SECURITIES
AND EXCHANGE COMMISSION
 WASHINGTON,
D.C. 20549
 
 FORM
10-Q
 
 Quarterly
Report under Section 13 or 15 (d) of
 Securities
Exchange Act of 1934
 
 For Period
ended December 31, 2008
 
 Commission
File Number 0-32201
 
 BIO-MATRIX
SCIENTIFIC GROUP, INC.
 (Exact
name of registrant as specified in its charter)
  DELAWARE
                33-0824714(State
      of Incorporation)
                (I.R.S.
      Employer Identification No.)8885
      Rehco Road, San Diego, California
                92121(Address
      of Principal Executive Offices)
                (Zip
      Code)
 
 (619)
398-3517
 (Registrant's
telephone number, including area code)
 
 
 Check
whether the registrant (1) has filed all reports required to be filed
by
 Section 13
or 15 (d) of the Securities Exchange Act of 1934 during the
preceding
 12 months
(or for such shorter period that the registrant was required to
file
 such
reports), and (2) has been subject to such filing requirements for the
past
 90 days.
Yes x    
No o
 
 
 Indicate
by check mark whether the Registrant is a shell company (as defined in Rule
12b-2 of the Securities Exchange Act of 1934) (check one):
Yes  oNo  x
 
 There were
26,102,993 shares of Common Stock outstanding as of  December 31,
2008.
  
 
 
 PART
I—FINANCIAL INFORMATION
 Item
1. Financial Statements.
  BIO-MATRIX
      SCIENTIFIC GROUP, INC. AND SUBSIDIARIES(A
      Development Stage Company)Condensed
      Consolidated Balance Sheetas
      of
                                                
                                                
                                                as
      ofDecember
      31, 2008
                                                
                                                
                                                September
      30, 2008(unaudited)ASSETSCURRENT
      ASSETSCash
                                                
                                                $
                                                13,796
                                                
                                                
                                                $
                                                8,410Securities
      Available for sale
                                                
                                                
                                                10,000
                                                
                                                
                                                
                                                550,000Pre-paid
      Expenses
                                                
                                                
                                                38,693
                                                
                                                
                                                
                                                49,258Total
      Current Assets
                                                
                                                
                                                62,489
                                                
                                                
                                                
                                                607,668PROPERTY
      & EQUIPMENT (Net of Accumulated Depreciation)
                                                
                                                
                                                538,868
                                                
                                                
                                                
                                                538,868Other
      Assets
                                                
                                                
                                                25,507
                                                
                                                
                                                
                                                21,307TOTAL
      ASSETS
                                                
                                                $
                                                626,864
                                                
                                                
                                                $
                                                1,167,843LIABILITIES
      AND STOCKHOLDERS' EQUITYCURRENT
      LIABILITIESAccounts
      payable
                                                
                                                $
                                                123,335
                                                
                                                
                                                $
                                                89,974Notes
      Payable
                                                
                                                
                                                336,809
                                                
                                                
                                                
                                                111,459Accrued
      Payroll
                                                
                                                
                                                220,500
                                                
                                                
                                                
                                                150,000Accrued
      Payroll  taxes
                                                
                                                
                                                29,675
                                                
                                                
                                                
                                                29,998Accrued
      Interest
                                                
                                                
                                                23,651
                                                
                                                
                                                
                                                24,323Accrued
      expenses
                                                
                                                
                                                35,000
                                                
                                                
                                                
                                                30,000Current
      Portion of Convertible Note
                                                
                                                
                                                143,400Current
      Portion of Note to Affiliated party
                                                
                                                
                                                1,000Total
      Current Liabilities
                                                
                                                
                                                913,370
                                                
                                                
                                                
                                                435,754LONG
      TERM LIABILITIESConvertible
      Note (Less Current Portion)
                                                
                                                
                                                360,000
                                                
                                                
                                                
                                                503,400Note
      to Affiliated Party (Less Curent Portion)
                                                
                                                
                                                
                                                
                                                
                                                
                                                500,000TOTAL
      LIABILITIES
                                                
                                                
                                                1,273,370
                                                
                                                
                                                
                                                1,439,154STOCKHOLDERS'
      EQUITYPreferred
      Stock ($.0001 par value)20,000,000
      shares authorized; 5,668,547 and 4,744,547
                                                
                                                
                                                476
                                                
                                                
                                                
                                                567issued
      and outstanding as of September 30, 2008 and December 31,
    2008Series
      AA Preferred Stock ($0.001 par value)100,000
      shares authorized, 4852 issued and outstandingas
      of September 30, 2008 and December 31, 2008Common
      Stock,  ($.0001  par value)80,000,000
      shares authorized;  24,870,869 and 26,102,993shares
      issued and outstanding as of September 30, 2008 and December 31,
      2008
                                                
                                                
                                                2,610
                                                
                                                
                                                
                                                2,488Additional
      paid in Capital
                                                
                                                
                                                7,686,148
                                                
                                                
                                                
                                                7,631,648Contributed
      Capital
                                                
                                                
                                                499,000Accumulated
      Other Comprehensive Income
                                                
                                                
                                                (490,000
                                                )
                                                
                                                
                                                50,000Deficit
      accumulated during the development stage
                                                
                                                
                                                (8,344,736
                                                )
                                                
                                                
                                                (7,956,014
                                                )Total
      Stockholders' Equity (Deficit)
                                                
                                                $
                                                (646,502
                                                )
                                                
                                                $
                                                (271,311
                                                )TOTAL
      LIABILITIES&
      STOCKHOLDERS' EQUITY
                                                
                                                $
                                                626,864
                                                
                                                
                                                $
                                                1,167,843
 
 The
Accompanying Notes are an integral part of these Financial
Statements.
 
 
  BIO-MATRIX
SCIENTIFIC GROUP, INC. AND SUBSIDIARIES
 (A
Development Stage Company)
 Condensed
Consolidated Statements of Operations
  From
      Inception3
      Months Ended
                                                                              
                                                                              
                                                                              3
      Months Ended
                                                                              
                                                                              
                                                                              (August
      2, 2005)December
      31, 2008
                                                                              
                                                                              
                                                                              December
      31,2007
                                                                              
                                                                              
                                                                              throughDecember
      31, 2008(unaudited)
                                                                              
                                                                              
                                                                              (unaudited)
                                                                              
                                                                              
                                                                              (unaudited)REVENUESSales
                                                                              
                                                                              $
                                                                              -
                                                                              
                                                                              
                                                                              $
                                                                              -
                                                                              
                                                                              
                                                                              $
                                                                              -Total
      Revenues
                                                                              
                                                                              
                                                                              0
                                                                              
                                                                              
                                                                              
                                                                              0
                                                                              
                                                                              
                                                                              
                                                                              0COSTS
      AND EXPENSESResearch
      and Development
                                                                              
                                                                              
                                                                              43,628
                                                                              
                                                                              
                                                                              
                                                                              34,307
                                                                              
                                                                              
                                                                              
                                                                              701,535General
      and administrative
                                                                              
                                                                              
                                                                              257,204
                                                                              
                                                                              
                                                                              
                                                                              225,275
                                                                              
                                                                              
                                                                              
                                                                              3,672,408Depreciation
      and amortization
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              334
                                                                              
                                                                              
                                                                              
                                                                              2,668Consulting
      and professional fees
                                                                              
                                                                              
                                                                              62,300
                                                                              
                                                                              
                                                                              
                                                                              142,237
                                                                              
                                                                              
                                                                              
                                                                              3,820,832Impairment
      of goodwill & intangibles
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              34,688Total
      Costs and Expenses
                                                                              
                                                                              
                                                                              363,132
                                                                              
                                                                              
                                                                              
                                                                              402,153
                                                                              
                                                                              
                                                                              
                                                                              8,232,131OPERATING
      LOSS
                                                                              
                                                                              
                                                                              (363,132
                                                                              )
                                                                              
                                                                              
                                                                              (402,153
                                                                              )
                                                                              
                                                                              
                                                                              (8,232,131
                                                                              )OTHER
      INCOME & (EXPENSES)Interest
      Expense
                                                                              
                                                                              
                                                                              (25,590
                                                                              )
                                                                              
                                                                              
                                                                              (3,659
                                                                              )
                                                                              
                                                                              
                                                                              (112,938
                                                                              )Interest
      Income
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              306Other
      income
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              100Other
      Expense
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              (74
                                                                              )Total
      Other Income & (Expenses)
                                                                              
                                                                              
                                                                              (25,590
                                                                              )
                                                                              
                                                                              
                                                                              (3,659
                                                                              )
                                                                              
                                                                              
                                                                              (112,606
                                                                              )NET
      INCOME (LOSS)
                                                                              
                                                                              $
                                                                              (388,722
                                                                              )
                                                                              
                                                                              $
                                                                              (405,812
                                                                              )
                                                                              
                                                                              $
                                                                              (8,344,737
                                                                              )BASIC
      AND DILUTED EARNINGS (LOSS) PER SHARE
                                                                              
                                                                              
                                                                              (0.015
                                                                              )
                                                                              
                                                                              
                                                                              (0.02
                                                                              )WEIGHTED
      AVERAGE NUMBER OF
                                                                              
                                                                              
                                                                              25,257,809
                                                                              
                                                                              
                                                                              
                                                                              23,335,098COMMON
      SHARES OUTSTANDING
 
  The
Accompanying Notes are an integral part of these Financial
Statements.
 
 
 
 
 BIO-MATRIX
SCIENTIFIC GROUP INC. AND SUBSIDIARIES
 (A
Development Stage Company)
 Condensed
Consolidated Statements of Stockholders' Equity
 From
August 2, 2005 through December 31, 2008
  Series
      AA
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  Additional
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  AccumulatedPreferred
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  Preferred
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  Common
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  Paid-in
                                                                                                                  
                                                                                                                  Retained
                                                                                                                  
                                                                                                                  Contributed
                                                                                                                  
                                                                                                                  OtherShares
                                                                                                                  
                                                                                                                  Amount
                                                                                                                  
                                                                                                                  Shares
                                                                                                                  
                                                                                                                  Amount
                                                                                                                  
                                                                                                                  Shares
                                                                                                                  
                                                                                                                  Amount
                                                                                                                  
                                                                                                                  Capital
                                                                                                                  
                                                                                                                  Earnings
                                                                                                                  
                                                                                                                  Capital
                                                                                                                  
                                                                                                                  Comprehensive
                                                                                                                  
                                                                                                                  TotalIncome
      (Loss)Shares
      issued to parent
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  25,000
                                                                                                                  
                                                                                                                  35,921
                                                                                                                  
                                                                                                                  0
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  35,921Net
      Loss August 2, 2005
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  0through
      September 30, 2005
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  (1,000
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  (1,000
                                                                                                                  )Balance
      September 30, 2005
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  25,000
                                                                                                                  
                                                                                                                  35,921
                                                                                                                  
                                                                                                                  0
                                                                                                                  
                                                                                                                  (1,000
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  34,921Net
      Loss October 1, 2005
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  0through
      December 31, 2005
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  (366,945
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  (366,945
                                                                                                                  )Balance
      December 31, 2005
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  25,000
                                                                                                                  
                                                                                                                  35,921
                                                                                                                  
                                                                                                                  0
                                                                                                                  
                                                                                                                  (367,945
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  (332,024
                                                                                                                  )Recapitalization
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  9,975,000
                                                                                                                  
                                                                                                                  (34,921
                                                                                                                  )
                                                                                                                  34,921
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  0Stock
      issued Tasco merger
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  2,780,000
                                                                                                                  
                                                                                                                  278
                                                                                                                  
                                                                                                                  (278
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  0Stock
      issued for services
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  305,000
                                                                                                                  
                                                                                                                  31
                                                                                                                  
                                                                                                                  759,719
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  759,750Stock
      issued for Compensation
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  300,000
                                                                                                                  
                                                                                                                  30
                                                                                                                  
                                                                                                                  584,970
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  585,000Net
      Loss January 1, 2006through
      September 30, 2006
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  (2,053,249
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  (2,053,249
                                                                                                                  )Balance
      September 30, 2006
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  13,385,000
                                                                                                                  
                                                                                                                  1,339
                                                                                                                  
                                                                                                                  1,379,332
                                                                                                                  
                                                                                                                  (2,421,194
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  (1,040,523
                                                                                                                  )Stock
      issued for services
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  100,184
                                                                                                                  
                                                                                                                  10
                                                                                                                  
                                                                                                                  112,524
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  112,534Stock
      issued for Compensation
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  153,700
                                                                                                                  
                                                                                                                  15
                                                                                                                  
                                                                                                                  101,465
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  101,480Stock
      issued in exchange for canceling debt
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  2,854,505
                                                                                                                  
                                                                                                                  284
                                                                                                                  
                                                                                                                  1,446,120
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  1,446,404Net
      Loss October 1, 2006through
      December 31, 2006
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  (466,179
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  (466,179
                                                                                                                  )Balance
      December 31, 2006
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  16,493,389
                                                                                                                  
                                                                                                                  1,649
                                                                                                                  
                                                                                                                  3,039,441
                                                                                                                  
                                                                                                                  (2,887,373
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  153,717Stock
      issued for cash
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  500,000
                                                                                                                  
                                                                                                                  50
                                                                                                                  
                                                                                                                  124,950
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  125,000Stock
      issued for services
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  359,310
                                                                                                                  
                                                                                                                  36
                                                                                                                  
                                                                                                                  235,042
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  235,078Stock
      issued for Compensation
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  143,920
                                                                                                                  
                                                                                                                  14
                                                                                                                  
                                                                                                                  88,400
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  88,414Stock
      issued in exchange for canceling debt
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  500,000
                                                                                                                  
                                                                                                                  50
                                                                                                                  
                                                                                                                  124,950
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  125,000Net
      Loss January 1, 2007through
      March 31, 2007
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  (515,624
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  (515,624
                                                                                                                  )Balance
      March 31, 2007
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  17,996,619
                                                                                                                  
                                                                                                                  1,800
                                                                                                                  
                                                                                                                  3,612,783
                                                                                                                  
                                                                                                                  (3,402,997
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  211,585Stock
      issued for cash
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  240,666
                                                                                                                  
                                                                                                                  24
                                                                                                                  
                                                                                                                  60,142
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  60,166Stock
      issued for services
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  406,129
                                                                                                                  
                                                                                                                  41
                                                                                                                  
                                                                                                                  222,889
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  222,930Stock
      issued for Compensation
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  150,000
                                                                                                                  
                                                                                                                  15
                                                                                                                  
                                                                                                                  110,435
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  110,450Stock
      issued in exchange for canceling debt
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  1,316,765
                                                                                                                  
                                                                                                                  132
                                                                                                                  
                                                                                                                  329,059
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  329,191Net
      Loss April 1, 2007through
      June 30, 2007
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  (718,955
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  (718,955
                                                                                                                  )Balance
      June 30, 2007
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  20,110,179
                                                                                                                  
                                                                                                                  2,011
                                                                                                                  
                                                                                                                  4,335,308
                                                                                                                  
                                                                                                                  (4,121,952
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  215,367Stock
      issued for cash
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  1,200,000
                                                                                                                  
                                                                                                                  120
                                                                                                                  
                                                                                                                  299,880
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  300,000Stock
      issued for services
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  1,253,000
                                                                                                                  
                                                                                                                  125
                                                                                                                  
                                                                                                                  404,125
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  404,250Stock
      issued for Compensation
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  100,000
                                                                                                                  
                                                                                                                  10
                                                                                                                  
                                                                                                                  24,990
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  25,000Stock
      issued in exchange for canceling debt
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  566,217
                                                                                                                  
                                                                                                                  57
                                                                                                                  
                                                                                                                  143,940
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  143,997Net
      Loss July 1, 2007through
      September 30, 2007
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  (751,989
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  (751,989
                                                                                                                  )Balance
      September 30, 2007
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  23,229,396
                                                                                                                  
                                                                                                                  2,323
                                                                                                                  
                                                                                                                  5,208,244
                                                                                                                  
                                                                                                                  (4,873,941
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  336,626Stock
      issued for CashStock
      issued for services
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  191,427
                                                                                                                  
                                                                                                                  19
                                                                                                                  
                                                                                                                  62,108
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  62,127Net
      Loss October 1, 2007through
      December 31, 2007
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  (405,812
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  (405,812
                                                                                                                  )Balance
      December 31, 2007
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  23,420,823
                                                                                                                  
                                                                                                                  2,342
                                                                                                                  
                                                                                                                  5,270,352
                                                                                                                  
                                                                                                                  (5,279,753
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  (7,059
                                                                                                                  )Stock
      issued for cash
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  575,000
                                                                                                                  
