Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes appearing elsewhere in this Quarterly Report on Form 10-Q. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those discussed below.

Business Overview

Genvor, through its wholly-owned subsidiary, Genvor Inc., is developing an AI-enabled peptide platform focused on proprietary peptide candidates for agricultural crop protection, crop optimization and related health and wellness applications. The Company's most advanced scientific foundation is its antimicrobial peptide platform ("AMPs"), which are designed to inhibit or disrupt microbial pathogens through mechanisms that may include membrane interaction, increased permeability, pore formation, cell wall and plasma membrane disruption, and cytosolic leakage.

The Company's peptide technology has advanced from in vitro testing into transgenic maize greenhouse studies. Peer-reviewed published data showed that the Company's peptides reduced growth of numerous bacterial and fungal pathogens, and that its lead product candidates, AGM182, GV185 and GV187, reduce fungal growth and aflatoxin accumulation in transgenic maize. The Company intends to build its agricultural commercialization strategy around two complementary pathways: (i) seed traits, in which selected peptides are expressed internally by crops, and (ii) foliar biological crop protection products, in which selected peptides are externally applied.

The Company also intends to use its peptide library and its AI-enabled peptide design platform, BioCypher, to further design, identify, optimize and license peptide candidates to third parties, including potential partners in agriculture and human health and wellness. In human health and wellness, the Company intends to apply BioCypher through a business-to-business model under which its role would be to design, identify, optimize and license peptide candidates to third-party companies for potential use in consumer health, wellness, cosmetic, topical, nutraceutical and functional support applications; however, the Company is not currently positioned as a vertically integrated direct-to-consumer wellness product company.

The Company's BioCypher platform encompasses multiple classes of engineered peptides designed to address distinct agricultural and human health and wellness challenges.

Agriculture

Over the next four years, the Company intends to focus on researching and developing portfolio solutions for the following:

Foliar Segments:

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Fungicides: AMPs to control key pathogens;

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Insecticides: insecticidal peptides to control key insects and nematodes; and

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Biostimulants (emerging): crop-enhancing peptides for abiotic stress management and nutrient use efficiency.

Traits Segments:

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Insect resistance: traits to control key insects and nematodes;

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Fungal resistance (emerging): traits to control key pathogens; and

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Nutritional enhancement & quality (emerging): nutritionally enhanced peptides to improve the nutritional value of crops.

Critical Accounting Policies

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") 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 revenues and expenses during the reporting period. Changes in these estimates and assumptions may have a material impact on the condensed consolidated financial statements and accompanying notes. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, actual results could differ significantly from estimates.

Significant estimates include the valuation of deferred tax assets and the associated valuation allowances, the fair value of the Company's common stock, the valuation of stock-based compensation, the fair value of warrants classified as liabilities, and the grant-date fair value of equity instruments issued as compensation for services.

Income Taxes

Income taxes are accounted for pursuant to Accounting Standards Codification ("ASC") 740 "Accounting for Income Taxes," which is an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company's financial statements or tax returns. The charge for taxes is based on the results for the period as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax basis used in the computation of assessable tax profit. In principle, deferred tax liabilities are recognized for all taxable temporary differences, and deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilized.

Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity, in which case the deferred tax is charged to equity. Deferred tax assets and liabilities are offset when they are related to income taxes levied by the same taxation authority and we intend to settle its current tax assets and liabilities on a net basis.

Stock-based Compensation

The Company accounts for stock-based compensation by measuring and recognizing compensation expense for all share-based awards, including stock warrants and stock grants, based on estimated grant-date fair values. The Company measures employee and non-employee awards at the date of grant, which generally is the date at which the Company and the non-employee reach a mutual understanding of the key terms and conditions of a share-based payment award.

The Company uses the straight-line attribution method to allocate compensation cost to reporting periods over the requisite service period during which the employee or non-employee is required to provide services in exchange for the award. The Company has elected to account for forfeitures of awards as they occur, with previously recognized compensation reversed in the period that the awards are forfeited.

Warrants

The Company accounts for warrants issued in connection with its financing transactions as either equity-classified or liability-classified instruments based on an assessment of the specific terms of each warrant under ASC 480 and ASC 815-40. The assessment considers whether the instrument is freestanding, whether it meets the definition of a liability under ASC 480, and whether it satisfies the conditions for equity classification under ASC 815-40, including whether the instrument is considered indexed to the Company's own common stock. The assessment is performed at issuance and at each subsequent reporting date.

Equity-classified warrants are recorded within additional paid-in capital at their allocated value on the date of issuance and are not subsequently remeasured. Liability-classified warrants are recorded at fair value on the date of issuance and are remeasured to fair value at each reporting date, with the change in fair value recognized in other income (expense). Upon exercise, a liability-classified warrant is remeasured to fair value as of the exercise date and the resulting amount is reclassified to stockholders' equity together with any exercise proceeds.

The warrants issued in connection with the Company's convertible notes payable provide that the exercise price of the warrant is conformed to the conversion price under the related note. Under the terms of that note, the conversion price may in specified circumstances be adjusted to an amount determined by reference to a market price of the Company's common stock. Because the exercise price of the warrants is therefore not fixed, the warrants do not satisfy the condition in ASC 815-40-15-7C that the settlement amount equal the difference between the fair value of a fixed number of shares and a fixed monetary amount, and the warrants are classified as liabilities.

The warrants issued in connection with our convertible notes payable are classified as a liability and are remeasured to fair value at each reporting date, with the change recognized in earnings. Fair value is estimated using an option-pricing model and is classified within Level 3 of the fair value hierarchy. The measurement is most sensitive to the price of our common stock and to expected volatility, and to a lesser extent to the risk-free interest rate and the remaining term of the warrants. Because our common stock is thinly traded, expected volatility is estimated by reference to comparable publicly traded companies rather than our own trading history, and the share price input is derived from executed transactions over a trailing period rather than a single quoted price. A change in either input would change the amount recognized in earnings. Because the warrants have a five-year term, this measurement will continue to affect our results in each reporting period until the warrants are exercised or expire.

Preferred Stock

The Series C Preferred Stock issued to an advisor is measured once, at its grant-date fair value, and is not subsequently remeasured. That measurement depends on two assumptions that are inherently uncertain. The first is the probability that our common stock is listed on a national securities exchange before April 14, 2027, which determines which of the two settlement formulas in the Certificate of Designation applies. The second is a discount for lack of marketability, which reflects the restricted nature of the securities and the limited trading in our common stock. Both are management estimates. A higher assumed probability of listing, or a lower marketability discount, would each increase the expense recognized. Because the award is equity-classified and vested at issuance, a change in either assumption in a later period does not change the amount already recognized.

Fair Value of Common Stock

Our common stock is quoted on the Over-the-Counter ("OTC") market and does not trade on many days, so determining its fair value for the purpose of measuring equity instruments issued and share-based payments requires judgment. Where no trade is reported on a measurement date, we do not rely on the last reported sale price, which may reflect an isolated transaction on an earlier date, and instead determine fair value by reference to a volume-weighted average price of executed transactions over a trailing period. Applying a different basis would change the amounts recognized for equity issued and for share-based payments during the period.

Our convertible notes payable and our Series C Preferred Stock each contain a conversion feature. Whether such a feature must be separated from its host contract and carried as a derivative at fair value through earnings depends on judgments that are not free from doubt, including whether the feature is clearly and closely related to the host contract, whether our common stock is readily convertible to cash under ASC 815-10-15-83(c), given the limited trading volume in our common stock, and whether the instrument is within the scope of ASC 718 and therefore excluded from derivative accounting under ASC 815-10-15-74(b). We have concluded that no embedded feature requires separation, and no derivative liability has been recognized. A different conclusion on any of these judgments would require us to recognize a derivative liability measured at fair value at each reporting date, with changes in fair value recognized in earnings, which could have a material effect on our reported liabilities and net loss.

Recent Accounting Standards

For details of applicable new accounting standards, please, refer to Recent Accounting Standards in Note 2 of our condensed consolidated financial statements accompanying this Quarterly Report on Form 10-Q.

RESULTS OF OPERATIONS

Comparison of Results of Operations for the Three Months Ended June 30, 2026 and 2025

Revenues

We did not generate any revenue during the three months ended June 30, 2026 and 2025.

Operating Expenses

For the three months ended June 30, 2026 and 2025 operating expenses consisted of the following:

		Three Months Ended June 30,
		2026				2025
Research and development expenses		$	205,977			$	271,816
Advertising and marketing expenses			15,281				-
Professional fees			481,851				80,356
Compensation and related benefits			1,516,403				184,824
Other general and administrative			261,501				40,547
		$	2,481,013			$	577,543

Research and Development

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For the three months ended June 30, 2026, research and development expenses decreased by $65,839 or 24.2%, compared to the three months ended June 30, 2025. This decrease was primarily due to the board approving a $100,000 bonus in May 2025 to each of our two scientific advisors pursuant to a milestone defined in their consulting agreements being met, offset by additional compensation expense totaling $161,856 under the Company's tax reimbursement policy (see Note 8 of the accompanying condensed consolidated financial statements) and a $27,695 decrease in general research and development expenses. We expect our research and development expenses to increase as we advance testing and validation of our peptide candidates and continue to develop our BioCypher platform in support of potential future licensing and collaboration agreements.

Advertising and Marketing Expenses

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For the three months ended June 30, 2026, advertising and marketing expenses increased 100% to $15,281, as compared to $0 during the three months ended June 30, 2025. The increase is due to additional marketing services used during the period.

Professional Fees

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Professional fees primarily consisted of accounting fees, audit fees, legal service fees, consulting fees, investor relations service charges, and other fees. For the three months ended June 30, 2026, professional fees increased by $401,495, or 499.6%, as compared to the three months ended June 30, 2025. The increase is due primarily to $381,641 of professional services paid with Series C Preferred Stock issued pursuant to an advisory agreement executed during the period.

Compensation and Related Benefits

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For the three months ended June 30, 2026, compensation and related benefits expenses increased by $1,331,579, or 720.5%, as compared to the three months ended June 30, 2025. The increase is due primarily to $1,201,729 of expense recognized under the Company's tax reimbursement policy (see Note 8 of the accompanying condensed consolidated financial statements).

Other General and Administrative Expenses

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Other general and administrative expenses mainly consist of OTC listing fees, office supplies, insurance expense, travel and entertainment expenses, and other miscellaneous items. For the three months ended June 30, 2026, other general and administrative expenses increased by $220,954, or 544.9%, as compared to the three months ended June 30, 2025. The increase is due primarily to $204,334 of accrued penalties and interest recognized during the three months ended June 30, 2026 under the Company's tax reimbursement policy (see Note 8 of the accompanying condensed consolidated financial statements).

Loss from Operations

During the three months ended June 30, 2026, and 2025, the Company incurred a loss from operations of $2,481,013 and $577,543, respectively. The increase in the loss from operations is attributable to the reasons above.

Other Income (Expenses), net

Other income (expenses), net mainly includes interest expense related to our notes payable and the change in fair value of our warrant liabilities.

Other expenses, net totaled $75,455 for the three months ended June 30, 2026, as compared to other income, net of $179,764 for the three months ended June 30, 2025, a change of $(255,219), or (142.0)%. The change is primarily due to a gain on settlement of a note payable of $187,000 during the three months ended June 30, 2025 and an increase in interest expense due on the convertible notes payable issued during the three months ended June 30, 2026.

Income Taxes

We recorded no income tax expense or benefit for the three months ended June 30, 2026 and 2025, as the deferred tax assets arising from our losses are fully offset by a valuation allowance.

Net Loss

As a result of the factors described above, our net loss was $2,556,468, or $0.07 per share (basic and diluted), for the three months ended June 30, 2026, as compared to $397,779, or $0.01 per share (basic and diluted), for the three months ended June 30, 2025, an increase of $2,158,689, or 542.7%.

For the Nine Months Ended June 30, 2026, and 2025

Revenues

We did not generate any revenue during the nine months ended June 30, 2026 and 2025.

