What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-11 compared with 2025-03-28 · 157 added, 136 removed, 252 unchanged (54% of the section changed)

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relationships, and currently trades on the NYSE American under ticker symbol IBO.

leveraging technology and new science with strategic partnerships, we provide advances in biopharmaceuticals, over the counter direct

to consumer wellness offerings, and drug discovery for the prevention, inhibition, and treatment of neurological, oncologic, and inflammatory

In addition to our existing efforts, we continually search for, and evaluate, other potential new offerings to add to our portfolio.

business model includes partnering and potentially direct sales for commercialization and distribution.

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BioLife Science, Inc .

Biomedical, Inc.;

BioLife, Inc.;

BioLife Science, Inc .

We are the sole owner of the outstanding equity of Impact BioLife Science, Inc.

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BioLife, Inc .

Through our majority owned subsidiary Global Biomedical, Inc., we own 81.8% of the outstanding equity of Global

BioLife, Inc.

We are the owner of 95.5% of the outstanding equity of Sweet Sense.

Through our majority owned subsidiary Global Biomedical, Inc., we own 81.8% of the issued and outstanding common

stock of Global BioLife, Inc.

We own of 95.5% of the issued and outstanding common stock of Sweet Sense.

BioMedical has several unique and proprietary technologies that are in continuing development.

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to sugar, could result in 30% lower sugar consumption and lower caloric and glycemic index/load.

has a unique composition patent allowed in the United States and patents are pending in other countries worldwide.

has a unique composition patent allowed in the United States and other countries worldwide.

is actively seeking potential partners for further development and commercialization of Laetose as a consumer-packaged or biopharmaceutical

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manufacturer of fragrances and flavors.

addition to Chemia, IBO is actively seeking potential partners for further development and commercialization of 3F worldwide, given

the broad application of this technology.

addition to Chemia, IBO is actively seeking potential partners for further development and commercialization of 3F worldwide, given the

broad application of this technology.

patents have been issued in the U.S.

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will result in a material transaction and this is exemplary of consistent and ongoing search and discovery efforts within Impact Biomedical

information in the two paragraphs below does not assume or give effect to (1) a 1:55 reverse split of the Company’s outstanding

common stock and (2) an exchange by a shareholder of common stock for Series A Convertible Preferred Stock.

Company was incorporated in the State of Nevada as a for-profit company on October 16, 2018, and established a fiscal year end of December

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that do not qualify for separate recognition, and a deferred tax liability of approximately $5,234,000.

The goodwill is not deductible

for tax purposes and has been allocated to Impact BioMedical in totality as a single reporting unit.

The Company is committed to both

funding research and developing intellectual property portfolio.

License revenue

- The Company has not generated revenue for the years ended December 31,

2024 or 2023.

ended December 31, 2024

During the Company’s annual review of goodwill, it was deemed necessary to impair it in full during the year

ended December 31, 2024.

Sales, general and administrative

December 31, 2025

December 31, 2024

Biotech retail sales

Total Revenue

- Consists of sales of the Company’s retail sales of its Celios air purification technology.

It includes online and third

party distributor sales.

This is a new product line acquired in February of 2025 via the Company’s transaction with DSS PureAir

(see Note 10).

December 31, 2025

December 31, 2024

Cost of revenue

Sales, general and administrative compensation

Stock-based compensation

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Rent and utilities

Impairment of fixed assets

Impairment of goodwill

Impairment of fixed assets

Loss on disposal of fixed assets

Other operating expenses

costs and expenses

general and administrative compensation costs increased 122% for the year ended December 31, 2024, as compared to the year ended

December 31, 2023 due to increases in head count at the Company due to increased cost incurred associated with the Company’s registration

with the SEC and the NYSE American, and efforts toward the Company’s IPO.

Total costs and expenses

of revenue includes all direct costs of the Company’s retail sales of its Celios air purification technology.

It includes online

and third party distributor sales and consists of materials, and transportation costs.

This asset was acquired during the first quarter

of 2025 and the Company did not incur any related costs in 2024.