                                                                                                                  57
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  114,942
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  114,999Stock
      issued for services
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  340,000
                                                                                                                  
                                                                                                                  35
                                                                                                                  
                                                                                                                  146,705
                                                                                                                  
                                                                                                                  15
                                                                                                                  
                                                                                                                  106,651
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  106,701Net
      Loss January 1 2008through
      March 31, 2008
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  (417,325
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  (417,325
                                                                                                                  )Balance
      March 31, 2008
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  915,000
                                                                                                                  
                                                                                                                  92
                                                                                                                  
                                                                                                                  23,567,528
                                                                                                                  
                                                                                                                  2,357
                                                                                                                  
                                                                                                                  5,491,945
                                                                                                                  
                                                                                                                  (5,697,078
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  (202,684
                                                                                                                  )Stock
      issued for cash
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  2,154,850
                                                                                                                  
                                                                                                                  215
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  672,172
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  672,387Stock
      issued for services
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  1,421,725
                                                                                                                  
                                                                                                                  142
                                                                                                                  
                                                                                                                  232,000
                                                                                                                  
                                                                                                                  23
                                                                                                                  
                                                                                                                  613,439
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  613,604Stock
      issued for accrued interest
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  31,245
                                                                                                                  
                                                                                                                  3
                                                                                                                  
                                                                                                                  17,293
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  17,296Stock
      issued as dividend
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  1,075,087
                                                                                                                  
                                                                                                                  108
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  (108
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  0Net
      Loss April 1,2008to
      June 30, 2008
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  (1,063,446
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  (1,063,446
                                                                                                                  )Balance
      June 30, 2008
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  5,566,662
                                                                                                                  
                                                                                                                  557
                                                                                                                  
                                                                                                                  23,830,773
                                                                                                                  
                                                                                                                  2,383
                                                                                                                  
                                                                                                                  6,794,741
                                                                                                                  
                                                                                                                  (6,760,524
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  37,158Series
      AA Stock issued to Officer July 3, 2008
                                                                                                                  
                                                                                                                  4,852Stock
      issued for services July 8, 2008
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  905,000
                                                                                                                  
                                                                                                                  91
                                                                                                                  
                                                                                                                  769,159
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  769,250Stock
      issued for Cash July 2, 2008
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  11,667
                                                                                                                  
                                                                                                                  1
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  3,499
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  3,500Stock
      issued for Cash July 25, 2008 (Warrant Exercise)
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  90,000
                                                                                                                  
                                                                                                                  9
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  17,991
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  18,000Stock
      issued for  interest between July 30, 2008 and August 30,
      2008
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  85,087
                                                                                                                  
                                                                                                                  9
                                                                                                                  
                                                                                                                  21,263
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  21,272Stock
      issued for services September 3, 2008
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  50,000
                                                                                                                  
                                                                                                                  5
                                                                                                                  
                                                                                                                  24,995
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  25,000Stock
      issued due to rounding
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  218
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  9Net
      Loss July 1, 2008 to September 30, 2008
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  (1,195,491
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  (1,195,491
                                                                                                                  )Accumulated
      other Comprehensive Income as of September 30, 2008
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  50,000
                                                                                                                  
                                                                                                                  50,000Balance
      September 30, 2008
                                                                                                                  
                                                                                                                  4,852
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  5,668,547
                                                                                                                  
                                                                                                                  567
                                                                                                                  
                                                                                                                  24,870,869
                                                                                                                  
                                                                                                                  2,488
                                                                                                                  
                                                                                                                  7,631,648
                                                                                                                  
                                                                                                                  (7,956,015
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  50,000
                                                                                                                  
                                                                                                                  (271,311
                                                                                                                  )Stock
      Retired in connection with
                                                                                                                    Exchange
      for Common Shares
                                                                                                                    December
      2, 2008
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  (1,099,000
                                                                                                                  )
                                                                                                                  (109
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  (109
                                                                                                                  )Stock
      issued in connection with
                                                                                                                    Exchange
      for Preferred Shares
                                                                                                                    December
      2, 2008
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  1,099,000
                                                                                                                  
                                                                                                                  109
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  109Stock
      Issued for  Interest on December 3, 2008
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  133,124
                                                                                                                  
                                                                                                                  13
                                                                                                                  
                                                                                                                  33,268
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  33,281Stock
      issued for Cash December 31, 2008
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  66,670
                                                                                                                  
                                                                                                                  7
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  6,660
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  6,667Stock
      issued for services December 31, 2008
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  33,330
                                                                                                                  
                                                                                                                  3
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  3,330
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  3,333Stock
      issued for Cash December 31, 2008
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  75,000
                                                                                                                  
                                                                                                                  8
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  11,242
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  11,250Contributed
      capital
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  499,000
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  499,000Net
      Loss October 1, 2008 to December 31, 2008
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  (388,722
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  (388,722
                                                                                                                  )Accumulated
      other Comprehensive Income as of December 31, 2008
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  (540,000)
                                                                                                                  
                                                                                                                  (540,000
                                                                                                                  )Balance
      December 31, 2008
                                                                                                                  
                                                                                                                  4,852
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  4,744,547
                                                                                                                  
                                                                                                                  476
                                                                                                                  
                                                                                                                  26,102,993
                                                                                                                  
                                                                                                                  2,610
                                                                                                                  
                                                                                                                  7,686,148
                                                                                                                  
                                                                                                                  (8,344,737
                                                                                                                  )
                                                                                                                  499,000
                                                                                                                  
                                                                                                                  (490,000)
                                                                                                                  
                                                                                                                  (646,502
                                                                                                                  )
 
 The
Accompanying Notes are an integral part of these Financial
Statements.
  
  Bio
Matrix Scientific Group, Inc. and Subsidiaries
 (A
Development Stage Company)
 Condensed
Consolidated Statements of Cash Flow
 
 From
      August 2, 2005(Inception)3
      Months Ended
                                                                        
                                                                        
                                                                        3
      months Ended
                                                                        
                                                                        
                                                                        throughDecember
      31, 2008
                                                                        
                                                                        
                                                                        December
      31, 2007
                                                                        
                                                                        
                                                                        December
      31, 2008(unaudited)
                                                                        
                                                                        
                                                                        (unaudited)
                                                                        
                                                                        
                                                                        (unaudited)CASH FLOWS FROM OPERATING
      ACTIVITIESNet
      Income (loss)
                                                                        
                                                                        $
                                                                        (388,722
                                                                        )
                                                                        
                                                                        $
                                                                        (405,812
                                                                        )
                                                                        
                                                                        $
                                                                        (8,344,737
                                                                        )Adjustments
      to reconcile net loss to net cash (used in) providedby
      operating activities:Depreciation
      expense
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        334
                                                                        
                                                                        
                                                                        
                                                                        2,667Stock
      issued for compensation to employees
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        910,342Stock
      issued for services rendered by consultants
                                                                        
                                                                        
                                                                        3,333
                                                                        
                                                                        
                                                                        
                                                                        62,128
                                                                        
                                                                        
                                                                        
                                                                        3,314,547Stock
      issued for interest
                                                                        
                                                                        
                                                                        33,281
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        71,849Changes
      in operating assets and liabilities:(Increase)
      decrease in receivables
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        (282
                                                                        )
                                                                        
                                                                        
                                                                        0(Increase)
      decrease in prepaid expenses
                                                                        
                                                                        
                                                                        24,601
                                                                        
                                                                        
                                                                        
                                                                        (11,047
                                                                        )
                                                                        
                                                                        
                                                                        (24,657
                                                                        )Increase
      (Decrease) in Accounts Payable
                                                                        
                                                                        
                                                                        33,361
                                                                        
                                                                        
                                                                        
                                                                        34,730
                                                                        
                                                                        
                                                                        
                                                                        123,335Increase
      (Decrease) in Accrued Expenses
                                                                        
                                                                        
                                                                        60,469
                                                                        
                                                                        
                                                                        
                                                                        56,375
                                                                        
                                                                        
                                                                        
                                                                        324,737Net
      Cash Provided by (Used in) Operating Activities
                                                                        
                                                                        
                                                                        (233,677
                                                                        )
                                                                        
                                                                        
                                                                        (263,574
                                                                        )
                                                                        