Operating Expenses

For the nine months ended June 30, 2026 and 2025 operating expenses consisted of the following:

		Nine Months Ended June 30,
		2026				2025
Research and development expenses		$	320,352			$	390,052
Advertising and marketing expenses			42,073				3,758
Professional fees			728,811				100,436
Compensation and related benefits			2,042,749				5,283,418
Other general and administrative expenses			317,175				73,349
		$	3,451,160			$	5,851,013

Research and Development

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For the nine months ended June 30, 2026, research and development expenses decreased by $69,700, or 17.9%, compared to the nine months ended June 30, 2025. This decrease was primarily due the board approving a $100,000 bonus in May 2025 to each of our two scientific advisors pursuant to a milestone defined in their consulting agreements being met, offset by additional compensation expense totaling $161,856 under the Company's tax reimbursement policy (see Note 8 of the accompanying condensed consolidated financial statements) and a $31,556 decrease in general research and development expenses. We expect our research and development expenses to increase as we advance testing and validation of our peptide candidates and continue to develop our BioCypher platform in support of potential future licensing and collaboration agreements.

Advertising and Marketing Expenses

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For the nine months ended June 30, 2026, advertising and marketing expenses increased by $38,315, or 1,019.6%, as compared to the nine months ended June 30, 2025. The increase is due to the execution of a marketing services agreement during the nine months ended June 30, 2026.

Professional Fees

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Professional fees primarily consisted of accounting fees, audit fees, legal service fees, consulting fees, investor relations service charges, and other fees. For the nine months ended June 30, 2026, professional fees increased by $628,375, or 625.6%, as compared to the nine months ended June 30, 2025. The increase is due primarily to $510,794 of professional services paid with equity, consisting of $381,641 of Series C Preferred Stock issued pursuant to an advisory agreement and $129,153 of common stock issued or to be issued for consulting services, with the balance attributable to higher accounting, audit and legal fees. No professional services were paid with equity during the nine months ended June 30, 2025.

Compensation and Related Benefits

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For the nine months ended June 30, 2026, compensation and related benefits expenses decreased by $3,240,669, or 61.3%, as compared to the nine months ended June 30, 2025. The decrease is due primarily to stock-based compensation on shares issued to our CEO under his employment agreement, which was $4,515,800 lower than in the prior year period, partially offset by $1,201,729 of expense recognized under the Company's tax reimbursement policy (See Note 8 of the accompanying condensed consolidated financial statements) and a $73,402 increase in other compensation and related benefits.

Other General and Administrative Expenses

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Other general and administrative expenses mainly consist of OTC listing fees, office supplies, insurance expense, travel and entertainment expenses, and other miscellaneous items. For the nine months ended June 30, 2026, other general and administrative expenses increased by $243,826 or 332.4%, as compared to the nine months ended June 30, 2025. The increase is due primarily to $204,334 of accrued penalties and interest recognized during the nine months ended June 30, 2026 under the Company's tax reimbursement policy (See Note 8 of the accompanying condensed consolidated financial statements).

Loss from Operations

During the nine months ended June 30, 2026 and 2025, the Company incurred a loss from operations of $3,451,160 and $5,851,013, respectively. The change in net loss is attributable to the reasons disclosed above.

Other Income (Expenses), net

Other expense mainly includes interest expense on amounts due to related parties.

Other expenses, net totaled $111,155 for the nine months ended June 30, 2026, as compared to other income, net of $153,000 for the nine months ended June 30, 2025, a change of $(264,155), or (172.7)%. The change is primarily due to a gain on settlement of a note payable of $187,000 during the nine months ended June 30, 2025 and an increase in interest expense due to the convertible notes payable issued during the three months ended June 30, 2026.

Income Taxes

We recorded no income tax expense or benefit for the nine months ended June 30, 2026 and 2025, as the deferred tax assets arising from our losses are fully offset by a valuation allowance.

Net Loss

As a result of the factors described above, our net loss was $3,562,315, or $0.10 per share (basic and diluted), for the nine months ended June 30, 2026, as compared to $5,698,013, or $0.23 per share (basic and diluted), for the nine months ended June 30, 2025, a decrease of $2,135,698, or 37.5%.

Liquidity and Capital Resources

Going Concern

At June 30, 2026, we had $196,522 in cash, a working capital deficit of $2,551,952 and an accumulated deficit of $29,755,621. Net cash used in operating activities was $898,957 and $399,939 for the nine months ended June 30, 2026 and 2025, respectively. We incurred net losses of $3,562,315 and $5,698,013 for the nine months ended June 30, 2026 and 2025, respectively. We have incurred substantial operating losses since inception and expect to continue to incur significant operating losses for the foreseeable future. We have not yet commercialized any products and have never generated any revenue from product sales.

We have a limited operating history and our continued growth is dependent upon obtaining additional financing to fund future obligations and pay liabilities arising from ordinary course business operations. In addition, the current cash balance cannot be projected to cover our operating expenses for the next twelve months from the date our financial statements are issued. These matters raise substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent on our ability to raise additional capital, implement our business plan, and generate sufficient revenues. While we plan to raise capital in the future through the sale of equity or debt securities to continue to implement our business plan, we may not be able to raise additional capital on terms acceptable to us, or at all. Furthermore, there are no assurances that we will be successful in our efforts to raise additional capital, implement our business plan or generate sufficient revenues to continue as a going concern.

Management's plans do not alleviate the substantial doubt about our ability to continue as a going concern. See Note 1 to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Cash Flows for the Nine Months Ended June 30, 2026 Compared to the Nine Months Ended June 30, 2025

The following summarizes the key components of our cash flows for the nine months ended June 30, 2026 and 2025:

		Nine Months Ended June 30,
		2026				2025
Net cash used in operating activities		$	(898,957	)		$	(399,939	)
Net cash provided by financing activities			1,058,248				498,499
Net increase in cash		$	159,291			$	98,560

Cash Flows from Operating Activities

Net cash used in operating activities for the nine months ended June 30, 2026 was approximately $899,000, which primarily reflected our consolidated net loss of approximately $3,562,000, offset by the non-cash item adjustments, primarily consisting of stock-based compensation, Series C Preferred Stock and common stock issuance for services, loss on settlement of accounts payable with shares of common stock, amortization of a debt discount and fair value change of our warrant liabilities of approximately $939,000 and the net cash inflows from changes in operating assets and liabilities of approximately $1,724,000, primarily consisting of the accrual of tax reimbursement policy liabilities of approximately $1,646,000.

Net cash flow used in operating activities for the nine months ended June 30, 2025 was approximately $400,000, which primarily reflected our consolidated net loss of approximately $5,698,000, offset by the non-cash item adjustments of approximately $4,678,000, primarily consisting of stock-based compensation and service expense of $4,862,500 and approximately $196,000 of gains on settlement of liabilities and a note payable and the net cash inflow changes in operating assets and liabilities of $620,000, primarily consisting of an increase in accrued compensation of approximately $629,000.

Cash Flows from Financing Activities

Net cash provided by financing activities was approximately $1,058,000 for the nine months ended June 30, 2026. During the nine months ended June 30, 2026, our financing activities related to proceeds received from the sale of shares of common stock and pre-funded warrants of approximately $665,000, and proceeds of $470,000 received from the issuance of convertible notes payable, offset by payments on a finance liability of approximately $27,000 related to the financing of our insurance premiums and $50,000 of deferred offering costs.

During the nine months ended June 30, 2025, net cash provided by financing activities was approximately $500,000. During the nine months ended June 30, 2025, we received proceeds from sale of common stock and a warrant exercise of $430,500 and net advances from related parties of approximately $68,000.

The following trends are reasonably likely to result in a material decrease in our liquidity over the near to long term:

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We have not generated any revenue and fund our operations entirely from financing activities;

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Our debt and other obligations include convertible notes principal and accrued interest maturing in January 2027 and March 2027, accrued compensation and related party advances that are payable on demand, obligations accrued under our tax reimbursement policy, deferred compensation payable in a lump sum no later than December 31, 2026, insurance premium financing and a Small Business Administration loan; and

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The cost of remediating the material weaknesses in our internal control over financial reporting, including additional accounting personnel and systems, and the ongoing cost of being a public company.