BIOXYTRAN, INC.
FORM 10-Q  

TABLE OF CONTENTS

Except as otherwise required by the context, all references in this report to “we”, “us”, “our” or “Company” refer to the consolidated operations of BIOXYTRAN, Inc.

PART I –- FINANCIAL INFORMATION

ITEMItem 1. INTERIM FINANCIAL STATEMENTSUnaudited Condensed Consolidated Financial Statements: BIOXYTRAN, Inc., June 30, 2020

U.S. RARE EARTH MINERALS,BIOXYTRAN, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

See accompanying notes to the unaudited financial statements.

U.S. RARE EARTH MINERALS, INC

STATEMENTSAS OF OPERATIONSJUNE 30, 2020 AND DECEMBER 31, 2019

(UNAUDITED)

See the accompanying notes to thethese unaudited condensed consolidated financial statements.statements

U.S. RARE EARTH MINERALS, INCBIOXYTRAN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2020 AND 2019

(UNAUDITED)

See the accompanying notes to these unaudited condensed consolidated financial statements

BIOXYTRAN, INC.

CONDENSED CONSOLIDATED CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE SIX MONTHS ENDED JUNE 30, 2020 AND 2019

(UNAUDITED)

See the accompanying notes to these unaudited condensed consolidated financial statements

BIOXYTRAN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2020 AND 2019

(UNAUDITED)

See the accompanying notes to thethese unaudited condensed consolidated financial statements

US. RARE EARTH MINERALS, INC.

NOTES TO FINANCIAL STATEMENTS

(UNAUDITED)

Note 1. Basis of Presentation and Summary of Significant Accounting PoliciesBIOXYTRAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2020 AND 2019

(UNAUDITED)

NOTE 1 – BACKGROUND AND ORGANIZATION

Business Operations

Bioxytran, Inc. (the “Company”) is an early-stage pharmaceutical company focused on the development, manufacture and commercialization of therapeutic drugs designed to address hypoxia in humans, which is a lack of oxygen to tissues, in a safe and efficient manner. If it is not addressed, lack of oxygen to tissues, or hypoxia, results in necrosis, which is the death of cells comprising body tissue. Necrosis cannot be reversed. Our lead drug candidate, code named BXT-25, is an oxygen-carrying small molecule consisting of bovine hemoglobin stabilized with a co-polymer with intended applications to include treatment of hypoxic conditions in the brain resulting from stroke, and hypoxic conditions in wounds to prevent necrosis and to promote healing. The Company’s initial focus is the treatment of hypoxic conditions in the brain resulting from stroke, and hypoxic conditions in wounds to prevent necrosis and to promote healing. Our novel approach is intended to result in the creation of safe drug alternatives to existing therapies for effectively addressing hypoxic conditions in humans. Our drug development efforts are guided by specialists in co-polymer chemistry and other disciplines, and we intend to supplement our efforts with input from a scientific and medical advisory board whose members are leading physicians.

Organization

Bioxytan, Inc. was organized on October 5, 2017 as a Delaware corporation, with a taxing structure for U.S. federal and state income tax as a C-Corporation with 95,000,000 authorized common shares with a par value of $0.0001, and 5,000,000 preferred shares with a par value of $0.0001. On September 21, 2019, the Company went under a reorganization in form of a reverse merger and is currently registered as a Nevada corporation with a taxing structure for U.S. federal and state income tax as a C-Corporation with 300,000,000 authorized common shares with a par value of $0.001, and 50,000,000 preferred shares with a par value of $0.001

Basis of Presentation

The summary of significant accounting policies presented below is designed to assist in understanding the Company’s consolidated financial statements. Such financial statements and accompanying notes are the representations of the Company’s management, who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America (“U.S. GAAP”) in all material respects, and have been consistently applied in preparing the accompanying financial statements. The Company has not earned any revenue from operations since inception. The Company chose December 31^st as its fiscal year end.

The accompanying unaudited financial statements have been prepared on substantiallyby the same basis asCompany pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted in accordance with such rules and regulations. The information furnished in the interim financial statements includes normal recurring adjustments and reflects all adjustments, which, in the opinion of management, are necessary for a fair presentation of such financial statements. Although management believes the disclosures and information presented are adequate to make the information not misleading, it is suggested that these interim financial statements be read in conjunction with the Company’s audited financial statements and notes thereto included in the Annual Report onits Form 10-K for the year ended December 31, 2016. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in2019. Operating results for the United States have been condensed or omitted pursuant to the Securities and Exchange Commission (SEC) rules and regulations regarding interim financial statements. All amounts included herein related to the financial statements as of September 30, 2017 and the ninesix months ended SeptemberJune 30, 2017 and 2016 are unaudited and should be read in conjunction with the audited financial statements and the notes there to included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.

In the opinion of management, the accompanying financial statements include all necessary adjustments for the fair presentation of the Company’s financial position, results of operations and cash flows. The results of operations for the interim periods presented2020 are not necessarily indicative of the operating results to be expected for any subsequent interim period or for the full fiscal year ending December 31, 2017.2020.

Basic and Diluted Earnings per Share

U.S. Rare Earth Minerals, Inc. was incorporated inPursuant to the stateauthoritative guidance, basic net income and net loss per share are computed by dividing the net income and net loss by the weighted average number of Nevada on September 9, 2008.common shares outstanding. Diluted net income and net loss per share is the same as basic net income and net loss per share when their inclusion would have an anti-dilutive effect due to our continuing net losses.

As used in these Notes to the Financial Statements, the terms the "Company", "we", "us", "our" and similar terms refer to U. S. Rare Earth Minerals, Inc.

Going ConcernPrinciples of Consolidation

The accompanying consolidated financial statements include the accounts of Bioxytran, Inc. a Nevada Corporation and its wholly owned subsidiary, Bioxytran, Inc. of Delaware (collectively, the “Company”). All intercompany accounts have been prepared in conformity with generally accepted accounting principles, which contemplate continuationeliminated upon consolidation.

NOTE 2 – GOING CONCERN AND MANAGEMENT’S LIQUIDITY PLANS

As of June 30, 2020, the Company ashad cash of $4,246 and a going concern. To date,negative working capital of $1,899,697. As of June 30, 2020, the Company has not yet generated minimal revenueany revenues, and has a working capital deficiencyincurred cumulative net losses of $356,485 as of September 30, 2017.$3,710,398. These factors, among others,conditions raise substantial doubt about the Company’s ability to continue as a going concern. These

The Company is aware that its current cash on hand will not be sufficient to fund its projected operating requirements through the month of September 2020, and is pursuing alternative opportunities to funding.

The Company intends to raise additional capital through private placements of debt and equity securities, but there can be no assurance that these funds will be available on terms acceptable to the Company, or will be sufficient to enable the Company to fully complete its development activities or sustain operations. If the Company is unable to raise sufficient additional funds, it will have to develop and implement a plan to further extend payables, reduce overhead, or scale back its current business plan until sufficient additional capital is raised to support further operations. There can be no assurance that such a plan will be successful.

The Company is supplementing its disclosure previously disclosed in the Company's annual report on Form 10-K for the year ended December 31, 2019 and its subsequent quarterly reports on Form 10-Q with the following disclosure: Potential Impact of the COVID-19 Pandemic in December 2019, a strain of novel coronavirus (now commonly known as COVID-19) was reported to have surfaced in Wuhan, China. COVID-19 has since spread rapidly throughout many countries, and, on March 12, 2020, the World Health Organization declared COVID-19 to be a pandemic. In an effort to contain and mitigate the spread of COVID-19, many countries, including the United States, Canada and China, have imposed unprecedented restrictions on travel, and there have been business closures and a substantial reduction in economic activity in countries that have had significant outbreaks of COVID-19. COVID-19 may have a future material impact on our results of operation with respect to product development and clinical trials. However, significant uncertainty remains as to the potential impact of the COVID-19 pandemic on our operations, and on the global economy as a whole. It is currently not possible to predict how long the pandemic will last or the time that it will take for economic activity to return to prior levels. We do not yet know the full extent of any impact on our business or our operations, however, we will continue to monitor the COVID-19 situation closely, and we intend to follow health and safety guidelines as they evolve.

Accordingly, the accompanying consolidated financial statements have been prepared in conformity with U.S. GAAP, which contemplates continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the consolidated financial statements do not necessarily purport to represent realizable or settlement values. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilitiesadjustment that might result from the outcome of this uncertainty. We will need to raise funds or implement our business plan to continue operations.

NOTE 3 – ACCOUNTS PAYABLES AND ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

In orderOn June 30, 2020, there was $183,176 in accounts payable to continue as a going concern,related parties in the Company will need, among other things, additional capital resources. Management’s plan isform of payroll and accrued expenses. On December 31, 2019 there was $96,000 in accounts payable to obtain such resources for the Company by obtaining capital sufficient to meet its minimal operating expenses by seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.related parties.

The abilityfollowing table represents the major components of accounts payables and accrued expenses and other current liabilities at June 30, 2020 and December 31, 2019:

NOTE 4 – CONVERTIBLE NOTES PAYABLE

As long as the Company to continue as a going concern is dependent upon among other things; its ability to successfully accomplish the plans described in the preceding paragraph and eventually begin operations in accordance with its business plan. The accompanying financial statements do not include any adjustments that might be necessary iffollowing convertible notes remain outstanding, the Company is unable to continuerestricted from incurring any indebtedness or liens, except as a going concern.permitted (as defined), and cannot amend its charter in any matter that materially effects rights of noteholders, repay or repurchase more than de minimis number of shares of common stock other than conversion or warrant shares, repay or repurchase all or any portion of any indebtedness, or pay cash dividends.

Recent Accounting PronouncementsAuctus Note #1

From timeOn October 24, 2019 (the “Date of Issuance”) the Company issued a convertible promissory note (the “Auctus Note #1”) with a face value of $250,000, maturing on October 23, 2020, and a stated interest of 8% to time new accounting pronouncements are issued by the Financial Accounting Standards Board or other standard setting bodies that may have an impact on the Company’s accounting and reporting.a third-party investor. The Company believes that such recently issued accounting pronouncements and other authoritative guidance for which the effective dateAuctus Note #1 is in the future will not have an impact on its accounting or reporting or that such impact will not be material to its financial position, results of operations and cash flows when implemented.

Note 2. Capital Stock

The Company is authorized to issue 50,000,000 shares of its $0.001 par value preferred stock and 300,000,000 shares of its $0.001 par value common shares.

The preferred stock ranks senior to theconvertible into common stock of the Company, in each case with respect to dividend distribution and distributions of assets upon liquidation, dissolution or winding up of the Company whether voluntary or involuntary.

These shares are issued as Class “A” 6% Cumulative, Convertible Voting Preferred Stock. Each share is valued at $1.00par value $.001 per share for purposes of calculating interest and for conversion purposes and accrues interest(the “Common Stock”) at 6% per annumany time after the earlier of: (i) 180 days from the date of issue. Interestthe Auctus Note #1, or (ii) upon effective date of a registration statement. The conversion price of the Auctus Note #1 is cumulativeequal to the lesser of : (i) the lowest trading price for the twenty-day period prior to the date of the Auctus Note #1 or (ii) 65% of the average of the three lowest trading prices during the twenty days prior to a conversion notice on the applicable trading market or the closing bid price on the applicable trading market. The Auctus Note #1 was funded on October 29, 2019, when the Company received proceeds of $222,205, after disbursements for the lender’s transaction costs, fees and expenses which in aggregate resulted in a total discount of $27,795 to be amortized to interest expense over the life of the Auctus Note #1.

Additionally, the variable conversion rate component requires that the Auctus Note #1 be valued at its stock redemption value (i.e., “if-converted” value) pursuant to ASC 480, Distinguishing Liabilities from Equity, with the excess over the undiscounted face value being deemed a premium to be added to the principal balance and amortized to additional paid-in capital over the life of the Auctus Note #1. As such, the Company recorded a premium of $343,796 as a reduction to additional paid-in capital based on a discounted “if-converted” rate of $0.21 per share (65% of the average of the three lowest trading prices during the 20 days preceding the note’s issuance), which computed to 1,211,828 shares of ‘if-converted’ common stock with a redemption value of $593,796 due to $0.49 per share fair market value of the Company’s stock on the Auctus Note #1’s date of issuance. Debt discount amortization is recorded as interest expense, while debt premium amortization is recorded as an increase to additional paid-in capital.

Along with the Auctus Note #1, on the Date of Issuance the Company issued 208,333 Common Stock Purchase Warrants (the “Warrants”), exercisable immediately at a fixed exercise price of $0.60 with an expiration date of October 23, 2023.  The Company has determined that the Warrants are exempt from derivative accounting and were valued at $101,937 on the Date of Inception using the Black Scholes Options Pricing Model.  Assumptions used for the Black Scholes Options Pricing Model include (1) stock price of $0.49 per share, (2) exercise price of $0.60 per share, (3) term of 5 years, (4) expected volatility of 251% and (5) risk free interest rate of 2.51%.  The note proceeds of $250,000 were then allocated between the fair value of the Auctus Note #1 ($250,000) and the Warrants ($101,937), resulting in a debt discount of $72,412. As the warrants were exercisable immediately, this debt discount was amortized in its entirety to interest expense on the Date of Issuance. Upon cashless conversion on March 12, 2020 an additional 166,667 warrants were issued for a maximummarket value of two years$66,363.

The Auctus Note #1 was paid off on October 24, 2019, and compounds annually. Interest accrued thereon shall become due and payable and shall be paid bythe warrants were exercised on March 12,2020 

Auctus Note #2

On February 25, 2019, the Company entered into a $250,000 Senior Secured Promissory Note (“the Auctus Note #2”), dated February 25, 2019 at an interest rate of 8% per annum, maturing on or prior to thirty (30) days after the second anniversaryFebruary 24, 2020 (the “Maturity Date”). Issuance fees totaling $27,750 were recorded as a debt discount, resulting in net proceeds of issue date and each consecutive two year period thereafter.

As$222,250. The Auctus Note #2 is convertible into common stock of September 30, 2017 and December 31, 2016, a total of $110,330 and $86,610 has not been declared by the Company, respectively. 

Eachpar value $.001 per share is convertible at any time from date of issue into five (5) shares of Company common stock. Each share shall be entitled to five (5) votes that may be cast by the holder at any shareholder meeting or event requiring a shareholder vote. All interest accrued to date of conversion will be paid by Company to holder within sixty (60) days of date of conversion by holder. These shares are callable by the Company(the “Common Stock”) at any time after three (3) yearsthe earlier of: (i) 180 days from the date of the Auctus Note #2 or (ii) upon effective date of a new registration statement. The conversion price of the Auctus Note #2 is equal to the lesser of : (i) the lowest trading price for the twenty-day period prior to the date of the Auctus Note #2 or (ii) 65% of the average of the three lowest trading prices during the twenty days prior to a conversion notice on the applicable trading market or the closing bid price on the applicable trading market. The Company may prepay the Auctus Note #2 at any time at a rate of 120% of outstanding principal and interest during the first 90 days it is outstanding and 130% of outstanding principal and interest for the next 90 days thereafter. Thereafter the prepayment amount increases 5% for each thirty-day period until 270 days from the issue date at $1.00 plus accrued but unpaidwhich time it is fixed at 150% of the outstanding principal and interest unless previously converted.on the Auctus Note #2.

Additionally, the variable conversion rate component requires that the Auctus Note #2 be valued at its stock redemption value (i.e., “if-converted” value) pursuant to ASC 480, Distinguishing Liabilities from Equity, with the excess over the undiscounted face value being deemed a premium to be added to the principal balance and accreted to additional paid-in capital over the life of the Auctus Note #2. As such, the Company recorded a premium of $82,500 as a reduction to additional paid-in capital based on a discounted “if-converted” rate of $0.20 per share (lowest trading price during the 20 days preceding the note’s issuance), which computed to 1,250,000 shares of ‘if-converted’ common stock with a redemption value of $332,500 due to $0.266 per share fair market value of the Company’s stock on the Auctus Note #2’s date of issuance. Debt discount amortization is recorded as interest expense, while debt premium accretion is recorded as an increase to additional paid-in capital. For the six months ending at June 30, 2020, the Company amortized $4,647 debt discount to operations as interest expense, and accreted $24,121 of premium to additional paid-in capital.

Along with the the Auctus Note #2, on the Date of Issuance the Company issued 208,333 Common Stock Purchase Warrants (the “Warrants”), exercisable immediately at a fixed exercise price of $0.60 with an expiration date of February 24, 2024.  The Company has determined that the Warrants are exempt from derivative accounting and were valued at $55,417 on the Date of Inception using the Black Scholes Options Pricing Model.  Assumptions used for the Black Scholes Options Pricing Model include (1) stock price of $0.27 per share, (2) exercise price of $0.60 per share, (3) term of 5 years, (4) expected volatility of 323% and (5) risk free interest rate of 2.56%.  The Auctus Note #2 proceeds of $250,000 were then allocated between the fair value of the Auctus Note #2 ($250,000) and the Warrants ($55,417), resulting in a debt discount of $45,361. As the warrants are exercisable immediately, this debt discount was amortized in its entirety to interest expense on the Date of Issuance. Upon cashless conversion on March 12, 2020 an additional 166,667 warrants were issued for a market value of $66,364.

The Auctus Note #2 was paid off on February 20, 2020, and the warrants were exercised on March 12,2020.

Current notes convertible

In the period January 1 to March 18, 2020 the Company entered into five contracts totaling $356,100 Senior Secured Promissory Note (“the Notes”), at an interest rate of 4-8% per annum, maturing in one year from issuance (the “Maturity Date”). Issuance fees totaling $50,100 were recorded as a debt discount, resulting in net proceeds of $306,000. The Notes are convertible into common stock of the Company, par value $.001 per share (the “Common Stock”) at any time after the earlier of: (i) 180 days from the date of the Notes or (ii) upon effective date of a new registration statement. The conversion price of the Notes is equal to the lesser of : (i) the lowest trading price for the twenty-day period prior to the date of the Notes or (ii) 65% of the average of the three lowest trading prices during the twenty days prior to a conversion notice on the applicable trading market or the closing bid price on the applicable trading market. The Company may prepay the Notes at any time at a rate of 120% of outstanding principal and interest during the first 90 days it is outstanding and 130% of outstanding principal and interest for the next 90 days thereafter. Thereafter the prepayment amount increases 5% for each thirty-day period until 270 days from the issue date at which time it is fixed at 150% of the outstanding principal and interest on the Notes.

The Company also issued five-year warrants with cashless exercise provisions to purchase shares of Common Stock of the Company at an exercise price of $2.00 per share with cashless exercise provisions. For the six months ending at June 30, 2020, the Company issued 72,000 warrants, resulting in an amortized debt discount of $12,711. There were no warrants issued in the three-month period ending at June 30, 2020.

Default on notes convertible

On April 16, 2020, SEC ordered, pursuant to Section 12(k) of the Securities Exchange Act of 1934, that trading of BIXT is suspended for the period April 16 through April 29, 2020.

As a result of Septemberthe SEC ordered suspension the Company defaulted on outstanding Convertible Notes; resulting in an increase of the interest to 21% and the principal to increase to 168% of principal loan amount. The convertible debt increased by $666,456 to $1,604,856 while the interest accrual increased to approximately $28,563/month, amounting to $87,950 at date of June 30, 20172020. At the default date, April 16, 2020, remaining debt discount of $76,265 was amortized to interest expense and the remaining debt premium of $856,560 was accredited to additional paid-in capital.

A summary of the outstanding notes at June 30, 2020, are as follows:

Convertible notes payable consists of the following at June 30, 2020 and December 31, 2016, there were 440,5002019:

NOTE 5 – STOCKHOLDERS’ EQUITY

At a Board of Director’s Meeting on July 30, 2019, the Company authorized a reverse stock split that resulted in a reduction of the number of outstanding and 440,500issued shares of Class “A” 6% Cumulative, Convertible Voting Preferred Stockboth common and preferred stock so that after the split became effective on August 13, 2019, the shares of both common and preferred stock were reduced to 1 share for each 30 shares currently issued and outstanding, respectively.outstanding. The effect on the Balance Sheet is a transfer of value from stock value at par to Additional Paid-in Capital. As a result of the one (1) for thirty (30) reverse stock split, the Company will continue to be authorized to issue 300,000,000 shares of Common Stock, and 50,000,000 shares of Preferred Stock. The reverse split has been retroactively applied to all periods presented.

During 2016,Preferred stock

As of June 30, 2020 and December 31, 2019, no preferred shares have been designated or issued.

Common stock

On May 30, 2019, 25,000 shares of common stock were issued as a result of conversion of accrued interest on the Auctus Note #1 at various times, an aggregate$0.20 per share for a total of 18,850,000$5,000.

On January 3, 2020, 100,000 shares of common stock were issued as a result of conversion of accrued interest and principal on the Auctus Note #2 for a total of $12,000.

On February 18, 2020, 250,000 shares of common stock were issued as a result of conversion of accrued interest and principal on the Auctus Note #2 for a total of $22,132.

On March 12, 2020, 750,000 of common stock were issued in exchange for services416,666 warrants with cashless exercise, originating from Auctus Notes #1 and consideration. 2,500,000#2.

For the 6-months ending June 30, 2020, 456,000 shares were sold to investors at $0.02awarded with an average cost per share; 800,000share of $0.01, under the 2010 Stock Plan for a total value of $159,297. For details, see Shares Awarded and Issued under Note 6.

As of June 30, 2020, the Company has 88,231,673 shares of common stock issued and outstanding. At December 31, 2019 there were 86,475,673 shares of common stock issued and outstanding.

Common Stock Warrants

During the six months ending June 30, 2020 the Company awarded 405,334 warrants, valued at $0.05 per share were issued for settlement$145,438, and 750,000 shares of accounts payable – related party of $24,003 and a loss on settlement of debt in the amount $17,677 was recorded related to this issuance; 6,000,000 shares, valued at $0.04 per share, 1,500,000 shares valued at $0.02 per share and 1,500,000 shares valued at $0.05 per share were issued to Board members; 3,000,000 shares valued at $0.04 per share and 550,000 valued at $0.05 per share were issued to consultants; 3,000,000 sharescommon stock were issued in errora cashless exercise. During the 6-months ending June 30, 2019 the Company awarded 208,333 warrants valued at $45,361.

The following table summarizes the Company’s common stock warrant activity for the 6-months ended June 30, 2020 and June 30, 2019:

During the six months ending June 30, 2020, the Company awarded 96,000 options under the 2010 Stock Plan, with a fair market value of $5,695. There were no options awarded during the 6-months ending June 30, 2019.

The following table summarizes the Company’s common stock option activity for the 6-months ended at June 30, 2020:

NOTE 6 – STOCK OPTION PLAN AND STOCK-BASED COMPENSATION

During the year ended December 31, 2010, the Company adopted a stock option plan entitled “The 2010 Stock Plan” (2010 Plan) under which the Company may grant Options to Purchase Stock, Stock Awards or Stock Appreciation Rights up to 15% of common stock, automatically adjusted on November 29, 2016, cancelledJanuary 1 each year. As of December 31, 2018, there were no outstanding awards under the 2010 Plan. As of December 31, 2019, there were 341,000 outstanding stock options with a fair market value of $257,143 and 1,127,000 shares issued with a fair market value of $864,551 at the time of award. At December 31, 2018, there were no outstanding stock options, nor any shares awarded.

Under the terms of the stock plans, the Board of Directors shall specify the exercise price and vesting period of each stock option on November 29, 2016the grant date. Vesting of the options is typically immediate and returned to the treasury on February 15, 2017. options typically expire in five years. Stock Awards may be directly issued under the Plan (without any intervening options). Stock Awards may be issued which are fully and immediately vested upon issuance.

Shares Awarded and Issued:

On January 13, 2017, 4,350,0001, 2020 the Company granted 250,000 shares were cancelled. with a fair market value of $0.285/share at the time of award, to a consultant for assistance with the Companies PR work, for a total of $71,250.

On January 31, 2020 the Company granted two subcontractors a total of 200,000 shares with a fair market value of $0.14/share at the time of award, as compensation for their work with the Company’s marketing efforts, for a total of $28,000.

On March 18, 2020 the Company granted 200,000 shares with a fair market value of $0.245/share at the time of award, to a consultant for assistance with the Companies PR work, for a total of $49,000.

On February 21, 2020 the Company granted 3,000 shares with a fair market value of $0.439/share to three members of the Audit Committee as compensation for their contribution in the Audit Committee, for a total of $1,317.

On March 25, 2019, the Company granted 3,000 shares with a fair market value of $0.31/share to three members of the Company Board as compensation for their contribution in the Company’s Board of Directors, for a total of $930.

On May 1, 2020 the Company appointed Mr. Mike Sheikh as EVP of Business Development. Mr. Sheikh was issued 8,800,000 shares with a fair market value of $0.001/share to be equally vested over a period of 3 years, but fully vested upon a change of control. The shares total fair value at the time of the award was $8,800.

For the six months ended June 30, 2020, the Company recorded stock-based compensation expense of $159,297 in connection with share-based payment awards. The Company did not record any recorded stock-based compensation expense in the six months ended June 30, 2019.

Stock options granted and vested:

On January 1, 2020 the Company granted 3,000 three-year options at an exercise price of $0.31 to a Medical Advisory Board Member for his contribution in the Company’s Advisory Board. The options total fair value at the time of award was $603.

On February 1, 2020 the Company granted 45,000 three-year options at an exercise price of $0.15 to a Medical Advisory Board Member for his contribution in the Company’s Advisory Board. The options total fair value at the time of award was $4,401.

On April 25, 2017,1, 2020 the Company issued 8,100,000 sharesgranted 3,000 three-year options at an exercise price of common stock$0.32 to 3 directors and various consultantsa Medical Advisory Board Member for past services rendered. his contribution in the Company’s Advisory Board. The options total fair value at the time of the award was $646.

On May 1, 2020 the Company granted 45,000 three-year options at an exercise price of $0.001 to a Medical Advisory Board Member for his contribution in the Company’s Advisory Board. The options total fair value at the time of the award was $45.

The fair value of these shares is $0.02 per share based onstock options granted and revaluation of non-employee consultant options for the stock price; thus $162,000six months ended June 30, 2020 was recognized as stock based compensation. Also, on that date,calculated with the following assumptions:

For the six months ended June 30, 2020, the Company issued 3,000,000 sharesrecorded compensation expense of S-8 shares$5,695 in connection with awarded stock options. The Company did not record any awarded option valuation as compensation expense during the six months ended June 30, 2019. As at June 30, 2020, there was no unrecognized compensation expense related to two consultants. The fair market value of these shares is $0.02 per share based on thenon-vested stock price; thus $60,000 was recognized as stock based compensation.option awards.

AsThe following table summarizes the Company’s stock option activity for the six months ended June 30, 2020:

The following table summarizes information about stock options that are vested or expected to vest at June 30, 2020:

The following table sets forth the status of Septemberthe Company’s non-vested stock options as of June 30, 20172020 and December 31, 2016, there were 34,916,350 and 28,166,350 shares of common stock outstanding, respectively.2019:

Note 3. Notes and Debentures PayableThe weighted-average remaining estimated life for options exercisable at June 30, 2020 is 2.28 years.

As

The aggregate intrinsic value for fully vested, exercisable options was $0 at June 30, 2020 and 2019. The aggregate intrinsic value of Septemberoptions exercised for the six months ended at June 30, 20172020 and December 31, 2016, the Company had one debenture of $5,000 and a note payable of $80,000 outstanding, respectively. In 2009, the Company received a $5,000 note payable due upon demand and then in 2013 an $80,000 note bearing 6% per annum, simple interest, payable on or before November 23, 2013. The Company and note holders are in discussions with respect to the payoff of the notes2019 was $0 as they are both in default.no options were exercised.

At SeptemberJune 30, 2017,2020 the Company has recorded accrued interest of $12,672 related to1,951,351 options or stock awards available for grant under the notes and debentures payable which is included in the $32,626 accrued interest balance on the balance sheet.2010 Plan.

At December 31, 2016, the Company has recorded accrued interest of $8,698 related to the notes and debentures payable which is included in the $26,776 accrued interest balance on the balance sheet.

Note 4. Loans Payable

We have two short-term loans totaling $25,000 at September 30, 2017. These loans were due in 2012 and as of September 30, 2017, are in default. These notes are accruing interest at a rate of 10% per annum. At September 30, 2017 and December 31, 2016, the Company has recorded accrued interest of $19,953 and $18,078, respectively, related to the loans payable which is included in the $32,626 and $26,776 accrued interest balance on the balance sheet, respectively.

Note 5. Related Party Transactions

At September 30, 2017 and December 31, 2016, the Company has recorded accounts payable to related parties of $254,315 and $168,325, respectively.

From July 11, 2017 through September 30, 2017 a Director of the Company has purchased and paid for $48,780 of the Company’s products for resale through his business. 

NOTE 7 – COMMITMENTS AND CONTINGENCIES

Note 6. CommitmentsEmployment contracts

The Company’s executive officers have entered employment contracts and Contingenciesconfidentiality, non-disclosure and assignment of invention agreements. The employment agreements do not provide for the payment of any compensation to our executive officers but provide for the payment of $100,000 in severance upon termination of employment without cause and make no provisions for any payment upon a change of control.

Litigation

In the normal course of business, the Company may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance. Legal fees for such matters are expensed as incurred and we accrue for adverse outcomes as they become probable and estimable.

On June 5, 2020 the Supreme Court of the State of New York, County of Nassau, issued a commencement of Action based on behalf of Power Up Lending Group, Ltd (“Power Up” or the “Claimant”). The claimant request that due to the default of their note requesting a judgment for an amount of not less than $420,750. Among other claims Power Up asserts that the Company willfully failed to maintain the trading status, and manipulated its stock in its efforts to defraud the public and its investors by making false press statements and the like. The Company is denying any wrong-doing. However, the full requested amount has been included in the default calculation of the convertible debt.

NOTE 8 – SUBSEQUENT EVENTS

Stock options and shares granted under the 2010 Stock Plan:

On July 1, 2020, the Company granted 3,000 shares with a fair market value of $0.19/share to three members of the Company Board as compensation for their contribution in the Board and Committee contribution during the previous quarter, for a total of $570.

On July 1, 2020 the Company granted 3,000 three-year options at an exercise price of $0.18/share to a Medical Advisory Board Member for his contribution in the Company’s Advisory Board. The options total fair value at the time of the award was $538.

On August 1, 2020 the Company granted 45,000 three-year options at an exercise price of $0.14/share to a Medical Advisory Board Member for his contribution in the Company’s Advisory Board. The options total fair value at the time of the award was $6,300.

On August 3, 2020, the Company granted a total of 50,000 shares, to three Medical Consultants for their efforts in validating the Company’s science and potential clinical pathways. The shares total fair value at the time of award was $150. The shares are expected to be issued during the month of August, 2020.

The Company has been advised by the Bureau of Land Management that it must prepare and submit an amended plan of remediation for Eagle 4 and related areas where mining and related activities are being conducted and also will be required to submit an environmental assessment as well which will interrupt mining activities. The amended plan of remediation to be submitted may result in increasing the amount of the bond presently posted by the Company.  In addition, the Company has been advised by the BLM that it owes the BLM for materials removed from the mine site in prior years.  The amounts have not been determined but estimated to be approximately $4,000.  The Company and the BLM are waiting also for the Army Corps of Engineers to determine if a drainage ditch adjacent to the mine site is a stream, which is regulated by them.  As of September 30, 2017, no determination has been made by the Army Corps of Engineers. No communication has been received from the Army Corps of Engineers since May 2014.  

Note 7. Subsequent Events

The Company'sCompany’s management has evaluated subsequent events occurring after June 30, 2020 through the date thesethe financial statements were issued and determined there were nodid not identify any further subsequent events to disclose.requiring disclosure.

ITEMItem 2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATIONManagement’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis is based on, and should be read in conjunction with, our unauditedthe audited financial statements and the notes thereto.

Forward-Looking Statements

thereto for the two years ended December 31, 2019 included in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 18, 2020. This quarterly reportdiscussion contains forward-looking statements and information relating to us that are based on the beliefs of our management as well as assumptions made by, and information currently available to, our management. When used in this report, the words "believe," "anticipate," "expect," "estimate," “intend”, “plan” and similar expressions, as they relate to us or our management, are intended to identify forward-looking statements. These statements reflect management's current vieware often identified by the use of us concerning future eventswords such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,” or “continue,” and similar expressions or variations. Such forward-looking statements are subject to certain risks, uncertainties and assumptions, including among many others: a general economic downturn; a downturnother factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. The forward-looking statements in this Quarterly Report on Form 10-Q represent our views as of the date of this Quarterly Report on Form 10-Q. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so, except to the extent required by applicable law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Quarterly Report on Form 10-Q.

Overview

We do not currently have sufficient capital resources to fund operations. To stay in business and to continue the development of our products, we will need to raise additional capital through public or private sales of our securities, markets; federaldebt financing or state lawsshort-term bank loans, or regulations havinga combination of the foregoing. We believe that if we can raise $3,700,000, we will have sufficient working capital to repay the ten convertible notes and develop our business over the next approximately 15 months. At funding raised that is significantly less than $3,700,000, we can likely repay the ten convertible notes and continue to develop our business over the same 15-month period, but funding at that level will delay the development of our technology and business.

Bioxytran, Inc. is headquartered in Newton, Massachusetts. The Company’s initial product pipeline is focused on developing and commercializing therapeutic molecules for stroke. BXT-25 will be designed to be an adverse effectinjectable anti-necrosis drug specifically designed to treat a person immediately after that person suffers an ischemic stroke. The drug is designed to be injected intravenously to travel to the lungs to pick up oxygen molecules to carry to the brain. Like a red blood cell, the drug will cross the blood brain barrier, which is a protective semi-permeable membrane allowing some material to cross but preventing others from crossing. BXT-25 will be designed to diffuse oxygen into the brain tissues. We expect the BXT-25 molecule to be 5,000 times smaller than a red blood cell.

The Company is also pursuing their work with a second drug candidate, BXT-10, a complex polysaccharide derived from pectin that binds to, and blocks the activity of galectin-1, a type of galectin. Galectins are a member of a family of proteins in the body called lectins. These proteins interact with carbohydrate sugars located in, on proposed transactionsthe surface of, and in between cells. This interaction causes the cells to change behavior, including cell movement, multiplication, and other cellular functions. The interactions between lectins and their target carbohydrate sugars occur via a carbohydrate recognition domain, or CRD, within the lectin. Galectins are a subfamily of lectins that have a CRD that bind specifically to ß-galactoside sugar molecules. Galectins have a broad range of functions, including regulation of cell survival and adhesion, promotion of cell-to-cell interactions, growth of blood vessels, regulation of the immune response and inflammation. During viral infections galectins are upregulated and downregulated based on the type of virus.

The Company plan to file a pre-investigational new drug application for BXT-10 for the treatment of mild to moderate COVID-19 patients. However, we cannot provide any assurance that we desirewill successfully initiate or complete those planned trials and be able to effect; Securitiesinitiate any other clinical trials for BXT-10 or any of our future drug candidates.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company has limited resources and Exchange Commission regulations which affect tradingoperating history. As described in Note 4 of the financial statements, the Company has currently ten convertible loans outstanding at a total value of $938,400 maturing between 10/22/2020 and 3/18/2021, in order to finance the Company until we start raising equity. As a result of the ten-day SEC suspension of April 16. 2020, the notes entered into default and the principal owed is currently $1,604,856, including default penalties. As shown in the securitiesaccompanying consolidated financial statements, the Company had an accumulated deficit of "penny stocks,"$3,710,398 as of June 30, 2020. The accumulated deficit as of December 31, 2019 was $2,241,305.

The future of the Company is dependent upon its ability to obtain financing to develop its new business opportunities and other riskssupport the cost of the drug development including clinical trials and uncertainties. Should any of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this report as anticipated, estimated or expected. All forward-looking statements attributableregulatory submission to us are expressly qualified in their entirety by the foregoing cautionary statement.FDA.

Overview

U.S. Rare Earth Minerals, Inc. (the “Company”), primary focusThe Company is supplementing its disclosure previously disclosed in the Company’s annual report on salesForm 10-K for the year ended December 31, 2019 and distributionits subsequent quarterly reports on Form 10-Q with the following disclosure: Potential Impact of certain products derived from the natural mineral depositsCOVID-19 Pandemic in December 2019, a strain of novel coronavirus (now commonly known as Calcium Montmorillonite. These activities willCOVID-19) was reported to have surfaced in Wuhan, China. COVID-19 has since spread rapidly throughout many countries, and, on March 12, 2020, the World Health Organization declared COVID-19 to be carried out through a web-basedpandemic. In an effort to contain and distributor-based sales program directed at agricultural, animalmitigate the spread of COVID-19, many countries, including the United States, Canada and human usesChina, have imposed unprecedented restrictions on travel, and there have been business closures and a substantial reduction in economic activity in countries that have had significant outbreaks of COVID-19. COVID-19 may have a future material impact on our results of operation with respect to product development and clinical trials. However, significant uncertainty remains as to the potential impact of the products.COVID-19 pandemic on our operations, and on the global economy as a whole. It is currently not possible to predict how long the pandemic will last or the time that it will take for economic activity to return to prior levels. We do not yet know the full extent of any impact on our business or our operations, however, we will continue to monitor the COVID-19 situation closely, and we intend to follow health and safety guidelines as they evolve.

To the extent that the company requiresManagement plans to seek additional capital for operationsthrough private placements and public offerings of its common stock. There can be no assurance that it cannot derive from profits from sales, the Company plans to sell additional shares of unregistered preferred stock to raise money for additional operating capital. There is no guarantee the Company will be successful in sellingaccomplishing its objectives. Without such additional shares to raise funds for additional operating capital or if successful, it willthe establishment of strategic relationships with established pharmaceutical companies, the Company may be required to cease operations. These conditions raise substantial doubt about the desired amount or be on terms and conditions which are beneficialCompany’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the Company.recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue operations.

PlanRESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2020

We are a start-up company. Historically, Bioxytran was engaged in formation, fund raising and identifying and consulting with the scientific community regarding the development, formulation and testing of Operationits products.

General and Administrative

General and administrative (G&A) expenses for the three months ended June 30, 2020 were $111,909, while for the three months ended June 30, 2019, they were $106,498. The components of G&A expenses are as follows:

Interest Expense and Amortization of Debt Discount and Premium

During the three months ended June 30, 2020, the Company recorded $856,560 of premium accretion to additional paid-in capital, and $76,265 in amortization of debt discount to interest expense. The interest for the convertible notes outstanding amounted to $73,968 and $666,456 was recorded as default fee for the convertible notes. During the three months ended June 30, 2019, the Company recorded $123,276 of premium accretion to additional paid-in capital, and $13,794 in amortization of debt discount to interest expense. The interest for the convertible notes outstanding amounted to $10,002. The increased costs are due to the default of outstanding notes on April 16,2020, as a result of the 10-day trading suspension imposed by the SEC.

Net Loss

The Company markets and sellsgenerated a net loss for the product underthree months ended June 30, 2020 of $928,598. In comparison, for the name “EXCELERITE®”. The Company believes that EXCELERITE® has broad applications for plants, animals and humans. Specifically,three months ended June 30, 2019, the Company believes that by adding EXCELERITE® back into the soil, household and commercial farmers are replacing what has been lost by the usegenerated a net loss of man-made fertilizers over hundreds of years. Farmers using EXCELERITE® are seeing higher yields and larger and more nutritious crops. In addition, studies suggest that animals whose feed$130,294. The increased loss is supplemented with EXCELERITE® grow healthier and produce more. The naturally chelated nutrients and minerals in EXCELERITE® may enhance the production of enzymes. Without enzymes living things cannot build proteinmainly linked to current quarter costs for legal, accounting and other vital processes. “Micro-Excelerite ™”professional services for documentation that were filed with the SEC, as well as the amortization of debt discounts applied to warrants issued in connection with convertible debt and the related loan fees.

RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2020

We are a start-up company. Historically, Bioxytran was engaged in formation, fund raising and identifying and consulting with the scientific community regarding the development, formulation and testing of its products.

General and Administrative

General and administrative (G&A) expenses for the six months ended June 30, 2020 were $377,952, while for the six months ended June 30, 2019, they were $236,123. The components of G&A expenses are as follows:

Interest Expense and Amortization of Debt Discount and Premium

During the six months ended June 30, 2020, the Company recorded $961,128 of premium accretion to additional paid-in capital, and $242,987 in amortization of debt discount (including $145,438 in warrant amortization), as compared to, $183,544 of premium accretion and a supplement formdebt discount amortization of EXCELERITE® is believed$68,691 (including warrant amortization of $45,361) for the six months ended June 30, 2019. The interest for the convertible notes outstanding amounted to rejuvenate$848,154 (including a pre-pay fee of $91,362 for the healthearly payment of a convertible note and the human bodydefault penalty of $666,456), as compared to $16,889 for the six months ended June 30, 2019. The increased costs are mainly linked to current quarter costs for legal, accounting and other professional services, as well as the amortization of debt discounts applied to warrants issued in many ways. In addition to its natural supply of 78 essential nutrientsconnection with convertible debt and minerals, its ionic charge removes toxins as it works through the digestive tract.related loan fees.

Net Loss

The Company generated a net loss for the six months ended June 30, 2020 of $1,469,093. In comparison, for the six months ended June 30, 2019, the Company generated a net loss of $321,703. The increased loss is marketing its products through various channels including but not limitedmainly linked to direct distribution, sales through third-party distributorscurrent quarter costs for legal, accounting and sales throughother professional services, as well as the Company’s website.amortization of debt discounts applied to warrants issued in connection with convertible debt and the related loan fees.

CASH-FLOWS

Net cash used in operating activities was $212,504 and $213,382 for the six months ended June 30, 2020 and 2019, respectively. The Company has also undertakenincrease was due to develop a network of distributors, bothattendance at JPM Conference in the United StatesJanuary 2020 and internationally. The Company’s directors have been marketing the product to agricultural customers in Oregon, throughout the United States and internationally as well.increased operational activities.

The Company has been engageddid not engage in various testing programs with several major agriculture firms forany investing activities during the past two years. Two of these firms are listed NYSE companies and do business worldwide. Results of these test on strawberries, carrots, peaches, soy beans, sweet potatoes and grapes have been very positive. EXCELERITE® has also been tested and proved to eliminate the odor from pig and cow manure which should lead to large orders from cattle farmers worldwide. The product is also being tested by poultry farmers.

Management believes that by partnering with these certain firms, long-term business relationships will develop, deriving substantial future product sales. The Company is bound by certain “Non-Disclosure Agreements” and therefore cannot divulge the names of partnering companies. Announcements of the Company’s test results and identity of its partners will be forthcoming when certain test results are completed and the parties agree on the content of the disclosure.

RESULTS OF OPERATIONS

The following table shows the financial data of the statements of operations of the Company for the three and six months ended SeptemberJune 30, 2017 and 2016.2020 or 2019.

THREE MONTHS ENDED SEPTCash flows from financing activities were $81,052 and $222,250 for the six months ended June 30, 2017 COMPARED TO THREE MONTHS ENDED SEPT 30, 2016.

2020 and 2019, respectively. The significant change was due to repayment of an outstanding convertible note on February 20, 2020.

The variancecash available was $4,246 and $45,279 in the operating loss was primarily due to no shares issued for services in third quarter 2017 for a decreaseend of operating expenses of $245,724 when comparing the three month periodsix months ended SeptemberJune 30, 2017 to the same period last year.2020 and 2019, respectively.

NINE MONTHS ENDED SEPT 30, 2017 COMPARED TO NINE MONTHS ENDED SEPT 30, 2016. 

The variance in the operating income was primarily due to a decrease of revenue of $29,408 due to adverse weather conditions in the first quarter 2017 and less stock was issued for compensation for operating expenses. . 

LIQUIDITY AND CAPITAL RESOURCES

The varianceAs of June 30, 2020, our assets consisted of was $4,246 in cash. We had total liabilities of $1,903,943, which were all current liabilities, and which consisted of $299,087 in accounts payable and accrued expenses is primarily due(of which $183,176 was payable to related parties), and $1,604,856 in the form of ten convertible loans currently in default. As a result of defaulting on the notes, the debt premium as well as the debt discounts are fully amortized. The equivalent numbers at December 31, 2019, were $169,628 in cash and total liabilities of $1,018,915, which were all current liabilities, and which consisted of $167,932 in accounts payable and accrued expenses (of which $96,000 was payable to related parties), and $850,983 (which includes unamortized debt premium of $24,121, and which has been netted with unamortized debt discounts totaling $60,038) in the form of seven convertible loans, maturing between February 25, 2020 and 12/30/2020.

At June 30, 2020, we had total working capital of negative $1,899,697 and an accumulated deficit of $3.710,398. Comparatively, on December 31, 2019, we had total working capital of negative $799,287 and an accumulated deficit of $2,241,305. We believe that we must raise not less than $3,700,000 in addition to current cash on hand to be able to continue our business operations for approximately the next 15 months and repay the ten convertible notes.

We have no current commitment from our officers and directors or any of our shareholders, to supplement our operations or provide us with financing in the future. If we are unable to raise additional capital from conventional sources and/or additional sales of stock in the future, we may be forced to curtail or cease our operations. Even if we are able to continue our operations, the failure to obtain financing could have a substantial adverse effect on our business and financial results. In the future, we may be required to seek additional capital by selling debt or equity securities, selling assets, or otherwise be required to bring cash flows in balance when we approach a condition of cash insufficiency. The sale of additional equity or debt securities, if accomplished, may result in dilution to our then shareholders. We provide no assurance that financing will be available in amounts or on terms acceptable to us, or at all.

Contractual Obligations

Our contractual obligations include ten convertible notes, for a total of $938,400 and of accrued interest for these notes mounting to $87,950, described under Note 4 to the decrease in revenueFinancial Statements. As a result of the ten-day SEC suspension of April 16. 2020, the notes entered into default and an increase of cash on hand.  the principal owed is currently $1,604,856, including default penalties.

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. To date, the Company has added Directors. We are proceeding to the production of the EXCELERITE^®retail products, including a new website with e-commerce capability. We will need to raise funds to implement our business plan and continue operations.Off-Balance Sheet Arrangements

We believe that the level of financial resources is a significant factor for our future development, and accordingly we may choose at any time to raise capital through private debt or equity financing to strengthen its financial position, facilitate growth and provide us with additional flexibility to take advantage of business opportunities. While we are presently considering a limited private offering of our securities, we do not have immediate plansany off-balance sheet arrangements that have, or are reasonably likely to have, a public offeringcurrent or future material effect on our consolidated financial condition, results of our common stock and there is no guarantee that any such offering would be successfuloperations, liquidity, capital expenditures or be completed on terms that are beneficial to the Company. capital resources.

CRITICAL ACCOUNTING POLICIES

In presenting our financial statements in conformity with generally accepted accounting principles, we are required to make estimates and assumptions that affect the amounts reported therein. Several of the estimates and assumptions we are required to make relate to matters that are inherently uncertain as they pertain to future events. However, events that are outside of our control cannot be predicted and, as such, they cannot be contemplated in evaluating such estimates and assumptions. If there is a significant unfavorable change to current conditions, it could result in a material adverse impact to our results of operations, financial position and liquidity. We believe that the estimates and assumptions we used when preparing our financial statements were the most appropriate at that time. Presented below are those accounting policies that we believe require subjective and complex judgments that could potentially affect reported results. However, the majority of our businesses operate in environments where we pay a fee for a service performed, and therefore the results of the majority of our recurring operations are recorded in our financial statements using accounting policies that are not particularly subjective, nor complex.

Revenue Recognition

Revenue from the sale of product obtained from our mining contractor is recognized when ownership passes to the purchaser at which time the following conditions are met:

i) persuasive evidence that an agreement exists;

ii) the risks and rewards of ownership pass to the purchaser including delivery of the product;

iii) the selling price is fixed and determinable; or,

iv) collectively is reasonably assured.

Stock Based Compensation

The Company has share-based compensation plans under which non-employees, consultants and suppliers may be granted restricted stock, as well as options to purchase shares of Company common stock at the fair market value at the time of grant. Stock-based compensation cost is measured by the Company at the grant date, based on the fair value of the award over the requisite service period. For options issued to employees, the Company recognizes stock compensation costs utilizing the fair value methodology over the related period of benefit. Grants of stock options and stock to non-employees and other parties are accounted for in accordance with ASC 505.

The Company applies ASC 718 for options, common stock and other equity-based grants to its employees and directors. ASC 718 requires measurement of all employee equity-based payment awards using a fair-value method and recording of such expense in the consolidated financial statements over the requisite service period. The fair value concepts have not changed significantly in ASC 718; however, in adopting this standard, companies must choose among alternative valuation models and amortization assumptions. After assessing alternative valuation models and amortization assumptions, the Company will continue using both the Black-Scholes valuation model and straight-line amortization of compensation expense over the requisite service period for each separately vesting portion of the grant.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

ITEMItem 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKQuantitative and Qualitative Disclosures About Market Risk

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company3 is not requiredapplicable to provide information required by this Item.us because we are a smaller reporting company.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company maintainsOur Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer) reviewed the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report and concluded that as of June 30, 2020, (i) the Company’s disclosure controls and procedures were not effective to ensure that material information relating to the Company is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission (the “Commission”), and (ii) the Company’s controls and procedures have not been designed to ensure that information required to be disclosed by the Company in the reports filedthat it files or submits under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”), is recorded, processed, summarizedaccumulated and reported withincommunicated to the specified time period. Management, with the participationCompany’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Based on this evaluation, our principal executive officer and principal financial officer concluded as of the Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of September 30, 2017. Based onevaluation date that evaluation, the Company’s CEO and CFO concluded that the Company’sour disclosure controls and procedures were not effective asdue primarily to a material weakness in the segregation of September 30, 2017. duties in the Company’s internal controls.

Changes in internal controls over financial reportingInternal Controls Over Financial Reporting

There waswere no changechanges in our internal controlscontrol over financial reporting that occurred duringidentified in connection with our evaluation of these controls as of the periodfiscal quarter covered by this report whichthat has materially affected, or is reasonably likely to materially affect, our internal controlscontrol over financial reporting.

Inherent Limitations on Effectiveness of Controls

The Company’s management does not expect that its disclosure controls or its internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

PART II - OTHER INFORMATION

NoneItem 1. Legal Proceedings

The Company may become involved in certain legal proceedings and claims which arise in the normal course of business.

On June 5, 2020 the Supreme Court of the State of New York, County of Nassau, issued a commencement of Action based on behalf of Power Up Lending Group, Ltd (“Power Up” or the “Claimant”). The Claimant request that due to the default of their note requesting a judgement for an amount of not less than $420,750. Among other claims, Power Up asserts that the Company willfully failed to maintain the trading status, and manipulated its stock in its efforts to defraud the public and its investors by making false press statements and the like. The Company is denying any wrong-doing.

AsItem 1A. Risk Factors

There have not been any material changes in the risk factors from those previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2019.

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

There were no sales of equity securities sold during the period covered by this Report that were not previously included in a “smaller reporting company” as defined by Item 10Current Report on Form 8-K.

The Company claims an exemption from the registration requirements of the Securities Act of 1933 (the “Securities Act”) for the private placement of these securities pursuant to Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation S-K,D promulgated under the Company is not required to provide information required by this ItemSecurities Act.

None

NoneItem 3. Defaults Upon Senior Securities

None.

NoneItem 4. Mine Safety Disclosures

Not Applicable.

The Board of Directors, on July 11, 2017, accepted the resignation of Director Daniel Potente.Item 5. Other Information

On July 11, 2017, the Board of DirectorsApril 16, 2020 SEC ordered, pursuant to Section 12(k) of the Securities Exchange Act of 1934, that trading of BIXT is suspended for the period April 16, through April 29, 2020.

The Company’s management is taking all reasonable steps to get the Company elected Nathan Marks a Director oftraded on the Company.OTCQB exchange again, in accordance with regulations as outlined by the SEC.

On July 11, 2017, Nathan Marks (47)May 1, 2020 the Company appointed Mr. Mike Sheikh as EVP of Business Development. Mr. Sheikh is committed on a full-time basis. He currently has a compensation of $6,000 per month. The employment agreement provides for the payment of $100,000 in severance upon termination of employment without cause and make no provisions for any payment upon a change of control. Mr. Sheikh was electedissued 8,800,000 shares to be equally vested over a period of 3 years, but fully vested upon a change of control. The shares total fair value at the Boardtime of Directors.the award was $8,800.

Mr. Mike Sheikh, is a US Air Force Academy graduate and pilot. He has a Bachelor’s of Science in Economics and flew KC-135 tankers and worked as a budget officer in the comptroller’s squadron. He worked for Dean Witter and National Securities as a broker and eventually research analyst. After the brokerage industry, he was a business development officer for a variety of specialty finance companies that did factoring and purchase order financing. He is ownera long-time Biotech Consultant expertise for public or private biotech companies with disruptive technologies. Mr. Sheikh the founder of M&M Ag Supply in, Nampa, ID. M&M Ag Supply sells organic soil amendmentsFalcon Strategic Research, which focuses on small-cap and new & reconditioned spreaders to farmers throughoutmicro-cap companies that are not covered by traditional analysts on Wall Street. He is also the United States. Excelerite® in M&M Ag’s number one selling soil amendment.founder of an Investor Relations Firm. Mr. Sheikh has also been the interim CFO for various public companies and he is a blog commenter and author at Seeking Alpha and Streetwise Reports. 

Item 6. Exhibits

SIGNATURES

Pursuant toIn accordance with the requirements of the Securities Exchange Act, of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereuntothere unto duly authorized.

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