Forward-Looking Statements
Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words "believes," "project," "expects," "anticipates," "estimates," "intends," "strategy," "plan," "may," "will," "would," "will be," "will continue," "will likely result," and similar expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, cybersecurity, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further, information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with theSEC . Overview
Global Stem Cell Group Operations
Global Stem Cells Group's operations are dedicated to the regenerative medicine industry. We work with doctors and their staff to provide products, solutions, equipment, services, and training to help them be successful in the application of Stem Cell Therapies. Our team combines solutions from extensive clinical research with the manufacturing and commercialization of viable cell therapy and immune support related products that we believe will change the course of traditional medicine around the world forever. Our strategy allows us the ability to create immediate revenue streams through product sales, distribution, and clinical applications, driven by our extensive education platform. Our revenue comes directly from the training and the seminars, from the resale of these kits, products, and equipment, services, and from the reoccurring application of our process using the kits and solutions we provide.Global Stem Cells Group is a leader in the Stem Cell and Regenerative Medicine fields, covering clinical research, patient applications, along with physician training through our state-of-the-art global network of companies. The Company's mission is to enable physicians to make the benefits of stem cell medicine a reality for patients around the world. They have been educating doctors on the science and application of cell-based therapeutics for the past 10 years. Our professional trademarked association "ISCCA" INTERNATIONAL SOCIETY FOR STEM CELL APPLICATION is a global network of medical professionals that leverages these multinational relationships to build best practices and further our mission.
The Company envisions the ability to improve "health-span" through the discovery and developments of new cellular therapy products, and cutting-edge technology.
We believe this strategy will allow us the ability to increase our current revenues and create immediate revenue streams through product sales, distribution, and clinical applications, driven by our extensive education platform here are our main projects and revenue generators for 2022 and beyond.
Manufacturing Facilities
Our Flagship Operation in "Istanbul Center" deploys well-targeted combinations of Exosomes, allogeneic human Mesenchymal cells, autologous bone marrow, and Adipose derived stem cells to treat a wide array of diseases and debilitating medical conditions. Since 2018, we have completed over 7 industry seminars and training sessions inIstanbul . Through our joint venture/partnership with Biotrend Technology that was completed in February this year, our treatment plans are focused mostly on a systemic and/or whole-body approach. This new processing facility works with our local partner to provide the latest in Stem Cell Therapies to many of those in this region who have no access to these kinds of cutting-edge medical solutions. Our physician training services will help educate and generate demand for our solutions, services, and products. 26 Biotrend Technology's CEO, DrSalih Yildrim , is the acting ISSCA Director and this center operates under our brand Global Stem Cell Group name. Biotrend Technology is a fully staffed facility that operates also in other forms or regenerative health procedures that we do not participate in. This Joint Venture operates as a pure revenue sharing agreement whereas we do not own the lease, employees, or any other P&L expenses. They operate under the GSCG name, utilizing our products, services, training, and procedures. Dr.Salih Yildirim sits on our GSCG staff and is the Director of Overseas Operations. He functions as the International Relations Program Manager at Cleveland Clinic Turkey and is GSCG's Managing Director overBioTrend Medical International . He is also engaged in consulting and identifying business development opportunities locally and regionally
Cell Therapy Product Manufacturing Facility in
The
We have assembled a highly qualified team of medical professionals and technicians that specialize in GSCG's processes, solutions, and services. Our processing facilities inCancun is top-notch, and include a laboratory to culture-expand cells, a process that yields better patient results, and a cryopreservation unit to keep these extracted samples stored safely until they are needed. ThisLaboratory/ Treatment Center will have the latest technologies available including NK Cell Therapy CAR T-cell for cancer treatment and produce full Lines of Msc and Exosomes. Our model is to work hand-in-hand with the patients' physicians to provide a total quality experience in this innovative industry. Our revenue is derived from training doctors, providing services to each patient that these doctors bring to us for treatments, and the solutions and products they utilize.
