☒ ANNUAL REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
☐ TRANSITION REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Indicate by check mark if the
registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the
registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐ No ☒
Indicate by check mark whether
the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has
submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ☒ No ☐
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, or a non-accelerated filer, a smaller reporting company, or an emerging growth
company. See definition of “large accelerated filer,” and large “accelerated filer,” “smaller reporting
company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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 has
filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared
or issued its audit report. ☐
Indicate by check mark whether the registrant is
a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
Indicate the number of shares outstanding of each
of the issuer’s classes of common stock, as at the latest practicable date.
As at June 30, 2020, the aggregate
market value of the registrant’s voting stock held by non-affiliates based upon the per share closing price of $0.18 as
reported on the OTC Expert Market and was approximately $2,680,878 (based on the assumption, solely for purposes of this computation,
that all directors and officers of the registrant were affiliates of the registrant).
The number of shares of common stock outstanding as at April 6, 2021 was 100,749,873 shares.
This Annual
Report on Form 10-K contains a number of “forward-looking statements”. Specifically, all statements other than statements
of historical facts included in this Annual Report on Form 10-K regarding our financial position, business strategy and plans
and objectives of management for future operations are forward-looking statements. These forward-looking statements are based
on the beliefs of management at the time these statements were made, as well as assumptions made by and information currently
available to management. When used in this Annual Report on Form 10-K and the documents incorporated by reference herein, the
words “anticipate,” “believe,” “estimate,” “expect,” “may,” “will,”
“continue” and “intend,” and words or phrases of similar import, as they relate to our financial position,
business strategy and plans, or objectives of management, are intended to identify forward-looking statements. These statements
reflect our current view with respect to future events and are subject to risks, uncertainties and assumptions related to various
factors.
You should
understand that the following important factors, in addition to those discussed in our periodic reports to be filed with the SEC
under the Exchange Act, could affect our future results and could cause those results to differ materially from those expressed
in such forward-looking statements:
Although
we believe that our expectations (including those on which our forward-looking statements are based) are reasonable, we cannot
assure you that those expectations will prove to be correct. Should any one or more of these risks or uncertainties materialize,
or should any underlying assumptions prove incorrect, actual results may vary materially from those described in our forward-looking
statements as anticipated, believed, estimated, expected or intended.
Except
for our ongoing obligations to disclose material information under the federal securities laws, we undertake no obligation to
publicly update or revise any forward-looking statements, whether as a result of new information, future events or any other reason.
All subsequent forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their
entirety by the cautionary statements contained or referred to herein. In light of these risks, uncertainties and assumptions,
the forward-looking events discussed in this Annual Report on Form 10-K and the documents incorporated by reference herein might
not occur.
PART
I
Item 1. Business.
GENERAL ORGANIZATION AND
BUSINESS
Bioxytran,
Inc. (“we”, “us”, or the “Company”) is an early stage pharmaceutical company focused on the
development, manufacture and commercialization of therapeutic drugs designed to address hypoxia in humans, which is a lack of
oxygen in tissues. If it is not addressed, lack of oxygen in tissues, or hypoxia, results in necrosis, which is the death of cells
comprising body tissue. Necrosis cannot be reversed. Our lead drug candidate, code named BXT-25, is an oxygen-carrying small molecule
consisting of bovine hemoglobin stabilized with a co-polymer with intended applications to include treatment of hypoxic conditions
in the brain resulting from stroke. Our drug development efforts are guided by specialists on co-polymer chemistry and other disciplines,
and we intend to supplement our efforts with input from a scientific and medical advisory board whose members are leading physicians.
Our subsidiary,
Pharmalectin Inc. (the “Subsidiary”), of which we currently have 85% ownership, is focused 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 inhibitor. Our lead drug candidate, named ProLectin,
is a complex polysaccharide derived from pectin that binds to, and blocks the activity of galectin-1, a type of galectin. Galectins
are a member of a family of proteins in the body called lectins. These proteins interact with carbohydrate sugars located in,
on the surface of, and in between cells. This interaction causes the cells to change behavior, including cell movement, multiplication,
and other cellular functions. The interactions between lectins and their target carbohydrate sugars occur via a carbohydrate recognition
domain, or CRD, within the lectin. Galectins are a subfamily of lectins that have a CRD that bind specifically to ß-galactoside
proteins. Galectins have a broad range of functions, including regulation of cell survival and adhesion, promotion of cell-to-cell
interactions, growth of blood vessels, regulation of the immune response and inflammation. During viral infections galectins are
upregulated and downregulated based on the type of virus.
In the
past, ProLectin has been used as a fibrosis drug and a cancer drug. It is currently being repurposed to treat viral infections.
We believe that our novel approach in treating viral infections in humans. Our drug development efforts are guided by specialists
on carbohydrate chemistry and other disciplines, and we intend to supplement our efforts with input from a scientific and medical
advisory board whose members are leading physicians.
We plan
to file a pre-investigational new drug application for ProLectin for the treatment of mild to moderate Covid-19 patients. However,
we cannot provide any assurance that we will successfully initiate or complete those planned trials and be able to initiate any
other clinical trials for ProLectin or any of our future drug candidates.
Company Overview
We are
an early stage pharmaceutical company founded on June 9, 2008 as America’s Driving Ranges, Inc., on September 21, 2018,
the Company was reorganized into Bioxytran through a reverse merger to focus on the development, manufacturing and commercialization
of therapeutic drugs designed to address hypoxia in humans, which is a lack of oxygen in tissues. Our initial focus is the treatment
of hypoxic conditions in the brain resulting from stroke and through our Subsidiary, Pharmalectin in the treatment of viral diseases,
notably Covid-19.
Currently,
the Company’s lead pharmaceutical drug candidate is code named BXT-25 and is planned to be an oxygen-carrying small molecule
consisting of bovine hemoglobin stabilized with a co-polymer. This modified hemoglobin will be designed to be an injectable intravenous
drug and we plan to begin pre-clinical studies and apply to the Food and Drug Administration for approval to use BXT-25 to prevent
necrosis, or cell death, by carrying oxygen to human tissue with blood flow to the brain. If we successfully complete Phase I
testing with the FDA we plan to explore the use of additional drug candidates using chemical structures that are a sub-class of
BXT-25 that share the same physical properties to treat wound healing due to hypoxia, cardiovascular ischemia, anemia, cancer
conditions and trauma, subject to FDA approval. However, we will need to raise additional funds in excess of the $10,000,000 in
order to expand the use of BXT-25.
BXT-25
is a novel unproven technology. Although we have not conducted research applying our co-polymer technology and related chemistry
to the treatment of hypoxic conditions, we know from Dr. Platt’s prior research that our technology enables the creation
of molecules that are 5,000 times smaller than human red blood cells and we believe that our proprietary technology will enable
these molecules to carry oxygen for delivery to tissue through the bloodstream. We also believe that the small size of these molecules
will more effectively enable their delivery to hypoxic tissues which red blood cells cannot reach under the clinical conditions
we intend to address. We may be unsuccessful in developing these technologies into drugs which the United States Food and Drug
Administration (FDA) ultimately will approve.
Stroke
Stroke,
also known as cerebrovascular accident (CVA), or brain attack, occurs when poor blood-flow to the brain results in necrosis and
cell death. Strokes can be classified into two major categories: ischemic and hemorrhagic. Ischemic strokes are caused by interruption
of the blood supply to the brain; hemorrhagic strokes result from the rupture of a blood vessel or an abnormal vascular structure.
According to the Center for Disease Control, approximately 87% of all strokes are ischemic strokes. An ischemic stroke may be
thrombotic, which occurs when diseased or damaged cerebral arteries become blocked by the formation of a blood clot within the
brain, or embolic, which occurs when a clot formed originally somewhere in the body outside the brain - typically in the heart
- travels in a cerebral artery. Whether thrombotic or embolic, an ischemic stroke restricts the flow of blood to the brain and
results in near-immediate physical and neurological deficits.
According
to the Center for Disease Control, there are about 795,000 new or recurrent cases of stroke in the United States each year, of
which 610,000 are new cases and 185,000 recurrent cases. One hundred thirty thousand (130,000) Americans are killed by stroke
each year, or one very four minutes. Stroke is a leading cause of serious long-term disability and costs the United States an
estimated $34 Billion each year, according to the Center for Disease Control, a figure which includes the cost of health care
services, medications to treat the stroke, and missed days of work.
Hemoglobin and Complex
Co-Polymer Science
Oxygen
therapeutics describe generally a class of agents that will be administered intravenously to enhance the oxygen delivery capability
of blood. These oxygen transporting agents may be perfluorcarbon (PFC) emulsions or modified hemoglobin solutions. Our technology
involves the development of hemoglobin-based oxygen carriers. To produce BXT-25, we will take red blood cells (RBCs) from bovine
sources, isolate hemoglobin from the RBCs and, by applying our proprietary co-polymer chemistry, stabilize and modify the hemoglobin.
Our novel, complex co-polymer molecules can be produced at specific molecular weights and with other pharmaceutical properties
for various hypoxic diseases; and in the production of BXT-25.
The BXT-25
co-polymer hemoglobin molecule will be designed to be 5,000 times smaller than an RBC, which we believe will enable that small
molecule to reach hypoxic tissue more effectively than RBCs. BXT-25 will be designed to be administered as an injectable IV drug
that will circulate in the blood collecting oxygen from the lungs and releasing the oxygen molecules where tissue has developed
ischemia, or lack of oxygen. BXT-25 will be designed to have oxygen affinity that mimics RBCs, minimize adverse effects, and be
compatible with all blood types. BXT will be designed to have a shelf life of two years at room temperature.
With regard
to compatibility with all blood types, we believe that the differences between a BXT-25 molecule and a red blood cell will not
be limited to differences in size. Surfaces of red blood cells include different antigens which determine the blood type as A,
B, AB or O. We believe that BXT-25 will be found to be compatible with all blood types because it is a single, modified hemoglobin
molecule stabilized with a co-polymer which, unlike a red blood cell, has neither antigens nor a Rh factor.
Certain regulatory issues
relating to our use of bovine hemoglobin as a raw material
Our products
include a raw material commercially available bovine hemoglobin that has been purified, chemically modified and cross-linked for
stability. It is sourced from controlled herds of U.S. cattle raised for beef production. Those herds are subject to and meet
the requirements of a herd management program that assures the origin, health, feed and quality of the cattle used as a raw material
source. Our suppliers will contract to maintain traceable records on animal origin, health, feed and care as part of our effort
to assure the use of known, healthy animals in compliance with applicable laws and regulations.
Bovine
whole blood will be collected in individual pre-sanitized containers. The containers will be shipped to separation facility. Prior
to collection of blood, the animals undergo live inspection. Then, following blood collection, the animal carcass undergoes U.S.
Department of Agriculture (USDA) inspection for use as beef for human consumption. If an animal carcass is retained for further
inspection for final disposition by the USDA veterinarian, we reject the corresponding container of whole blood. We have validated
and tested the processes described below for removal of potential pathogens in our raw material. Potential pathogens include bacteria,
viruses such as those leading to hepatitis and AIDS, and the transmissible spongiform encephalopathies that cause rare neurological
disorders such as “mad cow disease” and its human equivalent. The validation of a process means that it has been tested
and documented and that it performs adequately. Health and regulatory authorities have given guidance directed at three factors
to control these diseases: source of animals, the nature of tissue used and manufacturing process. We will comply with, and believe
we will exceed, all current guidelines regarding such risks for human pharmaceutical products.
