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) |
(Registrant’s telephone number, including area code)
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
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. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐
Indicate the number of shares outstanding of each of the issuer’s classes of Common Stock, as of the latest practicable date.
| Class | Outstanding at November 10, 2022 | |
| Common Stock, $0.001 par value per share | shares |
BIOXYTRAN,
INC.
FORM 10-Q
TABLE OF CONTENTS
Except as otherwise required by the context, all references in this report to “we”, “us”, “our” or “Company” refer to the consolidated operations of BIOXYTRAN, Inc.
| i |
PART I - FINANCIAL INFORMATION
Item 1. Unaudited Condensed Consolidated Financial Statements: BIOXYTRAN, Inc., September 30, 2022
BIOXYTRAN, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 2022 AND DECEMBER 31, 2021
(UNAUDITED)
| September 30, 2022 | December 31, 2021 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | $ | ||||||
| Total current assets | ||||||||
| Intangibles, net | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Accounts payable, related party | ||||||||
| Un-issued shares liability | ||||||||
| Un-issued shares liability, related party | ||||||||
| 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; issued and outstanding as at September 30, 2022 and as at December 31, 2021 | ||||||||
| 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
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021
(UNAUDITED)
| Three months ended | Nine months ended | |||||||||||||||
| September 30, 2022 | September 30, 2021 | September 30, 2022 | September 30, 2021 | |||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | $ | $ | $ | $ | ||||||||||||
| General and administrative | ( | ) | ||||||||||||||
| Compensation expense | ||||||||||||||||
| Total net operating expenses | ( | ) | ||||||||||||||
| Net loss from operations | ( | ) | ( | ) | ( | ) | ||||||||||
| Other expenses: | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Amortization of IP | ( | ) | ( | ) | ||||||||||||
| Debt discount amortization and issuance of warrants | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 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
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021
(UNAUDITED)
| Common Stock | Preferred Stock | Additional Paid in Capital | Accumulated | Non-controlling | Total | |||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Common | Preferred | Deficit | Interest | Equity | ||||||||||||||||||||||||||||
| December 31, 2020 | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||||||||||||
| Options issued and vested - 2021 Plan | ||||||||||||||||||||||||||||||||||||
| Shares issued to BoD & Ofc - 2010 Plan | ||||||||||||||||||||||||||||||||||||
| Shares issued to Consultants - 2010 Plan | ||||||||||||||||||||||||||||||||||||
| Subsidiary stock transactions | ||||||||||||||||||||||||||||||||||||
| Net loss attributable to the non-controlling interest | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| March 31, 2021 | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||||||||||||
| Options issued and vested - 2021 Plan | ||||||||||||||||||||||||||||||||||||
| Shares issued to BoD & Ofc - 2021 Plan | ||||||||||||||||||||||||||||||||||||
| Shares issued to Consultants - 2021 Plan | ||||||||||||||||||||||||||||||||||||
| Shares issued to BoD & Ofc for conversion of debt | ||||||||||||||||||||||||||||||||||||
| Shares issued to Consultants for conversion of debt | ||||||||||||||||||||||||||||||||||||
| Forgiveness of related party | ||||||||||||||||||||||||||||||||||||
| Subsidiary stock options | ||||||||||||||||||||||||||||||||||||
| Subsidiary stock transactions | ||||||||||||||||||||||||||||||||||||
| Net loss attributable to the non-controlling interest | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| June 30, 2021 | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||||||||||||
| Options issued and vested - 2021 Plan | ||||||||||||||||||||||||||||||||||||
| Net loss attributable to the non-controlling interest | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Net Loss | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| September 30, 2021 | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||||||||||||
| 3 |
| Common Stock | Preferred Stock | Additional Paid in Capital | Accumulated | Non-controlling | Total | |||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Common | Preferred | Deficit | Interest | Equity | ||||||||||||||||||||||||||||
| December 31, 2021 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||
| Issuance of Warrants | ||||||||||||||||||||||||||||||||||||
| Net loss attributable to the non-controlling interest | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| March 31, 2022 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||
| Cancellation of Stock Options – 2021 Plan | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Net loss attributable to the non-controlling interest | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| June 30, 2022 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||
| Correction for Stock Options – 2021 Plan | ||||||||||||||||||||||||||||||||||||
| Forfeiture of Warrants | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Issuance stock-plan BoD | ||||||||||||||||||||||||||||||||||||
| Issuance stock-plan Consultants | ||||||||||||||||||||||||||||||||||||
| Issuance of warrants | ||||||||||||||||||||||||||||||||||||
| Sales of Shares | ||||||||||||||||||||||||||||||||||||
| Conversion of warrants | ( | ) | ||||||||||||||||||||||||||||||||||
| Conversion of Loan and accrued interest | ||||||||||||||||||||||||||||||||||||
| Net loss attributable to the non-controlling interest | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| September 30, 2022 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||
See the accompanying notes to these unaudited condensed consolidated financial statements
| 4 |
BIOXYTRAN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021
(UNAUDITED)
| Nine months Ended | ||||||||
| September 30, 2022 | September 30, 2021 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Debt discount amortization, incl. issuance of warrants | ||||||||
| Amortization of IP | ||||||||
| Stock-based compensation | ||||||||
| Interest paid with note conversion | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts payable and accrued expenses | ( | ) | ||||||
| Accounts payable, related party | ( | ) | ||||||
| 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 loan | ||||||||
| Proceeds from subsidiary stock transactions | ||||||||
| Proceeds from issuance of convertible notes payable | ||||||||
| Repayment of convertible notes payable | ||||||||
| Net cash provided by financing activities | ||||||||
| Net increase 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 | ||||||||
| Issuance of warrants | ||||||||
| Forfeiture of warrants | ( | ) | ||||||
| Debt discount on convertible note | ||||||||
| Common shares issued for the conversion of notes payable (principal and accrued interest), Related party | ||||||||
| Common shares issued for the conversion of notes payable (principal and accrued interest) | ||||||||
| Common shares issued for the exercise of warrants | ||||||||
| Forgiveness of related party debt recorded to additional paid-in capital | $ | $ | ||||||
See the accompanying notes to these unaudited condensed consolidated financial statements
| 5 |
BIOXYTRAN, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021
(UNAUDITED)
NOTE 1 – BACKGROUND AND ORGANIZATION
Business Operations
Bioxytran, Inc. (the “Company”) is a clinical stage pharmaceutical company focused on the development, manufacture and commercialization of therapeutic drugs designed to address hypoxia in humans, which is a lack of oxygen to tissues, in a safe and efficient manner.
Our Subsidiary, Pharmalectin, Inc. (the “Subsidiary”) is a clinical stage pharmaceutical company focused on the development, manufacture and commercialization of therapeutic drugs designed to address conditions related to Covid-19.
Our Foreign Subsidiary, Pharmalectin (BVI), Inc. (the “Foreign Subsidiary”) is the owner and custodian of the Company’s Copyrights, Trade Marks and Patents.
Organization
Bioxytran, Inc. was organized on October 5, 2017 as a Delaware corporation, with a taxing structure for U.S. federal and state income tax as a C-Corporation with authorized Common shares with a par value of $, and Preferred shares 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 $. There are currently outstanding Common shares and Preferred shares. Collectively, our Officers, and Directors own or exercise voting and investment control of () of our outstanding Common Stock.
Pharmalectin was organized on October 5, 2017 as a Delaware corporation, with a taxing structure for U.S. federal and state income tax as a C-Corporation with authorized Common shares with a par value of $, and Preferred shares with a par value of $. The Subsidiary was founded under the name of Bioxytran “Bioxytran (DE)”. On April 29, 2020, the name was changed to Pharmalectin, Inc. There are currently issued and outstanding shares of the Subsidiary’s Common Stock; Common shares () are held by Bioxytran and Common shares are held by an affiliate. The beneficial ownership of the affiliate includes our Officers.
Pharmalectin BVI was organized on March 17, 2021 as a British Virgin Islands (BVI) Business Corporation with a BVI corporate taxing structure with authorized shares with a par value of $. There are currently outstanding shares held by the Company.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”), including the instructions to Form 10-Q and Regulation S-X. Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”), have been condensed or omitted from these statements pursuant to such rules and regulations and, accordingly, they do not include all the information and notes necessary for comprehensive financial statements and should be read in conjunction with our audited consolidated financial statements.
