Document and Entity Information
Document and Entity Information - $ / shares | May 24, 2021 | Mar. 31, 2021 |
Details | ||
Registrant CIK | 0001514946 | |
Fiscal Year End | --12-31 | |
Document Type | 10-Q/A | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2021 | |
Document Transition Report | false | |
Entity File Number | 000-54296 | |
Entity Registrant Name | AXIM Biotechnologies, Inc. | |
Entity Incorporation, State or Country Code | NV | |
Entity Tax Identification Number | 27-4029386 | |
Entity Address, Address Line One | 6191 Cornerstone Court | |
Entity Address, Address Line Two | E. Suite 114 | |
Entity Address, City or Town | San Diego | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92121 | |
Entity Address, Address Description | Address of principal executive offices | |
City Area Code | 858 | |
Local Phone Number | 923-4422 | |
Phone Fax Number Description | Registrant’s telephone number, including area code | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | No | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 128,860,100 | |
Entity Listing, Par Value Per Share | $ 0.0001 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 | |
Current assets: | |||
Cash | $ 449,214 | $ 457,181 | |
Accounts receivables | 32,870 | 0 | |
Prepaid expenses | 164,562 | 255,923 | |
Inventory | 20,181 | 0 | |
Total current assets | 666,827 | 713,104 | |
Property, Plant and Equipment, Net | 117,383 | 104,094 | |
Other Assets: | |||
Notes receivable- related party | 103,499 | 103,242 | |
Goodwill | 2,458,233 | 2,458,233 | |
Research in progress | 7,800,000 | 7,800,000 | |
Security deposit | 5,000 | 5,000 | |
Operating lease right-of-use asset | 117,546 | 130,722 | |
Total other assets | 10,484,278 | 10,497,197 | |
TOTAL ASSETS | 11,268,488 | 11,314,395 | |
Current liabilities: | |||
Accounts payable and accrued liabilities | 921,272 | 1,073,142 | |
Lease liability obligations (see note 15) | [1] | 43,545 | 53,851 |
Due to shareholder | 180 | 180 | |
Due to first insurance funding | 0 | 25,369 | |
Promissory note (including accrued interest of $24,370 and $19,507, respectively) (see note 7) | 348,588 | 343,725 | |
Total current liabilities | 1,313,585 | 1,496,267 | |
Long-term liabilities: | |||
Deferred tax liability | 2,340,000 | 2,340,000 | |
Lease liability obligations (see note 15) | [2] | 74,001 | 76,871 |
Total long-term liabilities | 8,326,375 | 8,252,307 | |
TOTAL LIABILITIES | 9,639,960 | 9,748,574 | |
STOCKHOLDERS' DEFICIT | |||
Common Stock, Value, Issued | 12,753 | 12,533 | |
Additional paid in capital | 44,026,683 | 43,201,186 | |
Common stock, to be issued | 303,500 | 201,974 | |
Accumulated deficit | (42,714,458) | (41,849,922) | |
TOTAL STOCKHOLDERS' DEFICIT | 1,628,528 | 1,565,821 | |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | 11.268488 | 11,314,395 | |
Preferred Stock | |||
STOCKHOLDERS' DEFICIT | |||
Preferred Stock, Value, Issued | 0 | 0 | |
Series C Convertible Preferred Stock | |||
STOCKHOLDERS' DEFICIT | |||
Preferred Stock, Value, Issued | 50 | 50 | |
Convertible note payable | |||
Long-term liabilities: | |||
Convertible note payable | [3] | 1,718,726 | 1,676,788 |
Convertible note payable - related party | |||
Long-term liabilities: | |||
Convertible note payable | [3] | $ 4,193,648 | $ 4,158,648 |
[1] | See Note 15. | ||
[2] | See note 15. | ||
[3] | See Note 10. |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS - Parenthetical - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 | |
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | |
Common Stock, Shares Authorized | 300,000,000 | 300,000,000 | |
Common Stock, Shares, Issued | 127,528,507 | 125,327,579 | |
Common Stock, Shares, Outstanding | 127,528,507 | 125,327,579 | |
Preferred Stock | |||
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | |
Preferred Stock, Shares Authorized | 5,000,000 | 5,000,000 | |
Preferred Stock, Shares Issued | 500,000 | 500,000 | |
Preferred Stock, Shares Outstanding | 0 | 500,000 | |
Series C Convertible Preferred Stock | |||
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | |
Preferred Stock, Shares Authorized | 500,000 | 500,000 | |
Preferred Stock, Shares Issued | 500,000 | 500,000 | |
Preferred Stock, Shares Outstanding | 500,000 | 500,000 | |
Promissory note - related party | |||
Interest Payable, Current | $ 24,370 | $ 19,507 | |
Convertible note payable | |||
Interest Payable, Current | [1] | 256,259 | 236,148 |
Debt Instrument, Unamortized Discount | [1] | 821,846 | 843,673 |
Convertible note payable - related party | |||
Interest Payable, Current | [1] | $ 193,648 | $ 158,648 |
[1] | See Note 10. |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Details | ||
Revenues | $ 32,649 | $ 0 |
Cost of goods sold | 0 | 0 |
Gross profit | 32,649 | 0 |
Operating Expenses: | ||
Research and development expenses | 100,953 | 0 |
Selling, general and administrative | 793,346 | 687,887 |
Depreciation | 6,350 | 839 |
Total operating expenses from continuing operations | 900,649 | 688,726 |
Gain (Loss) from continuing operations | (868,000) | (688,726) |
Other (income) expenses: | ||
Interest income | (256) | 0 |
Income form Grants from Government | (90,000) | 0 |
Marketable Securities, Unrealized Gain (Loss) | 0 | 104,705 |
Amortization of note discount | 21,827 | 19,363 |
Interest expense | 60,332 | 56,627 |
Total other (income) expenses | (8,097) | 180,695 |
Loss before provision of income tax | (859,903) | (869,421) |
Provision for income tax | 0 | 0 |
Income (Loss) from Continuing Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest | (859,903) | (869,421) |
Loss from discontinued operations | (4,633) | (1,158,946) |
NET INCOME (LOSS) | (864,536) | (2,028,367) |
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ (864,536) | $ (2,028,367) |
Earning per share from continuing operations | ||
Basic | $ (0.01) | $ (0.01) |
Diluted | (0.01) | (0.01) |
Earning per share from discontinued operations | ||
Basic | 0 | (0.02) |
Diluted | 0 | (0.02) |
Earning per share | ||
Basic | (0.01) | (0.03) |
Diluted | $ (0.01) | $ (0.03) |
Weighted average common shares outstanding - basic and diluted | 125,909,597 | 75,052,908 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Statement of Stockholders' Deficit - USD ($) | Common Stock | Preferred Stock | Series A Convertible Preferred stock | Series B Convertible Preferred Stock | Series C Convertible Preferred Stock | Common Stock to be Issued | Additional Paid-in Capital | Retained Earnings | Total |
Equity Balance, Starting at Dec. 31, 2019 | $ 6,486 | $ 0 | $ 0 | $ 50 | $ 50 | $ 50,000 | $ 28,623,060 | $ (35,440,042) | $ (6,760,396) |
Shares Outstanding, Starting at Dec. 31, 2019 | 64,854,539 | 0 | 0 | 500,000 | 500,000 | ||||
Common stock issued against common stock to be issued, Value | $ 25 | $ 0 | $ 0 | $ 0 | $ 0 | (50,000) | 49,975 | 0 | 0 |
Common stock issued against common stock to be issued, Shares | 250,000 | 0 | 0 | 0 | 0 | ||||
Common stock issued under registration statement on Form S-3, Value | $ 355 | $ 0 | $ 0 | $ 0 | $ 0 | 0 | 962,145 | 0 | 962,500 |
Common stock issued under registration statement on Form S-3, Shares | 3,541,667 | 0 | 0 | 0 | 0 | ||||
Net Income (Loss) | (2,028,367) | (2,028,367) | |||||||
Shares Outstanding, Ending at Mar. 31, 2020 | 123,309,045 | 0 | 0 | 500,000 | 500,000 | ||||
Equity Balance, Ending at Mar. 31, 2020 | $ 12,331 | $ 0 | $ 0 | $ 50 | $ 50 | 0 | 37,094,266 | (37,468,409) | (361,712) |
Equity Balance, Starting at Dec. 31, 2020 | $ 12,533 | $ 0 | $ 0 | $ 0 | $ 50 | 201,974 | 43,201,186 | (41,849,922) | 1,565,821 |
Shares Outstanding, Starting at Dec. 31, 2020 | 125,327,579 | 0 | 0 | 0 | 500,000 | ||||
Stock Issued During Period, Value, Issued for Services | $ 66 | $ 0 | $ 0 | $ 0 | $ 0 | 0 | 287,434 | 0 | 287,500 |
Stock Issued During Period, Shares, Issued for Services | 662,839 | 0 | 0 | 0 | 0 | ||||
Subscription price adjustment, Value | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | 0 | (518,948) | 0 | (518,948) |
Beneficial conversion of 190K convertible note, Value | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | 0 | 190,000 | 0 | 190,000 |
Beneficial conversion of 190K convertible note, Shares | 0 | 0 | 0 | 0 | 0 | ||||
Common stock issued for acquisition, Value | $ 5,400 | $ 0 | $ 0 | $ 0 | $ 0 | 0 | 7,500,600 | 0 | 7,506,000 |
Common stock issued for acquisition, Shares | 54,000,000 | 0 | 0 | 0 | 0 | ||||
Common stock to be issued for purchase of shares, Value | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | 168,500 | 0 | 0 | 168,500 |
Common stock to be issued for purchase of shares, Shares | 0 | 0 | 0 | 0 | 0 | ||||
Common stock issued against common stock to be issued received in PY, Value | $ 11 | $ 0 | $ 0 | $ 0 | $ 0 | (66,974) | 66,963 | 0 | 0 |
Common stock issued against common stock to be issued received in PY, Shares | 108,965 | 0 | 0 | 0 | 0 | ||||
Common stock issued for severance payable of discontinued operation, Value | $ 38 | $ 0 | $ 0 | $ 0 | $ 0 | 0 | 224,963 | 0 | 225,001 |
Common stock issued for severance payable of discontinued operation, Shares | 379,463 | 0 | 0 | 0 | 0 | ||||
Common stock and warrants issued for cash, Value | $ 171 | $ 0 | $ 0 | $ 0 | $ 0 | 0 | 433,829 | 0 | 434,000 |
Common stock and warrants issued for cash, Shares | 1,712,500 | 0 | 0 | 0 | 0 | ||||
Shares Granted, Value, Share-based Payment Arrangement, after Forfeiture | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | 0 | 99,742 | 0 | 99,742 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | 0 | 0 | 0 | 0 | 0 | ||||
Net Income (Loss) | (864,536) | (864,536) | |||||||
Shares Outstanding, Ending at Mar. 31, 2021 | 127,528,507 | 0 | 0 | 0 | 500,000 | ||||
Equity Balance, Ending at Mar. 31, 2021 | $ 12,753 | $ 0 | $ 0 | $ 0 | $ 50 | $ 303,500 | $ 44,026,683 | $ (42,714,458) | $ 1,628,528 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (864,536) | $ (2,028,367) |
Loss from discontinued operations | (4,633) | (1,158,946) |
Loss from continuing operations | (859,903) | (869,421) |
Adjustments to reconcile net loss to cash provided by (used in) operating activities: | ||
Depreciation | 6,350 | 839 |
Stock based compensation | 99,740 | 287,500 |
Amortization of prepaid insurance | 23,370 | 31,280 |
Amortization of note discount | 21,827 | 19,363 |
Changes in operating assets & liabilities: | ||
(Increase) decrease in accounts receivable | (32,870) | 0 |
(Increase) decrease in interest receivable | (257) | 2,692 |
Decrease in prepaid expenses | 67,991 | 0 |
Increase in inventory | (20,181) | 0 |
(Decrease) Increase in accounts payable and accrued expenses | 133,105 | 139,873 |
Net cash provided by (used in) operating activities from continuing operations | (560,828) | (387,874) |
Net cash provided by (used in) operating activities from discontinued operations | (4,633) | (685,640) |
Net cash provided by (used in) operating activities | (565,461) | (1,073,514) |
CASH FLOW FROM INVESTING ACTIVITIES: | ||
Cash acquired in acquisition | 0 | 79,814 |
Increase in property and equipment | (19,639) | (3,342) |
Net cash provided by (used in) investing activities from continuing operations | (19,639) | 76,472 |
Net cash provided by (used in) investing activities from discontinued operations | 0 | 0 |
Net cash provided by (used in) investing activities | (19,639) | 76,472 |
CASH FLOW FROM FINANCING ACTIVITIES: | ||
Common stock issued under SPA | 602,502 | 962,500 |
Repayment of First Insurance Funding | (25,369) | (34,339) |
Net cash provided by (used in) continuing financing activities | 577,133 | 928,161 |
Net cash provided by (used in) discontinued financing activities | 0 | 0 |
Net cash provided by (used in) financing activities | 577,133 | 928,161 |
Net decrease in cash and cash equivalents | (7,967) | (68,881) |
Cash and cash equivalents at beginning of period | 457,181 | 511,630 |
Cash and cash equivalents at end of period | 449,214 | 442,749 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Interest | 0 | 0 |
Income taxes - net of tax refund | 0 | 0 |
NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
Common stock issued against common stock to be issued | 66,974 | 50,000 |
Account receivable against conversion of debt and interest | 0 | 75,074 |
Shares issued for severance payments | 225,000 | 0 |
Shares issued for acquisition of Sapphire Biotechnology | 0 | 7,506,000 |
Deferred tax liability accounted for as a result of Sapphire Biotech Acquisition | 0 | 1,845,000 |
Assets acquired and liability assumed as a result of Sapphire Biotech Acquisition | 525,365 | |
BCF related to discount on conversion | 0 | 190,000 |
Subscription price adjustment | 0 | 518,948 |
Others | $ 0 | $ 71,782 |
NOTE 1_ ORGANIZATION
NOTE 1: ORGANIZATION | 3 Months Ended |
Mar. 31, 2021 | |
Notes | |
NOTE 1: ORGANIZATION | NOTE 1: ORGANIZATION Axim Biotechnologies, Ind., (the Company) was originally incorporated in Nevada on November 18, 2010, as Axim International Inc. On July 24, 2014, the Company changed its name to AXIM Biotechnologies, Inc. to better reflect its business operations. The Companys principal executive office is located at 6181 Cornerstone Court E Suite 114, San Diego, CA 92121. On August 7, 2014, the Company formed a wholly owned Nevada subsidiary named Axim Holdings, Inc. This subsidiary will be used to help facilitate the anticipated activities planned by the Company. On May 11, 2015 the Company acquired a 100% interest in Can Chew License Company a Nevada incorporated licensing Company, through the exchange of 5,826,706 shares of its common stock. On March 17, 2020, the Company acquired Sapphire Biotech, Inc., (Sapphire) which is r esearch and Development Company that has a mission to improve global cancer care through the development of proprietary therapeutics for inhibiting cancer growth and metastasis. Sapphire is also developing a line of novel diagnostics for early cancer detection, response to treatment, and recurrence monitoring. Additionally, with the onset of the COVID-19 pandemic, the Company decided to begin creating COVID-19 rapid diagnostic tools, including multiple first-in-class COVID-19 neutralizing antibody tests and other innovations. Sapphires operations are located in the Greater San Diego Area. Company Developments Divesture of Cannabis Related Assets On May 6, 2020 (the Effective Date), AXIM Biotechnologies, Inc., a Nevada corporation (the Company), entered into an Agreement (the Separation Agreement) by and among the Company, CanChew License Company (CanCo), CanChew Biotechnologies, LLC (CanChew), Medical Marijuana, Inc., Dr. George A. Anastassov (Dr. Anastassov), Dr. Philip A. Van Damme (Dr. Van Damme), Lekhram Changoer (Mr. Changoer), Sanammad Foundation, Netherlands and Sanammad Foundation, US (collectively, the Sanammad Parties), pursuant to which, among other matters as described herein, Drs. Anastassov and Van Damme and Mr. Changoer resigned as members of the Companys Board of Directors. Pursuant to the Separation Agreement, the Company transferred and assigned to an entity designated by Dr. Anastassov all of the Companys cannabis-related intellectual property other than the inventions and discoveries described in that certain cannabis-related patent application filed by the Companys wholly-owned subsidiary, Sapphire Biotech, Inc. (water-soluble cannabinoid molecules). The Company also transferred 100% of its interest in CanCo and CanChew to an entity designated by Dr. Anastassov. In consideration for the transfers set forth above, any and all indebtedness owed by the Company to CanChew, totaling approximately $2.61 million, was satisfied and paid in its entirety. In addition, in consideration for the payment by the Company of $65,000, the Company purchased 100% of the issued and outstanding shares of Series B Preferred Stock held by the Sanammad Parties. Such shares shall be retired to treasury of the Company. The Sanammad Parties also agreed to forfeit and assign back to treasury, for no consideration, a total of 18,570,356 shares of the Companys common stock. |
NOTE 2_ ACQUISITION OF SAPPHIRE
NOTE 2: ACQUISITION OF SAPPHIRE BIOTECH, INC. | 3 Months Ended |
Mar. 31, 2021 | |
Notes | |
