UNITED
STATES SECURITIES AND EXCHANGE COMMISSION




WASHINGTON,
D. C. 20549





FORM
10-KSB





ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934








For the
Year Ended September 30, 2008


File
Number: 0-32201








BIO-MATRIX
SCIENTIFIC GROUP, INC.


(Exact
name of registrant as specified in its charter)





DELAWARE
            
            33-0824714(State
      of jurisdiction of Incorporation)
            
            (I.R.S.
      Employer Identification No.)8885
      REHCO RD. SAN DIEGO, CA
            
            92121(Address
      of principal executive offices)
            
            (Zip
      Code)





(619)
398-3517 ext. 308


(Registrants
telephone number, including area code)





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





Check if
there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. Yes x
  No o





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).o





The issuer
had no revenues for the year ended September 30, 2008.





Aggregate
market value of the voting common stock held by non-affiliates computed by
reference to the closing price at which the common stock sold on the
Over-the-Counter on   December 9, 2008  was $
5,124,019. The voting common stock held by non-affiliates on that date consisted
of  19,707,764 shares of common stock.





Number of
shares outstanding of each of the issuer's class of common stock as of December
09, 2008:


Common
Stock: 26,102,993


Preferred
Stock: 5,668,547


Series AA
Preferred Stock: 4,852










THE
STATEMENTS CONTAINED IN THIS REPORT ON FORM 10-KSB THAT ARE NOT HISTORICAL FACTS
ARE “FORWARD-LOOKING STATEMENTS (AS THAT TERM IS DEFINED IN THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995), THAT CAN BE IDENTIFIED BY THE USE OF
FORWARD-LOOKING WORDS SUCH AS “BELIEVES, “EXPECTS, “MAY,” “WILL,”“SHOULD,” OR
“ANTICIPATES,” OR THE NEGATIVE OF THESE WORDS OR OTHER VARIATIONS OF THESE WORDS
OR COMPARABLE WORDS, OR BY DISCUSSIONS OF STRATEGY THAT INVOLVE RISKS AND
UNCERTAINTIES. MANAGEMENT WISHES TO CAUTION THE READER THAT THESE
FORWARD-LOOKING STATEMENTS INCLUDING, BUT NOT LIMITED TO, STATEMENTS REGARDING
THE PLANNED EFFORTS TO IMPLEMENT THE COMPANY'S BUSINESS PLAN, THE STATUS OF STEM
CELL TECHNOLOGY, OUR PLANNED MEDICAL DEVICE PRODUCTS, AND ANY OTHER EFFORTS THAT
THE COMPANY INTENDS TO TAKE IN AN ATTEMPT TO GROW THECOMPANY, ENHANCE SALES,
ATTRACT & RETAIN QUALIFIED PERSONNEL, AND OTHERWISE EXPAND THE COMPANY'S
BUSINESS ARE NOT HISTORICAL FACTS AND ARE ONLY PREDICTIONS. NO ASSURANCES CAN BE
GIVEN THAT SUCH PREDICTIONS WILL PROVE CORRECT OR THAT THE ANTICIPATED FUTURE
RESULTS WILL BE ACHIEVED. ACTUAL EVENTS OR RESULTS MAY DIFFER MATERIALLY EITHER
BECAUSE ONE OR MORE PREDICTIONS PROVE TO BE ERRONEOUS OR BECAUSE OF THE
CONTINUING RISKS AND UNCERTAINTIES FACING THE COMPANY. SUCH RISKS INCLUDE, BUT
ARE NOT LIMITED TO, THE FOLLOWING: BUSINESS (OR SYSTEMATIC) RISK ASSOCIATED WITH
AN EARLY STAGE COMPANY, UNSYSTEMATIC RISK, AND POLITICAL RISK. FURTHER, BECAUSE
OF THE SMALL SIZE OF THE COMPANY, THE COMPANY'S LIMITED FINANCIAL AND MANAGERIAL
RESOURCES AND THE CONTINUING COMPETITIVE PRESSURES AND UNCERTAINT REGULATORY
ENVIRONMENT, ANY ONE OR  MORE OF THESE AND OTHER RISKS COULD CAUSE
ACTUAL RESULTS TO DIFFER MATERIALLY FROM THE FUTURE RESULTS INDICATED,
EXPRESSED, OR IMPLIED IN SUCH FORWARD-LOOKING STATEMENTS. ALL REFERENCES TO “WE”
OR “US” CONTAINED WITHIN THIS FORM 10-KSB REFER TO BIO-MATRIX SCIENTIFIC GROUP,
INC.




PART I


ITEM 1 -
DESCRIPTION OF BUSINESS




BUSINESS
DEVELOPMENT





We were
organized October 6, 1998, under the laws of the State of Delaware as Tasco
International, Inc.





We are in
the development stage.





From
October 6, 1998 (the date of incorporation) of to October 19, 1999, we were in
the business of marketing and selling hand-made jewelry and art objects on the
Internet. We conducted no operations past the development stage and did not
generate any revenues in this business.





From
October 19, 1999 to July 3, 2006 (the date of Acquisition of BMSG) , we were in
the business of providing production of visual content and other digital media,
including still media, 360-degree images, video, animation and audio for the
Internet.





Acquisition
of Bio-Matrix Scientific group, Inc., a Nevada corporation:





On June
14, 2006, we and Bio-Matrix Scientific Group, Inc., a Delaware corporation (the
“Seller”) entered into a Stock Purchase Agreement (the “Acquisition Agreement”)
to acquire 100% of Bio-Matrix Scientific Group, Inc., a Nevada
corporation.





Under the
terms of the Acquisition Agreement and pursuant to a separate Escrow Agreement
between us and the Seller, we delivered to the Escrow Agent the sum of
10,000,000 shares of our common stock and other corporate and financial records
and the Seller delivered to the Escrow Agent 25,000 shares of the common stock
of Bio-Matrix Scientific Group, Inc., a Nevada corporation, its wholly owned
subsidiary (“BMSG”). 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, our former Chairman and Chief Executive Officer, John Lauring
returned 10,000,000 shares of the Buyer held and owned by him for
cancellation.





On June
14, 2006, our former officers and directors resigned their positions and elected
Dr. David R. Koos and Mr. Brian Pockett as in-coming Directors. Following their
election and the reconstruction of the Board of Directors, the Buyer'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 we acquired the twenty-five thousand
(25,000) shares of the Common Stock of BMSG from the Seller in exchange for the
payment of the purchase price of 10,000,000 shares of our common stock and the
10,000,000 shares of our common stock owned and held by John Lauring were
returned to us 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, BMSG is our wholly owned subsidiary. We
abandoned our efforts in the field of digital media production when we acquired
100% of BMSG on July 3, 2006. 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. As a result of this transaction, the former
stockholder BMSG held approximately 80% of our voting capital stock of the
Company immediately after the transaction.  For financial accounting
purposes, this acquisition was a reverse acquisition of the Company by BMSG
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 BMSG, which has changed its Fiscal Year
End to September 30, from December 31. As BMSG had changed its fiscal
year-end  from December 31 to September 30, a transition report was
filed with the United States Securities and Exchange Commission for the
transition period from December 31, 2005 to September 30, 2006 on Form
10KSB/A.




Through
BMSG, we have developed a line of medical devices (approximately 192 disposable
instruments for use in the plastic surgery field and stem cell research). The
instruments are designed to be used to harvest adult stem cells from adipose
(fat) tissue. We seek to market and sell these instruments to plastic surgeons
and to offer the patients of these plastic surgeons an opportunity to store stem
cells derived from adipose tissue for future medical treatments. We have-not
conducted or obtained any independent evaluation of the efficacy or likely
market interest in using these instruments. Our evaluations have been limited to
those conducted by our management without the benefit of any independent or
third party professional evaluation.




Through
BMSG , we are currently constructing what we believe is a state-of-the art, FDA
good manufacturing practices (cGMP) and good tissue practices(cGTP) compliant
facility for the processing and cryo-storage (in liquid nitrogen) of adult stem
cells. We anticipate that we will offer a similar service to expectant parents
by offering to store their newborn's cord blood stem cells as well. In
undertaking these plans, we intend to offer such storage services at our planned
facility. The planned facility is located at 8885 Rehco Road, San Diego,
California 92121 and has approximately 15,000 square feet. The planned
facility was acquired under a five year lease on December 1, 2005 at a current
cost of $18,931 per month (plus certain common area costs). Under the terms of
the lease, the lease term may be extended for an additional five year lease term
at the then prevailing market prices.









All of our
current plans and strategy have been developed solely by our officers and
Directors




BUSINESS
OF THE ISSUER





PRINCIPAL
PRODUCTS AND SERVICES


We are
engaged primarily in:





(a) The
cryogenic storage of stem cells and





(b) The
development of medical devices used in live tissue transfer and stem cell
research. Live tissue transfer is the process of harvesting, treating, and
re-injecting tissue without damaging precious living cells, potentially
increasing the chance of tissue surviving once transplanted to a donor
site.





Stem Cell
Bank





We are
currently constructing what we believe to be a state-of-the art, FDA good
manufacturing practices (cGMP) and good tissue practices (cGTP) compliant
facility for the processing and cryo-storage (in liquid nitrogen) of adult stem
cells. We anticipate that we will offer a similar service to expectant parents
by offering to store their newborn's cord blood stem cells as well. In
undertaking these plans, we intend to offer such storage services at our planned
facility. This facility is located at 8885 Rehco Road, San Diego,
California 92121 and has approximately 15,000 square feet. The planned
facility was acquired by our operating subsidiary under a five year lease on
December 1, 2005 at a current cost of $18,931 per month (plus certain common
area costs). Under the terms of the lease, the lease term may be extended for an
additional five year lease term at the then prevailing market prices. On
November 1, 2007, we were granted a Biologics license (“License”) from the
Department of Health Services of the State of California. This License permits
our 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, we 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 our Medical
Director.





Medical
devices





Through
BMSG, we have developed a line of medical devices consisting of approximately
192 disposable instruments for use in the plastic surgery field and stem cell
research. We seek to market and sell these instruments to plastic surgeons and
to offer the patients of these plastic surgeons an opportunity to store stem
cells derived from adipose tissue for future medical treatments.





BMSG has
filed six provisional patent applications, one utility patent application and
one international patent application. These are as follows:




A. Cannula
- This provisional patent application was filed based on BMSG's intellectual
property and designs relating to tubular instruments used in stem cell
harvesting and tissue transfers.




B. Tissue
Transfer Cannula and Connectors - This provisional patent application was filed
based on BMSG's intellectual property relating to tubular instrument connectors
used in conjunction with cannulae designed specifically for stem cell harvesting
and tissue transfer procedures. These tissue transfer connectors will allow the
transfer of tissue from a 20cc to a 3cc or 6cc or 12cc syringe for harvesting or
tissue transfer procedures.




C. Syringe
Clip - This provisional patent application was filed based on BMSG's
intellectual property relating to a locking device used with syringes which are
connected to smaller size cannulae in stem cell harvesting and tissue transfer
procedures. This syringe clip is designed to hold and lock the plunger on the
Monoject 3cc, 6cc, 12cc, and 20cc syringes. By locking the plunger in place it
protects the harvested cells until processing.




D. Syringe
Clip - This provisional patent application was filed based on BMSG's
intellectual property relating to a locking device used with syringes which are
connected to larger sized cannulae in stem cell harvesting and tissue transfer
procedures. This syringe clip is designed to hold and lock the plunger on the
Monoject 60cc syringe by locking the plunger it protects the harvested cell
until processing.




E. Tissue
Transfer Cannula and Connectors - This provisional patent application was filed
based on BMSG's intellectual property relating to the tubular instrumentation
system used in stem cell harvesting and tissue transfer procedures. This
transfer system is used to transfer human tissue from a 60cc syringe to a35cc or
20cc syringe for tissue transfer.




F. Cannula
Handle and Storage System - This provisional patent application was filed back
on BMSG's intellectual property relating to a locking device used with syringes
which are connected to cannulae in stem cell harvesting and tissue transfer
procedures. This cannula handle will reduce hand and arm fatigue. The handle
will allow a proper flow of tissue through the cannula using an aspirator or a
pull syringe.




G. Tissue
Transfer Cannula and Connectors - This utility patent application was filed
based on BMSG's previously filed provisional patent application relating to the
aforementioned intellectual property pertaining to tubular instruments locking
device used with syringes which are connected to cannulae in stem cell
harvesting and tissue transfer procedures.




H. Tissue
Transfer Cannula and Connectors - This international utility patent application
was filed in conjunction with the utility patent application mentioned in Item
G.




Veterinary
Division





Since many
of the medical devices we have developed can easily be used in veterinary
applications, we plan to pursue opportunities in this field. Although
the plans for this field are still evolving, initially we expect to only be
involved in the cryogenic storage of animal stem cells. The veterinary specimens
would be totally isolated from human specimens throughout the facility and
stored in an entirely separate area and cryogenic storage
container.  The veterinary division would market and sell its services
through other companies already serving the veterinary market.




DISTRIBUTION
METHODS OF PRODUCTS AND SERVICES





We intend
to market and sell our planned services to medical professionals and other
companies that offer potential for commercial synergies. Our Subsidiary has
entered into an agreement with Cord Blood America, Inc. (CBAI), whereby CBAI
will market to potential clients our subsidiary's services of adipose stem cell
banking using the Subsidiary's planned stem cell bank facility. Under this
agreement, the Subsidiary has agreed to contract with Cord Blood America Inc. to
marketing adult stem cell banking to its clients. This contract involves a
sharing of fees charged on a 60 / 40 basis, with 60% of the fees going to us and
40% going to Cord Blood America.









Our
marketing plan is fairly simple and our target market includes three segments:
plastic surgeons, hospitals and medical schools. We intend to reach these three
target markets through advertising and promotional efforts at medical related
trade shows/conventions, online websites, trade publications and independent
medical marketing entities. We have not yet commenced any marketing efforts to
reach these targeted segments and we have not yet prepared a marketing budget.
We are aware, however, that our current financial resources may limit our
ability to fully promote the products and services that we plan to offer and we
anticipate that we will need to develop and refine our marketing plans further
before commencing these efforts.




The
primary products and services we intend to offer are: (A) our medical devices
(consisting of over 192 disposable instruments used in stem cell procedures
/tissue transfer procedures) and (B) the services to be provided by our planned
stem cell bank.




Adipose
Derived Stem Cell Banking




We have
entered into an agreement with Cord Blood America Inc. (OTCBB: CBAI) to market
the collection of adipose (fat) derived stem cells to plastic and cosmetic
surgeons. It is anticipated upon roll-out, this relationship may offer us the
opportunity to utilize as many as 28 independent out-side sales representatives
already in the field. If these efforts are successful, we plan to initiate a new
web-site that can take orders, provide information, and respond to questions
from potential customers. We have not yet completed work on the design of this
planned web site, but we anticipate that the design and development of the web
site will require careful planning and careful coordination with Cord Blood
America to ensure that our marketing plans can be implemented on a consistent
basis.




Collection
of adipose (fat) tissue from which stem cells may be harvested, must be done by
a physician skilled in using a Stem Cell Collection Kit. While many physicians
have experience in handling adipose (fat) tissue as a part of their practice as
a plastic surgeon, we will need to assist and develop their understanding and
preference for the use of our kit, instruments, and our stem cell storage
services, if we are obtain a sufficient market interest in our planned products
and services.




After the
stem cells are collected, they are prepared for cryo-preservation and storage.
In order to successfully harvest stem cells intended for cryo-preservation and
storage, the instruments used must be clean and free of any contaminants. To
ensure that the collection process meets these requirements and to prevent
difficulties that may arise in cryo-preservation and storage, we intend to
provide each surgeon who undertakes to collect the stem cells, with our Stem
Cell Collection Kit after the patient has entered into an agreement with us to
store their stem cells with us.




We
anticipate that the marketing of our planned products and services will require
that we complete several steps. First, we plan to introduce our Stem Cell
Collection Kits to certain key physicians so as to allow them to become familiar
with our kit, the instrumentation, and our line of products. Second, we
anticipate that we will need to expend significant efforts to develop physician
acceptance of our kit and instruments. Third, we will need to hire and train
skilled marketing personnel to develop relationships with physicians that will
serve to encourage physicians to use and recommend our services to their
patients. We have not, as of this date, made any estimate for the amount of
funds that will be needed to complete these marketing efforts or the anticipated
time frame that will be required to implement these steps.




Stem Cell
/ Tissue Transfer Instrumentation




If we
implement successfully the steps outlined above, we will look to develop loyalty
among physicians who use our Stem Cell Collection Kit and attempt to convert
them to use our complete instrumentation product line. We intend, as
opportunities and our financial resources allow, to rely upon the 28 out-side
CBAI sales representatives already in the field to show our complete
product line (consisting of over 192 disposable instruments) to other
physicians, hospitals, outpatient surgery centers, and plastic surgery centers.
This strategy may allow us many advantages to showcase our instruments for other
procedures where there is a heightened concern for the risks of
cross-contamination and the need for greater predictability in tissue
manipulation. We also believe that our instruments may offer greater ease of use
and clean up. These features may serve to make our instruments more attractive
to physicians as it allows them and their staff to be more productive. We also
believe that our disposable instruments may allow the medical service provider
(such as a physician, hospital, or surgery center) an opportunity to directly
charge the patient for instrumentation. This may offer an additional financial
incentive to encourage physician usage and loyalty in using our
instruments.




In
addition to our planned website and direct marketing plans, we plan to attend
trade shows and conventions to further introduce and promote our planned
products and services. These trade shows and conventions will likely include
meetings and conventions sponsored by such groups as the American Society of
Plastic Surgeons Conventions, Orthopedic Surgery, and the AAPS Annual Meeting.
These efforts will be primarily focused on introducing, establishing, building,
and fostering relationships with the targeted segments of physicians, hospitals,
surgery centers, plastic surgery centers, and other providers of medical
services. These relationships will likely become critically important to us if
we are to develop a sufficient and sustainable revenue base for our company from
the sale of our planned products and services.





We
anticipate that if we are successful in introducing and developing loyalty for
our planned products and services, we will need to expend significant financial
resources ranging from $1,750,000 to $2,000,000 or more for advertising and
marketing expenditures over a period of at least nine months to one year or
longer. There are many variables and factors that may impact the time frame and
the amount of expenditures that we will need to make to introduce and develop
loyalty with our targeted segments. We may need to adjust our plans and devote a
larger amount of funds to these efforts over a longer period of time if we are
not able to generate a sufficient volume of product acceptance and repeat sales
that will allow us to achieve these objectives. In the event that we are
successful in achieving these objectives, we anticipate that it may take an
additional eighteen to twenty four months or longer before we may be able to
achieve profitability and positive cash flow, if at all. As we assess the cost
to enter a new business, with all of the uncertainties and risks associated with
the offering of new products and services, while also developing, testing, and
implementing marketing plans for the offering of products and services that are
new, we are aware that we may be facing an ever-changing competitive environment
from other larger and well-established competitors that may force us to examine
and revise our marketing plans.




STATUS OF
ANY PUBLICLY ANNOUNCED NEW PRODUCT OR SERVICE





Stem Cell
Bank




In August,
2005, BMSG signed a lease on a 14,562 sq. ft. facility. This facility, formerly
occupied by the American Red Cross blood testing laboratories provides a
significant infrastructure for the rapid establishment of Bio-Matrix's core stem
cell business. This facility will house state-of-the-art stem cell processing
and storage laboratories




The
cryogenic storage laboratories, comprising 1050 sq. ft. have been completed. A
central external liquid nitrogen supply system is also now in place at the
facility. In addition, the first of eight liquid nitrogen stem cell storage
tanks have been installed and is undergoing testing and validation.




Adipose
and cellular processing will be performed in Class 100 environments in our 400
sq. ft. Class 10,000 Modular Laboratory which was completed in October 2006.
Cord blood processing will be done in Class 100 environments in Class 100,000
Laboratory. The facility also has an area for viability testing, preparatory,
receiving, quarantine/ chemical storage, flow cytometry and
microbiology.




To date,
we have completed the following:










January
2006 - Installation and inspection of 2000 liter Perma-Cyl nitrogen tank
complete.





February
2006 - Installation and testing of vacuum jacketed liquid nitrogen piping system
complete.





February
2006 - California Medical Waste Management Plan is completed and accepted by the
state of California.





March 2006
- Installation and validation of computer lock down system and air control
monitors at Sorrento Mesa facility thus completing the Cryogenic Storage
Laboratories.




June 2006
- Delivery, Installation testing and validation of CBS Isothermal liquid
nitrogen vapor storage tank.




November
2006 - Construction and installation of new Stem Cell Class 10,000 Processing
Laboratory has been completed.





May 2007 -
entered into a Contract with Validation Systems Inc. for assistance in securing
a required  State of California License from the State of
California





September
2007 - Completed Quality Systems Procedures Manual required for State of
California licensing and FDA registration.





October
2007 - Completed Quality Systems Policies Protocols Manual required for
State of California licensing and FDA registration.





November
1, 2007 - Granted a Biologics license (“License”) from the Department of Health
Services of the State of California.





Nov.
7th,
2007 - Dr. Joao L. Ascensao, M.D., Ph.D., F.A.C.P. began his  service
as our Medical Director





Dec. 20th
, 2007 - filed our registration with the Food and Drug Administration pursuant
to 21CFR Parts 207, 807, and 1271 – “Establishment Registration and Listing for
Human Cells, Tissues, and Cellular and Tissue-Based Products”








Medical
Devices:




BMSG has
filed six provisional patent applications and one utility patent application.
These are as follows:




A. Cannula
- This provisional patent application was filed based on BMSG's intellectual
property and designs relating to tubular instruments used in stem cell
harvesting and tissue transfers.




B. Tissue
Transfer Cannula and Connectors - This provisional patent application was filed
based on BMSG's intellectual property relating to tubular instrument connectors
used in conjunction with cannulae designed specifically for stem cell harvesting
and tissue transfer procedures. These tissue transfer connectors will allow the
transfer of tissue from a 20cc to a 3cc or 6cc or 12cc syringe for harvesting or
tissue transfer procedures.




C. Syringe
Clip - This provisional patent application was filed based on BMSG's
intellectual property relating to a locking device used with syringes which are
connected to smaller size cannulae in stem cell harvesting and tissue transfer
procedures. This syringe clip is designed to hold and lock the plunger on the
Monoject 3cc, 6cc, 12cc, and 20cc syringes. By locking the plunger in place it
protects the harvested cells until processing.




D. Syringe
Clip - This provisional patent application was filed based on BMSG's
intellectual property relating to a locking device used with syringes which are
connected to larger sized cannulae in stem cell harvesting and tissue transfer
procedures. This syringe clip is designed to hold and lock the plunger on the
Monojet 60cc syringe by locking the plunger it protects the harvested cell until
processing.




E. Tissue
Transfer Cannula and Connectors - This provisional patent application was filed
based on BMSG's intellectual property relating to the tubular instrumentation
system used in stem cell harvesting and tissue transfer procedures. This
transfer system is used to transfer human tissue from a 60cc syringe to a35cc or
20cc syringe for tissue transfer.




F. Cannula
Handle and Storage System - This provisional patent application was filed based
on BMSG's intellectual property relating to a locking device used with syringes
which are connected to cannulae in stem cell harvesting and tissue transfer
procedures. This cannula handle will reduce hand and arm fatigue. The handle
will allow a proper flow of tissue through the cannula using an aspirator or a
pull syringe.




G. Tissue
Transfer Cannula and Connectors - This utility patent application was filed
based on BMSG's previously filed provisional patent application relating to the
aforementioned intellectual property pertaining to tubular instruments locking
device used with syringes which are connected to cannulae in stem cell
harvesting and tissue transfer procedures.




H. Tissue
Transfer Cannula and Connectors - This international utility patent application
was filed in conjunction with the utility patent application mentioned in Item
G





On August
11, 2008,  we entered into a Letter of Intent (“LOI”) with Cord Blood
America, Inc (“CBAI”) regarding contemplated transactions consisting of the
following services to be provided by us to CBAI for consideration acceptable to
us:





(a)
Cryogenic storage of Cord Blood specimens newly acquired by CBAI





(b)
Processing of Cord Blood specimens





The
transactions contemplated by the LOI are subject to the execution of one or more
definitive agreements and the provisions of the LOI are non binding on both
parties with the exception of provisions regarding termination of duties to
negotiate in good faith, non disclosure of confidential information, disclaimer
of liabilities and choice of governing law and venue. While we are still in
discussion with CBAI regarding the transactions contemplated by the LOI, no
assurance can be given that definitive agreements, as described above, will be
executed.




On October
23, 2008 The Regents of the University of California
(“Regents”)  and  Entest Biomedical, Inc. (“Licensee”) ., a
wholly owned subsidiary of  us., executed an  Exclusive
License Agreement (“ELA”) .





Pursuant
to the ELA and subject to the limitations set forth in the ELA, The
Regents  granted to Licensee an exclusive license (the "License")
under The Regents’ interest in Provisional Patent Application No. 61/030,316
entitled “SCREENING TEST FOR GESTATIONAL DIABETES MELLITUS” filed 02/21/2008
(UCLA Case No. 2007-523-1) (“Regents Patent Rights”) in jurisdictions where
Regents' Patent Rights exist, to make, have made, use, sell, offer for sale and
import Licensed Products (as “Licensed Products” is defined in the ELA) and to
practice Licensed Methods (as “Licensed Methods” is defined in the ELA) in all
fields of use to the extent permitted by law.










"Licensed
Product", as defined in the ELA,  means any article, composition,
apparatus, substance, chemical, or any other material covered by Regents' Patent
Rights or whose manufacture, use or sale would, absent the license granted under
the ELA, constitute an infringement, inducement of infringement, or contributory
infringement, of any claim within Regents' Patent Rights, or any service,
article, composition, apparatus, chemical, substance, or any other material
made, used, or sold by or utilizing or practicing a Licensed
Method.





"Licensed
Method", as defined in the ELA, means any process, service, or method which is
covered by Regents' Patent Rights or whose use or practice would, absent the
license granted under the ELA, constitute an infringement, inducement of
infringement, or contributory infringement, of any claim within Regents' Patent
Rights.





Pursuant
to the ELA, Licensee shall be obligated to pay to The Regents for sales by
Licensee and sublicensees:





(i) an
earned royalty of Six percent (6%) of Net Sales of Licensed Products or Licensed
Methods.





(ii) a
minimum annual royalty of Fifty thousand dollars ($50,000) for the life of
Regents' Patent Rights, beginning one year after the first commercial sale of
Licensed Product.  The minimum annual royalty will be credited against
the earned royalty due and owing for the calendar year in which the minimum
payment was made.





(iii) pay
to The Regents a license maintenance fee of Five thousand dollars ($5,000)
beginning on the one-year anniversary date of the effective date of the ELA and
continuing annually on each anniversary date of the Effective
Date.  The maintenance fee will not be due and payable on any
anniversary date of the effective date if on that date Licensee is commercially
selling a Licensed Product and paying an earned royalty to The Regents on the
sales of that Licensed Product.





Pursuant
to the ELA, the Licensee is also obligated to:





(a)
diligently proceed with the development, manufacture and sale
("Commercialization") of Licensed Products and must earnestly and diligently
endeavor to market them within a reasonable time after execution of the ELA and
in quantities sufficient to meet the market demands for them.





(b)
endeavor to obtain all necessary governmental approvals for the
Commercialization of Licensed Products.





Unless
otherwise terminated by operation of law or by acts of the parties in accordance
with the terms of the ELA, the ELA remains in effect for the life of the
last-to-expire patent or last to be abandoned patent application in Regents'
Patent Rights, whichever is later.







COMPETITIVE
BUSINESS CONDITIONS AND THE SMALL BUSINESS ISSUER'S COMPETITIVE POSITION IN THE
INDUSTRY AND METHODS OF COMPETITION





We face
intense and ever-changing competition from many other established local,
regional and national companies. Many of these companies, such as Cryo-Cell
International Inc., California Cryo-Bank, Cord Blood Registry, Inc. and Viacord
are competitors who possess significantly greater financial, managerial, and
marketing resources. Given our small size, changing technology, and our limited
resources, the intensity of competition will likely continue for the foreseeable
future. This may limit our ability to introduce and market our products, limit
our ability to price our planned products and services, and, ultimately, our
ability to generate and sustain sufficient sales revenues that would allow us to
achieve profitability and positive cash flow.




These
competitors have, in many cases, completed or implemented strategies that may
provide them with a greater ability and a more diversified business strategy
that will allow them to better respond to product and market changes and other
variables in this new industry.




Competitive
conditions and the industry structure are likely to further change as
comparative technologies, cost factors, and regulatory issues develop. These and
other risks and uncertainties are likely to have a continuing direct impact on
the Registrant in implementing its business plan.





SOURCES
AND AVAILABILITY OF RAW MATERIALS AND THE NAMES OF PRINCIPAL
SUPPLIERS





We source
materials from a variety of vendors as the materials required by us are widely
available on competitive terms and conditions.





DEPENDENCE
ON ONE OR A FEW MAJOR CUSTOMERS





We have
not, as of the date of this document, sold any products or services. We do not
anticipate dependence on one or a few major customers upon commencement of
sales.




PATENTS,
TRADEMARKS, LICENSES, FRANCHISES, CONCESSIONS, ROYALTY AGREEMENTS OR LABOR
CONTRACTS, INCLUDING DURATION





None




GOVERNMENT
REGULATIONS





The U.S.
Food and Drug Administration (FDA) regulations require that all human tissue and
cellular products be manufactured according to Good Tissue Practice (cGTP). FDA
code of Federal regulations 21 CFR part1271 was effective May 2005). As
currently planned, we plan to manufacture human cellular based products for
future, as yet undefined, medical treatments in accordance with this regulation.
Good tissue practices requires that all tissue based and cellular products be
manufactured to minimize the transmission of diseases including hepatitis and
HIV. All tissue banks (including those banking cellular based products) must
register with the FDA prior to commencement of such product manufacture and
their associated services and be compliant.




We are
required to register with the FDA under the Public Health Service Act to satisfy
the regulatory requirements involving the storage of stem cells and other
tissue. These regulatory requirements apply to all establishments engaged in the
recovery, processing, storage, labeling, packaging, or distribution of any Human
Cells, Tissues, and Cellular and Tissue-Based Products (HCT/Ps) or the screening
or testing of a cell or tissue donor. Stem cell banking is also subject to State
Regulations. We have been granted a Biologics License from the Department of
Health Services of the State of California. This License permits our current
facility to accept and store cord blood (Stem Cells), whole blood, and various
blood related specimens for cryogenic short and long term storage. We will be
applying for a Tissue Bank License from the Department of Health
Services of the State of California in order that we may accept adipose and
other tissue specimens for short and long term storage.




Registration
with the FDA




On
 December 20th , 2007 we  filed our registration with the Food
and Drug Administration pursuant to 21CFR Parts 207, 807, and 1271 –
“Establishment Registration and Listing for Human Cells, Tissues, and Cellular
and Tissue-Based Products”










California State
licensure




We have
been granted a Biologics License from the Department of Health Services of the
State of California. This License permits our current facility to accept and
store cord blood (Stem Cells), whole blood, and various blood related specimens
for cryogenic short and long term storage. We will be applying for
a Tissue Bank License from the Department of Health Services of the State
of California in order that we may accept adipose and other tissue
specimens for short and long term storage.




We are
aware that despite these plans and the information that we have developed
regarding regulatory and licensing requirements, regulatory and licensing
requirements are subject to continuing changes. The U.S. Food and Drug
Administration (FDA) regulates companies or other businesses engaged in the
manufacture of human tissue or cellular products. Currently, these products must
be manufactured in compliance with the FDA 21CFR part 1271. This regulation
seeks to minimize the risk of transmission of diseases that can be transmitted
due to transplantation or transfusion of human tissue or cellular products such
as hepatitis and HIV. These Federal regulations may have an adverse impact on
the current stem cell banking industry. There is significant cost associated
with compliance to any code of Federal regulations (CFR). Only those companies
that have the financial resources to implement and maintain comprehensive
quality programs for both Good Manufacturing Processes (cGMPs) and Good Tissue
Practice (cGTP) will be able to establish such a business. While we believe that
our plans, if implemented successfully, will allow us to satisfy our obligations
under these regulations, we cannot assure you that we will continue to satisfy
federal and state regulatory requirements or that the cost of satisfying these
and future regulatory requirements can be achieved without undue and
unacceptable expense to us.




The
environmental laws that impact us currently concern the following:




1.
Disposition of biohazardous waste.




2.
Emission control from an electricity generator to be installed for backup power
at the planned facility.




Biohazardous
waste (human tissue, blood and other body fluids) will be disposed of according
to laws of the State of California. State licensed contractors will be
used. The cost of biohazardous waste disposal is proportional to the weight of
biohazardous material generated in a facility. It is estimated that in the
start-up phase of our planned operations that the cost attributable to disposal
of biohazardous waste will be approximately $1000 per month. No other waste
material, such as chemical or radioactive waste will be generated at our planned
facility.





The State
of California requires that all electrical generators utilizing fossil fuels be
in compliance with all State and local clean air requirements. A new generator
will need to be installed at our planned facility that will comply with all
Federal, State and local regulations. No significant budgetary impact is
foreseen on the cost of acquisition of back-up power at our planned facility
that will be in compliance with all local, State and Federal
regulations.




EFFECT OF
EXISTING OR PROBABLE GOVERNMENTAL REGULATIONS ON THE BUSINESS





Evolving
legislation may materially adversely affect our business. The Food and Drug
Administration (FDA) regulates companies or other businesses engaged in the
manufacture of human tissue or cellular products. These products must be
manufactured in compliance with the FDA 21CFR part 1271. This regulation seeks
to minimize the risk of transmission of diseases that can be transmitted due to
transplantation or transfusion of human tissue or cellular products such as
hepatitis and HIV. These Federal regulations may have an impact on the current
stem cell banking industry. There is significant cost associated with compliance
to any code of Federal regulations (CFR). Only those Companies that have the
financial resources to implement comprehensive quality programs for both Good
Manufacturing Processes (cGMPs) and Good Tissue Practice (cGTP) will be able to
establish such a business. There is the possibility that other legislation maybe
enacted which will affect our business.




RESEARCH
AND DEVELOPMENT




During the
twelve months ended September 30, 2008, we expended $ 185,990 on
research and development.  During the twelve months ended September
30, 2007, we expended $ 135,387 on research and development.





NUMBER OF
TOTAL EMPLOYEES AND NUMBER OF FULL TIME EMPLOYEES





As of
December 9 2008 we have 7 total employees who are full time employees.




ITEM 2
- DESCRIPTION OF PROPERTY





In August,
2005, BMSG signed a lease on a 14,562 sq. ft. facility located at 8885 Rehco
Rd., San Diego CA 92121. This facility houses our stem cell processing
and storage laboratories as well as our executive offices.





The
cryogenic storage laboratories, comprising 1050 sq. ft. have been completed. A
central external liquid nitrogen supply system is also now in place at the
facility. In addition, four liquid nitrogen stem cell storage tanks have been
installed.





Adipose
and cellular processing will be performed in Class 100 environments in our 400
sq. ft. Class 10,000 Modular Laboratory which was completed in October 2006.
Cord blood processing will be done in Class 100 environments in our Class
100,000 Laboratory. The facility also has an area for viability testing,
preparatory, receiving, quarantine/ chemical storage, flow cytometry and
microbiology.




To date,
we have completed the following:





January
2006 - Installation and inspection of 2000 liter Perma-Cyl nitrogen tank
complete.





February
2006 - Installation and testing of vacuum jacketed liquid nitrogen piping system
complete.





February
2006 - California Medical Waste Management Plan is completed and accepted by the
state of California.





March 2006
- Installation and validation of computer lock down system and air control
monitors at Sorrento Mesa facility thus completing the Cryogenic Storage
Laboratories.





June 2006
- Delivery, Installation testing and validation of CBS Isothermal liquid
nitrogen vapor storage tank.





November
2006 - Construction and installation of new Stem Cell Class 10,000 Processing
Laboratory has been completed










January to
April 2007





We
purchased the following equipment:


●
            2 ea
      8 ft Laminar Flow Hoods





●
            Labgard
      Laminar Flow Hood 8 ft





●
            Isotemp
      Laboratory Refrigerator





●
            Jaun
      Freezer 80





●
            Centrifuge
      5417 C





●
            Beckman
      Allegra GR Centrifuge





●
            Baxter
      Incubator





●
            Jouan
      Floor Centrifuge





●
            EIO
      Microscope





●
            Mettler
      Toledo PR 5002 Scale





●
            Biohazard
      Dry Keeper





●
            Bigger
      Bill Thermolyne





●
            Isotemp
      220 Bath





●
            2128
      Fraction Collector





●
            10
      ea - Lab Chairs





May to
August 2007





●
            A
      K-Series LN2 Storage Tank was installed in our Cryo Contaminate
      Lab








●
            A
      Centrifuge was installed in Class 10,000 Clean
  Room








●
            A
      Contract signed with Pegasus Building Services for Lab Cleaning
      Services







September
to December 2007





Stainless
Steel Lab Tables were installed in Main Cryo Lab:





●
            A
      Cryo 300 LN2 Storage System installed in Main Cryo
  Lab








●
            A
      CryoPlus 1 LN2 Storage System installed in Main
  Lab








●
            2 ea
      Dry Shippers with shipping cases were  received for Cryo
      Labs








●
            2 ea
      Oxygen Deficiency Monitors were
Received








●
            A
      Computer system with software for Cryo lab
  received








●
            A
      Temperature & Humidity Data Logger was  ordered on November
      14








●
            A
      CBS Controlled Rate Freezer was ordered on November
  26











Between
January 1, 2008 and February 29, 2008 the following equipment has been acquired
and installed:






●
            CBS
      Series 2100 Controlled Rate Freezer (Received January 23rd,
      2008)






●
            Cell
      Dyn 1800 (Received February 7th,
      2008)






●
            4'
      Laminar Air Workstation received Flow Hood received (received February
      19th,
      2008)






●
            3
      Color FACSCablibur (installation set-up and Calibration completed by
      February 20th,
      2008)






●
            Oxygen
      Deficiency Monitors installed (with calibration) in the Company’s two
      Cryogenic Labs (February 20th,
      2008)






●
            Lab
      shipping and receiving computer with software installed (February 21st,
      2008)






●
            Cryogenic
      lab/office computer system installed (February 21st,
      2008)




We
acquired substantially all laboratory equipment which we believe would be
required in order that we may be granted a Tissue Bank License by Department of
Health Services of the State of California.





ITEM 3 -LEGAL
PROCEEDINGS





On October
7, 2008, a  Complaint  (“Complaint”)  was
filed  in the District Court of Clark County Nevada against the
Company,  the Company’s Chairman, and  BMXP (currently named
Freedom Environmental Services, Inc.) (collectively “Defendants”) by Princeton
Research, Inc. (“Princeton”) seeking to recover unspecified General damages in
excess of $10,000, unspecified specific damages, an order from the court
declaring that the defendants fraudulently conveyed assets from BMXP to the
Company, attorney’s fees and cost of suit based on allegations that the sale of
BMSG to the Company as well as the name change and cessation of operations of
BMXP constitute a breach of contract by , fraudulent conveyance
by,  and unjust enrichment of the Defendants. The Company believes
that the allegations in the complaint are without merit and intends to
vigorously defend its interests in this matter.  At this time, it is
not possible to predict the ultimate outcome of these matters.








ITEM 4
- SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS.





None




PART
II




ITEM 5
- MARKET FOR COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS





Market for
Common Shares




Our common
stock is traded on the OTCBB under the symbol "BMSN". Prior to September 5, 2006
our Common Stock traded under the symbol "THII". Below is the range of high
and low bid information for our common equity for each quarter within the
last two fiscal years as reported by Commodity Systems Inc. These quotations
reflect inter-dealer prices, without retail mark-up, mark-down or commission and
may not represent actual transactions.




October
      1, 2006 to September 30, 2007
            High
            LowFirst
      Quarter
            2.00
            .36Second
      Quarter
            .80
            .50Third
      Quarter
            1.20
            .50Fourth
      Quarter
            .18
            .69October
      1, 2007 to September 30, 2008First
      Quarter
            .40
            .10Second
      Quarter
            .63
            .11Third
      Quarter
            1.29
            .35Fourth
      Quarter
            1.02
            .20





Holders




As of
December, 2008 there were approximately 435 holders of our Common
Stock





Dividends




No cash
dividends were paid during the fiscal year ending September 30, 2008. We do not
expect to declare cash dividends in the immediate future.





Recent
Sales of Unregistered Equity Securities





(a)
            Common
      Stock





On July 3,
2008 we issued 905,000 shares of common stock to consultants for services
rendered valued at $769,250.





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.





Between
July 30 and August 30, 2008 we issued 85,087 of common stock to holders our
Convertible Debentures in satisfaction of $21,272 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.





On
September 3, 2008 we issued 50,000 shares of common stock to a consultant for
services rendered valued at $50,000.





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 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
Stock





On July
30, 2008 we issued 90,000 shares of Preferred Stock to a Warrant holder pursuant
the exercise of his warrant for consideration consisting of
$18,000.


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 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.








ITEM 6 -
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.




As of
September 30, 2008, we had $8,410 cash on hand, $550,000 of securities
available for sale and current liabilities of $435,754 such liabilities
consisting of Accounts Payable, Notes Payable, Accrued Payroll Taxes, and
Accrued Interest.




We feel we
will not be able to satisfy its cash requirements over the next twelve months
and shall be required to seek additional financing.




At this
time, we plan to fund our financial needs through operating revenues (which
cannot be assured) and, if required, through equity private placements of common
stock. (No plans, terms, offers or candidates have yet been established and
there can be no assurance that the company will be able to raise funds on terms
favorable to us or at all.) We cannot assure that we will be successful in
obtaining additional financing necessary to implement our business
plan.  We have not received any commitment or expression of
interest from any financing source that has given us any assurance that we
will obtain the amount of additional financing in the future that we currently
anticipate.  For these and other reasons, we are not able to
assure that we will obtain any additional financing or, if we are successful,
that we can obtain any such financing on terms that may be reasonable in light
of our current circumstances.





Over the
next 12 months and if we are successful in obtaining necessary licenses (as
described below), we anticipate opening our stem cell bank and marketing our
disposable stem cell / tissue management instruments





On
December 22, 2007 we submitted our registration to the FDA under the Public
Health Service Act to satisfy the regulatory requirements involving the storage
of stem cells and other tissue. These regulatory requirements apply to all
establishments engaged in the recovery, processing, storage, labeling,
packaging, or distribution of any Human Cells, Tissues, and Cellular and
Tissue-Based Products (HCT/Ps) or the screening or testing of a cell or tissue
donor.  We have obtained our Biologics License for accepting blood for
storage as a blood bank and anticipate filing for a Tissue Bank License from the
Department of Health Services of the State of California in order that we may
accept adipose and other tissue specimens for short and long term
storage.





