Annual Report for Fiscal Year Ending October 31, 2025 (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 consolidated financial statements and the related notes included elsewhere in this Report. This discussion and analysis and other parts of this Report contain forward-looking statements based upon current beliefs, plans and expectations related to future events and our future financial performance that involve risks, uncertainties and assumptions, such as statements regarding our intentions, plans, objectives and expectations for our business. Our actual results and the timing of selected events could differ materially from those described in or implied by these forward-looking statements as a result of several factors, including those set forth in the section titled "Item 1A. Risk Factors." See also the section titled "Special Note Regarding Forward-Looking Statements."

Overview

We are an innovative biotechnology company targeting autoimmune diseases and inflammatory disorders, with an ancillary focus in the research services and cosmeceutical fields. With respect to our regenerative medicine business, we are developing novel cellular therapeutic candidates intended to address significant unmet medical needs. In the United States, we are authorized to conduct two clinical trials under two FDA IND applications to assess the safety and efficacy of AlloRx Stem Cell therapy in PTHS and Long COVID, and expect to commence those trials sometime in 2026 pending receipt of sufficient working capital. We generate revenue from our other technologies through a number of other activities, including providing research services and through the sale of our stem cell products as well as cosmeceuticals through InfiniVive MD, our wholly-owned subsidiary, which helps to alleviate our capital expenses.

For additional details regarding our business, see the discussion under "Business" in Item 1 of Part I of this Report, which is incorporated by reference into this Part II, Item 7 of this Report.

Components of Operating Results

Revenue

We generate revenue primarily from our proprietary products and technologies, including through supplying AlloRx Stem Cells, CAFs, native fibroblasts and other stem cell products and technologies developed by us. We also generate consulting revenue from our JOA with European Wellness. In addition, our acquisitions of InfiniVive MD and Fitore provide us revenue through sales of topical cosmetic conditioned media and exosomes serums through InfiniVive MD and sales of dietary supplements, nutraceuticals and health products through Fitore. For a discussion of certain risk relating to the manufacture of dietary supplements, nutraceuticals and other health products, see "Item 1A. Risk Factors- Risks Related to the Dietary and Nutritional Supplements Industry and Fitore Products."

Selling, General and Administrative Expenses

Selling, General and Administrative ("SG&A") expenses consist of salaries and other related costs, legal fees relating to corporate matters, other professional fees for accounting, auditing, tax and consulting services, insurance costs, travel expenses, and facility-related expenses.

We expect that our SG&A expenses will increase in the future as we increase our headcount to support increased research and development activities relating to our clinical programs. We also expect to incur increased SG&A expenses associated with being a public company, including costs of accounting, audit, legal, regulatory and tax-related services associated with maintaining compliance with stock exchange and SEC requirements, director and officer insurance costs, and investor and public relations costs.

Research and Development Expenses

All our research and development expenses to date have been incurred in connection with the discovery and development of our research products and product candidates. We expect our research and development expenses to increase significantly for the foreseeable future when we enter clinical trials and advance an increased number of our product candidates through pre-clinical and clinical development, including the conduct of our planned clinical trials.

Research and development expenses consist of personnel-related costs, including salaries, benefits, and non-cash stock-based compensation, external research and development expenses incurred under arrangements with third parties, laboratory supplies, costs to acquire and license technologies aligned with our goal of translating engineered cells to medicines, facility and other allocated expenses, including rent, depreciation, and allocated overhead costs, and other research and development expenses. Where appropriate, we will allocate our third-party research and development expenses on a program-by-program basis.

The successful development of product candidates is highly uncertain and subject to numerous risks and uncertainties. For a discussion of certain risks related to the development of product candidates and costs of clinical trials, see "Item 1A. Risk Factors" herein.

Accordingly, at this time, we cannot reasonably estimate the nature, timing or costs required to complete the remaining development of any product candidates and to obtain regulatory approval for one or more of these product candidates.

Other Income and Expenses

Other income/expense consisted of interest expense on our outstanding debt.

