10-K: Regen Biopharma Reports Deepening Losses, Going Concern Doubt

Regen Biopharma, Inc. filed its annual 10-K, revealing a significant increase in net loss to $1.27 million and substantial doubt about its ability to continue as a going concern, despite reduced operating cash burn.

Summary

• Regen Biopharma, Inc. (Regen) is a Nevada corporation focused on developing regenerative medical applications, primarily licensing, internal development, or acquisition up to Phase I/II clinical trials.
• The company has several therapies in development: HemaXellarate (aplastic anemia), dCellVax (breast cancer), tCellVax (solid tumors), DiffronC (cancer growth inhibition), DuraCar (CAR-T cells for solid tumors), and small molecules (NR2F6 modulators for cancer and autoimmune disorders).
• None of the product candidates have commenced clinical trials, so no conclusions of efficacy can be made.
• The company reported a net loss of $1,274,502 for the fiscal year ended September 30, 2025, a significant increase from $668,255 in 2024.
• Total revenues remained flat at $236,561 in 2025 ($236,560 in 2024), primarily from license agreements with Zander Therapeutics, Inc. (related party) and Oncology Pharma, Inc.
• Operating expenses decreased to $575,101 in 2025 from $653,781 in 2024, mainly due to a reduction in Research and Development (R&D) expenses.
• Net cash used in operating activities decreased to $383,591 in 2025 from $751,536 in 2024.
• The company had cash of $69,555 and a net working capital deficit of approximately $6.2 million as of September 30, 2025.
• The independent auditor's report highlights substantial doubt about the company's ability to continue as a going concern due to significant operating losses and negative working capital.
• The company relies on additional funding through equity/debt sales or grants to continue operations.
• Several common shares were issued post-fiscal year end for cash, debt satisfaction, and compensation to management and consultants, including 20 million shares each to David Koos (CEO) and Dr. Harry Lander for HemaXellerate Phase I clinical trial assistance.
• The company's disclosure controls and procedures and internal controls over financial reporting were deemed ineffective as of September 30, 2025, due to inadequate accounting resources, lack of segregation of duties, and the need for a stronger internal control environment.

Sentiment

Score: 2

Explanation: The significant increase in net loss, substantial derivative liability, growing accumulated deficit, negative working capital, and the auditor's going concern warning indicate severe financial distress. The ineffective internal controls and delays in clinical trial initiation further compound the negative outlook, despite some reduction in operating cash burn.

Positives

• Net cash used in operating activities decreased significantly to $383,591 in 2025 from $751,536 in 2024, indicating improved operational cash burn.
• Operating loss decreased to $338,540 in 2025 from $417,221 in 2024, primarily due to reduced operating expenses.
• Research and Development (R&D) expenses decreased substantially to $11,725 in 2025 from $153,685 in 2024.
• The FDA has cleared the Investigational New Drug (IND) application for HemaXellerate to initiate a Phase I clinical trial for drug-refractory aplastic anemia.
• The company has engaged a consulting agreement with Biotech Research Group Corporation to reinstate inactive INDs for HemaXellerate and dCellVax.
• Several patents have been granted for various gene silencing, immune modulation, and small molecule technologies.

Negatives

• Net loss significantly increased to $1,274,502 in 2025 from $668,255 in 2024, primarily due to a derivative loss.
• A substantial derivative loss of $675,528 was recognized in 2025, compared to $4,091 in 2024.
• The company has an accumulated deficit of approximately $21.69 million as of September 30, 2025.
• A net working capital deficit of approximately $6.2 million as of September 30, 2025.
• The independent auditor's report raises substantial doubt about the company's ability to continue as a going concern.
• The company is dependent on obtaining additional funding to continue operations and execute development plans.
• Disclosure controls and procedures and internal controls over financial reporting were deemed ineffective due to inadequate accounting resources and lack of segregation of duties.
• Increased interest expense to $158,286 in 2025 from $72,445 in 2024.
• Incurred $50,000 in penalties in 2025.
• The common stock is a penny stock, which may make it more difficult to sell.
• No cash dividends were paid, and none are expected in the foreseeable future.
• The company's sole director and officer (David Koos) is not considered independent, and there are no standing audit, nominating, or compensation committees.

Risks

• Substantial doubt about the company's ability to continue as a going concern due to significant operating losses, negative cash flows, and a net working capital deficit.
• Dependence on obtaining additional working capital through equity/debt sales or grants, with no assurance of success or favorable terms.
• None of the product candidates have commenced clinical trials, and there is no guarantee of efficacy, safety, or regulatory approval (FDA).
• For DiffronC and DuraCar, risks include the NR2F6 siRNA not being effective at inhibiting expression or the inhibition not resulting in enhanced tumoricidal activity.
• Proposed products are subject to rigorous FDA and foreign regulatory review and approval procedures, which are lengthy, expensive, and not guaranteed.
• The pharmaceutical and biologics industries are highly competitive, with many competitors having greater resources.
• The company's success is dependent on key personnel.
• Actual future activities and results may differ materially from forward-looking statements due to inaccurate assumptions or unknown risks.
• The common stock is a penny stock, which may reduce trading activity and make it more difficult to sell.
• Ineffective disclosure controls and procedures and internal controls over financial reporting due to inadequate accounting resources and lack of segregation of duties.
• Transactions with entities under common control (Zander Therapeutics, BST Partners) could pose conflicts of interest or unfavorable terms.
• The fair value of embedded derivatives in convertible notes is subject to significant fluctuations, impacting net loss.

Future Outlook

The company expects to continue incurring significant professional costs as a publicly traded company and substantial research & development costs for product development. It is dependent on securing additional operating funds through equity or debt offerings or grants to continue operations and execute development plans. Management does not anticipate paying any cash dividends in the foreseeable future, intending to retain all future earnings for business use. The company plans to develop a more robust and detailed strategy for cybersecurity as it grows. Management believes that despite material weaknesses in internal controls, financial statements are fairly stated.

Management Comments

• We intend to engage primarily in the development of regenerative medical applications which we intend to license, develop internally or acquire outright from other entities up to the point of successful completion of Phase I and or Phase II clinical trials after which we would either attempt to sell or license those developed applications or, alternatively, advance the application further to Phase III clinical trials.
• The primary factor to be considered by us in arriving at a decision to advance an application further to Phase III clinical trials would be a greater than anticipated indication of efficacy seen in Phase I trials.
• None of the abovementioned statements regarding any of our products in development are intended to be a prediction or conclusion of efficacy. No clinical trials on our product candidates have commenced so no conclusions of efficacy can be made.
• We intend to be competitive by utilizing the services and advice of individuals that we believe have expertise in their field in order that we can concentrate our resources on projects in which products and services in which we have the greatest potential to secure a competitive advantage may be developed and commercialized.
• 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.
• Management of the Company believes that these material weaknesses [in internal controls] are due to the small size of the Company's staff.
• To mitigate the current limited resources and limited employees, we rely heavily on direct management oversight of transactions, along with the use of external legal and accounting professionals.

Industry Context

Regen Biopharma operates in the highly competitive and rapidly evolving pharmaceutical and biologics industries, specifically focusing on regenerative medicine, oncology (cancer therapies), and autoimmune disorders. The company's strategy of developing therapies up to Phase I/II and then seeking to license or sell them is common for small biotech firms with limited capital, aiming to de-risk projects before costly late-stage trials. The reliance on siRNA and CAR-T cell technologies places it within cutting-edge areas of immunotherapy and gene therapy, which are attracting significant investment and research. However, the industry is characterized by high R&D costs, long development timelines, and stringent regulatory hurdles, which pose substantial challenges for early-stage companies like Regen, especially given its limited financial resources and lack of clinical trial commencement.

Comparison to Industry Standards

• The filing does not provide specific comparable companies, projects, or results, making a direct comparison to global benchmarks or specific competitors impossible based solely on the provided text.
• General industry standards suggest that a company with multiple drug candidates in pre-clinical stages, no active clinical trials, and significant accumulated deficits, while facing going concern issues, is at a very early and high-risk stage compared to more established biotech firms or those with successful Phase II/III assets.
• The reliance on licensing agreements for revenue is typical for early-stage biotechs, but the minimal revenue generated ($236,561) indicates limited commercial success or advanced licensing deals.
• The high R&D costs (though reduced in FY2025) and the need for substantial capital raises are standard in the biotech industry, but the 'substantial doubt about going concern' indicates a more precarious financial position than many peers.
• The ineffectiveness of internal controls is a significant governance issue that deviates from best practices for publicly traded companies, regardless of size.

Corporate Governance

Related Party Transactions

• License agreement with Zander Therapeutics, Inc. (under common control with Regen, David Koos is CEO/Chairman of both) for non-human veterinary therapeutic use of IP. Zander pays annual fees ($100,000) and royalties (4% of Net Sales, 10% of sublicensee consideration, minimum $10,000 annual royalties).
• Sublease agreement with BST Partners (controlled by David Koos) for office space, terminated December 1, 2025. Company now uses CEO's office space free of charge.
• David Koos: $73,303 loan at 15% per annum, due on demand.
• BST Partners: Loans totaling $133,836 ($46,599 in Q4 2024, $40,616 in Q1 2025, $46,621 in Q2 2025) at 10% per annum. $75,000 repaid in Q4 2025.
• Zander Therapeutics, Inc.: Loans totaling $59,200 ($15,000 due May 3, 2025; $25,000 due June 5, 2025; $10,000 due Oct 4, 2025; $4,700 due Oct 15, 2025; $4,500 due Oct 23, 2025) at 10% per annum.
• David Koos was issued 10,000,000 common shares on June 10, 2025, in settlement of $50,000 accrued salary.
• David Koos was issued 20,000,000 common shares on October 2, 2025, for services related to the HemaXellerate Phase I clinical trial, subject to vesting upon successful completion.

Stakeholder Impact

• Shareholders face significant dilution from numerous common stock issuances for cash, debt conversion, and compensation. Increased net loss and going concern warning negatively impact shareholder value. No cash dividends expected. Preferred shareholders have specific liquidation and dividend preferences.
• David Koos, as sole officer and director, is heavily compensated with shares, tying his incentives to the company's long-term success (or at least trial completion). Dr. Harry Lander also received substantial share compensation.
• Creditors, particularly convertible note holders, face potential conversion at discounted prices, leading to further dilution for common shareholders. The company's going concern status increases risk for all creditors.
• Customers/Licensees (Oncology Pharma, Inc. and Zander Therapeutics, Inc.) hold licenses, but the company's financial instability and slow clinical progress could impact the value and development of these licensed IPs.

Next Steps

• Initiate Phase I clinical trial for HemaXellerate for drug-refractory aplastic anemia.
• Reinstatement of inactive Investigational New Drug (IND) applications #15376 (HemaXellerate) and #16200 (dCellVax).
• Continue pre-clinical testing for DiffronC and DuraCar to optimize delivery in vivo and assess enhanced tumor-killing activity.
• Continue pre-clinical testing for small molecule drugs to activate/inhibit NR2F6.
• Secure additional operating funds through equity/debt offerings or grants.
• Develop a more robust and detailed cybersecurity strategy as the company grows.
• Increase number of employees to implement adequate segregation of duties within the internal control framework.

Key Dates

Recommendation

The company faces severe financial distress, evidenced by a substantial increase in net loss, a large accumulated deficit, and a critical 'going concern' warning from its auditors. Operations are not generating sufficient cash, and the company relies heavily on dilutive financing. Key drug candidates are still in pre-clinical or inactive IND stages, with significant delays in advancing to clinical trials. Furthermore, material weaknesses in internal controls and a lack of independent governance raise serious red flags regarding operational integrity and investor protection. The continuous issuance of shares for debt and compensation suggests ongoing dilution. Given these profound financial, operational, and governance challenges, the investment risk is exceptionally high, and the probability of long-term value creation appears very low.

Keywords

Biopharma, Regenerative Medicine, Oncology, Aplastic Anemia, CAR-T, Gene Silencing, NR2F6, siRNA, FDA, Clinical Trials, Biotech, Therapeutics, Small Molecules, Immune Checkpoint, Autoimmune Disorders, SEC Filing, 10-K, Going Concern, Financial Reporting, Corporate Governance