                                                                        
                                                                        (3,621,917
                                                                        )CASH FLOWS FROM INVESTING
      ACTIVITIES(
      Increase) Decrease in Deposits
                                                                        
                                                                        
                                                                        (4,200
                                                                        )
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        (25,507
                                                                        )Purchases
      of fixed assets
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        (17,473
                                                                        )
                                                                        
                                                                        
                                                                        (541,536
                                                                        )Additions
      to Securities Available for Sale
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        (500,000
                                                                        )Net
      Cash Provided by (Used in) Investing Activities
                                                                        
                                                                        
                                                                        (4,200
                                                                        )
                                                                        
                                                                        
                                                                        (17,473
                                                                        )
                                                                        
                                                                        
                                                                        (1,067,043
                                                                        )CASH FLOWS FROM FINANCING
      ACTIVITIESPreferred
      Stock issued for cash
                                                                        
                                                                        
                                                                        15
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        297Common
      stock issued for cash
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        1,472Additional
      Paid in Capital
                                                                        
                                                                        
                                                                        17,902
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        1,346,120Principal
      borrowings on Notes and Convertible Debentures
                                                                        
                                                                        
                                                                        225,350
                                                                        
                                                                        
                                                                        
                                                                        121,010
                                                                        
                                                                        
                                                                        
                                                                        1,156,265Convertible
      notes
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        125,000
                                                                        
                                                                        
                                                                        
                                                                        503,400Contributed
      Capital
                                                                        
                                                                        
                                                                        499,000
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        499,000Increase
      (Decrease) in Bank Overdraft
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        (7,997
                                                                        )
                                                                        
                                                                        
                                                                        0Net
      borrowings from related parties
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        1,195,196Increase
      (Decrease) in Notes from Affiliated party
                                                                        
                                                                        
                                                                        (499,000
                                                                        )
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        1000Net
      Cash Provided by (Used in) Financing Activities
                                                                        
                                                                        
                                                                        243,267
                                                                        
                                                                        
                                                                        
                                                                        238,013
                                                                        
                                                                        
                                                                        
                                                                        4,702,750Net
      Increase (Decrease) in Cash
                                                                        
                                                                        
                                                                        5,390
                                                                        
                                                                        
                                                                        
                                                                        (43,034
                                                                        )
                                                                        
                                                                        
                                                                        13,796Cash
      at Beginning of Period
                                                                        
                                                                        
                                                                        8,410
                                                                        
                                                                        
                                                                        
                                                                        44,110
                                                                        
                                                                        
                                                                        
                                                                        0Cash
      at End of Period
                                                                        
                                                                        $
                                                                        13,796
                                                                        
                                                                        
                                                                        $
                                                                        1,076
                                                                        
                                                                        
                                                                        $
                                                                        13,796Supplemental  Cash
      Flow Disclosures:Significant
      non-cash activities:Stock
      issued to cancel debt
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        2,044,592Preferred
      stock issued for stock dividend
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        108Accumulated
      Other Comprehensive income (Loss)
                                                                        
                                                                        
                                                                        (540,000
                                                                        )
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        (490,000
                                                                        )Total
                                                                        
                                                                        
                                                                        (540,000
                                                                        )
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        1,554,700
 
 The
Accompanying Notes are an integral part of these Financial
Statements.
  
  BIO-MATRIX
SCIENTIFIC GROUP, INC. AND SUBSIDIARY
 (A
Development Stage Company)
 Notes to
condensed consolidated Financial Statements
 As of
December 31, 2008
 
 
 NOTE 1 -
BASIS OF PRESENTATION
 
 The
interim financial statements included herein, presented in accordance with
United States generally accepted accounting principles and stated in US
dollars, have been prepared by the Company, without audit, pursuant to the
rules and regulations of the Securities and
Exchange Commission.  Certain information and footnote
disclosures normally included in financial statements prepared
in  accordance with generally accepted accounting principles have
been condensed or omitted pursuant to such rules and regulations, although
the Company believes that the disclosures are adequate to make the
information presented not misleading.
 
 These
statements reflect all adjustments, consisting of normal
recurring adjustments, which, in the opinion of management, are necessary
for fair presentation of the information contained therein.  It
is suggested that these condensed consolidated interim financial statements be
read in conjunction with the financial statements of the Company for the
period ended September 30, 2008 and notes thereto included in the Company's
10-KSB annual report.  The Company follows the same accounting
policies in the preparation of interim
 reports.
 
 Results of
operations for the interim periods are not indicative of
annual results.
 
 NOTE 2.
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 $8,344,737
during the period from August 2, 2005 (inception) through December 31, 2008.
This condition raises substantial doubt about the Company's ability to continue
as a going concern. The Company's continuation as a going concern is dependent
on its ability to meet its obligations, to obtain additional financing as may be
required and ultimately to attain profitability. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
 Management
plans to raise additional funds through debt or equity offerings. Management has
yet to decide what type of offering the Company will use or how much capital the
Company will raise. There is no guarantee that the Company will be able to raise
any capital through any type of offerings.
 
 NOTE 3.
INVESTMENTS
 
 Investments
are composed of available-for-sale  equity securities as defined in
SFAS No. 115—Accounting for Certain Investments in Debt and Equity Securities,
or SFAS 115.  At December 31,  2008 our investment portfolio
consisted of 1,000,000 common shares of Freedom Environmental Services,
Inc.Increases and
decreases in fair value are recorded as unrealized gains and losses in Other
Comprehensive Income.  Realized gains and losses and declines in fair
value judged to be other-than-temporary are included in the Consolidated
Statement of Operations as a Gain/(loss) on sale of investment. The Company did
not possess a portfolio of securities  during the 2007 fiscal
year.
 
 As of
December 31, 2008 Securities Available for Sale consisted of the
following:
 
 Cost
                              
                              
                              Gross
                                Unrealized
                                Gains
                              
                              
                              Gross
                                Unrealized
                                Losses
                              
                              
                              Estimated
                                Fair ValueCorporate
      securities
                              
                              
                              500,000
                              
                              
                              
                              50,000
                              
                              
                              
                              540,000
                              
                              
                              
                              10,000Total
      marketable securities
                              
                              $
                              500,000
                              
                              
                              $
                              50,000
                              
                              
                              $
                              540,000
                              
                              
                              $
                              10,000
 
 NOTE 4.
WARRANTS AND OPTIONS
 
 On  December
31, 2008 the Company issued 75,000 units (“Units”), each unit consisting of one
share of the Company’s Preferred Stock and one Preferred Stock Purchase Warrant
(“Warrant”) exercisable for a period of three months from the date of issuance
into one share of the Company’s Preferred Stock at $0.15 per share, for
consideration consisting of $11,250.
 
 On  December
31, 2008 the Company issued 66,670 units (“Units”), each unit consisting of one
share of the Company’s Preferred Stock and one Preferred Stock Purchase Warrant
(“Warrant”) exercisable for a period of three months from the date of issuance
into one share of the Company’s Preferred Stock at $0.10 per share, for
consideration consisting of $6667.
   Summary of the
Company's warrants as of  December 31, 2008 and 2007 and changes during the
periods is as follows:
 2008
                                  
                                  
                                  
                                  
                                  
                                  2007Weighted
      Average
                                  
                                  
                                  
                                  
                                  
                                  Weighted
      AverageWarrants
                                  
                                  
                                  Exercise
      Price
                                  
                                  
                                  Warrants
                                  
                                  
                                  Exercise
      PricePreferred
      Stock
                                  
                                  
                                  
                                  
                                  
                                  (Common)Outstanding
      at Beginning of Period
                                  
                                  
                                  11,667
                                  
                                  
                                  
                                  0.35
                                  
                                  
                                  
                                  200,000
                                  
                                  
                                  
                                  4.5Granted
                                  
                                  
                                  141,670
                                  
                                  
                                  
                                  0.13
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0Exercised
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0.3Expired
      Unexercised
                                  
                                  
                                  -11667
                                  
                                  
                                  
                                  0.3
                                  
                                  
                                  
                                  200,000
                                  
                                  
                                  
                                  4.5Outstanding
      at End of period
                                  
                                  
                                  141,670
                                  
                                  
                                  
                                  0.13
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
  The
following table summarizes information regarding Preferred stock purchase
warrants outstanding at December 31, 2008
 Exercise
                                              
                                              Number
                                              
                                              Weighted
      AveragePrice
                                              
                                              Outstanding
                                              
                                              Remaining
      Contract Life (Days).10
                                              
                                              66,670
                                              
                                              
                                              930.15
                                              
                                              75,000
                                              
                                              
                                              93Total
      outstanding as of December 31 , 2008
                                              
                                              
                                              
                                              
                                              141670
                                              
                                              
                                              93
 
 NOTE 5.
INCOME TAXES
 
 As
      of December 31 , 2008Deferred
      tax assets:Net
      operating tax carry forwards
                
                $
                2,84932,40Other
                
                
                -0-Gross
      deferred tax assets
                
                
                2,,849,320Valuation
      allowance
                
                
                (2,848,320)Net
      deferred tax assets
                
                $
                -0-
  As
of  December 31, 2008 the Company has a  Deferred Tax Asset
of  $2,848,640 completely attributable to net operating loss carry
forwards  of approximately $8,380,353 ( which expire 20 years from the
date the loss was incurred) consisting  of
 
 (a)
$38,616, of Net Operating Loss Carry forwards acquired in the reverse
acquisition and
 (b)
$8,344,737 attributable to Bio Matrix Scientific Group, Inc. a Nevada
corporation (“BMSG”).
 
