bicx_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

☐	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ___________

Commission file number: 000-54208

BioCorRx Inc.

(Exact name of registrant as specified in its charter)

Nevada		90-0967447
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

2390 East Orangewood Avenue, Suite 570 Anaheim, CA		92806
(Address of principal executive offices)		(Zip Code)

(714) 462-4880

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange

on which registered

N/A

Indicate by check whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 12, 2024, there were 10,890,521 shares of registrant’s common stock outstanding.

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PART I. FINANCIAL INFORMATION

ITEM 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023	3
	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2024 and 2023	4
	Condensed Consolidated Statement of Deficit for the three and six months ended June 30, 2024	5
	Condensed Consolidated Statement of Deficit for the three and six months ended June 30, 2023	6
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2024 and 2023	7
	Notes to Consolidated Financial Statements	8
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34
ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	44
ITEM 4.	Controls and Procedures	44

PART II. OTHER INFORMATION

ITEM 1.	Legal Proceedings	45
ITEM 1A.	Risk Factors	45
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45
ITEM 3.	Defaults Upon Senior Securities	45
ITEM 4.	Mine Safety Disclosures	45
ITEM 5.	Other Information	45
ITEM 6.	Exhibits	46

SIGNATURES		47

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact, including statements regarding our future results of operations and financial position, our business strategy and plans, and our objectives for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

Unless expressly indicated or the context requires otherwise, the terms “BioCorRx,” “Company,” “we,” “us,” and “our” in this document refer to BioCorRx Inc., a Nevada corporation, and, where appropriate, its wholly owned subsidiaries.

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PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

BIOCORRX INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30,			December 31,
	2024			2023
	(unaudited)
ASSETS
Current assets:
Cash	$	8,365		$	65,222
Accounts receivable, net		-			740
Grant receivable		109,736			76,266
Prepaid expenses		53,909			44,891
Total current assets		172,010			187,119

Property and equipment, net		38,105			50,943

Right to use assets		218,046			97,278

Other assets:
Patents, net		8,438			9,027
Deposits, long term		41,936			44,520
Total other assets		50,374			53,547

Total assets	$	478,535		$	388,887

LIABILITIES AND DEFICIT
Current liabilities:
Accounts payable and accrued expenses, including related party payables of $1,173,120 and $1,683,453, respectively	$	5,330,053		$	4,649,179
Lease liability, short term		38,491			122,732
Derivative liability		80,190			53,460
Notes payable, net of debt discount of $180,599 and $354,730, respectively		1,000,881			606,750
Notes payable, related parties, net of debt discount of $0 and $77,295, respectively		865,353			999,088
Total current liabilities		7,314,968			6,431,209

Long term liabilities:
Economic Injury Disaster loan, long term		71,754			72,466
Royalty obligation, net of discount of $4,662,246 and $4,899,354, related parties		4,059,854			3,822,746
Lease liability, long term		179,555			10,945
Deferred revenue, long term		-			4,045

Total liabilities		11,626,131			10,341,411

Commitments and contingencies

Deficit:
Preferred stock, no par value, 600,000 authorized
Series A convertible preferred stock, no par value; 80,000 designated; 80,000 shares issued and outstanding as of June 30, 2024 and December 31, 2023		16,000			16,000
Series B convertible preferred stock, no par value; 160,000 designated; 160,000 shares issued and outstanding as of June 30, 2024 and December 31, 2023		5,616			5,616
Common stock, $0.001 par value; 750,000,000 shares authorized, 9,783,074 and 8,674,029 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively		9,783			8,674
Common stock subscribed		100,000			100,009
Additional paid in capital		69,424,316			68,149,029
Accumulated deficit		(80,557,140	)		(78,103,018	)
Total deficit attributable to BioCorRx Inc.		(11,001,425	)		(9,823,690	)
Non-controlling interest		(146,171	)		(128,834	)
Total deficit		(11,147,596	)		(9,952,524	)

Total liabilities and deficit	$	478,535		$	388,887

See the accompanying notes to the unaudited condensed consolidated financial statements

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BIOCORRX INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	Three months ended						Six months ended
	March 31,						June 30,
	2024			2023			2024			2023

Revenues, net	$	4,045		$	19,635		$	7,665		$	60,077

Operating expenses:
Cost of implants and other costs		-			10,376			1,667			19,052
Research and development		536,362			238,419			750,196			475,806
Selling, general and administrative		830,321			711,027			1,580,419			1,507,076
Impairment of intellectual property		-			-			-			47,980
Depreciation and amortization		6,714			6,714			13,427			13,379
Total operating expenses		1,373,397			966,536			2,345,709			2,063,293

Loss from operations		(1,369,352	)		(946,901	)		(2,338,044	)		(2,003,216	)

Other income (expenses):
Interest expense - related parties		(203,549	)		(162,825	)		(390,377	)		(332,205	)
Interest expense, net		(317,907	)		(27,489	)		(499,727	)		(53,529	)
Loss on settlement of debt		-			(34,338	)		-			(34,338	)
Grant income		518,667			248,006			631,630			489,155
Other miscellaneous income		138,145			-			125,059			-
Total other (expense) income		135,356			23,354			(133,415	)		69,083

Loss before provision for income taxes		(1,233,996	)		(923,547	)		(2,471,459	)		(1,934,133	)

Income taxes		-			-			-			-

Net loss		(1,233,996	)		(923,547	)		(2,471,459	)		(1,934,133	)

Non-controlling interest		16,650			1,106			17,337			2,040

Net loss attributable to BioCorRx Inc.	$	(1,217,346	)	$	(922,441	)	$	(2,454,122	)	$	(1,932,093	)

Net loss per common share, basic and diluted	$	(0.13	)	$	(0.11	)	$	(0.27	)	$	(0.24	)

Weighted average number of common shares outstanding, basic and diluted		9,459,532			8,464,429			9,108,695			8,105,052

See the accompanying notes to the unaudited condensed consolidated financial statements

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BIOCORRX INC.

CONDENSED CONSOLIDATED STATEMENT OF DEFICIT

THREE AND SIX MONTHS ENDED JUNE 30, 2024

	Series A				Series B
	Convertible				Convertible								Common			Additional					Non-
	Preferred stock				Preferred stock				Common stock				stock			Paid in		Accumulated			Controlling
	Shares		Amount		Shares		Amount		Shares		Amount		Subscribed			Capital		Deficit			Interest			Total
Balance, December 31, 2023		80,000	$	16,000		160,000	$	5,616		8,674,029	$	8,674	$	100,009		$	68,149,029	$	(78,103,018	)	$	(128,834	)	$	(9,952,524	)
Common stock issued for services rendered		-		-		-		-		169,075		169		-			149,456		-			-			149,625
Common stock issued in connection with issuance of promissory notes		-		-		-		-		54,000		54		-			40,163		-			-			40,217
Warrants issued in connection with issuance of promissory notes		-		-		-		-		-		-		-			83,552		-			-			83,552
Share-based compensation		-		-		-		-		-		-		-			48,450		-			-			48,450
Net loss		-		-		-		-		-		-		-			-		(1,236,776	)		(687	)		(1,237,463	)
Balance, March 31, 2024 (unaudited)		80,000	$	16,000		160,000	$	5,616		8,897,104	$	8,897	$	100,009		$	68,470,650	$	(79,339,794	)	$	(129,521	)	$	(10,868,143	)
Common stock issued for services rendered		-		-		-		-		191,923		192		-			114,587		-			-			114,779
Common stock issued in connection with subscription agreement		-		-		-		-		9,374		9		(9	)		-		-			-			-
Common stock issued in connection with conversion of promissory notes and accounts payable		-		-		-		-		684,673		685		-			808,599		-			-			809,284
Share-based compensation		-		-		-		-		-		-		-			30,480		-			-			30,480
Net loss		-		-		-		-		-		-		-			-		(1,217,346	)		(16,650	)		(1,233,996	)
Balance, June 30, 2024 (unaudited)		80,000	$	16,000		160,000	$	5,616		9,783,074	$	9,783	$	100,000		$	69,424,316	$	(80,557,140	)	$	(146,171	)	$	(11,147,596	)

See the accompanying notes to the unaudited condensed consolidated financial statements

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BIOCORRX INC.