At December 31, 2025, approximately $419,000 of Celios inventory was impaired.

general and administrative compensation costs increased 23% for the year ended December 31, 2025, as compared to the year ended December

31, 2024 due to additional headcount year over year as well as bonuses paid or accrued for certain Company personnel.

based compensation includes expense charges for all stock-based awards to employees, directors, and consultants.

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include option grants, warrant grants, and restricted and unrestricted stock awards.

These types of awards were not used prior to the

Company’s IPO in September 2024.

and marketing costs, which includes internet and trade publication advertising, travel and entertainment costs, sales-broker commissions,

and trade show participation expenses, increase 874% during 2024 as compared to 2023, primarily due to increased associated with cost

to attend trade shows and marketing efforts pre and post IPO

fees decreased 38% for the year ended December 31, 2024, as compared to year ended December 31, 2023.

and marketing costs, which includes internet and trade publication advertising, press releases, travel and entertainment costs.

decreased 96% for the year ended December 31, 2025 as compared to the year ended December 31, 2024 due to Company efforts to reduce travel,

marketing and entertainment costs.

fees increased 125% for the year ended December 31, 2025, as compared to year ended December 31, 2024.

These costs consist primarily

of consulting and legal services associated with developing and implementing Impact BioMedical’s business plan, These costs decreased

in 2024 in anticipation of the Company’s IPO.

of consulting and legal services associated with developing and implementing Impact BioMedical’s business plan, these costs increased

in 2025 as the Company began to enact its business plan post IPO as well as due diligence in connection with potential mergers and/or

acquisitions.

and development costs represent costs consisting primarily of independent, third-party testing of the various properties of each

technology the Company owns possesses as well as research on new technologies.

Research and development decreased 84% for the year ended

December 31, 2024, as compared to year ended December 31, 2023 due to several cost-cutting activities inclusive of the cessation of the

Company’s research and development contract with GRDG at the end of 2023.

and amortization expense remained flat for year ended December 31, 2024 compared to year ended December 31, 2023 and represents the

amortization of the associated with the developed technology and patents acquired as part of the acquisition of Impact BioMedical by

Amortization of these assets began on January 1, 2021, and will have a 20-year term.

Research and development increased 22% for the year ended

December 31, 2025, as compared to year ended December 31, 2024 due to costs incurred on existing and developing patents.

and amortization expense increased 2% for year ended December 31, 2025 compared to year ended December 31, 2024 and represents the

amortization of the associated with the developed technology and patents as well as the amortization of the Celios patents acquired during

the first quarter of 2025.

and utilities represents cost associated with office space located at 1400 Broadfield Blvd, Suite 100 Houston TX which the Company

began subletting from DSS during the first quarter of 2024.

Impairment of fixed asset is

the impairment of marketing assets in development that the Company decided to forego completion.

During the forth quarter of 2024, the Company increased the amount of space sublet from DSS, driving the increase

year over year.

of goodwill during the 4th quarter of 2024, the Company performed qualitative and quantitative assessments of the goodwill value

associated with the Company determined that as of December 31, impairment was required (see Note 7).

associated with the Company determined that as of December 31, impairment was required.

of fixed asset is the impairment of marketing assets in development that in 2024 the Company decided to forego

Loss on disposal of fixed assets represents

the net book value of certain assets of the Company that were disposed of during the year ended December 31, 2025.

operating expenses consist primarily of office supplies, IT support, sales and marketing costs, travel and insurance costs.

costs increased 44% for year ended December 31, 2024, as compared to year ended December 31, 2023, primarily due to increased IT support

and travel costs.

Income (Expense)

costs increased 144% for year ended December 31, 2025, as compared to year ended December 31, 2024, due primarily to increases in directors

and officers insurance obtained post IPO as well as incurring third party warehousing cost associated with storage of the Company’s

Celios technology acquired during Q1 of 2025.

(Expense) Income

December 31, 2025

December 31,2024

Interest income

Other income (expense)

Change in fair value of note payable, related

Change in fair value of note payable, related party

Interest expense

other income (expense)

Total other (expense) income

$ (10,168,000 )

income is recognized on the Company’s notes receivables.

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compared to the year ended December 31, 2024 as the outstanding principal balance remained flat.

income represents income generated from the Company’s distribution agreement with BioMed Technologies (“BioMed”).

during the first quarter of 2023.

