SECURITIES AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-QSB





Quarterly
Report under Section 13 or 15 (d) of


Securities
Exchange Act of 1934





For Period
ended June 30, 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 xNoo








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 £ No S





Transitional
Small Business Disclosure Format (check one): Yes £ No S





There were
23,830,773   shares of Common Stock outstanding as of June 30,
2008.




1




Item
1. Financial Statements.




Chang
G. Park, CPA, Ph. D.
 t 2667 CAMINO Del Rio
SOUTH PLAZA B t SAN
DIEGO t CALIFORNIA
92108-3707t
 t TELEPHONE (858)722-5953
t FAX (858)
761-0341  t FAX (858)
764-5480
 t E-MAIL
changgpark@gmail.comt
 
 Report of Independent
Registered Public Accounting Firm
 
 
 To the
Board of Directors of
 Bio-Matrix
Scientific Group, Inc. and Subsidiary
 (A
Development Stage Company)
 
 
 We have
reviewed the accompanying consolidated balance sheet of Bio-Matrix Scientific
Group, Inc. and Subsidiary (A Development Stage “Company”) as of June 30, 2008,
and the related consolidated statements of operation, changes in stockholders’
equity, and cash flows for the nine months and three months ended June 30, 2008;
and for the period from August 2, 2005 (inception) through June 30,
2008.  These financial statements are the responsibility of the
Company’s management.
 
 We
conducted our review in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters.  It is substantially less in scope than an audit
conducted in accordance with the standards of the Public Company Accounting
Oversight Board, the objective of which is the expression of an opinion
regarding the financial statements taken as a whole.  Accordingly, we
do not express such an opinion.
 
 Based on
our review, we are not aware of any material modifications that should be made
to the consolidated financial statements referred to above for them to be in
conformity with generally accepted accounting principles.
 
 The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern.  As discussed in Note 5
to the consolidated financial statements, the Company is currently in the
development stage.  Because of the Company’s current status and
limited operations there is substantial doubt about its ability to continue as a
going concern.  Management’s plans in regard to its current status are
also described in Note 5.  The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
  
 
 /s/Chang G.
      ParkChang
      G. Park, CPAJuly
      28, 2008San
      Diego, California


2




Bio-Matrix
Scientific Group Inc. and subsidiary


(A
Development Stage Company)


Consolidated
Balance Sheet as of June 30, 2008


(Unaudited)





ASSETSCURRENT
      ASSETSCash
              
              $
              220,882Pre-paid
      Expenses
              
              
              71,636Total
      Current Assets
              
              
              292,518PROPERTY
      & EQUIPMENT
              
              
              529,263Total
      Other Assets
              
              
              21,307TOTAL
      ASSETS
              
              $
              843,088CURRENT
      LIABILITIESAccounts
      payable
              
              $
              58,408Notes
      Payable
              
              
              40,278Accrued
      Payroll
              
              
              117,000Accrued
      Payroll  taxes
              
              
              29,568Accrued
      Interest
              
              
              27,276Accrued
      expenses
              
              
              30,000Total
      Current Liabilities
              
              
              302,530LONG
      TERM LIABILITIESConvertible
      Note
              
              
              503,400TOTAL
      LIABILITIES
              
              
              805,930STOCKHOLDERS'
      EQUITYPreferred
      Stock ($.0001 par value20,000,000
      shares authorized; 5,566,662issued
      and outstanding as of June 30, 2008)
              
              
              557Common
      Stock,  ($.0001  par value80,000,000
      shares authorized;  23,830,773shares
      issued and outstanding as of June 30, 2008
              
              
              2,383Additional
      paid in Capital
              
              
              6,794,741Deficit
      accumulated during the development stage
              
              
              (6,760,523
              )Total
      Stockholders' Equity (Deficit)
              
              $
              37,158TOTAL LIABILITIES AND
      SHAREHOLDER’S
      EQUITY
              
              $
              843,088




The
Accompanying Notes are an Integral Part of these financial
statements


3




Bio-Matrix
Scientific Group Inc. and subsidiary


(A
Development Stage Company)


Consolidated
Statements of Operations


(Unaudited)





Inception3
      Months Ended
            
            
            3
      MonthsEnded
            
            
            9
      Months Ended
            
            
            9
      Months Ended
            
            
            (August
      2, 2005)June
      30,
            
            
            June
      30
            
            
            June
      30,
            
            
            June
      30,
            
            
            through2008
            
            
            2007
            
            
            2008
            
            
            2007
            
            
            June
      30,(unaudited)
            
            
            (unaudited)
            
            
            (unaudited)
            
            
            (unaudited)
            
            
            2008(unaudited)REVENUESSales
            
            $
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0Total
      Revenues
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0COSTS
      AND EXPENSESResearch
      and Development
            
            
            57,388
            
            
            
            59,337
            
            
            
            128,763
            
            
            
            228,429
            
            
            
            600,680General
      and administrative
            
            
            263,372
            
            
            
            421,315
            
            
            
            714,023
            
            
            
            863,078
            
            
            
            3,170,345Depreciation
      and amortization
            
            
            
            
            
            
            334
            
            
            
            453
            
            
            
            1,001
            
            
            
            2,668Consulting
      and professional fees
            
            
            721,814
            
            
            
            223,763
            
            
            
            1,000,579
            
            
            
            587,924
            
            
            
            2,883,445Impairment
      of goodwill & intangibles
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            34,688Total
      Costs and Expenses
            
            
            1,042,574
            
            
            
            714,749
            
            
            
            1,843,818
            
            
            
            1,680,432
            
            
            
            6,691,826OPERATING
      LOSS
            
            
            (1,042,574
            )
            
            
            (714,749
            )
            
            
            (1,843,818
            )
            
            
            (1,680,432
            )
            
            
            (6,691,826
            )OTHER
      INCOME & (EXPENSES)Interest
      Expense
            
            
            (20,872
            )
            
            
            (4,206
            )
            
            
            (42,865
            )
            
            
            (20,560
            )
            
            
            (69,030
            )Interest
      Income
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            306
            
            
            
            306Other
      income
            
            
            
            
            
            
            
            
            
            
            100
            
            
            
            
            
            
            
            100Other
      Expense
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (73
            )
            
            
            (74
            )Total Other
      Income &
              (Expenses)
            
            
            (20,872
            )
            
            
            (4,206
            )
            
            
            (42,765
            )
            
            
            (20,327
            )
            
            
            (68,698
            )NET
      INCOME (LOSS)
            
            $
            (1,063,446
            )
            
            
            (718,955
            )
            
            
            (1,886,583
            )
            
            
            (1,700,759
            )
            
            
            (6,760,524
            )Loss Attributable
      to Common
              Shareholders
            
            
            (1,063,446
            )
            
            
            (718,955
            )
            
            
            (1,886,583
            )
            
            
            (1,700,759
            )
            
            
            (6,760,524
            )BASIC AND DILUTED
              EARNINGS (LOSS) PER
      SHARE
            
            
            (0.04
            )
            
            
            (0.04
            )
            
            
            (0.08
            )
            
            
            (0.10
            )WEIGHTED
      AVERAGE
              NUMBER
      OFCOMMON
              SHARESOUTSTANDING
            
            
            23,696,781
            
            
            
            19,330,268
            
            
            
            23,525,620
            
            
            
            17,178,178




The
Accompanying Notes are an Integral Part of these financial
statements


4




BIO-MATRIX
      SCIENTIFIC GROUP INC. AND SUBSIDIARYConsolidated
      Statement of Stockholders' Equity (Unaudited)From
      August 2, 2005 through March 31, 2008AdditionalPreferred
              
              
              Common
              
              
              Paid-in
              
              
              RetainedShares
              Amount
              
              Shares
              
              
              Amount
              
              
              Capital
              
              
              Earnings
              
              
              TotalShares
      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
              )Net
      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
              )
              
              
              37,158
  The
Accompanying Notes are an Integral Part of these financial
statements


5




BIO-MATRIX
SCIENTIFIC GROUP, INC. AND SUBSIDIARY


(A
Development stage Company)


Unaudited
Consolidated Statements of Cash Flows





August
      2, 2005(inception)3
      Months ended
              
              
              3
      Months ended
              
              
              9
      Months Ended
              
              
              9
      Months Ended
              
              
              throughJune
      30,
              
              
              June
      30,
              
              
              June
      30,
              
              
              June
      30,
              
              
              June
      30,2008
              
              
              2007
              
              
              2008
              
              
              2007
              
              
              2008(unaudited)
              
              
              (unaudited)
              
              
              (unaudited)
              
              
              (unaudited)
              
              
              (unaudited)CASH FLOWS FROM
      OPERATING ACTIVITIESNet
      (loss)
              
              $
              (1,063,446
              )
              
              
              (718,955
              )
              
              
              (1,886,583
              )
              
              
              (1,700,759
              )
              
              
              (6,760,524
              )Adjustments
      to reconcile net loss to net cash (used in) providedby
      operating activities:Depreciation
      expense
              
              
              
              
              
              
              333
              
              
              
              453
              
              
              
              1000
              
              
              
              2,667Stock
      issued for compensation
              
              
              
              
              
              
              110,450
              
              
              
              
              
              
              
              300,344
              
              
              
              910,342Stock
      issued for services
              
              
              613,603
              
              
              
              222,930
              
              
              
              782,432
              
              
              
              570,542
              
              
              
              2,516,973Stock
      issued for interest
              
              
              17,296
              
              
              
              
              
              
              
              17,296
              
              
              
              
              
              
              
              17,296Stock
      issued to cancel debt and accrued interest
              
              
              
              
              
              
              329,191
              
              
              
              
              
              
              
              1,900,596Changes
      in operating assets and liabilities:(Increase)
      decrease in receivables
              
              
              113
              
              
              
              3,000
              
              
              
              0
              
              
              
              0
              
              
              
              0(Increase)
      decrease in prepaid expenses
              
              
              27,952
              
              
              
              10,571
              
              
              
              (60,338
              )
              
              
              7,051
              
              
              
              -71,636Increase
      (Decrease) in Accounts Payable
              
              
              (65,639
              )
              
              
              1,538
              
              
              
              49,393
              
              
              
              (85,596
              )
              
              
              58,408Increase
      (Decrease) in Accrued Expenses
              
              
              34,807
              
              
              
              14,565
              
              
              
              158,805
              
              
              
              24,541
              
              
              
              233,791Net
      Cash Provided by (Used in) Operating Activities
              
              
              (435,314
              )
              
              
              (26,377
              )
              
              
              (938,542
              )
              
              
              1,017,719
              
              
              
              (3,092,683
              )CASH FLOWS FROM
      INVESTING ACTIVITIES(
      Increase) Decrease in Deposits
              
              
              1,785
              
              
              
              2634
              
              
              
              1,785
              
              
              
              6,035
              
              
              
              (21,307
              )Purchases
      of fixed assets
              
              
              (33,487
              )
              
              
              
              
              
              
              (164,393
              )
              
              
              (24,847
              )
              
              
              (531,931
              )Net
      Cash Provided by (Used in) Investing Activities
              
              
              (31,702
              )
              
              
              2634
              
              
              
              (162,608
              )
              
              
              (18,812
              )
              
              
              (553,238
              )CASH
      FLOWS
      FROM FINANCING ACTIVITIESPreferred
      Stock issued for cash
              
              
              215
              
              
              
              
              
              
              
              272
              
              
              
              
              
              
              
              272Common
      stock issued for cash
              
              
              
              
              
              
              24
              
              
              
              
              
              
              
              74
              
              
              
              1,472Additional
      paid in Capital
              
              
              672,172
              
              
              
              60,142
              
              
              
              787,114
              
              
              
              185,092
              
              
              
              1,306,729Principal
      borrowings on notes and Convertible Debentures
              
              
              (86,679
              )
              
              
              (182,716
              )
              
              
              (1,330
              )
              
              
              (10,106
              )
              
              
              859,734Convertible
      notes
              
              
              
              
              
              
              
              
              
              
              503,400
              
              
              
              
              
              
              
              503,400Increase
      (Decrease) in Bank Overdraft
              
              
              
              
              
              
              
              
              
              
              (11,534
              )
              
              
              
              
              
              
              0Net
      borrowings from related parties
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (1,195,196
              )
              
              
              1,195,196Net
      Cash Provided by (Used in) Financing Activities
              
              
              585,708
              
              
              
              (122,550
              )
              
              
              1,277,922
              
              
              
              (1,020,136
              )
              
              
              3,866,803Net
      Increase (Decrease) in Cash
              
              
              118,692
              
              
              
              (146,293
              )
              
              
              176,772
              
              
              
              (21,229
              )
              
              
              220,882Cash
      at Beginning of Period
              
              
              102,190
              
              
              
              147,705
              
              
              
              44,110
              
              
              
              22641
              
              
              
              0Cash
      at End of Period
              
              $
              220,882
              
              
              
              1,412
              
              
              
              220,882
              
              
              
              1,412
              
              
              
              220,882Supplemental  Cash
      Flow Disclosures:Significant
      non-cash activities:Stock
      issued to cancel debt
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              2,044,592Preferred
      stock issued for stock dividend
              
              
              108
              
              
              
              
              
              
              
              108
              
              
              
              
              
              
              
              108Total
              
              
              108
              
              
              
              
              
              
              
              108
              
              
              
              
              
              
              
              2,044,700








6


BIO-MATRIX
SCIENTIFIC GROUP, INC. AND SUBSIDIARY


Notes to
consolidated Financial Statements
 (Unaudited)
 As of June
30, 2008
 
 NOTE 1.
ORGANIZATION AND DESCRIPTION OF BUSINESS
 
 Bio-Matrix
Scientific Group, Inc. (“Company”) was organized October 6, 1998, under the laws
of the State of Delaware as Tasco International, Inc.
 
 The
Company is in the development stage. From October 6, 1998 to June 3, 2006 its
activities have been limited to capital formation, organization, and development
of its business plan to provide production of visual content and other digital
media, including still media, 360-degree images, video, animation and audio for
the Internet.
 
 On July 3,
2006 the Company abandoned its efforts in the field of digital media production
when it acquired 100% of the share capital of Bio-Matrix Scientific Group, Inc.,
a Nevada corporation, for consideration consisting of 10,000,000 shares of the
common stock of the Company and the cancellation of 10,000,000 shares of the
Company owned and held by John Lauring.
 
 As a
result of this transaction, the former stockholder of Bio-Matrix Scientific
Group, Inc held approximately 80% of the voting capital stock of the Company
immediately after the transaction.  For financial accounting purposes,
this acquisition was a reverse acquisition of the Company by Bio-Matrix
Scientific Group, Inc under the purchase method of accounting, and was treated
as a recapitalization with Bio-Matrix Scientific Group, Inc. as the acquirer.
Accordingly, the financial statements have been prepared to give retroactive
effect to August 2, 2005 (date of inception), of the reverse acquisition
completed on July 3, 2006, and represent the operations of Bio-Matrix Scientific
Group, Inc.
 
 Bio-Matrix
Scientific Group, Inc. (“BMSG”) is a development stage company in the business
of designing, developing, and marketing medical devices, specifically disposable
instruments used in stem cell extraction and tissue transfer procedures and
operating cryogenic cellular storage facilities, specifically stem cell banking
facilities. BMSG is the Company's only subsidiary and operating entity at this
time.
 
 On
November 1, 2007, the Company was granted a Biologics license (“License”) from
the Department of Health Services of the State of California. This License
permits the Company’s current facility to accept and store cord blood (Stem
Cells), whole blood, and various blood related specimens for cryogenic short and
long term storage and on November 13, 2007, the Company entered into an
agreement with Dr. Joao L. Ascensao, M.D., Ph.D., F.A.C.P. whereby Dr. Ascensao,
as an independent contractor and not as an employee, has agreed to act
as the Company’s Medical Director.
 
 On March
4, 2008 the Company entered into a Letter of Intent (“LOI”) with the Regents of
the University of California (“Regents) whereby the Regents  shall
negotiate exclusively with the Company for  an exclusive license for
life of the Patent Rights to a Screening Test for Gestational Diabetes Mellitus
UCLA Case Number 2007-523  (“License Agreement”) . As consideration
for this promise, Company agreed to pay a nonrefundable fee of Five hundred
dollars ($500) within ten (10) days of the execution of this Letter of Intent,
and to reimburse The Regents for costs incurred in the drafting and filing of a
provisional patent application for UCLA Case Number 2007-523 up to a maximum
total of Three Thousand Dollars ($3,000).
  7
 
 NOTE 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 A. BASIS
OF ACCOUNTING
 
 The
financial statements have been prepared using the accrual basis of accounting.
Under the accrual basis of accounting, revenues are recorded as earned and
expenses are recorded at the time liabilities are incurred. The Company has
adopted a September 30, year-end.
 
 B. USE OF
ESTIMATES
 
 The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
 
 C.
DEVELOPMENT STAGE
 
 The
Company is a development stage company that devotes substantially all of its
efforts in the development of its plan to operate in the field of the
development, manufacture and marketing of medical devices and the operation of
cellular storage facilities, specifically stem cell banking
facilities.
 
 D. CASH
EQUIVALENTS
 The
Company considers all highly liquid investments with a maturity of three months
or less when purchased to be cash equivalents.
 
 E.
PROPERTY AND EQUIPMENT
 
 Property
and equipment are recorded at cost. Maintenance and repairs are expensed in the
year in which they are incurred. Expenditures that enhance the value of property
and equipment are capitalized.
 
 The
Company has depreciated property and equipment by the straight-line method over
the useful life.
 
 F. INCOME
TAXES
 
 Income
taxes are provided in accordance with Statement of Financial accounting
Standards No. 109 (SFAS 109), Accounting for Income Taxes. A deferred tax asset
or liability is recorded for all temporary differences between financial and tax
reporting and net operating loss carry forwards. Deferred tax expense (benefit)
results from the net change during the year of deferred tax assets and
liabilities.
 
 Deferred
tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all of the deferred
tax assets will not be realized. Deferred tax assets and liabilities are
adjusted for the effects of changes in tax laws and rates on the date of
enactment.
 
 G. BASIC
EARNINGS (LOSS) PER SHARE
 
 In
February 1997, the FASB issued SFAS No. 128, "Earnings Per Share", which
specifies the computation, presentation and disclosure requirements for earnings
(loss) per share for entities with publicly held common stock. SFAS No. 128
supersedes the provisions of APB No. 15, and requires the presentation of basic
earnings (loss) per share and diluted earnings (loss) per share. The Company has
adopted the provisions of SFAS No. 128 effective October 6, 1998
(inception).
 
 Basic net
loss per share amounts is computed by dividing the net income by the weighted
average number of common shares
outstanding. Diluted earnings per share are the same as basic earnings per share
due to the lack of dilutive items in the Company.
 
 8
  NOTE 3.
Property and equipment
 
 
 Property
and equipment as of June 30, 2008 consists of the following:
 
 Acquisition
      cost:
              Estimate
      useful life (year)Production
      Equipment
              3 to
      5
              
              $
              US
              234,904Production
      Clean room
              10
              
              
              
              78,264Leasehold
      improvement
              10
              
              
              
              197,934Office
      equipment
              3 to
      5
              
              
              
              7,250Computer
              3
              
              
              
              13,579Subtotal
              
              
              
              
              531,931Less
      accumulated depreciation
              
              
              
              
              (2,668
              )Total
              
              
              $
              US
              529,263
 
 Depreciation
expenses were $0 and $334 for the three months ended June 30, 2008 and June 30,
2007, respectively. Depreciation expenses were $ 453 and $1,000 for the nine
months ended June 30, 2008 and June 30, 2007, respectively. With the exception
of one computer which is fully depreciated, no property and equipment has yet to
be utilized in production therefore no depreciation shall be recognized until
usage commences.
 
 
 NOTE 4.
WARRANTS AND OPTIONS
 
 
 Between
March 21st and
March 31, 2008, the Company issued warrants expiring 90 days after the execution
of their agreement and exercisable into 915,000 preferred shares of the Company
at $0.30 per share at any time prior to their expiration. 250,000 of these
warrants were subsequently exercised.
  On April
9, 2008, the Company issued 225,000 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 $0.30 per share, for
consideration consisting of $45,000. These Warrants were subsequently exercised
in full.
 
 On April
9, 2008, the Company issued 108,373 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 $0.30 per share, for
consideration consisting of $32,512.
 
 On May 20,
2008, the Company issued 142,857 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 $0.45 per share, for
consideration consisting of $50,000.
 
 On May 20,
2008, the Company issued 390, 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 $0.30 per share, for
consideration consisting of services amounting to $136,500.
 
 On May 28,
2008, the Company issued 200, 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 $0.35 per share, for
consideration consisting of $60,000.
 
 Between
May 28 and May 30, 2008, 475,000 shares of the Company’s Preferred Stock was
issued at $0.30 per Preferred Share pursuant to the exercise of issued
warrants.
 
 On May 27,
2008, the Company issued 71,429 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 $0.45 per share, for
consideration consisting of $25,000.
 
 9
 
 On May 29,
2008, the Company issued 175,125 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 $0.35 per share, for
consideration consisting of services amounting to $61,294.
 
 On May 30,
2008, the Company issued 71,429 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 $0.45 per share, for
consideration consisting of $25,000.
 
 On May 30,
2008, the Company issued 10,000 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 $0.45 per share, for
consideration consisting of services amounting to $3,500.
 
 On June 2,
2008, the Company issued 15,000 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 $0.30 per share, for
consideration consisting of $5,250.
 
 On June 3,
2008, the Company issued 103,334 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 $0.35 per share, for
consideration consisting of $31,000.
 
 On June 3,
2008, the Company issued 30,000 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 $0.30 per share, for
consideration consisting of $10,500.
 
 On June
11, 2008, the Company issued 71,429 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 $0.30 per share, for
consideration consisting of $25,000.
 
 On June
11, 2008, the Company issued 47,034 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 $0.35 per share, for
consideration consisting of $14,110.
 
 On June
11, 2008, the Company issued 30,000 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 $0.30 per share, for
consideration consisting of $10,500.
 
 On June
11, 2008, the Company issued 28,600 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 $0.30 per share, for
consideration consisting of $10,010.
 
 On June
11, 2008, the Company issued 28,600 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 $0.45 per share, for
consideration consisting of $10,010.
 
 On June
12, 2008, the Company issued 30,000 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 $0.30 per share, for
consideration consisting of $10,500.
 
 On June
13, 2008, the Company issued 285,715 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 $0.30 per share, for
consideration consisting of $100,000.
 
 On June
13, 2008, the Company issued 28,600 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 $0.45 per share, for
consideration consisting of $10,010.
 
 On June
16, 2008, the Company issued 45,000 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 $0.30 per share, for
consideration consisting of $15,750.
 
 10
  On June
18, 2008, the Company issued 27,450 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 $0.35 per share, for
consideration consisting of $8,235.
 
 On June
18, 2008 the Company issued 46, 600 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 $0.45 per share, for
consideration consisting of services amounting to $16,310.
 
 On June
18, 2008, the Company issued 90,000 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 $0.30 per share, for
consideration consisting of $31,500.
 
