What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2025-03-31 compared with 2024-03-28 · 1276 added, 1063 removed, 222 unchanged (91% of the section changed)

CONTROLS AND PROCEDURES

Evaluation of

Disclosure Controls and Procedures

management is responsible for establishing and maintaining adequate disclosure controls and procedures, as defined in Rule 13a-15(e)

under the Exchange Act, for our Company.

Consequently, our management, with the participation of our principal executive officer and

principal financial officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15(b) under the

Exchange Act as of December 31, 2023.

In designing and evaluating the disclosure controls and procedures, management recognized that

any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired

control objectives.

In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints,

and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their

Based on that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls

and procedures are designed at a reasonable assurance level as of December 31, 2023.

Annual Report on Internal Control Over Financial Reporting

management is responsible for establishing and maintaining adequate internal control over financial reporting.

“Internal control

over financial reporting,” as defined in Rule 13a-15(f) under the Exchange Act, means a process designed to provide reasonable

assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance

Our management, with the participation and supervision of our principal executive officer and our principal financial and

accounting officer, assessed the effectiveness of our internal control over financial reporting.

making this assessment, our management used the criteria set forth in Internal Control – Integrated Framework (2013) as

issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on this assessment, our management concluded that

our internal control over financial reporting was effective as of December 31, 2023.

Annual Report does not include an attestation report of the Company’s registered public accounting firm due to an exemption established

by SEC rules for emerging growth companies.

Changes in Internal

Evaluation of Disclosure Controls and Procedures

Our management is responsible for establishing and

maintaining adequate disclosure controls and procedures, as defined in Rule 13a-15(e) under the Exchange Act, for our Company.

Consequently,

our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness

of our disclosure controls and procedures pursuant to Rule 13a-15(b) under the Exchange Act as of December 31, 2024.

In designing and

evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed

and operated, can provide only reasonable assurance of achieving the desired control objectives.

In addition, the design of disclosure

controls and procedures must reflect the fact that there are resource constraints, and that management is required to apply its judgment

in evaluating the benefits of possible controls and procedures relative to their costs.

Based on that evaluation, our principal executive

officer and principal financial officer concluded that our disclosure controls and procedures are designed at a reasonable assurance level

as of December 31, 2024.

Management’s Annual Report on Internal

Control Over Financial Reporting

the years ended December 31, 2023 and December 31, 2022, there were no changes in our internal control over financial reporting that

materially affected, or are reasonably likely to materially affect, our internal control over financial reporting (as defined in Exchange

Act Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934).

Our management is responsible for

establishing and maintaining adequate internal control over financial reporting.

“Internal control over financial reporting,”

as defined in Rule 13a-15(f) under the Exchange Act, means a process designed to provide reasonable assurance regarding the reliability

of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.

Our management, with

the participation and supervision of our principal executive officer and our principal financial and accounting officer, assessed the

effectiveness of our internal control over financial reporting.

In making this assessment, our management

used the criteria set forth in Internal Control – Integrated Framework (2013) as issued by the Committee of Sponsoring Organizations

of the Treadway Commission.

Based on this assessment, our management concluded that our internal control over financial reporting was

effective as of December 31, 2024.

This Annual Report does not include

an attestation report of the Company’s registered public accounting firm due to an exemption established by SEC rules for emerging

growth companies.

Changes in Internal Control Over Financial Reporting

During the three months

ended December 31, 2024, there were no changes in our internal control over financial reporting that materially affected, or are reasonably

likely to materially affect, our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) under

the Securities Exchange Act of 1934).

Limitation on Effectiveness

of Controls and Procedures

In designing and evaluating

our controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide

only reasonable and not absolute assurance of achieving the desired control objectives.

In assessing whether our disclosure controls and

procedures were effective at a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating

the cost-benefit relationship of possible controls and procedures.

There are inherent limitations to the effectiveness of any system of

controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures.

In addition, the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and

there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate.

Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

OTHER INFORMATION

Rule 10b5-1 Plan and Non-Rule

10b5-1 Trading Arrangement Adoptions, Terminations, and Modifications

Our directors and officers

may enter into trading plans or other arrangements with financial institutions to purchase or sell shares of our common stock, which plans

or arrangements are intended to comply with the affirmative defense provisions of Rule 10b5-1

of the Exchange Act or which may represent a non-Rule 10b5-1 trading arrangement, as defined under Item 408(a) of Regulation S-K.

During the three months ended

December 31, 2024, none of our directors or officers adopted , terminated or modified a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1

trading arrangement.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTION

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

information required by this item will be included in our definitive proxy statement for our 2024 annual meeting of stockholders (the

“2024 Proxy Statement"), to be filed with the SEC no later than 120 days after December 31, 2023, and is incorporated herein

by reference.

Not applicable.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE

Insider Trading Policy

We have adopted an Insider Trading Policy governing

the purchase, sale and/or other dispositions of our securities by our directors, officers and employees that are reasonably designed to

promote compliance with insider trading laws, rules and regulations.

The Insider Trading Policy is filed as an exhibit to this Annual

The remaining information for this item will be included

in our definitive proxy statement for our 2025 annual meeting of stockholders (the “2025 Proxy Statement"), to be filed with

the SEC no later than 120 days after December 31, 2024, and is incorporated herein by reference.

EXECUTIVE COMPENSATION

information required by this item will be included in the 2024 Proxy Statement and is incorporated herein by reference.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

information required by this item will be included in the 2024 Proxy Statement and is incorporated herein by reference.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

information required by this item will be included in the 2024 Proxy Statement and is incorporated herein by reference.

The information required by this item will be included

in the 2025 Proxy Statement and is incorporated herein by reference.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL

OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this item will be included

in the 2025 Proxy Statement and is incorporated herein by reference.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND

DIRECTOR INDEPENDENCE

The information required by this item will be included

in the 2025 Proxy Statement and is incorporated herein by reference.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

information required by this item will be included in the 2024 Proxy Statement and is incorporated herein by reference.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

Financial Statements

financial statements are listed in the “Index to the Financial Statements,” which appears on page F-1 of this Annual Report.

(a)(2) Financial

Statement Schedules

financial statement schedules are omitted because the information called for is not required or is shown either in the financial statements

or the notes thereto.

The information required by this item will be included

in the 2025 Proxy Statement and is incorporated herein by reference.

EXHIBITS AND FINANCIAL STATEMENT

(a)(1) Financial Statements

Our financial statements are listed

in the “Index to the Financial Statements,” which appears on page F-1 of this Annual Report.

(a)(2) Financial Statement Schedules

All financial statement schedules

are omitted because the information called for is not required or is shown either in the financial statements or the notes thereto.

(a)(3) Exhibits

The following is a

list of exhibits filed as part of this Annual Report.

The following is a list of exhibits filed as part

of this Annual Report.

Incorporated by Reference

of Incorporation of the Company, effective as of November 4, 2021

of the Company currently in effect

of Amendment of Articles of Incorporation, effective as of October 8, 2024

and Restated Bylaws of the Company, dated August 21, 2024

of the Company’s Common Stock Certificate

of Underwriters Warrant

of Senior Secured Note issued to bridge loan investors

of Representative’s Warrant Agreement

of Senior Secured Promissory Note issued to bridge loan investors

of Capital Stock

2 unchanged sentences

of Convertible Note

of Pre-Funded Warrant

of Series A Warrant

of Series B Warrant

of Common Stock Warrant Issued to Selling Stockholders

Inc 2021 Incentive Award Plan

2021 Incentive Award Plan

to Expion360 Inc.

2021 Incentive Award Plan

Inc 2021 Employee Stock Purchase Plan

2021 Employee Stock Purchase Plan

of Security Agreement Issued to Bridge Loan Investors

1 unchanged sentence

Lease of premises at 1266 SW Lake Blvd., Redmond, OR

Agreement dated March 31, 2022, between the Company and Alexander Capital, LP as Representative of the Underwriters

and Restated Employment Agreement between John Yozamp and Expion360 Inc., dated January 26, 2023

and Restated Employment Agreement, between Brian Schaffner and Expion360 Inc., dated January 26, 2023

4 unchanged sentences

and Tumim Stone Capital, LLC

Rights Agreement, dated December 27, 2023, between Expion360 Inc.

Registration Rights Agreement, dated December 27, 2023, between Expion360 Inc.

and Tumim Stone Capital, LLC

of the Company

of M&K CPAS PLLC

of Attorney (reference is made to the signature page hereto)

Certification

of Principal Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a) under the Exchange Act, as adopted pursuant to Section 302

of the Sarbanes-Oxley Act of 2002

Certification

of Principal Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a) under the Exchange Act, as adopted pursuant to Section 302

of the Sarbanes-Oxley Act of 2002

Certification

of Principal Executive Officer pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of

Certification

of Principal Financial Officer pursuant to 18 U.S.C.

Underwriting Agreement, dated August 7, 2024, between Expion360 Inc.

and Aegis Capital Corp.

Subsidiaries of the Company

Expion360 Inc.

Insider Trading Policy

Consent of M&K CPAS PLLC

Power of Attorney (reference is made to the signature page hereto)

Certification of Principal Executive Officer and Principal Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Expion360 Inc.

Executive Compensation Clawback Policy

XBRL Instance Document.

XBRL Taxonomy Extension

Schema Document.

XBRL Taxonomy Extension

Calculation Linkbase Document.

XBRL Taxonomy Extension

Definition Linkbase Document.

XBRL Taxonomy Extension

Label Linkbase Document.

XBRL Taxonomy Extension

Presentation Linkbase Document.

Cover Page Interactive

Data File (formatted as Inline XBRL and included in Exhibit 101).

a management contract or compensatory plan or arrangement.

This certification is deemed not filed for purpose of

Section 18 of the Exchange Act or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference

into any filing under the Securities Act or the Exchange Act.

schedules and exhibits to this agreement have been omitted pursuant to Item 601(a)(5) of Regulation S-K.

A copy of any omitted

schedule and/or exhibit will be furnished to the SEC upon request.

XBRL Taxonomy Extension Schema Document.

XBRL Taxonomy Extension Calculation Linkbase Document.

XBRL Taxonomy Extension Definition Linkbase Document.

XBRL Taxonomy Extension Label Linkbase Document.

XBRL Taxonomy Extension Presentation Linkbase Document.

Cover Page Interactive Data File (formatted as Inline XBRL and included in Exhibit 101).

† Indicates a management

contract or compensatory plan or arrangement.

# This certification is deemed not filed for purpose of Section 18 of the Exchange Act or otherwise subject

to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange

* The schedules and exhibits to this agreement have been omitted pursuant

to Item 601(a)(5) of Regulation S-K.

A copy of any omitted schedule and/or exhibit will be furnished to the SEC upon request.

FORM 10-K SUMMARY

to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Annual

Report on Form 10-K to be signed on its behalf by the undersigned thereunto duly authorized.

Pursuant to the requirements of

Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Annual Report on Form 10-K to

be signed on its behalf by the undersigned thereunto duly authorized.

Expion360 Inc.

Brian Schaffner

/s/ Brian Schaffner

Brian Schaffner

Executive Officer

( Principal Executive Officer )

Chief Executive Officer and Interim Chief Financial Officer

( Principal Executive, Financial and Accounting Officer )

March 31, 2025

POWER OF ATTORNEY

person whose signature appears below constitutes and appoints Brian Schaffner and Greg Aydelott, and each of them, as his or her true

and lawful attorneys-in-fact, proxies and agents, each with full power of substitution and resubstitution, for him or her and in his

or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K and

to file the same, with any exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission,

granting unto such attorneys-in-fact, proxies and agents full power and authority to do and perform each and every act and thing requisite

and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying

and confirming all that said attorneys-in-fact, proxies and agents, or their or his or her substitutes, may lawfully do or cause to be

done by virtue hereof.

to the requirements of the Securities Exchange Act of 1934, as amended, this Annual Report on Form 10-K has been signed below by the

following persons on behalf of the Registrant in the capacities and on the dates indicated.

Each person whose signature appears

below constitutes and appoints Brian Schaffner as his or her true and lawful attorneys-in-fact, proxies and agents, each with full power

of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and

all amendments to this Annual Report on Form 10-K and to file the same, with any exhibits thereto and other documents in connection

therewith, with the Securities and Exchange Commission, granting unto such attorneys-in-fact, proxies and agents full power and authority

to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and

purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact, proxies and agents, or their

or his or her substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of

the Securities Exchange Act of 1934, as amended, this Annual Report on Form 10-K has been signed below by the following persons on behalf

of the Registrant in the capacities and on the dates indicated.

/s/ Brian Schaffner

Chief Executive Officer, Interim Chief Financial Officer and Director

March 31, 2025

Brian Schaffner

Executive Officer and Director

Executive Officer)

Greg Aydelott

Financial Officer

Financial and Accounting Officer)

(Principal Executive, Financial and Accounting Officer)

/s/ George Lefevre

March 31, 2025

George Lefevre

Steven M Shum

Chief Operating Officer and

of the Board of Directors

to Consolidated Financial Statements

of Independent Registered Public Accounting Firm (PCAOB ID # 2738)

of Operations

of Stockholders’ Equity (Deficit)

of Cash Flows

to the Consolidated Financial Statements

FINANCIAL INFORMATION

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

Stockholders of Expion360 Inc.

Opinion on the

/s/ Steven M Shum

March 31, 2025

/s/ Paul Shoun

Chief Operating Officer, President and Chairman of the Board of Directors

March 31, 2025

Index to Consolidated

Financial Statements

have audited the accompanying balance sheets of Expion360 Inc.

(the Company) as of December 31, 2023 and 2022, and the related statements

of operations, stockholders’ equity (deficit), and cash flows for each of the years in the two-year period ended December 31, 2023,

and the related notes (collectively referred to as the financial statements).

In our opinion, the financial statements present fairly,

in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and

its cash flows for each of the years in the two-year period ended December 31, 2023, in conformity with accounting principles generally

accepted in the United States of America.

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

As discussed in Note

2 to the financial statements, the Company suffered a net loss from operations and used cash in operations, which raises substantial

doubt about its ability to continue as a going concern.

Report of Independent Registered Public Accounting Firm (PCAOB ID # 2738 )

Balance Sheets

Statements of Operations

Statements of Stockholders’ Equity (Deficit)

Statements of Cash Flows

Notes to the Consolidated Financial Statements

FINANCIAL INFORMATION

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

To the Board of Directors and Stockholders of Expion360,

Opinion on the Financial Statements

We have audited the accompanying balance sheets of

Expion360, Inc.

(the Company) as of December 31, 2024 and 2023, and the related statements of operations and comprehensive loss,

stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2024, and the related

notes (collectively referred to as the financial statements).

In our opinion, the financial statements present fairly, in all material

respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash

flows for each of the years in the two-year period ended December 31, 2024, in conformity with accounting principles generally accepted

in the United States of America.

Going Concern

The accompanying financial statements have been prepared

assuming that the Company will continue as a going concern.

As discussed in Note 2 to the financial statements, the Company suffered a

net loss from operations and has a net capital deficiency, which raises substantial doubt about its ability to continue as a going concern.

Management’s plans regarding those matters are also described in Note 2.

financial statements do not include any adjustments that might result from the outcome of this uncertainty.

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s

financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities

laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits,

we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting.

The financial statements do not include any adjustments

that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are

required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and

regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards

of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements

are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform,

an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal

control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal

control over financial reporting.

Accordingly, we express no such opinion.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error

or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits

provide a reasonable basis for our opinion.

Critical Audit

critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated

or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial

statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of the critical audit matter

does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit

matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Equity Transactions

discussed in Note 11 to the financial statements, the Company issues options and warrants.

The proper valuation of options

and warrants requires significant management judgement in determining the volatility and method used to calculate the option and warrant

evaluate the appropriateness of the model and estimates determined by management, we examined and evaluated the model, and the time period

and stock prices used in determining the valuation of the options and warrants issued.

M&K CPAS, PLLC

have served as the Company’s auditor since 2021.

Woodlands , TX

Our audits included performing procedures to assess the risks

of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall

presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matters

communicated below are matters arising from the current period audit of the financial statements that were communicated or required to

be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and

(2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter

in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below,

providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Going Concern

Due to the recurring net loss for the year and net

cash used in operating activities, the Company evaluated the need for a going concern.

See discussion in Note 2.

Auditing management’s evaluation of a going

concern can be a significant judgement given the fact that the Company uses management estimates on future revenues and expenses which

are not able to be substantiated.

