Company Quick10K Filing
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Entest Group
10-Q 2019-05-31 Quarter: 2019-05-31
10-Q 2019-02-28 Quarter: 2019-02-28
10-Q 2018-11-30 Quarter: 2018-11-30
10-K 2018-08-31 Annual: 2018-08-31
10-Q 2018-05-31 Quarter: 2018-05-31
10-Q 2018-02-28 Quarter: 2018-02-28
10-Q 2017-11-30 Quarter: 2017-11-30
10-K 2017-08-31 Annual: 2017-08-31
10-Q 2017-05-31 Quarter: 2017-05-31
10-Q 2017-02-28 Quarter: 2017-02-28
10-Q 2016-11-30 Quarter: 2016-11-30
10-K 2016-08-31 Annual: 2016-08-31
10-Q 2016-05-31 Quarter: 2016-05-31
10-Q 2016-02-29 Quarter: 2016-02-29
10-Q 2015-11-30 Quarter: 2015-11-30
10-K 2015-08-31 Annual: 2015-08-31
10-Q 2015-05-31 Quarter: 2015-05-31
10-Q 2015-02-28 Quarter: 2015-02-28
10-Q 2014-11-30 Quarter: 2014-11-30
10-K 2014-08-31 Annual: 2014-08-31
10-Q 2014-05-31 Quarter: 2014-05-31
10-Q 2014-02-28 Quarter: 2014-02-28
10-Q 2013-11-30 Quarter: 2013-11-30
8-K 2019-04-09 Accountant, Exhibits
8-K 2018-11-27 Control, Officers
8-K 2018-11-15 Enter Agreement, Leave Agreement, Other Events, Exhibits
8-K 2018-01-11 Amend Bylaw, Exhibits
8-K 2018-01-10 Enter Agreement, Other Events, Exhibits
8-K 2008-10-02 Amend Bylaw, Exhibits
PD PagerDuty 2,922
PPHI Positive Physicians Holdings 43
PLYZ Plyzer Technologies 36
TEAR Tearlab 3
GDFF Global Diversified Futures Fund 0
MTLQQ Motors Liquidation 0
OSMU Original Source Music 0
EXDW Exceed World 0
CRDA Crawford 0
CHTA Wari 0
ENTB 2019-05-31
Part I - Financial Information
Item 1. Financial Statements
Note 1. Organization, Description of Business, and Going Concern
Note 2. Summary of Significant Accounting Policies
Note 3. Related Party Transactions
Note 4. Stockholders' Equity
Note 4. Deconsolidation of Zander Therapeutics, Inc.
Note 5. Disposition of Entest Biomedical, Inc., A California Corporation
Note 6. Income Taxes
Note 7 - Earning (Loss) per Share
Note 8 - Subsequent Events
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-31.1 etni_ex311.htm
EX-32.1 etni_ex321.htm

Entest Group Earnings 2019-05-31

ENTB 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

10-Q 1 etni_10q.htm FORM 10-Q etni_10q.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

(Mark One)

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

 

 

 

For the quarterly period ended May 31, 2019

 

 

or

 

 

¨

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

 

For the transition period from _________________ to _________________

 

Commission File Number 333-154989

 

ENTEST GROUP, INC.

(Exact name of registrant as specified in its charter)

 

Nevada

 

26-3431263

(State or other jurisdiction of incorporation or organization)

 

(IRS Employer Identification No.)

 

No. 911 Bao’an Book City 

Xinqiao Street Central Road, Bao’an District, Shenzhen, China

 

 

(Address of principal executive offices)

 

(Zip Code)

 

86-13709631109

(Registrant’s telephone number, including area code)

 

N/A

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

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

None

None

None

 

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

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). x YES      ¨ NO

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

¨

Accelerated filer

¨

Non-accelerated filer

x

Smaller reporting company

x

Emerging growth company

¨

 

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

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) x YES      ¨ NO

 

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS

 

Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. ¨ YES      ¨ NO

 

APPLICABLE ONLY TO CORPORATE ISSUERS

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

As of July 8, 2019, there were 49,170,472 shares of common stock, par value $0.0001 per share, issued and outstanding.

 

 
 
 
 

TABLE OF CONTENTS

 

PART I - FINANCIAL INFORMATION

 

F-1

 

 

 

 

 

 

 

Item 1.

Financial Statements

 

 

F-1

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

4

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

 

8

 

Item 4.

Controls and Procedures

 

 

8

 

 

 

 

 

 

 

PART II - OTHER INFORMATION

 

 

9

 

 

 

 

 

 

 

Item 1.

Legal Proceedings

 

 

9

 

Item 1A.

Risk Factors

 

 

9

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

 

9

 

Item 3.

Defaults Upon Senior Securities

 

 

9

 

Item 4.

Mine Safety Disclosures

 

 

9

 

Item 5.

Other Information

 

 

9

 

Item 6.

Exhibits

 

 

9

 

 

 

 

 

 

 

SIGNATURES

 

 

10

 

 

 
2
 
Table of Contents

 

PART I – FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

ENTEST GROUP, INC.

 

INDEX TO UNAUDITED INTERIM FINANCIAL STATEMENTS

 

FOR THE PERIOD ENDED MAY 31, 2019

 

 

Page

 

Unaudited Balance Sheets

 

F-2

 

 

Unaudited Statements of Operations

 

F-3

 

 

Unaudited Statements of Stockholders’ Deficit

 

F-4

 

 

Unaudited Statements of Cash Flows

 

F-6

 

 

Notes to the Unaudited Financial Statements

 

F-7

 

F-1
 

 

ENTEST GROUP, INC.

