Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Mar. 11, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | BIOXYTRAN, INC | |
Entity Central Index Key | 0001445815 | |
Amendment Flag | false | |
Trading Symbol | BIXT | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-K | |
Document Period End Date | Dec. 31, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | FY | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Shell Company | false | |
Entity Ex Transition Period | false | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Public Float | $ 5,124,340 | |
Entity Common Stock, Shares Outstanding | 85,103,673 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash | $ 36,411 | $ 110 |
Total current assets | 36,411 | 110 |
Total assets | 36,411 | 110 |
Current liabilities: | ||
Accounts payable and accrued expenses | 23,447 | |
Accounts payable related party | 10,900 | 1,419 |
Convertible notes payable, net of discount, current portion | 227,378 | |
Total current liabilities | 261,725 | 1,419 |
Total liabilities | 261,725 | 1,419 |
Commitments and contingencies | ||
Stockholders' equity (deficit): | ||
Preferred stock, $0.001 par value; 50,000,000 shares authorized, nil issued and outstanding | ||
Common stock, $0.001 par value; 300,000,000 shares authorized; 85,103,673 issued and outstanding as of December 31, 2018, and 85,103,673 issued and outstanding as of December 31, 2018 | 85,104 | 85,104 |
Additional paid in capital | 72,412 | |
Accumulated deficit | (382,830) | (86,413) |
Total stockholders' equity (deficit) | (225,314) | (1,309) |
Total liabilities and stockholders' equity (deficit) | $ 36,411 | $ 110 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 85,103,673 | 85,103,673 |
Common stock, shares outstanding | 85,103,673 | 85,103,673 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | 12 Months Ended |
Dec. 31, 2017 | Dec. 31, 2018 | |
Operating expenses: | ||
General and administrative | $ 1,309 | $ 214,710 |
Reorganization | 85,104 | |
Total operating expenses | 86,413 | 214,710 |
Loss from operations | (86,413) | (214,710) |
Other (expense): | ||
Interest expense | (8,375) | |
Financing costs | (520) | |
Issuance of warrants | (72,412) | |
Total other (expenses) income | (81,307) | |
Net loss before provision for income taxes | (86,413) | (296,017) |
Provision for income taxes | (400) | |
NET LOSS | $ (86,413) | $ (296,417) |
Loss per common share, basic and diluted | $ 0 | $ 0 |
Weighted average number of common shares outstanding, basic and diluted | 77,565,140 | 85,103,673 |
Consolidated Condensed of State
Consolidated Condensed of Statement of Changes in Stockholders' Equity (Deficit) - USD ($) | Common Stock | Additional Paid in Capital Common | Accumulated Deficit | Total |
Balance at Oct. 04, 2017 | ||||
Balance, Shares at Oct. 04, 2017 | ||||
Reorganization | $ 85,104 | (85,104) | 0 | |
Reorganization, Shares | 85,103,673 | |||
Net Income (loss) | (1,309) | (1,309) | ||
Balance at Dec. 31, 2017 | $ 85,104 | (86,413) | (1,309) | |
Balance, Shares at Dec. 31, 2017 | 85,103,673 | |||
Issuance of warrants | 72,412 | 72,412 | ||
Net Income (loss) | (296,417) | (296,417) | ||
Balance at Dec. 31, 2018 | $ 85,104 | $ 72,412 | $ (382,830) | $ (225,314) |
Balance, Shares at Dec. 31, 2018 | 85,103,673 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Cash Flows - USD ($) | 3 Months Ended | 12 Months Ended |
Dec. 31, 2017 | Dec. 31, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (1,309) | $ (296,417) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Issuance of warrants | 72,412 | |
Amortization of debt discount | 5,173 | |
Changes in operating assets and liabilities: | ||
Accounts payable and accrued expenses | 23,447 | |
Accounts payable and accrued expenses related Party | 1,419 | 9,481 |
Net cash used in operating activities | 110 | (185,904) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Net cash used for investing activities | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of convertible notes payable | 222,205 | |
Net cash provided by financing activities | 222,205 | |
Net increase in cash | 110 | 36,301 |
Cash, beginning of period | 110 | |
Cash, end of period | 110 | 36,411 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||
Debt Discount | 22,622 | |
Issuance of Warrants | 72,412 | |
Interest paid | ||
Income taxes paid |
Background and Organization
Background and Organization | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BACKGROUND AND ORGANIZATION | NOTE 1 – BACKGROUND AND ORGANIZATION Business Operations Bioxytran, Inc. (the “Company”) is an early-stage pharmaceutical company focused on the development, manufacture and commercialization of therapeutic drugs designed to address hypoxia in humans, which is a lack of oxygen to tissues, in a safe and efficient manner. If it is not addressed, lack of oxygen to tissues, or hypoxia, results in necrosis, which is the death of cells comprising body tissue. Necrosis cannot be reversed. Our lead drug candidate, code named BXT-25, is an oxygen-carrying small molecule consisting of bovine hemoglobin stabilized with a co-polymer with intended applications to include treatment of hypoxic conditions in the brain resulting from stroke, and hypoxic conditions in wounds to prevent necrosis and to promote healing. The Company’s initial focus is the treatment of hypoxic conditions in the brain resulting from stroke, and hypoxic conditions in wounds to prevent necrosis and to promote healing. We believe that ours is a novel approach that will result in the creation of safe drug alternatives to existing therapies for effectively addressing hypoxic conditions in humans. Our drug development efforts are guided by specialists in co-polymer chemistry and other disciplines, and we intend to supplement our efforts with input from a scientific and medical advisory board whose members are leading physicians. Organization Bioxytan, Inc., 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 common shares with a par value of $0.0001, and 5,000,000 preferred shares with a par value of $0.0001. On September 21 the company went under a reorganization in form of a reverse merger and is currently registered as a Nevada corporation with