UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
For
the quarterly period ended
OR
For the transition period from_____________ to _____________
Commission
file number:
(Exact name of registrant as specified in its charter)
| 2834 | ||||
| (State
or other jurisdiction of incorporation or organization) |
(Primary
Standard Industrial Classification Code Number) |
(I.R.S.
Employer Identification No.) |
| (Address of principal executive offices) | (Zip Code) |
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| Title of each class | Trading Symbol(s) |
Name of each exchange on which registered | ||
| OTCQB |
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |
| ☒ | Smaller Reporting Company | |||
| Emerging Growth Company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate
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The amount of registered shares of the registrant’s Common Stock as of April 19, 2024 was .
BIOXYTRAN, INC.
FORM 10-Q
TABLE OF CONTENTS
Except as otherwise required by the context, all references in this report to “we”, “us”, “our” or “Company” refer to the consolidated operations of BIOXYTRAN, Inc.
PART I - FINANCIAL INFORMATION
Item 1. Unaudited Condensed Consolidated Financial Statements: BIOXYTRAN, Inc., March 31, 2024
BIOXYTRAN, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2024 AND DECEMBER 31, 2023
(UNAUDITED)
March 31, 2024 | December 31, 2023 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash | $ | $ | ||||||
| Total current assets | ||||||||
| Intangibles, net | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Accounts payable affiliate | ||||||||
| Un-issued shares liability | ||||||||
| Un-issued shares liability affiliate | ||||||||
| Short term loan | ||||||||
| Short term loan affiliate | ||||||||
| Convertible notes payable, net of premium and discount | ||||||||
| Total current liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies | ||||||||
| Stockholders’ deficit | ||||||||
Preferred stock, $ par value; shares authorized, issued and outstanding | ||||||||
Common stock, $ par value; shares authorized; and issued and outstanding as at March 31, 2024 and December 31, 2023, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Non-controlling interest | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ deficit | ( | ) | ( | ) | ||||
| Total liabilities and stockholders’ deficit | $ | $ | ||||||
See the accompanying notes to these unaudited condensed consolidated financial statements
| 1 |
BIOXYTRAN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
IN THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023
(UNAUDITED)
| 3-Months Ended | ||||||||
March 31, 2024 | March 31, 2023 | |||||||
| Operating expenses | ||||||||
| Research and development | $ | $ | ||||||
| General and administrative | ||||||||
| General and administrative affiliate | ||||||||
| Compensation expense | ||||||||
| Compensation expense affiliate | ||||||||
| Total operating expenses | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other expenses: | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Interest expense affiliate | ( | ) | ||||||
| Amortization of IP | ( | ) | ( | ) | ||||
| Total other expenses | ( | ) | ( | ) | ||||
| Net loss before provision for income taxes | ( | ) | ( | ) | ||||
| Provision for income taxes | ||||||||
| Net loss | ( | ) | ( | ) | ||||
| Net loss attributable to the non-controlling interest | ||||||||
| NET LOSS ATTRIBUTABLE TO BIOXYTRAN | $ | ( | ) | $ | ( | ) | ||
| Loss per common share, basic and diluted | $ | ) | $ | ) | ||||
| Weighted average number of common shares outstanding, basic and diluted | ||||||||
See the accompanying notes to these unaudited condensed consolidated financial statements
| 2 |
BIOXYTRAN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
IN THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023
(UNAUDITED)
| Common Stock | Preferred Stock | Additional Paid in Capital | Accumulated | Non- controlling | Total | |||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Common | Preferred | Deficit | Interest | Deficit | ||||||||||||||||||||||||||||
| January 1, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||
| Stock transactions | ||||||||||||||||||||||||||||||||||||
| Stock subscription | ( | ) | ( | |||||||||||||||||||||||||||||||||
| Net loss attributable to the non-controlling interest | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| March 31, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||
| January 1, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | ( | ) | |||||||||||||||||||||||||
| Stock transactions | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Stock subscription | ( | ) | ||||||||||||||||||||||||||||||||||
| Shares issued affiliate - 2021 Plan | ||||||||||||||||||||||||||||||||||||
| Shares issued - 2021 Plan | ||||||||||||||||||||||||||||||||||||
| Shares issued for the conversion of accounts payable affiliate | ||||||||||||||||||||||||||||||||||||
| Shares issued for the conversion of accounts payable | ||||||||||||||||||||||||||||||||||||
| Shares issued for the conversion of notes payable and accrued interest | ||||||||||||||||||||||||||||||||||||
| Shares issued for the conversion of warrants | ( | ) | ||||||||||||||||||||||||||||||||||
| Net loss attributable to the non-controlling interest | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| March 31, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||
See the accompanying notes to these unaudited condensed consolidated financial statements
| 3 |
BIOXYTRAN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
IN THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023
(UNAUDITED)
| 3-Months Ended | ||||||||
March 31, 2024 | March 31, 2023 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities | ||||||||
| Amortization of IP | ||||||||
| Stock-based compensation expense | ||||||||
| Stock-based compensation expense affiliate | ||||||||
| Interest paid for conversion of note | ||||||||
| Changes in operating assets and liabilities | ||||||||
| Accounts payable and accrued expenses | ||||||||
| Accounts payable and accrued expenses affiliate | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Investment in intangibles | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Proceeds from subsidiary stock transactions | ||||||||
| Proceeds from stock subscriptions | ||||||||
| Proceeds from issuance of convertible notes payable | ||||||||
| Net cash provided by financing activities | ||||||||
| Net increase (decrease) in cash | ( | ) | ( | ) | ||||
| Cash, beginning of period | ||||||||
| Cash, end of period | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||||||||
| Interest paid | $ | $ | ||||||
| Income taxes paid | $ | $ | ||||||
| NON-CASH INVESTING & FINANCING ACTIVITIES | ||||||||
| Common shares issued for the conversion of principal and accrued interest | $ | $ | ||||||
| Common shares issued for the conversion of accounts payable | ||||||||
| Common shares issued for the conversion of accounts payable affiliate | $ | $ | ||||||
See the accompanying notes to these unaudited condensed consolidated financial statements
| 4 |
BIOXYTRAN, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
IN THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023
(UNAUDITED)
NOTE 1 – BACKGROUND AND ORGANIZATION
Business Operations
Bioxytran, Inc. (the “Company”) is a clinical stage pharmaceutical company focused on the development, manufacture and commercialization of therapeutic drugs designed to address hypoxia in humans, which is a lack of oxygen to tissues, in a safe and efficient manner.
Our Subsidiary, Pharmalectin, Inc. (the “Subsidiary”) is a clinical stage pharmaceutical company focused on the development, manufacture and commercialization of therapeutic drugs designed to address conditions related to viral diseases.