There
will be four major steps in the manufacture of BXT-25: (1) hemoglobin separation; (2) hemoglobin purification; (3) polymerization/size
selection and (4) synthesizing with our co-polymer. More specifically, bovine blood will be collected in an aseptic fashion and
processed to first remove plasma and then to remove at high concentration the hemoglobin protein from red blood cells. The hemoglobin
will be purified of other red cell proteins by anion exchange chromatography. The purified hemoglobin will be stabilized by the
addition of a cross-linking agent to form hemoglobin polymers. There is an additional sizing step to remove the higher hemoglobin
molecules. The final step, co-polymer synthesis, will take place on the stabilized hemoglobin. The combination polymers will be
filled with a solution suitable for infusion. The product will be run through sterilizing filters into sterile product bags.
Pharmalectin
The Subsidiary
was organized on October 5, 2017 as a Delaware corporation under the name of Bioxytran “Bioxytran (DE)”. On April
29, 2020, the name was changed to Pharmalectin. In the Subsidiary, we are not a party to any long-term agreement with any of our
suppliers and, accordingly, we have our products manufactured on a purchase-order basis from one of two primary well-known and
established pharmaceutical suppliers that meet FDA requirements. Due to an overwhelming amount of research on galectins we do
not plan on conducting any further research into new molecules. Instead, we intend to apply our knowledge of galectin science
and drug development to create new therapies for the treatment of viruses.
Covid-19
A significant
problem related to the Covid-19 pandemic is that an increasing number of Covid-19 patients are developing life-threatening complications,
such as Acute Respiratory Distress Symptom (ARDS), shock (i.e. a potentially fatal drop in blood pressure), kidney failure, acute
cardiac injury and secondary bacterial infections. The underlying cause for these complications is often a cytokine storm that
results in a massive, systemic inflammatory response, leading to the damage of vital organs such as the lungs, heart, and kidneys,
and ultimately multiple organ failure and death in many cases.
We are
currently working on an end-to-end solution for Covid-19 mild to severe cases and treatment for organ damage caused by the virus
or by commonly used treatment methods.
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ProLectin-M, a
chewable polysaccharide tablet for early stage of Covid-19.
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ProLectin-I, an
IV treatment for more severe cases of Covid-19.
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ProLectin-F, an
IV treatment of lung-fibrosis as a result of the use of ventilators used for treatment of Covid-19.
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ProLectin-A, an
IV treatment of ARDS as a result of Covid-19.
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Using
our issued patents and proprietary technology coupled with the scientific knowledge and expertise of Dr. David Platt, we will
develop and manufacture ProLectin-M (oral) for treatment of mild cases and ProLectin-I (intravenous) for treatment of more severe
cases of Covid-19. These treatments may also be used for the treatment of other types of viral infections, such as influenza.
A significant
problem related to the Covid-19 pandemic is that an increasing number of patients are developing life-threatening complications,
such as ARDS, shock (i.e. a potentially fatal drop in blood pressure), kidney failure, acute cardiac injury and secondary bacterial
infections. The underlying cause for these complications is often a cytokine storm that results in a massive, systemic inflammatory
response, leading to the damage of vital organs such as the lungs, heart, and kidneys, and ultimately multiple organ failure and
death in many cases. For this purpose, we are developing ProLectin-A that aim to deliver oxygen to damaged organs and at the same
time fight infection.
The fourth
drug in this series is ProLectin-F is developed to treat patients developing lung fibrosis as a result of the use of ventilator
in Covid-19 treatment. An increasing evidence from experimental and clinical studies suggests that mechanical ventilation, which
is necessary for life support in patients with acute respiratory distress syndrome, can cause lung fibrosis, which may significantly
contribute to morbidity and mortality. According to a review of medical records of 22,350 admissions showed that the cost of treating
patients who were put on a ventilator was four times higher than for those treated without a ventilator and also that the death
rate of pulmonary fibrosis patients who were put on a hospital ventilator was seven times higher than those treated without a
ventilator, according to a review of thousands of medical records.
Strategic Objectives
It is
our intention to develop the drug to the point whereby the company would be in a position to license the drug to large pharmaceuticals
capable of conducting clinical trials and managing the distribution of the product. The Company does not plan to create a sales
and marketing staff to commercialize the pharmaceutical products it produces. The Company would be dependent on third parties
such as licensees, collaborators, joint venture partners or independent distributors to market and sell those products.
The FDC
Act and other federal and state statutes and regulations govern the testing, manufacture, safety, effectiveness, labeling, storage,
record keeping, approval, advertising and promotion of our products. As a result of these laws and regulations, product development
and product approval processes are very expensive and time-consuming. Our goal is to advance our leading drug candidate, BXT-25,
and our Subsidiary’s leading drug candidate, ProLectin, through regulatory submissions for Investigational New Drug (IND)
status in the United States, is subject to expensive and time-consuming approval processes.
Management
Our management
team and advisors include most notably our CEO and Chairman David Platt, Ph.D., who has played a leading role in the development
of complex co-polymer therapeutics for a variety of applications to address a variety of unmet medical needs. Our CFO Ola Soderquist,
CPA, CMA is a seasoned financial officer with than 30 years of senior international entrepreneurial management experience within
many industries, both in public and private companies. Our VP of Business Development (“VPBD”) Mike Sheikh is a US
Air Force Academy graduate and a long-time Biotech Consultant with expertise in public and private biotech companies with disruptive
technologies.
Dr. Platt,
Mr. Sheikh and Mr. Soderquist are our only employees and each of them is committed on a full-time basis. They currently have a
compensation of $6,000 per month.
Business Development
BXT-25
Bioxytran
will develop and, through third party contracts, manufacture oxygen therapeutics. Our oxygen therapeutics are a new class of pharmaceuticals
that are administered intravenously to transport oxygen to the body’s tissues. Currently there are four drug candidates
to treat a stroke. Abciximab from Eli Lilly is a platelet aggregation inhibitor. Clinical trials show little advantage over placebos
and could lead to dangerous side effects, including more bleeding in patients. Cerovive from AstraZeneca is a Nitrone-based neuro
protectant currently in phase III clinical trials which shows no significant benefit over placebos with respect to changes in
neurological impairment as measured by the national institute of health stroke scale. Candesartan, from AstraZeneca, is an angiotensin
receptor blocker which was used to control blood pressure. Its efficacy in stroke patients still must be proven. Ancod from Knoll
Pharmaceuticals is an anti-coagulant that acts by breaking down the fibrinogen. It increases the risk of hemorrhage similar to
those associated with tPA.
Using
our issued patents and proprietary technology, we will develop and manufacture BXT-25 and similar drugs for applications including
treatment of stroke conditions. Our patent position consists of 3 parts: a patent related to our co-polymer technology issued
in 2009 by the United States Patent and Trademark Office expiring in February 2029 (method patent for producing modified pectins
consisting of neutral sugar sequences ) and assigned to us outright by David Platt; various methods to stabilize a single hemoglobin
molecule that are in the public domain; and proprietary technology that is the subject were issued in 2001 by the United States
Patent and Trademark Office expiring in June 2021 (Enhancement of Delivery of Radio imaging and Radioprotective Agents). Dr. Platt
did not receive any compensation from the Company in consideration of his assignment of the two patents.
Bioxytran,
Inc. is the sole company having a license for an FDA approved technology monitoring NADH (OxySense), the control marker in the
body’s conversion of Oxygen to Energy, or the energy generating chain. The technology provides a clinical end-point for
measuring oxygen supply to the brain in real-time. OxySense, developed by MDX LifeSciences, Inc., provide us with a rapid, cost-effective
and validated development of safe new molecules that address unmet medical needs in disease indications resulting from hypoxia.
MDX LifeSciences has assigned a patent (Tissue Metabolic Score for Patient Monitoring) to Bioxytran for clinical monitoring of
oxygen delivery through oxygen carriers.
ProLectin
The 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
inhibitor.
Currently,
the Subsidiary’s lead drug candidate, named ProLectin, is a complex polysaccharide derived from pectin that binds to, and
blocks the activity of galectin-1, a type of galectin. Galectins are a member of a family of proteins in the body called lectins.
These proteins interact with carbohydrate sugars located in, on the surface of, and in between cells. This interaction causes
the cells to change behavior, including cell movement, multiplication, and other cellular functions. The interactions between
lectins and their target carbohydrate sugars occur via a carbohydrate recognition domain, or CRD, within the lectin. Galectins
are a subfamily of lectins that have a CRD that bind specifically to ß-galactoside proteins. Galectins have a broad range
of functions, including regulation of cell survival and adhesion, promotion of cell-to-cell interactions, growth of blood vessels,
regulation of the immune response and inflammation. During viral infections galectins are upregulated and downregulated based
on the type of virus.
Pharmalectin
Inc. is the only company developing a viable end-to-end solution for Covid-19. We are also the only company using a Galectin Inhibitor
to combat the virus, SARS-CoV-2. The technology is built on the life-time work by the founder of the company, David Platt, PhD,
who discovered, and named, the Human Galectin-3 protein coded by a single gene, LGALS3, located on chromosome 14, and published
in his groundbreaking article Structure-Function Relationship of a Recombinant Human Galactoside-Binding Protein, Biochemistry
1993. Galectin inhibitors block the binding of galectins to carbohydrate structures, present in numerous diseases, reducing their
capability to replicate. Dr. Platt has over the years used this knowledge to create a significant number of sustainable therapeutic
solutions.
David
Platt has filed an initial Provisional Patent (Galactomannans for Treatment of SARS-CoV-2/Covid-19)
which has been assigned to Pharmalectin. Two additional provisional patents for use and composition of matter for moderate
Covid-19 and long-hauler Covid-19 will be submitted after the first production run of the intravenous (“IV”) drugs.
The Company
is capitalizing on 30 years of research in Galectins and recent peer reviewed articles on Galectins and Covid-19. The founder
of the Company also has an impressive body of patents in this field which gives him an advantage with respect to filing new patents
based on his prior art. We will rely on a combination of patent applications, patent, trade secrets, proprietary know-how and
trademarks to protect our proprietary rights. We believe that to have a competitive advantage, we must develop and maintain the
proprietary aspects of our technologies. Because the drug can be taken by mouth, treatment can be started early for a potentially
three-fold benefit:
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inhibit patients’ progress
to severe disease
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shorten the infectious phase
to ease the emotional and socioeconomic toll of prolonged patient isolation, and
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rapidly silence local outbreaks
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A Proof
of Concept trial approved by the IRB at Mazumdar Shaw Medical Center, Narayana Health in Bangalore, India was finalized in October
2020. The results of the trial are described in our peer-reviewed article Galectin antagonist use in
mild cases of SARS-CoV-2; pilot feasibility randomised, open label, controlled trial, published in Journal of Vaccines & Vaccination
on December 30, 2020 after pre-print in medRxiv on December 9, 2020.
The study
will continue by the filing an Emergency IND with the FDA and with CDSCO, the equivalent agency in India. An initial pre-IND was
submitted to the FDA in December 2020. In parallel the Subsidiary is filing an additional IND with CDSCO for an IV treatment of
SARS-CoV-2 in moderate (Hospitalized patients) Covid-19 infections (ProLectin-I) and of treatment of lung-fibrosis as a result
of use of ventilator in treatment of Covid-19 (ProLectin-F), respectively.
FDA Approval Process
In the
United States, pharmaceutical products, including biologics like BXT-25 and ProLectin, are subject to extensive regulation by
the FDA. The FDC Act and other federal and state statutes and regulations, govern, among other things, the research, development,
testing, manufacture, storage, recordkeeping, approval, labeling, promotion and marketing, distribution, post-approval monitoring
and reporting, sampling, and import and export of pharmaceutical products. Failure to comply with applicable U.S. requirements
may subject a company to a variety of administrative or judicial sanctions, such as FDA refusal to approve pending new drug applications,
or NDAs, warning letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions,
fines, civil penalties, and criminal prosecution.
Pharmaceutical
product development in the United States typically involves preclinical laboratory and animal tests, the submission to the FDA/EMA
of an IND application, which must become effective before clinical testing may commence, and adequate and well-controlled clinical
trials to establish the safety and effectiveness of the drug or biologic for each indication for which FDA/EMA approval is sought.
Satisfaction of FDA/EMA pre-market approval requirements typically takes many years (typically between 5-7 years post an IND submission)
and the actual time required may vary substantially based upon the type, complexity and novelty of the product or disease.
Preclinical
tests include laboratory evaluation as well as animal trials to assess the characteristics and potential pharmacology and toxicity
of the product. The conduct of the preclinical tests must comply with federal regulations and requirements including good laboratory
practices. The results of preclinical testing are submitted to the FDA as part of an IND along with other information, including
information about product chemistry, manufacturing and controls, and a proposed clinical trial protocol. Long term preclinical
tests, such as animal tests of reproductive toxicity and carcinogenicity, may continue after the IND is submitted.
A 30-day
waiting period after the submission of each IND is required prior to the commencement of clinical testing in humans. If the FDA
has not objected to the IND within this 30-day period, the clinical trial proposed in the IND may begin.
Clinical
trials involve the administration of the investigational drug to healthy volunteers or patients under the supervision of a qualified
investigator. Clinical trials must be conducted in compliance with federal regulations and good clinical practices, or GCP, as
well as under protocols detailing the objectives of the trial, the parameters to be used in monitoring safety and the effectiveness
criteria to be evaluated. Each protocol involving testing on U.S. patients and subsequent protocol amendments must be submitted
to the FDA as part of the IND.
The FDA
may order the temporary or permanent discontinuation of a clinical trial at any time or impose other sanctions if it believes
that the clinical trial is not being conducted in accordance with FDA requirements or presents an unacceptable risk to the clinical
trial patients. The clinical trial protocol and informed consent information for patients in clinical trials must also be submitted
to an institutional review board, or IRB, for approval. An IRB may also require the clinical trial at the site to be halted, either
temporarily or permanently, for failure to comply with the IRB’s requirements, or may impose other conditions.
Clinical
trials to support New Drug Applications (NDAs) are typically conducted in three sequential Phases, but the Phases may overlap.
In Phase 1, the initial introduction of the investigational drug candidate into healthy human subjects or patients, the investigational
drug is tested to assess metabolism, pharmacokinetics, pharmacological actions, side effects associated with increasing doses
and, if possible, early evidence on effectiveness. Phase 2 usually involves trials in a limited patient population, to determine
the effectiveness of the investigational drug for a particular indication or indications, dosage tolerance and optimum dosage,
and identify common adverse effects and safety risks. In the case of product candidates for severe or life-threatening diseases
such as pneumonia, the initial human testing is often conducted in patients rather than in healthy volunteers.
If an
investigational drug demonstrates evidence of effectiveness and an acceptable safety profile in Phase 2 evaluations, Phase 3 clinical
trials are undertaken to obtain additional information about clinical efficacy and safety in a larger number of patients, typically
at geographically dispersed clinical trial sites, to permit the FDA to evaluate the overall benefit-risk relationship of the investigational
drug and to provide adequate information for its labeling.
After
completion of the required clinical testing, an NDA is prepared and submitted to the FDA. FDA approval of the marketing application
is required before marketing of the product may begin in the United States. The marketing application must include the results
of all preclinical, clinical and other testing and a compilation of data relating to the product’s pharmacology, chemistry,
manufacture, and controls.
The FDA
has 60 days from its receipt of an NDA to determine whether the application will be accepted for filing based on the agency’s
threshold determination that it is sufficiently complete to permit substantive review. Once the submission is accepted for filing,
the FDA begins an in-depth review. The FDA has agreed to certain performance goals in the review of marketing applications. Most
such applications for non-priority drug products are reviewed within ten months. The review process may be extended by the FDA
for three additional months to consider new information submitted during the review or clarification regarding information already
provided in the submission. The FDA may also refer applications for novel drug products or drug products that present difficult
questions of safety or efficacy to an advisory committee, typically a panel that includes clinicians and other experts, for review,
evaluation and a recommendation as to whether the application should be approved. The FDA is not bound by the recommendation of
an advisory committee, but it generally follows such recommendations. Before approving a marketing application, the FDA will typically
inspect one or more clinical sites to assure compliance with GCP.
Additionally,
the FDA will inspect the facility or the facilities at which the drug product is manufactured. The FDA will not approve the NDA
unless compliance with cGMPs is satisfactory and the marketing application contains data that provide substantial evidence that
the product is safe and effective in the indication studied. Manufacturers of biologics also must comply with FDA’s general
biological product standards.
After
the FDA evaluates the NDA and the manufacturing facilities, it issues an approval letter or a complete response letter. A complete
response letter outlines the deficiencies in the submission and may require substantial additional testing or information in order
for the FDA to reconsider the application. If and when those deficiencies have been addressed in a resubmission of the marketing
application, the FDA will re-initiate review. If the FDA is satisfied that the deficiencies have been addressed, the agency will
issue an approval letter. The FDA has committed to reviewing such resubmissions in two or six months depending on the type of
information included. It is not unusual for the FDA to issue a complete response letter because it believes that the drug product
is not safe enough or effective enough or because it does not believe that the data submitted are reliable or conclusive.
An approval
letter authorizes commercial marketing of the drug product with specific prescribing information for specific indications. As
a condition of approval of the marketing application, the FDA may require substantial post-approval testing and surveillance to
monitor the drug product’s safety or efficacy and may impose other conditions, including labeling restrictions, which can
materially affect the product’s potential market and profitability. Once granted, product approvals may be withdrawn if
compliance with regulatory standards is not maintained or problems are identified following initial marketing.
Once an
NDA is approved, a product will be subject to certain post-approval requirements. For instance, the FDA closely regulates the
post-approval marketing and promotion of therapeutic products, including standards and regulations for direct-to-consumer advertising,
off-label promotion, industry-sponsored scientific and educational activities and promotional activities involving the internet.
BXT-25
Currently,
Bioxytran’s lead pharmaceutical drug candidate, code-name BXT-25, is an oxygen-carrying small molecule consisting of bovine
hemoglobin stabilized with a co-polymer. This modified hemoglobin will be designed to be an injectable intravenous drug and we
plan to begin pre-clinical studies and apply to the Food and Drug Administration for approval to use BXT-25 to prevent necrosis,
or cell death, by carrying oxygen to human tissue when blood flow to the brain.
The only
FDA approved treatment for ischemic strokes is tissue plasminogen activator tPA, also known as IV rtPA, given through an IV in
the arm. tPA works by dissolving the clot and improving blood flow to the part of the brain being deprived of blood flow. If administered
within 3 hours and up to 4.5 hours in certain eligible patients, tPA may improve the chances of recovering from a stroke. Another
treatment option is an endovascular procedure called mechanical thrombectomy in which a blood clot is removed by threading a wired-caged
device called a stent retriever through an artery in the groin up to the blocked artery in the brain. The stent opens and grabs
the clot, enabling the removal of the stent with the trapped clot.
Hypoxia
is a condition in which cells lack sufficient oxygen supply to support metabolic function. The BXT-25 co-polymer hemoglobin molecule
will be designed to contain an oxygen rechargeable iron which picks up oxygen in the lungs, is expected to be 5,000 times smaller
than an RBC, and we believe can reach hypoxic tissue more effectively than RBCs. Products similar to BXT-25 are stable at room
temperature and have no blood type matching requirement. We plan to introduce BXT-25 in clinical trials for hypoxic medical conditions
as stroke.
For the
production of BXT-25, we intend to utilize third party manufacturing facilities that we believe are fully compliant with Good
Manufacturing Practices (GMP) only, as required by the regulatory authorities in Europe or the United States, in order to produce
a sufficient quantity of BXT-25 for animal toxicity and pre-clinical trials for animals. We have not conducted any clinical trials
on animals or humans to confirm the efficacy of, or filed any applications with the FDA with respect to, BXT-25. We are in the
process of developing BXT-25 for pre-clinical studies for human use, in order to conduct clinical trials and to file applications
with the FDA as applicable. We expect to file an IND application with the FDA in 2021, provided we obtain adequate funding.
This product
is being developed and as an early intervention in an out-of-hospital setting for the treatment of patients with ischemia of the
brain resulting from a stroke or the blockage of the blood vessels to the brain. We plan to initially conduct pre-clinical trials
and to seek approval of BXT-25 for the treatment of adults at early stages of stroke.
We will
design BXT-25 to transport oxygen through blocked arteries to oxygen-deprived tissues. We expect that the BXT-25 molecule at room
temperature solution will be 5,000 times smaller than a red blood cell and its size will enable its delivery to oxygenate brain
tissue where red blood cells will not go due to strokes If we are successful with our Phase I testing for BXT-25 with the FDA,
we plan to apply to the FDA for other indications including wound healing due to hypoxia, cardiovascular ischemia anemia, cancer
conditions and trauma. However, we will need to raise additional funds in excess of the $10,000,000 in order to expand the use
of BXT-25.
ProLectin
Currently,
the Subsidiary’s lead pharmaceutical drug candidate is code named ProLectin. ProLectin is a complex polysaccharide derived
from pectin that binds to, and blocks the activity of galectin-1, a type of galectin. Galectins are a member of a family of proteins
in the body called lectins. These proteins interact with carbohydrate sugars located in, on the surface of, and in between cells.
This interaction causes the cells to change behavior, including cell movement, multiplication, and other cellular functions. The
interactions between lectins and their target carbohydrate sugars occur via a carbohydrate recognition domain, or CRD, within
the lectin. Galectins are a subfamily of lectins that have a CRD that bind specifically to ß-galactoside proteins. Galectins
have a broad range of functions, including regulation of cell survival and adhesion, promotion of cell-to-cell interactions, growth
of blood vessels, regulation of the immune response and inflammation. During viral infections galectins are upregulated and downregulated
based on the type of virus.
There
is an unmet medical need in Covid-19 to find a therapeutic that reduces the mortality of the disease. There are no FDA approved
treatments for Covid-19 only repurposed therapeutics. If given early enough in the disease we believe that ProLectin will block
viral entry and act as an antiviral by eliminating the virus from the blood stream after a couple of treatments. At a later stage
in the disease pathology, ProLectin could restore adaptive immune function to help eradicate the virus from the body. In severe
Covid-19 patients the drug could reduce the trafficking of macrophages responsible for the cytokine storm and restore immune homeostasis.
