Annual Report for Fiscal Year Ending 12-31, 2024 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes appearing in this Annual Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Forward-looking statements represent our management's beliefs and assumptions only as of the date of this Annual Report. Actual future results may be materially different from what we expect. We undertake no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they are made, except as required by federal securities and any other applicable law.

The management's discussion and analysis of our financial condition and results of operations are based upon our audited financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP").

The following discussion and analysis of financial condition and results of operations of the Company is based upon, and should be read in conjunction with, the audited financial statements and related notes elsewhere in this Annual Report on Form 10-K.

Basis of Presentation

The discussion below, as well as the financial statements beginning on page F-1, do not reflect the Company's acquisition of First Person Ltd., which occurred subsequent to December 31, 2024. The impact of such acquisition will be reflected in the financial results of the Company for reporting periods beginning March 31, 2025. Such information is not indicative of future financial results of the Company.

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Plan of Operation

First Person, Inc. (FP, Inc.) develops, markets, and distributes for sale a premium brand of cognitive supplement consumer products. The company is focused on development and commercialization of additional functional wellness products to enhance cognitive and social experiences.

Since its inception in January 2021, FP, Inc. has devoted substantially all of its efforts to business and product development relating to its proprietary functional mushroom extraction process and to the development of its own proprietary formulations of cognitive nutraceutical performance products and ready-to-drink alcohol-free social tonics. We intend to continue to grow our initial product line of four nutraceutical consumer-facing products, as well as launch and growth of our newest ready-to-drink product line that leverages our proprietary lion's mane extract and co-crystallization technology to enhance potency and bioavailability, remove the taste profile, and enhance water solubility.

Extraction Technology. FP, Inc. has developed a proprietary dual extraction technique for functional mushrooms utilizing ultrasonication and hot water to break down the cellular walls of the mushroom in order to extract the active compounds of interest from the mushroom.

Development of Nutraceutical Consumer Products. FP, Inc. has expended significant resources in developing a direct-to-consumers product line of nutraceutical cognitive supplements which are made of functional mushrooms and other adaptogenic botanicals, and completed a product launch for sale to the public on March 1, 2022. There are four current product offerings, as follows: (i) SunbeamTM, a supplement targeting dopamine, sparking motivation and focus; (ii) Golden HourTM, a supplement targeting oxytocin, sparking connection and joy; and (iii) MoonlightTM, a supplement targeting gamma-aminobutryric acid (GABA), sparking restorative sleep cycles.; and (iv) Crystallized Lion's Mane, a fully soluble, neutral taste, powdered drink enhancer that incorporates both First Person's proprietary extraction methods and co-crystallization technology, enhancing energy, mood, and focus. These consumer products do not require FDA approval prior to marketing and distribution, but these consumer products are required to include a disclaimer that they have not been evaluated by the FDA and are not intended to diagnose, treat, cure, or prevent any disease. The microbeads and encapsulation for the supplement pills, and packaging materials for the pill tins and shipping boxes, are all produced by third-party manufacturers. Each of these consumer products is sold directly to consumers through FP, Inc.'s website, www.getfirstperson.com. Customers may either make a one-time purchase or enroll in a subscription services where they receive shipments based on a timeline chosen by the customer (typically monthly).

Development and Expansion into Ready-To-Drink (RTD) Alcohol-Free Functional beverages. Building upon its expertise in cognitive wellness, FP, Inc. is expanding into the RTD beverage market with a first-of-its-kind social tonic. This alcohol-free functional beverage leverages FP, Inc.'s proprietary extract techniques and co-crystallization technology to deliver an uplifting, social-enhancing experience. The product is designed to provide consumers with a sophisticated and effective alternative to traditional alcoholic beverages, aligning with the growing demand for mindful drinking options.

Results of Operations

Revenue

The Company did not generate any revenue through December 31, 2024. However, the Company will report revenues for reporting periods after December 31, 2024, due to the January 2025 acquisition of First Person.

Operating Expenses

For the years ended December 31, 2024 and 2023, we had the following operating expenses:

		For the Year Ended December 31,
		2024				2023
Operating expenses:
Research and development expenses		$	222,363			$	462,459
Professional fees			69,153				70,946
General and administrative expenses			52,960				110,272
Total operating expenses		$	344,476			$	643,677

Total operating expenses for the year ended December 31, 2024, were $344,476 as compared to $643,677 for the year ended December 31, 2023.