CONDENSED CONSOLIDATED STATEMENT OF DEFICIT

THREE AND SIX MONTHS ENDED JUNE 30, 2023

	Series A				Series B								Common
	Convertible				Convertible								Stock			Common		Additional					Non-
	Preferred stock				Preferred stock				Common stock				Subscription			stock		Paid in		Accumulated			Controlling
	Shares		Amount		Shares		Amount		Shares		Amount		Receivable			Subscribed		Capital		Deficit			Interest			Total
Balance, December 31, 2022		80,000	$	16,000		160,000	$	5,616		7,718,636	$	7,719	$	-		$	100,000	$	66,130,296	$	(74,336,105	)	$	(125,257	)	$	(8,201,731	)
Common stock issued for services rendered		-		-		-		-		36,660		37		-			-		63,107		-			-			63,144
Common stock issued in connection with issuance of promissory notes		-		-		-		-		4,285		4		-			-		5,996		-			-			6,000
Common stock issued in connection with subscription agreement		-		-		-		-		342,592		343		(300,000	)		-		599,657		-			-			300,000
Share-based compensation		-		-		-		-		-		-		-			-		16,074		-			-			16,074
Net loss		-		-		-		-		-		-					-		-		(1,009,652	)		(934	)		(1,010,586	)
Balance, March 31, 2023 (unaudited)		80,000	$	16,000		160,000	$	5,616		8,102,173	$	8,103	$	(300,000	)	$	100,000	$	66,815,130	$	(75,345,757	)	$	(126,191	)	$	(8,827,099	)
Common stock issued for services rendered		-		-		-		-		35,301		35		-			-		62,256		-			-			62,291
Common stock issued in connection with conversion of promissory notes and accounts payable		-		-		-		-		207,606		208		-			-		361,684		-			-			361,892
Common stock issued in connection with subscription agreement		-		-		-		-		174,409		174		300,000			-		299,826		-			-			600,000
Share-based compensation		-		-		-		-		-		-		-			-		15,953		-			-			15,953
Net loss		-		-		-		-		-		-					-		-		(922,441	)		(1,106	)		(923,547	)
Balance, June 30, 2023 (unaudited)		80,000	$	16,000		160,000	$	5,616		8,519,489	$	8,520	$	-		$	100,000	$	67,554,849	$	(76,268,198	)	$	(127,297	)	$	(8,710,510	)

See the accompanying notes to the unaudited condensed consolidated financial statements

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BIOCORRX INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Six Months ended
	June 30,
	2024			2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(2,471,459	)	$	(1,934,133	)
Adjustments to reconcile net loss to cash flows used in operating activities:
Depreciation and amortization		13,427			13,379
Amortization of discount on royalty obligation		237,108			233,888
Amortization of debt discount		421,925			33,262
Impairment of intellectual property		-			47,980
Amortization of right-of-use asset		43,242			61,259
Loss on settlement of debt		-			34,338
Other income		(32,405	)		-
Stock based compensation		343,334			157,462
Changes in operating assets and liabilities:
Accounts receivable		740			22,725
Grant receivable		(33,470	)		37,726
Prepaid expenses		(9,018	)		(44,545	)
Accounts payable and accrued expenses		1,043,732			450,488
Deposits		2,584			-
Lease liability		(47,236	)		(65,380	)
Deferred revenue		(4,045	)		(17,347	)
Net cash used in operating activities		(491,541	)		(968,898	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from common stock subscription and royalty agreement		-			900,000
Payment to Economic Injury Disaster loan		(712	)		(686	)
Payment of notes payable – related party		-			(35,000	)
Proceeds from notes payable		200,000			50,000
Proceeds from notes payable – related party		235,396			183,273
Net cash provided by financing activities		434,684			1,097,587

Net increase (decrease) in cash		(56,857	)		128,689
Cash, beginning of period		65,222			68,615

Cash, end of period	$	8,365		$	197,304

Supplemental disclosures of cash flow information:
Interest paid	$	9,279		$	-
Taxes paid	$	-		$	-
Warrants issued in connection with issuance of promissory notes	$	83,552		$	-
Derivative liability recognized in connection with issuance of promissory notes	$	26,730		$	-
Common stock issued in connection with conversion of promissory notes and accounts payable	$	809,284		$	361,892
Common stock issued in connection with subscription agreement	$	9		$	-
Record right to use assets per ASC 842	$	(225,663	)	$	-
Record lease liability per ASC 842	$	225,663		$	-
Common stock issued in connection with issuance of promissory notes	$	40,217		$	6,000

See the accompanying notes to the unaudited condensed consolidated financial statements

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BIOCORRX INC .

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024

(UNAUDITED)

NOTE 1 - BUSINESS

BioCorRx Inc., through its subsidiaries, develops and provides addiction treatment solutions offering a unique approach to the treatment of substance use and other related disorders. The Company also controls BioCorRx Pharmaceuticals Inc., a clinical-stage drug development subsidiary currently seeking FDA approval for BICX104, an implantable naltrexone pellet for the treatment of alcohol and opioid use disorders. BICX102 is an implantable pellet of naltrexone that was the original product candidate being developed under NIDA award number UG3DA047925 (awarded in 2019 and 2020) and BICX104 is another pellet of naltrexone that subsequently became the lead product candidate with minor excipient differences between the BICX102 and BICX104. On October 31, 2020, the Company entered into a written management services agreement with Joseph DeSanto MD, Inc. (“Medical Corporation”) under which the Company provides management and other administrative services to the Medical Corporation. These services include billing, collection of accounts receivable, accounting, management and human resource functions. Pursuant to the management services agreement, a management fee equal to 65% of the Medical Corporation’s gross collected monthly revenue. Through this arrangement, the Company is directing the activities that most significantly impact the financial results of the respective Medical Corporation; however, all clinical treatment decisions are made solely by licensed healthcare professionals. The Company has determined that it is the primary beneficiary, and, therefore, has consolidated the Medical Corporation as variable interest entity (“VIE”). The medical corporation: (i) had not yet generated any revenues and (ii) had no significant assets or liabilities since inception through June 30, 2024.

On July 28, 2016, BioCorRx Inc. formed BioCorRx Pharmaceuticals, Inc., a Nevada Corporation, for the purpose of developing certain business lines. In connection with the formation, the sub issued 24.2% ownership to officers of BioCorRx Inc. with the Company retaining 75.8%. In 2018, BioCorRx Pharmaceuticals, Inc. began operating activities (Note 17).

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

Interim Financial Statements

The following (a) condensed consolidated balance sheet as of December 31, 2023, which has been derived from audited financial statements, and (b) the unaudited condensed consolidated interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2024 are not necessarily indicative of results that may be expected for the year ending December 31, 2024. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2023 included in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on April 1, 2024.

Basis of presentation

The consolidated financial statements include the accounts of: (i) BioCorRx Inc. and its wholly owned subsidiary, Fresh Start Private, Inc., (ii) its majority owned subsidiary, BioCorRx Pharmaceuticals, Inc., and (iii) and the Medical Corporation (“VIE”) (Collectively, “the Company”) under which the Company provides management and other administrative services pursuant to the management services agreement in which the Company is the primary beneficiary. All significant intercompany balances and transactions have been eliminated in consolidation.

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Revenue Recognition

The Company recognizes revenue in accordance with Financial Accounting Standards Board “FASB” Accounting Standards Codification “ASC” 606. A five-step analysis a must be met as outlined in Topic 606: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations, and (v) recognize revenue when (or as) performance obligations are satisfied. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded.

The Company has elected the following practical expedients in applying ASC 606:

	·	Unsatisfied Performance Obligations - all performance obligations relate to contracts with a duration of less than one year. The Company has elected to apply the optional exemption provided in ASC 606 and therefore, is not required to disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period.

	·	Contract Costs - all incremental customer contract acquisition costs are expensed as they are incurred as the amortization period of the asset that the Company otherwise would have recognized is one year or less in duration.

	·	Significant Financing Component - the Company does not adjust the promised amount of consideration for the effects of a significant financing component as the Company expects, at contract inception, that the period between when the entity transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less.

	·	Sales Tax Exclusion from the Transaction Price - the Company excludes from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the Company from the customer.

	·	Shipping and Handling Activities - the Company elected to account for shipping and handling activities as a fulfillment cost rather than as a separate performance obligation.

