What changed in this filing

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Item 1. Financial Statements

2026-08-13 compared with 2026-05-15 · 797 added, 845 removed, 415 unchanged (80% of the section changed)

Financial statements (Unaudited)

Financial Statements

BIOPHARMA HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

March 31, 2026

June 30, 2026

December 31, 2025

3 unchanged sentences

Total current assets

Deferred financing costs

Liabilities and stockholders’ equity (deficit)

8 unchanged sentences

Subscription agreement loans

Convertible note

Convertible notes

Total current liabilities

4 unchanged sentences

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

$ 0.0001 par value, 10,000,000 shares authorized, none issued or outstanding, except for 30,000 and 0 shares designated, respectively, as Series A convertible preferred stock

Series A convertible preferred stock, 30,000 and 0 shares as designated, respectively, $ 0.0001 par value;

17,050 and 0 shares issued or outstanding, respectively

Common stock;

$ 0.0001 par value;

490,000,000 shares authorized;

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

1,295,234 and 117,780

issued and outstanding, respectively *

Additional paid-in capital

5 unchanged sentences

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.

* Retroactively restated for

a 1 for 40 reverse stock split on January 16, 2026 and a 1 for 30 reverse stock split on May, 11, 2026.

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

BIOPHARMA HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three Months Ended March 31,

For the Three Months Ended June 30,

For the Six Months Ended June 30,

Cost of revenue

Inventory write off

OPERATING EXPENSES

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

and $ 14,131,250 , respectively)

General and administrative (including stock based compensation of $ 157,500 , $ 0 , $ 157,500 and $ 14,131,250 , respectively)

Research and development

Sales and marketing

Merger and acquisition expenses

Total operating expenses

2 unchanged sentences

( 4,324,391 )

( 16,356,370 )

Other income (expense):

3 unchanged sentences

Change in fair value of derivative liabilities and convertible notes

Loss on extinguishment of debt

Gain (loss) on extinguishment of debt

Total other expense, net

( 1,181,403 )

( 1,566,251 )

Loss before provision for income taxes

1 unchanged sentence

( 1,981,293 )

( 4,491,034 )

( 17,922,621 )

Income tax expense

1 unchanged sentence

$ ( 1,981,293 )

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.

$ ( 4,491,034 )

$ ( 17,922,621 )

Weighted average common shares outstanding – basic and diluted

Net loss per common share – basic and diluted-

Retroactively restated for

a 1 for 40 reverse stock split on January 16, 2026 and a 1 for 30 reverse stock split on May, 11, 2026.

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

BIOPHARMA HOLDINGS, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT )

THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025

Series A Preferred Stock

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

Preferred Stock

Additional Paid-in

Stockholders’

Balance - January 1, 2026

Total Stockholders’

Balance – December 31, 2025 *

$ ( 27,258,081 )

2 unchanged sentences

Conversion of convertible notes to Series A Convertible Preferred Stock

Conversion of convertible Notes

Conversion of convertible notes to common stock

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

5 unchanged sentences

( 30,480,973 )

Stock based compensation

Additional Paid-in

Total Stockholders’

Balance - January 1, 2025 (Restated)

Issuance of Series A Convertible Preferred Stock

Conversion of Series A Convertible Preferred Stock to common stock

Shares issued for consulting services

( 1,268,142 )

Balance (Restated)

Balance – June 30, 2026

$ ( 31,749,115 )

* Retroactively restated for

a 1 for 40 reverse stock split on January 16, 2026 and a 1 for 30 reverse stock split on May, 11, 2026.

Stockholders’

Balance – December 31, 2024 *

$ ( 2,777,233 )

$ ( 1,540,088 )

Conversion of warrants

Issuance of shares in Business Combination

Issuance of shares in Reverse Recapitalization

( 4,602,577 )

10 unchanged sentences

( 7,952,742 )

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.

Shares issued from debt extinguishment

( 1,981,293 )

Balance – June 30, 2025

$ ( 20,699,854 )

$ ( 9,616,785 )

$ ( 20,699,854 )

$ ( 9,616,785 )

Retroactively restated for

a 1 for 40 reverse stock split on January 16, 2026 and a 1 for 30 reverse stock split on May, 11, 2026.

