IMPACT BIOMEDICAL INC.

Previous wording

Global BioLife, Inc. Through our majority owned subsidiary Global Biomedical, Inc., we own 81.8% of the outstanding equity of Global BioLife, Inc.

Current wording

Global BioLife, Inc. Through our majority owned subsidiary Global Biomedical, Inc., we own 81.8% of the issued and outstanding common stock of Global BioLife, Inc.

Previous wording

Sweet Sense, Inc. We are the owner of 95.5% of the outstanding equity of Sweet Sense.

Current wording

Sweet Sense, Inc. We own of 95.5% of the issued and outstanding common stock of Sweet Sense.

Previous wording

Laetose has a unique composition patent allowed in the United States and patents are pending in other countries worldwide.

Current wording

Laetose has a unique composition patent allowed in the United States and other countries worldwide.

Previous wording

On March 12, 2020 Alset International Limited (“Alset”), a related party, Global BioMedical Pte Ltd., a related party, DSS, Inc (“DSS”), a related party, and DSS BioHealth Security Inc. (“DSS BioHealth”), a related party, signed Term Sheets and subsequently on April 21, 2020, these four companies entered into Share Exchange Agreement (“Share Exchange”), based on which Global BioMedical Pte Ltd., agreed to sell all of the issued and outstanding shares of the Company to DSS BioHealth in exchange for the combination of common and preferred shares of DSS. Under the terms of the Share Exchange, DSS issued 483,334 shares of the DSS Common Stock nominally valued at $6.48 per share, and 46,868 newly issued shares of the DSS Series A Convertible Preferred Stock (“Series A Preferred Stock”), with a stated value of $46,868,000, or $1,000 per share, for a total consideration valued at $50 million. Due to several factors, including a discount for illiquidity, the value of the Series A Preferred Stock was discounted from $46,868,000 to $35,187,000, thus reducing the final consideration given to approximately $38,319,000. The Company’s Chairman, Heng Fai Ambrose Chan, a related party, who is also the largest shareholder of Alset, at the time of the signing of the Share Exchange Agreement was the beneficial owner of approximately 18.3% of the outstanding shares of DSS and is the Chairman of the Board of Directors of DSS. On August 21, 2020, the transaction was concluded, and the Company became a direct wholly owned subsidiary of DSS BioHealth. In connection with the acquisition, and the related accounting determination, DSS BioHealth has elected to apply push-down accounting and reflect in its financial statements of Impact BioMedical, the fair value of its assets and liabilities. Utilizing an income approach, the Company has completed its valuations of certain developed technology and pending patents assets acquired in the transaction as well the fair value of the non-controlling interests. More specifically, a Multi-Period Excess Earnings Method (“MPEEM”) estimates the value of an intangible asset by quantifying the amount of residual (or excess) estimated cash flows generated by the asset and discounting those cash flows to the present. These have been valued at approximately $22,260,000 and $3,910,000, respectively, and are included on the Consolidated Balance Sheet on December 31, 2020. Estimated useful life of these assets is twenty years, based on the remaining terms of the related patents, with annual amortization approximating $1,113,000. The Company has also completed its valuation of goodwill and deferred tax liabilities of Impact BioMedical, and has recorded goodwill of approximately $25,093,000, driven by other intangible assets that do not qualify for separate recognition, and a deferred tax liability of approximately $5,234,000. The goodwill is not deductible for tax purposes and has been allocated to Impact BioMedical in totality as a single repo…

Excerpt shortened here; the source contains the full paragraph.

