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

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management's Discussion and Analysis of Financial Condition and Results of Operations includes a number of forward-looking statements that reflect Management's current views with respect to future events and financial performance. You can identify these statements by forward-looking words such as "may" "will," "expect," "anticipate," "believe," "estimate" and "continue," or similar words. Those statements include statements regarding the intent, belief or current expectations of us and members of its management team as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risk and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements.

Readers are urged to carefully review and consider the various disclosures made by us in this report and in our other reports filed with the Securities and Exchange Commission. Important factors currently known to us could cause actual results to differ materially from those in forward-looking statements. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in the future operating results over time. We believe that its assumptions are based upon reasonable data derived from and known about our business and operations and the business and operations of the Company. No assurances are made that actual results of operations or the results of our future activities will not differ materially from its assumptions. Factors that could cause differences include, but are not limited to, expected market demand for the Company's services, fluctuations in pricing for materials, and competition.

Business Overview

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.

Beat Addiction Recovery is a substance use disorder recovery program that typically includes BioCorRx's proprietary Cognitive Behavioral Therapy (CBT) modules along with peer support via mobile app along with medication prescribed by an independent treating physician under their discretion.

The UnCraveRx® Weight Loss Program is also a medication-assisted weight loss program that includes access to concierge on-demand wellness specialists: nutritionists, fitness experts, and personal support from behavioral experts.

BioCorRx makes the Beat Addiction Recovery Program and UnCraveRx® Weight Loss Management Program available to healthcare providers to utilize when the healthcare provider determines it is medically appropriate and indicated for his or her patients. Any physician or medical professional is solely responsible for treatment options prescribed or recommended to his or her patients.

BioCorRx has issued several license and distribution agreements to several unrelated third parties involving the establishment of alcoholism and opioid addiction rehabilitation and treatment centers and creating certain addiction rehabilitation programs.

BICX102 is an implantable pellet of naltrexone that was the original product candidate being developed under award UG3DA047925 and BICX104 is another pellet of naltrexone that subsequently became the lead product candidate with minor excipient differences between the BICX102 and BICX104. BICX102/BICX104 research was supported by the National Institute On Drug Abuse of the National Institutes of Health under Award Number UG3DA047925 and UH3DA047925.

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BICX104 is being developed through a cooperative agreement with the National Institute on Drug Abuse (NIDA), part of the National Institutes of Health (NIH), under award number UH3DA047925, funded by the Helping to End Addiction Long-term Initiative, or NIH HEAL Initiative. This award is subject to the Cooperative Agreement Terms and Conditions of Award as set forth in RFA DA-19-002 entitled, Development of Medications to Prevent and Treat Opioid Use Disorders (OUD) and Overdose (UG3/UH3) (Clinical Trial Optional).

BICX104 is a biodegradable, long-acting subcutaneous pellet of naltrexone for the treatment of opioid use disorder (OUD) being developed with the goal of improving patient compliance to naltrexone therapy compared to other marketed treatments. In Phase I, an open-label, single-center study in two parallel groups of randomized healthy volunteers to evaluate the PK and safety of BICX104 and the once-a-month intramuscular naltrexone injection (Vivitrol), BICX104 was well tolerated with no serious adverse events and achieved 84 days of therapeutic naltrexone plasma concentrations. BICX104 is being developed under BioCorRx Pharmaceuticals Inc., the Company's majority-owned clinical-stage pharmaceutical subsidiary.

Early research related to BICX102 and BICX104 was previously supported by cooperative agreements with the National Institute on Drug Abuse ("NIDA") of the National Institutes of Health.

On March 1, 2024, the Company's subsidiary BioCorRx Pharmaceuticals Inc. was awarded a grant of $11,029,977 from the National Institute on Drug Abuse ("NIDA") of the National Institutes of Health ("NIH") under award number U01DA059994. 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 ("MUD"). 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 the project and the availability of funds. Government grants generally provide cost reimbursement for certain types of expenditures in return for research and development activities over a contractually defined period.

About MUD. Research has shown that methamphetamine is a highly addictive stimulant and one of the most misused stimulant drugs in the world. Some of the side effects of MUD are severe dental problems, memory loss, aggression, psychotic behavior, and damage to the cardiovascular system. In 2022 the National Survey on Drug Use and Health reported that more than 16.6 million people used methamphetamine at least once during their lifetime.

About OUD. OUD is a chronic disorder, with serious potential consequences including disability, relapses, and death. Opioids, used medically for pain relief, have analgesic and central nervous system depressant effects as well as the potential to cause euphoria with an overpowering desire to use opioids despite the consequences. OUD can involve misuse of prescribed opioid medications, use of diverted opioid medications, or illicitly obtained heroin. OUD is typically a chronic and relapsing illness, that is associated with significantly increased rates of morbidity and mortality.

Grant receivables were $102,613 and $52,026 as of June 30, 2026 and December 31, 2025, respectively. Deferred revenues related to the grant were $1,040 and $0, respectively, as of June 30, 2026 and December 31, 2025. $679,477 and $154,270 were recorded as grant income for the three months ended June 30, 2026 and 2025, respectively. $1,042,074 and $568,249 were recorded as grant income for the six months ended June 30, 2026 and 2025, respectively.

On March 4, 2025, the Company and its majority owned subsidiary, BioCorRx Pharmaceuticals, Inc. entered into an APA with the Seller. The Seller does business as US WorldMeds. Pursuant to the APA, BioCorRx Pharmaceuticals, Inc. purchased certain assets and assumed certain liabilities related to Lucemyra, an FDA approved prescription medication for opioid withdrawal. Supply and distribution sales are generated from the sales of the Lucemyra products and the distribution license granted to the distributors.

On March 26, 2026, BioCorRx Inc. entered into stock exchange agreements with certain related parties, including executive officers and members of the Board of Directors, pursuant to a plan of reorganization. Under these agreements, BioCorRx Inc. acquired an additional 12.15% ownership interest in BioCorRx Pharmaceuticals, Inc. in exchange for an issuance of 2,263,371 shares of common stock.

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Recent Developments

On March 26, 2026, the Company entered into a stock exchange agreement with Lourdes Felix, Chief Executive Officer of the Company and a member of the Board, Louis C Lucido, President of the Company and a member of the Board, and Kent Emry (collectively with Lourdes Felix and Louis C Lucido, the "Shareholders"), a member of the Board, pursuant to which the Shareholders agreed to transfer to the Company an aggregate of 1,215 shares of common stock of BioCorRx Pharmaceuticals, Inc., representing in the aggregate approximately 12.15% of the outstanding common stock of BioCorRx Pharmaceuticals, Inc., in exchange for an aggregate of 2,263,371 shares of the Company's common stock, par value $0.001 per share (the "Exchange").

The shares of the Company's common stock issued in the Exchange constitute the sole consideration to the Shareholders and no cash or other property was paid or transferred in connection with the Exchange. The Exchange closed on March 27, 2026.

The stock exchange agreement contains representations and warranties of the Company and the Shareholders which are typical for transactions of this type. In addition, the agreement also provides the Shareholders certain registration rights for the shares issued in the Exchange, subject to certain limitations.

On March 13, 2026, the Company entered into a sixth 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 maturity date of the note from February 28, 2026 to September 30, 2026. The principal amount due was increased by $30,000. In exchange for the modification, the Company issued 50,000 shares of restricted stock to the debt holder at $0.40 per share for a total value of $20,000. During the six months ended June 30, 2026, the Company made principal payments of $37,500. The balance outstanding as of June 30, 2026 was $278,352.

On March 13, 2026, the Company entered into a fifth amendment agreement to a promissory note, which was originally issued to a third party on March 14, 2024. In accordance with the amendment, the parties agreed to modify the maturity date of the note from February 28, 2026 to September 30, 2026. The principal amount due was increased by $30,000. In exchange for the modification, the Company issued 50,000 shares of restricted stock to the debt holder at $0.40 per share for a total value of $20,000. During the six months ended June 30, 2026, the Company made principal payments of $37,500. The balance outstanding as of June 30, 2026 was $278,352.

On April 2, 2026, the Company entered into a sixth 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 maturity date of the note from March 31, 2026 to February 1, 2027. The principal amount due was increased by $30,000. In exchange for the modification, the Company issued 50,000 shares of restricted stock to the debt holder at $0.34 per share for a total value of $17,000. The promissory note bears interest at 5% per annum, and is convertible into common stock of the Company at a conversion price of $0.34 per share. During the six months ended June 30, 2026, the Company made principal payments of $15,000. The balance outstanding as of June 30, 2026 was $332,450.

As of June 30, 2026 and December 31, 2025, the Company owed $307,249 and $312,249 advances to Lourdes Felix, respectively. During the three months ended June 30, 2026 and 2025, the Company also recognized imputed interest of $7,672 and $8,245, respectively, for advances from Lourdes Felix based on an imputed interest of 10% per annum. During the six months ended June 30, 2026 and 2025, the Company also recognized imputed interest of $17,641 and $12,085, respectively, for advances from Lourdes Felix based on an imputed interest of 10% per annum.

On February 15, 2026, Mr. Lucido entered into the 2026 Q1 Subscription Agreement to purchase a total of 1,470,588 shares of common stock for a total purchase price of $500,000.

On May 21, 2026, Joseph Galligan, a member of the Board of Directors, entered into a Subscription Agreement (the "2026 Q2 Subscription Agreement") to purchase a total of 375,000 shares of common stock for a total purchase price of $150,000.

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Since 2026, the Company had received an aggregate of $200,904 advances from Mr. Lucido. On February 15, 2026, the Company issued 294,118 shares of its common stock at $0.34 per share in connection with conversion of the related party promissory note then outstanding of $100,000. As the fair value of the shares issued equaled the carrying amount of the note, no gain or loss was recognized. As of June 30, 2026 and December 31, 2025, the outstanding balance of advances from Mr. Lucido was $300,904 and $200,000, respectively. During the three months ended June 30, 2026 and 2025, the Company also recognized imputed interest of $7,439 and $1,475 for advances from Mr. Lucido based on an imputed interest of 10% per annum. During the six months ended June 30, 2026 and 2025, the Company also recognized imputed interest of $12,706 and $6,729 for advances from Mr. Lucido based on an imputed interest of 10% per annum.

On March 26, 2026, BioCorRx Inc. entered into stock exchange agreements with certain related parties, including executive officers and members of the Board of Directors, pursuant to a plan of reorganization. Under these agreements, BioCorRx Inc. acquired an additional 12.15% ownership interest in BioCorRx Pharmaceuticals, Inc. in exchange for an issuance of 2,263,371 shares of common stock.

Results of Operations

Three months ended June 30, 2026 Compared with Three months ended June 30, 2025

		2026				2025
Revenues, net		$	87,970			$	178,238
Total operating expenses			(1,553,508	)			(1,592,158	)
Interest expense - related parties			(138,597	)			(164,371	)
Interest expense, net			(30,048	)			(36,686	)
Loss on settlement of debt			(47,000	)			(55,000	)
Grant income			679,477				154,270
Change in fair value of upfront purchase price liability			-				(394	)
Change in fair value of royalty liability			-				33,935
Other miscellaneous income			-				104,890
Net loss			(1,001,706	)			(1,377,276	)
Non-controlling interest			36,932				143,858
Net loss attributable to BioCorRx Inc.		$	(964,774	)		$	(1,233,418	)

Revenues

Total net revenues for the three months ended June 30, 2026 were $87,970 compared with $178,238 for the three months ended June 30, 2025, reflecting a decrease of 50.6%. The primary reason for the decrease in net revenues is directly related to the new Lucemyra® distribution sales. Sales/access fees for the three months ended June 30, 2026 and 2025 were $0 and $1,790, respectively, reflecting a decrease of $1,790. The primary reason for the decrease in 2026 is directly related to the decreased number of patients treated at licensed clinics. The supply and distribution net sales for the three months ended June 30, 2026 and 2025 were $87,970 and $176,448, respectively. BioCorRx Pharmaceuticals, Inc. entered into several exclusive and nonexclusive distribution agreements as part of the USWM LLC Asset Purchase Agreement dated March 4, 2025. The distribution arrangements may include: (i) that the Company grants rights to the counterparty to distribute the product, and (ii) the Company supplies the product. Under an exclusive distribution and supply arrangement, the services are not distinct, and revenue is recognized as a single performance obligation. Distribution sales are generated through the distribution arrangements. The Company receives a share of the net distributable profits earned by its distributors, which is recognized when one or more of the following events occur: (i) control of the asset transfers to the end customer; and (ii) the single performance obligation has been satisfied.

Total Operating Expenses

Total operating expenses for the three months ended June 30, 2026 and 2025 were $1,553,508 and $1,592,158, respectively, reflecting a decrease of $22,921.

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The reasons for the decrease in 2026 are primarily due to (i) a decrease of $259,296 in accounting and legal fees from $405,599 for the three months ended June 30, 2025 to $146,304 for the three months ended June 30, 2026, (ii) a decrease of $179,784 in consulting expense from $351,355 for the three months ended June 30, 2025 to $171,570 for the three months ended June 30, 2026, (iii) a decrease of $62,143 in depreciation and amortization from $71,977 for the three months ended June 30, 2025 to $9,834 for the three months ended June 30, 2026, and (iv) a decrease of $33,456 in stock based compensation from $155,902 for the three months ended June 30, 2025 to $122,446 for the three months ended June 30, 2026, partially offset by (i) an increase of $415,524 in research and development expense from $296,860 for the three months ended June 30, 2025 to $712,384 for the three months ended June 30, 2026 and (ii) an increase of $144,967 in the cost of goods sold from $0 for the three months ended June 30, 2025 to $144,967 for the three months ended June 30, 2026.

Interest Expense - Related Parties

Interest expense - related parties for the three months ended June 30, 2026 and 2025 were $138,597 and $164,371, respectively. The decrease was mainly due to the paid off the related party notes payable in 2025.

Interest Expense

Interest expense for the three months ended June 30, 2026 and 2025 were $30,048 and $36,686, respectively. The decrease was mainly due to the full amortization of certain debt discounts before 2026.

Loss on Settlement of Debt

Loss on settlement of debt for the three months ended June 30, 2026 and 2025 were $47,000 and $55,000, respectively.

Grant Income

During the three months ended June 30, 2026 and 2025, the Company recognized grant income of $679,477 as compared to $154,270 for the comparable period last year.

On May 7, 2021, the FDA cleared the Company's Investigational New Drug Application (IND) application for BICX104. 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 UH3. 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. The funds are available to reimburse the Company for certain incurred direct costs and 17% of indirect costs. Indirect costs are costs that are not directly related to the project itself but are required to conduct the research and are critical to the success of the project and the organization as a whole.

On March 1, 2024 the Company's subsidiary BioCorRx Pharmaceuticals Inc received a Notice of Award from the United States Department of Health and Human Services for a grant from National Institute on Drug Abuse U01 for the Methamphetamine Use Disorder Studies. The grant provides for $4,131,123 in funding during the first year subjects to terms and conditions specified in the grant, including satisfactory progress of project and availability of funds.

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Change in fair value of upfront purchase price liability

Change in fair value of upfront purchase price liability for the three months ended June 30, 2025 was a loss of $394. As part of the consideration to the Seller for the purchase of the assets on March 4, 2025, the Company shall pay upfront purchase price of $400,000 via Seller's retention, until such amounts equal $400,000 of 50% of the Net Sales (as defined in the APA) of Lucemyra and 50% of the Net Distributable Profits (as defined in the APA) of the generic version of Lucemyra. The upfront purchase price is representative of contingent consideration, which shall be remeasured to fair value through earnings at each reporting period until the contingency is resolved.

Change in fair value of royalty liability

Change in fair value of royalty liability for the three months ended June 30, 2025 was a gain of $33,935. As part of the consideration to the Seller for the purchase of the assets on March 4, 2025, the Company shall pay to the Seller a royalty equal to 3% of the Net Sales of Lucemyra and 3% of the Net Distributable Profits of the generic version of Lucemyra on a calendar quarter basis. Royalty payments shall commence on the date of the acquisition and shall continue for a period of 5 years following the date of the acquisition. The royalty payment is representative of contingent consideration, which shall be remeasured to fair value through earnings at each reporting period until the contingency is resolved.

Other Miscellaneous Income

Other miscellaneous income for the three months ended June 30, 2025 were $104,890. The miscellaneous income was mainly due to the refundable tax credit received from Internal Revenue Service during 2025.

Net Loss

For the three months ended June 30, 2026, the Company experienced a net loss of $1,001,706 compared with a net loss of $1,377,276 for the three months ended June 30, 2025.

Six months ended June 30, 2026 Compared with Six months ended June 30, 2025

		2026				2025
Revenues, net		$	167,038			$	313,137
Total operating expenses			(2,739,776	)			(2,665,003	)
Interest expense - related parties			(274,045	)			(324,499	)
Interest expense, net			(61,089	)			(124,169	)
Loss on settlement of debt			(147,000	)			(187,514	)
Grant income			1,042,074				568,249
Change in fair value of upfront purchase price liability			-				(4,894	)
Change in fair value of royalty liability			-				31,324
Other miscellaneous income			-				164,329
Net loss			(2,012,798	)			(2,229,040	)
Non-controlling interest			102,188				154,215
Net loss attributable to BioCorRx Inc.		$	(1,910,610	)		$	(2,074,825	)

Revenues

Total net revenues for the six months ended June 30, 2026 were $167,038 compared with $313,137 for the six months ended June 30, 2025, reflecting a decrease of 46.7%. The primary reason for the decrease in net revenues is directly related to the new Lucemyra® distribution sales. Sales/access fees for the six months ended June 30, 2026 and 2025 were $1,330 and $1,790, respectively, reflecting a decrease of $460. The primary reason for the decrease in 2026 is directly related to the decreased number of patients treated at licensed clinics. The supply and distribution net sales for the six months ended June 30, 2026 and 2025 were $165,708 and $311,347, respectively. BioCorRx Pharmaceuticals, Inc. entered into several exclusive and nonexclusive distribution agreements as part of the USWM LLC Asset Purchase Agreement dated March 4, 2025. The distribution arrangements may include: (i) that the Company grants rights to the counterparty to distribute the product, and (ii) the Company supplies the product. Under an exclusive distribution and supply arrangement, the services are not distinct, and revenue is recognized as a single performance obligation. Distribution sales are generated through the distribution arrangements. The Company receives a share of the net distributable profits earned by its distributors, which is recognized when one or more of the following events occur: (i) control of the asset transfers to the end customer; and (ii) the single performance obligation has been satisfied.

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Total Operating Expenses

Total operating expenses for the six months ended June 30, 2026 and 2025 were $2,739,776 and $2,665,003, respectively, reflecting an increase of $74,773.

The reasons for the increase in 2026 are primarily due to (i) an increase of $605,938 in research and development expense from $458,779 for the six months ended June 30, 2025 to $1,064,717 for the six months ended June 30, 2026, (ii) an increase of $170,151 in the cost of goods sold from $0 for the six months ended June 30, 2025 to $170,151 for the six months ended June 30, 2026, (iii) an increase of $25,076 in advertising from $16,133 for the six months ended June 30, 2025 to $41,209 for the six months ended June 30, 2026, and (iv) an increase of $21,596 in payroll from $197,236 for the six months ended June 30, 2025 to $218,832 for the six months ended June 30, 2026, partially offset by (i) a decrease of $487,891 in accounting and legal fees from $805,832 for the six months ended June 30, 2025 to $317,941 for the six months ended June 30, 2026, (ii) a decrease of $120,882 in consulting expense from $492,284 for the six months ended June 30, 2025 to $371,402 for the six months ended June 30, 2026, (iii) a decrease of $76,338 in stock based compensation from $307,159 for the six months ended June 30, 2025 to $230,821 for the six months ended June 30, 2026, and (iv) a decrease of $75,791 in depreciation and amortization from $96,820 for the six months ended June 30, 2025 to $21,029 for the six months ended June 30, 2026.

Interest Expense - Related Parties

Interest expense - related parties for the six months ended June 30, 2026 and 2025 were $274,045 and $324,499, respectively. The decrease was mainly due to the paid off the related party notes payable in 2025.

Interest Expense

Interest expense for the six months ended June 30, 2026 and 2025 were $61,089 and $124,169, respectively. The decrease was mainly due to the full amortization of certain debt discounts before 2026.

Loss on Settlement of Debt

Loss on settlement of debt for the six months ended June 30, 2026 and 2025 were $147,000 and $187,514, respectively. The decrease is mainly due to the less amendments to promissory notes during 2026, which were treated as an extinguishment of the old debts and an issuance of the new debts.

Grant Income

During the six months ended June 30, 2026 and 2025, the Company recognized grant income of $1,042,074 as compared to $568,249 for the comparable period last year.

On May 7, 2021, the FDA cleared the Company's Investigational New Drug Application (IND) application for BICX104. 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 UH3. 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. The funds are available to reimburse the Company for certain incurred direct costs and 17% of indirect costs. Indirect costs are costs that are not directly related to the project itself but are required to conduct the research and are critical to the success of the project and the organization as a whole.

On March 1, 2024 the Company's subsidiary BioCorRx Pharmaceuticals Inc received a Notice of Award from the United States Department of Health and Human Services for a grant from National Institute on Drug Abuse U01 for the Methamphetamine Use Disorder Studies. The grant provides for $4,131,123 in funding during the first year subjects to terms and conditions specified in the grant, including satisfactory progress of project and availability of funds.

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Change in fair value of upfront purchase price liability

Change in fair value of upfront purchase price liability for the six months ended June 30, 2025 was a loss of $4,894. As part of the consideration to the Seller for the purchase of the assets on March 4, 2025, the Company shall pay upfront purchase price of $400,000 via Seller's retention, until such amounts equal $400,000 of 50% of the Net Sales (as defined in the APA) of Lucemyra and 50% of the Net Distributable Profits (as defined in the APA) of the generic version of Lucemyra. The upfront purchase price is representative of contingent consideration, which shall be remeasured to fair value through earnings at each reporting period until the contingency is resolved.

Change in fair value of royalty liability

Change in fair value of royalty liability for the six months ended June 30, 2025 was a gain of $31,324. As part of the consideration to the Seller for the purchase of the assets on March 4, 2025, the Company shall pay to the Seller a royalty equal to 3% of the Net Sales of Lucemyra and 3% of the Net Distributable Profits of the generic version of Lucemyra on a calendar quarter basis. Royalty payments shall commence on the date of the acquisition and shall continue for a period of 5 years following the date of the acquisition. The royalty payment is representative of contingent consideration, which shall be remeasured to fair value through earnings at each reporting period until the contingency is resolved.

Other Miscellaneous Income

Other miscellaneous income for the six months ended June 30, 2025 were $164,329. The miscellaneous income was mainly due to the refundable tax credit received from Internal Revenue Service during 2025.

Net Loss

For the six months ended June 30, 2026, the Company experienced a net loss of $2,012,798 compared with a net loss of $2,229,040 for the six months ended June 30, 2025.

Liquidity and Capital Resources

As of June 30, 2026, the Company had cash of $21,237. The following table provides a summary of the Company's net cash flows from operating, investing, and financing activities.

		2026				2025
Net cash used in operating activities		$	(873,260	)		$	(816,122	)
Net cash provided by financing activities			755,137				839,961
Net (decrease) increase in cash			(118,123	)			23,839
Cash, beginning of period			139,360				88,033
Cash, end of period		$	21,237			$	111,872

The Company has historically sought and continue to seek financing from private sources to move its business plan forward. In order to satisfy the financial commitments, the Company had relied upon private party financing that has inherent risks in terms of availability and adequacy of funding. During the six months ended June 30, 2026 and 2025, the Company received $650,000 and $0, respectively, proceeds from common stock subscription agreements.

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.

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Net Cash Flow from Operating Activities

Net cash used in operating activities was $873,260 for the six months ended June 30, 2026 compared to $816,122 used in operating activities for the six months ended June 30, 2025. The decrease was primarily due to non-cash adjustments of $62,945 and a decrease in operating liabilities of $399,201, net of a decrease in net loss of $216,242 and a decrease in operating assets of $188,766.

Net Cash Flow from Financing Activities

Net cash provided by financing activities decreased by $84,824, from $839,961 provided by financing activities for the six months ended June 30, 2025 to $755,137 cash provided by financing activities for the six months ended June 30, 2026.

During the six months ended June 30, 2025, the Company received $35,200 advances from Lourdes Felix, and $812,500 advances from Mr. Lucido. During the six months ended June 30, 2025, the Company repaid $7,000 to Lourdes Felix.

During the six months ended June 30, 2026, the Company received $200,904 advances from Mr. Lucido and repaid $5,000 to Lourdes Felix.

During the six months ended June 30, 2026, Mr. Lucido entered into the 2026 Q1 Subscription Agreement to purchase a total of 1,470,588 shares of common stock for a total purchase price of $500,000. During the six months ended June 30, 2026, Mr. Galligan entered into the 2026 Q2 Subscription Agreement to purchase a total of 375,000 shares of common stock for a total purchase price of $150,000.

During the six months ended June 30, 2026, the Company repaid $90,000 of notes payable owed to third parties.

Going Concern

The Company's financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern. This contemplates the realization of assets and the liquidation of liabilities in the normal course of business. As of June 30, 2026, the Company had a working capital deficit of $(8,231,326), and an accumulated deficit of $88,559,898. The Company 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.

The Company believes that its current cash on hand will not be sufficient to fund its projected operating requirements for the next twelve months since the date of the issuance of the financial statements.

The Company will be dependent upon the raising of additional capital through placement of its common stock in order to implement the Company's business plan or by using outside financing. There can be no assurance that the Company will be successful in these situations in order to continue as a going concern. The Company is funding its operations by additional borrowings and some shareholder advances.

Off Balance Sheet Arrangements

The Company does not have any off balance sheet arrangements that have or are reasonably likely to have a current or future effect on its financial condition, changes in financial condition, sales or expenses, results of operations, liquidity or capital expenditures, or capital resources that are material to an investment in its securities.

Critical Accounting Estimates

Our significant accounting policies are described in Note 2 to our unaudited condensed consolidated financial statements. The Company's consolidated financial statements are prepared in accordance with GAAP. The preparation of these unaudited condensed consolidated financial statements requires management to make assumptions and estimates that affect the reported results of operations and financial position. The following is a discussion of the accounting policies, estimates and judgments that management believes are most significant in the application of GAAP used in the preparation of our unaudited condensed consolidated financial statements. These accounting policies, among others, may involve a high degree of complexity and judgment on the part of management. Further, these estimates and other factors, including those outside of our control could have significant adverse impact to our financial condition, results of operations and cash flows.

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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. 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. Refer to Note 2 to our unaudited condensed consolidated financial statements.

Loss contingencies

Loss contingencies are existing conditions, situations or circumstances involving uncertainty as to possible loss that will ultimately be resolved when future events occur or fail to occur. Such contingencies include, but are not limited to, environmental obligations, litigation, regulatory investigations and proceedings, product quality and losses resulting from other events and developments. When a loss is considered probable and reasonably estimable, we record a liability in the amount of our best estimate for the ultimate loss. When there appears to be a range of possible costs with equal likelihood, liabilities are based on the low-end of such range. However, the likelihood of a loss with respect to a particular contingency is often difficult to predict and determining a meaningful estimate of the loss or a range of loss may not be practicable based on the information available and the potential effect of future events and negotiations with or decisions by third parties that will determine the ultimate resolution of the contingency. Moreover, it is not uncommon for such matters to be resolved over many years, during which time relevant developments and new information must be continuously evaluated to determine both the likelihood of potential loss and whether it is possible to reasonably estimate a range of possible loss. Disclosure is provided for material loss contingencies when a loss is probable but a reasonable estimate cannot be made, and when it is reasonably possible that a loss will be incurred or the amount of a loss will exceed the recorded provision. We regularly review contingencies to determine whether the likelihood of loss has changed and to assess whether a reasonable estimate of the loss or range of loss can be made. Refer to Note 18 to our unaudited condensed consolidated financial statements.

Business Combinations and Contingent Consideration

Business combinations are accounted for using the acquisition method. The Company allocates the fair value of the purchase price of an acquisition to the assets acquired and liabilities assumed, based on their estimated fair values as of the date of acquisition. The excess of the fair value of the purchase price over the fair values of these net tangible and intangible assets acquired is recorded as goodwill. Acquisition-related expenses are recognized separately from the business combination and expensed as incurred.

Certain business combinations include contingent consideration arrangements, which are generally based on achievement of future financial performance or future events. If it is determined the contingent consideration arrangement is not compensatory, the Company estimates fair value of contingent consideration payments as part of the initial purchase price and records the estimated fair value of contingent consideration as a liability in the condensed consolidated balance sheet. The Company reviews and assesses the estimated fair value of contingent consideration each reporting period, and the updated fair value could differ materially from the initial estimates. Adjustments to estimated fair value related to changes in fair value are reported in the consolidated statements of operations.

Refer to Note 2 to our unaudited condensed consolidated financial statements.

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Goodwill

Goodwill represents the excess of the purchase price in a business combination over the fair value of net assets acquired. Goodwill is not amortized but tested annually for impairment or when indicators of impairment are present. The test for goodwill impairment involves a qualitative assessment of impairment indicators. If indicators are present, a quantitative test of impairment is performed. Goodwill impairment, if any, is determined by comparing the reporting unit's fair value to its carrying value. An impairment loss is recognized in an amount equal to the excess of the reporting unit's carrying value over its fair value, up to the amount of goodwill allocated to the reporting unit. The Company's policy is to review goodwill for impairment annually unless a triggering event requires an analysis sooner. Refer to Note 2 to our unaudited condensed consolidated financial statements.

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. Refer to Note 2 to our unaudited condensed consolidated financial statements.