 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. The achievement of required future
taxable income is uncertain. In addition, the reverse acquisition of BMSG has
resulted in a change of control. Internal Revenue Code Sec 382 limits the amount
of income that may be offset by net operating loss (NOL) carryovers after an
ownership change. As a result, the Company has the Company recorded a valuation
allowance reducing all deferred tax assets to 0.
 
 NOTE 6.
RELATED PARTY TRANSACTION
 
 On
September 29, 2008, the Company purchased 1,000,000 of the common shares of
Freedom Environmental Services, Inc. (“FESI shares”)  from Bombardier
Pacific Ventures, Inc. (“Bombardier”) , a company controlled by David Koos , our
Chairman and CEO,  for consideration consisting of a Promissory Note
(“Note”) in the principal amount of $500,000 issued by BMSN to
Bombardier.
 
 Pursuant
to the terms and conditions of the Note, the entire principal amount of $500,000
together with accrued simple interest of 10% per annum, is due and payable to
Bombardier on November 29, 2009.
 
 On
December 21, 2008 Bombardier modified the Promissory Note with BMSN. Bombardier
agreed to accept $1,000 en lieu of the original $500,00 payment owed by the
Company to  Bombardier for the purchase of FESI shares.
 
 As of
December 31, 2008,  the Company is  indebted in the
aggregate amount of $300,496 to Bombardier , exclusive of amounts owed due to
the purchase of marketable securities described below. These amounts
are  callable at par plus any accrued and unpaid interest by
the  upon five days written notice, and  bears simple
interest at 15% maturing, for each amount lent,  within one year of
issuance.
 
 NOTE 7.
STOCK TRANSACTIONS
 
 Transactions,
other than employees' stock issuance, are in accordance with paragraph 8 of SFAS
123. Thus issuances shall be accounted for based on the fair value of the
consideration received. Transactions with employees' stock issuance are in
accordance with paragraphs (16-44) of SFAS 123. These issuances shall be
accounted for based on the fair value of the consideration received or the fair
value of the equity instruments issued, or whichever is more readily
determinable.
 
 Common
Stock
  On
December 2, 2008 the Company issued 1,099,999 shares of common stock to
Preferred Shareholders in exchange for 1,099,000 shares of the Company’s
Preferred Stock which was subsequently retired
 
 On
December 3, 2008 the Company issued 133,124 shares  of common
stock to holders of the Company’s Convertible Debentures in satisfaction of $
26,263  of accrued interest and to prepay  $7018 of
interest.
 
 Preferred
Stock
 
 On
December 2, 2008 the Company issued 1,099,999 shares of common stock to
Preferred Shareholders in exchange for 1,099,000 shares of the Company’s
Preferred Stock which was subsequently retired
 
 On  December
31, 2008 the Company issued 75,000 units (“Units”), each unit consisting of one
share of the Company’s Preferred Stock and one Preferred Stock Purchase Warrant
(“Warrant”) exercisable for a period of three months from the date of issuance
into one share of the Company’s Preferred Stock at $0.15 per share, for
consideration consisting of $11,250.
 
 On  December
31, 2008 the Company issued 66,670 units (“Units”), each unit consisting of one
share of the Company’s Preferred Stock and one Preferred Stock Purchase Warrant
(“Warrant”) exercisable for a period of three months from the date of issuance
into one share of the Company’s Preferred Stock at $0.10 per share, for
consideration consisting of $6,667.
 
 On
December 31, 2008  the Company issued 33,330 shares of the Company’s
Preferred for consideration consisting of  services rendered valued at
$3,333.
 
 NOTE 8.
STOCKHOLDERS' EQUITY
 
 The
stockholders' equity section of the Company contains the following classes of
capital stock as of December 31, 2008:
 
 *
Preferred stock, $ 0.0001 par value; 20,000,000 shares authorized:
 4,744,547
Preferred shares issued and outstanding.
 4,852
Series AA Preferred Shares issued and outstanding
 
 ·  Common
stock, $ 0.0001 par value; 80,000,000 shares authorized: 26,102,993 shares
issued and outstanding.
 
 NOTE 9.
COMMITMENTS AND CONTINGENCIES
 
 On October
7,
2008,  a  Complaint  (“Complaint”)  was
filed  in the District Court of Clark County Nevada against the
Company,  the Company’s Chairman, and   Freedom
Environmental Services, Inc. (collectively “Defendants”) by Princeton Research,
Inc. (“Princeton”) seeking to recover unspecified General damages in excess of
$10,000, unspecified specific damages, an order from the court declaring that
the defendants fraudulently conveyed assets from BMXP to the Company, attorney’s
fees and cost of suit based on allegations that the sale of  Bio
Matrix Scientific Group, Inc., a Nevada corporation,  to the Company
as well as the name change and cessation of operations of Freedom Environmental
Services, Inc constitute a breach of contract by , fraudulent conveyance
by,  and unjust enrichment of the Defendants.On November 11, 2008 the
company filed a Motion to Dismiss or in the Alternative an Order requiring
Princeton to provide a more definitive statement of the allegations contained in
the Complaint. The Company believes that the allegations in the complaint are
without merit and intends to vigorously defend its interests in this
matter.  At this time, it is not possible to predict the ultimate
outcome of these matters. Accordingly, the Company has not recorded any expense
or liability for potential amounts associated with these claims.
 
 NOTE
10.  PREFERRED STOCK OFFERINGS
 
 On  December
31, 2008 the Company issued 75,000 units (“Units”), each unit consisting of one
share of the Company’s Preferred Stock and one Preferred Stock Purchase Warrant
(“Warrant”) exercisable for a period of three months from the date of issuance
into one share of the Company’s Preferred Stock at $0.15 per share, for
consideration consisting of $11,250.
 
 As an
additional incentive to purchase the Units and not as a characteristic,
right or designation of the Preferred Stock.  The Company has
also entered into agreements with the abovementioned recipient of Units whereby
the Company has agreed to exchange, at any time subsequent to six months from
issuance at the demand of the purchaser, any and all Preferred Shares owned by
that purchaser through either the purchase of the Units or exercise of the
Warrants into an equivalent number of shares of the company’s common
stock.
  On  December
31, 2008 the Company issued 66,670 units (“Units”), each unit consisting of one
share of the Company’s Preferred Stock and one Preferred Stock Purchase Warrant
(“Warrant”) exercisable for a period of three months from the date of issuance
into one share of the Company’s Preferred Stock at $0.10 per share, for
consideration consisting of $6,667.
 
 As an
additional incentive to purchase the Units and not as a characteristic,
right or designation of the Preferred Stock.  The Company has
also entered into agreements with the abovementioned recipient of Units whereby
the Company has agreed to exchange, at any time subsequent to six months from
issuance at the demand of the purchaser, any and all Preferred Shares owned by
that purchaser through either the purchase of the Units or exercise of the
Warrants into an equivalent number of shares of the company’s common
stock.
  On
December 31, 2008  the Company issued 33,330 shares of the Company’s
Preferred Stock  for consideration consisting of  services
rendered valued at $3,333.
 
 NOTE 11.
LICENSE AGREEMENT
 
 On October 23, 2008 The
Regents of the University of California
(“Regents”)  and  Entest Biomedical, Inc. (“Licensee”) ., a
wholly owned subsidiary of the Company  executed
an  Exclusive License Agreement (“ELA”) .
 