The Company’s net sales are disaggregated by product category. The sales/access fees consist of product sales, which is recognized upon the transfer of promised goods to customers. The project support income is generated from administrative support to Biotechnology research customers, which is recognized upon the transfer of promised services to customers. The distribution rights income consists of the income recognized from the amortization of distribution agreements entered into for its products. The membership/program fees are generated from the Company’s UnCraveRx™ Weight Loss Management Program, which is recognized upon the transfer of promised goods to customers.

The following table presents the Company’s net sales by product category for the three and six months ended June 30, 2024 and 2023:

	Three Months Ended June 30,
	2024		2023
Sales/access fees	$	-	$	9,245
Distribution rights income		4,045		8,721
Membership/program fees		-		1,669
Net sales	$	4,045	$	19,635

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	Six Months Ended June 30,
	2024		2023
Sales/access fees	$	2,205	$	10,255
Project support income		-		25,817
Distribution rights income		4,045		17,347
Membership/program fees		1,415		6,658
Net sales	$	7,665	$	60,077

Deferred revenue

The Company licenses proprietary products and protocols to customers under licensing agreements that allow those customers to access the products and protocols in services they provide to their customers during the term of the license agreement. The timing and amount of revenue recognized from license agreements depends upon a variety of factors, including the specific terms of each agreement. Such agreements are reviewed for multiple performance obligations. Performance obligations can include amounts related to initial non-refundable license fees for the use of the Company’s products and protocols and additional royalties on covered services.

The Company granted license and sub-license agreements for various regions or States in the United States allowing the licensee to market, distributes and sell solely in the defined license territory, as defined, the products provided by the Company. The agreements are granted for a defined period or perpetual and are effective as long as annual milestones are achieved.

Terms for payments for licensee agreements vary from full cash payment to defined terms. In cases where license or sub-license fees are uncollected and deferred; the Company nets those uncollected fees with the deferred revenue for balance sheet presentation.

The Company amortizes license fees over the shorter of the economic life of the related contract life or contract terms for each licensee.

On October 1, 2019, the Company launched the UnCraveRx™ Weight Loss Management Program. Customers are charged a membership fee and are requested to pay for three training programs at inception. The payments are recorded as deferred revenue until earned.

The following table presents the changes in deferred revenue, reflected as current and long term liabilities on the Company’s unaudited condensed consolidated balance sheet:

Balance as of December 31, 2023
Short term	$	-
Long term		4,045
Total as of December 31, 2023		4,045
Net sales recognized		(4,045	)
Balance as of June 30, 2024	$	-

Deferred Revenue-Grant

The Company recognizes grant revenues in the period during which the related research and development costs are incurred. The timing and amount of revenue recognized from reimbursement for research and development costs depends upon the specific terms for the contracted work. Such costs are reviewed for multiple performance obligations which can include amounts related to contracted work performed or as milestones have been achieved.

Use of Estimates

The preparation of the consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include assumptions used in the fair value of other equity and debt instruments, income taxes, loss contingencies, and research and development costs.

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Accounts Receivable

Accounts receivable are recorded at original invoice amount less an allowance for uncollectible accounts that management believes will be adequate to absorb estimated losses on existing balances. Management estimates the allowance based on collectability of accounts receivable and prior bad debt experience. Accounts receivable balances are written off against the allowance upon management’s determination that such accounts are uncollectible. Recoveries of accounts receivable previously written off are recorded when received. The allowance for doubtful accounts was $0 as of June 30, 2024 and December 31, 2023.

Financial Accounting Standards Board (“FSAB”) Accounting Standards Codification (“ASC”) 326-20-30-2, Financial Instruments – Credit Losses, requiring a reporting entity to use a pooled approach to estimate expected credit losses for financial assets with similar risk characteristics. If a financial asset does not share similar risk characteristics with other financial assets held by the reporting entity, the allowance for credit losses should be determined on an individual basis. Similar risk characteristics for trade receivables may include customer credit rating, trade receivable aging category (e.g., 30-90 days past due), healthcare industry, and other factors that may influence the likelihood of the customer not being able to pay for the goods or services. The Company utilizes this individual approach for its trade receivables as each customer does not share similar risks.

Trade receivables with certain customers are financial assets analyzed by the Company under the expected credit loss model. To measure expected credit losses, trade receivables are grouped based on shared risk characteristics (i.e., the relevant healthcare industry) and days past due (i.e., delinquency status), while considering the following if applicable:

	·	Customers in relevant healthcare industries share similar risk characteristics associated with the macroeconomic environment of their industry.

	·	The expected credit loss rate is likely to increase as receivables move to older aging buckets. The Company used the following aging categories to estimate the risk of delinquency status: (i) 0 days past due; (ii) 1-30 days past due; (iii) 31-60 days past due; (iv) 61-90 days past due; and (v) over 90 days past due.

Fair Value of Financial Instruments

The Company calculates the fair value of its assets and liabilities which qualify as financial instruments and includes this additional information in the notes to the consolidated financial statements when the fair value is different than the carrying value of these financial instruments. The estimated fair value of cash, accounts receivable, grant receivable, accounts payable and accrued expenses, and notes payable approximate their carrying amounts due to the relatively short maturity of these instruments. The carrying value of lease liability and royalty obligation also approximates fair value since these instruments bear market rates of interest. None of these instruments are held for trading purposes.

See Note 13 and 14 for stock based compensation and other equity instruments.

Fair Value Measurements

The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period. The Company also follows ASC 820 for non-financial assets and liabilities that are re-measured and reported at fair value at least annually.

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The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or that the Company would have paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used to value the assets and liabilities:

Level 1:	Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2:	Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

Level 3:	Unobservable inputs based on the Company’s assessment of the assumptions that market participants would use in pricing the asset or liability.

Derivative Financial Instruments

The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and ASC 815, “Derivatives and Hedging” (“ASC 815”). The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.

The fair value of the event of default penalty put option in connection with the issuance of promissory notes was recognized as a derivative liability and debt discount on the unaudited condensed consolidated balance sheet as of June 30, 2024 and December 31, 2023.

The following table provides information related to the Company’s assets and liabilities measured at fair value on a recurring basis as of June 30, 2024 and December 31, 2023:

	June 30, 2024
	Level 1		Level 2		Level 3		Total
Liabilities:
Derivative liability	$	-	$	-	$	80,190	$	80,190
	$	-	$	-	$	80,190	$	80,190

	December 31, 2023
	Level 1		Level 2		Level 3		Total
Liabilities:
Derivative liability	$	-	$	-	$	53,460	$	53,460
	$	-	$	-	$	53,460	$	53,460

Activity for the three and six months ended June 30, 2024 for the derivative liability was as follows:

	Derivative Liability

Fair value as of December 31, 2023	$	53,460
Fair value at issuance		26,730
Fair value as of March 31, 2024		80,190
Fair value as of June 30, 2024	$	80,190

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Segment Information

Accounting Standards Codification subtopic Segment Reporting 280-10 (“ASC 280-10”) establishes standards for reporting information regarding operating segments in annual financial statements and requires selected information for those segments to be presented in interim financial reports issued to stockholders. ASC 280-10 also establishes standards for related disclosures about products and services and geographic areas. Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions how to allocate resources and assess performance. The information disclosed herein materially represents all of the financial information related to the Company’s principal operating segment.

Long-Lived Assets

The Company follows a “primary asset” approach to determine the cash flow estimation period for a group of assets and liabilities that represents the unit of accounting for a long-lived asset to be held and used. Long-lived assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less cost to sell.

The Company evaluates the recoverability of long-lived assets based upon forecasted undiscounted cash flows. Should impairment in value be indicated, the carrying value of the assets will be adjusted, based on estimates of future discounted cash flows resulting from the use and ultimate disposition of the asset. No impairments were recognized for the three and six months ended June 30, 2024 and 2023.

Intangible Assets

Intangible assets with finite lives are amortized over their estimated useful lives. Intangible assets with indefinite lives are not amortized, but are tested for impairment annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. No impairment was recognized for the three and six months ended June 30, 2024 and 2023.

Software Development Costs

The Company has adopted the provision of ASC 985-20-25, Costs of Software to Be Sold, Leased or Marketed, whereby costs incurred to establish the technological feasibility of a computer software product to be sold, leased or marketed are research and development costs. Research costs are expensed as incurred; costs of producing product masters incurred subsequent to establishing technological feasibility are capitalized; and costs incurred when the product is available for general release to the customers are expensed as incurred. Upgrades and enhancements are capitalized if they result in added functionality which enables the software to perform tasks it was previously incapable of performing.