Going Concern

Our consolidated financial statements contained in this Report have been prepared assuming that we will continue as a going concern, which contemplates the continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. As reflected in our consolidated financial statements, we have an accumulated deficit as of October 31, 2025 of $48.8 million. We incurred net losses of $10.9 million and $9.9 million and used cash in operating activities of $2.5 million and $3.2 million for the years ended October 31, 2025 and 2024, respectively. We had a working capital deficit of $4.8 million as of October 31, 2025. These factors raise substantial doubt about our ability to continue as a going concern.

We have commenced the execution of our long-range business plan and efforts to generate additional revenue; however, our current cash position may not be sufficient to support our daily operations for the next 12 months from the date of issuance of the financial statements. Our ability to continue as a going concern is dependent upon our ability to further implement our business plan and generate additional revenue and our ability to raise additional funds through debt or equity financings.

The consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.

Results of Operations for the year ended October 31, 2025 compared to the year ended October 31, 2024

The following discussion analyzes our operating results for the fiscal year ended October 31, 2025, which we refer to as "Fiscal 2025," and compares those results to results for the fiscal year ended October 31, 2024, which we refer to as "Fiscal 2024. The discussion below also analyzes our liquidity and capital resources as of October 31, 2025 and material changes in those resources since October 31, 2024. We suggest that you read the following information in conjunction with our audited consolidated financial statements for the two years ended October 31, 2025 contained elsewhere in this Report.

Comparison of the Years Ended October 31, 2025 and 2024

The following table summarizes our operating results for Fiscal 2025 and 2024:

		Year Ended October 31,
		2025				2024
Product Sales		$	2,020,818			$	1,821,894
Product Sales, Related Parties			36,000				33,750
Total Revenue			2,056,818				1,855,644
Less: Cost of Goods Sold			(483,340	)			(426,189	)
Gross Profit			1,573,478				1,429,455
General and Administrative Expenses			(6,063,539	)			(6,623,878	)
Research and Development			(533,028	)			(618,270	)
Write-off of Offering Costs			-				(2,656,962	)
Impairment Expense			-				(683,394	)
Interest Expense			(2,971,213	)			(4,242,595	)
Gain on Forgiveness of Debt			343,938				-
Gain (Loss) on Extinguishment of Debt			(3,694,493	)			740,724
Unrealized Gain on Derivative/Warrant Liability			493,055				2,781,360
Net Loss		$	(10,851,802	)		$	(9,873,560	)

Net Loss

We recorded a net loss of $10,851,802 in Fiscal 2025, an increase of $978,242 from Fiscal 2024, or 10%. The increased loss in Fiscal 2025 was primarily due to the loss on extinguishment of debt in Fiscal 2025, as discussed further below. We expect to continue reporting losses until such time, if ever, we can improve our operations and/or commercialize one or more of our product candidates and generate sales sufficient to offset our operating costs and expenses and interest expenses.

Product Sales

Total revenue in Fiscal 2025 increased by $201,174, or 11%, from Fiscal 2024. Our revenue is generated by sales of research products, sales of AlloRx Stem Cells to foreign third-party clinics and medical centers, and sales from our subsidiaries, InfiniVive MD and Fitore.

During Fiscal 2025 and Fiscal 2024, research and development product sales were $449,761 and $426,846, respectively, an increase in Fiscal 2025 of $22,915 or 5%. The increase was attributable to biopharmaceutical institutions, university research labs and clinics purchasing slightly more CAFs and native fibroblasts in Fiscal 2025. CAFs and native fibroblasts are used by such institutions for stem cell research and the development of advanced immunotherapy of cancer, and our sales to such institutions are generally completed on a purchase order basis and without minimum purchase obligations. As a result, sales volumes in a particular period may fluctuate based on the number of research programs then being pursued by such institutions.