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

BIOPHARMA HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months Ended March 31,

For the Six Months Ended June 30,

Cash flows from operating activities:

3 unchanged sentences

Amortization of debt discount

Loss on extinguishment of debt

Interest expense

(Gain) loss on extinguishment of debt

( 1,115,455 )

Change in fair value of derivative liabilities and convertible notes

Interest capitalized

Stock based compensation

Inventory write-off

Stock-based compensation expense

Changes in operating assets and liabilities:

10 unchanged sentences

Issuance of Series A convertible preferred stock

Proceeds from recapitalization

Proceeds from Reverse Recapitalization

Proceeds from issuance of convertible notes

Deferred financing costs

Proceeds from debenture

3 unchanged sentences

Repayment of notes payable – related party

( 1,384,778 )

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

Net increase in cash and cash equivalents

Cash and cash equivalents, beginning of the period

Cash and cash equivalents, end of the period

Supplemental cash flow information:

Cash paid for interest

Supplemental disclosure of non-cash investing and financing activities:

Conversion of convertible notes to common stock

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

Conversion of convertible notes to Series A convertible preferred stock

Conversion of Series A convertible preferred stock to common stock

Issuance of commitment fee shares under ELOC agreement

Due to affiliate write-off

Accounts payable and other liabilities combined, net

Promissory note fee - related party, write-off

Promissory note fee - related party, combined

Subscription agreement loans combined

Loan and transfer note payable combined

Loan and transfer notes payable combined

Forward purchase agreement liability combined

Supplemental cashflow information:

Interest paid

Issuance of common stock for services

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

1 unchanged sentence

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

Description of Organization and Business

Biopharma Holdings, Inc.

2 unchanged sentences

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.

at that time) entered into an Agreement and Plan of Merger (as amended,

the “Aspire Merger Agreement”) with PowerUp Merger Sub II, Inc., a Delaware corporation and wholly-owned subsidiary of the

Company (“Merger Sub”), SRIRAMA Associates, LLC, a Delaware limited liability company (the “Sponsor”), Stephen

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 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 ).

the Company completed the reverse recapitalization transaction (“Reverse Recapitalization”) ( see Note 3.

Reverse Recapitalization )

and changed its name to Aspire Biopharma Holdings, Inc.

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.

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.

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

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

Recapitalization

August 26, 2024, the Company (then known as PowerUp Acquisition Corp.) entered into an Agreement and Plan of Merger (as amended, the

“Merger Agreement”) with PowerUp Merger Sub II, Inc., a Delaware corporation and wholly-owned subsidiary of the Company (“Merger

Sub”), Srirama Associates, LLC, a Delaware limited liability company (the “New Sponsor”), Stephen Quesenberry, in

the capacity as the seller representative, and Aspire Biopharma, Inc., a Puerto Rico corporation.

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

Recapitalization”) in accordance with the terms of the 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

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.

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

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

split, including restating prior period amounts.

May 11, 2026, the Company effected a 1-for-30 reverse stock split with respect to its 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 amounts.

Reverse Splits had no effect on the Company’s authorized number of shares of common stock, the par value of common stock, the public

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 to reflect the number of shares outstanding after the Reverse Splits.

and Management’s Plan

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

As of June 30, 2026, working capital was $ 11,779,348

and cash and cash equivalents was $ 12,167,136 .

For the six months ended June 30, 2026, net loss was $ 4,491,034 and accumulated deficit

totaled $ 31,749,115 .

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 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 7.

Securities Purchase Agreement )

to which it received a 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 and received an additional $ 9,000,000 after payment of applicable fees.

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

Summary of Significant Accounting Policies to the Company’s consolidated financial statements included in the

Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (“2025 Annual Report on Form 10-K”), filed

with the SEC on March 30, 2026, as amended on Form 10-K/A filed with the SEC on April 8, 2026, for a description of all significant accounting

of Presentation

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

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,

or cash flows.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments,

consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and

cash flows for the periods presented.

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, 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 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

Company is an emerging growth company as defined in Section 102 (b)(1) of the Jumpstart Our Business Startups Act of 2012 (the “JOBS

Act”), which exempts emerging growth companies from being required to comply with new or revised financial accounting standards

until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a

class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards.

The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements

that apply to non-emerging growth companies but any such an election to opt out is irrevocable.

The Company has elected not to opt out

of such extended transition period, which means that when a standard is issued or revised, and it has different application dates for

public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies

adopt the new or revised standard.

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

of credit risk

instruments that potentially subject the Company to concentration of credit risk consist of cash accounts in a financial institution

which, at times, may exceed the Federal Deposit Insurance Corporation (“FDIC”) coverage limit of $ 250,000 .

Any loss incurred

or a lack of access to such funds could have a significant adverse impact on the Company’s financial condition, results of operations,

and cash flows.

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.

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.

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

Value of Financial Instruments

value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly

transaction between market participants as of the measurement date.

The authoritative guidance establishes a hierarchy for inputs used

in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the

most observable inputs be used when available.

Observable inputs are from sources independent of the Company.

Unobservable inputs reflect

the Company’s assumptions about the factors market participants would use in valuing the asset or liability developed based upon

the best information available in the circumstances.

The categorization of financial assets and liabilities within the valuation hierarchy

is based upon the lowest level of input that is significant to the fair value measurement.

The hierarchy is broken down into three levels:

Inputs are quoted prices in active markets for identical assets or liabilities.

Inputs include quoted prices for similar assets or liabilities in active markets, quoted

prices for identical or similar assets or liabilities in markets that are not active, and

inputs (other than quoted prices) that are observable for the asset or liability, either

directly or indirectly.

Inputs are unobservable for the asset or liability.

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 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

of accounting for inventory.

Inventories on hand are evaluated on an on-going basis to determine if any items are obsolete, spoiled,

or in excess of future demand.

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 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 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:

The Company sells pharmaceutical products directly to customers from its website.

The Company’s revenue is derived from the customer orders evidenced by invoices issued.

Orders placed by customers constitute the

Company’s contracts with customers.

Identifying the performance obligations in the contract or agreement:

The contract with the customer contains a single performance obligation:

fulfilment of the customer’s order.

Determine the transaction price:

The Company’s sales arrangements for pharmaceutical products require a full prepayment from the

customer at a fixed price per unit based on the terms of the invoice with the customer and before the shipment of products.

The transaction

price is the amount that reflects the consideration which the Company expects to receive.

Allocate the transaction price to the separate performance obligations:

All transaction prices are allocated to the single performance

Recognize revenue as each performance obligation is satisfied:

This performance obligation is satisfied when control of the product is

transferred to the customer, which generally occurs upon shipment.

The Company receives orders for products to be delivered over multiple

dates that may extend across reporting periods.

The Company’s accounting policy treats shipping and handling activities as a fulfillment

The Company invoices for each order upon payment and recognizes revenue at the fixed price for each distinct product delivered

when transfer of control has occurred, which is generally upon shipment.

Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled

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

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

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 unaudited condensed consolidated statements of operations during the three months ended March 31, 2026 and

Loss Per Share

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.

accompanying unaudited condensed consolidated financial statements include the accounts of the Company as of June 30, 2026, and December

31, 2025, and for the three and six months ended June 30, 2026, and 2025.

The Company’s condensed consolidated financial statements

have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X and therefore do not include all

information and footnotes necessary for a fair presentation of consolidated financial position, results of operations and cash flows

in conformity with accounting principles generally accepted in the U.S.

GAAP”) and should be read in conjunction with

the audited financial statements of the Company for the year ended December 31, 2025, which are included in the 2025 Annual Report on

Form 10-K, as amended on Form 10-K/A.

interim condensed consolidated financial statements are unaudited, and in the opinion of management, reflect all adjustments, consisting

only of normal recurring adjustments necessary for a fair presentation of results for the periods presented.

The results of operations

for the three and six months ended June 30, 2026, are not necessarily indicative of the results to be expected for the full year due

primarily to the impact of the continued uncertainty of general economic conditions that may impact the Company’s markets for the

remainder of fiscal year 2026.

All intercompany accounts and transactions have been eliminated in consolidation.

Cash Equivalents and Concentrations

and cash equivalents consist of short-term, highly liquid investments with an original maturity of three months or less from the date

of acquisition.

Certain of the Company’s cash and cash equivalents balances exceed Federal Deposit Insurance Corporation (“FDIC”)

insured limits or are invested in money market accounts with investment banks that are not FDIC-insured.

The Company places its cash

and cash equivalents in what it believes to be credit-worthy financial institutions.

At June 30, 2026, and December 31, 2025, cash equivalents

were $ 11,652,779 and $ 0 , respectively.

As of June 30, 2026, and December 31, 2025, the Company had $ 11,320,840 and $ 550,130 , respectively,

in deposits in U.S banks in excess of the FDIC limit.

