AXIM 10-Q

Axim Biotechnologies, Inc. (AXIM)

10-Q 2021-11-22 For: 2021-09-30

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Added on April 09, 2026

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		Page
Condensed Consolidated Balance Sheet as of September 30, 2021 (unaudited) and December 31, 2020		3

Condensed Consolidated Statements of Operations for the three and nine months periods ended September 30, 2021 and 2020 (unaudited)		4

Condensed Consolidated Statement of Changes in Shareholders’ Deficit for the nine months ended September 30, 2021 and 2020 (unaudited)		5-6

Condensed Consolidated Statement of Cash Flows for the nine months ended September 30, 2021 and 2020 (unaudited)		7

Notes to Condensed Consolidated Financial Statements (unaudited).		8

	September 30, 2021			December 31, 2020
	(Unaudited)
ASSETS

Current assets:
Cash	$	338,377		$	457,181
Prepaid expenses		141,542			255,923
Inventory		20,127			-
Total current assets		500,046			713,104

Property and equipment, net of accumulated depreciation		103,997			104,094

Other Assets:
Notes receivable- related party		104,012			103,242
Patents (net of accumulated amortization of $2042 and $0; respectively)		247,958			-
Licenses (net of accumulated amortization of $35,474 and $0; respectively)		4,234,526			-
Goodwill		2,458,233			2,458,233
Intellectual Property and In-Process Research (net of accumulated amortization of $1,296,438 and $0; respectively)		6,503,562			7,800,000
Security deposit		5,000			5,000
Operating lease right-of-use asset		90,630			130,722
Total other assets		13,643,921			10,497,197

TOTAL ASSETS	$	14,247,964		$	11,314,395

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current liabilities:
Accounts payable and accrued liabilities	$	931,819		$	1,073,142
Lease liability obligations		58,540			53,851
Due to shareholder		180			180
Due to first insurance funding		65,880			25,369
Promissory note (including accrued interest of $34,222 and $19,507, respectively) (see note 8)		538,440			343,725
Total current liabilities		1,594,859			1,496,267

Long-term liabilities:
Deferred tax liability		2,340,000			2,340,000
Convertible note payable (including accrued interest of $208,089 and $236,148, respectively) net of unamortized debt discount of $623,095 and $843,673, respectively(see note 11)		1,369,307			1,676,788
Convertible note payable - related party (including accrued interest of $264,037 and $158,648, respectively)		4,264,037			4,158,648
Lease liability obligations		32,090			76,871
Other liabilities of discontinued operations		-			-
Total long-term liabilities		8,005,434			8,252,307

TOTAL LIABILITIES		9,600,293			9,748,574

STOCKHOLDERS’ DEFICIT
Preferred stock, $0.0001 par value, 5,000,000 shares authorized;

Series B Convertible Preferred Stock, $0.0001 par value 500,000 shares designated,
Series C Convertible Preferred Stock, $0.0001 par value 500,000 shares designated,
500,000 and 500,000 shares issued and outstanding, respectively		50			50

Common stock, $0.0001 par value, 300,000,000 shares authorized 135,885,104 and 125,327,579 shares issued and outstanding, respectively		13,589			12,533
Additional paid in capital		50,009,591			43,201,186
Common stock to be issued		4,457,500			201,974
Accumulated deficit		(49,833,059	)		(41,849,922	)
TOTAL STOCKHOLDERS’ DEFICIT		4,647,671			1,565,821

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	14,247,964		$	11,314,395

	For the			For the			For the			For the
	Nine Months Ended			Nine Months Ended			Three Months Ended			Three Months Ended
	September 30,			September 30,			September 30,			September 30,
	2021			2020			2021			2020

Revenues	$	55,651		$	-		$	8,127		$	-

Operating Expenses:

Research and development expenses		216,282			235,431			67,263			109,139
Selling, general and administrative		4,812,790			2,442,420			2,519,527			1,184,267
Amortization of other assets		1,333,954			-			692,858			-
Depreciation		20,119			10,497			6,935			5,372

Total operating expenses from continuing operations		6,383,145			2,688,348			3,286,583			1,298,778

Loss from continuing operations		(6,327,494	)		(2,688,348	)		(3,278,456	)		(1,298,778	)

Other (income) expenses:

Interest income		(769	)		(419	)		(256	)		(260	)
Income from Grants from Government		(279,981	)		(25,899	)		(59,986	)		(25,899	)
Unrealized loss (gain) on marketable securities		-			104,705			-			-
Realized loss (gain) on marketable securities					109,040			-			-
Amortization of note discount		220,578			63,745			17,456			22,313
Loss on Extinguishment of Debt		1,535,264			923,604			-			923,604
Interest expense		175,915			179,344			56,007			73,268
Total other (income) expenses		1,651,007			1,354,120			13,221			993,026

Loss before provision of income tax		(7,978,501	)		(4,042,468	)		(3,291,677	)		(2,291,804	)
Provision for income tax		-			-			-			-

Income (loss) from continuing operations		(7,978,501	)		(4,042,468	)		(3,291,677	)		(2,291,804	)

Income (loss) from discontinued operations		(4,633	)		29,144			-			386,237

NET LOSS	$	(7,983,134	)	$	(4,013,324	)	$	(3,291,677	)	$	(1,905,567	)

NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	(7,983,134	)	$	(4,013,324	)	$	(3,291,677	)	$	(1,905,567	)

Earning per share from continuing operations
Basic	$	(0.06	)	$	(0.04	)	$	(0.02	)	$	(0.02	)
Diluted	$	(0.06	)	$	(0.04	)	$	(0.02	)	$	(0.02	)

Earning per share from discontinued operations
Basic	$	-		$	-		$	-		$	-
Diluted	$	-		$	-		$	-		$	-

Earning per share
Basic	$	(0.06	)	$	(0.04	)	$	(0.02	)	$	(0.02	)
Diluted	$	(0.06	)	$	(0.04	)	$	(0.02	)	$	(0.02	)

Weighted average common shares outstanding - basic and diluted		129,803,948			105,383,791			133,663,974			123,496,143

	Common Stock						Preferred Stock				Series A Convertible Preferred Stock				Series B Convertible Preferred Stock						Series C Convertible Preferred Stock				Common Stock			Additional Paid In			Subscription Amount		Accumulated
	Shares			Amount			Shares		Amount		Shares		Amount		Shares			Amount			Shares		Amount		to be Issued			Capital			Receivable		Deficit			Total
Balance at December 31, 2019		64,854,539		$	6,486			-	$	-		-	$	-		500,000		$	50			500,000	$	50	$	50,000		$	28,623,060		$	-	$	(35,440,042	)	$	(6,760,397	)
Common stock to be issued for Note receivable and True-up adjustment																																					-
Common stock issued against common stock to be issued received in PY		250,000			25																					(50,000	)		49,975								-
Common stock issued for services		662,839			66																								287,434								287,500
Common stock issued under registration statement on Form S-3		3,541,667			355																								962,145								962,500
Subscription price adjustment																													(518,948	)							(518,948	)
Beneficial conversion of 190K convertible note																													190,000								190,000
Common stock issued for acquisition		54,000,000			5,400																								7,500,600								7,506,000
Net loss																																		(2,028,367	)		(2,028,367	)
Balance at March 31, 2020		123,309,045			12,331			-		-		-		-		500,000			50			500,000		50		-			37,094,266			-		(37,468,409	)		(361,712	)
Common stock to be issued																										135,000											135,000
Common stock issued for severance		477,025			48																								149,952								150,000
Common stock issued under registration statement on Form S-3		3,953,125			395																								547,605								548,000
Common stock issued per stock purchase agreement		3,975,383			397																								699,603								700,000
Series B preferred stock retirement																(500,000	)		(50	)																	(50	)
Retired common stock		(18,570,356	)		(1,857	)																															(1,857	)
Subscription price adjustment																													(90,887	)							(90,887	)
Net loss																																		(79,389	)		(79,389	)
Balance at June 30, 2020		113,144,222			11,314			-		-		-		-		-			-			500,000		50		135,000			38,400,539			-		(37,547,798	)		999,105
Common stock issued for services		773,943			77																								378,613								378,690
Common stock issued for severance		314,852			32																								254,968								255,000
Convertible note converted to common stock		5,141,377			514																								50,900								51,414
Common stock issued per stock purchase agreement		5,822,576			582																								1,098,048								1,098,630
Stock based compensation - stock options																													414,839								414,839
Loss on extinguishment of debt																													823,497								823,497
Loss on conversion of convertible note																													171,889								171,889
Net loss																																		(1,905,567	)		(1,905,567	)
Balance at September 30, 2020		125,196,970			12,519			-		-		-		-		-			-			500,000		50		135,000			41,593,293			-		(39,453,365	)		2,287,497

