Stemtech Corp 10-K for FY2024
Stemtech Corp (STEK)
About this 10-K
Stemtech Corp filed this 10-K on June 30, 2025, covering the fiscal year ended December 31, 2024 (FY2024).
Headline figures
Fiscal year ended December 31, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $5.05M
- up 2.7% from $4.92M a year earlier
- Net loss
- $3.77M
- compared with a net loss of $5.43M a year earlier
- Diluted EPS
- -$0.03
- compared with -$0.07 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the fiscal year ended
or
For the transition period from _______ to _______
Commission file number:
(Exact name of registrant as specified in its charter)
|
State or other jurisdiction of incorporation or organization |
(IRS. Employer Identification No.) |
www.stemtech.com
(Address of principal executive offices)
(
Registrant’s telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Name of each exchange on which registered | |
| None | N/A |
Securities registered pursuant to Section 12(g) of the Act:
(Title of Class)
Indicate by check mark whether the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
Indicate by check mark whether
the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for shorter period that the registrant as required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Indicate by check mark whether
the registrant has submitted every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes
☐
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☒
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act
If an emerging growth company, indicate
by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether
the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control
over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that
prepared or issued its audit report.
If securities are registered pursuant
to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect
the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive- based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No
The aggregate market value of the
voting and non-voting stock held by non-affiliates of the registrant as of the last business day of the registrants most recently completed
second fiscal quarter, based on the price at which the common equity was last sold on the OTC Markets on June 30, 2024 was approximately
$
As of June 30, 2025, the registrant had shares of common stock with par value $0.001 issued and outstanding.
TABLE OF CONTENTS
| i |
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements contained in this annual report may constitute “forward-looking statements” for purposes of the federal securities laws. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.
The forward-looking statements contained in this annual report are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, the following risks, uncertainties and other factors:
| · | The implementation of our strategic plans for our business; | |
| · | Our financial performance; | |
| · | Developments relating to our competitors and our industry, including the impact of government regulation; | |
| · | Estimates of our expenses, future revenues, capital requirements and our needs for additional financing; and | |
| · | Other risks and uncertainties, including those listed under the captions “Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” |
Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. All dollar amounts refer to US dollars unless otherwise indicated.
| ii |
PART I
Item 1: Description of Business
Stemtech Corporation and its Subsidiaries (collectively, the “Company”, or “Stemtech”) was incorporated in the State of Nevada, USA on September 4, 2009 under the name Globe Net Wireless Corp. with ticker symbol “GNTW”. Our corporate name was changed to Stemtech Corporation in the state of Nevada.in August 2021. We were listed on the OTCQB market under symbol “STEK” in April 2021. Stemtech is a global network marketing company that develops science-based products that it believes supports wellness by helping the body maintain healthy stem cell physiology, also known as stem cell enhancers. Known as the Stem Cell Nutrition Company®, the Company is a pioneer in stem cell science, and believes it can demonstrate that adult stem cells function as the natural renewal system of the body. The Company believes our products enhance and support the work of the body’s stem cells by releasing more stem cells, helping to circulate them in the blood and migrate them into tissues, where they can perform their daily function of renewal for optimal health. Our Mission is to enhance wellness and prosperity around the world. These products are marketed internationally by the Companies subsidiaries and through independent distributors. The Company markets its products under the following brands: RCM System, stemrelease3™, StemFlo® MigraStem® and OraStem® (Oral Health Care). Stemtech also introduced a new skincare product in December 2022: Cellect One® Rapid Renew Stem Cell Peptide Night Cream. In January 2025, The Company introduced Cellect One® Shield HOCL – (Hypochlorous Acid) skin care product.
On August 19, 2021, Stemtech Corporation (“Stemtech”), a (Delaware corporation), entered into a Merger Agreement (the “Merger Agreement”) with Globe Net Wireless Corp. (“Globe Net” or “GNTW”). The merger is accounted for as a reverse acquisition and recapitalization in accordance with the Accounting Standards Codification topic 805, Business Combinations (“ASC 805”). Management evaluated the guidance contained in ASC 805 with respect to the identification of the acquirer in the merger and concluded, based on a consideration of the pertinent facts and circumstances, that Stemtech acquired Globe Net for financial accounting purposes. On November 9, 2021, the Company changed its fiscal year end date from August to December.
Basis of Presentation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The summary of significant accounting policies presented below is designed to assist in understanding the Company’s consolidated financial statements. Such consolidated financial statements and accompanying notes are the representations of the Company’s management, who is responsible for their integrity and objectivity. All intercompany accounts and transactions have been eliminated in consolidation. The consolidated financial statements include the accounts of Stemtech Corporation (Parent) and its thirteen (13) subsidiaries:
| 1. | Stemtech HealthSciences Corp (U.S.A.) (“Stemtech HealthSciences”) |
| 2. | Stemtech IP Holdings, LLC (U.S.A.) |
| 3. | Stemtech Canada, Inc. (“Canada”) |
| 4. | Stemtech Health Sciences S. de R.L. de C.V. (“Mexico”) |
| 5. | Stemtech Services SARL de C.V. (Mexico) (“Stemtech Mexico”) |
| 6. | Tecrecel Mexico SA de CV (“TME”) |
| 7. | Stemtech Malaysia Holdings Sdn. Bhd. (“Malaysia Holdings”) |
| 8. | Stemtech Malaysia Sdn. Bhd. (“Malaysia”) |
| 9. | Stemtech Taiwan Holding, Inc. (“Taiwan”) |
| 10. | Stemtech Taiwan Branch |
| 11. | Tecrecel S.A. (“Ecuador”) |
| 12. | Food & Health Tech Foodhealth SA (“FHT Ecuador”) |
| 13. | Life Factor Research (“LFR”) |
Item 1A. Risk Factors.
We are a smaller reporting company as defined in Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
Item 1B. Unresolved Staff Comments.
None.
| 1 |
Item 1C. Cybersecurity.
We routinely undertake activities to prevent, detect, and minimize the effects of cybersecurity incidents, including an annual risk review, policy reviews and revisions. In addition, we maintain business continuity, contingency, and recovery plans for use in the event of a cybersecurity incident by the administering of local and cloud based back up of files. and emails.
We have multiple controls in place in order to prevent breaches, some of these controls include:
| a. | FMA/2FA, this is our first AND most important first line of defense, no one should have MFA bypassed or disabled, with no exceptions. | |
| b. | Email Banner for external emails. This banner assists us to identify any phishing / impersonation email and cannot be bypassed. | |
| c. | Conditional Access Policy (CAP): Rejects connections to Exchange Online from un-authorized countries. We are further enhancing this control by implementing ACL's (access lists) in our CRM and ERP systems and any other mission critical platform. ALL platforms should have MFA enforced, any platform not supporting MFA in 2024 is deemed high-risk and immediately replaced as it is obsolete and poses high-risk to the Company. |
Item 2. Properties.
Not Applicable.
Item 3. Legal Proceedings.
On August 6, 2019, the former CEO (prior to the Company’s bankruptcy proceedings) filed a lawsuit against the Company’s subsidiary, Stemtech HealthSciences Corp., alleging unpaid salary and vacation pay related to a period prior to the current management team assuming control in 2018. The total claim is for approximately $267,000. The Company has filed a counterclaim against the former CEO and considers his claims to be without merit.
As of December 31, 2024 and 2023, the Company has accrued $267,000 related to this matter, which is included in accounts payable and accrued liabilities in the consolidated balance sheets. The Court dismissed the former CEO’s request for summary judgment on March 3, 2023; however, the litigation remains ongoing.
Item 4. Mine Safety Disclosures.
Not Applicable.
| 2 |
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information
Stemtech’s common shares have been quoted on the NASD OTC Bulletin Board under the symbol “STEK” since April 13, 2022. The table below gives the high-and-low-bid information for each fiscal quarter of trading for the last two fiscal years. The bid information was obtained from Pink OTC Markets Inc. and reflects inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions.
The closing share prices presented below represent prices between broker-dealers and do not include retail mark-ups and mark-downs or any commission to the dealer.
| QUARTER ENDED | HIGH | LOW | ||||||
| December 31, 2023 | $ | 0.03 | $ | 0.02 | ||||
| March 31, 2024 | $ | 0.10 | $ | 0.03 | ||||
| June 30, 2024 | $ | 0.06 | $ | 0.04 | ||||
| September 30, 2024 | $ | 0.06 | $ | 0.03 | ||||
| December 31, 2024 | $ | 0.06 | $ | 0.04 | ||||
Holders of Stemtech’s Common Stock
The Company had 112 registered holders of its common stock as of June 24, 2025.
Dividends
Stemtech has declared no dividends on its common shares and is not subject to any restrictions that limit its ability to pay dividends on its common shares. Dividends are declared at the sole discretion of Stemtech’s Board of Directors.
Recent Sales of Unregistered Securities
None.
Penny Stock Rules
Trading in Stemtech’s Common Stock is subject to the “penny stock” rules. The Securities and Exchange Commission (“SEC”) has adopted regulations that generally define a penny stock to be any equity security that has a market price of less than $5.00 per share, subject to certain exceptions.
These rules require that any broker-dealer who recommends Stemtech’s Common Stock to persons other than prior customers and accredited investors, must, prior to the sale, make a special written suitability determination for the purchaser and receive the purchaser’s written agreement to execute the transaction. Unless an exception is available, the regulations require the delivery, prior to any transaction involving a penny stock, of a disclosure schedule explaining the penny stock market and the risks associated with trading in the penny stock market. In addition, broker- dealers must disclose commissions payable to both the broker-dealer and the registered representative and current quotations for the securities they offer. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from effecting transactions in Stemtech’s securities, which could severely limit their market price and liquidity of Stemtech’s securities. The application of the “penny stock” rules may affect your ability to resell Stemtech’s securities.
| 3 |
Item 6. Selected Financial Data.
The Company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion should be read in conjunction with our financial statements, including the notes thereto, appearing elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Stemtech’s actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include but are not limited to those discussed below and elsewhere in this annual report. Stemtech’s audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.
Company Overview
Stemtech Corporation and its Subsidiaries (collectively, the “Company”, or “Stemtech”) was incorporated in the State of Nevada, USA on September 4, 2009 under the name Globe Net Wireless Corp. with ticker symbol “GNTW”. Our corporate name was changed to Stemtech Corporation in the state of Nevada.in August 2021. On August 19, 2021, Stemtech Corporation (“Stemtech”), a (Delaware corporation), entered into a Merger Agreement (the “Merger Agreement”) with Globe Net Wireless Corp. (“Globe Net” or “GNTW”) in exchange for the issuance of 37,060,000 shares of the Company, approximately 85% of the issued and outstanding shares of the Company. On November 19, 2021, the Company adopted an Amendment to its Articles changing the name of the Corporation to Stemtech Corporation in the state of Nevada, and on April 14, 2022, FINRA gave final approval for said name change. Stemtech has pioneered and patented a whole new category of stem cell dietary supplements.
Stemtech’s patented, advanced Stem Cell Nutrition formulations are one-of-a-kind natural products designed to help support the three most important aspects of stem cell physiology found in our RCM System: 1) Releasing the body’s own stem cells slowing down the bodies aging process; 2) their Circulation in the blood; and 3) Migration into tissues, where they can perform their daily anti-aging and longevity function of renewal and rejuvenation for optimal health. We harness the incredible power of adult stem cells. How does this work? Adult stem cells are released from your body’s own bone marrow into the bloodstream, they then circulate in the bloodstream and flow into the tissues and organs most in need. As they arrive, the adult stem cells migrate into the tissues, reproduce and become new, healthy cells of those tissues. This process takes place every single day, even without tissue damage, as part of the natural renewal system of the body. It is important to understand that Stemtech’s patented products do not contain stem cells. They are composed of all-natural plant-based botanicals and other ingredients that have been clinically documented to support the release and performance of your own adult stem cells essentially allowing the human body to heal itself naturally. Stemtech also offers our all-natural OraStem® toothpaste, which is a tooth whitener, breath freshener, anti-microbial, stem cell attracting and promotes good gum health. OraStem prevents bacteria from further entering the body and spreading germs to vital organs.
In December 2022, our new Cellect One® Rapid Renew Stem Cell Peptide Night Cream. The Night Cream is a Stemtech proprietary formula containing an FDA patented ingredient, Red Oak Bark, which enables deep penetration to promote good skin health. In 2025, we introduced Cellect One® Shield: HOCL (Hypochlorous Acid) skin care mist, which supports healthier skin, kills germs as a disinfectant, supports wound care and odor elimination. Stemtech announced it will introduce StemPets™, a pet supplement like our RCM for humans to our furry family members in April 2025. The global pet industry is a $303 Billion market.
While sales of products obviously create the cash flow, our real business model is not just “sales”, but lateral penetration. We do this through our IBPs - “Independent Business Partner” Sales Force, and we invest much energy in growing our IBPs. Post funding, Stemtech is projecting the addition of 30,000 new independent business partner reps over the next 12 to 24 months, adding to the existing IBPs. IBPs are incentivized to build their network, attracting additional industry leaders. IBPs are a testimonial to our product and business model, lowering our customer acquisition costs. Our IBPs offer highly flexible yet steady income which is most adapted to todays “Laptop & Cellphone Lifestyle”, with structured and organized weekly Corporate training calls, a personalized website, back-office tracking, oversight and management Tools, Reports, Training Materials and Social Sharing. Management conservatively believes we can reinvigorate sales to be more consistent with the company’s previous revenue historically, as Stemtech has been recognized 4 times in the Inc 5000 Magazine’s list of fastest growing companies. Below this IBP level, we plan to have our “DTC” (Direct To Consumer) network marketing Distribution model. This integrative model allows us an immediate global presence and ability to operate in multiple countries on every continent. With a 10% money back guarantee, This method requires no up-front or required buy-in of inventory by customers, with monthly shipments available for known recurring sales. This platform has us now operating at the intersection of the ecommerce economy, social economy and gig economy.
| 4 |
Implications of Being an Emerging Growth Company
Emerging Growth Company - We are an emerging growth company as defined in Section 2(a)(19) of the Securities Act of 1933, as amended, or the Securities Act. We will continue to be an emerging growth company until: (i) the last day of our fiscal year during which we had total annual gross revenues of at least $1.07 billion; (ii) the last day of our fiscal year following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective registration statement under the Securities Act; (iii) the date on which we have, during the previous 3-year period, issued more than $1.0 billion in non-convertible debt; or (iv) the date on which we are deemed to be a large accelerated filer, as defined in Section 12b-2 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the prior June 30.
As an emerging growth company, we are exempt from:
| · | Sections 14A(a) and (b) of the Exchange Act, which require companies to hold stockholder advisory votes on executive compensation and golden parachute compensation; | |
| · | The requirement to provide, in any registration statement, periodic report or other report to be filed with the SEC certain modified executive compensation disclosure under Item 402 of Regulation S-K or selected financial data under Item 301 of Regulation S-K for any period before the earliest audited period presented in our initial registration statement; | |
| · | Compliance with new or revised accounting standards until those standards are applicable to private companies; | |
| · | The requirement under Section 404(b) of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, to provide auditor attestation of our internal controls and procedures; and | |
| · | Any Public Company Accounting Oversight Board, or “PCAOB”, rules regarding mandatory audit firm rotation or an expanded auditor report, and any other PCAOB rules subsequently adopted unless the Commission determines the new rules are necessary for protecting the public. |
We have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the Jumpstart Our Business Startups Act.
We are also a smaller reporting company as defined in Rule 12b-2 of the Exchange Act. As a smaller reporting company, we are not required to provide selected financial data pursuant to Item 301 of Regulation S-K, nor are we required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002. We are also permitted to provide certain modified executive compensation disclosure under Item 402 of Regulation S-K.
Basis of Presentation
The accompanying consolidated financial statements have been prepared in accordance with U.S. GAAP. Such consolidated financial statements and accompanying notes are the representations of the Company’s management, which is responsible for their integrity and objectivity. All intercompany accounts and transactions have been eliminated in consolidation.
Critical Accounting Policies
This Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. In connection with the preparation of our consolidated financial statements, we are required to make assumptions and estimates about future events and apply judgments that affect the reported amounts of assets, liabilities, revenue, expenses and the related disclosures. We base our assumptions, estimates and judgments on historical experience, current trends and other factors that management believes to be relevant at the time our consolidated financial statements are prepared. On a regular basis, management reviews the accounting policies, assumptions, estimates and judgments to ensure that our consolidated financial statements are presented fairly and in accordance with U.S. GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material.
Our significant accounting policies are discussed in Note 2, Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements included elsewhere in this report.
| 5 |
Critical Accounting Estimates
Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of our consolidated financial statements and related disclosures requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities and expenses and related disclosures. Management believes that there are no critical accounting estimates in these consolidated financial statements.
New Accounting Pronouncements
We do not expect recent accounting pronouncements will have a material impact on our consolidated financial position, results of operations or cash flows. See Note 2 in the accompanying consolidated financial statements for additional information.
Results of Operations
Our consolidated financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation. We expect we will require additional capital to meet our long-term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.
Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023.
During the years ended December 31, 2024 and 2023, net sales were $5,053,690 and $4,921,531, respectively. The increase of $132,159 is primarily due to slight increases in the overall sales of the subsidiaries due to the increase in IBPs in 2024.
During the years ended December 31, 2024 and 2023, our total operating expenses were $6,113,773 and $8,144,439, respectively, reflecting a favorable decrease of $2,030,664. This improvement was primarily driven by effective cost management initiatives, including a reduction in general and administrative expenses, which decreased to $5,233,823 in 2024 from $6,439,537 in 2023.
During the years ended December 31, 2024 and 2023, total non-operating expenses were $1,386,274 and $1,207,433, respectively, reflecting a modest increase of $178,841. This increase was primarily due to the absence in 2024 of gains from the change in fair value of derivative liabilities and settlements of derivative liabilities, which contributed $1,488,686 and $1,366,298, respectively, in 2023. Offsetting this impact, interest expense decreased significantly to $1,579,370 in 2024 from $4,893,033 in 2023, reflecting improved debt management and reduced financing costs. We also recognized a gain on extinguishment of debt of $107,733 in 2024, compared to $814,132 in the prior year. Other income and expenses, net, increased modestly to $85,363 in 2024 from $16,484 in 2023.
Our net loss for the years ended December 31, 2024 and 2023 was $3,772,701 and $5,431,979, respectively. The year-over-year improvement in net loss was primarily driven by reductions in operating expenses and interest expense, partially offset by the absence of derivative-related gains recognized in the prior year as mentioned above.
Liquidity and Capital Resources
In spite of increasing revenues, we are not yet profitable, and we cannot provide any assurance of when we will be profitable. We incurred a net loss of $3,772,701 and $5,431,979 for the years ended December 31, 2024 and 2023, respectively. During the year ended December 31, 2024, we met our short-term liquidity needs through existing cash reserves and financing activities. These included proceeds from notes payable of $274,689, net proceeds from a factoring arrangement of $529,667, and stock issued for cash of $474,812. These inflows were partially offset by repayments of notes payable totaling $282,034. As a result, net cash provided by financing activities was $1,079,110 for the year.
As of December 31, 2024, our current assets totaled $921,746, compared to $400,710 as of December 31, 2023, reflecting an improvement in liquidity. Our current liabilities increased to $9,009,049 as of December 31, 2024, from $6,462,036 at December 31, 2023. The increase was primarily driven by financing obligations and trade-related payables. Current liabilities as of December 31, 2024, consisted of $4,518,391 in accounts payable and accrued expenses, $1,769,583 in convertible notes payable, $2,046,001 in non-convertible notes payable, $673,611 in factoring liabilities, and $1,463 in deferred revenues.
Stockholders’ deficit increased to $5,226,804 as of December 31, 2024, from $2,778,765 as of December 31, 2023. The increase was primarily due to the net loss incurred during the year, partially offset by the conversion of convertible notes and the reclassification of derivative liabilities to equity.
| 6 |
Cash Flows from Operating Activities
We have not generated positive cash flows from operating activities. For the year ended December 31, 2024, net cash used in operating activities was $601,198, primarily due to a net loss of $3,772,701 partially offset by non-cash adjustments of $1,789,721 and changes in working capital.
The non-cash adjustments included depreciation and amortization of $344,466, amortization of right-of-use assets of $70,820, stock compensation expense of $440,256, amortization of debt discount of $362,404, stock issued for services of $746,374, and a loss on extinguishment of debt of $107,733, partially offset by a $66,866 adjustment for operating lease liabilities.
Changes in operating assets and liabilities included an increase in accounts payable and accrued expenses of $1,809,485, a decrease in accounts receivable of $208,255, a decrease in inventory of $149,030, an increase in prepaid expenses and other current assets of $22,619, an increase in long-term deposits of $6,776, and a decrease in deferred revenues of $54,576.
Cash Flows from Financing Activities
We have financed our operations primarily through the issuance of common stock and proceeds from debt arrangements. For the year ended December 31, 2024, net cash provided by financing activities was $1,079,110. This included $274,689 in proceeds from notes payable, $81,976 from related party notes, $529,667 from a factoring arrangement, and $474,812 from the issuance of common stock. These inflows were partially offset by repayments of notes payable totaling $282,034.
Plan of Operation and Funding
We expect that working capital requirements will continue to be funded through a combination of our existing funds and further issuances of equity securities and debt instruments.
Existing working capital, further advances and debt instruments, and anticipated cash flow are expected to be adequate to fund our operations over the next three months. Generally, we have financed operations to date through the proceeds of the private placement of equity and debt instruments. In connection with our business plan, management anticipates additional increases in operating expenses and capital expenditures relating to: (i) acquisition of inventory; (ii) developmental expenses associated with a start-up business; and (iii) marketing expenses. We intend to finance these expenses with further issuances of securities and director loans. Thereafter, we expect we will need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations. We will have to raise additional funds in the next twelve months in order to sustain and expand our operations. We currently do not have a specific plan of how we will obtain such funding; however, we anticipate that additional funding will be in the form of equity financing from the sale of our common stock. We have and will continue to seek to obtain short-term loans from our directors, although no future arrangement for additional loans has been made. We do not have any agreements with our directors concerning these loans. We do not have any arrangements in place for any future equity financing.
