IBO 10-K

Impact Biomedical Inc. (IBO)

10-K 2024-02-20 For: 2023-12-31

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Added on April 12, 2026

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Title of each class		Trading Symbol		Name of each exchange on which registered
Common Stock, par value $0.001 per share		N/A		N/A

Large Accelerated Filer ☐	Accelerated Filer ☐
Non-Accelerated Filer ☒	Smaller Reporting Company ☒
	Emerging growth company ☒

PART I

ITEM 1	BUSINESS	3
ITEM 1A	RISK FACTORS	9
ITEM 1B	UNRESOLVED STAFF COMMENTS	18
ITEM 2	PROPERTIES	18
ITEM 3	LEGAL PROCEEDINGS	18
ITEM 4	MINE SAFETY DISCLOSURES	18

PART II

ITEM 5	MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	19
ITEM 6	SELECTED FINANCIAL DATA	20
ITEM 7	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	20
ITEM 7A	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	26
ITEM 8	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	27
ITEM 9	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	43
ITEM 9A	CONTROLS AND PROCEDURES	44
ITEM 9B	OTHER INFORMATION

PART III

ITEM 10	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	45
ITEM 11	EXECUTIVE COMPENSATION	49
ITEM 12	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	50
ITEM 13	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	51
ITEM 14	PRINCIPAL ACCOUNTANT FEES AND SERVICES	53

PART IV

ITEM 15	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	55
ITEM 16	FORM 10-K SUMMARY	56
	SIGNATURES	57

	●	Impact BioLife Science, Inc.;
	●	Global Biomedical, Inc.;
	●	Global BioLife, Inc.; and
	●	Sweet Sense, Inc.

	●	LineBacker: Multi-faceted therapeutic platform for metabolic, neurologic, cancer, and infectious diseases.

	●	Equivir: A polyphenol compound that is believed to be successful in antiviral infection treatments. Equivir/Nemovir technology is a novel blend of FDA Generally Recognized as Safe (“GRAS”) eligible polyphenols (e.g., Myricetin, Hesperetin, Piperine) which have demonstrated antiviral effects with additional potential application as health supplements or medication. Polyphenols are sourced from fruits, vegetables, and other natural substances. Myricetin is a member of the flavonoid class of polyphenolic compounds with antioxidant properties. Hesperitin is a flavanone and Piperine is an alkaloid, commonly found in black pepper.

	●	Procombin: Applications as food additive, and natural preservative for beauty and person care products as well as natural food preservative.

	●	VanXin: Food preservative booster made up of polyphenols that extend the shelf life.

	●	Bioplastics: Advanced bio-compatible plastics that mitigate accumulation of plastics in oceans and landfills and provide UVA and UVB protection for many types of material for including containers, hard surfaces, and fibers for clothing. The technology is presently in development and testing antimicrobial plastics for consumer products that control the spread of active pathogens such as SARS-CoV-2, Influenza, E. coli, Staph, and Rhinovirus, by exploiting key strategies found in the biological realm. These new plastics are specifically focused on solutions for common products such as cups, plates, utensils, plastic bags, and countertops. The first prototypes are currently undergoing antimicrobial resistance testing.

	●	Laetose: Laetose technology is derived from a unique combination of sugar and inositol, which demonstrates the ability to inhibit the inflammatory and metabolic response of sugar alone. A sugar alternative which is believed to lower human glycemic indexes and is believed to be a breakthrough alternative sugar aimed to combat diabetes. The use of Laetose in a daily diet, compared to sugar, could result in 30% lower sugar consumption and lower glycemic index/load.

	●	3F: A botanical compound believed to serve as an insect repellent and anti-microbial agent. 3F is a unique formulation of specialized ingredients (e.g. terpenes) from botanical sources with demonstrated effect as an insect repellent and an antimicrobial.

	●	3F Mosquito Repellent: 3F repellent contains botanical ingredients that mosquitos avoid. These ingredients are scientifically proven1 to affect the mosquito’s receptors, essentially making the insect blind to a human’s presence. This can be utilized as a stand-alone repellent or as an additive in detergents, lotions, shampoo, and other substances to provide mosquito protection.

	●	3F Antimicrobial: 3F antimicrobial contains botanical ingredients known to kill viruses. These ingredients are scientifically proven to inhibit viral replication. This can be utilized as a stand-alone antimicrobial or as an additive in detergents, lotions, shampoo, fabrics, and other substances.

	●	Quantum: The solution to the Patent Cliff accomplished by creating a new class of medicinal chemistry that uses advanced methods to increase effectiveness and persistence of natural compounds and existing drugs. The safety attributes of the original molecules are maintained. Typically, drug discovery processes modify functional groups. Quantum’s new techniques alter behavior of molecules at the sub-molecular level. It is estimated that 65% of the World Health Organization Essential Medicines List can be improved and re-patented using Quantum and these methods can be used to enhance and patent natural compounds including many substances used in traditional medicines around the world.

	●	Bio Med (license): A probiotic gut health product that helps to regulate many physiological functions, ranging from energy regulation and cognitive processes to toxin neutralization and immunity against pathogens.

	●	attract qualified scientific, product development and commercial personnel;
	●	obtain patent or other proprietary protection for our drugs and technologies;
	●	obtain required regulatory approvals; successfully collaborate with pharmaceutical companies in the discovery, development and commercialization of new drugs; and
	●	negotiate competitive pricing and reimbursement with third party payors

	●	the drug candidate may not prove to be efficacious;
	●	the drug candidate may not prove to be safe;
	●	the drug candidate may not be readily co-administered or combined with other drugs or drug candidates;
	●	the results may not confirm the positive results from earlier preclinical studies or clinical trials;
	●	the results may not meet the level of statistical significance required by the FDA or other
	●	regulatory agencies; and
	●	the FDA or other regulatory agencies may require us to carry out additional studies.

	●	reliance on third-party manufactures for regulatory compliance and quality assurance;
	●	the possibility of breach of the manufacturing agreement by the third-party manufacturer because of factors beyond our control;
	●	the possibility of termination or nonrenewal of our manufacturing agreement by the third-party manufacturer at a time that is costly or inconvenient for us;
	●	the potential that third-party manufacturers will develop know-how owned by such third-party
	●	manufacturer in connection with the production of our drug candidates that is necessary for the manufacture of our drug candidates; and
	●	reliance on third-party manufacturers to assist us in preventing inadvertent disclosure or theft of our proprietary knowledge.

	●	whether we achieve our anticipated corporate objectives;

	●	changes in financial or operational estimates or projections;

	●	termination of the lock-up agreement or other restrictions on the ability of our stockholders and other security holders to sell shares after this offering; and

	●	general economic or political conditions in the United States or elsewhere.

	●	Software Security Management: Ensuring that applications such as Office 365 and Azure are configured, maintained and following best security practices.
	●	Security Monitoring and Consultation Services: Continuous monitoring of our systems for suspicious activities and providing expert consultation to address and mitigate potential threats.
	●	Data Storage and Backup of Source Systems: Implementing robust data storage solutions and backup protocols to ensure data integrity and availability.
	●	Security Policy Management: Developing and enforcing comprehensive security policies that govern all aspects of our cybersecurity efforts.
	●	Threat Response Management: Rapid identification and response to security incidents to minimize impact.
	●	Security Software Implementation: Deployment of state-of-the-art security software solutions that complement the security features of the Microsoft cloud ecosystem.

	Restricted stock to be issued upon vesting		Number of securities to be issued upon exercise of outstanding options, warrants and rights		Weighted average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance (under equity compensation Plans (excluding securities reflected in column (a & b))

Plan Category		(a)		(b)		(c)		(d)
Equity compensation plans approved by security holders
2023 Employee, Director and Consultant Equity Incentive Plan - options		-		-	$	-		-

2023 Employee, Director and Consultant Equity Incentive Plan - warrants		-		-	$	-		-
2023 Employee, Director and Consultant Equity Incentive Plan		-		-	$	-		10,574,000

Total		-		-	$	-		10,574,000

	Year ended December 31, 2023		Year ended December 31, 2022		% Change
Revenue
License revenue	$	-	$	50,000		-100	%

Total Revenue	$	-	$	50,000		-100	%

	December 31, 2023		December 31, 2022		% Change

Sales, general and administrative compensation		315,000		325,000		-3	%
Depreciation and amortization		1,120,000		1,113,000		1	%
Professional services		1,262,000		722,000		75	%
Research and development		1,147,000		1,226,000		-6	%
Other operating expenses		184,000		68,000		171	%

Total costs and expenses	$	4,028,000	$	3,454,000		17	%

	Year Ended December 31, 2023			Year ended December 31, 2022			% Change

Interest Income	$	13,000		$	24,000			-46	%
Interest Expense		(444,000	)		(462,000	)		-4	%
Impairment of investment		-			(4,100,000	)		-100	%
Other expense		52,000			66,000			-21	%

Total other income (expense)	$	(379,000	)	$	(4,472,000	)		-92	%

	Page

Report of Independent Registered Public Accounting Firm (PCAOB ID: 606)	28

Consolidated Financial Statements:

Consolidated Balance Sheets	29

Consolidated Statements of Operations	30

Consolidated Statements of Cash Flows	31

Consolidated Statements of Changes in Stockholders’ Equity	32

Notes to the Consolidated Financial Statements	33


GRASSI & CO., CPAs, P.C.

We have served as the Company’s auditor since 2022.

	2023			2022
ASSETS
Current assets:
Cash and cash equivalents	$	1,000		$	2,000
Current portion of notes receivable		203,000			16,000
Other receivables		128,000			-
Prepaid expenses and other current assets		-			104,000
Total current assets		332,000			122,000

Property, plant and equipment, net		287,000			276,000
Other investments		-			782,000
Notes receivable		-			190,000
Goodwill		25,093,000			25,093,000
Other intangible assets, net		18,921,000			20,034,000
Total assets	$	44,633,000		$	46,497,000

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:
Accounts payable	$	832,000		$	539,000
Accrued expenses		230,000			63,000
Note payable, related party		12,074,000			9,991,000
Total current liabilities		13,136,000			10,593,000

Deferred tax liability, net		3,235,000			3,235,000

Total Liabilities		16,371,000			13,828,000

Commitments and contingencies (Note 12)		-			-

Stockholders’ equity
Preferred stock, $0.001 par value; 100,000,000 shares authorized, 60,496,041 shares issued and outstanding (0 shares issued and outstanding on December 31, 2022); Liquidation value $0.001 per share, $60,000, ($0 aggregate on December 31, 2022).		60,000			-
Common stock, $0.001 par value; 4,000,000,000 shares authorized, 10,000,000 shares issued and outstanding (70,496,041 on December 31, 2022)		10,000			70,000
Additional paid-in capital		38,113,000			38,113,000
Accumulated deficit		(12,961,000	)		(8,625,000	)
Total stockholders’ equity of the company		25,222,000			29,558,000
Non-controlling interest in subsidiary		3,040,000			3,111,000
Total stockholder’s equity		28,262,000			32,669,000

Total liabilities and stockholders’ equity	$	44,633,000		$	46,497,000

	2023			2022
Revenue:	$	-		$	50,000

Costs and expenses:
Selling, general and administrative (including stock-based compensation)		315,000			325,000
Amortization		1,120,000			1,113,000
Professional Services		1,262,000			722,000
Research & Development		1,147,000			1,226,000
Other General Expenses		184,000			68,000
Total costs and expenses		4,028,000			3,454,000
Operating loss		(4,028,000	)		(3,404,000	)

Other income (expense):
Interest income		13,000			24,000
Other income		52,000			66,000
Interest expense		(444,000	)		(462,000	)
Impairment of investment		-			(4,100,000	)
Loss from operations before income taxes		(4,407,000	)		(7,876,000	)

Income tax benefit		-			621,000
Net loss		(4,407,000	)		(7,255,000	)

Loss from operations attributed to noncontrolling interest		71,000			204,000

Net loss attributable to common stockholders		(4,336,000	)		(7,051,000	)

Loss per common share:
Basic	$	(0.07	)	$	(0.10	)
Diluted	$	(0.07	)	$	(0.10	)

Shares used in computing loss per common share:
Basic		60,248,078			70,496,041
Diluted		60,248,078			70,496,041

	2023			2022
Cash flows from operating activities:
Net loss	$	(4,407,000	)	$	(7,255,000	)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization		1,120,000			1,113,000
Deferred tax benefit		-			(621,000	)
Impairment of other investments		-			4,100,000
Decrease (increase) in assets:
Other receivables		(128,000	)		-
Prepaid expenses and other current assets		104,000			(60,000	)
Increase (decrease) in liabilities:
Accounts payable		293,000			424,000
Accrued expenses		167,000			57,000
Net cash used by operating activities		(2,851,000	)		(2,242,000	)

Cash flows from investing activities:
Purchase of property, plant and equipment		(18,000	)		(276,000	)
Purchase of investment		-			(65,000	)
Note receivable investment, net		3,000			(8,000	)
Net cash used by investing activities		(15,000	)		(349,000	)

Cash flows from financing activities:
Borrowings from note payable, related party		2,865,000			2,547,000
Net cash provided by financing activities		2,865,000			2,547,000

Net decrease in cash		(1,000	)		(44,000	)
Cash and cash equivalents at beginning of year		2,000			46,000
Cash and cash equivalents at end of year	$	1,000		$	2,000


	Common Stock						Preferred Stock				Additional Paid-in		Accumulated			Non- controlling Interest in
	Shares			Amount			Shares		Amount		Capital		Deficit			Subsidiary			Total

Balance, December 31, 2021		70,496,041		$	70,000			-	$	-	$	38,113,000	$	(1,574,000	)	$	3,315,000		$	39,924,000
Net loss		-			-			-		-		-		(7,051,000	)		(204,000	)		(7,255,000	)
Balance, December 31, 2022		70,496,041		$	70,000			-	$	-	$	38,113,000	$	(8,625,000	)	$	3,111,000		$	32,669,000
Conversion of common stock to preferred stock		(60,496,041	)		(60,000	)		60,496,041		60,000		-		-			-			-
Net loss		-			-			-		-		-		(4,336,000	)		(71,000	)		(4,407,000	)
Balance, December 31, 2023		10,000,041		$	10,000			60,496,041	$	60,000	$	38,113,000	$	(12,961,000	)	$	3,040,000		$	28,262,000

Name of consolidated subsidiary	State or other jurisdiction of incorporation or organization	Date of incorporation or formation	Attributable interest as of December 31, 2023			Attributable interest as of December 31, 2022

Global BioMedical, Inc.	Nevada	April 18, 2017		90.9	%		90.9	%
Global BioLife, Inc.	Nevada	April 14, 2017		81.8	%		81.8	%
BioLife Sugar, Inc	Nevada	April 23, 2018		90.9	%		90.9	%
Happy Sugar Inc	Nevada	August 17, 2018		81.8	%		81.8	%
Sweet Sense Inc.	Nevada	April 30, 2018		95.5	%		95.5	%
Global Sugar Solutions Inc.	Nevada	November 7, 2019		100	%		100	%

	Estimated	December 31,		December 31,
	Useful Life	2023		2022
Machinery and equipment	5-10 years	$	30,000	$	25,000
Construction in progress			263,000		251,000
Total Cost			293,000		276,000
Less accumulated depreciation			6,000		-
Property, plant and equipment, net		$	287,000	$	276,000

Balance at December 31, 2022	$	25,093,000
Goodwill adjustment		-
Balance at December 31, 2023	$	25,093,000

	12/31/2023							12/31/2022
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Definitive-lived:
Developed technology	$	22,260,000	$	(3,339,000	)	$	18,921,000	$	22,260,000	$	(2,226,000	)	$	20,034,000
Total	$	22,260,000	$	(3,339,000	)	$	18,921,000	$	22,260,000	$	(2,226,000	)	$	20,034,000


2024	$	1,113,000
2025	$	1,113,000
2026	$	1,113,000
2027	$	1,113,000
2028	$	1,113,000
Thereafter	$	13,356,000

Income Tax Expense (Benefit)	Year Ended December 31, 2023			Year Ended December 31, 2022
Current tax payable
Federal	$	-		$	-
State		-			-
Total current tax payable		-			-
Deferred tax
Federal		(920,000	)		(1,619,000	)
State		(94,000	)		(165,000	)
Total deferred tax	$	(1,014,000	)	$	(1,784,000	)
Less increase in valuation allowance		1,014,000			1,163,000
Total income tax benefit	$	-		$	(621,000	)

Deferred Tax Assets & Liabilities:
Deferred Tax assets:
Impairment of investment	$	929,000		$	929,000
Research & development cost		538,000			250,000
Net Operating loss		2,087,000			1,611,000
Gross deferred tax assets		3,554,000			2,790,000

Deferred tax liability:
Intangible assets		(4,164,000	)		(4,414,000	)
Gross deferred tax liability		(4,164,000	)		(4,414,000	)

Less valuation allowance		(2,625,000	)		(1,611,000	)
Net deferred tax liability	$	(3,235,000	)	$	(3,235,000	)

	2023			2022
Statutory United States federal rate		21.0	%		21.0	%
State income taxes net of federal benefit		1.7	%		1.7	%
Change in valuation allowance		(22.7	)%		(14.8	)%

Effective rate		0.0	%		7.9	%

	1.	The Company did not maintain a sufficient complement of qualified accounting personnel and controls associated with segregation of duties over complex transactions.

	2.	There was no systematic method of documenting that timely and complete monthly reconciliation and closing procedures take place.

●	The Company hired a Controller, Director of External Reporting, Senior Accountant and Cost Accountant in 2022. The Company has re-assigned responsibilities of other staff members to assist in the Company’s financial reporting as well as segregating duties to serve as a check and balance on employees’ integrity and to maintain the best control system possible.
●	The Company has centralized its accounting functions across all divisions. The goal of this process is to support the segregation of duties and to allow the Chief Financial Officer to focus on ensuring reporting packages, reconciliations, and other financial reports are accurate and timely reported.
●	A monthly operations and financial review is performed with key members of the management team, executive committee, and accounting team which has enhanced the timeliness, formality and rigor of our financial statement preparation, review and reporting process.
●	Routine account reconciliations for all key balance sheet accounts have been initiated. These account reconciliations are reviewed timely by an independent person.
●	Procedures have been enhanced and count sheets modified to ensure accuracy of physical inventory counts.

Name	Age	Position
Heng Fai Ambrose Chan	78	Chairman of the Board
Frank D. Heuszel	65	Chief Executive Officer and Director
Mark Suseck	62	Chief Operating Officer
Todd D. Macko	51	Chief Financial Officer
Dr. Elise Brownell	70	Director
Melissa Sims	54	Director
David Keene	66	Director
Christian Zimmerman	45	Director
Castel Hibbert	64	Director

	●	oversee management in the performance of its responsibility for the integrity of the Company’s accounting and financial reporting and its systems of internal controls,
	●	the performance and qualifications of the Company’s independent auditor, including the independent auditor’s independence,
	●	the performance of the Company’s internal audit function; and
	●	the Company’s compliance with legal and regulatory requirements.

	●	the adequacy and form of compensation of the Board;

	●	the compensation of Chief Executive Officer, including base salary, incentive bonus, stock option and other grant, award and benefits upon hiring and on an annual basis;

	●	the compensation of other senior management upon hiring and on an annual basis; and

	●	the Company’s incentive compensation and other equity-based plans and recommending changes to such plans to our Board, when necessary.

	●	developing criteria for membership on the board of directors and committees;

	●	identifying individuals qualified to become members of the board of directors;

	●	recommending persons to be nominated for election as directors and to each committee of the board of directors;

	●	annually reviewing our corporate governance guidelines; and

	●	monitoring and evaluating the performance of the board of directors and leading the board in an annual self-assessment of its practices and effectiveness.