Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Aug. 31, 2020 | Oct. 01, 2020 | |
Document and Entity Information | ||
Entity Registrant Name | BURZYNSKI RESEARCH INSTITUTE INC | |
Entity Central Index Key | 0000724445 | |
Document Type | 10-Q | |
Document Period End Date | Aug. 31, 2020 | |
Amendment Flag | false | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 131,448,444 | |
Current Fiscal Year End Date | --02-29 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 |
BALANCE SHEETS
BALANCE SHEETS - USD ($) | Aug. 31, 2020 | Feb. 29, 2020 |
Current assets | ||
Cash and cash equivalents | $ 1,711 | $ 163 |
Prepaids | 1,251 | 19,690 |
TOTAL CURRENT ASSETS | 2,962 | 19,853 |
TOTAL ASSETS | 2,962 | 19,853 |
Current liabilities | ||
Accounts payable | 86,140 | 60,805 |
Accrued liabilities | 118,208 | 111,635 |
CURRENT AND TOTAL LIABILITIES | 204,348 | 172,440 |
Commitments and contingencies | ||
Stockholders' deficit | ||
Common stock, $.001 par value; 200,000,000 shares authorized; 131,448,444 issued and outstanding at August 31, 2020 and February 29, 2020 | 131,449 | 131,449 |
Additional paid-in capital | 124,111,504 | 123,373,793 |
Retained deficit | (124,444,339) | (123,657,829) |
TOTAL STOCKHOLDERS' DEFICIT | (201,386) | (152,587) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 2,962 | $ 19,853 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - $ / shares | Aug. 31, 2020 | Feb. 29, 2020 |
BALANCE SHEETS | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 131,448,444 | 131,448,444 |
Common stock, shares outstanding | 131,448,444 | 131,448,444 |
STATEMENTS OF OPERATIONS
STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2020 | Aug. 31, 2019 | Aug. 31, 2020 | Aug. 31, 2019 | |
Operating expenses | ||||
Research and development | $ 249,481 | $ 299,732 | $ 589,166 | $ 632,469 |
General and administrative | 79,059 | 110,488 | 197,344 | 246,065 |
TOTAL OPERATING EXPENSES | 328,540 | 410,220 | 786,510 | 878,534 |
Operating loss | (328,540) | (410,220) | (786,510) | (878,534) |
Loss before provision for income tax | (328,540) | (410,220) | (786,510) | (878,534) |
Income tax expense | 0 | 0 | ||
NET LOSS | $ (328,540) | $ (410,220) | $ (786,510) | $ (878,534) |
Loss per share information: | ||||
Basic and diluted loss per common share (in dollars per share) | $ 0 | $ 0 | $ (0.01) | $ (0.01) |
Weighted average number of common shares outstanding | ||||
Weighted average number of common shares outstanding (in shares) | 131,448,444 | 131,448,444 | 131,448,444 | 131,448,444 |
STATEMENT OF STOCKHOLDERS' DEFI
STATEMENT OF STOCKHOLDERS' DEFICIT - USD ($) | Common Stock | Additional Paid-in Capital | Retained Deficit | Total |
Balance at Feb. 28, 2019 | $ 131,449 | $ 121,705,250 | $ (122,023,347) | $ (186,648) |
Balance (in shares) at Feb. 28, 2019 | 131,448,444 | |||
Increase (Decrease) in Stockholders' Equity | ||||
Cash contributed by S.R. Burzynski, M.D., Ph.D. | 138,217 | 138,217 | ||
FDA clinical trial expenses paid directly by S.R. Burzynski, M.D., Ph.D | 316,719 | 316,719 | ||
Net loss | (468,314) | (468,314) | ||
Balance at May. 31, 2019 | $ 131,449 | 122,160,186 | (122,491,661) | (200,026) |
Balance (in shares) at May. 31, 2019 | 131,448,444 | |||
Balance at Feb. 28, 2019 | $ 131,449 | 121,705,250 | (122,023,347) | (186,648) |
Balance (in shares) at Feb. 28, 2019 | 131,448,444 | |||
Increase (Decrease) in Stockholders' Equity | ||||
Net loss | (878,534) | |||
Balance at Aug. 31, 2019 | $ 131,449 | 122,587,968 | (122,901,881) | (182,464) |
Balance (in shares) at Aug. 31, 2019 | 131,448,444 | |||
Balance at May. 31, 2019 | $ 131,449 | 122,160,186 | (122,491,661) | (200,026) |
Balance (in shares) at May. 31, 2019 | 131,448,444 | |||
Increase (Decrease) in Stockholders' Equity | ||||
Cash contributed by S.R. Burzynski, M.D., Ph.D. | 144,067 | 144,067 | ||
FDA clinical trial expenses paid directly by S.R. Burzynski, M.D., Ph.D | 283,715 | 283,715 | ||
Net loss | (410,220) | (410,220) | ||
Balance at Aug. 31, 2019 | $ 131,449 | 122,587,968 | (122,901,881) | (182,464) |
Balance (in shares) at Aug. 31, 2019 | 131,448,444 | |||
Balance at Feb. 29, 2020 | $ 131,449 | 123,373,793 | (123,657,829) | (152,587) |
Balance (in shares) at Feb. 29, 2020 | 131,448,444 | |||
Increase (Decrease) in Stockholders' Equity | ||||
Cash contributed by S.R. Burzynski, M.D., Ph.D. | 83,317 | 83,317 | ||
FDA clinical trial expenses paid directly by S.R. Burzynski, M.D., Ph.D | 281,978 | 281,978 | ||
Net loss | (457,970) | (457,970) | ||
Balance at May. 31, 2020 | $ 131,449 | 123,739,088 | (124,115,799) | (245,262) |
Balance (in shares) at May. 31, 2020 | 131,448,444 | |||
Balance at Feb. 29, 2020 | $ 131,449 | 123,373,793 | (123,657,829) | (152,587) |
Balance (in shares) at Feb. 29, 2020 | 131,448,444 | |||
Increase (Decrease) in Stockholders' Equity | ||||
Net loss | (786,510) | |||
Balance at Aug. 31, 2020 | $ 131,449 | 124,111,504 | (124,444,339) | (201,386) |
Balance (in shares) at Aug. 31, 2020 | 131,448,444 | |||
Balance at May. 31, 2020 | $ 131,449 | 123,739,088 | (124,115,799) | (245,262) |
Balance (in shares) at May. 31, 2020 | 131,448,444 | |||
Increase (Decrease) in Stockholders' Equity | ||||
Cash contributed by S.R. Burzynski, M.D., Ph.D. | 139,017 | 139,017 | ||
FDA clinical trial expenses paid directly by S.R. Burzynski, M.D., Ph.D | 233,399 | 233,399 | ||
Net loss | (328,540) | (328,540) | ||
Balance at Aug. 31, 2020 | $ 131,449 | $ 124,111,504 | $ (124,444,339) | $ (201,386) |
Balance (in shares) at Aug. 31, 2020 | 131,448,444 |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Aug. 31, 2020 | May 31, 2020 | Aug. 31, 2019 | May 31, 2019 | Aug. 31, 2020 | Aug. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||
Net loss | $ (328,540) | $ (457,970) | $ (410,220) | $ (468,314) | $ (786,510) | $ (878,534) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||
FDA clinical trial expenses paid directly by S.R. Burzynski, M.D., Ph.D. | 515,377 | 600,434 | ||||
Changes in operating assets and liabilities | ||||||
Prepaids | 18,439 | (23,521) | ||||
Accounts payable | 25,335 | (8,148) | ||||
Accrued liabilities | 6,573 | 27,885 | ||||
NET CASH USED IN OPERATING ACTIVITIES | (220,786) | (281,884) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||
Contribution of capital | 222,334 | 282,284 | ||||
NET CASH PROVIDED BY FINANCING ACTIVITIES | 222,334 | 282,284 | ||||
NET INCREASE IN CASH | 1,548 | 400 | ||||
CASH AT BEGINNING OF PERIOD | $ 163 | $ 708 | 163 | 708 | ||
CASH AT END OF PERIOD | $ 1,711 | $ 1,108 | $ 1,711 | $ 1,108 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Aug. 31, 2020 | |
BASIS OF PRESENTATION | |
BASIS OF PRESENTATION | NOTE A. The financial statements of Burzynski Research Institute, Inc. (the “Company”), a Delaware corporation, include expenses incurred related to clinical trials, which were sanctioned by the U.S. Food and Drug Administration (FDA) in 1993, for Antineoplaston drugs used in the treatment of cancer. These expenses are incurred directly by S.R. Burzynski, M.D., Ph.D. (Dr. Burzynski or “SRB”) on behalf of the Company and have been reported as research and development costs and as additional paid-in capital. Other funds received from Dr. Burzynski have also been reported as additional paid-in capital. Expenses related to Dr. Burzynski’s medical practice (unrelated to the clinical trials) have not been included in these financial statements. Dr. Burzynski is the President, Chairman of the Board and owner of approximately 81.0% of the outstanding common stock of the Company, and also is the inventor and original patent holder of certain drug products known as “Antineoplastons.” The Company and Dr. Burzynski have entered into various agreements. The License Agreement between the Company and Dr. Burzynski provided the Company the exclusive right in the United States, Canada and Mexico to use, manufacture, develop, sell, distribute, sublicense and otherwise exploit all the rights, titles and interest in Antineoplaston drugs used in the treatment of cancer, once the drug is approved for sale by the FDA. On July 2, 2019, such License Agreement terminated upon the expiration of the last patent licensed to the Company under such agreement. As such, the Company does not currently own any patents or have licenses to any patents with respect to Antineoplastons. The Company is primarily engaged as a research and development facility for Antineoplaston drugs being tested for the use in the treatment of cancer. The Company’s investigational new drug application (“IND”) 43742 is currently under full clinical hold and the Company cannot enroll new patients into any clinical trials until the full clinical hold is removed by the FDA. At this time, however, none of the Antineoplaston drugs have received FDA approval; further, there can be no assurance that FDA approval will be granted. The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. Certain disclosures and information normally included in financial statements have been condensed or omitted. In the opinion of management of the Company, these financial statements contain all adjustments necessary for a fair presentation of financial position as of August 31, 2020 and February 29, 2020, results of operations for the three and six months ended August 31, 2020 and 2019, and cash flows for the six months ended August 31, 2020 and 2019. All adjustments are of a normal recurring nature. The results of operations for interim periods are not necessarily indicative of the results to be expected for a full year. These statements should be read in conjunction with the financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended February 29, 2020. |
ECONOMIC DEPENDENCY
ECONOMIC DEPENDENCY | 6 Months Ended |
Aug. 31, 2020 | |
ECONOMIC DEPENDENCY | |
ECONOMIC DEPENDENCY | NOTE B. The Company has not generated significant revenues since its inception and has suffered losses from operations, has a working capital deficit and has an accumulated deficit. Dr. Burzynski has funded the capital and operational needs of the Company through his medical practice since inception, and has entered into various agreements to continue such funding. The Company is economically dependent on its funding through Dr. Burzynski’s medical practice. In the past, a portion of Dr. Burzynski’s patients have been admitted and treated as part of the clinical trial programs. The Company’s IND 43742 is currently under full clinical hold and the Company cannot enroll new patients into any clinical trials until the full clinical hold is removed by the FDA. The FDA imposes numerous regulations and requirements regarding these patients, and the Company is subject to inspection at any time by the FDA. These regulations are complex and subject to interpretation and though it is management’s intention to comply fully with all such regulations, there is the risk that the Company is not in compliance and is thus subject to sanctions imposed by the FDA. In addition, as with any medical practice, Dr. Burzynski is subject to potential claims by patients and other potential claimants commonly arising out of the operation of a medical practice. The risks associated with Dr. Burzynski’s medical practice directly affect his ability to fund the operations of the Company. |
STOCK OPTIONS AND WARRANTS
STOCK OPTIONS AND WARRANTS | 6 Months Ended |
Aug. 31, 2020 | |
STOCK OPTIONS AND WARRANTS | |
STOCK OPTIONS AND WARRANTS | NOTE C. At August 31, 2020, the Company had one stock-based employee compensation plan, which is described below. On September 14, 1996, the Company granted 600,000 stock options, with an exercise price of $0.35 per share, to an officer who is no longer with the Company. The options vested as follows: Vesting Date 400,000 options September 14, 1996 100,000 options June 1, 1997 100,000 options June 1, 1998 The options are valid in perpetuity. None of the options have been exercised as of August 31, 2020. The Company accounts for share-based payments to non-employees in accordance with the guidance provided by FASB ASC 718, Compensation – Stock Compensation to include share-based payments granted to non-employees in exchange for goods or services used or consumed in an entity’s own operations and supersedes the guidance in ASC 505-50. Effective July 5, 2012, the Company entered into a Marketing and Consulting Agreement (the “Marketing Agreement”) with Worldwide Medical Consultants, Inc. (“WMC”) and CARIGEN, LTD (“SRB”), an entity wholly-owned and controlled by Dr. Burzynski, pursuant to which WMC will (i) provide SRB with various marketing and consulting services to assist SRB in locating and developing cancer or health related centers in certain foreign markets and (ii) make payments to the Company equal to 10% of each consulting fee received by WMC for the aforementioned services provided to SRB, net of certain expenses incurred by WMC (“WMC Payment”). In consideration of the WMC Payment, the Company agreed to grant to WMC warrants to acquire an aggregate of 2,000,000 shares of the Company’s Common Stock, exercisable at $0.10 per share with a ten year exercise period, with 1,000,000 shares vesting upon execution of the agreement (the "Initial Warrants") and the remaining 1,000,000 shares to vest upon the first closing of a transaction by SRB as a result of the services provided by WMC under the Marketing Agreement. The fair market value of the vested warrants as of the date of grant was measured using the Black-Scholes option pricing model and totaled approximately $160,000 or $0.16 per warrant. As of August 31, 2020, none of the aforementioned warrants have been exercised and no additional vesting has occurred. The Marketing Agreement was terminated effective as of July 5, 2019 pursuant to its terms. The Initial Warrants are currently outstanding and can still be exercised. |
LOSS PER COMMON SHARE
LOSS PER COMMON SHARE | 6 Months Ended |
Aug. 31, 2020 | |
LOSS PER COMMON SHARE | |
LOSS PER COMMON SHARE | NOTE D. The Company accounts for loss per share in accordance with FASB ASC 260, Earnings per Share . Basic loss per share amounts are calculated by dividing net loss by the weighted average number of common shares outstanding during each period. Diluted loss per share is calculated by dividing net loss by the weighted average number of common shares outstanding for the periods, including the dilutive effect of all common stock equivalents. Dilutive options and warrants that are issued during a period or that expire or are canceled during a period are reflected in the computations for the time they were outstanding during the periods being reported. During the six months ended August 31, 2020 and 2019, 1,600,000 warrants and stock options were excluded from the calculation of diluted loss per share because their effect would be anti-dilutive. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Aug. 31, 2020 | |
INCOME TAXES | |
INCOME TAXES | NOTE E. The Company follows the provisions of FASB ASC 740, Income Taxes . The Company is not aware of any material unrecognized tax uncertainties as a result of tax positions previously taken. The Company recognizes interest and penalties as interest expense when they are accrued or assessed. The federal income tax returns of the Company for 2019, 2018, and 2017 are subject to examination by the IRS, generally for three years after they are filed. The actual provision for income tax for the three and six months ended August 31, 2020 and 2019 differ from the amounts computed by applying the U.S. federal income tax rate of 21% to the pretax loss as a result of the following: Three Months Ended August 31, 2020 2019 Expected income tax benefit $ (68,993) $ (86,146) Effect of expenses deducted directly by Dr. Burzynski 68,993 86,146 Nondeductible expenses and other adjustments (9,214) (3,688) Change in valuation allowance 9,214 3,688 State tax — — Income tax expense $ — $ — Six Months Ended August 31, 2020 2019 Expected income tax benefit $ (165,167) $ (184,492) Effect of expenses deducted directly by Dr. Burzynski 165,167 184,492 Nondeductible expenses and other adjustments 10,248 (879) Change in valuation allowance (10,248) 879 State tax — — Income tax expense $ — $ — At August 31, 2020, the Company had a net deferred tax asset of $0, which includes a valuation allowance of $201,246. The Company’s ability to utilize net operating loss ("NOL") carryforwards and alternative minimum tax credit carryforwards will depend on its ability to generate adequate future taxable income. The Company has no historical earnings on which to base an expectation of future taxable income. Accordingly, a full valuation allowance for deferred tax assets has been provided. As a result of the Tax Cuts and Jobs Act of 2017 (the "Act"), NOL carryforwards generated in years beginning after December 31, 2017 would carryforward indefinitely, and would apply to 80% of future taxable income. Under the Act, carrybacks of NOLs were disallowed. In March 2020, the Coronavirus Aid, Relief, and Economic Security ("CARES") Act was enacted providing a five-year carryback for losses incurred in 2018, 2019, or 2020, which allows companies to modify tax returns up to five years prior to offset taxable income from those tax years. The CARES Act also suspended the NOL limit of 80% of taxable income, but the NOLs generated in 2018 and forward will still carryforward indefinitely. As of August 31, 2020, the Company has net operating loss carryforwards in the amount of $627,695 that will expire between 2023 and 2038, and $127,747 that will carryforward indefinitely. |
