United States Securities and Exchange Commission

Washington, D.C. 20549

Form 10-K

☒ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934:

For the fiscal year ending August 31, 2018

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934: For the transition period from ___________ to ___________.

Commission file number: 333-154989

ENTEST GROUP, INC.

(Name of small business issuer in its charter)

Nevada		26-3431263
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

4700 Spring Street, Suite 304, La Mesa, California, 91942

(Address of Principal executive offices)

Issuer’s telephone number: ( 619) 702-1404

_______________

Securities registered under Section 12(b) of the “Exchange Act” None

Securities registered under Section 12(g) of the Exchange Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the 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 ☒ No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or smaller reporting company.

Large accelerated filer ☐	Accelerated filer ☐
Non accelerated filer ☐	Smaller reporting Company ☒

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

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☐

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, as of the last business day of the registrant’s most recently completed second fiscal quarter: $ 470,842

As of November 16, 2018 Entest BioMedical, Inc. had 49,170,472 common shares outstanding, 728, 009 Series B Preferred shares outstanding , 667 Series AA preferred shares outstanding , 534 Series AAA preferred shares outstanding and 1001533 shares outstanding of the Company’s Non Voting Convertible Preferred Stock. .

In this annual report, the terms “Entest BioMedical, Inc.. ”, “Entest”, “Company”, “we”, or “our”, unless the context otherwise requires, mean Entest BioMedical, Inc., a Nevada corporation, and its subsidiaries.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This annual report on Form 10-K and other reports that we file with the SEC contain statements that are considered forward-looking statements. Forward-looking statements give the Company’s current expectations, plans, objectives, assumptions or forecasts of future events. All statements other than statements of current or historical fact contained in this annual report, including statements regarding the Company’s future financial position, business strategy, budgets, projected costs and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “estimate,” “plans,” “potential,” “projects,” “ongoing,” “expects,” “management believes,” “we believe,” “we intend,” and similar expressions. These statements are based on the Company’s current plans and are subject to risks and uncertainties, and as such the Company’s actual future activities and results of operations may be materially different from those set forth in the forward looking statements. Any or all of the forward-looking statements in this annual report may turn out to be inaccurate and as such, you should not place undue reliance on these forward-looking statements. The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy and financial needs. The forward-looking statements can be affected by inaccurate assumptions or by known or unknown risks, uncertainties and assumptions due to a number of factors.

These forward-looking statements speak only as of the date on which they are made, and except to the extent required by federal securities laws, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements contained in this annual report.

PART I

Item 1. Business

We were incorporated in the State of Nevada on September 24, 2008 as JB Clothing Corporation. Until July 10, 2009, our principal business objective was the offering of active/leisure fashion design clothing.

On July 10, 2009 we abandoned our efforts in the field of active/leisure fashion design clothing when we acquired 100% of the share capital of Entest BioMedical, Inc., a California corporation, (“Entest CA”) from Bio-Matrix Scientific Group, Inc. (“BMSN”) for consideration consisting of 10,000,000 shares of the common stock of the Company and the cancellation of 10,000,000 shares of the Company owned and held by Mr. Rick Plote.

As a result of this transaction, the former stockholder of Entest CA held approximately 70% of the voting capital stock of the Company immediately after the transaction. For financial accounting purposes, this acquisition was a reverse acquisition of the Company by Entest CA under the purchase method of accounting, and was treated as a recapitalization with Entest CA as the acquirer..

Upon acquisition of Entest CA, we abandoned our efforts in the field of active/leisure fashion design clothing. On July 12, 2009 we adopted the name of Entest CA when we changed our name to Entest BioMedical, Inc. On June 18, 2015 Entest established Zander Therapeutics, Inc., a then wholly owned subsidiary. Zander was established to engage primarily in the development and commercialization of veterinary medical therapies which we intend to license from other entities as well as develop internally

The Company changed its name to Entest Group, Inc. on February 12, 2018.

On May 5, 2018, The Company declared the distribution on a pro rata basis as a dividend in kind of 3,000,000 of the common shares of Zander Therapeutics, Inc., par value $0.0001, currently owned by Entest Group, Inc. to:

(a) Holders of record of the outstanding common shares of the Company as of the record date, which is May 30, 2018.

(b) Holders of record of the shares of any outstanding series of the preferred shares of the Company as of the record date, which is May 30, 2018.

Shareholders of the Company shall receive one (1) common share of Zander Therapeutics, Inc. for each 17 common and/or preferred shares of the Company held as of the record date. The distribution of the 3,000,000 common shares of Zander Therapeutics, Inc. to the common and preferred shareholders of the Company occurred on June 11, 2018 ("Distribution Date").

As a result of the payment of the abovementioned property dividend, the Company’s percentage of ownership of Zander fell below 50% resulting in the deconsolidation of Zander as of the Distribution Date. As of the Distribution Date all assets and liabilities attributable to Zander were derecognized by the Company. The Company recognized a $10,034 gain as a result of the deconsolidation. The Property dividend may be deemed to have occurred with a related party as the recipients were shareholders of Entest, including the Chairman and Chief Executive Officer of Entest and Regen Biopharma, Inc. which is a company under common control with Entest.

The Company’s remaining share of Zander , which consists of 5,000,000 shares of Zander’s Series M Preferred Stock (“Zander M Stock”) is accounted for under the Equity Method as of the Distribution Date. The Zander M Stock is carried a Fair Value and the carrying value is increased by the Company’s proportionate share of earnings of Zander and decreased by cash dividends paid by Zander as well as the Company’s proportionate share of losses of Zander up to the carrying value . As of August 31, 2018 the carrying value of the Zander M Stock has been decreased by the Company’s proportionate share of the losses of Zander and is 0. As of August 31, 2018 Entest beneficially owns 34.82% of the share equity of Zander.

As of November 16, 2018 the Company is a “shell company” as that term is defined in Rule 12b-2 of the Securities and Exchange Act which is a registrant that has:

(1) No or nominal operations; and

(2) Either:

(i) No or nominal assets;

(ii) Assets consisting solely of cash and cash equivalents; or

(iii) Assets consisting of any amount of cash and cash equivalents and nominal other assets.

The Company's current business strategy is to acquire an operating company seeking the perceived advantages of being a publicly held corporation. No assurance can be given that such an acquisition shall occur or, if such an acquisition were to occur, it would occur on terms and conditions beneficial to the Company or its shareholders.

Distribution methods of the products or services:

Entest currently provides no product or service

Competitive business conditions and Entest's competitive position in the industry and methods of competition

The Company will face vast competition from other shell companies that desire to seek a potential business combination with a private company seeking the perceived advantages of being a publicly held corporation. The Company will be in a highly competitive market for a small number of business opportunities which could reduce the likelihood of consummating a successful business combination. A large number of established and well-financed entities, including small public companies and venture capital firms, are active in mergers and acquisitions of companies that may be desirable target candidates for us. Nearly all these entities have significantly greater financial resources, technical expertise and managerial capabilities than we do; consequently, we will be at a competitive disadvantage in identifying possible business opportunities and successfully completing a business combination. These competitive factors may reduce the likelihood of our identifying and consummating a successful business

combination.

Need for any government approval of principal products or services, effect of existing or probable governmental regulations on the business

The Company is unaware of any government approval currently required in order for the Company to complete an acquisition of an operating company. The Company is subject to federal and state securities laws.

Amount spent during the last fiscal year on research and development activities

During the fiscal year ended August 31, 2018 the consolidated Company expended $949,584 on research and development activities.

Costs and effects of compliance with environmental laws (federal, state and local);

Entest has not incurred any unusual or significant costs to remain in compliance with any environmental laws and does not expect to incur any unusual or significant costs to remain in compliance with any environmental laws in the foreseeable future.

Number of total employees and number of full-time employees

As of November 16, 2018, the Company has 1 employee of which 1 is partl time.

Sources and availability of raw materials and the names of principal suppliers

Entest currently has no need for raw materials or supplies

Patents, trademarks, licenses, franchises, concessions, royalty agreements or labor contracts, including duration.

Entest possesses no patents or trademarks. Entest has not been granted any license, franchise or concession. Entest is not party to any royalty agreement or labor contract.

Item 2. Properties

On November 1, 2011, the Company entered into an agreement to lease approximately 2,320 square feet of office space beginning December 1, 2011 for a period of five years.

Rent to be charged to the Company pursuant to the lease is as follows:

$2,996 per month for the period beginning December 1, 2011 and ending November 30, 2012

$3,116 per month for the period beginning December 1, 2012 and ending November 30, 2013

$3,241 per month for the period beginning December 1, 2013 and ending November 30, 2014

$3,371 per month for the period beginning December 1, 2014 and ending November 30, 2015

$3,506 per month for the period beginning December 1, 2015 and ending November 30, 2016

On November 27, 2016 the lease was extended until November 30, 2021

Rent to be charged to the Company pursuant to the extension is as follows:

$2,996 per month for the period beginning December 1, 2016 and ending November 30, 2017

$3,116 per month for the period beginning December 1, 2017 and ending November 30, 2018

$3,241 per month for the period beginning December 1, 2018 and ending November 30, 2019

$3,371 per month for the period beginning December 1, 2019 and ending November 30, 2020

$3,506 per month for the period beginning December 1, 2020 and ending November 30, 2021

This property is utilized as office space. The Company believes that the foregoing property is adequate to meet its current needs.

Item 3. Legal Proceedings

None

Item 4. Submission of Matters to a Vote of Security Holders

No matter was submitted during the fourth quarter of the fiscal year covered by this report to a vote of security holders, through the solicitation of proxies or otherwise.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

The Company’s common stock is a "penny stock," as defined in Rule 3a51-1 under the Exchange Act. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its sales person in the transaction, and monthly account statements showing the market value of each penny stock held in the customer's account. In addition, the penny stock rules require that the broker-dealer, not otherwise exempt from such rules, must make a special written determination that the penny stock is suitable for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure rules have the effect of reducing the level of trading activity in the secondary market for a stock that becomes subject to the penny stock rules. So long as the common stock of the Company is subject to the penny stock rules, it may be more difficult to sell common stock of the Company.

The Company’s authorized capital stock consists of 500,000,000 shares of common stock with a par value $0.0001, and 5,000,000 shares of preferred stock with a par value $0.0001 per share (of which 100,000 are designated as Series AA Preferred Stock, 4,400,000 are designated as Series B Preferred Stock and 300,000 are designated as Series AAA Preferred Stock) and 3,000,000 shares authorized of Non Voting Convertible Preferred Stock, par value $1.00 . As of November 16,2018 Entest BioMedical, Inc. had 49,170,472 common shares outstanding, 728, 009 Series B Preferred shares outstanding , 667 Series AA preferred shares outstanding, 534 Series AAA preferred shares outstanding, and 1001533 shares of the Company’s Non Voting Convertible Preferred Stock outstanding.

(a)

Our common stock is traded on the OTC Pink Tier of OTC Markets under the symbol "ETNI”. Below is the range of high and low price information for our common equity for each quarter within the last two fiscal years as reported by OTC Markets.

September 1, 2017 to August 31, 2018	High		Low
First Quarter	$	0.0182	$	0.0068
Second Quarter		0.0205		0.0068
Third Quarter		0.0405		0.0092
Fourth Quarter	$	0.054	$	0.011
September 1, 2016 to August 31, 2017		High		Low
First Quarter	$	0.0919	$	0.0038
Second Quarter		0.0559		0.02
Third Quarter		0.055		0.015
Fourth Quarter	$	0.0201	$	0.045

Holders

As of August 31, 2018 there were approximately 40 holders of our Common Stock.

Dividends

No cash dividends were paid during the fiscal year ending August 31, 2018. We do not expect to declare cash dividends in the immediate future.

Recent Sales of Unregistered Securities

On September 8, 2017 the Company issued 2,500,000 Common Shares (“Shares”)in connection with a conversion of 25,000 Non Voting Convertible Preferred Shares.

The Shares were issued pursuant to Section 4(a) (2) of the Securities Act of 1933, as amended (the “Act”). No underwriters were retained to serve as placement agents for the sale. The shares were sold directly through our management. No commission or other consideration was paid in connection with the sale of the shares. There was no advertisement or general solicitation made in connection with this Offer and Sale of Shares. A legend was placed on the certificate that evidences the Shares stating that the Shares have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale of the Shares.

Item 6. Selected Financial Data

As we are a “smaller reporting company” as defined by Rule 229.10(f)(1), we are not required to provide the information required by this Item.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

As of August 31, 2017, we had Cash in the amount of $86,559 and as of August 31, 2018 we had Cash in the amount of $267.

The decrease in Cash of approximately 99.7% is primarily attributable to the derecognition of the assets of Zander Therapeutics, Inc. which was deconsolidated from the Company on June 11, 2018.

As of August 31, 2017 we had Accrued Interest Receivable of $908 and as of August 31 2018 we had Accrued Interest Receivable of $1,040.

The increase in Accrued Interest Receivable of approximately 14.2% is attributable to $132 of interest earned by the Company during the quarter ended February 28, 2018 resulting from a short term loan made by the Company, the principal on such loan paid during the quarter ended February 28, 2018.

As of August 31, 2017 we had Prepaid Expenses of $58,652 and as of the end of the same period ended 2018 we had Prepaid Expenses of $8,000.

The decrease in Prepaid Expenses of approximately 86.3% is primarily attributable to $50,652 of fees prepaid to consultants during the fiscal year ended 2017.

As of August 31, 2017 we had Securities Available for Sale in the amount of $190,050 and as of August 31, 2018 we had Securities Available for Sale in the amount of $0.

The decrease in Securities Available for Sale is attributable to the sale by the Company of 3,500,000 of the Series A Preferred shares of Regen Biopharma, Inc.to Zander Therapeutics, Inc.

David R. Koos, the Chairman and Chief Executive Officer of the Company, serves in the same capacity at Regen Biopharma, Inc. and Zander Therapeutics, Inc.

As of August 31, 2017 we had Notes Payable of $13,501 and as of August 31, 2018 we had Notes Payable of $19,601.

The increase in Notes Payable of approximately 45.1% is attributable to the incurrence of an additional $2,500 of principal indebtedness from the Company’s Chairman and incurrence of an additional $3,600 of principal indebtedness from an entity controlled by the Company’s Chairman.

As of August 31, 2017 we had Accrued Expenses of $269,398 and as of August 31, 2018 we had Accrued Expenses of $181,904.

The reduction in accrued expenses of approximately 32.4% is primarily attributable to payment during the year ended August 31, 2018 of $88,000 of salary accrued but unpaid to David R. Koos, the Company’s sole officer as well as derecognition of $818 of accrued interest during the year ended August 31 2018 attributable to the deconsolidation of Zander Therapeutics, Inc. offset by interest accrued but unpaid due on Notes payable.

As of August 31, 2018 we had Unearned Rental Income of $17,000 and as of August 31, 2017 we had Unearned Rental Income of $0.

The increase in Unearned Rental Income is attributable to rental income prepaid to the Company by Regen Biopharma, Inc. Regen Biopharma, Inc. is under common control with the Company.

As of August 31, 2018 we had a bank overdraft of $66 and as of August 31, 2017 we had a bank overdraft of $0.

The increase in bank overdraft is attributable to withdrawals of $66 in excess of the balance of a bank account maintained by the Company.

Revenues from continuing operations were $0 for the year ended August 31, 2017 and -0- for the year ended August 31, 2018. Net Losses from continuing operations were $664,792 for the year ended August 31, 2017 and $1,477,484 for the same period ended 2018.

The increase in Net Loss of approximately 122.2% is primarily attributable to Research and Development Fees incurred by Zander Therapeutics, Inc. during that period of the fiscal year during which Zander Therapeutics, Inc. was a consolidated subsidiary of the Company and recognition of the Company’s equity in the losses of Zander Therapeutics, Inc. during the period beginning June 11, 2018 and ending August 31, 2018. These losses were offset by gains on sale of investment securities and a one time gain of $10,034 recognized in connection with the deconsolidation of Zander Therapeutics, Inc.

As of August 31, 2018 we had $267 cash on hand and current liabilities of $255,018 such liabilities consisting of Accounts Payable, Notes Payable, Amounts due to Others and Accrued Expenses.

We feel we will not be able to satisfy our cash requirements over the next twelve months. The Company seeks to acquire an operating company seeking the perceived advantages of being a publicly held corporation. No assurance can be given that such an acquisition shall occur or, if such an acquisition were to occur, it would occur on terms and conditions beneficial to the Company or its shareholders.

As of November 16, 2018 we are not party to any binding agreements which would commit Entest to any material capital expenditures.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

As we are a smaller reporting company, as defined by Rule 229.10(f)(1), we are not required to provide the information required by this Item.

Item 8. Financial Statements and Supplementary Data

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Entest Group, Inc. (FKA Entest Biomedical, Inc.)

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Entest Group, Inc. (the “Company”) as of August 31, 2018 and August 31, 2017 and the related statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the years in the two-year period ended August 31, 2018, and the related notes and schedules (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of August 31, 2018 and August 31, 2017, and the results of its operations and its cash flows for each of the years in the two-year period ended August 31, 2018 in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 4 to the financial statements, the Company has no revenues, has negative working capital at August 31, 2018, has incurred recurring losses and recurring negative cash flow from operating activities, and has an accumulated deficit which raises substantial doubt about its ability to continue as a going concern. Management’s plans concerning these matters are also described in Note 4. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ AMC Auditing

AMC Auditing
We have served as the Company’s auditor since 2012

Las Vegas, Nevada

November 19, 2018

ENTEST GROUP,INC.
(Formerly called ENTEST BIOMEDICAL, INC.)
Consolidated Balance Sheet


	As of August 31, 2018		August 31, 2017
ASSETS
Current Assets
Cash	267		86,559
Accrued Interest Receivable	1,040		908
Current Portion of Prepaid Expenses	8,000		58,652
Accrued Rent Receivable	0		0
Total Current Assets	9,307		146,119

OTHER ASSETS
Available for Sale Securities	0		190,050
Long Term Portion Prepaid Expenses	0		0
TOTAL ASSETS	9,307		336,169

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable	28,447		28,446
Notes Payable	19,601		13,501
Due to Other	8,000		8,000
Unearned Rental Income	17,000		0
Bank Overdraft	66		0
Accrued Expenses	181,904		269,398
Total Current Liabilities	255,018		319,345
TOTAL LIABILITIES	255,018		319,345

STOCKHOLDERS' EQUITY
Common Stock, authorized 500,000,000 shares as of August 31, 2017 and August 31, 2018; issued and outstanding 46,670,472(par value $0.0001) as of August 31, 2017 and 49,170,472 as of August 31, 2018	4,911		4,661
Preferred Stock ,par value $0.0001 5,000,000 shares authorized, Series AA Preferred Stock, 100,000 shares authorized, 667 shares, par value $0.0001, issued and outstanding at August 31, 2017 and as of August 31, 2018	0		0
Series B Preferred 4,400,000 shares authorized, 728,009 ( par value $0.0001) issued and outstanding as of August 31, 2018 and 728,009 issued and outstanding as of August 31, 2017	73		73
Series AAA Preferred, 300,000 shares authorized, $0.0001 par value 534 shares outstanding as of August 31, 2018 and as of August 31, 2017
NonVoting Convertible Preferred ($1 par value) 3,000,000 shares authorized as of August 31, 2018 and August 31, 2017 respectively, 1,001,533 and 1,026,533 issued and outstanding as of August 31, 2018 and August 31, 2017, respectively	1,001,533		1,026,533
Additional Paid in Capital	8,729,236		7,191,000
Contributed Capital	274,662		274,662
Accumulated Deficit	(10,256,126	)	(8,721,498	)
Accumulated Other Comprehensive Income	0		185,050
Total Stockholders' Equity Entest Biomedical, Inc.	(245,711	)	(39,519	)
Non Controlling Interest Zander Therapeutics Inc.	0		56,343
Stockholders Equity	(245,711	)	16,824
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY	9,307		336,169

The accompanying Notes are an integral part of these Financial Statements

ENTEST GROUP,INC.
(Formerly called ENTEST BIOMEDICAL, INC.)
Consolidated Statement of Operations


	Year Ended		Year Ended
	August 31, 2018		August 31 2017
TOTAL REVENUE	0		0
COSTS AND EXPENSES
Research and Development	949,584		124,770
Rent Costs	37,032		37,482
General and Administrative	224,263		225,804
Consultant's Expenses	310,020		263,823
Total Costs and Expenses	1,520,899		651,879

OPERATING LOSS	(1,520,899	)	(651,879	)

OTHER INCOME AND EXPENSE
Rental income	66,000		60,000
Interest Income	132		1,056
Gain on Write Off of Accounts Payable			76,697
Loss on Issuance of Stock Below Fair Value			(107,700	)
Gain on Deconsolidation of Zander	10,034
Equity in Losses of Zander	(61,428	)
Gain on Sale of Securities	30,000
Interest Expense	(1,323	)	(42,966	)
TOTAL OTHER INCOME AND EXPENSE	43,415		(12,913	)

LOSS BEFORE INCOME TAXES	(1,477,484	)	(664,792	)
Income Taxes	0		0

NET LOSS
NET LOSS from continuing	(1,477,484	)	(664,792	)
Operations
Less: (Net Income) Loss attributable to non controlling interest in Zander Therapeutics, Inc.			105,374
NET LOSS available to common shareholders	(1,477,484	)	(559,418	)

BASIC AND DILUTED EARNINGS (LOSS) PER SHARE FROM CONTINUING OPERATIONS	(0.030	)	(0.013	)
WEIGHTED AVERAGE NUMBER COMMON SHARES OUTSTANDING	48987813		42551431

The accompanying Notes are an integral part of these Financial Statements

ENTEST GROUP, INC.
(Formerly called ENTEST BIOMEDICAL, INC.)
Consolidated Statement of Comprehensive Income


		Year Ended August 31,			Year Ended August 31,
		2018			2017
Net Income (Loss)	$	(1477484	)	$	(664,792	)
Add:
Unrealized Gains on Securities		0			277,100
Less:
Unrealized Losses on Securities		0			(92,050	)
Comprehensive Income attributable to Non Controlling Interest		0			0
Total Other Comprehensive Income (Loss)		0			185,050
Comprehensive Income	$	(1477484	)	$	(479,742	)

The accompanying Notes are an integral part of these Financial Statements

	Common				Series AA Preferred				Series AAA Preferred				Series B Preferred				Non Voting Convertible Preferred
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares			Amount			Additional Paid-in Capital			Contributed Capital		Accumulated Other Comprehensive Income (Loss)			Accumulated Deficit during the Development Stage			Non Controlling interest In Subsidiary			Total
Balance August 31, 2016		40,170,472		4,011		667		0		533		0		28,009		3		0			0			6,148,054			274,162		0			(7,405,099	)		0			(978,869	)
Common Shares issued to Consultant January 27, 2017		100000		10																				4490														4,500
Common Shares issued for debt February 7, 2017		1000000		100																				9900														10,000
Common Shares issued for debt February 10, 2017		2,000,000		200																				19,800														20,000
Common Shares issued to Consultant March 10, 2017		100000		10																				4810														4,820
Series B Preferred shares issued to consultant March 10, 2017														500000		50																						50
Series B Preferred shares issued to consultant March 10, 2017														100000		10																						10
Series B Preferred shares issued to consultant March 31, 2017														100000		10																						10
Common Stock Issued for Cash April 3, 2017		750000		75																				14,925														15,000
Common Stock of Subsidiary sold for Cash April 10, 2017																								20,000														20,000
Common Shares issued to Consultant May 30, 2017		100000		10																				3,390														3,400
Shares issued for Accrued Expenses May 30, 2017																		83000			83000																	83,000
Shares issued for Debt May 30, 2017																		840681			840681																	840,681
Beneficial Conversion Features recognized May 30, 2017																								576,804														576,804
Amortization of Beneficial Conversion Feature May 30, 2017																																(576,804	)					(576,804	)
Preferred Shares of Subsidiary issued to consultants June 20, 2017																								100														100
Preferred Shares of Subsidiary issued to employees June 15, 2017																								150														150
Common Shares of Subsidiary issued for Cash July 10, 2017																								100,000														100,000
Common Shares of Subsidiary issued to Consultant 7/10/2017																								50														50
Preferred Shares of Subsidiary Issued to Consultants July 10, 2017																								10														10
Common Shares issued to Consultants July 24, 2017		2450000		245																				97,510														97,755
Shares issued for Accrued Expenses July 24, 2017																		102852			102852																	102,852
Beneficial Conversion Features recognized July 24, 2017																								74,801														74,801
Amortization of Beneficial Conversion Feature July 24, 2017																																(74,801	)					(74,801	)
Preferred Shares of Subsidiary Issued to Consultants August 21, 2017																								140														140
Restricted Stock Expense Recognized During the Year Ended August 31, 2017																								64,709														64,709
Accumulated Other Comprehensive Income Recognized During the Year Ended
August 31, 2017																													185050									185,050
Loss on Issuance below Fair Value																								107,700														107,700
Net Loss for the Year Ended August 31, 2017																																(664,792	)					(664,792	)
Non Controlling Interest in Subsidiary																								(56,343	)										56343			0
Increase in Contributed Capital Year Ended 8/31/2017																											500											500
Balance August 31, 2017		46,670,472		4,661		667		0		533		0		728,009		73		1,026,533			1,026,533			7,191,000			274,662		185050			(8,721,498	)		56343			16,824
Common Shares issued for NonVoting Convertible Preferred Shares September 8, 2017		2,500,000		250														(25,000	)		(25,000	)		24,750														0
Common Shares of Subsidiary issued for Cash October 30, 2017																								900,000														900,000
Common Shares of Subsidiary issued for Cash February 5, 2018																								200,000														200,000
Common Shares of Subsidiary issued for Cash February 27, 2018																								300,000														300,000
Declaration of property Dividend May 5, 2018																																(57,143	)					(57,143	)
Payment of Property Dividend June 11, 2018																								57,143														57,143
Elimination of Noncontrolling Interest upon deconsolidation June 11, 2018																								56,343											(56,343	)		0
Sale of Securities of Securities Available for Sale																													(185,050	)								(185,050	)
Net Loss For Year Ended August 31, 2018																																(1,477,484	)					(1,477,484	)
Balalnce August 31, 2018		49,170,472		4,911		667		0		533		0		728,009		73		1,001,533			1,001,533			8,729,236			274,662		0			(10,256,126	)		0			(245,711	)

The accompanying Notes are an integral part of these Financial Statements

ENTEST GROUP,INC.
(Formerly called ENTEST BIOMEDICAL, INC.)
Consolidated Statement of Cash Flow
(unaudited)


	Year Ended		Year Ended
	August 31, 2018		August 31, 2017
OPERATING ACTIVITIES
Net (loss)	(1,477,484	)	(664,792	)
Adjustments to reconcile net loss to net cash used by operating activities:
Increase(Decrease) in stock of subsidiary issued to employees			150
Increase(Decrease) in stock of subsidiary issued to consultants			300
Increase (Decrease) in Additional paid in Capital	0		64,709
Increase ( Decrease) in Issuance of Stock below Faie Value	0		107,700
increase (Decrease) in Preferred Stock issued for expenses	0		185,852
Increase (Decrease) in Preferred Stock issued to Consultants			70
(Increase) Decrease in Gain attributable to Deconsolidation	(10,034	)
(Increase) Decrease Cash Lost in Deconsolidation	(332,638	)
Equity in Losses of Zander	61,428
Increase (Decrease) Common Stock issued to Consultants			110,475
Changes in Operating Assets and Liabilities
(Increase) Decrease in Prepaid Expenses	(117,388	)	(50,652	)
Increase(Decrease) in Unearned Rent	17,000
Increase (Decrease) in Accounts Payable	454,494		(83,716	)
(Increase) Decrease in Accrued Rental Income Receivable	0		15,000
Increase (Decrease) in Accrued Expenses	(85,347	)	(157,566	)
(Increase )Decrease in Accrued Interest Receivable	(132	)	(909	)
(Increase) Decrease in Notes Receivable
Net Cash Provided (Used) in Operating Activities	(1,490,101	)	(473,380	)

Net Cash Provided ( Used) in Investing Activities:
Securities Purchased for Cash			(5,000	)
Gain on Sale of Securities received prior to deconsolidation	(2,357	)
Net Cash Provided ( Used) in Investing Activities:	(2,357	)	(5,000	)
FINANCING ACTIVITIES
Net Cash Provided (Used) in Financing Activities:
Common Stock issued for cash			15,000
Common Stock of Subsidiary issued for cash	1,400,000		120,000
Increase (Decrease) in Notes Payable	6,100		428,580
Increase(Decrease) Bank Overdraft	66
Increase (Decrease) in Contributed Capital			500
Net Cash Provided by Financing Activities	1,406,166		564,080

Net (Decrease) Increase in Cash	(86,292	)	85,700

Cash at Beginning of Period	86,559		859

Cash at End of Period	267		86,559

Supplemental Disclosure of Non CashInvesting and Financing Activities:
Common Stock Issued for Debt			30,000
Preferred Stock issued for Debt			840,681

The accompanying Notes are an integral part of these Financial Statements

The Entest Group,Inc.

(formerly known as Entest Biomedical, Inc.)

Notes to Consolidated Financial Statements

As of August 31, 2018

NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS

Entest Biomedical, Inc ( The “Company”) was incorporated in the State of Nevada on September 24, 2008 as JB Clothing Corporation. Until July 10, 2009, the Company’s principal business objective was the offering of active/leisure fashion design clothing.

On July 10, 2009 the Company abandoned its efforts in the field of active/leisure fashion design clothing when it acquired 100% of the share capital of Entest BioMedical, Inc., a California corporation, (“Entest CA”).

On June 18, 2015 the Company formed Zander Therapeutics, Inc. (“Zander”) , a Nevada corporation. As of August 31, 2018 Entest owns Zander 34.82% of Zander.

On February 12, 2018 the Company changed its name to The Entest Group, Inc.

As of August 31, 2018 the Company is a “Shell Company” as such term is defined in Rule 12(b)(2) promulgated under the Securities and Exchange Act of 1934 . This Rule defines as Shell Company as a company that has:

(1) No or nominal operations; and

(2) Either:

(i) No or nominal assets;

(ii) Assets consisting solely of cash and cash equivalents; or

(iii) Assets consisting of any amount of cash and cash equivalents and nominal other assets.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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 an August 31 fiscal year-end. The Company recognizes revenue from services and product sales when the following four revenue recognition criteria are met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the selling price is fixed or determinable, and collectability is reasonably assured.

B. PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Entest CA, the Company’s wholly owned subsidiary. These financial statement also include the accounts of Zander up to June 10, 2018. Significant inter-company transactions have been eliminated.

C. 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.

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

As of August 31, 2018 Property and Equipment consists of $0

F. 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.

The Company’s financial instruments as of August 31, 2018 consisted of $ 19,601 of Notes Payable and $8,000 due to TheraCyte, Inc.. The fair value of all of the Company’s financial instruments as of August 31, 2018 were valued according to the Level 3 input. The carrying amount of the financial instruments is equal to the fair value as determined by the Company.

The Company has determined that there are no Level 1 or Level 2 inputs for determining the fair value of the Company’s financial instruments. Fair value was determined by the Company utilizing its own assumptions and estimation. There were no transfers between levels for the period presented.

G. 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 August 31, 2018 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.

H. 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. All convertible debt has an anti-dilutive effect on the EPS, therefore Diluted earnings per share are the same as basic earnings per share.

NOTE 3. RECENT ACCOUNTING PRONOUNCEMENTS

In June 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-10, which eliminated certain financial reporting requirements of companies previously identified as "Development Stage Entities" (Topic 915). The amendments in this ASU simplify accounting guidance by removing all incremental financial reporting requirements for development stage entities. The amendments also reduce data maintenance and, for those entities subject to audit, audit costs by eliminating the requirement for development stage entities to present inception-to-date information in the statements of income, cash flows, and shareholder equity. Early application of each of the amendments is permitted for any annual reporting period or interim period for which the entity's financial statements have not yet been issued (public business entities) or made available for issuance (other entities). Upon adoption, entities will no longer present or disclose any information required by Topic 915. The Company has adopted this standard.

The following accounting standards updates were recently issued and have not yet been adopted by the Company. These standards are currently under review to determine their impact on the Company’s consolidated financial position, results of operations, or cash flows.

In May 2014, FASB issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. The revenue recognition standard affects all entities that have contracts with customers, except for certain items. The new revenue recognition standard eliminates the transaction-and industry-specific revenue recognition guidance under current GAAP and replaces it with a principle-based approach for determining revenue recognition. Public entities are required to adopt the revenue recognition standard for reporting periods beginning after December 15, 2016, and interim and annual reporting periods thereafter. Early adoption is not permitted for public entities. The Company has reviewed the applicable ASU and has not, at the current time, quantified the effects of this pronouncement, however it believes that there will be no material effect on the consolidated financial statements.

In June 2014, FASB issued Accounting Standards Update (ASU) No. 2014-12 Compensation — Stock Compensation (Topic 718), Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. A performance target in a share-based payment that affects vesting and that could be achieved after the requisite service period should be accounted for as a performance condition under Accounting Standards Codification (ASC) 718, Compensation — Stock Compensation. As a result, the target is not reflected in the estimation of the award's grant date fair value. Compensation cost would be recognized over the required service period, if it is probable that the performance condition will be achieved. The guidance is effective for annual periods beginning after 15 December 2015 and interim periods within those annual periods. Early adoption is permitted. The Company has reviewed the applicable ASU and has not, at the current time, quantified the effects of this pronouncement, however it believes that there will be no material effect on the consolidated financial statements.

In August2014, FASB issued Accounting Standards Update (ASU) No. 2014-15 Preparation of Financial Statements – Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern. Under generally accepted accounting principles (GAAP), continuation of a reporting entity as a going concern is presumed as the basis for preparing financial statements unless and until the entity's liquidation becomes imminent. Preparation of financial statements under this presumption is commonly referred to as the going concern basis of accounting. If and when an entity's liquidation becomes imminent, financial statements should be prepared under the liquidation basis of accounting in accordance with Subtopic 205-30, Presentation of Financial Statements—Liquidation Basis of Accounting. Even when an entity's liquidation is not imminent, there may be conditions or events that raise substantial doubt about the entity's ability to continue as a going concern. In those situations, financial statements should continue to be prepared under the going concern basis of accounting, but the amendments in this Update should be followed to determine whether to disclose information about the relevant conditions and events. The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company will evaluate the going concern considerations in this ASU, however, at the current period, management does not believe that it has met the conditions which would subject these financial statements for additional disclosure.

NOTE 4. 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 $10,256,126 during the period from August 22, 2008 (inception) through August 31, 2018. 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 intends to seek business opportunities to review and analyze for purposes of effecting a merger, acquisition or other business combination with an operating company business.

NOTE 5. NOTES PAYABLE

As of August 31, 2018

Notes Payable:

David Koos (See Note 6)	$	2,600
Dunhill Ross Partners, Inc.	$	850
Blackbriar Partners (See Note 6)		11,600
Regen Biopharma, Inc (See Note 6)		4,551
Total	$	19,601

$1,000 lent to the Company by Blackbriar Partners is due and payable February 17, 2018 and bears simple interest at a rate of 10% per annum

$7,000 lent to the Company by Blackbriar Partners is due and payable February 28, 2018 and bears simple interest at a rate of 10% per annum.

$3,000 lent to the Company by Blackbriar Partners is due and payable May 4, 2019 and bears simple interest at a rate of 10% per annum.

$600 lent to the Company by Blackbriar Partners is due and payable August 20, 2019 and bears simple interest at a rate of 10% per annum.

Blackbriar Partners is controlled by David R. Koos , the Company’s sole officer and director.

As of August 31, 2018 the Company remains indebted to David R. Koos , the Company’s sole officer and director, in the principal amount of $2,600 due and payable in whole or in part at the demand of David Koos and bearing simple interest at a rate of 15% per annum.

Amounts due to Regen Biopharma Inc. as of August 31, 2018 are due and payable at the demand of the holder and bear simple interest at a rate of 10% per annum. David R. Koos , the Company’s sole officer, serves as Chairman and Chief Executive officer of Regen Biopharma, Inc.

NOTE 6. RELATED PARTY TRANSACTIONS

As of August 31, 2018 the Company remains indebted to Blackbriar Partners in the principal amount of $11,600 of which $1,000 is due and payable February 17, 2018 and bears simple interest at a rate of 10%per annum and of which $7,000 is due and payable February 28, 2018 and bears simple interest at a rate of 10% per annum , of which$3,000 is due and payable May 4, 2019 and bears simple interest at a rate of 10% per annum and of which $600 is due and payable August 20, 2019 and bears simple interest at a rate of 10% per annum.

Blackbriar Partners is controlled by David R. Koos , the Company’s sole officer and director.

As of August 31, 2018 the Company remains indebted to Regen Biopharma, Inc. in the principal amount of $4,551 due and payable in whole or in part at the demand of the holder and bearing simple interest at a rate of 10% per annum. David R. Koos , the Company’s sole officer, serves as Chairman and Chief Executive officer of Regen Biopharma, Inc.

On October 1, 2014 Regen Biopharma Inc. entered into an agreement to sublease approximately 2,320 square feet of office space from the Company. Entest Biomedical Inc. is under common control with Regen Biopharma, Inc. as the Chairman and CEO of the Company also serves as the Chairman and CEO of Regen Biopharma, Inc. The sublease is on a month to month basis and rent payable to the Company by Regen Biopharma Inc is equal to the rent payable to the lessor by the Company and is to be paid in at such time specified in accordance with the original lease agreement between the Company and the lessor. On January 20, 2015 the sublease was amended retroactive to January 1, 2015 as follows:

The rent payable to Entest BioMedical, Inc. by the subtenant is equal to Five Thousand Dollars per month ($5,000) and is to be paid in at such time specified in accordance with the original lease agreement between the Entest BioMedical, Inc. (“Entest”) and the lessor. All charges for utilities connected with premises which are to be paid under the master lease shall be paid by Regen Biopharma, Inc. for the term of this sublease to the extent that such charges exceed the difference between the rent payable to the lessor by Entest under the master lease and the rent payable to Entest by Regen Biopharma, Inc.

On February 28, 2016, the Company purchased from a third party 3,500,000 shares of the Series A Preferred stock of Regen Biopharma, Inc for consideration consisting of $5,000 cash and 500,000 shares of the Company’s Series B Preferred Stock. On July 3, 2018 the Company sold the aforementioned 3,500,000 shares to Zander for consideration consisting of $35,000. David R. Koos, who serves as Chairman and Chief Executive Officer of Zander also serves as Chairman and Chief Executive Officer of Entest. Zander is under common control with Entest.

On July 3, 2018 Zander entered into a sublease agreement with Entest whereby Zander would sublet office space located at 4700 Spring Street, Suite 304, La Mesa, California 91942 from Entest on a month to month basis for $6,000 per month beginning July 5, 2018.

David R. Koos, who serves as Chairman and Chief Executive Officer of Zander also serves as Chairman and Chief Executive Officer of Entest. Zander is under common control with Entest.

NOTE 7. INCOME TAXES

As of August 31, 2018
Deferred tax assets:
Net operating tax carry forwards	$	2,156,652
Other		-0-

Gross deferred tax assets		2,156,652
Valuation allowance		(2,156,652	)
Net deferred tax assets	$	-0-

As of August 31, 2018 the Company has a Deferred Tax Asset of $2,156,652 completely attributable to net operating loss carry forwards of approximately $ 10,269,773(which expire 20 years from the date the loss was incurred) consisting of:

(a) $ 13,647 of Net Operating Loss carry forwards acquired in the reverse acquisition of Entest BioMedical, Inc., a California corporation, and

(b) $ 10,256,126 of Net Operating Loss carry forwards attributable to Entest BioMedical, Inc.

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. A valuation allowance is recorded when it is “more likely-than-not” that a deferred tax asset will not be realized. In addition, the reverse acquisition in which Entest BioMedical, Inc. was involved in 2009 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. As a result, the Company has recorded a valuation allowance reducing all deferred tax assets to $ -0-.

Income tax is calculated at the 21% Federal Corporate Rate.

NOTE 8. ACQUISITION OF ENTEST CA

On July 10, 2009 the Company acquired 100% of Entest CA, a California corporation and wholly owned subsidiary of the Company, from BMSN for consideration consisting of (a) the issuance to BMSN of 10,000,000 newly issued common shares of Entest and (b) the return by Mr. Rick Plote of 10,000,000 shares of Entest’s common stock previously issued to him by Entest for cancellation.

NOTE 9. ACQUISITION OF THE ASSETS OF PET POINTERS, INC.

On January 4, 2011 Entest CA acquired from Pet Pointers, Inc., a California corporation doing business as McDonald Animal Hospital (“Seller”), and Dr. Gregory McDonald DVM (“McDonald”) all the goodwill from McDonald and assets of Seller except cash and accounts receivables used in connection with the operation of a veterinary medical clinic located at 225 S. Milpas Street, Santa Barbara, CA 93103 (the "Business").

Consideration for the acquisition consisted of:

I. $70,000 in cash

II. $210,000 of the Company’s common shares valued at the closing price per share as of January 4, 2011

III. Payment of no more than $78,000 to a creditor of the Seller to be paid in monthly installments of $1,500 per month

IV. Payment of no more than $25,000 to additional creditors of the Seller to be paid in monthly installments of $825 per month

V. Payment of $50,000 to McDonald on the first business day of the fourth month following the closing of the acquisition (“Closing”).

NOTE 10. DISPOSITION OF THE ASSETS OF PET POINTERS, INC.

On November 28, 2012 the “Company executed an agreement (“Agreement”) with Gregory McDonald ("McDonald"), Pet Pointers, Inc. ("Pet Pointer") whereby Mc Donald and Pet Pointer would acquire from the Company all assets (with the exception of cash and accounts receivable) utilized by the Company in the operation of the McDonald Animal Hospital, a full service veterinary clinic owned and operated by the Company and located in Santa Barbara, California (“McDonald Asset Sale”).

On October 10, 2012 a Complaint (“Complaint”) was filed in the Superior Court of the State of California against the Company and David Koos by McDonald, a former employee of the Company, alleging breach of contract and breach of the covenant of good faith and dealing in connection with the assumption of lease obligations by the Company in connection with the acquisition of the assets of Pet Pointers, Inc breach of contract and breach of the covenant of good faith and dealing in connection with an employment agreement enters into with McDonald inc connection with the Acquisition, breach of contract in connection with the Acquisition purchase agreement, breach of the covenant of good faith and dealing in connection with the Acquisition purchase agreement, implied indemnity in connection to amounts owed by McDonald to Anthony and Judi Marinelli, the Internal Revenue Service, and the California Franchise Tax Board, intentional misrepresentation, negligent misrepresentation , failure to pay wages and violations of Sections 2802, 203, and 2806 of the California Labor Code. The Complaint sought judgment for nominal damages, actual damages, compensatory damages, lost wages, compensation, expenses wage benefits and penalties pursuant to California Labor Code Sections 203 et al, 2802 and 2806, indemnification, accrued interest, punitive damages, costs of suit and attorney’s fees.

As consideration to the Company for the assets acquired, McDonald and Pet Pointers provided to the Company a General release whereby McDonald and Pet Pointer waive, release and discharge the Company and their respective assignees, officers, directors, shareholders, boards, owners, employees, attorneys, agents, trustors, trustees, beneficiaries, heirs, successors, and representatives from all known and unknown claims, demands, causes of action, attorney's fees, costs, or expenses including:

(1) All claims relating to the Complaint.

(2) Those owed by McDonald to Anthony and Judi Marinelli which the Company became obligated to pay on McDonald’s behalf pursuant to the asset purchase agreement entered into between the Company and Gregory McDonald and Pet Pointers, Inc on January 4, 2011.

(3) Those amounts owed by McDonald to the Internal Revenue Service which the Company became obligated to pay on McDonald’s behalf pursuant to the asset purchase agreement entered into between the Company and Gregory McDonald and Pet Pointers, Inc on January 4, 2011.

(4) Those amounts owed by McDonald to the California Franchise Tax Board which the Company became obligated to pay on McDonald’s behalf pursuant to the asset purchase agreement entered into between the Company and Gregory McDonald and Pet Pointers, Inc on January 4, 2011.

Assets disposed of pursuant to the Agreement include approximately $4,840 of Property Plant and Equipment net of accumulated depreciation as well as all inventory held at the McDonald Animal Hospital.

Assets disposed of pursuant to the Agreement also include

(i) Essentially all intellectual property, including computer software, utilized in connection with the operation of the McDonald Animal Hospital

(ii) All telephone numbers, fax numbers, service marks, trademarks, trade names, fictitious business names, websites, business email addresses, vendor lists, promotional materials, vendor records and any and all business records including, but not limited to, such items stored in computer memories, microfiche, paper record or by any other means relevant to the operation of the McDonald Animal Hospital.

(iii) All customer lists, customer contacts, and any and all customer records that are related to the McDonald Animal Hospital.

As a result of the agreement, the Company recorded a non-cash pre-tax charge for the impairment of goodwill recorded in connection with the acquisition of the McDonald Animal Hospital of approximately $405,000 for the quarter ended November 30, 2012.

Pursuant to the Agreement, the Company is obligated to make payment of $13,000 within five days of the Closing of the Agreement as such term is defined in the Agreement.

Pursuant to the Agreement, the Company agrees to waive, release and discharge McDonald and Pet Pointer from all known and unknown claims, demands, causes of action, attorney's fees, costs, or expenses.

NOTE 11. DECONSOLIDATION OF ZANDER THERAPEUTICS, INC.

(a) Holders of record of the outstanding common shares of the Company as of the record date, which is May 30, 2018.

(b) Holders of record of the shares of any outstanding series of the preferred shares of the Company as of the record date, which is May 30, 2018.

As a result of the payment of the abovementioned property dividend, the Company’s percentage of ownership of Zander fell below 50% resulting in the deconsolidation of Zander as of the Distribution Date. As of the Distribution Date all assets and liabilities attributable to Zander were derecognized by the Company. The Company recognized a $10,034gain as a result of the deconsolidation. The Property dividend may be deemed to have occurred with a related party as the recipients were shareholders of Entest, including the Chairman and Chief Executive Officer of Entest and Regen Biopharma, Inc. which is a company under common control with Entest.

5 million shares of Zander Series M Preferred Stock received by the Company on June 15, 2017 in consideration of services rendered has been valued by the Company as of the deconsolidation date utilizing the following inputs:

Fair Value of Intellectual Property	1,030
prepaid Expenses	168,000
Accounts Payable	454,493
Due from Entest	7,357
Accrued Expenses	2,148
Enterprise Value	633,028
Less: Total Debt	(463,998	)
Enterprise Value available to Shareholders	169,030
Per Share	0.012286

The Chairman and Chief Executive Officer of the Company and Zander is David R. Koos. Zander may be considered a related party of the Company.

SUMMARY INFORMATION FOR ZANDER THERAPEUTICS ,INC. FOR THE FISCAL YEAR ENDED AUGUST 31, 2018

Revenue	0
Operating Loss	(2,801,376	)
Net Loss	(2,780,288	)
Portion of Net Loss attributable to Entest	(968,188	)

NOTE 12. COMMITMENTS AND CONTINGENCIES

ENTEST GROUP, INC. 10-K