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During the year ended December 31, 2024, the Company incurred $222,363 of research and development expenses, which included service fees related to certain research and development agreements of $226,023, software fees of $690, and a reversal of previously accrued technology licensing fees of $4,350.

During the year ended December 31, 2023, the Company incurred $462,459 of research and development expenses, which included service fees related to certain research and development agreements of $465,345, software fees of $4,877, a refund of previously accrued technology licensing fees of $8,333 and purchases of expendable lab supplies and equipment of $570.

The Company incurred general and administrative expenses of $52,960 for the year ended December 31, 2024, compared to general and administrative expenses of $110,272 for the year ended December 31, 2023. The decrease in general and administrative expense for the year ended December 31, 2024, was primarily due to a reduction in stock based compensation charges in the current fiscal year from $62,491(2024) to $11,406.

Professional fees were $69,153 for the year ended December 31, 2024, compared to professional fees of $70,946 for the year ended December 31, 2023.

Other Income (Expense)

Other income was $288,379 for the year ended December 31, 2024, which included $287,602 in gain on extinguishment of debt - related party, change in derivative liabilities of $89,948, which was offset by a loss on extinguishment of debt of $29,780 and interest expense of $59,391.

Other expense was $145,670 for the year ended December 31, 2023, which included a loss of $6,149 as a result of the change in value of derivative liabilities, a loss upon extinguishment of debt of $33,932 and interest expense of $105,589, which is comprised of accretion of convertible notes of $35,091, financing costs of $38,000 and interest on convertible notes of $32,498.

Net Loss

We had a net loss of $56,097 for the year ended December 31, 2024. compared to a net loss of $789,347 for the year ended December 31, 2023. The decrease in net loss for the current year end is primarily due to a decrease in general and administrative expenses and a decrease in research and development expenses.

Statements of Cash Flows

The following table summarizes our cash flows for the periods presented:

		For the Year Ended December 31,
		2024				2023
Net cash used by operating activities		$	(61,761	)		$	(68,649	)
Net cash provided from (used by) investing activities			-				-
Net cash provided from financing activities			62,000				66,000
Decrease in cash and cash equivalents		$	239			$	(2,649	)

Overall, during the year ended December 31, 2024, we increased cash by $239, compared to the year ended December 31, 2024, where we used cash of $2,649.

Cash Used in Operating Activities

Cash used in operating activities for the year ended December 31, 2024, was $61,761, compared to $68,649 used for the year ended December 31, 2023.

Cash used in operating activities for the year ended December 31, 2024, was the result of a net loss of $56,097, offset by non-cash items including compensation in the form of stock options for research and development of $142,396, stock options granted for consulting services of $11,406, stock issued for research and development expense of $65,327, stock award for research and development expense of $18,300, loss on debt extinguishment of 29,780, non-cash interest expense of $16,104 and accretion of debt discount of $14,024, offset by gain on debt extinguishment - related parties of $287,602, change in derivative liabilities of $89,948 increases to our operating assets and liabilities of $74,549.

Cash used in operating activities for the year ended December 31, 2023 was the result of net loss of $789,347, offset by non-cash items including compensation in the form of stock options for research and development of $465,345, stock options granted for consulting services of $45,811, stock award of $16,680, loss on debt extinguishment of $33,932, non-cash interest expense of $38,000, accretion of debt discount of $35,091, change in derivative liabilities of $6,149 and increases to our operating assets and liabilities of $1,550.

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Cash Provided by Investing Activities

There was no cash provided by investing activities for the years ended December 31, 2024 and 2023, respectively.

Cash Provided by Financing Activities

During the year ended December 31, 2024, financing activities provided cash of $62,000, a result of related party advances for ongoing operations of $162,000 offset by payment on secured loan of $100,000.

During the year ended December 31, 2023, financing activities provided cash of $66,000 as a result of related party advances for ongoing operations.

Liquidity and Capital Resources

As of December 31, 2024, we had cash of $659 and a working capital deficit of $431,699, compared to cash of $420 and a working capital deficit of $1,323,295 as of December 31, 2023. The reduction in our working capital deficit is due primarily to debt forgiveness by related parties.

To maximize the potential benefits of the acquisition of First Person, additional capital is required. We do not currently have sufficient resources to accomplish any of these conditions necessary for us to generate revenue and expect to incur increasing operating expenses. We will require substantial additional funds for operations, the service of debt and to fund our business objectives. There can be no assurance that financing, whether debt or equity, will always be available to us in the amount required at any particular time or for any particular period or, if available, that it can be obtained on terms favorable to us. If additional funds are raised by the issuance of equity securities, such as through the issuance and exercise of warrants, then existing stockholders will experience dilution of their ownership interest. If additional funds are raised by the issuance of debt or other equity instruments, we may be subject to certain limitations in our operations, and issuance of such securities may have rights senior to those of the then existing stockholders. We currently have no agreements, arrangements or understandings with any person or entity to obtain funds through bank loans, lines of credit or any other sources. We continue exploring sources of debt and equity financing, as well as available grants.

There can be no assurance the necessary financing will be available. At present, the Company relies on loans from related parties and third parties to continue operations, which raises substantial doubt about our ability to continue as a going concern.

Recent Financing. Since the acquisition of First Person in January 2025, we have obtained a total of $250,000 in loans from four separate lenders, as follows:

·

Quick Capital, LLC. Effective February 20, 2025, the Company entered into a Note Purchase Agreement (the "QC Agreement") with Quick Capital, LLC ("Quick Capital"), pursuant to which the Company issued a $55,555.56 secured convertible promissory note (the "QC Note") in consideration of a $50,000 loan (representing OID of $5,555.56). The QC Note bears interest at 12% per annum, is due nine months from its issue date and is convertible at any time, and from time to time, on or after the earlier of (a) 180th day following the issue date of the QC Note (applicable conversion price: $0.02) and (b) the date of "qualification" of the Company's first-filed Offering Statement on Form 1-A (applicable conversion price: fixed offering price stated in qualified Offering Statement on Form 1-A). As further consideration for Quick Capital's entering into the QC Agreement, the Company issued 315, 000 shares of common stock (the "QC Commitment Shares") as a commitment fee and a warrant (the "QC Warrant") to purchase 1,111,111 shares of common stock at an exercise price of $0.05 per share, subject to equitable adjustments, which warrant is redeemable by the Company at $0.0001 per share, after 20 business days' written notice, if the price of the Company's common stock closes above $0.25 for 20 consecutive trading days.

