Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

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

The information set forth below should be read in conjunction with our consolidated financial statements and related notes thereto included elsewhere in this Annual Report on Form 10-K. This discussion and analysis contains forward-looking statements based on our current expectations, assumptions, estimates and projections. These forward-looking statements involve risks and uncertainties. Our actual results could differ materially from those indicated in these forward-looking statements as a result of certain factors, including those discussed in Item 1 of this Annual Report on Form 10-K, entitled "Business," under "Forward-Looking Statements" and Item 1A of this Annual Report on Form 10-K, entitled "Risk Factors." References in this discussion and analysis to "us," "we," "our," or "the Company" refer collectively to Q/C Technologies, Inc.

Our financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles ("GAAP") and SEC rules and regulations. These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our financial statements would be affected to the extent there are material differences between these estimates and actual results. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management's judgment in its application. There are also areas in which management's judgment in selecting any available alternative would not produce a materially different result. The following discussion should be read in conjunction with our financial statements and notes thereto appearing elsewhere in this Annual Report on Form 10-K.

This Annual Report on Form 10-K and other reports filed by the Company from time to time with the Securities and Exchange Commission (the "SEC" and such reports, collectively, the "Filings") contain or may contain forward-looking statements and information that are based upon beliefs of, and information currently available to, the Company's management as well as estimates and assumptions made by Company's management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used in the Filings, the words "anticipate," "believe," "estimate," "expect," "future," "intend," "plan," or the negative of these terms and similar expressions as they relate to the Company or the Company's management identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors, including the risks relating to the Company's business, industry, and the Company's operations and results of operations. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Important factors that could cause actual results to differ materially from the results and events anticipated or implied by such forward-looking statements include, but are not limited to:

	●	fluctuation and volatility in market price of our Common Stock due to market and industry factors, as well as general economic, political and market conditions;
	●	the impact of dilution on our stockholders;
	●	the outcome of litigation or other proceedings we may become subject to in the future;
	●	the impact of our ability to meet the continued listing requirements of the Nasdaq Capital Market;
	●	our availability and ability to continue to obtain sufficient funding to conduct planned research and development efforts, including prototype development and commercialization of our laser-based computing business, and realize potential profits;
	●	our ability to develop and commercialize the qc-LPU100 laser-based computing system and to realize value from our legacy pharmaceutical assets, including Isomyosamine and Supera-CBD;
	●	the impact of the complexity of the regulatory landscape on our ability to obtain certification for our laser-based computing products, including hardware certifications for the qc-LPU100, and on the regulatory status of our legacy pharmaceutical product candidates, both within and outside of the U.S.;
	●	the potential impact of changes in the legal and regulatory landscape, both within and outside of the U.S.;
	●	the potential future impact of pandemics on the administration, funding and policies of regulatory authorities, both within and outside of the U.S.;
	●	our dependence on third parties, including LightSolver Ltd. for licensed technology, and third-party contractors for the development and manufacture of our laser-based computing products and the maintenance of our legacy pharmaceutical assets;
	●	challenges we may face with respect to our laser-based computing products achieving market acceptance by customers, and the value of our legacy pharmaceutical product candidates;
	●	emerging competition and rapidly advancing technology in our industries, including from established semiconductor companies, photonic and quantum computing competitors, and pharmaceutical companies;
	●	our ability to obtain, maintain and protect our trade secrets or other proprietary rights, operate without infringing upon the proprietary rights of others and prevent others from infringing on its proprietary rights;
	●	our ability to maintain adequate cyber security and information systems;
	●	our ability to effectively execute and deliver our plans related to commercialization, marketing and manufacturing capabilities and strategy;
	●	emerging competition and rapidly advancing technology in our industry;
	●	our ability to obtain adequate financing in the future on reasonable terms, as and when we need it;
	●	challenges we may face in identifying, acquiring and operating new business opportunities;
	●	our ability to retain and attract senior management and other key employees;
	●	our ability to quickly and effectively respond to new technological developments;
	●	changes in political, economic or regulatory conditions generally and in the markets in which we operate; and
	●	our compliance with all laws, rules, and regulations applicable to our business.

Overview

The Company has historically been engaged in the development and commercialization of two therapeutic platforms based on well-defined targets: Isomyosamine and Supera-CBD. Recently, the Company has shifted its business strategy to focus on energy-efficient blockchain and cryptocurrency infrastructure through quantum-class laser-based computing. The Company's core strategy leverages an exclusive global licensing agreement with LightSolver Ltd. ("LightSolver") to deploy innovative laser processing units ("LPUs"), specifically the Company-branded qc-LPU100™ ("qc-LPU100"), which harnesses the natural properties of light with the goal of achieving high computational speed and energy efficiency. The qc-LPU100 is intended to address complex combinatorial and physical problems, such as partial differential equations, and is targeted for applications in cryptocurrency, decentralized physical infrastructure tokens ("DePin Tokens"), and artificial intelligence-driven high-performance computing that relies on decentralized networks. The Company seeks to position itself as a first-mover in bridging laser-based computing with cryptocurrency infrastructure, addressing industry challenges including high energy consumption, scalability limitations, and reliance on traditional graphics processing units ("GPUs"). LPUs are designed to operate at room temperature in standard rack-unit sizes and are intended to outperform GPUs and quantum processing units ("QPUs") in speed, efficiency, and sustainability, while enhancing blockchain security.

The Company is evaluating the potential divestiture of Isomyosamine and Supera-CBD to fund its new strategic focus, with the objective of creating long-term stockholder value.

Recent Developments

Consulting Agreement

On January 16, 2026, the Company entered into a consulting agreement (the "Consulting Agreement") with Chelsea Voss (the "Consultant"), a current director of the Company, pursuant to which, the Consultant agreed to provide certain consulting services to the Company, including evaluating companies and making related introductions, analyzing technologies and operations, reviewing and advising on potential acquisitions and any other consulting or advisory services which the Company reasonably requests that the Consultant provide to the Company. The Consulting Agreement has a term of twelve (12) months, unless earlier terminated pursuant to the terms of the Consulting Agreement or upon the mutual written consent of the Company and the Consultant in accordance with the terms of the Consulting Agreement.

Pursuant to the Consulting Agreement, the Company agreed to (i) pay the Consultant a monthly fee equal to $12,500 (or, $150,000 annually) payable in arrears on a monthly basis, (ii) grant to the Consultant 212,500 restricted stock units, subject to the terms and conditions of the Company's standard restricted stock unit award agreement and the Q/C Technologies, Inc. 2021 Equity Incentive Plan, as amended (the "Plan"), which vest in four substantially equal installments on the quarterly anniversaries of the issuance date, provided that the Consultant continues to provide services to the Company through such applicable vesting dates and subject to the related restricted stock unit award agreement, and (iii) grant to the Consultant stock options to purchase up to an aggregate of 212,500 shares of Common Stock at an exercise price equal to the greater of (a) $5.097 per share and (b) the fair market value per share of Common Stock on the date of grant (the "Consultant Options"), subject to the terms and conditions of the Company's standard nonqualified stock option award agreement and the Plan. The Consultant Options vest and become exercisable in four (4) substantially equal installments on each quarterly anniversary of the issuance date, provided that the Consultant continues to provide services to the Company through such applicable vesting dates.

Employment Agreement

On April 13, 2026, the Company entered into an executive compensation agreement (the "Employment Agreement") with Joshua Silverman, who serves as the Company's Executive Chairman, setting forth the terms and conditions of Mr. Silverman's continued employment as a member of the Company's Board of Directors and as the Company's Executive Chairman. The Employment Agreement has a three-year initial term commencing on April 13, 2026 (the "Effective Date"), which term automatically renews each year for successive one-year terms, unless earlier terminated by either party in accordance with the terms of the Employment Agreement.