 Pursuant
to the ELA and subject to the limitations set forth in the ELA, The
Regents  granted to Licensee an exclusive license (the "License")
under The Regents’ interest in Provisional Patent Application No. 61/030,316
entitled “SCREENING TEST FOR GESTATIONAL DIABETES MELLITUS” filed 02/21/2008
(UCLA Case No. 2007-523-1) (“Regents Patent Rights”) in jurisdictions where
Regents' Patent Rights exist, to make, have made, use, sell, offer for sale and
import Licensed Products (as “Licensed Products” is defined in the ELA) and to
practice Licensed Methods (as “Licensed Methods” is defined in the ELA) in all
fields of use to the extent permitted by law.
 
 "Licensed
Product", as defined in the ELA,  means any article, composition,
apparatus, substance, chemical, or any other material covered by Regents' Patent
Rights or whose manufacture, use or sale would, absent the license granted under
the ELA, constitute an infringement, inducement of infringement, or contributory
infringement, of any claim within Regents' Patent Rights, or any service,
article, composition, apparatus, chemical, substance, or any other material
made, used, or sold by or utilizing or practicing a Licensed
Method.
 
 "Licensed
Method", as defined in the ELA, means any process, service, or method which is
covered by Regents' Patent Rights or whose use or practice would, absent the
license granted under the ELA, constitute an infringement, inducement of
infringement, or contributory infringement, of any claim within Regents' Patent
Rights.
 
 Pursuant
to the ELA, Licensee shall be obligated Five thousand dollars ($5,000) beginning
on the one-year anniversary date of the effective date of the ELA and continuing
annually to pay to The Regents for sales by Licensee and sublicensees
:
 
 (i) an
earned royalty of Six percent (6%) of Net Sales of Licensed Products or Licensed
Methods.
 
 (ii) a
minimum annual royalty of Fifty thousand dollars ($50,000) for the life of
Regents' Patent Rights, beginning one year after the first commercial sale of
Licensed Product.  The minimum annual royalty will be credited against
the earned royalty due and owing for the calendar year in which the minimum
payment was made.
 
 (iii) pay
to The Regents a license maintenance fee of on each anniversary date of the
Effective Date.  The maintenance fee will not be due and payable on
any anniversary date of the effective date if on that date Licensee is
commercially selling a Licensed Product and paying an earned royalty to The
Regents on the sales of that Licensed Product.
 
 Pursuant
to the ELA, the Licensee is also obligated to:
 
 (a)
diligently proceed with the development, manufacture and sale
("Commercialization") of Licensed Products and must earnestly and diligently
endeavor to market them within a reasonable time after execution of the ELA and
in quantities sufficient to meet the market demands for them.
 
 (b)
endeavor to obtain all necessary governmental approvals for the
Commercialization of Licensed Products.
 
 Unless
otherwise terminated by operation of law or by acts of the parties in accordance
with the terms of the ELA, the ELA remains in effect for the life of the
last-to-expire patent or last to be abandoned patent application in Regents'
Patent Rights, whichever is later.
  NOTE 12.
CONTRIBUTED CAPITAL
 
 Contributed
capital as of December 31, 2008 consists of  $499,000 realized as a
result of the extinguishment of $499,000 of debt due to Bombardier (See Note
6)
 
 NOTE 13.
SUBSEQUENT EVENTS
  On January
5, 2009, the Company  entered into a Letter of Intent (“LOI”) with
NeoCells, Inc. (“NCI”) and its parent, ViviCells International, Inc. (“VCII”)
regarding the following contemplated transactions:
  (a)
formation of a joint venture between the Company and NCI for cryogenic storage
of cellular specimens  processed by the Company .
  (b) a
marketing relationship to be established between the Company and
NCI
  (c) the
acquisition of NCI by the Company
  (d)
transfer of NCI’s pre-acquisition inventory of stored Cord Blood specimens to
the Company
  (e)
Potential acquisition of equity control of the Company by VCII
  The
transactions contemplated by the LOI are subject to the execution of one or more
definitive agreements upon mutually acceptable terms and conditions. The
provisions of the LOI are non binding on all parties with the exception of
provisions regarding termination of duties to negotiate in good faith, non
disclosure of confidential information, disclaimer of liabilities and choice of
governing law and venue. No assurance can be given that any of the contemplated
transactions will not occur within the timeframes specified by the LOI nor can
any assurance be given that any of the contemplated transactions will occur
at all.
  On January
7, 2009 50,000 preferred shares of the Company were issued to a consultant as
consideration for services rendered.
  On January
7, 2009 100,000 common shares were issued to a consultant as a bonus for
services rendered (“Bonus Shares”). As a condition of the issuance of the Bonus
Shares, recipient agreed:
 
 not to
offer to sell, sell, transfer, pledge or otherwise dispose of the Bonus Shares
prior to  January 10, 2010 (“Restricted period”)
 
 in the
event that, prior to the expiration of the Restricted
Period,   the  recipient shall  decline to
provide if requested to provide, or is unable to provide if requested to
provide,  consulting services to the Company of a nature that have
been  customarily  provided by that recipient to the Company
the Bonus Shares shall be forfeited.
 
 
 Item
2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
 
 CERTAIN
FORWARD-LOOKING INFORMATION
  Information
provided in this Quarterly report on Form 10Q may contain forward-looking
statements within the meaning of Section 21E or Securities Exchange Act of 1934
that are not historical facts and information. These statements represent the
Company's expectations or beliefs, including, but not limited to, statements
concerning future and operating results, statements concerning industry
performance, the Company's operations, economic performance, financial
conditions, margins and growth in sales of the Company's products, capital
expenditures, financing needs, as well assumptions related to the forgoing. For
this purpose, any statements contained in this Quarterly Report that are not
statement of historical fact may be deemed to be forward-looking statements.
These forward-looking statements are based on current expectations and involve
various risks and uncertainties that could cause actual results and outcomes for
future periods to differ materially from any forward-looking statement or views
expressed herein. The Company's financial performance and the forward-looking
statements contained herein are further qualified by other risks including those
set forth from time to time in the documents filed by the Company with the
Securities and Exchange Commission, including the Company's most recent Form
10KSB for the year ended September 30, 2008. All references to” We”,
“Us”,  “Company” or the “Company” refer to Bio-Matrix Scientific
Group, Inc.
  Material
Changes in Financial Condition:
 
 As of
December 31, 2008, we had cash on hand of  $13,796  and as
of September 30, 2008 we had cash on hand of   $8,410
..
 
 The
increase in cash on hand of approximately 64% is primarily attributable to
increases in Notes Payable.
 
 As of
December 31, 2008 we had Securities Available for Sale of $10,000 as of
September 30, 2008 we had Securities Available for Sale of $550,000
 
 The
decrease in Securities Available for Sale of  approximately 98% is
primarily attributable to a decrease in fair value  recorded as
an  unrealized  loss.
 
 As of
December 31, we had prepaid expenses of $38,693  and as of September
30, 2008  we had prepaid expenses of  $49,258.
 
 The
decrease in prepaid expenses of approximately 21% is primarily attributable
to the recognition of expenses of  approximately  $20,000 of
a  prepaid 12 month Contract entered into on March 21,
2008  partially offset by the payment of  $7018
of  prepaid interest to two Convertible Note Holders.
 
 As of
December 31, 2008 we had Other Assets of $25,507   and as of
September 30, 2008 we had Other Assets of  $21,307.
 
 The
increase in Other Assets of approximately 20% is attributable to a security
deposit on additional office space.
 
 As of
December 31, 2008 we had Accounts Payable of  $123,335 and as of
September 30, 2008 we had Accounts Payable of  $89,974.
 
 The
increase in Accounts Payable of approximately 37% is primarily attributable to
payables incurred in relation to services provided by contractors.
 
 As of
December 31, 2008 we had Notes Payable
of  $336,809     and as of September 30, 2008
we had Notes Payable of  $111,459.
 
 The
increase in Notes Payable of approximately 200 % is attributable to
increased borrowing to cover operational costs.
 
 As
of December 31, 2008 we had Accrued Payroll of $220,500  and as
of September 30, 2008 we had Accrued Payroll
of  $150,000.
 
 The
increase in Accrued Payroll of approximately 47% is primarily attributable
to  increases in employee compensation which have accrued and have not
yet been paid.
 
