What changed in this filing

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Item 1. Financial Statements

2026-05-15 compared with 2025-11-14 · 963 added, 871 removed, 297 unchanged (86% of the section changed)

FINANCIAL STATEMENTS

Financial statements (Unaudited)

BIOPHARMA HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

expenses and other

March 31, 2026

December 31, 2025

CURRENT ASSETS

AND SHAREHOLDERS’ DEFICIT

payable – related party

note fee – related party

current liabilities

and transfer notes payable – related party

agreement loan

Cash and cash equivalents

Prepaid expenses and other current assets

Total current assets

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

CURRENT LIABILITIES

purchase agreement liability

AND CONTINGENCIES (Note 9)

SHAREHOLDERS’

$ 0.0001 par value, 10,000,000 shares authorized, none issued or outstanding

Accounts payable

Accrued expenses

Due to affiliate

Notes payable – related party

Promissory note fee – related party

Derivative liability

Loan and transfer notes payable – related party

Subscription agreement loans

Convertible note

Total current liabilities

Forward purchase agreement liability

TOTAL LIABILITIES

COMMITMENTS AND CONTINGENCIES (Note 7)

STOCKHOLDERS’ EQUITY (DEFICIT)

Preferred stock;

par value, 10,000,000 shares authorized;

25,000 designated as Series A convertible preferred stock and

none issued or outstanding

Series A convertible preferred stock, 25,000 shares as designated,

$ 0.0001 par value;

13,750 and 0 shares issued or outstanding at March 31, 2026 and December 31, 2025, respectively

Common stock;

$ 0.0001 par value;

490,000,000 shares authorized;

49,525,970 and 27,601,767 issued and outstanding at September 30, 2025 and

December 31, 2024, respectively

paid-in capital

( 22,550,347 )

167,470 and 117,780 issued and outstanding at March 31, 2026 and December 31, 2025, respectively

Additional paid-in capital

Accumulated deficit

( 30,480,973 )

SHAREHOLDERS’ DEFICIT

( 27,258,081 )

TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)

( 6,376,329 )

LIABILITIES AND SHAREHOLDERS’ DEFICIT

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

Company’s common stock shares issued and outstanding, common stock and additional paid-in capital as of December 31, 2025 and March

31, 2026 have been retroactively restated for the reverse stock splits as described in Note 2 of the accompanying notes, which are an

integral part of these unaudited condensed consolidated financial statements.

BIOPHARMA HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

the Three Months Ended

the Nine Months Ended

of goods sold

and administrative (including stock based compensation of $ 0 , $ 0 , $ 14.1 M and $ 0 , respectively)

and development

and marketing

For the Three Months Ended March 31,

Cost of revenue

OPERATING EXPENSES

from operations

( 1,145,497 )

General and administrative (including stock based compensation of $ 13,406

and $ 14,131,250 , respectively)

Research and development

Sales and marketing

Total operating expenses

Loss from operations

( 1,646,169 )

income (expense):

( 15,556,480 )

Other income (expense):

Interest income

Interest expense

( 1,595,315 )

in fair value of derivative liability

on extinguishment of debt

other (expense) income, net

Change in fair value of derivative liabilities and convertible notes

Loss on extinguishment of debt

Total other expense, net

( 1,576,723 )

Loss before provision for income taxes

( 3,222,892 )

( 15,941,328 )

Income tax expense

$ ( 3,222,892 )

$ ( 15,941,328 )

average shares outstanding of Common Stock

and diluted net loss per share of Common Stock

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Weighted average shares outstanding of Common Stock

Basic and diluted net loss per share of Common Stock

Company’s weighted average shares outstanding of common stock and loss per share for the three months ended March 31, 2025 and

2026 have been retroactively restated for the reverse stock splits as described in Note 2 of the accompanying notes, which are an integral

part of these unaudited condensed consolidated financial statements.

BIOPHARMA HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT

THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024

Shareholders’

- January 1, 2025

$ ( 2,777,233 )

$ ( 1,540,088 )

Conversion of warrants

of shares in Reverse Acquisition

( 4,603,302 )

( 4,602,576 )

of shares under working capital loans and non redemption agreements

of commitment fee shares under ELOC agreement

based compensation

( 15,941,328 )

– March 31, 2025

( 18,718,561 )

( 7,952,742 )

issued pursuant to settlement agreement

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT )

THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025

Series A Preferred Stock

Additional Paid-in

Stockholders’

Balance - January 1, 2026

$ ( 27,258,081 )

$ ( 6,376,329 )

– June 30, 2025

Issuance of Series A Convertible Preferred Stock

Conversion of convertible notes to Series A Convertible Preferred Stock

Conversion of convertible Notes

Issuance of incentive shares pursuant to the January 2026 Share Purchase Agreement

Issuance of commitment fee shares under ELOC agreement

Issuance of shares pursuant to debt exchange agreements

( 3,222,892 )

Balance – March 31, 2026

$ ( 30,480,973 )

Stock based compensation

Additional Paid-in

Total Stockholders’

Balance - January 1, 2025 (Restated)

( 2,777,233 )

– September 30, 2025

( 1,540,088 )

Balance (Restated)

( 2,777,233 )

Shareholders’

- January 1, 2024

( 1,540,088 )

Conversion of warrants

Issuance of shares in Business Combination

( 4,602,577 )

application of recapitalization

( 4,602,576 )

- January 1, 2024

Issuance of shares under working capital loans and non redemption agreements

Issuance of commitment fee shares under ELOC agreement

Stock based compensation

( 15,941,328 )

of common stock

- March 31, 2024

( 15,941,328 )

of common stock

- June 30, 2024

Balance – March 31, 2025

$ ( 18,718,561 )

- September 30, 2024

$ ( 7,952,742 )

- December 31, 2024

$ ( 18,718,561 )

$ ( 7,952,742 )

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Company’s common stock issued and outstanding, common stock and additional paid-in capital for the three months ended March 31,

2025 and 2026 have been retroactively restated for the reverse stock splits as described in Note 2 of the accompanying notes, which are

an integral part of these unaudited condensed consolidated financial statements.

BIOPHARMA HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

the Nine Months Ended

FLOWS FROM OPERATING ACTIVITIES

For the Three Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES

$ ( 3,222,892 )

$ ( 15,941,328 )

to reconcile net loss to net cash used in operating activities:

of debt discount

on extinguishment of debt

in fair value of derivative liabilities

based compensation

in operating assets and liabilities:

current liabilities

cash flows provided by (used in) operating activities

Adjustments to reconcile net loss to net cash flows used in operating activities:

Amortization of debt discount

Loss on extinguishment of debt

Interest expense

Change in fair value of derivative liabilities and convertible notes

Interest capitalized

Stock based compensation

Changes in operating assets and liabilities:

Prepaid expenses and other current assets

Accounts payable

Accrued expenses

Due from related party

( 1,027,920 )

FLOWS FROM FINANCING ACTIVITIES

of common stock

term loan from shareholders

from recapitalization

from issuance of convertible notes

of convertible notes

Other current liabilities

NET CASH FLOWS USED IN OPERATING ACTIVITIES

( 3,038,522 )

of subscription agreement loan

costs paid in connection with convertible notes

from notes payable - related party

of notes payable – related party

cash flows provided by (used in) financing activities

CHANGE IN CASH

BEGINNING OF THE PERIOD

END OF THE PERIOD

disclosure of noncash investing and financing activities:

payable and other liabilities combined, net

pursuant to settlement agreement

of shares in reverse acquisition

of shares under working capital loans and non redemption agreements

of commitment fee shares under ELOC agreement

cashflow information:

( 1,751,528 )

CASH FLOWS FROM FINANCING ACTIVITIES

Issuance of Series A convertible preferred stock

Proceeds from recapitalization

Proceeds from issuance of convertible notes

Proceeds from debenture

Repayment of debenture

( 2,173,913 )

Proceeds from notes payable - related party

Repayment of notes payable – related party

NET CASH FLOWS PROVIDED BY FINANCING ACTIVITIES

NET CHANGE IN CASH

CASH, BEGINNING OF THE YEAR

CASH, END OF THE QUARTER

Supplemental disclosure of noncash investing and financing activities:

Conversion of convertible notes

Issuance of incentive shares pursuant to the January 2026 Share Purchase Agreement

Issuance of shares pursuant to debt exchange agreements

Conversion of convertible note to Series A convertible preferred stock

Accounts payable and other liabilities combined, net

Promissory note fee - related party, combined

Subscription agreement loans combined

Loan and transfer note payable combined

Forward purchase agreement liability combined

Supplemental cashflow information:

Interest paid

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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(the “Company” or “Aspire”) was incorporated as PowerUp Acquisition Corp., a Cayman

Islands exempted company, on February 9, 2021.

On February 17, 2025, the Company completed the Reverse Acquisition described below and

changed its name to Aspire Biopharma Holdings, Inc.

Aspire is an early-stage biopharmaceutical company which engages in the business

of developing and marketing disruptive technology for novel sublingual delivery mechanisms initially for known drugs and supplements,

such as aspirin and caffeine products.

Islands exempted company, on February 9, 2021, then domesticated to Delaware as a corporation on February 17, 2025.

On February 17, 2025,

the Company completed the Reverse Recapitalization described below and changed its name to Aspire Biopharma Holdings, Inc.

an early-stage biopharmaceutical company which engages in the business of developing and marketing disruptive technology for novel sublingual

delivery mechanisms initially for known drugs and supplements, such as aspirin and caffeine products.

August 26, 2024, the Company (known as PowerUp Acquisition Corp.

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Quesenberry, in the capacity as the seller representative, and Aspire Biopharma, Inc., a Puerto Rico corporation (“Aspire Biopharma,

February 17, 2025 (the “Closing Date”), the Company consummated the reverse acquisition transaction (the “Reverse Acquisition”)

pursuant to the terms of the Aspire Merger Agreement In connection with the consummation of the Reverse Acquisition, the Company changed

its name from PowerUp Acquisition Corp.

February 17, 2025 (the “Closing Date”), the Company consummated the reverse recapitalization transaction (the “Reverse

Recapitalization”) pursuant to the terms of the Aspire Merger Agreement.

In connection with the consummation of the Reverse Recapitalization,

the Company changed its name from PowerUp Acquisition Corp.

to “Aspire Biopharma Holdings, Inc.” ( See Note 2 - Recapitalization ).

May 5, 2025, the Company formed a wholly owned subsidiary, Buzz Bomb Caffeine Co.

LIQUIDITY AND GOING CONCERN

Company has two wholly-owned subsidiaries, Aspire Biopharma Inc., a Delaware corporation, formed on October 8, 2021, and Buzz Bomb Caffeine

LC, a Utah corporation, formed on May 5, 2025.

Company’s primary sources of liquidity have been cash from financing activities.

The Company had an accumulated deficit of $ 22,550,347

as of September 30, 2025.

As of September 30, 2025, working capital deficit was $ 11,457,377 and cash was $ 1,948,271 .

Company received proceeds of approximately $ 265,827 as a result of the Reverse Acquisition in February 2025, after giving effect to stockholder

redemptions and payment of transaction expenses in connection with the Reverse Acquisition.

The Company received an additional $ 3,000,000

pursuant to the convertible note agreements issued under the Securities Purchase Agreement entered into on February 17, 2025.

The Company’s

future capital requirements will depend on many factors, including the timing and extent of spending to support further sales and marketing

and research and development efforts.

In order to finance these opportunities, the Company will need to raise additional financing.

there can be no assurances, the Company intends to raise such capital through issuances of additional equity.

If additional financing

is required from outside sources, the Company may not be able to raise it on terms acceptable to the Company or at all.

If the Company

is unable to raise additional capital when desired, the Company’s business, results of operations and financial condition would

be materially and adversely affected.

a result of the above, in connection with the Company’s assessment of going concern considerations in accordance with Financial

Accounting Standard Board (“FASB”) Accounting Standards Codification (“ASC”) Subtopic 205-40, “Going Concern,”

management has determined that the Company’s liquidity condition raises substantial doubt about the Company’s ability to

continue as a going concern through twelve months from the date these condensed consolidated financial statements are available to be

These condensed consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets

or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

For the three months ended March 31, 2026, net

loss was $ 3,222,892 .

The Company had an accumulated deficit of $ 30,480,973 as of March 31, 2026.

As of March 31, 2026, working capital

was $ 3,964,715 and cash was $ 5,857,024 .

In February 2025, the Company received proceeds of approximately $ 265,827 as a result of the

Reverse Recapitalization.

Immediately after the consummation of the Reverse Recapitalization, the Company received $ 3,000,000 from the

issuance of convertible notes and an additional net cash proceeds of $ 2,661,459 after partial repayment of the convertible notes and

deal costs pursuant to the August 19, 2025 Securities Purchase Agreement.

In February 2026, the Company entered into a Securities Purchase

Agreement (See Note 8) pursuant to which it received net payout of approximately $ 6,777,206 after repayment of the remaining convertible

notes and deal costs under the first tranche for purchases of convertible preferred stock.

The Company also entered into an ELOC agreement

in November 2025, pursuant to which it can sell up to $ 100 million in common stock over 24 months.

In April 2026, the Company closed

the final tranche of the Securities Purchase Agreement (See Note 12) and received an additional $ 9,000,000 after payment of applicable

Management has determined that the Company’s current liquidity position is sufficient to fund its operations for at least

one year after the filing of these unaudited condensed consolidated financial statements.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally

accepted in the United States of America (“U.S.

GAAP”) for interim financial information and in accordance with the instructions

to Form 10-Q and Article 8 of Regulation S-X of the United States Securities and Exchange Commission (“SEC”).

Certain information

or footnote disclosures normally included in unaudited condensed consolidated financial statements prepared in accordance with U.S.

have been condensed consolidated or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting.

accepted in the United States (“U.S.

GAAP”) issued by the Financial Accounting Standard Board (“FASB”) for interim

financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the United States Securities

and Exchange Commission (“SEC”) and expressed in U.S.

information or footnote disclosures normally included in unaudited condensed consolidated financial statements prepared in accordance

GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting.

they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations,

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accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report

on Form 10-K for the period ended December 31, 2024, as filed with the SEC on April 7, 2025.

The interim results for the three and nine

months ended September 30, 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2025, or

for any future period.

on Form 10-K for the period ended December 31, 2025, as filed with the SEC on March 30, 2026.

The interim results for the three months

ended March 31, 2026 are not necessarily indicative of the results to be expected for the year ending December 31, 2026, or for any future

January 16, 2026, the Company effected a 1-for-40 reverse stock split with respect to the common stock (the “Reverse Split”).

All share and per share information in these unaudited condensed consolidated financial statements given effect to this reverse stock

split, including restating prior period reported amounts.

May 11, 2026, the Company effected a 1-for-30 reverse stock split with respect to the common stock (the “Second Reverse

Split”) (collectively with the Reverse Split, the “Reverse Splits”).

All share and per share information in these unaudited condensed

consolidated financial statements gives effect to the Reverse Splits, including restating prior-period

The Reverse Splits had no effect on the Company’s authorized

number of shares of common stock, the par value of common stock, the warrants outstanding, total assets, total liabilities, or stockholders’

equity (deficit).

The Company restated the common stock outstanding (shares and amount) and additional paid-in capital

(“APIC”) to reflect the number of shares outstanding after the Reverse Splits.

of Consolidation

accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries.