Cell Therapy Product manufacturing facility in
Similar to
Products
Solidifying and increasing our Presence worldwide www.cellgenic.com, we are completing our new catalog ofCell Therapy products manufactured completely in house as opposed of our previous re seller model. This new series of products include: ? CELLGENIC FLOW EXOSOMES This is the company's flagship product, which stands ready to revolutionize the practice of regenerative medicine as we know it today. Exosomes are extracellular vesicles that float freely within the blood, very much like platelets. These are cell-derived
non-particles that play a pivotal role in cell-to-cell communication that
are involved in a wide range of physiological processes. Exosomes play an
important role in the transfer of proteins and other bioactive molecules
between cells and regulate gene expression in recipient cells, thus influencing various molecular pathways and have a wide range of therapeutic implications, including hair loss and pain management. ? CELLGENIC MSC (Mesenchymal Stem Cell) This product excretes growth factors, cytokines, and proteins, which all play a key role in the
regeneration of tissue. Their anti-inflammatory and immunomodulatory
properties mean that it is difficult for them to be rejected by the body.
Additionally, they increase blood flow to the vital organs that need it
the most. MSC has immunomodulatory effects that have an effect on macrophages, neutrophils, NK cells, mast cells and dendritic cells in innate immunity with known anti-inflammatory benefits.
? CELLGENIC LUMA (Lyophilized Exosomes) is derived from human umbilical cord
mesenchymal stem cells and includes potent growth factors, peptides,
coenzymes, minerals, amino acids, vitamins and UV radiation reducing
agents for skin revitalization. Exosomes are extracellular vesicles, which
is the medical term for tiny bubbles that are released from stem cells. Exosomes carry genetic information and proteins to cells throughout your body, and they create paths for communication between cells to help combat aging skin, environmental damage and loss of elasticity and tone. 27
? VITANOVAS is a mobile IV infusion company that provides in-home treatments
to patients in need of immune modulation to help fight infections, viruses, and diseases. ? GCELL RESTORE GCell technology is a closed-system medical device that
harnesses the natural and powerful restorative capabilities of adipose
tissue. It is a cutting-edge tool that utilizes micrograft technology to
harness the natural and powerful restorative capabilities of adipose
tissues. This is a precise system that is able to process a stem cell
sample from adipose tissue in less than half of the time that it would
take a physician to do so through traditional means. This allows the
patient to be more comfortable throughout the shorter procedure, as less
anesthesia is also required than when operating under traditional means.
The GCell is a minimally invasive, portable machine that allows physicians
to fully unlock the potential of regenerative medicine as a component in
their practice.
? CELLGENIC SVF is an isolation kit system that has all the ingredients and
consumables for the extraction of adipose-Derived Stem cells from fat. This complete kit it is currently being used in clinical procedures for lung disease, intra-articular injections for osteoarthritis of the knee and hip, cosmetic surgery, dermal injection, stem cell enriched fat transfer, wounds chronic ulcers among other chronic conditions.
? CELLGENIC
gradient centrifugation. With careful attention to detail the BMC system
gently and precisely processes bone marrow aspirate for the purest
concentration of these cells at the point of care. BMC is part of a
developmental effort to provide an effective therapy that is low risk. It
recovers a large percentage of platelet rich plasma and other total nucleated cells in a treatment sample. It is a closed system with strong performance outcomes and outstanding product stability. ? CELLGENIC PRP (Platelet Rich Plasma) is used to encourage healing and
reduce inflammation. As a concentrated source of autologous platelets, PRP
contains several growth factors and other cytokines that can stimulate the
healing of soft tissues.Global Stem Cells Group's future is looking bright as we look to bounce back from the pandemic effect on our operations. We are uniquely positioned to reach our revenue goals due to our global presence and network of independent businesses. We stand positioned to give the world access to the full spectrum of everything regenerative medicine can offer-- from being a source for products themselves, to sourcing equipment, to treating patients. We are able to do this because of our decade of experience in the field, and because of the world-class leadership and organization of the Group. Leaders in stem cell medicine trust the high quality ofGlobal Stem Cells Group's world-class stem cell therapies, and physicians all over the world have come to value it as a trusted source for the newest ground-breaking research and development in the field of regenerative Medicine. 28
Patents and Proprietary Rights
We are committed to the protection of our intellectual property of proprietary products and process as well as trademarks and other methods described below.
