Nanalyze

Big Red Flags from Bio-Matrix and Regen Biopharma

In a previous article warning investors against the dangers of over-the-counter stocks, we highlighted 8 patterns followed by many OTC companies that fail and consequently lose investors a great deal of money. One company we came across recently that ticks almost all of these 8 boxes is Bio-Matrix Scientific Group (OTCMKTS:BMSN) and their majority owned subsidiary, Regen Biopharma.

Bio_Matrix_Regen_Logo

 

 

 

About
Incorporated in 1998, Tasco International was involved in producing digital content and media until 2006 when it abandoned those efforts and became Bio-Matrix Scientific Group (OTCMKTS:BMSN). Investors who have been holding this stock since 2006 would have lost -99.77% of their money as of today. Bio-Matrix owns 98% of Regen Biopharma Inc, a company that is “focused on identifying undervalued regenerative medicine applications in the stem cell space”. The Company’s IP consists of US Patent 8,389,708 which was granted to Regen by a member of their advisory board, Weiping Min, and also the exclusive rights to certain RNAi patents from Benitec (ASX:BLT). Bio-Matrix has three employees and a current market cap of $17 million.

According to the last filed 10-K in January 2014, Bio-Matrix has $116,714 in cash and total liabilities of $1.3 million, $612 thousand of these liabilities which are “accrued payroll”. Accrued payroll increased by 98% in 2013, $351, 500 of which was back pay for the $290,000 yearly salary paid to the CEO, David Koos. General and administrative expenses for the year ending September 2013 were $1.3 million, while R&D spending totaled $9,509. The company has 2.95 billion shares outstanding and has issued almost 2 billion shares since December 2012 for indebtedness, accrued interest, accrued salaries, consulting services, etc. It should go without say that the company also has no revenues.

In the latest 10-K and on LinkedIn, the CEO and Chairman of Bio-Matrix, David Koos, is also listed as the CEO, Chairman, President, and CFO of Entest Biomedical since 2009 to present:

David_Koos_LinkedIn

Entest Medical (OTCMKTS:ENTB) is an over-the-counter (OTC) company with 1.5 billion shares outstanding and a current share price of .0005. That equates to a current market cap of $576,000. If you bought shares in Entest exactly 1 year ago, you would have already lost -90% of your investment.

Entest_Chart

You may ask just who would invest in this “company” given the vast amount of conspicuous red flags observed in the 10-K, however as of December 2013, there were 463 investors still holding shares in Bio-Matrix. These investors should review our list of consistent patterns followed by OTC companies  that fail:

  1. Founded through reverse merger? Yes
  2. Possesses patent(s) that is offered as proof of potential? Yes
  3. Talks about an exciting opportunity as opposed to actual progress made? Yes
  4. Touted on stock boards? Yes
  5. Constructive criticism met with accusations of short selling? Yes
  6. Lack of significant (or any) revenues? Yes
  7. Identify other technology focus when all else fails? TBD
  8. Issuing shares until share price collapses? Well on its way

It goes without say that having senior management who are affiliated with failed OTC companies in the past should be a big warning flag as well. While Bio-Matrix (OTCMKTS:BMSN) investors may believe they are investing in a disruptive technology company, in fact it appears that this could not be farther from the truth.

Are you paying too much in transaction fees to your broker? Check out a brokerage firm called Zacks Trade that's offering $1 trades on U.S. stocks and options for an entire year. After that, you'll pay just $3 a trade or a penny a share, whichever is greater. It's one of the cheapest brokers out there and we use them to trade stocks on over 90 foreign stock exchangesOpen an account today and get $1 trades for a year.

  • AshMats

    Mr. Koos has a good taste in watches. That’s a nice Rolex. You may want to add a number 9. Any stock with a share price less than a penny is a sure sign of a pump-and-dump.

    • Nanalyze

      Thank you for the note AshMats. While the actual stock price is irrelevant since market cap is a function of shares X price, it is to be noted that no company that trades at a fraction of a penny should be taken seriously by investors. Swing traders, maybe. Investors, definitely not.

  • GMayes

    I participate in the Investors Hub forum where this is discussed. I can tell you that I have never seen such a pump in my life. There must be at least 50 “cheerleaders” on that site that mock, deride, and belittle anyone who posts ANYTHING that even suggests Bio-Matrix is not the next Microsoft. So I’ll post this here instead.

    Here’s something from the BMSN 10-Q files last month you can add to the growing list of evidence that points to a pump and dump…

    —————————————————————-
    On April 12, 2013 a complaint (Complaint) was filed in the U.S. District Court Southern District of the State of new York against the Company, the Company’s Chairman and Does 1-50 by Star city Capital, LLC (“Plaintiff”) alleging securities fraud, common law fraud, negligent misrepresentation, breach of fiduciary duties and breach of contract in connection with the issuance of . The Plaintiff is also request declaratory relief from the Court.
    —————————————————————-
    They’ve been involved in a number of other lawsuits in the past as well if you look through their filings.

    Thank you for doing the investment community a service by outing these scams. My father invested money in these once, money he couldn’t afford to lose, and bought some lout a yacht with the money he spent his entire life earning.

    • Nanalyze

      Thank for for your note Gmayes. Note that our article presents facts about Bio-Matrix taken from their own SEC filings. There is no concrete evidence that Bio-Matrix is a pump-and-dump, however the facts we have presented raise far too many red flags for any investor to take this company seriously.

  • homeskillett

    Dumped 4000,000 today. Article far too scary. Should have dumped a week ago, would have had decent gains. Although I made very little. Glad to make something.

    Thanks for. The article

    • Nanalyze

      We’re glad you found the article useful. One thing you may want to take note of is that several days ago the OTC Markets announced that they will introduce a new minimum one-cent bid price requirement for OTC stocks. Of course there will be a period of time for companies to come into compliance with this new requirement but it does not bode well for stocks such as Bio-Matrix that are well under a penny. This goes back to the point Ashmats made earlier regarding the fact that any stock trading under a penny with volume and price action is most likely a pump and dump and shouldn’t be taken seriously by investors. Below is the Reuters article on this new requirement:

      http://mobile.reuters.com/article/idUSL1N0MN13N20140326?irpc=932

  • Shinster

    I wish I saw this way before hand and published earlier :(, I still hold 40k shares and trying to get out without losing much money 🙁 and to think that i just started to invest :(, i dumpt Entest at a loss and didn’t realize that owned / manage by the same guy as Bio-Matrix

    I guess I’m paying a lesson on investments :(, I checked his bio (should’ve done this before hand) and all i see is that he is taking multiple ranks as CEO, CFO, so on so on on (looks like a 1 man show) but no achievement what so ever

    They give “Special Dividend” to BMSN holder but so far it’s worthless and cannot be sold ….

    Saw something interesting yesterday, their share price went out from 0.004 to 0.005 then 0.0055 within a few seconds then back down to where it was, I thought something happened but I guess it was just being manipulated 🙁

    • Devin

      Lmao “special dividend you say” haha. You mean rgbp. I made 7 grand off that…what you say worthless dividend. Lol. You should learn the game before endlessly bashing something..when your bad at it.

      • Nanalyze

        BMSN has lost 80% of its value in 6 months. RGBP is no longer trading. It’s certainly possible for speculators to get lucky by betting on an OTC stock for a limited period of time, but long-term investors will almost always end up losing all their money as we see in this case.

        • Rob

          RGBP most certainly still is trading… not sure what your angle is but telling falsehoods isn’t a great way to get readers.

  • gotinearly

    LOL, so how many shares are you short?

    • Nanalyze

      As mentioned in the “About Us” section, we will never short any stock discussed on this site. Please also refer to our below article on the dangers of OTC stocks:

      https://www.nanalyze.com/2013/08/the-dangers-of-over-the-counter-otc-stocks/

      In that article we note that constructive criticism of an OTC company is often met with accusations of short selling when in fact the short selling of OTC stocks is very difficult and rare. The same article contains a link to an academic paper that elaborates on this.

