ZEOX 10-K
Zeo ScientifiX, Inc. (ZEOX)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
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As of January 28, 2026, there were shares of common stock, $0.001 par value per share, issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE:
TABLE OF CONTENTS
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FORWARD LOOKING STATEMENTS
This Annual Report on Form 10-K (this “Annual Report”) and certain information incorporated herein by reference contain forward-looking statements and information within the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). This information includes assumptions made by, and information currently available to management, including statements regarding future economic performance and financial condition, liquidity and capital resources, acceptance of our products by the market, and management’s plans and objectives. In addition, certain statements included in this and our future filings with the Securities and Exchange Commission (the “SEC”), in press releases, and in oral and written statements made by us or with our approval, which are not statements of historical fact, are forward-looking statements. Words such as “may,” “could,” “should,” “would,” “believe,” “expect,” “expectation,” “anticipate,” “estimate,” “intend,” “seeks,” “plan,” “project,” “continue,” “predict,” “will,” “should,” and other words or expressions of similar meaning are intended by us to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements are found at various places throughout this Annual Report and in the documents incorporated herein by reference. These statements are based on our current expectations about future events or results and information that is currently available to us, involve assumptions, risks, and uncertainties, and speak only as of the date on which such statements are made.
Forward-looking statements include, but are not limited to, the following:
| ● | Our products’ advantages; |
| ● | Expectations regarding our future growth; |
| ● | Expectations regarding available cash resources to fund current operations and future growth; |
| ● | Our ability to comply with regulations governing the production and sale of our products; |
| ● | Our ability to receive regulatory approvals; |
| ● | Market opportunities for our services and products; |
| ● | Clinical trial outcomes; |
| ● | Our ability to compete effectively; |
| ● | Our ability to respond to market forces; and |
| ● | Our ability to protect our intellectual property. |
Actual results and outcomes may differ materially from those expressed or implied in these forward-looking statements. Factors that may cause such a difference include, but are not limited to, those discussed in Part I, Item 1A. Risk Factors, below. Except as expressly required by the federal securities laws, we undertake no obligation to update any such factors, or to publicly announce the results of, or changes to any of the forward-looking statements contained herein to reflect future events, developments, changed circumstances, or for any other reason.
Various trademarks, service marks, trade names and logos of the Company appear in this Annual Report and are the property of Zeo. Other trademarks, service marks or trade names appearing in this Annual Report are the property of their respective holders. Solely for convenience, trademarks, service marks, trade names and logos referred to in this Annual Report may appear without the ®, ™ and ℠ symbols, but those references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or that the applicable owner will not assert its rights, to these trademarks, trade names, service marks and logos.
Unless otherwise noted, as used in this Annual Report, the terms “Zeo,” the “Company,” “we,” “our” and “us” refer to Zeo ScientifiX, Inc., a Nevada corporation, and its subsidiaries consolidated as a combined entity.
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PART I
Item 1. Business.
Overview
We are a clinical-stage biopharmaceutical company principally focusing on the development of innovative biological therapeutics for the treatment of degenerative diseases and regenerative medicine.
The Company has a portfolio of proprietary products derived from ethically sourced birth tissue, including mesenchymal stem cells, stem cell and amniotic fluid derived exosomes and Whartons Jelly matrix. The Company’s principal product is Zofin™, a product derived from amniotic fluid and manufactured to retain the naturally occurring extracellular vesicles, proteins and cell secreted nanoparticles. ZEO also manufactures Patient Pure X™ (“PPX™”), a proprietary autologous biologic containing a nanoparticle fraction that is precipitated from a patient’s own peripheral blood. ZEO’s products are all manufactured in FDA-registered, cGMP-compliant laboratory facilities. Our portfolio of products (“RAAM Products”) and related services are principally used in the health care industry administered through doctors and clinics (“Providers”).
The state of Florida enacted a new “stem cell therapy” law, effective July 1, 2025 (“SB 1768”). The legislation authorizes licensed physicians to administer non-FDA-approved stem cell and other human tissue-derived therapies for orthopedic, wound care, and pain management indications. It mandates compliance with cGMP and prohibits the use of stem cells derived from aborted fetuses, promoting ethically sourced materials such as adult stem cells and umbilical cord blood. SB 1768 also requires informed patient consent and disclosure that treatments are not FDA-approved.
Zeo expects that SB 1768 will create substantial new demand for current and future stem cell therapy products by: (i) meeting existing physician and patient interest in regenerative therapies, (ii) increasing awareness of the availability and potential efficacy of stem cell therapy treatments, and (iii) attracting medical tourists who previously sought stem cell therapy treatments abroad but can now access comparable procedures in Florida under higher regulatory standards and at lower cost. Accordingly, the Company has begun to pursue clinical research and commercial sales strategies that are compliant with SB 1768.
By enabling physicians to adopt Zeo’s products for approved indications in Florida, the Company anticipates significant revenue growth and faster advancement of its clinical trial objectives at reduced cost. ZEO expects to further distinguish itself through leadership in research, quality, safety, and regulatory compliance for biologics. The new law also allows Zeo to collect real-world safety and outcome data from providers—data that previously could only be obtained through FDA Investigational New Drug (IND) applications or Institutional Review Board (IRB)-approved studies. Access to this data is expected to lower risks associated with the Company’s future FDA submissions for product approvals.
While prioritizing the anticipated growth of Florida’s stem cell market, Zeo continues to advance its research programs, including clinical studies, product development, and ongoing quality and compliance initiatives. The Company recently launched an IRB-approved clinical study titled “Open-Label Prospective Longitudinal Clinical Trial to Evaluate the Safety and Potential Efficacy of PPX™ in Patients Suffering from Musculoskeletal Joint Pathologies Using Real-World Data to Monitor Patient Outcomes.” The study will enroll up to 350 patients, with five clinics already participating and seven patients enrolled to date.
In addition to the Company’s efforts to develop, manufacture and market products that are compliant with SB 1768, the Company has recently developed and begun to distribute additional products that incorporate its proprietary ingredients for products to be used in topical aesthetic applications and is actively exploring further development of additional products to be used in other topical aesthetic applications.
ZEO operates an extracellular vesicle processing laboratory in Davie, Florida for the purpose of performing research and development and the manufacturing and processing of the anti-aging and cellular therapy derived products that we sell and distribute to our customers.
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To date, the Company has obtained certain Investigational New Drug (“IND”), emergency IND (“eIND”) approvals from the FDA, including applicable Institutional Review Board (“IRB”) approvals which authorized the Company to commence clinical trials or treatments in connection with the use of Zofin™ and related treatment protocols. The Company is pursuing efforts to complete its already approved clinical studies as well as obtaining approval to commence additional studies for other specific indications it has identified that the use of its products will provide more favorable and desired health related benefits for patients seeking alternative treatment options than are currently available. The ability of the Company to succeed in these efforts is subject to among other things, the Company having sufficient available working capital to fund the substantial costs of completing clinical trials, which the Company currently does not have, and ultimately, obtaining approval from the FDA.
Current FDA guidance requires that the sale of products that fall under Section 351 of the Public Health Services Act pertaining to marketing traditional biologics and human cells, tissues and cellular and tissue-based products (“HCT/Ps”) can only be sold pursuant to an approved biologics license application (“BLA”).
We have not obtained any opinion or ruling regarding the Company’s operations and whether the processing, sales and distribution of the products we currently supply and/or produce would be subject to the FDA’s previously announced intended enforcement policies regarding HCT/P’s or fall within SB 1768 that permits the use and sale of certain stem cell therapies and products that would otherwise be restricted under current FDA regulations. However, we believe that our products are compliant and fall within the respective guidelines and intend to vigorously defend against any adverse interpretation by the FDA and/or the state of Florida on the classification of our products that may be deemed as not being compliant under currently defined regulations, if any. Notwithstanding the foregoing, we are undertaking efforts on an ongoing basis to mitigate any potential risks associated with an adverse ruling by the FDA and the subsequent limitations on our ability to continue to generate revenues from the sale of our products in the United States until the Company obtains the required licenses. The efforts include continuing with clinical trials, expanding sales internationally and developing new product offerings and/or designations of products that would not fall under these regulations.
Fiscal 2025 Developments
BioXtek Joint Venture
On February 4, 2025, the Company entered into a Binding Memorandum of Understanding (the “Binding MOU”) with BioXtek, LLC, a Florida limited liability company (“BioXtek”) setting forth the terms of a joint development, manufacturing, marketing and funding arrangement to be entered into by the Company and BioXtek in various phases (the “BioXtek Joint Venture”). BioXtek is a privately-held Florida-based company engaged in the development, manufacturing and marketing of biologic regenerative therapeutics.
The Company and BioXtek failed to execute and deliver the required series of definitive agreements documenting the BioXtek Joint Venture, including the mutual agreement to modify certain terms as set forth in the Binding MOU with respect to the Company relocating its operations to BioXtek’s Pompano Beach, Florida manufacturing facility and the structure of how the parties will collaborate in future clinical trials and the sale of products that were intended to be sold pursuant to the BioXtek Joint Venture.
In June 2025, BioXtek sought to terminate the Binding MOU and the BioXtek Joint Venture for alleged breaches by the Company, which the Company contested. As the Company and BioXtek were not able to amicably resolve the dispute, on December 17, 2025, the Company commenced an action against BioXtek in Broward County Circuit Court (and an amended Complaint on January 5, 2026), asserting claims for breach of contract and implied covenant, fraudulent inducement, violation of the Florida Deceptive Unfair Trade Practices Act, equitable accounting, and declaratory judgment.
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BioLumina Acquisition
On June 25, 2025, the Company acquired all the outstanding limited liability company interests of BioLumina, LLC (“BIO”), a Delaware limited liability company, from its members. BioLumina was engaged in the sale and distribution of topical aesthetic products. The Company acquired BIO for the purpose of obtaining the finished goods inventory on hand and certain trademarks applications that were pending review and approval.
Exotropin Sales Representative Agreement
In August 2024, the Company entered into a sales representative agreement (the “Sales Agreement”) with Exotropin, LLC (“Exotropin”), a privately held formulator of skin care products, in which the Company had previously made a minority investment. The investment in Exotropin was made with and the Sales Agreement was entered into with Exotropin with a view to collaborating on the development of products for the aesthetics market combining Exotropin’s skin care expertise and the Company’s proprietary technology. In November 2024, The Company announced the launch of its initial collaborative product with Exotropin. On August 15, 2025, the Company terminated the Sales Agreement for cause.
Exotropin filed a complaint against the Company for declaratory judgment on August 29, 2025, concerning the Sales Agreement, seeking declarations related to termination and the survival/enforceability of certain restrictive and other clauses. On November 6, 2025, the Company moved to dismiss Exotropin’s complaint and to strike the jury demand pursuant to the agreement’s jury waiver. The Company filed counterclaims on November 17, 2025, alleging, among other things, unjust enrichment tied to diverted sales, tortious interference with business relationships, and seeking imposition of a constructive trust, as well as recovery of attorneys’ fees and costs, with rights reserved to amend and supplement. On January 7, 2026, Exotropin filed a First Amended Complaint adding claims for breach of contract and breach of fiduciary duty and seeking injunctive and monetary relief.
Strategic Partnership with Cytora and Made Scientific
On January 7, 2026, the Company announced that it had entered into a comprehensive strategic partnership with Cytora Therapeutics Ltd. (“Cytora”), a clinical-stage biotechnology company based in Israel developing allogeneic stem cell therapies and Made Scientific, Inc. (“Made Scientific”), a leading U.S.-based cell therapy contract development and manufacturing organization (“CDMO”), seeking to advance and commercialize Cytora’s novel allogeneic, off- the- shelf, human oral mucosal stem cell therapy in the United States. The partnership objectives will be the commercialization of the Cytora novel therapeutic through available avenues that have opened up under SB 1768 for the treatment of wound care, pain, and orthopedic conditions and the parallel commencement of U.S. FDA Phase 2b clinical trials for the therapeutic towards the goal of obtaining an approved FDA license.
Under this multi-party collaboration, Cytora will provide the right to manufacture Cytora’s product, while continuing clinical and regulatory development, Made Scientific will serve as the exclusive U.S. manufacturing partner, cGMP manufacture, and quality control release testing of starting tissue-derived cell banks and final drug product from its state-of-the-art Princeton, New Jersey facility, and Zeo will serve as the exclusive U.S. commercial partner, providing market access, distribution infrastructure, and clinical site management.
The parties are currently in the process of preparing the various definitive agreements associated with the collaboration.
Corporate Information
The Company was incorporated in the state of Nevada on August 9, 2011, under the name “Bespoke Tricycles Inc.,” changed its name to “Biotech Products Services and Research, Inc.” effective November 4, 2015, to “Organicell Regenerative Medicine, Inc.” effective June 20, 2018 and assumed its current name of “Zeo ScientifiX, Inc.” effective February 20, 2024.
Our executive offices are located at 3321 College Avenue, Suite 246, Davie, Florida and our telephone number is (888) 963-7881. Our corporate website is www.zeoscientifix.com.. Information appearing on our website is not part of this Annual Report.
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Industry Overview
The traditional health care industry in the United States is predominantly controlled by the rules of the Centers for Medicare & Medicaid Services (“CMS”) (www.cms.gov) and commercial health insurance companies with respect to payor coverage for medical diagnostics and therapies. This control of coverage currently limits patients’ access to alternative medical therapies, although emerging medical research demonstrates highly beneficial outcomes in the field of anti-aging and regenerative medicine. Traditional allopathic medicine of health care provided to patients in the United States relies on government and commercial health insurance for payment of the costs associated with their day-to-day health care. Because of this close relationship, physicians must follow government and commercial insurers guidelines in order to receive reimbursement for most services. In addition, physicians may be hesitant to adopt new treatments because of perceived legal ramifications and/or lack of knowledge concerning recent research supporting the use of cutting-edge anti-aging and regenerative medical treatments. In addition, many physicians provide alternative therapies that are not yet covered by payors in a “private-pay” or concierge medicine model.
Despite the above, anecdotal and medical literature has shown an increased demand by patients for access to alternative medical therapies and treatments. Patients are seeking these alternatives to traditional allopathic medicine, due to the adverse events associated with traditional pharmaceuticals, risks associated with surgeries, and that traditional medicine and insurers are not addressing wellness or preventive medicine sufficiently. To address a wide variety of common and debilitating conditions related to aging, the Company is developing safer alternatives to traditional therapies, leveraging the latest regenerative technologies. As described above, these alternative therapies face significant restrictions because of regulations imposed by the FDA, other regulatory bodies and insurers due to lack of a sufficient body of randomized controlled studies. Nonetheless, many published case series and some randomized trials demonstrate the safety and efficacy of regenerative therapies, and payor coverage may expand as the body of supportive research grows. Notwithstanding these current dynamics, patients and consumers are looking to safe alternatives compared to more traditional medicine, including the following:
| ● | Cellular/ Tissue based therapies |
| ○ | Mesenchymal stromal/stem cells (MSCs) |
| ○ | Hematopoietic stem cells (HSCs) |
| ○ | Adipose-derived stromal vascular fraction |
| ○ | Bone marrow concentrates |
| ○ | Peripheral blood derived therapies (i.e., platelet rich plasma, PPX) |
| ○ | Perinatal derived -based therapies (amniotic membrane, placental tissue, extracellular vesicles, umbilical cord tissue or blood) |
| ■ | Technology documented since 1910 for safety and efficacy, tissue processed from human amniotic membrane and fluid, donated by consenting mothers delivering a full-term healthy baby by scheduled Caesarean section, avoiding any ethical or moral concerns, proven safety record, case series documented success in a multitude of systemic and local pathologies |
| ○ | Secretome based therapies, Growth factor, cytokine therapies |
| ● | Anti-Aging |
| ○ | Supplements |
| ■ | Vitamin |
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| ■ | Mineral |
| ■ | Medical foods |
| ○ | Peptides |
| ○ | Topical lotions and creams for the largest organ the skin |
| ● | Nontraditional medical alternatives |
| ○ | Acupuncture |
| ○ | Naturopathic |
| ○ | Chiropractic |
| ● | Self-directed |
| ○ | Meditation |
| ○ | Yoga |
| ○ | Tai Chi |
Currently, patients who desire alternative treatments rely on the following options:
| ● | Medical Tourism |
| ○ | In United States |
| ○ | Off-shore United States |
| ■ | Central and South America |
| ■ | Caribbean |
| ■ | Europe |
| ● | Consulting directly with physicians knowledgeable in providing regenerative medical services |
| ● | Unlicensed life coaches |
Current Business Strategy
Our current business strategy is to achieve the following goals and milestones:
| 1. | Perform ongoing research and data gathering to support publishing peer-reviewed outcomes and additional support for safety and efficacy of ZEO’s products. ZEO intends to achieve this through: |
| a. | Continued IND and IRB related clinical trials with large clinics and institutions, |
| b. | The ability to advance clinical research by leveraging data collected from providers that treat specific indications from biologics legally sold in Florida under SB 1768 (and potentially other states in the future that adopt similar legislation) which previously could only previously be done through an FDA approved IND or IRB. Collecting safety and outcome data in real time will ultimately reduce the costs (time and $$) and risks to pursue a desired FDA approval for an indication(s), |
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| c. | Seek accelerated approval and reimbursement where available for each product application in accordance with existing regulatory guidelines, including 21st Century Cures Act (“Cures Act”) and/or through the granting of an FDA-approved biologics application (“BLA”). |
| 2. | Identify and consummate strategic relationships and acquisition targets that would enhance and/or accelerate the growth of the Company such as (a) existing raw material and/or medical device suppliers or owners of advanced and proven intellectual property associated with manufacturing and/or supplying existing and/or additional desired RAAM products; (b) Providers that specialize in RAAM products; and/or (c) companies that market and distribute RAAM products. |
| 3. | Development / supply of new products and services to support Providers; |
| a. | Expand current products to target specific indications that comply with SB 1768 (Pain, Wound Care, Orthopedics), |
| b. | Identify alternative products and services to (a) offset any potential decline in revenues resulting from FDA limitations on the sales and distribution of our existing products currently being sold and distributed and/or future expected FDA restrictions on RAAM products; and (b) provide our Providers with alternative product and treatment options to remain competitive with the market and our Providers to meet the needs and demands of their patients. |
| 4. | Increase sales of our products that are compliant with FDA regulations and/or SB 1768 which became effective July 1, 2025 (“SB 1768”); |
| a. | Expand w-2 sales force, |
| b. | Continue to grow independent national and regional sales organizations (1099) to market and distribute the Company’s products, |
| c. | Partnership with concierge medicine and large practice groups and regenerative medicine focused practices, |
| d. | Scaling physician adoption nationwide through turnkey integration programs, |
| e. | Building strategic partnerships with universities, hospitals, biotech firms, and global distribution networks, |
| f. | Expand sales into the Medical Aesthetic market |
| 5. | Continue efforts to strengthen market awareness of the Company, our portfolio of product offerings that are derived from various birth tissue sources and levels of concentration and the Company’s superior safety, quality and compliance surrounding its operations and biologic product offerings. These initiatives include: |
| a. | Rebranding of our product line to Day Zero™ |
| b. | Website redesign |
| c. | Digital Marketing |
| d. | Webinars, seminars, curated events |
| 6. | Assure the Company maintains compliance with existing and the anticipated changes to FDA regulations, including the guidance related to the use and sale of tissue-based products (“HCT/Ps”) which was published in November 2017 and took effect in May 2021, as well as readiness to respond to ongoing future changes to regulations impacting our products. |
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| 7. | Engage high profile and industry recognized medical advisors, researchers and/or scientists to serve as ambassadors to the Company, to help identify and develop new and emerging technologies concerning biologics, and to assure our Products remain cutting edge and competitive to products offered by other companies. |
| 8. | Identify sources of exclusive and superior suppliers of RAAM products and/or raw materials used by us in processing our RAAM products. |
| 9. | Secure additional working capital; |
| a. | Fund shortfalls in working capital to fund ongoing expenses and required payments to vendors and creditors until revenues are stabilized |
| b. | Fund ongoing costs to complete current pipeline of clinical trials as well as future clinical trials |
| c. | Fund capital expenditures associated with meeting expected production, processing and research requirements and maintaining compliance of our facilities and products |
| d. | Fund our strategy to develop and expand our revenues for the sales and distribution of RAAM related products described above; |
| e. | Hire additional personnel to support our growth and planned expansion; and |
| f. | Enhance our CRM, e-commerce and ERP capabilities to facilitate marketing, sales and distribution functionality and accounting for our operations |
| 10. | Enhance Company Corporate Governance; |
| a. | Continue to develop and expand the Company’s internal control policies; and |
| b. | Continue to explore previously announced plans to uplist the Company to a nationally recognized exchange for the purpose of enhancing interest and investment opportunities for the Company once the Company is able to demonstrate compliance with initial listing requirements, including minimum share price and stockholder’s equity thresholds. |
Market Overview
The population of the United States and many other developed economies is aging due to increased life expectancy and sustained declines in fertility rates. According to the U.S. Census Bureau, the number of individuals aged 65 years and older in the United States reached approximately 61.2 million in 2024, representing about 18.0% of the total U.S. population. The proportion of older adults has increased steadily over time, reflecting long-term demographic shifts in population age structure.
Demographic projections indicate that population aging in the United States is expected to continue over the coming decades. Research published by the Population Reference Bureau projects that the number of Americans aged 65 and older will rise to approximately 82 million by 2050, at which point this age group is expected to represent approximately 23% of the total U.S. population. These changes are driven in part by the aging of the post-World War II baby-boom generation, all of whom will be at least 65 years old by 2030.
Similar trends are occurring globally. According to population projections published by the United Nations, the number of people aged 65 years and older worldwide is expected to more than double, increasing from approximately 761 million in 2021 to about 1.6 billion by 2050. Population aging is occurring across both developed and many emerging economies as longevity increases and birth rates decline.
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These demographic trends are expected to influence labor force participation, consumer behavior, healthcare utilization, public expenditures, and overall economic growth patterns in the United States and globally. As a result, population aging represents a significant structural factor shaping long-term market conditions across multiple sectors.
The world average age of death has increased by 35 years since 1970, with declines in death rates in all age groups, including those aged 60 and older according to the Institute for Health Metrics and Evaluation, 2013. The leading causes of death are shifting, in part because of increasing longevity. Between 1990 and 2013, the number of deaths from non-communicable diseases (“NCDs”) has increased by 42%; and the largest increases in the proportion of global deaths took place among the population aged 80 and over. An estimated 42.8% of deaths worldwide occur in the population aged 70 and over, with 22.9% in the population aged 80 and over.
Also, according to the Centers for Disease Control (the “CDC”), “Medical Tourism” (a term commonly used to describe people traveling outside their home country for medical treatment) is a worldwide, multibillion-dollar phenomenon that is expected to grow substantially in the next 5–10 years. Studies have estimated that hundreds of thousands of medical tourists travel from the United States annually and that patients pursue medical care abroad for a variety of reasons, including a desire to receive a procedure or therapy not available in their country of residence. Common categories of procedures that US travelers pursue during medical tourism trips include orthopedic surgery, cosmetic surgery, cardiology (cardiac surgery), oncologic care, and dentistry. Common destinations include Thailand, Mexico, Singapore, India, Malaysia, Cuba, Brazil, Argentina, and Costa Rica.
According to Precedence Research, the global regenerative treatment market value, in which cell therapy operates, is expected to grow to ~$174.72 billion by 2032 with a projected growth rate of 22.8% annually (2023-2032). North America is estimated to be the largest market for Regenerative Medicine with 49.1% global market share. Although the market is highly concentrated in North America (specifically the U.S.), international demand for approved gene, cell, and RNA therapies remains sizable, with over 107 therapies now approved for clinical use globally. ZEO operates at the crossroads of the biopharmaceutical, regenerative medicine, and cell therapy sectors. This growth can be attributed to demographic factors such as increased life expectancy and an aging population. In addition, growth is expected to be supported by macroeconomic factors including (anticipated) more favorable regulatory conditions and growing investor interest in the aforementioned three subsectors.
Florida Stem Cell Therapy Law – SB 1768
Effective July 1, 2025, the state of Florida enacted a new “stem cell therapy” law, SB 1768, which authorizes licensed physicians to administer certain stem cell therapies that have not been approved by the U.S. Food and Drug Administration (“FDA”) for use in the treatment of orthopedic conditions, wound care, and pain management, provided specific statutory requirements are met. The law mandates adherence by suppliers to FDA’s current good manufacturing practices (cGMP) for stem cell products and explicitly prohibits the use of stem cells derived from aborted fetuses, encouraging ethically sourced cells like adult stem cells and umbilical cord blood. The law also imposes certain requirements of physicians, including obtaining patient consent and notices warning that the treatments are not FDA approved.
Several other U.S. states have implemented laws expanding access to non-FDA-approved stem cell therapies, including Texas, Mississippi, North Carolina, Nevada and Utah and the expectation is that more states will adopt similar provisions in the near future.
The Company expects that SB 1768 will drive significant new demand from (i) the medical tourism population which are no longer required to be treated outside the United States to obtain stem cell treatments (more costly and less reliable), (ii) increased physician and patient demand resulting from increased awareness and education of the availability and benefits of stem cell treatments that may be more efficacious than existing standard of care options and (iii) Florida physicians seeking options to stay relevant and increase their practice revenues.
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SB 1768 provides the Company with new legal pathways to market and sell its products, including its newly offered stem cell products. By allowing for physicians to adopt and use the Company’s products, the Company believes that it will be able to significantly grow revenues and accelerate its clinical trial objectives and at significantly lower costs.
The Company has historically been constrained from achieving its desired objectives to grow revenues and obtain funding to advance clinical trials due to FDA constraints and the resulting physician, patient and investor uncertainty over the sale of biologics which could restrict the providers’ ability and desire to use biologic products and the costs, time and overall risks associated with performing clinical trials and ultimately obtaining FDA approval.
Under SB 1768, the Company:
| 1. | is now able to legally sell its biologics in Florida (and potentially other states in the future that adopt similar legislation), including newly offered and highly sought after Stem Cells, and |
| 2. | is now able to educate providers and market its products, which will allow ZEO to distinguish itself among its competitors as a global leader in research, quality, safety and regulatory compliance for biologics, and |
| 3. | has the ability to advance clinical research by leveraging data collected from providers that treat specific indications which previously could only be done through an FDA approved IND or IRB. Zeo believes that collecting safety and outcome data in real time will ultimately reduce the costs (time and $$) and risks to pursue a desired FDA approval for an indication(s). |
If we are able to fully implement our intended business plan with respect to stem cell therapy products, we believe that we will be well situated to address this increased consumer demand for alternative medical treatments.
Marketing and Sales
Currently, we market our RAAM products and services to a network of Providers through in-house, contracted sales personnel and/or from independent distributors. As of the date of this Annual Report, we had five in-house salespersons who marketed our RAAM products and services. In addition, we had arrangements with several independent distributors that were marketing and distributing our products. We intend in the future to expand our in-house sales force and independent distributors as our working capital improves, our product line expands and as volumes increase. We also intend to develop and offer ongoing training seminars to provide the best possible information on the latest advances on anti-aging, and regenerative medicine to Providers.
Raw Materials and Sources of Supply
We acquire the raw materials and supplies for our RAAM research and development and the manufacturing of our RAAM placental-related products from unaffiliated third-party laboratories pursuant to supply arrangements.
In the event any one or more of our current suppliers are unwilling or unable to sell us required raw materials and/or products, for any reason, we may not be able to provide replacement products to our customers, or if other supply arrangements can be made, the replacement products and terms may not be as favorable.
Customers
Our RAAM business is not dependent on any one or more customers, especially as our customer and distribution network expands. Our customer base is increasingly broad based and throughout the United States and worldwide.
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Intellectual Property
The table below sets forth a summary of our intellectual property rights.
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Issued Patents:
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ZEO ScientifiX™ has two issued U.S. Patents for its Organicell™ line of products and the proprietary techniques used for processing perinatal fluid.
U.S. Patent No. 12,053,494 Titled: COMPOSITIONS COMPRISING NANOPARTICLES, METHOD OF MAKING AND USES THEREOF Application No.: 17/990,522 (Continuation of 17/226,587) Filed: November 18, 2022 Inventor: Maria Ines Mitrani Applicant: Organicell Regenerative Medicine, Inc. Issue Date: August 6, 2024
Assignment: MARIA INES MITRANI (Assignor), ORGANICELL REGENERATIVE MEDICINE, INC. (Assignee) Recorded: March 17, 2023 Reel/Frame: 063014/0851
Assignment: ORGANICELL REGENERATIVE MEDICINE, INC. (Assignor), ZEO SCIENTIFIX, INC. (Assignee) Recorded: July 28, 2025 Reel/Frame: 072287/0052
U.S. Patent No. 12,377,121 Titled: COMPOSITIONS COMPRISING NANOPARTICLES, METHOD OF MAKING AND USES THEREOF Application No.: 17/226,587 Filed: April 9, 2021 Inventor: Maria Ines Mitrani Applicant: Organicell Regenerative Medicine, Inc. Issue Date: August 5, 2025
Assignment: MARIA INES MITRANI (Assignor), ORGANICELL REGENERATIVE MEDICINE, INC. (Assignee) Recorded: April 9, 2021 Reel/Frame: 055878/0801 & 055878/0900
Assignment: ORGANICELL REGENERATIVE MEDICINE, INC. (Assignor), ZEO SCIENTIFIX, INC. (Assignee) Recorded: June 26, 2025 Reel/Frame: 071757/0113 |
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ZEO ScientifiX™ has one issued U.S. Patent for its Organicell™ PPX product and the proprietary techniques used in the administration of blood-derived exosomes to treat pain.
U.S. Patent No. 12,213,994 Titled: COMPOSITIONS AND METHODS FOR TREATING PAIN WITH EXTRACELLULAR VESICLES Application No.: 18/063,227 Filed: December 8, 2022 Inventors: Maria Ines Mitrani, Michael Bellio, and Albert Mitrani Applicant: Organicell Regenerative Medicine, Inc. Issue Date: February 4, 2025
Assignment: MARIA INES MITRANI (Assignor), MICHAEL BELLIO (Assignor), ALBERT MITRANI (Assignor), ORGANICELL REGENERATIVE MEDICINE, INC. (Assignee) Recorded: April 19, 2023 Reel/Frame: 063370/0572
Assignment: ORGANICELL REGENERATIVE MEDICINE, INC. (Assignor), ZEO SCIENTIFIX, INC. (Assignee) Recorded: December 10, 2024 Reel/Frame: 069585/0596 | ||
| Patent Applications: |
ZEO ScientifiX™ has one U.S. Patent Application on file for its Organicell™ line of products and the proprietary techniques used for processing perinatal fluid.