We do not,
at this time, plan any additional research and development on our line of
medical instruments. We are currently anticipating the granting of utility
patents covering our line of medical instruments, the granting of which cannot
be assured. Upon, and dependent upon, the granting of these utility patents we
anticipate sourcing a manufacturing facility to produce our line of medical
instruments.





Over the
next twelve months and if we are successful in obtaining the necessary
additional financing and obtaining equipment and necessary additional
professional staff, we anticipate purchasing the following significant
laboratory equipment:




In the
event that we are successful in obtaining the amount of the additional
financing that we require on acceptable terms, we currently anticipate that
we will need to add the following additional employees during the twelve
month period thereafter:





Title
            Estimated
      Annual CompensationDirector of
      Labs
            
            $
            120,000Director of
      Quality & Assurance
            
            $
            75,000Adm.
      Director
            
            $
            75,000Dir.
      Of Engineering / Production
            
            $
            85,000Lab
      Tech
            
            $
            65,000Lab
      Tech
            
            $
            65,000Customer
      Service Representative.
            
            $
            45,000Director
      of Market & Sales
            
            $
            100,000Facility
      Manager / Receiving & Shipping
            
            $
            60,000Support
      Staff
            
            $
            50,000Total
            
            $
            740,000











The
Company cannot assure that it will be successful in obtaining additional
financing necessary to implement its business plan.  The Company
has not received any commitment or expression of interest from any
financing source that has given it any assurance that it will obtain the
amount of additional financing in the future that it currently
anticipates.  For these and other reasons, the Company is not able to
assure that it will obtain any additional financing or, if it
is successful, that it can obtain any such financing on terms that may
be reasonable in light of its current circumstances.





We have
not undertaken any efforts to recruit any persons to fill any of the positions
shown above.  We may face protracted difficulties in recruiting
individuals with sufficient experience and skills needed to fill these positions
and we cannot assure  that we  will be successful in
obtaining the necessary persons at the compensations levels shown above or that
we will not incur significant additional expenses to attract, relocate, and
retain any persons that we recruit.




These time
frames and our objectives are subject to change as we review and re-evaluate
market conditions and opportunities.













ITEM 7 -
FINANCIAL STATEMENTS


MOORE
& ASSOCIATES, CHARTERED


ACCOUNTANTS AND
ADVISORS


PCAOB REGISTERED








REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM








To
the Board of Directors


Bio-Matrix
Scientific Group, Inc. and Subsidiaries


(A
Development Stage Company)





We have
audited the accompanying consolidated balance sheet of Bio-Matrix Scientific
Group, Inc. and Subsidiaries (A Development Stage Company) as of September 30,
2008, and the related consolidated statements of operations, stockholders’
equity and cash flows for the year ended September 30, 2008 and since inception
on August 2, 2005 through September 30, 2008. These financial statements are the
responsibility of the Company’s management.  Our responsibility is to
express an opinion on these financial statements based on our
audits.





We conduct
our audits in accordance with standards of the Public Company Accounting
Oversight Board (United States).  Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement.  An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation.  We believe that our audits provide a reasonable basis
for our opinion.





In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Bio-Matrix Scientific Group, Inc.
and Subsidiaries (A Development Stage Company) as of September 30, 2008, and the
related consolidated statements of operations, stockholders’ equity and cash
flows for the years ended September 30, 2008 and since inception on August 2,
2005 through September 30, 2008, in conformity with accounting principles
generally accepted in the United States of America.





The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern.  As discussed in Note 5 to the
financial statements, the Company has an accumulated deficit of $7,186,765
during the period from inception August 2, 2005 through September 30, 2008,
which raises substantial doubt about its ability to continue as a going
concern.  Management’s plans concerning these matters are also
described in Note 5.  The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.








/s/
Moore & Associates, Chartered





Moore
& Associates, Chartered


Las Vegas,
Nevada


December
8, 2008










6490 West Desert Inn Road,
Las Vegas, NV 89146 (702) 253-7499 Fax (702) 253-7501







Chang
G. Park, CPA, Ph. D.


t 371 E STREET t CHULA VISTA t CALIFORNIA
91910-2615t


t TELEPHONE (858)722-5953
t FAX (858)
761-0341  t FAX (858)
764-5480


t E-MAIL changgpark@gmail.com t







Report of
Independent Registered Public Accounting Firm






To
the Board of Directors and Stockholders




Bio-Matrix
Scientific Group, Inc.


(Formerly
Tasco International, Inc.)


(A
Development Stage Company)










We have
audited the accompanying consolidated balance sheets of Bio-Matrix Scientific
Group, Inc. and subsidiary (Formerly Tasco International, Inc.) (A Development
Stage “Company”) as of September 30, 2007 and 2006 and the related consolidated
statements of operations, changes in shareholders’ equity and cash flows for the
year ended September 30, 2007 and for the nine months ended September 30, 2006,
and for the period from August 2, 2005  (inception) to September 30,
2007. These consolidated financial statements are the responsibility of the
Company’s management.





We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation.  We believe that our audit provides a reasonable basis
for our opinion.





In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Bio-Matrix
Scientific Group, Inc. and subsidiary as of September 30, 2007 and 2006, and the
results of its operation and its cash flows for the year ended September 30,
2007 and for the nine months ended September 30, 2006, and for the period from
August 2, 2005  (inception) to September 30, 2007 in conformity with
U.S. generally accepted accounting principles.





The
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’s losses from operations raise
substantial doubt about its ability to continue as a going
concern.  The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.








/s/Chang G.
Park__




CHANG
G. PARK, CPA






December
19, 2007




San
Diego, CA. 91910













BIO-MATRIX
      SCIENTIFIC GROUP, INC. AND SUBSIDIARIES(A
      Development Stage Company)Consolidated
      Balance Sheetas
      ofSeptember
              30,
      2008ASSETSCURRENT
      ASSETSCash
            
            $
            8,410Securities
      Available for sale
            
            
            550,000Pre-paid
      Expenses
            
            
            49,258Total
      Current Assets
            
            
            607,668PROPERTY
      & EQUIPMENT (Net of Accumulated Depreciation)
            
            
            538,868Other
      Assets
            
            
            21,307TOTAL
      ASSETS
            
            $
            1,167,843LIABILITIES
      AND STOCKHOLDERS' EQUITYCURRENT
      LIABILITIESAccounts
      payable
            
            $
            89,974Notes
      Payable
            
            
            111,459Accrued
      Payroll
            
            
            150,000Accrued
      Payroll  taxes
            
            
            29,998Accrued
      Interest
            
            
            24,323Accrued
      expenses
            
            
            30,000Total
      Current Liabilities
            
            
            435,754LONG
      TERM LIABILITIESConvertible
      Note
            
            
            503,400Note
      to Affiliated Party
            
            
            500,000TOTAL
      LIABILITIES
            
            
            1,439,154STOCKHOLDERS'
      EQUITYPreferred
      Stock ($.0001 par value20,000,000
      shares authorized; 5,668,547
            
            
            567issued
      and outstanding as of September 30, 2008)Series
      AA Preferred Stock ($0.0001 par value)100,000
      shares authorized, 4852 issued and outstandingas
      of September 30, 2008Common
      Stock,  ($.0001  par value80,000,000
      shares authorized;  24,870,869shares
      issued and outstanding as of September 30, 2008
            
            
            2,488Additional
      paid in Capital
            
            
            7,631,648Accumulated
      Other Comprehensive Income
            
            
            50,000Deficit
      accumulated during the development stage
            
            
            (7,956,014
            )Total
      Stockholders' Equity (Deficit)
            
            $
            (271,311
            )TOTAL
      LIABILITIES&
      STOCKHOLDERS' EQUITY
            
            $
            1,167,843


The
following Notes are an integral part of these Financial Statements













BIO-MATRIX
      SCIENTIFIC GROUP, INC. AND SUBSIDIARIES
              (A
      Development Stage Company)
              Consolidated
      Statements of OperationsYear
      Ended
              September
              30,
      2008
            
            
            Year
      Ended
              September
              30,
      2007
            
            
            From
      Inception
              (August
              2,2005)
              through
              September
              30,
      2008REVENUESSales
            
            $
            -
            
            
            $
            -
            
            
            $
            -Total
      Revenues
            
            
            -
            
            
            
            -
            
            
            
            -COSTS
      AND EXPENSESResearch
      and Development
            
            
            185,990
            
            
            
            261,077
            
            
            
            657,907General
      and administrative
            
            
            958,882
            
            
            
            1,131,756
            
            
            
            3,415,204Depreciation
      and amortization
            
            
            453
            
            
            
            1,333
            
            
            
            2,668Consulting
      and professional fees
            
            
            1,875,666
            
            
            
            1,035,177
            
            
            
            3,758,532Impairment
      of goodwill & intangibles
            
            
            
            
            
            
            
            
            
            
            34,688Total
      Costs and Expenses
            
            
            3,020,991
            
            
            
            2,429,343
            
            
            
            7,868,999OPERATING
      LOSS
            
            
            (3,020,991
            )
            
            
            (2,429,343
            )
            
            
            (7,868,999
            )OTHER
      INCOME & (EXPENSES)Interest
      Expense
            
            
            (61,183
            )
            
            
            (23,636
            )
            
            
            (87,348
            )Interest
      Income
            
            
            
            
            
            
            306
            
            
            
            306Other
      income
            
            
            100
            
            
            
            
            
            
            
            100Other
      Expense
            
            
            
            
            
            
            (74
            )
            
            
            (74
            )Total
      Other Income & (Expenses)
            
            
            (61,083
            )
            
            
            (23,404
            )
            
            
            (87,016
            )NET
      INCOME (LOSS)
            
            $
            (3,082,074
            )
            
            $
            (2,452,747
            )
            
            $
            (7,956,015
            )BASIC
      AND DILUTED EARNINGS (LOSS) PER SHARE
            
            $
            (0.12
            )
            
            $
            (0.13
            )WEIGHTED
      AVERAGE NUMBER OFCOMMON
      SHARES OUTSTANDING
            
            
            25,184,099
            
            
            
            18,397,245


The
following Notes are an integral part of these Financial Statements









BIO-MATRIX
      SCIENTIFIC GROUP INC. AND SUBSIDIARIES(A
      Development Stage Company)Consolidated
      Statements of Stockholders' EquityFrom
      August 2, 2005 through September 30, 2008Series
      AA
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            Additional
            
            
            
            
            AccumulatedPreferred
            
            
            Preferred
            
            
            
            
            
            Common
            
            
            Paid-in
            
            
            Retained
            
            OtherShares
            Amount
            
            Shares
            
            
            Amount
            
            
            Shares
            
            
            Amount
            
            
            Capital
            
            
            Earnings
            
            Comprehensive
            
            TotalIncome
      (Loss)Shares
      issued to parent
            
            
            
            
            
            
            
            
            
            
            25,000
            
            
            
            35,921
            
            
            
            0
            
            
            
            
            
            
            
            35,921Net
      Loss August 2, 2005
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            0through
      September 30, 2005
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (1,000
            )
            
            
            
            (1,000
            )Balance
      September 30, 2005
            
            
            
            
            
            
            
            
            
            
            25,000
            
            
            
            35,921
            
            
            
            0
            
            
            
            (1,000
            )
            
            
            
            34,921Net
      Loss October 1, 2005
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            0through
      December 31, 2005
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (366,945
            )
            
            
            
            (366,945
            )Balance
      December 31, 2005
            
            
            
            
            
            
            
            
            
            
            25,000
            
            
            
            35,921
            
            
            
            0
            
            
            
            (367,945
            )
            
            
            
            (332,024
            )Recapitalization
            
            
            
            
            
            
            
            
            
            
            9,975,000
            
            
            
            (34,921
            )
            
            
            34,921
            
            
            
            
            
            
            
            
            0Stock
      issued Tasco merger
            
            
            
            
            
            
            
            
            
            
            2,780,000
            
            
            
            278
            
            
            
            (278
            )
            
            
            
            
            
            
            
            0Stock
      issued for services
            
            
            
            
            
            
            
            
            
            
            305,000
            
            
            
            31
            
            
            
            759,719
            
            
            
            
            
            
            
            
            759,750Stock
      issued for Compensation
            
            
            
            
            
            
            
            
            
            
            300,000
            
            
            
            30
            
            
            
            584,970
            
            
            
            
            
            
            
            
            585,000Net
      Loss January 1, 2006through
      September 30, 2006
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (2,053,249
            )
            
            
            
            (2,053,249
            )Balance
      September 30, 2006
            
            
            
            
            
            
            
            
            
            
            13,385,000
            
            
            
            1,339
            
            
            
            1,379,332
            
            
            
            (2,421,194
            )
            
            
            
            (1,040,523
            )Stock
      issued for services
            
            
            
            
            
            
            
            
            
            
            100,184
            
            
            
            10
            
            
            
            112,524
            
            
            
            
            
            
            
            
            112,534Stock
      issued for Compensation
            
            
            
            
            
            
            
            
            
            
            153,700
            
            
            
            15
            
            
            
            101,465
            
            
            
            
            
            
            
            
            101,480Stock
      issued in exchange for canceling debt
            
            
            
            
            
            
            
            
            
            
            2,854,505
            
            
            
            284
            
            
            
            1,446,120
            
            
            
            
            
            
            
            
            1,446,404Net
      Loss October 1, 2006through
      December 31, 2006
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (466,179
            )
            
            
            
            (466,179
            )Balance
      December 31, 2006
            
            
            
            
            
            
            
            
            
            
            16,493,389
            
            
            
            1,649
            
            
            
            3,039,441
            
            
            
            (2,887,373
            )
            
            
            
            153,717Stock
      issued for cash
            
            
            
            
            
            
            
            
            
            
            500,000
            
            
            
            50
            
            
            
            124,950
            
            
            
            
            
            
            
            
            125,000Stock
      issued for services
            
            
            
            
            
            
            
            
            
            
            359,310
            
            
            
            36
            
            
            
            235,042
            
            
            
            
            
            
            
            
            235,078Stock
      issued for Compensation
            
            
            
            
            
            
            
            
            
            
            143,920
            
            
            
            14
            
            
            
            88,400
            
            
            
            
            
            
            
            
            88,414Stock
      issued in exchange for canceling debt
            
            
            
            
            
            
            