To evaluate the appropriateness of the lack of going

concern, we examined and evaluated the financial information that was the initial cause along with management’s plans to mitigate

the going concern and managements lack of disclosure on going concern.

/s/ M&K CPAS, PLLC

We have served as the Company’s auditor since 2021.

The Woodlands, TX

March 31, 2025

Expion360 Inc.

of December 31, 2023

of December 31, 2022

Balance Sheets

As of December 31, 2024

As of December 31, 2023

Current Assets

2 unchanged sentences

Prepaid/in-transit inventory

Prepaid expenses

and other current assets

Prepaid expenses and other current assets

Total current assets

2 unchanged sentences

Property and equipment, net

Operating leases – right-of-use

Operating leases – right-of-use asset

Total other assets

6 unchanged sentences

Current portion of operating lease liability

Current portion of stockholder promissory

Current portion of

long-term debt

Current portion of stockholder promissory notes

Current portion of long-term debt

Suspended Liability

Total current liabilities

1 unchanged sentence

Operating lease liability, net of current portion

Stockholder promissory notes, net

of current portion

Total liabilities

1 unchanged sentence

Preferred stock, par value $ .001 ;

20,000,000 shares

shares authorized;

zero 0 shares issued and outstanding

Common stock, par value $ .001 ;

200,000,000 shares

6,922,912 and

6,802,464 issued

and outstanding as of December 31, 2023 and 2022, respectively

200,000,000 shares authorized;

2,096,082 and 69,230 issued and outstanding as of December 31, 2024 and 2023, respectively

Additional paid-in capital

4 unchanged sentences

Total liabilities and stockholders’ equity

The accompanying notes are an integral

part of these financial statements.

The accompanying notes are an integral part of these financial statements.

Expion360 Inc.

of Operations

Years Ended December 31,

Statements of Operations

For the Years Ended December 31,

Cost of sales

6 unchanged sentences

Interest expense

(Gain) / Loss on sale of property and equipment

Loss on sale of property and equipment

Settlement expense

Total other (income) / expense

Suspended liability expense

Total other expense

Loss before taxes

6 unchanged sentences

Weighted-average number of common shares outstanding

The accompanying notes are an integral

part of these financial statements.

The accompanying notes are an integral part of these financial statements.

Expion360 Inc.

of Stockholders’ Equity (Deficit) for Years Ended December 31, 2023 and 2022

Paid-in Capital

Stockholders’ Equity (Deficit)

Statements of Stockholders’ Equity (Deficit)

for Years Ended December 31, 2024 and 2023

Additional Paid-in Capital

Accumulated Deficit

Total Stockholders’ Equity (Deficit)

Balance at December 31, 2022

$ ( 13,639,491 )

Issuance of shares, initial public offering, net

of issuance costs

Issuance of shares in exchange for IPO services

Issuance of stock options

Proceeds received from cashless exercise of warrants

Proceeds received from cash exercise of warrants

Stock issued as a result of litigation settlement

Issuance of warrants

Issuance of stock options

Issuance of RSUs

Settlement of vested RSUs

Issuance of common stock in exchange for short-term loan costs

( 7,456,274 )

2 unchanged sentences

$ ( 21,095,765 )

Proceeds received from cashless exercise of

Stock issued for ELOC

Proceeds received from cashless exercise of warrants

Proceeds received from cash exercise of warrants

Stock issued as a result of litigation settlement

Issuance of warrants

Stock issued for interest payment

Issuance of stock options

1 unchanged sentence

Settlement of vested RSUs

Issuance of common stock in exchange for short-term

Settlement of commitment shares

Stock issued as a result of litigation settlement

Issuance shares and pre-funded warrants, follow-on offering, net of issuance costs

Proceeds from exercise of Series A warrants

Proceeds from exercise of Series B warrants

Shares issued for true-up upon reverse stock split

( 13,479,475 )

2 unchanged sentences

$ ( 34,575,240 )

The accompanying notes are an integral

part of these financial statements.

The accompanying notes are an integral part of these financial statements.

Expion360 Inc.

Statements of Cash Flows

1 unchanged sentence

Cash flows from operating activities

$ ( 13,479,475 )

$ ( 7,456,274 )

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Amortization of debt discount (sale of future revenues)

Amortization of debt discount - notes

(Gain) / Loss on sale of property and equipment

Increase / (Decrease) in allowance for doubtful accounts

Amortization of convertible note costs

Loss on sale of property and equipment

Decrease in allowance for doubtful accounts

Stock-based settlement

Stock-based compensation

Decrease in right-of-use assets and lease liabilities

Increase in suspended liability

Changes in operating assets and liabilities:

Decrease in accounts receivable

(Increase) / Decrease in accounts receivable

(Increase) / Decrease in inventory

(Increase) / Decrease in prepaid/in-transit inventory

( 1,006,071 )

Increase in prepaid/in-transit inventory

( 1,448,738 )

Increase in prepaid expenses and other current assets

Decrease in deposits

Increase / (Decrease) in accounts payable

Increase / (Decrease) in customer deposits

Increase in accounts payable

Increase in customer deposits

Increase / (Decrease) in accrued expenses and other current liabilities

1 unchanged sentence

Net cash used in operating activities

( 9,562,545 )

( 5,531,232 )

Cash flows from investing activities

1 unchanged sentence

Net proceeds from sale of property and equipment

Net cash provided by / (used in) investing activities

Net cash provided by investing activities

Cash flows from financing activities

Proceeds from / (payments on) line of credit and short-term revolving loans

Convertible note

Proceed from / (Principal payment on) convertible note

( 2,750,000 )

Principal payments on long-term debt

Principal payments on stockholder promissory notes

Payments on liability for sale of future revenues

Proceeds from exercise of warrants

Settlement of fractional shares of cashless warrant exercise

Settlement of fractional shares for cashless warrant exercise

Net proceeds from issuance of common stock

1 unchanged sentence

Net change in cash and cash equivalents

( 3,385,133 )

( 3,268,546 )

Cash and cash equivalents, beginning

Cash and cash equivalents, ending

Statements of Cash

Flows - Continued

Years Ended December 31,

Expion360 Inc.

Statements of Cash Flows - Continued

For the Years Ended December 31,

Supplemental disclosure of cash flow information:

Cash paid for interest

Cash paid for franchise taxes

Cash paid / (received) for franchise taxes

Non-cash financing activities:

Acquisition/modification of operating lease right-of-use

asset and lease liability

Purchases of property and equipment in exchange for

long-term debt

Purchases of property and equipment in exchange for

short-term payable

Settlement of RSUs with common stock

Issuance of common stock in exchange for short-term

Acquisition/modification of operating lease right-of-use asset and lease liability

Issuance of common stock for payment on accrued interest

Issuance of common stock for payment on accrued compensation

Issuance of common stock in exchange for short-term loan costs

$ ( 337,169 )

The accompanying notes are an integral

part of these financial statements.

TO THE FINANCIAL STATEMENTS

Organization and Nature of Operations

(formerly Yozamp Products Company, LLC dba Expion360) (the “Company”) was incorporated in the state of Nevada in November

Effective November 1, 2021, the Company converted to a C corporation.

Prior to conversion, the Company was a limited liability

company (“LLC”) with an indefinite life organized in the State of Oregon in June 2016.

The LLC elected to be treated as a

Subchapter S corporation effective January 1, 2017.

Net profits and losses of the LLC and all distributions were allocated among the

members in proportion to the ownership units held.

The Original LLC Agreement was amended and restated on January 1, 2021 to add additional

members and a non-voting class of member units.

Upon conversion to a C corporation, all existing LLC members at the time of conversion

were issued shares of the Company’s common stock, par value $0.001 per share and became stockholders of the Company.

Company designs, assembles, and distributes premium lithium batteries for RV, Marine, Golf, Industrial, Residential, and Off-The-Grid

The Company uses lithium iron phosphate (“LiFePO4”) batteries.

LiFePO4 batteries are considered a top choice for high

energy density, dependability, longevity, and safety, providing the ability to power anything, anywhere.

Summary of Significant Accounting Policies

of Presentation

accompanying audited financial statements have been prepared by the Company in accordance with accounting principles generally accepted

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

GAAP”) for interim financial information, and pursuant to the instructions to Form

10-Q and Article 10 of Regulation S-X promulgated by the Securities and Exchange Commission (“SEC”).

Accordingly, they do

not include all of the information and footnotes required by U.S.

The accompanying notes are an integral part of these financial statements.

NOTES TO THE FINANCIAL STATEMENTS

Organization and Nature

of Operations

Expion360 Inc.

(formerly Yozamp Products Company,

LLC dba Expion360) (the “Company”) was incorporated in the state of Nevada in November 2021.

Effective November 1, 2021, the

Company converted to a C corporation.

Prior to conversion, the Company was a limited liability company (“LLC”) with an indefinite

life organized in the State of Oregon in June 2016.

The LLC elected to be treated as a Subchapter S corporation effective January 1, 2017.

Net profits and losses of the LLC and all distributions were allocated among the members in proportion to the ownership units held.

Original LLC Agreement was amended and restated on January 1, 2021 to add additional members and a non-voting class of member units.

conversion to a C corporation, all existing LLC members at the time of conversion were issued shares of the Company’s common stock,

par value $0.001 per share and became stockholders of the Company.

The Company designs, assembles, and distributes premium

lithium batteries for RV, Marine, Golf, Industrial, Residential, and Off-The-Grid needs.

The Company uses lithium iron phosphate (“LiFePO4”)

LiFePO4 batteries are considered a top choice for high energy density, dependability, longevity, and safety, providing the

ability to power anything, anywhere.

Summary of Significant

Accounting Policies

Basis of Presentation

The accompanying audited financial statements have

been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“U.S.

GAAP”) for interim financial information, and pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X promulgated

by the Securities and Exchange Commission (“SEC”).

Accordingly, they do not include all of the information and footnotes required

GAAP for complete financial statement presentation.

However, the Company

believes that the disclosures are adequate to make the information presented not misleading.

In the opinion of management, all adjustments

(consisting primarily of normal recurring accruals) considered necessary for a fair presentation have been included.

otherwise noted, all references to shares and stockholders in the accompanying financial statements have been restated retrospectively,

to reflect the equity structure of the C corporation as of the beginning of the first period presented.

Reclassification

of Prior Year Presentation

prior year amounts have been reclassified for consistency with current year presentation.

These reclassifications had no effect on the

reported results of operations.

Concern, Liquidity and Capital Resources

Company’s activities are subject to significant risks and uncertainties, including failing to secure additional funding before

the Company achieves sustainable revenues and profit from operations.

The Company expects to continue to incur additional losses for

the foreseeable future, and the Company may need to raise additional debt or equity financing to expand its presence in the marketplace,

develop new products, achieve operating efficiencies, and accomplish its long-term business plan over the next several years.

be no assurance as to the availability or terms upon which such financing and capital might be available.

presented in the accompanying financial statements, the Company has sustained recurring losses and negative cash flows from operations.

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

date that the financial statements for the year ended December 31, 2023 are issued.

However, management is working to address its cash

flow challenges, including raising additional capital, managing inventory levels, identifying alternative supply chain resources, and

managing operational expenses.

Historically,

the Company’s growth has been funded through a combination of sales of equity interests, third party debt, and working capital

The Company’s sales for 2023 decreased 16.5% compared to sales for 2022, as the overall RV market experienced a severe slowdown.

For the year ended December 31, 2023, we received net proceeds of $2,420,025 from issuing commitment shares in exchange for a short-term

convertible note, and $49,777 from warrant exercises.

On April 1, 2022, the Company completed an initial public offering and listing

of its shares on the Nasdaq Stock Market (IPO).

Proceeds from the IPO, net of costs, totaled $14,772,487, of which approximately $2,464,000

was used to pay down principal and accrued interest on high interest-bearing debt.

The remaining proceeds have thus far and will continue

to be used, in part, to stock inventory to keep up with demand and to build in-house assembly lines to improve the cash-flow cycle

and help reduce the four-month turnaround that the Company currently experiences from suppliers in Asia.

In the first half of 2022, a

distribution warehouse was set up in Indiana to better service customers throughout the U.S.

and an assembly facility was leased in Redmond,

Oregon for future expansion of the in-house assembly lines.

Additionally, management has secured a secondary source for lithium iron

phosphate cells used in its batteries that is based in Europe, should supply disruption issues with Asia arise.

Management believes that

these factors will contribute to achieving operating efficiency and profitability.

However, there can be no assurance that the Company

will be successful in achieving its objectives, including achieving operating efficiency and profitability.

accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the

realization of assets and the settlement of liabilities and commitments in the normal course of business;

however, the above conditions

raise substantial doubt about the Company’s ability to do so.

The financial statements do not include any adjustments to reflect

the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that

may result should the Company be unable to continue as a going concern.

preparation of financial statements in conformity with U.S.

GAAP requires 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 financial statements

and the reported amounts of revenues and expenses during the reporting period.

Actual results could vary materially from the estimates

that were used.

The Company’s significant accounting estimates include the carrying value of accounts receivable and inventory,

the depreciable lives of fixed assets, and stock-based compensation.

events, including the extent and the duration of the COVID-19-related economic impacts and their effects, cannot be predicted with certainty

and, accordingly, the Company’s accounting estimates require the exercise of judgment.

and Cash Equivalents

Company considers all cash amounts which are not subject to withdrawal restrictions or penalties and all highly liquid investments purchased

with an original maturity of three months or less from the date of purchase to be cash equivalents.

The Company maintains its cash balances

with high-quality financial institutions located in the United States.

Cash accounts are secured by the Federal Deposit Insurance Corporation

(“FDIC”) up to $250,000 per institution.

However, the Company believes that the disclosures are adequate to make the

information presented not misleading.

In the opinion of management, all adjustments (consisting primarily of normal recurring accruals)

considered necessary for a fair presentation have been included.

Unless otherwise noted, all references to shares and

stockholders in the accompanying financial statements have been restated retroactively, to reflect the equity structure of the C corporation

as of the beginning of the first period presented.

Reclassification of Prior Year Presentation

Certain prior year amounts have been reclassified

for consistency with current year presentation.

These reclassifications had no effect on the reported results of operations.

Going Concern, Liquidity and Capital Resources

The Company’s activities are subject to significant

risks and uncertainties, including failing to secure additional funding before the Company achieves sustainable revenue and profit from

The Company expects to continue to incur additional losses for the foreseeable future, and the Company may need to raise additional

debt or equity financing to expand its presence in the marketplace, develop new products, achieve operating efficiencies, and accomplish

its long-term business plan over the next several years.

There can be no assurance as to the availability or terms upon which such financing

and capital might be available.

As presented in the accompanying financial statements,

the Company has sustained recurring losses and negative cash flows from operations.

These factors raise substantial doubt about the Company’s

ability to continue as a going concern within twelve months after the date that the financial statements for the year ended December 31,

2024 are issued.

However, management is working to address its cash flow challenges, including raising additional capital, managing inventory

levels, identifying alternative supply chain resources, and managing operational expenses.

Historically, the Company’s growth has been

funded through a combination of sales of equity interests, third party debt, and working capital loans.

The Company’s sales for

2024 decreased 6.0 % compared to sales for 2023, as the overall RV market experienced a severe slowdown.

For the year ended December 31,

2024, we received net proceeds of $ 9,510,181 from issuance of common stock and an additional $ 185,434 from exercise of warrants.

year ended December 31, 2023, we received net proceeds of $ 2,420,025 from issuing commitment shares in exchange for a short-term convertible

note, and $ 49,777 from warrant exercises.

On April 1, 2022, the Company completed an initial public offering and listing of its shares

on the Nasdaq Stock Market (IPO).

The accompanying financial statements have been prepared

assuming that the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities

and commitments in the normal course of business;

however, the above conditions raise substantial doubt about the Company’s ability

The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification

of assets or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.

Use of Estimates

The preparation of financial statements in conformity

GAAP requires 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 financial statements and the reported amounts of revenue and expenses during the

reporting period.

Actual results could vary materially from the estimates that were used.

The Company’s significant accounting estimates

include the carrying value of accounts receivable and inventory, the depreciable lives of fixed assets, and stock-based compensation.

Future events, including the extent and the duration

of the COVID-19-related economic impacts and their effects, cannot be predicted with certainty and, accordingly, the Company’s accounting

estimates require the exercise of judgment.

Cash and Cash Equivalents

The Company considers all cash amounts which are not

subject to withdrawal restrictions or penalties and all highly liquid investments purchased with an original maturity of three months

or less from the date of purchase to be cash equivalents.

