Bio-Matrix Scientific Group, Inc. 10-QSB
 
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-QSB

Quarterly Report under Section 13 or 15 (d) of
Securities Exchange Act of 1934

For Period ended December 31, 2006

Commission File Number 0-32201

BIO MATRIX SCIENTIFIC GROUP, INC.
(Exact name of registrant as specified in its charter)
 
DELAWARE
33-0824714
(State of Incorporation)
(I.R.S. Employer Identification No.)
 
 
 
 
8885 Rehco Road, San Diego, California
92121
(Address of Principal Executive Offices)
(Zip Code)

(619) 398-3517
(Registrant's telephone number, including area code)
 


Check whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes [X] No [ ]

There were 16,733,289 shares of Common Stock outstanding as of February 14, 2007.
 
 
1


PART I.

Item 1: Financial Statements


Chang G. Park, CPA, Ph. D.
t 371 E STREET t CHULA VISTA t CALIFORNIA 91910-2615t
t TELEPHONE (858)722-5953 t FAX (858) 408-2695 t FAX (858) 764-5480
t E-MAIL changgpark@gmail.com
 


 Report of Independent Registered Public Accounting Firm
 
To the Board of Directors of
Bio-Matrix Scientific Group, Inc. and Subsidiary
(Formerly Tasco International, Inc.)
(A Development Stage Company)


We have reviewed the consolidated accompanying balance sheet of Bio-Matrix Scientific Group, Inc. and Subsidiary (Formerly Tasco International, Inc) (A Development Stage “Company”) as of December 31, 2006, and the related consolidated statements of operation, changes in stockholders’ equity, and cash flows for the three months ended December 31, 2006; and for the period from October 6, 1998 (inception) through December 31, 2006. These financial statements are the responsibility of the Company’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the consolidated financial statements referred to above for them to be in conformity with generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 5 to the consolidated financial statements, the Company is currently in the development stage. Because of the Company’s current status and limited operations there is substantial doubt about its ability to continue as a going concern. Management’s plans in regard to its current status are also described in Note 5. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.



/s/ Chang G Park
___________________________
Chang G. Park, CPA

February 12, 2007
Chula Vista, California

 
2
 
(FORMERLY TASCO INTERNATIONAL, INC.)
(A Development Stage Company)
Consolidated Balance Sheets

ASSETS
 
          
 
 
As of December 31, 2006
(unaudited)
 
As of September 30, 2006
  
CURRENT ASSETS
          
  Cash
   $ 
14,991
   $
22,641
  
  Receivable
    
74
        
  Pre-paid Expenses
    
-
    
20,207
  
 
              
      Total Current Assets
    
15,065
    
42,848
  
               
PROPERTY & EQUIPMENT
    
365,070
    
340,557
  
               
GOODWILL
    
-
        
               
Intangible Assets/Technology
    
-
        
               
Total Other Assets
    
29,127
    
29,127
  
               
TOTAL ASSETS
    
409,262
    
412,532
  

The accompanying Notes are an integral part of these financial statements
 
3
 
BIO-MATRIX SCIENTIFIC GROUP, INC. AND SUBSIDIARY
(FORMERLY TASCO INTERNATIONAL, INC.)
(A Development Stage Company)
Consolidated Balance Sheets
 
    LIABILITIES AND STOCKHOLDERS' EQUITY
    
As of December 31, 2006
(unaudited)
    
As of September 30, 2006
  
     
 
        
CURRENT LIABILITIES
              
  Accounts payable
   $
54,223
   $
91,079
  
  Loans from former parent
    
-
    
1,195,196
  
  Notes Payable
    
188,324
    
148,952
  
  Accrued Payroll
    
4,000
    
-
  
  Accrued Payroll Taxes
    
1,387
    
16,460
  
  Accrued Interest
    
3,748
    
1,368
  
  Accrued Expenses
    
3,863
    
-
  
               
        Total Current Liabilities
    
255,545
    
1,453,055
  
               
LONG TERM LIABILITIES
    
-
    
-
  
TOTAL LIABILITIES
    
255,545
    
1,453,055
  
               
STOCKHOLDERS' EQUITY
              
Preferred Stock ($.0001 par value authorized 20,000,000 shares authorized; none issued and outstanding.)
              
Common Stock, ($.0001 par value authorized 80,000,000 shares authorized; 16,493,389 shares and 13,385,000 
  shares issued and outstanding as of December 31, 2006 and September 30, 2006)
    
1,649
    
1339
  
Additional paid in Capital
    
32,035,693
    
30,375,584
  
Deficit accumulated during the development stage
    
(31,883,625
 )   
(31,417,446
 )
               
    Total Stockholders' Equity (Deficit)
    
153,717
    
(1,040,523
 ) 
               
 
              
TOTALLIABILITIES & STOCKHOLDERS' EQUITY
   $ 
409,262
   $
412,532
  

 The accompanying Notes are an integral part of these financial statements
 
4
 
BIO-MATRIX SCIENTIFIC GROUP, INC. AND SUBSIDIARY
(FORMERLY TASCO INTERNATIONAL, INC.)
(A Development Stage Company)
Consolidated Statements of Operations
(unaudited)
 
            
 Inception
 
            
 (October 6, 1998)
  
