RMTG 10-Q
Regenerative Medical Technology Group Inc. (RMTG)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended:
or
For the transition period from __________ to __________
Commission File Number:
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (IRS Employer Identification No.) |
(Address of principal executive offices)
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year end, 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 | ||
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 past 12 months,
and (2) has been subject to such filing requirements for the past 90 days.
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).
Indicate by check mark whether the registrant is large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definition 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 | ☐ |
| ☒ | Smaller Reporting Company | ||
| 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). Yes ☐ No
As of May 20, 2025, there were
Regenerative Medical Technology Group Inc.
TABLE OF CONTENTS
i
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
Regenerative Medical Technology Group Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| (Unaudited) | * | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable | ||||||||
| Inventory | ||||||||
| Prepaid expenses | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Other assets | ||||||||
| Intangible assets, net | ||||||||
| Right of use asset, net | ||||||||
| Goodwill | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | $ | ||||||
| Accrued interest | ||||||||
| Customer advances | ||||||||
| Derivative liability | ||||||||
| Lease liability, current portion | ||||||||
| Convertible notes payable, net | ||||||||
| Notes payable-related parties | ||||||||
| Notes payable, net | ||||||||
| Total current liabilities | ||||||||
| Long term liabilities | ||||||||
| Lease liability, net of current portion | ||||||||
| Notes payable, net of current portion | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies | ||||||||
| Stockholders’ deficit | ||||||||
| Preferred stock, $ | ||||||||
| Preferred stock, $ | ||||||||
| Common stock, $ | ||||||||
| Additional paid in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ deficit | ( | ) | ( | ) | ||||
| Total liabilities and stockholders’ deficit | $ | $ | ||||||
| * | Derived from audited information |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
Page 1 of 39
Regenerative Medical Technology Group Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| For the Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenue | $ | $ | ||||||
| Cost of revenue | ||||||||
| Gross profit | ||||||||
| Operating expenses | ||||||||
| Advertising and marketing | ||||||||
| Professional fees | ||||||||
| Officer compensation | ||||||||
| Depreciation and amortization expense | ||||||||
| Investor relations | ||||||||
| General and administrative | ||||||||
| Total operating expenses | ||||||||
| Net income (loss) from operations | ( | ) | ||||||
| Other income (expense) | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Gain (loss) on derivative financial instruments | ( | ) | ( | ) | ||||
| Total other income (expense) | ( | ) | ( | ) | ||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Basic and diluted earnings (loss) per share from: | ||||||||
| Net loss per common share, basic and diluted | $ | ( | ) | $ | ( | ) | ||
| Weighted average number of common shares outstanding, basic and diluted | ||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
Page 2 of 39
Regenerative Medical Technology Group Inc.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
For the Three Months Ended March 31, 2025
(Unaudited)
| Series
AA Preferred Stock | Series DD Preferred Stock | Common Stock | Additional Paid In | Accumulated | ||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Total | ||||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Balance, March 31, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||
For the Three Months Ended March 31, 2024
(Unaudited)
| Series
AA Preferred Stock | Series DD Preferred Stock | Common Stock | Additional Paid In | Accumulated | ||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Total | ||||||||||||||||||||||||||||
| Balance, December 31, 2023 | $ | $ | | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Balance, March 31, 2024 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
Page 3 of 39
Regenerative Medical Technology Group Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| For the Three Months Ended March 31, |
||||||||
| 2025 | 2024 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | ( |
) | $ | ( |
) | ||
| Non-cash adjustments to reconcile net loss to net cash: | ||||||||
| Amortization of debt discount | ||||||||
| Depreciation and amortization expense | ||||||||
| Loss (gain) from changes in derivative liability fair values | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( |
) | ||||||
| Prepaid expenses | ( |
) | ( |
) | ||||
| Inventory | ( |
) | ||||||
| Other asset | ( |
) | ||||||
| Accounts payable and accrued liabilities | ||||||||
| CASH PROVIDED BY OPERATING ACTIVITIES | ||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Purchase of property and equipment | ( |
) | ||||||
| CASH USED BY INVESTING ACTIVITIES | ( |
) | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| CASH USED BY FINANCING ACTIVITIES | ||||||||
| Net increase (decrease) in cash | ||||||||
| Cash, beginning of period | ||||||||
| Cash, end of period | $ | $ | ||||||
| Cash paid for income taxes | $ | $ | ||||||
| Cash paid for interest | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
Page 4 of 39
Regenerative Medical Technology Group Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS March 31, 2025
(Unaudited)
NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
Organization and History
Meso Numismatics, Inc. (the “Company”) was originally organized under the laws of Washington State in 1999, as Spectrum Ventures, LLC to develop market and sell VOIP (Voice over Internet Protocol) services. In 2002, the Company changed its name to Nxtech Wireless Cable Systems, Inc. In August 2007, the Company changed its name to Oriens Travel & Hotel Management Corp. In November 2014, the Company changed its name to Pure Hospitality Solutions, Inc.
On November 16, 2016, the Company entered into an Agreement and Plan of Merger between the Company and Meso Numismatics Corp. (“Meso”), a Florida corporation. The acquisition of Meso was to support the Company’s overall mission of specializing in ventures related to Central America and the Latin countries of the Caribbean; not limited to tourism. Meso was a small but scalable numismatics operation that the Company leveraged for low-cost cost revenues and product marketing.
The Company maintained an online store with eBay (www.mesocoins.com) and participated in live auctions with major companies such as Heritage Auctions, Stacks Bowers Auctions and Lyn Knight Auctions.
The acquisition was completed on August 4, 2017,
following the Company issuance of
On September 4, 2017, the Company decided to suspend its booking operations, Oveedia, to focus on continuing to build Meso, its numismatic business. The Company did, however, use its footprint within the Latin American region to expand the Company at a much quicker rate.
In September 2018, the Company changed its name to Meso Numismatics, Inc. and FINRA provided a market effective date and the new ticker symbol MSSV became effective on October 16, 2018.
On August 18, 2021, the Company completed its
acquisition of Global Stem Cells Group Inc., through a Stock Purchase Agreement acquiring all the outstanding capital stock of Global
Stem Cells Group Inc. and paid the purchase price of a total of
Pursuant to the terms of the Fifth Post Closing
Amendment along with the completion of the acquisition of Global Stem Cells Group Inc., the issuance of the
Page 5 of 39
On October 28, 2022, the Company entered into
an Agreement of Conveyance, Transfer and Assignment of Subsidiary with the Company’s prior officer and director, Mr. Melvin Pereira,
pursuant to which the Company agreed to sell Mr. Pereira
Description of Business
As a result of this transaction, the Company is no longer engaged in the sale of coins, paper currency, bullion and medals and it has moved into what is believed to be a more lucrative opportunity for the Company - the operations of Global Stem Cell Group.
The Company believes stem cell therapy is becoming an increasingly effective clinical solution for treating conditions that traditional or conventional medicine only offers within palliative care and pain management. The Company works with doctors and their staff to provide products, solutions, equipment, services, and training to help them be successful in the application of Stem Cell Therapies. The Company combines solutions from extensive clinical research with the manufacturing and commercialization of viable cell therapy and immune support related products that it believes will change the course of traditional medicine around the world forever. The Company’s revenue comes directly from the training and the seminars, from the resale of these kits, products, and equipment, services, from patient procedures, and from the reoccurring application of the Company’s process using the kits and solutions it provides.
On October 18, 2024, FINRA provided a market effective date for the name and symbol change for Meso Numismatics, Inc. (MSSV) taking effect at the opening of business on October 21, 2024. The new name is Regenerative Medical Technology Group Inc. The new symbol is RMTG.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation and Basis of Presentation
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Global Stem Cells Group Inc. (since August 18, 2021) and Cellular Hope Institute, wholly-owned subsidiary of Global Stem Cells Group Inc. All significant intercompany transactions have been eliminated in consolidation.
Use of Estimates in Financial Statement Presentation
The preparation of these 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 at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The significant estimates included in these financial statements are associated with accounting for the goodwill, derivative liability, valuation of preferred stock, and the valuation of assets and liabilities in business combination.
Reclassifications
Certain 2024 amounts have been reclassified to conform to the 2025 presentation, including the presentation of accrued interest previously included in accounts payable and accrued liabilities.
Cash and Cash Equivalents
The Company considers all highly liquid accounts
with original maturities of three months or less to be cash equivalents. At March 31, 2025, and December 31, 2024, all of the Company’s
cash was deposited in major banking institutions. There were no cash equivalents as of March 31, 2025, and December 31, 2024. Our cash
balances at financial institutions may exceed the Federal Deposit Insurance Company’s (FDIC) insured limit of $
Page 6 of 39
Accounts Receivable
Accounts receivables are recorded at original
invoice amount less an allowance for uncollectible accounts that management believes will be adequate to absorb estimated losses on existing
balances. Management estimates the allowance based on collectability of accounts receivable and prior bad debt experience. Accounts receivable
balances are written off against the allowance upon management’s determination that such accounts are uncollectible. Recoveries
of accounts receivable previously written off are recorded when received. Management believes that credit risks on accounts receivable
will not be material to the financial position of the Company or results of operations. The allowance for doubtful accounts was $
Intangible Assets
Intangible assets with finite lives are amortized over their estimated useful lives. Intangible assets with indefinite lives are not amortized but are tested for impairment annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. No impairment was recognized for the three months ended March 31, 2025, and the year ended December 31, 2024.
Lease Accounting
The Company leases office space and clinical space under a lease arrangement. These properties are generally leased under non-cancellable agreements that contain lease terms in excess of twelve months on the date of entry as well as renewal options for additional periods. The agreements, which have been classified as operating leases, generally provide for base minimum rental payment, as well as non-lease components including insurance, taxes, maintenance, and other common area costs.
At the lease commencement date, the Company recognizes a right-of-use asset and a lease liability for all leases, except short-term leases with an original term of twelve months or less. The right-of-use asset represents the right to use the leased asset for the lease term. The lease liability represents the present value of the lease payments under the lease. The right-of-use asset is initially measured at cost, which primarily comprises the initial amount of the lease liability, plus any prepayments to the lessor and initial direct costs such as brokerage commissions, less any lease incentives received. All right-of-use assets are periodically reviewed for impairment in accordance with standards that apply to long-lived assets. The lease liability is initially measured at the present value of the lease payments, discounted using the rate implicit in the contract if available or an estimate of our incremental borrowing rate for a collateralized loan with the same term as the underlying lease. The discount rates used for the initial measurement of lease liabilities as of the date of entry were based on the original lease terms.
Lease payments included in the measurement of lease liabilities consist of (i) fixed lease payments for the non-cancelable lease term, (ii) fixed lease payments for optional renewal periods where it is reasonably certain the renewal option will be exercised, and (iii) variable lease payments that depend on an underlying index or rate, based on the index or rate in effect at lease commencement. Certain real estate lease agreements require payments for non-lease costs such as utilities and common area maintenance. The Company has elected an accounting policy to not separate implicit components of the contract that may be considered non-lease related.
Lease expense for operating leases consists of the fixed lease payments recognized on a straight-line basis over the lease term plus variable lease payments as incurred. The lease payments are allocated between a reduction of the lease liability and interest expense. Depreciation of the right-of-use asset for operating leases reflects the use of the asset on straight-line basis over the expected term of the lease.
Goodwill
We test our reporting unit for impairment annually at year end or more frequently if events or circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the carrying amount of a reporting unit exceeds its estimated fair value, we record an impairment loss based on the difference between fair value and carrying amount of the reporting unit, not to exceed to the associated carrying amount of goodwill. (see Note 11 for detail of goodwill).
Page 7 of 39
Derivative Instruments
The derivative instruments are accounted for as liabilities, the derivative instrument is initially recorded at its fair market value and is then re-valued at each reporting date, with changes in fair value recognized in operations for each reporting period. The Company uses the Monte Carlo option pricing model to value the derivative instruments.
Revenue Recognition
The Company recognizes revenue from the sale of products under ASC 606 by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied.
The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product to a customer or services are provided. Revenue is measured based on the consideration the Company receives in exchange for those products.
Income Taxes
The Company uses the liability method to record income tax activity. Deferred taxes are determined based upon the estimated future tax effects of differences between the financial reporting and tax reporting bases of assets and liabilities, given the provisions of currently enacted tax laws.
The accounting for uncertainty in income taxes recognized in an enterprise’s financial statements uses the threshold of more-likely-than-not to be sustained upon examination for inclusion or exclusion. Measurement of tax uncertainty occurs if the recognition threshold has been met.
Net Earnings (Losses) Per Common Share
The Company accounts for net loss per share in accordance with Accounting Standards Codification subtopic 260-10, Earnings Per Share (“ASC 260-10”), which requires presentation of basic and diluted earnings per share (“EPS”) on the face of the statement of operations for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS.
Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during each period. It excludes the dilutive effects of any potentially issuable common shares. The effect of common stock equivalents is anti-dilutive with respect to losses and therefore basic and dilutive is the same.
Diluted net loss per share is calculated by including
any potentially dilutive share issuances in the denominator.
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Convertible notes outstanding | ||||||||
| Convertible preferred stock outstanding | ||||||||
| Shares underlying warrants outstanding | ||||||||
Page 8 of 39
Fair Value of Financial Instruments
The fair value of financial instruments, which include cash, accounts payable and accrued expenses and advances from related parties were estimated to approximate their carrying values due to the immediate or short-term maturity of these financial instruments. Management is of the opinion that the Company is not exposed to significant interest, currency or credit risks arising from financial instruments.
Fair value is defined as the price which would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-tier fair value hierarchy which prioritizes the inputs used in the valuation methodologies is as follows:
| Level 1 | Inputs - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. |
| Level 2 | Inputs - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means. |
| Level 3 | Inputs - Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities. |
At March 31, 2025, and December 31, 2024, the carrying amounts of the Company’s financial instruments, including cash, account payables, and accrued expenses, approximate their respective fair value due to the short-term nature of these instruments.
At March 31, 2025, and December 31, 2024, the Company does not have any assets or liabilities except for derivative liabilities related to convertible notes payable required to be measured at fair value in accordance with FASB ASC Topic 820, Fair Value Measurement.
The following presents the Company’s fair value hierarchy for those assets and liabilities measured at fair value as of March 31, 2025, and December 31, 2024:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| March 31, 2025 | ||||||||||||||||
| Derivative liability | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
| December 31, 2024 | ||||||||||||||||
| Derivative liability | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
Stock Based Compensation
Share-based compensation issued to employees is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period. The Company measures the fair value of the share-based compensation issued to non-employees at the grant date using the stock price observed in the trading market (for stock transactions) or the fair value of the award (for non-stock transactions), which were considered to be more reliably determinable measures of fair value than the value of the services being rendered.
Page 9 of 39
New Accounting Pronouncements
Recently adopted accounting pronouncements require public companies to disclose the impact of new standards on their financial statements, including details about the standard, the adoption date, method of adoption, and expected effects. These disclosures help investors understand how changes in accounting principles will affect a company’s financial performance and position.
Recently Adopted
Accounting Pronouncements. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280). The amendments in
this update expand segment disclosure requirements, including new segment disclosure requirements for entities with a single reportable
segment among other disclosure requirements. This update is effective for fiscal years beginning after December 15, 2023, and interim
periods within fiscal years beginning after December 15, 2024. Adoption of this standard is on a modified retrospective basis and
had no impact on the Company’s financial position, results of operations, cash flows or net income per share. As of 2024 and 2023
the Company had
Other accounting standards and amendments to existing accounting standards that have been issued and have future effective dates are not applicable or are not expected to have a significant impact on the Company’s consolidated financial statements.
Going Concern
The financial statements have been prepared assuming
the Company will continue as a going concern. The Company has incurred losses since inception, resulting in an accumulated deficit of
$
The ability of the Company to continue its operations as a going concern is dependent on management’s plans, which include the raising of capital through debt and/or equity markets with some additional funding from other traditional financing sources, including term notes, until such time that funds provided by operations are sufficient to fund working capital requirements.
The Company will require additional funding to finance the growth of its current and expected future operations as well to achieve its strategic objectives. There can be no assurance that financing will be available in amounts or terms acceptable to the Company, if at all. The accompanying 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. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.
NOTE 3 – REVENUE RECOGNITION
In accordance with FASB ASC 606, Revenue from Contracts with Customers, we determine revenue recognition through the following steps:
| (1) | Identify the contract with a customer |
| (2) | Identify the performance obligations in the contract |
| (3) | Determine the transaction price |
| (4) | Allocate the transaction price to each performance obligation in the contract |
| (5) | Recognize revenue when each performance obligation is satisfied |
The Company’s main source of revenue is comprised of the following:
| ● | Training-GSCG offers a Stem Cell & Exosomes Certification Program where physicians attending these training sessions will take advantage of a full review of stem cell biology, characterization and regenerative properties of cells and cell products, cytokines and growth factors and how they can be applied in a clinic setting. The physicians will pay for the training sessions upfront and receive all the material and certificate upon completion of seminar. Completion of the seminar is when control is transferred and when revenue is recognized. |
Page 10 of 39
| ● | Products-Physicians can order products through GSCG, which includes EC Certificate from Institute for Testing and Certificating, Inc. Products are paid for upfront and shipped from GSCG directly to physicians or picked up physicians at seminars or training events. Transfer of control is when the product is shipped or picked up at seminars or training events, which is when revenue is recognized. |
| ● | Equipment- Physicians can order equipment through GSCG, which includes a warranty from manufacture of equipment. Equipment is paid for upfront and shipped from manufacture directly to physicians or shipped from GSCG to physicians. Transfer of control is when the equipment is shipped, which is when revenue is recognized. |
| ● | Patient Procedures - Patient procedures are the treatments
GSCG is offering at its Cancun clinic. Once the patient agrees with the treatment plan and estimate, the procedure is scheduled
with a deposit. The procedure can be cancelled up to 21 days from scheduled treatment date with a |
The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product to a customer or as services are performed. Revenue is measured based on the consideration the Company receives in exchange for those products
The following table presents the Company’s revenue by product category for the three months ended March 31, 2025, and 2024:
| For the Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Training | $ | $ | ||||||
| Product supplies | ||||||||
| Equipment | ||||||||
| Patient procedures | ||||||||
| Total revenue | $ | $ | ||||||
Listed below are the revenues, cost of revenues, gross profits, assets and net loss by Company:
| For the Three Months Ended | ||||||||||||
| March 31, 2025 | ||||||||||||
| Global Stem Cells Group | Regenerative Medical Technology Group | Total | ||||||||||
| Revenue | $ | $ | $ | |||||||||
| Cost of revenue | ||||||||||||
| Gross profit | $ | $ | $ | |||||||||
| Gross Profit % | % | % | % | |||||||||
| Assets | $ | $ | $ | |||||||||
| Net profit (loss) | $ | $ | ( | ) | $ | ( | ) | |||||
Page 11 of 39
NOTE 4 – NOTES PAYABLE
Convertible Notes Payable
On November 25, 2019, the Company, pursuant to
the certificate of designation of the Series BB Preferred Stock, elected to exchange the preferred shares for other indebtedness calculated
at a price per share equal to $
The balance of the convertible notes as of March 31, 2025, and December 31, 2024, is as follows:
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Convertible notes payable | $ | $ | ||||||
| Less: Discount | ||||||||
| Convertible notes payable, net | $ | $ | ||||||
During the periods ending March 31, 2025, and December 31, 2024, the Company incurred no debt discount amortization expense and made no payments on the outstanding convertible notes. As of March 31, 2025, and December 31, 2024, the Company had accrued interest on convertible notes.
Promissory Notes Payable
During 2015, the Company entered into line of
credit with Digital Arts Media Network treated as a promissory note. The promissory note bear interest at ten (
Page 12 of 39
On November 25, 2019, the Company, pursuant to
the certificate of designation of the Series BB Preferred Stock, elected to exchange the preferred shares for other indebtedness calculated
at a price per share equal to $
On December 3, 2019, Melvin Pereira, the prior
CEO, converted
At December 7, 2020, the Company exchanged $
The new notes have a maturity date of November
20, 2028, an aggregate principal amount of $
On December 9, 2020, the Company entered into
a Promissory Debentures with a lender in the amount of $
On January 6, 2021, the Company entered into a
Promissory Debentures with a lender in the amount of $
Page 13 of 39
On June 22, 2021, the Company entered into a Promissory
Debentures with a lender in the amount of $
On August 18, 2021, through a Stock Purchase Agreement
in which
On August 18, 2021, through a Stock Purchase Agreement
in which
On September 20, 2021, the Company entered into
a Promissory Debentures with a lender in the amount of $
On December 30, 2021, the parties wished to modify
the terms of the Promissory Debentures dated July 13, 2020, in the amount of $
On December 30, 2021, the parties wished to modify
the terms of the Promissory Debentures dated July 15, 2020, in the amount of $
Page 14 of 39
On November 20, 2023, both the Company and two
separate lenders hereby agree to terminate the 2020 Secured Note in the amount of $
The balance of the promissory notes as of March 31, 2025, and December 31, 2024, is as follows:
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Promissory notes payable | $ | $ | ||||||
| Promissory notes payable-related party | ||||||||
| Promissory notes payable, net | $ | $ | ||||||
During the periods ending March 31, 2025, and
December 31, 2024, the Company made no payments, respectively, on the outstanding promissory notes, and recorded $
Derivatives Liabilities
The Company determined that the convertible notes outstanding as of March 31, 2025, contained an embedded derivative instrument as the conversion price was based on a variable that was not an input to the fair value of a “fixed-for-fixed” option as defined under FASB ASC Topic No. 815 – 40.
The Company determined the fair values of the embedded convertible notes derivatives and tainted convertible notes using the lattice valuation model with the following assumptions:
| March 31, | ||||
| 2025 | ||||
| Common stock issuable | ||||
| Market value of common stock on measurement date | $ | |||
| Adjusted exercise price | $ | |||
| Risk free interest rate | % | |||
| Instrument lives in years | ||||
| Expected volatility | % | |||
| Expected dividend yields | ||||
On December 7, 2020, the Company exchanged $
Page 15 of 39
The balance of the fair value of the derivative liability as of March 31, 2025, and December 31, 2024, is as follows:
| Balance at December 31, 2023 | $ | |||
| Additions | ||||
| Fair value loss | ||||
| Conversions | ||||
| Balance at December 31, 2024 | ||||
| Additions | ||||
| Fair value gain | ||||
| Conversions | ||||
| Balance at March 31, 2025 | $ |
NOTE 5 – STOCKHOLDERS’ EQUITY
Our authorized capital
stock consists of
Common Shares
Our common stock is entitled to one vote per share on all matters submitted to a vote of the stockholders, including the election of directors. The holders of our common stock possess all voting power. Generally, all matters to be voted on by stockholders must be approved by a majority (or, in the case of election of directors, by a plurality) of the votes entitled to be cast by all shares of our common stock that are present in person or represented by proxy, subject to any voting rights granted to holders of any preferred stock. Holders of our common stock representing a majority of our capital stock issued, outstanding and entitled to vote, represented in person or by proxy, are necessary to constitute a quorum at any meeting of our stockholders. A vote by the holders of a majority of our outstanding shares is required to effectuate certain fundamental corporate changes such as liquidation, merger or an amendment to our Articles of Incorporation. Our Articles of Incorporation do not provide for cumulative voting in the election of directors.
2024 Transactions
On February 29, 2024, the Company issued
Warrants
During the year ended December 31, 2020, the Company
issued warrants to purchase
On January 6, 2021, the Company issued warrants
to purchase
On June 22, 2021, the Company issued warrants
to purchase
Page 16 of 39
On September 20, 2021, the Company issued warrants
to purchase
The following table summarizes the Company’s warrant transactions during the quarter ended March 31, 2025, and year ended December 31, 2024:
| Number of Warrants | Weighted Average Exercise Price | |||||||
| Outstanding at year ended December 31, 2023 | $ | |||||||
| Granted | ||||||||
| Exercised | ||||||||
| Expired | ( | ) | - | |||||
| Outstanding at year ended December 31, 2024 | $ | |||||||
| Granted | ||||||||
| Exercised | ||||||||
| Expired | ||||||||
| Outstanding at quarter ended March 31, 2025 | $ | |||||||
Preferred Stock
Our board of directors may authorize preferred shares of stock and to divide the authorized shares of our preferred stock into one or more series, each of which must be so designated as to distinguish the shares of each series of preferred stock from the shares of all other series and classes. Our board of directors is authorized, within any limitations prescribed by law and our articles of incorporation, to fix and determine the designations, rights, qualifications, preferences, limitations and terms of the shares of any series of preferred stock including, but not limited to, the following:
| 1. | The number of shares constituting that series and the distinctive designation of that series, which may be by distinguishing number, letter or title; |
| 2. | The dividend rate on the shares of that series, whether dividends will be cumulative, and if so, from which date(s), and the relative rights of priority, if any, of payment of dividends on shares of that series; |
| 3. | Whether that series will have voting rights, in addition to the voting rights provided by law, and, if so, the terms of such voting rights; |
| 4. | Whether that series will have conversion privileges, and, if so, the terms and conditions of such conversion, including provision for adjustment of the conversion rate in such events as the Board of Directors determines; |
| 5. | Whether or not the shares of that series will be redeemable, and, if so, the terms and conditions of such redemption, including the date or date upon or after which they are redeemable, and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates; |
| 6. | Whether that series will have a sinking fund for the redemption or purchase of shares of that series, and, if so, the terms and amount of such sinking fund; |
| 7. | The rights of the shares of that series in the event of voluntary or involuntary liquidation, dissolution or winding up of the corporation, and the relative rights of priority, if any, of payment of shares of that series; and |
| 8. | Any other relative rights, preferences and limitations of that series. |
Page 17 of 39
Series AA Preferred Stock
The holders of the Series
AA Super Voting Preferred Stock together, voting separately as a class, shall have an aggregate vote equal to sixty-seven (
The holders of the Series AA Super Voting Preferred Stock shall not be entitled to receive dividends paid on the Company’s common stock.
Upon liquidation, dissolution and winding up of the affairs of the Company, whether voluntary or involuntary, the holders of the Series AA Super Voting Preferred Stock shall not be entitled to receive out of the assets of the Company, whether from capital or earnings available for distribution, any amounts which will be otherwise available to and distributed to the common shareholders.
The shares of the Series AA Super Voting Preferred Stock will not be convertible into the shares of the Company’s common stock.
As of March 31, 2025, and December 31, 2024, the
Company has
Series BB Preferred Stock
Effective on February 1, 2024, due to the fact that no shares of Series BB Preferred Stock were outstanding, the Board of Directors approved, and the Company filed, Certificates of Withdrawal of Certificate of Designations relating to such series of preferred stock with the Secretary of State of Nevada and terminated the designation of its Series BB Preferred Stock effective as of the same date.
As of March 31, 2025, and December 31, 2024, the Company had no preferred shares of Series BB Preferred Stock issued and outstanding.
Series CC Preferred Stock
Effective on February 1, 2024, due to the fact that no shares of Series CC Preferred Stock were outstanding, the Board of Directors approved, and the Company filed Certificates of Withdrawal of Certificate of Designations relating to such series of preferred stock with the Secretary of State of Nevada and terminated the designation of its Series CC Preferred Stock effective as of the same date.
As of March 31, 2025, and December 31, 2024, the Company had no preferred shares of Series CC Preferred Stock issued and outstanding.
Page 18 of 39
Series DD Preferred Stock
Each holder of outstanding
shares of Series DD Convertible Preferred Stock shall be entitled to its shares of Series DD Convertible Preferred Stock into a number
of fully paid and non-assessable shares of common stock determined by multiplying the number of issued and outstanding shares of common
stock of the Company on the date of conversion by
The holders of the Series DD Convertible Preferred Stock shall not be entitled to receive dividends paid on the Company’s common stock.
The holders of the Series DD Convertible Preferred Stock shall not be entitled to vote on any matter submitted to the shareholders of the Company for their vote, waiver, release or other action.
As of March 31, 2025, and December 31, 2024, the
Company had
Dividends
We have not paid any cash dividends to our shareholders. The declaration of any future cash dividends is at the discretion of our board of directors and depends upon our earnings, if any, our capital requirements and financial position, our general economic conditions, and other pertinent conditions. It is our present intention not to pay any cash dividends in the foreseeable future, but rather to reinvest earnings, if any, in our business operations.
NOTE 6 – RELATED PARTY TRANSACTIONS
In consideration of mutual covenants set forth
in the Professional Service Consulting Agreement, Dave Christensen, current Director, President, Chief Executive Officer, Chief Financial
Officer and Secretary, shall be compensated monthly based on an annual rate of $
On August 18, 2021, through a Stock Purchase Agreement
in which
Benito Novas’ brother, sister and nephew
provide marketing/administrative and training/R&D services to Global Stem Cells Group and were paid as consultants during the three
months ended March 31, 2025, and March 31, 2024, in the aggregate $
NOTE 7 – COMMITMENTS AND CONTINGENCIES
Pursuant to an Agreement between Global Stem Cell
Group and a lender dated November 17, 2020, in the event that any of Global Stem Cell Group, and/or the Entities and /or Parent (individually
the “Company” and collectively the “Companies”) dispose of any assets to any party or third party or parties (an
“Asset Disposition”), then Global Stem Cell Group shall undertake to cause such party, third party or parties to acquire the
perpetual right of a percentage of Global revenues from the investor. The consideration for the right shall be equal to the fair value
of the assets at the time of the Asset Disposition (the “Asset Disposition Payment”). The Asset Disposition Payment shall
not exceed
Page 19 of 39
During the period ending December 31, 2021, Global
Stem Cell Group, Inc. entered into the Cancun lease with HELLIMEX, S.A. DE CV beginning January 16, 2022, and ending on January 15, 2024.
The property is located in the Tulum Trade Center, consisting of
Due to the expansion of the Cancun Clinic, an
additional
On December 31, 2024, the Company signed a five-year
extension commencing on December 31, 2024, and ending on December 31, 2029, with a monthly rent of $
During the three months ended March 31, 2025,
and March 31, 2024, the Company paid $
NOTE 8 – PROPERTY AND EQUIPMENT, NET
Property and equipment, net consisted of the following:
| March 31, 2025 | December 31, 2024 | |||||||
| Computer, equipment and vehicles ( | $ | $ | ||||||
| Leasehold improvements ( | ||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Total property and equipment, net | $ | $ | ||||||
Depreciation expense for the three months ended
March 31, 2025, and March 31, 2024, was $
We evaluate the carrying value of long-lived assets for impairment on an annual basis or whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. Further testing of specific assets or grouping of assets is required when undiscounted future cash flows associated with the assets are less than their carrying amounts. An asset is considered to be impaired when the anticipated undiscounted future cash flows of an asset group are estimated to be less than its carrying value. The amount of impairment recognized is the difference between the carrying value of the asset group and its fair value. Fair value estimates are based on assumptions concerning the amount and timing of estimated future cash flows. We recorded no impairment of long-lived assets for the three months ended March 31, 2025, and the year ended December 31, 2024.
NOTE 9 – INTELLECTUAL PROPERTY
A third-party independent valuation specialist was asked to determine the value of Global Stem Cell Group, Inc., tangible and intangible assets assuming the offering price was at fair value. In order to perform the purchase price allocation, the tangible and intangible assets were valued as of August 18, 2021.
The Fair Value of the intangible assets as of the Valuation Date is reasonably represented as:
| March 31, 2025 | December 31, 2024 | |||||||
| Tradename - Trademarks | $ | $ | ||||||
| Intellectual Property / Licenses | ||||||||
| Customer Base | ||||||||
| Intangible assets | ||||||||
| Less: accumulated amortization | ( | ) | ( | ) | ||||
| Total intangible assets, net | $ | $ | ||||||
Page 20 of 39
Amortization is computed on straight-line method
based on estimated useful lives of
NOTE 10 – OPERATING LEASES
During the period ending December 31, 2021, Global
Stem Cell Group, Inc. entered into the Cancun lease with HELLIMEX, S.A. DE CV. The property is located in the Tulum Trade Center, consisting
of
In January 2022, the Company began the buildout of the clinic and began to order equipment. The Cancun facility was inaugurated in May 2022 and is accredited both by the Mexican General Health Council and Cofepris (Mexican FDA).
Due to the expansion of the Cancun Clinic, an
additional
On December 31, 2024, the Company signed a five-year
extension commencing on December 31, 2024, and ending on December 31, 2029, with a monthly rent of $
The following table summarizes the Company’s undiscounted cash payment obligations for its non-cancelable lease liabilities through the end of the expected term of the lease:
| 2025 | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Total undiscounted cash payments | ||||
| Less interest | ( | ) | ||
| Present value of payments | $ |
NOTE 11 – GOODWILL
On August 18, 2021, through a Stock Purchase Agreement,
we acquired
The preliminary purchase price for the merger
was determined to be $
Page 21 of 39
Under the acquisition method, the purchase price must be allocated to the reporting units net assets acquired, inclusive of intangible assets, with any excess fair value recorded to goodwill. The goodwill, which is not deductible for tax purposes, is attributable to the assembled workforce of Global Stem Cells Group, and the planned growth in new markets.
The following table summarizes the Company’s carrying amount of goodwill during the three months ended March 31, 2025, and the year ended December 31, 2024:
| Goodwill | ||||
| Balance at December 31, 2023 | $ | |||
| Acquisition | ||||
| Impairment | ||||
| Balance at December 31, 2024 | $ | |||
| Acquisition | ||||
| Impairment | ||||
| Balance at March 31, 2025 | $ | |||
During each fiscal year, we periodically assess whether any indicators of impairment exist which would require us to perform an interim impairment review. As of each interim period end during each fiscal year, we concluded that a triggering event had not occurred that would more likely than not reduce the fair value of our reporting unit below their carrying values. We performed our annual test of goodwill for impairment as of December 31, 2024.
The Company has recognized impairment of $
NOTE 12 – SUBSEQUENT EVENTS
In accordance with ASC 855-10, we have analyzed events and transactions that occurred subsequent to December 31, 2024, through the date these financial statements were issued and have determined that we do not, aside from the following, have any other material subsequent events to disclose or recognize in these financial statements.
On April 9, 2025, the Company entered into a Secured
Loan Agreement (the “Agreement”) with an otherwise unaffiliated third-party investor (the “Investor”), pursuant
to which the Company agreed to issue to the Investor a $
The Agreement further contemplates the issuance
of one share of the Company’s newly created Series CC Preferred Stock to the Investor and a ten-year warrant (the “Warrant”)
to purchase up to
From January 1, 2024, to the date of the Agreement,
the Investor had already funded $
Further under the Agreement, the Company agreed
that within
As a result of the Agreement, the Company filed
with the Nevada Secretary of State on April 10, 2025, the certificate of designation preferences of its series of preferred stock to create
a newly series of preferred stock designated as “Series CC Convertible Preferred Stock”, and the number of shares constituting
such series shall be
Page 22 of 39
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Forward-Looking Statements
This quarterly report contains forward-looking statements. Forward-looking statements are projections of events, revenues, income, future economic performance or management’s plans and objectives for our future operations. 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, including the risks in the section entitled “Risk Factors” and the risks set out below, any of which 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. These risks include, by way of example and not in limitation:
| ◾ | risks related to our outstanding secured and unsecured loans, certain of which are in default, and our ability to service debt; |
| ◾ | risks related to failure to obtain adequate financing on a timely basis and on acceptable terms to continue as going concern; |
| ◾ | the uncertainty of profitability based upon our history of losses; |
| ◾ | legislative or regulatory changes concerning regenerative medicine and therapies; |
| ◾ | risks related to our operations and uncertainties related to our business plan and business strategy; |
| ◾ | changes in economic conditions; |
| ◾ | uncertainty with respect to intellectual property rights, protecting those rights and claims of infringement of other’s intellectual property; |
| ◾ | competition; and |
| ◾ | cybersecurity concerns. |
This list is not an exhaustive list of the factors that may affect any of our forward-looking statements. These and other factors should be considered carefully, including those contained in our Annual Report on Form 10-K under “Risk Factors” for the year ended December 31, 2024, and readers should not place undue reliance on our forward-looking statements. Forward looking statements are made based on management’s beliefs, estimates and opinions on the date the statements are made, and we undertake no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change. 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 financial statements are stated in United States dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.
Overview
Since the acquisition of Global Stem Cell Group (GSCG) in August of 2021, our focus has been mainly dedicated to its operations serving the markets in the regenerative medicine industry. We believe stem cell therapy is becoming an increasingly effective clinical solution for treating conditions that traditional or conventional medicine only offers within palliative care and pain management. Patients around the world are seeking a natural regenerative alternative without the potential risks and side effects sometimes associated with traditional surgeries and /or conventional pharmaceuticals.
We work with doctors and their staff to provide products, solutions, equipment, services, and training to help them be successful in the application of Stem Cell Therapies. We also engage in patient procedures from treatments that GSCG is offering at its Cancun, Mexico clinic, and its clinic in a joint venture with an investor that is scheduled to open in 2025, extended from a prior launch date of November 23, 2024, located at the Hyatt Hotel in Jumeirah, a coastal residential area of Dubai UAE.
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Our team combines solutions from extensive clinical research with the manufacturing and commercialization of viable cell therapy and immune support related products that we believe will change the course of traditional medicine around the world forever. Our strategy allows us the ability to create immediate revenue streams through treatments, product sales, distribution, and clinical applications, driven by our extensive education platform. Our revenue comes directly from treating patients, our training and seminars, from the resale of kits, products, equipment, services, and from the reoccurring application of our process using the kits and solutions we provide.
Global Stem Cells Group is a leader in the Stem Cell and Regenerative Medicine fields, covering clinical research, patient applications, along with physician training through our state-of-the-art global network of companies. Its mission is to enable physicians to make the benefits of stem cell medicine a reality for patients around the world. GSCG has been educating doctors on the science and application of cell-based therapeutics for the past 10 years. Our professional trademarked association “ISCCA” INTERNATIONAL SOCIETY FOR STEM CELL APPLICATION is a global network of medical professionals that leverages these multinational relationships to build best practices and further our mission.
2025 Strategic Outlook
Our operational strategy for 2025 centers on translating our market position and technological advantages into sustainable revenue growth and expanded market share. We anticipate accelerated growth as we execute on our operational plans for clinic network expansion, manufacturing scale-up, and market penetration in key regions including Southeast Asia, Latin America, and potentially North America. We believe our diversified revenue streams from training, product sales, and clinical services provide a solid foundation for sustainable long-term growth and shareholder value creation.
Key performance indicators for 2025 are expected to include operational efficiency metrics, market penetration rates in target regions, production capacity utilization at our manufacturing facilities, and financial performance measures including revenue growth, profit margins, and return on invested capital. Our management team has implemented robust tracking and reporting systems to monitor these metrics and make data-driven adjustments to our execution strategy as needed throughout the year.
Expansion of Clinical Network
A cornerstone of our 2025 growth strategy is the continued expansion of the GSCG Network Clinics, representing our transition from a primarily educational and product-focused organization to a comprehensive regenerative medicine enterprise with direct patient care capabilities. This strategic evolution allows us to capture additional value in the treatment delivery phase while ensuring consistent application of our proprietary protocols.
For 2025, we have confirmed plans for the official launch of a minimum of four new clinic locations. These include strategically selected sites in Indonesia, Puerto Rico, Santiago (Chile), and Lisbon (Portugal). Each location has been chosen based on comprehensive market analysis, regulatory considerations, local healthcare ecosystem dynamics, and potential patient demographics. These new clinics will implement our standardized operational model while incorporating necessary adaptations for local market conditions and regulatory requirements.
Beyond these confirmed locations, our development pipeline includes additional planned clinics in Mexico, the United States, and other key international markets identified through our ongoing market analysis process. These locations are currently in various stages of development, from initial feasibility studies to advanced site selection and regulatory approval processes. Our network expansion follows a disciplined approach that balances growth opportunities with operational sustainability and quality control considerations.
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2025 Anticipated Clinic Launches
| ■ | Indonesia: Serving the rapidly growing Southeast Asian market |
| ■ | Puerto Rico: Strategic gateway between North and South American markets |
| ■ | Santiago, Chile: Expanding our Latin American presence |
| ■ | Lisbon, Portugal: Strengthening our European operations |
Network Clinic Standardization
Each RMTG/GSCG Network Clinic operates under our proprietary standards for facility design, equipment specifications, staff qualifications, treatment protocols, and patient management systems. This standardization ensures consistent quality of care while allowing for efficient scaling of operations across diverse geographic locations. Our clinic expansion model includes comprehensive support systems for practitioner training, operational management, quality assurance, and marketing development.
Manufacturing Scale-Up
A critical element of our 2025 strategic plan is the completion and full operational scaling of our manufacturing infrastructure. These facilities represent significant capital investments that will strengthen our vertical integration strategy, enhance product consistency, and improve operational margins across our business units. Our manufacturing capabilities directly support our ability to serve global markets with standardized, high-quality regenerative medicine products.
The Cancún facility, which achieved regulatory approval in 2024, will transition to full-scale production in 2025. This advanced manufacturing center is designed to support product demand across Latin America and beyond, with robust capacity for mesenchymal stem cell production, exosome isolation, and peptide synthesis. The facility incorporates state- of-the-art quality control systems, including real-time monitoring of production parameters, comprehensive batch testing protocols, and advanced storage capabilities for biological materials.
In parallel with optimizing our existing manufacturing operations, we are actively evaluating opportunities for additional manufacturing locations to further enhance production efficiency and geographic distribution capabilities. These evaluations include considerations such as proximity to key markets, local regulatory environments, availability of skilled workforce, and capital investment requirements. Any expansion of our manufacturing footprint will follow our established model of phased development with careful attention to regulatory compliance and operational excellence.
Production Capacity Expansion
Implementing phased scale-up of production volumes to match growing demand while maintaining strict quality parameters and operational efficiency.
Product Line Diversification
Expanding manufacturing capabilities to support new product development initiatives, including advanced exosome formulations and specialized peptide combinations.
Quality System Enhancement
Continuous improvement of quality management systems to exceed regulatory requirements and support potential future certifications in additional markets.
Distribution Network Integration
Optimizing logistics and supply chain operations to ensure efficient distribution of manufactured products to our clinic network and external customers.
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Educational Program Enhancement
The International Society for Stem Cell Application (ISSCA) continues to be a cornerstone of our business model and a primary driver of our industry leadership position. As the educational and professional development arm of Global Stem Cells Group, ISSCA plays a crucial role in establishing practice standards, disseminating knowledge, and creating a global community of trained regenerative medicine practitioners. In 2025, we will further strengthen ISSCA’s position and expand its reach through strategic initiatives.
A key focus for 2025 will be significantly increasing the number and geographical distribution of our training events and physician certifications. Building on our successful 2024 programs conducted across more than 20 countries, we will expand both our foundational certification courses and our advanced specialization programs. These educational offerings will continue to evolve to incorporate the latest scientific advances, clinical best practices, and regulatory considerations relevant to regenerative medicine applications.
Q1 2025
Launch enhanced certification curriculum incorporating latest advances in exosome technology and peptide applications, with programs scheduled in Mexico, United States, and Indonesia.
Q2 2025
Introduce advanced specialization tracks for orthopedic, aesthetic, and chronic disease applications of regenerative therapies, with dedicated symposia planned for European and South American markets.
Q3 2025
Deploy comprehensive online learning platform to complement in-person training, providing ongoing education resources and community engagement for certified practitioners.
Q4 2025
Host major international congress bringing together leading researchers, practitioners, and regulatory experts to address emerging trends and future directions in regenerative medicine.
In addition to expanding our educational programming, we will strengthen our partnerships with global medical institutions in 2025. These collaborations will include joint research initiatives, faculty exchange programs, and shared curriculum development with respected academic and clinical organizations. By aligning with established medical institutions, we enhance the credibility of our educational offerings while creating pathways for institutional adoption of regenerative medicine protocols. These partnerships also provide valuable opportunities for clinical validation of emerging treatments and technologies developed within our research network.
Market Development
We intend to strategically enter new geographic markets, particularly in North America, as regulatory environments evolve favorably for regenerative medicine applications.
The United States represents a significant opportunity for Global Stem Cells Group, both in terms of market size and potential for scientific collaboration. Our 2025 strategy includes focused initiatives to expand our clinical presence in the U.S. as regulatory frameworks evolve to accommodate advances in regenerative medicine. This strategic market entry requires careful navigation of complex regulatory considerations while positioning RMTG/GSCG as a leader in North American regenerative medicine.
Our approach to the U.S. market is characterized by strategic patience combined with proactive preparation. While regulatory pathways for certain regenerative medicine applications remain under development at the FDA, we are actively monitoring policy developments and engaging with industry associations to contribute to the evolving regulatory dialogue. This engagement allows us to align our product development and clinical protocols with emerging standards while advocating for science-based regulatory frameworks that protect patients while enabling innovation.
Page 26 of 39
Regulatory Navigation Strategy
We have established a dedicated U.S. regulatory affairs team to monitor FDA developments, prepare appropriate submissions, and develop compliant protocols for the U.S. market. This team works in close collaboration with legal advisors specializing in FDA regulations and regenerative medicine policy to ensure our market entry strategy adheres to all applicable requirements.
Clinical Partnership Development
In preparation for expanded U.S. operations, we are cultivating relationships with established U.S. medical institutions, research universities, and clinical practices interested in regenerative medicine applications. These partnerships are expected to facilitate knowledge exchange, protocol development, and potential collaborative research initiatives that align with U.S. regulatory expectations.
Educational Market Positioning
While developing our clinical strategy, we are enhancing our U.S. educational presence through ISSCA programs specifically designed for U.S. practitioners. These educational initiatives establish RMTG/GSCG as a thought leader in the U.S. market while building a community of trained physicians prepared to implement our protocols when regulatory pathways are established.
Our U.S. market entry strategy also includes evaluation of potential clinical locations in states with favorable regulatory environments for regenerative medicine. This location analysis considers factors such as existing medical infrastructure, patient demographics, physician density, and regulatory climate. By identifying optimal locations for initial U.S. clinical operations, we can better ensure efficient resource allocation and maximize the impact of our market entry efforts when regulatory conditions permit implementation.
Revenue Stream Diversification
A cornerstone of our financial strategy for 2025 is the continued diversification of our revenue streams, creating a balanced business model that reduces dependency on any single market segment while maximizing our ability to capture value across the regenerative medicine ecosystem. This diversified approach enhances our financial stability and provides multiple pathways for growth even as individual market segments experience fluctuations.
Central to our revenue diversification strategy is the strengthening of the Celgenic product line with new offerings in peptides, exosome therapies, and biologics. We believe these product categories represent significant growth opportunities as they address complementary therapeutic needs and can be used independently or in conjunction with our stem cell applications. Our 2025 product development roadmap includes the commercialization of several new formulations that have shown promising results in preliminary clinical applications.
In parallel with product development, we are enhancing our global distribution infrastructure to drive sales growth across all territories. This distribution strategy includes both direct sales to our network clinics and expanded relationships with qualified external partners who can effectively represent our products in their respective markets. Our distribution enhancements include improvements in logistics, inventory management, technical support, and sales training to ensure our products are effectively represented and properly utilized in clinical applications worldwide.
The continued expansion of our clinic network also represents a significant revenue diversification initiative, as it transitions more of our business model toward direct patient care services. These clinical operations generate recurring revenue streams from patient treatments while also creating demand for our manufactured products. The integration between our product development, manufacturing, and clinical service delivery creates valuable synergies that enhance overall profitability and market responsiveness.
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Operational Efficiency Initiatives
As Global Stem Cells Group transitions from a growth phase characterized by rapid expansion into a period of operational consolidation, we are implementing comprehensive efficiency initiatives designed to optimize our processes, reduce costs, and enhance productivity across all business units. These operational improvements will be a key focus area for 2025, supporting our ability to deliver consistent profitability while maintaining our commitment to quality and innovation.
Our operational efficiency strategy encompasses several interconnected dimensions: process standardization, technology integration, workforce development, and continuous improvement methodologies. By addressing these elements systematically, we hope to create a foundation for sustainable operational excellence that supports our long-term growth objectives while enhancing near-term financial performance.
Process Standardization
Implementation of standardized operating procedures across all locations to ensure consistency, quality, and efficiency. This includes uniform protocols for manufacturing, clinical practices, training delivery, and administrative functions, allowing for better resource allocation and performance benchmarking.
Technology Integration
Deployment of integrated information systems to connect our global operations, enhance data accessibility, and improve decision-making capabilities. Future key initiatives on our longer roadmap may include implementation of enterprise resource planning (ERP) systems, laboratory information management systems, and customer relationship management platforms.
Workforce Development
Strategic investment in employee training and development programs to enhance skills, improve productivity, and reduce turnover. Our talent development initiatives focus on technical capabilities, leadership development, and cross- functional understanding to build a versatile workforce aligned with our strategic objectives.
Continuous Improvement
Additional future roadmap includes designs for the adoption of structured methodologies such as Lean and Six Sigma to identify and eliminate inefficiencies, reduce variation, and optimize resource utilization. These approaches are being integrated into our operational culture through training, incentive alignment, and visible management support.
The operational efficiency initiatives will be supported by enhanced performance metrics and accountability structures designed to track progress and identify areas requiring additional attention. Our management team has established specific efficiency targets for each business unit, with regular review processes to assess performance and adjust implementation strategies as needed. These metrics are directly tied to our financial objectives and will be a key component of management performance evaluation in 2025.
Research and Development Pipeline
Continued investment in research and development remains a strategic priority for Global Stem Cells Group as we work to expand our therapeutic capabilities, enhance treatment efficacy, and maintain our position at the forefront of regenerative medicine innovation. Our R&D activities span basic science investigation, translational research, and clinical application development, creating a comprehensive innovation pipeline that supports both near-term product enhancements and longer-term technological breakthroughs.
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Our 2025 R&D strategy focuses on several key areas that represent significant opportunities for advancement in regenerative medicine. These focus areas have been selected based on emerging scientific evidence, unmet clinical needs, and alignment with our existing capabilities and infrastructure. By concentrating our research efforts on these strategic priorities, we optimize our resource allocation while maximizing potential impact on patient outcomes and market growth.
| 1. | Exosome Characterization and Optimization: |
Advanced analysis of exosome content and function to enhance therapeutic applications
| 2. | Combination Therapy Protocols: |
Development of synergistic treatment approaches combining stem cells, exosomes, and peptides
| 3. | Tissue-Specific Regeneration Techniques: |
Specialized protocols for targeted regeneration of specific tissue types and organs
| 4. | Biomarker Identification and Validation: |
Discovery of predictive indicators for treatment response and outcome measurement
| 5. | Delivery System Innovations: |
Novel approaches to enhance cellular therapy delivery, targeting, and persistence
Our R&D activities are supported by a network of collaborations with academic institutions, research organizations, and clinical partners that provide access to specialized expertise, advanced technologies, and diverse patient populations. These collaborative relationships accelerate our innovation cycle while ensuring our research directions remain aligned with evolving scientific understanding and clinical practice. In 2025, we plan to expand these collaborative networks with particular emphasis on partnerships that can support our U.S. market entry strategy and enhance our credibility in key international markets.
The integration between our R&D activities and our clinical network creates a powerful feedback loop that informs research priorities based on real-world clinical observations while facilitating the rapid translation of research findings into clinical applications. This translational approach differentiates GSCG from purely academic research organizations and enables us to quickly adapt our product offerings and treatment protocols to incorporate emerging scientific insights and technological capabilities.
Financial Outlook and Investment Strategy
Global Stem Cells Group enters 2025 with a robust financial foundation and a clear strategy for balancing continued growth investments with improving profitability metrics. Our financial management approach emphasizes disciplined capital allocation, operational cost control, and strategic investments in high-potential growth opportunities. This balanced approach is designed to deliver sustainable long-term value for our stakeholders while maintaining the financial flexibility needed to respond to evolving market conditions.
Our 2025 financial projections reflect the impact of our operational efficiency initiatives, continued revenue diversification, and the maturation of investments made in previous years. We anticipate accelerating revenue growth as our manufacturing facilities reach optimal production capacity and our expanded clinic network generates increasing patient volumes. These revenue improvements, combined with operational efficiencies, are expected to drive margin expansion and enhance overall profitability metrics throughout the year.
Our capital investment strategy for 2025 prioritizes high-impact projects that directly support our core strategic objectives. Major investment categories include clinic network expansion, manufacturing capacity optimization, technology infrastructure enhancements, and targeted R&D initiatives. Each investment proposal undergoes rigorous evaluation using standardized criteria including expected return on investment, strategic alignment, risk assessment, and implementation timeline. This disciplined approach ensures our capital resources are allocated to opportunities with the greatest potential for value creation.
In parallel with our operational investments, we continue to evaluate strategic acquisition opportunities that could accelerate our growth in key markets or enhance our technological capabilities. Our acquisition strategy focuses on targets that offer clear synergies with our existing operations, have compatible corporate cultures, and can be integrated efficiently into our operational structure. While we maintain an active acquisition pipeline, we approach each opportunity with disciplined valuation parameters and clear integration planning to ensure successful outcomes.
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Results of Operations
Below is a summary of the results of operations for the three months ended March 31, 2025, and 2024.
| For the Three Months Ended March 31, | ||||||||||||||||
| 2025 | 2024 | $ Change | % Change | |||||||||||||
| Revenue | $ | 1,364,341 | $ | 817,034 | $ | 547,307 | 66.99 | % | ||||||||
| Cost of revenue | 420,447 | 248,043 | 172,404 | 69.51 | % | |||||||||||
| Gross profit | 943,894 | 568,991 | 374,903 | 65.89 | % | |||||||||||
| Operating expenses | ||||||||||||||||
| Advertising and marketing | 157,321 | 144,283 | 13,038 | 9.04 | % | |||||||||||
| Professional fees | 331,733 | 248,382 | 83,351 | 33.56 | % | |||||||||||
| Officer compensation | 22,500 | 22,500 | - | 0.00 | % | |||||||||||
| Depreciation and amortization expense | 51,814 | 76,572 | 24,758 | -32.33 | % | |||||||||||
| Investor relations | - | 23,268 | (23,268 | ) | -100.00 | % | ||||||||||
| General and administrative | 245,566 | 159,091 | 86,475 | 54.36 | % | |||||||||||
| Total operating expenses | 808,934 | 674,096 | 134,838 | 20.00 | % | |||||||||||
| Net income (loss) from operation | 134,960 | (105,105 | ) | 240,065 | -228.40 | % | ||||||||||
| Other income (expense) | ||||||||||||||||
| Interest expense | (893,850 | ) | (1,854,417 | ) | 960,567 | -51.80 | % | |||||||||
| Gain (loss) on derivative | ||||||||||||||||
| financial instruments | (1,149 | ) | (1,498 | ) | 349 | -23.30 | % | |||||||||
| Total other income (expense) | (894,999 | (1,855,915 | ) | 960,916 | -51.78 | % | ||||||||||
| Net loss | $ | (760,040 | ) | $ | (1,961,020 | ) | $ | 1,200,980 | -61.24 | % | ||||||
Revenue
Revenue increased by 66.99% in the amount of $547,307 for the three months ended March 31, 2025, compared to the same period in 2024. The increase in revenue was a result of marketing and sales efforts to increase brand recognition and exposure in the industry. We experienced more lead generation in 2023 increasing equipment, products, and training sales in regions like Southeast Asia and the Middle East. The opening of the Cancun facility in the second half of 2022 also increased sales by providing a facility for physicians to come for training and perform patient procedures.
We expect that our revenues will increase in future quarters as a result of our ongoing marketing and brand awareness campaigns, training seminars, lectures and other efforts we engage in that expand our presence in the industry and provide us with more opportunities to sell our products. We also expect revenues to increase with the opening of our new clinic in Dubai, UAE, in 2025. This clinic, alongside our existing clinic in Cancun, will also provide a facility for physicians to come for training and perform patient procedures.
We have also added new regenerative products that are expected to further increase revenue. In August 2024, we introduced our new line of innovative Cellgenic peptides. This new product line is expected to play a crucial role in the field of regenerative medicine. Our Cellgenic peptides have the potential to address the following health concerns: healing and recovery from injuries, enhancing muscle recovery and reducing inflammation, enhancing tanning and improving sexual function, improving body composition and metabolic health, managing weight loss and diabetes, among other potential health potential benefits.
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The following table presents our revenue by product category for the three months ended March 31, 2025, and 2024:
| For the Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Training | $ | 144,920 | $ | 110,333 | ||||
| Product supplies | 626,656 | 355,481 | ||||||
| Equipment | - | 96,810 | ||||||
| Patient procedures | 592,765 | 254,410 | ||||||
| Total revenue | $ | 1,364,341 | $ | 817,034 | ||||
Operating expenses
Operating expenses increased by 20.00% in the amount of $134,838 for the three months ended March 31, 2025, compared to the same period in 2024. Listed below are the major changes to operating expenses:
Advertising and marketing fees increased by $13,038 for the three months ended March 31, 2025, compared to the same period in 2024, primarily due to a decrease in advertising by Global Stem Cells Group.
Professional fees increased by $83,351for the three months ended March 31, 2025, compared to the same period in 2024, primarily due to expansion of the Cancun facility.
Depreciation and amortization decreased by $24,758 for the three months ended March 31, 2025, compared to the same period in 2024, primarily due to a five-year lease extension on the Cancun facility.
Investor relations decreased by $23,268 for the three months ended March 31, 2025, compared to the same period in 2024, primarily due to an agreement with an investor relation firm in February 2024 cancelled.
General and administrative expenses increased by $86,475 for the three months ended March 31, 2025, compared to the same period in 2024, primarily due to Cancun renovations.
We expect our overall operating expenses to increase into 2025 as we further implement our business plan. We expect increases in future quarters over all major categories as we engage in efforts to increase brand awareness with our products and services, including advertising campaigns and investor relation services. We also expect an increase in general operating costs and growth initiatives as we ramp up operations and seek to expand them. The opening of a new clinic 2025, in Dubai, UAE is also expected to increase our operating expenses with a new lease of property, staff, equipment and other expenses associated with this growth initiative.
Other expenses
Other expenses decreased by $960,916 for the three months ended March 31, 2025, compared to the same period in 2024, primarily as a result of a decrease in amortization of discount and finance charges of $1,024,778 offset by an increase of $64,211 of interest on promissory notes.
We had interest expense of $893,850 and $1,854,417 for the three months ended March 31, 2025, and 2024, respectively.
We expect to continue to experience high interest payments in the future as a result of our outstanding liabilities. If we are unable to generate sufficient revenues and/or additional financing to service this debt, there is a risk the lenders will call the notes, and we will be unable to repay the loans. If this happens, we could go out of business.
Net Loss
We recorded a net loss of $760,040 for the three months ended March 31, 2025, as compared with a net loss of $1,961,020 for the same period in 2024.
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Liquidity and Capital Resources
Since inception, the Company has financed its operations through private placements, convertible notes, and unsecured and secured debt.
The following is a summary of the cash and cash equivalents as of March 31, 2025, and December 31, 2024.
| March 31, 2025 | December 31, 2024 | $ Change | % Change | |||||||||||||
| Cash and cash equivalents | $ | 1,222,929 | $ | 1,165,820 | $ | 57,109 | 4.90 | % | ||||||||
Summary of Cash Flows
Below is a summary of our cash flows for the three months ended March 31, 2025, and 2024.
| For the Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Net cash provided by (used in) operating activities | $ | 57,109 | $ | 107,966 | ||||
| Net cash used in investing activities | - | (59,154 | ) | |||||
| Net cash used in financing activities | - | - | ||||||
| Net increase (decrease) in cash and cash equivalents | $ | 57,109 | $ | 48,812 | ||||
Operating activities
Net cash provided by operating activities was $57,109 during the three months ended March 31, 2025, and consisted of a net change in operating assets and liabilities of $764,186 and non-cash items of $52,963, offset by a net loss of $760,040 The non-cash items for the three months ended March 31, 2025, consisted of depreciation and amortization expenses of $51,814 and change in derivative liabilities of $1,149.
Net cash provided by operating activities was $107,966 during the three months ended March 31, 2024, and consisted of a net loss of $1,961,020, which was offset by a net change in operating assets and liabilities of $966,138 and non-cash items of $1,102,848. The non-cash items for the three months ended March31, 2024, consisted of depreciation and amortization expenses of $76,572, amortization of debt discount of $1,024,778, and change in derivative liabilities of $1,498. The significant change in operating assets and liabilities was an increase in accounts payable and accrued liabilities, partially offset by the decrease in accounts receivable and prepaid expense.
Investing activities
We had no financing activities for the three months ended March 31, 2025.
Net cash used in investing activities was $59,154 and consisted of the purchase of property and equipment associated with the expansion of the Cancun facility during the three months ended March 31, 2024.
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Financing activities
We had no financing activities for the three months ended March 31, 2025, and 2024.
Since our inception, we have financed our operations through private placements, convertible notes, and unsecured debt, and we have also issued debt in our company secured by all of our assets. We expect to continue to experience high interest payments in the future as a result of our outstanding liabilities. Additionally, as of the date of this report, there are a number of secured promissory notes with an aggregate principal amount of approximately $14,472,797 that have matured and are in default. Finally, we also have a number of unsecured promissory notes with an aggregate principal amount of $3,257,935 that have matured and are currently in default. The company is currently in debt restructuring talks, and there are also other lenders as well who have demonstrated interest in assuming this debt. However, if we are unable to generate sufficient revenues and/or additional financing to service this debt, there is a risk the lenders will call the notes, secure our assets, as to those applicable secured notes, and demand payment. If after all these recourses are exhausted and the debt becomes unresolvable, like any other company, there’s a risk we could go out of business.
At March 31, 2025, we had limited cash of $1,222,929, a substantial working capital deficit, and although our revenues have increased, future losses are anticipated. Based upon the current financial condition, we do not have sufficient cash to operate our business at the current level for the next twelve months. We intend to fund operations through increased sales and debt and/or equity financing arrangements, which may be insufficient to fund expenditures or other cash requirements. We plan to seek additional financing in a private equity offering to secure funding for operations. There can be no assurance that we will be successful in raising additional funding. If we are not able to secure additional funding, the implementation of our business plan will be impaired, and we could go out of business. There can be no assurance that such additional financing will be available to us on acceptable terms or at all.
Going Concern
The financial statements have been prepared assuming the Company will continue as a going concern. The Company has incurred losses since inception, resulting in an accumulated deficit of approximately $68,313,141 and a working capital deficit of $28,427,024 as of March 31, 2025, and future losses are anticipated. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern.
The ability of the Company to continue its operations as a going concern is dependent on management’s plans, which include the raising of capital through debt and/or equity markets with some additional funding from other traditional financing sources, including term notes, until such time that funds provided by operations are sufficient to fund working capital requirements.
The Company will require additional funding to finance the growth of its current and expected future operations as well to achieve its strategic objectives. There can be no assurance that financing will be available in amounts or terms acceptable to the Company, if at all. The accompanying 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. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.
Off-Balance Sheet Arrangements
As of March 31, 2025, the Company had no off-balance sheet arrangements.
Critical Accounting Policies
Our critical accounting policies have not materially changed during the quarter ended March 31, 2025. Furthermore, the preparation of our financial statements is in conformity with generally accepted accounting principles in the United States of America, or GAAP. The preparation of our financial statements requires management to make judgments and estimates that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting period. Our management believes that we consistently apply these judgments and estimates, and the financial statements fairly represent all periods presented. However, any differences between these judgments and estimates and actual results could have a material impact on our statements of income and financial position.
Derivative Instruments
The derivative instruments are accounted for as liabilities, the derivative instrument is initially recorded at its fair market value and is then re-valued at each reporting date, with changes in fair value recognized in operations for each reporting period. The Company uses the Monte Carlo option pricing model to value the derivative instruments.
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Stock Based Compensation
Share-based compensation issued to employees is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period. The Company measures the fair value of the share-based compensation issued to non-employees at the grant date using the stock price observed in the trading market (for stock transactions) or the fair value of the award (for non-stock transactions), which were considered to be more reliably determinable measures of fair value than the value of the services being rendered.
New Accounting Pronouncements
Recently adopted accounting pronouncements require public companies to disclose the impact of new standards on their financial statements, including details about the standard, the adoption date, method of adoption, and expected effects. These disclosures help investors understand how changes in accounting principles will affect a company’s financial performance and position.
Recently Adopted Accounting Pronouncements. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280). The amendments in this update expand segment disclosure requirements, including new segment disclosure requirements for entities with a single reportable segment among other disclosure requirements. This update is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Adoption of this standard is on a modified retrospective basis and had no impact on the Company’s financial position, results of operations, cash flows or net income per share. As of 2024 and 2023 the Company had one reporting segment, all revenue is reported under this segment Global Stem Cells Group.
Other accounting standards and amendments to existing accounting standards that have been issued and have future effective dates are not applicable or are not expected to have a significant impact on the Company’s consolidated financial statements.
Revenue Recognition
In accordance with FASB ASC 606, Revenue from Contracts with Customers, we determine revenue recognition through the following steps:
| (1) | Identify the contract with a customer |
| (2) | Identify the performance obligations in the contract |
| (3) | Determine the transaction price |
| (4) | Allocate the transaction price to each performance obligation in the contract |
| (5) | Recognize revenue when each performance obligation is satisfied |
The Company’s main source of revenue is comprised of the following:
| ● | Training-GSCG offers a Stem Cell & Exosomes Certification Program where physicians attending these training sessions will take advantage of a full review of stem cell biology, characterization and regenerative properties of cells and cell products, cytokines and growth factors and how they can be applied in a clinic setting. The physicians will pay for the training sessions upfront and receive all the material and certificate upon completion of seminar. Completion of the seminar is when control is transferred and when revenue is recognized. |
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| ● | Products-Physicians can order products through GSCG, which includes EC Certificate from Institute for Testing and Certificating, Inc. Products are paid for upfront and shipped from GSCG directly to physicians or picked up physicians at seminars or training events. Transfer of control is when the product is shipped or picked up at seminars or training events, which is when revenue is recognized. |
| ● | Equipment- Physicians can order equipment through GSCG, which includes a warranty from manufacture of equipment. Equipment is paid for upfront and shipped from manufacture directly to physicians or shipped from GSCG to physicians. Transfer of control is when the equipment is shipped, which is when revenue is recognized. |
| ● | Patient Procedures - Patient procedures are the treatments GSCG is offering at its Cancun clinic. Once the patient agrees with the treatment plan and estimate, the procedure is scheduled with a deposit. The procedure can be cancelled up to 21 days from scheduled treatment date with a 50% refund of deposit, which is when deposit is recognized as revenue. The transfer of control is when the procedures are completed, which is when revenue is recognized. |
The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product to a customer or as services are performed. Revenue is measured based on the consideration the Company receives in exchange for those products
Use of Estimates
The preparation of these 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 at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The significant estimates included in these financial statements are associated with accounting for the goodwill, derivative liability valuations, valuation of preferred stock, fair value estimates, valuation of assets and liabilities in business combination and in its going concern analysis.
Fair Value of Financial Instruments
The fair value of financial instruments, which include cash, accounts payable and accrued expenses and advances from related parties were estimated to approximate their carrying values due to the immediate or short-term maturity of these financial instruments. Management is of the opinion that the Company is not exposed to significant interest, currency or credit risks arising from financial instruments.
Fair value is defined as the price which would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-tier fair value hierarchy which prioritizes the inputs used in the valuation methodologies, as follows:
| Level 1 | Inputs - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. |
| Level 2 | Inputs - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means. |
| Level 3 | Inputs - Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities. |
At March 31, 2025, and December 31, 2024, the carrying amounts of the Company’s financial instruments, including cash, account payables, and accrued expenses, approximate their respective fair value due to the short-term nature of these instruments.
At March 31, 2025, and December 31, 2024, the Company does not have any assets or liabilities except for derivative liabilities related to convertible notes payable required to be measured at fair value in accordance with FASB ASC Topic 820, Fair Value Measurement.
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| Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
We are not required to provide the information required by this Item because we are a smaller reporting company.
| Item 4. | Controls and Procedures |
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports, filed under the Securities Exchange Act of 1934, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable and not absolute assurance of achieving the desired control objectives. In reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. In addition, the design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, a control may become inadequate because of changes in conditions or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
As required by the SEC Rules 13a-15(b) and 15d-15(b), we carried out an evaluation under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on the foregoing, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weaknesses described below.
| 1. | We do not have written documentation of our internal control policies and procedures. Written documentation of key internal controls over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act which is applicable to us for the three months ended March 31, 2025. Management evaluated the impact of our failure to have written documentation of our internal controls and procedures on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness. |
| 2. | We have inadequate controls to ensure that information necessary to properly record transactions is adequately communicated on a timely basis from non-financial personnel to those responsible for financial reporting. Management evaluated the impact of the lack of timely communication between non–financial personnel and financial personnel on our assessment of our reporting controls and procedures and has concluded that the control deficiency represented a material weakness. | |
| 3. | The Company failed to account for the acquisition of GSCG using the full purchase accounting method in accordance with ASC 805. |
To address these material weaknesses, management engaged financial consultants, performed additional analyses and other procedures to ensure that the financial statements included herein fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented. We have not remedied the material weaknesses as of March 31, 2025. The Company plans to take remedial action to address these weaknesses during the fiscal year ended December 31, 2025.
Changes in Internal Control Over Financial Reporting
There has been no change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) of the Exchange Act that occurred during the nine months ended March 31, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting, except the implementation of the controls identified above.
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PART II – OTHER INFORMATION
| Item 1. | Legal Proceedings |
To the Company’s knowledge, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our Company or any of our subsidiaries, threatened against or affecting our Company, our common stock, any of our subsidiaries or of our Company’s or our Company’s subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.
| Item 1A. | Risk Factors |
Our business faces many risks, a number of which are described in the section captioned “Risk Factors” in our Annual Report for the year ended December 31, 2024, filed with the SEC on April 15, 2025. The risks described may not be the only risks we face. Other risks of which we are not yet aware, or that we currently believe are not material, may also materially and adversely impact our business operations or financial results. If any of the events or circumstances described in the risk factors contained in our Annual Report occur, our business, financial condition or results of operations could be adversely impacted and the value of an investment in our securities could decline. Investors and prospective investors should consider the risks described in our Annual Report, and the information contained in the section captioned “Forward-Looking Statements” and elsewhere in this Quarterly Report before deciding whether to invest in our securities.
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
None.
| Item 3. | Defaults Upon Senior Securities |
The current portion of notes payable on the Company’s Condensed Consolidated Balance Sheets above contains, at March 31, 2025, certain promissory notes on which the Company was in arrears on payments of principal as follows:
| ● | On November 17, 2020, the Company entered into an unsecured promissory note in the amount of $400,000. Pursuant to the terms of the note, the investor shall receive the right to a perpetual 7.75% (payment percentage) of the revenues of Global Stem Cell Group. As of March 31, 2025, the Company accrued $813,655 in interest expense. The note is currently in default due to the non-payment of interest. |
| ● | On December 7, 2020, the Company entered into a secured promissory note in the amount of $2,872,797. Pursuant to the terms of the note, the note bears fifteen (15%) interest, unsecured and is due on November 23, 2023. As of March 31, 2025, the Company accrued $2,423,688 in interest expense. The note is currently in default. |
| ● | On December 9, 2020, the Company entered into an unsecured promissory note in the amount of $110,000. Pursuant to the terms of the note, the note bears fifteen (15%) interest, unsecured and is due on December 9, 2023. As of March 31, 2025, the Company accrued $92,657 in interest expense. The note is currently in default |
| ● | On January 6, 2021, the Company entered into an unsecured promissory note in the amount of $1,000,000. Pursuant to the terms of the note, the note bears fifteen (15%) interest, unsecured and is due on January 6, 2022. As of March 31, 2025, the Company accrued $845,218 in interest expense. The note is currently in default |
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| ● | On June 22, 2021, the Company entered into a secured promissory note in the amount of $11,600,000. Pursuant to the terms of the note, the note bears twelve (12%) interest, unsecured and is due on July 30, 2024. As of March 31, 2025, the Company accrued $6,331,554 in interest expense. The note is currently in default. |
| ● | On December 30, 2021, the Company entered into an unsecured promissory note in the amount of $7,958. Pursuant to the terms of the note, the note bears twelve (12%) interest, unsecured and is due on July 30, 2023. As of March 31, 2025, the Company accrued $3,599 in interest expense. The note is currently in default. |
| ● | On December 30, 2021, the Company entered into an unsecured promissory note in the amount of $111,470. Pursuant to the terms of the note, the note bears twelve (12%) interest, unsecured and is due on July 30, 2023. As of March 31, 2025, the Company accrued $50,414 in interest expense. The note is currently in default. |
At March 31, 2025, and December 31, 2024, the Company had insufficient cash on hand to repay these notes. None of these notes have been paid, and management has indicated that no demand for payment for any of these notes has been received by the Company as of the date of this report. If we are unable to generate sufficient revenues and/or additional financing to service this debt, there is a risk the lenders will call the notes, secure our assets, as to those applicable secured notes, and demand payment. If this happens, we could go out of business.
| Item 4. | Mine Safety Disclosures |
N/A
| Item 5. | Other Information |
| Item 6. | Exhibits |
| Exhibit Number |
Description of Exhibit | |
| 31.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 31.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 32.1 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 101** | The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 formatted in Extensible Business Reporting Language (XBRL). | |
| 101.INS** | Inline XBRL Instance Document. | |
| 101.SCH** | Inline XBRL Taxonomy Extension Schema Document. | |
| 101.CAL** | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |
| 101.DEF** | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |
| 101.LAB** | Inline XBRL Taxonomy Extension Label Linkbase Document. | |
| 101.PRE** | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
| ** | Provided herewith |
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SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report on Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized.
| Dated May 20, 2025 | Regenerative Medical Technology Group Inc. | |
| By: | /s/ David Christensen | |
| David Christensen | ||
| President, Chief Executive Officer, Chief Financial Officer, Secretary and Director (Principal Executive Officer) (Principal Financial Officer) (Principal Accounting Officer) | ||
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