All significant

intercompany balances and transactions have been eliminated in consolidation.

accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries.

All significant intercompany balances and transactions have been eliminated in consolidation.

Growth Company

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adopt the new or revised standard.

may make the comparison of the Company’s consolidated financial statements with another public company difficult or impossible

because of the potential differences in accounting standards used.

preparation of consolidated financial statements in conformity with U.S.

GAAP requires the Company’s 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 consolidated financial statements.

Making estimates requires management to exercise significant judgment.

Such estimates

may be subject to change as more current information becomes available and accordingly the actual results could differ significantly

from those significant estimates.

It is at least reasonably possible that the estimate of the effect of a condition, situation or set

of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating its estimate,

could change in the near term due to one or more future confirming events.

Significant accounting estimates included in these financial

statements are the determination of the fair value of the subscription agreements and convertible notes.

Such estimates may be subject

to change as more current information becomes available and accordingly, the actual results could differ significantly from those estimates.

280, “Segment Reporting” (“ASC 280”), defines operating segments 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’s CODM is the Chief Executive Officer, who has ultimate responsibility

for the operating performance of the Company and the allocation of resources.

The CODM reviews the assets, operating results, and financial

metrics for the Company as a whole to make decisions about allocating resources and assessing financial performance.

Accordingly, management

has determined that there is only one reportable segment.

The CODM assesses performance for the single reportable segment and decides

how to allocate resources based on operating expenses that also is reported on the statements of operations as net income.

of segment assets is reported on the balance sheet as total assets.

When evaluating the Company’s performance and making key decisions

regarding resource allocation, the CODM reviews several key metrics included in operating expenses and cash.

expenses, inclusive of general and administrative costs, research and development costs and sales and marketing costs, are reviewed and

monitored by the CODM to manage and forecast cash to ensure enough capital is available to fund operations.

The CODM also reviews operating

expenses to manage, maintain and enforce all contractual agreements to ensure costs are aligned with all agreements.

The categories of

operating expenses, as reported on the statements of operations, are the significant segment expenses provided to the CODM on a regular

The Company’s unaudited condensed consolidated financial statements may not be comparable to

another public entity because of the potential differences in accounting standards used.

preparation of unaudited condensed consolidated financial statements in conformity with U.S.

GAAP requires the Company’s 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 unaudited condensed consolidated financial statements.

Making estimates requires management to exercise

significant judgment.

Such estimates may be subject to change as more current information becomes available and accordingly the actual

results could differ significantly from those significant estimates.

It is at least reasonably possible that the estimate of the effect

of a condition, situation or set of circumstances that existed at the date of the unaudited condensed consolidated financial statements,

which management considered in formulating its estimate, could change in the near term due to one or more future confirming events.

accounting estimates included in these financial statements are the determination of the fair value of the subscription agreements, convertible

notes and the securities purchase agreement liability.

Such estimates may be subject to change as more current information becomes available

and accordingly, the actual results could differ significantly from those estimates.

280, Segment Reporting (“ASC 280”), defines operating segments 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’s CODM is the Chief Executive Officer, who has ultimate responsibility for the operating

performance of the Company and the allocation of resources.

The CODM reviews the assets, operating results, and financial metrics for

the Company as a whole to make decisions about allocating resources and assessing financial performance.

Accordingly, management has

determined that there is only one reportable segment.

The CODM assesses performance for the single reportable segment and decides how

to allocate resources based on operating expenses that also is reported on the statements of operations.

The measure of segment assets

is reported on the unaudited condensed consolidated balance sheets as total assets.

When evaluating the Company’s performance and

making key decisions regarding resource allocation, the CODM reviews several key metrics included in operating expenses and cash.

margin, operating expenses, inclusive of general and administrative costs, research and development costs and sales and marketing costs,

other expenses, net and income tax expense, are reviewed and monitored by the CODM to manage and forecast cash to ensure enough capital

is available to fund operations.

The CODM also reviews operating expenses to manage, maintain and enforce all contractual agreements

to ensure costs are aligned with all agreements.

The categories of operating expenses, as reported on the unaudited condensed consolidated

statements of operations, are the significant segment expenses provided to the CODM on a regular basis.

Concentration

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and cash flows.

As of September 30, 2025 and December 31, 2024, the Company had $ 1,678,669 and $ 0 , respectively in deposits in U.S banks

in excess of the FDIC limit.

As of March 31, 2026 and December 31, 2025, the Company had $ 3,537,854 and $ 550,130 , respectively in deposits in U.S

banks in excess of the FDIC limit.

Deposits are maintained with high-quality financial institutions that management believes are creditworthy.

Company evaluates whether acquired net assets should be accounted for as a business combination or an asset acquisition by first applying

a screen test to determine whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable

asset or group of similar identifiable assets.

If so, the transaction is accounted for as an asset acquisition.

If not, the Company applies

its judgement to determine whether the acquired net assets meets the definition of a business by considering if the set includes an acquired

input, process, and the ability to create outputs.

Company accounts for business combinations using the acquisition method when it has obtained control.

The Company measures goodwill as

the fair value of the consideration transferred including the fair value of any non-controlling interest recognized, less the net recognized

amount of the identifiable assets acquired and liabilities assumed, all measured at their fair value as of the acquisition date.

costs, other than those associated with the issuance of debt or equity securities, that the Company incurs in connection with a business

combination are expensed as incurred.

contingent consideration is measured at fair value at the acquisition date.

For contingent consideration that does not meet all the criteria

for equity classification, such contingent consideration is required to be recorded at its initial fair value at the acquisition date,

and on each balance sheet date thereafter.

Changes in the estimated fair value of liability-classified contingent consideration are recognized

on the condensed consolidated statements of operations in the period of change.

the initial accounting for a business combination has not been finalized by the end of the reporting period in which the transaction

occurs, the Company reports provisional amounts.

Provisional amounts are adjusted during the measurement period, which does not exceed

one year from the acquisition date.

These adjustments, or recognition of additional assets or liabilities, reflect new information obtained

about facts and circumstances that existed at the acquisition date that, if known, would have affected the amounts recognized at that

of and for the year ended March 31, 2026, no single customer accounted for 10% or more of the company’s total revenue or accounts

The company’s customers are spread across various industries and geographic locations, and management believes that

no significant concentration of credit risk exists.

and Cash Equivalents

Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.

The Company did no t have any cash equivalents as of September 30, 2025 or December 31, 2024.

At March 31, 2026 and December 31, 2025 the cash equivalents were $ 1,826,743 and $ 0 , respectively.

Value of Financial Instruments

17 unchanged sentences

Inputs are unobservable for the asset or liability.

carrying amounts of certain financial instruments, such as accounts payable and accrued liabilities, approximate fair value due to their

carrying amounts of certain financial instruments, such as accounts payable and accrued expenses, approximate fair value due to their

relatively short maturities.

The fair value of debt instruments for which the Company has not elected the fair value option of accounting

is based on the present value of expected future cash flows and assumptions about the then-current market interest rates as of the reporting

period and the creditworthiness of the Company.

All of the Company’s debt is carried on the condensed consolidated balance sheet

on a historical cost basis net of unamortized discounts and premiums because the Company has not elected the fair value option of accounting.

The fair value of debt instruments for which the Company has the fair value option of accounting is based

on the present value of expected future cash flows and assumptions about the then-current market interest rates as of the reporting period

and the creditworthiness of the Company.

If the Company did not elect the fair value option of accounting for a debt, the debt is carried

on the unaudited condensed consolidated balance sheets on a historical cost basis net of unamortized discounts and premiums.

consisting of finished goods are stated at the lower of cost or market value with cost determined by the first-in, first-out (FIFO) method

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or in excess of future demand.

The Company provides impairment that is charged directly to cost of sales when it is has been determined

The Company provides impairment that is charged directly to cost of revenue when it has been determined

the product is obsolete, spoiled, and the Company will not be able to sell it at a normal profit above its carrying cost.

no impairment charges during the three and nine months ended September 30, 2025.

no impairment charges during the three months ended March 31, 2026 and 2025, and there were no allowances or reserves reducing the cost

basis of inventories as of March 31, 2026 and December 31, 2025.

and Development Cost

Company accounts for research and development cost (“R&D”) in accordance with ASC Topic 730, “Research and Development”.

R&D represents costs are expensed as incurred.

Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts .

The core principle of the guidance in Topic

606 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects

the consideration to which the entity expects to be entitled in exchange for those goods or services.

To achieve the core principle,

the Company applied the following five-step model that requires entities to exercise judgment:

Company accounts for research and development cost (“R&D”) in accordance with ASC 730, Research and Development (“ASC

R&D costs are expensed as incurred.

Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”).

principle of the guidance in ASC 606 is that an entity should recognize revenue to depict the transfer of promised goods or services

to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

To achieve the core principle, the Company applied the following five-step model that requires entities to exercise judgment:

Identify the contracts or agreements with a customer:

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The contract with the customer contains a single performance obligation:

fulfillment of the customer’s order.

fulfilment of the customer’s order.

Determine the transaction price:

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to in exchange for the services it transfers to its clients.

of Goods Sold

Company’s cost of revenue is comprised of costs related to its commercial revenue, including manufacturing costs and indirect costs

associated with the manufacturing and distribution of its products.

The Company also may include certain period costs related to manufacturing

services and inventory adjustments in cost of revenue.

Company accounts for income taxes under ASC 740, “Income Taxes” (“ASC 740”).

ASC 740 requires the recognition

of deferred tax assets and liabilities for both the expected impact of differences between the consolidated financial statement and tax

basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards.

740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax

assets will not be realized.

In assessing the realizability of deferred tax assets, the Company assesses the likelihood that deferred

tax assets will be recovered through tax planning strategies or from future taxable income, and to the extent that recovery is not likely

or there is insufficient earnings history, a valuation allowance is established.

The Company’s ability to utilize net operating

losses (“NOL”) carryforwards to offset future taxable income would be limited if the Company had undergone or were to undergo

an “ownership change” within the meaning of Section 382 of the Internal Revenue Code (the “IRC”).

adjusts the valuation allowance in the period management determines it is more likely than not that deferred tax assets will or will

not be realized.

Changes in valuation allowances from period to period are included in the tax provision in the period of change.

of September 30, 2025, the Company provided a valuation allowance for all net deferred tax assets as it is more likely than not that

the assets will not be recovered based on an insufficient history of earnings.

For the three and nine months ended September 30, 2025,

there were no provision for income taxes

740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s consolidated financial statements

and prescribes a recognition threshold and measurement process for consolidated financial statement recognition and measurement of a

tax position taken or expected to be taken in a tax return.

For those benefits to be recognized, a tax position must be more likely than

not to be sustained based on its technical merits and upon examination by taxing authorities.

If a tax benefit meets this criterion,

it is measured and recognized based on the largest amount of benefit that is cumulatively greater than 50% likely to be realized.

were no unrecognized tax benefits and no amounts accrued for interest and penalties as of September 30, 2025 and December 31, 2024.

Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from

its position.

associated with the manufacturing, storage and distribution of its products.

The Company also may include certain period costs related

to manufacturing services and inventory adjustments in cost of revenue.

Company follows the asset and liability method of accounting for income taxes under ASC 740, Income Taxes (“ASC 740”).

tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial

statements carrying amounts of existing assets and liabilities and their respective tax bases.

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 income in the period

that included the enactment date.

Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected

to be realized.

740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions

taken or expected to be taken in a tax return.

For those benefits to be recognized, a tax position must be more likely than not to be

sustained upon examination by taxing authorities.

The Company recognizes accrued interest and penalties related to unrecognized tax benefits

as income tax expense.

The Company is currently not aware of any issues under review that could result in significant payments, accruals

or material deviation from its position.

Company files income tax returns with the United States and the state of Utah.

Examinations by the United States and state tax authorities

may include questioning the timing and amount of deductions, the nexus of income among various state and local tax jurisdictions and

compliance with federal and state tax laws.

As of March 31, 2026, the 2025 inception year is subject to examination for U.S.

and state purposes.

July 2025, the One Big Beautiful Bill Act (Public Law 119-21) was enacted.

The Company recognized the income tax effects of the legislation

in the period of enactment in accordance with ASC 740.

The legislation did not have a material impact on the Company’s unaudited

condensed consolidated financial statements for the three months ended March 31, 2026.

The Company will continue to evaluate the impact

of the legislation on future periods.

740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s unaudited condensed consolidated

financial statements and prescribes a recognition threshold and measurement process for consolidated financial statement recognition

and measurement of a tax position taken or expected to be taken in a tax return.

For those benefits to be recognized, a tax position

must be more likely than not to be sustained based on its technical merits and upon examination by taxing authorities.

If a tax benefit

meets this criterion, it is measured and recognized based on the largest amount of benefit that is cumulatively greater than 50% likely

to be realized.

There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of March 31, 2026 and December

The Company is currently not aware of any issues under review that could result in significant payments, accruals or material

deviation from its position.

Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense.

The Company did no t recognize

interest or penalties on its consolidated statements of operations during the three and nine month period ended September 30, 2025.

Company does not anticipate unrecognized tax benefits will be recorded during the next 12 months.

interest or penalties on its unaudited condensed consolidated statements of operations during the three months ended March 31, 2026 and

Loss Per Share

net income (loss) per share is computed by dividing the net loss by the weighted average shares outstanding at the end of the period.

Diluted loss per share is computed by giving effect to all potential shares of common stock to the extent dilutive.

For the three and

nine months ended September 30, 2025 and 2024, the Company’s diluted weighted-average shares outstanding is equal to basic weighted-average

shares, due to the Company’s net loss position.

No common stock equivalents were included in the computation of diluted net loss

per unit since such inclusion would have been antidilutive.

At September 30, 2025 and December 31, 2024, potentially dilutive securities

include the public and private placement warrants and the convertible promissory notes.

Company accounts for share-based compensation arrangements granted to employees and vendors in accordance with ASC 718 by measuring the

grant date fair value of the award and recognizing the resulting expense over the period during which the employee is required to perform

service in exchange for the award.

Equity-based compensation expense is only recognized for awards subject to performance conditions

if it is probable that the performance condition will be achieved.

The Company accounts for forfeitures when they occur.

Company reviews the terms of warrants to purchase its common stock to determine whether warrants should be classified as liabilities

or stockholders’ deficit in its condensed consolidated balance sheets.

In order for a warrant to be classified in stockholders’

deficit, the warrant must be (i) indexed to the Company’s equity and (ii) meet the conditions for equity classification.

a warrant does not meet the conditions for stockholders’ deficit classification, it is carried on the condensed consolidated balance

sheets as a warrant liability measured at fair value, with subsequent changes in the fair value of the warrant recorded in other non-operating

losses (gains) in the condensed consolidated statements of operations.

If a warrant meets both conditions for equity classification,

the warrant is initially recorded, at its relative fair value on the date of issuance, in stockholders’ deficit in the condensed

consolidated balance sheets, and the amount initially recorded is not subsequently remeasured at fair value.

Issued Accounting Pronouncements Not Yet Adopted

December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures,” which requires

disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid.

The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital

allocation decisions.

The standard will be effective for public companies for fiscal years beginning after December 15, 2024.

Early adoption

is permitted.

The Company is currently evaluating the impact of this accounting standard update on its condensed consolidated financial

November 4, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (DISE), requiring additional disclosure of the nature

of expenses included in the statements of operations.

The new standard requires disclosures about specific types of expenses included

in the expense captions presented on the face of the statements of operations as well as disclosures about selling expenses.

is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods within annual reporting periods

beginning after December 15, 2027.

Company accounts for net loss per share in accordance with ASC 260, Earnings Per Share (“ASC 260”), which basic net income

(loss) per share is computed by dividing net loss by the weighted-average shares outstanding for the year.

Diluted net loss per share

is computed giving effect to all potentially dilutive common stock and common stock equivalents, including public and private placement

warrants and the convertible promissory notes.

Basic and diluted net loss per share were the same for all years presented as we were

in a loss position for all periods.

Company accounts for stock-based compensation arrangements granted to employees and vendors in accordance with ASC 718, Compensation-Stock

Compensation (“ASC 718”), by measuring the grant date fair value of the award and recognizing the resulting expense over

the period during which the employee is required to perform service in exchange for the award.

Equity-based compensation expense is only

recognized for awards subject to performance conditions if it is probable that the performance condition will be achieved.

accounts for forfeitures when they occur.

The Company reviews the terms of warrants to purchase

its common stock to determine whether warrants should be classified as liabilities or stockholders’ equity (deficit) in its consolidated

balance sheets.

In order for a warrant to be classified in stockholders’ equity (deficit), the warrant must be (i) indexed to the

Company’s equity and (ii) meet the conditions for equity classification.

If a warrant does not meet the conditions for

stockholders’ equity (deficit) classification, it is carried on the consolidated balance sheets as a warrant liability measured

at fair value, with subsequent changes in the fair value of the warrant recorded in other non-operating losses (gains) in the unaudited

condensed consolidated statements of operations.

If a warrant meets both conditions for equity classification, the warrant is initially

recorded, at its relative fair value on the date of issuance, in stockholders’ equity (deficit) in the unaudited condensed consolidated

balance sheets, and the amount initially recorded is not subsequently remeasured at fair value.

Issued Accounting Pronouncements

November 4, 2024 the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation

Disclosure (DISE), requiring additional disclosure of the nature of expenses included in the unaudited condensed consolidated statements

of operations.

The new standard requires disclosures about specific types of expenses included in the expense captions presented on the

face of the statements of operations as well as disclosures about selling expenses.

The standard is effective for annual reporting periods

beginning after December 15, 2026 and interim reporting periods within annual reporting periods beginning after December 15, 2027.

Company is currently assessing the impact of this ASU.

RECAPITALIZATION

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Biopharma, Inc., a Puerto Rico corporation.

February 17, 2025 prior to the time of the consummation of the reverse acquisition (the “Closing Date”), Merger Sub merged

with and into Aspire Biopharma, Inc, with Aspire Biopharma, Inc being the surviving company.

After giving effect to the Reverse Acquisition,

Aspire Biopharma, Inc became a wholly owned subsidiary of Aspire Biopharma Holdings, Inc., a Delaware corporation (f/k/a PowerUp Acquisition

Corp.) (“New Aspire”).

At Closing Date, the Aspire Biopharma, Inc Stockholders collectively received, in the aggregate, a

number of shares of duly authorized, validly issued, fully paid and nonassessable shares of New Aspire Biopharma, Inc Common Stock with

an aggregate value equal to (a) $ 350 million less (b) the amount by which Aspire Biopharma, Inc’s cash at Closing is less than

the Minimum Cash Condition (but only in the event the Minimum Cash Condition is waived by PowerUp), if any, less (c) Aspire’s indebtedness

February 17, 2025 prior to the time of the consummation of the reverse recapitalization (the “Closing Date”), Merger Sub

merged with and into Aspire Biopharma, Inc, with Aspire Biopharma, Inc being the surviving company.

After giving effect to the Reverse

Recapitalization, Aspire Biopharma, Inc became a wholly-owned subsidiary of Aspire Biopharma Holdings, Inc., a Delaware corporation (f/k/a

PowerUp Acquisition Corp.) (“New Aspire”).

At Closing Date, the Aspire Biopharma, Inc stockholders collectively received,

in the aggregate, a number of shares of duly authorized, validly issued, fully paid and nonassessable shares of New Aspire Common Stock

with an aggregate value equal to (a) $ 350 million less (b) the amount by which Aspire Biopharma, Inc’s cash at Closing is less

than the Minimum Cash Condition (but only in the event the Minimum Cash Condition is waived by PowerUp), if any, less (c) Aspire’s

indebtedness at Closing.

to the Merger Agreement, PowerUp migrated out of the Cayman Islands and domesticated as a Delaware corporation.

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entity’s common stock, Series A preferred stock, and warrants, respectively.

connection with the change of PowerUp’s jurisdiction of incorporation from the Cayman Islands to the State of Delaware ( the “PowerUp

Domestication”), prior to the consummation of the Reverse Acquisition (the” Closing Date”):

(i) each issued and outstanding

Class A ordinary share, par value $ 0.0001 per share (the “Class A common stock”), of PowerUp converted, on a one-for-one

basis, into a duly authorized, validly issued, fully paid and nonassessable share of common stock, par value $ 0.0001 per share, of New

Aspire (the “New Aspire Common Stock”);

and (ii) each issued and outstanding whole warrant to purchase Class A common stock

of PowerUp automatically represented the right to purchase one share of New Aspire Common Stock, at an exercise price of $ 11.50 per share

on the terms and conditions set forth in the Warrant Agreement, dated as of February 17, 2022, by and between PowerUp and Equiniti Trust

Company, LLC (f/k/a American Stock Transfer & Trust Company), a New York limited purpose trust company, as warrant agent (in such

capacity, the “Warrant Agent”, also referred to herein as the “Transfer Agent”) (the “Warrant Agreement”).

Immediately following the PowerUp Domestication, (i) the New Aspire Common Stock reclassified as common stock, par value $ 0.0001 per

share (the “New Aspire Common Stock”);

(ii) each issued and outstanding unit of PowerUp that had not been previously separated

into the underlying Class A ordinary share and underlying one-half of one warrant upon the request of the holder thereof were cancelled

and entitled the holder thereof to one share of New Aspire Common Stock and one-half of one public warrant, with a whole public warrant

representing the right to acquire one share of New Aspire Common Stock at an exercise price of $ 11.50 per share on the terms and conditions

set forth in the Warrant Agreement;

(iii) the governing documents of PowerUp were amended and restated and become the certificate of

incorporation and the bylaws of New and (iv) the form of the certificate of incorporation and the bylaws were appropriately adjusted

to give effect to any amendments contemplated by the form of certificate of incorporation or the bylaws that are not adopted and approved

by the PowerUp shareholders, other than the amendments to the PowerUp governing documents that are contemplated by the Organizational

Documents Proposal, which is a condition to the Closing of the Reverse Acquisition.

No fractional warrants were issued upon the separation

of units and only whole warrants are traded.

to the effective time of the consummation of the Reverse Acquisition, Aspire Biopharma, Inc caused (i) each share of Aspire Biopharma,

Inc Preferred Stock that is issued and outstanding immediately prior to the effective time of the reverse acquisition to be automatically

converted into a number of shares of Aspire common stock at the then-effective conversion rate (the “Preferred Conversion”).

All of the shares of Aspire preferred stock converted into shares of Aspire common stock were no longer outstanding and ceased to exist,

and each holder of Aspire Biopharma, Inc Preferred Stock thereafter ceased to have any rights with respect to such Aspire Biopharma,

Inc preferred stock.

Aspire Biopharma, Inc caused each Aspire Biopharma, Inc Warrant to be terminated in exchange for shares of Aspire

common stock in accordance with the respective warrant agreements associated with each such warrant.

February 17, 2025 (the “Closing Date), the Reverse Acquisition was consummated.

In connection with the consummation of the Reverse

Acquisition, PowerUp Acquisition Corp.

February 17, 2025 (the “Closing Date”), the Reverse Recapitalization was consummated.

In connection with the consummation

of the Reverse Recapitalization, PowerUp Acquisition Corp.

changed its name to Aspire Biopharma Holdings, Inc.

February 17, 2025, the Company entered into a Securities Purchase Agreement (“Securities Purchase Agreement”) with Cobra

Alternative Capital Strategies, LLC (“Cobra”), a sole member entity controlled by Aspire’s former Director of Investor

Relations, Lance Friedman, which services were provided through a consulting agreement with Blackstone Capital Advisors, Inc.

Friedman controls) that was terminated effective February 17, 2025, and Target Capital X LLC (collectively, the “Investors”).

Under the Securities Purchase Agreement, the Company issued two 20% original issue discount senior secured convertible debentures (“Debentures”)

in an aggregate principal amount of $ 3,750,000 , and may issue additional Debentures upon the mutual agreement of the Company and the

holders of Debentures representing at least a majority of the aggregate principal and interest owed under the outstanding Debentures

(“Requisite Holders”), under the Securities Purchase Agreement (the “Offering”).

The conversion price per share

of each Debenture is equal to 92.5 % of the lowest daily VWAP (as defined in the Debentures) of the Company’s shares of common stock

during the five trading day period ending on the trading day immediately prior to delivery or deemed delivery of the applicable Conversion

Notice (as defined in the Debentures), subject to adjustments related to the trading price of the Company’s common stock provided

that no conversion may be at a price per share less than the floor price of $ 4.00 per share ( See Note 7 - Convertible Notes ).

connection with the Reverse Acquisition, on the Closing Date, certain officers, directors, and stockholders of Aspire Biopharma, Inc

each entered into a non-competition agreement and lock-up agreements with the Company.

Reverse Acquisition was accounted for as a reverse recapitalization in accordance with GAAP.

connection with the Reverse Recapitalization, on the Closing Date, certain officers, directors, and stockholders of Aspire Biopharma,

Inc each entered into a non-competition agreement and lock-up agreements with the Company.

Reverse Recapitalization was accounted for as a reverse recapitalization in accordance with GAAP.

Under this method of accounting, PowerUp,

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was treated as the accounting acquirer.

Aspire Biopharma, Inc has been determined to be the accounting acquirer based on evaluation of

the following facts and circumstances under the redemption scenarios:

Biopharma Inc’s existing stockholders will have more than 64.4 % of the voting interest

of New Aspire under both the no redemption and maximum redemption scenarios;

Biopharma Inc’s senior management will comprise the senior management of New Aspire;

directors nominated by Aspire will represent the majority of the board of directors of New

Biopharma Inc’s operations will comprise the ongoing operations of New Aspire;

Aspire will assume Aspire’s name.

for accounting purposes, the Reverse Acquisition was treated as the equivalent of a capital transaction in which Aspire is issuing stock

for the net assets of PowerUp.

The net assets of PowerUp will be stated at historical cost, with no goodwill or other intangible assets

Operations prior to the Reverse Acquisition will be those of Aspire Biopharma, Inc.

closing of the Reverse Acquisition, the Company received gross proceeds of $ 811,370 as a result of the Reverse Acquisition, offset by

total transaction costs of $ 545,543 .

The following table reconciles the elements of the Reverse Acquisition to the condensed consolidated

statements of cash flows and the condensed consolidated statement of changes in stockholders’ deficit for the nine months ended

September 30, 2025:

SCHEDULE OF RECONCILES THE ELEMENTS

OF THE BUSINESS COMBINATION

and cash, net of redemptions

Accordingly, for accounting purposes, the Reverse Recapitalization was treated as the equivalent

of a capital transaction in which Aspire is issuing stock for the net assets of PowerUp.

The net assets of PowerUp will be stated at

historical cost, with no goodwill or other intangible assets recorded.

Operations prior to the Reverse Recapitalization will be those

of Aspire Biopharma, Inc.

closing of the Reverse Recapitalization, the Company received gross proceeds of $ 811,370 as a result of the Reverse Recapitalization,

offset by total transaction costs of $ 545,543 .

The following table reconciles the elements of the Reverse Recapitalization to the consolidated

statement of cash flows and the consolidated statement of changes in stockholders’ deficit for the year ended December 31, 2025:

SCHEDULE OF RECONCILES THE ELEMENTS OF THE BUSINESS COMBINATION

Cash-trust and cash, net of redemptions

transaction costs, paid

proceeds from the Reverse Acquisition

Net proceeds from the Reverse Acquisition

accounts payable, accrued liabilities and other current liabilities combined

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Forward purchase agreement liability combined

recapitalization, net

other assets, net

Reverse recapitalization, net

$ ( 4,602,576 )

number of shares of Common Stock issued immediately following the consummation of the Reverse Acquisition were:

SCHEDULE OF CONSUMMATION OF THE

BUSINESS COMBINATION

Class A common stock, outstanding prior to the Reverse Acquisition

number of shares of common stock issued immediately following the consummation of the Reverse Recapitalization were:

SCHEDULE OF CONSUMMATION OF THE BUSINESS COMBINATION

PowerUp Class A common stock, outstanding prior to the Reverse Acquisition

Redemption of PowerUp Class A common stock

A common stock of PowerUp

Class B common stock, outstanding prior to the Reverse Acquisition

Acquisition Class A common stock

of shares related working capital agreements

Biopharma, Inc Shares

Stock immediately after the Reverse Acquisition

number of Aspire Biopharma, Inc shares was determined as follows:

Class A common stock of PowerUp

PowerUp Class B common stock, outstanding prior to the Reverse Acquisition

Reverse Acquisition Class A common stock, before giving effect to the Reverse Splits as described in Note 2

Reverse Acquisition Class A common stock, after giving effect to the Reverse Splits as described in Note 2

Issuance of shares related working capital agreements

Aspire Biopharma, Inc Shares

Common Stock immediately after the Reverse Acquisition, after giving effect to the Reverse Splits as described in Note 2

number of Aspire Biopharma, Inc.

shares was determined as follows after giving effect to the Reverse Split described in Note 2:

SCHEDULE OF NUMBER OF SHARES CONVERSION RATIO

Biopharma, Inc Shares

Shares after conversion ratio

Stock issued to existing Aspire Biopharma, Inc Shareholders

$ 531,822,059

Stock obligation shares issued

$ 531,822,059

Aspire Biopharma, Inc Shares

Aspire’s Shares after conversion ratio

Common Stock issued to existing Aspire Biopharma, Inc Shareholders

Common Stock obligation shares issued

Number of Shares

and private placement warrants

14,374,969 Public Warrants issued at the time of the PowerUp’s initial public offering, and 9,763,333 warrants issued in connection

with private placement at the time of the PowerUp’s initial public offering (the “Private Placement Warrants”) remained

outstanding and became warrants for the Company ( See Note 11 - Fair Value Measurements ).

11,999 Public Warrants issued at the time of the PowerUp’s initial public offering, and 8,199 warrants, after giving effect

to the Reverse Splits as described in Note 2, issued in connection with private placement at the time of the PowerUp’s initial

public offering (the “Private Placement Warrants”) remained outstanding and became warrants for the Company (See Note 10

- Fair Value Measurements).

RELATED PARTY TRANSACTIONS

and transfer agreements

order to finance transaction costs in connection with a Reverse Acquisition, the New Sponsor or an affiliate of the New Sponsor, or certain

affiliates of PowerUp loaned monies for working capital purposes (“Working Capital Loans”).

Upon completion of the Reverse

Acquisition, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company.

the Working Capital Loans would be repaid only out of funds held outside the Trust Account.

In the event that a Reverse Acquisition did

not close, the Company had the option to use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans

but no proceeds held in the Trust Account could be used to repay the Working Capital Loans.

