NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
(UNAUDITED)
NOTE
1 – BACKGROUND AND ORGANIZATION
Business
Operations
Bioxytran,
Inc. (the “Company”) is a clinical stage pharmaceutical company focused on the development, manufacture and commercialization
of therapeutic drugs designed to address hypoxia in humans, which is a lack of oxygen to tissues, in a safe and efficient manner.
Our
Subsidiary, Pharmalectin, Inc. (the “Subsidiary”) is a clinical stage pharmaceutical company focused on the development,
manufacture and commercialization of therapeutic drugs designed to address conditions related to Covid-19.
Our
Foreign Subsidiary, Pharmalectin (BVI), Inc. (the “Foreign Subsidiary”) is the owner and custodian of the Company’s
Copyrights, Trade Marks and Patents.
Organization
Bioxytran,
Inc. was organized on October 5, 2017 as a Delaware corporation, with a taxing structure for U.S. federal and state income tax as a C-Corporation
with 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 the form of a reverse merger and is currently registered as a Nevada corporation
with a taxing structure for U.S. federal and state income tax as a C-Corporation with 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.
Pharmalectin
was organized on October 5, 2017 as a Delaware corporation, with a taxing structure for U.S. federal and state income tax as a C-Corporation
with 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 30,000,000 issued and 19,650,000 outstanding shares; 15,000,000 Common shares are held by Bioxytran and 4,650,000
Common shares are held by an affiliate. An additional 4,500,000 options are also held by an affiliate. The option agreement includes
provisions for dilutive issuance and cash-less exercise. The beneficial ownership of the affiliate are Mike Sheikh, Ola Soderquist and
David Platt.
Pharmalectin
BVI was organized on March 17, 2021 as a British Virgin Islands (BVI) Business Corporation with a BVI corporate taxing structure with
50,000 authorized shares with a par value of $1.00. There are currently 50,000 outstanding shares held by the Company.
Basis
of Presentation
The
accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with the rules and
regulations of the Securities and Exchange Commission (the “SEC”), including the instructions to Form 10-Q and Regulation
S-X. Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted
accounting principles in the United States of America (“U.S. GAAP”), have been condensed or omitted from these statements
pursuant to such rules and regulations and, accordingly, they do not include all the information and notes necessary for comprehensive
financial statements and should be read in conjunction with our audited consolidated financial statements.
While
the information presented in the accompanying financial statements is unaudited, it includes all adjustments which are, in the opinion
of the management, necessary to present fairly the financial position, results of operations and cash flows for the periods presented
in accordance with the accounting principles generally accepted in the United States of America (“US GAAP”). In the opinion
of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have
been included and all such adjustments are statements prepared in accordance with US GAAP have been condensed or omitted. These financial
statements should be read in conjunction with the Company’s December 31, 2022 audited financial statements and notes that can be
expected for the year ending December 31, 2022.
Principles
of Consolidation
The
accompanying unaudited condensed consolidated financial statements include the accounts of Bioxytran, Inc. a Nevada Corporation, its
majority owned subsidiary, Pharmalectin, Inc. of Delaware (collectively, the “Company”), as well as its wholly owned subsidiary,
Pharmalectin (BVI), Inc of British Virgin Islands. All intercompany accounts have been eliminated upon consolidation.
NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A
summary of the significant accounting policies applied in the preparation of the accompanying financial statements follows.
Cash
For
purposes of the Statement of Cash Flows, the Company considers all highly liquid debt instruments purchased with an original maturity
date of three months or less to be cash equivalents.
Use
of Estimates
The
preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported
amount of expenses during the reporting period. Significant estimates include the fair value of the Company’s stock, stock-based
compensation, valuation of warrants, valuations in connection with convertible notes and the valuation allowance related to deferred
tax assets. Actual results may differ from these estimates.
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
March 31, 2023, we would, based on the market price of $0.425/share, be obligated to issue approximately 17,802,900 shares of Common
Stock upon conversion of the currently outstanding convertible notes (the “New Notes”) and 482,030 shares upon exercise of
the warrants and 476,000 shares upon exercise of outstanding options. For the New Notes, the shares total is based on $2,314,377 of currently
outstanding principal, and unpaid interest.
The
2021 1-year notes (the “New Notes”), have an interest rate of 6% and are convertible at the lower of (i) a fixed price of
$0.13, or (ii) 85% of the closing price of any Qualified Financing, which consist of any fundraising receiving gross proceeds of not
less than $500,000.