Concentrations

following table details total revenues by major geographic area for the periods presented:

Schedule of Total Revenues by Major

Geographical Area

For the Three Months Ended

For the Six Months Ended

June 30, 2026

United States

International (1)

Total revenues

(1) International revenues are

defined as revenues generated from sales to customers outside of the U.

customer accounted for approximately 15% of the Company’s total revenues during the six months ended June 30, 2026.

this customer primarily related to a one-time sale and is not expected to represent a recurring source of revenue.

No other customer

accounted for 10% or more of the Company’s total revenues during the period.

consisting of finished goods are stated at the lower of cost or net realizable value with cost determined on a first-in, first-out

Inventories on hand are evaluated on an on-going basis to determine if any items are obsolete, spoiled, or in excess of

future demand.

The Company records an impairment that is charged directly to cost of revenue when it determines the product is

obsolete, spoiled or in excess of future demand, and the Company will not be able to sell it at a normal profit above it carrying

During the three months ended June 30, 2026, the Company determined that $ 42,372

was impaired due to obsolesce and recorded the impairment to inventory write-off included in cost of revenue in the accompanying

unaudited condensed consolidated statements of operations.

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

November 4, 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Updates (“ASU”)

2024-03 , Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-04) —

Disaggregation of Income Statement Expenses (“ASU 2024-03”) , and in January 2025, the FASB issued ASU 2025-01 —

Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Clarifying the Effective

Date (“ASU 2025-01”).

ASU 2024-03 requires additional disclosure of the nature of expenses included in the statement

of operations as well as disclosures about specific types of expenses included in the expense captions presented in the statement of

ASU 2024-03, as clarified by ASU 2025-01, is effective for annual reporting periods beginning after December 15, 2026 and

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

Both early adoption and retrospective application

are permitted.

The Company is currently assessing the impact of this ASU;

however expects to enhance expense disclosures based on the

new requirements.

December 2025, the FASB issued ASU 2025-11 – Interim Reporting (Topic 270):

Narrow-Scope Improvements (“ASU 2025-11”).

ASU 2025-11 clarifies the interim reporting guidance in the Accounting Standards Codification (“ASC”), adding a comprehensive

list of required interim disclosures and a principle that requires entities to disclose events since the end of the last annual reporting

period that have a material impact on the entity.

ASU 2025-11 is effective for interim periods within annual periods beginning after

December 15, 2027, with early adoption permitted.

The Company is currently evaluating these new disclosure requirements.

other ASUs issued and not yet effective as of June 30, 2026, and through the date of this report, were assessed and determined to be

either not applicable or are expected to have minimal impact on the Company’s current or future financial position or results of

Reverse Recapitalization

August 26, 2024, PowerUp Acquisition Corp.

(“PowerUp”) entered into an Agreement and Plan of Merger (as amended from time

to time, the “Merger Agreement”) with PowerUp Merger Sub II, Inc., a Delaware corporation and wholly-owned subsidiary of

the Company (“Merger Sub”), the New Sponsor, Stephen Quesenberry, in the capacity as the seller representative, and Aspire

Biopharma, Inc., a Puerto Rico corporation.

(“PowerUp”) entered into Merger Agreement with PowerUp Merger Sub II, Inc., a

Delaware corporation and wholly-owned subsidiary of the Company (“Merger Sub”), the New Sponsor, Stephen Quesenberry, in

the capacity as the seller representative, and Aspire Biopharma, Inc., a Puerto Rico corporation.

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.

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

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.

Also, prior to the Closing

Date, Aspire Biopharma, Inc deregistered as a Puerto Rican entity and domesticated as a Delaware corporation (the “Aspire Domestication”)

in accordance with Section 3746 of the Puerto Rico General Corporations Act (as amended) and Section 388 of the Delaware General Corporation

Pursuant to the Aspire Domestication, Aspire’s jurisdiction of incorporation was changed from Puerto Rico to the State of

In connection with the Aspire Domestication, all issued and outstanding shares of Aspire’s pre-domestication voting common

stock, Series A preferred stock, and any unconverted warrants automatically converted, on a one-for-one basis, into shares of the post-domesticated

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

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.

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,

who is the legal acquirer, was treated as the “acquired” company for financial reporting purposes and Aspire Biopharma, Inc

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

prior to the Closing Date, Aspire Biopharma, Inc.

deregistered as a Puerto Rican entity and domesticated as a Delaware corporation

(the “Aspire Domestication”).

In connection with the Aspire Domestication, all issued and outstanding shares of

Aspire’s pre-domestication voting common stock, Series A preferred stock, and any unconverted warrants automatically

converted, on a one-for-one basis, into shares of the post-domesticated entity’s common stock, Series A preferred stock, and

warrants, respectively.

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

Under this method of

accounting, PowerUp, who is the legal acquirer, was treated as the “acquired” company for financial reporting purposes

and Aspire Biopharma, Inc.

was treated as the accounting acquirer.

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

Accordingly, for accounting purposes, the Reverse

Recapitalization was treated as the equivalent of a capital transaction in which Aspire issued 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.

the closing of the Reverse Recapitalization, the Company received gross proceeds of $ 811,370 , offset by total transaction costs of $ 545,543 .

following table reconciles the elements of the Reverse Recapitalization to the unaudited consolidated statement of cash flows and the

unaudited consolidated statement of changes in stockholders’ deficit:

of Reconciles the Elements of the Business Combination

Cash-trust and cash, net of redemptions

transaction costs, paid

Net proceeds from the Reverse Acquisition

Net proceeds from the Reverse Recapitalization

Accounts payable, Accrued liabilities and Other current liabilities combined

4 unchanged sentences

( 1,828,098 )

Loan and transfer note payable combined

Loan and transfer notes payable combined

Forward purchase agreement liability combined

2 unchanged sentences

$ ( 4,602,576 )

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

following table summarized the number of shares of common stock issued and outstanding immediately following the consummation of the

Reverse Recapitalization:

Schedule of Consummation of the Business Combination

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

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

Redemption of PowerUp Class A common stock

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

Aspire Biopharma, Inc Shares

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

Total Reverse Recapitalization Class A common stock, before giving effect to Reverse Splits (see Note 1.

Description of Organization and Business )

Reverse Recapitalization Class A common stock, after giving effect to the Reverse Splits (see Note 1.

Description of Organization and Business )

Issuance of shares related to working capital agreements

Aspire Biopharma, Inc.

Common Stock immediately after the Reverse Recapitalization, after giving effect to the Reverse Splits (see Note 1.

Description of Organization and Business )

following table summarizes the number of Aspire Biopharma, Inc.

shares after giving effect to the Reverse Splits ( see Note 1.

of Organization and Business ):

of Number of Shares Conversion Ratio

Aspire Biopharma, Inc.

Aspire’s shares after conversion ratio

Common Stock issued to existing Aspire Biopharma, Inc Shareholders

Common stock issued to existing Aspire Biopharma, Inc.

Common stock obligation shares issued

Number of Shares

Number of common shares

and private placement warrants

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

were 14,374,969 Public Warrants issued at the time of the PowerUp’s initial public offering, and 8,199 private placement warrants,

after giving effect to the Reverse Splits ( see Note 1.

Description of Organization and Business ), issued in connection with the

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

outstanding and became warrants of the Company.

Related Party Transaction

and transfer agreements

4 unchanged sentences

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.

As of June 30, 2026, and December 31, 2025, there was $ 0 and $ 250,000 , respectively,

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.

As of June 30, 2026 and December 31, 2025, there was $ 0 and $ 50,000 , respectively,

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.

As of June 30, 2026, and December 31, 2025, there was $ 0 and $ 149,214 , respectively, 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.

As of June 30, 2026 and December 31, 2025, there was $ 0 and $ 50,000 , respectively,

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

condensed consolidated balance sheets.

April 14, 2026 and April 15, 2026, the Company entered into payment agreements with SSVK, Apogee and Sheth, to which the Company settled

in cash the total balance of $ 499,214 , including applicable interest and fees, owed under the Loan and transfer Agreements.

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

New Sponsor, Visiox, VKSS Capital, LLC, an affiliate of, and an entity under common control with, the New Sponsor (the “Affiliate”),

New Sponsor, Visiox, VKS Capital, LLC, an affiliate of, and an entity under common control with, the New Sponsor (the “Affiliate”),

and four separate investors (each, an “Investor”), whereby the Investors collectively contributed to New Sponsor a total

16 unchanged sentences

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.

of commitment fee shares, after giving effect to the Reverse Splits ( see Note 1.

Description of Organization and Business ), 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 and six months ended June 30, 2026, the

Company incurred $ 0

and $ 250,000 ,

respectively, in interest expense on the Subscription Agreements which is included in accrued expenses on the accompanying unaudited

condensed consolidated balance sheet.

