VIVOS INC

VIVOS INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2024 AND 2023

NOTE 1: BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Business Overview

Vivos Inc. (the “Company,” “we,” “us,” “our”) is a radiation oncology medical device company engaged in the development of its yttrium-90 (“Y-90”) based precision radionuclide therapy device, RadioGel™, for the treatment of non-resectable tumors, now trademarked as Precision Radionuclide Therapy TM. A prominent team of radiochemists, scientists, and engineers, collaborating with strategic partners, including national laboratories, universities, and private corporations, lead the Company’s development efforts. The Company’s overall vision is to globally empower physicians, medical researchers, and patients by providing them with new isotope technologies that offer safe and effective treatments for cancer.

In 2013, the United States Food and Drug Administration (“FDA”) issued the determination that RadioGel™ is a device for human therapy for non-resectable cancers in humans. This should result in a faster path than a drug for final approval.

In January 2018, the Center for Veterinary Medicine Product Classification Group ruled that RadioGel TMshould be classified as a device for animal therapy of feline sarcomas and canine soft tissue sarcomas. Additionally, after a legal review, the Company believes that the device classification obtained from the FDA Center for Veterinary Medicine is not limited to canine and feline sarcomas, but rather may be extended to a much broader population of veterinary cancers, including all or most solid tumors in animals. We expect the result of such classification and label review will be that no additional regulatory approvals are necessary for the use of IsoPet®for the treatment of solid tumors in animals. The FDA does not have premarket authority over devices with a veterinary classification, and the manufacturers are responsible for assuring that the product is safe, effective, properly labeled, and otherwise in compliance with all applicable laws and regulations.

Based on the FDA’s recommendation, RadioGel TM is being marketed as “IsoPet®” for use by veterinarians to avoid any confusion between animal and human therapy. The Company already has trademark protection for the “IsoPet®” name. IsoPet®and RadioGel TM are used synonymously throughout this document. The only distinction between IsoPet®and RadioGel TM is the FDA’s recommendation that we use “IsoPet®” for veterinarian usage, and reserve “RadioGel TM”for human therapy. Historically, the Company’s primary focus was on the development and marketing of Isopet® for animal therapy, through the Company’s IsoPet® Solutions division. Over the last four years much effort has been directed to completing the testing require to obtain FDA approval for an Investigational Device Exemption and to obtain approval for clinical trials in India.

The Company’s IsoPet Solutions division was established in May 2016 to focus on the veterinary oncology market, namely engagement of university veterinarian hospital to develop the detailed therapy procedures to treat animal tumors and ultimately use of the technology in private clinics. In January 2025 the Company restructured and aligned its internal resources and focused effort to align with animal therapy, human therapy, and recently other applications of its patented technologies.

The Company has worked with five different national laboratories or university veterinarian hospitals on IsoPet®/RadioGel TMtesting and therapy. Washington State University treated five cats for feline sarcoma and served to develop the procedures which are incorporated in our label. They concluded that the product was safe and effective in killing cancer cells. Colorado State University demonstrated the CT and PET-CT imaging of IsoPet®. The University of Missouri conducted an animal study to treat canine sarcoma. Johns Hopkins University completed a study on VX2 Tumors in Rabbits. Every study confirmed that the Y-90 stayed at the injection site with insignificant distribution outside that boundary.

Commencing in July 2019, the Company recognized its first commercial sale of IsoPet®. A veterinarian from Alaska brought his cat with a re-occurrent spindle cell sarcoma tumor on his face. The cat had previously received external beam therapy, but now the tumor was growing rapidly. He was given a high dose of 400Gy with heavy therapy at the margins.

The Company anticipates that any near-term profits, if any, will be derived from direct sales of RadioGel™ (under the name IsoPet®) and related services, and from certifying veterinary clinics to administer IsoPet Therapy. Until recently the Company certified clinics at its own expense, but the demand has increased to the point that starting in 2025 the Company billed its first clinic for the certification process.

The plan is to incorporate the data assembled from our work with Isopet® in animal therapy to support the Company’s efforts in the development of our RadioGel™ device candidate, including obtaining approval from the FDA to market and sell RadioGel™ as a Class II medical device. RadioGel™ is an injectable particle-gel for Precision Radionuclide Therapy radiation treatment of cancerous tumors in people and animals. RadioGel™ is comprised of a hydrogel, or a substance that is liquid at room temperature and then gels when reaching body temperature after injection into a tumor. In the gel are small, less than two microns, Y-90 phosphate particles. Once injected, these inert particles are locked in place inside the tumor by the gel, delivering a very high local radiation dose. The radiation is beta, consisting of high-speed electrons. These electrons only travel a short distance so the device can deliver high radiation to the tumor with minimal dose to the surrounding tissue. Optimally, patients can go home immediately following treatment without the risk of radiation exposure to family members. Since Y-90 has a half-life of 2.7 days, the radioactivity drops to 5% of its original value after ten days.

In 2021 the Company modified its Indication for Use from skin cancer to cancerous tissue or solid tumors pathologically associated with locoregional papillary thyroid carcinoma and recurrent papillary thyroid carcinoma having discernable tumors associated with metastatic lymph nodes or extranodal disease in patients who are not surgical candidates or who have declined surgery, or patients who require post-surgical remnant ablation (for example, after prior incomplete radioiodine therapy). Papillary thyroid carcinoma belongs to the general class of head and neck tumors for which tumors are accessible by intraoperative direct needle injection. The Company’s Medical Advisory Board felt that demonstrating efficacy in clinical trials with this new indication provided a more efficient pathway to regulatory clearance.