While the information presented in the accompanying financial statements is unaudited, it includes all adjustments which are, in the opinion of the management, necessary to present fairly the financial position, results of operations and cash flows for the periods presented in accordance with the accounting principles generally accepted in the United States of America (“US GAAP”). In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are statements prepared in accordance with US GAAP have been condensed or omitted. These financial statements should be read in conjunction with the Company’s December 31, 2021 audited financial statements and notes that can be expected for the year ending December 31, 2022.
| 6 |
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 subsidiary, Pharmalectin (BVI), Inc of British Virgin Islands (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
September 30, 2022, 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 and shares upon exercise of outstanding warrants and
shares upon exercise of outstanding options. For the New Notes, the shares total value is based on $
The Company measures the cost of services received from employees and non-employees in exchange for an award of equity instruments based on the fair value of the award on the grant date pursuant ASC 718. Stock-based compensation expense is recorded by the Company over the requisite service period, or vesting period, in the same expense classifications in the statements of operations, as if such amounts were paid in cash.
Accounting for subsidiary stock transactions
The
Company accounts for subsidiary stock transactions in accordance with Opinions of the Accounting Principles Board 09 (APBO No. 9). In
paragraph 28, this pronouncement excluded all adjustments from transactions in a company’s own stock “. . . from the determination
of net income or the results of operations under all circumstances.” During the nine months ended September 30 2021, the Company
sold shares in its subsidiary Pharmalectin for a total amount of $
| 7 |
Research and Development
The Company accounts for research and development costs in accordance with Accounting Standards Codification subtopic 730-10, Research and Development (“ASC 730-10”). Under ASC 730-10, all research and development costs must be charged to expense as incurred. Accordingly, internal research and development costs are expensed as incurred. Third-party research and development costs are expensed when the contracted work has been performed or as milestone results have been achieved as defined under the applicable agreement. Company-sponsored research and development costs related to both present and future products are expensed in the period incurred.
For
the nine months ended September 30, 2022 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.
| 8 |
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 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 September 30, 2022, the Company had cash of $
During
the nine months ended September 30, 2022, 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.
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 - 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 Life (years) | September 30, 2022 | December 31, 2021 | ||||||||
| Capitalized patent costs | $ | $ | ||||||||
| Accumulated amortization | ( | ) | ||||||||
| Intangible assets, net | $ | $ | ||||||||
| 9 |
NOTE 5 – ACCOUNTS PAYABLES AND ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
On
September 30, 2022, there was $
The following table represents the major components of accounts payables and accrued expenses and other current liabilities at September 30, 2022 and at December 31, 2021:
| September 30, 2022 | December 31, 2021 | |||||||
| Accounts payable related party (1) | $ | $ | ||||||
| Professional fees | ||||||||
| Interest | ||||||||
| Pension cost | ||||||||
| Payroll Taxes | ||||||||
| Other accounts payable | ||||||||
| Un-issued shares related party (2) | ||||||||
| Un-issued shares | ||||||||
| Convertible notes payable, net of premium and discount | ||||||||
| Total | $ | $ | ||||||
| (1) |
| (2) |
NOTE 6 – 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 $
At
any time after the issue date of the Notes, The Holders of the Notes, (the “2021 Holders”), have the option to convert all
or any part of the outstanding and unpaid principal amount and accrued and unpaid interest of the 2021 Notes into shares of our Common
Stock at the Conversion Price.
The
2021 Holders are limited to holding a total of
The Common Stock underlying the 2021 Notes, when issued, will bear a restrictive legend and have a 180-day lock-up period.
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.
Convertible notes payable consists of the following at September 30, 2022 and December 31, 2021:
| September 30, 2022 | December 31, 2021 | |||||||
| Principal balance | $ | $ | ||||||
| Unamortized debt discount | ( | ) | ( | ) | ||||
| Outstanding, net of debt discount and premium | $ | $ | ||||||
| 10 |
At September 30, 2022 and at December 31, 2021 the outstanding convertible notes were as follows:
| Name | Principal due | Accrued interest | Total amount due | |||||||||||
| December 31, 2021 | ||||||||||||||
| Notes sold in exchange for cash | (1) | $ | $ | $ | ||||||||||
| Note issued in exchange for defaulted Old Notes | (2) | |||||||||||||
| $ | $ | $ | ||||||||||||
| September 30, 2022 | ||||||||||||||
| Notes sold in exchange for cash | (1) | $ | $ | $ | ||||||||||
| Note issued in exchange for defaulted Old Notes | (2) | |||||||||||||
| $ | $ | $ | ||||||||||||
| (1) |
| (2) |
Private Placement, 2021 Notes converted into Common Stock
As
part of the earlier mentioned 2021 Notes, five (5) Notes were issued on May 3, 2021 to our three Officers, $
On
June 4, 2021, shares of Common Stock were issued to our three Officers as a result of conversion of accrued interest and principal
for three convertible notes for a total of $
On
June 4, 2021, shares of Common Stock were issued to two consultants as a result of conversion of accrued interest and principal
for two convertible notes for a total of $
| Name | Principal Converted | Accrued interest converted | No. of shares issued | |||||||||||
| Private Placement, 2021 Notes issued to Officers | (1) | $ | $ | |||||||||||
| Private Placement, 2021 Notes issued to consultants | (2) | |||||||||||||
| $ | $ | |||||||||||||
| (1) |
| (2) |
Private Placement, 2022 Notes converted into Common Stock
In
January, 2022, we entered into thirty-four (34) Securities Purchase Agreements (the “2022 SPA’s”), with accredited
investors, under which we agreed to sell the Notes, in an aggregate principal amount of $
At
any time after the issue date of the 2022 Notes the 2022 Holders have the option to convert all or any part of the outstanding and unpaid
principal amount and accrued and unpaid interest of the Notes into shares of our Common Stock at the Conversion Price. The “Conversion
Price” is set to $
The
2022 Holders are limited to holding a total of
| 11 |
The notes principal and accrued interest were fully converted into shares of Common Stock on August 31, 2022.
| Name | Principal Converted | Accrued interest converted | No. of shares issued | |||||||||||
| Private Placement, 2022 Notes | (1) | $ | $ | |||||||||||
| $ | $ | |||||||||||||
| (1) |
NOTE 7 – STOCKHOLDERS’ EQUITY
The Company is authorized to issue shares of Common Stock, and shares of Preferred Stock.
Preferred stock
As of September 30, 2022 and at December 31, 2021, no Preferred shares have been designated or issued.
Common Stock
On
June 4, 2021, shares of Common Stock were issued to our three Officers as a result of conversion of accrued interest and principal
for three convertible notes for a total of $
On
June 4, 2021, shares of Common Stock were issued to two consultants as a result of conversion of accrued interest and principal
for two convertible notes for a total of $
For
the nine months ending September 30, 2021, shares were issued under the 2010 and the 2021 Stock Plans for a total value of
$
On
August 15, 2022 shares were sold in a private placement for an amount of $
On
August 31, 2022, shares of Common Stock were issued against convertible notes with a principal of $
On
September 8, 2022,
For
the nine months ending September 30, 2022, shares were issued under the 2021 Stock Plans for a total value of $
As at September 30, 2022, the Company has shares of Common Stock issued and outstanding, at December 31, 2021 the Company had shares of Common Stock issued and outstanding.
Common Stock Warrants
For
the nine months ended September 30, 2022, in connection with the issuance of convertible notes, the Company issued
For the nine months ended September 30, 2021 the Company issued no warrants.
| September 30, 2022 | ||||
| Risk-free interest rate | - | % | ||
| Expected dividend yield | % | |||
| Volatility factor (monthly) | % | |||
| Expected life of warrant | years | |||
There were no warrants issued in the nine months ended September 30, 2021.
| 12 |
The following table summarizes the Company’s Common Stock warrant activity for the nine months ended September 30, 2022 and 2021:
| Number
of Warrants * | Weighted
Average Exercise Price | Weighted
Average Remaining Expected Term | ||||||||||
| Outstanding as at December 31, 2020 | $ | |||||||||||
| Granted | ||||||||||||
| Exercised | — | |||||||||||
| Forfeited/Cancelled | — | |||||||||||
| Outstanding as at September 30, 2021 | ||||||||||||
| Outstanding as at December 31, 2021 | $ | |||||||||||
| Granted | ||||||||||||
| Exercised | ( | ) | — | |||||||||
| Forfeited/Cancelled | ( | ) | — | |||||||||
| Outstanding as at September 30, 2022 | $ | |||||||||||
| * |
The following table summarizes information about stock warrants that are vested or expected to vest at September 30, 2022 with a market price of $ at September 30, 2022:
| 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 September 30, 2022 is 4.3 years. The aggregate intrinsic value for fully vested, exercisable warrants was $211,809 at September 30, 2022.
| Number of Warrants | Weighted- Average Grant-Date Fair Value per share | |||||||
| Non-vested as at December 31, 2021 | $ | |||||||
| Granted | ||||||||
| Forfeited/Cancelled | ||||||||
| Vested | ||||||||
| Non-vested as at September 30, 2022 | $ | |||||||
Sales of Shares in Subsidiary
For
the nine months ended September 30, 2022 there were shares sold in the Company’s Subsidiary, Pharmalectin, Inc.. For the nine
months ended September 30, 2021 there were shares of Common Stock sold in the Company’s Subsidiary, Pharmalectin, Inc.
for a total of $
| 13 |
On
January 19, 2010, the Company adopted a stock option plan entitled the “2010 Stock Plan” (the “:2010 Plan”) under
which the Company may grant Options to Purchase Stock, Stock Awards or Stock Appreciation Rights in an amount up to
As at January 18, 2021, the 2010 Stock Plan was depleted and retired. On January 19, 2021, the Board of Directors adopted the “2021 Stock Plan” (the “2021 Plan”) with the same terms as the 2010 Plan. As at September 30, 2022, options and shares have been awarded from the 2021 Plan.
Shares Awarded and Issued under the 2010 Plan:
On January 1, 2021 the Company granted shares, with a fair market value of $/share at the time of award, to a Medical Advisory Board Member for her contribution in the Company’s Advisory Board, for a total of $.
On January 15, 2021 the Company granted shares of Common Stock valued at $/share, equally divided to shares/each to fourteen of the Company’s executives, Board- and Medical Advisory Board members, as well as to indispensable Consultants currently working on the clinical trial submissions with the FDA, for a total value of $.
Shares Awarded and Issued under the 2021 Plan:
On April 1, 2021 the Company granted shares, with a fair market value of $/share at the time of award, to a Medical Advisory Board Member for her contribution in the Company’s Advisory Board, for a total of $.
On April 1, 2021 the Company granted shares with a fair market value of $/share to three members of the Audit Committee as compensation for their contribution in the Audit Committee, for a total of $.
On April 22, 2021 the Company granted shares with a fair market value of $/share at the time of award, to a consultant for assistance with the Company’s PR work, for a total of $.
On June 15, 2021 the Company granted shares with a fair market value of $/share at the time of award, to a consultant for assistance with the Company’s PR work, for a total of $.
On January 10, 2022 the Company granted shares of Common Stock to four Board Members in reward of their attendance at Board and Committee meetings during the fourth quarter of 2021. The total fair market value at the time of the award was $, or $/share. The shares were issued on August 1, 2022
On February 18, 2022 the Company granted shares of Common Stock to two Consultants in reward of their assistance for the product development and our clinical trials in India. The total fair market value at the time of the award was $, or $/share. The shares were issued on August 1, 2022
On April 1, 2022 the Company granted shares to a Medical Advisory Board Member for her contribution to the Company during the first quarter of 2022. The total fair market value at the time of the award was $, or $/share. The shares were issued on August 1, 2022
On April 1, 2022 the Company granted shares to four Board Members in reward of their attendance at Board and Committee meetings during the first quarter of 2022. The total fair market value at the time of the award was $, or $/share. The shares were issued on August 1, 2022.
On April 11, 2022 the Company granted shares to three Consultants for the management of our clinical trials in India. The total fair market value at the time of the award was $, or $/share. The shares were issued on August 1, 2022.
On August 1, 2022 the Company issued shares to four Board Members in reward of their attendance at Board and Committee meetings during the second quarter of 2022. The total fair market value at the time of the award was $, or $/share.
| 14 |
Number
of | Fair
Value | Weighted
Average Market Value per Share | ||||||||||
| Shares Issued as of December 31, 2020 | $ | – | $ | |||||||||
| Shares Issued | – | |||||||||||
| Shares Issued as of September 30, 2021 | $ | – | $ | |||||||||
| Shares Issued as of December 31, 2021 | $ | – | $ | |||||||||
| Shares Issued | – | |||||||||||
| Shares Issued as of September 30, 2022 | $ | – | $ | |||||||||
For the nine months ended September 30, 2022, the Company recorded stock-based compensation expense of $ in connection with the issuance of Common share-based payment awards. For the nine months ended September 30, 2021, the Company had issued shares at a stock-based compensation expense of $.
Stock options granted and vested 2021 Plan:
On February 1, 2021 the Company granted three-year options immediately vested at an exercise price of $ to an Advisory Board Member for his contribution in the Company’s Advisory Board. The options total fair value at the time of award was $.
On May 1, 2021 the Company granted three-year options immediately vested at an exercise price of $ to a Medical Advisory Board Member for his contribution in the Company’s Advisory Board. The options total fair value at the time of award was $.
On August 1, 2021 the Company granted three-year options immediately vested at an exercise price of $ to a Medical Advisory Board Member for his contribution in the Company’s Advisory Board. The options total fair value at the time of award was $.
There were no stock options issued in the nine months ended September 30, 2022.
| September 30, 2021 | ||||
| Risk-free interest rate | – | % | ||
| Expected dividend yield | % | |||
| Volatility factor (monthly) | % | |||
| Expected life of options | years | |||
There were no options issued in the nine months ended September 30, 2022, although options were cancelled by expiration and returned to the stock plan. For the nine months ended September 30, 2021, the Company recorded compensation expense of $ in connection with awarded stock options.
As at September 30, 2022, there was no unrecognized compensation expense related to non-vested stock option awards. The following table summarizes the Company’s stock option activity for the nine months ended September 30, 2022, and 2021:
| Number
of Options | Exercise
Price per Share | Weighted
Average Exercise Price per Share | ||||||||||
| Outstanding as of December 31, 2020 | $ | - | $ | |||||||||
| Granted | - | |||||||||||
| Exercised | — | |||||||||||
| Options forfeited/cancelled | — | |||||||||||
| Outstanding as of September 30, 2021 | $ | - | $ | |||||||||
| Outstanding as of December 31, 2021 | $ | - | $ | |||||||||
| Granted | — | |||||||||||
| Exercised | — | |||||||||||
| Options forfeited/cancelled | ( | ) | – | |||||||||
| Outstanding as of September 30, 2022 | $ | – | $ | |||||||||
| 15 |
| 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 issued, between December 31, 2021 and September 30, 2022.
The weighted-average remaining estimated life for options exercisable at September 30, 2022 is years.
The
aggregate intrinsic value for fully vested, exercisable options was $ at September 30, 2022. The actual tax benefit realized from
stock option exercises for the nine months ended at September 30, 2022 and 2021 was $
As at September 30, 2022 the Company has options or stock awards available for grant under the 2021 Plan.
NOTE 9 – NON-CONTROLLING INTEREST
| September 30, 2022 | December 31, 2021 | |||||||
| 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 September 30, 2022 and at December 31, 2021 there are issued and outstanding shares; Common shares (%) are held by Bioxytran and Common shares are held by an affiliate. Further, an additional options exercisable at $ are held by an affiliate. The option agreements include provisions for dilutive issuance and cash-less exercise. If exercised at September 30, 2022 the provisions would have resulted in an issuance of shares at an average conversion price of $, or shares in a cash-less exercise.
| 16 |
NOTE 10 – COMMITMENTS AND CONTINGENCIES
Employment contracts
The
Company’s three Officers have entered employment contracts and confidentiality, non-disclosure and assignment of invention agreements.
The employment agreements provide for the payment of $
Litigation
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