Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

This analysis of our results of operations should be read in conjunction with the accompanying financial statements. This Report contains certain forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Exchange Act. Statements that are predictive in nature and that depend upon or refer to future events or conditions are forward-looking statements. Although we believe that these statements are based upon reasonable expectations, we can give no assurance that projections will be achieved. Please refer to the discussion of forward-looking statements included in Part I of this Report.

The three main businesses of Vystar are RxAir, a line of FDA cleared class II medical air purifiers; Vytex, patented allergy free natural rubber latex, which includes a line of mattress, toppers and pillows; and Fluid Energy Conversion (FEC), a patented technology that can be used in the medical, energy and other economy sectors.

About RxAir

RxAir promotes a healthy lifestyle through the use of its innovative, patented and trademark ViraTech air purification technology, thereby improving the quality of life of each and every customer. Independently tested by the U.S. Environmental Protection Agency ("EPA") and U.S. Food and Drug Administration ("FDA") certified laboratories, the RxAir has been proven to destroy greater than 99% of bacteria and viruses and reduce concentrations of odors and volatile organic compounds ("VOCs"). The RxAir uses high-intensity germicidal UV lamps that destroy bacteria and viruses instead of just trapping them, setting it apart from ordinary air filtration units. RxAir® and ViraTech® are registered trademarks of Vystar Corp. For more information, visit http://www.RxAir.com.

The Company's RxAir product line uses 48 inches of high-intensity germicidal UV lamps that destroy bacteria, viruses and other germs instead of just trapping them, setting it apart from ordinary air filtration units. RxAir is one of the few UV air purifiers that have been proven in independent EPA- and FDA- certified testing laboratories to destroy on the first pass 99.6% of harmful airborne viruses and bacteria. In addition to inactivating airborne viruses that cause influenza (flu) and colds, RxAir's device disarms the airborne pathogens that cause MRSA (staph), strep (whooping cough), tuberculosis (TB), measles, pneumonia and a myriad of other antibiotic-resistant and viral infections.

Vystar produces the RxAir product line with a world-class manufacturer and an expert U.S. engineer with a full understanding of the RxAir technology. Vystar sells RxAir residential and commercial units via distributors, online and through retail channels. Vystar has assembled a distribution network for sales of the RX400™ FDA cleared Class II Filterless Air Purifier. Vystar also sells the ViraTech replacement cartridge for approximately 25,000 units that have been previously sold. The RX3000™ Commercial FDA cleared Class II Air Purifier, our largest unit, is currently not in production. We have produced a sample size of the RX800™ FDA cleared Class II Filterless Air Purifier and they are currently in the testing stage. We have a prototype for the RX300, which will be renamed RX600, and are exploring production options. The Company also hopes to have an even smaller unit designed during 2026 for automobiles and refrigerators with USB charging. Tariffs by the U.S. government may impact future production.

About Vytex

Vytex is a multi-patented latex raw material in which the allergy causing proteins are reduced to a level that falls at or below detection based on ASTM approved test methods. Vytex has been available as a raw material commercially for fourteen years and through that time has a group of manufacturers who use it in end products such as electrical gloves, condoms, adhesives, etc. Ironically, most use Vytex as it's better for their manufacturing process as an easier to use raw material and not for protein properties. As of mid-2020 Vystar and the Indian Rubber Manufacturers Research Association's ("IRMRA") had been actively collaborating to develop viscoelastic deproteinized natural rubber (DPNR) variants having properties for expanding applications in specific new arenas such as green tires, biodegradable and other unique bioelastoplast product lines that desire a new approach. Additionally, this research, while slowed by the COVID-19 pandemic, showed attributes with extra low ammonia offerings that are desired.