The cytokine
storm is a severe immune reaction in which the body overproduces too many pro-inflammatory cytokines into the blood leading to
a surge of more immune cells to the site of infection. This translates into an inflammatory cycle that is not easily brought back
to homeostasis. Cytokines play an important role in normal immune responses, but having a large amount of them released in the
body all at once can be harmful. A cytokine storm can occur as a result of an infection, autoimmune condition, or other disease.
It may also occur after treatment with some types of immunotherapy. Signs and symptoms include high fever, inflammation (redness
and swelling), and severe fatigue and nausea. Sometimes, a cytokine storm may be severe or life threatening and lead to acute
respiratory distress syndrome (ARDS), and multiple organ failure.
For the
production of ProLectin, we intend to utilize third party manufacturing facilities that we believe are fully compliant with Good
Manufacturing Practices (GMP) only, as required by the regulatory authorities in Europe or the United States, in order to produce
a sufficient quantity of ProLectin for animal toxicity, pre-clinical trials for animals, and human trials. We have not conducted
any clinical trials on animals or humans to confirm the efficacy of any applications with the FDA with respect to ProLectin. We
are in the process of developing ProLectin for pre-clinical studies for human use, in order to conduct clinical trials and to
file applications with the FDA as applicable. We expect to file an IND application with the FDA in early 2021, provided we obtain
adequate funding.
This product
is being developed as a treatment for mild to moderate Covid-19 patients.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
AS AT DECEMBER 31, 2020 AND
2019
NOTE 1 – BACKGROUND
AND ORGANIZATION
Business Operations
Bioxytran, Inc. (the “Company”)
is an early-stage pharmaceutical company focused on the development, manufacture and commercialization of therapeutic drugs designed
to address hypoxia in humans, which is a lack of oxygen to tissues, in a safe and efficient manner. If it is not addressed, lack
of oxygen to tissues, or hypoxia, results in necrosis, which is the death of cells comprising body tissue. Necrosis cannot be
reversed. Our lead drug candidate, code named BXT-25, is an oxygen-carrying small molecule consisting of bovine hemoglobin stabilized
with a co-polymer with intended applications to include treatment of hypoxic conditions in the brain resulting from stroke, and
hypoxic conditions in wounds to prevent necrosis and to promote healing. The Company’s initial focus is the treatment of
hypoxic conditions in the brain resulting from stroke, and hypoxic conditions in wounds to prevent necrosis and to promote healing.
The Company’s approach potentially will result in the creation of safe drug alternatives to existing therapies for effectively
addressing hypoxic conditions in humans. Our drug development efforts are guided by specialists in co-polymer chemistry and other
disciplines, and we intend to supplement our efforts with input from a scientific and medical advisory board whose members are
leading physicians.
Our Subsidiary, Pharmalectin,
Inc. (the “Subsidiary”) is pursuing their work with a candidate named, ProLectin, a complex polysaccharide derived
from pectin that binds to, and blocks the activity of galectin-1, a type of galectin. Galectins are a member of a family of proteins
in the body called lectins. These proteins interact with carbohydrate sugars located in, on the surface of, and in between cells.
This interaction causes the cells to change behavior, including cell movement, multiplication, and other cellular functions. The
interactions between lectins and their target carbohydrate sugars occur via a carbohydrate recognition domain, or CRD, within
the lectin. Galectins are a subfamily of lectins that have a CRD that bind specifically to se. Galectins have a broad range of
functions, including regulation of cell survival and adhesion, promotion of cell-to-cell interactions, growth of blood vessels,
regulation of the immune response and inflammation. During viral infections galectins are upregulated and downregulated based
on the type of virus.
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 95,000,000 authorized common shares with a par value of $0.0001, and 5,000,000 preferred shares with a par value of $0.0001.
On September 21, 2018, the Company went under a reorganization in form of a reverse merger and is currently registered as a Nevada
corporation with a taxing structure for U.S. federal and state income tax as a C-Corporation with 300,000,000 authorized common
shares with a par value of $0.001, and 50,000,000 preferred shares with a par value of $0.001.
The Subsidiary was organized
on October 5, 2017 as a Delaware corporation, with a taxing structure for U.S. federal and state income tax as a C-Corporation
with 95,000,000 authorized common shares with a par value of $0.0001, and 5,000,000 preferred shares with a par value of $0.0001.
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 17,600,000 outstanding shares; 15,000,000 shares are held by Bioxytran and 2,600,000 shares
by Pharmalectin Partners, LLC (the “Investor”). Pharmalectin Partners, LLC has agreed to buy an additional 12,400,000
shares for a total of $4,100,000, a total ownership of 50% of Pharmalectin, Inc. After full execution the shares are convertible
to 17.5% of the shares in Bioxytran, Inc.
Basis of Presentation
The summary of significant
accounting policies presented below is designed to assist in understanding the Company’s consolidated financial statements.
Such financial statements and accompanying notes are the representations of the Company’s management, who are responsible
for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United
States of America (“U.S. GAAP”) in all material respects and have been consistently applied in preparing the accompanying
consolidated financial statements. The Company has not earned any revenue from operations since inception. The Company chose December
31st as its fiscal year end.
Principles of Consolidation
The accompanying consolidated
financial statements include the accounts of Bioxytran, Inc. a Nevada Corporation and its wholly owned subsidiary, Pharmalectin,
Inc. of Delaware (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 a 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 and the valuation allowance related to deferred tax assets. Actual results may differ from these estimates.
Net Loss per Common Share,
basic and diluted
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 December 31, 2020, we would,
based on current market price of $0.24/share, be obligated to issue approximately 11,974,301 shares of common stock upon conversion
of the currently outstanding Convertible Notes and 272,000 shares upon exercise of the warrants. For the Notes, the shares total
is based on $1,867,991 of currently outstanding principal, default penalty and unpaid interest. At December 31, 2019, we would,
based on current market price of $0.285/share, be obligated to issue approximately 5,628,000 shares of common stock upon conversion
of the outstanding Convertible Note and 616,666 shares upon exercise of the warrants. For the Notes, the shares total was based
on $850,983 of currently outstanding principal and unpaid interest
The conversion is priced to
equal to the lesser of (i) the lowest trading price for the twenty-day period prior to the date of the Note or (ii) 65% of the
lowest trading price during the twenty days prior to a conversion notice on the applicable trading market or the closing bid price
on the applicable trading market. The Convertible Notes are limited to converting no more than 4.99% of our issued an outstanding
common stock.
Stock Based Compensation
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 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 form transactions in a company’s own stock “. . . from the determination of net income or
the results of operations under all circumstances.” During the year ended December 31, 2020, the Company sold 9% of its subsidiary Pharmalectin for
a total amount of $950,000. Accordingly, APIC has been adjusted with this amount for the year ended December 31, 2020, no such
transaction took place during the year ended December 31, 2019.
Income Taxes
The Company accounts for income
taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future
tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities
and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year
in which those temporary differences are expected to be recovered or be settled. The effect on deferred tax assets and liabilities
of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided
when it is more likely than not that some portion of the gross deferred tax asset will not be realized. The Company records interest
and penalties related to income taxes as a component of provision for income taxes. The Company did not recognize any interest
and penalty expense for the years ended December 31, 2020 and 2019.
On December 22, 2017, the Tax
Cuts and Jobs Act (TCJA) was signed into law by the President of the United States. TCJA is a tax reform act that among other
things, reduced corporate tax rates to 21 percent effective January 1, 2018. FASB ASC 740, Income Taxes, requires deferred tax
assets and liabilities to be adjusted for the effect of a change in tax laws or rates in the year of enactment, which is the year
in which the change was signed into law. Accordingly, the Company adjusted its deferred tax assets and liabilities at December
31, 2017, using the new corporate tax rate of 21 percent. See Note 10.
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. During the year
ended December 31, 2020 the Company incurred $544,519 in research and development expenses, while during the year ended December
31, 2019 the Company did not incur any such expenses.
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 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.
Recent Accounting Pronouncements
There were various updates
recently issued, most of which represented technical corrections to the accounting literature or application to specific industries
and are not expected to a have a material impact on the Company’s financial position, results of operations or cash flows.
NOTE 3 – GOING CONCERN
AND MANAGEMENT’S LIQUIDITY PLANS
As at December
31, 2020, the Company had cash of $41,688 and a negative working capital of $1,951,256. As at December 31, 2020, the Company has
not yet generated any revenues, and has incurred cumulative net losses of $4,721,923. These conditions raise substantial doubt
about the Company’s ability to continue as a going concern.
During the
year ended December 31, 2020, the Company raised $264,000 from issuance of convertible notes, and paid back $232,948. The Company
also raised $950,000 in cash proceeds from the issuance of common stock in our Subsidiary. During the same period in 2019, the
Company raised $794,250 from the issuance of convertible notes, and paid back $250,000, and $20,000 in cash proceeds from the
issuance of common stock. The Company is aware that its current cash on hand will not be sufficient to fund its projected operating
requirements through the month of March 2021 and is pursuing alternative opportunities to funding.
The Company
intends to raise additional capital through private placements of debt and equity securities, but there can be no assurance that
these funds will be available on terms acceptable to the Company, or will be sufficient to enable the Company to fully complete
its development activities or sustain operations. If the Company is unable to raise sufficient additional funds, it will have
to develop and implement a plan to further extend payables, reduce overhead, or scale back its current business plan until sufficient
additional capital is raised to support further operations. There can be no assurance that such a plan will be successful.
Accordingly,
the accompanying consolidated financial statements have been prepared in conformity with U.S. GAAP, which contemplates continuation
of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business.
The carrying amounts of assets and liabilities presented in the financial statements do not necessarily purport to represent realizable
or settlement values. The consolidated financial statements do not include any adjustment that might result from the outcome of
this uncertainty.
NOTE 4 – PRE-PAID
EXPENSES AND OTHER CURRENT ASSETS
On December 31, 2020, there was
$274,715 in Pre-paid Expenses for a Contract Research Organization (CRO) for services planned for the first quarter of 2021. At
December 31, 2019 there was $50,000 in Other Receivables for a convertible note signed at year end, and paid in the beginning
of 2020.
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.
No impairment charges were recorded for the years ended December 31, 2020 and 2019.
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 seventeen years. The current patent application is still in process, and is
therefore not yet amortized.
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Life (years)
|
|
|
December 31, 2020
|
|
|
December 31, 2019
|
|
Capitalized patent costs
|
|
|
20
|
|
|
$
|
10,000
|
|
|
$
|
—
|
|
Accumulated amortization
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible assets, net
|
|
|
|
|
|
$
|
10,000
|
|
|
$
|
—
|
|
NOTE 6 – ACCOUNTS PAYABLES AND ACCRUED EXPENSES
AND OTHER CURRENT LIABILITIES
On December 31, 2020, there
was $307,176 in Accounts Payables to related parties in form of payroll and advanced expenses. On December 31, 2019 there was
$96,000 in Accounts Payables to related parties.
The following table represents
the major components of accounts payables and accrued expenses and other current liabilities at December 31, 2020 and December
31, 2019:
|
|
December 31, 2020
|
|
|
December 31, 2019
|
|
Accounts payable related party
(1)
|
|
$
|
307,176
|
|
|
$
|
96,000
|
|
Professional fees
|
|
|
84,325
|
|
|
|
42,963
|
|
Interest
|
|
|
263,135
|
|
|
|
14,374
|
|
Payroll taxes
|
|
|
—
|
|
|
|
7,344
|
|
Other accounts payable
|
|
|
667
|
|
|
|
7,251
|
|
Default penalty
|
|
|
673,956
|
|
|
|
—
|
|
Convertible note payable
|
|
|
938,400
|
|
|
|
850,983
|
|
Total
|
|
$
|
2,267,659
|
|
|
$
|
1,018,915
|
|
|
(1)
|
$120,000 to each the CFO and the CEO for 8 months
of salary for the period May 2019 through December 2020, and $67,176 to the VPBD for
salary and expenses for the period May through December 2020, while there was $48,000
to each the CFO and the CEO at December 31,2019.
|
NOTE 7 – CONVERTIBLE NOTES PAYABLE
As
long as the following convertible notes remain outstanding, the Company is restricted from incurring any indebtedness or liens,
except as permitted (as defined), and cannot amend its charter in any matter that materially effects rights of noteholders, repay
or repurchase more than de minimis number of shares of common stock other than conversion or warrant shares, repay or repurchase
all or any portion of any indebtedness, or pay cash dividends.
Auctus
Note #1
On
October 24, 2019 (the “Date of Issuance”) the Company issued a convertible promissory note (the “Auctus Note
#1”) with a face value of $250,000, maturing on October 23, 2020, and a stated interest of 8% to a third-party investor.
The Auctus Note #1 is convertible into common stock of the Company, par value $.001 per share (the “Common Stock”)
at any time after the earlier of: (i) 180 days from the date of the Auctus Note #1, or (ii) upon effective date of a registration
statement. The conversion price of the Auctus Note #1 is equal to the lesser of : (i) the lowest trading price for the twenty-day
period prior to the date of the Auctus Note #1 or (ii) 65% of the average of the three lowest trading prices during the twenty
days prior to a conversion notice on the applicable trading market or the closing bid price on the applicable trading market.
The Auctus Note #1 was funded on October 29, 2019, when the Company received proceeds of $222,205, after disbursements for the
lender’s transaction costs, fees and expenses which in aggregate resulted in a total discount of $27,795 to be amortized
to interest expense over the life of the Auctus Note #1.
Additionally,
the variable conversion rate component requires that the Auctus Note #1 be valued at its stock redemption value (i.e., “if-converted”
value) pursuant to ASC 480, Distinguishing Liabilities from Equity, with the excess over the undiscounted face value being
deemed a premium to be added to the principal balance and amortized to additional paid-in capital over the life of the Auctus
Note #1. As such, the Company recorded a premium of $343,796 as a reduction to additional paid-in capital based on a discounted
“if-converted” rate of $0.21 per share (65% of the average of the three lowest trading prices during the 20 days preceding
the note’s issuance), which computed to 1,211,828 shares of ‘if-converted’ common stock with a redemption
value of $593,796 due to $0.49 per share fair market value of the Company’s stock on the Auctus Note #1’s date of
issuance. Debt discount amortization is recorded as interest expense, while debt premium amortization is recorded as an increase
to additional paid-in capital.
Along
with the Auctus Note #1, on the Date of Issuance the Company issued 208,333 Common Stock Purchase Warrants (the “Warrants”),
exercisable immediately at a fixed exercise price of $0.60 with an expiration date of October 23, 2023. The Company has determined
that the Warrants are exempt from derivative accounting and were valued at $101,937 on the Date of Inception using the Black Scholes
Options Pricing Model. Assumptions used for the Black Scholes Options Pricing Model include (1) stock price of $0.49 per share,
(2) exercise price of $0.60 per share, (3) term of 5 years, (4) expected volatility of 251% and (5) risk free interest rate of
2.51%. The note proceeds of $250,000 were then allocated between the fair value of the Auctus Note #1 ($250,000) and the Warrants
($101,937), resulting in a debt discount of $72,412. As the warrants were exercisable immediately, this debt discount was amortized
in its entirety to interest expense on the Date of Issuance. Upon cashless conversion on March 12, 2020 an additional 166,667
warrants were issued for a market value of $66,363.
The
Auctus Note #1 was paid off on October 24, 2019, and the warrants were exercised on March 12,2020
Auctus
Note #2
On
February 25, 2019, the Company entered into a $250,000 Senior Secured Promissory Note (“the Auctus Note #2”), dated
February 25, 2019 at an interest rate of 8% per annum, maturing on February 24, 2020 (the “Maturity Date”). Issuance
fees totaling $27,750 were recorded as a debt discount, resulting in net proceeds of $222,250. The Auctus Note #2 is convertible
into common stock of the Company, par value $.001 per share (the “Common Stock”) at any time after the earlier of:
(i) 180 days from the date of the Auctus Note #2 or (ii) upon effective date of a new registration statement. The conversion price
of the Auctus Note #2 is equal to the lesser of : (i) the lowest trading price for the twenty-day period prior to the date of
the Auctus Note #2 or (ii) 65% of the average of the three lowest trading prices during the twenty days prior to a conversion
notice on the applicable trading market or the closing bid price on the applicable trading market. The Company may prepay the
Auctus Note #2 at any time at a rate of 120% of outstanding principal and interest during the first 90 days it is outstanding
and 130% of outstanding principal and interest for the next 90 days thereafter. Thereafter the prepayment amount increases 5%
for each thirty-day period until 270 days from the issue date at which time it is fixed at 150% of the outstanding principal and
interest on the Auctus Note #2.
Additionally,
the variable conversion rate component requires that the Auctus Note #2 be valued at its stock redemption value (i.e., “if-converted”
value) pursuant to ASC 480, Distinguishing Liabilities from Equity, with the excess over the undiscounted face value being deemed
a premium to be added to the principal balance and accreted to additional paid-in capital over the life of the Auctus Note #2.
As such, the Company recorded a premium of $82,500 as a reduction to additional paid-in capital based on a discounted “if-converted”
rate of $0.20 per share (lowest trading price during the 20 days preceding the note’s issuance), which computed to 1,250,000
shares of ‘if-converted’ common stock with a redemption value of $332,500 due to $0.266 per share fair market value
of the Company’s stock on the Auctus Note #2’s date of issuance. Debt discount amortization is recorded as interest
expense, while debt premium accretion is recorded as an increase to additional paid-in capital. For the year ended December 31,
2020, the Company amortized $4,647 debt discount to operations as interest expense, and accreted $24,121 of premium to additional
paid-in capital.
Along
with the Auctus Note #2, on the Date of Issuance the Company issued 208,333 Common Stock Purchase Warrants (the “Warrants”),
exercisable immediately at a fixed exercise price of $0.60 with an expiration date of February 24, 2024. The Company has determined
that the Warrants are exempt from derivative accounting and were valued at $55,417 on the Date of Inception using the Black Scholes
Options Pricing Model. Assumptions used for the Black Scholes Options Pricing Model include (1) stock price of $0.27 per share,
(2) exercise price of $0.60 per share, (3) term of 5 years, (4) expected volatility of 323% and (5) risk free interest rate of
2.56%. The Auctus Note #2 proceeds of $250,000 were then allocated between the fair value of the Auctus Note #2 ($250,000) and
the Warrants ($55,417), resulting in a debt discount of $45,361. As the warrants are exercisable immediately, this debt discount
was amortized in its entirety to interest expense on the Date of Issuance. Upon cashless conversion on March 12, 2020 an additional
166,667 warrants were issued for a market value of $66,364.
The
Auctus Note #2 was paid off on February 20, 2020, and the warrants were exercised on March 12,2020.
Current
notes convertible
In
the period January 1 to March 18, 2020 the Company entered into five contracts totaling $356,100 Senior Secured Promissory Note
(“the Notes”), at an interest rate of 4-8% per annum, maturing in one year from issuance (the “Maturity Date”).
Issuance fees totaling $50,100 were recorded as a debt discount, resulting in net proceeds of $306,000. The Notes are convertible
into common stock of the Company, par value $.001 per share (the “Common Stock”) at any time after the earlier of:
(i) 180 days from the date of the Notes or (ii) upon effective date of a new registration statement. The conversion price of the
Notes is equal to the lesser of: (i) the lowest trading price for the twenty-day period prior to the date of the Notes or (ii)
65% of the average of the three lowest trading prices during the twenty days prior to a conversion notice on the applicable trading
market or the closing bid price on the applicable trading market. The Company may prepay the Notes at any time at a rate of 120%
of outstanding principal and interest during the first 90 days it is outstanding and 130% of outstanding principal and interest
for the next 90 days thereafter. Thereafter the prepayment amount increases 5% for each thirty-day period until 270 days from
the issue date at which time it is fixed at 150% of the outstanding principal and interest on the Notes.
The
Company also issued five-year warrants with cashless exercise provisions to purchase shares of Common Stock of the Company at
an exercise price of $2.00 per share with cashless exercise provisions. For the year ending at December 31, 2020, the Company
issued 72,000 warrants, resulting in an amortized debt discount of $12,711.
Default
on Convertible Notes
On
April 16, 2020, SEC ordered, pursuant to Section 12(k) of the Securities Exchange Act of 1934, that trading of BIXT was suspended
for the period April 16 through April 29, 2020.
As a result of the SEC ordered suspension the Company defaulted on outstanding Convertible Notes; resulting
in an increase of the interest to ranges between 15% and 24% and the principal to increase to 168% of principal loan amount. The
convertible debt increased by $673,956 to $1,612,356 while the interest accrual increased to approximately $28,563/month, amounting
to $263,135 at December 31, 2020. At the default date, April 16, 2020, remaining debt discount of $76,265 was amortized to interest
expense and the remaining debt premium of $856,560 was accredited to additional paid-in capital.
A summary
of the outstanding notes at December 31, 2020, are as follows:
Debtor
|
|
Date of
Issuance
|
|
|
Default
Date
|
|
|
Principal
Amount
|
|
|
Default Penalty
|
|
|
Default Interest
|
|
|
Warrants Issued
|
|
|
Term
|
|
|
Exercise
Price
|
|
|
Amortization
of
Warrants
|
|
|
Accrued Interest
|
|
GS Capital
|
|
|
10/30/2019
|
|
|
|
4/16/2020
|
|
|
$
|
125,000
|
|
|
$
|
65,808
|
|
|
|
24
|
%
|
|
|
50,000
|
|
|
|
5
|
|
|
$
|
2.00
|
|
|
$
|
23,867
|
|
|
$
|
34,700
|
|
Power Up #1
|
|
|
10/24/2019
|
|
|
|
4/16/2020
|
|
|
|
106,000
|
|
|
|
114,224
|
|
|
|
22
|
%
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
38,491
|
|
Peak One
|
|
|
10/23/2019
|
|
|
|
4/16/2020
|
|
|
|
120,000
|
|
|
|
36,000
|
|
|
|
18
|
%
|
|
|
50,000
|
|
|
|
5
|
|
|
|
2.00
|
|
|
|
21,606
|
|
|
|
19,925
|
|
Tangiers
|
|
|
10/23/2019
|
|
|
|
4/16/2020
|
|
|
|
106,300
|
|
|
|
48.261
|
|
|
|
18
|
%
|
|
|
50,000
|
|
|
|
5
|
|
|
|
2.00
|
|
|
|
21,116
|
|
|
|
23,842
|
|
FirstFire
|
|
|
11/20/2019
|
|
|
|
4/16/2020
|
|
|
|
125,000
|
|
|
|
65,541
|
|
|
|
24
|
%
|
|
|
50,000
|
|
|
|
5
|
|
|
|
2.00
|
|
|
|
17,979
|
|
|
|
34,477
|
|
Power Up #2
|
|
|
12/30/2019
|
|
|
|
4/16/2020
|
|
|
|
54,600
|
|
|
|
57,185
|
|
|
|
22
|
%
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
18,743
|
|
EMA Financial
|
|
|
01/10/2020
|
|
|
|
4/16/2020
|
|
|
|
125,000
|
|
|
|
135,158
|
|
|
|
24
|
%
|
|
|
50,000
|
|
|
|
5
|
|
|
|
2.00
|
|
|
|
5,948
|
|
|
|
44,357
|
|
Crown Bridge
|
|
|
02/20/2020
|
|
|
|
4/16/2020
|
|
|
|
55,000
|
|
|
|
28,015
|
|
|
|
15
|
%
|
|
|
22,000
|
|
|
|
5
|
|
|
|
2.00
|
|
|
|
6,763
|
|
|
|
9,180
|
|
Power Up #3
|
|
|
02/19/2020
|
|
|
|
4/16/2020
|
|
|
|
56,600
|
|
|
|
58,039
|
|
|
|
22
|
%
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
18,616
|
|
Power Up #4
|
|
|
03/18/2020
|
|
|
|
4/16/2020
|
|
|
|
64,900
|
|
|
|
65,725
|
|
|
|
22
|
%
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
20,804
|
|
|
|
|
|
|
|
|
|
|
|
$
|
938,400
|
|
|
$
|
673,956
|
|
|
|
|
|
|
|
272,000
|
|
|
|
|
|
|
|
|
|
|
$
|
97,279
|
|
|
$
|
263,135
|
|
Convertible
notes payable consists of the following at December 31, 2020 and December 31, 2019:
|
|
December 31, 2020
|
|
|
December 31, 2019
|
|
Principal balance
|
|
$
|
938,400
|
|
|
$
|
886,900
|
|
Default penalty
|
|
|
673,956
|
|
|
|
—
|
|
Unamortized debt discount
|
|
|
—
|
|
|
|
(60,038
|
)
|
Unamortized debt premium
|
|
|
—
|
|
|
|
24,121
|
|
Outstanding, net of debt discount
and premium
|
|
$
|
1,612,356
|
|
|
$
|
850,983
|
|
NOTE 8 – STOCKHOLDERS’ EQUITY
Preferred stock
As at December 31, 2020 and
2019, no preferred shares have been designated or issued.
Common stock
On May 30, 2019, 25,000 shares
of common stock were issued as a result of conversion of accrued interest on the Auctus Note #1 at $0.20 per share for a total
of $5,000.
On July 18, 2019, 25,000 shares
of common stock were issued as a result of conversion of accrued interest on the Auctus Note #1 at $0.20 per share for a total
of $5,000.
On August 20, 2019, 20,000
shares of common stock were sold and issued from the active S-1 at $1 per share for a total of $20,000.
On August 22, 2019, 25,000
shares of common stock were issued as a result of conversion of accrued interest on the Auctus Note #1 at $0.20 per share for
a total of $5,000.
On October 8, 2019, 50,000
shares of common stock were issued as a result of conversion of principal as well as accrued interest on the Auctus Note #1 at
$0.20 per share for a total of $10,000.
On November 8, 2019, 100,000
shares of common stock were issued as a result of conversion of accrued interest on the Auctus Note #2 at $0.12 per share for
a total of $12,000.
The
Company recorded $864,551 in stock-based compensation for 1,127,000 issued shares in the year ended December 31, 2019. For details,
see Shares Awarded and Issued under Note 9.
On
January 3, 2020, 100,000 shares of common stock were issued as a result of conversion of accrued interest and principal on the
Auctus Note #2 for a total of $12,000.
On
February 18, 2020, 250,000 shares of common stock were issued as a result of conversion of accrued interest and principal on the
Auctus Note #2 for a total of $22,132.
On
March 12, 2020, 750,000 of common stock were issued in exchange for 416,666 warrants with cashless exercise, originating from
Auctus Notes #1 and #2.
For
the year ending December 31, 2020, 9,875,000 shares were awarded with an average cost per share of $0.01, under the 2010 Stock
Plan for a total value of $228,407. For details, see Shares Awarded and Issued under Note 9.
As at December 31, 2020, the
Company has 97,450,673 shares of common stock issued and outstanding. At December 31, 2019 there were 86,475,673 shares of common
stock issued and outstanding.
Common Stock Warrants
The fair value of stock warrants
granted for the year ended December 31, 2020 was calculated with the following assumptions:
|
|
2020
|
|
|
2019
|
|
Risk-free interest rate
|
|
|
0.46 - 1.67
|
%
|
|
|
1.34 - 2.32
|
%
|
Expected dividend yield
|
|
|
0
|
%
|
|
|
0
|
%
|
Volatility factor (monthly)
|
|
|
158.22
|
%
|
|
|
122.25
|
%
|
Expected life of warrant
|
|
|
5 years
|
|
|
|
5 years
|
|
For the year ended December
31, 2020 the Company awarded 405,334 warrants, valued at $145,438, and 750,000 shares of common stock were issued in a cashless
exercise. For the year ended December 31, 2019 the Company issued 408,333 Warrants as part of a convertible note agreements. The
warrants total value allocated to debt discount was $129,929. For details, see Convertible Note Payable under Note 7.
The following table summarizes
the Company’s common stock warrant activity for the year ended December 31, 2020 and 2019:
|
|
Number of Warrants
|
|
|
Weighted Average Exercise
Price
|
|
|
Weighted- Average Remaining
Expected Term
|
|
Outstanding as at January 1,
2019
|
|
|
208,333
|
|
|
$
|
0.60
|
|
|
|
4.8
|
|
Granted
|
|
|
408,333
|
|
|
|
1.29
|
|
|
|
5.0
|
|
Exercised
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Forfeited/Canceled
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Outstanding as at December
31, 2019
|
|
|
616,666
|
|
|
$
|
1.06
|
|
|
|
4.2
|
|
Granted
|
|
|
405,334
|
|
|
|
0.36
|
|
|
|
0.9
|
|
Exercised
|
|
|
(750,000
|
)
|
|
|
—
|
|
|
|
—
|
|
Forfeited/Canceled
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Outstanding as at December
31, 2020
|
|
|
272,000
|
|
|
$
|
2.00
|
|
|
|
3.9
|
|
The following table summarizes
information about stock warrants that are vested or expected to vest at December 31, 2020:
|
|
|
|
|
Warrants
Outstanding
|
|
|
|
|
|
|
|
|
|
Exercisable Warrants
|
|
|
|
Exercise
Price
|
|
|
|
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
|
|
$
|
2.00
|
|
|
|
272,000
|
|
|
$
|
2.00
|
|
|
|
3.90
|
|
|
$
|
—
|
|
|
|
272,000
|
|
|
$
|
2.00
|
|
|
|
3.90
|
|
|
$
|
—
|
|
$
|
2.00
|
|
|
|
272,000
|
|
|
$
|
2.00
|
|
|
|
3.90
|
|
|
$
|
—
|
|
|
|
272,000
|
|
|
$
|
2.00
|
|
|
|
3.90
|
|
|
$
|
—
|
|
The following table sets forth
the status of the Company’s non-vested warrants as at December 31, 2020 and December 31, 2019:
|
|
Number of Options
|
|
|
Weighted- Average Grant-Date
Fair Value
|
|
Non-vested as at December 31,
2019
|
|
|
—
|
|
|
$
|
—
|
|
Granted
|
|
|
405,334
|
|
|
|
0.13
|
|
Forfeited
|
|
|
—
|
|
|
|
—
|
|
Vested
|
|
|
405,334
|
|
|
|
0.13
|
|
Non-vested as at December 31,
2020
|
|
|
—
|
|
|
$
|
—
|
|
The weighted-average remaining
contractual life for warrants exercisable at December 31, 2020 is 3.90 years.
The aggregate intrinsic value
for fully vested, exercisable warrants was $0 at December 31, 2020 and 2019 was $0.
Common Stock Options
For the year ended December
31, 2020 there were 192,000 options awarded under the 2010 Stock Option Plan. The options total fair value at the time of award
was $18,460. For the year ended December 31, 2019 there were 341,000 options awarded under the 2010 Stock Option Plan. The options
total fair value at the time of award was $257,143. For details, see Stock options granted and vested under note 9.
Sales of Shares in Subsidiary
For the year ended December
31, 2020 there were 2,600,000 shares sold in the Company’s Subsidiary, Pharmalectin, Inc. for a total of $950,000. For
the year ended December 31, 2019 there were no such transaction.
NOTE
9 – STOCK OPTION PLAN AND STOCK-BASED COMPENSATION
During the year ended December
31, 2010, the Company adopted a stock option plan entitled “The 2010 Stock Plan” (2010 Plan) under which the Company
may grant Options to Purchase Stock, Stock Awards or Stock Appreciation Rights up to 15% of common stock, automatically adjusted
on January 1 each year. As at December 31, 2020, there were 533,000 outstanding stock options valued at historic fair market value
of $275,603 and 11,002,000 shares issued valued at a fair historic market value of $1,075,358 at the time of award. As at December
31, 2019, there were 341,000 outstanding stock options with a fair historic market value of $257,143 and 1,127,000 shares issued
with a fair historic market value of $864,551 at the time of award.
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.
Shares Awarded and Issued:
On November 2, 2018, the Company
granted 4,000 shares with a fair market value of $0.51 to four members of the Company Board as compensation for their contribution
in the Company’s Board of Directors, for a total of $2,040. The shares were issued in 2019.
On November 6, 2018, the Company
granted 1,000 shares with a fair market value of $0.52 to one member of the Audit Committee as compensation for his contribution
in this Company Committee, for a total of $520. The shares were issued in 2019.
On November 29, 2018, the Company
granted 4,000 shares with a fair market value of $1.00 to four members of the Audit Committee as compensation for his contribution
in this Company Committee, for a total of $4,000. The shares were issued in 2019.
On March 7, 2019, the Company
granted 3,000 shares with a fair market value of $0.27 to three members of the Audit Committee as compensation for their contribution
in the Audit Committee, for a total of $810.
On March 11, 2019 the Company
granted 100,000 shares with a fair market value of $0.266, to a consultant as compensation for their work with the Company’s
IR, for a total of $26,600.
On May 10,2019 the Company
granted 3,000 shares with a fair market value of $1.00 to three members of the Audit Committee as compensation for their contribution
in the Audit Committee, for a total of $3,000.
On May 17, 2019, the Company
granted 4,000 shares with a fair market value of $1.49 to four members of the Company Board as compensation for their contribution
in the Company’s Board of Directors, for a total of $5,960.
On June 11, 2019 the Company
granted 250,000 shares with a fair market value of $1.39 to a Financial Advisory Board Member for his contribution in the Company’s
Advisory Board, for a total of $347,500.