U.S. Patent Application No. 18/981,124 (Continuation of 17/226,587) Titled: COMPOSITIONS COMPRISING NANOPARTICLES, METHOD OF MAKING AND USES THEREOF Filed: December 13, 2024 Inventor: Maria Ines Mitrani Applicant: Zeo ScientifiX, Inc.
Assignment: MARIA INES MITRANI (Assignor), ORGANICELL REGENERATIVE MEDICINE, INC. (Assignee) Recorded: July 24, 2025 Reel/Frame: 071826/0850
Assignment: ORGANICELL REGENERATIVE MEDICINE, INC. (Assignor), ZEO SCIENTIFIX, INC. (Assignee) Recorded: July 28, 2025 Reel/Frame: 072287/0052
ZEO ScientifiX™ has one U.S. Patent Application on file for its Organicell™ PPX product and the proprietary techniques used in the administration of blood-derived exosomes to treat pain.
U.S. Patent Application No. 19/045,385 (Continuation of 18/063,227) Titled: COMPOSITIONS AND METHODS FOR TREATING PAIN WITH EXTRACELLULAR VESICLES Filed: February 4, 2025 Inventors: Maria Ines Mitrani, Michael Bellio, and Albert Mitrani |
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ZEO ScientifiX™ has eight Ex-US Patent Applications on file for its Organicell™ line of products and the proprietary techniques used for processing perinatal fluid. These Applications are national stage entries of:
International Patent Application No. PCT/IB2021/052982 Titled: COMPOSITIONS COMPRISING NANOPARTICLES, METHOD OF MAKING AND USES THEREOF Filed: April 10, 2021 Inventor: Maria Ines Mitrani Applicant: Organicell Regenerative Medicine, Inc. | ||
| Assignment: MARIA INES MITRANI (Assignor), ORGANICELL REGENERATIVE MEDICINE, INC. (Assignee) | ||
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Country: Mexico Application Number: MX/a/2022/012692 Filing Date: April 10, 2021 | ||
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Country: Panama Application Number: 94165-01 Filing Date: April 10, 2021 | ||
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Country: Canada Application Number: 3242248 Filing Date: December 8, 2022 | ||
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ZEO ScientifiX™ has an International Patent Application on file for its Organicell™ PPX product and the proprietary techniques used in the administration of blood-derived exosomes to treat pain.
International Patent Application No. PCT/US2022/081146 Titled: COMPOSITIONS AND METHODS FOR TREATING PAIN WITH EXTRACELLULAR VESICLES Filed: December 8, 2022 Inventors: Maria Ines Mitrani, Michael Bellio, and Albert Mitrani Applicant: Organicell Regenerative Medicine, Inc. | ||
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Assignment: MARIA INES MITRANI (Assignor), MICHAEL BELLIO (Assignor), ALBERT MITRANI (Assignor), ORGANICELL REGENERATIVE MEDICINE, INC. (Assignee) | ||
| Trademarks: |
Word Mark: ZOFIN Goods/Services: Biologically derived products developed from perinatal tissue material in the nature of cultured biological tissue and non-cultured biological tissue, for aesthetic purposes, other than for medical or veterinary purposes (IC 001); Biologically derived products developed from perinatal tissue material for medical and medical regenerative purposes, namely, biological tissue grafts, implants comprising living tissue, surgical implants comprising living tissue, and biological implants for cushioning tissues and supporting tissue repair and homeostasis (IC 005) Registration Number: 7,469,132 Filing Date: July 13, 2020 Owner: Zeo ScientifiX, Inc.
Assignment: Organicell Regenerative Medicine, Inc. (Assignor), Zeo ScientifiX, Inc. (Assignee) Recorded: December 10, 2024 Reel/Frame: 8675/0758 |
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Word Mark: ORGANICELL Goods/Services: Biologically derived products developed from perinatal tissue material in the nature of cultured biological tissue and non-cultured biological tissue, for aesthetic purposes, other than for medical or veterinary purposes (IC 001); Biologically derived products developed from perinatal tissue material for medical and medical regenerative purposes, namely, biological tissue grafts, implants comprising living tissue, surgical implants comprising living tissue, and biological implants for cushioning tissues and supporting tissue repair and homeostasis (IC 005) Registration Number: 6,647,223 Filing Date: May 6, 2020 Owner: Zeo ScientifiX, Inc.
Assignment: Organicell Regenerative Medicine, Inc. (Assignor), Zeo ScientifiX, Inc. (Assignee) Recorded: December 10, 2024 Reel/Frame: 8675/0758 | ||
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Word Mark: PATIENT PURE X - PPX Goods/Services: plasma extracts for medical use, namely, plasma extract containing purified and concentrated exosomes derived from whole human blood (IC 005) Registration Number: 6,654,296 Filing Date: January 24, 2020 Owner: Zeo ScientifiX, Inc.
Assignment: Organicell Regenerative Medicine, Inc. (Assignor), Zeo ScientifiX, Inc. (Assignee) Recorded: December 10, 2024 Reel/Frame: 8675/0758 | ||
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Word Mark: PATIENT PURE X - PPX Goods/Services: plasma processing services for others, namely, extracting purified and concentrated exosomes based on whole blood harvested from patients for use by hospitals, clinics, or other organizations or persons involved in delivering healthcare services to patients (IC 040) Registration Number: 6,654,297 Filing Date: January 24, 2020 Owner: Zeo ScientifiX, Inc.
Assignment: Organicell Regenerative Medicine, Inc. (Assignor), Zeo ScientifiX, Inc. (Assignee) Recorded: December 10, 2024 Reel/Frame: 8675/0758 |
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Word Mark: XOTIN Goods/Services: Biologically derived nanoparticles, namely, exosomes and extracellular vesicles, developed from perinatal tissue for medical and medical regenerative purposes, namely, biological tissue grafts, implants comprising living tissue, surgical implants comprising living tissue, and biological implants for cushioning tissues and supporting tissue repair and homeostasis (IC 005) Registration Number: 6,815,780 Filing Date: September 9, 2020 Owner: Zeo ScientifiX, Inc.
Assignment: Organicell Regenerative Medicine, Inc. (Assignor), Zeo ScientifiX, Inc. (Assignee) Recorded: December 10, 2024 Reel/Frame: 8675/0758 |
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Word Mark: XOTIN Goods/Services: Biologically derived nanoparticles, namely, exosomes and extracellular vesicles, developed from perinatal tissue material for aesthetic purposes, other than for medical or veterinary purposes (IC 001) Registration Number: 6,847,416 Filing Date: September 9, 2020 Owner: Zeo ScientifiX, Inc.
Assignment: Organicell Regenerative Medicine, Inc. (Assignor), Zeo ScientifiX, Inc. (Assignee) Recorded: December 10, 2024 Reel/Frame: 8675/0758
Word Mark: PPX Goods/Services: Biotechnological products, namely, blood-derived biologics being plasma extract containing concentrated nanoparticles derived from whole human blood (IC 005) Registration Number: 7,667,270 Filing Date: January 4, 2024 Owner: Zeo ScientifiX, Inc.
Assignment: Organicell Regenerative Medicine, Inc. (Assignor), Zeo ScientifiX, Inc. (Assignee) Recorded: December 10, 2024 Reel/Frame: 8675/0758 | ||
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Word Mark: ZEO SCIENTIFIX Goods/Services: Manufacturing services for others in the field of regenerative medicine (IC 040); Scientific research services for others in the field of regenerative medicine; Scientific laboratory services; Design of biotechnological products being regenerative medicine products (IC 042) Serial Number: 98307890 Filing Date: December 11, 2023 Owner: Zeo ScientifiX, Inc. Status: Notice of Allowance Issued August 12, 2025
Assignment: Organicell Regenerative Medicine, Inc. (Assignor), Zeo ScientifiX, Inc. (Assignee) Recorded: December 10, 2024 Reel/Frame: 8675/0758 | ||
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Composite Mark: ZEO SCIENTIFIX (Stylized/Design) Goods/Services: Manufacturing services for others in the field of regenerative medicine (IC 040); Scientific research services for others in the field of regenerative medicine; Scientific laboratory services; Design of biotechnological products being regenerative medicine products (IC 042) Serial Number: 98307906 Filing Date: December 11, 2023 Owner: Zeo ScientifiX, Inc. Status: Notice of Allowance Issued August 12, 2025
Assignment: Organicell Regenerative Medicine, Inc. (Assignor), Zeo ScientifiX, Inc. (Assignee) Recorded: December 10, 2024 Reel/Frame: 8675/0758 |
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Word Mark: ZEO GROWX Goods/Services: Hair growth serum in the nature of a system comprised of hair growth stimulants for follicle stimulation (IC 005) Serial Number: 98883075 Filing Date: December 3, 2024 Owner: Zeo ScientifiX, Inc. Status: Notice of Allowance Issued December 9, 2025 | ||
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Word Mark: ZEO HAIR GROW Goods/Services: Hair growth serum in the nature of a system comprised of hair growth stimulants for follicle stimulation (IC 005) Serial Number: 98884330 Filing Date: December 4, 2024 Owner: Zeo ScientifiX, Inc. Status: Notice of Allowance Issued December 9, 2025 | ||
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Word Mark: ZEO GROW BOOST Goods/Services: Hair growth serum in the nature of a system comprised of hair growth stimulants for follicle stimulation (IC 005) Serial Number: 98884343 Filing Date: December 4, 2024 Owner: Zeo ScientifiX, Inc. Status: Notice of Allowance Issued December 9, 2025
Word Mark: DAY ZERO Goods/Services: Biologically derived products developed from perinatal tissue material for skincare aesthetic purposes (IC 001); Biologically derived products developed from perinatal tissue material for medical, regenerative and aesthetic purposes (IC 005) Serial Number: 99199389 Filing Date: May 23, 2025 Owner: Zeo ScientifiX, Inc. Status: Non-Final Office Action Issued October 10, 2025
Word Mark: DAY XERO Goods/Services: Biologically derived products developed from perinatal tissue material for skincare aesthetic purposes (IC 001); Biologically derived products developed from perinatal tissue material for medical, regenerative and aesthetic purposes (IC 005) Serial Number: 99199359 Filing Date: May 23, 2025 Owner: Zeo ScientifiX, Inc. Status: Non-Final Office Action Issued October 10, 2025
Word Mark: DAY ZERO STEM CELL MATRIX Goods/Services: Conditioned media derived from processing of stem cells (IC 005) Serial Number: 99334949 Filing Date: August 13, 2025 Owner: Zeo ScientifiX, Inc. Status: Non-Final Office Action Issued October 10, 2025 |
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Pursuant to our employment agreements with our executives, all work product that is created, prepared, produced, authored, edited, amended, conceived or reduced to practice by each executive individually or jointly with others during the period of their employment by the Company and relating in any way to the business or contemplated business, research or development of the Company (regardless of when or where the Work Product is prepared or whose equipment or other resources is used in preparing the same), as well as any and all rights in and to copyrights, trade secrets, trademarks (and related goodwill), patents and other intellectual property rights therein arising in any jurisdiction throughout the world and all related rights of priority under international conventions with respect thereto, including all pending and future applications and registrations thereof, and continuations, divisions, continuations-in-part, reissues, extensions and renewals thereof (collectively, “Intellectual Property Rights”), the sole and exclusive property of the Company. All of the Work Product consisting of copyrightable subject matter shall be deemed “work made for hire” as defined in 17 U.S.C. § 101 and such copyrights are therefore owned by the Company or if not applicable, deemed to be irrevocably assigned to the Company, for no additional consideration. The Intellectual Property Rights in any “Pre-existing Materials” included contained in the Work Product shall be retained by the executive but the executive shall be deemed to have granted to the Company an irrevocable, worldwide, unlimited, royalty-free license to use, publish, reproduce, display, distribute copies of, and prepare derivative works based upon, such Pre-Existing Materials and derivative works thereof. The Company may not assign, transfer and sublicense such rights to others without executive’s consent, other than to a wholly owned subsidiary of the Company. The executive shall provide written notice to the Company’s Chief Executive Officer therein notifying the Company new intellectual property including the Pre-Existing Materials.
Competition
The regenerative medicine field is highly competitive and subject to rapid technological change and regulation. Companies compete on the basis of regulatory compliance, product efficacy, pricing, and ease of handling/logistics. A critically important factor for growth in the US market is third-party reimbursement, which is difficult to obtain, and the process can be time-consuming and expensive. We expect that it will take some time before RAAM products will be widely accepted under health insurance coverage. In addition, growth of this industry is expected to expand as additional research and development into the benefits of regenerative products and specific products becomes more widely accepted as a result of FDA mandated or optional clinical trials are performed by industry stakeholders.
As stated previously, companies competing in the industry must now meet the new and more stringent regulatory deadlines imposed by the FDA in connection with regulation of RAAM products that went into effect in May 2021. As a result of these concerns, the Company and our competitors are expected to need to pursue research and development efforts, submit IND applications for FDA approval to commence clinical trials for RAAM products and ultimately obtaining a biologic license for their products to be sold, to assure that their respective operations and products remain compliant with FDA regulations and there is no adverse impact to future operations.
We have not obtained any opinion or ruling regarding the Company’s operations and whether the processing, sales and distribution of the products we currently produce would be subject to the FDA’s previously announced intended enforcement policies regarding HCT/P’s. However, we do not believe that our products fall within these guidelines and intend to vigorously defend against any adverse interpretation by the FDA on the classification of our products that may be deemed as falling under this defined regulation, if any. Notwithstanding the foregoing, we are undertaking efforts on an ongoing basis to mitigate any potential risks associated with an adverse ruling by the FDA and the subsequent limitations on our ability to continue to generate revenues from the sale of our products in the United States until the Company obtains the required licenses. The efforts include continuing with clinical trials both domestically and internationally, expanding sales internationally and developing new product offerings and/or designations of products that would not fall under these regulations, including the Company’s recent launching of PPX™ and the recent development and distribution of additional products that incorporate its proprietary ingredients for products to be used in topical aesthetic applications.
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We intend to perform clinical trials for our RAAM Products for the purpose of obtaining biologics license status from the FDA to provide us with advantages over our competitors, including acceleration for acceptance of our products in traditional insurance plans, compliance with FDA regulations and/or to provide our customers with superior education and support of the benefits of our products. Initially we are positioning ourselves as a cash-based health care alternative for consumers that can provide higher levels of improvement, that is not available from traditional allopathic medicine at this time.
The Company competes in multiple areas of clinical treatment where regenerative biomaterials may be employed to modulate inflammation, enhance healing and reduce scar tissue formation: advanced wound care treatment, including spine, orthopedic, sports medicine, and surgical as well as regenerative and aesthetics applications.
The primary competitive products in this space and which are now subject to being classified as an HCT/P product that must meet current regulatory guidelines and require IND approvals, clinical trials, and ultimately biologic license are allogenic products derived from perinatal sources or blood/bone sources including placental powders, placental frozen tissues or liquids, cord blood derived products, and Wharton’s jelly derived products. These products vary significantly in terms of pricing, cellular counts, and biological components, including exosomes, extracellular vesicles, micro vesicles, nanoparticles, and bioactive proteins. As a result of the increased regulatory oversight of HCT/P’s, competitors have begun shifting their product portfolios to autologous solutions including serums derived from blood, bone marrow, and adipose tissue. These products are the fastest growing sector of regenerative medicine due to their compliant regulatory position with the FDA. In addition, many companies have emerged with products that are being targeted for aesthetic and/or topical use, which in some instances have less regulatory restrictions for the use of the products.
Allogenic competitors are primarily producer-distributor companies which historically included Kimera Labs, Frontier Biologics, Platinum Biologics, Benev Company Inc., Exocel Bio, Re-gen Active Lab, Neobiosis, MiMedix Group, Inc., Invitrx Therapeutics, DermaSciences, Signature Biologics, Direct Biologics and Vitti Labs LLC, as well as a number of distributors who sell white-labeled products from those producer-distributor entities. Additionally, there are a variety of accredited blood, bone, and soft tissue banks that we historically competed against. Currently one of the largest companies in the autologous segment is Regenexx.
In connection with the new FDA regulations that went into effect in May 2021 described above, the Company believes that several perinatal product manufacturers in the United States have closed their operations and that hundreds of other manufacturers and clinics have already received warning letters of violations of the new FDA regulations. To date, the Company has not received any warning letters or correspondence from the FDA indicating that our products were not in compliance with the current FDA regulations.
The aesthetic market consists of numerous products aimed at skin rejuvenation, anti-aging, and overall dermatologic health. These include advanced serums, creams, and other over-the-counter formulations that incorporate cutting-edge ingredients like peptides, growth factors, and nanoparticles. While these products are generally marketed as non-invasive and appeal directly to consumers and are often sold as “topical” and/or “cosmetics”, they compete indirectly with medical aesthetic procedures by offering lower-cost alternatives for achieving similar cosmetic improvements. This segment consists of many competitors, many of which have significantly greater resources than the Company to develop, research and market their products.
As stated previously, the demand for RAAM products is very high and expected to grow with the growing baby boomer generation getting older, the increase in patients desiring to seek health care options outside of traditional therapies, the growing trend in the desire of individuals to remain active longer in life and the ongoing rise in health care costs which RAAM products may provide a more efficient and economical alternative for certain conditions.
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Government Regulation
General
The Company’s operations are subject to FDA regulations in connection with the sales and distribution of its RAAM products. In addition, the Company relies on supply agreements with birth tissue recovery companies, supply manufacturers and/or third-party distributors for the supply of RAAM products and/or the Company’s intended objectives to conduct research and development and clinical trials of RAAM products, all of whom are required to comply with FDA regulations. We anticipate these regulations will be heavily enforced and subject to more restrictive regulations by the FDA in the future. A summary of the current FDA regulations is set forth below.
FDA Premarket Clearance and Approval Requirements
Tissue Products
Currently the products that are sold by the Company are derived from human tissue that is purchased by the Company and processed directly in the Company’s laboratory facilities. As discussed below, some tissue-based products are regulated solely under Section 361 of the Public Health Service Act as human cells, tissues and cellular and tissue-based products, or HCT/Ps, which do not require premarket clearance or approval by the FDA. Other tissue products are regulated as biologics and, in order to be lawfully marketed in the United States, require an FDA-approved BLA.
The Company’s leading product, Zofin™ (also known as Organicell™ Flow), is an acellular, biologic therapeutic derived from perinatal sources and is manufactured to retain naturally occurring microRNAs, without the addition or combination of any other substance or diluent.
The Company’s autologous product called Patient Pure X™ (PPX™). PPX™ is a non-manipulated biologic containing the nanoparticle fraction from a patient’s own peripheral blood.
The Company also supplies products to third party manufacturers that are used as ingredients in formulations or use in conjunction with topical products or topical procedures.
The FDA is continually changing and formulating new guidelines for this industry.
Products Regulated as HCT/Ps
The FDA has specific regulations governing human cells, tissues and cellular and tissue-based products, or HCT/Ps. An HCT/P is a product containing or consisting of human cells or tissue intended for transplantation into a human patient. HCT/Ps that meet the criteria for regulation solely under Section 361 of the Public Health Service Act (so-called “361 HCT/Ps”) are not subject to approval requirements and they are subject to post-market regulatory requirements.
To be a 361 HCT/P, a product generally should meet following criteria:
| ● | Be minimally manipulated, no structural change, or be mixed with anything; |
| ● | Be intended for homologous use, essentially used for the same purpose that it was used in the donor; |
| ● | Its manufacture must not involve combination with another article, except for water, crystalloids or a sterilizing, preserving or storage agent; and |
| ● | It must not be dependent upon the metabolic activity of living cells for its primary function. |
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Products Regulated as Biologics- The BLA Pathway
The typical steps for obtaining FDA approval of a BLA to market a biologic product in the U.S. include:
| ● | Completion of preclinical laboratory tests, animal studies and formulations studies under the FDA’s good laboratory practices regulations; |
| ● | Submission to the FDA of an Investigational New Drug Application (“IND”) for human clinical testing, which must become effective before human clinical trials may begin and which must include independent Institutional Review Board (“IRB”) approval at each clinical site before the trials may be initiated; |
| ● | Performance of adequate and well-controlled clinical trials in accordance with Good Clinical Practices to establish the safety and efficacy of the product for each indication; |
| ● | Submission to the FDA of a Biologics License Application for marketing the product, which includes, among other things, reports of the outcomes and full data sets of the clinical trials, and proposed labeling and packaging for the product; |
| ● | Satisfactory completion of an FDA Advisory Committee review; and |
| ● | Satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product is produced to assess compliance with Current Good Manufacturing Practices (“cGMP”) regulations. |
Generally, clinical trials are conducted in three phases:
| ● | Phase I trials typically involve a small number of healthy volunteers and are designed to provide information about the product safety. |
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Phase II trials are conducted in a larger but limited group of patients afflicted with a specific diagnosis in order to determine preliminary efficacy, and to identify possible adverse effects. | |||
| ○ | Dosage studies are designated as Phase IIA and efficacy studies are designated as Phase IIB. | |||
| ● | Phase III clinical trials are generally large-scale, multi-center, comparative trials conducted with patients who have a specific condition in order to provide statistically valid proof of efficacy, as well as safety and potency. |
| ● | In some cases, the FDA will require Phase IV, or post-marketing trials, to collect additional data after a product is on the market. |
The process of obtaining an approved BLA requires the expenditure of substantial time, effort and financial resources and may take years to complete.
FDA Post-Market Regulation
Tissue processors are required to register as an establishment with the FDA. We intend on becoming a registered establishment, accredited by the American Association of Tissue Banks (“AATB”) for the storage and distribution of tissue products that we purchase directly or indirectly from third party manufacturers. Once we are registered, we will be required to comply with regulations, including those regulations regarding storage, controls, access, labeling, record keeping, security, processes, compliance with established Good Tissue Practices, and documentation associated with the sale of our products by our customers to their patients. Our facilities will be subject to periodic inspections to assess our records and determination of our compliance with the regulations.
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Products covered by a BLA, 510(k) clearance, or a PMA are subject to numerous additional regulatory requirements, which include, among others, compliance with cGMP, which imposes certain procedural, substantive and record keeping requirements, labeling regulations, the FDA’s general prohibition against promoting products for unapproved or “off-label” uses, and additional adverse event reporting.
Other Regulation Specific to Tissue Products
The AATB, has issued operating standards for tissue banking, whether manufacturing and/or storing products as a distributor of manufactured products by third parties. Compliance with these standards is a requirement in order to become a licensed tissue bank.
21st Century Cures Act
In December 2016, President Obama signed the 21st Century Cures Act (the “Cures Act”) into law. The Cures Act includes many provisions that aim to speed up the process of bringing new drugs and devices to market. One of the Cures Act’s most significant amendments to the Federal Food, Drug and Cosmetic Act allows the FDA to grant accelerated approval to regenerative medicine products, while also providing the agency with wide discretion on creating new approaches to regenerative medicine. This legislative development is the result of increased pressure from patients and other stakeholders to move regenerative medicine advancements more quickly from the lab into the clinic.
Specifically, the new accelerated approval pathway authorized by the Cures Act allows certain regenerative medicine products to be designated as “regenerative advanced therapy” and become eligible for priority review by FDA. To qualify for this pathway, the product must be aimed at a serious disease and have the potential to deal with currently unmet medical needs. It must also meet the Cures Act’s new definition of a regenerative advanced therapy, which is defined as “cell therapy, therapeutic tissue engineering products, human cell and tissue products, and combination products using any such therapies or products, except for those regulated solely under section 361 of the Public Health Service Act.” This broad definition would seem to encompass the majority of regenerative medicine products known to be currently in the development stages.
As with the existing accelerated approval pathway for drugs and biologics, this new regulatory pathway would allow a regenerative medicine product to be approved for marketing based on surrogate or intermediate clinical trial endpoints rather than longer term clinical outcomes. The use of such endpoints can decrease the number, duration, and complexity of clinical trials that are needed to prove a longer-term outcome. Subsequently, a sponsor would have to conduct confirmatory clinical trials to ensure that the surrogate or intermediate endpoint was in fact predictive of patients’ clinical response to the product, otherwise the accelerated approval could be withdrawn.
The Cures Act also requires the FDA to work with the National Institute of Standards and Technology (“NIST”) and other stakeholders to develop standards and consensus definitions for regenerative medicine products. Such standards are expected to play a large role in advancing this nascent industry by allowing companies to rely on FDA-recognized standards, rather than creating and validating their own as is the case today.
The Cures Act attempts to create a research network and a public-private partnership to assist developers in generating definitive evidence about whether their proposed therapies indeed provide clinical benefits that are hoped for. The Cures Act also requires the FDA to track and report the number and type of applications filed for regenerative medicine products, including the number of products approved through the new accelerated approval pathway. The law also includes provisions that require the FDA to publish guidance on how it will design and implement an approval process for regenerative medicine devices.
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Guidance Documents
In November 2017, the FDA released two final guidance documents in an effort to implement a “comprehensive policy framework” for existing laws and regulations governing regenerative medicine products, including human cells, tissues, and cellular and tissue-based products (“HCT/Ps”). These guidance documents build upon the previous regulatory framework for these products, which was completed in 2005. A guidance document cannot alter a regulation, but can clarify how the FDA intends to enforce the regulation.
The two guidance documents below clarify the FDA’s interpretation of the risk-based criteria manufacturers use to determine whether a product is subject to the FDA’s premarket review.
The first guidance provides greater clarity around when cell and tissue-based products would be exempted from the established regulations if they are removed from and implanted into the same individual within the same surgical procedure and remain in their original form. The second final guidance helps stakeholders better understand how existing regulatory criteria apply to their products by clarifying how the agency interprets the existing regulatory definitions “minimal manipulation” and “homologous use.” As this field advances, the FDA has noted that there are a growing number of regenerative medicine products subject to FDA premarket authorization. These guidance documents will help explain how the FDA will provide a risk-based framework for its oversight. The policy framework defines how the FDA intends to take action against unsafe products while facilitating continued innovation of promising technologies.
To accomplish this goal, the guidance document has clarified the FDA’s view of “minimal manipulation” and “homologous use.” These are two concepts that are defined in current regulation to establish the legal threshold for when a product is subject to the FDA’s premarket approval requirements. By further clarifying these terms in the final guidance, the FDA is applying a modern framework for its oversight.
FDA regulations at 21 C.F.R. Part 1271, previous draft guidance documents, and untitled letters establish the agency’s approach to regulating HCT/Ps. Some HCT/Ps are exempt from premarket approval and are subject to regulation solely under section 361 of the Public Health Service Act (“PHS Act”) (so-called “361 HCT/Ps”) whereas others require premarket approval (i.e., as a drug, device, or biologic) (so-called “351 HCT/Ps”). Both 361 HCT/Ps and 351 HCT/Ps are subject to FDA requirements (at Part 1271) for registration and listing, donor-eligibility, current good tissue practices, and other requirements intended to prevent transmission of communicable diseases. Those that are the subject of the “same surgical procedure” exception – are exempt from both premarket approval requirements and the requirements of Part 1271. This regime is outlined in a flow chart, which is one of the few new features of the final guidance documents and is presented below:
Enforcement Discretion
In order to allow manufacturers of products time to comply with the requirements, the FDA announced that it intended (originally through November 2020 and extended to May 2021 because of the COVID-19 pandemic) to exercise enforcement discretion for certain products that are subject to the FDA’s premarket review under the existing regulations, but are not currently meeting these requirements. The FDA does not intend to exercise such enforcement discretion for those products that pose a potential significant safety concern. Going forward, the FDA will apply a risk-based approach to enforcement, taking into account how products are being manufactured, marketed and administered as well as the diseases and conditions for which they are being used. This risk-based approach allows product manufacturers time to engage with the FDA, as to determine if they need to submit a marketing authorization application and, if so, submit their application to the FDA for approval.
The FDA’s enforcement discretion policy for IND and premarket approval requirements does not apply to products that have been associated with reported safety concerns or have the potential to cause significant safety concerns to patients. The FDA has stepped up its oversight of cellular and related products in recent years and has issued compliance actions, including numerous warning and untitled letters, and pursued litigation for serious violations of the law, including some involving patient harm.
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The FDA has indicated it intends to focus enforcement actions on “products with higher risk,” taking into account factors such as non-autologous (allogeneic) use, the route of administration, the site of administration, and whether the product is intended for homologous or non-homologous use. For example, HCT/Ps administered via intravenous injection or infusion, aerosol inhalation, intraocular injection, or injection or infusion into the central nervous system, will be prioritized over HCT/Ps administered by intradermal, subcutaneous, or intra-articular injection. Similarly, HCT/Ps intended for non-homologous use, particularly those intended to treat serious or life-threatening conditions, “are more likely to raise significant safety concerns than HCT/Ps intended for homologous use.”
The Company believes that the new regulatory restrictions being implemented by the FDA are intended to assure that all parties involved in the chain of gathering, processing, distributing and/or administrating RAAM related products have met the required standards to assure that the manufacturing, marketing the administration of the RAAM regulated products are not misleading and are performed in a safe and ethical manner and in accordance with the “objective intent” of the manufacturer.
We have not obtained any opinion or ruling regarding the Company’s operations and whether the processing, sales and distribution of the products we currently produce would be subject to the FDA’s previously announced intended enforcement policies regarding HCT/P’s. However, we do not believe that our products fall within these guidelines and intend to vigorously defend against any adverse interpretation by the FDA on the classification of our products that may be deemed as falling under this defined regulation, if any. Notwithstanding the foregoing, we are undertaking efforts on an ongoing basis to mitigate any potential risks associated with an adverse ruling by the FDA and the subsequent limitations on our ability to continue to generate revenues from the sale of our products in the United States until the Company obtains the required licenses. The efforts include continuing with clinical trials, expanding sales internationally and developing new product offerings and/or designations of products that would not fall under these regulations.
Fraud, Abuse and False Claims
We are directly and indirectly subject to various federal and state laws governing relationships with healthcare providers and pertaining to healthcare fraud and abuse, including anti-kickback laws. In particular, the federal Anti-Kickback Statute prohibits persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual, or the furnishing, arranging for or recommending a good or service for which payment may be made in whole or part under federal healthcare programs, such as the Medicare and Medicaid programs. (See 42 U.S.C. § 1320a-7b). Penalties for violations include criminal penalties and civil sanctions such as fines, imprisonment and possible exclusion from Medicare, Medicaid and other federal healthcare programs. The Anti-Kickback Statute is broad and prohibits many arrangements and practices that are lawful in businesses outside of the healthcare industry. In implementing the statute, the Office of Inspector General of the U.S. Department of Health and Human Services (“OIG”) has issued a series of regulations, known as the “safe harbors.” These safe harbors set forth provisions that, if all their applicable requirements are met, will assure healthcare providers and other parties that they will not be prosecuted under the Anti-Kickback Statute.
