UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For
the quarterly period ended
or
Commission
File No.
(Exact name of Registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. employer identification number) |
| (Address of principal executive offices) | (Zip code) |
(Registrant’s telephone number, including area code)
3200 Cherry Creek Drive South, Suite 410
Denver, Colorado
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act: None
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of September 18, 2026, there were outstanding shares of the registrant’s Common Stock, $ par value.
vitro biopharma inc.
Form 10-q
For the quarterly period ended JULY 31, 2026
table of contents
| 2 |
PART I-FINANCIAL INFORMATION
Item 1. Financial Statements
Vitro BioPharma, Inc.
Consolidated Balance Sheets
(Unaudited)
| July 31, 2026 | October 31, 2025 | |||||||
| ASSETS | ||||||||
| Cash | $ | $ | ||||||
| Accounts Receivable, Net | ||||||||
| Accounts Receivable – Related Party | ||||||||
| Inventory | ||||||||
| Prepaid Expense | ||||||||
| Total Current Assets | ||||||||
| Goodwill | ||||||||
| Intangible Assets, Net | ||||||||
| Property and Equipment, Net | ||||||||
| Patents, Net | ||||||||
| Right of Use Asset – Operating Lease | ||||||||
| Other Assets | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES | ||||||||
| Accounts Payable | $ | $ | ||||||
| Accounts Payable – Related Party | ||||||||
Notes Payable | ||||||||
| Deferred Revenue, Net | ||||||||
| Accrued Liabilities | ||||||||
| Accrued Liabilities – Related Party | ||||||||
| 2024 Series Senior Secured Convertible Notes Payable – Stock Settled, Net | ||||||||
| Derivative/Warrant Liability | ||||||||
| Accrued Interest – Related Party | ||||||||
| Current Maturities of Capital Lease Obligations | ||||||||
| Current Maturities of Operating Lease Obligations | ||||||||
| Total Current Liabilities | ||||||||
| Operating Lease Obligation, Net of Current Portion | ||||||||
| Unsecured 6% Note Payable – Related Party | ||||||||
| Unsecured 4% Note Payable – Related Party | ||||||||
| 2022 Series Convertible Notes Payable | ||||||||
| 2023 Series Convertible Notes Payable - Stock Settled, Net | ||||||||
| 2023 Series B Convertible Notes Payable – Stock Settled, Net | ||||||||
| 2025 Series Senior Secured Convertible Notes Payable – Stock Settled, Net | ||||||||
| Derivative/Warrant Liability | ||||||||
| Long Term Accrued Interest Payable | ||||||||
| Long Term Accrued Interest Payable – Related Party | ||||||||
| Total Long-Term Liabilities | ||||||||
| Total Liabilities | ||||||||
| REDEEMABLE PREFERRED STOCK | ||||||||
| Preferred Stock, Shares Authorized, par value $ | ||||||||
| - Series A-1 Convertible Preferred Stock, Shares Authorized, and Outstanding, respectively | ||||||||
| STOCKHOLDERS’ DEFICIT | ||||||||
| Preferred Stock, Shares Authorized, par value $ | ||||||||
| - Series A-1 Convertible Preferred Stock, Shares Authorized, and Outstanding, respectively | ||||||||
| Common stock, Shares Authorized, par value $, and Outstanding, respectively | ||||||||
| Additional Paid in Capital | ||||||||
| Less Treasury Stock | ( | ) | ( | ) | ||||
| Accumulated Deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Deficit | ( | ) | ( | ) | ||||
| Total Liabilities, Redeemable Preferred Stock and Stockholders’ Deficit | $ | $ | ||||||
The unaudited consolidated financial statements should be read in connection with the notes to the unaudited consolidated financial statements.
| 3 |
Vitro BioPharma, Inc.
Consolidated Statements of Operations
(Unaudited)
Three Months Ended July 31, 2026 | Three Months Ended July 31, 2025 | |||||||
| Product Sales | $ | $ | ||||||
| Product Sales, Related Party | ||||||||
| Total Revenue | ||||||||
| Cost of Goods Sold | ( | ) | ( | ) | ||||
| Gross Profit | ||||||||
| Operating Costs and Expenses: | ||||||||
| Selling, General and Administrative | ||||||||
| Research and Development | ||||||||
| Loss From Operations | ( | ) | ( | ) | ||||
| Other Expense: | ||||||||
| Interest Expense | ( | ) | ( | ) | ||||
| Gain on Forgiveness of Debt | ||||||||
| Loss on Extinguishment of Debt | ( | ) | ||||||
| Unrealized Gain on Derivative/Warrant Liability | ||||||||
| Net Loss | ( | ) | ( | ) | ||||
| Cumulative Series A-1 Convertible Preferred Stock Dividend Requirement | ( | ) | ( | ) | ||||
| Net Loss Available to Common Stockholders | $ | ( | ) | $ | ( | ) | ||
| Net Loss per Common Share, Basic and Diluted | $ | ) | $ | ) | ||||
| Shares Used in Computing Net Loss per Common Share, Basic and Diluted | ||||||||
The unaudited consolidated financial statements should be read in connection with the notes to the unaudited consolidated financial statements.
| 4 |
Vitro BioPharma, Inc.
Consolidated Statements of Operations
(Unaudited)
Nine Months Ended July 31, 2026 | Nine months Ended July 31, 2025 | |||||||
| Product Sales | $ | $ | ||||||
| Product Sales, Related Party | ||||||||
| Total Revenue | ||||||||
| Cost of Goods Sold | ( | ) | ( | ) | ||||
| Gross Profit | ||||||||
| Operating Costs and Expenses: | ||||||||
| Selling, General and Administrative | ||||||||
| Research and Development | ||||||||
| Impairment Expense | ||||||||
| Loss From Operations | ( | ) | ( | ) | ||||
| Other Expense: | ||||||||
| Interest Expense | ( | ) | ( | ) | ||||
| Gain on Forgiveness of Debt | ||||||||
| Loss on Extinguishment of Debt | ( | ) | ( | ) | ||||
| Unrealized Gain on Derivative/Warrant Liability | ||||||||
| Net Loss | ( | ) | ( | ) | ||||
| Cumulative Series A-1 Convertible Preferred Stock Dividend Requirement | ( | ) | ( | ) | ||||
| Net Loss Available to Common Stockholders | $ | ( | ) | $ | ( | ) | ||
| Net Loss per Common Share, Basic and Diluted | $ | ) | $ | ) | ||||
| Shares Used in Computing Net Loss per Common Share, Basic and Diluted | ||||||||
The unaudited consolidated financial statements should be read in connection with the notes to the unaudited consolidated financial statements.
| 5 |
Vitro BioPharma, Inc.
Consolidated Statements of Changes in Stockholders’ Deficit
For the Three and Nine Months Ended July 31, 2026 and 2025
(Unaudited)
| Preferred Stock | Common Stock | Additional Paid in | Treasury | Accumulated | ||||||||||||||||||||||||||||
| Shares | Par Value | Shares | Par Value | Capital | Stock | Deficit | Total | |||||||||||||||||||||||||
| Balance at October 31, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||
| Pre-funded Warrants Issued for Services | - | - | ||||||||||||||||||||||||||||||
| Pre-funded Warrants Issued as Part of Debt Extinguishment | - | - | ||||||||||||||||||||||||||||||
| Stock Based Compensation | - | - | ||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance at January 31, 2025 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Stock Based Compensation | - | - | ||||||||||||||||||||||||||||||
| Net Loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance at April 30, 2025 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Issuance of Series A-1 Convertible Preferred Stock | - | |||||||||||||||||||||||||||||||
| Stock Based Compensation | - | - | ||||||||||||||||||||||||||||||
| Net Loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance at July 31, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||
| Balance at October 31, 2025 | $ | $ | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||
| Issuance of Series A-1 Preferred Stock | - | |||||||||||||||||||||||||||||||
| Cashless Exercise of Stock Options | - | ( | ) | |||||||||||||||||||||||||||||
| Stock Based Compensation | - | - | ||||||||||||||||||||||||||||||
| Net Loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance at January 31, 2026 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Issuance of Series A-1 Preferred Stock | - | |||||||||||||||||||||||||||||||
| Conversion of 2024 Notes to Series A-1 Preferred Stock | - | |||||||||||||||||||||||||||||||
| Extinguishment of Derivative/Warrant Liabilities | - | - | ||||||||||||||||||||||||||||||
| Stock Based Compensation | - | - | ||||||||||||||||||||||||||||||
| Net Loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance at April 30, 2026 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Reclassification of Preferred Stock to Redeemable Preferred Stock | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||
| Extinguishment of Derivative/Warrant Liabilities | - | - | ||||||||||||||||||||||||||||||
| Stock Based Compensation | - | - | ||||||||||||||||||||||||||||||
| Deemed Dividend on Redeemable Preferred Stock | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Net Loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance at July 31, 2026 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||
The unaudited consolidated financial statements should be read in connection with the notes to the unaudited consolidated financial statements.
| 6 |
Vitro BioPharma, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
Nine Months Ended July 31, 2026 | Nine months Ended July 31, 2025 | |||||||
| Operating Activities | ||||||||
| Net Loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities: | ||||||||
| Gain on Forgiveness of Debt | ( | ) | ( | ) | ||||
| Loss on Extinguishment of Debt | ||||||||
| Unrealized Gain on Derivative/Warrant Liability | ( | ) | ( | ) | ||||
| Depreciation Expense | ||||||||
| Bad Debt Expense | ||||||||
| Amortization Expense | ||||||||
| Amortization of Operating Lease – ROU Asset | ||||||||
| Accretion of Debt Discount | ||||||||
| Stock Based Compensation | ||||||||
| Pre-funded Warrants issued for Services | ||||||||
| Changes in Operating Assets and Liabilities | ||||||||
| Accounts Receivable | ( | ) | ( | ) | ||||
| Accounts Receivable – Related Party | ( | ) | ||||||
| Inventory | ( | ) | ( | ) | ||||
| Prepaid Expenses | ||||||||
| Accounts Payable | ( | ) | ||||||
| Notes Payable | ||||||||
| Accounts Payable – Related Party | ||||||||
| Operating Lease Obligation | ( | ) | ( | ) | ||||
| Accrued Liabilities | ( | ) | ||||||
| Accrued Interest | ||||||||
| Accrued Interest – Related Parties | ( | ) | ||||||
| Net Cash Used in Operating Activities | ( | ) | ( | ) | ||||
| Investing Activities | ||||||||
| Acquisition of Property and Equipment | ( | ) | ( | ) | ||||
| Patent Costs | ( | ) | ( | ) | ||||
| Net Cash Used in Investing Activities | ( | ) | ( | ) | ||||
| Financing Activities | ||||||||
| Issuance of Series A-1 Convertible Preferred Stock | ||||||||
| Issuance of 2025 Series Senior Secured Convertible Notes Payable – Stock Settled | ||||||||
| Payment of 2024 Senior Secured Convertible Notes Payable | ( | ) | ||||||
| Payment of 2021 Series Convertible Note Payable – Related Party | ( | ) | ||||||
| Capital Lease Principal Payments | ( | ) | ( | ) | ||||
| Net Cash Provided by Financing Activities | ||||||||
| Total Cash Provided (Used) During the Period | ( | ) | ||||||
| Beginning Cash Balance | ||||||||
| Ending Cash Balance | $ | $ | ||||||
| Cash Paid for Interest | $ | $ | ||||||
| Cash Paid for Income Taxes | $ | $ | ||||||
| Supplemental Schedule of Non-Cash Financing Activities: | ||||||||
| Cashless Exercise of Stock Options | $ | $ | ||||||
| Deemed Dividend | $ | $ | ||||||
| Reclassification of Preferred Stock to Redeemable Preferred Stock | $ | |||||||
| Conversion of 2022 Convertible Notes Payable to Redeemable Preferred Stock | $ | $ | ||||||
| Conversion of 2023 Convertible Notes Payable to Redeemable Preferred Stock | $ | $ | ||||||
| Conversion of 2023B Convertible Notes Payable to Redeemable Preferred Stock | $ | $ | ||||||
| Conversion of 2024 Senior Secured Convertible Notes Payable to Redeemable Preferred Stock | $ | $ | ||||||
| Conversion of 2025 Senior Secured Convertible Notes Payable to Redeemable Preferred Stock | $ | $ | ||||||
| Extinguishment of Derivative/Warrant Liabilities | $ | $ | ||||||
| Reclassification of the 2024 Series Convertible Notes to Notes Payable | $ | $ | ||||||
| Derivative/Warrant Liability on 2025 Series Senior Secured Notes Payable | $ | $ | ||||||
| Discount on Derivative/Warrant Liability on 2025 Series Senior Secured Notes Payable | $ | $ | ||||||
The unaudited consolidated financial statements should be read in connection with the notes to the unaudited consolidated financial statements.
| 7 |
VITRO BIOPHARMA, INC.