            
            
            
            500,000
            
            
            
            50
            
            
            
            124,950
            
            
            
            
            
            
            
            
            125,000Net
      Loss January 1, 2007through
      March 31, 2007
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (515,624
            )
            
            
            
            (515,624
            )Balance
      March 31, 2007
            
            
            
            
            
            
            
            
            
            
            17,996,619
            
            
            
            1,800
            
            
            
            3,612,783
            
            
            
            (3,402,997
            )
            
            
            
            211,585Stock
      issued for cash
            
            
            
            
            
            
            
            
            
            
            240,666
            
            
            
            24
            
            
            
            60,142
            
            
            
            
            
            
            
            
            60,166Stock
      issued for services
            
            
            
            
            
            
            
            
            
            
            406,129
            
            
            
            41
            
            
            
            222,889
            
            
            
            
            
            
            
            
            222,930Stock
      issued for Compensation
            
            
            
            
            
            
            
            
            
            
            150,000
            
            
            
            15
            
            
            
            110,435
            
            
            
            
            
            
            
            
            110,450Stock
      issued in exchange for canceling debt
            
            
            
            
            
            
            
            
            
            
            1,316,765
            
            
            
            132
            
            
            
            329,059
            
            
            
            
            
            
            
            
            329,191Net
      Loss April 1, 2007through
      June 30, 2007
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (718,955
            )
            
            
            
            (718,955
            )Balance
      June 30, 2007
            
            
            
            
            
            
            
            
            
            
            20,110,179
            
            
            
            2,011
            
            
            
            4,335,308
            
            
            
            (4,121,952
            )
            
            
            
            215,367Stock
      issued for cash
            
            
            
            
            
            
            
            
            
            
            1,200,000
            
            
            
            120
            
            
            
            299,880
            
            
            
            
            
            
            
            
            300,000Stock
      issued for services
            
            
            
            
            
            
            
            
            
            
            1,253,000
            
            
            
            125
            
            
            
            404,125
            
            
            
            
            
            
            
            
            404,250Stock
      issued for Compensation
            
            
            
            
            
            
            
            
            
            
            100,000
            
            
            
            10
            
            
            
            24,990
            
            
            
            
            
            
            
            
            25,000Stock
      issued in exchange for canceling debt
            
            
            
            
            
            
            
            
            
            
            566,217
            
            
            
            57
            
            
            
            143,940
            
            
            
            
            
            
            
            
            143,997Net
      Loss July 1, 2007through
      September 30, 2007
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (751,989
            )
            
            
            
            (751,989
            )Balance
      September 30, 2007
            
            
            
            
            
            
            
            
            
            
            23,229,396
            
            
            
            2,323
            
            
            
            5,208,244
            
            
            
            (4,873,941
            )
            
            
            
            336,626Stock
      issued for CashStock
      issued for services
            
            
            
            
            
            
            
            
            
            
            191,427
            
            
            
            19
            
            
            
            62,108
            
            
            
            
            
            
            
            
            62,127Net
      Loss October 1, 2007through
      December 31, 2007
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (405,812
            )
            
            
            
            (405,812
            )Balance
      December 31, 2007
            
            
            
            
            
            
            
            
            
            
            23,420,823
            
            
            
            2,342
            
            
            
            5,270,352
            
            
            
            (5,279,753
            )
            
            
            
            (7,059
            )Stock
      issued for cash
            
            
            
            
            575,000
            
            
            
            57
            
            
            
            
            
            
            
            
            
            
            
            114,942
            
            
            
            
            
            
            
            
            114,999Stock
      issued for services
            
            
            
            
            340,000
            
            
            
            35
            
            
            
            146,705
            
            
            
            15
            
            
            
            106,651
            
            
            
            
            
            
            
            
            106,701Net
      Loss January 1, 2008through
      March 31, 2008
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (417,325
            )
            
            
            
            (417,325
            )Balance
      March 31, 2008
            
            
            
            
            915,000
            
            
            
            92
            
            
            
            23,567,528
            
            
            
            2,357
            
            
            
            5,491,945
            
            
            
            (5,697,078
            )
            
            
            
            (202,684
            )Stock
      issued for cash
            
            
            
            
            2,154,850
            
            
            
            215
            
            
            
            
            
            
            
            
            
            
            
            672,172
            
            
            
            
            
            
            
            
            672,387Stock
      issued for services
            
            
            
            
            1,421,725
            
            
            
            142
            
            
            
            232,000
            
            
            
            23
            
            
            
            613,439
            
            
            
            
            
            
            
            
            613,604Stock
      issued for accrued interest
            
            
            
            
            
            
            
            
            
            
            
            
            31,245
            
            
            
            3
            
            
            
            17,293
            
            
            
            
            
            
            
            
            17,296Stock
      issued as dividend
            
            
            
            
            1,075,087
            
            
            
            108
            
            
            
            
            
            
            
            
            
            
            
            (108
            )
            
            
            
            
            
            
            
            0Net
      Loss April 1, 2008to
      June 30, 2008
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (1,063,446
            )
            
            
            
            (1,063,446
            )Balance
      June 30, 2008
            
            
            
            
            5,566,662
            
            
            
            557
            
            
            
            23,830,773
            
            
            
            2,383
            
            
            
            6,794,741
            
            
            
            (6,760,524
            )
            
            
            
            37,158Stock
      issued for cash
            
            
            
            
            101,667
            
            
            
            10
            
            
            
            
            
            
            
            
            
            
            
            21,489
            
            
            
            
            
            
            
            
            21,499Stock
      issued for services
            
            
            
            
            
            
            
            
            
            
            
            
            955,000
            
            
            
            96
            
            
            
            794,154
            
            
            
            
            
            
            
            
            794,154Series
      AA Preferred Stock issued to Officer
            4,852Stock
      issued for accrued interest
            
            
            
            
            
            
            
            
            
            
            
            
            85,087
            
            
            
            9
            
            
            
            21,263
            
            
            
            
            
            
            
            
            21,272Stock
      issued due to rounding
            
            
            
            
            218
            
            
            
            
            
            
            
            9Net
      Loss July 1, 2008to
      September  30, 2008
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (1,195,491
            )
            
            
            
            (1,195,491
            )Increase
      (Decrease) Accumulated Other Comprehensive Income (Loss)
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            50,000
            
            
            50,000Balance
      September 30, 2008
            4,852
            
            
            
            5,668,547
            
            
            
            567
            
            
            
            24,870,869
            
            
            
            2,488
            
            
            
            7,631,647
            
            
            
            (7,956,015
            )
            50,000
            
            
            (271,408
            )




The
following Notes are an integral part of these Financial Statements














Bio
      Matrix Scientific Group, Inc. and Subsidiaries
              (A
      Development Stage Company)
              Consolidated
      Statements of Cash FlowsFrom
      August 2, 2005(inception)Year
      Ended
            
            
            Year
      Ended
            
            
            throughSeptember
      30, 2008
            
            
            September
      30, 2007
            
            
            September
      30, 2008CASH FLOWS FROM
      OPERATING ACTIVITIESNet
      (loss)
            
            $
            (3,082,074
            )
            
            $
            (2,452,747
            )
            
            $
            (7,956,015
            )Adjustments
      to reconcile net loss to net cash (used in) provided by operating
      activities:Depreciation
      expense
            
            
            453
            
            
            
            1,333
            
            
            
            2,667Stock
      issued for compensation to employees
            
            
            
            
            
            
            325,344
            
            
            
            910,342Stock
      issued for services rendered by consultants
            
            
            1,576,673
            
            
            
            974,792
            
            
            
            3,311,214Stock
      issued for interest
            
            
            38,576
            
            
            
            
            
            
            
            38,568Changes
      in operating assets and liabilities:(Increase)
      decrease in receivables
            
            
            0
            
            
            
            
            
            
            
            0(Increase)
      decrease in prepaid expenses
            
            
            (37,960
            )
            
            
            8,909
            
            
            
            (49,258
            )Increase
      (Decrease) in Accounts Payable
            
            
            80,959
            
            
            
            (82,064
            )
            
            
            89,974Increase
      (Decrease) in Accrued Expenses
            
            
            189,282
            
            
            
            57,155
            
            
            
            264,268Net
      Cash Provided by (Used in) Operating Activities
            
            
            (1,234,091
            )
            
            
            (1,167,278
            )
            
            
            (3,388,240
            )CASH FLOWS FROM
      INVESTING ACTIVITIES(
      Increase) Decrease in Deposits
            
            
            1,785
            
            
            
            6,035
            
            
            
            (21,307
            )Purchases
      of fixed assets
            
            
            (173,998
            )
            
            
            (26,100
            )
            
            
            (541,536
            )Additions
      to Securities Available for Sale
            
            
            (500,000
            )
            
            
            
            
            
            
            (500,000
            )Net
      Cash Provided by (Used in) Investing Activities
            
            
            (672,213
            )
            
            
            (20,065
            )
            
            
            (1,062,843
            )CASH FLOWS FROM
      FINANCING ACTIVITIESPreferred
      Stock issued for cash
            
            
            282
            
            
            
            
            
            
            
            282Common
      stock issued for cash
            
            
            
            
            
            
            194
            
            
            
            1,472Additional
      paid in Capital
            
            
            808,603
            
            
            
            484,972
            
            
            
            1,328,218Principal
      borrowings on notes and Convertible Debentures
            
            
            69,851
            
            
            
            712,112
            
            
            
            930,915Convertible
      notes
            
            
            503,400
            
            
            
            
            
            
            
            503,400Increase
      (Decrease) in Bank Overdraft
            
            
            (11,534
            )
            
            
            11,534
            
            
            
            0Net
      borrowings from related parties
            
            
            
            
            
            
            
            
            
            
            1,195,196Increase
      (Decrease) in Notes from Affiliated party
            
            
            500,000
            
            
            
            
            
            
            
            500,000Net
      Cash Provided by (Used in) Financing Activities
            
            
            1,870,602
            
            
            
            1,208,812
            
            
            
            4,459,483Net
      Increase (Decrease) in Cash
            
            
            (35,702
            )
            
            
            21,469
            
            
            
            8,400Cash
      at Beginning of Period
            
            
            44,110
            
            
            
            22,641
            
            
            
            0Cash
      at End of Period
            
            $
            8,410
            
            
            $
            44,110
            
            
            $
            8,410Supplemental  Cash
      Flow Disclosures:From
      August 2,
              2005Stock
      issued to cancel debt
            
            
            
            
            
            
            2,044,592
            
            
            
            2,044,592Preferred
      stock issued for stock dividend
            
            
            108
            
            
            
            
            
            
            
            108Accumulated
      Other Comprehensive income (Loss)
            
            
            50,000
            
            
            
            
            
            
            
            50,000Total
            
            
            50,108
            
            
            
            2,044,592
            
            
            
            2,094,700


The
following Notes are an integral part of these Financial Statements













BIO-MATRIX
SCIENTIFIC GROUP, INC. AND SUBSIDIARY


(A
Development Stage Company)


Notes to
consolidated Financial Statements


As of
September 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).







NOTE 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





A. BASIS
OF ACCOUNTING





The
financial statements have been prepared using the basis of accounting generally
accepted in the United States of America. Under this basis of accounting,
revenues are recorded as earned and expenses are recorded at the time
liabilities are incurred. The Company has adopted 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.
INVESTMENTS IN MARKETABLE SECURITIES




Investments
in marketable securities are composed of available-for-sale securities. The
Company’s investments are categorized as available-for-sale and recorded at
estimated fair value, based on quoted market prices, or financial models if
quoted market prices are unavailable.  Increases and decreases in fair
value are recorded as unrealized gains and losses in Other Comprehensive
Income.  Realized gains and losses and declines in fair value judged
to be other-than-temporary are included in the Consolidated Statement of
Operations as a Gain/(loss) on sale of investment.





As of
September 30, 2008 Available for sale securities consisted of 1,000,000 common
shares of Freedom Environmental Services, Inc. This asset is classified as
current in that  (a)  it is freely tradable stock absent of any
restrictions on sale  and (b) it is the current intention that this
investment may be liquidated at any time, in whole or in part, at the Company’s
option. The  Note issued by the Company to purchase the
asset  is classified as long term in that it is not due and payable
until November 29, 2009 over one year from issuance





F.
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.





G. 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.





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.






NOTE 3.
PROPERTY AND EQUIPMENT








Property
and equipment as of September 30, 2008 consists of the following:





Acquisition
      cost:
            Estimate
      useful life (year)Production
      Equipment
            3 to
      5
            
            $
            US
            241,884Production
      Clean room
            10
            
            
            
            78,264Leasehold
      improvement
            10
            
            
            
            197,934Office
      equipment
            3 to
      5
            
            
            
            7,250Computer
            3
            
            
            
            16,204Subtotal
            
            
            
            
            541,536Less
      accumulated depreciation
            
            
            
            
            (2,668
            )Total
            
            
            $
            US
            538,868





Depreciation
expenses were $453 and $1333 for the year ended September 30, 2008 and September
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.
INVESTMENTS





Investments
are composed of available-for-sale  equity securities as defined in
SFAS No. 115—Accounting for Certain Investments in Debt and Equity Securities,
or SFAS 115.  At September 30, 2008 our investment portfolio consisted
of 1,000,000 common shares of Freedom Environmental Services, Inc.Increases and decreases in
fair value are recorded as unrealized gains and losses in Other Comprehensive
Income.  Realized gains and losses and declines in fair value judged
to be other-than-temporary are included in the Consolidated Statement of
Operations as a Gain/(loss) on sale of investment. The Company did not possess a
portfolio of securities  during the 2007 fiscal year.





As of
September 30,  2008 Securities Available for Sale consisted of the
following:





Cost
            
            
            Gross
              Unrealized
              Gains
            
            
            GrossUnrealized
              Losses
            
            Estimated
              Fair ValueCorporate
      securities
            
            
            500,000
            
            
            
            50,000
            
            
            
            0
            
            
            550,000Total
      marketable securities
            
            $
            500,000
            
            
            $
            50,000
            
            
            $
            0
            
            $
            550,000





NOTE 4.
WARRANTS AND OPTIONS





On July
17, 2006 the Company signed a public relations agreement with OTCFN which called
for the issuance of an option agreement for 200,000 options exercisable at $4.50
per share. These options expired unexercised six months from the date of
execution of the agreement





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.










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.




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. These warrants were subsequently exercised
in full.





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.













Summary of the Company's warrants as
      of September  30, 2008 and 2007 and changes during the
      periods is as follows:Fiscal
      Year2008
            
            
            
            
            
            
            2007Weighted
      Average
            
            
            
            
            
            Weighted
      AverageWarrants
            
            
            
            Exercise
      Price
            
            
            Warrants
            
            
            Exercise
      PricePreferred
      Stock
            
            
            
            
            
            
            (Common)Outstanding
      at Beginning of Period
            
            
            0
            
            
            
            
            0.3
            
            
            
            200,000
            
            
            
            4.5Granted
            
            
            2,675,741
            
            
            
            
            0.33
            
            
            
            0
            
            
            
            0Exercised
            
            
            -565,000
            
            
            
            
            0.3Expired
      Unexercised
            
            
            -2,099,074
            
            
            
            
            0.3
            
            
            
            200,000
            
            
            
            4.5Outstanding
      at End of period
            
            
            11,667
            
            
            
            
            0.35
            
            
            
            0
            
            
            
            0The
      following table summarizes information regarding Preferred stock purchase
      warrants outstanding at September  30,
  2008Exercise
              Price
            
            Number
              Outstanding
            
            Weighted
      Average
              Remaining
      Contract Life (Days)0.35
            
            11,667
            
            
            14Total
      outstanding as of September 30, 2008
            
            
            
            
            11,667
            
            
            14








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 $7,956,015
during the period from August 2, 2005 (inception) through September 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. Management has
yet to decide what type of offering the Company will use or how much capital the
Company will raise. There is no guarantee that the Company will be able to raise
any capital through any type of offerings.






NOTE 6.
INCOME TAXES





As
      of June 30 , 2008Deferred
      tax assets:Net
      operating tax carry forwards
            
            $
            2,798,120Other
            
            
            -0-Gross
      deferred tax assets
            
            
            2,798,120Valuation
      allowance
            
            
            (2,798,120
            )Net
      deferred tax assets
            
            $
            -0-




As
of  September  30, 2008 the Company has a  Deferred Tax
Asset of  $2,456,630 completely attributable to net operating loss
carry forwards  of approximately $7,994,631 ( 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) $7,
956,015 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.




The
Company is currently indebted in the aggregate amount of $77,940 to Bombardier
Pacific Ventures. These amounts are  callable at par plus any accrued
and unpaid interest by the  upon five days written notice,
and  bears simple interest at 15% maturing, for each amount
lent,  within one year of issuance.





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
September 29, 2008, the Company purchased 1,000,000 of the common shares of
Freedom Environmental Services, Inc. (“FESI shares”)  from Bombardier
Pacific Ventures, Inc. (“Bombardier”) , a company controlled by David Koos , our
Chairman and CEO,  for consideration consisting of a Promissory Note
(“Note”) in the principal amount of $500,000 issued by BMSN to
Bombardier.





Pursuant
to the terms and conditions of the Note, the entire principal amount of $500,000
together with accrued simple interest of 10% per annum, is due and payable to
Bombardier on November 29, 2009.





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.





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




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





(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









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.




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 to holders of the
Company’s Convertible Debentures in satisfaction of $17,296 of accrued
interest.





On July 3,
2008 the Company issued 905,000 shares of common stock to consultants for
services rendered valued at $769,250.





Between
July 30 and August 30 , 2008 the Company issued 85,087 of common stock to
holders of the Company’s Convertible Debentures in satisfaction of $21,272 of
accrued interest.










On
September 3, 2008 the Company issued 50,000 shares of common stock to a
consultant for services rendered valued at $50,000.




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.




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.




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.





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.








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 September 30, 2008:





*
Preferred stock, $ 0.0001 par value; 20,000,000 shares authorized:


5,568,329
Preferred shares issued and outstanding.


4,852
Series AA Preferred Shares issued and outstanding





● Common
stock, $ 0.0001 par value; 80,000,000 shares authorized: 23,965,860 shares
issued and outstanding.





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.




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.







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”).





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
September 30, 2008 -- 1,494,342 shares have been issued pursuant to the
Plan




Number
      ofSharesAs
      of September  30, 2008Granted
            
            
            1,494,342
            *Remaining
      shares available for issuance under the Plan as of September 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
September  30, 2008, 1,500,000 shares have been issued pursuant to the
Plan


Number
      ofSharesAs
      of September  30, 2008:Granted
            
            
            1.500,000Remaining
      shares available for issuance under the Plan as of
      September  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.




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.









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.





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.





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.










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.





NOTE 17.
SUBSEQUENT EVENTS





On October
7,
2008,  a  Complaint  (“Complaint”)  was
filed  in the District Court of Clark County Nevada against the
Company,  the Company’s Chairman, and  BMXP (currently named
Freedom Environmental Services, Inc.) (collectively “Defendants”) by Princeton
Research, Inc. (“Princeton”) seeking to recover unspecified General damages in
excess of $10,000, unspecified specific damages, an order from the court
declaring that the defendants fraudulently conveyed assets from BMXP to the
Company, attorney’s fees and cost of suit based on allegations that the sale of
BMSG to the Company as well as the name change and cessation of operations of
BMXP constitute a breach of contract by , fraudulent conveyance
by,  and unjust enrichment of the Defendants.The Company believes that
the allegations in the complaint are without merit and intends to vigorously
defend its interests in this matter.  At this time, it is not possible
to predict the ultimate outcome of these matters. Accordingly, the Company has
not recorded any expense or liability for potential amounts associated with
these claims.




On October
23, 2008 The Regents of the University of California
(“Regents”)  and  Entest Biomedical, Inc. (“Licensee”) ., a
wholly owned subsidiary of the Company  executed
an  Exclusive License Agreement (“ELA”) .





Pursuant
to the ELA and subject to the limitations set forth in the ELA, The
Regents  granted to Licensee an exclusive license (the "License")
under The Regents’ interest in Provisional Patent Application No. 61/030,316
entitled “SCREENING TEST FOR GESTATIONAL DIABETES MELLITUS” filed 02/21/2008
(UCLA Case No. 2007-523-1) (“Regents Patent Rights”) in jurisdictions where
Regents' Patent Rights exist, to make, have made, use, sell, offer for sale and
import Licensed Products (as “Licensed Products” is defined in the ELA) and to
practice Licensed Methods (as “Licensed Methods” is defined in the ELA) in all
fields of use to the extent permitted by law.





"Licensed
Product", as defined in the ELA,  means any article, composition,
apparatus, substance, chemical, or any other material covered by Regents' Patent
Rights or whose manufacture, use or sale would, absent the license granted under
the ELA, constitute an infringement, inducement of infringement, or contributory
infringement, of any claim within Regents' Patent Rights, or any service,
article, composition, apparatus, chemical, substance, or any other material
made, used, or sold by or utilizing or practicing a Licensed
Method.





"Licensed
Method", as defined in the ELA, means any process, service, or method which is
covered by Regents' Patent Rights or whose use or practice would, absent the
license granted under the ELA, constitute an infringement, inducement of
infringement, or contributory infringement, of any claim within Regents' Patent
Rights.





Pursuant
to the ELA, Licensee shall be obligated to pay to The Regents for sales by
Licensee and sublicensees :





(i) an
earned royalty of Six percent (6%) of Net Sales of Licensed Products or Licensed
Methods.





(ii) a
minimum annual royalty of Fifty thousand dollars ($50,000) for the life of
Regents' Patent Rights, beginning one year after the first commercial sale of
Licensed Product.  The minimum annual royalty will be credited against
the earned royalty due and owing for the calendar year in which the minimum
payment was made.





(iii) pay
to The Regents a license maintenance fee of Five thousand dollars ($5,000)
beginning on the one-year anniversary date of the effective date of the ELA and
continuing annually on each anniversary date of the Effective
Date.  The maintenance fee will not be due and payable on any
anniversary date of the effective date if on that date Licensee is commercially
selling a Licensed Product and paying an earned royalty to The Regents on the
sales of that Licensed Product.





Pursuant
to the ELA, the Licensee is also obligated to:





(a)
diligently proceed with the development, manufacture and sale
("Commercialization") of Licensed Products and must earnestly and diligently
endeavor to market them within a reasonable time after execution of the ELA and
in quantities sufficient to meet the market demands for them.





(b)
endeavor to obtain all necessary governmental approvals for the
Commercialization of Licensed Products.





Unless
otherwise terminated by operation of law or by acts of the parties in accordance
with the terms of the ELA, the ELA remains in effect for the life of the
last-to-expire patent or last to be abandoned patent application in Regents'
Patent Rights, whichever is later.







ITEM 8 -
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE




On October
20, 2008, we dismissed the firm of Chang G. Park, CPA (“Park”) as the Company’s
independent registered public accounting firm. The decision to dismiss Park was
recommended and approved by our board of directors.




Park’s
report of our financial statements for the fiscal year ended September 30, 2007
did not contain any adverse opinion or disclaimer of opinion, nor was modified
as to uncertainty, audit scope, or accounting principles with the exception of
an explanatory paragraph which noted that there was substantial doubt as to our
ability to continue as a going concern.




Park’s
report of our financial statements for the fiscal year ended September 30, 2006
did not contain any adverse opinion or disclaimer of opinion, nor was modified
as to uncertainty, audit scope, or accounting principles with the exception of
an explanatory paragraph which noted that there was substantial doubt as to our
ability to continue as a going concern.




During the
most recent fiscal years ended September 30, 2007 and 2006 and through any
subsequent interim period preceding Park’s dismissal as our independent
accountant on October 20, 2008 there were no disagreements with Park on any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure, which, if not resolved to the former accountant's
satisfaction, would have caused it to make reference to the subject matter of
the disagreement in connection with its report.









None of
the following events occurred within our two most recent fiscal years and the
subsequent interim period preceding Park’s dismissal:




a.




Park
advised us that the internal controls necessary for us to develop reliable
financial statements do not exist;




b.




Park
advised us that information has come to Park’s attention that has led it to no
longer be able to rely on management’s representations, or that has made it
unwilling to be associated with the financial statements prepared by
management;




c.




(1) Park
advised us of the need to expand significantly the scope of its audit, or that
information has come to Park’s attention during such time period that if further
investigated may:




i.




Materially
impact the fairness or reliability of either: a previously issued audit report
or the underlying financial statements; or the financial statements issued or to
be issued covering the fiscal period(s) subsequent to the date of the most
recent financial statements covered by an audit report (including information
that may prevent it from rendering an unqualified audit report on those
financial statements), or




Cause it
to be unwilling to rely on management’s representations or be associated with
the Company’s financial statements, and




(2) Due to
Park’s dismissal or for any other reason, Park did not so expand the scope of
its audit or conduct such further investigation; or




d.




(1) Park
advised us that information has come to Park’s attention that it has concluded
materially impacts the fairness or reliability of either (i) a previously issued
audit report or the underlying financial statements, or (ii) the financial
statements issued or to be issued covering the fiscal period subsequent to the
date of the most recent financial statements covered by an audit report
(including information that, unless resolved to Park’s satisfaction, would
prevent it from rendering an unqualified audit report on those financial
statements), and




(2) Due to
Park's dismissal, or for any other reason, the issue has not been resolved to
Park's satisfaction prior to its dismissal.




(b)
On October 20, 2008, our Board of Directors approved the engagement of Moore
& Associates, Chartered (“Moore”), as our independent auditor and
independent registered public accounting firm. On October, 20, 2008 we engaged
Moore as our independent auditor and independent registered public accounting
firm.  Until the appointment by our Board of Directors, there was no
prior relationship between us and Moore.







ITEM 8A -
CONTROLS AND PROCEDURES





Based on
his evaluation as of September 30, 2008,, our principal executive officer and
principal financial officer, David Koos, has concluded that our disclosure
controls and procedures as defined in Rules 13a-14(c) and 15d-14(c) under the
Securities Exchange Act of 1934 (the Exchange Act) are effective to ensure that
information required to be disclosed by us in reports that we file or submit
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in Securities and Exchange Commission rules and
forms.





There were
no significant changes in our internal controls or in other factors that could
significantly affect these controls subsequent to the date of their evaluation
and up to the filing date of this Annual Report on Form 10-KSB. There were no
significant deficiencies or material weaknesses, and therefore there were no
corrective actions taken.




It should
be noted that any system of controls, however well designed and operated, can
provide only reasonable, and not absolute, assurance that the objectives of the
system are met. In addition, the design of any control system is based in part
upon certain assumptions about the likelihood of future events. Because of these
and other inherent limitations of control systems, there can be no assurance
that any design will succeed in achieving its stated goals under all potential
future conditions, regardless of how remote.





ITEM 8B -
OTHER INFORMATION





Not
Applicable





PART III





ITEM 9
- DIRECTORS, EXECUTIVE OFFICERS,
PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE
ACT





Directors
and executive officers





The
following table sets forth certain information regarding the current Directors
and Executive Officers of the Company as of December 15, 2008. Each
director holds office from election until the next annual meeting of
stockholders or until their successors is duly elected and
qualified.




Name
            
            Age
            
            PositionDavid
      R. Koos
            
            49
            
            Chairman
      of the Board of Directors, President, CEO, Secretary, and Acting
      CFOBrian
      Pockett
            
            53
            
            Vice
      President and COO, Director











David R.
Koos, Ph.D. & DBA (49) - Chairman and CEO, Secretary,  Acting
CFO




Dr. Koos
has served as our CEO, President, Secretary, and Acting CFO since June 19, 2006,
and as Chairman of our board of Directors since June 14, 2006.Over the past five
years, Dr. Koos either is currently, or has previously  been employed as:
Chairman, Chief Executive Officer, Secretary & Acting Chief Financial
Officer of both BMXP Holdings, Inc. and BMSG (December 6, 2004 to Present) ,
Managing Director & President of Cell Source Research Inc.(December 5, 2001
to Present) Managing Director & President of Venture Bridge Inc.( November
21, 2001 to Present) Board Member, Chief Financial Officer& Secretary of
Cell Bio-Systems Inc., a New York corporation currently operating under the name
Franklin Scientific, Inc. (July 17, 2003 to December 1,2003) and as a Registered
Representative of Amerivet Securities, Inc. (March 31, 2004 to Present and also
from November, 2000 to May, 2002). In addition, Dr. Koos has been involved with
investment banking, venture capital, and investor relations for the past 20
years. He has worked with several major Wall Street Investment Banks and was a
Vice-President of Investments with Sutro & Co., Everen Securities and Dean
Witter. Dr. Koos holds the following securities licenses: NASD Series 7 (General
Securities), and Series 24 (Securities Managing Principal).





Dr. Koos'
educational background includes two doctoral degrees. His first doctorate is a
Doctor of Philosophy degree (Ph.D.) in Economic Sociology (2003). Dr. Koos' PhD
studies in Sociology were done at the University of California, Riverside, which
he left prior to completing his Ph.D. degree.





Dr. Koos
completed his Ph.D. studies at Atlantic International University (a
non-accredited institution based in Honolulu, Hawaii) where he was allowed 120
units in transfer credits in support of being admitted on an ABD (All But
Dissertation) basis for a joint PhD/DBA program.  Subsequent to the
transfer credits, he completed an additional 91 units at
Atlantic International University. His dissertation for his Ph.D. in
Sociology, “Examining the Efficacy of Telemarketing Fundraisers as a Venture
Capital Alternative in the Biotechnology Industry.” focused on applied research
in Telemarketing and Venture Capital Fundraising and is available directly
through Atlantic International University.  His second doctorate,
a Doctor of Business Administration (DBA), specialized in Corporate Finance
(2003), focusing on the process of Public Trading, Direct Public Offerings and
Synthetic Reverse Mergers. Both of these degrees are the result of studies and
research completed through Atlantic International University (a non-accredited
institution).The dissertation for Dr. Koos' D.B.A. in Finance was titled
“De-Coupling A Reverse Merger to facilitate a Direct Public Offering's Time to
Market:  A Case Study Testing the value of a Synthetic Reverse Merger in
Achieving Public Trading Status”. Prior to obtaining these two doctoral degrees,
Dr. Koos received a Master of Arts degree in the Economic Sociology from the
University of California, Riverside, California (1983). David R. Koos, our Chief
Executive Officer, has been the subject of the following securities related
regulatory actions:





On June 26
- 28 of 2001 the New York Stock Exchange (NYSE) held an administrative hearing
panel regarding Mr. David Koos' handling of a client's account while he was at
Everen Securities. Mr. Koos has not been employed by Everen over the last five
years.  The panel found Mr. Koos had engaged in excessive, unsuitable and
discretionary trading in a client's account.  The NYSE found Mr. Koos
guilty of the aforementioned and suspended him from association with the NYSE
and its affiliates for a period of 9 months.  On appeal, the Enforcement
Division requested the suspension be 18 months, which was upheld by the Appeal
Board.





The
suspension began on May 10, 2002 at the close of business and lasted until
November 10, 2003. The NYSE took no further action at the end of the suspension.
David Koos' securities licenses (NASD Series 7  and Series 24 ) were
re-instated with Amerivet Securities Inc. on March 31, 2004.
  Amerivet's business is currently on hold as the CEO is on deployment
in Iraq.





On
December 7, 1999 First Union Securities (formerly known as Everen Securities)
and Thomas Monahan settled with Dr. Jan Yanda for the sum of $55,000.The claim
made by Dr. Yanda to the NASD (Case # 98-03797) was that Mr. Monahan and his
then partner David Koos mishandled her account in failing to correctly advise
her on the liquidation of an annuity contract. Dr. Yanda asserted that she was
not aware of any tax consequences in withdrawing funds from her annuity.
 Mr. Koos was named as a result of being in a then partnership with Mr.
Monahan while they worked together at Everen Securities. In the terms of the
settlement, $55,000 was paid to Dr. Yanda by First Union Securities (formerly
Everen Securities) At the time the claim was filed, David Koos was no longer
working for First Union Securities (formerly known as Everen Securities).
 The matter was fully settled by First Union Securities (formerly Everen
Securities) and there are no outstanding issues in this matter.




Education:




DBA -
Finance (December 2003)


Atlantic International University


Non-Accredited
University





Ph.D. -
Sociology (Economic Sociology - September 2003)


Atlantic International University


Non-Accredited
University





MA -
Sociology (Economic Sociology - June 1983)


University
of California - Riverside, California


Fully
Accredited






Five Year
Employment History:


Position:
            Company
      Name:
            Employment
      Dates:






Chairman,
      President, CEO and Acting CFO
            Bio-Matrix
      Scientific Group,Inc.
            June
      14, 2006 (Chairman) to Present
              June
      19, 2006 (President, CEO and Acting CFO)
              June
      19, 2006 (Secretary) to Present






Chairman,
      Chief Executive Officer, Secretary
              &
      Acting Chief Financial Officer
            Frezer
      Inc.
            May
      2, 2005 to February 2007






Chairman,
      Chief Executive Officer, Secretary
              &
      Acting Chief Financial Officer
            BMXP
      Holdings, Inc.
              BMSG
            December
      6, 2004 to Present






Managing
      Director & President
            Cell
      Source Research Inc.
            December
      5, 2001 to Present











Managing
      Director & President
            Venture
      Bridge Inc.
            November
      21, 2001 to Present






Member
      of the Board of Directors, Chief
              Financial
      Officer & Secretary
            Cell
      Bio-Systems Inc.
              (New
      York)
            July
      17, 2003 to December 1, 2003






Registered
      Representative
            Amerivet
      Securities Inc.*
            March
      31, 2004 to Present
              
              (Previously
      employed: November, 2000 to May,
2002)




* Amerivet
Securities Inc. is currently not active as the Chief Executive Officer is on
deployment in Iraq through the U.S. Army Reserves.




Brian
Pockett (53) - Managing Director and COO





Brian
Pockett has served as our Vice President and COO since June 19, 2006 and as a
Director since June 14, 2006. Mr. Pockett has over twenty-nine years of
professional experience in operations, marketing, sales, financial and grant
development.  Prior to assuming his positions with us, Mr. Pockett founded
PD&C, a private consulting firm and has served as a consultant to some of
the largest companies in North America including Disney, SONY, Nintendo, Acclaim
Entertainment and UFO.   Mr. Pocket has not been affiliated with
PD&C during the past five years.  The scope of client projects expanded
into the areas of global distributing, product development, commercialization,
investment and intellectual properties. Mr. Pockett served as an Executive Vice
President of Operations for Metropolis Publications and as Sr. Vice President of
Marketing and Sales for Slawson Communications.




Education:





Ordination
- Ordained Minister


Crestmont College
- Rancho Palos Verdes, CA (Accredited thru
Azusa Pacific University)


June 11,
1979





Advanced
Teachers Training Certificate


Crestmont College
- Rancho Palos Verdes, CA


Evangelical
Teachers Training Association


June 11,
1979





Associate
of Arts - Business




Azusa Pacific University
- Azusa, CA


June
1977





Christian
Education Administration Certificate


George Fox College
- Portland, OR


June
1983








Five Year
Employment History:


Position:
            Company
      Name:
            Employment
      Dates:




Vice
      President, COO and Director
            Bio-Matrix
      Scientific Group, Inc.
            June
      19, 2006 (Vice President and COO) to Present
              June
      14, 2006 (Director) to Present




Managing
      Director & Chief Operating Officer
            Frezer
      Inc.
            May
      2, 2005 to February 2007




Managing
      Director & Chief Operating Officer
            BMXP
      Holdings, Inc.
              BMSG
            December
      6, 2004 to Present




Business
      Development Consultant
            Cell
      Bio-Systems Inc.
              (New
      York)
            April
      1, 2003 to November 30, 2004




Sales
      & Marketing Consultant
            North County
      Times
            July
      1, 2002 to March 15, 2003




Independent
      Magazine Contractor
            DaVinci
            January
      1, 2000 to June 30, 2002




Independent
      Magazine Contractor
            Digital
      Diner
            January
      1, 2000 to June 30, 2002




Independent
      Magazine Contractor
            Shock
      Waves
            January
      1, 2000 to June 30, 2002







Significant
Employees





Geoffrey
O'Neill, PhD (57) - Chief Scientific Advisor





Since
August 9, 2006, Dr. Geoffrey O'Neil, is an independent contractor and not as an
employee, has served as our Chief Scientific Advisor.









Dr.
Geoffrey O'Neill received his Ph.D. in Immunology from the University of Glasgow
in 1973.




In 1974,
he undertook post-doctoral training under the guidance of Dr. Robert A Good (who
performed the first bone marrow transplantation in a patient with
immunodeficiency) at Memorial Sloan-Kettering Cancer Center in
New York. Dr. O'Neill's field of study at Sloan-Kettering was transplantation
immunobiology. Dr. O'Neill was a Research Fellow with Dr. Robert A. Good from
1974 - 1976. No formal certification of this training was provided to any of Dr.
Good's Fellows.




In 1982,
Dr. O'Neill was the recipient of the Jean Julliard Prize for Outstanding
Research. This Award was granted by the International Society of Blood
Transfusion, presented in Budapest, Hungary. The International Society of Blood
Transfusion is a scientific society, founded in 1935 which brings together
professionals involved in blood transfusion and transfusion medicine from more
than 85 countries.





In April
1975, Dr. O'Neill was awarded the JM Foundation Award from the JM Foundation; a
New York based philanthropic organization that makes grants (awards) to various
organizations and institutions. The JM Foundation award is given to post
doctoral trainees by merit of their research. This award, which was given to Dr,
O'Neill while a post doctoral fellow at Memorial Sloan-Kettering Cancer center,
resulted in a grant to Memorial Sloan-Kettering Cancer Center.





Dr.
O'Neill's academic career covers tenures as Visiting Professor, NIH-RCMI
Program, University of Puerto Rico, School of Medicine, San Juan; Associate
Professor of Pathology and Assistant Medical Director, Transfusion Medicine,
University of Miami, Jackson Memorial Hospital; Visiting Professor,
Institute of Immunology, University of Munich, FRG; Associate Professor of
Graduate Medical Sciences, Cornell University School of Medicine New York. Dr.
O'Neill has authored and co-authored over 90 publications of which 87 primarily
focused on the field of bone marrow transplantation and 3, co- authored by Dr.
O'Neill, primarily focused on stem cell biology.  Three publications
were co-authored with Dr. Good, of which one primarily focused on stem cell
biology Dr. O’Neill was employed by Cryo-Cell International as Laboratory and
Scientific Director from April 1999 through July 2003.





Education:





Ph.D. -
Immunology (1973)


University
of Glasgow


Glasgow,
Scotland





B.Sc. -
Microbiology (1970)


University
of Glasgow


Glasgow,
Scotland




Five Year
Employment History:


Position:
            Company
      Name:
            Employment
      Dates:




Chief
      Scientific Advisor
            Bio-Matrix
      Scientific Group, Inc.
            August
      9, 2006 to present




President
            Frezer
      Inc., San Diego , CA
            May
      2, 2005 to present




President
            BMXP
      Holdings, Inc., San Diego, CA
            March,
      2005 to present




Consultant
      in Biotechnology
            Self
      employed, Tarpon Springs FL
            July,
      2004 to March, 2005




Laboratory
      and Scientific Director
            Cryo-Cell
      International Inc, Clearwater, FL
            April,
      1999 to June, 2004




Publications
co- authored by Dr. O'Neill primarily focused on stem cell biology




1. Kagan,
W. A.; O'Neill, G. J.; Incefy, G. S.; Goldstein, G.; Good, R. A.: Induction
 of human granulocyte differentiation in vitro by ubiquitin and
thymopoietin. Blood 50:275, 1977


2. O'Neill
GJ, Yang SY, DuPont B: Two HLA-linked loci controlling human complement C4.
Proc. Natl. Acad Sci. USA 75:5165, 1978


3. Maharaj
D, Lewis-Ximenez, Riley R, Gomez O, and O’Neill GJ: Serum G-CSF levels in
patients undergoing G-CSF/chemotherapy mobilized peripheral stem cell harvest.
Blood 84:1380, 1994





All
journals which have published  articles authored or co- authored by
Dr.O'Neill.





Immunology





Annals of
Immunology





Journal of
Reticuloendothelial Society





Journal of
Immunology





Blood





Cellular
Immunology





Proceedings
of the National Academy of Science (USA)





Nature





Transplantation
Proceedings





New
England Journal of Medicine




Transplantation





Immunobiology










Tissue
Antigens





American
Journal of Human Genetics





Clinical
Immunology and Immunopathology




Family
Relationships





There are
no family relationships between Dr. Koos, Mr. Pockett and Dr.
O'Neill.




Committees:




Plan
Committee, TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS
STOCK COMPENSATION PLAN





On July
25, 2006 we adopted the TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE AND
CONSULTANTS STOCK COMPENSATION PLAN(“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 us or any Parent or Subsidiary of us (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 delegated
directors.





Plan
Committee, BIO-MATRIX SCIENTIFIC GROUP, INC. 2007 EMPLOYEE  AND
CONSULTANTS STOCK COMPENSATION PLAN





On  June
3 , 2007 we 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 us or any Parent or Subsidiary of us ( 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 our 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
our entire Board of Directors , 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 our Articles of Incorporation 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 of our
directors  who are our executive officers , 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.




Audit
Committee.




We do not
have a financial expert serving on our Board of Directors. We are currently in
the process of establishing an Audit Committee and are also in the process of
locating, nominating, and appointing to our Board of Directors one or more
individuals who would qualify as Audit Committee Financial Experts, as that term
is defined in Regulation SB Item 401, to serve on the Audit Committee when
established. Currently, the entire Board of Directors serves as the Audit
Committee.





Involvement
in certain legal proceedings.





During the
past five years, no current officer, director or control person of Bio-matrix
Scientific Group, Inc. has:




·Any
bankruptcy petition filed by or against any business of which such person was a
general partner or executive officer either at the time of the bankruptcy or
within two years prior to that time;




·Any
conviction in a criminal proceeding or being subject to a pending criminal
proceeding (excluding traffic violations and other minor offenses);




·Being
subject to any order, judgment, or decree, not subsequently reversed, suspended
or vacated, of any court of
competent jurisdiction, permanently or temporarily enjoining, barring,
suspending or otherwise limiting his involvement in any type of business,
securities or banking activities; and




·Being
found by a court of competent jurisdiction (in a civil action), the Commission
or the Commodity Futures Trading Commission to have violated a federal or state
securities or commodities law, and the judgment has not been reversed,
suspended, or vacated.





Director's
Compensation.





We do not
provide any Director's Compensation at this time.





Code of
Ethics.





We have
adopted a Code of Business Conduct and Ethics (the “Code”) that applies to our
Directors, officers and employees. The Code is filed as Exhibit A of our
Information Statement Pursuant to Section 14(c) of the Securities Exchange Act
of 1934 filed with the Commission on August 11, 2006 . A written copy of the
Code will be provided upon request at no charge by writing to our Chief
Executive Officer, David Koos, at:





DR. DAVID
KOOS


BIO-MATRIX
SCIENTIFIC GROUP, INC.


8885 REHCO
RD. SAN DIEGO CA 92121.





Section
16(a) Beneficial Ownership Compliance.





Section
16(a) Beneficial Ownership Compliance.


Section
16(a) of the Securities Exchange Act of 1934, as amended, requires our executive
officers and directors and persons who own more than 10% of a registered class
of our equity securities to file with the Securities and Exchange Commission
initial statements of beneficial ownership, reports of changes in ownership and
annual reports concerning their ownership of our common stock and other equity
securities, on Forms 3, 4 and 5 respectively. Executive officers, directors and
greater than 10% shareholders are required by the Securities and Exchange
Commission regulations to furnish us with copies of all Section 16(a)reports
they file. Such persons are further required by SEC regulation to furnish us
with copies of all Section 16(a) forms (including Forms 3, 4 and 5) that they
file. Based solely on our review of the copies of such forms received by us with
respect to fiscal year 2008, or written representations from certain reporting
persons, we believe all of our directors and executive officers met all
applicable filing requirements, except as described in this
paragraph:





BMXP
Holdings Shareholder Business Trust, a beneficial owner of over 10% of our
shares outstanding, filed one late Form 4




Brian
Pockett, an Officer and Director , filed 1 late Form 4





David
Raymond Koos , an Officer Director and beneficial owner of over 10% of our
shares outstanding, filed one late Form 4






10 -
EXECUTIVE COMPENSATION


The
following table sets forth information relating to the annual and long-term
compensation for the fiscal year ended September 30, 2008:





SUMMARY
      COMPENSATION TABLEName
      and principal
              position
            Year
            Salary
      ($)
            Bonus
      ($)
            Stock
      Awards ($)
            Option
              Awards
      ($)
            Non-Equity
      Incentive
              Plan
              Compensation
              ($)
            Nonqualified
              Deferred
              Compensation
              Earnings
      ($)
            All
      Other
              Compensation
              ($)
      (d)
            Total
      ($)Dr.
      David Koos
              Chairman,
      CEO
              and
      President
            October
      1, 2007
              to
      September 30,
              2007
            $7500*
            
            
            
            
            
            $5576
            $13,076Mr.
      Brian Pockett
              Vice
      President,
              COO
      and  Director
            October
      1, 2006
              to
      September 30,
              2008
            $86,200
            
            
            
            
            
            $15,870
            $102,070












The
following table sets forth information relating to the annual and long-term
compensation for the fiscal year ended September 30, 2007:





SUMMARY
      COMPENSATION TABLEName
      and principal
              position
            Year
            Salary
      ($)
            Bonus
      ($)
              (b)
            Stock
      Awards ($)
              (c)
            Option
              Awards
      ($)
            Non-Equity
      Incentive
              Plan
              Compensation
              ($)
            Nonqualified
              Deferred
              Compensation
              Earnings
      ($)
            All
      Other
              Compensation
              ($)
      (d)
            Total
      ($)Dr.
      David Koos
              Chairman,
      CEO
              and
      President
            October
      1, 2006
              to
      September 30,
              2007
            $10,000**
            $8,000
            $197,600
            
            
            
            $4,446
            $220,046Mr.
      Brian Pockett
              Vice
      President,
              COO
      and  Director
            October
      1, 2006
              to
      September 30,
              2007
            $49,000
            $6,400
            $76,550
            
            
            
            $12,800
            $144,750





Currently,
neither of Dr. David Koos or Mr. Brian Pockett is party to an employment
agreement with us.


* Does not
include $150,000  in Accrued Compensation outstanding as of September 30,
2008


** Does
not include $12,000 in Accrued Compensation outstanding as of September 30,
2007.


(b) Bonus
was granted in Common Shares issued pursuant to pursuant to the TASCO HOLDINGS
INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION
PLAN.


(c) Stock
Awards issued pursuant to TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE AND
CONSULTANTS STOCK COMPENSATION PLAN and BIO-MATRIX SCIENTIFIC GROUP, INC. 2007
EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN


(d)
Premiums paid by us for employee’s health insurance.





Neither of
Dr. Koos or Mr. Pockett is party to an executed employment agreement. We are
currently compensating Dr. Koos $12,000 per month for his services, exclusive of
any bonuses or benefits.  We are currently compensating Mr.
Pockett  $7,000  per month for his services, exclusive of
any bonuses or benefits.






ITEM 11
- SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.




The
following table sets forth information as of the close of business on December
9, 2008, concerning shares of our common stock beneficially owned by (i)each
director; (ii) each named executive officer; (iii) by all directors and
executive officers as a group; and (iv) each person known by the Company to own
beneficially more than 5% of the outstanding shares of common
stock.








Title
      of Class
            Name
      and Address of Beneficial Owner
            Amount
      and Nature of Beneficial Owner
            Percent
      of ClassCommon
            David
      R. Koos (a)(b)
              C/o
      Bio-Matrix Scientific Group, Inc
              8885
      REHCO RD. SAN DIEGO CA 92121
            4,585,227
            17%Common
            Brian
      Pockett
              C/o
      Bio-Matrix Scientific Group, Inc
              8885
      REHCO RD. SAN DIEGO CA 92121
            1,810,003
            7%Common
            BMXP
      Holdings Shareholder Business Trust
              1010
      University Ave #40, San Diego, CA
              92103
            250,240Common
            All
      Officers and Directors
              As a
      Group(a)(b)(c)
            6,395,230
            24%




(a)
            Includes
      250,240 Common Shares owned by BMXP Holdings Shareholder Business
      Trust.  David R. Koos is the Trustee of BMXP Holdings
      Shareholder Business Trust.(b) Includes shares owned by Bombardier Pacific Ventures
      Inc., which is wholly owned by David Koos and AFN Trust for which David
      Koos serves as Trustee. (c) Combined holdings of BMXP Shareholder Business
      Trust, David Koos’ direct holdings and Brian Pockett’s direct
      holdings.





The
following table sets forth information as of the close of business on December
9, 2008, concerning shares of our preferred stock beneficially owned by (i)each
director; (ii) each named executive officer; (iii) by all directors and
executive officers as a group; and (iv) each person known by the Company to own
beneficially more than 5% of the outstanding shares of common
stock.








Title
      of Class
            Name
      and Address of Beneficial Owner
            Amount
      and Nature of Beneficial Owner
            Percent
      of ClassPreferred
            David
      R. Koos (a)(b)
              C/o
      Bio-Matrix Scientific Group, Inc
              8885
      REHCO RD. SAN DIEGO CA 92121
            524,073
            9%Preferred
            Brian
      Pockett
              C/o
      Bio-Matrix Scientific Group, Inc
              8885
      REHCO RD. SAN DIEGO CA 92121
            6,723
            *Less
      than 1%Preferred
            BMXP
      Holdings Shareholder Business Trust
              1010
      University Ave #40, San Diego, CA
              92103
            458,503
            8%Preferred
            All
      Officers and Directors
              As a
      Group(c)
            530,776
            9%


(a)
            Includes
      458,503 Preferred  Shares owned by BMXP Holdings Shareholder
      Business Trust.  David R. Koos is the Trustee of BMXP Holdings
      Shareholder Business Trust. (b) Includes shares owned by Bombardier
      Pacific Ventures Inc., which is wholly owned by David Koos  (c)
      Combined holdings of BMXP Shareholder Business Trust, David Koos’ direct
      holdings and Brian Pockett’s direct
holdings.











The
following table sets forth information as of the close of business on December
9, 2008, concerning shares of our Series AA  preferred stock
beneficially owned by (i)each director; (ii) each named executive officer; (iii)
by all directors and executive officers as a group; and (iv) each person known
by the Company to own beneficially more than 5% of the outstanding shares of
common stock.








Title
      of Class
            Name
      and Address of Beneficial Owner
            Amount
      and Nature of Beneficial Owner
            Percent
      of ClassSeries
      AA Preferred
            David
      R. Koos
              C/o
      Bio-Matrix Scientific Group, Inc
              8885
      REHCO RD. SAN DIEGO CA 92121
            4,852
            100%Series
      AA Preferred
            All
      Officers and Directors
              As a
      Group
            4,852
            100%





ITEM 12
- CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS





On June
14, 2006, we and Bio-Matrix Scientific Group, Inc., a Delaware corporation
currently named BMXP Holdings, Inc.(the “Seller”) entered into a Stock Purchase
Agreement (the “Acquisition Agreement”).





On June
14, 2006, our 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





Under the
terms of the Acquisition Agreement and pursuant to a separate Escrow Agreement
between us and the Seller, We 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 and wholly owned subsidiary of
the Seller. 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, our former Chairman and Chief Executive Officer, John Lauring
returned 10,000,000 shares of the Company held and owned by him for
cancellation.




On July 3,
2006, the Acquisition Agreement closed and we acquired the twenty-five thousand
(25,000) shares of the Common Stock of BMSG from the Seller in exchange for the
payment of the purchase price of





(a)
10,000,000 shares of our common stock and





(b) the
return for cancellation of 10,000,000 shares of our stock owned and held by John
Lauring





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, BMSG became our wholly owned subsidiary and
the Seller became the holder of approximately 78.24% of our outstanding common
stock as of the closing of the Acquisition.




On July 3,
2006, the Company the Company changed its principal offices from 23 Brigham
Road, Worcester, MA 01609 to 8885 Rehco Road, San Diego,
California 92121




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 the Seller as well
as beneficial owner of 24% of the share capital of the Seller. 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
the Seller as well as beneficial owner of 14% of the share capital of the
Seller.





On October
11, 2006, we entered into an Agreement with BMXP Holdings, Inc (“BMXP”)
(“Agreement”) pursuant to which we issued to BMXP 1,462,570 common shares of the
Company on or prior to October 12, 2006. This issuance constituted full
satisfaction of the amount of $1,191,619 plus any accrued and unpaid interest,
owed to BMXP by the Company at that time.





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 us
(“Registration Demand”), to cause us, 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 of our common shares  (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 our common
shares  as of a Record Date to be determined by BMXP), and use our
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. As of June 28, 2007 the shares owned by BMXP were
transferred by BMXP to the BMXP Holdings Shareholder Business Trust for the
benefit of BMXP Holdings Inc. shareholders of record May 23, 2007.





On April
4, 2007, 985,168 of our common shares  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.





As of
September 30, 2008 we are  indebted in the aggregate amount of $77,940
to Bombardier Pacific Ventures pursuant to these borrowings. These amounts
are  callable at par plus any accrued and unpaid interest by
the  upon five days written notice, and  bears simple
interest at 15% maturing, for each amount lent,  within one year of
issuance.





On July 3,
2008, we issued 4,852 shares of Series AA Preferred Stock (“AA Stock”) to David
R. Koos, our 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
September 29, 2008, we purchased 1,000,000 of the common shares of Freedom
Environmental Services, Inc. (“FESI shares”)  from Bombardier Pacific
Ventures, Inc. for consideration consisting of a Promissory Note (“Note”) in the
principal amount of $500,000 issued by us to Bombardier.





Pursuant
to the terms and conditions of the Note, the entire principal amount of $500,000
together with accrued simple interest of 10% per annum, is due and payable to
Bombardier on November 29, 2009.




None of
our Directors may be considered independent under the independence standards
applicable to the small business issuer under paragraph (a)(1) of Item407 of
Regulation SB.





ITEM 13
- EXHIBITS





EXHIBIT
INDEX




EXHIBIT
              NUMBER
            
            DESCRIPTION31.1
            
            CERTIFICATION
      BY CEO PURSUANT TO SECTION 302 OF SARBANES OXLEY ACT32.1
            
            CERTIFICATION
      BY CEO PURSUANT TO SECTION 906 OF SARBANES OXLEY ACT31.2
            
            CERTIFICATION
      BY CEO PURSUANT TO SECTION 302 OF SARBANES OXLEY ACT32.2
            
            CERTIFICATION
      BY CFO PURSUANT TO SECTION 906 OF SARBANES OXLEY ACT










ITEM 14
- PRINCIPAL ACCOUNTANT FEES AND
SERVICES





The
following table sets forth the aggregate fees billed to us by Chang G. Park
:





Period
              beginning
              Oct
      1, 2006
              and
      ending
              September
      30,
              2007Audit
      Fees
            
            $
            11,000Audit
      Related Fees
            
            
            4,500Tax
      FeesAll
      Other Fees$
            15,500




Audit Fees: Aggregate fees
billed for professional services rendered for the audit of the Company's annual
financial statements.





Audit Related Fees: Aggregate
fees billed for professional services rendered for assurance and related
services that were reasonably related to the performance of the audit or review
of our financial statements and are not reported under “Audit Fees” above. In
2007 these fees were primarily derived from review of financial statements in
the Company's Form 10QSB Reports.


All
services listed were pre-approved by the Board of Directors, functioning as the
Audit Committee in accordance with Section 2(a) 3 of the Sarbanes-Oxley Act of
2002.





The Board
has considered whether the services described above are compatible with
maintaining the independent accountant's independence and has determined that
such services have not adversely affected Chang G Park's
independence.







Period
      beginning
              Oct
      1, 2007 and
              ending
      September
              30,
      2008Audit
      FeesAudit
      Related Fees
            
            $
            12,000Tax
      FeesAll
      Other Fees$
            12,000




Audit Fees: Aggregate fees
billed for professional services rendered for the audit of the Company's annual
financial statements.





Audit Related Fees: Aggregate
fees billed for professional services rendered for assurance and related
services that were reasonably related to the performance of the audit or review
of our financial statements and are not reported under “Audit Fees” above. In
2006 these fees were primarily derived from review of financial statements in
the Company's Form 10QSB Reports.





All
services listed were pre-approved by the Board of Directors, functioning as the
Audit Committee in accordance with Section 2(a) 3 of the Sarbanes-Oxley Act of
2002.





The Board
has considered whether the services described above are compatible with
maintaining the independent accountant's independence and has determined that
such services have not adversely affected Chang G Park`s
independence.







SIGNATURES





In
accordance with Section 13 or 15(d) of the Securities Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.




In
accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities on the dates
indicated.




BIO-MATRIX
SCIENTIFIC GROUP, INC.





By:
            /s/ David
      R. KoosDavid
      R. KoosChairman,
      CEO and President





Dated:
12/18/08