AdvaMed has established guidelines and protocols for medical device manufacturers in their relationships with healthcare professionals on matters including research and development, product training and education, grants and charitable contributions, support of third-party educational conferences, and consulting arrangements. Adoption of the AdvaMed Code by a medical device manufacturer is voluntary, and while the OIG and other federal and state healthcare regulatory agencies encourage its adoption and may look to the AdvaMed Code, they do not view adoption of the AdvaMed Code as proof of compliance with applicable laws. We have incorporated the principles of the AdvaMed Code in our standard operating procedures, sales force training programs, and relationships with health care professionals.
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Florida Stem Cell Therapy Law – SB 1768
Effective July 1, 2025, the state of Florida enacted SB 1768, which authorizes licensed physicians to administer certain stem cell therapies that have not been approved by the FDA for use in the treatment of orthopedic conditions, wound care, and pain management, provided specific statutory requirements are met. The law mandates adherence by suppliers to cGMP for stem cell products and explicitly prohibits the use of stem cells derived from aborted fetuses, encouraging ethically sourced cells like adult stem cells and umbilical cord blood. The law also imposes certain requirements of physicians, including obtaining patient consent and notices warning that the treatments are not FDA approved.
Several other U.S. states have implemented laws expanding access to non-FDA-approved stem cell therapies, including Texas, Mississippi, North Carolina, Nevada and Utah and the expectation is that more states will adopt similar provisions in the near future.
Key provisions of SB 1768 include:
| ● | Authorization for licensed Florida physicians to perform specified stem cell therapies that are not FDA-approved, subject to compliance with Florida law and applicable standards for the collection, processing, storage, and use of human cells, tissues, or cellular or tissue-based products. |
| ● | Requirements that stem cells be sourced from facilities registered with the FDA and accredited/certified by specified organizations, and that physicians adhere to current good manufacturing practices (cGMP). |
| ● | Mandatory informed consent from patients — including disclosure that therapies are not FDA-approved — and statutory notice/disclaimer requirements for advertising and patient communications. |
| ● | Prohibitions on the use of stem cells derived from aborted fetuses or embryos and criminal/disciplinary penalties for noncompliance under Florida law. |
Manufacturing (Processing)
We intend on becoming a registered establishment, accredited by the American Association of Tissue Banks (“AATB”) for the storage and distribution of tissue products that we purchase directly or indirectly from third party manufacturers. We also intend to seek American Association Blood Banks (“AABB”) accreditation in connection with certain of our products that we intend to store, process and/or distribute.
Our laboratory and distribution facilities are subject to periodic unannounced inspections by regulatory authorities based on the activities in which we may be engaged, and may undergo compliance inspections conducted by the FDA and corresponding state and foreign agencies based on our operations.
FDA Compliance Steps
The Company’s leading product, Zofin™ (also known as Organicell™ Flow), is an acellular, biologic therapeutic derived from perinatal sources and is manufactured to retain naturally occurring microRNAs, without the addition or combination of any other substance or diluent. The Company’s recently launched a service platform for its first autologous product called Patient Pure X™ (PPX™). PPX™ is a non-manipulated biologic containing the nanoparticle fraction from a patient’s own peripheral blood.
Current FDA guidance requires that the sale of products that fall under Section 351 of the Public Health Services Act pertaining to marketing traditional biologics and human cells, tissues and cellular and tissue-based products (“HCT/Ps”) can only be sold pursuant to an approved biologics license application (“BLA”).
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To date, the Company has obtained certain Investigational New Drug (“IND”), and 18 emergency IND (“eIND”) approvals from the FDA, including applicable Institutional Review Board (“IRB”) approvals which authorized the Company to commence clinical trials or treatments in connection with the use of Zofin™ and related treatment protocols. In connection with the studies described above, there were no reported therapy-related safety events or significant adverse events.
Based on the results from the clinical trials or treatments in connection with the use of Zofin™ and PPX™ and related treatment protocols performed to date, the Company has determined that there was sufficient Phase I safety data obtained from the existing enrolled patients using Zofin™ and/or PPX™ and accordingly there was no longer any benefit from continued enrollment to obtain additional patient Phase 1 safety related data among the above studies. As a result, the studies and the related sites where the studies were performed have been closed.
In addition, the Company is reviewing whether any of the existing approved and open IND’s should be modified, terminated and/or replaced.
The ability for the Company to initiate any future Phase II studies are subject to many uncertainties, including FDA approval of the respective IND applications and the Company having sufficient working capital to finance the ongoing costs of the trial, as to all of which no assurance can be given.
We have not obtained any opinion or ruling regarding the Company’s operations and whether the processing, sales and distribution of the products we currently produce would be subject to the FDA’s previously announced intended enforcement policies regarding HCT/P’s. However, we do not believe that our products fall within these guidelines and intend to vigorously defend against any adverse interpretation by the FDA on the classification of our products that may be deemed as falling under this defined regulation, if any. Notwithstanding the foregoing, we are undertaking efforts on an ongoing basis to mitigate any potential risks associated with an adverse ruling by the FDA and the subsequent limitations on our ability to continue to generate revenues from the sale of our products in the United States until the Company obtains the required licenses. The efforts include continuing with clinical trials, expanding sales internationally and developing new product offerings and/or designations of products that would not fall under these regulations.
Environmental Laws
Our laboratory facilities process or directly handled biomedical materials whereby we receive and/or generate wastes that are required to be disposed. We contract with third parties for the transport, treatment, and disposal of the waste that we obtain and at all times plan on being compliant with applicable laws and regulations promulgated by the Resource Conservation and Recovery Act, the U.S. Environmental Protection Agency and similar state agencies.
Employees
As of October 31, 2025, we had 20 full-time employees and no part-time employees. We also engaged 2 other consultants that assisted with various regulatory, marketing, administrative activities and distribution services. From time to time, the Company engages independent contractors for sales and administration activities. There are no collective bargaining agreements.
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Item 1A. Risk Factors.
This Annual Report contains certain statements relating to future events or the future financial performance of our Company. Prospective investors are cautioned that such statements are only predictions and involve risks and uncertainties, and that actual events or results may differ materially. In evaluating such statements, prospective investors should specifically consider the various factors identified in this Annual Report, including the matters set forth below, which could cause actual results to differ materially from those indicated by such forward-looking statements.
If any of the following or other risks materialize, the Company’s business, financial condition, and results of operations could be materially adversely affected which, in turn, could adversely impact the value of our securities. In such a case, investors in our securities could lose all or part of their investment.
Prospective investors should consider carefully whether an investment in the Company is suitable for them in light of the information contained in this Annual Report and the financial resources available to them. The risks described below do not purport to be all the risks to which the Company could be exposed. This section is a summary of certain risks and is not set out in any particular order of priority. They are the risks that we presently believe are material to the operations of the Company. Additional risks of which we are not presently aware or which we presently deem immaterial may also impair the Company’s business, financial condition or results of operations.
Risks Related to Our Business
We have incurred significant losses, have limited cash on hand and there is substantial doubt as to our ability to continue as a going concern.
The Company incurred net losses of $5,521,000 and $4,705,000 for the years ended October 31, 2025 and October 31, 2024, respectively. In addition, the Company had accumulated deficits of $67,734,000, and $62,213,000 at October 31, 2025 and October 31, 2024, respectively, accumulated stockholders deficit of $1,423,000 and $1,653,000 at October 31, 2025 and October 31, 2024, respectively, and had a working capital deficit of $1,915,000, and $2,123,000 at October 31, 2025 and October 31, 2024, respectively. In their report for the fiscal year ended October 31, 2025, our auditors have expressed that there is substantial doubt as to our ability to continue as a going concern. We have incurred operating losses since our formation and expect to incur substantial losses and negative operating cash flows for the foreseeable future and may never become profitable. We also expect to continue to incur significant operating and capital expenditures for the next several years and anticipate that our expenses will increase substantially in the foreseeable future. We also expect to experience negative cash flow for the foreseeable future as we fund our operating losses and capital expenditures. As a result, we will need to generate significant revenues in order to achieve and maintain profitability. We may not be able to generate these revenues or achieve profitability in the future. Our failure to achieve or maintain profitability could negatively impact the value of our common stock.
We have a relatively limited operating history in our current business upon which investors can evaluate our future prospects.
Our current business operations, including our laboratory and processing facility have only been operating since May 2019. Moreover, our prioritizing stem cell therapy products as permitted under SB 1768, has only recently commenced during 2025. Therefore, we have a relatively short operating history upon which an evaluation of our current business plan or performance and prospects can be made. The business and prospects of the Company must be considered in the light of the potential problems, delays, uncertainties and complications encountered in connection with a relatively new established business. The risks include, but are not limited to, the possibility that we will not be able to develop or identify functional and scalable products and services, or that although functional and scalable, our products and services will not be economical to market; that our competitors hold proprietary rights that preclude us from marketing such products; that our competitors market a superior or equivalent product; that we are not able to upgrade and enhance our technologies and products to accommodate new features and expanded service offerings; or the failure to receive necessary regulatory clearances for our products. To successfully introduce and market our products at a profit, we must establish brand name recognition and competitive advantages for our products. There are no assurances that the Company can successfully address these challenges. If it is unsuccessful, the Company and its business, financial condition and operating results could be materially and adversely affected.
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Given our relatively short operating history, management has little basis on which to forecast future demand for our products from our existing customer base, much less new customers. The current and future expense levels of the Company are based largely on estimates of planned operations and future revenues rather than experience. It is difficult to accurately forecast future revenues because the business of the Company is new, and its market has not been developed. If the forecasts for the Company prove incorrect, the business, operating results and financial condition of the Company will be materially and adversely affected. Moreover, the Company may be unable to adjust its spending in a timely manner to compensate for any unanticipated reduction in revenue. As a result, any significant reduction in revenues would immediately and adversely affect the business, financial condition and operating results of the Company.
Our prioritizing stem cell therapy products permitted under SB 1768 may not be successful.
The state of Florida enacted a new “stem cell therapy” law, SB 1768, effective July 1, 2025. The legislation authorizes licensed physicians to administer non-FDA-approved stem cell and other human tissue-derived therapies for orthopedic, wound care, and pain management indications, subject to compliance with cGMP and other regulations related to SB 1768. Zeo expects that SB 1768 will create substantial new demand for its current and future stem cell therapy products and accordingly has elected to prioritize development of these products, either directly or through collaborations, such as its strategic partnership with Cytora and Made Scientific. Moreover, as the stem cell therapies permitted under SB 1768 are not FDA approved, there can be no assurance that the FDA may seek to halt their use. In light of all of the above, Zeo’s efforts with respect to the development, manufacture and marketing of stem cell products and its collaboration with Cytora and Made ScientifiX with respect thereto will be successful and generate significant revenues and profits. In such event, our operating results and financial condition may be adversely affected.
We depend upon our officers and key personnel, the loss of which could seriously harm our business.
Our operating performance is substantially dependent on the continued services of our executive officers and key employees. The unexpected loss of the services of any of our executive officers and key employees could have a material adverse effect on our business, operations, financial condition and operating results, as well as the value of our common stock.
We may not be able to compete successfully with current and future competitors.
We have many potential competitors in the regenerative medicine industry. We will compete, in our current and proposed businesses, with other established companies, most of which have greater marketing and financial resources and experience than we do. We cannot guarantee that we will be able to penetrate our intended markets and be able to compete profitably, if at all. In addition to established competitors, there are moderate obstacles for competitors to enter this market, but they are not insurmountable if they have the financial resources and intellectual team. Effective competition could result in price reductions, reduced margins or have other negative implications, any of which could adversely affect our business and chances for success. Competition is likely to increase significantly as new companies enter the market and current competitors expand their services. Many of these potential competitors are likely to enjoy substantial competitive advantages, including, but not limited to, larger staffs, greater name recognition, larger and established customer bases and substantially greater financial, marketing, technical and other resources. To be competitive, we must respond promptly and effectively to industry dynamics, evolving standards and competitors’ innovations by continuing to enhance our services and sales and marketing channels. Any pricing pressures, reduced margins or loss of market share resulting from increased competition, or our failure to compete effectively, could fatally damage our business and chances for success.
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If we do not continually update our products and/or services, they may become obsolete and we may not be able to compete with other companies.
We cannot assure you that we will be able to keep pace with technological advances, or that our current suppliers will be able to keep pace with technological advances and as such, our products and/or services may become obsolete. We cannot assure you that competitors will not develop related or similar services and offer them before we do, or do so more successfully, or that they will not develop services and products more effective than any that we and/or our suppliers have or are intending to develop. In addition, although we may be able to identify new suppliers that can provide more effective services and products to be more competitive, we may not be able to arrange satisfactory arrangements in a timely manner, if at all. If that happens, our business, prospects, results of operations and financial condition will be materially adversely affected.
We enter into supply arrangements for the raw materials and/or products we sell, which make us vulnerable to the ability of such suppliers to remain current and innovative in their product offerings, to timely process and supply the products we desire to purchase, and to remain compliant with the current and changing regulatory environment. If our raw material and/or product suppliers are not successful in managing these responsibilities, it will have an adverse effect on our operations and profitability.
Our current supply arrangements for the raw materials to manufacture the products we sell or plan to sell and our third-party supply arrangements for the supply of products manufactured by other parties we sell provide for the supply and pricing for those products. There can be no assurance that our suppliers will continue to produce the products that we currently purchase under our existing arrangements, that our suppliers will be able to comply with the required FDA or other applicable regulations for the manufacturing of such products, that our suppliers will continue to develop technology associated with their manufactured products to remain competitive with other companies, or that our suppliers will remain a going concern in the future. If any of our suppliers were to cause a disruption in our ability to obtain products as desired and expected and/or we are not provided advance notice of such potential disruption, we may not be able to timely identify and replace our current suppliers, if at all, and as a result, we may not be able to provide products to our customers, which will have an adverse impact to our operations.
In the event of default under our outstanding indebtedness, or we are unable to pay other obligations and accounts payable when due, our creditors may file a creditors petition or force us into involuntary bankruptcy which may have an adverse impact on our business.
The Company had working capital deficits of $1,915,000 and $2,123,000 at October 31, 2025 and October 31, 2024, respectively. The Company’s efforts to establish a stabilized source of sufficient revenues to cover operating costs has yet to be achieved and ultimately may prove to be unsuccessful unless additional sources of working capital through operations or debt and/or equity financings are realized. Management anticipates that the Company will remain dependent, for the near future, on additional investment capital to fund ongoing operating expenses. The Company does not have significant fixed and/or intangible assets to pledge for the purpose of borrowing additional capital. In addition, the Company relies on short term supply agreements to obtain the supply of raw materials used in manufacturing the products it currently sells and distributes to its customers. The Company’s current market capitalization and common stock liquidity will hinder its ability to raise equity proceeds to implement its business plan and could adversely affect the value of our securities, including the common stock.
The Company currently has $250,000 of 8% Notes, payable annually, which mature on September 30, 2026, unless converted into shares of our common stock by the holders of the Notes. There is no assurance that the Company will make all of the required payments when due or that in the alternative, the holders of the 8% Notes will convert them into shares of our common stock.
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We have borrowed and may be required to borrow funds in the future.
If the Company incurs indebtedness, a portion of its cash flow will have to be dedicated to the payment of principal and interest on such indebtedness. Typical loan agreements also might contain restrictive covenants, which may impair the Company’s operating flexibility. Such loan agreements would also provide for default under certain circumstances, such as failure to meet certain financial covenants. A default under a loan agreement could result in the loan becoming immediately due and payable and, if unpaid, a judgment in favor of such lender which would be senior to the rights of the Company’s stockholders. A judgment creditor would have the right to foreclose on any of the Company’s assets resulting in a material adverse effect on the Company’s business, operating results or financial condition.
Currently the Company has limited assets which could be used as collateral in obtaining future borrowings. Because of the Company’s inability to provide lenders with collateral and a limited history of successful operations, the Company may not be successful in its efforts to obtain additional funds though borrowings and as a result may not be able to fund required costs of operations.
Our growth depends on external sources of capital, which may not be available on favorable terms or at all.
Our access to capital will depend upon a number of factors over which we have little or no control, including general market conditions, government regulations and the market’s perception of our current and potential future earnings. If general economic instability or downturn leads to an inability to borrow at attractive rates or at all, our ability to obtain capital to finance working capital requirements could be negatively impacted.
If we are unable to obtain capital on terms and conditions that we find acceptable, we likely will have to scale back our business operations. In addition, our ability to refinance all or any debt we may incur in the future, on acceptable terms or at all, is subject to all of the above factors, and will also be affected by our future financial position, results of operations and cash flows, which additional factors are also subject to significant uncertainties, and therefore we may be unable to refinance any debt we may incur in the future, as it matures, on acceptable terms or at all. All of these events would have a material adverse effect on our business, financial condition, liquidity and results of operations.
Failure to establish or enhance our brand recognition could have a material adverse effect on our business and results of operations.
We believe we will need to expend significant time, effort and resources to enhance the recognition of our brands. We believe developing our brand will be important to our sales and marketing efforts. If we fail to establish or enhance the recognition of our brands, it could have a material adverse effect on our ability to sell our products and adversely affect our business and results of operations. If we fail to develop a positive public image and reputation, our business with our existing customers could decline and we may fail to develop additional business, which could adversely affect our results of operations.
Defects in the products we sell or failures in quality control related to our distribution of products could impair our ability to sell our products or could result in product liability claims, litigation and other significant events involving substantial costs.
Detection of any significant defects in our products that we sell or failure in our quality control procedures or the quality control procedures of our suppliers may result in, among other things, delay in time-to-market, loss of sales and market acceptance of our products, diversion of development resources, injury to our reputation and restrictions imposed by governmental agencies. The costs we may incur in correcting any product defects may be substantial and we may not be able to identify adequate remedies, if required. Additionally, errors, defects or other performance problems could result in financial or other damages to our customers, which could result in litigation. Product liability litigation, even if we prevail and/or our suppliers, would be time consuming and costly to defend, and if we and/or our product suppliers do not prevail, could result in the imposition of a damages award. We presently maintain product liability insurance and we are named insured on our suppliers’ insurance policy; however, it may not be adequate to cover any claims.
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Our ability to become profitable and continue as a going concern will be dependent on our ability to attract, employ and retain highly skilled individuals to serve our clients.
The nature of our business requires that we employ skilled persons to perform highly skilled and specialized tasks for our Company. Our failure to retain such personnel could have a material adverse effect on our ability to offer services to clientele and could potentially have a negative effect on our business. There is no guarantee that skilled persons will be available and willing to work for us in the future, nor is there any guarantee that we could afford to retain them if they are available at a future time.
We may not be able to manage our growth effectively.
We must continually implement and improve our products and/or services, operations, operating procedures and quality controls on a timely basis, as well as expand, train, motivate and manage our work force in order to accommodate anticipated growth and compete effectively in our market segment. Successful implementation of our strategy also requires that we establish and manage a competent, dedicated work force and employ additional key employees in corporate management, product development, client service and sales. We can give no assurance that our personnel, systems, procedures and controls will be adequate to support our existing and future operations. If we fail to implement and improve these operations, there could be a material, adverse effect on our business, operating results and financial condition.
If we make any acquisitions or enter into a merger or similar transaction, our business may be negatively impacted.
We have no present plans for any specific acquisition. However, in the event that we make acquisitions in the future, we could have difficulty integrating the acquired companies’ personnel and operations with our own. In addition, the key personnel of the acquired business may not be willing to work for us. We cannot predict the effect expansion may have on our core business. Regardless of whether we are successful in making an acquisition, the negotiations could disrupt our ongoing business, distract our management and employees and increase our expenses. In addition to the risks described above, acquisitions, mergers and other similar transactions are accompanied by a number of inherent risks, including, without limitation, the following:
| ● | the difficulty of integrating acquired products, services or operations; | |
| ● | the potential disruption of the ongoing businesses and distraction of our Management and the management of acquired companies; | |
| ● | the difficulty of incorporating acquired rights or products into our existing business; | |
| ● | difficulties in disposing of the excess or idle facilities of an acquired company or business and expenses in maintaining such facilities; | |
| ● | difficulties in maintaining uniform standards, controls, procedures and policies; | |
| ● | the potential impairment of relationships with employees and customers as a result of any integration of new management personnel; | |
| ● | the potential inability or failure to achieve additional sales and enhance our customer base through cross-marketing of the products to new and existing customers; | |
| ● | the effect of any government regulations which relate to the business acquired; and | |
| ● | potential unknown liabilities associated with acquired businesses or product lines, or the need to spend significant amounts to retool, reposition or modify the marketing and sales of acquired products or the defense of any litigation, whether or not successful, resulting from actions of the acquired company prior to our acquisition. |
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Our business could be severely impaired if and to the extent that we are unable to succeed in addressing any of these risks or other problems encountered in connection with these acquisitions, many of which cannot be presently identified, these risks and problems could disrupt our ongoing business, distract our management and employees, increase our expenses and adversely affect our results of operations.
There might be unanticipated obstacles to the execution of our business plans.
The Company’s business plans may change significantly. The Company’s potential business endeavors are capital intensive. Management believes that the Company’s chosen activities and strategies are achievable in light of current economic and legal conditions with the skills, background, and knowledge of the Company’s principals and advisors. Management reserves the right to make significant modifications to the Company’s stated strategies depending on future events.
We may engage in transactions that present conflicts of interest.
The Company’s officers and directors may enter into agreements with the Company from time to time which may not be equivalent to similar transactions entered into with an independent third party. A conflict of interest arises whenever a person has an interest on both sides of a transaction. While we believe that it will take prudent steps to ensure that all transactions between the Company and any officer or director is fair, reasonable, and no more than the amount it would otherwise pay to a third party in an “arms-length” transaction, there can be no assurance that any transaction will meet these requirements in every instance.
Our operating results may fluctuate significantly as a result of a variety of factors, many of which are outside of our control.
We are subject to the following factors, among others, that may negatively affect our operating results:
| ● | The announcement or introduction of new products by our competitors; |
| ● | Failure of Government and private health plans to adequately and timely reimburse the users of our products; |
| ● | Our ability to upgrade and develop our systems and infrastructure to accommodate growth; |
| ● | Our ability to attract and retain key personnel in a timely and cost-effective manner; |
| ● | The continued safety and efficacy of our products; |
| ● | The amount and timing of operating costs and capital expenditures relating to the expansion of our business, operations and infrastructure; |
| ● | Regulation by Federal, State or Local Governments; and |
| ● | General economic conditions (including fallout from current and future pandemics) as well as economic conditions specific to the healthcare industry. |
We have based our current and future expense levels largely on our investment plans and estimates of future events, although certain of our expense levels are, to a large extent, fixed. We may be unable to adjust spending in a timely manner to compensate for any unexpected revenue shortfall. Accordingly, any significant shortfall in revenue relative to our planned expenditures would have an immediate adverse effect on our business, results of operations and financial condition. Further, as a strategic response to changes in the competitive environment, we may from time to time make certain pricing, service or marketing decisions that could have a material and adverse effect on our business, results of operations and financial condition. Due to the foregoing factors, our revenue and operating results are and will remain difficult to forecast.
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Adverse global economic conditions could have a negative effect on our business, results of operations and financial condition and liquidity.
A general slowdown in the global economy, including a recession, or in a particular region or industry, an increase in trade tensions with U.S. trading partners, the imposition of tariffs, inflation or a tightening of the credit markets could negatively impact our business, financial condition and liquidity. Adverse global economic conditions have from time to time caused or exacerbated significant slowdowns in the industries and markets in which we operate, which have adversely affected our business and results of operations. Macroeconomic weakness and uncertainty also make it more difficult for us to accurately forecast revenue, gross margin and expenses, and may make it more difficult to raise or refinance debt.
Worldwide economic and social instability could adversely affect our revenue, financial condition, or results of operations.
Generally, worldwide economic conditions remain uncertain, particularly due to the effects of the current U.S. policy of imposing tariffs, the conflicts between Russia and Ukraine, between Israel and Hamas, and potentially with Iran, disruptions in the banking system and financial markets, increased inflation and rising interest rates. The general economic and capital market conditions, both in the U.S. and worldwide, have been volatile in the past and at times have adversely affected the Company’s access to capital and increased the cost of capital. The capital and credit markets may not be available to support future capital raising activity on favorable terms. If economic conditions decline, the Company’s future cost of equity or debt capital and access to the capital markets could be adversely affected. Our vendors may experience financial difficulties or be unable to borrow money to fund their operations, which may adversely impact their ability to purchase our products or to pay for our products on a timely basis, if at all. In addition, adverse economic conditions, such as supply chain disruptions and labor shortages and persistent inflation, have affected, and may continue to adversely affect our suppliers’ ability to provide our manufacturers with materials and components, which may negatively impact our business. These economic conditions make it more difficult for us to accurately forecast and plan our future business activities.
We are in a highly competitive and evolving field and face competition from more established developers and manufacturers of regenerative medicine therapeutics, as well as new market entrants.
Our business is in a very competitive and evolving field. Competition from other tissue processors, medical device companies and from research and academic institutions is intense, expected to increase, subject to rapid change, and could be significantly affected by new product introductions. The presence of this competition in our market may lead to pricing pressure, which would make it more difficult to sell our products at a price that will make us profitable or prevent us from selling our products at all. Our success will depend on our ability and/or the ability of our suppliers to perfect and protect their intellectual property rights related to their technologies as well as to develop new technologies and new applications for our technologies. Our failure to compete effectively would have a material and adverse effect on our business, results of operations and financial condition.
Rapid technological change could cause our products to become obsolete.
The technologies underlying the products we sell and intend to sell are subject to rapid and profound technological change. Competition intensifies as technical advances in each field are made and become more widely known. We can give no assurance that our suppliers will be able to develop services, products, or processes with significant advantages over the competing products, services, and processes. Any such occurrence could have a material and adverse effect on our business, results of operations and financial condition.
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Our products are dependent on the availability of sufficient quantities of stem cell and tissue donors, and any disruption in supply could adversely affect our business.
The success of the therapeutic products we sell depends upon, among other factors, the availability of sufficient quantities of stem cells and tissue from human donors. The availability of donated materials could be adversely impacted by regulatory changes, public opinion of the donor process as well as our and our suppliers’ reputations in the industry. Any disruption in the supply of donated stem cells and human tissue could restrict our growth and could have a material adverse impact on our business and financial condition. We cannot be sure that the supply of stem cells and/or human tissue will continue to be available at current levels or will be sufficient to meet our future needs.
Certain products we offer are derived from human tissue and therefore have the potential for disease transmission.
The utilization of human tissue creates the potential for transmission of communicable disease, including, but not limited to, HIV, viral hepatitis, syphilis and other viral, fungal or bacterial pathogens. Our suppliers are required to comply with federal and state regulations intended to prevent communicable disease transmission.
Although we believe that our suppliers maintain strict quality controls over the procurement and processing of the human tissue used to make the products we sell, there is no assurance that these quality controls are or will continue to be adequate. In addition, negative publicity concerning disease transmission from other companies improperly processed donated tissue could have a negative impact on the demand for our products.
In order to grow revenues from certain of our products, we must expand our relationships with distributors and independent sales representatives.
We derive significant revenues through our relationships with distributors and independent sales representatives. If such relationships were terminated for any reason, it could materially and adversely affect our ability to generate revenues and profits. We intend to obtain the assistance of additional distributors and independent sales representatives to continue our sales growth with respect to certain of our products. We may not be able to find additional distributors and independent sales representatives who will agree to market and/or distribute those products on commercially reasonable terms, if at all. In addition, adding new distributors and independent sales representatives require additional administrative and accounting efforts for which the Company may not have sufficient resources to manage effectively. If we are unable to establish new distribution and independent sales representative relationships or renew current distribution and sales agency agreements on commercially acceptable terms or manage the growth effectively, our business, financial condition and results of operations could be materially and adversely affected.
We continue to invest significant capital in expanding our internal sales force, and there can be no assurance that these efforts will result in increases in sales.
We are engaged in a major initiative to build and further expand our internal sales and marketing capabilities to increase our level of sales. As a result, we continue to invest in a direct sales force for certain of our products to allow us to reach new customers. These expenses impact our operating results, and there can be no assurance that we will be successful in expanding the sales of our products.
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Our revenues may need to depend on adequate reimbursement from public and private insurers and health systems.
Currently, a significant number of public and private insurers and health systems do not provide reimbursement for our products. Our success and extent of our growth depends on the extent to which reimbursement for the costs of our products and related treatments will be available from third party payers, such as public and private insurers and health systems. Government and other third-party payers attempt to contain healthcare costs by limiting both coverage and the level of reimbursement of new products. Therefore, significant uncertainty usually exists as to the reimbursement status of new healthcare products. If we are not successful in obtaining adequate reimbursement for our products from these third-party payers, the market’s acceptance of our products could be adversely affected. Inadequate reimbursement levels also likely would create downward price pressure on our products. Even if we do succeed in obtaining widespread reimbursement for our products, future changes in reimbursement policies could have a negative impact on our business, financial condition and results of operations.
To be commercially successful, we must convince physicians that our products are compliant with regulations, safe and effective alternatives to existing treatments and that our products should be used in their procedures.
We believe physicians will only adopt our products if they determine, based on experience, clinical data and published peer reviewed journal articles, that the use of our products in a particular procedure is a favorable alternative to conventional methods. Physicians may be slow to change their medical treatment practices for the following reasons, among others:
| ● | Their lack of experience with prior procedures in the field using our products; |
| ● | Lack of evidence supporting additional patient benefits and our products over conventional methods; |
| ● | Perceived liability risks generally associated with the use of new products and procedures; |
| ● | Perceived exposure from regulatory agencies that monitor the use of our products; |
| ● | Limited availability of reimbursement from third party payers; and |
| ● | The time that must be dedicated to training. |
In addition, we believe recommendations for and support of our products by influential physicians are essential for market acceptance and adoption. If we do not receive this support or if we are unable to demonstrate favorable long-term clinical data, physicians and hospitals may not use our products, which would significantly reduce our ability to achieve expected revenue and would prevent us from sustaining profitability.
We will need to expand our organization and managing growth may be more difficult than expected.
Managing our growth may be more difficult than we expect. We anticipate that a period of significant expansion will be required to penetrate and service the market for our existing and anticipated future products and to continue to develop new products. This expansion will place a significant strain on management, operational and financial resources. To manage the expected growth of our operations and personnel, we must both modify our existing operational and financial systems, procedures and controls and implement new systems, procedures and controls. We must also expand our finance, administrative, and operations staff. Management may be unable to hire, train, retain, motivate and manage necessary personnel or to identify, manage and exploit existing and potential strategic relationships and market opportunities.
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We may be unable to obtain or maintain adequate product liability insurance.