Our Foreign Subsidiary, Pharmalectin (BVI), Inc. (the “Foreign Subsidiary”) is the owner and custodian of the Company’s Copyrights, Trademarks and Patents.
Our subsidiary, Pharmalectin India Pvt Ltd. (“Pharmalectin India”) is managing the Company’s local clinical research and trials, and holds the local rights to commercialization.
Organization
Bioxytran,
Inc. was organized on October 5, 2017 as a Delaware corporation, with a taxing structure for U.S. federal and state income tax as a C-Corporation
with authorized shares of Common Stock with a par value of $, and shares of Preferred Stock with a par value
of $. On September 21, 2018, the Company underwent a reorganization in the form of a reverse merger and is currently registered
as a Nevada corporation with a taxing structure for U.S. federal and state income tax as a C-Corporation with authorized
Common shares with a par value of $, and Preferred shares with a par value of $. As at March 31, 2024 there are
shares of Common Stock issued and outstanding; shares (
Pharmalectin
was organized on October 5, 2017, as a Delaware corporation, with a taxing structure for U.S. federal and state income tax as a C-Corporation
with authorized shares of Common Stock with a par value of $, and shares of Preferred Stock, none outstanding,
with a par value of $. The Subsidiary was founded under the name of Bioxytran “Bioxytran (DE)”. On April 29, 2020,
the name was changed to Pharmalectin, Inc. As at March 31, 2024, there are shares of Common Stock issued and outstanding;
(
Pharmalectin BVI was organized on March 17, 2021, as a British Virgin Islands (BVI) Business Corporation with a BVI corporate taxing structure with authorized and outstanding shares with a par value of $. The Company holds 100% of the shares in the Subsidiary.
Pharmalectin
India Pvt Ltd. (“Pharmalectin India”) was organized on August 30, 2022, as an Indian Business Corporation with its principal
place of business in Hyderabad, Telangana, India, with authorized shares with a par value of $ (₹). There are currently
outstanding shares whereof (
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”), including the instructions to Form 10-Q and Regulation S-X. Certain information and note disclosures normally included in financial statements prepared in accordance with US GAAP, have been condensed or omitted from these statements pursuant to such rules and regulations and, accordingly, they do not include all the information and notes necessary for comprehensive financial statements and should be read in conjunction with our audited consolidated financial statements.
| 5 |
While the information presented in the accompanying financial statements is unaudited, it includes all adjustments which are, in the opinion of the management, necessary to present fairly the financial position, results of operations and cash flows for the periods presented in accordance with the accounting principles generally accepted in the United States of America (“US GAAP”). In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are statements prepared in accordance with US GAAP have been condensed or omitted. These financial statements should be read in conjunction with the Company’s December 31, 2022, audited financial statements and notes.
Principles of Consolidation
The accompanying unaudited condensed consolidated financial statements include the accounts of Bioxytran, Inc. a Nevada Corporation, its majority owned subsidiary, Pharmalectin, Inc. of Delaware, as well as its wholly owned subsidiaries, Pharmalectin (BVI), Inc. of British Virgin Islands and Pharmalectin India Pvt Ltd. (collectively, the “Company”). All intercompany accounts have been eliminated upon consolidation.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of the significant accounting policies applied in the preparation of the accompanying financial statements follows.
Cash
For purposes of the Statement of Cash Flows, the Company considers all highly liquid debt instruments purchased with an original maturity date of three months or less to be cash equivalents.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of expenses during the reporting period. Significant estimates include the fair value of the Company’s stock, stock-based compensation, valuation of warrants, valuations in connection with convertible notes and the valuation allowance related to deferred tax assets. Actual results may differ from these estimates.
The Company computes earnings (loss) per share under Accounting Standards Codification subtopic 260-10, Earnings Per Share (“ASC 260-10”). Net loss per common share is computed by dividing net loss by the weighted average number of shares of Common Stock outstanding during the year. Diluted earnings per share, if presented, would include the dilution that would occur upon the exercise or conversion of all potentially dilutive securities into Common Stock using the “treasury stock” and/or “if converted” methods as applicable.
At
March 31, 2024, we would, based on the market price of $/share, be obligated to issue approximately shares of Common
Stock upon conversion of the currently outstanding convertible notes (the “2021 Notes”), shares upon exercise of
the warrants, and shares upon exercise of outstanding options, or a total of shares of Common Stock. For the Notes,
the shares total is based on $
The
(
The Company measures the cost of services received from employees and non-employees in exchange for an award of equity instruments based on the fair value of the award on the grant date pursuant ASC 718. Stock-based compensation expense is recorded by the Company over the requisite service period, or vesting period, in the same expense classifications in the statements of operations, as if such amounts were paid in cash.
| 6 |
Accounting for subsidiary stock transactions
The Company accounts for subsidiary stock transactions in accordance with Opinions of the Accounting Principles Board 09 (APBO No. 9). In paragraph 28, this pronouncement excluded all adjustments from transactions in a company’s own stock “…from the determination of net income or the results of operations under all circumstances.”
Research and Development
The
Company accounts for research and development costs in accordance with Accounting Standards Codification subtopic 730-10, Research and
Development (“ASC 730-10”). Under ASC 730-10, all research and development costs must be charged to expense as incurred.
Accordingly, internal research and development costs are expensed as incurred. Third-party research and development costs are expensed
when the contracted work has been performed or as milestone results have been achieved as defined under the applicable agreement. Company-sponsored
research and development costs related to both present and future products are expensed in the period incurred. In the three months ended
March 31, 2024, the Company incurred $
Intangibles – Goodwill and Other
Valuation of intangibles are in accordance with ASC 350. Costs associated with the application and award of patents in the U.S. and various other countries are capitalized and amortized on a straight-line basis over the term of the patents as determined at award date, which varies depending on the pendency period of the application, generally approximating seventeen years. Capitalized patent costs, also referred to as patent prosecution costs, include internal legal labor, professional legal fees, government filing fees and translation fees related to expanding the Company’s patent portfolio. Costs associated with the maintenance and annuity fees of patents are accounted for as prepaid assets at the time of payment and amortized over the shorter of the maintenance period or remaining life of the related patent.
Accrued Expenses
As part of the process of preparing our condensed consolidated financial statements, we are required to estimate accrued expenses. This process involves identifying services that third parties have performed on our behalf and estimating the level of service performed and the associated cost incurred on these services as at each balance sheet date in our consolidated financial statements. Examples of estimated accrued expenses include professional service fees, such as those arising from the services of attorneys and accountants and accrued payroll expenses. In connection with these service fees, our estimates are most affected by our understanding of the status and timing of services provided relative to the actual services incurred by the service providers. In the event that we do not identify certain costs that have been incurred or we under, or over, -estimate the level of services or costs of such services, our reported expenses for a reporting period could be understated or overstated. The date on which certain services commence, the level of services performed on or before a given date, and the cost of services are often subject to our judgment. We make these judgments based upon the facts and circumstances known to us in accordance with accounting principles generally accepted in the U.S.