a taxing structure for U.S. federal and state income tax as a C-Corporation with 300,000,000 authorized common shares with a par value of $0.001, and 50,000,000 preferred shares with a par value of $0.001 Basis of Presentation The summary of significant accounting policies presented below is designed to assist in understanding the Company’s consolidated financial statements. Such financial statements and accompanying notes are the representations of the Company’s management, who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America (“GAAP”) in all material respects, and have been consistently applied in preparing the accompanying financial statements. The Company has not earned any revenue from operations since inception. The Company chose December 31 st Principles of Consolidation The accompanying consolidated financial statements include the accounts of Bioxytran, Inc. a Nevada Corporation and its wholly owned subsidiary Bioxytran, Inc. of Delaware (collectively, the “Company”). All intercompany accounts have been eliminated upon consolidation. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A summary of the significant accounting policies applied in the preparation of the accompanying financial statements follows. Cash For purposes of the Statement of Cash Flows, the Company considers all highly liquid debt instruments purchased with a maturity date of three months or less to be cash equivalents. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of expenses during the reporting period. Significant estimates include the fair value of the Company’s stock, stock-based compensation and the valuation allowance related to deferred tax assets. Actual results may differ from these estimates. Net Loss per Common Share, basic and diluted The Company computes earnings (loss) per share under Accounting Standards Codification subtopic 260-10, Earnings Per Share (“ASC 260-10”). Net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per share, if presented, would include the dilution that would occur upon the exercise or conversion of all potentially dilutive securities into common stock using the “treasury stock” and/or “if converted” methods as applicable. There are 208,333 warrants outstanding at December 31, 2018 (Note 6), and no potential dilutive items outstanding as of December 31, 2017 Stock Based Compensation The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award. For employees and directors, the fair value of the award is measured on the grant date and for non-employees, the fair value of the award is generally re-measured on vesting dates and financial reporting dates until the service period is complete. The fair value amount is then recognized over the period during which services are required to be provided in exchange for the award, usually the vesting period. Stock-based compensation expense is recorded by the Company in the same expense classifications in the statements of operations, as if such amounts were paid in cash. As of December 31, 2018, and 2017 there were no outstanding stock options. Income Taxes The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or be settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided when it is more likely than not that some portion of the gross deferred tax asset will not be realized. The Company records interest and penalties related to income taxes as a component of provision for income taxes. The Company did not recognize any interest and penalty expense for the year ended December 31, 2018 and 2017. On December 22, 2017, the Tax Cuts and Jobs Act (TCJA) was signed into law by the President of the United States. TCJA is a tax reform act that among other things, reduced corporate tax rates to 21 percent effective January 1, 2018. FASB ASC 740, Income Taxes, requires deferred tax assets and liabilities to be adjusted for the effect of a change in tax laws or rates in the year of enactment, which is the year in which the change was signed into law. Accordingly, the Company adjusted its deferred tax assets and liabilities at December 31, 2018, using the new corporate tax rate of 21 percent. See Note 8. Research and Development The Company accounts for research and development costs in accordance with Accounting Standards Codification subtopic 730-10, Research and Development (“ASC 730-10”). Under ASC 730-10, all research and development costs must be charged to expense as incurred. Accordingly, internal research and development costs are expensed as incurred. Third-party research and development costs are expensed when the contracted work has been performed or as milestone results have been achieved as defined under the applicable agreement. Company-sponsored research and development costs related to both present and future products are expensed in the period incurred. During the year ended December 31, 2018 and from October 5, 2017 (date of inception) through December 31, 2017, the Company did not incur significant research and development expenses. Fair Value Accounting Standards Codification subtopic 825-10, Financial Instruments (“ASC 825-10”) requires disclosure of the fair value of certain financial instruments. The carrying value of cash and cash equivalents, accounts payable and accrued liabilities, and short-term borrowings, as reflected in the balance sheets, approximate fair value because of the short-term maturity of these instruments. All other significant financial assets, financial liabilities and equity instruments of the Company are either recognized or disclosed in the financial statements together with other information relevant for making a reasonable assessment of future cash flows, interest rate risk and credit risk. Where practicable the fair values of financial assets and financial liabilities have been determined and disclosed; otherwise only available information pertinent to fair value has been disclosed. The Company follows Accounting Standards Codification subtopic 820-10, Fair Value Measurements and Disclosures (“ASC 820-10”) and Accounting Standards Codification subtopic 825-10, Financial Instruments (“ASC 825-10”), which permits entities to choose to measure many financial instruments and certain other items at fair value. Recent Accounting Pronouncements There were various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company’s financial position, results of operations or cash flows. |
Going Concern and Management's
Going Concern and Management's Liquidity Plans | 12 Months Ended |
Dec. 31, 2018 | |
Going Concern and Management's Liquidity Plans [Abstract] | |
GOING CONCERN AND MANAGEMENT'S LIQUIDITY PLANS | NOTE 3 – GOING CONCERN AND MANAGEMENT’S LIQUIDITY PLANS As of December 31, 2018, the Company had cash of $36,411 and a negative working capital of $225,314. From October 5, 2017 (date of inception) through December 31, 2018, the Company has not yet generated any revenues, and has incurred cumulative net losses of $382,830. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. From October 5, 2017 (date of inception) through December 31, 2018, the Company has not raised any cash proceeds from the issuance of debt or common stock. The Company is aware that its current cash on hand will not be sufficient to fund its projected operating requirements through the month of September 2019 and is pursuing alternative opportunities to funding. The Company intends to raise additional capital through private placements 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. Accordingly, the accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the financial statements do not necessarily purport to represent realizable or settlement values. The financial statements do not include any adjustment that might result from the outcome of this uncertainty. |
Accounts Payables and Accrued E
Accounts Payables and Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLES AND ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | NOTE 4 – ACCOUNTS PAYABLES AND ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES On December 31, 2018, there was $10,900 in Accounts Payables to related parties in form of payroll and advanced expenses. On December 31, 2017 there was $1,419 in Accounts Payables to related parties in form of payroll and advanced expenses. The following table represents the major components of accounts payables and accrued expenses and other current liabilities at December 31, 2018 and 2017: 2018 2017 Accounts Payables related party $ 10,900 $ 1,419 Professional fees 19,175 - Interest 3,722 - Taxes 400 - Other Accounts Payables 150 - Convertible Note Payables 227,378 - Total $ 261,725 $ 1,419 |
Convertible Notes Payable
Convertible Notes Payable | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE NOTES PAYABLE | NOTE 5 – CONVERTIBLE NOTES PAYABLE On October 25, 2018 U.S. Rare Earth Minerals, Inc. (the "Company") entered into a $250,000 Senior Secured Promissory Note, dated October 24, 2018 at an interest rate of 8% per annum, maturing on October 24, 2019 (the "Maturity Date"). Issuance fees totaling $25,520 were recorded as a debt discount, resulting in net proceeds of $222,205. The Note is convertible into common stock of the Company, par value $.001 per share (the "Common Stock") at any time after the earlier of: (i) 180 days from the date of the Note or (ii) upon effective date of a registration statement. The conversion price of the Note is equal to the lesser of : (i) the lowest trading price for the twenty-day period prior to the date of the Note or (ii) 65% of the average of the three lowest trading prices during the twenty days prior to a conversion notice on the applicable trading market or the closing bid price on the applicable trading market. The Company may prepay the Note at any time at a rate of 120% of outstanding principal and interest during the first 90 days it is outstanding and 130% of outstanding principal and interest for the next 90 days thereafter. Thereafter the prepayment amount increases 5% for each thirty-day period until 270 days from the issue date at which time it is fixed at 150% of the outstanding principal and interest on the Note. As long as the convertible notes remain outstanding, the Company is restricted from incurring any indebtedness or liens, except as permitted (as defined), amend its charter in any matter that materially effects rights of noteholders, repay or repurchase more than de minimis number of shares of common stock other than conversion or warrant shares, repay or repurchase all or any portion of any indebtedness or pay cash dividends. In connection with the issuance of the Convertible Debentures, the Company issued an aggregate of 208,333 warrants to purchase the Company's common stock at $0.60 per share, exercisable immediately upon issuance, expiring five years from the date of issuance, the latest being October 24, 2023. The Company applies the provisions of ASC 480, Distinguishing Liabilities from Equity with the excess over the note's undiscounted face value being deemed a premium to be added to the principal balance and amortized to additional paid-in capital over the life of the note. Based on the classification of the debt instrument it was determined that derivative treatment was not a factor due to the ASC 480 treatment. On October 24, 2018, the Company issued 208,333 warrants, as part of the one-year Convertible Note "The Auctus Note", all classified as equity instruments and were fully exercisable as of date of issuance at a fixed exercise price of $0.60 with an expiration date of October 23, 2023. The warrants are exempt from derivative accounting because they have a fixed exercise price and there are no exercise contingencies. For the year ended December 31, 2018, the Company amortized $5,173 debt discount to operations as interest expense. Convertible notes payable consists of the following at December 31, 2018: 2018 Principal balance $ 250,000 Debt discount (20,347 ) Deferred finance costs (2,275 ) Outstanding, net of debt discount $ 227,378 There were no convertible notes outstanding in 2017. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 6 – STOCKHOLDERS' EQUITY At a Board of Director's Meeting on July 30, 2018, the Company authorized a reverse split that resulted in a reduction of the number of outstanding and issued shares of both common and preferred stock so that after the split became effective on August 13, 2018, the shares of both common and preferred stock were reduced to 1 share for each 30 shares currently issued and outstanding. The effect on the Balance Sheet is a transfer of value from stock value at par to Additional Paid-in Capital (APIC). As a result of the one (1) for thirty (30) reverse stock split, the Company will continue to be authorized to issue 300,000,000 shares of Common Stock. The impact of the reverse stock split has been retroactively applied to all periods presented, and all references to common and preferred stock in the footnotes are assumed to be post-split unless otherwise indicated. Preferred stock As of July 30, 2018, and prior to the reverse stock split, there were 440,500 outstanding shares of the Company's Preferred Stock. After the reverse stock split that was effective on August 13, 2018, the Company's outstanding shares of preferred stock was 14,683 and the authorized preferred stock of 50,000,000 shares remained unchanged. On September 20, 2018 the total of 9,999 shares of Preferred Stock were returned to treasury as a result of a Merger, (please see 8-K statement filed on September 24, 2018 and its financial amendment 8-K/A filed on October 29, 2018, for more detailed information about the merger and asset purchase agreement). The change of control of ownership resulted in the mandatory conversion of all of the outstanding shares of the Company's Class A 6% Cumulative Convertible Voting Preferred Stock, par value $.001 per share ("Preferred Stock"), with 5 shares of common stock, par value $.001 per share (the "Common Stock") of the Company, being issued for each outstanding share of Preferred Stock, as well as combined accrued interest. As of December 31, 2018, no preferred shares have been designated nor issued. Common stock As of July 30, 2018, and prior to the reverse stock split, there were 111,336,350 shares of Common Stock outstanding. As a result of the reverse stock split that was effective on August 13, 2018, there were approximately 3,711,204 shares of Common Stock outstanding. A total of 30,000 shares, included in the above count, had on July 30, 2018 been issued as a settlement of accounts payable for a related party. On September 21, 2018, the Company completed a series of transactions as a result of a Merger, (please see 8-K statement filed on September 24, 2018 and its financial amendment 8-K/A filed on October 29, 2018, for more detailed information about the merger and asset purchase agreement As consideration for the Merger, the stockholders of Bioxytran were issued 76,586,937 shares of common stock of the Company. The Merger was structured as a tax-free reorganization. A 6% secured promissory note in the principal amount of $110,000, including all interest had been in default since August 23, 2013. The Note was secured by substantially all of the assets of the Company. As consideration for the satisfaction of the obligation and as a condition to the Settlement, the Company agreed to divest substantially all of its assets and remaining liabilities to an affiliate of the creditor and former majority stockholder of the Company. The creditor agreed to release all liens upon the completion of the asset sale. Included in the Settlement a former majority stockholder of the Company received 4,455,856 shares of common stock, while the former Directors and Officers received 850,732 shares of common Stock. An additional 30,500 shares of common stock were issued as a result of a mandatory conversion of 4,681 shares preferred stock, convertible 5:1 while, 7,095 shares of common stock were issued in form of accrued 6% annual combined interest on the preferred stock. An additional 9,999 shares of preferred stock were returned to treasury. As of December 31, 2018, and after completion of the above transactions, the Company has 85,103,673 shares of Common Stock issued and outstanding. No shares of common stock have been issued since the merger. Common Stock Warrants With reference to Note 6, the Company has determined that the Warrants are exempt from derivative accounting and were valued at $101,937 on the Date of Inception using the Black Scholes Options Pricing Model. Assumptions used for the Black Scholes Options Pricing Model include (1) stock price of $0.49 per share, (2) exercise price of $0.60 per share, (3) term of 5 years, (4) expected volatility of 287.03% and (5) risk free interest rate of 2.51%. The note proceeds of $250,000 were then allocated between the fair value of the promissory note ($250,000) and the Warrants ($101,937), resulting in a debt discount of $72,412. This debt discount was amortized in its entirety to interest expense on the Date of Issuance and allocated to Additional Paid in Capital. The following table summarizes the Company's common stock warrants activity for the years ended December 31, 2018: Weighted Average Weighted-Average Remaining Warrants Exercise Contractual Outstanding as of December 31, 2017 - - Granted 208,333 0.6 4.8 Exercised - - Forfeited/Canceled - - Outstanding as of December 31, 2018 208,333 $ 0.6 4.8 |
Provision for Income Taxes
Provision for Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
PROVISION FOR INCOME TAXES | NOTE 7 – PROVISION FOR INCOME TAXES Provision for Income Taxes During the year ended December 31, 2018 and the period of October 5, 2017 (inception) no provision for income taxes was recorded as the Company generated net operating losses. The tax effects of temporary differences that give rise to deferred tax assets are presented below: 2018 2017 Deferred Tax Assets: Net operating loss carryforward $ 62,200 $ - Total deferred tax assets 62,200 - Valuation allowance (62,200 ) - Deferred tax asset, net of valuation allowance $ - $ - The income tax provision (benefit) consists of the following: 2018 2017 Federal: Current $ - $ - Deferred - - State and local: Current - - Deferred - - Change in valuation allowance - - Income tax provision (benefit) $ - $ - A reconciliation of the statutory federal income tax rate to the Company's effective tax rate is as follows: Tax benefit at federal statutory rate (21.0 )% (21.0 )% There was no provision for income taxes in 2017. The Company assesses the likelihood that deferred tax assets will be realized. To the extent that