What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-26 compared with 2025-04-07 · 144 added, 135 removed, 82 unchanged (77% of the section changed)

7 unchanged sentences

and the related notes thereto and other financial information appearing elsewhere in this report.

are a development stage company and reported net losses of approximately $3,233,000 and $4,187,000 for the years ended December 31, 2024

are a development stage company and reported net income (losses) of approximately $2,380,000 and $(3,233,000) for the years ended December

31, 2025 and 2024, respectively.

We had current assets of approximately $32,000 and current liabilities of approximately $5,304,000 as of December

As of December 31, 2023, our current assets and current liabilities were approximately $87,000 and $346,000, respectively.

We have prepared our financial statements for the years ended December 31, 2024 and 2023 assuming that we will continue as a going concern.

Our continuation as a going concern is dependent upon improving our profitability and the continuing financial support from our shareholders

as well as Yissum’s ability to successfully commercialize the License.

Our sources of capital in the past have included the sale

of equity securities, which include common stock sold in private transactions, and short-term debt.

During the current year, we continued

to borrow on existing finance agreements with two related party individuals and a shareholder to fund current operating expenses.

Additionally,

we entered into two convertible debt instruments to fund advances to NewStem.

is a development stage Israeli biotech limited liability company focused on pioneering intellectual property related to haploid human

embryonic stem cells for the development of personalized diagnostics and therapeutics for genetic and epigenetic diseases.

incurred losses related to in process research and development since inception and the Company records our percentage allocation of these

net losses as incurred.

In many cases, the accounting treatment of a particular transaction is specifically dictated by generally accepted

accounting principles, with no need for management’s judgement in their application.

There are also areas in which the selection

of an available alternative policy would not produce a materially different result.

We had current assets of approximately $16,000 and current liabilities of approximately $2,157,000 as

of December 31, 2025.

As of December 31, 2024, our current assets and current liabilities were approximately $32,000 and $5,304,000,

respectively.

We have prepared our financial statements for the years ended December 31, 2025 and 2024 assuming that we will continue

as a going concern.

Our continuation as a going concern is dependent upon improving our profitability and the continuing financial support

from our shareholders as well as Yissum’s ability to successfully commercialize the License.

Our sources of capital in the past

have included the sale of equity securities, which include common stock sold in private transactions, and short-term debt.

current year, we entered into a bridge loan agreement with our Executive Chairman to obtain funding for current operating expenses.

Accounting Policies

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following discussion of critical accounting policies represents our attempt to report on these accounting policies which we believe are

critical to our financial statements and other financial disclosure.

critical to our financial statements and other financial disclosures.

It is not intended to be a comprehensive list of all of our significant

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risk-free interest rate at the respective dates of grant.

expected volatility factor used to value stock options in 2024 was based on the historical volatility of the market price of our common

stock over the period from our change to a biotechnology company, September 2018, through December 2024.

For the expected term of the

option, we used an estimate of the expected option life based on historical experience.

The risk-free interest rate used is based upon

Treasury yields for a period consistent with the expected term of the options.

Company did not grant any options during the year ended December 31, 2025.

The expected volatility factor used to value stock options

granted in 2024 was based on the historical volatility of the market price of our common stock over the period from our change to a biotechnology

company, September 2018, through December 2024.

For the expected term of the option, we used an estimate of the expected option life

based on historical experience.

The risk-free interest rate used is based upon U.S.

Treasury yields for a period consistent with the

expected term of the options.

We assumed no quarterly dividend rate.

numerous assumptions involved in calculating stock-based compensation expense, the expense recognized in our financial statements may

differ significantly from the value realized by option holders on exercise of the share-based instruments.

In accordance with the prescribed

methodology, we do not adjust our recognized compensation expense to reflect these differences.

the years ended December 31, 2024 and 2023, we incurred stock compensation expense with respect to options and warrants of approximately

$40,000 and $303,000, respectively.

Due to the numerous assumptions involved in calculating stock-based

compensation expense, the expense recognized in our financial statements may differ significantly from the value realized by option holders

on exercise of the share-based instruments.

In accordance with the prescribed methodology, we do not adjust our recognized compensation

expense to reflect these differences.

the years ended December 31, 2025 and 2024, we incurred stock compensation expense with respect to options of approximately $8,800 and

$40,000, respectively.