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JULY 31, 2026 AND 2025
NOTE 1 – NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Organization and Description of Business
Vitro Biopharma, Inc. (the “Company”) was incorporated under the laws of the State of Nevada on March 31, 1986, under the name Imperial Management, Inc. On December 17, 1986, the Company merged with Labtek, Inc., a Colorado corporation, with the Company being the surviving entity and the name of the Company was changed to Labtek, Inc. The name was then changed to Vitro Diagnostics, Inc. on February 6, 1987. From November of 1990 through July 31, 2000, the Company was engaged in the development, manufacturing, and distribution of purified human antigens (“Diagnostics”) and related technologies. The Company also developed cell technology including immortalization of certain cells, which allowed entry into other markets besides Diagnostics. In August 2000, the Company sold the Diagnostics business, following which it focused on developing therapeutic products, its stem cell technology, patent portfolio and proprietary technology and cell lines for applications in autoimmune disorders and inflammatory disease processes and stem cell research. On February 3, 2021, the Company filed an amendment to the articles of incorporation with the Nevada Secretary of State, changing the name of the Company to Vitro BioPharma, Inc.
Summary of Significant Accounting Policies
Basis of Presentation
The interim consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures included herein are adequate to make the information presented not misleading. These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended October 31, 2025, as filed with the SEC (“Form 10-K”). Unless otherwise noted in this Interim Report, there have been no material changes to the disclosures contained in the notes to the audited financial statements for the year ended October 31, 2025, contained in the Form 10-K.
The Consolidated Balance Sheet as of October 31, 2025, was derived from the audited financial statements included in the Form 10-K. In management’s opinion, the unaudited interim Consolidated Balance Sheet, Statements of Operations, Statements of Changes in Shareholders’ Deficit and Statements of Cash Flows, contained herein, reflect all adjustments, consisting solely of normal recurring items, which are necessary for the fair presentation of the Company’s financial position, results of operations and cash flows on a basis consistent with that of the Company’s prior audited consolidated financial statements. The results of operations for the interim periods may not be indicative of results to be expected for the full fiscal year. Certain prior period amounts were reclassified to conform to the current presentation on the Consolidated Financial Statements.
The accompanying consolidated financial statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“GAAP”).
Basis of Consolidation
The consolidated financial statements include the operations of the Company and its wholly owned subsidiary, InfiniVive MD, LLC (“InfiniVive”).
Reclassifications
Certain amounts in the prior period have been reclassified to conform with current period presentation.
Cash Equivalents
For the purposes of the Balance Sheets and Statements of Cash Flows, the Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which at times, may exceed the Federal depository insurance coverage limits. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.
| 8 |
Concentrations
During
the three and nine months ended July 31, 2026 and 2025,
As
of July 31, 2026, three customers accounted for
During
the three and nine months ended July 31, 2026 and 2025, foreign purchasers accounted for
Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheets.
Use of Estimates
The preparation of the financial statements in conformity with 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 differ from those estimates.
Revenue Recognition
As of January 1, 2018, the Company adopted Revenue from Contracts with Customers (Topic 606) (“ASC 606”). The new guidance sets forth a new five-step revenue recognition model which replaces the prior revenue recognition guidance in its entirety and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance that have historically existed in GAAP. The underlying principle of the new standard is that a business or other organization will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects to receive in exchange for the goods or services. To determine the appropriate amount of revenue to be recognized for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following steps: (i) identify the contract(s) with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract and (v) recognize revenue when (or as) each performance obligation is satisfied. The Company adopted the standard using the modified retrospective method and the adoption did not have a material impact on the Company’s consolidated financial statements.
For each performance obligation identified in accordance with ASC 606, the Company determines at contract inception whether it satisfies the performance obligation over time (in accordance with paragraphs 606-10-25-27 through 25-29) or satisfies the performance obligation at a point in time (in accordance with paragraph 606-10-25-30). If an entity does not satisfy a performance obligation over time, the performance obligation is satisfied at a point in time.
Control is considered transferred over time if any one of the following criteria is met:
| ● | The customer simultaneously receives and consumes the benefits of the asset or service which the entity performs; | |
| ● | The entity’s performance creates or enhances an asset; or | |
| ● | The entity’s performance creates or enhances an asset that has no alternative use to the entity and the entity has the right to payment for work completed to date. |
| 9 |
For certain contracts to which the Company is party, it uses the recognition over time method to recognize revenue.
The Company recognizes revenue when performance obligations with the customer are satisfied. Product sales occur once control is transferred upon shipment to the customer at the time of the sale. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods and services. The Company’s revenue is primarily derived from the sources listed below:
Sale of research and development product: Sales of research and development product include the sale of stem cell medium.
Sale of therapeutic product: Includes cell culture media to be used in therapeutic treatment, i.e. sales to Foreign Third-Party Clinics.
Shipping: Includes amounts charged to customers for shipping products. These amounts are included with the various types of revenue described in the table below.
Fitore product sales online: Includes internet sales, via the Fitore Nutrition website, of dietary supplements called Stemulife, Spectrum+, Easy Sleep and Thought Calmer. The Company stopped selling Fitore products in March 2025.
InfiniVive product sales: InfiniVive, via call-in and online orders, sells exosomes and daily cosmetic serum.
Disaggregation of revenue
The following tables summarize the Company’s revenue for the reporting periods, disaggregated by product or service type:
Three Months Ended July 31, 2026 | Three Months Ended July 31, 2025 | |||||||
| Revenues: | ||||||||
| Research and development products | $ | $ | ||||||
| AlloRx Stem Cells to Foreign Third-Party Clinics | ||||||||
| InfiniVive products | ||||||||
| Total | $ | $ | ||||||
The following tables summarize the Company’s revenue for the reporting periods, disaggregated by product or service type:
Nine
months Ended | Nine
months Ended | |||||||
| Revenues: | ||||||||
| Research and development products | $ | $ | ||||||
| AlloRx Stem Cells to Foreign Third-Party Clinics | ||||||||
| InfiniVive products | ||||||||
| Fitore products | ||||||||
| Total | $ | $ | ||||||
Deferred Revenue
The Company has recorded deferred revenue in connection with a Joint Operating Agreement (as subsequently amended, the “JOA”) executed between the Company and European Wellness/BIO PEP USA (“BIO PEP”). Pursuant to this JOA, which expired in accordance with its terms on July 31, 2023 and has not been renewed, the Company was obligated to use its best efforts to identify, develop and deliver various potential active pharmaceutical ingredients and to oversee the development of a recombinant cell line by a third-party service provider. The Company was also engaged to establish a Quality Management System to be utilized by BIO PEP in their pursuit of FDA authorizations. Prior to its expiration, our work under the JOA had been suspended since April 2023 pending discussions regarding amounts believed to be owed to us under that agreement for work already completed. If those discussions are unsuccessful, we may not be able to collect all of the amounts believed to be owed to us or the other amounts originally expected to be received by us under the agreement.
| 10 |
The
Company records as deferred revenue amounts for which the Company has been paid but for which it has not yet achieved and delivered related
milestones or when the level of effort required to complete performance obligations under an arrangement cannot be reasonably estimated
under the terms of the related agreement. Deferred revenue is classified as current or long-term based on when management estimates the
revenue will be recognized. As of October 31, 2025 and July 31, 2026, the Company has net deferred $
The table below summarizes Deferred Revenues as of July 31, 2026:
October 31, 2025 | Other Project Income Recognized | Net Revenue Deferred | July 31, 2026 | |||||||||||||
| Deferred Revenue | $ | $ | $ | $ | ||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
The table below summarizes Deferred Revenues as of October 31, 2025:
| October 31, 2024 | Other Project Income Recognized | Net Revenue Deferred | October 31, 2025 | |||||||||||||
| Deferred Revenue | $ | $ | $ | $ | ||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
Accounts Receivable
Accounts
receivable consists of amounts due from customers. The Company considers accounts more than 30 days old to be past due. The Company uses
the current expected credit loss method for recognizing bad debts. When an account is deemed uncollectible, it is written off against
the allowance. The Company generally does not require collateral for its accounts receivable. As of July 31, 2026 and October 31, 2025,
total accounts receivable, including related party amounts of $
As
of July 31, 2026, three customers accounted for
| 11 |
The Company complies with accounting and disclosure requirements ASC Topic 260, “Earnings Per Share.” Basic net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share takes into consideration shares of common stock outstanding (computed under basic income or loss per share) and potentially dilutive shares of common stock that are not anti-dilutive. For the nine months ended July 31, 2026 and 2025, the following number of potentially dilutive shares have been excluded from diluted net loss since such inclusion would be anti-dilutive:
| July 31, 2026 | July 31, 2025 | |||||||
| Stock options outstanding | ||||||||
| Shares to be issued in connection with exercise of warrants | ||||||||
| 2022 Series Convertible Notes Payable - common shares | ||||||||
| 2023 Series Convertible Notes Payable – Stock Settled | ||||||||
| 2023 Series Convertible Notes Payable – Stock Settled - warrants issuable | ||||||||
| 2023 Series B Convertible Notes Payable - Stock Settled | ||||||||
| 2023 Series B Convertible Notes Payable - Stock Settled - warrants issuable | ||||||||
| 2024 Series Senior Secured Convertible Notes Payable – Stock Settled | ||||||||
| 2024 Series Senior Secured Convertible Notes Payable – Stock Settled – warrants issuable | ||||||||
| 2025 Series Senior Secured Convertible Notes Payable – Stock Settled | ||||||||
| 2025 Series Senior Secured Convertible Notes Payable – Stock Settled – warrants issuable | ||||||||
| Series A-1 Convertible Preferred Stock | ||||||||
| Total | ||||||||
Inventory
Inventories, consisting of raw materials and finished goods, are stated at the lower of cost (using the specific identification method) or net realizable value. Inventories consisted of the following at the balance sheet dates:
| July 31, 2026 | October 31, 2025 | |||||||
| Raw Materials | $ | $ | ||||||
| Finished Goods | ||||||||
| Total inventory | $ | $ | ||||||
The
Company periodically reviews the value of items in inventory and provides write-downs or write-offs of inventory based on its assessment
of market conditions. During the three and nine months ended July 31, 2026 and 2025, the Company recorded $ and $
Patents
Costs
related to filing and pursuing patent applications (including direct application fees, and the legal and consulting expenses related
to making such applications) are capitalized as incurred and will not be amortized until a patent is granted at which time they will
be amortized. Capitalized patent costs recorded as of July 31, 2026 and October 31, 2025 were $
| 12 |
Property and Equipment
Property,
equipment, and leasehold improvements are recorded at historical cost. The cost of property and equipment is depreciated over the estimated
useful lives, when placed in service (ranging from
Intangible Assets and Impairment
Intangible assets that are subject to amortization are reviewed for potential impairment whenever events or circumstances indicate that carrying amounts may not be recoverable. Assets not subject to amortization are tested for impairment at least annually.
The Company periodically reviews its intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less that the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value.
Goodwill
Goodwill is the excess of acquisition cost over the fair value of the net assets of acquired businesses. The Company does not amortize goodwill but assesses goodwill for impairment at least annually or when there has been a material change in circumstances, using the market approach.
The Company accounts for expenses associated with shares issued for services using the fair value method following the guidance outlined in Section 718-10 of the FASB ASC for disclosure about stock-based compensation. This section requires a public entity to measure the cost of employee and non-employee services received in exchange for an award of equity instruments based on the grant date fair value of the award (with limited exceptions). That cost is recognized over the period during which the service is provided. No compensation cost is recognized for equity instruments for which service is not provided or rendered.