Sales of AlloRx Stem Cells to foreign third-party clinics for the years ended October 31, 2025 and 2024 were $1,448,282 and $1,285,117 respectively, an increase of $163,165 or 13%, related to increased sales volumes, as third-party clinics for which we supply AlloRx Stem Cells treated more patients during Fiscal 2025. We expect AlloRx Stem Cell sales internationally to increase over the next year as these products expand into additional foreign third-party clinics and medical centers and our current foreign third-party clinics and medical center customers increase their total monthly patients.

For Fiscal 2025 and Fiscal 2024, InfiniVive MD revenue amounted to $155,868 and $128,940, respectively, an increase of $26,928 or 21%. The Company is currently involved in clinical trials related to our InfiniVive products and we expect revenues to increase in Fiscal 2026, based on expected positive data from these trials.

For Fiscal 2025 and Fiscal 2024, Fitore product revenue amounted to $2,907 and $14,741, respectively, a decrease of $11,834 or 80%. Fitore revenues were lower in Fiscal 2025 due to no efforts at marketing Fitore products, compared to Fiscal 2024. We stopped selling Fitore products as of March 1, 2025.

Product Sales - Related Parties

Product sales to related parties are sales to the medical practice of Dr. Zamora, our former Chief Executive Officer. Such sales were consistent during Fiscal 2025 at $36,000, compared to Fiscal 2024 at $33,750.

Cost of Goods Sold

Our cost of goods sold during Fiscal 2025 totaled $483,340 compared to $426,189 during Fiscal 2024, an increase of $57,151 or 13%, resulting in gross profit of $1,573,478 and $1,429,455 for Fiscal 2025 and Fiscal 2024, respectively. The gross profit percentages for the years ended October 31, 2025 and 2024 were 77% and 77%, respectively. Cost of goods sold, as a percentage of total revenue stayed the same for Fiscal 2025, compared to Fiscal 2024.

General and Administrative Expenses

SG&A expenses decreased from $6,623,878 in Fiscal 2024 to $6,063,539 in Fiscal 2025. This decrease of $560,339, or 8% was primarily due to a decrease in consulting fees of $497,580 and a decrease in stock based compensation of $212,569, offset by an increase in travel expenses of $81,187.

Research and Development

Research and development expenses for Fiscal 2025 and Fiscal 2024 were $533,028 and $618,270, respectively, a decrease of $85,242 or 14%. During Fiscal 2025, the Company incurred approximately $66,000 in expenses related to our upcoming Pitt Hopkins trial and approximately $451,000 in expenses for ongoing clinical trials related to topical dermatological use of AlloEx. During Fiscal 2024, the Company incurred approximately $128,000 in expenses related to our upcoming Pitt Hopkins trial and approximately $465,000 in expenses for ongoing clinical trials related to topical dermatological use of AlloEx.

Write-off of Offering Costs

During the year ended October 31, 2024, the Company recorded as expense $2,656,962 related to the write-off of previously capitalized Deferred Offering Costs. The write-off of the deferred costs was related to efforts at an initial public offering that had been abandoned by the Company. There was no comparable expense recorded during Fiscal 2025.

Impairment Expense

During Fiscal 2024, we recorded impairment expense of $49,431 against amortizable intangible assets related to our assessment of future cash flows within Fitore and $196,595 within InfiniVive. We also recorded $437,368 in impairment expense related to the write-down of the entire Goodwill balance for Fitore. There was no comparable expense recorded during Fiscal 2025.

Interest Expense

Interest expense for Fiscal 2025 was $2,971,213 a decrease of $1,271,382 or 30%, from the interest expense for Fiscal 2024 of $4,242,595. This increase is primarily due to debt discount accretion, related to the 2024 Senior Secured Notes.

Gain on Forgiveness of Debt

During the year ended October 31, 2025, the Company negotiated a settlement of the 2021 Series Convertible Notes Payable, whereby the Company would pay a total of $225,000 over a four month period ending May 1, 2025. The remaining principal balance of $255,000 and all accrued interest totaling $88,938, have been forgiven. The transactions resulted in a gain on forgiveness of debt of $343,938. There were no comparable transactions during the year ended October 31, 2024.