Our business exposes us to the risk of product liability claims that are inherent in the manufacturing, processing and marketing of human tissue products. We may be subject to such claims if the products we sell cause, or appear to have caused, an injury. Claims may be made by patients, healthcare providers or others selling our products. We currently maintain product liability insurance that contain limits of coverage for the insured. Defending a lawsuit, regardless of merit, could be costly, divert management attention and result in adverse publicity, which could result in the withdrawal of, or reduced acceptance of, our products in the market. There can be no assurance that adequate insurance will be available in the event of a lawsuit, if at all. A product liability claim could result in significant costs and significant harm to our business.
We may implement a product recall or voluntary market withdrawal, which could significantly increase our costs, damage our reputation and disrupt our business.
The manufacturing, marketing and processing of the tissue products we sell or intend to sell involve an inherent risk that they do not meet applicable quality standards and requirements. In that event, there may be recall or market withdrawal required by a regulatory authority. A recall or market withdrawal of one of our products would be costly and would divert management resources. A recall or withdrawal of one of the products we sell, or a similar product processed, also could impair sales of our products as a result of confusion concerning the scope of the recall or withdrawal, or as a result of the damage to our reputation for quality and safety.
Significant disruptions of information technology systems or breaches of information security could adversely affect our business.
We rely to a large extent upon sophisticated information technology systems to operate our business. In the ordinary course of business, we collect, store and transmit large amounts of confidential information (including, but not limited to, personal information and intellectual property). We also have outsourced significant elements of our operations to third parties, including significant elements of our information technology infrastructure and, as a result, we are managing many independent vendor relationships with third parties who may or could have access to our confidential information. The size and complexity of our information technology and information security systems, and those of our third-party vendors with whom we contract (and the large amounts of confidential information that is present on them), make such systems potentially vulnerable to service interruptions or to security breaches from inadvertent or intentional actions by our employees or vendors, or from malicious attacks by third parties. Such attacks are of ever-increasing levels of sophistication and are made by groups and individuals with a wide range of motives (including, but not limited to, industrial espionage and market manipulation) and expertise. While we have invested significantly in the protection of data and information technology, there can be no assurance that our efforts will prevent service interruptions or security breaches. Although we may obtain cyber-insurance coverage that may cover certain events described above, this insurance is subject to deductibles and coverage limitations and we may not be able to maintain this insurance. Also, it is possible that claims could exceed the limits of our coverage. Any interruption or breach in our systems could adversely affect our business operations and/or result in the loss of critical or sensitive confidential information or intellectual property, and could result in financial, legal, business and reputational harm to us or allow third parties to gain material, inside information that they use to trade in our securities.
New lines of business or new products and services may subject us to additional risks.
From time to time, we may implement or may acquire new lines of business or offer new products, such as our stem cell therapeutics and products and services within existing lines of business. There are risks and uncertainties associated with these efforts, particularly in instances where the markets are not fully developed or are evolving. In developing and marketing new lines of business and new products and services, we may invest significant time and resources. External factors, such as regulatory compliance obligations, competitive alternatives, and shifting market preferences, may also impact the successful implementation of a new line of business or a new product or service. Failure to successfully manage these risks in the development and implementation of new lines of business or new products or services could have a material adverse effect on our business, results of operations and financial condition.
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Risks Related to Our Intellectual Property
If we are unable to adequately protect our intellectual property, our ability to compete in the market will be harmed.
Our commercial success will depend in part on patents and other intellectual property protection. To date we have applied for several patent applications and plan to file for additional patents with respect to our products and we intend to defend our patents and other intellectual property against third party challenges. However, there can be no assurance that any patents applied for will be issued, that scope of protection afforded by any patents issued will be as broad as claimed or if challenged, patents may be found to be invalid or unenforceable. Moreover, there can be no assurance that we will have the financial resources to protect our intellectual property.
There can be no assurances of protection for proprietary rights or reliance on trade secrets.
In certain cases, the Company may rely on trade secrets to protect intellectual property, proprietary technology and processes, which the Company has acquired, developed or may develop in the future. There can be no assurances that secrecy obligations will be honored or that others will not independently develop similar or superior products or technology. The protection of intellectual property and/or proprietary technology through claims of trade secret status has been the subject of increasing claims and litigation by various companies both in order to protect proprietary rights as well as for competitive reasons even where proprietary claims are unsubstantiated. The prosecution of proprietary claims or the defense of such claims is costly and uncertain given the uncertainty and rapid development of the principles of law pertaining to this area. The Company, in common with other firms, may also be subject to claims by other parties with regard to the use of intellectual property, technology information and data, which may be deemed proprietary to others.
Our suppliers’ ability to protect their intellectual property and proprietary technology through patents and other means is uncertain and may be inadequate, which could have a material and adverse effect on us.
We depend significantly on our suppliers’ ability to protect their proprietary rights to the technologies used in the products we purchase from them and resell. Traditional legal means afford only limited protection and may not adequately protect their rights or permit them to gain or keep any competitive advantage. To the extent that they are unable to protect their intellectual property against infringement by others or by claims of infringement by such suppliers, our business could be materially adversely affected.
We may be subject to damages resulting from claims that we, our employees, or our independent contractors have wrongfully used or disclosed alleged trade secrets of others.
Some of our employees were previously employed at other medical device or tissue companies. We may also hire additional employees who are currently employed at other medical device or tissue companies, including our competitors. Additionally, consultants or other independent agents with which we may contract may be or have been in a contractual arrangement with one or more of our competitors. Although no claims against us are currently pending, we may be subject to claims that these employees or independent contractors have used or disclosed any party’s trade secrets or other proprietary information. Litigation may be necessary to defend against these claims. Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management. If we fail to defend such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. A loss of key personnel or their work product could hamper or prevent our ability to market existing or new products, which could severely harm our business.
If we are unable to protect our patents and trademarks from infringement, our business prospects may be harmed.
We currently have applied for various patents and received registered trademarks for our suite of biologic products offered in the United States. Although we may take steps to monitor the possible infringement or misuse of our patents and trademarks once they are obtained, it is possible that third parties may infringe, dilute or otherwise violate our intellectual property rights. Any unauthorized use of our intellectual property could harm our reputation or commercial interests. In addition, our enforcement against third-party infringers or violators may be unduly expensive and time-consuming, and any remedy obtained may constitute insufficient redress relative to the damages we may suffer. Our business may be materially adversely affected in the event we are unable to protect our intellectual property.
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Risks Related to Regulatory Approval of Our Products and Other Government Regulations
Our business is subject to continuing regulatory compliance by the FDA and other authorities, which is costly and our failure to comply could result in negative effects on our business.
The FDA has specific regulations governing our tissue-based products, or HCT/Ps. The FDA has broad post-market and regulatory and enforcement powers. The FDA’s regulation of HCT/Ps includes requirements for registration and listing of products, donor screening and testing, processing and distribution (“Current Good Tissue Practices”), labeling, record keeping and adverse-reaction reporting, and inspection and enforcement.
Biologics and medical devices are subject to even more stringent regulation by the FDA. Even if pre-market clearance or approval is obtained, the approval or clearance may place substantial restrictions on the indications for which the product may be marketed or to whom it may be marketed, may require warnings to accompany the product or impose additional restrictions on the sale and/or use of the product. In addition, regulatory approval is subject to continuing compliance with regulatory standards, including the FDA’s quality system regulations.
If we fail to comply with the FDA regulations regarding our tissue products or medical devices, the FDA could take enforcement action, including, without limitation, any of the following sanctions and the manufacture of our products or processing of our tissue could be delayed or terminated:
| ● | Untitled letters, warning letters, fines, injunctions, and civil penalties; |
| ● | Recall or seizure of our products; |
| ● | Operating restrictions, partial suspension or total shutdown of production; |
| ● | Refusing our requests for clearance or approval of new products; |
| ● | Withdrawing or suspending current applications for approval or approvals already granted; |
| ● | Refusal to grant export approval for our products; and |
| ● | Criminal prosecution. |
It is likely that the FDA’s regulation of HCT/Ps will continue to evolve in the future. Complying with any such new regulatory requirements may entail significant time delays and expense, which could have a material adverse effect on our business. The AATB has issued operating standards for tissue banking. Compliance with these standards is a requirement in order to become an accredited tissue bank. In addition, some states have their own tissue banking regulations.
In November 2017, the FDA released two final guidance documents in an effort to implement a “comprehensive policy framework” for existing laws and regulations governing regenerative medicine products, including human cells, tissues, and cellular and tissue-based products (“HCT/Ps”). These guidance documents build upon the previous regulatory framework for these products, which was completed in 2005. The Comprehensive regenerative medicine policy framework intends to spur innovation, efficient access to potentially transformative products, while ensuring safety and efficacy.
The framework builds upon the FDA’s existing risk-based regulatory approach to more clearly describe what products are regulated as drugs, devices, and/or biological products. Further, two of the guidance documents propose an efficient, science-based process for helping to ensure the safety and effectiveness of these therapies, while supporting development in this area. The suite of guidance documents also defines a risk-based framework for how the FDA intends to focus its enforcement actions against those products that raise potential significant safety concerns. This modern framework is intended to balance the agency’s commitment to safety with mechanisms to drive further advances in regenerative medicine so innovators can bring new, effective therapies to patients as quickly and safely as possible. The policy also delivers on important provisions of the Act.
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The FDA guidance with regard to 351 HCT/Ps requiring premarket approval became effective in May 2021. The guidance states that, in order to “give manufacturers time to determine if they need to submit an IND or marketing application in light of this guidance,” the FDA intends to exercise enforcement discretion (i.e., the agency may permit marketing without an approved marketing application) if the HCT/P “is intended for autologous use and its use does not raise reported safety concerns or potential significant safety concerns.” As of the date of this Annual Report, we are not aware of whether any further extension of effectiveness and enforcement of these regulations is or will be issued by the FDA.
We have not obtained any opinion or ruling regarding the Company’s operations and whether the processing, sales and distribution of the products we currently produce would be subject to the FDA’s previously announced intended enforcement policies regarding HCT/P’s. However, we do not believe that our products fall within these guidelines and intend to vigorously defend against any adverse interpretation by the FDA on the classification of our products that may be deemed as falling under this defined regulation, if any. However, if our products are deemed by the FDA to fall within the new guidelines and we are unable to successfully challenge any such determination, our business, results of operations and financial condition may be significantly harmed.
In addition, procurement of certain human organs and tissue for transplantation is subject to the restrictions of the National Organ Transplant Act (“NOTA”), which prohibits the transfer of certain human organs, including skin and related tissue for valuable consideration, but permits the reasonable payment associated with the removal, transportation, implantation, processing, preservation, quality control and storage of human tissue and skin. We reimburse tissue banks, hospitals and physicians for their services associated with the recovery, storage and transportation of donated human tissue. Although we have independent third party appraisals that confirm that reasonableness of the service fees we pay, if we were to be found to have violated NOTA’s prohibition on the sale or transfer of human tissue for valuable consideration, we would potentially be subject to criminal enforcement sanctions, which could materially and adversely affect our results of operations.
Finally, as discussed above, we and other manufacturers of skin substitutes are required to provide ASP information to CMS on a quarterly basis. The Medicare payment rates are updated quarterly based on this ASP information. If a manufacturer is found to have made a misrepresentation in the reporting of ASP, such manufacturer is subject to civil monetary penalties of up to $10,000 for each misrepresentation for each day in which the misrepresentation was applied.
Our planned stem cell therapeutic products will be subject to compliance with the regulations related to SB 1768 with regard to sales in the state of Florida, with statutes and regulations which may be adopted in other states with respect to similar stem cell therapeutic products, as well as applicable FDA regulation for other applications.
To the extent our products do not qualify for regulation as human cells, tissues and cellular and tissue-based products under Section 361 of the Public Health Service Act, this could result in removal of the applicable products from the market, would make the introduction of new tissue products more expensive and significantly delay the expansion of our tissue product offerings and subject us to additional post-market regulatory requirements.
The products we offer are derived from human tissue. The FDA has specific regulations governing human cells, tissues and cellular and tissue-based products, or HCT/Ps. An HCT/P is a product containing or consisting of human cells or tissue intended for transplantation into a human patient. HCT/Ps that meet the criteria for regulation solely under Section 361 of the Public Health Service Act (so-called “361 HCT/Ps”) are not subject to any premarket clearance or approval requirements and are subject to less stringent post-market regulatory requirements.
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If a product is deemed not to be a 361 HCT/P, FDA regulations will require premarket clearance or approval requirements that will involve significant time and cost investments by the Company. Further, there can be no assurance that the FDA will not, at some future point, change its position on current or future products’ 361 HCT/P status, and any regulatory reclassification could have adverse consequences for us and make it more difficult or expensive for us to conduct our business by requiring premarket clearance or approval and compliance with additional post-market regulatory requirements with respect to those products. Moreover, increased regulatory scrutiny within the industry in which we operate could lead to increased regulation of HCT/Ps, including 361 HCT/Ps. We also cannot assure you that the FDA will not impose more stringent definitions with respect to products that qualify as 361 HCT/Ps.
If the FDA does allow the Company to continue to market those products that fall under the new regulations without a biologics license either prior to or after finalization of the draft guidance documents, it may impose conditions, such as labeling restrictions and compliance with cGMP. Although the Company is preparing for these requirements in connection with its pursuit of a BLA for certain of its products, compliance with these conditions would require significant additional time and cost investments by the Company. It is also possible that the FDA will not allow the Company to market any form of its products without a biologics license even prior to finalization of the draft guidance documents and could even require the Company to recall its products, which would likely result in significant harm to our business, results of operations and financial condition.
In November 2017, the FDA issued guidance documents to clarify the FDA’s interpretation of the risk-based criteria manufacturers used to determine which manufactured tissue products are subject to the FDA’s premarket review and in order to be lawfully marketed in the United States, require an FDA-approved BLA.
The FDA guidance with regard to allowing manufacturers for certain products that are subject to the FDA’s premarket review under the existing regulations but are not currently meeting these requirements became effective in May 2021.
We have not obtained any opinion or ruling regarding the Company’s operations and whether the processing, sales and distribution of the products we currently produce would be subject to the FDA’s previously announced intended enforcement policies regarding HCT/P’s. However, we do not believe that our products fall within these guidelines and intend to vigorously defend against any adverse interpretation by the FDA on the classification of our products that may be deemed as falling under this defined regulation, if any. However, if our products are deemed by the FDA to fall within the new guidelines and we are unable to successfully challenge any such determination, our business, results of operations and financial condition may be significantly harmed.
Our ability to commence and complete clinical studies and other research and development objectives that are required by the FDA, will require that we be properly funded to assure that we can commence and proceed with the required research activities promptly and that the results are favorable.
The Company is pursuing efforts to commence and complete clinical studies as well as obtaining approval to commence additional studies for other specific indications it has identified that the use of its products will provide more favorable and desired health related benefits for patients seeking alternative treatment options than are currently available. The ability of the Company to succeed in these efforts is subject to among other things, the Company having timely and sufficient available working capital to fund the substantial costs of completing clinical trials, and ultimately the approval from the FDA.
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We and our sales representatives, whether employees or independent contractors, must comply with various federal and state anti-kickback, self-referral, false claims and similar laws, any breach of which could cause a material adverse effect on our business, financial condition and results of operations.
Our relationships with physicians, hospitals and other healthcare providers are subject to scrutiny under various federal anti-kickback, self-referral, false claims and similar laws, often referred to collectively as healthcare fraud and abuse laws. Healthcare fraud and abuse laws are complex, and even minor, inadvertent violations can give rise to claims that the relevant law has been violated. Possible sanctions for violation of these fraud and abuse laws include monetary fines, civil and criminal penalties, exclusion from federal and state healthcare programs, including Medicare, Medicaid, Veterans Administration health programs, workers’ compensation programs and TRICARE (the healthcare system administered by or on behalf of the U.S. Department of Defense for uniformed services beneficiaries, including active duty and their dependents, retirees and their dependents), and forfeiture of amounts collected in violation of such prohibitions. Certain states have similar fraud and abuse laws, imposing substantial penalties for violations. Any Government investigation or a finding of a violation of these laws would likely result in a material adverse effect on the market price of our common stock, as well as our business, financial condition and results of operations.
Anti-kickback laws and regulations prohibit any knowing and willful offer, payment, solicitation or receipt of any form of remuneration in return for the referral of an individual or the ordering or recommending of the use of a product or service for which payment may be made by Medicare, Medicaid or other Government-sponsored healthcare programs. We will enter into consulting agreements, speaker agreements, research agreements and product development agreements with physicians, including some who may order our products or make decisions to use them. In addition, some of these physicians own our stock, which they purchased in arm’s length transactions on terms identical to those offered to non-physicians, or received stock awards from us as consideration for services performed by them. While these transactions were structured with the intention of complying with all applicable laws, including state anti-referral laws and other applicable anti-kickback laws, it is possible that regulatory or enforcement agencies or courts may in the future view these transactions as prohibited arrangements that must be restructured or for which we would be subject to other significant civil or criminal penalties. As discussed above, we have incorporated the AdvaMed code principles into our relationships with healthcare professionals under our consulting agreements, and our policies regarding payment of travel and lodging expenses, research and educational grant procedures and sponsorship of third-party conferences. In addition, we have conducted training sessions on these principles. However, there can be no assurance that regulatory or enforcement authorities will view these arrangements as being in compliance with applicable laws or that one or more of our employees or agents will not disregard the rules we have established. Because our strategy relies on the involvement of physicians who consult with us on the design of our products, perform clinical research on our behalf or educate the market about the efficacy and uses of our products, we could be materially impacted if regulatory or enforcement agencies or courts interpret our financial relationships with physicians who refer or order our products to be in violation of applicable laws and determine that we would be unable to achieve compliance with such applicable laws. This could harm our reputation and the reputations of the physicians we engage to provide services on our behalf. In addition, the cost of noncompliance with these laws could be substantial since we could be subject to monetary fines and civil or criminal penalties, and we could also be excluded from federally funded healthcare programs, including Medicare and Medicaid, for non-compliance.
The Federal False Claims Act (“FCA”) imposes civil liability on any person or entity that submits, or causes the submission of, a false or fraudulent claim to the U.S. Government. Damages under the FCA can be significant and consist of the imposition of fines and penalties. The FCA also allows a private individual or entity with knowledge of past or present fraud against the Federal Government to sue on behalf of the Government to recover the civil penalties and treble damages. The U.S. Department of Justice (“DOJ”) on behalf of the Government has previously alleged that the marketing and promotional practices of pharmaceutical and medical device manufacturers, including the off-label promotion of products or the payment of prohibited kickbacks to doctors, violated the FCA, resulting in the submission of improper claims to federal and state healthcare entitlement programs such as Medicaid. In certain cases, manufacturers have entered into criminal and civil settlements with the federal government under which they entered into plea agreements, paid substantial monetary amounts and entered into corporate integrity agreements that require, among other things, substantial reporting and remedial actions going forward.
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The scope and enforcement of all of these laws is uncertain and subject to rapid change, especially in light of the lack of applicable precedent and regulations. There can be no assurance that federal or state regulatory or enforcement authorities will not investigate or challenge our current or future activities under these laws. Any investigation or challenge could have a material adverse effect on our business, financial condition and results of operations. Any state or federal regulatory or enforcement review of us, regardless of the outcome, would be costly and time consuming. Additionally, we cannot predict the impact of any changes in these laws, whether these changes are retroactive or will have effect on a going-forward basis only.
We face significant uncertainty in the industry due to government healthcare reform.
There have been and continue to be proposals by the federal government, state governments, regulators and third-party payers to control healthcare costs, and generally, to reform the healthcare system in the United States. There are many programs and requirements for which the details have not yet been fully established or the consequences are not fully understood. These proposals may affect aspects of our business. We also cannot predict what further reform proposals, if any, will be adopted, when they will be adopted, or what impact they may have on us.
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Risks Related to our Status as a Public Company
We are subject to the periodic reporting requirements of the Exchange Act that requires us to incur audit fees and legal fees in connection with the preparation of such reports. These additional costs could reduce or eliminate our ability to earn a profit.
We are required to file periodic reports with the SEC pursuant to the Exchange Act and the rules and regulations promulgated thereunder. In order to comply with these requirements, our independent registered public accounting firm has to review our financial statements on a quarterly basis and audit our financial statements on an annual basis. Moreover, our legal counsel has to review and assist in the preparation of such reports. The incurrence of such costs is an expense to our operations, may increase as the Company grows and therefore have a negative effect on our ability to meet our overhead requirements and earn a profit. If we cannot provide reliable financial reports or prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price of our common stock, if an active trading market for our common stock ever develops or is sustained, could drop significantly.
Our internal controls are inadequate, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. As defined in Rule 13a-15(f) under the Exchange Act, internal control over financial reporting is a process designed by, or under the supervision of, the principal executive and principal financial officer and effected by the board of directors, management and other personnel, 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 and includes those policies and procedures that:
| ● | pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; |
| ● | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and/or directors of the Company; and |
| ● | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements. |
Our Chief Executive Officer and Chief Financial Officer noted the following material weaknesses that have caused management to conclude that, as of October 31, 2025, our disclosure controls and procedures, and our internal control over financial reporting, were not effective at the reasonable assurance level in that:
| ● | Due to our small number of employees and resources, we have limited segregation of duties, as a result of which there is insufficient independent review of duties performed. |
| ● | Due to our small number of employees and resources, we have limited segregation of duties, as a result of which do not have the ability to implement internal controls over the granting of access to our IT environment. |
| ● | As a result of the limited number of accounting personnel, we rely on inexperienced staff and outside consultants for the preparation of our financial reports, including tax preparation, which could require adjustments and lead to overlooking items requiring disclosure. |
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| ● | As a result of the Company’s limited financial and personnel resources, there may be difficulties in timely analyzing and identifying potential operational and disclosure transactions within management and to comply with financial reporting regulations. |
We have taken and are continuing to take additional steps to remedy these material weaknesses. However, in doing so, we have incurred and expect to incur additional expenses and diversion of management’s time in order to do so, which may adversely affect our business, results of operations and financial condition. Further effective internal controls, particularly those related to receipts and expenditures as well as disclosures, are necessary for us to produce reliable financial reports and are important to help prevent financial fraud. There can be no assurance that our remedial measures will be sufficient to address the material weaknesses or that our internal control over financial reporting will not be subject to additional material weaknesses in the future If we cannot provide reliable financial reports or prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price of our common stock, if a market ever develops, could drop significantly.
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Risks Relating to Ownership of Our Common Stock
Two of our stockholders control 51% of the combined voting power of our capital stock regardless of the number of shares of common stock outstanding and accordingly, have the ability to control the election of our directors and the outcome of matters submitted to our stockholders.
Two of our stockholders, Ian T. Bothwell (“Bothwell”), our Chief Executive Officer and Chief Financial Officer and Greyt Ventures LLC (“Greyt”) hold our Series C Preferred Shares, which accord them 51% of the combined voting power of our capital stock, regardless of the number of shares of common stock outstanding. Accordingly, Bothwell and Greyt have the ability to control the election of our directors and influence the outcome of issues submitted to our stockholders. As a consequence, it will be difficult, if not impossible for the other stockholders to remove our management. The voting control of the Company by Bothwell and Greyt could also deter unsolicited takeovers, including transactions in which stockholders might otherwise receive a premium for their shares over then current market prices.
Our articles of incorporation allow for our board to create a new series of preferred stock without further approval by our stockholders, which could adversely affect the rights of the holders of our common stock.
Our Board of Directors has the authority to fix and determine the relative rights and preferences of preferred stock. Our Board of Directors have the authority to issue up to 10,000,000 shares of our preferred stock terms of which may be determined by the Board without further stockholder approval. As a result, our Board of Directors could authorize the issuance of a new series of preferred stock (in addition to the Series C Preferred Shares) that would grant to holders the preferred right to our assets upon liquidation, the right to receive dividend payments before dividends are distributed to the holders of common stock and the right to the redemption of the shares, together with a premium, prior to the redemption of our common stock. In addition, our Board of Directors could authorize the issuance of a new series of preferred stock, subject to the consent of the holders of the Series C Preferred Shares that has even greater voting power than the Series C Preferred Shares, to our common stock or that is convertible into our common stock, which could decrease the relative voting power of our common stock or result in dilution to our existing stockholders. Although we have no present intention to issue any new additional shares of preferred stock or to create any additional series of preferred stock, we may issue such shares in the future.
You may experience dilution of your ownership interests because of the future issuance of additional shares of common stock.
In the future, we may issue additional authorized but previously unissued equity securities, resulting in the dilution of the ownership interests of our shareholders. We may also issue additional shares of our securities that are convertible into or exercisable for common stock, as the case may be, in connection with hiring or retaining employees, future acquisitions, future sales of its securities for capital raising purposes, or for other business purposes. The future issuance of any such additional shares of common stock may create downward pressure on the value of our securities. There can be no assurance that we will not be required to issue additional shares of common stock, warrants or other convertible securities in the future in conjunction with any capital raising efforts, including at a price (or exercise prices) below the price at which our shares may be valued or are trading in a public market.
Offers or availability for sale of a substantial number of shares of our common stock may cause the price of our common stock to decline.
If our stockholders sell substantial amounts of their shares of our common stock, or shares of our common stock underlying any outstanding securities held by them, in the public market under Rule 144 or upon registration of such shares pursuant to an effective registration statement, it could create a circumstance commonly referred to as an “overhang” and in anticipation of which the market price of our common stock could fall. The existence of an overhang, whether or not sales have occurred or are occurring, also could make more difficult our ability to raise additional financing through the sale of equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate.
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There can be no assurances that an active trading market will develop for our common stock, or if developed, be maintained.
The average trading volume in our stock has been historically low, with little or no trading at all on some days. As a result, an investor may find it difficult to dispose of, or to obtain accurate quotations of the price of, our common stock. Accordingly, investors must assume they may have to bear the economic risk of an investment in our common stock for an indefinite period of time. There can be no assurance that a more active market for the common stock will develop, or if one should develop, there is no assurance that it will be maintained. This severely limits the liquidity of our common stock, and would likely have a material adverse effect on the market price of our common stock and on our ability to raise additional capital.
Our common stock is subject to the “penny stock” rules of the SEC and the trading market in the securities is limited, which makes transactions in the stock cumbersome and may reduce the value of an investment in the stock.
The SEC has adopted Rule 15g-9 which establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require:
| ● | that a broker or dealer approve a person’s account for transactions in penny stocks; and | |
| ● | the broker or dealer receives from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased. |
In order to approve a person’s account for transactions in penny stocks, the broker or dealer must:
| ● | obtain financial information and investment experience objectives of the person; and | |
| ● | make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. |
The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight form sets forth:
| ● | the basis on which the broker or dealer made the suitability determination; and | |
| ● | that the broker or dealer received a signed, written agreement from the investor prior to the transaction. |
Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of common stock and cause a decline in the market value of stock.
Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.
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Financial Industry Regulatory Authority (“FINRA”) sales practice requirements may also limit a stockholder’s ability to buy and sell our common stock.
In addition to the “penny stock” rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, the FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our common stock and have an adverse effect on the market for shares of our common stock.
The price of our common stock may become volatile, which could lead to losses by investors and costly securities litigation.
The trading price of our common stock is likely to be highly volatile and could fluctuate in response to factors such as:
| ● | actual or anticipated variations in our operating results; | |
| ● | announcements of developments by us or our competitors; | |
| ● | announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments; | |
| ● | adoption of new accounting standards affecting our Company’s industry; | |
| ● | additions or departures of key personnel; | |
| ● | sales of our common stock or other securities in the open market; and | |
| ● | other events or factors, many of which are beyond our control. |
The stock market is subject to significant price and volume fluctuations. In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been initiated against the company. Litigation initiated against us, whether or not successful, could result in substantial costs and diversion of our management’s attention and resources, which could harm our business and financial condition.
If securities analysts do not initiate coverage or continue to cover our common stock or publish unfavorable research or reports about our business, this may have a negative impact on the market price of our common stock.
The trading market for the common stock will depend on the research and reports that securities analysts publish about our business and the Company. We do not have any control over these analysts. There is no guarantee that securities analysts will cover the common stock. If securities analysts do not cover the common stock, the lack of research coverage may adversely affect its market price. If we are covered by securities analysts, and our stock is the subject of an unfavorable report, our stock price and trading volume would likely decline. If one or more of these analysts ceases to cover the Company or fails to publish regular reports on the Company, we could lose visibility in the financial markets, which could cause our stock price or trading volume to decline.
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We have agreed to indemnify our officers and directors against lawsuits to the fullest extent of the law.
The Company is a Nevada corporation. Nevada law permits the indemnification of officers and directors against expenses incurred in successfully defending against a claim. Nevada law also authorizes Nevada corporations to indemnify their officers and directors against expenses and liabilities incurred because of their being or having been an officer or director. Our organizational documents provide for this indemnification to the fullest extent permitted by law.
Although we currently maintain directors and officers insurance coverage, there is no guarantee that such coverage or that any future insurance coverage we elect to maintain would protect us from any damages or loss claims filed against us.
We do not anticipate dividends to be paid on our common stock, and investors may lose the entire amount of their investment.
Cash dividends have never been declared or paid on the common stock, and we do not anticipate such a declaration or payment for the foreseeable future. We expect to use future earnings, if any, to fund business growth. Therefore, stockholders will not receive any funds absent a sale of their shares. We cannot assure stockholders of a positive return on their investment when they sell their shares, nor can we assure that stockholders will not lose the entire amount of their investment.
The “market overhang” from options, warrants and convertible securities could adversely impact the market price of our shares.
The “market overhang” from options, warrants and convertible securities could adversely impact the market price of our shares as a result of the dilution which would result if such securities were exercised for or converted into shares.
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Item 1B. Unresolved Staff Comments.
Not applicable.
Item 1C. Cybersecurity.
In the normal course of business, we may collect and store personal information and other sensitive information, including proprietary and confidential business information, trade secrets, intellectual property, patient information, sensitive third-party information and employee information. To protect this information, our existing cybersecurity policies require continuous monitoring and detection programs, network security precautions, encryption of critical data and in-depth security assessments of vendors. We maintain various protections designed to safeguard against cyberattacks, including firewalls and virus detection software. We have established and regularly test our disaster recovery plan, and we protect against business interruption by backing up our major systems. In addition, we periodically scan our environment for any vulnerabilities, perform penetration testing and engage third parties to assess the effectiveness of our data security practices. Our information technology (“IT”) team is responsible for these ongoing monitoring and detection activities.
The governance of our cybersecurity risks involves active and informed participation from our management team, our IT team and our board of directors. This oversight includes briefings by our IT team on the nature of the risks we face and the steps we are taking to mitigate these risks, as well as immediately reporting any significant cybersecurity incident that occurs to management and the board of directors.
We have not experienced a cybersecurity incident that had a material impact on our business strategy, results of operations, or financial condition. We continue to monitor potential cybersecurity threats and incorporate findings into our risk management strategies.
Item 2. Properties.
The Company’s administrative, research, processing and sales and distribution activities are housed in approximately 1,200 square feet of space at the Nova Southeastern University Center for Collaborative Research, 3321 College Avenue, Suite 246, Davie, Florida 33314. This space is currently being licensed on a month-to-month basis with the University for an annual base license fee of $20,230. The Company is currently exploring options for remaining at the University under a long-term license agreement or relocating to another location.
Item 3. Legal Proceedings.
In addition to matters previously reported in our periodic filings with the SEC, from time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in any such matter may harm our business.
On November 19, 2024, Howard Golub, M.D., the Company’s former Chief Science Officer, filed a complaint in the Circuit Court of the Seventeenth Judicial Circuit in and for Broward County, Florida against the Company, alleging a breach of contract as a result of the Company’s failure to pay him severance in the amount of $150,000 in connection with the non-renewal of Dr. Golub’s employment agreement with the Company. Dr. Golub is demanding judgment in the amount of $150,000 plus interest and attorney’s fees. The Company is vigorously defending against the lawsuit.
See “Item 1. Business – 2025 Developments” with respect to litigation between the Company and Exotropin and the Company and BioXtek.
Item 4. Mine Safety Disclosures.
Not applicable.
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PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Market Information
Our common stock is traded on the OTCQB tier of the over-the-counter market operated by OTC Markets Group, Inc. under the symbol “ZEOX.” The trading market for our common stock is limited and sporadic. We can provide no assurance that our shares of common stock will continue to be traded on the over-the counter market or another national securities exchange, or if traded, that any public market for our common stock will be active and sustained.
The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the Nasdaq system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that: (a) contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; (b) contains a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of securities laws; (c) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price; (d) contains a toll-free telephone number for inquiries on disciplinary actions; (e) defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and (f) contains such other information and is in such form, including language, type, size and format, as the SEC shall require by rule or regulation.
The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) monthly account statements showing the market value of each penny stock held in the customer’s account.
In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitability statement.
These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our stock if it becomes subject to these penny stock rules. Therefore, because our common stock is subject to the penny stock rules, stockholders may have difficulty selling those securities.
Common Stock
As of January 28, 2026, 7,614,941 shares of our common stock were outstanding.
Holders of Our Common Stock
As of January 28, 2026, we had approximately 214 holders of record of our common stock. One of these holders is CEDE and Company which is the mechanism used for brokerage firms to hold securities in book entry form on behalf of their clients and as of January 28, 2026, they held approximately 2,918.487 shares of common stock for these stockholders (based on the last report provided to us, the Company had approximately 3,900 non-objecting beneficial stockholders).
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Transfer Agent
The transfer agent for our common stock is Securities Transfer Corporation, 2901 Dallas Pkwy Suite 380, Plano, TX 75093.
Dividend Policy
We have never paid or declared dividends on our securities. The payment of cash dividends, if any, in the future is within the discretion of our board of directors and will depend upon our earnings, our capital requirements, financial condition and other relevant factors. We do not expect to pay dividends for the foreseeable future, and intend to retain future earnings, if any, towards the use in our business and growth strategies.
Securities Authorized for Issuance under Equity Compensation Plans
| Plan category | Number of securities to be issued upon exercise of outstanding options, warrants and rights |
Weighted- average exercise price of outstanding options, warrants and rights |
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) |
|||||||||
| Board Stock Compensation Plan(1) | -0- | - | 22,566 | |||||||||
| 2021 Equity Incentive Plan(2) | 1,172,482 | $ | 2.91 | 904,518 | ||||||||
| (1) | The Company is no longer using the Board Stock Compensation Plan to compensate its non-executive directors. | |
| (2) | As of October 31, 2025 |
Recent Sales of Unregistered Securities
None.
Item 6. [Reserved]
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
You should read the following discussion together with our consolidated financial statements and the related notes included elsewhere in this report. This discussion contains forward-looking statements, which involve risks and uncertainties. Our actual results may differ materially from those we currently anticipate as a result of many factors, including the factors we describe under Item 1A. Risk Factors and elsewhere in this report.
Results of Operations
Fiscal year ended October 31, 2025 as compared to fiscal year ended October 31, 2024
Revenues. Our revenues for the year ended October 31, 2025 were $5,199,000, as compared to revenues of $4,620,000 for the year ended October 31, 2024. The increase in revenues for the year ended October 31, 2025 of $579,000 or 12.5%, was due to increases in revenues associated with its PPX™ service platform during the year ended October 31, 2025, compared with the year ended October 31, 2024, partially offset by decreases in revenues from the Company’s allogenic aesthetic biologic products sold during the year ended October 31, 2025, as compared with the year ended October 31, 2024.
The revenues and percentage of overall unit sales derived from the Company’s higher concentration allogenic aesthetic biologic product offerings, lower concentration allogenic aesthetic biologic product offerings and its PPX™ service platform for the year ended October 31, 2025, as compared to the year ended October 31, 2024 are presented below:
| Year Ended October 31, 2025 |
Year Ended October 31, 2024 |
Change In Revenues & Percentage Of Overall Revenues |
Inc (Dec) In Units Sold |
|||||||||||||||||||||||||
| Higher Concentration Allogenic Aesthetic Biologics | $ | 2,171,000 | 41.8 | % | $ | 2,420,000 | 52.4 | % | $ | (249,000 | ) | -5.4 | % | -33.1 | % | |||||||||||||
| Lower Concentration Allogenic Aesthetic Biologics | $ | 1,394,000 | 26.8 | % | $ | 1,363,000 | 29.5 | % | $ | 31,000 | 0.7 | % | 34.2 | % | ||||||||||||||
| $ | 3,565,000 | 68.6 | % | $ | 3,783,000 | 81.9 | % | $ | (218,000 | ) | -4.7 | % | ||||||||||||||||
| PPX™ | $ | 1,527,000 | 29.4 | % | $ | 614,000 | 13.3 | % | $ | 913,000 | 19.8 | % | ||||||||||||||||
| Other | $ | 107,000 | 2.0 | % | $ | 223,000 | 4.8 | % | $ | (116,000 | ) | -2.5 | % | |||||||||||||||
| Total | $ | 5,199,000 | 100.0 | % | $ | 4,620,000 | 100.0 | % | $ | 579,000 | 12.5 | % | ||||||||||||||||
The increase in the overall unit sales associated with its PPX™ service platform was primarily due the Company’s continued sales and marketing efforts which included engaging additional sales representatives, participation in industry related conferences, sponsoring of educational webinars and from sales of PPX™ to the Company’s existing customers.
The Company attributes the net decrease in revenues from higher and lower concentration allogenic aesthetic biologic products sold during the year ended October 31, 2025, compared to the year ended October 31, 2024 due to additional product competition in the marketplace which attracted greater demand for the Company’s lower priced allogenic aesthetic biologic product offerings and lower demand for the Company’s higher priced allogenic aesthetic biologic product offerings during the year ended October 31, 2025, compared with the year ended October 31, 2024.
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Cost of Revenues. Our cost of revenues for the year ended October 31, 2025 were $931,000, as compared to cost of revenues of $844,000 for the year ended October 31, 2024. The increase in the cost of revenues for the year ended October 31, 2025 of $87,000 or 10.3%, from the year ended October 31, 2024, was due to the increase of approximately $157,000 of cost of revenues associated with its PPX™ service platform during the year ended October 31, 2025, compared with the year ended October 31, 2024, partially offset by a decrease of approximately $70,000 in the costs of revenues for its allogenic aesthetic biologic products sold for the year ended October 31, 2025, as compared to the year ended October 31, 2024.
Gross Profit. Our gross profit for the year ended October 31, 2025 was $4,268,000 (82.0% of revenues), compared to gross profit of $3,776,000 (81.7% of revenues) for the year ended October 31, 2024. The increase in gross profit during the year ended October 31, 2025 of $492,000 (13.0%) was the result of increases in the gross margins received from sales of its PPX™ service platform, partially offset from reduced gross margins received from the sale of its allogenic aesthetic biologic products.
In addition, the percentage of the Company’s revenues associated with its PPX™ service platform, which has a higher cost of revenues as compared to the Company’s allogenic aesthetic biologic product offerings, increased to 29.4% of revenues for the year ended October 31, 2025, as compared with 13.3% of revenues for the year ended October 31, 2024. The percentage of the Company’s revenues associated with its allogenic aesthetic biologic product decreased to 68.6% of revenues for the year ended October 31, 2025, as compared with 81.9% of revenues for the year ended October 31, 2024.
General and Administrative Expenses. General and administrative expenses for the year ended October 31, 2025 were $9,654,000, as compared to $9,095,000 for the year ended October 31, 2024, an increase of $559,000 or 6.1%. The increase in the general and administrative expenses for the year ended October 31, 2025, from the year ended October 31, 2024, was primarily the result of (a) increased stock-based compensation costs to advisors, consultants and administrative staff totaling approximately $839,000, (b) increased laboratory related costs of approximately $179,000 increased lab expenses and (c) increased professional fees of approximately $78,000 during the year ended October 31, 2025, as compared to the year ended October 31, 2024, partially offset from (1) decreased commissions and travel costs of approximately $212,000, decreased marketing related costs of approximately $110,000, decreased administrative and office related costs of $73,000 and reduced research and development costs of approximately $63,000 during the year ended October 31, 2025, as compared to the year ended October 31, 2024.
The increase in stock-based compensation costs during the year ended October 31, 2025, as compared to the year ended October 31, 2024 was principally the result of increased amortization of costs from shares and options issued to executives and advisors and options issued to employees and outside directors.
The decrease in commissions during the year ended October 31, 2025, as compared to the year ended October 31, 2024 was principally the result of a larger percentage of sales that were generated from house accounts with much lower commission costs than paid to distributors and/or independent sales representatives.
Other income. Other income for the year ended October 31, 2025 was $101,000, as compared to other income of $751,000 for the year ended October 31, 2024. The decrease in other income of $650,000 was principally due to (a) a reduction in non-recurring income in connection with the write-off of advances payable to an affiliate of a former executive of $221,000 resulting from the inability of the affiliate to enforce a claim to collect the advances as the period of statute of limitations had run, (b) the reduction settlements of the Amended Skincare Agreement of $168,000, (c) the reduction in settlement income from insurance claims of $89,000, (d) the reduction in commissions received from sales of Exotropin products of $26,000 and (e) reductions in income from the settlement of liabilities of approximately $156,000, partially offset from increases in other income of $10,000 during the year ended October 31, 2025, as compared to the year ended October 31, 2024.
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Other expense for the year ended October 31, 2025 was $236,000, as compared to other expense of $137,000 for the year ended October 31, 2024. The increase in other expense of $99,000 during the year ended October 31, 2025, compared to the year ended October 31, 2024, was principally the result of increased interest costs associated with amortization of loan discounts on Notes payable, increased inducement costs associated with the conversion of Notes payable of $136,000 and increased costs of $2,000 associated with changes in the fair value in the obligation to repurchase shares during the year ended October 31, 2025 as compared to the year ended October 31, 2024, partially offset from reduced reserves against the carrying value of the Company’s investments in equity securities of $45,000 during the year ended October 31, 2025 as compared to the year ended October 31, 2024.
Liquidity and Capital Resources
Cash and Cash Equivalents
The following table summarizes the sources and uses of cash for the periods stated. The Company held no cash equivalents for any of the periods presented:
| For the Fiscal Year Ended October 31, |
||||||||
| 2025 | 2024 | |||||||
| Cash, beginning of year | $ | 657,000 | $ | 1,756,000 | ||||
| Net cash used in operating activities | (718,000 | ) | (1,450,000 | ) | ||||
| Net cash used in investing activities | (23,000 | ) | (45,000 | ) | ||||
| Net cash provided by financing activities | 305,000 | 396,000 | ||||||
| Cash, end of year | $ | 221,000 | $ | 657,000 | ||||
During the year ended October 31, 2025, the Company used cash in operating activities of $718,000, compared to $1,450,000 for the year ended October 31, 2024, a decrease in cash used of $732,000. The decrease in cash used was primarily the result of an increase in gross profit of $492,000, increases in cash provided from changes in operating assets and liabilities of $389,000 for the year ended October 31, 2025 compared to the year ended October 31, 2024, partially offset from the reduction in general and administrative expenses and other income (expense) after adjusting for non-cash related activities of $147,000 for the year ended October 31, 2025 compared to the year ended October 31, 2024.
The increase in cash provided from changes in operating assets and liabilities was due to decreases in accounts receivable, increases in accounts payable and accrued expenses and accrued liabilities, partially offset by decreases in deferred revenues and increases in inventories during the year ended October 31, 2025 as compared to the year ended October 31, 2024.
During the year ended October 31, 2025, the Company had cash used in investing activities of $45,000 compared to $23,000 for the year ended October 31, 2024, a decrease in cash used in investing activities of $22,000. The decrease in cash used by investing activities was primarily due to the decrease in investments from non-marketable securities of $45,000, partially offset from the increase in payments made in connection with the Company’s purchase of laboratory equipment of $23,000 during the year ended October 31, 2025 as compared to the year ended October 31, 2024.
During the year ended October 31, 2025, the Company had cash provided by financing activities of $305,000 compared to cash provided by financing activities of $396,000 for the year ended October 31, 2024. The decrease in cash provided by financing activities of $91,000 was due to a decrease in proceeds from the sale of equity securities of $200,000 and increases in payments on finance leases of $22,000, partially offset from the increase in proceeds received from the exercise of warrants of $50,000 and a decrease in the amounts paid for shares repurchased in connection with litigation of $80,000 during the year ended October 31, 2025, as compared to the year ended October 31, 2024.
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Capital Resources
The Company has historically relied on the sale of debt or equity securities, the restructuring of debt obligations and/or the issuance and/or exchange of equity securities to meet the shortfall in cash to fund its operations. During the fiscal year ended October 31, 2025 and through the date of this Annual Report, the Company completed the following private sales of its securities:
In November 2025, the Company commenced a private offering of up to 20 units (“Nov 25 Units”) at a purchase price of $250,000 per Nov 25 Unit for an aggregate purchase price of $5,000,000 (“Offering”). Each Nov 25 Unit consists of (a) 62,500 shares of common stock, $0.001 par value of the Company and (b) warrants to purchase 62,500 shares of common stock of the Company at an exercise price of $4.00 until November 30, 2030. The warrants may be exercised on a cashless basis.
The Offering is being made on a “best efforts” basis pursuant to the exemption from registration afforded by Rule 506(b) of Regulation D under the Securities Act of 1933, as amended (“Securities Act”) for an initial period ending December 31, 2025, which was extended by the Company for period to be determined at the Company’s sole discretion (“Offering Period”). No minimum number of Nov 25 Units need be subscribed for in order for the Company to close on the sale of any of the Nov 25 Units offered. The Company may hold one or more closings of sales of the Nov 25 Units from time to time during the Offering Period.
During November 2025 thru January 2026, the Company sold 4.8 Nov 25 Units to 7 investors for an aggregate purchase price of $1,200,000 and issued 300,000 shares of common stock and 300,000 warrants to purchase shares of common stock.
The proceeds from the sale of the Nov 25 Units are being used for working capital purposes.
Going Concern Consideration
The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. The Company has had limited revenues since its inception. The Company incurred net losses of $5,521,000 for the year ended October 31, 2025 and used $718,000 of cash from operating activities during that period. In addition, the Company had an accumulated deficit and a stockholders’ deficit of $67,734,000 and $1,423,000, respectively, at October 31, 2025. The Company had a working capital deficit of $1,915,000 at October 31, 2025.
United States Food and Drug Administration (“FDA”) regulations which were announced in November 2017 and which became effective in May 2021 require that the sale of products that fall under Section 351 of the Public Health Services Act pertaining to marketing traditional biologics and human cells, tissues and cellular and tissue based products (“HCT/Ps”) can only be sold pursuant to an approved biologics license application (“BLA”). Notwithstanding the above, certain states, including Florida (SB 1768) have approved legislation that permits the use and sale of products that would otherwise be restricted under current FDA regulations. The Company has not obtained any opinion or ruling regarding the Company’s operations and whether the processing, sales and distribution of the products it currently produces would be subject to the FDA’s previously announced intended enforcement policies regarding HCT/P’s.
As a result of the above, the Company’s efforts to establish a stabilized source of sufficient revenues to cover operating costs has yet to be achieved and ultimately may prove to be unsuccessful unless (a) the Company’s ability to process, sell and distribute the products currently being produced or developed in the future are not restricted; and/or (b) additional sources of working capital through operations or debt and/or equity financings are realized. These financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
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Management anticipates that the Company will remain dependent, for the near future, on additional investment capital to fund ongoing operating expenses and research and development costs related to development of new products and to perform required clinical studies in connection with the sale of its products. The Company does not have any assets to pledge for the purpose of borrowing additional capital. In addition, the Company relies on its ability to produce and sell products it manufactures that are subject to changing technology and regulations that it currently sells and distributes to its customers. The Company’s current market capitalization, common stock liquidity and available authorized shares may hinder its ability to raise equity proceeds. The Company anticipates that future sources of funding, if any, will therefore be costly and dilutive, if available at all.
In view of the matters described in the preceding paragraphs, recoverability of the recorded asset amounts shown in the accompanying consolidated balance sheet assumes that (a) the Company is able to continue to produce products or obtain products under supply arrangements which are in compliance with current and future regulatory guidelines; (b) the Company will be able to establish a stabilized source of revenues, including efforts to expand sales internationally and the development of new product offerings and/or designations of products; (c) obligations to the Company’s creditors are not accelerated; (d) the Company’s operating expenses remain at current levels and/or the Company is successful in restructuring and/or deferring ongoing obligations; (e) the Company is able to continue its research and development activities, particularly in regards to remaining compliant with the FDA and ongoing safety and efficacy of its products; and/or (f) the Company obtains additional working capital to meet its contractual commitments and maintain the current level of Company operations through debt or equity sources.
There is no assurance that the products we currently produce will not be subject to the FDA’s previously announced intended enforcement policies regarding HCT/P’s and/or the Company will be able to complete its revenue growth strategy. There is no assurance that the Company’s research and development activities will be successful or that the Company will be able to timely fund the required costs of those activities. Without sufficient cash reserves, the Company’s ability to pursue growth objectives will be adversely impacted. Furthermore, despite significant effort since July 2015, the Company has thus far been unsuccessful in achieving a stabilized source of revenues.
If revenues do not increase and stabilize, if the Company’s ability to process, sell and/or distribute the products currently being produced or developed in the future are restricted, and/or if additional funds cannot otherwise be raised, the Company might be required to seek other alternatives which could include the sale of assets, closure of operations and/or protection under the U.S. bankruptcy laws.
As of October 31, 2025, based on the factors described above, the Company concluded that there was substantial doubt about its ability to continue to operate as a going concern for the 12 months following the issuance of these financial statements.
Off-Balance Sheet Arrangements
Our liquidity is not dependent on the use of off-balance sheet financing arrangements (as that term is defined in Item 303(a) (4) (ii) of Regulation S-K) and as of October 31, 2025 and through the date of this report, we had no such arrangements.
Recently Issued Financial Accounting Standards
In November 2024, FASB issued ASU 2024-03 Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) Disaggregation of Income Statement Expenses. The guidance in ASU 2024-03 requires public business entities to disclose in the notes to the financial statements, among other things, specific information about certain costs and expenses including purchases of inventory; employee compensation; and depreciation and amortization expense for each caption on the income statement where such expenses are included. The update is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted, and the amendments may be applied prospectively to reporting periods after the effective date or retrospectively to all periods presented in the financial statements. The Company is currently evaluating the provisions of this guidance and assessing the potential impact on its financial statement disclosures.
We have reviewed all accounting pronouncements recently issued by the FASB and the SEC. The authoritative pronouncements that we have already adopted did not have a material effect on our financial condition, results of operations, cash flows or reporting thereof, and except as otherwise noted above, we do not believe that any of the authoritative pronouncements that we have not yet adopted will have a material effect upon our financial condition, results of operations, cash flows or reporting thereof.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Not applicable.
54
Item 8. Financial Statements and Supplementary Data.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors of
Zeo Scientifix, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Zeo Scientifix, Inc. (the “Company”) as of October 31, 2025 and 2024, the related consolidated statements of operations, changes in stockholders’ deficit and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of October 31, 2025 and 2024, and the results of its operations and its cash flows for 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 assuming that the Company will continue as a going concern. As more fully described in Note 3, during the year ended October 31, 2025 the Company incurred significant losses and utilized cash in operations, and had a stockholders’ deficit as of that date. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. 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 audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits 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 audits 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 audits provide a reasonable basis for our opinion.
Critical Audit Matter
A critical audit matter is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved especially challenging, subjective, or complex judgments. We determined that there were no critical audit matters.
We have served as the Company’s auditor since 2023.
/s/ Weinberg & Company P.A.
January 29, 2026
F-2
Zeo ScientifiX, Inc.
CONSOLIDATED BALANCE SHEETS
As of October 31, 2025 and 2024
(Amounts rounded to the nearest thousand except share amounts)
| October 31, 2025 |
October 31, 2024 |
|||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable, net of allowance for bad debts | ||||||||
| Other receivables | ||||||||
| Prepaid expenses | ||||||||
| Inventories | ||||||||
| Total Current Assets | ||||||||
| Property and equipment, net | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES, SHARES SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current Liabilities | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Finance lease obligations | ||||||||
| Convertible promissory note, net of debt discount of $ |
||||||||
| Obligation to repurchase shares | ||||||||
| Deferred revenue | ||||||||
| Total Current Liabilities | ||||||||
| Long term finance lease obligations | ||||||||
| Total Liabilities | ||||||||
| Commitments and contingencies | ||||||||
| Shares Subject To Possible Redemption | ||||||||
| Series C Preferred Stock, $ par value, shares authorized; and shares issued and outstanding, respectively | ||||||||
| Stockholders’ Deficit | ||||||||
| Common stock, $ par value, shares authorized; and shares issued and outstanding, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( |
) | ( |
) | ||||
| Total Stockholders’ Deficit | ( |
) | ( |
) | ||||
| TOTAL LIABILITIES, SHARES SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-3
Zeo ScientifiX, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended October 31, 2025 and 2024
(Amounts rounded to the nearest thousand except share amounts)
| Year Ended October 31, |
||||||||
| 2025 | 2024 | |||||||
| Revenues (includes sales to related parties of approximately $ |
$ | $ | ||||||
| Cost of revenues | ||||||||
| Gross profit | ||||||||
| General and administrative expenses | ||||||||
| Loss from operations | ( |
) | ( |
) | ||||
| Other income (expense) | ||||||||
| Interest expense | ( |
) | ( |
) | ||||
| Change in obligation to repurchase shares | ( |
) | ||||||
| Inducement expense to convert Notes in payable | ( |
) | ||||||
| Impairment of non-marketable securities in a related entity | ( |
) | ||||||
| Other income | ||||||||
| Net loss | $ | ( |
) | $ | ( |
) | ||
| Net loss per common share - basic and diluted | $ | ) | $ | ) | ||||
| Weighted average number of common shares outstanding - basic and diluted | ||||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-4
Zeo ScientifiX, Inc.
CONSOLIDATED CHANGES TO STOCKHOLDERS’ DEFICIT
For the Years Ended October 31, 2025 and 2024
(Amounts rounded to the nearest thousand except share amounts)
| Common Stock | Additional Paid In |
Accumulated | Total Stockholders’ |
|||||||||||||||||
| Shares | Par Value | Capital | Deficit | Deficit | ||||||||||||||||
| Balance October 31, 2023 | $ | $ | $ | ( |
) | $ | ( |
) | ||||||||||||
| Sale of common stock | ||||||||||||||||||||
| Reverse split round-up adjustment | ||||||||||||||||||||
| Cancellation of shares in connection with litigation | ( |
) | ( |
) | ||||||||||||||||
| Purchase of shares in connection with litigation | ( |
) | ( |
) | ( |
) | ||||||||||||||
| Exchange of accounts payable for stock | ||||||||||||||||||||
| Fair value of equity instruments issued for compensation: | ||||||||||||||||||||
| Fair value of vested shares issued | ||||||||||||||||||||
| Fair value of vested options issued | - | |||||||||||||||||||
| Fair value of vested warrants issued | - | |||||||||||||||||||
| Net loss | - | ( |
) | ( |
) | |||||||||||||||
| Balance October 31, 2024 | ( |
) | ( |
) | ||||||||||||||||
| Sale of common stock | ||||||||||||||||||||
| Inducement expense to convert Notes payable | - | |||||||||||||||||||
| Conversion of Notes payable | ||||||||||||||||||||
| Acquisition of BioLumina | ||||||||||||||||||||
| Exercise of warrants | |
|||||||||||||||||||
| Fair value of equity instruments issued for compensation: | ||||||||||||||||||||
| Fair value of vested shares issued | ||||||||||||||||||||
| Fair value of vested options issued | - | |||||||||||||||||||
| Fair value of vested warrants issued | - | |||||||||||||||||||
| Net loss | - | ( |
) | ( |
) | |||||||||||||||
| Balance October 31, 2025 | $ | $ | $ | ( |
) | $ | ( |
) | ||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-5
Zeo ScientifiX, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended October 31, 2025 and 2024
(Amounts rounded to the nearest thousand except share amounts)
| Year Ended October 31, |
||||||||
| 2025 | 2024 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | ( |
) | $ | ( |
) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization expense | ||||||||
| Amortization of debt discount – Promissory notes | ||||||||
| Bad debt expense | ||||||||
| Change in obligation to repurchase shares | ||||||||
| Inducement expense to convert Notes | ||||||||
| Write-off of advances payable to former officer | ( |
) | ||||||
| Reserve of non-marketable securities – related party | ||||||||
| Stock-based compensation | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable, net of allowance for bad debts | ( |
) | ||||||
| Other receivable | ||||||||
| Prepaid expenses | ( |
) | ||||||
| Inventories | ( |
) | ||||||
| Accounts payable and accrued expenses | ( |
) | ||||||
| Security deposits | ||||||||
| Deferred revenue | ( |
) | ||||||
| Net cash used in operating activities | ( |
) | ( |
) | ||||
| CASH FLOWS FROM INVESTING | ||||||||
| Purchase of fixed assets | ( |
) | ||||||
| Investment in non-marketable equity securities – related party | ( |
) | ||||||
| Net cash used in investing activities | ( |
) | ( |
) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Proceeds from exercise of warrants | ||||||||
| Shares repurchased in connection with litigation | ( |
) | ||||||
| Payments on finance leases | ( |
) | ( |
) | ||||
| Proceeds from sale of common stock | ||||||||
| Net cash provided by financing activities | ||||||||
| Decrease in cash | ( |
) | ( |
) | ||||
| Cash at beginning of period | ||||||||
| Cash at end of period | $ | $ | ||||||
| SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||||
| Cash paid for taxes | $ | $ | ||||||
| Cash paid for interest | $ | $ | ||||||
| NON-CASH INVESTING AND FINANCING TRANSACTIONS: | ||||||||
| Reduction in accounts payable for equipment returned to vendor | $ | $ | ||||||
| Exchange of shares for payables | $ | $ | ||||||
| Finance lease obligations | $ | $ | ||||||
| Stock issued – Purchase of BioLumina assets | $ | $ | ||||||
| Conversion of notes payable and accrued interest for equity | $ | $ | ||||||
| Royalty payable in connection with purchase of BioLumina assets | $ | $ | ||||||
| Obligation to repurchase shares in connection with purchase of BioLumina assets | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-6
Zeo ScientifiX, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
Zeo ScientifiX, Inc. (“ZEO” or the “Company”) was incorporated on August 9, 2011 in the State of Nevada under the name Bespoke Tricycles Inc. (changed to Biotech Products Services and Research, Inc. during September 2015 and to Organicell Regenerative Medicine, Inc., effective June 20, 2018). Effective February 20, 2024, we further amended our Articles of Incorporation to assume our current name, Zeo ScientifiX, Inc.
The Company is a clinical-stage biopharmaceutical company principally focusing on the development of innovative biological therapeutics for the treatment of degenerative diseases and regenerative medicine. In connection with the state of Florida’s new “stem cell therapy” law, effective July 1, 2025 (“SB 1768”)., the Company has begun to pursue clinical research and commercial sales strategies that are compliant with SB 1768. The Company has a portfolio of proprietary products derived from ethically sourced birth tissue, including mesenchymal stem cells, stem cell and amniotic fluid derived exosomes and Whartons Jelly matrix. The Company’s principal product is Zofin™, a product derived from amniotic fluid and manufactured to retain the naturally occurring extracellular vesicles, proteins and cell secreted nanoparticles. ZEO also manufactures Patient Pure X™ (“PPX™”), a proprietary autologous biologic containing a nanoparticle fraction that is precipitated from a patient’s own peripheral blood. ZEO’s products are all manufactured in FDA-registered, cGMP-compliant laboratory facilities. Our portfolio of products (“RAAM Products”) and related services are principally used in the health care industry administered through doctors and clinics (“Providers”).
In addition to the Company’s efforts to now supply products that are compliant with SB 1768, the Company has recently developed and begun to distribute additional products that incorporate its proprietary ingredients for products to be used in topical aesthetic applications and is actively exploring further development of additional products to be used in other topical aesthetic applications.
Effective November 28, 2023, we implemented a one-for-200 reverse stock split (the “Reverse Split”). The par value of the Company’s common stock was unchanged at $0.001 per share after the Reverse Split. As a result, on the effective date of the Reverse Split, the stated capital on the Company’s balance sheet attributable to the Company’s common stock was reduced proportionately based on the Reverse Split ratio of one-for-200 and the additional paid-in capital account was credited with the amount by which the stated capital was reduced. All share and per share amounts referenced herein give effect to the Reverse Split as of the earliest period presented.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated.
Concentrations of Risk
Credit Risk
The balance sheet items that potentially subject us to concentrations of credit risk are primarily cash and cash equivalents and accounts receivable. Balances in accounts are insured up to Federal Deposit Insurance Corporation (“FDIC”) limits of $
F-7
Major Customer
During the year ended October 31, 2025, the Company sold products and services totaling approximately $
During the year ended October 31, 2024, the Company sold products and services totaling approximately $
As of October 31, 2025, the Company had accounts receivable from one customer. As of October 31, 2024, the Company had accounts receivable from three customers which comprised
The Company’s sales agreements are non-exclusive and the Company does not believe it has any exposure based on the customers of its products.
Major Supplier
The Company has contracts with more than one supplier of the tissue raw material used in manufacturing of its products. During the fiscal year ended October 31, 2025, the Company purchased the tissue raw material used in manufacturing of its products from one supplier in the amount of $120,000 (
During the fiscal year ended October 31, 2024, the Company purchased the tissue raw material used in manufacturing of its products from one supplier in the amount of $
The Company’s supply agreements are non-exclusive and the Company does not believe it has any exposure based on the availability of raw materials and/or products from other suppliers.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles of the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the year. Management bases its estimates on historical experience and on other assumptions considered to be reasonable under the circumstances. However, actual results may differ from the estimates.
Those estimates and assumptions include estimates for credit loss reserves for accounts receivable, assumptions used in valuing inventories at net realizable value, impairment testing of recorded long-term assets, the valuation allowance for deferred tax assets, accruals for potential liabilities, assumptions made in valuing equity instruments issued for services, and assumptions used in the determination of the Company’s liquidity.
Cash Equivalents
The Company considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents.
F-8
Accounts Receivable
Accounts receivable are recorded at net realizable value on the date revenue is recognized. The Company provides allowances for doubtful accounts for estimated losses resulting from the inability of its customers to pay their obligation. If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability to repay, additional allowances may be required. The Company provides for potential uncollectible accounts receivable based on specific customer identification and historical collection experience adjusted for existing market conditions.
Most of the Company’s sales do not provide for installment payments and amounts are typically due upon invoicing. However, for those customers that are granted payment terms, the policy for determining past due status is based on the contractual payment terms of each customer, which are generally net 30 or net 60 days. Once collection efforts by the Company are exhausted, the determination for charging off uncollectible receivables is made. Management determined that no allowance for bad debts was necessary at October 31, 2025 and 2024. For the years ended October 31, 2025 and 2024, the Company recorded bad debt expense of $
Inventory
Inventory is stated at the lower of cost or net realizable value using the average cost method. The Company provides a reserve for potential excess, dated or obsolete inventories based on an analysis of forecasted demand compared to quantities on hand and any firm purchase orders, as well as product shelf life. At October 31, 2025 and 2024, the Company determined that no reserves were required in connection with our inventory.
Property and Equipment
Property and equipment are stated at cost. Depreciation and amortization are provided using the straight-line method over the estimated useful lives of the related assets. The estimated useful lives of property and equipment range from 3 to 15 years. Upon sale or retirement, the cost and related accumulated depreciation and amortization are eliminated from their respective accounts, and the resulting gain or loss is included in results of operations. Repairs and maintenance charges, which do not increase the useful lives of the assets, are charged to operations as incurred.
Non-marketable Securities
Non-marketable securities consist of equity investments in privately held companies, which are classified as other assets on the consolidated balance sheets. These non-marketable equity securities do not have readily determinable fair values. Under the measurement alternative election, the Company accounts for these non-marketable securities at cost and adjusted for observable price changes in orderly transactions for the identical or similar investments of the same issuer or upon impairment and are not eligible for the net-asset-value practical expedient from fair value measurement. The measurement alternative election is reassessed each reporting period to determine whether the non-marketable securities continue to be eligible for this election.
The Company periodically evaluates its non-marketable securities for impairment when events and circumstances indicate that the carrying amount of the investment may not be recovered. Impairment indicators may include, but are not limited to, a significant deterioration in earnings performance, credit rating, asset quality or business outlook or a significant adverse change in the regulatory, economic, or technological environment.
Under current U.S. GAAP, equity investments without readily determinable fair values are reported at cost minus impairment. However, impairment losses are recognized only if they are considered other-than- temporary. The Company evaluated its investment in non-marketable securities at October 31, 2025 and 2024, and determined such investment was impaired.
F-9
Leasehold Improvements
Leasehold improvements in excess of $1,000 that are made in connection with leases having a term of more than 12 months are capitalized by the Company and amortized over the shorter of the useful life of the asset or the remaining lease periods and renewals that are deemed to be reasonably certain at the date the leasehold improvements are purchased. Costs associated with leasehold improvements that do not exceed $1,000 are expensed as incurred.
Revenue Recognition
The Company follows the guidance of the Financial Accounting Standards Board (“FASB’) Accounting Standards Update (“ASU”) Topic 606 “Revenue from Contracts with Customers” which requires the Company to recognize revenue in amounts that reflect the prorata completion of the performance obligations of the Company required under the contracts.
The Company recognizes revenue only when it transfers control of a promised good or service to a customer in an amount that reflects the consideration it expects to receive in exchange for the good or service. Our performance obligations are satisfied and control is transferred at a point-in-time, which is typically when the transfer and title to the product sold has taken place and there is evidence of our customer’s satisfactory acceptance of the product shipment or delivery except in those instances when the customer has made prior arrangements with the Company to store the product purchased by the customer at the Company’s facilities that is to be delivered at a later date to be designated by the customer. Amounts received prior to satisfying the revenue recognition criteria are recorded as deferred revenue on the Company’s consolidated balance sheet.
Basic income (loss) per common share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of fully vested common shares outstanding during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of fully vested shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted average number of shares adjusted for any potentially dilutive debt or equity instruments.
At October 31, 2025, the Company had common shares issuable upon the exercise of options and warrants (vested and unvested), unissued restricted stock ( unvested), $ of convertible debt securities (convertible into a maximum of 41,667 shares) and $ of future obligations in connection with the purchase of the BioLumina assets that may be settled through the issuance of common stock (convertible into a maximum of 40,000 shares) that were not included in the computation of dilutive loss per share because their inclusion is anti-dilutive for the year ended October 31, 2025.
At October 31, 2024, the Company had common shares issuable upon the exercise of options and warrants (vested and unvested), unvested and unissued restricted stock and $ of convertible debt securities (convertible into a maximum of 120,834 shares) that were not included in the computation of dilutive loss per share because their inclusion is anti-dilutive for the nine months ended October 31, 2024.
All stock-based payments are recognized in the financial statements based on their fair values.
The Company periodically issues stock options and stock awards to employees and non-employees in non-capital raising transactions for services and for financing costs. The Company accounts for such grants issued and vesting based on ASC 718, Compensation-Stock Compensation whereby the value of the award is measured on the date of grant and recognized for employees as compensation expense on the straight-line basis over the vesting period. Recognition of compensation expense for non-employees is in the same period and manner as if the Company had paid cash for the services.
F-10
The fair value of the Company’s stock options is estimated using the Black-Scholes-Merton Option Pricing model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the stock options or restricted stock, and future dividends. Compensation expense is recorded based upon the value derived from the Black-Scholes-Merton Option Pricing model and based on actual experience. The assumptions used in the Black-Scholes-Merton Option Pricing model could materially affect compensation expense recorded in future periods.
Research and Development Costs
Research and development costs consist of direct and indirect costs associated with the development of the Company’s technologies. These costs are expensed as incurred. Our research and development expenses were approximately $
Income Taxes
The Company files a consolidated tax return that includes all of its subsidiaries.
Provisions for income taxes are based on taxes payable or refundable for the current year taxable income for federal and state income tax reporting purposes and deferred income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss carryforwards. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of the operations in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some or all of the deferred tax assets will not be realized.
The Company accounts for uncertain tax positions in accordance with FASB Topic 740 – Income Taxes. This pronouncement prescribes a recognition threshold and measurement process for financial statement recognition of uncertain tax positions taken or expected to be taken in a tax return. The interpretation also provides guidance on recognition, derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition.
For the years ended October 31, 2025 and 2024 the Company incurred operating losses, and therefore, there was not any income tax expense amount recorded during those periods. There is a full valuation allowance established for the tax benefit associated with the net losses for the years ended October 31, 2025 and 2024.
Fair Value of Financial Instruments
The Company includes fair value information in the notes to financial statements when the fair value of its financial instruments is different from the book value. When the book value approximates fair value, no additional disclosure is made.
The Company follows FASB ASC 820, Fair Value Measurements and Disclosures, which defines fair value, establishes a framework for measuring fair value and enhances disclosures about fair value measurements. It defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company’s financial instruments consist of cash and cash equivalents, accounts payable, accrued liabilities and convertible debt. The estimated fair value of cash, accounts payable and accrued liabilities approximate their carrying amounts due to the short-term nature of these instruments.
F-11
The Company follows the provisions of ASC 820 with respect to its financial instruments. As required by ASC 820, assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to their fair value measurement.
Level one — Quoted market prices in active markets for identical assets or liabilities;
Level two — Inputs other than level one inputs that are either directly or indirectly observable such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and
Level three — Unobservable inputs that are supported by little or no market activity and developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use.
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.
Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each quarter.
The carrying amounts of financial assets and liabilities, such as cash and cash equivalents, accounts receivable, accounts payable and other payables, approximate their fair values because of the short maturity of these instruments. The carrying values of convertible notes approximate their fair values because interest rates on these obligations are based on prevailing market interest rates.
Operating Lease Obligations
Under the provisions of Accounting Standards Update (ASU) No. 2016-02 (Topic 842) (“ASC 842”), the Company recognizes a right of use (“ROU”) asset and corresponding lease liability for all operating leases upon commencement of the lease.
The Company’s policy is to treat operating leases that have a term of one year or less at lease commencement date and do not include a purchase option that is reasonably certain of exercise, consistent with the lease recognition approach as previously outlined under ASC 840. In addition, month to month leases which do not involve additional financial commitments on the part of the Company are also treated consistent with the lease recognition approach as previously outlined under ASC 840. The Company has established a capitalization threshold of $15,000 in determining whether any future operating leases will be capitalized.
Subsequent Events
The Company has evaluated subsequent events that occurred after October 31, 2025 through the financial statement issuance date for subsequent event disclosure or recording.
Recently Issued Accounting Pronouncements
In November 2024, FASB issued ASU 2024-03 Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) Disaggregation of Income Statement Expenses. The guidance in ASU 2024-03 requires public business entities to disclose in the notes to the financial statements, among other things, specific information about certain costs and expenses including purchases of inventory; employee compensation; and depreciation and amortization expense for each caption on the income statement where such expenses are included. The update is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted, and the amendments may be applied prospectively to reporting periods after the effective date or retrospectively to all periods presented in the financial statements. The Company is currently evaluating the provisions of this guidance and assessing the potential impact on its financial statement disclosures.
We have reviewed all accounting pronouncements recently issued by the FASB and the SEC. The authoritative pronouncements that we have already adopted did not have a material effect on our financial condition, results of operations, cash flows or reporting thereof, and except as otherwise noted above, we do not believe that any of the authoritative pronouncements that we have not yet adopted will have a material effect upon our financial condition, results of operations, cash flows or reporting thereof.
F-12
NOTE 3 – GOING CONCERN
The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. The Company incurred net losses of $
United States Food and Drug Administration (“FDA”) regulations which were announced in November 2017 and which became effective in May 2021 require that the sale of products that fall under Section 351 of the Public Health Services Act pertaining to marketing traditional biologics and human cells, tissues and cellular and tissue based products (“HCT/Ps”) can only be sold pursuant to an approved biologics license application (“BLA”). Notwithstanding the above, certain states, including Florida (SB 1768) have approved legislation that permits the use and sale of products that would otherwise be restricted under current FDA regulations. The Company has not obtained any opinion or ruling regarding the Company’s operations and whether the processing, sales and distribution of the products it currently produces would be subject to the FDA’s previously announced intended enforcement policies regarding HCT/P’s.
As a result of the above, the Company’s efforts to establish a stabilized source of sufficient revenues to cover operating costs has yet to be achieved and ultimately may prove to be unsuccessful unless (a) the Company’s ability to process, sell and distribute the products currently being produced or developed in the future are not restricted; and/or (b) additional sources of working capital through operations or debt and/or equity financings are realized. These financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Management anticipates that the Company will remain dependent, for the near future, on additional investment capital to fund ongoing operating expenses and research and development costs related to development of new products and to perform required clinical studies in connection with the sale of its products. The Company does not have any assets to pledge for the purpose of borrowing additional capital. In addition, the Company relies on its ability to produce and sell products it manufactures that are subject to changing technology and regulations that it currently sells and distributes to its customers. The Company’s current market capitalization, common stock liquidity and available authorized shares may hinder its ability to raise equity proceeds. The Company anticipates that future sources of funding, if any, will therefore be costly and dilutive, if available at all.
In view of the matters described in the preceding paragraphs, recoverability of the recorded asset amounts shown in the accompanying consolidated balance sheet assumes that (a) the Company is able to continue to produce products or obtain products under supply arrangements which are in compliance with current and future regulatory guidelines; (b) the Company will be able to establish a stabilized source of revenues, including efforts to expand sales internationally and the development of new product offerings and/or designations of products; (c) obligations to the Company’s creditors are not accelerated; (d) the Company’s operating expenses remain at current levels and/or the Company is successful in restructuring and/or deferring ongoing obligations; (e) the Company is able to continue its research and development activities, particularly in regards to remaining compliant with the FDA and ongoing safety and efficacy of its products; and/or (f) the Company obtains additional working capital to meet its contractual commitments and maintain the current level of Company operations through debt or equity sources.
There is no assurance that the products we currently produce will not be subject to the FDA’s previously announced intended enforcement policies regarding HCT/P’s and/or the Company will be able to complete its revenue growth strategy. There is no assurance that the Company’s research and development activities will be successful or that the Company will be able to timely fund the required costs of those activities. Without sufficient cash reserves, the Company’s ability to pursue growth objectives will be adversely impacted. Furthermore, despite significant effort since July 2015, the Company has thus far been unsuccessful in achieving a stabilized source of revenues.
If revenues do not increase and stabilize, if the Company’s ability to process, sell and/or distribute the products currently being produced or developed in the future are restricted, and/or if additional funds cannot otherwise be raised, the Company might be required to seek other alternatives which could include the sale of assets, closure of operations and/or protection under the U.S. bankruptcy laws.
As of October 31, 2025, based on the factors described above, the Company concluded that there was substantial doubt about its ability to continue to operate as a going concern for the 12 months following the issuance of these financial statements.
F-13
NOTE 4 – INVENTORIES
| October 31, 2025 |
October 31, 2024 |
|||||||
| Raw materials and supplies | $ | $ | ||||||
| Finished goods | ||||||||
| Total inventories | $ | $ | ||||||
NOTE 5 – PROPERTY AND EQUIPMENT
| October 31, 2025 |
October 31, 2024 |
|||||||
| Finance lease equipment | $ | $ | ||||||
| Manufacturing equipment | ||||||||
| Less: accumulated depreciation | ( |
) | ( |
) | ||||
| Total property and equipment, net | $ | $ | ||||||
Depreciation expense totaled $
NOTE 6 – EQUITY IN NON-MARKETABLE SECURITIES OF AFFILIATED ENTITY
| October 31, 2025 |
October 31, 2024 |
|||||||
| Equity in non-marketable securities | $ | |||||||
| Reserve on carrying value of investment in non-marketable securities | $ | ( |
) | ( |
) | |||
| Equity in non-marketable securities | $ | |||||||
During the year ended October 31, 2024, pursuant to a capital call notice received from Exotropin LLC, a privately held skin-care formulator (“Exotropin”), the Company invested an additional $45,000 in cash (representing its 8.96% equity interest at the time of the capital call).
During November 2024, the Company received a capital call notice from Exotropin, in which the Company’s pro-rata share was $126,000 (“November Capital Call”). The Company elected not to participate in the November Capital Call and as a result, its interest in Exotropin has been reduced to approximately 5.6%. There have been no further capital calls.
Both Greyt Ventures, LLC (“Greyt”), a principal shareholder of the Company and Skycrest Holdings, LLC, (“Skycrest”) a former principal shareholder of the Company, each own a 17.93% interest in Exotropin. In addition, Mr. Robert Smoley, a consultant and advisor to the Company was also the Chief Operating Officer of Exotropin (until November 2024). In addition, the Company’s CMO was granted an option to acquire up to 200,000 membership interests in Exotropin, of which 100,000 vested immediately and the remaining 100,000 will vest based on future sales of Exotropin attributed to the CMO. The option price is $20,000 for the 200,000 membership interests.
F-14
As of October 31, 2025 and 2024, the Company has recorded total reserves against the carrying value of its investment of Exotropin of $
The Company evaluated its ownership, contractual and other interests in this entity and determined the Company does not have a variable interest in this entity and therefore it is not required to be consolidated in the Company’s consolidated financial statements, as the Company is not the primary beneficiary and does not have the power to direct activities that most significantly impact the entities’ economic performance. The Company’s maximum loss exposure is limited to the carrying value of this investment.
Sales Representative Agreement
In November 2023, the Company entered into a Sales Representative Agreement (the “Sales Agreement”) with Exotropin to support the commercialization of its proprietary topical products. Under the Sales Agreement, the Company is entitled to receive commissions on the net sales value of Exotropin products sold to pre-approved customers introduced by the Company, including retailers (10%), wholesale distributors (5%), private label customers (10%), and direct-to-consumer customers (15%).
In connection with the Sales Agreement, the Company and Exotropin co-developed a topical product for the treatment of hair loss, branded as “ZEO HAIR GROW™ Powered By Exotropin™,” which launched in November 2024 (the “Collaboration”). Under the terms of the Collaboration, the Company is responsible for sales and marketing, and the parties agreed to share equally in the net profits from product sales, after reimbursement of direct cash costs incurred by either party.
On August 15, 2025, the Company provided Exotropin with formal notice of termination of the Sales Agreement for cause (see Note 14).
For the years ended October 31, 2025 and 2024, $
Joint Supply Agreement
During September 2023, the Company and Exotropin entered into an agreement whereby Exotropin agreed to supply the Moisturizer that the Company is obligated to supply under the Amended Skincare Agreement. Pursuant to the Sales Agreement, the Company paid Exotropin $235,000 representing the amount of Initial Purchase Order associated with the Company’s arrangement with Exotropin to supply the Moisturizer (“Moisturizer Prepayment”). On August 12, 2024, in connection with the mutual agreement to terminate the Amended Skincare Agreement, the Company and Exotropin entered into a settlement and general release (“Release”) whereby the parties released each other from all outstanding duties and/or obligations owed by one party to the other party as set forth in the Release including but not limited to Exotropin’s obligation to supply any Moisturizer to the Company pursuant to the Amended Skincare Agreement and the Company’s obligation to make or place any additional orders to Exotropin for the Moisturizer. In connection with the Release, Exotropin retained the Moisturizer Prepayment made by the Company to Exotropin, and Exotropin was not obligated to deliver any of the Moisturizer to the Company, including portion of the Moisturizer to be provided in connection with the Moisturizer Prepayment (see Note 14).
F-15
NOTE 7 – FINANCE LEASE OBLIGATIONS
During April 2025, the Company entered into a lease agreement for certain lab equipment in the amount of $
During June 2025, the Company entered into a lease agreement for certain lab equipment in the amount of $
As of October 31, 2025 and 2024, finance lease obligations were $
The weighted average remaining term of the Company’s finance leases as of October 31, 2025 was
|
|
||||
| Year Ended October 31, | Minimum Rent | |||
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total undiscounted finance lease payments | ||||
| Less: imputed interest | ( |
) | ||
| Present value of finance lease liabilities | $ | |||
Other Leases
The Company leases its administrative and research
facility on a month-to-month basis. Rent expense was $
NOTE 8 – RELATED PARTY TRANSACTIONS
For the years ended October 31, 2025 and 2024, the Company sold a total of approximately $
During the year ended October 31, 2024, the Company wrote-off the full balance of the advances payable to an affiliate of a former executive of $
F-16
During the year ended October 31, 2024, pursuant to a capital call notice received from Exotropin LLC, a privately held skin-care formulator (“Exotropin”),
NOTE 9 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES
| October 31, 2025 |
October 31, 2024 |
|||||||
| Accrued payroll related liabilities | $ | $ | ||||||
| Lab equipment and supplies payables | ||||||||
| Clinical trial and research payables | ||||||||
| Legal fees payable | ||||||||
| Other professional fees payable | ||||||||
| Interest payable | ||||||||
| Royalty payable | ||||||||
| Accrued commissions payable | ||||||||
| Construction payables | ||||||||
| Other payables and accrued expenses | ||||||||
| Total Accounts Payable and Accrued Expenses | $ | $ | ||||||
NOTE 10 – NOTES PAYABLE
| October 31, 2025 |
October 31, 2024 |
|||||||
| Convertible Promissory Notes | $ | $ | ||||||
| Unamortized discount | ( |
) | ( |
) | ||||
| Total Notes Payable | $ | $ | ||||||
Convertible Promissory Notes
During the period August 2023 through September 2023, the Company sold 2.9 Units (“Units”) to 4 investors in a private offering at a purchase price of $
F-17
The Notes may be prepaid by the Company, in whole, but not in part, at any time prior to the Maturity Date, subject to payment of a premium of 10%, provided that the Company gives the holders fifteen (15) business notice prior to prepayment, during which period, Investors may elect to convert the Notes and accrued but unpaid interest thereon into Shares at a conversion price equal to 80% of the average of the daily VWAP of the Shares (as defined in the Note) for twenty consecutive (20) trading days ending on the date the Company gives the holders of the Notes notice of prepayment.
Holders of the Notes (“Holders”) will have the right, at any time during the period commencing on April 1, 2024 and ending on the earliest to occur of the Maturity Date, the date of a Prepayment or the date of an automatic conversion, to convert the Note in whole, but not in part, and accrued interest thereon into Shares at a conversion price equal to 80% of the average of the daily VWAP of the Shares (as defined in the Note) for twenty consecutive (
In addition, the Notes and accrued but unpaid interest thereon will automatically convert into Shares in the event that prior to the Maturity Date, the Company consummates a “Qualified Financing” or a “Qualified Sale” (as defined in the Note) at a conversion price equal to 80% of the offering price of Shares sold in the Qualified Financing or 80% of the purchase price per Share to be received by stockholders following consummation of a Qualified Sale. The balance of the notes payable was $
On October 3, 2025, the Company offered each Holder of the Notes the opportunity to convert their Note on October 10, 2025 (including accrued interest outstanding) at a conversion price equal to $ per share (“Conversion Offer”). The Holders of a total of $
As of October 31, 2025, the remaining outstanding Notes of $
The fair value of the Warrants issued was $
During the year ended October 31, 2025 and October 31, 2024, the Company has paid $
The securities were offered and sold in a private offering exempt from the registration requirements of the Securities Act, pursuant to the exemptions from registration afforded by Rule 506(b) of Regulation D under the Securities Act.
F-18
NOTE 11 – INCOME TAXES
The Company files a consolidated federal income tax return that includes all of its subsidiaries. For the years ended October 31, 2025 and 2024, the Company incurred operating losses, and therefore, there was not any current income tax expense amount recorded during those periods.
The consolidated provision for income taxes for October 31, 2025 and 2024 consists of the following:
| Year Ended October 31, 2025 |
Year Ended October 31, 2024 |
|||||||
| Current: | ||||||||
| Federal | $ | $ | ||||||
| State | ||||||||
| Current Income Tax Expense (Benefit) | $ | $ | ||||||
| Deferred: | ||||||||
| Federal | $ | ( |
) | $ | ( |
) | ||
| State | ( |
) | ( |
) | ||||
| Deferred Income Tax Expense (Benefit) | ( |
) | ( |
) | ||||
| Change in Valuation Allowance | ||||||||
| Income tax provision | $ | $ | ||||||
Effective tax rates differ from the federal statutory rate of
|
October 31, 2025 |
October 31, 2024 |
|||||||
| Tax at federal statutory rate | $ | ( |
) | $ | ( |
) | ||
| State taxes, net of federal benefit | ( |
) | ( |
) | ||||
| Permanent differences | ||||||||
| Stock-based compensation | ||||||||
| Other | ( |
) | ( |
) | ||||
| Total income tax expense (benefit) | ( |
) | ( |
) | ||||
| Change in valuation allowance | ||||||||
| Income tax provision | $ | $ | ||||||
The Company had a federal net operating loss carryover of $
F-19
The tax effects of temporary differences and carry-forwards that give rise to deferred tax assets and liabilities for the Company were as follows:
| October 31, 2025 |
October 31, 2024 |
|||||||
| Deferred Tax Assets: | ||||||||
| Stock based compensation | $ | $ | ||||||
| Net operating loss carryforward-Federal | ||||||||
| Net operating loss carryforward-State | ||||||||
| Other | ||||||||
| Total deferred tax assets: | ||||||||
| Deferred Tax Liabilities: | ||||||||
| Property and equipment | ||||||||
| Total deferred tax liabilities: | ||||||||
| Valuation Allowance | ( |
) | ( |
) | ||||
| Net deferred tax assets | $ | $ | ||||||
FASB ASC 740 requires a valuation allowance against deferred tax assets if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. At October 31, 2025 and October 31, 2024, the net deferred tax asset was offset by a full valuation allowance.
Pursuant to Code Sec. 382 of the Internal Revenue Code (“the Code”), the utilization of net operating loss carryforwards may be limited as a result of a cumulative change in stock ownership of more than 50% over a three-year period. The Company may be subject to such limitation.
IRS Penalties
As of October 31, 2023, the Company had accrued $
NOTE 12 – CAPITAL STOCK
Preferred Stock
The Company is authorized to issue shares of $ par value preferred stock in one or more designated series, each of which shall be so designated as to distinguish the shares of each series of preferred stock from the shares of all other series and classes. The Company’s board of directors is authorized, without stockholders’ approval, within any limitations prescribed by law and the Company’s Articles of Incorporation, to fix and determine the designations, rights, qualifications, preferences, limitations and terms of the shares of any series of preferred stock.
F-20
Series C Preferred Shares
On August 17, 2022, the Company filed a Certificate of Designation for a newly created Series C Non-Convertible Preferred Stock consisting of shares, $ par value of authorized but unissued preferred stock of the Company (“Series C Preferred Shares”). The Company initially issued each of Skycrest and Greyt, 50 shares of the Series C Preferred Shares in connection with a “change in control” transaction” consummated in August 2022 (see Note 16). On December 17, 2024, the Company filed an Amendment (the “Amendment”) to the Certificate of Designation of our Series C Preferred Shares.
During December 2024, Skycrest requested that it be allowed to transfer the 50 shares of Series C Preferred Shares of the Company it holds to Ian T. Bothwell, the Company’s Chief Executive Officer and Chief Financial Officer (“Transfer”). In December 2024, the Board of Directors of the Company approved the Transfer and the Transfer was completed.
The Series C Preferred Shares vote together with shares of our common stock as a single class on all matters presented to a vote of stockholders and represent 51% of the voting control of the Company, except as required by law. The Series C Preferred Shares are not convertible into common stock, do not have any dividend rights and do have a nominal liquidation preference. The Series C Preferred Shares also have certain protective provisions, such as requiring the vote of a majority of Series C Preferred Shares to change or amend their rights, powers, privileges, limitations and restrictions, including the assignment of interests and redemption provisions.
Common Stock
On November 7, 2023, the Company filed a certificate of amendment to its Articles of Incorporation to affect a reverse split of our issued and outstanding common stock on a one-for-two-hundred basis. The reverse stock split was effective with FINRA on November 28, 2023 (the “Reverse Split”). The par value of the Company’s common stock was unchanged at $0.001 per share after the Reverse Split. All share and per share amounts have been retroactively adjusted to reflect the split as if it occurred at the earliest period presented.
2021 Plan
In September 2021, the Company adopted the 2021 Equity Incentive Plan (“2021 Plan”). The 2021 Plan permits the grant of Incentive Stock Options, Nonstatutory Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Units, and Performance Shares (an “Award”) to any person who is an employee or director of, or consultant to the Company. The maximum aggregate number of shares that may be issued pursuant to all Awards was shares. On June 6, 2023, the Company’s board of directors and stockholders holding a majority of the Company’s voting power, approved an increase in the number of shares of the Company’s common stock reserved for issuance under the Company’s 2021 Plan from 1,250,000 shares to shares.
The 2021 Plan is administered by (a) the board of the directors of the Company; or (b) a committee designated by the board, which Committee shall be constituted in such a manner as to satisfy the applicable laws and to permit such grants and related transactions under the Plan to be exempt from Section 16(b) of the Exchange Act in accordance with Rule 16b-3. Once appointed, such committee shall continue to serve in its designated capacity until otherwise directed by the board. The board of directors may at any time amend, suspend, or terminate the Plan; provided, however, that no such amendment shall be made without the approval of the Company’s shareholders to the extent such approval is required by applicable laws.
As of October 31, 2025, a total of Awards (net of Awards redeposited for future issuance) that have been awarded under the 2021 Plan remain issued and outstanding. As of October 31, 2024, a total of Awards (net of Awards redeposited for future issuance) that have been awarded under the 2021 Plan were issued and outstanding.
F-21
Sale Of Common Stock
On July 8, 2024, the Company completed a $500,000 private financing (“Financing”) with a single accredited investor (“Investor”). In the Financing, the Company sold and issued to the Investor shares of common stock (“Shares”) and warrants to purchase an additional
On July 25, 2025, ZEO entered into a subscription agreement with a single accredited investor (the “Investor”). Pursuant to which the Investor agreed to purchase 250,000 shares of our common stock (the “Shares”) in a private transaction for an aggregate purchase price of $1,000,000 (the “Purchase Price”). The Shares will be issued and sold and the Purchase Price paid in ten (10) equal monthly installments commencing on August 1, 2025 and ending on May 1, 2026. The August 1, 2025, September 1, 2025 and October 1, 2025 installment payments in the aggregate amount of $300,000 were made in accordance with the subscription agreement and the Company issued the investor an aggregate of 75,000 Shares. The Investor has not made the November 2025, December 2025 and January 2026 installment payments. As of October 31, 2025, the investor has yet to purchase the remaining 175,000 shares under the agreement. The proceeds from the issuance of those shares will be recorded upon receipt and issuance of the shares.
Restricted Stock Awards
2024 Issuances
Effective January 31, 2024, the Company and a legal firm performing services to the Company agreed to exchange $
Effective April 1, 2024, the Company
entered into sales distribution agreement with a sales and marketing company (“Salesco”). Salesco will be entitled to
receive commissions on sales of the Company’s products to customers introduced by Salesco in the form of cash and common stock
of the Company based on sales milestones. In connection with the agreement, the Company agreed to pay Salesco a monthly advance of
$
During April 2024 thru August 2024, in consideration for agreeing to serve on the Company’s medical advisory board, the Board approved the issuance to a total of twenty individuals an aggregate of 155,000 shares of unregistered common stock valued at ranges between $ per share and $per share, the closing price of the common stock of the Company on the respective grant dates. The shares vest annually over the three-year period from the date of grant. The Company will amortize $
F-22
On April 1, 2024, pursuant to the Company’s 2021 Incentive Stock Plan (“Incentive Plan”), the
2025 Issuances
Effective February 1, 2025, in connection with an agreement with an independent sales representative (“Representative”), the Company agreed to grant the Representative
On May 8, 2025, the Company entered into an agreement with a non-affiliated consultant (the “Consultant”) to advise the Company on strategic communication investor relation programs (“Consulting Agreement”).