Off-Balance Sheet Arrangements
As of the date of this report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
Stockholders’ Deficit
Authorized Shares
Effective May 5, 2023, the Company is authorized to issue up to 400,000,000 shares of common stock, $0.001 par value. Prior to May 5, 2023, the Company was authorized to issue up to 200,000,000 shares (see Note 9). Each outstanding share of common stock entitles the holder to one vote per share on all matters submitted to a stockholder vote. All shares of common stock are non-assessable and non-cumulative, with no pre-emptive rights.
| 7 |
Commitments and Contingencies
None.
Financing
On March 27, 2023, the Company entered into a Senior Secured Convertible Promissory Note with Leviston Resources, LLC for a maximum principal amount of up to $7,000,000, subject to disbursement at the lender’s discretion. To date, Leviston Resources LLC has disbursed four tranches totaling $1,561,660, consisting of $1,000,000, $250,000, $250,000, and $61,660, respectively. The latest disbursement adheres to the terms of the note and prior funding obligations. The note bears interest at 7% per annum and is convertible into common stock at a conversion price initially set at 125% of the closing bid price on the disbursement date, subject to adjustment thereafter.
Future financing through equity investments is likely to be dilutive to existing stockholders. Also, the terms of securities we may issue in future capital transactions may be more favorable for our new investors. Newly issued securities may include preferences, superior voting rights, and the issuance of warrants or other derivative securities, which may have additional dilutive effects. Further, we may incur substantial costs in pursuing future capital and financing, including investment banking fees, legal fees, accounting fees, and other costs. We may also be required to recognize non-cash expenses in connection with certain securities we may issue, such as convertible notes and warrants, which will adversely impact our financial condition.
Our ability to obtain needed financing may be impaired by such factors as the capital markets, both generally and specifically in the nutraceutical industry, which could impact the availability or cost of future financing. If the amount of capital we are able to raise from financing activities, together with our revenue from operations, is not sufficient to satisfy our capital needs, even to the extent that we reduce our operations accordingly, we may be required to cease operations.
We have no plans, arrangements or contingencies in place in the event that we cease operations.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.
Item 8. Financial Statements and Supplementary Data.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Stemtech Corporation
Consolidated Financial Statements
December 31, 2024
| 8 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors and Shareholders
Stemtech Corporation and Subsidiaries
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Stemtech Corporation and Subsidiaries (the “Company”) as of December 31, 2024 and 2023 and the related consolidated statements of operations and comprehensive loss, shareholders’ equity, and cash flows, for the period ended December 31, 2024 and 2023, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The accompanying consolidated financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and classification of liabilities and commitments in the normal course of business. The accompanying consolidated financial statements do not reflect any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classifications of liabilities that might result if the Company is unable to continue as a going concern.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
Critical Audit Matters
Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgements. We determined that there are no critical audit matters.
/s/
We have served as the Company’s auditor since 2024.
June 30, 2025
PCAOB ID Number
| F-1 |
Stemtech Corporation
Consolidated Balance Sheets
| December 31, 2024 | December 31, 2023 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Inventory, net | ||||||||
| Prepaid expenses and other current assets | ||||||||
| TOTAL CURRENT ASSETS | ||||||||
| Property and equipment, net | ||||||||
| Intangible assets, net | ||||||||
| Other long term assets | ||||||||
| Long term deposits | ||||||||
| Operating lease right-of-use assets - net | ||||||||
| Goodwill | ||||||||
| Intercompany | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Notes payable | ||||||||
| Convertible debentures, net of discount | ||||||||
| Operating lease liabilities - current | ||||||||
| Deferred revenues | ||||||||
| Factoring liability | ||||||||
| Derivative liability | ||||||||
| TOTAL CURRENT LIABILITIES | ||||||||
| Notes payable - Long term | ||||||||
| Operating lease liabilities - noncurrent | ||||||||
| Other long term liabilities | ||||||||
| TOTAL LIABILITIES | ||||||||
| COMMITMENTS AND CONTINGENCIES (Note 10) | ||||||||
| STOCKHOLDERS’ EQUITY | ||||||||
| Common stock - $ par value; shares authorized; and shares issued and outstanding as of December 31, 2024 and December 31, 2023, respectively | ||||||||
| Additional paid in capital | ||||||||
| Accumulated other comprehensive loss | ( | ) | ||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Stemtech Corporation shareholders’ deficit | ( | ) | ( | ) | ||||
| Non-controlling interest in subsidiaries | ( | ) | ( | ) | ||||
| Net loss | ||||||||
| TOTAL STOCKHOLDERS’ EQUITY | ( | ) | ( | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ | ||||||
See accompanying Notes to Consolidated Financial Statements
| F-2 |
Stemtech Corporation
Consolidated Statements of Operations and Comprehensive Loss
| For The Twelve Months Ending | ||||||||
| December 31, | ||||||||
| 2024 | 2023 | |||||||
| NET SALES | $ | $ | ||||||
| COST OF GOODS SOLD: | ||||||||
| Cost of goods sold | ||||||||
| Freight-in | ||||||||
| TOTAL COST OF GOODS SOLD | ||||||||
| GROSS PROFIT | ||||||||
| OPERATING EXPENSES: | ||||||||
| Commissions | ||||||||
| Selling and marketing | ||||||||
| General and administrative | ||||||||
| Research and development | ||||||||
| TOTAL OPERATING EXPENSES | ||||||||
| OPERATING LOSS | ( | ) | ( | ) | ||||
| OTHER INCOME (EXPENSE): | ||||||||
| Change in fair value of derivative liability | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Other income and expenses, net | ||||||||
| Gain on settlement of derivative liabilities | ||||||||
| Gain (loss) on extinguishment of debt | ||||||||
| Loss on disposal of assets | ||||||||
| TOTAL OTHER INCOME (EXPENSE) | ( | ) | ( | ) | ||||
| INCOME (LOSS) BEFORE INCOME TAXES | ( | ) | ( | ) | ||||
| PROVISION FOR INCOME TAXES | ||||||||
| NET LOSS | ( | ) | ( | ) | ||||
| NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS | ( | ) | ( | ) | ||||
| NET LOSS AVAILABLE TO COMMON STOCKHOLDERS | $ | ( | ) | $ | ( | ) | ||
| Net loss per common share | ||||||||
| Basic | $ | ( | ) | $ | ( | ) | ||
| Diluted | $ | ( | ) | $ | ( | ) | ||
| Shares used to compute loss per share | ||||||||
| Basic | ||||||||
| Diluted | ||||||||
| Comprehensive loss | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Change in foreign currency translation adjustments | ( | ) | ||||||
| Comprehensive loss available to common stockholders | $ | ( | ) | $ | ( | ) | ||
See accompanying Notes to Consolidated Financial Statements
| F-3 |
Stemtech Corporation
Consolidated Statements of Changes in Stockholders’ Deficit
For the Years Ended December 31, 2024 and 2023
| Accumulated | ||||||||||||||||||||||||||||||||
| Other | Non- | Total | ||||||||||||||||||||||||||||||
| Common Stock | Additional | Accumulated | Comprehensive | controlling | Stockholders' | |||||||||||||||||||||||||||
| No. of Shares | Amount | Paid-in Capital | Deficit | Income (Loss) | Subtotal | Interest | Deficit | |||||||||||||||||||||||||
| Balance at December 31, 2022 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||
| Stock based compensation | – | |||||||||||||||||||||||||||||||
| Stock issued for services | ||||||||||||||||||||||||||||||||
| Conversion of convertible notes and accrued interest to common stock | ||||||||||||||||||||||||||||||||
| Settlement of accrued liabilities for common stock | ||||||||||||||||||||||||||||||||
| Stock issued for LFR Acquisition | ||||||||||||||||||||||||||||||||
| Reclassification of derivative liabilities to APIC | – | |||||||||||||||||||||||||||||||
| Issuance of stock for cancellation of options | ||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | – | |||||||||||||||||||||||||||||||
| Loss attributable to non-controlling interests | – | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Net loss | – | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||
| Balance at December 31, 2023 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||
| Balance at December 31, 2023 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||
| Stock based compensation | – | |||||||||||||||||||||||||||||||
| Stock issued for services | ||||||||||||||||||||||||||||||||
| Conversion of convertible notes and accrued interest to common stock | ||||||||||||||||||||||||||||||||
| Settlement of accrued liabilities for common stock | – | |||||||||||||||||||||||||||||||
| Stock issued for LFR Acquisition | – | |||||||||||||||||||||||||||||||
| Reclassification of derivative liabilities to APIC | – | |||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | – | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||
| Non-controlling interest | – | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Net loss | – | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) |
See accompanying Notes to Consolidated Financial Statements
| F-4 |
Stemtech Corporation
Consolidated Statements of Cash Flows
| For the year Ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Amortization of right of use asset | ||||||||
| Operating lease liabilities | ( | ) | ||||||
| Stock compensation expense | ||||||||
| Non-cash interest expense from issuance on debt (derivative) | ||||||||
| Amortization of debt discount | ||||||||
| Change in fair value of derivative liabilities | ( | ) | ||||||
| Gain (loss) on settlement of derivative liabilities | ( | ) | ||||||
| Cancellation of shares returned by shareholders | ||||||||
| Stock issued for services | ||||||||
| (Gain) loss on extinguishment of debt | ( | ) | ( | ) | ||||
| Changes in operating assets and liabilities, net of effect of acquisitions: | ||||||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Inventory | ( | ) | ||||||
| Prepaid expenses and other current assets | ( | ) | ||||||
| Accounts payable and accrued expenses | ||||||||
| Long term deposits | ( | ) | ||||||
| Operating lease liabilities | ( | ) | ||||||
| Deferred revenues | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchase of property and equipment | ||||||||
| Net cash used in investing activities | ||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Proceeds from notes payable | ||||||||
| Net proceeds from factoring arrangement | ( | ) | ||||||
| Repayment of note payable | ( | ) | ( | ) | ||||
| Stock issued for cash | ||||||||
| Proceeds from note payable - related parties | ||||||||
| Net cash provided (used) by financing activities | ||||||||
| Effects of currency translation on cash | ( | ) | ||||||
| Net increase (decrease) in cash | ( | ) | ||||||
| Cash, beginning of period | ||||||||
| Cash, end of period | $ | $ | ||||||
| Supplemental disclosure cash flow information: | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for income taxes | $ | $ | ||||||
| Supplemental noncash transactions | ||||||||
| Stock issued for LFR Acquisition | $ | $ | ||||||
| Issuance of common stock for conversion of debt | $ | $ | ||||||
| Settlement of accrued liabilities for common stock | $ | $ | ||||||
| Reclassification of derivative liabilities to APIC | $ | $ | ||||||
| Recognition of right of use asset - operating lease | $ | $ | ||||||
See accompanying Notes to Consolidated Financial Statements
| F-5 |
STEMTECH CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2024
Note 1 – Organization and Basis of Presentation
Stemtech Corporation and its Subsidiaries (collectively, the “Company”) was incorporated in the State of Nevada, USA on September 4, 2009 under the previous name Globe Net Wireless Corp. On November 19, 2021, the Company adopted an Amendment to its Articles changing the name of the Corporation to Stemtech Corporation in the state of Nevada, and on April 14, 2022, FINRA gave final approval for said name change, as evidenced by the 8-K filed that date. Stemtech is a global network marketing company that develops science-based products that it believes supports wellness by helping the body maintain healthy stem cell physiology, also known as stem cell enhancers. Known as the Stem Cell Nutrition Company®, the Company is a pioneer in stem cell science, and believes it can demonstrate that adult stem cells function as the natural renewal system of the body. The Company believes its products enhance and support the work of the body’s stem cells by releasing more stem cells, helping to circulate them in the blood and migrate them into tissues, where they can perform their daily function of renewal for optimal health. Our mission is to enhance wellness and prosperity around the world. These products are marketed internationally by the Company’s subsidiaries and through independent distributors. The Company markets its products under the following brands: RCM System, stemrelease3™, Stemflo® MigraStem™ and OraStem® (Oral Health Care), and Cellect One™ Rapid Renew Stem Cell Peptide Night Cream.The Company introduced Cellect One® Shield HOCL – (Hypochlorous Acid) skin care product.