	Common Stock				Preferred Stock				Series A Convertible Preferred Stock				Series B Convertible Preferred Stock				Series C Convertible Preferred Stock				Common Stock to be			Additional Paid In			Subscription Amount			Accumulated
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Issued			Capital			Available			Deficit			Total
Balance at December 31, 2020		125,327,579		12,533		-		-		-		-		-		-		500,000		50		201,974			201,974			43,201,186			(41,849,922	)		1,565,821
Common stock to be issued for Note receivable and True-up adjustment																																		-
Common stock to be issued for purchase of shares																						168,500												168,500
Common stock issued against common stock to be issued received in PY		108,965		11																		(66,974	)		66,963									-
Common stock issued for severance payable of discontinued operation		379,463		38																					224,963									225,001
Common stock issued for cash		1,712,500		171																					433,829									434,000
Stock based compensation - stock options																									99,742									99,742
Net loss																															(864,536	)		(864,536	)
Balance at March 31, 2021		127,528,507		12,753		-		-		-		-		-		-		500,000		50		303,500			44,026,683			-			(42,714,458	)		1,628,528
Common stock issued for services		1,114,351		111																		(16,000	)		792,389									776,500
Common stock issued for cash		1,234,113		123																		(152,500	)		402,376									249,999
Convertible note #5 and accrued interest converted to common stock		2,647,464		265																					582,442									582,707
S-1 agreement subscription receivable		500,000		50																					332,450			(332,500	)					-
Stock based compensation - stock options		-		-																					91,526									91,526
Loss on extinguishment of debt																									1,535,264									1,535,264
Net loss																															(3,826,924	)		(3,826,924	)
Balance at June 30, 2021		133,024,435		13,302		-		-		-		-		-		-		500,000		50		135,000			47,763,130			(332,500	)		(46,541,382	)		1,037,600
Common stock to be issued																						4,322,500												4,322,500
Common stock issued for services		1,415,554		142																					1,111,758									1,111,900
Common stock issued for cash		1,445,115		145																					476,581									476,726
Subscription receivable share price adjustment																									(103,688	)		103,688						-
Subscription price receivable																												228,812						228,812
Stock based compensation - stock options		-		-																					761,810									761,810
Net loss																															(3,291,677	)		(3,291,677	)
Balance at September 30, 2021		135,885,104	$	13,589		-	$	-		-	$	-		-	$	-		500,000	$	50	$	4,457,500		$	50,009,591		$	-		$	(49,833,059	)	$	4,647,671

	For the			For the
	Nine Months Ended			Nine Months Ended
	September 30, 2021			September 30, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(7,983,134	)	$	(4,013,324	)
Less: (Loss) gain from discontinued operations		(4,633	)		29,144
Loss from continuing operations		(7,978,501	)		(4,042,468	)