	·	Cory Rosenberg. Effective February 24, 2025, the Company entered into a Note Purchase Agreement (the "Rosenberg Agreement") with Cory Rosenberg, the sole executive officer and a director of the Company ("Rosenberg"), pursuant to which the Company issued a $55,555.56 secured convertible promissory note (the "Rosenberg Note") in consideration of a $50,000 loan (representing OID of $5,555.56). The Rosenberg Note bears interest at 12% per annum, is due nine months from its issue date and is convertible at any time, and from time to time, on or after the earlier of (a) 180th day following the issue date of the Rosenberg Note (applicable conversion price: $0.02) and (b) the date of "qualification" of the Company's first-filed Offering Statement on Form 1-A (applicable conversion price: fixed offering price stated in qualified Offering Statement on Form 1-A). As further consideration for Rosenberg's entering into the Rosenberg Agreement, the Company issued 315, 000 shares of common stock (the "Rosenberg Commitment Shares") as a commitment fee and a warrant (the "Rosenberg Warrant") to purchase 1,111,111 shares of common stock at an exercise price of $0.05 per share, subject to equitable adjustments, which warrant is redeemable by the Company at $0.0001 per share, after 20 business days' written notice, if the price of the Company's common stock closes above $0.25 for 20 consecutive trading days.
	·	BC Funds, LLC. Effective February 25, 2025, the Company entered into a Note Purchase Agreement (the "BC Funds Agreement") with BC Funds, LLC ("BC Funds"), pursuant to which the Company issued a $55,555.56 secured convertible promissory note (the "BC Funds Note") in consideration of a $50,000 loan (representing OID of $5,555.56). The BC Funds Note bears interest at 12% per annum, is due nine months from its issue date and is convertible at any time, and from time to time, on or after the earlier of (a) 180th day following the issue date of the BC Funds Note (applicable conversion price: $0.02) and (b) the date of "qualification" of the Company's first-filed Offering Statement on Form 1-A (applicable conversion price: fixed offering price stated in qualified Offering Statement on Form 1-A). As further consideration for BC Funds' entering into the BC Funds Agreement, the Company issued 315, 000 shares of common stock (the "BC Funds Commitment Shares") as a commitment fee and a warrant (the "BC Funds Warrant") to purchase 1,111,111 shares of common stock at an exercise price of $0.05 per share, subject to equitable adjustments, which warrant is redeemable by the Company at $0.0001 per share, after 20 business days' written notice, if the price of the Company's common stock closes above $0.25 for 20 consecutive trading days.
	·	Leonite Fund I, LP. Effective April 10, 2025, the Company entered into a Note Purchase Agreement (the "Leonite Agreement") with Leonite Fund I, LP ("Leonite"), pursuant to which the Company issued a $ 110,000.00 secured convertible promissory note (the "Leonite Note") in consideration of a $100,000 loan (representing OID of $10,000.00). The Leonite Note bears interest at 12% per annum, is due nine months from its issue date and is convertible at any time, and from time to time, on or after the earlier of (a) 180th day following the issue date of the Leonite Note (applicable conversion price: $0.02) and (b) the date of "qualification" of the Company's first-filed Offering Statement on Form 1-A (applicable conversion price: fixed offering price stated in qualified Offering Statement on Form 1-A). As further consideration for Leonite's entering into the Leonite Agreement, the Company issued 630, 000 shares of common stock (the "Leonite Commitment Shares") as a commitment fee and a warrant (the "Leonite Warrant") to purchase 2,200,000 shares of common stock at an exercise price of $0.05 per share, subject to equitable adjustments, which warrant is redeemable by the Company at $0.0001 per share, after 20 business days' written notice, if the price of the Company's common stock closes above $0.25 for 20 consecutive trading days.
		Each of the QC Agreement, the Rosenberg Agreement, the BC Funds Agreement and the Leonite Agreement, contains the following provisions:

·

the QC Commitment Shares, the Rosenberg Commitment Shares, the BC Funds Commitment Shares and the Leonite Commitment Shares, as well as the shares underlying the QC Note, the Rosenberg Note, the BC Funds Note and the Leonite Note and the QC Warrant, the Rosenberg Warrant, the BC Funds Warrant and the Leonite Warrant possess piggy-back registration rights and qualification rights.

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	·	without prior written consent, the Company is prohibited from entering into variable rate transactions, unless the proceeds from any such transactions are first applied to the full payment of the subject note.
	·	during the 12 months following the applicable funding date, the lender has a right, but not the obligation, to purchase up to $100,000 of Company securities in any Regulation A offering or in any other offering conducted by the Company.
	·	while any portion of a subject note is outstanding, 50% of funds obtained by the Company shall be applied to a subject note.
	·	during the 12 months following the applicable funding date, the applicable lender shall have an absolute right to participate in any proposed funding transaction of the Company.
	·	the QC Note, the Rosenberg Note, the BC Funds Note and the Leonite Note are secured by the assets of the Company.