Towards the end of 2020, Vystar entered into a Market Development and Distribution Agreement with Corrie MacColl, Ltd. ("CMC Global") to produce, develop and manage the Vytex product and supply lines. This agreement allows Vystar to expand the market for its Natural Rubber Latex products and has garnered much attention across a broad range of industries including liquid Vytex as well as the newly developed dry rubber Vytex. As of the date of this report, CMC Global has provided numerous opportunities that are in a trial basis or moving towards manufacturing trials in industries that use a significant amount of natural rubber latex, hence Vytex that now includes production size trial runs in a large dipped product consumer line starting late 2022. Additionally, Vystar now has a testing supply of Vytex dry rubber for larger trials. The success of early trials and the shipping crisis has led to broader spectrum of manufacturers combining the potential of Cameroon production with strategically placed contract manufacturers based on geographical needs including the North American market. Also, Vystar research has shown great strides in specializing liquid Vytex (ultra-low protein latex, ULPL) to meet the immediate needs of customers such as low or no nitrosamine and others (discussed in the presentation below available in the pdf) and additional patents have been proposed to cover these findings. Research into dry rubber continues at a moderate pace as tire companies seek out alternatives to synthetics.

In Halcyon Agri (owner of CMC Global), 2020 Corporate Report: "Our group-wide innovation capabilities have enabled us to engage in innovative commercial partnerships. Corrie MacColl is collaborating with Vystar to transform our Cameroon plantation output into ultra-pure latex with stronger molecular bond that offers enhanced strength, durability, and flexibility in the end products. This is achieved by removing non-rubber components and 99.85% of the proteins." CMC Global continues to work with the facility at Cameroon to produce Vytex at their owned processing plant.

Vytex researcher Dr. Ranjit Matthan and CMC Global Director John Heath presented at The International Latex Conference which was held virtually July 20 to 22, 2021 and offered a plenary session entitled "Innovations and Sustainability in Natural Rubber Latex - The New Paradigm." The presentation discussed the dramatic effect the COVID-19 pandemic has had on the natural rubber supply chain, and how the industry is reacting the new economic circumstances, including strategy and policy shifts in supply chain management and restoring greater geographic diversification of latex processing and product manufacturing. The R&D association with IRMRA promises quicker laboratory and field-based testing and evaluations downstream. At Vystar, the recalibrated sustainability program (FSC, nitrosamines & ammonia free, ultralow proteins, no SVHC and green carbon neutrality) emphasize certifications with Corrie MacColl market reach facilitating faster rollouts. Nontraditional/non Hevea brasiliensis based production efforts are likely to continue to face new penetration and high cost-benefit acceptance challenges in this decade. A PDF of the full presentation is available on vytex.com.

Additionally, in August 2021, Dr. Matthan presented new data to the Automotive Tyre Manufacturers' Association including Vytex dry rubber.

In July 2025, the Company unveiled a newly redesigned website, www.vytex.com, as part of a comprehensive brand refresh aimed at improving customer interaction and enhancing digital presence. This initiative aligns with our strategy to provide a more engaging and user-friendly experience for our customers.

About FEC

Vystar is looking to Fluid Energy as it moves forward in its quest for a cleaner and safer environment. The Company is planning to improve its air purifying by using the ultrasonic technology of Fluid Energy and combining it with its leading UV-C technology. The designs and prototypes are in development. This ultrasonic technology is applied into water products with the same goal. We have a prototype and are evaluating our ability to eradicate hard water pollution that fouls pools, fountains, and pumps. By the end of the year, we expect to run a trial on FEC/Hughes devices for hard water abatement and dialysis membrane efficiency. These products will move us toward living more safely and cleanly in our environment.

In May 2025, Vystar announced the completion of a groundbreaking RxAir prototype, integrating the cutting-edge Fluid Energy conversion technology with the Hughes Reactor. This advancement, developed by Dr. Bryan Stone, who serves on Vystar's board, represents a significant leap in innovation for the Company. Due to the fluctuations of tariffs by the U.S. government and cash flows, production has been delayed to 2026-2027.

Other Matters

We are monitoring current developments in trade policy and tariff actions by the U.S. government, including imports from China and baseline tariffs on most imports from most other countries. These tariffs could adversely impact our growth and cost of products sold.

To ensure continued growth of its product lines, Vystar is exploring a reverse merger or other transaction of the RxAir division which would include a perpetual license from FEC, and a second spinout, sale or other transaction involving the Vytex and FEC divisions.