Warrants
The Company has issued Common Stock warrants in connection with the execution of certain equity and debt financings. The fair value of warrants is determined using the Black-Scholes option-pricing model using assumptions regarding volatility of our common share price, remaining life of the warrant, and risk-free interest rates at each period end.
Fair Value
Accounting Standards Codification subtopic 825-10, Financial Instruments (“ASC 825-10”) requires disclosure of the fair value of certain financial instruments. The carrying value of cash and cash equivalents, accounts payable and accrued liabilities, and short-term borrowings, as reflected in the balance sheets, approximate fair value because of the short-term maturity of these instruments. All other significant financial assets, financial liabilities and equity instruments of the Company are either recognized or disclosed in the financial statements together with other information relevant for making a reasonable assessment of future cash flows, interest rate risk and credit risk. Where practicable the fair values of financial assets and financial liabilities have been determined and disclosed; otherwise only available information pertinent to fair value has been disclosed.
The Company follows Accounting Standards Codification subtopic 820-10, Fair Value Measurements and Disclosures (“ASC 820-10”) and Accounting Standards Codification subtopic 825-10, Financial Instruments (“ASC 825-10”), which permits entities to choose to measure many financial instruments and certain other items at fair value.
| 7 |
Recent Accounting Pronouncements
In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2022, and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company adopted ASU 2020-06 effective January 1, 2021. The adoption of ASU 2020-06 did not have an impact on the Company’s financial statements.
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed interim financial statements.
NOTE 3 – GOING CONCERN AND MANAGEMENT’S LIQUIDITY PLANS
As
at March 31, 2024, the Company had cash of $
During
the three months ended March 31, 2024, the Company raised a net of $
The Company intends to raise additional capital through private placements of debt and equity securities, but there can be no assurance that these funds will be available on terms acceptable to the Company, or will be sufficient to enable the Company to fully complete its development activities or sustain operations. If the Company is unable to raise sufficient additional funds, it will have to develop and implement a plan to further extend payables, reduce overhead, or scale back its current business plan until sufficient additional capital is raised to support further operations. There can be no assurance that such a plan will be successful.
The Company’s management does not know the full extent or foresee the impact COVID-19 has had on our business or our operations or its ability to carry out our plans. We will continue to monitor and follow this situation closely.
Accordingly, the accompanying unaudited condensed consolidated financial statements have been prepared in conformity with U.S. GAAP, which contemplates continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the unaudited condensed consolidated financial statements do not necessarily purport to represent realizable or settlement values. The unaudited condensed consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty.
NOTE 4 - AFFILIATE TRANSACTIONS
The
Company holds License Agreements (the “License(s)” or “Agreement(s)”) for a medical device (license obtained
in 2019) and a compound (license obtained in 2021), with two affiliated companies where the beneficial ownership includes Mike Sheikh,
Ola Soderquist and David Platt. The products were developed prior to the establishment of Bioxytran. The maintenance fees for each license
amount to $
The
Company had at March 31, 2024 loan agreements calling for an
| 8 |
NOTE 5 - INTANGIBLES
Intangible
assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not
be recoverable.
Amortization of capitalized patent costs associated with the application and award of patents in the U.S. and various other countries are capitalized and amortized on a straight-line basis over the term of the patents as determined at the award date, which varies depending on the pendency period of the application, generally approximating twenty years.
| Estimated Remaining Life (years) | March 31, 2024 | December 31, 2023 | ||||||||||
| Capitalized patent costs | $ | $ | ||||||||||
| Accumulated amortization | ( | ) | ( | ) | ||||||||
| Intangible assets, net | $ | $ | ||||||||||
NOTE 6 – ACCOUNTS PAYABLES AND ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
On
March 31, 2024, there was $
The following table represents the major components of accounts payables and accrued expenses and other current liabilities at March 31, 2024, and at December 31, 2023:
March 31, 2024 | December 31, 2023 | |||||||
| Accounts payable affiliate (1) | $ | $ | ||||||
| Professional fees | ||||||||
| Interest affiliate (2) | ||||||||
| Interest | ||||||||
| Other | ||||||||
| Un-issued share liability, affiliate (3) | ||||||||
| Un-issued share liability, consultant | ||||||||
| Short term loan from Affiliate (2) | ||||||||
| Short term Loan | ||||||||
| Convertible note payable | ||||||||
| Total current liabilities | $ | $ | ||||||
| (1) | |
| (2) | |
| (3) |
NOTE 7 – CONVERTIBLE NOTES PAYABLE
Private Placement, 2021 Notes currently outstanding
Around
May 3, 2021, we entered into four (4) Securities Purchase Agreements (the “2021 SPA’s”), under which we agreed to sell
convertible promissory notes (the “2021 Notes”), in an aggregate principal amount of $
| 9 |
At
any time after the issue date of the Notes, the Holders of the Notes, (the “2021 Holders”), have the option to convert all
or any part of the outstanding and unpaid principal amount and accrued and unpaid interest of the 2021 Notes into shares of our Common
Stock at the Conversion Price.
If the 2021 Notes are converted prior to us paying off such note, it would lead to substantial dilution to our shareholders as a result of the conversion discounted applicable to the 2021 Notes. There can be no assurance that there will be any funds available to pay of the 2021 Notes. If we fail to obtain such additional financing on a timely basis, the 2021 Holders may convert the 2021 Notes and sell the underlying shares, which may result in significant dilution to shareholders due to the conversion discount, as well as a significant decrease in our stock price.
On
May 5, 2023, three (3) of the Notes were renegotiated; the interest was set to
At March 31, 2024 and December 31, 2023, the outstanding convertible notes were as follows:
| Name | Principal due | Accrued interest | Total amount due | |||||||||||||
| December 31, 2023 | ||||||||||||||||
| Private Placement, 2021 Note | (1 | ) | $ | $ | $ | |||||||||||
| 2021 Note issued in exchange for prior Notes | (2 | ) | ||||||||||||||
| $ | $ | $ | ||||||||||||||
| March 31, 2024 | ||||||||||||||||
| Private Placement, 2021 Note | (3 | ) | $ | $ | $ | |||||||||||
| (1) | |
| (2) | |
| (3) | In
the first quarter of 2024 a total of $ |
Private Placement, 2024
On
March 15, 2024, we entered into a Security Purchase Agreements (the “2024 SPA’s”), with an accredited investor, under
which we agreed to sell a Note, in a principal amount of $
At
any time after the issue date of the 2024 Note, the 2024 Holder has the option to convert any part of the outstanding and unpaid principal
amount and accrued and unpaid interest of the Note into shares of our Common Stock at the Conversion Price. The “Conversion Price”
is set to $
The Common Stock underlying the 2024 Note, when issued, bear a restrictive legend and are currently eligible for resale under Rule 144.
| Name | Principal due | Accrued interest | Total amount due | |||||||||
| March 31, 2024 | ||||||||||||
| Private Placement, 2024 Note | $ | $ | ||||||||||
NOTE 8 – STOCKHOLDERS’ EQUITY
The Company is authorized to issue shares of Common Stock, and shares of Preferred Stock.
| 10 |
Preferred Stock
As at March 31, 2024, Preferred shares have been designated nor issued.