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 over the
requisite service period, or vesting period, in the same expense classifications in the statements of operations, as if such amounts
were paid in cash.
Accounting
for subsidiary stock transactions
The
Company accounts for subsidiary stock transactions in accordance with Opinions of the Accounting Principles Board 09 (APBO No. 9). In
paragraph 28, this pronouncement excluded all adjustments from transactions in a company’s own stock “. . . from the determination
of net income or the results of operations under all circumstances.”.
Research
and Development
The
Company accounts for research and development costs in accordance with Accounting Standards Codification subtopic 730-10, Research and
Development (“ASC 730-10”). Under ASC 730-10, all research and development costs must be charged to expense as incurred.
Accordingly, internal research and development costs are expensed as incurred. Third-party research and development costs are expensed
when the contracted work has been performed or as milestone results have been achieved as defined under the applicable agreement. Company-sponsored
research and development costs related to both present and future products are expensed in the period incurred. For the three months
ended March 31, 2023 the Company incurred $139,004 in research and development expenses, while during the three months ended March 31,
2022 the Company incurred $240,125.
Intangibles
– Goodwill and Other
Valuation
of intangibles are in accordance with ASC 350. Costs associated with the application and award of patents in the U.S. and various other
countries are capitalized and amortized on a straight-line basis over the term of the patents as determined at award date, which varies
depending on the pendency period of the application, generally approximating seventeen years. Capitalized patent costs, also referred
to as patent prosecution costs, include internal legal labor, professional legal fees, government filing fees and translation fees related
to expanding the Company’s patent portfolio. Costs associated with the maintenance and annuity fees of patents are accounted for
as prepaid assets at the time of payment and amortized over the shorter of the maintenance period or remaining life of the related patent.
Accrued
Expenses
As
part of the process of preparing our condensed consolidated financial statements, we are required to estimate accrued expenses. This
process involves identifying services that third parties have performed on our behalf and estimating the level of service performed and
the associated cost incurred on these services as at each balance sheet date in our consolidated financial statements. Examples of estimated
accrued expenses include professional service fees, such as those arising from the services of attorneys and accountants and accrued
payroll expenses. In connection with these service fees, our estimates are most affected by our understanding of the status and timing
of services provided relative to the actual services incurred by the service providers. In the event that we do not identify certain
costs that have been incurred or we under- or over-estimate the level of services or costs of such services, our reported expenses for
a reporting period could be understated or overstated. The date on which certain services commence, the level of services performed on
or before a given date, and the cost of services are often subject to our judgment. We make these judgments based upon the facts and
circumstances known to us in accordance with accounting principles generally accepted in the U.S.
Warrants
The
Company has issued Common Stock warrants in connection with the execution of certain equity and debt financings. The fair value of warrants
is determined using the Black-Scholes option-pricing model using assumptions regarding volatility of our common share price, remaining
life of the warrant, and risk-free interest rates at each period end.
Fair
Value
Accounting
Standards Codification subtopic 825-10, Financial Instruments (“ASC 825-10”) requires disclosure of the fair value of certain
financial instruments. The carrying value of cash and cash equivalents, accounts payable and accrued liabilities, and short-term borrowings,
as reflected in the balance sheets, approximate fair value because of the short-term maturity of these instruments. All other significant
financial assets, financial liabilities and equity instruments of the Company are either recognized or disclosed in the financial statements
together with other information relevant for making a reasonable assessment of future cash flows, interest rate risk and credit risk.
Where practicable the fair values of financial assets and financial liabilities have been determined and disclosed; otherwise only available
information pertinent to fair value has been disclosed.
The
Company follows Accounting Standards Codification subtopic 820-10, Fair Value Measurements and Disclosures (“ASC 820-10”)
and Accounting Standards Codification subtopic 825-10, Financial Instruments (“ASC 825-10”), which permits entities to choose
to measure many financial instruments and certain other items at fair value.
Recent
Accounting Pronouncements
In
August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06,
Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s
Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates
the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies
the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard
also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s
own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for
all convertible instruments. ASU 2020-06 is effective January 1, 2022 and should be applied on a full or modified retrospective basis,
with early adoption permitted beginning on January 1, 2021. The Company adopted ASU 2020-06 effective January 1, 2021. The adoption of
ASU 2020-06 did not have an impact on the Company’s financial statements.
Management
does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect
on the Company’s unaudited condensed interim financial statements.