Effective May 23, 2025,
On June 25, 2025, in connection with the Acquisition (see Note 16), the Company issued restricted shares of the Company’s common stock valued at $
F-23
A summary of unvested restricted stock activity for the years ended October 31, 2025 and 2024 are presented below:
| Number of Non-vested Shares |
Fair Value | Weighted-Average Grant Date Value |
||||||||||
| Non-vested Shares at October 31, 2023 | $ | $ | ||||||||||
| Non-vested Shares Granted | $ | $ | ||||||||||
| Vested | $ | ) | $ | |||||||||
| Expired/Forfeited | ) | $ | $ | |||||||||
| Non-vested Shares at October 31, 2024 | $ | $ | ||||||||||
| Non-vested Shares Granted | $ | $ | ||||||||||
| Vested | ) | $ | ) | $ | ||||||||
| Expired/Forfeited | ) | $ | ) | $ | ||||||||
| Non-vested Shares at October 31, 2025 | $ | $ | ||||||||||
The Company recorded a total of $ of stock-based compensation expense based on the grant date fair value of these shares during the year ended October 31, 2025, respectively. The Company recorded a total of $ of stock-based compensation expense based on the grant date fair value of these shares during the year ended October 31, 2024, respectively.
There was approximately $of unamortized compensation associated with unvested stock grants outstanding as of October 31, 2025 that will be amortized over their respective remaining service periods.
NOTE 13 – STOCK OPTIONS AND WARRANTS
The Company has issued option securities under its Incentive Plan and warrants entitling the holder to purchase shares of its common stock at specified prices and for specified exercise periods.
Options:
A summary of the Company’s option activity for the years ended October 31, 2024 and 2023 are presented below:
| Number of Shares |
Weighted- average Exercise Price |
Remaining Contractual Term (years) |
Aggregate Intrinsic Value |
|||||||||||||
| Outstanding at October 31, 2023 | $ | $ | ||||||||||||||
| Granted | $ | $ | ||||||||||||||
| Exercised | $ | - | $ | |||||||||||||
| Expired/Forfeited | ) | $ | $ | |||||||||||||
| Outstanding at October 31, 2024 | $ | $ | ||||||||||||||
| Granted | $ | $ | ||||||||||||||
| Exercised | $ | - | $ | |||||||||||||
| Expired/Forfeited | ) | $ | $ | |||||||||||||
| Outstanding at October 31, 2025 | $ | $ | ||||||||||||||
| Exercisable at October 31, 2025 | $ | $ | ||||||||||||||
F-24
2024 Options
During the year ended October 31, 2024, under its Incentive Plan, the Board approved the granting of options to certain employees, officers and directors to purchase 622,538 shares of its common stock.
| Exercise prices |
$ - $ |
|||
| Expected dividends | ||||
| Expected volatility | - | % | ||
| Risk free interest rate | - | % | ||
| Expected term of options | years |
During the year ended October 31, 2024, all options issued to Dr. Leider, the former Chief Executive Officer, that were not vested amounting to 190,000 at the time of the expiration of his employment agreement on May 31, 2024, were forfeited. In addition, all options issued to Dr. Leider and Dr. Howard Golub, the former Chief Science Officer, and an employee, that were vested amounting to , , and , respectively, at the time of the expiration of their employment agreements, were not exercised by August 31, 2024 as required under the Incentive Plan, and as a result expired.
2025 Options
During the year ended October 31, 2025, under its Incentive Plan, the Board approved the granting of options to certain employees to purchase shares of its common stock. The
The Company valued the options using a Black-Scholes option pricing model with the following assumptions:
| Exercise prices | $ |
|
||
| Expected dividends | ||||
| Expected volatility | % | |||
| Risk free interest rate | % | |||
| Expected term of options | years |
During the year ended October 31, 2025, the Board approved the granting of options to purchase an aggregate of shares of its common stock to Dr. Everts, Chief Science and Technology Officer of the Company and Mr. Ron Borsheim, Chief Sales Officer of the Company in accordance with their employment agreements. The options are exercisable until the fifth anniversary date of the date of issuance and had an aggregate fair value of $
| Exercise prices | $ | - $ | ||
| Expected dividends | ||||
| Expected volatility | - | % | ||
| Risk free interest rate | - | % | ||
| Expected term of options | years |
F-25
On May 8, 2025, under its Incentive Plan, the Board approved the granting of options to certain employees, officers and directors to purchase
| Exercise prices | $ | |||
| Expected dividends | ||||
| Expected volatility | % | |||
| Risk free interest rate | % | |||
| Expected term of options | years |
Options totaling that were previously issued to certain employees that were no longer employed by the Company as of October 31, 2025, were forfeited.
During the years ended October 31, 2025 and 2024, the Company amortized $ and $, respectively, of stock compensation costs associated with options vesting during the period.
There was approximately $of unamortized compensation associated with options outstanding as of October 31, 2025 that will be amortized over their respective remaining service periods.
Warrants:
A summary of the Company’s warrant activity for the years ended October 31, 2025 and 2024 are presented below:
| Number of Shares |
Weighted- average Exercise Price |
Remaining Contractual Term (years) |
Aggregate Intrinsic Value |
|||||||||||||
| Outstanding at October 31, 2023 | $ | $ | ||||||||||||||
| Granted | $ | $ | ||||||||||||||
| Exercised | $ | - | $ | |||||||||||||
| Expired/Forfeited | $ | - | $ | |||||||||||||
| Outstanding at October 31, 2024 | $ | $ | ||||||||||||||
| Granted | $ | $ | ||||||||||||||
| Exercised | ) | $ | $ | |||||||||||||
| Expired/Forfeited | $ | - | $ | |||||||||||||
| Outstanding at October 31, 2025 | $ | $ | ||||||||||||||
| Exercisable at October 31, 2025 | $ | $ | ||||||||||||||
2024 Warrants
On July 8, 2024, in connection with the Financing (see Note 12), the Company issued the Investor a cashless warrant to purchase an aggregate of
F-26
On July 11, 2024, the Company granted warrants to purchase
In August 2024, the Company entered into an agreement with a third party to provide consulting services for a one-year period. As consideration for agreeing to provide consulting services to the Company, the Company agreed to issue the consultant vested warrants to purchase
2025 Warrants
On May 8, 2025, the Company awarded warrants to purchase
| Exercise prices | $ | |||
| Expected dividends | ||||
| Expected volatility | % | |||
| Risk free interest rate | % | |||
| Expected term of options | years |
On July 25, 2025, the
During the year ended October 31, 2025 and 2024, the Company amortized $ and $, respectively, of stock compensation costs associated with warrants issued during the period.
F-27
There was approximately $ of unamortized compensation associated with warrants outstanding as of October 31, 2025 that will be amortized over their respective remaining service periods. There was approximately $ of unamortized compensation associated with warrants outstanding as of October 31, 2024 that will be amortized over their respective remaining service periods.
All stock compensation expense is classified under general and administrative expenses in the consolidated statements of operations.
NOTE 14 – COMMITMENTS AND CONTINGENCIES
Joint Venture with BioXtek, LLC
On February 4, 2025, the Company entered into a Binding Memorandum of Understanding (“Binding MOU”) with BioXtek, LLC, a Florida limited liability company (“BioXtek”) setting forth the terms of a joint development, manufacturing, marketing and funding arrangement to be entered into by the Company and BioXtek in various phases (“Joint Venture”).
The Joint Venture contemplates, among other matters:
| ● | The Company relocating its current operations located at Nova Southeastern University in Davie, Florida, to sublet space at the BioXtek Facility in Pompano Beach, Florida expected to be completed by May 31. 2025, which will include administrative, laboratory (research and development) and clean room (tissue processing) space, as well as shared common area space; |
| ● | The Company and BioXtek establishing a jointly-owned (50/50) special purpose entity (the “SPE”), to pursue the development and commercialization of agreed upon products including membrane patches that are used primarily in the wound care and surgical markets (“Membrane Products”), and conduct and complete required clinical trials and/or studies for mutually agreed upon indications and products with the goal of the SPE obtaining FDA approval in the form of a BLA license or other designated license required by the FDA to permit the SPE to commercialize the product(s) (the “SPE Business”). The Company and BioXtek have agreed to use their respective commercially reasonable efforts to secure funding for the SPE Business. In addition, under the terms of the Joint Venture, the SPE will become the exclusive distributor (subject to certain agreed upon exceptions for current customers of BioXtek) of the Membrane Products; |
| ● | In addition, as a result of the Joint Venture, the parties intend to seek operating efficiencies as a result of overlap in their respective operations, including administrative, laboratory and research personnel and research and manufacturing assets used in connection with the SPE Business and their respective individual businesses; |
The Company and BioXtek failed to execute and deliver the required series of definitive agreements documenting the Joint Venture, including the mutual agreement to modify certain terms as set forth in the Binding MOU with respect to the Company relocating its operations to BioXtek’s Pompano Beach, Florida manufacturing facility and the structure of how the parties will collaborate in future clinical trials and the sale of products that were intended to be sold pursuant to the Joint Venture (see Legal Matters below).
Employment Agreements
Dr. Peter A. M. Everts, Ph.D.
Effective February 7, 2025, Dr. Peter A. M. Everts, Ph.D. (“Dr. Everts”) was appointed the Company’s Chief Scientific and Technology Officer. Dr. Everts’ employment agreement provides for a base salary of $
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Dr. Everts’ employment with the Company is “At Will” meaning that his employment with the Company and his employment agreement may be terminated by the Company at any time, for any reason or for no reason at all and with or without “Cause” (as defined in the Agreement). Notwithstanding the foregoing, if at any time after the first ninety (90) days of the term, the Company terminates Dr. Everts’ employment without Cause or Dr. Everts terminates his employment with the Company for “Good Reason” (as defined in the Agreement), Dr. Everts will be entitled to receive an amount equal to one quarter (1/4) month’s salary for each successive three (3) months of employment completed as severance.
On July 18, 2025, Dr. Everts resigned his position with the Company effective August 1, 2025. As a result of Dr. Everts resignation, the Everts Option was forfeited effective August 1, 2025.
Purchase Commitments
During July 2025, the Company entered into an exclusive supply agreement (“Supply Agreement”) with a third-party contract manufacturer (“CDMO”) in connection with the manufacturing and processing of certain biological products (“CDMO Products”) that the Company intends to sell to third party medical providers. Under the terms of the Supply Agreement, the Company paid an initial deposit of $225,000 on August 1, 2025 and is required to pay an additional $225,000 deposit upon confirmation that the CDMO has initiated cGMP processing of the CDMO Products. Under the terms of the Supply Agreement, the deposits will be applied against the actual CDMO Products that are released to the Company. The Company has agreed to make a minimum of 8 purchase orders within specified periods based on satisfactory release of prior productions of the CDMO Products (“Minimum Purchase Orders”). In connection with each purchase order, the Company is required to have minimum deposits paid to the CDMO equal to 50% of the value of the purchase order. The Supply Agreement may be extended by the Company based on submitting a minimum amount of additional purchase orders after the Minimum Purchase Orders have been released.
Skincare Agreement
In September 2022, the Company entered into a joint development agreement and supply agreement with a third-party supplier (“Supplier”) that develops and manufactures various devices and related equipment and consumables used in the skincare industry (“Skincare Agreement”) that are marketed and sold directly and/or through its affiliates or third parties, in the United States of America and in most major international markets. Under the terms of the Skincare Agreement, the Company was obligated to provide and the Third Party was obligated to purchase a minimum volume of raw material ingredient (“Ingredient”) from the Company to be used as part of formulations in exclusive biologic topical products (“Products”) to be marketed and sold by Supplier during the first year of the Agreement in the amount of $
During September 2023, the Company and the Supplier agreed to enter into an Amendment and Restatement of the Skincare Agreement (“Amended Skincare Agreement”). Under the terms of the Amended Skincare Agreement, the products to be provided by the Company was modified to include both the Ingredient and a topical moisturizer (“Moisturizer”) supplied by Exotropin. The Ingredient and the Moisturizer are hereinafter referred to as the “Combined Product”. The Supplier was obligated to deliver a purchase order for a minimum of $
During November 2023, the Supplier paid the Company $
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On August 12, 2024, in connection with the mutual agreement to terminate the Amended Skincare Agreement, the Company and the Supplier entered into a settlement agreement and general release (“Settlement”). As of the date of the Settlement, both the Company and Exotropin had yet to deliver the Ingredient or the Moisturizer to the Supplier. In connection with the Settlement, the parties released each other from all outstanding duties and/or obligations owed by one party to the other party as set forth in the Settlement, including but not limited to the Company’s obligation to supply any Combined Product to the Supplier and the Supplier’s obligation to make or place any additional orders to the Company for the Combined Product. In connection with the Settlement, the Company retained the $403,000 payment that the Supplier made to the Company in connection with the Initial Purchase Order, and the Company was not obligated to deliver any of the Combined Product to the Supplier, including the portion of the Combined Product to be provided in connection with the Initial Purchase Order. Concurrent with the execution of the Settlement, the Company and Exotropin entered into a settlement and general release (“Release”) whereby the parties released each other from all outstanding duties and/or obligations owed by one party to the other party as set forth in the Release including but not limited to Exotropin’s obligation to supply any Moisturizer to the Company pursuant to the Amended Skincare Agreement and the Company’s obligation to make or place any additional orders to Exotropin for the Moisturizer. In connection with the Release, Exotropin retained the Moisturizer Prepayment that was paid by the Company of $235,000 in November 2023, and Exotropin was not obligated to deliver any of the Moisturizer to the Company, including portion of the Moisturizer to be provided in connection with the Moisturizer Prepayment.
As a result of the above settlements, the Company has recorded $
Deferred Revenue
Amounts received by the Company for products that have yet to be delivered to the customers as of October 31, 2025 and October 31, 2024 are reflected in the Company’s balance sheet as deferred revenues and were comprised of the following:
| October 31, 2025 |
October 31, 2024 |
|||||||
| Advances On Future Purchases Of Inventory | $ | $ | ||||||
| Sales To Customers Not Yet Delivered | ||||||||
| Total Deferred Revenue | $ | $ | ||||||
Legal Matters
Albert Mitrani and Dr. Maria Ines Mitrani
On June 7, 2023, the Company filed a four-count complaint with the Seventeenth Judicial Circuit in and for Broward County, Florida against Albert Mitrani and Dr. Maria Ines Mitrani, co-founders of the Company. Albert Mitrani was a former director and executive officer of the Company (most recently serving as Chief Executive Officer from September 2019 to July 2022 and as Executive Vice President of Sales from July 2022 until his termination in May 2023) and Dr. Mitrani is a former director and former executive officer of the Company (serving as Chief Science Officer from November 2016 until her termination in April 2023). The complaint alleges (i) breach of contract; (ii) breach of fiduciary duty; and (iii) tortious interference with business relationships; and seeks injunctive relief, in connection with, inter alia, non-solicitation and non-competition violations, misappropriation of Company materials and proprietary information resulting in unjust enrichment, causing detriment to business relationships and goodwill towards customers and physicians, self-dealing and misconduct afoul to the Company’s business interests as members of the Company’s board of directors, executive officers and minority equity interest holders—all causing irreparable harm to the Company. The complaint seeks injunctive relief, in addition to both compensatory and punitive damages.
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Effective November 13, 2023, the Company entered into a settlement agreement with Albert Mitrani and Dr. Maria Ines Mitrani, pursuant to which it resolved various claims against the Mitranis, including those set forth in the previously reported Florida state action the Company had filed against the Mitranis. As part of the settlement, Albert Mitrani and Dr. Maria Ines Mitrani returned to the Company an aggregate of shares of the Company’s common stock held by them respectively and the parties exchanged mutual releases.
Consultants
Effective August 5, 2024, the Company entered into a settlement agreement with a prior consultant of the Company, pursuant to which it resolved various claims that had been brought by the Company against the consultants. As part of the settlement, the consultants agreed to return to the Company shares of ZEO common stock held by the consultants in exchange for a payment of $
Dr. Leider
The Company’s employment agreement with Dr. Harry Leider, its former Chief Executive Officer (“Leider Employment Agreement”) had an initial term that ended May 31, 2024. The Leider Employment Agreement was not renewed and accordingly, the Employment Agreement expired and the employment of Dr. Leider by the Company ended on May 31, 2024.
Effective August 12, 2024, the Company and Dr. Leider entered into a settlement agreement and general release whereby the Company agreed to pay Dr. Leider $40,000 in exchange for each party executing mutual releases in connection with the non-renewal of Dr. Leider’s employment agreement.
Dr. Golub
The Company’s employment agreement Dr. Howard Golub, its former Chief Science Officer (“Golub Employment Agreement”) had an initial term that ended May 31, 2024. The Golub Employment Agreement was not renewed and accordingly, the Golub Employment Agreement expired and the employment of Dr. Golub by the Company ended on May 31, 2024.
On November 19, 2024, Dr. Golub (“Plaintiff”), filed a complaint in the Circuit Court of the Seventeenth Judicial Circuit in and for Broward County, Florida against the Company, alleging a breach of contract as a result of the Company’s failure to pay Plaintiff severance in the amount of $150,000 in connection with the non-renewal of Golub Employment Agreement. Plaintiff is demanding judgment in the amount of $
Exotropin
On August 15, 2025, the Company terminated the Sales Agreement for cause. Exotropin filed a complaint (case No. CACE-25-013178, in the Circuit Court of the Seventeenth Judicial Circuit in and for Broward County, Florida) against the Company for declaratory judgment on August 29, 2025, concerning the parties’ June 19, 2024, Amended and Restated Sales Representative Agreement, seeking declarations related to termination and the survival/enforceability of certain restrictive and other clauses. On November 6, 2025, the Company moved to dismiss Exotropin’s complaint and to strike the jury demand pursuant to the agreement’s jury waiver. The Company filed counterclaims on November 17, 2025, alleging, among other things, unjust enrichment tied to diverted sales, tortious interference with business relationships, and seeking imposition of a constructive trust, as well as recovery of attorneys’ fees and costs, with rights reserved to amend and supplement. On January 7, 2026, Exotropin filed a First Amended Complaint adding claims for breach of contract and breach of fiduciary duty and seeking injunctive and monetary relief. Pleadings and motion practice remain in progress. Discovery is ongoing; no depositions have been taken to date. The Company denies Exotropin’s allegations and disputes Exotropin’s entitlement to any relief. The Company continues to evaluate its legal options and intends to protect its rights under the Sales Agreement.
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BioXtex
In June 2025, BioXtek sought to terminate the Binding MOU and the Joint Venture for alleged breaches by the Company, which the Company contested. As the Company and BioXtek were not able to amicably resolve the dispute, on December 17, 2025, the Company commenced an action against BioXtek (case No. CACE-25-019364, in the Circuit Court of the Seventeenth Judicial Circuit in and for Broward County, Florida) and an amended complaint on January 5, 2026, asserting claims for breach of contract and implied covenant, fraudulent inducement, violation of the Florida Deceptive Unfair Trade Practices Act, equitable accounting, and declaratory judgment. The Company seeks damages expectancy/consequential losses, equitable relief, and fees. The Clerk of the Court issued a Summons for BioXtek, but BioXtek has not been served with the Summons and Amended Complaint. Therefore, BioXtek’s response to the Amended Complaint is not yet due. The case is pending. The Company continues to evaluate its legal options and intends to protect its rights under the Binding MOU and the Joint Venture.
Other
In addition to the foregoing, from time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in any such matter may harm our business.
NOTE 15 – OTHER INCOME
| Year Ended October 31, |
||||||||
| 2025 | 2024 | |||||||
| Other income (expense) | ||||||||
| Gain on write-off of advances payable to former officer and settlement on outstanding payables (see Note 8) | $ | $ | ||||||
| Gain, net of obligations in connection with termination of supply agreement (see Note 14) | ||||||||
| Resolution and settlement of long outstanding payables | ||||||||
| Commissions on sales of Exotropin products | ||||||||
| Proceeds from insurance claim | ||||||||
| Other | ||||||||
| Total | $ | $ | ||||||
NOTE 16 – ACQUISITION OF BIOLUMINA ASSETS
On June 25, 2025 (“Closing Date”), the Company entered into a stock purchase agreement with BioLumina, LLC (“BIO”), a Delaware limited liability company, and all of its members (each a “Member” and collectively “Members”), whereby the Company acquired all of the outstanding membership interests of BIO (“Acquisition”) held by the Members for a total purchase price of $
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The Purchase Price is to be paid as follows:
| (a) | A $25,000 cash payment (the “Cash Purchase Price”), paid on the Closing Date to the Members pro rata; and |
| (b) | restricted shares of the Company’s common stock valued at $ (the “Zeo Shares”) issued on the Closing Date, to the Members, pro rata; with respect to which the Members will be accorded (1) piggyback registration rights under the Securities Act of 1933, as amended and (2) a right to put their Zeo Shares back to the Company on the first anniversary of Closing (the “True Up Date”) at a price of $2.50 per share ($75,000 in the aggregate); and |
| (c) | A royalty, payable to the Members, pro rata, equal to 10% of the gross cash proceeds (excluding shipping, handling, returns and credits) received by the Company from the sale of BIO’s Inventory acquired at closing (the “Product”) during the first year following the Closing Date, up to a maximum of $100,000 (the “Royalty”) which Royalty will be payable to the Members, pro rata, within 5 business days of the True-Up Date. In the event the Royalty amount as of the True-Up Date is less than $100,000 (a “Shortfall”), then the Company agrees to pay the Members, pro rata, a cash payment in the amount of the Shortfall within 90 days after the True-Up Date. In addition, the Members shall have the option, to apply their pro rata share of the Royalty (inclusive of any Shortfall), to the purchase of additional restricted shares of the Company’s common stock at purchase price equal to 75% of the average closing trading price of the common stock for the 5 trading days immediately prior to the True-Up Date, provided however that in no event shall the purchase price be lower than $2.50 per Share. |
In connection with the Acquisition, the Company recorded an obligation of $16,500 representing the difference in the fair value of the ZEO Shares on the Closing Date ($58,500) and the amount that the Company has agreed to provide in the event of a Shortfall. At October 31, 2025, the Company recorded an additional obligation of $
NOTE 17 – SEGMENT INFORMATION
Under ASC 280, Segment Reporting, operating segments are defined as components of an enterprise where discrete financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”), in deciding how to allocate resources and in assessing performance. The Company operates and manages its business as one reportable and operating segment. The measure of segment assets is reported on the balance sheet as total assets.
The Company’s Chief Executive Officer, who is also the CODM reviews financial information presented and decides how to allocate resources based on net income (loss). Net income (loss) is used for evaluating financial performance.
Significant segment expenses include research and development, salaries, insurance, and stock-based compensation. Operating expenses include all remaining costs necessary to operate our business, which primarily include external professional services and other administrative expenses. The following table presents the significant segment expenses and other segment items regularly reviewed by our CODM for the years ended October 31, 2025 and 2024.
| Years ended October 31, |
||||||||
| 2025 | 2024 | |||||||
| Revenue | $ | $ | ||||||
| Cost of goods sold | ( |
) | ( |
) | ||||
| Salaries & consulting fees | ( |
) | ( |
) | ||||
| Professional fees | ( |
) | ( |
) | ||||
| Stock based compensation | ( |
) | ( |
) | ||||
| Lab expenses | ( |
) | ( |
) | ||||
| Research & development | ( |
) | ( |
) | ||||
| Commissions | ( |
) | ( |
) | ||||
| Marketing | ( |
) | ( |
) | ||||
| Office expenses & other | ( |
) | ( |
) | ||||
| Other income (expenses), net | ( |
) | ||||||
| Net loss | $ | ( |
) | $ | ( |
) | ||
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NOTE 18 – SUBSEQUENT EVENTS
Private Offering – Common Stock and Warrants
From November 2025 to January 2026, the Company sold Units to 8 investors for an aggregate purchase price of $
Common Stock and Warrant Awards
On January 14, 2026, pursuant to the Company’s 2021 Incentive Stock Plan (“Incentive Plan”), the Company’s Compensation Committee (“Comp Board”) awarded shares of Zeo common stock to Ian Bothwell, the Company’s Chief Executive Officer and shares of the Company’s common stock to Dr. George Shapiro, the Company’s Chief Medical Officer. In addition, pursuant to the Incentive Plan, the Comp Committee approved the granting of options to certain employees to purchase shares of its common stock. The options exercise price is $
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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures.
Evaluation of Controls and Procedures.
In accordance with Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), our management is required to perform an evaluation under the supervision and with the participation of the Company’s management, including the Company’s principal executive and principal financial officers, or persons performing similar functions, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period.
Based on their evaluation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of October 31, 2023, our Principal Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures were not effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Management’s Report on Internal Control Over Financial Reporting
General
Our management (currently Ian Bothwell, our Chief Executive Officer and Chief Financial Officer) is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act, as a process designed by, or under the supervision of, the Company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the Company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that: pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company; provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the company; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.
As of October 31, 2025, management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control-Integrated Framework of 2013 issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and SEC guidance on conducting such assessments.
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Based on that evaluation under this framework, our management concluded that as of October 31, 2025, our internal control over financial reporting was not effective because of the following material weaknesses:
| ● | Due to our small number of employees and resources, we have limited segregation of duties, as a result of which there is insufficient independent review of duties performed. |
| ● | Due to our small number of employees and resources, we have limited segregation of duties, as a result of which do not have the ability to implement internal controls over the granting of access to our IT environment. |
| ● | As a result of the limited number of accounting personnel, we rely on inexperienced staff and outside consultants for the preparation of our financial reports, including tax preparation, which could require adjustments and lead to overlooking items requiring disclosure. |
| ● | As a result of the Company’s limited financial and personnel resources, there may be difficulties in timely analyzing and identifying potential operational and disclosure transactions within management and to comply with financial reporting regulations. |
Management’s Remediation Initiatives
In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we have expanded our accounting and administrative support staff during the fiscal year ended October 31, 2025. We also continue to engage outside tax consultants to assist in advising the Company in tax matters on an ongoing basis.
If and when the Company obtains sufficient capital resources, the Company intends to hire additional personnel with sufficient U.S. GAAP knowledge and business experience and to segregate appropriate duties among them. The Company has also begun efforts to further automate its accounting, sales ordering and inventory management functions.
Our board of directors consists of a majority of independent directors. We have also established an audit committee of our board of directors consisting of two independent directors, which is responsible for the oversight in the establishment and monitoring of required internal controls and procedures such as reviewing and approving estimates and assumptions made by management). We plan to seek additional independent director candidates in the proximate future.
This report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this annual report.
Changes in Internal Controls
No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the fourth quarter ended October 31, 2025 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
Item 9B. Other Information.
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PART III
Item 10. Directors, Executive Officers and Corporate Governance.
Directors and Executive Officers
Below are the names of and certain information regarding the Company’s current executive officers and directors:
| Name: | Age: | Position: | Director or Officer Since: | |||
| Ian T. Bothwell | 65 | Chief Executive Officer Chief Financial Officer and Director | November 4, 2016 | |||
| Dr. George Shapiro | 65 | Chief Medical Officer and Director | February 7, 2019 | |||
| John D. Kisiday, Ph.D. | 55 | Chief Science Officer | January 23, 2026 | |||
| Chuck Bretz | 68 | Director – Chairman of the Board | September 23, 2022 | |||
| Gurvinder Pal Singh | 64 | Director | September 23, 2022 | |||
| S. Jerry Glauser | 78 | Director | September 23, 2022 | |||
| Leathem Stearn | 77 | Director | September 23, 2022 |
Directors are elected to serve until the next annual meeting of stockholders and until their successors are elected and qualified. Directors are elected by a plurality of the votes cast at the annual meeting of stockholders and hold office until the expiration of the term for which he or she was elected and until a successor has been elected and qualified.
Executive officers are appointed by, and serve at the pleasure of, the board of directors of the Company, subject to any contractual arrangements.
Professional Experience
Ian T. Bothwell was elected as a member of the board of directors of the Company effective September 11, 2019. Mr. Bothwell previously served as a member of the board of directors of the Company from March 8, 2017 until his resignation in April 2018, when the Company executed a Plan and Agreement of Reorganization. Mr. Bothwell has served as the Chief Executive Officer since December 24, 2025 and served as the Interim Chief Executive Officer from June 1, 2024 through December 23, 2024 and Chief Financial Officer of the Company since November 4, 2016. In addition, he previously served as Interim Chief Executive Officer of the Company from November 22, 2022, until June 6, 2023. From 2003 through November 2015, Mr. Bothwell served in various executive positions for Central Energy GP LLC, the general partner of Central Energy Partners LP, a previously publicly traded master limited partnership. From July 2007 through November 2015, Mr. Bothwell served as President and a director of Regional Enterprises, Inc. Since April 2007, Mr. Bothwell has served as the President and controlling member of Rover Advanced Technologies, LLC, a company formed to provide management solutions to the public transportation industry. Since 2015, Mr. Bothwell has also served as the President and controlling member of CountOnMe Inc., a company that provides software solutions for the educational industry. Mr. Bothwell received his Bachelor of Science in Business Administration from Boston University in 1984.
Dr. George Shapiro was elected as a member of the board of directors of the Company effective February 2019. Since September 2018, Dr. Shapiro has served as the Company’s Chief Medical Officer. George C. Shapiro has been in practice for over 27 years. His career in medicine began in 1988 when he graduated from New York Medical College. An internship and residency then followed at Albert Einstein college of Medicine, after which, Dr. Shapiro completed a Cardiovascular Disease fellowship at Columbia University College of Physicians and Surgeons in 1994. Dr. Shapiro is currently a cardiologist in private practice.
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John D. Kisiday, Ph.D., who joined the Company as its Chief Science Officer in January 2023, has almost 30 years of experience in the development and translation of tissue-engineering and regenerative-medicine therapies. His work includes therapies based on cells, biomaterials, and drugs intended for orthopedic applications. He has broad expertise in basic research, autologous cell-therapy development, multidisciplinary scientific collaboration, and the generation and critical evaluation of high-quality scientific data. From September 2022 until joining ZEO, Dr. Kisiday served as an independent scientific consultant, advising companies engaged in orthobiologics and biomaterials for delivery of drugs and/or cells. Concurrently, Dr. Kisiday served as an Adjunct Professor in the Department of Chemical Engineering at the University of Wyoming where he taught courses in biomaterials and biotransport, supervised research, and developed proposals for the use of microparticle scaffolds for cell and drug delivery. From 2005 to September 2022, Dr. Kisiday held faculty appointments in the Department of Clinical Sciences at Colorado State University, where he advanced from Assistant Professor to Associate Professor with tenure. His academic work focused on mesenchymal stromal cell and connective tissue cell expansion and differentiation, orthobiologics, cartilage tissue engineering, and mechanobiology. During his tenure, he oversaw research programs, supervised research personnel, and produced peer -reviewed publications and conference presentations. Dr. Kisiday received his Ph.D. in Biological Engineering from the Massachusetts Institute of Technology, an M.S. in Mechanical Engineering from the University of California, Berkeley, and a B.S. in Engineering Sciences from Rutgers University.