In December 2023, the Food and Drug Administration granted RadioGel Precision Radionuclide Therapy the designation as a Breakthrough Device pursuant to the FDA’s Breakthrough Devices Program. This gave the company access to the “sprint” rapid review process for IDE comments. For the last several months the company has been taking advantage of that program to resoled detailed FDA questions on a variety of topics.

In early 2025 the Company began actively pursuing human clinical trials in India. This involved successful step-by-step implementation of several requirements, including location of a respected lead investigator at a respected hospital; regulatory approvals (securing clearances from the Scientific Committee, Ethics Committee, and the Central Drugs Standard Control Organisation (CDSCO) under the Ministry of Health & Family Welfare, and the Company was issued the Clinical Trial Registry-India (CTRI) number required for publishing results); logistical coordination (acquired liability insurance, expanded the treatment institution’s radioactive material license to include RadioGel®, and established robust international shipping protocols and an alternate contingency shipping path for the Yttrium-90 (Y-90)-based product); protocol development (finalized the Clinical Trial Protocol, incorporating Mayo Clinic study designs and feedback from FDA pre-submission discussions); operational readiness (re-validated RadioGel® manufacturing at IsoTherapeutics to ensure compliance with Quality Management System standards and FDA sterility and validation recommendations); administrative preparations (signed agreements with the Ethics Committee and treatment institution while confirming trademark and patent protections in the region); and training and certification (conducted comprehensive certification training for the treatment team). Failure on any step would have terminated the effort.

In December 2024 the Company conducted an important offset strategic meeting to ensure that its entire key internal and external team was alighted to its strategic plans. Attendees included all our current internal team members, our senior health physics volunteer, the members of the Medical Advisory Board and the Veterinary Medicine Advisory Board, lead Investigator for the proposed Mayo Clinic clinical trial, lead investigator for the clinical trial in India, and our patent attorney. The primary objective was to re-assess our business direction, to select the next target series of indications for Use, to ensure that we have developed the optimum precision Radionuclide Therapy TMapproach for each cancer type, including the isotope, the delivery technique, and the dose, and to ensure that our current and future patents protect these directions. It also discussed the domestic and internation plans.

The Company decided to explore the viability of harvesting its technology for other business opportunities as a separate “division.” The Company is working with Akina, on these initiatives. The current efforts are on the Peltier Chiller technology and the hydrogel. To prevent the Company from being distracted from its primary focus of treating cancer, if viable, Akina would probably also be the principal distributor. Alternatively, each business sector can be spun off as separate business activities to an interested party.

Controlled Laboratory Chilling - As Akina explained, it is easy to purchase many laboratory devices to control heating, but there are limited or no options for controlled cooling, which is a common laboratory requirement usually involving ice baths. The Company is now testing a prototype universal laboratory cooling device.

Hydrogel – the Company spent years on refining the development of its hydrogel, in which gelation initiates just above room temperature and is completed as it warms to body temperature. It is currently investing in quantifying and controlling the hydrogel resorption characteristics. There has been sufficient spontaneous interest in this component to warrant a serious business case assessment. The Company just trademarked the name Precision Gel TM and, in addition to its current hydrogel patent, has filed a new provisional patent in January 2025 to cover retention, transport, and release of a broad range of agents. These agents include radioactive and non-radioactive materials, solid particles, including nano-particles, large molecules, small molecules, including liquids, cells, and viruses. A MOU has been drafted to interface with potential clients including licensing and exclusive material contracting. Initial meetings are scheduled in the first quarter of 2025 with potential clients to assess the business viability.

Intellectual Property

Our original license agreement with Battelle National Laboratory (the “Battelle License”) reached its end of life in 2022. We have expanded our proprietary knowledge, as well as our trademark and patent protection, in anticipation of the Battelle License reaching the end of its term during the past several years.

Our trademark protection, which usually is extended to 17 countries, has been expanding continuously as summarized below:

We own applications/registrations for the following and should mark as noted below:

Similarly, we have systematically filed provisional and utility patents that cover our key components, hydrogel and the yttrium phosphate particles, and our injection system in the US office and more than ten others covering approximately 63 counties.

In January 2025 we filed an additional provisional patent on the control, transport, and delivery of PrecisionGel.

Going Concern

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. As shown in the accompanying financial statements, the Company has suffered recurring losses and used significant cash in support of its operating activities and the Company’s cash position is not sufficient to support the Company’s operations. Research and development of the Company’s brachytherapy product line has been funded with proceeds from the sale of equity and debt securities as well as a series of grants. The Company requires funding of approximately $2.5 million annually to maintain current operating activities.

Financing and Strategy

In November 2019, the SEC qualified the Company’s offering of its Common Stock, under Regulation A of Section 3(6) of the Securities Act of 1933, as amended (the “Securities Act”) (“Regulation A”), which offering was and amended from time to time thereafter (the “2019 Regulation A+ Offering”). In September 2021, the SEC qualified the Company’s offering of Common Stock under Regulation A, which offering was amended from time to time thereafter (together with the 2019 Regulation A+ Offering, the “Prior Regulation A+ Offerings”). During the year ended December 31, 2023, $1,179,245 was raised through the sale of 16,132,000 shares of common stock and the private placement of 18,797,000 warrants. During the year ended December 31, 2024, the Company raised $2,266,000 through the issuance of 24,950,000 shares of common stock. The Company’s Prior Regulation A Offerings undertaken pursuant to Regulation A+ have raised approximately $7,250,000 from the sale of shares of common stock.

On July 17, 2024, the SEC qualified the Company’s offering under Regulation A to offer up to $60,000,000 shares of its Common Stock (the “July 2024 Regulation A+ Offering”).

The Company is using the proceeds generated from the Prior Regulation A+ Offering and the July 2024 Regulation A+ Offering as follows:

Research and development of the Company’s brachytherapy product line has been funded with proceeds from the sale of equity and debt securities. The Company may require additional funding of approximately $5 million annually to maintain current operating activities. Over the next 12 to 48 months, the Company believes it will cost approximately $9 million to: (1) fund the FDA approval process to conduct human clinical trials; (2) conduct Phase I, pilot, and clinical trials; (3) activate several regional clinics to administer IsoPet®across the county; (4) create an independent production center within the current production site to create a template for future international manufacturing; and (5) initiate regulatory approval processes outside of the United States. The proceeds to be raised from the Regulation A+ Offerings will be used to continue to fund this development.

The continued deployment of the brachytherapy products and a worldwide regulatory approval effort will require additional resources and personnel. The principal variables in the timing and amount of spending for the brachytherapy products in the next 12 to 24 months will be the FDA’s classification of the Company’s brachytherapy products as Class II or Class III devices (or otherwise), and any requirements for additional studies (which may possibly include clinical studies). Thereafter, the principal variables in the amount of the Company’s spending and its financing requirements would be: (1) the timing of any approvals; (2) the nature of the Company’s arrangements with third parties for manufacturing, sales, distribution, and licensing of those products; and (3) the products’ success in the U.S. and elsewhere. The Company intends to fund its activities through strategic transactions such as licensing and partnership agreements, as well as proceeds to be raised from the Regulation A+ Offerings.

Following receipt of required regulatory approvals and necessary financing to fund our working capital requirements, the Company intends to outsource material aspects of manufacturing, distribution, sales, and marketing for operations within the U.S. Outside of the U.S., the Company intends to pursue licensing arrangements and/or partnerships to facilitate its global commercialization strategy.

Long-term, the Company intends to consider resuming research efforts with respect to other products and technologies intended to help improve the diagnosis and treatment of cancer and other illnesses. These long-term goals are subject to the Company: (1) receiving adequate funding; (2) receiving regulatory approval for RadioGel™ and other brachytherapy products; and (3) being able to successfully commercialize its brachytherapy products.

Based on the Company’s financial history since inception, the Company’s independent registered public accounting firm has expressed substantial doubt as to the Company’s ability to continue as a going concern. The Company has limited revenue, nominal cash, and has accumulated deficits since inception. If the Company cannot obtain sufficient additional capital, the Company will be required to delay the implementation of its business strategy and may not be able to continue operations.

The Company’s headquarters are in Northeast Washington, however, our focus on the animal therapy market has been the Northwestern sector of the U.S. The Company continues its marketing efforts on the animal therapy market and our attempts to increase the exposure to our product, and generate revenue accordingly.

As of December 31, 2024, the Company had $2,212,548 cash on hand. There are currently commitments to vendors for products and services purchased. To continue the development of the Company’s products, the current level of cash will not be enough to cover the fixed and variable obligations of the Company.

The Company anticipates using the proceeds from the July 2024 Regulation A+ Offering as follows:

For the animal therapy market:

For the human market:

Research and development of the Company’s precision radionuclide therapy product line has been funded with proceeds from the sale of equity and debt securities, including from the Prior Regulation A+ Offerings. The Company requires additional funding of approximately $2.5 million annually to maintain operating activities. Over the next 36 months, the Company believes it will cost approximately $8.0 to $9.0 million to: (1) fund the FDA approval process to conduct human clinical trials; (2) conduct Phase I, pilot, clinical trials; (3) activate several regional clinics to administer IsoPet®across the U.S.; (4) create an independent production center within the current production site to create a template for future international manufacturing; and (5) initiate regulatory approval processes outside of the United States. The proceeds raised from the Prior Regulation A+ Offerings were used to fund this development and proceeds from the July 2024 Regulation A+ Offering will be used to continue such development efforts.

The continued deployment of the precision radionuclide therapy products and a worldwide regulatory approval effort will require additional resources and personnel. The principal variables in the timing and amount of spending for the precision radionuclide therapy products in the next 12 to 24 months will be the FDA’s classification of the Company’s precision radionuclide therapy products as Class II or Class III devices (or otherwise) and any requirements for additional studies which may possibly include clinical studies. Thereafter, the principal variables in the amount of the Company’s spending and its financing requirements would be the timing of any approvals and the nature of the Company’s arrangements with third parties for manufacturing, sales, distribution and licensing of those products and the products’ success in the U.S. and elsewhere. The Company intends to fund its activities through strategic transactions such as licensing and partnership agreements or from proceeds raised from the Prior Regulation A+ Offering and from the July 2024 Regulation A+ Offering.

The Company intends to expand the indications for use in phases: first, for lymph nodes associated with thyroid cancer, secondly, cancerous lung nodules, and finally, all non-sectable solid tumors. It is anticipated that the medical community may begin to use RadioGel off-label, we will support but will not encourage that practice.

Following receipt of required regulatory approvals and financing, in the U.S., the Company intends to outsource material aspects of manufacturing, distribution, sales and marketing. Outside of the U.S., the Company intends to pursue licensing arrangements and/or partnerships to facilitate its global commercialization strategy.

Long-term, the Company intends to consider resuming research efforts with respect to other products and technologies, such as Gamma Gel and Alpha Gel intended to help improve the diagnosis and treatment of cancer and other illnesses. These long-term goals are subject to the Company: (1) receiving adequate funding; (2) receiving regulatory approval for RadioGel™ and other precision radionuclide therapy products; and (3) being able to successfully commercialize its precision radionuclide therapy products.

Based on the Company’s financial history since inception, the Company’s independent registered public accounting firm has expressed substantial doubt as to the Company’s ability to continue as a going concern. The Company has limited revenue, nominal cash, and has accumulated deficits since inception. If the Company cannot obtain sufficient additional capital, the Company will be required to delay the implementation of its business strategy and may not be able to continue operations.

The Company’s headquarters are in the State of Washington., The initial focus of the animal therapy market has been the Northwestern sector of the United States. The Company has initiated marketing efforts to the animal therapy market in other regions of the United States, attempting to increase the exposure to our product and increase revenue opportunities.

There are currently commitments to vendors for products and services purchased. To continue the development of the Company’s products, the current level of cash will not be enough to cover the fixed and variable obligations of the Company. The Company has focused on operating on minimum overhead, including using a virtual office for the last several years and retaining experienced industry consultants available on an as needed basis. This has helped focus the capital received from the Company’s Regulation A+ Offerings on activities that enhance our objectives.

There is no guarantee that the Company will be able to raise additional funds or to do so on terms advantageous to the Company’s stockholders.

The financial statements do not include any adjustments relating to the recoverability and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis and ultimately to attain profitability. The Company plans to seek additional funding to maintain its operations through debt and equity financing and to improve operating performance through a focus on strategic products and increased efficiencies in business processes and improvements to the cost structure. There can be no assurance that the Company will be successful in its efforts to raise additional working capital or achieve profitable operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Use of Estimates

The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of financial statements and the reported amount of revenue and expense during the reporting period. Estimates the Company considers include criteria for stock-based compensation expense, and valuation allowances on deferred tax assets. Actual results could differ from those estimates.

Cash Equivalents

For the purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents.

The Company occasionally maintains cash balances in excess of the FDIC insured limit. The Company does not consider this risk to be material.

Fair Value of Financial Instruments

Fair value of financial instruments requires disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of December 31, 2024 and 2023, the balances reported for cash, prepaid expense, accounts receivable, accounts payable, and accrued expense, approximate the fair value because of their short maturities.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Accounting Standards Codification (“ASC”) Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:

Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;

Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

The Company measures certain financial instruments including options and warrants issued during the period at fair value on a recurring basis.

Patents and Intellectual Property

While patents are being developed or pending, they are not being amortized. Management has determined that the economic life of the patents to be ten years and amortization, over such 10-year period and on a straight-line basis will begin once the patents have been issued and the Company begins utilization of the patents through production and sales, resulting in revenues.

The Company evaluates the recoverability of intangible assets, including patents and intellectual property on a continual basis. Several factors are used to evaluate intangibles, including, but not limited to, management’s plans for future operations, recent operating results and projected and expected undiscounted future cash flows.

There have been no such capitalized costs in the years ended December 31, 2024 and 2023, respectively. However, a patent was filed on July 1, 2019 (No. 1811.191) filed by Michael Korenko and David Swanberg and assigned to the Company based on the Company’s proprietary particle manufacturing process. The timing of this filing was important given the Company’s plans to make IsoPet®commercially available, which it did on or about July 9, 2019. This additional patent protection will strengthen the Company’s competitive position. It is the Company’s intention to further extend this patent protection to several key countries within one year, as permitted under international patent laws and treaties.

Revenue Recognition

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). This standard provides a single set of guidelines for revenue recognition to be used across all industries and requires additional disclosures. The guidance introduces a five-step model to achieve its core principal of the entity recognizing revenue to depict the transfer of goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company adopted the updated guidance effective January 1, 2018 using the full retrospective method.

Under ASC 606, in order to recognize revenue, the Company is required to identify an approved contract with commitments to perform respective obligations, identify rights of each party in the transaction regarding goods to be transferred, identify the payment terms for the goods transferred, verify that the contract has commercial substance and verify that collection of substantially all consideration is probable. The adoption of ASC 606 did not have an impact on the Company’s operations or cash flows.

The Company recognized revenue as they (i) identified the contracts with each customer; (ii) identified the performance obligation in each contract; (iii) determined the transaction price in each contract; (iv) were able to allocate the transaction price to the performance obligations in the contract; and (v) recognized revenue upon the satisfaction of the performance obligation. Upon the sales of the product to complete the procedures on the animals, the Company recognized revenue as that was considered the performance obligation.

The Company in 2024 also implemented a license program for clinics that pay for certification to perform these therapies. These revenues are recognized upon the certification being completed. During 2024, $4,995 of the revenue relates to this certification.

Loss Per Share

The Company accounts for its loss per common share by replacing primary and fully diluted earnings per share with basic and diluted earnings per share. Basic loss per share is computed by dividing loss available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) for the period, and does not include the impact of any potentially dilutive Common Stock equivalents since the impact would be anti-dilutive. The computation of diluted earnings per share is similar to basic earnings per share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if potentially dilutive common shares had been issued. For the given periods of loss, of the periods ended in the years ended December 31, 2024 and 2023, the basic earnings per share equals the diluted earnings per share.

The following represent Common Stock equivalents that could be dilutive in the future as December 31, 2024 and 2023, which include the following:

Research and Development Costs

Research and developments costs, including salaries, research materials, administrative expense and contractor fees, are charged to operations as incurred. The cost of equipment used in research and development activities which has alternative uses is capitalized as part of fixed assets and not treated as an expense in the period acquired. Depreciation of capitalized equipment used to perform research and development is classified as research and development expense in the year computed.

The Company incurred $324,629 and $732,698 in research and development costs for the years ended December 31, 2024 and 2023, respectively, all of which were recorded in the Company’s operating expense noted on the statements of operations for the periods then ended.

Advertising and Marketing Costs

Advertising and marketing costs are expensed as incurred except for the cost of tradeshows which are deferred until the tradeshow occurs. During the years ended December 31, 2024 and 2023, the Company incurred nominal advertising and marketing costs.

Contingencies

In the ordinary course of business, the Company is involved in legal proceedings involving contractual and employment relationships, product liability claims, patent rights, and a variety of other matters. The Company records contingent liabilities resulting from asserted and unasserted claims against it, when it is probable that a liability has been incurred and the amount of the loss is reasonably estimable. The Company discloses contingent liabilities when there is a reasonable possibility that the ultimate loss will exceed the recorded liability. Estimated probable losses require analysis of multiple factors, in some cases including judgments about the potential actions of third-party claimants and courts. Therefore, actual losses in any future period are inherently uncertain. The Company has entered into various agreements that require them to pay certain fees to consultants and/or employees that have been fully accrued for as of December 31, 2024 and 2023.

Income Taxes

To address accounting for uncertainty in tax positions, the Company clarifies the accounting for income taxes by prescribing a minimum recognition threshold that a tax position is required to meet before being recognized in the financial statements. The Company also provides guidance on de-recognition, measurement, classification, interest, and penalties, accounting in interim periods, disclosure and transition.

The Company files income tax returns in the U.S. federal jurisdiction. The Company did not have any tax expense for the years ended December 31, 2024 and 2023. The Company did not have any deferred tax liability or asset on its balance sheets as of December 31, 2024 and 2023.

Interest costs and penalties related to income taxes, if any, will be classified as interest expense and general and administrative costs, respectively, in the Company’s financial statements. For the years ended December 31, 2024 and 2023, the Company did not recognize any interest or penalty expense related to income taxes. The Company believes that it is not reasonably possible for the amounts of unrecognized tax benefits to significantly increase or decrease within the next twelve months.

Stock-Based Compensation

The Company recognizes compensation costs under FASB ASC Topic 718, Compensation – Stock Compensation and ASU 2018-07. Companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share based compensation arrangements include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. As such, compensation cost is measured on the date of grant at their fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant.

Recent Accounting Pronouncements

The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures.

In November 2023, the Financial Accounting Standards Board issued Accounting Standards Update 2023-07 (“ASU 2023-07”). ASU 2023-07 improves segment reporting disclosures for public companies. ASU 2023-07 requires more detailed information about reportable segments and expenses including the requirement to disclose qualitative information about factors used to identify reportable segments and quantitative information about profit and loss measures and significant expense categories. ASU 2023-07 was effective for public companies in fiscal years beginning after December 15, 2023. The Company has not yet begun generating significant revenue from its planned principal operations and operates as a single reportable segment. The chief operating decision maker is the Company’s chief executive officer who assesses performance based on total expenses, cash flows, and progress made in the Company’s ongoing development efforts. All of the Company’s long-lived assets are located in the United States. The Company analyzed ASU 2023-07 and determined that the required information is presented within the consolidated financial statements and footnote disclosures herein. The Company does not believe that ASU 2023-07 will have a material impact on the consolidated financial statements.

NOTE 2: RELATED PARTY TRANSACTIONS

In September 2023, our Chief Executive Officer advanced $10,000 to the Company, which amount was repaid October 4, 2023. In December 2024, our Chief Executive Officer advanced $40,949 to the Company, which amount was repaid within ten days.

NOTE 3: STOCKHOLDERS’ EQUITY

Common Stock

The Company has authorized 950,000,000 shares of Common Stock. As of December 31, 2024 and 2023, there are 440,873,806 and 387,894,033 shares of Common Stock issued and outstanding, respectively.

Preferred Stock

The Company has authorized 20,000,000 shares of Preferred Stock. There are currently three series of Preferred Stock outstanding; Series A Convertible Preferred Stock, Series B Convertible Preferred Stock and Series C Convertible Preferred Stock. The Company’s Board of Directors is authorized to provide for the issuance of shares of Preferred Stock in one or more series, fix or alter the designations, preferences, rights, qualifications, limitations or restrictions of the shares of each series, including the dividend rights, dividend rates, conversion rights, voting rights, term of redemption including sinking fund provisions, redemption price or prices, liquidation preferences and the number of shares constituting any series or designations of such series without further vote or action by the shareholders. The issuance of Preferred Stock may have the effect of delaying, deferring, or preventing a change in control of management without further action by the shareholders and may adversely affect the voting and other rights of the holders of Common Stock. The issuance of Preferred Stock with voting and conversion rights may adversely affect the voting power of the holders of Common Stock, including the loss of voting control to others.

Series A Convertible Preferred Stock

On June 30, 2015, a certificate of designations was filed with the Delaware Secretary of State to designate 2,500,000 shares of the Company’s Preferred Stock as Series A Convertible Preferred Stock, par value $0.001 per share (“Series A Preferred”) (the “Series A COD”). Effective March 31, 2016, the Company amended the Series A COD, increasing the maximum number of shares of Series A Preferred from 2,500,000 shares to 5,000,000 shares. As of December 31, 2024 and 2023, there are 2,071,007 shares of Series A Preferred issued and outstanding, respectively.

The following summarizes the current rights and preferences of the Series A Preferred:

Liquidation Preference. The Series A Preferred has a liquidation preference of $5.00 per share.

Dividends. Shares of Series A Preferred do not have any separate dividend rights.

Conversion. Subject to certain limitations set forth in the Series A COD, each share of Series A Preferred is convertible, at the option of the holder, into that number of shares of Common Stock (the “Series A Conversion Shares”) equal to the liquidation preference thereof, divided by Conversion Price (as such term is defined in the Series A COD), currently $4.00.

In the event the Company completes an equity or equity-based public offering, registered with the SEC, resulting in gross proceeds to the Company totaling at least $5.0 million, all issued and outstanding shares of Series A Preferred at that time will automatically convert into Series A Conversion Shares.

Redemption. Subject to certain conditions set forth in the Series A COD, in the event of a Change of Control (defined in the Series A COD), or at such time as a third party not affiliated with the Company or any holders of the Series A Preferred shall have acquired, in one or a series of related transactions, equity securities of the Company representing more than fifty percent (50%) of the outstanding voting securities of the Company), the Company, at its option, will have the right to redeem all or a portion of the outstanding Series A Preferred in cash at a price per share of Series A Preferred equal to 100% of the Liquidation Preference.

Voting Rights. Holders of Series A Preferred are entitled to vote on all matters, together with the holders of Common Stock, and have the equivalent of five votes for every Series A Conversion Share issuable upon conversion of such holder’s outstanding shares of Series A Preferred. However, the Series A Conversion Shares, when issued, will have all the same voting rights as other issued and outstanding Common Stock of the Company, and none of the rights of the Series A Preferred.

Liquidation. Upon any liquidation, dissolution, or winding-up of the Company, whether voluntary or involuntary (a “Liquidation”), the holders of Series A Preferred shall be entitled to receive out of the assets, whether capital or surplus, of the Company an amount equal to the liquidation preference of the Series A Preferred before any distribution or payment shall be made to the holders of any junior securities, and if the assets of the Company are insufficient to pay in full such amounts, then the entire assets to be distributed to the holders of the Series A Preferred shall be ratably distributed among the holders in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full.

a) Stock Dividends and Stock Splits. If the Company (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any other Common Stock equivalents; (ii) subdivides outstanding shares of Common Stock into a larger number of shares; (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares; or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the Company, then the conversion price shall be adjusted accordingly.

b) Merger or Reorganization. If the Company is involved in any reorganization, recapitalization, reclassification, consolidation or merger in which the Common Stock is converted into or exchanged for securities, cash or other property than each share of Series A Preferred shall be convertible into the kind and amount of securities, cash or other property that a holder of the number of shares of Common Stock issuable upon conversion of one share of Series A Preferred prior to any such merger or reorganization would have been entitled to receive pursuant to such transaction.

Series B Convertible Preferred Stock

On October 10, 2018, a certificate of designation was filed with the Delaware Secretary of State to designate 5,000,000 shares of our Preferred Stock as Series B Convertible Preferred Stock, par value $0.001 per share (“Series B Preferred”) (the “Series B COD”). As of December 31, 2024 and 2023, there are 363 and 200,363 shares of Series B Preferred issued and outstanding, respectively.

The following summarizes the current rights and preferences of the Series B Preferred:

Liquidation Preference. The Series B Preferred has a liquidation preference of $1.00 per share.

Dividends. Shares of Series B Preferred do not have any separate dividend rights.

Conversion. Subject to certain limitations set forth in the Series B COD, each share of Series B Convertible is convertible, at the option of the holder, into that number of shares of Common Stock (the “Series B Conversion Shares”) equal to the liquidation preference thereof, divided by the Conversion Price (as such term is defined in the Series B COD), currently $0.08.

Redemption. Subject to certain conditions set forth in the Series B COD, in the event of a Change of Control (defined in the Series B COD), or at such as a third party not affiliated with the Company or any holders of the Series B Convertible shall have acquired, in one or a series of related transactions, equity securities of the Company representing more than fifty percent (50%) of the outstanding voting securities of the Company), the Company, at its option, will have the right to redeem all or a portion of the outstanding Series B Preferred in cash at a price per share of Series B Preferred equal to 100% of the Liquidation Preference.

Voting Rights. Holders of Series B Preferred are entitled to vote on all matters, together with the holders of Common Stock, and have the equivalent of two votes for every Series B Conversion Share issuable upon conversion of such holder’s outstanding shares of Series B Preferred. However, the Series B Conversion Shares, when issued, will have the same voting rights as other issued and outstanding shares of Common Stock of the Company, and none of the rights of the Series A Preferred.

Liquidation. Upon any liquidation, dissolution, or winding-up of the Company, whether voluntary or involuntary (a “Liquidation”), the holders of Series B Preferred shall be entitled to receive out of the assets, whether capital or surplus, of the Company an amount equal to the liquidation preference of the Series B Preferred before any distribution or payment shall be made to the holders of any junior securities, and if the assets of the Company are insufficient to pay in full such amounts, then the entire assets to be distributed to the holders of the Series B Preferred shall be ratably distributed among the holders in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full.

a) Stock Dividends and Stock Splits. If the Company (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any other Common Stock equivalents; (ii) subdivides outstanding shares of Common Stock into a larger number of shares; (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares; or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the Company, then the conversion price shall be adjusted accordingly.

b) Merger or Reorganization. If the Company is involved in any reorganization, recapitalization, reclassification, consolidation or merger in which the Common Stock is converted into or exchanged for securities, cash or other property than each share of Series B Preferred shall be convertible into the kind and amount of securities, cash or other property that a holder of the number of shares of Common Stock issuable upon conversion of one share of Series B Preferred prior to any such merger or reorganization would have been entitled to receive pursuant to such transaction.