The Company maintains its cash balances with high-quality financial institutions

located in the United States.

Cash accounts are secured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000

per institution.

At times, balances may exceed federally insured limits.

Investment accounts are

placed in funds consisting of US Treasury-related ultra-short paper, which earned $125,854 during the year ended December 31, 2023.

The Company has not experienced any losses in such accounts and management believes that the Company is not exposed to any significant

credit risk with respect to its cash and cash equivalents.

As of December 31, 2023, cash balances exceeded FDIC limits by $2,280,856

and investment accounts totaling $1,125,100 are invested in US Treasury-related ultra-short paper.

receivable are recorded at the invoiced amount, are due within a year or less, and generally do not bear any interest.

The Company performs

ongoing credit evaluations of its customers and generally requires no collateral.

An allowance for uncollectible accounts is recorded

to reduce accounts receivable to the estimated amount that will be collected.

The allowance is based upon management’s review of

the accounts receivable aging and specific identification of potentially uncollectible balances.

Recoveries of accounts previously written

off and adjustments to the allowance for uncollectible accounts are recorded as adjustments to bad debt expense.

There was no allowance

for doubtful accounts as of December 31, 2023, as management believed all outstanding amounts to be fully collectible.

The allowance

for doubtful accounts totaled $ 18,804

as of December 31, 2022.

of December 31, 2023 and December 31, 2022, the Company had customer deposits totaling $ 17,423

respectively.

is stated at the lower of cost (first in, first out) or net realizable value and consists of batteries and accessories, resale items,

components, and related landing costs.

As of December 31, 2023 and December 31, 2022, the Company had inventory that consisted of finished

assemblies totaling $2,967,021 and $3,243,485, respectively, and raw materials (inventory components, parts, and packaging) totaling

$858,369 and $1,286,651, respectively.

The valuation of inventory includes fixed production overhead costs based on normal capacity of

the assembly warehouse.

Company periodically reviews its inventory for evidence of slow-moving or obsolete inventory and provides for an allowance when considered

The Company determined that no such reserve was necessary as of December 31, 2023 or December 31, 2022.

The Company prepays

for inventory purchases from foreign suppliers.

Prepaid inventory totaled $163,948 and $141,611 at December 31, 2023 and December 31,

2022, respectively, and included inventory in transit where title had passed to the Company but had not yet been physically received.

and Foreign Concentrations of Inventory Suppliers

the years ended December 31, 2023 and 2022, approximately 70% and 85%, respectively, of inventory purchases were made from foreign suppliers

Any adverse change in either the economic or political conditions abroad could negatively impact the Company’s supply

The inability to obtain product to meet sales demand could adversely affect results of operations.

However, the Company has secured

a secondary source for lithium iron phosphate cells used in its batteries from a supplier in Europe, enabling the Company to source materials

outside of Asia in the event it becomes necessary to do so.

and Equipment

and equipment are stated at cost less depreciation calculated on the straight-line basis over the estimated useful lives of the related

assets as follows:

of estimated useful lives

and transportation equipment

furniture and equipment

Manufacturing

improvements are amortized over the shorter of the lease term or their estimated useful lives.

renewals, and extraordinary repairs that extend the lives of the assets are capitalized;

other repairs and maintenance charges are expensed

The cost and related accumulated depreciation and amortization applicable to assets retired are removed from the accounts,

and the gain or loss on disposition is recognized in the Statements of Operations.

Company determines if an arrangement is a lease at inception.

Operating lease right-of-use (“ROU”) assets represent the Company’s

right to use an underlying asset during the lease term, and operating lease liabilities represent the Company’s obligation to make

lease payments arising from the lease.

Operating leases are included in ROU assets, current operating lease liabilities, and long-term

operating lease liabilities on the Company’s Balance Sheets.

Investment accounts are placed in funds consisting of US Treasury-related

ultra-short paper, which earned $86,121 and $125,755 during the years ended December 31, 2024 and 2023, respectively.

The Company has

not experienced any losses in such accounts and management believes that the Company is not exposed to any significant credit risk with

respect to its cash and cash equivalents.

As of December 31, 2024, cash balances exceeded FDIC limits by $277,522 and investment accounts

totaling $712 are invested in US Treasury-related ultra-short paper.

Accounts Receivable

Accounts receivable are recorded at the invoiced amount,

are due within a year or less, and generally do not bear any interest.

The Company performs ongoing credit evaluations of its customers

and generally requires no collateral.

An allowance for uncollectible accounts is recorded to reduce accounts receivable to the estimated

amount that will be collected.

The allowance is based upon management’s review of the accounts receivable aging and specific identification

of potentially uncollectible balances.

Recoveries of accounts previously written off and adjustments to the allowance for uncollectible

accounts are recorded as adjustments to bad debt expense.

There was no allowance for doubtful accounts as of December 31, 2024 or December

31, 2023, as management believed all outstanding amounts to be fully collectible.

Customer Deposits

As of December 31, 2024 and December 31, 2023, the

Company had customer deposits totaling $ 48,474 and $ 17,423 , respectively.

Inventory is stated at the lower of cost (first in,

first out) or net realizable value and consists of batteries and accessories, resale items, components, and related landing costs.

of December 31, 2024 and December 31, 2023, the Company had inventory that consisted of finished assemblies totaling $ 4,077,013 and $ 2,967,021 ,

respectively, and raw materials (inventory components, parts, and packaging) totaling $ 754,448 $ 858,369 , respectively.

The valuation of

inventory includes fixed production overhead costs based on normal capacity of the assembly warehouse.

The Company periodically reviews its inventory for

evidence of slow-moving or obsolete inventory and provides for an allowance when considered necessary.

The Company determined that no

such reserve was necessary as of December 31, 2024 or December 31, 2023.

The Company prepays for inventory purchases from foreign suppliers.

Prepaid inventory totaled $ 1,612,686 and $ 163,948 at December 31, 2024 and December 31, 2023, respectively, and included inventory in

transit where title had passed to the Company but had not yet been physically received.

Vendor and Foreign Concentrations of Inventory

During the years ended December 31, 2024 and 2023,

approximately 82 % and 70 %, respectively, of inventory purchases were made from foreign suppliers in Asia.

Any adverse change in either

the economic or political conditions abroad could negatively impact the Company’s supply chain.

The inability to obtain product

to meet sales demand could adversely affect results of operations.

However, the Company has secured a secondary source for lithium iron

phosphate cells used in its batteries from a supplier in Europe, enabling the Company to source materials outside of Asia in the event

it becomes necessary to do so.

Property and Equipment

Property and equipment are stated at cost less depreciation

calculated on the straight-line basis over the estimated useful lives of the related assets as follows:

Schedule of estimated useful lives

Vehicles and transportation equipment

Manufacturing equipment

Office furniture and equipment

Warehouse equipment

Tooling and molds

Leasehold improvements are amortized over the shorter

of the lease term or their estimated useful lives.

Betterments, renewals, and extraordinary repairs that

extend the lives of the assets are capitalized;

other repairs and maintenance charges are expensed as incurred.

The cost and related accumulated

depreciation and amortization applicable to assets retired are removed from the accounts, and the gain or loss on disposition is recognized

in the Statements of Operations.

The Company determines if an arrangement is a lease

at inception.

Operating lease right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset during

the lease term, and operating lease liabilities represent

the Company’s obligation to make lease payments

arising from the lease.

Operating leases are included in ROU assets, current operating lease liabilities, and long-term operating lease

liabilities on the Company’s Balance Sheets.

The Company does not have any finance leases.

ROU assets and lease liabilities are initially recognized based on the present value of the future minimum lease payments over the lease

term at commencement date calculated using the Company’s incremental borrowing rate applicable to the lease asset, unless the implicit

rate is readily determinable.

ROU assets also include any lease payments made at or before lease commencement and exclude any lease incentives

The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the

Company will exercise that option.

Leases with a term of 12 months or less are not recognized on the Company’s Balance Sheet.

Company’s leases do not contain any residual value guarantees.

Lease expense for minimum lease payments is recognized on a straight-line

basis over the lease term.

Company accounts for lease and non-lease components as a single lease component for all its leases.

of Long-Lived Assets

assets consist primarily of property and equipment.

When events or circumstances indicate the carrying value of a long-lived asset may

be impaired, the Company estimates the future undiscounted cash flows to be derived from the use and eventual disposition of the asset

to assess whether or not a potential impairment exists.

If the carrying value exceeds the estimate of future undiscounted cash flows,

the impairment is calculated as the excess of the carrying value of the asset over the estimate of its fair value.

Fair value is determined

primarily using the estimated cash flows discounted at a rate commensurate with the risk involved.

No long-lived asset impairment was

recognized during the years ended December 31, 2023 or 2022.

Company sells the majority of its products to customers along with conditional repair or replacement warranties.

The Company’s

branded DC mobile chargers are warrantied for two years from the date of sale and its branded VPR 4EVER Classic and Platinum batteries

are warrantied at gradually lesser levels over a twelve-year period from date of sale.

The Company determines its estimated liability

for warranty claims based on the Company’s experience of the amount of claims actually made.

Management estimates no liability

as of December 31, 2023 and 2022 because, historically, there have been very few claims and costs for repairs or replacement parts

have been nominal.

It is possible that the Company’s estimate of liability for product liability claims will change in the near

Company does not have a formal return policy but does accept returns under its warranty policies.

Lease ROU assets and lease liabilities are initially

recognized based on the present value of the future minimum lease payments over the lease term at commencement date calculated using the

Company’s incremental borrowing rate applicable to the lease asset, unless the implicit rate is readily determinable.

also include any lease payments made at or before lease commencement and exclude any lease incentives received.

The Company’s lease

terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

Leases with a term of 12 months or less

are not recognized on the Company’s Balance Sheet.

The Company’s leases do not contain any residual value guarantees.

expense for minimum lease payments is recognized on a straight-line basis over the lease term.

The Company accounts for lease and non-lease components

as a single lease component for all its leases.

Impairment of Long-Lived Assets

Long-lived assets consist primarily of property and

When events or circumstances indicate the carrying value of a long-lived asset may be impaired, the Company estimates the future

undiscounted cash flows to be derived from the use and eventual disposition of the asset to assess whether or not a potential impairment

If the carrying value exceeds the estimate of future undiscounted cash flows, the impairment is calculated as the excess of the

carrying value of the asset over the estimate of its fair value.

Fair value is determined primarily using the estimated cash flows discounted

at a rate commensurate with the risk involved.

No long-lived asset impairment was recognized during the years ended December 31, 2024

Product Warranties

The Company sells the majority of its products to

customers along with conditional repair or replacement warranties.

The Company’s branded DC mobile chargers are warrantied for two

years from the date of sale and its branded VPR 4EVER Classic and Platinum batteries are warrantied at gradually lesser levels over a

twelve-year period from date of sale.

The Company determines its estimated liability for warranty claims based on the Company’s

experience of the amount of claims actually made.

Management estimates no liability as of December 31, 2024 and 2023 because, historically,

there have been very few claims and costs for repairs or replacement parts have been nominal.

It is possible that the Company’s

estimate of liability for product liability claims will change in the near term.

Liability for Refunds

The Company does not have a formal return policy but

does accept returns under its warranty policies.

Returns have historically been minimal.

No refund liability was recognized in the year ended December 31, 2022 or December 31, 2023.

No refund liability was recognized in the year

ended December 31, 2023 or December 31, 2024.

Revenue is recorded net of this amount.

Any returns of discontinued product are not added back to inventory and therefore related costs are nominal and not recorded as an asset.

Company’s revenue is generated from the sale of products consisting primarily of batteries and accessories.

The Company recognizes

revenue when control of goods or services is transferred to its customers in an amount that reflects the consideration it is expected

to be entitled to in exchange for those goods or services.

To determine revenue recognition, the Company performs the following five

(i) identify the contract(s) with a customer;

Any returns of discontinued product are not added

back to inventory and therefore related costs are nominal and not recorded as an asset.

Revenue Recognition

The Company’s revenue is generated from the

sale of products consisting primarily of batteries and accessories.

The Company recognizes revenue when control of goods or services is

transferred to its customers in an amount that reflects the consideration it is expected to be entitled to in exchange for those goods

To determine revenue recognition, the Company performs the following five steps:

(i) identify the contract(s) with a

(ii) identify the performance obligation(s) in the contract;

(iii) determine

the transaction price;

(iv) allocate the transaction price to the performance obligation(s) in the contract;

and (v) recognize

revenue when (or as) the performance obligation(s) are satisfied.

Revenue is recognized upon shipment or delivery to the customer, as

that is when the customer obtains control of the promised goods and the Company’s performance obligation is considered satisfied.

As such, accounts receivable is recorded at the time of shipment or will call, when the Company’s right to the consideration becomes

unconditional and the Company determines there are no uncertainties regarding payment terms or transfer of control.

Concentration

of Major Customers

customer is considered a major customer when net revenue attributable to the customer exceeds 10% of total revenue for the period or

outstanding receivable balances exceed 10% of total receivables.

the year ended December 31, 2023, sales to two customers totaled $1.2 million, comprising approximately 21% of total sales.

These customers

did not have accounts receivable balances as of December 31, 2023, but four other customers had accounts receivable balances totaling

$140,000, representing 90% of total accounts receivable as of December 31, 2023.

During the year ended December 31, 2022, sales to three

customers totaled $2.9 million, comprising approximately 41% of total sales.

One of the customers did not have an accounts receivable

balance as of December 31, 2022, and the other two customers had accounts receivable balances representing 43% of total accounts receivable

as of December 31, 2022.

and Handling Costs

and handling fees billed to customers are classified on the Statement of Operations as “Sales, net” and totaled $70,712 and

$23,188 during the years ended December 31, 2023 and 2022, respectively.

Shipping and handling costs for shipping product to customers

totaled $199,288 and $169,335 during the years ended December 31, 2023 and 2022, respectively, and are classified in selling, general

and administrative expense in the accompanying Statements of Operations.

and Marketing Costs

Company expenses advertising and marketing costs as incurred.

Advertising and marketing expense totaled $559,099 and $239,814 for the

years ended December 31, 2023 and 2022, respectively, and is included in selling, general and administrative expense in the accompanying

Statements of Operations.

and Development

and development costs are expensed as incurred.

Research and development costs charged to expense amounted to $391,148 and $270,054 for

the years ended December 31, 2023 and 2022, respectively, and are included in selling, general and administrative expenses in the accompanying

(iii) determine the transaction price;

(iv) allocate

the transaction price to the performance obligation(s) in the contract;

and (v) recognize revenue when (or as) the performance obligation(s)

are satisfied.

Revenue is recognized upon shipment or delivery to the customer, as that is when the customer obtains control of the promised

goods and the Company’s performance obligation is considered satisfied.

As such, accounts receivable is recorded at the time of

shipment or will call, when the Company’s right to the consideration becomes unconditional and the Company determines there are

no uncertainties regarding payment terms or transfer of control.

Concentration of Major Customers

A customer is considered a major customer when net

revenue attributable to the customer exceeds 10% of total revenue for the period or outstanding receivable balances exceed 10% of total

During the year ended December 31, 2024, sales to

one customer totaled $ 726,292 , or approximately 14 % of our total sales and had 6 % of our outstanding accounts receivable at December 31,

Four other customers had accounts receivable balances totaling $ 339,111 , representing 60 % of total accounts receivable as of December

Sales to each of our other customers did not exceed 10% during this period.

During the year ended December 31, 2023, sales to

two customers totaled $ 1,237,232 , or approximately 21 % of our total sales, and these customers did not have any outstanding accounts receivable at December 31,

While these customers did not have accounts receivable balances as of December 31, 2023, four other customers had accounts receivable

balances totaling $ 142,255 , representing 91 % of total accounts receivable as of December 31, 2023.

Sales to each of our other customers

did not exceed 10% during this period.

Shipping and Handling Costs

Shipping and handling fees billed to customers are

classified on the Statement of Operations as “Net sales” and totaled $ 99,201 and $ 70,712 during the years ended December 31,

2024 and 2023, respectively.

Shipping and handling costs for shipping product to customers totaled $ 260,946 and $ 199,288 during the years

ended December 31, 2024 and 2023, respectively, and are classified in selling, general and administrative expense in the accompanying

Statements of Operations.

November 1, 2021, the Company converted from an LLC to a C corporation and, as a result, became subject to corporate federal and state

income taxes.

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

the financial statement carrying amounts of exiting assets and liabilities and their respective tax basis.

Deferred tax assets, including

tax loss and credit carryforwards, and liabilities are measured using the 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.