Gain (Loss) on Extinguishment of Debt

During Fiscal 2025, the Company extinguished certain debt instruments and issued new debt instruments in their place along with 180,000 pre-funded warrants. The transactions resulted in a loss on extinguishment of debt of $3,694,493. During Fiscal 2024, the Company extinguished certain debt and issued a new debt instrument in its place. The transactions resulted in a gain on extinguishment of debt of $740,724.

Unrealized Gain on Derivative/Warrant Liability

During Fiscal 2025 and Fiscal 2024, we issued 8% Convertible Notes and Senior Secured Notes. In connection with these notes, the Company recognized a Derivative/Warrant liability. At October 31, 2025 and 2024, this liability was marked to market, resulting in unrealized gains of $493,055 and $2,781,360, respectively.

Liquidity and Capital Resources

Overview

Since our inception, we have incurred significant operating losses. We expect to incur significant expenses and operating losses as we advance the preclinical and clinical development of our programs. We expect that our sales, research and development, and general and administrative costs will increase in connection with conducting additional preclinical studies and clinical trials for our current and future programs and product candidates, expanding our intellectual property portfolio, and providing general and administrative support for our operations. As a result, we will need additional capital to fund our operations for the next twelve months and beyond, which we hope to obtain from additional equity or debt financings, collaborations, licensing arrangements, or other sources.

We currently have no credit facility or other committed sources of capital. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through other third-party funding, collaboration agreements, strategic alliances, licensing arrangements or marketing and distribution arrangements, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our drug development or future commercialization efforts or grant rights to develop and market products or product candidates that we would otherwise prefer to develop and market ourselves.

In order to meet our operational goals, we will need to obtain additional capital, which we will likely obtain through a variety of means, including through public or private equity, debt financings or other sources, including up-front payments and milestone payments from strategic collaborations. To the extent that we raise additional capital through the sale of convertible debt or equity securities, the ownership interest of our stockholders will be diluted, and the terms may include liquidation or other preferences that adversely affect the rights of our stockholders. Such financing may result in dilution to stockholders, imposition of debt covenants, increased fixed payment obligations or other restrictions that may affect our business. If we raise additional funds through up-front payments or milestone payments pursuant to strategic collaborations with third parties, we may have to relinquish valuable rights to our product candidates, or grant licenses on terms that are not favorable to us. In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans.

Working Capital

As of October 31, 2025, we had a working capital deficit of $4.8 million, comprised of current assets of $0.9 million and current liabilities of $5.7 million. The working capital at year-end Fiscal 2025 increased $4.3 million from year-end Fiscal 2024. Current liabilities, consisting primarily of deferred revenue, accrued liabilities, lease obligations and short-term convertible notes payable decreased by approximately $4.4 million as of October 31, 2025, compared to October 31, 2024. The Company's cash balance was approximately $0.6 on both October 31, 2025 and 2024.

As a result of our limited working capital position as of October 31, 2025, we continue to rely on cash from outside sources to meet our liquidity requirements. Our need for liquidity and capital in the next 12 months include:

	●	advancing the clinical development of AlloRx Stem Cell therapy for the treatment of several indications;
	●	pursuing the preclinical and clinical development of other current and future research programs and product candidates;
	●	in-license or acquire the rights to other products, product candidates or technologies;
	●	maintain, expand and protect our intellectual property portfolio;
	●	hire additional personnel in research, manufacturing and regulatory and clinical development as well as management personnel;
	●	seek regulatory approval for any product candidates that successfully complete clinical development;
	●	expand our manufacturing capabilities;
	●	expand our operational, financial and management systems and increase personnel, including personnel to support our operations as a public company; and
	●	pay our other administrative expenses.

Our working capital needs beyond the next 12 months include ongoing general and administrative expenses and research and development expenses, the latter of which are expected to increase if and when we commence one or more of our planned clinical trials. Our long-term capital requirements also include the cost of building a planned new cGMP biomanufacturing facility in 2025, which is estimated to cost approximately $1.0 to $3.0 million depending on the amount of anticipated production increase, available capital and manufacturing demands at that time.