realization is not likely, a valuation allowance is established. Based upon the Company's history of losses since inception, management believes that it is more likely than not that future benefits of deferred tax assets will not be realized. At December 31, 2018, the Company had approximately $62,200 of federal net operating losses that may be available to offset future taxable income, in 2017 there were no federal net operating losses. The net operating loss carry forwards, if not utilized, will begin to expire in 2038 for federal purposes. Pursuant to the Internal Revenue Code Section 382 ("Section 382"), certain ownership changes may subject the net operating loss carryforwards ("carryforwards") and research and development tax credit carryforwards to annual limitations which could reduce or defer the carryforwards. Section 382 imposes limitations on a corporation's ability to utilize carryforwards if it experiences an ownership change. An ownership change may result from transactions increasing the ownership of certain stockholders in the stock of a corporation by more than 50 percentage points over a three-year period. In the event of an ownership change, utilization of the carryforwards would be subject to an annual limitation under Section 382 determined by multiplying the value of its stock at the time of the ownership change by the applicable long-term tax-exempt rate. Any unused annual limitation may be carried over to later years. The imposition of this limitation on its ability to use the carryforwards to offset future taxable income could cause the Company to pay U.S. federal income taxes earlier than if such limitation were not in effect and could cause such carryforwards to expire unused, reducing or eliminating the benefit of such carryforwards. The Company has not completed a Section 382 study to determine if there have been one or more ownership changes due to the costs associated with such a study. Until a study is completed and the extent of the limitations, if any, is able to be determined, no additional amounts have been written off or are being presented as an uncertain tax position. On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cut and Jobs Act (the "Tax Act"). The Tax Act establishes new tax laws that affects 2018 and future years, including a reduction in the U.S. federal corporate income tax rate to 21%, effective January 1, 2018. In the deferred tax assets for 2016, it is recorded a provisional decrease of $37,900, with a corresponding adjustment to valuation allowance of $37,900 as of December 31, 2017. The Company applies the provisions of ASC 740-10, Income Taxes. The Company has not recognized any liability for unrecognized tax benefits and does not believe there is any uncertainty with respect to its tax position. The Company's policy with respect to unrecognized tax benefits is to recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal and state jurisdictions, where applicable. There are currently no pending income tax examinations. Earlier years may be examined to the extent that tax credit or net operating loss carryforwards are used in future periods. The Company's policy is to record interest and penalties related to income taxes as part of its income tax provision. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 8 – COMMITMENTS AND CONTINGENCIES Employment contracts The Company's executive officers have entered into employment contracts and confidentiality, non-disclosure and assignment of invention agreements. The employment agreements do not provide for the payment of any compensation to our executive officers. Litigation In the normal course of business, the Company may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance. Legal fees for such matters are expensed as incurred and we accrue for adverse outcomes as they become probable and estimable. During the period from October 5, 2017 (inception) to December 31, 2018, and through the issuance of these financial statements, the Company was not involved in any legal proceedings. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 9 – SUBSEQUENT EVENTS The Company has evaluated events from December 31, 2018 through the date the financial statements were issued, and the following events have been determined to require disclosure. On February 14, 2019, the company's S/1 was declared effective, allowing the company to raise up to $10 million in public equity. The S/1 was originally submitted on November 30, 2018. Further, the S-1 effectiveness triggers the ASC 480 treatment of the convertible note, as earlier described under Note 6. On February 25, 2019 we entered into a $250,000 Senior Secured Promissory Note, dated February 25, 2019 at an interest rate of 8% per annum, maturing on October 24, 2019 (the "Maturity Date"). The Note is convertible into common stock of the Company, par value $.001 per share (the "Common Stock") at any time after the earlier of: (i) 180 days from the date of the Note or (ii) upon effective date of a registration statement. The conversion price of the Note is equal to the lesser of : (i) the lowest trading price for the twenty-day period prior to the date of the Note or (ii) 65% of the average of the three lowest trading prices during the twenty days prior to a conversion notice on the applicable trading market or the closing bid price on the applicable trading market. The Company may prepay the Note at any time at a rate of 120% of outstanding principal and interest during the first 90 days it is outstanding and 130% of outstanding principal and interest for the next 90 days thereafter. Thereafter the prepayment amount increases 5% for each thirty-day period until 270 days from the issue date at which time it is fixed at 150% of the outstanding principal and interest on the Note. As earlier described under Note 6, the warrants are exempt from derivative accounting because they have a fixed exercise price and there are no exercise contingencies, while the convertible note will trigger the ASC 480 treatment of the convertible note 180 days of issuance, or a next S-1 effectiveness, whichever comes first. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Cash | Cash For purposes of the Statement of Cash Flows, the Company considers all highly liquid debt instruments purchased with a maturity date of three months or less to be cash equivalents. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of expenses during the reporting period. Significant estimates include the fair value of the Company’s stock, stock-based compensation and the valuation allowance related to deferred tax assets. Actual results may differ from these estimates. |
Net Loss per Common Share, basic and diluted | Net Loss per Common Share, basic and diluted The Company computes earnings (loss) per share under Accounting Standards Codification subtopic 260-10, Earnings Per Share (“ASC 260-10”). Net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per share, if presented, would include the dilution that would occur upon the exercise or conversion of all potentially dilutive securities into common stock using the “treasury stock” and/or “if converted” methods as applicable. There are 208,333 warrants outstanding at December 31, 2018 (Note 6), and no potential dilutive items outstanding as of December 31, 2017 |
Stock Based Compensation | Stock Based Compensation The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award. For employees and directors, the fair value of the award is measured on the grant date and for non-employees, the fair value of the award is generally re-measured on vesting dates and financial reporting dates until the service period is complete. The fair value amount is then recognized over the period during which services are required to be provided in exchange for the award, usually the vesting period. Stock-based compensation expense is recorded by the Company in the same expense classifications in the statements of operations, as if such amounts were paid in cash. As of December 31, 2018, and 2017 there were no outstanding stock options. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or be settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided when it is more likely than not that some portion of the gross deferred tax asset will not be realized. The Company records interest and penalties related to income taxes as a component of provision for income taxes. The Company did not recognize any interest and penalty expense for the year ended December 31, 2018 and 2017. On December 22, 2017, the Tax Cuts and Jobs Act (TCJA) was signed into law by the President of the United States. TCJA is a tax reform act that among other things, reduced corporate tax rates to 21 percent effective January 1, 2018. FASB ASC 740, Income Taxes, requires deferred tax assets and liabilities to be adjusted for the effect of a change in tax laws or rates in the year of enactment, which is the year in which the change was signed into law. Accordingly, the Company adjusted its deferred tax assets and liabilities at December 31, 2018, using the new corporate tax rate of 21 percent. See Note 8. |
Research and Development | Research and Development The Company accounts for research and development costs in accordance with Accounting Standards Codification subtopic 730-10, Research and Development (“ASC 730-10”). Under ASC 730-10, all research and development costs must be charged to expense as incurred. Accordingly, internal research and development costs are expensed as incurred. Third-party research and development costs are expensed when the contracted work has been performed or as milestone results have been achieved as defined under the applicable agreement. Company-sponsored research and development costs related to both present and future products are expensed in the period incurred. During the year ended December 31, 2018 and from October 5, 2017 (date of inception) through December 31, 2017, the Company did not incur significant research and development expenses |
Fair Value | Fair Value Accounting Standards Codification subtopic 825-10, Financial Instruments (“ASC 825-10”) requires disclosure of the fair value of certain financial instruments. The carrying value of cash and cash equivalents, accounts payable and accrued liabilities, and short-term borrowings, as reflected in the balance sheets, approximate fair value because of the short-term maturity of these instruments. All other significant financial assets, financial liabilities and equity instruments of the Company are either recognized or disclosed in the financial statements together with other information relevant for making a reasonable assessment of future cash flows, interest rate risk and credit risk. Where practicable the fair values of financial assets and financial liabilities have been determined and disclosed; otherwise only available information pertinent to fair value has been disclosed. The Company follows Accounting Standards Codification subtopic 820-10, Fair Value Measurements and Disclosures (“ASC 820-10”) and Accounting Standards Codification subtopic 825-10, Financial Instruments (“ASC 825-10”), which permits entities to choose to measure many financial instruments and certain other items at fair value. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements There were various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company’s financial position, results of operations or cash flows. |
Accounts Payables and Accrued_2
Accounts Payables and Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses and other current liabilities | 2018 2017 Accounts Payables related party $ 10,900 $ 1,419 Professional fees 19,175 - Interest 3,722 - Taxes 400 - Other Accounts Payables 150 - Convertible Note Payables 227,378 - Total $ 261,725 $ 1,419 |
Convertible Notes Payable (Tabl
Convertible Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Convertible notes payable | 2018 Principal balance $ 250,000 Debt discount (20,347 ) Deferred finance costs (2,275 ) Outstanding, net of debt discount $ 227,378 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Schedule of Company’s common stock warrants activity | Weighted Average Weighted-Average Remaining Warrants Exercise Contractual Outstanding as of December 31, 2017 - - Granted 208,333 0.6 4.8 Exercised - - Forfeited/Canceled - - Outstanding as of December 31, 2018 208,333 $ 0.6 4.8 |
Provision for Income Taxes (Tab
Provision for Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of deferred tax assets | 2018 2017 Deferred Tax Assets: Net operating loss carryforward $ 47,000 $ - Stock-based compensation 15,200 - Total deferred tax assets 62,200 - Valuation allowance (62,200 ) - Deferred tax asset, net of valuation allowance $ - $ - |
Schedule of income tax provision (benefit) | 2018 2017 Federal: Current $ - $ - Deferred - - State and local: Current - - Deferred - - Change in valuation allowance - - Income tax provision (benefit) $ - $ - |
Schedule of effective tax rate | Tax benefit at federal statutory rate (21.0 )% (21.0 )% |
Background and Organization (De
Background and Organization (Details) - $ / shares | Dec. 31, 2018 | Sep. 21, 2018 | Dec. 31, 2017 | Oct. 06, 2017 |
Background and Organization (Textual) | ||||
Common stock, par value | $ 0.001 | $ 0.001 | ||
Common stock, shares authorized | 300,000,000 | 300,000,000 | ||
Preferred stock, par value | $ 0.001 | $ 0.001 | ||
Preferred stock, shares authorized | 50,000,000 | 50,000,000 | ||
Delaware [Member] | ||||
Background and Organization (Textual) | ||||
Common stock, par value | $ 0.001 | $ 0.0001 | ||
Common stock, shares authorized | 300,000,000 | 95,000,000 | ||
Preferred stock, par value | $ 0.001 | $ 0.0001 | ||
Preferred stock, shares authorized | 50,000,000 | 5,000,000 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Dec. 31, 2018shares | |
Summary of Significant Accounting Policies (Textual) | |
Corporate tax rates | 21.00% |
Warrants outstanding | 208,333 |
Going Concern and Management'_2
Going Concern and Management's Liquidity Plans (Details) - USD ($) | 15 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Going Concern and Management's Liquidity Plans (Textual) | ||
Cash | $ 36,411 | $ 110 |
Negative working capital | (225,314) | |
Cumulative net losses | $ (382,830) | $ (86,413) |
Accounts Payables and Accrued_3
Accounts Payables and Accrued Expenses and Other Current Liabilities (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Accounts Payables related party | $ 10,900 | $ 1,419 |
Professional fees | 19,175 | |
Interest | 3,722 | |
Taxes | 400 | |
Other Accounts Payables | 150 | |
Convertible Note Payables | 227,378 | |
Total | $ 261,725 | $ 1,419 |
Accounts Payables and Accrued_4
Accounts Payables and Accrued Expenses and Other Current Liabilities (Details Textual) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Accounts Payables related party | $ 10,900 | $ 1,419 |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details) - Convertible notes payable [Member] | Dec. 31, 2018USD ($) |
Principal balance | $ 250,000 |
Debt discount | (20,347) |
Deferred finance costs | (2,275) |
Outstanding, net of debt discount | $ 227,378 |
Convertible Notes Payable (De_2
Convertible Notes Payable (Details Textual) - USD ($) | 1 Months Ended | ||
Oct. 25, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Convertible Notes Payable (Textual) | |||
Debt discount | $ 5,173 | ||
Common stock per share | $ 0.001 | $ 0.001 | |
Secured Promissory Note [Member] | |||
Convertible Notes Payable (Textual) | |||
Convertible notes issued | $ 208,333 | ||
Common stock per share | $ 0.60 | ||
Expiration date | Oct. 24, 2023 | ||
Convertible note, description | On October 25, 2018 U.S. Rare Earth Minerals, Inc. (the "Company") entered into a $250,000 Senior Secured Promissory Note, dated October 24, 2018 at an interest rate of 8% per annum, maturing on October 24, 2019 (the "Maturity Date"). Issuance fees totalling $25,520 were recorded as a debt discount, resulting in net proceeds of $222,205. The Note is convertible into common stock of the Company, par value $.001 per share (the "Common Stock") at any time after the earlier of: (i) 180 days from the date of the Note or (ii) upon effective date of a registration statement. The conversion price of the Note is equal to the lesser of : (i) the lowest trading price for the twenty-day period prior to the date of the Note or (ii) 65% of the average of the three lowest trading prices during the twenty days prior to a conversion notice on the applicable trading market or the closing bid price on the applicable trading market. The Company may prepay the Note at any time at a rate of 120% of outstanding principal and interest during the first 90 days it is outstanding and 130% of outstanding principal and interest for the next 90 days thereafter. Thereafter the prepayment amount increases 5% for each thirty-day period until 270 days from the issue date at which time it is fixed at 150% of the outstanding principal and interest on the Note. |
Stockholders' Equity (Details)
Stockholders' Equity (Details) | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Equity [Abstract] | |
Number of shares, Outstanding, Beginning balance | shares | |
Number of shares, Options granted | shares | 208,333 |
Number of shares, Options exercised | shares | |
Number of shares, Options Forfeited/Cancelled | shares | |
Number of shares, Outstanding, Ending balance | shares | 208,333 |
Weighted-Average Exercise Price, Outstanding, Beginning balance | $ / shares | |
Weighted-Average Exercise Price, Options granted | $ / shares | 0.6 |
Weighted-Average Exercise Price, Options exercised | $ / shares | |
Weighted-Average Exercise Price, Options Forfeited/Cancelled | $ / shares | |
Weighted-Average Exercise Price, Outstanding, Ending balance | $ / shares | $ 0.6 |
Weighted-Average Remaining Contractual Term, Options granted | 4 years 9 months 18 days |
Weighted-Average Remaining Contractual Term, Ending balance | 4 years 9 months 18 days |
Stockholders' Equity (Details T
Stockholders' Equity (Details Textual) - USD ($) | 1 Months Ended | 12 Months Ended | |||||
Oct. 24, 2018 | Jul. 30, 2018 | Dec. 31, 2018 | Sep. 20, 2018 | Aug. 13, 2018 | Dec. 31, 2017 | Aug. 23, 2013 | |
Stockholders' Equity (Textual) | |||||||
Description of reverse stock split | The Company authorized a reverse split that resulted in a reduction of the number of outstanding and issued shares of both common and preferred stock so that after the split became effective, the shares of both common and preferred stock were reduced to 1 share for each 30 shares currently issued and outstanding. The effect on the Balance Sheet is a transfer of value from stock value at par to Additional Paid-in Capital (APIC). As a result of the one (1) for thirty (30) reverse stock split, the Company will continue to be authorized to issue 300,000,000 shares of Common Stock. | ||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | |||||