Balance Sheets

(Unaudited)

 

 

 

May 31,

 

 

August 31,

 

 

 

2019

 

 

2018

 

Assets

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

Cash

 

$-

 

 

$267

 

Accrued Interest Receivable

 

 

1,040

 

 

 

1,040

 

Prepaid expenses

 

 

-

 

 

 

8,000

 

Total Current Assets

 

 

1,040

 

 

 

9,307

 

 

 

 

 

 

 

 

 

 

Total Assets

 

$1,040

 

 

$9,307

 

 

 

 

 

 

 

 

 

 

Liabilities And Stockholders' Deficit

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$13,305

 

 

$218,417

 

Unearned rental income

 

 

-

 

 

 

17,000

 

Due to related party

 

 

13,627

 

 

 

-

 

Note payable

 

 

-

 

 

 

19,601

 

Total Current Liabilities

 

 

26,932

 

 

 

255,018

 

 

 

 

 

 

 

 

 

 

Total Liabilities

 

 

26,932

 

 

 

255,018

 

 

 

 

 

 

 

 

 

 

Stockholders' Deficit

 

 

 

 

 

 

 

 

Series AA Preferred stock: 100,000 shares authorized; $0.0001 par value

 

 

 

 

 

 

 

 

667 shares issued and outstanding

 

 

-

 

 

 

-

 

Series AAA Preferred stock: 300,000 shares authorized; $0.0001 par value

 

 

 

 

 

 

 

 

534 shares issued and outstanding

 

 

-

 

 

 

-

 

Series B Preferred stock: 4,400,000 shares authorized; $0.0001 par value

 

 

 

 

 

 

 

 

728,009 shares issued and outstanding

 

 

73

 

 

 

73

 

Non-Voting Convertible Preferred stock: 3,000,000 shares authorized; $1.00 par value;

 

 

 

 

 

 

 

 

1,001,533 shares issued and outstanding

 

 

1,001,533

 

 

 

1,001,533

 

Common stock- 500,000,000 shares authorized; $0.0001 par value

 

 

 

 

 

 

 

 

49,170,472 shares issued and outstanding

 

 

4,917

 

 

 

4,917

 

Additional paid in capital

 

 

9,025,314

 

 

 

9,003,892

 

Accumulated deficit

 

 

(10,057,729)

 

 

(10,256,126)

Total Stockholders' Deficit

 

 

(25,892)

 

 

(245,711)

Total liabilities and Stockholder's Deficit

 

$1,040

 

 

$9,307

 

 

The accompanying Notes are an integral part of these unaudited interim financial statements.

 

 
F-2
 
Table of Contents

 

ENTEST GROUP, INC.

Statements of Operations

(Unaudited)

 

 

 

For the

 

 

For the

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

May 31,

 

 

May 31,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$-

 

 

$-

 

 

$-

 

 

$-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

-

 

 

 

459,584

 

 

 

-

 

 

 

749,584

 

Professional fees

 

 

8,205

 

 

 

80,980

 

 

 

17,039

 

 

 

289,170

 

General and administration

 

 

2,437

 

 

 

93,075

 

 

 

18,629

 

 

 

192,267

 

Total operating expenses

 

 

10,642

 

 

 

633,639

 

 

 

35,668

 

 

 

1,231,021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Loss

 

 

(10,642)

 

 

(633,639)

 

 

(35,668)

 

 

(1,231,021)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Income (Expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental income

 

 

-

 

 

 

15,000

 

 

 

28,000

 

 

 

45,000

 

Gain on write off of accounts payable

 

 

-

 

 

 

-

 

 

 

23,629

 

 

 

-

 

Gain on disposition of Zander

 

 

-

 

 

 

-

 

 

 

188,589

 

 

 

-

 

Refund on amount previously paid

 

 

-

 

 

 

-

 

 

 

1,289

 

 

 

-

 

Interest Income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

132

 

Loss on disposition Entest Biomedical

 

 

-

 

 

 

-

 

 

 

(6,947)

 

 

-

 

Interest expense

 

 

-

 

 

 

(361)

 

 

(495)

 

 

(1,025)

Total Other Income (Expense)

 

 

-

 

 

 

14,639

 

 

 

234,065

 

 

 

44,107

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss) Before Income Tax

 

 

(10,642)

 

 

(619,000)

 

 

198,397

 

 

 

(1,186,914)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax provision

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

$(10,642)

 

$(619,000)

 

$198,397

 

 

$(1,186,914)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic income (loss) per common share

 

$(0.00)

 

$(0.01)

 

$0.00

 

 

$(0.02)

Diluted income (loss) per common share

 

$(0.00)

 

$(0.01)

 

$0.00

 

 

$(0.02)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

49,170,472

 

 

 

49,170,472

 

 

 

49,170,472

 

 

 

49,106,134

 

Diluted

 

 

49,170,472

 

 

 

49,170,472

 

 

 

153,605,613

 

 

 

49,106,134

 

 

The accompanying Notes are an integral part of these unaudited interim financial statements.

 

 
F-3
 
Table of Contents

 

Statements of Stockholders’ Deficit

For the Nine Months Ended May 31, 2019

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-Voting

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Convertible

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Series AA

Preferred

 

 

Series AAA

Preferred

 

 

Series B

Preferred

 

 

Preferred

Convertible

Preferred

 

 

Common Stock

 

 

Additional
Paid In

 

 

Accumulated

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Total

 

Balance August 31, 2018

 

 

667

 

 

$-

 

 

 

534

 

 

$-

 

 

 

728,009

 

 

$73

 

 

 

1,001,533

 

 

$1,001,533

 

 

 

49,170,472

 

 

$4,917

 

 

$9,003,892

 

 

$(10,256,126)

 

$(245,711)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contributed Capital

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

21,422

 

 

 

-

 

 

 

21,422

 

Net income for the period

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

220,011

 

 

 

220,011

 

Balance November 30, 2018

 

 

667

 

 

$-

 

 

 

534

 

 

$-

 

 

 

728,009

 

 

$73

 

 

 

1,001,533

 

 

$1,001,533

 

 

 

49,170,472

 

 

$4,917

 

 

$9,025,314

 

 

$(10,036,115)

 

$(4,278)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss for the period

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(10,972)

 

 

(10,972)

Balance February 28, 2019

 

 

667

 

 

$-

 

 

 

534

 

 

$-

 

 

 

728,009

 

 

$73

 

 

 

1,001,533

 

 

$1,001,533

 

 

 

49,170,472

 

 

$4,917

 

 

$9,025,314

 

 

$(10,047,087)

 

$(15,250)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss for the period

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(10,642)

 

 

(10,642)

Balance May 31, 2019

 

 

667

 

 

$-

 

 

 

534

 

 

$-

 

 

 

728,009

 

 

$73

 

 

 

1,001,533

 

 

$1,001,533

 

 

 

49,170,472

 

 

$4,917

 

 

$9,025,314

 

 

$(10,057,729)

 

$(25,892)

 

The accompanying Notes are an integral part of these unaudited interim financial statements.

