UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30,March 31, 20222023
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from_____________ to _____________
Commission file number: 001-35027
BIOXYTRAN, INC.
(Exact name of registrant as specified in its charter)
| Nevada | 2834 | 26-2797630 | ||
(State or other jurisdiction of
| (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification No.) |
| 75 2nd Avenue, Ste 605, Needham, MA | 02494 | |
| (Address of principal executive offices) | (Zip Code) |
617-454-1199
(Registrant’s telephone number, including area code)
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 whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |
| Non-accelerated filer | ☒ | Smaller Reporting Company | ||
| Emerging Growth Company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
Indicate the number of shares outstanding of each of the issuer’s classes of Common Stock,common stock, as of the latest practicable date.
| Class | Outstanding at | |
| Common Stock, $0.001 par value per share | shares |
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
Item 1. Unaudited Condensed Consolidated Financial Statements: BIOXYTRAN, Inc., June 30, 2022March 31, 2023
BIOXYTRAN, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2022MARCH 31, 2023 AND DECEMBER 31, 20212022
(UNAUDITED)
| June 30, 2022 | December 31, 2021 | March 31, 2023 | December 31, 2022 | |||||||||||||
| ASSETS | ||||||||||||||||
| Current assets: | ||||||||||||||||
| Cash | $ | 500,677 | $ | 72,358 | $ | 153,801 | $ | 295,401 | ||||||||
| Total current assets | 500,677 | 72,358 | 153,801 | 295,401 | ||||||||||||
| Intangibles, net | 67,548 | 46,932 | 79,732 | 75,535 | ||||||||||||
| Total assets | $ | 568,225 | $ | 119,290 | $ | 233,533 | $ | 370,936 | ||||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||||||||||
| Current liabilities: | ||||||||||||||||
| Accounts payable and accrued expenses | $ | 556,835 | $ | 624,316 | $ | 1,100,869 | $ | 749,395 | ||||||||
| Accounts payable related party | 1,062,000 | 531,000 | 975,227 | 709,727 | ||||||||||||
| Un-issued shares liability | 60,150 | — | 1,810 | 960 | ||||||||||||
| Un-issued shares liability related party | 56,240 | — | 51,150 | 38,400 | ||||||||||||
| Convertible notes payable, net of premium and discount | 3,593,650 | 2,122,181 | 2,165,000 | 2,165,000 | ||||||||||||
| Total current liabilities | 5,328,875 | 3,277,497 | 4,294,056 | 3,663,482 | ||||||||||||
| Total liabilities | 5,328,875 | 3,277,497 | 4,294,056 | 3,663,482 | ||||||||||||
| Commitments and contingencies | — | — | — | - | ||||||||||||
| Stockholders’ deficit: | ||||||||||||||||
| Preferred stock, $ par value; shares authorized, issued and outstanding | — | — | — | — | ||||||||||||
| Common Stock, $ par value; shares authorized; issued and outstanding | 110,841 | 110,841 | ||||||||||||||
| Common stock, $ par value; shares authorized; and issued and outstanding as at March 31, 2023 and December 31, 2022, respectively | 123,502 | 123,252 | ||||||||||||||
| Additional paid-in capital | 5,876,859 | 5,881,876 | 8,442,180 | 8,392,430 | ||||||||||||
| Non-controlling interest | (460,063 | ) | (397,256 | ) | (623,522 | ) | (590,628 | ) | ||||||||
| Accumulated deficit | (10,288,287 | ) | (8,753,668 | ) | (12,002,683 | ) | (11,217,600 | ) | ||||||||
| Total stockholders’ deficit | (4,760,650 | ) | (3,158,207 | ) | (4,060,523 | ) | (3,292,546 | ) | ||||||||
| Total liabilities and stockholders’ deficit | $ | 568,225 | $ | 119,290 | $ | 233,533 | $ | 370,936 | ||||||||
See the accompanying notes to these unaudited condensed consolidated financial statements
| 1 |
BIOXYTRAN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022MARCH 31, 2023 AND 20212022
(UNAUDITED)
March 31, 2023 | March 31, 2022 | |||||||||||||||||||||||
| Three months ended | Six months ended | 3-Months Ended | ||||||||||||||||||||||
June 30, 2022 | June 30, 2021 | June 30, 2022 | June 30, 2021 | March 31, 2023 | March 31, 2022 | |||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||
| Research and development | $ | 43,141 | $ | 718,652 | $ | 283,266 | $ | 1,065,685 | $ | 139,004 | $ | 240,125 | ||||||||||||
| General and administrative | 447,360 | 272,614 | 1,003,941 | 839,934 | 587,638 | 535,861 | ||||||||||||||||||
| Stock based compensation expense | 46,723 | 51,050 | 69,123 | 825,608 | ||||||||||||||||||||
| 10,000 | 20,720 | |||||||||||||||||||||||
| Compensation expense | 13,600 | 22,400 | ||||||||||||||||||||||
| Total operating expenses | 537,224 | 1,042,316 | 1,356,330 | 2,731,227 | 750,242 | 819,106 | ||||||||||||||||||
| Loss from operations | (537,224 | ) | (1,042,316 | ) | (1,356,330 | ) | (2,731,227 | ) | (750,242 | ) | (819,106 | ) | ||||||||||||
| Other expenses: | ||||||||||||||||||||||||
| Interest expense | (54,480 | ) | (84,217 | ) | (106,515 | ) | (171,627 | ) | 67,221 | 52,035 | ||||||||||||||
| Debt discount and intangible amortization | (42,336 | ) | (17,103 | ) | (134,581 | ) | (17,103 | ) | ||||||||||||||||
| Amortization of IP | 514 | 911 | ||||||||||||||||||||||
| Amortization of debt discount | — | 91,334 | ||||||||||||||||||||||
| Total other expenses | (96,816 | ) | (101,320 | ) | (241,096 | ) | (188,730 | ) | 67,735 | 144,280 | ||||||||||||||
| Net loss before provision for income taxes | (634,040 | ) | (1,143,636 | ) | (1,597,426 | ) | (2,919,957 | ) | (817,977 | ) | (963,386 | ) | ||||||||||||
| Provision for income taxes | — | — | — | — | — | — | ||||||||||||||||||
| NET LOSS | (634,040 | ) | (1,143,636 | ) | (1,597,426 | ) | (2,919,957 | ) | ||||||||||||||||
| Net loss | (817,977 | ) | (963,386 | ) | ||||||||||||||||||||
| Net loss attributable to the non-controlling interest | 11,691 | 246,935 | 62,807 | 401,549 | 32,894 | 51,116 | ||||||||||||||||||
| NET LOSS ATTRIBUTABLE TO BIOXYTRAN | $ | (622,349 | ) | $ | (896,701 | ) | $ | (1,534,619 | ) | $ | (2,518,408 | ) | $ | (785,083 | ) | $ | (912,270 | ) | ||||||
| Loss per Common share, basic and diluted | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.02 | ) | ||||||||||||
| Loss per common share, basic and diluted | $ | (0.01 | ) | $ | (0.01 | ) | ||||||||||||||||||
| Weighted average number of Common shares outstanding, basic and diluted | 110,840,998 | 103,371,579 | 110,840,998 | 101,753,891 | ||||||||||||||||||||
| Weighted average number of common shares outstanding, basic and diluted | 123,495,291 | 110,840,998 | ||||||||||||||||||||||
See the accompanying notes to these unaudited condensed consolidated financial statements
| 2 |
BIOXYTRAN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
FOR THE SIXTHREE MONTHS ENDED JUNE 30,MARCH 31, 2023 AND 2022 AND 2021
(UNAUDITED)
| Common Stock | Preferred Stock | Additional Paid in Capital | Accumulated | Non-controlling | Total | |||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Common | Preferred | Deficit | Interest | Equity | ||||||||||||||||||||||||||||
| December 31, 2020 | 97,450,673 | $ | 97,451 | — | $ | — | $ | 1,795,125 | $ | — | $ | (4,721,923 | ) | $ | 888,091 | $ | (1,941,256 | ) | ||||||||||||||||||
| Options issued and vested - 2021 Plan | 6,750 | 6,750 | ||||||||||||||||||||||||||||||||||
| Shares issued to BoD & Mgmnt - 2010 Plan | 1,366,800 | 1,367 | 326,665 | 328,032 | ||||||||||||||||||||||||||||||||
| Shares issued to Consultants - 2010 Plan | 1,832,400 | 1,832 | 437,944 | 439,776 | ||||||||||||||||||||||||||||||||
| Subsidiary stock transactions | 450,000 | 450,000 | ||||||||||||||||||||||||||||||||||
| Net loss attributable to the non-controlling interest | (154,614 | ) | (154,614 | ) | ||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | (1,621,707 | ) | (1,621,707 | ) | ||||||||||||||||||||||||||||
| March 31, 2021 | 100,649,873 | $ | 100,650 | — | $ | — | $ | 2,566,484 | $ | — | $ | (6,343,630 | ) | $ | 1,183,477 | $ | (2,493,019 | ) | ||||||||||||||||||
| Options issued and vested - 2021 Plan | 7,650 | 7,650 | ||||||||||||||||||||||||||||||||||
| Shares issued to BoD & Mgmnt - 2021 Plan | 90,000 | 90 | 15,210 | 15,300 | ||||||||||||||||||||||||||||||||
| Shares issued to BoD & Mgmnt | 90,000 | 90 | 15,210 | 15,300 | ||||||||||||||||||||||||||||||||
| Shares issued to Consultants - 2021 Plan | 610,000 | 610 | 27,040 | 27,650 | ||||||||||||||||||||||||||||||||
| Shares issued to Consultants | 610,000 | 610 | 27,040 | 27,650 | ||||||||||||||||||||||||||||||||
| Shares issued to BoD & Mgmnt for conversion of debt | 7,591,261 | 7,591 | 979,273 | 986,864 | ||||||||||||||||||||||||||||||||
| Shares issued to Consultants for conversion of debt | 930,864 | 931 | 120,111 | 121,042 | ||||||||||||||||||||||||||||||||
| Forgiveness of related party | 1,020,323 | 1,020,323 | ||||||||||||||||||||||||||||||||||
| Subsidiary stock options | 450 | 450 | ||||||||||||||||||||||||||||||||||
| Subsidiary stock transactions | 150,000 | 150,000 | ||||||||||||||||||||||||||||||||||
| Net loss attributable to the non-controlling interest | (246,935 | ) | (246,935 | ) | ||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | (896,701 | ) | (896,701 | ) | ||||||||||||||||||||||||||||
| June 30, 2021 | 109,871,998 | $ | 109,872 | — | $ | — | $ | 4,736,091 | $ | — | $ | (7,240,331 | ) | $ | 1,086,992 | $ | (1,307,376 | ) | ||||||||||||||||||
| Shares | Amount | Shares | Amount | Common | Preferred | Deficit | Interest | Deficit | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Preferred Stock | Additional Paid in Capital | Accumulated | Non-controlling | Total | Common Stock | Preferred Stock | Additional Paid in Capital | Accumulated | Non-controlling | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Common | Preferred | Deficit | Interest | Equity | Shares | Amount | Shares | Amount | Common | Preferred | Deficit | Interest | Deficit | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 31, 2021 | 110,840,998 | $ | 110,841 | — | — | $ | 5,881,876 | $ | — | $ | (8,753,668 | ) | $ | (397,256 | ) | $ | (3,158,207 | ) | 110,840,998 | $ | 110,841 | — | — | $ | 5,881,876 | $ | — | $ | (8,753,668 | ) | $ | (397,256 | ) | $ | (3,158,207 | ) | ||||||||||||||||||||||||||||||||||||