Note 5 to the financial statements for the assumptions used to calculate the fair value of stock-based compensation.

accordance with Accounting Standards Codification (“ASC”) 815, Derivatives and Hedging, we identify and, if applicable,

bifurcate embedded derivatives in financial instrument instruments.

Those embedded features that are identified, bifurcated and

accounted for separately are measured at fair value continuously at each financial statement reporting date.

If the fair value of a

financial liability (the derivative) exceeds the proceeds received for the issuance of a hybrid instrument in an arm’s length

transaction with no rights or privileges that require separate accounting recognition as an asset identified, then we record the

embedded derivative at fair value with the excess of fair value over proceeds recognized as a loss in earnings.

accordance with Accounting Standards Codification (“ASC”) 815, Derivatives and Hedging, we identify and, if applicable, bifurcate

embedded derivatives in financial instruments.

Those embedded features that are identified, bifurcated and accounted for separately

are measured at fair value continuously at each financial statement reporting date.

If the fair value of a financial liability (the derivative)

exceeds the proceeds received for the issuance of a hybrid instrument in an arm’s length transaction with no rights or privileges

that require separate accounting recognition as an asset identified, then we record the embedded derivative at fair value with the excess

of fair value over proceeds recognized as a loss in earnings.

Our only identified derivative was terminated as part of the amendment of a note payable to a shareholder during

the year ended December 31, 2025.

of Operations

selected statement of operations data for the years ended December 31, 2025 and 2024 and balance sheet data as of December 31, 2025 and

2023 has been derived from our audited financial statements included in this Annual Report.

2024 have been derived from our audited financial statements included in this Annual Report.

data should be read in conjunction with our financial statements and related notes included herein.

Statement of Operations Data:

Ended December 31,

Administrative

Years Ended December 31,

Administrative fee income

Operating expenses:

from operations

on derivative instrument

loss on equity method investee

other expenses

loss before equity in net loss

of equity method investees

in net loss of equity method investees

on dilution of equity method investment

$ (3,233,042 )

Litigation expenses (contra expenses)

Total operating expenses

Loss from operations

Other (income) expenses:

Loss on derivative instrument

Gain on disposal of equity method investment

Relief of indebtedness income

Interest expense

Total other (income) expenses

Net income (loss) before equity in net income (loss) of equity method

Equity in net income (loss) of equity method investees

Impairment loss on equity method investee

Net income (loss)

$ (3,233,042 )

Compared to 2024

are a holding company whose primary assets are our ownership of equity interests in NetCo and NewStem including the technology of NewStem.

We conduct no other business and as a result, we have no operating revenue or cost of revenue.

We do charge annual administrative fees

to an affiliated entity.

Company incurs general and administrative (“G&A”) expenses primarily related to professional fees, insurance and stock

based compensation.

are a holding company whose primary asset currently is our right to the monetization of the former NewStem license now held by Yissum.

We currently conduct no other business and as a result, we have no operating revenue or cost of revenue.

We did charge annual administrative

fees to an affiliated entity through the year ended December 31, 2024.

Company incurs general and administrative (“G&A”) expenses primarily related to professional fees, insurance and stock-based compensation.

We incurred G&A expenses of approximately $239,000 and $881,000 for the years ended December 31, 2025 and 2024,

respectively.

Our increase in G&A expenses relates primarily to bad debt incurred with the write off of notes receivable from NewStem,

stock-based compensation and professional fees incurred in the audit of our financial statements for the years ended December 31, 2024

and 2023, preparation of our quarterly reports for 2024 and 2023, and for documents and advice related to our attempt to purchase the

remaining shares of NewStem.

Our decrease in G&A expenses relates primarily to decreases in bad debt expense, stock-based compensation and professional

fees incurred in the audit of our financial statements for the years ended December 31, 2025 and 2024, preparation of our quarterly reports

for 2025 and 2024, and for documents and advice related to our attempt to purchase the remaining shares of NewStem in 2024.

Specifically,

we wrote off as bad debt the net balance due from NewStem of $458,000 in the year ended December 31, 2024, and professional fees increased

by approximately $40,000 in the year ended December 31, 2024 as compared to the year ended December 31, 2023.

Insurance costs decreased

by approximately $14,000 in the year ended December 31, 2024 as compared to the year ended December 31, 2023.

stock compensation expense, included in G&A expenses, decreased by approximately $263,000 in the year ended December 31, 2024 as

compared to the year ended December 31, 2023 due to a smaller number of options awarded in the current period as compared to the prior

period as well as by the recognition of $243,000 in stock compensation expense in the year ended December 31, 2023 related to the increased

value of our outstanding warrants due to the amendment of the agreements to extend the due date by two years.

we wrote off as bad debt uncollected management fees of $9,500 during the year ended December 31, 2025 as compared to the net balance

due from NewStem of $458,000 in the year ended December 31, 2024, and professional fees decreased by approximately $145,000 in the year

ended December 31, 2025 as compared to the year ended December 31, 2024.

Insurance costs decreased by approximately $17,000 in the year

ended December 31, 2025 as compared to the year ended December 31, 2024.

stock compensation expense, included in G&A expenses, decreased by approximately $31,000 in the year ended December 31, 2025 as compared

to the year ended December 31, 2024 due to the fact that no options were awarded during the current fiscal year.

remaining decrease in G&A expenses of approximately $700 during the year ended December 31, 2025 consists primarily of decreases

in expenses related to investor relations and information technology.

incurred costs related to litigation and the related litigation funding agreement involving our arbitration with our NetCo joint venture

partner of approximately $59,000 and $2,873,000, respectively, for years ended December 31, 2024 and 2023.

Specifically, the decrease

of approximately $2,814,000 for the year ended December 31, 2024 as compared to 2023 is comprised of legal fees related to our NetCo

arbitration including litigation funding fees due to Omni Bridgeway pursuant to the litigation funding agreement incurred in the year

ended December 31, 2023 as compared to a lower amount incurred in the year ended December 31, 2024 related to final expenses not funded

by Omni Bridgeway.

Company has recorded a loss on derivative instrument of $90,000 and $260,000, respectively, for the years ended December 31, 2024 and

2023 related to a guarantee included in the note payable shareholder entered into in May 2023.

The loss recorded in the year ended December

31, 2024 brings the derivative instrument to its highest contractual liability.

Company has recorded an impairment loss of approximately $1,629,000 during the year ended December 31, 2024 related to its investment

This loss reduces our investment in NewStem to zero ($0.00) as of December 31, 2024.

This adjustment was made in response

to the fact that NewStem ceased operations and is in the process of liquidation.

The technology and license held by NewStem reverted

to the original licensee, Yissum, and the Company retains a right to a share of future licensing or monetization of the technology and

The Company does expect to recover some value from the license, however, as of December 31, 2024, the realization of this value

is not certain, therefore has not been recorded by the Company.

No such adjustment was made during the year ended December 31, 2023.

expense increased by approximately $326,000 in the year ended December 31, 2024 as compared to the year ended December 31, 2023.

increases in interest expense are related to increased debt incurred for operations, the accrual of interest on the litigation funding

agreement and the funding of NewStem.

incurred costs related to litigation and the related litigation funding agreement involving our former settled arbitration with our NetCo

joint venture partner of approximately $59,000 during the year ended December 31, 2024.

Company has recorded a loss on derivative instruments of $90,000, for the year ended December 31, 2024 related to a guarantee previously

included in the note payable shareholder entered into in May 2023.

The guarantee was removed in an amendment to the note payable during

the year ended December 31, 2024, terminating the derivative.

Company reported a gain on disposal of equity method investment of approximately $1,172,000 during the year ended December 31, 2025 related

to the sale of our investment in NetCo.

We also reported relief of indebtedness income of approximately $1,697,000 related to the cancellation

of the remaining balance on the litigation funding agreement from the same transaction.

Company recorded an impairment loss of approximately $1,629,000 during the year ended December 31, 2024 related to its investment in

This loss reduced our investment in NewStem to zero ($0.00) as of December 31, 2024.

This adjustment was made in response to

the fact that NewStem ceased operations and was in the process of liquidation.

The technology and license held by NewStem reverted to

the original licensee, Yissum, and the Company retains a right to a share of future licensing or monetization of the technology and license.

The Company does expect to recover some value from the license, up to a total of $3,750,000, however, as of December 31, 2025 and 2024,

the realization of this value is not certain, therefore has not been recorded by the Company.

During the year ended December 31, 2025,

the Company received approximately $5,000 from the liquidation of the remaining assets of NewStem which was reported as a partial recovery

of the impairment loss.

expense decreased by approximately $169,000 in the year ended December 31, 2025 as compared to the year ended December 31, 2024.

decrease in interest expense is primarily related to the reduction of interest from the settlement of the litigation funding agreement

offset by increased debt incurred for operations.

Company has recorded no income tax expense as we have incurred operating losses and all deferred tax assets are fully offset by an income

tax valuation allowance.

reported net losses from equity method investees during the years ended December 31, 2024 and 2023.

The net losses reported for the year

ended December 31, 2024 included net loss of approximately $5,000 from NetCo combined with net loss of approximately $156,000 from NewStem.

Net losses reported for the year ended December 31, 2023 included net income of approximately $3,000 from NetCo which was offset by net

loss of approximately $342,000 from NewStem.

reported a gain on dilution of our equity method investment related to stock issuances made to third parties by NewStem of

approximately $36,000 during the year ended December 31, 2023.

We incurred no such gain or loss during the year ended December 31,

reported net income and losses from equity method investees during the years ended December 31, 2025 and 2024.

The net income reported

for the year ended December 31, 2025 included net income of $640 from NetCo.

Net losses reported for the year ended December 31, 2024

included net loss of approximately $5,000 from NetCo combined with net loss of approximately $156,000 from NewStem.

and Capital Resources

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Management’s plans with regard to these matters include

the potential sale of our interest in NetCo to settle our liability related to the litigation funding agreement and additional financing

and fundraising until our interest in NewStem’s technology is profitable.

Although management continues to pursue these plans,

there is no assurance that the Company will be successful in obtaining sufficient cash from financing on terms acceptable to the Company,

or that NewStem’s technology will be monetized and become profitable.

fundraising until our interest in NewStem’s technology via monetization of the License is profitable.

Although management continues

to pursue these plans, there is no assurance that the Company will be successful in obtaining sufficient cash from financing on terms

acceptable to the Company, or that NewStem’s technology will be monetized and become profitable.

the year ended December 31, 2022, the Company entered into note agreements with Jan Loeb, our Executive Chairman and Jerry Wolasky, a

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to increase the total borrowing to $650,000 and extend the maturity date.

The agreements provide for interest at a rate of 10% per annum.

As of the date of this Annual Report, the full amount of $650,000 has been funded pursuant to these agreements.

The note agreements were refinanced in August 2024 providing

for total borrowings of $750,000 and extending the maturity date to December 31, 2025.

The agreements provide for interest at a rate

of 10% per annum.

Prior to the filing of this Annual Report, the maturity date of these notes was extended to June 30, 2026.

the year ended December 31, 2023, the Company entered into a note agreement with a shareholder to borrow $300,000 for continued working

This note bears interest at zero percent (0%) and matures on May 5, 2025.

The note includes a guarantee which has been identified

as an embedded derivative with a fair value of a liability of $650,000 and $535,000 at December 31, 2024 and 2023, respectively.

This note bore interest at zero percent (0%) and matured on May 5, 2025.

The note included a guarantee which has been identified

as an embedded derivative with a fair value of a liability of $650,000 at December 31, 2024.

This note was amended in May 2025 to provide

for fixed interest, remove the guarantee and extend the maturity date to September 30, 2025.

This note was amended for a second time

in October 2025 to extend the maturity date to December 31, 2026.

December 2023, the Company entered into two short term notes payable with unrelated parties for a total of $250,000 in borrowings utilized

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The notes bear interest at 12% per annum and matured December 21, 2025, at which time all principal and accrued

interest are due and payable.

Prior to the filing of this Annual Report, the maturity date of these notes was extended to December 21,

The note agreements include a provision whereby, in the event of a capital raise transaction by the Company, the note holders would

be entitled to participate in the transaction in an amount equal to 133% of the amounts owed on the note agreements at the closing of

the transaction.

interest were due and payable.

Prior to the filing of this Annual Report, the maturity date of these notes was extended to June 30, 2026.

The note agreements include a provision whereby, in the event of a capital raise transaction by the Company, the note holders would be

entitled to participate in the transaction in an amount equal to 133% of the amounts owed on the note agreements at the closing of the

April 2024, the Company borrowed $100,000 from unrelated parties pursuant to convertible debt agreements accounted for as debt.

agreements bear interest at 10% per annum and matured December 30, 2025.

Prior to the filing of this Annual Report, the maturity dates

have been extended to June 30, 2026.

the year ended December 31, 2025, the Company borrowed $161,867 from the Executive Chairman in the form of an interim bridge loan until

alternate funding sources can be found.

The Company is accruing interest at 10% per annum for these advances.

The agreement matured December

Prior to the filing of this Annual Report, the maturity date has been extended to June 30, 2026.

May 9, 2025 the Company sold its interest in NetCo to its JV partner for $1,300,000 which was paid directly to Omni Bridgeway in full

settlement of all liabilities related to the litigation funding agreement totaling $2,959,625.

Cash Used In Operating Activities.

the year ended December 31, 2025, net cash used in operating activities was approximately $168,000, which consisted primarily of a net

income of approximately $2,380,000 reduced by noncash gain of approximately $1,172,000 from the sale of our interest in NetCo and the

related noncash relief of indebtedness income from the settlement of the litigation funding agreement with Omni Bridgeway of $1,697,000,

stock-based compensation of approximately $9,000.

Further offset by accretion of discount on notes payable of $60,000 and interest added

to notes payable and convertible debt of approximately $194,000.

Additionally, cash was used in operations related to an increase in

current assets of approximately $10,000 and an increase in accrued liabilities and other payables of approximately $48,000.

the year ended December 31, 2024, net cash used in operating activities was approximately $272,000, which consisted primarily of a net

loss of approximately $3,233,000, offset by noncash equity in loss of equity method investees of approximately $161,000, impairment of

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assets of approximately $8,000 and an increase in accrued liabilities and other payables of approximately $140,000.

the year ended December 31, 2023, net cash used in operating activities was approximately $348,000, which consisted primarily of a net

loss of approximately $4,187,000, offset by noncash equity in loss of equity method investees of approximately $339,000 and distributions

from equity method investees of $7,000, netted with gain on dilution of approximately $36,000 and stock-based compensation of approximately

Further offset by approximately $2,819,000 in cumulative noncash litigation expenses funded directly by the litigation funding

agreement, loss on derivative instrument of $260,000, accretion of discount on notes payable of $62,000 and interest added to related

party notes payable of $35,138.

Additionally, cash was used in operations related to a decrease in current assets of approximately $19,000

and an increase in accrued liabilities and other payables of approximately $31,000.

Cash Used In Investing Activities.

the years ended December 31, 2024 and 2023, the Company loaned a total of $500,000, consisting of $250,000 per year to NewStem in anticipation

of a purchase transaction.

This transaction was not consummated and NewStem ceased operations and began liquidation proceedings in October

2024, resulting in the loan becoming uncollectible.

As such, the Company determined the note was uncollectible and wrote the balance

off as a bad debt during the year ended December 31, 2024.

the year ended December 31, 2024, the Company loaned $250,000 to NewStem in anticipation of a purchase transaction.

This transaction

was not consummated and NewStem ceased operations and began liquidation proceedings in October 2024, resulting in the loan becoming uncollectible.

As such, the Company determined the note was uncollectible and wrote the balance, including $250,000 loaned in 2023, off as a bad debt

during the year ended December 31, 2024.

Cash Provided By Financing Activities.

the year ended December 31, 2025, net cash provided by financing activities was $161,867, consisting of advances on the bridge loan payable

to our Executive Chairman.

the year ended December 31, 2024, net cash provided by financing activities was $475,000, consisting of long-term borrowings from two

directors and a stockholder totaling $375,000 and borrowings from convertible debt with unrelated parties of $100,000.

the year ended December 31, 2023, net cash provided by financing activities was $645,000, consisting of long-term borrowings from two

directors and a stockholder totaling $395,000 and short term borrowings from unrelated parties of $250,000.

Sheet Arrangements

are not party to any off-balance sheet transactions.

With the exception of a guarantee related to long term borrowings from a stockholder

which is accounted for as a derivative, we have no guarantees or obligations other than those which arise out of normal business operations.

Obligations and Commercial Commitments

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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