On July 15, 2019 the Company
granted 100,000 shares with a fair market value of $0.75 to a Financial Advisory Board Member for his contribution in the Company’s
Advisory Board, for a total of $75,000.
On July 16, 2019 the Company
granted 100,000 shares with a fair market value of $1.00 to a Financial Advisory Board Member for his contribution in the Company’s
Advisory Board, for a total of $100,000.
On August 9, 2019, the Company
granted 2,000 shares with a fair market value of $0.80 to two members of the Audit Committee as compensation for their contribution
in the Audit Committee, for a total of $1,600.
On October 17, 2019 the Company
granted 3,000 shares with a fair market value of $0.60 to four members of the Company Board as compensation for their contribution
in the Company’s Board of Directors, for a total of $1,800.
On October 21, 2019 the Company
granted 300,000 shares with a fair market value of $0.554 at the time of award, to a consultant as compensation for their work
with the Company’s IR, for a total of $166,283.
On November 8, 2019 the Company
granted 3,000 shares with a fair market value of $0.65 to four members of the Company Board as compensation for their contribution
in the Company’s Board of Directors, for a total of $1,950.
On November 11, 2019 granted
a subcontractor 250,000 shares with a fair market value of $0.51 at the time of award, as compensation for their work with the
Company’s IR, for a total of $127,500.
On
January 1, 2020 the Company granted 250,000 shares with a fair market value of $0.285/share at the time of award, to a consultant
for assistance with the Companies PR work, for a total of $71,250.
On
January 31, 2020 the Company granted two subcontractors a total of 200,000 shares with a fair market value of $0.14/share at the
time of award, as compensation for their work with the Company’s marketing efforts, for a total of $28,000.
On
February 21, 2020 the Company granted 3,000 shares with a fair market value of $0.439/share to three members of the Audit Committee
as compensation for their contribution in the Audit Committee, for a total of $1,317.
On
March 18, 2020 the Company granted 200,000 shares with a fair market value of $0.245/share at the time of award, to a consultant
for assistance with the Companies PR work, for a total of $49,000.
On
March 25, 2020, the Company granted 3,000 shares with a fair market value of $0.31/share to three members of the Company Board
as compensation for their contribution in the Company’s Board of Directors, for a total of $930.
On
May 1, 2020 the Company appointed Mr. Mike Sheikh as EVP of Business Development. Mr. Sheikh was issued 8,800,000 shares with
a fair market value of $0.003/share to be equally vested over a period of 3 years, but fully vested upon a change of control.
The shares total fair value at the time of the award was $26,400.
On
July 1, 2020, the Company granted 3,000 shares with a fair market value of $0.19/share to three members of the Company Board as
compensation for their contribution in the Board and Committee contribution during the previous quarter, for a total of $570.
On
August 3, 2020, the Company granted a total of 100,000 shares, to two Medical Consultants for their efforts in validating the
Company’s science and potential clinical pathways. The shares total fair value at the time of award was $300.
On
September 17, 2020, the Company granted a total of 50,000 shares, to a Medical Consultants for his efforts in validating the Company’s
science and potential clinical pathways. The shares total fair value at the time of award was $1,500.
On
October 1, 2020, the Company granted 3,000 shares with a fair market value of $0.02/share to three members of the Company Board
as compensation for their contribution in the Board and Committee contribution during the previous quarter, for a total of $60.
On
November 13, 2020, the Company granted 63,000 shares with a fair market value of $0.18/share to three members of the Company Board
as compensation for their contribution in the Board and Committee contribution during the previous quarter, for a total of $11,580.
On
November 13, 2020, the Company granted 200,000 shares with a fair market value of $0.19/share to two Medical Consultants for their
efforts in validating the Company’s science and potential clinical pathways, for a total of $37,500.
|
|
Number of Shares
|
|
|
Fair Value per Share
|
|
|
Weighted Average Market Value
per Share
|
|
Shares
Granted as at December 31, 2019
|
|
|
1,127,000
|
|
|
$
|
0.27 - 1.49
|
|
|
$
|
0.77
|
|
Shares
Granted
|
|
|
9,875,000
|
|
|
|
0.003 - 0.44
|
|
|
|
0.02
|
|
Shares
Granted as at December 31, 2020
|
|
|
11,002,000
|
|
|
$
|
0.003 - 1.49
|
|
|
$
|
0.10
|
|
For the year ended December
31, 2020, the Company recorded stock-based compensation expense of $228,407 in connection with share-based payment awards. For
the year ended December 31, 2019, the Company recorded stock-based compensation expense of $864,551 in connection with share-based
payment awards.
Stock options granted
and vested:
On May 1, 2019, the Company
granted 45,000 three-year vested options at an exercise price of $1.21, 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 $44,820.
On July 1, 2019 the Company
granted 3,000 three-year vested options at an exercise price of $1.09 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 $2,447.
On August 1, 2019 the Company
granted 45,000 three-year vested options at an exercise price of $1.10 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 $39,731.
On September 13, 2019 the Company
granted 200,000 three-year vested options at an exercise price of $0.95 to two Financial Advisory Board Members for their contribution
in the Company’s Advisory Board. The options total fair value at the time of award was $141,060.
On October 1, 2019 the Company
granted 3,000 three-year vested options at an exercise price of $0.73 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 $1,635.
On November 1, 2019 the Company
granted 45,000 three-year vested options at an exercise price of $0.61 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 $27.450.
On
January 1, 2020 the Company granted 3,000 three-year vested options at an exercise price of $0.31 to a Medical Advisory Board
Member for his contribution in the Company’s Advisory Board. The options total fair value at the time of award was $603.
On
February 1, 2020 the Company granted 45,000 three-year vested options at an exercise price of $0.15 to a Medical Advisory Board
Member for his contribution in the Company’s Advisory Board. The options total fair value at the time of award was $4,401.
On
April 1, 2020 the Company granted 3,000 three-year vested options at an exercise price of $0.32 to a Medical Advisory Board Member
for his contribution in the Company’s Advisory Board. The options total fair value at the time of the award was $646.
On
May 1, 2020 the Company granted 45,000 three-year vested options at an exercise price of $0.001 to a Medical Advisory Board Member
for his contribution in the Company’s Advisory Board. The options total fair value at the time of the award was $45.
On
July 1, 2020 the Company granted 3,000 three-year vested options at an exercise price of $0.18/share to a Medical Advisory Board
Member for his contribution in the Company’s Advisory Board. The options total fair value at the time of the award was $538.
On
August 1, 2020 the Company granted 45,000 three-year vested options at an exercise price of $0.14/share to a Medical Advisory
Board Member for his contribution in the Company’s Advisory Board. The options total fair value at the time of the award
was $6,300.
On
October 1, 2020 the Company granted 3,000 three-year vested options at an exercise price of $0.05/share to a Medical Advisory
Board Member for his contribution in the Company’s Advisory Board. The options total fair value at the time of the award
was $135.
On
November 1, 2020 the Company granted 45,000 three-year vested options at an exercise price of $0.18/share to a Medical Advisory
Board Member for his contribution in the Company’s Advisory Board. The options total fair value at the time of the award
was $5,792.
The fair value of stock options
granted and revaluation of non-employee consultant options for the year ended December 31, 2020 was calculated with the following
assumptions:
|
|
2020
|
|
|
|
2019
|
|
Risk-free interest rate
|
|
|
0.10 - 1.61
|
%
|
|
|
1.34 - 2.32
|
%
|
Expected dividend yield
|
|
|
0
|
%
|
|
|
0
|
%
|
Volatility factor (monthly)
|
|
|
158.22
|
%
|
|
|
122.25
|
%
|
Expected life of option
|
|
|
3 years
|
|
|
|
3 years
|
|
For the year ended December
31, 2020, the Company recorded compensation expense of $18,460 in connection with awarded stock options. The Company recorded
$257,143 in awarded option valuation as compensation expense during 2019. As at December 31, 2020, there was no unrecognized compensation
expense related to non-vested stock option awards.
The following table summarizes
the Company’s stock option activity during the year ended at December 31, 2020:
|
|
Number of Shares
|
|
|
Exercise Price per Share
|
|
|
Weighted Average Exercise
Price per Share
|
|
Outstanding
as at December 31, 2019
|
|
|
341,000
|
|
|
$
|
0.61 - 1.21
|
|
|
$
|
0.96
|
|
Granted
|
|
|
192,000
|
|
|
|
0.001 - 0.32
|
|
|
|
0.13
|
|
Exercised
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Options
forfeited/cancelled
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Outstanding as at December
31, 2020
|
|
|
533,000
|
|
|
$
|
0.001 - 1.21
|
|
|
$
|
0.73
|
|
The following table summarizes
information about stock options that are vested or expected to vest at December 31, 2020:
|
|
|
|
|
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
|
|
$
|
|
|
0.001
|
|
|
|
45,000
|
|
|
$
|
0.001
|
|
|
|
2.33
|
|
|
$
|
—
|
|
|
|
45,000
|
|
|
$
|
0.001
|
|
|
|
2.33
|
|
|
$
|
—
|
|
|
|
|
|
0.05
|
|
|
|
3,000
|
|
|
|
0.05
|
|
|
|
2.75
|
|
|
|
|
|
|
|
3,000
|
|
|
|
0.05
|
|
|
|
2.75
|
|
|
|
|
|
|
|
|
|
0.15
|
|
|
|
90,000
|
|
|
|
0.15
|
|
|
|
2.33
|
|
|
|
—
|
|
|
|
90,000
|
|
|
|
0.15
|
|
|
|
2.33
|
|
|
|
—
|
|
|
|
|
|
0.18
|
|
|
|
45,000
|
|
|
|
0.18
|
|
|
|
2.83
|
|
|
|
|
|
|
|
45,000
|
|
|
|
0.18
|
|
|
|
2.83
|
|
|
|
|
|
|
|
|
|
0.20
|
|
|
|
3,000
|
|
|
|
0.20
|
|
|
|
2.50
|
|
|
|
—
|
|
|
|
3,000
|
|
|
|
0.20
|
|
|
|
2.50
|
|
|
|
—
|
|
|
|
|
|
0.31
|
|
|
|
3,000
|
|
|
|
0.31
|
|
|
|
2.00
|
|
|
|
—
|
|
|
|
3,000
|
|
|
|
0.31
|
|
|
|
2.00
|
|
|
|
—
|
|
|
|
|
|
0.32
|
|
|
|
3,000
|
|
|
|
0.32
|
|
|
|
2.25
|
|
|
|
—
|
|
|
|
3,000
|
|
|
|
0.32
|
|
|
|
2.25
|
|
|
|
—
|
|
|
|
|
|
0.73
|
|
|
|
3,000
|
|
|
|
0.73
|
|
|
|
1.83
|
|
|
|
—
|
|
|
|
3,000
|
|
|
|
0.73
|
|
|
|
1.83
|
|
|
|
—
|
|
|
|
|
|
0.61
|
|
|
|
45,000
|
|
|
|
0.61
|
|
|
|
1.75
|
|
|
|
—
|
|
|
|
45,000
|
|
|
|
0.61
|
|
|
|
1.75
|
|
|
|
—
|
|
|
|
|
|
0.95
|
|
|
|
200,000
|
|
|
|
0.95
|
|
|
|
1.70
|
|
|
|
—
|
|
|
|
200,000
|
|
|
|
0.95
|
|
|
|
1.70
|
|
|
|
—
|
|
|
|
|
|
1.09
|
|
|
|
3,000
|
|
|
|
1.09
|
|
|
|
1.50
|
|
|
|
—
|
|
|
|
3,000
|
|
|
|
1.09
|
|
|
|
1.50
|
|
|
|
—
|
|
|
|
|
|
1.10
|
|
|
|
45,000
|
|
|
|
1.10
|
|
|
|
1.58
|
|
|
|
—
|
|
|
|
45,000
|
|
|
|
1.10
|
|
|
|
1.58
|
|
|
|
—
|
|
|
|
|
|
1.21
|
|
|
|
45,000
|
|
|
|
1.21
|
|
|
|
1.33
|
|
|
|
—
|
|
|
|
45,000
|
|
|
|
1.21
|
|
|
|
1.33
|
|
|
|
—
|
|
|
$
|
0.001-1.21
|
|
|
|
533,000
|
|
|
$
|
0.71
|
|
|
|
2.10
|
|
|
$
|
—
|
|
|
|
533,000
|
|
|
$
|
0.71
|
|
|
|
2.10
|
|
|
$
|
—
|
|
|
The following table sets forth
the status of the Company’s non-vested stock options as at December 31, 2020 and December 31, 2019:
|
|
Number of Options
|
|
|
Weighted- Average Grant-Date
Fair Value
|
|
Non-vested as at December 31,
2019
|
|
|
—
|
|
|
$
|
—
|
|
Granted
|
|
|
192,000
|
|
|
|
0.13
|
|
Forfeited
|
|
|
—
|
|
|
|
—
|
|
Vested
|
|
|
192,000
|
|
|
|
0.13
|
|
Non-vested as at December 31,
2020
|
|
|
—
|
|
|
$
|
—
|
|
The weighted-average remaining
contractual life for options exercisable at December 31, 2020 is 1.94 years.
The aggregate intrinsic value
for fully vested, exercisable options was $0 at December 31, 2020. The aggregate intrinsic value of options exercised for the
year ended at December 31, 2019 was $0. The actual tax benefit realized from stock option exercises for the year ended at December
31, 2020 and 2019 was $0 as no options were exercised.
At December 31, 2020 the Company
has 3,189,296 options or stock awards available for grant under the 2010 Plan.
NOTE 10 – PROVISION
FOR INCOME TAXES
Provision
for Income Taxes
During the year ended December
31, 2020 and December 31, 2019, no provision for income taxes was recorded as the Company generated net operating losses.
The tax effects of temporary
differences that give rise to deferred tax assets are presented below:
|
|
2020
|
|
|
2019
|
|
Deferred Tax Assets:
|
|
|
|
|
|
|
Net operating
loss carryforward
|
|
$
|
3,225,628
|
|
|
$
|
832,590
|
|
|
|
|
|
|
|
|
|
|
Total
deferred tax assets
|
|
|
677,382
|
|
|
|
174,840
|
|
|
|
|
|
|
|
|
|
|
Valuation
allowance
|
|
|
(677,382
|
)
|
|
|
(174,840
|
)
|
|
|
|
|
|
|
|
|
|
Deferred
tax asset, net of valuation allowance
|
|
$
|
—
|
|
|
$
|
—
|
|
A reconciliation of the statutory
federal income tax rate to the Company’s effective tax rate is as follows:
Tax benefit at federal statutory
rate
|
|
|
(21.0
|
)%
|
|
|
(21.0
|
)%
|
The Company assesses the likelihood
that deferred tax assets will be realized. To the extent that realization is not likely, a valuation allowance is established.
Based upon the Company’s history of losses since inception, management believes that it is more likely than not that future
benefits of deferred tax assets will not be realized.
At December 31, 2020, the Company
had approximately $3,225,628 of federal net operating losses that may be available to offset future taxable income, At December
31, 2019, the Company had approximately $832,590 of federal net operating losses that may be available to offset future taxable
income. $2,870 of the net operating loss carry forwards (NOL), if not utilized, will expire in 2037 for federal purposes, the
remaining amount of NOL can be carried forward indefinitely. As at the fiscal year 2020, a deduction for issued warrants and stock
options and restricted shares awarded from the 2010 Stock Plan for a total of $1,448,240 has not yet been made, for the fiscal
year 2019 this total was $1,324,035. The market value less exercise price for these awards will be deducted if and when the warrants
and stock options are exercised, while the restricted shares will be deducted at market value at the date they were awarded, once
the restriction is removed.
Pursuant to the Internal
Revenue Code Section 382 (“Section 382”), certain ownership changes may subject the net operating loss carryforwards
(“carryforwards”) and research and development tax credit carryforwards to annual limitations which could reduce or
defer the carryforwards. Section 382 imposes limitations on a corporation’s ability to utilize carryforwards if it experiences
an ownership change. An ownership change may result from transactions increasing the ownership of certain stockholders in the
stock of a corporation by more than 50 percentage points over a three-year period. In the event of an ownership change, utilization
of the carryforwards would be subject to an annual limitation under Section 382 determined by multiplying the value of its stock
at the time of the ownership change by the applicable long-term tax-exempt rate. Any unused annual limitation may be carried over
to later years. The imposition of this limitation on its ability to use the carryforwards to offset future taxable income could
cause the Company to pay U.S. federal income taxes earlier than if such limitation were not in effect and could cause such carryforwards
to expire unused, reducing or eliminating the benefit of such carryforwards. The Company has not completed a Section 382 study
to determine if there have been one or more ownership changes due to the costs associated with such a study. Until a study is
completed and the extent of the limitations, if any, is able to be determined, no additional amounts have been written off or
are being presented as an uncertain tax position.
On December 22, 2017, the U.S.
government enacted comprehensive tax legislation commonly referred to as the Tax Cut and Jobs Act (the “Tax Act”).
The Tax Act establishes new tax laws that affects 2019 and future years, including a reduction in the U.S. federal corporate income
tax rate to 21%, effective January 1, 2019.
The Company applies the provisions
of ASC 740-10, Income Taxes. The Company has not recognized any liability for unrecognized tax benefits and does not believe there
is any uncertainty with respect to its tax position. The Company’s policy with respect to unrecognized tax benefits is to
recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses.
The Company files tax returns
as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject
to examination by federal and state jurisdictions, where applicable. There are currently no pending income tax examinations. Earlier
years may be examined to the extent that tax credit or net operating loss carryforwards are used in future periods. The Company’s
policy is to record interest and penalties related to income taxes as part of its income tax provision.
NOTE 11 – COMMITMENTS
AND CONTINGENCIES
Employment contracts
The Company’s executive
officers have entered employment contracts and confidentiality, non-disclosure and assignment of invention agreements. The employment
agreements do not provide for the payment of any compensation to our executive officers but provide for the payment of $100,000
in severance upon termination of employment without cause and make no provisions for any payment upon a change of control.
Litigation
In the normal course of business,
the Company may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. Such matters
are subject to many uncertainties, and outcomes are not predictable with assurance. Legal fees for such matters are expensed as
incurred and we accrue for adverse outcomes as they become probable and estimable.
On
June 5, 2020 the Supreme Court of the State of New York, County of Nassau, issued a commencement of Action based on behalf of
Power Up Lending Group, Ltd (“Power Up” or the “Claimant”). The Claimant request that due to the default
of their note requesting a judgment for an amount of not less than $420,750. Among other claims Power Up asserts that the Company
willfully failed to maintain the trading status, and manipulated its stock in its efforts to defraud the public and its investors
by making false press statements and the like. The Company is denying any wrong-doing. However, the full requested amount has
been included in the default calculation of the convertible debt.
Sales of Shares in Subsidiary
The Company has signed an agreement
with Pharmalectin Partners, LLC for them to acquire 50% of the Company’s Subsidiary for a total value of $5,050,000. The
single use of this investment is to develop ProLectin-I for SARS-CoV-2 treatment. At the date of December 31, 2020, $950,000 has
been invested in the research and development of this drug. If the outlined milestones are met, the remainder of the investment
will be disbursed during the first two quarters of 2021. If the outcome is successful, the shares can for a limited time, prior
to commercialization, be converted into 17.5% of the Company’s outstanding common stock.
NOTE 12 – SUBSEQUENT
EVENTS
The Company has evaluated events
from December 31, 2020 through the date the financial statements were issued. The events requiring disclosure for this period
are as follows;
Common stock
Shares Awarded and Issued
under the 2010 Stock Plan:
On January 1, 2021 the Company
granted 10,000 shares, with a fair market value of $0.24/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 $2,400.
On January 15, 2021 the company granted 3,189,200 shares of Common Stock valued at $0.24/share, equally
divided to 227,800 shares/each to fourteen of the Company’s Managers, Board- and Medical Advisory Board members, as well
as to indispensable Consultants currently working on the clinical trial submissions with the FDA, for a total value of $765,408.
The 2010 Stock Plan has been
liquidated and did expire as at January 18, 2021.
2021 Stock Plan
On January 19, 2021, the “effective
time”, the Board of Directors approved the 2021 Stock Plan. The Plan is established by the Company to attract and retain
persons eligible to participate in the Plan, motivate Participants to achieve long-term Company goals, and further align Participants’
interests with those of the Company’s other stockholders. The Plan is adopted as at the Effective Time, subject to approval
by the Company’s stockholders within 12 months before or after such adoption date. Unless the Plan is discontinued earlier
by the Board, no Award shall be granted hereunder on or after the date 10 years after the effective date.
The aggregate number of shares
of Stock which may be delivered under the Plan shall not exceed a number equal to 15% of the total number of shares of Stock outstanding
immediately following the Effective Time, assuming for this purpose the conversion into Stock of all outstanding securities that
are convertible by their terms (directly or indirectly) into Stock; provided, however, that, as at January 1 of each calendar
year, commencing with the year 2022, the maximum number of shares of Stock which may be delivered under the Plan shall automatically
increase by a number sufficient to cause the number of shares of Stock covered by the Plan to equal 15% of the total number of
shares of Stock then outstanding, assuming for this purpose the conversion into Stock of all outstanding securities that are convertible
by their terms (directly or indirectly) into Stock. The 2021 Stock Plan currently holds 17,014,376 shares.
Shares Awarded and Issued under the 2021
Stock Plan:
On April 1, 2021 the Company granted 10,000
shares, with a fair market value of $0.17/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 $1,700.
On April 1, 2021 the Company granted 30,000
shares each, with a fair market value of $0.17/share at the time of award, to three members of the Company Board as compensation
for their contribution in the Board and Committee meetings during Q1, 2021, for a total of $15,300.
Stock Options Awarded
and Issued Under the 2021 Stock Plan:
On February 1, 2021 the Company
granted 45,000 three-year options at an exercise price of $0.20 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 $6,750.
Sales of Shares in Subsidiary,
Convertible Notes and Conversion to Common Stock
At March 24, 2021, Pharmalectin Partners, LLC have invested an additional $450,000 in the Subsidiary,
increasing their interest in the Subsidiary to 12%.
Litigation
On January 20, 2021 the Supreme Court of the State of New York, County of Nassau, granted Power Up a summary
judgement against the Company for Breach of Contact, awarding Power Up damages in the amount of $420,750.
The management see no further
subsequent events requiring disclosure.