 As
of December 31, 2008 we had Accrued Expenses  of
$35,000  and as of September 30, 2008 we had Accrued Expenses
of  $30,000.
 
 The
increase in Accrued Expenses  of approximately 17% is primarily
attributable to  an expense incurred yet not paid as of December 31,
2008 of $5,000 incurred pursuant to the Company’s license agreement with the
Regents of the University of California
 
 On
September 29, 2008, the Company purchased 1,000,000 of the common shares of
Freedom Environmental Services, Inc. (“FESI shares”)  from Bombardier
Pacific Ventures, Inc. (“Bombardier”) , a company controlled by David Koos , our
Chairman and CEO,  for consideration consisting of a Promissory Note
(“Note”) in the principal amount of $500,000 issued by BMSN to Bombardier,
resulting in an amount owed pursuant to the Note of $500,000 as of September 30,
2008.
 
 Pursuant
to the terms and conditions of the Note, the entire principal amount of $500,000
together with accrued simple interest of 10% per annum, is due and payable to
Bombardier on November 29, 2009.
 
 On
December 21, 2008 Bombardier modified the Promissory Note with BMSN. Bombardier
agreed to accept $1,000 en lieu of the original $500,00 payment owed by the
Company to  Bombardier for the purchase of FESI shares. This resulted
in a decrease of $499,000 of the amount due pursuant to the Note as of December
31, 2008, a decrease of approximately 99% from September 30, 2008.
 
 Material
Changes in Results of Operations
 
 Revenues
were -0- for the quarter ending December 31, 2008 and -0- for the same quarter
ending December 31, 2007. Net losses were $ 388,722 for the three months ended
December 31, 2008 and $405,812 for the same period ended December 31, 2007,
a decrease of approximately 4%.
 
 This
decrease in Net Losses is primarily attributable to a decrease in consulting and
professional expenses from  $142,237 incurred in the three months ended
December 31, 2007 to $62,300 incurred in the three months ended December 31,
2008, a decrease of approximately 56%. We attribute this primarily to higher
accounting consulting and professional accounting fees incurred during the
quarter ended  December 31, 2007 as compared to  the quarter
ended December 31, 2008. This decrease was partially offset by increases in
General and Administrative expenses primarily attributable to higher salaries,
increases in Research and Development expenses primarily attributable to
payments to outside contractors and increased Interest Expenses attributable
to  increases in Convertible Notes payable from November 14, 2007
to  March 4,2008 as well as substantial increase in outstanding Notes
Payable.
 
 Liquidity
and Capital Resources
 
 As of
December 31, 2008, we had $13,796 cash on hand, $10,000 of securities
available for sale and current liabilities of $913,370 such liabilities
consisting of Accounts Payable, Notes Payable, Accrued Payroll Taxes, Accrued
Expenses  and Accrued Interest.
  We feel we
will not be able to satisfy its cash requirements over the next twelve months
and shall be required to seek additional financing.
  At this
time, we plan to fund our financial needs through operating revenues (which
cannot be assured) and, if required, through equity private placements of common
stock. (No plans, terms, offers or candidates have yet been established and
there can be no assurance that the company will be able to raise funds on terms
favorable to us or at all.) 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.
 
 Over the
next 12 months and if we are successful in obtaining necessary licenses (as
described below), we anticipate opening our stem cell bank and marketing our
disposable stem cell / tissue management instruments
 
 On
December 22, 2007 we submitted our registration to the FDA under the Public
Health Service Act to satisfy the regulatory requirements involving the storage
of stem cells and other tissue. These regulatory requirements apply to all
establishments engaged in the recovery, processing, storage, labeling,
packaging, or distribution of any Human Cells, Tissues, and Cellular and
Tissue-Based Products (HCT/Ps) or the screening or testing of a cell or tissue
donor.  We have obtained our Biologics License for accepting blood for
storage as a blood bank and anticipate filing for a Tissue Bank License from the
Department of Health Services of the State of California in order that we may
accept adipose and other tissue specimens for short and long term
storage.
 
 We do not,
at this time, plan any additional research and development on our line of
medical instruments. We are currently anticipating the granting of utility
patents covering our line of medical instruments, the granting of which cannot
be assured. Upon, and dependent upon, the granting of these utility patents we
anticipate sourcing a manufacturing facility to produce our line of medical
instruments.
 
 Over the
next twelve months and if we are successful in obtaining the necessary
additional financing and obtaining equipment and necessary additional
professional staff, we anticipate purchasing the following significant
laboratory equipment:
  In the
event that we are successful in obtaining the amount of the additional
financing that we require on acceptable terms, we currently anticipate that
we will need to add the following additional employees during the twelve
month period thereafter:
 
 Title
                  Estimated
                    Annual CompensationDirector of
      Labs
                  
                  $
                  120,000Director of
      Quality & Assurance
                  
                  $
                  75,000Adm.
      Director
                  
                  $
                  75,000Dir.
      Of Engineering / Production
                  
                  $
                  85,000Lab
      Tech
                  
                  $
                  65,000Lab
      Tech
                  
                  $
                  65,000Customer
      Service Representative.
                  
                  $
                  45,000Director
      of Market & Sales
                  
                  $
                  100,000Facility
      Manager / Receiving & Shipping
                  
                  $
                  60,000Support
      Staff
                  
                  $
                  50,000Total
                  
                  $
                  740,000
  The
Company cannot assure that it will be successful in obtaining additional
financing necessary to implement its business plan.  The Company
has not received any commitment or expression of interest from any
financing source that has given it any assurance that it will obtain the
amount of additional financing in the future that it currently
anticipates.  For these and other reasons, the Company is not able to
assure that it will obtain any additional financing or, if it
is successful, that it can obtain any such financing on terms that may
be reasonable in light of its current circumstances.
 
 We have
not undertaken any efforts to recruit any persons to fill any of the positions
shown above.  We may face protracted difficulties in recruiting
individuals with sufficient experience and skills needed to fill these positions
and we cannot assure  that we  will be successful in
obtaining the necessary persons at the compensations levels shown above or that
we will not incur significant additional expenses to attract, relocate, and
retain any persons that we recruit.
  These time
frames and our objectives are subject to change as we review and re-evaluate
market conditions and opportunities.
  
 Item
3. Quantitative and Qualitative Disclosures About Market Risk
 
 As a
smaller reporting company, as defined by Rule 229.10(f) (1) of Regulation S-K ,
we are  not required to provide the information required by this Item.
We have chosen to disclose, however, that we have not  engaged in any
transactions, issued or bought any financial instruments or
entered  into  any  contracts  that are
required to be disclosed in response to this item.
 
 Item
4. Controls and Procedures.
 
 Evaluation
of Disclosure Controls and Procedures
 
 As of the
end of the period covered by this report, the Company carried out an evaluation,
under the supervision and with the participation of David Koos, who is the
Company's Principal Executive Officer/Principal Financial Officer, of the
effectiveness of the design and operation of the Company's disclosure controls
and procedures. The Company's disclosure controls and procedures are designed to
provide a reasonable level of assurance of achieving the Company's disclosure
control objectives. The Company's Principal Executive Officer/Principal
Financial Officer has concluded that the Company's disclosure controls and
procedures are, in fact, effective at this reasonable assurance level as of the
period covered.
 
 Changes in
Internal Controls over Financial Reporting
 
 In
connection with the evaluation of the Company's internal controls during the
period commencing on October  1, 2008 and ending December 31, 2008,
David Koos, who is both the Company's Principal Executive Officer and Principal
Financial Officer has determined that there were no changes to the Company's
internal controls over financial reporting that have been materially affected,
or is reasonably likely to materially effect, the Company's internal controls
over financial reporting.
 
 PART
II—OTHER INFORMATION
 
 Item
1. Legal Proceedings.
 
 On October
7, 2008, a  Complaint  (“Complaint”)  was
filed  in the District Court of Clark County Nevada against the
Company,  the Company’s Chairman, and  BMXP (currently named
Freedom Environmental Services, Inc.) (collectively “Defendants”) by Princeton
Research, Inc. (“Princeton”) seeking to recover unspecified General damages in
excess of $10,000, unspecified specific damages, an order from the court
declaring that the defendants fraudulently conveyed assets from BMXP to the
Company, attorney’s fees and cost of suit based on allegations that the sale of
BMSG to the Company as well as the name change and cessation of operations of
BMXP constitute a breach of contract by , fraudulent conveyance
by,  and unjust enrichment of the Defendants. The Company believes
that the allegations in the complaint are without merit and intends to
vigorously defend its interests in this matter.  At this time, it is
not possible to predict the ultimate outcome of these matters.
 