The Employment Agreement provides that Mr. Silverman will be entitled to receive an annual base salary of one hundred and twenty thousand dollars ($120,000) ("Base Salary"), payable in accordance with the Company's normal payroll practices. For each fiscal year during the employment period, Mr. Silverman is eligible to receive an annual bonus upon achievement of target objectives and performance criteria, payable on or before March 15 of the fiscal year following the fiscal year to which the bonus relates. The Employment Agreement also entitles Mr. Silverman to receive customary benefits and reimbursement for ordinary business expenses.

Pursuant to the Employment Agreement, Mr. Silverman is entitled to receive, on the Effective Date and subsequently on the first day of each calendar quarter thereafter, a number of fully vested restricted stock units ("RSUs") equal to an aggregate value of $60,000 per grant calculated based on the closing price of the Company's Common Stock as of the grant date or the closing price of the last preceding business day if the grant date is not a business day (rounded down for any fractional shares). The RSUs granted pursuant to the Employment Agreement are subject to the terms and conditions of the Company's standard restricted stock unit award agreement and the Company's long-term equity incentive plan. With respect to the RSU grants provided in the Employment Agreement, the Company further agreed to provide Mr. Silverman with an additional lump-sum cash payment equal to any estimated personal income and applicable employment taxes to be withheld or paid in connection with Mr. Silverman's receipt of the applicable RSUs.

In the event Mr. Silverman's employment is terminated by the Company for Cause (as defined in the Employment Agreement) or by Mr. Silverman without Good Reason (as defined in the Employment Agreement), Mr. Silverman will be entitled to: (i) any earned but unpaid Base Salary earned during his employment and applicable to all pay periods prior to the termination date, and (ii) any unpaid expense reimbursements and vested amounts and benefits in accordance with the terms of any applicable plan, program, corporate governance document, policy, agreement or arrangement of the Company (collectively, "Accrued Compensation").

If Mr. Silverman's employment is terminated prior to the end of the term by the Company without Cause or by Mr. Silverman for Good Reason, then, subject to certain conditions set forth in the Employment Agreement (including the execution and non-revocation of a general release of claims), Mr. Silverman will be entitled to: (i) Accrued Compensation; (ii) severance equal to two times the sum of (A) Mr. Silverman's Base Salary in effect at the time his employment terminates and (B) the target bonus for the year of termination prorated based upon the number of days worked for the year of termination; and (iii) accelerated vesting of the unvested portion of any outstanding equity awards.

If Mr. Silverman's employment is terminated prior to the end of the term by the Company without Cause or by Mr. Silverman for Good Reason within two (2) years after a Change in Control (as defined in the Employment Agreement) or within six (6) months prior to a Change in Control, Mr. Silverman will be entitled to: (i) Accrued Compensation; (ii) severance equal to three times the sum of (A) Mr. Silverman's Base Salary in effect at the time his employment terminates and (B) the target bonus for the year of termination prorated based upon the number of days worked for the year of termination; and (iii) accelerated vesting of the unvested portion of any outstanding equity awards.

The Employment Agreement also contains customary provisions relating to, among other things, confidentiality and non-disparagement.

Financial Operations Overview

The Company is a pre-revenue company that has not generated any revenue from product sales to date. The Company's primary revenue opportunity is its laser-based computing business, through which it intends to generate revenue from a combination of hardware sales, leasing arrangements, subscription-based access to LPU clusters, and potential licensing or royalty arrangements associated with the integration of its technology into blockchain infrastructure or other computing platforms. In addition, the Company holds legacy pharmaceutical assets, including the Isomyosamine and Supera-CBD product candidates. The Company does not expect to generate revenue from these pharmaceutical assets and is evaluating strategic alternatives, which may include divestiture or out-licensing.

We anticipate that our expenses will increase significantly as we advance the development and commercialization of our laser-based computing business, including prototype development, performance benchmarking, pilot testing, hardware certifications, manufacturing, and deployment of LPU systems.

As a result of these anticipated expenditures, we will need substantial additional funding to support our continuing operations and pursue our growth strategy.

Components of our Results of Operations

Revenue

We have not generated any revenue from product sales and do not expect to generate any revenue from the sale of pharmaceutical products in the near future. With respect to our laser-based computing business, the Company intends to generate revenue through a combination of hardware sales, leasing arrangements, and service-based offerings, including subscription-based access to LPU clusters and potential licensing or royalty arrangements.

Operating Expenses

Our operating expenses are broken into several components, including research and development and general and administrative costs. We expect operating expenses to increase as we advance prototype development, performance benchmarking, pilot testing, and early commercialization activities for our laser-based computing business, and as we incur costs to maintain our legacy pharmaceutical assets, including Isomyosamine and Supera-CBD, while we evaluate strategic alternatives.

Research and Development

Our research and development expenses consist of costs associated with both our laser-based computing business and the maintenance of our legacy pharmaceutical product candidates, Isomyosamine and Supera-CBD. For our laser-based computing business, these costs include prototype development expenses for the qc-LPU100, performance benchmarking activities, LightSolver licensing costs, consulting and general development expenses, and related engineering and technical costs. For our legacy pharmaceutical business, these costs include, but are not limited to:

	●	Contractual agreements with third parties, including contract research organizations, for the maintenance of legacy pharmaceutical programs;
	●	Outside consultants including fees and expenses;
	●	Laboratory supplies and equipment;
	●	Regulatory compliance; and
	●	Patent application and maintenance costs to protect our intellectual property.

None of our two employees are principally involved in research and development activities for either the laser-based computing business or our legacy pharmaceutical product candidates, Isomyosamine or Supera-CBD. Their salaries, wages and benefits are captured as a component of research and development but not allocated to specific projects.

We utilize third party contractors and consultants with expertise in specific research or development activities to perform work under the supervision of our researchers. We believe this allows us to control costs and to progress through the development cycle and to utilize our staff more efficiently.

It is difficult to project with absolute accuracy the duration or final cost of the development of our laser-based computing products, including the qc-LPU100, or our legacy pharmaceutical product candidates, Isomyosamine and Supera-CBD, or if revenue will be generated from the commercialization of any of these products. For our laser-based computing business, costs will depend on the pace of prototype development, benchmarking results, regulatory certifications, and deployment timelines. For our legacy pharmaceutical business, the process of achieving regulatory approval is very costly and time consuming.

General and Administrative

General and administrative expenses primarily consist of salaries, wages and benefits for our employees in the executive and accounting functions and third-party costs for legal, accounting, insurance, investor relations, stock market and board expenses.

Although treated as components of general and administrative expenses, we have chosen to disclose the following significant items separately:

Stock Based Compensation

Stock based compensation includes the fair market value, as determined using the Black-Scholes option pricing model, of stock options issued to key staff and consultants.

Franchise Tax Expenses

Franchise taxes paid to the State of Delaware based on the number of authorized shares of Common Stock.

Warrant Issuance Expense

The bifurcated fair market value of warrants issued with the private placement of Series F-1 Preferred Stock, Series G Preferred Stock, and Series H Preferred Stock.

Other Income (Expense), net

Other income (expense), net consists of interest and dividends earned on our cash, cash equivalents, and investments, gains on the sale marketable securities, losses on equity investments, and an uninsured casualty loss.

Results of Operations

Summary of Statements of Operations for the Years Ended December 31, 2025 and 2024

The following table summarized the results of operations for the years ended December 31, 2025 and 2024.

		For the Years Ended
		December 31,												%
Description		2025				2024				Change				Change
Operating Expenses
Administrative Expenses			3,692,804				4,118,186				(425,382	)			(10.3	)
Research & Development Expenses			3,471,841				3,441,010				30,831				0.9
Stock Based Compensation			2,174,524				1,60,444				1,117,253				105.4
Franchise Tax Expense			200,050				40,548				159,502				393.4
Series F-1 Warrant Issuance Expenses			-				539,097				(539,097	)			(100.0	)
Series G Warrant Issuance Expenses			-				969,505				(969,505	)			(100.0	)
Series H Warrant Issuance Expenses			264,417				-				264,417				100.0
Total Operating Expenses			9,806,809				10,168,790				(361,981	)			(3.6	)
Loss from Operations			(9,806,809	)			(10,168,790	)			361,981				(3.6	)
Total Other Income/Expense			(1,779,765	)			(13,190,544	)			11,410,779				(86.5	)
Net Loss			(11,586,574	)			(23,359,334	)			11,772,760				(50.4	)
Preferred Stock Dividends			3,357,324				3,801,885				(444,561	)			(11.7	)
Net Loss Attributable to Common Stockholders			(14,943,898	)			(27,161,219	)			12,217,321				(45.0	)

Revenue

We had no revenue from operations during the years ended December 31, 2025 and 2024.

Administrative Expenses

The table below summarizes our administrative expenses for the years ended December 31, 2025, and 2024 as well as the percentage of change year-over-year:

		For the Years Ended
		December 31,												%
Description		2025				2024				Change				Change
Personnel Costs			380,513				651,100				(270,587	)			(41.6	)
Professional Service Costs			1,442,119				1,249,297				192,822				15.4
Stock Market & Investor Relations Costs			704,682				798,583				(93,901	)			(11.8	)
Other Administrative Expense			1,165,490				1,419,206				(253,716	)			(17.9	)
Total Administrative Expenses			3,694,829				4,120,210				(425,381	)			(10.3	)

Personnel costs decreased $270,857, or 41%, during the year ended December 31, 2025, as compared to the year ended December 31, 2024. The decrease is primarily driven by the fact that during the year ended December 31, 2024, we renegotiated a staff members compensation package resulting in a savings of $240,000 on an annualized basis. As of December 31, 2025, we have two full-time administrative staff members.

Professional services costs increased $192,822, or 15.4%, during the year ended December 31, 2025, as compared to the year ended December 31, 2024. These costs include the consulting fees for our Interim Chief Financial Officer, 20% of the consulting fees for our Chief Medical Officer, legal, accounting and audit fees, general business consulting, and specialized valuation services related to the initial and quarterly calculation of the fair market value of the preferred stock and components and the acquisition of the LightSolver license. The increase is primarily driven by an increase in costs associated with valuation services and recruiting fees.

Stock market and investor relations costs decreased $93,901, or 11.8%, during the year ended December 31, 2025, as compared to the year ended December 31, 2024. These costs include the annual Nasdaq listing fees, activities related to keeping the stockholder base informed through press releases, presentations and other communication efforts, transfer agent fees, and the costs of annual stockholder meetings. The decrease is primarily driven by the fact that during the year ended December 31, 2024, we engaged a public relations group to perform a media blitz to generate interest in the Company and its product candidates at a cost of $145,000, this program was not repeated in year ended December 31, 2025. In addition, we saw additional savings related to periodic filing and stock exchange fees which were offset by increases in expenses related to the annual stockholders' meeting and transfer agent fees.

Other administrative expenses decreased $253,716, or 17.9%, during the year ended December 31, 2025, as compared to the year ended December 31, 2024. These costs include Board expenses, business insurance, corporate travel, and other general business expenses. The decrease is attributable to decreases in Board and business insurance expenses.

Research and Development Expenses

The table below summarizes our research and development expenses for the years ended December 31, 2025, and 2024 as well as the percentage of change year-over-year:

		For the Years Ended
		December 31,												%
Description		2025				2024				Change				Change
Personnel Costs			243,362				705,914				(462,552	)			(65.5	)
Development Programs			2,894,745				2,387,664				507,081				21.2
Professional Services			299,002				317,134				(18,132	)			(5.7	)
Regulatory Expenses			-				390				(390	)			(100.0	)
Other Research & Development Expense			34,732				29,908				4,824				16.1
Total Research & Development Expenses			3,473,866				3,443,034				30,832				0.9

Salaries and wages decreased $462,552, or 65.5%, during the year ended December 31, 2025, as compared to the year ended December 31, 2024. During the year ended December 31, 2024, four full-time staff members separated from the Company. As of December 31, 2025, we have no full-time research and development staff members.

Development program costs include those associated with pre-clinical development, clinical trials and other material and development programs for the biologics segment and consulting and general development expenses for the technology segment, including costs related to the development of the qc-LPU100 prototype, performance benchmarking, and LightSolver licensing activities. Costs increased $507,081, or 21.2%, during the year ended December 31, 2025, as compared to the year ended December 31, 2024. The increase is attributed to increases in expenses related to the biologic products, including drug products and clinical projects offset by a reduction of expenses for pre-clinical projects and the startup and consulting expenses related to the technology product.

Professional services costs decreased $18,132, or 5.7%, during the year ended December 31, 2025, as compared to the year ended December 31, 2024. These costs include the scientific advisory board, general consulting services, legal and other fees associated with the maintenance of the Company's intellectual property. The decrease is associated with a decline in legal and scientific advisory board fees offset by an increase in general consulting services.

Regulatory expenses decreased $390, or 100%, during the year ended December 31, 2025, as compared to the year ended December 31, 2024. Regulatory expenses include audits, registration fees and other regulatory expenses. During the year ended December 31, 2025, the Company did not incur any regulatory expenses.

Other research and development expenses increased $4,824, or 16.1%, during the year ended December 31, 2025, as compared to the year ended December 31, 2024. These expenses include laboratory supplies, shipping and freight expenses, training, and travel while working with third-party trial sites. The increase is attributable to an increase in specialized freight costs for materials offset by decreases in global licensing and travel in support of the various studies.

Stock-Based Compensation

Stock-based compensation increased $517,253 during the year ended December 31, 2025, as compared to the year ended December 31, 2024. During the year ended December 31, 2025, stock-based compensation totalled $2,174,524 as follows:

	●	$148,584 for the amortization of the final tranche of stock options issued to directors, staff, and service providers during the year ended December 31, 2023.
	●	$40,906 for 1,250 stock options issued to staff and service providers in April 2025. The fair value of the stock options was determined using the Black-Scholes method (exercise price $18.32 per share, stock price $18.32 per share, volatility of 123.72%, discount rate of 4.34%, and a ten-year term). The options vested upon issuance.
	●	$72,341 for 1,543,300 shares of common stock issued to a service provider in August 2024. The fair value of the common stock was determined using the Black-Scholes method (common stock price $0.0486, volatility of 127.42%, discount rate of 4.23%, and a ten-year term). The shares were subject to approval by the shareholders which was received November 14, 2025.
	●	$42,433 for 7,594 restricted stock units issued to a service provider in October 2025. The fair value of the restricted stock units was determined using the Black-Scholes method (exercise price $5.75 per share, stock price $3.95 per share, volatility of 128.39%, discount rate of 4.13%, and a ten-year term). The restricted stock units vested upon issuance.
	●	$1,249,245 for 225,000 restricted stock units issued to directors, staff, and service providers in October 2025. The fair value of the restricted stock units was determined using the Black-Scholes method (exercise price $5.75 per share, stock price $5.75 per share, volatility of 128.39%, discount rate of 4.13%, and a ten-year term). The 17,287 restricted stock units vested upon issuance. The remaining 207,713 restricted stock units were subject to the approval of an expansion of the common stock available under the Company's 2023 Stock Incentive Plan by the shareholders which occurred on November 14, 2025.
	●	$120,698 for 25,000 stock options issued to a service provider in October 2025. The fair value of the stock options was determined using the Black-Scholes method (exercise price $5.00 per share, stock price $5.00 per share, volatility of 127.42, discount rate of 4.23%, and a ten-year term). The stock options vested upon issuance.
	●	$500,317 for 75,000 stock options issued to a service provider in December 2025. The fair value of the stock options was determined using the Black-Scholes method (exercise price $6.90 per share, stock price $6.90 per share, volatility of 129.29, discount rate of 4.17%, and a ten-year term). The stock options vested upon issuance.

During the year ended December 31, 2024, stock-based compensation totalled $1,060,444. These expenses represent the amortization for two tranches of vested stock options issued to directors, staff, and service providers during the year ended December 31, 2023.

Franchise Tax Expense

Franchise tax expense increased $159,502 during the year ended December 31, 2025, as compared to the year ended December 31, 2024. These taxes, paid to the State of Delaware, are based on the total number of authorized shares of our Common Stock. The increase is therefore primarily driven by the increase in our authorized shares of Common Stock during the year ended December 31, 2025.

Warrant Issuance Expenses

Warrant issuance expenses declined $1,244,185 during the year ended December 31, 2025, as compared to the year ended December 31, 2024. These expenses represent the bifurcated fair market value of warrants issued in conjunction with public and private placements of our preferred stock.

Preferred Stock Issuance Expenses

During the year ended December 31, 2025, we incurred expenses totaling $264,417 related to the issuance of Series H Preferred Stock. During the year ended December 31, 2024, we incurred expenses totaling $539,097 related to the issuance of the Series F-1 Preferred Stock and $969,505 related to the issuance of the Series G Preferred Stock.

Other Income and Expense

The table below summarizes our other income and expenses for the years ended December 31, 2025 and 2024 as well as the percentage of change year-over-year:

		For the Years Ended
		December 31,												%
Description		2025				2024				Change				Change
Interest & Dividend Income			225,388				351,809				(126,421	)			(35.9	)
Gain on Sale of Marketable Securities			2,176				976				1,200				123.0
Gain on changes in fair value of Marketable Securities			38,671				671				38,000				5,663.2
Gain/(Loss) on changes in fair value of Derivative Liabilities			983,000				(388,000	)			1,371,000				(353.4	)
Loss on changes in fair value of Warrant Liabilities			-				(4,410,000	)			4,410,000				(100.0	)
Loss on Issuance of Stock			-				(8,846,000	)			8,846,000				(100.0	)
Loss on investment in Oravax Medical			(1,500,000	)			-				(1,500,000	)			100.0
Loss on changes in fair value of the Contingent Consideration Liabilities			(1,529,000	)			-				(1,529,000	)			100.0
Recovery on Uninsured Casualty Loss			-				100,000				(100,000	)			(100.0	)
Total Other Income/Expense			(1,779,765	)			(13,190,544	)			11,410,779				(86.5	)

Other expenses, net of income, totaled $1,779,765 for the year ended December 31, 2025, and totaled $13,190,544 for the year ended December 31, 2024.

During the year ended December 31, 2025, interest and dividend income decreased $126,421, or 35.9% as compared to the year ended December 31, 2024, related to the availability of funds available for investment and the fluctuation of interest rates due to market conditions. Other investment related activities increased $38,000, or 5,663% during the year ended December 31, 2025, as compared to the year ended December 31, 2024 related to fluctuations in market conditions.

During the year ended December 31, 2025, we recorded income of $983,000 related to the changes in fair value of the derivative liabilities.

●

For the Series H Derivative (as defined herein), we recorded a gain of $983,000. We estimated the $0 fair value of the bifurcated embedded derivative at December 31, 2025 using a Monte Carlo simulation model, with the following inputs: the fair value of our common stock of $1.15 on the valuation date, estimated equity volatility of 105.0%, estimated traded volume volatility of 320.0%, the time to maturity of 0.5 years, a discounted market interest rate of 6.0%, dividend rate of 10.0%, a penalty dividend rate of 15.0%, and probability of default of 3.60%.

During the year ended December 31, 2024, we recorded a loss of $388,000 related to the change in fair value of the derivative liabilities.

	●	For the Series F Derivative (as defined herein), we recorded a gain of $61,000. We estimated the $0 fair value of the bifurcated embedded derivative at December 31, 2024 using a Monte Carlo simulation model, with the following inputs: the fair value of our common stock of $1.15 on the valuation date, estimated equity volatility of 105.0%, estimated traded volume volatility of 320.0%, the time to maturity of 0.5 years, a discounted market interest rate of 6.0%, dividend rate of 10.0%, a penalty dividend rate of 15.0%, and probability of default of 3.60%.
	●	For the Series F-1 Derivative (as defined herein), we recorded a loss of $449,000. We estimated the $1,303,000 fair value of the bifurcated embedded derivative at December 31, 2024 using a Monte Carlo simulation model, with the following inputs: the fair value of our common stock of $1.15 on the valuation date, estimated equity volatility of 105.0%, estimated traded volume volatility of 320.0%, the time to maturity of 0.5 years, a discounted market interest rate of 7.0%, dividend rate of 10.0%, a penalty dividend rate of 15.0%, and probability of default of 3.60%.

During the year ended December 31, 2024, we recorded a loss of $4,410,000 related to the change in fair value of the warrant liabilities as follows:

	●	For the Series F Warrants (as defined herein), we recorded a loss of $7,094,000, The fair value of the Series F warrants of approximately $7,194,000 was estimated at March 31, 2024 utilizing the Black Scholes Model using the following weighted average assumptions: dividend yield 0%; remaining term of 3.90 years; equity volatility of 110.0%; and a risk-free interest rate of 4.31%.
	●	For the Series F-1 Short-Term Warrants (as defined herein), we recorded a gain of $646,000, The fair value of the Series F-1 Short-Term warrants of approximately $2,660,000 was estimated at July 25, 2024 utilizing the Black Scholes Model using the following weighted average assumptions: dividend yield 0%; remaining term of 1.33 years; equity volatility of 115.0%; and a risk-free interest rate of 4.70%.
	●	For the Series F-1 Long-Term Warrants (as defined herein), we recorded a gain of $322,000, The fair value of the Series F-1 Long-Term warrants of approximately $34,305,000 was estimated at July 25, 2024 utilizing the Black Scholes Model using the following weighted average assumptions: dividend yield 0%; remaining term of 4.83 years; equity volatility of 120.0%; and a risk-free interest rate of 4.10%.
	●	For the Series G Short-Term Warrants (as defined herein), we recorded a gain of $1,146,000, The fair value of the Series G Short-Term warrants of approximately $4,713,000 was estimated at July 25, 2024 utilizing the Black Scholes Model using the following weighted average assumptions: dividend yield 0%; remaining term of 1.33 years; equity volatility of 115.0%; and a risk-free interest rate of 4.70%.
	●	For the Series G Long-Term Warrants (as defined herein), we recorded a gain of $570,000, The fair value of the Series G Long-Term warrants of approximately $7,630,000 was estimated at July 25, 2024 utilizing the Black Scholes Model using the following weighted average assumptions: dividend yield 0%; remaining term of 4.83 years; equity volatility of 120.0%; and a risk-free interest rate of 4.10%.

During the year ended December 31, 2024, we recorded a loss associated with the issuance of the Series F-1 Preferred Stock totaling $3,737,000 and the Series G Preferred Stock totaling $5,109,000. The losses resulted from the fair market value of the warrants issued exceeding the sum of the gross proceeds, discount and derivative derived from the placement of the preferred shares.

For the year ended December 31, 2025, we performed an analysis of the value of the Company's investment in Oravax Medical, LLC to determine its fair-market value. As a result of the analysis we determined the fair-value of the investment was $0 and we recorded a loss on the investment of $1,500,000.

The fair value of the contingent consideration for the LightSolver license acquisition equaled $10,909,000 using the Monte Carlo Simulation valuation method (risk free interest rate of 3.70%, cash discount rate of 8.90%, and a stock discount rate of 26.3%). The Company recognized a loss of $1,529,000 during the year ended December 31, 2025.

For the year ended December 31, 2023, we identified a casualty loss of $178,198 related to wire fraud due to a compromised electronic mail account. This incident occurred on May 17, 2023 and was discovered on July 20, 2023 when the vendor notified us of a delinquent invoice. An investigation determined that the original invoice from the vendor, sent to our consultant on this project, was intercepted and resent with altered wring instructions from a domain name that varied from the actual vendor's domain by one character. We notified our cyber insurance carrier on November 9, 2023. The Company recovered $100,000 of this loss from the insurance carrier on July 2, 2024.

Income Taxes

As of December 31, 2025, and 2024, we had U.S. federal net operating loss carry forwards of $123,715,103 and $116,475,704, respectively. $43,262,318 of the U.S. federal net operating loss generated in tax years beginning before January 1, 2018 expire beginning with the year ending December 31, 2026 through 2037. The remaining U.S. federal net operating loss of $80,452,785 does not expire, however it is limited to 80% of each subsequent year's net income. As of December 31, 2025, and 2024, we had U.S. state net operating loss carry forwards of $58,300,567 and $55,721,156, respectively, some of which expire beginning with the year ending December 31, 2026 through 2045.

Under Section 382 of the Code, use of our net operating loss carryforwards is limited if we experience a cumulative change in ownership of greater than 50% in a moving three-year period. We experienced an ownership change as a result of the Merger and therefore our ability to utilize our net operating loss carryforwards and certain credit carryforwards are limited. The limitation is determined by the fair market value of our common stock outstanding immediately prior to the ownership change, multiplied by the applicable federal rate. It is expected that the Merger caused our net operating loss carryforwards to be limited. However, the limitation had no impact on our financial statements since we recorded a full valuation allowance for our deferred tax assets as of December 31, 2025 and 2024 (See Note 7 to the Consolidated Financial Statements).

Liquidity and Capital Resources

As of December 31, 2025, the Company's cash on hand was $986,996 and marketable securities were $14,801,267. The Company has incurred a net loss attributable to stockholders of $14,984,447 for the year ended December 31, 2025. As of December 31, 2025, the Company had working capital of $11,408,516 and stockholders' equity of $21,751,675 including an accumulated deficit of $144,122,732. During the year ended December 31, 2025, cash flows used in operating activities were $9,065,619.

As of December 31, 2024, the Company's cash on hand was $173,154 and marketable securities were $8,345,082. The Company has incurred a net loss attributable to stockholders of $27,161,219 for the year ended December 31, 2024. As of December 31, 2024, the Company had working capital of $2,710,626 and stockholders' equity of $9,789,740 including an accumulated deficit of $129,138,286. During the year ended December 31, 2024, cash flows used in operating activities were $8,976,347. Since inception, the Company has met its liquidity requirements principally through the sale of its common stock and preferred stock in public offerings and private placements; however, there is no assurance that management will be able to obtain additional financing in the future.

Based on our current operating plan, existing cash balances, and expected cash flows, management believes that the Company has sufficient liquidity to fund its operations for at least the next twelve months. However, our ability to continue as a going concern is dependent on our ability to increase revenues, manage operating expenses, and access additional capital as needed. Liquidity constraints and access to capital markets could negatively affect our liquidity and require changes to our operating or investment strategy.

Capital Requirements

Our future capital requirements will depend on numerous factors, including the timing and extent of market acceptance of our products and services, investments in product development, sales and marketing activities, working capital requirements, and the timing and amount of future revenue. We may seek to raise additional capital through equity or debt financings, strategic partnerships, or other arrangements. There can be no assurance that such financing will be available on acceptable terms, or at all.

Operating Activities

Our net cash used by operating activities during the year ended December 31, 2025 was $9,065,619, consisting primarily of a net loss of $11,627,122 a loss of $1,529,000 on the fair value adjustment to contingent compensation payable, a loss of $1,500,000 on the fair value of the Oravax Medical investment, a decrease in trade and other payables of $881,382 and a decrease in license fees payable of $838,227 offset by fair value adjustments for derivatives of $983,000, non-cash share-based compensation of $2,174,524, and a decrease in prepaid expenses of $119,635.

Our net cash used by operating activities during the year ended December 31, 2024, were $8,976,347, consisting primarily of a net loss of $23,359,334, a decrease in trade and other payables of $814,114, and a decrease in deferred compensation payable of $100,538, offset by fair value adjustments for derivatives of $388,000, fair value adjustments for warrants of $4,410,000, non-cash losses on the issuance of preferred stock of $8,846,000, non-cash share-based compensation of $1,057,271, and non-cash compensation to a service provider of $600,000.

Investing Activities

Our net cash used in investing activities totaled $8,424,360 for the year ended December 31, 2025, as compared to cash used in investing activities of $6,101,329. During the year ended December 31, 2025, we purchased a technology license for $2,009,022, purchased securities totaling $19,062,985, and sold securities totaling $12,647,647. During the year ended December 31, 2024, we purchased securities totaling $12,851,809 and sold securities totaling $6,750,480.

Financing Activities

Net cash provided by financing activities during the year ended December 31, 2025, was $18,303,821 which consisted of $6,654,838 for the net proceeds from the sale of preferred stock and $11,726,609 for the redemption of common stock warrants offset by $77,626 for dividends and $77,090 on preferred stock. Net cash provided by financing activities during the year ended December 31, 2024, was $12,569,820 which consisted of $14,000,000 for the net proceeds from the sale of preferred stock offset by $73,472 for the redemption of preferred stock and dividends on preferred stock of $1,356,708.

Series F Preferred Stock Offering

On February 21, 2023, the Company entered into a Securities Purchase Agreement (the "Series F Purchase Agreement") with certain accredited investors (the "Series F Investors"), pursuant to which it agreed to sell to the Investors (i) an aggregate of 15,000 shares of the Company's newly-designated Series F convertible preferred stock (the "Series F Preferred Shares") with a stated value of $1,000 per share, initially convertible into up to 66,523 shares of the Company's Common Stock at an initial conversion price of $225.50 per share (the "Series F Conversion Price"), subject to adjustment, and (ii) warrants to acquire up to an aggregate of 66,523 shares of the Company's Common Stock, subject to adjustment (the "Series F Warrants") (collectively, the "February 2023 Offering"). In September 2025, in connection with the Company's 1-for-100 reverse stock split (the "2025 Reverse Stock Split"), and pursuant to the stock combination event adjustment provisions contained in the Series F Certificate of Designations, the exercise price of the Series F Warrants was reduced to $3.3713 per share. As of December 31, 2025, the Series F Preferred Stock are no longer outstanding.

On April 8, 2025, the Company entered into an Omnibus Amendment Agreement ("April 2025 Amendment Agreement") with the Required Holders (as defined in the Series F Certificate of Designations and Series F-1 Certificate of Designations), pursuant to which, the Required Holders agreed to amend (i) the Series F-1 Certificate of Designations, as described below, by filing a Certificate of Amendment to the Series F-1 Certificate of Designations with the Secretary of State (the "April 2025 Series F-1 Certificate of Amendment"), (ii) the Series F Certificate of Designations, as described below, by filing a Certificate of Amendment to the Series F Certificate of Designations with the Secretary of State (the "April 2025 Series F Certificate of Amendment"), (iii) the Series F-1 Purchase Agreement, to amend the definition of "Excluded Securities" such that the definition includes the issuance of Common Stock issued after the date of the Series F-1 Purchase Agreement pursuant to an Approved Stock Plan (as defined in the Series F-1 Purchase Agreement), which in the aggregate does not exceed more than 2% of the shares of Common Stock issued and outstanding as of the date of such issuance (the "Excluded Securities Modification"), and (iv) to amend the term of the Series F-1 Short-Term Warrants to be five years from the date of issuance. In addition, in consideration of the foregoing, the Company agreed to reduce the size of the board of directors of the Company to no more than six directors, no later than the Company's 2025 annual meeting of stockholders.