 

 
F-4
 
Table of Contents

 

ENTEST GROUP, INC.

Statements of Stockholders’ Deficit

For the Nine Months Ended May 31, 2018

(Unaudited)

 

 

 

 

 

 

 

 

 

Non-Voting

Convertible

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

Non-

 

 

 

 

 

Series AA

Preferred

 

 

Series AAA

Preferred

 

 

Series B

Preferred

 

 

Preferred

Convertible Preferred

 

 

Common Stock

 

 

Additional Paid In

 

 

Accumulated

 

 

Other Comprehensive

 

 

Controlling
Interest In

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

 Capital

 

 

Deficit

 

 

Income (Loss)

 

 

Subsidiary

 

 

Total

 

Balance August 31, 2017

 

 

667

 

 

$-

 

 

 

534

 

 

$-

 

 

 

728,009

 

 

$73

 

 

 

1,026,533

 

 

$1,026,533

 

 

 

46,670,472

 

 

$4,667

 

 

$7,465,656

 

 

$(8,721,496)

 

$185,050

 

 

$56,343

 

 

$16,826

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Shares issued for converison of Non-Voting Convertible Preferred Shares

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(25,000)

 

 

(25,000)

 

 

2,500,000

 

 

 

250

 

 

 

24,750

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Common Shares of subsidiary issued for cash

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

900,000

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

900,000

 

Accumulated Other Comprehensive Income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

43,750

 

 

 

-

 

 

 

43,750

 

Non Controlling Interest in Subsidiary

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(228,345)

 

 

-

 

 

 

-

 

 

 

228,345

 

 

 

-

 

Net loss for the period

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(158,106)

 

 

-

 

 

 

-

 

 

 

(158,106)

Balance November 30, 2017

 

 

667

 

 

$-

 

 

 

534

 

 

$-

 

 

 

728,009

 

 

$73

 

 

 

1,001,533

 

 

$1,001,533

 

 

 

49,170,472

 

 

$4,917

 

 

$8,162,061

 

 

$(8,879,602)

 

$228,800

 

 

$284,688

 

 

$802,470

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Shares of subsidiary issued for cash

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

200,000

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

200,000

 

Common Shares of subsidiary issued for cash

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

300,000

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

300,000

 

Accumulated other comprehensive loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(90,300)

 

 

-

 

 

 

(90,300)

Non Controlling Interest in Subsidiary

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(71,210)

 

 

-

 

 

 

-

 

 

 

71,210

 

 

 

-

 

Net loss for the period

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(409,809)

 

 

-

 

 

 

-

 

 

 

(409,809)

Balance February 28, 2018

 

 

667

 

 

$-

 

 

 

534

 

 

$-

 

 

 

728,009

 

 

$73

 

 

 

1,001,533

 

 

$1,001,533

 

 

 

49,170,472

 

 

$4,917

 

 

$8,590,851

 

 

$(9,289,411)

 

$138,500

 

 

$355,898

 

 

$802,361

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated other comprehensive loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

-

 

 

 

(65,800)

 

 

-

 

 

 

(65,800)

Non Controlling Interest in Subsidiary

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

246,219

 

 

 

 

 

 

 

-

 

 

 

(246,219)

 

 

-

 

Declaration of property Dividend May 5, 2018

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(57,143)

 

 

-

 

 

 

-

 

 

 

(57,143)

Net loss for the period

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

(619,000)

 

 

-

 

 

 

 

 

 

 

(619,000)

Balance May 31, 2018

 

 

667

 

 

$-

 

 

 

534

 

 

$-

 

 

 

728,009

 

 

$73

 

 

 

1,001,533

 

 

$1,001,533

 

 

 

49,170,472

 

 

$4,917

 

 

$8,837,070

 

 

$(9,965,554)

 

$72,700

 

 

$109,679

 

 

$60,418

 

 

The accompanying Notes are an integral part of these unaudited interim financial statements.

 

 
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ENTEST GROUP, INC.

Statements of Cash Flows

(Unaudited)

 

 

 

For the

 

 

 

Nine Months Ended

 

 

 

May 31,

 

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

Cash Flows From Operating Activities:

 

 

 

 

 

 

Net income (loss)

 

$198,397

 

 

$(1,186,914)

Adjustments to reconcile net income (loss) to net cash used in operating activities:

 

 

 

 

 

 

 

 

Loss on disposition Entest Biomedical

 

 

6,947

 

 

 

-

 

Gain on write off of accounts payable

 

 

(23,629)

 

 

-

 

Gain on disposition of Zander

 

 

(188,589)

 

 

-

 

Expenses paid by a related party

 

 

13,627

 

 

 

-

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accrued interest receivable

 

 

 

 

 

 

(132)

Accrued rental income receivable

 

 

(12,000)

 

 

-

 

Accounts payable and accrued expenses

 

 

1,018

 

 

 

218,849

 

Unearned rental income

 

 

(7,730)

 

 

20,000

 

Prepaid expenses

 

 

8,000

 

 

 

(117,388)

Net Cash Used In Operating Activities

 

 

(3,959)

 

 

(1,065,585)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Net cash received for divestiture of Entest Biomedical

 

 

1,937

 

 

 

-

 

Net Cash Provided by Investing Activities

 

 

1,937

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Cash Flows From Financing Activities:

 

 

 

 

 

 

 

 

Contributed capital

 

 

1,821

 

 

 

-

 

Proceeds from common stock issued from subsidiary

 

 

-

 

 

 

1,400,000

 

Repayment of bank overdraft

 

 

(66)

 

 

-

 

Proceed from notes payable

 

 

-

 

 

 

3,000

 

Net Cash Provided by Financing Activities

 

 

1,755

 

 

 

1,403,000

 

 

 

 

 

 

 

 

 

 

Net Change in Cash

 

 

(267)

 

 

337,415

 

Cash at Beginning of Period

 

 

267

 

 

 

86,559

 

Cash at End of Period

 

$-

 

 

$423,974

 

 

 

 

 

 

 

 

 

 

Supplemental Cash Flow Information:

 

 

 

 

 

 

 

 

Cash paid for interest

 

$-

 

 

$-

 

Cash paid for taxes

 

$-

 

 

$-

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of non-cash financing activity

 

 

 

 

 

 

 

 

Debt Satisfied through Contributed Capital

 

$19,601

 

 

$-

 

 

The accompanying Notes are an integral part of these unaudited interim financial statements.

 

 
F-6
 
Table of Contents

 

ENTEST GROUP, INC.

Notes to the Unaudited Financial Statements

As of May 31, 2019

 

NOTE 1. ORGANIZATION, DESCRIPTION OF BUSINESS, AND GOING CONCERN

 

Entest Group, Inc. (the “Company” or “Entest”) was incorporated in the State of Nevada on September 24, 2008 as JB Clothing Corporation. On July 12, 2009, the Company changed its name to Entest BioMedical, Inc. On February 12, 2018 the Company changed its name from Entest BioMedical, Inc. to Entest Group, Inc.

 

The Company’s current business strategy is to acquire an operating company seeking the perceived advantages of being a publicly held corporation. No assurance can be given that such an acquisition shall occur or, if such an acquisition were to occur, it would occur on terms and conditions beneficial to the Company or its shareholders.

 

Change of Control

 

On November 15, 2018, David Koos, Regen BioPharma Inc., Bostonia Partners Inc., Sherman Family Trust, Dunhill Ross Partners Inc., Bio-Technology Partners Business Trust (collectively, the “Sellers”) and Peiwen Yu (the “Buyer”) entered into a stock purchase agreement (the “SPA”), pursuant to which the Sellers agreed to sell and the Buyer agreed to purchase an aggregate of 23,733,334 shares of common stock, 667 shares of Series AA preferred stock, 534 shares of Series AAA preferred stock and 1,001,533 shares of Non-Voting Preferred Stock of Entest from the Seller for an aggregate purchase price of $325,000. The closing of the transactions contemplated by the SPA occurred on November 27, 2018. The purchase price was paid out of the Buyer’s personal funds.

 

As of the date of the transaction, Entest had 49,170,472 shares of common stock, 728,009 shares of Series B Preferred Stock, 667 shares of Series AA Preferred Stock, 534 shares of Series AAA Preferred Stock and 1,001,533 shares of Non-Voting Convertible Preferred Stock outstanding. The securities purchased pursuant to the SPA represent 48.3% of the outstanding shares of common stock, 90% of the outstanding shares of common stock assuming the conversion of the Non-Voting Convertible Preferred Stock on the execution date of the SPA and 94% of the voting power of Entest.

 

As contemplated by the SPA, in November 2018, David Koos resigned as Chairman, Chief Executive Officer, President, Acting Chief Financial Officer and Secretary of Entest and Peiwen Yu became as a director, Chief Executive Officer and President of Entest. Pursuant to the SPA, in November 2018, Mr. Koos also resigned as a director of the Company upon compliance by Entest with information statement delivery requirements pursuant to Rule 14f-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

 

Going Concern and Liquidity Considerations

 

The accompanying unaudited interim financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has not generated any revenues since the change of control and disposition of its subsidiaries, and has an accumulated deficit of $10,057,729. These factors among others raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period of time. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

The continuing operations of the Company are dependent upon its ability to continue to raise adequate financing and to commence profitable operations in the future and repay its liabilities arising from normal business operations as they become due.

 

In support of the Company’s efforts and cash requirements, it may rely on advances from related parties until such time that the Company can support its operations or attains adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support by shareholders or directors.

 

 
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Table of Contents

 

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements and with the instructions to Form 10-Q and Article 8 of Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of the Company’s management, the accompanying unaudited financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of May 31, 2019 and the results of operations, statements of changes in stockholders’ deficit and cash flows for the periods presented. The results of operations for the period ended May 31, 2019 are not necessarily indicative of the operating results for the full fiscal year or any future period. These unaudited interim financial statements should be read in conjunction with the financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended August 31, 2018 filed with the Securities and Exchange (the “SEC”) on November 28, 2018.

 

Reclassifications

 

Certain prior year amounts have been reclassified to conform with the current year presentation.

 

Recent Accounting Pronouncements

 

In October 2018, FASB issued ASU No. 2018-17, Consolidation - Targeted Improvements to Related Party Guidance for Variable Interest Entities (Topic 810). ASU No. 2018-17 guidance eliminates the requirement that entities consider indirect interests held through related parties under common control in their entirety when assessing whether a decision-making fee is a variable interest. Instead, the reporting entity will consider such indirect interests on a proportionate basis. This pronouncement is effective for public entities for fiscal years ending after December 15, 2019, with early adoption permitted. The Company does not expect the adoption to have a material impact on its consolidated financial statements.

 

NOTE 3. RELATED PARTY TRANSACTIONS

 

On July 3, 2018, Zander entered into a sublease agreement with Entest whereby Zander would sublet office space located at 4700 Spring Street, Suite 304, La Mesa, California 91942 from Entest on a month to month basis for $6,000 per month beginning July 5, 2018. On November 16, 2018 Zander Therapeutics Inc. and the Company agreed to terminate Zander’s sublease with the Company effective the rental period commencing November, 2018. David R. Koos, who served as Chairman and Chief Executive Officer of Zander as of that date also served as Chairman and Chief Executive Officer of Entest as of that date. Zander was under common control with Entest as of that date.

 

On November 16, 2018, Entest Group, Inc. and its then Chairman and Chief Executive Officer, David R. Koos, agreed to satisfy any and all unpaid interest resulting from accrued interest earned on Notes Payable to Koos by Entest from the beginning of time to November 30, 2018 by transferring to David R. Koos 3,000,000 shares of the Series M Preferred stock of Zander Therapeutics, Inc. owned by the Company.

