Zeo ScientifiX, Inc.

Previous wording

We are a clinical-stage biopharmaceutical company principally focusing on the development of innovative biological therapeutics for the treatment of degenerative diseases and regenerative medicine. The Company’s proprietary products, including Zofin™, are derived from perinatal sources and manufactured to retain the naturally occurring extracellular vesicles, proteins and cell secreted nanoparticles and Patient Pure X™ (“PPX™”), an autologous non-manipulated biologic containing a nanoparticle fraction that is precipitated from a patient’s own peripheral blood (“RAAM Products”). Our RAAM Products and related services are principally used in the health care industry administered through doctors and clinics (“Providers”).

Current wording

We are a clinical-stage biopharmaceutical company principally focusing on the development of innovative biological therapeutics for the treatment of degenerative diseases and regenerative medicine. The Company’s proprietary products, including Zofin™, are derived from perinatal sources and manufactured to retain the naturally occurring extracellular vesicles, proteins and cell secreted nanoparticles and Patient Pure X™ (“PPX™”), an autologous biologic containing a nanoparticle fraction that is precipitated from a patient’s own peripheral blood (“RAAM Products”). Our RAAM Products and related services are principally used in the health care industry administered through doctors and clinics (“Providers”).

Previous wording

To date, the Company has obtained certain Investigational New Drug (“IND”), and 18 emergency IND (“eIND”) approvals from the FDA, including applicable Institutional Review Board (“IRB”) approvals which authorized the Company to commence clinical trials or treatments in connection with the use of Zofin™ and related treatment protocols. The Company is pursuing efforts to complete its already approved clinical studies as well as obtaining approval to commence additional studies for other specific indications it has identified that the use of its products will provide more favorable and desired health related benefits for patients seeking alternative treatment options than are currently available. The ability of the Company to succeed in these efforts is subject to among other things, the Company having sufficient available working capital to fund the substantial costs of completing clinical trials, which the Company currently does not have, and ultimately, obtaining approval from the FDA.

Current wording

To date, the Company has obtained certain Investigational New Drug (“IND”), emergency IND (“eIND”) approvals from the FDA, including applicable Institutional Review Board (“IRB”) approvals which authorized the Company to commence clinical trials or treatments in connection with the use of Zofin™ and related treatment protocols. The Company is pursuing efforts to complete its already approved clinical studies as well as obtaining approval to commence additional studies for other specific indications it has identified that the use of its products will provide more favorable and desired health related benefits for patients seeking alternative treatment options than are currently available. The ability of the Company to succeed in these efforts is subject to among other things, the Company having sufficient available working capital to fund the substantial costs of completing clinical trials, which the Company currently does not have, and ultimately, obtaining approval from the FDA.

Previous wording

Revenues. Our revenues for the three months ended July 31, 2024 were $1,091,000, compared to revenues of $1,221,000 for the three months ended July 31, 2023. The decrease in revenues during the three months ended July 31, 2024 of $130,000 or 10.6% from the three months ended July 31, 2023, was primarily the result of a decrease of approximately 18.3% (approximately $212,000) in the average sales prices for the high concentration biologic products sold during the three months ended July 31, 2024, compared with the three months ended July 31, 2023, partially offset by an increase of approximately 142.8% (approximately $92,000) of revenues associated with its recently launched PPX™ service platform during the three months ended July 31, 2024, compared with the three months ended July 31, 2023.

Current wording

Revenues. Our revenues for the three months ended January 31, 2025 were $1,090,000, compared to revenues of $1,154,000 for the three months ended January 31, 2024. The decrease in revenues during the three months ended January 31, 2025 of $64,000 or 5.5% from the three months ended January 31, 2024, was primarily the result of a decrease of approximately 22.2% (approximately $245,000) in the units sold of the Company’s biologic products sold during the three months ended January 31, 2025, compared with the three months ended January 31, 2024, partially offset by an increase of approximately 1.0% (approximately $8,000) in the average sales prices for the high concentration biologic products sold during the three months ended January 31, 2025, compared with the three months ended January 31, 2024 and an increase of approximately 285.8% (approximately $173,000) of revenues associated with its PPX™ service platform during the three months ended January 31, 2025, compared with the three months ended January 31, 2024.

Previous wording

The increase in the overall unit sales associated with its recently launched PPX™ service platform was primarily due the Company’s expanded sales and marketing efforts which included engaging additional sales representatives, participation in industry related conferences and sponsoring of educational webinars.

Current wording

The increase in the overall unit sales associated with its PPX™ service platform was primarily due the Company’s continued sales and marketing efforts which included engaging additional sales representatives, participation in industry related conferences, sponsoring of educational webinars and from sales of PPX™ to the Company’s existing customers.

Previous wording

The decrease in the average sales prices for the high concentration biologic products sold during the three months ended July 31, 2024, compared to the three months ended July 31, 2023 was due to a reduction in sales of the Company’s higher priced medical grade biologic product offerings as compared to the Company’s lower priced aesthetic biologics product offerings. Although the total number of unit sales of its high concentration biologic products did not change significantly during the three months ended July 31, 2024, compared to the three months ended July 31, 2023 (a difference of 1.0%), the percentage of overall unit sales of the Company’s high concentration medical grade biologic product offerings decreased to 42.1% from 57.1% and increased to 57.9% from 42.8% for the Company’s high concentration aesthetic biologics product offerings, respectively, for the three months ended July 31, 2024, as compared to the three months ended July 31, 2023.

Current wording

The percentage of overall unit sales of the Company’s higher concentration biologic product offerings decreased to 35.2% from 62.4% and increased to 64.8% from 37.6% for the Company’s lower concentration aesthetic biologic product offerings, respectively, for the three months ended January 31, 2025, as compared to the three months ended January 31, 2024.

Previous wording

Cost of Revenues. Our cost of revenues for the nine months ended July 31, 2024 were $619,000, as compared to cost of revenues of $375,000 for the nine months ended July 31, 2023. The increase in the cost of revenues for the nine months ended July 31, 2024 of $244,000 or 65.1%, from the nine months ended July 31, 2023, was due an increase of approximately $142,000 of cost of revenues associated with its recently launched PPX™ service platform during the nine months ended July 31, 2024, as compared to the nine months ended July 31, 2023, the increase of approximately 20.2% (approximately $67,000) in the average cost of revenues for the high concentration biologic products during the nine months ended July 31, 2024, as compared to the nine months ended July 31, 2023 and the increase of approximately 8.6% (approximately $35,000) in the overall unit sales of its high concentration biologic products, during the nine months ended July 31, 2024, as compared to the nine months ended July 31, 2023.

Current wording

Cost of Revenues. Our cost of revenues for the three months ended January 31, 2025 was $191,000, as compared to cost of revenues of $159,000 for the three months ended January 31, 2024. The increase in the cost of revenues for the three months ended January 31, 2025 of $32,000 or 19.9%, from the three months ended January 31, 2024, was due to the increase of approximately $46,000 of cost of revenues associated with its PPX™ service platform during the three months ended January 31, 2025, compared with the three months ended January 31, 2024 and an increase of approximately 11.6% (approximately $13,000) in the average cost of revenues for the high concentration biologic products for the three months ended January 31, 2025, as compared to the three months ended January 31, 2024, partially offset from the decrease of approximately 22.2% (approximately $28,000) in the overall unit sales of its high concentration biologic products for the three months ended January 31, 2025, as compared to the three months ended January 31, 2024.

Previous wording

Gross Profit. Our gross profit for the three months ended July 31, 2024 was $915,000 (83.9% of revenues), as compared to gross profit of $1,059,000 (86.7% of revenues) for the three months ended July 31, 2023. The decrease in gross profit during the three months ended July 31, 2024 of $144,000 was the result of decreases in the average sales prices from its high concentration biologic products sold, partially offset from the increases in the sales of its recently launched PPX™ service platform and the increase in costs of revenues associated with those product sales during the three months ended July 31, 2024, compared to the three months ended July 31, 2023.

Current wording

Gross Profit. Our gross profit for the three months ended January 31, 2025 was $899,000 (82.5% of revenues), as compared to gross profit of $995,000 (86.2% of revenues) for the three months ended January 31, 2024. The decrease in gross profit during the three months ended January 31, 2025 of $96,000 (9.6%) was the result of decreases in the sales of high concentration biologic products sold, partially offset from the increases in the sales of its PPX™ service platform during the three months ended January 31, 2025, compared to the three months ended January 31, 2024. In addition, the percentage of the Company’s revenues associated with its PPX™ service platform, which has a lower gross margin percentage as compared to the Company’s high concentration biologic product offerings, increased to 21.4% of revenues for the three months ended January 31, 2025, as compared with 5.2% of revenues for the three months ended January 31, 2024.

Previous wording

General and Administrative Expenses. General and administrative expenses for the three months ended July 31, 2024 were $2,083,000, as compared with $2,505,000 for the three months ended July 31, 2023, a decrease of $422,000 or 16.8%. The decrease in the general and administrative expenses for the three months ended July 31, 2024, from the three months ended July 31, 2023, was primarily the result of decreased research and development costs of approximately $233,000, decreased laboratory related costs of approximately $80,000, decreased commissions and travel costs of approximately $187,000 and decreased professional fees of approximately $102,000, which were partially offset by increased in stock-based compensation costs to advisors, consultants and administrative staff totaling approximately $55,000 and increased payroll and consulting fees of approximately $209,000 during the three months ended July 31, 2024, as compared to the three months ended July 31, 2023.

Current wording

General and Administrative Expenses. General and administrative expenses for the three months ended January 31, 2025 were $2,152,000, as compared with $2,157,000 for the three months ended January 31, 2024, a decrease of $5,000 or 0.2%. The decrease in the general and administrative expenses for the three months ended January 31, 2025, from the three months ended January 31, 2024, was primarily the result of decreased payroll and consulting fees of approximately $114,000, decreased commissions and travel costs of approximately $150,000, decreased marketing related expenses of $16,000, decreased research and development costs of approximately $9,000 and decreased office and insurance related expenses of approximately $45,000 during the three months ended January 31, 2025, as compared to the three months ended January 31, 2024, which were partially offset by increased stock-based compensation costs to advisors, consultants and administrative staff totaling approximately $318,000 and increased laboratory related costs of approximately $11,000 during the three months ended January 31, 2025, as compared to the three months ended January 31, 2024.

Previous wording

The decrease in research and development costs during the three months ended July 31, 2024, from the three months ended July 31, 2023 was principally the result of the Company’s completion of its Phase 1 trials during July 2023, and there being no other significant clinical trial costs incurred since that time. The decrease in laboratory related costs was principally the result of the Company’s sale of the Basalt laboratory facility in August 2023 and as a result, there were no associated costs associated with operating that facility during the three months ended July 31, 2024, as compared with the three months ended July 31, 2023. The decrease in professional fees was principally the result of reduced audit fees, tax preparation fees and legal fees during the three months ended July 31, 2024, as compared to the three months ended July 31, 2023. The decrease in commissions and travel costs during the three months ended July 31, 2024, as compared to the three months ended July 31, 2023 was principally the result of reduced sales and a larger percentage of sales that were generated from house accounts with much lower commission costs than paid to distributors and/or independent sales representatives.

Current wording

The decrease in commissions and travel costs during the three months ended January 31, 2025, as compared to the three months ended January 31, 2024 was principally the result of reduced sales and a larger percentage of sales that were generated from house accounts with much lower commission costs than paid to distributors and/or independent sales representatives. The decrease in payroll related expenses during the three months ended January 31, 2025, from the three months ended January 31, 2024 was principally the result of the non-renewal of certain executive employment contracts in May 2024

Previous wording

Other expense for the three months ended July 31, 2024 was $68,000, as compared to other expense of $172,000 for the three months ended July 31, 2023. The decrease in other expense of $104,000 during the three months ended July 31, 2024, as compared to the three months ended July 31, 2023, was principally the result of reduced amortization of loan discounts of approximately $149,000, partially offset from increases in the reserve against the carrying value of the Company’s investments in equity securities of $45,000 during the three months ended July 31, 2024, as compared to the three months ended July 31, 2023.

Current wording

Other expense for the three months ended January 31, 2025 was $22,000, as compared to other expense of $27,000 for the three months ended January 31, 2024. The decrease in other expense of $5,000 during the three months ended January 31, 2025, as compared to the three months ended January 31, 2024, was principally the result of reduced IRS interest and penalties.

Previous wording

During the nine months ended July 31, 2024, the Company used cash in operating activities of $1,084,000, as compared to $2,418,000 for the nine months ended July 31, 2023, a decrease in cash used of $1,334,000. The decrease in cash used was primarily the result of a reduction in general and administrative expenses and other income (expense) after adjusting for non-cash related activities of $1,713,000 and increases in gross profit of $85,000 for the nine months ended July 31, 2024, as compared to the nine months ended July 31, 2023, partially offset by reductions in cash provided from changes in operating assets and liabilities of $465,000 for the nine months ended July 31, 2024, as compared to the nine months ended July 31, 2023.

Current wording

During the three months ended January 31, 2025, the Company had cash provided by operating activities of $65,000, as compared to cash used operating activities of $575,000 for the three months ended January 31, 2024, a decrease in cash used of $640,000. The decrease in cash used was primarily the result of a reduction in general and administrative expenses and other income (expense) after adjusting for non-cash related activities of $210,000 and increases in cash provided from changes in operating assets and liabilities of $526,000 for the three months ended January 31, 2025, as compared to the three months ended January 31, 2024, partially offset by decreases in gross profit of $96,000 for the three months ended January 31, 2025, as compared to the three months ended January 31, 2024.

Previous wording

The decrease in cash provided from changes in operating assets and liabilities was due to decreases in accounts payable and accrued expenses and prepaid expenses, partially offset from increases in deferred revenues during the nine months ended July 31, 2024, as compared to the nine months ended July 31, 2023. The reduction in general and administrative expenses and other income (expense) after adjusting for non-cash related activities was the result of reduced operating expenses associated with professional fees, payroll, consulting costs, research and laboratory related expenses during the nine months ended July 31, 2024, as compared to the nine months ended July 31, 2023.

Current wording

The increase in cash provided from changes in operating assets and liabilities was due to increases in accounts payable and accrued expenses and decreases in accounts receivable and prepaid expenses, partially offset from decreases in deferred revenues during the three months ended January 31, 2025, as compared to the three months ended January 31, 2024. The reduction in general and administrative expenses and other income (expense) after adjusting for non-cash related activities was the result of reduced operating expenses associated with payroll, consulting costs and commission expenses during the three months ended January 31, 2025, as compared to the three months ended January 31, 2024.

Previous wording

During the nine months ended July 31, 2024, the Company had cash provided by financing activities of $500,000, as compared to cash provided by financing activities of $604,000 for the nine months ended July 31, 2023. During the nine months ended July 31, 2024, the Company had cash used in financing activities of $22,000, as compared to cash used in financing activities of $1,186,000 for the nine months ended July 31, 2023.

Current wording

During the nine months ended January 31, 2025, the Company had cash used in financing activities of $2,000, as compared to cash used in financing activities of $9,000 for the three months ended January 31, 2024. The decrease in cash used in financing activities of $7,000 was due to the decreases in payments on finance leases.

Previous wording

The unaudited accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. The Company has had limited revenues since its inception. The Company incurred net losses of $3,451,000 for the nine months ended July 31, 2024 and used $1,084,000 of cash from operating activities during that period. In addition, the Company had a stockholders’ deficit of $1,422,000 at July 31, 2024. The Company had a working capital deficit of $1,909,000 at July 31, 2024.

Current wording

The unaudited accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. The Company has had limited revenues since its inception. The Company incurred net losses of $1,243,000 for the three months ended January 31, 2025 and had cash of $65,000 provided from operating activities during that period. In addition, the Company had a stockholders’ deficit of $1,805,000 at January 31, 2025. The Company had a working capital deficit of $2,259,000 at January 31, 2025.