 Item
2. Unregistered Sales of Equity Securities and Use of Proceeds.
 
 On
December 2, 2008 the Company issued 1,099,999 shares of common stock to
Preferred Shareholders in exchange for 1,099,000 shares of the Company’s
Preferred Stock which was subsequently retired
 
 The offer
and sale of the shares was exempt from the registration provisions of the
Securities Act of 1933, as amended, by reason of Section 4(2)
thereof.
 
 The shares
were offered directly through the management. No underwriters were retained to
serve as placement agents. 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 of Common Stock stating
that the shares of Common Stock have not been registered under the Act and
setting forth or referring to the restrictions on transferability and sale of
the shares of Common Stock.
 
 On
December 3, 2008 the Company issued  133,124 shares  of common
stock to holders of the Company’s Convertible Debentures in satisfaction of $
26,263  of accrued interest and to prepay  $7,018 of
interest
 
 The offer
and sale of the shares was exempt from the registration provisions of the
Securities Act of 1933, as amended, by reason of Section 4(2)
thereof.
 
 The shares
were offered directly through the management. No underwriters were retained to
serve as placement agents. 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 of Common Stock stating
that the shares of Common Stock have not been registered under the Act and
setting forth or referring to the restrictions on transferability and sale of
the shares of Common Stock.
 
 On  December
31, 2008 the Company issued 75,000 units (“Units”), each unit consisting of one
share of the Company’s Preferred Stock and one Preferred Stock Purchase Warrant
(“Warrant”) exercisable for a period of three months from the date of issuance
into one share of the Company’s Preferred Stock at $0.15 per share, for
consideration consisting of $11,250.
 
 As an
additional incentive to purchase the Units and not as a characteristic,
right or designation of the Preferred Stock the Company has also entered
into agreements with the abovementioned recipient of Units whereby the Company
has agreed to exchange, at any time subsequent to six months from issuance at
the demand of the purchaser, any and all Preferred Shares owned by that
purchaser through either the purchase of the Units or exercise of the Warrants
into an equivalent number of shares of the company’s common
stock.
 
 The net
proceeds, which are $11,250, will be utilized general working capital purposes.
No underwriters were retained to serve as placement agents for the sale. These
Units were sold directly through our management. No commission or other
consideration was paid in connection with the sale of the Units. There was no
advertisement or general solicitation made in connection with this offer and
sale of the Units. The offer and sale of the Units was exempt from the
registration provisions of the Securities Act by reason of Section 4(2) thereof.
Management made its determination of the availability of such exemption based
upon the facts and circumstances surrounding the offer and sale of the Units,
including the representations and warranties made by the purchaser and the fact
that a restrictive legend was placed on the securities comprising the Units and
restrictive legends will be placed on, and stop transfer orders placed against,
the certificates for any Common Shares which may be issued in accordance with
the abovementioned agreements with the Unit holder.
 
 On
December 31, 2008  the Company issued 33,330 shares of the Company’s
Preferred Stock  for consideration consisting of  services
rendered .
 
 The offer
and sale of the shares was exempt from the registration provisions of the
Securities Act of 1933, as amended, by reason of Section 4(2)
thereof.
 
 The shares
were offered directly through the management. No underwriters were retained to
serve as placement agents. 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 of preferred Stock
stating that the shares of Preferred Stock have not been registered under the
Act and setting forth or referring to the restrictions on transferability and
sale of the shares of Preferred Stock.
 
 On  December
31, 2008 the Company issued 66,670 units (“Units”), each unit consisting of one
share of the Company’s Preferred Stock and one Preferred Stock Purchase Warrant
(“Warrant”) exercisable for a period of three months from the date of issuance
into one share of the Company’s Preferred Stock at $0.10 per share, for
consideration consisting of $6,667.
 
 As an
additional incentive to purchase the Units and not as a characteristic,
right or designation of the Preferred Stock.  The Company has
also entered into agreements with the abovementioned recipient of Units whereby
the Company has agreed to exchange, at any time subsequent to six months from
issuance at the demand of the purchaser, any and all Preferred Shares owned by
that purchaser through either the purchase of the Units or exercise of the
Warrants into an equivalent number of shares of the company’s common
stock.
 
 The net
proceeds, which are $6,667, will be utilized general working capital purposes.
No underwriters were retained to serve as placement agents for the sale. These
Units were sold directly through our management. No commission or other
consideration was paid in connection with the sale of the Units. There was no
advertisement or general solicitation made in connection with this offer and
sale of the Units. The offer and sale of the Units was exempt from the
registration provisions of the Securities Act by reason of Section 4(2) thereof.
Management made its determination of the availability of such exemption based
upon the facts and circumstances surrounding the offer and sale of the Units,
including the representations and warranties made by the purchaser and the fact
that a restrictive legend was placed on the securities comprising the Units and
restrictive legends will be placed on, and stop transfer orders placed against,
the certificates for any Common Shares which may be issued in accordance with
the abovementioned agreements with the Unit holder.
  On January
7, 2009 50,000 Preferred Shares of the Company were issued to a consultant as
consideration for services rendered.
  The offer
and sale of the shares was exempt from the registration provisions of the
Securities Act of 1933, as amended, by reason of Section 4(2)
thereof.
 
 The shares
were offered directly through the management. No underwriters were retained to
serve as placement agents. 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 of Preferred Stock
stating that the shares of Preferred Stock have not been registered under the
Act and setting forth or referring to the restrictions on transferability and
sale of the shares of Preferred Stock.
 
 On January
7, 2009 100,000 common shares were issued to a consultant as a bonus for
services rendered (“Bonus Shares”). As a condition of the issuance of the Bonus
Shares, recipient agreed:
 
 not
to offer to sell, sell, transfer, pledge or otherwise dispose of the Bonus
Shares prior to  January 10, 2010 (“Restricted period”)
 
 in the
event that, prior to the expiration of the Restricted
Period,   the  recipient shall  decline to
provide if requested to provide, or is unable to provide if requested to
provide,  consulting services to the Company of a nature that have
been  customarily  provided by that recipient to the Company
the Bonus Shares shall be forfeited
 
 The shares
were offered directly through the management. No underwriters were retained to
serve as placement agents. 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 of
Common  Stock stating that the shares of Common Stock have not been
registered under the Act and setting forth or referring to the restrictions on
transferability and sale of the shares of
Common  Stock.
 
 On January
12, 2009,  the Company issued 1,300,000 Common Shares and 25,000
Preferred Shares (collectively “Shares”) for total consideration of $105,000.
There was no advertisement or general solicitation made in connection with this
offer and sale of Shares. The offer and sale of these Shares was exempt from the
registration provisions of the Securities Act by reason of Section 4(2) thereof
and Rule 506 of Regulation D thereunder. Management made its determination of
the availability of such exemption based upon the facts and circumstances
surrounding the offer and sale of these Shares, including the representations
and warranties made by the purchasers and the fact that restrictive legends were
placed on, and stop transfer orders placed against, the certificates for these
Shares.
 
 The net
proceeds, which are $105,000, will be utilized general working capital purposes.
No underwriters were retained to serve as placement agents for the sale. These
Shares were sold directly through our management. No commission or other
consideration was paid in connection with the sale of the Shares.
 
 Item
3. DEFAULTS UPON SENIOR SECURITIES
 
 None.
  Item
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
 None.
  Item
5. OTHER INFORMATION
 
 None.
 Item
6. EXHIBITS
  31.1
                Certification
      of Chief Executive Officer31.2
                Certification
      of Acting Chief Financial Officer32.1
                Certification
      of Chief Executive Officer under Section 906 of the Sarbanes-Oxley Act of
      2002.32.2
                Certification
      of Acting Chief Financial Officer under Section 906 of the Sarbanes-Oxley
      Act of 2002.
 
 
 SIGNATURES
 
 In
accordance with the requirements of the Exchange Act, the Company caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
 
 Bio-
      Matrix Scientific Group, Inc.a
      Delaware corporationBy:
              /s/
      David R. KoosDavid
      R. KoosChief
      Executive OfficerDate:
      January 30, 2009