v3.26.1
BUSINESS COMBINATIONS
 12 Months Ended
Dec. 31, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
BUSINESS COMBINATIONS

NOTE 6 – BUSINESS COMBINATIONS

 

The Company accounts for acquisitions in accordance with ASC 805, Business Combinations. The guidance requires consideration given, including contingent consideration, assets acquired, liabilities assumed and non-controlling interests to be valued at their fair market values at the acquisition date. The guidance further provides that: (1) in-process research and development will be recorded at fair value as an indefinite-lived intangible asset; (2) acquisition costs will generally be expensed as incurred, (3) restructuring costs associated with a business combination will generally be expensed subsequent to the acquisition date; and (4) changes in deferred tax asset valuation allowances and income tax uncertainties after the acquisition date generally will affect income tax expense (benefit). ASC 805 requires that any excess of the purchase price over the fair value of assets acquired, including identifiable intangibles and liabilities assumed, be recognized as goodwill.

 

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.

 

A board-certified Appraiser assured that the valuation engagement was performed in conformance in accordance with the ASA Business Valuation Standards of the American Society of Appraisers in conjunction with the Uniform Standards of Professional Appraisal Practice (USPAP) promulgated by the Appraisal Foundation and the Principles of Appraisal Practice and Code of Ethics of the American Society of Appraisers.

 

 

The following table summarizes the fair market value of assets acquired and liabilities assumed as of the date of the valuation and subsequent purchase agreement:

 

   October 1, 2024 
License Agreement for 33% of the value in a single indication (Covid-19)  $8,190,000 
Stock in Bioxytran (14,085,410 Preferred shares)   7,660,000 
      
Assets included in the acquisition, but outside of the scope of valuation:     
Patent (WO2022099052A1) including free use of PHGG based compounds for therapeutical use in Covid-19: including, but not limited to Clinical Trials, Manufacturing and Distribution.   — 
Patent (WO2023178228A1) including free use of PHGG based compounds for therapeutical use in 60+ viral infections: including, but not limited to Clinical Trials, Manufacturing and Distribution.   — 
      
Bank assets, Debt and Expenses Assumed   (10,282)
Official valuation  $15,848,987 

 

As the license agreement only symbolizes 33% of the Covid-19 patent value, it can be argued that the fair value of this patent would be at least $24.57 million, but also that the patent for 60+ viral infections would substantially exceed this value.

 

   October 25, 2024 
Consideration Paid     
Common Stock – 3,389,169 shares @ $0.092  $289,774 
Preferred Stock – 28,467,564 shares @ $0.428   12,169,884 
Assumed value  $12,459,658 

 

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.

 

In an exception to the standard rule, as NDPD is considered a closely held entity considered the joint ownership by the Company’s officers ASC 805-50 is applied and all assets will have to be brough over at their carrying value which for the license and patents were $0. As for the shares they are eliminated against Additional Paid-In Capital (APIC) in the acquiring company.

 

Accounting wise the transaction value of the acquisition is result in the following transactions:

 

   October 25, 2024 
Issuance Common Stock – 3,389,169 shares @ $0.091 APIC  $289,774 
Issuance Preferred Stock – 28,467,564 shares @ $0.427 APIC   12,169,884 
      
Bank   (396)
Expenses   (1,828)
Assumed Loan to Affiliate   12,506 
      
Subsidiary integration (APIC)  $(12,469,940)

 

Thus, due to ASC 805-50 the $12,469,940 that would normally present as an asset, is instead eliminated against equity.