Prior Financing. On June 15, 2021, the Company entered into a note purchase agreement with Quick Capital, LLC (Quick Capital), pursuant to which the Company issued Quick Capital a twelve-month convertible promissory note in the principal amount of $115,000 (the "Note") for a $100,000 investment, which included an original issuance discount of 10% and a $3,500 credit for Quick Capital's legal and transaction costs. In connection with the Note issuance, Quick Capital was also issued a five-year warrant (the "Warrant") to purchase up to an aggregate of 115,000 shares of the Company's common stock at an exercise price of $1.00 per share (the "Warrant Shares"). If there is no effective registration statement covering the Warrant Shares, Quick Capital may exercise the Warrant on a cashless basis. The Note is convertible into shares of common stock at a conversion price of $0.50 per share. The Note may not be converted, and the Warrant may not be exercised if after giving effect to such conversion or exercise, as the case may be, Quick Capital and its affiliates would beneficially own more than 4.99% of the outstanding common stock of the Company. For twelve months following the issuance of the Quick Note, Quick Capital will have the right of first refusal to participate in future financings proposed to the Company on the same terms and participation rights to purchase up to $115,000 of securities in other offerings. The conversion price of the Note will be reduced if the Company issues common stock or grants derivative securities for consideration at a price less than the conversion price to the amount of the consideration of such dilutive issuance. The Note contains certain restrictive covenants limiting the Company's ability to make distributions or dividends, repurchase its securities, incur debt, sell assets, make loans, or engage in exchange offers. If an event of default (as described in the Note) occurs, the Note will become immediately due and payable in an amount equal to 150% of the then outstanding principal amount of the Note plus any interest or amounts owing to Quick Capital. Quick Capital is entitled to the same terms of future financings of the Company that are more favorable than the terms of the Quick Note.

The Note and accrued interest totaling $124,200 was not repaid on maturity, constituting an event of default increasing the repayment value of the note to an amount equal to 150% of the balance outstanding or $186,300. On December 7, 2022, the Company and Quick Capital amended the Note to extend the maturity date thereof to June 15, 2023 and amended the Warrant maturity date to June 15, 2027, Further Quick Capital agreed to reduce the outstanding balance of the note from $186,300 to $150,000 in consideration for the issuance of 150,000 shares of unregistered, restricted common stock valued at $76,350. The unpaid balance of the Note continues to accrue interest at 8% per annum.

As of June 15, 2023, the Note and accrued interest totaling $162,000 was not repaid on maturity, constituting an event of default increasing the repayment value of the note to an amount equal to 150% of the principal balance and accrued interest outstanding, or $243,000. On June 15, 2023, the Company and Quick Capital amended the Note to extend the maturity date thereof to June 15, 2024, and amended the Warrant maturity date to June 15, 2028. Further Quick Capital agreed to reduce the outstanding balance of the Note from $243,000 to $200,000 in consideration for the issuance of 150,000 shares of unregistered, restricted common stock valued at $52,500. The unpaid balance of the Note continues to accrue interest at 8% per annum.

Going Concern

Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, does not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation. Our report from our independent registered public accounting firm for the fiscal year ended December 31, 2024, includes an explanatory paragraph stating the Company has recurring losses and limited operations which raise substantial doubt about its ability to continue as a going concern. If the Company is unable to obtain adequate capital. the Company may be required to reduce the scope, delay, or eliminate some or all of its planned operations. These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern.

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Off Balance Sheet Arrangements

We currently have no off-balance sheet arrangements.

Critical Accounting Policies

The preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments which are based on historical experience and on various other factors that are believed to be reasonable under the circumstances. The results of their evaluation form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions and circumstances. Our significant accounting policies are more fully discussed in the Notes to our Financial Statements.

Research and Development Costs: The Company charges research and development costs to expense when incurred in accordance with FASB ASC 730, Research and Development. Research and development costs were $462,459 for the year ended December 31, 2023. Research and development costs were $194,406 for the year ended December 31, 2022.

Stock Based Compensation and Other Share-Based Payments: The Company records stock-based compensation in accordance with ASC 718, Compensation - Stock Compensation, using the fair value method of the award on grant date. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the equity instruments issued. The expense attributable to the Company's directors is recognized over the period the amounts are earned and vested, and the expense attributable to the Company's non-employees is recognized when vested.

Warrants: The Company accounts for common stock warrants in accordance with applicable accounting guidance provided in ASC 815 Derivatives and Hedging, as either derivative liabilities or as equity instruments depending on the specific terms of the warrant agreement. For warrants classified as equity instruments the Company applies the Black Scholes model and expenses the fair value as financing costs. For warrants classified as derivative financial instruments the Company applies the Monte Carlo model to value the warrants.

Recent Accounting Pronouncements

Recent accounting pronouncements issued by the Financial Accounting Standards Board ("FASB"), (including its EITF, the AICPA and the SEC), did not or are not believed by management to have a material effect on the Company's present or future financial statements.