The April 2025 Series F Certificate of Amendment amends the Series F Certificate of Designations to (A) (i) extend the maturity date to June 30, 2025, and (ii) modify the schedule of Installment Dates (as defined in the Series F Certificate of Designations), in each case, effective as of December 31, 2024, and (B) subject to obtaining the approval of the Company's stockholders, effective January 1, 2025, increase the aggregate Stated Value of the Series F Preferred Shares outstanding to an amount equal to 110% of the aggregate Stated Value of the Series F Preferred Shares outstanding. The April 2025 Series F Certificate of Amendment was filed with the Secretary of State, effective as of April 8, 2025.

On August 19, 2025, the Company entered into an Omnibus Amendment Agreement ("August 2025 Amendment Agreement") with the Required Holders (as defined in the Series F Certificate of Designations and Series F-1 Certificate of Designations), pursuant to which, the Required Holders agreed to amend (i) the Series F-1 Certificate of Designations, as described below, by filing a Certificate of Amendment to the Series F-1 Certificate of Designations with the Secretary of State (the "August 2025 Series F-1 Certificate of Amendment"), (ii) the Series F Certificate of Designations, as described below, by filing a Certificate of Amendment to the Series F Certificate of Designations with the Secretary of State (the "August 2025 Series F Certificate of Amendment"), and (iii) to amend the term of the Series F Warrants and Series F-1 Warrants such that such warrants have a term expiring on August 15, 2030. In addition, in consideration of the foregoing, the Required Holder is entitled to nominate one director to the board of directors, provided that such nomination shall be approved by the Company's Nominating and Governance Committee, which approval shall not be unreasonably withheld.

The August 2025 Series F Certificate of Amendment amends the Series F Certificate of Designations to (A) (i) extend the maturity date to December 31, 2025, and (ii) modify the schedule of Installment Dates (as defined in the Series F Certificate of Designations), in each case, effective as of June 30, 2025. The August 2025 Series F-1 Certificate of Amendment amends the Series F-1 Certificate of Designations to (A) (i) extend the maturity date to December 31, 2025, and (ii) modify the schedule of Installment Dates (as defined in the Series F Certificate of Designations), in each case, effective as of June 30, 2025.

On September 2, 2025, the Company entered into an Omnibus Amendment Agreement (the "September 2025 Omnibus Amendment") with the Required Holders (as defined in each of (i) the Series F Certificate of Designations and (ii) the Series F-1 Certificate of Designations) pursuant to which, the Required Holders agreed to (i) amend and restate the Series F Certificate of Designations by filing a Second Amended and Restated Certificate of Designations of the Series F Preferred Stock (the "Second Amended and Restated Series F Certificate of Designations") with the Secretary of State, and (ii) amend and restate the Series F-1 Certificate of Designations by filing an Amended and Restated Certificate of Designations of the Series F-1 Preferred Stock (the "Amended and Restated Series F-1 Certificate of Designations") with the Secretary of State. Each of the Second Amended and Restated Series F Certificate of Designations and the Amended and Restated Series F-1 Certificate of Designations (i) extend the maturity date of each of Series F Convertible Preferred Stock and Series F-1 Convertible Preferred Stock to March 2, 2027, and (ii) remove the amortization payments and related terms and covenants.

Series F-1 Preferred Stock Offering

On May 20, 2024, the Company entered into a Securities Purchase Agreement (the "Series F-1 Purchase Agreement") with certain accredited investors (the "Series F-1 Investors") pursuant to which it agreed to sell to the Series F-1 Investors (i) an aggregate of 5,050 shares of the Company's newly-designated Series F-1 Preferred Stock, initially convertible into up to 27,813 shares of Common Stock at a conversion price of $181.60 per share (the "Series F-1 Conversion Shares"), (ii) short-term warrants to acquire up to an aggregate of 27,813 shares of Common Stock (the "Series F-1 Short-Term Warrants") at an exercise price of $181.60 per share, and (iii) long-term warrants to acquire up to an aggregate of 27,813 shares of Common Stock (the "Series F-1 Long-Term Warrants," and collectively with the Series F-1 Short-Term Warrants, the "Series F-1 Warrants") at an exercise price of $181.60 per share (collectively, the "Series F-1 Private Placement"). In September 2025, in connection with the Company's 1-for-100 reverse stock split (the "2025 Reverse Stock Split"), and pursuant to the stock combination event adjustment provisions contained in the Series F Certificate of Designations, the exercise price of the Series F-1 Warrants was reduced to $3.3713 per share. As of December 31, 2025, the Series F-1 Preferred Stock are no longer outstanding.

On April 8, 2025, the Company entered into the April 2025 Amendment Agreement with the Required Holders (as defined in the Series F Certificate of Designations and Series F-1 Certificate of Designations), pursuant to which, the Required Holders agreed to amend (i) the Series F-1 Certificate of Designations, as described below, by filing the April 2025 Series F-1 Certificate of Amendment with the Secretary of State of the State of Delaware, (ii) the Series F Certificate of Designations, as described below, by filing the April 2025 Series F Certificate of Amendment, (iii) the Series F-1 Purchase Agreement, to amend the definition of "Excluded Securities" such that the definition includes the issuance of common stock issued after the date of the Seres F-1 Purchase Agreement pursuant to an Approved Stock Plan (as defined in the Series F-1 Purchase Agreement), which in the aggregate does not exceed more than 2% of the shares of common stock issued and outstanding as of the date of such issuance, and (iv) to amend the term of the Series F-1 Short-Term Warrants to be five years from the date of issuance. In addition, in consideration of the foregoing, the Company agreed to reduce the size of the board of directors of the Company to no more than six directors, no later than the Company's 2025 annual meeting of stockholders. The April 2025 Series F-1 Certificate of Amendment amends the Series F-1 Certificate of Designations to amend the definition of "Excluded Securities" substantially similar to the Excluded Securities Modification. The April 2025 Series F-1 Certificate of Amendment was filed with the Secretary of State of the State of Delaware, effective as of April 8, 2025.

On August 19, 2025, the Company entered the August 2025 Amendment Agreement with the Required Holders (as defined in the Series F Certificate of Designations and Series F-1 Certificate of Designations), pursuant to which, the Required Holders agreed to amend (i) the Series F-1 Certificate of Designations, as described below, by filing a Certificate of Amendment to the Series F-1 Certificate of Designations with the Secretary of State, (ii) the Series F Certificate of Designations, as described below, by filing a Certificate of Amendment to the Series F Certificate of Designations with the Secretary of State, and (iii) to amend the term of the Series F Warrants and Series F-1 Warrants such that such warrants have a term expiring on August 15, 2030. In addition, in consideration of the foregoing, the Required Holder is entitled to nominate one director to the board of directors, provided that such nomination shall be approved by the Company's Nominating and Governance Committee, which approval shall not be unreasonably withheld.

The August 2025 Series F Certificate of Amendment amends the Series F Certificate of Designations to (A) (i) extend the maturity date to December 31, 2025, and (ii) modify the schedule of Installment Dates (as defined in the Series F Certificate of Designations), in each case, effective as of June 30, 2025. The August 2025 Series F-1 Certificate of Amendment amends the Series F-1 Certificate of Designations to (A) (i) extend the maturity date to December 31, 2025, and (ii) modify the schedule of Installment Dates (as defined in the Series F Certificate of Designations), in each case, effective as of June 30, 2025.

On September 2, 2025, the Company entered into the September 2025 Omnibus Amendment with the Required Holders (as defined in each of (i) the Series F Certificate of Designations and (ii) the Series F-1 Certificate of Designations) pursuant to which, the Required Holders agreed to (i) amend and restate the Series F Certificate of Designations by filing a Second Amended and Restated Certificate of Designations of the Series F Preferred Stock with the Secretary of State, and (ii) amend and restate the Series F-1 Certificate of Designations by filing an Amended and Restated Certificate of Designations of the Series F-1 Preferred Stock with the Secretary of State. Each of the Second Amended and Restated Series F Certificate of Designations and the Amended and Restated Series F-1 Certificate of Designations (i) extend the maturity date of each of Series F Convertible Preferred Stock and Series F-1 Convertible Preferred Stock to March 2, 2027, and (ii) remove the amortization payments and related terms and covenants.

Series G Preferred Stock Offering

On May 20, 2024, the Company entered into a Securities Purchase Agreement (the "Series G Purchase Agreement") with certain accredited investors (the "Series G Investors"), pursuant to which it agreed to sell to the Series G Investors (i) an aggregate of 8,950 shares of the Company's newly-designated Series G Preferred Stock, initially convertible into up to 49,288 shares of the Company's Common Stock, at a conversion price of $181.60 per share (ii) short-term warrants to acquire up to an aggregate of 49,288 shares of Common Stock (the "Series G Short-Term Warrants") at an exercise price of $181.60 per share, and (iii) long-term warrants to acquire up to an aggregate of 49,288 shares of Common Stock (the "Series G Long-Term Warrants," and collectively with the Series G Short-Term Warrants, the "Series G Warrants") at an exercise price of $181.60 per share (collectively, the "Series G Private Placement"). The closing of the Series G Private Placement occurred on May 23, 2024 (the "Series G Closing Date"). The Series G Conversion Price is subject to customary adjustments for stock dividends, stock splits, reclassifications and the like, and subject to price-based adjustment in the event of any issuances of Common Stock, or securities convertible, exercisable or exchangeable for Common Stock, at a price below the then-applicable Series G Conversion Price (subject to certain exceptions).

On April 17, 2025, in connection with the issuance of stock options to certain officers of the Company, (i) the Series G Conversion Price was equal to $18.32 per share due to the full ratchet anti-dilution provisions contained in the Series G Certificate of Designations. In August 2025, in connection with the 2025 Reverse Stock Split, and pursuant to the stock combination event adjustment provisions contained in the Series G Certificate of Designations, the Series G Conversion Price was reduced to $3.3713 per share.

At any time after the issuance date of the Series G Preferred Shares, the Company has the option to redeem in cash all or any portion of the shares of Series G Preferred Shares then outstanding at a premium upon notice by the Company to all holders of the Series G Preferred Shares.

The holders of the Series G Preferred Shares are entitled to dividends of 10% per annum, compounded monthly, which will be payable in arrears monthly, at the holder's options, (i) in cash, (ii) "in kind" in the form of additional shares of Series G Preferred Shares (the "PIK Shares"), or (iii) in a combination thereof, in each case, in accordance with the terms of the Certificate of Designations of the Series G Preferred Stock (the "Series G Certificate of Designations"). Upon the occurrence and during the continuance of a Triggering Event (as defined in the Series G Certificate of Designations), the Series G Preferred Stock will accrue dividends at the rate of 15% per annum. Upon conversion or redemption, the holders of the Series G Preferred Shares are also entitled to receive a dividend make-whole payment. The holders of the Series G Preferred Shares are entitled to vote with holders of the Common Stock on an as-converted basis, with the number of votes to which each holder of Series G Preferred Shares is entitled to be calculated assuming a conversion price of $2.253 per share, which was the Minimum Price (as defined in Rule 5635 of the Rule of the Nasdaq Stock Market) applicable immediately before the execution and delivery of the Series G Purchase Agreement, subject to certain beneficial ownership limitations as set forth in the Series G Certificate of Designations. During the year ended December 31, 2025, the Company recorded dividends totaling $914,377. During the year ended December 31, 2024, the Company recorded dividends totaling $559,032.

Notwithstanding the foregoing, the Company's ability to settle conversions and make dividend make-whole payments using shares of Common Stock is subject to certain limitations set forth in the Series G Certificate of Designations. Further, the Series G Certificate of Designations contains a certain beneficial ownership limitation, which applies to each Series G Investor, other than PharmaCyte Biotech, Inc., after giving effect to the issuance of shares of Common Stock issuable upon conversion of the Series G Preferred Shares or as part of any dividend make-whole payment under the Series G Certificate of Designations.

Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, each holder of shares of the Series G Preferred Stock shall be entitled to receive out of the assets, whether capital or surplus, of the Company an amount per share of Series G Preferred Stock equal to the greater of (A) 125% of the stated value of such share of Series G Preferred Stock (plus any applicable make-whole amount, unpaid late charge or other applicable amount) on the date of such payment and (B) the amount per share such holder would receive if such holder converted such share of Series G Preferred Stock into Common Stock immediately prior to the date of such payment. All shares of capital stock of the Company shall be junior in rank to all shares of Series G Preferred Stock with respect to the preferences as to payments upon liquidation.

On June 17, 2024, the Company entered into an Amendment Agreement (the "Series G Amendment") with the Required Holders (as defined in the Series G Certificate of Designations). Pursuant to the Series G Amendment, the Required Holders agreed to amend the Series G Certificate of Designations by filing a Certificate of Amendment ("Series G Certificate of Amendment") to the Series G Certificate of Designations with the Secretary of State of the State of Delaware (the "Secretary of State") to increase the number of authorized shares of Series G Preferred Stock from 8,950 to 12,826,273, in order to authorize a sufficient number of shares of Series G Preferred Stock for the payment of PIK Shares. On June 17, 2024, the Company filed the Series G Certificate of Amendment with the Secretary of State, thereby amending the Series G Certificate of Designations. The Series G Certificate of Amendment became effective with the Secretary of State upon filing.

The shares Series G Preferred Stock are classified as temporary equity as the holders of the Series G Preferred Stock have the right to require the Company to redeem for cash all or any portion of each such holder's shares upon the suspension from trading or the failure of the Common Stock to be trading or listed (as applicable) on an eligible trading market for a period of five (5) consecutive trading days. The Series G Preferred Stock is not unconditionally redeemable and is only conditionally puttable at the holder's option upon this trading suspension or failure. This would not be considered to be within the Company's control.

On August 8, 2024, the Company entered into an Amendment Agreement (the "August Series G Amendment") with the Required Holders (as defined in the Series G Certificate of Designations). Pursuant to the August Series G Amendment, the Required Holders agreed to amend the Series G Certificate of Designations by filing a Certificate of Amendment ("August Series G Certificate of Amendment") to the Series G Certificate of Designations with the Secretary of State to adjust the calculation of the PIK Shares. On August 8, 2024, the Company filed the August Series G Certificate of Amendment with the Secretary of State, thereby amending the Series G Certificate of Designations. The August Series G Certificate of Amendment became effective with the Secretary of State upon filing.

During the year ended December 31, 2025, the Company issued 1,864 shares of Series G Preferred Stock with a stated value of $1,864,000 in lieu of dividends totaling $1,164,682 and a reduction of additional paid-in capital totaling $699,318. During the year ended December 31, 2024, the Company issued 0 shares of Series G Preferred Stock with a stated value of $0 in lieu of dividends totaling $0 and a reduction of additional paid-in capital totaling $0.

Series H Preferred Stock Offering

On September 2, 2025, the Company entered into a Securities Purchase Agreement (the "Series H Purchase Agreement") with certain accredited investors (the "Series H Investors") pursuant to which it agreed to sell to the Series H Investors (i) an aggregate of 7,000 shares of the Company's newly-designated Series H Preferred Stock, initially convertible into up to 1,400,000 shares of Common Stock at an initial conversion price of $5.00 per share (the "Series H Conversion Shares"), and (ii) warrants to acquire up to an aggregate of 1,400,000 shares of Common Stock (the "Series H Warrants") at an exercise price of $5.00 per share (collectively, the "Series H Private Placement"). The closing of the Series H Private Placement occurred on September 4, 2024 (the "Series H Closing Date"). The aggregate gross proceeds from the Private Placement were $7,000,000.