| Issuance of Warrants | 42,250 | 42,250 | 42,250 | 42,250 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss attributable to the non-controlling interest | (51,116 | ) | (51,116 | ) | (51,116 | ) | (51,116 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | (912,270 | ) | (912,270 | ) | - | - | - | (912,270 | ) | (912,270 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| March 31, 2022 | 110,840,998 | $ | 110,841 | — | — | $ | 5,924,126 | $ | — | $ | (9,665,938 | ) | $ | (448,372 | ) | $ | (4,079,343 | ) | 110,840,998 | $ | 110,841 | — | — | $ | 5,924,126 | $ | — | $ | (9,665,938 | ) | $ | (448,372 | ) | $ | (4,079,343 | ) | ||||||||||||||||||||||||||||||||||||
| Beginning balance, value | 110,840,998 | $ | 110,841 | — | — | $ | 5,924,126 | $ | — | $ | (9,665,938 | ) | $ | (448,372 | ) | $ | (4,079,343 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Forfeiture of Stock Options – 2021 Plan | (47,267 | ) | (47,267 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 31, 2022 | 123,252,235 | $ | 123,252 | — | — | $ | 8,392,430 | $ | — | $ | (11,217,600 | ) | $ | (590,628 | ) | $ | (3,292,546 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock transactions | 250,000 | 250 | - | 79,750 | 80,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock subscription | (30,000 | ) | (30,000 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss attributable to the non-controlling interest | (11,691 | ) | (11,691 | ) | (32,894 | ) | (32,894 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | (622,349 | ) | (622,349 | ) | - | - | (785,083 | ) | (785,083 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| June 30, 2022 | 110,840,998 | $ | 110,841 | — | — | $ | 5,876,859 | $ | — | $ | (10,288,287 | ) | $ | (460,063 | ) | $ | (4,760,650 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ending balance, value | 110,840,998 | $ | 110,841 | — | — | $ | 5,876,859 | $ | — | $ | (10,288,287 | ) | $ | (460,063 | ) | $ | (4,760,650 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| March 31, 2023 | 123,502,235 | $ | 123,502 | — | — | $ | 8,442,180 | $ | — | $ | (12,002,683 | ) | $ | (623,522 | ) | $ | (4,060,523 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
See the accompanying notes to these unaudited condensed consolidated financial statements
| 3 |
BIOXYTRAN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIXTHREE MONTHS ENDED JUNE 30,MARCH 31, 2023 AND 2022 AND 2021
(UNAUDITED)
March 31, 2023 | March 31, 2022 | |||||||||||||||
| Six Months Ended | 3-Months Ended | |||||||||||||||
| June 30, 2022 | June 30, 2021 | March 31, 2023 | March 31, 2022 | |||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||||
| Net loss | $ | (1,597,426 | ) | $ | (2,919,957 | ) | $ | (817,977 | ) | $ | (963,386 | ) | ||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||||||
| Debt discount amortization, incl. issuance of warrants | 132,759 | 17,103 | — | 91,334 | ||||||||||||
| Amortization | 1,822 | — | ||||||||||||||
| Stock-based compensation | 69,123 | 825,608 | ||||||||||||||
| Amortization of IP | 514 | 911 | ||||||||||||||
| Stock-based compensation expense | 13,600 | 22,400 | ||||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||||
| Pre-paid expenses | — | (224,586 | ) | |||||||||||||
| Accounts payable and accrued expenses | (67,481 | ) | 217,851 | 351,473 | (108,176 | ) | ||||||||||
| Accounts payable related party | 531,000 | 674,290 | 265,500 | 265,506 | ||||||||||||
| Other short-term debt | — | — | ||||||||||||||
| Net cash used in operating activities | (930,203 | ) | (1,409,691 | ) | (186,890 | ) | (691,411 | ) | ||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||
| Investment in intangibles | (22,438 | ) | (8,954 | ) | (4,711 | ) | (22,323 | ) | ||||||||
| Net cash used in investing activities | (22,438 | ) | (8,954 | ) | (4,711 | ) | (22,323 | ) | ||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||
| Proceeds from subsidiary stock transactions | — | 600,000 | ||||||||||||||
| Proceeds from stock transactions | 50,000 | — | ||||||||||||||
| Proceeds from issuance of convertible notes payable | 1,380,960 | 1,165,000 | — | 1,380,960 | ||||||||||||
| Net cash provided by financing activities | 1,380,960 | 1,765,000 | 50,000 | 1,380,960 | ||||||||||||
| Net increase in cash | 428,319 | 346,355 | ||||||||||||||
| Net increase (decrease) in cash | (141,600 | ) | 667,226 | |||||||||||||
| Cash, beginning of period | 72,358 | 41,688 | 295,401 | 72,358 | ||||||||||||
| Cash, end of period | $ | 500,677 | $ | 388,043 | $ | 153,801 | $ | 739,584 | ||||||||
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||||||||||||||||
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||||||||||||||||
| Interest paid | $ | 69,900 | $ | — | $ | 52,425 | $ | — | ||||||||
| Income taxes paid | $ | — | $ | — | $ | — | $ | — | ||||||||
| NON-CASH INVESTING & FINANCING ACTIVITIES | ||||||||||||||||
| NON-CASH INVESTING & FINANCING ACTIVITIES: | ||||||||||||||||
| Issuance of warrants | $ | 42,250 | $ | — | $ | — | $ | 42,250 | ||||||||
| Forfeiture of stock options | 47,267 | $ | — | |||||||||||||
| Debt discount on convertible note | $ | 86,040 | $ | 102,747 | $ | — | $ | 86,040 | ||||||||
| Common shares issued for the conversion of principal and accrued interest | $ | — | $ | 1,107,906 | ||||||||||||
| Forgiveness of related party debt recorded to additional paid-in capital | $ | — | $ | 1,020,323 | ||||||||||||
See the accompanying notes to these unaudited condensed consolidated financial statements
| 4 |
BIOXYTRAN, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30,MARCH 31, 2023 AND 2022 AND 2021
(UNAUDITED)
NOTE 1 – BACKGROUND AND ORGANIZATION
Business Operations
Bioxytran, Inc. (the “Company”) is a clinical 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.
Our Subsidiary, Pharmalectin, Inc. (the “Subsidiary”) is a clinical stage pharmaceutical company focused on the development, manufacture and commercialization of therapeutic drugs designed to address conditions related to Covid-19.
Our Foreign Subsidiary, Pharmalectin (BVI), Inc. (the “Foreign Subsidiary”) is the owner and custodian of the Company’s Copyrights, Trade Marks and Patents.
Organization
Bioxytran, 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 authorized Commoncommon shares with a par value of $, and Preferred shares with a par value of $. On September 21, 2018, the Company went under a reorganization in the 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 authorized Commoncommon shares with a par value of $, and Preferred shares with a par value of $. There are currently outstanding shares. Collectively, our officers, our directors and one other stockholder own or exercise voting and investment control of (%) of our outstanding Common Stock.
Pharmalectin 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 authorized Common shares with a par value of $, and Preferred shares with a par value of $. The Subsidiary was founded under the name of Bioxytran “Bioxytran (DE)”. On April 29, 2020, the name was changed to Pharmalectin, Inc. There are currently issued and outstanding shares of the Subsidiary’s Common Stock;shares; Common shares (%) are held by Bioxytran and Common shares are held by an affiliate. An additional options are also held by an affiliate. The option agreement includes provisions for dilutive issuance and cash-less exercise. The beneficial ownership of the affiliate includes the Company’s management.are Mike Sheikh, Ola Soderquist and David Platt.
Pharmalectin BVI was organized on March 17, 2021 as a British Virgin Islands (BVI) Business Corporation with a BVI corporate taxing structure with authorized shares with a par value of $. There are currently outstanding shares held by the Company.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”), including the instructions to Form 10-Q and Regulation S-X. Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”), have been condensed or omitted from these statements pursuant to such rules and regulations and, accordingly, they do not include all the information and notes necessary for comprehensive financial statements and should be read in conjunction with our audited consolidated financial statements.
While the information presented in the accompanying financial statements is unaudited, it includes all adjustments which are, in the opinion of the management, necessary to present fairly the financial position, results of operations and cash flows for the periods presented in accordance with the accounting principles generally accepted in the United States of America (“US GAAP”). In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are statements prepared in accordance with US GAAP have been condensed or omitted. These financial statements should be read in conjunction with the Company’s December 31, 20212022 audited financial statements and notes that can be expected for the year ending December 31, 2022.
Principles of Consolidation
The accompanying unaudited condensed consolidated financial statements include the accounts of Bioxytran, Inc. a Nevada Corporation, its majority owned subsidiary, Pharmalectin, Inc. of Delaware (collectively, the “Company”), as well as its wholly owned subsidiary, Pharmalectin (BVI), Inc of British Virgin Islands (collectively, the “Company”).Islands. All intercompany accounts have been eliminated upon consolidation.
| 5 |
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of the significant accounting policies applied in the preparation of the accompanying financial statements follows.
Cash
For purposes of the Statement of Cash Flows, the Company considers all highly liquid debt instruments purchased with an original maturity date of three months or less to be cash equivalents.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of expenses during the reporting period. Significant estimates include the fair value of the Company’s stock, stock-based compensation, valuation of warrants, valuations in connection with convertible notes and the valuation allowance related to deferred tax assets. Actual results may differ from these estimates.
The Company computes earnings (loss) per share under Accounting Standards Codification subtopic 260-10, Earnings Per Share (“ASC 260-10”). Net loss per Commoncommon share is computed by dividing net loss by the weighted average number of shares of Common Stock outstanding during the year. Diluted earnings per share, if presented, would include the dilution that would occur upon the exercise or conversion of all potentially dilutive securities into Common Stock using the “treasury stock” and/or “if converted” methods as applicable.
