Axim Biotechnologies, Inc 10-K for FY2022

Axim Biotechnologies, Inc. (AXIM)

10-K 2023-04-17 For: 2022-12-31

Added on April 09, 2026

About this 10-K

Axim Biotechnologies, Inc filed this 10-K on April 17, 2023, covering the fiscal year ended December 31, 2022 (FY2022).

Headline figures

Fiscal year ended December 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $8875; down 85.3% from $60.46K a year earlier
Net loss: $6.24M; compared with a net loss of $16.03M a year earlier
Diluted EPS: $0.04; down 66.7% from $0.12 a year earlier

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Nevada		27-4029386
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated Filer	☐	Smaller reporting company	☒
Emerging growth Company	☐

		PAGE
	PART I

Item 1.	BUSINESS	4
Item 1A.	RISK FACTORS	25
Item 1B.	UNRESOLVED STAFF COMMENTS	53
Item 2.	PROPERTIES	53
Item 3.	LEGAL PROCEEDINGS	53
Item 4.	MINE SAFETY DISCLOSURES	53

	PART II

Item 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	54
Item 6.	[RESERVED]	55
Item 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	55
Item 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	61
Item 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	61
Item 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	61
Item 9A.	CONTROLS AND PROCEDURES	61
Item 9B.	OTHER INFORMATION	63
Item 9C.	DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS	63

	PART III

Item 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	64
Item 11.	EXECUTIVE COMPENSATION	71
Item 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	71
Item 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	73
Item 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	73

	PART IV

Item 15.	EXHIBIT AND FINANCIAL STATEMENT SCHEDULES	74
	SIGNATURES	76

	•	Contact lens fitting – approximately 45 million people wear contact lens in the US alone (2021).

	•	LASIK surgery- approximately 718,000 (2020).

	•	Cataract surgery with lens exchange - approximately 3.8 million (2018).

Biomarker	Company	Type	CLIA status

Lactoferrin	AXIM	(quantitative analysis)	moderate complexity
IgE	AXIM	(quantitative analysis)	moderate complexity
MMP9	Quidel	(qualitative only)	waived
Osmolarity	TearLab	(quantitative analysis)	waived
Ocular Adenovirus	Quidel	(qualitative only)	waived

	•	AXIM’s strategic focus is on commercializing FDA-cleared Dry Eye Disease (DED) diagnostic system

	•	Plans to address largely underserved DED diagnosis market with patent pending tear collection method and approved tests, supported by world-class DED management team

	•	Supply agreements in place to fulfill demand for DED readers and test strips, creating large revenue opportunity

	•	Company places emphasis on generating positive cash flow through DED program

	•	Low Lactoferrin levels directly correlate to DED caused by aqueous deficiency

	•	The severity of DED can be determined by the Lactoferrin level

	•	Low Lactoferrin levels may represent increased surgical risk or contact lens intolerance

	•	Changes in Lactoferrin levels may show the efficacy of the prescribed treatment

	•	The presence of IgE indicates the diagnosis of allergic conjunctivitis

	•	Levels of IgE increase with the severity of the allergic response

	•	IgE testing can help differentiate allergic conjunctivitis from dry eye syndrome

	•	Allergic conjunctivitis is a contraindication for LASIK and other surgical procedures

	•	Successfully complete our clinical trials to prove the accuracy and ease of use to achieve CLIA waivers

	•	Generate positive, peer-reviewed reviews by eye care professionals as to the performance and ease of use

	•	Evaluate other next-generation DED treatments that may include oral or topical therapeutics. We have one in our cross-sights and, when ready, plan to commence clinical research with a leading university to prove safety and efficacy. If it works out as expected, we plan to pursue a license or business combination [IS THIS STILL ACCURATE?]

	•	Penetrate the ophthalmologist and optometrist marketplace through our partner with our industry-changing DED diagnostic technology

	•	Identify potential strategic acquisition targets to accelerate our DED diagnostic and therapeutic applications and capabilities expansion

	•	Grow our DED business to reach a positive cash flow run rate by the end of 2023 and build its profitability beyond

Category	Issued Patent	Provisional Patent Applications

QSOX-1	1	11
SARS-CoV-2		13
EYE Health		2
EIS Platform		6

	☐	Even though the Axim Eye System has received all regulatory approvals in the United States, it may never be successfully commercialized.
	☐	We have incurred significant losses since inception and anticipate that we will incur continued losses for the foreseeable future.

	☐	We will require substantial additional funding, which may not be available to us on acceptable terms, if at all. If we fail to raise the necessary additional capital, we may be unable to complete the development and commercialization of our product candidates or continue our development programs.
	☐	Economic uncertainty and capital markets disruption, which has been significantly impacted by geopolitical instability due to the ongoing military conflict between Russia and Ukraine, could harm our financial condition and results of operations.
	☐	We may be adversely affected by the effects of inflation.
	☐	We will face challenges in bringing Axim Eye System to market in the United States and may not succeed in executing our business plan.
	☐	Our near-term success is highly dependent on the success of the Axim Eye System, and we cannot be certain that it will be successfully commercialized in the United States.
	☐	Our business is subject to health care industry and government cost-containment measures that could result in reduced sales of our Axim Eye System.
	☐	If we are subject to regulatory enforcement action as a result of our failure to comply with regulatory requirements, our commercial operations would be harmed.
	☐	If we are unable to fully comply with federal and state “fraud and abuse laws,” we could face substantial penalties, which may adversely affect our business, financial condition and results of operations.
	☐	If we fail to comply with contractual obligations and applicable laws and regulations governing the handling of patient identifiable medical information, we could suffer material losses or be adversely affected by exposure to material penalties and liabilities.
	☐	We may face future product liability claims.
	☐	If we do not introduce new commercially successful products in a timely manner, our products may become obsolete over time, customers may not buy our products and our revenue and profitability may decline.
	☐	We rely on a limited number of suppliers of each of the key components of the Axim Eye System and are vulnerable to fluctuations in the availability and price of our suppliers’ products and services.
	☐	We face intense competition, and our failure to compete effectively could have a material adverse effect on our results of operations.
	☐	The regulatory approval processes of the FDA, and comparable foreign authorities are lengthy, time consuming and unpredictable, and if we are ultimately unable to obtain regulatory approval for our product candidates, our business will be substantially harmed.
	☐	We may expend our limited resources to pursue a particular product, product candidate or indication, and may fail to capitalize on products, product candidates or indications that may be more profitable or for which there is a greater likelihood of success.
	☐	Our product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit the commercial profile of an approved label, or result in significant negative consequences following marketing approval, if any.
	☐	We rely on third parties to conduct our preclinical and clinical trials. If these third parties do not successfully perform their contractual legal and regulatory duties or meet expected deadlines, we may not be able to obtain regulatory approval for or commercialize our product candidates and our business could be substantially harmed.
	☐	We may not be able to manufacture our products or product candidates in commercial quantities, which would prevent us from commercializing our products and product candidates.

	☐	Our failure to successfully discover, acquire, develop and market additional product candidates or approved products would impair our ability to grow.
	☐	Our commercial success depends upon us attaining significant market acceptance of our product candidates, if approved for sale, among ophthalmologists, physicians, patients, healthcare payors and major operators of cancer and other clinics.
	☐	Reimbursement may be limited or unavailable in certain market segments for our product candidates, which could make it difficult for us to sell our products profitably.
	☐	Our collaborations depend upon the efforts of third parties to fund and manage the development of many of our potential product candidates, and failure of those third-party collaborators to assist or share in the costs of product development could materially harm our business, financial condition and results of operations.

	☐	If we are unable to retain and recruit qualified scientists and advisors, or if any of our key executives, key employees or key consultants discontinues his or her employment or consulting relationship with us, it may delay our development efforts or otherwise harm our business. We will need to increase the size of our company and may not effectively manage our growth.
	☐	We may become involved in the future, in disputes and other legal or regulatory proceedings that, if adversely decided or settled, could materially and adversely affect our business, financial condition and results of operations.
	☐	We have acquired, and may in the future acquire, assets, businesses and technologies as part of our business strategy. If we acquire companies or technologies in the future, they could prove difficult to integrate, disrupt our business, dilute stockholder value, and adversely affect our operating results and the value of our common stock.
	☐	Any acquisitions we make could disrupt our business and seriously harm our financial condition.
	☐	Our long-term success depends on intellectual property protection; if our intellectual property rights are invalidated or circumvented, our business will be adversely affected.
	☐	If any of our trade secrets, know-how or other proprietary information is disclosed, the value of our trade secrets, know-how and other proprietary rights would be significantly impaired and our business and competitive position would suffer.
	☐	Claims that we infringe upon the rights of third parties may give rise to costly and lengthy litigation, and we could be prevented from selling products, forced to pay damages, and defend against litigation.
	☐	If we breach any of the agreements under which we license commercialization rights to our product candidates from third parties, we could lose license rights that are important to our business.
	☐	From time to time we may need to license patents, intellectual property and proprietary technologies from third parties, which may be difficult or expensive to obtain.
	☐	The market price of our common stock may fluctuate significantly, and investors in our common stock may lose all or a part of their investment.
	☐	Insiders have substantial influence over us and could delay or prevent a change in corporate control.
	☐	We have never paid cash dividends and do not expect to pay cash dividends in the foreseeable future. Any return on investment may be limited to the value of our common stock.
	☐	We have issued preferred stock with designations, rights and preferences that are superior to that of our common stock, and we may issue additional shares of preferred stock in the future.