Vystar's board is currently in discussions to acquire a minority interest (less than 10%) in GOPAID.COM, LLC. (GOPAID). The primary goal of GOPAID is to tokenize real-world collectibles that can be traded on a blockchain, and work with music artists to help monetize their collections of memorabilia by exchanging memorabilia for GOPAID's crypto coin as well as expand into sales, and loaning of music, sport and non-sport collectibles.

RESULTS OF OPERATIONS

Comparison of the Three Months Ended September 30, 2025 with the Three Months Ended September 30, 2024

		Three Months Ended September 30,
		2025				2024				$ Change				% Change
		CONSOLIDATED
Revenue		$	20,385			$	53,094			$	(32,709	)			-61.6	%
Cost of revenue			5,020				17,092				(12,072	)			-70.6	%
Gross profit			15,365				36,002				(20,637	)			-57.3	%
Operating expenses:
Salaries and commissions			647				1,142				(495	)			-43.3	%
Share-based compensation			199,097				143,751				55,346				38.5	%
Professional fees			24,174				65,433				(41,259	)			-63.1	%
Advertising			1,825				-				1,825				100.0	%
Consulting			-				45,000				(45,000	)			-100.0	%
Rent			10,464				10,250				214				2.1	%
Depreciation and amortization			15,484				18,627				(3,143	)			-16.9	%
Other operating			10,650				9,563				1,087				11.4	%
Total operating expenses			262,341				293,766				(31,425	)			-10.7	%
Loss from operations			(246,976	)			(257,764	)			10,788				-4.2	%
Other expense:
Interest expense			(24,411	)			(94,196	)			69,785				-74.1	%
Net loss from continuing operations			(271,387	)			(351,960	)			80,573				-22.9	%
Discontinued operations:
Income from operations			-				7,256				(7,256	)			-100.0	%
Net loss			(271,387	)			(344,704	)			73,317				-21.3	%
Net income attributable to noncontrolling interest			-				(3,047	)			3,047				-100.0	%
Net loss attributable to Vystar		$	(271,387	)		$	(347,751	)		$	76,364				-22.0	%

Revenues

Revenues for the three months ended September 30, 2025 and 2024 were $20,385 and $53,094, respectively, for a decrease of $32,709 or 61.6%. The decrease in revenues was due in part to a bulk sale of Vytex totaling $20,000 in 2024. The Company will continue to review its pricing and sales strategies in the fourth quarter of 2025 and into 2026.

The Company reported gross profit of $15,365 for the three-month period ended September 30, 2025 compared to gross profit of $36,002 for the three-month period ended September 30, 2024, a decrease of $20,637 or 57.3%. The decrease in gross profit is due to decreased sales and increased channel costs.

The cost of revenue for the three months ended September 30, 2025 and 2024 was $5,020 and $17,092, respectively, a decrease of $12,072 or 70.6%.

Operating Expenses

The Company's operating expenses consist primarily of compensation and support costs for management and administrative staff, and for other general and administrative costs, including professional fees related to accounting, finance, and legal services as well as consulting, advertising and other operating expenses. The Company's operating expenses were $262,341 and $293,766 for the three months ended September 30, 2025 and 2024, respectively, a decrease of $31,425 or 10.7%. The net decrease was attributable to the temporary suspension of consulting fees to Blue Oar of $45,000, decrease in professional fees of $41,259, and the increase of share-based compensation of $55,346.

Other Expense

Other expense for the three months ended September 30, 2025 and 2024 was $24,411 and $94,196, respectively, a decrease of $69,785 or 74.1%. The decrease was due to the amortization of debt discount on related party debt in 2024.

Discontinued Operations

There were no discontinued operations for the three months ended September 30, 2025. Income from discontinued operations for the three months ended September 30, 2024 was $7,256. The decrease of $7,256 was attributable to the final winding down of operations.

Net Loss

Net loss was $271,387 and $344,704 for the three months ended September 30, 2025 and 2024, respectively, a decrease of $73,317 or 21.3%. The overall decrease is due to other expense or interest expense, as loss from operations was fairly consistent with the three months ended September 30, 2024.

RESULTS OF OPERATIONS

Comparison of the Nine Months Ended September 30, 2025 with the Nine Months Ended September 30, 2024

		Nine Months Ended September 30,
		2025				2024				$ Change				% Change
		CONSOLIDATED
Revenue		$	44,657			$	128,770			$	(84,113	)			-65.3	%
Cost of revenue			18,603				57,444				(38,841	)			-67.6	%
Gross profit			26,054				71,326				(45,272	)			-63.5	%
Operating expenses:
Salaries and commissions			647				8,633				(7,986	)			-92.5	%
Share-based compensation			559,287				429,915				129,372				30.1	%
Professional fees			176,599				216,232				(39,633	)			-18.3	%
Advertising			3,392				962				2,430				252.6	%
Consulting			-				135,000				(135,000	)			-100.0	%
Rent			31,434				40,748				(9,314	)			-22.9	%
Depreciation and amortization			52,738				55,881				(3,143	)			-
Other operating			54,305				28,966				25,339				87.5	%
Total operating expenses			878,402				916,337				(37,935	)			-4.1	%
Loss from operations			(852,348	)			(845,011	)			(7,337	)			0.9	%
Other expense:
Interest expense			(303,943	)			(138,472	)			(165,471	)			119.5	%
Loss on settlement of debt, net			(79,846	)			-				(79,846	)			100.0	%
Total other expense, net			(383,789	)			(138,472	)			(245,317	)			177.2	%
Net loss from continuing operations			(1,236,137	)			(983,483	)			(252,654	)			25.7	%
Discontinued operations:
Loss from operations			(456	)			(24,080	)			23,624				-98.1	%
Net loss			(1,236,593	)			(1,007,563	)			(229,030	)			22.7	%
Net loss attributable to noncontrolling interest			192				10,114				(9,922	)			-98.1	%
Net loss attributable to Vystar		$	(1,236,401	)		$	(997,449	)		$	(238,952	)			24.0	%

Revenues

Revenues for the nine months ended September 30, 2025 and 2024 were $44,657 and $128,770, respectively, for a decrease of $84,113 or 65.3%. The decrease in revenues was due in part to reduced sales to a former major customer and a special bulk sale of Vytex in 2024. The Company will continue to review its pricing and sales strategies for the remainder of 2025 and into 2026.

The Company reported gross profit of $26,054 for the nine-month period ended September 30, 2025 compared to gross profit of $71,326 for the nine-month period ended September 30, 2024, a decrease of $45,272 or 63.5%. The decrease in gross profit is due to decreased sales and increased channel costs.

The cost of revenue for the nine months ended September 30, 2025 and 2024 was $18,603 and $57,444, respectively, a decrease of $38,841 or 67.6%.

Operating Expenses

The Company's operating expenses consist primarily of compensation and support costs for management and administrative staff, and for other general and administrative costs, including professional fees related to accounting, finance, and legal services as well as consulting, advertising and other operating expenses. The Company's operating expenses were $878,402 and $916,337 for the nine months ended September 30, 2025 and 2024, respectively, a decrease of $37,935 or 4.1%. The net decrease was attributable to the temporary suspension of consulting fees to Blue Oar of $135,000, decrease in professional fees of $39,633, and the increase of share-based compensation of $129,372 and other operating expenses of $25,339.

Other Expense

Other expense for the nine months ended September 30, 2025 and 2024 was $383,789 and $138,472, respectively, an increase of $245,317 or 177.2%. The increase was due to accrued interest and amortization of debt discount on related party debt and loss on settlement of debt from the conversion of shareholder convertible notes of $93,620, offset by a gain on settlement of a vendor liability of $13,774.

Discontinued Operations

Loss from discontinued operations for the nine months ended September 30, 2025 and 2024 was $456 and $24,080, respectively. The decrease was attributable to the final winding down of expenses in 2024.

