SEC Filing Document

Company: BIOVENTRIX, INC.
Ticker: 
CIK: 1283259
Filing Type: DRS
Document Type: DRS
Date Filed: 2025-08-05
Accession Number: 0001641172-25-022123
Exchange: 
SIC Code: 3841
SIC Description: Surgical & Medical Instruments & Apparatus
URL: https://www.sec.gov/Archives/edgar/data/1283259/000164117225022123/filename1.htm

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income tax assets, the Company considers all available positive and negative evidence, including its operating results, ongoing tax planning and forecasts of future taxable income on a jurisdiction-by-jurisdiction basis. In the event the Company determines that it would be able to realize its deferred income tax assets in the future in excess of their net recorded amount, it would make an adjustment to the valuation allowance that would reduce the provision for income taxes. Conversely, in the event that all or part of the net deferred tax assets are determined not to be realizable in the future, an adjustment to the valuation allowance would be charged to earnings in the period when such determination is made. As of December 31, 2024 and 2023, the Company has recorded a full valuation allowance on its net deferred tax assets. BIOVENTRIX, INC. Notes to Consolidated Financial Statements March 31, 2025 and 2024 (unaudited)

Accounting
for uncertain tax positions requires the Company to use a two-step approach to recognize and measure uncertain tax positions. The first
step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely
than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second
step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. The Company
classifies the liability for unrecognized tax benefits as current to the extent that the Company anticipates payment (or receipt) of
cash within one year. Interest and penalties related to uncertain tax positions are recognized in the provision for income taxes.

Stock-based
compensation – The Company measures and recognizes stock-based compensation expense in the financial statements for all share-based
payment awards made to employees, directors, and non-employees based on estimated fair values on the date of grant based on using the
Black- Scholes option pricing model. Common stock issued for services are recorded based on the fair value of the consideration received
or the fair value of the equity instruments issued, whichever is more reliably measurable.

The
Company’s determination of fair value of share-based payment awards on the date of grant using the Black-Scholes option-pricing
model is affected by the Company’s estimated fair value of common stock as well as assumptions regarding a number of highly complex
and subjective variables. These variables include, but are not limited to:

Expected
Term – Expected term represents the period that the Company’s stock-based awards are expected to be outstanding and is
determined using the simplified method.

Expected
Volatility – Expected volatility is estimated by studying the volatility of comparable public companies for similar terms.

Expected
Dividend – The Black-Scholes valuation model calls for a single expected dividend yield as an input.

Risk-Free
Interest Rate – The risk-free interest rate is based on the U.S. Treasury zero-coupon issued in effect at the time of grant
for periods corresponding with the expected term of the option.

Stock-based
compensation expense for all share-based payment awards is based on the grant date calculated fair value. The Company recognizes these
compensation costs, net of an estimated forfeiture rate, and recognizes the compensation costs for only those shares expected to vest
on a straight-line basis over the requisite service period of the award, which is generally the option vesting term of four years. The
Company estimated the forfeiture rate based on its historical experience for annual grant years where the majority of the vesting terms
have been satisfied.

The
Financial Accounting Standards Board (FASB) has issued several new accounting standards that are not yet effective for the Company, including
ASU 2023-01 (Leases – Common Control Arrangements), ASU 2023-02 (Equity Method Investments), ASU 2023-05 (Joint Venture Formations),
and ASU 2023-07 (Segment Reporting).

BIOVENTRIX,
INC.

Notes
to Consolidated Financial Statements

March
31, 2025 and 2024

(unaudited)

The
Company has evaluated these new standards and does not expect them to have a material impact on its financial position, results of operations,
or cash flows upon adoption.

Note
3 – Balance sheet components:

Inventories
consist of the following:

March
31 December

Raw
materials $	524 $	-

Finished
goods - 295,024

Reserve
for obsolescence - (295,024	)

Property
and equipment consist of the following:

March
31 December

Leasehold
improvements $	229,742 $	229,742

Accumulated
depreciation (94,156	) (82,858	)

Depreciation
expense of $11,299 was recorded for the three months ended March 31, 2025 and 2024.

Accrued
liabilities consist of the following:

March
31 December

Accrued
payroll liabilities $	244,177 $	225,087

Accrued
interest 559,152 352,105

Royalties 190,213 190,213

Other
accrued expenses 45,533 16,225

Note
4 – Convertible notes payable:

From
March 2024 through August 2024, the Company issued $3,000,000 in principal amount of its secured convertible promissory notes (the “Series
A Secured Convertible Notes”) to accredited investors the repayment of which is secured by a grant of security interest in all
of the Company’s assets. The Series A Secured Convertible Notes accrue interest at the annual rate of 15% compounded quarterly
and have a maturity date of December 31, 2027. The aggregate limit of the Series A Convertible Notes that can be issued is $3,000,000.

A member of the Board of Directors and entities
controlled by him purchased $1,830,000 Series A Secured Convertible Notes from the Company. See Note 5.

BIOVENTRIX,
INC.

Notes
to Consolidated Financial Statements

March
31, 2025 and 2024

(unaudited)

A member of the Board
of Directors and entities controlled by him purchased $1,830,000 Series A Secured Convertible Notes from the Company. See Note 5.

The
conversion features of the Series A Secured Convertible Notes are as follows:

Automatic
Conversion – The outstanding principal and unpaid accrued interest of each note shall be automatically converted into either
(i) such equity securities sold in the Qualified Financing (equity financing of at least $20 million) a conversion price equal to the
price paid per share for the equity securities paid by the investors in the Qualified Financing multiplied by 0.75, or (ii) Series A
Preferred Stock of the Company at the price of $1.00 per share.

Non-Qualified
Financing Conversion – The outstanding principal and unpaid accrued interest of each note may, at the sole election of the
noteholder, be converted into either (i) such equity securities sold in the Non-Qualified Financing (equity financing of at least $10
million) at a conversion price equal to the price paid per share for the equity securities paid by the investors in the Non-Qualified
Financing multiplied by 0.75, or (ii) Series A Preferred Stock of the Company at the price of $1.0 per share.

Maturity
Conversion – If the closing of a Qualified Financing or a Non-Qualified has not occurred on or before the Maturity Date, then
the holder of each note shall elect either: (i) the Company pay the holder an amount equal to the sum of all accrued and unpaid interest
due plus (2) two times (2x) the outstanding principal balance; or (ii) the outstanding principal and unpaid accrued interest be converted
into Series A Preferred Stock at the price of $1.00 per share.

Corporate
Transaction Conversion – In the event of a Corporate Transaction the holder of each note may elect either: (i) the sum of all
accrued and unpaid interest due plus (2) two times (2x) the outstanding principal balance; or (ii) the outstanding principal and unpaid
accrued interest will convert, effective immediately prior to, but contingent upon, the consummation of such Corporate Transaction, into
Series A Preferred Stock at the price of $1.00 per share.

From
October 2024 through December 31, 2024, the Company issued $1,710,000 in principal amount of its secured convertible promissory notes
(the “Series A-1 Secured Convertible Notes”) to accredited investors the repayment of which is secured by a grant of security
interest in all of the Company’s assets which security interest is pari passu to the security interest granted to the Secured Convertible
Note holders.

During
the three months ended March 31, 2025, the Company issued $450,000 of Series A-1 Secured Convertible Notes. From April 1, 2025 through
July 8, 2025 the Company issued $1,317,000 of Series A-1 Secured Convertible Notes bringing the total raised to $3,477,000. The aggregate
limit of the Series A-1 Secured Convertible Notes that can be issued is $7,500,000.

The
Series A-1 Secured Convertible Notes accrue interest at the annual rate of 15% compounded quarterly and have a maturity date of December

BIOVENTRIX,
INC.

Notes
to Consolidated Financial Statements

March
31, 2025 and 2024

(unaudited)

The
conversion features of the Series A-1 Secured Convertible Notes are as follows: