SEC Form 10-Q filed by Zivo Bioscience Inc.

8/14/25 4:21:40 PM ET

$ZIVO

Biotechnology: Pharmaceutical Preparations

Health Care

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zivo_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________.

Commission File Number: 001-40449

Zivo Bioscience, Inc.

(Exact name of registrant as specified in its charter)

Nevada		87-0699977
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2125 Butterfield Road, Suite 100 Troy, MI		48084
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: 248-452-9866

______________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol

Name of each exchange

on which registered

Common Stock, par value $0.001 per share

ZIVO

OTCQB

Warrants to purchase shares of Common Stock, par value $0.001 per share

ZIVOW

OTC ID

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. Yes ☒ No ☐

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). Yes ☒ No ☐

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 the 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	☐
Non-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 ☒

At August 9, 2025, there were 3,817,005 issued and outstanding shares of Common Stock of the registrant.

FORM 10-Q

ZIVO BIOSCIENCE, INC.

INDEX

		Page
PART I - FINANCIAL INFORMATION.

	Item 1. Condensed Financial Statements (Unaudited)	3

	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.	19

	Item 3. Quantitative and Qualitative Disclosures About Market Risk.	26

	Item 4. Controls and Procedures.	26

PART II - OTHER INFORMATION.

	Item 1. Legal Proceedings.	28

	Item 1A. Risk Factors.	28

	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.	28

	Item 3. Defaults upon Senior Securities.	28

	Item 4. Mine Safety Disclosures.	28

	Item 5. Other Information.	28

	Item 6. Exhibits	29

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

ZIVO BIOSCIENCE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	June 30,			December 31,
	2025			2024
ASSETS

CURRENT ASSETS:
Cash	$	9,823		$	1,542,442
Accounts receivable		34,364			2,211
Prepaid expenses		365,707			90,789
Total current assets		409,894			1,635,442
OTHER ASSETS:
Operating lease - right of use asset		285,753			-
Security deposit		7,680			7,680
TOTAL ASSETS	$	703,327		$	1,643,122

CURRENT LIABILITIES:
Accounts payable	$	860,939		$	547,090
Accounts payable – related party		70,056			194,762
Customer deposits		34,364			-
Current portion of long-term operating lease		63,219			-
Convertible debentures payable		138,510			138,164
Loan payable – current portion		292,919			-
Accrued interest		65,628			65,628
Accrued liabilities – employee bonus		1,433,953			1,096,179
Total current liabilities		2,959,588			2,041,823
LONG TERM LIABILITIES:
Lease liabilities		237,523			-
Long-term note payable, net of current portion		46,962			116,197
Total long-term liabilities		284,485			116,197
TOTAL LIABILITIES		3,244,073			2,158,020
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY (DEFICIT):
Common stock, $0.001 par value, 25,000,000 shares authorized as of June 30, 2025 and December 31, 2024; 3,817,005 and 3,621,335 issued and outstanding at June 30, 2025, and December 31, 2024, respectively		3,817			3,621
Additional paid-in capital		140,273,406			136,448,032
Accumulated deficit		(142,817,969	)		(136,966,551	)
Total stockholders’ equity (deficit)		(2,540,746	)		(514,898	)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	703,327		$	1,643,122

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

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ZIVO BIOSCIENCE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	For the Three Months ended June 30, 2025			For the Three Months ended June 30, 2024			For the Six Months ended June 30, 2025			For the Six Months ended June 30, 2024
REVENUES:
Product revenue	$	53,400		$	-		$	53,400		$	35,720
Total revenues		53,400			-			53,400			35,720

COSTS OF GOODS SOLD
Product costs		35,478			-			35,478			23,218
Total cost of goods sold		35,478			-			35,478			23,218

GROSS MARGIN		17,922			-			17,922			12,502

COSTS AND EXPENSES:
General and administrative		1,171,137			5,977,277			2,610,689			6,952,851
Research and development		479,657			2,252,325			3,248,892			2,565,092

Total costs and expenses		1,650,794			8,229,602			5,859,581			9,517,943

LOSS FROM OPERATIONS		(1,632,872	)		(8,229,602	)		(5,841,659	)		(9,505,441	)

OTHER (EXPENSE):
Interest expense		(7,360	)		(6,766	)		(9,759	)		(9,413	)
Amortization of debt discount		-			-			-			-
Total other expense		7,360			6,766			9,759			9,413

NET LOSS	$	(1,640,232	)	$	(8,236,368	)	$	(5,851,418	)	$	(9,514,854	)

BASIC AND DILUTED LOSS PER SHARE	$	(0.43	)	$	(2.78	)	$	(1.55	)	$	(3.31	)
WEIGHTED AVERAGE BASIC AND DILUTED SHARES OUTSTANDING		3,810,065			2,961,606			3,780,238			2,875,631

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

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ZIVO BIOSCIENCE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’

EQUITY (DEFICIT)

FOR THE THREE MONTHS ENDED JUNE 30, 2025 AND JUNE 30, 2024

(UNAUDITED)

					Additional Paid in		Accumulated
	Shares		Amount		Capital		Deficit			Total
Balance, March 31, 2024		2,789,655	$	2,790	$	122,588,510	$	(124,860,200	)	$	(2,268,900	)
Employee and director equity-based compensation		445,490		445		7,549,210		-			7,549,655
Private sales of common stock – related party		83,887		84		659,915		-			659,999
Net loss for the three months ended June 30, 2024		-		-		-		(8,236,368	)		(8,236,368	)
Balance, June 30, 2024		3,319,032	$	3,319	$	130,797,635	$	(133,096,568	)	$	(2,295,614	)

					Additional Paid in		Accumulated
	Shares		Amount		Capital		Deficit			Total
Balance, March 31, 2025		3,791,093	$	3,791	$	139,556,669	$	(141,177,737	)	$	(1,617,277	)
Employee and director equity-based compensation		-		-		336,743		-			336,743
Exchange agreements		15,280		15		230,005		-			230,020
Private sales of stock		7,144		7		99,993		-			100,000
Private sales of stock – related party		3,488		4		49,996		-			50,000
Net loss for the three months ended June 30, 2025		-		-		-		(1,640,232	)		(1,640,232	)
Balance, June 30, 2025		3,817,005	$	3,817	$	140,273,406	$	(142,817,969	)	$	(2,540,746	)

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

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ZIVO BIOSCIENCE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’

EQUITY (DEFICIT)

FOR THE SIX MONTHS ENDED JUNE 30, 2025 AND JUNE 30, 2024

(UNAUDITED)

					Additional Paid in		Accumulated
	Shares		Amount		Capital		Deficit			Total
Balance, December 31, 2023		2,382,356	$	2,382	$	121,373,488	$	(123,581,714	)	$	(2,205,844	)
Employee and director equity-based compensation		445,490		445		7,661,314		-			7,661,759
Private sales of common stock		350,633		351		972,193		-			972,544
Private sales of common stock – related party		140,553		141		790,640		-			790,781
Net loss for the six months ended June 30, 2024		-		-		-		(9,514,854	)		(9,514,854	)
Balance, June 30, 2024		3,319,032	$	3,319	$	130,797,635	$	(133,096,568	)	$	(2,295,614	)

					Additional Paid in		Accumulated
	Shares		Amount		Capital		Deficit			Total
Balance, December 31, 2024		3,621,335	$	3,621	$	136,448,032	$	(136,966,551	)	$	(514,898	)
Employee and director equity-based compensation		38,378		38		937,250		-			937,288
Exchange agreements		99,340		99		1,875,710		-			1,875,809
Exchange agreement – related party		47,320		48		862,425		-			862,473
Private sales of stock		7,144		7		99,993		-			100,000
Private sales of stock – related party		3,488		4		49,996		-			50,000
Net loss for the six months ended June 30, 2025		-		-		-		(5,851,418	)		(5,851,418	)
Balance, June 30, 2025		3,817,005	$	3,817	$	140,273,406	$	(142,817,969	)	$	(2,540,746	)

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

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ZIVO BIOSCIENCE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(UNAUDITED)

	For the Six Months Ended June 30, 2025			For the Six Months Ended June 30, 2024
Cash Flows for Operating Activities:
Net loss	$	(5,851,418	)	$	(9,514,854	)
Adjustments to reconcile net loss to net cash used by operating activities:
Non-cash lease expense		(14,828	)		49,877
Employee and director equity-based compensation		937,288			7,661,759
Other expenses related to extinguishment of colicense agreements		2,738,282			-
Changes in assets and liabilities:
Prepaid expenses		(274,918	)		(345,399	)
Customer deposits		34,364			15,000
Accounts receivable		(32,153	)		3,735
Accounts payable		313,849			100,379
Accounts payable – related party		(124,706	)		(93,265	)
Lease liabilities		29,818			(55,422	)
Accrued liabilities		337,774			(144,582	)
Net cash (used in) operating activities		(1,906,648	)		(2,322,772	)

Cash Flows from Investing Activities:
Net cash from by investing activities		-			-

Cash Flow from Financing Activities:
Proceeds of loans payable, other		488,198			517,560
Payments of loans payable, other		(195,279	)		(230,027	)
Payment of term debt		(68,890	)		-
Proceeds from private sales of common stock - other		100,000			972,544
Proceeds from private sales of common stock – related party		50,000			790,781
Net cash provided by financing activities		374,029			2,050,858

Increase (decrease) in cash		(1,532,619	)		(271,914	)
Cash at beginning of period		1,542,442			274,380
Cash at end of period	$	9,823		$	2,466

Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	$	8,242		$	8,223
Income Taxes	$	-		$	-

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

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ZIVO BIOSCIENCE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)

Supplemental Disclosure of Non-Cash Investing and Financing Activities:

Six Months Ended June 30, 2025:

During the six months ended June 30, 2025, the Company entered into seventeen Exchange Agreements which resulted in the issuance of 146,660 shares of common stock to various investors, including 47,320 shares of common stock to related parties. See NOTE 4 - DEFERRED R&D OBLIGATIONS - PARTICIPATION AGREEMENTS.

The Company also exchanged $194,762 of accounts payable to related parties into 32,996 shares of common stock, see NOTE 5 – STOCKHOLDERS’ EQUITY – Equity Compensation – Directors’ Stock Awards.

Additionally, in January 2025, the Company entered into a lease for a laboratory and office facility located in Fort Myers, Florida. The lease is for 36 months in length and has an option to renew. The Company also entered into a separate lease for office space in Troy, Michigan. The office lease is for 63 months in length and has an option to renew. We have accounted for these two leases pursuant to ASC 842 and have recorded total operating lease assets in the amount of $315,571, and lease liabilities of $315,571, at each lease commencement, see NOTE 2 – LEASES.

Six Months Ended June 30, 2024:

During the six months ended June 30, 2024, the Company exchanged $172,670 in accounts payable to related parties for 261,619 shares of common stock (see NOTE 5 - STOCKHOLDERS’ EQUITY (DEFICIT) – Equity Compensation – Restricted Stock Awards – Stock Award in Lieu of Unpaid Directors’ Fees). In addition, the Company exchanged options to buy 50,251 shares of common stock for an accrued bonus payable of $400,000 to the Company’s CEO (see NOTE 5 - STOCKHOLDERS’ EQUITY (DEFICIT) – Equity Compensation – Common Stock Options – CEO 2024 Equity Award).

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ZIVO BIOSCIENCE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1 - BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements include the accounts of Zivo Bioscience, Inc. and its wholly owned subsidiaries (collectively, “we,” “our,” “us,” “ZIVO,” or the “Company”). All significant intercompany accounts and transactions have been eliminated in consolidation. In the opinion of the Company’s management, the financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the information set forth therein. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The condensed consolidated financial statements have also been prepared on a basis substantially consistent with, and should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2024 and the notes thereto, included in its Annual Report on Form 10-K that was filed with the Securities and Exchange Commission on March 18, 2025.

Going Concern

The Company has incurred net losses since inception, experienced negative cash flows from operations for the quarter ended June 30, 2025, and has an accumulated deficit of $142,817,969. The Company has historically financed its operations primarily through the issuance of common stock, warrants, and debt.

The Company expects to continue to incur operating losses and net cash outflows until such time as it generates a level of revenue to support its cost structure. There is no assurance that the Company will achieve profitable operations, and, if achieved, whether it will be sustained on a continued basis. The Company intends to fund ongoing activities by utilizing its current cash on hand and by raising additional capital through equity and/or debt financings. There can be no assurance that the Company will be successful in raising that additional capital or that such capital, if available, will be on terms that are acceptable to the Company. If the Company is unable to raise sufficient additional capital, the Company may be compelled to reduce the scope of its operations and planned capital expenditures.

These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the financial statements are issued. The Company’s condensed consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets and satisfaction of liabilities in the ordinary course of business; no adjustments have been made relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company not continue as a going concern.

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NOTE 2 - LEASES

On September 13, 2024, the Company entered into a 63-month lease agreement for office space in Troy, Michigan. On January 6, 2025, the Company moved its headquarters to this location. The lease agreement commenced on January 1, 2025, and ends on March 31, 2030. The lease agreement provided for a total rent of $298,135 over the period. Occupancy of the property commenced on January 1, 2025. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. The parties negotiated a three-month rent holiday from January 1, 2025, through March 31, 2025. Rent is $4,681 per month from April 1, 2025, to March 31, 2026, $4,820 from April 1, 2026, to March 31, 2027, $4,964 from April 1, 2027, to March 31, 2028, $5,113 from April 1, 2028, to March 31, 2029, and $5,267 from April 1, 2029, to March 31, 2030.

On January 21, 2025, the Company entered into a 36-month lease agreement for a facility that contains office, warehouse, lab and R&D space in Ft. Myers, Florida. The lease agreement commenced on January 1, 2025, and ends on December 31, 2027. The lease agreement provided for a total rent of $111,817 over the period. Occupancy of the property commenced on January 1, 2025. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. Rent is $3,000 per month from January 1, 2025, to December 31, 2025, $3,105 from January 1, 2026, to December 31, 2026, and $3,213 from January 1, 2027, to December 31, 2027. The Company has the option to extend the lease for one three-year period during which the monthly lease rate will increase at a rate of 3.5% per year.

The balances for our operating lease where we are the lessee are presented as follows within our condensed consolidated balance sheets:

Operating leases:

	As of
Assets:	June 30, 2025		December 31, 2024
Operating lease right-of-use assets	$	285,753	$	-

Liabilities:
Current portion of long-term operating leases	$	63,219	$	-
Long-term operating leases, net of current portion		237,523		-
Total operating lease liabilities	$	300,742	$	-

The components of lease expense are as follows within our condensed consolidated statements of operations:

For the Three Months Ended

For the Six Months Ended

June 30,

2025

June 30,

2024

June 30,

2025

June 30,

2024

Operating lease expense

23,515

27,235

47,030

54,471

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Other information related to leases where we are the lessee is as follows:

	As of
	June 30, 2025			December 31, 2024
Weighted-average remaining lease term:
Operating leases	4.08 Years			0.0 Years

Discount rate:
Operating leases		11.00	%		11.00	%

Supplemental cash flow information related to leases where we are the lessee is as follows:

	For the		For the
	Six Months Ended		Six Months Ended
	June 30, 2025		June 30, 2024
Cash paid for amounts included in the measurement of lease liabilities	$	32,040	$	60,015
Non-cash investment in ROU asset	$	315,571	$	-

As of June 30, 2025, the maturities of our operating lease liabilities are as follows:

Year Ended:	Operating Lease
December 31, 2025	$	46,082
December 31, 2026		94,676
December 31, 2027		97,695
December 31, 2028		60,910
December 31, 2029		62,747
December 31, 2030		15,802
Total minimum lease payments		377,912
Less: Interest		(77,170	)
Present value of lease obligations		300,742
Less: Current portion		(63,219	)
Long-term portion of lease obligations	$	237,523

NOTE 3 - DEBT

On March 5, 2025, the Company entered into a short-term unsecured loan agreement to finance a portion of the Company’s directors’ and officers’, and employment practices liability insurance premiums. The note in the amount of $488,198 carries an 7.85% annual percentage rate and will be paid down in ten equal monthly payments of $50,593 beginning on March 10, 2025. As of June 30, 2025, the principal balance of $292,919 remained outstanding.

On March 5, 2024, the Company entered into a short-term unsecured loan agreement to finance a portion of the Company’s directors’ and officers’, and employment practices liability insurance premiums. The note in the amount of $517,560 carries an 8.5% annual percentage rate and will be paid down in nine equal monthly payments of $59,562 beginning on March 10, 2024. As of November 9, 2024, the loan was fully paid.

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NOTE 4 - DEFERRED R&D OBLIGATIONS - PARTICIPATION AGREEMENTS

During 2020 and 2021 the Company entered into twenty-one (21) License Co-Development Participation Agreements (the “Participation Agreements”) with certain investors (“Participants”) for aggregate proceeds of $2,985,000. The Participation Agreements provide for the issuance of warrants to such Participants and allows the Participants to participate in the fees (the “Fees”) from licensing or selling bioactive ingredients or molecules derived from ZIVO’s algae cultures. Specifically, ZIVO has agreed to provide to the Participants an aggregate 44.78% “Revenue Share” of all license fees generated by ZIVO from any licensee.

According to the terms of the Agreements, and pursuant to ASC 730-20-25 the Company had bifurcated the proceeds of $2,985,000 as follows: 1) the 17,712 warrants sold were attributed a value of $953,897 based on the Black Scholes pricing model using the following assumptions: volatilities ranging from 129.13% to 154.26%; annual rate of dividends 0%; discount rates ranging from 0.26% to 0.87%, and recorded as Additional Paid In Capital; 2) the remaining $2,031,103 was recorded as Deferred R&D Obligation - Participation Agreements. Since the Company believes there was an obligation to perform pursuant to ASC 730-20-25, the Deferred R&D Obligation was amortized ratably based on expenses incurred as the Company developed the technology for bioactive ingredients or molecules (including its TLR4 Inhibitor molecule) derived from the Company’s algae cultures. As of December 31, 2023, the R&D obligation had been fully amortized, and no balance remains.

The Participation Agreements allow the Company the option to buy back the right, title and interest in the Revenue Share for an amount equal to the amount funded plus a Buy-back premium and a minimum payment threshold, as applicable. Once this minimum threshold is met, the Company may exercise its option by delivering written notice to a Participant of its intent to exercise the option, along with repayment terms of the amount funded, which may be paid, in the Company’s sole discretion, in one lump sum or in four (4) equal quarterly payments. If the Company does not make such quarterly payments timely for any quarter, then the Company shall pay the prorated Revenue Share amount, retroactive on the entire remaining balance owed, that would have been earned during such quarter until the default payments have been made and the payment schedule is no longer in default.

Exchange Agreements

From January 9, 2025, through April 16, 2025, the Company has entered into a series of seventeen Exchange Agreements (“Exchange Agreements”) with Participants to the Participation Agreements. Under the Participation Agreements, the Company had a buy-out option pursuant to which it could purchase the Investors’ right, title and interest in the revenue share for an aggregate minimum purchase price of $5,306,500. The Company’s board of directors approved Exchange Agreements that would provide for the cancellation of the Purchase Agreements and accompanying forfeiture of each Investor’s right to earn certain cash from the revenue share and buy-out option in exchange for the Company’s common stock. The Investors would retain the warrants that were originally issued with the Participation Agreements. Through June 30, 2025, the Company has completed exchanges with Participants for seventeen Exchange Agreements for a total issuance of 146,660 new shares of Common Stock of the Company in exchange for the future rights to $3,666,500 of the aggregate minimum purchase price as calculated from the original Participation Agreements. Four of the Exchange Agreements were consummated with Related Parties resulting in the issuance of 47,320 new shares of Common Stock.

The Company valued the rights acquired under the Exchange Agreements on the date of the transaction as the number of shares times the closing stock price on the transaction day. The total value recognized by the Company for the seventeen (17) Exchange Agreements in the six months ending June 30, 2025, was $2,738,282. The four Exchange Agreements signed with Related Parties were recognized by the Company for a value of $862,473. The Company expensed the value of the stock exchanged immediately as the Exchange Agreements were executed. The expense was recorded within research and development in the condensed consolidated statements of operations.

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See below a summary of the remaining Participation Agreements as of June 30, 2025, none of the holders of the remaining Participation Agreements are related parties.

															Buy-back			Buy-back
													Minimum		Premium %			Premium %
Agreement		Date of	Amount					Exercise		Revenue			Payment		pre-18			post 18
#		Funding	Funded		Warrants		Term	Price		Share			Threshold		mos.			mos.
	2	April 13, 2020		150,000		937	5 Years		57.60		2.250	%		-		40	%		40	%
	3	April 13, 2020		150,000		937	5 Years		57.60		2.250	%		-		40	%		40	%
	4	May 7, 2020		250,000		1,562	5 Years		57.60		3.750	%		-		40	%		40	%
	12	Sept.25, 2020		300,000		937	5 Years		57.60		4.500	%		420,000		40	%		50	%
			$	850,000		4,373					12.750	%	$	420,000

NOTE 5 - STOCKHOLDERS’ EQUITY (DEFICIT)

Equity Sales

During the three months ended June 30, 2025, the Company sold common stock in two private unregistered transactions to investors resulting in total proceeds of $150,000 and the issuance of 10,632 shares of common stock. One of these transactions was to a related party for proceeds of $50,000 and the issuance of 3,488 shares of common stock. During the three months ended June 30, 2024, the Company sold common stock in nine private unregistered transactions to related parties resulting in total proceeds of $659,999 and the issuance of 83,887 shares of common stock.

During the six months ended June 30, 2025, the Company sold common stock in 2 private unregistered transactions to investors resulting in total proceeds of $150,000 and the issuance of 10,632 shares of common stock. One of these transactions was to a related party for proceeds of $50,000 and the issuance of 3,488 shares of common stock. During the six months ended June 30, 2024, the Company sold common stock in 29 private unregistered transactions to investors resulting in total proceeds of $1,763,325 and the issuance of 491,186 shares of common stock. Included in the totals are 140,553 shares of common stock sold to related parties for proceeds of $790,781.