The Working Capital Loans would either be

repaid upon consummation of a Reverse Acquisition, without interest, or, at the lender’s discretion, up to $ 1.5 million of such

Working Capital Loans may be convertible into warrants of the post Reverse Acquisition entity at a price of $ 1.50 per warrant.

would be identical to the Private Placement Warrants.

December 21, 2023, PowerUp entered into a Loan and Transfer Agreement with the New Sponsor and SSVK Associates, LLC (“SSVK”),

pursuant to which SSVK loaned an aggregate of $ 250,000 to the New Sponsor, and, in turn, the New Sponsor loaned $ 250,000 to PowerUp.

On February 17, 2025, the Company assumed $ 250,000 of liabilities related to this agreement.

As of September 30, 2025 and December 31,

2024, there was $ 250,000 and $ 250,000 in borrowings under the agreement, respectively.

The debt discount was fully amortized to interest

expense as a non-cash charge over the term of the loan and transfer liability ending at the date consummation of the Reverse Acquisition.

January 9, 2024, PowerUp entered into a Loan and Transfer Agreement with the New Sponsor and Apogee Pharma (“Apogee”), pursuant

to which Apogee loaned an aggregate of $ 50,000 to the New Sponsor, and, in turn, the New Sponsor loaned the $ 50,000 to the Company.

February 17, 2025, the Company assumed $ 50,000 of liabilities related to is agreement.

At the close of the Reverse Acquisition, Apogee

was issued 50,000 shares of Common Stock as commitment fees pursuant to this agreement.

As of September 30, 2025 and December 31, 2024,

there was $ 50,000 and $ 50,000 in borrowings under the agreement, respectively.

The debt discount was fully amortized to interest expense

as a non-cash charge over the term of the loan and transfer liability ending at the date consummation of the Reverse Acquisition.

January 10, 2024, PowerUp entered into a Loan and Transfer Agreement with the New Sponsor and Jinal Sheth (“Sheth”), pursuant

to which Sheth loaned an aggregate of $ 149,214 to the New Sponsor and the New Sponsor loaned $ 149,214 to PowerUp.

On February 17, 2025,

the Company assumed $ 149,214 of liabilities related to this agreement.

As of September 30, 2025 and December 31, 2024, there was $ 149,214

and $ 149,214 in borrowings under the agreement, respectively.

The debt discount was fully amortized to interest expense as a non-cash

charge over the term of the loan and transfer liability ending at the date consummation of the Reverse Acquisition.

December 3, 2024, the Company entered into a second Loan and Transfer Agreement with the New Sponsor and Apogee Pharma (“Apogee

2”), pursuant to which Apogee 2 loaned an aggregate of $ 50,000 to the New Sponsor and the New Sponsor loaned $ 50,000 to the Company.

On February 17, 2025, the Company assumed $ 50,000 of liabilities related to these working capital loans.

As of September 30, 2025 and

December 31, 2024, there was $ 50,000 and $ 50,000 in borrowings under the agreement, respectively.

The debt discount was fully amortized

to interest expense as a non-cash charge over the term of the loan and transfer liability ending at the date consummation of the Reverse

order to finance transaction costs in connection with the Reverse Recapitalization, the New Sponsor or an affiliate of the New Sponsor,

or certain affiliates of PowerUp loaned monies for working capital purposes (“Working Capital Loans”) by entering into several

Loan and Transfer Agreements.

February 17, 2025, the Company assumed $ 250,000 of liabilities related to the December 21, 2023 Loan and Transfer Agreement with the

New Sponsor and SSVK Associates, LLC (“SSVK”).

As of March 31, 2026 and December 31, 2025, there was $ 250,000 in borrowings

outstanding under the agreement and included in loan and transfer notes payable-related on the accompanying unaudited condensed consolidated balance sheets.

February 17, 2025, the Company assumed $ 50,000 of liabilities related to the January 9, 2024 Loan and Transfer Agreement with the New

Sponsor and Apogee Pharma (“Apogee”).

As of March 31, 2026 and December 31, 2025, there was $ 50,000 in borrowings outstanding

under the agreement and included in loan and transfer notes payable-related party on the accompanying unaudited condensed

consolidated balance sheets.

February 17, 2025, the Company assumed $ 149,214 of liabilities related to the January 10, 2024 Loan and Transfer Agreement with the New

Sponsor and Jinal Sheth (“Sheth”).

As of March 31, 2026 and December 31, 2025, there was $ 149,214 in borrowings outstanding

under the agreement and included in loan and transfer notes payable-related party on the accompanying unaudited condensed

consolidated balance sheets.

February 17, 2025, the Company assumed $ 50,000 of liabilities related to the December 3, 2024 Loan and Transfer Agreement with the New

Sponsor and Apogee Pharma (“Apogee 2”).

As of March 31, 2026 and December 31, 2025, there was $ 50,000 in borrowings outstanding

under the agreement and included in loan and transfer notes payable-related party on the accompanying unaudited condensed

consolidated balance sheets.

stated in note 13, pursuant to the exchange agreements in April 2026, the Loan and Transfer Agreements balances along with applicable

interest and fees were repaid.

March 5, 2024, PowerUp entered into four separate Subscription Agreements (each, a “First Subscription Agreement”) with the

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$ 500,000 (the “Second Contribution”) and, in turn, the New Sponsor loaned $ 500,000 to PowerUp (the “May Loan”).

accounted for the First and Second Subscription Agreements under ASC 480 “Distinguishing Liabilities from Equity” and ASC

815 “Derivatives and Hedging” and concluded that bifurcation of a single derivative that comprises all of the fair value

of the conversion feature(s) (i.e., derivative instrument(s)) is not necessary under ASC 815-15-25-7 through 25-10.

As a result, all

debt proceeds received from Investor have been recorded using the relative fair value method of accounting under ASC 470 “Debt”.

Pursuant to ASC 470, the Company recorded the fair value of the subscription liability on the consolidated balance sheets using the relative

fair value method.

The initial fair value of the subscription liability at issuance was estimated using a Black Scholes and Probability

Weighted Expected Return Model.

At the close of the Reverse Acquisition, 1,750,000 of commitment fee shares owing to the Investors under

these agreements were transferred by affiliates to the Investors.

February 17, 2025, the Company assumed $ 1,500,000 of debt under the First Subscription Second Subscription Agreements.

At September 30,

2025, $ 1,500,000 owing under these agreements is included in subscription agreement loan balance on the condensed consolidated balance

February 17, 2025, the Company assumed $ 353,679 of liabilities due to the Sponsor of PowerUp and related to administrative services fees

and a residual balance due from IPO proceeds.

As of September 30, 2025, the balance of $ 353,679 is recorded within due to affiliate on

the condensed consolidated balance sheet.

Note Fee – related party

October 2, 2024, PowerUp entered into a Promissory Note Fee Agreement with the Sponsor (the “Promissory Note Fee Agreement”).

Pursuant to the Promissory Note Fee Agreement, PowerUp and the Sponsor agreed that the Sponsor took a significant risk on behalf of the

Company by entering into the Visiox Promissory Note in exchange for payment of the Original Promissory Note Fee, and that the Sponsor

should be compensated for that risk despite the termination of the right to receive the Original Promissory Note Fee as a result of the

termination of the proposed merger with Visiox.

As consideration for the foregoing, the Company agreed to pay Sponsor a modified promissory

note fee of $ 1,000,000 (the “Modified Promissory Note Fee”) upon the successful closing of a merger.

At September 30, 2025,

the Modified Promissory Note Fee is still outstanding and payable and included in promissory note fee – related party on the condensed

accounted for the First and Second Subscription Agreements under ASC 480, Distinguishing Liabilities from Equity (“ASC 480”)

and ASC 815, Derivatives and Hedging (“ASC 815”) and concluded that bifurcation of a single derivative that comprises all

of the fair value of the conversion feature(s) (i.e., derivative instrument(s)) is not necessary under ASC 815-15-25-7 through 25-10.

As a result, all debt proceeds received from Investor have been recorded using the relative fair value method of accounting under ASC

470, Debt (“ASC 470”).

Pursuant to ASC 470, the Company recorded the fair value of the subscription liability on the unaudited

condensed consolidated balance sheets using the relative fair value method.

The initial fair value of the subscription liability at issuance

was estimated using a Black Scholes and Probability Weighted Expected Return Model.

At the close of the Reverse Recapitalization, 1,458

of commitment fee shares, after giving effect to the Reverse Splits as described in Note 2, owing to the Investors under these agreements

were transferred by affiliates to the Investors.

February 17, 2025, the Company assumed $ 1,500,000 of debt under the First Subscription and Second Subscription Agreements.

For the three

months ended March 31, 2026, the Company incurred $ 250,000 in interest expense on the Subscription Agreements which is included in accrued

expenses on the accompanying unaudited condensed consolidated balance sheet.

The Subscription Agreement Loans along with applicable interest

and fees were converted into common stock of the company in January 2026 (See Note 4).

At March 31, 2026 and December 31, 2025, $ 0

and $ 1,500,000 , respectively, owing under these agreements is included in subscription agreement loan balance on the unaudited condensed

consolidated balance sheets.

February 17, 2025, the Company assumed $ 353,679 of liabilities due to the Sponsor of PowerUp related to administrative services fees

and a residual balance due from initial public offering (“IPO”) proceeds.

As of March 31, 2026 and December 31, 2025, the

balance of $ 353,679 is recorded within due to affiliate on the unaudited condensed consolidated balance sheets.

Note Fee – related party

October 2, 2024, after Aspire and PowerUP had signed their BCA in August 2024, PowerUp entered into a Promissory Note Fee Agreement

with the Sponsor Srirama Associates LLC (the “Promissory Note Fee Agreement”).

Pursuant to the Promissory Note Fee

Agreement, 10 months after the fact, PowerUp and the Sponsor “agreed” (with the note signed for both parties by Suren

Ajjarapu) that the Sponsor took a significant risk on behalf of the Company by entering into the Visiox Promissory Note in exchange

for payment of the Original Promissory Note Fee, and that the Sponsor should be compensated for that risk despite the termination of

the right to receive the Original Promissory Note Fee as a result of the termination of the proposed merger with previous target,

As consideration for the foregoing, PowerUp “agreed” (10 months later) to pay Sponsor a modified promissory note

fee of $ 1,000,000

(the “Modified Promissory Note Fee”) upon the successful closing of a merger with Aspire.

As of March 31, 2026 and

December 31, 2025, the Modified Promissory Note Fee remains outstanding on the Company’s books and was included in promissory

note fee – related party on the unaudited condensed consolidated balance sheets.

Currently, Aspire and Srirama are litigating

the enforceability of the Promissory Note Fee Agreement.

payable – related party

the years ended 2024 and 2023, Aspire Biopharma, Inc incurred expenses and costs related to officer and director compensation, rental

of office space, reimbursable expenses paid by affiliates and non interest bearing working capital loans.

On September 27, 2024, to formalize

the related party working capital advances, Aspire Biopharma, Inc issued three nonconvertible 20 % original issues discount (“OID”)

the years 2024 and 2023, Aspire Biopharma, Inc incurred expenses and costs related to officer and director compensation, rental of office

space, reimbursable expenses paid by affiliates and non-interest bearing working capital loans.

On September 27, 2024, to formalize the

related party working capital advances, Aspire Biopharma, Inc issued three nonconvertible 20 % original issues discount (“OID”)

notes payable to related parties for a total face value of $ 1,066,391 .

2 unchanged sentences

(a “Qualified Offering”).

The notes do not bear interest but have a 5 % exit fee payable on maturity or repayment and had

original issuance discounts totaling $ 213,278 and are unsecured.

Pursuant to the February 18, 2025, subordination agreement between two

note holders and Cobra, payments will not be made on the matured notes until full payment of the Cobra obligation ( See Note 7 - Convertible

Pursuant to the Settlement Agreement ( See Note 6 - Subscription Agreement Loans ), the third note was amended to extend

the maturity date to December 10, 2025 .

For the three and nine months ended September 30, 2025, total amortized debt discount of $ 0 and

$ 139,052 was included in interest expense on the accompanying condensed consolidated statements of operations, respectively.

October 2, 2024, the Company issued one non-convertible 20 % OID note payable to a related party for working capital for a total face

value of $ 62,500 .

The note is due on the earlier of July 2, 2025 (9 months from issuance);

or (ii) the date that the Company receives

gross proceeds of at least $ 2,500,000 in an offering of its debt or equity securities (a “Qualified Offering”).

does not bear interest but has a 5 % exit fee payable on maturity or repayment and had an OID totaling $ 12,500 and was unsecured.

to the Settlement Agreement ( See Note 6 - Subscription Agreement Loans ), the note was amended to extend the maturity date to September

In August 2025, the note balance was fully repaid.

For the three and nine months ended September 30, 2025, total amortized

debt discount of $ 0 and $ 8,379 was included in interest expense on the accompanying condensed consolidated statements of operations,

respectively.

The notes do not bear interest but have a 5 % exit fee payable on maturity or repayment.

had original issuance discounts totaling $ 213,278 and are unsecured.

Pursuant to the February 18, 2025 subordination agreement between

two note holders and Cobra, payments will not be made on the matured notes until full payment of the Cobra obligation (See Note 5 - Convertible

The balance of $ 591,692 on the notes was repaid during the three months ended March 31, 2026.

For the three months ended March

31, 2026 and 2025, total amortized debt discount of $ 0 and $ 74,226 , respectively, was included in interest expense on the accompanying

unaudited condensed consolidated statements of operations.

December 31, 2024, the Company issued one non-convertible 20 % OID note payable for working capital to a related party for a total face

5 unchanged sentences

was unsecured.

For the three and nine months ended September 30, 2025, total amortized debt discount of $ 2,708 and $ 8,095 was included

in interest expense on the accompanying condensed consolidated statements of operations, respectively.

December 31, 2024, the Company issued one non-convertible 20 % OID note payable for working capital to a related party for a total face

value of $ 279,878 .

The note is due the earlier of September 30, 2025 (9 months from issuance);

or (ii) the date that the Company receives

gross proceeds of at least $ 2,500,000 in an offering of its debt or equity securities (a “Qualified Offering”).

does not bear interest but has a 5 % exit fee payable on maturity or repayment and had original issuance discounts totaling $ 46,646 and

were unsecured.

For the three and nine months ended September 30, 2025, total amortized debt discount of $ 19,476 and $ 46,646 was included

in interest expense on the accompanying condensed consolidated statements of operations, respectively.

January 22, 2025, the Company issued one non-convertible 20 % OID note payable for working capital to a related party for a total face

value of $ 31,250 .

The note is due the earlier of October 22, 2025 (9 months from issuance);

or (ii) the date that the Company receives

gross proceeds of at least $ 2,500,000 in an offering of its debt or equity securities (a “Qualified Offering”).

does not bear interest but has a 5 % exit fee payable on maturity or repayment and had original issuance discounts totaling $ 6,250 and

were unsecured.

In August 2025, the note balance was fully repaid.

For the three and nine months ended September 30, 2025, total amortized

debt discount of $ 2,609 and $ 6,250 was included in interest expense on the accompanying condensed consolidated statements of operations,

respectively.

February 13, 2025, the Company issued one non-convertible 20 % OID note payable for working capital to a related party for a total face

value of $ 31,250 .