Common Stock
As at January 1, 2023, there were shares of Common Stock issued and outstanding.
Issuances in the period January 1 and March 31, 2023
On
January 4, 2023 the Company issued shares of Common Stock against $
On
February 10, 2023 the Company issued shares of Common Stock against $
Issuances in the period January 1 and March 31, 2024
On
January 17, 2024, the Company issued shares of Common Stock in a private placement against $
On
January 18, 2024, the Company issued shares of Common Stock in exchange for invoices of $
On
January 18, 2024, the Company issued shares of Common Stock to offset an affiliate against invoices paid on behalf of the Company
and accrued salaries to our Officers, for a total value of $
On January 19, 2024, the Company returned shares of Common Stock into treasury. The shares outstanding at year end were included in the value of Common Stock and reversed in Additional Paid in Capital (“APIC”) at par, $.
On
March 20, 2024, the Company issued shares of Common Stock against a principal of $
On
January 22, 2024, the Company issued shares of Common Stock in a cash-less exercise in exchange for shares in Pharmalectin
at a fixed conversion rate of
On
January 22, 2024, the Company issued shares of Common Stock in conversion of a note of $
On
March 27, 2024, the Company issued in exchange for invoices in the amount of $
2021 Stock Plan issuances in the period January 1 and March 31, 2024
In
the first three months of 2024, the Company issued shares of Common Stock to its Board members and Management for their contribution
throughout the year 2023. The shares had a fair value of $
In
the first three months of 2024, the Company issued shares of Common Stock to twelve consultants for their contribution throughout
the year 2023. The shares had a fair value of $
As at March 31, 2024, the Company has shares of Common Stock issued and outstanding.
Common Stock Warrants
In the 3 months ended March 31, 2024 and 2023 the Company did not issue any Warrants.
The following table summarizes the Company’s Common Stock warrant activity in the 3 months ended March 31, 2024 and 2023:
| Number of Warrants* | Weighted Average Exercise Price | Weighted- Average Remaining Expected Term | ||||||||||
| Outstanding as at January 1, 2023 | $ | |||||||||||
| Granted | — | |||||||||||
| Exercised | — | |||||||||||
| Forfeited/Canceled | — | |||||||||||
| Outstanding as at March 31, 2023 | $ | |||||||||||
| Outstanding as at January 1, 2024 | $ | |||||||||||
| Granted | — | |||||||||||
| Exercised | — | |||||||||||
| Forfeited/Canceled | — | |||||||||||
| Outstanding as at March 31, 2024 | $ | |||||||||||
| * |
| 11 |
The following table summarizes information about stock warrants that are vested or expected to vest at March 31, 2024, with a market price of $ at March 31, 2024:
| Warrants Outstanding | Exercisable Warrants | |||||||||||||||||||||||||||||
| Number of Warrants | Weighted Average Exercise Price Per Share | Weighted Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value | Number of Warrants | Weighted Average Exercise Price Per Share | Weighted Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value | |||||||||||||||||||||||
| $ | $ | $ | $ | |||||||||||||||||||||||||||
The weighted-average remaining contractual life for warrants exercisable at December 31, 2023, is years. The aggregate intrinsic value for fully vested, exercisable warrants was $ at March 31, 2024.
On
January 15, 2021, the Company adopted a stock option plan entitled “The 2021 Stock Plan” (2021 Plan) under which the Company
may grant Options to Purchase Stock, Stock Awards or Stock Appreciation Rights up to
As
at January 1, 2024, there were outstanding stock options valued at historic fair market value of $ and a cumulative
shares issued valued at a fair historic market value of $
Under the terms of the stock plans, the Board of Directors shall specify the exercise price and vesting period of each stock option on the grant date. Vesting of the options is typically immediate and the options typically expire in five years. Stock Awards may be directly issued under the Plan (without any intervening options). Stock Awards may be issued which are fully and immediately vested upon issuance.
| Number of Shares | Fair Value per Share | Weighted Average Market Value per Share | ||||||||||
| Shares Issued as of January 1, 2023 | $ | – | $ | ( | ) | |||||||
| Shares Issued | ||||||||||||
| Shares Issued as of March 31, 2023 | – | ( | ) | |||||||||
| Shares Issued as of January 1, 2024 | – | |||||||||||
| Shares Issued | – | |||||||||||
| Shares Issued as of March 31, 2024 | $ | – | $ | |||||||||
In the three months ended March 31, 2024 and 2023, the Company recorded stock-based compensation expense of $ and $, respectively, in connection with share-based payment awards. There were no awards from the 2021 Plan in the three months ended March 31, 2023.
| 12 |
Issuances in the period January 1 and March 31, 2024
On March 27, 2024 the Company issued shares of Common Stock to three Board members for their contribution during the fourth quarter of 2023. The shares had a fair value of $ and were included in Stockholders Equity as Stock Subscription at December 31, 2023, or $/share.
On March 27, 2024 the Company issued shares of Common Stock to three Consultants for their contribution during the fourth quarter of 2023. The shares had a fair value of $ and were included in Stockholders Equity as Stock Subscription at December 31, 2023, or $/share.
On March 27, 2024 the Company issued shares of Common Stock, as an equity bonus for the year 2023, to its Board and Management. The shares had a fair value of $, or $/share.
On March 27, 2024 the Company issued shares of Common Stock, as an equity bonus to thirteen Consultants that had contributed to the Company’s R&D during 2023. The shares had a fair value of $, or $/share.
On March 27, 2024 the Company mistakenly issued shares of Common Stock, $ was accounted in Common Stock against APIC.
Stock options granted and vested 2021 Plan:
There were stock options granted the three months ended March 31, 2024, while, were forfeited. There were stock options granted the three months ended March 31, 2024, while, were forfeited.
| Number of Options | Exercise Price per Share | Weighted Average Exercise Price per Share | ||||||||||
| Outstanding as of January 1, 2023 | $ | – | $ | |||||||||
| Granted | ||||||||||||
| Exercised | ||||||||||||
| Options forfeited/cancelled | ( | ) | – | |||||||||
| Outstanding as of March 31, 2023 | $ | - | $ | |||||||||
| Outstanding as of January 1, 2024 | $ | - | $ | |||||||||
| Granted | ||||||||||||
| Exercised | ||||||||||||
| Options forfeited/cancelled | ( | ) | ||||||||||
| Outstanding as of March 31, 2024 | $ | - | $ | |||||||||
| Options Outstanding | Exercisable Options | |||||||||||||||||||||||||||||||||
| Exercise Price | Number of Options | Weighted Average Exercise Price Per Share | Weighted Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value | Number of Options | Weighted Average Exercise Price Per Share | Weighted Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value | ||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| $ | - | $ | $ | $ | $ | |||||||||||||||||||||||||||||
There were no granted options granted, nor any options issued in the period ended March 31, 2024 and 2023:
The weighted-average remaining estimated life for options exercisable at March 31, 2024 is years.