Deferred income tax expense represents

the change during the period in the deferred tax assets and deferred tax liabilities.

Deferred tax assets are reduced by a valuation

allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not

March 27, 2020, the United States enacted the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”).

Act is an emergency economic stimulus package that includes spending and tax breaks to strengthen the United States economy and fund

a nationwide effort to curtail the effect of COVID-19.

The CARES Act provides sweeping tax changes in response to the COVID-19 pandemic.

Some of the more significant provisions are removal of certain limitations on utilization of net operating losses, increasing the loss

carryback period for certain losses to five years, and increasing the ability to deduct interest expense, as well as amending certain

provisions of the previously enacted Tax Cuts and JOBS Act.

As of September 30, 2023 and December 31, 2022, the Company has not recorded

any income tax provision/(benefit) resulting from the CARES Act, mainly due to the Company’s history of net operating losses.

December 27, 2020, the United States enacted the Consolidated Appropriations Act of 2021 (the “CAA”).

The CAA includes provisions

extending certain CARES Act provisions and adds coronavirus relief, tax and health extenders.

The Company will continue to evaluate the

impact of the CAA and its impact on its financial statements in 2023 and beyond.

Value of Financial Instruments

Company accounts for its financial assets and liabilities in accordance with ASC Topic 820, Fair Value Measurement .

820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value, as follows:

Quoted prices (unadjusted) in active markets for identical assets or liabilities that are accessible at the measurement date.

The fair value hierarchy gives the highest priority to Level 1 inputs.

Observable prices that are based on inputs not quoted on active markets but corroborated by market data.

These inputs include

quoted prices for similar assets or liabilities;

Advertising and Marketing Costs

The Company expenses advertising and marketing costs

Advertising and marketing expense totaled $ 926,430 and $ 929,220 for the years ended December 31, 2024 and 2023, respectively,

and is included in selling, general and administrative expense in the accompanying Statements of Operations.

Research and Development

Research and development costs are expensed as incurred.

Research and development costs charged to expense amounted to $ 295,292 and $ 397,662 for the years ended December 31, 2024 and 2023, respectively,

and are included in selling, general and administrative expenses in the accompanying Statements of Operations.

Effective November 1, 2021, the Company converted

from an LLC to a C corporation and, as a result, became subject to corporate federal and state income taxes.

Deferred tax assets and liabilities

are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of exiting

assets and liabilities and their respective tax basis.

Deferred tax assets, including tax loss and credit carryforwards, and liabilities

are measured using the 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.

Deferred income tax expense represents the change during the period in the deferred tax assets

and deferred tax liabilities.

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more

likely than not that some portion or all of the deferred tax assets will not be realized.

On March 27, 2020, the United States enacted the Coronavirus

Aid, Relief and Economic Security Act (the “CARES Act”).

The CARES Act is an emergency economic stimulus package that includes

spending and tax breaks to strengthen the United States economy and fund a nationwide effort to curtail the effect of COVID-19.

Act provides sweeping tax changes in response to the COVID-19 pandemic.

Some of the more significant provisions are removal of certain

limitations on utilization of net operating losses, increasing the loss carryback period for certain losses to five years, and increasing

the ability to deduct interest expense, as well as amending certain provisions of the previously enacted Tax Cuts and JOBS Act.

December 31, 2024 and December 31, 2023, the Company has not recorded any income tax provision/(benefit) resulting from the CARES Act,

mainly due to the Company’s history of net operating losses.

On December 27, 2020, the United States enacted the

Consolidated Appropriations Act of 2021 (the “CAA”).

The CAA includes provisions extending certain CARES Act provisions and

adds coronavirus relief, tax and health extenders.

The Company will continue to evaluate the impact of the CAA and its impact on its financial

statements in 2024 and beyond.

Fair Value of Financial Instruments

The Company accounts for its financial assets and

liabilities in accordance with ASC Topic 820, Fair Value Measurement .

ASC Topic 820 establishes a fair value hierarchy that prioritizes

the inputs to valuation techniques used to measure fair value, as follows:

Quoted prices (unadjusted) in active

markets for identical assets or liabilities that are accessible at the measurement date.

The fair value hierarchy gives the highest priority

to Level 1 inputs.

Observable prices that are based on

inputs not quoted on active markets but corroborated by market data.

These inputs include quoted prices for similar assets or liabilities;

quoted market prices in markets that are not active;

or other inputs that are observable

or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Unobservable inputs are used when little or no market data is available.

The fair value hierarchy gives the lowest priority to

Level 3 inputs.

In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the

use of unobservable inputs to the extent possible, as well as consider counterparty credit risk in the assessment of fair value.

Company’s financial instruments consist principally of cash and cash equivalents, accounts receivable, accounts payable, short-term

revolving loans, stockholder promissory notes, and long-term debt.

The fair value of cash and cash equivalents, accounts receivable,

accounts payable, and short-term revolving loans approximates their respective carrying values because of the short-term nature of those

The fair value of the stockholder promissory notes, convertible notes, and long-term debt approximates their respective

carrying values because the interest rate approximates market rates available to the Company for similar obligations with the same maturities.

Company currently operates in one reportable segment.

An operating segment is defined as a component of an enterprise for which discrete

financial information is available and is reviewed regularly by the Chief Operating Decision Maker (“CODM”) to evaluate performance

and make operating decisions.

The Company has identified its CODM as the Chief Executive Officer.

and Diluted Net Loss Per Share

basic net loss per share is calculated by dividing the net loss by the weighted average number of shares outstanding during the period.

Diluted earnings or loss per share adjusts the basic earnings or loss per share for the potentially dilutive impact of securities (e.g.,

options and warrants).

calculate basic and diluted net loss per share using the weighted average number of common shares outstanding during the periods presented.

In periods of a net loss position, basic and diluted weighted average common shares are the same.

For the diluted earnings per share

calculation, we adjust the weighted average number of common shares outstanding to include dilutive stock options, warrants, unvested

restricted stock units and shares associated with the conversion of any convertible notes or preferred stock, when applicable.

the if-converted method for calculating any potential dilutive effect of convertible notes and convertible preferred stock on diluted

or other inputs that are observable or can be corroborated by observable market data

for substantially the full term of the assets or liabilities.

Unobservable inputs are used when

little or no market data is available.

The fair value hierarchy gives the lowest priority to Level 3 inputs.

In determining fair value,

we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible,

as well as consider counterparty credit risk in the assessment of fair value.

The Company’s financial instruments consist

principally of cash and cash equivalents, accounts receivable, accounts payable, short-term revolving loans, stockholder promissory notes,

and long-term debt.

The fair value of cash and cash equivalents, accounts receivable, accounts payable, and short-term revolving loans

approximates their respective carrying values because of the short-term nature of those instruments.

The fair value of the stockholder

promissory notes, convertible notes, and long-term debt approximates their respective carrying values because the interest rate approximates

market rates available to the Company for similar obligations with the same maturities.

Basic and Diluted Net Loss Per Share

The basic net loss per share is calculated by dividing

the net loss by the weighted average number of shares outstanding during the period.

Diluted earnings or loss per share adjusts the basic

earnings or loss per share for the potentially dilutive impact of securities (e.g., options and warrants).

We calculate basic and diluted net loss per share

using the weighted average number of common shares outstanding during the periods presented.

In periods of a net loss position, basic

and diluted weighted average common shares are the same.

For the diluted earnings per share calculation, we adjust the weighted average

number of common shares outstanding to include dilutive stock options, warrants, unvested restricted stock units and shares associated

with the conversion of any convertible notes or preferred stock, when applicable.

We use the if-converted method for calculating any potential

dilutive effect of convertible notes and convertible preferred stock on diluted net loss per share.

The following shows the amounts used in computing

net loss per share:

following shows the amounts used in computing net loss per share:

of net loss per share

Ended December 31,

Schedule of net loss per share

Years Ended December 31,

$ ( 13,479,475 )

$ ( 7,456,274 )

Weighted average common shares outstanding –

basic and diluted

Weighted average common shares outstanding – basic and diluted

Basic and diluted net loss per share

of December 31, 2023 and 2022, the Company has outstanding warrants, options, and restricted stock units (“RSUs”) convertible

into 1,914,415 and 1,717,936 shares of common stock, respectively.

The following table sets forth the number of shares excluded

from the computation of diluted loss per share, as their inclusion would have been anti-dilutive.

of anti-dilutive share

ended December 31,

As of December 31, 2024 and 2023, the Company has

outstanding warrants, options, and restricted stock units (“RSUs”) convertible into 5,392,395 and 19,167 shares of common

stock, respectively.

The following table sets forth the number of shares excluded from the computation of diluted loss per share, as their

inclusion would have been anti-dilutive.

Schedule of anti-dilutive share

Years ended December 31,

Warrants – Series A

Warrants – Series B

Stock options

Company accounts for stock-based compensation in accordance with ASC 718, “Compensation—Stock Compensation”, which

requires compensation costs to be recognized at grant date fair value over the requisite service period of each of the awards.

recognizes forfeitures of awards as they occur.

fair value of stock options is determined using the Black-Scholes-Merton option pricing model.

In order to calculate the fair value of

the options, certain assumptions are made regarding the components of the model, including risk-free interest rate, volatility, expected

dividend yield and expected life.

Changes to assumptions could cause significant adjustments to the valuation.

Accounting Pronouncements

March 2023, the FASB issued ASU 2023-02, “Investments—Equity Method and Joint Ventures (Topic 323):

Accounting for Investments

in Tax Credit Structures Using the Proportional Amortization Method.” This ASU was issued to allow reporting entities to consistently

account for equity investments made primarily for the purpose of receiving income tax credits and other income tax benefits.

is effective for the Company for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years.

The Company will adopt this standard effective January 1, 2024, but does not anticipate an impact on the Company’s financial statements

or disclosures.

June 2022, the FASB issued ASU 2022-03, “Fair Value Measurement (Topic 820):

Fair Value Measurement of Equity Securities Subject

to Contractual Sale Restrictions,” which amends the guidance in Topic 820, Fair Value Measurement , to clarify that a contractual

restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is

not considered in measuring fair value.

The amendments also clarify that an entity cannot, as a separate unit of account, recognize and

measure a contractual sale restriction.

In addition, the ASU introduces new disclosure requirements for equity securities subject to

contractual sale restrictions that are measured at fair value.

ASU 2022-03 is effective for fiscal years beginning after December 15,

2023, including interim periods within those fiscal years for public business entities.

The Company adopted this standard, effective

January 1, 2024, but does not anticipate an impact on the Company’s financial statements or disclosures.

July 2023, the FASB issued ASU 2023-03, amending “Presentation of Financial Statements (Topic 205),” “Income Statement

– Reporting Comprehensive Income (Topic 220),” “Distinguishing Liabilities from Equity (Topic 480),” “Equity

(Topic 505),” and “Compensation – Stock Compensation (Topic 718)”.

The Company adopted this standard, effective

December 15, 2023.

Guidance Issued but Not Yet Adopted

October 2023, the FASB issued ASU 2023-06, “Disclosure Improvements:

Codification Amendments in Response to the SEC’s Disclosure

Update and Simplification Initiative,” which affects a variety of Topics in the Codification.

The Company is currently evaluating

the impact of this standard on our financial statements.

Property and Equipment, Net

Property and equipment consist of the

of property and equipment

Stock-Based Compensation

The Company accounts for stock-based compensation

in accordance with ASC 718, “Compensation—Stock Compensation”, which requires compensation costs to be recognized at

grant date fair value over the requisite service period of each of the awards.

The Company recognizes forfeitures of awards as they occur.

The fair value of stock options is determined using

the Black-Scholes-Merton option pricing model.

In order to calculate the fair value of the options, certain assumptions are made regarding

the components of the model, including risk-free interest rate, volatility, expected dividend yield and expected life.

Changes to assumptions

could cause significant adjustments to the valuation.

New Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, “Segment

Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.” This ASU was issued to clarify reporting requirements for

public entities that are required to report segment information in accordance with Topic 280, Segment Reporting.

The Company will adopt

this standard effective January 1, 2024, but does not anticipate an impact on the Company’s financial statements or disclosures

in this Report, as we currently have one reportable segment.

In March 2023, the FASB issued ASU 2023-02, “Investments—Equity

Method and Joint Ventures (Topic 323):

Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method.”

This ASU was issued to allow reporting entities to consistently account for equity investments made primarily for the purpose of receiving

income tax credits and other income tax benefits.

ASU 2023-02 is effective for the Company for fiscal years beginning after December 15,

2023, including interim periods within those fiscal years.

The Company will adopt this standard effective January 1, 2024, but does not

anticipate an impact on the Company’s financial statements or disclosures.

In June 2022, the FASB issued ASU 2022-03, “Fair

Value Measurement (Topic 820):

Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions,” which amends

the guidance in Topic 820, Fair Value Measurement , to clarify that a contractual restriction on the sale of an equity security

is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value.

The amendments

also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction.

the ASU introduces new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair

ASU 2022-03 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years

for public business entities.

The Company will adopt this standard effective January 1, 2024, but does not anticipate an impact on the

Company’s financial statements or disclosures.

In July 2023, the FASB issued ASU 2023-03, amending

“Presentation of Financial Statements (Topic 205),” “Income Statement – Reporting Comprehensive Income (Topic

220),” “Distinguishing Liabilities from Equity (Topic 480),” “Equity (Topic 505),” and “Compensation

– Stock Compensation (Topic 718).” The company adopted this standard effective December 15, 2023.

Accounting Guidance Issued but Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, “Income

Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40).” This ASU was issued

to improve the disclosures about an entity’s expenses, and require certain types of expenses to be disclosed individually.

is currently evaluating the impact of this standard on its financial statement.

In March 2024, the FASB issued ASU 2024-02, “Codification

Improvements—Amendments to Remove References to the Concepts Statements,” to address suggestions received from stakeholders.

The Company is currently evaluating the impact of this standard on its financial statements.

In March 2024, the FASB issued ASU 2024-01, “Compensation—Stock

Compensation,” which adds an illustrative example to demonstrate how to apply the guidance in paragraph 718-10-15-3.

is currently evaluating the impact of this standard on its financial statements.

In October 2023, the FASB issued ASU 2023-06, “Disclosure

Improvements:

Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative,” which affects

a variety of Topics in the Codification.

The company is currently evaluating the impact of this standard on our financial statements.

Property and Equipment,

Property and equipment consist of the following:

Schedule of property and equipment

Years Ended December 31,

Vehicles and transportation equipment

Leasehold improvements

Office furniture and equipment

Manufacturing equipment

Office furniture and equipment

Warehouse equipment

Tooling and Molds

Leasehold improvements

accumulated depreciation

Property and equipment, net

Depreciation expense

was $ 205,723 and

$ 164,767 for

Depreciation expense was $ 173,973 and $ 205,723 for

the years ended December 31, 2024 and 2023, respectively.

There were disposals and sales of fixed assets during the years ended December 31, 2023 and 2022 resulting in the net cash received of

respectively.

As a result of disposals and sales of fixed assets, the Company recognized a loss of $3,426 during the year ended December

31, 2023 and a gain of $13,312 during the year ended December 31, 2022.

Accrued Expenses and Other Current Liabilities

Accrued expenses

and other current liabilities consist of the following:

of accrued expenses and other current liabilities

Ended December 31,

There were disposals and sales of fixed assets during the years ended December

31, 2024 and 2023 resulting in the net cash received of $ 132,611 and $ 36,748 , respectively.

As a result of disposals and sales of fixed

assets we recognized losses during the year ended December 31, 2024 and 2023 of $ 146,760 and $ 3,426 , respectively.

The majority of the

disposals in the year ending December 31, 2024 were for equipment and leasehold improvements when we terminated the lease of our second

warehouse in Redmond, Oregon in order to reduce ongoing monthly expenses.

Accrued Expenses and Other

Current Liabilities

Accrued expenses and other current liabilities consist

of the following:

Schedule of accrued expenses and other current liabilities

Years Ended December 31,

Accrued salaries and payroll liabilities

Rebate liability

Franchise tax

Deferred income and deposit (sublease)

Accrued interest

expenses and other current liabilities

Liabilities for Sale of Future Revenues

December 8, 2020 and January 26, 2021, Reliant Funding, under two separate ACH Total Receipts Purchase Agreements (“Purchase Agreements”),

purchased a 50% interest in the Company’s future revenues for a total aggregate purchase price of $250,000.

Pursuant to the terms

of the Purchase Agreements, the purchased percentage continued to be owned by Reliant Funding, until the Company paid the full purchased

amount of $349,750.