Redeemable Preferred Stock
The Company accounts for its redeemable preferred stock in accordance with ASC 480, Distinguishing Liabilities from Equity. Preferred stock that is mandatorily redeemable and that does not contain a substantive conversion option is classified as a liability and measured initially at fair value. Subsequent measurement follows the effective interest method or settlement value if the amount or timing varies. Preferred stock that is not mandatorily redeemable under ASC 480 but is redeemable (1) at a fixed or determinable price on a fixed or determinable date, (2) at the option of the holder, or (3) upon the occurrence of an event that is not solely within the Company’s control is classified outside of permanent stockholders’ equity as temporary, or mezzanine, equity.
If the instrument is currently redeemable, or if it is probable that it will become redeemable, the carrying amount is adjusted to the maximum redemption amount at each reporting date.
Cumulative dividends, whether or not declared, and adjustments to the carrying value are charged against retained earnings and reduce income available to common stockholders in the calculation of earnings per share.
Redeemable preferred stock classified as temporary equity is presented between liabilities and permanent equity on the balance sheet.
Recent Accounting Standards
In December 2023, the FASB issued ASU 2023-09, Income Taxes: Improvements to Income Tax Disclosures, which applies to all public business entities. This standard is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted. The Company will adopt this standard for the period ending October 31, 2026.
In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (DISE), which applies to all public business entities. This standard is effective for annual reporting periods beginning after December 15, 2026, with early adoption permitted.
| 13 |
NOTE 2 – GOING CONCERN
The
accompanying financial statements have been prepared in conformity with GAAP, which contemplate continuation of the Company as a going
concern. The Company has incurred net losses of approximately $
These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. In view of these matters, realization of certain of the assets in the accompanying balance sheets is dependent upon continued operations of the Company, which in turn is dependent upon the Company’s ability to meet its financial requirements, raise additional capital, and generate additional revenues and profit from operations.
Management plans to address the going concern include but are not limited to raising additional capital through an attempted public and/or private offering of equity securities, as well potentially issuing additional debt instruments. The Company also has various initiatives underway to increase revenue generation through diversified offerings of products and services related to its stem cell technology and analytical capabilities. The goal of these initiatives is to achieve profitable operations as quickly as possible. Various strategic alliances that are ongoing and under development are also critical aspects of management’s overall growth and development strategy. There is no assurance that these initiatives will yield sufficient capital to maintain the Company’s operations. There is no assurance that the ongoing capital raising efforts will be successful. Should management fail to successfully raise additional capital and/or fully implement its strategic initiatives, it may be compelled to curtail part or all of its ongoing operations.
The financial statements do not include any adjustments relating to the recoverability of assets and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company has historically financed its operations primarily through various private placements of debt and equity securities.
NOTE 3 – FAIR VALUE MEASUREMENT
ASC Topic 820, “Fair Value Measurements and Disclosures”, establishes a hierarchy for inputs used in measuring fair value for financial assets and liabilities that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions of what market participants would use in pricing the asset or liability based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of the inputs as follows:
● Level 1: Quoted prices available in active markets for identical assets or liabilities;
● Level 2: Quoted prices in active markets for similar assets and liabilities that are observable for the asset or liability; and
● Level 3: Unobservable pricing inputs that are generally less observable from objective sources, such as discounted cash or valuation models.
The financial assets and liabilities are classified in the Consolidated Balance Sheets based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels.
As disclosed in Note 7, the two tranches of 2023 Series Convertible Notes Payable - Stock Settled Derivative/Warrant Liability required identification and quantification of fair value. Similarly, the tranches of 2024 Series Senior Secured Convertible Notes – Stock Settled Derivative/Warrant Liability and the tranches of 2025 Series Senior Secured Convertible Notes – Stock Settled Derivative/Warrant Liability required identification and quantification of fair value. The derivative liabilities described below only relate to (i) the warrants included with the two tranches of the 2023 Series Convertible Notes Payable – Stock Settled debt, (ii) the warrants included with 2024 Series Senior Secured Convertible Note – Stock Settled debt and (iii) the warrants included with 2025 Series Senior Secured Convertible Note – Stock Settled debt. The estimated fair values as of the issuance date of these three tranches of notes are presented in Note 7.
| 14 |
As of October 31, 2025, the estimated fair values of the Company’s financial liabilities are presented in the following table:
| October 31, 2025 | ||||
| 2023 Series Convertible Notes Payable - Stock Settled - Derivative/Warrant Liability | $ | |||
| 2023 Series B Convertible Notes Payable – Stock Settled – Derivative/Warrant Liability | ||||
| 2024 Series Senior Secured Convertible Notes Payable – Stock Settled – Derivative/Warrant Liability | ||||
| 2025 Series Senior Secured Convertible Notes Payable – Stock Settled – Derivative/Warrant Liability | ||||
| Total | $ | |||
The following table presents a roll-forward of the fair value of the derivative liabilities associated with the Company’s warrants included with its 2025 Series Senior Secured Convertible Notes, its 2024 Series Senior Secured Convertible Notes Payable and its 2023 Series Convertible Notes Payable, categorized as Level 3:
Nine months Ended July 31, 2026 | Year Ended October 31, 2025 | |||||||
| Beginning Balance | $ | $ | ||||||
| Additions | ||||||||
| Settlements | ( | ) | ||||||
| Total Unrealized Gains | ( | ) | ( | ) | ||||
| Ending Balance | $ | $ | ||||||
During
the three and nine months ended July 31, 2026 and 2025, the unrealized gain on the Derivative Warrant Liability associated with the two
tranches of 2023 Series Convertible Notes Payable – Stock Settled was $ and $, and $ and $, respectively.
On May 15, 2026, all of the 2023 notes, totaling $
During
the three and nine months ended July 31, 2026 and 2025, the unrealized gain on the Derivative Warrant Liability associated with the 2024
Series Senior Secured convertible notes payable – stock settled was $
During
the three and nine months ended July 31, 2026 and 2025, the unrealized gain on the Derivative Warrant Liability associated with the 2025
Series Senior Secured convertible notes payable – stock settled was $
The fair value of the warrants granted in connection with the 2023 Series Convertible Notes Payable, the 2024 Series Senior Secured Convertible Notes Payable - Stock Settled and the 2025 Series Senior Secured Convertible Notes Payable – Stock Settled during the periods presented was estimated using the Black-Scholes option-pricing model with the following assumptions at July 31, 2026 and October 31, 2025:
| July 31, 2026 | October 31, 2025 | |||||||
| Risk-free interest rate | % | % | ||||||
| Dividend yield | % | % | ||||||
| Volatility factor | % | % | ||||||
| Weighted average expected life (years) | ||||||||
Estimated Fair Value of Financial Assets and Liabilities Not Measured at Fair Value
The Company’s financial instruments consist primarily of cash, accounts receivable, accounts payable, and Convertible Notes Payable. The carrying values of cash, accounts receivable and accounts payable are representative of their fair values due to their short-term maturities. The carrying amount of the Company’s Convertible Notes Payable approximates fair value as they bear interest over the term of the loans.
| 15 |
NOTE 4 – PROPERTY AND EQUIPMENT
The following is a summary of property and equipment, less accumulated depreciation at the balance sheet dates:
| July 31, 2026 | October 31, 2025 | |||||||
| Leasehold improvements | $ | $ | ||||||
| Property and equipment | ||||||||
| Total cost | ||||||||
| Less accumulated depreciation | ( | ) | ( | ) | ||||
| Net property and equipment | $ | $ | ||||||
Depreciation
expense for the three and nine months ended July 31, 2026 and 2025 was $
NOTE 5 – INTANGIBLE ASSETS
The following table sets forth the carrying amounts of intangible assets and goodwill including accumulated amortization as of July 31, 2026:
Remaining Useful Life | Cost | Impairment | Accumulated Amortization | Net Carrying Value | ||||||||||||||
| Trademarks and tradenames | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||
| Patents, know-how and unpatented technology | ( | ) | ( | ) | ||||||||||||||
| Customer relationships | ( | ) | ( | ) | ||||||||||||||
| Total | $ | $ | ( | ) | $ | ( | ) | |||||||||||
Remaining Useful Life | Cost | Impairment | Net Carrying Value | |||||||||||
| Goodwill | $ | $ | ( | ) | $ | |||||||||
The following table sets forth the carrying amounts of intangible assets and goodwill including accumulated amortization as of October 31, 2025:
Remaining Useful Life | Cost | Impairment | Accumulated Amortization | Net Carrying Value | ||||||||||||||
| Trademarks and tradenames | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||
| Patents, know-how and unpatented technology | ( | ) | ( | ) | ||||||||||||||
| Customer relationships | ( | ) | ( | ) | ||||||||||||||
| Total | $ | $ | ( | ) | $ | ( | ) | |||||||||||
Remaining Useful Life | Cost | Impairment | Net Carrying Value | |||||||||||
| Goodwill | $ | $ | ( | ) | $ | |||||||||
| 16 |
The table below presents anticipated future amortization expense related to the Company’s intangible assets for each of the succeeding five fiscal years ending October 31:
| 2026 (three months remaining) | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total | $ |
During
the three and nine months ended July 31, 2026 and 2025, the Company recorded amortization expense of $
NOTE 6 – LEASE OBLIGATIONS
The Company accounts for its leases in accordance with ASU No. 2016-02, Leases (Topic 842) (“ASC 842”). ASC 842 requires lessees to (i) recognize a right of use asset (“ROU asset”) and a lease liability that is measured at the present value of the remaining lease payments on the Consolidated Balance Sheets, (ii) recognize a single lease cost, calculated over the lease term on a straight-line basis and (iii) classify lease related cash payments within operating and financing activities.
The
Company’s operating lease consists of a lease for office space. The Company’s finance lease activities consist of leases
for equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The office lease contains an option
to a renewal period of
The following table shows the classification and location of the Company’s leases in the Consolidated Balance Sheets:
| Leases | Balance Sheet Location | July 31, 2026 | October 31, 2025 | |||||||
| Assets | ||||||||||
| Noncurrent: | ||||||||||
| Operating | Right-of-use asset – operating lease | $ | $ | |||||||
| Total Lease Assets | $ | $ | ||||||||
| Liabilities | ||||||||||
| Current: | ||||||||||
| Operating | Operating lease liabilities | $ | $ | |||||||
| Finance | Finance lease liabilities | |||||||||
| Noncurrent: | ||||||||||
| Operating | Operating lease liabilities | |||||||||
| Total Lease Liabilities | $ | $ | ||||||||
| 17 |
The following table shows the classification and location of the Company’s lease costs in the Consolidated Statements of Operations:
| Statements of Operations | Nine Months Ended July 31, | |||||||||
| Location | 2026 | 2025 | ||||||||
| Operating lease expense | General and administrative expense | $ | $ | |||||||
| Finance lease expense: | ||||||||||
| Interest on lease liability | Interest expense | |||||||||
| Total Lease expense | $ | $ | ||||||||
Minimum contractual obligations for the Company’s leases (undiscounted) as of July 31, 2026 were as follows:
| Operating | ||||
| Fiscal year 2026 (three months remaining) | $ | |||
| Fiscal year 2027 | ||||
| Fiscal year 2028 | ||||
| Fiscal year 2029 | ||||
| Thereafter | ||||
| Total Lease Payments | $ | |||
| Less Imputed interest | ( | ) | ||
| Total lease liability | $ | |||
The following table shows the weighted average remaining lease term and the weighted average discount rate for the Company’s leases as of the dates indicated:
| July 31, 2026 | October 31, 2025 | |||||||||||||||
| Operating Leases | Finance Leases | Operating Leases | Finance Leases | |||||||||||||
| Weighted-average remaining lease term (in years) | ||||||||||||||||
| Weighted-average discount rate (1) | % | N/A | % | % | ||||||||||||
| (1) |
The following table includes other quantitative information for the Company’s leases for the periods indicated:
| Nine months Ended July 31, | ||||||||
| 2026 | 2025 | |||||||
| Cash paid for amounts included in measurement of lease liabilities: | ||||||||
| Cash payments for operating leases | $ | $ | ||||||
| Cash payments for finance leases | $ | $ | ||||||
The
Company recorded amortization of the operating lease right-of-use asset of $
| 18 |
NOTE 7 – DEBT
The table below presents outstanding debt instruments as of July 31, 2026 and October 31, 2025:
| July 31, 2026 | October 31, 2025 | |||||||
| Short Term | ||||||||
| 2024 Senior secured convertible notes payable | $ | $ | ||||||
| Notes Payable | ||||||||
| Total Short-Term Debt | ||||||||
| Long Term | ||||||||
| Unsecured 6% note payable – related party | $ | $ | ||||||
| Unsecured 4% note payable – related party | ||||||||
| 2022 Series convertible notes | ||||||||
| 2023 Series convertible notes – stock settled | ||||||||
| Discount 2023 Series convertible notes | ( | ) | ||||||
| 2023 Series B convertible notes – stock settled | ||||||||
| Discount 2023 Series B convertible notes | ( | ) | ||||||
| 2025 Senior secured convertible notes payable | ||||||||
| Discount 2025 Senior secured convertible notes payable | ( | ) | ||||||
| Total Long-Term Debt | ||||||||
| Total Debt | $ | $ | ||||||
The table below presents the future maturities of outstanding debt obligations as of July 31, 2026:
| Fiscal year 2026 | $ | |||
| Fiscal year 2027 | ||||
| Fiscal year 2028 | ||||
| Fiscal year 2029 | ||||
| Fiscal year 2030 | ||||
| Fiscal year 2031 | ||||
| Total | $ |
Unsecured 6% Note Payable - Related Party
Interest
expense on this note was $
Unsecured 4% Note Payable - Related Party
Interest
expense on this note was $
2022 Series Convertible Notes
During
June and July, 2022, the Company issued a total of $
| 19 |
2023 Series Convertible Notes – Stock Settled
On
January 6, 2023, the Company sold $
On
various dates during March and April 2023, the Company sold $
On
various dates during June and July 2023, the Company sold $
The sale and purchase were made through a Convertible Note and Warrant Purchase Agreement (“Purchase Agreement”) entered into with each investor. The Company followed the guidance of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) ASC 480 “Distinguishing Liabilities from Equity” to account for the stock settled debt and ASC 815 “Derivatives and Hedging” to account for the derivative related to the notes and also to determine the number of warrants to be issued at the time of the issuance of the January 2023 Notes, March 2023 Notes, or the June 2023 Notes.
Each
of the January 2023 Notes, March 2023 Notes, and June 2023 Notes bear interest at the rate of eight per cent per annum and are payable
solely in shares of the Company’s common stock. Each of the January 2023 Notes, March 2023 Notes, and June 2023 Notes may be converted
at any time at the option of the holder and are payable in full at the earliest of (i) the completion of a “Qualified Financing,”
as defined below, (ii) a change in control, (iii) in the event of default, or (iv) the maturity date, which is five years from the date
of issuance. A Qualified Financing is defined in the Purchase Agreement as any financing completed after the date of issuance of either
the January 2023 Notes, March 2023 Notes, or June 2023 Notes involving the sale of the Company’s equity securities primarily for
capital raising purposes resulting in gross proceeds to the Company of at least $
The
Discounted Qualified Financing Price is defined as the per share price at which the shares of the Qualified Financing Securities are
sold in such Qualified Financing as determined for accounting purposes under GAAP, multiplied by
Each
January 2023 Warrant issuable by the Company pursuant to the Purchase Agreement entitles the holder to purchase that number of fully
paid and nonassessable shares of the Company’s common stock determined (A) in the case following a Qualified Financing, by dividing
(i) the sum of the aggregate outstanding principal amount of the January 2023 Note plus all accrued and unpaid interest thereon at the
time of conversion multiplied by
| 20 |
Each
March 2023 Warrant and June 2023 Warrant issuable by the Company pursuant to the Purchase Agreement entitles the holder to purchase that
number of fully paid and nonassessable shares of the Company’s common stock determined (A) in the case following a Qualified Financing,
by dividing (i) the sum of the aggregate outstanding principal amount of the March 2023 Note plus all accrued and unpaid interest thereon
at the time of conversion by (ii) the quotient of the Discounted Qualified Financing Price divided by
Participation
Rights. Each of the January 2023 Notes, March 2023 Notes, and June 2023 Notes entitle the holder to purchase in a Qualified Financing
an amount of Qualified Financing Securities (as defined above) up to
The Company contemplated ASC 815-15-25-1 related to the valuation of the embedded conversion feature contained in the January 2023 Notes, March 2023 Notes and June 2023 Notes. The Company determined, per the guidance, the embedded conversion feature did not meet the criteria to be classified as a derivative.
The
Company assessed the January 2023 Warrants, March 2023 Warrants, and June 2023 first under ASC 480. Based on the attributes of the January
2023 Warrants, March 2023 Warrants, and June 2023 Warrants, the Company determined that each are outside of the scope of ASC 480 and
proceeded to assess each under ASC 815 to determine if any are considered indexed to the Company’s own common stock. Because the
inputs which affect the number of shares to be issued upon exercise of the January 2023 Warrants, March 2023 Warrants, and June 2023
Warrants are not the inputs per 815-40-15-7E, none are deemed to be indexed to the Company’s own stock and have been recorded as
liabilities under ASC 815 (Note 3) at the fair market value. At issuance, the Company recorded a warrant liability related to the January
2023 Warrants of $
The
$
The
$
| 21 |
The
$
During
the three and nine months ended July 31, 2026 and 2025 the Company recorded $
On
May 15, 2026, the Company closed on $
As
of July 31, 2026 and October 31, 2025, the Company had accrued $
2024 Series Senior Secured Convertible Notes – Stock Settled
On
November 16, 2023 and January 10, 2024, the Company entered into securities purchase agreements (the “January Purchase Agreements”)
with an accredited investor, pursuant to which the Company issued and sold to the investor, in a private placement, (i) senior secured
convertible notes (the “January Series 2024 Notes”) in the principal amount of $
On
April 11, 2024, the Company entered into a securities purchase agreement (the “April Purchase Agreement”) with an accredited
investor, pursuant to which the Company issued and sold to the investor, in a private placement, (i) senior secured convertible notes
(the “April Series 2024 Notes”) in the principal amount of $
On
May 13, 2024, the Company entered into securities purchase agreements (the “May Purchase Agreement”) with accredited investors,
pursuant to which the Company issued and sold to the investors, in a private placement, (i) senior secured convertible notes (the “May
Series 2024 Notes”) in the principal amount of $
On
June 21, 2024, the Company entered into a letter agreement (the “Target Extension Agreement”) with Target Capital 16 LLC
(“Target”). Pursuant to the Target Extension Agreement, the maturity date of the January Series 2024 Notes of the Company
held by Target, in the aggregate original principal amount of $
On
July 16, 2024, the Company entered into a second letter agreement (the “Target Consolidation Agreement”) with Target. Pursuant
to the Target Consolidation Agreement, in consideration of an additional $
The January Series 2024 Notes, April Series 2024 Notes, May Series 2024 Notes, and July Series 2024 Notes are collectively the “Series 2024 Notes.” The January Series 2024 Warrants, April Series 2024 Warrants, and May Series 2024 Warrants are collectively the “Series 2024 Warrants.” No Series 2024 Warrants were issued with the July Series 2024 Notes.
| 22 |
Interest
on the Series 2024 Notes will accrue commencing on the earlier of the maturity date or upon an event of default, at the annual rate of
20%, due the first day of each calendar month following such date. The January Series 2024 Notes will mature at the earlier of (i) six
months from the issuance date (the “Original Maturity Date”) and (ii) the occurrence of a Liquidity Event (as defined in
the January Series 2024 Notes), provided that the Company may extend the maturity date for an additional three months (the “January
Extension Period”). The April Series 2024 Notes will mature at the earlier of (i) May 16, 2024 and (ii) the occurrence of a Liquidity
Event (as defined in the April Series 2024 Notes), provided that the Company may extend the maturity date for an additional three months
(the “April Extension Period”). The May Series 2024 Notes will mature at the earlier of (i) May 16, 2024 and (ii) the occurrence
of a Liquidity Event (as defined in the May Series 2024 Notes), provided that the Company may extend the maturity date for an additional
three months (the “May Extension Period”). The July Series 2024 Notes will mature on October 16, 2024 (the “Original
Final Maturity Date”), provided that, if the Company (A) will have been diligently pursuing the consummation of a Liquidity Event
(as defined in the Notes) through such date (as evidenced by the filing of a registration statement under the Securities Act of 1933,
as amended (the “Securities Act”), or the Securities Exchange Act of 1934, as amended) and (y) will have delivered an extension
notice, then the Original Final Maturity Date will be extended to November 16, 2024 (the “Extended Final Maturity Date”),
and (B) will have consummated a Liquidity Event on or before the Original Final Maturity Date or Extended Final Maturity Date, then the
Extended Final Maturity Date will be extended by 180 days from the date of such consummation. The Series 2024 Notes are secured by all
of the Company’s assets pursuant to a security agreement between the Company and the investors.
The Company followed the guidance of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) ASC 480 “Distinguishing Liabilities from Equity” to account for the stock settled debt, ASC 470 “Debt,” and ASC 815 “Derivatives and Hedging” to account for Series 2024 Notes and Series 2024 Warrants.
The Company contemplated ASC 815-15-25-1 related to the valuation of the embedded conversion feature contained in the Series 2024 Notes. The Company determined, per the guidance, the embedded conversion feature did not meet the criteria to be classified as a derivative.
The
Company assessed the Series 2024 Warrants first under ASC 480. Based on the attributes of the Series 2024 Warrants, the Company determined
that each are outside of the scope of ASC 480 and proceeded to assess each under ASC 815 to determine if any are considered indexed to
the Company’s own common stock. Because the inputs which affect the number of shares to be issued upon exercise of the Series 2024
Warrants are not the inputs per 815-40-15-7E, none are deemed to be indexed to the Company’s own stock and have been recorded as
liabilities under ASC 815 (Note 3) at the fair market value. Because the scenario under which the Series 2024 Notes are analyzed assumes
a Liquidity Event, the scenarios under which to analyze the Series 2024 Warrants should also contain a Liquidity Event. As such, the
assumed exercise price is $
The
combination of the original issuance discount of $
Pursuant
to ASC 480, the Company assessed the January Series 2024 Notes and the July Series 2024 Notes comparing the present value of the cash
flows of both notes at the January Series 2024 Notes effective interest rate. Because the difference between the present value of the
January Series 2024 Notes and July Series 2024 Notes cash flows was greater than 10%, the two sets of notes were deemed to be substantially
different and, as such, the extinguishment of January Series 2024 Notes were recorded as a gain in the statement of operations. Immediately
prior to the extinguishment, the Company recorded a gain on the fair value of the warrant liability of $
| 23 |
The
combination of the original issuance discount of $
The
combination of the original issuance discount of $
During
the three and nine months ended July 31, 2026 and 2025,
The
July Series 2024 Target note was extended to March 31, 2025, with an increase in the principal amount of $
2025 Series Senior Secured Convertible Notes – Stock Settled
On
February 27, 2025, the Company entered into securities purchase agreements (the “February Purchase Agreements”) with an accredited
investor, pursuant to which the Company issued and sold to the investor, in a private placement, (i) senior secured convertible notes
(the “February Series 2025 Notes”) in the principal amount of $
On
April 25, 2025, the Company received an additional $
On
May 21, 2025, the Company received an additional $
On
October 27, 2025, the Company received an additional $
| 24 |
The February Series 2025 Notes, April Series 2025 Notes, May Series 2025 Notes and October Series 2025 Notes are collectively the “Series 2025 Notes.” The February Series 2025 Warrants, April Series 2025 Warrants, May Series 2025 Warrants and October Series 2025 Warrants are collectively the “Series 2025 Warrants.”
