What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-03-28 compared with 2024-02-20 · 200 added, 176 removed, 188 unchanged (67% of the section changed)

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Biomedical Inc.

(IBIO) discovers, confirms, and patents unique science and technologies which can be developed into new offerings in

human healthcare and wellness in collaboration with external partners through licensing, co-development, joint ventures, and other relationships.

By leveraging technology and new science with strategic partnerships, Impact Bio provides advances in drug discovery for the prevention,

inhibition, and treatment of neurological, oncology and immuno-related diseases.

Other exciting technologies include natural compositions

for over-the-counter upper respiratory, anti-viral and other conditions, functional fragrance formulations for use in lotions, insect

repellents, and other consumer products and a unique alternative sugar composition, with potential to impact calorie intake and glycemic

business model of Impact BioMedical includes licensing and potentially direct sales for commercialization and distribution.

licensors and development partners include pharmaceutical, food, consumer package goods companies and others in exchange for milestone,

and royalty licensing payments.

“Impact”, “Impact BioMedical”, “we”, “us”, “our”

or the “Company”) discovers, confirms, and patents unique science and technologies which can be developed into new offerings

in human healthcare and wellness in collaboration with external partners through licensing, co-development, joint ventures, and other

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.

Potential licensors and development

partners include pharmaceutical, consumer packaged goods companies and others, who would commercialize IBO technologies in exchange for

milestone, and royalty payments.

Currently, our operations are conducted, and our assets are owned through our principal subsidiaries:

(i) Global BioLife, Inc.

(“Global BioLife”), which was incorporated on April 14, 2017, (ii) Impact BioLife Science, Inc.

(“Impact BioLife”), which was incorporated on August 28, 2020, (iii) Global BioMedical, Inc.

(“Global BioMedical”),

which was incorporated on April 18, 2017, and (iv) Sweet Sense, Inc.

(“Sweet Sense”), which was incorporated on April 30,

is a list of our principal subsidiaries:

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

our majority-owned subsidiary Global BioLife, we own or have rights to a portfolio of biomedical intellectual property, including intellectual

property assigned to Global BioLife by GRDG Sciences, LLC (“GRDG”).

Global BioLife leverages its scientific know-how and

intellectual property rights to develop various emerging technologies, including biopharmaceuticals, antivirals, antimicrobials, sugar

alternatives, insect repellents, fragrances, bioplastics and natural preservatives.

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

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modified Myricetin, which is a common plant-derived flavonoid.

Myricetin exhibits a wide rand of activities that include strong anti-oxidant,

as well as potential anti-cancer, anti-inflammatory activities (source:

Linebacker can potentially be developed as monotherapy

or co-therapy to down-regulate PIM (proviral integration site for Moloney murine leukemia virus) kinase which plays a key role as an

oncogene in various cancers (e.g.

Myricetin exhibits a wide range of activities that include strong antioxidant

and anti-inflammatory activities (source:

can potentially be developed as monotherapy or co-therapy to down-regulate PIM (proviral integration site for Moloney murine leukemia

virus) kinase which plays a key role as an oncogene in various cancers (e.g.

colon, lung, prostate, breast).

Additional potential applications include inflammatory disorders and

Lineebacker-1 and Linebacker-2 compounds have been licensed to ProPhase Laboratories for development and commercialization

Composition and method patents are issued for Linebacker in the U.S.

and other countries.

compounds from the Linebacker platform (LB-1, LB-2) are licensed to ProPhase Laboratories (PRPH:

NASDAQ) for clinical development and

commercialization for which Impact Biomedical could receive future milestone payments and royalties.

technology is derived from a unique combination of sugar and inositol, which has the potential ability to inhibit the inflammatory and

metabolic response of sugar alone.

Use of Laetose in a daily diet, compared to sugar, could result in 30% lower sugar consumption and

lower caloric and glycemic index/load.

Patents/Intellectual

Property Summary Laetose U.S.

composition and method patent is filed, published, and awaiting issue.

are actively seeking potential partners for further development and commercialization of Laetose as a consumer packaged offering worldwide.

Additional potential applications

include inflammatory disorders and neurology.

and Linebacker-2 compounds have been licensed to ProPhase Laboratories (NASDAQ:

PRPH) for development and commercialization worldwide,

from which Impact Biomedical could receive future milestone and royalty payments.

technology demonstrates compelling potential in reducing caloric intake and glycemic index in foods, while also inhibiting tumor necrosis

factor alpha (TNF-α), a cytokine associated with inflammatory chronic diseases (data on file with IBO).

patented formulation has potential to inhibit the inflammatory and metabolic response of sugar alone and has potential applications in

therapeutic administration to reduce or limit inflammatory or metabolic diseases (e.g., diabetes).