On August 19, 2021, Stemtech Corporation (“Stemtech”), a Delaware corporation, entered into a Merger Agreement (the “Merger Agreement”) with Globe Net Wireless Corp. (“Globe Net” or “GNTW”). The merger was accounted for as a reverse acquisition and recapitalization in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805, Business Combinations. Management evaluated the guidance contained in ASC 805 with respect to the identification of the acquirer in the merger and concluded, based on a consideration of the pertinent facts and circumstances, that Stemtech acquired Globe Net for financial accounting purposes. On November 9, 2021, the Company changed its fiscal year end from a fiscal year end of August 31 to a calendar year end of December 31.
The consolidated financial statements include the accounts of Stemtech (Parent) and its thirteen (13) subsidiaries:
| 1. | Stemtech HealthSciences Corp (U.S.A.) (“Stemtech HealthSciences”) |
| 2. | Stemtech IP Holdings, LLC (U.S.A.) |
| 3. | Stemtech Canada, Inc. (“Canada”) |
| 4. | Stemtech Health Sciences S. de R.L. de C.V. (“Mexico”) |
| 5. | Stemtech Services SARL de C.V. (Mexico) (“Stemtech Mexico”) |
| 6. | Tecrecel Mexico SA de CV (“TME”) |
| 7. | Stemtech Malaysia Holdings Sdn. Bhd. (“Malaysia Holdings”) |
| 8. | Stemtech Malaysia Sdn. Bhd. (“Malaysia”) |
| 9. | Stemtech Taiwan Holding, Inc. (“Taiwan”) |
| 10. | Stemtech Taiwan Branch |
| 11. | Tecrecel S.A. (“Ecuador”) |
| 12. | Food & Health Tech Foodhealth SA (“FHT Ecuador”) |
| 13. | Life Factor Research (“LFR”) |
| F-6 |
Note 2 — Summary of Significant Accounting Policies
Basis of Presentation
The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and considering the requirements of the United States Securities and Exchange Commission (“SEC”). All intercompany accounts and transactions have been eliminated in consolidation.
Going Concern
The accompanying consolidated financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and classification of liabilities and commitments in the normal course of business. The accompanying consolidated financial statements do not reflect any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classifications of liabilities that might result if the Company is unable to continue as a going concern.
The Company has experienced recurring
net losses and negative cash flows from operations since inception and has an accumulated deficit of approximately $ million and a
working capital deficiency of approximately $
The Company’s ability to continue as a going concern for the next twelve months from the issuance of these consolidated financial statements depends on its ability to execute its business plan, increase revenue, and reduce expenditures. The Company has reduced its labor force, cut out significant overhead and increased sales in attempts to address the above.
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash
The Company considers all highly
liquid temporary investments purchased with original maturities of three months or less at the date of purchase to be cash equivalents.
The Company cash equivalents $
| F-7 |
Inventory
Inventory is comprised of finished goods and raw materials and is valued at the lower of cost or market, using the “first-in, first-out” method in determining cost. Management evaluates the allowance for inventory obsolescence on a regular basis and has determined that no allowance for slow moving or obsolete inventory is necessary as at December 31, 2024 and 2023.
Intangible Assets and Goodwill
The estimated fair values of acquired intangibles are generally determined based upon future economic benefits such as earnings and cash flows. Acquired identifiable intangible assets are recorded at fair value and are amortized over their estimated useful lives. Acquired intangible assets with an indefinite life are not amortized but are reviewed for impairment at least annually or more frequently whenever events or changes in circumstances indicate that the carrying amounts of those assets are below their estimated fair values. Impairment is tested under ASC 350, Intangibles - Goodwill and Other.
Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in a business combination. Goodwill is not amortized but is tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset may be impaired. The fair value of the reporting unit is evaluated on qualitative factors to determine if the reported value may be impaired. If the qualitative factors indicate a likelihood of impairment, we then evaluate carrying value of the reporting unit based on quantitative factors using the income approach. An impairment charge is recognized for the excess of the carrying value of goodwill for the reporting unit over its implied fair value.
Notes Payable and Convertible Debentures
U.S. GAAP requires companies to bifurcate conversion options from their host instruments and account for them as freestanding derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable U.S. GAAP with changes in fair value reported in earnings as they occur, and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. An exception to this rule is when the host instrument is deemed to be conventional, as that term is described under ASC 480, Distinguishing Liabilities From Equity. See Note 6 – Notes Payable and Convertible Debentures
Factoring Liability
We have entered into factoring agreements with various financial institutions to receive cash for our future revenues. These transactions are treated as a debt instrument and are accounted for as a liability because the Company makes weekly payments towards the balance and fees. We utilize factoring arrangements as an integral part of our financing for working capital. Any change in the availability of these factoring arrangements could have a material adverse effect on our consolidated financial condition. See Note 6 – Notes Payable and Convertible Debentures.
Derivative Liabilities
The Company classifies as equity any contracts that: (i) require physical settlement or net-share settlement; or (ii) provide the Company with a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement) providing that such contracts are indexed to the Company’s own stock. The Company classifies as assets or liabilities any contracts that: (i) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the Company’s control); or (ii) gives the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). The Company assesses classification of its common stock purchase warrants and other freestanding derivatives at each reporting date to determine whether a change in classification between assets and liabilities is required.
The Company’s freestanding derivatives consisted of warrants to purchase common stock that were issued in connection with the issuance of debt and the sale of common shares, and of embedded conversion options within convertible notes. The Company evaluated these derivatives to assess their proper classification in the accompanying consolidated balance sheet as of December 31, 2024 and 2023 using the applicable classification criteria enumerated under ASC 815, Derivatives and Hedging. See Note 7 – Derivative Liabilities
| F-8 |
Impairment of Long-Lived Assets
The Company assesses, on an annual basis, the recoverability of the carrying amount of intangible assets and long-lived assets used in continuing operations. A loss is recognized when expected future cash flows (undiscounted and without interest) are less than the carrying amount of the asset. The impairment loss is determined as the difference by which the carrying amount of the asset exceeds its fair value. The Company evaluated its long-lived assets for any indications of impairment. The Company concluded that there was no impairment, however there can be no assurance that market conditions will not change or demand for the Company’s products will continue which could result in impairment of long- lived assets in the future.
Revenue Recognition
It is the Company’s policy that revenues from product sales is recognized in accordance with ASC 606 Revenues from Contracts with Customers. Five basic steps must be followed before revenue can be recognized; (1) Identifying the contract(s) with a customer that creates enforceable rights and obligations; (2) Identifying the performance obligations in the contract, such as promising to transfer goods or services to a customer; (3) Determining the transaction price, meaning the amount of consideration in a contract to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer; (4) Allocating the transaction price to the performance obligations in the contract, which requires the Company to allocate the transaction price to each performance obligation on the basis of the relative standalone selling prices of each distinct good or services promised in the contract; and (5) Recognizing revenue when (or as) the entity satisfies a performance obligation by transferring a promised good or service to a customer. The amount of revenue recognized is the amount allocated to the satisfied performance obligation.
Revenues from direct retail sales to consumers and revenues from independent distributors occur when title and risk of loss has passed, which generally occurs at the time the products are shipped. Revenues are recorded net of estimated sales returns and allowances.
Allowances for product returns
are provided at the time the sale is recorded. This liability is based upon historic return rates and the relevant return pattern, which
reflects anticipated returns to be received over a period of up to one year following the original sale. As of both December 31, 2024
and 2023, the Company had a reserve for sales returns of approximately $
We offer various incentives to our IBPs, such as volume bonuses, commissions, and promotional discounts. These are considered part of variable consideration and are estimated at the time of sale. The estimate is based on historical trends and our current compensation plans and is recognized as a reduction to revenue.
Breakage refers to unused credits, promotional balances, or rewards that are not expected to be redeemed. We estimate the amount of breakage using historical data and recognize the related income over time, as it becomes clear that these amounts won’t be used.
We regularly monitor and update these estimates to ensure our revenue recognition remains accurate and consistent with accounting standards.
Comprehensive Loss
The other comprehensive loss in the accompanying consolidated financial statements relates to the net loss of the Company for the respective period as well as unrealized foreign currency translation adjustments.
| F-9 |
Foreign Currency Translation
A portion of the Company’s business operations occur outside the United States. The local currency of each of the Company’s subsidiaries is generally its functional currency. All assets and liabilities are translated into U.S. Dollars at exchange rates existing at the consolidated balance sheet dates, revenue and expenses are translated at weighted-average exchange rates and stockholders’ deficit is recorded at historical exchange rates. The resulting foreign currency translation adjustments are recorded as a separate component of stockholders’ deficit in the consolidated balance sheets and as a component of comprehensive loss. Transaction gains and losses are included in other income (expense), net in the consolidated statements of operations and comprehensive loss.
Leases
In February 2016, the FASB issued ASC 842, Leases, (“ASC 842”) to increase transparency and comparability among organizations by requiring the recognition of right-of-use (“ROU”) assets and lease liabilities on the balance sheet for leases previously classified as operating leases. The Company adopted ASC 842 effective January 1, 2022 and recognized and measured operating leases existing at, or entered into after, January 1, 2021 (the beginning of the earliest comparative period presented) using a modified retrospective approach, with certain practical expedients available (see Note 5). The Company’s accounting for finance leases under ASC 842 remained substantially unchanged,
In accordance with ASC 842, the Company determines if an arrangement is a lease at inception. Operating lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating lease assets represent the Company’s right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. To determine the present value of future lease payments, the Company estimates the incremental borrowing rates corresponding to the reasonably certain lease term. If the estimate of the Company’s incremental borrowing rate was changed, the operating lease assets and liabilities could differ materially.
Finance lease assets and liabilities are recognized at the lease commencement date at the present value of the future lease payments not yet paid using the Company’s incremental borrowing rate, Assets acquired under finance lease are included in property and equipment, while finance lease obligations are included in other current liabilities and other long- term liabilities on the consolidated balance sheets.
Income Tax
The Company accounts for income taxes in accordance with ASC 74, Income Taxes. Accordingly, deferred income taxes are determined utilizing the asset and liability method based on the estimated future tax effects of differences between financial accounting and the tax bases of assets and liabilities under the applicable tax law. Deferred tax balances are computed using the enacted tax rates expected to be in effect when these differences reverse. Valuation allowances with respect to deferred tax assets are provided for, if necessary, to reduce deferred tax assets to amounts more likely than not to be realized.
The Company accounts for uncertain tax positions in accordance with ASC Topic 740-10, which prescribes detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in an enterprise’s financial statements. According to ASC Topic 740-10, tax positions must meet a more-likely-than-not recognition threshold. The Company’s accounting policy is to classify interest and penalties relating to uncertain tax positions under income taxes, however the Company did not recognize such items in its fiscal 2024 and 2023 consolidated financial statements and did not recognize any liability with respect to unrecognized tax positions in its consolidated balance sheet.
| F-10 |
Business Combinations
The Company allocates the fair value of purchase consideration to the tangible and intangible assets acquired, net of liabilities assumed, based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired customer lists, acquired technology, and trade names from a market participant perspective, useful lives and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, which is one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings.
Fair Value of the Acquired Assets
The Company accounted for the acquisitions discussed in Note 4 as business combinations using the acquisition method of accounting as prescribed in ASC 805 and ASC 820. In accordance with ASC 805 and ASC 820, the Company assigned fair value to the tangible and intangible assets acquired, identifiable intangible assets and liabilities assumed as of the acquisition dates. Goodwill as of the acquisition date is measured as the excess of purchase consideration over the fair value of tangible and identifiable intangible assets acquired and liabilities assumed.
Segment Information
The Company manages its operations in three geographic segments for the purpose of assessing performance and making operating decisions including North America (including its subsidiaries in United States and Canada), Latin America (including subsidiaries in Mexico and Ecuador) and Asia (including its subsidiaries in Malaysia and Taiwan).
Reclassifications
Certain reclassifications have been made to prior year data to conform to the current year’s presentation. These reclassifications had no impact on reported income or losses.
Recent Accounting Pronouncements
In July 2023, the FASB issued Accounting Standards Update ("ASU") 2023-03, Presentation of Financial Statement (Topic 205), Income Statement - Reporting Comprehensive Income (Topic 220), Distinguishing Liabilities from Equity (Topic 480), Equity (Topic 505), and Compensation - Stock Compensation (Topic 718), to amend various SEC paragraphs in the ASC to reflect the issuance of SEC Staff Accounting Bulletin No. 120, among other things. The ASU does not provide any new guidance so there is no transition or effective date associated with it. The Company is currently assessing the impact of adopting ASU 2023-03 on the consolidated financial statements and related disclosures.
In November 2023, FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for the Company’s annual periods beginning January 1, 2024, and for interim periods beginning January 1, 2025, with early adoption permitted.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topics 740): Improvements to Income Tax Disclosures to expand the disclosure requirements for income taxes, specifically relating to the rate reconciliation and income taxes paid. ASU 2023-09 is effective for the Company’s annual periods beginning January 1, 2025, with early adoption permitted.
The Company is currently evaluating the potential effects that ASU 2023-07 and ASU 2023-09 will have on the consolidated financial statement disclosures.
| F-11 |
Basic net loss per share is computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted loss per share includes potentially dilutive securities such as outstanding options and warrants, using various methods such as the treasury stock or modified treasury stock method in the determination of dilutive shares outstanding during each reporting period.
For the years ended December 31, 2024 and 2023, the dilutive effect of and , respectively, of common stock warrants have not been included in the average shares outstanding for the calculation of net loss per share as the effect would be anti-dilutive as a result of the Company’s net losses in these periods.
Fair Value Measurements
As defined in ASC 820 Fair Value Measurements, fair value is 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 (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement).
The Company determines the level in the fair value hierarchy within which each fair value measurement falls in its entirety, based on the lowest level input that is significant to the fair value measurement in its entirety. In determining the appropriate levels, the Company performs an analysis of the assets and liabilities at each reporting period end.
The Company’s financial instruments consist of cash, accounts receivable, accounts payable, accrued interest, notes payable and, convertible debentures. The carrying amounts of these financial instruments are of approximate fair value due to either length of maturity or interest rates that approximate prevailing rates unless otherwise disclosed in these financial statements. The Company’s derivative liabilities are valued using option pricing models with Level 3 inputs.
Sequencing
Based upon ASC 815-15-25 Embedded Derivatives, the Company has adopted a sequencing approach regarding the application of ASC 815-40 Contracts in Entity's Own Equity to its outstanding convertible notes and warrants. Pursuant to the sequencing approach, the Company evaluates its contracts based upon the earliest issuance date.
Note 3 – Inventory
Inventory consists of the following components:
| Schedule of inventory | ||||||||
| December 31, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Finished goods | $ | $ | ||||||
| Raw materials | ||||||||
| Total Inventory | $ | $ | ||||||
| F-12 |
Note 4 – Business Combinations, Intangible Assets and Goodwill
Original Acquisition
On May 7, 2018, the Company purchased
the assets of Stemtech International, Inc. (the “Former Parent Company”), out of a Chapter 7 Bankruptcy for $
The excess purchase price has been
recorded as goodwill in the amount of $
LFR Acquisition
In March 2023, the Company acquired 100% of LFR, a research and development company with expertise in the formulation of products.
The consideration paid was
million shares of the Company with a fair value of $
The following table summarizes the allocation of purchase price of the acquisition:
| Schedule of allocation of purchase price of the acquisition | ||||
| Tangible Assets Acquired: | Allocation | |||
| Cash and cash equivalents | $ | |||
| Inventory | ||||
| Accounts payable and Accrued liabilities | ( | ) | ||
| Net Tangible Assets Acquired | $ | ( | ) | |
| Intangible Assets Acquired: | ||||
| Non-compete Agreement | ||||
| Total Fair Value of Assets Acquired | $ | |||
| Consideration: | ||||
| Common Stock | ||||
| Goodwill | $ | |||
| F-13 |
The components of all acquired intangible assets were as follows at December 31, 2024 and December 31, 2023:
| Schedule of acquired intangible assets | ||||||||||||
December 31, 2024 | December 31, 2023 | Average Estimated Life (Years) | ||||||||||
| Patent products | $ | $ | ||||||||||
| Trade names and trademarks | ||||||||||||
| Customer/distribution list | ||||||||||||
| Non-compete agreement | ||||||||||||
| Accumulated amortization | ( | ) | ( | ) | ||||||||
| Total | $ | $ | ||||||||||
Estimated future amortization as of December 31, 2024 is as follows:
| Schedule of estimated future amortization | ||||
| Year ending December 31, | ||||
| 2025 | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| Thereafter | ||||
| Total | $ | |||
Intellectual Property
The Company has two current patents filed in the US and 3 filed internationally, and as our research and development progresses, plan on filing more patents. Our current patent portfolio includes:
| · | Patent US 9, 289, 375 – Skin Care Composition Containing Combinations of Natural Ingredients | |
| · | Patent AU 201127647 – Methods and Composition for Enhancing Stem Cell Mobilization | |
| · | Patent MX 344304 – Metodos y Composiciones para Mejorar las Celulas Madre | |
| · | Patent US 10,159,705 – Methods and Composition for Enhancing Stem Cell Mobilization | |
| · | Patent MX 358857 – Composiciones para el Cuidado de la Piel que Contienen Combinaciones de Ingredientes Naturales | |
| · | Patent MX 358857 (part 1 of 3) - Composiciones para el Cuidado de la Piel que Contienen Combinaciones de Ingredientes Naturales | |
| · | Patent MX 358857 (part 2 of 3) - Composiciones para el Cuidado de la Piel que Contienen Combinaciones de Ingredientes Naturales | |
| · | Patent MX358857 (part 3 of 3) - Composiciones para el Cuidado de la Piel que Contienen Combinaciones de Ingredientes Naturales |
| F-14 |
Note 5 – Operating Lease Commitments
On August 16,
2021, the Company extended its office space lease with Sunbeam Properties Inc. to rent approximately 5,000 square feet of space
in Miramar, Florida. The Company pays $9,027 per month in rent until the end of the extended lease September 30, 2024. The Company has
sublet the space to a tenant who pays the Company $9,097 to occupy the space. The Company incurred lease expense for its operating leases
of $
Note 6 – Notes Payable and Convertible Debentures
Schedule of notes payable as of:
| Schedule of notes payable | ||||||||
| December 31, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Notes payable (1) | $ | $ | ||||||
| Total Notes payable | ||||||||
| Convertible notes payable, net of discount (2) | ||||||||
| Total notes payable, net of discount of $ | $ | $ | ||||||
On May 1, 2023, the Company amended
its convertible promissory note with Sharing Services Global Corporation (“SHRG”), which is eventually assigned to American
Pacific Bank - DSS wherein SHRG capitalized $222,556 of accrued interest and waived its conversion rights as per the original agreement,
see below. The promissory note is no longer convertible and is included in the chart above with plain notes payable. As of December 31,
2024 and 2023, the outstanding balance for the notes amounted to $
On October 24, 2023 and November
20, 2023, the Company entered into two notes with an investor for an aggregate principal balance of $
During the
fiscal year concluding on December 31, 2021, the Company issued a cumulative total of $
In the second quarter of 2022, one of the notes held by investor MCUS LLC (“MCUS”) was extended by 60 days, until August 1, 2022. As part of the extension agreement, the Company issued shares of common stock to the noteholder. Moreover, the conversion price of the note was reduced to the lower of (i) 50% of the lowest volume weighted average prices for common stock over the 30 trading days leading up to the conversion notice date and (ii) the Closing Price on the Closing Date, capped at $2.25. On August 18, 2022, this note was extended to September 30, 2022, in exchange for shares of common stock and in the fourth quarter of 2022, this note was once again extended, this time until May 31, 2023.
| F-15 |
On July 13, 2022, another note
held by investor Leonite Fund 1, LP (”Leonite”), was extended to September 1, 2022, in exchange for warrants,
common stock shares, and an increased principal amount of $
Throughout the third and fourth
quarters of 2022, the Company issued a collective sum of $
In January 2023, the Company
issued upon the conversion of $
On February 28, 2023, the Company
entered into a comprehensive settlement and exchange agreement concerning a Senior Secured Convertible Promissory Note with Leonite. Under
this agreement, Leonite agreed to settle its outstanding liability and cancel its warrants in exchange for common stock shares
of the Company to purchase common stock at $0.05 per share. As the debt was settled, the Company recognized a loss on extinguishment worth
$
On March 27, 2023, the Company
executed an investment agreement with an institutional investor (“Holder”) for up to $
On April 11, 2023, the Company
amended its Promissory Note with MCUS, resulting in the conversion price being fixed at $
Similarly, on May 1, 2023, the
Company amended its convertible promissory note with SHRG, wherein SHRG capitalized $222,556 of accrued interest and waived its conversion
rights as per the original agreement. However, this amendment was contingent upon the Company making a payment of $
| F-16 |
As of December 31, 2024, the
outstanding gross principal balance for the three convertible notes, net of discounts was $
As of December 31, 2023,
the outstanding gross principal balance for the three convertible notes, net of discounts was $
As of December 31, 2022, the outstanding gross principal
balance for the three convertible notes was $
The aggregate balance of convertible notes payable, net
of discount, as of December 31, 2024 and 2023 was $
As of December 31, 2024, the company owed outstanding
principal balance of convertible promissory notes $
Note 7 – Derivative Liabilities
The Company issued debt instruments that consist of the issuance of convertible notes with variable conversion provisions. The conversion terms of the convertible notes are variable based on certain factors, such as the future price of the Company’s common stock, which gives rise to a derivative liability which is a non-cash liability. The number of shares of common stock to be issued is based on the future price of the Company’s common stock. The number of shares of common stock issuable upon conversion of the promissory note is indeterminate. Pursuant to ASC Subtopic 815-15 Embedded Derivatives (“ASC 815-15”), the fair values of the variable conversion options and warrants and shares to be issued were recorded as derivative liabilities on the issuance date and revalued at each reporting period. Based upon ASC 840-15-25, the Company has adopted a sequencing approach regarding the application of ASC 815-40 to its outstanding convertible notes and warrants. Pursuant to the sequencing approach, the Company evaluates its contracts based upon the earliest issuance date.
As of December 31, 2024 and December 31, 2023, the Company had no derivative liabilities outstanding.
Note 8 – Financing Arrangement - Factoring Liability
During the year ended December
31, 2024, the Company entered into various non-recourse agreements for the sale of future receipts for gross proceeds of $
The Company accounts for these
agreements as a financing arrangement, with the purchase price recorded as a liability and daily repayments made are a reduction of the
liability. As of December 31, 2024, there was an outstanding balance of $
| F-17 |
Note 9 – Stockholders’ Deficit
On May 5, 2023, the Company amended its articles of incorporation to increase the number of authorized shares of common stock of the Company to .
Stock issuance for services and stock based compensation
During the year ended December
31, 2024, the Company issued shares of common stock, to officers, employees and vendors for services valued at $
During the years ended December 31, 2024 and 2023, the Company also recognized $ and $, respectively, of expense relating to the vesting of common stock issued to the Company’s Chairman and CEO.
For details of common stock issued in 2023 for services and acquisitions, see the Company’s Form 10-K for the year ended December 31, 2023.
Note 10 – Related Parties
Notes Payable and Accrued Interest – Related Parties
Year Ended December 31, 2024
During the year ended December 31, 2024, the Company entered into the following transactions with related parties:
| · | During the year 2024, John W. Meyer, President and COO of the Company, provided a loan of $ | |
| · | On March 19, 2024, the Company issued shares of common stock to the Chief Financial Officer as stock-based compensation in lieu of cash payments, at a fair value of $0.05 per share, totaling $. | |
| · | On the same date, the Company issued an aggregate of shares of common stock to five directors (1,000,000 each), as stock compensation, at a fair value of $0.05 per share, totaling $. | |
| · | The Company recognized $ in stock compensation expense during the period, related to awards previously granted to its Chairman and CEO, which are being amortized over 82 months. |
Year Ended December 31, 2023
During the year ended December 31, 2023, the Company entered into the following related party transactions:
| · | Issued shares of common stock at $0.05 per share to its Chairman and CEO to settle $ in accrued salary. The Company also amortized $ of previously granted stock compensation to the Chairman and CEO (same 82-month amortization schedule as noted above). | |
| · | Accrued $ | |
| · | Paid $ | |
| · | Issued shares of common stock at $0.05 per share (valued at $ | |
| · | Issued shares of common stock to a board member in settlement of $ |
| F-18 |
Note 11 – Segment and Geographic Information
Operating segments are identified as components of an enterprise about which separate discreet financial information is available for evaluation by the chief operating officer, or chief executive officer, in making decisions on how to allocate resources and assess performance.
The Company is operated and managed geographically, and management evaluates performance and allocates the Company’s resources on a geographic basis. Operating segments’ measure of profitability is based on loss from operations. The accounting policies for the reportable operating segments are the same as for the Company taken as a whole. The Company has three reportable operating segments: North America (including its subsidiaries in United States and Canada), Latin America (including subsidiaries in Mexico and Ecuador) and Asia (including its subsidiaries in Malaysia and Taiwan.).
Information about operating segments is as follows:
| Schedule of information about operating segments | ||||||||
| Year Ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Geographic Net Sales: | ||||||||
| Americas | $ | $ | ||||||
| Latin America | ||||||||
| Asia | ||||||||
| Total Net Sales | $ | $ | ||||||
| Cost of Goods Sold: | ||||||||
| Americas | $ | $ | ||||||
| Latin America | ||||||||
| Asia | ||||||||
| Total Cost of Goods Sold: | $ | $ | ||||||
| Operating Expenses: | ||||||||
| Americas | $ | $ | ||||||
| Latin America | ||||||||
| Asia | ||||||||
| Total Operating Expenses | $ | $ | ||||||
| Loss from operations: | ||||||||
| Americas | $ | ( | ) | $ | ( | ) | ||
| Latin America | ( | ) | ( | ) | ||||
| Asia | ( | ) | ( | ) | ||||
| Total Loss from Operations | $ | ( | ) | $ | ( | ) | ||
| Total Assets by Geographic Location | ||||||||
| Americas | $ | $ | ||||||
| Latin America | ||||||||
| Asia | ||||||||
| Total Assets | $ | $ | ||||||
| F-19 |
Note 12 – Commitments and Contingencies
Legal proceedings
On August 6, 2019, the former CEO (prior to the Company’s bankruptcy proceedings) filed a lawsuit against the Company’s subsidiary, Stemtech HealthSciences Corp., alleging unpaid salary and vacation pay related to a period prior to the current management team assuming control in 2018. The total claim is for approximately $267,000. The Company has filed a counterclaim against the former CEO and considers his claims to be without merit.
As of December 31, 2024
and 2023, the Company has accrued $
Note 13 – Income Taxes
Income taxes are accounted for under the liability method of accounting for income taxes. Under the liability method, future tax liabilities and assets are recognized for the estimated future tax consequences attributable to differences between the amounts reported in the financial statement carrying amounts of assets and liabilities and their respective tax bases. Future tax assets and liabilities are measured using enacted or substantially enacted income tax rates expected to apply when the asset is realized or the liability settled. The effect of a change in income tax rates on future income tax liabilities and assets is recognized in income in the period that the change occurs. Future income tax assets are recognized to the extent that they are considered more likely than not to be realized.
The FASB has issued ASC 740 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. This standard 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.
As a result of the implementation of this standard, the Company performed a review of its material tax positions in accordance with recognition and measurement standards established by ASC 740 and concluded that the tax position of the Company has not met the more-likely-than-not threshold as of December 31, 2024.
| F-20 |
The domestic and foreign components of loss before provision for income taxes were as follows:
| Schedule of domestic and foreign components of income | ||||||||
| Year Ended | Year Ended | |||||||
| December 31, 2024 | December 31, 2023 | |||||||
| Domestic | $ | ( | ) | $ | ( | ) | ||
| Foreign | ( | ) | ( | ) | ||||
| Loss before provision for income taxes | $ | ( | ) | $ | ( | ) | ||
The reconciliation of income tax expense computed at the U.S. federal statutory rate to the income tax provision for the years ended December 31, 2024 and 2023 is as follows:
| Schedule of reconciliation of income tax expense | ||||||||
| Year Ended | Year Ended | |||||||
| December 31, 2024 | December 31, 2023 | |||||||
| Loss before income taxes | $ | ( | ) | $ | ( | ) | ||
| Taxes benefits under statutory US tax rates | ( | ) | ( | ) | ||||
| Increase (decrease) in taxes resulting from: | ||||||||
| Change in valuation allowance | ( | ) | ||||||
| Foreign tax rate differential | ||||||||
| Permanent differences | ||||||||
| State taxes | ( | ) | ( | ) | ||||
| Provision for income taxes | $ | $ | ||||||
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and amounts used for income tax purposes. Significant components of the Company's deferred tax assets and liabilities consist of the following:
| Schedule of deferred taxes | ||||||||
| December 31, 2024 | December 31, 2023 | |||||||
| Deferred tax assets | ||||||||
| Net operating loss carryforwards | $ | $ | ||||||
| Stock based compensation | ||||||||
| Intangibles | ( | ) | ( | ) | ||||
| Depreciation | ( | ) | ( | ) | ||||
| Other | ( | ) | ( | ) | ||||
| Total deferred tax assets | ||||||||
| Valuation allowance | ( | ) | ( | ) | ||||
| Net deferred tax assets (liabilities) | $ | $ | ||||||
At December 31, 2024, the
Company had net operating loss (“NOL”) carryforwards of approximately $
| F-21 |
Note 14 – Subsequent Events
Management of the Company has performed a review of events and transactions occurring after the consolidated balance sheet date to determine if there were any such events or transactions requiring adjustment to or disclosure in the accompanying consolidated financial statements, noting none other than the following:
On November 30, 2024, the Company entered into a Merger Agreement with Seacret Direct, LLC (“Seacret”), a multi-level marketing firm specializing in health and lifestyle products. Pursuant to the agreement, the Company will acquire substantially all assets of Seacret, excluding certain specified assets, in exchange for 13,400,000 Preferred Shares valued at $2.50 per share, each convertible into 10 Common Shares. The closing of the transaction is subject to the completion of an audit of Seacret and other customary closing conditions. This transaction was previously disclosed in a Form 8-K filed on December 6, 2024.
On March 6, 2025, the Company issued an aggregate of 5,000,000 shares of common stock to five directors in recognition of their services. Each director received 1,000,000 shares. The fair value of the shares was $0.04 per share, resulting in total stock-based compensation expense of $150,000.
On March 7, 2025, the Company entered into a merchant cash advance agreement for a principal amount of $140,425. Under the terms of the agreement, the Company is required to make daily repayments of $1,170.20 over a term of 120 business days. The proceeds were used to support short-term working capital needs.
On March 20, 2025, the Company issued a $52,500 convertible promissory note to 1800 Diagonal Lending LLC for proceeds of $43,750. The note bears a one-time 10% interest charge, matures on January 30, 2026, and is repayable in ten monthly installments beginning April 30, 2025. The note includes standard default provisions and is convertible into common stock upon default.
On March 20, 2025, the Company issued another $76,500 promissory note to 1800 Diagonal Lending LLC for proceeds of $63,750. The note includes a one-time 10% interest charge, matures on January 30, 2026, and is repayable in five scheduled installments beginning September 30, 2025. The note includes customary default provisions and may be converted into common stock upon default.
| F-22 |
Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item 9A(T). Controls and Procedures.
| A. | Disclosure Controls and Procedures |
As required by paragraph (b) of Rules 13a-15 or 15d-15 under the Securities Exchange Act of 1934, Stemtech’s principal executive officer and principal financial officer evaluated its disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) for the period covered by this annual report as of its fiscal year end, December 31, 2024. Based on this evaluation, this officer concluded that as of the end of the period, these disclosure controls and procedures were adequate to ensure that the information required to be disclosed by Stemtech in reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and include controls and procedures designed to ensure that such information is accumulated and communicated to management, including Stemtech’s principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.
An evaluation was conducted under the supervision and with the participation of management of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2024. Based on that evaluation, management concluded that Stemtech’s disclosure controls and procedures were adequate as of such date to ensure that information required to be disclosed in the reports that Stemtech files or submits under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. Such officer also confirmed that there was no change in Stemtech’s internal control over financial reporting during the fiscal year that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
| B. | Management’s Report on Internal Control over Financial Reporting |
Management is responsible for establishing and maintaining adequate internal control over Stemtech’s financial reporting. In order to evaluate the effectiveness of internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act, management has conducted an assessment, including testing, using the criteria in the Internal Control - Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).
Stemtech’s system of internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
Based on Stemtech’s evaluation, its Chief Executive Officer and Chief Financial Officer concluded that Stemtech’s internal controls over financial reporting were not effective as of December 31, 2024 and were subject to material weaknesses.
| 9 |
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified the following material weaknesses in Stemtech’s internal control over financial reporting using the criteria established in the COSO:
1. Failing to have an audit committee or other independent committee that is independent of management to assess internal control over financial reporting; and
2. Failing to have a director that qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K.
3. Lack of segregation of duties consistent with control objectives.
4. Insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and applications of US GAAP and SEC disclosure requirements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions and that the degree of compliance with the policies or procedures may deteriorate.
This annual report does not include an attestation report of Stemtech’s independent registered public accounting firm regarding internal control over financial reporting. Stemtech’s internal control over financial reporting was not subject to attestation by Stemtech’s independent registered public accounting firm pursuant to temporary rules of the SEC that permit Stemtech to provide only management’s report in this annual report.
| C. | Changes in Internal Control over Financial Reporting. |
During the year ended December 31, 2024, Stemtech’s internal control over financial reporting was not subject to changes.
Item 9B. Other Information.
During the year ended December
31, 2024, no director or officer
Insider Trading Policies and Procedures
The Company
The policies include restrictions on trading during blackout periods, pre-clearance requirements for certain individuals, and provisions related to Rule 10b5-1 trading plans. The Company monitors compliance with these policies on an ongoing basis.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
None.
| 10 |
PART III
Item 10. Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(A) of the Exchange Act.
The following individuals serves as Directors and Executive Officers of the Company as of the date of this Annual Report. Directors of the Company hold office until the next annual meeting of our shareholders or until their successors have been elected and qualified. Executive officers of the Company are appointed by our board of directors and hold office until their death, resignation or removal from office.
| Name | Position | Age | Held Position Since | |||
| John W. Meyer | Director, President & COO | 71 | August 19, 2021 | |||
| Charles S. Arnold | Director, CEO | 74 | August 19, 2021 | |||
| John Thatch | Director | 61 | September 17, 2021 | |||
| Benjamin Kaplan | Director | 58 | September 17, 2021 | |||
| Darryl V. Green | Director | 60 | September 17, 2021 | |||
| Srilakshmi Vadlapatla | CFO | 40 | December 15, 2024 |
Mr. Charles Arnold, Mr. Arnold’s ability to integrate marketing concepts and financial strategies play a pivotal role in the development of his clients’ businesses. In addition to developing start-up companies, he is responsible for placing more than $1 Billion into public and private companies with as much as $400 Million in a single transaction. Significant mergers and acquisitions have been accomplished through his network of financial specialists and professionals throughout the world. In 1993, Mr. Arnold was one of the original investors in pre-paid legal “PPD” (now Legal Shield). In 2001 he was engaged by National Health “LEXXUS”, and the company grew from under $1.00 to over $40 and traded on the American stock exchange. Mr. Arnold feels that the direct sales marketing industry is an underserved market that deserves investors’ attention. Mr. Arnold believes that Stemtech has exceptional growth potential and sees this company’s bright future with innovative stem cell nutrition products and the business opportunity for our Independent Business Partners.
Mr. John W. Meyer. With over 45 years’ business experience in logistics and management of projects, supply chain and staff, Mr. Meyer oversees operations for Stemtech’s global company. In fifteen years with Stemtech, he has supported openings of 51 national markets, serving as VP of Global Operations prior to his position as COO in 2016 and as President and COO since October 2021. Mr. Meyer is responsible for global management of the Company, including operations, inventory management, purchasing, transportation, as well as for global Human Resources, Partner Services, Training, Information Technology, global facilities and for global manufacturing of nutraceuticals, cosmetics, oral healthcare, ECO products and any new product development and quality assurance. He also is the executive sponsor and leader of the Life Sciences Advisory Board, the Field Advisory Board and the Business Advisory Board. Mr. Meyer graduated from the University of San Francisco with B.A. and M.A. degrees. He previously worked at Shaklee, Arbonne, and third-party logistics provider Menlo Worldwide – now a part of XPO Logistics.
John “JT” Thatch, serves as Chief Executive Officer and Vice Chairman of Sharing Services Global Corporation a publicly traded company with over $100M in annual revenues. Mr. Thatch is an accomplished executive who has successfully started and operated businesses in various industries that include service companies, retail, wholesale, on-line learning, finance, real estate management and technology. From 2009 to 2016, Mr. Thatch served as Chief Executive Officer of Universal Education Group, in 2016 Mr. Thatch created Superior Wine and Spirits, LLC, a Florida-based wholesale distributor of wine and spirits. Prior to 2005, Mr. Thatch served as CEO of Orbital Energy Group, Inc. (“OEG”), a NASDAQ-listed company formerly known as OnScreen Technologies, Inc. Mr. Thatch currently serves on the board of directors of several other companies and is the lead independent director of Document Security Systems, Inc. (“DSS”), a NYSE listed company and is a current member of NACD.
Benjamin Kaplan has been a successful entrepreneur and investor for over 20 years, with a particular focus on health, wellness and pharmaceutical companies. He currently serves as the CEO of Ehave, Inc., a leader in digital therapeutics delivering evidence-based therapeutic interventions to patients.
Darryl V. Green is Founder and President of DVG Ventures & DVG Nutrition since 2014. He specializes in health and nutrition businesses and is a franchise strategist. For over 30 years, from 1983 – 2014, Mr. Green was with GNC Nutrition which included 20 years of corporate and franchise executive positions and over 10 years of various field positions encompassing all facets of retail operations across the United States.
| 11 |
All directors serve for terms of one year each and are subject to re-election at Annual Meeting of Shareholders, unless they earlier resign.
There are no material proceedings to which any of our directors, officers or affiliates, any owner of record or beneficially of more than five percent of any class of our voting securities, or any associate of any such director, officer, affiliate, or security holder is a party adverse to us or any of our subsidiaries or has a material interest adverse to us or any of our subsidiaries.
We have attempted and will continue to attempt to ensure that any transactions between we and our officers, directors, principal shareholders, or other affiliates have been and will be on terms no less favorable to us than could be obtained from unaffiliated third parties on an arm’s length basis.
Involvement in Certain Legal Proceedings
Except as noted herein or below, during the last ten (10) years none of our directors or officers have:
(1) had any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
(2) been convicted in a criminal proceeding or subject to a pending criminal proceeding;
(3) been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or
(4) been found by a court of competent jurisdiction in a civil action, the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.
All of these filing requirements were satisfied by the Company’s officers, directors, and ten-percent holders.
In making these statements, we have relied on the written representation of our Directors and Officers or copies of the reports that they have filed with the Commission.
(b) Identify Significant Employees
Charles S. Arnold, Chief Executive Officer – Mr. Arnold is dedicated full-time to Stemtech Corporation and plays a key role in strategic oversight and corporate direction. He also serves on the boards of other companies. Mr. Arnold does not receive a cash salary; instead, his compensation is provided in the form of shares of the Company’s common stock or debt instruments.
John W. Meyer, President and Chief Operating Officer – Mr. Meyer devotes his full time to the business operations of the Company and is responsible for the day-to-day execution of corporate strategy and operations management.
Srilakshmi Vadlapatla, Chief Financial Officer – Mrs. Vadlapatla also devotes her full time to the Company. She oversees the Company’s financial planning, reporting, and regulatory compliance functions.
| 12 |
(c) Family Relationships
There are no family relationships among the directors, executive officers or persons nominated or chosen by our company to become directors or executive officers.
(d) Involvement in Certain Legal Proceedings
During the past 10 years, no Director, officer, or promoter of Stemtech has been:
| · | a general partner or executive officer of any business against which any bankruptcy petition was filed, either at the time of the bankruptcy or two years prior to that time; | |
| · | convicted in a criminal proceeding or named subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); | |
| · | subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; | |
| · | subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity, or to be associated with persons engaged in any such activity; | |
| · | found by a court of competent jurisdiction in a civil action or by the SEC to have violated any Federal or State securities law, and the judgment in such civil action or finding by the SEC has not been subsequently reversed, suspended, or vacated; | |
| · | found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated; | |
| · | the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of: | |
| any Federal or State securities or commodities law or regulation; or |
| · | any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or | |
| · | any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or |
| · | the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization, any registered entity, or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. |
| 13 |
(f) Nomination Procedure for Directors
Stemtech does not have a standing nominating committee; recommendations for candidates to stand for election as directors are made by the board of directors. Stemtech has not adopted a policy that permits shareholders to recommend candidates for election as directors or a process for shareholders to send communications to the board of directors.
(g) Audit Committee Financial Expert
Stemtech has no financial expert. Management believes the cost related to retaining a financial expert at this time is prohibitive. Stemtech’s Board of Directors has determined that it does not presently need an audit committee financial expert on the Board of Directors to carry out the duties of the Audit Committee. Stemtech’s Board of Directors has determined that the cost of hiring a financial expert to act as a director of Stemtech and to be a member of the Audit Committee or otherwise perform Audit Committee functions outweighs the benefits of having a financial expert on the Audit Committee.
(h) Identification of Audit Committee
Stemtech does not have a separately designated standing audit committee. Rather, Stemtech’s entire board of directors perform the required functions of an audit committee. Currently, John W. Meyer our President and COO and Charles S. Arnold, our CEO are the only members of Stemtech’s audit committee, but they do not meet Stemtech’s independent requirements for an audit committee member. See “Item 13. (c) Director independence” below for more information on independence.
(i) Code of Ethics
Stemtech has adopted a financial code of ethics that applies to all its executive officers and employees, including its CEO and CFO. See Exhibit 14 – Code of Ethics for more information. Stemtech undertakes to provide any person with a copy of its financial code of ethics free of charge. Please contact Stemtech at (954) 715-6000 to request a copy of Stemtech’s financial code of ethics. Management believes Stemtech’s financial code of ethics is reasonably designed to deter wrongdoing and promote honest and ethical conduct; provide full, fair, accurate, timely and understandable disclosure in public reports; comply with applicable laws; ensure prompt internal reporting of code violations; and provide accountability for adherence to the code.
Item 11. Executive Compensation
We do not grant equity awards in anticipation of the release of material nonpublic information that is likely to result in changes to the price of our common stock, and we do not time the public release of such information based on award grant dates. During the last completed fiscal year, we did not grant any equity awards to a named executive officer or director within the period beginning four business days before and ending one business day after the filing of a periodic report on Form 10-Q or Form 10-K, or the filing or furnishing of a current report on Form 8-K. Further, we have not timed the disclosure of material nonpublic information for the purpose of affecting the value of executive compensation.
The following table sets forth the compensation paid to our officers for the years ended December 31, 2024 and 2023. This information includes the dollar value of base salaries, bonus awards and number of stock options granted, and certain other compensation, if any. The compensation discussed addresses all compensation awarded to, earned by, or paid to named executive officers.
Summary Compensation Table
| Stock | All Other | |||||||||||||||||||||||
| Name and Principal Position | Year | Salary | Bonus | Awards | Compensation | Total | ||||||||||||||||||
| Charles S. Arnold | 2024 | $ | 250,000 | $ | – | 440,256 | $ | – | $ | 690,256 | ||||||||||||||
| Director, CEO | 2023 | $ | 250,000 | $ | – | 439,054 | $ | – | $ | 689,054 | ||||||||||||||
| John W. Meyer | 2024 | $ | 120,000 | $ | – | – | $ | – | $ | 120,000 | ||||||||||||||
| President & COO | 2023 | $ | 120,000 | $ | – | – | $ | – | $ | 229,526 | ||||||||||||||
| James S Cardwell | 2024 | $ | 22,500 | $ | – | – | $ | – | $ | 22,500 | ||||||||||||||
| Former CFO | 2023 | $ | 22,500 | $ | – | $ | – | $ | 22,500 | |||||||||||||||
| Srilakshmi Vadlapatla, CFO | 2024 | $ | 2,500 | $ | – | – | $ | – | $ | 2,500 | ||||||||||||||
There are no stock option plans, retirement, pension, or profit-sharing plans for the benefit of Stemtech’s officers and directors.
| 14 |
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The table below sets forth information regarding the beneficial ownership of our common stock by (i) our directors and named executive officers (including persons who served as principal executive officer and principal financial officer during a portion of the fiscal year ended December 31, 2024) and all the named executives and directors as a group and (ii) any other person or group that to our knowledge beneficially owns more than five percent of our outstanding shares of common stock.
The information contained in this table is as of April 15, 2025. At that date, we had 142,443,444 shares of common stock outstanding.
A person is deemed to be a beneficial owner of shares if he has the power to vote or dispose of the shares. This power can be exclusive or shared, direct or indirect. In addition, a person is considered by SEC rules to beneficially own shares underlying options or warrants that are presently exercisable or that will become exercisable within sixty (60) days.
| Name of Beneficial Owner and address (1) | Amount and Nature of Beneficial Ownership | Percent of Ownership | ||||||
| Named Executives and Directors | ||||||||
| Charles Arnold (2) | 18,240,016 | 15.7% | ||||||
| John W. Meyer | 1,644,302 | 1.5% | ||||||
| John Thatch (3) | 2,854,173 | 2.5% | ||||||
| Darryl V Green | 8,605,573 | 7.4% | ||||||
| Benjamin Kaplan (4) | 4,678,680 | 4.1% | ||||||
| All directors and Named Executive Officers as a group (5 persons) | 37,422,745 | 31.7% | ||||||
| Over 5% Shareholders | ||||||||
| Leviston Resources, LLC (6) | 12,875,748 | 9.9% | ||||||
| Over 5% Shareholders | 19,414,496 | 15.5% | ||||||
| * | Less than 1%. | |
| (1) | Addresses for all officers and directors are 4851 Tamiami Traill North, Suite 200, Naples, FL 34103. | |
| (2) | Includes 1,765,090 indirect shares owned through a related party held by Crest Ventures LLC. | |
| (3) | Includes shares underlying vested warrants of 1,400,00 issued by the Company and 154,173 indirect shares owned through a related party held by American Pacific Bancorp (DSS). | |
| (4) | Includes shares 2,198,905 indirect shares owned through a related party held by Long Side Ventures LLC and 104,185 indirect shares owned by Triple Crown Consulting Inc. | |
| (5) | Includes shares underlying vested warrants of 12,875,748 issued by the Company. |
Changes in Control
None.
| 15 |
Item 13. Certain Relationships and Related Transactions. Director Independence
Stemtech’s board of directors currently consists of John W. Meyer our President and COO, Charles S. Arnold, our CEO, John Thatch, Benjamin Kaplan and Darryl V. Green. Pursuant to Item 407(a)(1)(ii) of Regulation S-K of the Securities Act, Stemtech’s board of directors has adopted the definition of “independent director” as set forth in Rule 4200(a)(15) of the NASDAQ Manual. In summary, an “independent director” means a person other than an executive officer or employee of Stemtech or any other individual having a relationship which, in the opinion of Stemtech’s board of directors, would interfere with the exercise of independent judgement in carrying out the responsibilities of a director, and includes any director who accepted any compensation from Stemtech in excess of $200,000 during any period of 12 consecutive months with the three past fiscal years. Also, the ownership of Stemtech’s stock will not preclude a director from being independent.
In applying this definition, Stemtech’s board of directors has determined that neither Messrs. Meyer nor Arnold qualifies as an “independent director” pursuant to the same rule.
As of the date of the report, Stemtech did not maintain a separately designated compensation or nominating committee.
Stemtech has also adopted this definition for the independence of the members of its audit committee. John W. Meyer our President &COO and Charles S. Arnold, our CEO are the sole members of Stemtech’s audit committee as a result of being the sole director. Stemtech’s board of directors has determined that neither Messrs. Meyer nor Arnold qualifies “independent” for purposes of Rule 4200(a)(15) of the NASDAQ Manual, applicable to audit, compensation and nominating committee members, and is “independent” for purposes of Section 10A(m)(3) of the Securities Exchange Act.
Item 14. Principal Accountant Fees and Services. Audit Fees
For the years ended December 31, 2024 and 2023, the aggregate fees billed by Bush & Associates, CPA were $47,500 and $60,000 respectively, plus any out-of-pocket costs.
We do not use Bush & Associates, CPA for financial information system design and implementation. These services, which include designing or implementing a system that aggregates source data underlying the consolidated financial statements or generates information that is significant to our consolidated financial statements, are provided internally or by other service providers. We do not engage Bush & Associates CPA. to provide compliance outsourcing services.
Effective May 6, 2003, the SEC adopted rules which require that before Bush & Associates CPA. is engaged by us to render any auditing or permitted non-audit related service, the engagement be:
| · | approved by our board of directors who are capable of analyzing and evaluating financial information; or | |
| · | entered into pursuant to pre-approval policies and procedures established by the board of directors, provided the policies and procedures are detailed as to the particular service, the board of directors is informed of each service, and such policies and procedures do not include delegation of the board of directors’ responsibilities to management. |
The board of directors pre-approves all services provided by our independent auditors. All of the above services and fees were reviewed and approved by the board of directors either before or after the respective services were rendered.
| 16 |
PART IV
Item 15. Exhibits and Financial Statement Schedules.
(a)(1) Financial Statements.
The following consolidated financial statements of Stemtech Corporation are included in Item 8 of this Annual Report on Form 10-K:
| · | Report of Independent Registered Public Accounting Firm | |
| · | Consolidated Balance Sheets as of December 31, 2024 and 2023 | |
| · | Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2024 and 2023 | |
| · | Consolidated Statements of Changes in Stockholders’ Deficit for the years ended December 31, 2024 and 2023 | |
| · | Consolidated Statements of Cash Flows for the years ended December 31, 2024 and 2023 | |
| · | Notes to Consolidated Financial Statements |
(a)(2) Financial Statement Schedules.
All schedules for which provision is made in Regulation S-X are either not required, not applicable, or the required information is included
in the footnotes to the financial statements and therefore have been omitted from this Item 15.
(a)(3) Exhibits.
The exhibits listed below are filed as part of, or incorporated by reference into, this Annual Report on Form 10-K:
| · | Exhibit 31.1 | Certification by the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| · | Exhibit 31.2 | Certification by the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| · | Exhibit 32.1 | Certification by the Principal Executive Officer pursuant to 18 U.S.C. 1350 (Section 906) | |
| · | Exhibit 32.2 | Certification by the Principal Financial Officer pursuant to 18 U.S.C. 1350 (Section 906) | |
| · | Exhibit 101 | Financial statements from the annual report on Form 10-K of Stemtech for the fiscal year ended December 31, 2023, formatted in XBRL: (i) the Audited Balance Sheets, (ii) the Audited Statements of Operations; (iii) the Audited Statements of Stockholders’ Deficit and Comprehensive Income, and (iv) the Audited Statements of Cash Flows. |
| 17 |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Stemtech Corporation | ||
| Date: June 30, 2025 | By: | /s/ Charles S. Arnold |
| Charles S. Arnold | ||
| Title: |
Chief Executive Officer (Principal Executive Officer) | |
| Date: June 30, 2025 | By: | /s/ Srilakshmi Vadlapatla |
| Srilakshmi Vadlapatla | ||
| Title: |
Chief Financial Officer (Principal Financial Officer) | |
| 18 |
Exhibit 31.1
STEMTECH CORPORATION
CERTIFICATIONS PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
CERTIFICATION
I, Charles Arnold, certify that:
| 1. | I have reviewed this annual report on Form 10-K for the fiscal year ending December 31, 2024 of Stemtech Corporation; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: June 30, 2025
/s/ Charles S. Arnold
Charles S. Arnold
Chief Executive Officer
Exhibit 31.2
STEMTECH CORPORATION
CERTIFICATIONS PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
CERTIFICATION
I, Srilakshmi Vadlapatla, certify that:
| 1. | I have reviewed this annual report on Form 10-K for the fiscal year ending December 31, 2024 of Stemtech Corporation; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: June 30, 2025
/s/ Srilakshmi V.
Srilakshmi Vadlapatla
Chief Financial Officer
Exhibit 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Stemtech Corporation (the “Company”) on Form 10-K for the period ending December 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Charles Arnold, Chief Executive Officer of the Company and a member of the Board of Directors, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Charles S. Arnold
Charles S. Arnold
Chief Executive Officer
June 30, 2025
Exhibit 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Stemtech Corporation (the “Company”) on Form 10-K for the period ending December 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Srilakshmi Vadlapatla, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Srilakshmi V.
Srilakshmi. Vadlapatla
Chief Financial Officer
June 30, 2025