BioMed’s products focus on natural probiotics.

in fair value of note payable, related party is related to the promissory note with DSS (“DSS Note”).

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the option to settle the Note in either cash or shares of the Company’s common stock, subject to certain conditions.

In accordance with

ASC 480, Distinguishing Liabilities and Equity, and ASC 825, Financial Instruments, the Company remeasured the fair value

of the DSS Note as of the modification date and again as of December 31, 2024.

As a result, the Company recognized a fair value adjustment

of $5,068,000 for the year ended December 31, 2024 (see Note 9).

expense is recognized on the Company’s debt to DSS increased year over year due to the increase in debt balance year over year.

In accordance

with ASC 480, Distinguishing Liabilities and Equity, and ASC 825, Financial Instruments, the Company remeasured the fair value of the

DSS Note as of the modification date and again as of December 31, 2025.

As a result, the Company recognized a fair value adjustment (loss)

of $9,388,000 for the year ended December 31, 2025 as compared to a gain of $5,068,000 for the year ended December 31, 2024 (see Note 9).

expense is recognized on the Company’s debt to DSS decreased year over year due to debt being converted to equity in October

December 31, 2025

December 31, 2024

$ (11,870,000 )

$ (24,770,000 )

the year ended December 31, 2024, the Company recorded net loss of $24,770,000, as compared to a net loss of $4,407,000 for the year

ended December 31, 2023.

The increase in net loss over year is attributable to the Company’s impairment of

goodwill as of December 31, 2024 offset by cost cutting measures in taken with both its professional and research and development

costs as the Company shifts efforts to taking to market its existing technologies as well as the change in fair value of with the

amended Note payable, related party.

the year ended December 31, 2025, the Company recorded net loss of $11,870,000, as compared to a net loss of $24,770,000 for the

year ended December 31, 2024.

Net loss for the year ended December 31, 2025 loss is attributable to the Company’s cost

associated with additional head count, the incurring 12 months of directors’ and officers’ insurance post IPO, the increase in

professional fees associated with the execution of the Company’s business plan, As well as the fair value adjustment (loss) on

the Note payable, related party.

The decrease in net loss over year is attributable to the Company’s impairment of goodwill as

of December 31, 2024 offset the change in fair value (gain) of the amended Note payable, related party.

Further, The company recorded a tax benefit

of $2,580,000 for the tax year ending December 31, 2025.

(See Note 11)

and Capital Resources

accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

of accounting contemplates the recovery of our assets and the satisfaction of liabilities in the normal course of business.

in the accompanying financial statements the Company has incurred operating losses as well as negative cash flows from operating activities

over the past two years.

These factors raise substantial doubt about the Company’s ability to continue as a going concern within

one year of the date that the financial statements are issued.

These consolidated financial statements do not include any adjustments

to the specific amounts and classifications of assets and liabilities, which might be necessary should we be unable to continue as a

going concern.

Company has historically met its liquidity and capital requirements primarily through debt financing.

On September 16, 2024, the Company

completed an initial public offering raising $3,726,000 net of issuance costs and is currently listed on the NYSE American under the

ticker symbol IBO.

The Company’s management intends to take additional actions necessary to continue as a going concern.

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Flow from Operating Activities

cash used by continuing operating activities was $3,919,000 for the year ended December 31, 2024 as compared to cash used for

operating activities of $2,851,000 for the year ended December 31, 2023.

This increase is driven by the increase in Operating loss

adjusted for reconciling items from operations of approximately $300,000 year over year as well as the decrease in accounts payable and

the increase of prepaid expenses and other current assets.

Net cash used by operating activities was $1,890,000 for the year ended

December 31, 2025 as compared to cash used by operating activities of $2,854,000 for the year ended December 31, 2024.

This decrease driven

by a reduction in prepaid and other current assets of approximately $391,000, as well as a reduction in cash outlay for accounts payable

of approximately $906,000.

Flow from Investing Activities

cash provided by investing activities was $2,000 for the year ended December 31, 2024 as compared to net cash used of $15,000 for the

year ended December 31, 2023.