Adjustments to reconcile net loss to cash provided by (used in) operating activities:
Depreciation		20,119			10,496
Stock based compensation		953,076			779,029
Amortization of prepaid insurance/expense		296,542			146,583
Amortization of debt discount		220,578			63,745
Common stock issued for services		1,904,400			-
Amortization(impairment) of Intangible Assets		1,333,954			-
Loss on extinguishment of debt		1,535,264			923,604
Unrealized (gain) loss on marketable securities		-			104,705
Realized (gain) loss on marketable securities		-			109,040

Changes in operating assets & liabilities:
Increase in interest receivable		(770	)		(419	)
Increase in prepaid expenses		(182,161	)		(94,779	)
Increase (decrease) in inventory		(20,127	)		-
Increase (decrease) in security deposit					(255	)
Increase in accounts payable and accrued expenses		228,426			234,364
Net cash provided by (used in) operating activities from continuing operations		(1,689,200	)		(1,766,355	)
Net cash provided by (used in) operating activities from discontinued operations		(4,633	)		(834,429	)
Net cash provided by (used in) operating activities		(1,693,833	)		(2,600,784	)

CASH FLOW FROM INVESTING ACTIVITIES:
Cash acquired in acquisition		-			79,814
Acquisition of patents		(10,000	)		-
Increase (decrease) in property and equipment		(20,022	)		(86,169	)
Net cash provided by (used in) investing activities from continuing operations		(30,022	)		(6,355	)
Net cash provided by (used in) investing activities from discontinued operations		-			-
Net cash provided by (used in) investing activities		(30,022	)		(6,355	)

CASH FLOW FROM FINANCING ACTIVITIES:
Common stock issued under registration statement on Form S-3		-			1,510,500
Common stock issued under SPA		1,542,040			1,798,630
Borrowed from First Insurance Funding		40,511			8,618
Proceeds from common stock to be issued per stock purchase agreement		52,500			-
Repayment of Promissory note		(30,000	)		-
Net cash provided by (used in) continuing financing activities		1,605,051			3,317,748
Net cash provided by (used in) discontinued financing activities		-			(65,000	)
Net cash provided by (used in) financing activities		1,605,051			3,252,748

Net (decrease) increase in cash and cash equivalents		(118,804	)		645,609
Cash and cash equivalents at beginning of period		457,181			511,630
Cash and cash equivalents at end of period	$	338,377		$	1,157,239
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
CASH PAID DURING THE PERIOD FOR:
Interest	$	-		$	-
Income taxes - net of tax refund	$	-		$	-
NON-CASH INVESTING AND FINANCING ACTIVITIES
Common stock issued against common stock to be issued	$	66,974		$	50,000
Account receivable against conversion of debt and interest	$	-		$	75,074
Common stock issued for services recorded as prepaid expense	$	-		$	302,000
Common stock issued for severance	$	225,000		$	450,000
Shares issued for acquisition of Sapphire Biotechnology	$	-		$	7,506,000
Deferred tax liability accounted for as a result of Sapphire Biotech Acquisition	$	-		$	1,845,000
Assets acquired and liability assumed for as a result of Sapphire Biotech Acquisition	$	-			525,365
BCF related to discount on conversion	$	-		$	190,000
Common stock issued for note receivable	$	-		$	135,000
Adoption of lease obligation and ROU asset	$	-		$	164,910
Common stock retired	$	-		$	1,857
Subscription price adjustment	$	-		$	609,835
Convertible note converted to common stock	$	-		$	51,414
Assets acquired as a result of Sapphire Biotech Acquisition	$	-		$	33,319
Acquisition of patents against Notes payable and accounts payable	$	240,000			-
Common stock to be issued for acquisition	$	4,270,000			-

Consideration:
Cash and cash equivalents	$	79,814
Property and equipment, net		20,533
In process Research & Development (IPRD)		7,800,000
Goodwill		2,458,233
Security deposit		12,785
Total asset acquired	$	10,371,365

Accrued expenses and other current liabilities	$	5,767
Deferred taxes liability		2,340,000
Notes Payable including convertible and discount on conversion		519,598
Total liabilities assumed	$	2,865,365
Net assets acquired	$	7,506,000

	September 30,		December 31,
	2021		2020
Equipment	$	154,809	$	134,788
Less: accumulated depreciation	$	50,812	$	30,694
	$	103,997	$	104,094

		2021				2022				2023				2024
Amortization expense		$	2,088,000			$	2,990,000			$	2,990,000			$	1,040,000

	Options Outstanding			Weighted Average Exercise Price
Outstanding at December 31, 2019		2,000,000		$	0.75
Granted		8,300,000			0.27
Exercised		-			-
Expired or canceled		-			-
Outstanding at December 31, 2020		10,300,000			0.36
Granted		2,960,715			0.60
Exercised		-			-
Expired or canceled		(2,000,000	)		0.75
Outstanding at September 30, 2021		11,260,715		$	0.36

	Number of Warrants		Weighted Average Exercise Price
Outstanding at December 31, 2020		-	$	-
Granted		2,850,000		0.71
Forfeited/Cancelled		-		-
Exercised		-		-
Outstanding at September 30, 2021		2,805,000	$	0.71

Other current assets	$	5,000
Total current assets	$	510,017
Intangible assets, net of amortization	$	47,375
Total asset	$	562,392

Notes payable	$	880,000
Accounts payable and accrued expenses	$	210,640
Due to Canchew	$	1,526,603
Stock retired	$	1,857
Total liabilities and equity	$	2,619,100

The gain on sale of assets was reported during the period was determined as follows:
Loss on sale of assets	$	562,392
Gain on sale of liabilities	$	2,619,100

Net gain from sale of assets and liabilities	$	2,056,708

	September 30, 2021			September 30, 2020
Net sales	$	-		$	5,097
Total expenses	$	(4,633	)	$	(1,935,278	)
Gain from sale of asset and liability	$	-		$	2,046,708
Other (loss) income	$	-		$	(87,383	)
(Loss) income from discontinued operations	$	(4,633	)	$	29,144

	September 30, 2021			September 30, 2020
Net (loss) income from discontinued operations	$	(4,633	)	$	29,144

Adjustment of non-cash activities		-			(1,551,166	)
Decrease in accounts receivable		-			315,843
Increase in inventory		-			(22,203	)
Increase in accounts payable and accrued expenses		-			393,953
Net cash provided by (used in) operating activities	$	(4,633	)	$	(834,429	)

Net cash provided by (used in) investing activities	$	-		$	-
Net cash provided by (used in) financing activities	$	-		$	(65,000	)

Right-of-use assets	$	90,630

Lease liability obligations, current	$	58,540
Lease liability obligations, noncurrent		32,090
Total lease liability obligations	$	90,630

Weighted-average remaining lease term	1.58 years

Weighted-average discount rate		6	%

Remainder of 2021	$	14,562
2022		59,416
2023		20,000
Total minimum payments		93,978
Less: amount representing interest		(3,348	)
Total	$	90,630

	Nine months		Nine months
	Period Ended		Period Ended		$ Change			% Change
	30-Sep-21		30-Sep-20

Research and development	$	216,282	$	235,431	$	(19,149	)		-8.13	%
Depreciation		20,119		10,497		9,622			91.66	%
Advertising and promotions		824,425		432,810		391,615			90.48	%
Travel and entertainment expenses		45,755		14,237		31,518			221.38	%
Office/Other expenses		105,578		268,253		(162,675	)		-60.64	%
Impairment and amortization		1,333,954		3,158		1,330,796			42140.47	%
Licenses and permits		30,098		59,619		(29,521	)		-49.52	%
Legal and other fees		1,280,207		353,986		926,221			261.65	%
Offices salary and wages		817,657		315,000		502,657			159.57	%
Consulting fees		496,735		320,937		175,798			54.78	%
Compensation costs		953,076		414,839		538,237			129.75	%
Audit fees		119,671		99,203		20,468			20.63	%
Filing fees		8,489		9,489		(1,000	)		-10.54	%
Insurance expense		71,099		90,889		(19,790	)		-21.77	%
Directors fees		60,000		60,000		-			0.00	%
Total Operating expenses from continuing operations	$	6,383,145	$	2,688,348	$	3,694,797			137.44	%

	Three months		Three months
	Period Ended		Period Ended		$ Change			% Change
	30-Sep-21		30-Sep-20

Research and development	$	67,263	$	109,139	$	(41,876	)		-38.37	%
Depreciation		6,935		5,372		1,563			29.10	%
Advertising and promotions		151,142		70,324		80,818			114.92	%
Travel and entertainment expenses		16,722		195		16,527			8475.52	%
Office/Other expenses		34,634		97,419		(62,785	)		-64.45	%
Impairment and amortization		692,858		-		692,858			100.00	%
Licenses and permits		10,625		5,348		5,277			98.68	%
Legal and other fees		824,823		117,392		707,431			602.62	%
Offices salary and wages		593,059		105,000		488,059			464.82	%
Consulting fees		55,870		130,384		(74,514	)		-57.15	%
Compensation costs		761,810		587,392		174,418			100.00	%
Audit fees		23,500		17,500		6,000			34.29	%
Filing fees		2,870		4,590		(1,720	)		-37.47	%
Insurance expense		24,472		28,723		(4,251	)		-14.80	%
Directors fees		20,000		20,000		-			0.00	%
Operating expenses from continuing operations	$	3,286,583	$	1,298,778	$	1,987,805			153.05	%

Exhibits	Exhibit #	Incorporated by Reference (Form Type)	Filing Date	Filed with This Report
Articles of Incorporation, as filed with the Nevada Secretary of State on November 18, 2010.	3.1	10-Q	11/14/2014

Certificate of Amendment, as filed with the Nevada Secretary of State on July 24, 2014.	3.2	10-Q	11/14/2014

Amended and Restated (As of August 17, 2016) Bylaws of AXIM Biotechnologies, Inc.	3.3	10-Q	8/22/2016

Certificate of Designation of Series B Preferred Stock	3.4	10-Q	8/22/2016

Certificate of Designation of Series C Preferred Stock	3.5	10-Q	8/22/2016

Amended and Restated Employment Agreement effective September 1, 2016, by and between AXIM International, Inc. and Dr. George E. Anastassov	10.1	10-Q	11/21/2016

Amended and Restated Employment Agreement effective September 1, 2016, by and between AXIM International, Inc. and Lekhram Changoer	10.2	10Q	11/21/2016

Employment Agreement effective September 1, 2016, by and between AXIM International, Inc. and Dr. Philip A. Van Damme.	10.3	10-Q	11/21/2016

Code of Business Conduct and Ethics	14.1	10-Q	11/20/2017

Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	31.1			X

Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	31.2			X

Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	32.1			X

Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	32.2			X

Nominating and Governance Committee Charter	99.1	10-Q	11/20/2017

Compensation Committee Charter	99.2	10-Q	11/20/2017

Audit Committee Charter	99.3	10-Q	11/20/2017

XBRL Instance Document	101.INS			X

XBRL Taxonomy Extension Schema Document	101.SCH			X

XBRL Taxonomy Extension Calculation Linkbase Document	101.CAL			X

XBRL Taxonomy Extension Definition Linkbase Document	101.DEF			X

XBRL Taxonomy Extension Label Linkbase Document	101.LAB			X

XBRL Taxonomy Extension Presentation Linkbase Document	101.PRE			X

	AXIM BIOTECHNOLOGIES, INC.

Dated: November 22, 2021	By:	/s/ John W. Huemoeller II
		John W. Huemoeller II
		President and Director
		Principal Executive Officer

Dated: November 22, 2021	By:	/s/ Robert Malasek
		Robert Malasek
		Principal Financial Officer