      • Shinster

        Thank you Nanalyze, it was very helpful

        • VEGASDRUMMER

          What you did not mention about BMSN was:
          Regen BioPharma Files Investigational New Drug (IND) Application With FDA on HemaXellerate I(TM) Stem Cell Drug for Aplastic Anemia Clinical Trial to Evaluate “First in Class” Approach to Bone Marrow Failure Diseases. Regen BioPharma a wholly-owned subsidiary of Bio-Matrix Scientific Group Inc. hAS A Investigational New Drug (IND) application with the FDA to initiate clinical trials assessing the company’s HemaXellerate I™ stem cell drug in patients with drug-refractory aplastic anemia.
          HemaXellerate I™ is a patient-specific composition of cells that have previously been demonstrated to repair damaged bone marrow and stimulate production of blood cells based on previous animal studies. The company, together with an internationally-renowned group of stem cell researchers, recently published the scientific basis for the HemaXellerate
          Currently patients with aplastic anemia who are resistant to drugs and ineligible for bone marrow transplant have no therapeutic options. We are fortunate to be in the position to have developed a novel approach to potentially treat this terrible condition,” said David Koos, CEO of Bio-Matrix. “To our knowledge the HemaXellerate I™ product is the only therapy that has potential to simultaneously block the underlying cause of aplastic anemia while at the same time rebuilding the bone marrow tissue that has been damaged by the disease.”Current drug-based approaches for healing bone marrow damage involve “flooding” the body with growth factors, which is extremely expensive and causes unintended consequences because of lack of selectivity,” said Dr. Vladimir Bogin, CEO of Chromos Pharma (a contract research organization), which collaborated with Regen on filing the IND and member of the Company’s Scientific Advisory Board. “Based on our data HemaXellerate I™ possesses the advantage delivering an optimized cellular mixture that produces the needed growth factors at the specific location in the bone marrow niche.”

          • Nanalyze

            The below is the definition of an IND:

            Current Federal law requires that a drug be the subject of an approved marketing application before it is transported or distributed across state lines. Because a sponsor will probably want to ship the investigational drug to clinical investigators in many states, it must seek an exemption from that legal requirement. The IND is the means through which the sponsor technically obtains this exemption from the FDA.

            Even if Bio-Matrix receives an approval that allows them to ship the drug to clinical investigators across state lines, David Koos does not have the best track record when it comes to executing. In September of 2012, Mr. Koos as CEO of Entest announced that the Company’s business plan involved acquiring veterinary clinics/hospitals to be utilized as potential distribution channels for its canine cancer products under development. As of Feb 28, 2014, Entest had $28,000 in assets and cash on hand $1,293. Shareholders of Entest who bought into that ambitious plan would have already lost 85% of their investment.

  • Shinster

    I lost almost 70% on Entest and that amount of assets and cash is really troubling considering what they want to do.
    Next company that will be promoted I think is Regen and again Mr Koos is in charge, the special dividend that was given to BMSN owner is pretty much worthless (you can’t sell it) and someone informed me that it is only worth $0.0044 a share

    • Nanalyze

      Asset managers are restricted to investing only in assets belonging to the indexes they benchmark. Entry into these indices typically requires stringent rules regarding capitalization, and of course having a listing on a major exchange. This is one of the reason why stocks with no cash or assets trade on the over-counter-exchange and should generally be avoided by investors.

      • Shinster

        what i don’t understand is how come a company with only that little assets and cash can be developing a canine cancer products?

        anyhow, i found articles here are very informational and useful, is there a way that i can subscribe to nanalyze for news or new article?

        thank you again for everything, i just wish i found this much earlier

        • Nanalyze

          Thank you for the comment. You have been added to the weekly newsletter.

  • ioannis kyziridis

    can i please be added on the newsletter?
    thanks

    • Nanalyze

      You have been subscribed to our newsletter Ioannis.

      • ioannis kyziridis

        thanks

  • John

    It’s NOW June and things are picking up. More Doctors are being recruited into assisting RGBP/BMSN with an experienced CFO. The charts is warming up. It’s getting exciting!

    • Jeff

      No it’s not! It’s sept 29, 2016 and it’s STILL A SCAM! can’t even dump the stock I would owe more money for the sales exchange

  • Thomas Ichim

    Through the support of investors we where able to successfully file and clear IND with the FDA for a new treatment for aplastic anemia called HemaXellerate. We were able to publish the rationale behind HemaXellerate in the peer-reviewed literature with major names, and subsequently use it in a pilot trial that yielded promising results.

    Additionally, we recruited Dr. Harry Lander, previously Vice Provost of Cornell University as President and CSO

    So while blogs like yours may always see the negative….the investment into BMSN and subsequently Regen advanced science and helped bring new drug candidates from “bench to bedside”.

  • Joe

    Thomas Ichim is a liar…ain’t that right Doktor Tommy??

    Remember me?? We’ll meet in a courtroom.

Don’t have your M.D.?

We can help. Our MBAs will keep you informed about life sciences.