Net Loss

Net loss was $1,236,593 and $1,007,563 for the nine months ended September 30, 2025 and 2024, respectively, an increase of $229,030 or 22.7%. The overall increase is due to other expense, as loss from operations was fairly consistent with the nine months ended September 30, 2024.

LIQUIDITY AND CAPITAL RESOURCES

The Company's financial statements are prepared using the accrual method of accounting in accordance with U.S. GAAP and have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. However, we have incurred significant losses and experienced negative cash flow since inception. At September 30, 2025, the Company had cash of $16,584 and a deficit in working capital of approximately $6.3 million. Further, at September 30, 2025, the accumulated deficit amounted to approximately $61.1 million. We use working capital to finance our ongoing operations, and since those operations do not currently cover all of our operating costs, managing working capital is essential to our Company's future success. Because of this history of losses and financial condition, there is substantial doubt about the Company's ability to continue as a going concern.

A successful transition to profitable operations is dependent upon obtaining sufficient financing to fund the Company's planned expenses and achieving a level of revenue adequate to support the Company's cost structure.

Management plans to finance future operations using cash on hand, as well as growing existing product lines from RxAir air purifier sales and Vytex license fees. The Company will also raise capital with common stock subscription issuances and is exploring merger and acquisition opportunities, such as a reverse merger of its RxAir division and a second spinout, sale or other transaction involving the Vytex and FEC divisions.

There can be no assurances that we will be able to achieve projected levels of revenue in 2025 and beyond. If we are not able to achieve projected revenue and obtain alternate additional financing of equity or debt, we would need to significantly curtail or reorient operations during 2025, which could have a material adverse effect on our ability to achieve our business objectives, and as a result, may require the Company to file bankruptcy or cease operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts classified as liabilities that might be necessary should the Company be forced to take any such actions.

Our future expenditures will depend on numerous factors, including: the rate at which we can introduce RxAir products and license Vytex NRL raw material and the foam cores made from Vytex to manufacturers and subsequently retailers; the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights, along with market acceptance of our products, and services and competing technological developments. As we expand our activities and operations, our cash requirements are expected to increase at a rate consistent with revenue growth after we achieve sustained revenue generation.

Sources and Uses of Cash

Net cash used in operating activities was $166,263 for the nine months ended September 30, 2025 as compared to net cash used in operating activities of $79,902 for the nine months ended September 30, 2024. During the nine months ended September 30, 2025, cash used in operations was primarily due to the net loss offset by non-cash expenses of share-based compensation, depreciation, amortization and expenses paid directly by related party debt and loss on settlement of debt, net.

Net cash provided by investing activities was $1,000 for the nine months ended September 30, 2024, as compared to no cash flows for the nine months ended September 30, 2025. The source in the prior year period represented proceeds from the sale of property and equipment from discontinued operations.

Net cash provided by financing activities was $174,679 during the nine months ended September 30, 2025, as compared to net cash provided by financing activities of $61,986 during the nine months ended September 30, 2024. During the nine months ended September 30, 2025, cash was provided by advances from stock subscription payable of $208,636 and common stock issuances of $16,364. Cash was used in the repayment of related party term debt of $41,527 and repayment of related party advances of $8,794. During the nine months ended September 30, 2024, cash was provided by discontinued operations of $61,986.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that may be reasonably likely to have a current or future material effect on our financial condition, liquidity, or results of operations.

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

Our Management's Discussion and Analysis contains not only statements that are historical facts, but also statements that are forward-looking (within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934). Forward-looking statements are, by their very nature, uncertain and risky. These risks and uncertainties include international, national and local general economic and market conditions; demographic changes; our ability to sustain, manage, or forecast growth; product development, introduction and acceptance; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; fluctuations and difficulty in forecasting operating results; changes in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; and other risks that might be detailed from time to time in our filings with the Securities and Exchange Commission.

Although the forward-looking statements in this Quarterly Report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by them. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report and in our other reports as we attempt to advise interested parties of the risks and factors that may affect our business, financial condition, and results of operations and prospects.