NOTE
3 – GOING CONCERN AND MANAGEMENT’S LIQUIDITY PLANS
As
at March 31, 2023, the Company had cash of $153,801 and a negative working capital of $4,140,255. The Company has not yet generated any
revenues, and has incurred cumulative net losses of $12,002,683. These conditions raise substantial doubt about the Company’s ability
to continue as a going concern.
During
the three months ended March 31, 2023, the Company raised a net of $50,000 in cash proceeds from equity. During the same period in 2022,
the Company raised a net of $1,380,960 in cash proceeds from the issuance of convertible notes. The Company is aware that its current
cash on hand will not be sufficient to fund its projected operating requirements through the month of June, 2023 and is pursuing alternative
opportunities to funding.
The
Company intends to raise additional capital through private placements of debt and equity securities, but there can be no assurance that
these funds will be available on terms acceptable to the Company, or will be sufficient to enable the Company to fully complete its development
activities or sustain operations. If the Company is unable to raise sufficient additional funds, it will have to develop and implement
a plan to further extend payables, reduce overhead, or scale back its current business plan until sufficient additional capital is raised
to support further operations. There can be no assurance that such a plan will be successful.
The
Company’s management does not know the full extent or foresee the impact COVID-19 has had on our business or our operations or
its ability to carry out our plans. We will continue to monitor and follow this situation closely.
Accordingly,
the accompanying unaudited condensed consolidated financial statements have been prepared in conformity with U.S. GAAP, which contemplates
continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of
business. The carrying amounts of assets and liabilities presented in the unaudited condensed consolidated financial statements do not
necessarily purport to represent realizable or settlement values. The unaudited condensed consolidated financial statements do not include
any adjustment that might result from the outcome of this uncertainty.
NOTE
4 - RELATED PARTY TRANSACTIONS
The
Company hold License Agreements (the “License/s” or “Agreement/s”) for a medical device (license obtained in
2019) and a compound (license obtained in 2021), with two affiliated companies where in the officers of the Company hold a majority interest.
The products were developed prior to the establishment of Bioxytran. The yearly maintenance fee for each license amount to $5,000. During
the three months ended March 31, 2023 the affiliates were paid $5,000 each. During the same period in 2022, there was $20,720 in transactions
with affiliates as the Company also reimbursed the affiliates for the legal and administrative costs surrounding the establishment of
the Licenses.
NOTE
5 - INTANGIBLES
Intangible
assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. No impairment charges were recorded for the 3 months ended March 31, 2023 and the year ended December 31, 2022.
Amortization
of capitalized patent costs associated with the application and award of patents in the U.S. and various other countries are capitalized
and amortized on a straight-line basis over the term of the patents as determined at the award date, which varies depending on the pendency
period of the application, generally approximating twenty years.
SCHEDULE
OF INTANGIBLES
| |
Estimated Life (years) | |
March 31, 2023 | | |
December 31, 2022 | |
Capitalized patent costs | |
20 | |
$ | 83,890 | | |
$ | 79,179 | |
Accumulated amortization | |
| |
| (4,158 | ) | |
| 3,644 | |
| |
| |
| | | |
| | |
Intangible assets, net | |
| |
$ | 79,732 | | |
$ | 75,535 | |
NOTE
6 – ACCOUNTS PAYABLES AND ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
On
March 31, 2023, there was $975,227 in accounts payable to related parties in the form of payroll and accrued expenses and $51,150 in
un-issued shares liability related party. On December 31, 2022 there was $709,727 in accounts payable to related parties and $38,400
in un-issued shares liability related party.
The
following table represents the major components of accounts payables and accrued expenses and other current liabilities at March 31,
2023 and at December 31, 2022:
SCHEDULE
OF ACCOUNTS PAYABLES AND ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
| |
March
31, 2023 | | |
December
31, 2022 | |
Accounts payable related party (1) | |
$ | 975,227 | | |
$ | 709,727 | |
Professional fees | |
| 656,963 | | |
| 393,085 | |
Interest | |
| 149,377 | | |
| 134,581 | |
Payroll taxes | |
| 45,887 | | |
| 40,182 | |
Pension/401K | |
| 246,182 | | |
| 180,557 | |
Other | |
| 2,460 | | |
| 990 | |
Un-issued share liability, related party (2) | |
| 51,150 | | |
| 38,400 | |
Un-issued share liability, consultant | |
| 1,810 | | |
| 960 | |
Convertible note payable | |
| 2,165,000 | | |
| 2,165,000 | |
Total | |
$ | 4,294,056 | | |
$ | 3,663,482 | |
(1) |
$
391,900
to the CEO, $374,400
to the CFO and $208,927 and the CCO for 11 months of salary. At December 31, 2022 there were $286,900 to the CEO, $269,400 to the
CFO and $153,427 and the CCO. All earlier accrued salaries due were forfeited on August 1, 2022. |
(2) |
There
are currently 60,000 shares of Common Stock awarded but not issued to four Board Members in the first quarter of 2023. The total
fair market value at the time of the award was $51,250 |
NOTE
7 – CONVERTIBLE NOTES PAYABLE
Private
Placement, 2021 Notes
Around
April 29, 2021, we entered into nine (9) Securities Purchase Agreements (the “2021 SPA’s”), under which we agreed to
sell convertible promissory notes (the “2021 Notes”), in an aggregate principal amount of $3,266,845 with 6% interest, whereof
$1,000,000 were contributed in form of cancellation of third-party notes, while 1,101,846 were issued in compensation for accrued compensation,
$981,466 to our three officers and $120,380 to two consultants.