 

Entest Group, Inc. and Blackbriar Partners (“BP”) agreed to satisfy any and all unpaid interest resulting from accrued interest earned on Notes Payable to BP by Entest from the Company’s inception to November 30, 2018 by transferring to BP 20,000 shares of the Series M Preferred stock of Zander Therapeutics, Inc. owned by the Company. BP is controlled by David Koos, as of that date, the Company’s then Chairman and Chief Executive Officer.

 

Entest Group, Inc. and the Bio Matrix Scientific Group, Inc. (“BMSN”) agreed to satisfy any and all unpaid interest resulting from accrued interest earned on Notes Payable to BMSN by Entest from the Company’s inception to November 30, 2018 by transferring to BMSN 5,000 shares of the Series M Preferred stock of Zander Therapeutics, Inc. owned by the Company. As of November 16, 2018, David R. Koos was the Chairman and Chief Executive Officer of the Company and BMSN.

 

 
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Table of Contents

 

Entest Group, Inc. and Regen Biopharma, Inc. (“RGBP”) agreed to satisfy any and all unpaid interest resulting from accrued interest earned on Notes Payable to RGBP by Entest from the beginning of time to November 30, 2018 by transferring to RGBP 250,000 shares of the Series M Preferred stock of Zander Therapeutics, Inc. owned by the Company.

 

Entest Group, Inc. and Regen Biopharma, Inc. (“RGBP”) agreed to satisfy any and all rent prepaid by RGBP to Entest from the beginning of time to November 30, 2018 by transferring to RGBP 475,000 shares of the Series M Preferred stock of Zander Therapeutics, Inc. owned by the Company. As of November 16, 2018, David R. Koos was the Chairman and Chief Executive Officer of the Company and RGBP.

 

In November 2018, the Company divested itself of Entest BioMedical, Inc., a California corporation, for consideration consisting of $2,000 paid by an entity controlled by David R. Koos.

 

The Company recognized a loss of $6,947 on the disposition based on the difference between the Net Assets of the subsidiary and the consideration paid.

 

During the period ended May 31, 2019, the Company’s sole officer advanced to the Company an amount of $13,627 by issuing an unsecured and non-interest bearing loan that is payable on demand. As of May 31, 2019 and August 31, 2018, the balance of such loan was $13,627 and $0, respectively.

 

NOTE 4. STOCKHOLDERS’ EQUITY

 

Authorized Stock

 

The Company is authorized to issue an aggregate of 500,000,000 shares of common stock with a par value of $0.0001, 5,000,000 shares of preferred stock with a par value of $0.0001, and 3,000,000 shares of non-voting convertible preferred stock with a par value of $1.00. Each share of common stock entitles the holder to one vote on any matter on which action of the stockholders of the corporation is sought.

 

Series AA Preferred Stock

 

The Company is authorized to issue 100,000 shares of Series AA Preferred Stock at a par value of $0.0001 per share.

 

As of May 31, 2019 and August 31, 2018, 667 shares of Series AA Preferred Stock were issued and outstanding.

 

Series B Preferred Stock

 

The Company is authorized to issue 4,400,000 shares of Series B Preferred Stock at a par value of $0.0001 per share.

 

As of May 31, 2019 and August 31, 2018, 728,009 shares of Series B Preferred Stock were issued and outstanding.

 

Series AAA Preferred Stock

 

The Company is authorized to issue 300,000 shares of Series AAA Preferred Stock at a par value of $0.0001 per share.

 

As of May 31, 2019 and August 31, 2018, 534 shares of Series AAA Preferred Stock were issued and outstanding.

 

Non-Voting Convertible Preferred Stock

 

The Company is authorized to issue 3,000,000 shares of Non-Voting Convertible Preferred Stock at a par value of $1.00 per share.

 

On October 2, 2018, the Company amended Article 4 of its Articles of Incorporation to change the conversion features of the Company’s Non -Voting Convertible Preferred Stock. The Conversion Price changed from being equal to the greater of $0.01 per share or seventy percent (70%) of the lowest closing bid price of its shares of common stock (the “Closing Price”) on its principal trading market or exchange for the five (5) trading days immediately preceding written receipt by the corporation of the holder’s intent to convert to being equal to the greater of (i) $0.001 per share and (ii) seventy percent (70%) of the lowest Closing Price for the five (5) trading days immediately preceding written receipt by the corporation of the holder’s intent to convert.

 

 
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Table of Contents

 

As of May 31, 2019 and August 31, 2018, 1,001,533 shares of Non-Voting Convertible Preferred Stock were issued and outstanding.

 

Common Shares

 

The Company is authorized to issue 500,000,000 shares of Common Stock at a par value of $0.0001 per share.

 

As of May 31, 2019 and August 31, 2018, 49,170,472 shares of Common Stock were issued and outstanding.

 

NOTE 4. DECONSOLIDATION OF ZANDER THERAPEUTICS, INC.

 

On May 5, 2018, The Company declared the distribution on a pro rata basis as a dividend in kind of 3,000,000 of the common shares of Zander Therapeutics, Inc., par value $0.0001, currently owned by Entest Group, Inc. to:

 

(a) Holders of record of the outstanding common shares of the Company as of the record date, which is May 30, 2018.

(b) Holders of record of the shares of any outstanding series of the preferred shares of the Company as of the record date, which is May 30, 2018.

 

Shareholders of the Company shall receive one (1) share of common stock of Zander Therapeutics, Inc. for each 17 shares of the Company’s common and/or preferred stock held as of the record date for such dividend. The distribution of the 3,000,000 common shares of Zander Therapeutics, Inc. to the common and preferred shareholders of the Company occurred on June 11, 2018 (“Distribution Date”).

 

As a result of the payment of the abovementioned property dividend, the Company’s percentage of ownership of Zander fell below 50% resulting in the deconsolidation of Zander as of the Distribution Date. As of the Distribution Date all assets and liabilities attributable to Zander were derecognized by the Company. The Company recognized a $10,034 gain as a result of the deconsolidation. The Property dividend may be deemed to have occurred with a related party as the recipients were shareholders of Entest, including the then Chairman and Chief Executive Officer of Entest and Regen Biopharma, Inc. which was a company under common control with Entest.