The note is due the earlier of November 13, 2025 (9 months from issuance);

or (ii) the date that the Company receives

gross proceeds of at least $ 2,500,000 in an offering of its debt or equity securities (a “Qualified Offering”).

does not bear interest but has a 5 % exit fee payable on maturity or repayment and had original issuance discounts totaling $ 6,250 and

were unsecured.

In August 2025, the note balance was fully repaid.

For the three and nine months ended September 30, 2025, total amortized

debt discount of $ 3,113 and $ 6,250 was included in interest expense on the accompanying condensed consolidated statements of operations,

respectively.

following table reflects the outstanding balances of each note issuance at September 30, 2025 and December 31, 2024.

The balance of $ 293,872 on the notes was repaid during the three months ended March 31, 2026.

For the three months ended

March 31, 2026 and 2025, total amortized debt discount of $ 0 and $ 11,620 , respectively, was included in interest expense on the accompanying

unaudited condensed consolidated statements of operations.

following table reflects the outstanding balances of the notes at March 31, 2026 and December 31, 2025.

SCHEDULE OF NOTE ISSUANCE

September 30, 2025 and December 31, 2024, total balance of $ 885,564 and $ 1,266,832 inclusive of unamortized debt discount is included

in Notes payable – related party on the accompanying condensed consolidated balance sheet.

SUBSCRIPTION AGREEMENT LOANS

Subscription Agreement

December 18, 2024, and effective December 13, 2024, the PowerUp entered into (i) a subscription agreement (the “Blackstone Subscription

Agreement”), (ii) a promissory note (the “Blackstone Note”), and (iii) a registration rights agreement (the “RRA”)

with Blackstone Capital Advisors, Inc.

(“Blackstone”), an entity controlled by Aspire’s former Director of Investor

Relations, Lance Friedman (all transactions contemplated by such agreements, collectively, the “Blackstone Transaction”).

Pursuant to the terms of the Blackstone Transaction, Blackstone may loan up to an aggregate principal amount of $ 500,000 to the Company,

with an original issue discount of twenty percent ( 20 %).

Blackstone loaned the maximum of $ 500,000 to the PowerUp.The maturity date of

the Blackstone Note is the earlier of (i) June 1, 2025 or (ii) the date that the Company receives gross proceeds of at least $ 5,000,000

in an offering of its debt or equity securities.

The principal amount of the Blackstone Note bears interest at a rate per annum of ten

percent ( 10 %).

Interest will be due and payable on the maturity date.

Additionally, the Company will pay Blackstone an exit fee equal

to ten percent ( 10 %) of the principal amount and accrued interest on the maturity date.

Upon the closing of the Reverse Acquisition,

the Sponsor will transfer three Class A ordinary shares of PowerUp to Blackstone for each dollar loaned under the Blackstone Transaction

(the “Commitment Shares”).

On February 17, 2025, the Blackstone Subscription Agreement was amended (the “Amended Blackstone

Subscription Agreement”) to fix the commitment shares to 1,795,000 .

The commitment shares were issued at the close of the Reverse

to Pursuant to the RRA, the Company has agreed to register the Commitment Shares with the SEC in any registration statement

filed by the Company in connection with a Qualified Offering (as defined in the Blackstone Subscription Agreement), if any.

17, 2025, a fair value of $ 437,474 inclusive of principal balance loaned of $ 423,474 was assumed under this agreement.

On April 24, 2025,

the Company entered into a settlement agreement (the “Settlement Agreement”) with Cobra , Blackstone and their affiliates

(collectively, the “Lenders”) to resolve all matters related to previously issued notices of default and to amend certain

outstanding loan agreements.

In connection with the Settlement Agreement, the Company issued 625,000 shares of common stock to Blackstone

Capital Advisors, Inc.

or its designees.

Pursuant to the Settlement Agreement between the Company and the Lenders, the Blackstone Subscription

Agreement was amended (the “April 2025 Amended Blackstone Subscription Agreement) to extend the maturity date to August 15, 2025.

In addition, the Company paid $ 60,000 as an addition to the principal in lender deal cost in consideration for Blackstone’s waiver

of its right to additional interest or penalties due to the default.

The amendment of the debt was accounted under ASC 470 – Accounting

for Debt modification and exchanges.

For the three and nine months ended September 30, 2025, $ 364,109 was recorded as loss of extinguishment

of debt in the accompanying condensed consolidated statements of operations.

In August 2025, the Blackstone Note was fully repaid including

all exit fees and accrued interests.

Issuance date

March 31, 2026

December 31, 2025

September 27, 2024

December 31, 2024

March 31, 2026 and December 31, 2025, total balance of $ 0 and $ 885,564 inclusive of unamortized debt discount of $0 is included in Notes

payable – related party on the accompanying unaudited condensed consolidated balance sheets.

CONVERTIBLE NOTES

6 unchanged sentences

Under the Securities Purchase Agreement, the Company

issued 20 % original issue discount senior secured convertible debentures (“Convertible Debentures”) in an aggregate principal

amount of $ 3,750,000 which includes a 20 % OID.

The conversion price per share of each Debenture is equal to 92.5 % of the lowest daily

VWAP (as defined in the Debentures), provided that no conversion may be at a price per share less than the floor price of $ 4.00 per share.

At the close of the Reverse Acquisition, 2,106,527 of commitment fee shares owing to the Investors under these agreements were transferred

by affiliates to the Investors.

Company analyzed for the Securities Purchase Agreement under ASC 480 “Distinguishing Liabilities from Equity” and ASC 815

“Derivatives and Hedgings” and concluded that bifurcation of a single derivative that comprises all of the fair value of

the conversion feature(s) (i.e., derivative instrument(s)) is not necessary.

As a result, all debt proceeds received have been recorded

using the fair value method of accounting under ASC 825, “Fair Value Measurement”.

Pursuant to ASC 825, the Company recorded

the fair value of the subscription liability on the condensed consolidated balance sheets using the fair value method.

The initial fair

value of the subscription liability at issuance was estimated using a Monte Carlo Model.

In August and September 2025, the Company repaid

a total of $ 3,032,645 of the Convertible Debentures.

At September 30, 2025, the fair value of $ 995,891 of the Securities Purchase Agreement

is included in Convertible Notes on the accompanying condensed consolidated balance sheets.

For the three and nine months ended September

30, 2025, $ 363,567 and $ 637,606 debt discount amortized was included in interest expense on the condensed consolidated statements of

operations, respectively.

For the three and nine months ended September 30, 2025, change in fair value of $ 146,490 and $ 196,980 was included

as an income and expense, respectively in change in fair value of derivatives on the condensed consolidated statements of operations.

issued 20 % original issue discount senior secured convertible debentures (“February 2025 Convertible Debentures”) in an aggregate

principal amount of $ 3,750,000 which includes a 20 % OID.

The conversion price per share of each Debenture is equal to 92.5 % of the lowest

daily VWAP (as defined in the Debentures), provided that no conversion may be at a price per share less than the floor price of $ 4.00

At the close of the Reverse Recapitalization, 1,755 of commitment fee shares, after giving effects to the Reverse Splits as

described in Note 2, owing to the Investors under these agreements were transferred by affiliates to the Investors.

Company analyzed for the Securities Purchase Agreement under ASC 480 and ASC 815 and concluded that bifurcation of a single derivative

that comprises all of the fair value of the conversion feature(s) (i.e., derivative instrument(s)) is not necessary.

As a result, all

debt proceeds received have been recorded using the fair value method of accounting under ASC 825, Fair Value Measurement (“ASC

Pursuant to ASC 825, the Company recorded the fair value of the subscription liability on the unaudited condensed consolidated

balance sheet using the fair value method.

The initial fair value of the subscription liability at issuance was estimated using a Monte

In August and September 2025, the Company repaid a total of $ 3,032,645 of the February 2025 Convertible Debentures.

the three months ended March 31, 2026 and 2025, change in fair value of $ 211,443 and $ 88,816 , respectively, was included as an income

in change in fair value of derivative liabilities and convertible notes on the unaudited condensed consolidated statements of operations.

In January 2026, the remaining balance of $ 943,801 was repaid.

At March 31, 2026 and December 31, 2025, the fair value of $ 0 and $ 1,146,236 ,

respectively, of the Securities Purchase Agreement is included in Convertible Notes on the accompanying unaudited condensed consolidated

balance sheets.

August 19, 2025, the Company entered into a Securities Purchase Agreement (the “August Securities Purchase Agreement”) with

7 unchanged sentences

on September 30, 2025.

The August 2025 Notes are convertible into up to an aggregate of 147,177,424 shares of common Stock (the “

Conversion Shares”) subject to certain conditions.

The August 2025 Notes are convertible into up to an aggregate of 122,648 shares of common stock after giving effects

to the Reverse Splits as described in Note 2 (the “Conversion Shares”) subject to certain conditions.

August 2025 Notes are convertible (in whole or in part) at any time on or after the thirty-first (31st) day following the Issuance Date

14 unchanged sentences

61-days’ prior notice to us.

connection with the August Securities Purchase Agreement, the Company entered into a registration rights agreement, dated as of August

19, 2025 (the “Registration Rights Agreement”), pursuant to which the Company agreed to file the initial resale registration

statement by no later than September 18, 2025, to register the resale of the Common Stock underlying the Notes.

The resale registration

statement became effective on September 30, 2025.

Company accounted for the August 2025 Notes under ASC 470 “Debt” and ASC 815 “Derivatives and Hedging” and concluded

that bifurcation of multiple embedded features was necessary under ASC 815-15-25-1.

As a result, the Company separately accounted for

as a single compound derivative.

The Company recorded the initial fair value of the derivative liability of $ 4,101,583 million and the

debt issuance cost of $ 907,500 as a debt discount, which will be amortized to interest expense over the expected term of the debt.

the three and nine months ended September 30, 2025, total amortized debt discount of $ 1,003,157 and $ 1,003,157 was included in interest

expense on the accompanying condensed consolidated statements of operations, respectively.

At September 30, 2025, the balance of $ 3,744,075

of the August 2025 Notes is included in Convertible Notes on the condensed consolidated balance and comprises the principal balance of

$ 9,687,500 , net of unamortized debt discount of $ 5,943,425 .

sales include products and shipping and handling charges, net returns.

Revenue is measured as the amount of consideration the Company

expects to receive in exchange for transferring products.

All revenue is recognized when or as the Company satisfies its performance

obligations under the contract.

The Company recognizes revenue by transferring control of the promised products to the customer, which

primarily occurs when products are shipped to the customer.

The Company recognizes revenue for shipping and handling charges at the time

the products are shipped to the customer.

The Company estimates product returns based on historical return rates.

All of the Company’s

contracts have a single performance obligation and are short-term in nature.

Sales taxes and value added taxes in foreign jurisdictions

that are collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded

from net sales.

The Company recognizes revenue from the sale of pharmaceutical products directly to customers and is recognized at an

amount that reflects the consideration expected to be received in exchange for such products.

In connection with the August Securities Purchase Agreement, the Company entered into a registration

rights agreement, dated as of August 19, 2025 (the “Registration Rights Agreement”), pursuant to which the Company agreed

to file the initial resale registration statement by no later than September 18, 2025, to register the resale of the common stock underlying

The resale registration statement became effective on September 30, 2025.

Company accounted for the August 2025 Notes under ASC 470 and ASC 815 and concluded that bifurcation of multiple embedded features was

necessary under ASC 815-15-25-1.

As a result, the Company separately accounted for the embedded features as a single compound derivative.

The Company recorded the initial fair value of the derivative liability of $ 4,101,583 and the debt issuance cost of $ 907,499 as a debt

discount, which will be amortized to interest expense over the expected term of the debt.

the year ended December 31, 2025, a total value of $ 9,523,683 of Convertible Notes were converted into 73,998 shares of common stock

of the Company after giving effects to the Reverse Splits as described in Note 2.

The remaining debt of $ 163,817 was converted into 1,625

shares of common stock in January 2026 after giving effects to the Reverse Splits as described in Note 2.

At March 31, 2026 and December

31, 2025, the balance of the August 2025 Notes, net of unamortized debt discount of $ 0 and $ 144,240 , respectively, is included in convertible

notes on the unaudited condensed consolidated balance sheets.

2026 Securities Purchase Agreement

January 26, 2026, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with certain

investors (the “Purchasers”), pursuant to which the Company sold to the Purchasers certain debentures in an aggregate principal

amount of $ 2,173,913 for a subscription price of $ 2,000,000 (the “Debentures”) with a maturity date of April 23, 2026 .

Notes have an 8 % original issue discount and did bear any annual interest.

The Debentures are due the sooner of (i) 90 days, or (ii)

upon the Company’s receipt of gross proceeds of at least $ 8,000,000 in any equity or debt financing.

The Company had the option

to prepay this Debenture(s) at any time after the Original Issue Date at an amount equal to the Principal Amount.

The Company shall provide

Holder(s) with ten (10) Business Days’ prior written notice of intention to satisfy the Debentures, whether at maturity, by prepayment,

or in default.

The Debentures are not convertible.

In connection with the financing, the Purchasers received an aggregate of 26,333 shares

of the Company’s common stock as incentive shares, after giving effects to the Reverse Splits as described in Note 2.

The Debentures

were repaid in February 2026.

For the three months ended March 31, 2026, total amortized debt discounts of $ 173,913 was included in interest

expense on the accompanying unaudited condensed consolidated statements of operations.

sales include revenue from product sales and shipping and handling charges, net of returns and discounts.

Revenue is measured as the

amount of consideration the Company expects to receive in exchange for transferring products.

All revenue is recognized when or as the

Company satisfies its performance obligations under the contract.

The Company recognizes revenue by transferring control of the promised

products to the customer, which primarily occurs when products are shipped to the customer.

The Company recognizes revenue for shipping

and handling charges at the time the products are shipped to the customer.

The Company estimates product returns based on historical

return rates.

All of the Company’s contracts have a single performance obligation and are short-term in nature.

Sales taxes and

value added taxes in foreign jurisdictions that are collected from customers and remitted to governmental authorities are accounted for

on a net basis and therefore are excluded from net sales.

The Company recognizes revenue from the sale of pharmaceutical products directly

to customers and is recognized at an amount that reflects the consideration expected to be received in exchange for such products.

customer order evidenced by invoices issued is considered to be the contract with the customers.

7 unchanged sentences

that have not yet shipped is recorded as deferred revenue.

As September 30, 2025, there was no deferred revenue.

As of March 31, 2026 and December 31, 2025, there was no deferred revenue.

following tables represent net sales disaggregated by revenue source:

OF DISAGGREGATION OF REVENUE

Three Months ended

September 30, 2025

Nine months ended

September 30, 2025

Nutraceutical

For the Three Months Ended

March 31, 2026

Nutraceutical products

Total revenues

following tables represent net sales disaggregated by geography, based on the customers’ billing addresses.

OF DISAGGREGATION OF NET SALES DISAGGREGATED BY GEOGRAPHY

Three Months ended

September 30, 2025

Nine months ended

September 30, 2025

For the Three Months Ended

March 31, 2026

United States

Total revenues

COMMITMENTS AND CONTINGENCIES

holders Private Placement Warrants and warrants that may be issued upon conversion of working capital loans, if any, are entitled to

registration rights pursuant to a registration rights agreement dated February 17, 2022.

holders of Private Placement Warrants and warrants that may be issued upon conversion of working capital loans, if any, are entitled

to registration rights pursuant to a registration rights agreement dated February 17, 2022.

These holders are entitled to certain demand

3 unchanged sentences

On May 13, 2025, the Company filed a Registration Statement on Form S-1 to register 2,441 of the outstanding

9,763,333 Private Placement Warrants.

The Registration Statement was declared effective on May 30, 2025.

8,199 Private Placement Warrants, after giving effects to the Reverse Splits as described in Note 2.

The Registration Statement was declared

effective on May 30, 2025.

Line of Credit (“ELOC”) Agreement

February 13, 2025, PowerUp entered into a Purchase Agreement (“ELOC Agreement”) with Arena Business Solutions Global SPC

Under the ELOC Agreement, the Company has the right, but not the obligation, to direct Arena to purchase

up to $ 100,000,000 in shares of the Company’s common stock (the “ELOC Shares”) upon satisfaction of certain terms and

conditions contained in the ELOC Agreement, including, without limitation, an effective registration statement filed with the SEC registering

the resale of ELOC Commitment Shares (as defined below) and additional shares to be sold to Arena from time to time under the ELOC Agreement.

The term of the ELOC Agreement began on the date of execution and ends on the earlier of (i) the first day of the month following the

36-month anniversary of the execution date, (ii) the date on which the Investor shall have purchased the maximum amount of ELOC Shares,

or (iii) the effective date of any written notice of termination delivered pursuant to the terms of the ELOC Agreement (the “Commitment

In consideration for the Arena’s execution and delivery of the ELOC Agreement, the Company issued to Arena 2,000,000

Common Shares (the “Commitment Fee Shares”), of which 893,473 became freely tradable upon the closing of the Reverse Acquisition.

close of the Reverse Acquisition, the Company assumed $ 49,034 of forward purchase agreement liability under the ELOC Agreement.

three and nine months ended September 30, 2025, change in fair value of the purchase agreement was a gain of $ 39,384 and $ 39,133 , respectively

was included in change in fair value of derivatives and convertible notes on the accompanying condensed consolidated statements of operations,

respectively.

At September 30, 2025, the balance of $ 9,901 is included in forward purchase agreement liability on the accompanying condensed

balance sheet.

March 28, 2022, the Company closed on an asset purchase agreement (APA) of Instaprin Pharmaceuticals, Inc.’s

(“Instaprin”), intangible assets, inclusive of U.S.

November 11, 2025, the Company entered into a new Purchase Agreement (the “Second ELOC Agreement”) with Arena Business Solutions

Global SPC II, Ltd.

Under the Second ELOC Agreement, the Company has the right, but not the obligation, to direct

Arena to purchase up to $ 100,000,000 in shares of the Company’s common stock (the “ELOC Shares”) upon satisfaction

of certain terms and conditions contained in the Second ELOC Agreement, including, without limitation, an effective registration statement

filed with the SEC registering the resale of the ELOC Commitment Fee Shares and additional shares to be sold to Arena from time to time

under the Second ELOC Agreement.

term of the Second ELOC Agreement began on November 11, 2025 and ends on the earlier of (i) the first day of the month following the

36-month anniversary of the execution date, (ii) the date on which the Investor shall have purchased the maximum amount of Second ELOC

Shares, or (iii) the effective date of any written notice of termination delivered pursuant to the terms of the Second ELOC Agreement

(the “Commitment Period”).

In consideration for the Arena’s execution and delivery of the Second ELOC Agreement, the

Company is required to issue Common Shares to Arena equal to $250,000 divided by the lowest 1-Trading Day VWAP of the Common Shares of

the five (5) Trading Days immediately preceding the effectiveness of the initial registration statement (the “Commitment Fee Shares”),

plus $25,000 in Common shares for fees associated with the prior ELOC Agreement with the Company, based on a price equal to the lowest

1-Trading Day VWAP of the Common Shares of the five (5) Trading Days immediately preceding the date of execution and delivery of this

Company issued 2,510 shares of common stock after giving effects to the Reverse Splits as described in Note 2 to Arena in November and

December 2025 and an additional 202 true up shares in January 2026, after giving effects to the Reverse Splits as described in Note 2,

representing payment of the commitment fee shares.

For the three months ended March 31, 2026 and 2025, change in fair value of $ 590 and

$ 0 , respectively, was included as an expense in change in fair value of derivative liabilities and convertible notes on the unaudited

condensed consolidated statement of operations.

At March 31, 2026 and December 31, 2025, the fair value of the forward purchase agreement

liability related to the Second ELOC Agreement is $ 96,252 and $ 95,662 , respectively and included in forward purchase agreement liability

on the accompanying unaudited condensed consolidated balance sheets.

There were no issuances under the Second ELOC Agreement as of March

March 28, 2022, the Company closed on an asset purchase agreement (APA) of Instaprin Pharmaceuticals, Inc.’s (“Instaprin”)

intangible assets, inclusive of U.S.

62/794141, International Publication No.

2020/15460 A1

and WO 2020/150685 A1, and the Instaprin U.S.

2020/15460 A1 and WO 2020/150685 A1, and the

Instaprin U.S.

Trademark No.

86274378, trade secrets and proprietary information, all applications

for any of the foregoing, commercial and scientist relationships, and any license or agreements granting rights related to the

86274378, trade secrets and proprietary information, all applications for any of the foregoing, commercial

and scientist relationships, and any license or agreements granting rights related to the foregoing.

purchase price for the Acquired Assets (as defined in the APA) was $ 3,628,325 plus interest thereon, to be paid to the SEC on behalf

4 unchanged sentences

equity to be issued to Instaprin’s service providers, pursuant to a stock incentive plan to be adopted.

As of September 30, 2025,

the Company has not recorded the assets from the APA due to the contingent nature of the transaction.

SHAREHOLDERS’ DEFICIT

Stock —The Company is authorized to issue 10,000,000 shares of preferred stock with a par value of $ 0.0001 per share and with

such designations, voting and other rights and preferences as may be determined from time to time by the Board.

At September 30, 2025

and December 31, 2024, there were no shares of preferred stock issued or outstanding.

As of March 31, 2026, the

Company has not recorded the assets from the APA due to the contingent nature of the transaction and the Company has not yet adopted

a stock incentive plan.

SECURITIES PURCHASE AGREEMENT

A Preferred Stock Issuance

to the terms of the February 2026 Securities Purchase Agreement described below, on February 2, 2026, the Company filed the certificate

of designation (the “Certificate of designation”) with The Delaware Secretary of State designating, 25,000 shares of its

authorized and unissued preferred stock as Series A Convertible Preferred Stock.

At the close of the first tranche, the company recorded

$ 9,894,920 as Series A preferred stock, representing total issuance of $ 13,749,980 net of related costs of $ 3,855,060 .

On February 6,

2026, 13,750 shares of Series A Preferred Stock were issued at the close of the first tranche.

April 13, 2026, the Company filed the further amendment to the Certificate of designation with the Delaware Secretary of State designating,

30,000 shares of its authorized and unissued preferred stock as Series A Convertible Preferred Stock.

On April 15, 2026, 12,500 additional

shares were issued at the close of tranche 2 of the February 2026 Securities Purchase Agreement and the Company recorded $ 9,000,000 as

Series A preferred stock, representing total issuance of $ 10,000,000 net of related costs of $ 1,000,000 .

The Certificate of Designation

sets forth the rights, preferences and limitations of the shares of Preferred Stock.

Terms not otherwise defined in this item shall have

the meanings given in the Certificate of Designation.

following is a summary of the terms of the Preferred Stock:

Pursuant to the Certificate of Designation, each share of Preferred Stock, subject to the Stockholder Approval (as defined in the Certificate

of Designation), is convertible at the option of the holder into shares of common stock at a conversion price equal to 80% of the lowest

closing price of our Common Stock as of the closing of the Principal Market (as such term is defined in the Certificate of Designation)

for each of the five (5) Trading Days (as such term is defined in the Certificate of Designation) immediately prior to the date of conversion,

or other date of determination (but in no event less than the floor price), subject to certain adjustments as set forth in the Certificate

of Designation (the “Conversion Price”).

The floor price is equal to 20% of the Minimum Price (as such term is defined by

the rules and regulations of the Nasdaq Stock Market LLC, Rule 5635(d)(1)(A)) (or such lower amount as permitted, from time to time,

by the Principal Market (the “Floor Price”).

The number of shares of common stock issuable upon conversion of a share of

Preferred Stock shall be determined by dividing (x) the stated value of the Preferred Stock to be converted by (y) the Conversion Price.

shares of Preferred Stock will be convertible immediately upon issuance, at the option of the holder, at the Conversion Price, subject

to a conversion cap that limits the conversion of the Preferred Stock such that an Investor may not beneficially own more than 4.99%

(the “Maximum Percentage”) of the shares of common stock that would be issued and outstanding following such conversion.

An Investor may decrease or increase the Maximum Percentage by written notice to the Company from time to time to any other percentage

not in excess of 9.99%, provided that any increase in the Maximum Percentage will not be effective until the sixty-first (61st) day after

such notice is delivered to the Company, provided further that a holder shall not convert any Preferred Stock to the extent that, after

giving effect to such conversion, the aggregate number of shares of common stock issued or issuable upon conversion of the Preferred

Stock would exceed 19.99% of the issued and outstanding shares of the Company’s common stock unless and until the Company has obtained

the shareholder approval required by Nasdaq Listing Rule 5636(d).

The Series A shall rank (i) senior to all of the common stock;

(ii) senior to any class or series of capital stock of the Corporation

hereafter created specifically ranking by its terms junior to any Series A (“Junior Securities”);

(iii) on parity with any

class or series of capital stock of the Corporation created specifically ranking by its terms on parity with the Preferred Stock (“Parity

Securities”);

and (iv) junior to any class or series of capital stock of the Corporation hereafter created specifically ranking

by its terms senior to any Series A (“Senior Securities”), in each case, as to dividends or distributions of assets upon

liquidation, dissolution or winding up of the Corporation, whether voluntarily or involuntarily.

Subject to any superior liquidation

rights of the holders of any Senior Securities of the Corporation and the rights of the Corporation’s existing and future creditors,

upon any liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary (a “Liquidation”), each

Holder shall be entitled to be paid out of the assets of the Corporation legally available for distribution to stockholders, prior and

in preference to any distribution of any of the assets or surplus funds of the Corporation to the holders of the Common Stock and Junior

Securities and pari passu with any distribution to the holders of Parity Securities, an amount equal to the Stated Value for each share

of Series A held by such Holder and an amount equal to any accrued and unpaid dividends thereon, and thereafter the Holders shall be

entitled to receive out of the assets, whether capital or surplus, of the Corporation the same amount that a holder of Common Stock would

receive if the Series A were fully converted (disregarding for such purposes any conversion limitations hereunder) to common stock which

amounts shall be paid pari passu with all holders of common stock.

The Corporation shall mail written notice of any such Liquidation,

not less than sixty (60) days prior to the payment date stated therein, to each Holder.

for any Exempt Issuance, in the event the Corporation issues or sells any securities including options or convertible securities (or

amends any outstanding securities of the Company), at an effective price of, or with an exercise or conversion price of less than the

conversion price, then upon such issuance or sale, the conversion price shall be reduced to the lesser of (i) the Floor Price;

the sale price or the exercise or conversion price of the securities issued or sold.

In case any shares of common stock, convertible

securities or options are issued in connection with the issue or sale of other securities of the Company, together comprising one integrated

transaction, each share of common stock underlying any such convertible securities or options shall be deemed to be one additional share

of common stock for the purposes of determining the effective price of the non-Exempt Issuance.

Participation

to certain terms and conditions in the Certificate of Designation, until the six (6) month anniversary of the issuance of the Series

A to the Holder, upon any subsequent financing, the Holders of the outstanding Series A shall have the right to participate in an amount

equal to an aggregate of 30% of the Subsequent Financing on the same terms, conditions and price provided for in the Subsequent Financing.

2026 Securities Purchase Agreement

February 6, 2026, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with certain

accredited investors (the “Investors”), pursuant to which the Company agreed to issue and sell, in a private placement (the

“Offering”), up to 25,000 shares (the “Shares”) of the Company’s newly-designated Series A Convertible

Preferred Stock, par value $ 0.0001 per share (the “Preferred Stock”), which Preferred Stock is convertible into shares of

the Company’s common stock, par value $ 0.0001 per share (the “Common Stock”) as more fully described in the Certificate

of Designations, Preferences and Rights of the Series A Convertible Preferred Stock (the “Certificate of Designation”).

to the Certificate of Designation on February 6, 2025, subject to Stockholder Approval (as defined below), each share of Preferred Stock

is convertible at the option of the holder into shares of Common Stock at a conversion price equal to 80% of the lowest closing price

of our Common Stock as of the closing of the Principal Market (as such term is defined in the Certificate of Designation) for each of

the five (5) Trading Days (as such term is defined in the Certificate of Designation) immediately prior to the date of conversion, or

other date of determination (but in no event less than the floor price), subject to certain adjustments as set forth in the Certificate

of Designation (the “Conversion Price”).

The floor price is equal to 20% of the Minimum Price (as such term is defined by

the rules and regulations of The Nasdaq Stock Market LLC under Nasdaq Listing Rule 5635(d)(1)(A)) or such lower amount as permitted,

from time to time, by the Principal Market (the “Floor Price”).

The number of shares of Common Stock issuable upon conversion

of a share of Preferred Stock shall be determined by dividing (x) the stated value of the Preferred Stock to be converted by (y) the

Conversion Price.

shares of Preferred Stock will be convertible immediately upon issuance, at the option of the holder, at the Conversion Price, subject

to a conversion cap that limits the conversion of the Preferred Stock such that an Investor may not beneficially own more than 4.99%

of the shares of Common Stock that would be issued and outstanding following such conversion (the “Maximum Percentage”).

An Investor may decrease or increase the Maximum Percentage by written notice to the Company from time to time to any other percentage

not in excess of 9.99%, provided that any increase in the Maximum Percentage will not be effective until the sixty-first (61st) day after

such notice is delivered to the Company, provided further that a holder shall not convert any Preferred Stock to the extent that, after

giving effect to such conversion, the aggregate number of shares of Common Stock issued or issuable upon conversion of the Preferred

Stock would exceed 19.99% of the issued and outstanding shares of the Company’s Common Stock unless and until the Company has obtained

the shareholder approval required by Nasdaq Listing Rule 5636(d) (“Shareholder Approval”).

initial closing of the issuance of Preferred Stock occurred on February 6, 2025 (the “Initial Closing”).

At the Initial Closing,

the Company issued 13,750 shares of Preferred Stock for aggregate gross proceeds of $ 11,000,000 , which included $ 943,801 of debt that

converted into Preferred Shares on the same terms.

RBW Capital Partners, LLC acted as placement agent for the Offering.

As compensation

in connection with the Offering, the Company paid the placement agent a placement agent fee and other fees in the amount of $ 1,105,000 .

April 13, 2026, the Company issued a certificate of amendment to the Certificate of Designation of Series A Convertible Preferred Stock

(the “Certificate of Amendment”).

Pursuant to the Certificate of Amendment, the Company amended certain provisions of the

Certificate of Designation, including clarifying and restating provisions relating to the designation and number of shares of Series

A Convertible Preferred Stock.

As amended, the Company has designated 30,000 shares of Series A Convertible Preferred Stock, each with

a par value of $ 0.0001 and a stated value of $ 1,000 per share.

