NOTE 6 – EQUITY IN NON-MARKETABLE SECURITIES OF AFFILIATED ENTITY

As of July 31, 2025 and October 31, 2024, the Company invested $145,000 in the non-marketable equity securities of Exotropin (“Exotropin”), a privately-held skin-care formulator in an effort to accelerate the Company’s development of expertise with respect to the skincare industry and the potential supply of the Company’s products in future formulations.

As of July 31, 2025 and October 31, 2024, the Company has recorded total reserves against the carrying value of its investment of Exotropin of $145,000, based on the limited financial history of Exotropin to date and the lack of any information to ascertain the fair value of Exotropin.

During November 2024, the Company received a capital call notice from Exotropin, in which the Company’s pro-rata share was $126,000 (“November Capital Call”). The Company has yet committed to participating in the November Capital Call. If the Company does not participate, its interest in Exotropin would be reduced to approximately 5.8% from 9.0% based on all other members fully participating in the November Capital Call. There have been no further capital calls on the Company.

Sales Representative Agreement

In November 2023, the Company entered into a Sales Representative Agreement (the “Sales Agreement”) with Exotropin to support the commercialization of its proprietary topical products. Under the Sales Agreement, the Company is entitled to receive commissions on the net sales value of Exotropin products sold to pre-approved customers introduced by the Company, including retailers (10%), wholesale distributors (5%), private label customers (10%), and direct-to-consumer customers (15%).

In connection with the Sales Agreement, the Company and Exotropin co-developed a topical product for the treatment of hair loss, branded as “ZEO HAIR GROW™ Powered By Exotropin™,” which launched in November 2024 (the “Collaboration”). Under the terms of the Collaboration, the Company is responsible for sales and marketing, and the parties agreed to share equally in the net profits from product sales, after reimbursement of direct cash costs incurred by either party.

On August 15, 2025, the Company provided Exotropin with formal notice of termination of the Sales Agreement for cause. Exotropin has denied the allegations and responded with its own demands, including that the Company cease sales of the co-developed product. The Company is currently evaluating its legal options and intends to protect its rights under the Sales Agreement and the Collaboration.

For the three months ended July 31, 2025 and 2024, $19,000 and $0, respectively, of commissions were earned under the Sales Agreement. For the nine months ended July 31, 2025 and 2024, $62,000 and $87,000, respectively, of commissions were earned under the Sales Agreement. The commissions earned under the Sales Agreement are reflected in other income in the unaudited consolidated financial statements.