BIOXYTRAN: Management report and analysis of the financial situation and operating results (form 10-Q)

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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, 2020 included in our Annual Report on Form 10-K as
filed with the Securities and Exchange Commission on April 9, 2021. 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 $3,700,000, we will have sufficient working capital
to repay the ten convertible notes and develop our business over the next
approximately 15 months. At funding raised that is significantly less than
$3,700,000, we can likely repay the ten 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 data shows non-toxicity and efficacy for treatment of
mild to moderate COVID-19. In our initial Phase I/II clinical trial are
published as a peer-reviewed scientific report in the Journal of Vaccines &
Vaccinations:
https://www.longdom.org/open-access/galectin-antagonist-use-in-mild-cases-of-sarscov2-pilot-feasibility-randomised-open-label-controlled-trial-61087.html
 The Company is currently working on a Phase III clinical trial with the CDCSO
in India, and is preparing its IND for a Phase III clinical trial with the FDA,
soon to be followed by a Phase III submission with the EMEA. The clinical trials
are expected to take place in May through July, 2021. Further, the Company is
also preparing an IND for a second drug candidate ProLectin-I with similar
galactin blocking capabilities as the oral drug, ProLectin-M, but IV-injectable
for severe cases of COVID-19. The initial Phase I/II clinical trial is planned
for April through June, 2021. The described clinical trials are subject to
additional funding.



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 has currently ten convertible loans outstanding at a total face value of
$938,400. As a result of the ten-day SEC suspension of April 16. 2020, the notes
entered into default and the principal owed is currently $1,612,356, including
default penalties. As shown in the accompanying consolidated financial
statements, the Company had an accumulated deficit of $6,343,630 as at March 31,
2021. The accumulated deficit as at December 31, 2020 was $4,721,923.



The company’s future depends on its ability to secure financing to expand its new business opportunities and bear the cost of drug development, including clinical trials and regulatory submission to the FDA.


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Potential Impact of the Covid-19 Pandemic in December 2019, a strain of novel
coronavirus (now commonly known as Covid-19) was reported to have surfaced in
Wuhan, China. Covid-19 has since spread rapidly throughout many countries, and,
on March 12, 2020, the World Health Organization declared Covid-19 to be a
pandemic. In an effort to contain and mitigate the spread of Covid-19, many
countries, including the United States, Canada and China, have imposed
unprecedented restrictions on travel, and there have been business closures and
a substantial reduction in economic activity in countries that have had
significant outbreaks of Covid-19. Covid-19 may have a future material impact on
our results of operation with respect to product development and clinical
trials. However, significant uncertainty remains as to the potential impact of
the Covid-19 pandemic on our operations, and on the global economy as a whole.
It is currently not possible to predict how long the pandemic will last or the
time that it will take for economic activity to return to prior levels. We do
not yet know the full extent of any impact on our business or our operations,
however, we will continue to monitor the Covid-19 situation closely, and we
intend to follow health and safety guidelines as they evolve.



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 start-up. Historically, Bioxytran is engaged in training, fundraising and identifying and consulting the scientific community regarding the development, formulation and testing of its products.


Operating Expenses



Research and Development (R&D) expenses for the 3-months ended March 31, 2021
were $347,033, while there were no such expenses at 3 months ended March 31,
2020.



General and administrative (G&A) expenses for the three months ended March 31,
2021 were $567,320, while for the three months ended March 31, 2020, they were
$110,542. The components of G&A expenses are as follows:



? Payroll and related expenses for the three months ended March 31, 2021 have been

$ 54,000, compared to $ 36,000 for the three months ended March 31, 2020. the

the difference was due to the hiring of Mike sheik at May 1, 2020.

? Costs of legal, accounting and other professional services for the three

months ended March 31, 2021 have been $ 39,123, compared to $ 22,574 for the three

months ended March 31, 2020. The increase was due to the subcontracting of a project

Responsible for ongoing clinical trials.

? Sales and marketing costs for the three months ended March 31, 2021 have been

$ 3,500, compared to $ 9,489 for the three months ended March 31, 2020. the

the decrease was due to a reduction in PR efforts.

? The remaining general and administrative expenses total $ 470,697, including a $ 420,750

summary judgment against the Company, for the three months ended March, 31st,

2021, compared to $ 42,479 for the three months ended March 31, 2020. the

the decrease was due to participation in the JP Morgan Investment Conference in 2019.




Stock-based Compensation



Stock-based compensation mounted to $774,558 for the three months ended March
31, 2021. The stock-based compensation for the three months ended March 31, 2020
was $155,501. The increase was due to the liquidation of the 2010 Stock Plan.



Interest expense and amortization of the debt discount and premium



During the three months ended March 31, 2021, the Company didn't record any
premium accretion to additional paid-in capital, and in amortization of debt
discount, as compared to, $104,458 of premium accretion and a debt discount
amortization of $166,722 (including warrant amortization of $145,438) for the
three months ended March 31, 2020. The interest for the convertible notes
outstanding amounted to $87,410, as compared to $107,730 for the three months
ended March 31, 2020.



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Non-Controlling Interest


For the three months ending March 31, 2021 there was an allocation of minority interests of $ 154,614. No allocation was made to the March 31, 2020.


Net Loss



The Company generated a net loss for the three months ended March 31, 2021 of
$1,621,707. In comparison, for the three months ended March 31, 2020, the
Company generated a net loss of $540,495. The increased loss is a result of the
summary judgement against the Company, the commencement of Research &
Development as well as the liquidation of the 2010 Stock Plan.



Cash-Flows


Net cash used in operating activities was $ 391,100 and $ 156,789 for the three months ended March 31, 2021 and 2020, respectively. The increase is due to Research and Development from the 4th quarter of 2020.



In the three months ended March 31, 2021 the Company is in the process of filing
a patent, and $8,953 was spent in legal fees. In the three months ended March
31, 2021 there was no investment activities.



Cash flows from financing activities were $450,000 and $43,891 for the three
months ended March 31, 2021 and 2020, respectively. The significant change was a
$450,000 investment by our JV partner in the Company's subsidiary, Pharmalectin.



The money available was $ 91,635 and $ 43,891 at March 31, 2021 and March 31, 2020, respectively.

LIQUIDITY AND CAPITAL RESOURCES



As at December 31, 2020, our assets consisted of was $91,635 in cash, $274,715
in pre-paid expenses and $18,953 in intangible assets in form of capitalized
patent expenses. We had total liabilities of $2,878,322, which were all current
liabilities, and which consisted of $845,216 in accounts payable and accrued
expenses (of which $368,367 was payable to related parties), and $1,612,356 in
the form of ten convertible loans currently in default. As a result of
defaulting on the notes, the debt premium as well as the debt discounts are
fully amortized. On January 20, 2021 the Supreme Court of the State of New York,
County of Nassau, granted Power Up a summary judgement against the Company for
Breach of Contact, awarding Power Up damages in the amount of $420,750, in the
balance sheet classed as other short-term debt. The equivalent numbers As at
December 31, 2020, our assets consisted of was $41,688 in cash, $274,715 in
pre-paid expenses and $10,000 in intangible assets in form of capitalized patent
expenses. We had total liabilities of $2,267,659, which were all current
liabilities, and which consisted of $655,303 in accounts payable and accrued
expenses (of which $307,176 was payable to related parties), and $1,612,356 in
the form of ten convertible loans currently in default. As a result of
defaulting on the notes, the debt premium as well as the debt discounts are
fully amortized.



At March 31, 2021, we have total working capital of negative $2,511,972 and an
accumulated deficit of $6,343,630. Comparatively, at December 31, 2020, we had
total working capital of negative $1,951,256 and an accumulated deficit of
$4,721,923. We believe that we must raise not less than $3,700,000 in addition
to current cash on hand to be able to continue our business operations for
approximately the next 15 months and repay the ten convertible notes.



Future Financing



We have a commitment from our JV partner to invest a total of $5 million in the
Company's subsidiary, at March 31, 2021 $1,400,000 has been released, and at
December 31, 2020 $950,000 had been released. 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.



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.



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Contractual Obligations



As at March 31, 2021, our contractual obligations include ten convertible notes,
with a face value of $938,400 and of accrued interest for these notes mounting
to $350,545, described under Note 7 to the Financial Statements. As a result of
the ten-day SEC suspension of April 16, 2020, the notes entered into default
resulting in a default penalty of $673,956, increasing the principal owed to
$1,612,356.


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.

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