	☐	the commercial acceptance of our two FDA cleared diagnostic tests for dye eye disease
	☐	the need to preform clinical studies for FDA clearance of our new MMP-9 test
	☐	the number of product candidates we pursue;
	☐	the time and costs involved in obtaining regulatory approvals;
	☐	the costs involved in filing and prosecuting patent applications and enforcing or defending patent claims;
	☐	our plans to establish sales, marketing and/or manufacturing capabilities;
	☐	the effect of competing technological and market developments;
	☐	the terms and timing of any collaborative, licensing and other arrangements that we may establish;
	☐	general market conditions for offerings from biopharmaceutical companies;
	☐	our ability to establish, enforce and maintain selected strategic alliances and activities required for product commercialization;
	☐	our obligations under our debt arrangements;
	☐	the time and costs involved in defending and enforcing our rights in various litigation matters;
	☐	the effect of the COVID-19 pandemic; and
	☐	our revenues, if any, from successful development and commercialization of our product candidates.

	☐	adverse publicity, warning letters, fines, injunctions, consent decrees and civil penalties;
	☐	repair, replacement, refunds, recall or seizure of our product;
	☐	operating restrictions or partial suspension or total shutdown of production;
	☐	delay or refusal of our requests for 510(k) clearance or premarket approval of new products or of new intended uses or modifications to our existing product;
	☐	refusal to grant export approval for our products;
	☐	withdrawing 510(k) clearances, CLIA waiver or premarket approvals that have already been granted; and
	☐	criminal prosecution.

	☐	evolving customer needs;
	☐	the introduction of new products and technologies; and
	☐	evolving industry standards.

	☐	properly identify and anticipate customer needs;
	☐	commercialize new products in a cost-effective and timely manner;
	☐	manufacture and deliver products in sufficient volumes on time;
	☐	obtain and maintain regulatory approval for such new products;
	☐	differentiate our offerings from competitors’ offerings;
	☐	achieve positive clinical outcomes; and
	☐	provide adequate medical and/or consumer education relating to new products.

	☐	seeking and obtaining intellectual property and/or proprietary rights to our technology and/or the technology of others;
	☐	identifying, developing, manufacturing and commercializing product candidates;
	☐	entering into successful licensing and other arrangements with product development partners;
	☐	participating in regulatory approval processes, to the extent required;
	☐	formulating and manufacturing products; and
	☐	conducting sales and marketing activities.

	☐	disruption of our business and diversion of our management’s time and attention to develop acquired products or technologies;
	☐	incurrence of substantial debt, dilutive issuances of securities or depletion of cash to pay for acquisitions;
	☐	higher than expected acquisition and integration costs;
	☐	difficulty in combining the operations and personnel of any acquired businesses with our operations and personnel;
	☐	increased amortization expenses;
	☐	impairment of relationships with key suppliers or customers of any acquired businesses due to changes in management and ownership;
	☐	impairment of our ability to obtain intellectual property rights or rights to commercialize additional product candidates, or increased cost to obtain such rights;
	☐	inability to motivate key employees of any acquired businesses; and
	☐	assumption of known and unknown liabilities.

	☐	competition in seeking appropriate collaborators;
	☐	a reduced number of potential collaborators due to recent business combinations in the pharmaceutical industry;
	☐	inability to negotiate collaborations on acceptable terms;
	☐	inability to negotiate collaborations on a timely basis;
	☐	a potential collaborator’s evaluation of our product or product candidates;
	☐	a potential collaborator’s resources and expertise; and
	☐	restrictions due to an existing collaboration agreement.