At June 30, 2022,March 31, 2023, we would, based on the market price of $/share, be obligated to issue approximately shares of Common Stock upon conversion of the currently outstanding convertible notes (the “New Notes”) and shares upon exercise of outstandingthe warrants and shares upon exercise of outstanding options. For the New Notes, the shares total is based on $3,769,7202,314,377 of currently outstanding principal, and unpaid interest.
The 2021 1-year notes (the “2021 Notes” and collectively with the 2022 Notes (the “New Notes”), extended through October 31, 2022, have an interest rate of 6%6% and are convertible at the lower of (i) a fixed price of $0.13, or (ii) 85% of the closing price of any Qualified Financing, which consist of any fundraising whereby the Company receivesreceiving gross proceeds of not less than $500,000.
The Company measures the cost of services received from employees and non-employees in exchange for an award of equity instruments based on the fair value of the award on the grant date pursuant ASC 718. Stock-based compensation expense is recorded by the Company over the requisite service period, or vesting period, in the same expense classifications in the statements of operations, as if such amounts were paid in cash.
Accounting for subsidiary stock transactions
The Company accounts for subsidiary stock transactions in accordance with Opinions of the Accounting Principles Board 09 (APBO No. 9). In paragraph 28, this pronouncement excluded all adjustments from transactions in a company’s own stock “. . . from the determination of net income or the results of operations under all circumstances.” During the six months ended June 30 2021, the Company sold shares in its subsidiary Pharmalectin for a total amount of $600,000. Accordingly, APIC was adjusted with this amount for the six months ended June 30, 2021, no such transactions took place during the six months ended June 30, 2022.
Research and Development
The Company accounts for research and development costs in accordance with Accounting Standards Codification subtopic 730-10, Research and Development (“ASC 730-10”). Under ASC 730-10, all research and development costs must be charged to expense as incurred. Accordingly, internal research and development costs are expensed as incurred. Third-party research and development costs are expensed when the contracted work has been performed or as milestone results have been achieved as defined under the applicable agreement. Company-sponsored research and development costs related to both present and future products are expensed in the period incurred.
For the sixthree months ended June 30, 2022March 31, 2023 the Company incurred $283,266139,004 in research and development expenses, while during the sixthree months ended June 30, 2021March 31, 2022 the Company incurred $1,065,685240,125.
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Intangibles – Goodwill and Other
Valuation of intangibles are in accordance with ASC 350. Costs associated with the application and award of patents in the U.S. and various other countries are capitalized and amortized on a straight-line basis over the term of the patents as determined at award date, which varies depending on the pendency period of the application, generally approximating seventeen years. Capitalized patent costs, also referred to as patent prosecution costs, include internal legal labour,labor, professional legal fees, government filing fees and translation fees related to expanding the Company’s patent portfolio. Costs associated with the maintenance and annuity fees of patents are accounted for as prepaid assets at the time of payment and amortized over the shorter of the maintenance period or remaining life of the related patent.
Accrued Expenses
As part of the process of preparing our condensed consolidated financial statements, we are required to estimate accrued expenses. This process involves identifying services that third parties have performed on our behalf and estimating the level of service performed and the associated cost incurred on these services as at each balance sheet date in our consolidated financial statements. Examples of estimated accrued expenses include professional service fees, such as those arising from the services of attorneys and accountants and accrued payroll expenses. In connection with these service fees, our estimates are most affected by our understanding of the status and timing of services provided relative to the actual services incurred by the service providers. In the event that we do not identify certain costs that have been incurred or we under- or over-estimate the level of services or costs of such services, our reported expenses for a reporting period could be understated or overstated. The date on which certain services commence, the level of services performed on or before a given date, and the cost of services are often subject to our judgment. We make these judgments based upon the facts and circumstances known to us in accordance with accounting principles generally accepted in the U.S.
Warrants
The Company has issued Common Stock warrants in connection with the execution of certain equity and debt financings. The fair value of warrants is determined using the Black-Scholes option-pricing model using assumptions regarding volatility of our Commoncommon share price, remaining life of the warrant, and risk-free interest rates at each period end.
Fair Value
Accounting Standards Codification subtopic 825-10, Financial Instruments (“ASC 825-10”) requires disclosure of the fair value of certain financial instruments. The carrying value of cash and cash equivalents, accounts payable and accrued liabilities, and short-term borrowings, as reflected in the balance sheets, approximate fair value because of the short-term maturity of these instruments. All other significant financial assets, financial liabilities and equity instruments of the Company are either recognized or disclosed in the financial statements together with other information relevant for making a reasonable assessment of future cash flows, interest rate risk and credit risk. Where practicable the fair values of financial assets and financial liabilities have been determined and disclosed; otherwise only available information pertinent to fair value has been disclosed.
The Company follows Accounting Standards Codification subtopic 820-10, Fair Value Measurements and Disclosures (“ASC 820-10”) and Accounting Standards Codification subtopic 825-10, Financial Instruments (“ASC 825-10”), which permits entities to choose to measure many financial instruments and certain other items at fair value.
Recent Accounting Pronouncements
In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2022 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company adopted ASU 2020-06 effective January 1, 2021. The adoption of ASU 2020-06 did not have an impact on the Company’s financial statements.
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed interim financial statements.
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NOTE 3 – GOING CONCERN AND MANAGEMENT’S LIQUIDITY PLANS
As at June 30, 2022,March 31, 2023, the Company had cash of $500,677153,801 and a negative working capital of $4,828,1984,140,255. The Company has not yet generated any revenues, from operations and has incurred cumulative net losses of $10,288,28712,002,683. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.
During the sixthree months ended June 30,March 31, 2023, the Company raised a net of $50,000 in cash proceeds from equity. During the same period in 2022, the Company raised a net of $1,380,960 in cash proceeds from the issuance of convertible notes. During the same period in 2021, the Company raised a net of $1,165,000 in cash proceeds from the issuance of convertible notes and $600,000 from the issuance of Common Stock of our subsidiary. 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 2022June, 2023 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’s management does not know the full extent or foresee the impact COVID-19 has had on our business or our operations or its ability to carry out our plans. We will continue to monitor and follow this situation closely.
Accordingly, the accompanying unaudited condensed 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 unaudited condensed consolidated financial statements do not necessarily purport to represent realizable or settlement values. The unaudited condensed consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty.
NOTE 4 - RELATED PARTY TRANSACTIONS
The Company hold License Agreements (the “License/s” or “Agreement/s”) for a medical device (license obtained in 2019) and a compound (license obtained in 2021), with two affiliated companies where in the officers of the Company hold a majority interest. The products were developed prior to the establishment of Bioxytran. The yearly maintenance fee for each license amount to $5,000. During the three months ended March 31, 2023 the affiliates were paid $5,000 each. During the same period in 2022, there was $20,720 in transactions with affiliates as the Company also reimbursed the affiliates for the legal and administrative costs surrounding the establishment of the Licenses.
NOTE 5 - INTANGIBLES
Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. NaNNo impairment charges were recorded for the six3 months ended June 30, 2022March 31, 2023 and the year ended December 31, 2021.2022.
Amortization of capitalized patent costs associated with the application and award of patents in the U.S. and various other countries are capitalized and amortized on a straight-line basis over the term of the patents as determined at the award date, which varies depending on the pendency period of the application, generally approximating twenty years. The current patent applications are still on-going, and are therefore not yet subject to amortization.
SCHEDULE OF INTANGIBLES
| Estimated Life (years) | June 30, 2022 | December 31, 2021 | Estimated Life (years) | March 31, 2023 | December 31, 2022 | |||||||||||||||||
| Capitalized patent costs | 20 | $ | 69,370 | $ | 46,932 | 20 | $ | 83,890 | $ | 79,179 | ||||||||||||
| Accumulated amortization | (1,822 | ) | — | (4,158 | ) | 3,644 | ||||||||||||||||
| Intangible assets, net | $ | 67,548 | $ | 46,932 | $ | 79,732 | $ | 75,535 | ||||||||||||||
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NOTE 56 – ACCOUNTS PAYABLES AND ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
On June 30, 2022,March 31, 2023, there was $1,062,000975,227 in accounts payable to related parties in the form of payroll and accrued expenses and $ in un-issued shares liability related party. On December 31, 20212022 there was $531,000709,727 in accounts payable to related parties.parties and $ in un-issued shares liability related party.
The following table represents the major components of accounts payables and accrued expenses and other current liabilities at June 30, 2022March 31, 2023 and at December 31, 2021:2022:
SCHEDULE OF ACCOUNTS PAYABLES AND ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
| June 30, 2022 | December 31, 2021 | March 31, 2023 | December 31, 2022 | |||||||||||||
| Accounts payable related party (1) | $ | 1,062,000 | $ | 531,000 | $ | 975,227 | $ | 709,727 | ||||||||
| Professional fees | 121,893 | 375,371 | 656,963 | 393,085 | ||||||||||||
| Other | 2,310 | — | ||||||||||||||
| Interest | 122,300 | 85,685 | 149,377 | 134,581 | ||||||||||||
| Payroll taxes | 47,832 | 32,010 | 45,887 | 40,182 | ||||||||||||
| Pension/401K | 262,500 | 131,250 | 246,182 | 180,557 | ||||||||||||
| Other | 2,460 | 990 | ||||||||||||||
| Un-issued share liability, related party (2) | 51,150 | 38,400 | ||||||||||||||
| Un-issued share liability, consultant | 60,150 | — | 1,810 | 960 | ||||||||||||
| Un-issued share liability, related party (2) | 56,240 | — | ||||||||||||||
| Convertible note payable | 3,593,650 | 2,122,181 | 2,165,000 | 2,165,000 | ||||||||||||
| Total | $ | 5,328,875 | $ | 3,277,497 | $ | 4,294,056 | $ | 3,663,482 | ||||||||
| (1) | $ |
| (2) | There are currently shares of Common Stock awarded but not issued to four Board Members in the first |
NOTE 67 – CONVERTIBLE NOTES PAYABLE
Private Placement, 2021 Notes
Around May 3,April 29, 2021, we entered into four (4)nine (9) Securities Purchase Agreements (the “2021 SPA’s”), under which we agreed to sell convertible promissory notes (the “2021 Notes”), in an aggregate principal amount of $2,165,0003,266,845 with 6% interest.interest, whereof $1,000,000 were contributed in form of cancellation of third-party notes, while were issued in compensation for accrued compensation, $981,466 to our three officers and $120,380 to two consultants.
At any time after the issue date of the Notes, The Holders of the Notes, (the “2021 Holders”), have the option to convert all or any part of the outstanding and unpaid principal amount and accrued and unpaid interest of the 2021 Notes into shares of our Common Stock at the Conversion Price. The “Conversion Price” will be the lesser of (i) $.13 per share or (ii) 85% of the closing price of Any Qualified Financing, which consists of any fundraising whereby the Company receives gross proceeds of not less than $500,000.
The variable conversion rate component requires that the 2021 Notes to 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 2021 Notes. No such recording of a premium was required as the discounted “if-converted” rate of $ per share, was identical to fair market value of the Company’s stock on the 2021 Notes date of issuance.
The 2021 Holders are limited to holding a total of 4.99% of our issued and outstanding Common Stock at any one time.
The Common Stock underlying the 2021 Notes, when issued, will bear a restrictive legend and hashave a 180-day lock-up period. They are currently eligible
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On June 4, 2021, shares of Common Stock were issued as a result of conversion of accrued interest and principal for resale under Rule 144.five convertible notes for a total of $1,101,846, or $0.13/share. To avoid dilution of the company’s stock of these shares held by our officers were returned to treasury on November 20, 2021, while the original debt consisting of accrued salary was forfeited.
SCHEDULE OF CONVERTIBLE CONVERSION OF ACCRUED INTEREST AND PRINCIPAL
| Name | Principal Converted | Accrued interest converted | No. of shares issued | |||||||||||
| Private Placement, 2021 Notes issued to Officers | (1) | $ | 981,466 | $ | 5,398 | 7,591,261 | ||||||||
| Private Placement, 2021 Notes issued to consultants | 120,380 | 662 | 930,864 | |||||||||||
| $ | 1,101,846 | $ | 6,060 | 8,522,125 | ||||||||||
| (1) | Net cash received for these notes were $1,380,960, after a Debt Discount of $86,040 was paid to the sole Placement Agent: WallachBeth Capital, LLC (Member FINRA / SIPC). |
If the remainder of the 2021 Notes are converted prior to us paying off such note, it would lead to substantial dilution to our shareholders as a result of the conversion discounted forapplicable to the 2021 Notes. There can be no assurance that there will be any funds available to pay offof the 2021 Notes, or if available, on terms that will be acceptable to us or our shareholders.Notes. If we fail to obtain such additional financing on a timely basis, the 2021 Holders may convert the 2021 Notes and sell the underlying shares, which may result in significant dilution to shareholders due to the conversion discount, as well as a significant decrease in our stock price.
Convertible notes payable and interest payable consist of the following at March 31, 2023, and December 31, 2022:
SCHEDULE OF CONVERTIBLE NOTES PAYABLE
| March 31, 2023 | December 31, 2022 | |||||||
| Principal balance (1), (2) | $ | 2,165,000 | $ | 2,165,000 | ||||
| Interest Payable | 149,377 | 134,581 | ||||||
| Outstanding, net of debt discount and premium | $ | 2,314,377 | $ | 2,299,581 | ||||
| (1) | Net cash received for these notes were $1,045,150, after a Debt Discount of $119,850 was paid to the sole Placement Agent: WallachBeth Capital, LLC (Member FINRA / SIPC). |
| (2) | $2 million of principal, accrued interest and default penalties for notes issued prior to 2021, where settled by a third party in exchange for us issuing to them a note in the amount of $1 million. |
Private Placement, 2022 Notes converted into Common Stock
In January, 2022, we entered into thirty-four (34) Securities Purchase Agreements (the “2022 SPA’s”), with accredited investors, under which we agreed to sell the Notes, in an aggregate principal amount of $1,467,000 with 6% interest (the “2022 Notes”) to the holders of the 2022 Notes (the “2022 Holders”).
At any time after the issue date of the 2022 Notes the 2022 Holders have the option to convert all or any part of the outstanding and unpaid principal amount and accrued and unpaid interest of the Notes into shares of our Common Stock at the Conversion Price. The “Conversion Price” is set to $0.25 per share.
The 2022 Holders are limited to holding a total of 4.99% of our issued and outstanding Common Stock at any one time. The Common Stock underlying the 2022 Notes, when issued, bear a restrictive legend and are currently eligible for resale under Rule 144.
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If the 2022 Notes are converted prior to us paying off such note, it would lead to dilution to our shareholders as a result of the conversion discounted for the 2022 Notes. There can be no assurance that there will be any funds available to pay of the 2022 Notes, or if available, on terms that will be acceptable to us or our shareholders. If we fail to obtain such additional financing on a timely basis, the 2022 Holders may convert the 2022 Notes and sell the underlying shares, which may result in dilution if converted, as well as a decrease in our stock price.
The notes principal and accrued interest were fully converted into shares of Common Stock on August 31, 2022.
| Name | Principal due June 30, 2022 | Accrued interest June 30, 2022 | Total amount due June 30, 2022 | |||||||||||||
| Private Placement, 2021 Notes | (1) | $ | 2,165,000 | $ | 81,063 | 2,246,063 | ||||||||||
| Private Placement, 2022 Notes | (2) | 1,467,000 | 41,237 | 1,508,237 | ||||||||||||
| $ | 3,632,000 | $ | 122,300 | 3,754,300 | ||||||||||||
| Name | Principal Converted | Accrued interest converted | No. of shares issued | |||||||||||
| Private Placement, 2022 Notes | (1) | $ | 1,467,000 | $ | 53,371 | 6,081,484 | ||||||||
| $ | 1,467,000 | $ | 53,371 | 6,081,484 | ||||||||||
| (1) | ||
| Net cash received for these notes were $1,380,960, after a Debt Discount of $86,040 was paid to the sole Placement Agent: WallachBeth Capital, LLC (Member FINRA / SIPC). |
At December 31, 2021 the outstanding convertible notes were as follows:
| Name | Principal due December 31, 2021 | Accrued interest December 31, 2021 | Total amount due December 31, 2021 | |||||||||||||
| Notes sold in exchange for cash | (1) | $ | 1,165,000 | $ | 46,108 | 1,211,108 | ||||||||||
| Note issued in exchange for defaulted Old Notes | (2) | 1,000,000 | 39,577 | 1,039,577 | ||||||||||||
| $ | 2,165,000 | $ | 85,685 | 2,250,685 | ||||||||||||
Convertible notes payable consists of the following at June 30, 2022 and December 31, 2021:
SCHEDULE OF CONVERTIBLE NOTES PAYABLE
| June 30, 2022 | December 31, 2021 | |||||||
| Principal balance | $ | 3,632,000 | $ | 2,165,000 | ||||
| Unamortized debt discount | (38,350 | ) | (42,819 | ) | ||||
| Outstanding, net of debt discount and premium | $ | 3,593,650 | $ | 2,122,181 | ||||
NOTE 78 –STOCKHOLDERS’ EQUITY
The Company is authorized to issue shares of Common Stock, and shares of Preferred Stock.
Preferred stock
As of June 30, 2022 and at DecemberMarch 31, 2021, 2023, preferred shares have been designated ornor issued.
Common Stockstock
On June 4, 2021, shares of Common Stock were issued to management as a result of conversion of accrued interest and principal for three convertible notes for a total of $986,864, or $0.13/share, in reliance on an exemption under Section 4(2)(a).
On June 4, 2021, shares of Common Stock were issued to management as a result of conversion of accrued interest and principal for two convertible notes for a total of $121,042, or $0.13/share, in reliance on an exemption under Section 4(2)(a).
For the six months ending June 30, 2021, shares were awarded under the 2010 and the 2021 Stock Plans for a total value of $810,758, or an average price of $0.13/share.
No shares have been issued in six months ended June 30, 2022.
As at June 30,January 1, 2022, and at DecemberMarch 31, 20212022 the Company hashad shares of Common Stockcommon stock issued and outstanding.
As at January 1, 2023 there were shares of common stock issued and outstanding.
On January 4, 2023 the Company issued shares of Common Stock against $30,000, or $/share, shown as stock subscription in the December 31, 2022 stockholders’ equity statement.
On February 10, 2023 the Company issued shares of Common Stock against $50,000, or $/share
As at March 31, 2023, the Company has shares of common stock issued and outstanding.
Common Stock Warrants
For the six3 months ended June 30,March 31, 2023 the Company did not issue any Warrants. For the 3 months ended March 31, 2022, in connection with the issuance of the convertible notes, the Company issued 264,060 5-year warrants exercisable at $0.25/share, with a fair value ofvalued at $, based on Black and Scholes Option Pricing Model, for a total value of $42,250.The warrant agreements include provisions for cash-less exercise.
For the six months ended June 30, 2021 the Company issued no warrants.
SCHEDULE OF STOCK WARRANTS VALUATION ASSUMPTIONS
| March 31, 2022 | ||||
| Risk-free interest rate | ||||
| % | ||||
| Expected dividend yield | % | |||
| Volatility factor (monthly) | % | |||
| Expected life of warrant | years | |||
The following table summarizes the Company’s Common Stock warrant activity for the six months ended June 30, 2022 and 2021:
SCHEDULE OF WARRANT ACTIVITY
| Number of Warrants * | Weighted Average Exercise Price | Weighted- Average Remaining Expected Term | |||||||||||
| Outstanding as at December 31, 2021 | 272,000 | $ | 2.00 | ||||||||||
| Granted | — | — | |||||||||||
| Exercised | — | — | — | ||||||||||
| Forfeited/Cancelled | — | — | — | ||||||||||
| Outstanding as at June 30, 2021 | 272,000 | 2.00 | |||||||||||
| Outstanding as at December 31, 2022 | 272,000 | $ | 2.00 | ||||||||||
| Granted | 264,060 | 0.25 | |||||||||||
| Exercised | — | — | — | ||||||||||
| Forfeited/Cancelled | — | — | — | ||||||||||
| Outstanding as at June 30, 2022 | 536,060 | $ | 1.14 | ||||||||||
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The following table summarizes the Company’s common stock warrant activity for the 3 months ended March 31, 2023 and 2022:
SCHEDULE OF WARRANT ACTIVITY
| Number of Warrants* | Weighted Average Exercise Price | Weighted- Average Remaining Expected Term | ||||||||||
| Outstanding as at January 1, 2022 | 272,000 | $ | 2.00 | |||||||||
| Granted | 264,030 | 0.26 | ||||||||||
| Exercised | — | — | — | |||||||||
| Forfeited/Canceled | — | — | — | |||||||||
| Outstanding as at March 31, 2022 | 536,030 | 1.14 | ||||||||||
| Outstanding as at January 1, 2023 | 542,030 | $ | 0.42 | |||||||||
| Granted | — | — | — | |||||||||
| Exercised | — | — | — | |||||||||
| Forfeited/Canceled | — | — | — | |||||||||
| Outstanding as at March 31, 2023 | 542,030 | $ | 1.14 | |||||||||
| * | The warrant agreements issued in 2019 for a total of 50,000 warrants include provisions for dilutive issuance and cash-less exercise. If exercised at December 31, 2022 the provisions would have resulted in an issuance of shares at an average conversion price of $0.09, or shares in a cash-less exercise. In order to mitigate the Company’s risk an administrative hold has been placed on one shareholder’s stock in the event of future exercise. |
The following table summarizes information about stock warrants that are vested or expected to vest at June 30, 2022 with a market price of $ at June 30, 2022:March 31, 2023:
SCHEDULE OF WARRANT OUTSTANDING AND EXERCISABLE WARRANTS
| Warrants Outstanding | Exercisable Warrants | |||||||||||||||||||||||||||||
Number of Warrants | Weighted Average Exercise Price Per Share | Weighted Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value | Number of Warrants | Weighted Average Exercise Price Per Share | Weighted Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value | |||||||||||||||||||||||
| 264,060 | 0.25 | $ | 18,484 | 264,060 | 0.25 | $ | 18,484 | |||||||||||||||||||||||
| 272,000 | $ | 2.00 | $ | — | 272,000 | $ | 2.00 | $ | — | |||||||||||||||||||||
| 536,060 | $ | 1.14 | $ | 18,484 | 536,060 | $ | 1.14 | $ | 18,484 | |||||||||||||||||||||
| Warrants Outstanding | Exercisable Warrants | |||||||||||||||||||||||||||||
| Number of Warrants | Weighted Average Exercise Price Per Share | Weighted Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value | Number of Warrants | Weighted Average Exercise Price Per Share | Weighted Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value | |||||||||||||||||||||||
| 492,030 | 0.26 | $ | 81,184 | 492,030 | 0.26 | $ | 81,184 | |||||||||||||||||||||||
| 50,000 | $ | 2.00 | $ | — | 50,000 | $ | 2.00 | $ | — | |||||||||||||||||||||
| 542,030 | $ | 1.14 | $ | 81,184 | 542,030 | $ | 1.14 | $ | 81,184 | |||||||||||||||||||||
SCHEDULE OF NONVESTED WARRANTS
Number of Warrants | Weighted- Average Grant-Date Fair Value | ||||||||
| Non-vested as at December 31, 2021 | — | $ | — | ||||||
| Granted | 264,060 | 0.25 | |||||||
| Forfeited | — | — | |||||||
| Vested | 264,060 | 0.25 | |||||||
| Non-vested as at June 30, 2022 | — | $ | — | ||||||
The weighted-average remaining contractual life for warrants exercisable at June 30, 2022 is 3.5 years. The aggregate intrinsic value for fully vested, exercisable warrants was $ at June 30, 2022.March 31, 2022:
Sales of Shares in SubsidiarySCHEDULE OF NON-VESTED WARRANTS
For the six months ended June 30, 2022 there were shares sold in the Company’s Subsidiary, Pharmalectin, Inc.. For the six months ended June 30, 2021 there were shares sold in the Company’s Subsidiary, Pharmalectin, Inc. for a total of $600,000.
| Number of Warrants | Weighted-Average Grant-Date Fair Value | |||||||
| Non-vested as at January 1, 2022 | — | $ | — | |||||
| Granted | 264,030 | 0.25 | ||||||
| Forfeited | — | — | ||||||
| Vested | — | — | ||||||
| Non-vested as at March 31, 2022 | 264,030 | $ | 0.25 | |||||
On January 19, 2010, the Company adopted a stock option plan entitled the “2010“The 2010 Stock Plan” (the “:2010 Plan”)(2010 Plan) under which the Company may grant Options to Purchase Stock, Stock Awards or Stock Appreciation Rights in an amount up to 15% of the number of issued and outstanding shares of the Company’s Common Stock,common stock, automatically adjusted on January 1 each year. Under the terms of the 2010 Stock Plan,stock plans, the Board of Directors shall specify the exercise price and vesting period of each stock option on the grant date. Vesting of the options is typically immediate and the 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.
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As at January 18, 2021, the 2010 Stock Planplan was depletedretired and retired.depleted. On January 19, 2021, the Board of Directors adopted the “2021“The 2021 Stock Plan” (the “2021 Plan”)(2021 Plan) with the same terms as the 2010 Plan. As at June 30, 2022, options and shares have been awarded from the 2021 Plan.
Shares Awarded and Issued under the 2010 Plan:
On January 1, 2021 the Company granted shares, with a fair market value of $/share at the time of award, to a Medical Advisory Board Member for her contribution in the Company’s Advisory Board, for a total of $.
On January 15, 2021 the Company granted shares of Common Stock valued at $/share, equally divided to shares/each to fourteen of the Company’s Managers, Board- and Medical Advisory Board members, as well as to indispensable Consultants currently working on the clinical trial submissions with the FDA, for a total value of $.
Shares Awarded and Issued under the 2021 Plan:
On April 1, 2021 the Company granted shares, with a fair market value of $/share at the time of award, to a Medical Advisory Board Member for her contribution in the Company’s Advisory Board, for a total of $.
On April 1, 2021 the Company granted shares with a fair market value of $/share to three members of the Audit Committee as compensation for their contribution in the Audit Committee, for a total of $.
On April 22, 2021 the Company granted shares with a fair market value of $/share at the time of award, to a consultant for assistance with the Company’s PR work, for a total of $.
On June 15, 2021 the Company granted shares with a fair market value of $/share at the time of award, to a consultant for assistance with the Company’s PR work, for a total of $.
Number of Shares | Fair Value per Share | Weighted Average Market Value per Share | ||||||||||
| Shares Issued as of December 31, 2020 | 11,002,000 | $ – | $ | 0.10 | ||||||||
| Shares Issued | 3,899,200 | – | 0.21 | |||||||||
| Shares Issued as of June 30, 2021 | 15,001,200 | $ – | $ | 0.13 | ||||||||
| Shares Issued as of December 31, 2021 | 18,706,909 | $ – | $ | 0.088 | ||||||||
| Shares Issued | — | — | ||||||||||
| Shares Issued as of June 30, 2022 | 18,706,909 | $ – | $ | 0.088 | ||||||||
Number of Shares | Fair Value per Share | Weighted Average Market Value per Share | ||||||||||
| Shares Issued as of January 1, 2022 | 18,706,909 | – | 0.088 | |||||||||
| Shares Issued | — | — | — | |||||||||
| Shares Issued as of March 31, 2022 | 18,706,909 | $ | – | $ | 0.088 | |||||||
| Shares Issued as of January 1, 2023 | 19,382,909 | – | 0.095 | |||||||||
| Shares Issued | — | — | — | |||||||||
| Shares Issued as of March 31, 2023 | 19,382,909 | $ | – | $ | 0.095 | |||||||
For the sixthree months ended June 30,March 31, 2023 and 2022, the Company recorded stock-based compensation expense of $ and $, respectively, in connection with share-based payment awards. For the six months ended June 30, 2021, the Company has not issued any shares.
Shares awarded, but not yet issued, under the 2021 Stock Plan:Plan for the three months ended March 31, 2023 and 2022:
On January 10, 2022 the Company granted shares of Common Stock to four Board Members in reward of their attendance at Board and Committee meetings during the fourth quarter of 2021. The total fair market value at the time of the award was $, or $/share.
On February 18, 2022January 1, 2023 the Company granted shares of Common Stock to two Consultantsfour Board Members in reward of their assistance for the product developmentattendance at Board and our clinical trials in India. The total fair market value at the time of the award was $, or $/share.
On April 1, 2022 the Company granted shares to a Medical Advisory Board Member for her contribution to the CompanyCommittee meetings during the firstfourth quarter of 2022. The total fair market value at the time of the award was $, or $/share.
On AprilJanuary 1, 20222023 the Company granted shares of Common Stock to an Advisory Board Members in compensation for the fourth quarter of 2022. The total fair market value at the time of the award was $, or $/share.
On March 31, 2023 the Company granted shares of Common Stock to four Board Members in reward of their attendance at Board and Committee meetings during the first quarter of 2022.2023. The total fair market value at the time of the award was $, or $/share.
On April 11, 2022March 31, 2023 the Company granted shares of Common Stock to three Consultantsan Advisory Board Members in compensation for the managementfirst quarter of our clinical trials in India.2023. The total fair market value at the time of the award was $, or $/share.
Stock options granted and vested 2021 Plan:
On February 1, 2021There were no stock options granted the Company granted three-year options immediately vested at an exercise price of $ to an Advisory Board Member for his contribution in the Company’s Advisory Board. The options total fair value at the time of award was $.
On May 1, 2021 the Company granted three-year options immediately vested at an exercise price of $ 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 $.three months ended March 31, 2023 and 2022.
| 13 |
There were no stock options issued in the six months ended June 30, 2022.
SCHEDULE OF STOCK OPTIONS VALUATION ASSUMPTIONS
For the six months ended June 30, 2022 there were no stock options awarded. However, were forfeited through expiration. For the six months ended June 30, 2021, the Company recorded compensation expense of $ in connection with awarded stock options. As at June 30, 2022, there was no unrecognized compensation expense related to non-vested stock option awards.
Number of Options | Exercise Price per Share | Weighted Average Exercise Price per Share | Number of Options | Exercise Price per Share | Weighted Average Exercise Price per Share | |||||||||||||||||||
| Outstanding as of December 31, 2020 | 533,000 | $ - | $ | |||||||||||||||||||||
| Outstanding as of January 1, 2022 | 668,000 | $ | - | $ | ||||||||||||||||||||
| Granted | 90,000 | - | — | — | ||||||||||||||||||||
| Exercised | — | — | — | — | ||||||||||||||||||||
| Options forfeited/cancelled | — | — | — | — | ||||||||||||||||||||
| Outstanding as of June 30, 2021 | 623,000 | $ - | $ | |||||||||||||||||||||
| Outstanding as of March 31, 2022 | 668,000 | $ | - | $ | ||||||||||||||||||||
| Outstanding as of December 31, 2021 | 668,000 | $ - | $ | |||||||||||||||||||||
| Outstanding as of January 1, 2023 | 524,000 | $ | - | $ | ||||||||||||||||||||
| Granted | — | — | — | — | ||||||||||||||||||||
| Exercised | — | — | — | — | ||||||||||||||||||||
| Options forfeited/cancelled | 48,000 | – | (48,000 | ) | – | |||||||||||||||||||
| Outstanding as of June 30, 2022 | 620,000 | $ - | $ | |||||||||||||||||||||
| Outstanding as of March 31, 2023 | 476,000 | $ | - | $ | ||||||||||||||||||||
SCHEDULE OF STOCK OPTION VESTED
| Options Outstanding | Exercisable Options | Options Outstanding | Exercisable Options | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise Price | Exercise Price | Number of Options | Weighted Average Exercise Price Per Share | Weighted Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value | Number of Options | Weighted Average Exercise Price Per Share | Weighted Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value | Exercise Price | Number of Options | Weighted Average Exercise Price Per Share | Weighted Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value | Number of Options | Weighted Average Exercise Price Per Share | Weighted Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value | ||||||||||||||||||||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| $ - | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| $ | - | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
There were no granted options granted, nor any options issued between June 30, 2022in the period ended March 31, 2023 and December 31, 2021.2022:
The weighted-average remaining estimated life for options exercisable at June 30, 2022March 31, 2023 is years.
The aggregate intrinsic value for fully vested, exercisable options was $ at June 30, 2022.March 31, 2023 and at December 31, 2022 was $. The actual tax benefit realized from stock option exercises for the three months ended at June 30,March 31, 2023 and 2022 and 2021 was $0as no options were exercised.
As at June 30, 2022March 31, 2023 the Company has options or stock awards available for grant under the 2021 Plan.
| 14 |
NOTE 910 – NON-CONTROLLING INTEREST
SCHEDULE OF NON CONTROLLING INTEREST
| June 30, 2022 | December 31, 2021 | March 31, 2023 | December 31, 2022 | |||||||||||||
| Net loss Subsidiary | (265,560 | ) | (2,089,253 | ) | (139,004 | ) | (817,151 | ) | ||||||||
| Net loss attributable to the non-controlling interest | 62,807 | 496,297 | 32,894 | 193,372 | ||||||||||||
| Net loss affecting Bioxytran | (202,753 | ) | (1,592,956 | ) | (106,110 | ) | (623,780 | ) | ||||||||
| Accumulated losses | (3,045,565 | ) | (2,777,135 | ) | (3,733,291 | ) | (3,594,287 | ) | ||||||||
| Accumulated losses attributable to the non-controlling interest | 621,014 | 558,206 | 784,472 | 751,578 | ||||||||||||
| Accumulated losses affecting Bioxytran | (2,424,551 | ) | (2,218,929 | ) | ||||||||||||
| Accumulated losses Bioxytran | (2,948,819 | ) | (2,842,709 | ) | ||||||||||||
| Net deficit non-controlling interest | (460,063 | ) | (397,256 | ) | ||||||||||||
| Net equity non-controlling interest | (623,522 | ) | (590,628 | ) | ||||||||||||
As at June 30, 2022March 31, 2023 and at December 31, 20212022 there are issued and outstanding shares; Common shares () are held by Bioxytran and Common shares are held by an affiliate. Further, anAn additional options exercisable at $are also held by an affiliate. The option agreements include provisions for dilutive issuance and cash-less exercise. If exercised at June 30, 2022 the provisions would have resulted in an issuance of shares at an average conversion-price of $, or shares in a cash-less exercise.
NOTE 1011 – COMMITMENTS AND CONTINGENCIES
Employment contracts
The Company’s executive officersOur Executive Officers have entered into employment contracts and confidentiality, non-disclosure and assignment of invention agreements. The employment agreementsmost substantial provisions include;
| ● | Compensation of three (3) times the employee’s annual salary upon the Termination Date and any target bonus earned, or if termination occurs within 12 months of a change in control, then the terminated employee shall receive two (2) times the employee’s annual salary and any target bonus earned. | |
| ● | Continued coverage under any health, medical, dental or vision program or policy, in which they were eligible to participate at the time of employment termination, for 12 months. | |
| ● | Provide outplacement services through one or more outside firms of the employee’s choosing up to an aggregate of $50,000. |
There are no other arrangements or plans in which we provide for the payment of $100,000 in severance upon termination of employment without cause and make no provisionspension, retirement or similar benefits for any payment upon a change of control.Executive Officers or Directors.
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.
NOTE 1112 – SUBSEQUENT EVENTS
The Company has evaluated events from June 30, 2022March 31, 2023 through the date the financial statements were issued. and did not, other than what is disclosed in the below, identify any further subsequentThe events requiring disclosure.disclosure for this period are as follows;
GeneralExtension of Maturity of Convertible Notes
On April 28 the Company extended the Maturity of a $1,000,000 convertible note to August 31, 2023
On May 10, 2023 the Company extended the Maturity of three (3) convertible notes for a value of $1,165,000 to April 30, 2024. The interest rate was renegotiated to 10%, from the former 6%, and Administrative Expensesthe Company received the right to repurchase the note at 120% of face-value plus interest, after 60 days of the extension.
For the brokerage of the deal, our Investment Banker was compensated with 800,0005-year warrants exercisable at $/share, valued at $, based on Black and Scholes Option Pricing Model, for a total value of $348,637.
| 15 |
Common Stock
Forfeited salaries and benefitsShares issued in private placement
Cash Investment
On August 1, 2022April 18, 2023 the Company issued shares of Common Stock against $25,000, or $/share.
Debt Restructure
On April 14, 2023, the transactions set forth below were approved by the Company’s Management forfeitedBoard of Directors with an objective to reduce the majorityCompany’s debt at a price equal to the Company’s Private Placement Memorandum (“PPM”) currently in place, or $/share.
shares of itsCommon Stock were issued against supplier invoices amounting to $44,050.
shares of Common Stock were issued to offset an affiliate against invoices paid on behalf of the Company and accrued salaries and benefitsto our Officers, for a total value of $1,273,0002,164,340.
Stockholder’s Equity
Conversion of Notes into Common Stock
In August, 2022 the principal of $25,000 and accrued interest of $792 was converted into shares of Common Stock from a 2022 Notes holder.
Shares awarded, but not yet issued,Awarded under the 2021 Stock Plan:
On July 1, 2022April 18, 2023 the Company grantedissued shares of Common Stock, awarded in January 2023, to a Medical Advisoryfour Board Member for his contribution to the CompanyMembers in reward of their attendance at Board and Committee meetings during the secondfourth quarter of 2022. The total fair market value at the time of the award was $, or $/share.
On July 1, 2022April 18, 2023 the Company grantedissued shares of Common Stock, awarded in January 2023, to fouran Advisory Board Members in reward of their attendance at Board and Committee meetings duringcompensation for the secondfourth quarter of 2022. The total fair market value at the time of the award was $, or $/share.
Shares issued, but earlier awarded, under the 2021 Stock Plan:
On August 3, 2022April 18, 2023 the Company issued shares already accounted for as un-issued share liability,of Common Stock, awarded in January 2023, to consultants and to members of the Scientific and Medical Advisorythree Board Members awarded byin reward of their attendance at Board and Committee meetings during the Company during 2022.first quarter of 2023. The total fair market value at the time of the award was $, or an average price of $/share.
On August 3, 2022April 18, 2023 the Company issued shares already accounted for as un-issued share liability,of Common Stock, awarded in January 2023, to fouran Advisory Board Members awarded byin compensation for the Company during 2022.first quarter of 2023. The total fair market value at the time of the award was $, or an average price of $/share.
Warrants issued:
On July 7, 2022 in connection with an analyst agreement dated April 9, 2022, the Company issued 200,0005-year warrants exercisable at $0.25/share, with a fair value of $0.30/share, based on Black and Scholes Option Pricing Model, for a total of $60,600. The warrant agreement includes provisions for cash-less exercise.
Stock options forfeited under the 2021 Stock Plan:
On August 1, 2022, options for a total value of $ were forfeited through expiration and return to the stock plan.Management sees no further subsequent events requiring disclosure.
Item 2. Management’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, the audited financial statements and the notes thereto for the two years ended December 31, 20212022 included in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission on April 11, 2022.March 31, 2023. This discussion contains forward-looking statements. These statements are often identified by the use of words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,” or “continue,” and similar expressions or variations. Such forward-looking statements are subject to risks, uncertainties and other 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.
OVERVIEWOverview
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, debt financing or short-term bank loans, or a combination of the foregoing. We believe that if we can raise $3,700,000, we will have sufficient working capital to repay the outstanding 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 thirty-eightten 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,Needham, 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 injectable 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.
Our Subsidiarysubsidiary, Pharmalectin Inc. (“Pharmalectin” or the “Subsidiary”), of which we currently have 85% ownership, is continuing our clinical trials withfocused on the development, manufacturing and commercialization of therapeutic drugs designed to address viral diseases in humans. Pharmalectin has developed a novel method designed to reduce the viral load and modulate the immune system using a galectin inhibitor. Our lead drug candidate, named ProLectinProLectin-Rx, is a complex polysaccharide derived from natural sources,pectin that binds to, and blocks the activity of galectin-1, and -3.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 the surface of, and in between cells. This interaction causes the cells to change behaviour,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 proteins. 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.
ProLectin-M’s clinical data shows non-toxicity and efficacy for treatment of mild to moderate COVID-19.A Proof-of-Concept trial approved by the IRB at Mazumdar Shaw Medical Center, Narayana Health in Bangalore, India was finalized in October 2020. The results of the trial are described in our three peer-reviewed articles “Galectin antagonist use in mild cases of SARS-CoV-2; pilot feasibility randomised, open label, controlled trial”, published in Journal of Vaccines & Vaccination on December 30, 2020, “Carbohydrate ProLectin-M, a Galectin-3 Antagonist, Blocks SARS-CoV-2 Activity” published in the International Journal of Health Sciences on July 31,14, 2022 and “PLG-007 and Its Active Component Galactomannan-α Competitively Inhibit Enzymes That Hydrolyze Glucose Polymers” published in the International Journal of Molecular Science on July 13, 2022.
Results from our latest Phase 2 trial on COVID-19 Patients published in medRxiv Galectin approach to lower covid transmission - Drug Development for clinical use on November 16, 2022, show positive topline safety and efficacy results of its randomized, placebo-controlled Phase 2 clinical trial in 34 patients with mild-to-moderate COVID-19. During the 7 days of treatment, an orally administered Galectin Antagonist in the form of a chewable tablet was administered 8 times per day on an hourly basis. The Company is currently workingendpoint was a statistically significant reduction in viral load measured by the number of patients reaching a below threshold PCR value (Ct value ≥ 29) by day 7. The trial met its endpoint with a 100% response rate by day 7 versus 6% in placebo, which was statistically significant (p-value = .001). Our analysis also revealed an 88% response rate by day 3, which was statistically significant (p-value = .001). There were no drug-related serious adverse events (SAE’s) in the patient population or viral rebounds by day 14 in the patient population.
| 17 |
On December 2, 2022, India’s Central Drugs Standard Control Organisation (CDSCO) issued an IND with permission to conduct: “A Phase 1b/2a Randomized, Blinded, placebo-controlled Study in Participants with Mild to Moderate COVID-19 to Evaluate the Safety, Efficacy, and Pharmacokinetics of Orally Administered ProLectin-M”. The study will continue by the filing of an Emergency IND with the FDA in the first quarter of 2023, provided we obtain adequate funding. An IND was consecutively filed with the FDA on a Phase III clinical trialMarch 13, 2022.
On January 27, 2023, an additional IND with the CDSCO was issued for an IV treatment of SARS-CoV-2 in India,moderate (Hospitalized patients) Covid-19 infections (ProLectin-I), Long Covid, and is preparing its IND with the FDA. The clinical trials are expected to take placeof treatment of lung-fibrosis as a result of use of ventilator in August through September, 2022. Further, the Company is also preparing an CDSCO submission for a second drug candidate, ProLectin-I, with similar galectin blocking capabilities as the oral drug, ProLectin-M, but IV-injectable for pulmonary fibrosis. The initial Phase I/II clinical trial for ProLectin-I is planned for August through October, 2022. The described clinical trials are subject to additional funding.
treatment of Covid-19 (ProLectin-F), respectively.
The accompanying unaudited condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company has limited resources and operating history. As described in Note 6 of the financial statements, the Company has currently thirty-eight (38)four (4) convertible loans outstanding at a total face value of $3,632,000.$2,165,000. As shown in the accompanying unaudited condensed consolidated financial statements, the Company had an accumulated deficit of $10,288,287$12,002,683 as at June 30, 2022.March 31, 2023. The accumulated deficit as at December 31, 20212022 was $8,753,668.$11,217,600.
The future of the Company is dependent upon its ability to obtain financing to develop its new business opportunities and support the cost of the drug development including clinical trials and regulatory submission to the FDA.
Management plans to seek additional capital through private placements and public offerings of its Common Stock.common stock. There can be no assurance that the Company will be successful in accomplishing its objectives. Without such additional capital or the establishment of strategic relationships with established pharmaceutical companies, the Company may be required to cease operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the 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.
COVID-19
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 thereafter 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, imposed unprecedented restrictions on travel, and there were business closures and a substantial reduction in economic activity in countries with 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 long-term 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.
RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30,MARCH 31, 2023 and 2022
We are a clinical stage 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 as of the fourth quarter of 2021 the Company has engaged in research and development activities through its Subsidiary, Pharmalectin, Inc., developing the ProLectin-Rx.
Research and Development
| Three months ended | Six months ended | Three months ended | ||||||||||||||||||||||
| June 30, 2022 | June 30, 2021 | June 30, 2022 | June 30, 2021 | March 31, 2023 | March 31, 2022 | |||||||||||||||||||
| Research and development: | ||||||||||||||||||||||||
| Process development | $ | — | $ | 166,800 | $ | — | $ | 339,000 | $ | — | $ | — | ||||||||||||
| Product development | 40,834 | 109,000 | 99,723 | 221,600 | — | 58,888 | ||||||||||||||||||
| Regulatory | (15,000 | ) | 39,956 | 33,850 | 59,189 | 57,004 | 76,592 | |||||||||||||||||
| Clinical trials | 70,692 | 274,715 | 147,283 | 308,715 | 64,000 | 48,850 | ||||||||||||||||||
| Project management | (53,385 | ) | 128,181 | 2,410 | 137,181 | 18,000 | 55,795 | |||||||||||||||||
| Total research and development | $ | 43,141 | $ | 718,652 | $ | 283,266 | $ | 1,065,685 | $ | 139,004 | $ | 240,125 | ||||||||||||
During the three months ended March 31, 2023, the Company recorded $139,004 in R&D expenses. During the three months ended March 31, 2022, the Company recorded $240,125. The significant difference is due to a lack of funding.
|
General and Administrative
| Three months ended | Six months ended | |||||||||||||||
| June 30, 2022 | June 30, 2021 | June 30, 2022 | June 30, 2021 | |||||||||||||
| General and administrative expenses: | ||||||||||||||||
| Payroll and related expenses | $ | 339,995 | $ | 629,787 | $ | 717,110 | $ | 688,260 | ||||||||
| Costs for legal, accounting and other professional services | 25,995 | 42,665 | 48,320 | 7,402 | ||||||||||||
| Sales and marketing expense | 31,500 | — | 148,700 | 3,500 | ||||||||||||
| Miscellaneous expenses | 49,870 | (399,838 | ) | 89,811 | 140,772 | |||||||||||
| Total general and administrative | $ | 447,360 | $ | 272,614 | $ | 1,003,941 | $ | 839,934 | ||||||||
| Three months ended | ||||||||
| March 31, 2023 | March 31, 2022 | |||||||
| General and administrative expenses: | ||||||||
| Payroll and related expenses | $ | 359,142 | $ | 394,614 | ||||
| Costs for legal, accounting and other professional services | 43,113 | 4,825 | ||||||
| Promotional expenses | 165,251 | 117,200 | ||||||
| Miscellaneous expenses | 30,132 | 39,942 | ||||||
| Total general and administrative | $ | 597,638 | $ | 556,581 | ||||
| |
The Costs for legal, accounting and other professional services for the three and | |
| |
| Miscellaneous G&A expenses during the three |
Stock-based Compensation
| Three months ended | Six months ended | Three months ended | ||||||||||||||||||||||
| June 30, 2022 | June 30, 2021 | June 30, 2022 | June 30, 2021 | March 31, 2023 | March 31, 2022 | |||||||||||||||||||
| Compensation expense to BoD and Management | $ | 49,840 | $ | 15,750 | $ | 56,240 | $ | 343,782 | $ | 12,750 | $ | 6,400 | ||||||||||||
| Compensation expense to consultants | (3,117 | ) | 35,300 | 12,883 | 481,826 | 850 | 16,000 | |||||||||||||||||
| Total compensation expense | $ | 46,723 | $ | 51,050 | $ | 69,123 | $ | 825,608 | $ | 13,600 | $ | 22,400 | ||||||||||||
Stock-based compensation mounted to $13,600 for the three months ended March 31, 2023. The stock-based compensation for the three months ended March 31, 2022 was $22,400.
|
Other expenses
| Three months ended | Six months ended | Three months ended | ||||||||||||||||||||||
| June 30, 2022 | June 30, 2021 | June 30, 2022 | June 30, 2021 | March 31, 2023 | March 31, 2022 | |||||||||||||||||||
| Other (expenses): | ||||||||||||||||||||||||
| Interest expense | 54,480 | 84,217 | 106,515 | 171,627 | 67,221 | 52,035 | ||||||||||||||||||
| Debt discount amortization | 41,425 | 17,103 | 90,509 | 17,103 | — | 49,084 | ||||||||||||||||||
| Amortization of warrants | — | — | 42,250 | — | — | 42,250 | ||||||||||||||||||
| Amortization of IP | 911 | — | 1,822 | — | 514 | 911 | ||||||||||||||||||
| Total other income (expenses) | $ | 96,816 | $ | 101,320 | $ | 241,096 | $ | 188,730 | $ | 67,735 | $ | 144,280 | ||||||||||||
During the three months ended March 31, 2023, the Company recorded an interest expense of $67,221 and $514 in amortization of the company’s IP. During the three months ended March 31, 2022, the Company recorded $49,084 in amortization of debt discount and $42,250 in issuance of warrants in connection with a capital raise while the interest expense was $52,035 and $911 was amortized from the Company’s IP.
|
Non-Controlling Interest
| Three months ended | Six months ended | |||||||||||||||
| June 30, 2022 | June 30, 2021 | June 30, 2022 | June 30, 2021 | |||||||||||||
| Net loss attributable to the non-controlling interest | $ | 11,691 | $ | 246,935 | $ | 62,807 | $ | 401,549 | ||||||||
| Three months ended | ||||||||
| March 31, 2023 | March 31, 2022 | |||||||
| Net loss attributable to the non-controlling interest | $ | 32,894 | $ | 51,116 | ||||
For the three months ended March 31, 2023 and 2022 there was a non-controlling interest attribution of $32,894 and 51,116 respectively. The significant difference is due to a significant reduction in the R&D activities in the current year due to lack of capital.
| # of shares | # of options | March 31, 2023 | December 31, 2022 | |||||||||||||
| Minority owners cash investment | 4,650,000 | $ | 160,485 | $ | 160,485 | |||||||||||
| Bioxytran interest in subsidiary | 15,000,000 | 1,500 | 1,500 | |||||||||||||
| Issued stock options @ $0.33 | 4,500,000 | 450 | 450 | |||||||||||||
| Total oustanding | 19,650,000 | 4,500,000 | $ | 162,435 | $ | 162,435 | ||||||||||
| # of shares | # of options * | June 30, 2022 | December 31, 2021 | |||||||||||||
| Minority owners cash investment | 4,650,000 | $ | 160,485 | $ | 160,485 | |||||||||||
| Bioxytran non-dilutive equity | 15,000,000 | 1,500 | 1,500 | |||||||||||||
| Issued stock options @ $0.33 | 4,500,000 | 450 | 450 | |||||||||||||
| Total outstanding | 19,650,000 | 4,500,000 | $ | 162,435 | $ | 162,435 | ||||||||||
|
Net Loss
| Three months ended | Six months ended | |||||||||||||||
| June 30, 2022 | June 30, 2021 | June 30, 2022 | June 30, 2021 | |||||||||||||
| Net loss attributable to Bioxytran | $ | (622,349 | ) | $ | (896,701 | ) | $ | (1,534,619 | ) | $ | (2,518,408 | ) | ||||
| Loss per Common share, basic and diluted | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.02 | ) | ||||
| Weighted average number of Common shares outstanding, basic | 110,840,998 | 103,371,579 | 110,840,998 | 101,753,891 | ||||||||||||
| Three months ended | ||||||||
| March 31, 2023 | March 31, 2022 | |||||||
| Net loss attributable to Bioxytran | $ | (785,083 | ) | $ | (912,270 | ) | ||
| Loss per common share, basic and diluted | $ | (0.01 | ) | $ | (0.01 | ) | ||
| Weighted average number of common shares outstanding, basic | 123,495,291 | 110,840,998 | ||||||
The Company generated a net loss for the three months ended March 31, 2023 of $785,083. In comparison, for the three months ended March 31, 2022, the Company generated a net loss of $912,270. The significant difference is due to a significant reduction in the R&D activities in the current year due to lack of capital.
|
CASH-FLOWS
| Six months ended | Three months ended | |||||||||||||||
| June 30, 2022 | June 30, 2021 | March 31, 2023 | March 31, 2022 | |||||||||||||
| Net cash used in operating activities | $ | (930,203 | ) | $ | (1,409,691 | ) | $ | (186,890 | ) | $ | (691,411 | ) | ||||
| Net cash used in investing activities | (22,438 | ) | (8,954 | ) | (4,711 | ) | (22,323 | ) | ||||||||
| Net cash provided by financing activities | 1,380,960 | 1,765,000 | 50,000 | 1,380,960 | ||||||||||||
| Net increase (decrease) in cash | $ | (141,600 | ) | $ | 667,226 | |||||||||||
| Cash, beginning of period | 72,358 | 41,688 | 295,401 | 72,358 | ||||||||||||
| Cash, end of period | 500,677 | 388,043 | 153,801 | 739,584 | ||||||||||||
| Net increase in cash | $ | 428,319 | $ | 346,355 | ||||||||||||
| Net cash used in operating activities was | |
| $22.323. | |
| Cash flows from financing activities were | |
| The available cash was |
LIQUIDITY AND CAPITAL RESOURCES
Current Assets
| June 30, 2022 | December 31, 2021 | March 31, 2023 | December 31, 2022 | |||||||||||||
| Current assets: | ||||||||||||||||
| Cash | $ | 500,677 | $ | 72,358 | $ | 153,801 | $ | 295,401 | ||||||||
| Total current assets | $ | 500,677 | $ | 72,358 | $ | 153,801 | $ | 295,401 | ||||||||
As of March 31, 2023, our current assets consisted of $153,801 in cash at December 31, 2022 we had $295,401 in cash.
Current Liabilities
| June 30, 2022 | December 31, 2021 | March 31, 2023 | December 31, 2022 | |||||||||||||
| Current liabilities: | ||||||||||||||||
| Accounts payable and accrued expenses | $ | 556,835 | $ | 624,316 | $ | 975,227 | $ | 749,395 | ||||||||
| Accounts payable related party | 1,062,000 | 531,000 | 1,100,869 | 709,727 | ||||||||||||
| Un-issued shares liability | 60,150 | — | 1,810 | 960 | ||||||||||||
| Un-issued shares liability related party | 56,240 | — | 51,150 | 38,400 | ||||||||||||
| Convertible notes payable, net of discount | 3,593,650 | 2,122,181 | 2,165,000 | 2,165,000 | ||||||||||||
| Total current liabilities | 5,328,875 | 3,277,497 | 4,294,056 | 3,663,482 | ||||||||||||
At March 31, 2023 we had total liabilities of $4,294,056, which consisted of $2,076,095 in accounts payable and accrued expenses (of which $1,100,869 was payable to related parties), $52,960 in un-issued shares (of which $51,150 was payable to related parties), and $2,165,000 in four convertible loans. At December 31, 2022 total liabilities were $3,663,482, consisting of $1,459,121 in accounts payable and accrued expenses (of which $709,727 was payable to related parties), $39,360 in un-issued shares (of which $38,400 was payable to related parties) and $2,165,000 in the form of four convertible loans net of discount. More details on the account payables can be found under Notes 6 and 7 in the Financial Statements.
Net Working Capital and Accumulated Deficit
| June 30, 2022 | December 31, 2021 | March 31, 2023 | December 31, 2022 | |||||||||||||
| Net working capital | $ | (4,828,198 | ) | $ | (3,205,139 | ) | $ | (4,140,255 | ) | $ | (3,368,081 | ) | ||||
| Accumulated deficit | $ | (10,288,287 | ) | $ | (8,753,669 | ) | $ | (12,002,683 | ) | $ | (11,217,600 | ) | ||||
At March 31, 2023, the net working capital was negative $4,140,255 and the accumulated deficit of $12,002,683. Comparatively, on December 31, 2022, we had net working capital of negative $3,368,081 and an accumulated deficit of $11,217,600. The Company is aware that its current cash on hand will not be sufficient to fund its projected operating requirements through the month of June 2023. We believe that we must raise not less than $3,700,000 to be able to continue our business operations for the next 15 months.
Cash Proceeds from Financing Activities
| Six months ended | Three months ended | |||||||||||||||
| June 30, 2022 | June 30, 2021 | March 31, 2023 | March 31, 2022 | |||||||||||||
| Cash proceeds from financing activities | ||||||||||||||||
| Proceeds from Subsidiary stock transactions | $ | — | $ | 600,000 | ||||||||||||
| Proceeds from stock transactions | $ | 50,000 | $ | — | ||||||||||||
| Proceeds from issuance of convertible notes payable | 1,380,460 | 1,165,000 | — | 1,380,461 | ||||||||||||
| Net cash provided by financing activities | $ | 1,380,460 | $ | 1,765,000 | $ | 50,000 | $ | 1,380,461 | ||||||||
During the Three months ending March 31, 2023, the Company had raised $50,000 through issuance of common shares. In the period ended March 31,2022 the company entered agreements for thirty-eight (38) convertible notes at 6% interest, with net cash proceeds of $1,380,461.
Upcoming Financing Activities
| Title of each class of security being registered | Amount to be registered | Proposed offering price | Proposed aggregate offering price | |||||||||
| Common Stock, $0.001 par value (1) | 5,300,000 | $ tbd | $ | 4,823,000 | ||||||||
| Common Stock, $0.001 par value (2) | 17,653,077 | $ | 0.13 | 2,294,000 | ||||||||
| Total | 22,953,077 | $ | 7,594,900 | |||||||||
The Company intends to issue a Private Placement Offering under Regulation D in the order of $6 million in the spring of 2023.
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.
Commitments
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
| June 30, 2022 | December 31, 2021 | |||||||
| Interest on notes payable | $ | 122,300 | $ | 85,685 | ||||
| Convertible notes payable | 3,632,000 | 2,165,000 | ||||||
| Total | $ | 3,734,300 | $ | 2,250,685 | ||||
|
The Company’s executive officers have entered employment contracts and confidentiality, non-disclosure and assignment of invention agreements. The employment agreements 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.
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 material effect on our consolidated financial condition, results of operations, liquidity, capital expenditures or 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 unfavourableunfavorable 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.
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 Stockcommon 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.
The Company applies ASC 718 for options, Common Stockcommon 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.
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Recent Accounting Standards
In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2022 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company adopted ASU 2020-06 effective January 1, 2021. The adoption of AASU 2020-06 did not have an impact on the Company’s financial statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 3 is not applicable to us because we are a smaller reporting company.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer) reviewed the effectiveness of our disclosure controls and procedures as at the end of the period covered by this report and concluded that as at June 30, 2022,March 31, 2023, (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 that it files or submits under the Securities Exchange Act of 1934, as amended, is accumulated and communicated to the Company’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 at the evaluation date that our disclosure controls and procedures were not effective due primarily to a material weakness in the segregation of duties in the Company’s internal controls.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended. Our management assessed the effectiveness of our internal control over financial reporting as of June 30, 2022.March 31, 2023. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework (2013). A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
As disclosed in our previous filings, there are material weaknesses in the Company’s internal control over financial reporting due to the fact that the Company does not have an adequate process established to ensure appropriate levels of review of accounting and financial reporting matters, which resulted in our closing process not identifying all required adjustments and disclosures in a timely fashion. The Company’s CEO/CFO has identified control deficiencies regarding the lack of segregation of duties and the need for a stronger internal control environment. The small size of the Company’s accounting staff may prevent adequate controls in the future, such as segregation of duties, due to the cost/benefit of such remediation.
Although the Company has hired a consultant to assist with SEC reporting and accounting matters, we expect that the Company will need to hire accounting personnel with the requisite knowledge to improve the levels of review of accounting and financial reporting matters. The Company may experience delays in doing so and any such additional employees would require time and training to learn the Company’s business and operating processes and procedures. For the near-term future, until such personnel are in place, this will continue to constitute a material weakness in the Company’s internal control over financial reporting that could result in material misstatements in the Company’s financial statements not being prevented or detected.
Because of the above material weakness, management has concluded that we did not maintain effective internal control over financial reporting as at June 30, 2022,of March 31, 2023, based on the criteria established in “Internal Control-Integrated Framework” issued by the COSO.
| 23 |
No Attestation Report by Independent Registered Accountant
The effectiveness of our internal control over financial reporting as of March 31, 2023 has not been audited by our independent registered public accounting firm by virtue of our exemption from such requirement as a smaller reporting company.
Changes in Internal Controls Over Financial Reporting
There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the six3 months ended June 30, 2022March 31, 2023 that has materially affected, or is reasonably likely to materially affect, our internal control 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
Item 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 judgment for an amount of not less than $420,750. Among other claims Power Up asserts that the Company wilfully 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. On January 20, 2021 the Supreme Court of the State of New York, County of Nassau, granted Power Up a summary judgement against the Company for Breach of Contact, awarding Power Up damages in the amount of $420,750.
The underlying convertible note was, per agreement of the parties, cancelled on May 26, 2021, with Power Up agreeing to a stipulation of discontinuance with prejudice of the law-suite and forfeiture of the mentioned awarded damages.
Item 1A. Risk Factors
The Companycompany is a smaller reporting company and is not required to provide this information.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
There were no salesOn February 10, 2023 the Company issued 156,250 shares of Common Stock against $50,000, or $0.32/share
All funds received though these equity securities sold duringtransactions will be used in the period covered by this Report that were not previously included in a Current Report on Form 8-K.development of the ProLectin-M, and for operating expenses.
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 D promulgated under the Securities Act.
Item 3. Defaults Upon Senior Securities
There are currently no defaults upon Senior Securities.
However, 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 the SEC ordered suspension the Company’s ten outstanding Convertible Notes went into default.
At May 26, 2021, the ten outstanding notes in default were returned to the Company in exchange for a 1-year 6% note with a principal of $1,000,000 by a Company affiliate. The net gain on the forgiveness, $1,020,323, was recorded as additional paid-in capital. The underlying convertible notes was, per agreement of the parties, cancelled on June 4, 2021.
Item 4. Mine Safety Disclosures
Not Applicable.
Item 5. Other Information
On March 30, 2022, FINRA finalized their review our 15c-211 filing and issued a Clearance Letter. On June 14, 2022 OTC Markets removed the Caveat Emptor symbol and the Company was fully reinstated on OTCPK. OTC Markets are currently in the process of reviewing the Company’s request to upgrade to OTCQB.None
On July 29, 2022 Mike Sheikh’s title was adjusted from VP of Business Development to Chief Marketing Officer (CMO).
On July 13, 2022 the company published a peer-reviewed article in the International Journal of Molecular Science titled “PLG-007 and Its Active Component Galactomannan-α Competitively Inhibit Enzymes That Hydrolyze Glucose Polymers”.
On August 1, 2022 the company published a peer-reviewed article in the International Journal of Health Science titled “Carbohydrate ProLectin-M, a galectin-3 antagonist, blocks SARS-CoV-2 activity”.
| 25 |
Item 6. Exhibits
| Exhibit No. | Title of Document | |
| Form of Private Purchase Agreement | ||
| 10.74* | Form of Subscription Agreement | |
| 31.1* | Certification of Principal Executive and Financial Officers pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended. | |
| Certification pursuant to Section 906 of Sarbanes Oxley Act of 2002 (Chief Executive and Financial Officer). | ||
| 100 | The following financial statements from the Quarterly Report on Form 10-Q of BIOXYTRAN, Inc. for the quarter ended | |
| Inline XBRL Instance Document | ||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File |
| * | Filed as an exhibit hereto. |
| ** | These certificates are furnished to, but shall not be deemed to be filed with, the Securities and Exchange Commission. |
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, there unto duly authorized.
| BIOXYTRAN, INC. | |||
| Date: | By: | /s/ David Platt | |
| David Platt | |||
| Chief Executive Officer | |||
| /s/ Ola Soderquist | |||
| Ola Soderquist | |||
| Chief Financial Officer | |||