In January 2026 the Subscription Agreement Loans, along with $ 266,917

of interest and fees, were converted into common stock of the Company.

At June 30, 2026, and December 31, 2025,

and $ 1,500,000 ,

respectively, were outstanding under these agreements and is included in subscription agreement loan balance 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.

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, 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 previous target, Visiox.

As consideration for the foregoing,

PowerUp 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 with Aspire.

April 2026, Srirama Associates, LLC filed a lawsuit in the Superior Court of the State of Delaware alleging breach of contract in

connection with the modified Promissory Note Fee Agreement.

The complaint sought not less than $ 1,000,000

in damages, plus interest and costs.

The Company disputed the claim and filed a motion to dismiss on May 11, 2026.

On June 29, 2026,

the claim was dismissed with prejudice by the Superior Court of the State of Delaware and the liability of $ 1,000,000

was written off and included in gain on extinguishment of debt on the unaudited condensed consolidated statements of

February 17, 2025, in conjunction with the closing of the business combination, the Company had placed on its books $ 353,679

of liabilities claimed by the Sponsor of PowerUp, Srirama Associates, LLC, for alleged administrative services fees.

legal doctrine of res judicata (as a consequence of the above-referenced Sponsor lawsuit being dismissed with prejudice) on June 29,

2026, and after careful investigation of the alleged basis for the claimed administrative services fees, $ 353,679

was written off and included in gain (loss) on extinguishment of debt on the unaudited condensed consolidated statements of

As of June 30, 2026 and December 31, 2025, the balance of $ 0

and $ 353,679 ,

respectively, is recorded in due to affiliate on the unaudited condensed consolidated balance sheets.

payable – related party

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

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”)

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 .

The notes were due the earlier of June 27, 2025 (9 months from

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

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”).

2 unchanged sentences

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

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 Notes ).

The balance of $ 591,692 on the notes payable-related party was repaid during the six months ended June 30, 2026.

For the three months ended June 30, 2026, and 2025, total amortized debt discount of $ 0 and $ 68,733 , respectively, and for the six months

ended June 30, 2026 and 2025, total amortized debt discount $ 0 and $ 139,052 , respectively, was included in interest expense on the accompanying

unaudited condensed consolidated statements of operations.

6 unchanged sentences

was unsecured.

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.

The balance of $ 293,872 on the notes payable- related party was repaid during the six months ended June 30, 2026.

the three months ended June 30, 2026, and 2025, total amortized debt discount of $ 0 and $ 4,121 , respectively, and for the six months

ended June 30, 2026, and 2025, total amortized debt discount of $ 0 and $ 8,379 , respectively, was included in interest expense on the

accompanying unaudited condensed consolidated statements of operations.

following table reflects the total balances of the Notes payable – related party for the periods presented.

Schedule of Note Issuance

Issuance date

March 31, 2026

June 30, 2026

December 31, 2025

1 unchanged sentence

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

Purchase Agreement

2025 Securities Purchase Agreement

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

Alternative Capital Strategies, LLC, an entity controlled by the Company’s former Director of Investor Relations, Lance Friedman,

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

whose services were provided through a consulting agreement with Blackstone Capital Advisors, Inc.

that was terminated effective February

1 unchanged sentence

Under the Securities Purchase Agreement, the Company

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

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

aggregate principal amount of $ 3,750,000 which included 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 Recapitalization, 1,755 of commitment fee shares, after giving effects to the Reverse

Splits ( see Note 1.

Description of Organization and Business ), was due to the Investors under these agreements were transferred

by Affiliates to the Investors.

Company analyzed 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 825”).

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 Carlo

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 ,

For the three

and six months ended June 30, 2026, the change in fair value was $ 0 and $ 211,443 , respectively.

For the three and six months ended June

30, 2025, the change in fair value was $ 187,500 and $ 274,038 , respectively, and is included the in the change in fair value of derivative

liabilities and convertible notes on the unaudited condensed consolidated statements of operations.

January 2026, the remaining balance of $ 943,801 was converted into 974 shares of Series A Convertible Preferred Stock.

At June 30, 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.

