AXIM BIOTECHNOLOGIES, INC. The following discussion and analysis of our financial condition and results of
operations for the years ended
Liquidity and Capital Resources
We are in our early stages of development and growth, without established records of sales or earnings. We will be subject to numerous risks inherent in the business and operations of financially unstable and early stage or emerging growth companies.
As of
We can provide no assurance that the Company can continue to satisfy its cash requirements for at least the next twelve months.
We expect to obtain financing through shareholder loans, private placements and/or registered offerings of our securities. Shareholder loans may be without stated terms of repayment or interest. In addition, we may consider taking on long-term or short-term debt from financial institutions in the immediate future. Shareholders loans may be granted from time to time as required to meet current working capital needs. We have no formal agreement that ensures that we will receive such loans. We may exhaust this source of funding at any time.
We are dependent upon certain related parties to provide continued funding and capital resources. If continued funding and capital resources are unavailable at reasonable terms, we may not be able to implement our plan of operations. These loans may include terms that may be highly dilutive to existing shareholders.
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On
On
During
Effective
Effective
Each of the Convertible Notes is (i) unsecured; (ii) bears interest at a rate of
3% per annum; (iii) matures on
On
During 2022, the Company issued 14,837,874 of its shares of common stock
pursuant to a stock purchase agreement for cash gross proceeds of
In
In
We expect COVID-19, along with the resulting government-imposed restrictions on businesses, to negatively impact our operations due to decreased consumer demand as well as potential production and warehouse limitations which results in an event or condition, before consideration of management's plans, that could impact our ability to meet future obligations. We believe that our cash and cash equivalents on hand and these cost reduction measures, as needed, will provide sufficient liquidity to fund our operations for the next 12 months from the issuance of the consolidated financial statements.
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Sources of Capital
We expect to sustain our working capital needs through shareholder loans, private placements and/or registered offerings of our securities. Shareholder loans may be without stated terms of repayment or interest. We may consider taking on any long-term or short-term debt from financial institutions in the immediate future. Shareholders loans may be granted from time to time as required to meet current working capital needs. We have no formal agreement that ensures that we will receive such loans. We may exhaust this source of funding at any time.
During the next twelve months, we anticipate incurring costs related to:
(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.
We believe we will be able to meet these costs through use of funds in our treasury, deferral of fees by certain service providers and additional amounts, as necessary, to be loaned to or invested in us by our shareholders, management or other investors. As of the date of the period covered by this report, we have limited cash. There are no assurances that we will be able to secure any additional funding as needed. Currently, however our ability to continue as a going concern is dependent upon our ability to generate future profitable operations and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. Management's plan includes obtaining additional funds by equity financing and/or related party advances; however, there is no assurance of additional funding being available.
Known Trends or Uncertainties
We have seen some consolidation in the pharmaceutical and biotechnology industries during economic downturns. These consolidations have not had a negative effect on us to date; however, should consolidations and downsizing in the industry continue to occur, those events could adversely impact our financial results and business operations going forward.
The potential for growth in new markets is uncertain. We will continue to explore these opportunities until such time as we either generate sales or determine that resources would be more efficiently used elsewhere.
As discussed in this Annual Report, the world has been affected due to the COVID-19 pandemic. The pandemic has negatively impacted our business in various ways over the last two years, including, more recently, as a result of global supply chain constraints at least partially attributable to the pandemic. Until the pandemic has passed, there remains uncertainty as to the effect of COVID-19 on our business in both the short and long-term.
Inflation
Inflation has increased during the periods covered by this Annual Report, and is
expected to continue to increase for the near future. Inflationary factors, such
as increases in the cost of our products (and components thereof), interest
rates, overhead costs and transportation costs may adversely affect our
operating results. Although we do not believe that inflation has had a material
impact on our financial position or results of operations to date, we may
experience some effect in the near future (especially if inflation rates
continue to rise) due to supply chain constraints, consequences associated with
COVID-19 and the ongoing conflict between
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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 effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
Going Concern
The Company's financial statements have been presented assuming that the Company
will continue as a going concern. As shown in the financial statements, the
Company has negative working capital of
The Company may not be able to meet its contractual obligations to
The Company intends to raise additional capital through private placements and/or registered offerings of debt and equity securities, but 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.
Results of Operations
Comparison of the year ended
December 31, December 31, $ %
2022 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 %
Revenue
Revenues from continuing operations recognized for twelve months ended
Cost of Revenue
Cost of Revenue from continuing operations recognized for twelve months ended
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Operating Expenses
Research and Development Expenses
For the twelve months ended
Selling, General and Administrative Expenses
Our Selling, General and Administrative expenses for the years ending in 2022
and 2021 were
Depreciation Expenses
For the year ended
Amortization Expenses
For the year ended
Impairment Loss
For the year ended
Other Income and Expenses
Our interest expenses for the years ending 2022 and 2021 were
For the Year Ended
Net Cash Provided by/Used in Operating Activities
Net cash used in continuing operating activities and discontinued operating
activities was
The company recorded common stock issued for settlement of obligation for the
twelve months ended
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Net cash used in (provided by) investing activities during the period ended
Net Cash Provided by Financing Activities
Net cash provided by financing activities during the twelve months' period ended
Critical Accounting Policies
The preparation of financial statements in conformity with
Our management's discussion and analysis of financial condition and results of
operations is based on our consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in
Fair Value of Financial Instruments
Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants. A fair value hierarchy has been established for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.
Research and Development Costs
Research and development costs are expensed as incurred. Research and development reimbursements and grants are recorded by us as a reduction of research and development cost.
Share-Based Payments
We estimate the fair value of each stock option award at the grant date by using the Black-Scholes option pricing model. The fair value determined represents the cost for the award and is recognized over the vesting period during which an employee is required to provide service in exchange for the award. We account for forfeitures of stock options as they occur.
Income Taxes
We use the asset and liability method to calculate deferred taxes. Deferred taxes are recognized based on the differences between the financial reporting and income tax bases of assets and liabilities using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. We review deferred tax assets for a valuation allowance based upon whether it is more likely than not that the deferred tax asset will be fully realized. A valuation allowance, if necessary, is provided against deferred tax assets, based upon our assessment as to their realization.
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We recognize tax when the positions meet a "more-likely-than-not" recognition threshold. There were no tax positions for which it is considered reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease within the next year. We recognize interest related to unrecognized tax benefits in interest expense and penalties in operating expenses.
Recently Issued Accounting Standards
Note 5 to consolidated financial statements appearing elsewhere in this report includes Recently Issued Accounting Standards.
Foreign Currency Transactions
Foreign exchange gain (loss) in the year ended
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