Repayment of the purchased amount was achieved through 252 daily bank account withdrawals of $1,388 through December

15, 2021 and $694 thereafter through January 26, 2022.

There were no payments made in the year ended December 31, 2023.

year ended December 31, 2022, the company repaid a total of $11,797, including $295 of interest.

Interest was recognized at an effective

annual interest rate of approximately 71%.

The Purchase Agreements were secured by substantially all of the assets of the Company.

of December 31, 2023 and 2022, the Company had no remaining liability related to the Purchase Agreements.

Short-Term Revolving Loans

2020, the Company received funds under four unsecured Working Capital Loan Agreements (“WC Loans”).

As of December 31, 2022,

the loans had been repaid and a balance of $0 was outstanding.

Under the WC Loan Agreements and in accordance with the modified terms,

the Company was subject to monthly extended maturity interest of one percent on the ending outstanding monthly balance which increased

one percent for each month beyond the extended maturity date.

The WC Loans were repaid in full in April 2022.

The terms of each WC Loan are summarized

$200,000 limit –

dated March 22, 2020;

monthly interest-only payments at 15% annual interest;

principal due 12 months from date of issue.

was modified effective January 1, 2021 to extend the maturity date to December 31, 2021.

The Company paid $50,000 towards the principal

balance in November 2021.

The balance of $150,000 was paid in full in April 2022 (see below).

$400,000 limit –

dated August 31, 2020;

monthly interest-only payments at 10% annual interest;

pursuant to the WC Loan, the maturity was to be determined

by mutual agreement and was to be at least 30 days after a maturity date is agreed upon.

The note was modified effective January

1, 2021 to establish a maturity date of December 31, 2021, and was paid in full in April 2022 (see below).

All fees incurred in connection with obtaining

and modifying these agreements were nominal and, given the short-term maturity of one year, were expensed as incurred.

There was no accounting

impact to the financial statements related to the modifications.

Franchise tax

Accrued expenses and other current liabilities

Long-Term Debt

Long-term debt consisted

of the following at December 31, 2023 and 2022:

of long term debt payment

secured promissory notes – various investors.

Monthly payments of interest only at 10% plus deferred interest of 5% accrued

monthly to be paid at maturity.

A minimum of one year interest is due at maturity.

Matures the earlier of (a) May 15, 2023, (b) the

closing of a qualified subsequent financing or (c) the closing of a change of control.

The notes are senior to all other debt and

are secured by substantially all assets of the Company.

The notes included detachable warrants to purchase 482,268 shares of common

stock at an exercise price of $3.32 per share (see Note 11, Stockholders’ Equity ).

Debt issuance costs and discount

totaling $1,287,160 at date of issuance were being amortized and recognized as additional interest expense over the term of the notes

using the straight-line method because it was not substantially different from the effective interest rate method.

We determined

the expected life of the notes to be the contractual term.

Interest expense related to these notes includes amortization of debt

issuance costs and discount in the amount of $0 and $1,196,843, respectively, for the years ended December 31, 2023 and 2022, respectively.

The notes were paid in full in April 2022.

Payable in monthly installments of $332, including interest at 5.8% per annum, due August 2025, secured by equipment

and personally guaranteed by a co-founder.

Note payable – credit

Payable in monthly installments of $508, including interest at 5.45% per annum, due July 2026, secured by a vehicle and personally

guaranteed by a co-founder.

Long-term debt consisted of the following at December

31, 2024 and 2023:

Schedule of long term debt payment

December 31, 2024

December 31, 2023

Note payable – bank.

Payable in monthly installments of $ 332 , including interest at 5.8 % per annum, due August 2025 , secured by equipment and personally guaranteed by a co-founder.

Note payable – credit union.

Payable in monthly installments of $ 508 , including interest at 5.45 % per annum, due July 2026 , secured by a vehicle and personally guaranteed by a co-founder.

This note was paid in full in March 2024.

Note payable – SBA.

Economic Injury Disaster Loan payable in monthly installments of $731, including interest at 3.75% per annum, due May 2050, and personally

guaranteed by a co-founder.

Note payable – individual.

Monthly payments of interest only at 10% per annum, matured December 31, 2021 resulting in the entire principal balance recorded

in current portion of long-term debt on the accompanying Balance Sheets for the year ending December 31, 2021;

pursuant to the note,

the past due balance is subject to 1% additional monthly interest which increases one percent for each month beyond maturity date,

The Company remained in compliance with the extended maturity interest payments and paid the note in full in April 2022.

Note payable – finance

Payable in monthly installments of $994, including interest at 8.5% per annum, due July 2026, secured by a vehicle and personally

guaranteed by a stockholder.

The Note was paid in full September 2022.

Note payable – finance

Payable in monthly installments of $2,204, including interest at 11.21% per annum, due August 2026, secured by a vehicle

and personally guaranteed by a co-founder.

The note was paid in full January 2023.

payable – The Company has acquired six notes payable to GM Financial for vehicles.

In April 2022, the Company secured

a commercial line up to $300,000 to be used to finance vehicle purchases.

The agreement expired in April 2023 but was renewed

for a commercial line up to $350,000 and prevailing GM Financial existing term notes will remain.

Economic Injury Disaster Loan payable in monthly installments of $ 731 , including interest at 3.75 % per annum, due May 2050 , and personally guaranteed by a co-founder.

Notes payable – The Company has acquired six notes payable to GM Financial for vehicles.

In April 2022, the Company secured a commercial line up to $300,000 to be used to finance vehicle purchases.

The agreement expired in April 2023 but was renewed for a commercial line up to $350,000 and prevailing GM Financial existing term notes will remain.

The new agreement expires in April 2024.

One note was paid off when the corresponding vehicle was sold in May 2023, so there are five notes remaining at December 31, 2024.

The notes are currently payable in aggregate monthly installments of $4,084, including interest at rates ranging from

5.89% to 7.29% per annum, mature at various dates from October 2027 to May of 2028, and are secured by the related vehicles.

of the notes are personally guaranteed by a co-founder.

The notes are currently payable in aggregate monthly installments of $ 4,084 , including interest at rates ranging from 5.89% to 7.29% per annum, mature at various dates from October 2027 to May of 2028 , and are secured by the related vehicles.

Two of the notes are personally guaranteed by a co-founder.

Two of the notes were paid in full in February 2024;

these notes had a combined

principal balance of $72,115 as of December 31, 2023.

current portion

debt, net of unamortized debt discount and current portion

maturities of long-term debt are as follows:

of Maturities of Long-Term Debt

these notes had a combined principal balance of $ 72,115 as of December 31, 2024.

Less current portion

Long-term debt, net of unamortized debt discount and current portion

Future maturities of long-term debt are as follows:

Schedule of maturities of long-term debt

Years ending December 31,

Promissory Notes

of December 31, 2023 and December 31, 2022, the Company had an outstanding principal balance of $762,500 and $825,000 due to stockholders

under unsecured Promissory Notes Agreements (“Notes”).

As of December 31, 2024 and December 31, 2023, the

Company had an outstanding principal balance of $ 0 and $ 762,500 due to stockholders under unsecured Promissory Notes Agreements (“Notes”).

The Notes require monthly interest-only payments at 10 % per annum.

The Notes mature at various dates from January 2024to December 2024 as follows:

January 2024 - $62,500;

August 2024 - $500,000;

The Notes would have matured in September 2024 and December 2024 as

September 2024 - $500,000 (this Note would have matured in August 2023, but in June 2023, an agreement was signed extending the

maturity date to August 2024, and in June 2024, an agreement was signed further extending the maturity date to September 2024);

2024 - $200,000.

One note, for $500,000, originally had a maturity date of August 2023, but an agreement signed on June 30, 2023 extended

the maturity date to August 2024.

paid to the stockholders under the Notes totaled $82,508 and $82,508 during the years ended December 31, 2023 and 2022, respectively.

There was no accrued interest as of December 31, 2023 or 2022 related to these Notes.

Convertible Note and Equity Line of Credit

A note for $62,500 that matured in January 2024 was paid in January 2024, and Notes for $500,000 that matured in September

2024 and $200,000 that matured in December 2024 were both paid in August 2024.

As of December 31, 2024, there were no Notes outstanding.

Interest paid to the stockholders under the Notes

totaled $ 42,862 and $ 82,508 during the years ended December 31, 2024 and 2023, respectively.

There was no accrued interest as of December

31, 2024 or 2023 related to these Notes.

Equity and Debt Financings

August 2024 Public Offering

On August 8, 2024, the Company sold

in the August 2024 Public Offering, (i) 33,402,000 Common Units, (pre-Reverse Stock Split), each consisting of one share of common stock,

two Series A Warrants and one Series B Warrant, and (ii) 16,598,000 Pre-Funded Units (pre-Reverse Stock Split), each consisting of one

Pre-Funded Warrant, two Series A Warrants, and one Series B Warrant, through the Underwriter.

In addition, the Company granted

the Underwriter a 45-day option to purchase additional shares of common stock and/or Pre-Funded Warrants and/or Series A Warrants and/or

Series B Warrants, representing up to 15% of the number of the respective securities sold in the August 2024 Public Offering, solely to

cover over-allotments, if any.

The Underwriter partially exercised its over-allotment option with respect to 15,000,000 Series A Warrants

and 7,500,000 Series B Warrants (pre-Reverse Stock Split).

The Common Units were sold at a

price of $ 0.20 per unit and the Pre-Funded Warrants were sold at a price of $ 0.199 per unit (pre-Reverse Stock Split).

The Pre-Funded Warrants were immediately

exercisable at an exercise price of $ 0.001 per share (Pre-Reverse Stock Split) and could be exercised at any time until all Pre-Funded

Warrants are exercised in full.

As of December 31, 2024, all Pre-Funded Warrants have been exercised.

Each Series A Warrant is exercisable

at any time or times beginning on September 30, 2024, which was the first trading day following the Company’s notice to the Series

A Warrant holders of stockholder approval received at the Company’s annual meeting of stockholders held on September 27, 2024 (the

“2024 Annual Meeting”), and will expire five years from such date.

Each Series A Warrant was initially exercisable at an exercise

price of $ 24.00 per share of common stock (post-Reverse Stock Split).

The exercise price of the Series A Warrants was subject to reduction

on the 11 th trading day after the stockholder approval to the greater of the lowest daily volume weighted average price (“VWAP”)

during the ten trading day period following the stockholder approval and the floor price of $ 5.206 (representing 20% of the lower of our

common stock’s closing price on The Nasdaq Capital Market on the date that we priced the August 2024 Public Offering (post-Reverse

Stock Split) or our common stock’s average closing price on The Nasdaq Capital Market for the five trading days ending on such date

(such lower price, without giving effect to such 20% reduction, the “Nasdaq Minimum Price”), and the number of shares issuable

upon exercise would be proportionately adjusted such that the aggregate exercise price would remain unchanged.

As of September 30, 2024, there

would have been 5,301,592 shares of common stock (post-Reverse Stock Split and assuming the Adjustment had occurred on September

30, 2024) issuable upon exercise of the Series A Warrants.

Subsequent to September 30, 2024, the exercise price under the Series A Warrants

was reduced to the floor price of $ 5.206 (representing 20% of the Nasdaq Minimum Price, post-Reverse Stock Split), beginning on October

14, 2024, the 11 th trading day following stockholder approval.

As of December 31, 2024, 14,900 shares of common stock have

been issued upon exercise of Series A Warrants and 5,286,692 shares of Common stock remain issuable upon exercise of Series A Warrants.

Each Series B Warrant was exercisable

immediately upon issuance at an exercise price of $0.10 per share (post-Reverse Stock Split).

The number of shares of common stock issuable

under the Series B Warrants were subject to adjustment using a reset price based on the weighted average price of common stock over a

rolling five-trading-day period between the issuance date of the Class B Warrants and the close of trading on the tenth trading day following

stockholder approval, subject to certain floor prices.

As of September 30, 2024, 342,588 shares of Common stock (post-Reverse Stock Split)

had been issued upon exercise of Series B Warrants and there were 1,032,198 shares of Common stock (post-Reverse Stock Split) issuable

upon exercise of Series B Warrants based on the reset price of $ 5.45 (representing the lowest arithmetic average

of the daily VWAP during the 5 trading day period from September 12, 2024 through September 18, 2024.

Effective October 8, 2024, after

market close, a reverse stock split occurred and as of November 12, 2024, 87,384 shares of common stock remain issuable upon exercise

of Series B Warrants using the reset price, which was reduced to the floor price of $ 5.206 (representing 20% of the Nasdaq Minimum Price

(post-Reverse Stock Split and post-Adjustment).

Pursuant to an underwriting agreement

by and between the Company and the Underwriter, the Company paid the Underwriter a total cash underwriting discount of $ 700,000 , equal

to 7% of gross proceeds received in the August 2024 Public Offering, reimbursement for Underwriter expenses of $ 100,000 , equal to 1% of

gross proceeds received, and reimbursement for road show, diligence, legal fees and disbursements of $ 100,000 , equal to 1% of gross proceeds

received, as well as $ 5,000 for investor counsel fee, totaling $ 905,000 in cash fees deducted from cash proceeds.

Convertible Note Financing

On December 27, 2023, the Company entered into a securities

purchase agreement with 3i, LP (“3i”), pursuant to which the Company sold and 3i purchased:

(i) a senior unsecured convertible

note issued in the aggregate principal amount of $2,750,000, with an 10.0% original issue discount and an interest rate of 9.0% per annum

(the “3i Note”), (ii) up to $247,500 in newly issued shares of Common stock (the “Interest Shares”), which may

be payable, subject to the fulfillment of certain conditions set forth in the 3i Note, to satisfy interest payments under the 3i Note,

and (iii) 635 shares of Common stock issued to 3i as consideration for its commitment to purchase the 3i Note (collectively, the “Convertible

Note Financing”).

December 27, 2023, the Company entered into a securities purchase agreement (the “Note Purchase Agreement”) with 3i, LP (“3i”),

pursuant to which the Company sold and 3i purchased:

(i) a senior unsecured convertible note we issued in the aggregate principal amount

of $2,750,000, with an 10.0% original issue discount and an interest rate of 9.0% per annum (the “3i Note”), (ii) up to $247,500

in newly issued shares of Common Stock (the “Interest Shares”), which may be payable, at the Company’s option and subject

to the fulfillment of certain conditions set forth in the 3i Note, to satisfy interest payments under the 3i Note, and 63,497 shares

of Common Stock, which is equal to $300,000 of shares of Common Stock calculated as of the date of the Note Purchase Agreement issued

to 3i as consideration for its commitment to purchase the 3i Note (collectively, the “Convertible Note Financing”).

proceeds to the Company from the Convertible Note Financing were $2.5 million, prior to the payment of legal fees and transaction expenses.

The offering of securities in the Convertible Note Financing was made pursuant to an effective

shelf registration statement on Form S-3 (File No.

333-272956), which the Company filed with the SEC on June 27, 2023 and was declared

effective on July 10, 2023.

earlier converted or redeemed, the 3i Note will mature on December 27, 2024, the date that is the one-year anniversary of the issuance

date of the note, provided that 3i may, at its option, extend the maturity date of the 3i Note if (i) an event of default under the note

has occurred and is continuing (or any event shall have occurred and be continuing that with the passage of time and the failure to cure

would result in an event of default under the note), or (ii) for a period of 20 business days after the consummation of a Fundamental

Transaction (as defined in the 3i Note) if certain events occur.

the sale of any shares of Common Stock under the Equity Line of Credit (as defined below), 3i may require the Company to (i) redeem in

cash all, or any portion, of the 3i Note at a five percent (5.0%) redemption premium to the greater of the face value and the equity

value of Common Stock underlying the 3i Note, and (ii) use up to fifty percent (50.0%) of the gross proceeds raised from such sales under

the Equity Line of Credit to redeem in cash all, or any portion, of the 3i Note.

Line Purchase Agreement

December 27, 2023, the Company entered into a common stock purchase agreement (the “Common Stock Purchase Agreement”) with

Tumim Stone Capital, LLC (“Tumim”), pursuant to which the Company has the right, but not the obligation, to sell to Tumim,

and Tumim is obligated to purchase, up to the lesser of (a) $20,000,000 in aggregate gross purchase price of newly issued Common Stock

and (b) the Exchange Cap (as defined in the Common Stock Purchase Agreement) (the “Equity Line of Credit” and, such financing,

the “Equity Line of Credit Financing”).

In connection with the Equity Line of Credit Financing, we filed a Registration Statement

on Form S-1 (File No.