This fluctuation is driven by the purchase of property, plant and equipment of $18,000 during the year

ended December 31, 2023 without similar activities during 2024.

cash provided by investing activities was $3,000 for the year ended December 31, 2025 as compared to $2,000 for the year ended December

This activity remains flat and is associated with interest collected on a Company’s notes receivable.

Flow from Financing Activities

cash provided by financing activities for the year ended December 31, 2024 was $5,915,000 and represents $2,189,000 in borrowings from

DSS and $3,726,000 in proceeds from the Company’s IPO, net of issuances costs.

Net cash provided by financing activities for the

year ended December 31, 2023 was $2,865,000 and represents borrowings from DSS.

Net cash used by financing activities for the year ended December 31, 2025

was $109,000 and represents borrowings from DSS of $184,000, offset by payments of $293,000.

Financing activities for the year ended December

31, 2024 represents $1,124,000 in borrowings from DSS and $3,726,000 in proceeds from the Company’s IPO, net of issuances costs.

Operations and Going Concern

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of accounting contemplates the recovery of our assets and the satisfaction of liabilities in the normal course of business.

in the accompanying financial statements the Company has incurred operating losses as well as negative cash flows from operating activities over the past two years.

These factors raise substantial doubt about the Company’s ability to continue as

a going concern within one year of the date that the financial statements are issued.

These consolidated financial statements do not

include any adjustments to the specific amounts and classifications of assets and liabilities, which might be necessary should we be

unable to continue as a going concern.

continue as a going concern, the Company completed an initial public offering on September 16, 2024 raising $3,726,000 net of issuance

costs and is currently listed on the NYSE American under the ticker symbol IBO.

The Company’s management intends to take additional

actions necessary to continue as a going concern.

Management’s plans concerning these matters include, among other things, monetization

of its intellectual properties, and tightly controlling operating costs.

in the accompanying financial statements the Company has incurred operating losses as well as negative cash flows from operating activities

over the past two years.

These factors raise substantial doubt about the Company’s ability to continue as a going concern within

one year of the date that the financial statements are issued.

These consolidated financial statements do not include any adjustments

to the specific amounts and classifications of assets and liabilities, which might be necessary should we be unable to continue as a

going concern.

continue as a going concern, the Company is exploring several options to raise capital including but not limited to, capital raises

via its listing on the NYSE American under the ticker symbol IBO as well as debt financing.

The Company’s management intends to take additional actions

necessary to continue as a going concern.

Management’s plans concerning these matters include, among other things,

monetization of its intellectual properties, and tightly controlling operating costs.

Sheet Arrangements

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its carrying value as the stated interest rate reflects recent market conditions.

in equity securities with a readily determinable fair value, not accounted for under the equity method, are recorded at fair value with

unrealized gains and losses included in earnings.

For equity securities without a readily determinable fair value, the investment is

recorded at cost, less any impairment, plus or minus adjustments related to observable transactions for the same or similar securities,

with unrealized gains and losses included in earnings.

equity method investments, the Company regularly reviews its investments to determine whether there is a decline in fair value below

If there is a decline that is other-than-temporary, the investment is written down to fair value.

is the excess of cost of an acquired entity over the fair value of amounts assigned to assets acquired and liabilities assumed in a business

Goodwill is subject to impairment testing at least annually and will be tested for impairment between annual tests if an

event occurs or circumstances change that would indicate the carrying amount may be impaired.

FASB ASC Topic 350 provides an entity with

the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination

that it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

Some of the qualitative factors

considered in applying this test include consideration of macroeconomic conditions, industry and market conditions, cost factors affecting

the business, and overall financial performance of the business.

If, after completing the assessment, it is determined that it is more

likely than not that the fair value of a reporting unit is less than its carrying value, the Company will proceed to a quantitative test.

If qualitative factors are not deemed sufficient to conclude that the fair value of the reporting unit more likely than not exceeds its

carrying value, then a one-step approach is applied in making an evaluation.

The evaluation utilizes multiple valuation methodologies,

including a market approach (market price multiples of comparable companies) and an income approach (discounted cash flow analysis).

The computations require management to make significant estimates and assumptions, including, among other things, selection of comparable

publicly traded companies, the discount rate applied to future earnings reflecting a weighted average cost of capital, and earnings growth

The Company believes the estimates and assumptions used in our impairment assessments are reasonable and based on available

market information, but variations in any of the assumptions could result in materially different calculations of fair value and determinations

of whether or not an impairment is indicated.