Use of Laetose in a daily diet, compared

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.

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

offering worldwide.

Fragrance Formulation (“3F”)

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as an antimicrobial, or as an additive in insect repellents, detergents, lotions, shampoo, fabrics and other substances to increase effectiveness.

patents have issued in the U.S.

has partnered with the Chemia Corporation (St.

Louis, MO) to pursue development of the 3F technology.

Chemia is a leading developer and

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.

patents have been issued in the U.S.

and are pending in other countries.

are actively seeking potential partners for further development and commercialization of 3F.

Equivir/Equivir

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Polyphenols are

sourced from fruits, vegetables, and other natural substances.

Myricetin is a member of the flavonoid class of polyphenolic compounds

with antioxidant properties.

substances found in many nuts, vegetables, and berries.

Myricetin is a member of the flavonoid class of polyphenolic compounds with antioxidant

Hesperitin is a flavanone and Piperine is an alkaloid, commonly found in black pepper.

and composition patents are issued in the U.S.

and other countries.

Equivir/Equivir

G is licensed to ProPhase Laboratories for development and commercialization worldwide.

continues to explore and discover potential new technologies in accordance with it’s business model.

Areas of interest include

bioplastics, preservatives, biopharmaceuticals and other categories which could result in differentiated and proprietary offerings in

human healthcare.

ProPhase Lab’s initial focus is for use

as an over-the-counter offering for upper respiratory wellness.

Additional applications could be pursued in the future.

and composition patents are issued in the U.S.

and other countries.

BioMedical continually evaluates additional proprietary technologies that are in various phases of development.

These include, and are

not limited to biopharmaceuticals, indoor air quality products, preservatives, bioplastics, personalized medicine (e.g.

genomics, diagnostics),

nanotechnology, cannabis products and technology, pain management, and others.

activities include discussions with potential companies/technologies which, subject to completion of diligence, and approval of the respective

management boards, could potentially expand the offerings of Impact Biomedical Inc.

There is no assurance that anyone, or all, of these

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

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funding research and developing intellectual property portfolio.

December 31, 2023

December 31, 2022

License revenue

Total Revenue

- The year ended December 31, 2022 revenue is associated with milestone payments on our licensing agreement with ProPhase.

such amounts were recorded for the year ended December 31, 2023.

December 31, 2023

December 31, 2022

Sales, general and administrative compensation

Depreciation and amortization

Professional services

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

2024 or 2023.

ended December 31, 2024

ended December 31,2023

Sales, general and administrative

Stock based compensation

Sales and marketing

Professional Fees

Research and development

Depreciation and Amortization

Rent and utilities

Impairment of fixed assets

Impairment of goodwill

Other operating expenses

Total costs and expenses

general and administrative compensation costs decreased 3% for the year-ended December 31, 2023, as compared to the

year ended December 31, 2022 due to decreases in head count at the Company.

and amortization expense increased 1% for year-ended December 31, 2023 compared to year-ended December 31, 2022

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

BioMedical by DSS.

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

fees increased 75% for the year-ended December 31, 2023, as compared to year-ended December 31, 2022 mostly

due to increases in consulting and legal services associated with developing and implementing Impact Biomedical’s business

plan, cost to patent newly developed technologies and other related fees for the development of new technologies.

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.

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

Such awards can

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.

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.

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 6% for the

year-ended December 31, 2023, as compared to year-ended December 31, 2022 due to several cost-cutting activities.

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.

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.

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).

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

costs increased 171% for year-ended December 31, 2023, as compared to year-ended December 31, 2022, primarily due

to increased IT support and travel 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)

December 31, 2022

Interest income

Other income (expense)

Change in fair value of note payable, related

Interest expense

Impairment of investment

Other expense

Total other income (expense)

$ (4,472,000 )

other income (expense)

income is recognized on the Company’s notes receivables.

Interest income decreased 46% for year-ended December 31,

2023 as compared to the year-ended December 31, 2022 due to the assignment of a note receivable to a related party

expense is recognized on the Company’s debt to DSS down year over year due to transfer of a note receivable, and the

related note payable to a related party during 2022.

of investment is the impairment of our Vivacitas investment in the amount of $4,100,000 which took place during the fourth quarter

December 31, 2022

Interest income remained flat for year ended December 31, 2024 as

compared to the year ended December 31, 2023 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”).

During the fiscal

year ended 2024, the Company amended the terms of its outstanding principal balance of the DSS Note.

Previously, the Note required repayment

solely in cash;

however, pursuant to the second amendment executed which went into effect on September 16, 2024, the Company now has

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.

$ (24,770,000 )

$ (4,407,000 )

the year ended December 31, 2023, the Company recorded net losses of $4,407,000, as compared to net losses of $7,255,000

for the year ended December 31, 2022.

The decrease in loses year over year is due primarily to the impairment of our Vivacitas investment during the fourth quarter of 2022.

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.

and Capital Resources

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

As of December 31, 2023, the

Company had cash of approximately $1,000.

As of December 31, 2023, the Company believes that it has sufficient availability to

cash via its revolving promissory note with DSS to meet its cash requirements for at least the next 12 months from the filing date

of this Report.

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.

plans concerning these matters include, among other things, monetization of its intellectual properties, and tightly controlling operating

Flow from Operating Activities

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

This increase is driven by the increase in Operating loss of approximately $624,000 year

over year offset by increase in accounts payable and the utilization of prepaid expenses.

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.

Flow from Investing Activities

cash used by investing activities was $15,000 for the year ended December 31, 2023 as compared to net cash used of $349,000 for the

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 investments approximating $65,000 and purchase of

property, plant and equipment of $276,000 during the year ended December 31, 2022 without similar activities during

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.

Flow from Financing Activities

cash provided by financing activities was $2,865,000 for the year ended December 31, 2023 and represents borrowings from DSS.

During the year ended December 31, 2022, net cash provided by financing activities was driven by borrowings from DSS of $2,547,000.

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.

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 and

investing activities over the past two years.

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

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unable to continue as a going concern.

continue as a going concern, the Company has entered into an updated revolving promissory note which extended the maturity through September

30, 2030, and DSS, Inc.

(“DSS”), the majority shareholder of the Company, intends to continue to fund the operations of the

Company through a year from the date these financial statements were available to be issued.

The Company’s management intends to

take 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.

The Company has increased its efforts to raise additional capital through an

initial public offering.

The Company has engaged an underwriter and has been approved by the NYSE American for listing on its exchange.

However, the Company cannot be certain that such capital (from its stockholders or third parties) will be available to the Company or

whether such capital will be available on terms that are acceptable to the Company.

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.

Sheet Arrangements

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our operations are influenced by general economic conditions, we do not believe that inflation had a material effect on our results of

operations during 2023 or 2022 as we are generally able to pass the increase in our material and labor costs to our customers or absorb

them as we improve the efficiency of our operations.

operations during 2024 or 2023.

Accounting Policies

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

Goodwill 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.

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 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

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 unit.

Intangible Assets

The estimated fair values of acquired intangibles

are generally determined based upon future economic benefits such as earnings and cash flows.

Acquired identifiable intangible assets

are recorded at fair value and are amortized over their estimated useful lives.

Acquired intangible assets with an indefinite life are

not amortized but are reviewed for impairment at least annually as of December 31 st , or more frequently whenever events or

changes in circumstances indicate that the carrying amounts of those assets are below their estimated fair values.

Impairment is tested

under ASC 350.

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

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

Acquired identifiable intangible assets are recorded at fair value and are amortized over their estimated useful lives.

intangible assets with an indefinite life are not amortized but are reviewed for impairment at least annually as of December 31 st ,

or more frequently whenever events or changes in circumstances indicate that the carrying amounts of those assets are below their estimated

Impairment is tested under ASC 350.

No impairment was recognized as of December 31, 2024 or year ended December 31, 2023.

Continuing Operations and Going Concern

Due to incurred operating losses as well as negative

cash flows from operating and investing activities over the past two years, the accompanying consolidated financial statements have been

prepared assuming that the Company will continue as a going concern.

This basis of accounting contemplates the recovery of our assets

and the satisfaction of liabilities in the normal course of business.

Operations and Going Concern

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

To continue as a going concern, the Company has entered into an updated revolving promissory note which extended

the maturity through September 30, 2030, and DSS, Inc.

(“DSS”), the majority shareholder of the Company, intends to continue

to fund the operations of the Company through a year from the date these financial statements were available to be issued.

The Company’s

management intends to take 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.

The Company has increased its

efforts to raise additional capital through an initial public offering.

The Company has engaged an underwriter and has been approved by

the NYSE American for listing on its exchange.

However, the Company cannot be certain that such capital (from its stockholders or third

parties) will be available to the Company or whether such capital will be available on terms that are acceptable to the Company.

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.

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

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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