Warrants

In the three months and six months ended June 30, 2025 the Company issued warrants to acquire 1,062 shares of the Company’s common stock. These warrants were tied to direct placements of common stock under a board approved private fund raising program. Of the total, warrants for 348 shares were issued to a Related Party.

In the three months and six months ended June 30, 2024 the Company issued 698 warrants to a Related Party investor under a board approved private fund raising program.

Equity Compensation

For the three months ended June 30, 2025, the Company made no new equity awards for either Board Members or employees. For the three months ended June 30, 2025, the Company expensed $336,743 for equity compensation to members of the Board of Directors and certain employees related to awards made to certain employees and the non-employee directors in the prior periods. $19,424 of the total expense for the quarter was related to research and development (R&D) and the remaining $317,319 was for general and administrative expenses (G&A).

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For the three months ended June 30, 2024, the Company recognized expense of $7,549,655 for equity compensation to members of the Board of Directors and certain employees for restricted stock awards and option grants. The total expense amount was related to new equity grants in the period plus equity awards from prior periods. $2,025,580 of the total expense for the quarter was related to R&D and the remaining $5,524,075 was for G&A.

For the six months ended June 30, 2025, the Company expensed $937,288 for equity compensation to members of the Board of Directors and certain employees. The total expense included amounts related to awards made to certain employees and the non-employee directors in the prior periods, and amounts related to new awards made to the non-employee directors in the period. $59,992 of the total expense for the quarter was related to R&D and the remaining $877,296 was for G&A.

For the six months ended June 30, 2024, the Company expensed $7,661,759 for equity compensation to members of the Board of Directors and certain employees for restricted stock awards and option grants. The total expense amount was related to new equity grants in the period plus equity awards from prior periods. $2,060,228 of the total expense for the quarter was related to R&D and the remaining $5,601,531 was for G&A.

Directors’ Stock Awards

On January 1, 2025 the Compensation Committee of the Board of Directors awarded 38,378 RSA shares to the four non-employee members of the Boards in three separate actions.

From January 1, 2024 through June 10, 2024 the Company accrued payments to the non-employee board members pursuant to the Non-Employee Directors Compensation Policy in place at the time. The total amount accrued for that time period was $69,827. The Compensation Committee agreed the non-employee members of the board would forgo the accrued cash payment in lieu of RSA shares. The Compensation Committee determined the fair exchange price would be $16.74 per share resulting in the Company issuing an aggregate of 4,170 shares in exchange for the $69,827 of accrued cash. The restricted shares have been issued to the non-employee board members and will vest in full on March 31, 2025.

Additionally, from June 11, 2024 through December 31, 2024 the Company accrued payments to the non-employee board members in total of $124,934 for board service. The Compensation Committee agreed the non-employee members of the board would forgo the accrued cash payment in lieu of RSA shares. The Compensation Committee also considered the Company’s cash position going forward and awarded the non-employee board members RSA shares for the remainder of the members’ service through the Company’s next annual meeting of shareholders in lieu of cash payments. This future amount would have been $104,819. The Compensation Committee determined the fair exchange price would be $7.97 per share resulting in the Company issuing an aggregate of 28,826 shares in exchange for the $229,753 of accrued and future cash payments. The restricted shares have been issued to the non-employee board members and will vest in full on June 10, 2025.

The Compensation Committee awarded Laith Yaldoo 5,382 RSA shares for his pro-rata share of the annual RSA award based on his appointment to the Board of Directors on July 12, 2024. The restricted shares have been issued to Mr. Yaldoo, 2,691 shares vested immediately on the date of the award, 1,345 shares vested on March 11, 2025, and 1,346 shares will vest on the day prior to the 2025 annual stockholder meeting.

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Common Stock Restricted Stock Awards (RSA)

The total RSA expense recorded in the three and six months ended June 30, 2025 and 2024 are as follows:

For the Three Months Ended

For the Six Months Ended

June 30,

2025

June 30,

2024

June 30,

2025

June 30,

2024

Restricted stock unit expense

294,966

2,174,581

636,227

2,174,581

The 2025 and 2024 RSA activity is as follows:

	June 30, 2025					June 30, 2024
	Shares			Weighted Average Grant Date Fair Value Per Share		Shares			Weighted Average Grant Date Fair Value Per Share
Non-vested, beginning of period		140,221		$	7.96		-		$	-
Granted		38,378			21.50		445,490			7.96
Vested		(178,599	)		10.87		(295,861	)		7.96
Non-vested as of end of the period		-		$	-		149,629		$	7.96

As of June 30, 2025, there was no remaining unrecognized compensation expense related to RSAs. As of June 30, 2024, there was $1,055,454 of unrecognized compensation expense related to RSAs.

The total fair value of RSAs vested during the six months ended June 30, 2025 was $3,483,379, and during the six months ended June 30, 2024 was $2,355,054. The fair value was determined based on the number of shares vesting and the closing price of shares of our common stock on the dates the awards vested.

Common Stock Warrants - Unregistered

A summary of the status of the Company’s unregistered warrants is presented below:

	June 30, 2025					June 30, 2024
	Number of Warrants			Weighted Average Exercise Price		Number of Warrants			Weighted Average Exercise Price

Outstanding, beginning of year		675,745		$	20.16		671,448		$	21.59
Issued		1,062			14.11		698			7.87
Exercised		-			-		-			-
Cancelled		-			-		-			-
Expired		(7,185	)		55.51		(10,624	)		48.00
Outstanding, end of period		669,622		$	19.77		661,522		$	21.15

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Unregistered warrants outstanding and exercisable by price range as of June 30, 2025, were as follows:

Outstanding Warrants						Exercisable Warrants
Range of		Number		Average Weighted Remaining Contractual Life in Years		Exercise Price		Number		Weighted Average Exercise Price

$	6.00-11.99		17,832		4.12	$	6.00-11.99		17,832		8.24
	12.00-17.99		571,030		1.46		12.00-17.99		571,030		16.86
	18.00-23.99		7,500		4.50		18.00-23.99		7,500		20.19
	30.00-35.99		36,800		0.92		30.00-35.99		36,800		33.00
	48.00-53.99		1,041		0.43		48.00-53.99		1,041		48.00
	54.00-59.99		34,482		0.24		54.00-59.99		34,482		57.60
	60.00-65.99		281		0.87		60.00-65.99		281		62.40
	66.00-71.99		656		0.57		66.00-71.99		656		67.20
			669,622		1.47				669,622	$	19.77

Common Stock Warrants - Registered

A summary of the status of the Company’s registered warrants is presented below:

	June 30, 2025				June 30, 2024
	Number of Registered Warrants		Weighted Average Exercise Price		Number of Registered Warrants		Weighted Average Exercise Price
Outstanding, beginning of year		495,917	$	33.00		495,917	$	33.00
Issued		-		-		-		-
Exercised		-		-		-		-
Cancelled		-		-		-		-
Expired		-		-		-		-
Outstanding, end of period		495,917	$	33.00		495,917	$	33.00

Registered warrants outstanding and exercisable by price range as of June 30, 2025, were as follows:

Outstanding Registered Warrants						Exercisable Registered Warrants
Exercise Price		Number		Average Weighted Remaining Contractual Life in Years		Exercise Price		Number		Weighted Average Exercise Price

$	33.00		495,917		0.92	$	33.00		495,917		33.00

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NOTE 6 - COMMITMENTS AND CONTINGENCIES

Employment Agreements

At June 30, 2025, the Company had compensation agreements with its President / Chief Executive Officer, and Chief Financial Officer.

Legal Contingencies

The Company may become a party to litigation in the normal course of business. In the opinion of management, there are no pending legal matters involving the Company that would have a material adverse effect upon the Company’s financial condition, results of operation or cash flows.

NOTE 7 - SEGMENT REPORTING

The Company manages the business activities on a consolidated basis and operates in one reportable segment. The Company’s reportable segment is microalgae technology. The segment is research and development operating in both the therapeutic and nutritional sectors, with an intellectual property portfolio comprised of proprietary algal and bacterial strains, biologically active molecules and complexes, production techniques, cultivation techniques and patented or patent-pending inventions for applications in human and animal health. As the Company has one reportable segment, sales, cost of sales, research and development, and general and administrative expenses are equal to consolidated results.

Financial results for the Company’s reportable segment have been prepared using a management approach, which is consistent with the basis and manner in which financial information is evaluated by the Company’s Chief Operating Decision Maker (“CODM”) in allocating resources and in assessing performance. The Company’s CODM is the Chief Executive Officer. The measurement of segment profit or loss that the CODM uses to evaluate the performance of the Company’s segment is net income attributable to Zivo Bioscience, Inc. Financial budgets and actual results used by the CODM to assess performance and allocate resources, as well as strategic decisions related to headcount and other expenditures are reviewed on a consolidated basis. The CODM considers the impact of the significant segment expenses in the table below on net income when deciding where and when to make expenditures. The measure of segment assets is reported on the consolidated balance sheets as total assets. The Company did not recognize any depreciation or amortization expense for the quarters ended June 30, 2025 and 2024.

	For the Three Months ended June 30, 2025			For the Three Months ended June 30, 2024			For the Six Months ended June 30, 2025			For the Six Months ended June 30, 2024
Total revenues		53,400			-			53,400			35,720
Total cost of goods sold		(35,478	)		-			(35,478	)		(23,218	)
General and administrative		(1,171,137	)		(5,977,277	)		(2,610,689	)		(6,952,851	)
Research and development		(479,657	)		(2,252,325	)		(3,248,892	)		(2,565,092	)
Interest expense		(7,360	)		(6,766	)		(9,759	)		(9,413	)
NET LOSS	$	(1,640,232	)	$	(8,236,368	)	$	(5,851,418	)	$	(9,514,854	)

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NOTE 8 - INCOME TAX

The Company and its subsidiaries are subject to US federal and state income taxes. Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, in the opinion of Management, it is more likely than not that some portion, or all, of the deferred tax asset will not be realized. The Company does not expect to realize the net deferred tax asset and as such has recorded a full valuation allowance.

Income tax expense for the three months and six months ended June 30, 2025 and 2024 is based on the estimated annual effective tax rate. Based on the Company’s effective tax rate and full valuation allocation, tax expense is expected to be $0 for 2025.

NOTE 9 - SUBSEQUENT EVENTS

Entry into a convertible loan agreement

On July 4, 2025, the Company’s Board of Directors approved by unanimous consent an unsecured convertible loan program for up to $2 million of borrowings from investors. Subsequently, on July 8, 2025, the Company entered into a Convertible Loan Agreement with an investor under this convertible loan program. The investor loaned the Company $250,000 at an interest rate of 10% and a term of 24 months. Interest on the loan accrues and is due along with the principal at the end of the term. In addition, the Company issued a warrant to the investor which allows the investor to purchase 1,793 shares of the Company’s common stock at a fixed price of $13.94 per share, the market price on the day of the loan agreement.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Some of the statements contained in this report are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements involve known and unknown risks, uncertainties and other factors which may cause our or our industry’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements include, but are not limited to statements regarding:

·	our ability to continue as a going concern and our history of losses;
·	our ability to obtain additional financing;
·	our relatively new business model and lack of revenues;
·	our ability to prosecute, maintain or enforce our intellectual property rights;
·	disputes or other developments relating to proprietary rights and claims of infringement;
·	the accuracy of our estimates regarding expenses, future revenues and capital requirements;
·	the implementation of our business model and strategic plans for our business and technology;
·	the successful development of our production capabilities;
·	the successful development of our sales and marketing capabilities;
·	the potential markets for our products and our ability to serve those markets;
·	the rate and degree of market acceptance of our products and any future products;
·	our ability to retain key management personnel;
·	regulatory developments and our compliance with applicable laws;
·	our liquidity; and
·	other factors described in the “Risk Factors” section of our Quarterly Reports on Form 10-Q and Annual Report on Form 10-K.

In some cases, you can identify forward-looking statements by terms such as “may”, “will”, “should”, “could”, “would”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “projects”, “predicts”, “potential”, “likely” and similar expressions intended to identify forward-looking statements. These statements are only predictions and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by such forward-looking statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, these forward-looking statements represent our estimates and assumptions only as of the date of this report. Except as otherwise required by law, we expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained in this report to reflect any change in our expectations or any change in events, conditions or circumstances on which any of our forward-looking statements are based. We qualify all of our forward-looking statements by these cautionary statements.

You should refer to the section entitled “Risk Factors” of the Company’s Annual Report on Form 10-K for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements will prove to be accurate. No forward-looking statement is a guarantee of future performance.

Overview:

We are a research and development company operating in both the biotech and agtech sectors, with an intellectual property portfolio comprised of proprietary algal and bacterial strains, biologically active molecules and complexes, production techniques, cultivation techniques and patented or patent-pending inventions for applications in human and animal health.

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Biotech - ZIVO Product Candidates

ZIVO is developing bioactive compounds derived from its proprietary algal culture, targeting human and animal diseases, such as poultry coccidiosis, bovine mastitis, human cholesterol, and canine osteoarthritis. As part of its therapeutic strategy, ZIVO will continue to seek strategic partners for late stage development, regulatory preparation and commercialization of its products in key global markets.

Review of isolated active materials derived from our proprietary algal culture and their potential treatment applications led us to identify a product candidate for treating coccidiosis in broiler chickens as the best option for most rapidly generating significant revenue because coccidiosis is a global poultry industry issue, and because the clinical testing cycle for chickens is shorter than for other species. Most of the global animal health companies have products for the coccidiosis market; however, they are mostly antibiotic- or ionophore-based with essentially no new technology having been introduced in the last 60 years.

Agtech - ZIVO’s Algal Biomass

ZIVO’s algal biomass is currently produced in Peru. ZIVO’s algal biomass contains Vitamin A, protein, iron, important fatty acids, non-starch polysaccharides and other micronutrients that position the product as a viable functional food ingredient and nutritional enhancement for human and animal use and as a viable functional ingredient for skin care products.

Through our direction and technology, a site in Peru has been successful in consistently producing our proprietary algae. Our team has been working toward building commercial-scale algae ponds using a ZIVO proprietary design, and we are in the middle of a project to grow our algae in a penultimate scale pond. Once we are successful at this scale, we plan to invest in full commercial-scale ponds and product processing equipment.

The Company currently has contracts for the sale and production of its algal biomass. ZIVO has engaged an independent distributor, ZWorldwide, Inc., who has begun to sell the product, branded Zivolife^®, with an initial focus on the North American green powder food market with the product being grown in Peru.

Additional Indications

Pending additional funding, ZIVO may also pursue the following indications:

Biotech:

	o	Avian Influenza: A recent proof of concept study indicated that active materials derived from ZIVO's algal culture showed positive effects in chickens challenged with a low pathogenicity strain of the avian influenza virus.

	o	Bovine Mastitis: ZIVO intends to continue development of a treatment for bovine mastitis based on previous successful proof of concept studies using active materials derived from its proprietary algal culture.

	o	Canine Joint Health: Studies have indicated a chondroprotective effect when a compound fraction from Zivo's algal culture was introduced into ex vivo canine joint tissues.

	o	Human Immune Modulation: Early in vitro studies involving human immune cells and in vivo studies performed in non-clinical species have indicated that one of the isolated and characterized biologically active molecules in the Company's portfolio may serve as an immune modulator with potential application in multiple disease situations.

Agtech:

	o	Companion Animal Food Ingredient: The self-affirmed GRAS process was completed for ZIVO algal biomass in late 2018 and updated in early 2023 to validate its suitability for human consumption as an ingredient in foods and beverages. We plan to leverage this work into viable food and nutritional supplements for companion animals.

	o	Skin Health: ZIVO is developing its algal biomass as a skin health ingredient, the Company has engaged in some limited topical skin product testing started in the third quarter of 2020, and we plan to perform clinical efficacy claim studies planned for ingestible and topical products.

	o	NDI (New Dietary Ingredient): The algal biomass may also be sold as a dietary supplement or dietary ingredient in a dietary supplement, in which case it needs to notify the FDA prior to sales. The notification package includes studies and reports that support its record of safe human consumption, its safe manufacture, and marketing claims. ZIVO's GRAS study and cGMP audit record with Alimenta Algae may be leveraged for this work.

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Results of Operations for the three months ended June 30, 2025 and 2024

The following table summarizes ZIVO’s operating results for the periods indicated:

	Quarter ended June 30,
	2025			2024
Total revenue:	$	53,400		$	-
Total cost of goods sold		35,478			-
Gross margin		17,922			-
Costs and expenses:
Research and development		479,657			2,252,325
General and administrative		1,171,137			5,977,277
Total costs and expenses		1,650,794			8,229,602
Loss from operations		(1,632,872	)		(8,229,602	)
Other (expense):
Total other expense		(7,360	)		(6,766	)
Net loss	$	(1,640,232	)	$	(8,236,368	)

Revenue

During the three months ended June 30, 2025, the Company recorded commercial revenue of $53,400 relating to sales of the Company’s dried algal biomass product as a human food or food ingredient. This is a $53,400 increase from the same period last year. The increase is the result of no product volume sold in the three months ended June 30, 2024.

Costs of Goods Sold

Cost of goods sold for the quarter ended June 30, 2024 was $35,478. This is $35,478 higher than the same period last year, fully attributable to product volume as no product was shipped in this the three months ending June 30, 2024.

General and Administrative Expenses

General and administrative expenses were approximately $1.2 million for the three months ended June 30, 2025, as compared to approximately $6.0 million for the comparable prior year period. The decrease of approximately $4.8 million in general and administrative expense versus the same period in 2024 is due to a decrease in labor related expenses of approximately $3.0 million, a decrease in professional services of $1.8 million, other overhead costs remained mostly unchanged. The $3.0 million decrease in labor related costs is explained by a $3.4 million decrease in non-cash equity related compensation awarded by the Board of Directors to certain Company employees; which was partially offset by a $400,000 increase in bonus expense due a 2024 agreement between the Board and the CEO to exchange an unpaid cash bonus for common stock options. The $1.8 million year over year decrease in professional services expense is primarily due to equity compensation awarded to the Board of Directors totaling approximately $1.7 million, and by lower legal and consulting expenses of approximately $100,000. Lower rent and insurance costs were offset by an increase in travel and entertainment expense.

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Research and Development Expenses

For the three months ended June 30, 2025, the Company incurred approximately $480,000 in research and development expenses, as compared to approximately $2.3 million for the comparable period in 2024. In the quarter ended June 30, 2025, the Company’s research and development spending included approximately $230,000 of amortization of expenses related to the exchange agreements; there was no amortization of expenses related to the exchange agreements in the three months ending June 30, 2024.

In the quarter ended June 30, 2025, excluding this amortization, the Company had gross research and development spending of approximately $250,000; a $2.0 million decrease in spending from the second quarter of 2024. Of these costs in the second quarter of 2025, $230,000 was attributable to labor and other internal research and development costs, a decrease of approximately $2.0 million from the comparable prior year. The decrease is entirely the result of lower non-cash equity compensation related costs and lower headcount. Third party research and development spending of approximately $20,000 was $15,000 higher than the comparable prior year period due to a slight increase in third party research studies.

	Quarter ended June 30,		Quarter ended June 30,
	2025		2024
Labor and other internal expenses	$	228,022	$	2,245,261
External research expenses		21,615		7,064
Total gross R&D expenses		249,637		2,252,325
Amortization of exchange agreement expenses		230,020		-
Research and development	$	479,657	$	2,252,325

Results of Operations for the six months ended June 30, 2025 and 2024

The following table summarizes ZIVO’s operating results for the periods indicated:

	Six Months ended June 30,
	2025			2024
Total revenue:	$	53,400		$	35,720
Total costs of goods sold		35,478			23,218
Gross margin		17,922			12,502
Costs and expenses:
Research and development		3,248,892			2,565,092
General and administrative		2,610,689			6,952,851
Total costs and expenses		5,859,581			9,517,943
Loss from operations		(5,841,659	)		(9,505,441	)
Other (expense):
Total other expense		(9,759	)		(9,413	)
Net loss	$	(5,851,418	)	$	(9,514,854	)

Revenue

In the six months ended on June 30, 2025 the Company recorded commercial revenue of $53,400 for sales of the Company’s dried algal biomass product as a human food or food ingredient. The $53,400 for the six months ending June 30, 2024 is an increase over the $35,720 in revenue in the same six month period ended June 30, 2024. The approximately $20,000 increase is due to higher sales volumes.

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Costs of Goods Sold

Cost of goods sold for the six months ended June 30, 2025 was $35,478. This is approximately $12,000 higher than the same period last year, explained by the increase in sales volume.

General and Administrative Expenses

General and administrative expenses were approximately $2.6 million for the six months ended June 30, 2025, a decrease from the $7.0 million in the comparable prior year period. The decrease of approximately $4.4 million in general and administrative expense during 2024 is explained by lower labor related costs of approximately $3.0 million and $1.3 million lower professional services, and a reduction in other overhead of $40,000. The $3.0 million decrease in labor related expenses is attributable to lower non-cash equity related employee compensation of $3.4 million partially offset by increases in bonus expense of $400,000. Professional services expense decreases of $1.3 million is due to non-employee board of directors' compensation reductions of $1.4 million, and lower consultant expense of $50,000 partially offset by higher accounting ($175,000) and legal ($5,000). The approximately $40,000 reduction in other overhead is attributable to a $40,000 reduction in insurance expense, lower rent of $10,000, offset by increased spending on travel and entertainment.

Research and Development Expenses

For the six months ended June 30, 2025, the Company incurred approximately $3.2 million in research and development expenses, as compared to approximately $2.6 million in the comparable period in 2024. In the six months ended June 30, 2025, the Company’s research and development spending included approximately $2.7 million of amortization of expenses related to the exchange agreements; there was no amortization of expenses related to the exchange agreements in the six months ending June 30, 2024.

In the six months ended June 30, 2025, excluding this amortization, the Company had gross research and development spending of approximately $500,000; a $2.1 million decrease in spending from the first half of 2024. Of these costs in the first half of 2025, approximately $475,000 was related to labor and other internal lab costs, a decrease of approximately $2.1 million from the comparable prior year, primarily attributable to an decrease in non-cash compensation of $2.0 million. Third party research and development spending of approximately $30,000 was approximately $10,000 higher than the comparable prior year period due to a mild increase in third party research studies.

	Six months ended June 30,		Six months ended June 30,
	2025		2024
Labor and other internal expenses	$	480,487	$	2,543,176
External research expenses		30,123		21,916
Total gross R&D expenses		510,610		2,565,092
Amortization of exchange agreement expenses		2,738,282		-
Research and development	$	3,248,892	$	2,565,092

Liquidity and Capital Resources

As of June 30, 2025, our principal source of liquidity consisted of cash of $9,823. The Company expects to continue to incur significant expenses and increasing operating and net losses for the foreseeable future until and unless we generate an adequate level of revenue from potential commercial sales to cover expenses. The sources of cash to date have been limited proceeds from the issuances of notes with warrants, common stock with and without warrants and unsecured loans.

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Participation Agreements

From April 13, 2020, through May 14, 2021, the Company entered into twenty-one License Co-Development Participation Agreements (the “Participation Agreements”) with certain accredited investors (“Participants”) for an aggregate of $2,985,000. The Participation Agreements provide for the issuance of warrants to such Participants and allows the Participants to participate in the fees (the “Fees”) from licensing or selling bioactive ingredients or molecules derived from ZIVO’s algae cultures. Specifically, ZIVO has agreed to provide to the Participants a 44.775% “Revenue Share” of all license fees generated by ZIVO from any licensee.

The Participation Agreements allow the Company the option to buy back the right, title and interest in the Revenue Share for an amount equal to the amount funded plus a forty percent (40%) premium, if the option is exercised less than 18 months following execution, and for either forty (40%) or fifty percent (50%) if the option is exercised more than 18 months following execution. Pursuant to the terms of twelve of the Participation Agreements, the Company may not exercise its option until it has paid the Participants a revenue share equal to a minimum of thirty percent (30%) of the amount such Participant’s total payment amount. Pursuant to the terms of the one of the Participation Agreements, the Company may not exercise its option until it has paid the Participant a revenue share equal to a minimum of one hundred forty percent (140%) of the amount such Participant’s total payment amount. Five of the Participation Agreements have no minimum threshold payment. Once this minimum threshold is met, the Company may exercise its option by delivering written notice to a Participant of its intent to exercise the option, along with repayment terms of the amount funded, which may be paid, in the Company’s sole discretion, in one lump sum or in four (4) equal quarterly payments. If the Company does not make such quarterly payments timely for any quarter, then the Company shall pay the prorate Revenue Share amount, retroactive on the entire remaining balance owed, that would have been earned during such quarter until the default payments have been made and the payment schedule is no longer in default.

Exchange Agreements

Funding Requirements

Management has noted the existence of substantial doubt about our ability to continue as a going concern. Our existing cash will not be sufficient to fund our operating expenses through at least twelve months from the date of this filing. To continue to fund operations, we will need to secure additional funding through public or private equity or debt financings, through collaborations or partnerships with other companies or other sources. We may not be able to raise additional capital on terms acceptable to us, or at all. Any failure to raise capital when needed could compromise our ability to execute on our business plan. If we are unable to raise additional funds, or if our anticipated operating results are not achieved, we believe planned expenditures may need to be reduced in order to extend the time period that existing resources can fund our operations. If we are unable to obtain the necessary capital, it may have a material adverse effect on our operations and the development of our technology, or we may have to cease operations altogether.

Our material cash requirements relate to the funding of our ongoing product development and for payment of significant levels of accounts payable and accrued executive and employee bonuses. The development of our product candidates is subject to numerous uncertainties, and we could use our cash resources sooner than we expect. Additionally, the process of development is costly, and the timing of progress in pre-clinical tests and clinical trials is uncertain. Our ability to successfully transition to profitability will be dependent upon achieving further regulatory approvals and achieving a level of product sales adequate to support our cost structure. We cannot assure you that we will ever be profitable or generate positive cash flow from operating activities.

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Statement of Cash Flows

Cash Flows from Operating Activities. During the six months ended June 30, 2025, our operating activities used $1.9 million in cash, a decrease of cash used of approximately $400,000 from the comparable prior year period when the Company used approximately $2.3 million for operating activities. After adjusting the comparison period’s net income for non-cash expenses including equity-based compensation and amortization of lease liabilities, the Company incurred approximately $400,000 more of additional cash net loss than in the comparable prior year period. In addition, for the six months ended June 30, 2024, the Company generated about $800,000 more cash than the prior year period through changes in working capital accounts.

Cash Flows from Investing Activities. During the six months ended June 30, 2025 and 2024, there were no investing activities.

Cash Flows from Financing Activities. During the six months ended June 30, 2025, our financing activities generated approximately $400,000, a decrease of approximately $1.7 million from the comparable prior year period when the Company generated approximately $2.1 million from financing activities. In the six months ending June 30, 2025, the Company received proceeds of $150,000 through direct sales of common stock, raised a net $300,000 from proceeds of a short-term financing agreement, and paid $70,000 to repay an outstanding loan. In the six months ended June 30, 2024, the Company received net proceeds of $1.8 million from direct sales of common equity to investors, and raised a net $300,000 from proceeds of a short term financing agreement.

	Six months ended June 30,
	2025			2024
Net cash provided by (used in):
Operating activities	$	(1,906,648	)	$	(2,322,772	)
Investing activities		-			-
Financing activities		374,029			2,050,858
Net increase (decrease) in Cash	$	(1,532,619	)	$	(271,914	)

We estimate that we would require approximately $6.0 million in cash over the next 12 months in order to fund our basic operations, excluding our research and development initiatives. Based on this cash requirement, we have a near term need for additional funding to continue to develop our products and intellectual property. Historically, we have had substantial difficulty raising funds from external sources. If we are unable to raise the required capital, we will be forced to curtail our business operations, including our research and development activities.

Critical Accounting Policies and Significant Judgments and Estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP. The preparation of these financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as of the dates of the balance sheets and the reported amounts of revenue and expenses during the reporting periods. In accordance with GAAP, we base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances at the time such estimates are made. Actual results may differ materially from our estimates and judgments under different assumptions or conditions. We periodically review our estimates in light of changes in circumstances, facts and experience. The effects of material revisions in estimates are reflected in our financial statements prospectively from the date of the change in estimate.

For a discussion of our critical accounting estimates, please read Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on March 18, 2025. There have been no material changes to the critical accounting estimates previously disclosed in our Annual Report on Form 10-K.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable for smaller reporting companies.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act) are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and to ensure that information required to be disclosed is accumulated and communicated to management, including our principal executive and financial officers, to allow timely decisions regarding disclosure. The Chief Executive Officer, as our principal executive officer, and the Chief Financial Officer, as our principal financial and accounting officer, have reviewed the effectiveness of our disclosure controls and procedures and, based on their evaluation, have concluded that the disclosure controls and procedures were not effective as the material weaknesses identified as of December 31, 2024 in our Annual Report on Form 10-K and described below, continue to exist as of June 30, 2025.

Material Weaknesses in Internal Control Over Financial Reporting

Management has determined that the Company had the following material weaknesses in its internal control over financial reporting:

Control Environment, Risk Assessment, and Monitoring

As previously discussed in our Annual Report for the year ended December 31, 2024, management had concluded that our internal control over financial reporting was not effective as of December 31, 2024 , due to: (i) lack of structure and responsibility, insufficient number of qualified resources, and inadequate oversight and accountability over the performance of controls, (ii) ineffective identification and assessment or risks impacting internal control over financial reporting, and (iii) ineffective evaluation and determination as to whether the components of internal control were present and functioning.

Control Activities and Information and Communication

These material weaknesses contributed to the following additional material weaknesses within certain business processes and the information technology environment:

	·	Management did not design and maintain appropriate information technology general controls in the areas of user access, vendor management controls, and segregation of duties, including controls over the recording and review of journal entries, related to certain information technology systems that support the Company’s financial reporting process.

	·	Management did not design, implement, and retain appropriate documentation of formal accounting policies, procedures, and controls across substantially all of the company’s business processes over; (i) the financial reporting process, including management review controls over key disclosures and financial statement support schedules, (ii) the monthly financial close process, including journal entries and account reconciliations and (iii) the completeness and accuracy of information used by control owners in the operation of certain controls, to achieve timely, complete, accurate financial accounting, reporting.

	·	Management did not design and implement controls over the accounting, classification, and application of United States Generally Accounting Principles (“US GAAP”) relating to income taxes, stock-based compensation, and deferred research and development obligations - participation agreements accounting. Specifically:

	·	Management did not identify controls over the review of the tax provision, including the valuation analysis related to deferred tax assets, considerations for uncertain tax positions, the preparation of the income tax footnote and required disclosures and selecting and applying accounting policies;

	·	Management did not identify controls over the accounting and classification of deferred research and development obligations - participation agreements; and

	·	Management did not identify controls over the valuation of stock-based compensation for option awards to employees and members of the board of directors.

Management has concluded that these control deficiencies constitute material weaknesses and continue to exist as of June 30, 2025.

However, after giving full consideration to these material weaknesses, and the additional analyses and other procedures that we performed to ensure that our consolidated financial statements included in this Quarterly Report on Form 10-Q were prepared in accordance with U.S. GAAP, our management has concluded that our consolidated financial statements present fairly, in all material respects, our financial position, results of operations and cash flows for the periods disclosed in conformity with U.S. GAAP.

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Remediation Plans

Management has been implementing and continues to implement measures designed to ensure that control deficiencies contributing to the material weaknesses are remediated, such that these controls are designed, implemented, and operating effectively. The remediation actions include:

	·	Developing a training program and educating control owners concerning the principles of the Internal Control - Integrated Framework (2013) issued by COSO;

	·	Implementing a risk assessment process by which management identifies risks of misstatement related to all account balances;

	·	Developing internal controls documentation, including comprehensive accounting policies and procedures over financial processes and related disclosures;

	·	Enhancing policies and procedures to retain adequate documentary evidence for certain management review controls over certain business processes including precision of review and evidence of review procedures performed to demonstrate effective operation of such controls;

	·	Engaging outside resources for complex accounting matters and drafting and retaining position papers for all complex, non-recurring transactions;

	·	Developing monitoring activities and protocols that will allow us to timely assess the design and the operating effectiveness of controls over financial reporting and make necessary changes to the design of controls, if any

	·	Segregating key functions within our financial and information technology processes supporting our internal controls over financial reporting;

	·	Reassessing and formalizing the design of certain accounting and information technology policies relating to security and change management controls, including user access reviews, including assessing the need for implementing a more robust information technology system;

	·	Continuing to enhance and formalize our accounting, business operations, and information technology policies, procedures, and controls to achieve complete, accurate, and timely financial accounting, reporting and disclosures.

Changes in Internal Control Over Financial Reporting

Except for the remediation actions discussed above, there was no other change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ending June 30, 2025, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we may be subject to litigation and claims arising in the ordinary course of business.

In our opinion, we are not currently a party to any material legal proceedings, and we are not aware of any pending or threatened legal proceedings that are material to our financial condition, either individually or in the aggregate.

Item 1A. Risk Factors

There have been no material changes in our risk factors previously disclosed in Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024. You should carefully consider the risks and uncertainties described therein.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following is a summary of all securities that we have issued from sales of equity beginning on April 1, 2025, without registration under the Securities Act of 1933, as amended (the “Securities Act”):

Common Stock:

Name

Form

Date

Amount Received

Common Stock Shares

David Mendelson

Purchase of Common Stock

24-Apr-25

100,000.00

7,144

Common Stock – Related Parties:

Name

Form

Date

Amount Received

Common Stock Shares

HEP Investments, LLC

Purchase of Common Stock

13-Jun-25

50,000.00

3,488

None of the foregoing transactions involved any underwriters, underwriting discounts or commissions, or any public offering. We believe the offers, sales and issuances of the above securities were exempt from registration under the Securities Act by virtue of Section 4(a)(2) of the Securities Act because the issuance of securities to the recipients did not involve a public offering, or in reliance on Rule 701 because the transactions were pursuant to compensatory benefit plans or contracts relating to compensation as provided under such rule. The recipients of the securities in each of these transactions represented their intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were placed upon the stock certificates issued in these transactions. All recipients had adequate access, through their relationships with us, to information about Zivo. The sales of these securities were made without any general solicitation or advertising.

Item 3. Defaults upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

Exhibit Number		Description

3.1		Articles of Incorporation of the Registrant as amended (incorporated by reference to Exhibit 3.1 to the Registrant’s Quarterly Report on Form 10-Q filed on August 22, 2011)

3.2		Certificate of Amendment to Articles of Incorporation dated October 16, 2014 (incorporated by reference to Exhibit 3.12 to the Registrant’s Current Report on Form 10-Q filed on November 14, 2014)

3.3		Certificate to Amendment dated May 28, 2021 (incorporated by reference to Exhibit 3.1 to the Registrant’s Quarterly Report on Form 8-K filed on June 2, 2021)

3.4		Certificate of Amendment dated October 25, 2023 (incorporated by reference to Exhibit 3.1 to the Registrant’s Quarterly Report on Form 10-Q filed on October 26, 2023)

3.5		Second Amended and Restated By-laws of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on July 7, 2022)

4.1		Description of Securities (incorporated by reference to Exhibit 4.1 of the Registrant’s Annual Report on Form 10-K filed on April 22, 2022)

4.2		Form of Warrant (incorporated by reference to Exhibit 4.2 to the Registrant's Annual Report on Form 10-K filed on April 22, 2022)

4.3		Form of Representative's Warrant (incorporated by reference to Exhibit 4.1 to the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on June 2, 2021)

4.4		Form of Common Stock Purchase Warrant by and between the Registrant and Direct Transfer LLC (incorporated by reference to Exhibit 4.2 to the Registrant's Current Report on Form 8-K filed on June 2, 2021)

4.5		Warrant Agency Agreement (incorporated by reference to Exhibit 4.3 to the Registrant's Registration Statement on Form S-1/A filed on May 26, 2021)

4.6		Stock Purchase Warrant by and between the Registrant and John Bernard Payne (incorporated by reference to Exhibit 4.2 to the Registrant's Current Report on Form 8-K filed on April 5, 2023)

4.7		Form of Series A Common Warrant (incorporated by reference to Exhibit 4.1 to the Registrant's Current Report on Form 8-K filed on July 6, 2023)

4.8		Form of Series B Common Warrant (incorporated by reference to Exhibit 4.2 to the Registrant's Current Report on Form 8-K filed on July 6, 2023)

31.1		Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended

31.2		Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended

32.1		Certification of the Principal Executive Officer pursuant to U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 *

32.2		Certification of the Principal Financial Officer pursuant to U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 *

101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

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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.

	ZIVO BIOSCIENCE, INC.
Date: August 14, 2025

	By:	/s/ John B. Payne
		John B. Payne
		Chief Executive Officer

	By:	/s/ Keith R. Marchiando
		Keith R. Marchiando
		Chief Financial Officer

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SEC Form 10-Q filed by Zivo Bioscience Inc.

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