On July 1, 2021, the Company began development of a proprietary cloud based app that will be marketed and commercialized, for which $47,980 of costs have been capitalized. During the six months ended June 30, 2023, the Company wrote off the $47,980 as impairment loss.

Property and Equipment

Property and equipment are stated at cost, less accumulated depreciation. Depreciation is calculated using the straight-line method over the asset’s estimated useful life of 5 to 15 years. Expenditures for maintenance and repairs are expensed as incurred. When retired or otherwise disposed, the related carrying value and accumulated depreciation are removed from the respective accounts and the net difference less any amount realized from disposition is reflected in earnings.

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Leases

The Company determines if an arrangement is a lease at inception. Operating lease right-of-use assets (“ROU assets”) and short-term and long-term lease liabilities are included on the face of the consolidated balance sheets.

ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at commencement date over the respective lease term in determining the present value of lease payments. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are accounted for as a single lease component. For lease agreements with terms less than 12 months, the Company has elected the short-term lease measurement and recognition exemption, and it recognizes such lease payments on a straight-line basis over the lease term.

Net (loss) Per Share

The Company accounts for net loss per share in accordance with Accounting Standards Codification subtopic 260-10, Earnings Per Share (“ASC 260-10”), which requires presentation of basic and diluted earnings per share (“EPS”) on the face of the statement of operations for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS.

Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during each period. It excludes the dilutive effects of any potentially issuable common shares. The effect of common stock equivalents is anti-dilutive with respect to losses and therefore basic and dilutive is the same.

Diluted net loss per share is calculated by including any potentially dilutive share issuances in the denominator. The following securities are excluded from the calculation of weighted average diluted shares at June 30, 2024 and 2023, respectively, because their inclusion would have been anti-dilutive.

	Six Months Ended
	June 30,
	2024		2023
Shares underlying options outstanding		995,187		882,869
Shares underlying warrants outstanding		1,765,856		850,856
Convertible preferred stock outstanding		240,000		240,000
		3,001,043		1,973,725

Advertising

The Company follows the policy of charging the costs of advertising to expense as incurred. The Company charged to operations $11,590 and $33,638 as advertising costs for the three months ended June 30, 2024 and 2023, respectively. The Company charged to operations $24,208 and $62,786 as advertising costs for the six months ended June 30, 2024 and 2023, respectively.

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Grant Income

On January 17, 2019, the Company received a Notice of Award from the United States Department of Health and Human Services for a grant from the National Institutes of Health (“NIH”) in support of BICX102/BICX104 from the National Institute on Drug Abuse. BICX102 is an implantable pellet of naltrexone that was the original product candidate and BICX104 is another pellet of naltrexone that subsequently became the lead product candidate with minor excipient differences between the BICX102 and BICX104. The grant provides for (i) $2,842,430 in funding during the first year and (ii) $2,831,838 during the second year subject to the terms and conditions specified in the grant, including satisfactory progress of project and the availability of funds. On August 27, 2021, the Company received a Notice of Award from the United States Department of Health and Human Services for a grant from National Institute on Drug Abuse in support of BICX104. The grant provides for $3,453,367 in funding during the third year subject to the terms and conditions specified in the grant, including satisfactory progress of project and the availability of funds. On March 31, 2022, the Company received a Notice of Award from the United States Department of Health and Human Services for a grant from National Institute on Drug Abuse. The grant provides for $99,431 in additional funding during the third year subject to the terms and conditions specified in the grant, including satisfactory progress of project and the availability of funds. Grant payments received prior to the Company’s performance of work required by the terms of the research grant are recorded as deferred income and recognized as grant income once work is performed and qualifying costs are incurred.

On March 1, 2024, the Company’s subsidiary BioCorRx Pharmaceuticals Inc. was awarded a grant of $11,029,977 from the National Institutes of Health’s National Institute on Drug Abuse, ("NIDA"). The grant provides the Company with additional resources for the ongoing research of BICX104, a sustained release naltrexone implant for the treatment of methamphetamine use disorder. The grant provides for (i) $4,131,123 in funding during the first year, (ii) $3,638,268 during the second-year, and (iii) $3,260,586 during the third-year subject to the terms and conditions specified in the grant, including satisfactory progress of project and the availability of funds. Government grants are agreements that generally provide cost reimbursement for certain types of expenditures in return for research and development activities over a contractually defined period.

Grant receivables were $109,736 and $76,266 as of June 30, 2024 and December 31, 2023, respectively. Deferred revenues related to the grant were $0 as of June 30, 2024 and December 31, 2023. $518,667 and $248,006 were recorded as grant income for the three months ended June 30, 2024 and 2023, respectively. $631,630 and $489,155 were recorded as grant income for the six months ended June 30, 2024 and 2023, respectively. The F&A indirect costs were $0 as of June 30, 2024 and December 31, 2023. The grant provides for $516,218 in funding for F&A indirect costs.

Research and development costs

The Company accounts for research and development costs in accordance with the 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 developments costs are expensed when the contracted work has been performed or as milestone results have been achieved. Company-sponsored research and development costs related to both present and future products are expensed in the period incurred. The Company incurred research and development expenses of $536,362 and $238,419 for the three months ended June 30, 2024 and 2023, respectively. The Company incurred research and development expenses of $750,196 and $475,806 for the six months ended June 30, 2024 and 2023, respectively.

Stock Based Compensation

Share-based compensation issued to employees is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period. The Company measures the fair value of the share-based compensation issued to non-employees at the grant date using the stock price observed in the trading market (for stock transactions) or the fair value of the award (for non-stock transactions), which were considered to be more reliably determinable measures of fair value than the value of the services being rendered.

Income Taxes

Deferred income tax assets and liabilities are determined based on the estimated future tax effects of net operating loss and credit carry forwards and temporary differences between the tax basis of assets and liabilities and their respective financial reporting amounts measured at the current enacted tax rates. The Company records an estimated valuation allowance on its deferred income tax assets if it is more likely than not that these deferred income tax assets will not be realized.

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The Company recognizes a tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. As of June 30, 2024 and December 31, 2023, the Company has not recorded any unrecognized tax benefits.

Variable Interest Entity

The Company evaluates all interests in the VIE for consolidation. When the Company’s interests are determined to be variable interests, an assessment is made on whether the Company is deemed to be the primary beneficiary of the VIE. The primary beneficiary of a VIE is required to consolidate the VIE. Accounting Standards Codification (“ASC”) 810, Consolidation, defines the primary beneficiary as the party that has both (i) the power to direct the activities of the VIE that most significantly impact its economic performance, and (ii) the obligation to absorb losses and the right to receive benefits from the VIE which could be potentially significant. Variable interests are considered in making this determination. Where both of these factors are present, the Company is deemed to be the primary beneficiary and the Company consolidates the VIE.

Non-Controlling Interest

A non-controlling interest should be allocated its share of net income or loss, and its respective share of each component of other comprehensive income, in accordance with ASC 810-10-45-20. Due to a management fee equal to 65% of the Medical Corporation’s gross collected monthly revenue, 65% of the Medical Corporation’s earnings was allocated to the Company, and 35% to the non-controlling interest. Due to the Company’s retaining 75.8% ownership of BioCorRx Pharmaceuticals, Inc., 75.8% of BioCorRx Pharmaceuticals, Inc.’s earnings was allocated to the Company, and 24.2% to the non-controlling interest. See accounting policy “Variable Interest Entity” for further information.

Royalty Obligations, net

The Company accounted for royalty obligations as debt in accordance with ASC 470-10-25 and derived a debt discount, which is amortized using the straight line method over the expected life of the arrangement, which is 15 years. The Company has no obligation to repay the then outstanding balance if during the expected life of 15 years the treatment is discontinued. In order to record the discount of the liability, the Company fair valued the royalty and the difference between fair value of the royalty obligation and the gross projected future payments was $7,171,200 and was recorded as non-cash interest expense over the life of the liability and offset to additional paid in capital at inception.

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which requires disclosure of incremental income tax information within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company’s management does not believe the adoption of ASU 2023-09 will have a material impact on its financial statements and disclosures.

There are other 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.

NOTE 3 - GOING CONCERN AND MANAGEMENT’S LIQUIDITY PLANS

As of June 30, 2024, the Company had cash of $8,365 and working capital deficit of $7,142,958. During the six months ended June 30, 2024, the Company used net cash in operating activities of $491,541. The Company has not yet generated any significant revenues and has incurred net losses since inception. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for the next twelve-month period since the date of the financial statements were issued.

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The Company’s primary source of operating funds since inception has been from proceeds from private placements of convertible and other debt and the sale of common stock. 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.

During the six months ended June 30, 2024, the Company issued several promissory notes to related parties and received total proceeds of $235,396. The promissory notes bear no interest and are due on demand.

During the six months ended June 30, 2024, the Company issued one promissory note to a third party and received total proceeds of $200,000. The promissory note has a stated interest rate of 8% per annum and is due within 9 months.

On March 8, 2024, the Company entered into an amendment agreement to a promissory note, which was originally issued to a third party on November 10, 2023. In accordance with the amendment, the parties agreed to modify the amortization payments of the unsecured promissory note. In exchange for the modification, the Company issued 15,000 shares of restricted stock to the debt holder at $1.00 per share for a total value of $15,000.

On March 25, 2024, the Company entered into an amendment agreement to a promissory note, which was originally issued to a third party on December 8, 2023. In accordance with the amendment, the parties agreed to modify the amortization payments of the unsecured promissory note. In exchange for the modification, the Company issued 15,000 shares of restricted stock to the debt holder at $0.89 per share for a total value of $13,350.

On April 24, 2024, the Company entered into an Exchange Agreement (the “Louis 2024 Exchange Agreement”) with Mr. Lucido, pursuant to which Mr. Lucido agreed to exchange of the promissory note then outstanding of $446,426 and the accrued interest on the promissory note of $7,858 and director fees of $90,000 into the Company’s 460,477 shares of common stock at $1.18 per share.

On April 24, 2024, the Company entered into an Exchange Agreement (the “Lourdes 2024 Exchange Agreement”) with Lourdes Felix, the Company’s Chief Executive Officer and Chief Financial Officer, pursuant to which Lourdes Felix agreed to exchange of the director fees of $265,000 into the Company’s 224,196 shares of common stock at $1.18 per share.

Accordingly, the accompanying consolidated 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 consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty.

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NOTE 4 - PREPAID EXPENSES

The Company’s prepaid expenses consisted of the following at June 30, 2024 and December 31, 2023:

	June 30,		December 31,
	2024		2023
Prepaid insurance	$	41,820	$	18,511
Prepaid subscription services		12,089		26,380
	$	53,909	$	44,891

NOTE 5 - PROPERTY AND EQUIPMENT

The Company’s property and equipment consisted of the following at June 30, 2024 and December 31, 2023:

	June 30,			December 31,
	2024			2023
Office equipment	$	45,519		$	45,519
Computer equipment		5,544			5,544
Manufacturing equipment		101,200			101,200
Leasehold improvement		42,288			42,288
		194,551			194,551
Less accumulated depreciation		(156,446	)		(143,608	)
	$	38,105		$	50,943

Depreciation expense charged to operations amounted to $6,419 and $6,420, respectively, for the three months ended June 30, 2024 and 2023. Depreciation expense charged to operations amounted to $12,838 and $12,790, respectively, for the six months ended June 30, 2024 and 2023.

NOTE 6 - LEASE

Operating leases

Prior to 2020, the Company entered into several lease amendments with landlord whereby the Company agreed to lease office space in Anaheim, California. The term expires on January 31, 2025. The lease has escalating payments from $9,905 per month to $11,018 per month. The Company recorded an aggregate value of right to use assets and lease liability of $500,333.

On April 9, 2024, the Company and its landlord agreed that the Company would move to a larger space within the building that currently houses its principal executive offices. The Company extended the term of its lease for an additional 60 months beginning approximately May 1, 2024 (upon the landlord's completion of the work on the new space). The extended term expires on April 30, 2029. The extended lease has payments of $4,545 per month. The Company recorded right to use assets and lease liability of $225,663. During the six months ended June 30, 2024, the Company recognized other income of $32,405.

Lease liability is summarized below:

	June 30,		December 31,
	2024		2023
Total lease liability	$	218,046	$	133,677
Less: short term portion		38,491		122,732
Long term portion	$	179,555	$	10,945

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Maturity analysis under these lease agreements are as follows:

	Total
2024	$	27,272
2025		54,544
2026		54,544
2027		54,544
2028		54,544
2029 and beyond		18,181
Subtotal		263,629
Less: Present value discount		(45,583	)
Lease liability	$	218,046

Lease expense for the three and six months ended June 30, 2024 and 2023 was comprised of the following:

	Three Months Ended
	June 30,
	2024		2023
Operating lease expense	$	18,339	$	36,402
	$	18,339	$	36,402

	Six Months Ended
	June 30,
	2024		2023
Operating lease expense	$	47,436	$	72,804
	$	47,436	$	72,804

During the six months ended June 30, 2024 and 2023, the Company paid $51,430 and $76,926 lease expense in cash, respectively.

Weighted-average remaining lease term and discount rate for operating leases are as follows:

	June 30,		December 31,
	2024		2023
Weighted-average remaining lease term		4.8		1.0

NOTE 7 - INTELLECTUAL PROPERTY/ LICENSING RIGHTS

On October 12, 2018 the Company’s majority owned subsidiary, BioCorRx Pharmaceuticals Inc. acquired six patent families for sustained delivery platforms for the local delivery of biologic and small molecule drugs for an aggregate purchase price of $15,200. Amortization is computed on straight-line method based on estimated useful lives of 13 years. During the three months ended June 30, 2024 and 2023, the Company recorded amortization expense of $295 and $294, respectively. During the six months ended June 30, 2024 and 2023, the Company recorded amortization expense of $589. As of June 30, 2024, the accumulated amortization of these patents was $6,762.

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The future amortization of the patents are as follows:

Year	Amount
2024		580
2025		1,169
2026		1,169
2027		1,169
2028 and after		4,351
	$	8,438

NOTE 8 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consisted of the following as of June 30, 2024 and December 31, 2023:

	June 30,		December 31,
	2024		2023
Accounts payable	$	2,830,043	$	2,473,457
Interest payable on notes payable		1,341,351		1,268,264
Interest payable on notes payable, related parties		547,036		478,920
Deferred insurance		36,734		-
Accrual of loss on contingency		394,550		322,000
Interest payable on EIDL loan		5,598		5,675
Payroll payables		17,324		-
Accrued stock-based compensation		-		43,321
Accrued expenses		157,417		57,542
	$	5,330,053	$	4,649,179

NOTE 9 - NOTES PAYABLE

As of June 30, 2024 and December 31, 2023, the Company had an advance from a third party. The advance bears no interest and is due on demand. The balance outstanding as of June 30, 2024 and December 31, 2023 is $21,480.

On September 9, 2021, the Company issued an unsecured promissory note payable to one third party for $200,000 with principal and interest due June 8, 2022, with a stated interest rate of 25% per annum. The balance outstanding as of June 30, 2024 and December 31, 2023 is $200,000. The interest expense during the three months ended June 30, 2024 and 2023 were $12,466. The interest expense during the six months ended June 30, 2024 and 2023 were $24,932 and $24,795, respectively.

On October 6, 2022, the Company issued an unsecured promissory note payable to a third party for $100,000 with principal and interest due October 6, 2023, with a stated interest rate of 12.5% per annum. The interest rate was increased to 25% on October 7, 2023 due to default. Under the terms of the note the Company shall pay quarterly interest payments of $3,125. The balance outstanding as of June 30, 2024 and December 31, 2023 was $100,000. The interest expense during the three months ended June 30, 2024 and 2023 was $6,233 and $3,117, respectively. The interest expense during the six months ended June 30, 2024 and 2023 was $12,466 and $6,199, respectively. The Company made an interest payment of $6,250 during the six months ended June 30, 2024 and 2023. As additional consideration for the loan the Company issued 16,500 shares of common stock and valued at $31,350, which was recognized as debt discount. During the three months ended June 30, 2024 and 2023, the Company amortized $0 and $7,816 of debt discount as interest expense. During the six months ended June 30, 2024 and 2023, the Company amortized $0 and $15,546 of debt discount as interest expense.

On January 25, 2023, the Company issued an unsecured promissory note payable to a third party for $50,000 with principal and interest due January 25, 2024, with a stated interest rate of 12.5% per annum. The interest rate was increased to 20% on January 26, 2024 due to default. Under the terms of the note the Company shall pay quarterly interest payments of $1,563. The balance outstanding as of June 30, 2024 and December 31, 2023 was $50,000. The interest expense during the three months ended June 30, 2024 and 2023 was $2,493 and $1,558, respectively. The interest expense during the six months ended June 30, 2024 and 2023 was $4,729 and $2,688, respectively. The Company made an interest payment of $1,563 during the six months ended June 30, 2024 and 2023. As additional consideration for the loan the Company issued 4,285 shares of common stock and valued at $6,000, which was recognized as debt discount. During the three months ended June 30, 2024 and 2023, the Company amortized $0 and $1,495 of debt discount as interest expense, respectively. During the six months ended June 30, 2024 and 2023, the Company amortized $395 and $2,580 of debt discount as interest expense, respectively.

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On September 6, 2023, the Company issued an unsecured promissory note payable to one third party for $150,000 with principal and interest due September 6, 2024, with a stated interest rate of 8% per annum. The third party has the option to select the repayment in cash or in stock of the Company at $2.00 per share. The balance outstanding as of June 30, 2024 and December 31, 2023 was $150,000. The interest expense during the three months ended June 30, 2024 was $2,992. The interest expense during the six months ended June 30, 2024 was $5,984. If the Company fails to make any payment due under the terms of the promissory note, the interest rate shall increase to 15% per annum. In connection with the issuance of the promissory note, the Company issued the warrant that entitles the third party to purchase 150,000 common shares. The warrant shall have a term of three years with an exercise price of $2.00 and shall be equitably adjusted to offset the effect of any stock splits and similar events. The Company allocated the proceeds based on the relative fair value of the debt and the warrants, resulting in the recognition of $88,820 of debt discount on such promissory note. As additional consideration for the debt, the Company issued 18,000 shares of common stock valued at $30,240, which was also recognized as debt discount. During the three months ended June 30, 2024, the Company amortized $29,683 of debt discount as interest expense. During the six months ended June 30, 2024, the Company amortized $59,367 of debt discount as interest expense.

On November 10, 2023, the Company issued an unsecured promissory note payable to a third party with principal and interest due August 10, 2024, with a stated interest rate of 8% per annum. The cash proceeds of the promissory note was $200,000, and the principal amount of the promissory note was $220,000. Upon the occurrence of any event of default that has not been cured within 30 calendar days from the date of the event of default, the outstanding balance shall immediately increase to 125% of the outstanding balance immediately prior to the occurrence of the event of default. The fair value of the event of default penalty put option, which was $26,730, was recognized as a derivative liability and debt discount on the consolidated balance sheet at issuance date. The balance outstanding as of June 30, 2024 and December 31, 2023 was $220,000. The interest expense during the three months ended June 30, 2024 was $6,365. The interest expense during the six months ended June 30, 2024 was $10,753. In connection with the issuance of the promissory note, the Company issued the warrant that entitles the third party to purchase 200,000 common shares. The warrant shall have a term of four years with an exercise price of $2.00 and shall be equitably adjusted to offset the effect of any stock splits and similar events. As additional consideration for the debt, the Company issued 24,000 shares of common stock valued at $36,480. The Company allocated the proceeds based on the relative fair value of the debt, the warrants and the stock, resulting in the recognition of $140,355 of debt discount on such promissory note. On March 8, 2024, the Company entered into an amendment agreement to such promissory note. In accordance with the amendment, the parties agreed to modify the amortization payments of the unsecured promissory note. In exchange for the modification, the Company issued 15,000 shares of restricted stock to the debt holder at $1.00 per share for a total value of $15,000, which was recognized as debt discount. During the three months ended June 30, 2024, the Company amortized $64,299 of debt discount as interest expense. During the six months ended June 30, 2024, the Company amortized $122,016 of debt discount as interest expense.

On December 8, 2023, the Company issued an unsecured promissory note payable to a third party with principal and interest due September 8, 2024, with a stated interest rate of 8% per annum. The cash proceeds of the promissory note was $200,000, and the principal amount of the promissory note was $220,000. Upon the occurrence of any event of default that has not been cured within 30 calendar days from the date of the event of default, the outstanding balance shall immediately increase to 125% of the outstanding balance immediately prior to the occurrence of the event of default. The fair value of the event of default penalty put option, which was $26,730, was recognized as a derivative liability and debt discount on the consolidated balance sheet at issuance date. The balance outstanding as of June 30, 2024 and December 31, 2023 was $220,000. The interest expense during the three months ended June 30, 2024 was $4,388. The interest expense during the six months ended June 30, 2024 was $8,776. In connection with the issuance of the promissory note, the Company issued the warrant that entitles the third party to purchase 200,000 common shares. The warrant shall have a term of four years with an exercise price of $2.00 and shall be equitably adjusted to offset the effect of any stock splits and similar events. As additional consideration for the debt, the Company issued 24,000 shares of common stock valued at $27,120. The Company allocated the proceeds based on the relative fair value of the debt, the warrants and the stock, resulting in the recognition of $123,270 of debt discount on such promissory note. On March 25, 2024, the Company entered into an amendment agreement to such promissory note. In accordance with the amendment, the parties agreed to modify the amortization payments of the unsecured promissory note. In exchange for the modification, the Company issued 15,000 shares of restricted stock to the debt holder at $0.89 per share for a total value of $13,350, which was recognized as debt discount. During the three months ended June 30, 2024, the Company amortized $56,910 of debt discount as interest expense. During the six months ended June 30, 2024, the Company amortized $107,026 of debt discount as interest expense.

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On March 14, 2024, the Company issued an unsecured promissory note payable to a third party with principal and interest due December 14, 2024, with a stated interest rate of 8% per annum. The cash proceeds of the promissory note was $200,000, and the principal amount of the promissory note was $220,000. Upon the occurrence of any event of default that has not been cured within 30 calendar days from the date of the event of default, the outstanding balance shall immediately increase to 125% of the outstanding balance immediately prior to the occurrence of the event of default. The fair value of the event of default penalty put option, which was $26,730, was recognized as a derivative liability and debt discount on the consolidated balance sheet at issuance date. The balance outstanding as of June 30, 2024 was $220,000. The interest expense during the three months ended June 30, 2024 was $12,440. The interest expense during the six months ended June 30, 2024 was $13,260. In connection with the issuance of the promissory note, the Company issued the warrant that entitles the third party to purchase 200,000 common shares. The warrant shall have a term of four years with an exercise price of $2.00 and shall be equitably adjusted to offset the effect of any stock splits and similar events. As additional consideration for the debt, the Company issued 24,000 shares of common stock valued at $22,080. The Company allocated the proceeds based on the relative fair value of the debt, the warrants and the stock, resulting in the recognition of $115,419 of debt discount on such promissory note. During the three months ended June 30, 2024, the Company amortized $47,039 of debt discount as interest expense. During the six months ended June 30, 2024, the Company amortized $55,826 of debt discount as interest expense.

The interest expense during the three months ended June 30, 2024 and 2023 were $317,907 and $27,489, respectively. The interest expense during the six months ended June 30, 2024 and 2023 were $499,727 and $53,529, respectively. As of June 30, 2024 and December 31, 2023, the accumulated interest on notes payable was $1,341,351 and $1,268,264, respectively, and was included in accounts payable and accrued expenses on the balance sheet.

The outstanding notes payables as of June 30, 2024 and December 31, 2023 were summarized as below:

	June 30,		December 31,
	2024		2023
Advances from a third party	$	21,480	$	21,480
Promissory note payable dated September 9, 2021		200,000		200,000
Promissory note payable dated October 6, 2022		100,000		100,000
Promissory note payable dated January 25, 2023		50,000		49,605
Promissory note payable dated September 6, 2023, net of debt discount of $21,529 and $80,896, respectively		128,471		69,104
Promissory note payable dated November 10, 2023, net of debt discount of $28,969 and $135,985, respectively		191,031		84,015
Promissory note payable dated December 8, 2023, net of debt discount of $43,778 and $137,454, respectively		176,222		82,546
Promissory note payable dated March 14, 2024, net of debt discount of $86,323 and $0, respectively		133,677		-
	$	1,000,881	$	606,750

NOTE 10 - NOTES PAYABLE-RELATED PARTIES

As of June 30, 2024 and December 31, 2023, the Company had advances from Kent Emry (Chairman of the Company). The balance outstanding as of June 30, 2024 and December 31, 2023 was $1,500.

On January 22, 2013, the Company issued an unsecured promissory note payable to Kent Emry (Chairman of the Board) for $200,000 due January 1, 2018, with a stated interest rate of 12% per annum beginning three months from issuance, payable monthly. Principal payments were due starting February 1, 2015 at $6,650 per month. The lender has an option to convert the note to licensing rights for the State of Oregon. The Company currently is in default of the principal and interest. The balance outstanding as of June 30, 2024 and December 31, 2023 was $163,610.

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On September 9, 2021, the Company issued an unsecured promissory note payable to Kent Emry for $500,000 with principal and interest due June 8, 2022, with a stated interest rate of 25% per annum. The balance outstanding as of June 30, 2024 and December 31, 2023 is $500,000. The interest expense during the three months ended June 30, 2024 and 2023 were $31,164. The interest expense during the six months ended June 30, 2024 and 2023 were $62,328 and $61,986, respectively. If the Company fails to make any payment due under the terms of the promissory note, the Company shall issue a warrant to Kent Emry to which the number of common shares that Kent Emry has the right to purchase equals 119,617 common shares. The warrant shall have a term of three years with an exercise price of $4.14 and shall be equitably adjusted to offset the effect of any stock splits and similar events. On June 8, 2022, the Company issued the warrant that entitles Kent Emry to purchase 119,617 common shares due to the loan default. The fair value of the warrant on June 8, 2022 was $214,975, which the Company recognized as interest expense - related party.

Since September 2022, the Company had received an aggregate of $296,426 advances from Louis C Lucido, a member of the Company’s Board of Directors. On August 29, 2023, the Company issued an unsecured promissory note payable to Louis C Lucido for $150,000 with principal and interest due August 29, 2024, with a stated interest rate of 8% per annum. The promissory note, together with all accrued interest, shall be converted into common shares at a conversion price of $2.00 per share on or before August 29, 2024. The interest expense during the three months ended June 30, 2024 was $789. The interest expense during the six months ended June 30, 2024 was $3,781. In connection with the issuance of the promissory note, the Company issued the warrant that entitles Mr. Lucido to purchase 150,000 common shares. The warrant shall have a term of three years with an exercise price of $2.00 and shall be equitably adjusted to offset the effect of any stock splits and similar events. The Company allocated the proceeds based on the relative fair value of the debt and the warrants, resulting in the recognition of $87,724 of debt discount on such promissory note. As additional consideration for the debt, the Company issued 18,000 shares of common stock valued at $29,340, which was also recognized as debt discount. During the three months ended June 30, 2024, the Company amortized $48,110 of debt discount as interest expense. During the six months ended June 30, 2024, the Company amortized $77,295 of debt discount as interest expense. On April 24, 2024, the Company entered into an Exchange Agreement (the “Louis 2024 Exchange Agreement”) with Mr. Lucido, pursuant to which Mr. Lucido agreed to exchange of the promissory note then outstanding of $446,426 and the accrued interest on the promissory note of $7,858 and director fees of $90,000 into the Company’s 460,477 shares of common stock at a price of $1.18 per share based on the underlying market value of the common stock at the date of issuance. As of June 30, 2024 and December 31, 2023, the outstanding balance of advances from Mr. Lucido and promissory notes issued to Mr. Lucido was $0 and $275,000, respectively.

On November 1, 2022, the Company issued an unsecured promissory note payable to Louis C Lucido for $300,000 with principal and interest due November 1, 2023, with a stated interest rate of 5% per annum. Under the terms of the note the Company shall pay quarterly interest payments of $3,750. On April 3, 2023, the Company entered into the Louis 2023 Exchange Agreement, pursuant to which Mr. Lucido agreed to exchange of the promissory note then outstanding of $300,000 and the accrued interest on the promissory note of $13,892 into the Company’s 183,606 shares of common stock at a price of $1.71 per share based on the underlying market value of the common stock at the date of issuance, resulting in the recognition of $34,338 of loss on settlement of debt. The balance outstanding as of June 30, 2024 and December 31, 2023 was $0. As the Company failed to make a payment due under the terms of the promissory note, the stated interest rate of the note was increased to 20% on February 1, 2023. The interest expense during the three months ended June 30, 2024 and 2023 was $0 and $7,687, respectively. The interest expense during the six months ended June 30, 2024 and 2023 was $0 and $11,386, respectively. As additional consideration for the loan the Company issued 33,000 shares of common stock and valued at $59,400, which was recognized as debt discount. During the three months ended June 30, 2024 and 2023, the Company amortized $0 and $488, respectively, of debt discount as interest expense. During the six months ended June 30, 2024 and 2023, the Company amortized $0 and $15,135, respectively, of debt discount as interest expense.

As of June 30, 2024 and December 31, 2023, the Company owed $200,243 and $136,273 advances to Lourdes Felix.

The interest expense – related parties during the three months ended June 30, 2024 and 2023 were $203,549 and $162,825, respectively, which includes the amortization of royalty obligations as interest expense of $118,554 (see Note 12). The interest expense – related parties during the six months ended June 30, 2024 and 2023 were $390,377 and $332,205, respectively, which includes the amortization of royalty obligations as interest expense of $237,108 and $233,888, respectively (see Note 12). As of June 30, 2024 and December 31, 2023, the accumulated interest on related parties notes payable was $547,036 and $478,920, respectively, and was included in accounts payable and accrued expenses on the balance sheet.

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The outstanding notes payables to related parties as of June 30, 2024 and December 31, 2023 were summarized as below:

	June 30,		December 31,
	2024		2023
Advances from Kent Emry	$	1,500	$	1,500
Advances from Louis C Lucido		-		125,000
Advances from Lourdes Felix		200,243		136,273
Promissory notes payables to Kent Emry		663,610		663,610
Promissory note payable to Louis C Lucido, net of debt discount of $0 and $77,295, respectively		-		72,705
	$	865,353	$	999,088

NOTE 11 - ECONOMIC INJURY DISASTER LOAN

On July 17, 2020, the Company executed the standard loan documents required for securing a loan from SBA under its Economic Injury Disaster Loan assistance program in light of the impact of the COVID-19 pandemic on the Company’s business. Pursuant to the loan agreement, the principal amount of the Economic Injury Disaster Loan (“EIDL”) is $74,300, with proceeds to be used for working capital purposes. The EIDL loan is secured by the tangible and intangible personal property of the Company.

In accordance with the terms of the note: (i) interest accrues at the rate of 3.75% per annum, (ii) installment payments, including principal and interest, of $363 monthly, will begin thirty (30) months from the date of the promissory note, (iii) the balance of principal and interest will be payable over thirty (30) years from the date of the promissory note and (iv) SBA is granted a continuing security interest in and to any and all tangible and intangible personal property of the Company to secure payment and performance of all debts, liabilities and obligations of Borrower to SBA.

On April 28, 2020, the Company received $5,000 from the SBA as an advance on the EIDL, and the advance was forgiven during the prior period.

The interest expense during the three months ended June 30, 2024 and 2023 was $695. The interest expense during the six months ended June 30, 2024 and 2023 was $1,390 and $1,382, respectively. As of June 30, 2024 and December 31, 2023, the accumulated interest on EIDL Loan was $5,598 and $5,675, respectively.

During the six months ended June 30, 2024 and 2023, the Company made interest payment of $1,466 and $1,492, respectively.

The future principal payments are as follows:

Year	Amount
2024	$	-
2025		-
2026		16
2027		1,598
2028 and after		70,140
	$	71,754

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NOTE 12 - ROYALTY OBLIGATIONS, NET

In March 2019, the Company entered into two Subscription and Royalty Agreements (the “Subscription and Royalty Agreements”). One was with Louis and Carolyn Lucido CRT LLC, managed by Mr. Lucido, a member of the Company’s Board of Directors and the other one was with the J and R Galligan Revocable Trust, managed by Mr. Galligan, a holder of between 15% and 20% of the Company’s shares of common stock and a member of the Company’s Board of Directors. Pursuant to the Subscription and Royalty Agreements: (i) each party would purchase shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), in the aggregate amount of $3,000,000 at a purchase price of $15.00 per share (the “Purchase Price”), for a total of 200,000 shares of Common Stock; and (ii) the Company shall pay each (a) a total of $37.50 from the gross revenue derived from each of its weight loss treatments sold in the United States starting on the first (1st) day that the first unit of the treatment is sold (the “Initial Sales Date”) and ending on the third (3rd) anniversary of the Initial Sales Date; and (b) a total of $25.00 from the gross revenue derived from each of its weight loss treatments sold in the United States starting on the day following the third (3rd) anniversary of the Initial Sales Date and ending on the fifteenth (15th) anniversary of the Initial Sales Date (the “Royalty”).

