U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2019

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 

For the transition period from

Commission File No. 333-220790 

Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒  No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).

Yes ☒  No ☐ 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

APPLICABLE ONLY TO CORPORATE ISSUERS: 

As of September 30, 2019 there were 6,583,001 shares of common stock issued and outstanding.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):

Yes ☐  No ☒

Transitional Small Business Disclosure Format (Check One)

Yes ☐   No ☒

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Zander Therapeutics, Inc

Condensed Balance Sheets 

Zander Therapeutics, Inc

Condensed Statements of Operations

(Unaudited) 

Zander Therapeutics, Inc.

Condensed Notes to Financial Statements

As of September 30, 2019

The accompanying unaudited interim condensed financial statements of Zander Therapeutics, Inc. (“Zander” or “the Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the United States Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s annual report filed with the SEC on Form 10-K for the year ended June 30, 2018. In general, interim disclosures do not repeat those contained in the annual statements. In the opinion of management, all adjustments consisting of normal recurring adjustments necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. The condensed balance sheet at June 30, 2019 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles in the U.S. for complete financial statements 

NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Zander Therapeutics , Inc. (“Company”) was organized June 18, 2015 under the laws of the State of Nevada.

The Company intends to engage primarily in the development of veterinary medical applications which we intend to license from other entities as well as develop internally.

A. BASIS OF ACCOUNTING

The financial statements have been prepared using the basis of accounting generally accepted in the United States of America. Under this basis of accounting, revenues are recorded as earned and expenses are recorded at the time liabilities are incurred. The Company has adopted a June 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. CASH EQUIVALENTS

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

D. FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair value is the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date.  A fair value hierarchy requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of inputs required by the standard that the Company uses to measure fair value:

Level 1:  Quoted prices in active markets for identical assets or liabilities

Level 2:  Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.

Level 3:  Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

E. INCOME TAXES

The Company accounts for income taxes using the liability method prescribed by ASC 740, “Income Taxes.” Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the year in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized as income or loss in the period that includes the enactment date.

The Company applied the provisions of ASC 740-10-50, “Accounting For Uncertainty In Income Taxes”, which provides clarification related to the process associated with accounting for uncertain tax positions recognized in our financial statements. Audit periods remain open for review until the statute of limitations has passed. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the Company’s liability for income taxes. Any such adjustment could be material to the Company’s results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period. As of  June 30, 2019 the Company had no uncertain tax positions, and will continue to evaluate for uncertain positions in the future.

The Company generated a deferred tax credit through net operating loss carry forward.  However, a valuation allowance of 100% has been established.

Interest and penalties on tax deficiencies recognized in accordance with ACS accounting standards are classified as income taxes in accordance with ASC Topic 740-10-50-19.

F.  BASIC EARNINGS (LOSS) PER SHARE

The Financial Accounting Standards Board (FASB) issued Accounting Standards Codification (ASC) 260, "Earnings Per Share", which specifies the computation, presentation and disclosure requirements for earnings (loss) per share for entities with publicly held common stock. ASC 260 requires the presentation of basic earnings (loss) per share and diluted earnings (loss) per share. The Company has adopted the provisions of ASC 260 effective from inception.

Basic net loss per share amounts is computed by dividing the net income by the weighted average number of common shares outstanding. There were no Common Stock Equivalents as of June 30, 2019.

G. RESEARCH AND DEVELOPMENT COSTS

Research and development expenses relate primarily to the cost of discovery and research programs. Research and development costs are charged to expense as incurred. Research and development expenses consist mainly of License Fees paid and fees paid to consultants.

License Fees paid are accrued over the course of the reporting period. The Companies make payments to consultants based on agreed-upon terms and the Company generally accrues expenses based on services performed or over the term of the agreement, as applicable.

H. STOCK BASED COMPENSATION

Stock issued for Non-Employee Services

Stock Based compensation to non-employees is accounted for in accordance with ASC 505-50. ASC 505-50 requires entities to account for non-employee equity transactions based on either the fair value of the services received or the fair value of the equity instrument issued utilizing whichever measurement is most reliable

Pursuant to ASC 505-50-30-11  an issuer shall measure the fair value of the equity instruments in these transactions using the stock price and other measurement assumptions as of the earlier of the following dates, referred to as the measurement date:

Stock issued for Employee Compensation

Stock based compensation to employees is accounted for at the award’s fair value at grant, less the amount (if any) paid by the award recipient.

In determining the Fair Value of shares issued as compensation, the Company took into account factors including the financial condition of the Company at the time of grant , the Company’s lack of profitability, the frequency and amount of cash sales of the Company’s stock, and the Company’s negative working capital as of the time of grant.  

I. INVESTMENT SECURITIES

The Company measures equity investments (except those accounted for under the equity method and those that result in consolidation of the investee) at fair value and recognizes any changes in fair value in net income.

NOTE 2 .  RECENT ACCOUNTING PRONOUNCEMENTS 

In January 2016, the FASB issued Accounting Standards Update No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 requires that equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) are to be measured at fair value with changes in fair value recognized in net income. The Company has adopted ASU 2016-01 effective the fiscal year ending 2019. This guidance is not expected to have a material impact on the Company’s financial statements.

The Company has adopted Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606). The guidance in this Update supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance throughout the Industry Topics of the Codification.

The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: Step 1: Identify the contract(s) with a customer. Step 2: Identify the performance obligations in the contract. Step 3: Determine the transaction price. Step 4: Allocate the transaction price to the performance obligations in the contract. Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. The Company has adopted the provisions of this ASU effective the fiscal year ended 2018. This guidance did not have a material impact on the Company’s Financial Statements.

On February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-02, Leases (Topic 842). The ASU requires organizations that lease assets, referred to as "lessees," to recognize on the consolidated statement of financial position the rights and obligations created by those leases. The ASU also requires disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative requirements, providing additional information about the amounts recorded in the consolidated financial statements. The ASU on leases became effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company has not adopted the provisions of this ASU. This guidance is not expected to have a material impact on the Company’s financial statements.

In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting. This ASU is intended to simplify aspects of share-based compensation issued to non-employees by making the guidance consistent with the accounting for employee share-based compensation. This ASU is effective for annual periods beginning after December 15, 2018 and interim periods within those annual periods, with early adoption permitted. We adopted the provisions of this ASU in the first quarter of 2019. This guidance is not expected to have a material impact on the Company’s financial statements.

NOTE 3. 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 $4,542,030 during the period from June 18, 2015 (inception) through September 30, 2019. 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 by offering securities for cash. 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. During the year ended June 30, 2019 the Company raised $800,000 through the sale of equity securities for cash.

NOTE 4. RELATED PARTY TRANSACTIONS.

On June 23, 2015 Regen Biopharma, Inc. ( “Regen”) entered into an agreement (“Agreement”) with the Company whereby Regen granted to The Company an exclusive worldwide right and license for the development and commercialization of certain intellectual property controlled by Regen (“ License IP”) for non-human veterinary therapeutic use for a term of fifteen years.

Pursuant to the Agreement, The Company shall pay to Regen one-time, non-refundable, upfront payment of one hundred thousand US dollars ($100,000) as a license initiation fee which must be paid within 90 days of June 23, 2015 and an annual non-refundable payment of one hundred thousand US dollars ($100,000) on July 15^th, 2016 and each subsequent anniversary of the effective date of the Agreement

The abovementioned payments may be made, at The Company’s discretion, in cash or newly issued common stock of The Company.

Pursuant to the Agreement, The Company shall pay to Regen royalties equal to four percent (4%) of the Net Sales , as such term is defined in the Agreement, of any Licensed Products, as such term is defined in the Agreement, in a

Pursuant to the Agreement, The Company will pay Regen ten percent (10%) of all consideration (in the case of in-kind consideration, at fair market value as monetary consideration) received by The Company from sublicensees ( excluding royalties from sublicensees based on Net Sales of any Licensed Products for which Regen receives payment pursuant to the terms and conditions of the Agreement).

The Company is obligated pay to Regen minimum annual royalties of ten thousand US dollars ($10,000) payable per year on each anniversary of the Effective Date of this Agreement, commencing on the second anniversary of June 23, 2015. This minimum annual royalty is only payable to the extent that royalty payments made during the preceding 12-month period do not exceed ten thousand US dollars ($10,000).

The Agreement may be terminated by Regen:

If The Company has not sold any Licensed Product by ten years of the effective date of the Agreement or The Company has not sold any Licensed Product for any twelve (12) month period after The Company’s first commercial sale of a Licensed Product.

The Agreement may be terminated by The Company with regard to any of the License IP if by five years from the date of execution of the Agreement a patent has not been granted by the United States patent and Trademark Office to Regen with regard to that License IP.

The Agreement may be terminated by The Company with regard to any of the License IP if a patent that has been granted by the United States patent and Trademark Office to Regen with regard to that License IP is terminated.

The Agreement may be terminated by either party in the event of a material breach by the other party.

On December 17, 2018 Regen Biopharma, Inc.(“Licensor”) , KCL Therapeutics, Inc. (“Assignee”) and Zander Therapeutics, Inc. (“Licensee”) entered into a LICENSE ASSIGNMENT AND CONSENT AGREEMENT whereby, with regards to certain intellectual property which was assigned by Regen Biopharma, Inc.(“Assigned Properties”) to its wholly owned subsidiary KCL Therapeutics, Inc., Licensor hereby transfers and assigns to Assignee all rights, duties, and obligations of Licensor under the Agreement with respect to the Assigned Properties , and Assignee agrees to assume such duties and obligations thereunder and be bound to the terms of the Agreement with respect thereto.

Zander , the Assignee and Regen are under common control. David Koos serves as Chairman & CEO of all of  Regen BioPharma, Inc., the Assignee  and Zander Therapeutics Inc. Todd S. Caven serves as CFO of all of  Regen BioPharma, Inc. , the Assignee and Zander Therapeutics Inc. Koos and Caven also serve as Directors of Zander Therapeutics, Inc. Zander Therapeutics, Inc. is the sole licensee of Regen's NR2F6 intellectual property for veterinary applications.

On September 30, 2018 Regen Biopharma, Inc. (“Regen”) issued a convertible promissory note in the principal amount of $350,000 (“Note”) to Zander Therapeutics, Inc. (“Zander”). A one time interest charge of 10% of the principal amount shall be applied to the principal amount of the Note. The Maturity Date is twenty four months after September 30, 2018 and is the date upon which the Principal Sum of this Note, as well as any unpaid interest and other fees, shall be due and payable. On June 27, 2019 Zander converted $340,000 of the principal amount of the Note into 194,285,714 shares of the Series A Preferred stock of Regen ( See Note 6)

On November 16, 2018 Zander entered into a sublease agreement with BST Partners (“BST”) whereby Zander would sublet office space located at 4700 Spring Street, Suite 304, La Mesa, California 91942 from BST on a month to month basis for $6,000 per month beginning November 5, 2018. Currently the Company is $18,000 in arrears to BST.

BST is controlled by David Koos, Zander’s Chairman and Chief Executive Officer.

On January 17, 2019 Zander loaned $1,500 to Regen. The loan bears simple interest at 10% and is due and payable January 17, 2020.$500 of the principal amount remains outstanding.

On April 11, 2019 Zander loaned $5,000 to Regen. The loan bears simple interest at 10% and is due and payable April 11, 2020.

On April 30, 2019 Zander loaned $20,000 to Regen. The loan bears simple interest at 10% and is due and payable April 30, 2020.

On May 3, 2019 Zander loaned $5,000 to Regen. The loan bears simple interest at 10% and is due and payable May 3, 2020.

On May 9, 2019 Zander loaned $400 to Regen. The loan bears simple interest at 10% and is due and payable May 9, 2020.

On May 29, 2019 Zander loaned $5,000 to Regen. The loan bears simple interest at 10% and is due and payable May 29, 2020.

On May 31, 2019 Zander loaned $6,000 to Regen. The loan bears simple interest at 10% and is due and payable May 31, 2020.

On June 6, 2019 Zander loaned $4,000 to Regen. The loan bears simple interest at 10% and is due and payable June 6, 2020.

On June 14, 2019 Zander loaned $3,000 to Regen. The loan bears simple interest at 10% and is due and payable June 14, 2020.

On July 1, 2019 Zander loaned $6,000 to Regen. The loan bears simple interest at 10% and is due and payable July 1, 2020.

On July 3, 2019 Zander loaned $6,000 to Regen. The loan bears simple interest at 10% and is due and payable July 3, 2020.

On July 15, 2019 Zander loaned $3,500 to Regen. The loan bears simple interest at 10% and is due and payable July 1, 2020.

All of Zander, Regen and KCL Therapeutics are agreeable that Zander shall be permitted at its option to apply any unpaid overdue liability of Regen towards any Anniversary fees and/or Minimum Royalties that may be payable by Zander pursuant to the Agreement abovementioned entered into on June 23, 2015.

On July 9, 2019 BST loaned $10,000 to the Company. The loan bears interest at simple 10% and is due and payable July 9, 2020.

On August 30, 2019 BST loaned $10,000 to the Company. The loan bears interest at simple 10% and is due and payable August 30, 2020.

On September 25, 2019 BST loaned $5,000 to the Company. The loan bears interest at simple 10% and is due and payable September 25, 2020.

BST is controlled by David Koos, Zander’s Chairman and Chief Executive Officer.

On July 10, 2019 the Company was loaned $500 by Mine Dawg, Inc. The loan bears interest at simple 10% and is due and payable July 10, 2020.

Mine Dawg, Inc. is controlled by David Koos, Zander’s Chairman and Chief Executive Officer.

NOTE 5. INVESTMENT SECURITIES

On July 3, 2018 the Company purchased 3,500,000 of the Series A Preferred shares of Regen Biopharma, Inc from Entest Group, Inc. for consideration consisting of $35,000 .

On September 30, 2018 Regen Biopharma, Inc. (“Regen”) issued a convertible promissory note in the principal amount of $350,000 (“Note”) to Zander Therapeutics, Inc. (“Zander”). On June 27, 2019 Zander converted $340,000 of the principal amount of the Note into 194,285, 714 shares of the Series A Preferred stock of Regen as per the terms and conditions of the Note.

The Series A Preferred shares of Regen Biopharma, Inc. described above constitute the Company’s sole investment securities as of June 30, 2019.

As of June 30, 2019:

The Chairman and Chief Executive Officer of Regen is David R. Koos who also serves as the Chairman and Chief Executive Officer of the Company.

The Chief Financial Officer of Regen is Todd Caven who also serves as Chief Financial Officer of the Company.

NOTE 6. CONVERTIBLE NOTE RECEIVABLE, RELATED PARTY

On September 30, 2018 Regen Biopharma, Inc. (“Regen”) issued a convertible promissory note in the principal amount of $350,000 (“Note”) to Zander Therapeutics, Inc. (“Zander”). A one time interest charge of 10% of the principal amount shall be applied to the principal amount of the Note. The Maturity Date is twenty four months after September 30, 2018 and is the date upon which the Principal Sum of this Note, as well as any unpaid interest and other fees, shall be due and payable.

Zander has the right, at any time after the September 30, 2018, at its election, to convert all or part of the outstanding and unpaid Principal Sum and accrued interest (and any other fees) into shares of fully paid and non-assessable shares of Series A Preferred stock of Regen as per this conversion formula: Number of shares receivable upon conversion equals the dollar conversion amount divided by the Conversion Price. The Conversion Price is the greater of $0.0001 or 60% of the lowest trade price in the 25 trading days previous to the conversion. Zander, at any time prior to selling all of the shares from a conversion, may, for any reason, rescind any portion, in whole or in part, of that particular conversion attributable to the unsold shares and have the rescinded conversion amount returned to the Principal Sum with the rescinded conversion shares returned to Regen.

On June 27, 2019 Zander converted $340,000 of the principal amount of the Note into 194,285,714 shares of the Series A Preferred stock of Regen. The principal balance outstanding of the Note is $10,000 as of September 30, 2019.

Zander and Regen are under common control. David Koos serves as Chairman & CEO of both Regen BioPharma, Inc. and Zander Therapeutics Inc. Todd S. Caven serves as CFO of both Regen BioPharma, Inc. and Zander Therapeutics Inc. Koos, Caven also serve as a Director of Zander Therapeutics, Inc. Zander Therapeutics, Inc. is the sole licensee of Regen's NR2F6 intellectual property for veterinary applications.

All of Zander, Regen and KCL Therapeutics are agreeable that Zander shall be permitted at its option to apply any unpaid overdue liability of Regen ( including any and all accrued interest on promissory notes) towards any Anniversary fees and/or Minimum Royalties that may be payable by Zander pursuant to that license agreement abovementioned ( Note 4) originally entered into by Zander and Regen on June 23, 2015

NOTE 7: NOTES RECEIVABLE, RELATED PARTY

As of September 30, 2019 Regen Biopharma Inc. is indebted to Zander in the amount of $64,400.

On January 17, 2019 Zander loaned $1,500 to Regen. The loan bears simple interest at 10% and is due and payable January 17, 2020.$500 of the principal amount remains outstanding.

On April 11, 2019 Zander loaned $5,000 to Regen. The loan bears simple interest at 10% and is due and payable April 11, 2020.

On April 30, 2019 Zander loaned $20,000 to Regen. The loan bears simple interest at 10% and is due and payable April 30, 2020.

On May 3, 2019 Zander loaned $5,000 to Regen. The loan bears simple interest at 10% and is due and payable May 3, 2020.

On May 9, 2019 Zander loaned $400 to Regen. The loan bears simple interest at 10% and is due and payable May 9, 2020.

On May 29, 2019 Zander loaned $5,000 to Regen. The loan bears simple interest at 10% and is due and payable May 29, 2020.

On May 31, 2019 Zander loaned $6,000 to Regen. The loan bears simple interest at 10% and is due and payable May 31, 2020.

On June 6, 2019 Zander loaned $4,000 to Regen. The loan bears simple interest at 10% and is due and payable June 6, 2020.

On June 14, 2019 Zander loaned $3,000 to Regen. The loan bears simple interest at 10% and is due and payable June 14, 2020.

On July 1, 2019 Zander loaned $6,000 to Regen. The loan bears simple interest at 10% and is due and payable July 1, 2020.

On July 3, 2019 Zander loaned $6,000 to Regen. The loan bears simple interest at 10% and is due and payable July 3, 2020.

On July 15, 2019 Zander loaned $3,500 to Regen. The loan bears simple interest at 10% and is due and payable July 1, 2020.

All of Zander, Regen and KCL Therapeutics are agreeable that Zander shall be permitted at its option to apply any unpaid overdue liability of Regen towards any Anniversary fees and/or Minimum Royalties that may be payable by Zander pursuant to the Agreement abovementioned entered into on June 23, 2015.

Zander and Regen are under common control. David Koos serves as Chairman & CEO of both Regen BioPharma, Inc. and Zander Therapeutics Inc. Todd S. Caven serves as CFO of both Regen BioPharma, Inc. and Zander Therapeutics Inc. Koos, Caven also serve as a Director of Zander Therapeutics, Inc. Zander Therapeutics, Inc. is the sole licensee of Regen's NR2F6 intellectual property for veterinary applications. All of Zander, Regen and KCL Therapeutics are agreeable that Zander shall be permitted at its option to apply any unpaid overdue liability of Regen ( including any and all accrued interest on promissory notes) towards any Anniversary fees and/or Minimum Royalties that may be payable by Zander pursuant to that license agreement abovementioned ( Note 4) originally entered into by Zander and Regen on June 23, 2015

NOTE 8: NOTES PAYABLE, RELATED PARTY

As of September 30, 2019 the Company is indebted to BST Partners (“BST) in the principal amount of $25,000

On July 9, 2019 BST loaned $10,000 to the Company. The loan bears interest at simple 10% and is due and payable July 9, 2020.

On August 30, 2019 BST loaned $10,000 to the Company. The loan bears interest at simple 10% and is due and payable August 30, 2020.

On September 25, 2019 BST loaned $5,000 to the Company. The loan bears interest at simple 10% and is due and payable September 25, 2020.

BST is controlled by David Koos, Zander’s Chairman and Chief Executive Officer.

As of September 30, 2019 the Company is indebted to Mine Dawg, Inc. in the principal amount of $500

On July 10, 2019 the Company was loaned $500 by Mine Dawg, Inc. The loan bears interest at simple 10% and is due and payable July 10, 2020.

Minedawg, Inc. is controlled by David Koos, Zander’s Chairman and Chief Executive Officer.

NOTE 9: NOTES PAYABLE

On February 15, 2019 the Company entered into a promissory note agreement with Brian Devine, the Chairman of the Company’s Business Advisory Board, for the issuance of a Promissory Note  in the principal amount of $500,000. As of March 31, 2019 the Company is indebted to  Brian Devine in the amount of $500,000.

The principal amount of this Note is due and payable on July 28, 2019.

The Principal Loan Amount may be prepaid by Zander Therapeutics, Inc. (the” Borrower”) , in whole or in part, at the Borrower’s discretion with the following exceptions:

In the event the Borrower shall receive cash as consideration for the sale by the Borrower of the equity securities of the Borrower while any portion of the Principal Loan Amount is outstanding ("Equity Sale") then Borrower shall remit twenty percent of the net proceeds of the first $1,000,000 of the Equity Sale to the Lender as a prepayment of the Principal Loan Amount ("Equity Sale Prepayment''), and thirty percent of the net proceeds of any Equity Sale in excess of $1,000,000 to the Lender as a prepayment of the Principal Loan Amount (" Equity Sale Prepayment"), The Equity Sale Prepayment shall be made no later than 10 days after the net proceeds of the Equity Sale are received by the Borrower and shall not exceed the Principal Loan Amount outstanding as of the date the Equity Sale Prepayment is made by the Borrower to the Lender.

In the event the Borrower shall have borrowed cash through the issuance of one or more promissory notes issued to any entity other than the Lender while any portion of the Principal Loan Amount is outstanding ("Loan Funding") then Borrower shall remit twenty percent of the first $1,000,000 of net proceeds of the Loan Funding to the Lender as a prepayment of the Principal Loan Amount ( "Loan Funding Prepayment"), and thirty percent of the net proceeds of any Loan Funding in excess of $1,000,000 to the Lender as a prepayment of the Principal Loan Amount ("Loan Funding Prepayment). The Loan Funding Prepayment shall be made no later than 10 days after the net proceeds of the Loan Funding are received by the Borrower and shall not exceed the Principal Loan Amount outstanding as of the date the Loan Funding Prepayment is made by the Borrower to the Lender.

The Principal Loan Amount shall bear a one time interest charge of five hundred thousand of the common shares of the Borrower ( “Interest Shares”) which were issued to the Lender during the quarter ended March 31, 2019. The fair value of the Interest shares is being amortized over the life of the Note.

In determining Fair Value for the Interest Shares an enterprise based valuation method was utilized, specifically Enterprise Value(Assets Less Cash and Cash Equivalents plus Fair Value of Debt) less Fair Value of Debt. The Interest Shares were determined to have a Fair Value of $5,278. The following inputs were utilized.

As of September 30, 2019 the principal amount of $500,000 remains outstanding on the aforementioned Note

NOTE 10. STOCKHOLDERS' EQUITY

The stockholders' equity section of the Company contains the following classes of capital stock as September 30, 2019:

Common stock, $ 0.0001 par value; 100,000,000 shares authorized: 6,583,001 shares issued and outstanding.

With respect to each matter submitted to a vote of stockholders of the Corporation, each holder of Common Stock shall be entitled to cast that number of votes which is equivalent to the number of shares of Common Stock owned by such holder times one (1).

On any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the holders of the Common Stock shall receive, out of assets legally available for distribution to the Company's stockholders, a ratable share in the assets of the Corporation.

Preferred Stock, $0.0001 par value, 50,000,000 shares authorized of which

(a) 45,000,000 is designated as Series M Preferred Stock: 39,210,000 shares of Series M Preferred Stock are issued and outstanding as of September 30, 2019

With respect to each matter submitted to a vote of stockholders of the Corporation, each holder of Series M Preferred Stock shall be entitled to cast that number of votes which is equivalent to the number of shares of Series M Preferred Stock owned by such holder times one (1).

(b) 1,000,000 is designated as Series AA Preferred Stock: 2,200 shares of Series AA Preferred Stock are issued and outstanding as of September 30, 2019.

With respect to each matter submitted to a vote of stockholders of the Corporation, each holder of Series AA Preferred Stock shall be entitled to cast that number of votes which is equivalent to the number of shares of Series AA Preferred Stock owned by such holder times 10,000 (10,000).

On any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the holders of the Series AA Preferred Stock shall receive, out of assets legally available for distribution to the Company's stockholders, a ratable share in the assets of the Corporation.

NOTE 11: RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS.

Subsequent to the original issuance of Zander’s quarterly financial statements for the periods ended September 30, 2018 the Company determined that it had improperly accounted for the Related Party Note Receivable  entered into on September 30, 2018. The Company had recognized a derivative asset, and a gain on the derivative, of $1,416,666 upon issuance. The Company also derecognized $12,557 of consulting expenses and recognized $13,033 of Research and Development consulting expenses.

For the Quarter Ended September 30, 2018:

The inclusion in Retained Deficit of $13,033 of Research and Development Expenses incurred by the Company

The inclusion in Accounts Payable of $13,033 of Research and Development Expenses incurred by the Company

The derecognition in Accounts Payable of $12,557 of Consulting Expenses incurred by the Company

The derecognition in Retained Deficit of $12,557 of Consulting Expenses incurred by the Company.

The derecognition of a Derivative Asset valued at $1,416,666

The derecognition from Retained Deficit of $1,416,666 of Gain on Derivative

The recognition during the Quarter ended September 30, 2018 of $13,033 of Research and Development Expenses incurred by the Company

The derecognition during the quarter ended September 30, 2018 of $12,557 of Consulting Expenses incurred by the Company.

The derecognition during the Quarter ended September 30, 2018 of a $1,416,666 of Gain on Derivative

Cumulative Effect of Restatement of Previously Issued Financial Statements:

For Quarter Ended September 30, 2018          

NOTE 12: SUBSEQUENT EVENTS

Management has evaluated subsequent events through the date of issuance noting no material subsequent events to report.

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 10Q 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 10K for the year ended June 30, 2018. All references to” We”, “Us”, “Company” or the “Company” refer to Zander Therapeutics, Inc.

As of September 30, 2019 we had Cash of $4,524 and as of June 30, 2019 we had Cash of $28,124

The decrease in cash of approximately 83.91% is primarily attributable to cash expended in the operation of the business of the registrant along with net loans made by the Company of $7,500 to Regen Biopharma, Inc., a related party, partially offset by net borrowings by the Company of $25,500 as well as $657 of cashback issued to the Company as part of a credit card rewards program.

As of September 30, 2019 we had Prepaid Expenses of $74,298 and as of June 30, 2019 we had Prepaid Expenses of $ $83,895.

The decrease in Prepaid Expenses of approximately 11.4% is primarily attributable to:

The recognition of $964 of interest expense prepaid in a prior period on a $500,000 Note Payable issued by the Company.

The recognition of $8,362 of combined Consulting and Research and Development consulting expenses prepaid in prior periods.

As of June 30, 2019 we had $1,942 of cash due from an employee of the Company and as of September 30, 2019 we had $1,071 of cash due from an employee of the Company.

The decrease in cash due from an employee of the Company of 44.82% is attributable to :

As of June 30, 2019 we had $56,900 of Notes Receivable, related party and as of September 30, 2019 we hade $64,400 of Notes Receivable, related party.

The increase in Notes Receivable, related party of 13.18% is attributable to net loans made by the Company during the quarter ended September 30, 2019 of $7,500 to Regen Biopharma, Inc., a related party under common control with the Company.

As of June 30, 2019 we had $14,208 of Accrued Interest Receivable, related party and as of September 30, 2019 we had $20,274 of Accrued Interest Receivable, related party.

The increase in Accrued Interest Receivable, related party of 42.7% is attributable to interest earned but notyet paid on Notes Receivable accrued during the quarter ended September 30, 2019.

As of June 30, 2019 we had Investment Securities, Related Parties of $2,472,321 and as of September 30, 2019 we had Investment Securities, Related Parties of $593,357.

The decrease in Investment Securities, related party of 76% is attributable to the revaluation as of September 30, 2019 of 197785714 shares of the Series A Preferred stock of Regen Biopharma, Inc. owned by the Company. All shares of Regen Biopharma, Inc. held by the Company are carried at fair value as of the measurement date which is September 30, 2019.

Zander and Regen are under common control. David Koos serves as Chairman & CEO of both Regen BioPharma, Inc. and Zander Therapeutics Inc. Todd S. Caven serves as CFO of both Regen BioPharma, Inc. and Zander Therapeutics Inc. Koos, Caven also serve as a Director of Zander Therapeutics, Inc. Zander Therapeutics, Inc. is the sole licensee of Regen's NR2F6 intellectual property for veterinary applications.

As of June 30, 2019 we had Notes Payable, related parties of $0 and as of September 30, 2019 we had Notes Payable, related parties of $25,500.

The increase in Notes Payable, related parties is attributable to $25,500 loaned to the Company by entities controlled by the Company’s Chief Executive Officer.

As of September 30, 2019 we had Accrued Expenses due to Related Parties of $89,529 and as of As of June 30, 2019 we had Accrued Expenses due to Related Parties of $43,761.

The increase in Accrued Expenses due to Related Parties of 104.89% is attributable to:

$27,424 in minimum royalties and anniversary fees accrued to KCL Therapeutics Inc. , a company under common control with Zander.

$18,000 in rental expenses accrued but unpaid due to BST Partners, a company under common control with Zander.

$344 of interest accrued but unpaid due to companies under common control with Zander.

On June 30, 2019 we had Accrued Expenses of $97,290 and as of September 30, 2019 we had Accrued Expenses of $203,037.

The increase in Accrued Expenses of approximately 108.69 % is attributable to:

$100,002 of salaries accrued but unpaid during the quarter ended September 30, 2019

$5,745 of license fees accrued to Monash University.

Revenues from continuing operations were $0 for the quarter ended September 30, 2019 and -0- for the same period ended 2018. Net Loss was $ 2,087,245 for the quarter ended September 30, 2019 while Net Loss was $772,039 for the same period ended 2018.

The increase in Net Losses of approximately 170% is primarily attributable to the recognition of a decrease in the fair value of investment securities held by the Company of $1,878,964. Operating loss recognized for the period ended September 30, 2019 was $213,707 as opposed to $798,289 of operating loss recognized during the same period ended 2018. The decrease on operating loss recognized during the period ended 2019 as compared to the same period ended 2018 is primarily attributable to $410,000 of contract research expenses incurred during the quarter ended 2018.

As of September, 2019 we had $4,524 Cash on Hand and Current Liabilities of $2,087,107, such Liabilities consisting of Accounts Payable, Notes Payable and Accrued Expenses.

We feel we will not be able to satisfy our cash requirements over the next twelve months and shall be required to seek additional financing.

We currently plan to raise additional funds primarily by offering securities for cash.

There is no guarantee that we will be able to raise any capital through any type of offerings. We cannot assure that we will be successful in obtaining additional financing necessary to implement our business plan. We have not received any commitment or expression of interest from any financing source that has given us any assurance that we will obtain the amount of additional financing in the future that we currently anticipate. For these and other reasons, we are not able to assure that we will obtain any additional financing or, if we are successful, that we can obtain any such financing on terms that may be reasonable in light of our current circumstances.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As a smaller reporting company, as defined by Rule 229.10(f) (1) of Regulation S-K, we are not required to provide the information required by this Item. We have chosen to disclose, however, that we have not engaged in any transactions, issued or bought any financial instruments or entered into any contracts that are required to be disclosed in response to this item.

Item 4. Controls and Procedures.

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 and Todd S. Caven who is the Company’s Chief Financial Officer and 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 and Principal Financial Officer have concluded that the Company’s disclosure controls and procedures are, in fact, effective at this reasonable assurance level as of the period covered.

Changes in Internal Controls over Financial Reporting

In connection with the evaluation of the Company’s internal controls during the period commencing on July 1, 2019 and ending on September 30, 2019, David Koos and Todd S. Caven , who serve as the Company’s Principal Executive Officer and Principal Financial Officer respectively, have determined that there were no changes to the Company’s internal controls over financial reporting that have been materially affected, or is reasonably likely to materially effect, the Company’s internal controls over financial reporting.

PART II - OTHER INFORMATION 

Item 1. Legal Proceedings.

There are no material pending legal proceedings to which the Company is a party or of which any of the Company’s property is the subject.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

There were no unregistered sales of equity securities during the quarter ended September 30, 2019.

Item 6. EXHIBITS 

* incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K dated 9/19/2019

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on October 24, 2019.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on October 24, 2019.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on October 24, 2019.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on October 24, 2019.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on October 24, 2019.