10-Q: Regen Biopharma Q3 2026: Persistent Losses and Liquidity Concerns

Regen Biopharma's Q3 2026 filing reveals continued operating losses and a critical liquidity situation, raising substantial doubts about its ability to continue as a going concern.

Summary

• Regen Biopharma reported net revenue of $59,065 for the three months ended June 30, 2026, consistent with the prior year's period.
• Operating expenses for the quarter were $34,536, a significant decrease from $99,821 in the same period of 2025, primarily due to reduced consulting and professional fees and the elimination of rent expenses.
• The company reported a net loss of $637,785 for the three months ended June 30, 2026, compared to a net loss of $167,292 for the same period in 2025.
• For the nine months ended June 30, 2026, net revenue was $177,194, consistent with the prior year, while operating expenses increased to $857,999 from $392,680.
• The net loss for the nine months ended June 30, 2026, was $613,711, an improvement from $702,033 in the comparable period of 2025.
• As of June 30, 2026, the company had cash of $239 and a net working capital deficit of approximately $5.9 million.
• The company acknowledges substantial doubt about its ability to continue as a going concern without additional funding.

Sentiment

Score: 2

Explanation: StockSavvy.ai views this filing as highly negative due to the company's severe liquidity issues, substantial accumulated deficit, and ongoing operational losses, indicating significant going concern risks.

Positives

• Operating expenses decreased significantly by 65.3% to $34,536 for the three months ended June 30, 2026, compared to $99,821 in the prior year's quarter, driven by reductions in consulting, professional fees, and rent.
• The net loss for the nine months ended June 30, 2026, improved by 14.4% to $613,711 compared to $702,033 in the same period of 2025.
• Derivative income of $177,654 was recognized in the nine months ended June 30, 2026, compared to a derivative loss of $376,312 in the prior year's period, contributing to the improved net income.
• The net working capital deficit decreased by $402,977 from September 30, 2025, to June 30, 2026, primarily due to a decrease in the derivative liability.

Negatives

• The company reported a net loss of $637,785 for the three months ended June 30, 2026, a substantial increase from a net loss of $167,292 in the prior year's quarter.
• Operating expenses for the nine months ended June 30, 2026, more than doubled to $857,999 from $392,680 in the same period of 2025.
• As of June 30, 2026, the company had only $239 in cash and a significant accumulated deficit of $22,305,331.
• The company has recurring operating losses and negative cash flows from operations.
• The derivative liability remains substantial at $1,901,963 as of June 30, 2026.
• The company's disclosure controls and procedures were deemed ineffective as of the period covered by the report.

Risks

• Substantial doubt exists regarding the company's ability to continue as a going concern due to recurring losses, negative operating cash flows, and a critical need for additional working capital.
• Failure to secure additional financing through equity or debt offerings could compel the company to reduce or cease operations.
• The company's deferred tax assets are fully offset by a valuation allowance, indicating a lack of confidence in future taxable income to utilize these assets.
• The company is subject to limitations on the utilization of net operating loss carryforwards due to potential ownership changes and other IRC provisions.
• The derivative liability, valued at $1,901,963 as of June 30, 2026, introduces financial risk and volatility.
• The company faces ongoing professional costs to maintain its public company status and significant R&D costs for product development.

Future Outlook

The company is dependent on obtaining additional working capital funding from the sale of equity and/or debt securities to continue its development plans and 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 the financial statements.

Management Comments

• 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.
• Failure to obtain sufficient working capital may compel the company to reduce or cease its operations.
• Management has determined that the company's disclosure controls and procedures were ineffective as of the period covered by the report.

Industry Context

StockSavvy.ai notes that Regen Biopharma operates in the highly competitive and capital-intensive biotechnology sector, where early-stage development companies often face significant funding challenges and long development timelines before achieving regulatory approval and market commercialization.

Comparison to Industry Standards

• Biotechnology companies in early-stage development typically require substantial external funding to advance through clinical trials and regulatory approvals.
• Many early-stage biotech firms experience periods of negative cash flow and accumulated deficits, relying on venture capital, private placements, or public offerings for survival.
• The significant derivative liability is a common feature in financings for distressed or early-stage companies, often involving convertible instruments with variable conversion prices.
• The 'going concern' qualification is a frequent occurrence in filings of companies with similar financial profiles in the biotech sector.

Corporate Governance

Legal Proceedings

• A complaint was filed on April 13, 2026, in the Superior Court of California, County of San Diego, by Trillium Partners, LP, seeking damages of $398,740 plus attorney fees and costs.
• A Settlement and Mutual Release Agreement was entered into on May 14, 2026, with the Plaintiff, involving the issuance of Common Stock or Series A Preferred Stock to generate proceeds to cover the claim amount (65% of net proceeds).

Related Party Transactions

• Revenue of $27,425 was recognized from Zander Therapeutics, Inc. for anniversary expense receivable related to a license agreement.
• Notes payable to related parties (David Koos, BST Partners, Zander Therapeutics, Inc.) totaled $32,963 as of June 30, 2026.
• Rights to indebtedness owed to David Koos and Zander Therapeutics, Inc. were acquired by Trillium Partners, LP on March 17, 2026.
• BST Partners is controlled by David Koos, the sole officer and director of Regen Biopharma, Inc.

Stakeholder Impact

• Shareholders face significant risk due to the company's precarious financial position and the substantial doubt about its ability to continue as a going concern.
• Creditors may face uncertainty regarding the repayment of outstanding notes payable, especially given the company's liquidity challenges.
• Employees (currently one remote employee) may be impacted by potential operational reductions or cessation.
• Suppliers may face extended payment terms or potential non-payment due to the company's financial condition.

Next Steps

• Management intends to secure additional operating funds through equity or debt offerings.
• The company will need to explore alternative sources of working capital if funds from operations and any private placements, public offerings, or loans prove insufficient.
• The company must obtain FDA approval to market any of its products or therapies.

Key Dates

Recommendation

The company exhibits severe financial distress, including a critical lack of liquidity, substantial accumulated deficit, ongoing operating losses, and a going concern warning. The significant derivative liability and ineffective disclosure controls further exacerbate the risk profile, making it a highly speculative investment with a strong probability of further value erosion.

Keywords

Regen Biopharma, Form 10-Q, Quarterly Report, Financial Statements, Operating Loss, Going Concern, Liquidity, Derivative Liability