Current wording

On March 12, 2020 Alset International Limited (“Alset”), a related party, Global BioMedical Pte Ltd., a related party, DSS, Inc (“DSS”), a related party, and DSS BioHealth Security Inc. (“DSS BioHealth”), a related party, signed Term Sheets and subsequently on April 21, 2020, these four companies entered into Share Exchange Agreement (“Share Exchange”), based on which Global BioMedical Pte Ltd., agreed to sell all of the issued and outstanding shares of the Company to DSS BioHealth in exchange for the combination of common and preferred shares of DSS. Under the terms of the Share Exchange, DSS issued 483,334 shares of the DSS Common Stock nominally valued at $6.48 per share, and 46,868 newly issued shares of the DSS Series A Convertible Preferred Stock (“Series A Preferred Stock”), with a stated value of $46,868,000, or $1,000 per share, for a total consideration valued at $50 million. Due to several factors, including a discount for illiquidity, the value of the Series A Preferred Stock was discounted from $46,868,000 to $35,187,000, thus reducing the final consideration given to approximately $38,319,000. The Company’s Chairman, Heng Fai Ambrose Chan, a related party, who is also the largest shareholder of Alset, at the time of the signing of the Share Exchange Agreement was the beneficial owner of approximately 18.3% of the outstanding shares of DSS and is the Chairman of the Board of Directors of DSS. On August 21, 2020, the transaction was concluded, and the Company became a direct wholly owned subsidiary of DSS BioHealth. In connection with the acquisition, and the related accounting determination, DSS BioHealth has elected to apply push-down accounting and reflect in its financial statements of Impact BioMedical, the fair value of its assets and liabilities. Utilizing an income approach, the Company has completed its valuations of certain developed technology and pending patents assets acquired in the transaction as well the fair value of the non-controlling interests. More specifically, a Multi-Period Excess Earnings Method (“MPEEM”) estimates the value of an intangible asset by quantifying the amount of residual (or excess) estimated cash flows generated by the asset and discounting those cash flows to the present. These have been valued at approximately $22,260,000 and $3,910,000, respectively, and are included on the Consolidated Balance Sheet on December 31, 2020. Estimated useful life of these assets is twenty years, based on the remaining terms of the related patents, with annual amortization approximating $1,113,000. The Company has also completed its valuation of goodwill and deferred tax liabilities of Impact BioMedical, and has recorded goodwill of approximately $25,093,000, driven by other intangible assets that do not qualify for separate recognition, and a deferred tax liability of approximately $5,234,000. During the Company’s annual review of goodwill, it was deemed necessary to impair it in full during the year ended Decem…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Stock based compensation includes expense charges for all stock-based awards to employees, directors, and consultants. Such awards can include option grants, warrant grants, and restricted and unrestricted stock awards. These types of awards were not used prior to the Company’s IPO in September 2024.

Current wording

Stock based compensation includes expense charges for all stock-based awards to employees, directors, and consultants. Such awards can include option grants, warrant grants, and restricted and unrestricted stock awards.

Previous wording

Sales and marketing costs, which includes internet and trade publication advertising, travel and entertainment costs, sales-broker commissions, and trade show participation expenses, increase 874% during 2024 as compared to 2023, primarily due to increased associated with cost to attend trade shows and marketing efforts pre and post IPO

Current wording

Sales and marketing costs, which includes internet and trade publication advertising, press releases, travel and entertainment costs. These decreased 96% for the year ended December 31, 2025 as compared to the year ended December 31, 2024 due to Company efforts to reduce travel, marketing and entertainment costs.

Previous wording

Professional fees decreased 38% for the year ended December 31, 2024, as compared to year ended December 31, 2023. These costs consist primarily of consulting and legal services associated with developing and implementing Impact BioMedical’s business plan, These costs decreased in 2024 in anticipation of the Company’s IPO.

Current wording

Professional fees increased 125% for the year ended December 31, 2025, as compared to year ended December 31, 2024. These costs consist primarily of consulting and legal services associated with developing and implementing Impact BioMedical’s business plan, these costs increased in 2025 as the Company began to enact its business plan post IPO as well as due diligence in connection with potential mergers and/or acquisitions.

Previous wording

Research and development costs represent costs consisting primarily of independent, third-party testing of the various properties of each technology the Company owns possesses as well as research on new technologies. Research and development decreased 84% for the year ended December 31, 2024, as compared to year ended December 31, 2023 due to several cost-cutting activities inclusive of the cessation of the Company’s research and development contract with GRDG at the end of 2023.

Current wording

Research and development costs represent costs consisting primarily of independent, third-party testing of the various properties of each technology the Company owns possesses as well as research on new technologies. Research and development increased 22% for the year ended December 31, 2025, as compared to year ended December 31, 2024 due to costs incurred on existing and developing patents.

Previous wording

Depreciation and amortization expense remained flat for year ended December 31, 2024 compared to year ended December 31, 2023 and represents the amortization of the associated with the developed technology and patents acquired as part of the acquisition of Impact BioMedical by DSS. Amortization of these assets began on January 1, 2021, and will have a 20-year term.

Current wording

Depreciation and amortization expense increased 2% for year ended December 31, 2025 compared to year ended December 31, 2024 and represents the amortization of the associated with the developed technology and patents as well as the amortization of the Celios patents acquired during the first quarter of 2025.

Previous wording

Rent and utilities represents cost associated with office space located at 1400 Broadfield Blvd, Suite 100 Houston TX which the Company began subletting from DSS during the first quarter of 2024.

Current wording

Rent and utilities represents cost associated with office space located at 1400 Broadfield Blvd, Suite 100 Houston TX which the Company began subletting from DSS during the first quarter of 2024. During the forth quarter of 2024, the Company increased the amount of space sublet from DSS, driving the increase year over year.

Previous wording

Impairment of goodwill during the 4th quarter of 2024, the Company performed qualitative and quantitative assessments of the goodwill value associated with the Company determined that as of December 31, impairment was required (see Note 7).

Current wording

Impairment of goodwill during the 4th quarter of 2024, the Company performed qualitative and quantitative assessments of the goodwill value associated with the Company determined that as of December 31, impairment was required.

Previous wording

Impairment of fixed asset is the impairment of marketing assets in development that the Company decided to forego completion.

Current wording

Impairment of fixed asset is the impairment of marketing assets in development that in 2024 the Company decided to forego completion.

Previous wording

Other operating expenses consist primarily of office supplies, IT support, sales and marketing costs, travel and insurance costs. These costs increased 44% for year ended December 31, 2024, as compared to year ended December 31, 2023, primarily due to increased IT support and travel costs.

Current wording

Other operating expenses consist primarily of office supplies, IT support, sales and marketing costs, travel and insurance costs. These costs increased 144% for year ended December 31, 2025, as compared to year ended December 31, 2024, due primarily to increases in directors and officers insurance obtained post IPO as well as incurring third party warehousing cost associated with storage of the Company’s Celios technology acquired during Q1 of 2025.

Previous wording

Change in fair value of note payable, related party is related to the promissory note with DSS (“DSS Note”). During the fiscal year ended 2024, the Company amended the terms of its outstanding principal balance of the DSS Note. Previously, the Note required repayment solely in cash; however, pursuant to the second amendment executed which went into effect on September 16, 2024, the Company now has the option to settle the Note in either cash or shares of the Company’s common stock, subject to certain conditions. In accordance with ASC 480, Distinguishing Liabilities and Equity, and ASC 825, Financial Instruments, the Company remeasured the fair value of the DSS Note as of the modification date and again as of December 31, 2024. As a result, the Company recognized a fair value adjustment of $5,068,000 for the year ended December 31, 2024 (see Note 9).

Current wording

Change in fair value of note payable, related party is related to the promissory note with DSS (“DSS Note”). During the fiscal year ended 2024, the Company amended the terms of its outstanding principal balance of the DSS Note. Previously, the Note required repayment solely in cash; however, pursuant to the second amendment executed which went into effect on September 16, 2024, the Company now has the option to settle the Note in either cash or shares of the Company’s common stock, subject to certain conditions. In accordance with ASC 480, Distinguishing Liabilities and Equity, and ASC 825, Financial Instruments, the Company remeasured the fair value of the DSS Note as of the modification date and again as of December 31, 2025. As a result, the Company recognized a fair value adjustment (loss) of $9,388,000 for the year ended December 31, 2025 as compared to a gain of $5,068,000 for the year ended December 31, 2024 (see Note 9).

Previous wording

Interest expense is recognized on the Company’s debt to DSS increased year over year due to the increase in debt balance year over year.

Current wording

Interest expense is recognized on the Company’s debt to DSS decreased year over year due to debt being converted to equity in October of 2025.

Previous wording

For the year ended December 31, 2024, the Company recorded net loss of $24,770,000, as compared to a net loss of $4,407,000 for the year ended December 31, 2023. The increase in net loss over year is attributable to the Company’s impairment of goodwill as of December 31, 2024 offset by cost cutting measures in taken with both its professional and research and development costs as the Company shifts efforts to taking to market its existing technologies as well as the change in fair value of with the amended Note payable, related party.

Current wording

For the year ended December 31, 2025, the Company recorded net loss of $11,870,000, as compared to a net loss of $24,770,000 for the year ended December 31, 2024. Net loss for the year ended December 31, 2025 loss is attributable to the Company’s cost associated with additional head count, the incurring 12 months of directors’ and officers’ insurance post IPO, the increase in professional fees associated with the execution of the Company’s business plan, As well as the fair value adjustment (loss) on the Note payable, related party. The decrease in net loss over year is attributable to the Company’s impairment of goodwill as of December 31, 2024 offset the change in fair value (gain) of the amended Note payable, related party. Further, The company recorded a tax benefit of $2,580,000 for the tax year ending December 31, 2025. (See Note 11)

Previous wording

The Company has historically met its liquidity and capital requirements primarily through debt financing. On September 16, 2024, the Company completed an initial public offering raising $3,726,000 net of issuance costs and is currently listed on the NYSE American under the ticker symbol IBO. The Company’s management intends to take additional actions necessary to continue as a going concern. Management’s plans concerning these matters include, among other things, monetization of its intellectual properties, and tightly controlling operating costs.

Current wording

The Company has historically met its liquidity and capital requirements primarily through debt financing. The Company’s management intends to take additional actions necessary to continue as a going concern. Management’s plans concerning these matters include, among other things, monetization of its intellectual properties, and tightly controlling operating costs.

Previous wording

Net cash used by continuing operating activities was $3,919,000 for the year ended December 31, 2024 as compared to cash used for operating activities of $2,851,000 for the year ended December 31, 2023. This increase is driven by the increase in Operating loss adjusted for reconciling items from operations of approximately $300,000 year over year as well as the decrease in accounts payable and the increase of prepaid expenses and other current assets.

Current wording

Net cash used by operating activities was $1,890,000 for the year ended December 31, 2025 as compared to cash used by operating activities of $2,854,000 for the year ended December 31, 2024. This decrease driven by a reduction in prepaid and other current assets of approximately $391,000, as well as a reduction in cash outlay for accounts payable of approximately $906,000.

Previous wording

Net cash provided by financing activities for the year ended December 31, 2024 was $5,915,000 and represents $2,189,000 in borrowings from DSS and $3,726,000 in proceeds from the Company’s IPO, net of issuances costs. Net cash provided by financing activities for the year ended December 31, 2023 was $2,865,000 and represents borrowings from DSS.

Current wording

Net cash used by financing activities for the year ended December 31, 2025 was $109,000 and represents borrowings from DSS of $184,000, offset by payments of $293,000. Financing activities for the year ended December 31, 2024 represents $1,124,000 in borrowings from DSS and $3,726,000 in proceeds from the Company’s IPO, net of issuances costs.

Previous wording

To continue as a going concern, the Company completed an initial public offering on September 16, 2024 raising $3,726,000 net of issuance costs and is currently listed on the NYSE American under the ticker symbol IBO. The Company’s management intends to take additional actions necessary to continue as a going concern. Management’s plans concerning these matters include, among other things, monetization of its intellectual properties, and tightly controlling operating costs.

Current wording

To continue as a going concern, the Company is exploring several options to raise capital including but not limited to, capital raises via its listing on the NYSE American under the ticker symbol IBO as well as debt financing. The Company’s management intends to take additional actions necessary to continue as a going concern. Management’s plans concerning these matters include, among other things, monetization of its intellectual properties, and tightly controlling operating costs.

Previous wording

Goodwill is the excess of cost of an acquired entity over the fair value of amounts assigned to assets acquired and liabilities assumed in a business combination. Goodwill is subject to impairment testing at least annually and will be tested for impairment between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired. FASB ASC Topic 350 provides an entity with the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Some of the qualitative factors considered in applying this test include consideration of macroeconomic conditions, industry and market conditions, cost factors affecting the business, and overall financial performance of the business. If, after completing the assessment, it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value, the Company will proceed to a quantitative test. If qualitative factors are not deemed sufficient to conclude that the fair value of the reporting unit more likely than not exceeds its carrying value, then a one-step approach is applied in making an evaluation. The evaluation utilizes multiple valuation methodologies, including a market approach (market price multiples of comparable companies) and an income approach (discounted cash flow analysis). The computations require management to make significant estimates and assumptions, including, among other things, selection of comparable publicly traded companies, the discount rate applied to future earnings reflecting a weighted average cost of capital, and earnings growth assumptions. The Company believes the estimates and assumptions used in our impairment assessments are reasonable and based on available market information, but variations in any of the assumptions could result in materially different calculations of fair value and determinations of whether or not an impairment is indicated. A discounted cash flow analysis requires management to make various assumptions about future sales, operating margins, capital expenditures, working capital, and growth rates. Cash flow projections are derived from one-year budgeted amounts plus an estimate of later period cash flows, all of which are determined by management. Subsequent period cash flows are developed for each reporting unit using growth rates that management believes are reasonably likely to occur. Impairment of goodwill is measured as the excess of the carrying amount of goodwill over the fair values of recognized and unrecognized assets and liabilities of the reporting unit. Impairment testing was performed as of December 31, 2024 and the Company deemed it appropriate to fully impair goodwill as of December 31, 2024.

Current wording

Goodwill is the excess of cost of an acquired entity over the fair value of amounts assigned to assets acquired and liabilities assumed in a business combination. FASB ASC Topic 350 provides an entity with the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Some of the qualitative factors considered in applying this test include consideration of macroeconomic conditions, industry and market conditions, cost factors affecting the business, and overall financial performance of the business. If, after completing the assessment, it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value, the Company will proceed to a quantitative test. If qualitative factors are not deemed sufficient to conclude that the fair value of the reporting unit more likely than not exceeds its carrying value, then a one-step approach is applied in making an evaluation. The evaluation utilizes an income approach (discounted cash flow analysis). The computations require management to make significant estimates and assumptions, including, among other things, selection of comparable publicly traded companies, the discount rate applied to future earnings reflecting a weighted average cost of capital, and earnings growth assumptions. The Company believes the estimates and assumptions used in our impairment assessments are reasonable and based on available market information, but variations in any of the assumptions could result in materially different calculations of fair value and determinations of whether or not an impairment is indicated. A discounted cash flow analysis requires management to make various assumptions about future sales, operating margins, capital expenditures, working capital, and growth rates. Cash flow projections are derived from one-year budgeted amounts plus an estimate of later period cash flows, all of which are determined by management. Subsequent period cash flows are developed for each reporting unit using growth rates that management believes are reasonably likely to occur. Impairment of goodwill is measured as the excess of the carrying amount of goodwill over the fair values of recognized and unrecognized assets and liabilities of the reporting unit. Projected cash flows, evaluated using a 26.3% discount rate and 3.0% terminal growth, indicated equity fair value far below the carrying amount, driven by limited historical revenues and sustained operating losses. Additional working-capital and related-party debt balance considerations further reduced equity value in the analysis. Taken together, these factors constituted triggering events and supported recording a goodwill impairment in the amount of $25,093,000 as of December 31, 2024 representing the full goodwill balance. Goodwill is $0 as of December …

Excerpt shortened here; the source contains the full paragraph.

Previous wording

To continue as a going concern, the Company completed an initial public offering on September 16, 2024 raising $3,726,000 net of issuance costs and is currently listed on the NYSE American under the ticker symbol IBO. The Company’s management intends to take additional actions necessary to continue as a going concern. Management’s plans concerning these matters include, among other things, monetization of its intellectual properties, and tightly controlling operating costs.

Current wording

To continue as a going concern, the Company is exploring several options to raise capital including but not limited to, capital raises via its listing on the NYSE American under the ticker symbol IBO as well as debt financing. The Company’s management intends to take additional actions necessary to continue as a going concern. Management’s plans concerning these matters include, among other things, monetization of its intellectual properties, and tightly controlling operating costs.

Previous wording

The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration to which it is entitled in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when or as the performance obligation is satisfied.

Current wording

The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration to which it is entitled in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when or as the performance obligation is satisfied at a specific point in time.