Interest
on the Series 2025 Notes will accrue commencing on the earlier of the maturity date or upon an event of default, at the annual rate of
20%, due the first day of each calendar month following such date. The Series 2025 Notes will mature at the earlier of (i) February 27,
2026 (the “Original Maturity Date”) and (ii) the occurrence of a Liquidity Event (as defined in the Series 2025 Notes), provided
that the Company may extend the maturity date for an additional year (the “Extension Period”). The Series 2025 Notes are
secured by all of the Company’s assets pursuant to a security agreement between the Company and the investors.
The Company followed the guidance of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) ASC 480 “Distinguishing Liabilities from Equity” to account for the stock settled debt, ASC 470 “Debt,” and ASC 815 “Derivatives and Hedging” to account for Series 2025 Notes and Series 2025 Warrants.
The Company contemplated ASC 815-15-25-1 related to the valuation of the embedded conversion feature contained in the Series 2025 Notes. The Company determined, per the guidance, the embedded conversion feature did not meet the criteria to be classified as a derivative.
The
Company assessed the Series 2025 Warrants first under ASC 480. Based on the attributes of the Series 2025 Warrants, the Company determined
that each are outside of the scope of ASC 480 and proceeded to assess each under ASC 815 to determine if any are considered indexed to
the Company’s own common stock. Because the inputs which affect the number of shares to be issued upon exercise of the Series 2025
Warrants are not the inputs per 815-40-15-7E, none are deemed to be indexed to the Company’s own stock and have been recorded as
liabilities under ASC 815 (Note 3) at the fair market value. Because the scenario under which the Series 2025 Notes are analyzed assumes
a Liquidity Event, the scenarios under which to analyze the Series 2025 Warrants should also contain a Liquidity Event. As such, the
assumed exercise price is $
| 25 |
The
combination of the original issuance discount of $
The
combination of the original issuance discount of $
The
combination of the original issuance discount of $
In
association with the October Series 2025 Notes, the lender and the Company amended the original note to include the April, May and October
Series and renegotiated the conversion methodology from using a $
The
combination of the original issuance discount of $
As
of May 15, 2026, the October Series 2025 Notes of $
During
the three and nine months ended July 31, 2026 and 2025,
NOTE 8– REDEEMABLE PREFERRED STOCK
The Company has authorized shares of $
par value Preferred Stock, of which were designated as Series A Convertible Preferred Shares. In May 2025, the Company designated
shares as Series A-1 Convertible Preferred Shares for a private placement of the A-1 stock for a maximum of $
| 26 |
The following is a summary of the rights and preferences of the Preferred A-1 Stock:
The holders of the Preferred A-1 Stock are entitled to a liquidation preference with respect to the Preferred A-1 Stock in the amount of $ per share (“Stated Value”), subordinate to the stated value of any outstanding shares of preferred stock ranking senior to the Preferred A Stock, pari passu with the stated value of the series A-1 Preferred Stock, and senior to the rights of the holders of common stock.
The
holders of the Preferred A-1 Stock are entitled to cumulative dividends at the annual rate of
The Preferred A-1 Stock may be redeemed by the Company, in whole or in part, at any time or from time to time by notice to the holders. In the event of redemption, the Company shall be obligated to pay to each holder the Stated Value per share plus any accrued but unpaid dividends. At any time on or after the third (3rd) anniversary of the Effective Date, the Investor shall have the right, at its sole election, to require the Company to redeem all or any portion of the Shares.
The
Preferred A-1 Shares are convertible into common stock at $
The holders of the Preferred A-1 Shares have the right to vote with the holders of the common stock on any matters presented to the stockholders at any regular or special meeting of the stockholders of the Company on an “as-converted” basis. The holders of the Series A-1 Stock are also entitled to vote as a class in the event the Company intends to create and/or issue shares of preferred stock that are senior to the Series A-1 Stock or if the Company attempts to amend its Articles of Incorporation to alter or amend the powers, privileges, rights, restrictions or conditions of the Series A-1 Stock.
On May 15, 2026, the Series A-1 Preferred Stock was amended to include the right of the holders of the Preferred A-1 Shares to redeem their shares on or after May 15, 2029, at its then current market value.
After this amendment, the Company re-assessed the Series A-1 Preferred Stock under ASC 480. Since the shares are redeemable at the option of the preferred stockholders, the shares have been classified as temporary equity on the balance sheet and reported as Redeemable Preferred Stock.
As
of July 31, 2026, the Company determined the value of the Redeemable Preferred Stock to be the original carrying value of $
Activity for the nine months ended July 31, 2026 and the year ended October 31, 2025
During
the three months ended July 31, 2026, the Company issued shares of its Series A-1 Convertible Preferred Stock for proceeds of
$
During
the three months ended July 31, 2026, the Company issued shares of its Series A-1 Convertible Preferred Stock for conversion of
$
During
the three months ended July 31, 2026, the Company issued shares of its Series A-1 Convertible Preferred Stock for conversion of
$
During
the three months ended July 31, 2026, the Company issued
shares of its Series A-1 Convertible Preferred Stock for conversion
of $
| 27 |
During
the three months ended July 31, 2026, the Company issued shares of its Series A-1 Convertible Preferred Stock for conversion
of $
NOTE 9– STOCKHOLDERS’ EQUITY
Preferred Stock
The
Company has authorized shares of $ par value Preferred Stock, of which were designated as Series A Convertible
Preferred Shares. In May 2025, the Company designated shares as Series A-1 Convertible Preferred Shares for a private placement
of the A-1 stock for a maximum of $
Activity for the nine months ended July 31, 2026 and the year ended October 31, 2025
During
the three months ended April 30, 2026, the Company issued shares of its Series A-1 Convertible Preferred Stock for proceeds of
$
During
the three months ended April 30, 2026, the Company issued
shares of its Series A-1 Convertible Preferred Stock for conversion of $
During
the three months ended January 31, 2026, the Company issued shares of its Series A-1 Convertible Preferred Stock for proceeds
of $
During
the year ended October 31, 2025, the Company issued shares of its Series A-1 Convertible Preferred Stock for proceeds of $
As of May 15, 2026, the Company reclassified shares of its Series A-1 Convertible Preferred Stock, with a value of $ to Redeemable Preferred Stock.
Common Stock
As of July 31, 2026, the Company had authorized shares of $ par value common stock. As of July 31, 2026 and October 31, 2025, , and shares were issued and outstanding, respectively.
Effective January 5, 2026, an option holder exercised their right to complete a cashless exercise exchanging options for shares of common stock.
There were no grants of common shares or exercise of options during the year ended October 31, 2025.
| 28 |
Stock-Based Compensation
There were grants of stock purchase options during the nine months ended July 31, 2026 or 2025.
Number of Shares | Weighted Average Exercise Price per Share | Weighted Average Remaining Contractual Life (in years) | Aggregate intrinsic value | |||||||||||||
| Balance at October 31, 2024 | $ | $ | ||||||||||||||
| Options exercised | - | - | ||||||||||||||
| Options granted | - | - | ||||||||||||||
| Options expired | - | - | ||||||||||||||
| Options forfeited | - | - | ||||||||||||||
| Balance at October 31, 2025 | ||||||||||||||||
| Options exercised | ( | ) | - | - | ||||||||||||
| Options granted | - | - | ||||||||||||||
| Options expired | - | - | ||||||||||||||
| Options forfeited | - | - | ||||||||||||||
| Balance at July 31, 2026 | $ | $ | ||||||||||||||
Stock based compensation expense related to options for the three and nine months ended July 31, 2026 and 2025 amounted to $ and $, and $ and $, respectively. As of July 31, 2026 and October 31, 2025, and options were exercisable, respectively. Unrecognized compensation expense related to outstanding options amounted to $ and $ as of July 31, 2026 and October 31, 2025, respectively.
Warrants
Activity for the nine months ended July 31, 2026
During
the nine months ended July 31, 2026 the Company issued
During
the nine months ended July 31, 2026 the Company issued
During
the nine months ended July 31, 2026 the Company issued
During
the nine months ended July 31, 2026 the Company issued
Activity for the year ended October 31, 2025
Effective
November 16, 2024, the Company granted
On
January 27, 2025, the Company granted
A & B Warrants
A summary of the Company’s common stock underlying its outstanding A and B warrants as of July 31, 2026 and October 31, 2025 is as follows:
Underlying Number of Shares | Average Exercise Price | Weighted Average Life | ||||||||||
| Outstanding – October 31, 2024 | $ | |||||||||||
| Warrants A – Granted during the period | - | |||||||||||
| Warrants B – Granted during the period | - | |||||||||||
| Warrants A – Expired during the period | ( | ) | - | |||||||||
| Warrants B – Expired during the period | - | |||||||||||
| Outstanding – October 31, 2025 | ||||||||||||
| Warrants A – Granted during the period | - | |||||||||||
| Warrants B – Granted during the period | - | |||||||||||
| Warrants A – Expired during the period | - | |||||||||||
| Warrants B – Expired during the period | ( | ) | - | |||||||||
| Outstanding – July 31, 2026 | $ | |||||||||||
| 29 |
Pre-Funded Warrants
A summary of the Company’s common stock underlying its outstanding pre-funded warrants as of July 31, 2026 and October 31, 2025 is as follows:
Underlying Number of Shares | Average Exercise Price | Weighted Average Life | ||||||||||
| Outstanding – October 31, 2024 | $ | N/A | ||||||||||
| Pre-Funded Warrants – Granted during the period | N/A | |||||||||||
| Pre-Funded Warrants – Exercised during the period | - | |||||||||||
| Pre-Funded Warrants – Expired during the period | - | |||||||||||
| Outstanding – October 31, 2025 | N/A | |||||||||||
| Pre-Funded Warrants – Granted during the period | - | |||||||||||
| Pre-Funded Warrants – Exercised during the period | - | |||||||||||
| Pre-Funded Warrants – Expired during the period | - | |||||||||||
| Outstanding – July 31, 2026 | $ | N/A | ||||||||||
These warrants have been included in the calculation of shares of common stock outstanding for the purposes of basic earnings per share.
Other Warrants
A summary of the Company’s common stock underlying other warrants as of July 31, 2026 and October 31, 2025 is as follows:
Underlying Number of Shares | Average Exercise Price | Weighted Average Life | ||||||||||
| Outstanding – October 31, 2024 | $ | N/A | ||||||||||
| Warrants – Issued during the period | N/A | |||||||||||
| Warrants – Exercised during the period | - | |||||||||||
| Warrants – Expired during the period | - | |||||||||||
| Outstanding – October 31, 2025 | N/A | |||||||||||
| Warrants – Issued during the period | N/A | |||||||||||
| Warrants – Exercised during the period | - | |||||||||||
| Warrants – Expired during the period | - | |||||||||||
| Outstanding – July 31, 2026 | $ | N/A | ||||||||||
NOTE 10 – COMMITMENTS AND CONTINGENCIES
Employment agreements
On
July 6, 2022, the Company hired Christopher Furman as its new Chief Executive Officer. Mr. Furman will receive an annual base salary
of $
On
December 1, 2021, the Company and John Evans, a former CFO of the Company, entered into a Consulting Agreement (“Evans Consulting
Agreement”). Under the terms of the Evans Consulting Agreement, Mr. Evans is to provide advisory services to the CEO and CFO of
the Company. The Evans Consulting Agreement expired on December 1, 2025. Per mutual verbal agreement, the Company has deferred and accrued
$
On
December 1, 2020, the Company entered into a new employment agreement with James Musick, Chief Science Officer (the “Musick Agreement”).
Pursuant to the terms of the Musick Agreement, the Company agreed to pay Dr. Musick a base salary of $
| 30 |
NOTE 11 – RELATED PARTY TRANSACTIONS
Accounts Receivable and Revenues
Dr.
Zamora, former CEO and 29% holder of the Company’s common stock, is also a customer of the Company in his capacity as a
practicing physician. As of July 31, 2026 and October 31, 2025, Dr. Zamora owed the Company $
Accounts Payable and Other Accrued Liabilities
The
spouse of the Company’s Chief Science Officer, through an entity she controls, leases office and lab space to the Company. As of
July 31, 2026 and October 31, 2025, the Company owes this entity $
During
the nine months ended July 31, 2026, the Company paid its founder a total of $
NOTE 12 – SEGMENT INFORMATION
We manage our business activities on a consolidated basis and operate as a single operating segment dedicated to developing and marketing products for various medical conditions. We derive our revenue from product sales of the AlloRx™ , research and development, and InfiniVive product lines, . The accounting policies of the segment are the same as those described in Note 1 – Nature of Organization and Summary of Significant Accounting Policies.
Our Chief Operating Decision Maker (“CODM”) is our Chief Executive Officer, Chris Furman. The CODM uses net loss, as reported in our consolidated statements of operations, in evaluating the performance of the segment and determining how to allocate our resources as a whole. The CODM does not review assets in evaluating the results of the segment, and therefore, such information is not presented.
The following table presents the operating results of the segment:
Three Months Ended July 31, 2026 | Three Months Ended July 31, 2025 | |||||||
| Revenues | $ | $ | ||||||
| Less Significant Segment Expenses: | ||||||||
| Cost of Sales | ( | ) | ( | ) | ||||
| Total Compensation and Benefits Cost | ( | ) | ( | ) | ||||
| Research and Development | ( | ) | ( | ) | ||||
| All Other Operating Expenses (Excluding Depreciation, Amortization and Stock Based Compensation) (a) | ( | ) | ( | ) | ||||
| Other Segment Items: | ||||||||
| Depreciation, Amortization and Stock-Based Compensation | ( | ) | ( | ) | ||||
| Interest Expense | ( | ) | ( | ) | ||||
| Other Income (Expense), Net | ( | ) | ||||||
| Consolidated Net Loss | $ | ( | ) | $ | ( | ) | ||
| (a) |
The following table presents the operating results of the segment:
Nine months Ended July 31, 2026 | Nine months Ended July 31, 2025 | |||||||
| Revenues | $ | $ | ||||||
| Less Significant Segment Expenses: | ||||||||
| Cost of Sales | ( | ) | ( | ) | ||||
| Total Compensation and Benefits Cost | ( | ) | ( | ) | ||||
| Research and Development | ( | ) | ( | ) | ||||
| Impairment Expense | ( | ) | ||||||
| All Other Operating Expenses (Excluding Depreciation, Amortization and Stock Based Compensation) (a) | ( | ) | ( | ) | ||||
| Other Segment Items: | ||||||||
| Depreciation, Amortization and Stock-Based Compensation | ( | ) | ( | ) | ||||
| Interest Expense | ( | ) | ( | ) | ||||
| Other Income (Expense), Net | ( | ) | ( | ) | ||||
| Consolidated Net Loss | $ | ( | ) | $ | ( | ) | ||
| (a) |
| 31 |
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
In the following discussion, “Vitro”.,” the “Company,” “we,” “our,” and “us” refer to Vitro BioPharma, Inc., and its subsidiaries, as the context requires.
The following discussion analyzes our operating results for the three and nine months ended July 31, 2026 and compares those results to the three and nine months ended July 31, 2025. The discussion below also analyzes our liquidity and capital resources as of July 31, 2026 and material changes in those resources since the October 31, 2025. We suggest that you read the following information in conjunction with our unaudited consolidated financial statements for the three and nine months ended July 31, 2026 and 2025 contained elsewhere in this Report and our audited consolidated financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Form 10-K. Further, we encourage you to review the Special Note Regarding Forward-Looking Statements.
Overview
We are an innovative biotechnology company targeting autoimmune diseases and inflammatory disorders, with an ancillary focus in the research services and cosmeceutical fields. With respect to our regenerative medicine business, we are developing novel cellular therapeutic candidates intended to address significant unmet medical needs. In the United States, we are authorized to conduct two clinical trials under two FDA IND applications to assess the safety and efficacy of AlloRx Stem Cell therapy in PTHS and Long COVID and expect to commence those trials in 2026 pending receipt of sufficient working capital. We generate revenue from our other technologies through a number of other activities, including through the sale of our stem cell products as well as cosmeceuticals through InfiniVive MD, our wholly-owned subsidiary, which helps to alleviate our expenses.
Components of Operating Results
Revenue
We generate revenue primarily from our proprietary products and technologies, including through supplying AlloRx Stem Cells, CAFs, native fibroblasts and other stem cell products and technologies developed by us.
Our acquisition of InfiniVive MD, in 2021, provides us with revenue through sales of topical cosmetic conditioned media and exosomes serums.
Selling, General and Administrative Expenses
Selling, General and Administrative (“SG&A”) expenses consist of salaries and other related costs, stock-based compensation, legal fees relating to corporate matters, other professional fees for accounting, auditing, tax and consulting services, insurance costs, travel expenses, and facility-related expenses.
We expect that our SG&A expenses will increase in the future as we expect to increase our headcount to support increased research and development activities relating to our clinical programs. We also expect to incur increased SG&A expenses associated with being a public company, including costs of accounting, audit, legal, regulatory and tax-related services associated with maintaining compliance with stock exchange and SEC requirements, director and officer insurance costs, and investor and public relations costs.
| 32 |
Research and Development Expenses
All our research and development expenses to date have been incurred in connection with the discovery and development of our research products and product candidates. We expect our research and development expenses to increase significantly for the foreseeable future when we commence clinical trials and advance the pre-clinical and clinical development of our programs, including the conduct of our planned clinical trials.
Research and development expenses consist of personnel-related costs, including salaries, benefits, and non-cash stock-based compensation, external research and development expenses incurred under arrangements with third parties, laboratory supplies, costs to acquire and license technologies aligned with our goal of translating engineered cells to medicines, facility and other allocated expenses, including rent, depreciation, and allocated overhead costs, and other research and development expenses. Where appropriate, we will allocate our third-party research and development expenses on a program-by-program basis.
The successful development of product candidates is highly uncertain and subject to numerous risks and uncertainties.
Accordingly, at this time, we cannot reasonably estimate the nature, timing or costs required to complete the remaining development of any product candidates and to obtain regulatory approval for one or more of these product candidates.
Other Income and Expenses
Other income/expense consisted of interest expense on our outstanding debt.
Going Concern
Our consolidated financial statements contained in this Report have been prepared assuming that we will continue as a going concern, which contemplates the continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. As reflected in our consolidated financial statements, we have an accumulated deficit as of July 31, 2026, of $60 million. We incurred net losses of approximately $11.2 million and $10.9 million during the nine months ended July 31, 2026 and the year ended October 31, 2025, respectively. We used cash in operating activities of $3.4 million and $1.8 million during the nine months ended July 31, 2026 and 2025, respectively. We had working capital of approximately $2.7 million as of July 31, 2026. These factors raise substantial doubt about our ability to continue as a going concern.
We have commenced the execution of our long-range business plan and efforts to generate additional revenue; however, our current cash position is not sufficient to support our daily operations for the next 12 months from the date of issuance of the financial statements. Our ability to continue as a going concern is dependent upon our ability to raise additional funds through debt or equity financings and our ability to further implement our business plan and generate additional revenue.
The consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.
Results of Operations
The following table summarizes our operating results for the three months ended July 31, 2026 and 2025:
| Three Months Ended July 31, | ||||||||
| 2026 | 2025 | |||||||
| Product Sales | $ | 570,464 | $ | 595,143 | ||||
| Product Sales, Related Parties | - | 13,500 | ||||||
| Total Revenue | 570,464 | 608,643 | ||||||
| Less: Cost of Goods Sold | (144,638 | ) | (69,612 | ) | ||||
| Gross Profit | 425,826 | 539,031 | ||||||
| Selling, General and Administrative Expenses | (1,406,807 | ) | (1,309,934 | ) | ||||
| Research and Development | (277,128 | ) | (119,210 | ) | ||||
| Interest Expense | (108,460 | ) | (859,591 | ) | ||||
| Gain on Forgiveness of Debt | 1,058,264 | - | ||||||
| Loss on Extinguishment of Debt | (8,303,109 | ) | - | |||||
| Unrealized Gain on Derivative/Warrant Liability | 67,677 | 51,166 | ||||||
| Net Loss | $ | (8,543,737 | ) | $ | (1,698,538 | ) | ||
| 33 |
Net Loss
We recorded a net loss of $8,543,737 in the three months ended July 31, 2026, an increase of $6,845,199 from the three months ended July 31, 2025 loss of $1,698,538, or 403%. The increased loss in the three months ended July 31, 2026 was related to the loss on extinguishment of debt that occurred in the three months ended July 31, 2026, related to the conversion of various convertible notes payable. We expect to continue reporting losses until such time, if ever, we can improve the operation of our subsidiaries and/or commercialize one or more of our product candidates and generate sales sufficient to offset our operating costs and expenses and interest expenses.
Product Sales
Total revenue in the three months ended July 31, 2026, decreased by $38,179, or 6%, from the three months ended July 31, 2025. The decrease is attributable to the factors described below. Our revenue is generated by sales of research products, sales of AlloRx Stem Cells to foreign third-party clinics and medical centers, consulting revenue and sales from our subsidiaries, InfiniVive MD and Fitore.
During the three months ended July 31, 2026 and 2025, research and development product sales were $74,431 and $88,199, respectively, an increase in the three months ended July 31, 2026 of $1,232, or 1%. The increase was attributable to biopharmaceutical institutions, university research labs and clinics purchasing slightly more CAFs and native fibroblasts in the three months ended July 31, 2026. CAFs and native fibroblasts are used by such institutions for stem cell research and the development of advanced immunotherapy of cancer, and our sales to such institutions are generally completed on a purchase order basis and without minimum purchase obligations. As a result, sales volumes in a particular period may fluctuate based on the number of research programs then being pursued by such institutions.
Sales of AlloRx Stem Cells to foreign third-party clinics for the three months ended July 31, 2026 and 2025 were $394,428 and $490,960 respectively, a decrease of $96,532, or 20%. The decrease is attributable to decreased sales volumes, as third-party clinics for which we supply AlloRx Stem Cells treated significantly fewer patients during the three months ended July 31, 2026. We expect AlloRx Stem Cell sales internationally to increase over the next year as these products expand into additional foreign third-party clinics and medical centers and our current foreign third-party clinics and medical center customers increase their total monthly patients as international travel continues to pick back up.
Sales of InfiniVive products for the three months ended July 31, 2026 and 2025 were $101,605 and $29,484 respectively, an increase of $72,121, or 245%. The increase is attributable to increased sales efforts for the InfiniVive product line and better acceptance of the products for novel treatments. We expect InfiniVive product sales domestically and internationally to increase over the next year as these products expand into additional foreign and domestic third-party clinics and med spas.
Product Sales – Related Parties
Product sales to related parties are sales to the medical practice of Dr. Zamora, our former Chief Executive Officer. Such sales for the three months ended July 31, 2026 and 2025, were $0 and $13,500, respectively.
Cost of Goods Sold
Our cost of goods sold during the three months ended July 31, 2026 totaled $144,638 compared to $69,612 during the three months ended July 31, 2025, an increase of $75,026, or 108%, resulting in gross profit of $425,826 and $539,031 for the three months ended July 31, 2026 and 2025, respectively. The gross profit percentages for the three months ended July 31, 2026 and 2025 were 75% and 89%, respectively. Cost of goods sold, as a percentage of revenue during the three months ended July 31, 2026 is consistent with the three months ended April 30, 2026.
| 34 |
Selling, General and Administrative Expenses
SG&A expenses increased from $1,309,934 in the three months ended July 31, 2025, to $1,406,807 in the three months ended July 31, 2026. This increase of $96,873 or 7% was primarily due to an increase in salaries and consulting fees.
Research and Development
Research and development expenses for the three months ended July 31, 2026 and 2025 were $277,128 and $119,210, respectively, an increase of $157,918, or 132%, as the Company continues working to identify additional indications for the study of AlloRx Stem Cell therapy and to prepare AlloRx Stem Cell therapy for future Phase 1/2a clinical trials for PTHS and Long COVID which have been authorized by the FDA. In the three months ended July 31, 2026, the Company primarily continued its efforts to prepare AlloRx Stem Cell therapy and its regenerative aesthetics products through InfiniVive MD for future clinical trials.
Interest Expense
Interest expense for the three months ended July 31, 2026, was $108,460, a decrease of $751,131 or 87%, from the interest expense for the three months ended July 31, 2025, of $859,591. This decrease is due to debt discount accretion costs related to the 2025 Senior Secured Notes being converted to preferred stock in the early part of the three months ended July 31, 2026.
Gain on Forgiveness of Debt
During the three months ended July 31, 2026, a vendor issued a credit memo for $1,058,264 of previously accrued fees for services. There were no similar transactions during the three months ended July 31, 2025.
Loss on Extinguishment of Debt
During the three months ended July 31, 2026, all of the 2022, 2023, 2023B and 2025 notes converted to Series A-1 Preferred, with price discounts ranging from 0% to 40% of the offering price of the Series A-1, per their note agreements, creating the loss on extinguishment of debt of $8,303,109. There were no similar transactions during the three months ended July 31, 2025.
Unrealized Gain on Derivative/Warrant Liability
During the years ended October 31, 2025, 2024 and 2023, we issued 8% Convertible Notes and Senior Secured Notes. In connection with these notes, the Company recognized a Derivative/Warrant liability. For the three months ended July 31, 2026 and 2025, this liability was marked to market, resulting in an unrealized gain during the three months ended July 31, 2026 of $67,677 while in the three months ended July 31, 2025, we had a gain of $51,166.
The following table summarizes our operating results for the nine months ended July 31, 2026 and 2025:
| Nine months Ended July 31, | ||||||||
| 2026 | 2025 | |||||||
| Product Sales | $ | 1,546,176 | $ | 1,538,601 | ||||
| Product Sales, Related Parties | - | 31,500 | ||||||
| Total Revenue | 1,546,176 | 1,570,101 | ||||||
| Less: Cost of Goods Sold | (365,899 | ) | (297,531 | ) | ||||
| Gross Profit | 1,180,277 | 1,272,570 | ||||||
| Selling, General and Administrative Expenses | (4,146,529 | ) | (4,674,989 | ) | ||||
| Research and Development | (556,155 | ) | (415,524 | ) | ||||
| Impairment Expense | (99,700 | ) | - | |||||
| Interest Expense | (1,120,155 | ) | (1,359,244 | ) | ||||
| Gain on Forgiveness of Debt | 1,358,264 | 343,938 | ||||||
| Loss on Extinguishment of Debt | (8,615,659 | ) | (1,235,000 | ) | ||||
| Unrealized Gain on Derivative/Warrant Liability | 795,727 | 56,263 | ||||||
| Net Loss | $ | (11,203,930 | ) | $ | (6,011,986 | ) | ||
| 35 |
Net Loss
We recorded a net loss of $11,203,930 in the nine months ended July 31, 2026, an increase of $5,191,944 from the nine months ended July 31, 2025 loss of $6,011,986, or 86%. The increased loss in the nine months ended July 31, 2026 was due to a loss on extinguishment of debt that occurred in the nine months ended July 31, 2026 at the conversion of various notes. We expect to continue reporting losses until such time, if ever, we can improve the operation of our subsidiaries and/or commercialize one or more of our product candidates and generate sales sufficient to offset our operating costs and expenses and interest expenses.
Product Sales
Total revenue in the nine months ended July 31, 2026, decreased to $1,546,176, from $1,570,101, or 2%, from the nine months ended July 31, 2025. The decrease is attributable to the factors described below. Our revenue is generated by sales of research products, sales of AlloRx Stem Cells to foreign third-party clinics and medical centers, consulting revenue and sales from our subsidiaries, InfiniVive MD and Fitore.
During the nine months ended July 31, 2026 and 2025, research and development product sales were $287,823 and $355,238, respectively, a decrease in the nine months ended July 31, 2026 of $67,415, or 19%. The decrease was attributable to biopharmaceutical institutions, university research labs and clinics purchasing less CAFs and native fibroblasts in the three months ended July 31, 2026. CAFs and native fibroblasts are used bysuch institutions for stem cell research and the development of advanced immunotherapy of cancer, and our sales to such institutions are generally completed on a purchase order basis and without minimum purchase obligations. As a result, sales volumes in a particular period may fluctuate based on the number of research programs then being pursued by such institutions.
Sales of AlloRx Stem Cells to foreign third-party clinics for the nine months ended July 31, 2026 and 2025 were $937,998 and $1,113,085 respectively, a decrease of $175,087, or 16%. The decrease is attributable to decreased sales volumes, as third-party clinics for which we supply AlloRx Stem Cells treated significantly fewer patients during the three months ended July 31, 2026. We expect AlloRx Stem Cell sales internationally to increase over the next year as these products expand into additional foreign third-party clinics and medical centers and our current foreign third-party clinics and medical center customers increase their total monthly patients.
Sales of InfiniVive products for the nine months ended July 31, 2026 and 2025 were $320,356 and $98,871 respectively, an increase of $221,485, or 224%. The increase is attributable to increased sales efforts for the InfiniVive product line and better acceptance of the products for novel treatments. We expect InfiniVive product sales domestically and internationally to increase over the next year as these products expand into additional foreign and domestic third-party clinics and med spas.
Product Sales – Related Parties
Product sales to related parties are sales to the medical practice of Dr. Zamora, our former Chief Executive Officer. Such sales for the nine months ended July 31, 2026 and 2025, were $0 and $31,500, respectively.
Cost of Goods Sold
Our cost of goods sold during the nine months ended July 31, 2026 totaled $365,899 compared to $297,531 during the nine months ended July 31, 2025, an increase of $68,368, or 23%, resulting in gross profit of $1,180,277 and $1,272,570 for the nine months ended July 31, 2026 and 2025, respectively. The gross profit percentages for the nine months ended July 31, 2026 and 2025 were 76% and 81%, respectively. Cost of goods sold, as a percentage of product sales remained generally consistent for the nine months ended July 31, 2026 and 2025. Cost of goods sold, as a percentage of revenue during the nine months ended July 31, 2026 is consistent with the six months ended April 30, 2026.
| 36 |
Selling, General and Administrative Expenses
SG&A expenses decreased from $4,674,989 in the nine months ended July 31, 2025, to $4,146,529 in the nine months ended July 31, 2026. This decrease of $528,460 or 11% was primarily due to a reduction in consulting and legal fees of approximately $240,000 and stock based compensation of $230,000.
Research and Development
Research and development expenses for the nine months ended July 31, 2026 and 2025 were $556,155 and $415,524, respectively, an increase of $140,631, or 34%, as the Company continues working to identify additional indications for the study of AlloRx Stem Cell therapy and to prepare AlloRx Stem Cell therapy for future Phase 1/2a clinical trials for PTHS and Long COVID which have been authorized by the FDA. In the nine months ended July 31, 2026, the Company primarily continued its efforts to prepare AlloRx Stem Cell therapy and its regenerative aesthetics products through InfiniVive MD for future clinical trials. In the nine months ended July 31, 2026, the Company had more available funds and completed slightly more research during the period.
Impairment Expense
Impairment expense for the nine months ended July 31, 2026, was $99,700. This expense is due to a failed production batch of AlloRx. There was no impairment expense recorded in the nine months ended July 31, 2025.
Interest Expense
Interest expense for the nine months ended July 31, 2026, was $1,120,155, a decrease of $239,089 or 18%, from the interest expense for the nine months ended July 31, 2025, of $1,359,244. This decrease is due to debt discount accretion costs related to the 2025 Senior Secured Notes being converted to Series A-1 Preferred Stock on May 15, 2026.
Gain on Forgiveness of Debt
During the nine months ended July 31, 2026, the Company negotiated a vendor credit of $1,358,264 against open accounts payable. During the nine months ended July 31, 2025, the Company negotiated a settlement of the 2021 Series Convertible Notes Payable, whereby the Company would pay a total of $225,000 over a four month period ending May 1, 2025. The remaining principal balance of $255,000 and all accrued interest totaling $88,938, have been forgiven. The transactions resulted in a gain on forgiveness of debt of $343,938.
Loss on Extinguishment of Debt
During the nine months ended July 31, 2026, all of the 2022, 2023, 2023B and 2025 and four of the five 2024 notes converted to Series A-1 Preferred, with price discounts ranging from 0% to 40% of the offering price of the Series A-1, per their note agreements, creating the loss on extinguishment of debt of $8,615,659. During the nine months ended July 31, 2025, the Company negotiated an extension to the July Series 2024 Target note in return for $245,000 in additional principal and pre-funded warrants valued at $990,000, creating the loss on extinguishment of debt of $1,235,000.
Unrealized Gain on Derivative/Warrant Liability
During the years ended October 31, 2025, 2024 and 2023, we issued 8% Convertible Notes and Senior Secured Notes. In connection with these notes, the Company recognized a Derivative/Warrant liability. For the nine months ended July 31, 2026 and 2025, this liability was marked to market, resulting in an unrealized gain during the nine months ended July 31, 2026 and 2025 of $795,727 and $56,263, respectively.
Liquidity and Capital Resources
Overview
Since our inception, we have incurred significant operating losses. We expect to incur significant expenses and operating losses as we advance the preclinical and clinical development of our programs. We expect that our sales, research and development, and general and administrative costs will increase in connection with conducting additional preclinical studies and clinical trials for our current and future programs and product candidates, expanding our intellectual property portfolio, and providing general and administrative support for our operations. As a result, we will need additional capital to fund our operations for the next twelve months and beyond, which we hope to obtain from additional equity or debt financings, collaborations, licensing arrangements, or other sources.
| 37 |
We currently have no credit facility or other committed sources of capital. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through other third-party funding, collaboration agreements, strategic alliances, licensing arrangements or marketing and distribution arrangements, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our drug development or future commercialization efforts or grant rights to develop and market products or product candidates that we would otherwise prefer to develop and market ourselves.
In order to continue as a going concern, as well as to meet our operational goals, we will need to obtain additional capital in both the short and long term, which we will likely obtain through a variety of means, including through public or private equity, debt financings or other sources, including up-front payments and milestone payments from strategic collaborations. To the extent that we raise additional capital through the sale of convertible debt or equity securities, the ownership interest of our stockholders will be diluted, and the terms may include liquidation or other preferences that adversely affect the rights of our stockholders. Such financing may result in dilution to stockholders, imposition of debt covenants, increased fixed payment obligations or other restrictions that may affect our business. If we raise additional funds through up-front payments or milestone payments pursuant to strategic collaborations with third parties, we may have to relinquish valuable rights to our product candidates, or grant licenses on terms that are not favorable to us. In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans.
Working Capital
As of July 31, 2026, we had working capital of approximately $2.7 million, comprised of current assets of $6.2 million and current liabilities of $3.5 million. The working capital at July 31, 2026 increased approximately $7.5 million, or 155%, from October 31, 2025, our prior fiscal year end. Cash increased from $0.6 million as of October 31, 2025, to $5.7 million at July 31, 2026, an 850% increase.
As a result of our limited working capital position as of July 31, 2026, we continue to rely on cash from outside sources to meet our liquidity requirements. Our need for liquidity and capital in the next 12 months include:
| ● | advancing the clinical development of AlloRx Stem Cell therapy for the treatment of several indications; | |
| ● | pursuing the preclinical and clinical development of other current and future research programs and product candidates; | |
| ● | in-license or acquire the rights to other products, product candidates or technologies; | |
| ● | maintain, expand and protect our intellectual property portfolio; | |
| ● | hire additional personnel in research, manufacturing and regulatory and clinical development as well as management personnel; | |
| ● | seek regulatory approval for any product candidates that successfully complete clinical development; | |
| ● | expand our manufacturing capabilities; | |
| ● | expand our operational, financial and management systems and increase personnel, including personnel to support our operations as a public company; and | |
| ● | pay our other administrative expenses. |
We may endeavor to raise additional capital through the sale of equity or debt in one or more non-public offerings. We do not anticipate commencing any clinical trials of our AlloRx Stem Cell therapy unless and until we receive substantial additional capital, as costs are estimated to be $4 million to $6 million to commence our contemplated Phase 1/2a clinical trials for PTHS and Long COVID, depending on whether we commence one or both trials.
| 38 |
Our working capital needs beyond the next 12 months include ongoing general and administrative expenses and research and development expenses, the latter of which are expected to increase if and when we commence one or more of our planned clinical trials. In addition to our long-term debt obligations, our long-term capital requirements also include the cost of adding additional clean rooms for manufacturing, which is estimated to cost approximately $0.3 to $1.0 million depending on the amount of anticipated production increase, available capital and manufacturing demands at that time.
Because of the numerous risks and uncertainties associated with research, development and commercialization of our product candidates, it is difficult to estimate with certainty the amount of our working capital requirements. Our future funding requirements will depend on many factors, including:
| ● | the progress, costs and results of our clinical trials for our programs for our cell-based therapies; | |
| ● | the progress, costs and results of additional research and preclinical studies in other research programs we initiate in the future; | |
| ● | the costs and timing of process development and manufacturing scale-up activities associated with our product candidates and other programs we advance through preclinical and clinical development; | |
| ● | our ability to establish and maintain strategic collaborations, licensing or other agreements and the financial terms of such agreements; | |
| ● | the extent to which we in-license or acquire rights to other products, product candidates or technologies; and | |
| ● | the costs and timing of preparing, filing and prosecuting patent applications, maintaining and protecting our intellectual property rights and defending against any intellectual property-related claims. |
Cash Flows
The following table summarizes our cash flows for the nine months ended July 31, 2026 and 2025:
| Nine months ended July 31, | ||||||||
| 2026 | 2025 | |||||||
| Net Cash Used in Operating Activities | $ | (3,435,912 | ) | $ | (1,800,031 | ) | ||
| Net Cash Used in Investing Activities | (175,553 | ) | (66,829 | ) | ||||
| Net Cash provided by Financing Activities | 8,744,957 | 1,470,581 | ||||||
| Beginning Cash Balance | 604,183 | 571,360 | ||||||
| Ending Cash Balance | $ | 5,737,675 | $ | 175,081 | ||||
| 39 |
Operating Activities
Net cash used in operating activities during the nine months ended July 31, 2026, was $3,435,912, compared to $1,800,031 during the nine months ended July 31, 2025, representing an increase of $1,635,881, or 91%, due to a significant reduction in accounts payable and accrued liabilities.
Investing Activities
Cash used in investing activities during the nine months ended July 31, 2026, was $175,553 with $163,251 in equipment acquisitions in the nine months ended July 31, 2026 and patent costs of $12,302 during the nine months ended July 31, 2026 compared to $1,310 in equipment acquisitions and 65,519 in patent costs in the nine months ended July 31, 2025, representing an increase in cash used of $108,724, or 163%.
Financing Activities
Cash provided by financing activities during the nine months ended July 31, 2026, was $8,744,957, while cash provided by financing activities during the nine months ended July 31, 2025 was $1,470,581, representing an increase of $7,274,376 or 495%. During the nine months ended July 31, 2026, we issued $8,750,000 in Series A-1 Preferred Stock and made capital lease principal payments of $5,043. During the nine months ended July 31, 2025, we issued $7,093,750 in 2025 Series Senior Secured Convertible Notes for net proceeds of $5,675,000, we paid $4,370,000 to retire the 2024 Senior Secured Convertible Notes, we paid $225,000 on the 2021 Series Convertible Notes and we made capital lease principal payments of $9,419.
Critical Accounting Estimates
Our management’s discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles (GAAP). The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses, and the disclosure of contingent assets and liabilities in our consolidated financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to stock-based awards and Goodwill and Other Intangible Assets. We base our estimates on historical experience, known trends and events, and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Of our policies, we consider the following the most critical to an understanding of our consolidated financial statements as they require the application of the most subjective and complex judgment, involving critical accounting estimates and assumptions impacting our consolidated financial statements. We have applied our policies and critical accounting estimates consistently across our businesses.
Intangibles
Most of our identifiable intangible assets were recognized as part of business combinations we have executed in prior periods. Our identifiable intangible assets are considered definite life intangible assets and are comprised of, trademarks and trade names, customer relationships and patents. Definite life intangible assets are amortized using the straight-line method over their estimated period of useful life.
Our determination of the fair value of the intangible assets acquired involves the use of significant estimates and assumptions. We believe that the fair value assigned to the assets are based on reasonable assumptions and estimates that a market participant would use. Should conditions differ from management’s estimates at the time of the acquisition, including changes in volume or timing to current expectations of future revenue growth rates and forecasted margins, or changes in market factors outside of our control, such as discount rates, material write-downs of intangible assets may be required, which would adversely affect our operating results.
| 40 |
We monitor events and changes in circumstances that could indicate carrying amounts of intangible assets may not be recoverable. We review the carrying amounts of our intangible assets for potential impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Impairment indicators may include any significant changes in the manner of our use of the assets or the strategy of our overall business, certain reorganization initiatives, significant negative industry or economic trends and significant decline in our share price for a sustained period.
When such events or changes in circumstances occur, we compare the carrying amounts of the asset or assets groups with their respective estimated undiscounted future cash flows. If the asset or assets group are determined to be impaired, an impairment charge is recorded in the amount by which the carrying amount of the asset or assets group exceed their fair value.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (this “Report”) contains forward-looking statements that can involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Report, including statements regarding our future results of operations and financial position, business strategy, prospective products, product approvals, research and development costs, future revenue, timing and likelihood of success, plans and objectives of management for future operations, future results of anticipated products and prospects, plans and objectives of management are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would” or the negative of these terms or other similar expressions, although not all forward-looking statements contain these words. Forward-looking statements contained in this Report include, but are not limited to, statements about:
| ● | the ability of our clinical trials to demonstrate safety and efficacy of our product candidates, and other positive results; | |
| ● | the timing of commencement and focus of our ongoing and future preclinical studies and clinical trials, and the reporting of data from those studies and trials; | |
| ● | our expectations with regard to the results of our clinical studies, preclinical studies and research and development programs, including the timing for enrollment and the timing and availability of data from such studies; | |
| ● | the size of the market opportunity for our product candidates, including our estimates of the number of patients who suffer from the diseases we are targeting; | |
| ● | our expectations with regard to the timing of submission of an amended request for orphan drug designation (“ODD”) and the eligibility of Pitt-Hopkins or any other indications to qualify for ODD or any other regulatory incentives; | |
| ● | our expectations with respect to entry into clinical trial agreements and other agreements with contract research organizations (“CROs”), potential collaborators and clinical trial sites for our preclinical studies and clinical trials; | |
| ● | our ability to acquire, discover, develop and advance product candidates into, and successfully complete, clinical trials; | |
| ● | developments and projections relating to our competitors and our industry and the success of competing therapies that are or may become available; | |
| ● | the beneficial characteristics, safety, efficacy and therapeutic effects of our product candidates; | |
| ● | our ability to obtain and maintain regulatory approval of our product candidates; | |
| ● | our plans relating to the further development and commercialization of our product candidates, including additional disease states or indications we may pursue; |
| 41 |
| ● | our expectations regarding future sales of our other products, including MSC-Gro, and future consulting revenues; | |
| ● | our expectations regarding our ability to renew our agreement with European Wellness and to collect amounts believed to be owed to us for work already completed under our JOA with European Wellness, which expired on July 31, 2023; | |
| ● | the potential effects of public health crises, such as the COVID-19 pandemic, on our preclinical and clinical programs and business; | |
| ● | existing regulations and regulatory developments in the United States and other jurisdictions; | |
| ● | our plans and ability to obtain or protect intellectual property rights, including extensions of existing patent terms where available and our ability to avoid infringing the intellectual property rights of others; | |
| ● | our ability to effectively manage our growth, including the need to hire additional personnel and our ability to attract, recruit and retain such personnel, and maintain our culture; | |
| ● | our ability to fund the acquisition of fully automated closed system bioprocessing and other equipment and for the development of a new current Good Manufacturing Practices compliant manufacturing facility we expect to lease; | |
| ● | our estimates regarding expenses, future revenue, capital requirements and needs for additional financing; | |
| ● | our plans and ability to obtain funding for our operations, including funding necessary to develop, manufacture and commercialize our product candidates, and to continue as a going concern; | |
| ● | the performance of our third-party suppliers, CROs and manufacturers; | |
| ● | our financial performance; and | |
| ● | the period over which we estimate our existing cash will be sufficient to fund our future operating expenses and capital expenditure requirements. |
We have based these forward-looking statements largely on our current expectations and projections about our business, the industry in which we operate and financial trends that we believe may affect our business, financial condition, results of operations and prospects, and these forward-looking statements are not guarantees of future performance or development. These forward-looking statements speak only as of the date of this Report and are subject to a number of risks, uncertainties and assumptions described in the section titled “Risk Factors” in our Form 10-K. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events or otherwise.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and you are cautioned not to unduly rely upon these statements.
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.
We are a smaller reporting company, as defined by Rule 12b-2 of the Exchange Act, and are not required to provide the information required under this item.
ITEM 4. Controls and Procedures
Disclosure Controls and Procedures
We maintain a system of controls and procedures designed to ensure that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934, as amended (“Exchange Act”), is recorded, processed, summarized and reported, within time periods specified in the SEC’s rules and forms and to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. As of July 31, 2026, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, management has evaluated the effectiveness of our disclosure controls and procedures. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective due to ineffective internal control over financial reporting.
Changes In Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during the three months ended July 31, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
| 42 |
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings.
From time to time, we may become involved in litigation relating to claims arising out of our operations in the normal course of business. However, to our knowledge, no legal proceedings, government actions, administrative actions, investigations, or claims are currently pending or threatened against us or our officers and directors in which we are adverse. The results of any future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.
ITEM 1A. Risk Factors.
There are many risks inherent in our business. Factors that could materially adversely affect our business, financial condition, operating results or liquidity, and the trading price of our common stock are described under Item 1A, Risk Factors, of the Form 10-K filed with the SEC on February 13, 2026. There have been no material changes regarding risk factors since that date:
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds.
During the nine months ended July 31, 2026, the Company issued the following Series A-1 Preferred Stock:
During the three months ended January 31, 2026, the Company issued 50,000 shares of its Series A-1 Convertible Preferred Stock for proceeds of $1 million as part of an ongoing private placement.
During the three months ended April 30, 2026, the Company issued 5,000 shares of its Series A-1 Convertible Preferred Stock for proceeds of $100,000 as part of an ongoing private placement.
During the three months ended April 30, 2026, the Company issued 39,065 shares of its Series A-1 Convertible Preferred Stock for conversion of $468,750 of 2024 Series Senior Secured Convertible Notes as part of an ongoing private placement.
During the three months ended July 31, 2026, the Company issued 382,500 shares of its Series A-1 Convertible Preferred Stock for proceeds of $7,650,000 as part of an ongoing private placement.
During the three months ended July 31, 2026, the Company issued 11,931 shares of its Series A-1 Convertible Preferred Stock for conversion of $200,000 of 2022 Series Convertible Notes and accrued interest of $38,603.
During the three months ended July 31, 2026, the Company issued 34,238 shares of its Series A-1 Convertible Preferred Stock for conversion of $405,000 of 2023 Series Convertible Notes and accrued interest of $108,527.
During the three months ended July 31, 2026, the Company issued 108,812 shares of its Series A-1 Convertible Preferred Stock for conversion of $1,312,600 of 2023B Series Convertible Notes and accrued interest of $319,557.
During the three months ended July 31, 2026, the Company issued 682,292 shares of its Series A-1 Convertible Preferred Stock for conversion of $8,187,500 of 2025 Series Senior Secured Convertible Notes.
Funds raised will be used to conduct clinical trials on the Company’s products, to fund capital expenditures to increase and improve the Company’s production capacity, to fund marketing activities for its products, and for general and administrative purposes.
ITEM 3. Defaults Upon Senior Securities
None.
ITEM 4. Mine Safety Disclosures
Not applicable.
ITEM 5. Other Information
None.
ITEM 6. Exhibits [ADD EXHIBITS AS NECESSARY FOR 8-Ks]
The following exhibits are filed, furnished or incorporated by reference with this report:
| * | Filed herewith. |
| ** | Furnished herewith. |
| 43 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.
| VITRO BIOPHARMA, INC. | ||
| (Registrant) | ||
| Date: September 18, 2026 | By: | /s/ Christopher Furman |
| Christopher Furman, Chief Executive Officer | ||
| Date: September 18, 2026 | /s/ Thomas W. Ohrt | |
| Thomas W. Ohrt, Chief Financial Officer | ||
| (Principal Financial Officer) | ||
| 44 |