Preferred stock, shares authorized | 50,000,000 | 50,000,000 | |||||
Preferred stock, shares issued | |||||||
Preferred stock, shares outstanding | |||||||
Common stock, par value | $ 0.001 | $ 0.001 | |||||
Common stock, shares authorized | 300,000,000 | 300,000,000 | |||||
Common stock, shares issued | 85,103,673 | 85,103,673 | |||||
Common stock, shares outstanding | 85,103,673 | 85,103,673 | |||||
Issued shares of common stock | 76,586,937 | ||||||
Additional shares of common stock were issued | 30,500 | ||||||
Conversion of shares preferred stock | 4,681 | ||||||
Convertible conversion ratio | 5:1 | ||||||
Common shares issued as cumulative interest on converted preferred shares | 7,095 | ||||||
Percentage of annual combined interest on preferred stock | 6.00% | ||||||
Additional shares of preferred stock were returned to treasury | 9,999 | ||||||
Former majority stockholder [Member] | |||||||
Stockholders' Equity (Textual) | |||||||
Received shares of common stock | 4,455,856 | ||||||
Former Directors and Officers [Member] | |||||||
Stockholders' Equity (Textual) | |||||||
Received shares of common stock | 850,732 | ||||||
Preferred Stock [Member] | |||||||
Stockholders' Equity (Textual) | |||||||
Preferred stock, shares outstanding | 440,500 | 14,683 | |||||
Total shares of preferred stock were returned to treasury | 9,999 | ||||||
Common Stock [Member] | |||||||
Stockholders' Equity (Textual) | |||||||
Common stock, shares outstanding | 111,336,350 | 3,711,204 | |||||
Total of shares issued as settlement of accounts payable for a related party | 30,000 | ||||||
Warrant [Member] | |||||||
Stockholders' Equity (Textual) | |||||||
Determined warrants derivative, description | The Company has determined that the Warrants are exempt from derivative accounting and were valued at $101,937 on the Date of Inception using the Black Scholes Options Pricing Model. Assumptions used for the Black Scholes Options Pricing Model include (1) stock price of $0.49 per share, (2) exercise price of $0.60 per share, (3) term of 5 years, (4) expected volatility of 287.03% and (5) risk free interest rate of 2.51%. The note proceeds of $250,000 were then allocated between the fair value of the promissory note ($250,000) and the Warrants ($101,937), resulting in a debt discount of $72,412. This debt discount was amortized in its entirety to interest expense on the Date of Issuance and allocated to Additional Paid in Capital. | ||||||
Class A 6% Cumulative Convertible Voting Preferred Stock [Member] | |||||||
Stockholders' Equity (Textual) | |||||||
Conversion of stock, description | The change of control of ownership resulted in the mandatory conversion of all of the outstanding shares of the Company's Class A 6% Cumulative Convertible Voting Preferred Stock, par value $.001 per share ("Preferred Stock"), with 5 shares of common stock, par value $.001 per share (the "Common Stock") of the Company, being issued for each outstanding share of Preferred Stock, as well as combined accrued interest. | ||||||
Principal amount | $ 110,000 | ||||||
Percentage of secured promissory note | 6.00% |
Provision for Income Taxes (Det
Provision for Income Taxes (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred Tax Assets: | ||
Net operating loss carryforward | $ 62,200 | |
Total deferred tax assets | 62,200 | |
Valuation allowance | (62,200) | |
Deferred tax asset, net of valuation allowance |
Provision for Income Taxes (D_2
Provision for Income Taxes (Details 1) - USD ($) | 3 Months Ended | 12 Months Ended |
Dec. 31, 2017 | Dec. 31, 2018 | |
Federal: | ||
Current | ||
Deferred | ||
State and local: | ||
Current | ||
Deferred | ||
Change in valuation allowance | ||
Income tax provision (benefit) | $ (400) |
Provision for Income Taxes (D_3
Provision for Income Taxes (Details 2) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Tax benefit at federal statutory rate | (21.00%) | (21.00%) |
Provision for Income Taxes (D_4
Provision for Income Taxes (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Provision for Income Taxes (Textual) | |||
Federal net operating losses | $ 62,200 | ||
Net operating loss carry forwards, description | The net operating loss carry forwards, if not utilized, will begin to expire in 2038 for federal purposes. | ||
U.S. federal corporate income tax rate | (21.00%) | (21.00%) | |
Provisional decrease | $ 37,900 | ||
Adjustment to valuation allowance | $ 37,900 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] - USD ($) | 1 Months Ended | |
Feb. 25, 2019 | Feb. 14, 2019 | |
Subsequent Events (Textual) | ||
Public equity | $ 10,000,000 | |
Secured Promissory Note [Member] | ||
Subsequent Events (Textual) | ||
Senior secured promissory note | $ 250,000 | |
Senior secured promissory note, dated | Feb. 25, 2019 | |
Maturity date | Oct. 24, 2019 | |
Interest rate | 8.00% | |
Note convertible, description | The Note is convertible into common stock of the Company, par value $.001 per share (the “Common Stock”) at any time after the earlier of: (i) 180 days from the date of the Note or (ii) upon effective date of a registration statement. The conversion price of the Note is equal to the lesser of : (i) the lowest trading price for the twenty-day period prior to the date of the Note or (ii) 65% of the average of the three lowest trading prices during the twenty days prior to a conversion notice on the applicable trading market or the closing bid price on the applicable trading market. The Company may prepay the Note at any time at a rate of 120% of outstanding principal and interest during the first 90 days it is outstanding and 130% of outstanding principal and interest for the next 90 days thereafter. Thereafter the prepayment amount increases 5% for each thirty-day period until 270 days from the issue date at which time it is fixed at 150% of the outstanding principal and interest on the Note. |