At
any time after the issue date of the Notes, The Holders of the Notes, (the “2021 Holders”), have the option to convert all
or any part of the outstanding and unpaid principal amount and accrued and unpaid interest of the 2021 Notes into shares of our Common
Stock at the Conversion Price. The “Conversion Price” will be the lesser of (i) $.13 per share or (ii) 85% of the closing
price of Any Qualified Financing, which consists of any fundraising whereby the Company receives gross proceeds of not less than $500,000.
The
variable conversion rate component requires that the 2021 Notes to be valued at its stock redemption value (i.e., “if-converted”
value) pursuant to ASC 480, Distinguishing Liabilities from Equity, with the excess over the undiscounted face value being deemed a premium
to be added to the principal balance and accreted to additional paid-in capital over the life of the 2021 Notes. No such recording of
a premium was required as the discounted “if-converted” rate of $0.13 per share, was identical to fair market value of the
Company’s stock on the 2021 Notes date of issuance.
The
2021 Holders are limited to holding a total of 4.99% of our issued and outstanding Common Stock at any one time.
The
Common Stock underlying the 2021 Notes, when issued, will bear a restrictive legend and have a 180-day lock-up period.
On
June 4, 2021, 8,522,125 shares of Common Stock were issued as a result of conversion of accrued interest and principal for five convertible
notes for a total of $1,101,846, or $0.13/share. To avoid dilution of the company’s stock 7,591,261 of these shares held by
our officers were returned to treasury on November 20, 2021, while the original debt consisting of accrued salary was forfeited.
SCHEDULE
OF CONVERTIBLE CONVERSION OF ACCRUED INTEREST AND PRINCIPAL
Name | |
| |
Principal Converted | | |
Accrued interest converted | | |
No.
of shares issued | |
Private Placement, 2021 Notes issued to Officers | |
(1) | |
$ | 981,466 | | |
$ | 5,398 | | |
| 7,591,261 | |
Private Placement, 2021 Notes issued to consultants | |
| |
| 120,380 | | |
| 662 | | |
| 930,864 | |
| |
| |
$ | 1,101,846 | | |
$ | 6,060 | | |
| 8,522,125 | |
(1) |
Net
cash received for these notes were $1,380,960, after a Debt Discount of $86,040 was paid to the sole Placement Agent: WallachBeth
Capital, LLC (Member FINRA / SIPC). |
If
the remainder of the 2021 Notes are converted prior to us paying off such note, it would lead to substantial dilution to our shareholders
as a result of the conversion discounted applicable to the 2021 Notes. There can be no assurance that there will be any funds available
to pay of the 2021 Notes. If we fail to obtain such additional financing on a timely basis, the 2021 Holders may convert the 2021 Notes
and sell the underlying shares, which may result in significant dilution to shareholders due to the conversion discount, as well as a
significant decrease in our stock price.
Convertible
notes payable and interest payable consist of the following at March 31, 2023, and December 31, 2022:
SCHEDULE
OF CONVERTIBLE NOTES PAYABLE
| |
March 31, 2023 | | |
December 31, 2022 | |
Principal balance (1), (2) | |
$ | 2,165,000 | | |
$ | 2,165,000 | |
Interest Payable | |
| 149,377 | | |
| 134,581 | |
Outstanding, net of debt discount and premium | |
$ | 2,314,377 | | |
$ | 2,299,581 | |
(1) |
Net
cash received for these notes were $1,045,150, after a Debt Discount of $119,850 was paid to the sole Placement Agent: WallachBeth
Capital, LLC (Member FINRA / SIPC). |
(2) |
$2
million of principal, accrued interest and default penalties for notes issued prior to 2021, where settled by a third party in exchange
for us issuing to them a note in the amount of $1 million. |
Private
Placement, 2022 Notes converted into Common Stock
In
January, 2022, we entered into thirty-four (34) Securities Purchase Agreements (the “2022 SPA’s”), with accredited
investors, under which we agreed to sell the Notes, in an aggregate principal amount of $1,467,000 with 6% interest (the “2022
Notes”) to the holders of the 2022 Notes (the “2022 Holders”).
At
any time after the issue date of the 2022 Notes the 2022 Holders have the option to convert all or any part of the outstanding and unpaid
principal amount and accrued and unpaid interest of the Notes into shares of our Common Stock at the Conversion Price. The “Conversion
Price” is set to $0.25 per share.
The
2022 Holders are limited to holding a total of 4.99% of our issued and outstanding Common Stock at any one time. The Common Stock underlying
the 2022 Notes, when issued, bear a restrictive legend and are currently eligible for resale under Rule 144.
The
notes principal and accrued interest were fully converted into 6,081,484 shares of Common Stock on August 31, 2022.
NOTE
8 – STOCKHOLDERS’ EQUITY
The
Company is authorized to issue 300,000,000 shares of Common Stock, and 50,000,000 shares of Preferred Stock.
Preferred
stock
As
at March 31, 2023, no preferred shares have been designated nor issued.
Common
stock
As
at January 1, 2022, and at March 31, 2022 the Company had 110,840,998 shares of common stock issued and outstanding.
As
at January 1, 2023 there were 123,252,235 shares of common stock issued and outstanding.
On
January 4, 2023 the Company issued 93,750 shares of Common Stock against $30,000, or $0.32/share, shown as stock subscription in the
December 31, 2022 stockholders’ equity statement.
On
February 10, 2023 the Company issued 156,250 shares of Common Stock against $50,000, or $0.32/share
As
at March 31, 2023, the Company has 123,502,235 shares of common stock issued and outstanding.
Common
Stock Warrants
For
the 3 months ended March 31, 2023 the Company did not issue any Warrants. For the 3 months ended March 31, 2022, in connection with the
issuance of the convertible notes, the Company issued 264,060 5-year warrants exercisable at $0.25/share,
valued at $0.16, based on Black and Scholes Option Pricing Model, for a total value of $42,250.
The
fair value of stock warrants granted for the 3 months ended March 31, 2022 was calculated with the following assumptions:
SCHEDULE
OF STOCK WARRANTS VALUATION ASSUMPTIONS
| |
March 31, 2022 | |
Risk-free interest rate | |
| 1.53 | % |
Expected dividend yield | |
| 0 | % |
Volatility factor (monthly) | |
| 169.27 | % |
Expected life of warrant | |
| 5 years | |
The
following table summarizes the Company’s common stock warrant activity for the 3 months ended March 31, 2023 and 2022:
SCHEDULE
OF WARRANT ACTIVITY
| |
Number of Warrants* | | |
Weighted Average Exercise Price | | |
Weighted- Average Remaining Expected Term | |
Outstanding as at January 1, 2022 | |
| 272,000 | | |
$ | 2.00 | | |
| 2.9 | |
Granted | |
| 264,030 | | |
| 0.26 | | |
| 5.0 | |
Exercised | |
| — | | |
| — | | |
| — | |
Forfeited/Canceled | |
| — | | |
| — | | |
| — | |
Outstanding as at March 31, 2022 | |
| 536,030 | | |
| 1.14 | | |
| 3.7 | |
| |
| | | |
| | | |
| | |
Outstanding as at January 1, 2023 | |
| 542,030 | | |
$ | 0.42 | | |
| 4.1 | |
Granted | |
| — | | |
| — | | |
| — | |
Exercised | |
| — | | |
| — | | |
| — | |
Forfeited/Canceled | |
| — | | |
| — | | |
| — | |
Outstanding as at March 31, 2023 | |
| 542,030 | | |
$ | 1.14 | | |
| 3.8 | |
* | The warrant agreements
issued in 2019 for a total of 50,000 warrants include provisions for dilutive issuance and cash-less exercise. If exercised at December
31, 2022 the provisions would have resulted in an issuance of 1,130,114 shares at an average conversion price of $0.09, or 1,050,114
shares in a cash-less exercise. In order to mitigate the Company’s risk an administrative hold has been placed on one shareholder’s
stock in the event of future exercise. |
The
following table summarizes information about stock warrants that are vested or expected to vest at March 31, 2023:
SCHEDULE
OF WARRANT OUTSTANDING AND EXERCISABLE WARRANTS
| | |
Warrants Outstanding | | |
| | |
| | |
Exercisable Warrants | | |
| |
Number of Warrants | | |
Weighted Average Exercise Price Per Share | | |
Weighted Average Remaining Contractual Life (Years) | | |
Aggregate Intrinsic Value | | |
Number of Warrants | | |
Weighted Average Exercise Price Per Share | | |
Weighted Average Remaining Contractual Life (Years) | | |
Aggregate Intrinsic Value | |
| 492,030 | | |
| 0.26 | | |
| 4.1 | | |
$ | 81,184 | | |
| 492,030 | | |
| 0.26 | | |
| 4.1 | | |
$ | 81,184 | |
| 50,000 | | |
$ | 2.00 | | |
| 1.6 | | |
$ | — | | |
| 50,000 | | |
$ | 2.00 | | |
| 1.6 | | |
$ | — | |
| 542,030 | | |
$ | 1.14 | | |
| 3.9 | | |
$ | 81,184 | | |
| 542,030 | | |
$ | 1.14 | | |
| 3.9 | | |
$ | 81,184 | |
There
were no warrants issued for the three months ended at March 31, 2023. The following table sets forth the status of the Company’s
non-vested warrants as at March 31, 2022:
SCHEDULE
OF NON-VESTED WARRANTS
| |
Number of Warrants | | |
Weighted-Average Grant-Date
Fair Value | |
Non-vested as at January 1, 2022 | |
| — | | |
$ | — | |
Granted | |
| 264,030 | | |
| 0.25 | |
Forfeited | |
| — | | |
| — | |
Vested | |
| — | | |
| — | |
Non-vested as at March 31, 2022 | |
| 264,030 | | |
$ | 0.25 | |
NOTE
9 – STOCK OPTION PLAN AND STOCK-BASED COMPENSATION
On
January 19, 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. 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.
As
at January 18, 2021, the 2010 plan was retired and depleted. On January 19, 2021, “The 2021 Stock Plan” (2021 Plan) with
the same terms as the 2010 Plan.
Shares
Awarded and Issued under the 2010 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.
SCHEDULE
OF FAIR MARKET VALUE
| |
Number
of Shares | | |
Fair
Value per Share | | |
Weighted
Average Market Value per Share | |
Shares Issued as of January 1, 2022 | |
| 18,706,909 | | |
| 0.003 – 1.49 | | |
| 0.088 | |
Shares Issued | |
| — | | |
| — | | |
| — | |
Shares Issued as of March 31, 2022 | |
| 18,706,909 | | |
$ | 0.003 – 1.49 | | |
$ | 0.088 | |
| |
| | | |
| | | |
| | |
Shares Issued as of January 1, 2023 | |
| 19,382,909 | | |
| 0.003 – 1.49 | | |
| 0.095 | |
Shares Issued | |
| — | | |
| — | | |
| — | |
Shares Issued as of March 31, 2023 | |
| 19,382,909 | | |
$ | 0.003 – 1.49 | | |
$ | 0.095 | |
For
the three months ended March 31, 2023 and 2022, the Company recorded stock-based compensation expense of $13,600 and $22,400, respectively,
in connection with share-based payment awards.
Shares
awarded, but not yet issued, under the 2021 Stock Plan for the three months ended March 31, 2023 and 2022:
On
January 10, 2022 the Company granted 40,000 shares of Common Stock to four Board Members in reward of their attendance at Board and Committee
meetings during the fourth quarter of 2021. The total fair market value at the time of the award was $6,400, or $0.16/share.
On
January 1, 2023 the Company granted 80,000 shares of Common Stock to four Board Members in reward of their attendance at Board and Committee
meetings during the fourth quarter of 2022. The total fair market value at the time of the award was $38,400, or $0.48/share.
On
January 1, 2023 the Company granted 2,000 shares of Common Stock to an Advisory Board Members in compensation for the fourth quarter
of 2022. The total fair market value at the time of the award was $960, or $0.48/share.
On
March 31, 2023 the Company granted 30,000 shares of Common Stock to four Board Members in reward of their attendance at Board and Committee
meetings during the first quarter of 2023. The total fair market value at the time of the award was $12,750, or $0.425/share.
On
March 31, 2023 the Company granted 2,000 shares of Common Stock to an Advisory Board Members in compensation for the first quarter of
2023. The total fair market value at the time of the award was $850, or $0.425/share.
Stock
options granted and vested 2021 Plan:
There
were no stock options granted the three months ended March 31, 2023 and 2022.
The
following table summarizes the Company’s stock option activity for the three months ended March 31, 2023, and 2022:
SCHEDULE
OF STOCK OPTIONS ACTIVITY
| |
Number of Options | | |
Exercise
Price per Share | | |
Weighted
Average Exercise
Price per Share | |
Outstanding as of January 1, 2022 | |
| 668,000 | | |
$ | 0.001 - 1.21 | | |
$ | 0.55 | |
Granted | |
| — | | |
| — | | |
| — | |
Exercised | |
| — | | |
| — | | |
| — | |
Options forfeited/cancelled | |
| — | | |
| — | | |
| — | |
Outstanding as of March 31, 2022 | |
| 668,000 | | |
$ | 0.001 - 1.21 | | |
$ | 0.55 | |
| |
| | | |
| | | |
| | |
Outstanding as of January 1, 2023 | |
| 524,000 | | |
$ | 0.001 - 0.95 | | |
$ | 0.44 | |
Granted | |
| — | | |
| — | | |
| — | |
Exercised | |
| — | | |
| — | | |
| — | |
Options forfeited/cancelled | |
| (48,000 | ) | |
| 0.15 – 0.32 | | |
| 0.16 | |
Outstanding as of March 31, 2023 | |
| 476,000 | | |
$ | 0.001 - 0.95 | | |
$ | 0.47 | |
The
following table summarizes information about stock options that are vested or expected to vest at March 31, 2023:
SCHEDULE
OF STOCK OPTION VESTED
| | |
| | |
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 | | |
| 90,000 | | |
$ | 0.001 | | |
| 0.95 | | |
$ | 38,160 | | |
| 90,000 | | |
$ | 0.001 | | |
| 0.95 | | |
$ | 38,160 | |
| 0.05 | | |
| 3,000 | | |
| 0.05 | | |
| 0.75 | | |
| 1,125 | | |
| 3,000 | | |
| 0.05 | | |
| 0.75 | | |
| 1,125 | |
| 0.15 | | |
| 45,000 | | |
| 0.15 | | |
| 0.58 | | |
| 12,375 | | |
| 45,000 | | |
| 0.15 | | |
| 0.58 | | |
| 12,375 | |
| 0.18 | | |
| 45,000 | | |
| 0.18 | | |
| 0.83 | | |
| 11,025 | | |
| 45,000 | | |
| 0.18 | | |
| 0.83 | | |
| 11,025 | |
| 0.19 | | |
| 45,000 | | |
| 0.19 | | |
| 1.33 | | |
| 10,575 | | |
| 45,000 | | |
| 0.19 | | |
| 1.33 | | |
| 10,575 | |
| 0.20 | | |
| 48,000 | | |
| 0.20 | | |
| 1.05 | | |
| 10,800 | | |
| 48,000 | | |
| 0.20 | | |
| 1.05 | | |
| 10,800 | |
| 0.95 | | |
| 200,000 | | |
| 0.95 | | |
| 1.26 | | |
| — | | |
| 200,000 | | |
| 0.95 | | |
| 1.26 | | |
| — | |
$ | 0.001-1.21 | | |
| 476,000 | | |
$ | 0.47 | | |
| 1.08 | | |
$ | 84,060 | | |
| 476,000 | | |
$ | 0.47 | | |
| 1.08 | | |
$ | 84,060 | |
There
were no granted options granted, nor any options issued in the period ended March 31, 2023 and 2022:
The
weighted-average remaining estimated life for options exercisable at March 31, 2023 is 1.08 years.
The
aggregate intrinsic value for fully vested, exercisable options was $84,060 at March 31, 2023 and at December 31, 2022 was $114,519.
The actual tax benefit realized from stock option exercises for the three months ended at March 31, 2023 and 2022 was $0 as no options
were exercised.
As
at March 31, 2023 the Company has 19,850,071 options or stock awards available for grant under the 2021 Plan.
NOTE
10 – NON-CONTROLLING INTEREST
SCHEDULE
OF NON CONTROLLING INTEREST
| |
March 31, 2023 | | |
December 31, 2022 | |
Net loss Subsidiary | |
| (139,004 | ) | |
| (817,151 | ) |
Net loss attributable to the non-controlling interest | |
| 32,894 | | |
| 193,372 | |
Net loss affecting Bioxytran | |
| (106,110 | ) | |
| (623,780 | ) |
| |
| | | |
| | |
Accumulated losses | |
| (3,733,291 | ) | |
| (3,594,287 | ) |
Accumulated losses attributable to the non-controlling interest | |
| 784,472 | | |
| 751,578 | |
Accumulated losses Bioxytran | |
| (2,948,819 | ) | |
| (2,842,709 | ) |
| |
| | | |
| | |
Net equity non-controlling interest | |
| (623,522 | ) | |
| (590,628 | ) |
As
at March 31, 2023 and at December 31, 2022 there are 30,000,000 issued and 19,650,000 outstanding shares; 15,000,000 Common shares are
held by Bioxytran and 4,650,000 Common shares are held by an affiliate. An additional 4,500,000 options are also held by an affiliate.
The option agreements include provisions for dilutive issuance and cash-less exercise.
NOTE
11 – COMMITMENTS AND CONTINGENCIES
Employment
contracts
Our
Executive Officers have entered into employment contracts and confidentiality, non-disclosure and assignment of invention agreements.
The most substantial provisions include;
|
● |
Compensation
of three (3) times the employee’s annual salary upon the Termination Date and any target bonus earned, or if termination occurs
within 12 months of a change in control, then the terminated employee shall receive two (2) times the employee’s annual salary
and any target bonus earned. |
|
|
|
|
● |
Continued
coverage under any health, medical, dental or vision program or policy, in which they were eligible to participate at the time of
employment termination, for 12 months. |
|
|
|
|
● |
Provide
outplacement services through one or more outside firms of the employee’s choosing up to an aggregate of $50,000. |
There
are no other arrangements or plans in which we provide pension, retirement or similar benefits for any of Executive Officers or Directors.
Litigation
In
the normal course of business, the Company may be involved in legal proceedings, claims and assessments arising in the ordinary course
of business. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance. Legal fees for such matters
are expensed as incurred and we accrue for adverse outcomes as they become probable and estimable.
NOTE
12 – SUBSEQUENT EVENTS
The
Company has evaluated events from March 31, 2023 through the date the financial statements were issued. The events requiring disclosure
for this period are as follows;
Extension
of Maturity of Convertible Notes
On
April 28 the Company extended the Maturity of a $1,000,000 convertible note to August 31, 2023
On
May 10, 2023 the Company extended the Maturity of three (3) convertible notes for a value of $1,165,000
to April
30, 2024. The
interest rate was renegotiated to 10%, from the former 6%, and the Company received the right to repurchase the note at 120% of face-value
plus interest, after 60 days of the extension.
For the brokerage of the deal, our Investment
Banker was compensated with 800,000 5-year warrants exercisable at $0.20/share, valued at $0.4358, based on Black and Scholes Option
Pricing Model, for a total value of $348,637.
Common
Stock
Shares
issued in private placement
Cash
Investment
On
April 18, 2023 the Company issued 78,125 shares of Common Stock against $25,000, or $0.32/share.
Debt
Restructure
On
April 14, 2023, the transactions set forth below were approved by the Company’s Board of Directors with an objective to reduce
the Company’s debt at a price equal to the Company’s Private Placement Memorandum (“PPM”) currently in place,
or $0.32/share.
137,656
shares of Common Stock were issued against supplier invoices amounting to $44,050.
6,763,562
shares of Common Stock were issued to offset an affiliate against invoices paid on behalf of the Company and accrued salaries to our
Officers, for a total value of $2,164,340.
Shares
Awarded under the 2021 Stock Plan:
On
April 18, 2023 the Company issued 80,000 shares of Common Stock, awarded in January 2023, to four Board Members in reward of their attendance
at Board and Committee meetings during the fourth quarter of 2022. The total fair market value at the time of the award was $38,400,
or $0.48/share.
On
April 18, 2023 the Company issued 2,000 shares of Common Stock, awarded in January 2023, to an Advisory Board Members in compensation
for the fourth quarter of 2022. The total fair market value at the time of the award was $960, or $0.48/share.
On
April 18, 2023 the Company issued 30,000 shares of Common Stock, awarded in January 2023, to three Board Members in reward of their attendance
at Board and Committee meetings during the first quarter of 2023. The total fair market value at the time of the award was $12,750, or
$0.425/share.
On
April 18, 2023 the Company issued 2,000 shares of Common Stock, awarded in January 2023, to an Advisory Board Members in compensation
for the first quarter of 2023. The total fair market value at the time of the award was $850, or $0.425/share.
Management
sees no further subsequent events requiring disclosure.