The Company accounted for this transaction as debt in accordance with ASC 470-10-25 and derived a debt discount, which is amortized using the straight line method over the expected life of the arrangement, which is 15 years. The Company has no obligation to repay the then outstanding balance if during the expected life of 15 years the treatment is discontinued. In order to record the discount of the liability, the Company fair valued the royalty and the difference between fair value of the royalty obligation and the gross projected future payments was $7,171,200 and was recorded as non-cash interest expense over the life of the liability and offset to additional paid in capital at inception.

During the three months ended June 30, 2024 and 2023, the Company amortized $118,554 as interest expense. During the six months ended June 30, 2024 and 2023, the Company amortized $237,108 and $233,888 as interest expense, respectively.

NOTE 13 - STOCKHOLDERS’ EQUITY/(DEFICIT)

Convertible Preferred stock

The Company is authorized to issue 600,000 shares of preferred stock with no par value. As of June 30, 2024 and December 31, 2023 and 2022, the Company had 80,000 shares of Series A preferred stock and 160,000 shares of Series B preferred stock issued and outstanding.

As of June 30, 2024 and December 31, 2023, each share of Series A preferred stock is entitled to one thousand (1,000) votes and is convertible into one share of common stock. 30,000 shares of Series A Preferred Stock are owned by management. The Series A Preferred Stock is not entitled to dividends and there are no liquidation rights associated with Series A. Each share of Series A Preferred Stock may be converted, at the option of the holder, into one (1) fully paid and nonassessable share of Common Stock, par value $0.001.

As of June 30, 2024 and December 31, 2023, each share of Series B stock is entitled to two thousand (2,000) votes and is convertible into one share of common stock. 120,000 shares of Series B Preferred Stock are owned by management. The Series B Preferred Stock is not entitled to dividends and there are no liquidation rights associated with Series B. Each share of Series B Preferred Stock may be converted, at the option of the holder, into one (1) fully paid and nonassessable share of Common Stock, par value $0.001.

Common stock

Six months ended June 30, 2023

During the six months ended June 30, 2023, the Company issued an aggregate of 71,961 shares of its common stock for services rendered valued at $125,435 based on the underlying market value of the common stock at the date of issuance, among which 33,697 shares valued at $58,949 were issued to the board of directors for board compensation.

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During the six months ended June 30, 2023, the Company issued an aggregate of 342,592 shares of its common stock pursuant to the Lucido 2023 Subscription Agreement and the Galligan 2023 Subscription Agreement (as defined in Note 15). The common shares were recorded at a price of $1.75 per shares for gross proceeds to the Company of $600,000.

During the six months ended June 30, 2023, the Company issued an aggregate of 174,409 shares of its common stock pursuant to the 2023 Q2 Subscription Agreement (as defined in Note 14). The common shares were recorded at a price of $1.72 per shares for gross proceeds to the Company of $300,000.

During the six months ended June 30, 2023, the Company issued 183,606 shares of its common stock in connection with conversion of promissory notes (see Note 10). The 183,606 shares of common stock were valued at an aggregate value of $313,892, resulting in $34,338 of loss on settlement of debt recognized for the difference between the fair value of common stock issued and the carrying value of the debt. During the six months ended June 30, 2023, the Company also issued 24,000 shares of its common stock in connection with conversion of accounts payable of $48,000. The 24,000 shares of common stock were valued at an aggregate value of $48,000.

During the six months ended June 30, 2023, the Company issued 4,285 shares as additional consideration for the issuance of a promissory note (see Note 9). The 4,285 shares of common stock were valued at an aggregate value of $6,000.

Six months ended June 30, 2024

During the six months ended June 30, 2024, the Company issued an aggregate of 360,998 shares of its common stock for services rendered valued at $264,404 based on the underlying market value of the common stock at the date of issuance, among which 121,918 shares valued at $85,154 were issued to the board of directors for board compensation.

During the six months ended June 30, 2024, the Company issued an aggregate of 30,000 shares as consideration to the holders of promissory notes entering into the amended agreements to the promissory notes (see Note 9). The 30,000 shares of common stock were valued at an aggregate value of $28,350. The Company also issued 24,000 shares as additional consideration for the issuance of one promissory note (see Note 9). The 24,000 shares of common stock were valued at a value of $11,867.

During the six months ended June 30, 2024, the Company issued 460,477 shares of its common stock at $1.18 per share in connection with conversion of the promissory note then outstanding of $446,426 and the accrued interest on the promissory note of $7,858 and director fees of $90,000. During the six months ended June 30, 2023, the Company also issued 224,196 shares of its common stock at $1.18 per share in connection with conversion of director fees of $265,000.

During the six months ended June 30, 2024, the Company issued 9,374 shares of its common stock in connection with the 2023 Q4 Lucido Subscription Agreement (as defined below) and the 2023 Q4 Galligan Subscription Agreement (as defined below).

As of June 30, 2024 and December 31, 2023, the Company had 9,783,074 shares and 8,674,029 shares of common stock issued and outstanding, respectively.

NOTE 14 - STOCK OPTIONS AND WARRANTS

Options

On November 13, 2014, our Board of Directors authorized and approved the adoption of the Plan effective November 13, 2014 (2014 Stock Option Plan) under which an aggregate of 20% 290,879 shares) of the issued and outstanding shares may be issued. The plan shall terminate ten years after the plan’s adoption by the board of directors. We granted an aggregate 145,000 stock options. As of June 30, 2024, an aggregate total of 145,879 can still be granted under the plan.

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On June 15, 2016, our board of Directors authorized and approved the adoption of the Equity Incentive Plan effective June 15, 2016 (2016 Equity Incentive Plan) under which an aggregate of 656,250 shares may be issued. The plan shall terminate ten years after the plan’s adoption by the board of directors. We granted an aggregate of 330,350 stock options. As June 30, 2024, an aggregate total of 325,900 options can still be granted under the plan.

On May 15, 2018, the Board of Directors approved and adopted the BioCorRx Inc. 2018 Equity Incentive Plan (2018 Stock Option Plan) under which an aggregate of 450,000 shares may be issued. The plan shall terminate ten years after the plan’s adoption by the board of directors. The Company has granted an aggregate of 380,008 stock options. As of June 30, 2024, an aggregate total of 69,992 options can still be granted under the plan.

On April 22, 2022, the Board of Directors approved and adopted the BioCorRx Inc. 2022 Equity Incentive Plan (2022 Stock Option Plan) under which an aggregate of 695,000 shares may be issued. The plan shall terminate ten years after the plan’s adoption by the board of directors. The Company has granted an aggregate of 190,960 stock options. As of June 30, 2024, an aggregate total of 504,040 options can still be granted under the plan.

During the six months ended June 30, 2024, the Company approved the grant of 122,911 stock options to two directors valued at $75,135. The term of the options was five years, and the options vested immediately.

Option valuation models require the input of highly subjective assumptions. The fair value of stock-based payment awards was estimated using the Black-Scholes option model with a volatility figure derived from using the Company’s historical stock prices. The Company accounts for the expected life of options based on the contractual life of options for non-employees. For employees, the Company accounts for the expected life of options in accordance with the “simplified” method, which is used for “plain-vanilla” options, as defined in the accounting standards codification. The risk-free interest rate was determined from the implied yields of U.S. Treasury zero-coupon bonds with a remaining life consistent with the expected term of the options.

In applying the Black-Scholes option pricing model, the Company used the following assumptions during the six months ended June 30, 2024:

	2024
Risk-free interest rate		3.93%-4.33	%
Expected term (years)		5.00
Expected volatility		149.49%-153.16	%
Expected dividends		0.00

The following table summarizes the stock option activity for the six months ended June 30, 2024:

Weighted-