BIOXYTRAN, INC - Quarter Report: 2023 September (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from_____________ to _____________

Commission file number: 001-35027

BIOXYTRAN, INC.

(Exact name of registrant as specified in its charter)

617-454-1199

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. 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, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of Common Stock, as of the latest practicable date.

BIOXYTRAN, INC.

FORM 10-Q

TABLE OF CONTENTS

Except as otherwise required by the context, all references in this report to “we”, “us”, “our” or “Company” refer to the consolidated operations of BIOXYTRAN, Inc.

PART I - FINANCIAL INFORMATION

Item 1. Unaudited Condensed Consolidated Financial Statements: BIOXYTRAN, Inc., September 30, 2023

BIOXYTRAN, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2023 AND DECEMBER 31, 2022

(UNAUDITED)

See the accompanying notes to these unaudited condensed consolidated financial statements

BIOXYTRAN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(UNAUDITED)

See the accompanying notes to these unaudited condensed consolidated financial statements

BIOXYTRAN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(UNAUDITED)

See the accompanying notes to these unaudited condensed consolidated financial statements

BIOXYTRAN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(UNAUDITED)

See the accompanying notes to these unaudited condensed consolidated financial statements

BIOXYTRAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 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.

Our subsidiary, Pharmalectin India Pvt Ltd. (“Pharmalectin India”) is managing the Company’s local clinical research and trials, and holds the local rights to commercialization.

Organization

Bioxytran, Inc. was organized on October 5, 2017 as a Delaware corporation, with a taxing structure for U.S. federal and state income tax as a C-Corporation with 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 19,650,000 issued and outstanding shares; 15,000,000 Common shares are held by Bioxytran and 4,650,000 Common shares are held by NDPD Parma, Inc (the “affiliate”). An additional 4,500,000 options are also held by the 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.

Pharmalectin India Pvt Ltd. (“Pharmalectin India”) was organized on August 30, 2022 as an Indian Business Corporation with its principal place of business in Hyderabad, Telangana, India, with 50,000 authorized shares with a par value of $0.12 (₹10). There are currently 41,020 outstanding shares whereof 41,000 (99.95%) are 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 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.

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of Bioxytran, Inc. a Nevada Corporation, its majority owned subsidiary, Pharmalectin, Inc. of Delaware, as well as its wholly owned subsidiaries, Pharmalectin (BVI), Inc of British Virgin Islands and Pharmalectin India Pvt Ltd. (collectively, the “Company”). All intercompany accounts have been eliminated upon consolidation.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A summary of the significant accounting policies applied in the preparation of the accompanying financial statements follows.

Cash

For purposes of the Statement of Cash Flows, the Company considers all highly liquid debt instruments purchased with an original maturity date of three months or less to be cash equivalents.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of expenses during the reporting period. Significant estimates include the fair value of the Company’s stock, stock-based compensation, valuation of warrants, valuations in connection with convertible notes and the valuation allowance related to deferred tax assets. Actual results may differ from these estimates.

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 September 30, 2023, we would, based on the market price of $0.17/share, be obligated to issue approximately 16,045,900 shares of Common Stock upon conversion of currently outstanding convertible notes and 2,422,144 shares upon exercise of outstanding warrants and 380,000 shares upon exercise of outstanding options. For these Promissory notes, the shares total value is based on $1,900,000 of currently outstanding principal, and $185,967 in unpaid interest.

All of our currently outstanding 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 whereby the Company receives gross proceeds of not less than $500,000. The notes contain a conversion limitation which prevents the holder(s) of the notes from converting if doing so would result in the holder beneficially owning 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 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.

Research and Development

The Company accounts for research and development costs in accordance with Accounting Standards Codification subtopic 730-10, Research and Development (“ASC 730-10”). Under ASC 730-10, all research and development costs must be charged to expense as incurred. Accordingly, internal research and development costs are expensed as incurred. Third-party research and development costs are expensed when the contracted work has been performed or as milestone results have been achieved as defined under the applicable agreement. Company-sponsored research and development costs related to both present and future products are expensed in the period incurred.

For the nine months ended September 30, 2023 the Company incurred $604,771 in research and development expenses, while during the nine months ended September 30, 2022 the Company incurred $759,138.

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 adoption of ASU 2020-06 did not have an impact on the Company’s financial statements.

Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed interim financial statements.

NOTE 3 – GOING CONCERN AND MANAGEMENT’S LIQUIDITY PLANS

As at September 30, 2023, the Company had cash of $80,273 and a negative working capital of $2,252,685. The Company has not yet generated any revenues from operations and has incurred cumulative net losses of $14,451,092. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

During the nine months ended September 30, 2023, the Company raised a net of $505,361 in cash proceeds from the issuance of Common Stock. During the same period in 2022, the Company raised a net of $1,380,960 in cash proceeds from the issuance of convertible notes and $600,000 from the issuance of Common Stock of the Subsidiary. The Company is aware that its current cash on hand will not be sufficient to fund its projected operating requirements through the month of December 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.

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 nine months ended September 30, 2023 the affiliates were paid $5,000 each. During the same period in 2022, there was $25,720 in transactions with affiliates as the Company also reimbursed the affiliates for the legal and administrative costs surrounding the establishment of the Licenses.

In the three months leading up to the financial close, the affiliate has advanced $25,000 on behalf of the Company to pay necessary invoices from service providers, due to lack of funds.

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 nine months ended September 30, 2023, or 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

NOTE 6 – ACCOUNTS PAYABLES AND ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

On September 30, 2023, there was $25,000 in a non-interest loan from a related party, in addition to $45,000 in unissued shares owed to related parties. On December 31, 2022 there was $709,727 in accounts payable to related parties and $38,400 in unissued shares owed to related parties.

The following table represents the major components of accounts payables and accrued expenses and other current liabilities at September 30, 2023 and at December 31, 2022:

SCHEDULE OF ACCOUNTS PAYABLES AND ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES 

NOTE 7 – CONVERTIBLE NOTES PAYABLE

Private Placement, 2021 Notes

Around April 29, 2021, we entered into four (4) Securities Purchase Agreements (the “2021 SPA’s”), under which we agreed to sell convertible promissory notes (the “2021 Notes”), in an aggregate principal amount of $1,165,000 with 6% interest, whereof $1,000,000 were contributed in form of cancellation of third-party notes.

At any time after the issue date of the 2021 Notes, the Holders of the 2021 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) $0.13 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 maturity on one note was negotiated to August 31, 2023, while the maturity of the three remaining notes were negotiated to April 30, 2024, and an increase of the interest rate to 10%. The principal and interest for two of these latter notes were extinguished and one partially converted into 2,435,291 shares of Common Stock on May 17, on June 26 and on August 30, 2023 for a total value of $316,588.

SCHEDULE OF CONVERTIBLE CONVERSION OF ACCRUED INTEREST AND PRINCIPAL

Convertible notes payable and interest payable consist of the following at September 30, 2023, and December 31, 2022:

SCHEDULE OF CONVERTIBLE NOTES PAYABLE

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.

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 of September 30, 2023 and at December 31, 2022, no Preferred shares have been designated or issued.

Common Stock

On August 15, 2022 1,400,000 shares of Common Stock were sold in a private placement for an amount of $600,000, or $0.43/share.

On August 31, 2022, 6,081,484 shares of Common Stock were issued against convertible notes with a principal of $1,467,000 and an accrued interest of $53,371, or $0.25/share.

On September 8, 2022, 4,139,503 shares of Common Stock were issued in exchange against four outstanding warrants including provisions for dilutive issuance and cashless exercise.

For the nine months ending September 30, 2022, 552,000 shares of Common Stock were issued under the 2021 Stock Plans for a total value of $105,730.

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.

On April 14, 2023 the Company issued 137,656 shares of Common Stock were against third-party supplier invoices amounting to $44,050, or $0.32/share.

On April 14, 2023 the Company issued 6,763,562 shares of Common Stock to offset the affiliate against invoices paid on behalf of the Company and accrued salaries to our Officers, for a total value of $2,164,340., or $0.32/share.

On April 18, 2023 the Company issued 78,125 shares of Common Stock against $25,000, or $0.32/share.

On May 15, 2023 the Company issued 114,286 shares of Common Stock against $40,000, or $0.32/share.

On May 17, 2023 the Company issued 522,138 shares of Common Stock in a conversion of a note for a value of $67,878 in principal and interest, or $0.13/share.

On June 26, 2023 the Company issued 803,292 shares of Common Stock in a conversion of a note for a value of $104,428 in principal and interest, or $0.13/share.

On July 26, 2023 the Company issued 500,000 shares of Common Stock against $100,000, or $0.20/share.

On August 21, 2023, 1,612,903 shares of Common Stock were sold on an S-1 for the amount of $145,161, or $0.09/share.

On August 21, 2023, 1,600,000 shares of Common Stock were exchanged for invoices in the amount of $145,000, or $0.09/share.

On August 25, 2023, 505,186 shares of Common Stock were sold in a private placement for the amount of $68,200, or $0.135/share.

On August 30, 2023 the Company issued 1,109,861 shares of Common Stock in a conversion of a note for a value of $144,282 in principal and interest, or $0.13/share.

On September 14, 2023, 5,824,741 shares of Common Stock were exchanged by the Company’s officers for invoices and salary past due in the amount of $786,340, or $0.135/share.

On September 19, 2023, the Company issued 200,000 shares of Common Stock against $27,000, or $0.135/share.

On September 19, 2023, the Company issued 370,370 shares of Common Stock against $50,000, or $0.135/share.

For the nine months ended September 30, 2023, a net of 711,000 shares of Common Stock were awarded under the 2021 Stock Plan for a total value of $141,796, or at an average cost of $0.20 per share.

As at September 30, 2023, the Company has 144,355,355 shares of Common Stock issued and outstanding, at December 31, 2022 the Company had 123,252,235 shares of Common Stock issued and outstanding.

Common Stock Warrants

For the nine months ended September 30, 2023 the Company issued 800,000 5-year warrants exercisable at $0.20/share, in connection with the refinancing of the 2021 Notes, valued at $0.436, based on Black and Scholes Option Pricing Model, for a total value of $348,637. For the nine months ended September 30, 2022, 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 9 months ended September 30, 2023 was calculated with the following assumptions:

SCHEDULE OF STOCK WARRANTS VALUATION ASSUMPTIONS

The following table summarizes the Company’s common stock warrant activity for the 9 months ended September 30, 2023 and 2022:

SCHEDULE OF WARRANT ACTIVITY

The following table summarizes information about stock warrants that are vested or expected to vest at September 30, 2023:

SCHEDULE OF WARRANT OUTSTANDING AND EXERCISABLE WARRANTS

The following table sets forth the status of the Company’s non-vested warrants as at September 30, 2023 and 2022:

SCHEDULE OF NON-VESTED WARRANTS 

Sales of Shares in Subsidiary

For the nine months ended September 30, 2023 there were no shares sold in the Company’s Subsidiary, Pharmalectin, Inc.. For the nine months ended September 30, 2022 there were 1,800,000 shares of Common Stock sold in the Company’s Subsidiary, Pharmalectin, Inc. for a total of $600,000.

NOTE 9 – STOCK OPTION PLAN AND STOCK-BASED COMPENSATION

On January 19, 2021, the Board of Directors adopted the “2021 Stock Plan” (the “2021 Plan”) under which the Company may grant Options to Purchase Stock, Stock Awards or Stock Appreciation Rights in an amount up to 15% of the number of issued and outstanding shares of the Company’s Common Stock, automatically adjusted on January 1 each year. Under the terms of the 2021 Stock Plan, 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 September 30, 2023, 90,000 options and 5,001,709 shares have been awarded from the 2021 Plan.

Shares Awarded and Issued under the 2021 Plan:

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. The shares were issued on August 1, 2022

On February 18, 2022, the Company granted 100,000 shares of Common Stock to two Consultants in reward of their assistance for the product development and our clinical trials in India. The total fair market value at the time of the award was $16,000, or $0.16/share. The shares were issued on August 1, 2022

On April 1, 2022, the Company granted 10,000 shares to a Medical Advisory Board Member for her contribution to the Company during the first quarter of 2022. The total fair market value at the time of the award was $1,730, or $0.173/share. The shares were issued on August 1, 2022

On April 1, 2022, the Company granted 70,000 shares to four Board Members in reward of their attendance at Board and Committee meetings during the first quarter of 2022. The total fair market value at the time of the award was $12,110, or $0.173/share. The shares were issued on August 1, 2022.

On April 11, 2022, the Company granted 250,000 shares to three Consultants for the management of our clinical trials in India. The total fair market value at the time of the award was $43,250, or $0.173/share. The shares were issued on August 1, 2022.

On August 1, 2022, the Company issued 82,000 shares to four Board Members in reward of their attendance at Board and Committee meetings during the second quarter of 2022. The total fair market value at the time of the award was $26,240, or $0.32/share.

On April 19, 2023, the Company issued 110,000 shares, with an average fair market value of $0.46/share at the time of award, to four members of the Board of Directors as compensation for their participations of Board and Committee meetings in the fourth quarter of 2022 and in the first quarter of 2023, for a total of $50,200.

On April 19, 2023, the Company granted 4,000 shares with an average fair market value of $0.45/share to a Scientific Advisory Board Member for his contribution in the fourth quarter of 2022 and in the first quarter of 2023, for a total of $1,790.

On August 4, 2023, the Company issued 120,000 shares, with an average fair market value of $0.15/share at the time of award, to three members of the Board of Directors as compensation for their participations of Board and Committee meetings in the second quarter of 2023, for a total of $17,940.

On August 4, 2023, the Company granted 477,000 shares with an average fair market value of $0.15/share to a Scientific Advisory Board Members and consultants for their contribution in the second quarter of 2022 and in the first quarter of 2023, for a total of $71,312.

SCHEDULE OF FAIR MARKET VALUE 

For the nine months ended September 30, 2023, the Company recorded stock-based compensation expense of $157,268 in connection with the issuance of 711,000 Common share-based payment awards. For the nine months ended September 30, 2022, the Company had issued 552,000 shares at a stock-based compensation expense of $142,630.

Stock options granted and vested 2021 Plan:

There were no stock options granted the nine months ended September 30, 2023 and 2022. But, 144,000 stock options was forfeited in the nine months ended September 30, 2023, and 96,000 stock options was forfeited in the nine months ended September 30, 2022.

The following table summarizes the Company’s stock option activity for the nine months ended September 30, 2023, and 2022:

SCHEDULE OF STOCK OPTIONS ACTIVITY 

The following table summarizes information about stock options that are vested or expected to vest at September 30, 2023:

SCHEDULE OF STOCK OPTION VESTED 

The weighted-average remaining estimated life for options exercisable at September 30, 2023 is 0.48 years.

The aggregate intrinsic value for fully vested, exercisable options was $7,650 at September 30, 2023. The actual tax benefit realized from stock option exercises for the nine months ended at September 30, 2023 and 2022 was $0 as no options were exercised.

As at September 30, 2023 the Company has 20,875,870 options or stock awards available for grant under the 2021 Plan.

NOTE 10 – NON-CONTROLLING INTEREST

SCHEDULE OF NON CONTROLLING INTEREST 

As at September 30, 2023 and at December 31, 2022 there are 19,650,000 issued and outstanding shares of Common Stock; 15,000,000 Common shares are held by Bioxytran and 4,650,000 Common shares are held by the affiliate. An additional 4,500,000 options are also held by the affiliate. The option agreement includes a provision 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;

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 September 30, 2023 through the date the financial statements were issued. and did not, other than what is disclosed in the below, identify any further subsequent events requiring disclosure.

Shares awarded under the 2021 Stock Plan:

On October 27, 2023, the Company granted 53,815 shares to three Scientific Advisory Board Members for their contribution to the Company during the third quarter of 2023. The total fair market value at the time of the award was $10,386, or $0.193/share.

On October 27, 2023, the Company granted 233,163 shares to four Board Members in reward of their contribution and their attendance at Board and Committee meetings during the third quarter of 2023. The total fair market value at the time of the award was $45,000, or $0.193/share.

Stock options forfeited under the 2021 Stock Plan:

On October 30, 2023, 45,000 options were forfeited by expiration and returned to the 2021 stock plan.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis is based on, and should be read in conjunction with, the audited financial statements and the notes thereto for the two years ended December 31, 2022, included in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 31, 2023. This discussion contains forward-looking statements. These statements are often identified by the use of words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,” or “continue,” and similar expressions or variations. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. The forward-looking statements in this Quarterly Report on Form 10-Q represent our views as of the date of this Quarterly Report on Form 10-Q. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so, except to the extent required by applicable law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Quarterly Report on Form 10-Q.

OVERVIEW

We do not currently have sufficient capital resources to fund operations. To stay in business and to continue the development of our products, we will need to raise additional capital through public or private sales of our securities, debt financing or short-term bank loans, or a combination of the foregoing. We believe that if we can raise $5,300,000, we will have sufficient working capital to repay the outstanding convertible notes and develop our business over the next approximately 15 months. At funding raised that is less than $5,300,000, we can likely repay the four convertible notes and continue to develop our business over the same 15-month period, but funding at that level will delay the development of our technology and business.

Bioxytran, Inc. is headquartered in Newton, Massachusetts. The Company’s initial product pipeline is focused on developing and commercializing therapeutic molecules for stroke. BXT-25 will be designed to be an injectable anti-necrosis drug specifically designed to treat a person immediately after that person suffers an ischemic stroke. The drug is designed to be injected intravenously to travel to the lungs to pick up oxygen molecules to carry to the brain. Like a red blood cell, the drug will cross the blood brain barrier, which is a protective semi-permeable membrane allowing some material to cross but preventing others from crossing. BXT-25 will be designed to diffuse oxygen into the brain tissues. We expect the BXT-25 molecule to be 5,000 times smaller than a red blood cell.

Our Subsidiary is continuing our clinical trials with a candidate named, ProLectin a complex polysaccharide derived from galactomannan and pectin respectively, that binds to, and blocks the activity of galectin-1 and -3, 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.

ProLectin-M’s clinical trial data shows non-toxicity and efficacy for treatment of mild to moderate COVID-19. The results of the trial are described in our three peer-reviewed articles 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, Carbohydrate ProLectin-M, a Galectin-3 Antagonist, Blocks SARS-CoV-2 Activity published in the International Journal of Health Sciences on July 31, 2022 and PLG-007 and Its Active Component Galactomannan-α Competitively Inhibit Enzymes That Hydrolyze Glucose Polymers published in the International Journal of Molecular Science on July 13, 2022.

Results from our latest Phase 2 trial on COVID-19 patients conducted at ESIS Medical College and Hospital, Sanath Nagar, Hyderabad, India were published in in the peer-reviewed journal Virus: An Oral Galectin Antagonist in COVID-19—A Phase II Randomized Controlled Trial on February 23, 2023, show positive results of its randomized, placebo-controlled Phase 2 clinical trial in thirty-four (34) patients with mild-to-moderate COVID-19. During the seven (7) days of treatment, an orally administered Galectin Antagonist in the form of a chewable tablet was administered eight (8) times per day on an hourly basis. The endpoint was a statistically significant reduction in viral load measured by the number of patients reaching a below threshold PCR value (Ct value ≥ 29) by day 7. The trial met its endpoint with a one hundred percent (100%) response rate by day 7 versus six percent (6%) in placebo, which was statistically significant (p-value = .001). Our analysis also revealed an 82% response rate by day 3, which was statistically significant (p-value = .001). There were no drug-related serious adverse events (SAE’s) in the patient population or viral rebounds by day fourteen (14) in the patient population.

On April 19, 2023, the Company announced that its long awaited Acellular Oxygen Carrier (“AOC”) BXT-25 had been successfully tested in animals. The initial results are very encouraging because they show the non-toxicity of the experimental drug, along with the corresponding full recovery in Swiss Albino mice, in an experiment carried out in a joint venture with NDPD Pharma, Inc. As a next step, the Company intends to proceed with a 14-day repeated dose toxicity study using New Zealand Rabbits and Wistar Rats as funding permits.

On August 31, 2023 the Company published a pre-print of a future article named: Evaluation of Complex Carbohydrates Showing Broad-Spectrum Antiviral Activity against SARS-CoV-2, Influenza-a (H1N1) and Human Respiratory Syncytial Virus (hRSV) Strain A2 in ‘In Vitro’ Setting. With a conclusion that both ProLectin-I and ProLectin-M have been reported to exhibit broad-spectrum antiviral activity in ‘in-vitro’ setting. ProLectin-M reducing influenza-A virus by 95% and hRSC strain A2 by 65%. To better understand broad spectrum antiviral activity of ProLectin-I and ProLectin-M, further pre-clinical research is warranted.

On August 21, 2023, the US Food and Drug Administration (“FDA”) approved the Company’s IND #153742, filed under the title “PROTECT: ProLectin-M, a nucleocapsid TErminal GaleCTin antagonist for COVID-19 (PROTECT), a Randomized, Double-blinded Clinical Trial to Evaluate the Efficacy and Safety in Non-Hospitalized Adult Participants with COVID-19”. The trial is expected to start early 2024, provided we obtain adequate funding.

On December 2, 2022, India’s Central Drugs Standard Control Organisation (CDSCO) issued an IND with permission to conduct: “A Phase 1b/2a Randomized, Blinded, placebo-controlled Study in Participants with Mild to Moderate COVID-19 to Evaluate the Safety, Efficacy, and Pharmacokinetics of Orally Administered ProLectin-M”. The Company is currently recruiting patients for the trial and initial dosage of patients is planned to start on, or around, October 1, 2023.

On January 27, 2023, an additional IND with the CDSCO was issued for ProLectin-I for an “IV treatment of SARS-CoV-2 in hospitalized patients with moderate Covid-19 infections and for Long Covid”, and for ProLectin-F for “treatment of lung-fibrosis resulting from an earlier Covid infection”.

The future of the Company is dependent upon its ability to obtain financing to develop its new business opportunities and support the cost of the drug development including clinical trials and regulatory submission to the FDA.

Management plans to seek additional capital through the issuance of its debt and/or equity securities. 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.

The accompanying unaudited condensed 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 6 of the financial statements, the Company has currently two (2) convertible loans outstanding at a total face value of $1,900,000. As shown in the accompanying unaudited condensed consolidated financial statements, the Company had an accumulated deficit of $14,451,092 as at September 30, 2023. The accumulated deficit as at December 31, 2022 was $11,217,600.

RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023

We are a clinical stage company. Historically, Bioxytran was engaged in formation, fund raising and identifying and consulting with the scientific community regarding the development, formulation and testing of its products as of the fourth quarter of 2021 the Company has engaged in research and development activities through its Subsidiary, Pharmalectin, Inc., developing the Company’s anti-viral therapeutic ProLectin. Additionally, during the first half of 2023, the Company successfully developed a GLP facility and initiated preliminary animal testing of our hypoxia platform technology: Acellular Oxygen Carrier (“AOC”), with an expected start date in early 2024 for pre-clinical testing and studies.

Research and Development

General and Administrative

Stock-based Compensation

Other expenses

Non-Controlling Interest