Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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 fifteen (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 in Needham, 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.
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”. On March 2, 2026, the Company reported that the study showed that the highest evaluated dose of ProLectin-M (16,800 mg/day) was associated with statistically significant earlier viral clearance and faster clinical improvement by Day 5 compared with placebo, while demonstrating a favorable safety and tolerability profile. By Day 7, viral clearance was observed across all study arms, consistent with the expected natural resolution of infection in this population, indicating the treatment effect may be related to accelerating viral clearance. No serious adverse events were reported, and no treatment-related discontinuations occurred. The results provides clarity as the Company advances with its Phase 3 application. The The Phase 3 trial is projected to start in the third quarter of 2026, provided we obtain adequate funding.
On August 21, 2023, the Company’s IND #153742 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” was approved by the FDA, the trial is expected to start in the third quarter of 2026, provided we obtain adequate funding.
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 as a result of use of ventilator”.
On April 19, 2023, the Company announced that its Acelluar Oxygen Carrier (“AOC”) BXT-25 has 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.
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. The Company currently has one convertible loan outstanding at a total face value of $805,000. As shown in the accompanying consolidated financial statements, the Company had an accumulated deficit of $21,044,246 as at December 31, 2025. The accumulated deficit as at December 31, 2024, was $18,921,169.
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 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, Bioxytran was engaged in formation, fund raising and identifying and consulting with the scientific community regarding the development, formulation and testing of its products. We are actively engaged in research and development activities through our Subsidiary, Pharmalectin, Inc., developing the ProLectin-Rx.
Research and Development
December 31,
December 31,
Research and development:
Process development
Product development
Regulatory
Clinical trials
Project management
Total research and development
During the twelve months ended December 31, 2025, the Company recorded $454,000 in R&D expenses. During the twelve months ended December 31, 2024, the Company recorded $112,337.
General and Administrative
December 31,
December 31,
General and administrative expenses:
Payroll and related expenses
Costs for legal, accounting and other professional services
Costs for legal, accounting and other professional services affiliates
Marketing expense
Miscellaneous expenses
Compensation expense to BoD and Management
Compensation expense to consultants
Total general and administrative
The decrease in Payroll and related expenses for the twelve months ended December 31, 2025, were due to the Company’s Officers forfeiting 50% of their salaries for the year.
The Costs for legal, accounting and other professional services for the twelve months ended December 31, 2025 was $204,870 while it was $92,149 for the year ended December 31, 2024. The difference is the additional cost of the change of auditors.
Sales and marketing expense for the twelve months ended December 31, 2025, were $64,500, as compared to $336,125 for the twelve months ended December 31, 2024. The decrease costs are due to reduced stock promotional activities in 2025.
Miscellaneous G&A expenses during the twelve months ended December 31, 2025, and 2024, was $179,594 and $171,334, respectively.
Stock-based compensation mounted to $197,377 for the twelve months ended December 31, 2025, (whereof $156,655 to affiliates). The stock-based compensation for the twelve months ended December 31, 2024, was $634,025, (whereof $349,929 for affiliates).
Other expenses
December 31,
December 31,
Other (expenses):
Gain/Loss of issuance
Change in FV of Derivative
Interest expense
Interest expense affiliate
Debt discount amortization
Debt forgivness
Amortization of IP
Total other income (expenses)
During the twelve months ended December 31, 2025, the Company recorded $186,190 in interest expense (whereof $51,876 to affiliates), $11,544 was amortized from the Company’s IP. The change in fair value of derivative was 216,701 and there was a loan forgiveness of 133,867. During the twelve months ended December 31, 2024, the Company recorded $677,781 in amortization of debt discount while the interest expense was $92,580 (whereof $8,340 to affiliates), $7,950 was amortized from the Company’s IP. The loss on issuance at December 31, 2024, was due to a valuation difference of $ 488,253 leading to a restatement of Additional Paid In Capital (“APIC”) corrected in December 2024, while the fair value of derivative decreased by $133,121.
Non-Controlling Interest
December 31,
December 31,
Net loss attributable to the non-controlling interest
100% of the subsidiary’s shares were acquired in 2024, why the attribution of $13,324 is for the period prior to the acquisition.
Net Loss
December 31,
December 31,
Net loss attributable to Bioxytran
Loss per common share, basic and diluted
Weighted average number of common shares outstanding, basic
The Company generated a net loss for the twelve months ended December 31, 2025, of $2,123,077. In comparison, for the twelve months ended December 31, 2024, the Company generated a net loss of $2,366,681.
CASH-FLOWS
December 31,
December 31,
Net cash used in operating activities
Net cash used in investing activities
Net cash provided by financing activities
Cash, beginning of period
Cash, end of period
Net increase (decrease) in cash
Net cash used in operating activities was an outflow of $526,455 and $381,316 for the twelve months ended December 31, 2025, and 2024, respectively.
In the twelve months ended December 31, 2025, the Company is in the process of filing a patent, and $23,091 was spent in legal fees. In the twelve months ended December 31, 2024 the amount was $28,194.
Cash flows from financing activities were an inflow of $1,054,306 and $388,578 for the twelve months ended December 31, 2025, and 2024, respectively.
The available cash was $509,914 and $5,154 in the end of the twelve months ended December 31, 2025, and 2024, respectively.
LIQUIDITY AND CAPITAL RESOURCES
Current Assets
December 31,
December 31,
Current assets:
Cash
Pre-payment
Total current assets
As of December 31, 2025, our current assets consisted of $513,465, whereof 509,914 in cash and $3,551 in pre-payments at December 31, 2024 we had $5,154 in cash.
Current Liabilities
December 31,
December 31,
Current liabilities:
Accounts payable and accrued expenses
Accounts payable affiliates
Un-issued shares liability
Un-issued shares liability affiliates
Loan from affiliates
Other short-term loans
Derivative liability
Convertible notes payable, net of discount
Total current liabilities
At December 31, 2025, we had total liabilities of $3,249,894, which consisted of $1,497,595 in accounts payable and accrued expenses (of which $647,959 was payable to related parties), $98,278 in un-issued shares (of which $82,006 was payable to related parties), and $805,000 in one convertible loan and $395,668 in a loan from affiliates and $50,000 in other short-term loans, as well as a derivative liability of $403,353. At December 31, 2024, we had total liabilities of $1,930,642, which consisted of $425,544 in accounts payable and accrued expenses (of which $147,286 was payable to related parties), $224,368 in un-issued shares (of which $132,639 was payable to related parties), and $805,000 in one convertible loan and $241,078 in a loan from affiliates and $48,000 in other short-term loans, as well as a derivative liability of $186,652.
Net Working Capital and Accumulated Deficit
December 31,
December 31,
Net working capital
Accumulated deficit
At December 31, 2025, the net working capital was negative $2,736,430 and the accumulated deficit of $21,044,246. Comparatively, on December 31, 2024, we had net working capital of negative $1,925,488 and the accumulated deficit of $18,921,169. We believe that we must raise not less than $3,700,000 to be able to continue our business operations for the next 15 months.
Cash Proceeds from Financing Activities
December 31,
December 31,
Stock transactions
Issued warrants
Short-term loans
Short-term loans from affiliates
Proceeds from note sales
Net cash provided by financing activities
During the twelve months ending December 31, 2025, the Company had raised $1,054,306 in net cash from a combination of debt and equity. During the twelve months ending December 31, 2024, the Company had raised $388,578 in net cash from a combination of debt and equity. The Company is aware that its current cash on hand will not be sufficient to fund its projected operating requirements through the month of July 2026.
Planned Financing Activities
The Company believes it needs to raise approximately $2-3 million in 2026. However, 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.
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.
Contractual Obligations
Convertible Note
December 31,
December 31,
Interest on notes payable
Convertible notes payable
Total
As at December 31, 2025, our contractual obligations include one convertible note with a principal of $805,000, with accrued interest of $277,956. As at December 31, 2024 there was one convertible note with a principal of $805,000, with accrued interest for the note of $143,642.
The Company’s Executive Officers have entered employment contracts and confidentiality, non-disclosure and assignment of invention agreements.
On October 28, 2022, the Bioxytran Board of Directors unanimously approved the modification of/amendment of paragraph 8 to the Officers’ Employment Agreements, referring to termination without cause in case of change of control.
The most substantial changes encompass;
Compensation of three times the annual salary upon the Termination Date, plus 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 your employment termination for 12 months.
Provide outplacement services through one or more outside firms of their choosing up to an aggregate of $50,000.
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.
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.
Warrant Valuation
The Company accounts for warrants issued in connection with financing transactions in accordance with ASC 815 (Derivatives and Hedging) or ASC 505 (Equity), as applicable. Warrants that are freestanding and meet the criteria for equity classification are recorded at fair value on the issuance date and allocated proceeds based on relative fair value when issued with other securities.
For warrants classified as equity, fair value is estimated using the Black-Scholes option-pricing model. Key inputs include the fair value of the underlying common stock, exercise price, expected term, risk-free interest rate, expected volatility, and expected dividend yield. Changes in these assumptions could materially affect the estimated fair value. Warrants classified as liabilities are remeasured at each reporting date, with changes in fair value recognized in earnings.
The Company accounts for warrants issued in connection with equity offerings in accordance with ASC 505-10-30-6, allocating proceeds between common stock and detachable warrants based on their relative fair values.
Business Combinations
The Company applies ASC 805, “Business Combinations”. ASC 805 requires recognition of assets acquired, liabilities assumed, and non-controlling interest in the acquired entity at the acquisition date, measured at their fair values as of that date. This ASC also requires the fair value of acquired in-process research and development (“IPR&D”) to be recorded as intangibles with indefinite lives, contingent consideration to be recorded on the acquisition date, and restructuring and acquisition-related deal costs to be expensed as incurred. Any excess of the fair value of net assets acquired over purchase price and any subsequent changes in estimated contingencies are to be recorded in earnings. In addition, changes in valuation allowance related to acquired deferred tax assets and in acquired income tax position are to be recognized in earnings.
Segment Reporting
The Company has not yet begun generating revenue from its planned principal operations and operates a single reportable segment. The chief operating decision maker is the Company’s chief executive officer who assesses performance based on total expenses, cash-flows, and progress made in the Company’s ongoing development efforts. All of the Company’s long-lived assets are located in the United States.
Recent Accounting Pronouncements
Management does not believe that any recent issued, but not yet effective, accounting standards could have any material effect on the financial statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances.