 Summary of the Company's warrants as of June 30, 2008
      and 2007 and changes during the periods is as
  follows:Quarter
      ended June 302008
              
              
              
              
              
              
              2007Weighted
      Average
              
              
              
              
              
              Weighted
      AverageWarrants
              
              
              
              Exercise
      Price
              
              
              Warrants
              
              
              Exercise
      PriceOutstanding
      at Beginning of Period
              
              
              362,500
              
              
              
              
              0.3
              
              
              
              0
              
              
              
              0Granted
              
              
              2,301,574
              
              
              
              
              0.33
              
              
              
              0
              
              
              
              0Exercised
              
              
              -475,000
              
              
              
              
              0.3Expired
      Unexercised
              
              
              -112,500
              
              
              
              
              0.3
              
              
              
              0
              
              
              
              0Outstanding
      at End of period
              
              
              2,076,574
              
              
              
              
              0.34
              
              
              
              0
              
              
              
              0The
      following table summarizes information regarding stock purchase warrants
      outstanding at June 30, 2008Exercise
              
              Number
              
              Weighted
      AveragePrice
              
              Outstanding
              
              Remaining
      Contract Life (Days)0.3
              
              1,124,116
              
              
              500.45
              
              399,515
              
              
              580.35
              
              552943
              
              
              61Total
      outstanding as of June 30, 2008
              
              
              
              
              2,076,574
              
              
              54
 
 
 NOTE 5.
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 $6,760,524
during the period from August 2, 2005 (inception) through June 30, 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. While
management has raised (a) $503,400 through the issuance of convertible
debentures during the nine months ended June 30, 2008 and (b) has raised
$787,386 through the sale of 2,729,850 shares of preferred stock during the nine
months ended June 30, 2008. 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.
 
 11
  NOTE 6.
INCOME TAXES
 
 As
      of June 30 , 2008Deferred
      tax assets:Net
      operating tax carry forwards
              
              $
              2,311706Other
              
              
              -0-Gross
      deferred tax assets
              
              
              2,311706Valuation
      allowance
              
              
              (2,311,706)Net
      deferred tax assets
              
              $
              -0-
  As
of  June 30, 2008 the Company has a  Deferred Tax Asset
of  $2,311,706 completely attributable to net operating loss carry
forwards  of approximately $6,799,140 ( 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)
$6,760,524 attributable to 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 7.
RELATED PARTY TRANSACTION
 
 On July 3,
2006, the Company acquired 100% of the share capital of BMSG from BMXP Holdings,
Inc., formerly named Bio-matrix Scientific Group, Inc. in a reverse acquisition
(See Note 13).
 
 David R.
Koos, the Chairman, CEO and President of the Company, is, and at the time of the
acquisition was, the Chairman and Chief Executive Officer of BMXP Holdings Inc.
as well as beneficial owner of 24% of the share capital of BMXP Holdings, Inc.
Brian Pockett, Vice President, COO and Director of the Company, is, and at the
time of the acquisition was, Chief Operating Officer, Managing Director and a
Director of BMXP Holdings Inc. as well as beneficial owner of 14% of the share
capital of BMXP Holdings, Inc.
 
 On October
11, 2006, the Company entered into an Agreement with BMXP Holdings, Inc (“BMXP”)
(“Agreement”) pursuant to which the Company issued to BMXP 1,462,570 common
shares of the Company on or prior to October 12, 2006. This issuance will
constitute full satisfaction of the amount of $1,191,619 plus any accrued and
unpaid interest, owed to BMXP by the Company.
 
 As further
consideration to BMXP for entering into this Agreement and abiding by the terms
and conditions thereof, at any time within a period of 365 days from the date of
the Agreement, BMXP shall have the right, upon written demand to the Company
(“Registration Demand”), to cause the Company, within ninety days of the
Registration Demand, to prepare and file with the United States Securities and
Exchange Commission (“SEC”) a registration statement to register under the
Securities Act of 1933, as amended, 11,462,570 common shares of the Company
(including the shares issued pursuant to this Agreement) owned by BMXP
(“Registerable Securities”), in order that the Registerable Securities may be
distributed to BMXP shareholders on a pro rata basis ( based on their ownership
of common shares of the Company as of a Record Date to be determined by BMXP),
and use its reasonable best efforts to cause that registration statement to be
declared effective by the SEC. This right may also be exercised by any entity to
which BMXP has transferred ownership of the Registerable Securities in trust for
the BMXP Record Shareholders.
 
 On April
4, 2007, 985,168 shares of the Company’s common stock were issued to Bombardier
Pacific Ventures in full satisfaction of $246,292 owed by the Company to
Bombardier Pacific Ventures. David R. Koos, the Company’s Chairman of the Board
of Directors, President, CEO, Secretary, and Acting CFO is the sole beneficial
owner of Bombardier Pacific Ventures.
 
 On July
30, 2007, the Company issued 566,217 common shares to Bombardier Pacific
Ventures in satisfaction of the principal amount of $141,554 owed
by the Company to Bombardier Pacific Ventures. David R. Koos, the Company’s
Chairman of the Board of Directors, President, CEO, Secretary, and Acting CFO,
is the sole beneficial owner of Bombardier Pacific Ventures.
  Between
October 12, 2007 and December 31, 2007, the Company borrowed $127,009 from
Bombardier Pacific Ventures. David R. Koos, the Company’s Chairman of the Board
of Directors, President, CEO, Secretary, and Acting CFO, is the sole beneficial
owner of Bombardier Pacific Ventures. In consideration for this loan, the
Company issued Bombardier Pacific Ventures a series of Notes, callable at par
plus any accrued and unpaid interest by the company upon five days written
notice, bearing simple interest at 15% maturing within one year of
issuance.
 
 
 NOTE 8.
CONVERTIBLE DEBENTURES
  On
November 14, 2007 the Company sold a   $50,000 face value
convertible debenture (“Convertible Debenture”) for an aggregate purchase price
of $50,000 to one purchaser.
 
 12
  Interest
on the Convertible Debenture shall accrue at a rate of 12% per annum based on a
365 day year. The Company shall pay simple interest to the holder on the
aggregate unconverted and then outstanding principal amount of this Convertible
Debenture at the rate of 12% per annum, payable on the maturity Date, which is
November 14, 2009.
 
 At any
time subsequent to the expiration of a six month period since either
of:
 
 (i)           that
Registration Statement, as amended,  filed with the SEC on Form SB-2
relating to the sale of an aggregate of 17,195,263 shares of the common stock of
the Company  by certain selling shareholders (the “Selling
Shareholders Registration Statement”) has been declared effective by the SEC
or
 (ii)           the
Selling Shareholder Registration Statement has been withdrawn by the
Company,
 
 the holder
may convert the Convertible Debenture, in whole but not in part, into the
Company’s common shares at the conversion rate of $0.15 per
Share.
 
 Subsequent
to any conversion, the holder  shall have the right, upon written
demand to Company (“Registration Demand”), to cause Company, within ninety days
of the Registration Demand, to prepare and file with the United States
securities and Exchange Commission (“SEC”) a Registration Statement in order
that the Conversion Shares may be registered under the Securities Act of 1933,
as amended, and use its reasonable best efforts to cause that Registration
Statement to be declared effective by the SEC. There is no penalty to the
Company in the event the registration Statement is not declared effective by the
SEC.
 
 On
November 30, 2007, the Company   sold $75,000 face value
convertible debenture (“Convertible Debenture”) for an aggregate purchase price
of $75,000 to one purchaser.
 
 Interest
on the Convertible Debenture shall accrue at a rate of 12% per annum based on a
365 day year. The Company shall pay simple interest to the holder on the
aggregate unconverted and then outstanding principal amount of this Convertible
Debenture at the rate of 12% per annum, payable on the maturity Date, which is
November 14, 2009.
 
 At any
time subsequent to the expiration of a six month period since either
of:
 
 (i)           that
Registration Statement, as amended,  filed with the SEC on Form SB-2
relating to the sale of an aggregate of 17,195,263 shares of  the
Company’s  common stock by certain selling shareholders (the “Selling
Shareholders Registration Statement”) has been declared effective by the SEC
or
 
 (ii)           the
Selling Shareholder Registration Statement has been withdrawn by the
Company.
 
 The holder
may convert the Convertible Debenture, in whole but not in part, into the
Company’s   common shares at the conversion rate of $0.15 per
Share (“Conversion Shares”).
 
 Subsequent
to any conversion, the holder  shall have the right, upon written
demand to the Company (“Registration Demand”), to cause the Company, within
ninety days of the Registration Demand, to prepare and file with the United
States securities and Exchange Commission (“SEC”) a Registration Statement in
order that the Conversion Shares may be registered under the Securities Act of
1933, as amended, and use its reasonable best efforts to cause that Registration
Statement to be declared effective by the SEC. There is no penalty to the
Company in the event the registration Statement is not declared effective by the
SEC.
 
 On January
8, 2008, the Company sold $18,400 face value convertible debenture (“Convertible
Debenture”) for an aggregate purchase price of $18,400 to one
purchaser.
 Interest
on the Convertible Debenture shall accrue at a rate of 12% per annum based on a
365 day year.  The Company   shall pay simple interest
to the holder on the aggregate unconverted and then outstanding principal amount
of this Convertible Debenture at the rate of 12% per annum, payable on the
maturity Date, which is December 28, 2009.
 
 At any
time subsequent to the expiration of a six month period since either
of:
 
 (i)           that
Registration Statement, as amended,  filed with the SEC on Form SB-2
relating to the sale of an aggregate of 17,195,263 shares of  our
common stock by certain selling shareholders (the “Selling Shareholders
Registration Statement”) has been declared effective by the SEC or
 
 (ii)           the
Selling Shareholder Registration Statement has been withdrawn by the
Company.
 
 The holder
may convert the Convertible Debenture, in whole but not in part, into our common
shares at the conversion rate of $0.15 per Share (“Conversion
Shares”).
 
 Subsequent
to any conversion, the holder shall have the right, upon written demand to the
Company (“Registration Demand”), to cause the Company, within ninety days of the
Registration Demand, to prepare and file with the United States securities and
Exchange Commission (“SEC”) a Registration Statement in order that the
Conversion Shares may be registered under the Securities Act of 1933, as
amended, and use its reasonable best efforts to cause that Registration
Statement to be declared effective by the SEC. There is no penalty to the
Company in the event the registration Statement is not declared effective by the
SEC.
 
 On January
18, 2008, the Company sold $200,000 face value convertible debenture
(“Convertible Debenture”) for an aggregate purchase price of $200,000 to one
purchaser.   Interest on the Convertible Debenture shall accrue
at a rate of 14% per annum based on a 365 day year.  The
Company   shall pay simple interest to the holder on the
aggregate unconverted and then outstanding principal amount of this Convertible
Debenture at the rate of 14% per annum, payable on the maturity Date, which is
January 12, 2010
 
 13
  At any
time subsequent to the expiration of a six month period since either
of:
 
 (i)           that
Registration Statement, as amended,  filed with the SEC on Form SB-2
relating to the sale of an aggregate of 17,195,263 shares of  our
common stock by certain selling shareholders (the “Selling Shareholders
Registration Statement”) has been declared effective by the SEC or
 
 (ii)           the
Selling Shareholder Registration Statement has been withdrawn by the
Company.
 
 The holder
may convert the Convertible Debenture, in whole but not in part, into our common
shares at the conversion rate of $0.25 per Share (“Conversion
Shares”).
 
 Subsequent
to any conversion, the holder shall have the right, upon written demand to the
Company (“Registration Demand”), to cause the Company, within ninety days of the
Registration Demand, to prepare and file with the United States securities and
Exchange Commission (“SEC”) a Registration Statement in order that the
Conversion Shares may be registered under the Securities Act of 1933, as
amended, and use its reasonable best efforts to cause that Registration
Statement to be declared effective by the SEC. There is no penalty to the
Company in the event the registration Statement is not declared effective by the
SEC.
  On
January18, 2008, the Company sold $100,000 face value convertible debenture
(“Convertible Debenture”) for an aggregate purchase price of $100,000 to one
purchaser.   Interest on the Convertible Debenture shall accrue
at a rate of 14% per annum based on a 365 day year.  The
Company   shall pay simple interest to the holder on the
aggregate unconverted and then outstanding principal amount of this Convertible
Debenture at the rate of 14% per annum, payable on the maturity Date, which is
January 12, 2010
 
 At any
time subsequent to the expiration of a six month period since either
of:
 
 (i)           that
Registration Statement, as amended,  filed with the SEC on Form SB-2
relating to the sale of an aggregate of 17,195,263 shares of  our
common stock by certain selling shareholders (the “Selling Shareholders
Registration Statement”) has been declared effective by the SEC or
 
 (ii)           the
Selling Shareholder Registration Statement has been withdrawn by the
Company.
 
 The holder
may convert the Convertible Debenture, in whole but not in part, into our common
shares at the conversion price of $0.25 per Share (“Conversion
Shares”).
 
 Subsequent
to any conversion, the holder shall have the right, upon written demand to the
Company (“Registration Demand”), to cause the Company, within ninety days of the
Registration Demand, to prepare and file with the United States securities and
Exchange Commission (“SEC”) a Registration Statement in order that the
Conversion Shares may be registered under the Securities Act of 1933, as
amended, and use its reasonable best efforts to cause that Registration
Statement to be declared effective by the SEC. There is no penalty to the
Company in the event the registration Statement is not declared effective by the
SEC.
 
 The
Company shall agree to the granting of a Lien to the Holder against collateral
which the Company owns or intends to purchase, namely:
 
 Flow
      Cytometer (4 Color) (BD Facscanto)Laboratory
      computer system/also for enrollments/storage trackingHematology
      Analyzer (celldyne 1800)(ABBOTT)Laminar
      Flow Hood 4 ft ( Clean hood) (2)Bench
      top centrifuges (2) refrigeratedSmall
      equipment (lab set-up)MicroscopeTube
      heat sealers (2 ea)Barcode
      printer and labeling device
 
 On
February 15, 2008, the Company sold $50,000 face value convertible debenture
(“Convertible Debenture”) for an aggregate purchase price of $50,000 to one
purchaser. Interest on the Convertible Debenture shall accrue at a rate of 12%
per annum based on a 365 day year.  The Company   shall
pay simple interest to the holder on the aggregate unconverted and then
outstanding principal amount of this Convertible Debenture at the rate of 12%
per annum, payable on the maturity Date, which is February 15,
2010.
 
 At any
time subsequent to the expiration of a six month period since either
of:
 
 (i)           that
Registration Statement, as amended,  filed with the SEC on Form SB-2
relating to the sale of an aggregate of 17,195,263 shares of  our
common stock by certain selling shareholders (the “Selling Shareholders
Registration Statement”) has been declared effective by the SEC or
 
 14
  (ii)           The
Selling Shareholder Registration Statement has been withdrawn by the
Company.
 
 The holder
may convert the Convertible Debenture, in whole but not in part, into our common
shares at the conversion price of $0.10 per Share (“Conversion
Shares”).
 
 Subsequent
to any conversion, the holder shall have the right, upon written demand to the
Company (“Registration Demand”), to cause the Company, within ninety days of the
Registration Demand, to prepare and file with the United States securities and
Exchange Commission (“SEC”) a Registration Statement in order that the
Conversion Shares may be registered under the Securities Act of 1933, as
amended, and use its reasonable best efforts to cause that Registration
Statement to be declared effective by the SEC. There is no penalty to the
Company in the event the registration Statement is not declared effective by the
SEC.
 
 On March
3, 2008 the Selling Shareholder’s Registration Statement was withdrawn by the
Company.
 
 On March
3, 2008, the Company sold $10,000 face value convertible debenture (“Convertible
Debenture”) for an aggregate purchase price of $10,000 to one
purchaser.   Interest on the Convertible Debenture shall accrue
at a rate of 12% per annum based on a 365 day year.  The
Company   shall pay simple interest to the holder on the
aggregate unconverted and then outstanding principal amount of this Convertible
Debenture at the rate of 12% per annum, payable on the maturity Date, which is
March 3, 2010.
 
 At any
time subsequent to the expiration of a six month period from March 3, 2008, the
holder may convert the Convertible Debenture, in whole but not in part, into our
common shares at the conversion rate of $0.15 per Share (“Conversion
Shares”).
 
 Subsequent
to any conversion, the holder shall have the right, upon written demand to the
Company (“Registration Demand”), to cause the Company, within ninety days of the
Registration Demand, to prepare and file with the United States securities and
Exchange Commission (“SEC”) a Registration Statement in order that the
Conversion Shares may be registered under the Securities Act of 1933, as
amended, and use its reasonable best efforts to cause that Registration
Statement to be declared effective by the SEC. There is no penalty to the
Company in the event the registration Statement is not declared effective by the
SEC.
 
  NOTE 9.
STOCK TRANSACTIONS
 
 Transactions,
other than employees' stock issuance, are in accordance with paragraph 8 of SFAS
123. Thus issuances shall be accounted for based on the fair value of the
consideration received. Transactions with employees' stock issuance are in
accordance with paragraphs (16-44) of SFAS 123. These issuances shall be
accounted for based on the fair value of the consideration received or the fair
value of the equity instruments issued, or whichever is more readily
determinable.
   
  Common
Stock
 
 On March
9, 2007 the Company issued 500,000 shares of common stock to Bio-Technology
Partners Business Trust which constituted full satisfaction of the amount of
$125,000 owed by the Company to Bio-Technology Partners Business
Trust.
 
 During the
quarter ended March 31, 2007 the Company issued 500,000 shares of common stock
for cash consideration of $125,000.
 
 On April
4, 2007, the Company issued 240,666 common shares for cash consideration of
$60,166.
 
 On April
4, 2007, the Company issued 27,589 Shares to two purchasers as consideration for
services rendered valued at $6,758.
 
 On April
4, 2007, the Company issued 5,000 common shares as consideration for services
rendered valued at $1,250.
 
 On April
4, 2007, the Company issued 40,000 common shares to management and employees as
compensation pursuant to the TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE
AND CONSULTANTS STOCK COMPENSATION PLAN.
 
 On April
4, 2007, 985, 168 shares of the Company’s common stock were issued to Bombardier
Pacific Ventures in full satisfaction of $246,292 owed by the Company to
Bombardier Pacific Ventures. David R. Koos, the Company’s Chairman of the Board
of Directors, President, CEO, Secretary, and Acting CFO, is the sole beneficial
owner of Bombardier Pacific Ventures
 
 On
April18, 2007, the Company issued 5,000 common shares to an employee as
compensation pursuant to the TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE
AND CONSULTANTS STOCK COMPENSATION PLAN.
 
 On April
18, 2007, the Company issued 5,000 common shares pursuant to the TASCO HOLDINGS
INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN as
consideration for services rendered valued at $3,750
 
 On May 22,
2007, the Company issued 15,000 common shares pursuant to the TASCO HOLDINGS
INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN as
consideration for services rendered valued at $9,300.
 
 On May 22,
2007 the Company issued 65,000 common shares to management pursuant to the
BIO-MATRIX SCIENTIFIC GROUP, INC. 2007 EMPLOYEE AND CONSULTANTS STOCK
COMPENSATION PLAN
  15
  On June 7,
2007, the Company issued 32,040 common shares pursuant to the BIO-MATRIX
SCIENTIFIC GROUP, INC. 2007 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN as
consideration for services rendered valued at $20,185.
 
 On June 7,
2007, the Company issued 5,000 common shares to an employee as compensation
pursuant to the TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS
STOCK COMPENSATION PLAN.
  On June
21, 2007, 331,597 shares of the Company’s common stock were issued to Venture
Bridge Advisors in full satisfaction of $82,900 owed by the Company to Venture
Bridge Advisors.
 
 On June
28, 2007 the Company issued 321,500 common shares pursuant to the BIO-MATRIX
SCIENTIFIC GROUP, INC. 2007 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN as
consideration for services rendered valued at $176,825.
 
 On June
28, 2007 the Company issued 35,000 common shares to management pursuant to the
BIO-MATRIX SCIENTIFIC GROUP, INC. 2007 EMPLOYEE AND CONSULTANTS STOCK
COMPENSATION PLAN
 
 On July
12, 2007, the Company issued 23,000 common shares to consultants pursuant to the
BIO-MATRIX SCIENTIFIC GROUP, INC. 2007 EMPLOYEE AND CONSULTANTS STOCK
COMPENSATION PLAN as consideration for services rendered.
 
 On July
30, 2007, the Company issued 500,000 common shares to consultants pursuant to
the BIO-MATRIX SCIENTIFIC GROUP, INC. 2007 EMPLOYEE AND CONSULTANTS STOCK
COMPENSATION PLAN as consideration for services rendered
 
 On July
30, 2007, the Company issued 155,000 common shares to management pursuant
to the BIO-MATRIX SCIENTIFIC GROUP, INC. 2007 EMPLOYEE AND CONSULTANTS STOCK
COMPENSATION PLAN
 
 On July
30, 2007, the Company issued 566,217 common shares to Bombardier Pacific
Ventures in satisfaction of the principal amount of $141,554 owed
by the Company to Bombardier Pacific Ventures. David R. Koos, the Company’s
Chairman of the Board of Directors, President, CEO, Secretary, and Acting CFO,
is the sole beneficial owner of Bombardier Pacific Ventures.
 
 On July
31, 2007, the Company issued 760,000 common shares for cash consideration of
$190,000.
 
 On August
6, 2007, the Company issued 620,000 common shares to consultants as
consideration for services rendered.
 
 On August
6, 2007, the Company issued 440,000 common shares for cash consideration of
$110,000
 
 On
September 10, 2007, the Company issued 55,000 common shares to consultants
pursuant to the BIO-MATRIX SCIENTIFIC GROUP, INC. 2007 EMPLOYEE AND CONSULTANTS
STOCK COMPENSATION PLAN as consideration for services rendered
 
 On October
2, 2007, the Company issued 21,429 common shares to consultants pursuant to the
BIO-MATRIX SCIENTIFIC GROUP, INC. 2007 EMPLOYEE AND CONSULTANTS STOCK
COMPENSATION PLAN as consideration for services rendered
 
 On October
4, 2007, the Company issued 28,572 common shares to consultants pursuant to the
BIO-MATRIX SCIENTIFIC GROUP, INC. 2007 EMPLOYEE AND CONSULTANTS STOCK
COMPENSATION PLAN as consideration for services rendered
 
 On October
29, 2007, the Company issued 20,000 common shares to consultants pursuant to the
BIO-MATRIX SCIENTIFIC GROUP, INC. 2007 EMPLOYEE AND CONSULTANTS STOCK
COMPENSATION PLAN as consideration for services rendered.
 
 On
November 7, 2007, the Company issued 28,750 common shares to consultants
pursuant to the BIO-MATRIX SCIENTIFIC GROUP, INC. 2007 EMPLOYEE AND CONSULTANTS
STOCK COMPENSATION PLAN as consideration for services rendered.
  On
November 26, 2007, the Company issued 48,510 common shares to consultants
pursuant to the BIO-MATRIX SCIENTIFIC GROUP, INC. 2007 EMPLOYEE AND CONSULTANTS
STOCK COMPENSATION PLAN as consideration for services rendered.
 
 On
December 6, 2007, the Company issued 25,000 common shares to consultants
pursuant to the BIO-MATRIX SCIENTIFIC GROUP, INC. 2007 EMPLOYEE AND CONSULTANTS
STOCK COMPENSATION PLAN as consideration for services rendered.
 
 On
December 17, 2007, the Company issued 19,166 common shares to a consultant
pursuant to the BIO-MATRIX SCIENTIFIC GROUP, INC. 2007 EMPLOYEE AND CONSULTANTS
STOCK COMPENSATION PLAN as consideration for services rendered.
 
 On January
8, 2008 the Company issued 110, 213 common shares to consultants pursuant to the
BIO-MATRIX SCIENTIFIC GROUP, INC. 2007 EMPLOYEE AND CONSULTANTS STOCK
COMPENSATION PLAN as consideration for services rendered.
 
 On January
8, 2008 the Company issued 24,587 common shares to consultants pursuant to
the TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS STOCK
as consideration for services rendered.
 
 On
February 22, 2008 the Company issued 11,905 common shares to a consultant
pursuant to the TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS
STOCK as consideration for services rendered.
 
 On April
9, 2008 the Company issued 10,000 shares of common stock to a consultant for
services rendered valued at $5000.
  16
  On April
30, 2008 the Company issued 22,000 shares of common stock to consultants for
services rendered valued at $11,000.
 
 On May 12,
2008 the Company issued 200,000 shares of common stock to a consultant for
services rendered valued at $100,000.
 
 On June
18, 2008 the Company issued 31,245 shares of common stock holders of the
Company’s Convertible Debentures in satisfaction of $17,296 of accrued
interest.
 
 Preferred
Stock
 
 During the
quarter ended March 31, 2008 the Company sold 575,000 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 $0.30 per
share, for the purchase price of   $0.20 per Unit for aggregate
consideration of $115,000.
 
 During the
quarter ended March 31, 2008 the Company issued 340,000 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 $0.30
per share, for consideration consisting of services rendered valued at
$68,000.
 
 On April
9, 2008, the Company issued 225,000 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 $0.30 per share, for
consideration consisting of $45,000.
 
 On April
9, 2008, the Company issued 108,373 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 $0.30 per share, for
consideration consisting of $32,511.
 
 On May 20,
2008, the Company issued 142,857 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 $0.45 per share, for
consideration consisting of $50,000.
 
 On May 20,
2008, the Company issued 800,000 shares of the Company’s Preferred Stock for
consideration consisting of services amounting to $280,000.
 
 On May 20,
2008, the Company issued 390, 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 $0.30 per share, for
consideration consisting of services amounting to $136,500.
 
 On May 28,
2008, the Company issued 200, 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 $0.35 per share, for
consideration consisting of $60,000.
 
 Between
May 28 and May 30, 2008, 475,000 shares of the Company’s Preferred Stock was
issued at $0.30 per Preferred Share pursuant to the exercise of issued
warrants.
 
 On May 27,
2008, the Company issued 71,429 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 $0.45 per share, for
consideration consisting of $25,000.
 
 On May 29,
2008, the Company issued 175,125 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 $0.35 per share, for
consideration consisting of services amounting to $61,294.
 
 On May 30,
2008, the Company issued 71,429 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 $0.45 per share, for
consideration consisting of $25,000.
 
 On May 30,
2008, the Company issued 10,000 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 $0.45 per share, for
consideration consisting of services amounting to $3,500.
 
 17
  On June 2,
2008, the Company issued 15,000 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 $0.30 per share, for
consideration consisting of $5,250.
 
 On June 3,
2008, the Company issued 103,334 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 $0.35 per share, for
consideration consisting of $31,000.
 
 On June 3,
2008, the Company issued 30,000 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 $0.30 per share, for
consideration consisting of $10,500.
 
 On June
10, 2008, 952,200 Preferred Shares were paid out as a dividend to common
shareholders of record as of May 28, 2008.
 
 On June
11, 2008, the Company issued 71,429 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 $0.30 per share, for
consideration consisting of $25,000.
 
 On June
11, 2008, the Company issued 47,034 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 $0.35 per share, for
consideration consisting of $14,110.
 
 On June
11, 2008, the Company issued 30,000 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 $0.30 per share, for
consideration consisting of $10,500.
 
 On June
11, 2008, the Company issued 28,600 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 $0.30 per share, for
consideration consisting of $10,010.
 
 On June
11, 2008, the Company issued 28,600 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 $0.45 per share, for
consideration consisting of $10,010.
 
 On June
12, 2008, the Company issued 30,000 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 $0.30 per share, for
consideration consisting of $10,500.
 
 On June
13, 2008, the Company issued 285,715 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 $0.30 per share, for
consideration consisting of $100,000.
 
 On June
13, 2008, the Company issued 28,600 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 $0.45 per share, for
consideration consisting of $10,010.
 
 On June
16, 2008, the Company issued 45,000 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 $0.30 per share, for
consideration consisting of $15,750.
 
 On June
18, 2008, the Company issued 27,450 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 $0.35 per share, for
consideration consisting of $8,235.
  18
  On June
18, 2008 the Company issued 46, 600 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 $0.45 per share, for
consideration consisting of services amounting to $16,310.
 
 
 On June
18, 2008, the Company issued 90,000 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 $0.30 per share, for
consideration consisting of $31,500.
 
 
 
 NOTE 10.
DIVIDEND OF PREFERRED SHARES TO COMMON AND PREFERRED SHAREHOLDERS
 
 On May,
12, 2008 the Board of Directors of Bio-Matrix Scientific Group, Inc. (“Company”)
authorized
 
 (a)    a
dividend to Common shareholders of record as of May 28, 2008 (“Record Date”) to
be paid to Common shareholders on or about June 10, 2008, such dividend to be
payable in shares of the company’s authorized but unissued preferred stock .0001
par value and to consist of one share of preferred stock for every twenty five
shares of Bio-Matrix Scientific Group, Inc. Common Stock owned as of the Record
Date. The Preferred Share dividends will only be issued in the name of the
beneficial owner of the Bio-Matrix Scientific Group Common Stock and no dividend
shares will be issued in the name of a broker dealer to disseminate to its
clients. Broker Dealers holding Common shares on behalf of clients shall be
required to produce lists of Common shareholders designated by such
Broker-Dealers as beneficial owners of the Company’s Common stock as of the
Record Date. Any lists provided by Broker Dealers must reconcile with records on
file with the Depository Trust and Clearance Corporation before the dividend may
be paid by the Company
 
 (b)    a
dividend to Preferred shareholders of record as of May 28, 2008 (“Record Date”)
to be paid to Preferred shareholders on or about June 10, 2008, such dividend to
be payable in shares of the company’s authorized but unissued preferred stock
..0001 par value and to consist of one share of preferred stock for every twenty
five shares of Bio-Matrix Scientific Group, Inc. Preferred Stock owned as of the
Record Date. The Preferred Share dividends will only be issued in the name of
the beneficial owner of the Bio-Matrix Scientific Group Preferred Stock and no
dividend shares will be issued in the name of a broker dealer to disseminate to
its clients. The Preferred Share dividends will only be issued in the name of
the beneficial owner of the Bio-Matrix Scientific Group Preferred Stock and no
dividend shares will be issued in the name of a broker dealer to disseminate to
its clients. Broker Dealers holding Preferred shares on behalf of clients shall
be required to produce lists of Preferred shareholders designated by such
Broker-Dealers as beneficial owners of the Company’s Preferred stock as of the
Record Date. Any lists provided by Broker Dealers must reconcile with records on
file with the Depository Trust and Clearance Corporation before the dividend may
be paid by the Company. To the knowledge of the Company, currently no Preferred
Shares are being held by Broker Dealers on behalf of clients.
 On
June 10, 2008, 952,200 Preferred Shares were paid out to common shareholders of
record as of the Record Date. The Company anticipates paying out the remainder
122,726 shares of the dividend due shortly.
 
 
 
 NOTE 11.
STOCKHOLDERS' EQUITY
 
 The
stockholders' equity section of the Company contains the following classes of
capital stock as of June 30, 2008:
 
 *
Preferred stock, $ 0.0001 par value; 20,000,000 shares authorized: 5,566,662
shares issued and outstanding.
 
 * Common
stock, $ 0.0001 par value; 80,000,000 shares authorized: 23,830,773 shares
issued and outstanding.
 
 NOTE 12.
COMMITMENTS AND CONTINGENCIES
 
 On August
3, 2005, BMSG entered into an agreement to lease a 14,562 square foot facility
for use as a cellular storage facility at a rate of $18,931 per month. The lease
is for a period of five years commencing on December 1, 2005 and expiring on
November 30, 2010. The lease contains a renewal option enabling the Company to
renew the lease for an additional five years. There are no contingent payments
which the Company is required to make.
 
 Lease
Commitments
 Ending
      September 30
              
              Amounts2008
              
              $
              241,6112009
              
              
              248,8642010
              
              
              234,3772011
              
              
              42,614Total
              
              $
              767,466
 
 Since the
signing of this lease, BMSG has been improving this facility and has made
substantial progress toward creating a cGMP (Good Manufacturing Practices) and
cGTP (Good Tissue Practices) compliant facility specifically designed for the
cryogenic storage of stem cells, medical device engineering, stem cell research
and stem cell specimen processing laboratories.
 Concurrently,
the Company has been developing the policies and procedures needed for
processing stem cells for cryogenic storage.
 
 NOTE 13.
ACQUISITION OF BIO-MATRIX SCIENTIFIC GROUP (NEVADA).
 
 On June
14, 2006, the Company and Bio-Matrix Scientific Group, Inc., a Delaware
corporation (the “Seller”) entered into a Stock Purchase Agreement (the
“Acquisition Agreement”).
 
 19
  Under the
terms of the Acquisition Agreement and pursuant to a separate Escrow Agreement
between the Company and the Seller, The Company delivered to the Escrow Agent
the sum of 10,000,000 shares of the Company's common stock and other corporate
and financial records and the Seller delivered to the Escrow Agent 25,000 shares
of the common stock of BSMG., a Nevada corporation (the “Subsidiary”). As a part
of the transaction and pursuant to the terms of the Acquisition Agreement and
Stock Cancellation Agreement between the parties and John Lauring, the Company's
former Chairman and Chief Executive Officer, John Lauring returned 10,000,000
shares of the Company held and owned by him for cancellation.
 
 On June
14, 2006, the Company's officers and directors resigned their positions and
elected Dr. David R. Koos and Mr. Brian Pockett as in-coming Directors of the
Registrant. Following their election and the reconstruction of the Board of
Directors, the Registrant's Board of Directors elected Dr. David R. Koos as
Chief Executive Officer and President and Mr. Brian Pockett as Chief Operating
Officer and Vice President on June 19, 2006.
 
 On July 3,
2006, the Acquisition Agreement closed and Company acquired the twenty-five
thousand (25,000) shares of the Common Stock of the Subsidiary from the Seller
in exchange for the payment of the purchase price of 10,000,000 shares of the
common stock of the Company and the 10,000,000 shares of the Company owned and
held by John Lauring were returned to the Company for cancellation. At that
time, the Escrow Agent released all stock certificates and certain other
corporate and financial books and records held pursuant to the Escrow
Agreement.
 
 As a
result of the Acquisition Agreement, the Subsidiary became a wholly owned
subsidiary of the Company and the Seller became the holder of approximately
78.24% of the outstanding common stock of the Registrant. For financial
accounting purposes, this acquisition was a reverse acquisition of the Company
by Bio-Matrix Scientific Group, Inc under the purchase method of accounting, and
was treated as a recapitalization with Bio-Matrix Scientific Group, Inc. as the
acquirer.
 
   NOTE 14.
TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS STOCK
COMPENSATION PLAN
 
 On July
25, 2006 the Company adopted the TASCO HOLDINGS INTERNATIONAL, INC. 2006
EMPLOYEE AND CONSULTANTS STOCK COMPENSATIONPLAN (“the Plan”) which provides for
the issuance of up to 1,500,000 authorized but unissued shares of Common Stock
to eligible employees and consultants for services rendered (“Award Shares” or
“Awards”). These Award Shares were registered with the Securities and Exchange
Commission (“Commission”) on Form S-8 filed with the Commission on August 8,
2006. This Plan shall terminate on July 15, 2016.
 Award
Shares may be issued to Eligible Persons (The term "Eligible Person" means any
natural person who, at a particular time, is an employee, officer, director,
consultant, or advisor of the Company or any Parent or Subsidiary of the
Company; provided that, in the case of consultants or advisors such services are
not in connection with the offer and sale of securities in a capital-raising
transaction and /or such services are not intended to directly or indirectly
promote or maintain a market for the Company 's securities) in any of the
following instances:
 (i) as a
bonus for services previously rendered and compensated, in which case the
recipient of the Award Shares shall not be required to pay any consideration for
such Award Shares, and the value of such Award Shares shall be the Fair Market
Value of such Award Shares on the date of grant; or
 
 (ii) as
compensation for the previous performance or future performance of services or
attainment of goals, in which case the recipient of the Award Shares shall not
be required to pay any consideration for such Award Shares (other than the prior
performance of his services or the assumption of the obligation of future
performance of services ).
 
 The Plan
is currently administered by the Plan Committee, which currently consists of the
entire Board of Directors of the Company, and which has sole and absolute
discretion to interpret and determine the effect of all matters and questions
relating to this Plan.
 
 The Plan
Committee has the full and final authority in its sole discretion, at any time
and from time-to-time, subject only to the express terms, conditions and other
provisions of the Articles of Incorporation of the Company and this Plan, and
the specific limitations on such discretion set forth herein, to:
 
 (i)
Designate the Eligible Persons or classes of Eligible Persons eligible to
receive Awards from among the Eligible Persons;
 
 (ii) Grant
Awards to such selected Eligible Persons or classes of Eligible Persons in such
form and amount (subject to the terms of the Plan) as the Plan Committee shall
determine;
 
 (iii)
Interpret the Plan, adopt, amend and rescind rules and regulations relating to
the Plan, and make all other determinations and take all other action necessary
or advisable for the implementation and administration of the Plan;
and
 
 (iv)
Delegate all or a portion of its authority to one or more directors of the
Company who are executive officers of the Company, subject to such restrictions
and limitations (such as the aggregate number of shares of Common Stock that may
be awarded) as the Plan Committee may decide to impose on such delegate
directors.
 
 As of June
30, 2008 -- 1,494,342 shares have been issued pursuant to the
Plan
  20
  Number
      ofSharesAs
      of June 30, 2008Granted
              
              
              1,494,342
              *Remaining
      shares available for issuance under the Plan as of June 30,
      2008.
              
              
              5,658
  *Does not
include 300,000 shares which were issued erroneously and subsequently
cancelled
 
 NOTE 15.
BIO-MATRIX SCIENTIFIC GROUP, INC. 2007 EMPLOYEE AND CONSULTANTS STOCK
COMPENSATION PLAN
 
 On  June
3, 2007 the Company adopted the BIO-MATRIX SCIENTIFIC GROUP, INC. 2007
EMPLOYEE  AND CONSULTANTS STOCK COMPENSATION PLAN (“the  Bio
Plan”) which provides for the issuance of up to 1,500,000 authorized but
unissued shares of Common Stock to eligible employees and consultants for
services rendered (“Award Shares” or “Awards”). These Award Shares were
registered with the Securities and Exchange Commission (“Commission”) on Form
S-8 filed with the Commission on June 5, 2007. This Bio Plan shall terminate on
June 3, 2017.
 
 Award
Shares may be issued to Eligible Persons (The term "Eligible Person" means any
natural person who, at a particular time, is an employee, officer, director,
consultant, or advisor of the Company or any Parent or Subsidiary of the
Company; provided that, in the case of consultants or advisors such services are
not in connection with the offer and sale of securities in a capital-raising
transaction and /or such services are not intended to directly or indirectly
promote or maintain a market for the Company ’s securities) in any of the
following instances:
 
 (i) as a
bonus for services previously rendered and compensated, in which case the
recipient of the Award Shares shall not be required to pay any consideration for
such Award Shares, and the value of such Award Shares shall be the Fair Market
Value of such Award Shares on the date of grant; or
 
 (ii) as
compensation for the previous performance or future performance of services or
attainment of goals, in which case the recipient of the Award Shares shall not
be required to pay any consideration for such Award Shares (other than the prior
performance of his services or the assumption of the obligation of future
performance of services ).
 
 The Bio
Plan is currently administered by a Plan Committee, which currently consists of
the entire Board of Directors of the Company, and which has sole and absolute
discretion to interpret and determine the effect of all matters and questions
relating to this Bio Plan.
 
 The Plan
Committee has the full and final authority in its sole discretion, at any time
and from time-to-time, subject only to the express terms, conditions and other
provisions of the Articles of Incorporation of the Company and this Bio Plan,
and the specific limitations on such discretion set forth herein,
to:
 
 (i)
Designate the Eligible Persons or classes of Eligible Persons eligible to
receive Awards from among the Eligible Persons;
 
 (ii) Grant
Awards to such selected Eligible Persons or classes of Eligible Persons in such
form and amount (subject to the terms of the Plan) as the Plan Committee shall
determine;
 
 (iii)
Interpret the Plan, adopt, amend and rescind rules and regulations relating to
the Plan, and make all other determinations and take all other action necessary
or advisable for the implementation and administration of the Plan;
and
  (iv)
Delegate all or a portion of its authority to one or more directors of the
Company who are executive officers of the Company, subject to such restrictions
and limitations (such as the aggregate number of shares of Common Stock that may
be awarded) as the Plan Committee may decide to impose on such delegate
directors.
  As of June
30, 2008, 1,500,000 shares have been issued pursuant to the Plan
 Number
      ofSharesAs
      of June 30, 2008:Granted
              
              
              1.500,000Remaining
      shares available for issuance under the Plan as of June 30,
      2008
              
              
              0
  NOTE
16.  PREFERRED STOCK OFFERINGS
 
 
 During the
quarter ended March 31, 2008 the Company sold 575,000 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 $0.30 per
share, for the purchase price of   $0.20 per Unit for aggregate
consideration of $115,000.
 
 As an
additional incentive  to purchase the Units and not as a
characteristic, right or designation  of the Preferred Stock, the
Company entered into agreements with each purchaser of the Units whereby the
Company has agreed to exchange, at any time subsequent to September 3, 2008
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.
 
 21
  During the
quarter ended March 31, 2008 the Company issued 340,000 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 $0.30
per share, for consideration consisting of services rendered amounting to
$68,000.
 
 The
Company has also entered into agreements with each of the abovementioned
recipients of Units whereby the Company has agreed to exchange, at any time
subsequent to September 3, 2008 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 above mentioned agreements constitute
agreements solely between the Company and the other parties and do not represent
any intrinsic characteristic, right or designation of the Preferred
Stock,
 
 On April
9, 2008, the Company issued 225,000 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 $0.30 per share, for
consideration consisting of $45,000.
 
 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 September 3, 2008
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 April
9, 2008, the Company issued 108,373 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 $0.30 per share, for
consideration consisting of $32,511.
 
 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 September 3, 2008
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 May 20,
2008, the Company issued 142,857 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 $0.45 per share, for
consideration consisting of $50,000.
 
 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 September 3, 2008
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 May 20,
2008, the Company issued 800,000 shares of the Company’s Preferred Stock for
consideration consisting of services valued at $280,000.
 
 As an
additional incentive to purchase the securities 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
September 3, 2008 at the demand of the purchaser, 800,000 Preferred shares owned
by that purchaser into an equivalent number of shares of the company’s common
stock.
 
 On May 20,
2008, the Company issued 390, 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 $0.30 per share, for
consideration consisting of services valued at $136,500.
 
 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 September 3, 2008
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 May 28,
2008, the Company issued 200, 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 $0.35 per share, for
consideration consisting of $60,000.
 
 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 September 3, 2008
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.
 
 Between
May 28 and May 30, 2008, 475,000 shares of the Company’s Preferred Stock was
issued at $0.30 per Preferred Share pursuant to the exercise of issued
warrants.
 
 On May 27,
2008, the Company issued 71,429 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 $0.45 per share, for
consideration consisting of $25,000.
 
 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 September 3, 2008
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.
  22
 
 On May 29,
2008, the Company issued 175,125 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 $0.35 per share, for
consideration consisting of services valued at $61,294.
 
 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 September 3, 2008
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 May 30,
2008, the Company issued 71,429 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 $0.45 per share, for
consideration consisting of $25,000.
 
 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 September 3, 2008
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 May 30,
2008, the Company issued 10,000 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 $0.45 per share, for
consideration consisting of services valued at $3,500.
 
 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 September 3, 2008
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 June 2,
2008, the Company issued 15,000 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 $0.30 per share, for
consideration consisting of $5,250.
 
 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 September 3, 2008
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 June 3,
2008, the Company issued 103,334 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 $0.35 per share, for
consideration consisting of $31,000.
  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 September 3, 2008
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.
 
 23
  On June 3,
2008, the Company issued 30,000 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 $0.30 per share, for
consideration consisting of $10,500.
  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 September 3, 2008
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 June
11, 2008, the Company issued 71,429 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 $0.30 per share, for
consideration consisting of $25,000.
 
 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 September 3, 2008
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 June
11, 2008, the Company issued 47,034 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 $0.35 per share, for
consideration consisting of $14,110.
 
 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 September 3, 2008
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 June
11, 2008, the Company issued 30,000 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 $0.30 per share, for
consideration consisting of $10,500.
 
 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 September 3, 2008
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 June
11, 2008, the Company issued 28,600 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 $0.30 per share, for
consideration consisting of $10,010.
 
 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 September 3, 2008
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 June
11, 2008, the Company issued 28,600 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 $0.45 per share, for
consideration consisting of $10,010.
 
 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 September 3, 2008
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 June
12, 2008, the Company issued 30,000 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 $0.30 per share, for
consideration consisting of $10,500.
 
 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 September 3, 2008
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 June
13, 2008, the Company issued 285,715 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 $0.30 per share, for
consideration consisting of $100,000.
 
 24
  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 September 3, 2008
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 June
13, 2008, the Company issued 28,600 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 $0.45 per share, for
consideration consisting of $10,010.
  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 September 3, 2008
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 June
16, 2008, the Company issued 45,000 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 $0.30 per share, for
consideration consisting of $15,750.
 
 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 September 3, 2008
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 June
18, 2008, the Company issued 27,450 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 $0.35 per share, for
consideration consisting of $8,235.
 
 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 September 3, 2008
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 June
18, 2008 the Company issued 46, 600 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 $0.45 per share, for
consideration consisting of services valued at $16,310.
 
 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 September 3, 2008
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 June
18, 2008, the Company issued 90,000 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 $0.30 per share, for
consideration consisting of $31,500.
 
 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 September 3, 2008
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.
 
 
 
 
 NOTE
17.  SUBSEQUENT EVENTS
 
 On July 1,
2008 the Certificate of Incorporation of the Company was amended to permit the
following actions:
 
 A. To
grant the full authority permitted by law to the Board of
Directors  of the Company to issue, from time to time, multiple series
of Preferred Stock and the number of shares constituting each such series and to
fix by resolution full or limited, multiple or fractional, or no voting rights,
and such designations, preferences, qualifications, privileges, limitations,
restrictions, options, conversion rights and other special or relative rights of
any series of the Preferred Stock that may be desired. And, subject to the
limitation on the total number of shares of Preferred Stock which the
Corporation has authority to issue, the Board of Directors is also authorized to
increase or decrease the number of shares of any series, subsequent to the issue
of that series, but not below the number of shares of such series then
outstanding.
  25
  B. To
grant the full authority permitted by law to the Board of Directors of the
Company to issue, from time to time, multiple series of Common Stock and the
number of shares constituting each such series and to fix by resolution full or
limited, multiple or fractional, or no voting rights, and such designations,
preferences, qualifications, privileges, limitations, restrictions, options,
conversion rights and other special or relative rights of any series of the
Common Stock that may be desired. And, subject to the limitation on the total
number of shares of  Common Stock which the Corporation has authority
to issue, the Board of Directors is also authorized to increase or decrease the
number of shares of any series, subsequent to the issue of that series, but not
below the number of shares of such series then outstanding.
 
 On July 2,
2008   the Company filed a CERTIFICATE OF DESIGNATION OF
PREFERENCES, RIGHTS AND LIMITATIONS OF SERIES AA PREFERRED STOCK (“Certificate
of Designations”) with the Delaware Secretary of State setting forth the
preferences rights and limitations of a newly authorized series of preferred
stock designated and known as “Series AA Preferred Stock” (hereinafter referred
to as “Series AA Preferred Stock”).
 