Chuck Bretz became a director of the Company and Vice Chairman of the Board on September 23, 2022 and subsequently became Chairman of the Board. Mr. Bretz has been a practicing attorney for the last 40 years in both the private and public sectors. Since 1999, Mr. Bretz, has been a principal of the Joliet, Illinois law firm he founded, which is now known as Chuck Bretz & Associates, P.C. The firm advises various businesses in multiple commercial and real estate matters. Mr. Bretz is also currently actively involved in advising entrepreneurs across the country in structuring and negotiating business and real estate transactions.
Gurvinder Pal Singh joined our Board of Directors on September 23, 2022, has over 35 years of professional experience in business strategy, corporate finance and financial accounting covering varied areas such as mergers and acquisitions, statutory compliance, capital raising, budgeting and internal controls, audit, financial management, risk management, investor relations and tax planning. Since 1996, he has served as Chief Finance Officer of Modi Holdings, whose holdings include various companies in India, Singapore and the U.S., in the fields of mobile services, mobile devices, mobile retain, healthcare, new energy and wellness. Mr. Singh is a graduate of the University of New Delhi and a Chartered Accountant in India.
S. Jerry Glauser joined the Company’s board of directors on September 23, 2022. He has been in the automobile business for 50 years, starting in the family business in South New Jersey. In 1973, Mr. Glauser bought his first dealership in Sarasota Florida and over the next three decades expanded to ownership of a dozen dealerships in Florida. In 2004, he sold his Florida dealerships and acquired a Mercedes-Benz dealership in Denver, Colorado, which he sold in 2006. He then bought a Mercedes-Benz dealership in Houston, Texas, which he operated until its sale. For the last eight years, Mr. Glauser has been a private investor in various biotech companies and real estate ventures.
Leathem Stearn joined the board of directors on September 23, 2002. Since 1970, Mr. Stearn been an inventor, designer, entrepreneur and investor in various industries and with multiple companies. In 1986, Mr. Stearn founded Scunci International, LLC, where he developed the “Scrunchy” product and Scunci Brand of women hair accessories. He managed the Company until its sale in 1988, but continues to hold and license the Scunci Trademark® world-wide. From 1992 to1995, Mr. Stearn was a partner and CEO of Artnet, a company which he co-founded that became the leading art information company in the Art industry. Mr. Stearn has also founded or co-founded, developed and managed a number of other ventures including; Showcase International, LLC (from 1989 to 1992), which developed the first entertainment industry multi-media portfolio database; Smith Stearn Yachts LLC (from 2004 to 2010), which developed and operated a yacht sharing business and a number of other companies in the maritime industry.
Family Relationships
None.
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Board Committees
The Board has established three standing committees; an audit committee, a compensation committee and a nominating and corporate governance committee. The members of the audit committee are Messrs. Singh and Glauser, with Mr. Singh acting as Chairman, the members of the compensation committee are Mr. Bretz and Mr. Stearn, with Mr. Bretz acting as Chairman and the members of the nominating and corporate governance committee are Messrs. Bretz and Singh, with Mr. Bretz serving as Chairman.
Independence
The Board has determined that each of our non-executive directors is “independent” within the meaning of the applicable rules and regulations of the SEC and the listing standards of the Nasdaq Stock Market.
In addition, we believe Mr. Singh qualifies an “audit committee financial expert” as the term is defined by the applicable rules and regulations of the SEC and the Nasdaq Stock Market listing standards, based on his business professional experience in the financial and accounting fields. At the time of the listing of our common stock for trading on the Nasdaq Stock Market, we are required to certify to the Nasdaq Stock Market, that our audit committee has, and will continue to have, at least one member who has past employment experience in finance or accounting, requisite professional certification in accounting, or other comparable experience or background that results in the individual’s financial sophistication.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Exchange Act requires our executive officers and directors and persons who own more than 10% of a registered class of our equity securities to file with the SEC initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of our common stock and other equity securities, on Forms 3, 4 and 5 respectively. Executive officers, directors and greater than 10% stockholders are required by the SEC regulations to furnish us with copies of all Section 16(a) reports that they file.
Based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons, we believe that all filing requirements applicable to our officers, directors and greater than 10% beneficial owners were complied with under Section 16 of the Exchange Act during the fiscal year ended October 31, 2025 and up through the date of this Annual Report except as follows:
| ● | Forms 4 for Skycrest Holdings, LLC, a former principal stockholder of the Company, reporting the acquisition of shares of our common stock, which filings were due on June 11, 2025 and June 23, 2025, were filed on June 12, 2025 and June 24, 2025, respectively, due to administrative oversights. |
| ● | A Form 4 for Wendy Grey, a principal stockholder of the Company, reporting the acquisition of shares of our common stock, which filing was due on May 12, 2025, was filed on May 16, 2025, due to an administrative oversight. |
Rule 10b5-1 Trading Arrangements
During the quarter ended October 31, 2025, no director or officer (as defined in Rule 16a-1(f) under the Exchange Act) of the Company adopted or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements (in each case, as defined in Item 408(a) of Regulation S-K).
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Item 11. Executive Compensation
The following table sets forth information concerning the total compensation paid or accrued by the Company during the last two fiscal years indicated to (i) all individuals that served as the Company’s principal executive officer or acted in a similar capacity for the Company at any time during the fiscal years ended October 31, 2025 and October 31, 2024; (ii) all individuals that served as the Company’s principal financial officer or acted in a similar capacity for the Company at any time during the fiscal years ended October 31, 2025 and October 31, 2024; and (ii) the other individuals who were serving as executive officers of the Company at the end of the fiscal year ended October 31, 2025 whose total compensation exceeded $100,000.
SUMMARY COMPENSATION TABLE
|
Name and Principal Position |
Fiscal |
Salary |
Bonus |
Stock |
Option |
Non-equity Incentive Plan Compensation ($) |
Nonqualified Deferred Compensation Earnings ($) |
All Other |
Total Actually |
||||||||||||||||||||||||||
| Ian T. Bothwell, | 2025 | 250,000 | -0- | -0- | 353,133 | (1) | -0- | -0- | 21,531 | (7) | 624,664 | ||||||||||||||||||||||||
| Chief Executive Officer and Chief Financial Officer(1) | 2024 | 245,461 | -0- | -0- | 59,487 | (1) | -0- | -0- | 19,222 | (7) | 324,170 | ||||||||||||||||||||||||
| Harry Leider, MD | 2025 | -0- | -0- | -0- | -0- | -0- | -0- | -0- | -0- | ||||||||||||||||||||||||||
| Former Chief Executive Officer(2) | 2024 | 189,583 | -0- | -0- | 133,000 | (2) | -0- | -0- | 47,199 | (6) | 369,782 | ||||||||||||||||||||||||
| Dr. George Shapiro, | 2025 | 242,436 | -0- | -0- | 353,133 | (3) | -0- | -0- | -0- | 595,569 | |||||||||||||||||||||||||
| Chief Medical Officer(3) | 2024 | 146,667 | -0- | -0- | 59,487 | (3) | -0- | -0- | -0- | 206,154 | |||||||||||||||||||||||||
| Dr. Peter Everts, | 2025 | 106,333 | -0- | -0- | 19,281 | (4) | -0- | -0- | -0- | 125,614 | |||||||||||||||||||||||||
| Chief Science Officer(4) | 2024 | -0- | -0- | -0- | -0- | -0- | -0- | -0- | -0- | ||||||||||||||||||||||||||
| Ron Borsheim, | 2025 | 131,250 | -0- | -0- | 29,167 | (5) | -0- | -0- | -0- | 160,417 | |||||||||||||||||||||||||
| Chief Sales Officer - Aesthetics(5) | 2024 | -0- | -0- | -0- | -0- | -0- | -0- | -0- | -0- | ||||||||||||||||||||||||||
| (1) | Mr. Bothwell has served as Chief Executive Officer since December 2025 and served as Interim Chief Executive officer from June 1, 2024 thru December 13, 2024 and Chief Financial Officer of the Company since November 4, 2016. From November 22, 2022, through June 6, 2023, he served as Interim Chief Executive Officer. During the year ended October 31, 2025, Mr. Bothwell received an option to purchase 55,000 shares of common stock of the Company with an aggregate grant value of $157,300. During the year ended October 31, 2024, Mr. Bothwell received an option to purchase 125,000 shares of common stock of the Company with an aggregate grant value of $293,750, of which 83,333 options ($195,833) and 24,306 options ($59,487) vested for the years ended October 31, 2025 and 2024, respectively. See Note 13 to the October 31, 2025 audited consolidated financial statements for a description of the assumptions used in determining the value of the options granted. |
| (2) | Dr. Leider served as Chief Executive Officer of the Company from June 6, 2023 until May 31, 2024. During the year ended October 31, 2024, 55,417 options ($133,000) to purchase shares of common stock of the Company awarded to Dr. Leider during the year ended October 31, 2023 vested. See Note 13 to the October 31, 2024 audited consolidated financial statements for a description of the assumptions used in determining the value of the options granted. |
All options issued to Dr. Leider, that were not vested amounting to 190,000 at the time of the expiration of his employment agreement were forfeited. In addition, all options issued to Dr. Leider that were vested amounting to 95,000 at the time of the expiration of his employment agreement, were not exercised by August 31, 2024 as required under the Incentive Plan, and as a result expired.
| (3) | Dr. George Shapiro has served as the Chief Medical Officer of the Company since September 2018. During the year ended October 31, 2025, Dr. Shapiro received an option to purchase 55,000 shares of common stock of the Company with an aggregate grant value of $157,300. During the year ended October 31, 2024, Dr. Shapiro received an option to purchase 125,000 shares of common stock of the Company with an aggregate grant value of $293,750, of which 83,333 options ($195,833) and 24,306 options ($59,487) vested for the years ended October 31, 2025 and 2024, respectively. See Note 13 to the October 31, 2024 audited consolidated financial statements for a description of the assumptions used in determining the value of the options granted. |
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| (4) | Dr. Peter Everts served as Chief Science Officer of the Company from February 1, 2025 until August 1, 2025. In connection with Dr. Everts’ employment agreement, Dr. Everts was issued a warrant to purchase 25,000 shares of common stock of the Company with an aggregate grant value of $77,125, of which 6,250 warrants ($19,281) of costs were amortized for the year ended October 31, 2025. See Note 13 to the October 31, 2025 audited consolidated financial statements for a description of the assumptions used in determining the value of the options granted. |
As a result of Dr. Everts’ resignation, all options issued to Dr. Everts in connection with his employment agreement, were forfeited.
| (5) | Ron Borsheim served as Chief Sales Officer – Aesthetics of the Company from April 1 2025 until November 30, 2025. In connection with Mr. Borsheim’s employment agreement, Mr. Borsheim was issued a warrant to purchase 40,000 shares of common stock of the Company with an aggregate grant value of $100,000, of which 11,667 warrants ($29,167) of costs were amortized for the year ended October 31, 2025. See Note 13 to the October 31, 2025 audited consolidated financial statements for a description of the assumptions used in determining the value of the options granted. |
As a result of Mr. Borsheim’s termination, all options issued to Mr. Borsheim in connection with his employment agreement, were forfeited.
| (6) | Dr. Leider received benefits totaling approximately $7,199 during the fiscal year ended October 31, 2024. Effective August 12, 2024, the Company and Dr. Leider entered into a settlement agreement and general release whereby the Company agreed to pay Dr. Leider $40,000 in exchange for each party executing mutual releases in connection with the non-renewal of Dr. Leider’s employment agreement. |
| (7) | Ian Bothwell received benefits totaling approximately $21,531 and $19,222 during fiscal years ended October 31, 2025 and 2024, respectively. |
We have no plans in place and have never maintained any plans that provide for the payment of retirement benefits or benefits that will be paid primarily following retirement including, but not limited to, tax qualified deferred benefit plans, supplemental executive retirement plans, tax-qualified deferred contribution plans and nonqualified deferred contribution plans.
Executive Employment Agreements
Ian T. Bothwell
The Company is party to an executive employment agreement with Ian T. Bothwell, our Chief Executive Officer and Chief Financial Officer.
Mr. Bothwell’s executive employment agreement, as amended to date, provides for a term expiring on December 31, 2025, an annual base salary currently fixed at $250,000. Mr. Bothwell’s executive employment agreement contains customary confidentiality and non-competition covenants. and specified expense reimbursement allowances.
John G. Kisiday, Ph.D.
The Company has entered into an employment agreement with John D. Kisiday, Ph.D., our Chief Science Officer, effective January 23, 2026. Dr. Kisiday’s Employment Agreement provides for a base salary of $175,000. Dr. Kisiday was also awarded a stock grant of 50,000 shares of common stock under our 2021 Incentive Plan. The stock grant vests as to 20,000 shares on the first anniversary of the of the employment agreement and 30,000 shares on the second anniversary of the employment agreement, contingent upon Dr. Kisiday’s continued employment with the Company. If he brings a commercially viable new product and/or business opportunity to ZEO outside the existing scope of the Company’s current line of business, Dr. Kisiday will be entitled to receive additional compensation therefor.
Dr. Kisiday’s employment with the Company is “At Will” meaning that his employment with the Company and his employment agreement may be terminated by the Company at any time, for any reason or for no reason at all and with or without “Cause” (as defined in the Agreement). Notwithstanding the foregoing, if at any time after the first ninety (90) days of the term, the Company terminates Dr. Kisiday’s employment without Cause or Dr. Kisiday terminates his employment with the Company for “Good Reason” (as defined in the Agreement), Dr. Kisiday will be entitled to receive severance in an amount equal to one quarter (1/4) month’s salary for each successive three (3) months of employment completed.
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Outstanding Equity Awards at Fiscal Year-End
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||
| Name (a) |
Number of Securities Underlying Unexercised Options Exercisable (b) |
Number of Securities Underlying Unexercised Options Unexercisable (c) |
Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (d) |
Option Exercise Price (e) |
Option Expiration Date (f) |
Stock Awards Number of Shares or Units of Stock That Have Not Vested (g) |
Market Value of Shares or Units of Stock That Have Not Vested (h) |
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (i) |
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units of Other Rights That Have Not Vested (j) |
|||||||||||||||||||||||||
| - | - | $ | 02/26/30 | - | - | - | $ | - | ||||||||||||||||||||||||||
| - | - | $ | 07/13/32 | - | - | - | $ | - | ||||||||||||||||||||||||||
| - | - | $ | 07/10/34 | - | - | - | $ | - | ||||||||||||||||||||||||||
| - | - | $ | 05/07/30 | - | - | - | $ | - | ||||||||||||||||||||||||||
| - | - | $ | 07/13/32 | - | - | - | $ | - | ||||||||||||||||||||||||||
| - | - | $ | 07/10/34 | - | - | - | $ | - | ||||||||||||||||||||||||||
| - | - | $ | 05/07/30 | - | - | - | $ | - | ||||||||||||||||||||||||||
2021 Plan
In September 2021, the Company adopted the 2021 Equity Incentive Plan (“2021 Plan”). The 2021 Plan permits the grant of Incentive Stock Options, Nonstatutory Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Units, and Performance Shares (an “Award”) to any person who is an employee or director of, or consultant to the Company. The maximum aggregate number of shares that may be issued pursuant to all Awards was 1,250,000 shares. On June 6, 2023, the Company’s board of directors and stockholders holding a majority of the Company’s voting power, approved an increase in the number of shares of the Company’s common stock reserved for issuance under the Company’s 2021 Plan from 1,250,000 shares to 2,500,000 shares.
The 2021 Plan is administered by (a) the board of the directors of the Company; or (b) a committee designated by the board, which Committee shall be constituted in such a manner as to satisfy the applicable laws and to permit such grants and related transactions under the Plan to be exempt from Section 16(b) of the Exchange Act in accordance with Rule 16b-3. Once appointed, such committee shall continue to serve in its designated capacity until otherwise directed by the board. The board of directors may at any time amend, suspend, or terminate the Plan; provided, however, that no such amendment shall be made without the approval of the Company’s shareholders to the extent such approval is required by applicable laws.
As of October 31, 2025, a total of 1,595,482 Awards (net of 1,243,647 Awards redeposited for future issuance) that have been awarded under the 2021 Plan remain issued and outstanding. As of October 31, 2024, a total of 1,386,288 Awards (net of 1,211,500 Awards redeposited for future issuance) that have been awarded under the 2021 Plan were issued and outstanding.
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Compensation of Directors Table
The following table summarizes all compensation paid to our non-executive directors for the fiscal year ended October 31, 2025.
| Name | Fees Earned Or Paid In Cash ($) |
Option/Equity Awards (#) |
Non-Equity Plan Compensation ($) |
Non-Qualified Deferred Compensation Earnings ($) |
All Other Compensation ($) |
Total ($) |
||||||||||||||||||
| Chuck Bretz | - | 10,000 | - | - | - | - | ||||||||||||||||||
| Jerry Glauser | - | 10,000 | - | - | - | - | ||||||||||||||||||
| Leathem Stearn | - | 10,000 | - | - | - | - | ||||||||||||||||||
| Gurvinder Pal Singh | - | 10,000 | - | - | - | - | ||||||||||||||||||
Narrative Disclosure to the Director Compensation Table
Each of our non-executive directors will be party to a Director’s Service Agreement. Pursuant to that agreement, non-employee directors will be compensated for their services by the annual issuance of warrants to acquire up to 5,000 shares of the Company’s common stock at an exercise price equal to fair market value of the common stock as of the date of grant (the “Director Warrants”).
On May 8, 2025, under its Incentive Plan, the Board approved the granting of Director Warrants to purchase an aggregate 40,000 shares of its common stock. 28,000 of the options vest immediately and 12,000 of the options vest over a 5-month period, expire five years from the date of grant at an exercise price of $2.86 per share and had an aggregate fair value of $114,400 at the date of grant.
The Director Warrants are subject to continued service by the director as a member of the board of directors. The agreement will also provide for indemnification of directors to the fullest extent permitted by Nevada law.
It is contemplated that non-executive directors will be granted a comparable amount of Director Warrants or stock options for each year of service. The Company has not yet authorized or issued Director Warrants or stock options for the year of service of its non-executive directors, which commenced on September 23, 2025.
Non-employee directors are also reimbursed for out-of-pocket costs incurred in connection with attending meetings.
Code of Ethics
Due to our small size, we have not adopted a Code of Ethics and Business Conduct that applies to our officers, directors and employees. We intend to adopt a Code of Ethics and Business Conduct in the near future as we grow our operations and hire additional employees.
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Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The following table sets forth, as of January 28, 2026, the beneficial ownership of our common stock by each director and executive officer, by each person known by us to beneficially own 5% or more of our common stock and by directors and executive officers as a group. Unless otherwise stated, the address of the persons set forth in the table is c/o the Company, 3321 College Ave, Suite 246, Davie, Florida 33314:
| Officers and Directors | Title | Shares | % of Class(1) |
% of Voting Power(2) |
||||||||||
| Ian Bothwell(3) | Chief Executive Officer and Chief Financial Officer and Director | 1,107,594 | 14.85 | % | 32.78 | % | ||||||||
| Dr. George Shapiro(4) | Chief Medical Officer and Director | 598,771 | 8.22 | % | 4.03 | % | ||||||||
| John D. Kisiday, Ph.D. | Chief Science Officer | - | - | - | ||||||||||
| Chuck Bretz(5) | Director – Chairman of the Board | 70,000 | * | * | ||||||||||
| Jerry Glauser(6) | Director | 403,334 | 5.57 | % | 2.73 | % | ||||||||
| Leathem Stearn(7) | Director | 273,334 | 3.78 | % | 1.85 | % | ||||||||
| Gurvinder Pal Singh(8) | Director | 20,000 | * | * | ||||||||||
| All officers and directors as a group (7 persons) | 2,473,033 | 30.79 | % | 40.58 | % | |||||||||
| Other 5% or Greater Stockholders | ||||||||||||||
| Greyt Ventures LLC(9) | 1,405,000 | 17.04 | % | 33.85 | % | |||||||||
| Dr. Bhupendra Kumar Modi(10) | 500,000 | 7.05 | % | 3.46 | % | |||||||||
| Skycrest Holdings LLC(11) | 461,371 | 6.51 | % | 3.19 | % | |||||||||
| * | Less than 1%. |
| (1) | Based on 7,089,941 shares of vested common stock outstanding as of January 28, 2026 | |
| (2) | Based on 7,089,941 shares of vested common stock and 100 Series C Preferred Shares outstanding as of January 28, 2026. The shares of common stock and the Series C Preferred Shares vote together as a single class on all matters presented to stockholders, except as required by Nevada law. Each Series C Preferred Share entitles the holder to 51.0% of the combined voting power of the Company’s capital stock and an aggregate of 51.0% for all 100 Series C Preferred Shares outstanding, notwithstanding the number of shares of common stock outstanding. | |
| (3) | Includes vested warrants to purchase 37,500 shares of common stock of the Company, vested options to purchase 330,000 shares of common stock of the Company under the Plan and 50 Series C Preferred Shares. | |
| (4) | Includes vested options to purchase 195,750 shares of common stock of the Company under the Plan. | |
| (5) | Includes vested options to purchase 70,000 shares of common stock of the Company under the Plan. | |
| (6) | Includes vested options to purchase 145,000 shares of common stock of the Company under the Plan. | |
| (7) | Includes 125,000 shares of common stock held of record by Stearn Enterprises LLC, of which Mr. Stearn is the sole beneficial owner. Includes vested options to purchase 145,000 shares of common stock of the Company under the Plan. | |
| (8) | Includes vested options to purchase 20,000 shares of common stock of the Company under the Plan. | |
| (9) | 20533 Biscayne Blvd., Suite 648, Aventura, FL 33180. Represents 250,000 shares of common stock, vested warrants to purchase 1,155,000 shares of common stock and 50 Series C Preferred Shares held of record by Greyt Ventures LLC, of which Ms. Wendy Grey is the sole member and manager. | |
| (10) | 6 Marina Boulevard # 63-18, Singapore 018985. Represents 250,000 shares of common stock held of record by Beyond 100 FZE and 250,000 shares of common stock held of record by Smart Co. Holding Pte. Ltd., each of which Dr. Modi is the sole beneficial owner | |
| (11) | 812 Meridian Lane, Hollywood FL 33020. Represents 461,371 shares of common stock held of record by Skycrest Holdings, LLC, of which Louis Birdman is the managing member. |
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The Company has not received any other filings by a third party indicating beneficial ownership of more than 5% of our outstanding voting capital stock that are not listed herein.
The persons named above have full voting and investment power with respect to the shares indicated. Under the rules of the SEC, a person (or group of persons) is deemed to be a “beneficial owner” of a security if he or she, directly or indirectly, has or shares the power to vote or to direct the voting of such security, or the power to dispose of or to direct the disposition of such security. Accordingly, more than one person may be deemed to be a beneficial owner of the same security. Beneficial ownership is determined in accordance with SEC rules and includes only vested securities and those securities which a person or entity may have the right to acquire and/or vest in the next 60 days, but excludes shares of common stock underlying options or other convertible securities held by any other person. Except as noted otherwise, the amounts reflected above are based upon information provided to the Company and filings with the SEC.
Securities Authorized for Issuance under Equity Compensation Plans
| Plan category | Number of securities to be issued upon exercise of outstanding options, warrants and rights |
Weighted- average exercise price of outstanding options, warrants and rights |
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) |
|||||||||
| Board Stock Compensation Plan(1) | -0- | - | 22,570 | |||||||||
| 2021 Equity Incentive Plan(2) | 1,172,482 | $ | 2.91 | 904,518 | ||||||||
| (1) | The Company is no longer using the Board Stock Compensation Plan to compensate its non-executive directors. | |
| (2) | As of October 31, 2025 |
Item 13. Certain Relationships and Related Transactions and Director Independence.
Review, Approval and Ratification of Related Party Transactions
Review, approval, or ratification of transactions with our executive officers, directors and significant stockholders are subject to approval or ratification by a majority of disinterested directors. Once our board of directors is comprised of a majority of independent directors, we anticipate that such transactions will require approval or ratification by a majority of our independent directors or a committee of the board of directors consisting of independent directors.
Interests in Affiliated Entities
During the year ended October 31, 2023, the Company invested $100,000 in cash (representing a 10% equity interest at the time of the investment) in the non-marketable equity securities of Exotropin LLC, a privately held skin-care formulator (“Exotropin”). Both Greyt, a principal shareholder of the Company and Skycrest, a former principal shareholder of the Company, each owned a 20% interest in Exotropin. In addition, Mr. Robert Smoley, a consultant and advisor to the Company was also the Chief Operating Officer of Exotropin (until November 2024). In addition, the Company’s Chief Medical Officer was granted an option to acquire up to 200,000 membership interests in Exotropin, of which 100,000 vested immediately and the remaining $100,000 will vest based on future sales of Exotropin attributed to the Chief Medical Officer. The option price is $20,000 for the 200,000 membership interests.
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During the year ended October 31, 2024, pursuant to a capital call notice received from Exotropin, the Company invested an additional $45,000 in cash (representing its 8.96% equity interest at the time of the capital call).
During November 2024, the Company received a capital call notice from Exotropin, in which the Company’s pro-rata share was $126,000 (“November Capital Call”). The Company elected not to participate in the November Capital Call and as a result, its interest in Exotropin has been reduced to approximately 5.6%.
In November 2023, the Company entered into a Sales Representative Agreement (the “Sales Agreement”) with Exotropin to support the commercialization of its proprietary topical products. On August 15, 2025, the Company provided Exotropin with formal notice of termination of the Sales Agreement for cause.
Sales to Related Parties
For the year ended October 31, 2025 and 2024, the Company sold a total of approximately $88,000 and $199,000 of product to a management services organization (“MSO”) that provides administrative services and contracts for medical supplies for several medical practices, of which Dr. George Shapiro, the Company’s Chief Medical Officer and a member of the board of directors has an indirect economic interest in the parent company that owns the MSO.
Transfer Of Series C Preferred Stock
In December 2024, Skycrest requested that it be allowed to transfer the 50 shares of Series C Preferred Shares of the Company it holds to Ian T. Bothwell, the Company’s Interim Chief Executive officer and Chief Financial officer (“Transfer”). In December 2024, the Board of Directors of the Company approved the Transfer and the Transfer was completed.
Item 14. Principal Accounting Fees and Services.
Weinberg & Company P.A. (“Weinberg”) as served as the Company’s independent registered public accounting firm for the fiscal years ended October 31, 2025 and October 31, 2024.
Audit Fees
The aggregate fees billed the Company for the fiscal years ended October 31, 2025 and October 31, 2024 for professional services rendered by Weinberg for their audit of our annual financial statements and review of financial statements included in our quarterly reports or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years were:
| Fiscal Year Ended October 31, 2025: | $ | 150,000 | ||
| Fiscal Year Ended October 31, 2024: | $ | 150,000 |
Audit-Related Fees
The aggregate fees billed the Company for the fiscal years ended October 31, 2025 and October 31, 2024 for assurance and related services by Weinberg that are reasonably related to the performance of the audit or review of the registrant’s financial statements and are not reported under Item 9(e)(1) of Schedule 14A.
| Fiscal Year Ended October 31, 2025: | $ | - | ||
| Fiscal Year Ended October 31, 2024: | $ | 10,300 |
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Tax Fees
The aggregate fees billed the Company for the fiscal years ended October 31, 2025 and October 31, 2024 for professional services rendered by Weinberg for tax compliance, tax advice, and tax planning.
| Fiscal Year Ended October 31, 2025: | $ | 25,000 | ||
| Fiscal Year Ended October 31, 2024: | $ | 25,000 |
All Other Fees
The aggregate fees billed the Company for the fiscal years ended October 31, 2025 and October 31, 2024 for products and services provided by Weinberg, other than the services reported in Items 9(e)(1) through 9(e)(3) of Schedule 14A.
| Fiscal Year Ended October 31, 2025: | $ | - | ||
| Fiscal Year Ended October 31, 2024: | $ | - |
Pre-Approval Policies and Procedures
We have not used Weinberg for financial information system design and implementation. These services, which include designing or implementing a system that aggregates source data underlying the financial statements or generates information that is significant to our financial statements, are provided internally or by other service providers. We did not engage Weinberg to provide compliance outsourcing services.
Our Board pre-approves all services provided by our independent registered public accounting firms. All of the above services and fees were reviewed and approved by the Board either before or after the respective services were rendered. The Board has considered the nature and amount of fees billed by Weinberg and believes that the provision of services for activities unrelated to the audit is compatible with maintaining our independence.
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PART IV
Item 15. Exhibits and Financial Statement Schedules.
The following documents are filed as part of this Report:
| (1) |
Financial Statements. The following consolidated financial statements and the report of our independent registered public accounting firm, are filed as “Item 8. Financial Statements and Supplementary Data” of this Report: |
| (2) | Financial Statement Schedules. |
Financial Statement Schedules are omitted because the information required is not applicable or the required information is shown in the financial statements or notes thereto.
| (3) | Exhibits. |
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| + |
Management compensation plan or arrangement. |
| ** |
Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or filing for purposes of Sections 11 or 12 of the Securities Act of 1933, deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability under those sections. |
Item 16. Form 10-K Summary.
None.
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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.
| ZEO SCIENTIFIX, INC. | ||
|
By: |
/s/ Ian T. Bothwell | |
| Ian T. Bothwell | ||
| Chief Executive Officer, Chief Financial Officer | ||
|
(Principal Executive, Financial and Accounting Officer) January 29, 2026 | ||
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:
| Signature | Title | Date | ||
| /s/ Ian T. Bothwell |
Chief Executive Officer, Chief Financial Officer, Director |
January 29, 2026 | ||
| Ian T. Bothwell | (Principal Executive, Financial and Accounting Officer) | |||
| /s/ George Shapiro |
Chief Medical Officer, Director |
January 29, 2026 | ||
| George Shapiro, M.D. | ||||
| /s/ Chuck Bretz | Director and Chairman of the Board | January 29, 2026 | ||
| Chuck Bretz | ||||
| /s/ Gurvinder Pal Singh | Director | January 29, 2026 | ||
| Gurvinder Pal Singh | ||||
| /s/ S. Jerry Glauser | Director | January 29, 2026 | ||
| S. Jerry Glauser | ||||
| /s/ Leathem Stearn | Director | January 29, 2026 | ||
| Leathem Stearn |
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