Cash Flows

The following table summarizes our cash flows for Fiscal 2025 and 2024:

		Year Ended October 31,
		2025				2024
Net Cash Used in Operating Activities		$	(2,537,843	)		$	(3,236,339	)
Net Cash Used in Investing Activities			(72,254	)			(7,223	)
Net Cash provided by Financing Activities			2,642,920				3,713,168
Beginning Cash Balance			571,360				101,754
Ending Cash Balance		$	604,183			$	571,360

Operating Activities

Net cash used in operating activities during Fiscal 2025 was $2,537,843, compared to $3,236,339 during Fiscal 2024, representing a decrease in use of cash of $698,496 or 22%. The decrease was primarily related to decreased consulting fees and research and development activities as discussed above.

Investing Activities

Cash used in investing activities during Fiscal 2025 was $72,254 compared to cash used in investing activities during Fiscal 2024 of $7,223, representing an increase in cash used of $65,031 or 900%. This change is primarily attributable to our acquisition of property and equipment and increased patent efforts during Fiscal 2025.

Financing Activities

Cash provided by financing activities during Fiscal 2025 was $2,642,920, while cash provided by financing activities during Fiscal 2024 was $3,713,168, a decrease of $1,070,248 or 29%. During Fiscal 2025, we issued Senior Secured Convertible Notes for proceeds of $6,550,000, issued Preferred A-1 stock for proceeds of $700,000, paid down notes totaling $4,595,000 and made capital lease payments of $12,080. During Fiscal 2024, we issued Senior Secured Convertible Notes for proceeds of $3,775,000 and made capital lease payments of $61,832.

Critical Accounting Estimates

Our management's discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles (GAAP). The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses, and the disclosure of contingent assets and liabilities in our consolidated financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to stock-based awards and Goodwill and Other Intangible Assets. We base our estimates on historical experience, known trends and events, and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Of our policies, the following are considered the most critical to an understanding of our consolidated financial statements as they require the application of the most subjective and complex judgment, involving critical accounting estimates and assumptions impacting our consolidated financial statements. We have applied our policies and critical accounting estimates consistently across our businesses.

Intangibles

Most of our identifiable intangible assets were recognized as part of business combinations we have executed in prior periods. Our identifiable intangible assets are considered definite life intangible assets and are comprised of, trademarks and trade names, customer relationships and patents. Definite life intangible assets are amortized using the straight-line method over their estimated period of useful life.

Our determination of the fair value of the intangible assets acquired involves the use of significant estimates and assumptions. We believe that the fair value assigned to the assets is based on reasonable assumptions and estimates that a market participant would use. Should conditions differ from management's estimates at the time of the acquisition, including changes in volume or timing to current expectations of future revenue growth rates and forecasted margins, or changes in market factors outside of our control, material write-downs of intangible assets may be required, which would adversely affect our operating results.

We monitor events and changes in circumstances that could indicate carrying amounts of intangible assets may not be recoverable. We review the carrying amounts of our intangible assets for potential impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Impairment indicators may include any significant changes in the manner of our use of the assets or the strategy of our overall business, certain reorganization initiatives, significant negative industry or economic trends and significant decline in our share price for a sustained period.

When such events or changes in circumstances occur, we compare the carrying amounts of the asset or assets groups with their respective estimated undiscounted future cash flows. If the asset or assets group are determined to be impaired, an impairment charge is recorded in the amount by which the carrying amount of the asset or assets group exceed their fair value.

At October 31, 2024, we impaired $196,595 of the InfiniVive intangible assets, leaving a balance of $601,887. The amount was impaired because the carrying value of the intangibles was not supported by future cash flows. There was no further impairment of the InfiniVive intangible assets as of October 31, 2025. At October 31, 2024, we impaired $49,431of the Fitore intangible assets, leaving a balance of $0 in Fitore. The amounts were impaired because the carrying value of the intangibles was not supported by future cash flows.