Our business includes the development of proprietary cell therapy products as well as revenue generating physician and patient based regenerative medicine / cell therapy training services, cell collection and cell storage services, the sale of cell collection and treatment kits for humans and animals, and the operation of a cell therapy clinic.
On
On
We own proprietary protocols for the harvesting and isolation of Stem Cells
Derived from the adipose tissue and
We also own proprietary standard operating procedures for the manufacturing of allogeneic cellular therapy products derived from perinatal tissue.
None of these protocols or IP have been patented.. However, we rely on our own trade secrets and proprietary know-how to protect our technology and maintain our competitive position, since patent protection may not be available or applicable to our technology. Competition We face competitors in many different segments of our business models. We face intense competition from companies with much larger capital resources than us, and, as a result, we could struggle to attract customers and gain market share. Many of our existing or future competitors have greater financial resources and greater brand name recognition than we do and, as a result, may be better positioned to adapt to changes in the industry or the economy as a whole. We will strive to advance our products and technology in each of these sectors ahead of our competitors to gain market share. We also face intense competition in attracting and retaining qualified employees. Our ability to continue to compete effectively will depend upon our ability to attract new employees, retain and motivate our existing employees and to compensate employees competitively. We face significant competition in several aspects of our business, and such competition might increase, particularly in the market for regenerative therapies. Our competitors may announce new products, services or enhancements that better address changing industry standards on regenerative care. Any such increased competition could cause pricing pressure, loss of business or decreased customer purchases, any of which could adversely affect our business and operating results. We believe that we have competitive strengths and protection via our depth of services and products that we offer in the regenerative medicine field, including, but without limitation to, cell therapy products, isolation systems, physician training, laboratory build outs, medical tourism, and more.
While there are particular or specific competitors in any one of these areas, no one is currently providing the full service one stop solution for such a complete range of offerings in this industry as we are.
Furthermore, we compete by becoming a resource, creating standards of practice, advancing the Stem Cell field in general, and by connecting associates and partners in many different aspects of the business.
Government Regulations Although Stem Cell therapy is heavily regulated in the US by the Food and Drug administrator, Global Stem Cells group does not focus its business portfolio in US markets, to this end, we have suspended operations in the US. As such, we are not constrained by FDA regulatory jurisdictions. We now operate exclusively in countries where clear regulatory pathways to manufacturing and practice exist. 29 MarketingGlobal Stem Cell Group uses its vast network of professionals in the regenerative and therapeutic industries to market and grow our business. Training seminars held on location in more than a dozen international locations have helped drive the attraction that is bringing new business to our group. The ISCCA is our professional association and is a global network of medical professionals that leverages these multinational relationships to build best practices and further our mission. Our physician training services educate and generate continued reoccurring demand for our solutions, services, and products. The more we educate physicians about our products and services, the more physician referrals we have received. It has been a difficult task to introduce new methodologies to physicians with more traditional views, but word of mouth has played a crucial role in the growth of our company and our reputation in the industry. We believe our website will further expand our growth as new physicians have an easy to understand synopses of our how our products and services may assist with and benefit their patients. We believe that as our network of physicians widens we will experience significant growth from repeat business from existing clients and with new business from patient referrals. Numismatics Operations
Having locations inCosta Rica andFlorida for the purposes of conveniently shipping products, the Company has the ability to export its inventory of coins, paper currency, bullion and medals fromCosta Rica , to be sold in theU.S. and around the world. Likewise, the Company also imports such products back toCosta Rica , to be sold throughout the local markets. The Company adheres to strict processes related to acquisition and sale of its products. It begins by selecting the best inventory, be it a rare coin fromLatin America , or a banknote with an error fromthe United States . All inventory is carefully screened by management, then sent to be graded by the proper grading authority. For all coins, medals and bullion, the Company's inventory is sent to theNumismatic Guaranty Company for authentication and grading. For all banknotes, the Company utilizes the services ofPaper Money Guaranty, LLC for authentication and grading, bothFlorida -based companies. Once graded, the inventory is sent to the Company'sFlorida -based location prior to being sent to one of the Company's many customers around the world. We maintain an online store with eBay (www.mesocoins.com) and participate in live auctions with major companies such as Heritage Auctions, Stacks Bowers Auctions, Lyn Knight Auctions and Sedwick Coins for the sale of its coins, paper currency, bullion and medals. The Company also launched a new application technology available on theGoogle Play Store , as well as theApple App Store . The Application is a banknote scanner which instantly identifies key characteristics of a banknote. This includes the catalog reference number of the note, the value, which entity it was issued by, the country of origin and the printer that printed the note. A picture of each note from our database of more than 61,000 banknotes from a combined 750 countries and regions will also be included with the information. For the numismatic industry in particular, this application eliminates the need for reference books, as well as the hours of time it takes to reference all the information about banknotes. With a simple snap of a picture, information is provided to the end-user almost instantaneously.Meso expects to continue to acquire rare inventory at market rates, from throughout theMeso Region (includingCentral America and theCaribbean ). The inventory is then sent for authentication and grading, followed by said items being sold throughoutMeso's sales outlets. This includes an eBay store with up to, but not limited to,$50,000 in items for sale at any one time. For some of the Company's rarer inventory, items are sent to major auction houses around the world for sale. As ofDecember 31, 2021 , the Company is working on an inventory tracking system by serial number. Until such time the inventory costs cannot be properly confirmed, therefore any inventory balances are expensed during each reporting period. 30 License Agreements Coins / Medals
The Company's inventory is comprised of roughly 50% coins / medals and 50% paper
money. The Company has a meticulous process for the acquisition and sales
process for each coin item. The Company specializes in coins from the
The process starts by visiting local shops and establishments throughout theMeso region to gather information about the coins that Company's management is considering for acquisition. Once an item has been selected, it is paid for, then packaged and sent fromMeso's Costa Rica location to the Company'sFlorida location. From there, the merchandise is once again examined, then sent to NGC (theNumismatic Guaranty Company ) for grading and authentication. After approximately three weeks, the items are sent back toMeso's Florida location for storage, safekeeping and subsequent distribution to its respective destinations. Management carefully evaluates the grades assigned to each piece of merchandise and then decides which items will be sold through its eBay store, which items will be sold at live auction and which items will be traded for other items. Some pieces are also sent back toCosta Rica for trading, some are sold on eBay and some go to auction powerhouses around the globe.Meso also acquires ungraded coins / medals from eBay, as well as at specialty shops throughout theMeso region and during certainU.S. shows. Those items are taken through the same aforementioned process. Paper Money
As indicated above, paper money makes up approximately 50% of