 

The Company’s remaining shares of Zander, which consisted of 5,000,000 shares of Zander’s Series M Preferred Stock (“Zander M Stock”) were accounted for under the Equity Method as of the Distribution Date until November 29, 2018. The Zander M Stock was carried a Fair Value and the carrying value was increased by the Company’s proportionate share of earnings of Zander and decreased by cash dividends paid by Zander as well as the Company’s proportionate share of losses of Zander up to the carrying value. As of August 31, 2018, the carrying value of the Zander M Stock was decreased by the Company’s proportionate share of the losses of Zander and was 0. As of August 31, 2018, Entest beneficially owned 34.82% of the share equity of Zander.

 

During the quarter ended November 30, 2018, the Company divested itself of the Zander M Stock as satisfaction of $179,318 of interest accrued but unpaid owed by the Company and $9,270 of unearned rental payments made to the Company. As the Zander M Stock had a carrying value of $0, the Company recognized a gain of $188,589 on the disposition.

 

NOTE 5. DISPOSITION OF ENTEST BIOMEDICAL, INC., A CALIFORNIA CORPORATION

 

During the quarter ended November 30, 2018 the Company divested itself of Entest Biomedical, Inc., a California corporation and wholly owned subsidiary, for consideration consisting of $2,000 paid by an entity controlled by the Company’s then Chairman and Chief Executive Officer, David R. Koos, as full consideration for Entest Biomedical Inc. as well as any and all furniture, fixtures and equipment owned by the Company which has a carrying amount of $0.

 

 
F-10
 
Table of Contents

 

The Company recognized a loss of $6,947 on the disposition based on the difference between the Net Assets of the subsidiary and the Consideration paid.

 

Cash derecognized in Divestiture

 

$(63)

Accrued Rent Receivable Derecognized in Divestiture

 

$(12,000)

Liabilities Derecognized in Divestiture

 

$3,116

 

 

 

 

 

 

Consideration Received in Divestiture

 

$2,000

 

Loss Recognized in Divestiture

 

$(6,947)

 

NOTE 6. INCOME TAXES

 

The Company provides for income taxes under ASC 740, “Income Taxes.” Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax basis of assets and liabilities and the tax rates in effect when these differences are expected to reverse. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.

 

The income tax provision for the periods ended May 31, 2019 and 2018, consists of the following:

 

 

 

May 31,

 

 

May 31,

 

 

 

2019

 

 

2018

 

Net income (loss)

 

$198,397

 

 

$(1,186,914)

Effective tax rate

 

 

21%

 

 

21%

Income tax expense (benefit)

 

 

41,663

 

 

 

(249,252)

Less: valuation allowance

 

 

(41,663)

 

 

249,252

 

Income tax expense (benefit)

 

$-

 

 

$-

 

 

Net deferred tax assets consist of the following components as of May 31, 2019 and August 31, 2018:

 

 

 

May 31,

 

 

August 31,

 

 

 

2019

 

 

2018

 

Net operating tax carryforwards

 

$2,114,989

 

 

$2,156,652

 

Valuation allowance

 

 

(2,114,989)

 

 

(2,156,652)

Net deferred tax asset

 

$-

 

 

$-

 

 

On December 22, 2017, the United States enacted the Tax Cuts and Jobs Act (the “Act”) resulting in significant modifications to existing law including lowering the corporate tax rate from 34% to 21%. In addition to applying the new lower corporate tax rate in 2018 and thereafter to any taxable income we may have, the legislation affects the way we can use and carry forward net operating losses previously accumulated and results in a revaluation of deferred tax assets and liabilities recorded on our balance sheet. The Company has completed the accounting for the effects of the Act during the period ended May 31, 2019. Given that current deferred tax assets are offset by a full valuation allowance, these changes will have no impact on the balance sheet.

 

As of May 31, 2019, the Company had approximately $10,071,376 of net operating loss (“NOL”) carry forwards, the tax effect of which is approximately $2,114,989. These carry forwards begin to expire in 2029.

 

The NOL carry forwards are subject to certain limitations due to the change in control of the Company pursuant to Internal Revenue Code Section 382. The Company experienced a change in control for tax purposes in November 2018 (see Note 1). The Company has not performed a study to determine if the NOL carry forwards are subject to these Section 382 limitations.

 

 
F-11
 
Table of Contents

 

NOTE 7 - EARNING (LOSS) PER SHARE

 

The following is a reconciliation of the numerator and denominator used in the basic and diluted earnings per share ("EPS") calculations.

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

May 31,

 

 

May 31,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$(10,642)

 

$(619,000)

 

$198,397

 

 

$(1,186,914)

Earnings allocated to participating securities

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Income (loss) available to common stockholders

 

$(10,642)

 

$(619,000)

 

$198,397

 

 

$(1,186,914)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average shares of common stock

 

 

49,170,472

 

 

 

49,170,472

 

 

 

49,170,472

 

 

 

49,106,134

 

Dilutive effect of convertible instruments

 

 

-

 

 

 

-

 

 

 

104,435,141

 

 

 

-

 

Diluted weighted-average of common stock

 

 

49,170,472

 

 

 

49,170,472

 

 

 

153,605,613

 

 

 

49,106,134

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per common share from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic:

 

$(0.00)

 

$(0.01)

 

$0.00

 

 

$(0.02)

Diluted:

 

$(0.00)

 

$(0.01)

 

$0.00

 

 

$(0.02)

 

For the three months ended May 31, 2019 and periods ended May 31, 2018, the convertible instruments are anti-dilutive and therefore, have been excluded from earnings (loss) per share.

 

For the nine months ended May 31, 2019, diluted earnings per share is calculated using net income available to common stockholders divided by the diluted weighted average number of common shares outstanding during each period determined using the if-converted method.

 

NOTE 8 - SUBSEQUENT EVENTS

 

Management has evaluated subsequent events through the date these financial statements were available to be issued. Based on our evaluation no material events have occurred that require disclosure.

 

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

 

FORWARD-LOOKING STATEMENTS

 

This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

 

Our unaudited financial statements are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.

 

In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the common shares in our capital stock.

 

As used in this quarterly report, the terms “we”, “us”, “our”, “our company” and “the Company” mean Entest Group, Inc. a Nevada Company, unless otherwise indicated.

 

General Overview

 

We were incorporated in the State of Nevada on September 24, 2008 as JB Clothing Corporation. Until July 10, 2009, our principal business objective was the offering of active/leisure fashion design clothing.

 

On July 10, 2009 the Company abandoned its efforts in the field of active/leisure fashion design clothing when we acquired 100% of the share capital of Entest BioMedical, Inc., a California corporation. During the quarter ended November 30, 2018, the Company divested itself of Entest BioMedical, Inc.

 

The Company changed its name to Entest Group, Inc. on February 12, 2018.

 

Our business and corporate address is No. 911 Bao’an Book City Xinqiao Street Central Road, Bao’an District, Shenzhen, China. We do not have a corporate website.

 

We do not have any subsidiaries.

 

We have never declared bankruptcy, been in receivership, or involved in any kind of legal proceeding.

 

Our Current Business

 

The Company currently does not have any operations and has not actively conducted any operations for the quarter ended May 31, 2019. The Company’s business plan for the next 12 months and beyond such time is to seek new business opportunities or to engage in a business combination with an unidentified company. The analysis of new business opportunities will be undertaken by or under the supervision of the Company’s management. As of the date of this filing, the Company has not entered into any definitive agreement with any party, nor have there been any specific discussions with any potential business combination candidate regarding business opportunities for the Company. There can be no assurance that the Company will be able to identify and acquire any business entity. Even if we successfully acquire a business entity, there is no assurance that we can generate revenue and become profitable.

 

 
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Results of Operations

 

The Company has not conducted any active operations during the quarter ended May 31, 2019. No revenue has been generated by the Company within such period. It is unlikely the Company will have any revenues unless it is able to effect an acquisition or merger with an operating company, of which there can be no assurance. It is management’s assertion that these circumstances may hinder the Company’s ability to continue as a going concern. The Company’s plan of operation for the next twelve months shall be to locate suitable acquisition candidates.

 

For the three months ended May 31, 2019 compared with the three months ended May 31, 2018

 

The following summary of our results of operations should be read in conjunction with our financial statements for the three months ended May 31, 2019, which are included herein.

 

Our operating results for the three months ended May 31, 2019 and the three months ended May 31, 2018 and the changes between those periods for the respective items are summarized as follows:

 

 

 

Three Months Ended

 

 

 

 

 

May 31,

 

 

 

 

 

2019

 

 

2018

 

 

Changes ($)

 

Operating expenses

 

$10,642

 

 

$633,639

 

 

$(622,997)

Other (Income) Expense

 

$-

 

 

$(14,639)

 

$14,639

 

Net Loss

 

$10,642

 

 

$619,000

 

 

$(608,358)

 

The Company has not conducted any operations during the three months ended May 31, 2019. Revenues from operations were $0 for the three months ended May 31, 2019 and 2018.

 

For the three months ended May 31, 2019, operating expenses of $10,642, consisted of professional fees of $8,205, general and administrative expenses of $2,437, resulting in a net loss of $10,642.

 

For the three months ended May 31, 2018, operating expenses of $633,639, consisted of professional fees of $80,980, general and administrative expenses of $93,075, and research and development expenses of $459,584. The other income of $14,639 was attributable to rental income of $15,000 and less interest expense of $361. Net loss for three months ended May 31, 2018 was $619,000.

 

The decrease in net loss for the three months ended May 31, 2019, as compared to the same period ended May 31, 2018, was primarily due to the ceasing of prior operations, disposition of subsidiaries and change of control during the first quarter ended November 30, 2018.

 

 
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For the nine months ended May 31, 2019 compared with the nine months ended May 31, 2018

 

Our operating results for the nine months ended May 31, 2019 and the nine months ended May 31, 2018 and the changes between those periods for the respective items are summarized as follows:

 

 

 

Nine Months Ended

 

 

 

 

 

May 31,

 

 

 

 

 

2019

 

 

2018

 

 

Changes ($)

 

Operating expenses

 

$35,668

 

 

$1,231,021

 

 

$(1,195,353)

Other (Income) Expense

 

$(234,065)

 

$(44,107)

 

$(189,958)

Net Income (Loss)

 

$198,397

 

 

$(1,186,914)

 

$1,385,311

 

 

The Company has not conducted any operations during the nine months ended May 31, 2019. Revenues from operations were $0 for the nine months ended May 31, 2019 and 2018

 

For the nine months ended May 31, 2019, operating expenses of $35,668, consisted of professional fees of $17,039 and general and administrative expenses of $18,629.

 

For the nine months ended May 31, 2019, other income of $234,065, consisted of a gain on write off of accounts payable of $23,629, gain on disposition of Zander Therapeutics, Inc. of $188,589, rental income of $28,000, loss on disposition of Entest Biomedical Inc. of $6,947 and interest expense of $495.

 

The net profit for the nine months ended May 31, 2019 was $198,397.

 

For the nine months ended May 31, 2018, operating expenses of $1,231,021, consisted of professional fees of $289,170, general and administrative expenses of $192,267 and research and development expenses of $749,584.

 

For the nine months ended May 31, 2018, other income of $44,107 consisted of rental income of $45,000 rental income, interest income of $132 and interest expenses of $1,025.

 

The net loss for the nine months ended May 31, 2018, was $1,186,914.

 

The increase in net income for the nine months ended May 31, 2019, as compared to the same period ended May 31, 2018, was primarily due to other income realized, from the ceasing of prior operations, disposition of subsidiaries and change of control during the first quarter ended November 30, 2018.

 

Liquidity and Capital Resources

 

Working Capital

 

 

 

May 31, 2019

 

 

August 31, 2018

 

 

Changes ($)

 

Cash

 

$-

 

 

$267

 

 

$(267)

Working capital deficiency

 

$(25,892)

 

$(245,711)

 

$219,819

 

Total assets

 

$1,040

 

 

$9,307

 

 

$(8,267)

Total liabilities

 

$26,932

 

 

$255,018

 

 

$(228,086)

Total stockholders’ deficit

 

$(25,892)

 

$(245,711)

 

$219,819

 

 

The decrease in working capital deficit was primarily attributed to decreased liabilities from the disposition of prior operations and the change of control occurred in November 2018. As of May 31, 2019, our liabilities decreased $228,086, from $255,018, as of August 31, 2018, to $26,932. The decrease is liabilities is attributable to a decrease in notes payable of $19,601, a decrease of accounts payable and accrued liabilities of $205,112, and a decrease of unearned rental income of $17,000. As of May 31, 2019, our current assets decreased $8,267, from $9,307, as of August 31, 2018, to $1,040. The decrease is primarily attributed to the $8,000 in prepaid expenses at August 31, 2018.

 

 
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Cash Flows

 

 

 

Nine Months Ended

 

 

 

 

 

May 31,

 

 

 

 

 

2019

 

 

2018

 

 

Changes ($)

 

Cash Flows used in Operating Activities

 

$(3,959)

 

$(1,065,585)

 

$1,061,626

 

Cash Flows Provided by Investing Activities

 

$1,937

 

 

$-

 

 

$1,937

 

Cash Flows provided by Financing Activities

 

$1,755

 

 

$1,403,000

 

 

$(1,401,245)

Net Change in Cash During Period

 

$(267)

 

$337,415

 

 

$(337,682)

 

Cash Flow from Operating Activities

 

The net cash used in operating activities for the nine months ended May 31, 2019 was attributed to a net income of $198,397, increased due to an increase in expenses paid by a related party of $13,627 and loss on disposition of Entest Biomedical of $6,947, and decreased by gain on write off of accounts payable of $23,629, gain on disposition of Zander of $188,589 and a net change in operating assets and liabilities of $10,712.

 

The net cash used in operating activities for the nine months ended May 31, 2018 was attributed to a net loss of $1,186,914, decreased by a net change in operating assets and liabilities of $121,329.

 

Cash Flow from Investing Activities

 

Net cash from investing activities was $1,937, for the nine months ended May 31, 2019, derived from proceeds from a net cash received for divestiture of Entest Biomedical.

 

We did not use any funds for investing activities during the nine months ended May 31, 2018.

 

Cash Flow from Financing Activities

 

Net cash from financing activities was $1,755, for the nine months ended May 31, 2019, derived from proceeds from contributed capital offset by bank overdraft, compared to net cash from financing activities of $1,403,000, for the nine months ended May 31, 2018, derived from proceeds from common stock issued from subsidiary of $1,400,000 and proceeds from note payable of $3,000.

 

As of May 31, 2019 and August 31, 2018, we had cash of $0 and $267, respectively.

 

We believe that we will not be able to satisfy our cash requirements over the next twelve months. The Company seeks to acquire an operating company seeking the perceived advantages of being a publicly held corporation. No assurance can be given that such an acquisition shall occur or, if such an acquisition were to occur, it would occur on terms and conditions beneficial to the Company or its shareholders. The Company is also dependent upon the receipt of capital investment or other financing to fund its ongoing operations and to execute its business plan of seeking a combination with a private operating company. In addition, the Company anticipates that it will be dependent upon certain related parties to provide continued funding and capital resources. If continued funding and capital resources are unavailable at reasonable terms, the Company may not be able to implement its plan of operations.

 

Critical Accounting Policies and Estimates

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at dates of the financial statements and the reported amounts of revenue and expenses during the periods. Actual results could differ from these estimates. Our significant estimates and assumptions include depreciation, stock-based compensation and the valuation allowance relating to the Company’s deferred tax assets.

 

 
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Recently Issued Accounting Pronouncements

 

Reference is made to the “Recent Accounting Pronouncements” in Note 2 to the Financial Statements included in this report for information related to new accounting pronouncement, none of which had a material impact on our consolidated financial statements, and the future adoption of recently issued accounting pronouncements, which we do not expect will have a material impact on our consolidated financial statements.

 

Off-Balance Sheet Arrangements

 

As of May 31, 2019, we do not have any off-balance sheet arrangements.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

As a “smaller reporting company”, we are not required to provide the information required by this Item.

 

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act that is designed to provide reasonable assurance that information we are required to disclose in the reports that we file or submit under the Exchange Act are recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedure include, without limitations, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

Pursuant to Rule 13a-15(b) under the Exchange Act, we carried out an evaluation, under the supervision and with the participation of Peiwen Yu, our Principal Executive Officer/Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Our Principal Executive Officer/Principal Financial Officer has concluded that our disclosure controls and procedures were not effective at this reasonable assurance level as of the period covered by this report.

 

Changes in Internal Controls

 

There have been no changes in our internal controls over financial reporting identified in connection with the evaluation required by paragraph (d) of Securities Exchange Act Rule 13a-15 or Rule 15d-15 that occurred in the quarter ended May 31, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 
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PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings

 

From time to time, we may become involved in litigation relating to claims arising out of its operations in the normal course of business. We are not involved in any pending legal proceeding or litigation and, to the best of our knowledge, no governmental authority is contemplating any proceeding to which we area party or to which any of our properties is subject, which would reasonably be likely to have a material adverse effect on us.

 

Item 1A. Risk Factors

 

As a “smaller reporting company”, we are not required to provide the information required by this Item.

 

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

 

None.

 

Item 3. Defaults Upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosures

 

Not Applicable.

 

Item 5. Other Information

 

None.

 

Item 6. Exhibits

 

Exhibit Number

 

Description

(31)

 

Rule 13a-14 (d)/15d-14d) Certifications

31.1*

 

Section 302 Certification by the Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer

(32)

 

Section 1350 Certifications

32.1*

 

Section 906 Certification by the Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer

101*

 

Interactive Data File

101.INS

 

XBRL Instance Document

101.SCH

 

XBRL Taxonomy Extension Schema Document

101.CAL

 

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

 

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

 

XBRL Taxonomy Extension Label Linkbase Document

101.PRE

 

XBRL Taxonomy Extension Presentation Linkbase Document

____________ 

* Filed herewith.

 

 
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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

Entest Group, Inc.

 

 

(Registrant)

 

 

 

 

 

Dated: July 15, 2019

 

/s/ Peiwen Yu

 

 

Peiwen Yu

 

 

Chief Executive Officer and President

 

 

(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

 

 

 

10