The Series H Conversion Price is subject to customary adjustments for stock dividends, stock splits, reclassifications and the like, and subject to price-based adjustment in the event of any issuances of Common Stock, or securities convertible, exercisable or exchangeable for Common Stock, at a price below the then-applicable Series H Conversion Price (subject to certain exceptions). In September 2025, in connection with the 2025 Reverse Stock Split and pursuant to the full ratchet anti-dilution provisions contained in the Series H Certificate of Designations, the Series H Conversion Price was reduced to $3.3713 per share.

The holders of the Series H Preferred Stock are entitled to dividends of 7% per annum, compounded monthly, which are payable in cash. Upon the occurrence and during the continuance of a Triggering Event (as defined in the Certificate of Designations of the Series H Convertible Preferred Stock (the "Series H Certificate of Designations")), the Series H Preferred Stock will accrue dividends at the rate of 15% per annum. The holders of the Series H Preferred Stock are entitled to vote with holders of the Common Stock on an as-converted basis, with the number of votes to which each holder of Series H Preferred Stock is entitled to be calculated assuming a conversion price of $4.83 per share, which was the Minimum Price (as defined in Rule 5635 of the Rule of the Nasdaq Stock Market) applicable immediately before the execution and delivery of the Series H Purchase Agreement, subject to certain beneficial ownership limitations as set forth in the Series H Certificate of Designations. During the year ended December 31, 2025 and December 31, 2024, the Company recorded dividends totaling $182,065 and $0, respectively.

Except with respect to Pharmacyte, the Series H Certificate of Designations contains a certain beneficial ownership limitation after giving effect to the issuance of shares of Common Stock issuable upon conversion of the Series H Certificate of Designations or Series H Warrants.

In connection with the Series H Private Placement, the Company and the Series H Investors entered into that certain Registration Rights Agreement, dated as of September 2, 2025 (the "Series H Registration Rights Agreement," and, together with the Series H Purchase Agreement, the Series H Certificate of Designations, and the Series H Warrants, the "Transaction Documents"), pursuant to which, the Company agreed to, among other things, prepare and file with the SEC a registration statement (the "Series H Registration Statement") covering the resale of all of the Registrable Securities (as defined in the Series H Registration Rights Agreement) prior to the applicable Filing Deadline (as defined in the Series H Registration Rights Agreement). On October 3, 2025, the Company filed the Series H Registration Statement with the SEC, which was declared effective on November 28, 2025.

On September 30, 2025, the Company entered into an Omnibus Waiver and Amendment (the "September 2025 Amendment") with the Required Holders (as defined in the Series H Certificate of Designations). Pursuant to the Amendment, the Required Holders agreed (A) to amend (i) the Series H Certificate of Designations, as described below, by filing a Certificate of Amendment ("September 2025 Certificate of Amendment") to the Series H Certificate of Designations with the Secretary of State, (ii) the Series H Purchase Agreement to amend the definition of "Excluded Securities" such that the definition includes the issuance of Common Stock issued after the date of the Series H Purchase Agreement pursuant to an Approved Stock Plan (as defined in the Series H Purchase Agreement) which in the aggregate does not exceed more than 15.0% of the sum of (x) shares of Common Stock issued and outstanding as of the date of the Series H Purchase Agreement, and (y) the shares of Common Stock issuable upon conversion of certain of the Company's outstanding shares of preferred stock (the "Excluded Securities Modification"), and (iii) the Series H Registration Rights Agreement such that the Series H Registration Statement is required to be filed with the SEC by the date that is 30 calendar days following the Series H Closing Date and (B) waive (i) any prohibitions or limitations under the Transaction Documents in connection with the issuance by the Company of certain warrants to purchase Common Stock to certain current and future consultants of the Company, (ii) any prohibitions or limitations under the Transaction Documents in connection with the registration of certain securities of the Company, and (iii) any failure by the Company to file the Series H Registration Statement by the Filing Deadline.

The September 2025 Certificate of Amendment amends the Series H Certificate of Designations to amend the definition of "Excluded Securities" substantially similar to the Excluded Securities Modification. On October 3, 2025, the Company filed the September 2025 Certificate of Amendment with the Secretary of State, thereby amending the Series H Certificate of Designations. The September 2025 Certificate of Amendment became effective with the Secretary of State upon filing.

Critical Accounting Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("US GAAP") requires management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying notes. Future events and their effects cannot be determined with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment. Actual results inevitably will differ from those estimates, and such differences may be material to the financial statements. The most significant accounting estimates inherent in the preparation of our financial statements include estimates associated with revenue recognition, impairment analysis of intangibles and stock-based compensation.

Our financial position, results of operations and cash flows are impacted by the accounting policies we have adopted. In order to get a full understanding of our financial statements, one must have a clear understanding of the accounting policies employed. A summary of our accounting policies is presented within the notes to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K. Our critical accounting estimates are as follows:

Our management's discussion and analysis of financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of our financial statements and related disclosures requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, costs and expenses, and the disclosure of contingent assets and liabilities in our financial statements. These items are monitored and analyzed by us for changes in facts and circumstances, and material changes in these estimates could occur in the future. We base our estimates on historical experience, known trends and events, and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may materially differ from these estimates under different assumptions or conditions.

While our significant accounting policies are described in more detail in the notes to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K, we believe that the following accounting policies are those most significant to the judgments and estimates used in the preparation of our consolidated financial statements.

Share-based Compensation

We account for share-based payments by recognizing compensation expense based upon the estimated fair value of the share-based payments on the date of grant. We determine the estimated fair value of the share-based payments granted using the fair market value of the stock in the case of restricted stock awards or Black-Scholes option pricing model in the case of stock options and recognize compensation costs ratably over the requisite service period which approximates the vesting period using the graded method. To calculate the fair value of the options, certain assumptions are made regarding components of the model, including the fair value of the underlying Common Stock, risk-free interest rate, volatility, expected dividend yield and expected option life. Changes to the assumptions could cause significant adjustments to the valuation. We calculate our volatility assumptions using the actual changes in the market value of our stock. Forfeitures are recognized as they occur. Our historical option exercises do not provide a reasonable basis to estimate an expected term due to the lack of sufficient data. Therefore, we estimate the expected term by using the simplified method. The simplified method calculates the expected term as the average of the vesting term plus the contractual life of the options. The risk-free interest rate is based on the U.S. Treasury yield in effect at the time of the grant for treasury securities of similar maturity. The assumptions used in determining the fair value of share-based awards represent our best estimates, but the estimates involve inherent uncertainties and the application of our judgment. As a result, if factors change and we use significantly different assumptions or estimates, our share-based compensation expense could be materially different in the future.

Mezzanine Equity

The Company accounts for certain equity instruments, including redeemable preferred stock, in accordance with applicable guidance in ASC 480 and related SEC interpretive guidance. Instruments that are redeemable for cash or other assets at the option of the holder or upon the occurrence of events that are not solely within the control of the Company are classified as mezzanine equity in the consolidated balance sheets. The classification and measurement of mezzanine equity involve significant judgment, particularly in evaluating the terms of the underlying agreements to determine whether redemption features are within the Company's control. The Company assesses each instrument at issuance and upon modification to determine the appropriate classification as a liability, mezzanine equity, or permanent equity. Mezzanine equity instruments are initially recorded at fair value, net of issuance costs and may include a discount. To the extent that redemption is probable or becomes certain, the Company may adjust the carrying value of the instrument to its redemption amount immediately or over the period to the earliest redemption date, depending on the specific terms of the instrument. Changes in these estimates or in the interpretation of contractual terms could have a material impact on the Company's financial position, results of operations, and earnings per share. For example, if the Company were to revise its assumptions regarding the likelihood or timing of a redemption event, the amount and timing of accretion recognized could change significantly. The Company continues to evaluate its mezzanine equity instruments for any modifications or events that could affect classification or measurement, including changes in contractual terms, amendments, or triggering events that may impact the probability of redemption.

Off-Balance Sheet Arrangements

We have no significant known off balance sheet arrangements.