Meso's management often visits local banks and central banks throughout theMeso region. Management selects banknotes within bundles, aiming to acquire rare and exceptional notes. This includes RADARS (the same serial number back-and-forth), errors and uncirculated rarities. The note is then sent fromCosta Rica toFlorida for grading and authentication. For this service, the Company utilizes the Paper Money Guaranty, which is expected to examine the note in great detail, then offers a grade for its condition. The note is encased, then sent back toMeso's Florida location for distribution to its final destination. Similarly to coins, management inspects each note, then decides whether it will be sold on eBay, at a specialty auction, or traded for other merchandise in theMeso Region . Similar to coins,Meso also purchases ungraded notes on eBay or at other stores, has them graded through the same process, then decides where to sell it at
the end. Industry Overview Numismatics itself is the study or collecting of currency, including but not limited to paper money, coins, medals, tokens and other objects. Numismatics is often associated with stamp collecting, philately, and is equally as popular when it comes to hobbies around the world. The numismatic industry is a multi-billion-dollar market that continues to grow year-over-year. Estimates provided by PNG (The Professional Numismatists Guild ) placed theU.S. rare coin market at between$3.4 and$4 billion in 2018. At the forefront of the numismatic industry is NGC (The Numismatics Guaranty Company ) and PMG (The Paper Money Guaranty). These two organizations, with locations around the world, are responsible for the majority of authenticating and grading various forms of currency. Since its inception in 1987, NGC has graded more than 42 million coins, with 61% representing the US, 16% representingAsia , $13% representingEurope , and, a combined 8% representingAfrica ,South America andAustralia . 31 Growth Strategy According to an article published in aMay 2017 edition of The Economist, the global numismatic market has a value between$5 Billion and$8 Billion per year. It has been noted that out of all the global numismatic sales around the world,the United States is responsible for roughly 85% of the market, further depicted in the chart below. We believe we can capture market share in the U.S. market and we believe we are well positioned to take advantage of, As indicated by the following chart, the Company has the opportunity for growth within theU.S. and the Latin American region as well. The Company has the opportunity for growth within the Latin American region as well. The Company also expects to perform outreach and educateLatin America andAustralia about the value of numismatics. Many Latin American countries postal services are difficult to navigate due to political unrest and corruption. We believe we have an advantage by having boots on the ground inCosta Rica , and associates throughout all ofLatin America , which affords us the opportunity to procure almost any type of item and safely have it graded and then sold. Successful importation and exportation of merchandise betweenCentral America andthe United States is crucial for the Company. Being able to acquire inventory at reduced costs, then selling the items for healthy profits, once graded, continues to be the key to growth. The Company anticipates organic growth as well growth through acquisitions, as the right opportunities present themselves. The Company has and will continue to reinvest capital in new inventory, further supporting its long-term goal of becoming a recognized, global numismatic brand. Possible future acquisitions include websites / social media pages, in addition to physical numismatic businesses that could become available. These acquisitions could be solely of a company's inventory, or their physical location and assets as well. Competitive Strengths Technology
To our knowledge,
The Meso App, available on theGoogle Play Store and theApple App Store , is expected to eventually be transitioned into a platform to buy, sell, and trade banknotes. Monetization is expected come from advertisers displaying banner ads, as well as transactional fees from the sales of items. The Company also has the ability, although it does not do so yet, to charge the user for general use
of the App. LocationMeso Numismatics has office locations inSan Jose, Costa Rica andBoca Raton, Florida . Having dual locations, especially in these two areas in particular, is extremely advantageous to the Company. The Costa Rican location ofMeso is pivotal for the Company. Management in this location is able to obtain some items, below-market prices due to relationships made within the industry. While a US collector must pay for an item (usually with a premium) plus shipping and handling, having management on the ground allows the Company to acquire items without the extra costs. Management also has relationships with dealers throughout the region and trades / exchanges merchandise for better items. The majority of the Company's inventory originates inCosta Rica , then is shipped toFlorida for grading and authentication. TheBoca Raton location ofMeso is almost as pivotal as the Costa Rican location, as the leading grader and authenticator of merchandise (PMG and NGC) also has locations inFlorida . Merchandise is sent fromCosta Rica toBoca Raton . Once inventoried, merchandise is sent to PMG or NGC for grading and authenticating. Once complete, the inventory is returned to theBoca Raton location where it is safely housed and distributed to its final location. Having this location allows the Company to ship items globally at significantly lower rates than shipping fromCosta Rica . 32 Strategic PartnershipsMeso has strategically partnered with Softon Digital ("Softon") ofCosta Rica , in addition to the above relationships with PMG and NGC. Softon assisted in the development and creation of the Meso App and it is expected that Softon will continue to help the Company evolve the technological portion of the business, with their team of programmers and engineers. Competition
In the coins and other collectibles business, we will compete with a number of comparably sized and smaller firms, as well as a number of larger firms throughoutthe United States . Our primary competitors are American Numismatic Rarities, a comparably-sized coin auctioneer. Many of our competitors have the ability to attract customers as a result of their reputation and the quality collectibles they obtain through their industry connections. Additionally, other reputable companies that sell rare coins and other collectibles may decide to enter our markets to compete with us. These companies have greater name recognition and have greater financial and marketing resources than we do. If these auction companies are successful in entering the specialized market for premium collectibles in which we participate or if dealers and sellers participate less in our auctions, we may attract fewer buyers and our revenue could decrease. Results of Operations
Results of Operations for the Three Months Ended
Below is a summary of the results of operations for the three months endedMarch 31, 2022 and 2021. For the Three Months Ended March 31, % 2022 2021 $ Change Change Revenue$ 310,078 $ 4,443 $ 305,635 6,879 % Cost of revenue 203,593 14,790 188,803 1,277 % Gross profit 106,485 (10,347 ) 116,832 1,129 % Operating expenses Advertising and marketing 54,614 237 54,377 22,944 % Professional fees 395,739 113,787 281,952 248 % Officer compensation 22,500 15,000 7,500 50 % Depreciation and amortization expense 26,977 200
26,777 13,388 % Investor relations 47,250 2,898 44,352 1,530 % General and administrative 101,918 10,610 91,308 861 % Total operating expenses 648,998 142,732 506,266 355 % Other income (expense) Interest expense (1,140,529 ) (319,228 ) (821,301 ) 257 %
Derivative financial instruments 6,079 -
6,079 100 % Net loss$ (1,676,963 ) $ (472,307 ) $ (1,204,656 ) 255 % 33 Revenue
Revenue increased by 6,879% in the amount of$305,635 for the three months endedMarch 31, 2022 , compared to the same period in 2021. The key reason for the increase in revenue was a result of the acquisition ofGlobal Stem Cells Group, Inc. onAugust 18, 2021 . Revenue from viable cell therapy and immune support related products along with physician training was$298,748 and an increase in sale of coins, metals and paper money of$6,887 for the three months endedMarch 31, 2022 , compared to the same period in 2021.
Listed below are the revenues, cost of revenues and gross profits by Company for
the three months ended
For the Three Months Ended March 31, 2022 Global Stem Meso Cells Group Numismatics Total Revenue$ 298,749 $ 11,329 $ 310,078 Cost of revenue 192,484 11,109 203,593 Gross profit$ 106,265 $ 220$ 106,485 Gross profit % 35.57 % 1.95 % 34.34 % Operating expenses Operating expenses increased by 355% in the amount of$506,266 for the three months endedMarch 31, 2022 , compared to the same period in 2021. Listed below are the major changes to operating expenses:
Professional fees increased by
Officer compensation increased by$7,500 for the three months endedMarch 31, 2022 , compared to the same period in 2021, primarily due to a monthly based on annual rate of$90k startingJanuary 1, 2022
General and administrative expense increase by
Other expense Other expense increased by$815,222 for the three months endedMarch 31, 2022 , compared to the same period in 2021, primarily as a result of the increase in amortization of discounts and interest on promissory notes. Net Loss
We recorded a net loss of
Liquidity and Capital Resources
Since inception, the Company has financed its operations through private
placements and convertible notes. The following is a summary of the cash and
cash equivalents as of
March 31, December 31, % 2022 2021 $ Change Change Cash and cash equivalents$ 2,461,023 $ 2,978,525 $ (517,502 ) -17 % 34
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