 The Board
of Directors of the Company has authorized 100,000 shares of the Series AA
Preferred Stock. With respect to each matter submitted to a vote of stockholders
of the Corporation, each holder of Series AA Preferred Stock shall be entitled
to cast that number of votes which is equivalent to the number of shares of
Series AA Preferred Stock owned by such holder times ten thousand (10,0000).
Except as otherwise required by law, holders of Common Stock, other series of
Preferred issued by the Corporation,  and Series AA Preferred Stock
shall vote as a single class on all matters submitted to the
stockholders.
 
 On July 3,
2008, the Company issued 4,852 shares of Series AA Preferred Stock (“AA Stock”)
to David R. Koos, the Company’s Chairman, President and CEO pursuant to the
following terms and conditions:
 
 A)        In
the event that Koos voluntarily resigns as either President or CEO of the
Company prior to July 3, 2018 the AA Stock shall be returned to the
Company.
 
 B)        In
the event of the death of Koos prior to July 3, 2018 the AA Stock shall be
returned to the Company.
 
 C)        Upon
the expiration of a continuous period of two hundred forty (240) calendar days
during which Koos is unable to perform his material duties as President or CEO
due to physical or mental incapacity the AA Stock shall be returned to the
Company.
 
 D)        Upon
Koos’ conviction in a court of competent jurisdiction for a felony or any crime
involving fraud or misrepresentation the AA Stock shall be returned to the
Company.
 
 The AA
Stock issued to Koos are the only shares of Series AA Preferred Stock
outstanding as of July 15, 2008.
 
 On July
14, 2008 the Company issued 11,667 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 $0.35 per share, for
consideration consisting of $3,500.
 
 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.
 
 
 
 
 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 10QSB may contain forward-looking
statements within the meaning of Section 21E or Securities Exchange Act of 1934
that are not historical facts and information. These statements represent the
Company's expectations or beliefs, including, but not limited to, statements
concerning future and operating results, statements concerning industry
performance, the Company's operations, economic performance, financial
conditions, margins and growth in sales of the Company's products, capital
expenditures, financing needs, as well assumptions related to the forgoing. For
this purpose, any statements contained in this Quarterly Report that are not
statement of historical fact may be deemed to be forward-looking statements.
These forward-looking statements are based on current expectations and involve
various risks and uncertainties that could cause actual results and outcomes for
future periods to differ materially from any forward-looking statement or views
expressed herein. The Company's financial performance and the forward-looking
statements contained herein are further qualified by other risks including those
set forth from time to time in the documents filed by the Company with the
Securities and Exchange Commission, including the Company's most recent Form
10KSB for the year ended September 30, 2007. All references to” We”,
“Us”,  “Company” or the “Company” refer to Bio-Matrix Scientific
Group, Inc.
  26
 CONDITION
AND RESULTS OF OPERATIONS THREE MONTHS ENDED JUNE 30, 2008 AND THE NINE MONTHS
ENDED JUNE 30, 2008.
 
 Revenues
were -0- for the quarter ending June 30, 2008 and -0- for the same quarter
ending June 30, 2007. Net losses were $ 1,063,446 for the three months ended
June 30, 2008 and $718,995 for the same period ended June 30, 2007.
Revenues were -0- for the nine months ending June 30, 2008 and -0- for the nine
months ending June 30, 2007. Net losses were $1,886,583 for the nine months
ended June 30, 2008 and $ 1,700,759 for the same period ended June 30,
2007.
 
 
 PLAN
OF OPERATION
 
  As
of  June 30, 2008 the Company has $220,882   cash on
hand and current liabilities of $302,530  such liabilities consisting
of Accounts Payable, Notes Payable,, Accrued Payroll Taxes, Accrued Interest and
other Accrued Expenses.
  The
Company feels it will not be able to satisfy its cash requirements over the next
twelve months and shall be required to seek additional financing.
 
 At this
time, the Company plans to fund its financial needs through operating revenues
(which cannot be assured) and, if required, through equity private placements of
common stock. (No plans, terms, offers or candidates have yet been established
and there can be no assurance that the company will be able to raise funds on
terms favorable to the Company or at all.)
 
 During the
quarter ended March 31, 2008 the Company sold 575,000 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 $0.30 per
share, for the purchase price of   $0.20 per Unit for aggregate
consideration of $115,000.
 
 As an
additional incentive  to purchase the Units and not as a
characteristic, right or designation  of the Preferred Stock, the
Company entered into agreements with each purchaser of the Units whereby the
Company has agreed to exchange, at any time subsequent to September 3, 2008
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.
 
 During the
quarter ended March 31, 2008 the Company issued 340,000 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 $0.30
per share, for consideration consisting of services rendered amounting to
$68,000.
 
 The
Company has also entered into agreements with each of the abovementioned
recipients of Units whereby the Company has agreed to exchange, at any time
subsequent to September 3, 2008 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 above mentioned agreements constitute
agreements solely between the Company and the other parties and do not represent
any intrinsic characteristic, right or designation of the Preferred
Stock,
 
 On April
9, 2008, the Company issued 225,000 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 $0.30 per share, for
consideration consisting of $45,000.
 
 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 September 3, 2008
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 April
9, 2008, the Company issued 108,373 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 $0.30 per share, for
consideration consisting of $32,511.
 
 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 September 3, 2008
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 May 20,
2008, the Company issued 142,857 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 $0.45 per share, for
consideration consisting of $50,000.
 
 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 September 3, 2008
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 May 20,
2008, the Company issued 800,000 shares of the Company’s Preferred Stock for
consideration consisting of services amounting to $280,000.
 
 As an
additional incentive to purchase the securities 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
September 3, 2008 at the demand of the purchaser, 800,000 Preferred shares owned
by that purchaser into an equivalent number of shares of the company’s common
stock.
 
 On May 20,
2008, the Company issued 390, 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 $0.30 per share, for
consideration consisting of services amounting to $136,500.
  27
 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 September 3, 2008
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 May 28,
2008, the Company issued 200, 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 $0.35 per share, for
consideration consisting of $60,000.
 
 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 September 3, 2008
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.
 
 Between
May 28 and May 30, 2008, 475,000 shares of the Company’s Preferred Stock was
issued at $0.30 per Preferred Share pursuant to the exercise of issued
warrants.
 
 On May 27,
2008, the Company issued 71,429 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 $0.45 per share, for
consideration consisting of $25,000.
 
 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 September 3, 2008
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 May 29,
2008, the Company issued 175,125 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 $0.35 per share, for
consideration consisting of services amounting to $61,294.
 
 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 September 3, 2008
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 May 30,
2008, the Company issued 71,429 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 $0.45 per share, for
consideration consisting of $25,000.
 
 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 September 3, 2008
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.
 
 28
 
 On May 30,
2008, the Company issued 10,000 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 $0.45 per share, for
consideration consisting of services amounting to $3,500.
 
 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 September 3, 2008
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 June 2,
2008, the Company issued 15,000 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 $0.30 per share, for
consideration consisting of $5,250.
 
 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 September 3, 2008
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 June 3,
2008, the Company issued 103,334 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 $0.35 per share, for
consideration consisting of $31,000.
 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 September 3, 2008
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 June 3,
2008, the Company issued 30,000 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 $0.30 per share, for
consideration consisting of $10,500.
 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 September 3, 2008
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 June
11, 2008, the Company issued 71,429 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 $0.30 per share, for
consideration consisting of $25,000.
 
 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 September 3, 2008
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 June
11, 2008, the Company issued 47,034 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 $0.35 per share, for
consideration consisting of $14,110.
 
 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 September 3, 2008
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 June
11, 2008, the Company issued 30,000 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 $0.30 per share, for
consideration consisting of $10,500.
  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 September 3, 2008
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 June
11, 2008, the Company issued 28,600 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 $0.30 per share, for
consideration consisting of $10,010.
 
 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 September 3, 2008
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.
 
 29
 
 On June
11, 2008, the Company issued 28,600 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 $0.45 per share, for
consideration consisting of $10,010.
 
 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 September 3, 2008
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 June
12, 2008, the Company issued 30,000 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 $0.30 per share, for
consideration consisting of $10,500.
 
 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 September 3, 2008
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 June
13, 2008, the Company issued 285,715 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 $0.30 per share, for
consideration consisting of $100,000.
 
 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 September 3, 2008
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 June
13, 2008, the Company issued 28,600 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 $0.45 per share, for
consideration consisting of $10,010.
  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 September 3, 2008
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 June
16, 2008, the Company issued 45,000 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 $0.30 per share, for
consideration consisting of $15,750.
 
 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 September 3, 2008
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 June
18, 2008, the Company issued 27,450 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 $0.35 per share, for
consideration consisting of $8,235.
 
 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 September 3, 2008
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.
 
 30
 
 On June
18, 2008 the Company issued 46, 600 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 $0.45 per share, for
consideration consisting of services amounting to $16,310.
 
 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 September 3, 2008
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 June
18, 2008, the Company issued 90,000 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 $0.30 per share, for
consideration consisting of $31,500.
 
 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 September 3, 2008
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 July
14, 2008 the Company issued 11,667 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 $0.35 per share, for
consideration consisting of $3,500.
 
 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.
  Over the
next 12 months and if the Company is successful in obtaining necessary licenses
(as described below), the Company anticipates opening its stem cell bank and
marketing its disposable stem cell / tissue management
instruments.
 
 On
November 1, 2007, the Company was granted a Biologics license (“License”) from
the Department of Health Services of the State of California. This License
permits the Company’s current facility to accept and store cord blood (Stem
Cells), whole blood, and various blood related specimens for cryogenic short and
long term storage and on November 13, 2007, the Company entered into
an agreement with Dr. Joao L. Ascensao, M.D., Ph.D., F.A.C.P. whereby Dr.
Ascensao, as an independent contractor and not as an employee, has agreed to act
as the Company’s Medical Director.
 
 On
February 13, 2008, the Company became registered with the US Food and Drug
Administration (“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.
 
 The
Company is currently endeavoring to obtain a Tissue Bank License to be granted
by Department of Health Services of the State of California. The Company
believes it has acquired all equipment necessary in order that it may operate a
Tissue Bank within the State of California.
  On March
4, 2008 the Company entered into a Letter of Intent (“LOI”) with the Regents of
the University of California (“Regents) whereby the Regents  shall
negotiate exclusively with the Company for  an exclusive license for
life of the Patent Rights to a Screening Test for Gestational Diabetes Mellitus
UCLA Case Number 2007-523  (“License Agreement”) . As consideration
for this promise, Company agreed to pay a nonrefundable fee of Five hundred
dollars ($500) within ten (10) days of the execution of this Letter of Intent,
and to reimburse The Regents for costs incurred in the drafting and filing of a
provisional patent application for UCLA Case Number 2007-523 up to a maximum
total of Three Thousand Dollars ($3,000).
  The
Company is currently in discussion with the Regents to extend the May 1, 2008
deadline. The Company is currently in the process of evaluating what, if any,
additional equipment may be required to be acquired in the event the License
Agreement is granted, of which no assurance can be given.
 
 On April
3, 2008 the Company entered into a non binding Letter of Intent with VIBRAGENE,
an anti-aging and genetic analysis company. Pursuant to the Letter of Intent, it
is proposed that the Company will perform human DNA genetic testing for
biomarkers that may play important roles in disease development and supply DNA
testing kits to VIBRAGENE for the collection of DNA specimens. Completion of the
proposed agreement is subject to a number of conditions, including but not
limited to, the establishment of pricing acceptable to the parties. The Company
is currently in the process of evaluating what, if any, additional equipment may
be required to be acquired in the event that the abovementioned proposed
agreement is executed, of which no assurance can be given.
 
 31
 
 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.
 
  Item
3. CONTROLS AND PROCEDURES
  (A)
Evaluation of Disclosure Controls and Procedures
  As of the
end of the period covered by this report, the Company carried out an evaluation,
under the supervision and with the participation of David Koos, who is the
Company's Principal Executive Officer/Principal Financial Officer, of the
effectiveness of the design and operation of the Company's disclosure controls
and procedures. The Company's disclosure controls and procedures are designed to
provide a reasonable level of assurance of achieving the Company's disclosure
control objectives. The Company's Principal Executive Officer/Principal
Financial Officer has concluded that the Company's disclosure controls and
procedures are, in fact, effective at this reasonable assurance level as of the
period covered.
  (B)
Changes in Internal Controls over Financial Reporting
  In
connection with the evaluation of the Company's internal controls during the
period commencing on April 1, 2008 and ending June 30, 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.
  Item
1: LEGAL PROCEEDINGS
  None
 
 Item
2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 
 
 (a)
 Common
Shares
 
 On May 12,
2008 the Company issued 200,000 shares of common stock to a consultant 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 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.
 
 32
 
 On June
18, 2008 the Company issued 31,245 shares of common stock holders of the
Company’s Convertible Debentures in satisfaction of $17,296 of accrued
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.
 
 
 
 Preferred
Shares
 
 On April
9, 2008, the Company issued 225,000 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 $0.30 per share, for
consideration consisting of $45,000. The offer and sale of the Units was exempt
from the registration provisions of the Securities Act of 1933, as amended, by
reason of Section 4(2) thereof.
 
 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 September 3, 2008
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 $45,000, 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 April
9, 2008, the Company issued 108,373 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 $0.30 per share, for
consideration consisting of $32,511. The offer and sale of the Units was
exempt from the registration provisions of the Securities Act of 1933, as
amended, by reason of Section 4(2) thereof.
 
 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 September 3, 2008
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 $32,511, 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 May 20,
2008, the Company issued 142,857 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 $0.45 per share, for
consideration consisting of $50,000. The offer and sale of the Units was exempt
from the registration provisions of the Securities Act of 1933, as amended, by
reason of Section 4(2) thereof.
 
 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 September 3, 2008
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.
 
 33
  The net
proceeds, which are $50,000, 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 May 20,
2008, the Company issued 800,000 shares of the Company’s Preferred Stock for
consideration consisting of services amounting to $280,000. 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 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.
 
 As an
additional incentive to purchase the securities 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
September 3, 2008 at the demand of the purchaser, 800,000 Preferred shares owned
by that purchaser into an equivalent number of shares of the company’s common
stock.
 
 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 May 20,
2008, the Company issued 390, 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 $0.30 per share, for
consideration consisting of services amounting to $136,500. The offer and
sale of the Units was exempt from the registration provisions of the Securities
Act of 1933, as amended, by reason of Section 4(2)
thereof.
 
 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 September 3, 2008
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 Units
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 May 28,
2008, the Company issued 200, 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 $0.35 per share, for
consideration consisting of $60,000. The offer and sale of the Units was
exempt from the registration provisions of the Securities Act of 1933, as
amended, by reason of Section 4(2) thereof.
 
 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 September 3, 2008
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 Units
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.
 
 The net
proceeds, which are $60,000, 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.
 
 34
  Between
May 28 and May 30, 2008, 475,000 shares of the Company’s Preferred Stock was
issued at $0.30 per Preferred Share pursuant to the exercise of issued
warrants. 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 exercise of the warrants. There was no advertisement or
general solicitation made in connection with this exercise of warrants and
restrictive legends were placed on the shares issued pursuant to the exercise of
the warrants. The exercise 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  Units which included
the warrants as a component thereof, including the representations and
warranties made by the purchaser The net proceeds, which are $142,500, will be
utilized general working capital purposes.
 
 
 On May 27,
2008, the Company issued 71,429 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 $0.45 per share, for
consideration consisting of $25,000. The offer and sale of the Units was
exempt from the registration provisions of the Securities Act of 1933, as
amended, by reason of Section 4(2) thereof.
 
 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 September 3, 2008
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 $25,000, 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 May 29,
2008, the Company issued 175,125 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 $0.35 per share, for
consideration consisting of services amounting to $61,294. The offer and
sale of the Units was exempt from the registration provisions of the Securities
Act of 1933, as amended, by reason of Section 4(2)
thereof.
 
 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 September 3, 2008
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 Units
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.
 
 On May 30,
2008, the Company issued 71,429 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 $0.45 per share, for
consideration consisting of $25,000. The offer and sale of the Units was
exempt from the registration provisions of the Securities Act of 1933, as
amended, by reason of Section 4(2) thereof.
 
 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 September 3, 2008
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.
  35
 
 The net
proceeds, which are $25,000, 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 May 30,
2008, the Company issued 10,000 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 $0.45 per share, for
consideration consisting of services amounting to $3,500. The offer and
sale of the Units was exempt from the registration provisions of the Securities
Act of 1933, as amended, by reason of Section 4(2)
thereof.
 
 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 September 3, 2008
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 Units
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.
 
 On June 2,
2008, the Company issued 15,000 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 $0.30 per share, for
consideration consisting of $5,250. The offer and sale of the Units was
exempt from the registration provisions of the Securities Act of 1933, as
amended, by reason of Section 4(2) thereof.
 
 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 September 3, 2008
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 $5,250, 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 June 3,
2008, the Company issued 103,334 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 $0.35 per share, for
consideration consisting of $31,000. The offer and sale of the Units was
exempt from the registration provisions of the Securities Act of 1933, as
amended, by reason of Section 4(2) thereof.
 
 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 September 3, 2008
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 $31,000, 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.
 
 36
  On June 3,
2008, the Company issued 30,000 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 $0.30 per share, for
consideration consisting of $10,500. The offer and sale of the Units was
exempt from the registration provisions of the Securities Act of 1933, as
amended, by reason of Section 4(2) thereof.
 
 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 September 3, 2008
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 $10,500, 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 June
11, 2008, the Company issued 28,600 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 $0.30 per share, for
consideration consisting of $10,010. The offer and sale of the Units was
exempt from the registration provisions of the Securities Act of 1933, as
amended, by reason of Section 4(2) thereof.
 
 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 September 3, 2008
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 $10,010, 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 June
11, 2008, the Company issued 28,600 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 $0.45 per share, for
consideration consisting of $10,010. The offer and sale of the Units was
exempt from the registration provisions of the Securities Act of 1933, as
amended, by reason of Section 4(2) thereof.
 
 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 September 3, 2008
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 $10,010, 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 June
12, 2008, the Company issued 30,000 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 $0.30 per share, for
consideration consisting of $10,500. The offer and sale of the Units was exempt
from the registration provisions of the Securities Act of 1933, as amended, by
reason of Section 4(2) thereof.
 
 37
 
 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 September 3, 2008
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 $10,500, 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 June
13, 2008, the Company issued 285,715 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 $0.30 per share, for
consideration consisting of $100,000. The offer and sale of the Units was
exempt from the registration provisions of the Securities Act of 1933, as
amended, by reason of Section 4(2) thereof.
 
 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 September 3, 2008
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 $100,000, 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 June
13, 2008, the Company issued 28,600 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 $0.45 per share, for
consideration consisting of $10,010. The offer and sale of the Units was
exempt from the registration provisions of the Securities Act of 1933, as
amended, by reason of Section 4(2) thereof.
 
 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 September 3, 2008
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 $10,010, 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 June
16, 2008, the Company issued 45,000 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 $0.30 per share, for
consideration consisting of $15,750. The offer and sale of the Units was
exempt from the registration provisions of the Securities Act of 1933, as
amended, by reason of Section 4(2) thereof.
 
 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 September 3, 2008
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.
 
 38
  The net
proceeds, which are $15,750, 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 June
18, 2008, the Company issued 27,450 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 $0.35 per share, for
consideration consisting of $8,235. The offer and sale of the Units was
exempt from the registration provisions of the Securities Act of 1933, as
amended, by reason of Section 4(2) thereof.
 
 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 September 3, 2008
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 $8,235, 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 June
18, 2008 the Company issued 46, 600 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 $0.45 per share, for
consideration consisting of services amounting to $46,600. The offer and
sale of the Units was exempt from the registration provisions of the Securities
Act of 1933, as amended, by reason of Section 4(2)
thereof.
 
 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 September 3, 2008
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 Units
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.
 
 On June
18, 2008, the Company issued 90,000 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 $0.30 per share, for
consideration consisting of $31,500. The offer and sale of the Units was
exempt from the registration provisions of the Securities Act of 1933, as
amended, by reason of Section 4(2) thereof.
 
 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 September 3, 2008
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 $31,500, 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.
  39
 
 On July
14, 2008 the Company issued 11,667 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 $0.35 per share, for
consideration consisting of $3,500. The offer and sale of the Units was
exempt from the registration provisions of the Securities Act of 1933, as
amended, by reason of Section 4(2) thereof.
 
 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 $3,500, 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.
 
 (b)
  Material
Modification to Rights of Security Holders.
  On July 2,
2008   Bio Matrix Scientific Group, Inc. (“Company”) filed a
CERTIFICATE OF DESIGNATION OF PREFERENCES, RIGHTS AND LIMITATIONS OF SERIES AA
PREFERRED STOCK (“Certificate of Designations”) with the Delaware Secretary of
State setting forth the preferences rights and limitations of a newly authorized
series of preferred stock designated and known as “Series AA Preferred Stock”
(hereinafter referred to as “Series AA Preferred Stock”).
  The Board
of Directors of the Company have authorized 100,000 shares of the Series AA
Preferred Stock. With respect to each matter submitted to a vote of stockholders
of the Corporation, each holder of Series AA Preferred Stock shall be entitled
to cast that number of votes which is equivalent to the number of shares of
Series AA Preferred Stock owned by such holder times ten thousand (10,0000).
Except as otherwise required by law, holders of Common Stock, other series of
Preferred issued by the Corporation,  and Series AA Preferred Stock
shall vote as a single class on all matters submitted to the
stockholders.
  On July 3,
2008, the Company issued 4,852 shares of Series AA Preferred Stock (“AA Stock”)
to David R. Koos, the Company’s Chairman, President and CEO pursuant to the
following terms and conditions:
  A)        In
the event that Koos voluntarily resigns as either President or CEO of the
Company prior to July 3, 2018 the AA Stock shall be returned to the
Company.
  B)        In
the event of the death of Koos prior to July 3, 2018 the AA Stock shall be
returned to the Company.
  C)        Upon
the expiration of a continuous period of two hundred forty (240) calendar days
during which Koos is unable to perform his material duties as President or CEO
due to physical or mental incapacity the AA Stock shall be returned to the
Company.
  D)        Upon
Koos’ conviction in a court of competent jurisdiction for a felony or any crime
involving fraud or misrepresentation the AA Stock shall be returned to the
Company.
  The AA
Stock issued to Koos are currently the only shares of Series AA Preferred Stock
outstanding.
  The
issuance of the AA Stock, with disproportionately high voting rights generally,
will adversely affect the voting power of holders of common stock and other
currently outstanding series of preferred stock of the Company.
  To the
extent that the AA Stock may have anti-takeover effects, the Company believes
that concentrating such voting power with the Chairman of the Company will
encourage persons seeking to acquire the Company to negotiate directly with the
Board of Directors enabling the Board of Directors to consider the proposed
transaction in a manner that best serves the stockholders’
interests.
  40
 
  The
description of the Certificate of Designations is qualified in its entirety by
reference to the full text of the Certificate of Designations, which is attached
to the Company’s Current report on Form 8-k dated July 3, 2008 as Exhibit 3(i)
and incorporated herein by reference.
  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 2002.3(i)
              Certificate
      of Designations (incorporated by reference Filed as Exhibit 3(i) of our
      Form 8K dated July 3, 2008.10
              Agreement
      by and between David R. Koos and Bio-Matrix Scientific Group, Inc. dated
      July 3, 2008(incorporated by reference Filed asExhibit
      10 of our Form 8K dated July 3,
2008.)
 
 
 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:
      August 5, 2008
  41