Overview
We do not currently have sufficient capital resources to fund operations. To stay in business and to continue the development of our products, we will need to raise additional capital through public or private sales of our securities, debt financing or short-term bank loans, or a combination of the foregoing. We believe that if we can raise$3,700,000 , we will have sufficient working capital to develop our business over the next approximately 15 months. At funding raised that is significantly less than$3,700,000 , we can likely continue to develop our business over the same 15-month period, but funding at that level will delay the development of our technology and business.Bioxytran, Inc. is headquartered inNeedham, Massachusetts . The Company's initial product pipeline is focused on developing and commercializing therapeutic molecules for stroke. BXT-25 will be designed to be an injectable anti-necrosis drug specifically designed to treat a person immediately after that person suffers an ischemic stroke. The drug is designed to be injected intravenously to travel to the lungs to pick up oxygen molecules to carry to the brain. Like a red blood cell, the drug will cross the blood brain barrier, which is a protective semi-permeable membrane allowing some material to cross but preventing others from crossing. BXT-25 will be designed to diffuse oxygen into the brain tissues. We expect the BXT-25 molecule to be 5,000 times smaller
than a red blood cell. OnDecember 2, 2022 ,India's Central Drugs Standard Control Organisation (CDSCO) issued an IND with permission to conduct: "A Phase 1b/2a Randomized, Blinded, placebo-controlled Study in Participants with Mild to Moderate COVID-19 to Evaluate the Safety, Efficacy, and Pharmacokinetics of Orally Administered ProLectin-M". The study will continue by the filing of an Emergency IND with the FDA in the first quarter of 2023, provided we obtain adequate funding. The Company is currently in the process of filing an IND with the FDA. OnJanuary 27, 2023 , an additional IND with the CDSCO was issued for an IV treatment of SARS-CoV-2 in moderate (Hospitalized patients) Covid-19 infections (ProLectin-I), Long Covid, and of treatment of lung-fibrosis as a result of use of ventilator in treatment of Covid-19 (ProLectin-F), respectively. The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company has limited resources and operating history. As described in Note 7 of the financial statements, the Company currently has convertible loans outstanding at a total face value of$2,165,000 . As shown in the accompanying consolidated financial statements, the Company had an accumulated deficit of$11,217,600 as atDecember 31, 2022 . The accumulated deficit as atDecember 31, 2021 was$8,753,668 .
The future of the Company is dependent upon its ability to obtain financing to develop its new business opportunities and support the cost of the drug development including clinical trials and regulatory submission to the FDA.
16
Management plans to seek additional capital through private placements and public offerings of its Common Stock. There can be no assurance that the Company will be successful in accomplishing its objectives. Without such additional capital or the establishment of strategic relationships with established pharmaceutical companies, the Company may be required to cease operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue operations. RESULTS OF OPERATIONS
We are a clinical stage company. Historically,
Research and Development December 31, December 31, 2022 2021 Research and development: Process development $ -$ 339,000 Product development 123,580 305,743 Regulatory 231,078 177,074 Clinical trials 583,750 1,016,765 Project management 39,360 175,180
Total research and development
During the twelve months ended
in R&D expenses. During the twelve months ended
recorded
we're waiting to start our clinical trials. General and Administrative December 31, December 31, 2022 2021 General and administrative expenses: Payroll and related expenses$ 343,167 $
1,391,431
Costs for legal, accounting and other professional services 78,925
84,056
Costs for legal, accounting and other professional services related party 44,220
5,125 Promotional expenses 339,251 5,500 Miscellaneous expenses 172,399 131,698
Total general and administrative$ 977,962 $
1,617,809
The significant increase in Payroll and related expenses for the twelve months
ended
salaries for the Company's management starting
2022 the Company's Officers forfeited of the majority of their accrued salaries
and benefits for a total value of
The Costs for legal, accounting and other professional services for the twelve
months ended
The Costs for legal, accounting and other professional services related party
for two License Agreements with two affiliated companies.
the affiliates for incurred administrative costs in making the licenses, and
their maintenance.
Promotional expenses for the twelve months ended
The increase costs stock promotion incurred by the Company's return to being
listed on OTCQB.
Miscellaneous G&A expenses during the twelve months ended
costs to return to being listed on OTCQB. 17 Stock-based CompensationDecember 31 ,December 31, 2022 2021
Compensation expense to BoD and Management
116,804 89,284 Total compensation expense$ 178,382 $ 582,862 Stock-based compensation mounted to$178,382 for the twelve months ended
December 31, 2021 was$582,862 and is explained by the liquidation of the 2010 Stock Plan in 2021. Other expenses December 31, December 31, 2022 2021 Other expenses: Interest expense$ 207,117 $ 236,577 Debt discount amortization 128,859 77,031 Amortization of warrants 190,335 - Forfeiture of warrants (6,763 ) - Amortization of IP 3,644 - Total other income (expenses)$ 523,192 $ 313,608
During the twelve months ended
in amortization of debt discount and the interest expense was
was amortized from the Company's IP at net of
warrants. During the twelve months ended
recorded
was$171,627 . The increase is due to the Company's fund-raising activities. Non-Controlling InterestDecember 31 ,December 31, 2022 2021
Net loss attributable to the non-controlling interest
For the twelve months ended
non-controlling interest attribution of
significant difference is due to a significant reduction in the R&D activities
in the current year due to lack of capital. December 31, December 31, # of shares # of options 2022 2021
Minority owners cash investment 4,650,000 $
160,485$ 160,485 Bioxytran non-dilutive equity 15,000,000 1,500 1,500 Issued stock options @$0.33 4,500,000 450 450 Total outstanding 19,650,000 4,500,000$ 162,435 $ 162,435 There are currently 30,000,000 issued and 19,650,000 outstanding shares; 15,000,000 Common shares (76%) are held byBioxytran and 4,650,000 Common
shares (24%) 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
includesMike Sheikh ,Ola Soderquist andDavid Platt . 18 Net Loss December 31, December 31, 2022 2021 Net loss attributable to Bioxytran$ (2,463,932 ) $
(4,031,745 )
Loss per common share, basic and diluted$ (0.02 ) $
(0.04 )
Weighted average number of common shares outstanding, basic and diluted 115,361,105 106,252,116
The Company generated a net loss for the twelve months ended
of
the Company generated a net loss of
due to a significant reduction in the R&D activities in the current year due to lack of capital. CASH-FLOWSDecember 31 ,December 31, 2022 2021
Net cash used in operating activities
Net cash used in investing activities (32,247 ) (36,931 ) Net cash provided by financing activities 2,060,960 1,765,000
Net increase in cash 223,043 30,670 Cash, beginning of period 72,358 41,688 Cash, end of period$ 295,401 $ 72,358
Net cash used in operating activities was
twelve months ended
due to a reduction of the research and development activities due to lack of
funding.
In the twelve months ended
filing a patent, and
ended
Cash flows from financing activities were
twelve months ended
The available cash was
endedDecember 31, 2022 and 2021, respectively. LIQUIDITY AND CAPITAL RESOURCES Current Assets December 31, December 31, 2022 2021 Current assets: Cash$ 295,401 $ 72,358 Total current assets$ 295,401 $ 72,358
As of
December 31, 2021 we had$72,358 in cash. 19 Current Liabilities December 31, December 31, 2022 2021 Current liabilities: Accounts payable and accrued expenses$ 749,395 $ 624,316 Accounts payable related party 709,727
531,000
Un-issued shares liability 960
-
Un-issued shares liability related party 38,400
-
Convertible notes payable, net of discount 2,165,000 2,122,181 Total current liabilities
3,663,482 3,277,497
At
payable to related parties),
payable to related parties), and
in accounts payable and accrued expenses (of which
related parties), and
discount. On
May 2022 .
December 31, December 31, 2022 2021 Net working capital$ (3,368,080 ) $ (3,205,139 ) Accumulated deficit$ (11,217,600 ) $ (8,753,668 )
At
accumulated deficit of
net working capital of negative
to continue our business operations for the next 15 months.
Cash Proceeds from Financing Activities
December 31, December 31, 2022 2021 Cash proceeds from financing activities Proceeds from Subsidiary stock transactions $ - $
600,000
Proceeds from stock transactions 680,000
Proceeds from issuance of convertible notes payable 1,380,460
1,165,000
Net cash provided by financing activities$ 2,060,960 $
1,765,000 During the twelve months endingDecember 31, 2022 , the Company had raised
proceeds of
During the twelve months ending
and
extended through
Company is aware that its current cash on hand will not be sufficient to fund
its projected operating requirements through the month ofMay 2023 .
Planned Financing Activities
The Company intends to issue a Private Placement Offering under Regulation D in
the order of
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.
20 Commitments
We have no current commitment from our Officers and Directors or any of our shareholders, to supplement our operations or provide us with financing in the future. If we are unable to raise additional capital from conventional sources and/or additional sales of stock in the future, we may be forced to curtail or cease our operations. Even if we are able to continue our operations, the failure to obtain financing could have a substantial adverse effect on our business and financial results. In the future, we may be required to seek additional capital by selling debt or equity securities, selling assets, or otherwise be required to bring cash flows in balance when we approach a condition of cash insufficiency. The sale of additional equity or debt securities, if accomplished, may result in dilution to our then shareholders. We provide no assurance that financing will be available in amounts or on terms acceptable to us, or at all. Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on our consolidated financial condition, results of operations, liquidity, capital expenditures
or capital resources. CRITICAL ACCOUNTING POLICIES In presenting our financial statements in conformity with generally accepted accounting principles, we are required to make estimates and assumptions that affect the amounts reported therein. Several of the estimates and assumptions we are required to make relate to matters that are inherently uncertain as they pertain to future events. However, events that are outside of our control cannot be predicted and, as such, they cannot be contemplated in evaluating such estimates and assumptions. If there is a significant unfavorable change to current conditions, it could result in a material adverse impact to our results of operations, financial position and liquidity. We believe that the estimates and assumptions we used when preparing our financial statements were the most appropriate at that time. Presented below are those accounting policies that we believe require subjective and complex judgments that could potentially affect reported results. However, the majority of our businesses operate in environments where we pay a fee for a service performed, and therefore the results of the majority of our recurring operations are recorded in our financial statements using accounting policies that are not particularly subjective, nor complex. Stock Based Compensation The Company has share-based compensation plans under which non-employees, consultants and suppliers may be granted restricted stock, as well as options to purchase shares of Company common stock at the fair market value at the time of grant. Stock-based compensation cost is measured by the Company at the grant date, based on the fair value of the award over the requisite service period. The Company applies ASC 718 for options, common stock and other equity-based grants to its employees and Directors. ASC 718 requires measurement of all employee equity-based payment awards using a fair-value method and recording of such expense in the consolidated financial statements over the requisite service period. The fair value concepts have not changed significantly in ASC 718; however, in adopting this standard, companies must choose among alternative valuation models and amortization assumptions. After assessing alternative valuation models and amortization assumptions, the Company will continue using both the Black-Scholes valuation model and straight-line amortization of compensation expense over the requisite service period for each separately vesting portion of the grant. Recent Accounting Standards InAugust 2020 , theFinancial 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 effectiveJanuary 1, 2021 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning onJanuary 1, 2021 . The Company adopted ASU 2020-06 effectiveJanuary 1, 2021 . The adoption of ASU 2020-06 did not have an impact on the Company's financial statements. 21
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