April 15, 2026, the Company issued an additional 12,500 shares of Preferred Stock for aggregate proceeds of $ 10,000,000 (the “Second

Closing”) following effectiveness of the registration statement on April 14, 2026 and shareholder’s approval on April 10,

connection with the Offering, the Company filed a proxy statement with the United States Securities and Exchange Commission (the “Commission”)

seeking the approval of its stockholders for (i) the transactions contemplated by the Securities Purchase Agreement, (ii) the issuance

of the Preferred Stock and the Common Stock issuable upon the conversion of the Preferred Stock, (iii) a reverse stock split of the Company’s

Common Stock at a range of one for five (1-for-5) to a maximum of one for five hundred (1-for-500) shares, whether effected in a single

transaction or in multiple transactions, and all related amendments to the Company’s certificate of incorporation, and (iv) an

amendment to the Company’s certificate of incorporation to effect an increase in the Company’s authorized shares to the extent

required to issue the securities.

The Company filed the registration statement to issue the shares on February 17, 2026.

24, 2026, the SEC notified the Company in writing that there will be no review of the registration statement.

addition, the Company and each Investor entered into a registration rights agreement (the “Registration Rights Agreement”).

Pursuant to the Registration Rights Agreement, within fifteen (15) days following the Initial Closing, the Company shall file a resale

registration statement on Form S-1 (or Form S-3 if the Company is S-3 eligible) providing for the resale by the Investors of the Registrable

Securities (as defined in the Registration Rights Agreement) and to use its best efforts to cause such resale registration statement

to be declared effective by the staff of the Commission within forty five (45) days following the Initial Closing, or within sixty five

(65) days in the event of a review by the Commission.

to the Securities Purchase Agreement, the Investors have the right to appoint one (1) director to our Board of Directors.

The Securities

Purchase Agreement and Registration Rights Agreement contain certain representations and warranties, covenants and indemnities customary

for similar transactions.

The representations, warranties and covenants contained in the Securities Purchase Agreement and Registration

Rights Agreement were made solely for the benefit of the parties to the Securities Purchase Agreement and Registration Rights Agreement

and may be subject to limitations agreed upon by the contracting parties.

STOCKHOLDERS’ EQUITY (DEFICIT )

Stock —The Company is authorized to issue 10,000,000

shares of preferred stock with a par value of $ 0.0001

per share and with such designations, voting

and other rights and preferences as may be determined from time to time by the Board .

At March 31, 2026 and December 31, 2025, 25,000

were designated as Series A convertible preferred stock.

Series A Preferred Stock —The Company

is authorized to issue 25,000 shares of series A preferred stock with a par value of $ 0.0001 per share and with such designations, voting

and other rights and preferences as may be determined from time to time by the Board.

At March 31, 2026 and December 31, 2025, there were

13,750 and 0 shares of Series A Preferred Stock issued or outstanding, respectively.

Stock — The Company is authorized to issue 490,000,000 shares of Common Stock with a par value of $ 0.0001 per share.

As of September

30, 2025 and December 31, 2024, there were 49,525,970 and 27,601,767 shares of common stock issued and outstanding, respectively.

part of the PowerUp initial public offering (“IPO”), PowerUp issued warrants to third-party investors where each whole warrant

entitles the holder to purchase one share of the Company’s Class A common stock at an exercise price of $ 11.50 per share (the “Public

Simultaneously with the closing of the IPO, PowerUp completed the private sale of 9,763,333 Private Placement warrants

where each warrant allows the holder to purchase one share of the Company’s Common Stock at $ 11.50 per share.

At September 30,

2025, there are 14,374,969 Public Warrants and 9,763,333 Private Placement warrants outstanding.

Public Warrants became exercisable commencing 30 days after the consummation of the Reverse Acquisition.

31, 2026 and December 31, 2025, there were 167,470 and 117,780 shares of common stock issued and outstanding, respectively, after giving

effects to the Reverse Splits as described in Note 2.

part of the PowerUp IPO, PowerUp issued warrants to third-party investors where each whole warrant entitles the holder to purchase

one share of the Company’s Class A common stock at an exercise price of $ 460

per share (the “Public Warrants”).

Simultaneously with the closing of the IPO, PowerUp completed the private sale of 8,199

warrants (the “Private Placement Warrants”), after giving effect to the Reverse Stock Splits, where each warrant allows

the holder to purchase one fortieth share of the Company’s Common Stock at $ 460

per share, after giving effect to the Reverse Splits as described in Note 2.

At March 31, 2026, there are 11,999

Public Warrants after giving effects to the Reverse Splits as described in Note 2 and 8,199

Private Placement Warrants outstanding after giving effects to the Reverse Splits as described in Note 2.

December 31, 2025, there are 14,374,969

Public Warrants and 9,763,333

Private Placement Warrants outstanding.

Public Warrants became exercisable commencing 30 days after the consummation of the Reverse Recapitalization.

the warrants became exercisable, the Company may redeem the warrants:

2 unchanged sentences

not less than 30 days’ prior written notice of redemption, to each warrant holder;

and only if, the reported last sale price of the Company’s Common Stock equals

or exceeds $ 18.00 per share (as adjusted for share subdivisions, share consolidations, share

capitalizations, rights issuances, reorganizations, recapitalizations and the like) for any

20 trading days within a 30 -trading day period ending on the third trading day prior to the

date the Company sends the notice of redemption to the warrant holders.

and only if, the reported last sale price of the Company’s Common Stock equals or exceeds $ 720

per share (as adjusted for share subdivisions, share consolidations,

share capitalizations, rights issuances, reorganizations, recapitalizations and the like) for any 20

trading days within a 30 -trading

day period ending on the third trading day prior to the date the Company sends the notice of redemption to the warrant holders.

Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the IPO, except that the Private Placement

Warrants and the common stock issuable upon the exercise of the Private Placement Warrants are not transferable, assignable, or saleable

until 30 days after the completion of a Reverse Acquisition, subject to certain limited exceptions.

until 30 days after the completion of a Reverse Recapitalization, subject to certain limited exceptions.

Company has determined that Public Warrants and the Private Placement Warrants issued in connection with its IPO in February 2022 are

subject to treatment as equity.

Upon the closing of the Reverse Acquisition, in accordance with the guidance contained in ASC 815, the

warrants continue to be equity classified.

Upon the closing of the Reverse Recapitalization, in accordance with the guidance contained in ASC 815,

the warrants continue to be equity classified.

based compensation

February 29, 2024, Aspire Biopharma, Inc entered Corporate advisory agreement with an advisory firm, pursuant to which the advisory firm

will receive 6 % of the amount shares outstanding after the close of the Reverse Acquisition as compensation for advisory services to

support the Company’s efforts related to the Reverse Acquisition.

On January 3, 2025, the agreed upon compensation was reduced

to 4.75 % of the amount of shares outstanding after the close of the Reverse Acquisition.

In February 2025, 1,662,500 shares of the 35,000,000

Reverse Acquisition shares were issued to the affiliated company under this agreement.

The issuance of these shares to the service advisors

is subject to ASC 718.

Under ASC 718, compensation associated with equity-classified awards is measured at fair value upon the grant

The shares were granted subject to a performance condition (i.e., the occurrence of a Reverse Acquisition).

Stock-based compensation

of $ 14,131,250 was recognized in general and administrative expenses upon consummation of the Reverse Acquisition in February 2025 based

on the grant date fair value per share.

The fair value was determined by applying a 15 % discount for lack of marketability to the market

price of the share on date of grant.

February 29, 2024, Aspire Biopharma, Inc entered into a Corporate advisory agreement with an advisory firm, pursuant to which the advisory

firm will receive 6 % of the amount shares outstanding after the close of the Reverse Recapitalization as compensation for advisory services

to support the Company’s efforts related to the Reverse Recapitalization.

On January 3, 2025, the agreed upon compensation was

reduced to 4.75 % of the amount of shares outstanding after the close of the Reverse Recapitalization.

In February 2025, 1,385 shares

of the 29,167 Reverse Recapitalization shares after giving effects to the Reverse Splits as described in Note 2 were issued to the affiliated

company under this agreement.

The issuance of these shares to the service advisors is subject to ASC 718.

Under ASC 718, compensation

associated with equity-classified awards is measured at fair value upon the grant date.

The shares were granted subject to a performance

condition (i.e., the occurrence of a Reverse Recapitalization).

Stock-based compensation of $ 0 and $ 14,131,250 was recognized in general

and administrative expenses upon consummation of the Reverse Recapitalization for the three months ended March 31, 2026 and 2025, respectively,

based on the grant date fair value per share.

The fair value was determined by applying a 15 % discount for lack of marketability to the

market price of the shares on date of grant.

Biopharma warrants

the years ended December 31, 2024 and December 31, 2023, on a post-split basis, Aspire Biopharma, Inc issued 44,000,000 at a per share

price of $ 0.40 and 7,500,000 warrants at an average per share price of $ 0.13 , respectively.

As of December 31, 2024 all warrants issued

were fully vested.

As of December 31, 2024, there were 91,500,000 warrants outstanding.

On January 21, 2025 the 91,500,000 warrants were

converted into 91,500,000 shares of Aspire Biopharma Inc.

common stock, which, on the Reverse Acquisition date, were subsequently converted

into 5,735,717 shares of common stock of the Company.

capital loan and other share issuance as close of the reverse acquisition

to the First Subscription Agreement, the Company issued 1,750,000 shares of Common Stock to the Investors representing commitment fee

shares at Closing Date ( See Note 5 - Related Party Transactions ).

to the Blackstone Subscription Agreement, the Company issued 1,795,000 shares of Common Stock to Blackstone representing commitment fee

shares at Closing Date ( See Note 6 - Subscription Agreement Loans ).

to the Loan and Transfer Agreement with Apogee, the Company issued 50,000 shares of Common Stock to the New Sponsor at Closing Date ( See

Note 5 - Related Party Transactions ).

On May 22, 2024, PowerUp entered into a non-redemption agreement with the sponsor of PowerUp and an investor, pursuant to which the

investor agreed not to exercise their redemption rights with respect to holdings of PowerUp shares and in consideration of same, received

75,000 Common Stock of the Company at the close of the Reverse Acquisition.

July 13, 2023, PowerUp entered into an amended Service agreement with a vendor ( the “Amended Service Agreement”).

to the Service Agreement, the vendor will act as a capital market advisor in exchange for a cash fee and 80,000 common shares.

were issued to the vendor on the Closing Date of the reverse acquisition.

the year ended December 31, 2024, Aspire Biopharma, Inc issued 44,000,000 warrants at a per share price of $ 0.40 .

As of December 31,

2024, there were 91,500,000 warrants outstanding and all were fully vested.

On January 21, 2025, the 91,500,000 warrants were converted

into 91,500,000 shares of Aspire Biopharma Inc.

common stock, which, on the Reverse Recapitalization date, were subsequently converted

into 4,780 shares of common stock of the Company after giving effects to the Reverse Splits as described in Note 2.

Share issuances

stated in Note 5, on April 28, 2025, in connection with the Settlement Agreement, the Company issued 521 shares of common stock after

giving effects to the Reverse Splits as described in Note 2 to Blackstone Capital Advisors, Inc.

or its designees.

the year ended December 31, 2025, a total value of $ 9,523,683 of Convertible Notes were converted into 73,998 shares of common stock

of the Company after giving effects to the Reverse Splits as described in Note 2.

The remaining debt of $ 163,817 was converted into 1,625

shares of common stock in January 2026 after giving effects to the Second Reverse Split as described in Note 2.

stated in Note 9, In January 2026, the Company issued 202 true up shares to Arena after giving effects to the Second Reverse Split as

described in Note 2.

stated in Note 10, The Company issued 26,333 shares of common stock as incentive to the Investors for entering into the January 2026

Share Purchase Agreement after giving effects to the Second Reverse Splits as described in Note 2.

January 1, 2026, the Company entered into Exchange Agreements (the “Exchange Agreements”) with certain holders of the Company’s

debt (the “Holders”) to exchange approximately $ 1.75 million in debt for shares (the “Exchange Shares’) of the

Company’s common stock (the “Exchange”) (See Note 5).

The debt was incurred by the Company’s predecessor, PowerUp

pursuant to subscription agreements dated March 4, 2024, and May 9, 2024.

The Holders were Sponsors of PowerUp’s initial public

to the Exchange Agreements, the Holders may, in their discretion, submit a notice of exchange setting forth the Exchange Amount, the

Exchange Shares, and the applicable Exchange Price.

Within one business day of receipt of an Exchange Notice, the Company will issue

to such Holder the number of Exchange Shares equal to the Exchange Amount divided by the Exchange Price, and such Exchange Amount shall

be deducted from the Outstanding Balance.

Each Holder may submit up to four (4) Exchange Notices, but each Exchange Notice may not exchange

more than thirty percent (30%) of the applicable Holder’s Outstanding Balance.

addition, upon a financing in excess of $3,000,000 (a “Financing”), the Company may repay part or all of any Holder’s

Outstanding Balance.

Upon a Financing, a Holder may elect to receive cash proceeds from any Financing in an amount equal to twenty five

percent (25%) of such Holder’s Outstanding Balance, to be applied to such Holder’s Outstanding Balance.

If a Holder elects

to require any part of its Outstanding Balance to be repaid from the proceeds of a Financing, it can elect to receive up to 33.33% of

the aggregate proceeds of such Financing.

January 2026, pursuant to the Exchange Agreements, the Subscription Agreement Loan balances along with applicable interest were converted

into 21,525 shares of ordinary stock of the Company after giving effect to the Reverse Splits as described in Note 2.

FAIR VALUE MEASUREMENTS

fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would

have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction

between market participants at the measurement date.

In connection with measuring the fair value of its assets and liabilities, the Company

seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable

inputs (internal assumptions about how market participants would price assets and liabilities).

The following fair value hierarchy is

used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and

Quoted prices in active markets for identical assets or liabilities.

An active market for an asset or liability is a market in which

transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Observable inputs other than Level 1 inputs.

Examples of Level 2 inputs include quoted prices in active markets for similar assets

or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

Unobservable inputs based on the Company’s assessment of the assumptions that market participants would use in pricing the asset

or liability.

following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring

basis at September 30, 2025 and December 31, 2024 and indicates the fair value hierarchy of the valuation inputs the Company utilized

to determine such fair value.

basis at March 31, 2026 and December 31, 2025 and indicates the fair value hierarchy of the valuation inputs the Company utilized to

determine such fair value.

OF ASSETS AND LIABILITIES THAT ARE MEASURED AT FAIR VALUE ON A RECURRING BASIS

Prices in Active Markets

Other Observable Inputs

Other Unobservable Inputs

Purchase Agreement liabilities

and Transfer note payable

Purchase Agreement liabilities

discussed in Note 9 - Convertible Notes, the convertible notes are classified and accounted for as a financial liability of which will

be measured at fair value on a recurring basis (one of the instruments is accounted for at fair value on a recurring basis under ASC

480-10, as a derivative instrument under ASC 815, or at fair value under the fair value option in ASC 825-10).

March 31, 2026

Quoted Prices in Active Markets

Significant Other Observable Inputs

Significant Other Unobservable Inputs

Forward Purchase Agreement liabilities

December 31, 2025

Quoted Prices in Active Markets

Significant Other Observable Inputs

Significant Other Unobservable Inputs

Convertible Notes

Forward Purchase Agreement liabilities

Derivative liability

discussed in Note 7 - Convertible Notes, the February 2025 Convertible Debentures are classified and accounted for as a financial liability

which is measured at fair value on a recurring basis (one of the instruments is accounted for at fair value on a recurring basis under

ASC 480-10, as a derivative instrument under ASC 815).

financial liabilities are valued under a Monte Carlo Model.