	☐	Preclinical or clinical trials may produce negative or inconclusive results, which may require additional preclinical testing, additional clinical trials or the abandonment of projects that we, our licensees or our collaborators expect to be promising. For example, promising animal data may be obtained about the anticipated efficacy of a product candidate and then human tests may not result in such an effect. In addition, unexpected safety concerns may be encountered that would require further testing even if the product candidate produced an otherwise favorable response in human subjects.
	☐	Initial clinical results may not be supported by further or more extensive clinical trials. For example, we or a licensee may obtain data that suggest a desirable response from a product candidate in a small human study, but when tests are conducted on larger numbers of people, the same extent of response may not occur. If the response generated by a product candidate is too low or occurs in too few treated individuals, then the product candidate will have no commercial value.
	☐	Enrollment in any of our or any of our licensees’ or collaborators’ clinical trials may be slower than projected, resulting in significant delays. The cost of conducting a clinical trial increases as the time required to enroll adequate numbers of human subjects to obtain meaningful results increases. Enrollment in a clinical trial can be a slower-than-anticipated process because of competition from other clinical trials, because the study is not of interest to qualified subjects, or because the stringency of requirements for enrollment limits the number of people who are eligible to participate in the clinical trial.
	☐	We, our licensees or our collaborators might have to suspend or terminate clinical trials if the participating subjects are being exposed to unacceptable health risks. Animal tests do not always adequately predict potential safety risks to human subjects. The risk of any product candidate is unknown until it is tested in human subjects, and if subjects experience adverse events during the clinical trial, the trial may have to be suspended and modified or terminated entirely.
	☐	Regulators or institutional review boards may suspend or terminate clinical research for various reasons, including safety concerns or noncompliance with regulatory requirements.
	☐	Any regulatory approval ultimately obtained may be limited or subject to restrictions or post-approval commitments that render the product not commercially viable.
	☐	The effects of our technology-derived or technology-enhanced product candidates may not be the desired effects or may include undesirable side effects.

	☐	the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, to induce, or in return for, the purchase or recommendation of an item or service reimbursable under a federal healthcare program, such as the Medicare and Medicaid programs;
	☐	federal civil and criminal false claims laws and civil monetary penalty laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other third-party payers that are false or fraudulent;
	☐	HIPAA, which created new federal criminal statutes that prohibit executing a scheme to defraud any healthcare benefit program and making false statements relating to healthcare matters;
	☐	HIPAA, as amended by the HITECH Act, and its implementing regulations, which imposes certain requirements relating to the privacy, security and transmission of individually identifiable health information; and
	☐	state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payer, including commercial insurers, and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

	☐	decreased demand for our product candidates or products that we may develop;
	☐	injury to our reputation;
	☐	withdrawal of clinical trial participants;
	☐	initiation of investigations by regulators;
	☐	restrictions on the marketing or manufacturing of the product, withdrawal of the product from the market or voluntary or mandatory product recalls;
	☐	costs to defend the related litigation;
	☐	a diversion of management’s time and our resources;
	☐	substantial monetary awards to trial participants or patients;
	☐	product recalls, withdrawals or labeling, marketing or promotional restrictions;
	☐	loss of revenues from product sales; and
	☐	the inability to commercialize our product candidates.

	☐	difficulties in identifying and acquiring products, technologies, proprietary rights or businesses that will help our business;
	☐	difficulties in integrating operations, technologies, services, and personnel;
	☐	diversion of financial and managerial resources from existing operations;
	☐	the risk of entering new development activities and markets in which we have little to no experience;
	☐	risks related to the assumption of known and unknown liabilities;
	☐	risks related to our ability to raise sufficient capital to fund additional operating activities; and
	☐	the issuance of our securities as partial or full payment for any acquisitions and investments could result in material dilution to our existing stockholders.

	☐	obtain licenses, which may not be available on commercially reasonable terms, if at all, and may be non-exclusive, thereby giving our competitors access to the same intellectual property licensed to us;
	☐	redesign our products or processes to avoid infringement;
	☐	stop using the subject matter validly claimed in the patents held by others;
	☐	pay damages; and
	☐	defend litigation or administrative proceedings which may be costly whether we win or lose, and which could result in a substantial diversion of our valuable management resources.