On December 16, 2024, there was 200,000 Series B Preferred shares converted into 2,500,000 common shares.

Series C Convertible Preferred Stock

On March 27, 2019, a certificate of designation was filed with the Delaware Secretary of State to designate 5,000,000 shares of our Preferred Stock as Series C Convertible Preferred Stock, par value $0.001 per share (“Series C Preferred”) (the “Series C COD”). As of December 31, 2024 and 2023, there were 385,302 shares of Series C Preferred issued and outstanding, respectively.

The following summarizes the current rights and preferences of the Series C Preferred:

Liquidation Preference. The Series C Preferred has a liquidation preference of $1.00 per share.

Dividends. Shares of Series C Preferred do not have any separate dividend rights.

Conversion. Subject to certain limitations set forth in the Series C COD, each share of Series C Preferred is convertible, at the option of the holder, into that number of shares of Common Stock (the “Series C Conversion Shares”) equal to the liquidation preference thereof, divided by Conversion Price (as such term is defined in the Series C COD), currently $0.08.

The Series C Preferred will only be convertible at any time after the date that the Company shall have amended its Certificate of Incorporation to increase the number of shares of Common Stock authorized for issuance thereunder or effect a reverse stock split of the outstanding shares of Common Stock by a sufficient amount to permit the conversion of all Series C Preferred into shares of Common Stock (“Authorized Share Approval”) (such date, the “Initial Convertibility Date”), each share of Series C Preferred shall be convertible into validly issued, fully paid and non-assessable shares of Common Stock on the terms and conditions set forth in the Series C COD under the definition “Conversion Rights”.

Redemption. Subject to certain conditions set forth in the Series C COD, in the event of a Change of Control (defined in the Series C COD), or at such time as a third party not affiliated with the Company or any holders of the Series C Preferred shall have acquired, in one or a series of related transactions, equity securities of the Company representing more than fifty percent (50%) of the outstanding voting securities of the Company), the Company, at its option, will have the right to redeem all or a portion of the outstanding Series C Preferred in cash at a price per share of Series C Preferred equal to 100% of the Liquidation Preference.

Voting Rights. Holders of Series C Preferred are entitled to vote on all matters, together with the holders of Common Stock, and have the equivalent of thirty-two votes for every Series C Conversion Share issuable upon conversion of such holder’s outstanding shares of Series C Preferred. However, the Series C Conversion Shares, when issued, will have the same voting rights as other issued and outstanding shares of Common Stock of the Company, and none of the rights of the Series C Preferred.

Liquidation. Upon any liquidation, dissolution, or winding-up of the Company, whether voluntary or involuntary (a “Liquidation”), the holders of Series C Preferred shall be entitled to receive out of the assets, whether capital or surplus, of the Company an amount equal to the liquidation preference of the Series C Preferred before any distribution or payment shall be made to the holders of any junior securities, and if the assets of the Company are insufficient to pay in full such amounts, then the entire assets to be distributed to the holders of the Series C Preferred shall be ratably distributed among the holders in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full.

a) Stock Dividends and Stock Splits. If the Company (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any other Common Stock equivalents; (ii) subdivides outstanding shares of Common Stock into a larger number of shares; (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares; or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the Company, then the conversion price shall be adjusted accordingly.

b) Merger or Reorganization. If the Company is involved in any reorganization, recapitalization, reclassification, consolidation or merger in which the Common Stock is converted into or exchanged for securities, cash or other property than each share of Series C Preferred shall be convertible into the kind and amount of securities, cash or other property that a holder of the number of shares of Common Stock issuable upon conversion of one share of Series C Preferred prior to any such merger or reorganization would have been entitled to receive pursuant to such transaction.

Common and Preferred Stock Issuances

Common and Preferred Stock Issuances - 2024

The Company issued 24,950,000 shares of Common Stock pursuant to the Regulation A+ Offerings for cash proceeds of $2,266,000.

The Company issued 605,801 shares of Common Stock for services rendered valued at $88,925.

The Company issued 20,336,472 shares of Common Stock in the cashless exercise of 28,619,000 warrants.

The Company issued 5,000,000 shares of Common Stock in the exchange of 5,000,000 warrants and recognized a loss on the exchange of $381,000 which is included in the exercise of warrants in the consolidated statement of changes in stockholders’s equity.

There were 200,000 Series B Preferred shares converted into 2,500,000 common shares.

The Company settled 750,000 RSUs for Common Stock.

The Company adjusted their common shares for vested RSUs in prior periods that were cancelled.

Common and Preferred Stock Issuances – 2023

In April 2023, the Company issued 8,000,000 shares of Common Stock,2,665,000 Series A warrants and 8,000,000 Series B warrants in their Regulation A+ Offerings for $640,000. The Company sold the warrants for $10,665.

In October 2023, the Company issued 2,221,505 shares of common stock in a cashless exercise of warrants to purchase 2,132,000 shares of common stock.

In December 2023, the Company issued: (1)500,000 shares of common stock in settlement of accounts payable of $28,450; (2)8,132,000 shares of common stock and 8,132,000 warrants pursuant to the Offering Statement for the Regulation A+ Offering for an aggregate total of $528,580; (3)2,499,000 shares of common stock in a cashless exercise of warrants to purchase 4,998,000 shares of common stock and issued new warrants to purchase 10,002,000 shares of common stock; and (4) issued 4,000,000 shares of common stock for 4,00,000 vested restricted stock units, for which the Company recognized a loss of $151,184 on this exchange of vested restricted stock units for shares of common stock.

NOTE 4: COMMON STOCK OPTIONS, WARRANTS AND RESTRICTED STOCK UNITS

Common Stock Options

The Company recognizes in the financial statements compensation related to all stock-based awards, including stock options and warrants, based on their estimated grant-date fair value. The Company has estimated expected forfeitures and is recognizing compensation expense only for those awards expected to vest. All compensation is recognized by the time the award vests.

The following schedule summarizes the changes in the Company’s stock options:

During the years ended December 31, 2024 and 2023, the Company recognized $0 of stock-based compensation expense related to the vesting of stock options.

Common Stock Warrants

The following schedule summarizes the changes in the Company’s stock warrants:

Changes to these inputs could produce a significantly higher or lower fair value measurement. The fair value of each option/warrant is estimated using the Black-Scholes valuation model. The following assumptions were used for the periods as follows:

The Company granted 10,665,000 warrants in their Reg A+ funding in April 2023, with an exercise price of $0.0775 and athree-year term.

The Company granted 2,000,000 warrants in their Regulation A+ Offering in January 2024, with an exercise price of $0.075 and athree-year term and 5,000,000 warrants with the same terms on April 1, 2024.

In November 2024, the Company sold 11,950,000 warrants,30% of which expire December 31, 2024 at an exercise price of $0.01 and 70% of which expire December 31, 2027 at an exercise price of $0.15 for $11,950 under Regulation D.

In 2024, the Company issued 25,336,468 shares of Common Stock in the exercise of 33,619,000 warrants and received $19,350.

Restricted Stock Units

The following schedule summarizes the changes in the Company’s restricted stock units:

During the years ended December 31, 2024 and 2023, the Company recognized $918,350 and $1,239,950 in expense related to the vesting of its restricted stock units. As of December 31, 2024, the Company had $923,855 worth of expense yet to be recognized for restricted stock units not yet vested.

On January 1, 2024, the Company granted 20,000,000 restricted stock units to its Chief Executive Officer as part of his new employment agreement that vest in four equal installments over atwo-year period beginning February 1, 2024. In May 2024, the Company granted 1,050,000 restricted stock units to consultants that vest through December 31, 2025. In November 2024, the Company granted 800,000 restricted stock units that vest in May 2025. During the year ended December 31, 2024,11,475,000 of these restricted stock units vested.

On May 1, 2023, the Company granted 2,900,000 RSUs to consultants, with 25% of such RSUs vesting immediately,25% vest on December 31, 2023,25% vest on December 31, 2024 and the remaining 25% vest on December 31, 2025. These RSUs are valued at $263,900.

On August 4, 2023, the Chief Executive Officer rescinded 1,012,500 of which 750,000 had vested in prior years, of his fully vested RSUs.

In December 2023, the Company granted 4,000,000 immediately vested RSUs to a consultant, for which the RSUs are valued at $208,000.

NOTE 5: COMMITMENT

On June 4, 2019, the Company entered into an Executive Employment Agreement (“Employment Agreement”) with Dr. Michael K. Korenko, the Company’s Chief Executive Officer. The employment term under the Employment Agreement commenced with an effective date of June 11, 2019 and expires on December 31, 2020, and December 31 of each successive year if the Employment Agreement is extended, unless terminated earlier as set forth in the Employment Agreement. On December 31, 2020, the Company extended the Employment Agreement through December 31, 2021 while renegotiating terms of a new Employment Agreement. On May 3, 2021, the Company and the Chief Executive Officer agreed the terms of a new Employment Agreement with an effective date of January 1, 2021 that has a term of three years and expired December 31, 2023. The Company renewed the Employment Agreement for a term of two years expiring December 31, 2025.

Under the terms of the Employment Agreement effective January 1, 2024, the Company shall pay to Dr. Korenko a base compensation of $295,500. In addition, there is a discretionary bonus to be earned in the amount of $10,000 per quarter upon the satisfaction of conditions to be determined by the Board of Directors of the Company. In addition, the Company granted Dr. Korenko 20,000,000 restricted stock units on January 1, 2024 that vest over thetwo year period.

NOTE 6: INCOME TAXES

Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry-forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Net deferred tax assets consist of the following components as of December 31, 2024 and 2023:

The income tax provision differs from the amount of income tax determined by applying the U.S. Federal income tax rate to pretax income from continuing operations for the years ended December 31, 2024 and 2023 due to the following:

At December 31, 2024, the Company had net operating loss carryforwards of approximately $34,581,700.

ASC Topic 740 – Income Taxes (“ASC 740”) provides guidance on the accounting for uncertainty in income taxes recognized in a company’s financial statements. ASC 740 requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more-likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements. At the adoption date of January 1, 2007, the Company had no unrecognized tax benefit, which would affect the effective tax rate if recognized.

The Company includes interest and penalties arising from the underpayment of income taxes in the statements of operations in the provision for income taxes. As of December 31, 2024, the Company hadno accrued interest or penalties related to uncertain tax positions.

The Company files income tax returns in the U.S. federal jurisdiction. The Company is located in the state of Washington and Washington state does not require the filing of income taxes. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2017.

NOTE 7: SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the date of this report and noted the following:

On February 6, 2025, there has been 12,500,000 shares of common stock issued under the Regulation A+.