The
aggregate intrinsic value for fully vested, exercisable options was $ at March 31, 2024 and at December 31, 2023 was $. The
actual tax benefit realized from stock option exercises in the three months ended at March 31, 2024 and 2023 was $
As at March 31, 2024 the Company has options or stock awards available for grant under the 2021 Plan.
| 13 |
NOTE 10 – NON-CONTROLLING INTEREST
March 31, 2024 | December 31, 2023 | |||||||
| Net loss Subsidiary | ( | ) | ( | ) | ||||
| Net loss attributable to the non-controlling interest | ||||||||
| Net loss affecting Bioxytran | ( | ) | ( | ) | ||||
| Accumulated losses | ( | ) | ( | ) | ||||
| Accumulated losses attributable to the non-controlling interest | ||||||||
| Accumulated losses affecting Bioxytran | ( | ) | ( | ) | ||||
| Net equity non-controlling interest | ( | ) | ( | ) | ||||
As
at March 31, 2024, there are
issued and outstanding shares in Pharmalectin;
(
NOTE 11 – COMMITMENTS AND CONTINGENCIES
Employment contracts
Our Executive Officers have entered into employment contracts and confidentiality, non-disclosure and assignment of invention agreements. The most substantial provisions include;
| ● | Compensation of three (3) times the employee’s annual salary upon the Termination Date and any target bonus earned, or if termination occurs within 12 months of a change in control, then the terminated employee shall receive two (2) times the employee’s annual salary and any target bonus earned. | |
| ● | Continued coverage under any health, medical, dental or vision program or policy, in which they were eligible to participate at the time of employment termination, for 12 months. | |
| ● | Provide
outplacement services through one or more outside firms of the employee’s choosing up to an aggregate of $ |
There are no other arrangements or plans in which we provide pension, retirement or similar benefits for any of Executive Officers or Directors.
Litigation
In the normal course of business, the Company may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance. Legal fees for such matters are expensed as incurred and we accrue for adverse outcomes as they become probable and estimable.
NOTE 12 – SUBSEQUENT EVENTS
The Company has evaluated events from March 31, 2024 through the date the financial statements were issued. The events requiring disclosure for this period are as follows;
Remuneration Adjustment by Management Team
The management team will reduce their compensation with 67% for the remainder of 2024, or until the Company is listed on a major national stock exchange, whichever comes first.
| 14 |
Common stock
Stock Subscription
On
May 15, 2024, the Company issued shares of Common Stock for a cash investment of $
Conversion of Note
On
May 15, 2024, the Company issued shares of Common Stock in conversion of a note of $
Shares Awarded under the 2021 Stock Plan
On
April 4, 2024, the Company issued shares of Common Stock to a consultant as payment for a 12-month investor relations agreement.
The shares fair value was $
On
April 5, 2024 the Company corrected an issuance of made on March 27, 2023. $
On
May 19, 2024, the Company issued shares of Common Stock to affiliates for their service in the Board of Directors during the
first quarter of 2024. The fair value of these shares was $
On May 19, 2024, the Company issued shares of Common Stock to non-affiliates for their services during the first quarter of 2024. The fair value of these shares was $, or $/share. The issuance was included as unissued shares related party in the financial statements at March 31, 2024.
Management sees no further subsequent events requiring disclosure.
| 15 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis is based on, and should be read in conjunction with, the audited financial statements and the notes thereto for the two years ended December 31, 2023, included in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 31, 2024. This discussion contains forward-looking statements. These statements are often identified by the use of words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,” or “continue,” and similar expressions or variations. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. The forward-looking statements in this Quarterly Report on Form 10-Q represent our views as of the date of this Quarterly Report on Form 10-Q. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so, except to the extent required by applicable law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Quarterly Report on Form 10-Q.
Overview
We do not currently have sufficient capital resources to fund operations. To stay in business and to continue the development of our products, we will need to raise additional capital through public or private sales of our securities, debt financing or short-term bank loans, or a combination of the foregoing. We believe that if we can raise $3,700,000, we will have sufficient working capital to develop our business over the next approximately fifteen (15) months. At funding raised that is significantly less than $3,700,000, we can likely continue to develop our business over the same 15-month period, but funding at that level will delay the development of our technology and business.
Bioxytran, Inc. is headquartered in Needham, Massachusetts. The Company’s initial product pipeline is focused on developing and commercializing therapeutic molecules for stroke. BXT-25 will be designed to be an injectable anti-necrosis drug specifically designed to treat a person immediately after that person suffers an ischemic stroke. The drug is designed to be injected intravenously to travel to the lungs to pick up oxygen molecules to carry to the brain. Like a red blood cell, the drug will cross the blood brain barrier, which is a protective semi-permeable membrane allowing some material to cross but preventing others from crossing. BXT-25 will be designed to diffuse oxygen into the brain tissues. We expect the BXT-25 molecule to be 5,000 times smaller than a red blood cell.
Our Subsidiary is focusing on the development, manufacturing and commercialization of therapeutic drugs designed to address viral diseases in humans. The Company has developed a novel method designed to reduce the viral load and modulate the immune system using a Galectin Antagonist. The lead drug candidate is a glyco-virology platform technology named ProLectin, a complex galectin antagonist that binds to, and blocks the activity of galectin-3, a type of galectin. During viral infections galectins are upregulated and downregulated based on the type of virus. To our knowledge, Pharmalectin, Inc. is the only company planning to develop, what we believe is a viable, end-to-end solution for upper respiratory viruses. We are also the only company, to our knowledge, attempting to use a Galectin Antagonist to combat upper respiratory viruses, eg SARS-CoV-2, Influenza N1H1 and Respiratory Syncytial Virus (RSV).
On December 2, 2022, India’s Central Drugs Standard Control Organisation (CDSCO) issued an IND with permission to conduct: “A Phase 1b/2a Randomized, Blinded, placebo-controlled Study in Participants with Mild to Moderate COVID-19 to Evaluate the Safety, Efficacy, and Pharmacokinetics of Orally Administered ProLectin-M”. The trial is planned to start on, or around, October 1, 2023.
On August 21, 2023, the Company’s IND #153742 under the title “PROTECT: ProLectin-M, a nucleocapsid TErminal GaleCTin antagonist for COVID-19 (PROTECT), a Randomized, Double-blinded Clinical Trial to Evaluate the Efficacy and Safety in Non-Hospitalized Adult Participants with COVID-19” was approved by the FDA, the trial is expected to start in the first quarter of 2024, provided we obtain adequate funding.
On January 27, 2023, an additional IND with the CDSCO was issued for ProLectin-I for an “IV treatment of SARS-CoV-2 in hospitalized patients with moderate Covid-19 infections and for Long Covid”, and for ProLectin-F for “treatment of lung-fibrosis as a result of use of ventilator”.
On April 19, 2023, the Company announced that its Acelluar Oxygen Carrier (“AOC”) BXT-25 has been successfully tested in animals. The initial results are very encouraging because they show the non-toxicity of the experimental drug, along with the corresponding full recovery in Swiss Albino mice, in an experiment carried out in a joint venture with NDPD Pharma, Inc. As a next step, the Company intends to proceed with a 14-day repeated dose toxicity study using New Zealand Rabbits and Wistar Rats as funding permits.
| 16 |
The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company has limited resources and operating history. The Company currently has convertible loans outstanding at a total face value of $861,500. As shown in the accompanying consolidated financial statements, the Company had an accumulated deficit of $16,297,931 as at March 31, 2024. The accumulated deficit as at December 31, 2023, was $15,497,602.
The future of the Company is dependent upon its ability to obtain financing to develop its new business opportunities and support the cost of the drug development including clinical trials and regulatory submission to the FDA.
Management plans to seek additional capital through private placements and public offerings of its Common Stock. There can be no assurance that the Company will be successful in accomplishing its objectives. Without such additional capital or the establishment of strategic relationships with established pharmaceutical companies, the Company may be required to cease operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue operations.
RESULTS OF OPERATIONS IN THE THREE MONTHS ENDED MARCH 31, 2024 and 2023
We are a clinical stage company. Historically, Bioxytran was engaged in formation, fund raising and identifying and consulting with the scientific community regarding the development, formulation and testing of its products as of the fourth quarter of 2021 the Company has engaged in research and development activities through its Subsidiary, Pharmalectin, Inc., developing the ProLectin-Rx.
Research and Development
| Three months ended | ||||||||
| March 31, 2024 | March 31, 2023 | |||||||
| Research and development | ||||||||
| Process development | $ | — | $ | — | ||||
| Product development | — | — | ||||||
| Regulatory | — | 47,004 | ||||||
| Clinical trials | — | 74,000 | ||||||
| Project management | 27,000 | 18,000 | ||||||
| Total research and development | $ | 27,000 | $ | 139,004 | ||||
| During the three months ended March 31, 2024, the Company recorded $27,000 in R&D expenses. During the three months ended March 31, 2023, the Company recorded $139,004. The major difference is due to a lack of funding. |
General and Administrative expenses
| Three months ended | ||||||||
| March 31, 2024 | March 31, 2023 | |||||||
| Payroll and related expenses | $ | 377,122 | $ | 359,142 | ||||
| Costs for legal, accounting and other professional services | 6,676 | 43,113 | ||||||
| Promotional expenses | 22,000 | 165,251 | ||||||
| Miscellaneous expenses | 50,749 | 30,132 | ||||||
| Total general and administrative expenses | $ | 456,546 | $ | 597,638 | ||||
| Payroll and related expenses in the three months ended March 31, 2024 were $377,122 compared to $359,142 in the three months ended March 31, 2024. The management team will reduce their compensation with 67% for the remainder of 2024, or until the Company is listed on a major national stock exchange, whichever comes first. | |
| The Costs for legal, accounting and other professional services in the three months ended March 31, 2024 decreased due to reduced activity for lack of funding. | |
| Promotional expenses in the three months ended March 31, 2024 were $22,000, as compared to $165,251In the three months ended March 31, 2023. Promotional activities were paid upfront without possibility of claw back. | |
| Miscellaneous G&A expenses during the three months ended March 31, 2024 and 2023 was $50,749 and $30,132, respectively. The difference is due to training expenses |
| 17 |
Stock-based Compensation
| Three months ended | ||||||||
| March 31, 2024 | March 31, 2023 | |||||||
| Compensation expense to BoD and Management | $ | 131,835 | $ | 12,750 | ||||
| Compensation expense to consultants | 168,410 | 850 | ||||||
| Total compensation expense | $ | 300,245 | $ | 13,600 | ||||
| Stock-based compensation mounted to $300,245 in the three months ended March 31, 2024. The stock-based compensation in the three months ended March 31, 2023 was $13,600. The 2023 bonus, equally divided by the Company’s contributors explain $259,999 of the difference. |
Other expenses
| Three months ended | ||||||||
| March 31, 2024 | March 31, 2023 | |||||||
| Interest expense | 26,734 | 67,221 | ||||||
| Interest expense affiliate | 1,097 | — | ||||||
| Amortization of IP | 2,031 | 514 | ||||||
| Total other income (expenses) | $ | 29,862 | $ | 67,735 | ||||
| During the three months ended March 31, 2024, the Company recorded an interest expense of $27,831 (of which $1,097 was payable to affiliates) and $2,031 in amortization of the Company’s IP. During the three months ended March 31, 2023, the Company recorded an interest expense of $67,221 and $514 in amortization of the Company’s IP. The reduction of interest expense is due to the conversion of the 2021 Notes |
Non-Controlling Interest
| Three months ended | ||||||||
| March 31, 2024 | March 31, 2023 | |||||||
| Net loss attributable to the non-controlling interest | $ | 13,324 | $ | 32,894 | ||||
| Net equity non-controlling interest | (694,210 | ) | (623,552 | ) | ||||
| In the three months ended March 31, 2024 and 2023 there was a non-controlling interest attribution of $13,324 and $32,894 respectively. The difference is due to a significant reduction in the R&D activities due to lack of capital. | |
| In the three months ended March 31, 2024 and 2023 net equity non-controlling interest were negative $694,210 versus negative $623,552 |
| # of shares | # of options | March 31, 2024 | December 31, 2023 | |||||||||||||
| Minority owners cash investment | 14,410,000 | $ | 160,950 | $ | 160,950 | |||||||||||
| Bioxytran interest in subsidiary | 15,000,000 | 1,500 | 1,500 | |||||||||||||
| Total outstanding | 29,410,000 | — | $ | 162,450 | $ | 162,450 | ||||||||||
| As at March 31, 2024, and at December 31, 2023, there were 29,410,000 issued and outstanding shares in Pharmalectin; 15,000,000 (51%) shares of Common Stock are held by Bioxytran, and 14,410,000 shares (49%) are held by an affiliate where the beneficial ownership includes Mike Sheikh, Ola Soderquist and David Platt. As per the exchange terms in the Joint Venture Agreement dated November 15, 2020, the affiliate has an option to convert 15,000,000 shares in the Subsidiary into a 17.5%, or a pro-rated quantity thereof, ownership in Company. If the option is exercised, it would result in significant dilution to shareholders which could lead to a significant decrease in our stock price, based on how the market perceive the value of fully control the Subsidiary. |
Net Loss
| Three months ended | ||||||||
| March 31, 2024 | March 31, 2023 | |||||||
| Net loss attributable to Bioxytran | $ | (800,329 | ) | $ | (785,083 | ) | ||
| Loss per common share, basic and diluted | $ | (0.00 | ) | $ | (0.01 | ) | ||
| Weighted average number of common shares outstanding, basic | 162,808,026 | 123,495,291 | ||||||
| 18 |
| The Company generated a net loss in the three months ended March 31, 2024 of $800,329. in comparison, in the three months ended March 31, 2023, the Company generated a net loss of $785,083. The difference is due to a significant reduction in the R&D activities, due to lack of capital. |
CASH-FLOWS
| Three months ended | ||||||||
| March 31, 2024 | March 31, 2023 | |||||||
| Net cash used in operating activities | $ | (75,567 | ) | $ | (186,889 | ) | ||
| Net cash used in investing activities | (5,995 | ) | (4,711 | ) | ||||
| Net cash provided by financing activities | 65,500 | 50,000 | ||||||
| Net increase (decrease) in cash | $ | (16,062 | ) | $ | (141,600 | ) | ||
| Cash, beginning of period | 26,086 | 295,401 | ||||||
| Cash, end of period | 10,024 | 153,801 | ||||||
| Net cash used in operating activities was $75,567 and $186,890 in the three months ended March 31, 2024 and 2023, respectively. The decrease was due to a reduction of the research and development activities due to lack of funding. | |
| In the Three months ended March 31, 2024 the Company is in the process of filing a patent, and $5,995 was spent in legal fees. in the Three months ended March 31, 2023 the amount was $4,711. | |
| Cash flows from financing activities were $65,500 and $50,000 in the three months ended March 31, 2024 and 2023, respectively. | |
| The available cash was $10,024 and $153,801 in the end of the Three months ended March 31, 2024 and 2023, respectively. |
LIQUIDITY AND CAPITAL RESOURCES
Current Assets
| March 31, 2024 | December 31, 2023 | |||||||
| Cash | $ | 10,024 | $ | 26,086 | ||||
| Total current assets | $ | 10,024 | $ | 26,086 | ||||
| As of March 31, 2024, our current assets consisted of $10,024 in cash at December 31, 2023 we had $26,086 in cash. |
Current Liabilities
| March 31, 2024 |
December 31, 2023 |
|||||||
| Accounts payable and accrued expenses | $ | 97,591 | $ | 296,312 | ||||
| Accounts payable affiliate | 1,457 | 2,000 | ||||||
| Un-issued shares liability | 14,246 | 510,284 | ||||||
| Un-issued shares liability affiliate | 30,000 | 515,904 | ||||||
| Short term loan | 38,000 | |||||||
| Short term loan affiliate | 73,107 | 25,000 | ||||||
| Convertible notes payable, net of discount | 861,500 | 1,900,000 | ||||||
| Total current liabilities | 1,115,901 | 3,249,500 | ||||||
| At March 31, 2024 we had total liabilities of $1,115,901, which consisted of $99,048 in accounts payable and accrued expenses (of which $1,457 was payable to affiliates), $111,107 in short term loans (whereof $73,107 is a loan from affiliates), $44,246 in un-issued shares (of which $30,000 was payable to affiliates), and $861,500 in two convertible loans. | |
| At December 31, 2023 total liabilities were $3,249,500, consisting of $298,321 in accounts payable and accrued expenses (of which $2,000 was payable to affiliates), $25,000 in a loan from affiliates and $1,026,188 in un-issued shares (of which $515,904 was payable to affiliates), as well as $1,900,000 in the form of two convertible loans net of discount. The difference was made possible by converting loans and accounts payable to equity. |
Net Working Capital and Accumulated Deficit
| March 31, 2024 | December 31, 2023 | |||||||
| Net working capital | $ | (1,105,877 | ) | $ | (3,223,414 | ) | ||
| Accumulated deficit | $ | (16,297,931 | ) | $ | (15,497,602 | ) | ||
| 19 |
| At March 31, 2024, the net working capital was negative $1,105,877 and the accumulated deficit of $16,297,931. Comparatively, on December 31, 2023, we had net working capital of negative $3,223,414 and an accumulated deficit of $15,497,602. The Company is aware that its current cash on hand will not be sufficient to fund its projected operating requirements through the month of June 2024. We believe that the Company must raise not less than $3,700,000 to be able to continue our business operations over the next 15 months. |
Cash Proceeds from Financing Activities
| Three months ended | ||||||||
| March 31, 2024 | March 31, 2023 | |||||||
| Proceeds from stock transactions | $ | 4,000 | $ | 50,000 | ||||
| Proceeds from issuance of convertible notes payable | 61,500 | — | ||||||
| Net cash provided by financing activities | $ | 65,500 | $ | 50,000 | ||||
| During the Three months ending March 31, 2024, the Company had raised $65,500 through issuance of Common shares and a convertible note. in the period ended March 31,2022 the Company raised $50,000 through issuance of Common shares. |
Upcoming Financing Activities
The Company intends to issue a Private Placement Offering under Regulation D in the order of three (3) million dollars in first half of 2024.
There can be no assurance that these funds will be available on terms acceptable to the Company, or will be sufficient to enable the Company to fully complete its development activities or sustain operations. If the Company is unable to raise sufficient additional funds, it will have to develop and implement a plan to further extend payables, reduce overhead, or scale back its current business plan until sufficient additional capital is raised to support further operations. There can be no assurance that such a plan will be successful.
Commitments
We have no current commitment from our officers and Directors or any of our shareholders, to supplement our operations or provide us with financing in the future. If we are unable to raise additional capital from conventional sources and/or additional sales of stock in the future, we may be forced to curtail or cease our operations. Even if we are able to continue our operations, the failure to obtain financing could have a substantial adverse effect on our business and financial results. in the future, we may be required to seek additional capital by selling debt or equity securities, selling assets, or otherwise be required to bring cash flows in balance when we approach a condition of cash insufficiency. The sale of additional equity or debt securities, if accomplished, may result in dilution to our then shareholders. We provide no assurance that financing will be available in amounts or on terms acceptable to us, or at all.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on our consolidated financial condition, results of operations, liquidity, capital expenditures or capital resources.
CRITICAL ACCOUNTING POLICIES
In presenting our financial statements in conformity with generally accepted accounting principles, we are required to make estimates and assumptions that affect the amounts reported therein. Several of the estimates and assumptions we are required to make relate to matters that are inherently uncertain as they pertain to future events. However, events that are outside of our control cannot be predicted and, as such, they cannot be contemplated in evaluating such estimates and assumptions. If there is a significant unfavorable change to current conditions, it could result in a material adverse impact to our results of operations, financial position and liquidity. We believe that the estimates and assumptions we used when preparing our financial statements were the most appropriate at that time. Presented below are those accounting policies that we believe require subjective and complex judgments that could potentially affect reported results. However, the majority of our businesses operate in environments where we pay a fee for a service performed, and therefore the results of the majority of our recurring operations are recorded in our financial statements using accounting policies that are not particularly subjective, nor complex.
Stock Based Compensation
The Company has share-based compensation plans under which non-employees, consultants and suppliers may be granted restricted stock, as well as options to purchase shares of Company Common Stock at the fair market value at the time of grant. Stock-based compensation cost is measured by the Company at the grant date, based on the fair value of the award over the requisite service period.
| 20 |
The Company applies ASC 718 for options, common stock and other equity-based grants to its employees and directors. ASC 718 requires measurement of all employee equity-based payment awards using a fair-value method and recording of such expense in the consolidated financial statements over the requisite service period. The fair value concepts have not changed significantly in ASC 718; however, in adopting this standard, companies must choose among alternative valuation models and amortization assumptions. After assessing alternative valuation models and amortization assumptions, the Company will continue using both the Black-Scholes valuation model and straight-line amortization of compensation expense over the requisite service period for each separately vesting portion of the grant.
Recent Accounting Standards
In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2022 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company adopted ASU 2020-06 effective January 1, 2021. The adoption of AASU 2020-06 did not have an impact on the Company’s financial statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 3 is not applicable to us because we are a smaller reporting company.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer) reviewed the effectiveness of our disclosure controls and procedures as at the end of the period covered by this report and concluded that as at March 31, 2024, (i) the Company’s disclosure controls and procedures were not effective to ensure that material information relating to the Company is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission (the “Commission”), and (ii) the Company’s controls and procedures have not been designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Based on this evaluation, our principal executive officer and principal financial officer concluded as at the evaluation date that our disclosure controls and procedures were not effective due primarily to a material weakness in the segregation of duties in the Company’s internal controls.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended. Our management assessed the effectiveness of our internal control over financial reporting as of March 31, 2024. in making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework (2013). A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
As disclosed in our previous filings, there are material weaknesses in the Company’s internal control over financial reporting due to the fact that the Company does not have an adequate process established to ensure appropriate levels of review of accounting and financial reporting matters, which resulted in our closing process not identifying all required adjustments and disclosures in a timely fashion. The Company’s CEO/CFO has identified control deficiencies regarding the lack of segregation of duties and the need for a stronger internal control environment. The small size of the Company’s accounting staff may prevent adequate controls in the future, such as segregation of duties, due to the cost/benefit of such remediation.
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Although the Company has hired a consultant to assist with SEC reporting and accounting matters, we expect that the Company will need to hire accounting personnel with the requisite knowledge to improve the levels of review of accounting and financial reporting matters. The Company may experience delays in doing so and any such additional employees would require time and training to learn the Company’s business and operating processes and procedures. For the near-term future, until such personnel are in place, this will continue to constitute a material weakness in the Company’s internal control over financial reporting that could result in material misstatements in the Company’s financial statements not being prevented or detected.
Because of the above material weakness, management has concluded that we did not maintain effective internal control over financial reporting as of March 31, 2024, based on the criteria established in “Internal Control-Integrated Framework” issued by the COSO.
No Attestation Report by Independent Registered Accountant
The effectiveness of our internal control over financial reporting as of March 31, 2024 has not been audited by our independent registered public accounting firm by virtue of our exemption from such requirement as a smaller reporting company.
Changes in Internal Controls Over Financial Reporting
There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the 3 months ended March 31, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on Effectiveness of Controls
The Company’s management does not expect that its disclosure controls or its internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company may become involved in certain legal proceedings and claims which arise in the normal course of business.
Item 1A. Risk Factors
The Company is a smaller reporting company and is not required to provide this information.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
There were no sales of equity securities sold during the period covered by this Report that were not previously included in a Current Report on Form 8-K.
The Company claims an exemption from the registration requirements of the Securities Act of 1933 (the “Securities Act”) for the private placement of these securities pursuant to Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D promulgated under the Securities Act.
Item 3. Defaults Upon Senior Securities
There are currently no defaults upon Senior Securities.
Item 4. Mine Safety Disclosures
Not Applicable.
Item 5. Other Information
Effective as of April 19, 2024, the Company has elected Dr. Radka Milanova, to fill the vacancy left by Dr. Chen-Walden, (now deceased).
Dr. Radka Milanova holds a PhD in Organic Chemistry from Simon Fraser University, Canada. Dr. Milanova’s professional experience includes executive positions with various biotechnology companies. She has championed and captained five Investigational New Drug Applications (“IND”) and two successful New Drug Applications (“NDA”), led Research and Development programs, invented eight granted patents and seventeen publications, obtained millions in grants, associated with licensing deals and business development agreements that achieved winning commercialization results, maximizing global market share and generating millions in revenues. Our Board of Directors believes that Dr. Milanova’s expertise and experience in practicing pharmaceutical development, her perspective, depth and background in business development and out-licensing, and her leadership experience in the field of biotechnology provide her with the qualifications and skills to serve on our Board of Directors.
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Item 6. Exhibits
| Exhibit No. | Title of Document | |
| 10.83 | * | Option Agreement for conversion/exchange between Pharmalectin, Inc. and Bioxytran, Inc. shares of Common Stock, dated November 20, 2021. |
| 31.1 | * | Certification of Principal Executive and Financial Officers pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended. |
| 32.1 | ** | Certification pursuant to Section 906 of Sarbanes Oxley Act of 2002 (Chief Executive and Financial Officer). |
| 100 | The following financial statements from the Quarterly Report on Form 10-Q of BIOXYTRAN, Inc. for the quarter ended March 31, 2024 formatted in XBRL: (i) Condensed Balance Sheets (unaudited), (ii) Condensed Statements of Operations (unaudited), (iii) Condensed Statements of Cash Flows (unaudited), and (iv) Notes to Condensed Financial Statements (unaudited), tagged as blocks of text. | |
| 101.INS | Inline XBRL Instance Document | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
| * | Filed as an exhibit hereto. |
| ** | These certificates are furnished to, but shall not be deemed to be filed with, the Securities and Exchange Commission. |
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, there unto duly authorized.
| BIOXYTRAN, INC. | ||
| Date: April 19, 2024 | By: | /s/ David Platt |
| David Platt | ||
| Chief Executive Officer | ||
| /s/ Ola Soderquist | ||
| Ola Soderquist | ||
| Chief Financial Officer | ||