3 unchanged sentences

interest rate.

key inputs of the models used to value the Company’s convertible notes as of September 30, 2025 were:

key inputs of the models used to value the Company’s February 2025 Convertible Debentures as of December 31, 2025 were:

OF CONVERTIBLE NOTES

Remaining - Years

change in the fair value of the convertible notes measured using Level 3 inputs is summarized as follows:

December 31, 2025

Term Remaining - Years

change in the fair value of the convertible notes measured using Level 3 inputs is summarized as follow:

OF FAIR VALUE OF THE CONVERTIBLE NOTES

the Nine Months ended

September 30, 2025

February 2025 Notes

Balance, December 31, 2025

Convertible notes

value at issuance

in kind Interest

Convertible notes, beginning balance

Change in fair value

Repayment of Note

( 3,032,645 )

in fair value

September 30, 2025

Convertible notes

Balance, March 31, 2026

Convertible notes, ending balance

purchase agreement liabilities

discussed in Note 12 - Commitment and Contingencies, the forward purchase agreement is classified and accounted for as a financial liability

which will be measured at fair value on a recurring basis (one of the instruments is accounted for at fair value on a recurring basis

under ASC 480-10, as a derivative instrument under ASC 815, or at fair value under the fair value option in ASC 825-10);

discussed in Note 9 - Commitment and Contingencies, the forward purchase agreement liabilities are classified and accounted for as financial

liabilities which will be measured at fair value on a recurring basis.

forward purchase agreements liabilities are valued under a Probability Weighted Expected Return Model (“PWERM”) which fair

values repayable capital investment and used a Black Scholes Model that fair values the conversion features within the convertible debt.

values repayable capital investment and uses a Black Scholes Model that fair values the conversion features within the convertible debt.

The PWERM is a multistep process in which value is estimated based on the probability-weighted present value of various future outcomes.

The estimated fair value of the forward purchase agreements liabilities is determined using Level 3 inputs.

Inherent in the pricing models

are assumptions related to expected share-price volatility, expected life and risk-free interest rate.

There were no draws for the nine

months ended September 30, 2025;

therefore, no valuation was required.

change in the fair value of the forward purchase agreement measured using Level 3 inputs is summarized as follows:

OF FAIR VALUE OF THE FORWARD PURCHASE AGREEMENT

Balance, December

in Reverse Acquisition

in fair value

purchase agreement at March 31, 2025

in fair value

purchase agreement at June 30, 2025

in fair value

purchase agreement at September 30, 2025

discussed in Note 9 - Convertible Notes, the Company accounted for the August 2025 Notes under ASC 470 “Debt” and ASC 815

“Derivatives and Hedging” and concluded that bifurcation of multiple embedded features was necessary under ASC 815-15-25-1.

As a result, the Company separately accounted for as a single compound derivative.

The initial fair value of $ 4,101,583 the derivative

liability at issuance was estimated using a Monte Carlo Model.

For the three and nine months ended September 30, 2025, change in fair

value of the derivative liability of $ 547,318 was recorded as an income on the condensed consolidated statements of operations.

30, 2025, the fair value of the derivative of $ 3,554,265 was included in derivative liability on the condensed consolidated balance sheets.

key inputs of the models used to value the Company’s derivative liabilities as of September 30, 2025 were:

OF SUBSCRIPTION FINANCIAL LIABILITIES

Remaining - Years

The estimated fair value of the forward purchase agreements liabilities are determined using Level 3 inputs.

Inherent in the pricing

models are assumptions related to expected share-price volatility, expected life and risk-free interest rate.

key inputs of the models used to value the forward purchase agreement liabilities as of March 31, 2026 and December 31, 2025 were:

OF MODELS USED IN FORWARD PURCHASE AGREEMENTS LIABILITIES

March 31, 2026

December 31, 2025

Risk Free Rate

3.70 % - 3.80 %

3.48 % - 3.59 %

Likelihood of a call

change in the fair value of the forward purchase agreement liabilities measured using Level 3 inputs is summarized as follows:

OF FAIR VALUE FORWARD PURCHASE AGREEMENT LIABILITIES

Forward purchase agreement liability at December 31, 2025

Change in fair value

Forward purchase agreement liability at March 31, 2026

discussed in Note 7 - Convertible Notes, the Company accounted for the August 2025 Notes under ASC 470 and ASC 815 and concluded that

bifurcation of multiple embedded features was necessary under ASC 815-15-25-1.

As a result, the Company separately accounted for as a

single compound derivative.

The initial fair value of the derivative liability at issuance was $ 4,101,583 and estimated using a Monte

In January 2026, the remaining balance of $ 163,817 of the convertible notes was converted into 1,625 shares of common stock

after giving effects to the Reverse Splits as described in Note 2.

For the three months ended March 31, 2026, change in fair value of

the derivative liability of $ 40,954 was recorded as an income on the unaudited condensed consolidated statements of operations.

31, 2026 and December 31, 2025, the fair value of the derivative of $ 0 and $ 40,954 , respectively, was included in derivative liability

on the accompanying unaudited condensed unaudited condensed consolidated balance sheet.

change in the fair value of the derivative liability measured using Level 3 inputs is summarized as follows

OF CHANGE IN FAIR VALUE OF DERIVATIVE LIABILITY

the nine months ended

September 30, 2025

Balance, December

in fair value

liability at September 30, 2025

SEGMENT INFORMATION

Topic 280, “Segment Reporting,” establishes standards for companies to report in their financial statement information about

operating segments, products, services, geographic areas, and major customers.

Operating segments are defined as components of an enterprise

for which separate financial information is available that is regularly evaluated by the Company’s chief operating decision maker,

or group, in deciding how to allocate resources and assess performance.

CODM has been identified as the Chief Financial Officer, who reviews the assets, operating results, and financial metrics for the Company

as a whole to make decisions about allocating resources and assessing financial performance.

Accordingly, management has determined that

there is only one reportable segment.

CODM assesses performance for the single segment and decides how to allocate resources based on net loss that also is reported on the

statements of operations as net loss.

The measure of segment assets is reported on the balance sheet as cash.

When evaluating the Company’s

performance and making key decisions regarding resource allocation, the CODM reviews several key metrics included in net loss and cash,

which include the following:

OF SEVERAL KEY METRICS INCLUDED IN NET LOSS AND TOTAL ASSETS

the Three Months Ended

September 30,

the Nine Months Ended

September 30,

Derivative liability at December 31, 2025

liability, beginning balance

Change in fair value

Derivative liability at March 31, 2026

Derivative liability, ending balance

key inputs of the models used to value the Company’s derivative liability as of December 31, 2025 were:

OF KEY INPUTS OF MODELS USED TO VALUE DERIVATIVE LIABILITY

December 31, 2025

Term Remaining - Years

$ 0.10 - $ 0.42

Risk Free Rate

3.52 % - 3.92 %

expenses, net

SEGMENT INFORMATION

evaluating the Company’s performance and making key decisions regarding resource allocation, the CODM reviews several key metrics

included in net loss, which include the following:

OF SEVERAL KEY METRICS INCLUDED IN NET LOSS AND TOTAL ASSETS

For the Three Months Ended March 31,

Operating expenses

( 1,651,919 )

( 15,556,480 )

Other expenses, net

( 1,576,723 )

1 unchanged sentence

$ ( 15,941,328 )

general and administrative expenses and other expenses are reviewed and monitored by the CODM to manage and forecast cash to ensure enough

capital is available for working capital needs and to fund research and development efforts.

The CODM also reviews general and administrative

costs to manage, maintain and enforce all contractual agreements to ensure costs are aligned with all agreements and budget.

and administrative costs, as reported on the condensed consolidated statements of operations, are the significant segment expenses provided

to the CODM on a regular basis.

other segment items included in net loss are reported on the condensed consolidated statements of operations and described within their

respective disclosures.

margin, operating expenses, other expenses, net and income tax expense are reviewed and monitored by the CODM to manage and forecast

cash to ensure enough capital is available for working capital needs and to fund research and development efforts.

The CODM also reviews

general and administrative costs to manage, maintain and enforce all contractual agreements to ensure costs are aligned with all agreements

General and administrative costs, as reported on the unaudited condensed consolidated statements of operations, are the significant

segment expenses provided to the CODM on a regular basis.

other segment items included in net loss are reported on the unaudited condensed consolidated statements of operations and described

within their respective disclosures.

SUBSEQUENT EVENTS

Company evaluated subsequent events and transactions that occurred after the balance sheet date through the date that the unaudited condensed

financial statements were issued.

Based upon this review, other than disclosed below or within these financial statements, the Company

did not identify any other subsequent events that would have required adjustment or disclosure in the unaudited condensed financial statements.

Conversion of Notes

October 2025, $ 1,631,661 of convertible notes were converted into 9,900,237 shares of Common Stock pursuant to the terms of the Securities

Purchase Agreement described in Note 9.

November 2025, $ 5,260,571

of convertible notes were converted into 48,050,971

shares of Common Stock pursuant to the terms of the Securities Purchase Agreement described in Note 9.

November 11, 2025, the Company entered into a new Purchase Agreement (the “Second ELOC Agreement”) with Arena Business

Solutions Global SPC II, Ltd.

Under the Second ELOC Agreement, the Company has the right, but not the

obligation, to direct Arena to purchase up to $ 100,000,000

in shares of the Company’s common stock (the “ELOC Shares”) upon satisfaction of certain terms and conditions

contained in the Second ELOC Agreement, including, without limitation, an effective registration statement filed with the SEC

registering the resale of the ELOC Commitment Fee Shares (as defined below) and additional shares to be sold to Arena from time to

time under the ELOC Agreement.

term of the ELOC Agreement began on November 11, 2025 and ends on the earlier of (i) the first day of the month following the

36-month anniversary of the execution date, (ii) the date on which the Investor shall have purchased the maximum amount of ELOC

Shares, or (iii) the effective date of any written notice of termination delivered pursuant to the terms of the ELOC Agreement (the

“Commitment Period”).

In consideration for the Arena’s execution and delivery of the ELOC Agreement, the Company

is required to issue Common Shares to Arena equal to $ 250,000

divided by the lowest 1-Trading Day VWAP of the Common Shares of the five (5) Trading Days immediately preceding the

effectiveness of the initial registration statement (the “Commitment Fee Shares”), plus $ 25,000

in Common shares for fees associated with the prior ELOC Agreement with the Company, based on a price equal to the lowest

1-Trading Day VWAP of the Common Shares of the five (5) Trading Days immediately preceding the date of execution and delivery of

this Agreement.

Common Shares have been issued to Arena under the Second ELOC Agreement after the balance sheet date through the date that the financial

statements were issued.

Second ELOC Agreement replaces the ELOC Agreement described in Note 9.

consolidated financial statements were issued.

Based upon this review, other than disclosed below or within these unaudited condensed

consolidated financial statements, the Company did not identify any other subsequent events that would have required adjustment or disclosure

in the unaudited condensed consolidated financial statements.

Closing of Preferred Stock

April 15, 2026, a second closing was completed, pursuant to which the Company issued an additional 12,500 Shares of Preferred Stock for

aggregate proceeds of $ 10,000,000 (the “Second Closing”).

The Company’s registration statement to register the shares

of Common Stock issuable upon the conversion of the Shares was deemed effective on April 14, 2026, and the Company’s shareholders

approved the issuance of the additional conversion Shares on April 10, 2026.

of Preferred Stock and Effects of Stockholders’ Equity

of the date of this report, holders of the Preferred Stock have converted 9,200

Preferred Stock into 33,674,288

shares of common stock.

On April 15, 2026, the Company announced that it has entered into a non-binding letter of intent (the “LOI”) for the

acquisition (the “Acquisition”) of 100 % of the Driver Controls Systems business unit ( “DCS” ) of

Firefish Topco, LLC (“FTLLC”), from the shareholders of FTLLC (the “Sellers”), pursuant to which the Company

intends to acquire 100 % of the equity, assets and liabilities (subject to certain agreed exclusions) of the subsidiaries constituting

the operations of DCS through a combination of stock and asset transactions, to be mutually agreed upon between the parties.

completion of the Acquisition, the Company plans to engage Lakewood & Company, LLC to provide management services for the operation

Lakewood’s principals have more than 100 years of experience in the automotive industry.

Price and Consideration:

The LOI provides for an enterprise valuation of $ 30 million on a cash-free, debt-free basis (the “Purchase

Price”), payable in cash at closing, subject to certain customary adjustments, including adjustments for (i) accrued income taxes

(net of receivables) and (ii) funded indebtedness.

The Purchase Price is not subject to a working capital adjustment so long as the business

is operated in the ordinary course consistent with past practice.

The Company does not anticipate procuring any new equity raise to consummate

the purchase.

The LOI provides for break-up fees of $ 3.5 million payable by the Company or Sellers, respectively, under certain circumstances,

including a failure to proceed in good faith or to consummate the closing when required.

Such fees are subject to customary exceptions,

including the failure of closing conditions, a material breach by the counterparty, or the exercise of specified termination rights.

and Confidentiality:

The Sellers have agreed to a “no-shop” provision for an initial period of 30 days (subject to a

potential extension), during which they may not solicit or engage in alternative acquisition proposals, subject to limited exceptions.

The parties have also agreed to customary confidentiality restrictions.

Except for certain provisions, including those relating to exclusivity, confidentiality, expenses, and (following public

disclosure) break-up fees, the LOI is non-binding and does not obligate the parties to consummate the Acquisition.

The completion of

the Acquisition remains subject to the negotiation and execution of a definitive Purchase Agreement and satisfaction of the conditions

set forth therein.

Engagement of Lakewood & Company remains subject both to completion of the Acquisition and to the negotiation

and execution of a definitive management agreement and satisfaction of the conditions set forth therein.

Letter for Credit Facility

Company entered into a commitment letter with a national financial institution providing for a senior secured credit facility of Aspire

in an aggregate principal amount of up $ 22,500,000 (the “Aspire Credit Facility”).

Aspire intends to use the proceeds of

the Aspire Credit Facility, if consummated, to finance the acquisition of 100 % of DCS.

The Company does not anticipate procuring any

new equity raise to consummate the purchase.

Aspire Credit Facility is expected to consist of a senior secured five-year term loan, at an interest rate equal to 325 basis points

above the one-month term Secured Overnight Financing Rate.

The final terms of the Aspire Credit Facility, including the senior secured

term loan, will be subject to execution of definitive credit documentation and the satisfaction of customary closing conditions.

and Transfer Repayment Agreement

April 14, 2026 and April 15, 2026, the Company entered into payment agreements with SSVK, Apogee (which had two separate $ 50,000 notes)

and Sheth, pursuant to which the Company settled by cash in full total of $ 499,214 of balances owing under the Loan and transfer Agreements

(See Note 4).

In April 2026, Srirama Associates, LLC filed a lawsuit in the Superior Court of the State of Delaware alleging breach of contract in connection

with an amended promissory note fee described in Note 5.

The complaint seeks approximately $ 1,000,000 in damages, plus interest and costs.

The Company disputes the claim and filed a motion to dismiss on May 11, 2026.

The Company has not recorded a liability related to this

matter as of March 31, 2026.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements