10-Q: Regen Biopharma Q2 2026: Derivative Gains Boost Net Income

Regen Biopharma reported a net profit of $991,927 for Q2 2026, a significant turnaround from a net loss of $19,354 in the prior year, largely driven by derivative income.

Summary

• Regen Biopharma's Q2 2026 results show a net profit of $991,927, a substantial improvement from a net loss of $19,354 in Q2 2025.
• This turnaround is primarily attributed to a significant increase in derivative income, which rose to $1,181,680 in Q2 2026 from $128,963 in Q2 2025.
• Total operating expenses increased to $212,774 in Q2 2026 from $172,414 in Q2 2025, driven by higher consulting and professional fees.
• The company reported net revenue of $59,065 for both Q2 2026 and Q2 2025.
• As of March 31, 2026, the company has a cash balance of $271 and a working capital deficit of approximately $5.3 million, highlighting ongoing liquidity concerns.
• The company continues to rely on external funding through equity or debt offerings to sustain operations and development plans.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this filing as having a negative sentiment due to the company's precarious liquidity position, ineffective disclosure controls, and substantial doubt about its ability to continue as a going concern, despite a reported net profit driven by derivative gains.

Positives

• Achieved a net profit of $991,927 in Q2 2026, a significant improvement from a net loss in the prior year.
• Substantial increase in derivative income, contributing positively to the net profit.
• Net revenue remained stable at $59,065 for both Q2 2026 and Q2 2025.
• Working capital deficit decreased by $742,315 from September 30, 2025, to March 31, 2026, primarily due to a decrease in derivative liability.

Negatives

• Significant operating loss of $153,709 in Q2 2026, compared to $113,349 in Q2 2025, due to increased operating expenses.
• Very low cash balance of $271 as of March 31, 2026.
• Substantial working capital deficit of approximately $5.3 million as of March 31, 2026.
• Disclosure controls and procedures were deemed ineffective.
• The company has incurred recurring losses and negative cash flows from operations since inception.

Risks

• Substantial doubt persists regarding the company's ability to continue as a going concern due to recurring losses, negative cash flows, and dependence on external financing.
• Failure to obtain sufficient working capital may compel the company to reduce or cease operations.
• The company is in the early stages of product development and requires FDA approval, with no assurance of obtaining it.
• A complaint was filed on April 13, 2026, seeking $398,740 in damages, with potential adverse effects on financial condition and operations.
• The company's net operating loss carryforwards may be subject to limitations under the Internal Revenue Code, impacting their future utilization.

Future Outlook

The company is dependent on obtaining additional working capital funding from the sale of equity and/or debt securities to execute its development plans and continue operations. Without additional funding, there is substantial doubt about the company's ability to continue as a going concern for the twelve months from the date of these financial statements. The company expects to continue to incur significant professional and R&D costs.

Management Comments

• The company's disclosure controls and procedures were deemed ineffective as of the end of the period covered by this report.
• Management intends to secure additional operating funds through equity or debt offerings, but success is not guaranteed.
• There are no assurances that the company will be able to attain a revenue level sufficient to generate adequate cash flow from operations or secure additional financing.

Industry Context

StockSavvy.ai notes that Regen Biopharma operates in the highly competitive and capital-intensive biotechnology sector, where significant R&D investment is required, and regulatory hurdles are substantial. The company's reliance on derivative income for profitability in this quarter is a notable point, as it suggests a potential volatility in core operational performance.

Comparison to Industry Standards

• Biotechnology companies typically require substantial R&D investment, with many operating at a loss during development phases. Regen Biopharma's R&D expenses of $212,216 for the six months ended March 31, 2026, are in line with early-stage development, though its overall operating loss is significant.
• The industry standard for cash burn rate varies widely, but a cash balance of $271 for a publicly traded company like Regen Biopharma is exceptionally low and raises significant going concern issues, far below typical benchmarks for companies in active development.
• Many biotech firms rely on strategic partnerships and licensing agreements for revenue. Regen Biopharma's revenue streams from Zander Therapeutics and Oncology Pharma are examples of this, but the amounts are modest relative to operating expenses.

Corporate Governance

Legal Proceedings

• On April 13, 2026, a complaint was filed seeking $398,740 in damages, plus attorneys' fees and costs. Settlement negotiations are underway.

Related Party Transactions

• Accounts receivable from Zander Therapeutics, Inc. (an entity under common control) totaled $259,723 as of March 31, 2026.
• Revenue of $27,425 in Q2 2026 and $54,849 in the six months ended March 31, 2026, recognized from Zander Therapeutics, Inc. pursuant to a license agreement.
• Notes payable to related parties included $8,926 to BST Partners as of March 31, 2026.
• The CEO of the Company is also the CEO and chairman of Zander Therapeutics, Inc.
• BST Partners is controlled by David Koos, who serves as the sole officer and director of Regen Biopharma, Inc.
• Rights to indebtedness due to David Koos and Zander Therapeutics, Inc. were acquired by Trillium Partners, LP on March 17, 2026.

Stakeholder Impact

• Shareholders: The company's going concern status and reliance on future financing pose significant risks to shareholder value. The issuance of new shares for debt satisfaction and fees could lead to further dilution.
• Creditors: The company's low liquidity and ongoing losses create uncertainty regarding the repayment of outstanding debt.
• Employees: The potential cessation of operations due to insufficient funding could impact employees.
• Suppliers: Delays in payments or cessation of operations could affect suppliers.

Next Steps

• Continue development of regenerative medical applications.
• Identify small molecules that inhibit or express NR2F6 for oncology and autoimmune disease applications.
• Seek FDA approval for products and therapies.
• Secure additional operating funds through equity or debt offerings.
• Engage in settlement negotiations for the legal proceeding filed on April 13, 2026.

Key Dates

Recommendation

While the reported net profit is a positive development, it is heavily influenced by derivative gains and does not reflect underlying operational strength. The company's severe liquidity constraints, ongoing operating losses, and the substantial doubt about its ability to continue as a going concern present significant risks. The potential for future capital raises also introduces dilution risk. Therefore, a 'hold' recommendation is appropriate, pending clearer signs of sustainable operational improvement and a more stable financial footing.

Keywords

Regen Biopharma, SEC Filing, 10-Q, Quarterly Report, Biotechnology, Pharmaceuticals, Clinical Trials, Financial Results, Derivative Liability, Going Concern