	☐	Others may be able to make compounds that are similar to our product candidates but that are not covered by the claims of the patents that we own or have exclusively licensed;
	☐	We or our licensors or strategic partners might not have been the first to make the inventions covered by the issued patent or pending patent application that we own or have exclusively licensed;
	☐	We or our licensors or strategic partners might not have been the first to file patent applications covering certain of our inventions;
	☐	Others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights;
	☐	Our pending patent applications may not lead to issued patents;
	☐	Issued patents that we own or have exclusively licensed may not provide us with any competitive advantages, or may be held invalid or unenforceable, as a result of legal challenges by our competitors;
	☐	Our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets;
	☐	We may not develop additional proprietary technologies that are patentable; and
	☐	The patents of others may have an adverse effect on our business.

	☐	actual or anticipated adverse results or delays in our clinical trials;
	☐	our failure to commercialize our product candidates, if approved;
	☐	unanticipated serious safety concerns related to the use of any of our product candidates;
	☐	adverse regulatory decisions;
	☐	changes in laws or regulations applicable to our product candidates, including but not limited to clinical trial requirements for approvals;
	☐	legal disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our product candidates, government investigations and the results of any proceedings or lawsuits, including, but not limited to, patent or stockholder litigation;
	☐	our decision to initiate a clinical trial, not initiate a clinical trial or to terminate an existing clinical trial;
	☐	our dependence on third parties, including CROs;
	☐	announcements of the introduction of new products by our competitors;
	☐	market conditions in the pharmaceutical and biotechnology sectors;
	☐	announcements concerning product development results or intellectual property rights of others;

	☐	future issuances of common stock or other securities;
	☐	the addition or departure of key personnel;
	☐	failure to meet or exceed any financial guidance or expectations regarding development milestones that we may provide to the public;
	☐	actual or anticipated variations in quarterly operating results;
	☐	our failure to meet or exceed the estimates and projections of the investment community;
	☐	overall performance of the equity markets and other factors that may be unrelated to our operating performance or the operating performance of our competitors, including changes in market valuations of similar companies;
	☐	conditions or trends in the biotechnology and biopharmaceutical industries;
	☐	introduction of new products offered by us or our competitors;
	☐	announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors;
	☐	issuances of debt or equity securities;
	☐	sales of our common stock by us or our stockholders in the future;
	☐	trading volume of our common stock;
	☐	ineffectiveness of our internal controls;
	☐	publication of research reports about us or our industry or positive or negative recommendations or withdrawal of research coverage by securities analysts;
	☐	failure to effectively integrate the acquired companies’ operations;
	☐	general political and economic conditions;
	☐	effects of natural or man-made catastrophic events;
	☐	effects of public health crises, pandemics and epidemics, such as the COVID-19 pandemic; and
	☐	other events or factors, many of which are beyond our control.

	☐	variations in the level of expenses related to our development programs;
	☐	the addition or termination of clinical trials;
	☐	any intellectual property infringement lawsuit in which we may become involved;
	☐	regulatory developments affecting our product candidates; and
	☐	our execution of any collaborative, licensing or similar arrangements, and the timing of payments we may make or receive under these arrangements.

	High ($)		Low ($)
Fiscal Year Ended December 31, 2022
First Quarter		0.399		0.125
Second Quarter		0.13		0.056
Third Quarter		0.107		0.04
Fourth Quarter		0.104		0.027

Fiscal Year Ended December 31, 2021
First Quarter		0.85		0.41
Second Quarter		1.20		0.50
Third Quarter		0.99		0.56
Fourth Quarter		0.56		0.26

Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights		Weighted-average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans
Equity compensation plans approved by security holders		19,860,715	$	0.49		30,139,285
Equity compensation plans not approved by security holders		–		–		–
Total		19,860,715	$	0.49		30,139,285

	(i)	filing Exchange Act reports;
	(ii)	contractual obligations;
	(iii)	building inventory of our approved devices;
	(iii)	clinical trials; and
	(iv)	continued research and development of our diagnostic tests.

	December 31, 2022			December 31, 2021			$ Change			% Change
Revenues	$	8,875		$	60,460		$	(51,585	)	>	-85	%
Gross margin percentage		-			-			-			-
Operating expenses		4,661,647			14,035,458			(9,373,811	)	>	-67	%
Loss from continuing operations		(4,652,772	)		(13,974,998	)		(9,322,226	)	>	-67	%
Loss from discontinued operations					(7,996	)		7,996			-100	%
Other expenses (income)		1,590,177			2,049,311			(459,134	)		-22.4	%
Net loss	$	(6,242,949	)	$	(16,032,305	)	$	(9,789,356	)	>	-139	%

	·	Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

	·	Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

	·	Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.