2025 Securities Purchase Agreement

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

8 unchanged sentences

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

into such number of shares of Common Stock as shall be determined by dividing (x) that portion identified by the Purchaser of (A) the

outstanding principal amount, plus (B) accrued and unpaid interest with respect to such outstanding principal amount of such Purchaser’s

Note and any other amounts owing under such Note or other Transaction Documents (the as that term is defined in the Notes) by (y) the

conversion price then in effect on the date on which the Purchaser delivers a notice of conversion.

The conversion price means the greater

of (i) eighty (80%) percent of the lowest Closing Price on any Trading Day during the five (5) Trading Days prior to the applicable conversion

date or (ii) the floor price (the “Floor Price”).

The Floor Price means 20% of the average closing price of the Company’s

Common Stock for the five days prior to the Closing Date.

August 2025 Notes may not be converted and shares of Common Stock may not be issued under Notes if, after giving effect to the conversion

or issuance, such Purchaser (together with its affiliates, if any) would beneficially own in excess of 4.99% of our outstanding shares

of our Common Stock, which we refer to herein as the “Note Blocker”.

The Note Blocker may be raised or lowered to any other

percentage not in excess of 9.99% at the option of the applicable Purchaser of Notes, except that any raise will only be effective upon

61-days’ prior notice to us.

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.

to the Reverse Splits ( see Note 1.

Description of Organization and Business ) (the “Conversion Shares”) subject to

certain conditions.

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.

of the Company after giving effects to the Reverse Splits ( see Note 1.

Description of Organization and Business ).

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 ( see Note

Description of Organization and Business ).

At June 30, 2026, and December 31, 2025, the balance of the August 2025 Notes, net

of unamortized debt discount was $ 0 and $ 144,240 , respectively, and is included in convertible notes on the unaudited condensed consolidated

balance sheets.

2026 Securities Purchase Agreement

12 unchanged sentences

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.

At contract inception, an assessment

of the products and services promised in the contracts with customers is performed and a performance obligation is identified for each

distinct promise to transfer a product to the customer.

To identify the performance obligations, the Company considers the products promised

per the invoice regardless of whether they are explicitly stated or are implied by customary business practices.

performance obligation is considered to be fulfilled upon the shipment of the products.

At each reporting period, any invoiced sales

that have not yet shipped is recorded as 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

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

For the Three Months Ended

March 31, 2026

United States

Total revenues

of the Company’s common stock as incentive shares, after giving effects to the Reverse Splits ( see Note 1.

Description of Organization

and Business ).

The Debentures were repaid in February 2026.

For the three and six months ended June 30, 2026, total amortized debt

discounts of $ 0 and $ 173,913 , respectively, was included in interest expense on the accompanying unaudited condensed consolidated statements

of operations.

Commitments and Contingencies

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

holders of the Private Placement Warrants and Public 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.

4 unchanged sentences

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

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.

8,199 Private Placement Warrants, after giving effects to the Reverse Splits ( see Note 1.

Description of Organization and Business ).

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

Line of Credit (“ELOC”) Agreement

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.

AG/RA SA 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

2 unchanged sentences

(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

In consideration for the 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 Agreement.

Company issued 2,510 shares of common stock after giving effects to the Reverse Splits ( see Note 1.

Description of Organization and

Business ) to Arena in November and December 2025 and an additional 207 true up shares in January 2026, after giving effects to the

Reverse Splits ( see Note 1.

Description of Organization and Business ), representing payment of the commitment fee shares.

the three and six months ended June 30, 2026, the change in fair value totaled $ 275 and $ 865 , respectively, and was included as an expense

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

there was no change in fair value for the same period of 2025.

At June 30, 2026, and December 31, 2025, the fair value of the forward

purchase agreement liability related to the Second ELOC Agreement totaled $ 96,527 and $ 95,662 , respectively, and is 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 June 30, 2026.

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

12 unchanged sentences

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

As of March 31, 2026, the

As of June 30, 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.

June 10, 2026, the Company entered into a purchase agreement (the “Purchase Agreement”) with FireFish TopCo, LLC (the “Seller”,

and, collectively with its Subsidiaries listed in the Purchase Agreement, “Sellers”), pursuant to which (i) the Seller

agreed to sell, and cause the applicable Sellers to sell, and the Company agreed to purchase or cause certain of its Affiliates to purchase,

all of the equity interests in certain of Seller’s subsidiaries of the Purchase Agreement (the aforementioned

equity interests, collectively, the ‘Transferred Equity Interests”, and such subsidiaries, “Transferred Entities”),

free and clear of all Liens, other than the Permitted Liens and in accordance with the applicable Local Transfer Documents and (ii) the

Seller agreed to sell, and cause the applicable Sellers to sell, and the Company agreed to purchase, or cause certain of its affiliates

to purchase, all of the assets of the other Business Entities as defined as Transferred Entities, DUS Operating Inc.

with respect to

Enterprise and Automotive Czech with respect to the KOP Enterprise constituting the balance of the Business as defined as the

business of designing, manufacturing, marketing and selling automotive systems that facilitate electronic driver control and the migration

toward vehicle electrification, safety, light weighting and sustainability, as conducted by the Transferred Entities on June 10,2026,

and in respect to (a) Automotive Czech, the business conducted by the KOP Enterprise and (b) DUS Operating Inc., the business conducted

Price and Consideration:

As consideration for such purchase, the Company agreed to pay the Seller (or one or more of its designated

other Sellers or Affiliates) at least two (2) Business Days prior to the date of Closing (“Closing Date”) an amount equal

(i) $30,000,000 (the “Purchase Price”) plus (ii) $800,000 in respect of deferred revenue of the Business Entities (such

$800,000 representing an agreed upon fixed credit for the deferred revenue, regardless of the actual amount of the deferred revenue),

minus (iii) any Income Tax obligations of the Transferred Entities net of any Income Tax receivables, minus (iv) Indebtedness of the

Transferred Entities as of the closing (such final amount, the “Closing Purchase Price”).

The Purchase Price will be allocated

among the Transferred Entities and/or business units as set forth in the Purchase Agreement.

To the extent relevant under

applicable Tax Law, the Purchase Price associated with each Transferred Entity and/or business unit will be further allocated among the

assets of such Transferred Entities in a manner consistent with Section 1060 of the Internal Revenue Code.

On August 6, 2026, the Company entered into an Escrow and Closing Agreement pursuant to which the parties acknowledged

and agreed that all conditions to the closing of the transactions per the Purchase Agreement had been satisfied.

( see Note 11.

Letter for Credit Facility

May 2026, the 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 to $ 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 Dura Driver Control Systems (“DCS”).

The Company does not anticipate procuring any new equity raise to consummate the

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.

the three and six months ended June 30, 2026, $ 75,000 of upfront fee paid to the financial institution is included in deferred financing

cost on the unaudited condensed consolidated balance sheets.

Company is and may be subject to various claims, lawsuits and proceedings in the ordinary course of the Company’s business.

matters are subject to many uncertainties and outcomes are not predictable with assurance.

While there can be no assurances as to the

ultimate outcome of any legal proceeding or other loss contingency involving the Company, in the opinion of management, such claims are

either adequately covered by insurance or otherwise indemnified, or are not expected individually or in the aggregate, to result in a

material, adverse effect on the Company’s financial condition, results of operations or cash flows.

However, it is possible that

the Company’s results of operations, financial position and cash flows in a particular period could be materially affected by these

contingencies.

April 2026, Srirama Associates, LLC filed a lawsuit in the Superior Court of the State of Delaware alleging breach of contract in

connection with the modified Promissory Note Fee Agreement.

The complaint sought approximately $ 1,000,000

in damages, plus interest and costs.

The Company disputed the claim and filed a motion to dismiss on May 11, 2026.

On June 29, 2026,

the claim was dismissed with prejudice by the Superior Court of the State of Delaware and the liability of $ 1,000,000

was written off and included in gain (loss) on extinguishment of debt in the unaudited condensed consolidated statements of

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

4 unchanged sentences

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”).

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

to the Certificate of Designation on February 6, 2026, subject to Stockholder Approval (as defined below), each share of Preferred Stock

19 unchanged sentences

the shareholder approval required by Nasdaq Listing Rule 5635(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”)

20 unchanged sentences

and may be subject to limitations agreed upon by the contracting parties.

A Convertible Preferred Stock Issuance

to the terms of the February 2026 Securities Purchase Agreement, 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 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 Convertible 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 Convertible 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 the authorized and unissued preferred stock as Series A Convertible Preferred Stock.

On April 13, 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 Convertible 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.

the three months ended June 30, 2026, holders of the preferred stock converted 9,200

shares of Series A Convertible Preferred Stock into 1,122,764 ,

shares of common stock.

The Company had 17,050

shares of Series A Convertible Preferred Stock outstanding at June 30, 2026.

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

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