   
3 Months Ended
  
 3 Months Ended
  
 through
  
   
Dec 31,
  
 Dec 31,
  
 Dec 31,
  
   
2006
  
 2005
  
 2006
  
   
(unaudited)
  
 (unaudited)
  
 (unaudited)
  
REVENUES
                
Sales
  
$
-
  
$
-
  
$
1,000
  
                     
Total Revenues
    
-
    
-
    
1,000
  
                     
COSTS AND EXPENSES
                    
Research and Development
    
108,489
          
136,164
  
General and administrative
    
224,673
    
250
    
1,051,368
  
Depreciation and amortization
    
333
    
-
    
666
  
Consulting and professional fees
    
125,840
    
-
    
916,475
  
Impairment of goodwill & intangibles
    
-
          
29,777,222
  
                     
Total Costs and Expenses
    
459,335
    
250
    
31,881,895
  
                     
                     
OPERATING LOSS
    
(459,335
)
  
(250
)
  
(31,880,395
)
                     
OTHER INCOME & (EXPENSES)
                    
                     
Interest Expense
    
(6,844
)
  
-
    
(8,212
)
Interest Income
    
-
    
11
    
39
  
Other income
    
-
    
-
    
5,443
  
                     
Total Other Income & (Expenses)
    
(6,844
)
  
11
    
(2,730
)
                     
                     
NET INCOME (LOSS)
  
$
(466,179
)
$
(239
)
$
(31,883,625
)
                     
BASIC AND DILUTED EARNINGS (LOSS) PER SHARE
                    
                     
BASIC AND DILUTED EARNINGS (LOSS) PER SHARE
  
$
(0.03
)
$
(0.00
)
$
-
  
                     
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
    
15,275,294
    
12,780,000
    
-
  
 
The accompanying Notes are an integral part of these financial statements
 
5
 
BIO-MATRIX SCIENTIFIC GROUP, INC. AND SUBSIDIARY
(FORMERLY TASCO INTERNATIONAL, INC.)
(A Development Stage Company)
Consolidated Statements of Changes in Stockholders' Equity (Deficit)
From October 6, 1998 (inception) through December 31, 2006
(unaudited)
 
 
  
Common
  
Additional Paid-in
  
Retained
  
 
  
 
  
Shares
  
Amount
  
Capital
  
Earnings
  
Total
 
Stock issued for cash October 6, 1998
    
1,000,000
    
100
    
(90
)
        
10
  
Stock issued for cash October 9, 1998
    
1,300,000
    
130
    
1,170
          
1,300
  
Stock issued for cash October 9, 1998
    
190,000
    
19
    
171
          
190
  
Stock issued for cash April 1, 1999
    
290,000
    
29
    
261
          
290
  
Net Loss October 6,1998 (inception through September 30, 1999)
                      
(295
)
  
(295
)
Balance September 30, 1999
    
2,780,000
    
278
    
1,512
    
(295
)
  
1,495
  
Stock issued for cash October 19, 1999
    
10,000,000
    
1,000
    
9,000
          
10,000
  
Net Loss October 1,1999 through September 30, 2000
                      
(367
)
  
(367
)
Balance September 30, 2000
    
12,780,000
    
1,278
    
10,512
    
(662
)
  
11,128
  
Net Loss October 1, 2000 through September 30, 2001
                      
(11,028
)
  
(11,028
)
Balance September 30, 2001
    
12,780,000
    
1,278
    
10,512
    
(11,690
)
  
100
  
Net Loss October 1, 2001
                                
through September 30, 2002
                      
(4,257
)
  
(4,257
)
Balance September 30, 2002
    
12,780,000
    
1,278
    
10,512
    
(15,947
)
  
(4,157
)
Net Loss October 1, 2002 through September 30, 2003
                     
(4,328
)
  
(4,328
)
Balance September 30, 2003
    
12,780,000
    
1,278
    
10,512
    
(20,275
)
  
(8,485
)
Contributed Capital
                
12,362
          
12,362
  
Net Loss October 1, 2003 through September 30, 2004
                      
(7,974
)
  
(7,974
)
Balance September 30, 2004
    
12,780,000
    
1,278
    
22,874
    
(28,249
)
  
(4,097
)
Contributed Capital
                
9,021
          
9,021
  
Net Loss October 1, 2004 through September 30, 2005
                      
(6,667
)
  
(6,667
)
Balance September 30, 2005
    
12,780,000
    
1,278
    
31,895
    
(34,916
)
  
(1,743
)
Stock Cancelled June 13, 2006
    
(10,000,000
)
  
(1,000
)
              
(1,000
)
Stock issued June 13, 2006
    
10,000,000
    
1,000
    
28,999,000
          
29,000,000
  
Stock issued for services
    
305,000
    
31
    
759,719
          
759,750
  
Stock issued for Compensation
    
300,000
    
30
    
584,970
          
585,000
  
Net Loss October 1, 2005 through September 30, 2006
                      
(31,382,530
)
  
(31,382,530
)
Balance September 30, 2006
    
13,385,000
    
1,339
    
30,375,584
    
(31,417,446
)
  
(1,040,523
)
Stock issued for services
    
100,184
    
10
    
112,524
          
112,534
  
Stock issued for Compensation
    
153,700
    
15
    
101,465
          
101,480
  
Stock issued in exchange for canceling debt
    
2,854,505
    
284
    
1,446,120
          
1,446,404
  
Net Loss October 1, 2006 through December 31, 2006
                      
(466,179
)
  
(466,179
)
Balance December 30, 2006
    
16,493,389
    
1,649
    
32,035,693
    
(31,883,625
)
  
157,717
  
 
The accompanying Notes are an integral part of these financial statements
 
6
 
BIO-MATRIX SCIENTIFIC GROUP, INC. AND SUBSIDIARY
(FORMERLY TASCO INTERNATIONAL, INC.)
(A Development Stage Company)
Consolidated Statements of Cash Flows
(unaudited)
 
   
3 Months Ended
  
3 Months Ended
  
October 6, 1998
(inception) through
  
   
December 31,
  
December 31,
  
December 31,
  
   
2006
  
2005
  
2006
  
CASH FLOWS FROM OPERATING ACTIVITIES
              
               
Net (loss)
   $
(466,179
 )  $ 
(239
 )  $ 
(31,883,625
 ) 
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
                    
Impairment of goodwill and intangible asset
    
-
          
29,777,222
  
Depreciation expense
    
333
    
-
   
666
  
Stock issued for compensation
    
101,480
    
-
   
686,480
  
Stock issued for services
    
112,534
    
-
   
872,284
  
Cancellation of Debt
    
-
          
(5,443
 )
Stock issued to cancel debt plus accrued interest
    
251,209
          
251,209
  
Changes in operating assets and liabilities:
                    
(Increase) decrease in receivables
    
(74
 )         
(74
 ) 
(Increase) decrease in prepaid expenses
    
20,207
          
-
  
(Increase) decrease in organizational costs
    
-
    
-
       
Increase (Decrease) in Accounts Payable
    
(36,856
 )   
-
   
54,223
  
Increase (Decrease) in Accrued Expenses
    
(4,830
 )   
-
   
12,998
  
(Increase) Decrease in Deposits
    
-
          
(29,127
 ) 
                     
                     
Net Cash Provided by (Used in) Operating Activities
    
(22,176
 )   
(239
 )   
(263,187
 ) 
                     
CASH FLOWS FROM INVESTING ACTIVITIES
                    
                     
Purchases of fixed assets
    
(24,846
 )   
-
    
(365,736
 ) 
Purchases of Intangible assets
          
-
    
(29,777,222
 ) 
                     
                     
Net Cash Provided by (Used in) Investing Activities
    
(24,846
 )   
-
    
(30,142,958
 )
                     
CASH FLOWS FROM FINANCING ACTIVITIES
                    
                     
Common stock issued for cash
    
-
          
1,278
  
Additional paid in Capital
    
-
    
-
    
29,036,338
  
Principal borrowings on notes
    
39,372
    
-
    
188,324
  
Net borrowings from related parties
          
3,500
    
1,195,196
  
                     
Net Cash Provided by (Used in) Financing Activities
    
39,372
    
3,500
    
30,421,136
  
                     
                     
Net Increase (Decrease) in Cash
    
(7,650
 )   
3,261
    
14,991
  
                     
Cash at Beginning of Year
    
22,641
    
-
    
-
  
                     
                     
Cash at End of Period
   $
14,991
   $
-
   $
(14,991
 )
                     
Supplemental Cash Flow Disclosures:
                    
                     
Cash paid during period for interest
   $
-
   $ 
-
   $
-
  
                     
Cash paid during period for taxes
   $     $     $    
                     
Non cash disclosure items:
    
-
              
Stock issued to cancel debt
    
1,195,195
              
 
The accompanying Notes are an integral part of these financial statements
 
7
 
BIO-MATRIX SCIENTIFIC GROUP, INC. AND SUBSIDIARY
(Formerly Tasco International, Inc.)
(A Development Stage Company)
Notes to consolidated Financial Statements
As of December 31, 2006

NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS

Bio-Matrix Scientific Group, Inc. (“Company”) was organized October 6, 1998, under the laws of the State of Delaware as Tasco International, Inc.

The Company is in the development stage. From October 6, 1998 to June 3, 2006 its activities have been limited to capital formation, organization, and development of its business plan to provide production of visual content and other digital media, including still media, 360-degree images, video, animation and audio for the Internet.

On June 3, 2006 the Company abandoned its efforts in the field of digital media production when it acquired 100% of the share capital of Bio-Matrix Scientific Group, Inc., a Nevada corporation.

Bio-Matrix Scientific Group, Inc. (“BMSG”) is a development stage company in the business of designing, developing, and marketing medical devices, specifically disposable instruments used in stem cell extraction and tissue transfer procedures and operating cryogenic cellular storage facilities, specifically stem cell banking facilities. BMSG is the Company’s only subsidiary and operating entity at this time. On August 25, the Company amended its certificate of incorporation in order that it may change its name to Bio-Matrix Scientific Group, Inc.
 
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. BASIS OF ACCOUNTING

The financial statements have been prepared using the accrual basis of accounting. Under the accrual basis of accounting, revenues are recorded as earned and expenses are recorded at the time liabilities are incurred. The Company has adopted a September 30, year-end.

B. USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent 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.

C. DEVELOPMENT STAGE

The Company is a development stage company that, through its wholly owned subsidiary devotes substantially all of its efforts in the development of its plan to operate in the field of the development, manufacture and marketing of medical devices and the operation of cellular storage facilities, specifically stem cell banking facilities.
 
D. CASH EQUIVALENTS
 
The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

E. PROPERTY AND EQUIPMENT 

Property and equipment are recorded at cost. Maintenance and repairs are expensed in the year in which they are incurred. Expenditures that enhance the value of property and equipment are capitalized.

The Company has depreciated property and equipment by the straight-line method over the useful life.

F. INCOME TAXES

Income taxes are provided in accordance with Statement of Financial accounting Standards No. 109 (SFAS 109), Accounting for Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities.

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

G. BASIC EARNINGS (LOSS) PER SHARE

In February 1997, the FASB issued SFAS No. 128, "Earnings Per Share", which specifies the computation, presentation and disclosure requirements for earnings (loss) per share for entities with publicly held common stock. SFAS No. 128 supersedes the provisions of APB No. 15, and requires the presentation of basic earnings (loss) per share and diluted earnings (loss) per share. The Company has adopted the provisions of SFAS No. 128 effective October 6, 1998 (inception).

8
 
BIO-MATRIX SCIENTIFIC GROUP, INC. AND SUBSIDIARY
(Formerly Tasco International, Inc.)
(A Development Stage Company)
Notes to consolidated Financial Statements
As of December 31, 2006
(continued)

Basic net loss per share amounts is computed by dividing the net income by the weighted average number of common shares outstanding. Diluted earnings per share are the same as basic earnings per share due to the lack of dilutive items in the Company.

H. VALUATION OF GOODWILL

In accordance with SFAS No. 142, goodwill and other intangible assets with indefinite lives are not amortized, they are instead tested for impairment annually or whenever events or changes in circumstances indicate that the asset may be impaired. The Company performed an evaluation of goodwill and intangible assets in the fourth quarter of the twelve months ended September 30, 2006 which resulted in impairment charges of $29,777,222. The Company currently has $0 of goodwill.
 
NOTE 3. Property and equipment
 
Property and equipment as of December 31, 2006 consists of the following:
 
 
2006
  
Acquisition cost:
 
  
 
  
Production Equipment
 
 
  
US$
93,314
  
Production Cleanroom
  
   
78,264
  
Leasehold improvement
  
   
188,981
  
Office equipment
  
   
3,057
  
Computer
  
   
2,120
  
             
Subtotal
  
   
365,736
  
Less accumulated depreciation
  
   
(666
)
Total
 
 
  
US$
365,070
  
 
NOTE 4. WARRANTS AND OPTIONS

On July 17, 2006 the Company signed a public relations agreement with OTCFN which called for the issuance of an option agreement for 200,000 options exercisable at $4.50 per share. These options expired unexercised six months from the date of execution of the agreement

NOTE 5. GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company generated net losses of $31,883,625 during the period from October 6, 1998 (inception) through December 31, 2006. This condition raises substantial doubt about the Company's ability to continue as a going concern. The Company's continuation as a going concern is dependent on its ability to meet its obligations, to obtain additional financing as may be required and ultimately to attain profitability. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Management plans to raise additional funds through debt or equity offerings. Management has yet to decide what type of offering the Company will use or how much capital the Company will raise. There is no guarantee that the Company will be able to raise any capital through any type of offerings.

NOTE 6. INCOME TAXES
 
 
 
 
As of December 31, 2006
 
 
 
 
 
 
Deferred tax assets:
 
 
 
 
Net operating tax carry forwards
 
$
10,840,433
 
Other
 
 
0
 
 
 
 
 
 
Gross deferred tax assets
 
 
10,840,433
 
Valuation allowance
 
 
(10,840,433
)
 
 
 
 
 
Net deferred tax assets
 
$
0
 

Realization of deferred tax assets is dependent upon sufficient future taxable income during the period that deductible temporary differences and carry forwards are expected to be available to reduce taxable income. As the achievement of required future taxable income is uncertain, the Company recorded a valuation allowance. In addition, the acquisition of BMSG has resulted in a change of control. Internal Revenue Code Sec 382 limits the amount of income that may be offset by net operating loss (NOL) carryovers after an ownership change.
 
9
 
BIO-MATRIX SCIENTIFIC GROUP, INC. AND SUBSIDIARY
(Formerly Tasco International, Inc.)
(A Development Stage Company)
Notes to consolidated Financial Statements
As of December 31, 2006
(continued)


NOTE 7. SCHEDULE OF NET OPERATING LOSSES
 
1998 Net Operating Loss
 
$
(295)
  
1999 Net Operating Loss
 
 
(367)
  
2000 Net Operating Loss
 
 
(11,028)
  
2001 Net Operating Loss
 
 
(4,257)
  
2002 Net Operating Loss
 
 
(4,328)
  
2003 Net Operating Loss
 
 
(7,974)
  
2004 Net Operating Loss
 
 
(6,667)
  
2005 Net Operating Loss
 
 
(31,382,530)
  
 Three Months Ended December 31, 2006 Net Operating Loss
 
 
(466,179) 
 
Net Operating Loss
 
$
(31,883,625)
  

As of December 31, 2006 the Company has a net operating loss carry forward of approximately $31,883,625 which will expire 20 years from the date the loss was incurred.

NOTE 8. RELATED PARTY TRANSACTION

Until July 3, 2006, a former director has provided office services without charge. Such costs are immaterial to the financial statements and, accordingly, have not been reflected therein.

The Company was loaned $5,300 from a related party without repayment terms and with no interest being charged. This Loan was forgiven as part of the Purchase Agreement involving the Company’s purchase of Bio-Matrix Scientific Group Inc. (Nevada).

On July 3, 2006, the Company acquired 100% of the share capital of BMSG from BMXP Holdings, Inc., formerly named Bio Matrix Scientific Group, Inc. (See Note 12).

David R. Koos, the Chairman, CEO and President of the Company, is, and at the time of the acquisition was, the Chairman and Chief Executive Officer of BMXP Holdings Inc. as well as beneficial owner of 24% of the share capital of BMXP Holdings, Inc. Brian Pockett, Vice President, COO and Director of the Company, is , and at the time of the acquisition was, Chief Operating Officer, Managing Director and a Director of BMXP Holdings Inc. as well as beneficial owner of 14% of the share capital of BMXP Holdings, Inc.

On October 11, 2006, the Company entered into an Agreement with BMXP Holdings, Inc (“BMXP”) (“Agreement”) pursuant to which the Company issued to BMXP 1,462,570 common shares of the Company on or prior to October 12, 2006. This issuance will constitute full satisfaction of the amount of $1,191,619 plus any accrued and unpaid interest, owed to BMXP by the Company.

As further consideration to BMXP for entering into this Agreement and abiding by the terms and conditions thereof, at any time within a period of 365 days from the date of the Agreement, BMXP shall have the right, upon written demand to the Company (“Registration Demand”), to cause the Company, within ninety days of the Registration Demand, to prepare and file with the United States Securities and Exchange Commission (“SEC”) a registration statement to register under the Securities Act of 1933, as amended, 11,462,570 common shares of the Company (including the shares issued pursuant to this Agreement) owned by BMXP (“Registerable Securities”), in order that the Registerable Securities may be distributed to BMXP shareholders on a pro rata basis ( based on their ownership of common shares of the Company as of a Record Date to be determined by BMXP), and use its reasonable best efforts to cause that registration statement to be declared effective by the SEC. This right may also be exercised by any entity to which BMXP has transferred ownership of the Registerable Securities in trust for the BMXP Record Shareholders.

NOTE 9. STOCK TRANSACTIONS

Transactions, other than employees' stock issuance, are in accordance with paragraph 8 of SFAS 123. Thus issuances shall be accounted for based on the fair value of the consideration received. Transactions with employees' stock issuance are in accordance with paragraphs (16-44) of SFAS 123. These issuances shall be accounted for based on the fair value of the consideration received or the fair value of the equity instruments issued, or whichever is more readily determinable.

On August 29, 2005 the Company split its common stock ten for one (10:1) from 1,278,000 to 12,780,000 shares outstanding. All stock transactions have been retroactively restated to reflect the ten for one stock split.

On October 6, 1998, the Company issued 1,000,000 shares of common stock for cash at $0.0001 per share.

On October 9, 1998, the Company issued 1,300,000 shares of common stock for cash at $0.01 per share.

On October 12, 1998, the Company issued 190,000 shares of common stock for cash at $0.01 per share.

On April 1, 1999, the Company issued 290,000 shares of common stock for cash at $0.01 per share.

10
 
BIO-MATRIX SCIENTIFIC GROUP, INC. AND SUBSIDIARY
(Formerly Tasco International, Inc.)
(A Development Stage Company)
Notes to consolidated Financial Statements
As of December 31, 2006
(continued)

On October 19, 1999, the Company issued 10,000,000 shares of common stock for cash at $0.01 per share.

On June 13, 2006 the Company cancelled 10,000,000 shares of common stock belonging to the Company’s former Chairman

On June 13, 2006 the Company issued 10,000,000 shares of common stock into Escrow in connection with the acquisition of BSMG.

On August 28, 2006 the Company issued 300,000 shares of common stock to consultants for services. Initially, 600,000 shares were issued in error, and 300,000shares were subsequently cancelled October 17, 2006.

On September 14, 2006 the Company issued 300,000 shares of common stock to management pursuant to the TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN

On September 14, 2006 the Company issued 5,000 shares of common stock to consultants for services pursuant to the TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN.

On October, 6, 2006 the Company issued 8,850 shares of common stock to consultants for services pursuant to the TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN.

On October 11, 2006 the Company issued 43,000 shares of common stock to consultants for services pursuant to the TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN.

On October 12, 2006, the Company shall issued 1,462,570 common shares of the Company to BMXP in full satisfaction of the amount of $1,191,619 plus accrued and unpaid interest, owed to BMXP Holdings, Inc. by the Company.

On November 10, 2006 the Company issued 100,000 shares of common stock to management pursuant to the TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN.

On November 11, 2006 the Company issued 25,000 shares of common stock to consultants for services pursuant to the TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN.

On December 5, 2006 the Company issued 8,334 shares of common stock to a consultant for services pursuant to the TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN.

On December 5, 2006 the Company issued 1,391,935 shares of common stock to Bio-Technology Partners Business Trust which constituted full satisfaction of the amount of $246,744 plus accrued interest owed by the Company to Bio-Technology Partners Business Trust.
 
On December 14, 2006 the Company issued 68,700 shares of common stock to management, employees and consultants for services pursuant to the TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN.

NOTE 10. STOCKHOLDERS' EQUITY

The stockholders' equity section of the Company contains the following classes of capital stock as of December 31, 2006:

* Preferred stock, $ 0.0001 par value; 20,000,000 shares authorized: -0- shares issued and outstanding.

* Common stock, $ 0.0001 par value; 80,000,000 shares authorized: 16,493,389 shares issued and outstanding.

NOTE 11. COMMITMENTS AND CONTINGENCIES

On August 3, 2005, BMSG entered into an agreement to lease a 14,562 square foot facility for use as a cellular storage facility at a rate of $18,931 per month. The lease is for a period of five years commencing on December 1, 2005 and expiring on November 30, 2010. The lease contains a renewal option enabling the Company to renew the lease for an additional five years. There are no contingent payments which the Company is required to make.

Lease Commitments
 
 
2006
$ 227,739
  
 
2007
$ 234,562
  
 
2008
$ 241,611
  
 
2009
$ 248,864
  
 
2010
$ 234,377
  
 
Since the signing of this lease, BMSG has been improving this facility and has made substantial progress toward creating a cGMP (Good Manufacturing Practices) and
 
11
 
BIO-MATRIX SCIENTIFIC GROUP, INC. AND SUBSIDIARY
(Formerly Tasco International, Inc.)
(A Development Stage Company)
Notes to consolidated Financial Statements
As of December 31, 2006
(continued)

cGTP (Good Tissue Practices) compliant facility specifically designed for the cryogenic storage of stem cells, medical device engineering, stem cell research and stem cell specimen processing laboratories.
 
The Company expects to have the facility licensed by the State of California and registered with the FDA. Concurrently, the Company has been developing the policies and procedures needed for processing stem cells for cryogenic storage.

NOTE 12. ACQUISITION OF BIO-MATRIX SCIENTIFIC GROUP (NEVADA).

On June 14, 2006, the Company and Bio-Matrix Scientific Group, Inc., a Delaware corporation (the “Seller”) entered into a Stock Purchase Agreement (the “Acquisition Agreement”).

Under the terms of the Acquisition Agreement and pursuant to a separate Escrow Agreement between the Company and the Seller, The Company delivered to the Escrow Agent the sum of 10,000,000 shares of the Company’s common stock and other corporate and financial records and the Seller delivered to the Escrow Agent 25,000 shares of the common stock of BSMG., a Nevada corporation (the “Subsidiary”). As a part of the transaction and pursuant to the terms of the Acquisition Agreement and Stock Cancellation Agreement between the parties and John Lauring, the Company’s former Chairman and Chief Executive Officer, John Lauring returned 10,000,000 shares of the Company held and owned by him for cancellation.

On June 14, 2006, the Company’s officers and directors resigned their positions and elected Dr. David R. Koos and Mr. Brian Pockett as in-coming Directors of the Registrant. Following their election and the reconstruction of the Board of Directors, the Registrant’s Board of Directors elected Dr. David R. Koos as Chief Executive Officer and President and Mr. Brian Pockett as Chief Operating Officer and Vice President on June 19, 2006.

On July 3, 2006, the Acquisition Agreement closed and Company acquired the twenty-five thousand (25,000) shares of the Common Stock of the Subsidiary from the Seller in exchange for the payment of the purchase price of 10,000,000 shares of the common stock of the Company and the 10,000,000 shares of the Company owned and held by John Lauring were returned to the Company for cancellation. At that time, the Escrow Agent released all stock certificates and certain other corporate and financial books and records held pursuant to the Escrow Agreement.
 
As a result of the Acquisition Agreement, the Subsidiary became a wholly owned subsidiary of the Company and the Seller became the holder of approximately 78.24% of the outstanding common stock of the Registrant.

On July 3, 2006, the Company changed its principal offices from 23 Brigham Road, Worcester MA 01609 to 8885 Rehco Road, San Diego, California 92121

NOTE 13. TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS STOCK COMPENSATION PLAN

On July 25, 2006 the Company adopted the TASCO HOLDINGS INTERNATIONAL, INC. 2006 EMPLOYEE AND CONSULTANTS STOCK COMPENSATIONPLAN (“the Plan”) which provides for the issuance of up to 1,500,000 authorized but unissued shares of Common Stock to eligible employees and consultants for services rendered (“Award Shares” or “Awards”). These Award Shares were registered with the Securities and Exchange Commission (“Commission”) on Form S-8 filed with the Commission on August 8, 2006. This Plan shall terminate on July 15, 2016.

Award Shares may be issued to Eligible Persons (The term "Eligible Person" means any natural person who, at a particular time, is an employee, officer, director, consultant, or advisor of the Company or any Parent or Subsidiary of the Company; provided that, in the case of consultants or advisors such services are not in connection with the offer and sale of securities in a capital-raising transaction and /or such services are not intended to directly or indirectly promote or maintain a market for the Company ’s securities) in any of the following instances:
 
(i) as a bonus for services previously rendered and compensated, in which case the recipient of the Award Shares shall not be required to pay any consideration for such Award Shares, and the value of such Award Shares shall be the Fair Market Value of such Award Shares on the date of grant; or

(ii) as compensation for the previous performance or future performance of services or attainment of goals, in which case the recipient of the Award Shares shall not be required to pay any consideration for such Award Shares (other than the prior performance of his services or the assumption of the obligation of future performance of services ).

The Plan is currently administered by the Plan Committee, which currently consists of the entire Board of Directors of the Company, and which has sole and absolute discretion to interpret and determine the effect of all matters and questions relating to this Plan.

The Plan Committee has the full and final authority in its sole discretion, at any time and from time-to-time, subject only to the express terms, conditions and other provisions of the Articles of Incorporation of the Company and this Plan, and the specific limitations on such discretion set forth herein, to:

(i) Designate the Eligible Persons or classes of Eligible Persons eligible to receive Awards from among the Eligible Persons;

(ii) Grant Awards to such selected Eligible Persons or classes of Eligible Persons in such form and amount (subject to the terms of the Plan) as the Plan Committee shall determine;

(iii) Interpret the Plan, adopt, amend and rescind rules and regulations relating to the Plan, and make all other determinations and take all other action necessary or advisable for the implementation and administration of the Plan; and

(iv) Delegate all or a portion of its authority to one or more directors of the Company who are executive officers of the Company, subject to such restrictions and limitations (such as the aggregate number of shares of Common Stock that may be awarded) as the Plan Committee may decide to impose on such delegate directors.

12

BIO-MATRIX SCIENTIFIC GROUP, INC. AND SUBSIDIARY
(Formerly Tasco International, Inc.)
(A Development Stage Company)
Notes to consolidated Financial Statements
As of December 31, 2006
(continued)

As of December 31, 2006, 858,884 shares have been issued pursuant to the Plan

 
 
Number of 
 
 
 
Shares 
 
As of December 31, 2006:
 
  
 
 
 
  
 
Granted
 
858,884*
 
 
 
  
 
Remaining shares available for issuance under the Plan as of December 31, 2006
 
641,116
 

*Does not include 300,000 shares which were issued erroneously and subsequently cancelled

 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

CERTAIN FORWARD-LOOKING INFORMATION

Information provided in this Quarterly report on Form 10QSB may contain forward-looking statements within the meaning of Section 21E or Securities Exchange Act of 1934 that are not historical facts and information. These statements represent the Company's expectations or beliefs, including, but not limited to, statements concerning future and operating results, statements concerning industry performance, the Company's operations, economic performance, financial conditions, margins and growth in sales of the Company's products, capital expenditures, financing needs, as well assumptions related to the forgoing. For this purpose, any statements contained in this Quarterly Report that are not statement of historical fact may be deemed to be forward-looking statements. These forward-looking statements are based on current expectations and involve various risks and uncertainties that could cause actual results and outcomes for future periods to differ materially from any forward-looking statement or views expressed herein. The Company's financial performance and the forward-looking statements contained herein are further qualified by other risks including those set forth from time to time in the documents filed by the Company with the Securities and Exchange Commission, including the Company's most recent Form 10KSB for the year ended September 30, 2006.

CONDITION AND RESULTS OF OPERATIONS THREE MONTHS ENDED DECEMBER 31, 2006

Revenues were -0- for the quarter ending December 31, 2006 and -0- for the same quarter ending 2005. Operating Expenses were $459,335 for the three months ended December 31, 2006 and $250 for the same period in 2005.

ACQUISITION OF WHOLLY OWNED SUSIDIARY

As of the acquisition of 100% of the share capital of Bio-Matrix Scientific Group, Inc. (“BMSG”, a Nevada corporation) on July 3, 2006, Tasco Holdings International, Inc.(“Company”) has ceased all activities relating to its historical business and adopted the business plan of BMSG.

BMSG is developmental stage company engaged primarily in the cryogenic storage of stem cells and the development of medical devices used in live tissue transfer and stem cell research.

Through BMSG, the Company has developed a line of medical devices (approximately 192 disposable instruments for use in the plastic surgery field and stem cell research). The instruments are designed to be used to harvest adult stem cells from adipose (fat) tissue. The Company seeks to market and sell these instruments to plastic surgeons and to offer the patients of these plastic surgeons an opportunity to store stem cells derived from adipose tissue for future medical treatments. The Company has not conducted or obtained any independent evaluation of the efficacy or likely market interest in using these instruments. The Company's evaluations have been limited to those conducted by Company management without the benefit of any independent or third party professional evaluation.

Through BMSG , the Company is currently constructing what it believes is a state-of-the art, FDA good manufacturing practices (cGMP) and good tissue practices (cGTP) compliant facility for the processing and cryo-storage (in liquid nitrogen) of adult stem cells. It anticipates that it will offer a similar service to expectant parents by offering to store their newborn's cord blood stem cells as well. In undertaking these plans, it intend to offer such storage services at its planned facility. The planned facility is located at 8885 Rehco Road, San Diego, California 92121 and has approximately 15,000 square feet. The planned facility was acquired under a five year lease on December 1, 2005 at a current cost of $18,931 per month (plus certain common area costs). Under the terms of the lease, the lease term may be extended for an additional five year lease term at the then prevailing market prices.

All of the Company's current plans and strategy have been developed solely by our officers and Directors.

PLAN OF OPERATION 
 
As of December 31, 2006 the Company has $14,991 cash on hand and current liabilities of $255,545, such liabilities consisting of Accounts Payable , Notes Payable, Accrued Payroll, Accrued Interest , Accrued Expenses and Accrued Taxes.
13
 
The Company feels it will not be able to satisfy its cash requirements over the next twelve months and shall be required to seek additional financing.
  
At this time, the Company plans to fund its financial needs through operating revenues (which cannot be assured) and, if required, through equity private placements of common stock. (No plans, terms, offers or candidates have yet been established and there can be no assurance that the company will be able to raise funds on terms favorable to the Company or at all.)

Over the next 12 months, the Company anticipates opening its stem cell bank and marketing its disposable stem cell / tissue management instruments. Furthermore, the Company expects to increase the total number of employees by 20 new hires.
 
Item 3. CONTROLS AND PROCEDURES
 
(A) Evaluation of Disclosure Controls and Procedures
 
As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of David Koos, who is the Company's Principal Executive Officer/Principal Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures. The Company's disclosure controls and procedures are designed to provide a reasonable level of assurance of achieving the Company's disclosure control objectives. The Company's Principal Executive Officer/Principal Financial Officer has concluded that the Company's disclosure controls and procedures are, in fact, effective at this reasonable assurance level as of the period covered.
 
(B) Changes in Internal Controls over Financial Reporting
 
In connection with the evaluation of the Company's internal controls during the period commencing on April 1, 2006 and ending June 30, 2006, David Koos, who is both the Company's Principal Executive Officer and Principal Financial Officer has determined that there are no changes to the Company's internal controls over financial reporting that has materially affected, or is reasonably likely to materially effect, the Company's internal controls over financial reporting.
 
PART II.

Item 1: LEGAL PROCEEDINGS

None

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On June 13, 2006, the Company deposited 10,000,000 newly issued common shares into Escrow pursuant to a stock purchase agreement (“Agreement”) by and between the Company and Bio-Matrix Scientific Group, Inc (“Seller”) , a Delaware corporation.

Under the terms of the Agreement, the Company acquired all of the outstanding common stock of BMSG (at that time a wholly-owned subsidiary of the Seller) and the aforementioned 10,000,000 newly issued common shares were released to the Seller from Escrow at the closing of the acquisition (July 3, 2006).

The shares were issued pursuant to Section 4(2) of the Securities Act of 1933, as amended. No underwriters were retained to serve as placement agents. The shares were offered directly through the management of the Company, and the consideration for the shares was 100% of the share capital of BMSG.

On July 17, 2006 the Company signed a public relations agreement with OTCFN (“PR Agreement) which called for the issuance of an option agreement for 200,000 options exercisable at $4.50 per share (“OTCFN Options”). These options expired unexercised six months from the date of execution of the agreement.

The OTCFN Options were issued pursuant to Section 4(2) of the Securities Act of 1933, as amended. No underwriters were retained to serve as placement agents. The OTCFN Options were offered directly through the management of the Company.

Consideration for the OTCFN OPTIONS was OTCFN's entry into the PR Agreement and the performance of services by OTCFN pursuant to that PR Agreement.

On October 12, 2006, the Company issued 1,462,570 common shares of the Company to BMXP in full satisfaction of the amount of $1,191,619 plus accrued and unpaid interest, owed to BMXP Holdings, Inc. by the Company.

The shares were issued pursuant to Section 4(2) of the Securities Act of 1933, as amended. No underwriters were retained to serve as placement agents. The shares were offered directly through the management of the Company, and the consideration for the shares was full satisfaction of the amount of $1,191,619 plus accrued and unpaid interest, owed to BMXP Holdings, Inc. by the Company.

On December 5, 2006 the Company issued 1,391,935 shares of common stock to Bio-Technology Partners Business Trust which constituted full satisfaction of the amount of $246,744 plus accrued interest owed by the Company to Bio-Technology Partners Business Trust.

The shares were issued pursuant to Section 4(2) of the Securities Act of 1933, as amended. No underwriters were retained to serve as placement agents. The shares were offered directly through the management of the Company, and the consideration for the shares was full satisfaction of the amount $246,744 plus accrued interest owed by the Company to Bio-Technology Partners Business Trust.

Item 3. DEFAULTS UPON SENIOR SECURITIES

None.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None
 
Item 5. OTHER INFORMATION

None.
 
14
 
Item 6. EXHIBITS
 
31.1
Certification of Chief Executive Officer
 
 
31.2
Certification of Acting Chief Financial Officer
 
 
32.1
Certification of Chief Executive Officer under Section 906 of the Sarbanes-Oxley Act of 2002.
 
 
32.2
Certification of Acting Chief Financial Officer under Section 906 of the Sarbanes-Oxley Act of 2002.

 
SIGNATURES

In accordance with the requirements of the Exchange Act, the Company caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
 
 
Bio Matrix Scientific Group, Inc,.
 
a Delaware corporation
   
By: 
/s/ David R. Koos
 
David R. Koos 
 
Chief Executive Officer
 
Date: February 14, 2007
 

15