STOCK OPTIONS AND WARRANTS (Tab
STOCK OPTIONS AND WARRANTS (Tables) | 6 Months Ended |
Aug. 31, 2020 | |
STOCK OPTIONS AND WARRANTS | |
Schedule of vesting of options | Vesting Date 400,000 options September 14, 1996 100,000 options June 1, 1997 100,000 options June 1, 1998 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 6 Months Ended |
Aug. 31, 2020 | |
INCOME TAXES | |
Schedule of actual provision for income tax that differs from the amounts computed by applying the U.S. federal income tax rate to the pretax loss | Three Months Ended August 31, 2020 2019 Expected income tax benefit $ (68,993) $ (86,146) Effect of expenses deducted directly by Dr. Burzynski 68,993 86,146 Nondeductible expenses and other adjustments (9,214) (3,688) Change in valuation allowance 9,214 3,688 State tax — — Income tax expense $ — $ — Six Months Ended August 31, 2020 2019 Expected income tax benefit $ (165,167) $ (184,492) Effect of expenses deducted directly by Dr. Burzynski 165,167 184,492 Nondeductible expenses and other adjustments 10,248 (879) Change in valuation allowance (10,248) 879 State tax — — Income tax expense $ — $ — |
BASIS OF PRESENTATION (Details)
BASIS OF PRESENTATION (Details) | 6 Months Ended |
Aug. 31, 2020item | |
BASIS OF PRESENTATION | |
Percentage of outstanding stock owned by the President and Chairman of the Board | 81.00% |
Number of antineoplaston drugs that have received FDA approval | 0 |
STOCK OPTIONS AND WARRANTS (Det
STOCK OPTIONS AND WARRANTS (Details) | Jul. 05, 2012USD ($)$ / shares$ / itemshares | Jun. 01, 1998shares | Jun. 01, 1997shares | Sep. 14, 1996$ / sharesshares | Aug. 31, 2020itemshares |
STOCK OPTIONS AND WARRANTS | |||||
Number of stock-based employee compensation plan | item | 1 | ||||
Worldwide Medical Consultants, Inc. ("WMC") | CARIGEN, LTD ("SRB") | |||||
Marketing Agreement | |||||
Consulting fee (as a percent) | 10.00% | ||||
Warrants to be granted to acquire shares of common stock (in shares) | 2,000,000 | ||||
Exercisable price (in dollars per share) | $ / shares | $ 0.10 | ||||
Warrants exercise period | 10 years | ||||
Shares vesting upon execution of the agreement | 1,000,000 | ||||
Remaining shares to vest upon the first closing of a transaction by SRB under the marketing agreement | 1,000,000 | ||||
Fair value of vested warrants at date of grant | $ | $ 160,000 | ||||
Fair value of vested warrants at date of grant (in dollars per share) | $ / item | 0.16 | ||||
Warrants exercised (in shares) | 0 | ||||
Additional warrants vested (in shares) | 0 | ||||
Stock options | |||||
STOCK OPTIONS AND WARRANTS | |||||
Granted (in shares) | 600,000 | ||||
Exercise price (in dollars per share) | $ / shares | $ 0.35 | ||||
Vested (in shares) | 100,000 | 100,000 | 400,000 | ||
Exercised (in shares) | 0 |
LOSS PER COMMON SHARE (Details)
LOSS PER COMMON SHARE (Details) - shares | 6 Months Ended | |
Aug. 31, 2020 | Aug. 31, 2019 | |
LOSS PER COMMON SHARE | ||
Warrants and stock options excluded from calculation of diluted loss per share (in shares) | 1,600,000 | 1,600,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2020 | Aug. 31, 2019 | Aug. 31, 2020 | Aug. 31, 2019 | |
Income Taxes | ||||
U.S. federal income tax rate (as a percent) | 21.00% | 21.00% | 21.00% | 21.00% |
Actual income tax benefit | ||||
Expected income tax benefit | $ (68,993) | $ (86,146) | $ (165,167) | $ (184,492) |
Effect of expenses deducted directly by Dr. Burzynski | 68,993 | 86,146 | 165,167 | 184,492 |
Nondeductible expenses and other adjustments | (9,214) | (3,688) | 10,248 | (879) |
Change in valuation allowance | 9,214 | $ 3,688 | (10,248) | $ 879 |
Deferred tax assets: | ||||
Net deferred tax asset | 0 | 0 | ||
Valuation allowance | $ 201,246 | 201,246 | ||
Historical earnings | $ 0 | |||
IRS | ||||
Income Taxes | ||||
Period after filing income tax returns subject to examination | 3 years |
INCOME TAXES - Operating Loss C
INCOME TAXES - Operating Loss Carryforwards (Details) | 6 Months Ended |
Aug. 31, 2020USD ($) | |
Net operating loss carryforwards | |
Net operating loss carryforward indefinite period | $ 127,747 |
Future taxable income (in Percent) | 80.00% |
2023 to 2038 | |
Net operating loss carryforwards | |
Net operating loss carryforward in accordance with the Act | $ 627,695 |