333-276663) with the SEC on January 23, 2024, which was declared effective on February 9, 2024.

The gross proceeds to the Company from the Convertible Note Financing were $2.5 million prior to the payment of

legal fees and transaction expenses.

The offering of securities in the Convertible Note Financing was made pursuant to an effective shelf

registration statement on Form S-3 (File No.

333-272956), which the Company filed with the SEC on June 27, 2023 and was declared effective

on July 10, 2023.

On August 8, 2024, in connection with the closing

of the August 2024 Public Offering, the Company repaid the 3i Note, and the Company’s obligations under the 3i Note were fully satisfied

and discharged.

Prior to the closing of the August 2024 Public Offering, the Company had issued 414 shares of common stock (post-Reverse

Stock Split) for the payment of $ 90,839 in interest.

Equity Line of Credit

On December 27, 2023, the Company entered into a common

stock purchase agreement with Tumim Stone Capital, LLC (“Tumim”), pursuant to which the Company has the right, but not the

obligation, to sell to Tumim, and Tumim is obligated to purchase, up to the lesser of (a) $20,000,000 in aggregate gross purchase price

of newly issued Common stock and (b) the Exchange Cap (as defined in the purchase agreement) (the “Equity Line of Credit”).

In connection with the Equity Line of Credit, the Company filed a Registration Statement on Form S-1 (File No.

333-276663) with the SEC

on January 23, 2024, which was declared effective on February 9, 2024.

In connection with the August 2024 Public Offering,

the Company and Tumim mutually agreed to terminate the Equity Line of Credit, effective immediately upon the closing of the August 2024

Public Offering.

Prior to the closing of the August 2024 Public Offering, the Company had sold 4,336 shares of common stock (post-Reverse

Stock Split) under the Equity Line of Credit for an aggregate amount of $ 828,491 , of which $ 434,958 was used to repay a portion of the

balance under the 3i Note, consisting of $ 380,042 to the loan principal, $ 34,204 to interest, and $ 20,712 as a redemption premium.

Stock Split True-Up Payment

as of 5:00 p.m.

Pacific Time on October 8, 2024 (the “Effective Date”), The Company effected a 1-for-100 reverse stock split

of our common stock (the “Reverse Stock Split”), which was approved by the Board on September 27, 2024, following stockholder

approval at our annual meeting of stockholders held on September 27, 2024.

of the daily VWAP of the common stock during the five trading days before and after the Reverse Stock Split, a Reverse Stock Split cash

true-up payment provision in the Series A Warrants, which is capped at $5.0 million in the aggregate under all Series A Warrants, was

triggered, but the payment of the Reverse Stock Split cash true-up payment was suspended in accordance with the terms of the Series A

year ended December 31, 2024, $14,052 of this liability was relieved in connection with the exercise of Series A Warrants, leaving a remaining

liability of $ 4,985,948 as of December 31, 2024.

We used $ 500,000 of the net proceeds from the registered direct offering and warrant

private placement that closed on January 3, 2025 to satisfy a portion of certain amounts owed to the holders of the Series A Warrants

pursuant to the terms thereof.

Commitments and Contingencies

Operating Leases

Company leases its warehouses and office space under long-term lease arrangements.

None of its leases include characteristics specified

in ASC 842, Leases , that require classification as financing leases, and accordingly, these leases are accounted for as operating

The Company does not recognize a right-of-use asset and lease liability for short term leases, which have terms of 12 months

For longer-term lease arrangements that are recognized on the Company’s Balance Sheet, the right-of-use asset and lease

liability are initially measured at the commencement date based upon the present values of the lease payments due under the leases.

implicit interest rates of the Company’s lease arrangements are generally not readily determinable and as such, the Company applies

an incremental borrowing rate, which is established based upon the information available at the lease commencement date, to determine

the present value of lease payments due under the arrangement.

Under ASC 842, the incremental borrowing rate (“IBR”) for

leases must be (1) a rate of interest over a similar term, and (2) for an amount that is equal to the lease payments.

The Company uses

both the Federal Reserve Economic Data U.S.

corporate debt effective yield and the U.S.

Treasury rates adjusted for credit spread as

the primary data points for purposes of determining the IBR.

the first quarter of 2022, the Company entered into two new long-term, non-cancelable operating lease agreements for office and warehouse

space resulting in the Company recognizing an additional lease liability totaling of $2,348,509, representing the present value of the

lease payments discounted using an effective interest rate of 8.07% and 8.86%, and corresponding right-of-use assets of $2,348,509.

leases expire in December 2026 and December 2028.

The second lease contains one three-year option to renew.

The lease is guaranteed by

a co-founder.

the first quarter of 2021, the Company entered into a long-term, non-cancelable operating lease agreement for office and warehouse space

resulting in the Company recognizing an additional lease liability totaling of $1,268,089, representing the present value of the lease

payments discounted using an effective interest rate of 7.47% and a corresponding right-of-use asset of $1,268,089.

The lease expires

in January 2028 and contains one three-year option to renew.

The lease is guaranteed by a co-founder.

The Company has two

other leases—one that expired in January 2023 and one that expires in February 2025.

The leases generally provide for annual increases

based on a fixed amount and generally require the Company to pay real estate taxes, insurance, and repairs.

Both leases are guaranteed

by a co-founder.

following is a summary of total lease costs for the years ending December 31, 2023 and 2022:

of lease cost

The Company leases its warehouses and office space

under long-term lease arrangements.

None of its leases include characteristics specified in ASC 842, Leases , that require classification

as financing leases, and accordingly, these leases are accounted for as operating leases.

The Company does not recognize a right-of-use

asset and lease liability for short term leases, which have terms of 12 months or less.

For longer-term lease arrangements that are recognized

on the Company’s Balance Sheet, the right-of-use asset and lease liability are initially measured at the commencement date based

upon the present values of the lease payments due under the leases.

The implicit interest rates of the Company’s

lease arrangements are generally not readily determinable and as such, the Company applies an incremental borrowing rate, which is established

based upon the information available at the lease commencement date, to determine the present value of lease payments due under the arrangement.

Under ASC 842, the incremental borrowing rate (“IBR”) for leases must be (1) a rate of interest over a similar term, and (2)

for an amount that is equal to the lease payments.

The Company uses both the Federal Reserve Economic Data U.S.

corporate debt effective

yield and the U.S.

Treasury rates adjusted for credit spread as the primary data points for purposes of determining the IBR.

In the first quarter of 2022, the Company entered

into two new long-term, non-cancelable operating lease agreements for office and warehouse space resulting in the Company recognizing

an additional lease liability of $ 2,348,509 , representing the present value of the lease payments discounted using an effective interest

rate of 8.07% and 8.86% , and corresponding ROU assets of $ 2,348,509 .

The leases expire in December 2026 and December 2028 , the latter

of which contains one three-year option to renew.

In the first quarter of 2021, the Company entered

into a long-term, non-cancelable operating lease agreement for office and warehouse space resulting in the Company recognizing an additional

lease liability totaling of $ 1,268,089 , representing the present value of the lease payments discounted using an effective interest rate

of 7.47% and a corresponding ROU asset of $ 1,268,089 .

The lease expires in January 2028 and contains one three-year option to renew.

The Company had another lease that expired in January

2023 and was terminated at that time.

The relating right of use asset and lease liability were written off at that time.

The company has

one further lease that expires in February 2025.

The leases generally provide for annual increases based on a fixed amount and generally

require the Company to pay real estate taxes, insurance, and repairs.

On September 19, 2024, the Company signed a Termination

of Commercial Lease Agreement regarding the lease previously contracted to end in December 2028.

The cancelation was effective September

The corresponding ROU asset and lease liability were therefore removed from the Company’s balance sheet effective September

The following is a summary of total lease costs for

the years ending December 31, 2024 and 2023:

Schedule of lease cost

Years Ended December 31,

3 unchanged sentences

Sublease income

weighted-average remaining lease term was 4.54 years and 5.49 years as of December 31, 2023 and 2022, respectively.

The weighted average

discount rate was 8.47% and 8.48%, as of December 31, 2023 and 2022, respectively.

Operating cash flows from the operating leases totaled

$441,937 and $440,139 for the years ended December 31, 2023 and 2022, respectively.

total lease liability as of December 31, 2023 and 2022 was $2,764,089 and $3,220,019, respectively.

following is a maturity analysis of the annual undiscounted cash flows of the operating lease liabilities as of December 31, 2023, for

the years ending December 31:

of future minimum lease payment

Total future minimum lease

imputed interest

Total lease costs

The weighted-average remaining lease term was 2.91

and 4.54 years as of December 31, 2024 and 2023, respectively.

The weighted average discount rate was 7.60 % and 8.47 % as of December 31,

2024 and 2023, respectively.

Operating cash flows from the operating leases totaled $ 455,690 and $ 469,923 for the years ended December

31, 2024 and 2023, respectively.

The total lease liability as of December 31, 2024

and 2023 was $ 798,917 and $ 2,764,089 , respectively.

The following is a maturity analysis of the annual

undiscounted cash flows of the operating lease liabilities as of December 31, 2024, for years ending December 31:

Schedule of future minimum lease payment

Total future minimum lease payments

Less imputed interest

Current lease liability

lease liability

of December 31, 2023, the Company subleases office and warehouse space under one of its existing operating leases with similar terms

as the Company’s lease agreements.

Two additional leases ended in February, 2023.

Because the Company is not relieved of its primary

obligations under the original lease, the Company accounts for the subleases as a lessor.

Sublease rental income is recorded based on

the contractual rental payments which are not substantially different from recognition on a straight-line basis over the lease term and

totaled $49,916 and $123,386 during the years ended December 31, 2023 and 2022, respectively.

As of December 31, 2023 and 2022, deferred

income and a sublease deposit totaled $4,445 and $14,168, respectively, and is included in accrued expenses and other current liabilities

on the accompanying Balance Sheets.

The following are

the total future minimum sublease payments as of December 31, 2023:

of future minimum sublease payments

Years ending December 31,

future minimum lease payments

Company may be involved from time to time in litigation or claims arising in the ordinary course of its business.

While the ultimate

liability, if any, arising from these claims cannot be determined with certainty, the Company believes that the resolution of any such

matters will not likely have a material adverse effect on the Company’s financial statements.

November 22, 2022, the Company received notice of a complaint (the “Complaint”) filed

against it in Oregon state court by Ravi Sinha.

The Complaint alleged, inter alia ,

Sinha was entitled to 282,284 shares of the Company’s common stock, or in the alternative, $300,000 plus interest in connection

with services he previously rendered the Company as its chief executive officer.

On March 21, 2023, the Company entered into a settlement

agreement with Mr.

Sinha, and the matter has been resolved with $30,000 cash and the issuance of 52,000 shares of common stock at

the closing price of $4.84 per share on March 31, 2023, for a total settlement value of $281,680 (see Note 11, Stockholders’

Noncurrent lease liability

As of December 31, 2024, the Company subleases office

and warehouse space under one of its existing operating leases with similar terms as the Company’s lease agreements.

Two additional

leases ended in February, 2023.

Because the Company is not relieved of its primary obligations under the original lease, the Company accounts

for the subleases as a lessor.

Sublease rental income is recorded based on the contractual rental payments which are not substantially

different from recognition on a straight-line basis over the lease term and totaled $ 42,804 and $ 49,916 during the years ended December

31, 2024 and 2023, respectively.

As of December 31, 2024 and 2023, deferred income and a sublease deposit totaled $ 4,549 and $ 4,445 , respectively,

and is included in accrued expenses and other current liabilities on the accompanying Balance Sheets.

The total future minimum sublease payments are $ 7,169 ,

all due in the year ending December 31, 2025.

The Company may be involved from time to time in litigation

or claims arising in the ordinary course of its business.

While the ultimate liability, if any, arising from these claims cannot be determined

with certainty, the Company believes that the resolution of any such matters will not likely have a material adverse effect on the Company’s

financial statements.

On November 22, 2022, the Company received

notice of a complaint (the “Complaint”) filed against it in Oregon state court by Ravi Sinha.

The Complaint alleged, inter

alia , that Mr.

Sinha was entitled to 282,284 shares of the Company's common stock, or

in the alternative, $300,000 plus interest in connection with services he previously rendered the Company as its chief executive officer.

On March 21, 2023, the Company entered into a settlement agreement with Mr.

Sinha and the matter has been resolved with $ 30,000 cash and

the issuance of 52,000 shares of common stock at the closing price of $ 4.84 per share on March 31, 2023, for a total settlement value

of $ 281,680 .

(see Note 11, Stockholders’ Equity ).

On May 2, 2024,

the Company entered into a Settlement and Mutual Release with Alexander Capital L.P.

(“Alexander”), pursuant to which the

parties resolved certain disputes while not admitting any liability or wrongdoing (the “Settlement Agreement”).

to (i) make a single cash payment of $100,000, (ii) issue 100,000 shares of Common Stock, and (iii) amend certain outstanding warrants

to reduce the per share exercise price from $9.10 to $4.50.

The shares of Common Stock were issued pursuant to an effective Registration

Statement on Form S-3 (File No.

The Settlement Agreement also contains other customary provisions, including a mutual release

of claims and mutual non-disparagement provision.

On July 1, 2024,

the Company entered into a Mutual Termination Agreement with Alexander (the “Termination Agreement”), pursuant to which the

parties agreed to terminate a certain provision in that certain underwriting agreement, dated March 31, 2022, between the Company and

Alexander, as representative of the underwriters, which granted Alexander a right of first refusal to act as the Company’s financial

advisor, book-runner, book-running manager, manager, placement agent, or underwriter in connection with any transaction contemplated or

consummated by us (the “ROFR Provision”).

In exchange for the termination of the ROFR Provision, and in connection with the

closing of the 2024 Public Offering, the Company made a cash payment to Alexander in the amount of $ 400,900 .

Nasdaq Listing Requirement

On September 6, 2024, the Company received a staff

determination from The Nasdaq Listing Qualifications Department of The Nasdaq Stock Market (“Nasdaq”) to delist the Company’s

common stock from The Nasdaq Capital Market indicating that (i) the Company was not in compliance with Nasdaq Listing Rule 5550(a)(2)

because the closing bid price per share for the Company’s common stock had closed below $1.00 for the previous 30 consecutive business

days, and (ii) the Company is subject to the provisions contemplated under Nasdaq Listing Rule 5810(c)(3)(A)(iii) because, as of September

5, 2024, the Company’s common stock had a closing bid price of $0.10 or less for at least ten consecutive trading days (the “Staff

Determination”).

On September 12, 2024, the Company requested an appeal

hearing on the Staff Determination from a Hearings Panel (the “Panel”) by filing a hearing request with Nasdaq pursuant to

the procedures set forth in the Nasdaq Listing Rules, staying the delisting of the common stock pending the Panel’s decision.

Upon successful completion of the Reverse Stock Split,

the Company received a letter from the Nasdaq Office of General Counsel on October 23, 2024, advising the Company that it had regained

compliance with the minimum bid price continued listing requirements in Listing Rule 5550(a)(2) and that the Company is therefore in compliance

with Nasdaq’s listing requirements.

Consequently, the scheduled hearing before the Panel on October 24, 2024, was cancelled.

The Company’s common stock continues to be listed and traded on The Nasdaq Capital Market.

See Note 14 – “Subsequent Events”

in this Quarterly Report for additional information about the Reverse Stock Split and the Nasdaq Listing Requirement.

Stockholders’ Equity

Company is authorized to issue an aggregate of 220,000,000 shares of capital stock, par value $0.001 per share, consisting of 200,000,000

shares of common stock and 20,000,000 shares of preferred stock.

On March 31, 2023, at the closing price of $4.84 per share, the Company

issued 52,000 shares of common stock as part of the settlement agreement with Mr.

Sinha dated March 21, 2023, for a total value of

The Company is authorized to issue an aggregate of

220,000,000 shares of capital stock, par value $ 0.001 per share, consisting of 200,000,000 shares of common stock and 20,000,000 shares

of preferred stock.

As of December 31, 2024 and December 31, 2023, 2,096,082 and 69,230 shares, respectively, of common stock were issued

1 unchanged sentence

No shares of preferred stock have been issued.

holder of common stock is entitled to one vote for each share of common stock.

The holders of common stock have no conversion, redemption

or preemptive rights and shall be entitled to receive dividends when, as, and if declared by the board of directors.

Upon dissolution,

liquidation, or winding up of the Company, after payment or provision for payment of debts and other liabilities of the Company, subject

to the rights, if any, of the holders of any class or series stock having a preference over the right to participate with common stock

with respect to the distribution of assets of the Company upon such dissolution, liquidation, or winding up of the Company, the holders

of common stock shall be entitled to receive the remaining assets of the Company available for distribution to its stockholders ratably

in proportion to the number of shares of common stock held.

no shares of preferred stock have been issued, no rights and privileges of preferred stockholders have been defined.

As of December 31, 2024, of the 50,000,000 Units sold

in the August 2024 Public Offering at $ 0.20 per unit (Pre-Reverse Stock Split), 500,000 shares of common stock (post-Reverse Stock Split)

were issued, as all 16,598,000 Pre-Funded Warrants have been exercised.

Prior to the Company’s payoff of the 3i Note

in connection with the closing of the August 2024 Public Offering, the Company had issued 414 shares of common stock for the payment of

$ 90,839 in interest.

As of December 31, 2024, the Company has sold 4,336 shares of common stock for an aggregate amount of $ 828,491 , of

which $ 434,958 was used to repay a portion of the balance under the 3i Note, consisting of $ 380,042 to the loan principal, $ 34,204 to

interest and $ 20,712 as a redemption premium.

On May 2, 2024, at the closing price of $ 209.00 per

share, the Company agreed to issue 1,000 shares of common stock valued at $ 209,000 as well as $ 100,000 in cash as part of a settlement

agreement for a total value of $ 309,000 .

On March 31, 2023, at the closing price of $ 484.00

per share, the Company issued 520 shares of common as part of a settlement agreement for a total value of $ 251,680 .

On January 16, 2023, at the closing price of $ 454

per share, the Company issued 79 shares of common stock for stock-based compensation that had been accrued in 2023, for a total value

of $ 36,029 .

As of December 31, 2024 and December 31, 2023, 2,096,082

and 69,230 shares, respectively, of common stock were issued and outstanding.

No shares of preferred stock have been issued.

A holder of common stock is entitled to one vote for

each share of common stock.

The holders of common stock have no conversion, redemption or preemptive rights and shall be entitled to receive

dividends when, as, and if declared by the board of directors.

Upon dissolution, liquidation, or winding up of the Company, after payment

or provision for payment of debts and other liabilities of the Company, subject to the rights, if any, of the holders of any class or

series stock having a preference over the right to participate with common stock with respect to the distribution of assets of the Company

upon such dissolution, liquidation, or winding up of the Company, the holders of common stock shall be entitled to receive the remaining

assets of the Company available for distribution to its stockholders ratably in proportion to the number of shares of common stock held.

Since no shares of preferred stock have been issued,

no rights and privileges of preferred stockholders have been defined.

Initial Public Offering

April 1, 2022, the Company completed an initial public offering (“IPO”).

A total of 2,466,750 shares of common stock were

sold at $7.00 per share in the IPO, for total gross proceeds of $17,267,250.

The Company incurred IPO costs of $2,494,763 resulting in

net proceeds of $14,772,487.

Additionally, during the year ended December 31, 2022, the Company issued 35,714 shares of common stock

at $7.00 per share to an outside third party in exchange for IPO services.

The fair value of the shares of $249,998 were recorded as

an increase to common stock of $36 (35,714 shares at $.001 par value) and additional paid in capital of $249,962 and a corresponding

reduction to additional paid in capital of $249,998, resulting in a net decrease in additional paid in capital of $36.

On April 1, 2022, the Company completed an initial

public offering (“IPO”).

A total of 24,668 shares of common stock were sold at $ 700.00 per share in the IPO, for total gross

proceeds of $ 17,267,250 .

Warrants/Options

August 10, 2023, the Company issued 25,000 warrants to their investor relations firm in accordance with a letter of engagement signed

July 22, 2022, to purchase 25,000 shares of common stock at an exercise price of $5.00 per share.

The warrants expire two years from

the date of grant on August 9, 2025.

The fair value of the warrants was determined at date of issuance using the Black-Scholes option-pricing

model and following assumptions:

per share price of common stock on date of grant $5.20, expected dividend yield of 0%, expected volatility

of 88%, risk-free interest rate of 4.82% and expected life based on contractual life of two years.

The fair value of $65,045 was

recorded as an increase in additional paid-in capital and expensed to Legal and Professional Services.

April 1, 2022, the Company issued warrants to IPO underwriters to purchase 148,005 shares of common stock at an exercise price of $9.10

The warrants are exercisable 180 days after the date of grant on September 27, 2022 and expire five years from the date of

grant on March 31, 2027.

The fair value of the warrants was determined at date of issuance using the Black-Scholes option-pricing model

and the following assumptions:

per share price of common stock on date of grant of $7.00, expected dividend yield of 0%, expected volatility

of 110.03%, risk-free interest rate of 2.55% and expected life based on contractual life of five years.

The fair value of $916,238 was

recorded as an increase in additional-paid-in capital and a reduction to additional paid-in capital since the warrants were issued as

IPO fees to underwriters, resulting in a zero impact to additional paid-in capital.

the year ended December 31, 2023, 15,000 warrants exercisable at $3.32 per share were exercised on a cash basis which resulted in the

During the year ended December 31, 2023, 73,000 warrants

exercisable for 730 shares at $ 290.00 per share were exercised using the cashless conversion option which resulted in the issuance of

311 shares of common stock (post-Reverse Stock Split).

This left 78,000 warrants remaining, which expired on November 9, 2024 , without

being exercised, and there are no warrants remaining at $ 290.00 per share as of December 31, 2024.

During the year ended December 31, 2023, 22,606 warrants

exercisable for 226 shares of common stock at $ 332.00 per share were exercised using the cashless conversion option, which resulted in

the issuance of 102 shares of common stock, and 15,000 warrants exercisable for 150 shares of common stock at $ 332.00 per share were exercised

on a cash basis, which resulted in the issuance of 150 shares of common stock.

During the year ended December 31, 2024, 7,535 warrants

exercisable for 75 shares of common stock at $ 332.00 per share were exercised using the cashless conversion option which resulted in the

issuance of 16 shares of common stock.

In addition, 22,606 warrants exercisable at $3.32 per share were exercised using the cashless

conversion option, which resulted in the issuance of 10,151 shares of common stock.

This leaves 521,825 warrants remaining with an exercise

price of $3.32.

the year ended December 31, 2023, 73,000 warrants exercisable at $2.90 per share were exercised using the cashless conversion option

which resulted in the issuance of 31,102 shares of common stock.

This leaves 78,000 warrants remaining with an exercise price of $2.90.

of December 31, 2023 and December 31, 2022, a total of 772,830 and 858,436 warrants were issued and outstanding, respectively.

December 31, 2023 and December 31, 2022, a total of 30,000 options, which were not issued under a specified plan, were outstanding.

of December 31, 2023, below is a summary of the various warrants/options issued and outstanding:

of various warrants/options issued and outstanding

Warrants/Non-Plan Options

Average Remaining Life (Yrs)

Stock Option Plans

of December 31, 2023, the Company had adopted two stock-based compensation plans, the 2021 Incentive Award Plan and the 2021 Employee

Stock Purchase Plan, both of which are described below and became effective upon the initial public offering.

On May 2, 2022, the Company

granted 829,500 options and on August 23, 2023, the Company granted 245,500 options and 48,780 restricted stock units (“RSUs”)

under the 2021 Incentive Award Plan.

On October 31, 2023, 12,195 RSUs became fully vested.

This leaves 514,290 warrants remaining convertible into 5,149 shares of common stock with an exercise

price of $ 332.00 per share as of December 31, 2024.

On August 10, 2023, the Company issued 25,000 warrants

to their investor relations firm in accordance with a letter of engagement signed July 22, 2022, to purchase 250 shares of common stock

at an exercise price of $500.00 per share.

The warrants expire two years from the date of grant on August 9, 2025.

The fair value of the

warrants was determined at date of issuance using the Black-Scholes option-pricing model and following assumptions:

per share price of

common stock on date of grant $ 5.20 , expected dividend yield of 0 %, expected volatility of 88 %, risk-free interest rate of 4.82 % and expected

life based on contractual life of two years.

The fair value of $ 65,045 was recorded as an increase in additional paid-in capital

and expensed to Legal and Professional Services.

As part of a settlement agreement on May 2, 2024,

the Company agreed to modify the exercise price of 88,803 warrants convertible into 891 shares from $ 910.00 to $ 450.00 .

8,125,000 Series B Warrants exercisable for 496,232

shares at $ 0.10 per share were exercised using the cashless conversion option which resulted in the issuance of 215,678 shares of common

stock (based on a $ 5.206 reset price).

Another 46,300,000 Series B Warrants were exercised on a cash basis which resulted in the issuance

of 1,078,689 shares of common stock (based on a $ 5.206 reset price).

This leaves 3,075,000 Series B warrants remaining, which are exercisable

for 87,384 shares (post-Adjustment), as of December 31, 2024.

In addition, 323,203 Series A Warrants were exercised on a cash basis which

resulted in the issuance of 14,900 of common stock.

This leaves 114,676,797 Series A Warrants remaining, which are exercisable for 5,286,692

shares of common stock, as of December 31, 2024.

As of December 31, 2024 and December 31, 2023, a total

of 687,295 and 772,830 regular warrants to purchase 6,889 and 7,745 shares of common stock, respectively, were issued and outstanding.

As of December 31, 2023, a total of 30,000 options, which were not issued under a specified plan, were outstanding.

However, all 30,000

non-plan options expired on November 8, 2024 , and there are no non-plan options outstanding as of December 31, 2024.

Below is a summary of warrants and stock options issued

and outstanding as of December 31, 2024:

Schedule of various warrants/options issued and outstanding

Number of Warrants

Issuable Shares

Exercise Price per share

Weighted Average Remaining Life (Years)

3,075,000 (1)

114,676,797 (2)

Series B Warrants are subject to reset pricing to determine the number of shares issuable.

Series A Warrants are subject to reset pricing to determine the number of shares issuable.

Series B warrants do not have an expiration date.

As of December 31, 2024, the Company had adopted two

stock-based compensation plans, the 2021 Incentive Award Plan and the 2021 Employee Stock Purchase Plan.

During the year ended December 31, 2024, the Company

granted 161 RSUs, granted 1,045 options, and canceled 100 options (post-Reverse Stock Split) under the 2021 Incentive Award Plan.

compensation costs that have been charged against operations were $ 581,504 and $ 495,320 for the years ended December 31, 2024 and 2023.

No shares have been issued to date under the 2021

Employee Stock Purchase Plan.

The compensation cost that has been charged against operations was $2,114,529 for the year ended December

31, 2022 and $495,320 for the year ended December 31, 2023.

2021 Incentive Award Plan

purpose of the Company’s 2021 Incentive Award Plan is to enhance the Company’s ability to attract, retain and motivate persons

who make (or are expected to make) important contributions to the Company by providing these individuals with equity ownership opportunities.

Various stock-based awards may be granted under the 2021 Incentive Award Plan to eligible employees, consultants, and non-employee directors.

The number of shares issued under the 2021 Incentive Award Plan is subject to limits and is adjusted annually.

No more than 1,000,000

shares may be issued pursuant to the exercise of incentive stock options.

The aggregate share limit will be subject to an annual increase

on the first day of each calendar year ending on and including January 1, 2031, by a number of shares equal to the lesser of (i) a number

equal to 5% of the aggregate number of shares of the Company's common stock outstanding on the final day of the immediately preceding

calendar year and (ii) such smaller number of shares as is determined by the Company's board or committee.

As of December 31, 2023, the

aggregate number of shares that can be issued under the 2021 Incentive Award Plan is 1,199,623, of which 1,075,000 options and 48,780

RSUs have been granted.

The number of shares granted, the exercise price, and the terms will be determined at date of grant;

the exercise price shall not be less than 100% of the fair value on the grant date (110% for options granted to greater than 10% stockholders,

except for options granted to Mr.

Yozamp in August 2023, which were at 100%) and the term shall not exceed ten years.

The purpose of the Company’s 2021 Incentive

Award Plan is to enhance the Company’s ability to attract, retain and motivate persons who make (or are expected to make) important

contributions to the Company by providing these individuals with equity ownership opportunities.

Various stock-based awards may be granted

under the 2021 Incentive Award Plan to eligible employees, consultants, and non-employee directors.

The number of shares issued under

the 2021 Incentive Award Plan is subject to limits and is adjusted annually.

No more than 1,000,000 shares may be issued pursuant to the

exercise of incentive stock options.

The aggregate share limit will be subject to an annual increase on the first day of each calendar

year ending on and including January 1, 2031, by a number of shares equal to the lesser of (i) a number equal to 5% of the aggregate number

of shares of the Company's common stock outstanding on the final day of the immediately preceding calendar year and (ii) such smaller

number of shares as is determined by the Company's board or committee.

As of December 31, 2024, the aggregate number of shares that can

be issued under the 2021 Incentive Award Plan is 17,958 , of which 11,430 options and 649 RSUs have been granted.

The number of shares granted, the exercise price, and the terms

will be determined at date of grant;

however, the exercise price shall not be less than 100% of the fair value on the grant date (110%

for options granted to greater than 10% stockholders, except for options granted to Mr.

Yozamp in August 2023, which were at 100%) and

the term shall not exceed ten years.

2021 Employee Stock Purchase Plan

purpose of the Company’s 2021 Employee Stock Purchase Plan is to assist eligible employees of the Company in acquiring a stock

ownership in the Company and to help such employees provide for their future security and to encourage them to remain in the employment

of the Company.

The 2021 Employee Stock Purchase Plan consists of a Section 423 Component and Non-Section 423 Component.

423 Component is intended to qualify as an employee stock purchase plan and also authorizes the grant of options.

Options granted under

the Non-Section 423 Component shall be granted pursuant to separate offerings containing sub-plans.

The Company may make one or more

offerings under the 2021 Employee Stock Purchase Plan.

The duration and timing of each offering period may be established or changed

by the board, but in no event may an offering period exceed 27 months and in no event may the purchase period for the option exceed the

duration of the offering period under which it is established.

On each exercise date for an offering period, each participant shall automatically

be deemed to have exercised the option to purchase the largest number of whole shares which can be purchased under the offering.

awards are generally granted with an exercise price equal to 85% of the lesser of the fair market value of a share on (a) the applicable

grant date and (b) the applicable exercise date, or such other price as designated by the administrator, provided that in no event shall

the option price be less that the per share par value price.

The maximum number of shares granted under the 2021 Employee Stock Purchase

Plan shall not exceed 2,500,000 shares.

fair value of each option is estimated on the date of grant using the Black-Scholes option pricing model.

The option-pricing model requires

a number of assumptions, of which the most significant are the expected stock price volatility and the expected option term.

volatility was calculated based upon similar traded companies’ historical share price movements as adequate historical experience

is not available to provide a reasonable estimate.

Expected term is calculated based on the simplified method as adequate historical

experience is not available to provide a reasonable estimate.

The simplified method will continue to apply until enough historical experience

is available to provide a reasonable estimate of the expected term.

The risk-free interest rate is calculated based on the yield from

Treasury zero-coupon bonds with an equivalent term.

The Company has historically not paid dividends and have no foreseeable plans

to pay dividends.

Company has computed the fair value of all options granted during the year ended December 31, 2022 using the following assumptions:

of assumptions used

term (in years)

Company has computed the fair value of the 245,500 options granted during the year ended December 31, 2023 using the following assumptions:

term (in years)

The following table

summarizes the Company’s stock option activity under the 2021 Incentive Award Plan:

of stock option activity

(in thousands

except number of options and per options data)

average exercise price

average remaining contractual term (in years)

intrinsic value

The purpose of the Company’s 2021 Employee Stock

Purchase Plan is to assist eligible employees of the Company in acquiring a stock ownership in the Company and to help such employees

provide for their future security and to encourage them to remain in the employment of the Company.

The 2021 Employee Stock Purchase Plan

consists of a Section 423 Component and Non-Section 423 Component.

The Section 423 Component is intended to qualify as an employee stock

purchase plan and also authorizes the grant of options.

Options granted under the Non-Section 423 Component shall be granted pursuant

to separate offerings containing sub-plans.

The Company may make one or more offerings under the 2021 Employee Stock Purchase Plan.

duration and timing of each offering period may be established or changed by the board, but in no event may an offering period exceed

27 months and in no event may the purchase period for the option exceed the duration of the offering period under which it is established.

On each exercise date for an offering period, each participant shall automatically be deemed to have exercised the option to purchase

the largest number of whole shares which can be purchased under the offering.