NOTE 2: ACQUISITION OF SAPPHIRE BIOTECH, INC. | NOTE 2: ACQUISITION OF SAPPHIRE BIOTECH, INC. On March 17, 2020, the Company entered into a Share Exchange Agreement (Agreement) with Sapphire Biotech, Inc., a Delaware corporation (Sapphire) and all the Sapphire stockholders (collectively, the Sapphire Stockholders). Following the closing of the transaction, Sapphire will become a wholly owned subsidiary of AXIM. Under the terms of the Agreement, the Company: (i) acquired 100% of Sapphires outstanding capital (consisting of 100,000,000 shares of common stock and zero (0) shares of Preferred Stock); and (ii) assume all of the outstanding debt of Sapphire. The outstanding debt includes two (2) convertible notes in the principal amounts of $310,000 and $190,000. Pursuant to the terms of the Share Exchange Agreement, the Company acquired 100% of the issued and outstanding shares of Sapphire by means of a share exchange with the Sapphire Stockholders in exchange for 54,000,000 newly issued shares of the common stock of AXIM (the Share Exchange). As a result of the Share Exchange, Sapphire became a 100% owned subsidiary of AXIM, which on a going forward basis will result in consolidated financial reporting by AXIM to include the results of Sapphire. The closing of the Share Exchange occurred concurrently with entry into the Share Exchange Agreement (the Closing). In March 2020, the Company acquired SAPPHIRE BIOTECH, Inc., a biotechnology company focusing on improving cancer care through the development of proprietary therapeutics for inhibiting cancer growth and metastasis. The Company issued 54,000,000 shares of common stock with a total fair value of $7,506,000 and assumed net liabilities of $412,233 (resulting in a total acquisition cost of $7,918,233), in exchange for all outstanding shares of SAPPHIRE BIOTECH, Inc. The Company accounted for the acquisition using the acquisition method of accounting for business combinations. On the acquisition date, the Company performed a preliminary allocation of the purchase price to include the tangible assets acquired and the liabilities assumed with the remainder of the purchase price allocated to patents pending approval, in-process research and development (IPR&D) and goodwill. The Company incurred $6,000 of acquisition-related costs, which will be recorded as expense after the evaluation work been completed. In addition, the Company recorded an estimated deferred tax liability on the assets acquired, except for goodwill for which deferred taxes are not applicable. The Company completed the valuation of the intangible assets acquired in the SAPPHIRE BIOTECH, Inc. transaction by September 2020. Pursuant to the valuation, the Company determined that the patents continue to be expanded and chose to subsume the patents within the IPR&D balance. In managements judgment, the amount assigned to IPR&D represents the amount the Company would reasonably expect to pay an unrelated party for each project included in the technology. Based on the final valuation, the remaining excess purchase price has been allocated to goodwill. The aggregate purchase price of $7,918,233 consisted of common stock valued at $7,506,000 and the net liabilities assumed of $412,233. The value of the $7,506,000 of common shares issued was determined based on the closing price of the Companys common shares at the acquisition date. The following table summarizes the consideration paid for SAPPHIRE BIOTECH and the estimated amounts of the assets acquired and liabilities assumed recognized at the acquisition date. Consideration: Cash and cash equivalents $ 79,814 Property and equipment, net 20,533 In process R&D 7,800,000 Goodwill 2,458,233 Security deposit 12,785 Total asset acquired $ 10,371,365 Accrued expenses and other current liabilities $ 5,767 Deferred taxes liability 2,340,000 Notes Payable including convertible and discount on conversion 519,598 Total liabilities assumed $ 2,865,365 Net assets acquired $ 7,506,000 Of the $7,918,233, assets were recorded in the amount of $113,133 and liabilities were assumed of $525,365, $7,800,000 was assigned to IPR&D and $118,232 was allocated to goodwill. The IPR&D and goodwill assets are not subject to amortization, and $2,340,000 was calculated as the deferred tax liability on the assets acquired, which amount was included in goodwill at the date of acquisition in accordance with accounting requirements.. The $2,458,233 of goodwill is not expected to be deductible for tax purposes. The effective settlement of receivable/payable between the Company and Sapphire deemed to be not material, which was recorded as gain on intercompany transaction in P&L. |
NOTE 3_ BASIS OF PRESENTATION
NOTE 3: BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2021 | |
Notes | |
NOTE 3: BASIS OF PRESENTATION: | NOTE 3: BASIS OF PRESENTATION: The unaudited condensed consolidated financial statements of AXIM Biotechnologies, Inc. (formerly Axim International, Inc.) The following (a) balance sheets as of March 31, 2021 (unaudited) and December 31, 2020, which have been derived from audited financial statements, and (b) the unaudited interim statements of operations and cash flows of AXIM Biotechnologies, Inc. (the Company) have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information and the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2021 are not necessarily indicative of results that may be expected for the year ending December 31, 2021. These unaudited financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2020 included in the Companys Annual Report on Form 10-K, filed with the Securities and Exchange Commission (SEC) on April 15, 2021. Principles of Consolidation The consolidated financial statements include the accounts of Axim Biotechnologies, Inc. and its wholly owned subsidiaries Axim Holdings, Inc., Marina Street LLC, Axim Biotechnologies (the Netherland Company) and Sapphire Biotech, Inc. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant inter-company balances and transactions have been eliminated upon consolidation. |
NOTE 4_ GOING CONCERN
NOTE 4: GOING CONCERN | 3 Months Ended |
Mar. 31, 2021 | |
Notes | |
NOTE 4: GOING CONCERN | NOTE 4: GOING CONCERN The Companys condensed consolidated financial statements have been presented assuming that the Company will continue as a going concern. The Company has incurred significant losses and negative cash flows from operations in all periods since inception and had an accumulated deficit as of March 31, 2021. The Company has historically financed its operations primarily through the sale of common stock, promissory notes and convertible notes. To date, none of the Companys products related to continuing operations are still in the product development phase. Management expects operating losses to continue and increase for the foreseeable future, as the Company progresses into clinical development activities for its lead product candidates. The Companys prospects are subject to risks, expenses and uncertainties frequently encountered by companies in the biotechnology industry. As shown in the condensed consolidated financial statements, the Company has working capital of $646,758 and has an accumulated deficit of $42,714,458 and has cash used in operating activities of continuing operations $560,828 and discontinued operations of $4,633. The Company intends to raise substantial 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. That will raise a doubt about the ability of the Company to continue as a going concern. The unaudited condensed consolidated |
NOTE 5_ SIGNIFICANT ACCOUNTING
NOTE 5: SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2021 | |
Notes | |
NOTE 5: SIGNIFICANT ACCOUNTING POLICIES | NOTE 5: SIGNIFICANT ACCOUNTING POLICIES Use of estimates The preparation of the unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of revenue and expenses during reporting periods. Actual results could differ from these estimates. Significant estimates are assumptions about collection of accounts receivable, intangible assets, useful life of intangible assets, determination of the discount rate for operating leases and assumptions used in Black-Scholes-Merton, or BSM, valuation methods, such as expected volatility, risk-free interest rate and expected dividend rate. Risks and uncertainties The Company operates in a dynamic and highly competitive industry and is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, protection of proprietary technology, dependence on key personnel, contract manufacturer and contract research organizations, compliance with government regulations and the need to obtain additional financing to fund operations. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical studies and clinical trials and regulatory approval, prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel infrastructure and extensive compliance and reporting. The Company believes that changes in any of the following areas could have a material adverse effect on the Companys future financial position, results of operations, or cash flows; ability to obtain future financing; advances and trends in new technologies and industry standards; results of clinical trials; regulatory approval and market acceptance of the Companys products; development of sales channels; certain strategic relationships; litigation or claims against the Company based on intellectual property, patent, product, regulatory, or other factors; and the Companys ability to attract and retain employees necessary to support its growth. Products developed by the Company require approvals from the U.S. Food and Drug Administration (FDA) or other international regulatory agencies prior to commercial sales. There can be no assurance that the Companys research and development will be successfully completed, that adequate protection for the Companys intellectual property will be obtained or maintained, that the products will receive the necessary approvals, or that any approved products will be commercially viable. If the Company was denied approval, approval was delayed or the Company was unable to maintain approval, it could have a materially adverse impact on the Company. Even if the Companys product development efforts are successful, it is uncertain when, if ever, the Company will generate revenue from product sales. The Company operates in an environment of rapid change in technology and substantial competition from other pharmaceutical and biotechnology companies. In addition, the Company is dependent upon the services of its employees, consultants and other third parties. Beginning in late 2019, the outbreak of a novel strain of virus named SARS-CoV-2 (severe acute respiratory syndrome coronavirus 2), or coronavirus, which causes coronavirus disease 2019, or COVID-19, has evolved into a global pandemic. The extent of the impact of the coronavirus outbreak on the Companys business will depend on certain developments, including the duration and spread of the outbreak and the extent and severity of the impact on the Companys clinical trial activities, research activities and suppliers, all of which are uncertain and cannot be predicted. At this point, the extent to which the coronavirus outbreak may materially impact the Companys financial condition, liquidity or results of operations is uncertain. The Company has expended and will continue to expend substantial funds to complete the research, development and clinical testing of product candidates. The Company also will be required to expend additional funds to establish commercial-scale manufacturing arrangements and to provide for the marketing and distribution of products that receive regulatory approval. The Company may require additional funds to commercialize its products. The Company is unable to entirely fund these efforts with its current financial resources. If adequate funds are unavailable on a timely basis from operations or additional sources of financing, the Company may have to delay, reduce the scope of or eliminate one or more of its research or development programs which would materially and adversely affect its business, financial condition and operations. There have been no material changes in the accounting policies from those disclosed in the financial statements and the related notes included in the Form 10-K. Cash equivalents The Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. As of March 31, 2021 and December 31, 2020, the Company had no cash equivalents. Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally insured limits. The Company had no uninsured balances at March 31, 2021 and December 31, 2020. The Company has never experienced any losses related to these balances. Accounts Receivable It is the Companys policy to review accounts receivable at least on monthly basis for conductibility and follow up with customers accordingly. Covid19 has slowed collection as our customers are in a mandated pause. The Company have geographic concentration of customers for the three months ending March 31, 2021 and 2020. Concentrations At March 31, 2021 and December 31, 2020, one customer accounted for 100% of accounts receivable. For the three months period ended March 31, 2021, one customer accounted for 100% of total revenue. For the three months period ended March 31, 2020, one customer accounted for 24% of total revenue. Accounts receivable and revenue were all generated from continuing operations for the three months ending March 31, 2021 . Inventory Inventory consists of raw materials owned by the Company and are stated at the lower of cost or market. As of March 31, 2021 and December 31, 2020, the Company had $20,181 and $-0-; respectively. Property and equipment Property and equipment are carried at cost less accumulated depreciation. Depreciation is computed using straight-line method over the estimated useful life. New assets and expenditures that extend the useful life of property or equipment are capitalized and depreciated. Expenditures for ordinary repairs and maintenance are charged to operations as incurred. The Companys property and equipment relating to continuing operations consisted of the following at March 31, 2021 and December 31, 2020, respectively, and none related to discontinued operations. March 31, December 31, 2021 2020 Equipment of continuing operations $ 154,427 $ 134,788 Less: accumulated depreciation $ 37,044 $ 30,694 $ 117,383 $ 104,094 For the three months ended March 31, 2021 and 2020, the Company recognized depreciation expense of $6,350 and $839, respectively. Intangible Assets As required by generally accepted accounting principles, trademarks and patents are amortized if they have a definite life, and not amortized if they have an indefinite life and then they are tested annually for impairment. The Companys intangible assets relating to continuing operations and discontinued operations consisted of the following at March 31, 2021 and December 31, 2020, respectively. March 31, December 31, 2021 2020 Goodwill $ 2,458,233 $ 2,458,233 Research in progress $ 7,800,000 $ 7,800,000 $ 10,258,233 $ 10,258,233 Intangible assets of discontinued operations $ - $ - Less: accumulated amortization and impairment $ - $ - $ - $ - Revenue Recognition The Company follows the guidance contained in Topic 606 (FASB ASC 606). The core principle of Topic 606 (FASB ASC 606) is that an entity should recognize revenue to depict the transfer of goods of services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The revenue recognition guidance contained in Topic 606, to follow the five-step revenue recognition model along with other guidance impacted by this standard: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transportation price; (4) allocate the transportation price; (5) recognize revenue when or as the entity satisfies a performance obligation. All revenue was from operations that were divested. Revenues are recognized when title for goods is transferred; non-refundable fees and proceeds from irrevocable agreements recognized when inflows or other enhancements of assets of the Company are received. Revenues from continuing operations recognized for three months ended March 31, 2021 and 2020 amounted to $32,649, and $-0-, respectively. Revenues from discontinued operations recognized for three months ended March 31, 2021 and 2020 amounted to $-0-, $7,140, respectively. Cost of Sales Cost of sales includes the purchase cost of products sold and all costs associated with getting the products to the customers including buying and transportation costs. Cost of sales all related to discontinued operations. Shipping Costs Shipping and handling costs billed to customers are recorded in sales. Shipping costs incurred by the company are recorded in general and administrative expenses. Shipping costs all related to discontinued operations. Fair Value Measurements The Company applies the guidance that is codified under ASC 820-10 related to assets and liabilities recognized or disclosed in the financial statements at fair value on a recurring basis. ASC 820-10 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Convertible Instruments The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with professional standards for Accounting for Derivative Instruments and Hedging Activities. Professional standards generally provide three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instruments are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. Professional standards also provide an exception to this rule when the host instrument is deemed to be conventional as defined under professional standards as The Meaning of Conventional Convertible Debt Instrument. The Company accounts for convertible instruments (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with professional standards when Accounting for Convertible Securities with Beneficial Conversion Features, as those professional standards pertain to Certain Convertible Instruments. Accordingly, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their earliest date of redemption. The Company also records when necessary deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. ASC 815-40 provides that, among other things, generally, if an event is not within the entitys control could or require net cash settlement, then the contract shall be classified as an asset or a liability. Income Taxes The Company follows Section 740-10, Income tax (ASC 740-10) Fair Value Measurements and Disclosures of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Operations in the period that includes the enactment date. The Company recognizes deferred tax assets to the extent that the Company believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including reversals of any existing taxable temporary differences, projected future taxable income, tax planning strategies, and the results of recent operations. If the Company determines that it would be able to realize a deferred tax asset in the future in excess of any recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (Section 740-10-25). Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no liabilities for unrecognized income tax benefits according to the provisions of Section 740-10-25. Concentrations of Credit Risk Financial instruments and related items, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents. The Company places its cash and temporary cash investments with credit quality institutions. At times, such amounts may be in excess of the FDIC insurance limit. Net Loss per Common Share Net loss per common share is computed pursuant to section 260-10-45 Earnings Per Share (ASC 260-10) of the FASB Accounting Standards Codification. Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding and the member potentially outstanding during each period. In periods when a net loss is experienced, only basic net loss per share is calculated because to do otherwise would be anti-dilutive. There were 32,771,800 common share equivalents at March 31, 2021 and 32,556,727 common shares at December 31, 2020. For the three months ended March 31, 2021 and 2020 these potential shares were excluded from the shares used to calculate diluted earnings per share as their inclusion would reduce net loss per share. Stock Based Compensation All stock-based payments to employees and to nonemployee directors for their services as directors, including any grants of restricted stock and stock options, are measured at fair value on the grant date and recognized in the statements of operations as compensation or other expense over the relevant service period. Stock-based payments to nonemployees are recognized as an expense over the period of performance. Such payments are measured at fair value at the earlier of the date a performance commitment is reached, or the date performance is completed. In addition, for awards that vest immediately and are non-forfeitable the measurement date is the date the award is issued. The Company accounts for stock options issued to non-employees based on the estimated fair value of the awards using the Black-Scholes option pricing model in accordance with ASC 505-50, Equity-Based Payment to Non-employees Research and Development The Company accounts for research and development costs in accordance with the 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. Company-sponsored research and development costs related to both present and future products are expensed in the period incurred. For the three months ended March 31, 2021 and 2020 the Company incurred research and development expenses of $100,953 and $-0- from continuing operations, respectively. For the three months ended March 31, 2021 and 2020 the Company incurred research and development expenses of $-0- and $620,510 from discontinued operations, respectively. The Company has entered into various agreements with CROs. The Companys research and development accruals are estimated based on the level of services performed, progress of the studies, including the phase or completion of events, and contracted costs. The estimated costs of research and development provided, but not yet invoiced, are included in accrued liabilities on the balance sheet. If the actual timing of the performance of services or the level of effort varies from the original estimates, the Company will adjust the accrual accordingly. Payments made to CROs under these arrangements in advance of the performance of the related services are recorded as prepaid expenses and other current assets until the services are rendered. Recently Issued Accounting Standards Accounting Standards Implemented Since December 31, 2020 ASC Update 2021-04 Earnings Per Share (Topic 260), DebtModifications and Extinguishments (Subtopic 470-50), CompensationStock Compensation (Topic 718), and Derivatives and HedgingContracts in Entitys Own Equity (Subtopic 815-40): Issuers Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (a consensus of the FASB Emerging Issues Task Force) The amendments in this Update affect all entities that issue freestanding written call options that are classified in equity. Specifically, the amendments affect those entities when a freestanding equity-classified written call option is modified or exchanged and remains equity classified after the modification or exchange. The amendments that relate to the recognition and measurement of EPS for certain modifications or exchanges of freestanding equity-classified written call options affect entities that present EPS in accordance with the guidance in Topic 260, Earnings Per Share. The amendments in this Update do not apply to modifications or exchanges of financial instruments that are within the scope of another Topic. That is, accounting for those instruments continues to be subject to the requirements in other Topics. The amendments in this Update do not affect a holders accounting for freestanding call options. ASC Update 2021-03 IntangiblesGoodwill and Other (Topic 350): Accounting Alternative for Evaluating Triggering Events The amendments in this Update provide private companies and not-for-profit entities with an accounting alternative to perform the goodwill impairment triggering event evaluation as required in Subtopic 350-20 as of the end of the reporting period, whether the reporting period is an interim or annual period. An entity that elects this alternative is not required to monitor for goodwill impairment triggering events during the reporting period but, instead, should evaluate the facts and circumstances as of the end of each reporting period to determine whether a triggering event exists and, if so, whether it is more likely than not that goodwill is impaired. An entity that does not elect the accounting alternative for amortizing goodwill and that performs its annual impairment test as of a date other than the annual reporting date should perform a triggering event evaluation only as of the end of the reporting period. The amendments in this Update do not require incremental disclosures beyond the existing requirements in Topic 235, Notes to Financial Statements, and Subtopic 350-20. ASC Update 2021-02 FranchisorsRevenue from Contracts with Customers (Subtopic 952-606): Practical Expedient The amendments in this Update introduce a new practical expedient that simplifies the application of the guidance about identifying performance obligations. The practical expedient permits franchisors that are not public business entities to account for pre-opening services provided to a franchisee as distinct from the franchise license if the services are consistent with those included in a predefined list within the guidance. ASC Update 2021-01 The amendments in this Update clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. Specifically, certain provisions in Topic 848, if elected by an entity, apply to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform. Amendments in this Update to the expedients and exceptions in Topic 848 capture the incremental consequences of the scope clarification and tailor the existing guidance to derivative instruments affected by the discounting transition. ASC Update No. 2020-10 In October 2020, the FASB issued ASC Update No. 2020-10, Codification Improvements. Update No. 2020-10 amends a wide variety of Topics in the Codification in order to improve the consistency of the Codification and the application thereof, while leaving Generally Accepted Accounting Principles unchanged. ASC Update No. 2020-06 In August 2020, the FASB issued ASC Update No. 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entitys Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entitys Own Equity. The amendments in Update No. 2020-06 simplify the complexity associated with applying U.S. GAAP for certain financial instruments with characteristics of liabilities and equity. More specifically, the amendments focus on the guidance for convertible instruments and derivative scope exception for contracts in an entitys own equity In March 2019, the FASB issued ASU 2019-01, Leases (Topic 842) Codification Improvements The Company has a long-term operating lease, and the long-term operating lease took effect in April 2020 (see note 15). In November 2018, the FASB issued ASU 2018-18 , Collaborative Arrangements (Topic 818): Clarifying the Interaction Between Topic 808 and Topic 606 See Note15 for more information related to the Companys lease obligations. In October 2018, the FASB issued ASU 2018-17, Targeted Improvements to Related Party Guidance for Variable Interest Entities In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customers Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. Other recent accounting pronouncements issued by the FASB and the SEC did not or are not believed by management to have a material impact on the Companys present or future consolidated financial statements. |
NOTE 6_ PREPAID EXPENSES
NOTE 6: PREPAID EXPENSES | 3 Months Ended |
Mar. 31, 2021 | |
Notes | |
NOTE 6: PREPAID EXPENSES | NOTE 6: PREPAID EXPENSES Prepaid expenses consist of the following as of March 31, 2021 and December 31, 2020: March 31, December 31, 2021 2020 Prepaid insurance $ 22,278 $ 45,983 Prepaid software/services 142,284 209,940 $ 164,562 $ 255,923 For the three months ended March 31, 2021 and 2020, the Company recognized amortization of prepaid expense of $32,870 and $31,280, respectively. |
NOTE 7_ PROMISSORY NOTE
NOTE 7: PROMISSORY NOTE | 3 Months Ended |
Mar. 31, 2021 | |
Notes | |
NOTE 7: PROMISSORY NOTE | NOTE 7: PROMISSORY NOTE On August 8, 2014 the Company entered into a Promissory Note Agreement with CanChew Biotechnologies, LLC (CCB), a related party (the owners of CCB also own a majority of the outstanding shares of the Company), under which it borrowed $1,000,000 to fund working capital. The original loan was a demand note bearing interest at the rate of 7% per annum, which amount, along with principal, was payable upon demand. The demand note was amended effective January 1, 2015 to reduce the annual interest rate to 3%. All other terms and conditions shall remain in full force and effect. The Company is in discussions to have the demand note modified or exchanged for a longer term, fixed maturity note. On May 6, 2020 (the Effective Date), AXIM Biotechnologies, Inc., a Nevada corporation (the Company), entered into an Agreement (the Separation Agreement). Pursuant to the Separation Agreement, the Company transferred 100% of its interest in CanCo and CanChew to an entity designated by Dr. Anastassov. In consideration for the transfers set forth above, any and all indebtedness owed by the Company to CanChew, totaling approximately $2.61 million, was satisfied and paid in its entirety. For the three months ended March 31, 2021 and 2020, the Company recognized interest expense of $-0- and $9,076, respectively on this note all was related to discontinued operations. On December 31, 2019, Sapphire Biotech, Inc. had entered into a Debt Exchange Agreement whereas the Company assumed three (3) loans totaling $128,375 of Debt owned by Sapphire Diagnostics, LLC which had an interest rate of 6% per annum. In the same Debt Exchange Agreement, the Company assumed four (4) additional loans made to Sapphire in 2019, which had an interest rate of 6% per annum. All seven (7) loans totaling $310,000, plus the aggregate interest accrued thereon of $14,218 making the face value of the new note $324,218. As of March 31, 2021 and December 31, 2020, the principal and accrued interest balances were $348,588 and $343,725, respectively. The Company owes $5,000 to the chairman of the board of the Company for a working capital advance of $5,000 made in May of 2014, all was related to discontinued operations. Under an agreement Mr. Changoer received on March 20, 2018 the Company issued 50,000 restrictive shares of its common stock and recorded $235,000 of compensation expenses in the accompanying consolidated financial statements to account for the issuance of the incentive shares. As of March 31, 2021 and December 31, 2020, the total outstanding balance was $20,000 and $60,000 respectively for consulting fees to Mr. Changoer included in accounts payable. On September 25, 2018, the Company amended Independent Director Compensation agreement. Under the agreement in lieu of the share compensation due to independent director of the Company for his annual service ending May 23, Dr. Philip A. Van Damme shall receive cash compensation of $20,000. Started from August 1, 2019 the company has been paying monthly clinical trial fee of $5,000. As of March 31, 2021 and December 31, 2020, the total outstanding balance was $10,000 and $25,000, respectively included in accounts payable. Effective January 1, 2019 the company entered into a thirty-months consulting agreement with the chairman of the board which pays a monthly consulting fee of $20,000. The company has also been paying a monthly bonus fee of 15,000; this additional fee is on a month-to-month basis at the discretion of management. As of March 31, 2021 and December 31, 2020, the total outstanding balance was $40,000 and $225,000 respectively for consulting fees included in accounts payable. On May 6, 2020 (the Effective Date), AXIM Biotechnologies, Inc., a Nevada corporation (the Company), entered into an Agreement (the Separation Agreement) by and among the Company, CanChew License Company (CanCo), CanChew Biotechnologies, LLC (CanChew), Medical Marijuana, Inc., Dr. George A. Anastassov (Dr. Anastassov), Dr. Philip A. Van Damme (Dr. Van Damme), Lekhram Changoer (Mr. Changoer), Sanammad Foundation, Netherlands and Sanammad Foundation, US (collectively, the Sanammad Parties), pursuant to which, among other matters as described herein, Drs. Anastassov and Van Damme and Mr. Changoer resigned as members of the Companys Board of Directors. Pursuant to the Separation Agreement, the Company transferred and assigned to an entity designated by Dr. Anastassov all of the Companys cannabis-related intellectual property other than the inventions and discoveries described in that certain cannabis-related patent application filed by the Companys wholly-owned subsidiary, Sapphire Biotech, Inc. (water-soluble cannabinoid molecules). The Company also transferred 100% of its interest in CanCo and CanChew to an entity designated by Dr. Anastassov. In consideration for the transfers set forth above, any and all indebtedness owed by the Company to CanChew, totaling approximately $2.61 million, was satisfied and paid in its entirety. In addition, in consideration for the payment by the Company of $65,000, the Company purchased 100% of the issued and outstanding 500,000 shares of Series B Preferred Stock held by the Sanammad Parties. Such shares shall be retired to treasury of the Company. The Sanammad Parties also agreed to forfeit and assign back to treasury, for no consideration, a total of 18,570,356 shares of the Companys common stock. In addition, each of Drs. Anastassov and Van Damme and Mr. Changoer have agreed to subject the shares of the Companys common stock held by each of them to lock-up and leak-out restrictions, as follows: they shall not sell shares for a period of 12 months following the Effective Date and, thereafter, subject to a daily volume limitation of 5%, on an aggregate basis among them. Further, the Company terminated the Consulting Agreement of Dr. Anastassov and the Employment Agreements for each of Dr. Van Damme and Mr. Changoer. In connection with the termination of Dr. Anastassovs Consulting Agreement, the Company agreed to pay severance in the amount of $35,000 for March 2020 and $20,000 per month thereafter through July 2021 (the termination date contemplated by the Consulting Agreement). Commencing for the April 2020, the Company may, in its sole discretion, pay the $20,000 severance obligation by the issuance of shares of the Companys common stock registered pursuant to the Registration Statement on Form S-8 filed with the Commission on May 29, 2015 (S-8 Shares). If the gross cash proceeds from the sale of any S-8 Shares issued in lieu of cash severance is less than $20,000, as determined 20 days after issuance of such S-8 Shares, then the Company has agreed to issue additional shares that would serve to true-up the value of the shares to the $20,000 monthly severance obligation; provided, however, that if 30 days after the date the severance payment is due the gross proceeds from the sale of S-8 Shares is less than $20,000, the Company must pay the shortfall in cash. In addition, for each month that Dr. Anastassov is entitled to receive severance, he shall receive S-8 Shares in an amount equal to the lesser of (a) 150,000 S-8 Shares, or (b) S-8 Shares valued at $15,000 based upon the closing price of the Companys common stock as of the due date of the severance payment obligation. In connection with the termination of the Employment Agreements of Dr. Van Damme and Mr. Changoer, Mr. Changoers severance payments shall be $20,000 per month for 12 months, commencing April 2020 (paid in arrears) and Dr. Van Dammes severance payments shall be $5,000 per month for 12 months, similarly commencing April 2020 and paid in arrears. The Company has the right to pay each of Dr. Van Dammes and Mr. Changoers monthly severance payments in S-8 shares in lieu of cash subject to the same terms and restrictions (including true-up terms) as set forth above for Dr. Anastassov. As of March 31, 2021, the accrued severance payment was $40,000 to Dr. Anastassov, $20,000 to Mr. Changoer and $10,000 to Dr. Van Damme included in accounts payable. The Company retains the right to prepay the severance obligations to Drs. Anastassov and Van Damme and Mr. Changoer, without penalty. No claims were alleged by the Company against any party, and no claims were alleged against the Company. However, in connection with the transactions described above, the parties entered into a general mutual release of all claims. |
NOTE 8_ RELATED PARTY TRANSACTI
NOTE 8: RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2021 | |
Notes | |
NOTE 8: RELATED PARTY TRANSACTIONS | NOTE 8: RELATED PARTY TRANSACTIONS Related Party The company has an employment agreement with Catlina Valencia at a rate of 15,000 per month commencing March 17, 2020. The agreement can be terminated with 30 days notice by either party. The company has a consulting agreement with Glycodots LLC whereby it will provide the services of Dr. Sergei A. Svarovsky at a rate of 15,000 per month commencing March 17, 2020. The agreement can be terminated with 30 days notice by either party. Purchase of Promissory Note and Forbearance Agreement Effective May 4, 2020, the Company acquired from TL-66, a California limited liability company (Seller), a promissory note issued to Seller by Dr. Anastassov (Maker) dated December 1, 2017, with a face value of $350,000 and a remaining balance due of approximately $100,000 (the Note). The purchase price for the Note was $100,000 payable by the Company issuing Seller One Million (1,000,000) restricted shares of the Companys Common Stock. Effective May 6, 2020, the Company and Maker entered into a Forbearance Agreement whereby the Company agreed to forbear from making any collection efforts on the Note for a period of 24 months so long as Maker has not breached the Separation Agreement. Following 24 months, if there has been no breach of the Separation Agreement by Maker, repayment of the Note, including all principal and unpaid interest, will be waived in full. As of May, 4, 2020 the carrying value of the note receivable was $102,567, the value of the common stock to be issued was $135,000, resulting in a loss of $32,433 accounted as loss on debt extinguishment related to discontinued operations. The balance of the Note Receivable as of March 31, 2021 and December 31, 2020 is $102,567 for both periods, including interest accrued thereon of $932 and $675, respectively. |
NOTE 9_ DUE TO FIRST INSURANCE
NOTE 9: DUE TO FIRST INSURANCE FUNDING | 3 Months Ended |
Mar. 31, 2021 | |
Notes | |
NOTE 9: DUE TO FIRST INSURANCE FUNDING | NOTE 9: DUE TO FIRST INSURANCE FUNDING On June 25, 2020, the Company renewed its D&O insurance policy with total premiums, taxes and fees for $93,357. A cash down payment of $18,671 was paid on July 6, 2020. Under the terms of the insurance financing, payments of $8,456, which include interest at the rate of 4.6% per annum, are due each month for nine months commencing on July 25, 2020. The total outstanding due to First Insurance Funding as of March 31, 2021 and December 31, 2020 is $-0- and $25,369, respectively. |
NOTE 10_ CONVERTIBLE NOTES PAYA
NOTE 10: CONVERTIBLE NOTES PAYABLE | 3 Months Ended |
Mar. 31, 2021 | |
Notes | |
NOTE 10: CONVERTIBLE NOTES PAYABLE | NOTE 10: CONVERTIBLE NOTES PAYABLE The following table summarizes convertible note payable of related party as of March 31, 2021 and December 31, 2020: March 31, December 31, 2021 2020 Convertible note payable, due on November 1, 2026, interest at 3.5% p.a. $ 4,000,000 $ 4,000,000 Accrued interest 193,648 158,648 Convertible note payable, net $ 4,193,648 $ 4,158,648 In 2018 the Company extinguished debt with Investor. Investor had proposed a financing transaction pursuant to which the Company will satisfy and retire the Original Note and Original Note current balance in simultaneous exchange for and upon delivery by the Company of a (1) new Convertible Promissory Note in the principal amount of $4,000,000 (the Exchange Note), and (2) 400,000 shares of the Companys restricted common stock (the Origination Shares). Simultaneously, a third-party Investor and the Company entered in Debt Exchange Agreement with Medical Marijuana Inc. As part of this agreement Investor will exchange and deliver the AXIM note to Medical Marijuana in exchange for a Convertible Promissory note. Axim consented to the transfer and assignment of the Axim Note in exchange for the issuance by the Medical Marijuana of the Exchange Note. The interest on this note is payable bi-annually every May 1 and November 1. On May 1, 2019 the Company paid accrued interest of $60,278. In 2020 the Company was authorized to apply the accounts receivable of $75,074 due from Kannaway towards its accrued interest. On May 1, 2020, the Company agreed to modify its existing convertible note with a principal balance of $4 million, 3.5% interest rate convertible note with the current holder of that note. There were two changes to the existing agreement (a) the conversion price was reduced from the $1.50 conversion price in the original Note to $0.25 cents in the modified Note and (b) the term of the note was extended from the original maturity date of November 1, 2021, to November 1, 2026. The Companys stock closed trading on the day of the modification at $0.13 per share. The amendment of this convertible Note was also evaluated under ASC Topic 470-50-40, Debt Modifications and Extinguishments. Based on the guidance, the instruments were determined to be substantially different due to the change in the conversion price being substantial, and debt extinguishment accounting was applied. The fair value of the modified convertible note was not different than the carrying value of the original note as such no extinguishment loss was recorded, The Note prior to the amendment of approximately $4 million, and the fair value of the Note and embedded derivatives after the amendment of approximately $4 million. There were no unamortized debt issuance costs and the debt discount associated with the original 2018 Note. As of March 31, 2021 and December 31, 2020, the balance of secured convertible note was $4,193,648 and $4,158,648 which included $193,648 and $158,648 accrued interest, respectively. The following table summarizes convertible note payable as of March 31, 2021 and December 31, 2020: March 31, December 31, 2021 2020 Convertible note payable, due on October 1, 2029, interest at 3.5% p.a. $ 484,478 $ 484,478 Convertible note payable, due on October 1, 2029, interest at 3.5% p.a. 1,000,000 1,000,000 Convertible note payable, due on December 31, 2034, interest at 3% p.a. 190,000 190,000 Convertible note payable, due on July 21, 2032, interest at 3.5% p.a. 609,835 609,835 Accrued interest (The accrued interest and principal are both included in the captions titled convertible note payable in the balance sheet) 256,259 236,148 Total 2,540,572 2,520,461 Less: unamortized debt discount/finance premium costs (821,846) (843,673) Convertible note payable, net $ 1,718,726 $ 1,676,788 On September 16, 2016, we entered into a convertible note purchase agreement (the Convertible Note Purchase Agreement or Agreement) with a third-party investor. Under the terms of the Convertible Note Purchase Agreement the investor may acquire up to $5,000,000 of convertible notes from the Company. With various closings, under terms acceptable to the Company and the investor as of the time of each closing. Pursuant to the Agreement, on September 16, 2016 the investor provided the Company with $850,000 secured convertible note financing pursuant to four (4) Secured Convertible Promissory Notes (the Notes). Each of the Notes matures on October 1, 2029, and pay 3.5% compounded interest paid bi-annually. The Note are secured by the assets of the Company, may not be pre-paid without the consent of the holder, and are convertible at the option of the holder into shares of the Company common stock at a conversion price equal to $0.2201 per share. As of March 31, 2021 and December 31, 2020, the balance of secured convertible notes was $560,659 and $556,420, which included $76,181 and $71,942 accrued interest, respectively. On October 20, 2016 a third-party investor provided the Company with $1,000,000 secured convertible note financing pursuant to three (3) Secured Convertible Promissory Notes (the Notes). Each of the Notes mature on October 1, 2029 and pay 3.5% compounded interest paid bi-annually. The Notes are secured by the assets of the Company, may not be pre-paid without the consent of the holder, and are convertible at the option of the holder into shares of the Companys common stock at a fixed conversion price equal of $0.2201 per share. The investor paid cash of $500,000 for one of the Notes and issued to the Company two (2) secured promissory notes of $250,000 each for two (2) Convertible Notes of $250,000 each. The two secured promissory notes issued by the investor (totaling $500,000) as payment for two (2) secured Notes totaling $500,000 mature on February 1, 2017 ($250,000) and March 1, 2017 ($250,000), bear interest at the rate of 1% per annum, are full recourse and additionally secured by 10,486,303 shares of Medical Marijuana, Inc. (Pink Sheets symbol: MJNA) and were valued at $858,828 based upon the closing price of MJNA on October 20, 2016. A debt discount was recorded related to beneficial conversion feature inn connection with this convertible note of $499,318, related to the beneficial conversion feature of the note to be amortized over the life of the note or until the note is converted or repaid. As of March 31, 2021 and December 31, 2020, this note has not been converted and the balance of secured convertible notes was $1,158,055 and $1,148,944, which included $158,055 and $148,944 accrued interest, respectively. On December 31, 2019, Sapphire Biotech, Inc. entered into a Convertible Note Purchase Agreement whereas the Company issued a convertible note with a face value of $190,000 with a compounding interest rate of 3% per annum, the interest shall be payable annually beginning on December 31, 2020 until the maturity date of December 31, 2034, at which time all principal and interest accrued thereon shall be due and payable. The Convertible Note is secured by substantially all the Companys tangible and intangible assets. In addition, the Convertible Note includes various non-financial covenants including the Company may not enter into any agreement, arrangement or understanding of any kind that would result in a transaction, or series of transactions, that would result in the sale of 50% or more of the Companys capital stock without the prior approval of the holder. Upon issuance, the Convertible Note was convertible into shares of the Companys common stock at $1.90 per share. At December 31, 2019, the Company determined that the Convertible Note contained a beneficial conversion feature for which a full discount was recorded on the Convertible Note. The fair market value of the Companys common stock was based upon the estimated per share acquisition price per the pending acquisition of the Company. The discount of $190,000 will be amortized using the effective interest method and will be fully amortized by December 31, 2034. On March 17, 2020 the Company entered into a Share Exchange Agreement (Agreement) with Sapphire Biotech, Inc., a Delaware corporation (Sapphire) and all of the Sapphire stockholders (collectively, the Sapphire Stockholders). Following the closing of the transaction, Sapphire will become a wholly owned subsidiary of AXIM. Under the terms of the Agreement, the Company intends to assume the convertible notes in the principal amounts of $190,000. After the acquisition, the Convertible Note was able to convert 6,000,000 shares of Axims common stock. Upon assumption of the note, the Company recorded a beneficial conversion feature of $190,000. As of March 31, 2021 and December 31, 2020, the balance of secured convertible note was $197,141 and $195,716, which included $7,141 and $5,716 accrued interest, respectively. On July 21, 2020 the Company entered into convertible note purchase agreement with Cross & Company, the Company owed to Cross & Company $609,835 of aggregated payments and desired to satisfy the amount due in full by issuing to Cross & Company a convertible promissory note. The convertible note matures on July 21, 2032 and incurred 3.5% compounded interest paid annually. The Note are secured by the assets of the Company, may not be pre-paid without the consent of the holder, and are convertible at the option of the holder into shares of the Company common stock at a conversion price equal to $0.37. Notwithstanding the foregoing, holder shall not be permitted to convert the note, or portion thereof, if such conversion would result in beneficial ownership by holder and its affiliates of more than 4.9% of the debtors outstanding common stock as of the date of conversion. The Company determined that that the conversion of the amounts due into a long-term convertible note resulted in a debt extinguishment due to the change in the fair values exceeding 10%. Accordingly the loss of $823,497 was included in the statement of operations as loss on debt extinguishment. As of March 31, 2021 and December 31, 2020, the balance of secured convertible note was $624,717 and $619,381, which included $14,882 and $9,546 accrued interest respectively. During the three months ended March 31, 2021 and 2020, the Company amortized the debt discount on all the notes of $21,827 and $19,363, respectively, to other expenses. As of March 31, 2021 and December 31, 2020, unamortized debt discount was $821,846 and $843,673, respectively. |
NOTE 11_ STOCK INCENTIVE PLAN
NOTE 11: STOCK INCENTIVE PLAN | 3 Months Ended |
Mar. 31, 2021 | |
Notes | |
NOTE 11: STOCK INCENTIVE PLAN | NOTE 11: STOCK INCENTIVE PLAN On May 29, 2015 the Company adopted its 2015 Stock Incentive Plan. Under the Plan the Company may issue up to 10,000,000 S-8 shares to officers, employees, directors or consultants for services rendered to the Company or its affiliates or to incentivize such parties to continue to render services. S-8 shares are registered immediately upon the filing of the Plan and are unrestricted shares that are free-trading upon issuance. As of March 31,2021 December 31, 2020 there were 928,424 and 9,806,000 shares available for issuance under the Plan. The Company recorded compensation expense of $99,740 and $-0- during the three months ended March 31, 2021 and 2020. On May 13, 2020, Alim Seit-Nebi the Chief Technology Officer and Co-Founder of Sapphire Biotechnology was granted the options to purchase 1 million shares of Axim common stock under the plan at the exercise price of $0.126 per share. One third of the options will vest six months from the date of grant, one third of the options will vest one year from the date of grant, and the remaining one third of the options will vest two years from the date of grant. On May 13, 2020, Dr. Douglas Lake the Chief Clinical Officer and Co-Founder of Sapphire Biotechnology was granted the options to purchase 2 million shares of Axim common stock under the plan at the exercise price of $0.126 per share. One third of the options will vest six months from the date of grant, one third of the options will vest one year from the date of grant, and the remaining one third of the options will vest two years from the date of grant. On May 13, 2020, Timothy R, Scott the Director of Axim Biotechnology was granted the options to purchase 0.5 million shares of Axim common stock under the plan at the exercise price of $0.126 per share. One third of the options vested immediately, one third of the options will vest six months from the date of grant, and the remaining one third of the options will vest twelve months from the date of grant. On May 13, 2020, Robert Cunningham the Director of Axim Biotechnology was granted the options to purchase 0.5 million shares of Axim common stock under the plan at the exercise price of $0.126 per share. One third of the options vested immediately, one third of the options will vest six months from the date of grant, and the remaining one third of the options will vest twelve months from the date of grant. On May 13, 2020, Maurico Bellora the Director of Axim Biotechnology was granted the options to purchase 0.5 million shares of Axim common stock under the plan at the purchase price of $0.126 per share. One third of the options vested immediately, one third of the options will vest six months from the date of grant, and the remaining one third of the options will vest twelve months from the date of grant. On September 10, 2020, Noel C. Gillespie the Senior Patent Attorney of Axim Biotechnology was granted the options to purchase 0.5 million shares of Axim common stock under the plan at the purchase price of $0.61 per share. One third of the options vested immediately, one third of the options will vest one year from the date of grant, and the remaining one third of the options will vest two years from the date of grant. For the three months ended March 31, 2021 and 2020 the Company recorded compensation expense of $99,740 and $287,500, respectively. |
NOTE 12_ STOCKHOLDERS' DEFICIT
NOTE 12: STOCKHOLDERS' DEFICIT | 3 Months Ended |
Mar. 31, 2021 | |
Notes | |
NOTE 12: STOCKHOLDERS' DEFICIT | NOTE 12: STOCKHOLDERS DEFICIT Preferred Stock The Company has authorized 5,000,000 shares of preferred stock, with a par value of $0.0001 per share. Of the 5,000,000 authorized preferred shares, 4,000,000 are undesignated blank check preferred stock. The Company may issue such preferred shares and designate the rights, privileges and preferences of such shares at the time of designation and issuance. As of March 31, 2021, and December 31, 2020 there are -0- and -0- shares of undesignated preferred shares issued and outstanding, respectively. There are zero shares issued and outstanding of Series A and Series B Preferred stock as of March 31, 2021. Series C Convertible Preferred Stock On August 17, 2016 the Company designated up to 500,000 shares of a new Series C Convertible Preferred Stock (Series C Preferred Stock). The holders of the Series C Preferred are entitled to elect four members to the Companys board of directors and are entitled to cast 100 votes per share on all other matters presented to the shareholders for a vote. Each share of Series C Convertible Preferred is convertible into one share of the Companys common stock. The Series C Convertible Preferred designation contains a number of protective and restrictive covenants that restrict the Company from taking a number of actions without the prior approval of the holders of the Series C Preferred or the unanimous vote of all four Series C Directors. If at any time there are four Series C Directors, one such director must be independent as that term is defined in the Series C designation. Any challenge to the independence of a Series C Director is a right conferred only upon the holders of the Series B Convertible Preferred Stock and may only be made by the holders of the Series B Convertible Preferred Stock. On August 18, 2016 the Company issued all 500,000 shares of its newly designated Series C Preferred Stock to MJNA Investment Holdings, LLC in exchange for cash of $65,000. As the holders of the Series C Preferred Stock, MJNA Investment Holdings, LLC has designated Dr. Timothy R. Scott, John W. Huemoeller II, Robert Cunningham and Blake Schroeder as their four Series C Directors. On February 20, 2019, MJNA Investment Holdings LLC (Seller) sold its 500,000 shares of AXIM Biotechnologies, Inc.s, a Nevada corporation (the Company) Series C Preferred Stock to Juniper & Ivy Corporation, a Nevada corporation (Purchaser) for a purchase price of $500,000 (the Purchase Price) pursuant to a Preferred Stock Purchase Agreement (the Purchase Agreement). Payment of the Purchase Price was made as follows (i) a $65,000 payment made by check payable to Seller, which Purchaser borrowed from an unrelated third-party and which has no recourse against the Series C Preferred Stock or assets of Purchaser (the Loan), and (ii) the issuance by Purchaser to Seller of a promissory note, face value, $435,000, which has no recourse against the Series C Preferred Stock or assets of Purchaser (the Note). The Companys Chief Executive Officer John W. Huemoeller II is the President of Purchaser. Mr. Huemoeller provided a personal guaranty for the Loan and the Note. The holders of the Series C Preferred Stock are entitled to elect four members to the Companys Board of Directors and are entitled to cast 100 votes per share on all other matters presented to the shareholders for a vote. As a result of this transaction, a change in control has occurred. Effective April 2, 2019, Blake N. Schroeder resigned as a member of the Companys Board of Directors. Mr. Schroeders resignation was not because of any disagreements with the Company on matters relating to its operations, policies and practices. On April 3, 2019 pursuant to the Companys Amended and Restated Bylaws, the holder of the Companys Series C Preferred Stock appointed Mauricio Javier Gatto-Bellora to fill the director seat vacated by the resignation of Mr. Schroeder. On July 21, 2020 pursuant to the Companys Amended and Restated Bylaws, the holder of the Companys Series C Preferred Stock appointed Peter ORourke to fill one of the vacant positions on board created by the resignations of Dr. George Anastassov, Lekhram Changoer, and Dr. Philip Van Damme. Common Stock and Common Stock Warrants Common Stock The Company has authorized 300,000,000 shares of common stock, with a par value of $0.0001 per share. As of March 31, 2021, and December 31, 2020, the Company had 127,528,507 and 125,327,579 shares of common stock issued and outstanding, respectively. 2021 Transactions: Common Stock During March 2021 the Company issued 1,712,500 shares for cash of gross $470,000 pursuant to various Stock purchase agreements. The cash was received in the first quarter ending 2021. $172,500 in cash was received for shares but not issued until subsequent to March 31, 2021 (see Subsequent events) The company also issued warrants to purchase 900,000 shares of common stock at an exercise price of $0.75. Warrants are exercisable within a 3 year period from issuance. Company paid finders fees of $20,000 in cash during this period for capital raise and will also issue shares equaling $16,000 in market value. On March 18, 2021 the company issued 488,428 restricted shares of its common stock valued at $291,974 to third parties for certain services, recorded as consulting fees . Out of this 108,965 shares of common stock valued at $66,963 was adjusted with common stock to be issued of prior year 2020 Transactions: During the period between January 1, 2020 and December 31, 2020 the Company issued total 17,292,751 shares valued $3,309,130 pursuant to the Companys Registration Statement on Form S-3. The Company received $3,309,130 in cash. On January 13, 2020 the Company issued 250,000 restricted shares of its common stock to third party valued at $50,000, which were carried on the books as stock to be issued. On January 23, 2020 and February 26, 2020 the Company issued 600,000, and 62,839 restricted shares of its common stock to third party valued at $262,500, and $25,000 pursuant to the stock purchase agreement for certain services, recorded as advertising and promotion expense and License, permits & Patents, respectively. On March 17, 2020 the company acquired 100% of the issued and outstanding shares of Sapphire by means of a share exchange with the Sapphire Stockholders in exchange for 54,000,000 restricted shares of its common stock at valued $7,506,000. On April 21, 2020 the Company issued 1,176,470 restricted shares of its common stock to third party valued at $100,000 pursuant to the stock purchase agreement. The cash was received in 2020. On May 6, 2020, the Company entered into an agreement with Sanammad Foundation, the Sanammad Parties agreed to forfeit and assign back to treasury, for no consideration, a total of 18,570,356 shares of the Companys common stock, for which the fair value was $2,562,709, however for accounting purpose this transaction recording at par value adjustment to additional paid in capital. This transaction is related to the divesture of the previous operations to Sanammad. On May 22, 2020 the Company issued 190,810 and 286,215 S-8 shares valued at $60,000 and $90,000 pursuant to the Companys Registration Statement on Form S-8 for severance fees. On June 10, 2020 and June 24, 2020 the Company issued 2,173,913 and 625,000 restricted shares of its common stock to third party valued at $500,000 and $100,000 pursuant to the stock purchase agreement. The cash was received in 2020, respectively. On July 1, 2020 the Company issued 185,185 and 370,370 restricted shares of its common stock to third party valued at $25,000 and $50,000 pursuant to the stock purchase agreement. The cash was received in 2020, respectively. On July 2, 2020 and July 9, 2020 the Company issued 714,285 and 1,785,714 restricted shares of its common stock to third party valued at $100,000 and $250,000 pursuant to the stock purchase agreement. The cash was received in 2020, respectively. On July 10, 2020 the Company issued 5,141,377 restricted shares of its common stock in exchange for the conversion of $51,414 of a convertible note payable, which included $6,414 in interest. On July 10, 2020 the Company issued 142,857 and 357,153 restricted shares of its common stock to third party valued at $20,000 and $50,000 pursuant to the stock purchase agreement. The cash was received in 2020, respectively. On July 10, 2020 the Company issued 250,000 and 107,143 restricted shares of its common stock to third party valued at $35,000 and $15,000 pursuant to the stock purchase agreement. The cash was received in 2020, respectively. On July 14, 2020 the Company issued 200,000 restricted shares of its common stock to third party valued at $23,630 pursuant to the stock purchase agreement. The cash was received in 2020, respectively. On July 21, 2020 the Company entered into convertible note purchase agreement with Cross & Company, the Company owed to Cross & Company $609,835 of aggregated True-Up payments due to subscription price adjustment and desired to satisfy the amount due in full by issuing to Cross & Company a convertible promissory note (see note 10). On July 22, 2020 the Company issued 65,359 and 130,719 restricted shares of its common stock to third party valued at $20,000 and $40,000 pursuant to the stock purchase agreement. The cash was received in 2020, respectively. On July 22, 2020 the Company issued 163,398 and 326,797 restricted shares of its common stock to third party valued at $50,000 and $100,000 pursuant to the stock purchase agreement. The cash was received in 2020, respectively. On July 22, 2020 the Company issued 816,993 and 65,359 restricted shares of its common stock to third party valued at $250,000 and $20,000 pursuant to the stock purchase agreement. The cash was received in 2020, respectively. On July 24, 2020 359,524 shares for the purchase of prepaid marketing expenses valued at $302,000 On August 4, 2020 the Company issued 141,243 restricted shares of its common stock to third party valued at $50,000 pursuant to the stock purchase agreement. The cash was received in 2020. On August 6, 2020 the Company issued 148,166 and 166,686 S-8 shares valued at $120,000 and $135,000 pursuant to the Companys Registration Statement on Form S-8 for severance fees. On August 12, 2020 the Company issued 414,419 restricted shares of its common stock to third party valued at $76,690 pursuant to the stock purchase agreement for certain services, recorded as commission fees. On December 7, 2020 the Company issued 130,609 S-8 shares of its common stock to third party value at $75,000 pursuant to the Companys Registration Statement on Form S-8 for severance fees. |
NOTE 13_ STOCK OPTIONS
NOTE 13: STOCK OPTIONS | 3 Months Ended |
Mar. 31, 2021 | |
Notes | |
NOTE 13: STOCK OPTIONS | NOTE 13: STOCK OPTIONS Options to purchase common stock are granted at the discretion of the Board of Directors, a committee thereof or, subject to defined limitations, an executive officer of the Company to whom such authority has been delegated. Options granted to date generally have a contractual life of ten years. The stock option activity for three months ended March 31, 2021 and the year ended December 31, 2020 is as follows: Options Outstanding Weighted Average Exercise Price Outstanding at December 31, 2019 2,000,000 $ 0.75 Granted 8,300,000 0.27 Exercised - - Expired or canceled - - Outstanding at December 31, 2020 10,300,000 0.36 Granted - - Exercised - - Expired or canceled - - Outstanding at March 31, 2021 10,300,000 $ 0.36 The following table summarizes the changes in options outstanding, option exercisability and the related prices for the shares of the Companys common stock issued to employees and consultants under a stock option plan at March 31,2021 and December 31,2020: As of March 31, 2021 Options Outstanding Options Exercisable Weighted Average Exercise Price ($) Number Outstanding Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price ($) Number Exercisable Weighted Average Exercise Price ($) $ 0.36 10,300,000 9.5 $ 0.36 7,466,662 $ 0.36 As of December 31, 2020 Options Outstanding Options Exercisable Weighted Average Exercise Price ($) Number Outstanding Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price ($) Number Exercisable Weighted Average Exercise Price ($) $ 0.36 10,300,000 9.8 $ 0.36 7,466,662 $ 0.36 The Company determined the value of share-based compensation for options vested using the Black-Scholes fair value option-pricing model with the following weighted average assumptions: March 31, December 31, 2021 2020 Expected life (years) 10 10 Risk-free interest rate (%) 1.74 0.61 Expected volatility (%) 190 230 Dividend yield (%) - - Weighted average fair value of shares at grant date $ 1.74 $ 0.61 For the three months ended March 31, 2021 and 2020 stock-based compensation expense related to vested options was $99,740 and $287,500, respectively. |
NOTE 14_ DISCONTINUED OPERATION
NOTE 14: DISCONTINUED OPERATIONS | 3 Months Ended |
Mar. 31, 2021 | |
Notes | |
NOTE 14: DISCONTINUED OPERATIONS | NOTE 14: DISCONTINUED OPERATIONS During May 2020 the Company decided to discontinue most of its operating activities pursuant to the Separation Agreement entered into by and among the Company, CanChew License Company (CanCo), CanChew Biotechnologies, LLC (CanChew), Medical Marijuana, Inc., Dr. George A. Anastassov (Dr. Anastassov), Dr. Philip A. Van Damme (Dr. Van Damme), Lekhram Changoer (Mr. Changoer), Sanammad Foundation, Netherlands and Sanammad Foundation, US (collectively, the Sanammad Parties). (see Note 1) Pursuant to the terms of the Purchase Agreement dated as of May 6, 2020, Sanammad Parties agreed to acquire from the Company substantially all of its assets and its wholly-owned subsidiaries and to assume certain liabilities and its wholly-owned subsidiaries. Sanammad Parties agreed to pay a purchase price of $2,609,100 reflected in amount due Canchew were deemed paid in full. The sale, which was completed on May 6, 2020, did not include the Companys cash and certain other excluded assets and liabilities. The assets sold and liabilities transferred in the transaction were the sole revenue generating assets of the Company. The results of operations associated with the assets sold have been reclassified into discontinued operations for periods prior to the completion of the transaction. The following is a summary of assets and liabilities sold, stock retired and gain recognized, in connection with the sale of assets to Sanammad parties: Other current assets $ 5,000 Total current assets $ 510,017 Intangible assets, net of amortization $ 47,375 Total asset $ 562,392 Notes payable $ 880,000 Accounts payable and accrued expenses $ 210,640 Due to Canchew $ 1,526,603 Stock retired $ 1,857 Total liabilities and equity $ 2,619,100 The gain on sale of assets was reported during the period was determined as follows: Loss on sale of assets $ 562,392 Gain on sale of liabilities $ 2,619,100 Net gain from sale of assets and liabilities $ 2,056,708 The resulting gain from the sale will be fully offset by existing net operating loss carryforwards available to the Company. For the three months ended March 31, 2021 and 2020 the Company recognized interest expense of $-0- and $-0-, respectively. Additionally, the operating results and cash flows related to assets sold on May 06, 2020 are included in discontinued operations in the consolidated statements of operations and consolidated statements of cash flows for the twelve months ended December 31, 2020 and 2019. As of March 31, 2021 and 2020, the Company has nil asset and liabilities of the discontinued operations in the unaudited condensed consolidated balance sheet in accordance with the provision of ASC 205-20. Loss from Discontinued Operations The sale of the majority of the assets and liabilities related to the Sanammad parties represents a strategic shift in the Companys business. For this reason, the results of operations related to the assets and liabilities held for sale for all periods are classified as discontinued operations. The following is a summary of the results of operations related to the assets and liabilities held for sale (discontinued operations) for the three months ended March 31, 2021 and 2020: March 31, 2021 March 31, 2020 Net sales $ - $ 7,140 Total expenses $ 4,633 $ 1,166,086 Gain from sale of asset and liability $ - $ - Other loss (income) $ - $ 1,158,946 Loss from discontinued operations $ (4,633) $ (1,158,946) The following is a summary of net cash provided by or used in operating activities, investing activities and financing activities for the assets and liabilities held for sale (discontinued operations) for the three months ended March 31, 2021 and 2020: March 31, 2021 March 31, 2020 Income (loss) from discontinued operations $ (4,633) $ (1,158,946) Net cash provided by (used in) operating activities $ (4,633) $ (685,640) Net cash provided by (used in) investing activities $ - $ - Net cash provided by (used in) financing activities $ - $ - |
NOTE 15_ COMMITMENT AND CONTING
NOTE 15: COMMITMENT AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2021 | |
Notes | |
NOTE 15: COMMITMENT AND CONTINGENCIES | NOTE 15: COMMITMENT AND CONTINGENCIES On January 2, 2019 the Company entered into the term of Executives employment agreement, at a base salary of $10,000 per month with John W. Huemoeller II to serve as its Chief Executive Officer. The Company and Executive acknowledge and agree that Executives employment hereunder shall at all times be at will, which means that either Executive may resign at any time for any reason or for no reason, and that the Company may terminate Executives employment at any time for any reason or for no reason, in either case, subject to the applicable provisions of this Agreement. In further consideration for Executives services and subject to the approval of the Board, Executive will be granted an option to purchase 2,000,000 shares of the Companys common stock (the Option Shares). The option will be subject to the terms and conditions applicable to stock options granted under the Companys 2015 Stock Incentive Plan, as amended from time to time (the Plan), and as described in the Plan and the stock option agreement, which Executive will be required to sign. 50% of the Option Shares shall vest on the date of grant and the remaining 50% of the Option Shares shall vest on the 12- month anniversary of the grant date, subject to Executives continued employment by the Company. The exercise price per share will be equal to the fair market value per share on the date of grant, as determined by the last closing price of the Companys common stock the day prior to grant. Beginning in October 2019, the board decided to increase CEO base salary to $35,000 per month. On April 24, 2017 the company entered into an employment agreement with Robert Malasek, its Chief Financial Officer and Secretary. The agreement does not have a set term and may be terminated at any time by the Company or Mr. Malasek with proper notice. The shares were issued in the 1 st On August 21, 2018, AXIM Biotechnologies, Inc. (the Company) entered into an agreement with Revive Therapeutics Ltd. (Revive) to begin selling the Companys flagship nutraceutical product throughout the rapidly expanding Canadian cannabis market. The agreement defines a relationship where Revive will seek regulatory approval for AXIMs proprietary, controlled-release functional chewing gum which contains hemp oil and cannabidiol (CBD). Under the terms of the agreement, Revive will have a minimum purchase amount annually, which increases each year for the term of the agreement. On September 10, 2018, AXIM Biotechnologies, Inc. (the Company) entered into a Letter of Intent (LOI) with Impression Healthcare Limited (Impression), Australias largest home dental impression company, for exclusive distribution of all AXIM® Biotech products throughout Australia and New Zealand. Pursuant to the LOI, both parties will endeavor to enter into a definitive agreement whereby the parties will co-develop new products, initially for pre-clinical and phase 1 trials (among other clinical trials), including an oral rinse liquid targeted for the treatment of oral mucositis, strep throat, oral infections and gum disease. Pending initial discussions and an internal review of AXIM® Biotech and its product offerings, Impression will collaborate with AXIM® Biotech for the licensing and distribution of its current and future medicinal cannabis products for distribution in Australia and New Zealand. On December 20, 2018 the Company signed Exclusivity Agreement on terms that include Exclusivity period of 90 days after the date on which this agreement is executed with Impression in exchange for 10,300,000 ordinary fully paid shares in Impression at the price of A$0.02 per share and exchange rate of $0.74 AUD/USD valued $150,000 which the Company recognized as a revenue in 4 th On May 31, 2019, AXIM Biotechnologies, Inc. (AXIM) entered into a cannabinoid product supply agreement with Impression Healthcare Limited (Impression), Australias largest home dental impression company, for the supply of the AXIMs toothpaste and mouthwash containing cannabidiol (CBD) for its clinical trial for the treatment of periodontitis. The supply agreement is in preparation for a clinical trial to test the effectiveness of CBD in treating periodontitis. The clinical trial will be performed at Swinburne University of Technology in Melbourne, Australia. In accordance with the agreement, AXIM will supply the first batch of its patented toothpaste and mouthwash products containing CBD, along with associated placebo units for Impression to perform a randomized control clinical trial. On April 14, 2020 the Company terminated its supply agreement with Impression Healthcare Limited by mutual consent of both parties. On July 2, 2019, AXIM Biotechnologies, Inc. (AXIM) entered into a multi-term, non-exclusive license and distribution agreement (Agreement) with Colorado based gum developer, KISS Industries, LLC (KISS Industries). Under the terms of the Agreement, AXIM grants KISS Industries a non-exclusive license to formulate and sell products that fall within AXIMs cannabinoid chewing gum patent in exchange for royalties to be paid to AXIM based upon KISS Industries sales in the United States and Mexico. The Agreement also grants AXIM the right to: (i) acquire 10 percent of KISS Industries under certain conditions; and (ii) match any outside future offer to acquire KISS Industries as a whole. Further, AXIMs CEO John W. Huemoeller II will also join the Board of Directors of KISS Industries. In exchange for this license Kiss Industries will pay Axim 6% of gross sales as a royalty on all licensed products sold by Kiss. In the territory covered by this license which is the USA and Mexico. (Minimum annual royalty $50,000). Kiss will manufacture for Axim various licensed products at a price equal to 140% of Kisss cost. As of March 31, 2021 and December 31, 2020 Kiss Industries did not sell any Axims products. Industry Sponsored Research Agreement Sapphire entered into the Industry Sponsored Research Agreement (SRA) effective February 7, 2020 to test and confirm the inhibitory activity of SBI-183 (exclusively licensed on January 13, 2020) and SBI-183 analogs, including those synthesized by the Company. The testing will include cell-based in vitro assays, NMR binding studies and testing to determine if SBI-183 enhances the activity of cytotoxic drugs in vitro. Animal studies will also be conducted under the SRA. Specifically, SBI-183 analogs will be evaluated in a mouse model of triple negative breast cancer using human tumor xenografts. The work will be performed over a period of one year with the total cost of the SRA totaling $150,468 paid prior to acquisition. In consideration of the License executed between Skysong Innovations and the Company, the SRA provides for a reduced overhead of 5% instead of the usual 67.7%. This overhead fee differential of $89,851 will be deferred for five (5) years with interest of 5% compounded annually. For the three months ended March 31, 2021, the Company recorded research and development expenses of $95,953. On August 5, 2020 Sapphire was awarded a $395,880 phase I Small Business Innovation Research (SBIR) grant by the National Cancer Institute (NCI). The grant will support continued development of novel small molecules that inhibit the enzymatic activity of Quiescin Sulfhydryl Oxidase I (QSOX1) based on a lead compound. QSOX1 is a tumor-derived enzyme that is important for cancer growth, invasion and metastasis. Sapphire is conducting this research with technology it has exclusively licensed from Skysong Innovations, LLC, the intellectual property management company for Arizona State University. Sapphire will subcontract tumor biology work for evaluating analog inhibitors for QSOX1 to Dr. Doug Lakes laboratory at Arizona State University and Mayo Clinic Arizona. Grant income received for the three months ended March 31, 2021 and 2020 was $90,000 and $0; respectively. On August 25, 2020 we signed an exclusive licensing, manufacturing and distribution agreement with Empowered Diagnostics LLC to execute the high-volume production of our rapid point-of-care diagnostic test. AXIM and Empowered have completed the technology transfer and Empowered Diagnostics has built out their production facility to be able to manufacture millions of our neutralizing antibody tests for Covid-19 per month. In exchange for this license Empowered will pay Axim a royalty on net sales on all licensed products sold by Empowered covered by this license which global with the exception of Mexico. Operating Lease Lease AgreementOn March 3, 2020, Sapphire entered into a 3-year lease agreement (Lease) to relocate to a larger space within the same business park. The new space totals 1,908 square feet with monthly base rent in the 1st year $4,713, 2nd year $4,854 and 3rd year $5,000 at implicit interest rate of 6%. Upon commencement of the Lease on April 25, 2020, the previous lease will expire. Operating Leases - Right of Use Assets and Purchase Commitments Right of Use Assets We have operating leases for office space that expire through 2020. Below is a summary of our right of use assets and liabilities as of March 31, 2021. Right-of-use assets $ 117,546 Lease liability obligations, current $ 43,545 Lease liability obligations, noncurrent 74,001 Total lease liability obligations $ 117,546 Weighted-average remaining lease term 2.08 years Weighted-average discount rate 6% The following table summarizes the lease expense for the three months ended March 31, 2021 and 2020: March 31, March 31, 2021 2020 Operating lease expense $ 14,139* $ - Short-term lease expense 3,213 - Total lease expense $ 17,352 $ - *We recorded $17,352 of operating lease expense this includes $3,213 of maintenance Approximate future minimum lease payments for our right of use assets over the remaining lease periods as of March 31, 2021, are as follows: Remainder of 2021 $ 43,545 2022 59,416 2023 20,000 Total minimum payments 122,961 Less: amount representing interest (5,415) Total $ 117,546 Litigation As of March 31, 2021, and this report issuing date, the Company is not a party to any pending material legal proceeding. To the knowledge of management, no federal, state or local governmental agency is presently contemplating any proceeding against the Company. To the knowledge of management, no director, executive officer or affiliate of the Company, any owner of record or beneficially of more than five percent of the Companys Common Stock is a party adverse to the Company or has a material interest adverse to the Company in any proceeding. |
NOTE 16_ SUBSEQUENT EVENTS
NOTE 16: SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2021 | |
Notes | |
NOTE 16: SUBSEQUENT EVENTS | NOTE 16: SUBSEQUENT EVENTS On April 05, 2021, the Company issued a total of 175,000 Common Stock Purchase Warrants (exercise price $0.30) to third party. Pursuant to an extension approved by the Board of Directors on April 05, 2021, all Warrants shall be valid for 36 months from effective date included cashless exercise. The cash was received in 2021 for the purchase of the warrants and common stock described in next paragraph. On April 05, 2021, the Company issued 344,828 restricted shares of its common stock to third party valued at $100,000 pursuant to the stock purchase agreement. The cash was received in 2021. On April 05, 2021 the company issued 811,765 restricted shares of its common stock valued at $552,000 to third party for certain services, recorded as advertising and promotion expense and License, permits & Patents, respectively. On May 14, 2021, The Company entered into the Equity Purchase Agreement with Cross, pursuant to which we have the right to put, or sell, up to $10,000,000 worth of shares of our common stock to Cross. As provided in the Equity Purchase Agreement, we may require Cross to purchase shares of our common stock from time to time by delivering a put notice to Cross specifying the total number of shares to be purchased (such number of shares multiplied by the purchase price described below, the Investment Amount); provided there must be a minimum of ten trading days between delivery of each put notice. We may determine the Investment Amount, provided that such amount may not be more than 500% of the average daily trading volume in dollar amount for our common stock during the five trading days preceding the date on which we deliver the applicable put notice, unless waived by Cross in its sole discretion. Additionally, such amount may not be lower than $10,000 or higher than $1,000,000. Cross will have no obligation to purchase shares under the Equity Line to the extent that such purchase would cause Cross to own more than 4.99% of our issued and outstanding shares of common stock. |
NOTE 1_ ORGANIZATION_ Company D
NOTE 1: ORGANIZATION: Company Developments - Divesture of Cannabis Related Assets (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Policies | |
Company Developments - Divesture of Cannabis Related Assets | Company Developments Divesture of Cannabis Related Assets On May 6, 2020 (the Effective Date), AXIM Biotechnologies, Inc., a Nevada corporation (the Company), entered into an Agreement (the Separation Agreement) by and among the Company, CanChew License Company (CanCo), CanChew Biotechnologies, LLC (CanChew), Medical Marijuana, Inc., Dr. George A. Anastassov (Dr. Anastassov), Dr. Philip A. Van Damme (Dr. Van Damme), Lekhram Changoer (Mr. Changoer), Sanammad Foundation, Netherlands and Sanammad Foundation, US (collectively, the Sanammad Parties), pursuant to which, among other matters as described herein, Drs. Anastassov and Van Damme and Mr. Changoer resigned as members of the Companys Board of Directors. Pursuant to the Separation Agreement, the Company transferred and assigned to an entity designated by Dr. Anastassov all of the Companys cannabis-related intellectual property other than the inventions and discoveries described in that certain cannabis-related patent application filed by the Companys wholly-owned subsidiary, Sapphire Biotech, Inc. (water-soluble cannabinoid molecules). The Company also transferred 100% of its interest in CanCo and CanChew to an entity designated by Dr. Anastassov. In consideration for the transfers set forth above, any and all indebtedness owed by the Company to CanChew, totaling approximately $2.61 million, was satisfied and paid in its entirety. In addition, in consideration for the payment by the Company of $65,000, the Company purchased 100% of the issued and outstanding shares of Series B Preferred Stock held by the Sanammad Parties. Such shares shall be retired to treasury of the Company. The Sanammad Parties also agreed to forfeit and assign back to treasury, for no consideration, a total of 18,570,356 shares of the Companys common stock. |
NOTE 3_ BASIS OF PRESENTATION_
NOTE 3: BASIS OF PRESENTATION: Principles of Consolidation (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Policies | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Axim Biotechnologies, Inc. and its wholly owned subsidiaries Axim Holdings, Inc., Marina Street LLC, Axim Biotechnologies (the Netherland Company) and Sapphire Biotech, Inc. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant inter-company balances and transactions have been eliminated upon consolidation. |
NOTE 5_ SIGNIFICANT ACCOUNTIN_2
NOTE 5: SIGNIFICANT ACCOUNTING POLICIES: Use of estimates (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Policies | |
Use of estimates | Use of estimates The preparation of the unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of revenue and expenses during reporting periods. Actual results could differ from these estimates. Significant estimates are assumptions about collection of accounts receivable, intangible assets, useful life of intangible assets, determination of the discount rate for operating leases and assumptions used in Black-Scholes-Merton, or BSM, valuation methods, such as expected volatility, risk-free interest rate and expected dividend rate. |
NOTE 5_ SIGNIFICANT ACCOUNTIN_3
NOTE 5: SIGNIFICANT ACCOUNTING POLICIES: Risks and uncertainties (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Policies | |
Risks and uncertainties | Risks and uncertainties The Company operates in a dynamic and highly competitive industry and is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, protection of proprietary technology, dependence on key personnel, contract manufacturer and contract research organizations, compliance with government regulations and the need to obtain additional financing to fund operations. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical studies and clinical trials and regulatory approval, prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel infrastructure and extensive compliance and reporting. The Company believes that changes in any of the following areas could have a material adverse effect on the Companys future financial position, results of operations, or cash flows; ability to obtain future financing; advances and trends in new technologies and industry standards; results of clinical trials; regulatory approval and market acceptance of the Companys products; development of sales channels; certain strategic relationships; litigation or claims against the Company based on intellectual property, patent, product, regulatory, or other factors; and the Companys ability to attract and retain employees necessary to support its growth. Products developed by the Company require approvals from the U.S. Food and Drug Administration (FDA) or other international regulatory agencies prior to commercial sales. There can be no assurance that the Companys research and development will be successfully completed, that adequate protection for the Companys intellectual property will be obtained or maintained, that the products will receive the necessary approvals, or that any approved products will be commercially viable. If the Company was denied approval, approval was delayed or the Company was unable to maintain approval, it could have a materially adverse impact on the Company. Even if the Companys product development efforts are successful, it is uncertain when, if ever, the Company will generate revenue from product sales. The Company operates in an environment of rapid change in technology and substantial competition from other pharmaceutical and biotechnology companies. In addition, the Company is dependent upon the services of its employees, consultants and other third parties. Beginning in late 2019, the outbreak of a novel strain of virus named SARS-CoV-2 (severe acute respiratory syndrome coronavirus 2), or coronavirus, which causes coronavirus disease 2019, or COVID-19, has evolved into a global pandemic. The extent of the impact of the coronavirus outbreak on the Companys business will depend on certain developments, including the duration and spread of the outbreak and the extent and severity of the impact on the Companys clinical trial activities, research activities and suppliers, all of which are uncertain and cannot be predicted. At this point, the extent to which the coronavirus outbreak may materially impact the Companys financial condition, liquidity or results of operations is uncertain. The Company has expended and will continue to expend substantial funds to complete the research, development and clinical testing of product candidates. The Company also will be required to expend additional funds to establish commercial-scale manufacturing arrangements and to provide for the marketing and distribution of products that receive regulatory approval. The Company may require additional funds to commercialize its products. The Company is unable to entirely fund these efforts with its current financial resources. If adequate funds are unavailable on a timely basis from operations or additional sources of financing, the Company may have to delay, reduce the scope of or eliminate one or more of its research or development programs which would materially and adversely affect its business, financial condition and operations. There have been no material changes in the accounting policies from those disclosed in the financial statements and the related notes included in the Form 10-K. |
NOTE 5_ SIGNIFICANT ACCOUNTIN_4
NOTE 5: SIGNIFICANT ACCOUNTING POLICIES: Cash equivalents (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Policies | |
Cash equivalents | Cash equivalents The Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. As of March 31, 2021 and December 31, 2020, the Company had no cash equivalents. Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally insured limits. The Company had no uninsured balances at March 31, 2021 and December 31, 2020. The Company has never experienced any losses related to these balances. |
NOTE 5_ SIGNIFICANT ACCOUNTIN_5
NOTE 5: SIGNIFICANT ACCOUNTING POLICIES: Accounts Receivable (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Policies | |
Accounts Receivable | Accounts Receivable It is the Companys policy to review accounts receivable at least on monthly basis for conductibility and follow up with customers accordingly. Covid19 has slowed collection as our customers are in a mandated pause. The Company have geographic concentration of customers for the three months ending March 31, 2021 and 2020. |
NOTE 5_ SIGNIFICANT ACCOUNTIN_6
NOTE 5: SIGNIFICANT ACCOUNTING POLICIES: Concentrations (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Policies | |
Concentrations | Concentrations At March 31, 2021 and December 31, 2020, one customer accounted for 100% of accounts receivable. For the three months period ended March 31, 2021, one customer accounted for 100% of total revenue. For the three months period ended March 31, 2020, one customer accounted for 24% of total revenue. Accounts receivable and revenue were all generated from continuing operations for the three months ending March 31, 2021 . |
NOTE 5_ SIGNIFICANT ACCOUNTIN_7
NOTE 5: SIGNIFICANT ACCOUNTING POLICIES: Inventory (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Policies | |
Inventory | Inventory Inventory consists of raw materials owned by the Company and are stated at the lower of cost or market. As of March 31, 2021 and December 31, 2020, the Company had $20,181 and $-0-; respectively. |
NOTE 5_ SIGNIFICANT ACCOUNTIN_8
NOTE 5: SIGNIFICANT ACCOUNTING POLICIES: Property and equipment (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Policies | |
Property and equipment | Property and equipment Property and equipment are carried at cost less accumulated depreciation. Depreciation is computed using straight-line method over the estimated useful life. New assets and expenditures that extend the useful life of property or equipment are capitalized and depreciated. Expenditures for ordinary repairs and maintenance are charged to operations as incurred. The Companys property and equipment relating to continuing operations consisted of the following at March 31, 2021 and December 31, 2020, respectively, and none related to discontinued operations. March 31, December 31, 2021 2020 Equipment of continuing operations $ 154,427 $ 134,788 Less: accumulated depreciation $ 37,044 $ 30,694 $ 117,383 $ 104,094 For the three months ended March 31, 2021 and 2020, the Company recognized depreciation expense of $6,350 and $839, respectively. |
NOTE 5_ SIGNIFICANT ACCOUNTIN_9
NOTE 5: SIGNIFICANT ACCOUNTING POLICIES: Intangible Assets (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Policies | |
Intangible Assets | Intangible Assets As required by generally accepted accounting principles, trademarks and patents are amortized if they have a definite life, and not amortized if they have an indefinite life and then they are tested annually for impairment. The Companys intangible assets relating to continuing operations and discontinued operations consisted of the following at March 31, 2021 and December 31, 2020, respectively. March 31, December 31, 2021 2020 Goodwill $ 2,458,233 $ 2,458,233 Research in progress $ 7,800,000 $ 7,800,000 $ 10,258,233 $ 10,258,233 Intangible assets of discontinued operations $ - $ - Less: accumulated amortization and impairment $ - $ - $ - $ - |
NOTE 5_ SIGNIFICANT ACCOUNTI_10
NOTE 5: SIGNIFICANT ACCOUNTING POLICIES: Revenue Recognition (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Policies | |
Revenue Recognition | Revenue Recognition The Company follows the guidance contained in Topic 606 (FASB ASC 606). The core principle of Topic 606 (FASB ASC 606) is that an entity should recognize revenue to depict the transfer of goods of services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The revenue recognition guidance contained in Topic 606, to follow the five-step revenue recognition model along with other guidance impacted by this standard: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transportation price; (4) allocate the transportation price; (5) recognize revenue when or as the entity satisfies a performance obligation. All revenue was from operations that were divested. Revenues are recognized when title for goods is transferred; non-refundable fees and proceeds from irrevocable agreements recognized when inflows or other enhancements of assets of the Company are received. Revenues from continuing operations recognized for three months ended March 31, 2021 and 2020 amounted to $32,649, and $-0-, respectively. Revenues from discontinued operations recognized for three months ended March 31, 2021 and 2020 amounted to $-0-, $7,140, respectively. |
NOTE 5_ SIGNIFICANT ACCOUNTI_11
NOTE 5: SIGNIFICANT ACCOUNTING POLICIES: Cost of Sales (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Policies | |
Cost of Sales | Cost of Sales Cost of sales includes the purchase cost of products sold and all costs associated with getting the products to the customers including buying and transportation costs. Cost of sales all related to discontinued operations. |
NOTE 5_ SIGNIFICANT ACCOUNTI_12
NOTE 5: SIGNIFICANT ACCOUNTING POLICIES: Shipping Costs (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Policies | |
Shipping Costs | Shipping Costs Shipping and handling costs billed to customers are recorded in sales. Shipping costs incurred by the company are recorded in general and administrative expenses. Shipping costs all related to discontinued operations. |
NOTE 5_ SIGNIFICANT ACCOUNTI_13
NOTE 5: SIGNIFICANT ACCOUNTING POLICIES: Fair Value Measurements (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Policies | |
Fair Value Measurements | Fair Value Measurements The Company applies the guidance that is codified under ASC 820-10 related to assets and liabilities recognized or disclosed in the financial statements at fair value on a recurring basis. ASC 820-10 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. |
NOTE 5_ SIGNIFICANT ACCOUNTI_14
NOTE 5: SIGNIFICANT ACCOUNTING POLICIES: Convertible Instruments (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Policies | |
Convertible Instruments | Convertible Instruments The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with professional standards for Accounting for Derivative Instruments and Hedging Activities. Professional standards generally provide three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instruments are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. Professional standards also provide an exception to this rule when the host instrument is deemed to be conventional as defined under professional standards as The Meaning of Conventional Convertible Debt Instrument. The Company accounts for convertible instruments (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with professional standards when Accounting for Convertible Securities with Beneficial Conversion Features, as those professional standards pertain to Certain Convertible Instruments. Accordingly, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their earliest date of redemption. The Company also records when necessary deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. ASC 815-40 provides that, among other things, generally, if an event is not within the entitys control could or require net cash settlement, then the contract shall be classified as an asset or a liability. |
NOTE 5_ SIGNIFICANT ACCOUNTI_15
NOTE 5: SIGNIFICANT ACCOUNTING POLICIES: Income Taxes (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Policies | |
Income Taxes | Income Taxes The Company follows Section 740-10, Income tax (ASC 740-10) Fair Value Measurements and Disclosures of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Operations in the period that includes the enactment date. The Company recognizes deferred tax assets to the extent that the Company believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including reversals of any existing taxable temporary differences, projected future taxable income, tax planning strategies, and the results of recent operations. If the Company determines that it would be able to realize a deferred tax asset in the future in excess of any recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (Section 740-10-25). Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no liabilities for unrecognized income tax benefits according to the provisions of Section 740-10-25. |
NOTE 5_ SIGNIFICANT ACCOUNTI_16
NOTE 5: SIGNIFICANT ACCOUNTING POLICIES: Concentrations of Credit Risk (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Policies | |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments and related items, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents. The Company places its cash and temporary cash investments with credit quality institutions. At times, such amounts may be in excess of the FDIC insurance limit. |
NOTE 5_ SIGNIFICANT ACCOUNTI_17
NOTE 5: SIGNIFICANT ACCOUNTING POLICIES: Net Loss per Common Share (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Policies | |
Net Loss per Common Share | Net Loss per Common Share Net loss per common share is computed pursuant to section 260-10-45 Earnings Per Share (ASC 260-10) of the FASB Accounting Standards Codification. Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding and the member potentially outstanding during each period. In periods when a net loss is experienced, only basic net loss per share is calculated because to do otherwise would be anti-dilutive. There were 32,771,800 common share equivalents at March 31, 2021 and 32,556,727 common shares at December 31, 2020. For the three months ended March 31, 2021 and 2020 these potential shares were excluded from the shares used to calculate diluted earnings per share as their inclusion would reduce net loss per share. |
NOTE 5_ SIGNIFICANT ACCOUNTI_18
NOTE 5: SIGNIFICANT ACCOUNTING POLICIES: Stock Based Compensation (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Policies | |
Stock Based Compensation | Stock Based Compensation All stock-based payments to employees and to nonemployee directors for their services as directors, including any grants of restricted stock and stock options, are measured at fair value on the grant date and recognized in the statements of operations as compensation or other expense over the relevant service period. Stock-based payments to nonemployees are recognized as an expense over the period of performance. Such payments are measured at fair value at the earlier of the date a performance commitment is reached, or the date performance is completed. In addition, for awards that vest immediately and are non-forfeitable the measurement date is the date the award is issued. The Company accounts for stock options issued to non-employees based on the estimated fair value of the awards using the Black-Scholes option pricing model in accordance with ASC 505-50, Equity-Based Payment to Non-employees |
NOTE 5_ SIGNIFICANT ACCOUNTI_19
NOTE 5: SIGNIFICANT ACCOUNTING POLICIES: Research and Development (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Policies | |
Research and Development | Research and Development The Company accounts for research and development costs in accordance with the 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. Company-sponsored research and development costs related to both present and future products are expensed in the period incurred. For the three months ended March 31, 2021 and 2020 the Company incurred research and development expenses of $100,953 and $-0- from continuing operations, respectively. For the three months ended March 31, 2021 and 2020 the Company incurred research and development expenses of $-0- and $620,510 from discontinued operations, respectively. The Company has entered into various agreements with CROs. The Companys research and development accruals are estimated based on the level of services performed, progress of the studies, including the phase or completion of events, and contracted costs. The estimated costs of research and development provided, but not yet invoiced, are included in accrued liabilities on the balance sheet. If the actual timing of the performance of services or the level of effort varies from the original estimates, the Company will adjust the accrual accordingly. Payments made to CROs under these arrangements in advance of the performance of the related services are recorded as prepaid expenses and other current assets until the services are rendered. |
NOTE 5_ SIGNIFICANT ACCOUNTI_20
NOTE 5: SIGNIFICANT ACCOUNTING POLICIES: Recently Issued Accounting Standards (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Policies | |
Recently Issued Accounting Standards | Recently Issued Accounting Standards Accounting Standards Implemented Since December 31, 2020 ASC Update 2021-04 Earnings Per Share (Topic 260), DebtModifications and Extinguishments (Subtopic 470-50), CompensationStock Compensation (Topic 718), and Derivatives and HedgingContracts in Entitys Own Equity (Subtopic 815-40): Issuers Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (a consensus of the FASB Emerging Issues Task Force) The amendments in this Update affect all entities that issue freestanding written call options that are classified in equity. Specifically, the amendments affect those entities when a freestanding equity-classified written call option is modified or exchanged and remains equity classified after the modification or exchange. The amendments that relate to the recognition and measurement of EPS for certain modifications or exchanges of freestanding equity-classified written call options affect entities that present EPS in accordance with the guidance in Topic 260, Earnings Per Share. The amendments in this Update do not apply to modifications or exchanges of financial instruments that are within the scope of another Topic. That is, accounting for those instruments continues to be subject to the requirements in other Topics. The amendments in this Update do not affect a holders accounting for freestanding call options. ASC Update 2021-03 IntangiblesGoodwill and Other (Topic 350): Accounting Alternative for Evaluating Triggering Events The amendments in this Update provide private companies and not-for-profit entities with an accounting alternative to perform the goodwill impairment triggering event evaluation as required in Subtopic 350-20 as of the end of the reporting period, whether the reporting period is an interim or annual period. An entity that elects this alternative is not required to monitor for goodwill impairment triggering events during the reporting period but, instead, should evaluate the facts and circumstances as of the end of each reporting period to determine whether a triggering event exists and, if so, whether it is more likely than not that goodwill is impaired. An entity that does not elect the accounting alternative for amortizing goodwill and that performs its annual impairment test as of a date other than the annual reporting date should perform a triggering event evaluation only as of the end of the reporting period. The amendments in this Update do not require incremental disclosures beyond the existing requirements in Topic 235, Notes to Financial Statements, and Subtopic 350-20. ASC Update 2021-02 FranchisorsRevenue from Contracts with Customers (Subtopic 952-606): Practical Expedient The amendments in this Update introduce a new practical expedient that simplifies the application of the guidance about identifying performance obligations. The practical expedient permits franchisors that are not public business entities to account for pre-opening services provided to a franchisee as distinct from the franchise license if the services are consistent with those included in a predefined list within the guidance. ASC Update 2021-01 The amendments in this Update clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. Specifically, certain provisions in Topic 848, if elected by an entity, apply to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform. Amendments in this Update to the expedients and exceptions in Topic 848 capture the incremental consequences of the scope clarification and tailor the existing guidance to derivative instruments affected by the discounting transition. ASC Update No. 2020-10 In October 2020, the FASB issued ASC Update No. 2020-10, Codification Improvements. Update No. 2020-10 amends a wide variety of Topics in the Codification in order to improve the consistency of the Codification and the application thereof, while leaving Generally Accepted Accounting Principles unchanged. ASC Update No. 2020-06 In August 2020, the FASB issued ASC Update No. 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entitys Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entitys Own Equity. The amendments in Update No. 2020-06 simplify the complexity associated with applying U.S. GAAP for certain financial instruments with characteristics of liabilities and equity. More specifically, the amendments focus on the guidance for convertible instruments and derivative scope exception for contracts in an entitys own equity In March 2019, the FASB issued ASU 2019-01, Leases (Topic 842) Codification Improvements The Company has a long-term operating lease, and the long-term operating lease took effect in April 2020 (see note 15). In November 2018, the FASB issued ASU 2018-18 , Collaborative Arrangements (Topic 818): Clarifying the Interaction Between Topic 808 and Topic 606 See Note15 for more information related to the Companys lease obligations. In October 2018, the FASB issued ASU 2018-17, Targeted Improvements to Related Party Guidance for Variable Interest Entities In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customers Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. Other recent accounting pronouncements issued by the FASB and the SEC did not or are not believed by management to have a material impact on the Companys present or future consolidated financial statements. |
NOTE 2_ ACQUISITION OF SAPPHI_2
NOTE 2: ACQUISITION OF SAPPHIRE BIOTECH, INC.: Schedule of consideration paid (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Tables/Schedules | |
Schedule of consideration paid | Consideration: Cash and cash equivalents $ 79,814 Property and equipment, net 20,533 In process R&D 7,800,000 Goodwill 2,458,233 Security deposit 12,785 Total asset acquired $ 10,371,365 Accrued expenses and other current liabilities $ 5,767 Deferred taxes liability 2,340,000 Notes Payable including convertible and discount on conversion 519,598 Total liabilities assumed $ 2,865,365 Net assets acquired $ 7,506,000 |
NOTE 5_ SIGNIFICANT ACCOUNTI_21
NOTE 5: SIGNIFICANT ACCOUNTING POLICIES: Property and equipment: Schedule of property and equipment relating to continuing operations (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Tables/Schedules | |
Schedule of property and equipment relating to continuing operations | March 31, December 31, 2021 2020 Equipment of continuing operations $ 154,427 $ 134,788 Less: accumulated depreciation $ 37,044 $ 30,694 $ 117,383 $ 104,094 |
NOTE 5_ SIGNIFICANT ACCOUNTI_22
NOTE 5: SIGNIFICANT ACCOUNTING POLICIES: Intangible Assets: Schedule of intangible assets (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Tables/Schedules | |
Schedule of intangible assets | March 31, December 31, 2021 2020 Goodwill $ 2,458,233 $ 2,458,233 Research in progress $ 7,800,000 $ 7,800,000 $ 10,258,233 $ 10,258,233 Intangible assets of discontinued operations $ - $ - Less: accumulated amortization and impairment $ - $ - $ - $ - |
NOTE 6_ PREPAID EXPENSES_ Sched
NOTE 6: PREPAID EXPENSES: Schedule of Prepaid Expenses (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Tables/Schedules | |
Schedule of Prepaid Expenses | March 31, December 31, 2021 2020 Prepaid insurance $ 22,278 $ 45,983 Prepaid software/services 142,284 209,940 $ 164,562 $ 255,923 |
NOTE 10_ CONVERTIBLE NOTES PA_2
NOTE 10: CONVERTIBLE NOTES PAYABLE: Schedule of Convertible Notes Payable, Shareholder (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Tables/Schedules | |
Schedule of Convertible Notes Payable, Shareholder | March 31, December 31, 2021 2020 Convertible note payable, due on November 1, 2026, interest at 3.5% p.a. $ 4,000,000 $ 4,000,000 Accrued interest 193,648 158,648 Convertible note payable, net $ 4,193,648 $ 4,158,648 |
NOTE 10_ CONVERTIBLE NOTES PA_3
NOTE 10: CONVERTIBLE NOTES PAYABLE: Schedule of Convertible Note Payable of Related Party (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Tables/Schedules | |
Schedule of Convertible Note Payable of Related Party | March 31, December 31, 2021 2020 Convertible note payable, due on October 1, 2029, interest at 3.5% p.a. $ 484,478 $ 484,478 Convertible note payable, due on October 1, 2029, interest at 3.5% p.a. 1,000,000 1,000,000 Convertible note payable, due on December 31, 2034, interest at 3% p.a. 190,000 190,000 Convertible note payable, due on July 21, 2032, interest at 3.5% p.a. 609,835 609,835 Accrued interest (The accrued interest and principal are both included in the captions titled convertible note payable in the balance sheet) 256,259 236,148 Total 2,540,572 2,520,461 Less: unamortized debt discount/finance premium costs (821,846) (843,673) Convertible note payable, net $ 1,718,726 $ 1,676,788 |
NOTE 13_ STOCK OPTIONS_ Schedul
NOTE 13: STOCK OPTIONS: Schedule of Stock option activity (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Tables/Schedules | |
Schedule of Stock option activity | Options Outstanding Weighted Average Exercise Price Outstanding at December 31, 2019 2,000,000 $ 0.75 Granted 8,300,000 0.27 Exercised - - Expired or canceled - - Outstanding at December 31, 2020 10,300,000 0.36 Granted - - Exercised - - Expired or canceled - - Outstanding at March 31, 2021 10,300,000 $ 0.36 |
NOTE 13_ STOCK OPTIONS_ Sched_2
NOTE 13: STOCK OPTIONS: Schedule of options under Stock Option Plan (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Tables/Schedules | |
Schedule of options under Stock Option Plan | Options Outstanding Options Exercisable Weighted Average Exercise Price ($) Number Outstanding Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price ($) Number Exercisable Weighted Average Exercise Price ($) $ 0.36 10,300,000 9.5 $ 0.36 7,466,662 $ 0.36 As of December 31, 2020 Options Outstanding Options Exercisable Weighted Average Exercise Price ($) Number Outstanding Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price ($) Number Exercisable Weighted Average Exercise Price ($) $ 0.36 10,300,000 9.8 $ 0.36 7,466,662 $ 0.36 |
NOTE 13_ STOCK OPTIONS_ Sched_3
NOTE 13: STOCK OPTIONS: Schedule of assumptions to determine value of share-based compensation for options (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Tables/Schedules | |
Schedule of assumptions to determine value of share-based compensation for options | March 31, December 31, 2021 2020 Expected life (years) 10 10 Risk-free interest rate (%) 1.74 0.61 Expected volatility (%) 190 230 Dividend yield (%) - - Weighted average fair value of shares at grant date $ 1.74 $ 0.61 |
NOTE 14_ DISCONTINUED OPERATI_2
NOTE 14: DISCONTINUED OPERATIONS: Schedule of Discontinued Operations - Summary of assets and liabilities sold (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Tables/Schedules | |
Schedule of Discontinued Operations - Summary of assets and liabilities sold | Other current assets $ 5,000 Total current assets $ 510,017 Intangible assets, net of amortization $ 47,375 Total asset $ 562,392 Notes payable $ 880,000 Accounts payable and accrued expenses $ 210,640 Due to Canchew $ 1,526,603 Stock retired $ 1,857 Total liabilities and equity $ 2,619,100 The gain on sale of assets was reported during the period was determined as follows: Loss on sale of assets $ 562,392 Gain on sale of liabilities $ 2,619,100 Net gain from sale of assets and liabilities $ 2,056,708 |
NOTE 14_ DISCONTINUED OPERATI_3
NOTE 14: DISCONTINUED OPERATIONS: Summary of Results of Discontinued Operations (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Tables/Schedules | |
Summary of Results of Discontinued Operations | March 31, 2021 March 31, 2020 Net sales $ - $ 7,140 Total expenses $ 4,633 $ 1,166,086 Gain from sale of asset and liability $ - $ - Other loss (income) $ - $ 1,158,946 Loss from discontinued operations $ (4,633) $ (1,158,946) The following is a summary of net cash provided by or used in operating activities, investing activities and financing activities for the assets and liabilities held for sale (discontinued operations) for the three months ended March 31, 2021 and 2020: March 31, 2021 March 31, 2020 Income (loss) from discontinued operations $ (4,633) $ (1,158,946) Net cash provided by (used in) operating activities $ (4,633) $ (685,640) Net cash provided by (used in) investing activities $ - $ - Net cash provided by (used in) financing activities $ - $ - |
NOTE 15_ COMMITMENT AND CONTI_2
NOTE 15: COMMITMENT AND CONTINGENCIES: Summary of Right of Use Assets and Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Tables/Schedules | |
Summary of Right of Use Assets and Liabilities | Right-of-use assets $ 117,546 Lease liability obligations, current $ 43,545 Lease liability obligations, noncurrent 74,001 Total lease liability obligations $ 117,546 Weighted-average remaining lease term 2.08 years Weighted-average discount rate 6% |
NOTE 15_ COMMITMENT AND CONTI_3
NOTE 15: COMMITMENT AND CONTINGENCIES: Summary of Lease Expenses (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Tables/Schedules | |
Summary of Lease Expenses | The following table summarizes the lease expense for the three months ended March 31, 2021 and 2020: March 31, March 31, 2021 2020 Operating lease expense $ 14,139* $ - Short-term lease expense 3,213 - Total lease expense $ 17,352 $ - |
NOTE 15_ COMMITMENT AND CONTI_4
NOTE 15: COMMITMENT AND CONTINGENCIES: Schedule of Future Minimum Rental Payments for Operating Leases (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Tables/Schedules | |
Schedule of Future Minimum Rental Payments for Operating Leases | Remainder of 2021 $ 43,545 2022 59,416 2023 20,000 Total minimum payments 122,961 Less: amount representing interest (5,415) Total $ 117,546 |
NOTE 1_ ORGANIZATION (Details)
NOTE 1: ORGANIZATION (Details) | 3 Months Ended |
Mar. 31, 2021 | |
Details | |
Entity Incorporation, Date of Incorporation | Nov. 18, 2010 |
NOTE 2_ ACQUISITION OF SAPPHI_3
NOTE 2: ACQUISITION OF SAPPHIRE BIOTECH, INC.: Schedule of consideration paid (Details) | Mar. 31, 2021USD ($) |
Details | |
Consideration paid for Sapphire Biotech - Cash and cash equivalents | $ 79,814 |
Consideration paid for Sapphire Biotech - Property and equipment, net | 20,533 |
Consideration paid for Sapphire Biotech - In process R&D | 7,800,000 |
Consideration paid for Sapphire Biotech - Goodwill | 2,458,233 |
Consideration paid for Sapphire Biotech - Security deposit | 12,785 |
Consideration paid for Sapphire Biotech - Total asset acquired | 10,371,365 |
Consideration paid for Sapphire Biotech - Accrued expenses and other current liabilities | 5,767 |
Consideration paid for Sapphire Biotech - Deferred taxes liability | 2,340,000 |
Consideration paid for Sapphire Biotech - Notes Payable including convertible and discount on conversion | 519,598 |
Consideration paid for Sapphire Biotech - Total liabilities assumed | 2,865,365 |
Consideration paid for Sapphire Biotech - Net assets acquired | $ 7,506,000 |
NOTE 4_ GOING CONCERN (Details)
NOTE 4: GOING CONCERN (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Details | |||
Accumulated deficit | $ (42,714,458) | $ (41,849,922) | |
Net cash provided by (used in) operating activities from continuing operations | (560,828) | $ (387,874) | |
Net cash provided by (used in) operating activities from discontinued operations | $ (4,633) | $ (685,640) |
NOTE 5_ SIGNIFICANT ACCOUNTI_23
NOTE 5: SIGNIFICANT ACCOUNTING POLICIES: Property and equipment: Schedule of property and equipment relating to continuing operations (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Details | ||
Equipment of continuing operations | $ 154,427 | $ 134,788 |
Less: accumulated depreciation | 37,044 | 30,694 |
Property, Plant and Equipment, Net | $ 117,383 | $ 104,094 |
NOTE 5_ SIGNIFICANT ACCOUNTI_24
NOTE 5: SIGNIFICANT ACCOUNTING POLICIES: Intangible Assets: Schedule of intangible assets (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Details | ||
Goodwill | $ 2,458,233 | $ 2,458,233 |
Research in progress | 7,800,000 | 7,800,000 |
Finite-Lived Intangible Assets, Gross | 10,258,233 | 10,258,233 |
Intangible assets of discontinued operations | 0 | 0 |
Less: accumulated amortization and impairment | 0 | 0 |
Intangible Assets, Net (Including Goodwill) | $ 0 | $ 0 |
NOTE 5_ SIGNIFICANT ACCOUNTI_25
NOTE 5: SIGNIFICANT ACCOUNTING POLICIES: Research and Development (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Details | ||
Research and Development Expenses, Discontinued Operations | $ 100,953 | $ 0 |
Research and Development Expenses, Discontinued Operations | $ 0 | $ 620,510 |
NOTE 6_ PREPAID EXPENSES_ Sch_2
NOTE 6: PREPAID EXPENSES: Schedule of Prepaid Expenses (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Prepaid expenses | $ 164,562 | $ 255,923 |
Prepaid insurance | ||
Prepaid expenses | 22,278 | 45,983 |
Prepaid raw material/inventory | ||
Prepaid expenses | $ 142,284 | $ 209,940 |
NOTE 6_ PREPAID EXPENSES (Detai
NOTE 6: PREPAID EXPENSES (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Details | ||
Amortization of Prepaid Expenses | $ 32,870 | $ 31,280 |
NOTE 10_ CONVERTIBLE NOTES PA_4
NOTE 10: CONVERTIBLE NOTES PAYABLE: Schedule of Convertible Notes Payable, Shareholder (Details) - Convertible notes payable due to shareholder - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Debt Instrument, Face Amount | $ 4,000,000 | $ 4,000,000 |
Accrued interest | 193,648 | 158,648 |
Convertible note payable, net | $ 4,193,648 | $ 4,158,648 |
NOTE 12_ STOCKHOLDERS' DEFICIT
NOTE 12: STOCKHOLDERS' DEFICIT (Details) - shares | Mar. 31, 2021 | Dec. 31, 2020 |
Common Stock, Shares Authorized | 300,000,000 | 300,000,000 |
Common Stock, Shares, Issued | 127,528,507 | 125,327,579 |
Common Stock, Shares, Outstanding | 127,528,507 | 125,327,579 |
Preferred Stock | ||
Preferred Stock, Shares Authorized | 5,000,000 | 5,000,000 |
NOTE 13_ STOCK OPTIONS_ Sched_4
NOTE 13: STOCK OPTIONS: Schedule of options under Stock Option Plan (Details) - Common stock issued to employees and consultants under a stock option plan - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 |
Number Outstanding | 10,300,000 | 10,300,000 |
Weighted Average Remaining Contractual Life (Years) | 9 years 6 months | 9 years 9 months 18 days |
Weighted Average Exercise Price ($) | $ 0.36 | $ 0.36 |
Number Exercisable | 7,466,662 | 7,466,662 |
Weighted Average Exercise Price ($) | $ 0.36 | $ 0.36 |
NOTE 13_ STOCK OPTIONS_ Sched_5
NOTE 13: STOCK OPTIONS: Schedule of assumptions to determine value of share-based compensation for options (Details) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 |
Details | ||
Expected life (years) | 10 years | 10 years |
Risk-free interest rate (%) | 1.74% | 0.61% |
Expected volatility (%) | 190.00% | 230.00% |
Dividend yield (%) | 0.00% | 0.00% |
Weighted average fair value of shares at grant date | $ 1.74 | $ 0.61 |
NOTE 15_ COMMITMENT AND CONTI_5
NOTE 15: COMMITMENT AND CONTINGENCIES: Summary of Right of Use Assets and Liabilities (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Dec. 31, 2020 | ||
Details | |||
Operating lease right-of-use asset | $ 117,546 | $ 130,722 | |
Lease liability obligations (see note 15) | [1] | 43,545 | 53,851 |
Lease liability obligations (see note 15) | [2] | $ 74,001 | $ 76,871 |
Weighted-average remaining lease term | 2 years 29 days | ||
[1] | See Note 15. | ||
[2] | See note 15. |
NOTE 15_ COMMITMENT AND CONTI_6
NOTE 15: COMMITMENT AND CONTINGENCIES: Summary of Lease Expenses (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | ||
Details | |||
Operating lease expense | $ 14,139 | [1] | $ 0 |
Short-term lease expense | 3,213 | 0 | |
Total lease expense | $ 17,352 | $ 0 | |
[1] | We recorded $17,352 of operating lease expense this includes $3,213 of maintenance. |
NOTE 15_ COMMITMENT AND CONTI_7
NOTE 15: COMMITMENT AND CONTINGENCIES: Schedule of Future Minimum Rental Payments for Operating Leases (Details) | Mar. 31, 2021USD ($) |
Details | |
Operating Leases, Future Minimum Payments, Remainder of Fiscal Year | $ 43,545 |
Operating Leases, Future Minimum Payments, Due in Two Years | 59,416 |
Operating Leases, Future Minimum Payments, Due in Three Years | 20,000 |
Total minimum payments | 122,961 |
Less: amount representing interest | (5,415) |
Total | $ 117,546 |
NOTE 16_ SUBSEQUENT EVENTS (Det
NOTE 16: SUBSEQUENT EVENTS (Details) | 3 Months Ended |
Mar. 31, 2021 | |
Event #1 | |
Subsequent Event, Date | Apr. 5, 2021 |
Subsequent Event, Description | Company issued a total of 175,000 Common Stock Purchase Warrants |
Event #2 | |
Subsequent Event, Date | Apr. 5, 2021 |
Subsequent Event, Description | Company issued 344,828 restricted shares of its common stock |
Event #3 | |
Subsequent Event, Date | Apr. 5, 2021 |
Subsequent Event, Description | company issued 811,765 restricted shares of its common stock |
Event #4 | |
Subsequent Event, Date | May 14, 2021 |
Subsequent Event, Description | Company entered into the Equity Purchase Agreement with Cross |