fair value is determined under the guidelines of GAAP which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Realized gains and losses, determined using the first-in, first-out (FIFO) method, and unrealized gains and losses are included in other income (expense) on the statement of operations.

 

The common stock of Amarantus is valued at the closing price reported on the active market on which the security is traded. This valuation methodology is considered to be using Level 1 inputs. The total value of Amarantus common stock at June 30, 2021 is $1,825. The change in unrealized loss for the nine and three months ended June 30, 2021 and 2020 was $900, $975, $2,800 and $1,225 net of income taxes, respectively, and was reported as other income (expense).

 

Recently Issued Accounting Pronouncements:

 

Any recent pronouncements issued by the FASB or other authoritative standards groups with future effective dates are either not applicable or are not expected to be significant to the consolidated financial statements of the Company.

 

  F-5  

 

NOTE 3 - LOSS PER SHARE

 

Basic loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. Diluted loss per share gives effect to dilutive convertible securities, options, warrants and other potential common stock outstanding during the period; only in periods in which such effect is dilutive.

 

The following weighted average securities have been excluded from the calculation of net loss per share for the nine and three months ended June 30, 2021 and 2020 as the exercise price was greater than the average market price of the common shares:

 

  2021   2020
Options   11,771,344       11,771,344  
Convertible Preferred Stock   8,850,000       8,850,000  
Convertible Promissory Note   11,615,329       30,079,500  
Shares excluded from the calculation of diluted loss per share   32,236,673       50,700,844  

 

NOTE 4 – LOANS PAYABLE

 

Convertible Promissory Note – Officer

 

Through September 30, 2019, John Weber, the Company's Chief Financial Officer, advanced the Company a total of $238,133. From October 2019 through March 31, 2020, he advanced an additional $97,550 for a total of $335,683. On March 31, 2020, these advances were converted into a convertible promissory note. Interest on the note is computed at 5% per annum and accrues from the time of the advances until the maturity date. The maturity date was September 30, 2020, at which time all the accrued interest and principal became due. The note has been extended to September 30, 2021. For the nine and three months ended June 30, 2021 interest totaling $12,425 and $4,448 respectively, as incurred. As of June 30, 2021, a total of $41,925 of interest was incurred and accrued. The note is convertible at the option of Mr. Weber into shares of the Company's common stock at the prevailing market rate on the date of conversion

 

Loan Payable

 

In February 2011, an investor advanced $10,000. The loan does not bear interest and is due on demand. At both June 30, 2021 and September 30, 2020, the loan payable totaled $10,000.

 

Loans Payable - Officer:

 

Through June 30, 2021, John Weber, the Company’s Chief Financial Officer, advanced to the Company $49,800. The loan does not bear interest and is due on demand.

 

Through September 30, 2019, J. Roy Nelson, the Company’s Chief Science Officer, made net advances to the Company totaling $26,935. The loans do not bear interest and are due on demand.

 

In September 2018, Randall McCoy, the Company’s Chief Executive Officer, advanced to the Company $4,500. The loan does not bear interest and is due on demand.

  F-6  

 

NOTE 5 - BRIDGE FINANCING

 

On December 21, 2011, the Company issued a $150,000 promissory note to an individual. The note bore interest so that the Company would repay $175,000 on the maturity date of June 21, 2012. Additional interest of 10% was charged on any late payments. The note was not paid at the maturity date and the Company is incurring additional interest as described above. At both June 30, 2021 and September 30, 2020, the note balance was $175,000. Interest expense was $13,089 and $13,139 for the nine months ended June 30, 2021 and 2020, respectively. Interest expense was $4,363 and $4,411 for the three ended June 30, 2021 and 2020. Accrued interest on the note was $158,027 and $149,938 as of June 30, 2021 and September 30, 2020, respectively, and is included in Accrued expenses - other in the accompanying consolidated balance sheets.

 

NOTE 6 - INCOME TAXES

 

The Company recorded no income tax expense for the six or three months ended March 31, 2021 and 2020 because the estimated annual effective tax rate was zero. As of March 31, 2021, the Company continues to provide a valuation allowance against its net deferred tax assets since the Company believes it is more likely than not that its deferred tax assets will not be realized.

 

NOTE 7 – STOCKHOLDERS' DEFICIENCY

 

Series A

 

At both June 30, 2021 and September 30, 2020, 885,000 shares of Series A Preferred Stock (“Series A Preferred”) were outstanding.

 

Series A Preferred pays a dividend of 8% per annum on the stated value and has a liquidation preference equal to the stated value of the shares ($885,000 liquidation preference as of June 30, 2020 and September 30, 2019 plus dividends in arrears as per below). Each share of Series A Preferred Stock has an initial stated value of $1 and is convertible into shares of the Company’s common stock at the rate of 10 for 1.

 

The Series A Preferred Stock was marketed through a private placement memorandum that included a reference to a ratchet provision which would have allowed the holders of the stock to claim a better conversion rate based on other stock transactions conducted by the Company during the three-year period following the original issuance of the shares. The Certificate of Designation does not contain a ratchet provision. Certain of the stock related transactions consummated by the Company during this time period may have triggered this ratchet provision, and thus created a claim by holders of the Series A Preferred Stock who purchased based on this representation for a greater conversion rate than initially provided. There have been no new developments related to the remaining Series A holders regarding this claim and the conversion rate of their Series A Preferred Stock. Changes to the preferred stock conversion ratio may result in modification or extinguishment accounting. That may result in a deemed preferred stock dividend which would reduce net income available to common stockholders in the calculation of earnings per share. Certain of the smaller Series A holders have already converted or provided notice of conversion of their shares. In respect of this claim, the Company and its outside counsel determined that it is not possible to offer an opinion regarding the outcome. An adverse outcome could materially increase the accumulated deficit.

 

The dividends are cumulative commencing on the issue date when and if declared by the Board of Directors. As of June 30, 2021, and September 30, 2020, dividends in arrears were $729,384 ($.82 per share) and $676,430 ($.76 per share), respectively.

 

Series B

 

4,000,000 shares of Series B Convertible Preferred Stock (“Series B Preferred”) have been authorized with a liquidation preference of $2.00 per share. Each share of Series B Preferred is convertible into ten shares of common stock. Holders of Series B Preferred have a right to a dividend (pro-rata to each holder) based on a percentage of the gross revenue earned by the Company in the United States, if any, and the number of outstanding shares of Series B Preferred, as follows: Year 1 - Total Dividend to all Series B holders = .03 x Gross Revenue in the U.S. Year 2 - Total Dividend to all Series B holders = .02 x Gross Revenue in the U.S. Year 3 - Total Dividend to all Series B holders = .01 x Gross Revenue in the U.S. At June 30, 2021, no shares of Series B Preferred are outstanding. 

  F-7  

 

NOTE 8 - STOCK-BASED COMPENSATION

 

The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with FASB ASC 505, “Equity.” Costs are measured at the estimated fair value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earlier of a performance commitment or completion of performance by the provider of goods or services as defined by ASC 505.

 

NOTE 9 - RELATED PARTY TRANSACTIONS

 

The Company’s principal executive offices are located in Little Falls, New Jersey. The headquarters is located in the offices of McCoy Enterprises LLC, an entity controlled by Mr. McCoy. The office is attached to his residence but has its own entrances, restroom and kitchen facilities.

 

The Company also maintains an office at Carbon & Polymer Research Inc. ("CPR") in Pennington, New Jersey, which is the Company's materials and testing laboratory. An officer of the Company is an owner of CPR.

 

No rent is charged for either premises.

 

On May 16, 2016, the Company entered into an agreement with CPR in which CPR will supply the collagen scaffolds used in the Company's production of the skin tissue. The contract contains a most favored customer clause guaranteeing the Company prices equal or lower than those charged to other customers. The Company has not yet made purchases from CPR.

 

See Note 4 for loans payable to related parties.

NOTE 10 - SUBSEQUENT EVENTS

 

Management has evaluated subsequent events through the date of this filing.

 

The Company is currently evaluating the impact of the COVID-19 virus on the Company’s industry. While it is reasonably possible that the virus could have a negative effect on the Company’s financial condition and results of the operations, the specific impact is not readily determinable as of the date of these financial statements.

 

  F-8  

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Forward-Looking Statements

 

Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.

 

Overview

 

The Company’s major objective for 2021 remains to secure the required funding to finalize some additional requirements of the IND application and begin the clinical trials. It is estimated that the cost to finalize the IND will be approximately 1.5 million dollars, and the cost to complete Phase 1 of the clinical trial will be approximately 2 million dollars. As previously reported, our goal in obtaining this funding has been to minimize shareholders' dilution as much as possible. Consequently, we are continuing to pursue financing through the issuance of a debt instrument and international licensing agreements.

 

We have worked with a number of potential investors and continue to pursue the necessary funding based on our stated objectives. It has taken longer to raise the funds than originally estimated; however, we remain confident that our goal is achievable. In the interim, the officers and related parties intend to continue to fund the Company’s essential operating costs.

 

We are currently assembling application(s) for grants from different federal agencies

 

We have begun the preliminary planning for the clinical trials to the extent we are able, considering funding constraints. As previously reported, we have chosen a CRO to assist in our IND submission and conducting the trials. Clinical site selection and patient recruitment should be somewhat simpler than other clinical trials, as we are limited in site selection to the 150 burn centers qualified to treat catastrophic burns. In addition, the surgical protocol will be similar to the grafting procedures currently in use at those facilities. NovaDerm® should thus require minimal physician training.

 

The initial trials are planned to begin with a total of ten subjects with an Initial Data Safety Monitoring Board (DSMB) review of safety on the first three subjects once they have reached 6 months follow-up. We do not intend to interrupt our trial waiting for the DSMB report.

 

  4  

 

Our management is considering various possibilities and approaches to obtaining clinical trial materials and manufacturing. While no final decision has been made, management’s approach is to set up the trials so as to allow for a seamless transition into commercial production upon approval.

 

We have access to a clean room facility for growing NovaDerm here in New Jersey. The New Jersey manufacturing facility will also provide initial launch material once NovaDerm is approved by the FDA for commercial sale.

 

Results of Operations for the Three and Nine Months Ended June 30, 2021 and 2020

 

We generated no revenues from September 6, 2007 (date of inception) to June 30, 2021. We do not expect to generate revenues until we are able to obtain FDA approval of our product and thereafter successfully market and sell the product.

 

We incurred operating expenses of $155,559 and $532,113 for the three and nine months ended June 30, 2021, compared with operating expenses of $162,054 and $517,262 for the three and nine months ended June 30, 2020.. The decrease was the result of a decrease in insurance expense and stock-based compensation.

 

Other expenses was $9,786 and $ 26,414 for the three and nine months ended June 30, 2021, as compared to other expenses of $9,784 and $41,210 for the three and nine months ended June 30, 2020. Other income (expenses) consisted of interest expense and an unrealized loss on securities. The increase in interest expense related primarily to interest charged on a convertible note issued to John Weber, the Company’s chief financial officer, on March 31, 2020.

 

Liquidity and Capital Resources

 

As of June 30, 2021, we had cash of $ 2,805. At September 30, 2020, we had cash of $1,336.

 

Operating activities used $22,161 in cash for the nine months ended June 30, 2021. The decrease in cash was primarily attributable to funding the loss for the period.

 

There were no investing activities provided during the reported period.

 

Cash flows from financing activities for the nine months ended June 30, 2021 represents proceeds from loans from officers of $23,600. .

 

We have issued various promissory notes to meet our short term demands, the terms of which are provided in the notes to the consolidated financial statements accompanying this report. While this source of financing has been helpful in the short term to meet our financial obligations, we will need additional financing to fund our operations, continue with the FDA approval process, and implement our business plan. Our long term financial needs are estimated at about $8-10 million.

 

  5  

 

Based upon our current financial condition, we do not have sufficient cash to operate our business at the current level for the next twelve months. We intend to fund operations through increased debt and/or equity financing arrangements, which may be insufficient to fund expenditures or other cash requirements. We plan to seek additional financing in a private equity or debt offering to secure funding for operations. Alternatively, we have been discussing the possibility of obtaining financing through a merger and/or other arrangements related to combining with other related companies or a going private transaction. There can be no assurance that we will be successful in raising additional funding or in entering into any of these sorts of arrangements. If we are not able to secure additional funding, the implementation of our business plan will be impaired. There can be no assurance that such additional financing will be available to us on acceptable terms or at all.

 

Off Balance Sheet Arrangements

 

As of June 30, 2021, there were no off-balance sheet arrangements.

 

Going Concern

 

Our consolidated financial statements have been prepared assuming that we will continue as a going concern which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. We have incurred operating losses from inception, expect to incur further losses in the development of our business, and have been dependent on funding operations through the issuance of convertible debt and private sale of equity securities. These conditions raise substantial doubt about our ability to continue as a going concern. Management’s plans include continuing to finance operations through the private or public placement of debt and/or equity securities and the reduction of expenditures. However, no assurance can be given at this time as to whether we will be able to achieve these objectives. The consolidated financial statements do not include any adjustment relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

A smaller reporting company is not required to provide the information required by this Item.

 

Item 4. Controls and Procedures

 

Disclosure Controls and Procedures

 

We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of June 30, 2020. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2021, our disclosure controls and procedures were not effective due to the presence of material weaknesses in internal control over financial reporting.

 

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified the following material weaknesses which have caused management to conclude that, as of June 30, 2020, our disclosure controls and procedures were not effective: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.

  

  6  

 

Remediation Plan to Address the Material Weaknesses in Internal Control over Financial Reporting

 

Our company plans to take steps to enhance and improve the design of our internal controls over financial reporting. During the period covered by this quarterly report on Form 10-Q, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we plan to implement the following changes during our fiscal year ending September 30, 2020 assuming we are able to obtain necessary funding: (i) appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting. The remediation efforts set out are largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.

 

We are unable to remedy our controls related to the inadequate segregation of duties and ineffective risk management until we receive financing to hire additional employees. 

 

Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting during the three months ended June 30, 2021 that have materially affected, or are reasonable likely to materially affect, our internal control over financial reporting.

 

  7  

 

PART II – OTHER INFORMATION

 

Item 1. Legal Proceedings 

 

We are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.

 

Item 1A. Risk Factors

 

A smaller reporting company is not required to provide the information required by this Item.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 

 

None.

 

Item 3. Defaults upon Senior Securities

 

None

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information

 

None

 

Item 6. Exhibits

 

Exhibit Number Description of Exhibit
31.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101** The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 formatted in Extensible Business Reporting Language (XBRL).
**Provided herewith

 

  8  

 

SIGNATURES

 

Pursuant to the requirements 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.

 

  Regenicin, Inc.
   
Date: August 23, 2021
 

 

 

By: /s/ Randall McCoy
  Randall McCoy
Title: Chief Executive Officer and Director
(Principal Executive Officer)

 

By: /s/ John J. Weber
  John J. Weber
Title: Chief Financial Officer and Director
(Principal Financial Officer)

 

  9  

 

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