Option awards are generally granted with an exercise price

equal to 85% of the lesser of the fair market value of a share on (a) the applicable grant date and (b) the applicable exercise date,

or such other price as designated by the administrator, provided that in no event shall the option price be less that the per share par

The maximum number of shares granted under the 2021 Employee Stock Purchase Plan shall not exceed 25,000 shares.

The fair value of each option is estimated on the

date of grant using the Black-Scholes option pricing model.

The option-pricing model requires a number of assumptions, of which the most

significant are the expected stock price volatility and the expected option term.

Expected volatility was calculated based upon similar

traded companies’ historical share price movements as adequate historical experience is not available to provide a reasonable estimate.

Expected term is calculated based on the simplified method as adequate historical experience is not available to provide a reasonable

The simplified method will continue to apply until enough historical experience is available to provide a reasonable estimate

of the expected term.

The risk-free interest rate is calculated based on the yield from U.S.

Treasury zero-coupon bonds with an equivalent

The Company has historically not paid dividends and have no foreseeable plans to pay dividends.

The Company has computed the fair value of the 2,455

options granted during the year ended December 31, 2023 using the following assumptions:

Schedule of fair value of assumptions

Expected volatility

Expected dividends

Expected term (in years)

Risk free rate

The Company has computed the fair value of the 1,045

options granted during the year ended December 31, 2023 using the following assumptions:

Expected volatility

Expected dividends

Expected term (in years)

Risk free rate

The following table summarizes the Company’s

stock option activity under the 2021 Incentive Award Plan:

Schedule of stock option activity

(in thousands except number of options and per options data)

Number of options

Weighted average exercise price

Weighted average remaining contractual term (in years)

Aggregate intrinsic value

Outstanding at beginning of period

1 unchanged sentence

Exercisable at end of period

the years ended December 31, 2023 and 2022, the weighted-average grant-date fair value of the options granted to employees and non-employees

was $998,915 and $2,114,552, respectively.

Unrecognized compensation expense related to employees and non-employees was $627,844 as of

December 31, 2023.

The options granted in May 2022 were vested 100% at time of grant.

The options granted in August 2023 began to vest

in equal quarterly installments beginning September 30, 2023 and ending June 30, 2026.

The following table

summarizes the Company’s RSU activity under the 2021 Incentive Award Plan:

Payment Arrangement, Restricted Stock Unit, Activity

(in thousands

except number of options and per options data)

of restricted stock awards

average grant-date fair value

During the years ended December 31, 2024 and 2023,

the weighted-average grant-date fair value of the options granted to employees and non-employees was $ 312,873 and $ 998,915 , respectively.

Unrecognized compensation expense related to employees and non-employees was $ 101,970 as of December 31, 2024.

The options granted in

May 2022 were vested 100% at time of grant.

The options granted in August 2023 began to vest in equal quarterly installments beginning

September 30, 2023 and ending June 30, 2026.

The options granted in March 2024 were vested 50% at the time of grant, then the remainder

continues to vest in 12 equal quarterly installments thereafter, beginning June 30, 2024.

The following table summarizes the Company’s

RSU activity under the 2021 Incentive Award Plan:

Schedule of RSU activity

(in thousands except number of options and per options data)

Number of restricted stock awards

Weighted average grant-date fair value

Nonvested at beginning of year

Nonvested at end of year

was $115,748 of total unrecognized compensation cost related to non-vested RSUs that are expected to be recognized over a period of up

to 0.70 years.

Common Stock Reserved

for Future Issuance

following is a summary of common stock shares reserved for future issuance as of December 31, 2023:

of common stock shares reserved for future issuance

of options unrelated to any Plan

of stock options – 2021 Incentive Award Plan

of restricted stock units – 2021 Incentive Award Plan

shares of common stock reserved for future issuances

losses before income taxes for the years ended December 31, 2023 and 2022 were generated primarily from U.S.

have no current or deferred provision for income taxes from continuing operations for the years ended December 31, 2023 and 2022.

significant differences between the U.S.

Federal statutory rate and our effective rate for financial reporting purposes are as follows:

There was no unrecognized compensation cost related

to non-vested RSUs as of December 31, 2024.

Common Stock Reserved for Future Issuance

The following is a summary of common stock shares

reserved for future issuance as of December 31, 2024:

Schedule of common stock shares reserved for future issuance

Exercise of warrants

Exercise of stock options – 2021 Incentive Award Plan

Exercise of restricted stock units – 2021 Incentive Award Plan

Exercise of Series A warrants

Exercise of Series B warrants

Total shares of common stock reserved for future issuances

Segment Reporting

The Company focuses on the design, assembly, manufacturing,

and sale of lithium iron phosphate (“LiFePO4”) batteries and supporting accessories for recreational vehicles (“RVs”),

marine applications and home energy storage products with plans to expand into industrial applications.

We sell to wholesalers, distributors,

and OEMs, as well as directly to consumers, and cannot always determine which application our batteries are ultimately used in.

The accounting policies for this segment aligns with

those outlined in the summary of significant accounting policies.

The Chief Executive Officer is the Chief Operating Decision Maker (CODM)

and assesses the performance of this segment and allocates resources based on net income or loss, which is reflected on the Statements

of Operations, and the measure of segment assets is represented as total assets on the Balance Sheet, included in the Financial Statements

section of this Annual Report.

The CODM evaluates the net income or loss from our

one reportable segment.

Net income or loss is also utilized to monitor the difference between budgeted and actual results, offering insights

into financial performance and guiding any necessary corrective actions.

Additionally, the CODM employs net income or loss for competitive

analysis by comparing its financial performance with other competitors in the Energy Storage (ES) space.

The Company does not engage in any intra-entity sales

or transfers.

The Company has identified one reportable segment:

Energy Storage (ES).

This segment generates revenue in North America, and the Company manages its product sales and associated expenses

on a total basis.

Our losses before income taxes for the years ended

December 31, 2024 and 2023 were generated primarily from U.S.

We have no current or deferred provision for income

taxes from continuing operations for the years ended December 31, 2024 and 2023.

The significant differences between the U.S.

statutory rate and our effective rate for financial reporting purposes are as follows:

of income before income tax, domestic and foreign

Ended December 31,

Years Ended December 31,

Federal statutory tax rate

5 unchanged sentences

Effective tax rate

Income Tax Note

of December 31,

Franchise Fees

income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial

reporting purposes and the amounts used for income tax purposes.

Significant components of the Company’s deferred tax assets and

liabilities are as follows for the year ended December 31, 2023 and two months ended December 31, 2022.

income tax assets and liabilities consist of the following:

Deferred income taxes reflect the net tax effects

of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used

for income tax purposes.

Significant components of the Company’s deferred tax assets and liabilities are as follows for the year

ended December 31, 2024 and 2023.

Deferred income tax assets and liabilities consist

of the following:

of components of income tax expense

As of December 31,

Deferred tax assets:

6 unchanged sentences

Net deferred tax asset

financial reporting purposes, the Company incurred losses for the year ended December 31, 2023 and December 31, 2022 and for each period

since inception.

Accordingly, no benefit for income taxes has been recorded due to the uncertainty of the realization of any tax assets.

At December 31, 2023, the Company had approximately $13,101,961 of federal and state net operating losses.

reconciliation between the amount of income tax benefit determined by applying the U.S statutory income tax rate to pre-tax loss is as

For financial reporting purposes, the Company incurred

losses for the year ended December 31, 2024 and December 31, 2023 and for each period since inception.

Accordingly, no benefit for income

taxes has been recorded due to the uncertainty of the realization of any tax assets.

At December 31, 2024, the Company had approximately

$ 29,036,703 of federal and state net operating losses.

Accrued income taxes as of the end of each year as

of accrued income taxes

As of December 31,

State Franchise Fees

A reconciliation between the amount of income tax

benefit determined by applying the U.S statutory income tax rate to pre-tax loss is as follows:

of operating loss carryforward

As of December 31,

Income tax provision at federal statutory rate

5 unchanged sentences

Net deferred tax asset

positions are evaluated in a two-step process.

The Company first determines whether it is more likely than not that a tax position will

be sustained upon examination.

If a tax position meets the more-likely-than-not recognition threshold it is then measured to determine

the amount of benefit to recognize in the financial statements.

The tax position is measured as the largest amount of benefit that is

greater than 50% likely of being realized upon ultimate settlement.

The aggregate changes in the balance of gross unrecognized tax benefits,

which excludes penalties and interest, for the year ended December 31, 2023 is zero.

Company is subject to taxation in the United States and Oregon.

Tax positions are evaluated in a two-step process.

The Company first determines whether it is more likely than not that a tax position will be sustained upon examination.

If a tax position

meets the more-likely-than-not recognition threshold it is then measured to determine the amount of benefit to recognize in the financial

The tax position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate

The aggregate changes in the balance of gross unrecognized tax benefits, which excludes penalties and interest, for the year

ended December 31, 2024 is zero.

The Company is subject to taxation in the United States

There are no ongoing examinations by taxing authorities at this time.

The Company’s various tax years 2017 through 2023 remain open for examination by various taxing jurisdictions.

Company recognizes interest and penalties related to uncertain tax positions in income tax expense.

As of December 31, 2023, the Company

has not accrued any penalties or interest related to uncertain tax positions.

anticipation of an initial public offering, the Company converted from a limited liability company to a C corporation, a taxable entity,

effective November 1, 2021.

the year ended December 31, 2023, the Company accrued $1,840 for state minimum income taxes, and did not accrue federal income taxes

due to net losses in 2023.

For the year ended December 31, 2022 the Company reversed the 2021 accrual of $9,300 and accrued only $450

for state income taxes, as we do not anticipate owing more than the minimum state income taxes for 2022.

converting to a C corporation, the Company has incurred losses and consequently recorded no provision for state or federal income taxes

for the years ended December 31, 2023 and 2022.

The Company maintains a full valuation allowance on all deferred tax assets, as it has

concluded that it is more likely than not that these assets will not be realized.

As of December 31, 2023 and December 31, 2022, there

were no material unrecognized tax benefits included in the accompanying balance sheets that would, if recognized, affect the effective

Company adopted a 401(k) Plan (“Plan”) for the benefit of its employees.

Employees may contribute to the Plan within defined

limits as defined by the Internal Revenue Service.

The Company’s various tax years 2018 through 2024

remain open for examination by various taxing jurisdictions.

The Company recognizes interest and penalties related

to uncertain tax positions in income tax expense.

As of December 31, 2024, the Company has not accrued any penalties or interest related

to uncertain tax positions.

In anticipation of an initial public offering, the

Company converted from a limited liability company to a C corporation, a taxable entity, effective November 1, 2021.

For the year ended December 31, 2023, the Company

accrued $ 1,840 for state minimum income taxes, and did not accrue federal income taxes due to net losses in 2023.

For the year ended December

31, 2024 the Company adjusted the accrual to $ 150 for state income taxes, as we do not anticipate owing more than the minimum state income

taxes for 2024.

Since converting to a C corporation, the Company has

incurred losses and consequently recorded no provision for state or federal income taxes for the years ended December 31, 2024 and 2023.

The Company maintains a full valuation allowance on all deferred tax assets, as it has concluded that it is more likely than not that

these assets will not be realized.

As of December 31, 2024 and December 31, 2023, there were no material unrecognized tax benefits included

in the accompanying balance sheets that would, if recognized, affect the effective tax rate.

The Company adopted a 401(k) Plan (“Plan”)

for the benefit of its employees.

Employees may contribute to the Plan within defined limits as defined by the Internal Revenue Service.

Substantially all employees are eligible to participate.

The Company has the option

to make profit sharing contributions at its discretion.

The Company has the option to make profit sharing contributions at its discretion.

No profit-sharing contributions have been made.

Related-Party Transactions

of December 31, 2023 and December 31, 2022, related party transactions consisted of the Notes (see Note 8, Stockholder Promissory

of December 31, 2023 and December 31, 2022, related party transactions consisted of accounts payables liability to board members for

2022 board compensation in the amount of $0 and $100,000, respectively.

As of December 31, 2023, related party transactions

consisted of the Notes (see Note 6, Stockholder Promissory Notes ).

As of December 31, 2024, there were no outstanding

related-party transactions, as all Stockholder Promissory Notes had been repaid.

Subsequent Events

date to which events occurring after December 31, 2023, the date of the most recent balance sheets, have been evaluated for possible

adjustment to the financial statements or disclosures is March 28, 2024, which is the date the financial statements were issued.

January 12, 2024, the Compensation Committee of the Board of Directors approved the satisfactory achievement of certain performance objectives

and targets, which resulted in the approval of a payment of an annual bonus for performance during 2023 to each of the Company’s

chief executive officer, president, and chief financial officer, in the amounts of $27,040, $27,040, and $18,000, respectively (the “2023

Executive Bonuses”).

The 2023 Executive Bonuses were paid in equal parts cash and RSUs, the latter of which were granted and vested

in full on January 16, 2024.

January 12, 2024, the Compensation Committee of the Board of Directors approved the issuance of $12,000 of RSUs to be made to each of

the Company’s chief executive officer, president, and chief financial officer in lieu of an annual $12,000 stipend for private

office expenses (the “2024 Stipend RSUs”).

The 2024 Stipend RSUs were issued on January 16, 2024, and vest in four equal

quarterly installments commencing on the date of issuance.

January 23, 2024, the Company filed a registration statement on Form S-1 related to the resale, from time to time, of up to 1,781,978

shares of Common Stock by Tumim or its permitted transferees or other successors-in-interestin connection with the Equity Line of Credit

Subsequently, there were two amendments filed on January 31, 2024 and February 7, 2024, respectively.

The Registration Statement

on Form S-1 (File No.

333-276663) was declared effective February 9, 2024.

As of March 25, 2024, the Company has sold 38,224 shares of

Common Stock to Tumim under the Common Stock Purchase Agreement.

January 23, 2024 the Company paid off a stockholder note payable with principal due of $62,500, along with the remaining interest due.

February 2024, the Company had 7,535 cashless warrants exercised resulting in 1,606 additional shares of common stock issued.

February 29, 2024, the Company sold two trucks and paid off combined principal of $72,115 for the corresponding notes payable, as well

as interest and fees.

March 11, 2024, the Company sold another truck and paid off the principal of $14,196 for the corresponding note payable, as well as interest

March 11, 2024, the Compensation Committee of the Board of Directors approved the grant to certain employees of the Company of an aggregate

104,500 nonqualified stock options to purchase shares of common stock pursuant to the Company’s 2021 Incentive Award Plan.

options have a term of ten years and vested and became exercisable as to 50% of the underlying shares immediately as of the March 11,

2024 grant date, with the remainder of such shares vesting in 12 equal, consecutive, quarterly installments commencing June 30, 2024.

March 13, 2024, the Company announced their EX1 SmartTalk TM Bluetooth® batteries were certified UL1973 compliant.

are available in 12.8V configuration, with capacities of 368Ah and 450Ah.

January 2025 Registered Direct Offering and Warrant

Private Placement

On January 3, 2025, the Company

sold to certain institutional investors, in a registered direct offering, an aggregate of (i) 474,193 shares of common stock;

574,193 pre-funded warrants (the “January 2025 Pre-Funded Warrants”) to purchase up to 574,193 shares of common stock (the

“January 2025 Pre-Funded Warrant Shares”).

The offering price per share was $2.48 and the offering price per January 2025

Pre-Funded Warrant was $2.479.

Each January 2025 Pre-Funded Warrant was exercisable for one share of common stock for $0.001 immediately

upon issuance and the January 2025 Pre-Funded Warrants were all exercised immediately upon issuance.

The number of January 2025 Pre-Funded

Warrant Shares are subject to adjustments for stock splits, recapitalizations, and reorganizations.

The January 2025 Pre-Funded Warrants

were exercised in full on January 3, 2025.

In a concurrent private placement

that closed January 3, 2025, the Company also issued to the institutional investors unregistered warrants (the “January 2025 Warrants”)

to purchase up to an aggregate of 1,048,386 shares of common stock (the “January 2025 Warrant Shares”) at an exercise price

of $ 2.36 per share, subject to adjustment for reverse stock splits, recapitalizations, and reorganizations.

In connection with the private

placement, the Company filed a registration statement on Form S-1 (File No.

333-284354), which was declared effective by the SEC on February

11, 2025, covering the resale of the January 2025 Warrant Shares.

The Company received net proceeds of approximately

$ 2.2 million from the offering and used approximately $ 500,000 of the net proceeds to satisfy a portion of

certain amounts owed to our Series A Warrant holders pursuant to the terms of the outstanding Series A Warrants.

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 9A. Controls and Procedures