UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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Item 1.01 Entry into a Material Definitive Agreement
Acquisition of NDPD Pharma, Inc.
Overview
On October 25, 2024, the Company’s Board of Directors unanimously voted to acquire 100% of the issued and outstanding shares of Common Stock of NDPD Pharma, Inc. (“NDPD”). NDPD, of which the Company’s officers have beneficial ownership, had its assets valued by an independent Accredited Senior Appraiser (“ASA”) in Business Valuations. NDPD’s shareholders were offered a stock purchase agreement, allowing them to sell 100% of their Common Stock at the appraised value, to be paid by issuance of (i) 3,389,169 shares of Bioxytran Common Stock to non-affiliates, and (ii) 28,467,564 shares of Bioxytran Preferred Stock, to affiliates. The shares were valued using the Volume-Weighted Average Price (“VWAP”) of the Company’s Common shares as quoted on OTC Markets as of the last trading day prior to October 1, 2024, (the “Valuation Date”); the Preferred shares use the same price multiplied by 5, which is the conversion rate of the Preferred shares into Bioxytran Common shares. The offer was accepted by all NDPD shareholders. The Company claims an exemption from the registration requirements of the Securities Act of 1933 (the “Securities Act”) under Rule 145 promulgated under the Securities Act.
NDPD 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 shares of Common Stock with a par value of $0.0001, and 5,000,000 shares of Preferred Stock with a par value of $0.0001. At the time of the acquisition NDPD had 15,000,000 shares of Common Stock outstanding.
At the time of acquisition, NDPD held 14,085,410 shares of Bioxytran Preferred Stock with a fair market value of $7,660,000 and a book value of $4,007,572. These shares were subsequently canceled and returned to treasury. NDPD also held the patents for ProLectin-M (“PLM”), a compound based on Partially Hydrolyzed Guar Gum (“PHGG”).
| WO2022099052A1 | Polysaccharides for Use in Treating Sars-Cov-2 Infections | |
| WO2023178228A1 | Lectin-Binding Carbohydrates for Treating Viral Infections |
The right of use, limited to the COVID-19 indication, for the patents were transferred to Bioxytran as per the License Agreement between Pharmalectin, Inc. and NDPD Pharma, Inc. dated May 2, 2021 (the “License Agreement”), wherein NDPD was to receive a 33% royalty. The value of the License Agreement was appraised at $8,190,000. However, in-vitro studies and limited human trials have shown that PLM has a much broader application than initially anticipated, with promising results across multiple indications, including RSV, H1N1, EBV, shingles, and conjunctivitis, among others, suggesting the value of the patents could be significantly higher.
The following table summarizes the fair market value of assets acquired and liabilities assumed as of the acquisition date:
| October 25, 2024 | ||||
| Consideration Paid | ||||
| Common Stock – 3,389,169 shares @ $0.109 | $ | 368,623 | ||
| Preferred Stock – 28,467,564 shares @ $0.543 | 15,481,377 | |||
| Preferred Stock returned to Treasury - 14,085,410 shares | (4,007,572 | ) | ||
| Assumed value | $ | 11,842,428 | ||
| Assets acquired and liabilities assumed: | ||||
| Cash | $ | 396 | ||
| Assumed Expenses | 1,828 | |||
| Intangible assets – amortized over 17 years | 8,190,000 | |||
| Goodwill | 5,382,610 | |||
| Deferred taxes (21%) | (1719,900 | ) | ||
| Loan from affiliate | (12,506 | ) | ||
| $ | 11,842,428 | |||
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.
Intangible assets relate to the two patents WO2022099052A1 and WO2023178228A1 and to the License Agreement. The acquired definite-lived intangible assets are being amortized over a weighted-average estimated useful life, currently eighteen years, on a straight-line basis. The fair value of the intangible assets was determined by using the “income approach,” which is a valuation technique that provides the fair value of an asset based on market participant expectations of the cash flows an asset would generate over its remaining useful life. Some of the significant assumptions inherent in the development of these asset valuations include the estimated net cash flows for each year for each asset or product (including revenues and EBITDA), the appropriate discount rate necessary to measure the risk inherent in each future cash flow stream, the life cycle of each asset, the potential regulatory and commercial success risk, and competitive trends impacting the asset and each cash flow stream, as well as other factors.
Goodwill, which is derived from the enhanced scientific expertise, and our ability to provide broader service solutions through a comprehensive portfolio, is recorded based on the amount by which the purchase price exceeds the fair value of the net assets acquired and is not deductible for tax purposes. In accordance with ASC 805-740, the Company established a deferred tax liability with an offset to goodwill in connection with the accounting for the opening balance sheet of the NDPD acquisition as a result of book-to-tax differences primarily related to the intangible assets. Goodwill is not amortized but ASC 350 require instead that companies test goodwill for impairment at least annually. Goodwill impairment testing involves comparing the carrying amount of goodwill (the amount at which it is recorded on the balance sheet) to its fair value. If the carrying amount exceeds the fair value, an impairment loss is recognized.
Item 7.01 Regulation FD Disclosure.
On, or around, October 25, 2024, Ola Soderquist, Chief Financial Officer of Bioxytran, Inc. (the “Company”), will enter into a written trading plan (the “10b5-1 Plan”), in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Company’s insider trading policy, to sell 500,000 shares of Common Stock. Under the 10b5-1 Plan, the shares will be sold, in one or more transactions, if the market price of the Common Stock reaches or exceeds certain minimum price thresholds specified in the 10b5-1 Plan. The 10b5-1 Plan is scheduled to terminate on March 31, 2025 (or sooner under certain circumstances including a sale of all 500,000 shares under the plan). The transactions executed in accordance with the 10b5-1 Plan will be disclosed publicly through one or more Form 4 filings with the Securities and Exchange Commission.
The information furnished pursuant to this Item 7.01 shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
Exhibit Number |
Description | |
| 10.85 | * | Stock Sale and Purchase Agreement of NDPD Pharma, dated October 25, 2024 |
| 10.86 | * | Extract from Valuation Report of NDPD Pharma, dated October 1, 2024 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
| * | Filed as an exhibit hereto. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| BIOXYTRAN, INC. | ||
| By: | /s/ David Platt, Ph.D. | |
| David Platt, Ph.D., its Chief Executive Officer | ||
| Date October 28, 2024 | ||