A discounted cash flow analysis requires management to make various assumptions about future

sales, operating margins, capital expenditures, working capital, and growth rates.

Cash flow projections are derived from one-year budgeted

amounts plus an estimate of later period cash flows, all of which are determined by management.

Subsequent period cash flows are developed

for each reporting unit using growth rates that management believes are reasonably likely to occur.

Impairment of goodwill is measured

as the excess of the carrying amount of goodwill over the fair values of recognized and unrecognized assets and liabilities of the reporting

Impairment testing was performed as of December 31, 2024 and the Company deemed it appropriate to fully impair goodwill as of December

is the excess of cost of an acquired entity over the fair value of amounts assigned to assets acquired and liabilities assumed in a

business combination.

FASB ASC Topic 350 provides an entity with the option to first assess qualitative factors to determine whether

the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting

unit is less than its carrying amount.

Some of the qualitative factors considered in applying this test include consideration of

macroeconomic conditions, industry and market conditions, cost factors affecting the business, and overall financial performance of

the business.

If, after completing the assessment, it is determined that it is more likely than not that the fair value of a

reporting unit is less than its carrying value, the Company will proceed to a quantitative test.

If qualitative factors are not

deemed sufficient to conclude that the fair value of the reporting unit more likely than not exceeds its carrying value, then a

one-step approach is applied in making an evaluation.

The evaluation utilizes an income approach (discounted cash flow analysis).

The computations require management to make significant estimates and assumptions, including, among other things, selection of

comparable publicly traded companies, the discount rate applied to future earnings reflecting a weighted average cost of capital,

and earnings growth assumptions.

The Company believes the estimates and assumptions used in our impairment assessments are

reasonable and based on available market information, but variations in any of the assumptions could result in materially different

calculations of fair value and determinations of whether or not an impairment is indicated.

A discounted cash flow analysis requires

management to make various assumptions about future sales, operating margins, capital expenditures, working capital, and growth

Cash flow projections are derived from one-year budgeted amounts plus an estimate of later period cash flows, all of which

are determined by management.

Subsequent period cash flows are developed for each reporting unit using growth rates that management

believes are reasonably likely to occur.

Impairment of goodwill is measured as the excess of the carrying amount of goodwill over

the fair values of recognized and unrecognized assets and liabilities of the reporting unit.

Projected cash flows, evaluated using a

26.3% discount rate and 3.0% terminal growth, indicated equity fair value far below the carrying amount, driven by limited

historical revenues and sustained operating losses.

Additional working-capital and related-party debt balance considerations further

reduced equity value in the analysis.

Taken together, these factors constituted triggering events and supported recording a goodwill

impairment in the amount of $25,093,000 as of December 31, 2024 representing the full goodwill balance.

Goodwill is $0 as of December

estimated fair values of acquired intangibles are generally determined based upon future economic benefits such as earnings and cash

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going concern.

continue as a going concern, the Company completed an initial public offering on September 16, 2024 raising $3,726,000 net of issuance

costs and is currently listed on the NYSE American under the ticker symbol IBO.

The Company’s management intends to take additional

actions necessary to continue as a going concern.

Management’s plans concerning these matters include, among other things, monetization

of its intellectual properties, and tightly controlling operating costs.

To continue as a going concern, the Company is exploring

several options to raise capital including but not limited to, capital raises via its listing on the NYSE American under the ticker symbol

IBO as well as debt financing.

The Company’s management intends to take additional actions necessary to continue as a going concern.

Management’s plans concerning these matters include, among other things, monetization of its intellectual properties, and tightly

controlling operating costs.

Company has adopted ASC Topic 606 , Revenue from Contracts with Customers (“Topic 606”).

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amount of the transaction price that is allocated to the respective performance obligation when or as the performance obligation is satisfied

at a specific point in time.

Company recognizes its revenue on the sale of its Celios technology based on when the product is shipped to the customer.

measured as the amount of consideration the Company expects to receive in exchange for shipped product.

Sales and other taxes billed

and collected from customers are excluded from revenue.

7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis